SUPPLEMENTARY INFORMATION:

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires the Agency to examine the impact of a proposed rule on 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. Currently, there are approximately 225 fluid milk processors subject to the provisions of the Fluid Milk Promotion Order. The implementation of this rule will reduce the number of fluid milk processors subject to the Fluid Milk Promotion Order by 60. Most of these processors are considered small entities.

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 final rule amends certain order provisions in conformance with Section 1506 of the Farm Security and Rural Investment Act of 2002, Public Law 107-171d (2002 Farm Bill). The amendments modify the definition of fluid milk product to be consistent with the term as defined under Federal milk marketing orders ( i.e., Section 1000.15 of Title 7 CFR). The definition of fluid milk processor also is revised to increase the exemption standard from 500,000 pounds to 3,000,000 pounds of fluid milk products that are processed and marketed commercially in consumer-type packages in the 48 contiguous United States and the District of Columbia, excluding fluid milk products that are delivered directly to the residence of a consumer.

The amendments to the Order will not add any burden to regulated parties because they relate to provisions that define which fluid milk processors and fluid milk products will be assessed ( printed page 49858) under the Order. The changes will not impose additional reporting or collecting requirements. No relevant Federal rules have been identified that duplicate, overlap, or conflict with this rule.

Accordingly, pursuant to 5 U.S.C. 605(b), the Agricultural Marketing Service has certified that this rule will not have a significant economic impact on a substantial number of small entities. In fact, this rule will reduce the small entities affected by 60.

Executive Order 12866 and 12988

This final rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by OMB.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have a retroactive effect. This rule will 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, as amended, authorizes the Fluid Milk Promotion 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 a Fluid Milk Promotion 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.

Statement of Consideration

This document amends certain provisions of the Fluid Milk Promotion Order to conform with legislative changes of the recently enacted Farm Security and Rural Investment Act of 2002. Section 1506 of the Act amends sections 1999C, 1999C(4), and 1999O of the Fluid Milk Promotion Act of 1990, as amended, thereby necessitating revisions to certain provisions of the Fluid Milk Promotion Order. The 2002 Farm Bill also removed from the Fluid Milk Promotion Act the order termination date provision. The provision provided that the Order be terminated on December 31, 2002. This amendment does not require a change to the Order. The following order provisions are revised:

1. In § 1160.107, the term fluid milk product is redefined in conformance with the Act to provide the same definition that is specified in Federal milk marketing orders (7CRF 1000.15); and

2. In § 1160.108, the definition of fluid milk processor is modified to increase the exemption standard from 500,000 pounds to 3,000,000 pounds of fluid milk products processed and marketed commercially in consumer-type packages in the 48 contiguous States and the District of Columbia, excluding fluid milk products delivered to the residence of consumers. Accordingly, those fluid milk processors who process and market commercially more than 3,000,000 pounds of such fluid milk products per month shall pay the mandatory 20-cent per hundredweight assessment on all fluid milk products marketed.

This action is necessary to conform the Order to provisions in the Farm Security and Rural Investment Act of 2002. The amendments are made final in this action as provided in Section 1601 of the Act, and for the same reason, good cause exists for making this rule effective on August 1, 2002. To do otherwise would be impracticable, unnecessary, and contrary to the public interest.

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

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

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

2. Section 1160.107 is revised to read as follows:

3. In § 1160.108, paragraphs (b) and (c), the number “500,000” is revised to read “3,000,000” and paragraph (a) is revised to read as follows: