[Congressional Record Volume 159, Number 43 (Friday, March 22, 2013)]
[Senate]
[Pages S2334-S2338]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. CORNYN:
S. 652. A bill to protect investors by fostering transparency and
accountability of attorneys in private securities litigation; to the
Committee on Banking, Housing, and Urban Affairs.
Mr. CORNYN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 652
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 ``Securities Litigation
Attorney Accountability and Transparency Act''.
SEC. 2. DISCLOSURES OF PAYMENTS, FEE ARRANGEMENTS,
CONTRIBUTIONS, AND OTHER POTENTIAL CONFLICTS OF
INTEREST BETWEEN PLAINTIFF AND ATTORNEYS.
(a) Securities Exchange Act of 1934.--Section 21D(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-4(a)) is
amended by adding at the end the following:
``(10) Disclosures regarding payments.--
``(A) Sworn certifications required.--
``(i) In general.--In any private action arising under this
title, each plaintiff and any attorney for such plaintiff
shall provide sworn certifications, which shall--
``(I) be personally signed by such plaintiff and each such
attorney, respectively;
``(II) be filed with the complaint; and
``(III) identify any direct or indirect payment, or promise
of any payment, by such attorney, or any person affiliated
with such attorney, to such plaintiff, or any person
affiliated with such plaintiff, beyond the pro rata share of
any recovery received by the plaintiff, except as ordered or
approved by the court in accordance with paragraph (4).
``(ii) Court actions.--Upon disclosure of any payment or
promise of payment described in clause (i), the court shall
disqualify the attorney from representing the plaintiff.
``(B) Definition.--For purposes of this paragraph, the term
`payment' includes the transfer of money and any other thing
of value, including the provision of services, other than
representation of the plaintiff in the private action arising
under this title.
``(11) Disclosures regarding legal representations.--
``(A) In general.--In any private action arising under this
title, each plaintiff and any attorney for such plaintiff
shall provide sworn certifications, which shall--
``(i) be personally signed by such plaintiff and each such
attorney, respectively;
``(ii) be filed with the complaint; and
``(iii) identify the nature and terms of any legal
representation provided by such attorney, or any person
affiliated with such attorney, to such plaintiff, or any
person affiliated with such plaintiff, other than the
representation of the plaintiff in the private action arising
under this title.
``(B) Court actions.--The court--
``(i) may allow certifications under subparagraph (A) to be
made under seal;
``(ii) shall review such certifications to determine
whether cause exists to believe that the nature or terms of
the fee arrangement for any other matter influenced the
selection and retention of counsel in the private action
arising under this title;
``(iii) may conduct a factual inquiry or refer the question
to a magistrate, if the court makes a finding described in
clause (ii); and
``(iv) shall disqualify the attorney from representing the
plaintiff in any action arising under this title, if the
court finds, after such inquiry, that the nature or terms of
the fee arrangement for any other matter influenced the
selection and retention of counsel in any such action.
``(12) Disclosures regarding contributions.--In any private
action arising under this title, each plaintiff and any
attorney for such plaintiff shall provide sworn
certifications, which shall--
``(A) be personally signed by such plaintiff and each such
attorney, respectively;
``(B) be filed with the complaint; and
``(C) identify any contribution made during the 5-year
period preceding the date of filing
[[Page S2335]]
of the complaint by such attorney, any person affiliated with
such attorney, or any political action committee controlled
by such attorney, to any elected official with real or
apparent authority to retain counsel for such plaintiff or to
select or appoint, influence the selection or appointment of,
or oversee any individual or group of individuals with that
authority.''.
(b) Securities Act of 1933.--Section 27(a) of the
Securities Act of 1933 (15 U.S.C. 77z-1(a)) is amended by
adding at the end the following:
``(9) Disclosures regarding payments.--
``(A) Sworn certifications required.--
``(i) In general.--In any private action arising under this
title, each plaintiff and any attorney for such plaintiff
shall provide sworn certifications, which shall--
``(I) be personally signed by such plaintiff and each such
attorney, respectively;
``(II) be filed with the complaint; and
``(III) identify any direct or indirect payment, or promise
of any payment, by such attorney, or any person affiliated
with such attorney, to such plaintiff, or any person
affiliated with such plaintiff, beyond the pro rata share of
any recovery received by the plaintiff, except as ordered or
approved by the court in accordance with paragraph (4).
