2014 Kentucky Revised Statutes
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260.670 Southern Dairy Compact. (Effective upon contingency)
The Southern Dairy Compact is enacted into law and entered into with all other
jurisdictions legally joining therein in the form substantially as follows:
STATEMENT OF PURPOSE, FINDINGS, AND DECLARATION OF POLICY
Section 1. Statement of purpose, findings, and declaration of policy.
The purpose of this compact is to recognize the interstate character of the southern
dairy industry and the prerogative of the states under the United States Constitution
to form an interstate commission for the southern region. The mission of the
commission is to take such steps as are necessary to assure the continued viability
of dairy farming in the South, and to assure consumers of an adequate, local supply
of pure and wholesome milk.
The participating states find and declare that the dairy industry is an essential
agricultural activity of the South. Dairy farms, and associated suppliers, marketers,
processors, and retailers, are an integral component of the region's economy. Their
ability to provide a stable, local supply of pure, wholesome milk is a matter of great
importance to the health and welfare of the region.
The participating states further find that dairy farms are essential, and they are an
integral part of the region's rural communities. The farms preserve land for
agricultural purposes and provide needed economic stimuli for rural communities.
By entering into this compact, the participating states affirm that their ability to
regulate the price that southern dairy farmers receive for their product is essential to
the public interest. Assurance of a fair and equitable price for dairy farmers ensures
their ability to provide milk to the market and the vitality of the southern dairy
industry, with all the associated benefits.
Recent dramatic price fluctuations, with a pronounced downward trend, threaten the
viability and stability of the southern dairy region. Historically, individual state
regulatory action had been an effective emergency remedy available to farmers
confronting a distressed market. The system of federal orders, implemented by the
Agricultural Marketing Agreement Act of 1937, establishes only minimum prices paid
to producers for raw milk, without preempting the power of states to regulate milk
prices above the minimum levels so established.
In today's regional dairy marketplace, cooperative, rather than individual, state
action is needed to more effectively address the market disarray. Under our
constitutional system, properly authorized states acting cooperatively may exercise
more power to regulate interstate commerce than they may assert individually
without such authority. For this reason, the participating states invoke their authority
to act in common agreement, with the consent of Congress, under the compact
clause of the Constitution.
In establishing their constitutional regulatory authority over the region's fluid milk
market by this compact, the participating states declare their purpose that this
compact neither displace the system of federal orders nor encourage the merging of
federal orders. Specific provisions of the compact itself set forth this basic principle.
Designed as a flexible mechanism able to adjust to changes in a regulated
marketplace, the compact also contains a contingency provision should the system
of federal orders be discontinued. In that event, the interstate commission may
regulate the marketplace in lieu of the system of federal orders. This contingent
authority does not anticipate such a change, however, and should not be so
construed. It is only provided should developments in the market other than
establishment of this compact result in discontinuance of the system of federal
DEFINITIONS AND RULES OF CONSTRUCTION
Section 2. Definitions.
For the purposes of this compact, and of any supplemental or concurring legislation
enacted pursuant thereto, except as may be otherwise required by the context:
(1) "Class I milk" means milk disposed of in fluid form or as a fluid milk product,
subject to further definition in accordance with the principles expressed in subsection
(b) of Section 3 of this compact.
(2) "Commission" means the Southern Dairy Compact Commission established by
(3) "Commission marketing order" means regulations adopted by the commission
pursuant to Sections 9 and 10 of this compact in place of a terminated federal
marketing order or state dairy regulation. Such order may apply throughout the
region or in any part or parts thereof as defined in the regulations of the commission.
Such order may establish minimum prices for any or all classes of milk.
(4) "Compact" means this interstate compact.
(5) "Compact over-order price" means a minimum price required to be paid to
producers for Class I milk established by the commission in regulations adopted
pursuant to Sections 9 and 10 of this compact, which is above the price established
in federal marketing orders or by state farm price regulation in the regulated area.
Such price may apply throughout the region or in any part or parts thereof as defined
in the regulations of the commission.
