[House Report 106-324]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-324

======================================================================



 
  PROVIDING FOR THE CONSIDERATION OF H.R. 1402, CONSOLIDATION OF MILK 
                            MARKETING ORDERS

                                _______
                                

 September 15, 1999.--Referred to the House Calendar and ordered to be 
                                printed

                                _______


   Mr. Reynolds, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 294]

    The Committee on Rules, having had under consideration 
House Resolution 294, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                  SUMMARY OF PROVISIONS OF RESOLUTION

    The resolution provides for the consideration of H.R. 1402, 
the ``Consolidation of Milk Marketing Orders,'' under a 
structured rule. The rule provides one hour of general debate 
divided equally between the chairman and ranking minority 
member of the Committee on Agriculture.
    The rule waives clause 3 of rule XIII (requiring the 
inclusion in the report of a CBO cost estimate and a statement 
on certain budget matters if the measure includes new budget or 
entitlement authority) and section 308(a) of the Congressional 
Budget Act (requiring a Congressional Budget Office cost 
estimate in the committee report on any legislation containing 
new budget authority) against consideration of the bill.
    The rule makes in order the Committee on Agriculture 
amendment in the nature of a substitute as an original bill for 
purpose of amendment, modified by the amendments printed in 
part A of this report. The amendment in the nature of a 
substitute shall be considered as read.
    The rule also waives clause 7 of rule XVI (prohibiting 
nongermane amendments) against the amendment in the nature of a 
substitute.
    Only those amendments printed in part B of this report are 
made in order. The amendments made in order may be offered only 
in the order printed in the report, may be offered only by a 
Member designated in the report, shall be considered as read, 
shall be debatable for the time specified in the report equally 
divided and controlled by the proponent and an opponent, shall 
not be subject to amendment except as specified in this report, 
and shall not be subject to a demand for division of the 
question in the House or in the Committee of the Whole. All 
points of order against the amendments printed in the report 
are waived.
    The rule permits for the Chairman of the Committee of the 
Whole to postpone votes during consideration of the bill, and 
to reduce voting time to five minutes on a postponed question 
if the vote follows a fifteen minute vote. Finally, the rule 
provides for one motion to recommit, with or without 
instructions.

amendments made in order under the rule for h.r. 1402, consolidation of 
                         milk marketing orders

Part A--Amendments modifying the amendment in the nature of a 
        substitute

    Combest: The amendment contains 3 parts. Part 1 adds two 
new subsections to Section 1 of H.R. 1402. New subsection 
(c)(1) mandates that the Secretary should implement the 
amendments made in Section 1 of H.R. 1402 as soon as 
practicable. This section waives specific rulemaking and 
referendum requirements of the Agricultural Adjustment Act with 
regard to implementation of Section 1 of H.R. 1402. In 
addition, this amendment waives notice and comment requirements 
pursuant to Department policy and the Paperwork Reduction Act.
    New subsection (c)(2) concerns provisions of the final rule 
which require USDA to publish a prospective pricing series 
regarding class I milk on the last Friday before the 23rd day 
of the previous month. Should an announcement be made by the 
USDA prior to enactment of this legislation, this amendment 
would allow the previously announced pricing series to remain 
in effect for the month in which it was intended, and any 
subsequent announcements would then be required to conform with 
Section 1 of the underlying Act.
    Part 2 adds the same new paragraphs in part 1 to Section 
2(c) of H.R. 1402 in order to waive rulemaking, referendum, and 
Paperwork Reduction Act requirements for the adjustments to the 
manufactured product formula pricing provisions. Part 3 (page 
4, lines 6 through 8 of the amendment) repeals the Recourse 
Loan Program for Commercial Processors of Dairy Products by 
deleting section 142 of the Agricultural Market Transition Act 
due to budgetary constraints.
    Mandates that the Secretary should implement the amendments 
in Section 1 of the bill which waives specific rulemaking and 
referendum requirements of the Agricultural Adjustment Act.

