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

I 116TH CONGRESS 2D SESSION H. R. 7501 To amend the Agricultural Marketing Act of 1946 to foster efficient markets and increase competition and transparency among packers that purchase livestock from producers. IN THE HOUSE OF REPRESENTATIVES JULY 9, 2020 Mrs. AXNE (for herself, Ms. FINKENAUER, and Mr. LOEBSACK) introduced the following bill; which was referred to the Committee on Agriculture A BILL To amend the Agricultural Marketing Act of 1946 to foster efficient markets and increase competition and trans- parency among packers that purchase livestock from pro- ducers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SPOT MARKET PURCHASES OF LIVESTOCK BY 3 PACKERS. 4 Chapter 5 of subtitle B of the Agricultural Marketing 5 Act of 1946 (7 U.S.C. 1636 et seq.) is amended— 6 (1) by redesignating section 260 (7 U.S.C. 7 1636i) as section 261; and 8 VerDate Sep 11 2014 01:25 Jul 26, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7501.IH H7501 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7501 IH (2) by inserting after section 259 the following: 1 ‘‘SEC. 260. SPOT MARKET PURCHASES OF LIVESTOCK BY 2 PACKERS. 3 ‘‘(a) DEFINITIONS.—In this section: 4 ‘‘(1) COVERED PACKER.— 5 ‘‘(A) IN GENERAL.—The term ‘covered 6 packer’ means a packer that is required under 7 this subtitle to report to the Secretary each re- 8 porting day information on the price and quan- 9 tity of livestock purchased by the packer. 10 ‘‘(B) EXCLUSION.—The term ‘covered 11 packer’ does not include a packer that owns 12 only 1 livestock processing plant. 13 ‘‘(2) LIVESTOCK.—The term ‘livestock’ does not 14 include— 15 ‘‘(A) pork; 16 ‘‘(B) poultry; 17 ‘‘(C) a dairy-bred, dairy-bred cross, or beef 18 animal over 30 months of age; or 19 ‘‘(D) a foreign-born beef animal. 20 ‘‘(3) NONAFFILIATED PRODUCER.—The term 21 ‘nonaffiliated producer’ means a producer of live- 22 stock— 23 ‘‘(A) that sells livestock to a packer; 24 VerDate Sep 11 2014 01:25 Jul 26, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7501.IH H7501 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7501 IH ‘‘(B) that has less than 1 percent equity 1 interest in the packer, which packer has less 2 than 1 percent equity interest in the producer; 3 ‘‘(C) that has no officers, directors, em- 4 ployees, or owners that are officers, directors, 5 employees, or owners of the packer; 6 ‘‘(D) that has no fiduciary responsibility to 7 the packer; and 8 ‘‘(E) in which the packer has no equity in- 9 terest. 10 ‘‘(4) SPOT MARKET SALE.— 11 ‘‘(A) IN GENERAL.—The term ‘spot mar- 12 ket sale’ means a purchase and sale of livestock 13 by a packer from a producer— 14 ‘‘(i) under an agreement that specifies 15 a firm base price that may be equated with 16 a fixed dollar amount on the date the 17 agreement is entered into; 18 ‘‘(ii) under which the livestock are 19 slaughtered not more than 14 days after 20 the date on which the agreement is entered 21 into; and 22 ‘‘(iii) under circumstances in which a 23 reasonable competitive bidding opportunity 24 VerDate Sep 11 2014 01:25 Jul 26, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7501.IH H7501 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7501 IH exists on the date on which the agreement 1 is entered into. 2 ‘‘(B) REASONABLE COMPETITIVE BIDDING 3 OPPORTUNITY.—For the purposes of subpara- 4 graph (A)(iii), circumstances in which a reason- 5 able competitive bidding opportunity shall be 6 considered to exist if— 7 ‘‘(i) no written or oral agreement pre- 8 cludes the producer from soliciting or re- 9 ceiving bids from other packers; and 10 ‘‘(ii) no circumstance, custom, or 11 practice exists that— 12 ‘‘(I) establishes the existence of 13 an implied contract (as determined in 14 accordance with the Uniform Com- 15 mercial Code); and 16 ‘‘(II) precludes the producer from 17 soliciting or receiving bids from other 18 packers. 19 ‘‘(b) GENERAL RULE.—Of the quantity of livestock 20 that is slaughtered by a covered packer during each re- 21 porting week in each plant, the covered packer shall 22 slaughter not less than 50 percent of the quantity through 23 spot market sales from nonaffiliated producers. 24 VerDate Sep 11 2014 01:25 Jul 26, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7501.IH H7501 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 7501 IH ‘‘(c) NONPREEMPTION.—Notwithstanding section 1 259, this section does not preempt any requirement of a 2 State or political subdivision of a State that requires a 3 covered packer to purchase on the spot market a greater 4 percentage of the livestock purchased by the covered pack- 5 er than is required under this section. 6 ‘‘(d) RELATIONSHIP TO OTHER PROVISIONS.—Noth- 7 ing in this section affects the interpretation of any other 8 provision of this Act, including section 202.’’. 9 Æ VerDate Sep 11 2014 01:25 Jul 26, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H7501.IH H7501 pbinns on DSKJLVW7X2PROD with BILLS