[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 960 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 960

 To amend the Packers and Stockyards Act, 1921, to prohibit the use of 
              certain anti-competitive forward contracts.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 28, 2005

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

_______________________________________________________________________

                                 A BILL


 
 To amend the Packers and Stockyards Act, 1921, to prohibit the use of 
              certain anti-competitive forward contracts.

    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 ``Captive Supply Reform Act''.

SEC. 2. LIMITATION ON USE OF FORWARD CONTRACTS.

    (a) In General.--Section 202 of the Packers and Stockyards Act, 
1921 (7 U.S.C. 192), is amended--
            (1) by striking ``to:'' and inserting ``to--'';
            (2) by redesignating subsections (a), (b), (c), (d), (e), 
        (f), and (g) as paragraphs (1), (2), (3), (4), (5), (7), and 
        (8), respectively, and indenting appropriately;
            (3) in paragraph (7) (as redesignated by paragraph (2)), by 
        designating paragraphs (1), (2), and (3) as subparagraphs (A), 
        (B), and (C), respectively;
            (4) in paragraph (8) (as redesignated by paragraph (2)), by 
        striking ``subdivision (a), (b), (c), (d), or (e)'' and 
        inserting ``paragraph (1), (2), (3), (4), (5), or (6)'';
            (5) in each of paragraphs (1), (2), (3), (4), (5), (7), and 
        (8) (as redesignated by paragraph (2)), by striking the first 
        capital letter of the first word in the paragraph and inserting 
        the same letter in the lower case;
            (6) in each of paragraphs (1) through (5) (as redesignated 
        by paragraph (2)), by striking ``or'' at the end; and
            (7) by inserting after paragraph (5) (as redesignated by 
        paragraph (2)) the following:
            ``(6) use, in effectuating any sale of livestock, a forward 
        contract that--
                    ``(A) does not contain a firm base price that may 
                be equated to a fixed dollar amount on the day on which 
                the forward contract is entered into;
                    ``(B) is not offered for bid in an open, public 
                manner under which--
                            ``(i) buyers and sellers have the 
                        opportunity to participate in the bid;
                            ``(ii) more than 1 blind bid is solicited; 
                        and
                            ``(iii) buyers and sellers may witness bids 
                        that are made and accepted;
                    ``(C) is based on a formula price; or
                    ``(D) provides for the sale of livestock in a 
                quantity in excess of--
                            ``(i) in the case of cattle, 40 cattle;
                            ``(ii) in the case of swine, 30 swine; and
                            ``(iii) in the case of other types of 
                        livestock, a comparable quantity of the type of 
                        livestock determined by the Secretary.''.
    (b) Definitions.--Section 2(a) of the Packers and Stockyards Act, 
1921 (7 U.S.C. 182(a)) is amended by adding at the end the following:
            ``(15) Formula price.--
                    ``(A) In general.--The term `formula price' means 
                any price term that establishes a base from which a 
                purchase price is calculated on the basis of a price 
                that will not be determined or reported until a date 
                after the day the forward price is established.
                    ``(B) Exclusion.--The term `formula price' does not 
                include--
                            ``(i) any price term that establishes a 
                        base from which a purchase price is calculated 
                        on the basis of a futures market price; or
                            ``(ii) any adjustment to the base for 
                        quality, grade, or other factors relating to 
                        the value of livestock or livestock products 
                        that are readily verifiable market factors and 
                        are outside the control of the packer.
            ``(16) Forward contract.--The term `forward contract' means 
        an oral or written contract for the purchase of livestock that 
        provides for the delivery of the livestock to a packer at a 
        date that is more than 7 days after the date on which the 
        contract is entered into, without regard to whether the 
        contract is for--
                    ``(A) a specified lot of livestock; or
                    ``(B) a specified number of livestock over a 
                certain period of time.''.
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