HBA-BSM H.B. 1039 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1039 By: Homer Agriculture & Livestock 4/16/2001 Introduced BACKGROUND AND PURPOSE Currently, the federal milk marketing order pricing system establishes minimum prices but does not fully account for regional differences in the cost of producing milk. By design, the federal order program relies on state regulation for an adjustment in fluid milk prices to account for regional differences. However, since most milk now almost always crosses state lines to get to markets, the courts have ruled that individual states do not have the authority to regulate milk prices. As of 1999, Texas had lost over one third of its dairy farms and 10 percent of its milk production, a trend that may continue as long as the cost of milk production exceeds the price of milk. To remedy this situation, House Bill 1039 creates and sets forth regulations for participation by the state of Texas in the Southern Dairy Compact Commission. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 1039 amends the Agriculture Code to provide for the ratification of the Southern Dairy Compact and provides that the provisions of this bill and the state's delegation to the compact commission are subject to the Texas Sunset Act and the provisions of this bill expire and the commission is abolished on September 1, 2003, unless continued in existence. The bill sets forth the terms and qualifications of the Texas delegates to the compact commission. The bill also includes provisions that establish a maximum administration penalty of $500 for any violation of the bill. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect on the 91st day after adjournment.