I

103D CONGRESS

2D SESSION H. R. 4560

To provide the consent of Congress to the Northeast Interstate Dairy

Compact.

IN THE HOUSE OF REPRESENTATIVES

JUNE 9, 1994

Mr. OLVER (for himself, Mrs. JOHNSON of Connecticut, Mr. NEAL of Massachusetts, Mr. ANDREWS of Maine, Mr. BLUTE, Ms. DELAURO, Mr.

GEJDENSON, Mr. KENNEDY, Mrs. KENNELLY, Mr. MACHTLEY, Mr. MARKEY, Mr. MCHUGH, Mr. MEEHAN, Mr. REED, Mr. SANDERS, Ms.

SNOWE, Mr. STUDDS, Mr. SWETT, Mr. TORKILDSEN, Mr. ZELIFF, and

Mr. FRANKS of Connecticut) introduced the following bill; which was referred to the Committee on the Judiciary

A BILL

To provide the consent of Congress to the Northeast

Interstate 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. CONGRESSIONAL CONSENT.

4 That Congress hereby consents to the Northeast

5 Interstate Dairy Compact entered into between the States

6 of Vermont, New Hampshire, Maine, Connecticut, Rhode

7 Island, and Massachusetts, which Compact is substantially

8 as follows:
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1 ARTICLE I. STATEMENT OF PURPOSE,

2 FINDINGS AND DECLARATION OF POLICY

3 § 1. STATEMENT OF PURPOSE, FINDINGS AND

4 DECLARATION OF POLICY

5 The purpose of this Compact is to recognize by con6 stitutional prerequisite the interstate character of the

7 northeast dairy industry and to form an interstate Com8 mission for the northeast region. The mission of the Com9 mission is to take such steps as are necessary to assure

10 the continued viability of dairy farming in the northeast,

11 and to assure consumers of an adequate, local supply of

12 pure and wholesome milk.

13 The participating States find and declare that the

14 diary industry is the paramount agricultural activity of the

15 northeast. Dairy farms, and associated suppliers, market16 ers, processors and retailers, are an integral component

17 of the region’s economy. Their ability to provide a stable,

18 local supply of pure, wholesome milk is a matter of great

19 importance to the health and welfare of the region.

20 The participating States further find that dairy

21 farms are essential to the region’s rural communities and

22 character. The farms preserve open spaces, sculpt the

23 landscape and provide the land base for a diversity of rec24 reational pursuits. In defining the rural character of our
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1 communities and landscape, dairy farms also provide a

2 major draw for our tourist industries.

3 By entering into this Compact, the participating

4 States affirm that their ability to regulate the price which

5 northeast dairy farmers receive for their product is essen6 tial to the pubic interest. Assurance of a fair and equitable

7 price for dairy farmers ensures their ability to provide

8 milk to the market and the vitality of the northeast dairy

9 industry, with all the associated benefits.

10 Recent, dramatic price fluctuations, with a pro11 nounced downward trend, threaten the viability and stabil12 ity of the northeast dairy region. Historically, individual

13 State regulatory action has been an effective emergency

14 remedy available to farmers confronting a distressed mar15 ket. The Federal order system, implemented by the Agri16 cultural Marketing Agreement Act of 1937, establishes

17 only minimum prices for dairy products, without preempt18 ing the power of States to regulate milk prices above the

19 minimum levels so established. Based on this authority,

20 each State in the region has individually attempted to im21 plement at least 1 regulatory program in response to the

22 current dairy industry crisis.

23 In today’s regional dairy marketplace, cooperative,

24 rather than individual State action may address more ef25 fectively the market disarray. Under our constitutional
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1 system, properly authorized, States acting cooperatively

2 may exercise more power to regulate interstate commerce

3 than they may assert individually without such authority.

4 For this reason, the participating States invoke their au5 thority to act in common agreement, with the consent of

6 Congress, under the Compact clause of the Constitution.

7 In establishing their constitutional regulatory author8 ity over the region’s fluid milk market by this Compact,

9 the participating States declare their purpose that this

10 Compact neither displace the Federal order system nor en11 courage the merging of Federal orders. Specific provisions

12 of the Compact itself set forth this basic principle.

