.......... moves to amend H. F. No. ...., as follows:
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                                 "ARTICLE 1"
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                                 "ARTICLE 2
     Section 1. 32A.01 CITATION.
     This chapter may be cited as the "Minnesota Milk Marketing
Board Act."
     Sec. 2. 32A.02 APPLICATION.
     This chapter does not apply to foreign or interstate
commerce except insofar as it may be effective in compliance
with the United States Constitution and with the laws of the
United States.
     Sec. 3. 32A.03 DEFINITIONS.
     Subdivision 1. SCOPE. The definitions in this section
apply to this chapter.
     Subd. 2. ADMINISTRATIVE FUNCTION. "Administrative
function" means duties and procedures concerning the execution
and enforcement of the laws, rules, orders, directives, duties,
and obligations imposed for the control and government of the
persons or businesses regulated, together with related
investigative activities and procedures inherently
administrative or executive in character.
     Subd. 3. ADMINISTRATOR. "Administrator" means the
board's executive arm.
     Subd. 4. BOARD. "Board" means the milk marketing board
created under section 32A.05.
     Subd. 5. CLASS I; CLASS II; CLASS III; AND CLASS IV
MILK. "Class I milk," "Class II milk," "Class III milk," and
"Class IV milk" have the meanings given in Code of Federal
Regulations, title 7, part 1000.40, or successor regulations.
     Subd. 6. DISTRIBUTOR. "Distributor" means a person
buying milk from any source, either in bulk or in packages, and
distributing it for consumption in this state. The term
includes what are commonly known as jobbers and independent
contractors. The term excludes a person purchasing milk from a
distributor, for resale over the counter at retail, or for
consumption on the premises.
     Subd. 7. LEGISLATIVE FUNCTION. "Legislative function"
means the establishment and adoption of all rules, orders, and
directives of general or particular applicability governing the
conduct of the regulated persons or businesses, related
investigative procedures, and all other valid acts and
procedures that are historically or functionally legislative in
character.
     Subd. 8. PROCESSOR. "Processor" means a person engaged
in manufacturing or processing dairy products in the person's
own plant for sale.
     Subd. 9. PRODUCER. "Producer" means a person who
operates a dairy herd or herds in Minnesota producing milk
commercially and whose milk is sold to, or received or handled
by, a distributor or processor.
     Subd. 10. PRODUCER PRICE. "Producer price" means the
price at which milk owned by a producer is sold in bulk to a
distributor or processor.
     Subd. 11. PURCHASER. "Purchaser" means a person who
purchases a Class I, Class II, Class III, or Class IV dairy
product at any place and at any time and for any purpose.
     Subd. 12. QUASI-JUDICIAL FUNCTION. "Quasi-judicial
function" means the adoption of all orders and directives of
particular applicability governing the conduct of the regulated
persons or businesses and inherently judicial procedures.
     Subd. 13. REFERENDUM. "Referendum" means an election
conducted by the commissioner of agriculture on ballots approved
by all interested parties and tallied at a public meeting after
public notice. The commissioner may designate representatives
of interested parties as election observers.
     Sec. 4. 32A.04 DUTIES AND POWERS OF ADMINISTRATOR.
     In enforcing this chapter, the administrator and the
administrator's assistants, agents, and employees have the power
and authority granted under sections 31.02 to 31.171. This
authority must be exercised at the request of and in
coordination with the board.
     Sec. 5. 32A.045 INITIAL REFERENDUM.
     The Minnesota Milk Marketing Board Act is effective 30 days
after a tally of ballots mailed to all registered Minnesota
dairy producers indicates approval by a majority of the
producers casting ballots. The commissioner shall conduct the
referendum not later than 60 days after the enactment date of
this section.
     Sec. 6. 32A.05 MILK MARKETING BOARD.
     Subdivision 1. CREATION; MEMBERSHIP; APPOINTMENT. The
milk marketing board consists of five members appointed by the
governor within 90 days after the passage of the initial
referendum under section 5. Members may serve a maximum of four
consecutive three-year terms. Vacancies on the board shall be
filled by election by producers. The board shall elect a chair
from among its members. No member may be connected in any way
with the production, processing, distribution, or wholesale or
retail sale of milk or dairy products. A member may not have
held an elective or appointive public office during the two
years immediately preceding appointment and a member may not
hold a public office, either elective or appointive, during a
term on the board. Not more than three members may be of the
same political party.
     Subd. 2. ASSIGNMENT; FISCAL AGENT. The board is to be
housed in the department of agriculture for administrative
purposes. The commissioner of agriculture shall serve as fiscal
agent to the board.
     Subd. 3. MEETINGS. Board meetings are subject to chapter
13D, except as it pertains to business and financial
information, and trade secret information as defined by section
13.37, subdivision 1, paragraph (b).
     Sec. 7. 32A.06 FEES AND ASSESSMENTS.
