I 

108TH CONGRESS 

1ST SESSION H. R. 324

To restore the consent of Congress to the Northeast Interstate Dairy Compact 

and to grant the consent of Congress to the Southern Dairy Compact, 

a Pacific Northwest Dairy Compact, and an Intermountain Dairy Compact. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 8, 2003

Mr. VITTER introduced the following bill; which was referred to the Committee 

on the Judiciary 

A BILL

To restore the consent of Congress to the Northeast Interstate Dairy Compact and to grant the consent of Congress to the Southern Dairy Compact, a Pacific Northwest Dairy Compact, and an Intermountain Dairy Compact.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Dairy Consumers and 

5 Producers Protection Act’’. 
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1 SEC. 2. NORTHEAST INTERSTATE DAIRY COMPACT. 

2 Section 147 of the Federal Agriculture Improvement 

3 and Reform Act of 1996 (7 U.S.C. 7256) is amended—

4 (1) in the matter preceding paragraph (1), by 

5 striking ‘‘States’’ and all that follows through 

6 ‘‘Vermont’’ and inserting ‘‘States of Connecticut, 

7 Delaware, Maine, Maryland, Massachusetts, New 

8 Hampshire, New Jersey, New York, Pennsylvania, 

9 Rhode Island, and Vermont’’; 

10 (2) by striking paragraphs (1), (3), and (7); 

11 (3) in paragraph (2), by striking ‘‘Class III–A’’ 

12 and inserting ‘‘Class IV’’; 

13 (4) by striking paragraph (4) and inserting the 

14 following: 

15 ‘‘(4) ADDITIONAL STATE.—Ohio is the only ad16 ditional State that may join the Northeast Interstate 

17 Dairy Compact.’’; 

18 (5) in paragraph (5), by striking ‘‘the projected 

19 rate of increase’’ and all that follows through ‘‘Sec20 retary’’ and inserting ‘‘the operation of the Compact 

21 price regulation during the fiscal year, as determined 

22 by the Secretary (in consultation with the Commis23 sion) using notice and comment procedures provided 

24 in section 553 of title 5, United States Code’’; and 
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1 (6) by redesignating paragraphs (2), (4), (5), 

2 and (6) as paragraphs (1), (2), (3), and (4), respec3 tively. 

4 SEC. 3. SOUTHERN DAIRY COMPACT. 

5 (a) IN GENERAL.—Congress consents to the South6 ern Dairy Compact entered into among the States of Ala7 bama, Arkansas, Georgia, Kansas, Kentucky, Louisiana, 

8 Mississippi, Missouri, North Carolina, Oklahoma, South 

9 Carolina, Tennessee, Virginia, and West Virginia, subject 

10 to the following conditions: 

11 (1) LIMITATION OF MANUFACTURING PRICE

12 REGULATION.—The Southern Dairy Compact Com13 mission may not regulate Class II, Class III, or 

14 Class IV milk used for manufacturing purposes or 

15 any other milk, other than Class I, or fluid milk, as 

16 defined by a Federal milk marketing order issued 

17 under section 8c of the Agricultural Adjustment Act 

18 (7 U.S.C. 608c), reenacted with amendments by the 

19 Agricultural Marketing Act of 1937 (referred to in 

20 this section as a ‘‘Federal milk marketing order’’) 

21 unless Congress has first consented to and approved 

22 such authority by a law enacted after the date of en23 actment of this joint resolution. 

24 (2) ADDITIONAL STATES.—Florida, Nebraska, 

25 and Texas are the only additional States that may 
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1 join the Southern Dairy Compact, individually or 

2 otherwise. 

3 (3) COMPENSATION OF COMMODITY CREDIT

4 CORPORATION.—Before the end of each fiscal year 

5 in which a Compact price regulation is in effect, the 

6 Southern Dairy Compact Commission shall com7 pensate the Commodity Credit Corporation for the 

8 cost of any purchases of milk and milk products by 

9 the Corporation that result from the operation of the 

10 Compact price regulation during the fiscal year, as 

11 determined by the Secretary (in consultation with 

12 the Commission) using notice and comment proce13 dures provided in section 553 of title 5, United 

14 States Code. 

15 (4) MILK MARKETING ORDER ADMINIS16 TRATOR.—At the request of the Southern Dairy 

17 Compact Commission, the Administrator of the ap18 plicable Federal milk marketing order shall provide 

19 technical assistance to the Compact Commission and 

20 be compensated for that assistance. 

21 (b) COMPACT.—The Southern Dairy Compact is sub22 stantially as follows:
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1 ‘‘ARTICLE I. STATEMENT OF 

2 PURPOSE, FINDINGS AND 

3 DECLARATION OF POLICY 

4 ‘‘§ 1. Statement of purpose, findings and declaration 

5 of policy 

6 ‘‘The purpose of this compact is to recognize the 

7 interstate character of the southern dairy industry and the 

8 prerogative of the states under the United States Con9 stitution to form an interstate commission for the south10 ern region. The mission of the commission is to take such 

11 steps as are necessary to assure the continued viability of 

12 dairy farming in the south, and to assure consumers of 

13 an adequate, local supply of pure and wholesome milk. 

14 ‘‘The participating states find and declare that the 

15 dairy industry is an essential agricultural activity of the 

16 south. Dairy farms, and associated suppliers, marketers, 

17 processors and retailers are an integral component of the 

18 region’s economy. Their ability to provide a stable, local 

19 supply of pure, wholesome milk is a matter of great impor20 tance to the health and welfare of the region. 

21 ‘‘The participating states further find that dairy 

22 farms are essential and they are an integral part of the 

23 region’s rural communities. The farms preserve land for 

24 agricultural purposes and provide needed economic stimuli 

25 for rural communities.
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1 ‘‘In establishing their constitutional regulatory au2 thority over the region’s fluid milk market by this com3 pact, the participating states declare their purpose that 

4 this compact neither displace the federal order system nor 

5 encourage the merging of federal orders. Specific provi6 sions of the compact itself set forth this basic principle. 

