[Federal Register Volume 70, Number 29 (Monday, February 14, 2005)]
[Proposed Rules]
[Pages 7437-7442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2743]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 70, No. 29 / Monday, February 14, 2005 / 
Proposed Rules  

[[Page 7437]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. AO-F&V-946-3 FV03-946-01]


Irish Potatoes Grown in Washington; Secretary's Decision and 
Referendum Order on Proposed Amendments to Marketing Agreement and 
Order No. 946

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule and referendum order.

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SUMMARY: This decision proposes amending the marketing agreement and 
order (order) for Irish potatoes grown in Washington, and provides 
producers with the opportunity to vote in a referendum to determine if 
they favor the changes. The amendments are based on those proposed by 
the State of Washington Potato Committee (Committee), which is 
responsible for local administration of the order. These amendments 
include: adding authority for container and marking regulations; 
requiring Committee producer members to have produced potatoes for the 
fresh market in at least 3 out of the last 5 years prior to nomination; 
updating order provisions pertaining to establishment of districts and 
apportionment of Committee membership among those districts; requiring 
Committee nominees to submit a written background and acceptance 
statement prior to selection by USDA; allowing for nominations to be 
held at industry meetings or events; adding authority to change the 
size of the Committee; and adding authority to allow temporary 
alternates to serve when a Committee member and that member's alternate 
are unable to serve.
    The USDA proposed two additional amendments: to establish tenure 
limitations for Committee members, and to require that continuance 
referenda be conducted on a periodic basis to ascertain producer 
support for the order. The proposed amendments are intended to improve 
the operation and functioning of the marketing order program.

DATES: The referendum will be conducted from March 18 through April 8, 
2005. The representative period for the purpose of the referendum is 
July 1, 2003 through June 30, 2004.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, Agricultural 
Marketing Service, USDA, Post Office Box 1035, Moab, UT 84532, 
telephone: (435) 259-7988, fax: (435) 259-4945.
    Small businesses may request information on this proceeding by 
contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., Stop 
0237, Washington, DC 20250-0237; telephone: (202) 720-2491, fax: (202) 
720-8938.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice 
of Hearing issued on October 6, 2003, and published in the October 10, 
2003, issue of the Federal Register (68 FR 58638), and a Recommended 
Decision issued on November 19, 2004 and published in the November 26, 
2004 issue of the Federal Register (69 FR 68819).
    This action is governed by the provisions of sections 556 and 557 
of title 5 of the United States Code and is therefore excluded from the 
requirements of Executive Order 12866.

Preliminary Statement

    The amendments are based on the record of a public hearing held 
November 20, 2003, in Moses Lake, Washington. The hearing was held to 
consider the proposed amendment of Marketing Agreement and Order No. 
946, regulating the handling of Irish potatoes grown in the State of 
Washington, hereinafter referred to as the ``order.'' The hearing was 
held pursuant to the provisions of the Agricultural Marketing Agreement 
Act of 1937, as amended (7 U.S.C. 601 et seq.), hereinafter referred to 
as the ``Act,'' and the applicable rules of practice and procedure 
governing the formulation of marketing agreements and marketing orders 
(7 CFR part 900). The Notice of Hearing contained numerous proposals 
submitted by the Committee and two proposals by the Agricultural 
Marketing Committee (AMS).
    The amendments included in this decision would: add authority to 
establish container and marking regulations; require Committee producer 
members to have produced potatoes for the fresh market in at least 3 
out of the last 5 years prior to nomination; update provisions 
pertaining to districts and allocation of Committee membership among 
those districts; require Committee nominees to submit a written 
background and acceptance statement prior to selection by USDA; allow 
for nominations to be held at industry meetings or events; add 
authority to change the size of the Committee; and add authority to 
allow temporary alternates to serve when a Committee member and that 
member's alternate are unable to serve.
    The USDA proposed two additional amendments: to establish tenure 
limitations for Committee members, and require that continuance 
referenda be conducted on a periodic basis to ascertain producer 
support for the order. In addition, USDA proposed to allow such changes 
as may be necessary to the order, if any of the proposed changes are 
adopted, so that all of the order's provisions conform to the 
effectuated amendments.
    Upon the basis of evidence introduced at the hearing and the record 
thereof, the Administrator of AMS on November 19, 2004, filed with the 
Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision 
and Opportunity to File Written Exceptions thereto by December 27, 
2004. No exceptions were filed.

