[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5247 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 5247

To amend the Agricultural Marketing Act of 1946 to increase competition 
 and transparency among packers required to report information on the 
        price and quantity of livestock purchased by the packer.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 26, 2002

    Mr. Latham (for himself, Mr. Ganske, Mr. Nussle, and Mr. Thune) 
 introduced the following bill; which was referred to the Committee on 
                              Agriculture

_______________________________________________________________________

                                 A BILL


 
To amend the Agricultural Marketing Act of 1946 to increase competition 
 and transparency among packers required to report information on the 
        price and quantity of livestock purchased by the packer.

    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 ``Livestock Packer and Producer 
Fairness Act of 2002''.

SEC. 2. REQUIRED SPOT MARKET PURCHASES OF LIVESTOCK BY PACKERS.

    (a) In General.--Chapter 5 of subtitle B of the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1636 et seq.) is amended by adding at 
the end of the following new section:

``SEC. 260. REQUIRED SPOT MARKET PURCHASES OF LIVESTOCK BY PACKERS.

    ``(a) Definitions.--In this section--
            ``(1) Cooperative.--The term `cooperative' has the meaning 
        given the term `cooperative association of producers' in 
        section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
            ``(2) Covered packer.--The term `covered packer' means a 
        packer that is required under this subtitle to report to the 
        Secretary each reporting day information on the price and 
        quantity of livestock purchased by the packer. The term does 
        not include a packer that owns only one livestock processing 
        plant.
            ``(3) Nonaffiliated producer.--The term `nonaffiliated 
        producer' means a producer that--
                    ``(A) sells livestock to a packer in which the 
                packer has no equity interest;
                    ``(B) has less than one percent equity interest in 
                the packer and the packer has less than one percent 
                equity interest in the producer;
                    ``(C) has no officers, directors, employees, or 
                owners that are officers, directors, employees, or 
                owners of the packer; and
                    ``(D) has no fiduciary responsibility to the 
                packer.
            ``(4) Spot market purchase.--The term `spot market 
        purchase' means the purchase of livestock by a packer under 
        circumstances in which--
                    ``(A) the purchase agreement specifies a firm base 
                price that may be equated with a fixed dollar amount on 
                the day the agreement is entered into;
                    ``(B) the livestock are to be slaughtered not more 
                than seven days after the date of the agreement;
                    ``(C) no other written or oral agreement precludes 
                the seller of the livestock from soliciting or 
                receiving bids from other packers; and
                    ``(D) no circumstances, customs, or practices exist 
                that establishes the existence of an implied contract, 
                as defined by the Uniform Commercial Code, or precludes 
                the seller of the livestock from soliciting or 
                receiving bids from other packers.
    ``(b) Spot Market Purchases Required.--Of the quantity of livestock 
slaughtered by a covered packer during each reporting day in each plant 
of the packer, the covered packer shall slaughter not less than the 
applicable percentage specified in subsection (c) or (d) of livestock 
that were purchased by the packer through spot market purchases from 
nonaffiliated producers.
    ``(c) Applicable Percentages.--Except as provided in subsection 
(d), the applicable percentage shall be--
            ``(1) 12.5 percent for a covered packer that is a 
        cooperative; and
            ``(2) 25 percent for a covered packer that is not a 
        cooperative.
    ``(d) Transitional Percentages.--
            ``(1) Special rule for cooperatives.--In the case of a 
        covered packer that is a cooperative and that reported more 
        than 87.5 percent captive supply cattle in its 2001 annual 
        report to the Secretary, the applicable percentage shall be the 
        greater of--
                    ``(A) the difference between 100 and the percentage 
                of captive supply so reported; and
                    ``(B) the following percentages:
                            ``(i) During each of the calendar years of 
                        2004 and 2005, 5 percent.
                            ``(ii) During each of the calendar years of 
                        2006 and 2007, 7.5 percent.
                            ``(iii) During the calendar year 2008 and 
                        each calendar year thereafter, 12.5 percent.
            ``(2) Special rule for other covered packers.--In the case 
        of a covered packer that is not a cooperative and that reported 
        more than 87.5 percent captive supply cattle in its 2001 annual 
        report to the Secretary, the applicable percentage shall be the 
        greater of--
                    ``(A) the difference between 100 and the percentage 
                of captive supply so reported; and
                    ``(B) the following percentages:
                            ``(i) During each of the calendar years of 
                        2004 and 2005, 5 percent.
                            ``(ii) During each of the calendar years of 
                        2006 and 2007, 15 percent.
                            ``(iii) During the calendar year 2008 and 
                        each calendar year thereafter, 25 percent.
    ``(e) Rule of Construction.--Nothing in this section shall affect 
the interpretation of any other provision of this Act, including 
section 202.''.
    (b) Nonpreemption.--Section 259 of the Agricultural Marketing Act 
of 1946 (7 U.S.C. 1636h) is amended--
            (1) by inserting ``(a) Reporting and Publication of 
        Information.--'' after ``In order''; and
            (2) by adding at the end of the following new subsection:
    ``(b) Spot Market Purchases.--This section does not preempt any 
requirement of a State or political subdivision of a State that 
requires a packer to purchase on the spot market a greater percentage 
of the livestock purchased by the packer than is required under section 
260.''.
    (c) Application of Amendment.--The amendment made by subsection (a) 
shall apply to covered producers (as defined in such amendment) 
beginning January 1, 2004.
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