7 ‘‘Designed as a flexible mechanism able to adjust to 

8 changes in a regulated marketplace, the compact also con9 tains a contingency provision should the federal order sys10 tem be discontinued. In that event, the interstate commis11 sion is authorized to regulate the marketplace in replace12 ment of the order system. This contingent authority does 

13 not anticipate such a change, however, and should not be 

14 so construed. It is only provided should developments in 

15 the market other than establishment of this compact re16 sult in discontinuance of the order system. 

17 ‘‘By entering into this compact, the participating 

18 states affirm that their ability to regulate the price which 

19 southern dairy farmers receive for their product is essen20 tial to the public interest. Assurance of a fair and equi21 table price for dairy farmers ensures their ability to pro22 vide milk to the market and the vitality of the southern 

23 dairy industry, with all the associated benefits. 

24 ‘‘Recent, dramatic price fluctuations, with a pro25 nounced downward trend, threaten the viability and sta-
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1 bility of the southern dairy region. Historically, individual 

2 state regulatory action had been an effective emergency 

3 remedy available to farmers confronting a distressed mar4 ket. The federal order system, implemented by the Agri5 cultural Marketing Agreement Act of 1937, establishes 

6 only minimum prices paid to producers for raw milk, with7 out preempting the power of states to regulate milk prices 

8 above the minimum levels so established. 

9 ‘‘In today’s regional dairy marketplace, cooperative, 

10 rather than individual state action is needed to more effec11 tively address the market disarray. Under our constitu12 tional system, properly authorized states acting coopera13 tively may exercise more power to regulate interstate com14 merce than they may assert individually without such au15 thority. For this reason, the participating states invoke 

16 their authority to act in common agreement, with the con17 sent of Congress, under the compact clause of the Con18 stitution.

19 ‘‘ARTICLE II. DEFINITIONS AND 

20 RULES OF CONSTRUCTION 

21 ‘‘§ 2. Definitions 

22 ‘‘For the purposes of this compact, and of any supple23 mental or concurring legislation enacted pursuant thereto, 

24 except as may be otherwise required by the context: 
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1 ‘‘(1) ‘Class I milk’ means milk disposed of in 

2 fluid form or as a fluid milk product, subject to fur3 ther definition in accordance with the principles ex4 pressed in subdivision (b) of section three. 

5 ‘‘(2) ‘Commission’ means the Southern Dairy 

6 Compact Commission established by this compact. 

7 ‘‘(3) ‘Commission marketing order’ means regu8 lations adopted by the commission pursuant to sec9 tions nine and ten of this compact in place of a ter10 minated federal marketing order or state dairy regu11 lation. Such order may apply throughout the region 

12 or in any part or parts thereof as defined in the reg13 ulations of the commission. Such order may estab14 lish minimum prices for any or all classes of milk. 

15 ‘‘(4) ‘Compact’ means this interstate compact. 

16 ‘‘(5) ‘Compact over-order price’ means a min17 imum price required to be paid to producers for 

18 Class I milk established by the commission in regu19 lations adopted pursuant to sections nine and ten of 

20 this compact, which is above the price established in 

21 federal marketing orders or by state farm price reg22 ulations in the regulated area. Such price may apply 

23 throughout the region or in any part or parts there24 of as defined in the regulations of the commission.
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1 ‘‘(6) ‘Milk’ means the lacteral secretion of cows 

2 and includes all skim, butterfat, or other constitu3 ents obtained from separation or any other process. 

4 The term is used in its broadest sense and may be 

5 further defined by the commission for regulatory 

6 purposes. 

7 ‘‘(7) ‘Partially regulated plant’ means a milk 

8 plant not located in a regulated area but having 

9 Class I distribution within such area. Commission 

10 regulations may exempt plants having such distribu11 tion or receipts in amounts less than the limits de12 fined therein. 

13 ‘‘(8) ‘Participating state’ means a state which 

14 has become a party to this compact by the enact15 ment of concurring legislation. 

16 ‘‘(9) ‘Pool plant’ means any milk plant located 

17 in a regulated area. 

18 ‘‘(10) ‘Region’ means the territorial limits of 

19 the states which are parties to this compact. 

20 ‘‘(11) ‘Regulated area’ means any area within 

21 the region governed by and defined in regulations es22 tablishing a compact over-order price or commission 

23 marketing order.

24 ‘‘(12) ‘State dairy regulation’ means any state 

25 regulation of dairy prices, and associated assess-
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1 ments, whether by statute, marketing order or other2 wise. 

3 ‘‘§ 3. Rules of construction 

4 ‘‘(a) This compact shall not be construed to displace 

5 existing federal milk marketing orders or state dairy regu6 lation in the region but to supplement them. In the event 

7 some or all federal orders in the region are discontinued, 

8 the compact shall be construed to provide the commission 

9 the option to replace them with one or more commission 

10 marketing orders pursuant to this compact. 

