[Federal Register: October 25, 2006 (Volume 71, Number 206)]
[Rules and Regulations]
[Page 62377-62380]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25oc06-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
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[[Page 62377]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1005 and 1007
[Docket No. AO-388-A17 and AO-366-A46; DA-05-6]
Milk in the Appalachian and Southeast Marketing Areas; Interim
Order Amending the Orders
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule.
-----------------------------------------------------------------------
SUMMARY: This order amends certain features of the transportation
credit provisions of the Appalachian and Southeast marketing orders on
an interim basis. More than the required number of producers in the
Appalachian and Southeast marketing areas have approved the issuance of
the interim order as amended.
DATES: Effective Date: December 1, 2006.
FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Associate Deputy
Administrator, USDA/AMS/Dairy Programs, Order Formulation and
Enforcement Branch, STOP 0231--Room 2971, 1400 Independence Ave., SW.,
Washington, DC 20250-0231, (202) 690-1366, e-mail address:
gino.tosi@usda.gov.
SUPPLEMENTARY INFORMATION: Specifically, this decision adopts
provisions that will: (1) Establish a transportation credit mileage
rate factor by using a fuel cost adjustor; (2) Increase the Appalachian
order's maximum transportation credit assessment rate to $0.15 per
hundredweight, and the Southeast order's maximum transportation credit
assessment rate to $0.20 per hundredweight; and (3) Establish a zero
diversion limit standard on loads of milk requesting transportation
credits.
This administrative rule is governed by the provisions of Sections
556 and 557 of Title 5 of the United States Code and, therefore, is
excluded from the requirements of Executive Order 12866.
This interim rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have a retroactive
effect. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule.
The Agricultural Marketing Agreement Act of 1937 (the Act), as
amended (7 U.S.C. 601-674), 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 request
modification or exemption from such order by filing with the Department
of Agriculture (Department) 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 the law. A handler is afforded the
opportunity for a hearing on the petition. After a hearing, the
Department 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 its principal place of business, has
jurisdiction in equity to review the Department's ruling on the
petition, provided a bill in equity is filed not later than 20 days
after the date of the entry of the ruling.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), the Agricultural Marketing Service has considered the economic
impact of this action on small entities and has certified that this
interim rule will not have a significant economic impact on a
substantial number of small entities. For the purpose of the Regulatory
Flexibility Act, a dairy farm is considered a ``small business'' if it
has an annual gross revenue of less than $750,000, and a dairy products
manufacturer is a ``small business'' if it has fewer than 500
employees.
For the purposes of determining which dairy farms are ``small
businesses,'' the $750,000 per year criterion was used to establish a
marketing guideline of 500,000 pounds per month. Although this
guideline does not factor in additional monies that may be received by
dairy producers, it should be an inclusive standard for most ``small''
dairy farmers. For purposes of determining a handler's size, if the
plant is part of a larger company operating multiple plants that
collectively exceed the 500-employee limit, the plant will be
considered a large business even if the local plant has fewer than 500
employees.
During January 2006, the time of hearing, there were 3,055 dairy
farmers pooled on the Appalachian order (Order 5). For the Southeast
order (Order 7), 3,367 dairy farmers were pooled on the order. Of
these, 2,889 dairy farmers in Order 5 (or 95) percent and 3,218 dairy
farmers in Order 7 (or 96 percent) were considered small businesses.
During January 2006, there were a total of 37 plants associated
with the Appalachian order (22 fully regulated plants, 11 partially
regulated plants, 2 producer-handler plants and 2 exempt plants). A
total of 51 plants were associated with the Southeast order (31 fully
regulated plants, 9 partially regulated plants and 12 exempt plants).
The number of plants meeting the small business criteria under the
Appalachian and Southeast orders were 9 (or 24 percent) and 18 (or 35
percent), respectively.
The adoption of the proposed amendments will establish a mileage
rate factor using a fuel cost adjustor for the transportation credit
balancing funds for the Appalachian and Southeast orders. The proposed
mileage rate factor will be calculated monthly and adjusted monthly
based on current diesel fuel prices as reported by the Department of
Energy. Currently, the transportation credit provisions of the
Appalachian and Southeast marketing orders provide a mileage rate
factor of 0.35 cents per hundredweight (cwt) per mile.
The adoption of the proposed amendments will increase the maximum
rates of the transportation credit assessments for the Appalachian and
Southeast orders. Specifically, the maximum transportation credit
assessment rate for the Appalachian order will be increased by 5.5
cents per cwt, from the current 9.5 cents per cwt to 15 cents per cwt.
