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###### Department of Agriculture

###### Agricultural Marketing Service 

          - 7 CFR Part 1207 
          - [Docket No. AMS-FV-06-0177; FV-06-703-FIR] 

# AGENCY:

Agricultural Marketing Service, USDA. 

# ACTION:

Final rule. 

# SUMMARY:

The Department of Agriculture (USDA) is adopting, as a final rule, without change, an interim final rule amending the structure of the Administrative Committee (Committee) of the National Potato Promotion Board (Board) as prescribed in the Potato Research and Promotion Plan. This rule continues in effect the action that increased the number of Vice-Chairperson positions on the Committee from six to seven. The change is intended to more closely correlate the Committee's representation with potato production in the Northwest district—a five state region which accounts for more than half of all U.S. potato production. 

# DATES:

*Effective Date:*                         May 4, 2007.                     

# FOR FURTHER INFORMATION CONTACT:

                        Barry Broadbent, Marketing Specialist, or Gary Olson, Regional Manager, Northwest Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW., Third Avenue, Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503) 326-7440, or e-mail:                         *Barry.Broadbent@usda.gov*                         or                         *GaryD.Olson@usda.gov.*

                        Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or e-mail:                         *Jay.Guerber@usda.gov.*

# SUPPLEMENTARY INFORMATION:

This rule is issued under the Potato Research and Promotion Plan [7 CFR Part 1207], hereinafter referred to as the “Plan.” The Plan is authorized by the Potato Research and Promotion Act, as amended [7 U.S.C. 2611-2627], hereinafter referred to as the “Act.” 

The Office of Management and Budget (OMB) has waived the review process required by Executive Order 12866 for this action. 

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. 

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 311 of the Act, a person subject to a plan may file a petition with the U.S. Department of Agriculture (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. 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 such person is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided that a complaint is filed not later than 20 days after date of the entry of the ruling. 

                    This rule adopts the interim rule that modified the structure of the Board's Administrative Committee as prescribed in the Plan by increasing the number of Vice-Chairperson positions on the Committee from six to seven. This additional position is allocated, as provided in the Board's bylaws, to the Northwest district. This rule increased                           ( print page 16268)                        from 25 percent to 33 percent Board representation at the executive level for potato producers in Montana, Idaho, Oregon, Washington, and Alaska is. The change was recommended by a large majority of the Board, with only 3 of 84 members dissenting at the Board's meeting on March 18, 2006.                 

Section 1207.327(b) of the Plan provides the authority to make rules and regulations, with USDA approval, to effectuate the terms and conditions of the Plan. Section 1207.328(a) of the Plan provides the authority to select from its members such officers as may be necessary and to adopt such rules for the conduct of its business as the Board may deem advisable. 

Section 1207.507(a) of the Plan's administrative rules delineates the structure of Board's Administrative Committee. The Committee is selected from among Board members and must be composed of producer members, one or more importer member(s), and the public member. The Board, through the adoption of their bylaws, may prescribe the manner of selection and the number of members; except that the regulations mandate that the Committee shall include a Chairperson and a fixed number of Vice-Chairpersons. The bylaws also designate the officers and the immediate past Chairperson as the Board's Executive Committee. 

Prior to this modification, the Plan provided for six Vice-Chairperson positions on the Committee. Vice-Chairperson positions are allocated in the Board's bylaws to represent production districts as determined by the Board. This rule adopts the interim rule that increased the number of Vice-Chairperson positions to seven. The additional Vice-Chairperson position is allocated to the Northwest district, which historically has been the district with the greatest production. 

At its meeting on March 18, 2006, the Board discussed the structure of its model of governance as it relates to adequate representation of their constituents. The Board had been studying this issue for a number of years. Representatives from the potato producing districts that have experienced increases over the last 30 years expressed a desire for greater Board representation. 

The Northwest district, which includes the States of Montana, Idaho, Oregon, Washington, and Alaska, has increased production such that the district now accounts for 49.5 percent of all potatoes produced by or imported into the U.S. Under the current Plan, the Northwest district accounts for 47.4 percent of the votes of the full Board, which the Board has determined to be equitable. In contrast, membership on the Executive Committee, the governing body of the Administrative Committee, is not representative of current production. The Northwest district has held only two of the eight executive positions, which represents only 25 percent of the Executive Committee vote, while production in the district has increased to nearly 50 percent. 

