Milk in the Appalachian, Florida, and Southeast Marketing Areas; Amendments to Marketing Agreements and to Orders, 6401-6411 [2024-01829]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 89, Number 22 (Thursday, February 1, 2024)]
[Rules and Regulations]
[Pages 6401-6411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01829]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 89, No. 22 / Thursday, February 1, 2024 / 
Rules and Regulations

[[Page 6401]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1005, 1006, and 1007

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


Milk in the Appalachian, Florida, and Southeast Marketing Areas; 
Amendments to Marketing Agreements and to Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the transportation credit balancing 
fund provisions for the Appalachian and Southeast Federal milk 
marketing orders and establishes distributing plant delivery credits in 
the Appalachian, Florida, and Southeast Federal milk marketing orders. 
More than the required number of producers in the three impacted 
marketing areas have approved the issuance of the final order.

DATES: This rule is effective March 1, 2024.

ADDRESSES: To review the hearing record and relevant materials, please 
see https://www.ams.usda.gov/rules-regulations/milk-appalachian-southeast-and-florida-areas-hearing-proposed-amendments.

FOR FURTHER INFORMATION CONTACT: Erin Taylor, USDA/AMS/Dairy Programs, 
Order Formulation and Enforcement Branch, STOP 0231--Room 2530, 1400 
Independence Avenue SW, Washington, DC 20250-0231, Telephone: (202) 
720-7183, Email: [email protected].

SUPPLEMENTARY INFORMATION: This rule, in accordance with 7 CFR 
900.14(c), is the Secretary's final rule in this proceeding and adopts 
the amendments detailed in the proposed rule published in the Federal 
Register on December 1, 2023 (88 FR 84038).
    This final rule amends the transportation credit balancing fund 
(TCBF) provisions in the Appalachian and Southeast Federal milk 
marketing orders (FMMOs or orders) by (1) updating the components of 
the mileage rate calculation; (2) revising the months of mandatory and 
discretionary payment; (3) revising the non-reimbursed mileage factor; 
and (4) increasing the maximum assessment rate on Class I milk. This 
final rule also establishes distributing plant delivery credit (DPDC) 
provisions in the Appalachian, Florida, and Southeast FMMOs that will 
make marketwide service payments to qualifying handlers and 
cooperatives for milk shipments to pool distributing plants from farms 
that are year-round, consistent suppliers. As required by regulation, 
AMS conducted a vote where more than two-thirds of the participating 
producers approved the amended orders. Thus, AMS is issuing this final 
rule implementing new and amended provisions.
    This administrative action is governed by sections 556 and 557 of 
Title 5 of the United States Code and, therefore, is excluded from the 
requirements of Executive Orders 12866, 13175, 13563, and 14094. This 
action falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Orders 12866, 
13563, and 14094 review.
    The amendments adopted in this final rule have been reviewed under 
Executive Order 12988, Civil Justice Reform. They are not intended to 
have a retroactive effect and will not preempt any state or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674) (AMAA), provides that administrative proceedings must 
be exhausted before parties may file suit in court. Under section 
608c(15)(A) of the AMAA, any handler subject to an order may request 
modification or exemption from such order by filing a petition with the 
United States Department of Agriculture (USDA) 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, USDA 
would rule on the petition. The AMAA provides that the district court 
of the United States in any district in which the handler is an 
inhabitant, or has its principal place of business, has jurisdiction in 
equity to review USDA's ruling on the petition, provided a bill in 
equity is filed not later than 20 days after the date of the entry of 
the ruling.

Regulatory Flexibility Act and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (RFA) (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 this 
final rule will not have a significant economic impact on a substantial 
number of small entities. The purpose of the RFA is to fit regulatory 
actions to the scale of businesses subject to such actions so that 
small businesses will not be unduly or disproportionately burdened. 
Marketing orders and amendments thereto are unique in that they are 
normally brought about through group action of essentially small 
entities for their own benefit. A small dairy farm as defined by the 
Small Business Administration (SBA) (13 CFR 121.201) is one that has an 
annual gross revenue of $3.75 million or less, and a small dairy 
products manufacturer is one that has no more than the number of 
employees listed in the chart below:

----------------------------------------------------------------------------------------------------------------
                                                                                                 Size standards
               NAICS code                               NAICS U.S. industry title                 in number of
                                                                                                    employees
----------------------------------------------------------------------------------------------------------------
311511..................................  Fluid Milk Manufacturing............................             1,150
311512..................................  Creamery Butter Manufacturing.......................               750
311513..................................  Cheese Manufacturing................................             1,250
311514..................................  Dry, Condensed, and Evaporated Dairy Product                     1,000
                                           Manufacturing.
----------------------------------------------------------------------------------------------------------------


