[Federal Register Volume 73, Number 144 (Friday, July 25, 2008)]
[Proposed Rules]
[Pages 43375-43378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17089]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. AMS-FV-08-0048; FV08-948-2 PR]


Irish Potatoes Grown in Colorado; Reinstatement of the Continuing 
Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would reinstate the continuing assessment rate 
established for the Area No. 3 Colorado Potato

[[Page 43376]]

Administrative Committee (Committee) for the 2008-2009 and subsequent 
fiscal periods at $0.02 per hundredweight of potatoes handled. The 
Committee locally administers the marketing order regulating the 
handling of potatoes grown in northern Colorado. The continuing 
assessment rate was suspended for the 2006-2007 and subsequent fiscal 
periods to bring the monetary reserve within the program limit of two 
fiscal periods' operating expenses. Assessments upon potato handlers 
are used by the Committee to fund reasonable and necessary expenses of 
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 August 11, 2008.

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, 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.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson or Gary Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: (503) 326-
2724, Fax: (503) 326-7440, or e-mail: [email protected] or 
[email protected].
    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 rule is issued under Marketing 
Agreement No. 97 and 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 marketing order now in effect, Colorado 
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 on July 1, 2008, and continue until 
amended, suspended, or terminated. 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 would reinstate Sec.  948.215 of the order's rules and 
regulations and establish a continuing assessment rate for the 
Committee for the 2008-2009 and subsequent fiscal periods at $0.02 per 
hundredweight of potatoes handled.
    The Colorado potato marketing 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 of 
Colorado potatoes in Area No. 3. 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. Thus, all directly affected persons have an opportunity 
to participate and provide input.
    For the 2006-2007 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, a suspension of the continuing 
assessment rate that would remain suspended until reinstated by USDA 
upon recommendation and information submitted by the Committee or other 
information available to USDA.
    The Committee met on May 8, 2008, and unanimously recommended 2008-
2009 expenditures of $19,497 and an assessment rate of $0.02 per 
hundredweight of potatoes. In comparison, last year's budgeted 
expenditures were $18,697. For the 2006-2007 fiscal period, the 
Committee recommended suspending the continuing assessment rate to 
bring the monetary reserve within program limits of approximately two 
fiscal periods' operating expenses (Sec.  948.78). At that time, the 
reserve fund contained about $49,237. The Committee has been operating 
for the last two years by drawing income from its reserve. With a 
suspended assessment rate and a significant decrease in the number of 
potato producers and acreage in Area No. 3, the reserve has rapidly 
decreased to the current level of about $16,175. The Committee would 
like to maintain the reserve at approximately this level, thus 
reinstatement of the assessment rate at $0.02 per hundredweight is 
needed.
    The major expenditures recommended by the Committee for the 2008-
2009 fiscal period include $7,800 for salaries, $3,000 for rent 
expense, and $1,750 for office expenses. Budgeted expenses for these 
items in 2007-2008 were also $7,800, $3,000, and $1,750, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Colorado Area 
No. 3 potatoes. Colorado Area No. 3 potato shipments for the year are 
estimated at 787,600 hundredweight, which should provide $15,752 in 
assessment income. Income derived from handler assessments, rent, and 
interest along with funds from the Committee's authorized reserve, 
should be adequate to cover budgeted expenses. Funds in the reserve 
(estimated at $16,175 as of June 30, 2008) would be kept within the 
maximum permitted by the order (approximately two fiscal periods' 
expenses; Sec.  948.78).
    The reinstated 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 this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet

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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 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 2008-2009 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.
    Based on Committee data, there are 8 producers (7 of whom are also 
handlers) in the regulated area and 9 handlers (7 of whom are also 
producers) who are 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 Committee data, the production of Colorado Area No. 3 
potatoes for the 2007-2008 fiscal period was 550,026 hundredweight. 
Based on National Agricultural Statistics Service data, the average 
producer price for Colorado summer potatoes for 2007 was $7.55 per 
hundredweight. The average annual producer revenue for the 8 Colorado 
Area No. 3 potato producers is therefore calculated to be approximately 
$519,000. Using Committee data regarding each individual handler's 
total shipments during the 2007-2008 fiscal period and a Committee 
estimated average f.o.b. price for 2007 of $9.75 per hundredweight 
($7.55 per hundredweight plus estimated packing and handling costs of 
$2.20 per hundredweight), all of the Colorado Area No. 3 potato 
handlers ship under $6,500,000 worth of potatoes. Thus, the majority of 
handlers and producers of Colorado Area No. 3 potatoes may be 
classified as small entities.
    This rule would reinstate Sec.  948.215 of the order's rules and 
regulations and establish a continuing assessment rate for the 
Committee, to be collected from handlers for the 2008-2009 and 
subsequent fiscal periods, at $0.02 per hundredweight of potatoes. The 
Committee unanimously recommended 2008-2009 expenditures of $19,497 and 
an assessment rate of $0.02 per hundredweight. The quantity of Colorado 
Area No. 3 potatoes for the 2008-2009 fiscal period is estimated at 
787,600 hundredweight. Thus, the $0.02 rate should provide $15,752 in 
assessment income. Income derived from handler assessments, rent, and 
interest along with funds from the Committee's authorized reserves 
should be adequate to meet this fiscal period's budgeted expenses.
    The major expenditures recommended by the Committee for the 2008-
2009 fiscal period include $7,800 for salaries, $3,000 for rent 
expense, and $1,750 for office expenses. Budgeted expenses for these 
items in 2007-2008 were also $7,800, $3,000, and $1,750, respectively.
    For the 2006-2007 fiscal period, the Committee recommended 
suspending the continuing assessment rate to bring the monetary reserve 
within program limits of approximately two fiscal periods' operating 
expenses (Sec.  948.78). At that time, the reserve fund contained about 
$49,237. The Committee has been operating for the last two years by 
drawing income from its reserve. With a suspended assessment rate and a 
significant decrease in the number of potato producers and acreage in 
Area No. 3, the reserve has rapidly decreased to the current level of 
about $16,175. The Committee would like to maintain the reserve at 
approximately this level, thus reinstatement of the assessment rate is 
needed.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels. Lower assessment rates were considered, 
but not recommended because they would not generate the income 
necessary to administer the program with adequate reserves. Higher 
assessment rates were also considered, but not recommended because they 
would add funds to the reserve.
    To calculate the assessment rate, the Committee deducted estimated 
income received from rent and interest from the total recommended 
budget ($19,497-$2,000 = $17,497). The assessment rate was then 
determined by dividing $17,497 by the quantity of assessable potatoes, 
estimated at 787,600 hundredweight for the 2008-2009 fiscal period. The 
result was rounded to $0.02 per hundredweight. This assessment rate 
would generate approximately $1,745 less than anticipated expenses when 
combined with interest and rent income, which the Committee has 
determined to be acceptable. Funds from the Committee's authorized 
reserve should be adequate to cover budgeted expenses not covered by 
income from assessments, interest, and rent.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2008-2009 fiscal period could range between $7.55 and 
$8.45 per hundredweight of Colorado summer potatoes. Therefore, the 
estimated assessment revenue for the 2008-2009 fiscal period as a 
percentage of total producer revenue could range between 0.24 and 0.26 
percent.
    This action would reinstate 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 
marketing order.
    In addition, the Committee's meeting was widely publicized 
throughout the Colorado Area No. 3 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 May 8, 
2008, 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 comments on this proposed rule, including 
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 Colorado Area No. 3 
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 complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide

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increased opportunities for citizen access to Government information 
and services, and for other purposes.
    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.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. 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 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2008-2009 fiscal period begins on July 1, 2008, and 
the marketing order requires that the rate of assessment for each 
fiscal period apply to all assessable potatoes handled during such 
fiscal period; (2) the northern Colorado potato shipping season begins 
in July; (3) the Committee needs to have sufficient funds to pay for 
expenses which are incurred on a continuous basis; and (4) handlers are 
aware of this action which was 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 948

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

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

PART 948--IRISH POTATOES GROWN IN COLORADO

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

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

    2. In part 948, the suspension of Sec.  948.215 is lifted.

    Dated: July 22, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E8-17089 Filed 7-24-08; 8:45 am]
BILLING CODE 3410-02-P