Milk in the Appalachian, Southeast, and Florida Areas; Notice of Hearing on Proposed Amendments to Marketing Agreements and Orders, 5800-5810 [2023-01459]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 88, Number 19 (Monday, January 30, 2023)]
[Proposed Rules]
[Pages 5800-5810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01459]


========================================================================
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.

========================================================================


Federal Register / Vol. 88, No. 19 / Monday, January 30, 2023 / 
Proposed Rules

[[Page 5800]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1005, 1006, and 1007

[Docket No. 23-J-0019; AMS-DA-23-0003]


Milk in the Appalachian, Southeast, and Florida Areas; Notice of 
Hearing on Proposed Amendments to Marketing Agreements and Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice of public hearing on proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: A public hearing is being held to consider and take evidence 
on proposals to amend the inter-market transportation credits in the 
Appalachian and Southeast Federal milk marketing orders (FMMOs) and 
adopt distributing plant delivery credits (intra-market transportation 
credits) in the Appalachian, Southeast, and Florida FMMOs.

DATES: The hearing will convene at 9 a.m. on Tuesday, February 28, 
2023.

ADDRESSES: The hearing will be held at the Franklin Marriott Cool 
Springs Hotel, 700 Cool Springs Blvd., Franklin, Tennessee 37067. 
Telephone (615) 261-6100.
    Copies of this notice of hearing and the respective orders may be 
procured from the Market Administrator of the Appalachian, Florida, and 
Southeast marketing areas, or from the Hearing Clerk, United States 
Department of Agriculture, STOP 9200--Room 1031, 1400 Independence 
Avenue SW, Washington, DC 20250-9200.
    Copies of the transcript will be made available online at: https://www.ams.usda.gov/rules-regulations/moa/dairy.

FOR FURTHER INFORMATION CONTACT: Erin Taylor, Director, Order 
Formulation and Enforcement Division, USDA/AMS/Dairy Programs, Stop 
0225--Room 2530, 1400 Independence Avenue SW, Washington, DC 20250-
0225, (202) 720-7311, email: [email protected].
    Persons requiring a sign language interpreter or other special 
accommodations should contact Jason Nierman, Market Administrator, a 
minimum of three days before the start of the hearing at (502) 499-0040 
ext. 2222, or email: [email protected].

SUPPLEMENTARY INFORMATION: This administrative action is governed by 
the provisions of 5 U.S.C. 556 and 557 and, therefore, is excluded from 
the requirements of Executive Order 12866.
    Notice is hereby given of a public hearing to be held at the 
Franklin Marriott Cool Springs Hotel, Franklin, Tennessee, beginning at 
9 a.m. on Tuesday, February 28, 2023, with respect to proposed 
amendments to the orders regulating the handling of milk in the 
Appalachian, Southeast and Florida marketing areas.
    The hearing is called pursuant to the provisions of the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674) (Act), and the applicable rules of practice and procedure 
governing amendments to marketing agreements and marketing orders (7 
CFR part 900).
    The purpose of the hearing is to receive evidence with respect to 
the economic and marketing conditions which relate to the proposed 
amendments, hereinafter set forth, and any appropriate modifications 
thereof, to the marketing orders.
    Evidence also will be taken to determine whether emergency 
marketing conditions exist that would warrant omission of a recommended 
decision under the rules of practice and procedure (7 CFR 900.12(d)) 
with respect to any proposed amendments.
    Actions under the FMMO program are subject to the Regulatory 
Flexibility Act (5 U.S.C. 601-612) (RFA). The RFA seeks to ensure that, 
within the statutory authority of a program, the regulatory and 
information collection requirements are tailored to the size and nature 
of small businesses. For the purpose of the RFA, a dairy farm is a 
``small business'' if it has an annual gross revenue of $3.75 million 
\1\ or less, and a dairy products manufacturer is a ``small business'' 
if it has no more than the number of employees listed in the chart 
below (13 CFR 121.201):
---------------------------------------------------------------------------

    \1\ The Small Business Administration has issued a final rule, 
effective December 19, 2022, increasing the size of a small business 
dairy farm to an annual gross revenue of less than $3.75 million. 
See: https://www.federalregister.gov/documents/2022/11/17/2022-24595/small-business-size-standards-adjustment-of-monetary-based-size-standards-disadvantage-thresholds.

------------------------------------------------------------------------
                                                       Size standards in
          NAICS code             NAICS U.S. industry       number of
                                        title              employees
------------------------------------------------------------------------
311511........................  Fluid Milk                         1,000
                                 Manufacturing.
311512........................  Creamery Butter                      750
                                 Manufacturing.
311513........................  Cheese Manufacturing.              1,250
311514........................  Dry, Condensed, and                  750
                                 Evaporated Dairy
                                 Product
                                 Manufacturing.
------------------------------------------------------------------------

    Most parties subject to a FMMO are considered a small business. 
Accordingly, interested parties are invited to present evidence on the 
probable regulatory and informational impact of the hearing proposals 
on small businesses. Also, parties may suggest modifications of these 
proposals for the purpose of tailoring their applicability to small 
businesses.
    The amendments to the rules proposed herein have been reviewed 
under Executive Order 12988, Civil Justice Reform. They are not 
intended to have a retroactive effect.
    AMS is committed to complying with the E-Government Act to promote 
the use of the internet and other information technologies, to provide 
increased opportunities for citizen

[[Page 5801]]

access to Government information and services, and for other purposes.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under sec. 8c(15)(A) of the Act, 
any handler subject to an order may request modification or exemption 
from such order by filing with the U.S. Department of Agriculture 
(USDA) a petition stating that the order, any provision of the order, 
or any obligation imposed in connection with the order is not in 
accordance with the law. A handler is afforded the opportunity for a 
hearing on the petition. After a hearing, the USDA would rule on the 
petition. The Act provides that the United States District Court in any 
district in which the handler is an inhabitant or has its principal 
place of business, has jurisdiction to review USDA's ruling on the 
petition, provided an appeal is filed not later than 20 days after the 
ruling is issued.
    Interested parties who wish to introduce exhibits at the hearing 
should provide the Administrative Law Judge with (4) copies of such 
exhibits for the Official Record. Additional copies should be made 
available for use by other hearing participants. Any party that has 
submitted a proposal noticed herein, when participating as a witness, 
is required to make their testimony--if prepared as an exhibit--and any 
other exhibits, available to USDA officials prior to the start of the 
hearing on the day of their appearance. Individual dairy farmers are 
not subject to this requirement.
    The hearing will continue until such time as determined to have 
ended by the presiding Administrative Law Judge. If necessary, the 
schedule for the next session will be announced at the time of 
adjournment. Such reconvening date and time will also be posted on the 
AMS-Dairy Programs website at: https://www.ams.usda.gov/rulesregulations/moa/dairy.
    Testimony is invited on the following proposals or appropriate 
modifications to such proposals.

Proposal 1 (Sec. Sec.  1005.81 Through 1005.83, Excluding Sec.  
1005.82(c)): Submitted by the Dairy Cooperative Marketing Association

    This proposal seeks to update the transportation credit provisions 
in the Appalachian milk marketing order. Specifically, the proposal 
recommends increasing the maximum assessment rate on Class I milk, 
updating the components of the mileage rate calculation with current 
costs, revising the months of mandatory and discretionary payment, and 
revising the non-reimbursed mileage factor. These proposed changes 
would be mirrored in the Southeast milk marketing order (see Proposal 
2).

Proposal 2 (Sec. Sec.  1007.81 Through 1007.83, Excluding Sec.  
1005.82(c)): Submitted by the Dairy Cooperative Marketing Association

    This proposal seeks to update the transportation credit provisions 
in the Southeast milk marketing order. Specifically, the proposal 
recommends increasing the maximum assessment rate on Class I milk, 
updating the components of the mileage rate calculation with current 
costs, revising the months of mandatory and discretionary payment, and 
revising the non-reimbursed mileage factor. These proposed changes 
would be mirrored in the Appalachian milk marketing order (see Proposal 
1).

Proposal 3 (Sec. Sec.  1005.30, 1005.32, and 1005.84): Submitted by the 
Dairy Cooperative Marketing Association

    This proposal seeks to establish distributing plant delivery 
credits (intra-market transportation credits) in the Appalachian milk 
marketing order. Specifically, the proposal recommends establishing a 
Distributing Plant Delivery Credit Fund (DPDCF) and payment program, 
setting an initial and a maximum assessment rate for the DPDCF, 
granting the Market Administrator authority to adjust the assessment 
rate, establishing geographical eligibility criteria, establishing a 
reimbursement rate, establishing a range for the reimbursed portion of 
the farm to plant mileage, setting an initial reimbursed mileage 
percentage, and establishing monitoring requirements for the Market 
Administrator. These proposed changes would be mirrored in the Florida 
and Southeast milk marketing orders (see Proposals 4 and 5).

