[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2738 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2738

To amend the Agricultural Fair Practices Act of 1967 to provide for the 
  accreditation of associations of agricultural producers, to promote 
  good faith bargaining between such accredited associations and the 
 handlers of agricultural products, and to strengthen the enforcement 
            authorities to respond to violations of the Act.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 24, 1997

 Ms. Kaptur (for herself, Mr. Lipinski, Mr. Rush, Mr. Dellums, and Mr. 
   Hefner) introduced the following bill; which was referred to the 
                        Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
To amend the Agricultural Fair Practices Act of 1967 to provide for the 
  accreditation of associations of agricultural producers, to promote 
  good faith bargaining between such accredited associations and the 
 handlers of agricultural products, and to strengthen the enforcement 
            authorities to respond to violations of the Act.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Family Farmer 
Cooperative Marketing Amendments Act of 1997''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
Sec. 3. Definitions.
Sec. 4. Prohibited practices.
Sec. 5. Bargaining in good faith.
Sec. 6. Accreditation of associations and designation of handlers.
Sec. 7. Assignment of association dues, fees, or retains.
Sec. 8. Investigative powers of Secretary.
Sec. 9. Administrative proceedings to prevent prohibited practices.
Sec. 10. Other enforcement activities.
Sec. 11. Preemption.

SEC. 2. FINDINGS AND PURPOSE.

    Congress finds the following:
            (1) The Agricultural Fair Practices Act of 1967 was enacted 
        to establish standards of fair practices for handlers of 
        agricultural products in order to ensure that family farmers 
        could join together in authorized cooperative associations of 
        producers without interference.
            (2) Despite the enactment of such Act, many family farmers 
        do not enjoy full freedom of association or real liberty of 
        contract and thus continue to suffer from an inequality of 
        bargaining power with the semi-monopolistic agribusiness 
        corporations that contract for their services, and this 
        inequality of bargaining power substantially burdens interstate 
        commerce by driving some farmers from their farms and 
        depressing the income and purchasing power of other farmers.
            (3) Tens of thousands of family farmers produce commodities 
        and provide services under contract arrangements with 
        processing firms or handlers. The types of agricultural 
        commodities produced under such contracts include fruits and 
        vegetables, turkeys, chickens, hogs, beef, milk, popcorn, and 
        genetically engineered plants and animals.
            (4) Production of contract commodities usually requires 
        large fixed investments in highly specialized equipment, or in 
        the case of many fruit producers, a long-term commitment of 
        their land to the crop. Poultry farmers invest more than half 
        of the total capital in the poultry industry.
            (5) On the other hand, processing firms and handlers are 
        better capitalized than producers and often have plants located 
        in different production areas. While processing firms and 
        handlers are not constrained by growing conditions or producer 
        resistance in any one geographic area, farmers usually have 
        access to very few processors and are tied to the family farm 
        by capital investments.
            (6) Farmer efforts to advance their own interests through 
        cooperative marketing associations have been thwarted by 
        processing firms and handlers that threaten to terminate 
        contracts with association members, threaten to move out of 
        their State, or manipulate the incomes of association members 
        to disastrously low levels.
            (7) Because agricultural products are produced, and 
        agricultural services are provided, by numerous individual 
        farmers, their ability to market their products or services and 
        to bargain effectively for fair prices and terms of sale of 
        their products or services is adversely affected unless they 
        are free to join together in cooperative associations of 
        producers as authorized by law. Interference with this right, 
        or the failure of any handler of agricultural products to 
        bargain in good faith with a cooperative association of 
        producers as the representative and agent of such producers, is 
        contrary to the public interest and adversely affects the free 
        and orderly flow of goods in interstate and foreign commerce.
    (b) Purpose.--It is the purpose of this Act to reinforce the 
Agricultural Fair Practices Act of 1967 by--
            (1) establishing standards of fair practices for the 
        handlers of agricultural products and for associations of 
        producers in their dealings in agricultural products or 
        services;
            (2) providing standards for the accreditation of 
        cooperative associations of producers of agricultural products 
        or services for the purpose of bargaining;
            (3) defining the mutual obligations of handlers and 
        associations of producers to bargain with respect to the 
        production, sale, and marketing of agricultural products or 
        services; and
            (4) providing appropriate mechanisms for the enforcement of 
        such obligations.

