National Dairy Promotion and Research Program; Proposed Rule and Opportunity To File Comments, Including Written Exceptions, on Proposed Amendments to the Order, 23359-23370 [E9-11492]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 74, Number 95 (Tuesday, May 19, 2009)]
[Proposed Rules]
[Pages 23359-23370]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-11492]


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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. 74, No. 95 / Tuesday, May 19, 2009 / Proposed 
Rules

[[Page 23359]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1150

[Docket No. DA-08-07: AMS-DA-08-0050]


National Dairy Promotion and Research Program; Proposed Rule and 
Opportunity To File Comments, Including Written Exceptions, on Proposed 
Amendments to the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This document invites written comments on proposed amendments 
to the Dairy Promotion and Research Order. This proposed action is 
pursuant to the Farm Security and Rural Investment Act of 2002 (2002 
Farm Bill) and the Food, Conservation, and Energy Act of 2008 (2008 
Farm Bill). The 2002 Farm Bill mandates that the Dairy Promotion and 
Research Order be amended to implement an assessment on imported dairy 
products to fund promotion and research. The 2008 Farm Bill specifies a 
mandatory assessment rate of 7.5 cents per hundredweight of milk, or 
equivalent thereof, on dairy products imported into the United States. 
This proposed rule, in accordance with the 2008 Farm Bill, amends the 
term ``United States'' in the Dairy Production Stabilization Act of 
1983 (7 U.S.C. 4501-4514, as amended) to mean all States, the District 
of Columbia, and the Commonwealth of Puerto Rico. Producers in these 
areas will be assessed 15 cents per hundredweight for all milk produced 
and marketed.

DATES: Comments must be submitted on or before June 18, 2009.

ADDRESSES: Comments on this proposed rule should be identified with the 
docket number AMS-DA-08-0050; DA-08-07. Commenters should identify the 
date and page number of the issue of the proposed rule. Interested 
persons may comment using any of the following procedures:
     Mail: Comments may be submitted by mail to Whitney A. 
Rick, Chief, Promotion and Research Branch, Dairy Programs, AMS, USDA, 
1400 Independence Ave., SW., Room 2958-S, Stop 0233, Washington, DC 
20250-0233.
     Fax: Comments may be faxed to (202) 720-0285.
     E-mail: Comments may be e-mailed to Whitney.Rick@usda.gov.
     Internet: https://www.regulations.gov.

    All comments submitted by the above procedures will be available 
for viewing at: https://www.regulations.gov, or at USDA, AMS, Dairy 
Programs, Promotion and Research Branch, Room 2958-S, 1400 Independence 
Ave., SW., Washington, DC, from 9 a.m. to 4 p.m., Monday through 
Friday, (except on official Federal holidays). Persons wanting to view 
comments in Room 2958-S are requested to make an appointment in advance 
by calling (202) 720-6909.

FOR FURTHER INFORMATION CONTACT: Whitney Rick, USDA, AMS, Dairy 
Programs, Promotion and Research Branch, Stop 0233-Room 2958-S, 1400 
Independence Avenue, SW., Washington, DC 20250-0233, (202) 720-6909, 
Whitney.Rick@usda.gov.

SUPPLEMENTARY INFORMATION: This proposed rule is pursuant to the Dairy 
Production Stabilization Act of 1983 (7 U.S.C. 4501, et seq.), Public 
Law 98-180, enacted November 29, 1983, as amended May 13, 2002, by 
Public Law No. 107-171, and further amended June 18, 2008, by Public 
Law No. 110-246.

Executive Order 12866

    This proposed rule has been determined to significant for purposes 
of Executive Order 12866 and, therefore, has been reviewed by the 
Office of Management and Budget. A cost-benefit analysis for this 
proposed rule is available at https://www.ams.usda.gov/dairyimportassessment.
    Assessments to dairy producers under the Order are relatively small 
compared to producer revenue. If dairy producers in Alaska, Hawaii, the 
District of Columbia, and the Commonwealth of Puerto Rico had paid 
assessments of $0.15 per hundredweight of milk marketed in 2007, it is 
estimated that $1.1 million would have been paid. This is about 0.6 
percent of the $192 million total value of milk produced and marketed 
in these areas.
    The assessments collected from importers under the Dairy Promotion 
and Research Program are expected to be relatively small compared to 
the value of dairy imports. If importers had been assessed $0.075 per 
hundredweight, or equivalent thereof, for imported dairy products in 
2007 as specified in this rule, it is estimated that less than $6.1 
million would have been paid. This is about 0.3 percent of the $2.4 
billion value of the dairy products imported in 2007.
    Examination of import volumes for 2007 indicates that tariff rate 
quotas (TRQs) seem to constrain dairy imports in varying degrees for 
some products, but not for others. TRQs do not seem to be a significant 
hindrance to the volume imported for many dairy products. Significant 
quantities of dairy products imported are not subject to TRQs.
    The Program promotes dairy ingredients through DMI's Innovation and 
Ingredients Program and through the Web site https://www.innovatewithdairy.com. Through importer representation on the Dairy 
Board and possible establishment of qualified programs by importers, 
imported products could be promoted to a greater extent than with 
current program.

Civil Rights Analysis

    Consideration has been given to the potential civil rights 
implications of this proposed rule on affected parties 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. Although detailed information 
is not available on importers who would be subject to the amendments or 
the users of imported dairy products, broad consideration was given to 
the employees of such entities and those individuals who wish to use 
information collected under this mandatory program concerning the 
assessing of dairy product importers. This proposed rule does not 
require affected entities to relocate or alter their operations in ways 
that could adversely affect such persons or groups. Moreover, the 
amendments would not exclude from participation any persons or

