Authority N.J.S.A. 4:1-11, 4:10-74, 54:47A-14 and 54:47B-13.

Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Proposal Number: PRN 2006-255.

Submit comments by October 6, 2006 to:
Alfred W. Murray, Director
Division of Marketing and Development
New Jersey Department of Agriculture
P.O. Box 330
Trenton, NJ  08625-0330

The agency proposal follows:

Summary

Pursuant to N.J.S.A. 52:14B-5.1, the rules in this chapter are scheduled to expire on July 1, 2006. In accordance with N.J.S.A. 52:14B-5.1c, the submission of this notice of proposal to the Office of Administrative Law extends that expiration date 180 days to December 28, 2006. The Department of Agriculture has reviewed these rules and has found them to be necessary, reasonable, and proper for the purpose for which they were promulgated.

Chapter 35 was promulgated to regulate the orderly collection of promotion taxes on the sale of white potato and poultry feed products in the State of New Jersey.  These rules apply primarily to dealers who sell seed potatoes to growers, to growers who produce their own seed potatoes, and to anyone who sells formulated poultry feed and feed ingredients, including mash, pellets and grain.  A promotion tax is assessed upon the sale of these products and the amount of the tax assessed is set forth on the sales invoice.  Pursuant to N.J.S.A. 54:47B-11 and 54:47A-11, all taxes collected thereunder are deposited in a special account and used for promotion, education, research, advertising, and sale of white potato and poultry products, respectively.  

Subchapter 1 sets forth the entities that are subject to the potato promotion tax.  Dealers who sell seed potatoes to growers, growers who use home grown seed potatoes and growers who purchase seed potatoes from out-of-State are subject to the tax, whereas sales of seed potatoes between dealers and single sales of less than 100 pounds are exempt from the tax.

Subchapter 2 deals with the collection of the poultry products promotion tax.  This chapter sets forth the poultry products subject to the tax and specifically exempts poultry products made with oyster shell, grit and condensed milk products, as well as single sales of poultry fee of less than 100 pounds.  In addition, this chapter establishes the requirements for how the tax will be shown on the sales invoice.

As the Department has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirements pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The rules proposed for readoption have a positive social impact on both the potato industry and the poultry industry by promoting and protecting the prosperity of these industries in New Jersey. Primarily, the rules proposed for readoption will affect growers of seed potatoes and entities selling poultry products.  The rules proposed for readoption will affect all potato growers who purchase seed potatoes in quantities larger than 100 pounds at a time.  In addition, the rules will affect all distributors of poultry products in New Jersey selling more than 100 pounds of feed at a time.  There are approximately 30 potato growers in New Jersey, and there are approximately 20 distributors of poultry feed and poultry feed ingredients. 

Economic Impact

The rules proposed for readoption are driven by economics and provide a benefit to the New Jersey poultry and white potato industries.  Specifically, potato growers and poultry product distributors will see a positive economic impact because they are sharing the financial burden of research, education, and promotion of their sector of the agricultural industry among all members.  Approximately 50 New Jersey poultry and white potato producers receive a direct benefit from the rules proposed for readoption by fostering a marketing infrastructure conducive to the maintenance of poultry and white potato farming operations.  New Jersey’s white potato and poultry products industries are an important segment of the agricultural economy, supplying part of the white potato and poultry products used by New Jersey consumers.  New Jersey’s white potato and poultry products producers are important to the State’s economy, particularly for rural communities. The rules proposed for readoption will have an economic benefit to New Jersey consumers, as well, by ensuring the continued production of New Jersey white potato and poultry products.

Compliance costs associated with the rules for readoption will be minimal. No additional cost will be incurred because these records are already required to be kept for tax purposes.  In fact, these rules will help to ensure more stable business operations for white potato and poultry products producers and dealers.  There will be a positive economic impact to all parties involved.

Federal Standards Statement

Executive Order No. 27 (1994) and P.L. 1995, c. 65 require State agencies that readopt or amend State rules exceeding any Federal standards or requirements to include in the rulemaking document a comparison with Federal law.  A Federal standards analysis is not required because the rules proposed for readoption are not subject to any Federal requirements or standards.

Jobs Impact

It is not anticipated that the rules proposed for readoption will result in the generation or loss of any jobs.

Agriculture Industry Impact

For the reasons set forth in the Summary, Social Impact and Economic Impact above, the rules proposed for readoption will have a positive impact on the agriculture industry.

Regulatory Flexibility Analysis

The rules proposed for readoption apply to approximately 30 white potato and 20 poultry products producers, most of whom are small businesses as defined by the New Jersey Regulatory Flexibility Act, N.J.S.A. 54:14B-16 et seq.  These small businesses will be affected, but to no greater extent than in the past.

Minimal recordkeeping and reporting requirements are imposed by these rules for the collection and submission of the tax. Specifically, dealers who are required to collect each of the respective taxes are obligated to show the tax on an invoice.  Tbe only reporting requirements are those necessarily associated with submitting the tax to the State.  As a result, compliance is not anticipated to be overly burdensome because the reports required are designed to be taken directly from ordinary tax records and sales invoices already kept by the white potato and poultry products producers for managerial decision-making purposes.  These producers generally have the necessary reporting systems currently in place and are not likely to experience the need for additional efforts to comply with these rules. Initial capital costs and annual costs of compliance are minimal for these small businesses; therefore, the Department has not applied differing or lesser standards based on business size.  No capital expenditures or professional services will be necessary as a result of the rules proposed for readoption.

Smart Growth Impact

The Department anticipates that there will be no impact on the achievement of smart growth or upon the implementation of the State’s Development and Redevelopment Plan from the rules proposed for readoption because they do not affect the growth, development, renewal or conservation of any land area in this State.

Full text of the rules proposed for readoption may be found in the New Jersey Administrative Code at N.J.A.C. 2:35.