[Federal Register Volume 87, Number 73 (Friday, April 15, 2022)]
[Rules and Regulations]
[Pages 22433-22436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08042]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 87, No. 73 / Friday, April 15, 2022 / Rules
and Regulations
[[Page 22433]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1207
[Doc. No. AMS-SC-21-0032]
Amendments to the United States Potato Board Membership and
Assessment Methods
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule changes the approved data sources used to determine
the number of National Potato Promotion Board (Board) seats, expands
payment methods used to remit assessments to include electronic
submission, and updates the table of Harmonized Tariff Schedule of the
United States (HTS) codes and assessment rates for imported potatoes
and potato products. Finally, this rule includes new language
eliminating the need to amend the Potato Research and Promotion Plan to
update the list of relevant HTS codes.
DATES: Effective May 16, 2022.
FOR FURTHER INFORMATION CONTACT: Alexandra Caryl, Branch Chief of Mid-
Atlantic Region, Market Development Division, Specialty Crop Program,
AMS, USDA, Stop 0244, 1400 Independence Avenue SW, Room 1406-S,
Washington, DC 20250-0244; telephone: (202) 253-4768; or electronic
mail: [email protected].
SUPPLEMENTARY INFORMATION: This rule, affecting the Potato Research and
Promotion Plan (Plan) (7 CFR part 1207) is authorized under the Potato
Research and Promotion Act (Act) (7 U.S.C. 2611-2627).
Executive Orders 12866 and 13563
The U.S. Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Orders 12866 and 13563. Executive Orders
12866 and 13563 direct agencies to assess all costs and benefits of
available regulatory alternatives and, if regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules and promoting flexibility. This action falls within a
category of regulatory actions that the Office of Management and Budget
(OMB) exempted from Executive Order 12866 review.
Executive Order 13175
This action has been reviewed in accordance with the requirements
of Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments. The Agricultural Marketing Service (AMS) has
assessed the impact of this final rule on Indian tribes and determined
that this rule will not have tribal implications that require
consultation under Executive Order 13175. AMS hosts a quarterly
teleconference with tribal leaders where matters of mutual interest
regarding the marketing of agricultural products are discussed.
Information about the changes to the regulations were shared during a
quarterly call on April 9, 2020, and tribal leaders were informed about
the revisions to the regulation and the opportunity to submit comments.
AMS is committed to working with the USDA Office of Tribal Relations to
ensure meaningful consultation is provided, as needed, with regards to
this change to the Plan.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have retroactive effect.
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a major rule, as defined by 5 U.S.C. 804(2).
The Congressional Review Act provides that administrative
proceedings must be exhausted before parties may file suit in court.
Under section 311 of the Act (7 U.S.C. 2620), a person subject to a
plan may file a petition with USDA stating that such plan, any
provision of such plan, or any obligation imposed in connection with
such plan, is not in accordance with law and request a modification of
such plan or to be exempted therefrom. Such person is afforded the
opportunity for a hearing on the petition. Thereafter, USDA will issue
a ruling on the petition. The Congressional Review Act provides that
the district court of the United States for any district in which the
petitioner resides or conducts business shall have the jurisdiction to
review a final ruling on the petition if the petitioner files a
complaint for that purpose not later than 20 days after date of the
entry of USDA's final ruling.
Background
This rule amends the Plan's allowed sources of potato production
data used to determine the number of Board seats to which each State is
entitled. Additionally, this rule expands payment methods used to remit
assessments to include electronic submission, and updates the table of
HTS codes and assessment rates for imported potatoes and potato
products. Finally, this rule inserts new language to avoid future
amendments to the Plan if HTS numbers subject to assessment reflected
in the table are changed and such changes are merely a replacement of
previous numbers.
Data Sources for Board Membership
The Plan became effective on March 9, 1972. Section 1207.320(b) of
the Plan provides the formula used to determine how many Board member
seats to which each State is entitled. Under the Plan every State is
eligible to have a representative on the Board and is eligible to have
additional members based on the potato production levels in that State.
For each five million hundredweight of such production, or major
fraction thereof, produced within each State, such State shall be
entitled to one member.
The Plan states potato production totals must come from the
``latest Crop Production Annual Summary Report issued by the Crop
Reporting Board, U.S. Department of Agriculture.'' See Sec.
1207.320(b). The Crop Production Annual Summary Report is currently
issued by the National Agricultural Statistics Service (NASS).
