[Federal Register Volume 83, Number 166 (Monday, August 27, 2018)]
[Rules and Regulations]
[Pages 43501-43503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18560]



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 Rules and Regulations
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  Federal Register / Vol. 83, No. 166 / Monday, August 27, 2018 / Rules 
and Regulations  

[[Page 43501]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

DATES: Effective September 26, 2018.

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, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This 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 final rule in 
conformance with Executive Orders 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 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 as 
established herein will 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 in a position to formulate an 
appropriate budget and assessment rate. The assessment rate is 
formulated and discussed in a public meeting and all directly affected 
persons have an opportunity to participate and provide input.
    This rule increases 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 realigns annual assessment revenue with expected 
administrative expenses moving forward and will no longer require the 
utilization of the monetary 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 $0.006 
assessment rate is $0.0027 higher than the rate previously in effect. 
Without the increase, anticipated assessment revenue would not have 
been sufficient to fund the Committee's ongoing administrative 
function, and the balance in the Committee's monetary reserve would not 
have been 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.

[[Page 43502]]

The Committee recommended a similar level of budgeted expenditures for 
the 2018-2019 fiscal period at its meeting in May 2018. The Committee 
anticipates its expenditures for the 2018-2019 fiscal period to be 
close to the 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) should 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.  948.78.
    The assessment rate established by this rule 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 budget 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 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 rule increases 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 increase. The $0.006 per hundredweight 
assessment rate established by this rule 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 is expected to provide $84,000 in assessment income. Income 
derived from handler assessments is expected to be adequate to cover 
budgeted expenses.
    The Committee adopted a budget of $79,623 for the 2017-2018 fiscal 
period and recommended a similar amount of 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 the recommended 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 
established assessment rate of $0.006 should provide $84,000 in 
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 action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs, such costs 
are minimal and uniform on all handlers. Some of the additional costs 
may be passed on to producers. However, these costs are offset by the 
benefits derived by the operation of the Order.
    In addition, the Committee's meeting was widely publicized 
throughout the Colorado potato industry. All interested

[[Page 43503]]

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.
    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, 
Vegetable and Specialty Crops. No changes in those requirements are 
necessary as a result of this action. 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 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. As mentioned 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 May 24, 2018 (83 FR 24045). A copy of the proposed rule was 
provided to the handlers by the Committee. Finally, the proposal was 
made available through the internet by USDA and the Office of the 
Federal Register. A 30-day comment period ending June 25, 2018, was 
provided for interested persons to respond to the proposal. No comments 
were 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 will tend to 
effectuate the declared policy of the Act.

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 
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: August 22, 2018
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-18560 Filed 8-24-18; 8:45 am]
 BILLING CODE 3410-02-P