Calendar No. 25

104TH CONGRESS

1ST SESSION S. J. RES. 28

JOINT RESOLUTION

To grant consent of Congress to the Northeast

Interstate Dairy Compact.

MARCH 6, 1995

Read the second time and placed on the calendar
II

Calendar No. 25

104TH CONGRESS

1ST SESSION S. J. RES. 28

To grant consent of Congress to the Northeast Interstate Dairy Compact.

IN THE SENATE OF THE UNITED STATES

MARCH 2 (legislative day, FEBRUARY 22), 1995

Mr. JEFFORDS (for himself, Mr. LEAHY, Ms. SNOWE, Mr. KENNEDY, Mr.

COHEN, Mr. GREGG, Mr. DODD, Mr. SMITH, Mr. CHAFEE, Mr. KERRY,

Mr. LIEBERMAN, and Mr. PELL) introduced the following joint resolution; which was read the first time

MARCH 6, 1995

Read the second time and placed on the calendar

JOINT RESOLUTION

To grant consent of Congress to the Northeast Interstate

Dairy Compact.

1 Resolved by the Senate and House of Representatives

2 of the United States of America in Congress assembled,

3 SECTION 1. CONGRESSIONAL CONSENT.

4 (a) CONSENT OF CONGRESS.—Congress hereby con5 sents to the Northeast Interstate Dairy Compact entered

6 into among the States of Vermont, New Hampshire,
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1 Maine, Connecticut, Rhode Island, and Massachusetts,

2 subject to the following conditions:

3 (1) LIMITATION OF MANUFACTURING PRICE

4 REGULATION.—The compact Commission may not

5 regulate Class II, Class III, or Class III–A milk

6 used for manufacturing purposes or any other milk,

7 other than Class I, or fluid milk, as defined by a

8 Federal milk marketing order issued under section

9 8c of the Agricultural Adjustment Act (7 U.S.C.

10 608c), reenacted with amendments by the Agricul11 tural Marketing Act of 1937 (referred to in this title

12 as ‘‘Federal milk marketing order’’) unless both

13 Houses of Congress have first consented to and ap14 proved such authority by a law enacted after the

15 date of enactment of this joint resolution.

16 (2) ADDITIONAL STATES.—Delaware, New Jer17 sey, New York, Pennsylvania, Maryland, and Vir18 ginia are the only additional States that may join

19 the compact, individually or otherwise, if on entry

20 the additional States are contiguous to participating

21 States and only if both Houses of Congress have

22 first consented to and approved the additional States

23 by a law enacted after the date of the enactment of

24 this joint resolution.
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1 (3) OUT-OF-REGION PRODUCERS.—When a

2 compact over-order price is in effect, the compact

3 Commission shall pay producers whose Class I milk

4 is pooled with partially regulated pool plants for sale

5 in the compact region an over-order price equal to

6 the over-order price received by producers whose

7 Class I milk is pooled with pool plants.

8 (4) REMOVING INCENTIVES FOR OVERPRODUC9 TION.—The compact Commission shall develop and

10 implement a plan to ensure that the over-order price

11 does not create an incentive for producers to gen12 erate additional supplies of milk.

13 (5) LIMITATION ON COMMISSION PRICING AU14 THORITY.—The maximum amount of the compact

15 over-order price identified in section 9(b) of the com16 pact refers to, and shall mean, the combined amount

17 of the applicable, Federal milk marketing order

18 Class I price plus the regulated amount above the

19 Federal milk marketing order Class I price estab20 lished by the compact Commission.

21 (6) REGULATION OF COMPACT OVER-ORDER

22 PRICE, ASSESSMENT ON PROCESSORS, AND DIS23 BURSEMENT TO PRODUCERS.—The compact Com24 mission shall administer any compact over-order

25 price by a pooling mechanism. Compensatory pay-
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1 ments under section 10(6) of the compact shall be

2 utilized only when the Commission determines, on

3 consultation with the applicable processor, that the

4 use of the pooling mechanism would not be feasible

5 or economical for the processor and the Commission.

