Irish Potatoes Grown in Washington; Amended Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. FV97-946-1 IFR]

Irish Potatoes Grown in Washington; Amended 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 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.

[[Page 18022]]

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 May 14, 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 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 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, 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 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 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.

[[Page 18023]]

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 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 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.

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 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.

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) The Committee needs to have sufficient funds to

pay its expenses which are incurred on a continuous basis; (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) 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 946

Marketing agreements, Potatoes, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 946 is

amended as follows:

PART 946--IRISH POTATOES GROWN IN WASHINGTON

1. The authority citation for 7 CFR part 946 continues to read as

follows:

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

Sec. 946.248 [Amended]

2. Section 946.248 is amended by removing ``July 1, 1996,'' and

adding in its place ``July 1, 1997,'' and by removing ``$0.003'' and

adding in its place ``$0.002.''

Dated: April 7, 1997.

Sharon Bomer Lauritsen,

Acting Director, Fruit and Vegetable Division.

[FR Doc. 97-9477 Filed 4-11-97; 8:45 am]

BILLING CODE 3410-02-P