Milk Income Loss Contract Program, 19621-19624 [06-3669]
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19621
Rules and Regulations
Federal Register
Vol. 71, No. 73
Monday, April 17, 2006
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. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1430
RIN 0560–AH47
Milk Income Loss Contract Program
Commodity Credit
Corporation, USDA.
ACTION: Final rule.
AGENCIES:
SUMMARY: This rule amends the
regulations for the Milk Income Loss
Contract (MILC) Program as authorized
by the Agriculture Reconciliation Act of
2005 to extend the program from
October 1, 2005, to September 30, 2007.
This rule also decreases the percentage
rate for the payment calculation and
removes the transition rule required at
the beginning of the program.
DATES: Effective Date: April 13, 2006.
FOR FURTHER INFORMATION CONTACT:
Danielle Cooke, Special Programs
Manager, Price Support Division, FSA/
USDA, STOP 0512, 1400 Independence
Ave., SW., Washington, DC 20250–0512;
telephone (202) 720–1919; facsimile
(202) 690–1536; e-mail:
Danielle.Cooke@wdc.usda.gov. Persons
with disabilities who require alternative
means for communication (Braille, large
print, audiotape, etc.) should contact the
USDA Target Center at (202) 720–2600
(voice and TDD).
SUPPLEMENTARY INFORMATION:
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Background
This final rule implements
amendments made by section 1101 of
the Deficit Reduction Act of 2005 (2005
Act) to section 1502 of the Farm
Security and Rural Investment Act of
2002 (2002 Act), which is the authority
for the Milk Income Loss Contract
(MILC) Program administered by the
Commodity Credit Corporation (CCC).
The MILC program was implemented by
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a final rule on October 18, 2002 (67 FR
64454). The program was in effect from
December 1, 2001, through September
30, 2005 and was extended by the 2005
Act with minor amendments.
Accordingly, this rule amends 7 CFR
part 1430 to: continue the MILC
program until September 30, 2007;
decrease the payment rate percentage
during the extension period; and
remove transition payment provisions.
The MILC Program supports the dairy
industry by providing direct countercyclical payments to milk producers
when the Boston Milk Marketing Order
Class I price for fluid milk falls below
the benchmark of $16.94 per
hundredweight (cwt). An eligible
operation is determined in each state in
the same manner as under Dairy Market
Loss Assistance (DMLA) Program
contracts. Any new contracts must be
unaffiliated with prior DMLA
operations. Each fiscal year, eligible
dairy operations can receive a monthly
payment based on monthly commercial
milk marketings, up to a maximum of
2.4 million pounds per dairy operation
for the fiscal year. A dairy operation’s
eligible monthly payment was based on
the quantity of milk sold in that month,
up to a maximum of 2.4 million pounds,
multiplied by 45 percent of the
difference between $16.94/cwt and the
Federal milk marketing order Class I
milk price per cwt in Boston,
Massachusetts for that month. To
facilitate the transition to this new
program from previous DMLA programs
administered by FSA, a transition
period provision was implemented
using a similar payment calculation for
the period from December 1, 2001,
through the month preceding the month
the producer enters into a contract with
CCC.
To be eligible for the MILC program
producers in a dairy operation must: (1)
Produce in the United States and market
milk commercially during the period
December 1, 2001, through September
30, 2005; (2) enter into a contract with
CCC to provide monthly marketing data
to receive payments; and (3) be engaged
in the business of producing and
marketing agricultural products at the
time of signing the MILC program
contract. MILC contracts under these
program provisions expired on
September 30, 2005.
The extension of the MILC program
commences October 1, 2005 and ends
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September 30, 2007. Generally other
program provisions remain the same
under the MILC Program extension,
except that a dairy operation’s eligible
monthly payment will be the quantity of
milk sold in that month, up to a
maximum of 2.4 million pounds,
multiplied by 34 percent of the
difference between $16.94 per cwt and
the Federal milk marketing order Class
I milk price per cwt in Boston for that
month. Also, section 1101 of the 2005
Act provides: (1) As of September 1,
2007, the percent difference in price per
cwt used to calculate payments is zero
(0%); (2) the program will expire on
September 30, 2007, and; (3) transition
period provisions which were necessary
for the transition from previous Dairy
Market Loss Assistance programs to the
new MILC Program are deleted.
To be eligible producers must: (1)
Enter into a contract with CCC to
provide monthly marketing data to
receive payments during the extended
period; (2) agree to the program
provisions for the extended period; (3)
be actively engaged in the business of
producing and marketing agricultural
products anytime during the period of
October 1, 2005, through September 30,
2007; and (4) select the MILC
production start month that the dairy
operation would like to begin receiving
payment from CCC based on the
selected month’s commercially
marketed production. Dairy operations
may apply in person at FSA county
offices during regular business hours, or
via facsimile or the Internet at https://
www.fsa.usda.gov/dafp/psd/. Since the
legislation authorizing the extension of
this program was signed after the
beginning date of the extended period
and although a payment rate was not in
effect during the months of October and
November 2005, payment rates have
been established for the months of
December 2005 through May 2006.
