[Federal Register Volume 71, Number 137 (Tuesday, July 18, 2006)]
[Rules and Regulations]
[Pages 40639-40641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-11303]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV06-948-1 IFR]


Irish Potatoes Grown in Colorado; Suspension of Continuing 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule suspends the continuing assessment rate established 
for the Area No. 3 Colorado Potato Administrative Committee (Committee) 
for the 2006-2007 and subsequent fiscal periods. The Committee, which 
locally administers the marketing order regulating the handling of 
potatoes grown in Northern Colorado, made this recommendation for the 
purpose of lowering the monetary reserve to a level consistent with 
program requirements. The fiscal period begins July 1 and ends June 30. 
The assessment rate will remain suspended until an appropriate rate is 
reinstated.

DATES: Effective Date: July 19, 2006. Comments received by September 
18, 2006, will be considered prior to issuance of a final rule.

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 or Gary D. Olson, 
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.
    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, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 97 and Marketing Order No. 948, both as amended (7 CFR 
part 948), regulating the handling of potatoes grown in Colorado, 
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 order now in effect, Colorado potato handlers 
are subject to assessments. Funds to administer the order are derived 
from such assessments. For the 2005-2006 fiscal period, an assessment 
rate of $0.02 per hundredweight of potatoes handled was approved by 
USDA to continue in effect indefinitely unless modified, suspended, or 
terminated. This action suspends the assessment rate for the 2006-2007 
fiscal period, which begins July 1, 2006, and will continue in effect 
until reinstated. 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. 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 suspends Sec.  948.215 of the order's rules and 
regulations. Section 948.215 established an assessment rate of $0.02 
per hundredweight of Colorado potatoes handled for 2005-2006 and 
subsequent fiscal periods. Continuous assessment rates remain in effect 
from fiscal period to fiscal period unless modified, suspended, or 
terminated by USDA. This rule suspends the $0.02 assessment rate for 
2006-2007 and will remain in effect during subsequent fiscal periods 
until reinstated by USDA upon recommendation of the Committee.
    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. In addition, the 
order authorizes the use of monetary reserve funds to cover program 
expenses (Sec.  948.78). The members of the Committee are producers and 
handlers of Colorado potatoes. 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 is formulated and discussed in a 
public meeting.

[[Page 40640]]

