[Federal Register Volume 71, Number 83 (Monday, May 1, 2006)]
[Rules and Regulations]
[Pages 25495-25502]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4040]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1001, 1005, 1006, 1007, 1030, 1032, 1033, 1124, 1126, 
and 1131

[Docket no. AO-14-A75, et al.; DA-06-06]


Milk in the Northeast and Other Marketing Areas; Order Amending 
Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule amends the current ten Federal milk marketing 
orders issued under the Agricultural Marketing Agreement Act of 1937 
(AMAA) to reflect recent amendments to the AMAA. The Milk Regulatory 
Equity Act of 2005, which was signed into law on April 11, 2006, 
amended the AMAA to ensure regulatory equity between and among dairy 
farmers and handlers for sales of packaged fluid milk in Federal milk 
marketing order areas and into certain non-Federally regulated milk 
marketing areas from Federal milk marketing areas.

------------------------------------------------------------------------
         7 CFR parts             Marketing area            AO Nos.
------------------------------------------------------------------------
1001........................  Northeast...........  AO-14-A75.
1005........................  Appalachian.........  AO-388-A19.
1006........................  Florida.............  AO-356-A40.
1007........................  Southeast...........  AO-366-A48.
1030........................  Upper Midwest.......  AO-361-A41.
1032........................  Central.............  AO-313-A50.
1033........................  Mideast.............  AO-166-A74.
1124........................  Pacific Northwest...  AO-368-A36.
1126........................  Southwest...........  AO-231-A69.
1131........................  Arizona Las-Vegas...  AO-271-A41.
------------------------------------------------------------------------


DATES: Effective Date: May 1, 2006.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Associate Deputy 
Administrator for Order Formulation and Enforcement, USDA/AMS/Dairy 
Programs, Stop 0231-Room 2971-S, 1400 Independence Avenue, SW., 
Washington, DC 20250-0231, (202) 690-1366, e-mail address: 
[email protected].

SUPPLEMENTARY INFORMATION: This final rule implements the provisions of 
the Milk Regulatory Equity Act of 2005 (Pub. L. 109-215, 120 Stat. 
328), that amends the Agricultural Marketing Agreement Act of 1937 
(AMAA). In passing this amendment, the congressional intent is to ``* * 
* ensure regulatory equity between and among all dairy farmers and 
handlers for sales of packaged fluid milk in federally regulated milk 
marketing areas and into certain non-federally regulated milk marketing 
areas from federally regulated areas, and for other purposes.''
    The Milk Regulatory Equity Act of 2005 provides for and 
accordingly, this final rule amends the current ten Federal milk 
marketing orders to: (1) Require fluid milk handlers located in Federal 
milk marketing order areas as described on the date of enactment, but

[[Page 25496]]