The maximum transportation credit assessment rate for the Southeast
order will be increased by
[[Page 62378]]
10 cents per cwt, from the current 10 cents per cwt to 20 cents per
cwt.
The increase in the maximum transportation credit assessment rates
is intended to minimize the proration and depletion of each order's
transportation credit balancing fund when supplemental milk is needed
to service the fluid needs of both marketing areas. The increases in
the maximum rates of assessment for the Appalachian and Southeast
orders adopted in this rule are necessary because of escalating fuel
costs coupled with the continued decline in milk production in the
southeastern region of the United States.
This Interim Final Rule also adopts the elimination of the ability
for diversions on loads of milk requesting transportation credit
payments.
Adoption of the proposed amendments will be applied to all
Appalachian and Southeast orders' participants (producers and
handlers), which consist of both large and small businesses. Since the
proposed amendments will be subject to all the orders' producers and
handlers regardless of their size the proposed amendments will not have
a significant economic impact on a substantial number of small
entities.
A review of reporting requirements was completed under the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was
determined that these adopted amendments will have no impact on
reporting, recordkeeping, or other compliance requirements because they
will remain identical to the current requirements. No new forms are
proposed and no additional reporting requirements will be necessary.
This action does not require additional information collection that
requires clearance by the Office of Management and Budget (OMB) beyond
currently approved information collection. The primary sources of data
used to complete the forms are routinely used in most business
transactions. Forms require only a minimal amount of information which
can be supplied without data processing equipment or a trained
statistical staff. Thus, the information collection and reporting
burden is relatively small. Requiring the same reports for all handlers
does not significantly disadvantage any handler that is smaller than
the industry average.
Prior Documents in This Proceeding
Notice of Hearing: Issued December 22, 2005; published December 28,
2005 (70 FR 76718).
Tentative Partial Decision: Issued September 1, 2006; published
September 13, 2006 (71 FR 54118).
Findings and Determinations
The findings and determinations hereinafter set forth supplement
those that were made when the Appalachian and Southeast marketing
orders were first issued and when they were amended. The previous
findings and determinations are hereby ratified and confirmed, except
where they may conflict with those set forth herein.
The following findings are hereby made with respect to the
Appalachian and Southeast marketing orders:
(a) Findings upon the basis of the hearing record. Pursuant to the
provisions of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), and the applicable rules of practice and
procedure governing the formulation of marketing agreements and
marketing orders (7 CFR part 900), a public hearing was held upon
certain proposed amendments to the tentative marketing agreement and to
the orders regulating the handling of milk in the Appalachian and
Southeast orders.
Upon the basis of the evidence introduced at such hearing and the
record thereof it found that:
(1) The Appalachian and Southeast orders, as hereby amended on an
interim basis, and all of the terms and conditions thereof, will tend
to effectuate the declared policy of the Act;
(2) The parity prices of milk, as determined pursuant to Section 2
of the Act, are not reasonable in view of the price of feeds, available
supplies of feeds, and other economic conditions which affect market
supply and demand for milk in the marketing area, and the minimum
prices specified in the order, as hereby amended on an interim basis,
are such prices as will reflect the aforesaid factors, insure a
sufficient quantity of pure and wholesome milk, and be in the public
interest; and
(3) The Appalachian and Southeast orders, as hereby amended on an
interim basis, regulates the handling of milk in the same manner as,
and is applicable only to persons in the respective classes of
industrial and commercial activity specified in, a marketing agreement
upon which a hearing has been held.
(b) Additional Findings. It is necessary and in the public interest
to make these interim amendments to the Appalachian and Southeast
orders effective December 1, 2006. Any delay beyond that date would
tend to disrupt the orderly marketing of milk in the aforesaid
marketing areas.
The interim amendments to this order are known to handlers. The
tentative partial decision containing the proposed amendments to this
order was issued on September 1, 2006.
The changes that result from these interim amendments will not
require extensive preparation or substantial alteration in the method
of operation for handlers. In view of the foregoing, it is hereby found
and determined that good cause exists for making these interim order
amendments effective on December 1, 2006.
(c) Determinations. It is hereby determined that:
(1) The refusal or failure of handlers (excluding cooperative
associations specified in Section 8c(9) of the Act) of more than 50
percent of the milk, which is marketed within the specified marketing
areas, to sign a proposed marketing agreement, tends to prevent the
effectuation of the declared policy of the Act;
(2) The issuance of this interim order amending the Appalachian and
Southeast orders is the only practical means pursuant to the declared
policy of the Act of advancing the interests of producers as defined in
the orders as hereby amended;
(3) The issuance of the interim orders amending the Appalachian and
Southeast orders is favored by at least two-thirds of the producers who
were engaged in the production of milk for sale in the respective
marketing areas.
