[Federal Register Volume 63, Number 136 (Thursday, July 16, 1998)]
[Rules and Regulations]
[Pages 38282-38284]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18998]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 948

[Docket No. FV98-948-1 IFR]


Irish Potatoes Grown in Colorado; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule decreases the assessment rate 
established for the Colorado Potato Administrative Committee, San Luis 
Valley Office (Area II) (Committee) under Marketing Order No. 948 for 
the 1998-99 and subsequent fiscal periods from $0.0030 to $0.0015 per 
hundredweight of potatoes handled. The Committee is responsible for 
local administration of the marketing order which regulates the 
handling of Irish potatoes grown in Colorado. Authorization to assess 
potato handlers enables the Committee to incur expenses that are 
reasonable and necessary to administer the program. The 1998-99 fiscal 
period begins September 1 and ends August 31. The assessment rate will 
continue in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective July 17, 1998. Comments received by September 14, 
1998, 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, Fruit 
and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax (202) 205-6632. Comments should 
reference the docket 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.

FOR FURTHER INFORMATION CONTACT: Dennis L. West, Northwest Marketing 
Field Office, Fruit and Vegetable Programs, AMS, USDA, 1220 SW Third 
Avenue, Room 369, Portland, OR 97204; telephone: (503) 326-2724, Fax: 
(503) 326-7440, or George J. Kelhart, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, Room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 
205-6632. Small businesses may request information on compliance with 
this regulation by contacting Jay Guerber, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone (202) 720-
2491, Fax: (202) 205-6632.

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 marketing agreement and order are 
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 (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, Colorado 
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, 1998, and continuing until modified, 
suspended, or terminated. This rule will not preempt any State or local 
laws, regulations, or policies, unless they present an irreconcilable 
conflict with this rule.

[[Page 38283]]

    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 the Secretary 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 the Secretary 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 the 
Secretary'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 1998-99 and subsequent fiscal periods from $0.0030 to 
$0.0015 per hundredweight of potatoes handled.
    The Colorado potato marketing order provides authority for the 
Committee, with the approval of the Department, to formulate an annual 
budget of expenses and collect assessments from handlers to administer 
the program. The members of the Committee are producers and handlers of 
Colorado Area II potatoes. They are familiar with the Committee's needs 
and with the costs for 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.
    In Colorado, both a State and a Federal marketing order operate 
simultaneously. The State order authorizes promotion, including paid 
advertising, which the Federal order does not. All expenses in this 
category are financed under the State order. The jointly operated 
programs consume about equal administrative time and the two orders 
continue to split administrative costs equally.
    For the 1996-97 and subsequent fiscal periods, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from fiscal period to fiscal period indefinitely 
unless modified, suspended, or terminated by the Secretary upon 
recommendation and information submitted by the Committee or other 
information available to the Secretary.
    The Committee met on May 21, 1998, and recommended, by a nine to 
one vote, 1998-99 expenditures of $66,895 and an assessment rate of 
$0.0015 per hundredweight of potatoes. The Committee member voting no 
objected to the amount being budgeted for the executive director's 
salary, but had no problem with the total amount budgeted or the 
reduction in the assessment rate. In comparison, last year's budgeted 
expenditures were $63,329. The assessment rate of $0.0015 is $0.0015 
less than the rate currently in effect. The Committee voted to lower 
the assessment rate and use some of the funds in its operating reserve 
in order to bring the reserve closer to the amount it believes 
necessary to administer the program. The decrease would reduce the 
financial burden on handlers as prices for San Luis Valley potatoes 
have been extremely low the past two seasons. Over production of the 
1996 fall crop and unusually cold weather during the 1997 fall crop 
growing season resulted in major financial disasters within the San 
Luis Valley potato industry. The Committee discussed various assessment 
rates, but decided that an assessment rate of less than $0.0015 would 
not generate the income necessary to administer the program with an 
adequate reserve.
    Major expenses recommended by the Committee for the 1998-99 fiscal 
period include $37,210 for salaries, $10,850 for office expenses, which 
include telephone, supplies, and postage, and $5,250 for building 
maintenance, which includes insurance and utilities. Budgeted expenses 
for these items in 1997-98 were $35,579, $9,500, and $5,250, 
respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Colorado Area II 
potatoes. Potato shipments for the year are estimated at 16,500,000 
hundredweight which should provide $24,750 in assessment income. Income 
derived from handler assessments, along with funds from the Committee's 
authorized reserve, will be adequate to cover budgeted expenses. Funds 
in the reserve ($124,903 as of September 1, 1997) will be kept within 
the maximum permitted by the order (less than approximately two fiscal 
periods' expenses; Sec. 948.78).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary 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 the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department 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 
1998-99 budget and those for subsequent fiscal periods will be reviewed 
and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action 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 
business 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. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 285 producers of Colorado Area II potatoes 
in the production area and approximately 100 handlers subject to 
regulation under the marketing order. Small agricultural producers have 
been defined by the Small Business Administration (13 CFR 121.601) as 
those having annual receipts less than $500,000 and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000. The majority of Colorado Area II potato producers and 
handlers may be classified as small entities.
    The rule decreases the assessment rate established for the 
Committee and collected from handlers for the 1998-99 and subsequent 
fiscal periods from $0.0030 to $0.0015 per hundredweight of potatoes 
handled. The Committee by a nine to one vote recommended 1998-99 
expenditures of $66,895 and an assessment rate of $0.0015 per 
hundredweight of potatoes handled. The Committee member voting no 
objected to the amount being budgeted for the executive director's 
salary but