(6) "Milk" means the lacteal secretion of cows and includes all skim, butterfat, or
other constituents obtained from separation or any other process. The term is used
in its broadest sense and may be further defined by the commission for regulatory
(7) "Partially regulated plant" means a milk plant not located in a regulated area but
having Class I distribution within such area. Commission regulations may exempt
plants having such distribution or receipts in amounts less than the limits defined
(8) "Participating state" means a state which has become a party to this compact by
the enactment of concurring legislation.
(9) "Pool plant" means any milk plant located in a regulated area.
(10) "Region" means the territorial limits of the states which are parties to this
(11) "Regulated area" means any area within the region governed by and defined in
regulations establishing a compact over-order price or commission marketing order.
(12) "State dairy regulation" means any state regulation of dairy prices and
associated assessments, whether by statute, marketing order, or otherwise.
Section 3. Rules of construction.
(a) This compact shall not be construed to displace existing federal milk marketing
orders or state dairy regulation in the region but to supplement them. In the event
some or all federal orders in the region are discontinued, the compact shall be
construed to provide the commission the option to replace them with one or more
commission marketing orders pursuant to this compact.
(b) This compact shall be construed liberally in order to achieve the purposes and
intent enunciated in Section 1 of this compact. It is the intent of this compact to
establish a basic structure by which the commission may achieve those purposes
through the application, adaptation, and development of the regulatory techniques
historically associated with milk marketing and to afford the commission broad
flexibility to devise regulatory mechanisms to achieve the purposes of this compact.
In accordance with this intent, the technical terms which are associated with market
order regulation and which have acquired commonly understood general meanings
are not defined in this compact, but the commission may further define the terms
used in this compact and develop additional concepts and define additional terms as
it may find appropriate to achieve its purposes.
Section 4. Commission established.
There is hereby created a commission to administer the compact, composed of
delegations from each state in the region. The commission shall be known as the
Southern Dairy Compact Commission. A delegation shall include not less than three
(3) nor more than five (5) persons. Each delegation shall include at least one (1)
dairy farmer who is engaged in the production of milk at the time of appointment or
reappointment, and one (1) consumer representative. Delegation members shall be
residents and voters of, and subject to such confirmation process as is provided for
in, the appointing state. Delegation members shall serve no more than three (3)
consecutive terms with no single term of more than four (4) years, and be subject to
removal for cause. In all other respects, delegation members shall serve in
accordance with the laws of the state represented. The compensation, if any, of the
members of a state delegation shall be determined and paid by each state, but their
expenses shall be paid by the commission.
Section 5. Voting requirements.
All actions taken by the commission, except for the establishment or termination of
an over-order price or commission marketing order, and the adoption, amendment,
or rescission of the commission's bylaws, shall be by majority vote of the delegations
present. Each state delegation shall be entitled to one (1) vote in the conduct of the
commission's affairs. Establishment or termination of an over-order price or
commission marketing order shall require at least a two-thirds (2/3) vote of the
delegations present. The establishment of a regulated area that covers all or part of
a participating state shall require also the affirmative vote of that state's delegation.
A majority of the delegations from the participating states shall constitute a quorum
for the conduct of the commission's business.
Section 6. Administration and management.
(a) The commission shall elect annually from among the members of the
participating state delegations a chairperson, a vice-chairperson, and a treasurer.
The commission shall appoint an executive director and fix his or her duties and
compensation. The executive director shall serve at the pleasure of the commission,
and, together with the treasurer, shall be bonded in an amount determined by the
commission. The commission may establish through its bylaws an executive
committee composed of one (1) member elected by each delegation.
(b) The commission shall adopt bylaws for the conduct of its business by a
two-thirds (2/3) vote and shall have the power by the same vote to amend and
rescind these bylaws. The commission shall publish its bylaws in convenient form
with the appropriate agency or officer in each of the participating states. The bylaws
shall provide for appropriate notice to the delegations of all commission meetings
and hearings and of the business to be transacted at such meetings or hearings.
Notice also shall be given to other agencies or officers of participating states as
provided by the laws of those states.
(c) The commission shall file an annual report with the Secretary of Agriculture of
the United States, and with each of the participating states by submitting copies to
the Governor, both houses of the legislature, and the head of the state department
having responsibilities for agriculture.
(d) In addition to the powers and duties elsewhere prescribed in this compact, the
commission may engage in all of the following:
(1) Sue and be sued in any state or federal court.
