I
107TH CONGRESS
1ST SESSION
H. R. 1827
To reauthorize the consent of Congress to the Northeast Interstate Dairy
Compact and to grant the consent of Congress to the Southern Dairy
Compact, a Pacific Northwest Dairy Compact, and an Intermountain
Dairy Compact.
IN THE HOUSE OF REPRESENTATIVES
MAY 14, 2001
Mr. HUTCHINSON for himself, Mr. SHERWOOD, Mr. ETHERIDGE, Mr. MCGOV-
ERN, Mr. ADERHOLT, Mr. CALLAHAN, Mr. HILLIARD, Mr. RILEY, Mr.
BACHUS, Mr. EVERETT, Mr. CRAMER, Mr. BERRY, Mr. ROSS, Mr. SNY-
DER, Mr. MALONEY of Connecticut, Ms. DELAURO, Mr. LARSON of Con-
necticut, Mrs. JOHNSON of Connecticut, Mr. SIMMONS, Mr. CASTLE, Mrs.
THURMAN, Ms. BROWN of Florida, Mr. FOLEY, Mr. BOYD, Mr. LEWIS
of Georgia, Mr. ISAKSON, Mr. DEAL of Georgia, Mr. BISHOP, Mr. KING-
STON, Mr. CHAMBLISS, Mr. COLLINS, Ms. MCKINNEY, Mr. NORWOOD,
Mr. ROGERS of Kentucky, Mr. WHITFIELD, Mr. FLETCHER, Mr. LEWIS
of Kentucky, Mr. LUCAS of Kentucky, Mr. BAKER, Mr. VITTER, Mr.
MCCRERY, Mr. COOKSEY, Mr. JEFFERSON, Mr. JOHN, Mr. TAUZIN, Mr.
OLVER, Mr. NEAL of Massachusetts, Mr. CAPUANO, Mr. WYNN, Mr.
BARTLETT of Maryland, Mr. HOYER, Mr. GILCHREST, Mr. CUMMINGS,
Mr. EHRLICH, Mrs. MORELLA, Mr. CARDIN, Mr. BALDACCI, Mr. ALLEN,
Mr. AKIN, Mrs. EMERSON, Mr. HULSHOF, Mr. GRAVES, Mr. BLUNT, Ms.
MCCARTHY of Missiouri, Mr. SKELTON, Mr. TAYLOR of Mississippi, Mr.
PICKERING, Mr. WICKER, Mr. SHOWS, Mr. THOMPSON of Mississippi,
Mr. MCINTYRE, Mr. PRICE of North Carolina, Mr. BALLENGER, Mrs.
MYRICK, Mr. HAYES, Mr. BURR of North Carolina, Mr. WATT of North
Carolina, Mr. COBLE, Mrs. CLAYTON, Mr. TAYLOR of North Carolina,
Mrs. JONES of North Carolina, Mr. BASS, Mr. ANDREWS, Mr. FER-
GUSON, Mr. FRELINGHUYSEN, Mrs. ROUKEMA, Mr. SAXTON, Mr. HOLT,
Mr. LOBIONDO, Mr. ACKERMAN, Mr. FOSSELLA, Mr. ENGEL, Mr.
GRUCCI, Mrs. KELLY, Mr. KING, Mr. LAFALCE, Mrs. LOWEY, Mrs.
MCCARTHY of New York, Mr. MCNULTY, Mr. MEEKS of New York, Mr.
NADLER, Mr. RANGEL, Mr. REYNOLDS, Ms. SLAUGHTER, Mr. TOWNS,
Mr. GILMAN, Mr. QUINN, Mr. WALSH, Mr. BOEHLERT, Mr. HOUGHTON,
Mr. MCHUGH, Mr. SWEENEY, Mr. CROWLEY, Mr. HINCHEY, Mr.
WEINER, Mr. ISRAEL, Mr. LATOURETTE, Mr. WATKINS, Mr. CARSON of
Oklahoma, Mr. GREENWOOD, Mr. WELDON of Pennsylvania, Mr. PITTS,
Mr. ENGLISH, Mr. PETERSON of Pennsylvania, Ms. HART, Mr. MASCARA,
Mr. KANJORSKI, Mr. DOYLE, Mr. HOEFFEL, Mr. HOLDEN, Mr. PLATTS,
Mr. GEKAS, Mr. BRADY of Pennsylvania, Mr. BORSKI, Mr. FATTAH, Mr.
KENNEDY of Rhode Island, Mr. LANGEVIN, Mr. CLYBURN, Mr. SPENCE,
Mr. SPRATT, Mr. GRAHAM, Mr. JENKINS, Mr. FORD, Mr. HILLEARY, Mr.
WAMP, Mr. TANNER, Mr. TURNER, Ms. JACKSON-LEE of Texas, Mr.
LAMPSON, Mr. SANDLIN, Mr. BENTSEN, Mr. BOUCHER, Mr. GOODE, Mr.
WOLF, Mr. SCOTT, Mr. SANDERS, Mr. RAHALL, Mr. MOLLOHAN, Mrs.
CAPITO, and Mr. FROST) introduced the following bill; which was referred
to the Committee on the Judiciary
A BILL
To reauthorize the consent of Congress to the Northeast
Interstate Dairy Compact and to grant the consent of
Congress to the Southern Dairy Compact, a Pacific
Northwest Dairy Compact, and an Intermountain Dairy
Compact.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Dairy Consumers and
Producers Protection Act of 2001’’.
SEC. 2. NORTHEAST INTERSTATE DAIRY COMPACT.
