[Federal Register Volume 70, Number 62 (Friday, April 1, 2005)]
[Proposed Rules]
[Pages 16759-16761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-6417]


 ========================================================================
 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. 62 / Friday, April 1, 2005 / Proposed 
Rules  

[[Page 16759]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. FV05-946-1 PR]


Irish Potatoes Grown in Washington; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the State of Washington Potato Committee (Committee) for the 2005-2006 
and subsequent fiscal periods from $0.002 to $0.0035 per hundredweight 
of potatoes handled. The Committee locally administers the marketing 
order which regulates the handling of Irish potatoes grown in 
Washington. Authorization to assess potato handlers enables the 
Committee to incur expenses that are reasonable and necessary to 
administer the program. The fiscal period begins July 1 and ends June 
30. The assessment rate would remain in effect indefinitely unless 
modified, suspended, or terminated.

DATES: Comments must be received by May 2, 2005.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; E-mail: [email protected]; or 
Internet: http://www.regulations.gov. Comments should reference the 
docket number and the date and page number of this issue of the Federal 
Register and will be available for public inspection in the Office of 
the Docket Clerk during regular business hours, or can be viewed at: 
http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 
SW., Third Avenue, Suite 385, Portland, OR 97204; Telephone: (503) 326-
2724, Fax: (503) 326-7440; or George J. Kelhart, Technical Advisor, 
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.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence SW., 
STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: 
(202) 720-8938.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 113 and Marketing Order No. 946, both as amended (7 CFR 
part 946), regulating the handling of Irish potatoes grown in 
Washington, hereinafter referred to as the ``order.'' The order is 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, Washington 
potato handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. It is intended that the 
assessment rate as proposed herein would be applicable to all 
assessable potatoes beginning July 1, 2005, and continue until amended, 
suspended, or terminated. This rule would not preempt any State or 
local laws, regulations, or policies, unless they present an 
irreconcilable conflict with this rule.
    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 USDA 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. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing 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 USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule would increase the assessment rate established for the 
Committee for the 2005-2006 and subsequent fiscal periods from $0.002 
to $0.0035 per hundredweight of potatoes handled.
    The order provides authority for the Committee, with the approval 
of USDA, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The members of the 
Committee are producers and handlers in Washington. They are familiar 
with the Committee's needs and with the costs for goods and services in 
their local area and are thus in a position to formulate an appropriate 
budget and assessment rate. The assessment rate was formulated and 
discussed at a public meeting, thus all directly affected persons had 
an opportunity to participate and provide input.
    For the 1997-98 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate of $0.002 per 
hundredweight of potatoes handled. This assessment rate continues in 
effect from fiscal period to fiscal period unless modified, suspended, 
or terminated by USDA upon recommendation and information submitted by 
the Committee or other information available to USDA.
    The Committee met on February 3, 2005, and unanimously recommended 
2005-2006 expenditures of $36,750 and an increased assessment rate of 
$0.0035 per ton of potatoes. In comparison, last year's budgeted 
expenditures were $38,500. The recommended assessment rate is $0.0015 
higher than the rate currently in effect. The Committee recommended the 
higher assessment rate to maintain its monetary reserve at a 
satisfactory level.

[[Page 16760]]