11 ‘‘(b) The compact shall be construed liberally in order 

12 to achieve the purposes and intent enunciated in section 

13 one. It is the intent of this compact to establish a basic 

14 structure by which the commission may achieve those pur15 poses through the application, adaptation and develop16 ment of the regulatory techniques historically associated 

17 with milk marketing and to afford the commission broad 

18 flexibility to devise regulatory mechanisms to achieve the 

19 purposes of this compact. In accordance with this intent, 

20 the technical terms which are associated with market 

21 order regulation and which have acquired commonly un22 derstood general meanings are not defined herein but the 

23 commission may further define the terms used in this com24 pact and develop additional concepts and define additional 

25 terms as it may find appropriate to achieve its purposes.
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1 ‘‘ARTICLE III. COMMISSION 

2 ESTABLISHED 

3 ‘‘§ 4. Commission established 

4 ‘‘There is hereby created a commission to administer 

5 the compact, composed of delegations from each state in 

6 the region. The commission shall be known as the South7 ern Dairy Compact Commission. A delegation shall include 

8 not less than three nor more than five persons. Each dele9 gation shall include at least one dairy farmer who is en10 gaged in the production of milk at the time of appointment 

11 or reappointment, and one consumer representative. Dele12 gation members shall be residents and voters of, and sub13 ject to such confirmation process as is provided for in the 

14 appointing state. Delegation members shall serve no more 

15 than three consecutive terms with no single term of more 

16 than four years, and be subject to removal for cause. In 

17 all other respects, delegation members shall serve in ac18 cordance with the laws of the state represented. The com19 pensation, if any, of the members of a state delegation 

20 shall be determined and paid by each state, but their ex21 penses shall be paid by the commission. 

22 ‘‘§ 5. Voting requirements 

23 ‘‘All actions taken by the commission, except for the 

24 establishment or termination of an over-order price or 

25 commission marketing order, and the adoption, amend-
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1 ment or rescission of the commission’s by-laws, shall be 

2 by majority vote of the delegations present. Each state del3 egation shall be entitled to one vote in the conduct of the 

4 commission’s affairs. Establishment or termination of an 

5 over-order price or commission marketing order shall re6 quire at least a two-thirds vote of the delegations present. 

7 The establishment of a regulated area which covers all or 

8 part of a participating state shall require also the affirma9 tive vote of that state’s delegation. A majority of the dele10 gations from the participating states shall constitute a 

11 quorum for the conduct of the commission’s business. 

12 ‘‘§ 6. Administration and management 

13 ‘‘(a) The commission shall elect annually from among 

14 the members of the participating state delegations a chair15 person, a vice-chairperson, and a treasurer. The commis16 sion shall appoint an executive director and fix his or her 

17 duties and compensation. The executive director shall 

18 serve at the pleasure of the commission, and together with 

19 the treasurer, shall be bonded in an amount determined 

20 by the commission. The commission may establish through 

21 its by-laws an executive committee composed of one mem22 ber elected by each delegation. 

23 ‘‘(b) The commission shall adopt by-laws for the con24 duct of its business by a two-thirds vote, and shall have 

25 the power by the same vote to amend and rescind these 
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1 by-laws. The commission shall publish its by-laws in con2 venient form with the appropriate agency or officer in each 

3 of the participating states. The by-laws shall provide for 

4 appropriate notice to the delegations of all commission 

5 meetings and hearings and of the business to be trans6 acted at such meetings or hearings. Notice also shall be 

7 given to other agencies or officers of participating states 

8 as provided by the laws of those states.

9 ‘‘(c) The commission shall file an annual report with 

10 the Secretary of Agriculture of the United States, and 

11 with each of the participating states by submitting copies 

12 to the governor, both houses of the legislature, and the 

13 head of the state department having responsibilities for 

14 agriculture. 

15 ‘‘(d) In addition to the powers and duties elsewhere 

16 prescribed in this compact, the commission shall have the 

17 power: 

18 ‘‘(1) To sue and be sued in any state or federal 

19 court; 

20 ‘‘(2) To have a seal and alter the same at pleas21 ure; 

22 ‘‘(3) To acquire, hold, and dispose of real and 

23 personal property by gift, purchase, lease, license, or 

24 other similar manner, for its corporate purposes;
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1 ‘‘(4) To borrow money and issue notes, to pro2 vide for the rights of the holders thereof and to 

3 pledge the revenue of the commission as security 

4 therefor, subject to the provisions of section eighteen 

5 of this compact; 

6 ‘‘(5) To appoint such officers, agents, and em7 ployees as it may deem necessary, prescribe their 

8 powers, duties and qualifications; and 

9 ‘‘(6) To create and abolish such offices, employ10 ments and positions as it deems necessary for the 

11 purposes of the compact and provide for the re12 moval, term, tenure, compensation, fringe benefits, 

13 pension, and retirement rights of its officers and em14 ployees. The commission may also retain personal 

15 services on a contract basis. 

16 ‘‘§ 7. Rulemaking power 

17 ‘‘In addition to the power to promulgate a compact 

18 over-order price or commission marketing orders as pro19 vided by this compact, the commission is further empow20 ered to make and enforce such additional rules and regula21 tions as it deems necessary to implement any provisions 

22 of this compact, or to effectuate in any other respect the 

23 purposes of this compact. 
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1 ‘‘ARTICLE IV. POWERS OF THE 

2 COMMISSION 

3 ‘‘§ 8. Powers to promote regulatory uniformity, sim4 plicity, and interstate cooperation 

5 ‘‘The commission is hereby empowered to: 

6 ‘‘(1) Investigate or provide for investigations or 

7 research projects designed to review the existing 

8 laws and regulations of the participating states, to 

9 consider their administration and costs, to measure 

10 their impact on the production and marketing of 

11 milk and their effects on the shipment of milk and 

12 milk products within the region. 

13 ‘‘(2) Study and recommend to the participating 

14 states joint or cooperative programs for the adminis15 tration of the dairy marketing laws and regulations 

16 and to prepare estimates of cost savings and benefits 

17 of such programs. 

18 ‘‘(3) Encourage the harmonious relationships 

19 between the various elements in the industry for the 

20 solution of their material problems. Conduct 

21 symposia or conferences designed to improve indus22 try relations, or a better understanding of problems. 

23 ‘‘(4) Prepare and release periodic reports on ac24 tivities and results of the commission’s efforts to the 

25 participating states.
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1 ‘‘(5) Review the existing marketing system for 

2 milk and milk products and recommend changes in 

3 the existing structure for assembly and distribution 

4 of milk which may assist, improve or promote more 

5 efficient assembly and distribution of milk. 