Section 147 of the Agricultural Market Transition
Act (7 U.S.C. 7256) is amended—
(1) in the matter preceding paragraph (1), by
striking ‘‘States’’ and all that follows through
‘‘Vermont’’ and inserting ‘‘States of Connecticut,
Delaware, Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, and Vermont’’;
(2) by striking paragraphs (1), (3), and (7);
(3) in paragraph (2), by striking ‘‘Class III-A’’
and inserting ‘‘Class IV’’;
(4) by striking paragraph (4) and inserting the
following:
‘‘(4) ADDITIONAL STATE.—Ohio is the only ad-
ditional State that may join the Northeast Interstate
Dairy Compact.’’;
(5) in paragraph (5), by striking ‘‘the projected
rate of increase’’ and all that follows through ‘‘Sec-
retary’’ and inserting ‘‘the operation of the Compact
price regulation during the fiscal year, as determined
by the Secretary (in consultation with the Commis-
sion) using notice and comment procedures provided
in section 553 of title 5, United States Code’’; and
(6) by redesignating paragraphs (2), (4), (5),
and (6) as paragraphs (1), (2), (3), and (4), respec-
tively.
SEC. 3. SOUTHERN DAIRY COMPACT.
(a) IN GENERAL.—Congress consents to the South-
ern Dairy Compact entered into among the States of Ala-
bama, Arkansas, Georgia, Kansas, Kentucky, Louisiana,
Mississippi, Missouri, North Carolina, Oklahoma, South
Carolina, Tennessee, Virginia, and West Virginia, subject
to the following conditions:
(1) LIMITATION
OF
MANUFACTURING
PRICE
REGULATION.—The Southern Dairy Compact Com-
mission may not regulate Class II, Class III, or
Class IV milk used for manufacturing purposes or
any other milk, other than Class I, or fluid milk, as
defined by a Federal milk marketing order issued
under section 8c of the Agricultural Adjustment Act
(7 U.S.C. 608c), reenacted with amendments by the
Agricultural Marketing Act of 1937 (referred to in
this section as a ‘‘Federal milk marketing order’’)
unless Congress has first consented to and approved
such authority by a law enacted after the date of en-
actment of this joint resolution.
(2) ADDITIONAL STATES.—Florida, Nebraska,
and Texas are the only additional States that may
join the Southern Dairy Compact, individually or
otherwise.
(3) COMPENSATION
OF
COMMODITY
CREDIT
CORPORATION.—Before the end of each fiscal year
in which a Compact price regulation is in effect, the
Southern Dairy Compact Commission shall com-
pensate the Commodity Credit Corporation for the
cost of any purchases of milk and milk products by
the Corporation that result from the operation of the
Compact price regulation during the fiscal year, as
determined by the Secretary (in consultation with
the Commission) using notice and comment proce-
dures provided in section 553 of title 5, United
States Code.
(4) 
MILK
MARKETING
ORDER
ADMINIS-
TRATOR.—At the request of the Southern Dairy
Compact Commission, the Administrator of the ap-
plicable Federal milk marketing order shall provide
technical assistance to the Compact Commission and
be compensated for that assistance.
(b) COMPACT.—The Southern Dairy Compact is sub-
stantially as follows:
‘‘ARTICLE 
I. 
STATEMENT 
OF
PURPOSE, 
FINDINGS 
AND
DECLARATION OF POLICY
‘‘§ 1. Statement of purpose, findings and declaration
of policy
‘‘The purpose of this compact is to recognize the
interstate character of the southern dairy industry and the
prerogative of the states under the United States Con-
stitution to form an interstate commission for the south-
ern region. The mission of the commission is to take such
steps as are necessary to assure the continued viability of
dairy farming in the south, and to assure consumers of
an adequate, local supply of pure and wholesome milk.
‘‘The participating states find and declare that the
dairy industry is an essential agricultural activity of the
south. Dairy farms, and associated suppliers, marketers,
processors and retailers are an integral component of the
region’s economy. Their ability to provide a stable, local
supply of pure, wholesome milk is a matter of great impor-
tance to the health and welfare of the region.
‘‘The participating states further find that dairy
farms are essential and they are an integral part of the
region’s rural communities. The farms preserve land for
agricultural purposes and provide needed economic stimuli
for rural communities.
‘‘In establishing their constitutional regulatory au-
thority over the region’s fluid milk market by this com-
pact, the participating states declare their purpose that
this compact neither displace the federal order system nor
encourage the merging of federal orders. Specific provi-
sions of the compact itself set forth this basic principle.
‘‘Designed as a flexible mechanism able to adjust to
changes in a regulated marketplace, the compact also con-
tains a contingency provision should the federal order sys-
tem be discontinued. In that event, the interstate commis-
sion is authorized to regulate the marketplace in replace-
ment of the order system. This contingent authority does
not anticipate such a change, however, and should not be
so construed. It is only provided should developments in
the market other than establishment of this compact re-
sult in discontinuance of the order system.
‘‘By entering into this compact, the participating
states affirm that their ability to regulate the price which
southern dairy farmers receive for their product is essen-
tial to the public interest. Assurance of a fair and equi-
table price for dairy farmers ensures their ability to pro-
vide milk to the market and the vitality of the southern
dairy industry, with all the associated benefits.
‘‘Recent, dramatic price fluctuations, with a pro-
nounced downward trend, threaten the viability and sta-
bility of the southern dairy region. Historically, individual
state regulatory action had been an effective emergency
remedy available to farmers confronting a distressed mar-
ket. The federal order system, implemented by the Agri-
cultural Marketing Agreement Act of 1937, establishes
only minimum prices paid to producers for raw milk, with-
out preempting the power of states to regulate milk prices
above the minimum levels so established.
