To ensure regulatory equity between and among all dairy farmers and handlers for sales of packaged fluid milk in federally regulated milk marketing areas and into certain non-federally regulated milk marketing areas from federally regulated areas, and for other purposes.

Summary: Milk Regulatory Equity Act of 2005 - Amends the the Agricultural Adjustment Act, reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, to subject specified Class I milk handlers (including producer-handlers) to federal milk marketing order minimum and uniform price requirements applicable to the county in which the plant of the handler is located, at federal order class prices, if the handler has packaged fluid milk product route dispositions, or sales of packaged fluid milk products to other plants, in a marketing area located in a state that requires handlers to pay minimum prices for raw milk purchases.

Exempts from such provision: (1) a handler operating a nonpool plant; (2) a producer-handler for any month during which packaged fluid milk route dispositions and sales to other plants are less than three million pounds of milk; or (3) specified handlers whose fluid milk products are disposed of as route dispositions or transfers, or whose dispositions or transfers are in states requiring minimum prices for raw milk purchases.

Subjects a Class I milk handler in the Arizona-Las Vegas marketing area (Order 131) to minimum milk price requirements for any month in which the handler distributes in such area at least three million pounds of Class I products from his or her own production.

Excludes Nevada from federal milk marketing orders.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Milk Regulatory Equity Act of 
2005''.

SEC. 2. MILK REGULATORY EQUITY.

    (a) Minimum Milk Prices for Handlers; Exemption.--Section 8c(5) of 
the Agricultural Adjustment Act (7 U.S.C. 608c(5)), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, is 
amended by adding at the end the following new subparagraphs:
    ``(M) Minimum Milk Prices for Handlers.--
            ``(i) Application of minimum price requirements.--
        Notwithstanding any other provision of this section, a milk 
        handler described in clause (ii) shall be subject to all of the 
        minimum and uniform price requirements of a Federal milk 
        marketing order issued pursuant to this section applicable to 
        the county in which the plant of the handler is located, at 
        Federal order class prices, if the handler has packaged fluid 
        milk product route dispositions, or sales of packaged fluid 
        milk products to other plants, in a marketing area located in a 
        State that requires handlers to pay minimum prices for raw milk 
        purchases.
            ``(ii) Covered milk handlers.--Except as provided in clause 
        (iv), clause (i) applies to a handler of Class I milk products 
        (including a producer-handler or producer operating as a 
        handler) that--
                    ``(I) operates a plant that is located within the 
                boundaries of a Federal order milk marketing area (as 
                those boundaries are in effect as of the date of the 
                enactment of this subparagraph);
                    ``(II) has packaged fluid milk product route 
                dispositions, or sales of packaged fluid milk products 
                to other plants, in a milk marketing area located in a 
                State that requires handlers to pay minimum prices for 
                raw milk purchases; and
                    ``(III) is not otherwise obligated by a Federal 
                milk marketing order, or a regulated milk pricing plan 
                operated by a State, to pay minimum class prices for 
                the raw milk that is used for such dispositions or 
                sales.
            ``(iii) Obligation to pay minimum class prices.--For 
        purposes of clause (ii)(III), the Secretary may not consider a 
        handler of Class I milk products to be obligated by a Federal 
        milk marketing order to pay minimum class prices for raw milk 
        unless the handler operates the plant as a fully regulated 
        fluid milk distributing plant under a Federal milk marketing 
        order.
            ``(iv) Certain handlers exempted.--Clause (i) does not 
        apply to--
                    ``(I) a handler (otherwise described in clause 
                (ii)) that operates a nonpool plant (as defined in 
                section 1000.8(e) of title 7, Code of Federal 
                Regulations, as in effect on the date of the enactment 
                of this subparagraph);
                    ``(II) a producer-handler (otherwise described in 
                clause (ii)) for any month during which the producer-
                handler has route dispositions, and sales to other 
                plants, of packaged fluid milk products equaling less 
                than 3,000,000 pounds of milk; or
                    ``(III) a handler (otherwise described in clause 
                (ii)) for any month during which--
                            ``(aa) less than 25 percent of the total 
                        quantity of fluid milk products physically 
                        received at the plant of the handler (excluding 
                        concentrated milk received from another plant 
                        by agreement for other than Class I use) is 
                        disposed of as route disposition or is 
                        transferred in the form of packaged fluid milk 
                        products to other plants; or
                            ``(bb) less than 25 percent in aggregate of 
                        the route disposition or transfers are in a 
                        marketing area or areas located in one or more 
                        States that require handlers to pay minimum 
                        prices for raw milk purchases.
    ``(N) Exemption for Certain Milk Handlers.--Notwithstanding any 
other provision of this section, no handler with distribution of Class 
I milk products in the marketing area described in Order No. 131 shall 
be exempt during any month from any minimum price requirement 
established by the Secretary under this subsection if the total 
distribution of Class I products during the preceding month of any such 
handler's own farm production exceeds 3,000,000 pounds.''.
    (b) Exclusion of Nevada From Federal Milk Marketing Orders.--
Section 8c(11) of the Agriculture Adjustment Act (7 U.S.C. 608c(11)), 
reenacted with amendments by the Agriculture Marketing Agreement Act of 
1937, is amended--
            (1) in subparagraph (C), by striking the last sentence; and
            (2) by adding at the end the following new subparagraph:
    ``(D) In the case of milk and its products, no county or other 
political subdivision of the State of Nevada shall be within the 
marketing area definition of any order issued under this section.''.
    (c) Records and Facility Requirements.--Notwithstanding any other 
provision of this section, or the amendments made by this section, a 
milk handler (including a producer-handler or a producer operating as a 
handler) that is subject to regulation under this section or an 
amendment made by this section shall comply with the requirements of 
section 1000.27 of title 7, Code of Federal Regulations, or a successor 
regulation, relating to handler responsibility for records or 
facilities.
    (d) Effective Date and Implementation.--The amendments made by this 
section take effect on the first day of the first month beginning more 
than 15 days after the date of the enactment of this Act. To accomplish 
the expedited implementation of these amendments, effective on the date 
of the enactment of this Act, the Secretary of Agriculture shall 
include in the pool distributing plant provisions of each Federal milk 
marketing order issued under subparagraph (B) of section 8c(5) of the 
Agriculture Adjustment Act (7 U.S.C. 608c(5)), reenacted with 
amendments by the Agriculture Marketing Agreement Act of 1937, a 
provision that a handler described in subparagraph (M) of such section, 
as added by subsection (a) of this section, will be fully regulated by 
the order in which the handler's distributing plant is located. These 
amendments shall not be subject to a referendum under section 8c(19) of 
such Act (7 U.S.C. 608c(19)).