This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

48887 

Vol. 86, No. 167 

Wednesday, September 1, 2021 

1USDA Federal Milk Marketing Order Statistics, 

Other Use Volumes, March and April, 2015 through 

2021. 

2USDA, National Agricultural Statistics Service, 

Monthly Milk Production data, 2012 through 2020. 

3Trends in U.S. Food Security, 2019; Update for 

September 9, 2020. https://www.ers.usda.gov/ 

topics/food-nutrition-assistance/food-security-inthe-us/interactive-charts-and-highlights/ 

#childtrends, accessed August 23, 2021. 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Parts 1146 and 1147 

[Doc. No. AMS–DA–21–0013] 

RIN 0581–AE00 

Establishment of a Dairy Donation 

Program 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Interim final rule; request for 

comments. 

SUMMARY: This rule establishes the Dairy 

Donation Program as required by the 

Consolidated Appropriations Act of 

2021. Under the program, eligible dairy 

organizations that account to a Federal 

milk marketing order and incur a 

qualified expense related to certain 

dairy product donations may apply for 

and receive reimbursements for those 

donations. The program is intended to 

facilitate donation of eligible dairy 

products and prevent and minimize 

food waste. 

DATES:

Effective Date: This interim final rule 

is effective September 2, 2021 and 

expires September 1, 2023, unless 

extended by notification in the Federal 

Register. 

Public Comment Date: Public 

comments on this interim final rule 

must be submitted on or before 

November 1, 2021. 

Information Collection Comment 

Date: Pursuant to the Paperwork 

Reduction Act, comments on the 

information collection burden must be 

received by November 1, 2021. 

ADDRESSES: Comments can be submitted 

online at www.regulations.gov. 

Comments received will be posted 

without change, including any 

personally identifying information 

provided. Comments will be made 

available via the internet at 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Erin 

Taylor, Director, Order Formulation and 

Enforcement, AMS Dairy Program, 

USDA; 1400 Independence Avenue SW, 

Room 2973–S, Washington, DC 20250; 

telephone: (202) 720–4392; email: DDP@

usda.gov; web address: 

www.ams.usda.gov/ddp. 

SUPPLEMENTARY INFORMATION: Section 

762 of the Consolidated Appropriations 

Act of 2021 (CAA) (Pub. L. 116–260) 

authorizes the Secretary of Agriculture 

(Secretary) to establish a program to 

reimburse dairy organizations for 

donated dairy products to non-profit 

organizations for distribution to 

recipient individuals and families. The 

Secretary delegated authority to 

establish and administer this program to 

the Agricultural Marketing Service 

(AMS). This rule outlines the provisions 

of the new Dairy Donation Program 

(DDP) codified at 7 CFR part 1147. 

Program provisions are intended to 

encourage the donation of dairy 

products and to prevent and minimize 

food waste. The DDP is an additional 

dairy donation program that overlays on 

existing USDA dairy milk donation 

activities such as the Milk Donation 

Reimbursement Program (MDRP). The 

MDRP was established as part of the 

2018 Farm Bill to facilitate the donation 

of fluid milk products and avoid food 

waste. The program was funded for $9 

million in fiscal year 2019, and $5 

million per fiscal year thereafter. DDP 

and MDRP are separate from USDA 

purchase programs. The donation 

program provides for reimbursement of 

certain costs for donations made 

between two private entities. USDA’s 

TEFAP and Section 32 are done through 

a bid process where USDA purchases 

the product and arranges for delivery to 

the distribution point. 

This rule also amends provisions of 

the MDRP (codified at 7 CFR part 1146), 

where appropriate, to gain 

administrative efficiencies and lessen 

the burden for entities participating in 

the two programs. DDP and MDRP are 

separate and distinct from the USDA 

safety net program (Dairy Margin 

Coverage), indemnity and disaster 

assistance programs, risk management 

tools through the public-private 

partnership of the Federal Crop 

Insurance Program, or USDA purchases 

of commodities, which may include 

dairy products depending on the market 

conditions and demand from school 

lunch or nutrition programs. 

Background 

In 2020, the COVID–19 pandemic 

disrupted dairy supply chains and 

displaced significant volumes of milk 

normally used in food service channels. 

This led to milk being dumped or fed to 

animals across the United States; AMS 

estimates that the volume of milk 

dumped due to pandemic-related 

supply chain issues was almost triple 

what is typically observed during 

normal market conditions.1 At the same 

time, amidst surging unemployment and 

economic hardship nationwide, an 

increasing number of individuals have 

been in need of nutrient-dense foods 

such as dairy products. Throughout 

2020 and 2021, milk and dairy products 

have been in food donations authorized 

under the Coronavirus Aid, Relief, and 

Economic Security Act (CARES) and 

through the Commodity Credit 

Corporation (CCC). In December 2020, 

Congress also authorized an additional 

$400 million until expended to establish 

the DDP, designed to encourage the 

timely and efficient distribution of dairy 

products to families and individuals 

while reducing food waste. 

While the DDP is intended to assist in 

balancing the supply chain during the 

pandemic recovery, it also will provide 

the benefit of creating an incentive to 

donate dairy products during the 

normal spring flush of milk production. 

During normal marketing years (prepandemic), daily milk production in the 

spring averaged 6 to 7 percent more 

than in the lower production months of 

the fall.2 Economic Research Service 

(ERS) 2019 food security data estimates 

that 10.5 percent of U.S. households 

were food insecure at some time during 

2019.3 ERS 2020 data has not been 

released, but it is reasonable to assume 

food insecurity was higher in 2020 

because of high unemployment and 

nationwide economic hardship. The 

United States remains in the midst of 

the recovery, and even when 


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4Sec. 762(a)(1) of the Consolidated 

Appropriations Act of 2021. 

5Sec. 1431 of the Agricultural Act of 2014 (7 

U.S.C. 9071(a)). Implementing regulations are 

codified at 7 CFR part 1147. 

employment returns to more normal 

levels there will continue to be food 

insecurity. The persistent need for 

nutrient-dense foods such as dairy 

products can be met, in part, through 

donations encouraged by the DDP. 

As detailed later in this rule, the 

normal rulemaking process would be 

impracticable, unnecessary, and 

contrary to the public interest in light of 

the importance of distributing donated 

dairy products as quickly as possible to 

individuals and families. Therefore, 

AMS finds that there is good cause to 

forgo the notice and comment 

requirements in the Administrative 

Procedure Act (APA) for this 

rulemaking. 

The following paragraphs give a 

general overview of how the DDP will 

operate. Detailed explanations of 

program provisions can be found later 

in the Program Provisions section. 

Who is eligible to participate? 

Program eligibility is open to eligible 

dairy organizations (EDOs), defined as 

dairy farmers (either individually or as 

part of a cooperative) or dairy 

processors that meet the following 

conditions: (1) Account to a Federal 

milk marketing order (FMMO) 

marketwide pool; and (2) incur a 

qualified expense. Although the 

definition of EDO includes individual 

dairy farmers, many such farmers might 

not meet the other specified conditions 

to qualify as EDOs. For example, many 

such farmers would not incur qualified 

expenses because they do not donate 

eligible dairy products, since they do 

not have the infrastructure to process 

raw milk into such products. Those 

individual farmers who do meet the 

required conditions, however, would 

qualify as EDOs under statutes and this 

rule for both the DDP and MDRP. 

As explained below, the DDP and 

MDRP refer to the same statutory EDO 

definition; therefore, this rule amends 

the MDRP to reflect the statutory 

interpretation explained below. 

(1) Account to a FMMO Marketwide 

Pool 

The DDP authorizing statute 4 adopts 

the EDO definition contained in the 

statute establishing the MDRP.5 When 

AMS issued the final rule for the MDRP, 

it interpreted the statutory language, 

‘‘account to a FMMO marketwide pool’’, 

to apply to entities that are regulated by, 

and therefore file reports with, a FMMO. 

Participation in the MDRP has been 

limited, partly due to the requirement to 

be regulated. 

The COVID–19 pandemic and its 

impacts affected the entire United 

States. Supply chain disruptions 

described earlier were not limited to 

only those participating in a FMMO. 

Consequently, Congress authorized the 

DPP through a broad relief package. In 

reviewing Congress’s intent to 

encourage dairy product donation 

across the country, AMS has determined 

the interpretation of ‘‘account to’’ 

requiring regulation by a FMMO is too 

narrow; instead, an EDO could ‘‘account 

to’’ a FMMO marketwide pool by filing 

a report with a FMMO office. 

Consequently, this rule revises the 

definition of ‘‘eligible dairy 

organization’’ for MDRP by removing 

the requirement that the EDO be 

regulated under a FMMO. It also adopts 

the same definition for the DDP. 

The report the EDO files to ‘‘account 

to’’ a FMMO marketwide pool will list 

the fresh fluid products and/or bulk 

dairy commodity products purchased 

and how they were utilized to produce 

donated eligible dairy products. EDOs 

can contact their local FMMO office or 

access the DDP website to determine the 

applicable FMMO office where the 

report should be filed. Since EDOs may 

not know they will be donating product 

during the production month, reports 

may be filed retroactively. Filing of this 

report for the purpose of participating in 

the DDP will not cause the EDO to 

become regulated by the FMMO. 

(2) Incur a Qualified Expense 

The statute further specifies that an 

EDO must incur a qualified expense. 

Since only Class I fluid products are 

donated through the MDRP and most 

Class I processors are regulated by a 

FMMO, incurring a qualified expense in 

the MDRP is currently interpreted as 

paying minimum classified values into 

a FMMO pool because that is the 

requirement for processors regulated by 

a FMMO. As explained above, an EDO 

no longer needs to be regulated under a 

FMMO. This rule adds a definition of 

‘‘qualified expense’’ to MDRP 

regulations to specify that a qualified 

expense is not tied to the FMMO 

regulatory requirement of paying 

minimum classified values. The same 

definition also applies to the DDP. 

EDOs incur a qualified expense by 

either purchasing fresh fluid milk 

product (raw milk, skim milk, cream, or 

concentrated fluid milk products) for 

processing into an eligible dairy product 

or purchasing bulk dairy commodity 

product for further processing into an 

eligible dairy product. 

Dairy processors are often associated 

with buying fresh fluid milk products 

for processing into dairy products. The 

structure of the dairy industry is such 

that processors are also purchasing bulk 

dairy commodity products for further 

processing into retail packaging. For 

example, a processor buys 40-pound 

cheese blocks to further process and 

package into 8-ounce blocks or bags of 

shredded cheese typically preferred by 

consumers and eligible distributors 

alike. The DDP is intended to facilitate 

these types of product donations. 

Therefore, in addition to processors who 

buy fresh fluid milk for processing, the 

DDP will allow processors who 

purchase and further process bulk 

commodities for donation to qualify as 

an EDO. To be considered an EDO, a 

secondary processor will also need to 

account to a FMMO marketwide pool as 

described earlier. 

Once these two above conditions— 

accounting to a FMMO and incurring a 

qualified expense—are met, EDOs 

participate in the program by forming 

partnerships with eligible distributors 

and then submitting a Dairy Donation 

and Distribution Plan (Plan) to AMS for 

approval. If an EDO or eligible 

distributor is looking for a partner, they 

may contact DDP Office for assistance. 

Because regulations now include a 

definition of ‘‘qualified expense’’, the 

definition of ‘‘eligible dairy 

organization’’ is further revised to cite 

that definition when referring to the 

requirement that an EDO must incur a 

qualified expense. 

What will be reimbursed? 

Upon Plan approval, EDOs can submit 

a Reimbursement Claim Form (Claim 

Form) to receive reimbursement for 

donations made. DDP will reimburse 

EDOs for the all or part of the following: 

(1) Input costs—fresh fluid milk or bulk 

dairy commodity product milk 

equivalent used in the eligible dairy 

product; (2) manufacturing costs; and 

(3) transportation costs. 

(3) Input Costs—Fresh Fluid Milk or 

Bulk Dairy Commodity Product Milk 

Equivalent 

In the FMMO system, milk is priced 

based on its end use. FMMO 

classifications are generally: Class I— 

traditionally the highest class price—for 

beverage fluid milk products such as 

whole, skim, nonfat, and flavored milks; 

Class II for soft products such as yogurt, 

ice cream, and packaged fluid cream; 

Class III for spreadable and hard 

cheeses; and Class IV for butter and 

milk products in dried form. 

Announced monthly, FMMO-minimum 

classified prices reflect surveyed endVerDate Sep<11>2014 16:01 Aug 31, 2021 Jkt 253001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\01SER1.SGM 01SER1

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6USDA, Federal Milk Marketing Order Statistics, 

Final Class and Component Prices by Order. 

product wholesale market prices. Under 

a FMMO, regulated processors are 

required to pay at least minimum 

classified values for how they use their 

milk. 

For processors purchasing and 

processing fresh fluid milk products 

(raw milk, skim milk, cream, or 

concentrated fluid products), the DDP 

will reimburse for the FMMO-minimum 

classified value applicable on the date 

of production for fresh fluid milk 

products used to make the donated 

eligible dairy product. FMMO prices are 

a good approximation of what the 

processor paid for the fresh fluid milk 

products because they represent 

observed market values paid for product 

at the time of purchase. The DDP will 

not reimburse for powders and other dry 

dairy products used as an ingredient in 

eligible dairy products (for example, 

powder used to fortify cheeses or ice 

cream). 

Reimbursement is not extended to 

these ingredients because the DDP is 

designed to encourage the use of excess 

fresh fluid milk for donation, rather 

than being dumped. Dry milk powders 

in retail packaging, such as 10-ounce 

containers of nonfat dry milk, which are 

made directly from fresh fluid milk, are 

considered eligible dairy products 

under this program as it is likely surplus 

fresh fluid milk was manufactured into 

dry milk powder as opposed to being 

dumped. 

Since FMMO-minimum classified 

prices are on a hundredweight basis, the 

EDO will report its donation in the 

quantity and size of the donated 

product, which will be converted to 

hundredweights with a yield factor 

(how much product can be made from 

100 pounds of milk). Applicable 

announced minimum class skim and 

butterfat prices will be used in 

determining the input cost of the 

donated dairy product. The EDO will 

have the ability to provide its actual 

product yield factor or the EDO can use 

a standard yield factor. Standard yield 

factors will be posted on the Dairy 

Donation Program website. 

Processors buying bulk dairy 

commodity products for further 

processing and donation, as described 

earlier, will be reimbursed at the 

classified use value applicable for the 

month the eligible dairy product was 

processed in the consumer-type 

package. The reimbursed value will 

represent the milk-equivalent market 

price of the bulk dairy product at the 

time of conversion into an eligible dairy 

product. 

(4) Manufacturing Costs 

Processors incur expenses beyond 

input costs to make dairy products. To 

encourage dairy product donations, the 

DDP will reimburse for some of the 

costs to convert fresh fluid milk product 

into an eligible dairy product. 

Manufacturing costs will be 

reimbursed at the make (manufacturing) 

allowance levels in the FMMO system, 

which are generally accepted by the 

industry as representative costs of 

manufacturing dairy products from raw 

milk. For Class I and II, the Class IV 

make allowance contained in the Class 

IV price formula will be applied. AMS 

lacks data on manufacturing costs for 

Class I and II products and therefore 

selects the lower of the two FMMO 

make allowances to ensure processors 

are not reimbursed for more than their 

actual manufacturing costs. As Class I 

and II products require different 

processing, the actual manufacturing 

costs could be higher than the Class IV 

manufacturing allowance. This rule 

seeks public comment and supporting 

data related to actual manufacturing 

costs for Class I and II products. For 

Class III and IV products, the 

manufacturing allowances in the 

respective class price formulas will be 

applied. 

Currently, the Class III and Class IV 

FMMO makes allowances are $3.17 and 

$2.16 per hundredweight, respectively, 

for milk containing 3.5 percent butterfat. 

If the FMMO make allowances are 

updated in the future, the DDP will be 

automatically adjusted to reflect these 

changes. 

(5) Transportation Costs 

Transportation costs from the 

processor to distribution outlet are often 

cost prohibitive. Absent reimbursement, 

processors may not be willing to incur 

additional transportation costs and 

feeding organizations may lack the 

funding to cover these costs to facilitate 

the donation. DDP aims to facilitate 

timely donations and reduce food waste. 

Therefore, this program will cover part 

of the transportation costs from the EDO 

to the eligible distributor. This may be 

especially beneficial to rural 

communities whose donation sites are 

often far from plants serving them and 

who may not receive assistance from 

other government feeding programs 

with distribution points closer to urban 

centers. 

As the reimbursement value will be 

paid to the EDO, the DDP will only 

reimburse for transportation if the EDO 

incurred the expense. If donated eligible 

dairy products are picked up from the 

plant by the eligible distributor, no 

transportation reimbursement will be 

paid. The transportation cost 

reimbursement rate is defined later in 

this rule. 

(6) Total Reimbursement Value 

Section 762(d)(2)(A) of the CAA 

specifies the total reimbursement—the 

sum of input, manufacturing, and 

transportation costs—must be set 

neither too high (such that it would 

‘‘interfere with the commercial 

marketing of milk or dairy products’’) 

nor too low (such that it would fail to 

‘‘be sufficient to avoid food waste’’). The 

statute further requires total 

reimbursement to be between the 

highest and lowest of the classified milk 

values. To ensure costs can be 

sufficiently covered for most donations, 

total reimbursement payment, on a per 

hundredweight basis, will be capped at 

the Class I value for the highest FMMO 

differential zone (Dade County, Florida). 

Capping at the higher FMMO zone will 

allow for Class I handlers to obtain some 

reimbursement for manufacturing and 

transportation costs. 

Section 762(d)(2)(B)(iv) of the CAA 

further allows the Secretary to maintain 

traditional price relationships—Class I 

being the highest, followed in sequence 

by II, III and IV—in setting the 

reimbursement rate. In 2020, dairy 

markets experienced pronounced class 

price inversions, where the Class III 

price was significantly higher than the 

Class I price in many areas of the 

country. However, the Class III price has 

been above the Class I price in Dade 

County, Florida only three times since 

the current pricing system was adopted 

on January 1, 2000.6 Such extreme 

inversions are not anticipated in the 

foreseeable future, as both short-term 

COVID–19-related disruptions and longterm production capacity issues are 

beginning to ease. While the DDP does 

not directly determine classified prices 

and price relationships, the program 

rules should not exacerbate price 

inversions if they occur. Therefore, in 

times of price inversion, where the Class 

I price is not the highest class price, 

total reimbursements will continue to be 

capped at the Class I price for Dade 

County, Florida. 

When do plans and reimbursement 

claims need to be submitted? 

Entities must submit Plan and Eligible 

Distributor Certification Forms 

(Certification Forms) to AMS for 

approval before they can submit Claim 

Forms for reimbursement. AMS will 

approve or disapprove Certification 


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7As indicated in the Economic Analysis, USDA 

expects the DDP to expend $68 million annually. 

In determining funds available for this retroactive 

period, USDA is limiting expenditures to 

approximately 80 percent ($50 million), consistent 

with other USDA COVID–19 recovery programs (7 

CFR part 9—Coronavirus Food Assistance Program). 

Forms within 15 business days of 

receipt. Reimbursements claims, along 

with supporting documentation, can be 

filed any time after the Plan is approved 

and the donation is made. AMS will use 

the supporting documentation to verify 

program requirements were met. Plans 

only need to be submitted once for 

approval. The DDP does not require 

annual Plan renewal. 

How will AMS handle both the DDP and 

MDRP? 

Although program funds for the DDP 

and MDRP are statutorily prohibited 

from being consolidated, the two 

programs will operate as one from a 

stakeholder standpoint. EDOs making 

Class I fluid milk product donations— 

which are covered by both programs— 

will be reimbursed through MDRP funds 

at the difference between the Class I and 

lowest classified price and receive a 

supplemental reimbursement of the 

lowest classified price plus the 

manufacturing and transportation cost 

reimbursement through DDP funds. 

Total combined reimbursement will be 

capped at the Class I price in Dade 

County, Florida. 

EDOs already enrolled in MDRP will 

automatically be enrolled in the DDP 

and qualify to receive supplementary 

payments for fluid milk products 

donated under their currently approved 

MDRP Plans. To lessen the burden on 

applicants and gain administrative 

efficiencies, new Plan and Claim Forms 

will be used for both the DDP and 

MDRP. AMS will ensure program funds 

are paid according to the provisions of 

both programs. Finally, this interim 

final rule simultaneously amends the 

MDRP regulations, where applicable, 

reflecting the new Plan, Certification 

Form, Report of Receipts and 

Utilization, and Claim Forms that will 

be used to administer the program. 

Will there be a retroactive period for 

reimbursement? 

Section 762(h) of the CAA requires 

supplementary payments be made to 

EDOs participating in the MDRP for 

donations made on or after January 1, 

2020. Since the statute allows for 

retroactive reimbursement to those 

participating in DDP, a retroactive date 

of January 1, 2020, also applies to the 

DDP to better streamline administration 

of the two programs. To ensure adequate 

availability of funds for donations made 

before enactment of the CAA, total 

program expenditures for eligible dairy 

product donations made from January 1, 

2020 to December 27, 2020, will be 

limited to no more than $50 million.7

An EDO seeking retroactive 

reimbursement must include in its Plan 

information on the volume of these 

donations from January 1, 2020, through 

December 27, 2020. A deadline for 

requesting retroactive reimbursement 

will be posted on the AMS web page for 

DDP. If total reimbursement requests 

exceed $50 million, reimbursements 

will be prorated. 

Program Provisions 

The following details the DDP 

provisions and amendments to the 

MDRP, where applicable. 