[[Page 23360]]

groups, deny any persons or groups the benefits of the program, or 
subject any persons or groups to discrimination.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have a 
retroactive effect. If adopted, this proposed rule would not preempt 
any State or local laws, regulations, or policies unless they present 
an irreconcilable conflict with this rule.
    The Dairy Production Stabilization Act of 1983 authorizes the 
National Dairy Promotion and Research Program. The Act provides that 
administrative proceedings must be exhausted before parties may file 
suit in court. Under section 4509 of the Act, any person subject to the 
Dairy Promotion and Research Order may file with the Secretary a 
petition stating that the Order, any provision of the Order, or any 
obligation imposed in connection with the Order is not in accordance 
with the law and requesting a modification of the Order or to be 
exempted from the Order. A person subject to an Order is afforded the 
opportunity for a hearing on the petition. After a hearing, the 
Secretary would rule on the petition. The Act provides that the 
district court of the United States in any district in which the person 
is an inhabitant, or has his principal place of business, has 
jurisdiction to review the Secretary's ruling on the petition, provided 
a complaint is filed not later than 20 days after the date of the entry 
of the ruling.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the Agricultural Marketing Service has considered the economic 
impact of this action on small entities and has certified that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities. The purpose of the Regulatory 
Flexibility Act is to fit regulatory actions to the scale of businesses 
subject to such actions so that small businesses will not be 
disproportionately burdened.
    The Dairy Production Stabilization Act of 1983 authorizes a 
national program for dairy product promotion, research and nutrition 
education. Congress found that it is in the public interest to 
authorize the establishment of an orderly procedure for financing 
through assessments on all milk produced in the United States for 
commercial use and on imported dairy products, to carry out a 
coordinated program of promotion designed to strengthen the dairy 
industry's position in the marketplace and to maintain and expand 
domestic and foreign markets and uses for fluid milk and dairy 
products.
    As directed by the 2008 Farm Bill, approximately 360 producers in 
Alaska, Hawaii, the District of Columbia, and the Commonwealth of 
Puerto Rico will become subject to the provisions of the Dairy 
Promotion and Research Order. The Small Business Administration [13 CFR 
121.201] defines small dairy producers as those having annual receipts 
of $750,000 or less annually. Most of the producers who will become 
subject to the proposed provisions of the Order are considered small 
entities.
    Assessments to dairy producers under the Order are relatively small 
compared to producer revenue. If dairy producers in Alaska, Hawaii, the 
District of Columbia, and the Commonwealth of Puerto Rico had paid 
assessments of $0.15 per hundredweight of milk marketed in 2007, it is 
estimated that $1.1 million would have been paid. This is about 0.6 
percent of the $192 million total value of milk produced and marketed 
in these areas. The assessment for dairy producers in Alaska, Hawaii, 
the District of Columbia, and the Commonwealth of Puerto Rico will be 
collected by persons who pay the producers for milk produced and 
marketed, and the money will be remitted to the National Dairy 
Promotion and Research Board (Dairy Board).\1\ These ``responsible 
persons,'' usually milk handlers, incur the cost of calculating the 
assessment due from each dairy producer, forwarding a form monthly to 
the Dairy Board, and sending checks to the Dairy Board and designated 
Qualified Programs. Responsible persons maintain any records that are 
necessary to account for the collection of the 15-cent assessment. 
Books and records for producers and persons collecting assessments 
subject to the Order shall be maintained for two years beyond the 
fiscal period of their applicability. These books and records would be 
made available to employees or agents of the Dairy Board or the 
Department during normal business hours for inspection if necessary for 
verification purposes. For the purpose of the Regulatory Flexibility 
Act, a dairy products manufacturer is a small business if it has fewer 
than 500 employees. For purposes of determining a milk handler's size, 
if the plant is part of a larger company operating multiple plants that 
collectively exceed the 500-employee limit, the plant is considered a 
large business even if the local plant has fewer than 500 employees. 
While the number of responsible persons collecting assessments under 
the Order in Alaska, Hawaii, the District of Columbia, and the 
Commonwealth of Puerto Rico are not known, we would expect that most 
would be considered small businesses.
---------------------------------------------------------------------------

    \1\ Any producer that sells milk directly to consumers shall 
remit the assessment directly to the Dairy Board.
---------------------------------------------------------------------------

    According to the U.S. Customs and Border Protection (CBP), there 
were 1,751 importers of dairy products listed in Sec.  1150.152 (b) in 
2007. Although data is not available concerning the sizes of these 
firms, it is reasonable to assume that most of them would be considered 
small businesses. Although many types of businesses import dairy 
products, the most common classification for dairy product importers is 
Grocery and Related Product Merchant Wholesalers (North American 
Industry Classification System, category 4244). The Small Business 
Administration [13 CFR 121.201] defines such entities with fewer than 
100 employees as small businesses. According to 2005 statistical data 
from the U.S. Census Bureau, 95.4 percent of these types of businesses 
had fewer than 100 employees (https://www.census.gov/csd/susb/susb05.htm).
    This proposed rule would impose minimal reporting and recordkeeping 
requirements on importers subject to the Order. Books and records for 
importers subject to the Order shall be maintained for two years beyond 
the calendar year in which the import occurs. These books and records 
would be made available to employees or agents of the Dairy Board or 
the Department during normal business hours for inspection if necessary 
for verification purposes. Importers must maintain books and records 
sufficient to verify that products have been properly classified 
according to the Harmonized Tariff Schedule (HTS). Importers already 
maintain such books and records in order to comply with tariff 
regulations. In some cases, importers would be required to keep books 
and records concerning specific milk solids content of imported 
products. This rule proposes two methods for importers to calculate 
assessments due. If the importer has sufficient documentation to 
determine the milk solids content of the product to be imported, the 
importer would use an assessment rate of $0.01327 per kilogram (kg) of 
milk solids to calculate and pay the assessment. In many cases, the 
importer would have this documentation on hand as part of normal 
business practice. If the importer does not have adequate documentation 
concerning the milk solids content of the product to be imported, the 
importer would pay a rate per kg of product

[[Page 23361]]

volume as listed in the table displayed in Sec.  1150.152 (b)(1)(ii). 
In this case, it would only be necessary for the importer to maintain 
books and records to verify compliance with certain HTS code assignment 
requirements.
    Assessments to importers under the Order are relatively small 
compared to the value of dairy imports. If importers had been assessed 
$0.075 per hundredweight of milk, or equivalent thereof, on imported 
dairy products in 2007 as specified in this rule, it is estimated that 
less than $6.1 million would have been paid. This is about 0.3 percent 
of the $2.4 billion value of the imported dairy products.
    Finally, this proposed rule provides for importer organizations 
that conduct qualified national, regional, or state dairy product 
promotion, research, or nutrition education programs to receive 
assessment funds upon being designated by individual importers and for 
nominations for representation of importers to be submitted by 
organizations that represent importers of dairy products, as approved 
by the Secretary. While the number of such organizations is expected to 
be small, the members of such organizations reflect the same size 
composition as discussed above.
    Interested persons are requested to comment specifically on the 
number and size of entities that would be regulated by this proposed 
rule.

