(1) The Milk Control Bureau shall have full authority to direct the transfer of surplus milk as necessary to implement ARM 32.24.524. Any pool handler shall be deemed in compliance with the requirements of ARM 32.24.524 if it calls for surplus milk or makes surplus milk available in the following manner:

(a) On Wednesday of the preceding week, a pool handler in need of milk may telephone or fax its milk needs for the coming week to a pool handler reasonably believed to have surplus milk and that pool handler shall fax its confirmation or rejection of the order back by Friday of that same week.

(b) Unless otherwise agreed, delivery to the purchasing pool handler shall be the responsibility of the selling pool handler.

(c) The Milk Control Bureau shall have the authority to issue alternative or additional procedures as necessary to implement this provision.

(2) The purchase price at which a pool handler must make surplus milk available and at which a pool handler must purchase surplus milk shall be as follows:

(a) The price per hundredweight of the raw Montana milk shall be based on the usage by class of the purchasing pool handler for such milk. The listed prices for butterfat and skim by class for the month in which such surplus milk is shipped will be used to calculate its value.

(b) Since the usage is not known until the next month after the applicable sale(s) has taken place, the most recent month's quota price will be used. Once the Milk Control Bureau has calculated usage and pricing for the month in which the sale(s) took place, the bureau will adjust the raw milk pricing to reflect the proper price. This information will be provided to the selling and purchasing pool handlers, and it will be their responsibility to make the appropriate invoice and payment adjustments.

(c) No premiums, hauling, or handling fees will be charged to the purchasing pool handler.

(3) Pool handlers will use the following method and manner of payment between them for surplus milk purchases:

(a) A pool handler who purchases surplus milk agrees to pay in cash the purchase price for all milk delivered on a weekly basis. All milk purchased each weekly period shall be paid for in full on the Friday of the following week by depositing payment in the United States mail.

(b) The selling handler will fax invoices of the surplus milk sales to the purchasing handler and the Milk Control Bureau. These invoices will include:

(i) weights and butterfat tests; those weights and butterfat tests will be deemed accurate unless contested by the purchaser; and

(ii) butterfat and skim prices based on the most recently available quota price for each component.

(c) The purchasing handler will then mail payment directly to the seller, with a copy of payment faxed to the Milk Control Bureau.

(d) In turn, the Milk Control Bureau will compile the invoices and record of payments, monitoring them for accuracy. In the event of an error, the bureau will immediately fax this information to both purchasing and selling handlers. At the end of the month, once usage and actual pricing are known, the bureau will fax a statement to both the selling and purchasing handlers, reflecting the calculations outlined in (2) (b) .

(e) Per ARM 32.24.516(1) , any freight costs incurred by the selling pool handler in shipment of this surplus milk may be deducted from that handler's pool account. It is the responsibility of the selling pool handler to provide this information to the Milk Control Bureau no later than the eighth business day of the month following shipment of such milk.

(4) All surplus milk purchased and sold hereunder must, at the time of delivery, meet all applicable local, state, and federal laws and regulations and any tendered surplus milk which does not meet such standards may be rejected.

(5) The weight and butterfat tests shall be determined on the basis of producer ticket weights and tests. If the purchasing pool handler contests the reported weights it shall notify the Milk Control Bureau, which shall reconcile any discrepancies.

(6) No pool handler shall be obligated to make surplus milk available to any other pool handler who is then in default on payment for any previous purchases of surplus milk. Any pool handler who makes surplus milk available and who has not been paid for that milk because of default in payment by the purchasing pool handler shall retain a direct right of action against the defaulting pool handler for the monies owed together with interest at the rate of 1.5% per month plus attorney's fees and costs.