6 ‘‘(6) Investigate costs and charges for pro7 ducing, hauling, handling, processing, distributing, 

8 selling and for all other services performed with re9 spect to milk. 

10 ‘‘(7) Examine current economic forces affecting 

11 producers, probable trends in production and con12 sumption, the level of dairy farm prices in relation 

13 to costs, the financial conditions of dairy farmers, 

14 and the need for an emergency order to relieve crit15 ical conditions on dairy farms.

16 ‘‘§ 9. Equitable farm prices 

17 ‘‘(a) The powers granted in this section and section 

18 ten shall apply only to the establishment of a compact 

19 over-order price, so long as federal milk marketing orders 

20 remain in effect in the region. In the event that any or 

21 all such orders are terminated, this article shall authorize 

22 the commission to establish one or more commission mar23 keting orders, as herein provided, in the region or parts 

24 thereof as defined in the order. 
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1 ‘‘(b) A compact over-order price established pursuant 

2 to this section shall apply only to Class I milk. Such com3 pact over-order price shall not exceed one dollar and fifty 

4 cents per gallon at Atlanta, Ga., however, this compact 

5 over-order price shall be adjusted upward or downward at 

6 other locations in the region to reflect differences in min7 imum federal order prices. Beginning in nineteen hundred 

8 ninety, and using that year as a base, the foregoing one 

9 dollar fifty cents per gallon maximum shall be adjusted 

10 annually by the rate of change in the Consumer Price 

11 Index as reported by the Bureau of Labor Statistics of 

12 the United States Department of Labor. For purposes of 

13 the pooling and equalization of an over-order price, the 

14 value of milk used in other use classifications shall be cal15 culated at the appropriate class price established pursuant 

16 to the applicable federal order or state dairy regulation 

17 and the value of unregulated milk shall be calculated in 

18 relation to the nearest prevailing class price in accordance 

19 with and subject to such adjustments as the commission 

20 may prescribe in regulations.

21 ‘‘(c) A commission marketing order shall apply to all 

22 classes and uses of milk. 

23 ‘‘(d) The commission is hereby empowered to estab24 lish a compact over-order price for milk to be paid by pool 

25 plants and partially regulated plants. The commission is 
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1 also empowered to establish a compact over-order price to 

2 be paid by all other handlers receiving milk from pro3 ducers located in a regulated area. This price shall be es4 tablished either as a compact over-order price or by one 

5 or more commission marketing orders. Whenever such a 

6 price has been established by either type of regulation, the 

7 legal obligation to pay such price shall be determined sole8 ly by the terms and purpose of the regulation without re9 gard to the situs of the transfer of title, possession or any 

10 other factors not related to the purposes of the regulation 

11 and this compact. Producer-handlers as defined in an ap12 plicable federal market order shall not be subject to a com13 pact over-order price. The commission shall provide for 

14 similar treatment of producer-handlers under commission 

15 marketing orders. 

16 ‘‘(e) In determining the price, the commission shall 

17 consider the balance between production and consumption 

18 of milk and milk products in the regulated area, the costs 

19 of production including, but not limited to the price of 

20 feed, the cost of labor including the reasonable value of 

21 the producer’s own labor and management, machinery ex22 pense, and interest expense, the prevailing price for milk 

23 outside the regulated area, the purchasing power of the 

24 public and the price necessary to yield a reasonable return 

25 to the producer and distributor.
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1 ‘‘(f) When establishing a compact over-order price, 

2 the commission shall take such other action as is necessary 

3 and feasible to help ensure that the over-order price does 

4 not cause or compensate producers so as to generate local 

5 production of milk in excess of those quantities necessary 

6 to assure consumers of an adequate supply for fluid pur7 poses. 

8 ‘‘(g) The commission shall whenever possible enter 

9 into agreements with state or federal agencies for ex10 change of information or services for the purpose of reduc11 ing regulatory burden and cost of administering the com12 pact. The commission may reimburse other agencies for 

13 the reasonable cost of providing these services. 

14 ‘‘§ 10. Optional provisions for pricing order 

15 ‘‘Regulations establishing a compact over-order price 

16 or a commission marketing order may contain, but shall 

17 not be limited to any of the following: 

18 ‘‘(1) Provisions classifying milk in accordance 

19 with the form in which or purpose for which it is 

20 used, or creating a flat pricing program. 

21 ‘‘(2) With respect to a commission marketing 

22 order only, provisions establishing or providing a 

23 method for establishing separate minimum prices for 

24 each use classification prescribed by the commission, 
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1 or a single minimum price for milk purchased from 

2 producers or associations of producers. 

3 ‘‘(3) With respect to an over-order minimum 

4 price, provisions establishing or providing a method 

5 for establishing such minimum price for Class I 

6 milk. 

7 ‘‘(4) Provisions for establishing either an over8 order price or a commission marketing order may 

9 make use of any reasonable method for establishing 

10 such price or prices including flat pricing and for11 mula pricing. Provision may also be made for loca12 tion adjustments, zone differentials and for competi13 tive credits with respect to regulated handlers who 

14 market outside the regulated area. 

15 ‘‘(5) Provisions for the payment to all pro16 ducers and associations of producers delivering milk 

17 to all handlers of uniform prices for all milk so deliv18 ered, irrespective of the uses made of such milk by 

19 the individual handler to whom it is delivered, or for 

20 the payment of producers delivering milk to the 

21 same handler of uniform prices for all milk delivered 

22 by them. 

23 ‘‘(A) With respect to regulations estab24 lishing a compact over-order price, the commis25 sion may establish one equalization pool within
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1 the regulated area for the sole purpose of equal2 izing returns to producers throughout the regu3 lated area. 