6 In making its determination, the Commission shall

7 ensure that the utilization of compensatory pay8 ments will not create a competitive disadvantage for

9 any processor or producer.

10 (7) COMPETITIVE CREDITS.—Competitive cred11 its shall be used only in a manner consistent with

12 their use in the Federal milk marketing orders.

13 (8) EFFECT ON FEDERAL MARKET ORDER

14 CLASS I PRICE.—A compact over-order price shall

15 have no effect on any applicable Federal milk mar16 keting order Class I price. Any difference between or

17 among the federally established Class I prices for

18 milk subject to a compact over-order price shall re19 main unaffected by imposition of the over-order

20 price.

21 (b) COMPACT.—The compact is substantially as fol22 lows:
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1 ‘‘ARTICLE I. STATEMENT OF

2 PURPOSE, FINDINGS AND

3 DECLARATION OF POLICY

4 ‘‘§ 1. STATEMENT OF PURPOSE, FINDINGS AND DECLARA5 TION OF POLICY

6 ‘‘The purpose of this compact is to recognize by con7 stitutional prerequisite the interstate character of the

8 northeast dairy industry and to form an interstate com9 mission for the northeast region. The mission of the com10 mission is to take such steps as are necessary to assure

11 the continued viability of dairy farming in the northeast,

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

13 pure and wholesome milk.

14 ‘‘The participating states find and declare that the

15 dairy industry is the paramount agricultural activity of the

16 northeast. Dairy farms, and associated suppliers, market17 ers, processors and retailers, are an integral component

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

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

20 importance to the health and welfare of the region.

21 ‘‘The participating states further find that dairy

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

23 character. The farms preserve open spaces, sculpt the

24 landscape and provide the land base for a diversity of rec25 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 public interest. Assurance of a fair and equi7 table price for dairy farmers ensures their ability to pro8 vide milk to the market and the vitality of the northeast

9 dairy 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 one regulatory program in response to

22 the 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 au8 thority over the region’s fluid milk market by this com9 pact, the participating states declare their purpose that

10 this compact neither displace the federal order system nor

11 encourage the merging of federal orders. Specific provi12 sions 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 sys16 tem be discontinued. In that event, the interstate commis17 sion is authorized to regulate the marketplace in replace18 ment of the order system. This contingent authority does

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

20 so construed. It is only provided should developments in

21 the market other than establishment of this compact re22 sult in discontinuance of the order system.
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1 ‘‘ARTICLE II. DEFINITIONS AND

2 RULES OF CONSTRUCTION

3 ‘‘§ 2. DEFINITIONS

4 ‘‘For the purposes of this compact, and of any supple5 mental or concurring legislation enacted pursuant thereto,

6 except as may be otherwise required by the context:

7 ‘‘(1) ‘Commission’ means the commission estab8 lished 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 commission

18 marketing order.

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

20 in a regulated area.

21 ‘‘(7) ‘Partially regulated plant’ 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 nine and ten of

7 this compact, which is above the price established in

8 federal marketing orders or by state farm price reg9 ulation in the regulated area. Such price may apply

10 throughout the region or in any part or parts there11 of as defined in the regulations of the commission.

12 ‘‘(9) ‘Commission marketing order’ means regu13 lations adopted by the commission pursuant to sec14 tions nine and ten of this compact in place of a ter15 minated federal marketing order or state dairy regu16 lation. Such order may apply throughout the region

17 or in any part or parts thereof as defined in the reg18 ulations of the commission. Such order may estab19 lish minimum prices for any or all classes of milk.

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

21 and includes all skim, butterfat, or other constitu22 ents obtained from separation or any other process.

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

24 further defined by the commission for regulatory

25 purposes.
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1 ‘‘(11) ‘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 ‘‘(12) ‘State dairy regulation’ means any state

6 regulation of dairy prices, and associated assess7 ments, whether by statute, marketing order or other8 wise.