``(ii) Court actions.--Upon disclosure of any payment or
promise of payment described in clause (i), the court shall
disqualify the attorney from representing the plaintiff.
``(B) Definition.--For purposes of this paragraph, the term
`payment' shall include the transfer of money and any other
thing of value, including the provision of services, other
than representation of the plaintiff in the private action
arising under this title.
``(10) Disclosures regarding legal representations.--
``(A) In general.--In any private action arising under this
title, each plaintiff and any attorney for such plaintiff
shall provide sworn certifications, which shall--
``(i) be personally signed by such plaintiff and each such
attorney, respectively;
``(ii) be filed with the complaint; and
``(iii) identify the nature and terms of any legal
representation provided by such attorney, or any person
affiliated with such attorney, to such plaintiff, or any
person affiliated with such plaintiff, other than the
representation of the plaintiff in the private action arising
under this title.
``(B) Court actions.--The court--
``(i) may allow certifications under subparagraph (A) to be
made under seal;
``(ii) shall review such certifications to determine
whether cause exists to believe that the nature or terms of
the fee arrangement for any other matter influenced the
selection and retention of counsel in the private action
arising under this title;
``(iii) may conduct a factual inquiry or refer the question
to a magistrate, if the court makes a finding described in
clause (ii); and
``(iv) shall disqualify the attorney from representing the
plaintiff in any action arising under this title, if the
court finds, after such inquiry, that the nature or terms of
the fee arrangement for any other matter influenced the
selection and retention of counsel in the private action
arising under this title.
``(11) Disclosures regarding contributions.--In any private
action arising under this title, each plaintiff and any
attorney for such plaintiff shall provide sworn
certifications, which shall--
``(A) be personally signed by such plaintiff and each such
attorney, respectively;
``(B) be filed with the complaint; and
``(C) identify any contribution made during the 5-year
period preceding the date of filing of the complaint by such
attorney, any person affiliated with such attorney, or any
political action committee controlled by such attorney, to
any elected official with real or apparent authority to
retain counsel for such plaintiff or to select or appoint,
influence the selection or appointment of, or oversee any
individual or group of individuals with that authority.''.
SEC. 3. SELECTION OF LEAD COUNSEL.
(a) Securities Exchange Act of 1934.--Section
21D(a)(3)(B)(v) of the Securities Exchange Act of 1934 (15
U.S.C. 78u-4(a)(3)(B)(v)) is amended by adding at the end the
following: ``In exercising the discretion of the court over
the approval of lead counsel, the court shall employ a
competitive bidding process as one of the criteria in the
selection and retention of counsel for the most adequate
plaintiff, unless the court determines on the record that
such a process is not feasible.''.
(b) Securities Act of 1933.--Section 27(a)(3)(B)(v) of the
Securities Act of 1933 (15 U.S.C. 77z-1(a)(3)(B)(v)) is
amended by adding at the end the following: ``In exercising
the discretion of the court over the approval of lead
counsel, the court shall employ a competitive bidding process
as one of the criteria in the selection and retention of
counsel for the most adequate plaintiff, unless the court
determines on the record that such a process is not
feasible.''.
SEC. 4. STUDY OF AVERAGE HOURLY FEES IN SECURITIES CLASS
ACTIONS.
(a) Study and Review Required.--The Comptroller General of
the United States (in this section referred to as the
``Comptroller General'') shall conduct a study and review of
fee awards to lead counsel in securities class actions during
the 7-year period preceding the date of enactment of this
Act, to determine the effective average hourly rate for lead
counsel in such actions. Such study and review shall also
consider lead counsel perquisites, including travel and
accommodation.