SEC. 3. DEFINITIONS.

    (a) Producer.--Subsection (b) of section 3 of the Agricultural Fair 
Practices Act of 1967 (7 U.S.C. 2302) is amended--
            (1) by inserting ``poultryman,'' after ``dairyman,''; and
            (2) by adding at the end the following: ``The term includes 
        a person furnishing labor, production management, facilities, 
        or other services for the production of an agricultural 
        product.''.
    (b) Association of Producers.--Subsection (c) of such section is 
amended by inserting ``that engages in the marketing of such 
agricultural products or of agricultural services described in the 
second sentence of subsection (b), including associations'' before 
``engaged in''.
    (c) Additional Definitions.--Such section is further amended by 
striking subsection (e) and inserting the following new subsections:
    ``(e) The term `accredited association' means an association of 
producers accredited by the Secretary of Agriculture in accordance with 
section 6.
    ``(f) The term `designated handler' means a handler that is 
designated pursuant to section 6.
    ``(g) The terms `bargain' and `bargaining' mean the performance of 
the mutual obligation of a handler and an accredited association to 
meet at reasonable times and for reasonable periods of time for the 
purpose of negotiating in good faith with respect to the price, terms 
of sale, compensation for products produced or services rendered under 
contract, or other provisions relating to the products marketed, or the 
services rendered, by the members of the accredited association or by 
the accredited association as agent for the members.''.

SEC. 4. PROHIBITED PRACTICES.

    Section 4 of the Agricultural Fair Practices Act of 1967 (7 U.S.C. 
2303) is amended--
            (1) in the matter preceding the subsections, by striking 
        ``the following practices;'' and inserting ``any of the 
        following practices:''
            (2) in subsection (a), by inserting ``interfere with, 
        restrain, or'' before ``coerce'';
            (3) by striking ``or'' at the end of subsections (a), (b), 
        (c), (d), and (e) and inserting a period; and
            (4) by adding at the end the following new subsections:
    ``(g) To refuse to bargain in good faith with an accredited 
association, if the handler is designated pursuant to section 6.
    ``(h) To dominate or interfere with the formation or administration 
of any association of producers or to contribute financial or other 
support to an association of producers.''.

SEC. 5. BARGAINING IN GOOD FAITH.

    Section 5 of the Agricultural Fair Practices Act of 1967 (7 U.S.C. 
2304) is amended to read as follows:

``SEC. 5. BARGAINING IN GOOD FAITH.

    ``(a) Clarification of Obligation.--The obligation of a designated 
handler to bargain in good faith shall apply with respect to an 
accredited association and the products or services for which the 
accredited association is accredited to bargain. The good-faith 
bargaining required between a handler and an accredited association 
does not require either party to agree to a proposal or to make a 
concession.
    ``(b) Extension of Same Terms to Accredited Association.--If a 
designated handler purchases a product or service from producers under 
terms more favorable to such producers than the terms negotiated with 
an accredited association for the same type of product or services, the 
handler shall offer the same terms to the accredited association. 
Failure to extend the same terms to the accredited association shall be 
considered to be a violation of section 4(g). In comparing terms, the 
Secretary of Agriculture shall take into consideration (in addition to 
the stipulated purchase price) any bonuses, premiums, hauling or 
loading allowances, reimbursement of expenses, or payment for special 
services of any character which may be paid by the handler, and any 
sums paid or agreed to be paid by the handler for any other designated 
purpose than payment of the purchase price.
    ``(c) Mediation and Arbitration.--The Secretary of Agriculture may 
provide mediation services with respect to bargaining between an 
accredited association and a designated handler at the request of 
either the accredited association or the handler. If an impasse in 
bargaining has occurred (as determined by the Secretary), the Secretary 
shall provide assistance in proposing and implementing arbitration 
agreements between the accredited association and the handler. The 
Secretary may establish a procedure for compulsory and binding 
arbitration if the Secretary finds that an impasse in bargaining exists 
and such impasse will result in a serious interruption in the flow of 
an agricultural product to consumers or will cause substantial economic 
hardship to producers or handlers involved in the bargaining.''.

SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF HANDLERS.

    The Agricultural Fair Practices Act of 1967 is amended--
            (1) by redesignating sections 6 and 7 (7 U.S.C. 2305, 2306) 
        as sections 10 and 12, respectively; and
            (2) by inserting after section 5 (7 U.S.C. 2304) the 
        following new section:

``SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF HANDLERS.

    ``(a) Accreditation Petition.--An association of producers seeking 
accreditation to bargain on behalf of producers of an agricultural 
product or service shall submit to the Secretary of Agriculture a 
petition for accreditation. The petition shall--
            ``(1) specify the agricultural product or service (or 
        products or services) for which the association seeks 
        accreditation to bargain on behalf of producers;
            ``(2) designate the handlers, individually or by production 
        or marketing area or by some other appropriate classification, 
        with whom the association seeks to be accredited to bargain; 
        and
            ``(3) contain such other information and documents as may 
        be required by the Secretary.
    ``(b) Notice of Petition; Proceedings.--Upon receiving a petition 
under subsection (a) and any supporting material, the Secretary of 
Agriculture shall give notice of the petition to all handlers 
designated in the petition pursuant to subsection (a)(2). Handlers who 
have been designated individually shall receive personal notice. 
Handlers who have been designated by production or marketing area or by 
some other general classification shall be given notice through the 
Federal Register. Both the association of producers seeking 
accreditation and the handlers shall have an opportunity to submit 
written evidence, views, and arguments to the Secretary. The Secretary 
may conduct an informal proceeding on the petition, except that the 
Secretary shall hold a formal hearing for the reception of testimony 
and evidence if the Secretary finds that there are substantial 
unresolved issues of material fact.
    ``(c) Issuance Accreditation Order.--Upon the petition of an 
association of producers, the Secretary of Agriculture may issue an 
order designating the association of producers as an accredited 
association for purposes of this Act if the Secretary determines that--
            ``(1) under the charter documents or bylaws of the 
        association, it is owned and controlled by producers;
            ``(2) the association has contracts, binding under State 
        law, with its members empowering the association to sell or 
        negotiate terms of sale of the products or services of its 
        members;
            ``(3) the association represents a sufficient number of 
        producers, or its members produce a sufficient quantity of 
        agricultural products or render a sufficient level of services, 
        to enable the association to function as an effective agent for 
        producers in bargaining with designated handlers; and
            ``(4) the functions of the association include acting as 
        principal or agent for its members in negotiations with 
        handlers for prices and other terms of trade with respect to 
        the production, sale, and marketing of their products or 
        services.
    ``(d) Special Rule for Accreditation.--In making the finding 
required under subsection (c)(3), the Secretary of Agriculture shall 
exclude any quantity of the agricultural products or services 
contracted by producers with a producer owned and controlled processing 
cooperative and any quantity of such products produced or services 
rendered by a handler.
    ``(e) Notification of Accreditation Order.--The Secretary of 
Agriculture shall notify the petitioning association of producers, and 
each handler to be designated as part of the petition, of the 
Secretary's decision regarding the petition, together with a concise 
statement of basis for the decision. The Secretary shall also give 
notice of any accreditation to all other associations that have been 
accredited to bargain with respect to the product or service with any 
of the designated handlers.
    ``(f) Annual Report.--Each accredited association shall submit an 
annual report to the Secretary of Agriculture in such form and 
including such information as the Secretary by regulation may require 
so as to enable the Secretary to determine whether the association 
continues to meet the standards for accreditation.
    ``(g) Loss of Accreditation.--If the Secretary of Agriculture 
determines that an accredited association has ceased to meet the 
standards for accreditation set forth in subsection (c), the Secretary 
shall notify the association of the respects in which it has ceased to 
maintain such standards and allow it a reasonable time to answer or to 
correct the deficiencies noted. Thereafter, if the Secretary is not 
satisfied that the association is then in compliance with subsection 
(c), the Secretary shall notify the association and hold a hearing to 
consider the revocation of accreditation. If, based upon the evidence 
submitted at the hearing, the Secretary finds that the association has 
ceased to maintain the standards for accreditation, the Secretary shall 
revoke the accreditation of such association.
    ``(h) Amendment.--At the discretion of the Secretary of Agriculture 
or upon the petition of an accredited association or a designated 
handler, the Secretary may amend an accreditation order with respect to 
the product or service specified in the accreditation order. The 
Secretary shall give notice of any proposed amendment and the reasons 
therefor to all accredited associations and handlers that would be 
directly affected by the amendment and shall provide an opportunity for 
a public hearing. Thereafter, the Secretary may amend the order if the 
Secretary finds such amendment will be conducive to more effective 
bargaining and orderly marketing by the accredited association of the 
product or services of its members.''.

