[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2069 Reported in Senate (RS)]

                                                       Calendar No. 567

103d CONGRESS

  2d Session

                                S. 2069

                          [Report No. 103-333]

_______________________________________________________________________

                                 A BILL

To grant consent of Congress to the Northeast Interstate Dairy Compact.

_______________________________________________________________________

              August 12 (legislative day, August 11), 1994

                       Reported with an amendment





                                                       Calendar No. 567
103d CONGRESS
  2d Session
                                S. 2069

                          [Report No. 103-333]

To grant consent of Congress to the Northeast Interstate Dairy Compact.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                  May 4 (legislative day, May 2), 1994

   Mr. Leahy (for himself, Mr. Mitchell, Mr. Kennedy, Mr. Cohen, Mr. 
  Jeffords, Mr. Dodd, Mr. Smith, Mr. Pell, Mr. Gregg, Mr. Chafee, Mr. 
Kerry, and Mr. Lieberman) introduced the following bill; which was read 
          twice and referred to the Committee on the Judiciary

              August 12 (legislative day, August 11), 1994

                Reported by Mr. Biden, with an amendment
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
To grant consent of Congress to the Northeast Interstate Dairy Compact.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CONGRESSIONAL CONSENT.

    -T-h-e -C-o-n-g-r-e-s-s -h-e-r-e-b-y -c-o-n-s-e-n-t-s -t-o -t-h-e 
-N-o-r-t-h-e-a-s-t -I-n-t-e-r-s-t-a-t-e -D-a-i-r-y -C-o-m-p-a-c-t 
-e-n-t-e-r-e-d -i-n-t-o -a-m-o-n-g -t-h-e -S-t-a-t-e-s -o-f 
-V-e-r-m-o-n-t-, -N-e-w -H-a-m-p-s-h-i-r-e-, -M-a-i-n-e-, 
-C-o-n-n-e-c-t-i-c-u-t-, -R-h-o-d-e -I-s-l-a-n-d-, -a-n-d 
-M-a-s-s-a-c-h-u-s-e-t-t-s-, -w-h-i-c-h -c-o-m-p-a-c-t -i-s 
-s-u-b-s-t-a-n-t-i-a-l-l-y -a-s -f-o-l-l-o-w-s-:
    (a) Consent of Congress.--Congress hereby consents to the Northeast 
Interstate Diary Compact entered into among the States of Vermont, New 
Hampshire, Maine, Connecticut, Rhode Island, and Massachusetts, subject 
to the following conditions:
            (1) Limit to class i milk.--The Northeast Interstate Dairy 
        Compact shall regulate only Class I milk. The last sentence of 
        compact section 2(9) and compact section 10(5), except for 
        subsections 10(5)(A) and 10(5)(B), is enforceable only upon 
        subsequent approval by both Houses of Congress.
            (2) Additional states.--Delaware, New Jersey, New York, 
        Pennsylvania, Maryland, and Virginia are the only additional 
        States that may joint the compact, individually or otherwise, 
        provided upon entry they are contiguous to participating States 
        and only upon subsequent approval by both Houses of Congress.
            (3) Out-of-region producers.--When a compact over-order 
        price is in effect, the Commission shall pay producers who pool 
        their Class I milk with partially regulated plants an over-
        order price equal to the over-order price received by producers 
        who pool their Class I milk with a pool plant.
            (4) Removing incentives for overproduction.--The compact 
        commission shall develop and implement a plan to ensure that 
        the over-order price does not create an incentive for producers 
        to generate additional supplies of milk.
    (b) Compact.--The compact is substantially as follows:

