[Federal Register Volume 82, Number 53 (Tuesday, March 21, 2017)]
[Proposed Rules]
[Pages 14485-14488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05482]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

[Doc. No. AMS-SC-16-0111; SC17-945-1 PR]


Irish Potatoes Grown in Certain Designated Counties in Idaho, and 
Malheur County, Oregon; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Idaho-Eastern Oregon Potato Committee (Committee) to decrease the 
assessment rate established for the 2017-2018 and subsequent fiscal 
periods from $0.0025 to $0.002 per hundredweight of potatoes handled. 
The Committee locally administers the marketing order which regulates 
the handling of potatoes grown in certain designated counties in Idaho, 
and Malheur County, Oregon. Assessments upon potato handlers are used 
by the Committee to fund reasonable and necessary expenses of the 
program. The fiscal period begins August 1 and ends July 31. The 
assessment rate would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by April 20, 2017.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
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 document number and 
the date and

[[Page 14486]]

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. All 
comments submitted in response to this proposed rule will be included 
in the record and will be made available to the public. Please be 
advised that the identity of the individuals or entities submitting the 
comments will be made public on the internet at the address provided 
above.

FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Senior Marketing 
Specialist, or Gary D. Olson, Regional Director, Northwest Marketing 
Field Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Agreement No. 98 and Order No. 945, both as amended (7 CFR part 945), 
regulating the handling of Irish potatoes grown in certain designated 
counties in Idaho, and Malheur County, Oregon, 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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the marketing order now in effect, Idaho-
Eastern Oregon 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 August 1, 2017, and continue until 
amended, suspended, or terminated.
    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 proposed rule would decrease the assessment rate established 
for the Committee for the 2017-2018 and subsequent fiscal periods from 
$0.0025 to $0.002 per hundredweight of potatoes.
    The Idaho-Eastern Oregon 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 cover the 
expenses of administering the program. The members of the Committee are 
producers and handlers of Idaho-Eastern Oregon 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. Thus, all directly 
affected persons have an opportunity to participate and provide input.
    For the 2014-2015 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
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 November 9, 2016, to consider the Committee's 
projected 2017-2018 financial requirements, the size of the Committee's 
operating reserve, and the order's continuing assessment rate. The 
Committee unanimously recommended an assessment rate of $0.002 per 
hundredweight of potatoes for the 2017-2018 fiscal period. The 
assessment rate of $0.002 is $0.0005 lower than the rate currently in 
effect. The assessment rate decrease is necessary to reduce the funds 
held in reserve to less than approximately one fiscal period's budgeted 
expenses, the maximum level allowed by the order.
    The Committee adopted a budget of $119,075 for the 2016-2017 fiscal 
period. It expects to recommend a similar level of budgeted 
expenditures for the 2017-2018 fiscal period at its next scheduled 
meeting in June 2017. The Committee expects its budget for major 
expenditures for the 2017-2018 fiscal period to be close to the 
budgeted amounts for the 2016-2017 fiscal period. These expenditures 
include $68,638 for administrative expenses, $35,437 for travel/office 
expenses, and $15,000 for marketing order contingency.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Idaho-Eastern 
Oregon potatoes. Potato shipments for 2017-2018 are estimated at 32 
million hundredweight which should provide $64,000 in assessment income 
at the proposed assessment rate. Income derived from handler 
assessments, along with other income, interest earned, and funds from 
the Committee's authorized reserve, would be adequate to cover budgeted 
expenses. Funds in the reserve (projected to be $158,275 on July 31, 
2017) would be reduced to comply with the maximum permitted by the 
order of approximately one fiscal period's expenses.
    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 this 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 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 2017-2018 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) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has

[[Page 14487]]

