I 
108TH CONGRESS 
1ST SESSION 
H. R. 324
To restore 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 Com-
pact. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 8, 2003
Mr. VITTER introduced the following bill; which was referred to the Committee 
on the Judiciary 
A BILL 
To restore the consent of Congress to the Northeast Inter-
state Dairy Compact and to grant the consent of Con-
gress to the Southern Dairy Compact, a Pacific North-
west Dairy Compact, and an Intermountain Dairy Com-
pact.
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’’.
SEC. 2. NORTHEAST INTERSTATE DAIRY COMPACT. 
Section 147 of the Federal Agriculture Improvement 
and Reform Act of 1996 (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.
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.