‘‘In today’s regional dairy marketplace, cooperative,
rather than individual state action is needed to more effec-
tively address the market disarray. Under our constitu-
tional system, properly authorized states acting coopera-
tively may exercise more power to regulate interstate com-
merce than they may assert individually without such au-
thority. For this reason, the participating states invoke
their authority to act in common agreement, with the con-
sent of Congress, under the compact clause of the Con-
stitution.
‘‘ARTICLE II. DEFINITIONS AND
RULES OF CONSTRUCTION
‘‘§ 2. Definitions
‘‘For the purposes of this compact, and of any supple-
mental or concurring legislation enacted pursuant thereto,
except as may be otherwise required by the context:
‘‘(1) ‘Class I milk’ means milk disposed of in
fluid form or as a fluid milk product, subject to fur-
ther definition in accordance with the principles ex-
pressed in subdivision (b) of section three.
‘‘(2) ‘Commission’ means the Southern Dairy
Compact Commission established by this compact.
‘‘(3) ‘Commission marketing order’ means regu-
lations adopted by the commission pursuant to sec-
tions nine and ten of this compact in place of a ter-
minated federal marketing order or state dairy regu-
lation. Such order may apply throughout the region
or in any part or parts thereof as defined in the reg-
ulations of the commission. Such order may estab-
lish minimum prices for any or all classes of milk.
‘‘(4) ‘Compact’ means this interstate compact.
‘‘(5) ‘Compact over-order price’ means a min-
imum price required to be paid to producers for
Class I milk established by the commission in regu-
lations adopted pursuant to sections nine and ten of
this compact, which is above the price established in
federal marketing orders or by state farm price reg-
ulations in the regulated area. Such price may apply
throughout the region or in any part or parts there-
of as defined in the regulations of the commission.
‘‘(6) ‘Milk’ means the lacteral secretion of cows
and includes all skim, butterfat, or other constitu-
ents obtained from separation or any other process.
The term is used in its broadest sense and may be
further defined by the commission for regulatory
purposes.
‘‘(7) ‘Partially regulated plant’ means a milk
plant not located in a regulated area but having
Class I distribution within such area. Commission
regulations may exempt plants having such distribu-
tion or receipts in amounts less than the limits de-
fined therein.
‘‘(8) ‘Participating state’ means a state which
has become a party to this compact by the enact-
ment of concurring legislation.
‘‘(9) ‘Pool plant’ means any milk plant located
in a regulated area.
‘‘(10) ‘Region’ means the territorial limits of
the states which are parties to this compact.
‘‘(11) ‘Regulated area’ means any area within
the region governed by and defined in regulations es-
tablishing a compact over-order price or commission
marketing order.
‘‘(12) ‘State dairy regulation’ means any state
regulation of dairy prices, and associated assess-
ments, whether by statute, marketing order or other-
wise.
‘‘§ 3. Rules of construction
‘‘(a) This compact shall not be construed to displace
existing federal milk marketing orders or state dairy regu-
lation in the region but to supplement them. In the event
some or all federal orders in the region are discontinued,
the compact shall be construed to provide the commission
the option to replace them with one or more commission
marketing orders pursuant to this compact.
‘‘(b) The compact shall be construed liberally in order
to achieve the purposes and intent enunciated in section
one. It is the intent of this compact to establish a basic
structure by which the commission may achieve those pur-
poses through the application, adaptation and develop-
ment of the regulatory techniques historically associated
with milk marketing and to afford the commission broad
flexibility to devise regulatory mechanisms to achieve the
purposes of this compact. In accordance with this intent,
the technical terms which are associated with market
order regulation and which have acquired commonly un-
derstood general meanings are not defined herein but the
commission may further define the terms used in this com-
pact and develop additional concepts and define additional
terms as it may find appropriate to achieve its purposes.
‘‘ARTICLE III. COMMISSION
ESTABLISHED
‘‘§ 4. Commission established
‘‘There is hereby created a commission to administer
the compact, composed of delegations from each state in
the region. The commission shall be known as the South-
ern Dairy Compact Commission. A delegation shall include
not less than three nor more than five persons. Each dele-
gation shall include at least one dairy farmer who is en-
gaged in the production of milk at the time of appointment
or reappointment, and one consumer representative. Dele-
gation members shall be residents and voters of, and sub-
ject to such confirmation process as is provided for in the
appointing state. Delegation members shall serve no more
than three consecutive terms with no single term of more
than four years, and be subject to removal for cause. In
all other respects, delegation members shall serve in ac-
cordance with the laws of the state represented. The com-
pensation, if any, of the members of a state delegation
shall be determined and paid by each state, but their ex-
penses shall be paid by the commission.
‘‘§ 5. Voting requirements
‘‘All actions taken by the commission, except for the
establishment or termination of an over-order price or
commission marketing order, and the adoption, amend-
ment or rescission of the commission’s by-laws, shall be
by majority vote of the delegations present. Each state del-
egation shall be entitled to one vote in the conduct of the
commission’s affairs. Establishment or termination of an
over-order price or commission marketing order shall re-
quire at least a two-thirds vote of the delegations present.
The establishment of a regulated area which covers all or
part of a participating state shall require also the affirma-
tive vote of that state’s delegation. A majority of the dele-
gations from the participating states shall constitute a
quorum for the conduct of the commission’s business.
‘‘§ 6. Administration and management
‘‘(a) The commission shall elect annually from among
the members of the participating state delegations a chair-
person, a vice-chairperson, and a treasurer. The commis-
sion shall appoint an executive director and fix his or her
duties and compensation. The executive director shall
serve at the pleasure of the commission, and together with
the treasurer, shall be bonded in an amount determined
by the commission. The commission may establish through
its by-laws an executive committee composed of one mem-
ber elected by each delegation.
‘‘(b) The commission shall adopt by-laws for the con-
duct of its business by a two-thirds vote, and shall have
the power by the same vote to amend and rescind these
by-laws. The commission shall publish its by-laws in con-
venient form with the appropriate agency or officer in each
of the participating states. The by-laws shall provide for
appropriate notice to the delegations of all commission
meetings and hearings and of the business to be trans-
acted at such meetings or hearings. Notice also shall be
given to other agencies or officers of participating states
as provided by the laws of those states.
‘‘(c) The commission shall file an annual report with
the Secretary of Agriculture of the United States, and
with each of the participating states by submitting copies
to the governor, both houses of the legislature, and the
head of the state department having responsibilities for
agriculture.
‘‘(d) In addition to the powers and duties elsewhere
prescribed in this compact, the commission shall have the
power:
‘‘(1) To sue and be sued in any state or federal
court;
‘‘(2) To have a seal and alter the same at pleas-
ure;
‘‘(3) To acquire, hold, and dispose of real and
personal property by gift, purchase, lease, license, or
other similar manner, for its corporate purposes;
‘‘(4) To borrow money and issue notes, to pro-
vide for the rights of the holders thereof and to
pledge the revenue of the commission as security
therefor, subject to the provisions of section eighteen
of this compact;
‘‘(5) To appoint such officers, agents, and em-
ployees as it may deem necessary, prescribe their
powers, duties and qualifications; and
‘‘(6) To create and abolish such offices, employ-
ments and positions as it deems necessary for the
purposes of the compact and provide for the re-
moval, term, tenure, compensation, fringe benefits,
pension, and retirement rights of its officers and em-
ployees. The commission may also retain personal
services on a contract basis.
‘‘§ 7. Rulemaking power
‘‘In addition to the power to promulgate a compact
over-order price or commission marketing orders as pro-
vided by this compact, the commission is further empow-
ered to make and enforce such additional rules and regula-
tions as it deems necessary to implement any provisions
of this compact, or to effectuate in any other respect the
purposes of this compact.
‘‘ARTICLE IV. POWERS OF THE
COMMISSION
‘‘§ 8. Powers to promote regulatory uniformity, sim-
plicity, and interstate cooperation
‘‘The commission is hereby empowered to:
‘‘(1) Investigate or provide for investigations or
research projects designed to review the existing
laws and regulations of the participating states, to
consider their administration and costs, to measure
their impact on the production and marketing of
milk and their effects on the shipment of milk and
milk products within the region.
‘‘(2) Study and recommend to the participating
states joint or cooperative programs for the adminis-
tration of the dairy marketing laws and regulations
and to prepare estimates of cost savings and benefits
of such programs.
‘‘(3) Encourage the harmonious relationships
between the various elements in the industry for the
solution 
of 
their 
material 
problems. 
Conduct
symposia or conferences designed to improve indus-
try relations, or a better understanding of problems.
‘‘(4) Prepare and release periodic reports on ac-
tivities and results of the commission’s efforts to the
participating states.
‘‘(5) Review the existing marketing system for
milk and milk products and recommend changes in
the existing structure for assembly and distribution
of milk which may assist, improve or promote more
efficient assembly and distribution of milk.
‘‘(6) Investigate costs and charges for pro-
ducing, hauling, handling, processing, distributing,
selling and for all other services performed with re-
spect to milk.
‘‘(7) Examine current economic forces affecting
producers, probable trends in production and con-
sumption, the level of dairy farm prices in relation
to costs, the financial conditions of dairy farmers,
and the need for an emergency order to relieve crit-
ical conditions on dairy farms.
‘‘§ 9. Equitable farm prices
‘‘(a) The powers granted in this section and section
ten shall apply only to the establishment of a compact
over-order price, so long as federal milk marketing orders
remain in effect in the region. In the event that any or
all such orders are terminated, this article shall authorize
the commission to establish one or more commission mar-
keting orders, as herein provided, in the region or parts
thereof as defined in the order.
‘‘(b) A compact over-order price established pursuant
to this section shall apply only to Class I milk. Such com-
pact over-order price shall not exceed one dollar and fifty
cents per gallon at Atlanta, Ga., however, this compact
over-order price shall be adjusted upward or downward at
other locations in the region to reflect differences in min-
imum federal order prices. Beginning in nineteen hundred
ninety, and using that year as a base, the foregoing one
dollar fifty cents per gallon maximum shall be adjusted
annually by the rate of change in the Consumer Price
Index as reported by the Bureau of Labor Statistics of
the United States Department of Labor. For purposes of
the pooling and equalization of an over-order price, the
value of milk used in other use classifications shall be cal-
culated at the appropriate class price established pursuant
to the applicable federal order or state dairy regulation
and the value of unregulated milk shall be calculated in
relation to the nearest prevailing class price in accordance
with and subject to such adjustments as the commission
may prescribe in regulations.
‘‘(c) A commission marketing order shall apply to all
classes and uses of milk.
‘‘(d) The commission is hereby empowered to estab-
lish a compact over-order price for milk to be paid by pool
plants and partially regulated plants. The commission is
also empowered to establish a compact over-order price to
be paid by all other handlers receiving milk from pro-
ducers located in a regulated area. This price shall be es-
tablished either as a compact over-order price or by one
or more commission marketing orders. Whenever such a
price has been established by either type of regulation, the
legal obligation to pay such price shall be determined sole-
ly by the terms and purpose of the regulation without re-
gard to the situs of the transfer of title, possession or any
other factors not related to the purposes of the regulation
and this compact. Producer-handlers as defined in an ap-
plicable federal market order shall not be subject to a com-
pact over-order price. The commission shall provide for
similar treatment of producer-handlers under commission
marketing orders.