SEC. 7. ASSIGNMENT OF ASSOCIATION DUES, FEES, OR RETAINS.

    The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 et seq.) 
is amended by inserting after section 6 (as added by section 6) the 
following new section:

``SEC. 7. ASSIGNMENT OF ASSOCIATION DUES, FEES, OR RETAINS.

    ``(a) Assignment Authorized.--A producer of a agricultural product 
or service may execute, either as a clause in a sales contract or in 
another written instrument, an assignment of dues or fees to, or the 
deduction of a sum to be retained by, an association of producers 
authorized by contract to represent the producer, by which assignment a 
handler is directed--
            ``(1) to deduct a portion of the amount to be paid for 
        products or services of the producer under a growing contract; 
        and
            ``(2) to pay, on behalf of the producer, the portion over 
        to the association as dues or fees or funds to be retained by 
        the association.
    ``(b) Duty of Handler.--After a handler receives notice from a 
producer of an assignment under subsection (a), the handler shall 
deduct the amount authorized by the assignment from the amount paid for 
any agricultural product being sold by any the producer or for any 
service rendered under any growing contract and, upon payment to 
producers for such product or service, pay the amount over to the 
association or its assignee.''.

SEC. 8. INVESTIGATIVE POWERS OF SECRETARY.

    The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 et seq.) 
is amended by inserting after section 7 (as added by section 7) the 
following new section:

``SEC. 8. INVESTIGATIVE POWERS OF SECRETARY.

