2. Technical Regulation

    As described in the discussion on the potential impact of price
regulation on the wholesale market, the Commission is most concerned
that the price regulation established under this rule not cause market
distortion. The Commission concludes that the technical regulation will
avoid any such distortions.
    The Commission's regulation is uniform and equitable, and will have
a neutral impact on existing markets and marketing channels, other than
operation of the regulated price. Assurance of this neutral impact
promotes the public interest by preventing adverse consequences
attributable to market distortions. The Commission has taken the
following steps to insure the protection of the

[[Page 23055]]

public interest in this manner by carefully considering the following
issues:
    1. Proper construct of the definition of pool plants  and partially
regulated plants subject to regulation of the Compact. A pool plant is
defined under Section 2(6) as any milk plant located in a regulated
area. A partially regulated plant is defined in Section 2(7) as a milk
plant not located in a regulated area but having Class I distribution
within such area, or receipts from producers located in such area.
Section 2(5) defines a regulated area as any area within the region
governed by and defined in regulations establishing a compact over-
order price or commission market order. Section 9(d) of the Compact
establishes the Commission's authority to establish the minimum price
for milk to be paid by pool plants, partially regulated pool plants and
all other handlers receiving milk from producers located in a regulated
area.\121\
---------------------------------------------------------------------------

    \121\ One commenter, in effect, challenged the Commission's
authority to rely upon the provision in Sec. 9(d) of the Compact
which permits the Commission to regulate such ``partially regulated
pool plants.'' Vetne, 3/31/97 AC. The Commission disagrees with this
legal conclusion of the commenter.
---------------------------------------------------------------------------

    2. Assuring that that Class I sales outside the New England region
made by new England based plants or pool plants, are not subject to the
regulation, through the use of the so-called ``competitive credits''
authorized by Section 10(4) of the Compact.
    3. Providing for equitable distributions to producers shipping to
pool plants and partially regulated plants. See Compact Section
9(d).\122\
---------------------------------------------------------------------------

    \122\ One commenter indicated the Commission should include all
producers supplying partially regulated plants, without regard to
the relative volume of milk sales by such plants in the Compact
region. Marcus, 12/19/96 HT at 92. The Commission concludes that
this approach would cause undue distortion of the outside markets,
and declines to adopt it.
---------------------------------------------------------------------------

    4. Assuring the regulation does not disrupt the traditional pattern
of raw product supply from New England and New York, and the existing
market supply of packaged milk products. These issues are addressed
comprehensively throughout the technical regulation.
    5. Assuring complimentary operation of the Compact with the Federal
Milk Market Order Program. The Compact's Statement of Purpose expressly
declares this purpose. The technical regulation is expressly based on
this principle. The Commission will also be utilizing the assistance of
the Milk Market Administrator on an ongoing basis, as authorized by 7
U.S.C. Sec. 7256(6), to ensure such efficient operation.\123\
---------------------------------------------------------------------------

    \123\ One commenter described the need for a butterfat
adjustment in the regulation. Vetne, 3/31/97 AC. This necessary
adjustment is already provided for and established in the structure
of the underlying federal Order.
---------------------------------------------------------------------------

    Finally, the Compact Commission notes that one commenter argued
that the Commission should regulate all classes of milk and not just
Class I fluid milk (HT 177 12/19 Turner). The Commission's authority,
however, is expressly limited by statute and by the Compact to the
regulation of Class I fluid milk. See 7 U.S.C. Sec. 7256(2); Compact,
Art. IV, Sec. 9(b).

IV. Administrative Assessment

    Article VII, Sec. 18(a) of the Compact provides that:

    if regulations establishing an over-order price * * * are
adopted, they may include an assessment for the specific purpose of
their administration. These regulations shall provide for
establishment of a reserve for the Commission's ongoing operating
expenses.

    In accordance with this section, the Commission determined that
this regulation will cost $400,000 to administer for its six month
duration. Based on a projected total utilization of 1.25 billion pounds
of Class I milk in the Compact region during this period, an assessment
in the amount of $0.032 per cwt will be imposed. The funds will be held
in an operating expense reserve account.

V. Required Findings of Fact

    Pursuant to Compact Art. V. Sec. 12, the Compact Commission hereby
finds:
    (1) That the public interest will be served by the establishment of
minimum milk prices to dairy farmers under Article IV.
    (2) That, for purposes of this initial regulation, a level of price
in the amount of $16.94 will assure that producers receive a price
sufficient to cover their costs of production and will elicit an
adequate supply of milk for the inhabitants of the regulated area and
for manufacturing purposes.
    (3) That the major provisions of the order, other than those fixing
minimum milk prices, are in the public interest and are reasonably
designed to achieve the purposes of the order.\124\
---------------------------------------------------------------------------

    \124\ Whether the terms of the proposed regional order are
approved by producers as provided in section thirteen, as required
by finding 4 of this section, is contingent on final action by the
Commission and the consequent conduct of a referendum.
---------------------------------------------------------------------------

List of Subjects in 7 CFR Parts 1300, 1301, 1303, 1304, 1305, 1306
and 1307

    Milk.

    For the reasons set forth in the preamble, the Commission
establishes in title 7 of the Code of Federal Regulations a new chapter
XIII to read as follows:

CHAPTER XIII--NORTHEAST DAIRY COMPACT COMMISSION

Part

1300  Over-order price.
1301  Definitions.
1303  Handlers reports.
1304  Classification of milk.
1305  Class price.
1306  Compact over-order producer price.
1307  Payments for milk.
1308  Commission assessment.

PART 1300--OVER-ORDER PRICE REGULATIONS

Sec.
1300.1  Compact Commission.
1300.2  Continuity and separability of provisions.
1300.3  Handler responsibility for records and facilities.
1300.4  Termination of obligation.

    Authority: 7 U.S.C. 7256.


Sec. 1300.1  Compact Commission.

