05-5814. Fluid Milk Promotion Order

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Final rule.

SUMMARY:

This final rule amends the Fluid Milk Promotion Order (Order) by modifying the terms of membership of the Fluid Milk Promotion Board (Board). The amendment requires that any change in a fluid milk processor member's employer or change in ownership of the fluid milk processor who the member represents would disqualify that member. The member would continue to serve on the Board for a period of up to six months until a successor was appointed. In addition, a public member to the Board who changes employment, gains employment with a new employer, or ceases to continue in the same business would be disqualified in a manner similar to a fluid milk processor member. The amendments ensure that the Board is able to equitably represent fluid milk processing constituents and the public interest through the National Fluid Milk Processor Promotion Program.

EFFECTIVE DATE:

May 1, 2005.

FOR FURTHER INFORMATION CONTACT:

David R. Jamison, USDA/AMS/Dairy Programs, Promotion and Research Branch, Stop 0233—Room 2958-S, 1400 Independence Avenue, SW., Washington, DC 20250-0233, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

This final rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB).

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform and is not intended to have a retroactive effect. This final rule would not preempt any State or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule.

The Fluid Milk Promotion Act of 1990 (Act), as amended, authorizes the Order. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 1999K of the Act, any person subject to the Order may file with the Secretary a petition stating that the Order, any provision of the Order, or any obligation imposed in connection with the Order is not in accordance with the law and request a modification of the Order or to be exempted from the Order. A person subject to an Order is afforded the opportunity for a hearing on the petition. After a hearing, the Secretary would rule on the petition. The Act provides that the district court of the United States in any district in which the person is an inhabitant, or has his principal place of business, has jurisdiction to review the Secretary's ruling on the petition, provided a complaint is filed not later than 20 days after the date of the entry of the ruling.

Regulatory Flexibility Act and Paperwork Reduction Act

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities and has certified that this final rule will not have a significant economic impact on a substantial number of small entities. Small businesses in the fluid milk processing industry have been defined by the Small Business Administration as those processors employing not more than 500 employees. For purposes of determining a processor's size, if the plant is part of a larger company operating multiple plants that collectively exceed the 500-employee limit, the plant will be considered a large business even if the local plant has fewer than 500 employees. As of February 2005, there were approximately 100 fluid milk processors subject to the provisions of the Order. Most of these processors are considered small entities. The implementation of this rule will not affect the number of fluid milk processors subject to the Order.

The Fluid Milk Promotion Order (7 CFR part 1160) is authorized under the Fluid Milk Promotion Act of 1990 (Act) (7 U.S.C. 6401 et seq.). The Order provides for a 20-member Board with 15 members representing geographic regions and five at-large members. To the extent practicable, members representing geographic regions should represent processing operations of differing sizes. No fluid milk processor shall be represented on the Board by more than three members. The at-large members shall include at least three fluid milk processors and at least one member from the general public.

The amendment to the membership provisions requires that any change in a fluid milk processor member's employer or change in ownership of the fluid milk processor who the member represents would disqualify that member. The member would continue to serve on the Board for a period of up to six months until a successor was appointed. In addition, a public member to the Board who changes employment or ceases to continue in the same business would be disqualified in a manner similar to a fluid milk processor member. These changes address (1) potential movement of members from one fluid milk processor to another fluid milk processor or any other change in company affiliation; and (2) changes in affiliation of at-large public members.

The amendments ensure that the Board is able to equitably represent fluid milk processing constituents and the public interest through the National Fluid Milk Processor Promotion Program.

The amendment to the Order should not add any additional burden to regulated parties because it relates only to provisions concerning Board membership. Accordingly, the amendment will 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 this amendment would have no impact on reporting, recordkeeping, or other compliance requirements because they would remain the same to the current requirements. No new forms are proposed and no additional reporting requirements would be necessary.

This notice 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, the 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.

Statement of Consideration

This document amends the membership provisions of the Order by modifying the terms of membership to the Board. Section 1160.200 of the Order sets out the criteria for the Secretary to appoint members to the Board where 15 members represent geographic regions and 5 are at-large members of the Board. The Board proposed these amendments to address (1) potential movement of members from one fluid milk processor to another fluid milk processor; and (2) changes in affiliation of at-large public members.

The fluid milk industry is a dynamic marketplace where mergers and other purchase activities are commonplace. As a result, there have already been circumstances where members representing a fluid milk processor have been subject to employment or ownership changes due to such mergers and other purchase activities. Consequently, any change in a fluid milk processor member's employer or change in ownership of the fluid milk processor who the member represents should be subject to further examination. Accordingly, any change in employment or ownership should disqualify any member. The member would continue to serve on the Board for a period of up to six months until a successor was appointed.

At-large public members appointed by the Secretary should be subject to the same criteria for disqualification as processor representatives serving on the Board. Pursuant to the Order, the Secretary may appoint up to two members from the general public. Since the Board is comprised of only 20 members, these at-large public representatives play an important role in guiding the Board's operations. Normally, these members have a high level of expertise in a certain area and provide an invaluable perspective in the Board's deliberations and changes in a public member's affiliation should be treated similarly to processor members. Thus, a public member who changes employment or ceases to continue in the business that the public member was operating when appointed to the Board will be disqualified in a manner similar to a fluid milk processor member. This provides the Secretary with the ability to appoint a new public member should the circumstances warrant a change in representation.

The amendments ensure that the Board is able to equitably represent fluid milk processing constituents and the public interest through the National Fluid Milk Processor Promotion Program.

One comment was received in response to the proposed amendment. The comment did not address the amendment that was under consideration.

List of Subjects in 7 CFR Part 1160

• Fluid milk
• Milk
• Promotion

For the reasons set forth in the preamble, 7 CFR part 1160 is amended as follows:

PART 1160—FLUID MILK PROMOTION PROGRAM

1. The authority citation for 7 CFR Part 1160 continues to read as follows:

Authority: 7 U.S.C. 6401-6417.

2. In § 1160.200, paragraph (a) is revised to read as follows:

§ 1160.200

Establishment and membership.

(a) There is hereby established a National Fluid Milk Processor Promotion Board of 20 members, 15 of whom shall represent geographic regions and five of whom shall be at-large members of the Board. To the extent practicable, members representing geographic regions shall represent fluid milk processing operations of differing sizes. No fluid milk processor shall be represented on the Board by more than three members. The at-large members shall include at least three fluid milk processors and at least one member from the general public. Except for the non-processor member or members from the general public, nominees appointed to the Board must be active owners or employees of a fluid milk processor. The failure of such a member to own or work for such fluid milk processor shall disqualify that member for membership on the Board except that such member shall continue to serve on the Board for a period not to exceed 6 months following the disqualification or until appointment of a successor Board member to such position, whichever is sooner, provided that such person continues to meet the criteria for serving on the Board as a processor representative. Should a member representing the general public cease to be employed by the entity employing that member when appointed, gain employment with a new employer, or cease to own or operate the business which that member owned or operated at the date of appointment, such member shall be disqualified for membership on the Board, except that such member shall continue to serve on the Board for a period not to exceed 6 months, or until appointment of a successor Board member, whichever is sooner.

* * * * *

Dated: March 18, 2005.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing Service.