Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of Administrative Rules and Regulations Governing Issuance of Additional Allotment Base, 37932-37937 [2014-15598]

Download as PDF 37932 Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Rules and Regulations List of Subjects in 7 CFR Part 983 Marketing agreements and orders, Pistachios, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, 7 CFR part 983 is amended as follows: PART 983–PISTACHIOS GROWN IN CALIFORNIA, ARIZONA, AND NEW MEXICO 1. The authority citation for 7 CFR part 983 continues to read as follows: ■ Authority: 7 U.S.C. 601–674. 2. Section 983.150 is amended by revising paragraph (d)(1) to read as follows: ■ § 983.150 Aflatoxin regulations. * * * * * (d)* * * (1) Samples for testing. Prior to testing, each handler shall cause a representative sample to be drawn from each lot (‘‘lot samples’’) of sufficient weight to comply with Tables 1 and 2 of this section. (i) At premises with mechanical sampling equipment (auto-samplers) approved by the USDA Federal-State Inspection Service, samples shall be drawn by the handler in a manner acceptable to the Committee and the USDA Federal-State Inspection Service. (ii) At premises without mechanical sampling equipment, sampling shall be conducted by or under the supervision of an inspector, or as approved under an alternative USDA-recognized inspection program. * * * * * Dated: June 27, 2014. Rex A. Barnes, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2014–15596 Filed 7–2–14; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 985 ehiers on DSK2VPTVN1PROD with RULES [Doc. No. AMS–FV–13–0088; FV14–985–2 FR] Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of Administrative Rules and Regulations Governing Issuance of Additional Allotment Base Agricultural Marketing Service, USDA. ACTION: Final rule. AGENCY: VerDate Mar<15>2010 13:50 Jul 02, 2014 Jkt 232001 This final rule revises the procedure currently prescribed for issuing additional allotment base for Class 1 (Scotch) and Class 3 (Native) spearmint oil to new and existing producers under the Far West spearmint oil marketing order (order). The order regulates the handling of spearmint oil produced in the Far West and is administered locally by the Spearmint Oil Administrative Committee (Committee). This action reduces the number of new producers that are issued additional allotment bases each year from three to two for each class of oil; temporarily changes the method by which additional allotment base is allocated to existing producers to take into account small production operations; and amends the requirements for eligibility, retention, and transfer of additional allotment base issued to new and existing producers. Revising the procedure for issuing additional allotment base will help to ensure that new and existing spearmint oil producers have sufficient allotment base to be economically viable in the future. SUMMARY: DATES: Effective Date: July 7, 2014. FOR FURTHER INFORMATION CONTACT: Manuel Michel or Gary D. Olson, 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. SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing Order No. 985 (7 CFR part 985), as amended, 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 Orders 12866, 13563, and 13175. This final rule has been reviewed under Executive Order 12988, Civil PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 Justice Reform and is not intended to have retroactive effect. 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. A 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 final rule revises the procedure currently prescribed for issuing additional allotment base for Class 1 (Scotch) and Class 3 (Native) spearmint oil to new and existing producers under the order’s volume control provisions. This rule: (1) Reduces the number of allocations of additional allotment base issued to new producers each year from three to two for each class of oil; (2) temporarily changes the method by which additional allotment base is issued to existing producers to take into account producers whose total allotment base is below the size of the minimum economic enterprise (MEE) required to produce each class of spearmint oil; (3) provides that additional allotment base issued to existing producers under the revised procedure cannot be used to replace allotment base that has been previously transferred away; and (4) provides that additional allotment base issued under the revised procedure cannot be transferred to another producer for at least five years following issuance. This rule was recommended unanimously by the Committee at a meeting on November 6, 2013. Under the order, volume control measures are authorized to regulate the marketing of spearmint oil. Regulation is currently effectuated through the issuance of allotment bases to producers, the establishment of annual salable quantities and allotment percentages, and the reserve pooling of excess production. Allotment base is each producer’s quantified share of the spearmint oil market based on a statistical representation of past spearmint oil production, with accommodation for reasonable and normal adjustments to such base. The E:\FR\FM\03JYR1.SGM 03JYR1 ehiers on DSK2VPTVN1PROD with RULES Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Rules and Regulations order’s provisions allow for the regulation of spearmint oil volume available to the market. The objective of regulation is to establish orderly marketing conditions for spearmint oil and to ensure that there is sufficient spearmint oil supply available to meet market requirements. Since the program’s inception, volume regulation has been instrumental in promoting market and price stability within the industry. The order contains provisions to ensure that there is orderly market expansion and that new producers are able to produce and market spearmint oil. Section 985.53(d)(1) of the order requires the Committee to annually make additional allotment bases available for each class of oil in the amount of no more than 1 percent of the total allotment base for that class of oil. Fifty percent of these additional allotment bases shall be made available to new producers and 50 percent made available to existing producers. Section 985.53(d)(3) requires the Committee, with the approval of the Secretary, to establish rules and regulations to be used for determining the distribution of additional allotment bases. In 1982, these rules and regulations were established and have been subsequently revised on several occasions, most recently in 2003. Each time a revision is made, the Committee considers several important factors which include; the size of the MEE required for spearmint oil production, the applicant’s ability to produce spearmint oil, the area where the spearmint oil will be produced, and other economic and marketing factors that have a direct impact on spearmint oil producers. The Committee reviews regularly and updates as needed, the size of the MEE required for spearmint oil production. Under the order, MEE is the minimum size of production operation that the Committee has determined to be economically viable for each class of spearmint oil. Between 1982 and 1997, the Committee revised the MEE for Scotch spearmint oil production three times and Native spearmint oil production four times. As a result, the MEE increased from 1,200 pounds to 3,000 pounds for Scotch spearmint oil, and from 1,800 pounds to 3,400 pounds for Native spearmint oil. Section 985.153(c)(1) of the order’s administrative rules and regulations prescribes the method by which additional allotment base is issued to new producers. In addition, § 985.153(c)(2) prescribes the procedure by which additional allotment base is issued to existing producers. Lastly, § 985.153(d) specifies certain VerDate Mar<15>2010 13:50 Jul 02, 2014 Jkt 232001 requirements for spearmint oil producers who are issued additional allotment base pursuant to § 985.153(c)(1) and (c)(2). The Committee met on November 6, 2013, to consider the procedures for issuing additional allotment base to new and existing producers and to make recommendations regarding the revision of those procedures. As required by § 985.153(c)(1)(ii), the Committee first considered the size of the MEE required to produce each class of spearmint oil. The Committee determined that the MEE levels for both classes of spearmint oil were no longer representative and needed to be revised. The Committee recognized that, as production and cultural practices for spearmint oil have continued to change and production costs per acre have increased, the Committee’s previously established MEE levels are too low and should be revised. As such, the Committee concluded that the MEE thresholds had increased to 5,121 pounds for Scotch spearmint oil and 5,812 pounds for Native spearmint oil. As a result of the Committee’s determination that the MEE thresholds have increased, and given the quantity of additional allotment base available to new producers each year (1⁄2 of 1 percent of the total allotment base for each class of oil), the additional allotment base issued each year is only enough for two new producers, instead of three for each class of oil. The Committee’s initial calculation of the total allotment base of Scotch spearmint oil during the 2014–2015 marketing year is approximately 2,089,146 pounds. One half of one percent of this amount is 10,445 pounds. With the MEE for Scotch spearmint oil determined to be 5,121 pounds, issuing allotment base to two new producers will require 10,242 pounds, which is within the amount of additional allotment base that will be available for the year. Likewise, the Committee’s initial calculation of the total allotment base of Native spearmint oil during the 2014– 2015 marketing year is