(b) Report Required.--Not later than 1 year after the date
of enactment of this Act, the Comptroller General shall
submit a report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives on the results of
the study and review required by this section. The
Comptroller General shall submit an updated report every 3
years thereafter.
(c) Definition.--For purposes of this section, the term
``securities class action'' means a private class action
arising under the Securities Act of 1933 (15 U.S.C. 77 et
seq.) or the Securities Exchange Act of 1934 (15 U.S.C. 78 et
seq.) that is brought as a plaintiff class action pursuant to
the Federal Rules of Civil Procedure.
______
By Mr. LEAHY (for himself and Mr. Inhofe):
S. 657. A bill to eliminate conditions in foreign prisons and other
detention facilities that do not meet primary indicators of health,
sanitation, and safety, and for other purposes; to the Committee on
Foreign Relations.
Mr. LEAHY. Mr. President, I am very pleased to join today with the
senior Senator from Oklahoma, Senator Inhofe, in reintroducing
legislation that has already attracted broad support from across the
social and political spectrum. An almost identical version was reported
by the Foreign Relations Committee two years ago, and then last
December it was cleared by both sides for passage by unanimous consent
but the Senate adjourned shortly before it could be adopted.
This bill, titled the Foreign Prison Conditions Improvement Act of
2013, seeks to address a much neglected, global human rights and
humanitarian problem--the inhumane treatment of people in foreign
prisons and other detention facilities.
On any given day, millions of people are languishing in foreign
prisons, many in pretrial detention having never been brought before a
judge or formally charged or proven guilty of anything, deprived of
their freedom in abysmal conditions, often for years longer than they
could have been sentenced to prison if convicted.
Others are imprisoned after being convicted of offenses, often after
woefully unfair trials, including for nothing more than peacefully
expressing political or religious beliefs or defending human rights.
Regardless of their status they have one thing in common. They are
deprived of the most basic rights and necessities--safe water, adequate
food, essential medical care, personal safety, and dignity.
Anyone who has been inside one of these facilities, or seen
photographs or press reports of what they are like, understands that
this is about the mistreatment of human beings in ways that are
reminiscent of the Dark Ages.
A few examples illustrate the point. In Haiti's National Penitentiary
before the 2010 earthquake, more than 4,100 prisoners were confined in
a space built for less than 900. Many did not have room to lie down and
had to sleep standing up. Sanitation was practically non-existent.
Deadly contagious diseases were rampant. The overwhelming majority of
inmates had never been formally charged, never seen a lawyer or a
judge. The earthquake damaged the prison and the prison guards fled,
leaving the inmates to fend for themselves without food or water. They
managed to get out, but the squalid facility filled up again.
Senator Whitehouse and I visited that facility just last month. It
currently holds more than 3,700 prisoners of which more than 3,400 are
awaiting trial. Thanks to the State Department, the U.S. Agency for
International Development, and a small Florida-based organization,
Health Through Walls, a new infirmary and X-ray machine have
dramatically reduced the incidence of HIV and tuberculosis. A small
Vermont-based organization, the Rural Justice Center, is using USAID
funds to chip away at the pretrial detention problem. These are
examples of how modest funding can save lives and improve access to
justice for prisoners in facilities plagued by abysmal conditions.
I recall a newspaper article about how in Benin, in West Africa, the
skin of prisoners was ragged from the extraction of fly larvae, an
affliction that is symptomatic of the deplorable conditions. Many
inmates suffer from tuberculosis, scabies, parasites, lung infections
or other illnesses. The prison in Abomey, located in southern Benin,
[[Page S2336]]
was built in 1904 to house a maximum of 150 prisoners. A year or two
ago, more than 1,000 were reportedly confined there.
Last February, a fire at the Comayagua Prison in Honduras killed 360
inmates. In one overcrowded cell block only four of 105 prisoners
survived. More than half of those who died were waiting to be charged
or tried.
It is common in prisons from Latin America to the Middle East,
Africa, and Asia for inmates to be severely malnourished and to go for
months without being able to wash. Many prisoners depend for survival
on food brought to them by relatives. In many countries individuals
awaiting trial, young and old, are housed together with convicted,
violent criminals.
