[Federal Register Volume 65, Number 128 (Monday, July 3, 2000)]
[Rules and Regulations]
[Pages 40973-40975]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16738]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Docket No. FV00-985-4 FIR]


Marketing Order Regulating the Handling of Spearmint Oil Produced 
in the Far West; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, without change, the provisions of an interim final rule 
which decreased the assessment rate established for the Spearmint Oil 
Administrative Committee (Committee) for the 2000-2001 and subsequent 
marketing years from $0.10 per pound to $0.09 per pound of spearmint 
oil handled. The Committee is responsible for local administration of 
the marketing order which regulates the handling of spearmint oil 
produced in the Far West. Authorization to assess spearmint oil 
handlers enables the Committee to incur expenses that are reasonable 
and necessary to administer 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 DATE: August 2, 2000.

FOR FURTHER INFORMATION CONTACT: Robert J. Curry, 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, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 
720-5698.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: 
(202) 720-5698, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 985, as amended (7 CFR part 985), regulating the handling of 
spearmint oil produced 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 is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing 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, 2000, and continue until amended, 
suspended, or terminated. This rule will 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 the Secretary 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 the Secretary 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 the 
Secretary'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 continues to decrease the assessment rate established for 
the Committee for the 2000-2001 and subsequent marketing years from 
$0.10

[[Page 40974]]

per pound to $0.09 per pound of spearmint oil handled.
    The spearmint oil order provides authority for the Committee, with 
the approval of the Department, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the Committee are producers of spearmint oil. 
They are familiar with the Committee's needs and with the costs for 
goods and services in their local area and are thus in a position to 
formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.
    For the 1995-1996 and subsequent marketing years, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from marketing year to marketing year unless 
modified, suspended, or terminated by the Secretary upon recommendation 
and information submitted by the Committee or other information 
available to the Secretary.
    The Committee met on February 23, 2000, and unanimously recommended 
2000-2001 expenditures of $212,900 and an assessment rate of $0.09 per 
pound of spearmint oil handled. In comparison, last year's budgeted 
expenditures were $219,028. The assessment rate of $0.09 is $0.01 lower 
than the rate in effect prior to this action. The Committee discussed 
assessment rates both lower and greater than $0.09 per pound. However, 
the Committee decided that an assessment rate of less than $0.09 would 
not generate the income necessary to administer the program with an 
adequate reserve. The Committee recommended the decreased assessment 
rate to help offset the negative effects the current depressed 
spearmint oil market is having on the industry.
    Expenditures recommended by the Committee for the 2000-2001 
marketing year include $178,500 for Committee expenses and $34,400 for 
administrative expenses. For 2000-2001, a total of $156,000 is budgeted 
for agency fees, $21,000 is budgeted for Committee per diem and travel, 
$16,500 is budgeted for agency staff travel, and $10,700 is budgeted 
for copying, mail handling, postage, telephone and fax, cellular phone 
charges, officer liability insurance, and auditing. Actual expenses for 
these items in 1999-2000 are estimated to total $165,000, $22,133, 
$16,843, and $10,900. For 2000-2001, funds also are budgeted for market 
development ($5,000) and for compliance ($1,000). Expenditures for 
these items in 1999-2000 are expected to total $5,000.
    The Committee estimates that spearmint oil sales for the 2000-2001 
marketing year will be approximately 2,058,474 pounds, which should 
provide $185,263 in assessment income. This assessment income, when 
combined with $13,029 from the monetary reserve, $3,500 in interest 
income, and $11,108 from the sale of certain assets should be adequate 
to meet this year's expenses of $212,900. The Committee estimates that 
its monetary reserve will be approximately $156,757 at the beginning of 
the 2000-2001 marketing year. It is not anticipated that the reserve 
fund will exceed the maximum permitted by the order of approximately 
one marketing year's operational expense (Sec. 985.42).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary 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 the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department 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.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, the AMS 
has prepared this final 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 the 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 7 spearmint oil handlers subject to regulation under the 
marketing order and approximately 119 producers of Scotch spearmint oil 
and 105 producers of Native spearmint oil in the regulated production 
area. Small agricultural service firms are defined by the Small 
Business Administration (SBA) (13 CFR 121.201) as those having annual 
receipts of less than $5,000,000, and small agricultural producers are 
defined as those whose annual receipts are less than $500,000.
    Based on the SBA's definition of small entities, the Committee 
estimates that 2 of the 7 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 
25 of the 119 Scotch spearmint oil producers and 7 of the 105 Native 
spearmint oil producers would be classified as small entities under the 
SBA definition. Thus, a majority of handlers and producers of Far West 
spearmint oil may not be classified as small entities.
    This rule continues to decrease the assessment rate established for 
the Committee and collected from handlers for the 2000-2001 and 
subsequent marketing years from $0.10 per pound to $0.09 per pound of 
spearmint oil handled. The Committee estimates that spearmint oil sales 
will total 2,058,474 pounds in the 2000-2001 marketing year. The $0.09 
per pound assessment rate should provide an estimated income of 
$185,263, which, when combined with $13,029 from the monetary reserve, 
$3,500 in interest income, and $11,108 from the sale of certain assets 
should be adequate to meet this year's expenses of $212,900. The 
Committee estimates that its monetary reserve will be approximately 
$156,757 at the beginning of the 2000-2001 marketing year and that the 
fund will not exceed the maximum permitted by the order of 
approximately one marketing year's operational expense (Sec. 985.42).
    The Committee reviewed and unanimously recommended 2000-2001 
expenditures of $212,900 which is $6,128 less than approved for last 
year. Prior to arriving at this budget, the Committee considered 
information from various sources, including the Committee's Executive 
Committee and the current marketing year's actual and anticipated 
expenditures. Alternative expenditure levels and assessment rates were 
discussed by the Committee officers prior to presentation to the full 
Committee for approval. The Committee