Part B--Amendments made in order

    1. Green (WI)/Ryan (WI): Amends Section 1 to require that 
the USDA conduct a national referendum on Secretary Glickman's 
proposed milk marketing reforms. Option 1A and 1B would be the 
only choices on the ballot. This amendment would require the 
referendum to take place with a single national vote, excluding 
California. (20 minutes)
    2. Stenholm/Pombo: Modifies the forward pricing provisions 
contained in the reported bill by sunsetting the Forward Price 
Contracting Program as of December 31, 2004, and requiring a 
report to Congress regarding its operation, and by limiting the 
scope of the program to apply only to milk other than milk used 
for Class I (beverage) purposes. (40 minutes)
    3. Dooley: Amends Stenholm/Pombo: Strikes the Class I 
limitation of the Forward Price Contracting Program. (10 
minutes)
    4. Gutknecht/Ryan (WI)/Green (WI): Eliminates a loophole in 
the law that allows cooperatives in non-competitive markets to 
pay producers mail box prices less than the federal milk 
marketing order blend minimum prices. (40 minutes)
    5. Kind: Allows the pooling of Class 1 receipts. (20 
minutes)
    6. Ryan (WI)/Green (WI): Mandates that the Class I 
differential may not exceed $2.27 in any order region in the 
country. (20 minutes)
    7. Manzullo/Dooley: Outlines of the role of the U.S. Trade 
Representative in implementing provisions of the bill. 
Specifically, the USTR would ensure that the bill presents no 
risk of interference with our nation's international trade 
policy objectives and under that agreement, a determination 
must be made at least once a year by the USTR, and any negative 
assessment made by the USTR in regard to any international 
trade negotiations to which the U.S. is a party would nullify 
the provisions of the bill. (40 minutes)
    8. Boehner/Obey: Terminates the Federal Milk Marketing 
Order system on Janaury 1, 2001. (60 minutes)

                                 PART A


     Text of Amendments Modifying the Amendment in the Nature of a 
                               Substitute

  Page 4, after line 2, insert the following new subsection:
  (c) Implementation of Requirement.--
          (1) Expedited implementation.--The Secretary of 
        Agriculture shall comply with subsection (a) as soon as 
        practicable after the date of the enactment of this 
        Act. The requirement to use the Option 1A described in 
        such subsection shall not be subject to--
                  (A) the notice and hearing requirements of 
                section 8c(3) of the Agricultural Adjustment 
                Act (7 U.S.C. 608c(3)), reenacted with 
                amendments by the Agricultural Marketing 
                Agreement Act of 1937, or the notice and 
                comment provisions of section 553 of title 5, 
                United States Code;
                  (B) a referendum conducted by the Secretary 
                of Agriculture pursuant to subsections (17) or 
                (19) of such section 8c;
                  (C) the Statement of Policy of the Secretary 
                of Agriculture effective July 24, 1971 (36 Fed. 
                Reg. 13804), relating to notices of proposed 
                rulemaking and public participation in 
                rulemaking; and
                  (D) chapter 35 of title 44, United States 
                Code (commonly known as the ``Paperwork 
                Reduction Act'').
          (2) Effect on minimum milk prices.--If the Secretary 
        of Agriculture announces minimum prices for milk under 
        Federal milk marketing orders pursuant to section 
        1000.50 of title 7, Code of Federal Regulations, before 
        the date on which the Secretary first complies with 
        subsection (a), the minimum prices so announced before 
        that date shall be the only applicable minimum prices 
        under Federal milk marketing orders for the months for 
        which the prices have been announced.
  Page 6, line 17, insert before ``Pending'' the following:
          (1) Modification of allowance.--
  Page 6, after line 24, insert the following new paragraphs:
          (2) Expedited implementation.--The Secretary of 
        Agriculture shall implement the modified formula as 
        soon as practicable after the date of the enactment of 
        this Act. Implementation and use of the modified 
        formula shall not be subject to--
                  (A) the notice and hearing requirements of 
                section 8c(3) of the Agricultural Adjustment 
                Act (7 U.S.C. 608c(3)), reenacted with 
                amendments by the Agricultural Marketing 
                Agreement Act of 1937, or the notice and 
                comment provisions of section 553 of title 5, 
                United States Code;
                  (B) a referendum conducted by the Secretary 
                of Agriculture pursuant to subsections (17) or 
                (19) of such section 8c;
                  (C) the Statement of Policy of the Secretary 
                of Agriculture effective July 24, 1971 (36 Fed. 
                Reg. 13804), relating to notices of proposed 
                rulemaking and public participation in 
                rulemaking; and
                  (D) chapter 35 of title 44, United States 
                Code (commonly known as the ``Paperwork 
                Reduction Act'').
          (3) Effect on minimum milk prices.--If the Secretary 
        of Agriculture announces minimum prices for milk under 
        Federal milk marketing orders pursuant to section 
        1000.50 of title 7, Code of Federal Regulations, before 
        the date on which the Secretary first implements the 
        modified formula, the minimum prices so announced 
        before that date shall be the only applicable minimum 
        prices under Federal milk marketing orders for the 
        months for which the prices have been announced.
  Page 7, strike lines 10 through 13, and insert the following:
  (c) Elimination of Recourse Loan Program for Processors.--
Section 142 of the Agricultural Market Transition Act (7 U.S.C. 
7252) is repealed.

