[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2631 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 2631
To amend the Packers and Stockyards Act, 1921, to prohibit the use of
certain anti-competitive forward contracts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 25, 2011
Mrs. Lummis (for herself and Ms. Kaptur) introduced the following bill;
which was referred to the Committee on Agriculture
_______________________________________________________________________
A BILL
To amend the Packers and Stockyards Act, 1921, to prohibit the use of
certain anti-competitive forward contracts.
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 ``Livestock Marketing Fairness Act''.
SEC. 2. PURPOSE.
The purpose of the amendments made by this Act is to prohibit the
use of certain anti-competitive forward contracts--
(1) to require a firm base price in forward contracts and
marketing agreements; and
(2) to require that forward contracts be traded in open,
public markets.
SEC. 3. LIMITATION ON USE OF ANTI-COMPETITIVE FORWARD CONTRACTS.
(a) In General.--Section 202 of the Packers and Stockyards Act,
1921 (7 U.S.C. 192), is amended--
(1) by striking ``Sec. 202. It shall be'' and inserting the
following:
``SEC. 202. UNLAWFUL PRACTICES.
``(a) In General.--It shall be'';
(2) by striking ``to:'' and inserting ``to--'';
(3) by redesignating subsections (a), (b), (c), (d), (e),
(f), and (g) as paragraphs (1), (2), (3), (4), (5), (7), and
(8), respectively, and indenting appropriately;
(4) in paragraph (7) (as redesignated by paragraph (3)), by
redesignating paragraphs (1), (2), and (3) as subparagraphs
(A), (B), and (C), respectively, and indenting appropriately;
(5) in paragraph (8) (as redesignated by paragraph (3)), by
striking ``subdivision (a), (b), (c), (d), or (e)'' and
inserting ``paragraph (1), (2), (3), (4), (5), or (6)'';
(6) in each of paragraphs (1), (2), (3), (4), (5), (7), and
(8) (as redesignated by paragraph (3)), by striking the first
capital letter of the first word in the paragraph and inserting
the same letter in the lowercase;
(7) in each of paragraphs (1) through (5) (as redesignated
by paragraph (3)), by striking ``or'' at the end;
(8) by inserting after paragraph (5) (as redesignated by
paragraph (3)) the following:
``(6) except as provided in subsection (c), use, in
effectuating any sale of livestock, a forward contract that--
``(A) does not contain a firm base price that may
be equated to a fixed dollar amount on the day on which
the forward contract is entered into;
``(B) is not offered for bid in an open, public
manner under which--
``(i) buyers and sellers have the
opportunity to participate in the bid; and
``(ii) buyers and sellers may witness bids
that are made and accepted;
``(C) is based on a formula price; or
``(D) subject to subsection (b), provides for the
sale of livestock in a quantity in excess of--
``(i) in the case of cattle, 40 cattle;
``(ii) in the case of swine, 30 swine; and
``(iii) in the case of other types of
livestock, a comparable quantity of the type of
livestock determined by the Secretary.''; and
(9) by adding at the end the following:
``(b) Adjustments.--The Secretary may adjust the maximum quantity
of livestock described in subsection (a)(6)(D) to reflect advances in
marketing and transportation capabilities if the adjusted quantity
provides reasonable market access for all buyers and sellers.
``(c) Exemption for Cooperatives.--Subsection (a)(6) shall not
apply to--
``(1) a cooperative or entity owned by a cooperative, if a
majority of the ownership interest in the cooperative is held
by active cooperative members that--
``(A) own, feed, or control livestock; and
``(B) provide the livestock to the cooperative for
slaughter;
``(2) a packer that is not required to report to the
Secretary on each reporting day (as defined in section 212 of
the Agricultural Marketing Act of 1946 (7 U.S.C. 1635a))
information on the price and quantity of livestock purchased by
the packer; or
``(3) a packer that owns only 1 livestock processing
plant.''.
(b) Definitions.--Section 2(a) of the Packers and Stockyards Act,
1921 (7 U.S.C. 182(a)), is amended by adding at the end the following:
``(15) Firm base price.--The term `firm base price' means a
transaction using a reference price from an external source.
``(16) Formula price.--
``(A) In general.--The term `formula price' means
any price term that establishes a base from which a
purchase price is calculated on the basis of a price
that will not be determined or reported until a date
after the day the forward price is established.
``(B) Exclusion.--The term `formula price' does not
include--
``(i) any price term that establishes a
base from which a purchase price is calculated
on the basis of a futures market price; or
``(ii) any adjustment to the base for
quality, grade, or other factors relating to
the value of livestock or livestock products
that are readily verifiable market factors and
are outside the control of the packer.
``(17) Forward contract.--The term `forward contract' means
an oral or written contract for the purchase of livestock that
provides for the delivery of the livestock to a packer at a
date that is more than 7 days after the date on which the
contract is entered into, without regard to whether the
contract is for--
``(A) a specified lot of livestock; or
``(B) a specified number of livestock over a
certain period of time.''.
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