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[Federal Register Volume 72, Number 33 (Tuesday, February 20, 2007)]
[Proposed Rules]
[Pages 7753-7755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-746]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 72, No. 33 / Tuesday, February 20, 2007 / 
Proposed Rules

[[Page 7753]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1000, 1001, 1005, 1006, 1007, 1030, 1032, 1033, 1124, 
1126, and 1131

[Docket No. AO-14-A77, et al.; DA-07-02]

Milk in the Northeast and Other Marketing Areas; Supplemental 
Notice of Hearing on Proposed Amendments to Tentative Marketing 
Agreements and Orders

AGENCY: Agricultural Marketing Service, USDA.

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

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SUMMARY: This document contains an additional proposal to be considered 
at a previously scheduled hearing to consider proposals that would 
amend the Class III and Class IV product price formulas applicable to 
all Federal milk marketing orders.

DATES: The hearing will convene at 9 a.m., Monday, February 26, 2007.

ADDRESSES: The hearing will be held at the Holiday Inn Select--
Strongsville, 15471 Royalton Road, Strongsville, Ohio 44136, phone 
(440) 238-8800.

FOR FURTHER INFORMATION CONTACT: Jack Rower, Marketing Specialist, 
Order Formulation and Enforcement, USDA/AMS/Dairy Programs, Stop 0231-
Room 2971, 1400 Independence Avenue, SW., Washington, DC 20250-0231, 
(202) 720-2357, e-mail address: [email protected].
    Persons requiring a sign language interpreter or other special 
accommodations should contact Paul Huber, Assistant Market 
Administrator, at (330) 225-4758; e-mail: [email protected] before 
the hearing begins.

SUPPLEMENTARY INFORMATION: This additional proposal, which supplements 
a proposal published on February 7, 2007 (72 FR 6179), seeks to 
establish cost-of-production surcharges that manufacturers could 
include in the selling price of their products but would not be 
included in the determination of National Agricultural Statistics 
Service (NASS) survey prices for cheese, butter, nonfat dry milk and 
dry whey.
    This administrative action is governed by the provisions of 
Sections 556 and 557 of Title 5 of the United States Code and, 
therefore, is excluded from the requirements of Executive Order 12866.
    Notice is hereby given of a public hearing to be held at the 
Holiday Inn Select, Strongsville, Ohio, beginning at 9 a.m. on Monday, 
February 26, 2007, with respect to proposed amendments to the tentative 
marketing agreements and to the orders regulating the handling of milk 
in the Northeast and other marketing areas.
    The hearing is called pursuant to the provisions of the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), and the applicable rules of practice and procedure governing the 
formulation of marketing agreements and marketing orders (7 CFR Part 
900).
    The purpose of the hearing is to receive evidence with respect to 
the economic and marketing conditions which relate to the proposed 
amendments, hereinafter set forth, and any appropriate modifications 
thereof, to the tentative marketing agreements and to the orders.