                                 PART B


  An Amendment To Be Offered by Representative Green of Wisconsin, or 
   Representative Ryan of Wisconsin, or a Designee, Debatable for 20 
                                minutes

  Page 3, beginning line 3, strike section 1 and insert the 
following new section:

SECTION 1. REQUIREMENTS APPLICABLE TO REFERENDA REGARDING FEDERAL MILK 
                    MARKETING ORDERS.

  (a) National Basis of Referendum.--Section 8c(19) of the 
Agricultural Adjustment Act (7 U.S.C. 608c(19)), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, 
is amended by adding at the end the following new sentence: 
``In the case of the issuance or amendment of an order relating 
to milk or its products, the referendum required by this 
subsection shall be conducted on a nationwide basis among all 
milk producers operating in areas covered by Federal milk 
marketing orders and the results of the referendum shall be 
tallied on a nationwide basis.''.
  (b) Termination of Bloc Voting.--Section 8c(12) of the 
Agricultural Adjustment Act (7 U.S.C. 608c(12)), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, 
is amended by adding at the end the following new sentence: 
``In the case of a referendum relating to milk or its products, 
a cooperative association of producers may not vote in the 
referendum on behalf of milk producers who are members of, 
stockholders in, or under contract with, such cooperative 
association of producers.''.
  (c) Application of Amendments.--The amendments made by 
subsections (a) and (b) shall apply with respect to the 
referendum required by subsection (d) and any other referendum 
relating to milk or its products commenced under section 8c(19) 
of the Agricultural Adjustment Act (7 U.S.C. 608c(19)), 
reenacted with amendments by the Agricultural Marketing 
Agreement Act of 1937, on or after the date of the enactment of 
this Act.
  (d) Referendum on Use of Option 1A or Option 1B.--
          (1) Referendum required.--As soon as practicable 
        after the date of the enactment of this Act, the 
        Secretary of Agriculture shall conduct a referendum 
        among dairy producers whose operations are located 
        within areas covered by Federal milk marketing orders 
        to determine whether producers would prefer that the 
        Secretary price fluid or Class I milk under the orders 
        using the Class I price differentials identified as 
        Option 1A or Option 1B in the proposed rule published 
        in the Federal Register on January 30, 1998 (63 Fed. 
        Reg. 4802, 4809), including such corrections and 
        modifications to such options made by the Secretary 
        through April 2, 1999.
          (2) Implementation of results.--The Secretary shall 
        implement the favored option in the referendum as part 
        of each Federal milk marketing order (other than any 
        order covering the State of California).
                              ----------                              


 2. An Amendment To Be Offered by Representative Stenholm of Texas, or 
  Representative Pombo of California, or a Designee, Debatable for 40 
                                Minutes

  Page 7, strike line 19 and all that follows through line 10 
on page 8, and insert the following:

``SEC. 23. DAIRY FORWARD PRICING PILOT PROGRAM.

