PRIOR PRINTER'S NO. 378 PRINTER'S NO. 640
No. 365 Session of 1999
INTRODUCED BY MADIGAN, SLOCUM, HELFRICK, KUKOVICH, COSTA, ROBBINS, MOWERY, EARLL, KASUNIC, MUSTO, GERLACH, BOSCOLA, PUNT, WHITE, MELLOW, SCHWARTZ, STOUT, THOMPSON, WOZNIAK, HART, BELAN, JUBELIRER, BRIGHTBILL, LEMMOND, LAVALLE, HOLL, CONTI, DENT AND CORMAN, FEBRUARY 11, 1999
SENATOR SLOCUM, AGRICULTURE AND RURAL AFFAIRS, AS AMENDED, MARCH 17, 1999
AN ACT 1 Providing for the Northeast Interstate Dairy Compact and for its 2 implementation. 3 The General Assembly of the Commonwealth of Pennsylvania 4 hereby enacts as follows: 5 Section 1. Short title. 6 This act shall be known and may be cited as the Northeast 7 Interstate Dairy Compact Law. 8 Section 2. Conditions imposed by Congress. 9 (a) General rule.--The compact which is set forth and 10 adopted under section 3 shall be subject to the conditions 11 imposed by Congress in section 147 of Title 1 of the Federal 12 Agriculture Improvement and Reform Act of 1996 (Public Law 104- 13 127, 110 Stat. 888), as described in this section. 14 (b) Finding of compelling public interest.--Based upon a 15 finding by the United States Secretary of Agriculture of a 16 compelling public interest in the compact region, the Secretary
1 of Agriculture grants the states that have ratified the 2 Northeast Interstate Dairy Compact the authority to implement 3 the Northeast Interstate Dairy Compact. 4 (c) Limitation on manufacturing price.--The Northeast 5 Interstate Dairy Compact Commissioner shall not regulate Class 6 II, Class III or Class III-A milk used for manufacturing 7 purposes or any other milk, other than Class I (fluid) milk, as 8 defined by a Federal milk marketing order issued under section 9 8c of the Agricultural Adjustment Act (50 Stat. 246 7 U.S.C. 10 608c). 11 (d) Duration.--Consent for the Northeast Interstate Dairy 12 Compact shall terminate concurrently, with the implementation by 13 the United States Secretary of Agriculture of the dairy pricing 14 and Federal milk marketing order consolidation and reforms. 15 (e) Additional states.--Delaware, New Jersey, New York, 16 Pennsylvania, Maryland and Virginia are the only additional 17 states that may join the Northeast Interstate Dairy Compact, 18 individually or otherwise, if upon entry the state is contiguous 19 to a participating state and if the Congress consents to the 20 entry of the state into the compact. 21 (f) Compensation of Commodity Credit Corporation.--Before 22 the end of each fiscal year that a compact price regulation is 23 in effect, the commission shall compensate the Commodity Credit 24 Corporation for the cost of any purchases of milk and milk 25 products by the corporation that result from the projected rate 26 of increase in milk production for the fiscal year within the 27 compact region in excess of the projected national average rate 28 of the increase in milk production, as determined by the 29 Secretary of Agriculture. At the request of the commission, the 30 administrator of the applicable Federal milk marketing order 19990S0365B0640 - 2 -
1 issued under section 8c of the Agricultural Adjustment Act shall 2 provide technical assistance to the commission and be 3 compensated for the assistance. 4 (g) Further conditions.--The Northeast Interstate Dairy 5 Compact Commission shall not prohibit or in any way limit the 6 marketing in the compact region of any milk or milk product 7 produced in any other production area in the United States. The 8 commission shall respect and abide by the ongoing procedures 9 between Federal milk marketing orders with respect to the 10 sharing of proceeds from sales within the compact region of bulk 11 milk, packaged milk or producer milk originating from outside of 12 the compact region. The commission shall not use compensatory 13 payments under subdivision 6 of section 10 of this compact as a 14 barrier to the entry of milk into the compact region or for any 15 other purpose. Establishment of a compact over-order price in 16 itself shall not be considered a compensatory payment or a 17 limitation or prohibition on the marketing of milk. 18 Section 3. Northeast Interstate Dairy Compact. 19 The Northeast Interstate Dairy Compact as set forth in this 20 section is hereby adopted and entered into with all jurisdiction 21 joining therein. The compact is as follows: 22 NORTHEAST INTERSTATE DAIRY COMPACT 23 Article I. Statement of Purpose, Findings and 24 Declaration of Policy 25 Section 1. Statement of purpose, findings and 26 declaration of policy. 27 Article II. Definitions and Rules of Construction 28 Section 2. Definitions. 29 Section 3. Rules of construction. 30 Article III. Commission Established 19990S0365B0640 - 3 -
1 Section 4. Commission established. 2 Section 5. Voting requirements. 3 Section 6. Administration and management. 4 Section 7. Rulemaking power. 5 Article IV. Powers of the Commission 6 Section 8. Powers to promote regulatory uniformity, 7 simplicity and interstate cooperation. 8 Section 9. Equitable farm prices. 9 Section 10. Optional provisions for pricing order. 10 Article V. Rulemaking Procedure 11 Section 11. Rulemaking procedure. 12 Section 12. Findings and referendum. 13 Section 13. Producer referendum. 14 Section 14. Termination of over-order price or 15 marketing order. 16 Article VI. Enforcement 17 Section 15. Records, reports and access to premises. 18 Section 16. Subpoena, hearings and judicial review. 19 Section 17. Enforcement with respect to handlers. 20 Article VII. Finance 21 Section 18. Finance of start-up and regular costs. 22 Section 19. Audit and accounts. 23 Article VIII. Entry Into Force; Additional Members 24 and Withdrawal 25 Section 20. Entry into force, additional members. 26 Section 21. Withdrawal from compact. 27 Section 22. Severability. 28 Section 23. Reservation of rights. 29 ARTICLE I 30 STATEMENT OF PURPOSE, FINDINGS AND DECLARATION OF POLICY 19990S0365B0640 - 4 -
1 Section 1. Statement of purpose, findings and declaration of 2 policy. 3 (1) The purpose of this compact is to recognize by 4 constitutional prerequisite the interstate character of the 5 Northeast Dairy Industry and to form an interstate commission 6 for the northeast region. The mission of the commission is to 7 assist the participating states to modify existing laws and 8 regulations which add to the cost of moving milk among the 9 states or which impede the free flow of milk in the Northeast, 10 to encourage a more efficient assembly and distribution system 11 for the benefit of producers and consumers, to encourage more 12 participation by dairy farmers in cooperative organizations, to 13 take such steps as are necessary to assure the continued 14 viability of dairy farming in the northeast and to assure 15 consumers of an adequate supply of pure and wholesome Class I 16 milk. 17 (2) The participating states find and declare that the 18 industry is the paramount agricultural activity of the northeast 19 in a region comprising the New England States and the Middle 20 Atlantic States and is a business affecting the public health 21 and welfare of the inhabitants of the northeast; that the 22 production and marketing of milk of the dairy farms of states of 23 the northeast region is of vast economic importance to the 24 region; that compliance with reasonable and consistent 25 requirements for the production and marketing of a safe and high 26 quality milk supply is a matter of great importance both to the 27 welfare of dairy farmers of the northeast and the health and 28 welfare of the consumers of milk and dairy products; that the 29 production conditions in the northeast, including the climate, 30 topography and soils are about the same but marketing conditions 19990S0365B0640 - 5 -
1 are unique as compared to the remainder of the United States and 2 that all the milk in the northeast is produced for fluid markets 3 under conditions highly favorable to a pronounced seasonality of 4 production. The natural marketing area, under modern day 5 conditions of production and marketing, lies within the 6 boundaries of many different northeastern states with widely 7 different laws and regulations which govern the economic climate 8 and sanitary conditions under which milk and dairy products are 9 marketed. Regulatory barriers have contributed significantly to 10 the cost of assembly, processing and distribution of milk with 11 an economic loss to farmers and added costs to consumers. The 12 marketing system for milk and dairy products in the northeast 13 has been and still is fragmented. Assembly, administration, 14 operating and sales costs are excessively high. In some areas 15 costs to consumers may be excessively high. Cooperative 16 membership in this region is much below membership levels in 17 most other regions across the country. A common marketing area 18 in the northeast is necessary if there is to be a prosperous 19 dairy industry and it is in the best interests of consumers. The 20 historical development of the dairy industry from a local 21 business to a regional enterprise has led to a lack of 22 uniformity of laws and regulations involving inspection of farms 23 and plants, sanitary codes, labeling on dairy products and their 24 imitations, standards for dairy products, licensing of milk 25 dealers, economic controls, fair trade laws and the terms of 26 Federal and State milk marketing orders. The lack of uniformity 27 of laws and regulations has interfered with the efficient flow 28 of milk and milk products, reduced the efficiency of 29 distribution, raised the price of milk and dairy products to 30 consumers, weakened the bargaining power of cooperatives and 19990S0365B0640 - 6 -
1 threatened an adequate supply of pure and wholesome milk for 2 consumers. 3 (3) The Federal milk marketing orders promulgated under the 4 Agricultural Marketing Agreement Act of 1937 establish only 5 minimum prices to farmers. The Agricultural Marketing Agreement 6 Act of 1937 does not preempt the power of the states to 7 establish prices above the level established under Federal 8 marketing orders. 9 (4) The need to balance the Federal budget has required 10 drastic reduction in the Federal support price for milk. The 11 production of milk in the northeast has decreased significantly 12 in response to lower prices and to the Federal Dairy Termination 13 Program, but milk production has nevertheless continued to 14 increase in other regions of the country. As a result, there 15 remains a surplus of milk nationally which continues to trigger 16 reduction in the Federal Price Support Program. 17 (5) As a result of declining farm prices, a seasonal 18 shortage of milk has developed in the northeast. Dairy farmers 19 in the region face a critical economic crisis if the price 20 received for milk is not increased. Ultimately, this 21 agricultural crisis will have a depressing effect upon the 22 general economy of the northeast and result in a serious 23 shortage of pure and wholesome fluid milk for consumers 24 throughout the northeast. If current efforts by dairy farmers to 25 obtain a higher price for fluid milk do not succeed, emergency 26 conditions will require the existence of a readily available 27 mechanism to establish higher Class I prices throughout the 28 region. 29 (6) This compact is entered in order to enable the signatory 30 states to act together to achieve uniformity of laws and 19990S0365B0640 - 7 -
1 regulations governing the production and marketing of milk in 2 the northeast, to develop consistent policies and procedures, to 3 eliminate unnecessary duplication of licensing, producer 4 security, reports, audits and inspection, and to establish, 5 after examinations and investigations, what prices, terms and 6 conditions relative to milk in the localities and markets within 7 the northeast will be most beneficial to the public interest and 8 will best promote prosperity in the dairy industry. 9 (7) The failure of dairy farmers to receive a reasonable 10 return for their labor and investment will seriously impair 11 their ability to produce, under proper sanitary conditions, a 12 supply of pure and wholesome milk which is adequate for the 13 needs of the inhabitants of the participating states, as well as 14 negatively impact the general economy of both participating 15 states and the associated local government subdivisions. The 16 regulation of the dairy industry as herein provided is essential 17 for the public interest and such oversight shall be deemed to be 18 an exercise of the police power of the participating states for 19 the protection of the public safety, welfare, prosperity, health 20 and living conditions of the people thereof. 21 ARTICLE II 22 DEFINITIONS AND RULES OF CONSTRUCTION 23 Section 2. Definitions. 24 For the purposes of this compact and of any supplemental or 25 concurring legislation enacted pursuant thereto, except as may 26 be otherwise required by the context: 27 "Class I milk." Milk disposed of in fluid form or as a fluid 28 milk product, subject to further definition in accordance with 29 the principles expressed in subdivision 2 of section 3 of this 30 compact. 19990S0365B0640 - 8 -
1 "Commission." The commission established by this compact. 2 "Commission marketing order." Regulations adopted by the 3 commission pursuant to sections 9 and 10 of this compact in 4 place of a terminated Federal marketing order or State dairy 5 regulation. Such order may apply throughout the region or in any 6 part or parts thereof as defined in the regulations of the 7 commission. Such order may establish minimum prices for any or 8 all classes of milk. 9 "Compact." This interstate compact. 10 "Compact over-order price." A minimum price required to be 11 paid to producers for Class I milk established by the commission 12 in regulations adopted pursuant to sections 9 and 10 of this 13 compact, which is above the price established in Federal 14 marketing orders or by State farm price regulation in the 15 regulated area. Such price may apply throughout the region or in 16 any part or parts thereof as defined in the regulations of the 17 commission. 18 "Milk." The lacteal secretion of cows and includes all skim, 19 butterfat or other constituents obtained from separation or any 20 other process. The term is used in its broadest sense and may be 21 further defined by the commission for regulatory purposes. 22 "Partially regulated plant." A milk plant not located in a 23 regulated area but having Class I distribution within such area 24 or receipts from producers located in such area. Commission 25 regulations may exempt plants having such distribution or 26 receipts in amounts less than the limits defined therein. 27 "Participating state." A state which has become a party to 28 this compact by the enactment of concurring legislation. 29 "Pool plant." Any milk plant located in a regulated area. 30 "Region." The territorial limits of the states which are or 19990S0365B0640 - 9 -
1 become parties to this compact. 2 "Regulated area." Any area within the region governed by and 3 defined in regulation establishing a compact over-order price or 4 commission marketing order. 5 "State dairy regulation." Any state regulation of dairy 6 prices and associated assessments, whether by statute, marketing 7 order or otherwise. 8 Section 3. Rules of construction. 9 (1) This compact shall not be construed to displace existing 10 Federal milk marketing orders nor State dairy regulation in the 11 region but to supplement them. In the event some or all Federal 12 orders in the region are discontinued, the compact shall be 13 construed to provide the commission the option to replace them 14 with one or more commission marketing orders pursuant to this 15 compact. 16 (2) This compact shall be construed liberally in order to 17 achieve the purposes and intent enunciated in section 1 of this 18 compact. It is the intent of this compact to establish a basic 19 structure by which the commission may achieve those purposes 20 through the application, adaptation and development of the 21 regulatory techniques historically associated with milk 22 marketing and to afford the commission broad flexibility to 23 devise regulatory mechanisms to achieve the purposes of this 24 compact. In accordance with this intent, the technical terms 25 which are associated with market order regulation and which have 26 acquired commonly understood general meanings are not defined 27 herein, but the commission may further define the terms used in 28 this compact and develop additional concepts and define 29 additional terms as it may find appropriate to achieve its 30 purposes. 19990S0365B0640 - 10 -
1 ARTICLE III 2 COMMISSION ESTABLISHED 3 Section 4. Commission established. 4 There is hereby created a commission to administer the 5 compact, composed of delegations from each state in the region. 6 A delegation shall include not less than three nor more than 7 five persons. Each delegation shall include at least one dairy 8 farmer who is engaged in the production of milk at the time of 9 appointment or reappointment and one consumer representative. 10 Delegation members shall be residents and voters of, and subject 11 to such confirmation process as is provided for in, the 12 appointing state. Delegation members shall serve no more than 13 three consecutive terms with no single term of more than four 14 years and be subject to removal for cause. In all other 15 respects, delegation members shall serve in accordance with the 16 laws of the state represented. The compensation, if any, of the 17 members of a state delegation shall be determined and paid by 18 each state, but their expenses shall be paid by the commission. 19 Each state delegation shall be entitled to one vote in the 20 conduct of the commission's affairs. 21 Section 5. Voting requirements. 22 All actions taken by the commission, except for the 23 establishment or termination of an over-order price or 24 commission marketing order, and the adoption, amendment or 25 rescission of the commission's by-laws, shall be by majority 26 vote of the delegations present. Establishment or termination of 27 an over-order price or commission marketing order shall require 28 at least a two-thirds vote of the delegations present. The 29 establishment of a regulated area which covers all or part of a 30 participating state shall require also the affirmative vote of 19990S0365B0640 - 11 -
