[Federal Register Volume 63, Number 170 (Wednesday, September 2, 1998)]
[Rules and Regulations]
[Pages 46637-46640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23517]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1160
[DA-98-04]
Fluid Milk Promotion Order; Amendments to the Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends certain provisions of the Fluid Milk
Promotion Order (Order). The amendments, requested by the National
Fluid Milk Processor Promotion Board (Board), which administers the
Order, modify the membership status and term of office of Board
members. This rule also amends order language pertaining to committees
and intellectual property rights (patents, copyrights, inventions, and
publications). The amendments are necessary to maintain Board
membership continuity and should allow the Board to operate in a more
effective and efficient manner.
EFFECTIVE DATE: September 3, 1998.
FOR FURTHER INFORMATION CONTACT: David R. Jamison, Chief, USDA/AMS/
Dairy Programs, Promotion and Research Branch, 1400 Independence
Avenue, SW, Stop 0233, Room 2734 South Building, Washington, DC 20250-
0233, (202) 720-6909, e-mail address David__J[email protected].
SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (5 U.S.C.
601-612) requires the Agency to examine the impact of a proposed rule
on small entities. Small businesses in the fluid milk processing
industry have been defined by the Small Business Administration as
those employing less than 500 employees. There are approximately 250
fluid milk processors subject to the provisions of the Order. Most of
the parties subject to the Order are considered small entities.
The Order (7 CFR Part 1160) is authorized under the Fluid Milk
Promotion Act of 1990 (Act) (7 USC 6401-6417). This rule will modify
certain provisions of the Order concerning membership on the Board, the
term of office for Board members, the establishment of working
committees, and joint ownership of intellectual property rights. These
amendments were requested by the Board. The Board believes that the
amendments are necessary to maintain Board membership continuity and
that the changes should allow the Board to operate in a more effective
and efficient manner.
The amendments will allow a fluid milk processor to have two
members on the Board. Currently, the Order provides that a fluid milk
processor can be represented on the Board by not more than one member.
This amendment should help maintain Board continuity and provide a
consistent pool of processor representatives. The amendments also will
allow Board members whose fluid milk processor company affiliation has
changed to serve on the Board for a period of up to 60 days or until a
successor is appointed, whichever is sooner, provided that the
eligibility requirements of the Order are still met. This amendment
should help in the reduction of Board vacancies and foster continuity
in Board activities and membership.
The rule also will allow Board members who fill vacancies with a
term of 18 months or less to serve two consecutive full 3-year terms.
Currently, the Order provides that except for the initial staggered
appointments, Board members could only serve two consecutive terms.
Greater continuity on the Board will result from this amendment.
The rule also will permit the Board to establish working committees
of persons other than Board members; this change will assist the Board
with activities through access to information, knowledge, and expertise
that otherwise might not be available.
Finally, the amendments also will modify the intellectual property
provisions of the Order to specifically provide for and allow joint
ownership of intellectual property, i.e., patents, copyrights,
inventions, and publications, that is developed using joint funds. This
change recognizes that significant project funding may come from
contracting parties other than the Board.
These amendments to Order provisions will not add any burden to
regulated parties because they relate to provisions concerning
membership on the Board, the establishment of working committees, and
joint ownership for patents, copyrights, inventions, and publications.
The amendments will not impose additional reporting or collecting
requirements. No relevant Federal rules have been identified that
duplicate, overlap, or conflict with the rule.
Accordingly, pursuant to 5 U.S.C. 605(b), the Agricultural
Marketing Service has certified that this rule would not have a
significant economic impact on a substantial number of small entities.
[[Page 46638]]
Prior document in this proceeding: Invitation to Submit Comments on
Proposed Amendments to the Order: Issued May 18, 1998; published May
22, 1998 (63 FR 28292).
Executive Order 12866 and the Paperwork Reduction Act
The Department of Agriculture (Department) is issuing this 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 Act authorizes the Order. The Act provides that administrative
proceedings must be exhausted before parties may file suit in court.
Under section 1999K of the Act, any person subject to the Order may
file 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 and request a modification
of the Order or to be exempted from the Order. A person subject to an
order 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 person is an inhabitant, or has his principal place of business,
has jurisdiction to review the Secretary's ruling on the petition,
provided a complaint is filed not later than 20 days after the date of
the entry of the ruling.
In accordance with the Paperwork Reduction Act (44 U.S.C. Chapter
35), the forms and reporting and recordkeeping requirements that are
included in the Order have been approved previously by the Office of
Management and Budget (OMB) and were assigned OMB No. 0581-0093, except
for Board members' nominee background information sheets that were
assigned OMB No. 0505-0001.
Statement of Consideration
This final rule amends certain provisions of the Order which relate
to Board membership and term of office, establishment of working
committees, and joint ownership for intellectual property.