13 Designed as a flexible mechanism able to adjust to

14 changes in a regulated marketplace, the Compact also con15 tains a contingency provision should the Federal order

16 system be discontinued. In that event, the interstate Com17 mission is authorized to regulate the marketplace in re18 placement of the order system. This contingent authority

19 does not anticipate such a change, however, and should

20 not be so construed. It is only provided should develop21 ments in the market other than establishment of this Com22 pact result in discontinuance of the order system.
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1 ARTICLE II. DEFINITIONS AND RULES OF

2 CONSTRUCTION

3 § 2. DEFINITIONS

4 For the purpose of this Compact, and of any supple5 ment or concurring legislation enacted pursuant thereto,

6 except as may be otherwise required by the context:

7 (1) ‘‘Commission’’ means the Commission es8 tablished by this Compact.

9 (2) ‘‘Compact’’ means this interstate Compact.

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

11 States which are or become parties to this Compact.

12 (4) ‘‘Participating State’’ means a State which

13 has become a party to this Compact by the enact14 ment of concurring legislation.

15 (5) ‘‘Regulated area’’ means any area within

16 the region governed by and defined in regulations es17 tablishing a Compact over-order price or Commis18 sion marketing order.

19 (6) ‘‘Pool plant’’ means any milk plant located

20 in a regulated area.

21 (7) ‘‘Partially regulated plan’’ means a milk

22 plant not located in a regulated area but having

23 Class I distribution within such area, or receipts

24 from producers located in such area. Commission

25 regulations may exempt plants having such distribu-
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1 tion or receipts in amounts less than the limits de2 fined therein.

3 (8) ‘‘Compact over-order price’’ means a mini4 mum price required to be paid to producers for

5 Class I milk established by the Commission in regu6 lations adopted pursuant to sections 9 and 10 of this

7 Compact, which is above the price established in

8 Federal marketing orders or by State farm price

9 regulation in the regulated area. Such price may

10 apply throughout the region or in any part or parts

11 thereof as defined in the regulations of the Commis12 sion.

13 (9) ‘‘Commission marketing order’’ means regu14 lations adopted by the Commission pursuant to sec15 tions 9 and 10 of this Compact in place of a termi16 nated Federal marketing order or State dairy regu17 lation. Such order may apply throughout the region

18 or in any part or parts thereof as defined in the reg19 ulations of the Commission. Such order may estab20 lish minimum prices for any or all classes of milk.

21 (10) ‘‘Milk’’ means the lacteal secretion of cows

22 and includes all skim, butterfat, or other constitu23 ents obtained from separation or any other process.

24 The term is used in its broadest sense and may be
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1 further defined by the Commission for regulatory

2 purposes.

3 (11) ‘‘Class I milk’’ means milk disposed of in

4 fluid form or as a fluid milk product, subject to fur5 ther definition in accordance with the principles ex6 pressed in subsection (b) of section 3.

7 (12) ‘‘State dairy regulation’’ means any State

8 regulation of dairy prices, and associated assess9 ments, whether by statute, marketing order or other10 wise.

11 § 3. RULES OF CONSTRUCTION

12 (a) This Compact shall not be construed to displace

13 existing Federal milk marketing orders or State dairy reg14 ulation in the region but to supplement them. In the event

15 some or all Federal orders in the region are discontinued,

16 the Compact shall be construed to provide the Commission

17 the option to replace them with 1 or more Commission

18 marketing orders pursuant to this Compact.

19 (b) This Compact shall be construed liberally in order

20 to achieve the purposes and intent enunciated in section

21 1. It is the intent of this Compact to establish a basic

22 structure by which the Commission may achieve those pur23 poses through the application, adaptation and develop24 ment of the regulatory techniques historically associated

25 with milk marketing and to afford the Commission broad
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1 flexibility to devise regulatory mechanisms to achieve the

2 purposes of this Compact. In accordance with this intent,

3 the technical terms which are associated with market

4 order regulation and which have acquired commonly un5 derstood general meanings are not defined herein but the

6 Commission may further define the terms used in this

7 Compact and develop additional concepts and define addi8 tional terms as it may find appropriate to achieve its pur9 poses.

10 ARTICLE III. COMMISSION ESTABLISHED

11 § 4. COMMISSION ESTABLISHED

12 There is hereby created a Commission to administer

13 the Compact, composed of delegations from each State in

14 the region. A delegation shall include not less than 3 nor

15 more than 5 persons. Each delegation shall include at

16 least 1 dairy farmer who is engaged in the production of

17 milk at the time of appointment or reappointment, and

18 1 consumer representative. Delegation members shall be

19 residents and voters of, and subject to such confirmation

20 process as is provided for in, the appointing State. Delega21 tion members shall serve no more than 3 consecutive

22 terms with no single term of more than 4 years, and be

23 subject to removal for cause. In all other respects, delega24 tion members shall serve in accordance with the laws of

25 the State represented. The compensation, if any, of the
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1 members of a State delegation shall be determined and

2 paid by each State, but their expenses shall be paid by

3 the Commission. Each State delegation shall be entitled

4 to 1 vote in the conduct of the Commission’s affairs.

