[Federal Register Volume 79, Number 77 (Tuesday, April 22, 2014)]
[Rules and Regulations]
[Pages 22359-22362]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-09091]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Doc. No. AMS-FV-14-0027; FV14-985-3 IR]


Spearmint Oil Produced in the Far West; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
Spearmint Oil Administrative Committee (Committee), for the 2014-15 and 
subsequent marketing years from $0.10 to $0.09 per pound of spearmint 
oil handled. The Committee locally administers the marketing order 
which regulates the handling of spearmint oil produced in the Far West. 
Assessments upon spearmint oil handlers are used by the Committee to 
fund reasonable and necessary expenses of the program. The marketing 
year begins June 1 and ends May 31. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.
    Effective April 23, 2014. Comments received by June 23, 2014, 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 to the Docket Clerk, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. Comments should reference the document 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, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this rule 
will be included in the record and will be made available to the 
public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the internet at 
the address provided above.

FOR FURTHER INFORMATION CONTACT: Manuel Michel, Marketing Specialist, 
or Gary D. Olson, Regional Director, Northwest Marketing Field Office, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email: 
Manuel.Michel@ams.usda.gov or GaryD.Olson@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

[[Page 22360]]


SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 985 (7 CFR part 985), as amended, regulating the handling of 
spearmint oil grown in the Far West (Washington, Idaho, Oregon, and 
designated parts of Nevada and Utah), 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 Orders 12866, 13563, and 13175.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the order now in effect, Far West spearmint oil 
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 spearmint oil 
beginning June 1, 2014, and continue until amended, suspended, or 
terminated.
    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. Such 
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 rule decreases the assessment rate established for the 
Committee for the 2014-15 and subsequent marketing years from $0.10 to 
$0.09 per pound of spearmint oil handled.
    The Far West spearmint oil marketing order provides authority for 
the Committee, with the approval of USDA, to formulate an annual budget 
of expenses and collect assessments from handlers to administer the 
program. The members of the Committee are producers of Far West 
spearmint oil. They are familiar with the Committee's needs and with 
the costs for goods and services in their local area and thus are in a 
position to formulate an appropriate budget and assessment rate. The 
assessment rate is formulated and discussed in a public meeting. All 
persons directly affected have an opportunity to participate and 
provide input.
    For the 2003-04 and subsequent marketing years, the Committee 
recommended and USDA approved, an assessment rate that would continue 
in effect from marketing year to marketing year unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on February 19, 2014, and unanimously recommended 
2014-15 expenditures of $266,400 and an assessment rate of $0.09 per 
pound of spearmint oil handled. In comparison, last year's budgeted 
expenditures were $220,970. The assessment rate of $0.09 is $0.01 lower 
than the rate currently in effect. The assessment rate decrease is 
necessary to reduce the funds held in the operating reserve in order to 
not exceed approximately one marketing year's operational expenses 
(Sec.  985.42(a)).
    The major expenditures recommended by the Committee for the 2014-15 
marketing year include $25,500 for Committee expenses; $195,900 for 
administrative expenses; and $45,000 for market research and promotion 
expenses. Budgeted expenses for these items in 2013-14 were $21,500 for 
Committee expenses; $190,470 for administrative expenses; and $9,000 
for market research and promotion expenses.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by the expected quantity of Far West 
spearmint oil handled. The Committee estimates that 2,500,000 pounds of 
spearmint oil will be handled, which should provide $225,000 in 
assessment income. Income derived from handler assessments, along with 
interest income and funds from the Committee's authorized operating 
reserve will be adequate to cover budgeted expenses. Funds in the 
operating reserve (currently $321,689) will be reduced to comply with 
the maximum permitted by the order of approximately one marketing 
year's operational expenses.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate is effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
marketing year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2014-15 budget and those 
for subsequent marketing years will be reviewed and, as appropriate, 
approved by USDA.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this rule 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 
businesses 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.
    There are eight spearmint oil handlers subject to regulation under 
the order, and approximately 39 producers of Scotch spearmint oil and 
approximately 91 producers of Native spearmint oil in the regulated 
production area. Small agricultural service firms are defined by the 
Small Business Administration (SBA) as those having annual receipts of 
less than $7,000,000, and small agricultural producers are defined as 
those having annual receipts of less than $750,000 (13 CFR 121.201).
    Based on the SBA's definition of small entities, the Committee 
estimates that two of the eight handlers regulated by the order could 
be considered small entities. Most of the handlers are large 
corporations involved in the international trading of essential oils 
and the products of essential oils. In addition, the Committee 
estimates that 22 of the 39 Scotch spearmint oil producers, and 29 of 
the 91 Native spearmint oil producers could be classified as small 
entities under the SBA definition. Thus, a majority of handlers and 
producers of Far West

