To provide for the modification and implementation of the final rule for the consideration and reform of Federal milk marketing orders, and for other purposes.

SECTION 1. USE OF OPTION 1A AS PRICE STRUCTURE FOR CLASS I MILK UNDER 
              CONSOLIDATED FEDERAL MILK MARKETING ORDERS.

    (a) Final Rule Defined.--In this section, the term ``final rule'' 
means the final rule for the consolidation and reform of Federal milk 
marketing orders that was published in the Federal Register on 
September 1, 1999 (64 Fed. Reg. 47897-48021), to comply with section 
143 of the Federal Agriculture Improvement and Reform Act of 1996 (7 
U.S.C. 7253).
    (b) Implementation of Final Rule for Milk Order Reform.--Subject to 
subsection (c), the final rule shall take effect, and be implemented by 
the Secretary of Agriculture, on the first day of the first month 
beginning at least 30 days after the date of the enactment of this Act.
    (c) Use of Option 1A for Pricing Class I Milk.--In lieu of the 
Class I price differentials specified in the final rule, the Secretary 
of Agriculture shall price fluid or Class I milk under the Federal milk 
marketing orders using the Class I price differentials identified as 
Option 1A ``Location-Specific Differentials Analysis'' in the proposed 
rule published in the Federal Register on January 30, 1998 (63 Fed. 
Reg. 4802, 4809), except that the Secretary shall include the 
corrections and modifications to such Class I differentials made by the 
Secretary through April 2, 1999.
    (d) Effect of Prior Announcement of Minimum Prices.--If the 
Secretary of Agriculture announces minimum prices for milk under 
Federal milk marketing orders pursuant to section 1000.50 of title 7, 
Code of Federal Regulations, before the effective date specified in 
subsection (b), the minimum prices so announced before that date shall 
be the only applicable minimum prices under Federal milk marketing 
orders for the month or months for which the prices have been 
announced.
    (e) Implementation of Requirement.--The implementation of the final 
rule, as modified by subsection (c), shall not be subject to any of the 
following:
            (1) The notice and hearing requirements of section 8c(3) of 
        the Agricultural Adjustment Act (7 U.S.C. 608c(3)), reenacted 
        with amendments by the Agricultural Marketing Agreement Act of 
        1937, or the notice and comment provisions of section 553 of 
        title 5, United States Code.
            (2) A referendum conducted by the Secretary of Agriculture 
        pursuant to subsections (17) or (19) of section 8c of the 
        Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
        amendments by the Agricultural Marketing Agreement Act of 1937.
            (3) The Statement of Policy of the Secretary of Agriculture 
        effective July 24, 1971 (36 Fed. Reg. 13804), relating to 
        notices of proposed rulemaking and public participation in 
        rulemaking.
            (4) Chapter 35 of title 44, United States Code (commonly 
        known as the Paperwork Reduction Act).
            (5) Any decision, restraining order, or injunction issued 
        by a United States court before the date of the enactment of 
        this Act.

SEC. 2. FURTHER RULEMAKING TO DEVELOP PRICING METHODS FOR CLASS III AND 
              CLASS IV MILK UNDER MARKETING ORDERS.

    (a) Congressional Finding.--The Class III and Class IV milk pricing 
formulas included in the final decision for the consolidation and 
reform of Federal milk marketing orders, as published in the Federal 
Register on April 2, 1999 (64 Fed. Reg. 16025), do not adequately 
reflect public comment on the original proposed rule published in the 
Federal Register on January 30, 1998 (63 Fed. Reg. 4802), and are 
sufficiently different from the proposed rule and any comments 
submitted with regard to the proposed rule that further emergency 
rulemaking is merited.
    (b) Rulemaking Required.--The Secretary of Agriculture shall 
conduct rulemaking, on the record after an opportunity for an agency 
hearing, to reconsider the Class III and Class IV milk pricing formulas 
included in the final rule for the consolidation and reform of Federal 
milk marketing orders that was published in the Federal Register on 
September 1, 1999 (64 Fed. Reg. 47897-48021).
    (c) Time Period for Rulemaking.--On December 1, 2000, the Secretary 
of Agriculture shall publish in the Federal Register a final decision 
on the Class III and Class IV milk pricing formulas. The resulting 
formulas shall take effect, and be implemented by the Secretary, on 
January 1, 2001.
    (d) Effect of Court Order.--The actions authorized by subsections 
(b) and (c) are intended to ensure the timely publication and 
implementation of new pricing formulas for Class III and Class IV milk. 
In the event that the Secretary of Agriculture is enjoined or otherwise 
restrained by a court order from implementing a final decision within 
the time period specified in subsection (c), the length of time for 
which that injunction or other restraining order is effective shall be 
added to the time limitations specified in subsection (c) thereby 
extending those time limitations by a period of time equal to the 
period of time for which the injunction or other restraining order is 
effective.
    (e) Failure To Timely Complete Rulemaking.--If the Secretary of 
Agriculture fails to implement new Class III and Class IV milk pricing 
formulas within the time period required under subsection (c) (plus any 
additional period provided under subsection (d)), the Secretary may not 
assess or collect assessments from milk producers or handlers under 
section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), 
reenacted with amendments by the Agricultural Marketing Agreement Act 
of 1937, for marketing order administration and services provided under 
such section after the end of that period until the pricing formulas 
are implemented. The Secretary may not reduce the level of services 
provided under that section on account of the prohibition against 
assessments, but shall rather cover the cost of marketing order 
administration and services through funds available for the 
Agricultural Marketing Service of the Department.
    (f) Implementation of Requirement.--The implementation of the final 
decision on new Class III and Class IV milk pricing formulas shall not 
be subject to congressional review under chapter 8 of title 5, United 
States Code.