 ``ARTICLE I. STATEMENT OF PURPOSE, FINDINGS AND DECLARATION OF POLICY

``Sec. 1. STATEMENT OF PURPOSE, FINDINGS AND DECLARATION OF POLICY

    ``The purpose of this compact is to recognize by constitutional 
prerequisite the interstate character of the northeast dairy industry 
and to form an interstate commission for the northeast region. The 
mission of the commission is to take such steps as are necessary to 
assure the continued viability of dairy farming in the northeast, 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 the paramount agricultural activity of the northeast. 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 
importance to the health and welfare of the region.
    ``The participating states further find that dairy farms are 
essential to the region's rural communities and character. The farms 
preserve open spaces, sculpt the landscape and provide the land base 
for a diversity of recreational pursuits. In defining the rural 
character of our communities and landscape, dairy farms also provide a 
major draw for our tourist industries.
    ``By entering into this compact, the participating states affirm 
that their ability to regulate the price which northeast dairy farmers 
receive for their product is essential to the public interest. 
Assurance of a fair and equitable price for dairy farmers ensures their 
ability to provide milk to the market and the vitality of the northeast 
dairy industry, with all the associated benefits.
    ``Recent, dramatic price fluctuations, with a pronounced downward 
trend, threaten the viability and stability of the northeast dairy 
region. Historically, individual state regulatory action has been an 
effective emergency remedy available to farmers confronting a 
distressed market. The federal order system, implemented by the 
Agricultural Marketing Agreement Act of 1937, establishes only minimum 
prices for dairy products, without preempting the power of states to 
regulate milk prices above the minimum levels so established. Based on 
this authority, each state in the region has individually attempted to 
implement at least one regulatory program in response to the current 
dairy industry crisis.
    ``In today's regional dairy marketplace, cooperative, rather than 
individual state action may address more effectively the market 
disarray. Under our constitutional system, properly authorized, states 
acting cooperatively may exercise more power to regulate interstate 
commerce than they may assert individually without such authority. For 
this reason, the participating states invoke their authority to act in 
common agreement, with the consent of Congress, under the compact 
clause of the Constitution.
    ``In establishing their constitutional regulatory authority over 
the region's fluid milk market by this compact, the participating 
states declare their purpose that this compact neither displace the 
federal order system nor encourage the merging of federal orders. 
Specific provisions 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 contains a contingency 
provision should the federal order system be discontinued. In that 
event, the interstate commission is authorized to regulate the 
marketplace in replacement 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 result in discontinuance of 
the order system.

          ``ARTICLE II. DEFINITIONS AND RULES OF CONSTRUCTION

``Sec. 2. DEFINITIONS

    ``For the purposes of this compact, and of any supplemental or 
concurring legislation enacted pursuant thereto, except as may be 
otherwise required by the context:
            ``(1) `Commission' means the commission established by this 
        compact.
            ``(2) `Compact' means this interstate compact.
            ``(3) `Region' means the territorial limits of the states 
        which are or become parties to this compact.
            ``(4) `Participating state' means a state which has become 
        a party to this compact by the enactment of concurring 
        legislation.
            ``(5) `Regulated area' means any area within the region 
        governed by and defined in regulations establishing a compact 
        over-order price or commission marketing order.
            ``(6) `Pool plant' means any milk plant located in a 
        regulated area.
            ``(7) `Partially regulated plant' means a milk plant not 
        located in a regulated area but having Class I distribution 
        within such area, or receipts from producers located in such 
        area. Commission regulations may exempt plants having such 
        distribution or receipts in amounts less than the limits 
        defined therein.
            ``(8) `Compact over-order price' means a minimum price 
        required to be paid to producers for Class I milk established 
        by the commission in regulations 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 
        regulation in the regulated area. Such price may apply 
        throughout the region or in any part or parts thereof as 
        defined in the regulations of the commission.
            ``(9) `Commission marketing order' means regulations 
        adopted by the commission pursuant to sections nine and ten of 
        this compact in place of a terminated federal marketing order 
        or state dairy regulation. Such order may apply throughout the 
        region or in any part or parts thereof as defined in the 
        regulations of the commission. Such order may establish minimum 
        prices for any or all classes of milk.
            ``(10) `Milk' means the lacteal secretion of cows and 
        includes all skim, butterfat, or other constituents obtained 
        from separation or any other process. The term is used in its 
        broadest sense and may be further defined by the commission for 
        regulatory purposes.
            ``(11) `Class I milk' means milk disposed of in fluid form 
        or as a fluid milk product, subject to further definition in 
        accordance with the principles expressed in subdivision (b) of 
        section three.
            ``(12) `State dairy regulation' means any state regulation 
        of dairy prices, and associated assessments, whether by 
        statute, marketing order or otherwise.

