[Federal Register Volume 81, Number 156 (Friday, August 12, 2016)]
[Rules and Regulations]
[Pages 53245-53247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19140]



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  Federal Register / Vol. 81, No. 156 / Friday, August 12, 2016 / Rules 
and Regulations  

[[Page 53245]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1150

[Document No. AMS-DA-14-0074]


National Dairy Promotion and Research Program; Amendments to the 
Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule amends the Dairy Promotion and Research Order 
(Dairy Order). The amendment modifies the number of National Dairy 
Promotion and Research Board (Dairy Board) importer members. The total 
number of importer members would be reduced from 2 members to 1 member, 
and the domestic Dairy Board members would remain the same at 36. The 
Dairy Order requires that at least once every three years, after the 
initial appointment of importer members on the Dairy Board, the 
Secretary shall review the average volume of domestic production of 
dairy products compared to the average volume of imports of dairy 
products into the United States during the previous three years, and, 
on the basis of that review, if warranted, reapportion the importer 
representation on the Dairy Board to reflect the proportional shares of 
the United States market served by domestic production and imported 
dairy products.

DATES: Effective Date: August 12, 2016.

FOR FURTHER INFORMATION CONTACT: Whitney A. Rick, Director, Promotion, 
Research and Planning Division, AMS, USDA, 1400 Independence Ave. SW., 
Room 2958-S, Stop 0233, Washington, DC 20250-0233. Phone: (202) 720-
6909. Email: [email protected].

SUPPLEMENTARY INFORMATION: This final rule is issued pursuant to the 
Dairy Production Stabilization Act (Dairy Act) of 1983 [7 U.S.C. 4501-
4514], as amended.

Executive Order 12866

    The Office of Management and Budget has waived the review process 
required by Executive Order 12866 for this action.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This final rule is not intended to have a 
retroactive effect. In accordance with 7 U.S.C. 4512(a), this rule will 
not preempt or supersede any other program relating to dairy product 
promotion organized and operated under the laws of the United States or 
any State.
    The Dairy Act provides that administrative proceedings must be 
exhausted before parties may file suit in court. Under 7 U.S.C. 4509, 
any person subject to the Dairy Order may file with the Secretary of 
Agriculture (Secretary) a petition stating that the Dairy Order, any 
provision of the Dairy Order, or any obligation imposed in connection 
with the Dairy Order is not in accordance with the law and request a 
modification of the Dairy Order or to be exempted from the Dairy Order. 
Such person is afforded the opportunity for a hearing on the petition. 
After a hearing, the Secretary would rule on the petition. The Dairy 
Act provides that the district court of the United States in any 
district in which the person is an inhabitant or has his principal 
place of business, has jurisdiction to review the Secretary's ruling on 
the petition, provided a complaint is filed not later than 20 days 
after the date of the entry of the ruling.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), 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. The purpose of the Regulatory Flexibility Act 
is to fit regulatory actions to the scale of businesses subject to such 
actions so that small businesses will not be disproportionately 
burdened.
    The Dairy Act authorizes a national program for dairy product 
promotion, research and nutrition education. Congress found that it is 
in the public interest to authorize the establishment of an orderly 
procedure for financing (through assessment on all milk produced in the 
United States for commercial use and on imported dairy products) and 
carrying out a coordinated program of promotion designed to strengthen 
the dairy industry's position in the marketplace and to maintain and 
expand domestic and foreign markets and uses for fluid milk and dairy 
products.
    The Small Business Administration [13 CFR 121.201] defines such 
entities with fewer than 500 employees as small businesses. According 
to 2013 data from the U.S. Census Bureau, 98.6 percent of these types 
of firms had fewer than 500 employees (http://census.gov/econ/subs/). 
According to the U.S. Customs and Border Protection (CBP), in 2014, 
approximately 1,400 importers paid assessments under Section 
1150.152(b) of the Dairy Order. Although data is not available 
concerning the sizes of these firms, it is reasonable to assume that 
most of them would be considered small businesses. The most common 
classification for dairy product importers is Grocery and Related 
Product Merchant Wholesalers (North American Industry Classification 
System, category 4244).
    The final rule amends the Dairy Order, Section 1150.131(c), by 
reducing the number of Dairy Board importer representatives from 2 
members to 1 member.
    The amendment should not have a significant economic impact on 
persons subject to the Dairy Order. The changes allow representation on 
the Dairy Board to better reflect the volume of dairy product imports 
into the United States.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. chapter 35], the information collection 
requirements and record keeping provisions imposed by the Dairy Order 
have been previously approved by OMB and assigned OMB Control No. 0581-
0093. No relevant Federal rules have been identified that duplicate, 
overlap, or conflict with this rule.

[[Page 53246]]

