II

106TH CONGRESS

2D SESSION S. 3133

To provide compensation to producers for underestimation of wheat protein

content.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 28 (legislative day, SEPTEMBER 22), 2000

Mr. BAUCUS (for himself and Mr. BURNS) introduced the following bill; which

was read twice and referred to the Committee on Agriculture, Nutrition,

and Forestry

A BILL

To provide compensation to producers for underestimation

of wheat protein content.

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 ‘‘Wheat Protein

5 Mismeasurement Compensation Act.’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—

8 (1) it is the policy of Congress, as stated in the

9 United States Grain Standards Act (7 U.S.C. 71 et

10 seq.), to provide for an official inspection system for
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1 grain and promote the uniform application of the

2 system, with the objectives that grain may be mar3 keted in an orderly and timely manner and that

4 trading in grain may be facilitated;

5 (2) in May 1993, the Secretary of Agriculture,

6 acting through the Federal Grain Inspection Service,

7 required the use of new technology for determining

8 the protein content of wheat;

9 (3) the calibrations provided by the Secretary

10 for the new protein measurement instruments—

11 (A) were erroneous; and

12 (B) resulted in protein determinations that

13 were lower than those produced by the tech14 nology in use before use of the new technology

15 was required;

16 (4) as a result of the miscalibration and the

17 failure to provide adequate notice and opportunity

18 for comment, wheat purchasers were forced to adjust

19 their protein measurement and pricing systems in

20 order to protect themselves on resale, resulting in

21 loss of revenue from the sale of high-protein wheat;

22 and

23 (5) it is necessary and appropriate for Congress

24 to enact a legislative remedy to provide compensa25 tion that is reasonable and necessary to redress the
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1 losses caused by the actions of the Secretary and to

2 achieve the policies stated in the United States

3 Grain Standards Act (7 U.S.C. 71 et seq.).

4 SEC. 3. DEFINITIONS.

5 In this Act:

6 (1) CLAIM AMOUNT.—The term ‘‘claim

7 amount’’ means the gross amount of compensation

8 paid to a claimant under this Act.

9 (2) ELIGIBLE CLAIMANT.—The term ‘‘eligible

10 claimant’’ means—

11 (A) a wheat producer in the United States

12 that sold wheat between May 2, 1993, and Jan13 uary 24, 1994, inclusive, for a price determined

14 in whole or in part with reference to measured

15 or estimated protein content; or

16 (B) an independent country gain elevator

17 operator in the United States (or a person that

18 purchased wheat from such an operator) that

19 resold wheat at a loss resulting from erroneous

20 protein measurement standards based on

21 miscalibrated near infrared transmittance in22 struments.

23 (3) SECRETARY.—The term ‘‘Secretary’’ means

24 the Secretary of Agriculture.
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1 (4) SETTLEMENT AGREEMENT.—The term

2 ‘‘settlement agreement’’ means the settlement agree3 ment negotiated under subsection (b)(1).

4 SEC. 4. COMPENSATION FOR UNDERESTIMATION OF

5 WHEAT PROTEIN CONTENT.

6 (a) COMPENSATION.—The Secretary shall pay such

7 amounts as are necessary, not exceeding $465,000,000 in

8 the aggregate, to compensate eligible claimants for lost

9 revenue on the sale of wheat (including lost earnings, in10 terest, and reimbursement of attorneys’ fees and expenses)

11 resulting from the adoption by the Federal Grain Inspec12 tion Service, in May 1993, of erroneous protein measure13 ment standards based on miscalibrated near infrared

14 transmittance instruments.

15 (b) SETTLEMENT AGREEMENT.—

16 (1) IN GENERAL.—Not later than 90 days after

17 the date of enactment of this Act, the Secretary

18 shall negotiate a settlement agreement with the class

19 of plaintiffs in the case of Gollehon Farming v.

20 United States, 117 F. Supp. 2d 1145 (D. Mont.

21 1998), affd, 207 F. 3d 1373 (Fed. Cir. 2000), in ac22 cordance with this Act.