    (a) Designation. The agency for the administration of the Pricing
Regulation shall be the compact commission.
    (b) Powers. The compact commission shall have the following powers:
    (1) Administer the pricing regulation in accordance with its terms
and provisions;
    (2) Make rules and regulations to effectuate the terms and
provisions of the pricing regulation;
    (3) Receive and investigate complaints of violations;
    (4) Recommend amendments.
    (c) Duties: The compact commission shall perform all the duties
necessary to administer the terms and provisions of the pricing
regulation, including, but not limited to the following:
    (1) Employ and fix the compensation of persons necessary to enable
them to exercise their powers and perform their duties:
    (2) Pay out of funds provided by the administrative assessment all
expenses necessarily incurred in the maintenance and functioning of
their office and in the performance of their duties;
    (3) Keep records which will clearly reflect the transactions
provided for in the pricing regulation;
    (4) Announce publicly at their discretion, by such means as they
deem appropriate, the name of any handler who, after the date upon
which he is required to perform such act, has not:
    (i) Made reports required by the pricing regulation;
    (ii) Made payments required by the pricing regulation; or

[[Page 23056]]

    (iii) Made available records and facilities as required pursuant to
Sec. 1300.3;
    (5) Prescribe reports required of each handler under the pricing
regulation. Verify such reports and the payments required by the
pricing regulation by examining records (including such papers as
copies of income tax reports, fiscal and product accounts,
correspondence, contracts, documents or memoranda, of the handler, and
the records of any other person that are relevant to the handler's
obligation under the pricing regulation, by examining such handler's
milk handling facilities; and by such other investigation as the
compact commission deems necessary for the purpose of ascertaining the
correctness of any report or any obligation under the pricing
regulation. Reclassify fluid milk product received by any handler if
such examination and investigation discloses that the original
classification was incorrect;
    (6) Furnish each regulated handler a written statement of such
handler's accounts with the compact commission promptly each month.
Furnish a corrected statement to such handler if verification discloses
that the original statement was incorrect; and
    (7) Prepare and disseminate publicly for the benefit of producers,
handlers, and consumers such statistics and other information covering
operation of the pricing regulation and facts relevant to the
provisions thereof (or proposed provisions) as do not reveal
confidential information.


Sec. 1300.2  Continuity and separability of provisions.

    (a) Effective time. The provisions of this pricing regulation or
any amendment to the pricing regulation shall become effective at such
time as the compact commission may declare and shall continue in force
until suspended or terminated.
    (b) Suspension or termination. The compact commission shall suspend
or terminate any or all of the provisions of the pricing regulation
whenever they find that such provision(s) obstructs or does not tend to
effectuate the declared policy of the compact. The pricing regulation
shall terminate whenever the provisions of the compact authorizing it
cease to be in effect.
    (c) Continuing obligations. If upon the suspension or termination
of any or all of the provisions of the pricing regulation there are any
obligations arising under the pricing regulation, the final accrual or
ascertainment of which requires acts by any handler, by the compact
commission, or by any other person, the power and duty to perform such
further acts shall continue notwithstanding such suspensions or
termination.


Sec. 1300.3  Handler responsibility for records and facilities.

    Each handler shall maintain and retain records of his operations
and make such records and his facilities available to the compact
commission. If adequate records of a handler, or of any other person,
that are relevant to the obligation of such handler are not maintained
and made available, any fluid milk product required to be reported by
such handler for which adequate records are not available shall not be
considered accounted for or established as used in a class other than
the highest price class.
    (a) Records to be maintained. (1) Each handler shall maintain
records of his operations (including, but not limited to, records of
purchases, sales, processing, packaging and disposition) as are
necessary to verify whether such handler has any obligation under the
pricing regulation and if so, the amount of such obligation. Such
records shall be such as to establish for each plant or other receiving
point for each month:
    (i) The quantities of fluid milk product contained in, or
represented by, products received in any form, including inventories on
hand at the beginning of the month, according to form, time and source
of each receipt;
    (ii) The utilization of all fluid milk product showing the
respective quantities of such fluid milk product in each form disposed
of or on hand at the end of the month; and
    (iii) Payments to producers, dairy farmers and cooperative
associations, including the amount and nature of any deductions and the
disbursement of money so deducted.
    (2) Each handler shall keep such other specific records as the
compact commission deems necessary to verify or establish such
handler's obligation under the pricing regulation.
    (b) Availability of records and facilities. Each handler shall make
available all records pertaining to such handler's operation and all
facilities the compact commission finds are necessary to verify the
information required to be reported by the pricing regulation and/or to
ascertain such handler's reporting, monetary or other obligation under
the pricing regulation. Each handler shall permit the compact
commission to observe plant operations and equipment and make available
to the compact commission such facilities as are necessary to carry out
their duties.
    (c) Retention of records. All records required under the pricing
regulation to be made available to the compact commission shall be
retained by the handler for a period of three years to begin at the end
of the month to which such records pertain. If, within such a three
year period, the compact commission notifies the handler in writing
that the retention of such records, or of specified records, is
necessary in connection with a proceeding or court action specified in
such notice, the handler shall retain such records, or specified
records, until further written notification from the compact
commission. The compact commission shall give further written
notification to the handler promptly upon the termination of the
litigation or when the records are no longer necessary in connection
therewith.


Sec. 1300.4  Termination of Obligation.

    The provision of this section shall apply to any obligation under
the pricing regulation for the payment of money:
    (a) Except as provided in paragraphs (b) and (c) of this section,
the obligation of any handler to pay money required to be paid under
the terms of the pricing regulation shall terminate two years after the
last day of the month during which the compact commission receives the
handler's report of receipts and utilization on which such obligation
is based, unless within such a two year period, the compact commission
notifies the handler in writing that such money is due and payable.
Service of such written notice shall be complete upon mailing to the
handler's last known address and it shall contain but need not be
limited to the following information:
    (1) The amount of the obligation;
    (2) The month(s) on which such obligation is based; and
    (3) If the obligation is payable to one or more producers or to a
cooperative association, the name of such producer(s) or such
cooperative association, or if the obligation is payable to the compact
commission, the account for which it is to be paid;
    (b) If a handler fails or refuses, with respect to any obligation
under the pricing regulation, to make available to the compact
commission all records required by the pricing regulation to be made
available, the compact commission may notify the handler in writing,
within the two year period provided for in paragraph (a) of this
section, of such failure or refusal. If the compact commission so
notifies a handler, the said two year period with respect to such
obligation shall not

[[Page 23057]]

begin to run until the first day of the month following the month
during which all such records pertaining to such obligation are made
available to the compact commission;
    (c) Notwithstanding the provisions of paragraphs (a) and (b) of
this section, a handler's obligation under the pricing regulation to
pay money shall not be terminated with respect to any transaction
involving fraud or willful concealment of a fact, material to the
obligation, on the part of the handler against whom the obligation is
sought to be imposed; and
    (d) Unless the handler files a petition to the compact commission
to commence litigation within the applicable two year period indicated
below, the obligation of the compact commission:
    (1) To pay a handler any money which such handler claims to be due
him under the terms of the pricing regulation shall terminate two years
after the end of the month during which the fluid milk product involved
in the claim were received; or
    (2) To refund any payment made by a handler (including a deduction
or offset by the compact commission) shall terminate two years after
the end of the month during which payment was made by the handler.