``Sec. 3. RULES OF CONSTRUCTION

    ``(a) This compact shall not be construed to displace existing 
federal milk marketing orders or state dairy regulation 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) This 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 purposes through the application, adaptation and 
development 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 
understood general meanings are not defined herein but the commission 
may further define the terms used in this compact and develop 
additional concepts and define additional terms as it may find 
appropriate to achieve its purposes.

                 ``ARTICLE III. COMMISSION ESTABLISHED

``Sec. 4. COMMISSION ESTABLISHED

    ``There is hereby created a commission to administer the compact, 
composed of delegations from each state in the region. A delegation 
shall include not less than three nor more than five persons. Each 
delegation shall include at least one dairy farmer who is engaged in 
the production of milk at the time of appointment or reappointment, and 
one consumer representative. Delegation members shall be residents and 
voters of, and subject 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 accordance with the laws of the state 
represented. The compensation, if any, of the members of a state 
delegation shall be determined and paid by each state, but their 
expenses shall be paid by the commission. Each state delegation shall 
be entitled to one vote in the conduct of the commission's affairs.

``Sec. 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, amendment or rescission of the commission's bylaws, 
shall be by majority vote of the delegations present. Establishment or 
termination of an over-order price or commission marketing order shall 
require 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 affirmative vote of that 
state's delegation. A majority of the delegations from the 
participating states shall constitute a quorum for the conduct of the 
commission's business.

``Sec. 6. ADMINISTRATION AND MANAGEMENT

    ``(a) The commission shall elect annually from among the members of 
the participating state delegations a chairperson, a vice-chairperson, 
and a treasurer. The commission 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 member elected by each delegation.
    ``(b) The commission shall adopt by-laws for the conduct 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 convenient 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 transacted 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 pleasure;
            ``(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 to issue notes, to provide 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 employees as it 
        may deem necessary, prescribe their powers, duties, and 
        qualifications; and
            ``(6) to create and abolish such offices, employments, and 
        positions as it deems necessary for the purposes of the compact 
        and provide for the removal, term, tenure, compensation, fringe 
        benefits, pension, and retirement rights of its officers and 
        employees. The commission may also retain personal services on 
        a contract basis.

``Sec. 7. RULEMAKING POWER

    ``In addition to the power to promulgate a compact over-order price 
or commission marketing orders as provided by this compact, the 
commission is further empowered to make and enforce such additional 
rules and regulations 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

``Sec. 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) Prepare and transmit to the participating states 
        model dairy laws and regulations dealing with the inspection of 
        farms and plants, sanitary codes, labels for dairy products and 
        their imitations, standards for dairy products, license 
        standards, producer security programs, and fair trade laws.
            ``(3) Study and recommend to the participating states joint 
        or cooperative programs for the administration of the dairy 
        laws and regulations and to prepare estimates of cost savings 
        and benefits of such programs.
            ``(4) Encourage the harmonious relationships between the 
        various elements in the industry for the solution of their 
        material problems. Conduct symposiums or conferences designed 
        to improve industry relations, or a better understanding of 
        problems.
            ``(5) Prepare and release periodic reports on activities 
        and results of the commission's efforts to the participating 
        states.
            ``(6) 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.
            ``(7) Investigate costs and charges for producing, hauling, 
        handling, processing, distributing, selling and for all other 
        services performed with respect to milk.
            ``(8) Examine current economic forces affecting producers, 
        probable trends in production and consumption, 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 critical conditions on dairy farms.

