Federal Register / Vol. 83, No. 142 / Tuesday, July 24, 2018 / Rules and Regulations 34935 

PART 185—PROGRAM FRAUD CIVIL 

REMEDIES: CIVIL MONETARY 

PENALTY INFLATION ADJUSTMENT 

■ 1. The authority citation for part 185 

continues to read: 

Authority: 28 U.S.C. 2461 note. 

§ 185.103 [Amended] 

■ 2. Section 185.103 is amended as 

follows: 

■ a. In paragraph (a) introductory text, 

revise ‘‘$10,781’’ to read ‘‘$11,181’’. 

■ b. In paragraph (f)(2), revise ‘‘$10,781’’ 

to read ‘‘$11,181’’. 

[FR Doc. 2018–15764 Filed 7–23–18; 8:45 am] 

BILLING CODE 6325–48–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 985 

[Doc. No. AMS–SC–17–0073; SC18–985–1 

FR] 

Marketing Order Regulating the 

Handling of Spearmint Oil Produced in 

the Far West; Salable Quantities and 

Allotment Percentages for the 2018– 

2019 Marketing Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule implements a 

recommendation from the Far West 

Spearmint Oil Administrative 

Committee (Committee) to establish 

salable quantities and allotment 

percentages of Class 1 (Scotch) and 

Class 3 (Native) spearmint oil for the 

2018–2019 marketing year. This rule 

also removes references to past volume 

regulation no longer in effect. 

DATES: Effective August 23, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Barry Broadbent, Marketing Specialist, 

or Gary Olson, Regional Director, 

Northwest Marketing Field Office, 

Marketing Order and Agreement 

Division, Specialty Crops Program, 

AMS, USDA; Telephone: (503) 326– 

2724, Fax: (503) 326–7440, or Email: 

Barry.Broadbent@ams.usda.gov or 

GaryD.Olson@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Richard Lower, 

Marketing Order and Agreement 

Division, Specialty Crops Program, 

AMS, USDA, 1400 Independence 

Avenue SW, STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720– 

2491, Fax: (202) 720–8938, or Email: 

Richard.Lower@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This 

action, pursuant to 5 U.S.C. 553, 

amends regulations issued to carry out 

a marketing order as defined in 7 CFR 

900.2(j). 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. Part 985 (referred to as 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 

Committee locally administers the 

Order and is comprised of spearmint oil 

producers operating within the area of 

production, and a public member. 

The Department of Agriculture 

(USDA) is issuing this rule in 

conformance with Executive Orders 

13563 and 13175. This rule falls within 

a category of regulatory actions that the 

Office of Management and Budget 

(OMB) exempted from Executive Order 

12866 review. Additionally, because 

this rule does not meet the definition of 

a significant regulatory action, it does 

not trigger the requirements contained 

in Executive Order 13771. See OMB’s 

Memorandum titled ‘‘Interim Guidance 

Implementing Section 2 of the Executive 

Order of January 30, 2017, titled 

‘Reducing Regulation and Controlling 

Regulatory Costs’ ’’ (February 2, 2017). 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. Under the Order now in effect, 

salable quantities and allotment 

percentages may be established for 

classes of spearmint oil produced in the 

Far West. This rule establishes 

quantities and percentages for Class 1 

(Scotch) and Class 3 (Native) spearmint 

oil for the 2018–2019 marketing year, 

which began on June 1, 2018. 

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. 

Pursuant to §§ 985.50, 985.51, and 

985.52, the Order requires the 

Committee to meet each year to consider 

supply and demand of spearmint oil 

and a marketing policy for the ensuing 

marketing year. When such 

considerations indicate a need to 

establish or maintain stable market 

conditions through volume regulation, 

the Committee recommends salable 

quantity limitations and producer 

allotments to regulate the quantity of 

Far West spearmint oil available to the 

market. 

According to § 985.12, ‘‘salable 

quantity’’ is the total quantity of each 

class of oil that handlers may purchase 

from, or handle on behalf of, producers 

during a given marketing year. The total 

industry allotment base is the aggregate 

of all allotment bases held individually 

by producers as prescribed under 

§ 985.53(d)(1). The total allotment base 

is generally revised each year on June 1 

due to producer base being lost because 

of the bona fide effort production 

provision of § 985.53(e). The allotment 

percentage for each class of spearmint 

oil is derived by dividing the salable 

quantity by the total industry allotment 

base for that same class of oil. The 

allotment percentage is the percentage 

used to calculate each producer’s 

prorated share of the salable quantity or 

their ‘‘annual allotment,’’ as defined in 

§ 985.13. 

The Committee met on October 25, 

2017, to consider its marketing policy 

for the 2018–2019 marketing year. At 

that meeting, the Committee determined 

that, based on overall market and 

supply conditions, volume regulation 

for Classes 1 and 3 (Scotch and Native, 

respectively) spearmint oil is necessary. 

