from such price if the plant is located in Minnesota; and

(3) Transfers of fluid milk products between pool plants shall be assigned Class I milk disposition at the receiving plant, in excess of the sum of receipts at such plant from producers (including receipts from a cooperative association as a handler of bulk tank milk pursuant to § 1060.10 (c)) and the pounds assigned as Class I milk to receipts from other order plants and unregulated supply plants. Such assignment is to be made first to shipping plants priced at the same price, next to plants having a higher price, and then in sequence to plants having a lower price, beginning with the plant at which the highest price would apply.

APPLICATION OF PROVISIONS

(a) Sections 1060.40 through 1060.46, 1060.50 through 1060.54, 1060.70, 1060.71, and 1060.80 through 1060.88 shall not apply to a producer-handler: and

(b) None of the provisions of this part shall apply to a governmentally owned and operated institution which disposes of Class I milk solely for use on its own premises or to its own facilities. Sales of fluid milk products from a pool plant to such an institution shall be Class I and receipts of fluid milk products at a pool plant from such an institution shall be Class II.

§ 1060.61

Plants subject to other Federal orders.

The provisions of this order shall not apply with respect to a plant of a handler specified in paragraph (a), (b), or (c) of this section except as specified in paragraphs (d) and (e) :

(a) A distributing plant from which the Secretary determines a greater portion of fluid milk products, except filled milk, is disposed of on routes in another marketing area regulated by another order issued pursuant to the Act and such plant is fully subject to regulation of such other order: Provided, That a distributing plant which was a pool plant under this order in the immediately preceding month shall continue to be subject to all of the provisions of this part until the third consecutive month in which a greater proportion of its Class I disposition, except filled milk, on routes is made in such other marketing area

unless, notwithstanding the provisions of this paragraph, it is regulated by such other order;

(b) A distributing plant which meets the requirements set forth in § 1060.23 (a) which also meets the requirements of another marketing order on the basis of its distribution in such other marketing area and from which the Secretary determines a greater quantity of fluid milk products, except filled milk, is disposed of during the month on routes in this marketing area than is so disposed of in such other marketing area but which plant is nevertheless fully regulated under such other marketing order;

(c) A supply plant from which the Secretary determines a greater proportion of its Grade A receipts, except filled milk, is shipped during the month to plants which are regulated by another order pursuant to the Act if such shipments qualify it as a pool plant under such other order;

(d) Each handler operating a plant described in paragraph (a), (b) or (c) of this section shall, with respect to total receipts and utilization or disposition of skim milk and butterfat at such plant, report to the market administrator at such time and in such manner as the market administrator may require (in lieu of reports pursuant to §§ 1060.35 through 1060.37) and allow verification of such reports by the market administrator; and

(e) Each handler operating a plant specified in paragraph (a), (b) or (c) of this section if such plant is subject to the section if such plant is subject to the classification and pricing provisions of another order which provides for individual handler pooling, shall pay to the market administrator for the producersettlement fund on or before the 25th day after the end of the month an amount computed as follows:

(1) Determine the quantity of reconstituted skim milk in filled milk disposed of on routes in the marketing area which was allocated to Class I at such other order plant. If reconstituted skim milk in filled milk is disposed of from such plant on routes in marketing areas regulated by two or more market pool orders, the reconstituted skim milk assigned to Class I shall be prorated according to such disposition in each area; and

(2) Compute the value of the quantity assigned in subparagraph (1) of this paragraph to Class I disposition in this

area, at the Class I price under this part applicable at the location of the other order plant and subtract its value at the Class II price.

[34 F.R. 14823, Sept. 26, 1969, as amended at 34 F.R. 18660, Nov. 22, 1969]

§ 1060.62

Obligation of handler operating a partially regulated distributing plant.