[[Page 6402]]

    To determine which dairy farms are ``small businesses,'' the $3.75 
million per year income limit was used to establish a milk marketing 
threshold of 1,220,703 pounds per month. Although this threshold does 
not factor in additional monies that may be received by dairy 
producers, it should be an accurate standard for most ``small'' dairy 
farmers. To determine a handler's size, if the plant is part of a 
larger company operating multiple plants that collectively exceed the 
750-employee limit for creamery butter; the 1,000-employee limit for 
dry, condensed, and evaporated dairy product manufacturing; the 1,150-
employee limit for fluid milk manufacturing; or the 1,250-employee 
limit for cheese manufacturing; the plant was considered a large 
business even if the local plant does not exceed the 750-; 1,000-; 
1,150-; or 1,250-employee limits, respectively.
    During March 2023, the milk of 2,191 dairy farms was pooled on the 
Appalachian (1,359), Florida (83), and Southeast (749) FMMOs. Of the 
totals, 1,233 farms on the Appalachian FMMO (91 percent), 37 on the 
Florida FMMO (45 percent), and 658 on the Southeast FMMO (88 percent) 
were considered small businesses.
    During March 2023, there were a total of 17 plants associated with 
the Appalachian FMMO (16 pool distributing plants and 1 pool supply 
plant), 7 plants associated with the Florida FMMO (all pool 
distributing plants), and 16 plants associated with the Southeast FMMO 
(15 pool distributing plants and 1 pool supply plant). The number of 
plants meeting the small business criteria under the Appalachian, 
Florida, and Southeast FMMOs were estimated to be 2 (13 percent), 2 (29 
percent), and 2 (13 percent), respectively.
    Currently, the Appalachian and Southeast orders provide 
transportation credit balancing fund (TCBF) payments on supplemental 
shipments of milk for Class I use provided the milk was from producers 
located outside of the marketing areas who are not regular suppliers to 
the market. Producer milk received at a pool distributing plant 
eligible for a transportation credit under the orders is defined as 
bulk milk received directly from a dairy farmer (1) from whom not more 
than 50 percent of the dairy farmer's milk production, in aggregate, is 
received as producer milk during the immediately preceding months of 
March through May of each order; and (2) who produced milk on a farm 
not located within the specified marketing areas of either order. Milk 
deliveries from producers located outside the marketing area who are 
consistent suppliers to the market, or from producers located inside 
the marketing areas, is not eligible for transportation credits.
    This final rule amends the Appalachian and Southeast TCBF 
provisions. Specifically, the amendments amend the non-reimbursed 
mileage level from 85 miles to 15 percent of total miles and update 
components of the mileage rate factor to reflect more current market 
transportation costs.
    The amendments also will increase the maximum TCBF assessment rates 
for the Appalachian and Southeast orders. Specifically, the maximum 
transportation credit assessment rate for the Appalachian and Southeast 
orders will increase to $0.30 and $0.60 per hundredweight (cwt), 
respectively. The increases are intended to minimize the proration and 
depletion of each order's TCBF to provide more adequate TCBF payments.
    This final rule also adopts DPDCs in the Appalachian, Florida, and 
Southeast FMMOs to provide transportation assistance to handlers and 
cooperatives procuring year-round, consistent milk supplies for the 
region. Currently, there are no provisions in any of the three 
southeastern FMMOs to provide transportation assistance to handlers and 
cooperatives for these types of milk deliveries.
    The DPDCs adopted in this final rule will operate similar to the 
TCBF program: (1) DPDCs will be funded through an assessment on Class I 
producer milk; (2) DPDCs will be payable to handlers and cooperatives 
for procuring year-round milk supplies as determined by location and 
delivery criteria; (3) DPDC payment provisions will be identical to 
those for TCBF payments; and (4) DPDC provisions are designed to 
safeguard against excess assessment collections and prevent persistent 
and pervasive uneconomic milk movements for the purpose of receiving a 
DPDC payment.
    The TCBF and DPDC provisions are applied identically to large and 
small handlers and cooperatives regulated by the Appalachian, Florida, 
and Southeast FMMOs. Since the amendments will apply to all regulated 
cooperatives and handlers regardless of their size, the amendments 
should not have a significant economic impact on a substantial number 
of small entities.
    A review of reporting requirements was completed under the 
Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). It was 
determined that these amendments will have no impact on reporting, 
recordkeeping, or other compliance requirements because those 
requirements will remain unchanged. No new forms are proposed, and no 
additional reporting requirements will be necessary.
    This final rule does not require additional information collection 
that requires clearance by the OMB beyond currently approved 
information collection. The primary sources of data used to complete 
the forms are routinely used in most business transactions. Forms 
require only a minimal amount of information which can be supplied 
without data processing equipment or a trained statistical staff. Thus, 
since the information is already provided, no new information 
collection requirements are needed, and the current information 
collection and reporting burden is relatively small. Requiring the same 
reports for all handlers does not significantly disadvantage any 
handler that is smaller than the industry average.
    The Agricultural Marketing Service 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 
access to Government information and services, and for other purposes.
    No other burdens are expected to fall on the dairy industry as a 
result of overlapping Federal rules. This rulemaking proceeding does 
not duplicate, overlap, or conflict with any existing Federal rules.