5 § 5. VOTING REQUIREMENTS

6 All actions taken by the Commission, except for the

7 establishment or termination of an over-order price or

8 Commission marketing order, and the adoption, amend9 ment or rescission of the Commission’s bylaws, shall be

10 by majority vote of the delegations present. Establishment

11 or termination of an over-order price or Commission mar12 keting order shall require at least a two-thirds vote of the

13 delegations present. The establishment of a regulated area

14 which covers all or part of a participating State shall re15 quire also the affirmative vote of that State’s delegation.

16 A majority of the delegations from the participating States

17 shall constitute a quorum for the conduct of the Commis18 sion’s business.

19 § 6. ADMINISTRATION AND MANAGEMENT

20 (a) The Commission shall elect annually from among

21 the members of the participating State delegations a

22 chairperson, a vice-chairperson, and a treasurer. The

23 Commission shall appoint an executive director and fix his

24 or her duties and compensation. The executive director

25 shall serve at the pleasure of the Commission, and, to-
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1 gether with the treasurer, shall be bonded in an amount

2 determined by the Commission. The Commission may es3 tablish through its bylaws an executive committee com4 posed of 1 member elected by each delegation.

5 (b) The Commission shall adopt bylaws for the con6 duct of its business by a two-third vote, and shall have

7 the power by the same vote to amend and rescind these

8 bylaws. The Commission shall publish its bylaws in con9 venient form with the appropriate agency or officer in each

10 of the participating States. The bylaws shall provide for

11 appropriate notice to the delegations of all Commission

12 meetings and hearings and of the business to be trans13 acted at such meetings or hearings. Notice also shall be

14 given to other agencies or officers of participating States

15 as provided by the laws of those States.

16 (c) The Commission shall file an annual report with

17 the Secretary of Agriculture of the United States, and

18 with each of the participating States by submitting copies

19 to the Governor, both houses of the legislature, and the

20 head of the State department having responsibilities for

21 agriculture.

22 (d) In addition to the powers and duties elsewhere

23 prescribed in this Compact, the Commission shall have the

24 power:
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1 (1) to sue and be sued in any State or Federal

2 court;

3 (2) to have a seal and alter the same at pleas4 ure;

5 (3) to acquire, hold, and dispose of real and

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

7 other similar manner, for its corporate purposes;

8 (4) to borrow money and to issue notes, to pro9 vide for the rights of the holders thereof and to

10 pledge the revenue of the Commission a security

11 therefor, subject to the provisions of section 18 of

12 this Compact;

13 (5) to appoint such officers, agents, and em14 ployees as it may deem necessary, prescribe their

15 powers, duties, and qualifications; and

16 (6) to create and abolish such offices, employ17 ments, and positions as it deems necessary for the

18 purposes of the Compact and provide for the re19 moval, term, tenure, compensation, fringe benefits,

20 pension, and retirement rights of its officers and em21 ployees. The Commission may also retain personal

22 services on a contract basis.

23 § 7. RULEMAKING POWER

24 In addition to the power to promulgate a Compact

25 over-order price or Commission marketing orders as pro-
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1 vided by this Compact, the Commission is further empow2 ered to make and enforce such additional rules and regula3 tions as it deems necessary to implement any provisions

4 of this Compact, or to effectuate in any other respect the

5 purposes of this Compact.

6 ARTICLE IV. POWERS OF THE COMMISSION

7 § 8. POWERS TO PROMOTE REGULATORY UNI8 FORMITY, SIMPLICITY, AND INTER9 STATE COOPERATION

10 The Commission is hereby empowered to:

11 (1) Investigate or provide for investigations or

12 research projects designed to review the existing

13 laws and regulations of the participating States, to

14 consider their administration and costs, to measure

15 their impact on the production and marketing of

16 milk and their effects on the shipment of milk and

17 milk products within the region.

18 (2) Prepare and transmit to the participating

19 States model dairy laws and regulations dealing with

20 the inspection of farms and plants, sanitary codes,

21 labels for dairy products and their imitations, stand22 ards for dairy products, license standards, producer

23 security programs, and fair trade laws.