    ``(a) Investigative Powers.--The Secretary of Agriculture shall 
have the following powers to carry out the objectives of this Act, 
including the conduct of any investigations or hearings:
            ``(1) The Secretary may require any person to establish and 
        maintain such records, make such reports, and provide such 
        other information as the Secretary may reasonably require.
            ``(2) The Secretary and any officer or employee of the 
        Department of Agriculture, upon presentation of credentials and 
        a warrant or such other order of a court as may be required by 
        the Constitution--
                    ``(A) shall have a right of entry to, upon, or 
                through any premises in which records required to be 
                maintained under paragraph (1) are located, and
                    ``(B) may at reasonable times have access to and 
                copy any records, which any person is required to 
                maintain or which relate to any matter under 
                investigation or in question.
    ``(b) Treatment of Records.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        records, reports, or information obtained under this section 
        shall be available to the public.
            ``(2) Exception.--Upon a showing satisfactory to the 
        Secretary of Agriculture that records, reports, or information 
        acquired under this section, if made public, would divulge 
        confidential business information, the Secretary shall consider 
        such record, report, or information or particular portion 
        thereof confidential in accordance with section 1905 of title 
        18, United States Code, except that the Secretary may disclose 
        such record, report, or information to other officers, 
        employees, or authorized representatives of the United States 
        concerned with carrying out this Act or when relevant in any 
        proceeding under this Act.
    ``(c) Powers Related to Hearings.--
            ``(1) Attendance of witnesses.--In making inspections and 
        investigations under this Act, the Secretary of Agriculture may 
        require the attendance and testimony of witnesses and the 
        production of evidence under oath.
            ``(2) Subpoena power.--The Secretary, upon application of 
        any party to a hearing held under section 9, shall forthwith 
        issue to such party subpoenas requiring the attendance and 
        testimony of witnesses or the production of evidence requested 
        in such application. Within five days after the service of a 
        subpoena on any person requiring the production of any evidence 
        in the possession of the person or under the control of the 
        person, the person may petition the Secretary to revoke such 
        subpoena. The Secretary shall revoke such subpoena if in the 
        opinion of the Secretary the evidence whose production is 
        required does not relate to any matter in question, or if such 
        subpoena does not describe with sufficient particularity the 
        evidence whose production is required.
            ``(3) Oaths and other matters.--The Secretary, or any 
        officer or employee of the Department of Agriculture designated 
        for such purpose, shall have power to administer oaths, sign 
        and issue subpoenas, examine witnesses, and receive evidence. 
        Witnesses shall be paid the same fees and mileage allowance as 
        are paid witnesses in the courts of the United States.
    ``(d) Failure to Comply.--In the case of any failure or refusal of 
any person to obey a subpoena or order of the Secretary of Agriculture 
under this section, any district court of the United States, within the 
jurisdiction of which such person is found or resides or transacts 
business, upon the application by the Secretary shall have jurisdiction 
to issue to such person an order requiring such person to appear to 
produce evidence if, as, and when so ordered to give testimony relating 
to the matter under investigation or in question. Any failure to obey 
such order of the court may be punished by the court as a contempt of 
court.''.

SEC. 9. ADMINISTRATIVE PROCEEDINGS TO PREVENT PROHIBITED PRACTICES.

    The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 et seq.) 
is amended by inserting after section 8 (as added by section 8) the 
following new section:

``SEC. 9. ADMINISTRATIVE PROCEEDINGS TO PREVENT PROHIBITED PRACTICES.