PART 1301--DEFINITIONS

Sec.
1301.1  Compact.
1301.2  Commission.
1301.3  Northeast Dairy Compact Regulated Area.
1301.4  Plant.
1301.5  Pool plant.
1301.6  Partially regulated plant.
1301.7  Non pool plant.
1301.8  Milk.
1301.9  Handler.
1301.10  Producer-handler.
1301.11  Producer.
1301.12  Producer milk.
1301.13  Exempt milk.
1301.14  Fluid milk product.
1301.15  Fluid cream product.
1301.16  Filled milk.
1301.17  Cooperative association.
1301.18  Person.
1301.19  Route disposition.
1301.20  Distributing plant.
1301.21  Supply plant.
1301.22  State dairy regulation.
1301.23  Diverted milk.

    Authority: 7 U.S.C. 7256.


Sec. 1301.1 Compact.

    Compact means the Northeast Dairy Compact as approved by section
147 of the Federal Agriculture Improvement and Reform Act (Fair Act),
Pub. L. 104-127.


Sec. 1301.2  Commission.

    Commission means the commission established by the Northeast Dairy
Compact.


Sec. 1301.3  Northeast Dairy Compact Regulated Area.

    Northeast Dairy Compact Regulated Area hereinafter called the
Regulated Area means all territory within the boundaries of the states
of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and
Vermont. All waterfront facilities connected therewith and craft moored
thereat, and all territory therein occupied by any governmental
installation, institution, or other similar establishment.


Sec. 1301.4  Plant.

    Plant means the land and buildings, together with their
surroundings, facilities and equipment, whether owned or operated by
one or more persons, constituting a single operating unit or
establishment for the receiving, processing or packaging of milk or
milk products. The term plant shall not include:
    (a) Distribution points (separate premises used primarily for the
transfer to vehicles of packaged fluid milk products moved there from
processing and packaging plants); or
    (b) Bulk reload points (separate premises used for the purpose of
transferring bulk milk from one tank truck to another tank truck while
en route from dairy farmers' farms to a plant). If stationary storage
tanks are used for transferring milk at the premises, the operator of
the facility shall make an advance written request to the compact
commission that the facility be treated as a reload point; otherwise it
shall be a plant. The cooling of milk, collection or testing of
samples, and washing and sanitizing of tank trucks at the premises
shall not disqualify it as a bulk reload point.


Sec. 1301.5  Pool Plant.

    Pool Plant means any milk plant located in the regulated area.


Sec. 1301.6  Partially Regulated Plant.

    Partially Regulated Plant means a milk plant not located in the
regulated area but having Class I distribution in the regulated area,
or receipts from producers located in the regulated area.


Sec. 1301.7  Non Pool Plant.

    Non Pool Plant means any milk plant that is not a pool plant
pursuant to section 1301.5 and not a partially regulated plant pursuant
to section 1301.6.


Sec. 1301.8  Milk.

    Milk means the lacteal secretion of cows and includes all skim,
butterfat, or other constituents obtained from separation of any other
process and as defined pursuant to prevailing standards of identity.


Sec. 1301.9  Handler.

    Handler means:
    (a) Any person, except a producer-handler, who operates a pool
plant;
    (b) Any person who operates a partially regulated plant;
    (c) Any person who operates any other plant, or a pool bulk tank
unit as defined under the Federal order, from which fluid milk products
are disposed of, directly or indirectly, in the regulated area;
    (d) Any cooperative association with respect to the milk that is
moved from farms in tank trucks operated by, or under contract to, the
association to pool plants or as diverted milk to non pool plants for
the account of, and at the direction of, the association. The
association shall be considered as the handler who received the milk
from the dairy farmers. However, the cooperative association shall not
be the handler with respect to the milk moved from any farm if the
association and the operator of the pool plant to which milk from such
farm is moved both submit a request in writing, on or before the due
date for filing the monthly reports of receipts and utilization, that
the operator of the pool plant be considered as the handler who
received the milk from the dairy farmer, and the pool plant operator's
request states that the pool plant operator is purchasing the milk from
such farm on the basis of the farm bulk tank measurement readings and
the butterfat tests of samples of the milk taken from the farm bulk
tank; or
    (e) Any person who does not operate a plant but who engages in the
business of receiving fluid milk products for resale and distributes to
retail or wholesale outlets packaged fluid milk products received from
any plant described in paragraph (a), (b) or (c) of this section.


Sec. 1301.10  Producer-handler.

    Producer-handler means any person who, during the month is both a
dairy farmer and a handler and who meets all of the following
conditions:
    (a) Provides as the person's own enterprise and at the person's own
risk the maintenance, care, and management of the dairy herd and other
resources and facilities that are used to produce milk, to process and
package such milk at the producer-handler's own plant, and to
distribute it as route disposition.

[[Page 23058]]

    (b) The person's own route disposition constitutes the majority of
the route disposition from the plant.
    (c) The producer-handler receives no fluid milk products except
from such handler's own production and from pool handlers, either by
transfer of diversion.


Sec. 1301.11  Producer.

    Producer means:
    (a) A dairy farmer who produces milk in the regulated area that is
moved to a pool plant or a partially regulated plant, having Class I
distribution in the regulated area,
    (b) A dairy farmer who produces milk outside of the regulated area
that is moved to a pool plant provided that dairy farmer milk was moved
to a plant located in the regulated area during December 1996. Provided
further: to be considered a qualified producer, milk from the dairy
farmer's farm must move to a pool plant during the current month and
must have been moved to a pool plant for five (5) months subsequent to
July of the preceding calendar year;
    (c) A dairy farmer who produces milk outside of the regulated area
that is moved to a partially regulated plant and allocated to Class I
pursuant to Sec. 1304.5. However, the term shall not include:
    (1) A producer handler;
    (2) A dairy farmer who is a local or state government that has non-
producer status for the month under Sec. 1301.13(c);
    (3) A dairy farmer who is a governmental agency that is operating a
plant from which there is route disposition in the regulated area;
    (4) Dairy farmer milk received at a pool plant or a partially
regulated plant which is rejected and segregated in the handler's
normal operations for receiving milk and which receipts are accepted
and disposed of by the handler as salvaged product rather than milk.


Sec. 1301.12  Producer milk.

    Producer milk means milk that the handler has received from
producers. The quantity of milk received by a handler from producers
shall include any milk of a producer that was not received at any plant
but which the handler or an agent of the handler has accepted,
measured, sampled, and transferred from the producer's farm tank into a
tank truck during the month. Such milk shall be considered as having
been received at the pool plant at which other milk from the same farm
of that producer is received by the handler during the month, except
that in the case of a cooperative association in its capacity as a
handler under Sec. 1301.9(d), the milk shall be considered as having
been received at a plant in the zone location of the pool plant, or
pool plants within the same zone, to which the greatest aggregate
quantity of the milk of the cooperative association in such capacity
was moved during the current month or the most recent month.


Sec. 1301.13  Exempt milk.

    Exempt milk means:
    (a) Fluid milk products received at a pool plant in bulk from a non
pool plant to be processed and packaged, for which an equivalent
quantity of package fluid milk products is returned to the operator of
the non pool plant during the same month, if the receipt of bulk fluid
milk products and return of packaged fluid milk products occur during
an interval in which the facilities of the non pool plant at which the
fluid milk products are usually processed and packaged are temporarily
unusable because of fire, flood, storm or similar extraordinary
circumstances completely beyond the non pool plant operator's control;
    (b) Packaged fluid milk products received at a pool plant from a
non pool plant in return for an equivalent quantity of bulk fluid milk
products moved from a pool plant for processing and packaging during
the same month, if the movement of bulk fluid milk products and receipt
of package fluid milk products occur during an interval in which the
facilities of the pool plant at which the fluid milk products are
usually processed and packaged are temporarily unusable because of
fire, flood, storm, or similar extraordinary circumstances completely
beyond the pool plant operator's control;
    (c) Milk received at a pool plant in bulk from the dairy farmer who
produced it, to the extent of the quantity of any packaged fluid milk
products returned to the dairy farmer, if:
    (1) The dairy farmer is a State or local government that is not
engaged in the route disposition of any of the returned products, and
    (2) The dairy farmer has by written notice to the compact
commission and the receiving handler, elected non-producer status for a
period of not less than 12 months beginning with the month in which the
election was made and continuing for each subsequent month until
canceled in writing, and the election is in effect for the current
month.
    (d) All fluid milk product disposed outside of the regulated area.


Sec. 1301.14  Fluid milk product.

    (a) Except as provided in paragraph (b) of this section fluid milk
product means any milk products in fluid or frozen form containing less
than nine percent butterfat, that are in bulk or are packaged,
distributed and intended to be used as beverages. Such products
include, but are not limited to: Milk, skim milk, low fat milk, milk
drinks, buttermilk, and filled milk, including any such beverage
products that are flavored, culture, modified with added nonfat milk
solids, sterilized, concentrated (to not more than 50 percent total
milk solids), or reconstituted.
    (b) The term fluid milk product shall not include:
    (1) Plain or sweetened evaporated milk, plain or sweetened
evaporated skim milk, sweetened condensed milk or skim milk, formulas
especially prepared for infant feeding or dietary use that are packaged
in hermetically sealed containers, any product that contains by weight
less than 6.5 percent nonfat milk solids, and whey; and
    (2) The quantity of skim milk in any modified product specified in
paragraph (a) of this section that is in excess of the quantity of skim
milk in an equal volume of an unmodified product of the same nature and
butterfat content.


Sec. 1301.15  Fluid cream product.

    Fluid cream product means cream (other than plastic cream or frozen
cream), including sterilized cream, or a mixture of cream and milk or
skim milk containing nine percent or more butterfat, with or without
the addition of other ingredients.


Sec. 1301.16  Filled milk.

    Filled milk means any combination of nonmilk fat (or oil) with
skimmed milk (whether fresh, cultured, reconstituted, or modified by
the addition of nonfat milk solids), with or without milk fat, so that
the product (including stabilizers, emulsifiers, or flavoring)
resembles milk or any other fluid milk product, and contains less than
six percent nonmilk fat (or oil).


Sec. 1301.17  Cooperative association.

    Cooperative association means any cooperative marketing association
of producers which the Secretary of Agriculture of the United States
determines:
    (a) To be qualified under the provisions of the Act of Congress of
February 18, 1922, known as the ``Capper-Volstead Act'';
    (b) To have full authority in the sale of milk of its members; and
    (c) To be engaged in making collective sales of, or marketing milk
or its products for its members.

[[Page 23059]]

Sec. 1301.18  Person.

    Person means individual, partnership, corporation, association, or
other business unit.


Sec. 1301.19  Route disposition.

    Route disposition means distribution of Class I milk by a handler
to retail or wholesale outlets, which include vending machines but do
not include plants or distribution points. The route disposition of a
handler shall be attributed to the processing and packaging plant from
which the Class I milk is moved to retail or wholesale outlets without
intermediate movement to another processing and packaging plant.


Sec. 1301.20  Distributing plant.

    Distributing plant means a processing and packaging plant.


Sec. 1301.21  Supply plant.

    Supply plant means a plant at which facilities are maintained and
used for washing and sanitizing cans and to which milk is moved from
dairy farmers' farms in cans and is there accepted, weighed or
measured, sampled, and cooled, or it is a plant to which milk is moved
from dairy farmers' farms in tank trucks.


Sec. 1301.22  State dairy regulation.

    State dairy regulation means any state regulation of dairy prices,
and associated assessments, whether by statute, marketing order or
otherwise.


Sec. 1301.23  Diverted milk.