Definitions 

The statute includes definitions for 

terms used. Section 1147.1 provides 

definitions of those terms as they are 

used in the new program. Key terms are 

‘‘eligible dairy organization,’’ ‘‘eligible 

dairy product,’’ ‘‘eligible distributor,’’ 

‘‘eligible partnership,’’ and ‘‘qualified 

expense.’’ 

Eligible dairy organization. As 

explained in the Background section, 

section 762(a)(1) of the CAA adopts the 

same EDO definition contained in the 

statute establishing the MDRP. See Sec. 

1431(a) and (b) of the Agricultural Act 

of 2014 (7 U.S.C. 9071(a)). The 

regulatory definition matches the 

statutory definition, which specifies that 

a dairy organization eligible to 

participate in the program is a dairy 

farmer, either individually or as part of 

a cooperative, or a dairy processor that: 

(1) Accounts to a FMMO marketwide 

pool; and (2) incurs qualified expenses. 

See id. 

Eligible dairy product. Section 

762(a)(2) of the CAA specifies that only 

dairy products primarily made from 

cow’s milk, including fluid milk, that 

are produced and processed in the 

United States are eligible for donation 

and reimbursement under the DDP. 

Accordingly, § 1147.1 defines ‘‘eligible 

dairy product’’ as a dairy product 

meeting the commodity specifications 

referenced in § 1147.3. Currently, other 

than cow’s milk, there is not a surplus 

of milk or any other form of milk being 

dumped at the farm. Given that the 

program is designed to prevent surplus 

milk from being dumped at the farm, it 

is the Secretary’s discretion to limit to 

cow’s milk. 

Eligible distributor. Section 762(a)(3) 

of the CAA defines ‘‘eligible distributor’’ 

as ‘‘a public or private nonprofit 

organization that distributes donated 

eligible dairy products to recipient 

individuals and families.’’ Section 

1147.1 likewise defines ‘‘eligible 

distributor’’ as a public or private nonprofit feeding organization that 

distributes, or coordinates the 

distribution of, donated eligible dairy 

products to recipient individuals and 

families. Eligible distributors such as 

food banks, shelters, kitchens, and other 

food distribution organizations would 

be eligible so long as they are a 

nonprofit entity. Under this new 

program, participating eligible 

distributors will fill out an Eligible 

Distributor Certification Form to verify 

their non-profit status and affirm they 

have appropriate facilities and processes 

for distributing donated dairy products 

to recipient individuals and families. 

Eligible partnership. Section 762(c) of 

the CAA requires that an EDO and 

eligible distributor form a partnership to 

participate in the DDP. Each partnership 

is required to submit a Plan and a 

Certification Form, to AMS containing 

information about their respective roles. 

Requiring the parties to apply as a 

partnership ensures that all program 

provisions will be met and an agreedupon structure will be in place when 

eligible dairy products are available for 

donation and distribution. Section 

762(a)(4) of the CAA defines ‘‘eligible 

partnership’’ as ‘‘a partnership between 

an eligible dairy organization and an 

eligible distributor’’ and this rule adopts 

the same definition. 

AMS recognizes some EDOs may have 

processing plants in multiple locations 

that may report to different FMMOs. 

Similarly, eligible distributors may have 

multiple distribution sites; for example, 

several food pantries are operated by 

one umbrella organization. Thus, under 

§ 1147.102(a), the eligible partnership 

can submit one Plan to cover multiple 

plants and/or distribution points as long 

as only one EDO and one eligible 

distributor are represented. Individual 

EDOs and eligible distributors can also 

form other partnerships, but they are 

required to submit separate Plans for 

each partnership. 

Qualified expense. The statute does 

not define ‘‘qualified expense,’’ but does 

specify that one needs to be incurred to 

be eligible for program participation. 

Section 1147.1 defines ‘‘qualified 

expense’’ as the cost incurred to 

purchase fresh fluid milk for processing 

into eligible dairy products or the cost 

incurred to purchase bulk dairy 

commodity products for further 

processing into eligible dairy products. 

Qualified expense is different than the 


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reimbursement rate, which is defined 

later in this rule. 

Because defining ‘‘qualified expense’’ 

is fundamental to determining program 

eligibility and the MDRP and DDP 

reference the same ‘‘eligible dairy 

organization’’ statutory definition, the 

‘‘qualified expense’’ definition is also 

added to the MDRP regulation. 

Additional terms necessary for 

administration of the program are 

defined in § 1147.1. ‘‘Program’’ is 

defined as the Dairy Donation Program 

and ‘‘Secretary’’ is defined as the 

Secretary of the United States 

Department of Agriculture or a 

representative authorized to act in the 

Secretary’s stead. 

Commodity Specifications 

The DDP is intended to reimburse 

eligible dairy organizations for timely 

donations of eligible dairy products and 

minimize food waste. It is therefore 

reasonable for AMS to ensure that 

eligible dairy products donated under 

the DDP meet minimum food safety and 

quality standards and in package sizes 

desired by eligible distributors, 

consistent with the intent of the 

program to minimize food waste that 

might otherwise result. Section 1147.3 

defines the commodity specifications 

that must be met. Eligible dairy 

organizations must comply with all 

applicable Federal, State, and local 

laws, executive orders, and rules and 

regulations related to its performance 

under this program. In addition, to 

qualify under the program eligible dairy 

products must: 

1. Be made primarily from cow’s 

(bovine) milk produced in the United 

States; 

2. Be packaged in consumer-sized 

packaging; 

3. Meet the applicable provisions for 

dairy products in the Federal Food, 

Drug, and Cosmetic Act (21 U.S.C. 301 

et seq.), as amended. Grade ‘A’ dairy 

products shall meet the applicable 

provisions of the current edition of the 

Pasteurized Milk ordinance; and 

4. Have a sell-by, best-by, or use-by 

date no sooner than 12 days from the 

date the eligible dairy product is 

delivered to the eligible distributor. 

Program provisions specify donated 

dairy products mut be in consumersized packaging. This provision should 

be interpreted by the eligible 

partnership as to whatever consumersized package format is agreeable to 

both entities. Examples of consumersized packaging include, but are not 

limited to, gallons of milk, 8-ounce 

blocks of cheese, single serve containers 

of yogurt, 1-pound packages of butter, or 

large bags of milk if the eligible 

distributor has the ability to dispense 

(i.e., a soup kitchen). When submitting 

Plans for approval, the EDO is required 

to list what types of products it will be 

donating. AMS will check that 

information against distributor process 

provided by the eligible distributor to 

ensure it has the ability to distribute 

that types of products to be donated. 

Program Eligibility and Participation 

Section 1147.100 provides that an 

eligible dairy organization must be a 

member of a partnership whose Plan has 

been approved by AMS to be eligible for 

reimbursements under the DDP. 

Section 1147.102 outlines 

requirements for Plan submission in 

order to be considered for the program. 

Plans submitted to AMS for program 

approval must include a signed 

affirmation regarding the type of 

product to be donated and the EDO’s 

ability to process and transport eligible 

dairy products consistent with the 

requirements in the commodity 

specifications under § 1147.3. Along 

with the Plan submission, eligible 

distributors are required to submit a 

signed Certification Form, which 

includes a description of the eligible 

distributor’s distribution process, 

contact information, and a tax 

identification number to ensure 

compliance with program provisions. 

As specified in § 1147.208, AMS will 

only collect information deemed 

necessary to determine whether an 

eligible partnership’s Plan should be 

approved. All proprietary business 

information submitted will be used only 

for the purposes of the program and will 

be kept confidential by AMS. 

Section 1147.104 specifies the process 

AMS will use to review program 

applications and determine whether to 

approve Plans submitted by eligible 

partnerships. Within 15 business days 

of application submission, AMS will 

review the Plan and Certification Form, 

determine whether to approve or 

disapprove, and notify the eligible 

partnership of the determination. Under 

§ 1147.104(a)(1), AMS will review the 

information submitted by the 

partnership, including the signed 

confirmation that the partnership can 

meet the requirements related to proper 

processing, transport, storage, and 

distribution of eligible dairy products 

until they are distributed. Under 

§ 1147.104(a)(2), AMS will consider the 

extent to which the Plan would advance 

the statutory purposes of the DDP, 

namely, whether the Plan would 

facilitate the timely donation of eligible 

dairy products and prevent and 

minimize food waste. See Sec. 762(b) of 

the CAA. 

Finally, section 762(c)(2)(B)(i) of the 

CAA specifies that priority review will 

be given to submitted Plans where an 

emergency or disaster was a substantial 

factor, including a declared or renewed 

public health emergency under section 

319 of the Public Health Service Act (42 

U.S.C. 247(d)) or a disaster designated 

by the Secretary. In reviewing a Plan, 

AMS will determine if an emergency or 

disaster was a substantial factor in the 

Plan’s submission. In this case, 

‘‘substantial factor’’ means that a supply 

and/or demand disruption caused by 

the emergency or disaster event is a 

main reason for the partnership 

submitting the Plan. For example, the 

COVID–19 public health emergency— 

which caused a significant decrease in 

school and restaurant dairy demand, 

leading to large volumes of displaced 

milk and many people in need of food 

assistance—could be considered a 

justification for priority review. If an 

emergency or disaster is deemed a 

substantial factor, AMS will prioritize 

review of that Plan to facilitate 

donations and meet an immediate need. 

Section 1147.104(a)(3) incorporates 

those factors for Plan prioritization. 

Once approved, Plans do not need to 

be resubmitted in subsequent fiscal 

years, unless changes are made. Eligible 

partnerships that received 

reimbursement from the MDRP will be 

automatically enrolled in the DDP to 

receive the supplemental 

reimbursement as defined in § 1147.109. 

Reimbursement and Reimbursement 

Price 

Section 762(d) of the statute requires 

the Secretary to reimburse EDOs with 

approved Plans. Section 1147.106(a) 

provides the process and describes the 

necessary information and 

documentation AMS will require to 

verify the EDO’s donation and calculate 

its reimbursement. To receive 

reimbursement, the EDO must complete 

and submit a Reimbursement Claim 

Form (Claim Form) that includes: The 

type, volume, and manufactured date of 

the eligible dairy products donated; the 

entity type (processor or eligible 

distributor); the location(s) of the 

plant(s) that processed the eligible dairy 

product(s) and where donated dairy 

products were distributed; the universal 

product code(s) (UPCs) for donated 

product(s); the sell-by, best-by, or use-by 

date(s) for donated product(s) and the 

dates the donated dairy products were 

processed and shipped to the eligible 

distributor. 

There is no requirement dictating the 

frequency of Claim Form submissions; 

therefore, any time after its Plan is 

approved, the EDO can submit Claim 


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48892 Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Rules and Regulations 

8U.S. Energy Information Administration (EIA), 

2021; Gasoline and Diesel Fuel Update for August 

16, 2021. https://www.eia.gov/petroleum/gasdiesel/ 

, accessed August 23, 2021. 