(2) Have a seal and alter the same at pleasure.
(3) Acquire, hold, and dispose of real and personal property by gift, purchase,
lease, license, or other similar manner, for its corporate purposes.
(4) Borrow money and issue notes, provide for the rights of the holders thereof, and
pledge the revenue of the commission as security therefor, subject to the provisions
of Section 18 of this compact.
(5) Appoint such officers, agents, and employees as it may deem necessary, and
prescribe their powers, duties, and qualifications.
(6) Create and abolish such offices, employments, and positions as it deems
necessary for the purposes of the compact and provide for the removal, term,
tenure, compensation, fringe benefits, pension, and retirement rights of its officers
(7) Retain personal services on a contract basis.
Section 7. Rule-making power.
In addition to the power to promulgate a compact over-order price or commission
marketing orders as provided by this compact, the commission is further empowered
to make and enforce such additional rules and regulations as it deems necessary to
implement any provisions of this compact, or to effectuate in any other respect the
purposes of this compact.
POWERS OF THE COMMISSION
Section 8. Powers to promote regulatory uniformity, simplicity, and interstate
The commission may:
(1) Investigate or provide for investigations or research projects designed to review
the existing laws and regulations of the participating states, to consider their
administration and costs, and to measure their impact on the production and
marketing of milk and their effects on the shipment of milk and milk products within
(2) Study and recommend to the participating states joint or cooperative programs
for the administration of the dairy marketing laws and regulations and prepare
estimates of cost savings and benefits of such programs.
(3) Encourage the harmonious relationships between the various elements in the
industry for the solution of their material problems. Conduct symposia or
conferences designed to improve industry relations, or a better understanding of
(4) Prepare and release periodic reports on activities and results of the
commission's efforts to the participating states.
(5) Review the existing marketing system for milk and milk products and
recommend changes in the existing structure for assembly and distribution of milk
which may assist, improve, or promote more efficient assembly and distribution of
(6) Investigate costs and charges for producing, hauling, handling, processing,
distributing, selling, and for all other services, performed with respect to milk.
(7) Examine current economic forces affecting producers, probable trends in
production and consumption, the level of dairy farm prices in relation to costs, the
financial conditions of dairy farmers, and the need for an emergency order to relieve
critical conditions on dairy farms.
Section 9. Equitable farm prices.
(a) The powers granted in this section and Section 10 of this compact shall apply
only to the establishment of a compact over-order price, so long as federal milk
marketing orders remain in effect in the region. In the event that any or all such
orders are terminated, this article authorizes the commission to establish one (1) or
more commission marketing orders, as provided in this compact, in the region or
parts thereof as defined in the order.
(b) A compact over-order price established pursuant to this section shall apply only
to Class I milk. Such compact over-order price shall not exceed one dollar and fifty
cents ($1.50) per gallon at Atlanta, Georgia; however, this compact over-order price
shall be adjusted upward or downward at other locations in the region to reflect
differences in minimum federal order prices. Beginning in 1990, and using that year
as a base, the foregoing one dollar and fifty cents ($1.50) per gallon maximum shall
be adjusted annually by the rate of change in the Consumer Price Index as reported
by the Bureau of Labor Statistics of the United States Department of Labor. For
purposes of the pooling and equalization of an over-order price, the value of milk
used in other use classifications shall be calculated at the appropriate class price
established pursuant to the applicable federal order or state dairy regulation and the
value of unregulated milk shall be calculated in relation to the nearest prevailing
class price in accordance with and subject to such adjustments as the commission
may prescribe in regulations.
(c) A commission marketing order shall apply to all classes and uses of milk.
(d) The commission may establish a compact over-order price for milk to be paid by
pool plants and partially regulated plants. The commission also may establish a
compact over-order price to be paid by all other handlers receiving milk from
producers located in a regulated area. This price shall be established either as a
compact over-order price or by one or more commission marketing orders.
Whenever such a price has been established by either type of regulation, the legal
obligation to pay such price shall be determined solely by the terms and purpose of
the regulation without regard to the situs of the transfer of title, possession, or any
other factors not related to the purposes of the regulation and this compact.
