[Federal Register Volume 66, Number 199 (Monday, October 15, 2001)]
[Rules and Regulations]
[Pages 52309-52312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25781]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 948
[Docket No. FV01-948-3 FR]
Irish Potatoes Grown in Colorado; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule increases the assessment rate established for the
Colorado Potato Administrative Committee, Area II (Committee), for the
2001-02 and subsequent fiscal periods from $0.0015 to $0.0035 per
hundredweight of potatoes handled. The Committee locally administers
the marketing order, which regulates the handling of 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 fiscal period began September 1 and ends August 31. The
assessment rate will remain in effect indefinitely unless modified,
suspended, or terminated.
EFFECTIVE DATE: October 16, 2001.
FOR FURTHER INFORMATION CONTACT: Dennis L. West, Northwest Marketing
Field Office, Marketing Order
[[Page 52310]]
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220
SW. Third Avenue, suite 385, Portland, Oregon 97204-2807; telephone:
(503) 326-2724, Fax: (503) 326-7440; or George Kelhart, Technical
Advisor, 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) 720-8938.
Small businesses may request information on complying 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)
720-8938, or E-mail: [email protected].
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 (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 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 for the
2001-02 fiscal period, which began on September 1, 2001, and will
continue in effect until amended, 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.
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 increases the assessment rate established for the
Committee for the 2001-02 and subsequent fiscal periods from $0.0015 to
$0.0035 per hundredweight of potatoes handled.
The Colorado potato order provides authority for the Committee,
with the approval of the Secretary, 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.
For the 1998-99 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 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 17, 2001, and unanimously recommended
2001-02 expenditures of $73,618 and an assessment rate of $0.0035 per
hundredweight of potatoes handled. In comparison, last year's budgeted
expenditures were $71,132. The assessment rate of $0.0035 is $0.002
higher than the rate in effect prior to this final rule. For budget
purposes, the committee projected the quantity of assessable potatoes
for 2001-02 at 16,500,000 hundredweight and assessment revenue of
$57,750 ($0.0035 x 16,500,000 hundredweight). The Committee
recommended the increased assessment rate because the prior rate of
$0.0015 would not have generated enough income to adequately administer
the program through the 2001-02 fiscal period.
The major expenditures recommended by the Committee for the 2001-02
year include $40,793 for salaries, $9,950 for office expenses, which
include telephone service, supplies and postage, $7,650 for building
maintenance, and $15,225 for miscellaneous expenses. Budgeted expenses
for these items in 2000-01 were $39,793, $10,700, $6,250, and $14,389,
respectively.
The Committee developed the $0.0035 assessment rate recommendation
by taking into consideration the 2001-02 budget, the estimated 2001-02
potato crop, the relatively small size of the monetary reserve
($32,000), and other factors such as the recent attrition in the number
of farms and handlers. Although the increase more than doubles the
assessment rate, the Committee may need to draw up to an additional
$15,868 from its reserves to meet budgeted expenses. The reserve of
approximately $32,000 is below the maximum amount authorized by the
order of approximately two fiscal periods' expenses (Sec. 948.78).
As mentioned earlier, based on projected shipments of 16,500,000
hundredweight, the recommended assessment rate of $0.0035 should
provide $57,750 in assessment income. Income from such handler
assessments, combined with interest income and funds from the
Committee's authorized reserve, will be adequate to meet budgeted
expenses for the 2001-02 fiscal period.
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 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 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
2001-02 budget and those for subsequent fiscal periods would be
reviewed and, as appropriate, approved by the Department.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this rule on small entities. Accordingly,
[[Page 52311]]
AMS has prepared this final 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 250 producers of Colorado Area II potatoes
and approximately 93 handlers subject to regulation under the order.
Small agricultural producers are defined by the Small Business
Administration (13 CFR 121.201) as those having annual receipts of less
than $750,000, and small agricultural service firms are defined as
those whose annual receipts are less than $5,000,000.
When the proposed rule was published, the SBA standard for
determining small agricultural producers was $500,000. That standard
has been changed to $750,000.