‘‘(e) In determining the price, the commission shall
consider the balance between production and consumption
of milk and milk products in the regulated area, the costs
of production including, but not limited to the price of
feed, the cost of labor including the reasonable value of
the producer’s own labor and management, machinery ex-
pense, and interest expense, the prevailing price for milk
outside the regulated area, the purchasing power of the
public and the price necessary to yield a reasonable return
to the producer and distributor.
‘‘(f) When establishing a compact over-order price,
the commission shall take such other action as is necessary
and feasible to help ensure that the over-order price does
not cause or compensate producers so as to generate local
production of milk in excess of those quantities necessary
to assure consumers of an adequate supply for fluid pur-
poses.
‘‘(g) The commission shall whenever possible enter
into agreements with state or federal agencies for ex-
change of information or services for the purpose of reduc-
ing regulatory burden and cost of administering the com-
pact. The commission may reimburse other agencies for
the reasonable cost of providing these services.
‘‘§ 10. Optional provisions for pricing order
‘‘Regulations establishing a compact over-order price
or a commission marketing order may contain, but shall
not be limited to any of the following:
‘‘(1) Provisions classifying milk in accordance
with the form in which or purpose for which it is
used, or creating a flat pricing program.
‘‘(2) With respect to a commission marketing
order only, provisions establishing or providing a
method for establishing separate minimum prices for
each use classification prescribed by the commission,
or a single minimum price for milk purchased from
producers or associations of producers.
‘‘(3) With respect to an over-order minimum
price, provisions establishing or providing a method
for establishing such minimum price for Class I
milk.
‘‘(4) Provisions for establishing either an over-
order price or a commission marketing order may
make use of any reasonable method for establishing
such price or prices including flat pricing and for-
mula pricing. Provision may also be made for loca-
tion adjustments, zone differentials and for competi-
tive credits with respect to regulated handlers who
market outside the regulated area.
‘‘(5) Provisions for the payment to all pro-
ducers and associations of producers delivering milk
to all handlers of uniform prices for all milk so deliv-
ered, irrespective of the uses made of such milk by
the individual handler to whom it is delivered, or for
the payment of producers delivering milk to the
same handler of uniform prices for all milk delivered
by them.
‘‘(A) With respect to regulations estab-
lishing a compact over-order price, the commis-
sion may establish one equalization pool within
the regulated area for the sole purpose of equal-
izing returns to producers throughout the regu-
lated area.
‘‘(B) With respect to any commission mar-
keting order, as defined in section two, subdivi-
sion three, which replaces one or more termi-
nated federal orders or state dairy regulations,
the marketing area of now separate state or
federal orders shall not be merged without the
affirmative consent of each state, voting
through its delegation, which is partly or wholly
included within any such new marketing area.
‘‘(6) Provisions requiring persons who bring
Class I milk into the regulated area to make com-
pensatory payments with respect to all such milk to
the extent necessary to equalize the cost of milk pur-
chased by handlers subject to a compact over-order
price or commission marketing order. No such provi-
sions shall discriminate against milk producers out-
side the regulated area. The provisions for compen-
satory payments may require payment of the dif-
ference between the Class I price required to be paid
for such milk in the state of production by a federal
milk marketing order or state dairy regulation and
the Class I price established by the compact over-
order price or commission marketing order.
‘‘(7) Provisions specially governing the pricing
and pooling of milk handled by partially regulated
plants.
‘‘(8) Provisions requiring that the account of
any person regulated under the compact over-order
price shall be adjusted for any payments made to or
received by such persons with respect to a producer
settlement fund of any federal or state milk mar-
keting order or other state dairy regulation within
the regulated area.
‘‘(9) Provision requiring the payment by han-
dlers of an assessment to cover the costs of the ad-
ministration and enforcement of such order pursu-
ant to Article VII, Section 18(a).
‘‘(10) Provisions for reimbursement to partici-
pants of the Women, Infants and Children Special
Supplemental Food Program of the United States
Child Nutrition Act of 1966.
‘‘(11) Other provisions and requirements as the
commission may find are necessary or appropriate to
effectuate the purposes of this compact and to pro-
vide for the payment of fair and equitable minimum
prices to producers.
‘‘ARTICLE V. RULEMAKING
PROCEDURE
‘‘§ 11. Rulemaking procedure
‘‘Before promulgation of any regulations establishing
a compact over-order price or commission marketing
order, including any provision with respect to milk supply
under subsection 9(f), or amendment thereof, as provided
in Article IV, the commission shall conduct an informal
rulemaking proceeding to provide interested persons with
an opportunity to present data and views. Such rule-
making proceeding shall be governed by section four of
the Federal Administrative Procedure Act, as amended (5
U.S.C. § 553). In addition, the commission shall, to the
extent practicable, publish notice of rulemaking pro-
ceedings in the official register of each participating state.
Before the initial adoption of regulations establishing a
compact over-order price or a commission marketing order
and thereafter before any amendment with regard to
prices or assessments, the commission shall hold a public
hearing. The commission may commence a rulemaking
proceeding on its own initiative or may in its sole discre-
tion act upon the petition of any person including indi-
vidual milk producers, any organization of milk producers
or handlers, general farm organizations, consumer or pub-
lic interest groups, and local, state or federal officials.
‘‘§ 12. Findings and referendum
‘‘(a) In addition to the concise general statement of
basis and purpose required by section 4(b) of the Federal
Administrative Procedure Act, as amended (5 U.S.C.
§ 553(c)), the commission shall make findings of fact with
respect to:
‘‘(1) Whether the public interest will be served
by the establishment of minimum milk prices to
dairy farmers under Article IV.