approximately 2,371,350 pounds. One half of one percent of this amount is 11,856 pounds. With the MEE for Native spearmint oil determined to be 5,812 pounds, issuing allotment base to two new producers will require 11,624 pounds, which is within the amount of additional allotment base that will be available for the year. Based on the above information, the Committee unanimously recommended reducing the number of new producers that are issued additional allotment base each year from three to two for each PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 37933 class of oil. The Committee also recommended that the additional allotment base issued to new producers not be transferrable for at least five years following issuance. The current retention period prior to transferability is two years. New producers issued additional allotment base under this rule will continue to be required to submit evidence of an ability to produce and sell oil from such allotment base in the first marketing year following issuance of such base. The Committee also gave consideration to existing producers with regards to the size of the MEE required to produce spearmint oil and the allocation of additional allotment base. After analyzing the Committee’s records, the Committee found that some existing producers hold allotment bases that are below the revised MEE levels. As a result, the Committee unanimously recommended that the additional allotment base that is made available each year to existing producers be temporarily allocated first to those eligible producers who hold allotment bases that are less than the MEE threshold in order to bring their total up to that level. Under this final rule, existing Scotch spearmint oil producers whose allotment bases are less than 5,121 pounds as of October 17, 2012, who apply and who have the ability to produce additional quantities of spearmint oil, will be issued sufficient additional allotment base to bring them up to the MEE threshold over a threeyear period extending through the 2016–2017 marketing year. In addition, existing Native spearmint oil producers who hold allotment bases of less than 5,812 pounds as of October 17, 2012, who apply and who have the ability to produce additional quantities of spearmint oil, will be issued sufficient additional allotment base to bring them up to the MEE threshold over a fouryear period extending through the 2017–2018 marketing year. The Committee estimates there will be 21 producers of Scotch spearmint oil and 30 producers of Native spearmint oil eligible for additional allotment base under this final rule. It is expected that eligible existing producers of both Scotch and Native spearmint oil will apply for the full amount of additional allotment base made available to them. If there is any unallocated additional allotment base remaining for either Scotch spearmint oil during the 2016– 2017 marketing year, or Native spearmint oil during the 2017–2018 marketing year, such amount will be distributed on a prorated basis among E:\FR\FM\03JYR1.SGM 03JYR1 ehiers on DSK2VPTVN1PROD with RULES 37934 Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Rules and Regulations all existing producers of each respective class of spearmint oil. The Committee also recommended that additional allotment base issued to producers under the revised procedure not be used to replace allotment base that has been previously transferred away by that producer and that additional allotment base issued under the revised procedure not be transferrable for at least five years following issuance. Since the establishment of the order, one of the Committee’s primary objectives has been to help ensure that all spearmint oil producers are economically viable, as evidenced by holding allotment bases that are above the minimum economic threshold required for spearmint oil production. The Committee has worked to meet this objective by regularly determining the size of the MEE and issuing additional allotment base accordingly. Specifically, the Committee has raised the quantity of allotment base issued to new producers and increased the allotment bases of those existing producers who hold allotment bases that are below the levels that comprise the minimum economic threshold required for spearmint oil production. Another Committee objective has been to issue as many additional allotment bases as possible to new producers, at levels considered economically viable to each recipient. However, since the order limits the amount of additional allotment base issued to new producers, and because the size of the MEE required for spearmint oil production must be considered, the Committee has found it necessary to limit the number of new producers that are issued additional allotment base each year. Therefore, given the circumstances, the Committee believes the combination of these actions provides the best method available for optimizing the number of new producers that enter and remain in business, and also helps assure that there will continue to be a broad base of spearmint oil production. The procedure for issuing additional allotment base to new and existing producers has been modified several times since the inception of the order. Between 1982 and 1991, the entire Far West spearmint oil production area was treated as a single region for the purpose of issuing additional allotment base to new producers. The Committee determined the size and number of economic enterprises of additional allotment base for each class of spearmint oil to be made available to new producers. The additional allotment bases were then issued to new VerDate Mar<15>2010 13:50 Jul 02, 2014 Jkt 232001 producers drawn from the lot of eligible individuals who had requested additional allotment base. In 1991, the order’s administrative rules and regulations were modified through the rulemaking process to divide the production area into four regions for purposes of issuing additional allotment base to new producers. An equal number of allotment bases were issued to new producers in each region based on the amount of additional allotment base available and the MEE determined by the Committee. Based on the Committee’s determinations, this effectively allowed one new producer annually from each of the four regions to be issued additional allotment base, for each class of spearmint oil. Again in 1997, rulemaking action was taken to reorganize and reduce the number of regions within the Far West production area from four to three. This revision had the effect of reducing the number of new producers that were issued additional allotment bases each year from four to three for each class of spearmint oil. The Committee recommended the revision with the purpose of distributing additional allotment bases within the production area and to increase the size of allotment bases issued to new producers to correspond to the size of the MEE. The Committee had determined that the size of the MEE for spearmint oil production had increased to a point where there was insufficient additional allotment base to issue economically sufficient quantities of base to new producers in all four regions. By reorganizing and reducing the number of regions to three, there was adequate additional allotment base to issue base to three new producers of each class of spearmint oil. In reaching its recommendation, the Committee weighed the importance of issuing as many additional allotment bases as possible against the need to issue such bases at levels considered economically viable to each recipient. In 2000, the three regions of the Far West production area were further reduced to two regions through the rulemaking process. However, the number of new producers issued additional allotment bases each year was maintained at three for each class of spearmint oil. As before, the Committee recommended the revision with the purpose of distributing additional allotment bases to new spearmint oil producers throughout the production area. This final rule reduces the number of new producers issued additional allotment base each year from three to PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 two for each class of spearmint oil and is consistent with previous rulemaking. The Committee’s purpose, previously and now, is to ensure that a maximum number of eligible new producers are issued additional allotment bases each year at levels that are economically viable to produce each class of spearmint oil. Consistent with actions taken in the past, the Committee made its recommendation after carefully considering information available from its management records, Federal and State government sources, and industry participants. The Committee also considered the size of the MEE required for the production of each class of spearmint oil, historical statistics relating to the locations of the producers applying for the annual additional allotment base, and other factors, such as number of producers in the regulated production area and the amount of allotment base held by such producers. Based on its review, the Committee believes that the revision effectuated by this final rule is the most effective option available in order to continue fulfilling the order’s objectives. Final 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 action 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 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 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. In addition, there are approximately 36 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 E:\FR\FM\03JYR1.SGM 03JYR1 ehiers on DSK2VPTVN1PROD with RULES Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Rules and Regulations entities. Most of the handlers are large corporations involved in the manufacture and trade of essential oils and