Prior Documents in This Proceeding

    Notice of Hearing: Published in the Federal Register on January 30, 
2023 (88 FR 5800).
    Recommended Decision: Published in the Federal Register on July 18, 
2023 (88 FR 46016).
    Final Decision: Published in the Federal Register on December 1, 
2023 (88 FR 84038).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the orders were first issued and when they 
were amended. The previous findings and determinations are hereby 
ratified and confirmed, except where they may conflict with those set 
forth herein.

(a) Findings Upon the Basis of the Hearing Record

    The amendments to the order are based on the record of a public 
hearing held in Franklin, Tennessee, February 28-March 2, 2023, 
pursuant to a notice of hearing published January 30, 2023 (88 FR 
5800). The hearing was held

[[Page 6403]]

pursuant to the provisions of the Agricultural Marketing Agreement Act 
of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of 
practice and procedure (7 CFR part 900).
    Upon the basis of the evidence introduced at such hearing and the 
record thereof, it is determined that:
    (1) The said orders as hereby amended, and all of the terms and 
conditions thereof, will tend to effectuate the declared policy of the 
AMAA;
    (2) The parity prices of milk, as determined pursuant to section 2 
of the AMAA, are not reasonable in view of the price of feeds, 
available supplies of feeds, and other economic conditions which affect 
market supply and demand for milk in the aforesaid marketing area. The 
minimum prices specified in the orders as hereby amended are such 
prices as will reflect the aforesaid factors, ensure a sufficient 
quantity of pure and wholesome milk, and be in the public interest; and
    (3) The said orders as hereby amended regulate the handling of milk 
in the same manner as, and are applicable only to persons in the 
respective classes of industrial or commercial activity specified in, 
marketing agreements upon which a hearing has been held.

(b) Additional Findings

    The amendments to these orders are known to handlers. The final 
decision containing the amendments to these orders was issued and 
published in the Federal Register (88 FR 84038) on December 1, 2023.

(c) Determinations

    It is hereby determined that:
    (1) The refusal or failure of handlers (excluding cooperative 
associations specified in section 8c(9) of the AMAA) of more than 50 
percent of the milk marketed within the specified marketing areas to 
sign a proposed marketing agreement, tends to prevent the effectuation 
of the declared policy of the AMAA;
    (2) The issuance of this order amending the Appalachian, Florida, 
and Southeast orders is the only practical means pursuant to the 
declared policy of the AMAA of advancing the interests of producers as 
defined in the order as hereby amended; and
    (3) The issuance of this order amending the Appalachian, Florida, 
and Southeast FMMOs is favored by at least two-thirds of the producers 
who were engaged in the production of milk for sale in the respective 
marketing areas.

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

    Milk marketing orders.

Order Amending the Order Regulating the Handling of Milk in the 
Appalachian, Florida, and Southeast Marketing Areas

    It is therefore ordered, that on and after the effective date 
hereof, the handling of milk in the Appalachian, Florida, and Southeast 
marketing areas shall be in conformity to and in compliance with the 
terms and conditions of the orders, as amended, and as hereby amended, 
as follows:

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), respectively;
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 required in paragraphs (a)(7) through (9) of this 
section.
* * * * *

0
3. Amend Sec.  1005.32 by revising paragraph (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) through (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 paragraph (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)(7), 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)(8), 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

[[Page 6404]]

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. * * *
* * * * *
    (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 percentage points, up to twenty-five percent (25%) or 
decrease it by as much as ten percentage points, to a minimum of five 
percent (5%). Before making such a finding, the market administrator 
shall notify all handlers in the market that a revision is being 
considered and invite written data, comments, 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 before the undesignated center heading 
``Administrative Assessment and Marketing Service Deduction'' to read 
as follows:


Sec.  1005.84  Distributing plant delivery credits.