In March 2020, USDA's NASS and AMS communicated to the Board that
NASS will no longer be collecting potato production data for the
following
[[Page 22434]]
ten states: Alaska, Illinois, Kansas, Maryland, Missouri, Montana, New
Jersey, New York, North Carolina, and Virginia. In June 2020, NASS
estimated the cost of collecting the data to approximately $80,000 per
year. The Board considered this estimate and concluded that the cost to
collect this information will exceed the value of assessments collected
from the ten States. Subsequently, the Board decided to temporarily
freeze the number of seats for those ten States at their 2019
quantities so it could move forward with the assignment of Board member
seats for 2020 nominations.
At the July Board 2020 meeting, Board staff presented to the
Board's Administrative Committee a summary of constraints related to
the collection of production data. During a January 2021 meeting, Board
staff further discussed the need to update the Plan with the
Administrative Committee and made the recommendation to amend the Plan
during a subsequent meeting on March 9, 2021.
The Board recommended to use production data from audited
assessment reports in place of NASS data for states that have not been
included in NASS reports.
As indicated in Table 1, this amendment will allow the Board to use
audited assessment data in instances where NASS data is unavailable.
Table 1--NASS Production and Board Production (Board) and Number of Producer Members by State
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2020 NASS 2020 NASS &
NASS 2016 NASS 2017 NASS 2018 Board 2018 2016-2018 NASS 2016-2018 NASS number of Board number
State (cwt) (cwt) (cwt) (cwt) avg. (1,000 & Board avg. members (cwt/ of members
cwt) (1,000 cwt) 5,000) (cwt/5,000)
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Alabama (AL).................................................... .............. .............. .............. 70 .............. .............. 1 1
Illinois (IL)................................................... 2,812 3,321 2,850 394 2,994 2,176 1 1
Kansas (KS)..................................................... 1,260 1,558 1,419 483 1,412 1,100 1 1
Maryland (MD)................................................... .............. 913 510 389 474 651 1 1
Missouri (MO)................................................... 2,410 2,423 1,665 1,012 2,166 1,948 1 1
Montana (MT).................................................... 3,685 3,774 3,830 149 3,763 2,536 1 1
New Jersey (NJ)................................................. .............. 600 530 125 377 363 1 1
New York (NY)................................................... 3,552 4,032 4,118 899 3,901 2,828 1 1
North Carolina (NC)............................................. 2,992 3,473 2,318 1,702 2,928 2,722 1 1
Virginia (VA)................................................... 1,189 1,193 1,034 450 1,139 944 1 1
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Assessment Payment Options
This rule will allow electronic submission in the list of allowable
methods of payment to remit assessments and remove references to drafts
and money orders.
The Board staff stated that allowing electronic submission (e.g.,
bank transfer payments (Automated Clearing House) (ACH) or wire
transfer payments) of assessments will improve and streamline
operations by lowering the cost of processing mailed checks. This
change will remove references to drafts and money orders as handlers
are no longer using these forms of payment.
Harmonized Tariff Schedule Table
Section 1207.510(b)(3) of the Plan contains an HTS table that
reflects outdated HTS codes, assessment rates, and potato categories
for imports.
Pursuant to Section 1207.327(b) of the Plan, the Board has the
authority to recommend to AMS amendments to this Plan. To reduce
Federal Register publication costs associated with amending the Plan to
remain consistent with updated HTS codes, the Board recommended
removing the actual HTS chart from the Plan and replacing the HTS chart
with a reference to the HTS codes, assessment rates and potato
categories for imports.
AMS has adopted an alternative approach that includes amending the
Plan by updating the current HTS chart and inserting new language to
avoid future amendments to the Plan if an HTS number subject to
assessment reflected in the table is changed and such change is merely
a replacement of a previous number. This change will reduce future
Federal Register publication costs associated with amending the Plan to
remain consistent with future updated HTS numbers that have no impact
on the description of potato involved.
Final Regulatory Flexibility Act Analysis
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
601-612), AMS is required to examine the impact of the final rule on
small entities. Accordingly, AMS has considered the economic impact of
this action on small entities.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions so that small businesses will not be
disproportionately burdened. The Small Business Administration (SBA)
defines, in 13 CFR part 121, small agricultural producers as those
having annual receipts of no more than $1 million and small
agricultural service firms (handlers) as those having annual receipts
of no more than $30 million.
According to the Board, there were approximately 60 importers, 955
handlers, and 1,500 producers in 2020. These numbers are used in
computations, explained in the following paragraphs, to develop
estimates of the proportion of small and large businesses using the
size criteria of the Small Business Administration.