Therefore, for the CCC fiscal year (FY)
2006 only, during a sign-up period from
April 13, 2006 to May 17, 2006,
producers in dairy operations will be
allowed to select retroactively, with
some limitations, the MILC production
start month from these months.
Producers choosing not to select from
the retroactive months of October 2005
through May 2006, will be allowed,
with some limitations, to choose a
month from the months remaining in
the fiscal year for which CCC will begin
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issuing payments based on the selected
month’s commercial milk marketings.
Producers entering into a MILC after the
designated sign-up period ends but
before the program expires on
September 30, 2007, and producers
during FY 2007 are also allowed to
choose the MILC production start month
for the dairy operation. Those
selections, however, under this rule
must be made in advance of the
announcement of the Boston Class I
milk price and establishment of the
MILC payment rate for those months.
Producers submitting contracts after the
designated sign-up period will not have
the option to select from retroactive
months.
MILC payments will be based on the
commercially-marketed milk production
from the MILC production start month
selected by the dairy operation, and
continue with each subsequent month’s
commercial milk production
consecutively thereafter until the earlier
of the maximum payment quantity of
2.4 million pounds is reached or the end
of the applicable FY. Other policy
determinations necessary to implement
the statute are reflected in the text of the
rule.
Notice and Comment
Section 1601(c) of the Farm Security
and Rural Investment Act of 2002 (Pub.
L. 107–171) requires that the regulations
necessary to implement Title I of the
2002 Act are to be promulgated without
regard to the notice and comment
provisions of 5 U.S.C. 553 or the
Statement of Policy of the Secretary of
Agriculture effective July 24, 1971, (36
FR 13804) relating to notices of
proposed rulemaking and public
participation in rulemaking. These
regulations are thus issued as final.
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Executive Order 12866
This final rule is economically
significant according to Executive Order
12866 and has been reviewed by the
Office of Management and Budget
(OMB). A cost-benefit assessment of the
actions this rule will take was
completed and is summarized after the
background section.
Federal Assistance Programs
The title and number of the Federal
assistance program in the Catalog of
Federal Domestic Assistance to which
this final rule applies is 10.051—
Commodity Loans and Loan Deficiency
Payments.
Regulatory Flexibility Act
The Regulatory Flexibility Act is not
applicable to this rule because the
Office of the Secretary, FSA and CCC
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are not required by 5 U.S.C. 553 or any
other law to publish a notice of
proposed rulemaking with respect to the
subject matter of this rule.
Management and Budget under the
Paperwork Reduction Act.
Environmental Assessment
The MILC has paid about $2.0 billion
to dairy operations over the four initial
years of operation. Expenditures during
the extended period, FY 2006 and FY
2007, are expected to be between $700
and $900 million based on estimated
milk prices during the period. Dairy
farm income and Government
expenditures will increase equally.
The environmental impacts of this
final rule were considered in
accordance with the provisions of the
National Environmental Policy Act of
1969 (NEPA), 42 U.S.C. 4321 et seq., the
regulations of the Council on
Environmental Quality (40 CFR parts
1500–1508), and FSA’s regulations for
compliance with NEPA, 7 CFR part 799.
FSA has concluded that the rule will
have no significant impacts upon the
human environment as documented
through the completion of an
environmental evaluation. A copy of the
environmental evaluation is available
for inspection and review upon request.
Executive Order 12778
The final rule has been reviewed
under Executive Order 12778. This rule
preempts State laws that are
inconsistent with its provisions. This
rule is retroactive to September 30,
2005. Before any judicial action may be
brought regarding this rule, all
administrative remedies must be
exhausted.
Summary of Economic Impacts
List of Subjects in 7 CFR Part 1430
Dairy products, Loan programs/
agriculture, Price support programs,
Reporting and recordkeeping
requirements.
For the reasons set out in the
preamble, 7 CFR part 1430 is amended
as set forth below.
I
PART 1430—DAIRY PRODUCTS
1. The authority citation continues to
read as follows:
I
Authority: 7 U.S.C. 7981 and 7982; 15
U.S.C. 714b and 714c; Pub. L. 108–324, 118
Stat. 1220.
Subpart B—Milk Income Loss Contract
Program
Executive Order 12372
I
This program is not subject to
Executive Order 12372, which requires
consultation with State and local
officials. See the notice related to 7 CFR
part 3015, subpart V, published at 48 FR
29115 (June 24, 1983).
§ 1430.202
Unfunded Mandates
Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) does not
apply to this rule because the Office of
the Secretary, FSA and CCC are not
required by 5 U.S.C. 553 or any other
law to publish a notice of proposed
rulemaking about the subject matter of
this rule. Further, this rule imposes no
unfunded mandates, as defined in
UMRA, on any local, state, or tribal
government or the private sector.
Paperwork Reduction Act
Section 1601(c) of the 2002 Act
provides that the promulgation of
regulations and the administration of
Title I of the 2002 Act shall be made
without regard to chapter 5 of title 44
of the United States Code (the
Paperwork Reduction Act). Accordingly,
these regulations and the forms, and
other information collection activities
needed to administer the program
authorized by these regulations, are not
subject to review by the Office of
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2. Amend § 1430.202 by revising the
definition of ‘‘Eligible production’’ to
read as follows:
Definitions.
