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103D CONGRESS
1ST SESSION
H. R. 365
To amend the Small Business Act to assist and protect small businesses
and to protect small businesses against unreasonable use of economic
power by major meatpacking companies, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. SMITH of Iowa introduced the following bill; which was referred jointly
to the Committees on Agriculture and Small Business
A BILL
To amend the Small Business Act to assist and protect
small businesses and to protect small businesses against
unreasonable 
use 
of 
economic 
power 
by 
major
meatpacking companies, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
That this Act may be cited as the ‘‘Small Business Preser-
vation and Protection Act of 1993’’.
CONGRESSIONAL FINDING AND DECLARATION OF POLICY
SEC. 2. (a) The Congress finds that the existence,
in businesses engaged in commerce or in the production,
processing, manufacturing, and distribution of livestock
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and meat food products for commerce, of marketing condi-
tions detrimental to the maintenance of a free and com-
petitive environment needed for the health, efficiency, and
the general well-being of business (1) unduly burdens
small businesses; (2) burdens commerce and the free flow
of livestock and meat food products in commerce; (3) im-
pairs the participation of small business enterprises in
Federal procurement and Government contracts; (4) inter-
feres with the orderly and fair marketing of goods in com-
merce by small businesses; (5) leads to a burdening and
obstruction of commerce and the free flow of goods in
commerce; and (6) that it is in the national interest to
further define the level of activity and course of conduct
which is appropriate for the protection of small businesses.
(b) It is declared to be the policy of this Act, through
the exercise by Congress of its power to assist and protect
small businesses, to correct, to prevent, and as rapidly as
possible to eliminate the conditions referred to above.
DEFINITIONS
SEC. 3. As used in this Act—
(a) ‘‘Administrator’’ means the Administrator
of the Small Business Administration of the United
States, or any officer or employee of the Small Busi-
ness Administration to whom authority has been or
may be delegated to act in his stead;
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(b) ‘‘State’’ means each of the several States of
the United States, the District of Columbia, the
Commonwealth of Puerto Rico, and the Virgin Is-
lands;
(c) ‘‘commerce’’ means trade, traffic, commerce,
or transportation, within the jurisdiction of the
United States (1) between a place in a State and
any place outside of such State, or (2) which affects
trade, traffic, commerce, or transportation described
in clause (1);
(d) ‘‘activity affecting commerce’’ means any
activity in commerce, or burdening or obstructing
commerce or the free flow of goods in commerce, or
having led or tending to lead to a burdening or ob-
struction of commerce or the free flow of commerce,
or having led or tending to impair a free and com-
petitive environment needed for the health, effi-
ciency, and general well-being of business;
(e) ‘‘person’’ means any individual or any part-
nership, corporation, joint stock company, any orga-
nized group whether or not incorporated, or any
other business association existing under or author-
ized by the laws of either the United States, the laws
of any State, or the laws of any foreign country;
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(f) ‘‘packer’’ means any person engaged in the
business (1) of buying livestock in commerce for the
purposes of slaughter, or (2) of manufacturing or
preparing meats or meat food products for sale, or
shipment in commerce, or (3) of marketing meats,
meat food products, or livestock products in an un-
manufactured form acting as a wholesale broker,
dealer, or distributor in commerce, or (4) of buying,
slaughtering, manufacturing, preparing, or process-
ing meats, meat food products, or livestock which in-
volves any activity affecting commerce. For the pur-
poses of this Act, all references to ‘‘packer’’ also in-
clude any person who directly or indirectly owns or
controls a packer or any subsidiary, plant, facility,
division, affiliate, joint venture, or any other entity
under the direct or indirect control of a packer;
(g) ‘‘small business meatpacking concern’’
means any packer which has less than a 5 per cen-
tum share of the national slaughter for each of the
three classifications;
(h) ‘‘slaughter’’ means the act of killing an ani-
mal for human consumption;
(i) ‘‘process’’ means any reduction of the car-
cass, after slaughter, into smaller cuts (such as
primals or fabricated cuts) or cutting the carcass or
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primals to subprimals or smaller. For purposes of
this Act, ‘‘process’’ shall be synonymous with ‘‘fab-
ricate’’ or ‘‘break’’;
(j) ‘‘carcass’’ means the dressed body of a
slaughtered animal, excluding viscera, and includes
each of the four quarters of the animal;
(k) ‘‘meat food products’’ means all products
and byproducts of the cattle and hog slaughtering
and meatpacking industry, if edible;
(l) ‘‘livestock’’ means cattle or hogs, whether
live or dead;
(m) ‘‘classification’’ refers to each of the follow-
ing: (1) steers and heifers, (2) cows and bulls, or (3)
hogs. For the purposes of this Act, there are three
separate classifications;
(n) ‘‘livestock futures contract’’ means stand-
ardized contracts covering the purchase or sale of
cattle, hogs or meat food products for future delivery
on or subject to the rules of a contract market des-
ignated pursuant to section 5 of the Commodity Ex-
change Act as amended (7 U.S.C. 7);
(o) ‘‘retail’’ means to sell directly to the
consumer; and
(p) ‘‘future livestock transaction’’ means any
livestock futures contract and any contract dealing
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with cattle, hogs or meat food products, whether
traded on a contract market or not, commonly
known to the trade as a margin account, margin
contract, leverage account, leverage contract, op-
tion, privilege, indemnity, bid, offer, put, call, ad-
vance guaranty, or decline guaranty.