9 ‘‘§ 3. RULES OF CONSTRUCTION

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

11 existing federal milk marketing orders or state dairy regu12 lation in the region but to supplement them. In the event

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

14 the compact shall be construed to provide the commission

15 the option to replace them with one or more commission

16 marketing orders pursuant to this compact.

17 ‘‘(b) This compact shall be construed liberally in

18 order to achieve the purposes and intent enunciated in sec19 tion one. It is the intent of this compact to establish a

20 basic structure by which the commission may achieve

21 those purposes through the application, adaptation and

22 development of the regulatory techniques historically asso23 ciated with milk marketing and to afford the commission

24 broad flexibility to devise regulatory mechanisms to

25 achieve the purposes of this compact. In accordance with
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1 this intent, the technical terms which are associated with

2 market order regulation and which have acquired com3 monly understood general meanings are not defined herein

4 but the commission may further define the terms used in

5 this compact and develop additional concepts and define

6 additional terms as it may find appropriate to achieve its

7 purposes.

8 ‘‘ARTICLE III. COMMISSION

9 ESTABLISHED

10 ‘‘§ 4. COMMISSION ESTABLISHED

11 ‘‘There is hereby created a commission to administer

12 the compact, composed of delegations from each state in

13 the region. A delegation shall include not less than three

14 nor more than five persons. Each delegation shall include

15 at least one dairy farmer who is engaged in the production

16 of milk at the time of appointment or reappointment, and

17 one consumer representative. Delegation members shall be

18 residents and voters of, and subject to such confirmation

19 process as is provided for in, the appointing state. Delega20 tion members shall serve no more than three consecutive

21 terms with no single term of more than four years, and

22 be subject to removal for cause. In all other respects, dele23 gation members shall serve in accordance with the laws

24 of the state represented. The compensation, if any, of the

25 members of a state delegation shall be determined and
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1 paid by each state, but their expenses shall be paid by

2 the commission. Each state delegation shall be entitled to

3 one vote in the conduct of the commission’s affairs.

4 ‘‘§ 5. VOTING REQUIREMENTS

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

6 establishment or termination of an over-order price or

7 commission marketing order, and the adoption, amend8 ment or rescission of the commission’s bylaws, shall be by

9 majority vote of the delegations present. Establishment or

10 termination of an over-order price or commission market11 ing order shall require at least a two-thirds vote of the

12 delegations present. The establishment of a regulated area

13 which covers all or part of a participating state shall re14 quire also the affirmative vote of that state’s delegation.

15 A majority of the delegations from the participating states

16 shall constitute a quorum for the conduct of the commis17 sion’s business.

18 ‘‘§ 6. ADMINISTRATION AND MANAGEMENT

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

20 the members of the participating state delegations a chair21 person, a vice-chairperson, and a treasurer. The commis22 sion shall appoint an executive director and fix his or her

23 duties and compensation. The executive director shall

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

25 the treasurer, shall be bonded in an amount determined
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1 by the commission. The commission may establish through

2 its by-laws an executive committee composed of one mem3 ber elected by each delegation.

4 ‘‘(b) The commission shall adopt by-laws for the con5 duct of its business by a two-thirds vote, and shall have

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

7 by-laws. The commission shall publish its by-laws in con8 venient form with the appropriate agency or officer in each

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

10 appropriate notice to the delegations of all commission

11 meetings and hearings and of the business to be trans12 acted at such meetings or hearings. Notice also shall be

13 given to other agencies or officers of participating states

14 as provided by the laws of those states.

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

16 the Secretary of Agriculture of the United States, and

17 with each of the participating states by submitting copies

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

19 head of the state department having responsibilities for

20 agriculture.

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

22 prescribed in this compact, the commission shall have the

23 power—

24 ‘‘(1) to sue and be sued in any state or federal

25 court;
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1 ‘‘(2) to have a seal and alter the same at pleas2 ure;

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

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

5 other similar manner, for its corporate purposes;

6 ‘‘(4) to borrow money and to issue notes, to

7 provide for the rights of the holders thereof and to

8 pledge the revenue of the commission as security

9 therefor, subject to the provisions of section eighteen

10 of this compact;

11 ‘‘(5) to appoint such officers, agents, and em12 ployees as it may deem necessary, prescribe their

13 powers, duties, and qualifications; and

14 ‘‘(6) to create and abolish such offices, employ15 ments, and positions as it deems necessary for the

16 purposes of the compact and provide for the re17 moval, term, tenure, compensation, fringe benefits,

18 pension, and retirement rights of its officers and em19 ployees. The commission may also retain personal

20 services on a contract basis.

