[Federal Register Volume 70, Number 147 (Tuesday, August 2, 2005)]
[Rules and Regulations]
[Pages 44252-44256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15170]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. FV05-946-2 FR]


Irish Potatoes Grown in Washington; Modification of Special 
Purpose Shipment Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule modifies the special purpose shipment regulations 
currently prescribed under the Washington potato marketing order. The 
marketing order regulates the handling of Irish potatoes grown in 
Washington, and is administered locally by the State of Washington 
Potato Committee (Committee). This rule modifies the reporting 
requirements, procedures, and safeguard provisions for making certain 
special purpose potato shipments. Under the marketing order, such 
special purpose shipments may be exempted from the quality, assessment, 
or inspection requirements. The changes include removal of the special 
purpose exemption for exported potatoes, clarification of the reporting 
procedures for potatoes diverted to processing, and addition of 
safeguard provisions for shipments of seed potatoes and shipments to 
charitable organizations. These changes will help facilitate special 
purpose shipments, while enhancing the Committee's compliance program.

DATES: This final rule becomes effective August 3, 2005.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW 
Third Avenue, Suite 385, Portland, Oregon 97204; Telephone: (503) 326-
2724, Fax: (503) 326-7440; or George 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 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This final 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 final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This rule will 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. A 
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 final rule modifies the special purpose shipment regulations 
prescribed under the order. This rule modifies the reporting 
requirements, procedures, and safeguard provisions for making certain 
special purpose potato shipments. Under the marketing order, such 
special purpose shipments may be exempt from the quality, assessment, 
or inspection requirements. The modifications were recommended 
unanimously by the Committee at a meeting on February 3, 2005.

[[Page 44253]]

