[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2744 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2744

                 To ensure fair play for family farms.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 15, 2000

 Mr. Ashcroft introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
                 To ensure fair play for family farms.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Play for Family Farms Act of 
2000''.

SEC. 2. DEFINITION.

    In this Act, the term ``Secretary'' means the Secretary of 
Agriculture.

SEC. 3. PRODUCER IMPACT ANALYSIS.

    (a) Interagency Cooperation.--The Secretary shall--
            (1) monitor competitive conditions in the agricultural 
        economy;
            (2) through designated personnel confer regularly with 
        designated personnel in the Department of Justice and the 
        Federal Trade Commission to discuss and review law enforcement 
        and regulatory matters related to competitive conditions in the 
        agricultural marketplace; and
            (3) share legal, economic, and technical information with 
        the Department of Justice and the Federal Trade Commission, 
        consistent with applicable confidentiality restrictions, in 
        order to facilitate each agency's enforcement responsibilities 
        and duties under this Act.
    (b) Review of Certain Mergers or Acquisitions.--
            (1) Application.--This subsection applies to a merger or 
        acquisition--
                    (A) with a value of more than $50,000,000; and
                    (B) involving a person in the business of 
                manufacturing an organic agricultural input for sale to 
                farmers or in the business of purchasing livestock, 
                poultry, or a basic agricultural commodity for 
                wholesale resale either unprocessed or processed, who 
                files a notification under section 7A of the Clayton 
                Act (15 U.S.C. 18a).
            (2) Notice.--The Department of Justice and the Federal 
        Trade Commission shall notify the Secretary of all filings 
        described in paragraph (1).
            (3) Public comment.--The Secretary shall--
                    (A) publish promptly in the Federal Register a copy 
                of each notice received under paragraph (2);
                    (B) accept public comments on the proposed merger 
                described in such notice; and
                    (C) consider as part of the review required by 
                paragraph (4), such comments timely received.
            (4) Review.--Not later than the expiration of the review 
        period provided in section 7A of the Clayton Act (15 U.S.C. 
        18a), the Secretary shall--
                    (A) review the proposed merger or acquisition 
                described in the notice;
                    (B) determine--
                            (i) the probable effects such merger or 
                        acquisition would have on the prices paid to 
                        producers of any livestock, poultry, or basic 
                        agricultural commodities who sell to, buy from, 
                        or bargain with 1 or more of the persons 
                        involved in the proposed merger or acquisition;
                            (ii) impacts on producers on a regional 
                        basis;
                            (iii) past anticompetitive conduct of the 
                        companies under review; and
                            (iv) whether such merger or acquisition 
                        would--
                                    (I) result in significantly 
                                increased market power for any of such 
                                persons; and
                                    (II) increase the potential for 
                                anticompetitive or predatory pricing 
                                conduct by any of such persons;
                    (C) prepare a report--
                            (i) containing--
                                    (II) the detailed findings made by 
                                the Secretary as a result of such 
                                review and such determinations; and
                                    (II) an economic analysis of the 
                                Secretary regarding whether such merger 
                                or acquisition may substantially lessen 
                                competition or tend to create a 
                                monopoly; and
                            (ii) not including proprietary information; 
                        and
                    (D) transmit to the relevant Federal agencies and 
                Congress and shall publish in the Federal Register, 
                simultaneously, a copy of such report.

SEC. 4. ASSISTANT ATTORNEY GENERAL FOR AGRICULTURAL ANTITRUST MATTERS.

    (a) In General.--There shall be established within the Department 
of Justice an Assistant Attorney General for Agriculture Competition, 
who shall be responsible for oversight and coordination of antitrust 
and related matters which affect agriculture, directly or indirectly.
    (b) Appointment.--The Assistant Attorney General for Agriculture 
Competition shall be appointed by the President subject to the advice 
and consent of the Senate.

SEC. 5. STATUTORY TRUST FOR THE PROTECTION OF SELLERS OF LIVESTOCK TO 
              MARKET AGENCIES AND LIVESTOCK DEALERS.