the products of essential oils in the international market. In addition, the Committee estimates that 19 of the 36 Scotch spearmint oil producers and 29 of the 91 Native spearmint oil producers could be classified as small entities under the SBA definition. Thus, many 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 with 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. Small spearmint oil producers generally are not as extensively diversified as larger ones and as such, are more at risk from market fluctuations. Such small producers generally need to market their entire annual allotment and do not have the luxury of having other crops to cushion seasons with poor spearmint oil returns. Conversely, large diversified producers have the potential to endure one or more seasons of poor spearmint oil markets because income from alternate crops could support the operation for a period of time. Being reasonably assured of a stable market and price provides small producing entities with the ability to maintain sufficient cash flow and to meet annual expenses. Thus, the market and price stability provided by the order potentially benefits small producers more than the large producers. This final rule revises the procedure for issuing additional allotment base by reducing the number of additional allotment bases issued to new producers from three to two, for each class of spearmint oil. In addition, this rule increases the required retention period prior to transferability of additional allotment base issued to new producers VerDate Mar<15>2010 13:50 Jul 02, 2014 Jkt 232001 from two years to five years following issuance. This final rule also temporarily changes the procedures for the allocation of additional allotment base by class to take into account existing producers that are below the MEE threshold. This revision is intended to help existing small spearmint oil producers by increasing their individual allotment bases to a level that approximates the MEE required for spearmint oil production. The action will help ensure that small existing spearmint oil producers have sufficient allotment base to remain economically viable in the future. Also, this rule provides that additional allotment base issued to existing small producers cannot be used to replace allotment base which has been previously transferred away. Finally, this rule provides that additional allotment base issued under the revised procedure cannot be transferred for at least five years following issuance. The revised procedure by which additional allotment base is allocated to existing producers will be in effect temporarily through May 31, 2017, for Scotch spearmint oil, and May 31, 2018, for Native spearmint oil, or until all producers who are eligible and apply have received enough allotment base to bring them up to the respective MEE level for each class of oil. Authority for this action is provided in § 985.53(d)(3) of the order. At the meeting on November 6, 2013, the Committee discussed the impact of the recommended revisions on handlers and producers in terms of costs and returns. Under the order, the Committee is responsible for determining how much MEE is required to produce each class of spearmint oil. The Committee determined the MEE size for the 2014– 2015 and subsequent marketing years to be 5,121 pounds for Scotch spearmint oil and 5,812 pounds for Native spearmint oil. Taking this information into consideration, the Committee calculated that the number of new producers issued additional allotment bases each year would need to be reduced from three to two for each class of oil. While this action reduces the number of new producers issued additional allotment bases each year, each new producer will have a larger initial allotment base, thereby enhancing their long term economic viability in the spearmint oil industry. Additionally, the Committee estimates there are 21 producers of Scotch spearmint oil whose allotment bases are below the MEE threshold and it will take a total of 21,913 pounds of additional allotment base to raise these PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 37935 producers’ allotment bases up to the Scotch spearmint oil MEE threshold. Likewise, the Committee estimates there are 30 producers of Native spearmint oil whose allotment bases are below the MEE level and that it will take a total of 43,456 pounds of additional allotment base to raise these producers’ allotment bases to the size of the MEE required to make Native spearmint oil. While the amount of additional allotment base necessary to bring all spearmint oil producers’ allotment bases up to the MEE threshold is a fraction of the total allotment base, the benefits of this final rule will be significant to these small producers, as it may contribute to their potential economic viability well into the future. Without this revision, small spearmint oil producers may have been at a greater risk of not being able to continue to produce spearmint oil. Therefore, the benefits of this rule are expected to be greater for small producers than for larger entities. The Committee discussed several alternatives to the recommendations contained in this rule including not making any changes to the procedures as currently prescribed in the order. However, the Committee determined that not taking the MEE threshold into consideration when issuing additional base would have negatively impacted new and existing small producers. The Committee concluded that the most effective option was to revise the procedure for issuing additional allotment base in order to improve the economic viability of new and existing producers whose allotment bases are below the MEE threshold. The Committee also considered alternative MEE thresholds before deciding on the levels that were most representative of the production economics for each class of spearmint oil. The Committee believes the size of the MEE determined for the production of each class of spearmint oil is accurate and appropriate given the information available. In addition, the Committee considered the length of time that new and existing producers should be expected to hold onto additional allotment base issued under the revised procedure before such allotment base is able to be transferred to another producer. The Committee considered other retention periods other than the five year period recommended, including maintaining the two year retention period. However, it concluded that a five year retention requirement prior to transfer of additional allotment base issued under the revised procedure was a sufficient period for new and existing producers to demonstrate E:\FR\FM\03JYR1.SGM 03JYR1 ehiers on DSK2VPTVN1PROD with RULES 37936 Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Rules and Regulations viability in spearmint oil production and should not present an undue hardship on the producers being issued the additional allotment base. In its deliberations, the Committee considered all available information, including its determination of the size of the MEE required for spearmint oil production, historical statistics relating to the locations of the producers applying for the annual additional allotment base, and other factors such as the number of producers in the regulated production area and the amount of allotment base held by such producers. Based on those determinations, the full eight-member Committee unanimously recommended revising the procedure for issuing additional allotment base to new and existing spearmint oil producers for each class of oil. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order’s information collection requirements is currently approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581–0178, Generic Vegetable and Specialty Crops. Upon publication of this final rule, a Justification of Change will be submitted to make minor modifications and updates to the appearance of two forms and adjust the burden, accordingly. This final rule revises the procedure currently prescribed for issuing additional allotment base for Class 1 (Scotch) and Class 3 (Native) spearmint oil to new and existing producers under the Far West spearmint oil marketing order. Accordingly, this action will not impose any additional reporting or recordkeeping requirements on either small or large spearmint oil producers or 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. As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant federal rules that duplicate, overlap or conflict with this final rule. 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. In addition, the Committee meetings were widely publicized throughout the spearmint oil industry and all interested persons were invited to attend the meetings and participate in Committee deliberations on all issues. Like all VerDate Mar<15>2010 13:50 Jul 02, 2014 Jkt 232001 Committee meetings, the March 6, 2013, and the November 6, 2013, meetings were public meetings and all entities, both large and small, were able to express views on this issue. A proposed rule concerning this action was published in the Federal Register on May 6, 2014 (79 FR 25710). A copy of the rule was provided to Committee staff, which in turn made it available to all Far West spearmint oil producers, handlers, and interested persons. Finally, the rule was made available through the internet by USDA and the Office of the Federal Register. A 15-day comment period ending May 21, 2014, 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/ MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to Jeffrey Smutny at the previously mentioned address in the FOR FURTHER INFORMATION section of this document. 