9United States Department of Transportation, 

2021; Combination Truck Fuel Consumption Data. 

https://www.bts.gov/browse-statistical-productsand-data/freight-facts-and-figures/combinationtruck-fuel-consumption, accessed August 23, 2021. 

10 7 CFR 1005.82 and 1005.83. 

11 7 CFR 1007.82 and 1007.83. 

Forms for donations made. However, 

there is limited funding for this program 

so prompt submission may be beneficial 

to EDOs. The EDO also must provide 

adequate documentation, which should 

be available through its normal business 

records, to verify the eligible distributor 

received the donated eligible dairy 

products. Such documentation could 

include, but is not limited to, processing 

and shipping records, bills of lading, 

storage records, or receiving records 

from the eligible distributor. As 

specified in § 1147.208, AMS will only 

collect the information and 

documentation needed to verify the 

EDO’s reimbursement claim. 

Section 762(d)(4) of the CAA allows 

the Secretary to make retroactive 

reimbursements to EDOs that donated 

eligible dairy products before their 

Plans are approved. Eligible dairy 

products donated through the MDRP are 

eligible for supplemental 

reimbursement through DDP for 

donations made on or after January 1, 

2020. The statute also provides for 

retroactive reimbursement for donations 

made through DDP prior to Plan 

approval, though a specific retroactive 

date is not provided. To gain 

administrative efficiencies and 

streamline the two programs, donations 

of eligible dairy products through DDP 

beginning on the same date also will be 

eligible for reimbursement. Partnerships 

will need to submit Plan and 

Certification Forms for approval prior to 

submitting a Reimbursement Form for 

donations made prior to Plan approval. 

Accordingly, § 1147.106(a)(3) provides 

for donations of eligible dairy products 

beginning on January 1, 2020, to be 

eligible for reimbursement under this 

program. As described above, total 

reimbursement for donations made from 

January 1, 2020 through December 27, 

2020, is capped at $50 million. 

As authorized by section 762(d)(3)(B) 

of the CAA, AMS may verify the 

accuracy of supporting documentation 

with spot checks and audits under 

§ 1147.206. 

Under section 762(d)(2)(A) of the 

CAA, the Secretary shall set a 

reimbursement price that reflects the 

cost of the milk required to make the 

donated eligible dairy product, is 

between the FMMO Class I and Class IV 

minimum prices for the month of 

production, is sufficient to avoid food 

waste, and does not interfere with the 

commercial marketing of milk or dairy 

products. Section 1147.108 provides for 

reimbursement of three separate cost 

factors: (1) Input cost—fresh fluid milk 

or bulk dairy commodity product milkequivalent cost; (2) manufacturing cost 

of converting fluid milk into a product; 

and (3) transportation cost from the 

processing plant to the eligible 

distributor. Section 1147.108(a) 

provides that reimbursements will be 

the sum of the three cost factors. 

For the first of these factors, input 

cost, processors purchasing and 

processing fresh fluid milk products 

(raw milk, skim milk, cream, or 

concentrated fluid products), will be 

reimbursed at the applicable FMMO 

minimum classified skim and butterfat 

values. Processors purchasing bulk 

dairy commodity products for further 

processing into eligible dairy products 

will be reimbursed at the applicable 

FMMO minimum classified skim and 

butterfat values for the fluid milk 

equivalent contained in the bulk 

product. 

That value will be determined by the 

milk’s end use (Class I for fluid milk 

products, Class II for soft products such 

as yogurt, Class III for cheese products, 

and Class IV for butter and powder 

products) pursuant to 7 CFR 1000.40 

and the applicable classified price in 

effect for the month of production 

pursuant to 7 CFR 1000.50. 

The manufacturing cost for processing 

fluid milk is represented by the 

applicable FMMO make allowances 

contained in 7 CFR 1000.50. The DDP 

will use the FMMO make allowances in 

the Class III and IV price formulas to 

reflect manufacturing costs for Class III 

and IV products, as they are based on 

surveyed cost data of wholesale Class III 

and IV products and are generally 

accepted by industry stakeholders as 

appropriate cost estimates. For Class I 

and II products, however, the 

Department lacks data on manufacturing 

costs. As such, the lowest make 

allowance, Class IV, will be the 

representative manufacturing cost for 

Class I and II products. It is reasonable 

to expect that Class I and II products 

have different manufacturing costs than 

Class IV products due to different 

processing requirements. USDA is 

seeking comments on manufacturing 

costs for these classes of products. If 

submitted data demonstrates that actual 

Class I and II manufacturing costs differ 

significantly from the Class IV make 

allowance, then the Class I and II 

manufacturing costs could be amended 

in the final rule. If the public comment 

period results in updated make 

allowances for Class I and Class II 

products, the amended make allowances 

will not be retroactive to the effective 

date of this rule. 

As explained in the Background 

section, the program will not reimburse 

additional processing costs for bulk 

products purchased and further 

processed. Processors purchasing bulk 

dairy commodity products for further 

processing will receive the same 

manufacturing cost reimbursement as 

described above. When these processors 

buy bulk product, it is on a per-pound 

basis. It is reasonable to assume the 

price they paid for the bulk product 

represented both the fluid milk value 

(which they are being reimbursed for as 

described earlier) and the cost to 

convert the fluid milk into the bulk 

commodity. Therefore, eligible dairy 

products made from bulk dairy 

commodity products also will be 

eligible for manufacturing cost 

reimbursement. 

The transportation cost 

reimbursement will be based on the U.S. 

monthly average diesel fuel price 8 for 

the month the donation was made, a 

fuel economy factor of 6.1 miles per 

gallon,9 and the shortest hard-surface 

distance from the plant that processed 

the donated eligible dairy product to the 

eligible distributor’s physical 

distribution location. These factors are 

based on relevant government 

transportation statistics which are 

similar to those used in FMMOs with 

transportation credits, the 

Appalachian 10 and Southeast 11 Orders 

Transportation reimbursement will only 

be paid if the EDO incurred the 

transportation cost, which will be 

verified on audit. 

Section 762(h) of the CAA requires 

the Secretary to make supplemental 

reimbursements to EDOs receiving 

reimbursements under the MDRP from 

January 1, 2020, to the date when DDP 

program funds are no longer available. 

AMS recognizes an EDO under MDRP 

will also be eligible under DDP. Further, 

eligible dairy products under MDRP 

also qualify as eligible dairy products 

under DDP (notably, fluid milk 

products). Since DDP reimburses at a 

higher rate than MDRP, a supplemental 

reimbursement is needed to properly 

use funds for and fulfill the purposes of 

both programs. Section 1147.109 

provides the process AMS will follow to 

make a supplemental reimbursement to 

EDOs receiving reimbursement under 

MDRP. An EDO with an already 

approved Plan under MDRP does not 

need to apply to DDP. AMS will 

automatically reimburse the eligible 


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dairy organization the difference 

between the reimbursement it received 

under MDRP and the reimbursement it 

is eligible to receive for the same 

product under DDP, calculated in 

§ 1147.108. New applicants to the DDP 

that donate fluid milk products will be 

automatically enrolled in MDRP. Upon 

approval, AMS will make 

reimbursements under the MDRP 

provisions and then supplemental 

reimbursements under the DDP 

provisions. 

Administrative Provisions 

Section 762(g) of the CAA requires 

AMS to publish donation activity for the 

program. Accordingly, § 1147.200 

provides that AMS will periodically 

report on its publicly accessible website 

the aggregated donation activity under 

this program. Such information will 

include types and volume of product 

donated, as well as remaining available 

funds. AMS also will post on its 

publicly accessible website the Plan and 

Claim Form templates to be submitted 

for program participation. 

Section 762(e) of the CAA prohibits 

the sale of eligible dairy products 

donated under the DDP back into 

commercial markets and specifies that 

eligible distributors who violate that 

prohibition will not be eligible for 

future participation in the DDP. Section 

1147.204 implements the statutory 

prohibition and penalty for violation. In 

addition, the program prohibits 

reimbursement for donated eligible 

dairy products made in conjunction 

with marketing or promotional events. 

Section 762(f) of the CAA directs the 

Secretary to conduct appropriate 

reviews or audits to ensure the integrity 

of the DDP. Under section 762(d)(3)(B) 

of the CAA, the Secretary is further 

authorized to verify the accuracy of 

submitted documentation through spot 

checks and audits. Section 1147.206 

provides that AMS will verify the 

proper delivery of and payment for 

donated eligible dairy products. 

Specifically, AMS will ensure the 

donated eligible dairy products were 

delivered to the eligible distributor and 

the accuracy of the reimbursed value 

paid to the EDO. The section further 

provides for the review, audit, and spot 

checks of information submitted. 

As mentioned in the above 

discussions, § 1147.208 requires AMS to 

maintain confidentiality regarding 

information collected to administer the 

program and to use the information only 

for program purposes. 

A books and records provision is 

included in § 1147.209 to ensure the 

EDO maintains necessary records to be 

made available to AMS upon request in 

conjunction with an audit. 

Section 1147.210 specifies that dairy 

products sold or donated under any 

other USDA commodity purchase or 

donation program, other than the 

MDRP, are not eligible for 

reimbursement under the DDP. From 

time to time, USDA may purchase dairy 

products for use in nutrition assistance 

programs or other uses, but vendors are 

compensated for those purchases 

through funding under those program 

provisions. One of the main purposes of 

the DDP is to reduce food waste by 

encouraging the donation of additional 

dairy products through eligible 

distributors. Thus, eligible dairy 

organizations who have received 

compensation for dairy product 

purchases under other USDA programs 

may not receive reimbursements for the 

same dairy products under the DDP. 

Exemption From Notice and Comment 

Rules ‘‘relating to public property, 

loans, grants, benefits, or contracts’’ are 

not subject to the rulemaking 

requirement of the Administrative 

Procedure Act at 5 U.S.C. 553. See 5 

U.S.C. 553(a)(2). Thus, AMS is 

publishing this interim final rule 

without previously publishing a 

proposed rule because this rule relates 

to a benefit. Additionally, AMS finds it 

has good cause to do so because 

providing prior notice and an 

opportunity for comment are 

impracticable, unnecessary, or contrary 

to the public interest under 5 U.S.C. 

553(b)(B). 

In determining whether a program is 

a ‘‘benefits’’ program, courts consider 

whether ‘‘benefits’’ are clearly and 

directly involved in the agency action. 

Humana of South Carolina, Inc. v. 

Califano, 590 F.2d 1070 at 1083–84 

(D.C. Cir. 1978). The purpose of the DDP 

is to facilitate timely donation of eligible 

dairy products and to prevent and 

minimize food waste by enabling dairy 

organizations to partner with public or 

private non-profit organizations. The 

overall purpose of the DDP is similar to 

other federal programs that provide food 

and nutrition assistance to individuals 

and families in need. Furthermore, the 

DDP fulfills two needs: (1) The donated 

dairy products can provide food and 

nutrition to eligible recipients, as 

determined by eligible distributors 

(public or private non-profit 

organizations); and (2) the eligible dairy 

organizations are able to participate in 

a program where they can receive 

reimbursement for donating dairy 

products to those determined to be in 

need. In addition, under the DDP, the 

public or private non-profit organization 

determines whether the recipients 

qualify for the donated dairy products 

based on their established criteria. As 

such, individuals and families in need 

of dairy products are able to receive 

these dairy products through donation. 