    Diverted milk means milk, other than that excluded under
Sec. 1301.11 from being considered as received from a producer, that
meets the conditions set forth in paragraph (a) or (b) of this section
and is not excluded from diverted milk under paragraph (c) of this
section.
    (a) Milk that a handler in its capacity as the operator of a pool
plant reports as having been moved from a dairy farmer's farm to the
pool plant, but which the handler caused to be moved from the farm to
another plant, if the handler specifically reports such movement to the
other plant as a movement of diverted milk, and the conditions of
paragraph (a) (1) or (2) of this section have been met. Milk that is
diverted milk under this paragraph shall be considered to have been
received at the pool plant from which it was diverted.
    (1) During any two (2) months subsequent to July of the preceding
calendar year, or during the current month, on more than half of the
days on which the handler caused milk to be moved from the dairy
farmer's farm during the month, all of the milk that the handler caused
to be moved from that farm was physically received as producer milk at
the handler's pool plant or at another of the handler's pool plants
that is not longer operated as a plant.
    (2) During the current month and not more than five (5) other
months subsequent to July of the preceding calendar year, milk from the
dairy farmer's farm was received at or diverted from the handler's pool
plant as producer milk, and during the current month all of the milk
from that farm that the handler reported as diverted milk was moved
from the farm in a tank truck in which it was intermingled with milk
from other farms, the milk from a majority of which farms was diverted
from the same pool plant in accordance with the preceding provisions of
this paragraph.
    (b) Milk that a cooperative association in its capacity as a
handler under Sec. 1301.9(d) caused to be moved from a dairy farmer's
farm to a partially regulated plant if the association specifically
reports the movement to such plant as a movement of diverted milk, and
the conditions of paragraph (b) (1) and (2) of this section have been
met. Milk that is diverted under this paragraph shall be considered to
have been received by the cooperative association in its capacity as a
handler under Sec. 1301.9(d).
    (1) During any two (2) months subsequent to July of the preceding
calendar year, or during the current month, on more than half of the
days on which the cooperative association in its capacity as a handler
under Sec. 1301.9(d) caused milk to be moved from the farm as producer
milk during the month, all of the milk that the association cause to be
move from the farm was physically received at a pool plant.
    (2) During the current month and not more than five (5) other
months subsequent to July of the preceding calendar year, the
cooperative association in its capacity as a handler under
Sec. 1301.9(d) caused milk to be moved from the dairy farmer's farm as
producer milk, and during the current month all of the milk from that
farm that the cooperative association in its capacity as a handler
under Sec. 1301.9(d) reported as diverted milk was moved from the farm
in a tank truck in which it was intermingled with milk from other
farms, the milk from a majority of which farms was diverted by the
association in accordance with the preceding provisions of this
paragraph.
    (c) Milk moved, as described in paragraphs (a) and (b) of this
section, from dairy farmer's farms to partially regulated plants in
excess of 35 percent in the months of September through November and 45
percent in other months, of the total quantity of producer milk
received (including diversions) by the handler during the month shall
not be diverted milk. Such milk, and any other milk reported as
diverted milk that fails to meet the requirements set forth in this
section, shall be considered as having been moved directly from the
diary farmers' farms to the plant of physical receipt, and if that
plant is a nonpool plant the milk shall be excluded from producer milk.

PART 1303--HANDLERS REPORTS

Sec.
1303.1  Reports of receipts and utilization.
1303.2  Other reports of receipts and utilization.
1303.3  Reports regarding individual producers and dairy farmers.
1303.4  Notices to producers.

    Authority: 7 U.S.C. 7256.


Sec. 1303.1  Reports of receipts and utilization.

    On or before the eighth day after the end of each month, each
handler shall report for such month to the compact commission, in the
detail and on the forms prescribed by the compact commission as
follows:
    (a) Each handler, with respect to each of the handler's pool plants
shall report the quantities of fluid milk products contained in or
represented by:
    (1) Receipts of producer milk (including the specific quantities of
diverted milk and receipts from the handler's own production);
    (2) Receipts of milk from cooperative association in their capacity
as handlers under Sec. 1301.9(d);
    (3) Receipts of fluid milk products from other pool plants;
    (4) Receipts of fluid milk products from partially regulated
plants;
    (5) Inventories at the beginning and end of the month of fluid milk
products;
    (6) All Class I utilization or disposition of milk, filled milk,
and milk products required to be reported pursuant to this paragraph.
    (b) Each handler operating a partially regulated plant shall report
with respect to such plant in the same manner as prescribed for reports
required by paragraph (a) of this section. Receipts of milk that would
have been producer milk if the plant had been fully regulated shall be
reported in lieu of producer milk.
    (c) Each handler described in Sec. 1301.9(d) shall report:
    (1) The quantities of all fluid milk product contained in receipts
of milk from producers; and

[[Page 23060]]

    (2) The utilization or disposition of all such receipts.
    (d) Each handler shall report bulk milk received at a handler's
pool plant from a cooperative association in its capacity as the
operator of a pool plant or as a handler under Sec. 1301.9(d), if such
milk was rejected by the handler subsequent to such handler's receipt
of the milk on the basis that it was not of marketable quality at the
time the milk was delivered to the handler's plant, and such milk was
removed from the plant in bulk form by the cooperative association and
was replaced in the other milk from the association. Except for
purposes of this paragraph and Sec. 1303.2(a), such milk that was so
removed from the handler's plant shall be treated for all other
purposes of the pricing regulation as though it had not been delivered
to and received at the handler's plant.
    (e) Each handler not specified in paragraphs (a) through (c) of
this section shall report with respect to the handler's receipts and
utilization of milk, filled milk, and milk products in such manner as
the compact commission may prescribe.
    (f) Any handler who operates a pool plant which has no Class I
disposition and receives no milk from producers is exempted from
reporting to the compact commission under this section.


Sec. 1303.2  Other reports of receipts and utilization.

    (a) Each handler who intends to have a receipt of unmarketable milk
replaced with the other milk in the manner described under Sec. 1303.1
shall give the compact commission, at the request and in accordance
with instructions of the compact commission, advance notice of the
handler's intention to have such milk replaced.
    (b) In addition to the reports required pursuant to paragraph (a)
of this section and Sec. 1303.1 and Sec. 1303.3 each handler shall
report such other information as the compact commission deems necessary
to verify or establish such handler's oblitation under the order.


Sec. 1303.3  Reports regarding individual producers and dairy farmers.

    (a) Each handler shall report on or before the 15th day after the
end of each month the information required by the compact commission
with respect to producer additions, producer withdrawals, changes in
farm locations, and changes in the name of farm operators.
    (b) Each handler that is not a cooperative association, upon
request from any such association, shall furnish it with information
with respect to each of its producer members from whose farm the
handler begins, resumes, or stops receiving milk at his pool plant.
Such information shall include the applicable date, the producer-
member's post office address and farm location, and, if known, the
plant at which his milk was previously received, or the reason for the
handler's failure to continue receiving milk from his farm. In lieu of
providing the information directly to the association, the handler may
authorize the compact commission to furnish the association with such
information, derived from the handler's reports and records.
    (c) Each handler shall submit to the compact commission within ten
(10) days after their request made not earlier than twenty (20) days
after the end of the month, his producer payroll for the month, which
shall show for each producer:
    (1) The daily and total pounds of milk delivered and its average
butterfat test; and
    (2) The net amount of the handler's payments to the producer, with
the prices, deductions, and charges involved.


Sec. 1303.4  Notices to producers.