Paperwork Reduction Act

    Information collection requirements and recordkeeping provisions 
contained in 7 CFR Part 1150 have been previously approved by the 
Office of Management and Budget and assigned OMB Control Number 0581-
0093 under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). 
Section 1601 of the 2002 Farm Bill (Pub. L. 107-171) and section 1601 
of the 2008 Farm Bill (Pub. L. 110-246) exempt this proposed rule from 
the Paperwork Reduction Act. Although exempted, the requirements of the 
Paperwork Reduction Act were considered in developing the provisions of 
this proposed rule. The information collection requirements are minimal 
but essential to carry out the intent of the Dairy Production 
Stabilization Act of 1983. The proposed Order provisions have been 
carefully reviewed and every effort has been made to minimize 
recordkeeping costs or requirements.
    Under the Order, importers would be responsible to pay assessments. 
CBP will serve as the collecting agent for assessments on imported 
dairy products and will remit the assessments to the Dairy Board. The 
Department anticipates that importers would be required to provide 
additional reports and records on occasions when additional information 
is needed as evidence of compliance, or in cases when the importer 
seeks a reimbursement of assessments. Such records must be retained for 
at least 2 years beyond the calendar year of their applicability.
    Under the Order provisions, each person making payment to a 
producer for milk produced in the Untied States and marketed for 
commercial use (responsible person) collects an assessment for all such 
milk handled. Responsible persons calculate the assessments due from 
each dairy producer. Under the proposed order provisions, responsible 
persons making payments to dairy producers in Alaska, Hawaii, the 
District of Columbia, and the Commonwealth of Puerto Rico would be 
required to collect and remit assessments and file reports with the 
Dairy Board. The Order would impose certain recordkeeping requirements 
on responsible persons; however, information required under the Order 
could be compiled from currently maintained records. Any producer 
marketing milk of that producer's own production directly to consumers 
is a responsible person. Such records must be retained for at least 2 
years beyond the calendar year of their applicability.
    The forms on which producer information is to be collected require 
the minimum information necessary to effectively carry out the 
requirements of the Order. There are no training requirements for 
individuals filling out reports and remitting assessments to the Dairy 
Board. The forms are designed to be simple and easy to understand and 
place as small a burden as possible on the persons required to file the 
information.
    The timing and frequency of collecting information are intended to 
meet the needs of the program while minimizing the amount of work 
necessary to fill out the required reports. In addition, the 
information to be included on these forms is not available from other 
sources because such information relates specifically to individual 
producers and responsible persons who are subject to the provisions of 
the Order. Therefore, there is no practical method for collecting the 
required producer information without the use of these forms.
    The assessment would place a minimal burden on newly regulated 
producers or importers who seek to direct monies to Qualified Programs. 
The amount of time required to designate to a qualified program is 
estimated to be 15 minutes to prepare a written request. Qualified 
Programs are certified by the Secretary and authorized by Federal or 
State law for the purpose of promoting dairy products.
    The proposed Order provisions would place a minimal burden on newly 
regulated producers or importers who seek nomination to serve on the 
Dairy Board. Importers and producers would be required to complete a 
background information form for submission to the Secretary. The 
estimated time for completing the form is 30 minutes, which includes 
time for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the form. Additionally, there would be minimal burden on importer 
organizations that voluntarily request to be approved by the Secretary 
to participate in the program by making nominations to the Board. The 
estimated time for reporting this is 30 minutes. This is similar to the 
information collection burden for certification of producer 
organizations.
    Currently, a producer who operates under an approved National 
Organic Program (NOP) (7 CFR Part 205) certificate and thus only 
produces products that are eligible to be labeled as 100 percent 
organic under the NOP, and is not a split operation shall be exempt 
from the payment of assessments. This proposed rule provides that an 
importer who imports only products that are eligible to be labeled as 
100 percent organic under the NOP (7 CFR part 205) and who is not a 
split operation, would be exempt from the payment of assessments. The 
Order places a minimal burden on a producer or importer applying for 
such an exemption. The producer or importer must provide a request to 
the Dairy Board, on a form provided by the Dairy Board, at any time 
initially and annually thereafter. For importers, the documentation is 
the same as for a producer.
    In addition, there are some requirements for information from 
importers that are occasional. For example, if an importer claims a 
refund from the Dairy Board for an overpayment, circumstances dictate 
the time that it would take for the importer to gather the information 
necessary to make the claim. Assembling and transmitting the necessary 
documentation to the Dairy Board would place a minimal burden on 
importers.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies, and to

[[Page 23362]]

provide increased opportunity for citizen access to Government 
information and services and for other purposes.

