[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 460 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 460

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 24, 2009

 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 foster efficient 
 markets and 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--
            (1) by redesignating section 260 (7 U.S.C. 1636i) as 
        section 261; and
            (2) by inserting after section 259 the following:

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

    ``(a) Definitions.--In this section:
            ``(1) 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.
            ``(2) 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, which 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.
            ``(3) Spot market sale.--
                    ``(A) In general.--The term `spot market sale' 
                means a purchase and sale of livestock by a packer from 
                a producer--
                            ``(i) under an agreement that specifies a 
                        firm base price that may be equated with a 
                        fixed dollar amount on the date the agreement 
                        is entered into;
                            ``(ii) under which the livestock are 
                        slaughtered not more than 7 days after the date 
                        on which the agreement is entered into; and
                            ``(iii) under circumstances in which a 
                        reasonable competitive bidding opportunity 
                        exists on the date on which the agreement is 
                        entered into.
                    ``(B) Reasonable competitive bidding opportunity.--
                For the purposes of subparagraph (A)(iii), 
                circumstances in which a reasonable competitive bidding 
                opportunity shall be considered to exist if--
                            ``(i) no written or oral agreement 
                        precludes the producer from soliciting or 
                        receiving bids from other packers; and
                            ``(ii) no circumstance, custom, or practice 
                        exists that--
                                    ``(I) establishes the existence of 
                                an implied contract (as determined in 
                                accordance with the Uniform Commercial 
                                Code); and
                                    ``(II) 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 25 percent.
            ``(2) Exceptions.--In the case of a covered packer that 
        reported to the Secretary as part of the 2008 annual report 
        required under section 415 of the Packers and Stockyards Act, 
        1921 (7 U.S.C. 228d) that more than 75 percent of the livestock 
        of the covered packer were captive supply livestock, the 
        applicable percentage shall be the greater of--
                    ``(A) the difference between the percentage of 
                captive supply so reported and 100 percent; and
                    ``(B)(i) during calendar year 2010, 10 percent;
                    ``(ii) during calendar year 2011, 15 percent; and
                    ``(iii) during calendar year 2012 and each calendar 
                year thereafter, 25 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) Relationship to Other Provisions.--Nothing in this section 
affects the interpretation of any other provision of this Act, 
including section 202.''.
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