    Each handler shall furnish each producer from whom he receives milk
the following information regarding the weight and butterfat test of
the milk:
    (a) Whenever he receives milk from the producer on the basis of
farm bulk tank measurements, the handler shall give the producer at the
time the milk is picked up at the farm a receipt indicating the
measurement and the equivalent pounds of milk received;
    (b) Whenever he receives milk from the producer on a basis other
than farm bulk tank measurements, the handler shall give the producer
within three (3) days after receipt of the milk a written notice of the
quantity so received;
    (c) If butterfat tests of the producer's milk are determined from
fresh milk samples, the handler shall give the producer within ten (10)
days after the end of each month a written notice of the producer's
average butterfat test for the month. Such notice shall not be required
if the handler has given the producer a written notice of the butterfat
test for each of the sampling periods within the month; and
    (d) If butterfat tests of the producer's milk are determined from
composite milk samples, the handler shall give the producer within
seven (7) days after the end of each sampling period a written notice
of the producer's average butterfat test for the period.

PART 1304--CLASSIFICAITON OF MILK

Sec.
1304.1  Classification of milk.
1304.2  Classification of transfers and diversions.
1304.3  General classification rules.
1304.4  Classification of producer milk at a pool plant.
1304.5  Classification of milk at a partially regulated plant.

    Authority: 7 U.S.C. 7256.


Sec. 1304.1  Classification of milk

    All fluid milk products required to be reported by a handler
pursuant to this section shall be classified as follows:
    (a) Class I milk shall be all fluid milk products disposed of in
the regulated area, and in packaged inventory of fluid milk products at
the end of the month, except as otherwise provided in paragraphs (b),
(c), and (d) of this section;
    (b) Fluid Milk Products:
    (1) Disposed of in the form of a fluid cream product or any product
containing artificial fat, fat substitutes, or six percent or more
nonmilk fat (or oil) that resembles a fluid cream product, except as
otherwise provided in paragraph (c) of this section;
    (2) In packaged inventory at the end of the month of the products
specified in paragraph (b)(1) of this section and in bulk concentrated
fluid milk products in inventory at the end of the month;
    (3) In bulk fluid milk products and bulk fluid cream products
disposed of or diverted to a commercial food processor if the compact
commission is permitted to audit the records of the commercial food
processing establishment for the purpose of verification. Otherwise,
such uses shall be Class I;
    (4) Used to produce:
    (i) Cottage cheese, lowfat cottage cheese, dry curd cottage cheese,
ricotta cheese, pot cheese, Creole cheese, and any similar soft, high
moisture cheese resembling cottage cheese in form or use;
    (ii) Milkshake and ice milk mixes (or bases), frozen desserts, and
frozen dessert mixes distributed in one-quart containers or larger and
intended to be used in soft or semi-solid form:
    (iii) Aerated cream, frozen cream, sour cream and sour half-and-
half, sour cream mixtures containing nonmilk items, yogurt and any
other semi-solid product;
    (iv) Eggnog, custards, puddings, pancake mixes, buttermilk biscuit
mixes, coatings, batter and similar products;
    (v) Formulas especially prepared for infant feeding or dietary use
(meal

[[Page 23061]]

replacement) that are packaged in hermetically sealed containers;
    (vi) Candy, soup, bakery products and other prepared foods which
are processed for general distribution to the public, and intermediate
products, including sweetened condensed milk, to be used in processing
such prepared food products; and
    (vii) Any product not otherwise specified in this section.
    (c) All fluid milk products:
    (1) Used to produce:
    (i) Cream cheese and other spreadable cheeses, and hard cheeses of
types that may be shredded, grated, or crumbled, and are not included
in paragraph (b)(4)(i) of this section;
    (ii) Butter, plastic cream, anhydrous milkfat and butteroil;
    (iii) Any milk product in dry form, except nonfat dry milk;
    (iv) Evaporated or sweetened condensed milk in a consumer-type
package and evaporated or sweetened condensed skim milk in a consumer-
type package; and
    (2) In inventory at the end of the month of unconcentrated fluid
milk products in bulk form and products in bulk form and products
specified in paragraph (b)(1) of this section in bulk form;
    (3) In fluid milk products, products specified in paragraph (b)(1)
of this section, and products processed by the disposing handler that
are specified in paragraphs (b)(4) (i)-(iv) of this section, that are
disposed of by a handler for animal feed;
    (4) In fluid milk products, products specified in paragraph (b)(1)
of this section, and products processed by the disposing handler that
are specified in paragraphs (v)(4) (i)-(iv) of this section, that are
dumped by a handler. The compact commission may require notification by
the handler of such dumping in advance for the purpose of having the
opportunity to verify such disposition. In any case, classification
under this paragraph requires a handler to maintain adequate records of
such use, if advance notification of such dumping is not possible, or
if the compact commission so requires, the handler must notify the
compact commission on the next business day following such use;
    (5) In fluid milk products and products specified in paragraph
(b)(1) of this section that are destroyed or lost by a handler in a
vehicular accident, flood, fire, or in a similar occurrence beyond the
handler's control, to the extent that the quantities destroyed or lost
can be verified from records satisfactory to the compact commission.
    (6) In skim milk in any modified fluid milk product or in any
product specified in paragraph (b)(1) of this section that is in excess
of the quantity of skim milk in such product that was included within
the fluid milk product definition pursuant to Sec. 1301.14 and the
fluid cream product definition pursuant to Sec. 1301.15.
    (d) All fluid milk products used to produce nonfat dry milk.


Sec. 1304.2  Classification of transfers and diversions

    (a) Transfers and diversions to pool plants. Fluid milk products
transferred or diverted from a pool plant to another pool plant or
partially regulated plant shall be classified as Class I milk unless
the operators of both plants request not to classify it Class I. In
either case, the classification of such transfer or diversion shall be
subject to the following conditions: The fluid milk products classified
in Class I shall be limited to the amount of fluid milk products,
respectively, remaining in Class I at the transferee-plant or diverted-
plant.
    (b) Transfers and diversions to producers-handlers. Fluid milk
products transferred or diverted from a pool plant to a producer-
handler shall be classified as Class I.


Sec. 1304.3  General classification rules.

    In determining the classification of producer milk pursuant to
Sec. 1304.4, the following rules shall apply:
    (a) Each month the compact commission shall correct for
mathematical and other obvious errors all reports filed pursuant to
Sec. 1303.1 and shall compute separately for each pool plant and for
each cooperative association with respect to milk for which it is the
handler pursuant to Sec. 1301.9(d) the pounds of skim milk and
butterfat, respectively, in Class I in accordance with Sec. 1304.1 and
Sec. 1304.2;
    (b) The classification of producer milk for which a cooperative
association is the handler pursuant to Sec. 1301.9(d) shall be
determined separately from the operations of any pool plant operated by
such cooperative; and
    (c) If receipts from more than one pool plant are to be assigned,
the receipts shall be assigned in sequence according to the zone
locations of the plants, beginning with the plant in the lowest-
numbered zone for assignments to Class I milk.