Background

    The Dairy Production Stabilization Act of 1983 authorizes the Order 
for dairy product promotion, research, and nutrition education as part 
of a comprehensive strategy to increase human consumption of milk and 
dairy products and to reduce milk surpluses. The program functions to 
strengthen the dairy industry's position in the marketplace by 
maintaining and expanding domestic and foreign consumption of fluid 
milk and dairy products.
    Section 1505 of the 2002 Farm Bill requires that the Order be 
amended to implement a mandatory assessment on dairy products imported 
into the United States and that the assessment be submitted to CBP at 
the time entry documents are filed.
    Section 1507 of the 2008 Farm Bill amended the term ``United 
States'' in Section 4502(1) of the Dairy Production Stabilization Act 
of 1983 to mean all of the States, the District of Columbia, and the 
Commonwealth of Puerto Rico. This amendment requires that the States of 
Alaska, Hawaii, the District of Columbia, and the Commonwealth of 
Puerto Rico be added to the existing regions of the Dairy Board and the 
commencement of assessing producers in these areas 15 cents per 
hundredweight on all milk produced and marketed commercially.
    The Order is administered by a 36-member Dairy Board appointed by 
the Secretary representing 13 geographic regions of the United States. 
In order to complement the current geographical make up of the existing 
regions, it is proposed that the each of the four new jurisdictions be 
added to the region of closest geographic proximity. Therefore, Alaska 
would be added to Region 1, currently comprised of Oregon and 
Washington; Hawaii would be added to Region 2, currently California; 
and the District of Columbia and the Commonwealth of Puerto Rico would 
be added to Region 10, currently comprised of Florida, Georgia, North 
Carolina, South Carolina and Virginia. Each person making payment to a 
producer in Alaska, Hawaii, the District of Columbia, and the 
Commonwealth of Puerto Rico for milk produced and marketed for 
commercial use, would be required to collect an assessment on all milk 
handled for the account of the producer at the rate of 15 cents per 
hundredweight and would remit the assessment to the Dairy Board. Any 
producer marketing milk of that producer's own production in the form 
of milk or dairy products to consumers, either directly or through 
retail or wholesale outlets, would remit to the Dairy Board an 
assessment on such milk at the rate of 15 cents per hundredweight. Each 
person responsible for the remittance of the assessment for milk 
marketing from producers in Alaska, Hawaii, the District of Columbia, 
and the Commonwealth of Puerto Rico would remit to the Dairy Board not 
later than the last day of the month following the month in which the 
milk was marketed.
    Section 10607 of the 2002 Farm Bill provides for an exemption from 
payment of assessments by organic milk producers and importers of dairy 
products. Section 1150.157 of the Order currently provides the specific 
requirements necessary for producers to receive the exemption. (See 70 
FR 2744 for a complete discussion of implementation of the provisions 
of section 10607 of the 2002 Farm Bill.) Section 1150.157 would be 
amended to provide an exemption for importers. A producer who operates 
under an approved National Organic Program (NOP) (7 CFR Part 205) 
certificate and thus only produces products that are eligible to be 
labeled as 100 percent organic under the NOP, and is not a split 
operation, would be exempt from the payment of assessments. An importer 
who imports only products that are eligible to be labeled as 100 
percent organic under the NOP (7 CFR part 205), and who is not a split 
operation, would be exempt from the payment of assessments. To receive 
the exemption, producers and importers of products labeled as 100 
percent organic, and who do not produce any non-organic products, would 
provide a request to the Dairy Board, on a form provided by the Dairy 
Board, at any time initially and annually thereafter.
    The 2002 Farm Bill amendments authorize importers to have 
representation on the Dairy Board. Initially, importers are required to 
be represented by at least 2 importers appointed by the Secretary. 
Thereafter, importer representation on the Dairy Board will be adjusted 
at least once every three years, if necessary, to reflect the volume of 
imports relative to domestic marketings of milk. The amendments also 
specify that the assessments may not be used for foreign market 
promotion and that they be implemented in a manner consistent with 
United States trade obligations.
    The 2002 Farm Bill specifies that the assessment be 15 cents per 
hundredweight, or equivalent thereof, on dairy products imported into 
the United States. However, this rate was changed with the 2008 Farm 
Bill; Section 1507 specifies that the assessment will be 7.5 cents per 
hundredweight of milk, or the equivalent thereof. The assessment is 
equivalent to one-half the payment domestic dairy farmers are required 
to remit.
    With the 2002 Farm Bill, the policy statement in the Dairy 
Production Stabilization Act of 1983 has been revised to make it clear 
that the purpose of the program is to expand the consumption of dairy 
products, whether produced domestically or imported. A program that 
promotes the substitution of a dairy product from one source with a 
dairy product from another source would not be consistent with this 
policy. Likewise, the Dairy Board and USDA carefully will consider 
whether any brand advertising or promotion would have a detrimental 
affect on other brands of dairy products before giving approval. No 
program would be approved if it would negatively affect similar 
domestic or imported dairy products.

Preliminary Statement

    The 2002 and 2008 Farm Bills authorize the Secretary to issue 
regulations to implement the mandatory dairy import assessment without 
providing a notice and comment period. However, due to the interest of 
affected parties, a comment period is provided until June 18, 2009.
    Comments may address any proposed provision of the regulation, but 
specifically, interested parties are asked to submit comments on the 
proposed designation of imported dairy products to be assessed under 
the Order and the proposed methods used to calculate assessments on 
such products.
    This proposed rule amends certain provisions of the Order to 
conform to legislative changes of the enacted 2002 and 2008 Farm Bills. 
Section 1505 of the 2002 Farm Bill amends sections 110(b), 111, 112, 
113(b), 113(e), 113(g), 113(k), and 116(b) of the Act, thereby 
necessitating revisions to certain provisions of the Order. Section 
1507 of the 2008 Farm bill amends sections 111, 113(e), 113(g) and 130 
of the Act also necessitating revisions to certain provisions of the 
Order.
    Order provisions would be revised as follows:
    1. In Sec.  1150.106, the term United States would be redefined to 
include all of the States, the District of Columbia, and the 
Commonwealth of Puerto Rico.

[[Page 23363]]

    2. Section 1150.109 would be revised to recognize national 
qualified programs.
    3. In Sec.  1150.111, the term Milk would be redefined to remove 
the necessity that it be produced in the United States.
    4. A new section, Sec.  1150.120, would be added to define the term 
Imported Dairy Product.
    5. A new section, Sec.  1150.121, would be added to define the term 
Importer.
    6. A new section, Sec.  1150.122, would be added to define the term 
CBP.
    7. Section 1150.131 would be modified in total to incorporate the 
requirement that the 36-member Dairy Board be increased initially by 
two importer members to give representation to importers. Procedures 
are established to be applied at least once every three years to 
determine the future importer representation on the Dairy Board. 
Modifications also are made to the regions to include Alaska, Hawaii, 
the District of Columbia, and the Commonwealth of Puerto Rico.
    8. Section 1150.132 would be modified to include the terms of 
office for importer representatives to the Board.
    9. Section 1150.133 would be modified to delete obsolete 
references, to clarify certain terms, and to provide a process for 
importer nominations.
    10. Section 1150.134 would be modified to include importers and to 
include national programs in disclosure requirements.
    11. Section 1150.135 would be modified to reference the proper 
amended sections.
    12. Section 1150.139(e) would be modified to include importers and 
importer organizations.
    13. Section 1150.140(b) would be modified to include importers.
    14. Section 1150.140(n) would be modified to remove the necessity 
for the Dairy Board to encourage coordination of programs designed to 
promote only fluid milk and dairy products produced in the United 
States.
    15. A new paragraph, Sec.  1150.151(c), would be added to limit the 
amount of funds the Dairy Board may expend in foreign market 
development for products manufactured in the United States.
    16. Section 1150.152 would be modified to establish a procedure for 
collecting the assessment on imported dairy products, to establish a 
rate of assessment, to allow importers to receive a credit on 
assessments paid to a Qualified Program, and to properly reference 
amended sections.
    17. Section 1150.153 would be modified to include importers, to 
recognize that national programs may apply for certification of 
qualification, and to indicate that national programs fall under the 
same provisions as State or regional plans. Other sections that 
reference Qualified Programs would also be modified to include national 
programs.
    18. Section 1150.156 would be modified to cover charges and 
penalties for importers.
    19. Section 1150.157 would be modified to remove language 
concerning exemption requests from producers received on or before 
August 15, 2005, and to provide an assessment exemption for importers 
who import only 100 percent organic products.
    20. Section 1150.171 would be revised to require reports from 
importers if necessary for compliance verification and to properly 
reference an amended section.
    21. Section 1150.172 would be modified to add importer books and 
records requirements.
    22. Section 1150.187 would be modified to indicate that information 
and record keeping requirements have been approved by OMB and assigned 
an OMB control number ``as appropriate.''
    The 2002 Farm Bill requires that the Order be amended to provide an 
assessment on imported dairy products into the United States and 
provides for importer representation on the Dairy Board. The 2008 Farm 
Bill requires importers to pay 7.5 cents per hundredweight of milk, or 
the equivalent thereof, on imported dairy products, an assessment which 
is equivalent to one-half the amount domestic dairy producers are 
required to remit.
    The assessments on imported dairy products would be collected by 
CBP from importers at the time the entry summary documents are filed. 
If the importer has adequate documentation concerning the milk solids 
content of the imported dairy product, the assessment would be based 
upon milk solids content of the imported dairy product. If the importer 
does not have adequate documentation concerning the milk solids content 
of the imported dairy product, a default assessment rate for each HTS 
code would be applied. The assessments collected would be transferred 
by CBP to the Dairy Board to fund the national dairy promotion and 
research program. The Dairy Board would establish a compliance program 
and procedures to verify, as necessary, that correct assessments have 
been paid by importers based upon total milk solids content or default 
assessment rates for imported dairy products.
    Since the mandatory 7.5-cent assessment is per one hundred pounds 
of milk, this proposed rule applies a standard rate of assessment per 
unit of milk solids. On average during the period January 2006 through 
December 2007, a hundredweight of U.S. producer milk contained 12.45 
pounds of milk solids (3.68 percent butterfat and 8.77 percent nonfat 
milk solids).\2\ Since the assessment rate stated in the 2008 Farm Bill 
is 7.5 cents per hundredweight of milk or its equivalent, this rule 
establishes the assessment rate per volume of imported milk solids as 
$0.00602 per pound ($0.075/12.45 pounds) or $0.01327 per kg (1 kg = 
2.204623 pounds). This rate would be applied to the estimated milk 
solids content for any imported products listed in the table displayed 
in Sec.  1150.152(b)(1).
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    \2\ National Agricultural Statistics Service (NASS), Dairy 
Products 2007 Annual Summary (April 2008).
---------------------------------------------------------------------------