24 (3) Study and recommend to the participating

25 States joint or cooperative programs for the admin-
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1 istration of the dairy laws and regulations and to

2 prepare estimates of cost savings and benefits of

3 such programs.

4 (4) Encourage the harmonious relationships be5 tween the various elements in the industry for the

6 solution of their material problems. Conduct sympo7 siums or conferences designed to improve industry

8 relations, or a better understanding of problems.

9 (5) Prepare and release periodic reports on ac10 tivities and results of the Commission’s efforts to

11 the participating States.

12 (6) Review the existing marketing system for

13 milk and milk products and recommend changes in

14 the existing structure for assembly and distribution

15 of milk which may assist, improve, or promote more

16 efficient assembly and distribution of milk.

17 (7) Investigate costs and charges for producing,

18 hauling, handling, processing, distributing, selling,

19 and for all other services performed with respect to

20 milk.

21 (8) Examine current economic forces affecting

22 producers, probable trends in production and con23 sumption, the level of dairy farm prices in relation

24 to costs, the financial conditions of dairy farmers,
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1 and the need for an emergency order to relieve criti2 cal conditions on dairy farms.

3 § 9. EQUITABLE FARM PRICES

4 (a) The powers granted in this section and section

5 10 shall apply only to the establishment of a Compact

6 over-order price, so long as Federal milk marketing orders

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

8 all such orders are terminated, this Article shall authorize

9 the Commission to establish 1 or more Commission mar10 keting orders, as herein provided, in the region or parts

11 thereof as defined in the order.

12 (b) A Compact over-order price established pursuant

13 to this section shall apply only to Class I milk. Such over14 order price shall not exceed $1.50 per gallon. Beginning

15 in 1990, and using that year as a base, the foregoing

16 $1.50 per gallon maximum shall be adjusted annually by

17 the rate of change in the Consumer Price Index as re18 ported by the Bureau of Labor Statistics of the United

19 States Department of Labor. For purposes of the pooling

20 and equalization of an over-order price, the value of milk

21 used in other use classifications shall be calculated at the

22 appropriate class price established pursuant to the appli23 cable Federal order or State dairy regulation and the value

24 of unregulated milk shall be calculated in relation to the

25 nearest prevailing class price in accordance with and sub-
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1 ject to such adjustments as the Commission may prescribe

2 in regulations.

3 (c) A Commission marketing order shall apply to all

4 classes and uses of milk.

5 (d) The Commission is hereby empowered to establish

6 the minimum price for milk to be paid by pool plants, par7 tially regulated plants, and all other handlers receiving

8 milk from producers located in a regulated area. This

9 price shall be established either as a Compact over-order

10 price or by 1 or more Commission marketing orders.

11 Whenever such a price has been established by either type

12 of regulation, the legal obligation to pay such price shall

13 be determined solely by the terms and purpose of the regu14 lation without regard to the situs of the transfer of title,

15 possession, or any other factors not related to the pur16 poses of the regulation and this Compact. Producer-han17 dlers as defined in an applicable Federal market order

18 shall not be subject to a Compact over-order price. The

19 Commission shall provide for similar treatment of pro20 ducer-handlers under Commission marketing orders.

21 (e) In determining the price, the Commission shall

22 consider the balance between production and consumption

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

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

25 feed, the cost of labor including the reasonable value of
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1 the producer’s own labor and management, machinery ex2 pense, and interest expense, the prevailing price for milk

3 outside the regulated area, the purchasing power of the

4 public and the price necessary to yield a reasonable return

5 to the producer and distributor.

6 (f) When establishing a Compact over-order price, the

7 Commission shall take such action as necessary and fea8 sible to ensure that the over-order price does not create

9 an incentive for producers to generate additional supplies

10 of milk.

11 (g) The Commission shall whenever possible enter

12 into agreements with State or Federal agencies for ex13 change of information or services for the purpose of reduc14 ing regulatory burden and cost of administering the Com15 pact. The Commission may reimburse other agencies for

16 the reasonable cost of providing these services.

17 § 10. OPTIONAL PROVISIONS FOR PRICING

18 ORDER

19 Regulations establishing a Compact over-order price

20 or a Commission marketing order may contain, but shall

21 not be limited to, any of the following:

22 (1) Provisions classifying milk in accordance

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

24 used, or creating a flat pricing program.
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1 (2) With respect to a Commission marketing

2 order only, provisions establishing or providing a

3 method for establishing separate minimum prices for

4 each use classification prescribed by the Commis5 sion, or a single minimum price for milk purchased

6 from producers or associations of producers.