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*
*
Eligible production means milk that
was produced by cows in the United
States and marketed commercially
during the period of December 1, 2001,
through September 30, 2007, up to a
maximum of 2.4 million pounds per
dairy operation per fiscal year.
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3. Amend § 1430.203 by revising
paragraphs (a) and (f) to read as follows:
I
§ 1430.203
Eligibility.
*
*
*
*
*
(a) Have produced milk in the United
States and commercially marketed the
milk produced anytime during the
period of December 1, 2001, through
September 30, 2007;
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*
(f) Be actively engaged in the business
of producing and marketing agricultural
products anytime during the period of
December 1, 2001, through September
30, 2007.
*
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*
*
*
4. Revise § 1430.205 to read as
follows:
I
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§ 1430.205
Selection of starting month.
(a) A dairy operation that enters into
a MILC with CCC must designate the
starting production month that it desires
CCC to begin making payments to them.
The starting production month must be
selected on or before the 15th of the
month before the month for which
payment is sought during fiscal year
2002 through fiscal year 2005. The
starting production month must be
selected on or before the 14th of the
month before the month for which
payment is sought during fiscal year
2006 and fiscal year 2007. If such date
falls on a weekend, the dairy operation
production start month selection must
be made on the last business day
preceding the weekend. A dairy
operation cannot select a month for
payment which:
(1) Has already begun, except as
provided in paragraph (c)(1) of this
section;
(2) Has already passed; or
(3) During which no milk production
was produced by the dairy operation.
(b) During fiscal year 2006 only,
during April 13, 2006 to May 17, 2006,
a dairy operation can select from:
(1) Any month beginning October
2005 through May 2006, in which there
was a payment rate in effect; or
(2) Any month beginning June 2006
through September 2006, for which the
payment rate is not known and in
accordance with paragraph (a) of this
section.
(c) Dairy operations that submit a
MILC after the CCC-designated signup
period for fiscal year 2006 set forth in
paragraph (b) of this section, but before
September 30, 2007, can select the MILC
production start month from:
(1) The month the MILC is submitted
to CCC by the dairy operation or the
next consecutive month with a payment
rate in effect following the month the
MILC is submitted to CCC by the dairy
operation, if no payment rate is in effect
in the month the MILC is submitted;
(2) The months remaining in the fiscal
year in which the MILC is submitted for
which the payment rate is not known in
accordance with paragraph (a) of this
section.
(d) Dairy operations may change the
production starting month on or before:
(1) The 15th day of the month
previously selected during fiscal years
2002 through 2005;
(2) The 14th day of the month
previously selected during fiscal years
2006 and 2007.
(e) If a change of the production
starting month is not made by the dates
required by paragraph (d) of this
section, the MILC production starting
month cannot be changed until the next
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fiscal year. If the selected MILC
production starting month is never
modified, it will remain the same
throughout the duration of the contract.
(f) MILC payments will be made
consecutively to the dairy operation on
a monthly basis after the production
starting month has been designated
until the earlier of the following:
(1) Payment quantity is reached in
accordance with § 1430.207; or
(2) The end of the applicable fiscal
year.
(g)(1) During fiscal years 2002 through
2005, dairy operations that did not
designate the month to begin receiving
payments from CCC were issued
consecutive payments on a monthly
basis on marketed milk production
beginning in the first month of the fiscal
year with a payment rate in effect,
unless FSA was notified that a month
would be designated at a later date.
During fiscal years 2006 and 2007, dairy
operations must designate a MILC
production start month to begin
receiving payments from CCC. MILC
production start month selections made
during the signup period designated by
CCC may be made as provided in
paragraph (b)(1) of this section,
otherwise MILC production start month
selections must be made in accordance
with paragraph (c) of this section.
(2) Dairy operations with MILC
production start months that begin with
the month a MILC is submitted to FSA
or that begin with the first month of the
fiscal year with an effective payment
rate will receive payments made by CCC
consecutively on a monthly basis until
the earlier of the following:
(i) The maximum payment quantity is
reached as determined in accordance
with § 1430.207; or
(ii) The end of the applicable fiscal
year.
(h) All producers involved in the
dairy operation must agree to the month
designated. The dairy operation
assumes the risk of not reaching the
maximum payment quantity based on
the month selected by the dairy
operation. Payments will not be issued
for past months for the sole purpose of
reaching the maximum payment
quantity.
§ 1430.206
[Removed]
5. Section 1430.206 is removed and
reserved.
I 6. Amend § 1430.208 by revising
paragraphs (a), (b)(2), and adding (b)(3)
and (c)(3) to read as follows:
I
§ 1430.208 Payment rate and dairy
operation payment.
(a) Payments under this subpart may
be made to dairy operations when the
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19623
Boston Class I milk price under the
applicable Federal milk marketing order
is below $16.94 per cwt. No payments
will be made to dairy operations for
marketings during the months that the
Boston Class I milk price under the
applicable milk marketing order is equal
to or exceeds $16.94.