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. It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because applications for additional allotment base are made available in June and the drawing for new spearmint oil producers is held in August. In addition, existing producers need to be notified of the revision to the issuance of additional allotment base so they may plan their plantings accordingly. Further, producers are aware of this rule, which was recommended at a public meeting. Also, a 15-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. For the reasons set forth in the preamble, 7 CFR Part 985 is amended as follows: PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 PART 985—MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL PRODUCED IN THE FAR WEST 1. The authority citation for 7 CFR Part 985 continues to read as follows: ■ Authority: 7 U.S.C. 601–674. 2. In § 985.153: a. Redesignate paragraphs (c)(1)(ii) and (c)(2)(ii) as (c)(1)(iii) and (c)(2)(iv) respectively; ■ b. Add new paragraphs (c)(1)(ii), (c)(2)(ii) and (c)(2)(iii); ■ c. Revise newly redesignated paragraphs (c)(1)(iii) and (c)(2)(iv); and ■ Revise paragraph (d). The additions and revisions read as follows: ■ ■ § 985.153 Issuance of additional allotment base to new and existing producers. * * * * * (c) * * * (1) * * * (ii) The Committee shall review all requests from new producers for additional allotment base made available pursuant to § 985.53(d)(1). (iii) Each year, the Committee shall determine the size of the minimum economic enterprise required to produce each class of oil. The Committee shall thereafter calculate the number of new producers who will receive allotment base under this section for each class of oil. The Committee shall include that information in its announcements to new producers in each region informing them when to submit requests for allotment base. The Committee shall determine whether the new producers requesting additional base have the ability to produce spearmint oil. The names of all eligible new producers from each region shall be placed in separate lots per class of oil. For each class of oil, separate drawings shall be held from a list of all applicants from Region A and from a list of all applicants from Region B. If, in any marketing year, there are no requests for additional base in a class of oil from eligible new producers in a region, such unallocated additional allotment base shall be issued to an eligible new producer whose name is selected by drawing from a list containing the names of all remaining eligible new producers from the other region for that class of oil. The Committee shall immediately notify each new producer whose name was drawn and issue that producer an allotment base in the appropriate amount. Allotment base issued to new producers under this section shall not be transferred for at least five years following issuance. E:\FR\FM\03JYR1.SGM 03JYR1 ehiers on DSK2VPTVN1PROD with RULES Federal Register / Vol. 79, No. 128 / Thursday, July 3, 2014 / Rules and Regulations (2) * * * (ii) Class 1 base. With respect to the issuance of additional Class 1 allotment base to existing producers for the 2014– 2015 through the 2016–2017 marketing years, existing producers with less than 5,121 pounds of allotment base as of October 17, 2012, who request additional allotment base and who have the ability to produce additional quantities of Class 1 spearmint oil, shall be issued additional allotment base sufficient to bring them up to a level not to exceed 5,121 pounds: Provided, That such additional Class 1 allotment base shall be allocated to eligible producers on a pro-rata basis from available additional Class 1 allotment base: Provided further, That additional allotment base shall not be issued to any person if such additional allotment base would replace all or part of an allotment base that such person has previously transferred to another producer. Additional allotment base in excess of the amount needed to bring eligible producers up to 5,121 pounds of Class 1 allotment base shall be distributed on a prorated basis among all existing producers who apply and who have the ability to produce additional quantities of spearmint oil. (iii) Class 3 base. With respect to the issuance of additional Class 3 allotment base for existing producers for the 2014– 2015 through the 2017–2018 marketing years, existing producers with less than 5,812 pounds of allotment base as of October 17, 2012, who request additional allotment base and who have the ability to produce additional quantities of Class 3 spearmint oil, shall be issued additional allotment base sufficient to bring them up to a level not to exceed 5,812 pounds: Provided, That such additional Class 3 allotment base shall be allocated to eligible producers on a pro-rata basis from available additional Class 3 allotment base: Provided further, That additional allotment base shall not be issued to any person if such additional allotment base would replace all or part of an allotment base that such person has previously transferred to another producer. Additional allotment base in excess of the amount needed to bring eligible producers up to 5,812 pounds of Class 3 allotment base shall be distributed on a prorated basis among all existing producers who apply and who have the ability to produce additional quantities of spearmint oil. (iv) For each marketing year after 2016–2017 for Class 1 oil and 2017– 2018 for Class 3 oil, each existing producer of a class of spearmint oil who requests additional allotment base, and who has the ability to produce VerDate Mar<15>2010 13:50 Jul 02, 2014 Jkt 232001 additional quantities of that class of spearmint oil, shall be eligible to receive a share of the additional allotment base issued for that class of oil. Additional allotment base issued by the Committee for a class of oil shall be distributed on a prorated basis among the eligible producers for that class of oil. The Committee shall immediately notify each producer who is to receive additional allotment base by issuing that producer an allotment base in the appropriate amount. Allotment base issued to existing producers under this section shall not be transferred for at least two years following issuance, except that additional allotment base allocated pursuant to paragraph (c)(2)(ii) and (c)(2)(iii) of this section shall not be transferred for at least five years following issuance. (d) The person receiving additional allotment base pursuant to this section shall submit to the Committee evidence of an ability to produce and sell oil from such allotment base in the first marketing year following issuance of such base. Dated: June 27, 2014. Rex A. Barnes, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2014–15598 Filed 7–2–14; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket No. EERE–2010–BT–TP–0010] RIN 1904–AC21 Energy Conservation Program for Consumer Products: Test Procedures for Residential Furnaces Fans; Correction Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Final rule; technical correction. AGENCY: On January 3, 2014 the U.S. Department of Energy (DOE) published a final rule in the Federal Register that established the test procedure for residential furnace fans. Due to drafting errors, that document inadvertently removed necessary incorporation by reference material in the Code of Federal Regulations (CFR). This final rule rectifies this error by once again adding the removed material. DATES: Effective Date: July 3, 2014. The incorporation by reference of a certain standard listed in this rulemaking was approved by the SUMMARY: PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 37937 Director of the Office of the Federal Register on October 4, 1993. FOR FURTHER INFORMATION CONTACT: Mr. Ronald Majette, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE–5B, 1000 Independence Avenue SW., Washington, DC, 20585–0121. Telephone: (202) 586–7935. Email: residential_furnace_fans@ee.doe.gov. Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC–71, 1000 Independence Avenue SW., Washington, DC 20585–0121. Telephone: (202) 586–9507. Email: Eric.Stas@hq.doe.gov. SUPPLEMENTARY INFORMATION: I. Background On January 3, 2014, DOE’s Office of Energy Efficiency and Renewable Energy published a test procedure final rule in the Federal Register titled, ‘‘Test Procedures for Residential Furnace Fans’’ (hereafter referred to as the ‘‘January 2014 final rule’’). 79 FR 500. Since the publication of that final rule, it has come to DOE’s attention that, due to a technical oversight, the January 2014 final rule incorrectly deleted the incorporation by reference of ASHRAE 103–1993 within 10 CFR 430.3. The January 2014 final rule removed the existing reference to ASHRAE 103–1993 and inserted a reference to ASHRAE 103–2007; however, DOE intended to maintain the existing reference to ASHRAE 103–1993 (applicable to residential furnaces and boiler) while adding the incorporation by reference to ASHRAE 103–2007 (applicable to residential furnace fans). This final rule corrects this error by once again adding ASHRAE 103–1993 to the list of materials incorporated by reference at 10 CFR 430.3. This final rule also renumbers section 430.3 to account for the additional reference. II. Need for Correction As published, the identified provisions in 10 CFR 430.3 (which only reference ASHRAE 103–2007 and do not reference ASHRAE 103–1993) will likely cause confusion and may mislead interested parties regarding how to properly conduct testing under DOE’s residential furnaces and boilers test procedure. The January 2014 final rule for furnace fans removed the incorporation by reference of ASHRAE 103–1993. However, the incorporation by reference of ASHRAE 103–1993 into the CFR remains required because that standard is referenced by Appendix N to subpart B of 10 CFR part 430, ‘‘Uniform Test Method for Measuring the Energy E:\FR\FM\03JYR1.SGM 03JYR1