‘‘(2) What level of prices will assure that pro-
ducers receive a price sufficient to cover their costs
of production and will elicit an adequate supply of
milk for the inhabitants of the regulated area and
for manufacturing purposes.
‘‘(3) Whether the major provisions of the order,
other than those fixing minimum milk prices, are in
the public interest and are reasonably designed to
achieve the purposes of the order.
‘‘(4) Whether the terms of the proposed re-
gional order or amendment are approved by pro-
ducers as provided in section thirteen.
‘‘§ 13. Producer referendum
‘‘(a) For the purpose of ascertaining whether the
issuance or amendment of regulations establishing a com-
pact over-order price or a commission marketing order,
including any provision with respect to milk supply under
subsection 9(f), is approved by producers, the commission
shall conduct a referendum among producers. The ref-
erendum shall be held in a timely manner, as determined
by regulation of the commission. The terms and conditions
of the proposed order or amendment shall be described
by the commission in the ballot used in the conduct of
the referendum, but the nature, content, or extent of such
description shall not be a basis for attacking the legality
of the order or any action relating thereto.
‘‘(b) An order or amendment shall be deemed ap-
proved by producers if the commission determines that it
is approved by at least two-thirds of the voting producers
who, during a representative period determined by the
commission, have been engaged in the production of milk
the price of which would be regulated under the proposed
order or amendment.
‘‘(c) For purposes of any referendum, the commission
shall consider the approval or disapproval by any coopera-
tive association of producers, qualified under the provi-
sions of the Act of Congress of February 18, 1922, as
amended, known as the Capper–Volstead Act, bona fide
engaged in marketing milk, or in rendering services for
or advancing the interests of producers of such com-
modity, as the approval or disapproval of the producers
who are members or stockholders in, or under contract
with, such cooperative association of producers, except as
provided in subdivision (1) hereof and subject to the provi-
sions of subdivision (2) through (5) hereof.
‘‘(1) No cooperative which has been formed to
act as a common marketing agency for both coopera-
tives and individual producers shall be qualified to
block vote for either.
‘‘(2) Any cooperative which is qualified to block
vote shall, before submitting its approval or dis-
approval in any referendum, give prior written notice
to each of its members as to whether and how it in-
tends to cast its vote. The notice shall be given in
a timely manner as established, and in the form pre-
scribed, by the commission.
‘‘(3) Any producer may obtain a ballot from the
commission in order to register approval or dis-
approval of the proposed order.
‘‘(4) A producer who is a member of a coopera-
tive which has provided notice of its intent to ap-
prove or not to approve a proposed order, and who
obtains a ballot and with such ballot expresses his
approval or disapproval of the proposed order, shall
notify the commission as to the name of the coopera-
tive of which he or she is a member, and the com-
mission shall remove such producer’s name from the
list certified by such cooperative with its corporate
vote.
‘‘(5) In order to insure that all milk producers
are informed regarding the proposed order, the com-
mission shall notify all milk producers that an order
is being considered and that each producer may reg-
ister his approval or disapproval with the commis-
sion either directly or through his or her cooperative.
‘‘§ 14. Termination of over-order price or marketing
order
‘‘(a) The commission shall terminate any regulations
establishing an over-order price or commission marketing
order issued under this article whenever it finds that such
order or price obstructs or does not tend to effectuate the
declared policy of this compact.
‘‘(b) The commission shall terminate any regulations
establishing an over-order price or a commission mar-
keting order issued under this article whenever it finds
that such termination is favored by a majority of the pro-
ducers who, during a representative period determined by
the commission, have been engaged in the production of
milk the price of which is regulated by such order; but
such termination shall be effective only if announced on
or before such date as may be specified in such marketing
agreement or order.
‘‘(c) The termination or suspension of any order or
provision thereof, shall not be considered an order within
the meaning of this article and shall require no hearing,
but shall comply with the requirements for informal rule-
making prescribed by section four of the Federal Adminis-
trative Procedure Act, as amended (5 U.S.C. § 553).
‘‘ARTICLE VI. ENFORCEMENT
‘‘§ 15. Records; reports; access to premises
‘‘(a) The commission may by rule and regulation pre-
scribe record keeping and reporting requirements for all
regulated persons. For purposes of the administration and
enforcement of this compact, the commission is authorized
to examine the books and records of any regulated person
relating to his or her milk business and for that purpose,
the commission’s properly designated officers, employees,
or agents shall have full access during normal business
hours to the premises and records of all regulated persons.
‘‘(b) Information furnished to or acquired by the
commission officers, employees, or its agents pursuant to
this section shall be confidential and not subject to disclo-
sure except to the extent that the commission deems dis-
closure to be necessary in any administrative or judicial
proceeding involving the administration or enforcement of
this compact, an over-order price, a compact marketing
order, or other regulations of the commission. The com-
mission may promulgate regulations further defining the
confidentiality of information pursuant to this section.
Nothing in this section shall be deemed to prohibit (i) the
issuance of general statements based upon the reports of
a number of handlers, which do not identify the informa-
tion furnished by any person, or (ii) the publication by
direction of the commission of the name of any person vio-
lating any regulation of the commission, together with a
statement of the particular provisions violated by such
person.
‘‘(c) No officer, employee, or agent of the commission
shall intentionally disclose information, by inference or
otherwise, which is made confidential pursuant to this sec-
tion. Any person violating the provisions of this section
shall, upon conviction, be subject to a fine of not more
than one thousand dollars or to imprisonment for not
more than one year, or to both, and shall be removed from
office. The commission shall refer any allegation of a viola-
tion of this section to the appropriate state enforcement
authority or United States Attorney.
