[Federal Register Volume 67, Number 42 (Monday, March 4, 2002)]
[Proposed Rules]
[Pages 9622-9626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5073]


 ========================================================================
 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. 67, No. 42 / Monday, March 4, 2002 / Proposed 
Rules  

[[Page 9622]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1124 and 1135

[Docket No. AO-368-A30, AO-380-A18; DA-01-08]


Milk in the Pacific Northwest and Western Marketing Areas; Notice 
of Hearing on Proposed Amendments to Tentative Marketing Agreements and 
Orders

------------------------------------------------------------------------
       7 CFR part            Marketing area              AO Nos.
------------------------------------------------------------------------
1124...................  Pacific Northwest.....  AO-368-A30
1135...................  Western...............  AO-380-A18
------------------------------------------------------------------------

AGENCY: Agricultural Marketing Service, USDA.

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

-----------------------------------------------------------------------

SUMMARY: The hearing is being held to consider proposals that would 
amend certain pooling and related provisions of the Pacific Northwest 
and Western Federal milk orders. Proposals pertaining to the Pacific 
Northwest order include redefining the pool plant and producer milk 
definitions to organize distant milk supplies into state units for 
meeting pool performance standards and eliminating the ability of 
handlers to pool the same milk under more than one marketwide pool. 
Proposals to amend the Western order would provide for net shipments 
for pool supply plant qualification, increase the cooperative pool 
plant delivery performance standard, eliminate the proprietary bulk 
tank unit provision, reduce the diversion allowance for producer milk 
and calculate diversions on a net basis, and establish transportation 
and assembly credit provisions. Other proposed amendments to the 
Western order would redefine the pool plant and producer milk 
definitions to organize distant milk supplies into state units for 
meeting pool performance standards, eliminate the ability of handlers 
to pool the same milk under more than one marketwide pool, and clarify 
the proprietary bulk tank handler, producer, and producer milk 
definitions. Testimony will be taken to determine if any of the 
proposals should be handled on an emergency basis.

DATES: The hearing will convene at 8:30 a.m. on Tuesday April 2, 2002.

ADDRESSES: The hearing will be held at the Hilton Hotel, Salt Lake City 
Airport, 5151 Wiley Post Way, Salt Lake City, UT 84116-2891, (801) 539-
1515 (voice), (801) 539-1113 (fax).

FOR FURTHER INFORMATION CONTACT: Gino Tosi, Marketing Specialist, Order 
Formulation Branch, USDA/AMS/Dairy Programs, Room 2968, 1400 
Independence Avenue, SW STOP 0231, Washington, DC 20250-0231, (202)690-
1366, e-mail address: [email protected].
    Persons requiring a sign language interpreter or other special 
accommodations should contact Joanne Walter at email 
[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 Hilton 
Hotel, Salt Lake City Airport, 5151 Wiley Post Way, Salt Lake City, UT 
84116-2891, (801) 539-1515 (voice), (801) 539-1113 (fax), beginning at 
8:30 a.m., on Tuesday, April 2, 2002, with respect to proposed 
amendments to the tentative marketing agreements and to the orders 
regulating the handling of milk in the Pacific Northwest and Western 
marketing areas.
    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 which relate to the proposed 
amendments, hereinafter set forth, and any appropriate modifications 
thereof, to the tentative marketing agreements and to the orders.
    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 the proposals.
    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 or produces less than 500,000 pounds of milk per month, 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 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

[[Page 9623]]

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.
    Interested parties who wish to introduce exhibits should provide 
the Presiding Officer at the hearing with three 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 Parts 1124 and 1135

    Milk marketing orders.

    The authority citation for 7 CFR Parts 1124 and 1135 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 Department of Agriculture.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    Proposals No. 1 and 2 Pertain only to the Pacific Northwest Order. 

Proposed by: Northwest Dairy Association

Proposal No. 1

    Amend the Producer definition in ``1124.12 to prevent the pooling 
of the same milk under the Pacific Northwest Federal order and a State 
marketwide order at the same time by adding a new paragraph (b)(6) to 
read as follows:


Sec. 1124.12  Producer.

* * * * *
    (b) *  *  *
    (6) A dairy farmer whose milk is pooled on a state order with a 
marketwide pool.

Proposed by Dairy Farmers of America

Proposal No. 2

    Amend the pool supply plant and producer milk definitions to 
require that milk from ``distant'' locations be reported by individual 
state units, each of which would be subject to the performance 
standards applicable to supply plants and producer milk by adding a new 
paragraph (c)(5) in Sec. 1124.7 and redesignating `` 1124.13 paragraph 
(e)(5) as (e)(6) and adding a new paragraph (e)(5) to read as follows:


Sec. 1124.7  Pool Plant.