AMS is issuing regulations to establish 

and administer the DDP, a program that 

is clearly and directly involved in the 

disbursement of benefits, and thus is 

exempt under section 553(a)(2) from the 

notice and comment requirements of the 

APA. 

Furthermore, the APA provides that 

an agency is not required to conduct 

notice-and-comment rulemaking when 

the agency, for good cause, finds that 

notice and comment is impracticable, 

unnecessary, or contrary to the public 

interest. 5 U.S.C. 553(b)(B). As part of 

the government’s pandemic response, 

USDA began the Farmers to Families 

Food Box Program as an emergency 

relief effort to respond to severe market 

disruptions and increased food 

insecurity caused by the pandemic. The 

program lasted from May 15, 2020, 

through May 31, 2021, during which 

time it distributed dairy products 

equivalent to more than 2.5 billion 

pounds of milk to those in need. The 

end of the Food Box program means 

there is an unmet demand for dairy 

products in feeding organizations 

previously met by government 

purchases through the Food Box 

Program. The DDP is designed to 

encourage the donation of dairy 

products to meet that demand through 

private partnerships between EDOs and 

Eligible Distributors. Due to the recent 

end of the Food Box program, there is 

an immediate need to implement the 

DDP so that donations can begin and 

meet that demand. 

In addition, Section 762 of the statute 

provides for emergencies or disaster 

declarations to be considered as a 

substantial factor in donation Plan 

submissions. As the 2021 hurricane and 

wildfire season has already begun, the 

DDP could facilitate donations in the 

possible event of upcoming emergencies 

or natural disasters that could create an 

immediate need to provide food 

assistance to impacted individuals and 

families. 

Additionally, Congress mandated that 

the Secretary establish and administer 

the DDP no later than 60 days after 

enactment of the CAA. In light of this 

mandated time frame and the 

importance of distributing donated 

dairy products as quickly as possible to 

individuals and families, the normal 

rulemaking process would be 

impracticable unnecessary, and contrary 

to the public interest. Therefore, AMS 

finds there is good cause to forgo the 


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48894 Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Rules and Regulations 

notice-and-comment requirements in 

the APA for this rulemaking. 

As a rule relating to a benefit, the 

APA requirement that regulations be 

published at least 30 days before the 

effective date does not apply. 

Additionally, this requirement also does 

not apply when an agency finds good 

cause not to delay the effective date. See 

5 U.S.C. 553(d)(3). The same reasons 

why there is good cause to dispense 

with notice and comment are applicable 

to AMS’s decision to make this rule 

effective one day after publication. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (PRA) of 1995 (44 U.S.C. 

Chapter 35), AMS has requested 

approval of new information collection 

and recordkeeping requirements for the 

DDP and comments are invited on this 

new information collection. All 

comments received on this information 

collection will be summarized and 

included in the final request for Office 

of Management and Budget (OMB) 

approval. 

Title: Establishment of a Dairy 

Donation Program. 

OMB Number: 0581–NEW. 

Expiration Date of Approval: This is 

a NEW collection. 

Type of Request: Approval of New 

Information Collection. 

Abstract: The Consolidated 

Appropriations Act of 2021 mandated 

establishment of a Dairy Donation 

Program to reimburse EDOs for milk 

used to make eligible dairy products 

donated to non-profit groups for 

distribution to recipient individuals and 

families. Under the program, EDOs 

account to a Federal milk marketing 

order (FMMO) by filling a report 

reflecting the eligible dairy products 

manufactured. Entities not already filing 

FMMO report will be required to submit 

a Report of Receipts and Utilization. All 

partnerships must submit a Dairy 

Donation and Distribution Plan and 

Eligible Distributor Certification Form 

describing the process the partnership 

would use to process, transport, store, 

and distribute eligible product to an 

eligible distributor. Once approved, the 

EDO can file a Reimbursement Claim 

Form to receive reimbursement for the 

donated eligible dairy products. 

Dairy Donation and Distribution Plan 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 1 hour per 

response. 

Respondents: Eligible dairy 

organizations. 

Estimated Number of Respondents: 

150. 

Estimated Number of Responses: 300. 

Estimated Number of Responses per 

Respondent: 2. 

Estimated Total Annual Burden on 

Respondents: 300 hours. 

Eligible Distributor Certification Form 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 15 minutes per 

response. 

Respondents: Eligible distributors. 

Estimated Number of Respondents: 

300. 

Estimated Number of Responses: 300. 

Estimated Number of Responses per 

Respondent: 1. 

Estimated Total Annual Burden on 

Respondents: 75 minutes. 

Reimbursement Claim Form 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 2 hours per 

response. 

Respondents: Eligible dairy 

organizations. 

Estimated Number of Respondents: 

150. 

Estimated Number of Responses: 

1,200. 

Estimated Number of Responses per 

Respondent: 8. 

Estimated Total Annual Burden on 

Respondents: 2,400 hours. 

Report of Receipts and Utilization 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 1 hour per 

response. 

Respondents: Eligible dairy 

organizations. 

Estimated Number of Respondents: 

15. 

Estimated Number of Responses: 90. 

Estimated Number of Responses per 

Respondent: 6. 

Estimated Total Annual Burden on 

Respondents: 90 hours. 

Comments: Comments are invited on: 

(1) Whether the proposed collection of 

the information is necessary for the 

proper performance of the functions of 

the agency, including whether the 

information will have practical utility; 

(2) the accuracy of the agency’s estimate 

of the burden of the proposed collection 

of information; (3) ways to enhance the 

quality, utility and clarity of the 

information to be collected; and (4) 

ways to minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology. 

AMS estimates 150 respondents will 

form a total of 300 partnerships. Each 

participating partnership will be 

required to submit a Dairy Donation and 

Reimbursement Plan and Eligible 

Distributor Certification Form once, 

there will not be an annual renewal 

requirement. AMS estimates 1 hour to 

complete a Dairy Donation and 

Distribution Plan. Accompanying the 

Plan, the eligible distributor will be 

required to submit and sign an Eligible 

Distributor Certification Form, which 

AMS anticipates will take 15 minutes. 

AMS estimates ten percent of the 150 

EDO participants do not already account 

to a FMMO by filing a report. Therefore, 

approximately 15 respondents will need 

to account to a FMMO by filing a Report 

of Receipts and Utilization Form. All 

other EDOs will have already accounted 

to a Federal Order through their normal 

report filing through its existing 

association with a Federal milk 

marketing order. AMS estimates 1 hour 

to complete the form. Filing of this form 

will not cause an EDO to become 

regulated by a Federal milk marketing 

order. 

Reimbursement Claim Forms can be 

submitted any time after Plan approval 

and will be processed on a quarterly 

basis. AMS estimated that to capture 

efficiencies respondents will submit 

Reimbursement Claim Forms no more 

than once per quarter and it will take 2 

hours to complete the form per quarter. 

Assuming the reporting burden will be 

completed by an administrative 

assistant employee, at an hourly salary 

rate of $21, AMS estimates the following 

annual reporting costs per participating 

partnership: For the first year of 

participation, the annualized cost is 

$196.10 (the Plan, Certification Form, 

and four Claim Forms); for the 

subsequent years of participation, the 

annualized cost is $169.60 (four Claim 

Forms). Entities needing to account to a 

Federal Order by filing a Report of 

Receipts and Utilization Form will 

experience an additional annual burden 

of $127.20 (6 responses per year). EDOs 

also are required to maintain books and 

records, for a period of 3 years, to be 

made available to AMS upon request in 

conjunction with an audit to verify the 

donations for which the EDO received 

reimbursement were in fact made. These 

records are part of normal business 

records and do not require additional 

records to be created. Such records 

include production records to verify 

yield computations and product code 

dates for donated manufactured 

products, or delivery documentation to 

verify EDO incurred a transportation 

expense. 


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Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Rules and Regulations 48895 

E-Government Act 

USDA is committed to complying 

with the E-Government Act (44 U.S.C. 

3601, et seq.) by promoting the use of 

the internet and other information 

technologies to provide increased 

opportunities for citizen access to 

Government information and services, 

and for other purposes. Forms can be 

found at http://www.ams.usda.gov/ddp 

and filed through email at ddp@

usda.gov. 

Statutory and Regulatory Authority 

Section 762 of the Consolidated 

Appropriations Act of 2021 mandates 

that AMS establish and administer a 

Dairy Donation Program (7 CFR part 

1147). The program is intended to 

facilitate the timely donation of eligible 

dairy products and prevent and 

minimize food waste. 

Executive Orders 12866 and 13563 

USDA is issuing this rule in 

conformance with Executive Orders 

12866 and 13563, which direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximizes 

net benefits (including potential 

economic, environmental, public health, 

and safety effects; distributive impacts; 

and equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. AMS has 

determined this action, mandated by 

Congress, meets the requirements set 

forth in the Consolidated 

Appropriations Act of 2021 to facilitate 

donation of eligible dairy products and 

prevent and minimize food waste. 

AMS is seeking comments on the 

economic impacts of this action on the 

industry, including availability of 

information or data that may 

demonstrate if and how DDP 

reimbursements affect the market. 

AMS considered alternative methods 

for allocating available funds under the 

program, including whether to allocate 

reimbursements equally across all the 

geographic areas of the United States or 

to target specific regions in need of milk 

donations. Ultimately, AMS determined 

that because the program’s primary 

purpose is to reduce waste associated 

with the disposition of surplus milk, the 

industry would be best served by 

allowing those with the capacity to 

process surplus milk and who are in a 

position to make donations to apply for 

the program without consideration of 

geographic location. 

This rule is not expected to have any 

quantified cost or benefits, rather the 

rule is expected to result in transfers 

consistent with the following table: 

TABLE 1—ACCOUNTING STATEMENT

Primary 

estimate Year dollar Discount rate % Period covered 

Benefits: 

Annualized Monetized ($millions/year) .................................................. 0 2021 7 FY 2021–2026. 

0 2021 3 

Costs: 

Annualized Monetized ($millions/year) .................................................. 0 2021 7 FY 2021–2026. 

0 2021 3 

Transfers—From the Federal Government to an eligible partnership: 

Annualized Monetized ($millions/year) .................................................. $71.91 2021 7 FY 2021–2026. 

68.92 2021 3 

As the program is voluntary, eligible 

partnerships are expected to only 

participate if they deem it beneficial 

depending on their individual 

circumstances. The transfers will be 

reimbursements in the form of Federal 

payments to program participants to 

help offset costs associated with eligible 

dairy product donations. 