not regulated by any Federal milk marketing order, to pay Federal order 
minimum prices to the Federal order where the handler is physically 
located for sales of packaged fluid milk into non-Federally regulated 
marketing area(s) located within one or more States that require 
handlers to pay minimum prices for milk, excluding plants pooled on 
another Federal order, plants subject to minimum pricing under State 
regulations, exempt plants, and producer-handlers with less than three-
million pounds of route distribution; (2) Partially or fully regulate 
any producer-handler that has total distribution of Class I products of 
own-farm production in excess of three-million pounds and distributes 
fluid milk in the Arizona-Las Vegas marketing order area; and (3) 
Remove the State of Nevada from the marketing area definition of any 
Federal order.
    This final rule amends provisions in each of the ten Federal milk 
marketing orders concerning pool plants and producer-handlers that 
appear in Sec.  1----.7 and Sec.  1----.10 of each order. Concerning 
these amendments, conforming changes also are made to order provisions 
in parts 1030, 1032, 1124 and 1131. Finally, in part 1131, Clark 
County, Nevada is removed from the definition of the Arizona-Las Vegas 
marketing area.
    The Milk Regulatory Equity Act of 2005 specifically amends section 
608c(11) of the AMAA by removing the following: ``The price of milk 
paid by a handler at a plant operating in Clark County, Nevada shall 
not be subject to any order issued under this section.'' This removal 
of the Clark County exemption results in handlers located in Clark 
County, Nevada, now being subject to Federal order minimum prices for 
their route sales in a Federal order marketing area. Since Clark 
County, Nevada, was in the Arizona-Las Vegas marketing area at the time 
of enactment, April 11, 2006, any handlers located in this area will be 
required to pay Federal order minimum prices to the Arizona-Las Vegas 
order for sales of packaged fluid milk into non-Federally regulated 
marketing area(s) located within one or more States that require 
handlers to pay minimum prices for milk, excluding plants pooled on 
another Federal order, plants subject to minimum pricing under State 
regulations, exempt plants, and producer-handlers with less than three-
million pounds of route distribution.
    With regard to the records and facilities, the Milk Regulatory 
Equity Act of 2005 provides that notwithstanding any other provision of 
section 8c of the AMAA, or the amendments made by the 2005 Act, a milk 
handler (including a producer-handler or a producer operating as a 
handler) that is subject to regulation is required to comply with the 
requirements of 7 CFR 1000.27, or a successor regulation, relating to 
handler responsibility for records or facilities. The information 
collection and recordkeeping requirements contained in 7 CFR 1000.27, 
as well as the information collection requirements in each of the ten 
Federal milk marketing orders has been previously approved by the 
Office of Management and Budget under the provision of Title 44 U.S.C. 
chapter 35 and been assigned OMB Control No. 0581-0032.
    The Milk Regulatory Equity Act of 2005 (Act) further provides that 
the amendments made by that Act are to take effect on the first day of 
the first month beginning more than 15 days after the date of the 
enactment of this Act. The Act was signed into law on April 11, 2006, 
and therefore, the effective date of the amendments to the milk 
marketing orders is May 1, 2006. To accomplish the expedited 
implementation of the amendments, the Act provides that the Secretary 
of Agriculture shall include in the pool distributing plant provisions 
of each Federal milk marketing order a provision that a handler, 
subject to the Act, will be fully regulated by the order in which the 
handler's distributing plant is located. Lastly, the Act provides that 
the amendments shall not be subject to a referendum under section 
8c(19) the AMAA (7 U.S.C. 608c(19)).
    This final rule is issued in conformance with the requirements 
Executive Order 12866. The amendments to the orders provided for herein 
have been reviewed under Executive Order 12988, Civil Justice Reform. 
They are not intended to have a retroactive effect. The amendments do 
not preempt any state or local laws, regulations, or policies unless 
they present an irreconcilable conflict with this rule.
    The AMAA, as amended (7 U.S.C. 604-674), provides that 
administrative proceedings must be exhausted before parties may file 
suit in court. Under section 608c(15)(A) of the AMAA, 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 
handlers is an habitant, or has a principal place of business, has 
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.

Regulatory Flexibility Act and Paperwork Reduction Act

    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 
final 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 $750,000, and a dairy products 
manufacture is a ``small business'' if it has fewer than 500 employees.
    For the purposes of determining which dairy farms are ``small 
businesses,'' the $750,000 per year criterion was used to establish a 
production guideline of 500,000 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.
    Producer-handlers are defined as dairy farmers that process only 
their own milk production. These entities must be dairy farmers as a 
pre-condition to operating processing plants as producer-handlers. The 
size of the dairy farm determines the production level of the operation 
and is the controlling factor in the capacity of the processing plant 
and possible sales volume associated with the producer-handler entity. 
Determining whether a producer-handler is considered a small or large 
business must depend on its capacity as a dairy farm where a producer-
handler with annual gross revenue in excess of $750,000 is considered a 
large business.
    For the month of January 2006, there were 38,279 dairy farmers were 
pooled on the Federal order system. Of the total, 35,503, or 93 percent 
were considered small businesses. During the same month, 399 plants 
were regulated by or reported their milk receipts to their respective 
Market Administrator. Of the total, 204, or 51 percent were

[[Page 25497]]