    Title III of the Packers and Stockyards Act, 1921 (7 U.S.C. 201 et 
seq.) is amended by adding at the end the following:

``SEC. 318. LIVESTOCK DEALER TRUST.

    ``(a) Findings.--Congress finds that--
            ``(1) a burden on and obstruction to commerce in livestock 
        is caused by financing arrangements under which dealers 
        encumber, give lenders security interest in, or place liens on, 
        livestock obtained by such persons by purchase in cash sales, 
        or on inventories of or receivables or proceeds from such 
        livestock, when payment is not made for livestock; and
            ``(2) such financing arrangements are contrary to the 
        public interest.
    ``(b) Purpose.--The purpose and intent of this section is to remedy 
such burden on and obstruction to commerce in livestock and protect the 
public interest by creating a trust for the benefit of unpaid cash 
sellers of livestock.
    ``(c) Definitions.--In this section:
            ``(1) Cash sale.--The term `cash sale' means a sale in 
        which the seller does not expressly extend credit to the buyer.
            ``(2) Dealer.--The term `dealer' includes a market agency 
        purchasing livestock on a commission basis, for all purposes 
        under and related to this section.
            ``(3) Trust corpus.--The corpus of a trust established 
        under this section shall include the assets of a dealer that 
        are held for the benefit of all unpaid cash sellers of 
        livestock--
                    ``(A) including--
                            ``(i) all accounts receivable and proceeds 
                        derived from the sale of livestock purchased by 
                        the dealer in cash sales; and
                            ``(ii) all livestock inventories of the 
                        dealer; and
                    ``(B) not including--
                            ``(i) livestock purchased by a dealer for 
                        its own account for feeding in a feedlot or on 
                        pasture; and
                            ``(ii) livestock purchased by a bona fide 
                        third-party purchaser for value.
    ``(d) Holding in Trust.--
            ``(1) In general.--The accounts receivable and proceeds 
        generated from livestock purchased in a cash sale by a dealer, 
        and the inventory of the dealer, shall be held by the dealer in 
        trust for the benefit of all unpaid cash sellers of such 
        livestock until full payment has been received by such unpaid 
        sellers.
            ``(2) Dishonor of instrument of payment.--Payment shall not 
        be considered to have been made if the seller receives a 
        payment instrument that is dishonored.
            ``(3) Loss of benefit of trust.--The unpaid seller shall 
        lose the benefit of the trust under paragraph (1) unless the 
        seller gives written notice to the dealer and to the 
        Secretary--
                    ``(A) within 15 business days after the seller has 
                received notice that the payment instrument promptly 
                presented for payment has been dishonored; or
                    ``(B) within 30 days after the final date for 
                making payment under section 409.
            ``(4) Small entity exemption.--Any dealer whose average 
        annual purchases of livestock do not exceed $250,000 is exempt 
        from the provisions of this section.
            ``(5) Cattle feeding exemption.--Purchases by a dealer of 
        livestock for its own account for feeding in a feedlot or on 
        pasture shall not be considered dealer transactions for the 
        purposes of this section.
            ``(6) Rights of third party purchaser.--The trust 
        established under paragraph (1) shall have no effect on the 
        rights of a bona fide third-party purchaser who has purchased 
        livestock from a dealer for value, without regard to whether 
        the livestock are delivered to the bona fide purchaser.
            ``(7) Animal care provider exemption.--Nothing in this 
        section shall affect the rights of an animal care provider 
        created by statute or common law.
    ``(e) Jurisdiction.--
            ``(1) In general.--The district courts of the United States 
        shall have jurisdiction in a civil action by--
                    ``(A) the beneficiary of a trust described in 
                subsection (d)(1) to enforce payment of the amount due 
                the seller from the trust funds; and
                    ``(B) the Secretary, to prevent and restrain 
                dissipation of a trust described in subsection (d).
            ``(2) No effect on other remedies.--Nothing in this section 
        shall limit or diminish in any way any other remedy available 
        to a trust beneficiary or to the Secretary under this Act, any 
        other law, or at common law, but the provisions of this section 
        are in addition to such remedies.
    ``(f) Damages.--If any dealer subject to this section violates any 
of the provisions of such section, the dealer shall be liable to the 
person injured thereby for the full amount of damages sustained as a 
consequence of such violation.
    ``(g) Penalties.--
            ``(1) In general.--Whoever violates the provisions of this 
        section shall be liable to, and the Secretary may assess, a 
        penalty of not more than $10,000 nor less than $1,000 for each 
        such violation.
            ``(2) Considerations.--In determining the amount of the 
        civil penalty to be assessed under this section, the Secretary 
        shall consider the gravity of the offense, the annual purchases 
        of livestock by the person involved, and the effect of the 
        penalty on the person's ability to continue in business.
            ``(3) Enforcement.--If the person against whom a penalty is 
        assessed under this section fails to pay such penalty, the 
        Secretary shall refer the matter to the Attorney General, who 
        shall recover such penalty by an action in the appropriate 
        district court of the United States.''.