[[Page 38284]]

had no problem with the total amount budgeted or the reduction in the 
assessment rate. In comparison, last year's budgeted expenditures were 
$63,329. The assessment rate of $0.0015 is $0.0015 less than the rate 
currently in effect. The Committee voted to lower the assessment rate 
and use some of the funds in its operating reserve in order to bring 
the reserve closer to the amount it believes necessary to administer 
the program. The decrease would reduce the financial burden on handlers 
as prices for San Luis Valley potatoes have been extremely low the past 
two seasons. Overproduction of the 1996 fall crop and unusually cold 
weather during the 1997 fall crop growing season resulted in major 
financial disasters within the San Luis Valley potato industry. The 
Committee discussed various assessment rates, but decided that an 
assessment rate of less than $0.0015 would not generate the income 
necessary to administer the program with an adequate reserve.
    Major expenses recommended by the Committee for the 1998-99 fiscal 
period include $37,210 for salaries, $10,850 for office expenses, which 
include telephone, supplies, and postage, and $5,250 for building 
maintenance which includes insurance and utilities. Budgeted expenses 
for these items in 1997-98 were $35,579, $9,500, and $5,250, 
respectively.
    With Colorado Area II potato shipments for 1998-99 estimated at 
16,500,000 hundredweight, the $0.0015 rate of assessment should provide 
$24,750 in assessment income. Income derived from handlers assessments, 
along with funds from the Committee's authorized reserve, will be 
adequate to cover budgeted expenses. Funds in the reserve ($124,903 as 
of September 1, 1997) will be kept within the maximum permitted by the 
order (less than approximately two fiscal periods' expenses; 
Sec. 948.78).
    Recent price information indicates that the grower price for the 
1998-99 marketing season will range between $1.60 and $6.15 per 
hundredweight of Colorado potatoes. Therefore, the estimated assessment 
revenue for the 1998-99 fiscal period as a percentage of total grower 
revenue will range between 0.0900 and 0.0243 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 II potato industry and all 
interested persons were invited to attend the meeting and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the May 21, 1998, 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 information on the regulatory 
and informational impacts of this action on small businesses.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large Colorado Area II 
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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, 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) This action reduces the current assessment rate 
for Colorado Area II potatoes; (2) the 1998-99 fiscal period begins on 
September 1, 1998, and the marketing order requires that the rate of 
assessment for each fiscal period apply to all assessable Colorado Area 
II potatoes handled during such fiscal period; (3) handlers are aware 
of this action which was recommended by the Committee at a public 
meeting and is similar to other assessment rate actions issued in past 
years; and (4) this interim final 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

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

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


Sec. 948.216  [Amended]

    Section 948.216 is amended by removing the words ``September 1, 
1996,'' and adding in their place the words ``September 1, 1998,'' and 
by removing ``$0.0030'' and adding in its place ``$0.0015.''

    Dated: July 10, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-18998 Filed 7-15-98; 8:45 am]
BILLING CODE 3410-02-P