To establish a counter-cyclical income support program for dairy producers.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Dairy Farmer and Rural 
Community Rescue Act of 2002''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Board.--The term ``Board'' means a Regional Supply 
        Management Board.
            (2) Class i, ii, iii, and iv milk.--The terms ``Class I 
        milk'', ``Class II milk'', ``Class III milk'', and ``Class IV 
        milk'' mean milk classified as Class I, II, III, or IV milk, 
        respectively, under an order.
            (3) District.--The term ``District'' means a Regional 
        Supply Management District.
            (4) Eligible producer.--The term ``eligible producer'' 
        means an individual or entity that directly or indirectly has 
        an interest in the production of milk.
            (5) Eligible production.--The term ``eligible production'' 
        means the lesser of--
                    (A) the quantity of milk produced by an eligible 
                producer during a month; or
                    (B) 230,000 pounds per month.
            (6) Marketing area.--The term ``marketing area'' means a 
        marketing area subject to an order.
            (7) Order.--The term ``order'' means--
                    (A) an order issued under section 8c of the 
                Agricultural Adjustment Act (7 U.S.C. 608c), reenacted 
                with amendments by the Agricultural Marketing Agreement 
                Act of 1937; or
                    (B) a comparable State order, as determined by the 
                Secretary.
            (8) Participating state.--The term ``participating State'' 
        means a State that is participating in the program authorized 
        by section 3.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (10) State.--The term `State' means one of the 48 
        contiguous States of the United States.
            (11) Trust fund.--The term ``Trust Fund'' means the 
        National Dairy Producers Trust Fund.

SEC. 3. NATIONAL COUNTER-CYCLICAL INCOME SUPPORT PROGRAM FOR DAIRY 
              PRODUCERS.

