Proposed Rule Readoption with amendments: N.J.A.C. 2:52
Authorized By: Alfred W. Murray, Director, Division
of Marketing and Development, Department of Agriculture
Authority: N.J.S.A. 4:12A-1 et seq., specifically 4:12A-7
and 20
Calendar Reference: See Summary below for explanation
of exception to calendar requirement.
Proposal Number: PRN 2005-202
Submit comments by August 5, 2005 to:
Alfred W. Murray, Director
Division of Marketing and Development
NJ Department of Agriculture
PO Box 330
Trenton, NJ 08625-0330
The agency proposal follows:
Summary
Pursuant to N.J.S.A. 52:14B-5.1, the rules in this chapter
are scheduled to expire May 5, 2005. In accordance with N.J.S.A. 52:14B-5.1c,
the submission of this notice of proposal to the Office of Administrative
Law extends that expiration date 180 days to November 1, 2005. The Department
of Agriculture has reviewed these rules, as amended, and has found them
to be necessary, reasonable and proper for the purposes for which they
were promulgated. Proposed amendments to N.J.A.C. 2:52 are to clarify
existing procedures to better maintain the orderly flow of business in
the milk market industry.
The rules proposed for readoption with amendments and new rules require
milk processors, dealers and subdealers to maintain accurate records on
milk transactions to assist the Division of Marketing and Development
in its evaluation of the licensee’s business operations concerning
the licensees adherence to applicable New Jersey statutes and the rules
of the Division, and to obtain approval from the Director of Marketing
and Development before serving an unlicensed store; require the giving
of two weeks’ notice to the present supplier of a store requesting
to change milk supplier; require approval to serve an unlicensed store
without notice under certain conditions; and list conditions under which
the Director might deny approval to change supplier. In addition, the
rules describe the conditions pertaining to the changing of a licensee’s
source of milk supply; the instances when the notice is required; instances
when notice is not required; who should file the notice; who should receive
the notice; when and why approval to change suppliers may be denied; commencement
of the two-week period; and who will be notified of approval or denial
to change source of supply. Furthermore, the rules require that a licensee
desiring to stop serving an account must give written notice to the customer
and the Director, Division of Marketing and Development, at least two
weeks prior to the proposed date of discontinuance. The two weeks’
notice is not required if the customer releases the supplier in writing
and sends a copy of the release to the Division. Furthermore, licensed
milk dealers are prohibited from selling milk below variable cost. The
term “variable cost” is defined in the chapter and certain
costs are required to be averaged. Raw milk cost is also defined in this
chapter.
N.J.A.C. 2:52-1.3 is amended to clarify that each retail location must
maintain its own records. N.J.A.C. 2:52-1.6 has been amended to remove
an annual reporting requirement for the month of November. N.J.A.C. 2:52-1.6(a)5,
which set forth confidential provisions has been deleted from this subchapter
and a new rule is proposed at N.J.A.C. 2:52-1.7 to describe the conditions
under which information will be held confidential and specifically references
privileges and limitations set forth in both 7 CFR 205 and N.J.S.A. 47:1A-1
et seq.
Amendments are proposed to N.J.A.C. 2:52-2.1 and 3.1 to require complaints
be filed with the Department within 30 days. This will allow the Department
to resolve these issues in a timely fashion and maintain an orderly flow
of milk and milk products to citizens of New Jersey.
As the Department has provided a 60-day comment period for this notice
of proposal, this notice is excepted from the rulemaking calendar requirement,
pursuant to N.J.A.C. 1:30-3.3(a)5.
Social Impact
For the reasons set forth in the Summary above and Economic
Impact below, the rules proposed for readoption with amendments have a
positive social impact by assuring that both the dairy industry and consumers
will continue to receive the benefit of effective milk control regulation.
A proposed new rule describes the conditions under which information will
be held confidential and specifically references privileges and limitations
set forth in both 7 CFR 205 and N.J.S.A. 47:1A-1 et seq. Amendments have
been proposed to ensure that all complaints are received in a timely manner
to assure an orderly flow of milk and milk products. Failure to readopt
this chapter, as amended, would leave a void in the milk control program
and result in unstable markets and destructive competition.