In the normal course of transporting, 

delivering, and processing milk, a small 

volume of milk is ‘‘lost’’ each month. In 

the FMMO system, ‘‘normal losses’’ are 

estimated to be 0.25 percent of the total 

participating milk annually. Under 

certain conditions, an additional 

volume of milk cannot make it to market 

due to extraordinary circumstances, 

such as extreme weather, plant capacity 

issues, and market disruptions. This 

volume above ‘‘normal losses’’ is 

identified as ‘‘excess losses’’ in this 

analysis. According to FMMO statistics, 

‘‘excess losses’’ averaged 0.12 percent of 

the annual volume of milk participating 

in the FMMO program from 2016 

through 2020. In 2020, the COVID–19 

pandemic resulted in higher levels of 

milk that could not make it to market, 

amounting to 0.32 percent of the milk 

that participated in the FMMO program. 

In conducting an economic analysis, 

AMS assumed that milk classified as 

‘‘excess losses’’ could be made into 

eligible dairy products and donated 

under the DDP. 

To estimate the volume of excess milk 

that may be donated under the program, 

the 5-year average rate of 0.12 percent 

was applied to the projected 2021 U.S. 

milk production volume. Thus, it is 

assumed that approximately 273.2 

million pounds of milk would be 

available for dairy processors to make 

into eligible dairy products for donation 

to eligible distributors. No data exits 

from which AMS could estimate how 

much bulk commodity product could be 

available for secondary processors to 

purchase and further process into 

eligible dairy products for donation to 

eligible distributors, so that scenario 

was not considered in the economic 

analysis. AMS is seeking public 

comment on data from which to 

estimate how much bulk commodity 

product could be available for 

secondary processors to purchase and 

further process for donation. 

AMS estimated the amounts of 

butterfat and skim solids in the 

forecasted product volumes available for 

donation. The product mix included 

fluid milk, soft products, cheese, butter, 

and nonfat dry milk powder volumes, 

based on the volume of available dairy 

farmer milk. The set of products utilizes 

approximately all the butterfat and skim 

solids present in the milk available for 

donation. In the case of butter and 

nonfat dry milk powder, both products 

can be made from a given amount of 

milk. Butter requires a large amount of 

butterfat, while powder utilizes very 

little butterfat but a large amount of the 

nonfat solids. 

The DDP will reimburse EDOs for 

eligible dairy product donations for the 

input cost paid for the fluid milk or bulk 

dairy commodity product, 

manufacturing cost, and transportation 

cost. Total reimbursement must be 

between the highest FMMO Class I 

value (Dade county, Florida) and the 


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Class IV value (assumed the lowest 

classified value). This analysis projected 

2021 class prices based on USDA’s 

March 2021 World Supply and Demand 

Estimates (WASDE), using the FMMO 

price formulas. Under those 

assumptions, AMS estimates the 

program could expend between $52.1 

million and $68.7 million annually. 

Furthermore, eligible dairy product 

donations made under the MDRP are 

eligible to receive a supplemental 

reimbursement for donations made 

starting on January 1, 2020, onward. 

Supplemental reimbursement is 

calculated at the difference between the 

DDP and MDRP reimbursement values. 

The net value of these retroactive 

reimbursements is estimated at $0.5 

million, assuming the highest FMMO 

minimum Class I value at the time the 

milk for the donation was purchased. 

Total 2021 U.S. milk production was 

estimated to be 227.3 billion pounds 

(WASDE, March 2021). As described 

above, AMS estimates that 273.2 million 

pounds (0.12 percent) of excess milk 

(additional supply) would be available 

to be processed and donated through the 

DDP. Consequently, AMS does not 

anticipate this small additional 

processing volume will impact milk 

prices. It is likely there will be instances 

where dairy processors already donating 

dairy products to non-profit feeding 

organizations become eligible for 

reimbursement through DDP. However, 

those donations are not new production 

volume to be priced. That is, they would 

represent dairy products already 

processed and priced accordingly 

somewhere in the dairy supply chain. 

Furthermore, the DDP does not intend 

to reimburse for the full cost of 

processing and delivering donated dairy 

products but rather encourages excess 

milk to be used and not wasted. 

This program is expected to have a 

negligible impact on retail dairy product 

sales. Typically, populations that 

receive dairy products from non-profit 

feeding organizations do so when they 

cannot buy dairy products at retail 

outlets. Additionally, the DDP 

reimbursement rate does not cover all 

processing and transportation costs; 

therefore, it would not be a financially 

prudent decision to divert milk from 

retail outlets to donations. The 

following table provides examples of 

costs included and excluded from 

reimbursement under the DDP. This is 

not an all-inclusive listing but is 

intended to demonstrate how dairy 

product donations through this program 

are not expected to be a substitute for 

retail dairy product sales. 

TABLE 2—EXAMPLES OF COSTS INCLUDED AND EXCLUDED

Cost factor Includes Does NOT Include 

Input ..................................... • Minimum classified price of milk used in the donated 

eligible dairy product.

• Any contractually obligated monies, over the minimum classified value, due to producers. 

• Assessments for promotion and research programs, 

if applicable. 

Manufacturing ...................... • Applicable FMMO manufacturing make allowance, 

representative of the following costs: 

• Additional ingredient costs (i.e., fruit for fruit-flavored 

yogurt). 

Æ Processing Labor ........................................................ • Storage and inventory costs. 

Æ Utilities .........................................................................

Æ Non-Labor ...................................................................

• Costs of participating in the mandatory Dairy Product 

Mandatory Reporting Program. 

Æ General and Administrative.

Æ Packaging into a commodity volume.

Transportation ...................... • Fuel: Shortest hard surface mileage * monthly diesel 

price * 6.1 miles per gallon.

• Vehicle maintenance. 

• Vehicle depreciation. 

• Licensing and other administrative fees. 

In addition, DDP is a voluntary 

program and reimbursements occur after 

donations are made. Donations made 

through this program will be done 

privately without donation volumes 

being announced in advance. Therefore, 

AMS has determined the impact on 

dairy markets will not be as significant 

on the markets when compared to 

making advanced announcements on 

expected donation volume. 

Regulatory Flexibility Analysis 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (5 

U.S.C. 601–612), AMS has considered 

the economic impact of the action on 

small entities. Accordingly, AMS has 

prepared this Regulatory Flexibility 

Analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

businesses subject to such actions so 

that small businesses will not be unduly 

or disproportionately burdened. Small 

dairy farms are defined by the Small 

Business Administration (SBA) (13 CFR 

121.601) as those businesses having 

annual gross receipts of less than 

$750,000. The SBA’s definition of small 

agricultural service firms, which 

includes dairy processors, varies based 

on the type of dairy product 

manufactured. Small dairy processors 

are defined as having between 750 and 

1,250 or fewer employees, depending on 

the product made. 

According to the 2017 USDA National 

Agricultural Statistics Service (NASS) 

Census Report, there were 39,303 farms 

with milk sales. AMS estimates that 

36,158 farms, or 92 percent, would be 

considered small businesses. Dairy 

farmers of all sizes may benefit from the 

program as it will encourage donations 

of dairy products, which contain milk 

purchased from them. DDP is designed 

to reduce food waste by providing 

alternative outlets for milk to be utilized 

in donated products instead of being 

dumped due to oversupply. Often, milk 

is dumped from smaller dairy farms that 

are more costly to service because their 

pickups may be less than a full tanker 

load and/or they may be located farther 

from major trucking routes. By 

providing cost reimbursement for 

donated products, the DDP incentivizes 

processors to pick up and process the 

milk into products for donation rather 

than having it dumped. 

AMS estimates that approximately 

3,000 plants manufacture dairy products 

in the United States, owned by 

approximately 1,500 entities. According 

to AMS calculations, about 10 percent 

are operated by dairy farmer 

cooperatives, while the remaining are 

independently owned. AMS believes 

1,500 to be the universe of EDOs that 

could participate in the DDP. Of this 

universe of potential EDOs, 90 percent 

would be considered small businesses, 

based on total employee numbers. 

Participating in the DDP will not 

unduly or disproportionately burden 

small dairy processing entities. All 

entities, regardless of size, can apply for 


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the program if they file a report with a 

Federal milk marketing order and incur 

a qualified expense as defined by 

program provisions. Program provisions 

are administered without regard for 

business size. The paperwork required 

to participate asks for information that 

is part of normal business records. 

The definition of an eligible 

distributor is a public or private nonprofit feeding organization that 

distributes or coordinates distribution of 

donated eligible dairy products to 

recipient individuals and families. 

Eligible distributors, regardless of size, 

can voluntarily participate in the DDP if 

they form a partnership with an eligible 

dairy organization. The information 

collection burden for eligible 

distributors is minimal as they must 

only compete the Plan form with the 

partnering EDO. The voluntary nature of 

the program allows any eligible 

distributor to stop participating if they 

find the program causes an undue or 

disproportionate burden. 

AMS has determined establishment of 

this program will not have a significant 

economic impact on small entities. 

Program provisions will be applied 

uniformly to both large and small 

businesses and are not expected to 

burden small entities unduly or 

disproportionately. 

Executive Order 13175 

This interim final rule has been 

reviewed under Executive Order 

13175—Consultation and Coordination 

with Indian Tribal Governments. 

Executive Order 13175 requires Federal 

agencies to consult and coordinate with 

tribes on a government-to-government 

basis on: (1) Policies that have tribal 

implication, including regulation, 

legislative comments, or proposed 

legislation; and (2) other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

Tribal governments operating nonprofit organizations feeding recipient 

individuals and families could qualify 

as eligible distributors and thus benefit 

from participation in the DDP. The 

regulatory burden from participating 

would be minimal, estimated at 15 

minutes for completing an Eligible 

Distributor Certification Form. 

AMS has assessed the impact of this 

proposed rule on Indian tribes and 

determined that this rule would not 

have tribal implications that require 

consultation under Executive Order 

13175. AMS hosts a quarterly 

teleconference with tribal leaders where 

matters of mutual interest regarding the 

marketing of agricultural products are 

discussed. Information about the DDP 

will be shared during an upcoming 

quarterly call, and tribal leaders will be 

informed about the interim final rule 

and the opportunity to submit 

comments. AMS will work with the 

USDA Office of Tribal Relations to 

ensure meaningful consultation is 

provided as needed with regards to the 

DDP. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988—Civil Justice 

Reform. This final rule may have 

retroactive effect. Dairy donations made 

starting January 1, 2020, prior to the 

effective date of the rule may be eligible 

for reimbursement if the eligible 

partnership’s Donation and Distribution 

Plan is approved and if the partnership 

meets all other program requirements. 

Dairy donations made prior to 2020 are 

not eligible for reimbursement under the 

program. There are no administrative 

procedures that must be exhausted prior 

to judicial challenges to the provisions 

of this rule. The DDP will not preempt 

any state or local laws, regulations, or 

policies, unless they present an 

irreconcilable conflict with this rule. 

