[Federal Register: August 25, 2006 (Volume 71, Number 165)]
[Rules and Regulations]
[Page 50328-50331]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25au06-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1207
[Doc. No. FV-05-702 FR]
Amendments to the Potato Research and Promotion Plan
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, with correcting changes, an interim final rule to increase the
assessment rate on handlers and importers of potatoes from 2 cents to
2.5 cents per hundredweight. The increase is authorized under the
Potato Research and Promotion Plan (Plan). The Plan is authorized by
the Potato Research and Promotion Act (Act). In order to sustain the
three major programs currently conducted by the National Potato
Promotion Board (Board), International Marketing, Domestic Marketing
(which includes retail marketing), and a nutrition campaign at their
present levels beyond June 2006, additional revenue is required.
DATES: This rule is effective September 25, 2006.
FOR FURTHER INFORMATION CONTACT: Jeanette Palmer, Research and
Promotion Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., Stop 0244, Washington, DC 20250-0244;
telephone (202) 720-5976 or fax (202) 205-2800.
SUPPLEMENTARY INFORMATION: This rule is issued under the Potato
Research and Promotion Plan (Plan) [7 CFR Part 1207], as amended. This
rule will increase the assessment rate by \1/2\ cent for handlers and
importers. The Plan is authorized by the Potato Research and Promotion
Act (Act) [7 U.S.C. 2611-2627].
Executive Order 12988
This rule has been reviewed under the Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This rule will not preempt any state or local laws, regulations, or
policies unless they present an irreconcilable conflict with
[[Page 50329]]
this rule. The Act provides that administrative proceedings must be
exhausted before parties may file suit in court.
Under the Act, a person subject to the plan may file a petition
with the Secretary of Agriculture (Secretary) stating that such plan,
any provision of such plan, or any obligation imposed in connection
with such plan is not in accordance with law; and requesting a
modification of the plan or an exemption from the plan. Such person is
afforded the opportunity for a hearing on the petition. After the
hearing, the Secretary will rule on the petition. The Act provides that
the district court of the United States in any district in which such
person is an inhabitant, or has principal place of business, has
jurisdiction to review the Secretary's ruling on the petition, provided
that a complaint is filed within 20 days after the date of entry of the
ruling.
Executive Order 12866
The Office of Management and Budget (OMB) has waived the review
process required by Executive Order 12866 for this action.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C.
601 et seq.], the Agricultural Marketing Service has considered the
economic impact of this action on small entities and has certified that
this rule will not have a significant economic impact on a substantial
number of small entities. The purpose of the RFA is to fit regulatory
actions to scale of businesses subject to such action so that small
businesses will not be disproportionately burdened.
There are approximately 1,353 handlers, 5,223 producers, and 300
importers of potatoes and potato products who are subject to the
provisions of the Plan. The Small Business Administration (SBA) defines
small agricultural businesses, which includes handlers and importers,
as those whose annual receipts are less than $6.5 million, and small
agricultural producers are defined as those having annual receipts of
no more than $750,000 annually. Most of the producers and handlers, and
some of the importers would be classified as small businesses under the
criteria established by the SBA 13 CFR 121.201].
Currently, potato handlers and importers pay a mandatory assessment
of 2 cents per hundredweight. Assessments under the program are used to
fund promotional campaigns and to conduct research in the areas of U.S.
marketing, and international marketing and to enable the Board to
exercise its duties in accordance with the Plan. The 2 cents assessment
generates about $8.5 million in annual revenues. The current assessment
became effective when the Plan was amended in May 1984, to increase the
maximum assessment rate from 1 cent per hundredweight to 0.5 percent of
the previous 10-year average price received by growers. The Plan is
administered by the National Potato Promotion Board (Board) under USDA
supervision.