Proposal 4 (Sec. Sec.  1006.30, 1006.32, and 1006.84): Submitted by the 
Dairy Cooperative Marketing Association

    This proposal seeks to establish distributing plant delivery 
credits (intra-market transportation credits) in the Florida milk 
marketing order. Specifically, the proposal recommends establishing a 
Distributing Plant Delivery Credit Fund and payment program, setting an 
initial and a maximum assessment rate for the DPDCF, granting the 
Market Administrator authority to adjust the assessment rate, 
establishing geographical eligibility criteria, establishing a 
reimbursement rate, establishing a range for the reimbursed portion of 
the farm to plant mileage, setting an initial reimbursed mileage 
percentage, and establishing monitoring requirements for the Market 
Administrator. These proposed changes would be mirrored in the 
Appalachian and Southeast Milk marketing orders (see Proposals 3 and 
5).

Proposal 5 (Sec. Sec.  1007.30, 1007.32, and 1007.84): Submitted by the 
Dairy Marketing Cooperative Association

    This proposal seeks to establish distributing plant delivery 
credits (intra-market transportation credits) in the Southeast milk 
marketing order. Specifically, the proposal recommends establishing a 
Distributing Plant Delivery Credit Fund and payment program, setting an 
initial and a maximum assessment rate for the DPDCF, granting the 
Market Administrator authority to adjust the assessment rate, 
establishing geographical eligibility criteria, establishing a 
reimbursement rate, establishing a range for the reimbursed portion of 
the farm to plant mileage, setting an initial reimbursed mileage 
percentage, and establishing monitoring requirements for the Market 
Administrator. These proposed changes would be mirrored in the 
Appalachian and Florida milk marketing orders (see Proposals 3 and 4).

Proposal 6 (Sec. Sec.  1005.xx Through 1005.xx): Submitted by Prairie 
Farms Dairy, Inc.

    This proposal seeks to establish an Assembly Performance Credit in 
the Appalachian milk marketing order. Specifically, the proposal 
recommends establishing an Assembly Performance Credit Fund (APCF) to 
provide assistance for the assembly, dispatch, and delivery of producer 
milk to fluid plants. The Assembly Performance Credit would be 
uniformly shared with all producer milk delivered to a pool 
distributing plant regulated by the Order. Distributing plants would 
contribute to the APCF based on Class I volume. Payment from the fund 
would be per hundredweight and would be the same for every pound of 
milk that delivered to the fluid plant. Similar credits are proposed to 
be adopted in the Florida and Southeast Milk marketing orders (see 
Proposals 7 and 8).

Proposal 7 (Sec. Sec.  1006.xx Through 1006.xx): Submitted by Prairie 
Farms Dairy, Inc.

    This proposal seeks to establish an Assembly Performance Credit in 
the Florida milk marketing order. Specifically, the proposal 
recommends:

[[Page 5802]]

establishing an Assembly Performance Credit Fund (APCF) to provide 
assistance for the assembly, dispatch, and delivery of producer milk to 
fluid plants. The Assembly Performance Credit would be uniformly shared 
with all producer milk delivered to a pool distributing plant regulated 
by the Order. Distributing plants would contribute to the APCF based on 
Class I volume. Payment from the fund would be per hundredweight and 
would be the same for every pound of milk that delivered to the fluid 
plant. Similar credits are proposed to be adopted in the Appalachian 
and Southeast milk marketing orders (see Proposals 6 and 8).

Proposal 8 (Sec. Sec.  1007.xx Through 1007.xx): Submitted by Prairie 
Farms Dairy, Inc.

    This proposal seeks to establish an Assembly Performance Credit in 
the Southeast milk marketing order. Specifically, the proposal 
recommends establishing an Assembly Performance Credit Fund (APCF) to 
provide assistance for the assembly, dispatch, and delivery of producer 
milk to fluid plants. The Assembly Performance Credit would be 
uniformly shared with all producer milk delivered to a pool 
distributing plant regulated by the Order. Distributing plants would 
contribute to the APCF based on Class I volume. Payment from the fund 
would be per hundredweight and would be the same for every pound of 
milk that delivered to the fluid plant. Similar credits are proposed in 
the Appalachian and Florida milk marketing orders (see Proposals 6 and 
7).

Proposal 9 (Sec.  1005.82(c)(2)): Submitted by Prairie Farms Dairy, 
Inc.

    This proposal seeks to amend the transportation credit provisions 
of the Appalachian milk marketing order. Specifically, the proposal 
recommends expanding geographic eligibility for transportation credits 
to milk produced inside the marketing area and expanding eligibility 
for transportation credits to a producer located outside the marketing 
area if more than 50 percent (50%) of their milk from March to May is 
delivered to a pool distributing plant within the Order, or if more 
than 45 days of that producer's milk is delivered to a pool 
distributing plant within the Order. These proposed changes would be 
mirrored in the Southeast milk marketing order (see Proposal 10).

Proposal 10 (Sec.  1007.82(c)(2)): Submitted by Prairie Farms Dairy, 
Inc.

    This proposal seeks to amend the transportation credit provisions 
of the Southeast milk marketing order. Specifically, the proposal 
recommends: expanding geographic eligibility for transportation credits 
to inside the marketing area and expanding eligibility for 
transportation credits to a producer located outside the marketing area 
if more than 50% of their milk from March to May is delivered to a pool 
distributing plant within the Order, or if more than 45 days of that 
producer's milk is delivered to a pool distributing plant within the 
Order. These proposed changes would be mirrored in the Appalachian milk 
marketing order (see Proposal 9).

Proposal 11: Submitted by Michael P. Sumners, Dairy Farmer

    This proposal seeks to prohibit the diversion of milk to nonpool 
plants from milk delivered to a pool distributing plant and receiving 
any form of transportation credits. The prohibition would apply in the 
Appalachian, Florida, and Southeast milk marketing orders.

Proposal 12: Submitted by Dairy Programs, Agricultural Marketing 
Service

    Make such changes as may be necessary to make the respective 
marketing orders conform with any amendments thereto that may result 
from this hearing.
    As referenced in each of the above proposals, the regulatory text 
pertaining to each proposal is provided sequentially by marketing order 
in the section below and will be addressed individually by proposal at 
the hearing.
    Copies of this notice of hearing and the respective orders may be 
procured from the Market Administrator of the Appalachian, Florida, and 
Southeast marketing areas, or from the Hearing Clerk, United States 
Department of Agriculture, STOP 9200--Room 1031, 1400 Independence 
Avenue SW, Washington, DC 20250-9200.
    Copies of the transcript of testimony taken at the hearing will not 
be available for distribution through the Hearing Clerk's Office. If 
you wish to purchase a copy, arrangements may be made with the reporter 
at the hearing. Copies of the transcript will also be made available 
online at: https://www.ams.usda.gov/rules-regulations/moa/dairy.
    From the time that a hearing notice is issued and until the 
issuance of a final decision in a proceeding, USDA employees involved 
in the decision-making process are prohibited from discussing the 
merits of the hearing issues on an ex parte basis with any person 
having an interest in the proceeding. For this particular proceeding, 
the prohibition applies to employees in the following organizational 
units:

Office of the Secretary of Agriculture
Office of the Administrator, Agricultural Marketing Service
Office of the General Counsel
Dairy Program, Agricultural Marketing Service (Washington, DC, 
Office and the Offices of all Market Administrators)

    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.

List of Subjects in 7 CFR Parts 1005, 1006, and 1007

    Milk marketing orders.

    The proposed amendments to 7 CFR parts 1005, 1006, and 1007, as set 
forth below, have not received the approval of the USDA.

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

0
1. The authority citation for part 1005 continues to read as follows:

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

0
2. Amend Sec.  1005.30 by:
0
a. Redesignating paragraphs (a)(5) through (9) as paragraphs (a)(7) 
through (11);
0
b. Adding new paragraphs (a)(5) and (6);
0
c. Redesignating paragraph (c)(3) as (c)(4) and revising it; and
0
d. Adding new paragraph (c)(3).
    The additions and revision read as follows:


Sec.  1005.30  Reports of receipts and utilization.