     (a) In addition to license fees and other assessments
imposed under chapters 17 and 32, the board shall, in each year,
before April 1, for the purpose of securing funds to administer
and enforce this chapter, levy an assessment upon producers and
distributors as follows:
     (1) a fee per hundredweight on the total volume of all milk
subject to this chapter sold by a producer; and
     (2) a fee per hundredweight on the total volume of all milk
subject to this chapter sold by a processor or distributor,
except that which is sold to another processor or distributor.
     (b) The board shall adopt rules fixing the amount of each
fee. The amounts may not exceed levels sufficient to provide
for the administration of this chapter.
     (c) The assessments upon producers and distributors must be
paid monthly. The amount of the assessments must be computed by
applying the fee designated by the board to the volume of milk
sold in the preceding month.
     (d) Failure of a producer, processor, or distributor to pay
an assessment when due is a violation of this chapter.
     (e) All assessments required by this chapter must be
deposited by the administrator in the milk marketing board
account in the agricultural fund. Money in that account is
appropriated to the administrator for administering this
chapter, including the salaries of employees and assistants, per
diem and expenses of board members, and all other disbursements
necessary to carry out the purpose of this chapter.
     (f) If costs of administering and enforcing this chapter
can be derived from lower rates, the board may fix the rates at
a lesser amount on or before April 1 in any year.
     Sec. 8. 32A.07 PRODUCER COMMITTEE.
     A producer committee must be elected by district in
proportion to the number of farms in each district consisting of
not fewer than ten members nor more than 15 members to deal
primarily with producer issues and make recommendations to the
board.
     Sec. 9. 32A.08 REGULATION OF MILK PRICES.
Subdivision 1. ESTABLISHMENT OF MINIMUM PRICES. The
board shall fix minimum producer prices for Class I, Class II,
Class III, and Class IV milk by adopting rules pursuant to
chapter 14.
     Subd. 2. FORMULAS. (a) Except as provided in subdivision
1, the board shall establish minimum and maximum prices by means
of flexible formulas that must be devised so that they bring
about automatic changes in all minimum prices that are justified
on the basis of changes in production, supply, processing,
distribution, and retailing costs.
     (b) The board shall consider the balance between production
and consumption of milk, the costs of production and
distribution, and prices in adjacent and neighboring areas and
states so that prices result that are fair and equitable to
producers and consumers.
     (c) The board shall, when publishing notice of proposed
rulemaking under authority of this section, specify the factors
that must be taken into consideration in establishing the
formulas and, in particular, in determining costs of production
and of the actual financial costs of production that preliminary
studies and investigations of auditors or accountants in its
employment indicate will or should be shown at the hearing so
that all interested parties will have opportunity to be heard
and to question or rebut the considerations as a matter of
record.
     (d) Specific factors may include, but are not limited to:
     (1) current and prospective supplies of milk in relation to
current and prospective demands for milk for all purposes; and
     (2) the cost factors in producing milk, including the
prices paid by farmers generally, as used in parity calculations
of the United States Department of Agriculture, prices paid by
farmers for dairy feed in particular, and farm wage rates in
this state.
     (e) The board, after consideration of the evidence
produced, shall make written findings and conclusions and set by
rule the formula under which minimum producer prices for milk in
classes I, II, III, and IV must be computed. Generally the
minimum price for Class I milk must be no lower than the federal
milk market order price for the order covering the majority of
Minnesota's dairy industry.
     (f) This section may not be construed as requiring the
board to promulgate a specific number of formulas, but it must
be construed liberally so that the board may adopt a reasonable
method of expression to accomplish the objectives of this
chapter.
     (g) Each rule establishing or revising milk pricing
formulas must classify milk by forms, classes, grades, or uses
that the board considers advisable and must specify the minimum
prices for the forms, classes, grades, and uses.
     (h) Distributors who have processing facilities in this
state must, whenever possible, purchase milk from Minnesota
producers for the processing of products to be sold in this
state, as long as milk is available from Minnesota producers at
the price set by the board.
     (i) All milk purchased by a distributor must be purchased
on a uniform basis established by the board after the producers
and the distributors have been consulted.
     (j) A purchaser of raw milk from a Minnesota dairy
producer, or from a producer located in a contiguous state
shipping milk to a Minnesota plant, must pay not less than the
state marketing board announced monthly base price for milk
testing 3.5 percent butterfat, 3.0 percent protein, 5.7 percent
solids, under 400,000 somatic cell count, and under 100,000
bacteria count.
     (k) Not later than the tenth day of each month each
purchaser of raw milk must submit to the marketing board
pertinent information regarding sales by the purchaser in all
milk classes during the previous month.
     (l) The marketing board shall announce a monthly base price
within five working days after receiving information on which to
calculate the base price.
     (m) The formula for calculating the monthly base price in
paragraph (l) must be the state averages for Class I milk sold
to distributors in the state, plus or minus freight charges, and
simple state averages for Classes II, III, IV, and possibly
Class V, less the federal make allowance for each class.
     (n) A purchaser or processor from a contiguous state that
purchases from producers located in Minnesota may, at the option
of the purchaser or processor, elect to become part of the
payment pooling plan, provided that they agree to this act and
rules adopted under this act.