PROHIBITED ACTIVITIES
SEC. 4. (a) Each of the following activities is deemed
to be unfair and detrimental to small business
meatpacking concerns and each such activity is prohibited
as follows:
(1) No packer which is not a small business
meatpacking concern shall own, lease, or operate in
any manner any retail meat outlet in the United
States.
(2) No packer’s total slaughter for any classi-
fication during any calendar year shall exceed 25 per
centum of the larger of the last two annual national
slaughter totals for that classification as most re-
cently published by the Crop Reporting Board, Eco-
nomics, Statistics, and Cooperatives Service, United
States Department of Agriculture. For the purposes
of this paragraph, a packer’s purchase, acquisition,
or control in any manner of carcasses or any other
meat food products from any other person or packer
shall be added to that packer’s annual slaughter
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total for the appropriate classification and this com-
bined total shall not exceed 25 per centum of the
larger of the last two annual national slaughter to-
tals published for that classification.
(3) No packer shall engage in any unreasonable
use of economic power or discriminate in price be-
tween different purchasers of meat food products in
any marketing area of the United States for the
purpose of impairing in any manner the marketing
ability of one or more small business meatpacking
concerns in such marketing area.
(4) No packer shall sell below cost or contract
to sell below cost any meat food products for the
purpose of impairing in any manner the marketing
ability of one or more small business meatpacking
concerns or for the purpose of eliminating one or
more small business meatpacking concerns. Nothing
contained herein shall prevent a packer from selling
below cost from time to time where such action is
in response to changing supply and demand condi-
tions affecting the market for or the marketability of
the meat food products concerned, such as but not
limited to actual or imminent deterioration of perish-
able goods, distress sales under court process, or
sales in good faith in discontinuance of business.
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(5) Any officer of a packer which is required to
file an annual report by the regulations issued under
the Packers and Stockyards Act (7 U.S.C. 181) by
the United States Department of Agriculture is pro-
hibited from owning or entering into any future live-
stock transaction.
(6) No packer, which is required to file an an-
nual report by the regulations issued under the
Packers and Stockyards Act (7 U.S.C. 181) by the
United States Department of Agriculture, may en-
gage in any livestock futures contract activity or fu-
ture livestock transaction other than a bona fide
hedge transaction as defined by the regulations of
the Commodity Futures Trading Commission en-
acted pursuant to the Commodity Exchange Act, as
amended (7 U.S.C. 7).
(b) Authority to enforce compliance with this section
is vested in the Administrator. The Administrator is em-
powered to secure compliance with this section by filing
a complaint with the appropriate department or agency
of the United States. Such department or agency shall im-
mediately and forthwith investigate the complaint filed by
the Administrator and if such department or agency
deems that the complaint has merit, shall initiate the ap-
propriate action to enforce compliance with this section,
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utilizing all applicable statutes and regulations of such de-
partment or agency.
(c) Any person or packer who knowingly violates any
provision of this section shall, upon conviction, be pun-
ished by a fine of not more than $500,000 for each such
offense committed. Additionally, after such person or
packer has received notice from either the Administrator
or the department or agency to whom the Administrator
has referred the complaint that a violation of this section
has occurred or is occurring, each day during which a vio-
lation of this section occurs shall be deemed a separate
offense.
(d) Any small business meatpacking concern which
is injured in his business or property in an amount exceed-
ing $10,000 by reason of any activity forbidden by this
section may sue therefor in any district court in the Unit-
ed States in the district in which the defendant resides
or is found or has an agent and shall recover threefold
the 
damages 
sustained 
by 
such 
small 
business
meatpacking concern, together with the cost of the suit,
including a reasonable attorney’s fee.
MISCELLANEOUS PROVISIONS AND EFFECTIVE DATE
SEC. 5. (a) If any provision of this Act or the applica-
tion thereof to any person or circumstances is held invalid,
the validity of the remainder of the Act and of the applica-
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tion of such provision to other persons and circumstances
shall not be affected thereby.
(b) Nothing contained in this Act shall be construed
to prevent or interfere with the enforcement of the Anti-
trust Acts or the Acts to regulate commerce, nor shall any-
thing contained in this Act be construed to release any
person from any obligation, limitation, or requirement of
any Act prohibiting restraint of trade or unfair competi-
tion.
(c) This Act shall become effective on the first day
of January after the date of enactment.
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