Prisoners and other detainees in many countries are also routinely
victimized by poorly trained, abusive guards who are virtually
unsupervised and unaccountable to any higher authority. Sexual abuse of
men, women and children is common.
Prisoners in many countries die in prison from lack of proper medical
care. Inmates suffer from AIDS and other illnesses in facilities with
no medical records, where doctors do not enter. Prisoners intentionally
cut or otherwise harm themselves in the hope of receiving medical
attention for life-threatening illnesses. If and when they are released
they infect the local population.
A New York Times article described how prisoners in one African
country were punished by being stripped naked and held in solitary
confinement in small, windowless cells, sometimes for days on end, in
ankle-to-calf-high water contaminated with their own excrement. It is
like something out of The Count of Monte Cristo, only worse because it
is happening in the 21st Century. But the article went on to describe
how that country's prison service conducted its own audit, appointed a
new medical director, and allowed human rights workers access to its
facilities. The legislation Senator Inhofe and I are introducing seeks
to provide incentives for those kinds of improvements. Our bill would
do the following:
First, it calls attention to this long ignored problem. Most people
know little if anything about what goes on inside foreign prisons, and
many would prefer not to know.
Second, it sets forth primary indicators for the elimination of
inhumane conditions in foreign prisons and other detention facilities,
such as human waste facilities that are sanitary and accessible, and
adequate ventilation, food and safe drinking water.
Third, it requires the Secretary of State to report annually on the
conditions in prisons and other detention facilities in at least 30
countries receiving United States assistance or under sanction by the
United States, selected by the Secretary's determination that such
conditions raise the most serious human rights or humanitarian
concerns.
Fourth, it encourages the Secretary and the Administrator of the U.S.
Agency for International Development to furnish assistance for the
purpose of eliminating inhumane conditions where such assistance would
be appropriate and beneficial.
For countries that are not making significant efforts to eliminate
such conditions, the Secretary is to enter into consultations with
their government to achieve the purposes of the Act.
The legislation also provides for training of Foreign Service
Officers, and directs the Secretary to designate, within the Department
of State's Bureau for Democracy, Human Rights, and Labor, an official
with responsibility for implementing the provisions of the Act.
Finally, it authorizes the expenditure of funds to implement the Act.
Once enacted, the Foreign Prison Conditions Improvement Act of 2013
will help foreign governments ensure that prisoners in their countries
are treated as any people deprived of their freedom should be--as human
beings, with dignity, in safety, and provided the basic necessities of
life.
In countries around the world, the United States is helping to reform
justice systems and strengthen the rule of law. No justice system can
claim to deliver justice if prisoners and other detainees are treated
like animals, or worse. By helping to change attitudes, and showing how
with relatively little money prison conditions can be significantly
improved, we can help advance the cause of justice more broadly.
Millions of people around the world look to the United States as a
defender of justice. This legislation will further that goal and it
reflects the best instincts of the American people. It has been
endorsed by a wide range of groups, including Amnesty International,
USA; Baptist World Alliance, Division of Freedom and Justice; Ethics
and Religious Liberty Commission of the Southern Baptist Convention;
Human Rights First; Human Rights Watch; International CURE;
International Justice Mission; International Prison Chaplains'
Association; Jewish Council for Public Affairs; Just Detention
International; Justice Fellowship/Prison Fellowship Ministries;
National Association of Evangelicals; National Religious Campaign
Against Torture; New Evangelical Partnership for the Common Good; Open
Society Policy Center; Penal Reform International; Religious Action
Center of Reform Judaism; United Methodist Church, General Board of
Church and Society; and the United States Conference of Catholic
Bishops. I want to thank these groups for their support and their
efforts to focus attention on this urgent problem.
Identical legislation is planned for reintroduction in the House by
Representative Chris Smith who cares deeply about this issue, so this
is a bipartisan, bicameral effort.
Finally, I want to thank Senator Inhofe, who has visited many African
countries and has witnessed the problems this legislation seeks to
address, as well as his staff, who have been very helpful throughout
this process. At a time when some people seem to get satisfaction from
calling Washington broken, this is another example of how two Senators,
of different parties, whose political views often differ, can work
together in furtherance of a just cause.