    (a) Income Support for Eligible Producers for Milk Sold to 
Processors in Participating States.--During each of calendar years 2003 
through 2011, the Secretary shall carry out a program under this 
section to support the income of eligible producers for milk sold to 
processors in participating States.
    (b) Participating States.--
            (1) Automatic participation.--Each State shall be a 
        participant in the program established by the Secretary under 
        this section unless the State elects to withdrawal from the 
        program as provided in paragraph (2).
            (2) Withdrawal.--For a State to withdraw from participation 
        in the program under this section, the Governor of the State 
        (with the concurrence of the legislature of the State) shall 
        provide written notice to the Secretary of the withdrawal of 
        the State from participation in the program.
            (3) Effective date of withdrawal.--In the case of written 
        notice submitted by a State during the 180-day period beginning 
        on the date of the enactment of this Act, the withdrawal of the 
        State shall take effect on the date on which the notice is 
        submitted to the Secretary. After the end of such period, the 
        withdrawal of the State shall take effect on the date that is 
        one year after the date on which the notice is provided to the 
        Secretary.
    (c) Regional Supply Management Districts.--To carry out this 
section, the Secretary shall establish 5 Regional Supply Management 
Districts to be composed of the following States, unless and until the 
States withdrawal from participation in the program under subsection 
(b):
            (1) Northeast district.--A Northeast District consisting of 
        the States of Connecticut, Delaware, Maine, Maryland, 
        Massachusetts, New Hampshire, New Jersey, New York, Ohio, 
        Pennsylvania, Rhode Island, and Vermont.
            (2) Southern district.--A Southern District consisting of 
        the States of Alabama, Arkansas, Florida, Georgia, Kansas, 
        Kentucky, Louisiana, Mississippi, Missouri, Nebraska, New 
        Mexico, North Carolina, Oklahoma, South Carolina, Texas, 
        Tennessee, Virginia, and West Virginia.
            (3) Upper midwest district.--An Upper Midwest District 
        consisting of the States of Illinois, Indiana, Iowa, Michigan, 
        Minnesota, North Dakota, South Dakota, and Wisconsin.
            (4) Intermountain district.--An Intermountain District 
        consisting of the States of Arizona, Colorado, Idaho, Montana, 
        Nevada, Utah, and Wyoming.
            (5) Pacific district.--A Pacific District consisting of the 
        States of California, Oregon, and Washington.
    (d) Regional Supply Management Boards.--
            (1) In general.--Each District shall be administered by a 
        Regional Supply Management Board.
            (2) Composition.--The Board of a District shall be composed 
        of not less than two, and not more than three, members from 
        each participating State in the District, appointed by the 
        Secretary from nominations submitted by the Governor of the 
State.
            (3) Nominations.--The Governor of a participating State 
        shall nominate at least five residents of the State to serve on 
        the Board, of which--
                    (A) at least one nominee shall be an eligible 
                producer at the time of nomination; and
                    (B) at least one nominee shall be a consumer 
                representative.
    (e) National Dairy Producers Trust Fund.--
            (1) Establishment and funding.--There is established in the 
        Treasury of the United States a trust fund to be known as the 
        National Dairy Producers Trust Fund, which shall consist of--
                    (A) the payments received by the Secretary and 
                deposited in the Trust Fund under subsection (g); and
                    (B) the payments made by the Secretary to the Trust 
                Fund under subsection (i).
            (2) Expenditures.--Amounts in the Trust Fund shall be 
        available to the Secretary, to the extent provided for in 
        advance in an appropriations Act, to carry out this section.
    (f) Administrative and Increased Food Assistance Costs.--The 
Secretary shall use amounts in the Trust Fund to cover--
            (1) administrative costs incurred by the Secretary and 
        Boards in carrying out this section; and
            (2) the increased cost of any milk and milk products 
        provided under any food assistance program administered by the 
        Secretary that results from carrying out this section.
    (g) Payments From Processors to Trust Fund.--
            (1) In general.--During any month for which the Secretary 
        estimates that the average price paid by processors for Class I 
        milk in a District will not exceed a target price applicable to 
        that District, each processor in a participating State in the 
        District that purchases Class I milk from an eligible producer 
        during the month shall pay to the Secretary for deposit in the 
        Trust Fund an amount obtained by multiplying--
                    (A) the payment rate determined under subparagraph 
                (B); by
                    (B) the quantity of Class I milk purchased from the 
                eligible producer during the month.
            (2) Payment rate.--The payment rate for a payment made by a 
        processor that purchases Class I milk in a participating State 
        in a District under paragraph (1)(A) shall be equal to--
                    (A) in the case of a marketing area in the 
                District, the difference between the target price for 
                that marketing area and the minimum price required to 
                be paid to eligible producers for Class I milk in that 
                marketing area; and
                    (B) in the case of an area in the District not 
                covered by an order, the difference between the target 
                price for the area and the minimum price determined by 
                the Secretary, taking into account the minimum price 
                referred to in subparagraph (A) in adjacent marketing 
                areas.
    (h) Target Prices.--For purposes of subsection (g), the following 
target prices shall be in effect:
            (1) $17.50 per hundredweight, in the case of the Northeast 
        marketing area.
            (2) $17.35 per hundredweight, in the case of the 
        Appalachian marketing area.
            (3) $18.25 per hundredweight, in the case of the Florida 
        marketing area.
            (4) $17.35 per hundredweight, in the case of the Southeast 
        marketing area.
            (5) $16.05 per hundredweight, in the case of the Upper 
        Midwest marketing area.
            (6) $16.25 per hundredweight, in the case of the Central 
        marketing area.
            (7) $16.25 per hundredweight, in the case of the Mideast 
        marketing area.
            (8) $16.15 per hundredweight, in the case of the Pacific 
        Northwest marketing area.
            (9) $17.25 per hundredweight, in the case of the Southwest 
        marketing area.
            (10) $16.60 per hundredweight, in the case of the Arizona-
        Las Vegas marketing area.
            (11) $16.15 per hundredweight, in the case of the Western 
        marketing area.
            (12) In the case of an area not covered by an order, a 
        price per hundredweight determined by the Secretary, taking 
        into account the target prices in adjacent marketing areas.
    (i) Counter-Cyclical Payments From Secretary to Trust Fund.--
            (1) In general.--To the extent provided for in advance in 
        an appropriations Act, the Secretary shall use the funds, 
        facilities, and authorities of the Commodity Credit Corporation 
        to make a payment each month to the Trust Fund in an amount 
        determined by multiplying--
                    (A) the payment rate determined under paragraph 
                (2); by
                    (B) the quantity of eligible production of Class 
                II, Class III, and Class IV milk sold in the various 
                Districts during the month, as determined by the 
                Secretary.
            (2) Payment rate.--The payment rate for a payment made to 
        the Trust Fund for a month under paragraph (1)(A) shall equal 
        25 percent of the difference between--
                    (A) $13.00 per hundredweight; and
                    (B) the weighted average of the price received by 
                producers in each District for Class III milk during 
                the month, as determined by the Secretary.
    (j) Payments From Trust Fund to Boards.--
            (1) In general.--The Secretary shall use any amounts in the 
        Trust Fund that remain after providing the compensation 
        required under subsection (f) to make monthly payments to 
        Boards.
            (2) Amount.--The amount of a payment made to a Board of a 
        District for a month under paragraph (1) shall bear the same 
        ratio to payments made to all Boards for the month as the 
eligible production sold in the District during the month bears to 
eligible production sold in all Districts.
            (3) Payments by boards to producers.--
                    (A) In general.--With the approval of the 
                Secretary, a Board of a District shall use payments 
                received under paragraph (2) to make payments to 
                eligible producers for eligible production of milk that 
                is commercially sold in a participating State in the 
                District.
                    (B) Supply management.--In carrying out 
                subparagraph (A), a Board of a District may--
                            (i) use a portion of the payments described 
                        in subparagraph (A) to provide bonuses or other 
                        incentives to eligible producers for eligible 
                        production to manage the supply of milk 
                        produced in the District; and
                            (ii) request the Secretary to review a 
                        proposed action under clause (i).
                    (C) Reimbursement of commodity credit 
                corporation.--
                            (i) In general.--If the Secretary 
                        determines that the Commodity Credit 
                        Corporation has incurred additional costs to 
                        carry out the milk price support program as a 
                        result of overproduction of milk due to the 
                        operation of this section in a District, the 
                        Secretary shall require the Board of the 
                        District to reimburse the Commodity Credit 
                        Corporation for the additional costs.
                            (ii) Board assessment.--The Board of the 
                        District may impose an assessment on the sale 
                        of milk within participating States in the 
                        District to compensate the Commodity Credit 
                        Corporation for the additional costs.