considered the economic impact of this proposed 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 
businesses 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.
    There are approximately 450 producers of potatoes in the production 
area and approximately 32 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (13 CFR 121.201) as those having annual 
receipts less than $750,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $7,500,000.
    During the 2015-2016 fiscal period, the most recent full year of 
statistics available, 33,606,000 hundredweight of Idaho-Eastern Oregon 
potatoes were inspected under the order and sold into the fresh market. 
Based on information provided by the National Agricultural Statistics 
Service, the average producer price for the 2015 Idaho potato crop (the 
most recent full marketing year recorded) was $7.00 per hundredweight. 
Multiplying $7.00 by the shipment quantity of 33,606,000 hundredweight 
yields an annual crop revenue estimate of $235,242,000. The average 
annual fresh potato revenue for each of the 450 producers is therefore 
calculated to be $522,760 ($235,242,000 divided by 450), which is less 
than the Small Business Administration threshold of $750,000. 
Consequently, on average, a majority of the Idaho-Eastern Oregon potato 
producers may be classified as small entities.
    In addition, based on information reported by USDA's Market News 
Service, the average free-on-board (f.o.b.) shipping point price for 
the 2015 Idaho potato crop was $7.47 per hundredweight. Multiplying 
$7.47 by the shipment quantity of 33,606,000 hundredweight yields an 
annual crop revenue estimate of $251,036,820. The average annual fresh 
potato revenue for each of the 32 handlers is therefore calculated to 
be $7,844,900 ($251,036,820 divided by 32), which is slightly more than 
the Small Business Administration threshold of $7,500,000. Given the 
likelihood that there may be several large handlers, some of the Idaho-
Eastern Oregon potato handlers may be classified as small entities.
    This proposed rule would decrease the assessment rate established 
for the Committee and collected from handlers for the 2017-2018 and 
subsequent fiscal periods from $0.0025 to $0.002 per hundredweight of 
potatoes. The Committee unanimously recommended an assessment rate of 
$0.002 per hundredweight of potatoes for the 2017-2018 fiscal period. 
The assessment rate of $0.002 per hundredweight is $0.0005 lower than 
the rate for the 2016-2017 fiscal period. The quantity of assessable 
potatoes for the 2017-2018 fiscal period is estimated at 32 million 
hundredweight. Thus, the $0.002 rate should provide $64,000 in 
assessment income. Income derived from handler assessments, along with 
other income, interest earned, and funds from the Committee's 
authorized reserve, would be adequate to cover budgeted expenses.
    The Committee adopted a budget of $119,075 for the 2016-2017 fiscal 
period and expects to recommend a similar amount in budgeted 
expenditures for the 2017-2018 fiscal period at its next scheduled 
meeting in June 2017. The major budgeted expenditures for the 2016-2017 
year include $68,638 for administrative expenses, $35,437 for travel/
office expenses, and $15,000 for marketing order contingency. Budgeted 
expenses for these items in 2015-2016 were $64,901, $37,340, and 
$15,000, respectively.
    The lower assessment rate is necessary to reduce the reserve 
balance to less than approximately one fiscal period's budgeted 
expenses. The reserve balance on July 31, 2017, is projected to be 
$158,275. Assessment income for the 2017-2018 fiscal period is 
estimated at $64,000, while expenses are estimated to be $119,075. The 
Committee anticipates compensating for the reduced assessment revenue 
with $5,100 from miscellaneous income, $100 from interest income, and 
$49,875 from its reserve fund. The reserve fund is projected to be 
under the maximum authorized level at the end of the 2017-2018 fiscal 
period.
    The Committee discussed alternatives to this proposed change, 
including suspending assessments for one year, recommending other 
assessment rate levels, and leaving the current rate in place. Prior to 
arriving at this assessment rate recommendation, the Committee 
considered information from the Board's Executive Committee on the cost 
savings resulting from recent administrative changes in the Committee 
office and the level of anticipated Committee expenses moving forward. 
The Committee debated between suspending assessments for one year and 
recommending the assessment rate be lowered to $0.002 per hundredweight 
of potatoes. Based on the market and shipping quantities, the Committee 
recommended the rate of $0.002 per hundredweight. The Committee 
believes this assessment rate, in combination with other income, 
interest earned, and funds utilized from the Committee's financial 
reserve, would provide sufficient funds to meet its expenses.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2017 crop could range between $6.00 and $9.00 per 
hundredweight of potatoes. Therefore, the estimated assessment revenue 
for the 2017-2018 fiscal period as a percentage of total producer 
revenue could range between 0.022 and 0.033 percent.
    This action would decrease 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, decreasing the 
assessment rate would reduce the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the Idaho-Eastern Oregon 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 November 9, 2016, 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.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178 (Generic Vegetable and Specialty Crops). No 
changes in those requirements as a result of this action are necessary. 
Should any changes become necessary, they would be submitted to OMB for 
approval.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large Idaho-Eastern 
Oregon potato handlers. As with all Federal marketing order programs, 
reports and forms are periodically reviewed to reduce

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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 
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 action.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower 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 2017-2018 fiscal period begins on August 1, 2017, 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 proposed rule would decrease the assessment rate 
for assessable potatoes beginning with the 2017-2018 fiscal period; 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 945

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 945 is 
proposed to be amended as follows:

PART 945--IRISH POTATOES GROWN IN CERTAIN DESIGNATED COUNTIES IN 
IDAHO, AND MALHEUR COUNTY, OREGON

0
1. The authority citation for 7 CFR part 945 continues to read as 
follows:

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

0
2. Section 945.249 is revised to read as follows:


Sec.  945.249   Assessment rate.

    On and after August 1, 2017, an assessment rate of $0.002 per 
hundredweight is established for Idaho-Eastern Oregon potatoes.

    Dated: March 15, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-05482 Filed 3-20-17; 8:45 am]
 BILLING CODE 3410-02-P