Small Business Considerations

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), AMS has considered the economic impact of this 
action on small entities. Accordingly, AMS has prepared this initial 
regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions so that small businesses will not be 
unduly or disproportionately burdened. Marketing orders and amendments 
thereto are unique in that they are normally brought about through 
group action of essentially small entities for their own benefit. Thus, 
both the RFA and the Act are compatible with respect to small entities.

[[Page 7438]]

    Small agricultural producers have been defined by the Small 
Business Administration (SBA) (13 CFR 121.201) as those having annual 
receipts of less than $750,000. Small agricultural service firms, which 
include handlers regulated under the order, are defined as those with 
annual receipts of less than $5,000,000.
    Interested persons were invited to present evidence at the hearing 
on the probable regulatory and informational impact of the proposed 
amendments to the order on small businesses. The record evidence is 
that while minimal costs may occur upon implementation of some of the 
proposed amendments, those costs would be outweighed by the benefits 
expected to accrue to the Washington fresh potato industry.
    The record indicates that there are about 39 fresh potato handlers 
currently regulated under the order. With total fresh sales valued at 
$108 million, on average, these handlers each received $2.8 million. In 
addition, there are about 160 producers of fresh potatoes in the 
production area. With total fresh sales at the producer level valued at 
$58 million, each grower's average receipts would be $362,500. 
Witnesses testified that about 76 percent of these producers are small 
businesses.
    It is reasonable to conclude that a majority of the fresh 
Washington potato handlers and producers are small businesses.

Potato Industry Overview

    Record evidence supplied by the Washington State Potato Commission 
indicates that there are approximately 323 potato producers in the 
State, of which approximately 160 (50 percent) are producers of fresh 
market potatoes. Approximately 76 percent of the fresh market potato 
producers are small entities, according to the SBA definition. Many of 
these farming operations also produce potatoes for the processing 
market. The Washington State potato industry also includes 39 handlers 
and 12 processing plants.
    A 2001 publication of Washington State University (WSU) Extension 
estimated that total demand for potatoes produced in Washington State 
was $495 million dollars. Of this total sales value figure for 
Washington potato producers, fresh market potato pack-out represented 
approximately 12 percent, with producer sales valued at $58 million. 
The largest proportion of the crop ($357 million or 72 percent) was 
represented by sales to the frozen potato product market, principally 
for French fries. Other uses included seed potatoes, dehydration and 
potato chips.
    The WSU report also explained that the supply of fresh market 
potatoes is handled by various potato packers (handlers) whose 
operations vary in size. These handlers supply the retail market, 
including supermarkets and grocery stores, as well as restaurants and 
other foodservice operations. Potatoes are prepared for the fresh 
market by cleaning, sorting, grading, and packaging before shipment is 
made to final destinations. Due to customer specifications about sizes, 
shapes, and blemishes, as well as the minimum quality, size, and 
maturity regulations of the order, about 42-43 percent of the potatoes 
delivered to handlers are graded out of the fresh market. Potatoes not 
meeting grade are generally delivered to processors for use in the 
frozen French fry and dehydrated potato markets. The total output of 
the fresh pack industry in terms of sales value is $108 million.
    Washington State acreage and production is second only to that of 
Idaho, but its yields per acre are the highest of any State in the 
United States. Produced on 165,000 acres, total potato production in 
Washington in 2002 was 92.4 million hundredweight, with an average 
yield of 560 hundredweight per acre. Over the last several years, 
Washington has produced about 21 percent of the total U.S. potato 
production on about 13 percent of the total acreage dedicated to 
potatoes. Washington's share of the total value has been about 17 
percent of the nation's total. Fresh utilization has varied between 11 
percent and 15 percent from 1993 through 2002. These figures are based 
on data published by the USDA's National Agricultural Statistical 
Service (NASS).
    The record indicates that soil type, climate, and number of 
irrigated acres combine to make Washington an excellent area to grow 
potatoes. In 2000, Washington produced a record crop with 105 million 
hundredweight grown on 175,000 acres with a total industry value of 
$555.2 million. This represents a substantial increase from 1949--the 
year in which the marketing order was established--in which producers 
harvested 29,000 acres with a yield of 6.4 million hundredweight of 
potatoes valued at $14.8 million. According to testimony, the producer 
price per hundredweight of potatoes was $2.30 in 1949 and $5.40 in 
2002.

