Fluid Milk Promotion Order; Invitation To Submit Comments on Proposed Amendments to the Order

DEPARTMENT OF AGRICULTURE

7 CFR Part 1160

[DA-96-09]

Fluid Milk Promotion Order; Invitation To Submit Comments on

Proposed Amendments to the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This document invites written comments on proposals to amend

the Fluid Milk Promotion Order. The proposed amendments, requested by

the National Fluid Milk Processor Promotion Board, which administers

the order, would modify the term limits and membership status of Board

members. The proposed rule would also amend certain order language in

conformance with the 1996 Federal Agriculture Improvement and Reform

Act. In addition, this proposed rule would revise or remove order

language that has become obsolete and no longer effectuates the

declared policy of the Fluid Milk Promotion Act of 1990, as amended.

DATES: Comments are due no later than October 7, 1996.

ADDRESSES: Comments (two copies) should be filed with the USDA/AMS/

Dairy Division, Promotion and Research Staff, Room 2734, South

Building, P.O. Box 96456, Washington, DC 20090-6456.

FOR FURTHER INFORMATION CONTACT: Eugene Krueger, Head, Promotion and

Research Staff, USDA/AMS/Dairy Division, Room 2734, South Building,

P.O. Box 96456, Washington, DC 20090-6456, (202) 720-6909.

Small Business Consideration

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires the

Agency to examine the impact of a proposed rule on small entities.

Small businesses in the fluid milk processing industry have been

defined by the Small Business Administration as those employing less

than 500 employees. There are approximately 250 fluid milk processors

subject to the provisions of the Fluid Milk Promotion Order. Most of

the parties subject to the Order are considered small entities.

This rule would modify the term of office and membership provisions

of the Fluid Milk Promotion Order. The proposed amendments would allow

a National Fluid Milk Processor Promotion Board member who changes

fluid milk processor affiliations during his or her term to be eligible

to serve on the Board in another capacity during that same term. The

proposed amendments would also modify the term of Board members to

allow any member elected during the initial period to serve a term of

one or two years to be eligible for reappointment for two additional

three-year terms. The proposed amendments should clarify the Order with

respect to membership status and term limits of its members.

This rule would also amend order language in conformance with the

1996 Federal Agriculture Improvement and Reform Act; the definition of

research would be changed to conform with the definition in the Act and

the order would be revised to reflect changes in the 1996 Act

concerning those fluid milk processors who may request a referendum to

suspend or terminate the order and who may vote to suspend or terminate

the order or adjust the assessment rate.

Further, the rule would also revise or remove obsolete or

unnecessary order language in conformance with the President's

Regulatory Reform Initiative. Pursuant to 5 U.S.C. 605(b), the

Agricultural Marketing Service has certified that this rule would not

have a significant economic impact on a substantial number of small

entities.

SUPPLEMENTARY INFORMATION: The Department is issuing this proposed rule

in conformance with Executive Order 12866.

[[Page 47094]]

This proposed rule has been reviewed under Executive Order 12988,

Civil Justice Reform. This rule is not intended to have a retroactive

effect. If adopted, this proposed rule would not preempt any State or

local laws, regulations, or policies unless they present an

irreconcilable conflict with this rule.

The Fluid Milk Promotion Act of 1990, as amended, authorizes the

Fluid Milk Promotion Order. The Act provides that administrative

proceedings must be exhausted before parties may file suit in court.

Under section 1999K of the Act, any person subject to a Fluid Milk

Promotion Order may file with the Secretary a petition stating that the

Order, any provision of the Order, or any obligation imposed in

connection with the Order is not in accordance with the law and request

a modification of the Order or to be exempted from the Order. A person

subject to an order is afforded the opportunity for a hearing on the

petition. After a hearing, the Secretary would rule on the petition.

The Act provides that the district court of the United States in any

district in which the 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.

In accordance with the Paperwork Reduction Act (44 U.S.C. Chapter

35), the forms and reporting and recordkeeping requirements that are

included in the Fluid Milk Promotion Order have been approved

previously by the Office of Management and Budget (OMB) and were

assigned OMB No. 0581-0093, except for Board members' nominee

information sheets that were assigned OMB No. 0505-0001.

