[Federal Register Volume 82, Number 120 (Friday, June 23, 2017)]
[Rules and Regulations]
[Pages 28550-28552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13174]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 945

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements 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 
will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective August 1, 2017.

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 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 final rule in 
conformance with Executive Orders 12866, 13771, 13563, and 13175.
    This action falls within a category of regulatory actions that the 
Office of Management and Budget (OMB) exempted from Executive Order 
12866 review. Additionally, because this rule does not meet the 
definition of a significant regulatory action it does not trigger the 
requirements contained in Executive Order 13771. See OMB's Memorandum 
titled ``Interim Guidance Implementing Section 2 of the Executive Order 
of January 30, 2017 titled `Reducing Regulation and Controlling 
Regulatory Costs'[thinsp]'' (February 2, 2017).
    This final 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 established herein will 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 rule decreases 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 handled.
    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

[[Page 28551]]

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 of $0.0025 per 
hundredweight of potatoes 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, will be adequate to cover budgeted 
expenses. Funds in the reserve (projected to be $158,275 on July 31, 
2017) are expected to be reduced to comply with the maximum permitted 
by the order of approximately one fiscal period's expenses.
    The assessment rate will 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 will be in effect 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 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 will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2017-2018 budget, and those 
for subsequent fiscal periods, will be reviewed and, as appropriate, 
approved by USDA.

Final 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 considered the economic impact of this rule 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 
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 rule decreases 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 
handled. 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, will 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

[[Page 28552]]

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 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, will 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 decreases 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 will 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.
    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 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 rule imposes 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 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.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on March 21, 2017 (82 FR 14485). Copies of the proposed rule 
were also mailed or sent via facsimile to all Idaho-E. Oregon potato 
handlers. Finally, the proposal was made available through the internet 
by USDA and the Office of the Federal Register. A 30-day comment period 
ending April 20, 2017, was provided for interested persons to respond 
to the proposal.
    Two comments were received during the comment period in response to 
the proposal. Both comments were received from outside of the regulated 
production area. One comment supported the proposed assessment 
decrease. The other comment did not support the proposal, however, it 
did not address the merits of the proposed rule. Accordingly, no 
changes have been made to the rule as proposed, based on the comments 
received.
    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.
    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.

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 
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: June 20, 2017.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2017-13174 Filed 6-22-17; 8:45 am]
 BILLING CODE 3410-02-P