[Federal Register: February 6, 2002 (Volume 67, Number 25)]
[Rules and Regulations]
[Page 5440-5442]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06fe02-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 948
[Docket No. FV01-948-2 FIR]
Irish Potatoes Grown in Colorado; Suspension of Continuing
Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, without
change, an interim final rule which continues to suspend the assessment
rate established for the Colorado Potato Administrative Committee, Area
III (Committee) for the 2001-02 and subsequent fiscal periods. The
Committee, which locally administers the marketing order regulating the
handling of potatoes grown in Northern Colorado, made this
recommendation for the purpose of lowering the monetary reserve to a
level consistent with program requirements. The fiscal period began
July 1, 2001, and ends June 30, 2002. The assessment rate will remain
suspended until an appropriate rate is reinstated.
EFFECTIVE DATE: March 8, 2002.
FOR FURTHER INFORMATION CONTACT: Dennis L. West, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, room 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, 1400
Independence Avenue SW, STOP 0237, Washington, DC 20250-0237;
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, 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 Marketing
Agreement No. 97 and Marketing 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 USDA 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. For the 1999-00 fiscal period, an assessment
rate of $0.02 per hundredweight of potatoes handled was fixed by USDA
to continue in effect indefinitely unless modified, suspended, or
terminated. This action continues to suspend the assessment rate for
the 2001-02 fiscal period, which began on July 1, 2001, and will
continue in effect until reinstated. 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 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
[[Page 5441]]
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 continues to suspend Sec. 948.215 of the order's rules
and regulations. Section 948.215 established an assessment rate of
$0.02 per hundredweight of potatoes handled for 1999-00 and subsequent
fiscal periods. Continuous assessment rates remain in effect from
fiscal period to fiscal period unless modified, suspended, or
terminated by USDA. This rule continues to suspend the $0.02 assessment
rate for 2001-02, and will continue to suspend such assessment rate
during subsequent fiscal periods until reinstated by USDA upon
recommendation of the Committee.
Sections 948.75 through 948.77 of the Colorado potato order provide
authority for the Committee, with the approval of USDA, to formulate an
annual budget of expenses and to collect assessments from handlers to
administer the program. In addition, Sec. 948.78 of the order
authorizes the use of monetary reserve funds to cover program expenses.
The members of the Committee are producers and handlers of Colorado
Area III 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.
Recommendations concerning the budget and assessment rate are
formulated and discussed in a public meeting. Thus, all directly
affected persons have an opportunity to participate and provide input.
The Committee met on May 10, 2001, to discuss the proposed 2001-02
budget and assessment rate and to take appropriate action. However,
with only three out of nine voting members in attendance at the
meeting, the quorum necessary for the Committee to take action was not
present. To ensure that the Committee would have a recommendation for
the 2001-02 fiscal period budget, the Committee's manager subsequently
polled all Committee members by U.S. mail, as provided for in
Sec. 948.61 of the order. The resultant unanimous recommendation by all
nine members favored the establishment of a budget with expenditures of
$18,200 and an assessment rate of $0.005 (\1/2\ cent) per hundredweight
of potatoes handled during the 2001-02 fiscal period.
However, Sec. 948.78(a)(2) of the order specifies that the
Committee, with USDA's approval, may carry over excess funds into
subsequent fiscal periods as a reserve, provided that funds already in
the reserve are less than approximately two fiscal periods' expenses.
After reviewing the Committee's initial recommendation for a $0.005
rate of assessment, USDA requested that the Committee consider
suspension of the assessment rate until the reserve is lowered to a
level consistent with the order. Consequently, at its meeting of July
19, 2001, the Committee unanimously recommended suspension of the
continuing assessment rate of $0.02 for the 2001-02 and subsequent
fiscal periods. The Committee concluded that an assessment rate will
not be necessary for operation during the 2001-02 fiscal period as
funds in the reserve, combined with interest and rental income, are
adequate to meet expenses.
As of July 1, 2001, the Committee had $59,579 in its reserve fund.
With the 2001-02 budget set at $18,200, the current maximum reserve
permitted by the order is approximately $36,400 (approximately two
fiscal periods' expenses). To meet its 2001-02 expenses the Committee
plans on drawing approximately $14,700 from its reserve, and may
additionally earn approximately $3,500 from interest and other income.
Thus, with a suspended assessment rate, the Committee's reserve at the
end of the 2001-02 fiscal period could be reduced to approximately
$44,879. Projecting a similar level of expenses in 2002-03 and
continuation of the assessment rate suspension, the Committee's reserve
on July 1, 2003, could be about $30,179. This amount would be
consistent with the order's requirements.
The major expenditures recommended by the Committee for the 2001-02
fiscal period include $7,000 for salary, $6,300 for office expense
(which includes equipment, telephone, and utilities), and $3,000 for
rent. Minor expenses total $1,900. Budgeted expenses for these items in
the 2000-01 fiscal period were $4,250, $6,800, and $3,000,
respectively. Minor expenses totaled $3,600 that year.