Agencies

[Federal Register Volume 79, Number 128 (Thursday, July 3, 2014)]
[Rules and Regulations]
[Pages 37932-37937]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-15598]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

[Doc. No. AMS-FV-13-0088; FV14-985-2 FR]


Marketing Order Regulating the Handling of Spearmint Oil Produced 
in the Far West; Revision of Administrative Rules and Regulations 
Governing Issuance of Additional Allotment Base

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule revises the procedure currently prescribed for 
issuing additional allotment base for Class 1 (Scotch) and Class 3 
(Native) spearmint oil to new and existing producers under the Far West 
spearmint oil marketing order (order). The order regulates the handling 
of spearmint oil produced in the Far West and is administered locally 
by the Spearmint Oil Administrative Committee (Committee). This action 
reduces the number of new producers that are issued additional 
allotment bases each year from three to two for each class of oil; 
temporarily changes the method by which additional allotment base is 
allocated to existing producers to take into account small production 
operations; and amends the requirements for eligibility, retention, and 
transfer of additional allotment base issued to new and existing 
producers. Revising the procedure for issuing additional allotment base 
will help to ensure that new and existing spearmint oil producers have 
sufficient allotment base to be economically viable in the future.

DATES: Effective Date: July 7, 2014.

FOR FURTHER INFORMATION CONTACT: Manuel Michel or Gary D. Olson, 
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.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Order No. 985 (7 CFR part 985), as amended, 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 Orders 12866, 13563, and 13175.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform and is not intended to have retroactive effect.
    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. A 
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 final rule revises the procedure currently prescribed for 
issuing additional allotment base for Class 1 (Scotch) and Class 3 
(Native) spearmint oil to new and existing producers under the order's 
volume control provisions. This rule: (1) Reduces the number of 
allocations of additional allotment base issued to new producers each 
year from three to two for each class of oil; (2) temporarily changes 
the method by which additional allotment base is issued to existing 
producers to take into account producers whose total allotment base is 
below the size of the minimum economic enterprise (MEE) required to 
produce each class of spearmint oil; (3) provides that additional 
allotment base issued to existing producers under the revised procedure 
cannot be used to replace allotment base that has been previously 
transferred away; and (4) provides that additional allotment base 
issued under the revised procedure cannot be transferred to another 
producer for at least five years following issuance. This rule was 
recommended unanimously by the Committee at a meeting on November 6, 
2013.
    Under the order, volume control measures are authorized to regulate 
the marketing of spearmint oil. Regulation is currently effectuated 
through the issuance of allotment bases to producers, the establishment 
of annual salable quantities and allotment percentages, and the reserve 
pooling of excess production. Allotment base is each producer's 
quantified share of the spearmint oil market based on a statistical 
representation of past spearmint oil production, with accommodation for 
reasonable and normal adjustments to such base. The

[[Page 37933]]