Initial Regulatory Flexibility Analysis

    Actions under the Federal milk order program are subject to the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). This Act seeks to 
ensure that, within the statutory authority of a program, the 
regulatory and information collection requirements are tailored to the 
size and nature of small businesses. For the purpose of the Act, a 
dairy farm is a ``small business'' if it has an annual gross revenue of 
less than $750,000, and a dairy products manufacturer is a ``small 
business'' if it has fewer than 500 employees (13 CFR 121.201). Most 
parties subject to a milk order are considered as a small business.
    For the purposes of determining which dairy farms are ``small 
businesses,'' the $750,000 per year criterion was used to establish a 
production guideline of 500,000 pounds per month. Although this 
guideline does not factor in additional monies that may be received by 
dairy producers, it should be an inclusive standard for most ``small'' 
dairy farmers. For purposes of determining a handler's size, if the 
plant is part of a larger company operating multiple plants that 
collectively exceed the 500-employee limit, the plant will be 
considered a large business even if the local plant has fewer than 500 
employees.
    USDA has identified that during 2005 approximately 51,060 of the 
54,652 dairy producers whose milk is pooled on Federal orders are small 
businesses. Small businesses represent about 93 percent of the dairy 
farmers who participate in the Federal milk order program.
    On the processing side, during June 2005 there were approximately 
350 fully regulated plants (of which 149 or 43 percent were small 
businesses) and 110 partially regulated plants (of which 50 or 45 
percent were small businesses.) In addition, there were 48 producer-
handlers, of which 29 were considered small businesses for the purposes 
of this initial regulatory flexibility analysis, who submitted reports 
under the Federal milk order program during this period.
    The fluid use of milk represented about 37.6 percent of total 
Federal milk marketing order producer deliveries during calendar year 
2006. Almost 237 million Americans, approximately 80 percent of the 
total U.S. population reside within the geographical boundaries of the 
10 Federal milk marketing areas.
    In order to accomplish the goal of imposing no additional 
regulatory burdens on the industry, a review of the current reporting 
requirements was completed pursuant to the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501 et seq.) In light of that review, it was 
determined that these proposed amendments would have little or no 
impact on reporting, record keeping, or other compliance requirements 
because these requirements would remain identical to those currently in 
effect under the Federal order program. No new or additional reporting 
would be necessary.
    This notice does not require additional information collection that 
requires clearance by the OMB beyond the currently approved information 
collection. Information currently collected through the use of OMB-
approved forms and the primary sources of data used to complete the 
forms are

[[Page 7754]]

routinely used in business transactions. The forms require only a 
minimal amount of information that can be provided without data 
processing equipment or trained statistical staff. Thus, the 
information collection burden is relatively small. Requiring the same 
reports from all handlers does not disadvantage any handler that is 
smaller than the industry average.
    No other burdens are expected to fall upon the dairy industry as a 
result of overlapping Federal rules. This proposed rulemaking does not 
duplicate, overlap, or conflict with any existing Federal rules.
    To ensure that small businesses are not unduly or 
disproportionately burdened based on these proposed amendments 
consideration was given to mitigating any negative impacts. It is 
expected that small producers would not experience any particular 
disadvantage compared to larger producers as a result of the proposed 
amendments. Similarly, it is expected that small handlers would not 
experience any particular disadvantage compared to larger handlers as a 
result of the proposed amendments. Possible changes to the Class III 
and Class IV price formulas should not have any special impacts on 
small handler entities. All handlers manufacturing dairy products from 
milk classified as Class III or Class IV would remain subject to the 
same minimum prices regardless of the size of their operations. Minimum 
prices should not raise barriers regarding the ability of small 
handlers to compete in the marketplace.
    Interested parties are invited to present evidence on the probable 
regulatory and information collection impact of the hearing proposals 
on small businesses. Also, such parties may suggest modifications of 
the proposal for tailoring its applicability to small businesses.

Executive Order 12988, Civil Justice Reform

    The amendments to the rules proposed herein have been reviewed 
under Executive Order 12988, Civil Justice Reform. They are not 
intended to have a retroactive effect. If adopted, the proposed 
amendments would not preempt any state or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Agricultural Marketing Agreement Act provides that 
administrative proceedings must be exhausted before parties may file 
suit in court. Under Section 8c(15)(A) of the Act (7 U.S.C. 
608c(15)(A)), any handler subject to an order may request modification 
or exemption from such order by filing with the Department of 
Agriculture (Department) a petition stating that the order, any 
provision of the order, or any obligation imposed in connection with 
the order is not in accordance with the law. A handler is afforded the 
opportunity for a hearing on the petition. After a hearing, the 
Department would rule on the petition. The Act provides that the 
district court of the United States in any district in which the 
handler is an inhabitant, or has its principal place of business, has 
jurisdiction in equity to review the Department's ruling on the 
petition, provided a bill in equity is filed not later than 20 days 
after the date of the entry of the ruling.
    Interested parties who wish to introduce exhibits should provide 
the Presiding Officer at the hearing with (6) copies of such exhibits 
for the Official Record. Also, it would be helpful if additional copies 
are available for the use of other participants at the hearing.