considered small businesses. There are approximately 78 producer-
handlers in the Federal milk order program. Of this number, fewer than 
5 of these producer-handlers would be considered large enough to 
potentially be affected by this final rule.
    This final rule amends the current ten Federal milk marketing 
orders to: (1) Require fluid milk handlers located in Federal milk 
marketing order areas as described on the date of enactment, but not 
regulated by any Federal milk marketing order, to pay Federal order 
minimum prices to the Federal order where the handler is physically 
located for sales of packaged fluid milk into non-Federally regulated 
marketing area(s) located within one or more States that require 
handlers to pay minimum prices for milk, excluding plants pooled on 
another Federal order, plants subject to minimum pricing under State 
regulations, exempt plants, and producer-handlers with less than three-
million pounds of route distribution; (2) Partially or fully regulate 
any producer-handler that has total distribution of Class I products of 
own-farm production in excess of three-million pounds and distributes 
fluid milk in the Arizona-Las Vegas marketing order area; and (3) 
Remove the State of Nevada from the marketing area definition of any 
Federal order. These provisions assure that dairy farmers and handlers 
receive identical treatment regardless of size of their business.
    The established criteria are applied in an identical fashion to 
both large and small businesses and will not have any different impact 
on those businesses producing fluid milk products. Therefore, the final 
rule will not have a significant economic impact on a substantial 
number of small entities.
    A review of reporting requirements was completed under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was 
determined that this final rule would have no impact on reporting, 
record keeping, or other compliance requirements because they would 
remain identical to the current requirements. No new forms are proposed 
and no additional reporting requirements are necessary.
    This final rule does not require additional information collection 
that needs clearance by the Office of Management and Budget (OMB) 
beyond currently approved information collection. The primary sources 
of data used to complete the forms are routinely used in most business 
transactions. The forms require only a minimal amount of information 
which can be supplied without data processing equipment or a trained 
statistical staff. Thus, the information collection and reporting 
burden is relatively small. Requiring the same reports for all handlers 
does not significantly disadvantage any handler that is smaller than 
the industry average.
    Further, given the provisions of the Milk Regulatory Equity Act of 
2005, it is found, upon good cause, that further public procedure is 
unnecessary and impracticable and it is necessary and in the public 
interest to make this final rule effective May 1, 2006.
    Accordingly, pursuant to the provisions of the Milk Regulatory 
Equity Act of 2005, the ten Federal milk marketing orders are amended 
as specified herein and this final rule becomes effective on May 1, 
2006.

List of Subjects in 7 CFR Part 1001, 1005, 1006, 1007, 1030, 1032, 
1033, 1124, 1126, and 1131

    Milk marketing orders.

Order Relative to Handling

0
It is therefore ordered, that on and after the effective date hereof, 
the handling of milk in each of the aforesaid marketing areas shall be 
in conformity to and in compliance with the terms and conditions of the 
orders, as hereby amended.
0
For the reasons set forth in the preamble and under the authority set 
for in Public Law 109-215, 120 Stat. 328, 7 CFR parts 1001, 1005, 1006, 
1007, 1030, 1032, 1033, 1124, 1126, and 1131 are amended as follows:
0
1. The authority citation for 7 CFR parts 1001, 1005, 1006, 1007, 1030, 
1032, 1033, 1124, 1126, and 1131 is revised to read as follows:

    Authority: 7 U.S.C. 601-674, 7253; Pub. L. 109-215, 120 Stat. 
328.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

0
2. Add Sec.  1001.7(d) to read as follows:


Sec.  1001.7  Pool plant.

* * * * *
    (d) Any distributing plant, located within the marketing area as 
described on April 11, 2006, in Sec.  1001.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-Federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-Federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1001.7(a), (b), or (e);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1001.10 with less than 
three million pounds during the month of route dispositions and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved].
* * * * *

0
3. Add Sec.  1001.10(f) to read as follows:


Sec.  1001.10  Producer-handler.

* * * * *
    (f) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or transfers of packaged fluid milk 
products from own farm production of three million pounds or more the 
previous month. If the producer-handler has Class I route dispositions 
and/or transfers of packaged fluid milk products into the marketing 
area described in Sec.  1131.2 of this chapter of three million pounds 
or more during the current month, such producer-handler shall be 
subject to the provisions described in Sec.  1131.7 of this chapter or 
Sec.  1000.76(a).

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

0
4. Section 1005.7 is amended by revising introductory text, 
redesignating paragraph (g) to (h) and adding new paragraph (g) to read 
as follows:

[[Page 25498]]

Sec.  1005.7  Pool plant.