Economic Impact
The rules proposed for readoption with amendments and new rule are driven
by economics and provide a benefit to New Jersey consumers (especially
school children, the elderly and the poor), dairy farmers, milk dealers
and subdealers, and retail stores.
The rules proposed for readoption with amendments and new rule benefit
consumers by creating a market environment wherein adequate supplies of
milk are available to meet consumer demands. Such benefits are direct
results of the market stability and competitiveness provided by enforcement
of the Division’s rules.
Approximately 114 New Jersey dairy farmers receive direct benefits from
the rules proposed for readoption with amendments and new rule in the
maintenance of the marketing and production infrastructure conducive to
the maintenance of efficient farming operations. New Jersey dairy farmers
are important to the State’s economy, particularly for rural communities.
The rules proposed for readoption with amendments and new rule are important
tools in insuring that dairy farmers receive payment for their products.
Milk dealers, subdealers and retail stores benefit from the maintenance
of a stable, competitive marketplace wherein implementation of Division’s
rules results in the minimization of predatory, disruptive activities.
The notice rules assist dealer and subdealers with the collection of money
owed for products delivered, help to insure a continuing source of supply
for retail stores and provide for the orderly transfer of business.
The rules proposed for readoption with amendments and new rule benefit
the State of New Jersey by providing accurate data on which the dairy
programs can determine funding available (based on fees) for operating
costs.
There is no additional cost for compliance as a result of the proposed
amendments and new rule as described more fully in the Summary and Social
Impact above. In fact, the amendments and new rule will help ensure more
stable business operations. There will be a positive economic impact to
all parties involved in a complaint, but fostering a timely resolution
and ensuring
Federal Standard Statement
Executive Order No. 27(1994) and P. L. 1995, c. 65 require
State agencies which adopt, readopt or amend State rules that exceed any
Federal standards or requirements to include in the rulemaking document
a comparison with Federal law. As related to this chapter, the rulemaking
requirements of the Director, Division of Marketing and Development, are
dictated by the New Jersey Milk Control Act, N.J.S.A. 4:12-1 et seq.,
and are not subject to any Federal requirements or standards. The raw
milk costs defined in the rules are the same as those set forth in the
Federal Milk Order No. 1 (Northeast Marketing Area) and the rules proposed
for readoption with amendments and new rule merely state this for purposes
of clarity. Therefore, a Federal standards analysis is not required.
Jobs Impact
It is not anticipated that the rules proposed for readoption with amendments
and new rule will result in the generation or loss of any jobs.
Agriculture Industry Impact
For the reasons set forth in the Summary, Social and Economic Impact
statements above, the rules proposed for readoption with amendments and
new rule will have a positive impact on the agriculture industry.
Regulatory Flexibility Analysis
The rules proposed for readoption with amendments and new
rule apply to approximately 300 milk dealers and processors and 9,000
retail stores most of whom are small businesses as defined by the New
Jersey Regulatory Flexibility Act, N.J.S.A. 54:14B-16 et seq. Small businesses
will be affected, but to no greater extent than in the past. The rules
exempt most small milk dealers from the filing of any monthly reports.
The reports required are designed to be taken directly from ordinary records
already kept by the licensees for managerial decision-making purposes.
Licensees have the necessary reporting systems in place and will not require
additional efforts to comply. Wherever possible, the Division of Marketing
and Development has combined several reports and eliminated reports that
are no longer necessary.
The initial capital costs and the annual costs of compliance are minimal
for both large and small businesses. In fact, the rules are designed to
exempt small businesses from several reporting requirements that are not
essential to them.
Therefore, where applicable, the Department has applied differing or lesser
standards based on business size. While there are compliance and reporting
requirements as set forth above, no capital expenditures or professional
services are necessary as a result of the rules proposed for adoption
with amendments and new rule.
Smart Growth Impact
The Department anticipates that there will be no impact
on the achievement of Smart Growth or upon the implementation of the State’s
Development and Redevelopment Plan from the rules proposed for readoption
with amendments and new rule.
Full text of the rules proposed for readoption
may be found in the New Jersey Administrative Code at N.J.A.C. 2:52.