    (a) 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.  1005.44 by a per hundredweight 
assessment rate of $0.60 or such lesser amount 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) Assessment rate announcement. 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.  
1005.30(a)(5), bulk unconcentrated milk directly from producers' farms, 
or receipts of bulk unconcentrated milk by transfer from a pool supply 
plant as defined in Sec.  1005.7(c) or (d), 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 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

[[Page 6405]]

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) Eligible milk. Distributing plant delivery credits shall apply 
to the following milk:
    (1) Bulk unconcentrated fluid milk received directly from dairy 
farms at a pool distributing plant as producer milk subject to the 
following conditions:
    (i) The farm on which the milk was produced is located within the 
specified marketing areas of the order in this part or the marketing 
area of Federal Order 1007 (7 CFR part 1007).
    (ii) The farm on which the milk was produced is located in the 
following counties:
    (A) Illinois: Alexander, Bond, Champaign, Christian, Clark, Clay, 
Clinton, Coles, Crawford, Cumberland, Douglas, Edgar, Edwards, 
Effingham, Fayette, Franklin, Gallatin, Hamilton, Hardin, Jackson, 
Jasper, Jefferson, Johnson, Lawrence, Macon, Marion, Massac, Monroe, 
Montgomery, Moultrie, Perry, Piatt, Pope, Pulaski, Randolph, Richland, 
St Clair, Saline, Shelby, Union, Vermilion, Wabash, Washington, Wayne, 
White, and Williamson.
    (B) Indiana: Bartholomew, Boone, Brown, Clay, Clinton, Dearborn, 
Decatur, Delaware, Fayette, Fountain, Franklin, Hamilton, Hancock, 
Hendricks, Henry, Jackson, Jefferson, Jennings, Johnson, Lawrence, 
Madison, Marion, Monroe, Montgomery, Morgan, Ohio, Owen, Parke, Putnam, 
Randolph, Ripley, Rush, Shelby, Switzerland, Tippecanoe, Tipton, Union, 
Vermillion, Vigo, Warren, and Wayne.
    (C) Kentucky: Boone, Boyd, Bracken, Campbell, Floyd, Grant, 
Greenup, Harrison, Johnson, Kenton, Lawrence, Lewis, Magoffin, Martin, 
Mason, Pendleton, Pike, and Robertson.
    (D) Maryland: Allegany, Frederick, Garrett, Montgomery, and 
Washington.
    (E) Ohio: Adams, Athens, Brown, Butler, Clark, Clermont, Clinton, 
Darke, Fairfield, Fayette, Franklin, Gallia, Greene, Hamilton, 
Highland, Hocking, Jackson, Lawrence, Madison, Meigs, Miami, 
Montgomery, Morgan, Perry, Pickaway, Pike, Preble, Ross, Scioto, 
Vinton, Warren, Washington.
    (F) Pennsylvania: Bedford, Fayette, Franklin, Fulton, Greene, and 
Somerset.
    (G) Virginia counties: Albemarle, Amelia, Appomattox, Arlington, 
Brunswick, Buckingham, Caroline, Charles City, Charlotte, Chesterfield, 
Clarke, Culpeper, Cumberland, Dinwiddie, Essex, Fairfax, Fauquier, 
Fluvanna, Frederick, Gloucester, Goochland, Greene, Greensville, 
Halifax, Hanover, Henrico, Isle Of Wight, James City, King And Queen, 
King George, King William, Lancaster, Loudoun, Louisa, Lunenburg, 
Madison, Mathews, Mecklenburg, Middlesex, Nelson, New Kent, 
Northumberland, Nottoway, Orange, Page, Powhatan, Prince Edward, Prince 
George, Prince William, Rappahannock, Richmond, Shenandoah, 
Southampton, Spotsylvania, Stafford, Surry, Sussex, Warren, 
Westmoreland, York.
    (H) Virginia cities: Alexandria City, Charlottesville City, 
Chesapeake City, Colonial Heights City, Emporia City, Fairfax City, 
Falls Church City, Franklin City, Fredericksburg City, Hampton City, 
Hopewell City, Manassas City, Manassas Park City, Newport News City, 
Norfolk City, Petersburg City, Poquoson City, Portsmouth City, Richmond 
City, Suffolk City, Virginia Beach City, Williamsburg City, and 
Winchester City.
    (I) West Virginia: Barbour, Berkeley, Boone, Braxton, Cabell, 
Calhoun, Clay, Doddridge, Fayette, Gilmer, Grant, Greenbrier, 
Hampshire, Hardy, Harrison, Jackson, Jefferson, Kanawha, Lewis, 
Lincoln, Logan, Marion, Mason, Mineral, Mingo, Monongalia, Monroe, 
Morgan, Nicholas, Pendleton, Pleasants, Pocahontas, Preston, Putnam, 
Raleigh, Randolph, Ritchie, Roane, Summers, Taylor, Tucker, Tyler, 
Upshur, Wayne, Webster, Wetzel, Wirt, Wood, and Wyoming.
    (iii) The market administrator may include additional counties from 
the states listed in paragraph (e)(1)(ii) of this section upon the 
request of a pool handler and provision of satisfactory proof that the 
county is a source of regular supply of milk to order distributing 
plants.
    (iv) Producer milk eligible for a payment under this section cannot 
be eligible for payment from the transportation credit balancing fund 
as specified in Sec.  1005.82(c)(2).
    (v) 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.
    (f) Credit computation. 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's county seat 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 paragraph (h) of this section;
    (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 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 paragraph (h) of this section;
    (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;