(b) * * *
(2) Multiplying the difference by 34
percent during the period beginning on
October 1, 2005, and ending on August
31, 2007; and
(3) Multiplying the difference by 0
percent during the period beginning on
September 1, 2007, and ending on
September 30, 2007.
(c) * * *
(3) Payments to dairy operations will
be based on calculated payment rates
rounded seven places to the right of the
decimal.
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I 7. Amend § 1430.209 by revising the
section heading and paragraph (a) to
read as follows:
§ 1430.209 Proof of market loss
production.
(a) A dairy operation entering into a
MILC must, based on instructions
issued by the Deputy Administrator,
provide adequate proof of the dairy
operation’s eligible production during
the months of each fiscal year
designated in the MILC. The dairy
operation must also provide proof that
the eligible production was
commercially marketed during the
months beginning October 1, 2005, and
ending September 30, 2007. Evidence of
milk production claimed for payment
shall be provided to CCC with
supporting documentation under
paragraph (b) of this section. All
information provided is subject to
verification, spot check and audit by
FSA. Further verification information
may be obtained from the dairy
operation’s milk handler or marketing
cooperative if deemed necessary by CCC
to verify provided information. Refusal
to allow a representative of CCC or any
other agency of the Department of
Agriculture to verify any information
provided will result in a determination
of ineligibility for benefits under this
subpart.
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I 8. Amend § 1430.211 by revising
paragraph (a) to read as follows:
§ 1430.211
Duration of contracts.
(a) Except as provided in §§ 1430.205,
or elsewhere in this subpart, a MILC
entered into by producers in a dairy
operation shall cover eligible
production marketed by the producers
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19624
Federal Register / Vol. 71, No. 73 / Monday, April 17, 2006 / Rules and Regulations
Federal Aviation Administration
• Government-wide rulemaking Web
site: Go to https://www.regulations.gov
and follow the instructions for sending
your comments electronically;
• Mail: Docket Management Facility;
U.S. Department of Transportation, 400
Seventh Street, SW., Nassif Building,
Room PL–401, Washington, DC 20590;
• Fax: (202) 493–2251; or
• Hand Delivery: Room PL–401 on
the plaza level of the Nassif Building,
400 Seventh Street, SW., Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
You may get the service information
identified in this AD from Brantly
International, Inc., Wilbarger County
Airport, 12399 Airport Drive, Vernon,
Texas 76384, telephone 940–552–5451.
14 CFR Part 39
Examining the Docket
[Docket No. FAA–2006–24447; Directorate
Identifier 2005–SW–35–AD; Amendment 39–
14562; AD 2006–08–07]
You may examine the docket that
contains the AD, any comments, and
other information on the Internet at
https://dms.dot.gov, or in person at the
Docket Management System (DMS)
Docket Offices between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays. The Docket Office
(telephone (800) 647–5227) is located on
the plaza level of the Department of
Transportation Nassif Building at the
street address stated in the ADDRESSES
section. Comments will be available in
the AD docket shortly after the DMS
receives them.
FOR FURTHER INFORMATION CONTACT:
Marc Belhumeur, Aviation Safety
Engineer, FAA, Rotorcraft Directorate,
Rotorcraft Certification Office, Fort
Worth, Texas 76193–0170, telephone
(817) 222–5177, fax (817) 222–5783.
SUPPLEMENTARY INFORMATION: This
amendment adopts a new AD for the
specified Brantly model helicopters.
This action requires certain inspections
and measurements of the gearbox, shaft,
housing and their associated parts; and
of the bushing. This amendment is
prompted by an accident and an
incident report of fatigue cracking of a
shaft. The fatigue cracking may have
been caused by higher than expected
loads, most likely due to misalignment.
Fatigue cracking of the shaft, if not
detected, could result in failure of the
shaft and subsequent loss of control of
the helicopter.
We have reviewed Brantly Service
Bulletin No. 105, Revision A, dated
August 3, 2005 (SB), which describe
procedures for certain inspections of the
gearbox, shaft, housing, and bushing for
helicopters, serial number 2001 and
larger, or any serial-numbered
helicopter with a shaft, part number (P/
N) 249–10, installed, that was
purchased after 1994.
in the dairy operation during the period
beginning with the first day of the
month the producers in the dairy
operation enter into an MILC and
ending on September 30, 2007.
*
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*
Signed in Washington, DC, on April 12,
2006.
Thomas B. Hofeller,
Acting Executive Vice President, Commodity
Credit Corporation.
[FR Doc. 06–3669 Filed 4–13–06; 1:29 pm]
BILLING CODE 3410–05–P
DEPARTMENT OF TRANSPORTATION
RIN 2120–AA64
Airworthiness Directives; Brantly
International, Inc. Model B–2, B–2A,
and B–2B Helicopters
Federal Aviation
Administration, DOT.
ACTION: Final rule; request for
comments.
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AGENCY:
SUMMARY: This amendment adopts a
new airworthiness directive (AD) for the
specified Brantly International, Inc.