    (a) * * *
    (5) Receipts of producer milk described in Sec.  1005.84(e), 
including the identity of the individual producers whose milk is 
eligible for the distributing plant delivery credit pursuant to that 
paragraph and the date that such milk was received;
    (6) For handlers submitting distributing plant delivery credit 
requests, transfers of bulk unconcentrated milk to nonpool plants, 
including the dates that such milk was transferred;
* * * * *
    (c) * * *
    (3) With respect to milk for which a cooperative association is 
requesting a distributing plant delivery credit pursuant to Sec.  
1005.84, all of the information required in paragraphs (a)(5) and (6) 
of this section.
    (4) With respect to milk for which a cooperative association is 
requesting a transportation credit pursuant to Sec.  1005.82, all of 
the information

[[Page 5803]]

required in paragraphs (a)(7) through (9) of this section.
* * * * *
0
3. Revise Sec.  1005.32 (a) to read as follows:


Sec.  1005.32   Other reports.

    (a) On or before the 20th day after the end of each month, each 
handler described in Sec.  1000.9(a) and (c) of this chapter shall 
report to the market administrator any adjustments to distributing 
plant delivery credit requests as reported pursuant to Sec.  
1005.30(a)(5) and (6), and any adjustments to transportation credit 
requests as reported pursuant to Sec.  1005.30(a)(7), (8), and (9).
* * * * *
0
4. Amend Sec.  1005.81 by revising the first sentence of paragraph (a) 
to read as follows:


Sec.  1005.81  Payments to the transportation credit balancing fund.

    (a) On or before the 12th day after the end of the month (except as 
provided in Sec.  1000.90 of this chapter), each handler operating a 
pool plant and each handler specified in Sec.  1000.9(c) of this 
chapter shall pay to the market administrator a transportation credit 
balancing fund assessment determined by multiplying the pounds of Class 
I producer milk assigned pursuant to Sec.  1005.44 by $0.30 per 
hundredweight or such lesser amount as the market administrator deems 
necessary to maintain a balance in the fund equal to the total 
transportation credits disbursed during the prior June-February period. 
* * *
* * * * *
0
5. Amend Sec.  1005.82 by:
0
a. Revising the first sentence of paragraph (a)(1), the first sentence 
of paragraph (b), and paragraphs (c)(2) and (d)(3)(iii); and
0
b. Adding paragraph (d)(3)(viii).
    The revisions and addition read as follows:


Sec.  1005.82  Payments from the transportation credit balancing fund.

    (a) * * *
    (1) On or before the 13th day (except as provided in Sec.  1000.90 
of this chapter) after the end of each of the months of January, and 
July through December and any other month in which transportation 
credits are in effect pursuant to paragraph (b) of this section, the 
market administrator shall pay to each handler that received, and 
reported pursuant to Sec.  1005.30(a)(5), bulk milk transferred from a 
plant fully regulated under another Federal order as described in 
paragraph (c)(1) of this section or that received, and reported 
pursuant to Sec.  1005.30(a)(6), milk directly from producers' farms as 
specified in paragraph (c)(2) of this section, a preliminary amount 
determined pursuant to paragraph (d) of this section to the extent that 
funds are available in the transportation credit balancing fund. * * *
    (b) The market administrator may extend the period during which 
transportation credits are in effect (i.e., the transportation credit 
period) to the month of February or June if a written request to do so 
is received fifteen (15) days prior to the beginning of the month for 
which the request is made and, after conducting an independent 
investigation, finds that such extension is necessary to assure the 
market of an adequate supply of milk for fluid use. * * *
    (c) * * *
    (2) Bulk milk received directly from the farms of dairy farmers at 
pool distributing plants.
    (d) * * *
    (3) * * *
    (iii) Subtract 15 percent (15%) of the miles from the mileage so 
determined;
* * * * *
    (viii) The market administrator may revise the factor described in 
paragraph (d)(3)(iii) of this section (the mileage adjustment factor) 
if a written request to do so is received fifteen (15) days prior to 
the beginning of the month for which the request is made and, after 
conducting an independent investigation, finds that such revision is 
necessary to assure orderly marketing, efficient handling of milk in 
the marketing area, and an adequate supply of milk for fluid use. The 
market administrator may increase the mileage adjustment factor by as 
much as ten percent (10%) up to twenty-five percent (25%) or decrease 
it by as much as ten percent (10%), to a minimum of five percent (5%). 
Before making such a finding, the market administrator shall notify the 
Deputy Administrator of Dairy Programs and all handlers in the market 
that a revision is being considered and invite written data, views, and 
arguments. Any decision to revise the mileage rate factor must be 
issued in writing prior to the first day of the month for which the 
revision is to be effective.
0
6. Amend Sec.  1005.83 by revising paragraphs (a)(2) through (5) to 
read as follows:


Sec.  1005.83  Mileage rate for the transportation credit balancing 
fund.

    (a) * * *
    (2) From the result in paragraph (a)(1) of this section subtract 
$2.26 per gallon;
    (3) Divide the result in paragraph (a)(2) of this section by 6.2, 
and round down to three decimal places to compute the fuel cost 
adjustment factor;
    (4) Add the result in paragraph (a)(3) of this section to $3.67;
    (5) Divide the result in paragraph (a)(4) of this section by 497;
* * * * *
0
7. Add Sec.  1005.84 to read as follows:


Sec.  1005.84   Distributing plant delivery credits.

    (a) The Distributing Plant Delivery Credit Fund. The market 
administrator shall maintain a separate fund known as the Distributing 
Plant Delivery Credit Fund into which shall be deposited the payments 
made by handlers pursuant to Sec.  1005.84(b) and out of which shall be 
made the payments due handlers pursuant to Sec.  1005.84(d). Payments 
due a handler shall be offset against payments due from the handler.
    (b) Payments to the distributing plant delivery credit fund. On or 
before the 12th day after the end of the month (except as provided in 
Sec.  1000.90 of this chapter), each handler operating a pool plant and 
each handler specified in Sec.  1000.9(c) of this chapter shall pay to 
the market administrator a distributing plant delivery credit fund 
assessment determined by multiplying the pounds of Class I producer 
milk assigned pursuant to Sec.  1005.84 by a per hundredweight 
assessment rate of $0.55 and thereafter not greater than $0.60 as the 
market administrator deems necessary to maintain a balance in the fund 
equal to the total distributing plant delivery credit disbursed during 
the prior calendar year. If the distributing plant delivery credit fund 
is in an overfunded position, the market administrator may completely 
waive the distributing plant delivery credit assessment for one or more 
months. In determining the distributing plant delivery credit 
assessment rate, in the event that during any month of that previous 
calendar year the fund balance was insufficient to cover the amount of 
credits that were due, the assessment should be based upon the amount 
of credits that would have been disbursed had the fund balance been 
sufficient.
    (c) The market administrator shall announce publicly on or before 
the 23rd day of the month (except as provided in Sec.  1000.90 of this 
chapter), the assessment rate per hundredweight pursuant to paragraph 
(b) of this section for the following month.
    (d) Payments from the distributing plant delivery credit fund. 
Payments from the distributing plant delivery credit fund to handlers 
and cooperative associations requesting distributing plant delivery 
credits shall be made as follows:

[[Page 5804]]