    Section 946.52 of the order authorizes the establishment of grade, 
size, quality, maturity, and pack regulations for any variety or 
varieties of potatoes grown in the production area. Section 946.51 
further authorizes the modification, suspension, or termination of 
regulations issued under Sec.  946.52. Section 946.60 provides that 
whenever potatoes are regulated pursuant to Sec.  946.52 such potatoes 
must be inspected by the Federal-State Inspection Service, and 
certified as meeting the applicable requirements of such regulations. 
Section 946.54 authorizes the modification, suspension, or termination 
of any or all regulations to facilitate shipments of potatoes for 
specified purposes. Section 946.55 authorizes safeguard requirements 
for shipments authorized pursuant to Sec.  946.54.
    Section 946.120 of the order's administrative rules specifies the 
application process required when potatoes are shipped for special 
purposes pursuant to Sec.  946.54. Section 946.336 of the order's 
administrative rules prescribes the quality, maturity, cleanness, pack, 
special purpose shipments, safeguards, minimum quantity exemption, and 
inspection requirements for all fresh market Washington potatoes, 
except for blue or purple flesh varieties of potatoes. Section 
946.336(d) lists the types of special purpose shipments and the minimum 
grade, size, cleanness, maturity, pack, assessment, and inspection 
requirements from which such shipments are exempted. Finally, Sec.  
946.336(e) prescribes the safeguard requirements that handlers must 
meet to make the special purpose shipments specified under Sec.  
946.336(d).
    At its meeting on June 17, 2004, the Committee appointed a 
subcommittee to review the order's handling regulations. The 
subcommittee subsequently met on November 22, 2004, and while reviewing 
the regulations, identified several potential changes to the special 
purpose shipment procedures, safeguard requirements, and reporting 
requirements. These changes were further discussed and ratified at an 
Executive Committee meeting on January 20, 2005, and subsequently 
recommended to the full Committee at its February 3, 2005, meeting in 
Moses Lake, Washington.
    At this meeting, the Committee unanimously adopted the subcommittee 
recommendations which entailed modifications to Sec.  946.120 
Application, Sec.  946.336(d) Special Purpose Shipments, and Sec.  
946.336(e) Safeguards. To conform to the regulatory modifications, as 
well as to ensure consistency in the administration of the special 
purpose procedures, the Committee also recommended that the ``Shippers 
Application for Special Purpose Certificate'' (Application) and 
``Special Purpose Certificate Report'' (Report) forms be updated.
    Procedures in effect prior to this final rule required that each 
handler apply annually to the Committee for a Special Purpose Shipment 
Certificate if planning to make certain specified special purpose 
shipments. In addition, based on the safeguard provisions under each of 
the special purpose shipment requirements, each handler and receiver of 
special purpose potatoes may or may not have been required to submit a 
report to the Committee for each such shipment depending upon the 
specific provision. This rule not only clarifies these procedures by 
making them consistent throughout the rules and regulations, but also 
changes certain provisions in order to be consistent with the 
Committee's current operating preferences.
    For example, under the procedures in effect prior to this action, 
any handler desiring to divert potatoes for livestock feed was required 
to apply for a Special Purpose Shipment Certificate, but was not 
required to follow up with a report to the Committee indicating the 
actual quantity diverted. To bring the regulations in line with the 
Committee's recommendation, this rule changes the procedures so that 
neither an Application nor a Report are required when diverting 
potatoes to livestock feed.
    Although it varies from one special purpose shipment to another, in 
most cases handlers of special purpose potatoes are the producers of 
the potatoes and most receivers are the processors.
    Currently, about 85 percent of the Washington potato crop is 
produced for the processing market. Further, the majority of these 
processing potatoes are produced specifically for the frozen French fry 
market, with most of the processing taking place locally within the 
state. This has been a steadily increasing trend ever since the fast-
food restaurant business began requiring an ever increasing portion of 
the potato crop. Because a majority of the Washington potato crop is 
diverted to a special purpose category, the Committee believes that the 
paperwork burden on handlers and receivers can be reduced by obtaining 
the information needed to ensure compliance with the order from 
alternative sources.
    The Committee contracts with the Washington State Potato Commission 
(Commission) for its administrative services. Each processor within the 
State of Washington provides reports to the Commission indicating the 
quantity of potatoes received and processed, per producer. By entering 
into an agreement with the Commission, the Committee will be able to 
obtain all of the information it needs from this processor-generated 
report and neither Washington processors nor grower/handlers of 
processed potatoes will have to complete and return the Report to the 
Committee. This action will significantly reduce the paperwork burden 
on any person or entity previously required to submit reports on the 
volume of processing potatoes shipped, received, and processed. 
Processors outside of Washington, however, will generally continue to 
complete and submit the Report form to the Committee unless specific 
alternative reporting procedures can also be implemented as authorized 
by this action.
    To reduce the paperwork burden and more efficiently utilize 
procedures already in place, the Committee's recommendation changes the 
safeguard procedures for shipments of canning, freezing, or ``other 
processing'' potatoes so that handlers may provide shipment information 
in a format other than through the conventional Committee Report form. 
To accomplish this, language in Sec.  946.336(e)(3)(iii) is changed 
from ``Upon request by the Committee, furnish reports of each shipment 
pursuant to the applicable Special Purpose Certificate'', to ``Upon 
request by the Committee, furnish reports, or cause reports to be 
furnished, of each shipment pursuant to the applicable Special Purpose 
Certificate''. The Committee believes that the language change will 
streamline the reporting procedures while clarifying its ability to 
obtain information from alternative sources to verify compliance and 
proper potato disposition.
    The Committee also recommended changing Sec.  946.336(d)(vi) and 
Sec.  946.336(e)(iii), which detail the procedures and reporting 
requirements for potatoes shipped to locations other than the immediate 
area of production for grading or temporary storage prior to marketing. 
The regulations in effect prior to the finalization of this rule 
required that handlers shipping potatoes for the purposes of grading or 
storing to Morrow or Umatilla Counties in Oregon, or to District No. 5 
or to Spokane County in District No. 1 (part of the regulated 
production area), submit an annual Application form and to subsequently 
report each shipment that is diverted to one of the other special 
purposes (or to cause an inspection

[[Page 44254]]