1 that state's delegation. A majority of the delegations from the 2 participating states shall constitute a quorum for the conduct 3 of the commission's business. 4 Section 6. Administration and management. 5 (1) The commission shall elect annually from among the 6 members of the participating state delegations a chairperson, a 7 vice-chairperson and a treasurer. The commission shall appoint 8 an executive director and fix his or her duties and 9 compensation. The executive director shall serve at the pleasure 10 of the commission, and, together with the treasurer, shall be 11 bonded in an amount determined by the commission. The commission 12 may establish through its by-laws an executive committee 13 composed of one member elected by each delegation. 14 (2) The commission shall adopt by-laws for the conduct of 15 its business by a two-thirds vote and shall have the power by 16 the same vote to amend and rescind these by-laws. The commission 17 shall publish its by-laws in convenient form with the 18 appropriate agency or officer in each of the participating 19 states. The by-laws shall provide for appropriate notice to the 20 delegations of all commission meetings and hearings and of the 21 business to be transacted at such meetings or hearings. Notice 22 also shall be given to other agencies or officers of 23 participating states as provided by the laws of those states. 24 (3) The commission shall file an annual report with the 25 Secretary of Agriculture of the United States, and with each of 26 the participating states by submitting copies to the Governor, 27 both Houses of the Legislature, and the head of the State 28 Department having responsibilities for agriculture. 29 (4) In addition to the powers and duties elsewhere 30 prescribed in this compact, the commission shall have the power: 19990S0365B0640 - 12 -
1 (a) to sue and be sued in any state or Federal court; 2 (b) to have a seal and alter the same at pleasure; 3 (c) to acquire, hold and dispose of real and personal 4 property by gift, purchase, lease, license or other similar 5 manner, for its corporate purposes; 6 (d) to borrow money and to issue notes, to provide for 7 the rights of the holders thereof and to pledge the revenue 8 of the commission as security therefor, subject to the 9 provisions of section 18 of this compact; 10 (e) to appoint such officers, agents and employees as it 11 may deem necessary, prescribe their powers, duties and 12 qualifications; and 13 (f) create and abolish such offices, employments and 14 positions as it deems necessary for the purposes of the 15 compact and provide for the removal, term, tenure, 16 compensation, fringe benefits, pension and retirement rights 17 of its officers and employees. The commission may also retain 18 personal services on a compact basis. 19 Section 7. Rulemaking power. 20 In addition to the power to promulgate a compact over-order 21 price or commission marketing orders as provided by this 22 compact, the commission is further empowered to make and enforce 23 such additional rules and regulations as it deems necessary to 24 implement any provisions of this compact or to effectuate in any 25 other respect the purposes of this compact. 26 ARTICLE IV 27 POWERS OF THE COMMISSION 28 Section 8. Powers to promote regulatory uniformity, simplicity 29 and interstate cooperation. 30 The commission is hereby empowered to: 19990S0365B0640 - 13 -
1 (1) Investigate or provide for investigations or research 2 projects designed to review the existing laws and regulations of 3 the participating states, to consider their administration and 4 costs and to measure their impact on the production and 5 marketing of milk and their effects on the shipment of milk and 6 milk products within the region. 7 (2) Prepare and transmit to the participating states model 8 dairy laws and regulations dealing with the inspection of farms 9 and plants, sanitary codes, labels for dairy products and their 10 imitations, standards for dairy products, license standards, 11 producer security programs and fair trade laws. 12 (3) Study and recommend to the participating states joint or 13 cooperative programs for the administration of the dairy laws 14 and regulations and to prepare estimates of cost savings and 15 benefits of such programs. 16 (4) Encourage the harmonious relationships between the 17 various elements in the industry for the solution of their 18 material problems and conduct symposiums or conferences designed 19 to improve industry relations or a better understanding or 20 problems. 21 (5) Prepare and release periodic reports on activities and 22 results of the commission's efforts to the participating states. 23 (6) Review the existing marketing system for milk and milk 24 products and recommend changes in the existing structure for 25 assembly and distribution of milk which may assist, improve or 26 promote more efficient assembly and distribution of milk. 27 (7) Investigate costs and charges for producing, hauling, 28 handling, processing, distributing, selling and for all other 29 services performed with respect to milk. 30 (8) Examine current economic forces affecting producers, 19990S0365B0640 - 14 -
1 probable trends in production and consumption, the level of 2 dairy farm prices in relation to costs, the financial conditions 3 of dairy farmers and the need for an emergency order to relieve 4 critical conditions on dairy farms. 5 Section 9. Equitable farm prices. 6 (1) The powers granted in this section and section ten of 7 this compact, shall apply only to the establishment of a compact 8 over-order price, so long as Federal milk marketing orders 9 remain in effect in the region. In the event that any or all 10 such orders are terminated, this article shall authorize the 11 commission to establish one or more commission marketing orders, 12 as herein provided, in the region or parts thereof as defined in 13 the order. 14 (2) A compact over-order price established pursuant to this 15 section shall apply only to Class I milk. Such over-order price 16 shall not exceed $1.50 per gallon. Beginning in 1990, and using 17 that year as a base, the foregoing $1.50 per gallon maximum 18 shall be adjusted annually by the rate of change in the consumer 19 price index as reported by the Bureau of Labor Statistics of the 20 United States Department of Labor. For purposes of the pooling 21 and equalization of an over-order price, the value of milk used 22 in other use classifications shall be calculated at the 23 appropriate class price established pursuant to the applicable 24 Federal order or State dairy regulation, and the value of 25 unregulated milk shall be calculated in relation to the nearest 26 prevailing class price in accordance with and subject to such 27 adjustments as the commission may prescribe in regulations. 28 (3) A commission marketing order shall apply to all classes 29 and uses of milk. 30 (4) The commission is hereby empowered to establish the 19990S0365B0640 - 15 -