Thus, all directly affected persons have an opportunity to participate 
and provide input.
    For the 2005-2006 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate of $0.02 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 May 11, 2006, and unanimously recommended 
2006-2007 expenditures of $20,268 and suspension of the continuing 
assessment rate. In comparison, last year's budgeted expenditures were 
$20,368. The suspension of the assessment rate will allow the Committee 
to draw from the reserve to cover 2006-2007 expenditures. This action 
should effectively lower the reserve to within the program limit of 
approximately two fiscal periods' operational expenses (Sec.  948.78).
    The major expenditures recommended by the Committee for the 2006-
2007 fiscal period include $8,610 for salary, $3,000 for office rent, 
$1,750 for office expenses, and $1,000 for utilities. These budgeted 
expenses are the same as those approved for the 2005-2006 fiscal 
period.
    As of July 1, 2005, the Committee had $49,237 in its reserve fund. 
With the 2006-2007 budget set at $20,268, the current maximum reserve 
permitted by the order is approximately $40,536 (approximately two 
fiscal periods' expenses (Sec.  948.78)). To meet 2006-2007 expenses 
the Committee plans on drawing approximately $15,814 from its reserve, 
and may additionally earn approximately $4,454 from interest and other 
income. Thus, with a suspended assessment rate, the Committee's reserve 
at the end of the 2006-2007 fiscal period could be reduced to 
approximately $33,423. This amount would be consistent with the order's 
requirements.
    The assessment rate suspension will continue in effect indefinitely 
until reinstated by USDA upon recommendation and information submitted 
by the Committee or other available information.
    Although this suspension of the continuing assessment rate is 
effective for an indefinite period, the Committee will continue to meet 
prior to or during each fiscal period to recommend a budget of expenses 
and consider recommendations for reinstatement 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 will 
evaluate Committee recommendations and other available information such 
as the level of the budget and the monetary reserve to determine 
whether assessment rate reinstatement is needed and at what level. 
Further rulemaking will be undertaken as necessary. The Committee's 
2006-2007 budget and those for subsequent fiscal periods will 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.
    Based on Committee data, there are 8 producers and 8 handlers in 
the production area subject to regulation under the order. Small 
agricultural producers are defined by the Small Business Administration 
(13 CFR 121.201) as those having annual receipts of less than $750,000, 
and small agricultural service firms are defined as those whose annual 
receipts are less than $6,500,000.
    Based on the total number of Colorado Area No. 3 potato producers 
(8), 2004 fresh potato production of 557,826 hundredweight (Committee 
records), and the average 2004 producer price of $6.30 per 
hundredweight as reported by National Agricultural Statistics Service 
(NASS), average annual revenue per producer from the sale of potatoes 
can be estimated at approximately $439,288. In addition, based on 
Committee records and an estimated average 2004 f.o.b. price of $8.40 
per hundredweight ($6.30 per hundredweight NASS producer price plus 
Committee estimated packing and handling costs of $2.10 per 
hundredweight), all of the Colorado Area No. 3 potato handlers ship 
under $6,500,000 worth of potatoes. In view of the foregoing, it can be 
concluded that the majority of the Colorado Area No. 3 potato producers 
and handlers may be classified as small entities.
    This rule suspends the continuing assessment rate established for 
the Committee and collected from handlers for the 2006-2007 and 
subsequent fiscal periods. Funds from the Committee's authorized 
reserve, along with interest and other income, will be adequate to 
cover budgeted expenses.
    As of July 1, 2005, the Committee had $49,237 in its reserve fund. 
With the 2006-2007 budget set at $20,268, the current maximum reserve 
permitted by the order is approximately $40,536 (approximately two 
fiscal periods' expenses (Sec.  948.78)). To meet 2006-2007 expenses 
the Committee plans on drawing approximately $15,814 from its reserve, 
and may additionally earn approximately $4,454 from interest and other 
income. Thus, with a suspended assessment rate, the Committee's reserve 
at the end of the 2006-2007 fiscal period could be reduced to 
approximately $33,423. This amount would be consistent with the order's 
requirements.
    The major expenditures recommended by the Committee for the 2006-
2007 fiscal period include $8,610 for salary, $3,000 for office rent, 
$1,750 for office expenses, and $1,000 for utilities. These budgeted 
expenses are the same as those approved for the 2005-2006 fiscal 
period.
    For the 2005-2006 fiscal period, the Committee recommended a 
decrease in the assessment rate. However, the decreased assessment rate 
did not reduce the Committee's reserve as anticipated. Therefore, the 
Committee recommended suspending the continuing assessment rate to 
enable an increased draw on the reserve, thus maintaining the level of 
the reserve within program limits of approximately two fiscal periods' 
operational expenses.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels, but determined that the recommended 
expenses were reasonable and necessary to adequately cover program 
operations. Other assessment rates were considered, but not recommended 
because they would not reduce the reserve as quickly as suspension of 
the assessment rate.
    This action suspends the assessment obligation imposed on handlers. 
Assessments are applied uniformly on all handlers, and some of the 
costs may be passed on to producers. However, suspending the assessment 
rate reduces the burden on handlers, and may reduce the burden on 
producers. In addition, the Committee's meeting was widely publicized 
throughout the Colorado

[[Page 40641]]

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 May 11, 2006, meeting was a public meeting and 
all entities, both large and small, were able to express views on the 
issues. Finally, interested persons are invited to submit information 
on the regulatory and informational impacts of this action on small 
businesses.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large Colorado 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.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies in general 
to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible.
    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.
    After consideration of all relevant material 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.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) The 2006-2007 fiscal period begins on July 1, 
2006, and the order requires that the assessment rate suspension apply 
to all assessable Colorado potatoes handled during such fiscal period; 
(2) this action relieves restrictions on handlers by suspending the 
assessment rate beginning with the 2006-2007 fiscal period; (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; and (4) this interim final rule 
provides a 60-day comment period, and all comments timely received will 
be considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 948

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 948 is amended as 
follows:

PART 948--IRISH POTATOES GROWN IN COLORADO

0
1. The authority citation for 7 CFR part 948 continues to read as 
follows:

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


Sec.  948.215  [Suspended]

0
2. In part 948, Sec.  948.215 is suspended in its entirety.

    Dated: July 11, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E6-11303 Filed 7-17-06; 8:45 am]
BILLING CODE 3410-02-P