certificate to be issued if shipped into the fresh market). Potatoes 
shipped under this provision are exempt from the quality and inspection 
requirements until such potatoes are subsequently sold in the fresh 
market or diverted for any special purpose shipment.
    Section 946.7 of the order authorizes, free of regulation, the 
transportation of ungraded potatoes within the production area for the 
purpose of having such potatoes prepared for market or stored. Since 
Sec.  946.7 already provides the necessary authority for transporting 
potatoes within the production area free from regulation, the Committee 
recommended that the reference to ``District No. 5'' and to ``Spokane 
County in District No. 1'' be removed from Sec. Sec.  946.336(d)(1)(vi) 
and 946.336(e)(2). Reference to these two districts was already absent 
from the language that refers to this special purpose in Sec.  946.120. 
The specific authority for shipping potatoes to Umatilla and Morrow 
Counties in Oregon for special purposes is in Sec.  946.54.
    The Committee also reviewed the special purpose procedures for 
handling potatoes for export. The regulations in effect prior to this 
rule exempted potatoes for export from the quality and inspection 
requirements of the order, with the exception that potatoes packed in 
cartons grade at U.S. No. 1 or better. However, since most importing 
countries require a quality product, it has been common industry 
practice to have potatoes for export inspected for quality regardless 
of this exemption. The Committee believes that all Washington potatoes 
entering the export market should meet the minimum quality, cleanness, 
maturity, pack, and inspection requirements of the order, and that the 
regulations conform with industry practice. Therefore, the Committee 
recommended that potatoes for export no longer be included as a special 
purpose shipment exemption.
    This change requires removal of Sec. Sec.  946.120(a)(2), 
946.336(d)(1)(vii), and 946.336(e)(5) from the order's rules and 
regulations. With export removed as a special purpose exemption, 
paragraphs (a)(3), (a)(4), and (a)(5) in Sec.  946.120 are redesignated 
as paragraphs (a)(2), (a)(3), and (a)(4), respectively. Similarly, 
paragraphs (d)(1)(viii) and (e)(6) in Sec.  946.336 are redesignated as 
Sec. Sec.  946.336(d)(1)(vii) and 946.336(e)(5), respectively. Finally, 
Sec.  946.336(d)(2) is revised to reflect these modifications and to 
correct an existing typographical error.
    Sections 946.336(d)(1)(i) and 946.336 (d)(2) of the handling 
regulations exempt potatoes shipped for livestock feed from the 
quality, assessment, and inspection requirements of the order. However, 
there were no corresponding reporting requirements or safeguard 
provisions specified under Sec. Sec.  946.120 or 946.336(e) for such 
shipments, although the Application form contained a check box for 
livestock feed. Because potatoes that are diverted to livestock feed 
are generally culls and thus unfit for any other market, the Committee 
believes such shipments should remain exempt from the quality, 
inspection, and assessment requirements of the order and that handlers 
should not be required to submit the Application or Report forms for 
such shipments.
    The Committee thus recommended adding a new paragraph (e)(6) to 
Sec.  946.336 (Safeguards) to clarify that handlers diverting potatoes 
to livestock feed are not required to submit the Application and Report 
forms. This change also potentially reduces the reporting burden on 
handlers and receivers of such potatoes.
    The Committee recommendation also included changes to the 
procedures used for tracking potatoes shipped for charity. Potatoes 
shipped for charity are exempt from the quality, assessment, and 
inspection requirements. However, there were no safeguard or reporting 
requirements delineated in Sec.  946.336. The Committee believes it is 
important to have reporting requirements to safeguard such shipments, 
and thus recommended adding a new paragraph (e)(7) to Sec.  946.336 
(Safeguards) to require that handlers shipping potatoes for charity 
submit both the Application and Report forms. Because the Committee 
believes that small gifts to charity should be encouraged, the 
safeguard and reporting requirements are changed to also specify that 
charitable contributions of 1,000 pounds or less are exempt from the 
application and reporting requirements. This will make diverting 
potatoes a less burdensome process for handlers. A conforming change 
noting the 1,000 pound provision is also being made to Sec.  
946.120(a)(1).
    The additions to the special purpose shipment procedures for 
charitable contributions further specify that any handler of potatoes 
being diverted to charity also informs the recipient that the gift 
cannot be resold or otherwise placed into commercial market channels.
    The Committee also recommended modifications to the special purpose 
shipment exemption for seed potato shipments. Section 
946.336(d)(1)(iii) provides for an exemption from the quality, 
assessment, and inspection requirements of the order for potatoes 
handled for seed. Although there were not any safeguard provisions or 
reporting requirements outlined in either Sec.  946.120 or Sec.  
946.336, the previous version of the Application form contained a check 
box for handlers to mark when applying for a Special Purpose Shipment 
Certificate. However, after discussing the seed potato issue, the 
subcommittee's recommendation to the full Committee was to add 
authorization to require a Report from handlers, but not to require an 
Application form. The actual recommendation will add a new paragraph 
(e)(8) to Sec.  946.336 (Safeguards) stating that handlers shipping 
potatoes for seed must furnish, at the request of the Committee, a 
report from handlers on the total volume of seed potatoes handled.
    Seed potato handlers are almost always the producer of such 
potatoes, and generally only produce potatoes for seed. As such, the 
Committee does not want to require seed potato handlers to apply for a 
Special Purpose Certificate, but for statistical purposes, wanted to 
have a procedure in place for the submission of periodic reports. 
Although potatoes produced for seed are traditionally segregated from 
potatoes produced for other markets by the very nature of the cultural 
practices used by farmers and by the various state and federal seed 
regulations in place, the Committee believes this change will add 
clarity to the special purpose regulations.
    The final change recommended by the Committee relates to Sec.  
946.336(g) Inspection. Language in this paragraph had referenced a form 
which is no longer issued by the Federal-State Inspection Service. This 
form had at one time been issued by the inspection service for 
accompaniment with any bulk-load potato shipments not relieved by any 
of the special purpose or minimum quantity exemptions of the order. 
Since such potato shipments require inspection under the order's 
provisions and thus should be accompanied by a valid inspection 
certificate, the Committee recommended removing the sentence from Sec.  
946.336(g) that refers to the ``Shipping Clearance Report'' form.
    To ensure conformity with Sec.  946.336, Sec.  946.120 is updated 
by removing reference to the special purpose use ``export'', and adding 
reference to the special purpose use ``canning, freezing, and other 
processing''. Furthermore, as previously noted, a proviso is added to 
paragraph (1) of Sec.  946.120 stating that charitable shipments of 
1,000 pounds or less are exempt from the application process. Also, as 
noted earlier, minor