The Role of U.S. No. 2 Grade Potatoes in the Washington Potato Industry

    Witnesses at the hearing explained that potato production is 
dependent on many factors over which they have little control, 
including water availability, weather, and pest and weed pressures. For 
example, the potato crop may be of higher average quality one year, 
yielding an increased supply of U.S. No. 1 grade potatoes, and have an 
overall lower quality the next year with a preponderance of U.S. No. 2 
grade potatoes.
    According to testimony, U.S. No. 2 grade potatoes in Washington are 
generally diverted for use in making dehydrated potato products. In 
addition, U.S. No. 2 grade potatoes are occasionally in demand as 
``peelers'' for use in soups and salads, or as ``natural'' fries. 
Regardless of the secondary products markets, witnesses explained, the 
fresh, table stock market is an important additional market for U.S. 
No. 2 grade potatoes. Witnesses explained that the Washington potato 
industry cannot currently take advantage of this market without 
container marking authority. Having the additional flexibility to pack 
U.S. No. 2 grade potatoes in labeled cartons would help the industry 
overall.

Economic Impact of Proposal 1, Adding Container and Marking Regulatory 
Authority

    The proposal described in Material Issue No. 1 would amend Sec.  
946.52, Issuance of regulations, to add authority for the Committee to 
recommend container and marking regulations to the USDA for subsequent 
implementation. This would be in addition to the existing authority for 
grade, size, quality and maturity requirements.
    In testifying in support of this amendment, witnesses cited an 
example of how this authority could be used. They stated that the 
Committee wants to respond to customer demand for U.S. No. 2 grade 
potatoes packed in cartons, but at the same time it wants to ensure 
that such cartons would be properly labeled. Three people testified in 
favor of this proposal, and no one testified in opposition. The three 
witnesses covered similar themes in expressing their views on the 
proposal.
    Each stated that the U.S. potato market is highly competitive and 
that the potato industry in Washington needs to be vigilant in 
responding to market needs so as not to lose market share to other 
states. Testimony indicated that the fresh market potato industry in 
Washington needs to ensure that their customers are receiving what they 
order, and must remain flexible and innovative. All three witnesses 
emphasized that offering appropriate packaging is a key element of 
being flexible and responsive to customers.
    The witnesses offered an historical perspective by pointing out 
that 40

[[Page 7439]]

