Irish Potatoes Grown in Modoc and Siskiyou Counties, California, and in all Counties in Oregon, Except Malheur County; Define Fiscal Period and Decrease Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 947

[Docket No. FV97-947-1 IFR]

Irish Potatoes Grown in Modoc and Siskiyou Counties, California,

and in all Counties in Oregon, Except Malheur County; Define Fiscal

Period and Decrease Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule establishes, in the regulatory text,

the fiscal period of the Oregon-California Potato Committee (Committee)

to begin July 1 of each year and end June 30 of the following year, and

decreases the assessment rate established under Marketing Order No. 947

for the 1997-98 and subsequent fiscal periods. The Committee is

responsible for local administration of the marketing order which

regulates the handling of Irish potatoes grown in Modoc and Siskiyou

Counties, California, and in all counties in Oregon, except Malheur

County. Authorization to assess potato handlers enables the Committee

to incur expenses that are reasonable and necessary to administer the

program.

DATES: Effective on July 1, 1997. Comments received by June 18, 1997,

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 in triplicate to the Docket

Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room

2525-S, Washington, DC 20090-6456, FAX 202-720-5698. 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: Martha Sue Clark, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2525-S, Washington, DC 20090-6456; telephone 202-720-

9918; FAX 202-720-5698, or Teresa L. Hutchinson, Northwest Marketing

Field Office, Fruit and Vegetable Division, AMS, USDA, Green-Wyatt

Federal Building, room 369, 1220 Southwest Third Avenue, Portland, OR

97204; telephone 503-326-2724; FAX 503-326-7440. Small businesses may

request information on compliance with this regulation by contacting

Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; telephone 202-720-2491; FAX 202-720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 114 and Order No. 947, both as amended (7 CFR part 947)

regulating the handling of Irish potatoes grown in Oregon-California,

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, Oregon-

California 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 July 1, 1997, and continuing 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

there from. 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 establishes, in regulatory text, the fiscal period of the

Committee to begin July 1 of each year and end June 30 of the following

year, and decreases the assessment rate established for the Committee

for the 1997-98 and subsequent fiscal periods from $0.005 to $0.004 per

hundredweight.

The Oregon-California potato marketing order provides authority for

the Committee, with the approval of the Department, to establish a

fiscal period. The Committee has operated under a fiscal period of July

1 through June 30 for many years. This rule adds to the order's rules

and regulations a definition of the fiscal period of the Committee to

be the 12 month period beginning July 1 and ending June 30 of the

following year, both dates inclusive.

The Oregon-California potato marketing order also 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 Oregon-California 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 1996-97 and subsequent fiscal periods, the Committee

recommended, and the Department approved, an assessment rate that would

continue in

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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 March 5, 1997, and unanimously recommended

1997-98 expenditures of $53,600 and an assessment rate of $0.004 per

hundredweight of potatoes. In comparison, last year's budgeted

expenditures were $61,200. The assessment rate of $0.004 is $0.001 less

than the rate currently in effect. As the Committee's reserve exceeds

the amount authorized in the order of one fiscal period's operational

expenses, the Committee voted to lower its assessment rate and use more

of the reserve to cover its expenses. The Committee discussed

alternatives to this rule, including alternative expenditure levels,

but recommended that the major expenditures for the 1997-98 fiscal

period should include $30,000 for an agreement with the Oregon Potato

Commission to provide miscellaneous services to the Committee, $4,000

for Committee meeting expenses, $3,000 for staff travel, and $3,000 for

investigation and compliance. Budgeted expenses for these items in

1996-97 were $30,000, $4,200, $3,000, and $3,000, respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of Oregon-

California potatoes. Potato shipments for the year are estimated at

8,500,000 hundredweight, which should provide $34,000 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 will be kept within the maximum

permitted by the order.

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 550 producers of Oregon-California potatoes

in the production area and approximately 40 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 Oregon-California potato producers and

handlers may be classified as small entities.

This rule establishes, in the regulatory text, the fiscal period of

the Committee to begin July 1 of each year and end June 30 of the

following year, and decreases the assessment rate established for the

Committee and collected from handlers for the 1997-98 and subsequent

fiscal periods from $0.005 to $0.004 per hundredweight. The Committee

unanimously recommended 1997-98 expenditures of $53,600 and an

assessment rate of $0.004 per hundredweight of potatoes. The assessment

rate of $0.004 is $0.001 less than the rate currently in effect. As the

Committee's reserve exceeds the amount authorized in the order of one

fiscal period's operational expenses, the Committee voted to lower its

assessment rate and use more of the reserve to cover its expenses.

The Committee discussed alternatives to this rule, including

alternative expenditure levels, but recommended that the major

expenditures for the 1997-98 fiscal period should include $30,000 for

an agreement with the Oregon Potato Commission to provide miscellaneous

services to the Committee, $4,000 for Committee meeting expenses,

$3,000 for staff travel, and $3,000 for investigation and compliance.

The Committee also discussed the alternative of not decreasing the

assessment rate. However, it decided against this course of action

because continuation of the higher rate would not allow it to bring its

operating reserve in line with the maximum amount authorized under the

order. The reduced assessment rate will require the Committee to use

more of its reserve for authorized expenses, and help bring the reserve

within authorized levels.

Potato shipments for the year are estimated at 8,500,000

hundredweight, which should provide $34,000 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 will be kept within the maximum

permitted by the order.

Recent price information indicates that the grower price for the

1997-98 marketing season will range between $4.00 and $7.00 per

hundredweight of potatoes. Therefore, the estimated assessment revenue

for the 1997-98 fiscal period as a percentage of total grower revenue

will range between .100 and .057 percent.

This action will reduce the assessment obligation imposed on

handlers. While this rule will impose some additional costs on

handlers, the costs are minimal and in the form of uniform assessments

on all handlers. Some of the additional costs may be passed on to

producers. However, these costs will be offset by the benefits derived

by the operation of the marketing order. In addition, the Committee's

meeting was widely publicized throughout the Oregon-California 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 March 5, 1997, 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 Oregon-California

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, because: (1) This action reduces the current assessment rate;

(2) the 1997-98 fiscal period begins on July 1, 1997, and the marketing

order requires that the rate of assessment for each fiscal period apply

to all assessable

[[Page 27171]]

potatoes handled during such 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 final rule provides a 30-day

comment period, and all comments timely received will be considered

prior to finalization of this rule.

List of Subjects in 7 CFR Part 947

Marketing agreements, Potatoes, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 947 is

amended as follows:

PART 947--IRISH POTATOES GROWN IN MODOC AND SISKIYOU COUNTIES,

CALIFORNIA, AND IN ALL COUNTIES IN OREGON, EXCEPT MALHEUR COUNTY

1. The authority citation for 7 CFR part 947 continues to read as

follows:

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

2. A new Sec. 947.114 is added to Subpart--Rules and Regulations to

read as follows:

Sec. 947.114 Fiscal period.

The fiscal period shall begin July 1 of each year and end June 30

of the following year, both dates inclusive.

Sec. 947.247 [Amended]

3. Section 947.247 is amended by removing the words ``July 1,

1996,'' and adding in its place the words ``July 1, 1997,'' and by

removing ``$0.005'' and adding in its place ``$0.004.''

Dated: May 12, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97-12999 Filed 5-16-97; 8:45 am]

BILLING CODE 3410-02-P