Producer-handlers as defined in an applicable federal market order shall not be
subject to a compact over-order price. The commission shall provide for similar
treatment of producer-handlers under commission marketing orders.
(e) In determining the price, the commission shall consider the balance between
production and consumption of milk and milk products in the regulated area, the
costs of production including, but not limited to, the price of feed, the cost of labor
including the reasonable value of the producer's own labor and management,
machinery expense and interest expense, the prevailing price for milk outside the
regulated area, the purchasing power of the public, and the price necessary to yield
a reasonable return to the producer and distributor.
(f) When establishing a compact over-order price, the commission shall take such
other action as is necessary and feasible to help ensure that the over-order price
does not cause or compensate producers so as to generate local production of milk
in excess of those quantities necessary to assure consumers of an adequate supply
for fluid purposes.
(g) The commission shall whenever possible enter into agreements with state or
federal agencies for exchange of information or services for the purpose of reducing
regulatory burden and cost of administering the compact. The commission may
reimburse other agencies for the reasonable cost of providing these services.
Section 10. Optional provisions for pricing order.
Regulations establishing a compact over-order price or a commission marketing
order may contain, but shall not be limited to, any of the following:
(1) Provisions classifying milk in accordance with the form in which or purpose for
which it is used, or creating a flat pricing program.
(2) With respect to a commission marketing order only, provisions establishing or
providing a method for establishing separate minimum prices for each use
classification prescribed by the commission, or a single minimum price for milk
purchased from producers or associations of producers.
(3) With respect to an over-order minimum price, provisions establishing or
providing a method for establishing such minimum price for Class I milk.
(4) Provisions for establishing either an over-order price or a commission marketing
order may make use of any reasonable method for establishing such price or prices
including flat pricing and formula pricing. Provision may also be made for location
adjustments, zone differentials, and competitive credits with respect to regulated
handlers who market outside the regulated area.
(5) Provisions for the payment to all producers and associations of producers
delivering milk to all handlers of uniform prices for all milk so delivered, irrespective
of the uses made of such milk by the individual handler to whom it is delivered, or for
the payment of producers delivering milk to the same handler of uniform prices for all
milk delivered by them.
a. With respect to regulations establishing a compact over-order price, the
commission may establish one (1) equalization pool within the regulated area for the
sole purpose of equalizing returns to producers throughout the regulated area.
b. With respect to any commission marketing order, as defined in Section 2,
subdivision (3), of this compact, which replaces one (1) or more terminated federal
orders or state dairy regulation, the marketing area of now separate state or federal
orders shall not be merged without the affirmative consent of each state, voting
through its delegation, which is partly or wholly included within any such new
(6) Provisions requiring persons who bring Class I milk into the regulated area to
make compensatory payments with respect to all such milk to the extent necessary
to equalize the cost of milk purchased by handlers subject to a compact over-order
price or commission marketing order. No such provisions shall discriminate against
milk producers outside the regulated area. The provisions for compensatory
payments may require payment of the difference between the Class I price required
to be paid for such milk in the state of production by a federal milk marketing order
or state dairy regulation and the Class I price established by the compact over-order
price or commission marketing order.
(7) Provisions specially governing the pricing and pooling of milk handled by
partially regulated plants.
(8) Provisions requiring that the account of any person regulated under the compact
over-order price shall be adjusted for any payments made to or received by such
persons with respect to a producer settlement fund of any federal or state milk
marketing order or other state dairy regulation within the regulated area.
(9) Provision requiring the payment by handlers of an assessment to cover the
costs of the administration and enforcement of such order pursuant to subsection (a)
of Section 18 of Article VII of this compact.
(10) Provisions for reimbursement to participants of the Women, Infants and
Children Special Supplemental Food Program of the United States Child Nutrition
Act of 1966.
(11) Other provisions and requirements as the commission may find are necessary
or appropriate to effectuate the purposes of this compact and to provide for the
payment of fair and equitable minimum prices to producers.
Section 11. Rule-making procedure.