[[Page 44255]]

conforming changes have been made to the Committee's Application and 
Report forms.

Final 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 action on small entities. Accordingly, AMS has 
prepared this final 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 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 who are 
subject to regulation under the marketing order and approximately 272 
potato producers in the regulated area. Small agricultural service 
firms are defined by the Small Business Administration (13 CFR 121.201) 
as those having annual receipts of less than $6,000,000, 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 $6,000,000.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for 
Washington potatoes for the 2003 marketing year (the most recent period 
that final statistics are available) was $5.25 per hundredweight. The 
average annual producer revenue for each of 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 modifies the reporting requirements, procedures, and 
safeguard provisions for making certain special purpose potato 
shipments as prescribed under Sec. Sec.  946.120, 946.336(d) and 
946.336(e) of the order. The Committee recommended several changes to 
the order's special purpose regulations, and conforming changes to the 
Application and Report forms. These changes will help facilitate the 
marketing of certain types of potato shipments, while also enhancing 
the Committee's compliance efforts. The authority for the special 
purpose shipments and safeguard requirements is provided in Sec. Sec.  
946.54 and 946.55, respectively, of the order.
    The Committee believes that these changes will minimally impact 
handlers and producers in terms of cost. While there are some changes 
that could require a few handlers of exported potatoes to undergo 
inspections when they may not have previously, most of the changes will 
actually lessen the regulatory and reporting burden on the industry 
while clarifying the special purpose shipment reporting and safeguard 
requirements.
    During its review of the handling regulations, the subcommittee 
discussed alternatives to these changes, and felt that the recommended 
changes adequately met the Committee's originally stated goals of 
reviewing and, if necessary, fine tuning the special purpose 
regulations. The Committee reviewed the subcommittee's recommendation 
carefully and unanimously concurred that, to facilitate the handling of 
special purpose shipments and to enhance its compliance program 
specific to such shipments, the changes would effectively improve its 
administration of the special purpose shipment exemptions.
    This rule modifies the reporting requirements, procedures, and 
safeguard provisions for making certain special purpose potato 
shipments. Under the order, such special purpose shipments may be 
exempt from the quality, assessment, or inspection requirements. The 
modified regulations clarify and update the procedures handlers must 
follow to qualify for the special purpose exemptions. As previously 
noted, minor conforming changes have subsequently been made to two of 
the Committee's forms, the ``Shippers Application for Special Purpose 
Certificate'', and the ``Special Purpose Shipment Report''. 
Accordingly, this action will not impose any additional reporting or 
recordkeeping requirements on either small or large potato handlers. 
This information collection burden has been previously approved by the 
Office of Management and Budget (OMB) under OMB No. 0581-0178, 
Vegetable and Specialty Crops Marketing Orders. 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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap or 
conflict with this final rule.
    In addition, the Committee's meeting was widely publicized 
throughout the Washington potato industry and all interested persons 
were invited to attend the meeting and participate in Committee 
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.
    A proposed rule concerning this action was published in the Federal 
Register on May 16, 2005 (70 FR 25790). Copies of the rule were mailed 
or sent via facsimile transmission to all Committee members and 
handlers. Finally, the rule was made available through the Internet by 
USDA and the Office of the Federal Register. A 30-day comment period 
ending June 15, 2005, was provided to allow interested persons to 
respond to the proposal. One response was received during that period. 
However, that response did not address the substance of this rule.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.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.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because: (1) The Committee and 
Washington potato industry handlers want to take advantage of these 
regulatory improvements as soon as possible; (2) the Committee 
unanimously recommended these changes at a public meeting and all 
interested parties had an opportunity to provide input; and (3) 
handlers are aware of this action and are ready to operate under the 
changed procedures. Also, a 30-day comment period was provided for in 
the proposed rule and a response not relevant to the proposed rule was 
received.