order's provisions allow for the regulation of spearmint oil volume 
available to the market. The objective of regulation is to establish 
orderly marketing conditions for spearmint oil and to ensure that there 
is sufficient spearmint oil supply available to meet market 
requirements. Since the program's inception, volume regulation has been 
instrumental in promoting market and price stability within the 
industry.
    The order contains provisions to ensure that there is orderly 
market expansion and that new producers are able to produce and market 
spearmint oil. Section 985.53(d)(1) of the order requires the Committee 
to annually make additional allotment bases available for each class of 
oil in the amount of no more than 1 percent of the total allotment base 
for that class of oil. Fifty percent of these additional allotment 
bases shall be made available to new producers and 50 percent made 
available to existing producers.
    Section 985.53(d)(3) requires the Committee, with the approval of 
the Secretary, to establish rules and regulations to be used for 
determining the distribution of additional allotment bases. In 1982, 
these rules and regulations were established and have been subsequently 
revised on several occasions, most recently in 2003. Each time a 
revision is made, the Committee considers several important factors 
which include; the size of the MEE required for spearmint oil 
production, the applicant's ability to produce spearmint oil, the area 
where the spearmint oil will be produced, and other economic and 
marketing factors that have a direct impact on spearmint oil producers. 
The Committee reviews regularly and updates as needed, the size of the 
MEE required for spearmint oil production. Under the order, MEE is the 
minimum size of production operation that the Committee has determined 
to be economically viable for each class of spearmint oil. Between 1982 
and 1997, the Committee revised the MEE for Scotch spearmint oil 
production three times and Native spearmint oil production four times. 
As a result, the MEE increased from 1,200 pounds to 3,000 pounds for 
Scotch spearmint oil, and from 1,800 pounds to 3,400 pounds for Native 
spearmint oil.
    Section 985.153(c)(1) of the order's administrative rules and 
regulations prescribes the method by which additional allotment base is 
issued to new producers. In addition, Sec.  985.153(c)(2) prescribes 
the procedure by which additional allotment base is issued to existing 
producers. Lastly, Sec.  985.153(d) specifies certain requirements for 
spearmint oil producers who are issued additional allotment base 
pursuant to Sec.  985.153(c)(1) and (c)(2).
    The Committee met on November 6, 2013, to consider the procedures 
for issuing additional allotment base to new and existing producers and 
to make recommendations regarding the revision of those procedures. As 
required by Sec.  985.153(c)(1)(ii), the Committee first considered the 
size of the MEE required to produce each class of spearmint oil. The 
Committee determined that the MEE levels for both classes of spearmint 
oil were no longer representative and needed to be revised. The 
Committee recognized that, as production and cultural practices for 
spearmint oil have continued to change and production costs per acre 
have increased, the Committee's previously established MEE levels are 
too low and should be revised. As such, the Committee concluded that 
the MEE thresholds had increased to 5,121 pounds for Scotch spearmint 
oil and 5,812 pounds for Native spearmint oil.
    As a result of the Committee's determination that the MEE 
thresholds have increased, and given the quantity of additional 
allotment base available to new producers each year (\1/2\ of 1 percent 
of the total allotment base for each class of oil), the additional 
allotment base issued each year is only enough for two new producers, 
instead of three for each class of oil.
    The Committee's initial calculation of the total allotment base of 
Scotch spearmint oil during the 2014-2015 marketing year is 
approximately 2,089,146 pounds. One half of one percent of this amount 
is 10,445 pounds. With the MEE for Scotch spearmint oil determined to 
be 5,121 pounds, issuing allotment base to two new producers will 
require 10,242 pounds, which is within the amount of additional 
allotment base that will be available for the year.
    Likewise, the Committee's initial calculation of the total 
allotment base of Native spearmint oil during the 2014-2015 marketing 
year is approximately 2,371,350 pounds. One half of one percent of this 
amount is 11,856 pounds. With the MEE for Native spearmint oil 
determined to be 5,812 pounds, issuing allotment base to two new 
producers will require 11,624 pounds, which is within the amount of 
additional allotment base that will be available for the year.
    Based on the above information, the Committee unanimously 
recommended reducing the number of new producers that are issued 
additional allotment base each year from three to two for each class of 
oil. The Committee also recommended that the additional allotment base 
issued to new producers not be transferrable for at least five years 
following issuance. The current retention period prior to 
transferability is two years. New producers issued additional allotment 
base under this rule will continue to be required to submit evidence of 
an ability to produce and sell oil from such allotment base in the 
first marketing year following issuance of such base.
    The Committee also gave consideration to existing producers with 
regards to the size of the MEE required to produce spearmint oil and 
the allocation of additional allotment base. After analyzing the 
Committee's records, the Committee found that some existing producers 
hold allotment bases that are below the revised MEE levels. As a 
result, the Committee unanimously recommended that the additional 
allotment base that is made available each year to existing producers 
be temporarily allocated first to those eligible producers who hold 
allotment bases that are less than the MEE threshold in order to bring 
their total up to that level.
    Under this final rule, existing Scotch spearmint oil producers 
whose allotment bases are less than 5,121 pounds as of October 17, 
2012, who apply and who have the ability to produce additional 
quantities of spearmint oil, will be issued sufficient additional 
allotment base to bring them up to the MEE threshold over a three-year 
period extending through the 2016-2017 marketing year. In addition, 
existing Native spearmint oil producers who hold allotment bases of 
less than 5,812 pounds as of October 17, 2012, who apply and who have 
the ability to produce additional quantities of spearmint oil, will be 
issued sufficient additional allotment base to bring them up to the MEE 
threshold over a four-year period extending through the 2017-2018 
marketing year.
    The Committee estimates there will be 21 producers of Scotch 
spearmint oil and 30 producers of Native spearmint oil eligible for 
additional allotment base under this final rule. It is expected that 
eligible existing producers of both Scotch and Native spearmint oil 
will apply for the full amount of additional allotment base made 
available to them. If there is any unallocated additional allotment 
base remaining for either Scotch spearmint oil during the 2016-2017 
marketing year, or Native spearmint oil during the 2017-2018 marketing 
year, such amount will be distributed on a prorated basis among

[[Page 37934]]

all existing producers of each respective class of spearmint oil.
    The Committee also recommended that additional allotment base 
issued to producers under the revised procedure not be used to replace 
allotment base that has been previously transferred away by that 
producer and that additional allotment base issued under the revised 
procedure not be transferrable for at least five years following 
issuance.
    Since the establishment of the order, one of the Committee's 
primary objectives has been to help ensure that all spearmint oil 
producers are economically viable, as evidenced by holding allotment 
bases that are above the minimum economic threshold required for 
spearmint oil production. The Committee has worked to meet this 
objective by regularly determining the size of the MEE and issuing 
additional allotment base accordingly. Specifically, the Committee has 
raised the quantity of allotment base issued to new producers and 
increased the allotment bases of those existing producers who hold 
allotment bases that are below the levels that comprise the minimum 
economic threshold required for spearmint oil production.
    Another Committee objective has been to issue as many additional 
allotment bases as possible to new producers, at levels considered 
economically viable to each recipient. However, since the order limits 
the amount of additional allotment base issued to new producers, and 
because the size of the MEE required for spearmint oil production must 
be considered, the Committee has found it necessary to limit the number 
of new producers that are issued additional allotment base each year. 
Therefore, given the circumstances, the Committee believes the 
combination of these actions provides the best method available for 
optimizing the number of new producers that enter and remain in 
business, and also helps assure that there will continue to be a broad 
base of spearmint oil production.
    The procedure for issuing additional allotment base to new and 
existing producers has been modified several times since the inception 
of the order. Between 1982 and 1991, the entire Far West spearmint oil 
production area was treated as a single region for the purpose of 
issuing additional allotment base to new producers. The Committee 
determined the size and number of economic enterprises of additional 
allotment base for each class of spearmint oil to be made available to 
new producers. The additional allotment bases were then issued to new 
producers drawn from the lot of eligible individuals who had requested 
additional allotment base.
    In 1991, the order's administrative rules and regulations were 
modified through the rulemaking process to divide the production area 
into four regions for purposes of issuing additional allotment base to 
new producers. An equal number of allotment bases were issued to new 
producers in each region based on the amount of additional allotment 
base available and the MEE determined by the Committee. Based on the 
Committee's determinations, this effectively allowed one new producer 
annually from each of the four regions to be issued additional 
allotment base, for each class of spearmint oil.
    Again in 1997, rulemaking action was taken to reorganize and reduce 
the number of regions within the Far West production area from four to 
three. This revision had the effect of reducing the number of new 
producers that were issued additional allotment bases each year from 
four to three for each class of spearmint oil. The Committee 
recommended the revision with the purpose of distributing additional 
allotment bases within the production area and to increase the size of 
allotment bases issued to new producers to correspond to the size of 
the MEE. The Committee had determined that the size of the MEE for 
spearmint oil production had increased to a point where there was 
insufficient additional allotment base to issue economically sufficient 
quantities of base to new producers in all four regions. By 
reorganizing and reducing the number of regions to three, there was 
adequate additional allotment base to issue base to three new producers 
of each class of spearmint oil. In reaching its recommendation, the 
Committee weighed the importance of issuing as many additional 
allotment bases as possible against the need to issue such bases at 
levels considered economically viable to each recipient.
    In 2000, the three regions of the Far West production area were 
further reduced to two regions through the rulemaking process. However, 
the number of new producers issued additional allotment bases each year 
was maintained at three for each class of spearmint oil. As before, the 
Committee recommended the revision with the purpose of distributing 
additional allotment bases to new spearmint oil producers throughout 
the production area.
    This final rule reduces the number of new producers issued 
additional allotment base each year from three to two for each class of 
spearmint oil and is consistent with previous rulemaking. The 
Committee's purpose, previously and now, is to ensure that a maximum 
number of eligible new producers are issued additional allotment bases 
each year at levels that are economically viable to produce each class 
of spearmint oil.
    Consistent with actions taken in the past, the Committee made its 
recommendation after carefully considering information available from 
its management records, Federal and State government sources, and 
industry participants. The Committee also considered the size of the 
MEE required for the production of each class of spearmint oil, 
historical statistics relating to the locations of the producers 
applying for the annual additional allotment base, and other factors, 
such as number of producers in the regulated production area and the 
amount of allotment base held by such producers. Based on its review, 
the Committee believes that the revision effectuated by this final rule 
is the most effective option available in order to continue fulfilling 
the order's objectives.

