I

106TH CONGRESS

1ST SESSION H. R. 3428

To provide for the modification and implementation of the final rule for

the consolidation and reform of Federal milk marketing orders, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 17, 1999

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

on Agriculture

A BILL

To provide for the modification and implementation of the

final rule for the consolidation and reform of Federal

milk marketing orders, and for other purposes.

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

3 SECTION 1. USE OF OPTION 1A AS PRICE STRUCTURE FOR

4 CLASS I MILK UNDER CONSOLIDATED FED5 ERAL MILK MARKETING ORDERS.

6 (a) FINAL RULE DEFINED.—In this section, the term

7 ‘‘final rule’’ means the final rule for the consolidation and

8 reform of Federal milk marketing orders that was pub9 lished in the Federal Register on September 1, 1999 (64
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1 Fed. Reg. 47897–48021), to comply with section 143 of

2 the Federal Agriculture Improvement and Reform Act of

3 1996 (7 U.S.C. 7253).

4 (b) IMPLEMENTATION OF FINAL RULE FOR MILK

5 ORDER REFORM.—Subject to subsection (c), the final rule

6 shall take effect, and be implemented by the Secretary of

7 Agriculture, on the first day of the first month beginning

8 at least 30 days after the date of the enactment of this

9 Act.

10 (c) USE OF OPTION 1A FOR PRICING CLASS I

11 MILK.—In lieu of the Class I price differentials specified

12 in the final rule, the Secretary of Agriculture shall price

13 fluid or Class I milk under the Federal milk marketing

14 orders using the Class I price differentials identified as

15 Option 1A ‘‘Location-Specific Differentials Analysis’’ in

16 the proposed rule published in the Federal Register on

17 January 30, 1998 (63 Fed. Reg. 4802, 4809), except that

18 the Secretary shall include the corrections and modifica19 tions to such Class I differentials made by the Secretary

20 through April 2, 1999.

21 (d) EFFECT OF PRIOR ANNOUNCEMENT OF MIN22 IMUM PRICES.—If the Secretary of Agriculture announces

23 minimum prices for milk under Federal milk marketing

24 orders pursuant to section 1000.50 of title 7, Code of Fed25 eral Regulations, before the effective date specified in sub-
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1 section (b), the minimum prices so announced before that

2 date shall be the only applicable minimum prices under

3 Federal milk marketing orders for the month or months

4 for which the prices have been announced.

5 (e) IMPLEMENTATION OF REQUIREMENT.—The im6 plementation of the final rule, as modified by subsection

7 (c), shall not be subject to any of the following:

8 (1) The notice and hearing requirements of sec9 tion 8c(3) of the Agricultural Adjustment Act (7

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

11 Agricultural Marketing Agreement Act of 1937, or

12 the notice and comment provisions of section 553 of

13 title 5, United States Code.

14 (2) A referendum conducted by the Secretary of

15 Agriculture pursuant to subsections (17) or (19) of

16 section 8c of the Agricultural Adjustment Act (7

17 U.S.C. 608c), reenacted with amendments by the

18 Agricultural Marketing Agreement Act of 1937.

19 (3) The Statement of Policy of the Secretary of

20 Agriculture effective July 24, 1971 (36 Fed. Reg.

21 13804), relating to notices of proposed rulemaking

22 and public participation in rulemaking.

23 (4) Chapter 35 of title 44, United States Code

24 (commonly known as the Paperwork Reduction Act).
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1 (5) Any decision, restraining order, or injunc2 tion issued by a United States court before the date

3 of the enactment of this Act.

4 SEC. 2. FURTHER RULEMAKING TO DEVELOP PRICING

5 METHODS FOR CLASS III AND CLASS IV MILK

6 UNDER MARKETING ORDERS.

7 (a) CONGRESSIONAL FINDING.—The Class III and

8 Class IV milk pricing formulas included in the final deci9 sion for the consolidation and reform of Federal milk mar10 keting orders, as published in the Federal Register on

11 April 2, 1999 (64 Fed. Reg. 16025), do not adequately

12 reflect public comment on the original proposed rule pub13 lished in the Federal Register on January 30, 1998 (63

14 Fed. Reg. 4802), and are sufficiently different from the

15 proposed rule and any comments submitted with regard

16 to the proposed rule that further emergency rulemaking

17 is merited.

18 (b) RULEMAKING REQUIRED.—The Secretary of Ag19 riculture shall conduct rulemaking, on the record after an

20 opportunity for an agency hearing, to reconsider the Class

21 III and Class IV milk pricing formulas included in the

22 final rule for the consolidation and reform of Federal milk

23 marketing orders that was published in the Federal Reg24 ister on September 1, 1999 (64 Fed. Reg. 47897–48021).
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1 (c) TIME PERIOD FOR RULEMAKING.—On December

2 1, 2000, the Secretary of Agriculture shall publish in the

3 Federal Register a final decision on the Class III and

4 Class IV milk pricing formulas. The resulting formulas

5 shall take effect, and be implemented by the Secretary,

6 on January 1, 2001.