Information for the most recent season in which statistics are
available, as reported by the National Agricultural Statistics Service,
was considered in determining the number of large and small producers
by acreage, production, and producer prices. According to the
information provided, the average yield per acre was 335 hundredweight,
the average farm size was 306 acres, and the season average producer
price was $4.20 per hundredweight. This equates to average gross annual
producer receipts of approximately $430,542. Furthermore, based upon
information provided by the Committee, 96 percent of the handlers of
Area II potatoes have shipped under $5,000,000 worth of potatoes during
the most recent season for which numbers are available. Based on the
foregoing, it can be concluded that a majority of producers and
handlers of Area II potatoes may be classified as small entities,
excluding receipts from other sources.
This rule increases the assessment rate established for the
Committee and collected from handlers for the 2001-02 and subsequent
fiscal periods from $0.0015 to $0.0035 per hundredweight of potatoes
handled. The Committee unanimously recommended 2001-02 expenditures of
$73,618 and an assessment rate of $0.0035 per hundredweight. The
assessment rate of $0.0035 is $0.002 higher than the rate in effect
prior to this rule and increases the financial burden on handlers by
approximately $33,000. The quantity of assessable fresh potatoes for
the 2001-02 season is estimated at 16,500,000 hundredweight. Thus, the
$0.0035 rate should provide $57,750 in assessment income which, when
combined with interest income and income from the Committee's monetary
reserve, should be adequate to cover budgeted expenses. The rate in
effect prior to this rule would not have provided enough funds to cover
anticipated expenses.
The major expenditures recommended by the Committee for the 2001-02
year include $40,793 for salaries, $9,950 for office expenses, which
include telephone service, supplies and postage, $7,650 for building
maintenance, and $15,225 for miscellaneous expenses. Budgeted expenses
for these items in 2000-01 were $39,793, $10,700, $6,250, and $14,389
respectively.
The Committee recommended the increased assessment rate to help
offset higher administration costs and to decrease the rate in which
the monetary reserve has been relied upon in recent fiscal periods.
Based on the Committee's 2001-02 crop estimate, the reserve of $32,000
could be reduced by as much as $15,868 with the recommended assessment
rate.
The Committee reviewed and unanimously recommended 2001-02
expenditures of $73,618. This compares to last year's approved budget
of $71,132. Prior to arriving at a budget, alternative expenditures and
assessment levels were discussed by the Committee, including higher and
lower rates of assessment. When considering the relatively poor
economic returns the industry has faced during the past six seasons and
the resultant instability within the potato industry, as well as the
2001-02 budget and the size of the monetary reserve ($32,000), the
Committee concluded that an increase in the rate of assessment to
$0.0035 per hundredweight of potatoes allows it to properly administer
the program.
A review of historical information, as well as preliminary
information pertaining to the upcoming fiscal period, indicates that
the producer price for the 2001-02 season could range between $2.06 and
$7.35 per hundredweight of potatoes. Therefore, the estimated
assessment revenue for the 2001-02 fiscal period as a percentage of
total producer revenue could range between 0.170 and 0.048 percent.
This action increases the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the 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 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 17,
2001, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue.
This rule imposes no additional reporting or recordkeeping
requirements on either small or large 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.
A proposed rule concerning this action was published in the Federal
Register on August 2, 2001 (66 FR 40153). A copy of the proposed rule
was mailed to the Committee office, which in turn notified Committee
members and industry members. The proposal was also made available
through the Internet by the Office of the Federal Register, and the
Department. A 30-day comment period ending September 4, 2001, 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/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 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 also found and determined 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
2001-02 fiscal period began on September 1, 2001, and the order
requires that the rate of assessment for each fiscal period apply to
all assessable potatoes handled during such fiscal period; (2) the
Committee needs to have sufficient funds to pay its expenses
[[Page 52312]]
which are incurred on a continuous basis; and (3) handlers are aware of
this action which was unanimously recommended by the Committee at a
public meeting. Also, a 30-day comment period was provided for in the
proposed rule, and no comments were received.
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.
2. Section 948.216 is revised to read as follows:
Sec. 948.216 Assessment rate.
On and after September 1, 2001, an assessment rate of $0.0035 per
hundredweight is established for Colorado Area II potatoes.
Dated: October 5, 2001.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 01-25781 Filed 10-12-01; 8:45 am]
BILLING CODE 3410-02-P