[[Page 6406]]

    (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) Mileage percentage rate adjustment. 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)(i) and (f)(2)(i) of this 
section to the actual miles used for computing distributing plant 
delivery 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) Oversight of milk movements. 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 demand 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 of 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.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

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

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


0
9. Amend Sec.  1006.30 by:
0
a. Redesignating paragraphs (a)(5) and (6) as paragraphs (a)(7) and 
(8), respectively;
0
b. Adding new paragraphs (a)(5) and (6); and
0
c. Adding paragraph (c)(3).
    The additions read as follows:


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
10. 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 and 1006.31 and paragraph (a) of this section, each handler 
shall report any information the market administrator deems necessary 
to verify or establish each handler's obligation under the order.

0
11. Add an undesignated center heading preceding the undesignated 
center heading ``Administrative Assessment and Marketing Service 
Deduction'' to read as follows: Marketwide Service Payments.

0
12. Add Sec.  1006.84 preceding the undesignated center heading 
``Administrative Assessment and Marketing Service Deduction'' to read 
as follows:


Sec.  1006.84  Distributing plant delivery credits.

    (a) 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 Sec.  
1005.84(b) of this chapter. 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 $0.85 or such lesser amount 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) Assessment rate announcement. 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 6407]]

    (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 as defined in Sec.  1006.7(c) or (d), 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 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) Eligible milk. 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, Dougherty, 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.
    (f) Credit computation. 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's county seat 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 paragraph (h) of this section;
    (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 paragraph (h) of this section;
    (iv) Subtract any positive difference in Class I prices computed in 
paragraph (f)(2)(ii) 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) Mileage percentage rate adjustment. 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

[[Page 6408]]

(f)(1)(i) and (f)(2)(i) to of this section the actual miles used for 
computing 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) Oversight of milk movements. 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 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.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

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

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


0
14. Amend Sec.  1007.30 by:
0
a. Redesignating paragraphs (a)(5) through (9) as paragraphs (a)(7) 
through (11), respectively;
0
b. Adding new paragraphs (a)(5) and (6);
0
c. Redesignating paragraph (c)(3) as paragraph (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) through (9) of this 
section.
* * * * *

0
15. Amend Sec.  1007.32 by revising paragraph (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) and any adjustments to transportation credit 
requests as reported pursuant to Sec.  1007.30(a)(7) through (9) of 
this part.
* * * * *

0
16. 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
17. Amend Sec.  1007.82 by:
0
a. Revising the first sentence of paragraph (a)(1), the first sentence 
of paragraph (b), and paragraph (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) 
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)(7), 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)(8), 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

[[Page 6409]]

adequate supply of milk for fluid use. * * *
* * * * *
    (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 
(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, (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 percentage points (10%) up to twenty-five percent (25%) or 
decrease it by as much as ten percentage points (10%), to a minimum of 
five percent (5%). Before making such a finding, the market 
administrator shall notify all handlers in the market that a revision 
is being considered and invite written data, comments, 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
18. 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;
    (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
19. Add Sec.  1007.84 before the undesignated center heading 
``Administrative Assessment and Marketing Service Deduction'' to read 
as follows:


Sec.  1007.84  Distributing plant delivery credits.