4 ‘‘(B) With respect to any commission mar5 keting order, as defined in section two, subdivi6 sion three, which replaces one or more termi7 nated federal orders or state dairy regulations, 

8 the marketing area of now separate state or 

9 federal orders shall not be merged without the 

10 affirmative consent of each state, voting 

11 through its delegation, which is partly or wholly 

12 included within any such new marketing area.

13 ‘‘(6) Provisions requiring persons who bring 

14 Class I milk into the regulated area to make com15 pensatory payments with respect to all such milk to 

16 the extent necessary to equalize the cost of milk pur17 chased by handlers subject to a compact over-order 

18 price or commission marketing order. No such provi19 sions shall discriminate against milk producers out20 side the regulated area. The provisions for compen21 satory payments may require payment of the dif22 ference between the Class I price required to be paid 

23 for such milk in the state of production by a federal 

24 milk marketing order or state dairy regulation and 
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1 the Class I price established by the compact over2 order price or commission marketing order. 

3 ‘‘(7) Provisions specially governing the pricing 

4 and pooling of milk handled by partially regulated 

5 plants. 

6 ‘‘(8) Provisions requiring that the account of 

7 any person regulated under the compact over-order 

8 price shall be adjusted for any payments made to or 

9 received by such persons with respect to a producer 

10 settlement fund of any federal or state milk mar11 keting order or other state dairy regulation within 

12 the regulated area. 

13 ‘‘(9) Provision requiring the payment by han14 dlers of an assessment to cover the costs of the ad15 ministration and enforcement of such order pursu16 ant to Article VII, Section 18(a). 

17 ‘‘(10) Provisions for reimbursement to partici18 pants of the Women, Infants and Children Special 

19 Supplemental Food Program of the United States 

20 Child Nutrition Act of 1966. 

21 ‘‘(11) Other provisions and requirements as the 

22 commission may find are necessary or appropriate to 

23 effectuate the purposes of this compact and to pro24 vide for the payment of fair and equitable minimum 

25 prices to producers. 
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1 ‘‘ARTICLE V. RULEMAKING 

2 PROCEDURE 

3 ‘‘§ 11. Rulemaking procedure 

4 ‘‘Before promulgation of any regulations establishing 

5 a compact over-order price or commission marketing 

6 order, including any provision with respect to milk supply 

7 under subsection 9(f), or amendment thereof, as provided 

8 in Article IV, the commission shall conduct an informal 

9 rulemaking proceeding to provide interested persons with 

10 an opportunity to present data and views. Such rule11 making proceeding shall be governed by section four of 

12 the Federal Administrative Procedure Act, as amended (5 

13 U.S.C. § 553). In addition, the commission shall, to the 

14 extent practicable, publish notice of rulemaking pro15 ceedings in the official register of each participating state. 

16 Before the initial adoption of regulations establishing a 

17 compact over-order price or a commission marketing order 

18 and thereafter before any amendment with regard to 

19 prices or assessments, the commission shall hold a public 

20 hearing. The commission may commence a rulemaking 

21 proceeding on its own initiative or may in its sole discre22 tion act upon the petition of any person including indi23 vidual milk producers, any organization of milk producers 

24 or handlers, general farm organizations, consumer or pub25 lic interest groups, and local, state or federal officials.
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1 ‘‘§ 12. Findings and referendum 

2 ‘‘(a) In addition to the concise general statement of 

3 basis and purpose required by section 4(b) of the Federal 

4 Administrative Procedure Act, as amended (5 U.S.C. 

5 § 553(c)), the commission shall make findings of fact with 

6 respect to: 

7 ‘‘(1) Whether the public interest will be served 

8 by the establishment of minimum milk prices to 

9 dairy farmers under Article IV. 

10 ‘‘(2) What level of prices will assure that pro11 ducers receive a price sufficient to cover their costs 

12 of production and will elicit an adequate supply of 

13 milk for the inhabitants of the regulated area and 

14 for manufacturing purposes.

15 ‘‘(3) Whether the major provisions of the order, 

16 other than those fixing minimum milk prices, are in 

17 the public interest and are reasonably designed to 

18 achieve the purposes of the order. 

19 ‘‘(4) Whether the terms of the proposed re20 gional order or amendment are approved by pro21 ducers as provided in section thirteen. 

22 ‘‘§ 13. Producer referendum 

23 ‘‘(a) For the purpose of ascertaining whether the 

24 issuance or amendment of regulations establishing a com25 pact over-order price or a commission marketing order, 

26 including any provision with respect to milk supply under 
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1 subsection 9(f), is approved by producers, the commission 

2 shall conduct a referendum among producers. The ref3 erendum shall be held in a timely manner, as determined 

4 by regulation of the commission. The terms and conditions 

5 of the proposed order or amendment shall be described 

6 by the commission in the ballot used in the conduct of 

7 the referendum, but the nature, content, or extent of such 

8 description shall not be a basis for attacking the legality 

9 of the order or any action relating thereto. 

10 ‘‘(b) An order or amendment shall be deemed ap11 proved by producers if the commission determines that it 

12 is approved by at least two-thirds of the voting producers 

13 who, during a representative period determined by the 

14 commission, have been engaged in the production of milk 

15 the price of which would be regulated under the proposed 

16 order or amendment. 

17 ‘‘(c) For purposes of any referendum, the commission 

18 shall consider the approval or disapproval by any coopera19 tive association of producers, qualified under the provi20 sions of the Act of Congress of February 18, 1922, as 

21 amended, known as the Capper–Volstead Act, bona fide 

22 engaged in marketing milk, or in rendering services for 

23 or advancing the interests of producers of such com24 modity, as the approval or disapproval of the producers 

25 who are members or stockholders in, or under contract
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1 with, such cooperative association of producers, except as 

2 provided in subdivision (1) hereof and subject to the provi3 sions of subdivision (2) through (5) hereof. 