    (1) On or before the 13th day (except as provided in Sec.  1000.90 
of this chapter) after the end of each month, the market administrator 
shall pay to each handler that received, and reported pursuant to Sec.  
1005.30(a)(5), bulk unconcentrated milk directly from producers' farms, 
or receipts of bulk unconcentrated milk by transfer from a pool supply 
plant, a preliminary amount determined pursuant to paragraph (f) of 
this section to the extent that funds are available in the distributing 
plant delivery credit fund. If an insufficient balance exists to pay 
all of the credits computed pursuant to this section, the market 
administrator shall distribute the balance available in the 
distributing plant delivery credit fund by reducing payments pro rata 
using the percentage derived by dividing the balance in the fund by the 
total credits that are due for the month. The amount of credits 
resulting from this initial proration shall be subject to audit 
adjustment pursuant to paragraph (d)(3) of this section.
    (2) The market administrator shall accept adjusted requests for 
distributing plant delivery credits on or before the 20th day of the 
month following the month for which such credits were requested 
pursuant to Sec.  1005.32(a). After such date, a preliminary audit will 
be conducted by the market administrator, who will recalculate any 
necessary proration of distributing plant delivery credit payments for 
the preceding month pursuant to the process provided in paragraph 
(d)(1) of this section. Handlers will be promptly notified of an 
overpayment of credits based upon this final computation and remedial 
payments to or from the distributing plant delivery credit fund will be 
made on or before the next payment date for the following month.
    (3) Distributing plant delivery credits paid pursuant to paragraphs 
(d)(1) and (2) of this section shall be subject to final verification 
by the market administrator pursuant to Sec.  1000.77 of this chapter. 
Adjusted payments to or from the distributing plant delivery credit 
fund will remain subject to the final proration established pursuant to 
paragraph (d)(2) of this section.
    (4) In the event that a qualified cooperative association is the 
responsible party for whose account such milk is received and written 
documentation of this fact is provided to the market administrator 
pursuant to Sec.  1005.30(c)(3) prior to the date payment is due, the 
distributing plant delivery credits for such milk computed pursuant to 
this section shall be made to such cooperative association rather than 
to the operator of the pool plant at which the milk was received.
    (5) The Market Administrator shall provide monthly, to producers 
who are not members of a qualified cooperative association, a statement 
of the amount per hundredweight of distributing plant delivery credit 
which the distributing plant handler receiving their milk is entitled 
to claim.
    (e) Distributing plant delivery credits shall apply to the 
following milk:
    (1) Bulk unconcentrated fluid milk received at a pool distributing 
plant as producer milk directly from dairy farms located within the 
marketing areas of Federal Orders 5 and 7; in the following counties in 
the Commonwealth of Virginia: Albemarle, Amelia, Appomattox, Charlotte, 
Clarke, Culpeper, Cumberland, Fauquier, Frederick, Goochland, Greene, 
Hanover, James City, King and Queen, King William, Madison, Nottoway, 
Orange, Page, Prince Edward, and Shenandoah; and in the counties of 
Berkeley and Monroe in the state of West Virginia. The Market 
Administrator may add Virginia and West Virginia counties (not in a 
federal order marketing area) to this list upon the request of a pool 
handler and provision of proof satisfactory that the county is a source 
of regular supply of milk to order distributing plants. The quantity of 
milk described herein shall be reduced by the quantity of any bulk 
unconcentrated fluid milk products transferred from a pool distributing 
plant to a nonpool plant or transferred to a pool supply plant on the 
same calendar day as producer milk was received at such plant for which 
a distributing plant delivery credit is requested.
    (2) Bulk unconcentrated fluid milk transferred from a pool plant 
regulated pursuant to Sec.  1005.7(c) or (d) to a pool distributing 
plant regulated pursuant to Sec.  1005.7(a) or (b). The quantity of 
milk described herein shall be reduced by the quantity of any bulk 
unconcentrated fluid milk products transferred from a pool distributing 
plant to a nonpool plant or transferred to a pool supply plant on the 
same calendar day as milk was received by transfer from a pool supply 
plant at such pool distributing plant for which a distributing plant 
delivery credit is requested.
    (3) The market administrator shall regularly monitor and evaluate 
the requests for distributing plant delivery credits to determine that 
such credits are not encouraging uneconomic movements of milk, and that 
the credits continue to assure orderly marketing and efficient handling 
of milk in the marketing area. In making such determinations, the 
market administrator will include in the evaluation the general supply 
and demands for milk. If the market administrator finds that uneconomic 
movements are occurring, and such movements are persistent and 
pervasive, or are not being made in a way that assures orderly 
marketing and efficient handling of milk in the marketing area, after 
good cause shown, the market administrator may disallow the payments of 
distributing plant delivery credit on such milk. Before making such a 
finding, the market administrator shall give the handler on such milk 
sufficient notice that an investigation is being considered, and shall 
provide notice that the handler has the opportunity to explain why such 
movements were necessary, or the opportunity to correct such movements 
prior to the disallowance of any distributing plant delivery credits. 
Any disallowance of distributing plant delivery credit pursuant to this 
provision shall remain confidential between the market administrator 
and the handler.
    (f) Distributing plant delivery credits shall be computed as 
follows:
    (1) With respect to milk delivered directly from the farm to a 
distributing plant:
    (i) Determine the shortest hard-surface highway distance between 
the shipping farm and the receiving plant, and multiply the miles by an 
adjustment rate of not greater than ninety-five percent (95%) and not 
less than seventy-five percent (75%).
    (ii) Subtract the Class I price specified in Sec.  1000.50(a) of 
this chapter for the county in which the shipping farm is located from 
the Class I price applicable for the county in which the receiving pool 
distributing plant is located.
    (iii) Multiply the adjusted miles so computed in paragraph 
(f)(1)(i) of this section by the monthly mileage rate factor for the 
month computed pursuant to Sec.  1005.84(h).
    (iv) Subtract any positive difference in Class I prices computed in 
paragraph(f)(1)(ii) of this section from the rate determined in 
paragraph (f)(1)(iii) of this section.
    (v) Multiply the remainder computed in paragraph (f)(1)(iv) of this 
section by the hundredweight of milk described in paragraph (e)(1) of 
this section.
    (2) With respect to milk delivered from a pool supply plant to a 
distributing plant:
    (i) Determine the shortest hard-surface highway distance between 
the transferring pool plant and the receiving plant, and multiply the 
miles by an adjustment rate of an adjustment rate not greater than 
ninety-five percent (95%) and not less than seventy-five percent (75%); 
and

[[Page 5805]]

    (ii) Subtract the Class I price specified in Sec.  1000.50(a) of 
this chapter for the transferring pool plant from the Class I price 
applicable for the county in which the receiving pool distributing 
plant is located.
    (iii) Multiply the adjusted miles so computed in paragraph 
(f)(2)(i) of this section by the mileage rate factor for the month 
computed pursuant to Sec.  1005.84(h);
    (iv) Subtract any positive difference in Class I prices computed in 
paragraph (f)(2)(ii) of this section from the rate determined in 
paragraph (f)(2)(iii) of this section.
    (v) Multiply the remainder computed in paragraph (f)(2)(iv) of this 
section by the hundredweight of milk described in paragraph (e)(2) of 
this section.
    (g) The monthly percentage rate adjustment within the range of 
permissible percentage adjustments provided in paragraphs (f)(1)(i) and 
(f)(2)(i) of this section shall be determined by the market 
administrator, and publicly announced prior to the month for which 
effective. In determining the percentage adjustment to the actual 
mileages of milk delivered from farms and milk transferred from pool 
plants the market administrator shall evaluate the general supply and 
demand for milk in the marketing area, any previous occurrences of 
sustained uneconomic movements of milk, and the balances in the 
distributing plant delivery credit fund. The adjustment percentage 
pursuant to paragraphs (f)(1) and (6) of this section to the actual 
miles used for computing pool distributing plant credits and announced 
by the market administrator shall always be the same percentage.
    (h) Mileage rate for the distributing plant delivery credit fund. 
The mileage rate for the distributing plant delivery credit fund shall 
be the mileage rate computed by the market administrator pursuant to 
Sec.  1005.83.
    (i) The market administrator shall announce publicly on or before 
the 23rd day of the month (except as provided in Sec.  1000.90 of this 
chapter), the mileage rate factor pursuant to paragraph (h) of this 
section for the following month.
0
8. Add Sec.  1005.xx to read as follows:


Sec.  1005.xx  Assembly performance credit fund.

    The market administrator shall maintain a separate fund known as 
the Assembly Performance Credit Fund into which shall be deposited the 
payments made by handlers pursuant to Sec.  1005.xx and out of which 
shall be made the payments due handlers pursuant to Sec.  1005.xx. 
Payments due a handler shall be offset against payments due from the 
handler.
0
9. Add Sec.  1005.xx to read as follows:


Sec.  1005.xx  Payments to the assembly performance credit fund.

    (a) On or before the 12th day after the end of the month (except as 
provided in Sec.  1000.90 of this chapter), each handler operating a 
pool plant and each handler specified in Sec.  1000.9(c) of this 
chapter shall pay to the market administrator an assembly performance 
credit fund assessment determined by multiplying the pounds of Class I 
producer milk assigned pursuant to Sec.  1005.44 by $0.50 per 
hundredweight.
    (b) The market administrator may increase or decrease by up to 
$0.20 the payment rate specified in paragraph (a) of this section if 
the market administrator finds that such revision is necessary to 
assure orderly marketing and efficient handling of milk in the 
marketing area. Before making such a finding, the market administrator 
shall investigate the need for the revision either on the market 
administrator's own initiative or at the request of interested persons. 
If the investigation shows that a revision might be appropriate, the 
market administrator shall issue a notice stating that the revision is 
being considered and inviting written data, views, and arguments. Any 
decision to revise an applicable payment rate must be issued in writing 
at least fifteen days before the effective date.
0
10. Add Sec.  1005.xx to read as follows:


Sec.  1005.xx  Payments from the assembly performance credit fund.

