Irish Potatoes Grown in Washington; Modification of Special Purpose Shipment Regulations, 25790-25794 [05-9696]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 70, Number 93 (Monday, May 16, 2005)]
[Proposed Rules]
[Pages 25790-25794]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-9696]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 70, No. 93 / Monday, May 16, 2005 / Proposed 
Rules

[[Page 25790]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. FV05-946-2 PR]


Irish Potatoes Grown in Washington; Modification of Special 
Purpose Shipment Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on modifications to the special 
purpose shipment regulations currently prescribed under the Washington 
potato marketing order. The marketing order regulates the handling of 
Irish potatoes grown in Washington, and is administered locally by the 
State of Washington Potato Committee (Committee). This rule would 
modify the reporting requirements, procedures, and safeguard provisions 
for making certain special purpose potato shipments. Under the 
marketing order, such special purpose shipments may be exempted from 
the quality, assessment, or inspection requirements. The changes 
include removal of the special purpose exemption for exported potatoes, 
clarify the reporting procedures for potatoes diverted to processing, 
and add safeguard provisions for shipments of seed potatoes and 
shipments to charitable organizations. These changes would help 
facilitate special purpose shipments, while enhancing the Committee's 
compliance program.

DATES: Comments must be received by June 15, 2005.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; e-mail: moab.docketclerk@usda.gov; or 
Internet: https://www.regulations.gov. All comments should reference the 
docket number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the Office 
of the Docket Clerk during regular business hours, or can be viewed at: 
https://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson, Marketing 
Specialist, Northwest Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW 
Third Avenue, Suite 385, Portland, Oregon 97204; 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 proposal is issued under Marketing 
Agreement No. 113 and Marketing 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 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 Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This proposal would 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 and 
request a modification of the order or to be exempted therefrom. A 
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 proposed rule invites comments on modifications to the special 
purpose shipment regulations currently prescribed under the order. This 
rule would modify the reporting requirements, procedures, and safeguard 
provisions for making certain special purpose potato shipments. Under 
the marketing order, such special purpose shipments may be exempt from 
the quality, assessment, or inspection requirements. The modifications 
were recommended unanimously by the Committee at a meeting on February 
3, 2005.
    Section 946.52 of the order authorizes the establishment of grade, 
size, quality, maturity, and pack regulations for any variety or 
varieties of potatoes grown in the production area. Section 946.51 
further authorizes the modification, suspension, or termination of 
regulations issued under Sec.  946.52. Section 946.60 provides that 
whenever potatoes are regulated pursuant to Sec.  946.52 such potatoes 
must be inspected by the Federal-State Inspection Service, and 
certified as meeting the applicable requirements of such regulations. 
Section 946.54 authorizes the modification, suspension, or termination 
of any or all regulations to facilitate shipments of potatoes for 
specified purposes. Section 946.55 authorizes safeguard requirements 
for shipments authorized pursuant to Sec.  946.54.
    Section 946.120 of the order's administrative rules specifies the 
application process required when potatoes are shipped for special 
purposes pursuant to Sec.  946.54. Section 946.336 of the order's 
administrative rules prescribes the quality, maturity,

[[Page 25791]]