With a unanimous vote, the Committee 

recommended the establishment of a 

salable quantity and allotment 

percentage for Class 1 (Scotch) and 

Class 3 (Native) spearmint oil of 760,660 

pounds and 35 percent, and 1,307,947 

pounds and 53 percent, respectively. 

The Committee also unanimously set its 

2018–2019 marketing year trade 

demand estimate for Far West Scotch 

spearmint oil at 850,000 pounds, and for 

Far West Native spearmint oil at 

1,306,605 pounds. Salable quantities 

and allotment percentages have been 

placed into effect each season since the 

Order’s inception in 1980. 

Class 1 (Scotch) Spearmint Oil 

The Committee’s recommended 2018– 

2019 marketing year salable quantity 

and allotment percentage for Far West 

Scotch spearmint oil represent a 

decrease from the previous year’s 

volume restrictions. The 2018–2019 

marketing year salable quantity of 

760,660 pounds is 13,985 pounds less 

than the 2017–2018 salable quantity of 


jstallworth on DSKBBY8HB2PROD with RULES
34936 Federal Register / Vol. 83, No. 142 / Tuesday, July 24, 2018 / Rules and Regulations 

774,645 pounds. The allotment 

percentage, at 35 percent for the 2018– 

2019 marketing year, is slightly less 

than the 36 percent in effect the 

previous year. The total estimated 

allotment base for the coming marketing 

year is estimated at 2,173,315 pounds. 

This figure represents a one-percent 

increase over the 2017–2018 total 

allotment base of 2,151,797. 

The Committee considered several 

factors in making its recommendation, 

including the current and projected 

supply, estimated future demand, 

production costs, and producer prices. 

The Committee’s recommendations also 

account for declining acreage of Far 

West Scotch spearmint oil, decreasing 

consumer demand, existing carry-in and 

reserve pool volume, and increasing 

production in competing markets. 

According to the Committee, as costs 

of production have increased, many 

producers have forgone new plantings. 

This has resulted in a significant decline 

in production of Far West Scotch 

spearmint oil over past years. 

Production has decreased from 

1,229,258 pounds produced in 2015, to 

1,113,346 pounds produced in 2016 

and, finally, to an estimated 817,857 

pounds for 2017. 

Industry reports also indicate that the 

relatively low trade demand for Far 

West spearmint oil is the result of 

decreased consumer demand for 

spearmint-flavored products, especially 

chewing gum in China and India. Far 

West Scotch spearmint oil sales have 

averaged 941,140 pounds per year over 

the last three years and 966,875 pounds 

over the last five years. For the 2017– 

2018 crop, the Committee estimated 

trade demand at 800,000 pounds. 

In addition, increasing production of 

spearmint oil in competing markets, 

most notably Canada and the U.S. 

Midwest, has also put downward 

pressure on the Far West Scotch market. 

Given the general decline in demand 

and anticipated market conditions for 

the coming year, the Committee decided 

it was prudent to anticipate 2018–2019 

trade demand at 850,000 pounds. 

Should the established volume 

regulation levels prove insufficient to 

adequately supply the market, the 

Committee has the authority to 

recommend intra-seasonal increases, as 

has been implemented in previous 

marketing years. 

The Committee calculated the 

minimum salable quantity of Far West 

Scotch spearmint oil that will be 

required during the 2018–2019 

marketing year by subtracting the 

estimated salable carry-in on June 1, 

2018, (215,757) from the estimated trade 

demand (850,000), resulting in 634,243 

pounds. This salable quantity represents 

the minimum amount of Scotch 

spearmint oil that the Committee 

expects to be needed to satisfy estimated 

demand for the coming year. The 

Committee then factored in a projected 

2019–2020 carry-in of 126,417 pounds 

to arrive at a recommended 2018–2019 

salable quantity of 760,660 pounds. 

The salable quantity of 760,660 

pounds, combined with an estimated 

215,757 pounds of salable quantity 

(salable carry-in) from the previous year, 

yields a total available supply of 

976,417 pounds Far West Scotch 

spearmint oil for the 2018–2019 

marketing year. This amount will 

adequately supply the Committee’s 

estimated market demand of 850,000 

pounds for the 2018–2019 marketing 

year and is expected to result in a 

desired 2019–2020 carry-in of 126,417 

pounds. 

Salable carry-in is the primary 

measure of excess spearmint oil supply 

under the Order, as it represents 

overproduction in prior years that is 

currently available to the market 

without restriction. Under volume 

regulation, spearmint oil that is 

designated as salable continues to be 

available to the market until it is sold 

and may be marketed at any time at the 

discretion of the owner. Salable 

quantities established under volume 

regulation over the last three seasons 

have exceeded sales, leading to a 

gradual build of Far West Scotch 

spearmint oil salable carry-in. 