[[Page 40975]]

decided that an assessment rate of less than $0.09 would not generate 
the income necessary to administer the program with an adequate 
reserve. The Committee recommended the decreased assessment rate to 
help offset the negative effects the current depressed spearmint oil 
market is having on the industry.
    Expenditures recommended by the Committee for the 2000-2001 
marketing year include $178,500 for Committee expenses and $34,400 for 
administrative expenses. For 2000-2001, a total of $156,000 is budgeted 
for agency fees, $21,000 is budgeted for Committee per diem and travel, 
$16,500 is budgeted for agency staff travel, and $10,700 is budgeted 
for copying, mail handling, postage, telephone and fax, cellular phone 
charges, officer liability insurance, and auditing. Actual expenses for 
these items in 1999-2000 are estimated to total $165,000, $22,133, 
$16,843, and $10,900. For 2000-2001, funds also are budgeted for market 
development ($5,000) and for compliance ($1,000). Expenditures for 
these items in 1999-2000 are expected to total $5,000.
    Based on 1999 prices, the average price paid to producers for both 
Scotch and Native spearmint oils during the 2000-2001 marketing year 
could be about $9.80 per pound. Therefore, the estimated assessment 
revenue for the 2000-2001 marketing year as a percentage of total 
producer revenue could be about 0.92 percent.
    This action continues to decrease the assessment obligation imposed 
on handlers. While this rule will impose some additional costs on 
handlers, the costs are minimal and in the form of uniform assessments 
on all handlers. Some of the additional costs may be passed on to 
producers. However, these costs will be offset by the benefits derived 
by the operation of the order. 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 23, 2000, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large 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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    An interim final rule concerning this action was published in the 
Federal Register on April 5, 2000 (65 FR 17756). A copy of the rule was 
mailed to the Committee office, which in turn provided copies for 
Committee members and industry members. Further, the interim final rule 
was made available on the Internet by the Office of the Federal 
Register. A 30-day comment period was provided for interested persons 
to respond to the interim final rule. The comment period ended on May 
5, 2000, and no comments were received.
    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.
    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.

List of Subjects in 7 CFR Part 985

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

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

    Accordingly, the interim final rule amending 7 CFR part 985 which 
was published at 65 FR 17756 on April 5, 2000, is adopted as a final 
rule without change.

    Dated: June 27, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-16738 Filed 6-30-00; 8:45 am]
BILLING CODE 3410-02-P