cleanness, pack, special purpose shipments, safeguards, minimum 
quantity exemption, and inspection requirements for all fresh market 
Washington potatoes, except for blue or purple flesh varieties of 
potatoes. Section 946.336(d) lists the types of special purpose 
shipments and the minimum grade, size, cleanness, maturity, pack, 
assessment, and inspection requirements from which such shipments are 
exempted. Finally, Sec.  946.336(e) prescribes the safeguard 
requirements that handlers must meet to make the special purpose 
shipments specified under Sec.  946.336(d).
    At its meeting on June 17, 2004, the Committee appointed a 
subcommittee to review the order's handling regulations. The 
subcommittee subsequently met on November 22, 2004, and while reviewing 
the regulations, identified several potential changes to the special 
purpose shipment procedures, safeguard requirements, and reporting 
requirements. These proposed changes were further discussed and 
ratified at an Executive Committee meeting on January 20, 2005, and 
subsequently recommended to the full Committee at its February 3, 2005, 
meeting in Moses Lake, Washington.
    At this meeting, the Committee unanimously adopted the subcommittee 
recommendations which entailed modifications to Sec.  946.120 
Application, Sec.  946.336(d) Special Purpose Shipments, and Sec.  
946.336(e) Safeguards. To conform to the proposed regulatory 
modifications, as well as to ensure consistency in the administration 
of the special purpose procedures, the Committee also recommended that 
the ``Shippers Application for Special Purpose Certificate'' 
(Application) and ``Special Purpose Certificate Report'' (Report) forms 
be updated.
    The current procedures require that each handler apply annually to 
the Committee for a Special Purpose Shipment Certificate if planning to 
make special purpose shipments. In addition, based on the current 
provisions under each of the special purpose shipment requirements, 
each handler and receiver of special purpose potatoes may be required 
to submit a Report to the Committee for each such shipment.
    Under current procedures, for example, any handler desiring to 
divert potatoes for livestock feed must apply for a Special Purpose 
Shipment Certificate, but would not be required to follow up with a 
report to the committee indicating the actual quantity diverted. 
Similarly, a handler opting to take advantage of the provisions that 
allow uninspected bulk potatoes to leave the State of Washington for 
grading or storing in Morrow or Umatilla Counties in Oregon, must 
complete and submit the Committee's Application for a Special Purpose 
Shipment Certificate to the Committee. If these potatoes were later 
diverted to processing, a Report would be required from both the 
handler and the processor. If, however, the potatoes were inspected and 
shipped into the fresh market, a Report would not be required because 
the Committee is apprised of the shipment via the inspection 
certificate received from the Federal-State Inspection Service.
    Although it varies from one special purpose shipment to another, in 
most cases handlers of special purpose potatoes are the producers of 
the potatoes and most receivers are the processors.
    In recent years, about 85 percent of the Washington potato crop is 
produced for processing. Most of this amount is produced specifically 
for the frozen French fry market, with the processing taking place 
locally within the state. This has been a steadily increasing trend 
ever since the fast-food restaurant business began requiring an ever 
increasing portion of the potato crop. Because a majority of the 
Washington potato crop is diverted to a special purpose category, the 
Committee believes it needs to reduce the paperwork burden on handlers 
and receivers by obtaining the information it needs to ensure 
compliance with the order from alternative sources.
    The Committee contracts with the Washington State Potato Commission 
(Commission) for it administrative services. Each processor within the 
State of Washington provides reports to the Commission indicating the 
quantity of potatoes received and processed, per producer. By entering 
into an agreement with the Commission, the Committee could receive all 
of the information it needs on the processor generated report and would 
not require processors to complete and return the Committee's processor 
form. This would significantly reduce the paperwork burden on any 
person or entity currently required to submit reports on the volume of 
processing potatoes shipped, received, and processed.
    To achieve this, the Committee recommended changing the safeguard 
procedures for shipments of canning, freezing, or ``other processing'' 
potatoes so that handlers may provide shipment information in a format 
other than through the conventional Committee report form. Under this 
proposal, this would be accomplished by changing Sec.  
946.336(e)(3)(iii) from ``Upon request by the Committee, furnish 
reports of each shipment pursuant to the applicable Special Purpose 
Certificate'', to ``Upon request by the Committee, furnish reports, or 
cause reports to be furnished, of each shipment pursuant to the 
applicable Special Purpose Certificate''. The Committee believes that 
the proposed language change would streamline the reporting procedures 
while clarifying its ability to obtain the information it needs from 
alternative sources to verify compliance and proper disposition.
    The Committee also recommended changing Sec.  946.336(d)(vi) and 
Sec.  946.336(e)(iii), which detail the procedures and reporting 
requirements for potatoes shipped to locations other than the immediate 
area of production for grading or temporary storage prior to marketing. 
The current regulations require that handlers shipping potatoes for the 
purposes of grading or storing to Morrow or Umatilla Counties in 
Oregon, or to District No. 5 or to Spokane County in District No. 1 
(part of the regulated production area), submit an annual Application 
form and to subsequently report each shipment that is diverted to one 
of the other special purposes (or to cause an inspection certificate to 
be issued if shipped into the fresh market). Potatoes shipped under 
this provision are exempt from the quality and inspection requirements 
until such potatoes are subsequently sold in the fresh market or 
diverted for any special purpose shipment.
    Section 946.7 of the order authorizes, free of regulation, the 
transportation of ungraded potatoes within the production area for the 
purpose of having such potatoes prepared for market or stored. Since 
Sec.  946.7 already provides the necessary authority for transporting 
potatoes within the production area free from regulation, the Committee 
recommended that the reference to ``District No. 5'' and to ``Spokane 
County in District No. 1'' be removed from Sec. Sec.  946.336(d)(1)(vi) 
and 946.336(e)(2). Reference to these two districts was already absent 
from the language that refers to this special purpose in Sec.  946.120. 
The specific authority for shipping potatoes to Umatilla and Morrow 
Counties in Oregon is in Sec.  946.54.
    The Committee also reviewed the current special purpose procedures 
for handling potatoes for export. Currently, potatoes for export are 
exempt from the quality and inspection requirements of the order, 
except that potatoes packed in cartons must be U.S. No. 1 grade or 
better. Largely because most importing countries require a quality 
product, it has been common industry practice to