21 ‘‘§ 7. RULEMAKING POWER

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

23 over-order price or commission marketing orders as pro24 vided by this compact, the commission is further empow25 ered to make and enforce such additional rules and regula-
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1 tions as it deems necessary to implement any provisions

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

3 purposes of this compact.

4 ‘‘ARTICLE IV. POWERS OF THE

5 COMMISSION

6 ‘‘§ 8. POWERS TO PROMOTE REGULATORY UNIFORMITY,

7 SIMPLICITY, AND INTERSTATE COOPERATION

8 ‘‘The commission is hereby empowered to:

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

10 research projects designed to review the existing

11 laws and regulations of the participating states, to

12 consider their administration and costs, to measure

13 their impact on the production and marketing of

14 milk and their effects on the shipment of milk and

15 milk products within the region.

16 ‘‘(2) Prepare and transmit to the participating

17 states model dairy laws and regulations dealing with

18 the inspection of farms and plants, sanitary codes,

19 labels for dairy products and their imitations, stand20 ards for dairy products, license standards, producer

21 security programs, and fair trade laws.

22 ‘‘(3) Study and recommend to the participating

23 states joint or cooperative programs for the adminis24 tration of the dairy laws and regulations and to pre-
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1 pare estimates of cost savings and benefits of such

2 programs.

3 ‘‘(4) Encourage the harmonious relationships

4 between the various elements in the industry for the

5 solution of their material problems. Conduct sympo6 siums or conferences designed to improve industry

7 relations, or a better understanding of problems.

8 ‘‘(5) Prepare and release periodic reports on ac9 tivities and results of the commission’s efforts to the

10 participating states.

11 ‘‘(6) Review the existing marketing system for

12 milk and milk products and recommend changes in

13 the existing structure for assembly and distribution

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

15 efficient assembly and distribution of milk.

16 ‘‘(7) Investigate costs and charges for produc17 ing, hauling, handling, processing, distributing, sell18 ing and for all other services performed with respect

19 to milk.

20 ‘‘(8) Examine current economic forces affecting

21 producers, probable trends in production and con22 sumption, the level of dairy farm prices in relation

23 to costs, the financial conditions of dairy farmers,

24 and the need for an emergency order to relieve criti25 cal conditions on dairy farms.
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1 ‘‘§ 9. EQUITABLE FARM PRICES

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

3 ten shall apply only to the establishment of a compact

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

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

6 all such orders are terminated, this article shall authorize

7 the commission to establish one or more commission mar8 keting orders, as herein provided, in the region or parts

9 thereof as defined in the order.

10 ‘‘(b) A compact over-order price established pursuant

11 to this section shall apply only to Class I milk. Such over12 order price shall not exceed one dollar fifty cents per gal13 lon. Beginning in nineteen hundred ninety, and using that

14 year as a base, the foregoing one dollar fifty cents per

15 gallon maximum shall be adjusted annually by the rate

16 of change in the Consumer Price Index as reported by the

17 Bureau of Labor Statistics of the United States Depart18 ment of Labor. For purposes of the pooling and equali19 zation of an over-order price, the value of milk used in

20 other use classifications shall be calculated at the appro21 priate class price established pursuant to the applicable

22 federal order or state dairy regulation and the value of

23 unregulated milk shall be calculated in relation to the

24 nearest prevailing class price in accordance with and sub25 ject to such adjustments as the commission may prescribe

26 in regulations.
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1 ‘‘(c) A commission marketing order shall apply to all

2 classes and uses of milk.