Before promulgation of any regulations establishing a compact over-order price or
commission marketing order, including any provision with respect to milk supply
under subsection (f) of Section 9 of this compact, or amendment thereof, as
provided in Article IV of this compact, the commission shall conduct an informal
rule-making proceeding to provide interested persons with an opportunity to present
data and views. Such rule-making proceeding shall be governed by Section 4 of the
Federal Administrative Procedure Act, as amended (5 U.S.C. sec. 553). In addition,
the commission shall, to the extent practicable, publish notice of rule-making
proceedings in the official register of each participating state. Before the initial
adoption of regulations establishing a compact over-order price or a commission
marketing order and thereafter before any amendment with regard to prices or
assessments, the commission shall hold a public hearing. The commission may
commence a rule-making proceeding on its own initiative or may in its sole discretion
act upon the petition of any person including individual milk producers, any
organization of milk producers or handlers, general farm organizations, consumer or
public interest groups, and local, state or federal officials.
Section 12. Findings and referendum.
(a) In addition to the concise general statement of basis and purpose required by
section 4(b) of the Federal Administrative Procedure Act, as amended (5 U.S.C. sec.
553 (c)), the commission shall make findings of fact with respect to:
(1) Whether the public interest will be served by the establishment of minimum milk
prices to dairy farmers under Article IV of this compact.
(2) What level of prices will assure that producers receive a price sufficient to cover
their costs of production and will elicit an adequate supply of milk for the inhabitants
of the regulated area and for manufacturing purposes.
(3) Whether the major provisions of the order, other than those fixing minimum milk
prices, are in the public interest and are reasonably designed to achieve the
purposes of the order.
(4) Whether the terms of the proposed regional order or amendment are approved
by producers as provided in Section 13 of this compact.
Section 13. Producer referendum.
(a) For the purpose of ascertaining whether the issuance or amendment of
regulations establishing a compact over-order price or a commission marketing
order, including any provision with respect to milk supply under subsection (f) of
Section 9 of this compact, is approved by producers, the commission shall conduct a
referendum among producers. The referendum shall be held in a timely manner, as
determined by regulation of the commission. The terms and conditions of the
proposed order or amendment shall be described by the commission in the ballot
used in the conduct of the referendum, but the nature, content, or extent of such
description shall not be a basis for attacking the legality of the order or any action
(b) An order or amendment shall be deemed approved by producers if the
commission determines that it is approved by at least two-thirds (2/3) of the voting
producers who, during a representative period determined by the commission, have
been engaged in the production of milk the price of which would be regulated under
the proposed order or amendment.
(c) For purposes of any referendum, the commission shall consider the approval or
disapproval by any cooperative association of producers, qualified under the
provisions of the Act of Congress of February 18, 1922, as amended, known as the
Capper-Volstead Act, bona fide engaged in marketing milk, or in rendering services
for or advancing the interests of producers of such commodity, as the approval or
disapproval of the producers who are members or stockholders in, or under contract
with, such cooperative association of producers, except as provided in subdivision
(1) of this subsection and subject to the provisions of subdivisions (2) through (5) of
(1) No cooperative that has been formed to act as a common marketing agency for
both cooperatives and individual producers shall be qualified to block vote for either.
(2) Any cooperative that is qualified to block vote shall, before submitting its
approval or disapproval in any referendum, give prior written notice to each of its
members as to whether and how it intends to cast its vote. The notice shall be given
in a timely manner as established, and in the form prescribed, by the commission.
(3) Any producer may obtain a ballot from the commission in order to register
approval or disapproval of the proposed order.
(4) A producer who is a member of a cooperative which has provided notice of its
intent to approve or not to approve a proposed order, and who obtains a ballot and
with such ballot expresses his or her approval or disapproval of the proposed order,
shall notify the commission as to the name of the cooperative of which he or she is a
member, and the commission shall remove such producer's name from the list
certified by such cooperative with its corporate vote.
(5) In order to ensure that all milk producers are informed regarding a proposed
order, the commission shall notify all milk producers that an order is being
considered and that each producer may register his or her approval or disapproval
with the commission either directly or through his or her cooperative.
Section 14. Termination of over-order price or marketing order.