    (a) 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.  1007.44 by a per hundredweight 
assessment rate of $0.50 or such lesser amount 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) Assessment rate announcement. 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 as defined in Sec.  1007.7(c) or (d), 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 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) Eligible milk. Distributing plant delivery credits shall apply 
to the following milk:

[[Page 6410]]

    (1) Bulk unconcentrated fluid milk received directly from dairy 
farms at a pool distributing plant as producer milk subject to the 
following conditions:
    (i) The farm on which the milk was produced is located within the 
specified marketing areas of the order in this part or the marketing 
area of Federal Order 1005 (7 CFR part 1005).
    (ii) The farm on which the milk was produced is located in the 
following counties in the State of:
    (A) Illinois: Alexander, Bond, Clay, Clinton, Crawford, Edwards, 
Effingham, Fayette, Franklin, Gallatin, Hamilton, Hardin, Jackson, 
Jasper, Jefferson, Johnson, Lawrence, Marion, Massac, Monroe, 
Montgomery, Perry, Pope, Pulaski, Randolph, Richland, St Clair, Saline, 
Union, Washington, Wayne, White, Williamson, Calhoun, Greene, Jersey, 
Macoupin, Madison, and Wabash.
    (B) Kansas: Allen, Anderson, Bourbon, Chautauqua, Cherokee, Coffey, 
Crawford, Douglas, Elk, Franklin, Greenwood, Jefferson, Johnson, 
Labette, Leavenworth, Linn, Lyon, Miami, Montgomery, Neosho, Osage, 
Shawnee, Wabaunsee, Wilson, Woodson, and Wyandotte
    (C) Missouri: Audrain, Bates, Benton, Boone, Callaway, Camden, 
Cass, Clay, Cole, Cooper, Franklin, Gasconade, Henry, Hickory, Howard, 
Jackson, Jefferson, Johnson, Lafayette, Lincoln, Maries, Miller, 
Moniteau, Montgomery, Morgan, Osage, Pettis, Phelps, Pike, Platte, 
Pulaski, Ray, St Charles, St Clair, Ste Genevieve, St Louis, St. Louis 
City, Saline, and Warren
    (D) Oklahoma: Adair, Atoka, Bryan, Cherokee, Choctaw, Coal, Craig, 
Creek, Delaware, Haskell, Hughes, Latimer, Le Flore, McCurtain, 
Mcintosh, Mayes, Muskogee, Nowata, Okfuskee, Okmulgee, Osage, Ottawa, 
Pawnee, Pittsburg, Pushmataha, Rogers, Sequoyah, Tulsa, Wagoner, and 
Washington
    (E) Texas: Anderson, Angelina, Bowie, Camp, Cass, Chambers, 
Cherokee, Delta, Fannin, Franklin, Galveston, Gregg, Hardin, Harris, 
Harrison, Henderson, Hopkins, Houston, Hunt, Jasper, Jefferson, 
Kaufman, Lamar, Liberty, Marion, Montgomery, Morris, Nacogdoches, 
Newton, Orange, Panola, Polk, Rains, Red River, Rusk, Sabine, San 
Augustine, San Jacinto, Shelby, Smith, Titus, Trinity, Tyler, Upshur, 
Van Zandt, Walker, and Wood.
    (iii) The Market Administrator may include additional counties from 
the states listed in paragraph (e)(1)(ii) of this section upon the 
request of a pool handler and provision of satisfactory proof that the 
county is a source of regular supply of milk to order distributing 
plants.
    (iv) Producer milk eligible for a payment under this section cannot 
be eligible for payment from the transportation credit balancing fund 
as specified in Sec.  1007.82(c)(2).
    (v) 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.
    (f) Credit computation. 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's county seat 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 paragraph (h) of this section;
    (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 (95%) 
percent and not less than seventy-five (75%) percent;
    (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 paragraph (h) of this section;
    (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) Mileage percentage rate adjustment. 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) of this section to the 
actual miles used for computing distributing plant delivery 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) Oversight of milk movements. 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

[[Page 6411]]

evaluation the general supply and demand 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.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-01829 Filed 1-30-24; 8:45 am]
BILLING CODE 3410-02-P