1 minimum price for milk to be paid by pool plants, partially 2 regulated plants and all other handlers receiving milk from 3 producers located in a regulated area. This price shall be 4 established either as a compact over-order price or by one or 5 more commission marketing orders. Whenever such a price has been 6 established by either type of regulation, the legal obligation 7 to pay such price shall be determined solely by the terms and 8 purpose of the regulation without regard to the situs of the 9 transfer of title, possession or any other factors not related 10 to the purposes of the regulation and this compact. Producer- 11 handlers as defined in an applicable Federal market order shall 12 not be subject to a compact over-order price. The commission 13 shall provide for similar treatment of producer-handlers under 14 commission marketing orders. 15 (5) In determining the price, the commission shall consider 16 the balance between production and consumption of milk and milk 17 products in the regulated area, the costs of production, 18 including, but not limited to, the price of feed, the cost of 19 labor, including the reasonable value of the producer's own 20 labor and management, machinery expense and interest expense, 21 the prevailing price for milk outside the regulated area, the 22 purchasing power of the public and the price necessary to yield 23 a reasonable return to the producer and distributor. 24 (6) When establishing a compact over-order price, the 25 commission shall take such action as necessary and feasible to 26 ensure that the over-order price does not create an incentive 27 for producers to generate additional supplies of milk. 28 (7) The commission shall whenever possible enter into 29 agreements with Federal or State agencies for exchange of 30 information or services for the purpose of reducing regulatory 19990S0365B0640 - 16 -
1 burden and cost of administering the compact. The commission may 2 reimburse other agencies for the reasonable cost of providing 3 these services. 4 Section 10. Optional provisions for pricing order. 5 Regulations establishing a compact over-order price or a 6 commission marketing order may contain, but shall not be limited 7 to, any of the following: 8 (1) Provisions classifying milk in accordance with the form 9 in which or purpose for which it is used or creating a flat 10 pricing program. 11 (2) With respect to a commission marketing order only, 12 provisions establishing or providing a method for establishing 13 separate minimum prices for each use classification prescribed 14 by the commission or a single minimum price for milk purchased 15 from producers or associations of producers. 16 (3) With respect to an over-order minimum price, provisions 17 establishing or providing a method for establishing such minimum 18 price for Class I milk. 19 (4) Provisions for establishing either an over-order price 20 or a commission marketing order may make use of any reasonable 21 method for establishing such price or prices, including flat 22 pricing and formula pricing. Provision may also be made for 23 location adjustments, for zone differentials and for competitive 24 credits with respect to regulated handlers who market outside 25 the regulated area. 26 (5) Provisions for the payment to all producers and 27 associations of producers delivering milk to all handlers of 28 uniform prices for all milk so delivered, irrespective of the 29 uses made of such milk by the individual handler to whom it is 30 delivered, or for the payment of producers delivering milk to 19990S0365B0640 - 17 -
1 the same handler of uniform prices for all milk delivered by 2 them. 3 (a) With respect to regulations establishing a compact 4 over-order price, the commission may establish one 5 equalization pool within the regulated area for the sole 6 purpose of equalizing returns to producers throughout the 7 regulated area. 8 (b) With respect to any commission marketing order, as 9 defined in subdivision 9 section 2 of this compact, which 10 replaces one or more terminated Federal orders or State dairy 11 regulation, the marketing area of now separate Federal or 12 State orders shall not be merged without the affirmative 13 consent of each state, voting through its delegation, which 14 is partly or wholly included within any such new marketing 15 area. 16 (6) Provisions requiring persons who bring Class I milk into 17 the regulated area to make compensatory payments with respect to 18 all such milk to the extent necessary to equalize the cost of 19 milk purchased by handlers subject to a compact over-order price 20 or commission marketing order. No such provisions shall 21 discriminate against milk producers outside the regulated area. 22 The provisions for compensatory payments may require payment of 23 the difference between the Class I price required to be paid for 24 such milk in the state of production by a federal milk marketing 25 order or State dairy regulation and the Class I price 26 established by the compact over-order price or commission 27 marketing order. 28 (7) Provisions specially governing the pricing and pooling 29 of milk handled by partially regulated plants. 30 (8) Provisions requiring that the account of any person 19990S0365B0640 - 18 -
1 regulated under a compact over-order price shall be adjusted for 2 any payment made to or received by such persons with respect to 3 a producer settlement fund of any Federal or State milk 4 marketing order or other State producer price regulation within 5 the regulated area. 6 (9) Provisions requiring the payment by handlers of an 7 assessment to cover the costs of the administration and 8 enforcement of such order pursuant to subdivision one of section 9 18 of this compact. 10 (10) Provisions for reimbursement to participants of the 11 women, infants and children special supplemental food program of 12 the United States Child Nutrition Act of 1966. 13 (11) Other provisions and requirements as the commission may 14 find are necessary or appropriate to effectuate the purposes of 15 this compact and to provide for the payment of fair and 16 equitable minimum prices to producers. 17 ARTICLE V 18 RULEMAKING PROCEDURE 19 Section 11. Rulemaking procedure. 20 Before promulgation of any regulations establishing a compact 21 over-order price or commission marketing order, including any 22 provision with respect to milk supply under subdivision 6 of 23 section 9 of this compact, or amendment thereof, as provided in 24 Article IV of this compact, the commission shall conduct an 25 informal rulemaking proceeding to provide interested persons 26 with an opportunity to present data and views. Such rulemaking 27 proceeding shall be governed by section 4 of the Federal 28 Administrative Procedure Act, as amended (5 U.S.C. § 553). In 29 addition, the commission shall, to the extent practicable, 30 publish notice of rulemaking proceedings in the official 19990S0365B0640 - 19 -