‘‘§ 16. Subpoena; hearings and judicial review
‘‘(a) The commission is hereby authorized and em-
powered by its members and its properly designated offi-
cers to administer oaths and issue subpoenas throughout
all signatory states to compel the attendance of witnesses
and the giving of testimony and the production of other
evidence.
‘‘(b) Any handler subject to an order may file a writ-
ten petition with the commission stating that any such
order or any provision of any such order or any obligation
imposed in connection therewith is not in accordance with
law and praying for a modification thereof or to be ex-
empted therefrom. He shall thereupon be given an oppor-
tunity for a hearing upon such petition, in accordance with
regulations made by the commission. After such hearing,
the commission shall make a ruling upon the prayer of
such petition which shall be final, if in accordance with
law.
‘‘(c) The district courts of the United States in any
district in which such handler is an inhabitant, or has his
principal place of business, are hereby vested with jurisdic-
tion to review such ruling, provided a complaint for that
purpose is filed within thirty days from the date of the
entry of such ruling. Service of process in such pro-
ceedings may be had upon the commission by delivering
to it a copy of the complaint. If the court determines that
such ruling is not in accordance with law, it shall remand
such proceedings to the commission with directions either
(1) to make such ruling as the court shall determine to
be in accordance with law, or (2) to take such further pro-
ceedings as, in its opinion, the law requires. The pendency
of proceedings instituted pursuant to this subdivision shall
not impede, hinder, or delay the commission from obtain-
ing relief pursuant to section seventeen. Any proceedings
brought pursuant to section seventeen, except where
brought by way of counterclaim in proceedings instituted
pursuant to this section, shall abate whenever a final de-
cree has been rendered in proceedings between the same
parties, and covering the same subject matter, instituted
pursuant to this section.
‘‘§ 17. Enforcement with respect to handlers
‘‘(a) Any violation by a handler of the provisions of
regulations establishing an over-order price or a commis-
sion marketing order, or other regulations adopted pursu-
ant to this compact shall:
‘‘(1) Constitute a violation of the laws of each
of the signatory states. Such violation shall render
the violator subject to a civil penalty in an amount
as may be prescribed by the laws of each of the par-
ticipating states, recoverable in any state or federal
court of competent jurisdiction. Each day such viola-
tion continues shall constitute a separate violation.
‘‘(2) Constitute grounds for the revocation of li-
cense or permit to engage in the milk business under
the applicable laws of the participating states.
‘‘(b) With respect to handlers, the commission shall
enforce the provisions of this compact, regulations estab-
lishing an over-order price, a commission marketing order
or other regulations adopted hereunder by:
‘‘(1) Commencing an action for legal or equi-
table relief brought in the name of the commission
of any state or federal court of competent jurisdic-
tion; or
‘‘(2) Referral to the state agency for enforce-
ment by judicial or administrative remedy with the
agreement of the appropriate state agency of a par-
ticipating state.
‘‘(c) With respect to handlers, the commission may
bring an action for injunction to enforce the provisions
of this compact or the order or regulations adopted there-
under without being compelled to allege or prove that an
adequate remedy of law does not exist.
‘‘ARTICLE VII. FINANCE
‘‘§ 18. Finance of start-up and regular costs
‘‘(a) To provide for its start-up costs, the commission
may borrow money pursuant to its general power under
section six, subdivision (d), paragraph four. In order to
finance the costs of administration and enforcement of
this compact, including payback of start-up costs, the
commission is hereby empowered to collect an assessment
from each handler who purchases milk from producers
within the region. If imposed, this assessment shall be col-
lected on a monthly basis for up to one year from the date
the commission convenes, in an amount not to exceed
$.015 per hundredweight of milk purchased from pro-
ducers during the period of the assessment. The initial as-
sessment may apply to the projected purchases of handlers
for the two-month period following the date the commis-
sion convenes. In addition, if regulations establishing an
over-order price or a compact marketing order are adopt-
ed, they may include an assessment for the specific pur-
pose of their administration. These regulations shall pro-
vide for establishment of a reserve for the commission’s
ongoing operating expenses.
‘‘(b) The commission shall not pledge the credit of
any participating state or of the United States. Notes
issued by the commission and all other financial obliga-
tions incurred by it, shall be its sole responsibility and no
participating state or the United States shall be liable
therefor.
‘‘§ 19. Audit and accounts
‘‘(a) The commission shall keep accurate accounts of
all receipts and disbursements, which shall be subject to
the audit and accounting procedures established under its
rules. In addition, all receipts and disbursements of funds
handled by the commission shall be audited yearly by a
qualified public accountant and the report of the audit
shall be included in and become part of the annual report
of the commission.
‘‘(b) The accounts of the commission shall be open
at any reasonable time for inspection by duly constituted
officers of the participating states and by any persons au-
thorized by the commission.
‘‘(c) Nothing contained in this article shall be con-
strued to prevent commission compliance with laws relat-
ing to audit or inspection of accounts by or on behalf of
any participating state or of the United States.
‘‘ARTICLE 
VIII. 
ENTRY 
INTO
FORCE; 
ADDITIONAL 
MEM-
BERS AND WITHDRAWAL
‘‘§ 20. Entry into force; additional members
‘‘The compact shall enter into force effective when
enacted into law by any three states of the group of states
composed of Alabama, Arkansas, Florida, Georgia, Ken-
tucky, Louisiana, Maryland, Mississippi, North Carolina,
Oklahoma, South Carolina, Tennessee, Texas, Virginia
and West Virginia and when the consent of Congress has
been obtained.
‘‘§ 21. Withdrawal from compact
‘‘Any participating state may withdraw from this
compact by enacting a statute repealing the same, but no
such withdrawal shall take effect until one year after no-
tice in writing of the withdrawal is given to the commis-
sion and the governors of all other participating states.