List of Subjects in 7 CFR Parts 1005 and 1007
Milk marketing orders.
Orders Relative to Handling
0
It is therefore ordered, that on and after the effective date hereof,
the handling of milk in the Appalachian and Southeast marketing areas
shall be in conformity and in compliance with the terms and conditions
of the orders, as amended, and as hereby further amended on an interim
basis, as follows:
0
1. The authority citation for 7 CFR parts 1005 and 1007 read as
follows:
Authority: 7 U.S.C. 601-674, and 7253.
PART 1005--MILK IN THE APPALACHIAN MARKETING AREA
0
1A. Section 1005.13 is amended by revising paragraphs (d)(3) and (d)(4)
to read as follows:
Sec. 1005.13 Producer milk.
* * * * *
(d) * * *
(3) The total quantity of milk diverted during the month by a
cooperative association shall not exceed 25 percent during the months
of July through November, January, and February, and
[[Page 62379]]
40 percent during the months of December and March through June, of the
producer milk that the cooperative association caused to be delivered
to, and physically received at, pool plants during the month, excluding
the total pounds of bulk milk received directly from producers meeting
the conditions as described in Sec. 1005.82(c)(2)(ii) and (iii), and
for which a transportation credit is requested;
(4) The operator of a pool plant that is not a cooperative
association may divert any milk that is not under the control of a
cooperative association that diverts milk during the month pursuant to
paragraph (d) of this section. The total quantity of milk so diverted
during the month shall not exceed 25 percent during the months of July
through November, January, and February, and 40 percent during the
months of December and March through June, of the producer milk
physically received at such plant(or such unit of plants in the case of
plants that pool as a unit pursuant to Sec. 1005.7(d)) during the
month, excluding the quantity of producer milk received from a handler
described in Sec. 1000.9(c) and excluding the total pounds of bulk
milk received directly from producers meeting the conditions as
described in Sec. 1005.82(c)(2)(ii) and (iii), and for which a
transportation credit is requested.
* * * * *
0
2. Section 1005.81 is revised to read as follows:
Sec. 1005.81 Payments to the transportation credit balancing fund.
(a) On or before the 12th day after the end of the month (except as
provided in Sec. 1000.90), each handler operating a pool plant and
each handler specified in Sec. 1000.9(c) shall pay to the market
administrator a transportation credit balancing fund assessment
determined by multiplying the pounds of Class I producer milk assigned
pursuant to Sec. 1005.44 by $0.15 per hundredweight or such lesser
amount as the market administrator deems necessary to maintain a
balance in the fund equal to the total transportation credits disbursed
during the prior June-January period, after adjusting the
transportation credits disbursed during the prior June-January period
to reflect any changes in the current mileage rate versus the mileage
rate(s) in effect during the prior June-January period. In the event
that during any month of the June-January period the fund balance is
insufficient to cover the amount of credits that are due, the
assessment should be based upon the amount of credits that would have
been disbursed had the fund balance been sufficient.
(b) The market administrator shall announce publicly on or before
the 23rd day of the month (except as provided in Sec. 1000.90) the
assessment pursuant to paragraph (a) of this section for the following
month.
0
3. Section 1005.82 is amended by revising paragraphs (d)(2)(ii) and
(d)(3)(iv) to read as follows:
Sec. 1005.82 Payments from the transportation credit balancing fund.
* * * * *
(d) * * *
(2) * * *
(ii) Multiply the number of miles so determined by the mileage rate
for the month computed pursuant to Sec. 1005.83(a)(6).
* * * * *
(3) * * *
(iv) Multiply the remaining miles so computed by the mileage rate
for the month computed pursuant to Sec. 1005.83(a)(6).
* * * * *
0
4. Add a new Sec. 1005.83 to read as follows:
Sec. 1005.83 Mileage rate for the transportation credit balancing
fund.
(a) The market administrator shall compute a mileage rate each
month as follows:
(1) Compute the simple average rounded down to three decimal places
for the most recent 4 four weeks of the Diesel Price per Gallon as
reported by the Energy Information Administration of the United States
Department of Energy for the Lower Atlantic and Gulf Coast Districts
combined.
(2) From the result in paragraph (a)(1) in this section subtract
$1.42 per gallon;
(3) Divide the result in paragraph (a)(2) of this section by 5.5,
and round down to three decimal places to compute the fuel cost
adjustment factor;
(4) Add the result in paragraph (a)(3) of this section to $1.91;
(5) Divide the result in paragraph (a)(4) of this section by 480;
(6) Round the result in paragraph (a)(5) of this section down to
five decimal places to compute the mileage rate.