    Pool plant means a plant specified in paragraphs (a) through (d) of 
this section, a unit of plants as specified in paragraph (e) of this 
section, or a plant specified in paragraph (g) of this section but 
excluding a plant specified in paragraph (h) of this section. The 
pooling standards described in paragraphs (c) and (d) of this section 
are subject to modification pursuant to paragraph (f) of this section:
* * * * *
    (g) Any distributing plant other than a plant qualified as a pool 
plant pursuant to Sec.  1005.7(a) or paragraph (b) of this section or 
Sec.  ----.7(b) of any other Federal milk order or Sec.  1005.7(e) or 
Sec.  1000.8(a) or Sec.  1000.8(e); located within the marketing area 
as described on April 11, 2006, in Sec.  1005.2, from which there is 
route disposition and/or transfers of packaged fluid milk products in 
any non-Federally regulated marketing area(s) located within one or 
more States that require handlers to pay minimum prices for raw milk 
provided that 25 percent or more of the total quantity of fluid milk 
products physically received at such plant (excluding concentrated milk 
received from another plant by agreement for other than Class I use) is 
disposed of as route disposition and/or is transferred in the form of 
packaged fluid milk products to other plants. At least 25 percent of 
such route disposition and/or transfers, in aggregate, are in any non-
Federally regulated marketing area(s) located within one or more States 
that require handlers to pay minimum prices for raw milk. Subject to 
the following exclusion:
    (1) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (2) A producer-handler described in Sec.  1005.10 with less than 
three million pounds during the month of route disposition and/or 
transfers of packaged fluid milk products to other plants.
* * * * *

0
5. Add Sec.  1005.10(e) to read as follows:


Sec.  1005.10  Producer-handler.

* * * * *
    (e) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or transfers of packaged fluid milk 
products from own farm production of three million pounds or more the 
previous month. If the producer-handler has Class I route dispositions 
and/or transfers of packaged fluid milk products into the marketing 
area described in Sec.  1131.2 of this chapter of three million pounds 
or more during the current month, such producer-handler shall be 
subject to the provisions described in Sec.  1131.7 of this chapter or 
Sec.  1000.76(a).

PART 1006--MILK IN THE FLORIDA MARKETING AREA

0
6. Section 1006.7 is amended by revising introductory text and adding 
paragraph (h) to read as follows:


Sec.  1006.7  Pool plant.

    Pool plant means a plant specified in paragraphs (a) through (d) of 
this section, a unit of plants as specified in paragraph (e) of this 
section, or a plant specified in paragraph (h) of this section, but 
excluding a plant specified in paragraph (g) of this section. The 
pooling standards described in paragraphs (c) and (d) of this section 
are subject to modification pursuant to paragraph (f) of this section:
* * * * *
    (h) Any distributing plant, located within the marketing area as 
described on April 11, 2006, in Sec.  1006.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-Federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-Federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1006.7(a), (b), or (e);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1006.10 with less than 
three million pounds during the month of route disposition and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved].

0
7. Add Sec.  1006.10(e) to read as follows:


Sec.  1006.10  Producer-handler.

* * * * *
    (e) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or transfers of packaged fluid milk 
products from own farm production of three million pounds or more the 
previous month. If the producer-handler has Class I route dispositions 
and/or transfers of packaged fluid milk products into the marketing 
area described in Sec.  1131.2 of this chapter of three million pounds 
or more during the current month, such producer-handler shall be 
subject to the provisions described in Sec.  1131.7 of this chapter or 
Sec.  1000.76(a).

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

0
8. Section 1007.7 is amended by revising introductory text and adding 
paragraph (h) to read as follows:


Sec.  1007.7  Pool plant.

    Pool plant means a plant specified in paragraphs (a) through (d) of 
this section, a unit of plants as specified in paragraph (e) of this 
section, or a plant specified in paragraph (h) of this section, but 
excluding a plant specified in paragraph (g) of this section. The 
pooling standards described in paragraphs (c) and (d) of this section 
are subject to modification pursuant to paragraph (f) of this section:
* * * * *
    (h) Any distributing plant, located within the marketing area as 
described on April 11, 2006, in Sec.  1007.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-Federally regulated marketing 
area(s) located within one or more States that

[[Page 25499]]

require handlers to pay minimum prices for raw milk provided that 25 
percent or more of the total quantity of fluid milk products physically 
received at such plant (excluding concentrated milk received from 
another plant by agreement for other than Class I use) is disposed of 
as route disposition and/or is transferred in the form of packaged 
fluid milk products to other plants. At least 25 percent of such route 
disposition and/or transfers, in aggregate, are in any non-Federally 
regulated marketing area(s) located within one or more States that 
require handlers to pay minimum prices for raw milk. Subject to the 
following exclusions:
    (i) The plant is described in Sec.  1007.7(a), (b), or (e);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1007.10 with less than 
three million pounds during the month of route disposition and/or 
transfers of packaged fluid milk products to other plants.