The Committee estimates that there 

will be 215,757 pounds of salable carryin of Scotch spearmint oil on June 1, 

2018. If current market conditions are 

maintained and the Committee’s 

projections are correct, salable carry-in 

will decrease to 126,417 pounds at the 

beginning of the 2019–2020 marketing 

year. This level is slightly below the 

quantity that the Committee considers 

favorable (generally 150,000 pounds). 

However, the Committee believes that 

this lower salable carry-in will be 

manageable given the expected 

production level of Far West Scotch 

spearmint oil in the current marketing 

year and the quantity of oil held in the 

reserve pool. 

Spearmint oil held in reserve is oil 

that has been produced in excess of a 

producer’s marketing year allotment. Oil 

held in the reserve pool is a less reliable 

indicator of excess supply as it is not 

available to the market in the current 

marketing year without an increase in 

the salable quantity and allotment 

percentage. 

Far West Scotch spearmint oil held in 

the reserve pool, which was completely 

depleted at the beginning of the 2014– 

2015 marketing year, has also been 

gradually increasing over the past four 

years. The Committee reported that 

there were 71,088 pounds of Far West 

Scotch spearmint oil held in the reserve 

pool as of May 31, 2017. The Committee 

estimates the reserve pool will increase 

to 114,274 pounds by May 31, 2018. 

This quantity of reserve pool oil should 

be an adequate buffer to supply the 

market, if necessary, if the industry 

experiences an unexpected increase in 

demand. 

The Committee recommended an 

allotment percentage of 35 percent for 

the 2018–2019 marketing year. During 

its October 25, 2017, meeting, the 

Committee calculated an initial 

allotment percentage by dividing the 

minimum required salable quantity 

(634,243 pounds) by the total estimated 

allotment base (2,173,315 pounds), 

resulting in 29.2 percent. However, 

producers and handlers at the meeting 

indicated that the computed percentage 

(29.2 percent) might not adequately 

supply the potential 2018–2019 Scotch 

spearmint oil market demand or may 

result in inadequate carry-in for the 

subsequent marketing year. After 

deliberation, the Committee increased 

the targeted allotment percentage to 35 

percent. The total estimated allotment 

base (2,173,315 pounds) for the 2018– 

2019 marketing year multiplied by the 

recommended salable allotment 

percentage (35 percent) yields 760,660 

pounds, which is also the recommended 

salable quantity for the 2018–2019 

marketing year. 

The 2018–2019 marketing year 

computational data for the Committee’s 

recommendations is further outlined 

below. 

(A) Estimated carry-in of Scotch 

spearmint oil on June 1, 2018: 215,757 

pounds. This figure is the difference 

between the 2017–2018 marketing year 

total available supply of 1,015,757 

pounds and the 2017–2018 marketing 

year estimated trade demand of 800,000 

pounds. 

(B) Estimated trade demand of Far 

West Scotch spearmint oil for the 2018– 

2019 marketing year: 850,000 pounds. 

This figure was established at the 

Committee meeting held on October 25, 

2017. 

(C) Salable quantity of Scotch 

spearmint oil required from the 2018– 

2019 marketing year production: 

634,243 pounds. This figure is the 

difference between the estimated 2018– 

2019 marketing year trade demand 

(850,000 pounds) and the estimated 

carry-in on June 1, 2018 (215,757 

pounds). This salable quantity 

represents the minimum amount of 

Scotch spearmint oil production that 


jstallworth on DSKBBY8HB2PROD with RULES
Federal Register / Vol. 83, No. 142 / Tuesday, July 24, 2018 / Rules and Regulations 34937 

may be needed to satisfy estimated 

demand for the coming year. 

(D) Total estimated allotment base of 

Scotch spearmint oil for the 2018–2019 

marketing year: 2,173,315 pounds. This 

figure represents a one-percent increase 

over the 2017–2018 marketing year total 

actual allotment base of 2,151,797 

pounds as prescribed in § 985.53(d)(1). 

The one-percent increase equals 21,518 

pounds of Scotch spearmint oil. This 

total estimated allotment base is 

generally revised each year on June 1 in 

accordance with § 985.53(e). 

(E) Computed Scotch spearmint oil 

allotment percentage for the 2018–2019 

marketing year: 29.2 percent. This 

percentage is computed by dividing the 

minimum required salable quantity 

(634,243 pounds) by the total estimated 

allotment base (2,173,315 pounds). 

(F) Recommended Scotch spearmint 

oil allotment percentage for the 2018– 

2019 marketing year: 35 percent. This is 

the Committee’s recommendation and is 

based on the computed allotment 

percentage (29.2 percent) and input 

from producers and handlers at the 

October 25, 2017, meeting. The 

recommended 35 percent allotment 

percentage reflects the Committee’s 

belief that the computed percentage 

(29.2 percent) may not adequately 

supply anticipated 2018–2019 Scotch 

spearmint oil market demand. 