    ``(a) Petition.--Any person complaining of any violation of section 
4 or other provision of this Act may apply to the Secretary of 
Agriculture by petition, which shall briefly state the facts serving as 
the basis for the complaint. If, in the opinion of the Secretary, the 
facts contained in the petition warrant further action, the Secretary 
shall forward a copy of the petition to the accredited association or 
handler named in the petition, who shall be called upon to satisfy the 
complaint, or to answer it in writing, within a reasonable time to be 
prescribed by the Secretary.
    ``(b) Investigation and Complaint.--If there appears to be, in the 
opinion of the Secretary, reasonable grounds for investigating a 
complaint made under subsection (a), the Secretary of Agriculture shall 
investigate such complaint or notification. In the opinion of the 
Secretary, if the investigation substantiates the existence of a 
violation of section 4 or other provision of this Act, the Secretary 
may cause a complaint to be issued. The Secretary shall have the 
complaint served by registered mail or certified mail or otherwise on 
the person concerned and afford such person an opportunity for a 
hearing thereon before a duly authorized examiner of the Secretary in 
any place in which the subject of the complaint is engaged in business.
    ``(c) Hearing.--The person complained of shall have the right to 
file an answer to the original and any amended complaint and to appear 
in person or otherwise and give testimony. The person who filed the 
charge shall also have the right to appear in person or otherwise and 
give testimony. Any such proceeding shall, as far as practicable, be 
conducted in accordance with the rules of evidence and the rules of 
civil procedure applicable in the district courts of the United States.
    ``(d) Orders.--If, upon a preponderance of the evidence, the 
Secretary of Agriculture is of the opinion that the person subject to 
the complaint has violated section 4 or other provision of this Act, 
the Secretary shall issue an order containing the Secretary's findings 
of fact and requiring the person to cease and desist from such 
violation. The Secretary may order such further affirmative action, 
including an award of damages to compensate the person filing the 
petition for the damages sustained, as will effectuate the policies of 
this Act and make the person filing the petition whole.
    ``(e) Complaints Instituted by Secretary.--The Secretary of 
Agriculture may at any time institute an investigation under subsection 
(b) if there appears to be, in the opinion of the Secretary, reasonable 
grounds for the investigation and the matter to be investigated is such 
that a petition is authorized to be made to the Secretary. The 
Secretary shall have the same power and authority to proceed with any 
investigation instituted under this subsection as though a petition had 
been filed under subsection (a), including the power to make and 
enforce any order.
    ``(f) Judicial Review.--
            ``(1) Obtaining review.--Any person aggrieved by a final 
        order of the Secretary of Agriculture issued under subsection 
        (d) may obtain review of such order in the United States Court 
        of Appeals for the District of Columbia by submitting to such 
        court within 30 days from the date of such order a written 
        petition praying that such order be modified or set aside.
            ``(2) Treatment of findings.--The findings of the Secretary 
        with respect to questions of fact, if supported by substantial 
        evidence on the record, shall be conclusive.
            ``(3) Effect of failure to seek timely review.--If no 
        petition for review, as provided in paragraph (1), is filed 
        within 30 days after service of the Secretary's order, the 
        order shall not be subject to review in any civil or criminal 
        proceeding for enforcement, and the findings of fact and order 
        of the Secretary shall be conclusive in connection with any 
        petition for enforcement which is filed by the Secretary after 
        the expiration of such period. In any such case, the clerk of 
        the court, unless otherwise ordered by the court, shall 
        forthwith enter a decree enforcing the order and shall transmit 
        a copy of such decree to the Secretary and the person named in 
        the complaint.
            ``(4) Effect on orders of the secretary.--The commencement 
        of proceedings under this section shall not operate as a stay 
        of an order of the Secretary under subsection (d), unless 
        specifically ordered by the court.''.

SEC. 10. OTHER ENFORCEMENT ACTIVITIES.

    Section 10 of the Agricultural Fair Practices Act of 1967 (7 U.S.C. 
2305), as redesignated by section 6(1), is amended--
            (1) by striking the undesignated paragraph at the end of 
        the section;
            (2) in subsection (d), by striking ``and shall exercise'' 
        and all that follows through the period and inserting a period 
        and the following: ``No action may be commenced under 
        subsection (a) or (c)--
            ``(1) prior to 60 days after the plaintiff has given notice 
        of the alleged violation to the Secretary of Agriculture under 
        section 9(a); or
            ``(2) if the Secretary has commenced and is diligently 
        prosecuting an action (administrative or judicial) dealing with 
        the same violation to require compliance with the Act.''; and
            (3) by adding at the end the following new subsection:
    ``(e) Orders of the Secretary of Agriculture with respect to which 
review could have been obtained under section 9(f) shall not be subject 
to judicial review in any proceeding for enforcement under this 
section.''.

SEC. 11. PREEMPTION.

    The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 et seq.) 
is amended by inserting after section 10 (as redesignated by section 
6(1)) the following new section:

``SEC. 11. PREEMPTION.

    ``This Act shall not invalidate the provisions of any existing or 
future State law dealing with the same subjects as this Act, except 
that such State law may not permit any action that is prohibited by 
this Act. This Act shall not deprive the proper State courts of 
jurisdiction under State laws dealing with the same subjects as this 
Act.''.
                                 <all>