  ``(a) Pilot Program Required.--Not later than 90 days after 
the date of enactment of this section, the Secretary of 
Agriculture shall establish a temporary pilot program under 
which milk producers and cooperatives are authorized to 
voluntarily enter into forward price contracts with milk 
handlers.
  ``(b) Minimum Milk Price Requirements.--Payments made by milk 
handlers to milk producers and cooperatives, and prices 
received by milk producers and cooperatives, under the forward 
contracts shall be deemed to satisfy--
          ``(1) all regulated minimum milk price requirements 
        of paragraphs (B) and (F) of subsection (5) of section 
        8c; and
          ``(2) the requirement of paragraph (C) of such 
        subsection regarding total payments by each handler.
  ``(c) Milk Covered by Pilot Program.--The pilot program shall 
apply only with respect to the marketing of federally regulated 
milk that--
          ``(1) is not classified as Class I milk or otherwise 
        intended for fluid use; and
          ``(2) is in the current of interstate or foreign 
        commerce or directly burdens, obstructs, or affects 
        interstate or foreign commerce in federally regulated 
        milk.
  ``(d) Duration.--The authority of the Secretary of 
Agriculture to carry out the pilot program shall terminate on 
December 31, 2004. No forward price contract entered into under 
the program may extend beyond that date.
  ``(e) Study and Report on Effect of Pilot Program.--
          ``(1) Study.--The Secretary of Agriculture shall 
        conduct a study on forward contracting between milk 
        producers and cooperatives and milk handlers to 
        determine the impact on milk prices paid to producers 
        in the United States. To obtain information for the 
        study, the Secretary may use the authorities available 
        to the Secretary under section 8d, subject to the 
        confidentiality requirements of subsection (2) of such 
        section.
          ``(2) Report.--Not later than April 30, 2002, the 
        Secretary shall submit to the Committee on Agriculture, 
        Nutrition and Forestry of the Senate and the Committee 
        on Agriculture of the House of Representatives a report 
        containing the results of the study.''.
                              ----------                              


  3. An Amendment to the Stenholm of Texas Amendment To Be Offered by 
 Representative Dooley of California, or a Designee, Debatable for 10 
                                Minutes

    On page 2 of the amendment, beginning line 3, strike 
``that--'' and all that follows through ``is in'' on line 6 and 
insert ``that is in''.
                              ----------                              


4. An Amendment To Be Offered by Representative Gutknecht of Minnesota, 
 or Representative Ryan of Wisconsin, or a Designee, Debatable for 40 
                                Minutes

  Add at the end the following new section:

SEC. ____. LIMITATION ON BLENDING OF PROCEEDS FROM THE COLLECTIVE SALES 
                    OR MARKETING OF MILK AND MILK PRODUCTS.

  Notwithstanding section 8c(5)(F) of the Agricultural 
Adjustment Act (7 U.S.C. 608c(5)(F)), reenacted with amendments 
by the Agricultural Marketing Agreement Act of 1937, or the 
consolidation of Federal milk marketing orders pursuant to 
section 143 of the Federal Agricultural Improvement and Reform 
Act of 1996 (7 U.S.C. 7253), effective beginning on the date of 
the enactment of this Act, the Secretary of Agriculture shall 
prohibit a cooperative marketing association referred to in 
such section 8c(5)(F) from blending the net proceeds 
attributable to Federal minimum prices of all sales or 
marketings of milk and its products in all markets in all use 
classifications in order to make distributions in accordance 
with the contract between the association and its producers. 
The prohibition does not prohibit the blending of market-based 
premiums.
                              ----------                                



5. An Amendment To Be Offered by Representative Kind of Wisconsin, or a 
                   Designee, Debatable for 20 Minutes

    Add at the end the following new section:

SEC. ____. NATIONAL POOLING OF CLASS I RECEIPTS UNDER FEDERAL MILK 
                    MARKETING ORDERS.

    Notwithstanding the terms of Federal milk marketing orders 
issued under 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 provide for the national pooling of receipts from fluid 
or Class I milk.
                              ----------                              


 6. An Amendment To Be Offered by Representative Ryan of Wisconsin, or 
  Representative Green of Wisconsin, or a Designee, Debatable for 20 
                                Minutes

    Add at the end the following new section:

SEC. ____. MAXIMUM CLASS I MILK PRICE DIFFERENTIAL.

    Notwithstanding the consolidation and reform of Federal 
milk marketing orders issued under section 8c of the 
Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, 
effective October 1, 1999, the Class I milk price differential 
for all Federal milk marketing orders may not exceed $2.27 per 
hundredweight.
                              ----------                              


 7. An Amendment To Be Offered by Representative Manzullo of Illinois, 
or Representative Dooley of California, or a Designee, Debatable for 40 
                                Minutes

  Add at the end the following new section:

SEC. ____. CONDITIONAL IMPLEMENTATION OF ACT.