(G) Recommended Scotch spearmint 

oil salable quantity for the 2018–2019 

marketing year: 760,660 pounds. This 

figure is the product of the 

recommended salable allotment 

percentage (35 percent) and the total 

estimated allotment base (2,173,315 

pounds) for the 2018–2019 marketing 

year. 

(H) Estimated total available supply 

of Scotch spearmint oil for the 2018– 

2019 marketing year: 976,417 pounds. 

This figure is the sum of the 2018–2019 

recommended salable quantity (760,660 

pounds) and the estimated carry-in on 

June 1, 2018 (215,757 pounds). 

For the reasons stated above, the 

Committee believes that the 

recommended salable quantity and 

allotment percentage for Scotch 

spearmint oil will adequately meet 

demand, will result in a reasonable 

carry-in for the following year, and will 

contribute to orderly marketing 

conditions as intended under the Order. 

Class 3 (Native) Spearmint Oil 

The Committee recommended a 

Native spearmint oil salable quantity of 

1,307,947 pounds and an allotment 

percentage of 53 percent for the 2018– 

2019 marketing year. These figures are, 

respectively, 206,955 pounds and 9 

percentage points less than the final 

levels established for the 2017–2018 

marketing year after an intra-seasonal 

increase. 

The Committee utilized handlers’ 

anticipated sales estimates of Far West 

Native spearmint oil for the coming 

year, historical and current Native 

spearmint oil production, inventory 

statistics, and international market data 

obtained from consultants for the 

spearmint oil industry to arrive at these 

recommendations. 

The Committee anticipates that 2017 

production will total 1,462,976 pounds, 

down from 1,694,684 pounds in 2016. 

Committee figures show that declining 

production is the result of a 1,107-acre 

year-over-year reduction in total Native 

spearmint acres, and an average yield 

per acre drop from 166.2 pounds per 

acre in 2016 to 160.9 pounds per acre 

in 2017. Conversely, sales of Native 

spearmint oil have been increasing at 

about a 4 percent rate from the 2015– 

2016 season through the 2017–2018 

marketing year. 

The Committee expects that 57,968 

pounds of salable Native spearmint oil 

from prior years will be carried into the 

2018–2019 marketing year. This amount 

is down from the estimated 143,011 

pounds of salable Native spearmint oil 

carried into the 2017–2018 marketing 

year, and 142,657 pounds carried into 

the 2016–2017 marketing year. 

Further, the Committee estimates that 

there will be 1,237,237 pounds of Native 

spearmint oil in the reserve pool at the 

beginning of the 2018–2019 marketing 

year. This figure is 142,578 pounds 

higher than the quantity of reserve pool 

oil held by producers the previous year 

and is in line with the gradual increase 

in reserves over the past three marketing 

years. 

Exports of Far West Native spearmint 

oil, as of July 2017, are above their fiveyear average. Canada, India, and China 

are the largest destination markets for 

Far West Native spearmint oil exports. 

As a common practice, large end users 

often buy spearmint oil to build reserve 

stocks when prices are low as a hedge 

against future price increases. End users 

of Native spearmint oil are expected to 

continue to rely on Far West production 

as their main source of high quality 

Native spearmint oil, but demand may 

be at lower quantities moving forward 

in response to long-term market factors. 

A sharp spike in demand for Far West 

Native spearmint oil was experienced 

by handlers late in the 2017–2018 

marketing year, spurred by the 

popularity of a new product in the 

market. This sharp spike in demand 

caused the remaining available 2017– 

2018 salable quantity of Native oil to be 

depleted. 

The Committee estimates the 2018– 

2019 marketing year Native spearmint 

oil trade demand to be 1,306,605 

pounds. This figure is based on input 

provided by producers at six Native 

spearmint oil production area meetings 

held in mid-October 2017, as well as 

estimates provided by handlers and 

other meeting participants at the 

October 25, 2017, meeting. This figure 

represents an increase of 56,605 pounds 

from the previous year’s initial estimate. 

The average estimated trade demand for 

Native spearmint oil from the six 

production area grower’s meetings was 

1,349,379 pounds, whereas the 

handlers’ estimates ranged from 

1,350,000 to 1,500,000 pounds. The 

average of Far West Native spearmint oil 

sales over the last three years is also 

1,305,605 pounds. However, the 

quantity marketed over the most recent 

full marketing year, 2016–2017, was 

1,287,691 pounds. The Committee chose 

to be slightly conservative in the 

establishment of its trade demand 

estimate for the 2018–2019 marketing 

year to avoid oversupplying the market. 