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

8 price, provisions establishing or providing a method

9 for establishing such minimum price for Class I

10 milk.

11 (4) Provisions for establishing either an over12 order price or a Commission marketing order may

13 make use of any reasonable method for establishing

14 such price or prices including flat pricing and for15 mula pricing. Provision may also be made for loca16 tion adjustments, zone differentials, and for competi17 tive credits with respect to regulated handlers who

18 market outside the regulated area.

19 (5) Provisions for the payment to all producers

20 and associations of producers delivering milk to all

21 handlers of uniform prices for all milk so delivered,

22 irrespective of the uses made of such milk by the in23 dividual handler to whom it is delivered, or for the

24 payment of producers delivering milk to the same
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1 handler of uniform prices for all milk delivered by

2 them.

3 (A) With respect to regulations establish4 ing a Compact over-order price, the Commission

5 may establish 1 equalization pool within the

6 regulated area for the sole purpose of equalizing

7 returns to producers throughout the regulated

8 area.

9 (B) With respect to any Commission mar10 keting order, as defined in section 2, subdivi11 sion 9, which replaces 1 or more terminated

12 Federal orders or State dairy regulation, the

13 marketing area of now separate State or Fed14 eral orders shall not be merged without the af15 firmative consent of each State, voting through

16 its delegation, which is partly or wholly included

17 within any such new marketing area.

18 (6) Provisions requiring persons who bring

19 Class I milk into the regulated area to make com20 pensatory payments with respect to all such milk to

21 the extent necessary to equalize the cost of milk pur22 chased by handlers subject to a Compact over-order

23 price or Commission marketing order. No such pro24 visions shall discriminate against milk producers

25 outside the regulated area. The provisions for com-
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1 pensatory payments may require payment of the dif2 ference between the Class I price required to be paid

3 for such milk in the State of production by a Fed4 eral milk marketing order or State dairy regulation

5 and the Class I price established by the Compact

6 over-order price or Commission marketing order.

7 (7) Provisions specially governing the pricing

8 and pooling of milk handled by partially regulated

9 plants.

10 (8) Provisions requiring that the account of any

11 person regulated under a Compact over-order price

12 shall be adjusted for any payments made to or re13 ceived by such persons with respect to a producer

14 settlement fund of any Federal or State milk mar15 keting order or other State dairy regulation within

16 the regulated area.

17 (9) Provisions requiring the payment by han18 dlers of an assessment to cover the costs of the ad19 ministration and enforcement of such order pursu20 ant to Article VII, section 18(a).

21 (10) Provisions for reimbursement to partici22 pants of the Women, Infants and Children Special

23 Supplemental Food Program of the United States

24 Child Nutrition Act of 1966.
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1 (11) Other provisions and requirements as the

2 Commission may find are necessary or appropriate

3 to effectuate the purposes of this Compact and to

4 provide for the payment of fair and equitable mini5 mum prices to producers.

6 ARTICLE V. RULEMAKING PROCEDURE

7 § 11. RULEMAKING PROCEDURE

8 Before promulgation of any regulations establishing

9 a Compact over-order price or Commission marketing

10 order, including any provision with respect to milk supply

11 under section 9(f), or amend thereof, as provided in Arti12 cle IV, the Commission shall conduct an informal rule13 making proceeding to provide interested persons with an

14 opportunity to present data and views. Such rulemaking

15 proceeding shall be governed by section 4 of the Federal

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

17 553). In addition, the Commission shall, to the extent

18 practicable, publish notice of rulemaking proceedings in

19 the official register of each participating State. Before the

20 initial adoption of regulations establishing a Compact

21 over-order price or a Commission marketing order and

22 thereafter before any amendment with regard to prices or

23 assessments, the Commission shall hold a public hearing.

24 The Commission may commence a rulemaking proceeding

25 on its own initiative or may in its sole discretion act upon
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1 the petition of any person including individual milk pro2 ducers, any organization of milk producers or handlers,

3 general farm organizations, consumer or public interest

4 groups, and local, State, or Federal officials.

5 § 12. FINDINGS AND REFERENDUM

6 (a) In addition to the concise general statement of

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

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

9 553(c)), the Commission shall make findings of fact with

10 respect to:

11 (1) Whether the public interest will be served

12 by the establishment of minimum milk prices to

13 dairy farmers under Article IV.

