[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2867 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2867

To amend the Agricultural Marketing Act of 1946 to increase competition 
 and transparency among packers that purchase livestock from producers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 1, 2002

 Mr. Grassley (for himself and Mr. Feingold) introduced the following 
      bill; which was read twice and referred to the Committee on 
                  Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
To amend the Agricultural Marketing Act of 1946 to increase competition 
 and transparency among packers that purchase livestock from producers.

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

SECTION 1. SPOT MARKET PURCHASES OF LIVESTOCK BY PACKERS.

    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 the following:

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

    ``(a) Definitions.--In this section:
            ``(1) Cooperative association of producers.--The term 
        `cooperative association of producers' has the meaning given 
        the term in section 1a of the Commodity Exchange Act (7 U.S.C. 
        1a).
            ``(2) Covered packer.--
                    ``(A) In general.--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.
                    ``(B) Exclusion.--The term `covered packer' does 
                not include a packer that owns only 1 livestock 
                processing plant.
            ``(3) Nonaffiliated producer.--The term `nonaffiliated 
        producer' means a producer of livestock--
                    ``(A) that sells livestock to a packer;
                    ``(B) that has less than 1 percent equity interest 
                in the packer and the packer has less than 1 percent 
                equity interest in the producer;
                    ``(C) that has no officers, directors, employees or 
                owners that are officers, directors, employees or 
                owners of the packer;
                    ``(D) that has no fiduciary responsibility to the 
                packer; and
                    ``(E) in which the packer has no equity interest.
            ``(4) Spot market sale.--The term `spot market sale' means 
        an agreement for the purchase and sale of livestock by a packer 
        from a producer in which--
                    ``(A) the 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 slaughtered not more than 7 
                days after the date of the agreement;
                    ``(C) a reasonable competitive bidding opportunity 
                existed on the date the agreement was entered into;
            ``(5) Reasonable competitive bidding opportunity.--The term 
        `reasonable competitive bidding opportunity' means that--
                    ``(A) no written or oral agreement precludes the 
                producer from soliciting or receiving bids from other 
                packers; and
                    ``(B) no circumstances, custom or practice exist 
                that establishes the existence of an implied contract, 
                as defined by the Uniform Commercial Code, and 
                precludes the producer from soliciting or receiving 
                bids from other packers.
    ``(b) General Rule.--Of the quantity of livestock that is 
slaughtered by a covered packer during each reporting day in each 
plant, the covered packer shall slaughter not less than the applicable 
percentage specified in subsection (c) of the quantity through spot 
market sales from nonaffiliated producers.
    ``(c) Applicable Percentages.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        applicable percentage shall be--
                    ``(A) 25 percent for covered packers that are not 
                cooperative associations of producers; and
                    ``(B) 12.5 percent for covered packers that are 
                cooperative associations of producers.
            ``(2) Exceptions.--
                    ``(A) In the case of covered packers that reported 
                more than 75 percent captive supply cattle in their 
                2001 annual report to Grain Inspection, Packers and 
                Stockyards Administration of the United States 
                Department of Agriculture, the applicable percentage 
                shall be the greater of--
                            ``(i) the difference between the percentage 
                        of captive supply so reported and 100; and
                            ``(ii) the following numbers (applicable 
                        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; and
                                    ``(III) during the calendar year 
                                2008 and each calendar year thereafter, 
                                25 percent.
                    ``(B) In the case of covered packers that are 
                cooperative associations of producers and that reported 
                more than 87.5 percent captive supply cattle in their 
                2001 annual report to Grain Inspection, Packers, and 
                Stockyards Administration of the United States 
                Department of Agriculture, the applicable percentage 
                shall be the greater of--
                            ``(i) the difference between the percentage 
                        of captive supply so reported and 100; and
                            ``(ii) the following numbers (applicable 
                        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; 
                                and
                                    ``(III) during the calendar year 
                                2008 and each calendar year thereafter, 
                                12.5 percent.
    ``(d) Nonpreemption.--Notwithstanding section 259, this section 
does not preempt any requirement of a State or political subdivision of 
a State that requires a covered packer to purchase on the spot market a 
greater percentage of the livestock purchased by the covered packer 
than is required under this section.
    ``(e) Nothing in this section shall affect the interpretation of 
any other provision of this Act, including but not limited to section 
202 (7 U.S.C. 192).''.
                                 <all>