(Brantly) model helicopters. This action
requires certain inspections and
measurements of the upper tail rotor
vertical gearbox (gearbox), vertical shaft
(shaft) and shaft housing (housing) and
their associated parts; and of the
intermediate gear box bushing
(bushing). This amendment is prompted
by an accident and an incident report of
fatigue cracking of a shaft. The actions
specified in this AD are intended to
prevent fatigue cracking of a shaft,
failure of a shaft, and subsequent loss of
control of the helicopter.
DATES: Effective May 2, 2006.
The incorporation by reference of
certain publications listed in the
regulations is approved by the Director
of the Federal Register as of May 2,
2006.
Comments for inclusion in the Rules
Docket must be received on or before
June 16, 2006.
ADDRESSES: Use one of the following
addresses to submit comments on this
AD:
• DOT Docket Web site: Go to https://
dms.dot.gov and follow the instructions
for sending your comments
electronically;
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This unsafe condition is likely to exist
or develop on other helicopters of the
same type design. Therefore, this AD is
being issued to prevent fatigue cracking
of the shaft, failure of the shaft, and
subsequent loss of control of the
helicopter. This AD requires, within 10
hours time-in-service (TIS) and before
further flight after any hard landing or
any main or tail rotor sudden stoppage:
• Removing the gearbox, P/N 278–
200; shaft, P/N 249–10; housing, P/N
249–3; and the bushing, P/N 252–4.
• Inspecting and measuring the flange
retainer, P/N 15–17, and replacing the
flange retainer with an airworthy flange
retainer if the part is deformed or if the
inside diameter is not 1.5050 to 1.5060
inches.
• Inspecting and measuring the
housing, P/N 249–3, and replacing the
housing with an airworthy housing if
the part is deformed or if any outer
diameter not on the flared end is not
1.497 to 1.500 inches or if the outer
diameter of the flared end is not 1.844
to 1.875 inches.
• Inspecting and measuring the
bushing, P/N 252–4, and replacing it if
its length is not .292 to .302 inch or if
nicks or scoring is found.
• Inspecting and measuring the bevel
pinion gear (gear), P/N 15–8, and
replacing the gear with an airworthy
gear if certain conditions exist.
• Inspecting each vertical shaft
attachment bolt, P/N 15–201 and P/N
249–11, measuring the grip diameter,
and replacing any bolt with an
airworthy bolt if it has fretting or nicks
or if the grip diameter is not .1889 to
.1894 inch.
• Inspecting the male coupling, P/N
249–9, and measuring the bolt hole and
bore diameter and replacing the male
coupling with an airworthy male
coupling if certain conditions exist.
• Inspecting the shaft, P/N 249–10,
for misalignment; measuring the
diameter of the bolt holes; inspecting for
straightness of the shaft; magnetic
particle inspecting the shaft for a crack;
visually inspecting the shaft; and
replacing the shaft if certain conditions
exist.
• Assembling and inspecting the
gearbox, P/N 278–200, the shaft, P/N
249–10, and the housing, P/N 249–3;
inspecting the bore for foreign objects or
burrs before assembling the pinion gear
and the male coupling to the shaft; and
replacing any unairworthy parts.
This AD further requires:
• Ensuring that the intermediate
gearbox, P/N 278–100, its cover, P/N
252–3, and the bushing, P/N 252–4, the
long horizontal shaft housing, P/N 14–
13, and its retainer flange, P/N 15–17,
are aligned and bolted down without
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Agencies
[Federal Register Volume 71, Number 73 (Monday, April 17, 2006)]
[Rules and Regulations]
[Pages 19621-19624]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3669]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
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.
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Federal Register / Vol. 71, No. 73 / Monday, April 17, 2006 / Rules
and Regulations
[[Page 19621]]
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1430
RIN 0560-AH47
Milk Income Loss Contract Program
AGENCIES: Commodity Credit Corporation, USDA.
ACTION: Final rule.
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SUMMARY: This rule amends the regulations for the Milk Income Loss
Contract (MILC) Program as authorized by the Agriculture Reconciliation
Act of 2005 to extend the program from October 1, 2005, to September
30, 2007. This rule also decreases the percentage rate for the payment
calculation and removes the transition rule required at the beginning
of the program.
DATES: Effective Date: April 13, 2006.
FOR FURTHER INFORMATION CONTACT: Danielle Cooke, Special Programs
Manager, Price Support Division, FSA/USDA, STOP 0512, 1400 Independence
Ave., SW., Washington, DC 20250-0512; telephone (202) 720-1919;
facsimile (202) 690-1536; e-mail: Danielle.Cooke@wdc.usda.gov. Persons
with disabilities who require alternative means for communication
(Braille, large print, audiotape, etc.) should contact the USDA Target
Center at (202) 720-2600 (voice and TDD).