Statement of Consideration

The proposed rule would amend certain provisions of the Fluid Milk

Promotion Order. Certain proposed amendments would modify the term

limits and the membership status provisions of the Order. The proposed

amendments would allow a National Fluid Milk Processor Promotion Board

member who changes fluid milk processor affiliations during his or her

term to be eligible to serve on the Board in another capacity during

that same term. Under current order provisions, a Board member who

changes fluid milk processor affiliations during his or her term is

ineligible to serve on the Board in any capacity.

The proposed amendments would also modify the term of Board members

to allow any member elected during the initial period to serve a term

of one or two years to be eligible for reappointment for two additional

three-year terms. Currently, the Order states that a Board member

appointed to serve during the initial period is eligible to be

reappointed to serve only one additional three-year term. Under these

order provisions, some Board members will serve an initial term of less

than three years because of the staggering of terms. The Board contends

that the proposed amendments will clarify the Order with respect to

membership status and term limits of its members.

This document also proposes to amend the Fluid Milk Promotion Order

to conform with legislated changes made by the recently enacted 1996

Federal Agriculture Improvement and Reform Act (P.L. 104-127). Section

146 of the Act amends sections 1999C(6), 1999N(b)(2), 1999O(c), and

1999O(a) of the Fluid Milk Promotion Act of 1990, as amended, thereby

necessitating changes to the Fluid Milk Promotion Order. The following

sections of the Order would be amended on this basis:

1. In Sec. 1160.112, Research would be redefined in conformance

with the Act.

2. In Sec. 1160.501, paragraphs (a) and (b)(2) would be amended in

conformance with the Act in order to specify those fluid milk

processors who may request a referendum to suspend or terminate the

Order.

3. In Sec. 1160.605, paragraph (b)(2) would be amended in

conformance with the Act in order to specify those fluid milk

processors who, on the basis of a referendum, may vote to suspend or

terminate the Order, or adjust the assessment rate.

The President's Regulatory Reform Initiative, among other things,

directs agencies to remove obsolete and unnecessary language and to

find less burdensome ways to achieve regulatory goals. Changes are

proposed in conformance with the initiative. These amendments to the

Order and regulations would revise or remove order language that was

needed to implement the order but is no longer needed. This language is

obsolete and unnecessary because it relates to the initial fiscal

period and the previously conducted initial continuation referendum.

Provisions of the following sections of the Order would be amended on

this basis:

1. Sec. 1160.108 Fluid milk processor.

2. Sec. 1160.113 Fiscal period.

3. Sec. 1160.116 Initial referendum.

4. Sec. 1160.209 Duties of the Board.

5. Sec. 1160.211 Assessments.

6. Sec. 1160.501 Continuation referenda.

7. Sec. 1160.605 Date of the referendum.

List of Subjects in 7 CFR Part 1160

Fluid milk products, Milk, Promotion.

For the reasons set forth in the preamble, it is proposed that 7

CFR Part 1160 is amended as follows:

PART 1160--FLUID MILK PROMOTION PROGRAM

1. The authority citation for 7 CFR Part 1160 continues to read as

follows:

Authority: 7 U.S.C. 6401-6417.

2. In Sec. 1160.108, paragraph (a) is revised to read as follows:

Sec. 1160.108 Fluid milk processor.

(a) Fluid milk processor means any person who processes and markets

commercially fluid milk products in consumer-type packages in the

United States, except that the term fluid milk processor shall not

include in each of the respective fiscal periods those persons who

process and market not more than 500,000 pounds of such fluid milk

products during the representative month, which shall be the first

month of the fiscal period; Provided, however, that for the fiscal

period following the initial fiscal period, the representative month

shall be September 1995.

* * * * *

3. Section 1160.112 is revised to read as follows:

Sec. 1160.112 Research.

Research means market research to support advertising and promotion

efforts, including educational activities, research directed to product

characteristics, and product development, including new products or

improved technology in production, manufacturing or processing of milk

and the products of milk.

4. Section 1160.113 is revised to read as follows:

Sec. 1160.113 Fiscal period.