Civil Rights Review 

AMS has considered the potential 

civil rights implications of this rule on 

minorities, women, and persons with 

disabilities to ensure that no person or 

group shall be discriminated against on 

the basis of race, color, national origin, 

gender, religion, age, disability, sexual 

orientation, marital or family status, 

political beliefs, parental status, or 

protected genetic information. This 

review included persons that are 

employees of the entities who are 

subject to these regulations. This 

interim final rule does not require 

affected entities to relocate or alter their 

operations in ways that could adversely 

affect such persons or groups. Further, 

this rule does not deny any persons or 

groups the benefits of the program or 

subject any persons or groups to 

discrimination. 

AMS found no evidence this 

voluntary program and the associated 

interim final rule will cause adverse or 

disproportionate impacts on minorities, 

women, and persons with disabilities. 

AMS’s analysis found no evidence that 

a potential impact will affect dairy 

farmers or processors in any protected 

groups, or that these impacts will be 

different than any participating general 

population of dairy farmers and 

processors. 

Executive Order 13132 

AMS has examined the effects of 

provisions in this interim final rule on 

the relationship between the Federal 

Government and the States, as required 

by Executive Order 13132 on 

‘‘Federalism.’’ The DDP will reimburse 

EDOs for eligible dairy products 

donated to eligible distributors. The 

DDP will not preempt any State or local 

laws, regulations, or policies pertaining 

to the sale, manufacturing or 

distribution of milk or dairy products 

within States. 

List of Subjects 

7 CFR Part 1146 

Milk, Donations, Reporting and 

recordkeeping requirements. 

7 CFR Part 1147 

Dairy, Donations, Food waste, 

Emergency, Reporting and 

recordkeeping requirements. 

For reasons set forth in the preamble, 

AMS is amending 7 CFR Chapter X as 

follows: 

PART 1146—MILK DONATION 

REIMBURSEMENT PROGRAM 

■ 1. The authority for part 1146 

continues to read as follows: 

Authority: Sec. 1431, Pub. L. 113–79, 128 

Stat. 695, as amended. 

■ 2. In part 1146, revise all references to 

‘‘Milk Donation and Distribution Plan’’ 

to read ‘‘Dairy Donation and 

Distribution Plan’’. 

■ 3. Amend § 1146.1 by revising the 

term ‘‘eligible dairy organization’’ and 

adding the term ‘‘qualified expense’’ in 

alphabetical order to read as follows: 

§ 1146.1 Definitions. 

* * * * * 

Eligible dairy organization means a 

dairy farmer, either individually or as 

part of a cooperative, or a dairy 

processor that: 

(1) Accounts to a Federal Milk 

Marketing Order; and 

(2) Incurs a qualified expense 

described in § 1146.1. 

* * * * * 

Qualified expense means the cost 

incurred to purchase fresh fluid milk 

product or bulk dairy commodity 

product for processing into eligible 

dairy products. 

* * * * * 

■ 4. Revise § 1146.102 to read as 

follows: 

§ 1146.102 Dairy donation and distribution 

plans. 

Eligible partnerships must submit a 

completed Dairy Donation and 


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Distribution Plan to AMS in the form 

and manner established by AMS to be 

eligible for program consideration. The 

completed Dairy Donation and 

Distribution Plan must include: (a) The 

physical location(s) of the eligible dairy 

organization’s processing plant(s) and 

the eligible distributor’s distribution 

site(s); 

(b) The entity type and contact 

information for the eligible dairy 

organization; 

(c) Banking information and tax 

identification number for the eligible 

dairy organization; 

(d) An affirmation signed by the 

eligible dairy organization regarding the 

type(s) of products to be donated and its 

ability to process and transport eligible 

dairy products consistent with the 

commodity specifications under 

§ 1146.3; and 

(e) An Eligible Distributor 

Certification Form signed by the eligible 

distributor regarding its ability to store 

and distribute donated eligible dairy 

products to recipient individuals and 

families. 

■ 5. Revise § 1146.106 to read as 

follows: 

§ 1146.106 Reimbursement Claims. 

(a) In order for the eligible dairy 

organization to receive reimbursement 

pursuant to § 1146.108, the eligible 

partnership must submit a 

Reimbursement Claim Form and 

appropriate supporting documentation 

to AMS. 

(1) Required information. Each 

Reimbursement Claim Form associated 

with an approved Dairy Donation and 

Distribution Plan must include: 

(i) The type and amount of eligible 

dairy products donated to the eligible 

distributor; 

(ii) The physical location(s) of the 

plant(s) that processed the donated 

dairy products; 

(iii) The date the eligible dairy 

products were processed; 

(iv) The date the eligible dairy 

products were shipped to the eligible 

distributor; 

(v) The respective sell-by, best-by, or 

use-by date(s) for the donated dairy 

products; and 

(vi) Other information as needed on 

the Reimbursement Claim Form to 

calculate reimbursement. 

(2) Appropriate verifying 

documentation. Each Reimbursement 

Claim Form must be accompanied by 

documents verifying that the 

donation(s) reported in the form were 

made. Such documentation may 

include, but is not limited to, copies of 

processing records, shipping records, 

bills of lading, warehouse receipts, 

distribution records, or other documents 

demonstrating the reported amount of 

eligible dairy products were processed, 

donated, and distributed in accordance 

with the approved Dairy Donation and 

Distribution Plan and Eligible 

Distributor Certification Form and as 

reported on the Reimbursement Claim 

Form. 

(3) Deadline for funding. To be 

considered for reimbursement, eligible 

dairy products must be donated from 

January 1, 2020, until program funds are 

expended. 

(b) Incomplete reimbursement 

requests will be returned to the 

submitter for revision or completion and 

resubmission as necessary. 

■ 6. Add part 1147 to read as follows: 

PART 1147—DAIRY DONATION 

PROGRAM 

Subpart A—General Provisions 

Sec. 

1147.1 Definitions 

1147.3 Commodity specifications 

Subpart B—Program Participation 

Sec. 

1147.100 Program eligibility 

1147.102 Dairy donation and distribution 

plans 

1147.104 Review and approval 

1147.106 Reimbursement claims 

1147.108 Reimbursement calculation 

1147.109 Supplemental reimbursements 

Subpart C—Administrative Provisions 

Sec. 

1147.200 Program announcement 

1147.204 Prohibitions 

1147.206 Enforcement 

1147.208 Confidentiality 

1147.209 Books and records 

1147.210 Milk for other programs 

1147.212 Expiration of this part 

Authority: Sec. 762, Pub. L. 116–260, 134 

Stat. 1182. 

Subpart A—General Provisions 

§ 1147.1 Definitions. 

AMS means the Agricultural 

Marketing Service of the United States 

Department of Agriculture. 

Eligible dairy organization means a 

dairy farmer, either individually or as 

part of a cooperative, or a dairy 

processor that: 

(1) Accounts to a Federal Milk 

Marketing Order; and 

(2) Incurs a qualified expense 

described in § 1147.1. 

Eligible dairy product means a dairy 

product primarily made from milk, 

including fluid milk, produced and 

processed in the United States and 

meeting the specifications referenced in 

§ 1147.3. 

Eligible distributor means a public or 

private non-profit feeding organization 

distributing or coordinating distribution 

of donated eligible dairy products to 

recipient individuals and families. 

Eligible partnership means a 

partnership between an eligible dairy 

organization and an eligible distributor. 

Program means the Dairy Donation 

Program established in this part. 

Qualified expense means the cost 

incurred to purchase fresh fluid milk 

product or bulk dairy commodity 

product for processing into eligible 

dairy products. 

Secretary means the Secretary of the 

United States Department of Agriculture 

or a representative authorized to act in 

the Secretary’s stead. 

§ 1147.3 Commodity specifications. 

Eligible dairy organizations must 

comply with all applicable Federal, 

State, and local laws, executive orders, 

and rules and regulations related to its 

performance under this program. To 

qualify under the program eligible dairy 

products must meet the following 

requirements: 

(a) Made primarily from cow’s 

(bovine) milk produced in the United 

States; 

(b) Packaged in consumer-sized 

packaging; 

(c) Meet the applicable provisions for 

dairy products in the Federal Food, 

Drug, and Cosmetic Act (21 U.S.C. 301 

et seq.), as amended. Grade ‘A’ dairy 

products shall meet the applicable 

provisions of the current edition of the 

Pasteurized Milk ordinance; and 

(d) Have a sell-by, best-by, or use-by 

date no sooner than 12 days from the 

date the eligible dairy product is 

delivered to the eligible distributor. 

Subpart B—Program Participation 

§ 1147.100 Program eligibility. 

An eligible dairy organization must be 

a member of an approved eligible 

partnership pursuant to § 1147.1 to be 

eligible to receive reimbursement 

related to eligible dairy product 

donations, subject to the requirements 

and limitations specified in §§ 1147.102 

and 1147.104. 

§ 1147.102 Dairy donation and distribution 

plans. 

Eligible partnerships must submit a 

completed Dairy Donation and 

Distribution Plan to AMS in the form 

and manner established by AMS to be 

eligible for program consideration. The 

completed Dairy Donation and 

Distribution Plan must include: (a) The 

physical location(s) of the eligible dairy 

organization’s processing plant(s) and 

the eligible distributor’s distribution 

site(s); 


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(b) The entity type and contact 

information for the eligible dairy 

organization; 

(c) Banking information and tax 

identification number for the eligible 

dairy organization; 

(d) An affirmation signed by the 

eligible dairy organization regarding the 

type(s) of product to be donated and its 

ability to process and transport eligible 

dairy products consistent with the 

commodity specifications under 

§ 1147.3; and 

(e) An Eligible Distributor 

Certification Form signed by the eligible 

distributor regarding its ability to store 

and distribute donated eligible dairy 

products to recipient individuals and 

families. 

§ 1147.104 Review and approval. 

(a) Program application and review. 

Within 15 business days of the 

submitted Dairy Donation and 

Distribution Plan and Eligible 

Distributor Certification Form, AMS 

will review the submitted application 

and notify the applicant regarding 

approval or disapproval for program 

participation. 

(1) The review will include the 

following considerations: 

(i) The process the eligible 

partnership will use for donation, 

processing, transportation, temporary 

storage, and distribution of eligible 

dairy products; 

(ii) The extent to which the Dairy 

Donation and Distribution Plan 

promotes the donation of eligible dairy 

products and prevents and minimizes 

food waste. 

(2) AMS will prioritize approval or 

disapproval of a Plan for which AMS 

determines a public health emergency 

or disaster to be a substantial factor in 

its submission. 

(b) Plan approval. Subject to the 

provisions in paragraph (a) of this 

section, AMS will determine whether to 

approve or disapprove Dairy Donation 

and Distribution Plans for eligible dairy 

products donated from January 1, 2020, 

until program funds are expended. 

§ 1147.106 Reimbursement claims. 