SUPPLEMENTARY INFORMATION:
Background
This final rule implements amendments made by section 1101 of the
Deficit Reduction Act of 2005 (2005 Act) to section 1502 of the Farm
Security and Rural Investment Act of 2002 (2002 Act), which is the
authority for the Milk Income Loss Contract (MILC) Program administered
by the Commodity Credit Corporation (CCC). The MILC program was
implemented by a final rule on October 18, 2002 (67 FR 64454). The
program was in effect from December 1, 2001, through September 30, 2005
and was extended by the 2005 Act with minor amendments. Accordingly,
this rule amends 7 CFR part 1430 to: continue the MILC program until
September 30, 2007; decrease the payment rate percentage during the
extension period; and remove transition payment provisions.
The MILC Program supports the dairy industry by providing direct
counter-cyclical payments to milk producers when the Boston Milk
Marketing Order Class I price for fluid milk falls below the benchmark
of $16.94 per hundredweight (cwt). An eligible operation is determined
in each state in the same manner as under Dairy Market Loss Assistance
(DMLA) Program contracts. Any new contracts must be unaffiliated with
prior DMLA operations. Each fiscal year, eligible dairy operations can
receive a monthly payment based on monthly commercial milk marketings,
up to a maximum of 2.4 million pounds per dairy operation for the
fiscal year. A dairy operation's eligible monthly payment was based on
the quantity of milk sold in that month, up to a maximum of 2.4 million
pounds, multiplied by 45 percent of the difference between $16.94/cwt
and the Federal milk marketing order Class I milk price per cwt in
Boston, Massachusetts for that month. To facilitate the transition to
this new program from previous DMLA programs administered by FSA, a
transition period provision was implemented using a similar payment
calculation for the period from December 1, 2001, through the month
preceding the month the producer enters into a contract with CCC.
To be eligible for the MILC program producers in a dairy operation
must: (1) Produce in the United States and market milk commercially
during the period December 1, 2001, through September 30, 2005; (2)
enter into a contract with CCC to provide monthly marketing data to
receive payments; and (3) be engaged in the business of producing and
marketing agricultural products at the time of signing the MILC program
contract. MILC contracts under these program provisions expired on
September 30, 2005.
The extension of the MILC program commences October 1, 2005 and
ends September 30, 2007. Generally other program provisions remain the
same under the MILC Program extension, except that a dairy operation's
eligible monthly payment will be the quantity of milk sold in that
month, up to a maximum of 2.4 million pounds, multiplied by 34 percent
of the difference between $16.94 per cwt and the Federal milk marketing
order Class I milk price per cwt in Boston for that month. Also,
section 1101 of the 2005 Act provides: (1) As of September 1, 2007, the
percent difference in price per cwt used to calculate payments is zero
(0%); (2) the program will expire on September 30, 2007, and; (3)
transition period provisions which were necessary for the transition
from previous Dairy Market Loss Assistance programs to the new MILC
Program are deleted.
To be eligible producers must: (1) Enter into a contract with CCC
to provide monthly marketing data to receive payments during the
extended period; (2) agree to the program provisions for the extended
period; (3) be actively engaged in the business of producing and
marketing agricultural products anytime during the period of October 1,
2005, through September 30, 2007; and (4) select the MILC production
start month that the dairy operation would like to begin receiving
payment from CCC based on the selected month's commercially marketed
production. Dairy operations may apply in person at FSA county offices
during regular business hours, or via facsimile or the Internet at
https://www.fsa.usda.gov/dafp/psd/. Since the legislation authorizing
the extension of this program was signed after the beginning date of
the extended period and although a payment rate was not in effect
during the months of October and November 2005, payment rates have been
established for the months of December 2005 through May 2006.
Therefore, for the CCC fiscal year (FY) 2006 only, during a sign-up
period from April 13, 2006 to May 17, 2006, producers in dairy
operations will be allowed to select retroactively, with some
limitations, the MILC production start month from these months.
Producers choosing not to select from the retroactive months of October
2005 through May 2006, will be allowed, with some limitations, to
choose a month from the months remaining in the fiscal year for which
CCC will begin
[[Page 19622]]
issuing payments based on the selected month's commercial milk
marketings. Producers entering into a MILC after the designated sign-up
period ends but before the program expires on September 30, 2007, and
producers during FY 2007 are also allowed to choose the MILC production
start month for the dairy operation. Those selections, however, under
this rule must be made in advance of the announcement of the Boston
Class I milk price and establishment of the MILC payment rate for those
months. Producers submitting contracts after the designated sign-up
period will not have the option to select from retroactive months.
MILC payments will be based on the commercially-marketed milk
production from the MILC production start month selected by the dairy
operation, and continue with each subsequent month's commercial milk
production consecutively thereafter until the earlier of the maximum
payment quantity of 2.4 million pounds is reached or the end of the
applicable FY. Other policy determinations necessary to implement the
statute are reflected in the text of the rule.
Notice and Comment
Section 1601(c) of the Farm Security and Rural Investment Act of
2002 (Pub. L. 107-171) requires that the regulations necessary to
implement Title I of the 2002 Act are to be promulgated without regard
to the notice and comment provisions of 5 U.S.C. 553 or the Statement
of Policy of the Secretary of Agriculture effective July 24, 1971, (36
FR 13804) relating to notices of proposed rulemaking and public
participation in rulemaking. These regulations are thus issued as
final.