* * * * *
    (c) *  *  *
    (5) If milk is delivered to a plant physically located outside the 
State of Washington or the Oregon counties of Benton, Clackamas, 
Clatsop, Columbia, Coos, Crook, Curry, Deschutes, Douglas, Gilliam, 
Hood River, Jackson, Jefferson, Josephine, Klamath, Lake, Lane, 
Lincoln, Linn, Marion, Morrow, Multnomah, Polk, Sherman, Tillamook, 
Umatilla, Wasco, Washington, Wheeler, and Yamhill or the Idaho counties 
of Benewah, Bonner, Boundary, Kootenai, Latah, and Shoshone by 
producers also located outside the area specified in this paragraph, 
producer receipts at such plant shall be organized by individual state 
units and each unit shall be subject to the following requirements:
    (i) Each unit shall be reported separately pursuant to 
Sec. 1124.30.
    (ii) At least the required minimum percentage and delivery 
requirements specified in Sec. 1124.7(c) and (c)(1) of the producer 
milk of each unit of the handler shall be delivered to plants described 
in Sec. 1124.7(a) or (b), and such deliveries shall not be used by the 
handler in meeting the minimum shipping percentages required pursuant 
to Sec. 1124.7(c)(1); and
    (iii) The percentages of Sec. 1124.7(c)(3)(ii) are subject to any 
adjustments that may be made pursuant to Sec. 1124.7(g).
* * * * *


Sec. 1124.13  Producer Milk.

* * * * *
    (e) * * *
    (5) Milk receipts from producers whose farms that are physically 
located outside the State of Washington or the Oregon counties of 
Benton, Clackamas, Clatsop, Columbia, Coos, Crook, Curry, Deschutes, 
Douglas, Gilliam, Hood River, Jackson, Jefferson, Josephine, Klamath, 
Lake, Lane, Lincoln, Linn, Marion, Morrow, Multnomah, Polk, Sherman, 
Tillamook, Umatilla, Wasco, Washington, Wheeler, and Yamhill or the 
Idaho counties of Benewah, Bonner, Boundary, Kootenai, Latah, and 
Shoshone. Such producers shall be organized by individual state units 
and each unit shall be subject to the following requirements:
    (i) Each unit shall be reported separately pursuant to 
Sec. 1124.30.
    (ii) For pooling purposes, each reporting unit must satisfy the 
shipping standards specified for a supply plant pursuant to 
Sec. 1124.7(c) and (c)(1), and such deliveries shall not be used by the 
handler in meeting the minimum shipping percentages required pursuant 
to Sec. 1124.13(c); and
    (iii) The percentages of Sec. 1124.13(e)(5) are subject to any 
adjustments that may be made pursuant to Sec. 1124.13(e)(6).
* * * * *

PART 1135--MILK IN THE WESTERN MARKETING AREA

    Proposals 3 through 16 pertain only to the Western Order. 

Proposals 3 Through 9 Proposed by Dairy Farmers of America

Proposal No. 3

    Establish a ``net shipment'' provision applicable to deliveries to 
pool distributing plants as well as pool supply plants by adding a new 
paragraph (c)(5) in `` 1135.7 to read as follows:


Sec. 1135.7  Pool plant.

* * * * *
    (c) * * *
    (5) Shipments used in determining qualifying percentages shall be 
milk transferred or diverted to and physically received by distributing 
pool plants, less any transfers of bulk fluid milk products from such 
distributing pool plants.
* * * * *

Proposal No. 4

    Increase the cooperative pool plant provision delivery performance 
standard from 35% to 50% by revising `` 1135.7 paragraph (d) to read as 
follows:


Sec. 1135.7  Pool plant.

* * * * *
    (d) A milk manufacturing plant located within the marketing area 
that is operated by a cooperative association if, during the month or 
the immediately preceding 12-month period ending with the current 
month, 50 percent or more of such cooperative's member producer milk 
(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 and from plants 
of the cooperative association for which pool plant status has been 
requested under this paragraph, subject to the following conditions:
* * * * *

Proposal No. 5

    Eliminate the bulk tank handler provision in the Western order by 
removing `` 1135.11.

[[Page 9624]]

Proposal No. 6

    Reduce the amount of producer milk eligible for diversion to 
nonpool plants from 90 percent to 70 percent by revising `` 1135.13 
paragraph (d)(2) to read as follows:


Sec. 1135.13  Producer milk.