The estimated 2018–2019 carry-in of 

57,968 pounds of Native spearmint oil 

plus the recommended salable quantity 

of 1,307,947 pounds results in an 

estimated total available supply of 

1,365,915 pounds of Native spearmint 

oil during the 2018–2019 marketing 

year. With the corresponding estimated 

trade demand of 1,306,605 pounds, the 

Committee projects that 59,310 pounds 

of Native spearmint oil will be carried 

into the 2019–2020 marketing year, 

resulting in a slight increase of 1,342 

pounds year-over-year. The Committee 

estimates that there will be 1,237,237 

pounds of Native spearmint oil held in 

the reserve pool at the beginning of the 

2018–2019 marketing year. Should the 

industry experience an unexpected 

increase in trade demand, Native 

spearmint oil in the reserve pool could 

be released to satisfy that demand. 

The Committee recommended an 

allotment percentage of 53 percent for 

the 2018–2019 marketing year. During 

its October 25, 2017, meeting, the 

Committee calculated an initial 

allotment percentage by dividing the 

minimum required salable quantity 

(1,248,637 pounds) by the total 

estimated allotment base (2,467,825 

pounds), resulting in 50.6 percent. 

However, producers and handlers at the 

meeting expressed that the computed 

percentage (50.6 percent) may not 

adequately supply the potential 2018– 

2019 Native spearmint oil market 

demand or result in adequate carry-in 

for the subsequent marketing year. After 

deliberation, the Committee increased 

the recommended allotment percentage 


jstallworth on DSKBBY8HB2PROD with RULES
34938 Federal Register / Vol. 83, No. 142 / Tuesday, July 24, 2018 / Rules and Regulations 

to 53 percent. The total estimated 

allotment base (2,467,825 pounds) for 

the 2018–2019 marketing year 

multiplied by the recommended salable 

allotment percentage (53 percent) yields 

1,307,947 pounds, which is also the 

recommended salable quantity for the 

upcoming marketing year. 

The 2018–2019 marketing year 

computational data for the Committee’s 

recommendations is further outlined 

below. 

(A) Estimated carry-in of Native 

spearmint oil on June 1, 2018: 57,968 

pounds. This figure is the difference 

between the revised 2017–2018 

marketing year total available supply of 

1,657,968 pounds and the revised 2017– 

2018 marketing year estimated trade 

demand of 1,600,000 pounds. 

(B) Estimated trade demand of Native 

spearmint oil for the 2018–2019 

marketing year: 1,306,605 pounds. This 

estimate was established by the 

Committee at the October 25, 2017, 

meeting. 

(C) Salable quantity of Native 

spearmint oil required from the 2018– 

2019 marketing year production: 

1,248,637 pounds. This figure is the 

difference between the estimated 2018– 

2019 marketing year estimated trade 

demand (1,306,605 pounds) and the 

estimated carry-in on June 1, 2018 

(57,968 pounds). This is the minimum 

amount of Native spearmint oil that the 

Committee believes will be required to 

meet the anticipated 2018–2019 

marketing year trade demand. 

(D) Total estimated allotment base of 

Native spearmint oil for the 2018–2019 

marketing year: 2,467,825 pounds. This 

figure represents a one-percent increase 

over the 2017–2018 total actual 

allotment base of 2,443,391 pounds as 

prescribed in § 985.53(d)(1). The onepercent increase equals 24,434 pounds 

of Native spearmint oil. This estimate is 

generally revised each year on June 1, 

due to producer base being lost because 

of the bona fide effort production 

provisions of § 985.53(e). 

(E) Computed Native spearmint oil 

allotment percentage for the 2018–2019 

marketing year: 50.6 percent. This 

percentage is calculated by dividing the 

required salable quantity (1,248,637 

pounds) by the total estimated allotment 

base (2,467,825 pounds) for the 2018– 

2019 marketing year. 

(F) Recommended Native spearmint 

oil allotment percentage for the 2018– 

2019 marketing year: 53 percent. This is 

the Committee’s recommendation based 

on the computed allotment percentage 

(50.6 percent) and input from producers 

and handlers at the October 25, 2017, 

meeting. The recommended 53 percent 

allotment percentage is also based on 

the Committee’s belief that the 

computed percentage (50.6 percent) may 

not adequately supply the potential 

market for Native spearmint oil in the 

2018–2019 marketing year. 

(G) Recommended Native spearmint 

oil 2018–2019 marketing year salable 

quantity: 1,307,947 pounds. This figure 

is the product of the recommended 

allotment percentage (53 percent) and 

the total estimated allotment base 

(2,467,825 pounds). After completely 

depleting the remaining salable quantity 

for the 2017–2018 marketing year, to 

prevent this from happening again, the 

Committee recommended that the 2018– 

2019 salable quantity be set at a level 

slightly higher than the estimated trade 

demand for the same year (1,306,605 

pounds). 

(H) Estimated available supply of 

Native spearmint oil for the 2018–2019 

marketing year: 1,365,915 pounds. This 

figure is the sum of the 2018–2019 

recommended salable quantity 

(1,307,947 pounds) and the estimated 

carry-in on June 1, 2018 (57,968 

pounds). 