    (a) Payments from the assembly performance credit fund to handlers 
and cooperative associations shall be made as follows:
    (1) On or before the 13th day (except as provided in Sec.  
1000.90), the market administrator shall pay to each handler that 
received milk directly from producers' farms as specified in paragraph 
(b) of this section.
    (2) The market administrator shall distribute the balance available 
in the assembly performance credit fund to all producer milk delivered 
to pool distributing plants on a pro rata basis using the rate derived 
by dividing the balance in the fund by the total producer milk 
delivered to pool distributing plants regulated under the Order.
    (3) In the event that a qualified cooperative association is the 
responsible party for whose account such milk is received and written 
documentation of this fact is provided to the market administrator 
pursuant to Sec.  1005.30(c)(3) prior to the date payment is due, the 
assembly performance credits for such milk computed pursuant to this 
section shall be made to such cooperative association rather than to 
the operator of the pool plant at which the milk was received.
    (b) Assembly performance credits shall apply to bulk milk received 
directly from the farms of dairy farmers at pool distributing plants.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

0
11. The authority citation for part 1006 continues to read as follows:

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

0
12. Amend Sec.  1006.30 by:
0
a. Redesignating paragraphs (a)(5) through (9) as (a)(7) through (11);
0
b. Adding new paragraphs (a)(5) and (6); and
0
c. Adding paragraph (c)(3).


Sec.  1006.30   Reports of receipts and utilization.

    (a) * * *
    (5) Receipts of producer milk described in Sec.  1006.84(e), 
including the identity of the individual producers whose milk is 
eligible for the distributing plant delivery credit pursuant to that 
paragraph and the date that such milk was received;
    (6) For handlers submitting distributing plant delivery credit 
requests, transfers of bulk unconcentrated milk to nonpool plants, 
including the dates that such milk was transferred;
* * * * *
    (c) * * *
    (3) With respect to milk for which a cooperative association is 
requesting a distributing plant delivery credit pursuant to Sec.  
1006.84, all of the information required in paragraphs (a)(5) and (6) 
of this section.
* * * * *
0
13. Revise Sec.  1006.32 to read as follows:


Sec.  1006.32   Other reports.

    (a) On or before the 20th day after the end of each month, each 
handler described in Sec.  1000.9(a) and (c) of this chapter shall 
report to the market administrator any adjustments to distributing 
plant delivery credit requests as reported pursuant to Sec.  
1006.30(a)(5) and (6).
    (b) In addition to the reports required pursuant to Sec. Sec.  
1006.30, 1006.31, and 1006.32(a), each handler shall report any 
information the market administrator deems necessary to verify or 
establish each handler's obligation under the order.

[[Page 5806]]

0
14. Add Sec.  1006.84 to read as follows:


Sec.  1006.84  Distributing plant delivery credits.

    (a) The Distributing Plant Delivery Credit Fund. The market 
administrator shall maintain a separate fund known as the Distributing 
Plant Delivery Credit Fund into which shall be deposited the payments 
made by handlers pursuant to paragraph (b) of this section and out of 
which shall be made the payments due handlers pursuant to paragraph (d) 
of this section. Payments due a handler shall be offset against 
payments due from the handler.
    (b) Payments to the distributing plant delivery credit fund. On or 
before the 12th day after the end of the month (except as provided in 
Sec.  1000.90 of this chapter), each handler operating a pool plant and 
each handler specified in Sec.  1000.9(c) of this chapter shall pay to 
the market administrator a distributing plant delivery credit fund 
assessment determined by multiplying the pounds of Class I producer 
milk assigned pursuant to Sec.  1006.44 by a per hundredweight 
assessment rate of $0.80 and thereafter not greater than $0.85 as the 
market administrator deems necessary to maintain a balance in the fund 
equal to the total distributing plant delivery credit disbursed during 
the prior calendar year. If the distributing plant delivery credit fund 
is in an overfunded position, the market administrator may completely 
waive the distributing plant delivery credit assessment for one or more 
months. In determining the distributing plant delivery credit 
assessment rate, in the event that during any month of that previous 
calendar year the fund balance was insufficient to cover the amount of 
credits that were due, the assessment should be based upon the amount 
of credits that would have been disbursed had the fund balance been 
sufficient.
    (c) The market administrator shall announce publicly on or before 
the 23rd day of the month (except as provided in Sec.  1000.90 of this 
chapter) the assessment rate per hundredweight pursuant to paragraph 
(b) of this section for the following month.
    (d) Payments from the distributing plant delivery credit fund. 
Payments from the distributing plant delivery credit fund to handlers 
and cooperative associations requesting distributing plant delivery 
credits shall be made as follows:
    (1) On or before the 13th day (except as provided in Sec.  1000.90 
of this chapter) after the end of each month, the market administrator 
shall pay to each handler that received, and reported pursuant to Sec.  
1006.30(a)(5), bulk unconcentrated milk directly from producers' farms, 
or receipts of bulk unconcentrated milk by transfer from a pool supply 
plant, a preliminary amount determined pursuant to paragraph (f) of 
this section to the extent that funds are available in the distributing 
plant delivery credit fund. If an insufficient balance exists to pay 
all of the credits computed pursuant to this section, the market 
administrator shall distribute the balance available in the 
distributing plant delivery credit fund by reducing payments pro rata 
using the percentage derived by dividing the balance in the fund by the 
total credits that are due for the month. The amount of credits 
resulting from this initial proration shall be subject to audit 
adjustment pursuant to paragraph (d)(3) of this section.
    (2) The market administrator shall accept adjusted requests for 
distributing plant delivery credits on or before the 20th day of the 
month following the month for which such credits were requested 
pursuant to Sec.  1006.32(a). After such date, a preliminary audit will 
be conducted by the market administrator, who will recalculate any 
necessary proration of distributing plant delivery credit payments for 
the preceding month pursuant to the process provided in paragraph 
(d)(1) of this section. Handlers will be promptly notified of an 
overpayment of credits based upon this final computation and remedial 
payments to or from the distributing plant delivery credit fund will be 
made on or before the next payment date for the following month.
    (3) Distributing plant delivery credits paid pursuant to paragraphs 
(d)(1) and (2) of this section shall be subject to final verification 
by the market administrator pursuant to Sec.  1000.77 of this chapter. 
Adjusted payments to or from the distributing plant delivery credit 
fund will remain subject to the final proration established pursuant to 
paragraph (d)(2) of this section.
    (4) In the event that a qualified cooperative association is the 
responsible party for whose account such milk is received and written 
documentation of this fact is provided to the market administrator 
pursuant to Sec.  1006.30(c)(3) prior to the date payment is due, the 
distributing plant delivery credits for such milk computed pursuant to 
this section shall be made to such cooperative association rather than 
to the operator of the pool plant at which the milk was received.
    (5) The Market Administrator shall provide monthly to producers who 
are not members of a qualified cooperative association a statement of 
the amount per hundredweight of distributing plant delivery credit 
which the distributing plant handler receiving their milk is entitled 
to claim.
    (e) Distributing plant delivery credits shall apply to the 
following milk:
    (1) Bulk unconcentrated fluid milk received at a pool distributing 
plant as producer milk directly from dairy farms located within the 
marketing area; or located within the Georgia counties of Appling, 
Atkinson, Bacon, Baker, Ben Hill, Berrien, Brooks, Calhoun, Charlton, 
Chattahoochee, Clay, Clinch, Coffee, Cook, Colquitt, Crisp, Decatur, 
Dodge, Dooley, Doughtery, Early, Echols, Grady, Irwin, Lanier, Lee, 
Lowndes, Jeff Davis, Macon, Marion, Miller, Mitchell, Pierce, Pulaski, 
Quitman, Randolph, Schley, Seminole, Stewart, Sumter, Telfair, Terrel, 
Thomas, Tift, Turner, Ware, Webster, Wilcox, and Worth, and received at 
pool distributing plants. The quantity of milk described herein shall 
be reduced by the quantity of any bulk unconcentrated fluid milk 
products transferred from a pool distributing plant to a nonpool plant 
or transferred to a pool supply plant on the same calendar day as 
producer milk was received at such plant for which a distributing plant 
delivery credit is requested.
    (2) Bulk unconcentrated fluid milk transferred from a pool plant 
regulated pursuant to Sec.  1006.7(c) or (d) to a pool distributing 
plant regulated pursuant to Sec.  1006.7(a) or (b). The quantity of 
milk described herein shall be reduced by the quantity of any bulk 
unconcentrated fluid milk products transferred from a pool distributing 
plant to a nonpool plant or transferred to a pool supply plant on the 
same calendar day as milk was received by transfer from a pool supply 
plant at such pool distributing plant for which a distributing plant 
delivery credit is requested.
    (3) The market administrator shall regularly monitor and evaluate 
the requests for distributing plant delivery credits to determine that 
such credits are not encouraging uneconomic movements of milk, and the 
credits continue to assure orderly marketing and efficient handling of 
milk in the marketing area. In making such determinations the market 
administrator will include in the evaluation the general supply and 
demands for milk. If the market administrator finds that uneconomic 
movements are occurring, and such movements are persistent and 
pervasive, or are not being made in a way that assures orderly 
marketing and efficient handling of milk in the marketing area, after 
good cause shown, the market administrator may disallow the payments of 
distributing plant delivery credit on such milk. Before making such a 
finding, the market

