[Federal Register Volume 79, Number 77 (Tuesday, April 22, 2014)]
[Rules and Regulations]
[Pages 22359-22362]
From the Federal Register Online via the Government Publishing 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:
[email protected] or [email protected].
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: [email protected].
[[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]
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