The Committee’s recommended 

Scotch and Native spearmint oil salable 

quantities and allotment percentages of 

760,660 pounds and 35 percent, and 

1,307,947 pounds and 53 percent, 

respectively, match the available supply 

of each class of spearmint oil to the 

estimated demand of each, thus 

avoiding extreme fluctuations in 

inventories and prices. This volume 

regulation final rule is similar to 

regulations issued in prior seasons. 

The salable quantities established 

herein are not expected to cause a 

shortage of spearmint oil supplies. Any 

unanticipated or additional market 

demand for spearmint oil which may 

develop during the marketing year 

could be satisfied by an intra-seasonal 

increase in the salable quantity. The 

Order contains a provision in § 985.51 

for intra-seasonal increases to allow the 

Committee the flexibility to respond 

quickly to changing market conditions. 

Under volume regulation, producers 

who produce more than their annual 

allotments during the marketing year 

may transfer such excess spearmint oil 

to producers who have produced less 

than their annual allotment. In addition, 

on December 1 of each year, producers 

who have not transferred their excess 

spearmint oil to other producers must 

place their excess spearmint oil 

production into the reserve pool to be 

released in the future in accordance 

with market needs and under the 

Committee’s direction. 

In conjunction with the issuance of 

this rule, USDA has reviewed the 

Committee’s marketing policy statement 

for the 2018–2019 marketing year. The 

Committee’s marketing policy 

statement, a requirement whenever the 

Committee recommends volume 

regulation, meets the requirements of 

§§ 985.50 and 985.51. 

The establishment of the salable 

quantities and allotment percentages 

will allow for adequate supply to meet 

anticipated market needs. In 

determining anticipated market needs, 

the Committee considered historical 

sales, as well as changes and trends in 

production and demand. This rule also 

provides producers with information on 

the amount of spearmint oil that should 

be produced during the 2018–2019 

growing season to meet anticipated 

market demand. 

Final Regulatory Flexibility Act 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA) (5 

U.S.C. 601–612), the Agricultural 

Marketing Service (AMS) has 

considered the economic impact of this 

rule on small entities. Accordingly, 

AMS has prepared this 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 the rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. 

There are approximately 43 producers 

and 94 producers of Scotch and Native 

spearmint oil, respectively, in the 

regulated production area and 

approximately seven spearmint oil 

handlers subject to regulation under the 

Order. Small agricultural service firms 

are defined by the Small Business 

Administration (SBA) as those having 

annual receipts of less than $7,500,000, 

and small agricultural producers are 

defined as those having annual receipts 

of less than $750,000 (13 CFR 121.201). 

The Committee reported that recent 

producer prices for spearmint oil range 

from $15.50 to $18.00 per pound. The 

National Agricultural Statistics Service 

(NASS) reported that the 2016 U.S. 

season average spearmint oil grower 

price per pound was $17.40. 

Multiplying $17.40 per pound by 2016– 

17 spearmint oil utilization of 2,168,257 

million pounds yields a crop value 

estimate of about $37.7 million. Total 

2016–17 spearmint oil utilization, 

reported by the Committee, is 958,711 

pounds and 1,209,546 pounds for 

Scotch and Native spearmint oil, 

respectively. 


jstallworth on DSKBBY8HB2PROD with RULES
Federal Register / Vol. 83, No. 142 / Tuesday, July 24, 2018 / Rules and Regulations 34939 

Given the accounting requirements for 

the volume regulation provisions of the 

Order, the Committee maintains 

accurate records of each producer’s 

production and sales. Using the $17.40 

average spearmint oil price, and 

Committee production data for each 

producer, the Committee estimates that 

38 of the 43 Scotch spearmint oil 

producers and 88 of the 94 Native 

spearmint oil producers could be 

classified as small entities under the 

SBA definition. 

There is no third party or 

governmental entity that collects and 

reports spearmint oil prices received by 

spearmint oil handlers. However, the 

Committee estimates an average 

spearmint oil handling markup at 

approximately 20 percent of the price 

received by producers. Multiplying 1.20 

by the 2016 producer price of $17.40 

yields a handler f.o.b. price per pound 

estimate of $20.88. 

Multiplying this handler f.o.b price by 

spearmint oil utilization of 2,168,257 

pounds results in an estimated handlerlevel spearmint oil value of $45.3 

million. Dividing this figure by the 

number of handlers (7) yields estimated 

average annual handler receipts of about 

$6.5 million, which is below the SBA 

threshold for small agricultural service 

firms. 

Using confidential data on pounds 

handled by each handler, and the 

abovementioned handler price per 

pound, the Committee reported that it is 

likely that at least two of the seven 

handlers had 2016–2017 marketing year 

spearmint oil sales value that exceeded 

the SBA threshold. 

Therefore, in view of the foregoing, 

the majority of producers and handlers 

of spearmint oil may be classified as 

small entities. 