The amendments allow a fluid milk processor to have two members on
the Board. Currently, the Order provides that a fluid milk processor
can be represented on the Board by not more than one member. The Board
in its recommendation for rulemaking noted that it is more difficult to
maintain the single member representation; that processors are larger
in size and operate in several geographic areas; and that, to maintain
continuity and provide a consistent pool of processor representatives,
a change in Order provisions is needed to allow more than one
representative on the Board.
The amendments also will allow Board members whose fluid milk
processor company affiliation has changed to serve on the Board for a
period of up to 60 days or until a successor is appointed, whichever is
sooner, provided the eligibility requirements of the Order are still
met. Currently, except in those instances where a Board member changes
fluid milk processor affiliation and is eligible to serve on the Board
in another capacity during the same term, a Board member whose
processor affiliation has changed cannot continue to serve on the
Board.
The amendments also will allow Board members who fill vacancies
with a term of 18 months or less to serve two additional 3-year terms.
Currently, the Order states that, except for the initial staggered
Board appointments of 1-or 2-year terms, Board members may only serve
two consecutive terms. Thus, any time served with the initial term is
considered a complete term.
The amendments also permit the Board to establish working
committees of persons other than Board members to assist the Board with
activities. Currently, committees and subcommittees are selected from
Board members. This change provides information, knowledge, and
expertise that otherwise might not be available.
Finally, the amendments also will modify the section on patents,
copyrights, inventions, and publications by allowing jointly developed
intellectual property to be jointly owned. Currently, the Order does
not specifically provide for such joint ownership.
Notice of proposed rulemaking was given to interested parties and
they were afforded an opportunity to file written data, views, or
arguments concerning this proposed rule. Seven comments were received,
representing five proprietary handlers, one cooperative association,
and the Board. Comments generally favored the proposed changes, though
several comments voiced opposition to allowing two Board members from
one fluid milk processor. Proposed changes and a summary of comments
received on those proposed changes follow:
1. Allow fluid milk processors to have two members on the National
Fluid Milk Processor Promotion Board. Three comments, from The Kroger
Co. (Kroger), Super Store Industries (SSI), and the Board, were in
support of the proposed language. These commenters contend that this
amendment would better able the Board to formulate and initiate
programs and more efficiently perform its duties and obligations,
especially with structural changes that have and are anticipated to
continue in the dairy industry.
Four comments, from Peeler Jersey Farms, Inc. (Peeler), The Stop
and Shop Supermarket Company (Stop and Shop), Tillamook County Creamery
Association, and Sunshine Dairy Foods Inc. (Sunshine), were in
opposition to this proposed change. These commenters stated that
adopting the proposed language (1) would further centralize power and
control of assessments, perhaps skewing actions to favor multiple-
representative processors; and (2) is unnecessary because an adequate
number of fluid milk processors exists, as well as enough interest to
staff a 20-member board on a six-year rotating basis. These commenters
contended that the process could be dominated by fewer processors which
might, in turn, discourage participation, input, and innovation from
small processors.
The Order provides for a 20-member Board with 15 members
representing geographic regions and five at-large members, at least
three of whom are to be fluid milk processors and at least one member
from the general public. To the extent practicable, members
representing geographic regions should represent processing operations
of differing sizes. This continuing provision recognizes the need for
diversity of Board membership, both geographically and size-wise.
As the fluid processing sector has experienced changes and will
continue to undergo consolidation of processors, it is appropriate to
allow fluid processors to have two members on the Board. As the
industry has consolidated to have processors that are larger in size
and that operate in several geographic areas, the Board has experienced
difficulty in maintaining full-Board strength with representation
limited to one per processor. To maintain continuity, help in the
reduction of Board vacancies, and provide a consistent pool of
processor representatives, a change in the Order provisions is
appropriate to allow two Board members from one processor.
The Order directs the Secretary to appoint Board members on the
basis of
[[Page 46639]]
representation discussed above (20 members representing 15 geographic
regions plus five at-large members). Through the appointment process,
the Secretary has and will continue to maintain control over the
Board's composition, including the number of multi-member processors.
2. Allow Board members whose affiliation has changed to serve on
the Board up to 60 days or until successor is approved, whichever is
sooner. Four comments, from Kroger, SSI, Stop and Shop, and Sunshine,
were in support of the proposed language for reasons of Board
continuity and full strength. One comment, from the Board, suggested
extending the 60-day limitation to six months. The Board contended that
the appointment process can take six or more months, and a six-month
limitation on member carry-over would be more realistic than 60 days.
Vacancies of Board members whose terms have not expired may be
filled either by the Secretary appointing qualified members from the
most recent list of nominations for the specific region or by Board
nominations. With these two alternatives, it is feasible that Board
vacancies could be filled in 60 days or less. Extending the time limit
serves little purpose in bringing on new Board members in a timely
fashion, but allowing a two month ``grace period'' should foster better
continuity in Board activities and membership than under current
provisions.
3. Allow Board members who fill vacancies with a term of 18 months
or less to serve two consecutive full 3-year terms. Five comments, from
Kroger, SSI, Stop and Shop, Sunshine, and the Board, were in support of
the proposed language. The comments stated that this change would
contribute to greater continuity and orderly process for the Board.