Executive Order 12866
This final rule is economically significant according to Executive
Order 12866 and has been reviewed by the Office of Management and
Budget (OMB). A cost-benefit assessment of the actions this rule will
take was completed and is summarized after the background section.
Federal Assistance Programs
The title and number of the Federal assistance program in the
Catalog of Federal Domestic Assistance to which this final rule applies
is 10.051--Commodity Loans and Loan Deficiency Payments.
Regulatory Flexibility Act
The Regulatory Flexibility Act is not applicable to this rule
because the Office of the Secretary, FSA and CCC are not required by 5
U.S.C. 553 or any other law to publish a notice of proposed rulemaking
with respect to the subject matter of this rule.
Environmental Assessment
The environmental impacts of this final rule were considered in
accordance with the provisions of the National Environmental Policy Act
of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the Council
on Environmental Quality (40 CFR parts 1500-1508), and FSA's
regulations for compliance with NEPA, 7 CFR part 799. FSA has concluded
that the rule will have no significant impacts upon the human
environment as documented through the completion of an environmental
evaluation. A copy of the environmental evaluation is available for
inspection and review upon request.
Executive Order 12778
The final rule has been reviewed under Executive Order 12778. This
rule preempts State laws that are inconsistent with its provisions.
This rule is retroactive to September 30, 2005. Before any judicial
action may be brought regarding this rule, all administrative remedies
must be exhausted.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires consultation with State and local officials. See the notice
related to 7 CFR part 3015, subpart V, published at 48 FR 29115 (June
24, 1983).
Unfunded Mandates
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does
not apply to this rule because the Office of the Secretary, FSA and CCC
are not required by 5 U.S.C. 553 or any other law to publish a notice
of proposed rulemaking about the subject matter of this rule. Further,
this rule imposes no unfunded mandates, as defined in UMRA, on any
local, state, or tribal government or the private sector.
Paperwork Reduction Act
Section 1601(c) of the 2002 Act provides that the promulgation of
regulations and the administration of Title I of the 2002 Act shall be
made without regard to chapter 5 of title 44 of the United States Code
(the Paperwork Reduction Act). Accordingly, these regulations and the
forms, and other information collection activities needed to administer
the program authorized by these regulations, are not subject to review
by the Office of Management and Budget under the Paperwork Reduction
Act.
Summary of Economic Impacts
The MILC has paid about $2.0 billion to dairy operations over the
four initial years of operation. Expenditures during the extended
period, FY 2006 and FY 2007, are expected to be between $700 and $900
million based on estimated milk prices during the period. Dairy farm
income and Government expenditures will increase equally.
List of Subjects in 7 CFR Part 1430
Dairy products, Loan programs/agriculture, Price support programs,
Reporting and recordkeeping requirements.
0
For the reasons set out in the preamble, 7 CFR part 1430 is amended as
set forth below.
PART 1430--DAIRY PRODUCTS
0
1. The authority citation continues to read as follows:
Authority: 7 U.S.C. 7981 and 7982; 15 U.S.C. 714b and 714c; Pub.
L. 108-324, 118 Stat. 1220.
Subpart B--Milk Income Loss Contract Program
0
2. Amend Sec. 1430.202 by revising the definition of ``Eligible
production'' to read as follows:
Sec. 1430.202 Definitions.
* * * * *
Eligible production means milk that was produced by cows in the
United States and marketed commercially during the period of December
1, 2001, through September 30, 2007, up to a maximum of 2.4 million
pounds per dairy operation per fiscal year.
* * * * *
0
3. Amend Sec. 1430.203 by revising paragraphs (a) and (f) to read as
follows:
Sec. 1430.203 Eligibility.
* * * * *
(a) Have produced milk in the United States and commercially
marketed the milk produced anytime during the period of December 1,
2001, through September 30, 2007;
* * * * *
(f) Be actively engaged in the business of producing and marketing
agricultural products anytime during the period of December 1, 2001,
through September 30, 2007.
* * * * *
0
4. Revise Sec. 1430.205 to read as follows:
[[Page 19623]]
Sec. 1430.205 Selection of starting month.
(a) A dairy operation that enters into a MILC with CCC must
designate the starting production month that it desires CCC to begin
making payments to them. The starting production month must be selected
on or before the 15th of the month before the month for which payment
is sought during fiscal year 2002 through fiscal year 2005. The
starting production month must be selected on or before the 14th of the
month before the month for which payment is sought during fiscal year
2006 and fiscal year 2007. If such date falls on a weekend, the dairy
operation production start month selection must be made on the last
business day preceding the weekend. A dairy operation cannot select a
month for payment which:
(1) Has already begun, except as provided in paragraph (c)(1) of
this section;
(2) Has already passed; or
(3) During which no milk production was produced by the dairy
operation.
(b) During fiscal year 2006 only, during April 13, 2006 to May 17,
2006, a dairy operation can select from:
(1) Any month beginning October 2005 through May 2006, in which
there was a payment rate in effect; or
(2) Any month beginning June 2006 through September 2006, for which
the payment rate is not known and in accordance with paragraph (a) of
this section.