This final rule establishes the quantity 

of spearmint oil produced in the Far 

West, by class, which handlers may 

purchase from, or handle on behalf of, 

producers during the 2018–2019 

marketing year. The Committee 

recommended this action to help 

maintain stability in the spearmint oil 

market by matching supply to estimated 

demand, thereby avoiding extreme 

fluctuations in supplies and prices. 

Establishing quantities that may be 

purchased or handled during the 

marketing year through volume 

regulations allows producers to 

coordinate their spearmint oil 

production with the expected market 

demand. Authority for this action is 

provided in §§ 985.50, 985.51, and 

985.52. 

The Committee estimated trade 

demand for the 2018–2019 marketing 

year for both classes of oil at 2,156,605 

pounds and expects that the combined 

salable carry-in will be 273,725 pounds. 

The combined required salable quantity 

is 1,882,880 pounds. Under volume 

regulation, total sales of spearmint oil 

by producers for the 2018–2019 

marketing year will be held to 2,342,332 

pounds (the recommended salable 

quantity for both classes of spearmint 

oil of 2,068,607 pounds plus 273,725 

pounds of carry-in). This total available 

supply of 2,342,332 pounds should be 

more than adequate to supply the 

2,156,605 pounds of anticipated total 

trade demand for spearmint oil. In 

addition, as of May 31, 2017, the total 

reserve pool for both classes of 

spearmint oil stood at 1,067,138 

pounds. Furthermore, that quantity is 

expected to rise over the course of the 

2017–2018 marketing year. Should trade 

demand increase unexpectedly during 

the 2018–2019 marketing year, reserve 

pool spearmint oil could be released 

into the market to supply that increase 

in demand. 

The recommended allotment 

percentages, upon which 2018–2019 

marketing year producer allotments are 

based, are 35 percent for Scotch 

spearmint oil and 53 percent for Native 

spearmint oil. Without volume 

regulation, producers would not be held 

to these allotment levels, and could 

produce and sell unrestricted quantities 

of spearmint oil. The USDA 

econometric model estimated that the 

season average producer price per 

pound (from both classes of spearmint 

oil) would decline about $1.90 per 

pound because of the higher quantities 

of spearmint oil that would be produced 

and marketed without volume 

regulation. The surplus situation for the 

spearmint oil market that would exist 

without volume regulation in 2018– 

2019 also would likely dampen 

prospects for improved producer prices 

in future years because of the buildup 

in stocks. 

The use of volume regulation allows 

the industry to fully supply spearmint 

oil markets while avoiding the negative 

consequences of over-supplying these 

markets. The use of volume regulation 

is believed to have little or no effect on 

consumer prices of products containing 

spearmint oil and will not result in 

fewer retail sales of such products. 

The Committee discussed alternatives 

to the recommendations established by 

this rule for both classes of spearmint 

oil. The Committee discussed and 

rejected the idea of not regulating any 

volume for either class of spearmint oil 

because of the severe, price-depressing 

effects that would likely occur without 

volume regulation. The Committee also 

discussed and considered salable 

quantities and allotment percentages 

that were above and below the levels 

that were ultimately recommended for 

both classes of spearmint oil. 

Ultimately, the action taken by the 

Committee was to decrease the salable 

quantity and allotment percentage for 

Class 1 (Scotch) spearmint oil, and to 

increase the salable quantity and 

allotment percentage Class 3 (Native) 

spearmint oil from the 2017–2018 

marketing year levels. 

As noted earlier, the Committee’s 

recommendation to establish salable 

quantities and allotment percentages for 

both classes of spearmint oil was made 

after careful consideration of all 

available information including: (1) The 

estimated quantity of salable oil of each 

class held by producers and handlers; 

(2) the estimated demand for each class 

of oil; (3) the prospective production of 

each class of oil; (4) the total of 

allotment bases of each class of oil for 

the current marketing year and the 

estimated total of allotment bases of 

each class for the ensuing marketing 

year; (5) the quantity of reserve oil, by 

class, in storage; (6) producer prices of 

oil, including prices for each class of oil; 

and (7) general market conditions for 

each class of oil, including whether the 

estimated season average price to 

producers is likely to exceed parity. 

Based on its review, the Committee 

believes that the salable quantities and 

allotment percentages established 

herein will achieve the objectives 

sought. The Committee also believes 

that, should there be no volume 

regulation in effect for the upcoming 

marketing year, the Far West spearmint 

oil industry would return to the 

pronounced cyclical price patterns that 

occurred prior to the promulgation of 

the Order. As previously stated, annual 

salable quantities and allotment 

percentages have been issued for both 

classes of spearmint oil since the 

Order’s inception. The salable quantities 

and allotment percentages established 

by this final rule are expected to 

facilitate the goal of maintaining orderly 

marketing conditions for Far West 

spearmint oil for the 2018–2019 and 

future marketing years. 