7 (d) EFFECT OF COURT ORDER.—The actions author8 ized by subsections (b) and (c) are intended to ensure the

9 timely publication and implementation of new pricing for10 mulas for Class III and Class IV milk. In the event that

11 the Secretary of Agriculture is enjoined or otherwise re12 strained by a court order from implementing a final deci13 sion within the time period specified in subsection (c), the

14 length of time for which that injunction or other restrain15 ing order is effective shall be added to the time limitations

16 specified in subsection (c) thereby extending those time

17 limitations by a period of time equal to the period of time

18 for which the injunction or other restraining order is effec19 tive.

20 (e) FAILURE TO TIMELY COMPLETE RULE21 MAKING.—If the Secretary of Agriculture fails to imple22 ment new Class III and Class IV milk pricing formulas

23 within the time period required under subsection (c) (plus

24 any additional period provided under subsection (d)), the

25 Secretary may not assess or collect assessments from milk
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1 producers or handlers under section 8c of the Agricultural

2 Adjustment Act (7 U.S.C. 608c), reenacted with amend3 ments by the Agricultural Marketing Agreement Act of

4 1937, for marketing order administration and services

5 provided under such section after the end of that period

6 until the pricing formulas are implemented. The Secretary

7 may not reduce the level of services provided under that

8 section on account of the prohibition against assessments,

9 but shall rather cover the cost of marketing order adminis10 tration and services through funds available for the Agri11 cultural Marketing Service of the Department.

12 (f) IMPLEMENTATION OF REQUIREMENT.—The im13 plementation of the final decision on new Class III and

14 Class IV milk pricing formulas shall not be subject to con15 gressional review under chapter 8 of title 5, United States

16 Code.

17 SEC. 3. DAIRY FORWARD PRICING PROGRAM.

18 The Agricultural Adjustment Act (7 U.S.C. 601 et

19 seq.), reenacted with amendments by the Agricultural

20 Marketing Agreement Act of 1937, is amended by adding

21 at the end the following new section:

22 ‘‘SEC. 23. DAIRY FORWARD PRICING PILOT PROGRAM.

23 ‘‘(a) PILOT PROGRAM REQUIRED.—Not later than 90

24 days after the date of the enactment of this section, the

25 Secretary of Agriculture shall establish a temporary pilot
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1 program under which milk producers and cooperatives are

2 authorized to voluntarily enter into forward price con3 tracts with milk handlers.

4 ‘‘(b) MINIMUM MILK PRICE REQUIREMENTS.—Pay5 ments made by milk handlers to milk producers and co6 operatives, and prices received by milk producers and co7 operatives, under the forward contracts shall be deemed

8 to satisfy—

9 ‘‘(1) all regulated minimum milk price require10 ments of paragraphs (B) and (F) of subsection (5)

11 of section 8c; and

12 ‘‘(2) the requirement of paragraph (C) of such

13 subsection regarding total payments by each han14 dler.

15 ‘‘(c) MILK COVERED BY PILOT PROGRAM.—

16 ‘‘(1) COVERED MILK.—The pilot program shall

17 apply only with respect to the marketing of federally

18 regulated milk that—

19 ‘‘(A) is not classified as Class I milk or

20 otherwise intended for fluid use; and

21 ‘‘(B) is in the current of interstate or for22 eign commerce or directly burdens, obstructs, or

23 affects interstate or foreign commerce in feder24 ally regulated milk.
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1 ‘‘(2) RELATION TO CLASS I MILK.—To assist

2 milk handlers in complying with the limitation in

3 paragraph (1)(A) without having to segregate or

4 otherwise individually track the source and disposi5 tion of milk, a milk handler may allocate milk re6 ceipts from producers, cooperatives, and other

7 sources that are not subject to a forward contract to

8 satisfy the handler’s obligations with regard to Class

9 I milk usage.

10 ‘‘(d) DURATION.—The authority of the Secretary of

11 Agriculture to carry out the pilot program shall terminate

12 on December 31, 2004. No forward price contract entered

13 into under the program may extend beyond that date.

14 ‘‘(e) STUDY AND REPORT ON EFFECT OF PILOT

15 PROGRAM.—

16 ‘‘(1) STUDY.—The Secretary of Agriculture

17 shall conduct a study on forward contracting be18 tween milk producers and cooperatives and milk

19 handlers to determine the impact on milk prices paid

20 to producers in the United States. To obtain infor21 mation for the study, the Secretary may use the au22 thorities available to the Secretary under section 8d,

23 subject to the confidentiality requirements of sub24 section (2) of such section.
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1 ‘‘(2) REPORT.—Not later than April 30, 2002,

2 the Secretary shall submit to the Committee on Ag3 riculture, Nutrition and Forestry of the Senate and

4 the Committee on Agriculture of the House of Rep5 resentatives a report containing the results of the

6 study.’’.

7 SEC. 4. CONTINUATION OF CONGRESSIONAL CONSENT FOR

8 NORTHEAST INTERSTATE DAIRY COMPACT.

9 Section 147(3) of the Agricultural Market Transition

10 Act (7 U.S.C. 7256(3)) is amended by striking ‘‘concur11 rent with’’ and all that follows through the period at the

12 end and inserting ‘‘on September 30, 2001.’’.

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