[Federal Register Volume 64, Number 182 (Tuesday, September 21, 1999)]
[Proposed Rules]
[Pages 51083-51084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24568]


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 Proposed Rules
                                                 Federal Register
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 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.
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  Federal Register / Vol. 64, No. 182 / Tuesday, September 21, 1999 / 
Proposed Rules  

[[Page 51083]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1126

[DA-99-08]


Milk in the Texas Marketing Area; Notice of Proposed Suspension 
of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule; suspension.

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SUMMARY: This document invites written comments on a proposal that 
would reinstate suspension of portions of the pool plant and producer 
milk definitions of the Texas Federal milk order until the 
implementation of Federal order reform. Dairy Farmers of America, Inc. 
(DFA), a cooperative association that represents producers who supply 
milk to the market, has requested the reinstatement of the suspension 
that expired July 31, 1999. The cooperative asserts that the suspension 
is necessary to ensure that dairy farmers who have historically 
supplied the Texas market will continue to have their milk priced under 
the Texas order without incurring costly and inefficient movements of 
milk.

DATES: Comments are due no later than September 28, 1999.

ADDRESSES: Comments (two copies) should be sent to USDA/AMS/Dairy 
Programs, Order Formulation Branch, Room 2968, South Building, P.O. Box 
96456, Washington, DC 20090-6456, (202) 720-9368.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing 
Specialist, USDA/AMS/Dairy Programs, Order Formulation Branch, Room 
2968, South Building, PO Box 96456, Washington, DC 20090-6456, (202) 
720-9368, e-mail address: [email protected].

SUPPLEMENTARY INFORMATION: The Department is issuing this proposed rule 
in conformance with Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have a retroactive 
effect. If adopted, this proposed rule will not preempt any state or 
local laws, regulations, or policies, unless they present an 
irreconcilable conflict with the 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 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 
proposed 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.
    For the month of May 1999, the milk of 1,314 producers was pooled 
on the Texas Federal milk order. Of these producers, 812 producers were 
below the 326,000-pound production guideline and are considered small 
businesses. During May, there were 12 handlers operating 21 pool plants 
under the Texas order. Four of these handlers would be considered small 
businesses.
    This proposal would suspend portions of the pool plant and producer 
milk definitions under the Texas order. The proposed action would 
lessen the regulatory impact of the order on certain milk handlers and 
would tend to assure that dairy farmers would have their milk priced 
under the order and thereby receive the benefits that accrue from such 
pricing.
    Interested parties are invited to submit comments on the probable 
regulatory and informational impact of this proposed rule on small 
entities. Also, parties may suggest modifications of this proposal for 
the purpose of tailoring their applicability to small businesses.

Preliminary Statement

    Notice is hereby given that, pursuant to the provisions of the Act, 
the suspension of the following provisions of the order regulating the 
handling of milk in the Texas marketing area is being considered for a 
period that would terminate upon implementation of Federal milk order 
reform--the final rule issued September 1, 1999 (64 FR 47898) and with 
an effective date of October 1, 1999:
    1. In Sec. 1126.7(d) introductory text, the words ``during the 
months of February through July'' and the words ``under paragraph (b) 
or (c) of this section''.
    2. In Sec. 1126.7(e) introductory text, the words ``and 60 percent 
or more of the producer milk of members of the cooperative association 
(excluding such milk that is received at or diverted from pool plants 
described in paragraphs (b), (c), and (d) of this section) is 
physically received during the month in the form of a bulk fluid milk 
product at pool plants described in paragraph (a) of this section 
either directly from farms or by transfer from plants of the 
cooperative association for which pool plant status

[[Page 51084]]

under this paragraph has been requested''.
    3. In Sec. 1126.13(e)(1), the words ``and further, during each of 
the months of September through January not less than 15 percent of the 
milk of such dairy farmer is physically received as producer milk at a 
pool plant''.
    4. In Sec. 1126.13, paragraph (e)(2).
    5. In Sec. 1126.13(e)(3), the sentence ``The total quantity of milk 
so diverted during the month shall not exceed one-third of the producer 
milk physically received at such pool plant during the month that is 
eligible to be diverted by the plant operator;''.
    All persons who desire to submit written data, views or arguments 
about the proposed suspension should send two copies to USDA/AMS/Dairy 
Programs, Order Formulation Branch, Room 2968, South Building, P.O. Box 
96456, Washington, DC 20090-6456, by the 7th day after publication of 
this notice in the Federal Register. The period for filing comments is 
limited to 7 days because a longer period would not provide the time 
needed to complete the required procedures for timely implementation of 
the suspension.
    All written submissions made pursuant to this notice will be made 
available for public inspection in the Dairy Programs offices during 
regular business hours (7 CFR 1.27(b)).