23 (2) AGGREGATE AMOUNT TO BE PAID.—The

24 settlement agreement—
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1 (A) shall provide that the Secretary shall

2 deposit in a settlement trust, to be administered

3 in accordance with the settlement agreement

4 and any applicable judicial orders, the aggre5 gate amount that the Secretary reasonably esti6 mates will be necessary to fully compensate all

7 eligible claimants (including lost earnings, inter8 est, and reimbursement of attorneys’ fees and

9 expenses); and

10 (B) may provide that the Secretary shall

11 pay into the settlement trust an additional

12 amount as a reserve.

13 (3) DISPOSITION PROVISION.—The settlement

14 agreement shall provide that any amounts that re15 main in the trust on the termination of the trust,

16 after payment of all fees and expenses, shall be re17 turned to the general fund of the United States

18 Treasury.

19 (4) OTHER COMPONENTS OF SETTLEMENT

20 AGREEMENT.—

21 (A) PROCEDURES AND SCHEDULE.—The

22 settlement agreement shall specify procedures

23 and a schedule for identifying and paying the

24 claims of eligible claimants, including the use of

25 information available to the Secretary for iden-
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1 tifying eligible claimants and quantifying indi2 vidual claims.

3 (B) INVESTMENT OF TRUST FUNDS.—The

4 settlement agreement shall provide for the in5 vestment of trust funds and the use of trust

6 earnings to pay all or part of the fees and ex7 penses associated with settlement implementa8 tion and trust administration.

9 (C) OTHER PROVISIONS.—The settlement

10 agreement shall contain any other provisions

11 that the Secretary and the class representatives

12 determine to be necessary to carry out this Act.

13 (5) JUDICIAL APPROVAL.—

14 (A) IN GENERAL.—As soon as practicable

15 after completing negotiation of the settlement

16 agreement, the Secretary shall—

17 (i) file the settlement agreement in

18 the judicial proceeding referred to in sub19 section (b)(1); and

20 (ii) seek a declaratory judgment that

21 the settlement agreement meets the re22 quirements of this Act.

23 (B) EFFECTIVENESS OF SETTLEMENT

24 AGREEMENT.—An order of the court declaring

25 that the settlement agreement meets the re-
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1 quirements of this Act shall be considered to be

2 a compromise settlement for the purposes of

3 section 1304 of title 31, United States Code.

4 (c) REQUIRED SHOWING.—An eligible claimant shall

5 be entitled to compensation under subsection (a) on dem6 onstration by the claimant to the Secretary of—

7 (1) qualification as an eligible claimant;

8 (2) a reasonable estimate of the number of

9 bushels of wheat sold by the eligible claimant during

10 the period of May 2, 1993, through January 24,

11 1994, inclusive;

12 (3) evidence of loss;

13 (4) any other information required by the set14 tlement agreement.

15 (d) AMOUNT OF INDIVIDUAL COMPENSATION.—

16 (1) IN GENERAL.—

17 (A) DETERMINATION.—A claim amount

18 shall be determined in accordance with a for19 mula that may be—

20 (i) negotiated as part of the settle21 ment agreement; or

22 (ii) determined by the settlement

23 trustee in accordance with any applicable

24 judicial orders.
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1 (B) FORMULA.—Subject to subparagraph

2 (C), the formula for determining the claim

3 amount of a claimant—

4 (i) shall be based primarily on the

5 number of bushels of wheat sold by the eli6 gible claimant during the period from May

7 2, 1993, through January 24, 1994; and

8 (ii) may take into account any other

9 relevant factors, including—

10 (I) the type and grade of wheat

11 sold;

12 (II) the location of crop land;

13 (III) the estimated protein con14 tent of the wheat sold;

15 (IV) the date of harvest of the

16 wheat; and

17 (V) the date of sale of the wheat.