1 register of each affected state. Before the initial adoption of 2 regulations establishing a compact over-order price or a 3 commission marketing order and thereafter before any amendment 4 with regard to prices or assessments, the commission shall hold 5 a public hearing. The commission may commence a rulemaking 6 proceeding on its own initiative or may in its sole discretion 7 act upon the petition of any person, including individual milk 8 producers, any organizations, consumer or public interest groups 9 and Federal, State or local officials. 10 Section 12. Findings and referendum. 11 In addition to the concise general statement of basis and 12 purpose required by section 4(b) of the Federal Administrative 13 Procedure Act (5 U.S.C. § 553(c) as amended, the commission 14 shall make findings of fact with respect to: 15 (1) Whether the public interest will be served by the 16 establishment of minimum milk prices to dairy farmers under 17 Article IV of this compact. 18 (2) What level of prices will assure that producers receive 19 a price sufficient to cover their costs of production and will 20 elicit an adequate supply of milk for the inhabitants of the 21 regulated area and for manufacturing purposes. 22 (3) Whether the major provisions of the order, other than 23 those fixing minimum milk prices, are in the public interest and 24 are reasonably designed to achieve the purpose of the order. 25 (4) Whether the terms of the proposed regional order or 26 amendment are approved by producers as provided in section 13 of 27 this compact. 28 Section 13. Producer referendum. 29 (1) For the purpose of ascertaining whether the issuance or 30 amendment of regulations establishing a compact over-order price 19990S0365B0640 - 20 -
1 or a commission marketing order, including any provision with 2 respect to milk supply pursuant to subdivision 6 of section 9 of 3 this compact, is approved by producers, the commission shall 4 conduct a referendum among producers. The referendum shall be 5 held in a timely manner, as determined by regulation of the 6 commission. The terms and conditions of the proposed order or 7 amendment shall be described by the commission in the ballot 8 used in the conduct of the referendum, but the nature, content 9 or extent of such description shall not be a basis for attacking 10 the legality of the order or any action relating thereto. 11 (2) An order or amendment shall be deemed approved by 12 producers if the commission determines that it is approved by at 13 least two-thirds of the voting procedures who, during a 14 representative period determined by the commission, have been 15 engaged in the production of milk the price of which would be 16 regulated under the proposed order or amendment. 17 (3) For purposes of any referendum, the commission shall 18 consider the approval or disapproval by any cooperative 19 association of producers, qualified under the provisions of the 20 Act of Congress of February 18, 1922, as amended, known as the 21 Capper-Volstead Act, bona fide engaged in marketing milk, or in 22 rendering services for or advancing the interests of producers 23 of such commodity as the approval or disapproval of the 24 producers who are members or stockholders in or under contract 25 with such cooperative association of producers, except as 26 provided in paragraph (a) of this subdivision and subject to the 27 provisions of paragraphs (b) through (e) of this subdivision. 28 (a) No cooperative which has been formed to act as a 29 common marketing agency for both cooperatives and individual 30 producers shall be qualified to block vote for either. 19990S0365B0640 - 21 -
1 (b) Any cooperative which is qualified to block vote 2 shall, before submitting its approval or disapproval in any 3 referendum, give prior written notice to each of its members 4 as to whether and how it intends to cast its vote. The notice 5 shall be given in a timely manner as established and in the 6 form prescribed by the commission. 7 (c) Any producer may obtain a ballot from the commission 8 in order to register approval or disapproval of the proposed 9 order. 10 (d) A producer who is a member of a cooperative which 11 has provided notice of its intent to approve or not to 12 approve a proposed order, and who obtains a ballot and with 13 such ballot expresses his or her approval or disapproval of 14 the proposed order, shall notify the commission as to the 15 name of the cooperative of which he or she is a member, and 16 the commission shall remove such producer's name from the 17 list certified by such cooperative with its corporate vote. 18 (e) In order to insure that all milk producers are 19 informed regarding a proposed order, the commission shall 20 notify all milk producers that an order is being considered 21 and that each producer may register his or her approval or 22 disapproval with the commission either directly or through 23 his or her cooperative. 24 Section 14. Termination of over-order price or marketing order. 25 (1) The commission shall terminate any regulations 26 establishing an over-order price or commission marketing order 27 issued under this article whenever it finds that such order or 28 price obstructs or does not tend to effectuate the declared 29 policy of this compact. 30 (2) The commission shall terminate any regulations 19990S0365B0640 - 22 -