Each handler who operates a partially regulated distributing plant shall pay to the market administrator for the producer-settlement fund on or before the 25th day after the end of the month either of the amounts (at the handler's election) calculated pursuant to paragraph (a) or (b) of this section. If the handler fails to report pursuant to §§ 1060.35 (h) and 1060.36 the information necessary to compute the amount specified in paragraph (a), he shall pay the amount computed pursuant to paragraph (b) of this section:

(a) An amount computed as follows:

(1) (i) The obligation that would have been computed pursuant to § 1060.70 at such plant shall be determined as though such plant were a pool plant. For purposes of such computation, receipts at such nonpool plant from a pool plant or an other order plant shall be assigned to the utilization at which classified at the pool plant or other order plant and transfers from such nonpool plant to a pool plant or an other order plant shall be classified as Class II milk if allocated to such class at the pool plant or other order plant and be valued at the uniform price of the respective order if so allocated to Class I milk, except that reconstituted skim milk in filled milk shall be valued at the Class II price. There shall be included in the obligation so computed a charge in the amount specified in § 1060.70 (f) and a credit in the amount specified in § 1060.84(b) (2) with respect to receipts from an unregulated supply plant, except that the credit for receipts of reconstituted skim milk in filled milk shall be at the Class II price, unless an obligation with respect to such plant is computed as specified in subdivision (ii) of this subparagraph; and

(ii) If the operator of the partially regulated distributing plant so requests, and provides with his report pursuant to §§ 1060.35(b) and 1060.36, a similar report with respect to the operations of any other nonpool plant which serves as

a supply plant for such partially regulated distributing plant by shipments to such plant during the month equivalent to the requirements of § 1060.23(b), with agreement of the operator of such plant that the market administrator may examine the books and records of such plant for purposes of verification of such reports, there will be added the amount of the obligation computed at such nonpool supply plant in the same manner and subject to the same conditions as for the partially regulated distributing plant.

(2) From this obligation there will be deducted the sum of (i) the gross payments made by such handler for Grade A milk received during the month from dairy farmers at such plant and like payments made by the operator of a supply plant(s) included in the computations pursuant to subparagraph (1) of this paragraph, and (ii) any payments to the producer-settlement fund of another order under which such plant is also a partially regulated distributing plant;

(b) An amount computed as follows: (1) Determine the respective amounts of skim milk and butterfat disposed of as Class I milk on routes (other than to pool plants) in the marketing area;

(2) Deduct (except that deducted under a similiar provision of another order issued pursuant to the Act) the respective amounts of skim milk and butterfat received as Class I milk at the partially regulated distributing plant from pool plants and other order plants;

(3) Deduct the quantity of reconstituted skim milk in fluid milk products disposed of on routes in the marketing area;

(4) Combine the amounts of skim milk and butterfat remaining into one total and determine the weighted average butterfat content; and

(5) From the value of such milk at the Class I price applicable at the location of the nonpool plant, subtract its value at the uniform price applicable at such location (not to be less than the Class II price), and add for the qauntity of reconstituted skim milk specified in subparagraph (3) of this paragraph its value computed at the Class I price applicable at the location of the nonpool plant less the value of such skim milk at the Class II price.

[32 F.R. 13703, Sept. 30, 1967, as amended at 34 F.R. 18660, Nov. 22, 1969]

DETERMINATION OF UNIFORM PRICE

§ 1060.70 Computation of the net pool obligation of each pool handler.

The net pool obligation of each pool handler as described in § 1060.10 (a), (b), and (c) during each month shall be a sum of money computed by the market administrator as follows:

(a) Multiply the quantity of producer milk in each class as computed pursuant to § 1060.46 (c), by the applicable class prices (adjusted pursuant to §§ 1060.52 and 1060.53);

(b) Add the amount obtained from multiplying the pounds of overage deducted from each class pursuant to § 1060.46 (a) (11) and the corresponding step of § 1060.46 (b) by the applicable class prices;

(c) Add the amount computed from multiplying the difference between the appropriate Class II price for the preceding month and the appropriate Class I price for the current month by the hundredweight of skim milk and butterfat subtracted from Class I pursuant to § 1060.46(a) (6) and the corresponding step of § 1060.46(b);

(d) Add (or subtract, pursuant to the proviso of this paragraph) the amount computed from multiplying the difference between the appropriate Class I price of the preceding month and the appropriate Class I price for the current month by the hundredweight of skim milk and butterfat subtracted from Class I pursuant to § 1060.46 (a) (3) and the corresponding step of § 1060.46 (b): Provided, That if the Class I price for the current month is less than the Class I price for the preceding month, the result shall be a minus amount;

(e) Add the amount equal to the difference between the value at the Class I price applicable at the pool plant and the value at the Class II price, with respect to skim milk and butterfat from other source milk subtracted from Class I pursuant to § 1060.46(a) (4) and the corresponding step of § 1060.46(b), except that for receipts of fluid milk products assigned to Class I pursuant to § 1060.46 (a) (4) (iv) and (v) and the corresponding step of § 1060.46(b) the Class I price shall be adjusted to the location of the transferor plant; and

(f) Add an amount equal to the value at the Class I price adjusted for location of the nearest nonpool plant(s) from which an equivalent volume was received with respect to skim milk and butterfat

For each month the market administrator shall compute a uniform price as follows:

(a) Combine into one total the values computed pursuant to § 1060.70 for all handlers who filed reports pursuant to §§ 1060.35 and 1060.37(b) for the month and who made the payments pursuant to §§ 1060.80 and 1060.84 for the preceding month;

(b) Add or subtract for each one-tenth percent that the average butterfat content of milk represented by the values specified in paragraph (a) of this section is less or more, respectively, than 3.5 percent, the amount obtained by multiplying such difference by the butterfat differential pursuant to § 1060.81 and by multiplying the result by the total hundredweight of such milk;

(c) Add an amount equal to the total value of minus location differentials computed pursuant to § 1060.82(a);

(d) Subtract an amount equal to the total value of the plus location differentials computed pursuant to § 1060.82(a);

(e) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund;

(f) Divide the resulting amount by the sum of the following for all handlers included in these computations;

(1) The total hundredweight of producer milk; and

(2) The total hundredweight for which a value is computed pursuant to § 1060.70 (f); and

(g) Subtract not less than 4 cents nor more than 5 cents per hundredweight. The result shall be the "uniform price" for milk received from producers.

PAYMENTS

§ 1060.80 Time and method of payment.

Each handler shall make payment for milk received from producers or cooperative associations as follows:

(a) To each producer for whom payment is not made pursuant to paragraph (b) or (c) of this section:

(1) A final settlement on or before the 15th day after the end of each month during which producer milk was received, at not less than the uniform price for

such milk, adjusted by the butterfat differential computed pursuant to § 1060.81, subject to the location adjustment to producers pursuant to § 1060.82, and less the following amounts:

(i) The payments made pursuant to subparagraph (2) of this paragraph;

(ii) Marketing service deductions pursuant to § 1060.87; and

(iii) Any deductions authorized by the producer: Provided, That if by such date such handler has not received full payment for such month pursuant to § 1060.85, he may reduce his total payment to all producers uniformly by not less than the amount of reduction in payment from the market administrator; the handler shall, however, complete such payments not later than the date for making such payments pursuant to this paragraph next following receipt of the balance from the market administrator;

(2) A partial payment on or before the last day of each month with respect to producer milk received during the first 15 days of the month at not less than the Class II price for the preceding month (without deduction for hauling);

(b) (1) On or before the second day prior to the date payments are due individual producers as specified in this section, pay to a cooperative association which SO requests and which the market administrator determines is authorized by its members to collect payments for their milk and which promises in writing to reimburse the handler the amount of any actual loss incurred by him because of any member's claim on the part of the cooperative association of the payments pursuant to paragraph (a) of this section an amount equal to the sum of the individual payments otherwise payable to such producers. The foregoing payment shall be made with respect to milk of each producer whom the cooperative association certifies is a member effective on and after the first day of the calendar month next following receipt of such certification through the last day of the month next preceding receipt of notice from the cooperative association of a termination of membership or until the original request is rescinded in writing by the cooperative association; and

(2) A copy of each such request, promise to reimburse, and certified list of

members shall be filed simultaneously with the market administrator by the cooperative association and shall be subject to verification at his discretion through audit of the records of the cooperative association pertaining thereto. Exceptions, if any, to the accuracy of such certification by a producer claimed to be a member, or by a handler, shall be made by written notice to the market administrator and shall be subject to his determination;

(c) To a cooperative association which is a handler pursuant to § 1060.10 (a) or (b) for milk which it caused to be delivered to such handler:

(1) A final settlement on or before the 13th day after the end of the month in which the skim milk or butterfat was received, an amount equal to not less than the applicable class prices for all skim milk and butterfat so delivered, less the amount of payment made pursuant to subparagraph (2) of this paragraph;

(2) A partial payment on or before the 26th day of each month at not less than the applicable Class II price for the preceding month (without deduction for hauling) for all skim milk and butterfat so delivered during the first 15 days of the current month;