14 (2) What level of prices will assure that produc15 ers receive a price sufficient to cover their costs of

16 production and will elicit an adequate supply of milk

17 for the inhabitants of the regulated area and for

18 manufacturing purposes.

19 (3) Whether the major provisions of the order,

20 other than those fixing minimum milk prices, are in

21 the public interest and are reasonably designed to

22 achieve the purposes of the order.

23 (4) Whether the terms of the proposed regional

24 order or amendment are approved by producers as

25 provided in section 13.
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1 § 13. PRODUCER REFERENDUM

2 (a) For the purpose of ascertaining whether the issu3 ance or amendment of regulations establishing a Compact

4 over-order price or a Commission marketing order, includ5 ing any provision with respect to milk supply under section

6 9(f), is approved by producers, the Commission shall con7 duct a referendum among producers. The referendum

8 shall be held in a timely manner, as determined by regula9 tion of the Commission. The terms and conditions of the

10 proposed order or amendment shall be described by the

11 Commission in the ballot used in the conduct of the ref12 erendum, but the nature, content, or extent of such de13 scription shall not be a basis for attacking the legality of

14 the order or any action relating thereto.

15 (b) An order or amendment shall be deemed approved

16 by producers if the Commission determines that it is approved by at least 2 17 ⁄3 of the voting producers who, during

18 a representative period determined by the Commission,

19 have been engaged in the production of milk the price of

20 which would be regulated under the proposed order or

21 amendment.

22 (c) For purposes of any referendum, the Commission

23 shall consider the approval or disapproval by any coopera24 tive association of producers, qualified under the provi25 sions of the Act of Congress of February 18, 1922, as

26 amended, known as the Capper-Volstead Act, bona fide
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1 engaged in marketing milk, or in rendering services for

2 or advancing the interests of producers of such commod3 ity, as the approval or disapproval of the producers who

4 are members or stockholders in, or under contract with,

5 such cooperative association of producers, except as pro6 vided in paragraph (1) hereof and subject to the provisions

7 of paragraphs (2) through (5) hereof.

8 (1) No cooperative which has been formed to

9 act as a common marketing agency for both coopera10 tives and individual producers shall be qualified to

11 block vote for either.

12 (2) Any cooperative which is qualified to block

13 vote shall, before submitting its approval or dis14 approval in any referendum, give prior written notice

15 to each of its members as to whether and how it in16 tends to cast its vote. The notice shall be given in

17 a timely manner as established, and in the form pre18 scribed, by the Commission.

19 (3) Any producer may obtain a ballot from the

20 Commission in order to register approval or dis21 approval of the proposed order.

22 (4) A producer who is a member of a coopera23 tive which has provided notice of its intent to ap24 prove or not to approve a proposed order, and who

25 obtains a ballot and with such ballot expresses his
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1 approval or disapproval of the proposed order, shall

2 notify the Commission as to the name of the cooper3 ative of which he or she is a member, and the Com4 mission shall remove such producer’s name from the

5 list certified by such cooperative with its corporate

6 vote.

7 (5) In order to ensure that all milk producers

8 are informed regarding a proposed order, the Com9 mission shall notify all milk producers that an order

10 is being considered and that each producer may reg11 ister his approval or disapproval with the Commis12 sion either directly or through his or her cooperative.

13 § 14. TERMINATION OF OVER-ORDER PRICE OR

14 MARKETING ORDER

15 (a) The Commission shall terminate any regulations

16 establishing an over-order price or Commission marketing

17 order issued under this Article whenever it finds that such

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

19 declared policy of this Compact.

20 (b) The Commission shall terminate any regulations

21 establishing an over-order price or a Commission market22 ing order issued under this Article whenever it finds that

23 such termination is favored by a majority of the producers

24 who, during a representative period determined by the

25 Commission, have been engaged in the production of milk
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1 the price of which is regulated by such order; but such

2 termination shall be effective only if announced on or be3 fore such date as may be specified in such marketing

4 agreement or order.

5 (c) The termination or suspension of any order or

6 provision thereof, shall not be considered an order within

7 the meaning of this Article and shall require no hearing,

8 but shall comply with the requirements for informal rule9 making prescribed by section 4 of the Federal Administra10 tive Procedure Act, as amended (5 U.S.C. 553).