years ago, the industry standard for potato packaging was a 50 or 100-
pound burlap bag. The passing of 30 years saw the phasing in of 50-
pound cartons and polyethylene (poly) bags. Now, potatoes are shipped 
in burlap, cartons, poly, mesh, cardboard bulk displays and baler bags. 
Container sizes can range from 2 pounds to 100 pounds. It was 
emphasized that the industry is constantly looking for new packaging 
and delivery methods.
    Witnesses stated that as early as 1994, the Committee began 
receiving requests from retailers and wholesalers to pack U.S. No. 2 
grade potatoes from Washington in 50 lb. cartons. These customers cited 
a number of reasons for wanting the U.S. No. 2 grade potatoes in 
cartons, including ease of handling and stacking in warehouses, 
improved worker safety, and better product protection (for example, 
less ``greening'' from exposure to light, and reduced bruising during 
transport.)
    Although authority exists in the order for the Committee to 
recommend regulations to allow packing of U.S. No. 2 grade potatoes in 
cartons, witnesses explained that up until now the Committee has chosen 
not to permit this lower grade to be packed in cartons because of the 
inability to mandate labeling. The current handling regulations specify 
that only U.S. No. 1 or better grade potatoes may be packed in cartons, 
and as such, buyers of Washington potatoes have learned to expect this 
premium grade when purchasing potatoes in cartons. Adding this labeling 
authority would provide assurance to customers and to the industry that 
the product being shipped is properly identified. Mandatory labeling 
prevents handlers from misrepresenting the quality of the potatoes 
packed in the carton. Even one handler sending substandard product to 
customers can mar the reputation of the Washington State potato 
industry, according to witnesses.
    Witnesses stated that upholding the integrity of the Washington 
State potato industry is as important to producers as meeting customer 
specifications. Mandating labeling would help ensure product integrity. 
The Committee has discussed that without the labeling authority, a 
customer could potentially receive U.S. No. 2 grade potatoes from a 
handler, thinking that they are of U.S. No. 1 grade quality. This could 
damage customer perceptions of the higher-grade potatoes coming out of 
Washington. Labeling authority would help alleviate consumer perception 
problems. Further, not only would it help verify that handlers are 
putting the right product into the right packaging, but it also would 
assure customers that they are actually receiving what they have 
ordered.
    Witnesses also emphasized the minimal additional cost of 
implementing this proposal. They point out that handlers' facilities 
are already configured for packing potatoes in cartons, and for 
labeling those cartons, so there is no need for any equipment changes 
or additions. In the witnesses' view, any additional costs a handler 
would have in packing potatoes in cartons rather than sacks would be 
offset by the increased selling price.
    The USDA concurs that adding container and marking authority would 
be a useful market-facilitating improvement to the order. Requiring 
labeling of cartons would help to improve market transactions between 
seller and buyer by assuring all concerned as to the exact content of 
such cartons. Washington producers and handlers would benefit from 
taking advantage of another market niche, with minimal additional cost.
    Testimony and industry data together indicate that little to no 
differential impact between small versus large producers or handlers 
would result from the proposed amendment to authorize container and 
labeling requirements. Although not easily quantifiable, the USDA 
concurs that benefits to the potato industry appear to substantially 
outweigh the potential costs associated with implementing this 
proposal.

Economic Impact of Remaining Amendment Proposals

    Remaining amendment proposals are administrative in nature and 
would impose no new regulatory burdens on Washington potato producers 
or handlers. They should benefit the industry by improving the 
operation of the program and making it more responsive to industry 
needs.
    Producer members of the Committee are currently required to be 
producers in the district they are nominated to represent. Adding 
another eligibility requirement--that they be producers of fresh 
potatoes--would ensure that the Committee is representative of, and 
responsive to, those producers the program impacts most directly. No 
additional costs would be incurred.
    Replacing obsolete order language pertaining to establishment of 
districts and allocation of Committee membership among those districts 
would simply update the order. To the extent updating order language 
simplifies the program and reduces confusion, it would benefit the 
industry.
    Currently, Committee member nominees are required to complete a 
Background Statement before selection by USDA, and an Acceptance Letter 
subsequent to selection. Combining these into a single form would 
streamline the appointment process and reduce reporting requirements 
imposed on Committee members.
    Nominations of Committee members can be conducted through mail 
balloting or at meetings held in each of the five established 
districts. Allowing nominations to be made at larger, industry-wide 
meetings would provide the industry with an additional option. This 
option could result in the Committee reaching a larger audience of 
producers and handlers, thereby broadening industry participation and 
facilitating the nomination process.
    The Washington Potato Committee consists of 10 producers, 5 
handlers, and their alternates. Changing the size of the Committee 
would allow the industry to adjust to changes in fresh potato 
production patterns and in the number of active industry participants. 
An increase in Committee size could lead to marginally higher program 
costs because Committee members are reimbursed for expenses they incur 
in attending meetings and performing other duties under the order. A 
reduction in Committee size (deemed to be more likely according to the 
record) would likewise reduce program costs. Any recommendation to 
change the size of the Committee would be considered in terms of cost 
and the need to ensure appropriate representation of producers and 
handlers in Committee deliberations.
    Committee members serve 3-year terms of office, with no limit on 
the number of terms they may serve. The proposed amendment to add 
tenure requirements, limiting persons to two consecutive three-year 
terms, would allow more persons the opportunity to serve as Committee 
members. It would provide for more diverse membership, provide new 
perspectives and ideas, and increase the number of individuals in the 
industry with Committee experience. No additional costs are expected to 
incur because of this proposed amendment.
    The recommendation to require periodic continuance referenda to 
ascertain industry support for the program would allow producers the 
opportunity to vote on whether to continue the operation of the order. 
Most of the costs associated with referenda are borne by USDA. Ensuring 
that the program is administered in response to producer needs would 
outweigh these costs.