No withdrawal shall affect any liability already incurred
by or chargeable to a participating state prior to the time
of such withdrawal.
‘‘§ 22. Severability
‘‘If any part or provision of this compact is adjudged
invalid by any court, such judgment shall be confined in
its operation to the part or provision directly involved in
the controversy in which such judgment shall have been
rendered and shall not affect or impair the validity of the
remainder of this compact. In the event Congress consents
to this compact subject to conditions, said conditions shall
not impair the validity of this compact when said condi-
tions are accepted by three or more compacting states. A
compacting state may accept the conditions of Congress
by implementation of this compact.’’.
SEC. 4. PACIFIC NORTHWEST DAIRY COMPACT.
Congress consents to a Pacific Northwest Dairy Com-
pact proposed for the States of California, Oregon, and
Washington, subject to the following conditions:
(1) TEXT.—The text of the Pacific Northwest
Dairy Compact shall be identical to the text of the
Southern Dairy Compact, except as follows:
(A) References to ‘‘south’’, ‘‘southern’’,
and ‘‘Southern’’ shall be changed to ‘‘Pacific
Northwest’’.
(B) In section 9(b), the reference to ‘‘At-
lanta, Georgia’’ shall be changed to ‘‘Seattle,
Washington’’.
(C) In section 20, the reference to ‘‘any
three’’ and all that follows shall be changed to
‘‘California, Oregon, and Washington.’’.
(2) LIMITATION
OF
MANUFACTURING
PRICE
REGULATION.—The Dairy Compact Commission es-
tablished to administer the Pacific Northwest Dairy
Compact (referred to in this section as the ‘‘Com-
mission’’) may not regulate Class II, Class III, or
Class IV milk used for manufacturing purposes or
any other milk, other than Class I, or fluid milk, as
defined by a Federal milk marketing order issued
under section 8c of the Agricultural Adjustment Act
(7 U.S.C. 608c), reenacted with amendments by the
Agricultural Marketing Act of 1937 (referred to in
this section as a ‘‘Federal milk marketing order’’).
(3) EFFECTIVE DATE.—Congressional consent
under this section takes effect on the date (not later
than 3 year after the date of enactment of this Act)
on which the Pacific Northwest Dairy Compact is
entered into by the second of the 3 States specified
in the matter preceding paragraph (1).
(4) COMPENSATION
OF
COMMODITY
CREDIT
CORPORATION.—Before the end of each fiscal year
in which a price regulation is in effect under the Pa-
cific Northwest Dairy Compact, the Commission
shall compensate the Commodity Credit Corporation
for the cost of any purchases of milk and milk prod-
ucts by the Corporation that result from the oper-
ation of the Compact price regulation during the fis-
cal year, as determined by the Secretary (in con-
sultation with the Commission) using notice and
comment procedures provided in section 553 of title
5, United States Code.
(5) 
MILK
MARKETING
ORDER
ADMINIS-
TRATOR.—At the request of the Commission, the
Administrator of the applicable Federal milk mar-
keting order shall provide technical assistance to the
Commission and be compensated for that assistance.
SEC. 5. INTERMOUNTAIN DAIRY COMPACT.
Congress consents to an Intermountain Dairy Com-
pact proposed for the States of Colorado, Nevada, and
Utah, subject to the following conditions:
(1) TEXT.—The text of the Intermountain
Dairy Compact shall be identical to the text of the
Southern Dairy Compact, except as follows:
(A) In section 1, the references to ‘‘south-
ern’’ and ‘‘south’’ shall be changed to ‘‘Inter-
mountain’’ and ‘‘Intermountain region’’, respec-
tively.
(B) References to ‘‘Southern’’ shall be
changed to ‘‘Intermountain ’’.
(C) In section 9(b), the reference to ‘‘At-
lanta, Georgia’’ shall be changed to ‘‘Salt Lake
City, Utah’’.
(D) In section 20, the reference to ‘‘any
three’’ and all that follows shall be changed to
‘‘Colorado, Nevada, and Utah.’’.
(2) LIMITATION
OF
MANUFACTURING
PRICE
REGULATION.—The Dairy Compact Commission es-
tablished to administer the Intermountain Dairy
Compact (referred to in this section as the ‘‘Com-
mission’’) may not regulate Class II, Class III, or
Class IV milk used for manufacturing purposes or
any other milk, other than Class I, or fluid milk, as
defined by a Federal milk marketing order issued
under section 8c of the Agricultural Adjustment Act
(7 U.S.C. 608c), reenacted with amendments by the
Agricultural Marketing Act of 1937 (referred to in
this section as a ‘‘Federal milk marketing order’’).
(3) EFFECTIVE DATE.—Congressional consent
under this section takes effect on the date (not later
than 3 year after the date of enactment of this Act)
on which the Intermountain Dairy Compact is en-
tered into by the second of the 3 States specified in
the matter preceding paragraph (1).
(4) COMPENSATION
OF
COMMODITY
CREDIT
CORPORATION.—Before the end of each fiscal year
in which a price regulation is in effect under the
Intermountain Dairy Compact, the Commission shall
compensate the Commodity Credit Corporation for
the cost of any purchases of milk and milk products
by the Corporation that result from the operation of
the Compact price regulation during the fiscal year,
as determined by the Secretary (in consultation with
the Commission) using notice and comment proce-
dures provided in section 553 of title 5, United
States Code.
(5) 
MILK
MARKETING
ORDER
ADMINIS-
TRATOR.—At the request of the Commission, the
Administrator of the applicable Federal milk mar-
keting order shall provide technical assistance to the
Commission and be compensated for that assistance.
Æ