[[Page 25792]]

have potatoes for export inspected for quality. The Committee believes 
that all Washington potatoes entering the export market should meet the 
minimum quality, cleanness, maturity, pack, and inspection requirements 
of the order, and that the regulations conform with industry practice. 
Therefore, the Committee recommended that potatoes for export no longer 
be included as a special purpose shipment exemption.
    This change would require removal of Sec. Sec.  946.120(a)(2), 
946.336(d)(1)(vii), and 946.336(e)(5) from the order's rules and 
regulations. With export removed as a special purpose exemption, 
paragraphs (a)(3), (a)(4), and (a)(5) in Sec.  946.120 would be 
redesignated as paragraphs (a)(2), (a)(3), and (a)(4), respectively. 
Similarly, paragraphs (d)(1)(viii) and (e)(6) in Sec.  946.336 would be 
redesignated as Sec. Sec.  946.336(d)(1)(vii) and 946.336(e)(5), 
respectively. Finally, Sec.  946.336(d)(2) would be revised to reflect 
these modifications and to correct an existing typographical error.
    Sections 946.336(d)(1)(i) and 946.336(d)(2) of the handling 
regulations exempt potatoes shipped for livestock feed from the 
quality, assessment, and inspection requirements of the order. However, 
there are no corresponding reporting requirements or safeguard 
provisions specified under Sec. Sec.  946.120 or 946.336(e) for such 
shipments, although the Application form contains a check box for 
livestock feed. Because potatoes that are diverted to livestock feed 
are generally culls and thus unfit for any other market, the Committee 
believes such shipments should remain exempt from the quality, 
inspection, and assessment requirements of the order and that handlers 
should not be required to submit the Application or Report forms for 
such shipments.
    The Committee thus recommended adding a new paragraph (e)(6) to 
Sec.  946.336 (Safeguards) to clarify that handlers diverting potatoes 
to livestock feed would not be required to submit the Application and 
Report forms. This change would also have the potential of reducing the 
reporting burden on handlers and receivers of such potatoes.
    The Committee recommendation also includes proposed changes to the 
procedures used for tracking potatoes shipped for charity. Currently, 
potatoes shipped for charity are exempt from the quality, assessment, 
and inspection requirements. However, there are currently no safeguard 
or reporting requirements delineated in Sec.  946.336. The Committee 
believes it is important to have reporting requirements to safeguard 
such shipments, and thus recommended adding a new paragraph (e)(7) to 
Sec.  946.336 (Safeguards) to require that handlers shipping potatoes 
for charity submit both the Application and Report forms. Because the 
Committee believes that small gifts to charity should be encouraged, 
the proposed safeguard and reporting requirements would also specify 
that charitable contributions of 1,000 pounds or less would be exempt 
from the application and reporting requirements. This would make 
diverting potatoes a much less burdensome process for handlers. A 
conforming change noting the 1,000 pound provision would also be made 
to Sec.  946.120(a)(1).
    The proposed additions to the special purpose shipment procedures 
for charitable contributions would further specify that the handler of 
potatoes being diverted to charity would inform the recipient that the 
gift cannot be resold or otherwise placed into commercial market 
channels.
    The Committee also recommended modifications to the special purpose 
shipment exemption for seed potato shipments. Currently, Sec.  
946.336(d)(1)(iii) provides for an exemption from the quality, 
assessment, and inspection requirements of the order for potatoes 
handled for seed. Although there are not any safeguard provisions or 
reporting requirements outlined in either Sec.  946.120 or Sec.  
946.336, the current Application form contains a check box for handlers 
to mark when applying for a Special Purpose Shipment Certificate. 
However, after discussing the seed potato issue, the subcommittee's 
recommendation to the full Committee was to require a Report from 
handlers, but not to require an Application form. The actual 
recommendation would add a new paragraph (e)(8) to Sec.  946.336 
(Safeguards) stating that handlers shipping potatoes for seed must 
furnish, at the request of the Committee, a report from handlers on the 
total volume of seed potatoes handled.
    Seed potato handlers are almost always the producer of such 
potatoes, and generally only produce potatoes for seed. As such, the 
Committee does not want to require seed potato handlers to apply for a 
Special Purpose Certificate, but for statistical purposes, would like 
to have a procedure in place for the submission of periodic reports. 
Although potatoes produced for seed are traditionally segregated from 
potatoes produced for other markets by the very nature of the cultural 
practices used by farmers and by the various state and federal seed 
regulations in place, the Committee believes this proposed change would 
add necessary clarity to the special purpose regulations.
    The final change recommended by the Committee relates to Sec.  
946.336(g) Inspection. Language in this paragraph currently references 
a form which is no longer issued by the Federal-State Inspection 
Service. The form had at one time been issued by the inspection service 
for accompaniment with any bulk-load potato shipments not relieved by 
any of the special purpose or minimum quantity exemptions of the order. 
Since such potato shipments require inspection under the order's 
provisions and thus should be accompanied by a valid inspection 
certificate, the Committee recommended removing the sentence from Sec.  
946.336(g) that refers to the ``Shipping Clearance Report'' form.
    To ensure conformity with Sec.  946.336, Sec.  946.120 would be 
updated by removing reference to the special purpose use ``export'', 
and adding reference to the special purpose use ``canning, freezing, 
and other processing''. Furthermore, as previously noted, a proviso 
would be added to paragraph (1) of Sec.  946.120 stating that 
charitable shipments of 1,000 pounds or less would be exempt from the 
application process. Also, as noted earlier, minor conforming changes 
would be made to the Committee's Application and Report forms.