    If the importer has sufficient documentation to determine the milk 
solids content of the product to be imported, the importer would use 
the assessment rate of $0.01327 per kg of milk solids to calculate and 
pay the assessment. Milk solids of U.S. origin would not be included in 
the calculation. Alternatively, if the importer does not have adequate 
documentation concerning the milk solids content of the imported 
product, the importer would pay a default rate per kg of product volume 
as listed in the table displayed in Sec.  1150.152(b)(1).
    For most products, the default assessment rate for each HTS code 
would be based upon maximum milk solids content. In some cases, the 
maximum milk solids content is stated in the HTS; in other cases, 
various sources other than the HTS would be used to estimate the 
maximum milk solids content for the particular HTS number. In cases 
where maximum milk solids content is not stated in the HTS and cannot 
be estimated, a typical milk solids content is used, if available. 
Where neither a maximum nor a typical milk solids content is available, 
a milk solids content of a similar listed product may be used. In some 
cases, no information is available concerning milk solids content for 
an HTS number other than a minimum requirement stated in the HTS. In 
these cases, this minimum milk solids content stated in the HTS is 
used.
    The various sources used to help determine default assessment rates 
include the HTS; CBP rulings; an April 1991 study by the Commodity 
Analysis Division of the Agricultural Stabilization and Conservation 
Service entitled Methodology of Calculating the Milk Equivalent, Total 
Solids Basis, of

[[Page 23364]]

CCC Purchases of Surplus Dairy Products and of Imports of Dairy 
Products; the Nutrient Database for Standard Reference, USDA 
Agricultural Research Service; a handbook entitled Dairy-Based 
Ingredients by Ramesh Chandan, Egan Press, 1997; a handbook entitled 
Cheese Varieties and Descriptions by USDA Agricultural Research 
Service, 1969; data from the National Agricultural Statistics Service; 
Federal Standards of Identity as designated by the Food and Drug 
Administration, U.S. Department of Health and Human Services (Chapter 
21, Code of Federal Regulations); a U.S. Government Accounting Office 
Study entitled Dairy Products: Imports, Domestic Production, and 
Regulation of Ultra-filtered Milk, March 2001; and a paper by the Food 
and Agricultural Organization of the United Nations entitled The 
Technology of Traditional Milk Products in Developing Countries, FAO 
Animal Production and Health Paper 85, 1990. A detailed table 
reflecting the sources above, Default Import Assessment Rates for the 
National Dairy Promotion and Research Program, is available at https://www.ams.usda.gov/dairyimportassessment.
    The following discussion illustrates the procedure used to 
determine the default assessment rates and the alternative methods used 
to calculate the assessment. Cheddar cheese generally contains no more 
than 66.6 percent milk solids.\3\ By multiplying the milk solids 
assessment rate of $0.01327 by 66.6 percent, a default unit assessment 
rate of $0.009 per kg of product volume (rounded to the nearest tenth 
of 1 cent) is determined and appears in the table listed in Sec.  
1150.152(b)(1). An importer of Cheddar cheese who does not have 
adequate documentation concerning the milk solids content of the cheese 
would pay using this assessment rate. If an importer imports Cheddar 
cheese with a milk solids content of 62.0 percent milk solids, and that 
importer has sufficient documentation as specified in Sec.  1150.172(b) 
stating the milk solids content of the imported cheese, the importer 
would pay an assessment $0.008 per kg of product volume ($0.01327 times 
62.0 percent, rounded to the nearest tenth of one cent).
---------------------------------------------------------------------------

    \3\ According to NASS statistics, the lowest weekly average 
moisture content of barrel Cheddar cheese rounds to 33.4 percent for 
States other than Minnesota and Wisconsin for the week ending March 
10, 2007. The remaining 66.6 percent would have been composed of 
milk solids.
---------------------------------------------------------------------------

    Section 1150.152(b)(4) allows the Dairy Board to make adjustments 
for importers who have underpaid or overpaid assessments. Under this 
Section, if an importer pays an incorrect assessment, the Dairy Board 
would issue a refund to importer. For example, if assessments were paid 
on an imported dairy product not produced from cow's milk (such as 
products made from goat milk or sheep milk), the importer may request a 
refund from the Dairy Board.
    The Dairy Production Stabilization Act of 1983 defines dairy 
products as ``products manufactured for human consumption which are 
derived from the processing of milk, and includes fluid milk 
products.'' The 2002 Farm Bill amended the Act to provide an assessment 
on imported dairy products. An imported dairy product is defined as any 
dairy product imported into the United States, including dairy products 
imported into the United States in the form of: (1) Milk, cream, and 
fresh and dried dairy products; (2) butter and butterfat mixtures; (3) 
cheese; and (4) casein and mixtures. The Act specifies that milk means 
any class of cow's milk.
    This proposed rule designates a comprehensive list of products 
containing milk solids. The list includes:
     Dairy products made from cow's milk included in HTS 
Chapter 4, headings 0401 through 0406.
     Other dairy items whose HTS description specifies that the 
product contains cow's milk, butterfat, and/or milk solids.
     Certain items known to usually contain dairy ingredients.

