[Federal Register Volume 68, Number 104 (Friday, May 30, 2003)]
[Rules and Regulations]
[Pages 32328-32330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13521]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Docket No. FV03-985-2 FR]


Spearmint Oil Produced in the Far West; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the assessment rate established for the 
Spearmint Oil Administrative Committee (Committee) for the 2003-2004 
and subsequent marketing years from $0.09 to $0.10 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. 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: June 2, 2003.

FOR FURTHER INFORMATION CONTACT: Susan M. Hiller, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 1220 SW., Third Ave, Suite 385, 
Portland, OR 97204; Phone: (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: [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 of Agriculture (USDA) 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

[[Page 32329]]

intended that the assessment rate as issued herein will be applicable 
to all assessable spearmint oil beginning on June 1, 2003, 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 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 increases the assessment rate established for the 
Committee for the 2003-2004 and subsequent marketing years from $0.09 
to $0.10 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 are thus in a 
position to formulate an appropriate budget and assessment rate. The 
assessment rate was formulated and discussed in a public meeting. Thus, 
all directly affected persons had an opportunity to participate and 
provide input.
    For the 2000-2001 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 26, 2003, and unanimously recommended 
2003-2004 expenditures of $173,700 and an assessment rate of $0.10 per 
pound of spearmint oil handled. In comparison, last year's budgeted 
expenditures were $191,300. The recommended assessment rate is $0.01 
higher than the $0.09 per pound rate currently in effect. Because 
spearmint oil assessable poundage and assessment income have been lower 
than estimated the last two marketing years, the Committee has had to 
use reserve funds to cover its budgeted expenses. To keep its reserve 
fund at an acceptable level, the Committee recommended the $0.01 
increase and reduced its expenses for 2003-2004.
    The major expenditures recommended by the Committee for the 2003-
2004 marketing year include $138,400 for committee expenses, $23,300 
for administrative expenses, and $12,000 for market research and 
promotion expenses. Budgeted expenses for these items in 2002-2003 were 
$164,200, $23,100, and $4,000, respectively.
    The Committee estimates that spearmint oil sales for the 2003-2004 
marketing year will be approximately 1,697,200 pounds, which should 
provide $169,720 in assessment income. Income derived from handler 
assessments, along with interest income and funds from the Committee's 
authorized reserve, should be adequate to cover budgeted expenses. The 
Committee estimates that its monetary reserve will be approximately 
$72,394 at the beginning of the 2003-2004 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 expenses 
(Sec.  985.42).
    The assessment rate 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 will be in effect 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 2003-2004 budget and those 
for subsequent marketing years will be reviewed and, as appropriate, 
approved by USDA.

Final 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 rule on small entities. Accordingly, 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 98 producers of Class 1 (Scotch) 
spearmint oil and approximately 100 producers of Class 3 (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 whose annual receipts are less than $5,000,000, 
and small agricultural producers are defined as those having annual 
receipts less than $750,000.
    Based on 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 
11 of the 98 Scotch spearmint oil producers and 13 of the 100 Native 
spearmint oil producers could 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.
    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

[[Page 32330]]

cultural practice in the production of spearmint oil for weed, insect, 
and disease control. To remain economically viable with the added costs 
associated with spearmint oil production, most spearmint oil-producing 
farms fall into the SBA category of large businesses.
    This rule increases the assessment rate established for the 
Committee and collected from handlers for the 2003-2004 and subsequent 
marketing years from $0.09 to $0.10 per pound of spearmint oil handled. 
The Committee unanimously recommended 2003-2004 expenditures of 
$173,700 and an assessment rate of $0.10 per pound. The assessment rate 
is $0.01 higher than the $0.09 per pound rate currently in effect. The 
quantity of assessable spearmint oil for the 2003-2004 marketing year 
is estimated at 1,697,200 pounds. Thus, the $0.10 rate should provide 
$169,720 in assessment income. This, along with interest income and 
funds from the Committee's authorized reserve, should be adequate to 
cover budgeted expenses.
    The major expenditures recommended by the Committee for the 2003-
2004 marketing year include $138,400 for committee expenses, $23,300 
for administrative expenses, and $12,000 for market research and 
promotion expenses. Budgeted expenses for these items in 2002-2003 were 
$164,200, $23,100, and $4,000, respectively.
    The Committee reviewed and unanimously recommended 2003-2004 
expenditures of $173,700, which included a decrease to committee 
expenses, and increases in administrative and market research and 
promotion expenses. 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. The proposed budget includes an expenditure 
reduction of $17,600 and no further alternative expenditure levels were 
discussed. The Committee estimates that spearmint oil sales for the 
2003-2004 marketing year will be approximately 1,697,200 pounds, which 
should provide $169,720 in assessment income. This, together with 
interest and other income, is approximately $280 below the anticipated 
expenses, which the Committee determined to be acceptable.
    A review of historical information and preliminary information 
pertaining to the upcoming 2003-2004 marketing year indicates that the 
producer price for the 2003-2004 marketing year could be about $9.13 
per pound. Therefore, the estimated assessment revenue for the 2003-
2004 marketing year as a percentage of total producer revenue could be 
about 1.1 percent.
    This action increases the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing 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 26, 2003, meeting was a public meeting and all entities, 
both large and small, were able to express views on this issue. 
Finally, interested persons were invited to submit information on the 
regulatory and informational impacts of this action on small 
businesses.
    This rule 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal 
Register on April 22, 2003 (68 FR 19755). A copy of the rule was 
provided to Committee staff, which in turn made it available to 
spearmint oil producers, handlers, and other interested persons. 
Finally, the rule was made available through the Internet by the Office 
of the Federal Register and USDA. A 20-day comment period ending May 
12, 2003, was provided to allow interested persons to respond to the 
proposal. 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 matter 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 that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because the 2003-04 
marketing year begins June 1, 2003, 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. In 
addition, the Committee needs to have sufficient funds to pay its 
expenses, which are incurred on a continuous basis. Further, handlers 
are aware of this action which was recommended by the Committee at a 
public meeting. Also, a 20-day comment period was provided for in the 
proposed rule and no comments were received.

List of Subjects in 7 CFR Part 985

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

0
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, 2003, an assessment rate of $0.10 per pound is 
established for Far West spearmint oil. Unexpended funds may be carried 
over as a reserve.

    Dated: May 23, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-13521 Filed 5-29-03; 8:45 am]
BILLING CODE 3410-02-P