    The major expenditures recommended by the Committee for the 2005-
2006 fiscal period include $18,000 for surveillance inspections, $4,800 
for Washington State Potato Commission (Commission) expenses, $3,000 
for office supplies, $3,000 for Committee expense, $1,500 for Committee 
member compensation, and $1,500 for the financial audit. The Committee 
operates under an agreement with the Commission. The Commission 
provides the Committee office space and administrative services. 
Budgeted expenses for these items in 2004-05 were $20,000, $4,800, 
$3,000, $1,500, $1,500, and $2,000, respectively.
    The assessment rate recommended by the Committee was derived by 
multiplying anticipated shipments of Washington potatoes by various 
assessment rates. Applying the $0.0035 per hundredweight assessment 
rate to the Committee's 10,000,000 hundredweight crop estimate should 
provide $35,000 in assessment income. Thus, income derived from handler 
assessments and interest ($800) plus $950 from the Committee's monetary 
reserve would be adequate to cover the recommended $36,750 budget for 
2005-2006. Funds in the reserve were $50,277 as of January 31, 2005. 
The Committee estimates that $17,700 will be deducted from the reserve 
to cover budgeted expenses for 2004-2005. Thus, the Committee estimates 
a reserve of $32,577 on June 30, 2005, which would be within the 
maximum permitted by the order of approximately two fiscal period's 
operational expenses (Sec.  946.42).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although the assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate the 
Committee recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking would be undertaken as necessary. The Committee's 2005-2006 
budget and those for subsequent fiscal periods would be reviewed and, 
as appropriate, approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule 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 in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 51 handlers of Washington potatoes subject 
to regulation under the order and approximately 272 producers in the 
regulated production area. Small agricultural service firms are defined 
by the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts of less than $5,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000.
    During the 2003-2004 marketing year, 10,652,495 hundredweight of 
Washington potatoes were inspected under the order and sold into the 
fresh market. Based on an estimated average f.o.b. price of $7.45 per 
hundredweight, the Committee estimates that 48 handlers, or about 94 
percent, had annual receipts of less than $5,000,000.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for 
Washington potatoes for the 2003 marketing year was $5.25 per 
hundredweight. The average annual producer revenue for the 272 
Washington potato producers is therefore calculated to be approximately 
$205,609. In view of the foregoing, the majority of the Washington 
potato producers and handlers may be classified as small entities.
    This rule would increase the assessment rate established for the 
Committee and collected from handlers for the 2005-2006 and subsequent 
fiscal periods from $0.002 to $0.0035 per hundredweight for potatoes. 
The Committee unanimously recommended 2005-2006 expenditures of $36,750 
and the $0.0035 per hundredweight assessment rate. The proposed 
assessment rate of $0.0035 is $0.0015 higher than the 2003-2004 rate. 
With an estimated 2005-2006 potato crop of 10,000,000 hundredweight, 
the $0.0035 rate should provide the Committee with $35,000 in 
assessment income which combined with interest income and funds from 
the monetary reserve would be adequate to cover budgeted expenses. The 
Committee recommended the higher assessment rate to help ensure that 
its monetary reserve is maintained at a satisfactory level. Funds in 
the reserve were $50,277 as of January 31, 2005. The Committee 
estimates that $17,700 will be deducted from the reserve to cover 
budgeted expenses for 2004-2005. Thus, the Committee estimates a 
reserve of $32,577 on June 30, 2005, which would be within the maximum 
permitted by the order of approximately two fiscal period's operational 
expenses (Sec.  946.42).
    The major expenditures recommended by the Committee for the 2005-
2006 fiscal period include $18,000 for surveillance inspections, $4,800 
for Washington State Potato Commission (Commission) expenses, $3,000 
for office supplies, and $3,000 for Committee expense, $1,500 for 
Committee member compensation, and $1,500 for the financial audit. The 
Committee operates under an agreement with the Commission. The 
Commission provides the Committee office space and administrative 
services. Budgeted expenses for these items in 2004-05 were $20,000, 
$4,800, $3,000, $1,500, $1,500, and $2,000, respectively.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels. The Committee ultimately determined 
that the recommended expenses were reasonable. Lower assessment rates 
were considered, but not recommended because they would not generate 
the income necessary to administer the program with an adequate 
reserve.
    A review of historical information and preliminary information 
pertaining to the upcoming crop year indicates that the producer price 
for the 2005-2006 season could range from about $5.25 per hundredweight 
and about $5.85 per hundredweight. Therefore, the estimated assessment 
revenue for the 2005-2006 fiscal period as a percentage of total 
producer revenue could range between 0.060 and 0.067 percent.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the order. 
In addition, the Committee's

[[Page 16761]]

meeting was widely publicized throughout the Washington potato industry 
and all interested persons were invited to attend and participate in 
the Committee's deliberations on all issues. Like all Committee 
meetings, the February 3, 2005, meeting was a public meeting and all 
entities, both large and small, were able to express views on this 
issue. Finally, interested persons are invited to submit information on 
the regulatory and informational impacts of this action on small 
businesses.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large Washington potato 
handlers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ama.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2005-2006 fiscal period begins on July 1, and the 
marketing order requires that the rate of assessment for each fiscal 
period apply to all assessable Washington potatoes handled during such 
fiscal period; (2) the Committee needs to have sufficient funds to pay 
for expenses which are incurred on a continuous basis; and (3) handlers 
are aware of this action which was unanimously recommended by the 
Committee at a public meeting and is similar to other assessment rate 
actions issued in past years.

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 946 is 
proposed to be amended as follows:

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. Section 946.248 is revised to read as follows:


Sec.  946.248  Assessment rate.

    On and after July 1, 2005, an assessment rate of $0.0035 per 
hundredweight is established for Washington potatoes.

    Dated: March 28, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-6417 Filed 3-31-05; 8:45 am]
BILLING CODE 3410-02-P