``Sec. 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 marketing 
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 over-order price shall 
not exceed one dollar fifty cents per gallon. 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 calculated 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 establish the minimum 
price for milk to be paid by pool plants, partially regulated plants 
and all other handlers receiving milk from producers located in a 
regulated area. This price shall be established 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 
solely by the terms and purpose of the regulation without regard 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 applicable federal market order shall not be 
subject to a compact 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 expense, 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 action as necessary and feasible to ensure that the 
over-order price does not create an incentive for producers to generate 
additional supplies of milk.
    ``(g) The commission shall whenever possible enter into agreements 
with state or federal agencies for exchange of information or services 
for the purpose of reducing regulatory burden and cost of administering 
the compact. The commission may reimburse other agencies for the 
reasonable cost of providing these services.

``Sec. 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 formula pricing. Provision may also 
        be made for location adjustments, zone differentials and for 
        competitive credits with respect to regulated handlers who 
        market outside the regulated area.
            ``(5) Provisions for the payment to all producers and 
        associations of producers delivering milk to all handlers of 
        uniform prices for all milk so delivered, 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 establishing a 
                compact over-order price, the commission may establish 
                one equalization pool within the regulated area for the 
                sole purpose of equalizing returns to producers 
                throughout the regulated area.
                    ``(B) With respect to any commission marketing 
                order, as defined in section two, subdivision nine, 
                which replaces one or more terminated federal orders or 
                state dairy regulation, 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 compensatory payments with 
        respect to all such milk to the extent necessary to equalize 
        the cost of milk purchased by handlers subject to a compact 
        over-order price or commission marketing order. No such 
        provisions shall discriminate against milk producers outside 
        the regulated area. The provisions for compensatory payments 
        may require payment of the difference 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 a 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 marketing order or other state dairy regulation within the 
        regulated area.
            ``(9) Provisions requiring the payment by handlers of an 
        assessment to cover the costs of the administration and 
        enforcement of such order pursuant to Article VII, Section 
        18(a).
            ``(10) Provisions for reimbursement to participants 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 provide for the payment of fair 
        and equitable minimum prices to producers.

                   ``ARTICLE V. RULEMAKING PROCEDURE

``Sec. 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 rulemaking proceeding shall 
be governed by section four of the Federal Administrative Procedure 
Act, as amended (5 U.S.C. Sec. 553). In addition, the commission shall, 
to the extent practicable, publish notice of rulemaking proceedings 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 discretion act upon the petition of any 
person including individual milk producers, any organization of milk 
producers or handlers, general farm organizations, consumer or public 
interest groups, and local, state or federal officials.

``Sec. 12. FINDINGS AND REFERENDUM

    ``(a) In addition to the concise general statement of basis and 
purpose required by section 4(b) of the Federal Administrative 
Procedure Act, as amended (5 U.S.C. Sec. 553(c)), the commission shall 
make findings of fact with respect to:
            ``(1) Whether the public interest will be served by the 
        establishment of minimum milk prices to dairy farmers under 
        Article IV.
            ``(2) What level of prices will assure that producers 
        receive a price sufficient to cover their costs of production 
        and will elicit an adequate supply of milk for the inhabitants 
        of the regulated area and for manufacturing purposes.
            ``(3) Whether the major provisions of the order, other than 
        those fixing minimum milk prices, are in the public interest 
        and are reasonably designed to achieve the purposes of the 
        order.
            ``(4) Whether the terms of the proposed regional order or 
        amendment are approved by producers as provided in section 
        thirteen.

