[Federal Register Volume 83, Number 101 (Thursday, May 24, 2018)]
[Proposed Rules]
[Pages 24045-24047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11084]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 83, No. 101 / Thursday, May 24, 2018 / 
Proposed Rules  

[[Page 24045]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-SC-18-0022; SC18-948-1 PR]


Irish Potatoes Grown in Colorado; Increased Assessment Rate for 
Area No. 2

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Colorado Potato Administrative Committee (Committee) to increase the 
assessment rate established for Area No. 2 for the 2018-2019 and 
subsequent fiscal periods. The assessment rate would remain in effect 
indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by June 25, 2018.

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 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 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 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 action, pursuant to 5 U.S.C. 553, 
proposes an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed rule is issued under 
Marketing Agreement No. 97 and Order No. 948, as amended (7 CFR part 
948), regulating the handling of Irish potatoes grown in Colorado. Part 
948, (referred to as 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 Committee locally 
administers the Order and is comprised of producers and handlers 
operating within the area of production.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This proposed 
rule falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposal 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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Order, Colorado Area No. 2 potato 
handlers are subject to assessments. Funds to administer the Order are 
derived from such assessments. It is intended that the assessment rate 
would be applicable to all assessable potatoes in Area No. 2 for the 
2018-2019 fiscal period, 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.
    The Order provides authority for each area Committee, with the 
approval of USDA, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The members are 
familiar with the Committee's needs and with the costs of 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.
    This proposal would increase the assessment rate for Area No. 2 
from $0.0033 to $0.006 per hundredweight of potatoes handled for the 
2018-2019 and subsequent fiscal periods. The Committee established the 
current rate in 2013-2014 fiscal period to reduce the Committee's 
monetary reserve to a level that it determined to be appropriate under 
the Order. Since that action, the reserve fund has been drawn down to 
approximately 15 percent of annual budgeted expenditures. The $0.006 
per hundredweight assessment rate would realign annual assessment 
revenue with expected administrative expenses moving forward and would 
no longer require the utilization of the monetary

[[Page 24046]]