Statement of Consideration

    This proposed action would reinstate the suspension of portions of 
the pool plant and producer milk definitions under the Texas order that 
expired July 31, 1999. The proposed suspension would be in effect from 
the day after publication of the suspension in the Federal Register 
until the implementation of Federal order reform (October 1, 1999). The 
proposed action would suspend: (1) The 60 percent delivery standard for 
pool plants operated by cooperatives; (2) the diversion limitation 
applicable to cooperative associations; (3) the limits on the amount of 
milk that a pool plant operator may divert to nonpool plants; (4) the 
shipping standards that must be met by supply plants to be pooled under 
the order; and (5) the individual producer performance standards that 
must be met in order for a producer's milk to be eligible for diversion 
to a nonpool plant.
    The order provides for regulating, as a supply plant, a plant that 
each month ships a sufficient percentage of its receipts to 
distributing plants. The order sets the requirement as 15 percent of 
the plant's milk receipts during August and December and 50 percent of 
the plant's receipts during September through November and January. In 
addition, the order provides that a plant that is pooled, as a supply 
plant, during each of the immediately preceding months of September 
through January is pooled under the order during the following months 
of February through July without making qualifying shipments to 
distributing plants. The requested action would suspend these 
performance standards, but only for supply plants that were regulated 
under the Texas order during each of the immediately preceding months 
of September through January.
    The order also permits a cooperative association plant located in 
the marketing area to be a pool plant if at least 60 percent of the 
producer milk of members of the cooperative association is physically 
received at pool distributing plants during the month. In addition, a 
cooperative association may divert to nonpool plants up to one-third of 
the amount of milk that the cooperative causes to be physically 
received during the month at handlers' pool plants, and the operator of 
a pool plant may divert to nonpool plants not more than one-third of 
the milk that is physically received during the month at the handler's 
pool plant. The proposed action would suspend the 60 percent delivery 
standard for plants operated by a cooperative association and remove 
the diversion limitations applicable to a cooperative association and 
to the operator of a pool plant.
    The order also specifies that some milk of each producer must be 
physically received at a pool plant in order for any of the producer's 
milk to be eligible for diversion to a nonpool plant. During the months 
of September through January, 15 percent of a producer's milk must be 
received at a pool plant for the remainder to be eligible for 
diversion. The proposed action would suspend these requirements.
    The reinstatement of the suspension was requested by DFA, a 
cooperative association that represents a substantial number of dairy 
farmers who supply the Texas market. The cooperative stated that 
marketing conditions have not changed materially since the provisions 
were initially suspended, prior to 1990, and therefore should be 
suspended until restructuring of the Federal order program is 
implemented as mandated in the 1996 Farm Bill.
    The cooperative states that the reinstatement of the suspension is 
necessary to assure that dairy farmers who have historically supplied 
the Texas market will have their milk priced under the Texas order. In 
addition, DFA maintains that the suspension would provide handlers the 
flexibility needed to move milk supplies in the most efficient manner 
and to eliminate costly and inefficient movements of milk that would be 
made solely for the purpose of pooling the milk of dairy farmers who 
have historically supplied the market.
    Accordingly, it may be appropriate to suspend the aforesaid 
provisions effective upon the day after the date of publication of the 
suspension in the Federal Register, continuing until implementation of 
Federal order reform.

List of Subjects in 7 CFR Part 1126

    Milk marketing orders.

    The authority citation for 7 CFR Part 1126 continues to read as 
follows:

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

    Dated: September 15, 1999.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 99-24568 Filed 9-20-99; 8:45 am]
BILLING CODE 3410-02-P