The Committee foresees a need for the assessment rate suspension to
continue in effect for approximately two fiscal periods. The assessment
rate will remain suspended, however, until reinstated by USDA upon
recommendation and information submitted by the Committee or other
available information.
Since the suspension of the assessment rate will continue for such
subsequent fiscal periods as necessary to ensure that the monetary
reserve is lowered to a level consistent with the order, the Committee
will continue to meet prior to or during each fiscal period to
recommend a budget of expenses and consider recommendations for
reinstatement 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. The USDA will evaluate Committee recommendations and
other available information such as the level of the budget and the
monetary reserve to determine whether assessment rate reinstatement is
needed, and at what level. Further rulemaking will be undertaken as
necessary. The Committee's 2001-02 budget has been reviewed and
approved by USDA and budgets for subsequent fiscal periods will also be
reviewed and, as appropriate, approved by USDA.
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, 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 26 producers of Colorado Area III potatoes
in the production area and approximately 11 handlers subject to
regulation under the marketing 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.
Information for the most recent season in which statistics are
available, as reported by the National Agricultural Statistics Service,
was considered in
[[Page 5442]]
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 340 hundredweight, the average farm size
was 53 acres, and the season average producer price was $5.95 per
hundredweight. This equates to average gross receipts to producers of
approximately $107,200. Furthermore, based upon information provided by
the Committee, all handlers of Area III 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 III potatoes may be
classified as small entities.
This rule continues to suspend Sec. 948.215 of the order's rules
and regulations, which established an assessment rate of $0.02 per
hundredweight of potatoes handled beginning with the 1999-00 fiscal
period. This assessment rate suspension is effective for the 2001-02
fiscal period and subsequent fiscal periods until reinstated.
Without assessment income to offset its 2001-02 budget of $18,200,
the Committee plans on drawing approximately $14,700 from its reserve,
and may additionally earn approximately $3,500 from interest and other
income.
The major expenditures recommended by the Committee in the 2001-02
fiscal period budget include $7,000 for salary, $6,300 for office
expenses, and $3,000 for rent. Minor expenses total $1,900. In
comparison, the Committee's 2000-01 fiscal period budget of $17,650
included major expenses of $4,250, $6,800, and $3,000, respectively.
Minor expenses totaled $3,600.
The Committee recommended that assessment collection be suspended
until such time as the monetary reserve reaches a level consistent with
the order requirement of less than approximately two fiscal periods'
expenses. The Committee believes that by suspending the assessment rate
for at least the next two fiscal periods, the operating reserve should
be lowered to an amount consistent with the program. Based on Committee
projections, the current reserve of $59,579 will be reduced to about
$44,879 by the end of the 2001-02 fiscal period, and to about $30,179
by the end of the 2002-03 fiscal period.
Prior to recommending the suspension of the continuing assessment
rate, the Committee discussed alternatives, including its earlier
recommended assessment rate of $0.005 per hundredweight. However, the
Committee concurred with USD's position that a suspension of the
assessment rate is viable since it could rely on its reserve and other
income to meet budgeted expenses, and that such a suspension would
expedite the reduction of the reserve. Another alternative considered
by the Committee was to refund the portion of the reserve that is over
that permitted by the order directly to handlers of record. However,
because many of the handlers assessed in prior years are no longer in
business, the Committee concluded this would not be equitable.
This action will reduce handler costs by almost $9,000 (448,750
hundredweight of assessable potatoes x the current rate of assessment
of $0.02) during the 2001-02 fiscal period, as no assessment will be
collected. Suspension of the assessment rate reduces the burden on
handlers, and may reduce the burden on producers. In addition, the
Committee's meetings were widely publicized throughout the Colorado
Area III potato industry and all interested persons were invited to
attend the meetings and participate in Committee deliberations on all
issues. Like all Committee meetings, the May 10 and July 19, 2001,
meetings were open to the public and all entities, both large and
small, were able to express views on this issue. Finally, interested
persons were invited to submit information on the regulatory and
informational impacts of this action on small businesses.
This action imposes no additional reporting or recordkeeping
requirements on either small or large Colorado Area III 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 USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
An interim final rule regarding this action was published in the
Federal Register on September 25, 2001 (66 FR 48951). A copy of that
rule was sent to the Committee's manager, who in turn provided copies
to Committee members, handlers, and other interested persons. The
interim final rule was also made available through the Internet by the
Office of the Federal Register and USDA. A 60-day comment period was
provided for interested persons to respond to the interim final rule.
The comment period ended on November 26, 2001. 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 finalizing the interim
final rule, without change, as published in the Federal Register (66 FR
48951, September 25, 2001) will tend to effectuate the declared policy
of the Act.
List of Subjects in 7 CFR Part 948
Marketing agreements, Potatoes, Reporting and recordkeeping
requirements.
PART 948--IRISH POTATOES GROWN IN COLORADO
Accordingly, the interim final rule amending 7 CFR part 948 which
was published at 66 FR 48951 on September 25, 2001, is adopted as a
final rule without change.
Dated: January 31, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-2846 Filed 2-5-02; 8:45 am]
BILLING CODE 3410-02-P
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