[Federal Register: May 30, 2003 (Volume 68, Number 104)]
[Rules and Regulations]
[Page 32328-32330]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30my03-2]
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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: Jay.Guerber@usda.gov.
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