Mr. INHOFE. Mr. President, it is with great pleasure that I join my
friend Senator Leahy from Vermont in introducing, the Foreign Prison
Conditions Improvement Act of 2013.
As I stated when we introduced this bill in the 112th Congress, our
bill seeks to identify and eliminate unhealthy and unsafe prison
conditions found in developing countries like Haiti and on the African
continent where millions suffer inhumane conditions as well as to
address the dysfunctions in their legal systems.
The introduction of this bill comes at an appropriate time because
Jon Hammer, the imprisoned U.S. Marine being held in the Cedes Prison
in Matamoras, Mexico was freed this past December 21st.
Corporal Hammer, who served in Iraq and Afghanistan, was arrested in
August and charged with a Federal weapons felony--facing up to 15 years
in prison, for carrying an antique gun into Mexico on his way to Costa
Rica for a hunting trip, despite, as I understand it, having a required
permit and attempting to declare the gun. During the past 90 days, he
faced the same harsh conditions that our bill is trying to address.
Namely, Hammer was housed in an overcrowded and unsanitary prison,
beaten by fellow inmates who were members of the murderous Mexican drug
cartels, threatened with death in an extortion attempt by these inmates
and chained to a bed.
I had been involved in seeking Jon's release for several weeks, and I
was heartened when he was released. His treatment, however, serves as
an excellent example of the deficiencies found everyday in foreign
prisons worldwide from Africa to no further away than our southern
border.
Our bill focuses on eliminating excessive pre-trial detention and
dysfunctional justice systems which frequently result in prisoners and
other detainees spending years in unhealthy prison conditions before
their cases are even adjudicated. Tragically, inadequate, misplaced or
lost records often result in the incarcerated being held indefinitely
because their cases have never been heard. Unbelievably, such poor
recordkeeping has kept many in prison long after their sentences have
been served. Our bill also encourages these nations to provide humane
and sanitary prison conditions so that prisoners can be released in
good health, and thus stem one of the causes of the spread of HIV and
tuberculosis among the general public.
[[Page S2337]]
Our bill calls upon the Department of State to submit to Congress an
annual report for five years that describes inhuman prison conditions
at least 30 countries receiving U.S. foreign assistance. It gives the
Secretary of State and Administrator of the U.S. Agency for
International Development the discretion to restructure, reprogram or
reduce U.S. foreign assistance to these countries based upon whether
they are making ``significant efforts'' to eliminate inhuman conditions
in their prisons and other detention facilities.
The goals of this bill are noble, but it will take close monitoring
and hard work by our U.S. Foreign Service personnel on the ground
overseas to fulfill this work. That is why our bill directs the
Secretary of State to provide training to these embassy and consulate
personnel so that they can effectively investigate and assess prison
conditions in foreign prisons as well as assist these foreign
governments to adopt substantive prison reforms. The Secretary is also
directed to designate and task a Deputy Assistant Secretary of State
within the Bureau of Democracy, Human Rights and Labor with the
responsibility for gathering the information for the annual report and
make recommendations to the Secretary based off its conclusions.
I have made 128 African country visits over the past 16 years, and I
believe that given the chance, the majority of Africa's leaders will
welcome the opportunity to interact with our embassy and consulate
personnel and adopt the best practices for achieving the elimination of
unhealthy and unsafe conditions in their prisons and other detention
facilities. It is also my hope that our neighbors to the south will
adopt safe and sanitary prisons conditions and correct the dysfunctions
in their justice systems so that another U.S. citizen does not have to
spend 90 days in prison for a paperwork error.
The task at hand reminds me of the teaching of Jesus in Matthew
25:39:40 when he said, `` `When did we see you sick or in prison and
visit you?' And the King will answer them, `Truly, I say to you, as you
did it to one of the least of these my brothers, you did it to me.' ''
We are all our brothers' keepers.