The members agreed to a compromise solution to increase the number of officer positions on the Administrative Committee by one and, through a change in the Board's bylaws, to allocate the additional Vice-Chairperson position to the Northwest district. Eighty-one Board members voted in favor of the proposal and three members were opposed. Those in opposition represented the Northeast district and were concerned, even after the compromise proposal, that too much influence on the Board would shift to the West. 

## Final Regulatory Flexibility Analysis and Paperwork Reduction Act 

                    In accordance with the Regulatory Flexibility Act (RFA)[5 U.S.C. 601*et seq.*], the Agricultural Marketing Service has examined the impact of this rule on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such action so that small businesses will not be disproportionately burdened.                 

There are approximately 1,353 handlers, 5,223 producers, and 300 importers of potatoes and potato products who are subject to the provisions of the Plan. The Small Business Administration (SBA) defines small agricultural service firms, which includes handlers and importers, as those having annual receipts of less than $6,500,000, and small agricultural producers are defined as those having annual receipts of less than $750,000. Most of the producers and handlers, and some of the importers would be classified as small businesses under the criteria established by the SBA (13 CFR 121.201). In addition, producers of less than 5 acres of potatoes are exempt from this program. 

This rule adopts the interim rule that modified the structure of the Administrative Committee of the Board, as delineated under § 1207.507 of the Plan, by increasing the number of Vice-Chairperson positions from six to seven. The Plan requires that the Committee be comprised of producer Board members, one or more importer Board member(s), and the public Board member. The exact number of members seated on the Committee is determined by the Board through the Board's bylaws. Additionally, the Plan regulations require that the Board elect a Committee Chairperson and a fixed number of Vice-Chairpersons. 

The Board, through their bylaws, allocates the Committee's officer positions according to production districts, so as to provide equitable representation at the executive level. The Northwest district, which has historically represented a large percentage of total potato production, has in the past been allocated two officer positions, while the other five districts have each been allocated one. Currently, producers within the Northwest district collectively produce over 50 percent of the total U.S. potato production. The additional Vice-Chairperson position created by this rule is allocated by the Board's revised bylaws to the Northwest district, thereby increasing representation for that district at the executive level from 25 percent to 33 percent. The authority for this action is provided in §§ 1207.327 and 1207.328 of the Plan. 

At their March 18, 2006, meeting, the Board discussed the factors leading up to this action and the potential impact on the industry after the change. However, there is no direct financial impact to producers, handlers, or importers as a result of this action. 

The Board discussed alternatives to this change, including reducing the number of districts, defining Committee representation as a ratio relative to Board members from each district, and reducing the size of the Board to the size of the existing Administrative Committee. None of the proposals garnered much support and were ultimately dropped from consideration because the changes were deemed to be too divisive to the industry. 

The 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. 

This rule will not impose any additional reporting or recordkeeping requirements on either small or large potato handlers or importers. As with all Federal research and promotion programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. 

                    Further, the Board's meetings were widely publicized throughout the potato industry and all interested persons were                           ( print page 16269)                        invited to attend the meetings and participate in Board deliberations. Like all Board meetings, the March 18, 2006, meeting was a public meeting and all entities, both large and small, were able to express their views on this issue. Finally, interested persons were invited to submit information on the regulatory and informational impacts of this action on small businesses.                 

                    An interim final rule concerning this action was published in the                     **Federal Register**                     on December 22, 2006. Copies of the rule were mailed by the Board's staff to all Board members and potato handlers. In addition, the rule was made available through the Internet by USDA and the Office of the Federal Register. The interim final rule provided for a 60-day comment period which ended February 20, 2007. Two comments were received, both of which were in support of the change.                 

                    A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at the following Web site:                     *http://www.ams.usda.gov/​fv/​moab.html.*                     Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the                     **FOR FURTHER INFORMATION CONTACT**                     section.                 

                    After consideration of all relevant material presented, including the Board's recommendation, and other information, the interim final rule as published in the                     **Federal Register**                     (71 FR 76899, December 22, 2006), is adopted, as a final rule, without change.                 

# List of Subjects in 7 CFR Part 1207

      - Advertising
      - Agricultural research
      - Imports
      - Potatoes
      - Reporting and recordkeeping requirements

# PART 1207—POTATO RESEARCH AND PROMOTION PLAN 

Accordingly, the interim final rule amending 7 CFR part 1207 which was published at 71 FR 76899 on December 22, 2006, is adopted as a final rule without change.

Dated: March 29, 2007. 

Lloyd C. Day, 

Administrator, Agricultural Marketing Service. 

[FR Doc. E7-6274 Filed 4-3-07; 8:45 am] 

BILLING CODE 3410-02-P