[[Page 7440]]

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C. 
35), any reporting and recordkeeping provision changes that would be 
generated by the proposed amendments would be submitted to the Office 
of Management and Budget (OMB). Current information collection 
requirements for Part 946 are approved by OMB under OMB number 0581-
0178.
    The Washington Potato Committee recommended amending producer 
eligibility requirements to require production of potatoes for the 
fresh market for 3 out of the 5 years of production prior to 
nomination. The Committee has also made recommendations that would 
streamline the nomination process and increase industry participation 
in nominations. In conformance with these recommendations, the 
confidential qualification and acceptance statement will be combined in 
the appointment of committee members. This form is based on the 
currently approved Confidential Background Statement for the Washington 
Potato Marketing Committee, and no change in the information collection 
burden or further OMB approval is necessary.

Civil Justice Reform

    The amendments to Marketing Order 946 proposed herein have been 
reviewed under Executive Order 12988, Civil Justice Reform. They are 
not intended to have retroactive effect. If adopted, the proposed 
amendments would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
proposal.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Department a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing, the USDA would rule on the petition. The 
Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction to review the 
Department's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.

Findings and Conclusions

    The findings and conclusions, rulings, and general findings and 
determinations included in the Recommended Decision set forth in the 
November 26, 2004, issue of the Federal Register are hereby approved 
and adopted.

Marketing Agreement and Order

    Annexed hereto and made a part hereof is the document entitled 
``Order Amending the Order Regulating the Handling of Irish Potatoes 
Grown in Washington.'' This document has been decided upon as the 
detailed and appropriate means of effectuating the foregoing findings 
and conclusions.
    It is hereby ordered, That this entire decision be published in the 
Federal Register.

Referendum Order

    It is hereby directed that a referendum be conducted in accordance 
with the procedure for the conduct of referenda (7 CFR 900.400 et seq.) 
to determine whether the annexed order amending the order regulating 
the handling of Irish potatoes grown in Washington is approved or 
favored by producers, as defined under the terms of the order, who 
during the representative period were engaged in the production of 
Irish potatoes in the production area.
    The representative period for the conduct of such referendum is 
hereby determined to be July 1, 2003, through June 30, 2004.
    The agent of the Secretary to conduct such referendum is hereby 
designated to be Teresa Hutchinson and Gary Olson, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, room 369, 
Portland, Oregon 97204; telephone (503) 326-2724.

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    Dated: February 8, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.

Order Amending the Order Regulating the Handling of Irish Potatoes 
Grown in Washington \1\
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    \1\ This order shall not become effective unless and until the 
requirements of Sec.  900.14 of the rules of practice and procedure 
governing proceedings to formulate marketing agreements and 
marketing orders have been met.
---------------------------------------------------------------------------

Findings and Determinations

    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the marketing agreement and order; and all said 
previous findings and determinations are hereby ratified and affirmed, 
except insofar as such findings and determinations may be in conflict 
with the findings and determinations set forth herein.
    (a) Findings and Determinations Upon the Basis of the Hearing 
Record.
    Pursuant to the provisions of the Agricultural Marketing Agreement 
Act of 1937, as amended (7 U.S.C. 601 et seq.), and the applicable 
rules of practice and procedure effective thereunder (7 CFR part 900), 
a public hearing was held upon the proposed amendments to the Marketing 
Agreement and Order No. 946 (7 CFR part 946), regulating the handling 
of Irish potatoes grown in Washington. Upon the basis of the evidence 
introduced at such hearing and the record thereof, it is found that:
    (1) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, and all of the terms and conditions 
thereof, would tend to effectuate the declared policy of the Act;
    (2) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, regulate the handling of Irish potatoes 
grown in the production area in the same manner as, and are applicable 
only to, persons in the respective classes of commercial and industrial 
activity specified in the marketing agreement and order upon which a 
hearing has been held;
    (3) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, are limited in their application to the 
smallest regional production area which is practicable, consistent with 
carrying out the declared policy of the Act, and the issuance of 
several orders applicable to subdivisions of the production area would 
not effectively carry out the declared policy of the Act;
    (4) The marketing agreement and order, as amended, and as hereby 
proposed to be further amended, prescribe, insofar as practicable, such 
different terms applicable to different parts of the production area as 
are necessary to give due recognition to the differences in the 
production and marketing of Irish potatoes grown in the production 
area; and
    (5) All handling of Irish potatoes grown in the production area as 
defined