(c) Dairy operations that submit a MILC after the CCC-designated
signup period for fiscal year 2006 set forth in paragraph (b) of this
section, but before September 30, 2007, can select the MILC production
start month from:
(1) The month the MILC is submitted to CCC by the dairy operation
or the next consecutive month with a payment rate in effect following
the month the MILC is submitted to CCC by the dairy operation, if no
payment rate is in effect in the month the MILC is submitted;
(2) The months remaining in the fiscal year in which the MILC is
submitted for which the payment rate is not known in accordance with
paragraph (a) of this section.
(d) Dairy operations may change the production starting month on or
before:
(1) The 15th day of the month previously selected during fiscal
years 2002 through 2005;
(2) The 14th day of the month previously selected during fiscal
years 2006 and 2007.
(e) If a change of the production starting month is not made by the
dates required by paragraph (d) of this section, the MILC production
starting month cannot be changed until the next fiscal year. If the
selected MILC production starting month is never modified, it will
remain the same throughout the duration of the contract.
(f) MILC payments will be made consecutively to the dairy operation
on a monthly basis after the production starting month has been
designated until the earlier of the following:
(1) Payment quantity is reached in accordance with Sec. 1430.207;
or
(2) The end of the applicable fiscal year.
(g)(1) During fiscal years 2002 through 2005, dairy operations that
did not designate the month to begin receiving payments from CCC were
issued consecutive payments on a monthly basis on marketed milk
production beginning in the first month of the fiscal year with a
payment rate in effect, unless FSA was notified that a month would be
designated at a later date. During fiscal years 2006 and 2007, dairy
operations must designate a MILC production start month to begin
receiving payments from CCC. MILC production start month selections
made during the signup period designated by CCC may be made as provided
in paragraph (b)(1) of this section, otherwise MILC production start
month selections must be made in accordance with paragraph (c) of this
section.
(2) Dairy operations with MILC production start months that begin
with the month a MILC is submitted to FSA or that begin with the first
month of the fiscal year with an effective payment rate will receive
payments made by CCC consecutively on a monthly basis until the earlier
of the following:
(i) The maximum payment quantity is reached as determined in
accordance with Sec. 1430.207; or
(ii) The end of the applicable fiscal year.
(h) All producers involved in the dairy operation must agree to the
month designated. The dairy operation assumes the risk of not reaching
the maximum payment quantity based on the month selected by the dairy
operation. Payments will not be issued for past months for the sole
purpose of reaching the maximum payment quantity.
Sec. 1430.206 [Removed]
0
5. Section 1430.206 is removed and reserved.
0
6. Amend Sec. 1430.208 by revising paragraphs (a), (b)(2), and adding
(b)(3) and (c)(3) to read as follows:
Sec. 1430.208 Payment rate and dairy operation payment.
(a) Payments under this subpart may be made to dairy operations
when the Boston Class I milk price under the applicable Federal milk
marketing order is below $16.94 per cwt. No payments will be made to
dairy operations for marketings during the months that the Boston Class
I milk price under the applicable milk marketing order is equal to or
exceeds $16.94.
(b) * * *
(2) Multiplying the difference by 34 percent during the period
beginning on October 1, 2005, and ending on August 31, 2007; and
(3) Multiplying the difference by 0 percent during the period
beginning on September 1, 2007, and ending on September 30, 2007.
(c) * * *
(3) Payments to dairy operations will be based on calculated
payment rates rounded seven places to the right of the decimal.
* * * * *
0
7. Amend Sec. 1430.209 by revising the section heading and paragraph
(a) to read as follows:
Sec. 1430.209 Proof of market loss production.
(a) A dairy operation entering into a MILC must, based on
instructions issued by the Deputy Administrator, provide adequate proof
of the dairy operation's eligible production during the months of each
fiscal year designated in the MILC. The dairy operation must also
provide proof that the eligible production was commercially marketed
during the months beginning October 1, 2005, and ending September 30,
2007. Evidence of milk production claimed for payment shall be provided
to CCC with supporting documentation under paragraph (b) of this
section. All information provided is subject to verification, spot
check and audit by FSA. Further verification information may be
obtained from the dairy operation's milk handler or marketing
cooperative if deemed necessary by CCC to verify provided information.
Refusal to allow a representative of CCC or any other agency of the
Department of Agriculture to verify any information provided will
result in a determination of ineligibility for benefits under this
subpart.
* * * * *
0
8. Amend Sec. 1430.211 by revising paragraph (a) to read as follows:
Sec. 1430.211 Duration of contracts.
(a) Except as provided in Sec. Sec. 1430.205, or elsewhere in this
subpart, a MILC entered into by producers in a dairy operation shall
cover eligible production marketed by the producers
[[Page 19624]]
in the dairy operation during the period beginning with the first day
of the month the producers in the dairy operation enter into an MILC
and ending on September 30, 2007.
* * * * *
Signed in Washington, DC, on April 12, 2006.
Thomas B. Hofeller,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 06-3669 Filed 4-13-06; 1:29 pm]
BILLING CODE 3410-05-P