reserve to fund a portion of the Committee's budgeted expenditures.
    The Committee met on March 15, 2018 to consider the Committee's 
projected 2018-2019 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 $0.006 per 
hundredweight of potatoes for the 2018-2019 fiscal period. The proposed 
assessment rate of $0.006 is $0.0027 higher than the rate currently in 
effect. Without the proposed increase, anticipated assessment revenue 
would not be sufficient to fund the Committee's ongoing administrative 
function, and the balance in the Committee's monetary reserve would not 
be enough to cover the deficit. The assessment rate increase is 
necessary to maintain the Committee's oversight activities at current 
levels and avoid a reduction in the program's effectiveness.
    For the 2017-2018 fiscal period, the Committee adopted a budget of 
$79,623. The Committee expects to recommend a similar level of budgeted 
expenditures for the 2018-2019 fiscal period at its meeting in May 
2018. The Committee anticipates its budgeted expenditures for the 2018-
2019 fiscal period to be close to the budgeted amounts for the 2017-
2018 fiscal period. Budgeted expenditures for the 2017-2018 fiscal 
period included $66,110 for administrative expenses, $6,138 for office 
expenses, and $7,375 for facilities/utilities. The Committee's annual 
budget has been relatively stable over the past five years, with 
average growth of approximately 2.7 percent. The Committee's budget 
five years ago for the 2013-2014 fiscal period was $71,227, compared to 
the 2017-2018 fiscal period budget of $79,623.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses, expected shipments, and the amount of 
funds available in the authorized reserve. Expected income derived from 
handler assessments of $84,000 (estimated 14,000,000 hundredweight 
times $0.006 per hundredweight) would be adequate to cover budgeted 
expenses of between $81,000 and $83,000 and put a small amount back 
into the Committee's monetary reserve fund. Funds in the reserve 
(currently expected to be $11,848 at the end of the 2017-2018 fiscal 
period) would be kept within the maximum permitted by Sec.  
[thinsp]948.78.
    The assessment rate proposed in this rule 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 budget 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 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 160 producers of Colorado Area No. 2 
potatoes in the production area and approximately 60 handlers subject 
to regulation under the Order. Small agricultural producers are defined 
by the Small Business Administration (SBA) 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 (13 CFR 
121.201).
    According to data from USDA's Market News, the 2016-2017 season 
weighted average f.o.b. price for Colorado potatoes was approximately 
$12.06 per hundredweight. The Committee reported that shipments for the 
2016-2017 fiscal period were 13.9 million hundredweight. Using the 
number of handlers, and assuming a normal distribution, the majority of 
handlers would have average annual receipts of less than $7,500,000 
($12.06 times 13.9 million equals $167,634,000 divided by 60 handlers 
equals $2,793,900 per handler).
    In addition, based on data from USDA's National Agricultural 
Statistics Service, the season average producer price for Colorado 
potatoes for the 2016-2017 crop year was approximately $9.60 per 
hundredweight. Based on producer price, shipment data, and the total 
number of Colorado Area No. 2 potato producers, and assuming a normal 
distribution, the average annual producer revenue is above $750,000 
($9.60 times 13.9 million hundredweight equals $133,440,000 divided by 
160 producers equals $834,000 per producer). Thus, the majority of 
Colorado Area No. 2 potato handlers may be classified as small 
entities, while many of the Colorado Area No. 2 potato producers may be 
classified as large entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2018-2019 and subsequent fiscal periods from $0.0033 
to $0.006 per hundredweight of Colorado Area No. 2 potatoes. The 
Committee unanimously recommended the proposed increase. The proposed 
assessment rate of $0.006 is $0.0027 higher than the 2017-2018 rate. 
The quantity of assessable potatoes for the 2018-2019 fiscal period is 
estimated at 14 million hundredweight. Thus, the $0.006 rate should 
provide $84,000 in assessment income. Income derived from handler 
assessments would be adequate to cover budgeted expenses.
    The Committee adopted a budget of $79,623 for the 2017-2018 fiscal 
period and expects to recommend a similar amount in budgeted 
expenditures for the 2018-2019 fiscal period at its scheduled May 2018 
meeting. The major budgeted expenditures for the 2017-2018 year 
included $66,110 for administrative expenses, $6,138 for office 
expenses, and $7,375 for facilities/utilities. Budgeted expenses for 
these items in 2016-2017 were $65,894, $6,587, and $6,313, 
respectively.
    Prior to arriving at this proposed assessment rate, the Committee 
considered the benefits and costs related to establishing other 
assessment rates. However, the Committee determined that any assessment 
rate other than the $0.006 per hundredweight rate would either generate 
insufficient revenue to meet the Committee's expected expenses for the 
2018-2019 fiscal period or would result in a larger than desired 
addition to the Committee's reserve. Based on estimated shipments, the 
recommended assessment rate of $0.006 should provide $84,000 in

[[Page 24047]]

assessment income. The Committee determined that this level of 
assessment revenue would be adequate to cover budgeted expenses for the 
2018-2019 fiscal period without unduly increasing reserve funds.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal year indicates that the average 
producer price for the 2018-2019 season should be approximately $9.26 
per hundredweight of potatoes. Therefore, the estimated assessment 
revenue for the 2018-2019 fiscal period as a percentage of total 
producer revenue would be about 0.06 percent.
    This proposed action would increase 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 
Order. In addition, the Committee's meetings were widely publicized 
throughout the Colorado potato industry. All interested persons were 
invited to attend the meetings and participate in Committee 
deliberations on all issues. Like all Committee meetings, the March 15, 
2018 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 information collection 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 OMB and assigned OMB No. 0581-0178, Generic 
Vegetable and Specialty Crops. No changes in those requirements would 
be necessary as a result of this action. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would not impose any 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 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 proposed 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/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.

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

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

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

0
2. Section 948.216 is revised to read as follows:


Sec.  948.216   Assessment rate.

    On and after September 1, 2018, an assessment rate of $0.006 per 
hundredweight is established for Colorado Area No. 2 potatoes.

    Dated: May 18, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-11084 Filed 5-23-18; 8:45 am]
 BILLING CODE 3410-02-P