1 establishing an over-order price or a commission marketing order 2 issued under this article whenever it finds that such 3 termination is favored by a majority of the producers who, 4 during a representative period determined by the commission, 5 have been engaged in the production of milk the price of which 6 is regulated by such order; but such termination shall be 7 effective only if announced on or before such date as may be 8 specified in such marketing agreement or order. 9 (3) The termination or suspension of any order or provision 10 thereof shall not be considered an order within the meaning of 11 this article and shall require no hearing, but shall comply with 12 the requirements for informal rulemaking prescribed by section 4 13 of the Federal Administrative Procedure Act, as amended (5 14 U.S.C. § 553). 15 ARTICLE VI 16 ENFORCEMENT 17 Section 15. Records, reports and access to premises. 18 (1) The commission may by rule and regulation prescribe 19 recordkeeping and reporting requirements for all regulated 20 persons. For purposes of the administration and enforcement of 21 this compact, the commission is authorized to examine the books 22 and records of any regulated person relating to his or her milk 23 business, and, for that purpose, the commission's properly 24 designated officers, employees or agents shall have full access 25 during normal business hours to the premises and records of all 26 regulated persons. 27 (2) Information furnished to or acquired by the commission 28 officers, employees or its agents pursuant to this section shall 29 be confidential and not subject to disclosure except to the 30 extent that the commission deems disclosure to be necessary in 19990S0365B0640 - 23 -
1 any administrative or judicial proceeding involving the 2 administration or enforcement of this compact, an over-order 3 price, a compact marketing order or other regulation of the 4 commission. The commission may promulgate regulations further 5 defining the confidentiality of information pursuant to this 6 section. Nothing in this section shall be deemed to prohibit: 7 (a) The issuance of general statements based upon the 8 reports of a number of handlers, which do not identify the 9 information furnished by any person. 10 (b) The publication by direction of the commission of 11 the name of any person violating any regulation of the 12 commission, together with a statement of the particular 13 provisions violated by such person. 14 (3) No officer, employee or agent of the commission shall 15 intentionally disclose information, by inference or otherwise, 16 which is made confidential pursuant to this section. Any person 17 violating the provisions of this section shall upon conviction 18 be subject to a fine of not more than $1,000 or to imprisonment 19 for not more than one year, or to both, and shall be removed 20 from office. The commission shall refer any allegation of a 21 violation of this section to the appropriate State enforcement 22 authority or United States Attorney. 23 Section 16. Subpoena, hearings and judicial review. 24 (1) The commission is hereby authorized and empowered by its 25 members and its properly designated officers to administer oaths 26 and issue subpoenas throughout all signatory states to compel 27 the attendance of witnesses and the giving of testimony and the 28 production of other evidence. 29 (2) Any handler subject to an order may file a written 30 petition with the commission stating that any such order or any 19990S0365B0640 - 24 -
1 provision of any such order or any obligation imposed in 2 connection therewith is not in accordance with law and praying 3 for a modification thereof or to be exempted therefrom. He or 4 she shall thereupon be given an opportunity for a hearing upon 5 such petition, in accordance with regulations made by the 6 commission. After such hearing, the commission shall make a 7 ruling upon the prayer of such petition which shall be final, if 8 in accordance with law. 9 (3) The district courts of the United States in any district 10 in which such handler is an inhabitant, or has his or her 11 principal place of business, are hereby vested with jurisdiction 12 in equity to review such ruling, provided a bill in equity for 13 that purpose is filed within 30 days from the date of the entry 14 of such ruling. Service of process in such proceedings may be 15 had upon the commission by delivering to it a copy of the bill 16 of complaint. If the court determines that such ruling is not in 17 accordance with law, it shall remand such proceedings to the 18 commission with directions either: 19 (a) To make such ruling as the court shall determine to 20 be in accordance with law. 21 (b) To take such further proceedings as, in its opinion, 22 the law requires. The pendency of proceedings instituted 23 pursuant to this subdivision shall not impede, hinder or 24 delay the commission from obtaining relief pursuant to 25 section 17 of this compact. Any proceedings brought pursuant 26 to section 17 of this compact (except where brought by way of 27 counterclaim in proceedings instituted pursuant to this 28 section) shall abate whenever a final decree has been 29 rendered in proceedings between the same parties, and 30 covering the same subject matter, instituted pursuant to this 19990S0365B0640 - 25 -
1 section. 2 Section 17. Enforcement with respect to handlers. 3 (1) Any violation by a handler of the provisions of 4 regulations establishing an over-order price or a commission 5 marketing order or other regulations adopted pursuant to this 6 compact shall: 7 (a) Constitute a violation of the laws of each of the 8 signatory states. Such violation shall render the violator 9 subject to a civil penalty in an amount as may be prescribed 10 by the laws of each of the participating states, recoverable 11 in any Federal or state court of competent jurisdiction. Each 12 day such violation continues shall constitute a separate 13 violation. 14 (b) Constitute grounds for the revocation of license or 15 permit to engage in the milk business under the applicable 16 laws of the participating states. 17 (2) With respect to handlers, the commission shall enforce 18 the provisions of this compact, regulations establishing an 19 over-order price, a commission marketing order or other 20 regulations adopted hereunder by: 21 (a) commencing an action for legal or equitable relief 22 brought in the name of the commission in any Federal or State 23 court of competent jurisdiction; or 24 (b) with the agreement of the appropriate state agency 25 of a participating state, by referral to the state agency for 26 enforcement by judicial or administrative remedy. 27 (3) With respect to handlers, the commission may bring an 28 action for injunction to enforce the provisions of this compact 29 or the order or regulation adopted thereunder without being 30 compelled to allege or prove that an adequate remedy of law does 19990S0365B0640 - 26 -