[[Page 7441]]

in the marketing agreement and order, is in the current of interstate 
or foreign commerce or directly burdens, obstructs, or affects such 
commerce.

Order Relative to Handling

    It is therefore ordered, That on and after the effective date 
hereof, all handling of Irish potatoes grown in Washington shall be in 
conformity to, and in compliance with, the terms and conditions of the 
said order as hereby proposed to be amended as follows:
    The provisions of the proposed marketing agreement and order 
amending the order contained in the Recommended Decision issued by the 
Administrator on November 19, 2004, and published in the Federal 
Register on November 26, 2004, will be and are the terms and provisions 
of this order amending the order and are set forth in full herein.

PART 946--IRISH POTATOES GROWN IN WASHINGTON

    1. The authority citation for 7 CFR part 946 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Add a new Sec.  946.17 to read as follows:


Sec.  946.17  Pack.

    Pack means a quantity of potatoes in any type of container and 
which falls within the specific weight limits or within specific grade 
and/or size limits, or any combination thereof, recommended by the 
committee and approved by the Secretary.
    3. Add a new Sec.  946.18 to read as follows:


Sec.  946.18  Container.

    Container means a sack, box, bag, crate, hamper, basket, carton, 
package, barrel, or any other type of receptacle used in the packing, 
transportation, sale or other handling of potatoes.
    4. In Sec.  946.22, designate the current text as paragraph (a) and 
add a new paragraph (b) to read as follows:


Sec.  946.22  Establishment and membership.

* * * * *
    (b) The Secretary, upon recommendation of the committee, may 
reestablish districts, may reapportion members among districts, may 
change the number of members and alternate members, and may change the 
composition by changing the ratio of members, including their 
alternates. In recommending any such changes, the following shall be 
considered:
    (1) Shifts in acreage within districts and within the production 
area during recent years;
    (2) The importance of new production in its relation to existing 
districts;
    (3) The equitable relationship between committee apportionment and 
districts; and,
    (4) Other relevant factors.
    5. In Sec.  946.23, designate the current text as paragraph (a) and 
add a new paragraph (b) to read as follows:


Sec.  946.23  Alternate members.

* * * * *
    (b) In the event that both a member and his or her alternate are 
unable to attend a Committee meeting, the member, the alternate member, 
or the Committee members present, in that order, may designate another 
alternate of the same classification (handler or producer) to serve in 
such member's place and stead.
    6. Section 946.24 is revised to read as follows:
    A. Revising paragraph (a).
    B. Redesignating paragraph (b) as paragraph (c).
    C. Adding a new paragraph (b).
    The revisions read as follows:


Sec.  946.24  Procedure.

    (a) Sixty percent of the committee members shall constitute a 
quorum and a concurring vote of 60 percent of the committee members 
will be required to pass any motion or approve any committee action.
    (b) The quorum and voting requirements of paragraph (a) of this 
section shall not apply to the designation of temporary alternates as 
provided in Sec.  946.23.
    (c) The committee may provide for meetings by telephone, telegraph, 
or other means of communication and any vote cast at such a meeting 
shall be confirmed promptly in writing: Provided, That if any assembled 
meeting is held, all votes shall be cast in person.
    7. Section 946.25 is amended by:
    A. Revising paragraph (a).
    B. Revising paragraph (c).
    The revisions read as follows:


Sec.  946.25  Selection.