(a) In order for the eligible dairy 

organization to receive reimbursement 

pursuant to § 1147.108, the eligible 

partnership must submit a 

Reimbursement Claim Form and 

appropriate supporting documentation 

to AMS. 

(1) Required information. Each 

Reimbursement Claim Form associated 

with an approved Dairy Donation and 

Distribution Plan must include: 

(i) The type and amount of eligible 

dairy products donated to the eligible 

distributor; 

(ii) The physical location(s) of the 

plant(s) that processed the donated 

dairy products; 

(iii) The date the eligible dairy 

products were processed; 

(iv) The date the eligible dairy 

products were shipped to the eligible 

distributor; 

(v) The respective sell-by, best-by, or 

use-by date(s) for the donated dairy 

products; and 

(vi) Other information as needed on 

the Reimbursement Claim Form to 

calculate reimbursement. 

(2) Appropriate verifying 

documentation. Each Reimbursement 

Claim Form must be accompanied by 

documents verifying that the 

donation(s) reported in the form were 

made. Such documentation may 

include, but is not limited to, copies of 

processing records, shipping records, 

bills of lading, warehouse receipts, 

distribution records, or other documents 

demonstrating the reported amount of 

eligible dairy products were processed, 

donated, and distributed in accordance 

with the approved Dairy Donation and 

Distribution Plan and Eligible 

Distributor Certification Form and as 

reported on the Reimbursement Claim 

Form. 

(3) Eligibility period. To be considered 

for reimbursement, eligible dairy 

products must have been donated on or 

after January 1, 2020, until program 

funds are expended. 

(b) Incomplete reimbursement 

requests will be returned to the 

submitter for revision or completion and 

resubmission as necessary. 

§ 1147.108 Reimbursement calculation. 

(a) For each eligible dairy product 

donated by an eligible dairy 

organization with an approved Dairy 

Donation and Distribution Plan, the 

amount of reimbursement under 

§ 1147.106 for the donated eligible dairy 

product shall be the sum of the values 

of the input cost, the manufacturing 

cost, and the transportation cost. 

(1) The input cost shall be the 

monthly Federal Milk Marketing Order 

minimum classified value pursuant to 7 

CFR 1000.50 of the fresh fluid milk 

product (raw milk, skim milk, cream, or 

concentrate fluid product) or fluid milk 

equivalent of the bulk dairy commodity 

product used to make the donated 

eligible dairy product pursuant to 7 CFR 

1000.40 for the month of processing. 

(2) The manufacturing cost shall be 

the manufacturing allowance, on a 

hundredweight basis, pursuant to 7 CFR 

1000.50 for the milk used to produce the 

donated eligible dairy product pursuant 

to 7 CFR 1000.40 — 

(i) If a Class I product, the Class IV 

manufacturing allowance applies; 

(ii) If a Class II product, the Class IV 

manufacturing allowance applies; 

(iii) If a Class III product, the Class III 

manufacturing allowances applies; or 

(iv) If a Class IV product, the Class IV 

manufacturing allowances applies. 

(3) The transportation cost shall be 

determined by the following: 

(i) The published average U.S. Energy 

Information Administration average 

U.S. diesel fuel price for the month the 

donation was made; 

(ii) The shortest hard-surface distance, 

in miles, from the plant processing the 

donated eligible dairy product to the 

eligible distributor; and 

(iii) The fuel economy rate of 5.5 

miles per gallon. 

(b) Reimbursement, on a per 

hundredweight basis, made pursuant to 

paragraph (a) of this section may not 

exceed the Class I price pursuant to 7 

CFR 1000.50, 1000.52, and 1006.51 for 

Dade County, Florida. 

§ 1147.109 Supplemental reimbursements. 

(a) The Secretary shall make a 

supplemental reimbursement to an 

eligible dairy organization reimbursed 

under the Milk Donation 

Reimbursement Program (7 CFR 

1146.108) during the period beginning 

on January 1, 2020, and ending on the 

date on which funds under § 1147.202 

are no longer available. 

(b) A supplemental reimbursement 

described in paragraph (a) shall be the 

difference between: 

(1) The reimbursement for eligible 

dairy products calculated under 

§ 1147.108, and 

(2) The reimbursement for eligible 

milk under the Milk Donation 

Reimbursement Program (7 CFR 

1146.108). 

Subpart C—Administrative Provisions 

§ 1147.200 Program announcement. 

(a) AMS will announce the 

opportunity to participate in the Dairy 

Donation Program on the AMS website. 

The announcement will specify the 

manner and form in which program 

applications should be submitted. AMS 

will periodically announce on its 

website a report describing the donation 

activity under this program. 

(b) There is no deadline for eligible 

parties to submit a Dairy Donation and 

Distribution Plan. AMS will accept and 

consider Plans on a continuing basis. 

§ 1147.204 Prohibitions. 

(a) Prohibition in general. An eligible 

distributor receiving eligible dairy 

products donated under the Dairy 


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Donation Program may not sell the 

donated dairy products back into 

commercial markets. 

(b) Prohibition on marketing or 

promotional event. Dairy products 

donated in conjunction with a 

marketing or promotional event are 

prohibited from reimbursement. 

(c) Prohibition on profit-making. An 

eligible dairy organization cannot make 

a profit from reimbursements received 

from the Dairy Donation Program. 

(d) Prohibition on future 

participation. An eligible partnership 

that AMS determines has violated the 

prohibition in paragraph (a), (b), or (c) 

shall not be eligible for any future 

participation in the Dairy Donation 

Program. 

§ 1147.206 Enforcement. 

Where applicable, AMS will verify an 

eligible dairy organization’s payment of 

the input cost. AMS will also conduct 

spot checks, reviews, and audits of the 

reports and documentation submitted 

pursuant to § 1147.106(a) to verify 

accuracy and to ensure the integrity of 

the Dairy Donation Program. 

§ 1147.208 Confidentiality. 

AMS will only collect information 

deemed necessary to administer the 

Dairy Donation Program and will use 

the information only for that purpose. 

AMS will keep all proprietary business 

information collected under the 

program confidential. 

§ 1147.209 Books and records. 

Each eligible dairy organization shall 

maintain and retain records of its 

operations and make such records and 

its facilities available to AMS as 

necessary to ensure the integrity of the 

Dairy Donation Program. 

(a) Records to be maintained and 

made available. Each eligible dairy 

organization must maintain and make 

available records of its operations 

(including, but not limited to, records of 

donations, processing, packaging, and 

disposition of donated eligible dairy 

products) that are necessary to verify 

whether it met program requirements. 

(b) Retention of records. All records 

required under the paragraph (a) shall 

be retained by the eligible dairy 

organization for a period of 3 years to 

begin at the end of the month to which 

such records pertain. 

§ 1147.210 Milk for other programs. 

Eligible dairy products sold or 

donated under other commodity or food 

assistance programs administered by the 

United States Department of 

Agriculture, except as pursuant to 7 CFR 

1146, is not eligible for reimbursement 

under the Dairy Donation Program in 

this part. 

§ 1147.212 Expiration of this part. 

This part expires September 1, 2023, 

unless extended by notification in the 

Federal Register. 

Erin Morris, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2021–18606 Filed 8–31–21; 8:45 am] 

BILLING CODE P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1070 

Privacy Act Implementation Rules 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau or CFPB) 

makes limited revisions to its 

regulations that establish the procedures 

used by the public to obtain records 

from the Bureau under the Privacy Act 

of 1974 (Privacy Act). The revisions will 

change the definition of ‘‘Chief Privacy 

Officer’’ in order to align the Chief 

Privacy Officer’s authorities and 

responsibilities identified in the 

regulation to those of the Bureau’s 

designated Senior Agency Official for 

Privacy. The revisions will also 

facilitate electronic or remote identity 

proofing and authentication by creating 

an additional method for a requester to 

verify their identity when submitting a 

Privacy Act request to the Bureau. 

DATES: This rule is effective September 

1, 2021. 

FOR FURTHER INFORMATION CONTACT: 

David Snyder, Senior Counsel, Legal 

Division, 202–435–7758. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Bureau first published its Privacy 

Act implementation rules, located in 

subpart E of part 1070, in an interim 

final rule in July 2011. See 76 FR 45371 

(July 28, 2011). This was followed by a 

final rule in February 2013. See 78 FR 

11483 (Feb. 15, 2013). The Bureau 

subsequently proposed revisions to its 

rules in a notice of proposed rulemaking 

in August 2016, followed by a final rule 

that adopted these revisions in 

September 2018. See 81 FR 58310 (Aug. 

24, 2016); 83 FR 46075 (Sept. 12, 2018). 

The Bureau now makes limited 

revisions to its Privacy Act 

implementation rules in order to (1) 

align the authorities and responsibilities 

of the ‘‘Chief Privacy Officer’’ identified 

in the rules with the authorities and 

responsibilities of the Bureau’s Senior 

Agency Official for Privacy; and (2) 

facilitate electronic or remote identity 

proofing and authentication in 

accordance with the Creating Advanced 

Streamlined Electronic Services for 

Constituents (CASES) Act of 2019, 

Public Law 116–50, 133 Stat. 1073 

(2019), and the Office of Management 

and Budget’s implementing guidance, 

M–21–04, ‘‘Modernizing Access to and 

Consent for Disclosure of Records 

Subject to the Privacy Act’’ (Nov. 12, 

2020). 

II. Summary of the Rule 

The Bureau makes two revisions to 

subpart E of part 1070, which 

establishes the Bureau’s rule 

implementing the Privacy Act. First, the 

Bureau revises the definition of ‘‘Chief 

Privacy Officer’’ to align the authorities 

and responsibilities in the regulation to 

those of its designated Senior Agency 

Official for Privacy. Second, to facilitate 

electronic or remote identity proofing 

and authentication, the Bureau adds an 

additional method for a requester to 

verify their identity when submitting a 

Privacy Act request to the Bureau. 

III. Legal Authority 

The Bureau is issuing this rule 

pursuant to its authority under title X of 

the Dodd-Frank Act, 12 U.S.C. 5481 et 

seq., and the Privacy Act of 1974, 5 

U.S.C. 552a. 

IV. Section-by-Section Analysis of the 

Proposed Rule 

Part 1070—Disclosure of Records and 

Information 

Subpart E—The Privacy Act 

Section 1070.50 Purpose and Scope; 

Definitions 

Subparagraph 1070.50(b)(1) defines 

the term ‘‘Chief Privacy Officer,’’ whose 

authorities and responsibilities are 

established in subpart E. The Bureau 

revises the definition to mean ‘‘the 

Senior Agency Official for Privacy of the 

CFPB or any CFPB employee to whom 

the Senior Agency Official for Privacy 

has delegated authority to act under this 

part.’’ 

The Bureau originally defined the 

term to mean ‘‘the Chief Information 

Officer of the CFPB’’ or their delegee in 

order to reflect the agency’s earlier 

organizational structure, in which the 

Bureau’s Chief Information Officer 

oversaw its Privacy Program. The 


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