Final 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 action 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 
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 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. In addition, there are approximately 36 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

[[Page 37935]]

entities. Most of the handlers are large corporations involved in the 
manufacture and trade of essential oils and the products of essential 
oils in the international market. In addition, the Committee estimates 
that 19 of the 36 Scotch spearmint oil producers and 29 of the 91 
Native spearmint oil producers could be classified as small entities 
under the SBA definition. Thus, many 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 with 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.
    Small spearmint oil producers generally are not as extensively 
diversified as larger ones and as such, are more at risk from market 
fluctuations. Such small producers generally need to market their 
entire annual allotment and do not have the luxury of having other 
crops to cushion seasons with poor spearmint oil returns. Conversely, 
large diversified producers have the potential to endure one or more 
seasons of poor spearmint oil markets because income from alternate 
crops could support the operation for a period of time. Being 
reasonably assured of a stable market and price provides small 
producing entities with the ability to maintain sufficient cash flow 
and to meet annual expenses. Thus, the market and price stability 
provided by the order potentially benefits small producers more than 
the large producers.
    This final rule revises the procedure for issuing additional 
allotment base by reducing the number of additional allotment bases 
issued to new producers from three to two, for each class of spearmint 
oil. In addition, this rule increases the required retention period 
prior to transferability of additional allotment base issued to new 
producers from two years to five years following issuance.
    This final rule also temporarily changes the procedures for the 
allocation of additional allotment base by class to take into account 
existing producers that are below the MEE threshold. This revision is 
intended to help existing small spearmint oil producers by increasing 
their individual allotment bases to a level that approximates the MEE 
required for spearmint oil production. The action will help ensure that 
small existing spearmint oil producers have sufficient allotment base 
to remain economically viable in the future. Also, this rule provides 
that additional allotment base issued to existing small producers 
cannot be used to replace allotment base which has been previously 
transferred away. Finally, this rule provides that additional allotment 
base issued under the revised procedure cannot be transferred for at 
least five years following issuance. The revised procedure by which 
additional allotment base is allocated to existing producers will be in 
effect temporarily through May 31, 2017, for Scotch spearmint oil, and 
May 31, 2018, for Native spearmint oil, or until all producers who are 
eligible and apply have received enough allotment base to bring them up 
to the respective MEE level for each class of oil. Authority for this 
action is provided in Sec.  985.53(d)(3) of the order.
    At the meeting on November 6, 2013, the Committee discussed the 
impact of the recommended revisions on handlers and producers in terms 
of costs and returns. Under the order, the Committee is responsible for 
determining how much MEE is required to produce each class of spearmint 
oil. The Committee determined the MEE size for the 2014-2015 and 
subsequent marketing years to be 5,121 pounds for Scotch spearmint oil 
and 5,812 pounds for Native spearmint oil. Taking this information into 
consideration, the Committee calculated that the number of new 
producers issued additional allotment bases each year would need to be 
reduced from three to two for each class of oil. While this action 
reduces the number of new producers issued additional allotment bases 
each year, each new producer will have a larger initial allotment base, 
thereby enhancing their long term economic viability in the spearmint 
oil industry.
    Additionally, the Committee estimates there are 21 producers of 
Scotch spearmint oil whose allotment bases are below the MEE threshold 
and it will take a total of 21,913 pounds of additional allotment base 
to raise these producers' allotment bases up to the Scotch spearmint 
oil MEE threshold. Likewise, the Committee estimates there are 30 
producers of Native spearmint oil whose allotment bases are below the 
MEE level and that it will take a total of 43,456 pounds of additional 
allotment base to raise these producers' allotment bases to the size of 
the MEE required to make Native spearmint oil.
    While the amount of additional allotment base necessary to bring 
all spearmint oil producers' allotment bases up to the MEE threshold is 
a fraction of the total allotment base, the benefits of this final rule 
will be significant to these small producers, as it may contribute to 
their potential economic viability well into the future. Without this 
revision, small spearmint oil producers may have been at a greater risk 
of not being able to continue to produce spearmint oil. Therefore, the 
benefits of this rule are expected to be greater for small producers 
than for larger entities.
    The Committee discussed several alternatives to the recommendations 
contained in this rule including not making any changes to the 
procedures as currently prescribed in the order. However, the Committee 
determined that not taking the MEE threshold into consideration when 
issuing additional base would have negatively impacted new and existing 
small producers. The Committee concluded that the most effective option 
was to revise the procedure for issuing additional allotment base in 
order to improve the economic viability of new and existing producers 
whose allotment bases are below the MEE threshold.
    The Committee also considered alternative MEE thresholds before 
deciding on the levels that were most representative of the production 
economics for each class of spearmint oil. The Committee believes the 
size of the MEE determined for the production of each class of 
spearmint oil is accurate and appropriate given the information 
available.
    In addition, the Committee considered the length of time that new 
and existing producers should be expected to hold onto additional 
allotment base issued under the revised procedure before such allotment 
base is able to be transferred to another producer. The Committee 
considered other retention periods other than the five year period 
recommended, including maintaining the two year retention period. 
However, it concluded that a five year retention requirement prior to 
transfer of additional allotment base issued under the revised 
procedure was a sufficient period for new and existing producers to 
demonstrate