3 ‘‘(d) The commission is hereby empowered to estab4 lish the minimum price for milk to be paid by pool plants,

5 partially regulated plants and all other handlers receiving

6 milk from producers located in a regulated area. This

7 price shall be established either as a compact over-order

8 price or by one or more commission marketing orders.

9 Whenever such a price has been established by either type

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

11 be determined solely by the terms and purpose of the regu12 lation without regard to the situs of the transfer of title,

13 possession or any other factors not related to the purposes

14 of the regulation and this compact. Producer-handlers as

15 defined in an applicable federal market order shall not be

16 subject to a compact over-order price. The commission

17 shall provide for similar treatment of producer-handlers

18 under commission marketing orders.

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

20 consider the balance between production and consumption

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

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

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

24 the producer’s own labor and management, machinery ex25 pense, and interest expense, the prevailing price for milk
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1 outside the regulated area, the purchasing power of the

2 public and the price necessary to yield a reasonable return

3 to the producer and distributor.

4 ‘‘(f) When establishing a compact over-order price,

5 the commission shall take such action as necessary and

6 feasible to ensure that the over-order price does not create

7 an incentive for producers to generate additional supplies

8 of milk.

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

10 into agreements with state or federal agencies for ex11 change of information or services for the purpose of reduc12 ing regulatory burden and cost of administering the com13 pact. The commission may reimburse other agencies for

14 the reasonable cost of providing these services.

15 ‘‘§ 10. OPTIONAL PROVISIONS FOR PRICING ORDER

16 ‘‘Regulations establishing a compact over-order price

17 or a commission marketing order may contain, but shall

18 not be limited to, any of the following:

19 ‘‘(1) Provisions classifying milk in accordance

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

21 used, or creating a flat pricing program.

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

23 order only, provisions establishing or providing a

24 method for establishing separate minimum prices for

25 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 produc16 ers and associations of producers delivering milk to

17 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 establish24 ing a compact over-order price, the commission

25 may establish one equalization pool within the
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1 regulated area for the sole purpose of equalizing

2 returns to producers throughout the regulated

3 area.

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

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 a 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 market11 ing order or other state dairy regulation within the

12 regulated area.

13 ‘‘(9) Provisions 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 proceed15 ings in the official register of each participating state. Be16 fore the initial adoption of regulations establishing a com17 pact over-order price or a commission marketing order and

18 thereafter before any amendment with regard to prices or

19 assessments, the commission shall hold a public hearing.

20 The commission may commence a rulemaking proceeding

21 on its own initiative or may in its sole discretion act upon

22 the petition of any person including individual milk pro23 ducers, any organization of milk producers or handlers,

24 general farm organizations, consumer or public interest

25 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 produc21 ers as provided in section thirteen.

22 ‘‘§ 13. PRODUCER REFERENDUM

23 ‘‘(a) For the purpose of ascertaining whether the is24 suance 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 referen3 dum shall be held in a timely manner, as determined by

4 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 commod24 ity, as the approval or disapproval of the producers who

25 are members or stockholders in, or under contract with,
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1 such cooperative association of producers, except as pro2 vided in subdivision (1) hereof and subject to the provi3 sions of subdivisions (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 a 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 MARKET10 ING 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 market18 ing order issued under this article whenever it finds that

19 such termination is favored by a majority of the producers

20 who, during a representative period determined by the

21 commission, have been engaged in the production of milk

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

23 termination shall be effective only if announced on or be24 fore 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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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 than

16 $1,000 or to imprisonment for not more than one year,

17 or to both, and shall be removed from office. The commis18 sion shall refer any allegation of a violation of this section

19 to the appropriate state enforcement authority or United

20 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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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 in equity to review such ruling, provided a bill in eq18 uity for that purpose is filed within thirty days from the

19 date of the entry of such ruling. Service of process in such

20 proceedings may be had upon the commission by deliver21 ing to it a copy of the bill of complaint. If the court deter22 mines that such ruling is not in accordance with law, it

23 shall remand such proceedings to the commission with di24 rections either (1) to make such ruling as the court shall