0
9. Add Sec.  1007.10(e) to read as follows:


Sec.  1007.10  Producer-handler.

* * * * *
    (e) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or transfers of packaged fluid milk 
products from own farm production of three million pounds or more the 
previous month. If the producer-handler has Class I route dispositions 
and/or transfers of packaged fluid milk products into the marketing 
area described in Sec.  1131.2 of this chapter of three million pounds 
or more during the current month, such producer-handler shall be 
subject to the provisions described in Sec.  1131.7 of this chapter or 
Sec.  1000.76(a).

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

0
10. In Sec.  1030.7 revise paragraphs (c)(1)(i) and (c)(2) and add 
paragraph (d) to read as follows:


Sec.  1030.7  Pool plant.

* * * * *
    (c) * * *
    (1) * * *
    (i) Pool plants described in Sec.  1030.7(a), (b), (d), and (e);
* * * * *
    (2) The operator of a supply plant located within the States of 
Illinois, Iowa, Minnesota, North Dakota, South Dakota, Wisconsin and 
the Upper Peninsula of Michigan may include as qualifying shipments 
under this paragraph milk delivered directly from producers' farms 
pursuant to Sec. Sec.  1000.9(c) or 1030.13(c) to plants described in 
paragraphs (a), (b), (d) and (e) of this section. Handlers may not use 
shipments pursuant to Sec.  1000.9(c) or Sec.  1030.13(c) to qualify 
plants located outside the area described above.
* * * * *
    (d) Any distributing plant, located within the marketing area as 
described on April 11, 2006 in Sec.  1030.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1030.7(a), (b), or (e);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1030.10 with less than 
three million pounds during the month of route disposition and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved]
* * * * *

0
11. Add Sec.  1030.10(f) to read as follows:


Sec.  1030.10  Producer-handler.

* * * * *
    (f) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or transfers of packaged fluid milk 
products from own farm production of three million pounds or more the 
previous month. If the producer-handler has Class I route dispositions 
and/or transfers of packaged fluid milk products into the marketing 
area described in Sec.  1131.2 of this chapter of three million pounds 
or more during the current month, such producer-handler shall be 
subject to the provisions described in Sec.  1131.7 of this chapter or 
Sec.  1000.76(a).

0
12. Revise Sec.  1030.13(d)(3) to read as follows:


Sec.  1030.13  Producer milk.

* * * * *
    (d) * * *
    (3) The quantity of milk diverted to nonpool plants by the operator 
of a pool plant described in Sec.  1030.7(a), (b) or (d) may not exceed 
90 percent of the Grade A milk received from dairy farmers (except 
dairy farmers described in Sec.  1030.12(b)) including milk diverted 
pursuant to Sec.  1030.13; and
* * * * *

0
13. Revise Sec.  1030.55(a) and (b) to read as follows;


Sec.  1030.55  Transportation credits and assembly credits.

    (a) Each handler operating a pool distributing plant described in 
Sec.  1030.7(a), (b), (d), or (e) that receives bulk milk from another 
pool plant shall receive a transportation credit for such milk computed 
as follows:
* * * * *
    (b) Each handler operating a pool distributing plant described in 
Sec.  1030.7(a), (b), (d), or (e) 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 (c) of this section. The credit 
shall be computed by

[[Page 25500]]

multiplying the hundredweight of milk eligible for the credit by $0.08.
* * * * *

PART 1032--MILK IN THE CENTRAL MARKETING AREA

0
14. Section 1032.7 is amended by revising introductory text and adding 
paragraph (i) to read as follows:


Sec.  1032.7  Pool plant.

    Pool plant means a plant, unit of plants, or system of plants as 
specified in paragraphs (a) through (f) of this section, or a plant 
specified in paragraph (i) of this section, but excluding a plant 
specified in paragraph (h) of this section. The pooling standards 
described in paragraphs (c) and (d) and (f) of this section are subject 
to modification pursuant to paragraph (g) of this section:
* * * * *
    (i) Any distributing plant, located within the marketing area as 
described on April 11, 2006 in Sec.  1032.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1032.7(a), (b), or (e);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1032.10 with less than 
three million pounds during the month of route disposition and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved]
* * * * *

0
15. Add Sec.  1032.10(f) to read as follows:


Sec.  1032.10  Producer-handler.