Sec. 1304.4  Classification of producer milk at a pool plant.

    For each month the compact commission shall determine the
classification of producer milk of each handler described in
Sec. 1301.9(a) for each of the handler's pool plants separately and of
each handler described in Sec. 1301.9(d) by allocating the handler's
receipts of fluid milk products to the handler's utilization pursuant
to paragraphs (a) and (b) of this section.
    (a) Fluid milk products shall be allocated in the following manner:
    (1) Subtract from the total pounds of fluid milk products in Class
I the pounds of fluid milk products in:
    (i) Beginning inventory packaged fluid milk products;
    (ii) Receipts of Class I fluid milk products from other pool plants
and partially regulated plants;
    (iii) Disposition of Class I fluid milk products outside of the
regulated area;
    (iv) Receipts of exempt fluid milk products pursuant to
Sec. 1301.13 (a), (b), and (c).
    (b) The quantity of producer milk in Class I shall be the combined
pounds of fluid milk product remaining in Class I.


Sec. 1304.5  Classification of producer milk at a partially regulated
plant.

    For each month the compact commission shall determine the
classification of producer milk of each handler described in
Sec. 1301.9(b) for each of the handler's partially regulated plants
separately by allocating the handler's receipts of fluid milk products
to the handler's utilization pursuant to paragraphs (a) through (c) of
this section.
    (a) Fluid milk products shall be allocated in the following manner.
Subtract from the total pounds of fluid milk product in Class I the
pounds of fluid milk products in:
    (1) Beginning inventory packaged fluid milk products;
    (2) Receipts of Class I fluid milk products from other pool plants
and partially regulated plants;
    (3) Disposition of Class I fluid milk products outside of the
regulated area;
    (4) Receipts of exempt fluid milk product pursuant to Sec. 1301.13
(a), (b), and (c).
    (b) The quantity of producer milk in Class I shall be the combined
pounds of fluid milk product remaining in Class I, not to exceed the
total pounds of fluid milk products disposed of in the regulated area.
    (c) Producer milk will be allocated pursuant to paragraph (b) of
this section in the following manner:
    (1) Receipts from producers located in the regulated area;
    (2) Receipts of diverted pool milk;
    (3) Receipts from producers not located in the regulated area shall
then be assigned to any remaining Class I in the regulated area.

[[Page 23062]]

PART 1305--CLASS PRICE

Sec.
1305.1  Compact over-order class I price and compact over-order
obligation.
1305.2  Announcement of compact over-order class I price and compact
over-order obligation.
1305.3  Equivalent price.

    Authority: 7 U.S.C. 7256.


Sec. 1305.1  Compact over-order class I price and compact over-order
obligation.

    The compact over-order Class I price per hundredweight of milk
shall be as follows:
    (a) The Class I price shall be announced pursuant to Sec. 1305.2.
    (b) The compact over-order obligation shall be computed as follows:
    (1) The compact Class I price;
    (2) Deduct Federal Order #1, Zone 1 price;
    (3) The remainder shall be the compact over-order obligation.


Sec. 1305.2  Announcement of compact over-order class I price and
compact over-order obligation.

    The compact commission shall announce publicly on or before the 5th
day of each month the Class I over-order price and the compact over-
order obligation for the following month.


Sec. 1305.3  Equivalent price.

    If, for any reason, a price specified in this part for use in
computing class prices or for other purposes is not reported or
published in the manner described in this part, the compact commission
shall use one determined by the commission to be equivalent to the
price that is specified.

PART 1306--COMPACT OVER-ORDER PRODUCER PRICE

Sec.
1306.1  Handler's value of milk for computing basic over-order
producer price.
1306.2  Partially regulated plant operator's value of milk for
computing basic over-order producer price.
1306.3  Computation of basic over-order producer price.
1306.4  Announcement of basic over-order producer price.

    Authority: 7 U.S.C. 7256.


Sec. 1306.1  Handler's value of milk for computing basic over-order
producer price.

    For the purpose of computing the basic over-order producer price,
the compact commission shall determine for each month the value of milk
of each handler with respect to each of the handler's pool plants and
of each handler described in Sec. 1301.9(d) with respect to milk that
was not received at a pool plant, as directed in this section: Multiply
the pounds of Class I fluid milk products as determined pursuant to
Sec. 1304.1(a) by the compact over-order obligation.


Sec. 1306.2  Partially regulated plant operator's value of milk for
computing basis over-order producer price.

    For the purpose of computing the basic over-order producer price,
the compact commission shall determine for each month the value of milk
disposition in the regulated area by the operator of a partially
regulated plant, as follows: Multiply the pounds of Class I fluid milk
products as determined pursuant to Sec. 1304.1(a) by the compact over-
order obligation.


Sec. 1306.3  Computation of basic over-order producer price.

    The compact commission shall compute the basic over-order producer
price per hundredweight applicable to milk received at plants as
follows:
    (a) Combine into one total the values computed pursuant to
Sec. 1306.1 and Sec. 1306.2 for all handlers from whom the compact
commission has received at the compact commission's office prior to the
9th day after the end of the month the reports for the month prescribed
in Sec. 1303.1 and the payments for the preceding month required under
Sec. 1307.3(a).
    (b) Add an amount equal to not less than one-half of the
unobligated balance of the producer-settlement fund at the close of
business on the 8th day after the end of the month;
    (c) Divide the resulting amount by the sum of the following for all
handlers included in these computations:
    (1) The total hundredweight of producer milk;
    (2) The total hundredweight for which a value is computed pursuant
to Sec. 1306.2 (a); and (d) Subtract not less than four (4) cents nor
more than five (5) cents for the purpose of retaining a cash balance in
the producer-settlement fund. The result shall be the basic over-order
producer price for the month.


Sec. 1306.4  Announcement of basic over-order producer price.

    The compact commission shall announce publicly on or before: The
13th day after the end of each month the over-order producer price
resulting from the adjustment of the basic over-order producer price
for such month, as computed under Sec. 1306.3.

PART 1307--PAYMENTS FOR MILK

Sec.
1307.1  Producer-settlement fund.
1307.2  Handler's producer-settlement fund debits and credits.
1307.3  Payments to and from the producer-settlement fund.
1307.4  Payments to producers.
1307.5  [Reserved]
1307.6  Statements to producers.
1307.7  Adjustment of accounts.
1307.8  charges on overdue accounts.

    Authority: 7 U.S.C. 7256.


Sec. 1307.1  Producer-settlement fund.

