[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 365 Introduced in House (IH)]

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 Representatives of the 
United States of America in Congress assembled, That this Act may be 
cited as the ``Small Business Preservation 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 and meat food products for commerce, of 
marketing conditions detrimental to the maintenance of a free and 
competitive 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) impairs the participation of small business 
enterprises in Federal procurement and Government contracts; (4) 
interferes with the orderly and fair marketing of goods in commerce 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 Business Administration to whom authority 
        has been or may be delegated to act in his stead;
            (b) ``State'' means each of the several States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, and the Virgin Islands;
            (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 obstruction of commerce or the free flow of 
        commerce, or having led or tending to impair a free and 
        competitive environment needed for the health, efficiency, and 
        general well-being of business;
            (e) ``person'' means any individual or any partnership, 
        corporation, joint stock company, any organized group whether 
        or not incorporated, or any other business association existing 
        under or authorized by the laws of either the United States, 
        the laws of any State, or the laws of any foreign country;
            (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 
        unmanufactured form acting as a wholesale broker, dealer, or 
        distributor in commerce, or (4) of buying, slaughtering, 
        manufacturing, preparing, or processing meats, meat food 
        products, or livestock which involves any activity affecting 
        commerce. For the purposes of this Act, all references to 
        ``packer'' also include 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 centum share of the national 
        slaughter for each of the three classifications;
            (h) ``slaughter'' means the act of killing an animal for 
        human consumption;
            (i) ``process'' means any reduction of the carcass, after 
        slaughter, into smaller cuts (such as primals or fabricated 
        cuts) or cutting the carcass or primals to subprimals or 
        smaller. For purposes of this Act, ``process'' shall be 
        synonymous with ``fabricate'' 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 following: (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 standardized 
        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 designated pursuant to section 5 of the 
        Commodity Exchange 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 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, option, 
        privilege, indemnity, bid, offer, put, call, advance 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 classification 
        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 recently published by the Crop 
        Reporting Board, Economics, 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 total for the appropriate 
        classification and this combined total shall not exceed 25 per 
        centum of the larger of the last two annual national slaughter 
        totals published for that classification.
            (3) No packer shall engage in any unreasonable use of 
        economic power or discriminate in price between 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 conditions affecting the market for or the 
        marketability of the meat food products concerned, such as but 
        not limited to actual or imminent deterioration of perishable 
        goods, distress sales under court process, or sales in good 
        faith in discontinuance of business.
            (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 prohibited from owning or entering into any 
        future livestock transaction.
            (6) No 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, 
        may engage in any livestock futures contract activity or future 
        livestock transaction other than a bona fide hedge transaction 
        as defined by the regulations of the Commodity Futures Trading 
        Commission enacted 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 empowered 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 
immediately and forthwith investigate the complaint filed by the 
Administrator and if such department or agency deems that the complaint 
has merit, shall initiate the appropriate action to enforce compliance 
with this section, utilizing all applicable statutes and regulations of 
such department or agency.
    (c) Any person or packer who knowingly violates any provision of 
this section shall, upon conviction, be punished 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 violation 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 exceeding $10,000 by reason of any 
activity forbidden by this section may sue therefor in any district 
court in the United 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 application thereof 
to any person or circumstances is held invalid, the validity of the 
remainder of the Act and of the application 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 Antitrust Acts or the Acts to 
regulate commerce, nor shall anything 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 
competition.
    (c) This Act shall become effective on the first day of January 
after the date of enactment.

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