Costs to producers and handlers, large 

and small, resulting from this final rule 

are expected to be offset by the benefits 

derived from a more stable market and 

increased returns. The benefits of this 

rule are expected to be equally available 

to all producers and handlers regardless 

of their size. 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 


jstallworth on DSKBBY8HB2PROD with RULES
34940 Federal Register / Vol. 83, No. 142 / Tuesday, July 24, 2018 / Rules and Regulations 

Committee deliberations on all issues. 

Like all Committee meetings, the 

October 25, 2017, meeting was a public 

meeting, and all entities, both large and 

small, were able to express views on 

this issue. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

chapter 35), the Order’s information 

collection requirements have been 

previously approved by OMB and 

assigned OMB No. 0581–0178, Specialty 

Crops Program. No changes are 

necessary in those requirements as a 

result of this action. Should any changes 

become necessary, they would be 

submitted to OMB for approval. 

This rule establishes salable 

quantities and allotment percentages for 

Class 1 (Scotch) spearmint oil and Class 

3 (Native) spearmint oil produced in the 

Far West during the 2018–2019 

marketing year. Accordingly, this rule 

imposes no additional reporting or 

recordkeeping requirements on either 

small or large Far West 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 

mentioned 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. 

A proposed rule concerning this 

action was published in the Federal 

Register on April 6, 2018 (83 FR 14766). 

Copies of the proposed rule were also 

mailed or sent via facsimile to all Far 

West spearmint oil handlers. Finally, 

the proposal was made available 

through the internet by USDA and the 

Office of the Federal Register. A 60-day 

comment period ending June 5, 2018, 

was provided for 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/ 

rules-regulations/moa/small-businesses. 

Any questions about the compliance 

guide should be sent to Richard Lower 

at the previously mentioned address in 

the FOR FURTHER INFORMATION CONTACT

section. 

After consideration of all relevant 

material presented, including the 

information and recommendation 

submitted by the Committee and other 

available information, it is hereby found 

that this rule, will tend to effectuate the 

declared policy of the Act. 

List of Subjects in 7 CFR Part 985 

Marketing agreements, Oils and fats, 

Reporting and recordkeeping 

requirements, Spearmint oil. 

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 

■ 1. The authority citation for 7 CFR 

part 985 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. Revise § 985.233 to read as follows: 

§ 985.233 Salable quantities and allotment 

percentages. 

The salable quantity and allotment 

percentage for each class of spearmint 

oil during the marketing year beginning 

on June 1, 2018, shall be as follows: 

(a) Class 1 (Scotch) oil—a salable 

quantity of 760,660 pounds and an 

allotment percentage of 35 percent. 

(b) Class 3 (Native) oil—a salable 

quantity of 1,307,947 pounds and an 

allotment percentage of 53 percent. 

§§ 985.234 and 985.235 [Removed] 

■ 3. Remove §§ 985.234 and 985.235. 

Dated: July 19, 2018. 

Bruce Summers, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2018–15788 Filed 7–23–18; 8:45 am] 

BILLING CODE 3410–02–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 230 

[Release No. 33–10520; File No. S7–17–18] 

RIN 3235–AM39 

Exempt Offerings Pursuant to 

Compensatory Arrangements 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Final rule. 

SUMMARY: The Securities and Exchange 

Commission is adopting an amendment 

to its regulations under the Securities 

Act of 1933 (the ‘‘Securities Act’’), 

which provide an exemption from 

registration for securities issued by nonreporting companies pursuant to 

compensatory arrangements. As 

mandated by the Economic Growth, 

Regulatory Relief, and Consumer 

Protection Act (the ‘‘Act’’), the 

amendment revises a rule to increase 

from $5 million to $10 million the 

aggregate sales price or amount of 

securities sold during any consecutive 

12-month period in excess of which the 

issuer is required to deliver additional 

disclosures to investors. 

DATES:

Effective date: July 23, 2018. 

Comment date: Comments regarding 

the collection of information 

requirements within the meaning of the 

Paperwork Reduction Act of 1995 

should be received on or before August 

23, 2018. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/final.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

xx–18 on the subject line; or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number S7–17–18. This file number 

should be included on the subject line 

if email is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s internet website 

(http://www.sec.gov/rules/final.shtml). 

Comments are also available for website 

viewing and printing in the 

Commission’s Public Reference Room, 

100 F Street NE, Washington, DC 20549, 

on official business days between the 

hours of 10:00 a.m. and 3:00 p.m. All 

comments received will be posted 

without change; we do not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Anne M. Krauskopf, Senior Special 

Counsel, and Adam F. Turk, Special 

Counsel, Office of Chief Counsel, 

Division of Corporation Finance, at 

(202) 551–3500. 

SUPPLEMENTARY INFORMATION: We are 

adopting an amendment to 17 CFR 


jstallworth on DSKBBY8HB2PROD with RULES