     Subd. 3. PAYMENT POOLING PLAN; REFERENDUM. (a) A payment
pooling plan is effective after it has been approved in a
referendum conducted by individually mailed ballots to all
Minnesota dairy producers. The balloting will be based on one
vote per entity and will include all Minnesota dairy farms. The
pooling plan must be approved by a simple majority of the
producers who vote in the referendum. If the board finds it
necessary, the board may conduct more than one referendum on any
pooling plan. Upon ratification by the dairy producers in
Minnesota, the board shall hold a hearing to receive and
consider evidence regarding a statewide pooling arrangement as a
method of payment of producer prices. At the hearing, the board
shall, among other things, specifically receive and consider
evidence concerning production and marketing practices that have
historically prevailed statewide.
     (b) The order of the board establishing the statewide
pooling arrangement may include other provisions that the board
considers necessary for the proper and efficient operation of
the pool. These provisions may include, but are not limited to:
     (1) a statewide base;
     (2) the establishment of a pool settlement fund to be
administered by the board for the purpose of receiving payments
from pool distributors or making payments to them as necessary
in order to operate and administer the statewide pool; and
     (3) the establishment of a pool expense fund for the
purpose of offsetting the costs to the board of administering
the pool, funded by a levy assessed against each pool producer.
     (c) An order of the board establishing a statewide pooling
arrangement that has been approved in a referendum may be
rescinded in the same manner as provided for approval of the
order. The order may be amended without a referendum if, prior
to amending the order, the board gives written notice of its
intended action and holds a public hearing.
     Sec. 10. 32A.09 ENFORCEMENT.
     Subdivision 1. REPORTS OF DEALERS; ACCOUNTING SYSTEM;
RECORDS. (a) The board may require producers, processors, and
distributors to file, either under oath or otherwise, reports
showing the person's production, sale, or distribution of milk
and any information considered necessary by the board that
pertains to the production, sale, or distribution of milk.
Failure or refusal to file a report when directed is a violation
for which the person may be fined at the discretion of the board.
     (b) The board shall adopt a uniform system of accounting to
be used by distributors to account for the usage of all milk
received by each distributor.
     (c) A distributor must keep a record of:
     (1) milk, cream, or dairy products received, detailed as to
location, names and addresses of suppliers, prices paid,
deductions or charges made, and the use to which the milk or
cream was put;
     (2) the quantity of each kind of milk or dairy product
manufactured and the quantity and price of milk or dairy
products sold;
     (3) milk, cream, or dairy products sold, classified as to
kind and grade, showing where sold, and the amount received in
payment;
     (4) the waste or loss of milk or dairy products;
     (5) the items of handling expense;
     (6) refrigeration facilities sold for storage purposes to
any person, showing types, sizes, and location of the facilities
and the original or duplicate original of all agreements
covering sales for them; and
     (7) other items the board considers necessary for the
proper enforcement of this chapter.
     Subd. 2. DISPOSITION OF FINES. All fines assessed by a
court for violation of this chapter and all fines received by
the board must be deposited in the milk marketing board account
in the agricultural fund.
     Subd. 3. COOPERATION WITH OTHER GOVERNMENTAL
AGENCIES. In order to secure a uniform system of milk price
control, the board shall confer and cooperate with the proper
authorities of other states and of the United States, including
the Secretary of Agriculture of the United States, and for those
purposes, the board may conduct joint hearings, issue joint or
concurrent orders, and exercise all its powers under this
chapter.
     Subd. 4. VIOLATIONS ARE MISDEMEANORS. (a) A person who
produces, sells, distributes, or handles milk in any way, except
as a consumer, in violation of this chapter, or who violates a
rule of the board, is guilty of a misdemeanor. Each day's
violation is a separate offense.
     (b) District courts have original jurisdiction in criminal
actions for violations of this chapter and in civil actions for
the recovery or enforcement of penalties provided for in this
chapter.
     Subd. 5. ADDITIONAL REMEDIES. The board may bring an
action to enforce compliance with this chapter, to enforce
compliance with an order or rule of the board under this
chapter, or to obtain a judicial interpretation of an order or
rule. In addition to any other remedy, the board may apply to
the district court of the district where the action arises for
relief by injunction, mandamus, or any other appropriate remedy
in equity without being compelled to allege or prove that an
adequate remedy at law does not otherwise exist.
     Sec. 11. 32A.10 CONSTRUCTION AND SEVERABILITY.
     (a) The provisions of this chapter are severable. If a
phrase, clause, sentence, or provision of this chapter is
declared to be contrary to the Minnesota Constitution or the
Constitution of the United States or its applicability to any
person or circumstance is held invalid, the validity of the
remainder of this chapter and its applicability to any person or
circumstance is not affected.
     (b) The provisions of this chapter must be liberally
construed to effectuate their purposes.
     Sec. 12. EFFECTIVE DATE.
     Sections 3 and 5 are effective the day following final
enactment."