    (a) The compact commission shall establish and maintain a separate
fund known as the producer-settlement fund. They shall deposit into the
fund all amounts received from handlers under Sec. 1307.3, Sec. 1307.7,
and Sec. 1307.8 and the amount subtracted under Sec. 1306.3(d). They
shall pay from the fund all amounts due handlers under Sec. 1307.3,
Sec. 1307.7, and Sec. 1307.8 and the amount added under Sec. 1306.3(b)
subject to their right to offset any amounts due from the handler under
these sections and under Sec. 1308.1
    (b) All amounts subtracted under Sec. 1306.3(d), including interest
earned thereon, shall remain in the producer-settlement fund as an
obligated balance until it is withdrawn for the purpose of effectuating
Sec. 1306.3(b).
    (c) The compact commission shall place all monies subtracted under
Sec. 1306.3(d) in an interest-bearing bank account or accounts in a
bank or banks duly approved as a Federal depository for such monies, or
invest them in short-term U.S. Government securities.


Sec. 1307.2  Handlers' producer-settlement fund debits and credits.

    On or before the 15th day after the end of the month, the compact
commission shall render a statement to each handler showing the amount
of the handler's producer-settlement fund debit or credit, as
calculated in this section.
    (a) The producer-settlement fund debit for each plant and each
cooperative association in its capacity as a handler under
Sec. 1301.9(d) shall be the value computed pursuant to Sec. 1306.1 and
Sec. 1306.2.
    (b) The producer-settlement fund credit for each plant and each
cooperative association in its capacity as a handler under
Sec. 1310.9(d) shall be computed as specified in this paragraph.
    (1) Multiply the quantities of producer milk that were allocated to
Class I pursuant to Sec. 1304.4 and the quantities of route disposition
in the marketing area by partially regulated plants for which a value
was determined pursuant to Sec. 1306.2(a) by the basic over-order
producer price computed under Sec. 1306.3.
    (2) For any cooperative association in its capacity as a handler
under Sec. 1301.9(d), multiply the quantities of

[[Page 23063]]

milk moved to each pool plant by the basic over-order blended price
computed under Sec. 1306.3; and to the result add the value determined
under Sec. 1306.1.
    (c) The producer-settlement fund debit or credit of any handler
shall be the net of the producer-settlement fund debits and credits as
computed for all of its operations under paragraph (a) and (b) of this
section.


Sec. 1307.3  Payments to and from the producer-settlement fund.

    (a) On or before the 18th day after the end of the month, each
handler shall pay to the compact commission the handler's producer-
settlement fund debit for the month as determined under Sec. 1307.2(a).
    (b) On or before the 20th day after the end of the month, the
compact commission shall pay to each handler the handler's producer-
settlement fund credit for the month as determined under
Sec. 1307.2(b). If the unobligated balance in the producer-settlement
fund is insufficient to make such payments, the compact commission
shall reduce uniformly such payments and shall complete them as soon as
the funds are available.


Sec. 1307.4  Payments to producers.

    (a) On or before the 20th day after the end of the month, each
handler shall make payment to each producer for the milk received from
him during the month at not less than the basic over-order producer
price per hundredweight computer under Sec. 1306.3. If the handler has
not received full payment for the compact commission under
Sec. 1307.3(b) by the date payments are due under this paragraph, he
may reduce pro rata his payments to producers by an amount not to
exceed such underpayment. Such payments shall be completed after
receipt of the balance due from the compact commission by the next
following date for making payments under this paragraph.
    (b) If the handler's net payment to a producer is for an amount
less than the total amount due the producer under this section, the
burden shall rest upon the handler to prove to the compact commission
that each deduction from the total amount due is properly authorized
and properly chargeable to the producer.
    (c) In making payment to producers under paragraph (b) of this
section for milk diverted from a pool plant the handler may elect to
pay such producers at the price of the plant from which the milk was
diverted, if the resulting net payment to each producer is not less
than the otherwise required under this section and the rate of payment
and the deduction shown on the statement required to be furnished under
Sec. 1307.6 are those used in computing the payment.
    (d) If a handler claims that the required payment cannot be made
because the producer is deceased or cannot be located, such payment
shall be made to the producer-settlement fund, and in the event that
the handler subsequently locates and pays the producer or a lawful
claimant, or in the event that the handler no longer exists and a
lawful claim is later established, the compact commission shall make
such payment from the producer-settlement fund to the handler or to the
lawful claimant, as the case may be.
    (e) If not later than the date when such payment is required to be
made, legal proceedings have been instituted by the handler for the
purpose of administrative or judicial review of the compact commission
findings upon verification as provided above such payment shall be made
to the producer-settlement fund and shall be held in reserve until such
time as the above-mentioned proceedings have been completed or until
the handler submits proof to the compact commission that the required
payment has been made to the producer in which latter event the payment
shall be refunded to the handler.
    (f) At a partially regulated plant each handler shall make
payments, on a pro rata basis, to all producers and dairy farmers for
milk received from them during the month, the payment received pursuant
to Sec. 1307.3(b).


Sec. 1307.5  [Reserved]


Sec. 1307.6  Statements to producers.

    In making the payments to producers required under Sec. 1307.4,
each handler and each cooperative shall furnish each producer, in
addition to the information required under Federal and State
regulations, a supporting statement, in such form acceptable to the
commission, which shall show: The rate and amount of the compact over-
order producer price.


Sec. 1307.7  Adjustment of accounts.

    (a) Whenever the compact commission verification of a handler's
reports or payments discloses an error in payments to or from the
compact commission under Sec. 1307.3 or Sec. 1308.1, the compact
commission shall promptly issue to the handler a charge bill or a
credit, as the case may be, for the amount of the error. Adjustment
charge bills issued during the period beginning with the 10th day of
the prior month and ending with the 9th day of the current month shall
be payable by the handler to the market administrator on or before the
18th day of the current month. Adjustment credits issued during that
period shall be payable by the compact commission to the handler on or
before the 20th day of the current month.
    (b) whenever the compact commission's verification of a handler's
payments discloses payment to a producer or a cooperative association
of an amount less than is required by Sec. 1307.4, the handler shall
make payment of the balance due the producer not later than the 20th
day after the end of the month in which the handler is notified of the
deficiency.


Sec. 1307.8  Charges on overdue accounts.

    Any producer-settlement fund account balance due from or to a
handler under Sec. 1307.3, Sec. 1307.7 or Sec. 1307.8 for which
remittance has not been received in or paid from the compact commission
office by close of business on the 18th day of any month, shall be
increased one percent effective the following day.