Full text of the proposed amendments and new rule
follow (additions indicated in boldface thus;
deletions indicated in brackets [thus]):
2:52-1.3 Separate records for each licensed business
Each licensed business shall maintain separate financial and other records.
When requested, licensed dealers operating branches and/or
subsidiaries must submit separate records pertaining to such entity for
a determination by the Division of Marketing and Development as to whether
the licensee’s branch or subsidiary has complied with the applicable
New Jersey statutes and rules.
2:52-1.6 Reports required
(a) All processors, dealers and sub-dealers shall file reports on forms
supplied by the Division of Marketing and Development as follows:
1. (No change.)
2. Annually and at such other times as the director may request, a list
of all stores and wholesale accounts served (including dealers, subdealers,
schools and institutions) showing name, trade name, address, current milk
license number (if applicable) and the aged amount receivable for all
products and any other amount due shown separately;
[3. Annually, by January 15 of the following year, a report of milk sold
within the State of New Jersey during the month of November by size and
type of container and by type of customer;]
[4.] 3 Such other reports as may be required by the director in the administration
and enforcement of N.J.S.A. 4:12A-1 et seq.[;]
[5. All reports filed with and received by the Division of Marketing and
Development pursuant to this section contain confidential, competitive
information and shall not at any time be made available to any person
except authorized personnel.]
2:52-1.7 Confidentiality
The New Jersey Department of Agriculture will hold confidential any information
obtained while implementing the rules set forth in this chapter, which
constitutes proprietary commercial or financial information, or is otherwise
protected from disclosure under 7 C.F.R. Part 205.501 and 205.504 or the
Open Public Records Act, N.J.S.A. 47:1a-1 et seq., subject to the limitations
set forth therein.
2:52-2.1 Notice of intent
(a) (No change.)
(b) Approval to serve the unlicensed store may be denied if the Director
determines through investigation that the offer
violates the Milk Control Act or rules and regulations issued pursuant
thereto. Also until the store pays all indebtedness, less any legal rebates
and discounts earned, for milk and fluid milk products purchased from
the previous supplier(s) approval to change supplier(s) shall be withheld.
(c) To provide an orderly flow of milk and milk products, all
requests for assistance related to, but not limited to section 2:52 2.1
must be filed with the Director of Marketing and Development within 30
days from date of last business transaction between the store and the
previous supplier; and shall include the location of the store, amount
in dispute, any attempted resolution and any other information necessary
for a determination of compliance and/or the administration and enforcement
of the applicable New Jersey statutes and rules.
2:52-3.1 Change in source of supply
(a) (No change.)
(b) Approval to change supplier(s) may be denied if the Director determines
through investigation that the offer violates
the Milk Control Act or rules and regulations issued pursuant thereto.
Also, until the dealer pays all indebtedness, less any legal rebates and
discounts earned for milk and fluid milk products purchased from the previous
supplier(s) approval to change supplier(s) shall be withheld.
(c) To provide an orderly flow of milk and milk products, all
requests for assistance related to, but not limited to this section must
be filed with the Director of Marketing and Development within 30 days
from date of last business transaction between the dealer and the previous
supplier; and shall include the location of the store, amount in dispute
any attempted resolution and any other information necessary for a determination
of compliance and/or the administration and enforcement of the applicable
New Jersey statutes and rules.
2:52-7.4 Raw milk costs defined
As used in this subchapter, the cost for raw and the reconstituted milk
shall be the total cost of acquiring the milk or butterfat, or milk solids-not-fat,
but shall not be less than the applicable class I price [under the joint
State-Federal orders in the respective New Jersey order areas or in the
case of butterfat and milk solids-not-fat, not less than the current market
price for such products as announced by the United States Department of
Agriculture for the New York City market] as determined by
the Federal Milk Market Administrator’s office Federal Order No.1
(Northeast Marketing area). The order differential zone used in the calculation
will be the New York, NY selected location as determined by the United
States Department of Agriculture
Charles M. Kuperus
Secretary, New Jersey Department of Agriculture
April 27, 2005
Alfred W. Murray
Director, Division of Marketing and Development
April 27, 2005