[[Page 22361]]

spearmint oil may not be classified as small entities.
    The Far West spearmint oil industry is characterized by producers 
whose farming operations generally involve more than one commodity, and 
whose income from farming operations is not exclusively dependent on 
the production of spearmint oil. A typical spearmint oil-producing 
operation has enough acreage for rotation such that the total acreage 
required to produce the crop is about one-third spearmint and two-
thirds rotational crops. Thus, the typical spearmint oil producer has 
to have considerably more acreage than is planted to spearmint during 
any given season. Crop rotation is an essential cultural practice in 
the production of spearmint oil for purposes of weed, insect, and 
disease control. To remain economically viable with the added costs 
associated with spearmint oil production, a majority of spearmint oil-
producing farms fall into the SBA category of large businesses.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2014-15 and subsequent 
marketing years from $0.10 to $0.09 per pound of spearmint oil handled. 
The Committee unanimously recommended 2014-15 expenditures of $266,400 
and an assessment rate of $0.09. The assessment rate of $0.09 is $0.01 
lower than the 2013-14 rate. The quantity of assessable spearmint oil 
for the 2014-15 marketing year is estimated at 2,500,000 pounds. Thus, 
the $0.09 rate should provide $225,000 in assessment income. Income 
derived from handler assessments, along with interest income and funds 
from the Committee's authorized operating reserve will be adequate to 
cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2014-15 
marketing year include $25,500 for Committee expenses, $195,900 for 
administrative expenses, and $45,000 for market research and promotion 
expenses. Budgeted expenses for these items in 2013-14 were $21,500, 
$190,470, and $9,000, respectively.
    The lower assessment rate is necessary to reduce the operating 
reserve balance and not exceed approximately one marketing year's 
expenses as provided for in Sec.  985.42. The operating reserve balance 
is expected to be $321,689 on May 31, 2014. This amount exceeds the 
maximum authorized reserve amount of $266,400 by $55,289. Assessment 
income for 2014-15 is estimated at $225,000, while expenses are 
estimated at $266,400. The Committee anticipates using $41,400 of their 
operating reserve fund for the 2014-15 marketing year.
    The Committee discussed alternatives to this action. Leaving the 
assessment rate at the current $0.10 per pound was initially 
considered, but not recommended, because the Committee would like to 
decrease the level of the operating reserve so that it is not more than 
approximately one marketing year's expenses. Lower assessment rates 
were considered, but also not recommended, because they would not 
generate the amount of income necessary to administer the program. The 
Committee ultimately determined that an assessment rate of $0.09 per 
pound, which should generate assessment income of $225,000, combined 
with operating reserve funds, would be sufficient to meet its 2014-15 
expenses.
    A review of historical data and preliminary information pertaining 
to the upcoming marketing year indicates that the producer price for 
the 2014-15 season could range between $17.00 and $19.00 per pound of 
spearmint oil. Therefore, the estimated assessment revenue for the 
2014-15 marketing year as a percentage of total grower revenue could 
range between 0.47 and 0.53 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the Far West spearmint oil 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 19, 2014, 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 comments on this 
interim rule, including the regulatory and informational impacts of 
this action on small businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes 
in those requirements as a result of this action are necessary. Should 
any changes become necessary, they would be submitted to OMB for 
approval.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large Far West spearmint oil 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material 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 2014-15 marketing year begins on June 1, 
2014, and the marketing order requires that the rate of assessment for 
each marketing year apply to all assessable spearmint oil handled 
during such marketing year; (2) this action decreases the assessment 
rate for assessable spearmint oil beginning with the 2014-15 marketing 
year; (3) handlers are aware of this action which was unanimously 
recommended by the Committee at a public meeting; and (4) this interim 
rule provides a 60-day comment period, and all comments timely received 
will be considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 985

    Marketing agreements, Oils and fats, Reporting and recordkeeping 
requirements, Spearmint oil.


[[Page 22362]]


    For the reasons set forth in the preamble, 7 CFR part 985 is 
amended as follows:

PART 985--MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL 
PRODUCED IN THE FAR WEST

0
1. The authority citation for 7 CFR part 985 continues to read as 
follows:

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

0
2. Section 985.141 is revised to read as follows:


Sec.  985.141  Assessment rate.

    On and after June 1, 2014, an assessment rate of $0.09 per pound is 
established for Far West spearmint oil. Unexpended funds may be carried 
over as a reserve.

    Dated: April 16, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-09091 Filed 4-21-14; 8:45 am]
BILLING CODE P