(d) In making payments to producers pursuant to paragraph (a) of this section, each handler shall furnish each producer with a supporting statement in such form that it may be retained by the producer, which shall show:

(1) The month and the identity of the handler and of the producer;

(2) The pounds per shipment, the total pounds, and the average butterfat test of milk delivered by the producer;

(3) The minimum rate or rates at which payment to the producer is required under the provisions of §§ 1060.80, 1060.81, and 1060.82;

(4) The rate which is used in making payment, if such rate is other than the applicable minimum rate;

(5) The amount or the rate per hundredweight of each deduction claimed by the handler, including any deduction claimed under paragraph (c) (2) of this section and § 1060.87, together with a description of the respective deductions; and

(6) The net amount of payment to the producer.

The uniform price for producer milk shall be increased or decreased for each one-tenth of 1 percent that the butterfat content of such milk is above or below 3.5 percent, respectively, at the rate determined by multiplying the pounds of butterfat in producer milk allocated to Class I and Class II milk pursuant to § 1060.46 by the respective butterfat differential for each class, determined pursuant to § 1060.52, dividing the sum of such values by the total pounds of such butterfat, and rounding the resultant figure to the nearest one-tenth cent.

§ 1060.82 Location differentials to producers and on nonpool milk.

(a) For producer milk received at a pool plant or diverted to a nonpool plant located outside the base zone, the uniform price shall be adjusted at the rate set forth in § 1060.53.

(b) For purposes of computation pursuant to §§ 1060.84(b) (2) and 1060.85, the uniform price shall be adjusted at the rates set forth in § 1060.53 applicable at the location of the nonpool plant(s) from which the milk was received. § 1060.83

Producer-settlement fund.

The market administrator shall establish and maintain a separate fund known as the "producer-settlement fund" into which he shall deposit all funds received pursuant to paragraph (a) of this section and out of which he shall make all payments required pursuant to paragraph (b) of this section:

(a) Payments made by handlers pursuant to §§ 1060.61, 1060.62, 1060.84 and 1060.86.

(b) Payments due handlers pursuant to §§ 1060.85 and 1050.86: Provided, That payments due any handler shall be offset by payments due from such handler pursuant to §§ 1060.62, 1060.84, 1060.86, 1060.87, and 1060.88.

[32 F.R. 13703, Sept. 30, 1967, as amended at 34 F.R. 18660, Nov. 22, 1969]

§ 1060.84 Payments to the producersettlement fund.

On or before the 13th day after the end of the month each handler shall pay to the market administrator the amount, if any, by which the total amounts specified in paragraph (a) of this section exceed the amount specified in paragraph (b) of this section: Provided, That payment made by a cooperative association as a

handler shall not relieve the transferee handler of any obligation on any such milk which is due the cooperative association, or otherwise due pursuant to §§ 1060.80 through 1060.88: (a) The sum of:

(1) The total of the net pool obligation computed pursuant to § 1060.70 for such handlers; and

(2) In the case of a cooperative association which is a handler pursuant to § 1060.10 (c), the minimum amounts due from other handlers pursuant to § 1060.80 (c) (1); and

(b) The sum of:

(1) The amount required to be paid producers (including payments to producers through cooperative associations) pursuant to § 1060.80 before deductions authorized by the producer or cooperative association or for marketing services pursuant to § 1060.87; and

(2) The value at the uniform price(s) applicable at the location of the plant(s) from which received (not to be less than the value at the Class II price) with respect to other source milk for which a value is computed pursuant to § 1060.70(e).

§ 1060.85 Payments out of the producersettlement fund.

On or before the 14th day after the end of each month the market administrator shall pay (subject to the proviso of § 1060.83) to each handler the amount if any by which the amount computed pursuant to § 1060.84 (b) exceeds the amount computed pursuant to § 1060.84 (a). The market administrator shall offset any payment due any handler against payments due from such handler. If the balance in the producer-settlement fund is insufficient to make all payments pursuant to this section, the market administrator shall reduce uniformly such payments and shall complete such payments as soon as the necessary funds are available.

§ 1060.86 Adjustment of accounts.

(a) Whenever audit by the market administrator of any handler's reports, books, records, or accounts discloses errors resulting in moneys due the market administrator or any producer or cooperative association from such handler, the market administrator shall promptly notify such handler of the amount due and payment therefor shall be made within 5 days if such amount is due the market administrator, or on or