______
By Mrs. GILLIBRAND (for herself, Mr. Vitter, Mr. Coons, Mr.
Blunt, Ms. Landrieu, Mr. Leahy, Mr. Warner, and Mrs. Murray):
S. 658. A bill to amend titles 10 and 32, United States Code, to
enhance capabilities to prepare for and respond to cyber emergencies,
and for other purposes; to the Committee on Armed Services.
Mrs. GILLIBRAND. Mr. President, I am pleased to join Senators Vitter,
Coons, Blunt, Landrieu, Leahy, Warner, and Murray in introducing the
Cyber Warrior Act of 2013 to build Cyber and Computer Network Incident
Response Teams in the National Guard.
This bill would establish a Cyber and Computer Network Incident
Response Team, CCNIRT, in each state and the District of Columbia,
which could provide a scalable response, called into support by the
Governor in case of a domestic initial response or by the Secretary of
Defense in a Title 10 status when the situation warrants it. These
teams would combine both Active and Traditional Guard Members, thereby
leveraging the private sector IT expertise and experience. The use of
the Guard would also support the goal of retaining the cyber training
of military personnel when they retire.
The bill would allow the Guard to further develop cyber capabilities
to address existing and potential future surge needs. This bill would
also allow the National Guard to support existing DHS, DOJ, Secret
Service, and State and Local cyber efforts with their unique
capabilities and expertise, as well as leverage their private sector
expertise.
The Guard members under this bill would add to existing Guard end
strengths. The funding to support this mission is intended to be born
by the active duty, but not incur any new budgetary authority.
The bill would also authorize Governors to ask their National Guard
to help train State and Local Law Enforcement and other Cyber
Responders in cyber security, and help them develop sound best
practices that allow more cohesive interaction with Federal-level
responders.
The bill requires cyber Guard Members to receive the same level of
training that is available to the Active Duty cyber personnel, to the
extent practicable. The bill would require the Secretary of Defense to
report on such training.
The bill would also require the Secretary of Defense to report to
committees of jurisdiction on the following ways to attract and retain
more cyber warriors.
The bill requires description and assessment of various mechanisms to
recruit and retain members of the regular and reserve components of the
Armed Forces; an assessment of the use virtual and/or short term
deployments in case of cyber incident responses; and a description of
the training requirements and physical demands in the cyber
specialties.
______
By Mr. WYDEN:
S. 659. A bill to reauthorize the Reclamation States Emergency
Drought Relief Act of 1991, and for other purposes; to the Committee on
Energy and Natural Resources.
Mr. WYDEN. Mr. President, I would like to speak for a few minutes
today on the importance of reauthorizing the Reclamation States
Emergency Drought Relief Act.
This past year was the warmest on record and we are witnessing more
climate-driven events, including drought. Over 60 percent of the nation
experienced some form of drought during 2012. In my home State of
Oregon, serious drought is likely to persist in the southeastern part
of the State.
Last summer marked the Nation's most widespread drought in 60 years,
stretching across 29 States and threatening crop production and power
plant operations. The levels in many lakes and reservoirs have declined
putting at risk a crucial part of our Nation's drinking water supplies.
The impacts of the drought are profound and the outlook for this summer
isn't any better.
The Drought Act was originally reported out of the Senate Energy and
Natural Resources Committee in 1992. Since then it has provided over
$74 million in drought assistance activities to States across the West.
It not only authorizes the Bureau of Reclamation to undertake
construction, management and conservation activities that will minimize
and mitigate the losses and damages resulting from drought conditions,
but it also gives specific considerations to the needs of fish and
wildlife.
My proposed legislation would reauthorize the Reclamation States
Emergency Drought Relief Act, which expired last year, for an
additional 5 years. Given the drought last year and the forecast for
prolonged drought in parts of this country, it is reasonable to raise
the authorization level by $20 million, which this legislation does. As
one indication of the associated costs of drought, in 2012 the drought
caused an estimated $50 billion in damages.
In closing, I look forward to working with this administration and my
colleagues in the Senate to reauthorize this vital program and to
ensure the Bureau of Reclamation has the resources it needs to
adequately address the drought conditions.