* * * * *
    (d) * * *
    (2) Of the quantity of producer milk received during the month 
(including diversions) the handler diverts to nonpool plants not more 
than 70 percent;
* * * * *

Proposal No. 7

    Amend diversion percentages in `` 1135.13 be calculated on a net 
basis and to be applicable to both pool supply plants and nonpool 
plants, by redesignating paragraphs (d)(3) through (d)(6) as paragraphs 
(d)(4) through (d)(7), and adding a new paragraph (d)(3) to `` 1135.13 
to read as follows:


Sec. 1135.13  Producer milk.

* * * * *
    (d) * * *
    (3) Receipts used in determining qualifying percentages shall be 
milk transferred to, diverted to, or delivered from farms of producers 
pursuant to Sec. 1000.9(c) and physically received by plants described 
in Sec. 1135.7(a) or (b), less any transfers or diversions of bulk 
fluid milk products from such pool distributing plants.
* * * * *

Proposal No. 8

    Establish a partially offset intra-order transportation credit 
provision that will allow shipments traveling distances in excess of a 
number of miles representing a ``typical'' base hauling distance for 
the area to receive credit from the marketwide pool for supplying the 
Class I needs of the market. Credit would be limited to producers 
physically located within the marketing area. Payment would be made to 
the milk supplier. An assembly credit would be applied to milk 
delivered to distributing plants. The reporting requirements of the 
order, in Secs. 1135.30 and 1135.32, would be amended to accommodate 
the transportation and assembly credit provisions. This would be 
accomplished by adding new paragraphs (a)(5) and (c)(3) in 
Sec. 1135.30, redesignating the introductory text in Sec. 1135.32 as 
paragraph (a) and republishing it and adding a paragraph (b) and adding 
a new Sec. 1135.55 to read as follows:


Sec. 1135.30  Reports of receipts and utilization.

* * * * *
    (a) * * *
    (5) Receipts of producer milk described in Sec. 1135.55 (d), 
including the identity of the individual producers whose milk is 
eligible for the transportation credit pursuant to that paragraph and 
the date that such milk was received;
* * * * *
    (c) * * *
    (3) With respect to milk for which a cooperative association is 
requesting a transportation credit pursuant to Sec. 1135.55, all of the 
information required in paragraph (a)(5) of this section.


Sec. 1135.32  Other Reports.

    (a) In addition to the reports required pursuant to Secs. 1135.30 
and 1135.31, each handler shall report any information the market 
administrator deems necessary to verify or establish each handler's 
obligation under the order.
    (b) On or before the 21st day after the end of each month, each 
handler described in Sec. 1000.9(a) and (c) shall report to the market 
administrator any adjustments to transportation credit requests as 
reported pursuant to Sec. 1135.30(a)(5).


Sec. 1135.55  Transportation credits and assembly credits.