``Sec. 13. PRODUCER REFERENDUM

    ``(a) For the purpose of ascertaining whether the issuance or 
amendment of regulations establishing a compact over-order price or a 
commission marketing order, including any provision with respect to 
milk supply under subsection 9(f), is approved by producers, the 
commission shall conduct a referendum among producers. The referendum 
shall be held in a timely manner, as determined by regulation of the 
commission. The terms and conditions of the proposed order or amendment 
shall be described by the commission in the ballot used in the conduct 
of the referendum, but the nature, content, or extent of such 
description shall not be a basis for attacking the legality of the 
order or any action relating thereto.
    ``(b) An order or amendment shall be deemed approved by producers 
if the commission determines that it is approved by at least two-thirds 
of the voting producers who, during a representative period determined 
by the commission, have been engaged in the production of milk the 
price of which would be regulated under the proposed order or 
amendment.
    ``(c) For purposes of any referendum, the commission shall consider 
the approval or disapproval by any cooperative association of 
producers, qualified under the provisions of the Act of Congress of 
February 18, 1922, as amended, known as the Capper-Volstead Act, bona 
fide engaged in marketing milk, or in rendering services for or 
advancing the interests of producers of such commodity, as the approval 
or disapproval of the producers who are members or stockholders in, or 
under contract with, such cooperative association of producers, except 
as provided in subdivision (1) hereof and subject to the provisions of 
subdivisions (2) through (5) hereof.
            ``(1) No cooperative which has been formed to act as a 
        common marketing agency for both cooperatives and individual 
        producers shall be qualified to block vote for either.
            ``(2) Any cooperative which is qualified to block vote 
        shall, before submitting its approval or disapproval in any 
        referendum, give prior written notice to each of its members as 
        to whether and how it intends to cast its vote. The notice 
        shall be given in a timely manner as established, and in the 
        form prescribed, by the commission.
            ``(3) Any producer may obtain a ballot from the commission 
        in order to register approval or disapproval of the proposed 
        order.
            ``(4) A producer who is a member of a cooperative which has 
        provided notice of its intent to approve or not to approve a 
        proposed order, and who obtains a ballot and with such ballot 
        expresses his approval or disapproval of the proposed order, 
        shall notify the commission as to the name of the cooperative 
        of which he or she is a member, and the commission shall remove 
        such producer's name from the list certified by such 
        cooperative with its corporate vote.
            ``(5) In order to insure that all milk producers are 
        informed regarding a proposed order, the commission shall 
        notify all milk producers that an order is being considered and 
        that each producer may register his approval or disapproval 
        with the commission either directly or through his or her 
        cooperative.

``Sec. 14. TERMINATION OF OVER-ORDER PRICE OR MARKETING ORDER

    ``(a) The commission shall terminate any regulations establishing 
an over-order price or commission marketing order issued under this 
article whenever it finds that such order or price obstructs or does 
not tend to effectuate the declared policy of this compact.
    ``(b) The commission shall terminate any regulations establishing 
an over-order price or a commission marketing order issued under this 
article whenever it finds that such termination is favored by a 
majority of the producers who, during a representative period 
determined by the commission, have been engaged in the production of 
milk the price of which is regulated by such order; but such 
termination shall be effective only if announced on or before such date 
as may be specified in such marketing agreement or order.
    ``(c) The termination or suspension of any order or provision 
thereof, shall not be considered an order within the meaning of this 
article and shall require no hearing, but shall comply with the 
requirements for informal rulemaking prescribed by section four of the 
Federal Administrative Procedure Act, as amended (5 U.S.C. Sec. 553).

                       ``ARTICLE VI. ENFORCEMENT

``Sec. 15. RECORDS, REPORTS, ACCESS TO PREMISES

    ``(a) The commission may by rule and regulation prescribe record 
keeping and reporting requirements for all regulated persons. For 
purposes of the administration and enforcement of this compact, the 
commission is authorized to examine the books and records of any 
regulated person relating to his or her milk business and for that 
purpose, the commission's properly designated officers, employees, or 
agents shall have full access during normal business hours to the 
premises and records of all regulated persons.
    ``(b) Information furnished to or acquired by the commission 
officers, employees, or its agents pursuant to this section shall be 
confidential and not subject to disclosure except to the extent that 
the commission deems disclosure to be necessary in any administrative 
or judicial proceeding involving the administration or enforcement of 
this compact, an over-order price, a compact marketing order, or other 
regulations of the commission. The commission may promulgate 
regulations further defining the confidentiality of information 
pursuant to this section. Nothing in this section shall be deemed to 
prohibit (i) the issuance of general statements based upon the reports 
of a number of handlers, which do not identify the information 
furnished by any person, or (ii) the publication by direction of the 
commission of the name of any person violating any regulation of the 
commission, together with a statement of the particular provisions 
violated by such person.
    ``(c) No officer, employee, or agent of the commission shall 
intentionally disclose information, by inference or otherwise, which is 
made confidential pursuant to this section. Any person violating the 
provisions of this section shall upon conviction be subject to a fine 
of not more than $1,000 or to imprisonment for not more than one year, 
or to both, and shall be removed from office. The commission shall 
refer any allegation of a violation of this section to the appropriate 
state enforcement authority or United States Attorney.

``Sec. 16. SUBPOENA, HEARINGS AND JUDICIAL REVIEW

    ``(a) The commission is hereby authorized and empowered by its 
members and its properly designated officers to administer oaths and 
issue subpoenas throughout all signatory states to compel the 
attendance of witnesses and the giving of testimony and the production 
of other evidence.
    ``(b) Any handler subject to an order may file a written petition 
with the commission stating that any such order or any provision of any 
such order or any obligation imposed in connection therewith is not in 
accordance with law and praying for a modification thereof or to be 
exempted therefrom. He shall thereupon be given an opportunity for a 
hearing upon such petition, in accordance with regulations made by the 
commission. After such hearing, the commission shall make a ruling upon 
the prayer of such petition which shall be final, if in accordance with 
law.
    ``(c) The district courts of the United States in any district in 
which such handler is an inhabitant, or has his principal place of 
business, are hereby vested with jurisdiction in equity to review such 
ruling, provided a bill in equity for that purpose is filed within 
thirty days from the date of the entry of such ruling. Service of 
process in such proceedings may be had upon the commission by 
delivering to it a copy of the bill of complaint. If the court 
determines that such ruling is not in accordance with law, it shall 
remand such proceedings to the commission with directions either (1) to 
make such ruling as the court shall determine to be in accordance with 
law, or (2) to take such further proceedings as, in its opinion, the 
law requires. The pendency of proceedings instituted pursuant to this 
subdivision shall not impede, hinder, or delay the commission from 
obtaining relief pursuant to section seventeen. Any proceedings brought 
pursuant to section seventeen (except where brought by way of 
counterclaim in proceedings instituted pursuant to this section) shall 
abate whenever a final decree has been rendered in proceedings between 
the same parties, and covering the same subject matter, instituted 
pursuant to this section.

``Sec. 17. ENFORCEMENT WITH RESPECT TO HANDLERS

    ``(a) Any violation by a handler of the provisions of regulations 
establishing an over-order price or a commission marketing order, or 
other regulations adopted pursuant to this compact shall:
            ``(1) Constitute a violation of the laws of each of the 
        signatory states. Such violation shall render the violator 
        subject to a civil penalty in an amount as may be prescribed by 
        the laws of each of the participating states, recoverable in 
        any state or federal court of competent jurisdiction. Each day 
        such violation continues shall constitute a separate violation.
            ``(2) Constitute grounds for the revocation of license or 
        permit to engage in the milk business under the applicable laws 
        of the participating states.
    ``(b) With respect to handlers, the commission shall enforce the 
provisions of this compact, regulations establishing an over-order 
price, a commission marketing order or other regulations adopted 
hereunder by:
            ``(1) Commencing an action for legal or equitable relief 
        brought in the name of the commission in any state or federal 
        court of competent jurisdiction; or
            ``(2) With the agreement of the appropriate state agency of 
        a participating state, by referral to the state agency for 
        enforcement by judicial or administrative remedy.
    ``(c) With respect to handlers, the commission may bring an action 
for injunction to enforce the provisions of this compact or the order 
or regulations adopted thereunder without being compelled to allege or 
prove that an adequate remedy of law does not exist.