[[Page 37936]]

viability in spearmint oil production and should not present an undue 
hardship on the producers being issued the additional allotment base.
    In its deliberations, the Committee considered all available 
information, including its determination of the size of the MEE 
required for spearmint oil production, historical statistics relating 
to the locations of the producers applying for the annual additional 
allotment base, and other factors such as the number of producers in 
the regulated production area and the amount of allotment base held by 
such producers. Based on those determinations, the full eight-member 
Committee unanimously recommended revising the procedure for issuing 
additional allotment base to new and existing spearmint oil producers 
for each class of oil.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements is 
currently approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178, Generic Vegetable and Specialty Crops. Upon 
publication of this final rule, a Justification of Change will be 
submitted to make minor modifications and updates to the appearance of 
two forms and adjust the burden, accordingly.
    This final rule revises the procedure currently prescribed for 
issuing additional allotment base for Class 1 (Scotch) and Class 3 
(Native) spearmint oil to new and existing producers under the Far West 
spearmint oil marketing order. Accordingly, this action will not impose 
any additional reporting or recordkeeping requirements on either small 
or large spearmint oil producers or 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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant federal rules that duplicate, overlap or 
conflict with this final rule.
    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.
    In addition, the Committee meetings were widely publicized 
throughout the spearmint oil industry and all interested persons were 
invited to attend the meetings and participate in Committee 
deliberations on all issues. Like all Committee meetings, the March 6, 
2013, and the November 6, 2013, meetings were public meetings and all 
entities, both large and small, were able to express views on this 
issue.
    A proposed rule concerning this action was published in the Federal 
Register on May 6, 2014 (79 FR 25710). A copy of the rule was provided 
to Committee staff, which in turn made it available to all Far West 
spearmint oil producers, handlers, and interested persons. Finally, the 
rule was made available through the internet by USDA and the Office of 
the Federal Register. A 15-day comment period ending May 21, 2014, 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/MarketingOrdersSmallBusinessGuide. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION section of 
this document.
    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.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because applications for additional 
allotment base are made available in June and the drawing for new 
spearmint oil producers is held in August. In addition, existing 
producers need to be notified of the revision to the issuance of 
additional allotment base so they may plan their plantings accordingly. 
Further, producers are aware of this rule, which was recommended at a 
public meeting. Also, a 15-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.

    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. In Sec.  985.153:
0
a. Redesignate paragraphs (c)(1)(ii) and (c)(2)(ii) as (c)(1)(iii) and 
(c)(2)(iv) respectively;
0
b. Add new paragraphs (c)(1)(ii), (c)(2)(ii) and (c)(2)(iii);
0
c. Revise newly redesignated paragraphs (c)(1)(iii) and (c)(2)(iv); and
0
Revise paragraph (d).
    The additions and revisions read as follows:


Sec.  985.153  Issuance of additional allotment base to new and 
existing producers.

* * * * *
    (c) * * *
    (1) * * *
    (ii) The Committee shall review all requests from new producers for 
additional allotment base made available pursuant to Sec.  
985.53(d)(1).
    (iii) Each year, the Committee shall determine the size of the 
minimum economic enterprise required to produce each class of oil. The 
Committee shall thereafter calculate the number of new producers who 
will receive allotment base under this section for each class of oil. 
The Committee shall include that information in its announcements to 
new producers in each region informing them when to submit requests for 
allotment base. The Committee shall determine whether the new producers 
requesting additional base have the ability to produce spearmint oil. 
The names of all eligible new producers from each region shall be 
placed in separate lots per class of oil. For each class of oil, 
separate drawings shall be held from a list of all applicants from 
Region A and from a list of all applicants from Region B. If, in any 
marketing year, there are no requests for additional base in a class of 
oil from eligible new producers in a region, such unallocated 
additional allotment base shall be issued to an eligible new producer 
whose name is selected by drawing from a list containing the names of 
all remaining eligible new producers from the other region for that 
class of oil. The Committee shall immediately notify each new producer 
whose name was drawn and issue that producer an allotment base in the 
appropriate amount. Allotment base issued to new producers under this 
section shall not be transferred for at least five years following 
issuance.

[[Page 37937]]

    (2) * * *
    (ii) Class 1 base. With respect to the issuance of additional Class 
1 allotment base to existing producers for the 2014-2015 through the 
2016-2017 marketing years, existing producers with less than 5,121 
pounds of allotment base as of October 17, 2012, who request additional 
allotment base and who have the ability to produce additional 
quantities of Class 1 spearmint oil, shall be issued additional 
allotment base sufficient to bring them up to a level not to exceed 
5,121 pounds: Provided, That such additional Class 1 allotment base 
shall be allocated to eligible producers on a pro-rata basis from 
available additional Class 1 allotment base: Provided further, That 
additional allotment base shall not be issued to any person if such 
additional allotment base would replace all or part of an allotment 
base that such person has previously transferred to another producer. 
Additional allotment base in excess of the amount needed to bring 
eligible producers up to 5,121 pounds of Class 1 allotment base shall 
be distributed on a prorated basis among all existing producers who 
apply and who have the ability to produce additional quantities of 
spearmint oil.
    (iii) Class 3 base. With respect to the issuance of additional 
Class 3 allotment base for existing producers for the 2014-2015 through 
the 2017-2018 marketing years, existing producers with less than 5,812 
pounds of allotment base as of October 17, 2012, who request additional 
allotment base and who have the ability to produce additional 
quantities of Class 3 spearmint oil, shall be issued additional 
allotment base sufficient to bring them up to a level not to exceed 
5,812 pounds: Provided, That such additional Class 3 allotment base 
shall be allocated to eligible producers on a pro-rata basis from 
available additional Class 3 allotment base: Provided further, That 
additional allotment base shall not be issued to any person if such 
additional allotment base would replace all or part of an allotment 
base that such person has previously transferred to another producer. 
Additional allotment base in excess of the amount needed to bring 
eligible producers up to 5,812 pounds of Class 3 allotment base shall 
be distributed on a prorated basis among all existing producers who 
apply and who have the ability to produce additional quantities of 
spearmint oil.
    (iv) For each marketing year after 2016-2017 for Class 1 oil and 
2017-2018 for Class 3 oil, each existing producer of a class of 
spearmint oil who requests additional allotment base, and who has the 
ability to produce additional quantities of that class of spearmint 
oil, shall be eligible to receive a share of the additional allotment 
base issued for that class of oil. Additional allotment base issued by 
the Committee for a class of oil shall be distributed on a prorated 
basis among the eligible producers for that class of oil. The Committee 
shall immediately notify each producer who is to receive additional 
allotment base by issuing that producer an allotment base in the 
appropriate amount. Allotment base issued to existing producers under 
this section shall not be transferred for at least two years following 
issuance, except that additional allotment base allocated pursuant to 
paragraph (c)(2)(ii) and (c)(2)(iii) of this section shall not be 
transferred for at least five years following issuance.
    (d) The person receiving additional allotment base pursuant to this 
section shall submit to the Committee evidence of an ability to produce 
and sell oil from such allotment base in the first marketing year 
following issuance of such base.

    Dated: June 27, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-15598 Filed 7-2-14; 8:45 am]
BILLING CODE 3410-02-P