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[Federal Register Volume 78, Number 226 (Friday, November 22, 2013)]
[Rules and Regulations]
[Pages 69985-69987]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28102]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Doc. No. AMS-FV-13-0072; FV13-948-2 IR]

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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
Colorado Potato Administrative Committee, Area No. 2 (Committee), for 
the 2013-2014 and subsequent fiscal periods from $0.0051 to $0.0033 per 
hundredweight of potatoes handled. The Committee locally administers 
the marketing order, which regulates the handling of Irish potatoes 
grown in Colorado. Assessments upon potato handlers are used by the 
Committee to fund reasonable and necessary expenses of the program. The 
fiscal period begins September 1 and ends August 31. The assessment 
rate will remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective November 23, 2013. Comments received by January 21, 
2014, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Fruit and Vegetable 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: Sue Coleman, Marketing Specialist, or 
Gary D. Olson, Regional Director, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email: 
Sue.Coleman@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 97 and Order No. 948, both as amended (7 CFR part 948), 
regulating the handling of Irish potatoes grown in Colorado, 
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 rule in 
conformance with Executive Orders 12866 and 13563.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the order now in effect, 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 issued herein, will be applicable to all assessable 
potatoes beginning September 1, 2013, 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 2013-2014 and subsequent fiscal periods from $0.0051 
to $0.0033 per hundredweight of potatoes. This change was unanimously 
recommended by the Committee at a meeting held on July 18, 2013.
    Section 948.4 of the order divides the State of Colorado into three 
areas of regulation for marketing order purposes. These areas include: 
Area No. 1, commonly known as the Western Slope; Area No. 2, commonly 
known as San Luis Valley; and, Area No. 3, which consists of the 
remaining producing areas within the State of Colorado not included in 
the definition of Area No. 1 or Area No. 2. Currently, the order only 
regulates the handling of potatoes produced in Area No. 2 and Area No. 
3. Regulation for Area No. 1 has been suspended.
    Section 948.50 of the order establishes committees as 
administrative agencies for each of the areas set forth under Sec.  
948.4. Section 948.75 establishes that each area committee is 
authorized to incur such expenses as the Secretary may find are 
reasonable and likely to be incurred during each fiscal period for its 
maintenance and functioning, and for purposes determined to be 
appropriate for administration of this part. Section 948.76 requires 
each area committee to prepare and submit an estimated budget to the 
Secretary for approval and to recommend a rate of assessment sufficient 
to provide funds to defray its proposed expenditures.

[[Page 69986]]