(a) The commission shall terminate any regulations establishing an over-order price
or commission marketing order issued under this article whenever it finds that such
order or price obstructs or does not tend to effectuate the declared policy of this
(b) The commission shall terminate any regulations establishing an over-order price
or a commission marketing order issued under this article whenever it finds that such
termination is favored by a majority of the producers who, during a representative
period determined by the commission, have been engaged in the production of milk,
the price of which is regulated by such order; but such termination shall be effective
only if announced on or before such date as may be specified in such marketing
agreement or order.
(c) The termination or suspension of any order or provision thereof, shall not be
considered an order within the meaning of this article and shall require no hearing,
but shall comply with the requirements for informal rule making prescribed by
Section 4 of the Federal Administrative Procedure Act, as amended (5 U.S.C. sec.
Section 15. Records, reports, access to premises.
(a) The commission may by rule and regulation prescribe recordkeeping and
reporting requirements for all regulated persons. For purposes of the administration
and enforcement of this compact, the commission may examine the books and
records of any regulated person relating to his or her milk business and for that
purpose, the commission's properly designated officers, employees, or agents shall
have full access during normal business hours to the premises and records of all
(b) Information furnished to or acquired by the commission officers, employees, or
its agents pursuant to this section shall be confidential and not subject to disclosure
except to the extent that the commission deems disclosure to be necessary in any
administrative or judicial proceeding involving the administration or enforcement of
this compact, an over-order price, a compact marketing order, or other regulations of
the commission. The commission may adopt rules further defining the confidentiality
of information pursuant to this section. Nothing in this section shall be deemed to
prohibit (i) the issuance of general statements based upon the reports of a number
of handlers, which do not identify the information furnished by any person, or (ii) the
publication by direction of the commission of the name of any person violating any
regulation of the commission, together with a statement of the particular provisions
violated by such person.
(c) No officer, employee, or agent of the commission shall intentionally disclose
information, by inference or otherwise, that is made confidential pursuant to this
section. Any person violating the provisions of this section shall, upon conviction, be
subject to a fine of not more than one thousand dollars ($1,000) or to imprisonment
for not more than one (1) year, or both, and shall be removed from office. The
commission shall refer any allegation of a violation of this section to the appropriate
state enforcement authority or United States Attorney.
Section 16. Subpoena, hearings, and judicial review.
(a) The commission is hereby authorized and empowered by its members and its
properly designated officers to administer oaths and issue subpoenas throughout all
signatory states to compel the attendance of witnesses and the giving of testimony
and the production of other evidence.
(b) Any handler subject to an order may file a written petition with the commission
stating that any order or any provision of any such order or any obligation imposed in
connection therewith is not in accordance with law and praying for a modification
thereof or to be exempted therefrom. The handler shall thereupon be given an
opportunity for a hearing upon such petition, in accordance with regulations made by
the commission. After such hearing, the commission shall make a ruling upon the
prayer of such petition which shall be final, if in accordance with law.
(c) The district courts of the United States in any district in which the handler is an
inhabitant, or has his or her principal place of business, are hereby vested with
jurisdiction to review such ruling, provided a complaint for that purpose is filed within
thirty (30) days from the date of the entry of the ruling. Service of process in these
proceedings may be had upon the commission by delivering to it a copy of the
complaint. If the court determines that the ruling is not in accordance with law, it
shall remand such proceedings to the commission with directions either (i) to make
such ruling as the court shall determine to be in accordance with law, or (ii) to take
such further proceedings as, in its opinion, the law requires. The pendency of
proceedings instituted pursuant to this subdivision shall not impede, hinder, or delay
the commission from obtaining relief pursuant to Section 17 of this compact. Any
proceedings brought pursuant to Section 17 of this compact, except where brought
by way of counterclaim in proceedings instituted pursuant to this section, shall abate
whenever a final decree has been rendered in proceedings between the same
parties, and covering the same subject matter, instituted pursuant to this section.
Section 17. Enforcement with respect to handlers.
(a) Any violation by a handler of the provisions of regulation establishing an
over-order price or a commission marketing order, or other regulations adopted
pursuant to this compact shall:
(1) Constitute a violation of the laws of each of the signatory states. Such violation
shall render the violator subject to a civil penalty in an amount as may be prescribed
by the laws of each of the participating states, recoverable in any state or federal
court of competent jurisdiction. Each day such violation continues shall constitute a
(2) Constitute grounds for the revocation of license or permit to engage in the milk
business under the applicable laws of the participating states.