    (a) Payments for the transportation of and assembly of milk 
supplies for pool distributing plants to cooperative associations and 
handlers that request them shall be made as follows:
    (1) On or before the 14th day (except as provided in Sec. 1000.90) 
after the end of each month, the market administrator shall pay to each 
handler that received and reported pursuant to Sec. 1135.30(a)(5) milk 
directly from producers' farms, a preliminary amount determined 
pursuant to paragraph (b) and/or (c) of this section;
    (2) The market administrator shall accept adjusted requests for 
transportation credits on or before the 21st day of the month following 
the month for which such credits were requested pursuant to 
Sec. 1135.32(a). After such date, a preliminary audit will be conducted 
by the market administrator. Handlers will be promptly notified of an 
overpayment of credits based upon this final computation and remedial 
payments will be made on or before the next payment date for the 
following month;
    (3) Transportation credits paid pursuant to paragraph (a)(1) and 
(2) of this section shall be subject to final verification by the 
market administrator pursuant to Sec. 1000.77. Adjusted payments will 
remain subject to the final computation established pursuant to 
paragraph (a)(2) of this section; and
    (4) In the event that a qualified cooperative association is the 
responsible party for whose account such milk is received and written 
documentation of this fact is provided to the market administrator 
pursuant to Sec. 1135.30(c)(3) prior to the date payment is due, the 
transportation credits for such milk computed pursuant to this section 
shall be made to such cooperative association rather than to the 
operator of the pool plant at which the milk was received.
    (b) Each handler operating a pool distributing plant described in 
Sec. 1135.7(a) or (b) that receives bulk milk directly from farms of 
producers described in Sec. 1135.12 that are located within the 
marketing area, shall receive a transportation credit for such milk 
computed as follows:
    (1) Determine the hundredweight of milk eligible for the credit by 
completing the steps in paragraph (d) of this section;
    (2) Multiply the hundredweight of milk eligible for the credit by 
.38 cents times the number of miles between the receiving plant and the 
farm less 80 miles;
    (3) Subtract from the effective Class I price at the receiving 
plant the effective Class I price of the county that the farm is 
located in;
    (4) Multiply any positive amount resulting from the subtraction in 
paragraph (b)(3) of this section by the hundredweight of milk eligible 
for the credit; and
    (5) Subtract the amount computed in paragraph (b)(4) of this 
section from the amount computed in paragraph (b)(2) of this section. 
If the amount computed in paragraph (b)(4) of this section exceeds the 
amount computed in paragraph (b)(2) of this section, the transportation 
credit shall be zero.
    (c) Each handler operating a pool distributing plant described in 
Sec. 1135.7(a) or (b) that receives milk from dairy farmers, each 
handler that transfers or diverts bulk milk from a pool plant to a pool 
distributing plant, and each handler described in Sec. 1000.9(c) that 
delivers producer milk to a pool distributing plant shall receive an 
assembly credit on the portion of such milk eligible for the credit 
pursuant to paragraph (d) of this section. The credit shall be computed 
by multiplying the hundredweight of milk eligible for the credit by 5 
cents.
    (d) The following procedure shall be used to determine the amount 
of milk

[[Page 9625]]

eligible for transportation and assembly credits pursuant to paragraphs 
(b) and (c) of this section:
    (1) At each pool distributing plant, determine the aggregate 
quantity of Class I milk, excluding beginning inventory of packaged 
fluid milk products;
    (2) Subtract the quantity of packaged fluid milk products received 
at the pool distributing plant from other pool plants and from nonpool 
plants if such receipts are assigned to Class I;
    (3) Subtract the quantity of bulk milk shipped from the pool 
distributing plant to other plants to the extent that such milk is 
classified as Class I milk;
    (4) Subtract the quantity of bulk other source milk received at the 
pool distributing plant that is assigned to Class I pursuant to 
Sec. 1000.43(d) and 1000.44; and
    (5) Assign the remaining quantity pro rata to bulk physical 
receipts during the month from:
    (i) Producers;
    (ii) Handlers described in Sec. 1000.9(c);
    (iii) Handlers described in Sec. 1135.11; and
    (iv) Other pool plants.
    (e) For purposes of this section, the distances to be computed 
shall be determined by the market administrator using the shortest 
available state and/or Federal highway mileage. Mileage determinations 
are subject to redetermination at all times. In the event a handler 
requests a redetermination of the mileage pertaining to any plant, the 
market administrator shall notify the handler of such redetermination 
within 30 days after the receipt of such request. Any financial 
obligations resulting from a change in mileage shall not be retroactive 
for any periods prior to the redetermination by the market 
administrator.
    (f) In the case of a direct ship farm load the distance shall be 
measured from the farm on the route that results in the fewest miles. 
It shall be the responsibility of the reporting handler to designate 
such farm and for the purpose of computing mileages, the city closest 
to that farm.

Proposal No. 9

    Amend Secs. 1135.7 and 1135.13 to establish state unit standards 
for milk from ``distant'' supply locations. Add a new paragraph (c)(3) 
to the pool supply plant definition in Sec. 1135.7, redesignate 
Sec. 1135.13 paragraph (d)(6) as paragraph (d)(7) and add a new 
paragraph (d)(6) to the producer milk definition to read as follows:


Sec. 1135.7  Pool plant.

* * * * *
    (c) * * *
    (3) If milk is delivered to a plant physically located outside the 
Idaho counties of Ada, Adams, Bannock, Bear Lake, Bingham, Blaine, 
Boise, Bonneville, Camas, Canyon, Caribou, Cassia, Elmore, Franklin, 
Gem, Gooding, Jefferson, Jerome, Lincoln, Madison, Minidoka, Oneida, 
Owyhee, Payette, Power, Twin Falls, Valley and Washington or the Nevada 
Counties of Elko, Lincoln and White Pine or the Oregon counties of 
Baker, Grant, Harney, Malheur, and Union or the state of Utah or the 
Wyoming counties of Lincoln or Uinta by producers also located outside 
the area specified in this paragraph, producer receipts at such plant 
shall be organized by individual state units and each unit shall be 
subject to the following requirements:
    (i) Each unit shall be reported separately pursuant to 
Sec. 1135.30.
    (ii) At least the required minimum percentage and delivery 
requirements specified in section Sec. 1135.7(c) and (c)(1) of the 
producer milk of each unit of the handler shall be delivered to plants 
described in Sec. 1135.7(a) or (b), and such deliveries shall not be 
used by the handler in meeting the minimum shipping percentages 
required pursuant to Sec. 1135.7(c); and
    (iii) The percentages of Sec. 1135.7(c)(3)(ii) are subject to any 
adjustments that may be made pursuant to Sec. 1135.7(g).
* * * * *