Large agricultural producers under the criteria established by the
SBA are those with $1 million or more in annual sales. Producers that
pay Board assessments have a minimum of 5 acres of potatoes.
The 2017 Agricultural Census reported 2,420 farms with 5 or more
harvested acres of potatoes, of which 1,283 (53 percent) had annual
sales of $1,000,000 or more. Although there is a difference between the
Board producer number and the Census farm number estimate, a majority
the of potato producers responsible for paying assessments would likely
be classified as large businesses according to the SBA criteria.
The SBA threshold size for a large agricultural service firm is $30
million in annual sales. The Board estimate of the number of potato
handlers in 2020 was 955. According to NASS, the total value of the
2020 U.S. potato crop was $3.9 billion. Dividing $3.9 billion by 955
yields an annual estimate of potato sales per handler of approximately
$4.1 million, well below the $30 million, threshold for a large
agricultural service firm.
Applying handler margins of twenty to fifty percent (representing a
range of possible handler costs above the farm-level value) would
increase that $4.1 million sales per handler number to between $4.9 and
$6.2 million, still well below the $30 million SBA threshold. In
[[Page 22435]]
addition, the NASS $3.9 billion U.S. crop value for 2020 overstates to
a moderate extent the crop value relevant to this computation because
an unknown, but likely small, portion of that annual potato crop value
was provided by farms with less than 5 harvested acres.
With estimated average annual sales per handler in a moderate range
above or below $4 million, it can be stated that a majority of potato
handlers are small agricultural service firms, according to SBA
criteria.
The Board received approximately $14.5 million in 2020 assessments
($0.03 per hundredweight, abbreviated as cwt) and reported that about
20 percent of those assessments ($2.9 million) were paid by potato
importers. Dividing $2.9 million by the $0.03 per cwt assessment rate
yields a potato import quantity estimate of 96.67 million cwt.
Multiplying the 96.67 million cwt imported quantity by the NASS 2020
average U.S. grower price per cwt of $9.30 yields a 2020 import value
estimate of $899 million. Dividing that imported potato value estimate
by the number of importers (60) yields an average annual sales value
per importer estimate of about $15 million.
This average annual sales value per importer estimate was computed
using an average farm-level price. It does not include a margin to
account for importer costs of marketing, for which there is no publicly
available information. Using the $15 million figure, and applying a
possible range of importer margins of 20 to 50 percent, would yield an
annual average sales value per importer range of $18.0 to $22.5
million. Since these numbers are below the SBA threshold level of $30
million, and assuming a normal distribution, a majority of potato
importers are determined to be small agricultural service businesses.
This rule will amend Sec. Sec. 1207.320, 1207.502, 1207.510 and
1207.513.
Regarding the economic impact of this final rule on affected
entities, this action will impose no costs on producers, handlers, or
importers. The changes are administrative in nature and will allow the
Board to effectively carry out the requirements of the Plan.
In response to the discontinuation of NASS collection of potato
production data for 10 States, USDA considered the following
alternatives to the chosen amendment language: Take no action and hold
constant the production figures for the 10 States to the final year for
which NASS published data; or fund NASS collection of data for the 10
States using Board resources. The first of these alternatives will
result in the potential for Board representation that is inconsistent
with domestic production. Potato production sees relatively high
fluctuation from year to year. Consequently, distribution of Board
member seats based on a fixed production figure will prevent the Board
from adequately reflecting the changes that occur in the industry over
time; therefore, this is not a viable alternative. The second
alternative will result in an annual cost to the Board of $80,000 to
restore the collection of potato production data by NASS for the 10
States which it has omitted. As this amount exceeds the total value of
assessments collected from these 10 States, this is also not a viable
alternative. The amendments encapsulated by this final rule will
streamline and improve Board operations.
In accordance with OMB regulation [5 CFR part 1320], which
implements information collection requirements imposed by the Paperwork
Reduction Act of 1995 [44 U.S.C. 3501 et seq.], there are no new
requirements contained in this rule.
As with all Federal promotion programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. USDA has not
identified any relevant Federal rules that duplicate, overlap, or
conflict with this 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.
Regarding outreach efforts, all the Board's meetings are open to
the public and interested persons are invited to participate and
express their views. No concerns were raised.
AMS has performed this final RFA analysis regarding the impact of
this action on small entities.
A proposed rule concerning this action was published in the Federal
Register on September 16, 2021 (86 FR 51626). A 30-day comment period
ending October 18, 2021, was provided to allow interested persons to
submit comments.