Initial 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 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 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 51 handlers of Washington potatoes who are 
subject to regulation under the marketing order and approximately 272 
potato producers in the regulated area. Small agricultural service 
firms are defined by the Small Business Administration (13 CFR 121.201) 
as those having annual receipts of less than $6,000,000, and small 
agricultural producers are defined as those having annual receipts of 
less than $750,000.
    During the 2003-2004 marketing year 10,652,495 hundredweight of

[[Page 25793]]

Washington potatoes were inspected under the order and sold into the 
fresh market. Based on an estimated average f.o.b. price of $7.45 per 
hundredweight, the Committee estimates that 48 handlers, or about 94 
percent, had annual receipts of less than $6,000,000.
    In addition, based on information provided by the National 
Agricultural Statistics Service, the average producer price for 
Washington potatoes for the 2003 marketing year (the most recent period 
that final statistics are available) was $5.25 per hundredweight. The 
average annual producer revenue for each of the 272 Washington potato 
producers is therefore calculated to be approximately $205,609. In view 
of the foregoing, the majority of the Washington potato producers and 
handlers may be classified as small entities.
    This rule would modify the reporting requirements, procedures, and 
safeguard provisions for making certain special purpose potato 
shipments as prescribed under Sec. Sec.  946.120, 946.336(d) and 
946.336(e) of the order. The Committee recommended several changes to 
the order's special purpose regulations, and conforming changes to the 
Application and Report forms. These changes would help facilitate the 
marketing of certain types of potato shipments, while also enhancing 
the Committee's compliance efforts. The authority for the special 
purpose shipments and safeguard requirements is provided in Sec. Sec.  
946.54 and 946.55, respectively, of the order.
    The Committee believes that these proposed changes would, at the 
most, minimally impact handlers and producers in terms of cost. While 
there are some changes that could require a few handlers of exported 
potatoes to undergo inspections when they may not have previously, most 
of the changes would actually lessen the regulatory and reporting 
burden on the industry while clarifying the special purpose shipment 
reporting and safeguard requirements.
    During its review of the handling regulations, the subcommittee 
discussed alternatives to these proposed changes, and felt that its 
recommended changes adequately met the Committee's originally stated 
goals of reviewing and, if necessary, fine tuning the special purpose 
regulations. The Committee reviewed the subcommittee's recommendation 
carefully and unanimously concurred that, to facilitate the handling of 
special purpose shipments and to enhance its compliance program 
specific to such shipments, the changes proposed herein would 
effectively improve its administration of the special purpose shipment 
exemptions.
    This proposed rule would modify the reporting requirements, 
procedures, and safeguard provisions for making certain special purpose 
potato shipments. Under the marketing order, such special purpose 
shipments may be exempt from the quality, assessment, or inspection 
requirements. Modifying these regulations would clarify and update the 
procedures handlers must follow to qualify for the special purpose 
exemptions. Minor conforming changes would subsequently be made to two 
of the Committee's forms, the ``Shippers Application for Special 
Purpose Certificate'', and the ``Special Purpose Shipment Report''. 
Accordingly, this action would not impose any additional reporting or 
recordkeeping requirements on either small or large potato handlers. 
This information collection burden has been previously approved by the 
Office of Management and Budget (OMB) under OMB No. 0581-0178, 
Vegetable and Specialty Crops Marketing Orders. 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule.
    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 
3, 2005, 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.
    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.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate because: 
(1) Any changes resulting from this proposed rule should be effective 
at the beginning of the Washington potato shipping season (July 1); (2) 
the Committee unanimously recommended these changes at a public meeting 
and all interested parties had an opportunity to provide input; and (3) 
handlers are aware of this action and want to take advantage of these 
improvements as soon as possible. All written comments timely received 
will be considered before a final determination is made on this matter.