SEC. 6. ADDITIONAL RESOURCES FOR DEPARTMENT OF JUSTICE ENFORCEMENT.

    There are authorized to be appropriated for each of the fiscal 
years 2001, 2002, and 2003 such sums as are necessary to the Department 
of Justice to provide additional staff and assistance for the Assistant 
Attorney General for Agriculture Competition to carry out the duties of 
the position.

SEC. 7. AUTHORIZATION FOR ADDITIONAL STAFF AND FUNDING FOR THE GRAIN 
              INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION.

    There are authorized to be appropriated such sums as are necessary 
to enhance the capability of the Grain Inspection, Packers and 
Stockyards Administration to monitor, investigate, and pursue the 
competitive implications of structural changes in the meat packing 
industry. Sums are specifically earmarked to hire litigating attorneys 
to allow the Grain Inspection, Packers and Stockyards Administration to 
more comprehensively and effectively pursue its enforcement activities, 
especially through regional offices.

SEC. 8. GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION 
              APPLICATION TO POULTRY.

    (a) In General.--The Comptroller General shall conduct a study and 
make findings and recommendations with respect to whether there are 
disparities in the Grain Inspection, Packers and Stockyard 
Administration's administrative authority with regard to the poultry, 
beef, and pork industries and how those disparities can be remedied.
    (b) Report.--The Comptroller General shall submit a report to 
Congress on the study, findings, and recommendations required by 
subsection (a) not later than 1 year after the date of enactment of 
this Act.

SEC. 9. UNENFORCEABILITY OF CONFIDENTIALITY CLAUSES IN LIVESTOCK AND 
              POULTRY PRODUCTION CONTRACTS.

    Confidentiality clauses barring a party to a contract from sharing 
terms of such contract for the purposes of obtaining legal or financial 
advice, are unenforceable in livestock production contracts and grain 
production contracts (except to the extent a legitimate trade secret 
(as applied in the Freedom of Information Act, 5 U.S.C. 552 et seq.) is 
being protected).

SEC. 10. REPARATIONS FOR PRODUCERS HARMED BY PACKERS ENGAGED IN 
              ANTICOMPETITIVE BEHAVIOR.

    (a) In General.--The Grain Inspection, Packers and Stockyard 
Administration shall establish a trust fund (referred to in this 
section as the ``trust fund'') for the benefit of farm producers harmed 
by packers engaged in anticompetitive behavior.
    (b) Deposits.--There shall be deposited in trust fund 50 percent of 
the amounts received by the Grain Inspection, Packers and Stockyard 
Administration from fines and settlements resulting from actions taken 
against packers engaged in anticompetitive behavior.
    (c) Payments.--Amounts in the trust fund may be used by the 
Secretary of Agriculture for payments to farm producers that are harmed 
by packers engaged in anticompetitive behavior to compensate those farm 
producers for losses resulting from that harm.
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