[[Page 5807]]

administrator shall give the handler on such milk sufficient notice 
that an investigation is being considered, and shall provide notice 
that the handler has the opportunity to explain why such movements were 
necessary, or the opportunity to correct such movements prior to the 
disallowance of any distributing plant delivery credits. Any 
disallowance of distributing plant delivery credit pursuant to this 
provision shall remain confidential between the market administrator 
and the handler.
    (f) Distributing plant delivery credits shall be computed as 
follows:
    (1) With respect to milk delivered directly from the farm to a 
distributing plant:
    (i) Determine the shortest hard-surface highway distance between 
the shipping farm and the receiving plant, and multiply the miles by an 
adjustment rate of not greater than ninety-five percent (95%) and not 
less than seventy-five percent (75%).
    (ii) Subtract the Class I price specified in Sec.  1000.50(a) of 
this chapter for the county in which the shipping farm is located from 
the Class I price applicable for the county in which the receiving pool 
distributing plant is located.
    (iii) Multiply the adjusted miles so computed in (f)(1)(i) of this 
section by the monthly mileage rate factor for the month computed 
pursuant to Sec.  1006.84(h).
    (iv) Subtract the difference in Class I prices computed in 
paragraph (f)(1)(ii) of this section from the rate determined in 
paragraph (f)(1)(iii) of this section.
    (v) Multiply the remainder computed in paragraph (f)(1)(iv) of this 
section by the hundredweight of milk described in paragraph (e)(1) of 
this section.
    (2) With respect to milk delivered from a pool supply plant to a 
distributing plant:
    (i) Determine the shortest hard-surface highway distance between 
the transferring pool plant and the receiving plant, and multiply the 
miles by an adjustment rate of not greater than ninety-five percent 
(95%) and not less than seventy-five percent (75%);
    (ii) Subtract the Class I price specified in Sec.  1000.50(a) of 
this chapter for the transferring pool plant from the Class I price 
applicable for the county in which the receiving pool distributing 
plant is located.
    (iii) Multiply the adjusted miles so computed in (f)(2)(i) of this 
section by the mileage rate factor for the month computed pursuant to 
Sec.  1006.84(h);
    (iv) Subtract any positive difference in Class I prices computed in 
paragraph (f)(2)(ii) of this section from the rate determined in 
paragraph (f)(2)(iii) of this section.
    (v) Multiply the remainder computed in paragraph (f)(2)(iv) of this 
section by the hundredweight of milk described in paragraph (e)(2) of 
this section.
    (g) The monthly percentage rate adjustment within the range of 
permissible percentage adjustments provided in paragraphs (f)(1)(i) and 
(f)(2)(i) of this section shall be determined by the market 
administrator, and publicly announced prior to the month for which 
effective. In determining the percentage adjustment to the actual 
mileages of milk delivered from farms and milk transferred from pool 
plants the market administrator shall evaluate the general supply and 
demand for milk in the marketing area, any previous occurrences of 
sustained uneconomic movements of milk, and the balances in the 
distributing plant delivery credit fund. The adjustment percentage 
pursuant to paragraphs (f)(1) and (2) to of this section the actual 
miles used for computing pool distributing plant credits and announced 
by the market administrator shall always be the same percentage.
    (h) Mileage rate for the distributing plant delivery credit fund. 
The market administrator shall compute a mileage rate factor each month 
as follows:
    (1) Compute the simple average rounded down to three decimal places 
for the most recent four (4) weeks of the Diesel Price per Gallon as 
reported by the Energy Information Administration of the United States 
Department of Energy for the Lower Atlantic and Gulf Coast Districts 
combined.
    (2) From the result in paragraph (h)(1) of this section subtract 
$2.26 per gallon;
    (3) Divide the result in paragraph (h)(2) of this section by 6.2, 
and round down to three decimal places to compute the fuel cost 
adjustment factor;
    (4) Add the result in paragraph (h)(3) of this section to $3.67;
    (5) Divide the result in paragraph (h)(4) of this section by 497;
    (6) Round the result in paragraph (h)(5) of this section down to 
five decimal places to compute the mileage rate.
    (i) The market administrator shall announce publicly on or before 
the 23rd day of the month (except as provided in Sec.  1000.90 of this 
chapter), the mileage rate factor pursuant to paragraph (h) of this 
section for the following month.
0
15. Add Sec.  1006.xx to read as follows:


Sec.  1006.xx  Assembly performance credit fund.

    The market administrator shall maintain a separate fund known as 
the Assembly Performance Credit Fund into which shall be deposited the 
payments made by handlers pursuant to Sec.  1006.xx and out of which 
shall be made the payments due handlers pursuant to Sec.  1006.xx. 
Payments due a handler shall be offset against payments due from the 
handler.
0
16. Add Sec.  1006.xx to read as follows:


Sec.  1006.xx   Payments to the assembly performance credit fund.

    (a) On or before the 12th day after the end of the month (except as 
provided in Sec.  1000.90 of this chapter), each handler operating a 
pool plant and each handler specified in Sec.  1000.9(c) of this 
chapter shall pay to the market administrator an assembly performance 
credit fund assessment determined by multiplying the pounds of Class I 
producer milk assigned pursuant to Sec.  1006.44 by $0.50 per 
hundredweight.
    (b) The market administrator may increase or decrease by up to 
$0.20 the payment rate specified in paragraph (a) of this section if 
the market administrator finds that such revision is necessary to 
assure orderly marketing and efficient handling of milk in the 
marketing area. Before making such a finding, the market administrator 
shall investigate the need for the revision either on the market 
administrator's own initiative or at the request of interested persons. 
If the investigation shows that a revision might be appropriate, the 
market administrator shall issue a notice stating that the revision is 
being considered and inviting written data, views, and arguments. Any 
decision to revise an applicable payment rate must be issued in writing 
at least fifteen days before the effective date.
0
17. Add Sec.  1006.xx to read as follows:


Sec.  1006.xx  Payments from the assembly performance credit fund.

    (a) Payments from the assembly performance credit fund to handlers 
and cooperative associations shall be made as follows:
    (1) On or before the 13th day (except as provided in Sec.  
1000.90), the market administrator shall pay to each handler that 
received milk directly from producers' farms as specified in paragraph 
(b) of this section;
    (2) The market administrator shall distribute the balance available 
in the assembly performance credit fund to all producer milk delivered 
to pool distributing plants on a pro rata basis using the rate derived 
by dividing the balance in the fund by the total producer milk 
delivered to pool distributing plants regulated under the Order.
    (3) In the event that a qualified cooperative association is the

[[Page 5808]]

responsible party for whose account such milk is received and written 
documentation of this fact is provided to the market administrator 
pursuant to Sec.  1006.30(c)(3) prior to the date payment is due, the 
assembly performance credits for such milk computed pursuant to this 
section shall be made to such cooperative association rather than to 
the operator of the pool plant at which the milk was received.
    (b) Assembly performance credits shall apply to bulk milk received 
directly from the farms of dairy farmers at pool distributing plants.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

0
18. The authority citation for part 1007 continues to read as follows:

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

0
19. Amend Sec.  1007.30 by:
0
a. Redesignating paragraphs (a)(5) through (9) as paragraphs (a)(7) 
through (11);
0
b. Adding new paragraphs (a)(5) and (6);
0
c. Redesignating paragraph (c)(3) as (c)(4) and revising it; and
0
d. Adding new paragraph (c)(3).
    The revisions and additions read as follows.


Sec.  1007.30   Reports of receipts and utilization.

    (a) * * *
    (5) Receipts of producer milk described in Sec.  1007.84(e), 
including the identity of the individual producers whose milk is 
eligible for the distributing plant delivery credit pursuant to that 
paragraph and the date that such milk was received;
    (6) For handlers submitting distributing plant delivery credit 
requests, transfers of bulk unconcentrated milk to nonpool plants, 
including the dates that such milk was transferred;
* * * * *
    (c) * * *
    (3) With respect to milk for which a cooperative association is 
requesting a distributing plant delivery credit pursuant to Sec.  
1007.84, all of the information required in paragraphs (a)(5) and (6) 
of this section.
    (4) With respect to milk for which a cooperative association is 
requesting a transportation credit pursuant to Sec.  1007.82, all of 
the information required in paragraphs (a)(7), (8), and (9) of this 
section.
* * * * *
0
20. Revise Sec.  1007.32(a) to read as follows:


Sec.  1007.32   Other reports.