This amendment is appropriate to implement as it will allow for
greater continuity of membership.
4. Allow Board to establish working committees of persons other
than Board members to assist Board with activities by providing
information, knowledge, and expertise that otherwise might not be
available. Five comments, from Kroger, SSI, Stop and Shop, Sunshine,
and the Board, were in support of the proposed language. Knowledge and
expertise from people other than Board members can be utilized more
effectively with this change in the order provisions.
5. Modify the intellectual property provisions of the Order to
specifically provide for and allow joint ownership of intellectual
property (patents, copyrights, inventories, publications) that is
developed using joint funds. Five comments, from Kroger, SSI, Stop and
Shop, Sunshine, and the Board, were in support of the proposed
language. The comments stated that this provision allows the Board
greater flexibility concerning joint ownership of intellectual
property. By amending this provision, this greater flexibility will be
permitted.
In addition to opposing all proposed changes, Peeler proposed two
additional amendments to the Order. Neither proposal is relevant to the
other amendments being implemented in this action, and no opportunity
has been provided for interested parties to comment on the two Peeler
proposals. Therefore, the proposals are not addressed here.
It is appropriate to make this final rule effective one day after
the date of publication in the Federal Register. Issuance of this rule
is necessary to provide the Board flexibility to more effectively
administer the Order with respect to membership status and term of
office of Board members and to clarify Order provisions with respect to
working committees and joint ownership of intellectual property. These
proposed amendments should be effective before the Secretary of the
United States Department of Agriculture makes appointments to fill
positions on the Board. These positions should be filled as soon as
possible. Thus, the rule will allow the Board to fill seats in a timely
manner.
Therefore, good cause exists for making this rule effective less
than 30 days from the date of publication in the Federal Register. The
proposed amendments to the order are made final in this action.
List of Subjects in 7 CFR Part 1160
Fluid milk products, Milk, Promotion.
For the reasons set forth in the preamble, 7 CFR Part 1160 is
amended as follows:
PART 1160--FLUID MILK PROMOTION PROGRAM
1. The authority citation for 7 CFR Part 1160 continues to read as
follows:
Authority: 7 U.S.C. 6401-6417.
2. In Sec. 1160.200, paragraph (a) is revised to read as follows:
Sec. 1160.200 Establishment and membership.
(a) There is hereby established a National Fluid Milk Processor
Promotion Board of 20 members, 15 of whom shall represent geographic
regions and five of whom shall be at-large members of the Board. To the
extent practicable, members representing geographic regions shall
represent fluid milk processing operations of differing sizes. No fluid
milk processor shall be represented on the Board by more than two
members. The at-large members shall include at least three fluid milk
processors and at least one member from the general public. Except for
the member or members from the general public, nominees appointed to
the Board must be active owners or employees of a fluid milk processor.
The failure of such a member to own or work for a fluid milk processor
or its successor fluid milk processor shall disqualify that member for
membership on the Board except that such member shall continue to serve
on the Board for a period of up to 60 days following the
disqualification or until the appointment of a successor Board member
to such position, whichever is sooner, provided that such person
continues to meet the criteria for serving on the Board as a processor
representative.
* * * * *
3. In Sec. 1160.201, paragraph (b) is revised to read as follows:
Sec. 1160.201 Term of office.
* * * * *
(b) No member shall serve more than two consecutive terms, except
that any member who is appointed to serve for an initial term of one or
two years shall be eligible to be reappointed for two three-year terms.
Appointment to another position on the Board is considered a
consecutive term. Should a non-board member be appointed to fill a
vacancy on the Board with a term of 18 months or less remaining, the
appointee shall be entitled to serve two consecutive 3-year terms
following the term of the vacant position to which the person was
appointed.
4. In Sec. 1160.208, paragraph (g) is revised to read as follows:
Sec. 1160.208 Powers of the Board.
* * * * *
(g) To select committees and subcommittees, to adopt bylaws, and to
adopt such rules for the conduct of its business as it may deem
advisable; the Board may establish working committees of persons other
than Board members;
* * * * *
5. In Sec. 1160.505, the text is designated paragraph (a) and a new
paragraph (b) is added to read as follows:
Sec. 1160.505 Patents, copyrights, inventions and publications.
* * * * *
[[Page 46640]]
(b) Should patents, copyrights, inventions, and publications be
developed through the use of funds collected by the Board under this
subpart, and funds contributed by another organization or person,
ownership and related rights to such patents, copyrights, inventions,
and publications shall be determined by the agreement between the Board
and the party contributing funds towards the development of such
patent, copyright, invention, and publication in a manner consistent
with paragraph (a) of this section.
Dated: August 26, 1998.
Michael V. Dunn,
Assistant Secretary, Marketing & Regulatory Programs.
[FR Doc. 98-23517 Filed 9-1-98; 8:45 am]
BILLING CODE 3410-02-P