SEC. 4. COUNTER-CYCLICAL PAYMENTS FOR ELIGIBLE PRODUCERS FOR MILK SOLD 
              TO PROCESSORS IN NONPARTICIPATING STATES.

    (a) Payments to Eligible Producers.--To the extent provided for in 
advance in an appropriations Act, during each of calendar years 2003 
through 2011, the Secretary shall use the funds, facilities, and 
authorities of the Commodity Credit Corporation to make payments to an 
eligible producer in a District for milk sold to processors in a State 
that is not a participating State in an amount determined by 
multiplying--
            (1) the payment rate determined under subsection (b); by
            (2) the payment quantity determined under subsection (c).
    (b) Payment Rate.--The payment rate for a payment made to an 
eligible producer in a District for a month under subsection (a) shall 
equal 25 percent of the difference between--
            (1) $13.00 per hundredweight; and
            (2) the average price received by producers in the District 
        for Class III milk during the month, as determined by the 
        Secretary.
    (c) Payment Quantity.--The payment quantity for a payment made to 
an eligible producer in a District for a month under subsection (a) 
shall be equal to--
            (1) the quantity of eligible production of Class II, Class 
        III, and Class IV milk for the eligible producer during the 
        month, as determined by the Secretary; less
            (2) the quantity of any milk that is sold by the eligible 
        producer to a processor in a participating State during the 
        month.

SEC. 5. PAYMENT LIMITATION.

    In determining the amount of payments made for eligible production 
under this Act, no individual or entity directly or indirectly may be 
paid on production in excess of 230,000 pounds of milk per month.

Summary: Family Dairy Farmer and Rural Community Rescue Act of 2002 - Directs the Secretary of Agriculture to carry out counter-cyclical income support programs for dairy producers in participating and nonparticipating States through 2011. Limits individual or entity payments to 230,000 pounds of milk per month. Provides with respect to the participating State program for: (1) specified marketing area target prices, (2) five regional supply management districts, (3) specified payment rates. And (4) establishment in the Treasury of a National Dairy Producers Trust Fund.