    (a) On or before the 20th day after the end of each month, each 
handler described in Sec.  1000.9(a) and (c) of this chapter shall 
report to the market administrator any adjustments to distributing 
plant delivery credit requests as reported pursuant to Sec.  
1007.30(a)(5) and (6).
* * * * *
0
21. Amend Sec.  1007.81 by revising the first sentence of paragraph (a) 
to read as follows:


Sec.  1007.81  Payments to the transportation credit balancing fund.

    (a) On or before the 12th day after the end of the month (except as 
provided in Sec.  1000.90 of this chapter), each handler operating a 
pool plant and each handler specified in Sec.  1000.9(c) of this 
chapter shall pay to the market administrator a transportation credit 
balancing fund assessment determined by multiplying the pounds of Class 
I producer milk assigned pursuant to Sec.  1007.44 by $0.60 per 
hundredweight or such lesser amount as the market administrator deems 
necessary to maintain a balance in the fund equal to the total 
transportation credits disbursed during the prior June through February 
period to reflect any changes in the current mileage rate versus the 
mileage rate(s) in effect during the prior June through February 
period. * * *
* * * * *
0
22. Amend Sec.  1007.82 by:
0
a. Revising the first sentence of paragraph (a)(1), the first sentence 
of paragraph (b), and paragraph s (c)(2) and (d)(3)(iii); and
0
b. Adding paragraph (d)(3)(viii).
    The revisions and addition read as follows:


Sec.  1007.82   Payments from the transportation credit balancing fund.

    (a) * * *
    (1) On or before the 13th day (except as provided in Sec.  1000.90 
of this chapter) after the end of each of the months of January, and 
July through December and any other month in which transportation 
credits are in effect pursuant to paragraph (b) of this section, the 
market administrator shall pay to each handler that received, and 
reported pursuant to Sec.  1007.30(a)(5), bulk milk transferred from a 
plant fully regulated under another Federal order as described in 
paragraph (c)(1) of this section or that received, and reported 
pursuant to Sec.  1007.30(a)(6), milk directly from producers' farms as 
specified in paragraph (c)(2) of this section, a preliminary amount 
determined pursuant to paragraph (d) of this section to the extent that 
funds are available in the transportation credit balancing fund. * * *
    (b) The market administrator may extend the period during which 
transportation credits are in effect (i.e., the transportation credit 
period) to the month of February or June if a written request to do so 
is received fifteen (15) days prior to the beginning of the month for 
which the request is made and, after conducting an independent 
investigation, finds that such extension is necessary to assure the 
market of an adequate supply of milk for fluid use. * * *
    (c) * * *
    (2) Bulk milk received directly from the farms of dairy farmers at 
pool distributing plants.
    (d) * * *
    (3) * * *
    (iii) Subtract 15 percent (15%) of the miles from the mileage so 
determined;
* * * * *
    (viii) The market administrator may revise the factor described in 
(d)(3)(iii) of this paragraph (the mileage adjustment factor) if a 
written request to do so is received fifteen (15) days prior to the 
beginning of the month for which the request is made and, (15) days 
prior to the beginning of the month for which the request is made and, 
after conducting an independent investigation, finds that such revision 
is necessary to assure orderly marketing, efficient handling of milk in 
the marketing area, and an adequate supply of milk for fluid use. The 
market administrator may increase the mileage adjustment factor by as 
much as ten percent (10%) up to twenty-five percent (25%) or decrease 
it by as much as ten percent (10%), to a minimum of five percent (5%). 
Before making such a finding, the market administrator shall notify the 
Deputy Administrator of Dairy Programs and all handlers in the market 
that a revision is being considered and invite written data, views, and 
arguments. Any decision to revise the mileage rate factor must be 
issued in writing prior to the first day of the month for which the 
revision is to be effective.
0
23. Amend Sec.  1007.83 by revising paragraphs (a)(2) through (5) to 
read as follows:


Sec.  1007.83  Mileage rate for the transportation credit balancing 
fund.

    (a) * * *
    (2) From the result in paragraph (a)(1) of this section subtract 
$2.26 per gallon;
    (3) Divide the result in paragraph (a)(2) of this section by 6.2, 
and round down to three decimal places to compute the fuel cost 
adjustment factor;

[[Page 5809]]

    (4) Add the result in paragraph (a)(3) of this section to $3.67;
    (5) Divide the result in paragraph (a)(4) of this section by 497;
* * * * *
0
24. Add Sec.  1007.84 to read as follows:


Sec.  1007.84   Distributing plant delivery credits.

    (a) The Distributing Plant Delivery Credit Fund. The market 
administrator shall maintain a separate fund known as the Distributing 
Plant Delivery Credit Fund into which shall be deposited the payments 
made by handlers pursuant to Sec.  1007.84(b) and out of which shall be 
made the payments due handlers pursuant to Sec.  1007.84(d). Payments 
due a handler shall be offset against payments due from the handler.
    (b) Payments to the distributing plant delivery credit fund. On or 
before the 12th day after the end of the month (except as provided in 
Sec.  1000.90 of this chapter), each handler operating a pool plant and 
each handler specified in Sec.  1000.9(c) of this chapter shall pay to 
the market administrator a distributing plant delivery credit fund 
assessment determined by multiplying the pounds of Class I producer 
milk assigned pursuant to Sec.  1007.44 by a per hundredweight 
assessment rate of $0.45 and thereafter not greater than $0.50 as the 
market administrator deems necessary to maintain a balance in the fund 
equal to the total distributing plant delivery credit disbursed during 
the prior calendar year. If the distributing plant delivery credit fund 
is in an overfunded position, the market administrator may completely 
waive the distributing plant delivery credit assessment for one or more 
months. In determining the distributing plant delivery credit 
assessment rate, in the event that during any month of that previous 
calendar year the fund balance was insufficient to cover the amount of 
credits that were due, the assessment should be based upon the amount 
of credits that would have been disbursed had the fund balance been 
sufficient.
    (c) The market administrator shall announce publicly on or before 
the 23rd day of the month (except as provided in Sec.  1000.90 of this 
chapter), the assessment rate per hundredweight pursuant to paragraph 
(b) of this section for the following month.
    (d) Payments from the distributing plant delivery credit fund. 
Payments from the distributing plant delivery credit fund to handlers 
and cooperative associations requesting distributing plant delivery 
credits shall be made as follows:
    (1) On or before the 13th day (except as provided in Sec.  1000.90 
of this chapter) after the end of each month, the market administrator 
shall pay to each handler that received, and reported pursuant to Sec.  
1007.30(a)(5), bulk unconcentrated milk directly from producers' farms, 
or receipts of bulk unconcentrated milk by transfer from a pool supply 
plant, a preliminary amount determined pursuant to paragraph (f) of 
this section to the extent that funds are available in the distributing 
plant delivery credit fund. If an insufficient balance exists to pay 
all of the credits computed pursuant to this section, the market 
administrator shall distribute the balance available in the 
distributing plant delivery credit fund by reducing payments pro rata 
using the percentage derived by dividing the balance in the fund by the 
total credits that are due for the month. The amount of credits 
resulting from this initial proration shall be subject to audit 
adjustment pursuant to paragraph (d)(3) of this section.
    (2) The market administrator shall accept adjusted requests for 
distributing plant delivery credits on or before the 20th day of the 
month following the month for which such credits were requested 
pursuant to Sec.  1007.32(a). After such date, a preliminary audit will 
be conducted by the market administrator, who will recalculate any 
necessary proration of distributing plant delivery credit payments for 
the preceding month pursuant to the process provided in paragraph 
(d)(1) of this section. Handlers will be promptly notified of an 
overpayment of credits based upon this final computation and remedial 
payments to or from the distributing plant delivery credit fund will be 
made on or before the next payment date for the following month.
    (3) Distributing plant delivery credits paid pursuant to paragraphs 
(d)(1) and (2) of this section shall be subject to final verification 
by the market administrator pursuant to Sec.  1000.77 of this chapter. 
Adjusted payments to or from the distributing plant delivery credit 
fund will remain subject to the final proration established pursuant to 
paragraph (d)(2) of this section.
    (4) In the event that a qualified cooperative association is the 
responsible party for whose account such milk is received and written 
documentation of this fact is provided to the market administrator 
pursuant to Sec.  1007.30(c)(3) prior to the date payment is due, the 
distributing plant delivery credits for such milk computed pursuant to 
this section shall be made to such cooperative association rather than 
to the operator of the pool plant at which the milk was received.
    (5) The Market Administrator shall provide monthly to producers who 
are not members of a qualified cooperative association a statement of 
the amount per hundredweight of distributing plant delivery credit 
which the distributing plant handler receiving their milk is entitled 
to claim.
    (e) Distributing plant delivery credits shall apply to the 
following milk:
    (1) Bulk unconcentrated fluid milk received at a pool distributing 
plant as producer milk directly from dairy farms located within the 
marketing areas defined in 7 CFR 1005.2 and 1007.2. The quantity of 
milk described herein shall be reduced by the quantity of any bulk 
unconcentrated fluid milk products transferred from a pool distributing 
plant to a nonpool plant or transferred to a pool supply plant on the 
same calendar day as producer milk was received at such plant for which 
a distributing plant delivery credit is requested.
    (2) Bulk unconcentrated fluid milk transferred from a pool supply 
plant regulated pursuant to Sec.  1007.7(c) or (d) to a pool 
distributing plant regulated pursuant to Sec.  1007.7(a) or (b). The 
quantity of milk described herein shall be reduced by the quantity of 
any bulk unconcentrated fluid milk products transferred from a pool 
distributing plant to a nonpool plant or transferred to a pool supply 
plant on the same calendar day as milk was received by transfer from a 
pool supply plant at such pool distributing plant for which a 
distributing plant delivery credit is requested.
    (3) The market administrator shall regularly monitor and evaluate 
the requests for distributing plant delivery credits to determine that 
such credits are not encouraging uneconomic movements of milk, and the 
credits continue to assure orderly marketing and efficient handling of 
milk in the marketing area. In making such determinations the market 
administrator will include in the evaluation the general supply and 
demands for milk. If the market administrator finds that uneconomic 
movements are occurring, and such movements are persistent and 
pervasive, or are not being made in a way that assures orderly 
marketing and efficient handling of milk in the marketing area, after 
good cause shown, the market administrator may disallow the payments of 
distributing plant delivery credit on such milk. Before making such a 
finding, the market administrator shall give the handler on such milk 
sufficient notice that an investigation is being considered, and shall 
provide notice that the handler has the opportunity to explain why such 
movements were necessary, or the opportunity to correct such movements