List of Subjects in 7 CFR Parts 1000, 1001, 1005, 1006, 1007, 1030, 
1032, 1033, 1124, 1126, and 1131.

    Milk marketing orders.

    The authority citation for 7 CFR parts 1000, 1001, 1005, 1006, 
1007, 1030, 1032, 1033, 1124, 1126, and 1131 read as follows:

    Authority: 7 U.S.C. 601-674, and 7253.

    The proposed amendment, as set forth below, has not received the 
approval of the Department.

Proposed by Dairylea Cooperative, Inc.

Proposal No. 20

    The additional proposal seeks to establish cost-of-production 
surcharges that manufacturers could include in the selling price of 
their products but would not be included in the determination of the 
NASS survey prices for cheese, butter, nonfat dry milk and dry whey.
    1. Amend Sec.  1000.50 by:
    (a) Adding new paragraph (r);
    (b) Adding new paragraph (r)(1); and
    (c) Adding new paragraph (r)(2).
    The additions read as follows:

Sec.  1000.50  Class prices, component prices, and advanced pricing 
factors.

* * * * *
    (r) Manufacturing surcharges. For the purposes of determining the 
NASS survey prices for this section, as reported by the Department, 
cost of production add-on surcharges, up to a maximum value as 
contained in part (1) of this section, shall not be included in the 
NASS survey prices.
    (1) The maximum cost of production add-on surcharges shall be as 
follows:
    (i) Cheese: $0.0xxx per pound;
    (ii) Butter: $0.0xxx per pound;
    (iii) Whey powder: $0.0xxx per pound; and
    (iv) Nonfat dry milk: $0.0xxx per pound.
    (2) To be excluded from the NASS survey price, cost of production 
factors must be shown on the appropriate invoice as a separately 
negotiated surcharge to the normal price charged on the invoice, up to 
the maximum amount shown for such product pursuant to part (1), above. 
Failure to show the add-on as such will result in any such values being 
included in the NASS survey price.
    2. Amend Sec.  1000.53 by adding new paragraph (a)(12), to read as 
follows:

Sec.  1000.53  Announcement of class prices, component prices, and 
advanced pricing factors.

    (a) * * *
    (12) The rates as determined in 1000.50(r)(1).
* * * * *
    Copies of this supplemental notice of hearing and the orders may be 
procured from the Market Administrator of each of the aforesaid 
marketing areas, or from the Hearing Clerk, United States Department of 
Agriculture, STOP 9200--Room 1031, 1400 Independence Avenue, SW., 
Washington, DC 20250-9200, or may be inspected there.
    Copies of the transcript of testimony taken at the hearing will not 
be available for distribution through the Hearing Clerk's Office. If 
you wish to purchase a copy, arrangements may be made with the reporter 
at the hearing.
    From the time that a hearing notice is issued and until the 
issuance of a final decision in a proceeding, Department employees 
involved in the decision-making process are prohibited from discussing 
the merits of the hearing issues on an ex parte basis with any person 
having an interest in the proceeding. For this particular proceeding, 
the prohibition applies to employees in the following organizational 
units:
    Office of the Secretary of Agriculture.
    Office of the Administrator, Agricultural Marketing Service.
    Office of the General Counsel.
    Dairy Programs, Agricultural Marketing Service (Washington office) 
and the Offices of all Market Administrators.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.

[[Page 7755]]

    Dated: February 14, 2007.
Kenneth C. Clayton,
Acting Administrator.
[FR Doc. 07-746 Filed 2-14-07; 4:01 pm]
BILLING CODE 3410-02-P
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