(b) With respect to handlers, the commission shall enforce the provisions of this
compact, regulations establishing an over-order price, a commission marketing
order, or other regulations adopted hereunder by:
(1) Commencing an action for legal or equitable relief brought in the name of the
commission in any state or federal court of competent jurisdiction; or
(2) Referral to the state agency for enforcement by judicial or administrative remedy
with the agreement of the appropriate state agency of a participating state.
(c) With respect to handlers, the commission may bring an action for injunction to
enforce the provisions of this compact or the order or regulations adopted
thereunder without being compelled to allege or prove that an adequate remedy of
law does not exist.
Section 18. Finance of start-up and regular costs.
(a) To provide for its start-up costs, the commission may borrow money pursuant to
its general power under Section 6, subdivision (d), paragraph 4 of this compact. In
order to finance the cost of administration and enforcement of this compact,
including payback of start-up costs, the commission may collect an assessment from
each handler who purchases milk from producers within the region. If imposed, this
assessment shall be collected on a monthly basis for up to one (1) year from the
date the commission convenes, in an amount not to exceed $0.015 per hundred
weight of milk purchased from producers during the period of the assessment. The
initial assessment may apply to the projected purchases of handlers for the two (2)
month period following the date the commission convenes. In addition, if regulations
establishing an over-order price or a compact marketing order are adopted, they
may include an assessment for the specific purpose of their administration. These
regulations shall provide for establishment of a reserve for the commission's ongoing
(b) The commission shall not pledge the credit of any participating state or of the
United States. Notes issued by the commission and all other financial obligations
incurred by it shall be its sole responsibility, and no participating state or the United
States shall be liable therefor.
Section 19. Audit and accounts.
(a) The commission shall keep accurate accounts of all receipts and disbursements,
which shall be subject to the audit and accounting procedures established under its
rules. In addition, all receipts and disbursements of funds handled by the
commission shall be audited yearly by a qualified public accountant, and the report
of the audit shall be included in and become part of the annual report of the
(b) The accounts of the commission shall be open at any reasonable time for
inspection by duly constituted officers of the participating states and by any persons
authorized by the commission.
(c) Nothing contained in this article shall be construed to prevent commission
compliance with laws relating to audit or inspection of accounts by or on behalf of
any participating state or of the United States.
ENTRY INTO FORCE; ADDITIONAL MEMBERS; AND WITHDRAWAL
Section 20. Entry into force; additional members.
The compact shall enter into force effective when enacted into law by any three (3)
states of the group of states composed of Alabama, Arkansas, Florida, Georgia,
Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South
Carolina, Tennessee, Texas, Virginia, and West Virginia, and when the consent of
Congress has been obtained.
Section 21. Withdrawal from compact.
Any participating state may withdraw from this compact by enacting a statute
repealing the same, but no such withdrawal shall take effect until one (1) year after
notice in writing of the withdrawal is given to the commission and the governors of all
the participating states. No withdrawal shall affect any liability already incurred by or
chargeable to a participating state prior to the time of such withdrawal.
Section 22. Severability.
If any part or provision of this compact is adjudged invalid by any court, such
judgment shall be confined in its operation to the part or provision directly involved in
the controversy in which such judgment shall have been rendered and shall not
affect or impair the validity of the remainder of this compact. In the event Congress
consents to this compact subject to conditions, said conditions shall not impair the
validity of this compact when said conditions are accepted by three (3) or more
compacting states. A compact state may accept the conditions of Congress by
implementation of this compact.
History: Created 1998 Ky. Acts ch. 471, sec. 1, effective upon contingency.
Legislative Research Commission Note. 1998 Ky. Acts ch. 471, sec. 4, provides:
"This Act becomes effective at such time as three states of the group of states
given in Section 20 of the Southern Dairy Compact set out in Section 1 (KRS
260.670) of this Act enact that compact into law, substantially in the form given
in this Act, and when the consent of the Congress has been obtained to that
CHAPTER 260 - MARKETING OF AGRICULTURAL PRODUCTS
260.670 Southern Dairy Compact. (Effective upon contingency)
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