11 ARTICLE VI. ENFORCEMENT

12 § 15. RECORDS, REPORTS, ACCESS TO PREMISES

13 (a) The Commission may by rule and regulation pre14 scribe recordkeeping and reporting requirements for all

15 regulated persons. For purposes of the administration and

16 enforcement of this Compact, the Commission is author17 ized to examine the books and records of any regulated

18 person relating to his or her milk business and for that

19 purpose, the Commission’s property designated officers,

20 employees, or agents shall have full access during normal

21 business hours to the premises and records of all regulated

22 persons.

23 (b) Information furnished to or acquired by the Com24 mission officers, employees, or its agents pursuant to this

25 section shall be confidential and not subject to disclosure
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1 except to the extent that the Commission deems disclosure

2 to be necessary in any administrative or judicial proceed3 ing involving the administration or enforcement of this

4 Compact, an over-order price, a Compact marketing order,

5 or other regulations of the Commission. The Commission

6 may promulgate regulations further defining the confiden7 tiality of information pursuant to this section. Nothing in

8 this section shall be deemed to prohibit (1) the issuance

9 of general statements based upon the reports of a number

10 of handlers, which do not identify the information fur11 nished by any person, or (2) the publication by direction

12 of the Commission of the name of any person violating

13 any regulation of the Commission, together with a state14 ment of the particular provisions violated by such person.

15 (c) No officer, employee, or agent of the Commission

16 shall intentionally disclose information, by inference or

17 otherwise, which is made confidential pursuant to this sec18 tion. Any person violating the provisions of this section

19 shall upon conviction be subject to a fine of not more than

20 $1,000 or to imprisonment for not more than 1 year, or

21 both, and shall be removed from office. The Commission

22 shall refer any allegation of a violation of this section to

23 the appropriate State enforcement authority or United

24 States Attorney.
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1 § 16. SUBPOENA, HEARINGS, AND JUDICIAL RE2 VIEW

3 (a) The Commission is hereby authorized and empow4 ered by its members and its properly designated officers

5 to administer oaths and issue subpoenas throughout all

6 signatory States to compel the attendance of witnesses

7 and the giving of testimony and the production of other

8 evidence.

9 (b) Any handler subject to an order may file a written

10 petition with the Commission stating that any such order

11 or any provision of any such order or any obligation im12 posed in connection therewith is not in accordance with

13 law and praying for a modification thereof or to be ex14 empted therefrom. He shall thereupon be given an oppor15 tunity for a hearing upon such petition, in accordance with

16 regulations made by the Commission. After such hearing,

17 the Commission shall make a ruling upon the prayer of

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

19 law.

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

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

22 principal place of business, are hereby vested with jurisdic23 tion in equity to review such ruling, provided a bill in eq24 uity for that purpose is filed within 30 days from the date

25 of the entry of such ruling. Service of process in such pro26 ceedings may be had upon the Commission by delivering
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1 to it a copy of the bill of complaint. If the court determines

2 that such ruling is not in accordance with law, it shall

3 remand such proceedings to the Commission with direc4 tions either (1) to make such ruling as the court shall de5 termine to be in accordance with law, or (2) to take such

6 further proceedings as, in its opinion, the law requires.

7 The pendency of proceedings instituted pursuant to this

8 subdivision shall not impede, hinder, or delay the Commis9 sion from obtaining relief pursuant to section 17. Any pro10 ceedings brought pursuant to section 17 (except where

11 brought by way of counterclaim in proceedings instituted

12 pursuant to this section) shall abate whenever a final de13 cree has been rendered in proceedings between the same

14 parties, and covering the same subject matter, instituted

15 pursuant to this section.

16 § 17. ENFORCEMENT WITH RESPECT TO HAN17 DLERS

18 (a) Any violation by a handler of the provisions of

19 regulations establishing an over-order price or a Commis20 sion marketing order, or other regulations adopted pursu21 ant to this Compact shall:

22 (1) Constitute a violation of the laws of each of

23 the signatory States. Such violation shall render the

24 violator subject to a civil penalty in an amount as

25 may be prescribed by the laws of each of the partici-
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1 pating States, recoverable in any State or Federal

2 court of competent jurisdiction. Each day such viola3 tion continues shall constitute a separate violation.

4 (2) Constitute grounds for the revocation of li5 cense or permit to engage in the milk business under

6 the applicable laws of the participating States.