[[Page 44256]]

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 946 is amended as 
follows:

PART 946--IRISH POTATOES GROWN IN WASHINGTON

0
1. The authority citation for 7 CFR part 946 continues to read as 
follows:

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


0
2. In Sec.  946.120, paragraph (a) is revised to read as follows:


Sec.  946.120  Application.

    (a) Whenever shipments for special purposes pursuant to Sec.  
946.54 are relieved in whole or in part from regulations issued under 
Sec.  946.52, each handler desiring to make shipments of potatoes for 
the following purposes shall submit an application to the committee, 
prior to initiating such shipments, for a special purpose certificate 
permitting such shipments:
    (1) Charity: Provided, That handlers making shipments for charity 
of 1,000 pounds or less are exempt from these application requirements;
    (2) Prepeeling;
    (3) Canning, freezing, and ``other processing'';
    (4) Grading or storing at any specified location in Morrow or 
Umatilla Counties in the State of Oregon; and
    (5) Experimentation.
* * * * *

0
3. Section 946.336 is amended by:
0
A. Revising paragraph (d)(1)(vi);
0
B. Removing paragraph (d)(1)(vii);
0
C. Redesignating paragraph (d)(1)(viii) as paragraph (d)(1)(vii);
0
D. Revising paragraph (d)(2);
0
E. Revising the introductory text of paragraph (e)(2);
0
F. Revising paragraph (e)(3)(iii);
0
G. Removing paragraph (e)(5);
0
H. Redesignating paragraph (e)(6) as paragraph (e)(5);
0
I. Adding a new paragraph (e)(6), (e)(7), and (e)(8); and
0
J. Revising paragraph (g)(1) to read as follows:


Sec.  946.336  Handling regulation.

* * * * *
    (d) * * *
    (1) * * *
    (vi) Grading or storing at any specified location in Morrow or 
Umatilla Counties in the State of Oregon;
* * * * *
    (2) Shipments of potatoes for the purposes specified in paragraphs 
(d)(1)(i) through (vii) of this section shall be exempt from the 
inspection requirements specified in paragraph (g) of this section, 
except that shipments pursuant to paragraph (d)(1)(vi) of this section 
shall comply with the inspection requirements of paragraph (e)(2) of 
this section. Shipments specified in paragraphs (d)(1)(i), (ii), (iii), 
(v) and (vii) of this section shall be exempt from assessment 
requirements as specified in Sec.  946.248 and established pursuant to 
Sec.  946.41
    (e) * * *
    (2) Handlers desiring to ship potatoes for grading or storing to 
any specified location in Morrow or Umatilla Counties in the State of 
Oregon shall:
* * * * *
    (3) * * *
    (iii) Upon request by the committee, furnish reports, or cause 
reports to be furnished, for each shipment pursuant to the applicable 
Special Purpose Certificate;
* * * * *
    (6) Handlers diverting potatoes to livestock feed are not required 
to apply for a Special Purpose Certificate nor report such shipments to 
the committee.
    (7) Each handler desiring to make shipments of potatoes for charity 
shall:
    (i) First apply to the committee for, and obtain, a Special Purpose 
Certificate for the purpose of making shipments for charity: Provided, 
That shipments for charity of 1,000 pounds or less are exempt from the 
application and reporting requirements: And provided further, That 
potatoes previously graded, assessed, and inspected in preparation for 
shipment to the fresh market are exempt from the application and 
reporting requirements.
    (ii) Each handler shipping potatoes to charity must inform the 
recipient that the potatoes cannot be resold or otherwise placed in 
commercial market channels.
    (8) Each handler making shipments of seed potatoes shall furnish, 
at the request of the committee, reports on the total volume of seed 
potatoes handled.
* * * * *
    (g) * * *
    (1) Except when relieved by paragraphs (d) or (f) of this section, 
no person may handle any potatoes unless a Federal-State Inspection 
Notesheet or certificate covering them has been issued by an authorized 
representative of the Federal-State Inspection Service and the document 
is valid at the time of shipment.
* * * * *

    Dated: July 27, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-15170 Filed 8-1-05; 8:45 am]
BILLING CODE 3410-02-U