The following types of dairy-related items are specifically excluded 
from the list:
     Items subject to by HTS General Note 15, which includes 
products imported by or for the account of any U.S. government agency 
and products imported for the personal use of the importer-products 
that will not enter the commerce of the United States.
     Items that categorically do not contain cow's milk. \4\
---------------------------------------------------------------------------

    \4\ There are some HTS codes that clearly distinguish whether or 
not the product contains cow's milk and others that do not. For 
example, HTS 04064020 is for Roquefort cheese in original loaves. 
Roquefort cheese, by definition, is made from sheep's milk. On the 
other hand, HTS 04069099 is designated for cheeses that do not fit 
the description of any other HTS code and either do not contain 
cow's milk solids or are soft ripened cheeses that do contain cow's 
milk solids. While HTS 04064020 is excluded from the comprehensive 
list considered for the Import Assessment Program, HTS 04069099 is 
included in the list.
---------------------------------------------------------------------------

     Items categorically used as animal feed.
     Items which may or may not contain milk solids and 
parameters for milk solids are not stated in the HTS, such as pizza, 
quiche, and pudding.
    The promotion assessment domestically is paid by dairy farmers on 
all milk marketed. Thus, for any product, dairy or otherwise, that is 
produced using domestic milk, the assessment has been paid. The Dairy 
Board does not promote all dairy products. For instance, the Dairy 
Board does not advertise or promote ice cream even though dairy farmers 
pay a 15-cent per hundredweight assessment for milk used in the 
production of ice cream. Other examples would be food preparations, 
infant formula, and milk chocolate, all of which contain dairy 
products. Thus, the import assessment would be collected on all 
specified imported dairy products and imported products containing 
dairy solids, whether or not the Dairy Board chooses to promote such 
product.
    The 2002 Farm Bill requires that importers be represented by at 
least 2 members on the Dairy Board. The Dairy Board, which is comprised 
of 36 members who represent 13 geographic regions, will be expanded 
initially to include 2 importer representatives. The importers, like 
domestic dairy farmers who are appointed to the Dairy Board, shall 
serve for terms of 3 years and will be eligible to serve 2 consecutive 
3-year terms with the exception that the 2 importer members initially 
appointed to the Board shall serve until October 31, 2010, and October 
31, 2011. Importers shall be appointed from nominations submitted by 
importers under such procedures as the Secretary deems necessary.
    The 2002 Farm Bill specifies that the Secretary shall review once 
every three years the average volume of domestic production of dairy 
products compared to the average volume of imports of dairy products 
into the United States during the previous 3 years. On the basis of the 
review, the Secretary shall reapportion the importer representation on 
the Dairy Board to reflect the proportional share of U.S. market by 
domestic production and imported dairy products. In order to provide a 
basis for comparison of domestic production of dairy products to 
imported products, estimated total milk solids would be used. 
Statistics for total milk solids of domestic dairy products are 
published annually by USDA National Agricultural Statistics Service. 
The calculation of total milk solids for imported products for 
reapportionment purposes would be the same as the calculation of total 
milk solids for assessment purposes.
    Like domestic producers, importers would be required to direct 5 
cents per hundredweight of milk, or equivalent thereof, of their 
assessment to the Dairy

[[Page 23365]]

Board. Importers would be permitted to direct the remainder, up to 2.5 
cents per hundredweight of milk, or equivalent thereof, of their 
assessment to a Qualified Dairy Product Promotion, Research, and 
Nutrition Education Program authorized under Federal or State law, 
similar to domestic dairy producers.
    The language in the Order would be modified to make it clear that 
dairy products are to be promoted regardless of national origin. The 
definition of ``milk'' would be changed to include all cow's milk 
instead of only cow's milk produced in the United States. In Sec.  
1150.140 (n) concerning duties of the Board to ``* * * maintain and 
expand domestic and foreign markets and uses for fluid milk and dairy 
products,'' the words ``produced in the United States'' would be been 
stricken. A proposed provision is included in the order to address the 
requirement that none of the assessments collected on imported dairy 
products may be used for foreign market promotion.
    The 2002 Farm Bill mandates that the import assessment be 
implemented in a manner consistent with United States trade 
obligations. USDA has consulted with the United States Trade 
Representative who has determined that this proposed rule is consistent 
with the international trade obligations of the Federal Government.
    Subtitle F of Title 1 of the 2002 Farm Bill at section 1601 and 
Subtitle F of Title 1 of the 2008 Farm Bill at section 1601 provide for 
the implementation timeframe and the promulgation of these regulations 
without regard to the Paperwork Reduction Act (44 U.S.C. Chapter 35), 
the Statement of the Policy of the Secretary of Agriculture, effective 
July 24, 1971 (36 FR 13804, and the notice and comment provisions of 
section 553 of Title 5, United States Code. As indicated previously, 
due to the interest of affected parties, a comment period is provided 
through June 18, 2009.

List of Subjects in 7 CFR Part 1150

    Dairy Products, Milk, Promotion, Research.

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

PART 1150--DAIRY PROMOTION PROGRAM

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

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

    2. Section 1150.106 is revised to read as follows:


Sec.  1150.106  United States.

    United States means all of the States, the District of Columbia, 
and the Commonwealth of Puerto Rico.
    3. Section 1150.109 is revised to read as follows:


Sec.  1150.109  Qualified national, regional, or State program.

    Qualified national, regional, or State program means any national, 
regional, or State dairy product promotion, research or nutrition 
education program which is certified as a qualified program pursuant to 
Sec.  1150.153.
    4. Section 1150.111 is revised to read as follows:


Sec.  1150.111  Milk.

    Milk means any class of cow's milk.
    5. Sections 1150.120 through 1150.122 are added to read as follows:


Sec.  1150.120  Imported Dairy Product.

    Imported Dairy Product means any product that is imported into the 
United States under any of the Harmonized Tariff Schedule (HTS) 
classification numbers listed in Sec.  1150.152(b)(1).


Sec.  1150.121  Importer.