Sec. 1135.13  Producer milk.

* * * * *
    (d) * * *
    (6) Milk receipts from producers whose farms that are physically 
located outside the Idaho counties of Ada, Adams, Bannock, Bear Lake, 
Bingham, Blaine, Boise, Bonneville, Camas, Canyon, Caribou, Cassia, 
Elmore, Franklin, Gem, Gooding, Jefferson, Jerome, Lincoln, Madison, 
Minidoka, Oneida, Owyhee, Payette, Power, Twin Falls, Valley and 
Washington or the Nevada Counties of Elko, Lincoln and White Pine or 
the Oregon counties of Baker, Grant, Harney, Malheur, and Union or the 
state of Utah or the Wyoming counties of Lincoln or Uinta. Such 
producers shall be organized by individual state units and each unit 
shall be subject to the following requirements:
    (i) Each unit shall be reported separately pursuant to 
Sec. 1135.30.
    (ii) For pooling purposes, each reporting unit must satisfy the 
shipping standards specified for a supply plant pursuant to 
Sec. 1135.7(c) and (c)(1), and such deliveries shall not be used by the 
handler in meeting the minimum shipping percentages required pursuant 
to Sec. 1135.13(c); and
    (iii) The percentages of Sec. 1135.13(d)(6) are subject to any 
adjustments that may be made pursuant to Sec. 1135.13(d)(7).
* * * * *

Submitted by Northwest Dairy Association

Proposal No. 10

    Prevent producers who share in the proceeds of a state marketwide 
pool from simultaneously sharing in the proceeds of a federal 
marketwide pool on the same milk in the same month by amending the 
Producer provision in Sec. 1135.12 by adding a new paragraph (b)(6) to 
read as follows:


Sec. 1135.12  Producer.

* * * * *
    (b) * * *
    (6) A dairy farmer whose milk is pooled on a state order with a 
market widepool.
    Proposals 11 through 13, submitted by Meadow Gold Dairies, are to 
be considered as alternatives.
    Assure that Class I handlers make uniform payments for their raw 
milk purchases by amending the proprietary bulk tank handler provision 
or by amending the provision regarding payments to producers and to 
cooperative associations.

Proposal No. 11

    Amend Sec. 1135.11 by adding paragraph (c) to read as follows:


Sec. 1135.11  Proprietary bulk tank handler.

* * * * *
    (c) Milk defined as producer milk pursuant to Sec. 1135.13(a) shall 
be reported and considered as producer milk at the pool plant where 
received.

Proposal No. 12

    Amend Sec. 1135.73 by revising paragraphs (b), introductory text, 
and (b)(1) and adding a new paragraph (b)(5) to read as follows:


Sec. 1135.73  Payments to producers and cooperative associations.

* * * * *
    (b) One day prior to the dates on which partial and final payments 
are due pursuant to paragraph (a) of this section, each handler shall 
pay a cooperative association or a proprietary bulk tank handler for 
milk received as follows:
    (1) Partial payment to a cooperative association or a proprietary 
bulk tank handler for bulk milk received directly from producers' 
farms. For bulk milk (including the milk of producers who are not 
members of a cooperative