* * * * *
    (f) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or transfers of packaged fluid milk 
products from own farm production of three million pounds or more the 
previous month. If the producer-handler has Class I route dispositions 
and/or transfers of packaged fluid milk products into the marketing 
area described in Sec.  1131.2 of this chapter of three million pounds 
or more during the current month, such producer-handler shall be 
subject to the provisions described in Sec.  1131.7 of this chapter or 
1000.76(a).

0
16. Revise Sec.  1032.13(d)(2) and (3) to read as follows:


Sec.  1032.13  Producer milk.

* * * * *
    (d) * * *
    (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 during the months of 
August through February, and not more than 85 percent during the months 
of March through July, provided that not less than 20 percent of such 
receipts in the months of August through February and 15 percent of the 
remaining month's receipts are delivered to plants described in Sec.  
1032.7(a), (b) or (i);
    (3) Receipts used in determining qualifying percentages shall be 
milk transferred to or diverted to or physically received by a plant 
described in Sec.  1032.7(a), (b) or (i) less any transfer or diversion 
of bulk fluid milk products from such plants;
* * * * *

PART 1033--MILK IN THE MIDEAST MARKETING AREA

0
17. Section 1033.7 is amended by revising introductory text and adding 
paragraph (j) to read as follows:


Sec.  1033.7  Pool plant.

    Pool plant means a plant, unit of plants, or system of plants as 
specified in paragraphs (a) through (f) of this section, or a plant 
specified in paragraph (j) of this section, but excluding a plant 
specified in paragraph (h) of this section. The pooling standards 
described in paragraphs (c) through (f) of this section are subject to 
modification pursuant to paragraph (g) of this section:
* * * * *
    (j) Any distributing plant, located within the marketing area as 
described on April 11, 2006, in Sec.  1033.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1033.7(a) or (b);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1033.10 with less than 
three million pounds during the month of route disposition and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved]

0
18. Add Sec.  1033.10(f) to read as follows:


Sec.  1033.10  Producer-handler.

* * * * *
    (f) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or

[[Page 25501]]

transfer of packaged fluid milk products from own farm production of 
three million pounds or more the previous month. If the producer-
handler has Class I route dispositions and/or transfers of packaged 
fluid milk products into the marketing area described in Sec.  1131.2 
of this chapter of three million pounds or more during the current 
month, such producer-handler shall be subject to the provisions 
described in Sec.  1131.7 of this chapter or Sec.  1000.76(a).

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

0
19. In Sec.  1124.7 revise paragraph (d) introductory text and (d)(1) 
and add paragraph (e) 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 that Class I) at plants 
specified in paragraph (a), (b), or (e) of this section either directly 
from farms or by transfer from supply plants operated by the 
cooperative association, or its wholly owned subsidiary, and from 
plants of 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), (c), or (e) of this section or under comparable provisions of 
another Federal order; and
* * * * *
    (e) Any distributing plant, located within the marketing area as 
described on April 11, 2006, in Sec.  1124.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1124.7(a) or (b);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1124.10 with less than 
three million pounds during the month of route dispositions and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved]
* * * * *

0
20. Add Sec.  1124.10(f) to read as follows:


Sec.  1124.10  Producer-handler.

* * * * *
    (f) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund provided such dispositions are less than three 
million pounds in the current month and such producer-handler had total 
Class I route dispositions and/or transfers of packaged fluid milk 
products from own farm production of three million pounds or more the 
previous month. If the producer-handler has Class I route dispositions 
and/or transfers of packaged fluid milk products into the marketing 
area described in Sec.  1131.2 of this chapter of three million pounds 
or more during the current month, such producer-handler shall be 
subject to the provisions described in Sec.  1131.7 of this chapter or 
Sec.  1000.76(a).

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

0
21. Section 1126.7 is amended by revising introductory text and adding 
paragraph (h) to read as follows:


Sec.  1126.7  Pool plant.

    Pool plant means a plant specified in paragraphs (a) through (d) of 
this section, a unit of plants as specified in paragraph (e) of this 
section, or a plant specified in paragraph (h) of this section, but 
excluding a plant specified in paragraph (g) of this section. The 
pooling standards described in paragraphs (c) and (d) of this section 
are subject to modification pursuant to paragraph (f) of this section:
* * * * *
    (h) Any distributing plant, located within the marketing area as 
described on April 11, 2006, in Sec.  1126.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1126.7(a), (b), or (e);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1126.10 with less than 
three million pounds during the month of route disposition and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved]

0
22. Add Sec.  1126.10(f) to read as follows:


Sec.  1126.10  Producer-handler.