SEC. 3. DAIRY FORWARD PRICING PROGRAM.

    The Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted 
with amendments by the Agricultural Marketing Agreement Act of 1937, is 
amended by adding at the end the following new section:

``SEC. 23. DAIRY FORWARD PRICING PILOT PROGRAM.

    ``(a) Pilot Program Required.--Not later than 90 days after the 
date of the enactment of this section, the Secretary of Agriculture 
shall establish a temporary pilot program under which milk producers 
and cooperatives are authorized to voluntarily enter into forward price 
contracts with milk handlers.
    ``(b) Minimum Milk Price Requirements.--Payments made by milk 
handlers to milk producers and cooperatives, and prices received by 
milk producers and cooperatives, under the forward contracts shall be 
deemed to satisfy--
            ``(1) all regulated minimum milk price requirements of 
        paragraphs (B) and (F) of subsection (5) of section 8c; and
            ``(2) the requirement of paragraph (C) of such subsection 
        regarding total payments by each handler.
    ``(c) Milk Covered by Pilot Program.--
            ``(1) Covered milk.--The pilot program shall apply only 
        with respect to the marketing of federally regulated milk 
        that--
                    ``(A) is not classified as Class I milk or 
                otherwise intended for fluid use; and
                    ``(B) is in the current of interstate or foreign 
                commerce or directly burdens, obstructs, or affects 
                interstate or foreign commerce in federally regulated 
                milk.
            ``(2) Relation to class i milk.--To assist milk handlers in 
        complying with the limitation in paragraph (1)(A) without 
        having to segregate or otherwise individually track the source 
        and disposition of milk, a milk handler may allocate milk 
        receipts from producers, cooperatives, and other sources that 
        are not subject to a forward contract to satisfy the handler's 
        obligations with regard to Class I milk usage.
    ``(d) Duration.--The authority of the Secretary of Agriculture to 
carry out the pilot program shall terminate on December 31, 2004. No 
forward price contract entered into under the program may extend beyond 
that date.
    ``(e) Study and Report on Effect of Pilot Program.--
            ``(1) Study.--The Secretary of Agriculture shall conduct a 
        study on forward contracting between milk producers and 
        cooperatives and milk handlers to determine the impact on milk 
        prices paid to producers in the United States. To obtain 
        information for the study, the Secretary may use the 
        authorities available to the Secretary under section 8d, 
        subject to the confidentiality requirements of subsection (2) 
        of such section.
            ``(2) Report.--Not later than April 30, 2002, the Secretary 
        shall submit to the Committee on Agriculture, Nutrition and 
        Forestry of the Senate and the Committee on Agriculture of the 
        House of Representatives a report containing the results of the 
        study.''.

SEC. 4. CONTINUATION OF CONGRESSIONAL CONSENT FOR NORTHEAST INTERSTATE 
              DAIRY COMPACT.

    Section 147(3) of the Agricultural Market Transition Act (7 U.S.C. 
7256(3)) is amended by striking ``concurrent with'' and all that 
follows through the period at the end and inserting ``on September 30, 
2001.''.

Summary: States that if the Secretary announces minimum milk prices under a marketing order prior to implementation of the rule under this Act, such prices shall be the applicable minimum prices for the months so covered.
States that the Option 1A requirement shall not be subject to specified requirements regarding: (1) notice and hearing; (2) referendum; (3) rulemaking notice and public participation; (4) paperwork reduction; and (5) judicial decision or order.
(Sec. 2) Expresses the congressional finding that certain Class III and IV milk pricing formulas require further emergency rulemaking because they do not adequately reflect public comment and are sufficiently different from the proposed rule. States that the Secretary shall: (1) conduct formal rulemaking, and implement such final formulas on January 1, 2001 (with an extension if necessitated by judicial restraining order); and (2) collect no marketing order assessments (without reducing service levels) during any period of noncompliance with such time frame.
(Sec. 3) Amends the Agricultural Adjustment Act, reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, to direct the Secretary to implement a dairy forward pricing pilot program through December 31, 2004. Applies such program to federally regulated milk that: (1) is not Class I milk or otherwise intended for fluid use; and (2) is in or directly affects interstate or foreign milk commerce.
Directs the Secretary to study the impact of forward contracting on milk prices paid to U.S. producers.
(Sec. 4) Amends the Agricultural Market Transition Act to extend congressional consent for the Northeast Interstate Dairy Compact through September 30, 2001.