In order to sustain the three major programs currently conducted by
the Board, International Marketing, Domestic Marketing (which includes
retail marketing), and a nutrition campaign at their present levels
beyond June 2006, additional revenue is required. The Board approved
this increase in the assessment rate at its March 19, 2005, annual
meeting. This increase is consistent with section 1207.342(a) of the
Plan, which provides such assessments shall be levied at a rate fixed
by the Secretary which shall not exceed one-half of one per centum of
the immediate past ten calendar years United States average price
received for potatoes by growers as reported by the Department of
Agriculture. Further, not more than one such assessment may be
collected on any potatoes.
The \1/2\ cent assessment rate increase will bring in an estimated
$1.5 to $2 million in new revenue, depending upon production levels.
For 2005, domestic production was 420,879,000 hundredweight and imports
represented 59,683,000 hundredweight. The new rate would allow the
Board to maintain its investment in the nutrition campaign and
marketing programs. It is estimated that the Board would collect
approximately $10 million in assessments with a 2.5 cent per
hundredweight assessment rate. Any additional costs should be offset by
the benefits to be derived from the research and promotion programs.
The Board has determined that the \1/2\ cent increase in assessments
would cost potato growers less than one-half of one percent (0.005%) of
total production costs or approximately $1.75 per acre based on average
yields.
Alternatives were also considered by the Board, which included
cutting back funding of marketing programs and the nutrition campaign,
or eliminating the nutrition campaign altogether. All of the
alternatives were rejected by the Board because it was determined that
continued funding of the marketing programs and the nutrition campaign
were necessary to increase the demand for potatoes.
There are no relevant Federal rules that duplicate, overlap, or
conflict with this rule.
In accordance with the OMB regulation [5 CFR Part 1320] which
implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35],
the information collection and recordkeeping requirements that are
imposed by the Plan have been previously approved under OMB control
number 0581-0093. This rule does not result in a change to the
information collection and recordkeeping requirements.
Background
The Plan became effective on March 9, 1972, after a national
referendum among producers. Under the Plan, handlers and importers are
assessed 2 cents per hundredweight. No assessment shall be levied on
potatoes grown in the 50 States of the United States by producers of
less than 5 acres of potatoes. Importers pay assessments on all
tablestock potatoes imported for ultimate human consumption and on all
imported seed potatoes. The program currently generates about $8.5
million in annual revenues, which is administered by the Board under
USDA supervision. The Board administers a national program of research
development, advertising, and promotion designed to strengthen
potatoes' competitive position and to maintain and expand domestic and
foreign markets for potatoes and potato products.
In order to sustain the three major programs being conducted by the
Board, International Marketing, Domestic Marketing (which includes
retail marketing), and a nutrition campaign at their present levels
beyond June 2006, additional revenue to the Board is required. The \1/
2\ cent assessment rate increase will bring in an estimated $1.5 to $2
million in new revenue, depending upon production levels. For 2005,
domestic production was 420,879,000 hundredweight and imports
represented 59,683,000 hundredweight. The new rate would allow the
Board to maintain its investment in the nutrition campaign and
marketing programs. It is estimated that the Board would collect
approximately $10 million in assessments with a 2.5 cents per
hundredweight assessment rate. Any additional cost should be offset by
the benefits to be derived from research and promotion programs.
The Board, whose members represent all potato producing states as
well as
[[Page 50330]]
importers, voted to increase the assessment rate at its March 19, 2005,
annual meeting. Eighty-eight percent of the Board voted to increase the
assessment rate. The majority of those that opposed the increase in
assessment rate had a number of reasons, including a view that a State
program is preferable over a national program and concern about the
impact on growers.
This action will amend the rules and regulations issued under the
Plan. The rate increase from 2 cents to 2.5 cents per hundredweight is
within the formula allowed by section 1207.342 (a) of the Plan, which
states the funds to cover the Board's expenses shall be acquired by the
levying of assessments upon handler and importers as designated in
regulations recommended by the Board and issued by the Secretary. Such
assessments shall be levied at a rate fixed by the Secretary which
shall not exceed one-half of one per centum of the immediate past ten
calendar years United States average price received for potatoes by
growers as reported by the Department of Agriculture. Further, not more
than one such assessment may be collected on any potatoes. The average
price was determined to be $5.88 using the years 1994-2003 and one-half
of one per centum is 2.94 cents.
