[Federal Register Volume 66, Number 223 (Monday, November 19, 2001)]
[Proposed Rules]
[Pages 57889-57891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28905]


 ========================================================================
 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. 66, No. 223 / Monday, November 19, 2001 / 
Proposed Rules  

[[Page 57889]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1124

[Docket No. AO-368-A29; DA-01-06]


Milk in the Pacific Northwest Marketing Area; Notice of Hearing 
on Proposed Amendments to Tentative Marketing Agreement and Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule; Notice of public hearing on proposed rulemaking.

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SUMMARY: A public hearing is being held to consider proposals that 
would amend certain pooling provisions of the Pacific Northwest order. 
One proposal calls for eliminating certain supply plant qualification 
standards that currently allow cooperative associations which operate 
supply plants to include milk delivered direct from farms to pool 
distributing plants as a qualifying shipment for determining pool 
eligibility; prohibiting a pool plant operator from including milk 
diverted to pool distributing plants as a qualifying shipment for 
pooling; adding a provision that would provide for two or more 
cooperative pool manufacturing plants to operate as a system for 
meeting the shipment requirements for pooling; and establishing 
qualification standards for manufacturing plants located within the 
marketing area.
    A second proposal would reduce the amount of milk that a pool plant 
may divert during the months of March through August and add a ``touch 
base'' provision that would require at least 6 days milk production of 
a dairy farmer be physically received at a pool plant in order to be 
eligible for diversion.
    Proponents have requested that the proposals be handled on an 
emergency basis.

DATES: The hearing will convene at 8:30 a.m. on December 4, 2001.

ADDRESSES: The hearing will be held at the Doubletree Hotel Seattle 
Airport, 18740 Pacific Highway South, Seattle WA 98188, (206) 246-8600.

FOR FURTHER INFORMATION CONTACT: Gino Tosi, Marketing Specialist, Order 
Formulation Branch, USDA/AMS/Dairy Programs, Room 2971, South Building, 
P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1366, e-mail 
address [email protected].
    Persons requiring a sign language interpreter or other special 
accommodations should contact James Daugherty at (425) 487-6009; e-mail 
[email protected] before the hearing begins.

SUPPLEMENTARY INFORMATION: This administrative action 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.
    Notice is hereby given of a public hearing to be held at the 
Doubletree Hotel Seattle Airport, 18740 Pacific Highway South, Seattle, 
WA 98188, beginning at 8:30 a.m., on December 4, 2001, with respect to 
proposed amendments to the tentative marketing agreement and to the 
order regulating the handling of milk in the Pacific Northwest 
marketing area.
    The hearing is called 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).
    The purpose of the hearing is to receive evidence with respect to 
the economic and marketing conditions that relate to the proposed 
amendments, hereinafter set forth, and any appropriate modifications 
thereof, to the tentative marketing agreement and to the order.
    Evidence also will be taken to determine whether emergency 
marketing conditions exist that would warrant omission of a recommended 
decision under the rules of practice and procedure (7 CFR 900.12(d)) 
with respect to Proposals No. 1 through 3.
    Actions under the Federal milk order program are subject to the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). This Act seeks to 
ensure that, within the statutory authority of a program, the 
regulatory and informational requirements are tailored to the size and 
nature of small businesses. For the purpose of the Act, a dairy farm is 
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. Most parties subject to a milk order 
are considered as a small business. Accordingly, interested parties are 
invited to present evidence on the probable regulatory and 
informational impact of the hearing proposals on small businesses. 
Also, parties may suggest modifications of these proposals for the 
purpose of tailoring their applicability to small businesses.
    The amendments to the rules proposed herein have been reviewed 
under Executive Order 12988, Civil Justice Reform. They are not 
intended to have a retroactive effect. If adopted, the proposed 
amendments would not preempt any state or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Agricultural Marketing Agreement Act provides that 
administrative proceedings must be exhausted before parties may file 
suit in court. Under section 8c(15)(A) of the Act, any handler subject 
to an order may request modification or exemption from such order by 
filing with the 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 the law. A handler is afforded the opportunity 
for a hearing on the petition. After a hearing, the 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 
its principal place of business, has jurisdiction in equity to review 
the USDA'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.
    Interested parties who wish to introduce exhibits should provide 
the Presiding Officer at the hearing with (3) copies of such exhibits 
for the Official Record. Also, it would be helpful if additional copies 
are available for the use of other participants at the hearing.