Fiscal period means the initial period of up to 30 months that this

subpart is effective. Thereafter, the fiscal period shall be such

annual period as the Board may determine, except that the Board may

provide for a lesser or greater period as it may find appropriate for

the period immediately after the initial fiscal period to assure

continuity of fiscal periods until the beginning of the first annual

fiscal period.

Sec. 1160.116 [Removed and Reserved]

5. Section 1160.116 is removed and reserved.

Sec. 1160.200 [Amended]

6. In Sec. 1160.200, paragraph (a) is amended by adding the words

``in the position previously held by such

[[Page 47095]]

member'' after the words ``membership on the board''.

7. In Sec. 1160.201, paragraph (b) is revised to read as follows:

Sec. 1160.201 Term of office.

* * * * *

(b) No member shall serve more than two consecutive terms, except

that any member who is appointed to serve for an initial term of one or

two years shall be eligible to be reappointed for two three-year terms.

Appointment to another position on the Board is considered a

consecutive term.

Sec. 1160.209 Duties of the board.

8. In Sec. 1160.209, paragraph (b) is revised to read as follows:

* * * * *

(b) To prepare and submit to the Secretary for approval a budget

for each fiscal period of the anticipated expenses and disbursements in

the administration of this subpart, including a description of and the

probable costs of consumer education, promotion and research projects;

* * * * *

9. In Sec. 1160.211, paragraphs (a)(1) and (a)(2) are revised to

read as follows:

Sec. 1160.211 Assessments.

(a)(1) Each fluid milk processor shall pay to the Board or its

designated agent an assessment of $.20 per hundredweight of fluid milk

products processed and marketed commercially in consumer-type packages

in the United States by such fluid milk processor. Producer-handlers

required to pay assessments under section 113(g) of the Dairy

Production Stabilization Act of 1983 (7 U.S.C. 4504(g)), and not exempt

under Sec. 1160.108, shall also pay the assessment under this subpart.

No assessments are required on fluid milk products exported from the

United States. The Secretary shall have the authority to receive

assessments on behalf of the Board.

(2) The Secretary shall announce the establishment of the

assessment each month in the Class I price announcement in each milk

marketing area by adding it to the Class I price for the following

month. In the event the assessment is suspended for a given month, the

Secretary shall inform all fluid milk processors of the suspension in

the Class I price announcement for that month. The Secretary shall also

inform fluid milk processors marketing fluid milk in areas not subject

to milk marketing orders administered by the Secretary of the

establishment or suspension of the assessment.

* * * * *

10. Section 1160.501 is amended by removing paragraph (a),

redesignating paragraphs (b) through (d) as paragraphs (a) through (c),

removing the the cross reference ``1160.501(c)'' in paragraph (c) and

adding in its place ``1160.501(b)'', and revising newly designated

paragraphs (a) and (b)(2) to read as follows:

Sec. 1160.501 Continuation referenda.

(a) The Secretary at any time may conduct a referendum among those

persons who the Secretary determines were fluid milk processors during

a representative period, as determined by the Secretary, on whether to

suspend or terminate the order. The Secretary shall hold such a

referendum at the request of the Board or of any group of such

processors that marketed during a representative period, as determined

by the Secretary, 10 percent or more of the volume of fluid milk

products marketed in the United States by fluid milk processors voting

in the preceding referendum.

(b) * * *

(1) * * *

(2) By fluid milk processors voting in the referendum that marketed

during a representative period, as determined by the Secretary, 40

percent or more of the volume of fluid milk products marketed in the

United States by fluid milk processors voting in the referendum.

11. In Sec. 1160.605, paragraph (a) is removed, paragraphs (b)

through (c) are redesignated as paragraphs (a) through (b), and newly

designated paragraph (b)(2) is revised to read as follows:

Sec. 1160.605 Date of referendum.

* * * * *

(b) * * *

(1) * * *

(2) Upon request of the Board or upon request of any group of fluid

milk processors that among them marketed during a representative

period, as determined by the Secretary, 10 percent or more of the

volume of fluid milk products marketed by fluid milk processors voting

in the preceding referendum.

Dated: August 30, 1996.

Kenneth C. Clayton,

Acting Administrator.

[FR Doc. 96-22788 Filed 9-5-96; 8:45 am]

BILLING CODE 3410-02-P