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[Federal Register Volume 79, Number 87 (Tuesday, May 6, 2014)]
[Proposed Rules]
[Pages 25710-25715]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10132]

========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 79, No. 87 / Tuesday, May 6, 2014 / Proposed 
Rules

[[Page 25710]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 985

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

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: Proposed rule.

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

SUMMARY: This proposed rule invites comments on revisions to 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 would: Reduce the 
number of new producers that are issued additional allotment bases each 
year from three to two, for each class of oil; temporarily change the 
method by which additional allotment base is allocated to existing 
producers to take into account small production operations; and amend 
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 would help ensure that 
new and existing spearmint oil producers have sufficient allotment base 
to be economically viable in the future.

DATES: Comments must be received by May 21, 2014.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, 
Washington, DC 20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. All comments should reference the document number 
and the date and page number of this issue of the Federal Register and 
will be made available for public inspection in the Office of the 
Docket Clerk during regular business hours, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this 
proposal will be included in the record and will be made available to 
the public. Please be advised that the identity of the individuals or 
entities submitting the comments will be made public on the internet at 
the address provided above.

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 proposal 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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This proposed rule 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 proposal invites comments on revisions to 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 proposal 
would: (1) Reduce 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 change the method by which additional 
allotment base is issued to existing producers in order 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) provide that additional allotment base issued to 
existing producers under the revised procedure could not be used to 
replace allotment base that has been previously transferred away; and 
(4) provide that additional allotment base issued under the revised 
procedure could not be transferred to another producer for at least 
five years following issuance. This action 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

[[Page 25711]]

statistical representation of past spearmint oil production, with 
accommodation for reasonable and normal adjustments to such base. The 
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 current 
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 is that the total allotment 
base for Scotch spearmint oil during the 2014-2015 marketing year will 
be approximately 2,089,146 pounds. One half of one percent of this 
amount would be 10,445 pounds. With the MEE for Scotch spearmint oil 
determined to be 5,121 pounds, issuing allotment base to two new 
producers would require 10,242 pounds, which is within the amount of 
additional allotment base that would be available for the year.
    Likewise, the Committee's initial calculation is that the total 
allotment base for Native spearmint oil during the 2014-2015 marketing 
year will be approximately 2,371,350 pounds. One half of one percent of 
this amount would be 11,856 pounds. With the MEE for Native spearmint 
oil determined to be 5,812 pounds, issuing allotment base to two new 
producers would require 11,624 pounds, which is within the amount of 
additional allotment base that would be available for the year.
    Based on the above information, the Committee unanimously 
recommended reducing the number of new producers that would be 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 proposal would 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 the proposal, 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, would 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, would 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 would be 21 producers of Scotch 
spearmint oil and 30 producers of Native spearmint oil eligible for 
additional allotment base under the proposal. It is expected that 
eligible existing producers of both Scotch and Native spearmint oil 
would 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-

[[Page 25712]]

2017 marketing year, or Native spearmint oil during the 2017-2018 
marketing year, such amount would be distributed on a prorated basis 
among all existing producers of each respective class of spearmint oil.
    The Committee also recommended that additional allotment base 
issued to producers under the proposed revised procedure should 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 would 
determine 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.
    The proposal to reduce the number of new producers issued 
additional allotment base each year from three to two for each class of 
spearmint oil is consistent with previous rulemaking. The Committee's 
purpose, then 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 the 
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 recommended action is the most 
effective option available in order to continue fulfilling the order's 
objectives.

Initial 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 initial 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) (13 CFR 121.201) as 
those having annual receipts of less than $7,000,000, and small 
agricultural producers are defined as

[[Page 25713]]

those having annual receipts of less than $750,000.
    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 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 to 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 benefit small producers more than 
such provisions benefit large producers.
    This proposal would revise 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 action would increase the required retention 
period prior to transferability of additional allotment base issued to 
new producers from two years to five years following issuance.
    This proposal would also temporarily change 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 would help ensure 
that small existing spearmint oil producers have sufficient allotment 
base to remain economically viable in the future. Also, this proposal 
would provide that additional allotment base issued to existing small 
producers could not be used to replace allotment base which has been 
previously transferred away. Finally, this action would provide that 
additional allotment base issued under the revised procedure could not 
be transferred for at least five years following issuance. The proposed 
procedure revising the method by which additional allotment base is 
allocated to existing producers would 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 proposed revisions on handlers and producers in terms of 
costs and returns. Under the order, the Committee is responsible for 
determining the size of the MEE 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 
would reduce the number of new producers issued additional allotment 
bases each year, each new producer would 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 would 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 also 30 
producers of Native spearmint oil whose allotment bases are below the 
MEE level, and it would 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 produce 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 the proposed 
revision would be significant to these small producers, because it 
would improve their economic viability into the future. Without the 
revision, small spearmint oil producers are at a greater risk of not 
being able to continue to produce spearmint oil. Therefore, the 
benefits of this proposed rule are expected to be greater for small 
producers than for larger entities.
    The Committee discussed several alternatives to the recommendations 
contained in this proposed 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 negative impacts 
primarily affecting 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 considers the 
size of the MEE 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 proposed revised procedure before such 
allotment base could be transferred. The Committee considered other 
retention

[[Page 25714]]

periods other than the proposed five years, including maintaining the 
current two year retention period. However, it concluded that a five 
year retention requirement prior to transfer of additional allotment 
base issued under the proposed revised procedure was a sufficient 
period for new and existing producers to demonstrate 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, as proposed herein.
    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 the final rule, we will submit a Justification of Change 
to make minor modifications changing the appearance of two forms and 
adjusting the burden, accordingly.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule.
    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. Finally, interested persons are invited to submit comments on 
this proposed rule, including the regulatory and informational impacts 
of this action on small businesses.
    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 CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposal. Fifteen days is deemed appropriate because: 
(1) The 2014-2015 fiscal period begins on June 1, 2014; (2) affected 
spearmint oil producers need to be informed as soon as possible of any 
changes in base allotment allocation in order to plan their plantings 
accordingly; and (3) spearmint oil producers are aware of this action, 
which was unanimously recommended by the Committee at a public meeting 
and is similar to previous actions recommended by the Committee and 
approved by the Secretary.

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 
proposed to be 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, redesignate and revise paragraphs (c)(1)(ii) as 
(c)(1)(iii) and (c)(2)(ii) as (c)(2)(iv), add new paragraphs 
(c)(1)(ii), (c)(2)(ii) and (c)(2)(iii), and revise paragraph (d) to 
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.
    (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

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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: April 29, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-10132 Filed 5-5-14; 8:45 am]
BILLING CODE P
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