25 determine to be in accordance with law, or (2) to take
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1 such further proceedings as, in its opinion, the law re2 quires. The pendency of proceedings instituted pursuant

3 to this subdivision shall not impede, hinder, or delay the

4 commission from obtaining relief pursuant to section sev5 enteen. Any proceedings brought pursuant to section sev6 enteen (except where brought by way of counterclaim in

7 proceedings instituted pursuant to this section) shall abate

8 whenever a final decree has been rendered in proceedings

9 between the same parties, and covering the same subject

10 matter, instituted 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 in any state or federal court of competent jurisdic8 tion; or

9 ‘‘(2) With the agreement of the appropriate

10 state agency of a participating state, by referral to

11 the state agency for enforcement by judicial or ad12 ministrative remedy.

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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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 one5 tenth of one percent of the applicable federal market order

6 blend price per hundredweight of milk purchased from

7 producers during the period of the assessment. The initial

8 assessment may apply to the projected purchases of han9 dlers for the two-month period following the date the com10 mission convenes. In addition, if regulations establishing

11 an over-order price or a compact marketing order are

12 adopted, they may include an assessment for the specific

13 purpose of their administration. These regulations shall

14 provide for establishment of a reserve for the commission’s

15 ongoing operating expenses.

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

17 any participating state or of the United States. Notes is18 sued by the commission and all other financial obligations

19 incurred by it, shall be its sole responsibility and no par20 ticipating state or the United States shall be liable there21 for.

22 ‘‘§ 19. AUDIT AND ACCOUNTS

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

24 all receipts and disbursements, which shall be subject to

25 the audit and accounting procedures established under its
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1 rules. In addition, all receipts and disbursements of funds

2 handled by the commission shall be audited yearly by a

3 qualified public accountant and the report of the audit

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

5 of the commission.

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

7 at any reasonable time for inspection by duly constituted

8 officers of the participating states and by any persons au9 thorized by the commission.

10 ‘‘(c) Nothing contained in this article shall be con11 strued to prevent commission compliance with laws relat12 ing to audit or inspection of accounts by or on behalf of

13 any participating state or of the United States.

14 ‘‘ARTICLE VIII. ENTRY INTO

15 FORCE; ADDITIONAL MEM16 BERS AND WITHDRAWAL

17 ‘‘§ 20. ENTRY INTO FORCE; ADDITIONAL MEMBERS

18 ‘‘The compact shall enter into force effective when

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

20 composed of Connecticut, Delaware, Maine, Maryland,

21 Massachusetts, New Hampshire, New Jersey, New York,

22 Pennsylvania, Rhode Island, Vermont, and Virginia, and

23 when the consent of Congress has been obtained. This

24 compact shall also be open to states which are contiguous
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1 to any of the named states and open to states which are

2 contiguous to participating states.

3 ‘‘§ 21. WITHDRAWAL FROM COMPACT

4 ‘‘Any participating state may withdraw from this

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

6 such withdrawal shall take effect until one year after no7 tice in writing of the withdrawal is given to the commis8 sion and the governors of all other participating states.

9 No withdrawal shall affect any liability already incurred

10 by or chargeable to a party state prior to the time of such

11 withdrawal.

12 ‘‘§ 22. SEVERABILITY

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

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

15 its operation to the part or provision directly involved in

16 the controversy in which such judgment shall have been

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

18 remainder of this compact.

19 ‘‘Congress reserves the right to amend or rescind this

20 interstate compact at any time.’’.

21 SEC. 2. RESERVATION OF RIGHTS.

22 (a) IN GENERAL.—The right to alter, amend, or re23 peal this Act is expressly reserved.

24 (b) COMPENSATION REQUIREMENT.—When an over25 order price is in effect, the Commission established in this
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1 compact shall compensate the Commodity Credit Corpora2 tion before the end of the fiscal year for the cost of any

3 increased Commodity Credit Corporation dairy purchases

4 that result from projected increased fluid milk production

5 for that fiscal year within the Compact region in excess

6 of the national average rate of increase.

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