1 not exist. 2 ARTICLE VII 3 FINANCE 4 Section 18. Finance of start-up and regular costs. 5 (1) To provide for its start-up costs, the commission may 6 borrow money pursuant to its general power under paragraph (d) 7 of subdivision 4 of section 6 of this compact. In order to 8 finance the costs of administration and enforcement of this 9 compact, including payback of start-up costs, the commission is 10 hereby empowered to collect an assessment from each handler who 11 purchases milk from producers within the region. If imposed, 12 this assessment shall be collected on a monthly basis for up to 13 one year from the date the commission convenes, in an amount not 14 to exceed one-tenth of 1% of the applicable Federal market order 15 blend price per hundred weight of milk purchased from producers 16 during the period of the assessment. The initial assessment may 17 apply to the projected purchase of handlers for the two-month 18 period following the date the commission convenes. In addition, 19 if regulations establishing an over-order price or a compact 20 marketing order are adopted, they may include an assessment for 21 the specific purpose of their administration. These regulations 22 shall provide for establishment of a reserve for the 23 commission's ongoing operating expenses. 24 (2) The commission shall not pledge the credit of any 25 participating state or of the United States. Notes issued by the 26 commission and all other financial obligations incurred by it 27 shall be its sole responsibility and no participating state or 28 the United States shall be liable therefor. 29 Section 19. Audit and accounts. 30 (1) The commission shall keep accurate accounts of all 19990S0365B0640 - 27 -
1 receipts and disbursements, which shall be subject to the audit 2 and accounting procedures established under its rules. In 3 addition, all receipts and disbursements of funds handled by the 4 commission shall be audited yearly by a qualified public 5 accountant and the report of the audit shall be included in and 6 become part of the annual report of the commission. 7 (2) The accounts of the commission shall be open at any 8 reasonable time for inspection by duly constituted officers of 9 the participating states and by any persons authorized by the 10 commission. 11 (3) Nothing contained in this article shall be construed to 12 prevent commission compliance with laws relating to audit or 13 inspection of accounts by or on behalf of any participating 14 state or of the United States. 15 ARTICLE VIII 16 ENTRY INTO FORCE; ADDITIONAL MEMBERS AND WITHDRAWAL 17 Section 20. Entry into force; additional members. 18 This compact shall enter into force when enacted into law by 19 any three states of the group of states composed of Connecticut, 20 Delaware, Maine, Maryland, Massachusetts, New Hampshire, New 21 Jersey, New York, Pennsylvania, Rhode Island, Vermont and 22 Virginia, and when the consent of Congress has been obtained. 23 This compact shall also be open to states which are contiguous 24 to any of the named states and open to states which are 25 contiguous to participating states. 26 Section 21. Withdrawal from compact. 27 Any participating state may withdraw from this compact by 28 enacting a statute repealing the same, but no such withdrawal 29 shall take effect until one year after notice in writing of the 30 withdrawal is given to the commission and the governors of all 19990S0365B0640 - 28 -
1 other participating states. No withdrawal shall affect any 2 liability already incurred by or chargeable to a party state 3 prior to the time of such withdrawal. 4 Section 22. Severability. 5 If any part or provision of this compact is adjudged invalid 6 by any court, such judgment shall be confined in its operation 7 to the part or provision directly involved in the controversy in 8 which such judgment shall have been rendered and shall not 9 affect or impair the validity of the remainder of this compact. 10 Congress reserves the right to amend or rescind this interstate 11 compact at any time. 12 Section 23. Reservation of rights. 13 (1) In general.--The right to alter, amend or repeal this 14 compact is expressly reserved by Congress. 15 (2) Compensation requirement.--When an over-order price is 16 in effect, the commission established in this compact shall 17 compensate the Commodity Credit Corporation before the end of 18 the fiscal year for the cost of any increased commodity credit 19 corporation dairy purchases that result from projected increased 20 fluid milk production for that fiscal year within the compact 21 region in excess of the national average rate of increase. 22 Section 4. Pennsylvania Delegation. 23 (a) Appointment.--The Pennsylvania Delegation to the 24 Northeast Interstate Compact Commission shall consist of five <-- 25 persons, at least one of whom shall be a dairy farmer who is 26 engaged in the production of milk at the time of appointment or 27 reappointment and one of whom shall be representative of 28 consumers' interests. One member shall be appointed by the 29 Governor, one by the President pro tempore of the Senate, one by 30 the minority leader of the Senate, one by the Speaker of the 19990S0365B0640 - 29 -
1 House of Representatives and one by the minority leader of the 2 House of Representatives. 3 (b) Terms.--Members shall serve for a term of three years, 4 except that the members first appointed by the President pro 5 tempore of the Senate and the Speaker of the House of 6 Representatives shall serve for a term of two years and the 7 members first appointed by the minority leader of the Senate and 8 the minority leader of the House of Representatives shall serve 9 for a term of one year. 10 THE MEMBERS OF THE MILK MARKETING BOARD OF THIS COMMONWEALTH. <-- 11 (B) TERMS.--MEMBERS SHALL SERVE FOR A TERM CONTIGUOUS WITH 12 THEIR TERM ON THE MILK MARKETING BOARD. 13 (c) Compensation.--The members of the delegation shall 14 receive compensation for their services of $300 per diem. 15 (d) Cooperation with commission.--All departments and 16 agencies of the Commonwealth shall, when called upon, provide 17 the members with cooperation, information and staff support. 18 Section 5. Compact order violations. 19 Any violation of the regulations adopted by the Northeast 20 Interstate Dairy Compact establishing an over-order price, a 21 commission marketing order, or any other regulation shall 22 constitute a violation of this act. Any such violation shall be 23 subject to a civil penalty of $5,000 per occurrence. 24 Section 6. Effective date. 25 This act shall take effect immediately. A20L03JAM/19990S0365B0640 - 30 -