HB2800 HSUMMARY 3/18





ATTORNEY: Paul K. Reese
DATE: March 18, 1998

SHORT TITLE: Enactment of the southern dairy compact

SPONSORED BY:Delegates Beach, Kelley, Buchannan, Prunty, Heck, Riggs, Boggs and Evans.

INTRODUCED: January 14, 1998

CODE: §19-11C (NEW)

SUMMARY: This bill entered West Virginia into the Southern Dairy Compact with up to 15 other regional states in order to establish a commission to support a floor price of milk at the producer level to keep compact state milk producers in the same competitive price position established through the federal order system of 1937.
The compact will become effective when passed a majority of contiguous regional states and when consent of Congress is obtained.

It is the declared purpose and policy of the compact to insure continued viability of the southern dairy industry primarily through regulation of the price which southern dairy farmers receive for their product.

2. A commission, composed of state delegates appointed by the W.Va. commissioner of agriculture, administers the compact. One delegate shall be a farmer, one a retailer, one a processor, one a consumer representative and one a delegate at large.

3. Administration and management powers include, among others, rulemaking.

4. So long as federal milk orders remain in effect, the commission may establish over-order prices for class I milk only, not to exceed $1.50 per gallon at Atlanta, GA, with 1990 as the base year, adjusted annually by the consumer price index.

5. Provisions for payment to all producers; area of inclusion in the order; producers outside the regulated area to make compensatory payments to equalize costs; payment of an assessment by milk handlers to fund start-up costs of the commission, among others.

6. Commission is authorized to examine the confidential books and records of any regulated person relating to milk business. Upon conviction, breach of confidentiality results in a fine of $1000 and/or confinement in jail for one year.

7. Any state may withdraw from the compact by enacting repealing statute with one year notice to all states in the compact.

8. Senate amendments, concurred in by the House, modified the number of states necessary to make the compact effective, and also modified the composition of the state delegation. Although the issue may be practically moot, there exists an issue of constitutional compact invalidity regarding the Senate amendments. All ,other states that have ratified the compact have required the approval of two other regional sates and Congress. The Senate amendments require approval of a "majority of contiguous' regional states. As noted in Opinion of the Justices, 184 N.E.2d 353, 357 (1962), an amendment making a compact effective as to a particular state which is different from other compact states may be of sufficient material substance to the compact to constitute a material difference in the agreement, thereby voiding the contract.


EFFECTIVE DATE: Regular - 90 Days From Passage.


DATE OF PASSAGE: March 10, 1998.