S. 2120

One Hundred Ninth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the third day of January, two thousand and six

An Act

To ensure regulatory equity between and among all dairy farmers and handlers

for sales of packaged fluid milk in federally regulated milk marketing areas

and into certain non-federally regulated milk marketing areas from federally

regulated areas, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Milk Regulatory Equity Act

of 2005’’.

SEC. 2. MILK REGULATORY EQUITY.

(a) MINIMUM MILK PRICES FOR HANDLERS; EXEMPTION.—Section

8c(5) of the Agricultural Adjustment Act (7 U.S.C. 608c(5)),

reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is amended by adding at the end the following

new subparagraphs:

‘‘(M) MINIMUM MILK PRICES FOR HANDLERS.—

‘‘(i) APPLICATION OF MINIMUM PRICE REQUIREMENTS.—Notwithstanding any other provision of this section, a milk handler

described in clause (ii) shall be subject to all of the minimum

and uniform price requirements of a Federal milk marketing

order issued pursuant to this section applicable to the county

in which the plant of the handler is located, at Federal order

class prices, if the handler has packaged fluid milk product

route dispositions, or sales of packaged fluid milk products

to other plants, in a marketing area located in a State that

requires handlers to pay minimum prices for raw milk purchases.

‘‘(ii) COVERED MILK HANDLERS.—Except as provided in

clause (iv), clause (i) applies to a handler of Class I milk

products (including a producer-handler or producer operating

as a handler) that—

‘‘(I) operates a plant that is located within the boundaries of a Federal order milk marketing area (as those

boundaries are in effect as of the date of the enactment

of this subparagraph);

‘‘(II) has packaged fluid milk product route dispositions,

or sales of packaged fluid milk products to other plants,

in a milk marketing area located in a State that requires

handlers to pay minimum prices for raw milk purchases;

and

‘‘(III) is not otherwise obligated by a Federal milk

marketing order, or a regulated milk pricing plan operated
S. 2120—2

by a State, to pay minimum class prices for the raw milk

that is used for such dispositions or sales.

‘‘(iii) OBLIGATION TO PAY MINIMUM CLASS PRICES.—For purposes of clause (ii)(III), the Secretary may not consider a handler of Class I milk products to be obligated by a Federal

milk marketing order to pay minimum class prices for raw

milk unless the handler operates the plant as a fully regulated

fluid milk distributing plant under a Federal milk marketing

order.

‘‘(iv) CERTAIN HANDLERS EXEMPTED.—Clause (i) does not

apply to—

‘‘(I) a handler (otherwise described in clause (ii)) that

operates a nonpool plant (as defined in section 1000.8(e)

of title 7, Code of Federal Regulations, as in effect on

the date of the enactment of this subparagraph);

‘‘(II) a producer-handler (otherwise described in clause

(ii)) for any month during which the producer-handler has

route dispositions, and sales to other plants, of packaged

fluid milk products equaling less than 3,000,000 pounds

of milk; or

‘‘(III) a handler (otherwise described in clause (ii)) for

any month during which—

‘‘(aa) less than 25 percent of the total quantity

of fluid milk products physically received at the plant

of the handler (excluding concentrated milk received

from another plant by agreement for other than Class

I use) is disposed of as route disposition or is transferred in the form of packaged fluid milk products

to other plants; or

‘‘(bb) less than 25 percent in aggregate of the route

disposition or transfers are in a marketing area or

areas located in one or more States that require handlers to pay minimum prices for raw milk purchases.

‘‘(N) EXEMPTION FOR CERTAIN MILK HANDLERS.—Notwithstanding any other provision of this section, no handler with distribution of Class I milk products in the marketing area described

in Order No. 131 shall be exempt during any month from any

minimum price requirement established by the Secretary under

this subsection if the total distribution of Class I products during

the preceding month of any such handler’s own farm production

exceeds 3,000,000 pounds.

‘‘(O) RULE OF CONSTRUCTION REGARDING PRODUCER-HANDLERS.—Subparagraphs (M) and (N) shall not be construed as

affecting, expanding, or contracting the treatment of producer-handlers under this subsection except as provided in such subparagraphs.’’.

(b) EXCLUSION OF NEVADA FROM FEDERAL MILK MARKETING

ORDERS.—Section 8c(11) of the Agriculture Adjustment Act (7

U.S.C. 608c(11)), reenacted with amendments by the Agriculture

Marketing Agreement Act of 1937, is amended—

(1) in subparagraph (C), by striking the last sentence;

and

(2) by adding at the end the following new subparagraph:

‘‘(D) In the case of milk and its products, no county or other

political subdivision of the State of Nevada shall be within the

marketing area definition of any order issued under this section.’’.
S. 2120—3

(c) RECORDS AND FACILITY REQUIREMENTS.—Notwithstanding

any other provision of this section, or the amendments made by

this section, a milk handler (including a producer-handler or a

producer operating as a handler) that is subject to regulation under

this section or an amendment made by this section shall comply

with the requirements of section 1000.27 of title 7, Code of Federal

Regulations, or a successor regulation, relating to handler responsibility for records or facilities.

(d) EFFECTIVE DATE AND IMPLEMENTATION.—The amendments

made by this section take effect on the first day of the first month

beginning more than 15 days after the date of the enactment

of this Act. To accomplish the expedited implementation of these

amendments, effective on the date of the enactment of this Act,

the Secretary of Agriculture shall include in the pool distributing

plant provisions of each Federal milk marketing order issued under

subparagraph (B) of section 8c(5) of the Agriculture Adjustment

Act (7 U.S.C. 608c(5)), reenacted with amendments by the Agriculture Marketing Agreement Act of 1937, a provision that a handler described in subparagraph (M) of such section, as added by

subsection (a) of this section, will be fully regulated by the order

in which the handler’s distributing plant is located. These amendments shall not be subject to a referendum under section 8c(19)

of such Act (7 U.S.C. 608c(19)).

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.