4 ‘‘(1) No cooperative which has been formed to 

5 act as a common marketing agency for both coopera6 tives and individual producers shall be qualified to 

7 block vote for either. 

8 ‘‘(2) Any cooperative which is qualified to block 

9 vote shall, before submitting its approval or dis10 approval in any referendum, give prior written notice 

11 to each of its members as to whether and how it in12 tends to cast its vote. The notice shall be given in 

13 a timely manner as established, and in the form pre14 scribed, by the commission. 

15 ‘‘(3) Any producer may obtain a ballot from the 

16 commission in order to register approval or dis17 approval of the proposed order. 

18 ‘‘(4) A producer who is a member of a coopera19 tive which has provided notice of its intent to ap20 prove or not to approve a proposed order, and who 

21 obtains a ballot and with such ballot expresses his 

22 approval or disapproval of the proposed order, shall 

23 notify the commission as to the name of the coopera24 tive of which he or she is a member, and the com25 mission shall remove such producer’s name from the 
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1 list certified by such cooperative with its corporate 

2 vote.

3 ‘‘(5) In order to insure that all milk producers 

4 are informed regarding the proposed order, the com5 mission shall notify all milk producers that an order 

6 is being considered and that each producer may reg7 ister his approval or disapproval with the commis8 sion either directly or through his or her cooperative. 

9 ‘‘§ 14. Termination of over-order price or marketing 

10 order 

11 ‘‘(a) The commission shall terminate any regulations 

12 establishing an over-order price or commission marketing 

13 order issued under this article whenever it finds that such 

14 order or price obstructs or does not tend to effectuate the 

15 declared policy of this compact. 

16 ‘‘(b) The commission shall terminate any regulations 

17 establishing an over-order price or a commission mar18 keting order issued under this article whenever it finds 

19 that such termination is favored by a majority of the pro20 ducers who, during a representative period determined by 

21 the commission, have been engaged in the production of 

22 milk the price of which is regulated by such order; but 

23 such termination shall be effective only if announced on 

24 or before such date as may be specified in such marketing 

25 agreement or order.
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1 ‘‘(c) The termination or suspension of any order or 

2 provision thereof, shall not be considered an order within 

3 the meaning of this article and shall require no hearing, 

4 but shall comply with the requirements for informal rule5 making prescribed by section four of the Federal Adminis6 trative Procedure Act, as amended (5 U.S.C. § 553).

7 ‘‘ARTICLE VI. ENFORCEMENT 

8 ‘‘§ 15. Records; reports; access to premises 

9 ‘‘(a) The commission may by rule and regulation pre10 scribe record keeping and reporting requirements for all 

11 regulated persons. For purposes of the administration and 

12 enforcement of this compact, the commission is authorized 

13 to examine the books and records of any regulated person 

14 relating to his or her milk business and for that purpose, 

15 the commission’s properly designated officers, employees, 

16 or agents shall have full access during normal business 

17 hours to the premises and records of all regulated persons. 

18 ‘‘(b) Information furnished to or acquired by the 

19 commission officers, employees, or its agents pursuant to 

20 this section shall be confidential and not subject to disclo21 sure except to the extent that the commission deems dis22 closure to be necessary in any administrative or judicial 

23 proceeding involving the administration or enforcement of 

24 this compact, an over-order price, a compact marketing 

25 order, or other regulations of the commission. The com-
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•HR 324 IH 

1 mission may promulgate regulations further defining the 

2 confidentiality of information pursuant to this section. 

3 Nothing in this section shall be deemed to prohibit (i) the 

4 issuance of general statements based upon the reports of 

5 a number of handlers, which do not identify the informa6 tion furnished by any person, or (ii) the publication by 

7 direction of the commission of the name of any person vio8 lating any regulation of the commission, together with a 

9 statement of the particular provisions violated by such 

10 person. 

11 ‘‘(c) No officer, employee, or agent of the commission 

12 shall intentionally disclose information, by inference or 

13 otherwise, which is made confidential pursuant to this sec14 tion. Any person violating the provisions of this section 

15 shall, upon conviction, be subject to a fine of not more 

16 than one thousand dollars or to imprisonment for not 

17 more than one year, or to both, and shall be removed from 

18 office. The commission shall refer any allegation of a viola19 tion of this section to the appropriate state enforcement 

20 authority or United States Attorney. 

21 ‘‘§ 16. Subpoena; hearings and judicial review 

22 ‘‘(a) The commission is hereby authorized and em23 powered by its members and its properly designated offi24 cers to administer oaths and issue subpoenas throughout 

25 all signatory states to compel the attendance of witnesses
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•HR 324 IH 

1 and the giving of testimony and the production of other 

2 evidence. 

3 ‘‘(b) Any handler subject to an order may file a writ4 ten petition with the commission stating that any such 

5 order or any provision of any such order or any obligation 

6 imposed in connection therewith is not in accordance with 

7 law and praying for a modification thereof or to be ex8 empted therefrom. He shall thereupon be given an oppor9 tunity for a hearing upon such petition, in accordance with 

10 regulations made by the commission. After such hearing, 

11 the commission shall make a ruling upon the prayer of 

12 such petition which shall be final, if in accordance with 

13 law. 

14 ‘‘(c) The district courts of the United States in any 

15 district in which such handler is an inhabitant, or has his 

16 principal place of business, are hereby vested with jurisdic17 tion to review such ruling, provided a complaint for that 

18 purpose is filed within thirty days from the date of the 

19 entry of such ruling. Service of process in such pro20 ceedings may be had upon the commission by delivering 

21 to it a copy of the complaint. If the court determines that 

22 such ruling is not in accordance with law, it shall remand 

23 such proceedings to the commission with directions either 

24 (1) to make such ruling as the court shall determine to 

25 be in accordance with law, or (2) to take such further pro-
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•HR 324 IH 

1 ceedings as, in its opinion, the law requires. The pendency 

2 of proceedings instituted pursuant to this subdivision shall 

3 not impede, hinder, or delay the commission from obtain4 ing relief pursuant to section seventeen. Any proceedings 

5 brought pursuant to section seventeen, except where 

6 brought by way of counterclaim in proceedings instituted 

7 pursuant to this section, shall abate whenever a final de8 cree has been rendered in proceedings between the same 

9 parties, and covering the same subject matter, instituted 

10 pursuant to this section. 