An interim final rule concerning this action was published in the
Federal Register on March 8, 2006. Copies of the rule were made
available through the Internet by USDA and the Office of the Federal
Register. That rule provided a 60-day comment period which ended May 8,
2006. Eight comments were received.
Six favorable comments were received. The commenters' support the
rule for an assessment increase to sustain the Board's three major
program areas--International Marketing, Domestic Marketing (which
includes retail marketing), and a nutrition campaign. The commenters'
supported the implementation of the interim final rule as it was
presented.
One unfavorable comment was received. The commenter recommends a
reduction in spending and not to increase the assessment rate. The
commenter indicated opposition to any increase in bureaucratic costs;
however, the Board is industry-funded and no taxpayers' dollars are
expended on this program.
Finally, one comment received did not address the assessment issue.
After consideration of all relevant material presented including
comments, the Board's recommendation, and other information, the
interim final rule, as published in the Federal Register (71 FR 11294)
on March 8, 2006, is adopted as a final rule, with changes. In this
final rule, two corrections are made to the harmonized tariff schedule
codes in Sec. 1207.510(b)(3) of the table and the authority citation
also is corrected.
List of Subjects in 7 CFR Part 1207
Administrative practice and procedure, Advertising, Consumer
information, Marketing agreements, Potatoes, Promotion, Reporting and
recordkeeping requirements.
0
For the reasons set forth in the preamble, 7 CFR part 1207 is amended
as follows:
0
1. The authority citation for part 1207 continues to read as follows:
Authority: 7 U.S.C. 2611-2627 and 7 U.S.C. 7401.
PART 1207--POTATO RESEARCH AND PROMOTION PLAN
0
2. In Sec. 1207.510, paragraphs (a)(1), (b)(1) and the table
immediately following paragraph (b)(3) are revised to read as follows:
Sec. 1207.510 Levy of assessments.
(a) * * *
(1) An assessment rate of 2.5 cents per hundredweight shall be
levied on all potatoes produced within the 50 States of the United
States.
* * * * *
(b) * * *
(1) An assessment rate of 2.5 cents per hundredweight shall be
levied on all tablestock potatoes imported into the United States for
ultimate consumption by humans and all seed potatoes imported into the
United States. An assessment rate of 2.5 cents per hundredweight shall
be levied on the fresh weight equivalents of imported frozen or
processed potatoes for ultimate consumption by humans. The importer of
imported tablestock potatoes, potato products, or seed potatoes shall
pay the assessment to the Board through the U.S. Customs Service and
Border Protection at the time of entry or withdrawal for consumption of
such potatoes and potato products into the United States.
* * * * *
(3) * * *
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Assessment
Tablestock potatoes, frozen or processed -------------------------
potatoes, and seed potatoes cents/cwt cents/kg
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0701.10.0020.................................. 2.50 0.0551
0701.10.0040.................................. 2.50 0.0551
0701.90.1000.................................. 2.50 0.0551
0701.90.5010.................................. 2.50 0.0551
0701.90.5020.................................. 2.50 0.0551
0701.90.5030.................................. 2.50 0.0551
0701.90.5040.................................. 2.50 0.0551
0710.10.0000.................................. 5.00 0.1103
2004.10.4000.................................. 5.00 0.1103
2004.10.8020.................................. 5.00 0.1103
2004.10.8040.................................. 5.00 0.1103
2005.20.0070.................................. 3.93 0.0866
0712.90.3000.................................. 17.86 0.3936
1105.10.0000.................................. 17.86 0.3936
1105.20.0000.................................. 17.86 0.3936
2005.20.0040.................................. 17.86 0.3936
2005.20.0020.................................. 10.20 0.2250
1108.13.0010.................................. 22.50 0.4961
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[[Page 50331]]
* * * * *
Dated: August 21, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-14108 Filed 8-24-06; 8:45 am]
BILLING CODE 3410-02-P