  (a) Effective Date; Role of United States Trade 
Representative.--This Act and the amendments made by this Act 
shall take effect on the date of the enactment of this Act, 
except that the Secretary of Agriculture may not carry out this 
Act or implement any amendment made by this Act unless and 
until the United States Trade Representative notifies the 
Secretary that this Act and the amendments made by this Act 
present no risk of interference with any international trade 
negotiation to which the United States is currently a party or 
with the achievement of the trade policy objectives of the 
United States.
  (b) Continuing Assessment of Effect on Trade.--If this Act 
and the amendments made by this Act are implemented as provided 
in subsection (a), the United States Trade Representative shall 
periodically assess the effect of the implementation of this 
Act and the amendments made by this Act on international trade 
negotiations to which the United States is a party and the 
trade policy objectives of the United States.
  (c) Termination.--If, as a result of an assessment under 
subsection (b), the United States Trade Representative 
determines that this Act or any amendment made by this Act 
presents a risk of interference with any international trade 
negotiation to which the United States is a party or with the 
achievement of the trade policy objectives of the United 
States, the United States Trade Representative shall notify the 
Secretary of Agriculture of the determination. Upon receipt of 
the notification, the Secretary shall cease to carry out this 
Act and amendments made by this Act.
                              ----------                              


  8. An Amendment To Be Offered by Representative Boehner of Ohio, or 
   Representative Obey of Wisconsin, or a Designee, Debatable for 60 
                                Minutes

  Strike sections 1 and 2 and insert the following new section:

SECTION 1. TERMINATION OF MILK MARKETING ORDERS ON JANUARY 1, 2001.

  (a) Termination.--Effective January 1, 2001, section 8c of 
the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, 
is amended by striking paragraphs (5) and (18) relating to milk 
and its products. On that date, the Secretary of Agriculture 
shall terminate all existing Federal milk marketing orders 
issued under such section.
  (b) Prohibition on Subsequent Orders Regarding Milk.--Section 
8c(2) of the Agricultural Adjustment Act (7 U.S.C. 608c(2)), 
reenacted with amendments by the Agricultural Marketing 
Agreement Act of 1937, is amended--
          (1) by striking ``Milk, fruits'' and inserting 
        ``Fruits''; and
          (2) by inserting ``milk,'' after ``honey,'' in 
        subparagraph (B).
  (c) Conforming Amendments.--(1) Section 2(3) of the 
Agricultural Adjustment Act (7 U.S.C. 602(3)), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, 
is amended by striking ``, other than milk and its products,''.
  (2) Section 8c of such Act (7 U.S.C. 608c) is amended--
          (A) in paragraph (6), by striking ``, other than milk 
        and its products,'';
          (B) in paragraph (7)(B), by striking ``(except for 
        milk and cream to be sold for consumption in fluid 
        form)'';
          (C) in paragraph (11)(B), by striking ``Except in the 
        case of milk and its products, orders'' and inserting 
        ``Orders'';
          (D) in paragraph (13)(A), by striking ``, except to a 
        retailer in his capacity as a retailer of milk and its 
        products''; and
          (E) in paragraph (17), by striking the second 
        proviso, which relates to milk orders.
  (3) Section 8d(2) of such Act (7 U.S.C. 608d(2)) is amended 
by striking the second sentence, which relates to information 
from milk handlers.
  (4) Section 10(b)(2) of such Act (7 U.S.C. 610(b)) is 
amended--
          (A) by striking clause (i);
          (B) by redesignating clauses (ii) and (iii) as 
        clauses (i) and (ii), respectively; and
          (C) in clause (i) (as so redesignated), by striking 
        ``other commodity'' in the first sentence and inserting 
        ``commodity''.
  (5) Section 11 of such Act (7 U.S.C. 611) is amended by 
striking ``and milk, and its products,''.
  (6) Section 715 of the Agriculture, Rural Development, Food 
and Drug Administration, and Related Agencies Appropriations 
Act, 1994 (Public Law 103-111; 107 Stat. 1079; 7 U.S.C. 608d 
note), is amended by striking the third proviso, which relates 
to information from milk handlers.
  (d) Effective Date.--The amendments made by subsections (b) 
and (c) shall take effect on January 1, 2001.

                                  
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