One comment was received in response to the proposed rule. This
comment was immaterial to the topic of this rule. Therefore, no changes
have been made to the proposed rule based on the comment received.
After consideration of all relevant matters presented, including
the information and recommendation submitted by the Board, the comments
received, and other relevant information, AMS has determined that this
rule, as hereinafter set forth, is consistent with and will effectuate
the purposes of the Act.
List of Subjects in 7 CFR Part 1207
Advertising, Agricultural research, Potatoes, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service amends 7 CFR part 1207 as follows:
PART 1207--POTATO RESEARCH AND PROMOTION PLAN
0
1. The authority citation for 7 CFR part 1207 continues to read as
follows:
Authority: 7 U.S.C. 2611-2627; 7 U.S.C. 7401.
0
2. Amend Sec. 1207.320 by revising paragraph (b) to read as follows:
Sec. 1207.320 Establishment and membership.
* * * * *
(b) Producer membership upon the Board shall be determined on the
basis of the potato production reported in the latest Crop Production
Annual Summary Report issued by the National Agricultural Statistics
Service of the U.S. Department of Agriculture. If a State's potato
production data is not provided by the National Agricultural Statistics
Service, the Board may use an alternative data source that reliably
reflects potato production in the United States. Unless the Secretary,
upon recommendation of the Board, determines an alternate basis, for
each five million hundredweight of such production, or major fraction
thereof, produced within each State, such State shall be entitled to
one member. However, each State shall initially be entitled to at least
one member.
* * * * *
0
3. Amend Sec. 1207.502 by revising paragraph (a) to read as follows:
Sec. 1207.502 Determination of membership.
(a) Pursuant to Sec. 1207.320 and the recommendation of the Board,
annual producer memberships on the Board shall be determined on the
basis of the average potato production of the 3 preceding years in each
State as set forth in the Crop Production Annual Summary Reports issued
by the National Agricultural Statistics Service of the U.S. Department
of Agriculture. If a State's potato production data is not provided by
the National Agricultural Statistics Service, the Board may use an
alternative data source that reliably
[[Page 22436]]
reflects potato production in the United States.
* * * * *
0
4. Amend Sec. 1207.510 by revising paragraph (b)(3) to read as
follows:
Sec. 1207.510 Levy of assessments.
* * * * *
(b) * * *
(3) The Harmonized Tariff Schedule (HTS) categories and assessment
rates on imported tablestock potatoes and frozen or processed potatoes
for ultimate consumption by humans and on imported seed potatoes are
listed in the following table. In the event that any HTS number subject
to assessment is changed and such change is merely a replacement of a
previous number and has no impact on the description of the potatoes,
assessments will continue to be collected based on the new numbers.
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Assessment
Tablestock potatoes, frozen or processed -------------------------------
potatoes, and seed potatoes Cents/cwt Cents/kg
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0701.10.0020............................ 3.0 0.066
0701.10.0040............................ 3.0 0.066
0701.90.1000............................ 3.0 0.066
0701.90.5015............................ 3.0 0.066
0701.90.5025............................ 3.0 0.066
0701.90.5035............................ 3.0 0.066
0701.90.5045............................ 3.0 0.066
0701.90.5055............................ 3.0 0.066
0701.90.5065............................ 3.0 0.066
0710.10.0000............................ 6.0 0.132
2004.10.4000............................ 6.0 0.132
2004.10.8020............................ 6.0 0.132
2004.10.8040............................ 6.0 0.132
2005.20.0070............................ 4.716 0.104
0712.90.3000............................ 21.429 0.472
1105.10.0000............................ 21.429 0.472
1105.20.0000............................ 21.429 0.472
2005.20.0040............................ 21.429 0.472
2005.20.0020............................ 12.240 0.27
1108.13.0010............................ 27.0 0.595
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* * * * *
0
5. Amend Sec. 1207.513 by revising paragraph (c)(1) to read as
follows:
Sec. 1207.513 Payment of assessments.
* * * * *
(c) * * * (1) Except as provided in paragraphs (b) and (d) of this
section, each designated handler or importer shall remit assessments
directly to the Board by check or electronic payment. Checks are to be
made payable to the National Potato Promotion Board or the Board's
official doing business as name. Payment is due not later than 10 days
after the end of the month such assessment is due together with a
report (preferably on Board forms) thereon.
* * * * *
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-08042 Filed 4-14-22; 8:45 am]
BILLING CODE 3410-02-P