* * * * *
    (f) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 of this chapter shall be subject to payments 
into the Order 1131 producer settlement fund on such dispositions 
pursuant to Sec.  1000.76(a) and payments into the Order 1131 
administrative fund

[[Page 25502]]

provided such dispositions are less than three million pounds in the 
current month and such producer-handler had total Class I route 
dispositions and/or transfers of packaged fluid milk products from own 
farm production of three million pounds or more the previous month. If 
the producer-handler has Class I route dispositions and/or transfers of 
packaged fluid milk products into the marketing area described in Sec.  
1131.2 of this chapter of three million pounds or more during the 
current month, such producer-handler shall be subject to the provisions 
described in Sec.  1131.7 of this chapter or Sec.  1000.76(a).

PART 1131--MILK IN THE ARIZONA-LAS VEGAS MARKETING AREA

0
23. Revise Sec.  1131.2 to read as follows:


Sec.  1131.2  Arizona-Las Vegas marketing areas.

    The marketing area means all territory within the bounds of the 
following states and political subdivisions, including all piers, docks 
and wharves connected therewith and all craft moored thereat, and all 
territory occupied by government (municipal, State or Federal) 
reservations, installations, institutions, or other similar 
establishments if any part thereof is within any of the listed states 
or political subdivisions:
Arizona
    All of the State of Arizona.

0
24. In Sec.  1131.7 revise paragraphs (d) introductory text and (d)(1) 
and add paragraph (h) to read as follows:
* * * * *


Sec.  1131.7  Pool plant.

* * * * *
    (d) A plant located within the marketing area and operated by a 
cooperative association if, during the month, or the immediately 
preceding 12-month period ending with the current month, 35 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 that Class I) at plants specified in paragraph (a), (b), 
or (h) 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:
    (1) The plant does not qualify as a pool plant under paragraph (a), 
(b), (c), or (h) of this section or under comparable provisions of 
another Federal order; and
* * * * *
    (h) Any distributing plant, located within the marketing area as 
described on April 11, 2006, in Sec.  1131.2;
    (1) From which there is route disposition and/or transfers of 
packaged fluid milk products in any non-Federally regulated marketing 
area(s) located within one or more States that require handlers to pay 
minimum prices for raw milk provided that 25 percent or more of the 
total quantity of fluid milk products physically received at such plant 
(excluding concentrated milk received from another plant by agreement 
for other than Class I use) is disposed of as route disposition and/or 
is transferred in the form of packaged fluid milk products to other 
plants. At least 25 percent of such route disposition and/or transfers, 
in aggregate, are in any non-Federally regulated marketing area(s) 
located within one or more States that require handlers to pay minimum 
prices for raw milk. Subject to the following exclusions:
    (i) The plant is described in Sec.  1131.7(a), (b), or (e);
    (ii) The plant is subject to the pricing provisions of a State-
operated milk pricing plan which provides for the payment of minimum 
class prices for raw milk;
    (iii) The plant is described in Sec.  1000.8(a) or (e); or
    (iv) A producer-handler described in Sec.  1131.10 with less than 
three million pounds during the month of route dispositions and/or 
transfers of packaged fluid milk products to other plants.
    (2) [Reserved].
* * * * *

0
25. Add Sec.  1131.10(f) to read as follows:


Sec.  1131.10  Producer-handler.

* * * * *
    (f) Any producer-handler with Class I route dispositions and/or 
transfers of packaged fluid milk products in the marketing area 
described in Sec.  1131.2 shall be subject to payments into the Order 
1131 producer settlement fund on such dispositions pursuant to Sec.  
1000.76(a) and payments into the Order 1131 administrative fund 
provided such dispositions are less than three million pounds in the 
current month and such producer-handler had total Class I route 
dispositions and/or transfers of packaged fluid milk products from own 
farm production of three million pounds or more the previous month. If 
the producer-handler has Class I route dispositions and/or transfers of 
packaged fluid milk products into the marketing area described in Sec.  
1131.2 of three million pounds or more during the current month, such 
producer-handler shall be subject to the provisions described in Sec.  
1131.7 or Sec.  1000.76(a).

    Dated: April 25, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-4040 Filed 4-27-06; 8:45 am]
BILLING CODE 3410-02-P