Irish Potatoes Grown in Washington: Amended Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. FV97-946-1 FIR]

Irish Potatoes Grown in Washington: Amended Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a

final rule, without change, the provisions of an interim final rule

which decreased the assessment rate established for the State of

Washington Potato Committee (Committee) under Marketing Order No. 946

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 Washington.

Authorization to assess potato handlers enables the Committee to incur

expenses that are reasonable and necessary to administer the program.

EFFECTIVE DATE: July 1, 1997.

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-

2491, FAX 202-720-5698, or Dennis L. West, 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. 113 and Order No. 946, both as amended (7 CFR part 946)

regulating the handling of Irish potatoes grown in Washington,

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 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, Washington

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

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 1997-98 and subsequent fiscal periods from $0.003 to

$0.002 per hundredweight.

The Washington 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

Washington 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 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 February 7, 1997, and unanimously recommended

1997-98 expenditures of $44,400 and an assessment rate of $0.002 per

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

expenditures were $42,500. The assessment rate of $0.002 is $0.001 less

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

the amount authorized in the order of two fiscal periods' 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 $18,800 for an agreement with the Washington

State Potato Commission to provide miscellaneous services to the

Committee and $6,000 for compliance audits. Budgeted expenses for these

items in 1996-97 were $17,400 and $6,000, respectively.

The assessment rate recommended by the Committee was derived by

dividing anticipated expenses by expected shipments of Washington

potatoes. Potato shipments for the year are estimated at 10,000,000

hundredweight, which should provide $20,000 in

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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.

An interim final rule regarding this action was published in the

April 14, 1997, issue of the Federal Register (62 FR 18021). That rule

provided a 30-day comment period. No comments were received.

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 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 450 producers of Washington 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 Washington potato producers and handlers

may be classified as small entities.

This rule decreases the assessment rate established for the

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

fiscal periods from $0.003 to $0.002 per hundredweight. The Committee

unanimously recommended 1997-98 expenditures of $44,400 and an

assessment rate of $0.002 per hundredweight of potatoes. The assessment

rate of $0.002 is $0.001 less than the rate currently in effect. As the

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

fiscal periods' 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 $18,800 for

an agreement with the Washington State Potato Commission to provide

miscellaneous services to the Committee and $6,000 for compliance

audits. The Committee also discussed alternative assessment rate

levels. An assessment rate of $0.01 was considered but not recommended

because it would not generate the income necessary to administer the

program and allow the Committee to maintain an adequate reserve. The

Committee also discussed keeping the assessment rate at the current

$0.003 level. 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 Committee determined that a reduced assessment rate of

$0.002 will require it 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 10,000,000

hundredweight, which should provide $20,000 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 $5.00 and $8.00 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 .025 and .04 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 Washington 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 February 7, 1997, meeting was a public meeting

and all entities, both large and small, were able to express views on

this issue.

This action will not impose any additional reporting or

recordkeeping requirements on either small or large Washington 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.

In the interim final rule published in the Federal Register (62 FR

18021) on April 14, 1997, interested persons were invited to submit

information on the regulatory and informational impacts of this action

on small businesses. A copy of the interim final rule was also made

available on the Internet by the U.S. Government Printing Office. The

comment period ended May 14, 1997, and no comments were received

concerning the impacts of this action on small businesses.

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 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; (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

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) an interim final rule was published on this

action and provided for a 30-day comment period; no comments were

received.

List of Subjects in 7 CFR Part 946

Marketing agreements, Potatoes, Reporting and recordkeeping

requirements.

PART 946--IRISH POTATOES GROWN IN WASHINGTON

Accordingly, the interim final rule amending 7 CFR part 946 which

was published at 62 FR 18021 on April 14, 1997, is adopted as a final

rule without change.

Dated: June 30, 1997.

Eric M. Forman,

Acting Director Fruit and Vegetable Division.

[FR Doc. 97-17608 Filed 7-3-97; 8:45 am]

BILLING CODE 3410-02-P