[[Page 9626]]

association and who the market administrator determines have authorized 
the cooperative association to collect payment for their milk) received 
during the first 15 days of the month from a cooperative association in 
any capacity, except as the operator of a pool plant, and for bulk milk 
received directly from producers' farms and delivered during the first 
15 days of the month for the account of proprietary bulk tank handler 
pursuant to Sec. 1135.11, the payment to the cooperative association or 
proprietary bulk tank handler shall be an amount not less than 1.2 
times the lowest class price for the proceeding month multiplied by the 
hundredweight of milk.
* * * * *
    (5) Final payment to a proprietary bulk tank handler for bulk milk 
received directly from producers' farms. For the total quantity of bulk 
milk received directly from producers' farms and delivered during the 
month for the account of a proprietary bulk tank handler pursuant to 
Sec. 1135.11, the final payment to the proprietary bulk tank handler 
for such milk shall be at not less than the total value of such milk as 
determined by multiplying the respective quantities assigned to each 
class under Sec. 1000.44, as follows:
    (i) The hundredweight of Class I skim milk times the Class I skim 
milk price for the month plus the pounds of class I butterfat times the 
Class I butterfat price for the month. The Class I prices to be used 
shall be the prices effective at the location of the receiving plant;
    (ii) The pounds of nonfat solids in Class II skim milk by the Class 
II nonfat solids price;
    (iii) The pounds of butterfat in Class II times the Class II 
butterfat price;
    (iv) The pounds of nonfat solids in Class IV times the nonfat 
solids price;
    (v) The pounds of butterfat in Class III and Class IV milk times 
the respective butterfat prices for the month;
    (vi) The pounds of protein in Class III milk times the protein 
price;
    (vii) The pounds of other solids in Class III milk times the other 
solids price; and
    (viii) Add together the amounts computed in paragraphs (b)(5)(i) 
through (vii) of this section and from that sum deduct any payment made 
pursuant to paragraph (b)(1) of this section.
* * * * *

Proposal No. 13

    Amend Sec. 1135.73 by revising paragraph (a) to read as follows:


Sec. 1135.73  Payments to producers and to cooperative associations.

    (a) Except as provided in paragraph (b) of this section, each 
handler shall make payment to each producer, including each producer 
from whom milk moved direct from the farm in a truck under the control 
of a handler defined under Sec. 1135.11, from whom milk is received 
during the month as follows:
* * * * *
    Proposals 14--16 submitted by the Market Administrator.

Proposal No. 14

    Clarify the Proprietary bulk tank handler definition by revising 
the introductory text of Sec. 1135.11 to read as follows:


Sec. 1135.11  Proprietary bulk tank handler.

    Any person, except a cooperative association, with respect to milk 
that it receives for its account from the farm of a producer in a tank 
truck owned and operated by, or under the control of, such person and 
which is delivered during the month for the account of such person to a 
pool plant described in Sec. 1135.7(a) or Sec. 1135.7(b) of another 
handler or diverted pursuant to Sec. 1135.13, subject to the following 
conditions:
* * * * *

Proposal No. 15

    Clarify the Producer definition by revising Sec. 1135.12 paragraph 
(b)(5) to read as follows:


Sec. 1135.12  Producer.

* * * * *
    (b) * * *
    (5) A dairy farmer whose milk was received at a nonpool plant 
during the month from the same farm (except a nonpool plant that has no 
utilization of milk products in any class other than Class II, Class 
III, or Class IV) as other than producer milk under the order in this 
part or any other Federal order. Such a dairy farmer shall be known as 
a dairy farmer for other markets.

Proposal No. 16

    Clarify the Producer milk definition by revising Sec. 1135.13 
paragraph (d)(1) to read as follows:


Sec. 1135.13  Producer milk.

* * * * *
    (d) * * *
    (1) Milk of a dairy farmer shall not be eligible for diversion 
unless at least one day's milk production of such dairy farmer has been 
physically received as producer milk at a pool plant and the dairy 
farmer has continuously retained producer status since that time. If a 
dairy farmer loses producer status under the order in this part (except 
as a result of a temporary loss of Grade A approval), the dairy 
farmer's milk shall not be eligible for diversion unless one day's milk 
production has been physically received as producer milk at a pool 
plant during the month;
* * * * *
    Proposed by Dairy Programs, Agricultural Marketing Service.

Proposal No. 17

    For both the Pacific Northwest and the Western orders, make such 
changes as may be necessary to make the entire marketing agreements and 
the orders conform with any amendments thereto that may result from 
this hearing.
    Copies of this notice of hearing and the orders may be procured 
from the Market Administrator of each of the aforesaid marketing areas, 
or from the Hearing Clerk, Room 1083, South Building, United States 
Department of Agriculture, Washington, DC 20250, or may be inspected 
there. Copies may also be obtained at the USDA-AMS website at http://www.ams.usda.gov/dairy/
    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 of the Pacific Northwest and 
Western Marketing Areas
Procedural matters are not subject to the above prohibition and may be 
discussed at any time


    Dated: February 26, 2002.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 02-5073 Filed 3-1-02; 8:45 am]
BILLING CODE 3410-02-P