[[Page 5810]]

prior to the disallowance of any distributing plant delivery credits. 
Any disallowance of distributing plant delivery credit pursuant to this 
provision shall remain confidential between the market administrator 
and the handler.
    (f) Distributing plant delivery credits shall be computed as 
follows:
    (1) With respect to milk delivered directly from the farm to a 
distributing plant:
    (i) Determine the shortest hard-surface highway distance between 
the shipping farm and the receiving plant, and multiply the miles by an 
adjustment rate of not greater than ninety-five percent (95%) and not 
less than seventy-five percent (75%);
    (ii) Determine the absolute value of the per hundredweight 
difference between the Class I price specified in Sec.  1000.50(a) of 
this chapter for the county in which the shipping farm is located and 
the Class I price applicable for the county in which the receiving pool 
distributing plant is located.
    (iii) Multiply the adjusted miles so computed in (f)(1) of this 
section by the monthly mileage rate factor for the month computed 
pursuant to Sec.  1007.84(h).
    (iv) Subtract any positive difference in Class I prices computed in 
paragraph (f)(1)(ii) of this section from the rate determined in 
paragraph (f)(1)(iii) of this section.
    (v) Multiply the remainder computed in paragraph (f)(1)(iv) of this 
section by the hundredweight of milk described in paragraph (e)(1) of 
this section.
    (2) With respect to milk delivered from a pool supply plant to a 
distributing plant:
    (i) Determine the shortest hard-surface highway distance between 
the transferring pool plant and the receiving plant, and multiply the 
miles by an adjustment rate of not greater than ninety-five percent 
(95%) and not less than seventy-five percent (75%);
    (ii) Subtract the Class I price specified in Sec.  1000.50(a) of 
this chapter for the transferring pool plant from the Class I price 
applicable for the county in which the receiving pool distributing 
plant is located.
    (iii) Multiply the adjusted miles so computed in paragraph 
(f)(2)(i) of this section by the mileage rate factor for the month 
computed pursuant to Sec.  1005.84(h);
    (iv) Subtract any positive difference in Class I prices computed in 
paragraph (f)(2)(ii) of this section from the rate determined in 
paragraph (f)(3)(iii) of this section.
    (v) Multiply the remainder computed in paragraph (f)(2)(iv) of this 
section by the hundredweight of milk described in paragraph (e)(2) of 
this section.
    (g) The monthly percentage rate adjustment within the range of 
permissible percentage adjustments provided in paragraphs (f)(1)(i) and 
(f)(2)(i) of this section shall be determined by the market 
administrator, and publicly announced prior to the month for which 
effective. In determining the percentage adjustment to the actual 
mileages of milk delivered from farms and milk transferred from pool 
plants the market administrator shall evaluate the general supply and 
demand for milk in the marketing area, any previous occurrences of 
sustained uneconomic movements of milk, and the balances in the 
distributing plant delivery credit fund. The adjustment percentage 
pursuant to (f)(1) and (2) of this section to the actual miles used for 
computing pool distributing plant credits and announced by the market 
administrator shall always be the same percentage.
    (h) Mileage rate for the distributing plant delivery credit fund. 
The mileage rate for the distributing plant delivery credit fund shall 
be the mileage rate computed by the market administrator pursuant to 
Sec.  1007.83.
    (i) The market administrator shall announce publicly on or before 
the 23rd day of the month (except as provided in Sec.  1000.90 of this 
chapter), the mileage rate factor pursuant to paragraph (h) of this 
section for the following month.
0
25. Add Sec.  1007.xx to read as follows:


Sec.  1007.xx  Assembly performance credit fund.

    The market administrator shall maintain a separate fund known as 
the Assembly Performance Credit Fund into which shall be deposited the 
payments made by handlers pursuant to Sec.  1007.xx and out of which 
shall be made the payments due handlers pursuant to Sec.  1007.xx. 
Payments due a handler shall be offset against payments due from the 
handler.
0
26. Add Sec.  1007.xx to read as follows:


Sec.  1007.xx  Payments to the assembly performance credit fund.

    (a) On or before the 12th day after the end of the month (except as 
provided in Sec.  1000.90 of this chapter), each handler operating a 
pool plant and each handler specified in Sec.  1000.9(c) of this 
chapter shall pay to the market administrator an assembly performance 
credit fund assessment determined by multiplying the pounds of Class I 
producer milk assigned pursuant to Sec.  1007.44 by $0.50 per 
hundredweight.
    (b) The market administrator may increase or decrease by up to 
$0.20 the payment rate specified in paragraph (a) of this section if 
the market administrator finds that such revision is necessary to 
assure orderly marketing and efficient handling of milk in the 
marketing area. Before making such a finding, the market administrator 
shall investigate the need for the revision either on the market 
administrator's own initiative or at the request of interested persons. 
If the investigation shows that a revision might be appropriate, the 
market administrator shall issue a notice stating that the revision is 
being considered and inviting written data, views, and arguments. Any 
decision to revise an applicable payment rate must be issued in writing 
at least fifteen days before the effective date.
0
27. Add Sec.  1007.xx to read as follows:


Sec.  1007.xx   Payments from the assembly performance credit fund.

    (a) Payments from the assembly performance credit fund to handlers 
and cooperative associations shall be made as follows:
    (1) On or before the 13th day (except as provided in Sec.  1000.90 
of this chapter), the market administrator shall pay to each handler 
that received milk directly from producers' farms as specified in 
paragraph (b) of this section;
    (2) The market administrator shall distribute the balance available 
in the assembly performance credit fund to all producer milk delivered 
to pool distributing plants on a pro rata basis using the rate derived 
by dividing the balance in the fund by the total producer milk 
delivered to pool distributing plants regulated under the Order.
    (3) In the event that a qualified cooperative association is the 
responsible party for whose account such milk is received and written 
documentation of this fact is provided to the market administrator 
pursuant to Sec.  1007.30(c)(3) prior to the date payment is due, the 
assembly performance credits for such milk computed pursuant to this 
section shall be made to such cooperative association rather than to 
the operator of the pool plant at which the milk was received.
    (b) Assembly performance credits shall apply to bulk milk received 
directly from the farms of dairy farmers at pool distributing plants.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-01459 Filed 1-27-23; 8:45 am]
BILLING CODE 3410-02-P