18 (C) AVERAGE.—The average claim amount

19 for all claimants compensated under this Act

20 shall be equal to—

21 (i) $0.30 per bushel; plus

22 (ii)(I) interest (as determined in ac23 cordance with this subsection); and
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1 (II) reimbursement of costs and attor2 neys’ fees as provided in subsection (e),

3 subject to subsection (e)(2).

4 (D) EXCESS OF SETTLEMENT AMOUNT

5 OVER DEPOSITED AMOUNT.—If the aggregate

6 claim amount of individual claims determined

7 under this subsection exceeds the amount de8 posited in the settlement trust under subsection

9 (b)(2), the amounts computed for individual

10 claimants shall be proportionally reduced so

11 that the aggregate amount of individual net

12 payments equals the amount deposited.

13 (2) INTEREST.—The interest component of the

14 claim amount of a claimant shall be—

15 (A) computed at the rate in effect on the

16 date of payment under section 6621(a)(1) of

17 the Internal Revenue Code of 1986; and

18 (B) limited to the amount of interest due

19 for the period from January 1, 1994, until the

20 date on which the lump-sum amount is paid

21 into the settlement trust.

22 (e) PROCEDURE.—

23 (1) IN GENERAL.—The settlement negotiated

24 by the Secretary under subsection (b)(1) shall be on

25 behalf of the entire class of eligible claimants.
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1 (2) ATTORNEY’S FEES AND OTHER EX2 PENSES.—

3 (A) ATTORNEY’S FEE RATE.—Attorney’s

4 fees payable from the trust in connection with

5 claims compensated under this Act shall be paid

6 at the maximum rate provided by section 2678

7 of title 28, United States Code, for judgments

8 rendered under section 1346(b) of that title.

9 (B) SOURCE OF PAYMENT.—To the extent

10 that they are not payable through deduction

11 from an individual claim, attorney’s fees and all

12 other expenses of litigation and settlement shall

13 be payable from—

14 (i) settlement trust earnings;

15 (ii) settlement trust principal in ex16 cess of the aggregate amount of individual

17 claims; and

18 (iii) settlement trust principal held for

19 class members that cannot be located and

20 paid.

21 (f) WAIVER OF CONDITIONS AND LIMITATIONS.—

22 (1) IN GENERAL.—An eligible claimant shall be

23 entitled to receive compensation under this Act,

24 notwithstanding—
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1 (A) any noncompliance of the eligible per2 son with section 2675 of title 28, United States

3 Code; or

4 (B) any previous administrative or judicial

5 denial of a claim of the eligible person.

6 (2) NO LIMITATION ON CLAIMS.—A claim by an

7 eligible person described in subsection (c) shall not

8 be subject to any limitation period for asserting the

9 claim, including the limitations under section 2401

10 of title 28, United States Code.

11 (g) SOURCE AND TIMING OF PAYMENT.—Notwith12 standing any other provision of law, the amount of the

13 lump-sum payment by the Secretary under subsection

14 (b)(1) shall be paid from the appropriation made by sec15 tion 1304 of title 31, United States Code, not later than

16 30 days after the date of entry of a declaratory judgment

17 under subsection (b)(5)(B).

18 (h) OTHER RIGHTS.—

19 (1) IN GENERAL.—The establishment of the

20 right to compensation under this Act shall not affect

21 any other right of recovery of a claimant.

22 (2) PROHIBITION OF DOUBLE RECOVERY.—

23 (A) IN GENERAL.—The amount of any

24 payment received by an eligible claimant under

25 this Act shall be applied toward satisfaction of
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1 all claims in connection with lost revenue on the

2 sale of wheat, and lost earnings on those reve3 nues, resulting from the adoption by the Sec4 retary in May, 1993, of erroneous protein meas5 urement standards based on miscalibrated near

6 infrared transmittance instruments.

7 (B) NO EFFECT ON FEDERAL OR STATE

8 BENEFITS.—Any compensation received by a

9 claimant under this Act shall not reduce, affect,

10 or be considered in the determination of past or

11 future eligibility for, or the amount of, any ben12 efit to which the claimant may be entitled under

13 any Federal or State farm program.

Æ