11 ‘‘§ 17. Enforcement with respect to handlers 

12 ‘‘(a) Any violation by a handler of the provisions of 

13 regulations establishing an over-order price or a commis14 sion marketing order, or other regulations adopted pursu15 ant to this compact shall: 

16 ‘‘(1) Constitute a violation of the laws of each 

17 of the signatory states. Such violation shall render 

18 the violator subject to a civil penalty in an amount 

19 as may be prescribed by the laws of each of the par20 ticipating states, recoverable in any state or federal 

21 court of competent jurisdiction. Each day such viola22 tion continues shall constitute a separate violation. 

23 ‘‘(2) Constitute grounds for the revocation of li24 cense or permit to engage in the milk business under 

25 the applicable laws of the participating states.
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1 ‘‘(b) With respect to handlers, the commission shall 

2 enforce the provisions of this compact, regulations estab3 lishing an over-order price, a commission marketing order 

4 or other regulations adopted hereunder by: 

5 ‘‘(1) Commencing an action for legal or equi6 table relief brought in the name of the commission 

7 of any state or federal court of competent jurisdic8 tion; or

9 ‘‘(2) Referral to the state agency for enforce10 ment by judicial or administrative remedy with the 

11 agreement of the appropriate state agency of a par12 ticipating state. 

13 ‘‘(c) With respect to handlers, the commission may 

14 bring an action for injunction to enforce the provisions 

15 of this compact or the order or regulations adopted there16 under without being compelled to allege or prove that an 

17 adequate remedy of law does not exist. 

18 ‘‘ARTICLE VII. FINANCE 

19 ‘‘§ 18. Finance of start-up and regular costs 

20 ‘‘(a) To provide for its start-up costs, the commission 

21 may borrow money pursuant to its general power under 

22 section six, subdivision (d), paragraph four. In order to 

23 finance the costs of administration and enforcement of 

24 this compact, including payback of start-up costs, the 

25 commission is hereby empowered to collect an assessment
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•HR 324 IH 

1 from each handler who purchases milk from producers 

2 within the region. If imposed, this assessment shall be col3 lected on a monthly basis for up to one year from the date 

4 the commission convenes, in an amount not to exceed 

5 $.015 per hundredweight of milk purchased from pro6 ducers during the period of the assessment. The initial as7 sessment may apply to the projected purchases of handlers 

8 for the two-month period following the date the commis9 sion convenes. In addition, if regulations establishing an 

10 over-order price or a compact marketing order are adopt11 ed, they may include an assessment for the specific pur12 pose of their administration. These regulations shall pro13 vide for establishment of a reserve for the commission’s 

14 ongoing operating expenses. 

15 ‘‘(b) The commission shall not pledge the credit of 

16 any participating state or of the United States. Notes 

17 issued by the commission and all other financial obliga18 tions incurred by it, shall be its sole responsibility and no 

19 participating state or the United States shall be liable 

20 therefor. 

21 ‘‘§ 19. Audit and accounts 

22 ‘‘(a) The commission shall keep accurate accounts of 

23 all receipts and disbursements, which shall be subject to 

24 the audit and accounting procedures established under its 

25 rules. In addition, all receipts and disbursements of funds 
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•HR 324 IH 

1 handled by the commission shall be audited yearly by a 

2 qualified public accountant and the report of the audit 

3 shall be included in and become part of the annual report 

4 of the commission. 

5 ‘‘(b) The accounts of the commission shall be open 

6 at any reasonable time for inspection by duly constituted 

7 officers of the participating states and by any persons au8 thorized by the commission. 

9 ‘‘(c) Nothing contained in this article shall be con10 strued to prevent commission compliance with laws relat11 ing to audit or inspection of accounts by or on behalf of 

12 any participating state or of the United States. 

13 ‘‘ARTICLE VIII. ENTRY INTO 

14 FORCE; ADDITIONAL MEM15 BERS AND WITHDRAWAL 

16 ‘‘§ 20. Entry into force; additional members 

17 ‘‘The compact shall enter into force effective when 

18 enacted into law by any three states of the group of states 

19 composed of Alabama, Arkansas, Florida, Georgia, Ken20 tucky, Louisiana, Maryland, Mississippi, North Carolina, 

21 Oklahoma, South Carolina, Tennessee, Texas, Virginia 

22 and West Virginia and when the consent of Congress has 

23 been obtained.
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•HR 324 IH 

1 ‘‘§ 21. Withdrawal from compact 

2 ‘‘Any participating state may withdraw from this 

3 compact by enacting a statute repealing the same, but no 

4 such withdrawal shall take effect until one year after no5 tice in writing of the withdrawal is given to the commis6 sion and the governors of all other participating states. 

7 No withdrawal shall affect any liability already incurred 

8 by or chargeable to a participating state prior to the time 

9 of such withdrawal. 

10 ‘‘§ 22. Severability 

11 ‘‘If any part or provision of this compact is adjudged 

12 invalid by any court, such judgment shall be confined in 

13 its operation to the part or provision directly involved in 

14 the controversy in which such judgment shall have been 

15 rendered and shall not affect or impair the validity of the 

16 remainder of this compact. In the event Congress consents 

17 to this compact subject to conditions, said conditions shall 

18 not impair the validity of this compact when said condi19 tions are accepted by three or more compacting states. A 

20 compacting state may accept the conditions of Congress 

21 by implementation of this compact.’’. 