List of Subjects in 7 CFR Part 1124

    Milk marketing orders.

[[Page 57890]]

PART 1124--[AMENDED]

    The authority citation for 7 CFR part 1124 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.
    The proposed amendments, as set forth below, have not received the 
approval of the USDA.

Submitted by Northwest Milk Marketing Federation, Northwest Dairy 
Association, and Tillamook County Creamery Association

Proposal No. 1
    1. Amend Sec. 1124.7 by removing paragraphs (c)(2) and (c)(3), 
redesignating paragraph (c)(4) as (c)(2), adding paragraphs (d) and 
(f), and revising paragraph (g) to read as follows:


Sec. 1124.7  Pool Plant.

* * * * *
    (d) A manufacturing plant located within the marketing area and 
operated by a cooperative association, or its wholly owned subsidiary, 
if, during the month, or the immediately preceding 12-month period 
ending with the current month, 20 percent or more of the producer milk 
of members of the association (and any producer milk of nonmembers and 
members of another cooperative association which may be marketed by the 
cooperative association) is physically received in the form of bulk 
fluid milk products (excluding concentrated milk transferred to a 
distributing plant for an agreed-upon use other than Class I) at plants 
specified in paragraph (a) or (b) of this section either directly from 
farms or by transfer from supply plants operated by the cooperative 
association, or its wholly owned subsidiary, for which pool plant 
status has been requested under this paragraph subject to the following 
conditions:
    (1) The plant does not qualify as a pool plant under paragraph (a), 
(b), or (c) of this section or under comparable provisions of another 
Federal order; and
    (2) The plant is approved by a duly constituted regulatory agency 
for the handling of milk approved for fluid consumption in the 
marketing area.
    (3) A request is filed in writing with the market administrator 
before the first day of the month for which it is to be effective. The 
request will remain in effect until a cancellation request is filed in 
writing with the market administrator before the first day of the month 
for which the cancellation is to be effective. * * *
    (f) A system of two or more plants identified in Sec. 1124.7(d) 
operated by one or more handlers may qualify for pooling by meeting the 
above shipping requirements subject to the following additional 
requirements:
    (1) The handler(s) establishing the system submits a written 
request to the market administrator on or before the first day of the 
month for which the system is to be effective requesting that such 
plants qualify as a system. Such request will contain a list of the 
plants participating in the system in the order, beginning with the 
last plant, in which the plants will be dropped from the system if the 
system fails to qualify. Each plant that qualifies as a pool plant 
within a system shall continue each month as a plant in the system 
until the handler(s) establishing the system submits a written request 
before the first day of the month to the market administrator that the 
plant be deleted from the system or that the system be discontinued. 
Any plant that has been so deleted from a system, or that has failed to 
qualify in any month, will not be part of any system. In the event of 
an ownership change or the business failure of a handler that is a 
participant in a system, the system may be reorganized to reflect such 
change if a written request to file a new marketing agreement is 
submitted to the market administrator; and
    (2) If a system fails to qualify under the requirements of this 
paragraph, the handler responsible for qualifying the system shall 
notify the market administrator which plant or plants will be deleted 
from the system so that the remaining plants may be pooled as a system. 
If the handler fails to do so, the market administrator shall exclude 
one or more plants, beginning at the bottom of the list of plants in 
the system and continuing up the list as necessary until the deliveries 
are sufficient to qualify the remaining plants in the system.
    (g) The applicable shipping percentage of paragraph (c) and (d) of 
this section may be increased or decreased by the market administrator 
if the market administrator finds that such adjustment is necessary to 
encourage needed shipments or to prevent uneconomic shipments. Before 
making such a finding, the market administrator shall investigate the 
need for adjustment either on the market administrator's own initiative 
or at the request of interested parties if the request is made in 
writing at least 15 days prior to the month for which the requested 
revision is desired effective. If the investigation shows that an 
adjustment of the shipping percentages might be appropriate, the market 
administrator shall issue a notice stating that an adjustment is being 
considered and invite data, views and arguments. Any decision to revise 
an applicable shipping percentage must be issued in writing at least 
one day before the effective date.
* * * * *
Proposal No. 2
    1. Amend Sec. 1124.13 by redesignating paragraphs (e)(1) through 
(5) as paragraphs (e)(2) through (6), adding a new paragraph (e)(1), 
and revising redesignated paragraphs (e)(2) and (e)(5) to read as 
follows:


Sec. 1124.13  Producer Milk

* * * * *
    (e) * * *
    (1) Milk of a dairy farmer shall not be eligible for diversion 
unless at least 6 days' production of such dairy farmers production is 
physically received at a pool plant during the month.
    (2) Of the quantity of producer milk received during the month 
(including diversions, but excluding the quantity of producer milk 
received from a handler described in Sec. 1000.9(c)) the handler 
diverts to nonpool plants not more than 80 percent. * * *
    (5) Any milk diverted in excess of the limits prescribed in 
paragraph (e)(2) of this section shall not be producer milk. If the 
diverting handler or cooperative association fails to designate the 
dairy farmers' deliveries that are not to be producer milk, no milk 
diverted by the handler or cooperative association during the month to 
a nonpool plant shall be producer milk. In the event some of the milk 
of any producer is determined not to be producer milk pursuant to this 
paragraph, other milk delivered by such producer as producer milk 
during the month will not be subject to Sec. 1124.12(b)(5).
    (6) The delivery day requirement in paragraph (e)(1) of this 
section and diversion percentage in paragraph (e)(2) of this section 
may be increased or decreased by the market administrator if the market 
administrator finds that such revision is necessary to assure the 
orderly marketing and efficient handling of milk in the marketing area. 
Before making such finding, the market administrator shall investigate 
the need for the revision either on the market administrator's own 
initiative or at the request of interested persons if the request is 
made in writing at least 15 days prior to the month for which the 
requested revision is desired effective. If the investigation shows 
that a revision might be appropriate, the market administrator shall 
issue a notice stating that the revision is being considered and 
inviting written data, views, and arguments. Any decision to revise the 
delivery day requirement or the diversion percentage must be issued in

[[Page 57891]]

writing at least one day before the effective date.

Proposed by Dairy Programs, Agricultural Marketing Service

Proposal No. 3
    Make such changes as may be necessary to make the entire marketing 
agreement and the order conform with any amendments thereto that may 
result from this hearing.
    Copies of this notice of hearing and the order may be procured from 
the Market Administrator of the Pacific Northwest Milk Marketing Area, 
or from the Hearing Clerk, Room 1083, South Building, United States 
Department of Agriculture, Washington, DC 20250, or may be inspected 
there.
    Copies of the transcript of testimony taken at the hearing will not 
be available for distribution through the Hearing Clerk's Office. If 
you wish to purchase a copy, arrangements may be made with the reporter 
at the hearing.
    From the time that a hearing notice is issued and until the 
issuance of a final decision in a proceeding, Department employees 
involved in the decision-making process are prohibited from discussing 
the merits of the hearing issues on an ex parte basis with any person 
having an interest in the proceeding. For this particular proceeding, 
the prohibition applies to employees in the following organizational 
units:

Office of the Secretary of Agriculture
Office of the Administrator, Agricultural Marketing Service
Office of the General Counsel
Dairy Programs, Agricultural Marketing Service (Washington office) and 
the Office of the Market Administrator for the Pacific Northwest 
Marketing Area.

    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.

    Dated: November 14, 2001.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 01-28905 Filed 11-15-01; 12:47 pm]
BILLING CODE 3410-02-P