I
106TH CONGRESS
1ST SESSION
H. R. 1604
To reauthorize, and modify the conditions for, the consent of Congress to
the Northeast Interstate Dairy Compact and to grant the consent of
Congress to the Southern Dairy Compact.
IN THE HOUSE OF REPRESENTATIVES
APRIL 28, 1999
Mr. HUTCHINSON
(for himself, Mr. ETHERIDGE, Mr. MCHUGH, Mr.
BALDACCI, Mr. SWEENEY, Mr. BLUNT, Mr. BOEHLERT, Mr. BURR of
North Carolina, Mr. BACHUS, Mr. CALLAHAN, Mr. EVERETT, Mr.
CRAMER, Mr. RILEY, Mr. BERRY, Mr. DICKEY, Mr. SNYDER, Ms.
DELAURO, Mr. GEJDENSON, Mrs. JOHNSON
of Connecticut, Mr.
LARSON, Mr. MALONEY of Connecticut, Mr. CASTLE, Ms. BROWN of
Florida, Mr. BOYD, Mr. CANADY of Florida, Mr. FOLEY, Mrs. MEEK of
Florida, Mrs. THURMAN, Mr. BARR of Georgia, Mr. BISHOP, Mr.
CHAMBLISS, Mr. COLLINS, Mr. DEAL of Georgia, Mr. ISAKSON, Mr.
KINGSTON, Mr. LEWIS of Georgia, Ms. MCKINNEY, Mr. NORWOOD, Mr.
FLETCHER, Mr. LEWIS of Kentucky, Mr. LUCAS of Kentucky, Mr.
WHITFIELD, Mr. BAKER, Mr. COOKSEY, Mr. JEFFERSON, Mr. JOHN, Mr.
MCCRERY, Mr. TAUZIN, Mr. CAPUANO, Mr. MCGOVERN, Mr. NEAL of
Massachusetts, Mr. OLVER, Mr. BARTLETT of Maryland, Mr. EHRLICH,
Mr. GILCHREST, Mr. HOYER, Mrs. MORELLA, Mr. WYNN, Mr. ALLEN,
Ms. DANNER, Mrs. EMERSON, Mr. HULSHOF, Ms. MCCARTHY of Mis-
souri, Mr. SKELTON, Mr. TALENT, Mr. PICKERING, Mr. SHOWS, Mr.
TAYLOR of Mississippi, Mr. THOMPSON of Mississippi, Mr. WICKER, Mr.
BALLENGER, Mrs. CLAYTON, Mr. COBLE, Mr. HAYES, Mr. JONES of
North Carolina, Mr. MCINTYRE, Mrs. MYRICK, Mr. PRICE of North Caro-
lina, Mr. TAYLOR of North Carolina, Mr. WATT of North Carolina, Mr.
BASS, Mr. ANDREWS, Mr. FRANKS of New Jersey, Mr. HOLT, Mr.
LOBIONDO, Mrs. ROUKEMA, Mr. SAXTON, Mr. ACKERMAN, Mr. CROW-
LEY, Mr. ENGEL, Mr. FORBES, Mr. FOSSELLA, Mr. GILMAN, Mr. HIN-
CHEY, Mr. HOUGHTON, Mrs. KELLY, Mr. KING, Mr. LAFALCE, Mr.
LAZIO, Mrs. LOWEY, Mr. MCNULTY, Mr. MEEKS of New York, Mr.
OWENS, Mr. QUINN, Mr. RANGEL, Mr. REYNOLDS, Ms. SLAUGHTER, Mr.
TOWNS, Mr. WALSH, Mr. LATOURETTE, Mr. COBURN, Mr. DOYLE, Mr.
ENGLISH, Mr. GOODLING, Mr. GREENWOOD, Mr. HOEFFEL, Mr.
HOLDEN, Mr. KANJORSKI, Mr. KLINK, Mr. MASCARA, Mr. PETERSON of
Pennsylvania, Mr. PITTS, Mr. SHERWOOD, Mr. SHUSTER, Mr. KENNEDY
of Rhode Island, Mr. WEYGAND, Mr. CLYBURN, Mr. SPRATT, Mr.
SPENCE, Mr. BRYANT, Mr. GORDON, Mr. HILLEARY, Mr. JENKINS, Mr.
TANNER, Mr. BENTSEN, Mr. GREEN of Texas, Mr. HALL of Texas, Ms.
JACKSON-LEE of Texas, Mr. LAMPSON, Mr. RODRIGUEZ, Mr. SANDLIN,
Mr. STENHOLM, Mr. TURNER, Mr. BATEMAN, Mr. BOUCHER, Mr.
GOODE, Mr. PICKETT, Mr. SISISKY, Mr. WOLF, Mr. BLILEY, Mr. SCOTT,
Mr. SANDERS, Mr. MOLLOHAN, Mr. RAHALL, and Mr. WISE) introduced
the following bill; which was referred to the Committee on the Judiciary
A BILL
To reauthorize, and modify the conditions for, the consent
of Congress to the Northeast Interstate Dairy Compact
and to grant the consent of Congress to the Southern
Dairy Compact.
Resolved by the Senate and House of Representatives
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’’.
TITLE I—NORTHEAST
INTERSTATE DAIRY COMPACT
SEC. 101. 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 ‘‘Massachusetts, New Hampshire,’’ and in-
serting ‘‘Maryland, Massachusetts, New Hampshire,
New Jersey, New York,’’;
(2) by striking paragraphs (1), (3), and (7);
(3) in paragraph (4), by striking ‘‘Delaware,
New Jersey, New York, Pennsylvania, Maryland,
and Virginia’’ and inserting ‘‘Delaware, Ohio, and
Pennsylvania’’;
(4) 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
(5) by redesignating paragraphs (2), (4), (5),
and (6) as paragraphs (1), (2), (3), and (4), respec-
tively.
TITLE II—SOUTHERN DAIRY
COMPACT
SEC. 201. CONGRESSIONAL CONSENT TO SOUTHERN DAIRY
COMPACT.
(a) IN GENERAL.—Congress consents to the South-
ern Dairy Compact entered into among the States of Ala-
bama, Arkansas, Kentucky, Louisiana, Mississippi, North
Carolina, 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 III–A 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 title as ‘‘Federal milk marketing order’’) unless
Congress has first consented to and approved such
authority by a law enacted after the date of enact-
ment of this joint resolution.
(2) ADDITIONAL
STATES.—Florida, Georgia,
Kansas, Missouri, Oklahoma, 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 DECLARA-
TION 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.
‘‘(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,
SIMPLICITY, 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.