22 SEC. 4. PACIFIC NORTHWEST DAIRY COMPACT. 

23 Congress consents to a Pacific Northwest Dairy Com24 pact proposed for the States of California, Oregon, and 

25 Washington, subject to the following conditions: 
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•HR 324 IH 

1 (1) TEXT.—The text of the Pacific Northwest 

2 Dairy Compact shall be identical to the text of the 

3 Southern Dairy Compact, except as follows: 

4 (A) References to ‘‘south’’, ‘‘southern’’, 

5 and ‘‘Southern’’ shall be changed to ‘‘Pacific 

6 Northwest’’. 

7 (B) In section 9(b), the reference to ‘‘At8 lanta, Georgia’’ shall be changed to ‘‘Seattle, 

9 Washington’’. 

10 (C) In section 20, the reference to ‘‘any 

11 three’’ and all that follows shall be changed to 

12 ‘‘California, Oregon, and Washington.’’. 

13 (2) LIMITATION OF MANUFACTURING PRICE

14 REGULATION.—The Dairy Compact Commission es15 tablished to administer the Pacific Northwest Dairy 

16 Compact (referred to in this section as the ‘‘Com17 mission’’) may not regulate Class II, Class III, or 

18 Class IV milk used for manufacturing purposes or 

19 any other milk, other than Class I, or fluid milk, as 

20 defined by a Federal milk marketing order issued 

21 under section 8c of the Agricultural Adjustment Act 

22 (7 U.S.C. 608c), reenacted with amendments by the 

23 Agricultural Marketing Act of 1937 (referred to in 

24 this section as a ‘‘Federal milk marketing order’’). 
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1 (3) EFFECTIVE DATE.—Congressional consent 

2 under this section takes effect on the date (not later 

3 than 3 year after the date of enactment of this Act) 

4 on which the Pacific Northwest Dairy Compact is 

5 entered into by the second of the 3 States specified 

6 in the matter preceding paragraph (1). 

7 (4) COMPENSATION OF COMMODITY CREDIT

8 CORPORATION.—Before the end of each fiscal year 

9 in which a price regulation is in effect under the Pa10 cific Northwest Dairy Compact, the Commission 

11 shall compensate the Commodity Credit Corporation 

12 for the cost of any purchases of milk and milk prod13 ucts by the Corporation that result from the oper14 ation of the Compact price regulation during the fis15 cal year, as determined by the Secretary (in con16 sultation with the Commission) using notice and 

17 comment procedures provided in section 553 of title 

18 5, United States Code. 

19 (5) MILK MARKETING ORDER ADMINIS20 TRATOR.—At the request of the Commission, the 

21 Administrator of the applicable Federal milk mar22 keting order shall provide technical assistance to the 

23 Commission and be compensated for that assistance.
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•HR 324 IH 

1 SEC. 5. INTERMOUNTAIN DAIRY COMPACT. 

2 Congress consents to an Intermountain Dairy Com3 pact proposed for the States of Colorado, Nevada, and 

4 Utah, subject to the following conditions: 

5 (1) TEXT.—The text of the Intermountain 

6 Dairy Compact shall be identical to the text of the 

7 Southern Dairy Compact, except as follows: 

8 (A) In section 1, the references to ‘‘south9 ern’’ and ‘‘south’’ shall be changed to ‘‘Inter10 mountain’’ and ‘‘Intermountain region’’, respec11 tively. 

12 (B) References to ‘‘Southern’’ shall be 

13 changed to ‘‘Intermountain ’’. 

14 (C) In section 9(b), the reference to ‘‘At15 lanta, Georgia’’ shall be changed to ‘‘Salt Lake 

16 City, Utah’’. 

17 (D) In section 20, the reference to ‘‘any 

18 three’’ and all that follows shall be changed to 

19 ‘‘Colorado, Nevada, and Utah.’’. 

20 (2) LIMITATION OF MANUFACTURING PRICE

21 REGULATION.—The Dairy Compact Commission es22 tablished to administer the Intermountain Dairy 

23 Compact (referred to in this section as the ‘‘Com24 mission’’) may not regulate Class II, Class III, or 

25 Class IV milk used for manufacturing purposes or 

26 any other milk, other than Class I, or fluid milk, as 
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•HR 324 IH 

1 defined by a Federal milk marketing order issued 

2 under section 8c of the Agricultural Adjustment Act 

3 (7 U.S.C. 608c), reenacted with amendments by the 

4 Agricultural Marketing Act of 1937 (referred to in 

5 this section as a ‘‘Federal milk marketing order’’). 

6 (3) EFFECTIVE DATE.—Congressional consent 

7 under this section takes effect on the date (not later 

8 than 3 year after the date of enactment of this Act) 

9 on which the Intermountain Dairy Compact is en10 tered into by the second of the 3 States specified in 

11 the matter preceding paragraph (1). 

12 (4) COMPENSATION OF COMMODITY CREDIT

13 CORPORATION.—Before the end of each fiscal year 

14 in which a price regulation is in effect under the 

15 Intermountain Dairy Compact, the Commission shall 

16 compensate the Commodity Credit Corporation for 

17 the cost of any purchases of milk and milk products 

18 by the Corporation that result from the operation of 

19 the Compact price regulation during the fiscal year, 

20 as determined by the Secretary (in consultation with 

21 the Commission) using notice and comment proce22 dures provided in section 553 of title 5, United 

23 States Code. 

24 (5) MILK MARKETING ORDER ADMINIS25 TRATOR.—At the request of the Commission, the 
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•HR 324 IH 

1 Administrator of the applicable Federal milk mar2 keting order shall provide technical assistance to the 

3 Commission and be compensated for that assistance.

Æ