Statement of Consideration

    Upon publication of this rule, the Dairy Order is administered by a 
37-member Dairy Board, 36 members representing 12 geographic regions 
within the United States and 1 member representing importers. The Dairy 
Order requires in Section 1150.131(f) that at least once every three 
years, after the initial appointment of importer representatives on the 
Dairy Board, the Secretary shall review the average volume of domestic 
production of dairy products compared to the average volume of imports 
of dairy products into the United States during the previous three 
years and, on the basis of that review, if warranted, reapportion the 
importer representation on the Dairy Board to reflect the proportional 
shares of the United States market served by domestic production and 
imported dairy products. This reapportionment review is the first 
conducted since importer members were appointed to the Dairy Board on 
November 2, 2011.
    For initial representation of importers on the Dairy Board, the 
Dairy Act states ``In making initial appointments to the Board of 
importer representatives, the Secretary shall appoint 2 members who 
represent importers of dairy products and are subject to assessment 
under the order.'' 7 U.S.C. 4504(b)(6)(A). For subsequent 
representation of importers, the Dairy Act goes on to state ``At least 
once every 3 years after the initial appointment of importer 
representatives under subparagraph (A), the Secretary shall review the 
average volume of domestic production of dairy products compared to the 
average volume of imports of dairy products into the United States 
during the previous 3 years and, on the basis of that review, shall 
reapportion importer representation on the Board to reflect the 
proportional share of the United States market by domestic production 
and imported dairy products.'' 7 U.S.C. 4504(b)(6)(B).
    Section 1150.131(f) of the Dairy Order states the basis for the 
comparison of domestic production of dairy products to imported 
products should be estimated total milk solids. The calculation of 
total milk solids of imported dairy products for reapportionment 
purposes ``shall be the same as the calculation of total milk solids of 
imported dairy products for assessment purposes.'' The reapportionment 
review was not conducted prior to 2015 because three full years' worth 
of data was not available.
    Using National Agricultural Statistical Service (NASS) Annual Dairy 
Products Summary data, the average U.S. milk total solids for domestic 
dairy products for 2012 to 2014 was 23,462 billion pounds annually. 
Based on the total milk solids number, each of the 36 domestic Dairy 
Board producer members would represent 652 million pounds of total milk 
solids (23,462 billion pounds divided by 36 producer members equals 652 
million pounds per producer).
    Using information received from CBP, the average total milk solids 
imported during 2012 to 2014 was 589 million pounds (589 million pounds 
divided by 1 importer member equals 589 million pounds per importer).
    Accordingly, Table 1 summarizes, based on U.S. total solids and 
imported total solids, the adopted number of Dairy Board seats for 
domestic and importer members.

            Table 1--Dairy Board Representation Based on U.S. Total Solids and Imported Total Solids
----------------------------------------------------------------------------------------------------------------
                                                                                              Average total milk
                                                          Average total milk  Adopted number  solids represented
                                                             solids (lbs.)    of board seats   per board member
                                                                                                    (lbs.)
----------------------------------------------------------------------------------------------------------------
Domestic Producer.......................................      23,461,555,556              36         651,709,877
Importer................................................         589,296,653               1         589,296,653
----------------------------------------------------------------------------------------------------------------

    On April 1, 2016, a proposed rule was published in the Federal 
Register [81 FR 18802] inviting comments on proposed modifications to 
the number of importer representatives on the Dairy Board. Interested 
parties were provided 30 days to comment on the proposed amendment. 
USDA received three timely comments from industry organizations and an 
individual. Of those comments, two were opposed the rule and one did 
not address the merits of the proposed rule.
    One commenter opposed reducing the number of importer members on 
the Dairy Board, recognizing that approximately 1,400 importers paid 
assessments under the Dairy Order in 2014. The commenter stated that 
due to the limits of the Dairy Tariff-Rate Import Quota Licensing 
Program placed on the volume of cheese imported into the U.S., 
increasing import volumes by any appreciable amount is impossible.
    A second commenter also opposed the proposal to reduce Dairy Board 
importer representation from two members to one member, and urged for 
the withdrawal of the proposed rule. The commenter recognized the Dairy 
Act requires importer representation to reflect the proportional share 
of the U.S. market by domestic production and imported dairy products. 
However, the commenter argued that increasing import volumes by any 
appreciable amount is impossible due to the limits placed on the volume 
of cheese imported into the U.S. by factors beyond the control of the 
market, namely quotas, tariffs and import licenses. The commenter also 
stated safeguard triggers require substantially higher tariffs if the 
triggers are breached and noted this occurred with butter in 2015 and 
may occur in the coming year with several cheeses. The commenter went 
on to state that the Trans-Pacific Partnership (TPP) and the 
Transatlantic Trade and Investment Partnership (TTIP) agreements are 
focused on the reduction, if not elimination of tariffs and quotas. As 
a result, TPP and TTIP implementation would likely result in an 
increase in imported dairy products, including cheese, and would make 
the representation of importers on the Dairy Board even more 
meaningful.
    As noted in the proposed rule, the Dairy Order requires and 
provides instruction on how to carry out a review to determine whether 
or not a reapportionment of importer members on the Dairy Board is 
warranted. Therefore, the proposed rule will not be withdrawn. Neither 
commenter disputed the method of nor the data used to conduct the 
reapportionment review. Similarly, an alternative process for 
conducting the review was not offered. Additionally, because the 
Secretary is required to review importer representation every three 
years, any increase in imported dairy products, cheese or otherwise, 
would be reflected in the calculations used to determine whether 
importer representation would increase, remain the same, or decrease.

[[Page 53247]]

    This final rule adopts the proposed rule without change, and 
therefore Dairy Board importer representation is decreased from two 
importer members to one importer member.
    Pursuant to 5 U.S.C. 553, it is found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because this rule 
should be in effect as soon as possible to appoint Dairy Board members 
for the 2016-2019 term.

List of Subjects in 7 CFR Part 1150

    Dairy products, Milk, Promotion, Research.

    For the reasons set forth in the preamble, 7 CFR part 1150 is 
amended as follows:

PART 1150--DAIRY PROMOTION PROGRAM

0
1. The authority citation for 7 CFR part 1150 continues to read as 
follows:

    Authority: 7 U.S.C. 4501-4514 and 7 U.S.C. 7401.

0
2. In Sec.  1150.131, paragraph (c) is revised to read as follows:


Sec.  1150.131  Establishment and membership.

* * * * *
    (c) One member of the board shall be an importer who is subject to 
assessments under Sec.  1150.152(b).
* * * * *

    Dated: August 8, 2016.
Elanor Starmer,
Administrator.
[FR Doc. 2016-19140 Filed 8-11-16; 8:45 am]
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