    The members of the Committee are producers and handlers of Colorado 
Area No. 2 potatoes. They 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. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 2003-2004 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate for Colorado Area 
No. 2 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 July 18, 2013, and unanimously recommended 
2013-2014 expenditures of $55,745 and an assessment rate of $0.0033 per 
hundredweight of potatoes. In comparison, last year's budgeted 
expenditures were $71,227 and the assessment rate was $0.0051 per 
hundredweight of potatoes. The assessment rate of $0.0033 is $0.0018 
lower than the rate currently in effect. The assessment rate decrease 
is necessary to reduce the funds held in reserve to less than 
approximately two fiscal periods' expenses (Sec.  948.78).
    The major expenditures recommended by the Committee for the 2013-
2014 fiscal period include $49,265 for administrative expenses, $3,393 
for office expenses, and $3,087 for building maintenance expenses. 
Budgeted expenses for these items in 2012-2013 were $59,122 for 
administrative expenses, $4,275 for office expenses, and $7,830 for 
building maintenance expenses, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Colorado Area 
No. 2 potatoes. Colorado Area No. 2 potato shipments are estimated to 
be 14,363,000 hundredweight, which should provide $47,397.90 in 
assessment income. Income derived from handler assessments and funds 
from the Committee's authorized reserve will be adequate to cover 
budgeted expenses. Funds in the reserve (currently $120,995) will be 
reduced to comply with the maximum permitted by the order of 
approximately two fiscal periods' expenses.
    The assessment rate established in 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 is effective 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 2013-2014 budget and those 
for subsequent fiscal periods will 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 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 80 handlers of Colorado Area No. 2 potatoes 
subject to regulation under the order and approximately 180 producers 
in the regulated production area. Small agricultural service firms are 
defined by the Small Business Administration as those having annual 
receipts of less than $7,000,000, and small agricultural producers are 
defined as those having annual receipts of less than $750,000 (13 CFR 
121.201).
    During the 2011-2012 fiscal period, the most recent for which 
statistics are available, 15,072,963 hundredweight of Colorado Area No. 
2 potatoes were inspected under the order and sold into the fresh 
market. Based on an estimated average f.o.b. price of $12.60 per 
hundredweight, the Committee estimates that 66 Area No. 2 handlers, or 
about 83 percent, had annual receipts of less than $7,000,000. In view 
of the foregoing, the majority of Colorado Area No. 2 potato handlers 
may be classified as small entities.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for the 
2011 Colorado fall potato crop was $10.70 per hundredweight. 
Multiplying $10.70 by the shipment quantity of 15,072,963 hundredweight 
yields an annual crop revenue estimate of $161,280,704. The average 
annual fresh potato revenue for each of the 180 Colorado Area No. 2 
potato producers is therefore calculated to be approximately $896,000 
($161,280,704 divided by 180), which is greater than the SBA threshold 
of $750,000. Consequently, on average, many of the Colorado Area No. 2 
potato producers may not be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee, and collected from handlers, for the 2013-2014 and 
subsequent fiscal periods from $0.0051 to $0.0033 per hundredweight of 
potatoes. The Committee unanimously recommended 2013-2014 expenditures 
of $55,745 and an assessment rate of $0.0033. The assessment rate of 
$0.0033 is $0.0018 lower than the 2012-2013 rate. The quantity of 
assessable potatoes for the 2013-2014 fiscal period is estimated at 
14,360,000 hundredweight. Thus, the $0.0033 rate should provide $47,388 
in assessment income. Income derived from handler assessments and funds 
from the Committee's authorized reserve will be adequate to cover 
budgeted expenses.
    The major expenditures recommended by the Committee for the 2013-
2014 year include $49,265 for administrative expenses, $3,393 for 
office expenses, and $3,087 for building maintenance expenses. Budgeted 
expenses for these items in 2012-2013 were $59,122, $4,275, and $7,830, 
respectively.
    The lower assessment rate is necessary to reduce the reserve 
balance to less than approximately two fiscal periods' expenses. The 
reserve balance on August 31, 2012, was $120,995. This amount exceeds 
the maximum authorized reserve amount of $111,490 by $9,505. Assessment 
income for 2013-2014 is estimated at $47,397.90, while expenses are 
estimated at $55,745. The Committee anticipates using $8,347.10 of 
their reserve fund for the 2013-2014 fiscal period. While the reserve 
fund may exceed the maximum authorized level by $1,157.90, it was noted 
that there is a potential that the Committee may receive less 
assessments than estimated. In addition, the Committee expects to draw 
funds from the reserve

[[Page 69987]]

in subsequent fiscal periods that would further reduce the balance.
    The Committee discussed alternatives to this action. Leaving the 
assessment rate at the current $0.0051 per hundredweight was initially 
considered, but not recommended because of the Committee's desire to 
decrease the level of the monetary reserve so that it is not more than 
approximately two fiscal periods' expenses. Lower assessment rates were 
considered, but also not recommended, because they would not generate 
the amount of income necessary to administer the program. The Committee 
ultimately determined that an assessment income of $47,397.90, 
generated from the $0.0033 rate, combined with reserve funds, would be 
sufficient to meet its 2013-2014 expenses.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the producer 
price for the 2013-2014 season could range between $8.00 and $15.00 per 
hundredweight of potatoes. Therefore, the estimated assessment revenue 
for the 2013-2014 fiscal period, as a percentage of total producer 
revenue, could range between 0.02 and 0.04 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 reduces the burden on handlers and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the Colorado Area No. 2 potato industry, and all 
interested persons were invited to attend and participate in the 
Committee's deliberations. Like all Committee meetings, the July 18, 
2013, 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 interim 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 were 
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 action imposes no additional reporting or recordkeeping 
requirements on either small or large Colorado Area No. 2 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 citizens to access 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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny 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 action, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) The 2013-2014 fiscal period began on September 1, 
2013, 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) this action decreases the assessment rate for 
assessable potatoes beginning with the 2013-2014 fiscal period; (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; and (4) this interim rule provides a 
60-day comment period, and all comments timely received will be 
considered prior to finalization of this rule.

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, 2013, an assessment rate of $0.0033 per 
hundredweight is established for Colorado Area No. 2 potatoes.

    Dated: November 18, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-28102 Filed 11-21-13; 8:45 am]
BILLING CODE 3410-02-P
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