    Importer means a person that imports imported dairy products into 
the United States as a principal or as an agent, broker, or consignee 
of any person who produces or handles dairy products outside of the 
United States for sale in the United States, and who is listed as the 
importer of record for such dairy products.


Sec.  1150.122  CBP.

    CBP means the United States Customs and Border Protection of the 
Department of Homeland Security.
    6. Section 1150.131 is revised to read as follows:


Sec.  1150.131  Establishment and membership.

    (a) There is hereby established a National Dairy Promotion and 
Research Board.
    (b) Thirty-six members of the Board shall be United States 
producers. For purposes of nominating producers to the Board, the 
United States shall be divided into thirteen geographic regions and the 
number of Board members from each region shall be as follows:
    (1) One member from region number one comprised of the following 
States: Alaska, Oregon and Washington.
    (2) Eight members from region number two comprised of the following 
States: California and Hawaii.
    (3) Four members from region number three comprised of the 
following States: Arizona, Colorado, Idaho, Montana, Nevada, Utah and 
Wyoming.
    (4) Four members from region number four comprised of the following 
States: Arkansas, Kansas, New Mexico, Oklahoma and Texas.
    (5) Two members from region number five comprised of the following 
States: Minnesota, North Dakota and South Dakota.
    (6) Five members from region number six comprised of the following 
State: Wisconsin.
    (7) Two members from region number seven comprised of the following 
States: Illinois, Iowa, Missouri and Nebraska.
    (8) One member from region number eight comprised of the following 
States: Alabama, Kentucky, Louisiana, Mississippi and Tennessee.
    (9) Three members from region number nine comprised of the 
following States: Indiana, Michigan, Ohio and West Virginia.
    (10) One member from region number ten comprised of the following 
States: Commonwealth of Puerto Rico, District of Columbia, Florida, 
Georgia, North Carolina, South Carolina, and Virginia.
    (11) Two members from region number eleven comprised of the 
following States: Delaware, Maryland, New Jersey and Pennsylvania.
    (12) Two members from region number twelve comprised of the 
following State: New York.
    (13) One member from region number thirteen comprised of the 
following States: Connecticut, Maine, Massachusetts, New Hampshire, 
Rhode Island and Vermont.
    (c) Two members of the Board shall be importers who are subject to 
assessments under Sec.  1150.152(b).
    (d) The Board shall be composed of milk producers and importers 
appointed by the Secretary either from nominations submitted pursuant 
to Sec.  1150.133 or in accordance with Sec.  1150.136. A milk producer 
may be nominated only to represent the region in which such producer's 
milk is produced.
    (e) At least every five years, and not more than every three years, 
the Board shall review the geographic distribution of milk production 
volume throughout the United States and, if warranted, shall recommend 
to the Secretary a reapportionment of regions and/or a modification of 
the number of producer members from regions in order to best reflect 
the geographic distribution of milk production volume in the United 
States.
    (f) At least once every three years, after the initial appointment 
of importer representatives on the Board, the Secretary shall review 
the average volume of domestic production of dairy products compared to 
the average

[[Page 23366]]

volume of imports of dairy products into the United States during the 
previous 3 years and, on the basis of that review, if warranted, 
reapportion the importer representation on the Board to reflect the 
proportional shares of the United States market served by domestic 
production and imported dairy products. The basis for comparison of 
domestic production of dairy products to imported products shall be 
estimated total milk solids. The calculation of total milk solids of 
imported dairy products for reapportionment purposes shall be the same 
as the calculation of total milk solids of imported dairy products for 
assessment purposes.
    (g) In determining the volume of milk produced and total milk 
solids of dairy products produced in the United States, the Board and 
Secretary shall utilize the information received by the Board pursuant 
to Sec.  1150.171(a) and data published by the Department.
    7. In Sec.  1150.132, paragraph (a) is revised to read as follows:


Sec.  1150.132  Term of Office.

    (a) The members of the Board shall serve for terms of three years, 
except that:
    (1) the members appointed to the initial Board shall serve 
proportionately, for terms of one, two and three years.
    (2) the 2 importer members initially appointed to the Board shall 
serve until October 31, 2010, and October 31, 2011.
* * * * *
    8. In Sec.  1150.133, paragraphs (a), (c), and (d) are revised, and 
a new paragraph (e) is added to read as follows:


Sec.  1150.133  Nominations.

* * * * *
    (a) The Secretary shall solicit nominations for producer 
representation on the Board from all eligible organizations. For 
nominations of producers, if the Secretary determines that a 
substantial number of producers are not members of, or their interests 
are not represented by, such eligible organizations, the Secretary 
shall also solicit nominations from such producers through general 
farmer organizations or by other means.
* * * * *
    (c) An eligible producer organization may submit nominations only 
for positions on the Board that represent regions in which such 
eligible organization can establish that it represents a substantial 
number of producers. If there is more than one Board position for any 
such region, the organization may submit nominations for each position.
    (d) Where there is more than one eligible organization representing 
producers in a specific geographic region, the organizations may caucus 
and jointly nominate producers for each position representing that 
region on the Board for which a member is to be appointed. If joint 
agreement is not reached with respect to any such nominations, or if no 
caucus is held, each eligible organization may submit to the Secretary 
nominations for each appointment to be made to represent that region.
    (e) Nominations for representation of importers may be submitted 
by:
    (1) Organizations that represent importers of dairy products, as 
approved by the Secretary. The primary considerations in determining if 
organizations adequately represent importers of dairy products shall be 
whether its membership consists primarily of importers of dairy 
products and whether a substantial interest of the organization is in 
the importation of fluid milk or dairy products and the promotion of 
the nutritional attributes of fluid milk or dairy products; and
    (2) Individual importers of dairy products. Individual importers 
submitting nominations to represent importers on the Board must 
establish to the satisfaction of the Secretary that the persons 
submitting the nominations are importers of dairy products.
    9. In Sec.  1150.134, the introductory text and paragraph (b) are 
revised to read as follows:


Sec.  1150.134  Nominee's agreement to serve.

    Any producer or importer nominated to serve on the Board shall file 
with the Secretary at the time of the nomination a written agreement 
to:
* * * * *
    (b) Disclose any relationship with any organization that operates a 
qualified national, regional, or State program or has a contractual 
relationship with the Board; and
* * * * *
    10. Section 1150.135 is revised to read as follows:


Sec.  1150.135  Appointments.

    From the nominations made pursuant to Sec.  1150.133, the Secretary 
shall appoint the members of the Board on the bases of representation 
provided for in Sec. Sec.  1150.131(b) and 1150.131(c).
    11. In Sec.  1150.139, paragraph (e) is revised to read as follows:


Sec.  1150.139  Powers of the Board.