______
By Mrs. FEINSTEIN:
S. 663. A bill to provide for the inclusion of the State of
California as a separate Federal milk marketing order upon the petition
and approval of California dairy producers of such inclusion; to the
Committee on Agriculture, Nutrition, and Forestry.
Mrs. FEINSTEIN. Mr. President, I rise today, on behalf of myself and
Senator Boxer, to introduce the California Federal Milk Marketing Order
Act. This legislation will allow California's dairy industry to operate
on a system that is consistent with the industry in other states.
The bill is as simple and straight forward as it gets--it's only two
paragraphs long.
The first paragraph allows the California dairy producers to create
their own ``regional order'' within the existing Federal Milk Marketing
Order Program, if they elect to do so.
If California dairy farmers do elect to join the Federal order, the
second paragraph allows California to maintain its existing ``quota
system,'' which I will explain in a moment.
[[Page S2338]]
It is important for me to say up front how non-controversial this
legislation should be.
The legislation has broad bi-partisan support among the diverse
California congressional delegation.
The bill would likely add no new burden to the Federal taxpayer.
Congress enacted an identical provision in 1996.
But the provision expired along with the 1996 Farm Bill. So
essentially, the legislation I am introducing today is simply the
reauthorization of that no-cost provision.
More importantly though, this legislation can help the struggling
dairy industry. Prices have dipped back to near historic lows, and
farmers are often milking their cows at or below the cost of
production.
In California, this has resulted in a drastic consolidation of the
industry. Forty-eight dairies went out of business in 2011. Eleven left
the business in 2010. And 100 more left the business in 2009.
With only 1,668 dairies left in the state in 2011, those losses
represent more than a 10 percent contraction in just three years.
But this legislation has the potential to begin the turnaround for
California by bringing the milk pricing formulas in line with the rest
of the nation.
To explain how the turnaround could occur, I'd like to start with the
basics.
USDA operates 10 regional Federal Milk Marketing Orders for dairy
farmers in 42 States. The order sets up a system to pay farmers a set
price for their milk, even though food manufacturers pay different
prices based on how the milk is used. For instance, farmers in the
Federal order receive the same price for milk that is put in a carton
for drinking as milk that is converted into dry milk powder. This is
true even though these products sell for significantly different prices
at the grocery store.
However, California, the Nation's largest milk producing State,
operates under a different system. The State elected to run its own
milk marketing order, so California farmers are paid different values
for their products, and they are playing by different rules.
One unique characteristic of the California Marketing Order, and the
reason for this legislation, is the system known as ``quota,'' which I
mentioned earlier.
Producers who own a portion of the ``quota'' receive a premium for
their milk, roughly five percent more than other producers. Rights to
quota can be bought or sold on the open market, and economists estimate
that the combined value associated with quota is roughly $900 million.
It is this $900 million value that the California Federal Milk
Marketing Order Act authorizes to be converted into a Federal order.
Inclusion of the quota will not come at taxpayer expense. Producers
who own quota receive a higher price for their milk, but the additional
payment is offset by a marginal increase in prices paid by dairy
processors.
I know that dairy support programs can be convoluted and
controversial. But I want to make sure that my colleagues know that
this legislation is not.
The bill simply gives California dairy farmers the option of entering
into the Federal order, at the time of their choosing. It does not
mandate a thing.
I hope my colleagues will see the sense in this legislation and join
me in supporting our dairy farmers by enacting this bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 663
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 ``California Milk Marketing
Order Act''.
SEC. 2. INCLUSION OF CALIFORNIA AS SEPARATE MILK MARKETING
ORDER.
(a) Inclusion Authorized.--Upon the petition and approval
of California dairy producers in the manner provided in
section 8c of the Agricultural Adjustment Act (7 U.S.C.
608c), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, the Secretary of Agriculture
shall designate the State of California as a separate Federal
milk marketing order.
(b) Special Considerations.--If designated under subsection
(a), the order covering California shall have the right to
reblend and distribute order receipts to recognize quota
value.
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