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 
proposed to be 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

    2. In Sec.  946.120, paragraph (a) is revised to read as follows:


Sec.  946.120  Application.

    (a) Whenever shipments for special purposes pursuant to Sec.  
946.54 are relieved in whole or in part from regulations issued under 
Sec.  946.52, each handler desiring to make shipments of potatoes for 
the following purposes shall submit an application to the committee, 
prior to initiating such shipments, for a special purpose certificate 
permitting such shipments:
    (1) Charity: Provided, That handlers making shipments for charity 
of 1,000 pounds or less are exempt from these application requirements;
    (2) Prepeeling;
    (3) Canning, freezing, and ``other processing'';
    (4) Grading or storing at any specified location in Morrow or 
Umatilla Counties in the State of Oregon; and
    (5) Experimentation.
* * * * *
    3. Section 946.336 is amended by:
    A. Revising paragraph (d)(1)(vi);
    B. Removing paragraph (d)(1)(vii);
    C. Redesignating paragraph (d)(1)(viii) as paragraph (d)(1)(vii);
    D. Revising paragraph (d)(2);
    E. Revising the introductory text of paragraph (e)(2);
    F. Revising paragraph (e)(3)(iii);
    G. Removing paragraph (e)(5);
    H. Redesignating paragraph (e)(6) as paragraph (e)(5);
    I. Adding a new paragraph (e)(6), (e)(7), and (e)(8); and
    J. Revising paragraph (g)(1) to read as follows:


Sec.  946.336  Handling regulation.

* * * * *
    (d) * * *
    (1) * * *

[[Page 25794]]

    (vi) Grading or storing at any specified location in Morrow or 
Umatilla Counties in the State of Oregon; or
* * * * *
    (2) Shipments of potatoes for the purposes specified in paragraphs 
(d)(1)(i) through (vii) of this section shall be exempt from the 
inspection requirements specified in paragraph (g) of this section, 
except that shipments pursuant to paragraph (d)(1)(vi) of this section 
shall comply with the inspection requirements of paragraph (e)(2) of 
this section. Shipments specified in paragraphs (d)(1)(i), (ii), (iii), 
(v) and (vii) of this section shall be exempt from assessment 
requirements as specified in Sec.  946.248 and established pursuant to 
Sec.  946.41.
    (e) * * *
    (2) Handlers desiring to ship potatoes for grading or storing to 
any specified location in Morrow or Umatilla Counties in the State of 
Oregon shall:
* * * * *
    (3) * * *
    (iii) Upon request by the committee, furnish reports, or cause 
reports to be furnished, for each shipment pursuant to the applicable 
Special Purpose Certificate;
* * * * *
    (6) Handlers diverting potatoes to livestock feed are not required 
to apply for a Special Purpose Certificate nor report such shipments to 
the committee.
    (7) Each handler desiring to make shipments of potatoes for charity 
shall:
    (i) First apply to the committee for, and obtain, a Special Purpose 
Certificate for the purpose of making shipments for charity: Provided, 
That shipments for charity of 1,000 pounds or less are exempt from the 
application and reporting requirements: And provided further, That 
potatoes previously graded, assessed, and inspected in preparation for 
shipment to the fresh market are exempt from the application and 
reporting requirements.
    (ii) Each handler shipping potatoes to charity must inform the 
recipient that the potatoes cannot be resold or otherwise placed in 
commercial market channels.
    (8) Each handler making shipments of seed potatoes shall furnish, 
at the request of the committee, reports on the total volume of seed 
potatoes handled.
* * * * *
    (g) * * *
    (1) Except when relieved by paragraphs (d) or (f) of this section, 
no person may handle any potatoes unless a Federal-State Inspection 
Notesheet or certificate covering them has been issued by an authorized 
representative of the Federal-State Inspection Service and the document 
is valid at the time of shipment.
* * * * *

    Dated: May 11, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-9696 Filed 5-13-05; 8:45 am]
BILLING CODE 3410-02-P