(b) The market administrator shall announce publicly on or before
the 23rd day of the month (except as provided in Sec. 1000.90) the
mileage rate pursuant to paragraph (a) of this section for the
following month.
PART 1007--MILK IN THE SOUTHEAST MARKETING AREA
0
5. Section 1007.13 is amended by revising paragraphs (d)(3) and (d)(4)
to read as follows:
Sec. 1007.13 Producer milk.
* * * * *
(d) * * *
(3) The total quantity of milk diverted during the month by a
cooperative association shall not exceed 33 percent during the months
of July through December, and 50 percent during the months of January
through June, of the producer milk that the cooperative association
caused to be delivered to, and physically received at, pool plants
during the month; excluding the total pounds of bulk milk received
directly from producers meeting the conditions as described in Sec.
1007.82(c)(2)(ii) and (iii), and for which a transportation credit is
requested;
(4) The operator of a pool plant that is not a cooperative
association may divert any milk that is not under the control of a
cooperative association that diverts milk during the month pursuant to
paragraph (d) of this section. The total quantity of milk so diverted
during the month shall not exceed 33 percent during the months of July
through December, or 50 percent during the months of January through
June, of the producer milk physically received at such plant (or such
unit of plants in the case of plants that pool as a unit pursuant to
Sec. 1007.7(e)) during the month, excluding the quantity of producer
milk received from a handler described in Sec. 1000.9(c) and excluding
the total pounds of bulk milk received directly from producers meeting
the conditions as described in Sec. 1007.82(c)(2)(ii) and (iii), and
for which a transportation credit is requested.
* * * * *
0
6. Section 1007.81 is revised to read as follows:
Sec. 1007.81 Payments to the transportation credit balancing fund.
(a) On or before the 12th day after the end of the month (except as
provided in Sec. 1000.90), each handler operating a pool plant and
each handler specified in Sec. 1000.9(c) shall pay to the market
administrator a transportation credit balancing fund assessment
determined by multiplying the pounds of Class I producer milk assigned
pursuant to Sec. 1007.44 by $0.20 per hundredweight or such lesser
amount as the market administrator deems necessary to maintain a
balance in the fund equal to the total transportation credits
[[Page 62380]]
disbursed during the prior June-January period, after adjusting the
transportation credits disbursed during the prior June-January period
to reflect any changes in the current mileage rate versus the mileage
rate(s) in effect during the prior June-January period. In the event
that during any month of the June-January period the fund balance is
insufficient to cover the amount of credits that are due, the
assessment should be based upon the amount of credits that would had
been disbursed had the fund balance been sufficient.
(b) The market administrator shall announce publicly on or before
the 23rd day of the month (except as provided in Sec. 1000.90) the
mileage rate pursuant to paragraph (a) of this section for the
following month.
0
7. Section 1007.82 is amended by revising paragraphs (d)(2)(ii) and
(d)(3)(iv) to read as follows:
Sec. 1007.82 Payments from the transportation credit balancing fund.
* * * * *
(d) * * *
(2) * * *
(ii) Multiply the number of miles so determined by the mileage rate
for the month computed pursuant to Sec. 1007.83(a)(6).
* * * * *
(3) * * *
(iv) Multiply the remaining miles so computed by the mileage rate
for the month computed pursuant to Sec. 1007.83(a)(6).
* * * * *
0
8. Add a new Sec. 1007.83 to read as follows:
Sec. 1007.83 Mileage rate for the transportation credit balancing
fund.
(a) The market administrator shall compute the mileage rate each
month as follows:
(1) Compute the simple average rounded down to three decimal places
for the most recent 4 weeks of the Diesel Price per Gallon as reported
by the Energy Information Administration of the United States
Department of Energy for the Lower Atlantic and Gulf Coast Districts
combined.
(2) From the result in paragraph (a)(1) in this section subtract
$1.42 per gallon;
(3) Divide the result in paragraph (a)(2) of this section by 5.5,
and round down to three decimal places to compute the fuel cost
adjustment factor;
(4) Add the result in paragraph (a)(3) of this section to $1.91;
(5) Divide the result in paragraph (a)(4) of this section by 480;
(6) Round the result in paragraph (a)(5) of this section down to
five decimal places to compute the MRF.
(b) The market administrator shall announce publicly on or before
the 23rd day of the month (except as provided in Sec. 1000.90) the
mileage rate pursuant to paragraph (a) of this section for the
following month.
Dated: October 19, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-17819 Filed 10-24-06; 8:45 am]
BILLING CODE 3410-02-P