    (a) Persons selected as committee members or alternates to 
represent producers shall be individuals who are producers of fresh 
potatoes in the respective district for which selected, or officers or 
employees of a corporate producer in such district. Such individuals 
must also have produced potatoes for the fresh market for at least 
three out of the five years prior to nomination.
    (b) * * *
    (c) The Secretary shall select committee membership so that, during 
each fiscal period, each district, as designated in Sec.  946.31, will 
be represented as follows:
    (1) District No. 1--Three producer members and one handler member;
    (2) District No. 2--Two producer members and one handler member;
    (3) District No. 3--Two producer members and one handler member;
    (4) District No. 4--Two producer members and one handler member;
    (5) District No. 5--One producer member and one handler member.
    8. Revise Sec.  946.26 to read as follows:


Sec.  946.26  Acceptance.

    Any person nominated to serve as a member or alternate member of 
the committee shall, prior to selection by USDA, qualify by filing a 
written background and acceptance statement indicating such person's 
willingness to serve in the position for which nominated.
    9. Amend Sec.  946.27 by revising paragraph (a) to read as follows:


Sec.  946.27  Term of office.

    (a) The term of office of each member and alternate member of the 
committee shall be for 3 years beginning July 1 and continuing until 
their successors are selected and have qualified. The terms of office 
of members and alternates shall be determined so that about one-third 
of the total committee membership is selected each year. Committee 
members shall not serve more than 2 consecutive terms. Members who have 
served for 2 consecutive terms will be ineligible to serve as a member 
for 1 year.
* * * * *
    10. Revise Sec.  946.31 to read as follows:


Sec.  946.31  Districts.

    For the purpose of determining the basis for selecting committee 
members, the following districts of the production area are hereby 
established:
    (a) District No. 1--The counties of Ferry, Stevens, Pend Oreille, 
Spokane, Whitman, and Lincoln, plus the East Irrigation District of the 
Columbia Basin Project, plus the area of Grant County not included in 
either the Quincy or South Irrigation Districts which lies east of 
township vertical line R27E, plus the area of Adams County not included 
in either of the South or Quincy Irrigation Districts.
    (b) District No. 2--The counties of Kittitas, Douglas, Chelan, and 
Okanogan, plus the Quincy Irrigation District of the Columbia Basin 
Project, plus the area of Grant County not included in the East or 
South Irrigation Districts which lies west of township line R28E.
    (c) District No. 3--The counties of Benton, Klickitat, and Yakima.

[[Page 7442]]

    (d) District No. 4--The counties of Walla Walla, Columbia, 
Garfield, and Asotin, plus the South Irrigation District of the 
Columbia Basin Project, plus the area of Franklin County not included 
in the South District.
    (e) District No. 5--All of the remaining counties in the State of 
Washington not included in Districts No. 1, 2, 3, and 4 of this 
section.
    11. Amend Sec.  946.32 by revising paragraph (a) to read as 
follows:


Sec.  946.32  Nomination.

* * * * *
    (a) Nominations for Committee members and alternate members shall 
be made at a meeting or meetings of producers held by the Committee or 
at other industry meetings or events not later than May 1 of each year; 
or the Committee may conduct nominations by mail not later than May 1 
of each year in a manner recommended by the Committee and approved by 
the Secretary.
* * * * *
    12. Amend Sec.  946.52 by adding a new paragraph (a)(5) to read as 
follows:


Sec.  946.52  Issuance of regulations.

    (a) * * *
    (5) To regulate the size, capacity, weight, dimensions, pack, and 
marking or labeling of the container, or containers, which may be used 
in the packing or handling of potatoes, or both.
* * * * *
    13. In Sec.  946.63, redesignate paragraph (d) as paragraph (e) and 
add a new paragraph (d) to read as follows:


Sec.  946.63  Termination.

* * * * *
    (d) The Secretary shall conduct a referendum six years after the 
effective date of this paragraph and every sixth year thereafter to 
ascertain whether producers favor continuance of this part.
* * * * *
[FR Doc. 05-2743 Filed 2-11-05; 8:45 am]
BILLING CODE 3410-02-P