7 (b) With respect to handlers, the Commission shall

8 enforce the provisions of this Compact, regulations estab9 lishing an over-order price, a Commission marketing order

10 or other regulations adopted hereunder by—

11 (1) commencing an action for legal or equitable

12 relief brought in the name of the Commission in any

13 State or Federal court of competent jurisdiction; or

14 (2) with the agreement of the appropriate State

15 agency of a participating State, by referral to the

16 State agency for enforcement by judicial or adminis17 trative remedy.

18 (c) With respect to handlers, the Commission may

19 bring an action for injunction to enforce the provisions

20 of this Compact or the order or regulations adopted there21 under without being compelled to allege or prove that an

22 adequate remedy of law does not exist.
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1 ARTICLE VII. FINANCE

2 § 18. FINANCE OF START-UP AND REGULAR COSTS

3 (a) To provide for its start-up costs, the Commission

4 may borrow money pursuant to its general power under

5 section 6, subdivision (d), paragraph (4). In order to fi6 nance the costs of administration and enforcement of this

7 Compact, including pay back of start-up costs, the Com8 mission is hereby empowered to collect an assessment from

9 each handler who purchases milk from producers within

10 the region. If imposed, this assessment shall be collected

11 on a monthly basis for up to 1 year from the date the

12 Commission convenes, in an amount not to exceed one13 tenth of 1 percent of the applicable Federal market order

14 blend price per hundredweight of milk purchased from

15 producers during the period of the assessment. The initial

16 assessment may apply to the projected purchases of han17 dlers for the 2-month period following the date the Com18 mission convenes. In addition, if regulations establishing

19 an over-order price or a Compact marketing order are

20 adopted, they may include an assessment for the specific

21 purpose of their administration. These regulations shall

22 provide for establishment of a reserve for the Commis23 sion’s ongoing operating expenses.

24 (b) The Commission shall not pledge the credit of any

25 participating State or of the United States. Notes issued
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1 by the Commission and all other financial obligations in2 curred by it, shall be its sole responsibility and no partici3 pating State or the United States shall be liable therefor.

4 § 19. AUDIT AND ACCOUNTS

5 (a) The Commission shall keep accurate accounts of

6 all receipts and disbursements, which shall be subject to

7 the audit and accounting procedures established under its

8 rules. In addition, all receipts and disbursements of funds

9 handled by the Commission shall be audited yearly by a

10 qualified public accountant and the report of the audit

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

12 of the Commission.

13 (b) The accounts of the Commission shall be open

14 at any reasonable time for inspection by duly constituted

15 officers of the participating States and by any persons au16 thorized by the Commission.

17 (c) Nothing contained in this Article shall be con18 strued to prevent Commission compliance with laws relat19 ing to audit or inspection of accounts by or on behalf of

20 any participating State or of the United States.

21 ARTICLE VIII. ENTRY INTO FORCE;

22 ADDITIONAL MEMBERS AND WITHDRAWAL

23 § 20. ENTRY INTO FORCE; ADDITIONAL MEMBERS

24 The Compact shall enter into force effective when en25 acted into law by any 3 States of the group of States com-
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1 posed of Connecticut, Delaware, Maine, Maryland, Massa2 chusetts, New Hampshire, New Jersey, New York, Penn3 sylvania, Rhode Island, Vermont, and Virginia, and when

4 the consent of Congress has been obtained. This Compact

5 shall also be open to States which are contiguous to any

6 of the named States and open to States which are contig7 uous to participating States.

8 § 21. WITHDRAWAL FROM COMPACT

9 Any participating State may withdraw from this

10 Compact by enacting a statute repealing the same, but

11 no such withdrawal shall take effect until 1 year after no12 tice in writing of the withdrawal is given to the Commis13 sion and the Governors of all other participating States.

14 No withdrawal shall affect any liability already incurred

15 by or chargeable to a party State prior to the time of such

16 withdrawal.

17 § 22. SEVERABILITY

18 If any part or provision of this Compact is adjudged

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

20 its operation to the part or provision directly involved in

21 the controversy in which such judgment shall have been

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

23 remainder of this Compact.
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1 SEC. 2. RESERVATION OF RIGHTS.

2 (a) IN GENERAL.—The right to alter, amend, or re3 peal this Act is expressly reserved.

4 (b) COMPENSATION REQUIREMENT.—When an over5 order price is in effect, the Commission established in the

6 compact set out in section 1 shall compensate the Com7 modity Credit Corporation before the end of the fiscal year

8 for the cost of any increased Commodity Credit Corpora9 tion dairy purchases which result from projected increased

10 fluid milk production for that fiscal year within the Com11 pact region in excess of the national average rate of in12 crease.

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