[Federal Register Volume 62, Number 171 (Thursday, September 4, 1997)]
[Rules and Regulations]
[Pages 46665-46666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23568]



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 Rules and Regulations
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  Federal Register / Vol. 62, No. 171 / Thursday, September 4, 1997 / 
Rules and Regulations  

[[Page 46665]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1011

[DA-97-09]


Milk in the Tennessee Valley Marketing Area; Suspension of 
Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

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SUMMARY: This document suspends certain provisions of the Tennessee 
Valley Federal milk marketing order during the period of consideration 
of the termination of the Tennessee Valley order. The suspension 
deactivates the provisions that allow funds to be transferred from the 
Producer-Settlement Fund to the Transportation Credit Balancing Fund 
when the latter fund does not have sufficient funds to cover the amount 
of credits to be disbursed.

EFFECTIVE DATE: September 5, 1997.

FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist, 
USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South 
Building, P.O. Box 96456, Washington, DC 20090-6456, (202)690-1932, e-
mail address Nicholas__M[email protected].

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
    Notice of Proposed Termination: Issued June 30, 1997; published 
July 3, 1997 (62 FR 36022).
    Notice of Extension of Time for Filing Comments: Issued July 9, 
1997; published July 14, 1997.
    The Department is issuing this final rule in conformance with 
Executive Order 12866.
    This final 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, 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 Secretary 
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 Secretary 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 
Secretary'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.

Small Business Consideration

    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 
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 $500,000, 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 $500,000 per year criterion was used to 
establish a production guideline of 326,000 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 the representative month of February 1997, the milk of 1,469 
producers was pooled on the Tennessee Valley order. Of these producers, 
1,442 are considered as small businesses.
    There were 7 handlers operating 8 pool distributing plants 
regulated under the Tennessee Valley milk order for February 1997. Of 
these handlers, 3 are considered small businesses.
    This rule lessens the regulatory impact of the order on dairy 
farmers by prohibiting an unwarranted reduction of their blend price to 
cover costs associated with obtaining supplemental milk.

Preliminary Statement

    This order of suspension is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act and of the order regulating 
the handling of milk in the Tennessee Valley marketing area.
    After consideration of all relevant material and available 
information, it is hereby found and determined that during the period 
of consideration involving the termination of the Tennessee Valley milk 
order, the following provisions of the order do not tend to effectuate 
the declared policy of the Act:
    1. In Sec. 1011.61, paragraph (a)(4); and
    2. Sec. 1011.81, paragraph (b).

Statement of Consideration

    This suspension order removes a provision of the Tennessee Valley 
order that requires the market administrator to transfer money from the 
producer-settlement fund (psf) to the transportation credit balancing 
fund (TCBF) when the latter fund has an insufficient balance from which 
to pay the current month's transportation costs associated with 
supplemental milk obtained from outside the marketing area. This 
suspension is effective pending consideration of the termination of the 
Tennessee Valley milk order.
    On May 12, 1997, the Department issued a partial final decision on 
proposed amendments to the Carolina, Southeast, Tennessee Valley, and 
Louisville-Lexington-Evansville milk orders which was published on May 
20, 1997 (62 FR 27525). The final decision contained proposed amended 
orders for the 4 southeast marketing areas, including the Tennessee 
Valley order, and directed the respective market

[[Page 46666]]

administrators of the 4 orders to ascertain whether at least two-thirds 
of the producers marketing their milk under each of the orders approved 
the issuance of the amended orders. The final decision concluded that 
amended orders were needed to effectuate the declared policy of the 
Agricultural Marketing Agreement Act. That Act requires that at least 
two-thirds of the producers voting in a referendum must vote 
affirmatively before an order can be issued.
    Less than two-thirds of the producers whose milk is pooled under 
the Tennessee Valley order approved the issuance of the proposed 
amended order. Consequently, on July 3 the Department issued a notice 
of proposed termination of the Tennessee Valley order. It is now 
evaluating comments received in response to that notice.
    At the present time, the Tennessee Valley milk order is being 
administered under the interim provisions adopted in August 1996, 
whereas the surrounding orders with transportation credit provisions 
are being administered with revised provisions that became effective on 
August 1, 1997.
    In July 1997, an extraordinary volume of supplemental milk was 
received in the neighboring Southeast order. As a result of these 
receipts, the transportation credit balancing fund for that order was 
virtually depleted in July. There is now good reason to believe that 
shipments of supplemental milk may be rerouted to handlers under the 
Tennessee Valley order in September since that order still has the 
interim provision allowing unlimited payments for transportation 
credits even if the money to pay for the credits must come from the 
producer-settlement fund. Although the Tennessee Valley order has a 
viable balance in the TCBF at the present time, it is likely that funds 
from the producer-settlement fund will be necessary for transportation 
credit payments for September's milk. Were this to happen, it would 
reduce blend prices to producers in the Tennessee Valley order while 
their counterparts in the surrounding markets with transportation 
credit provisions would suffer no such reduction under the revised 
August 1997 amendments. This situation would be inconsistent with the 
premises upon which the psf transfer provision was included in the 
Tennessee Valley order.
    This suspension is necessary to ensure that producers' milk will 
not be moved in an uneconomic and inefficient manner simply to obtain 
unlimited transportation credits under the Tennessee Valley order and 
to ensure that producers in the Tennessee Valley order will be treated 
in an equitable manner in relation to producers supplying the adjacent 
Southeast, Carolina, and Louisville-Lexington-Evansville orders.
    Accordingly, it is appropriate to suspend the aforesaid provisions 
during the period of consideration of terminating the Tennessee Valley 
milk order.
    It is hereby found and determined that thirty days' notice of the 
effective date hereof is impractical, unnecessary and contrary to the 
public interest in that:
    (a) The suspension is necessary to reflect current marketing 
conditions and to assure orderly marketing conditions in the marketing 
area, in that such rule is necessary to permit the continued pooling of 
the milk of dairy farmers who have historically supplied the market 
without the need for making costly and inefficient movements of milk; 
and
    (b) This suspension does not require of persons affected 
substantial or extensive preparation prior to the effective date.
    Therefore, good cause exists for making this order effective less 
than 30 days from the date of publication in the Federal Register.

List of Subjects in 7 CFR Part 1011

    Milk marketing orders.

    For the reasons set forth in the preamble, 7 CFR Part 1011 is 
amended as follows:

PART 1011--MILK IN THE TENNESSEE VALLEY MARKETING AREA

    1. The authority citation for 7 CFR Part 1011 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.


Sec. 1011.61  [Suspended in part]

    2. In Sec. 1011.61, paragraph (a)(4) is suspended.


Sec. 1011.81  [Suspended in part]

    3. In Sec. 1011.81, paragraph (b) is suspended.

    Dated: August 29, 1997.
Lon Hatamiya,
Administrator.
[FR Doc. 97-23568 Filed 9-3-97; 8:45 am]
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