                         ``ARTICLE VII. FINANCE

``Sec. 18. FINANCE OF START-UP AND REGULAR COSTS

    ``(a) To provide for its start-up costs, the commission may borrow 
money pursuant to its general power under section six, subdivision (d), 
paragraph four. In order to finance the costs of administration and 
enforcement of this compact, including payback of start-up costs, the 
commission is hereby empowered to collect an assessment from each 
handler who purchases milk from producers within the region. If 
imposed, this assessment shall be collected on a monthly basis for up 
to one year from the date the commission convenes, in an amount not to 
exceed one-tenth of one percent of the applicable federal market order 
blend price per hundredweight of milk purchased from producers during 
the period of the assessment. The initial assessment may apply to the 
projected purchases of handlers for the two-month period following the 
date the commission convenes. In addition, if regulations establishing 
an over-order price or a compact marketing order are adopted, they may 
include an assessment for the specific purpose of their administration. 
These regulations shall provide for establishment of a reserve for the 
commission's ongoing operating expenses.
    ``(b) The commission shall not pledge the credit of any 
participating state or of the United States. Notes issued by the 
commission and all other financial obligations incurred by it, shall be 
its sole responsibility and no participating state or the United States 
shall be liable therefor.

``Sec. 19. AUDIT AND ACCOUNTS

    ``(a) The commission shall keep accurate accounts of all receipts 
and disbursements, which shall be subject to the audit and accounting 
procedures established under its rules. In addition, all receipts and 
disbursements of funds handled by the commission shall be audited 
yearly by a qualified public accountant and the report of the audit 
shall be included in and become part of the annual report of the 
commission.
    ``(b) The accounts of the commission shall be open at any 
reasonable time for inspection by duly constituted officers of the 
participating states and by any persons authorized by the commission.
    ``(c) Nothing contained in this article shall be construed to 
prevent commission compliance with laws relating to audit or inspection 
of accounts by or on behalf of any participating state or of the United 
States.

  ``ARTICLE VIII. ENTRY INTO FORCE; ADDITIONAL MEMBERS AND WITHDRAWAL

``Sec. 20. ENTRY INTO FORCE; ADDITIONAL MEMBERS

    ``The compact shall enter into force effective when enacted into 
law by any three states of the group of states composed of Connecticut, 
Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, 
New York, Pennsylvania, Rhode Island, Vermont, and Virginia, and when 
the consent of Congress has been obtained. This compact shall also be 
open to states which are contiguous to any of the named states and open 
to states which are contiguous to participating states.

``Sec. 21. WITHDRAWAL FROM COMPACT

    ``Any participating state may withdraw from this compact by 
enacting a statute repealing the same, but no such withdrawal shall 
take effect until one year after notice in writing of the withdrawal is 
given to the commission and the governors of all other participating 
states. No withdrawal shall affect any liability already incurred by or 
chargeable to a party state prior to the time of such withdrawal.

``Sec. 22. SEVERABILITY

    ``If any part or provision of this compact is adjudged invalid by 
any court, such judgment shall be confined in its operation to the part 
or provision directly involved in the controversy in which such 
judgment shall have been rendered and shall not affect or impair the 
validity of the remainder of this compact.
    ``Congress reserves the right to amend or rescind this interstate 
compact at any time.''.

SEC. 2. RESERVATION OF RIGHTS.

    (a) In General.--The right to alter, amend, or repeal this Act is 
expressly reserved.
    (b) Compensation Requirement.--When an over-order price is in 
effect, the Commission established in this compact shall compensate the 
Commodity Credit Corporation before the end of the fiscal year for the 
cost of any increased Commodity Credit Corporation dairy purchases 
which result from projected increased fluid milk production for that 
fiscal year within the Compact region in excess of the national average 
rate of increase.
S 2069 RS----2