* * * * *
    (e) To disseminate information to producers, producer 
organizations, importers, and importer organizations through programs 
or by direct contact utilizing the public postage system or other 
systems;
* * * * *
    12. In Sec.  1150.140, paragraphs (b) and (n) are revised to read 
as follows:


Sec.  1150.140  Duties of the Board.

* * * * *

    (b) To appoint from its members an executive committee whose 
membership shall equally reflect each of the different geographic 
regions in the United States in which milk is produced and importer 
representation on the Board, and to delegate to the committee authority 
to administer the terms and provisions of this subpart under the 
direction of the Board and within the policies determined by the Board;
* * * * *
    (n) To encourage the coordination of programs of promotion, 
research and nutrition education designed to strengthen the dairy 
industry's position in the marketplace and to maintain and expand 
domestic and foreign markets and uses for fluid milk and dairy 
products.
    13. In Sec.  1150.151, new paragraph (c) is added to read as 
follows:


Sec.  1150.151  Expenses.

* * * * *
    (c) The Board is authorized to expend up to the amount of the 
assessments collected from United States producers to promote dairy 
products produced in the United States in foreign markets.
    14. Section 1150.152 is revised to read as follows:


Sec.  1150.152  Assessments.

    (a) Domestic Assessments.
    (1) Each person making payment to a producer for milk produced in 
the United States and marketed for commercial use shall collect an 
assessment on all such milk handled for the account of the producer at 
the rate of 15 cents per hundredweight of milk for commercial use, or 
the equivalent thereof, and shall remit the assessment to the Board.
    (2) Any producer marketing milk of that producer's own production 
in the form of milk or dairy products to consumers, either directly or 
through retail or wholesale outlets, shall remit to the Board an 
assessment on such milk at the rate of 15 cents per hundredweight of 
milk for commercial use or the equivalent thereof.
    (3) In determining the assessment due from each producer pursuant 
to Sec.  1150.152(a)(1) and (a)(2), a producer who is participating in 
a qualified national, regional, or State program(s)

[[Page 23367]]

shall receive a credit for contributions to such program(s), but not to 
exceed 10 cents per hundredweight of milk marketed.
    (4) In order for a producer described in Sec.  1150.152(a)(1) to 
receive the credit authorized in Sec.  1150.152(a)(3), either the 
producer or a cooperative association on behalf of the producer must 
establish to the person responsible for remitting the assessment to the 
Board that the producer is contributing to a qualified national, 
regional, or State program. Producers who contribute to a qualified 
program directly (other than through a payroll deduction) must 
establish with the person responsible for remitting the assessment to 
the Board, with validation by the qualified program, that they are 
making such contributions.
    (5) In order for a producer described in Sec.  1150.152(a)(2) to 
receive the credit authorized in Sec.  1150.152(a)(3), the producer and 
the applicable qualified national, regional, or State program must 
establish to the Board that the producer is contributing to a qualified 
national, regional, or State program.
    (6) The collection of assessments pursuant to Sec.  1150.152(a)(1) 
and (a)(2) shall begin with respect to milk marketed on and after the 
effective date of this section and shall continue until terminated by 
the Secretary. If the Board is not constituted by the date the first 
assessments are to be collected, the Secretary shall have the authority 
to receive the assessments on behalf of the Board. The Secretary shall 
remit such assessments to the Board when it is constituted.
    (7) Each person responsible for the remittance of the assessment 
pursuant to Sec.  1150.152(a)(1) and (a)(2) shall remit the assessment 
to the Board not later than the last day of the month following the 
month in which the milk was marketed.
    (8) Money remitted to the Board shall be in the form of a 
negotiable instrument made payable to ``National Dairy Promotion and 
Research Board.'' Remittances and reports specified in Sec.  
1150.171(a) shall be mailed to the location designated by the Secretary 
or the Board.
    (b) Importer Assessments.
    (1) Each importer of dairy products identified in the following 
table, except for as provided for in Sec.  1150.157, is responsible for 
paying 7.5 cents per hundredweight of U.S. milk, or equivalent thereof, 
as determined in (i) or (ii) below.
    (i) If the importer has sufficient documentation, as stated in 
Sec.  1150.172(b), to determine the milk solids content of the imported 
dairy product, the importer shall use the assessment rate of $0.01327 
per kilogram (kg) of milk solids to calculate and pay the assessment. 
Milk solids of U.S. origin shall not be included in the calculation.
    (ii) If the importer does not have sufficient documentation, as 
stated in Sec.  1150.172(b), to determine the milk solids content of 
the imported dairy product, the importer shall pay a rate per kg of 
product volume as listed in the following table.

              Imported Dairy Products Subject to Assessment
------------------------------------------------------------------------
                                                           Default rate
                                                            per unit of
              HTS No.                  Unit of measure     product  (in
                                                             dollars)
------------------------------------------------------------------------
0401.10.0000.......................  liter..............           0.001
0401.20.2000.......................  liter..............           0.002
0401.20.4000.......................  liter..............           0.002
0401.30.0500.......................  liter..............           0.007
0401.30.2500.......................  liter..............           0.007
0401.30.5000.......................  liter..............           0.009
0401.30.7500.......................  liter..............           0.009
0402.10.1000.......................  kg.................           0.013
0402.10.5000.......................  kg.................           0.013
0402.21.0500.......................  kg.................           0.013
0402.21.2500.......................  kg.................           0.013
0402.21.3000.......................  kg.................           0.013
0402.21.5000.......................  kg.................           0.013
0402.21.7500.......................  kg.................           0.013
0402.21.9000.......................  kg.................           0.013
0402.29.1000.......................  kg.................           0.012
0402.29.5000.......................  kg.................           0.012
0402.91.1000.......................  kg.................           0.005
0402.91.3000.......................  kg.................           0.005
0402.91.7000.......................  kg.................           0.005
0402.91.9000.......................  kg.................           0.005
0402.99.1000.......................  kg.................           0.004
0402.99.3000.......................  kg.................           0.004
0402.99.4500.......................  kg.................           0.004
0402.99.5500.......................  kg.................           0.004
0402.99.7000.......................  kg.................           0.009
0402.99.9000.......................  kg.................           0.009
0403.10.1000.......................  kg.................           0.013
0403.10.5000.......................  kg.................           0.013
0403.10.9000.......................  kg.................           0.002
0403.90.0400.......................  liter..............           0.004
0403.90.1600.......................  liter..............           0.004
0403.90.2000.......................  liter..............           0.006
0403.90.4110........