I 

108TH CONGRESS 

1ST SESSION H. R. 1990

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

IN THE HOUSE OF REPRESENTATIVES 

MAY 6, 2003

Mr. SANDERS (for himself and Mr. OBEY) introduced the following bill; which 

was referred to the Committee on Agriculture 

A BILL

To establish a counter-cyclical income support program for 

dairy producers.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Family Dairy Farmer 

5 Preservation Act of 2003’’. 

6 SEC. 2. NATIONAL COUNTER-CYCLICAL INCOME SUPPORT 

7 PROGRAM FOR DAIRY PRODUCERS. 

8 (a) INCOME SUPPORT FOR ELIGIBLE PRODUCERS.—

9 During the period beginning on the date of the enactment 

10 of this Act and ending on September 30, 2011, the Sec-
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1 retary shall carry out a program to support the income 

2 of eligible producers of milk. 

3 (b) DEFINITIONS.—In this section: 

4 (1) The term ‘‘Board’’ means a Regional Dairy 

5 Board established under subsection (e). 

6 (2) The terms ‘‘Class I milk’’, ‘‘Class II milk’’, 

7 ‘‘Class III milk’’, and ‘‘Class IV milk’’ mean milk 

8 (including components of milk) classified as Class I, 

9 II, III, or IV milk, respectively, under an order. 

10 (3) The term ‘‘Class I mover’’ means the great11 er of—

12 (A) the Advanced Class III milk price (as 

13 determined under section 1000.50(q)(4)(i) of 

14 title 7, Code of Federal Regulations (or a suc15 cessor regulation)); and 

16 (B) the Advanced Class IV milk price (as 

17 determined under section 1000.50(q)(4)(ii) of 

18 title 7, Code of Federal Regulations (or a suc19 cessor regulation)). 

20 (4) The term ‘‘covered processor’’ means a milk 

21 plant located in a participating State or a milk plant 

22 that, while not located in a participating State, dis23 tributes Class I milk products in a participating 

24 State. 
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1 (5) The term ‘‘District’’ means a Regional 

2 Dairy District established under subsection (d). 

3 (6) The term ‘‘eligible producer’’ means an in4 dividual or entity that directly or indirectly has an 

5 interest in the production of milk in a participating 

6 State. 

7 (7) The term ‘‘eligible production’’ means the 

8 lesser of—

9 (A) the quantity of milk produced by an el10 igible producer during a month; or 

11 (B) 500,000 pounds per month. 

12 (8) The term ‘‘marketing area’’ means a mar13 keting area subject to an order. 

14 (9) The term ‘‘order’’ means an order issued 

15 under section 8c of the Agricultural Adjustment Act 

16 (7 U.S.C. 608c), reenacted with amendments by the 

17 Agricultural Marketing Agreement Act of 1937, or a 

18 comparable State order, as determined by the Sec19 retary. 

20 (10) The term ‘‘participating State’’ means a 

21 State covered by subsection (c). 

22 (11) The term ‘‘Secretary’’ means the Secretary 

23 of Agriculture. 

24 (12) The term ‘‘State’’ means each of the 48 

25 contiguous States of the United States. 
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1 (13) The term ‘‘Trust Fund’’ means the Na2 tional Dairy Producers Trust Fund. 

3 (c) PARTICIPATING STATES.—

4 (1) SPECIFIED STATES.—The following States 

5 are participating States for purposes of the program 

6 authorized by this section: Alabama, Arkansas, Con7 necticut, Delaware, Georgia, Kansas, Kentucky, 

8 Louisiana, Maine, Maryland, Massachusetts, Mis9 sissippi, Missouri, New Hampshire, New Jersey, 

10 New York, North Carolina, Oklahoma, Pennsylvania, 

11 Rhode Island, South Carolina, Tennessee, Vermont, 

12 Virginia, and West Virginia. 

13 (2) OTHER STATES.—The Governor of a State 

14 not specified in paragraph (1) may designate the 

15 State as a participating State by providing notice to 

16 the Secretary in the manner prescribed by the Sec17 retary. 

18 (3) WITHDRAWAL.—To withdraw a State from 

19 participation in the program, the Governor of the 

20 State (with the concurrence of the legislature of the 

21 State) shall provide written notice to the Secretary 

22 of the withdrawal of the State. 

23 (4) EFFECTIVE DATE OF WITHDRAWAL.—The 

24 withdrawal of a State from participation in the pro25 gram takes effect—
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1 (A) in the case of written notice provided 

2 during the 180-day period beginning on the 

3 date of the enactment of this Act, on the date 

4 on which the notice is provided to the Secretary 

5 under paragraph (3); and 

6 (B) in the case of written notice provided 

7 after such period, on the date that is one year 

8 after the date on which the notice is provided 

9 to the Secretary under paragraph (3). 

10 (5) EFFECT OF PARTICIPATION ON ELIGIBILITY

11 FOR OTHER DAIRY PROGRAMS.—Eligible producers 

12 operating in a participating State may not receive 

13 payments under section 1502 of the Farm Security 

14 and Rural Investment Act of 2002 (7 U.S.C. 7982), 

15 notwithstanding any contract entered into under 

16 subsection (b) of such section before the date of the 

17 enactment of this Act. Payments made under such 

18 a contract before such date shall not be recovered, 

19 but no further payments shall be made under the 

20 contract. 

21 (d) REGIONAL DAIRY DISTRICTS.—The Secretary 

22 shall establish five Regional Dairy Districts that are com23 posed of the following participating States: 

24 (1) NORTHEAST DISTRICT.—A Northeast Dis25 trict consisting of the States of Connecticut, Dela-
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1 ware, Maine, Maryland, Massachusetts, New Hamp2 shire, New Jersey, New York, Ohio, Pennsylvania, 

3 Rhode Island, and Vermont. 

4 (2) SOUTHERN DISTRICT.—A Southern District 

5 consisting of the States of Alabama, Arkansas, Flor6 ida, Georgia, Kansas, Kentucky, Louisiana, Mis7 sissippi, Missouri, Nebraska, New Mexico, North 

8 Carolina, Oklahoma, South Carolina, Texas, Ten9 nessee, Virginia, and West Virginia. 

10 (3) UPPER MIDWEST DISTRICT.—An Upper 

11 Midwest District consisting of the States of Illinois, 

12 Indiana, Iowa, Michigan, Minnesota, North Dakota, 

13 South Dakota, and Wisconsin. 

14 (4) INTERMOUNTAIN DISTRICT.—An Inter15 mountain District consisting of the States of Ari16 zona, Colorado, Idaho, Montana, Nevada, Utah, and 

17 Wyoming. 

18 (5) PACIFIC DISTRICT.—A Pacific District con19 sisting of the States of California, Oregon, and 

20 Washington. 

21 (e) REGIONAL DAIRY BOARDS.—

22 (1) IN GENERAL.—Each District shall be ad23 ministered by a Regional Dairy Board. 

24 (2) COMPOSITION.—The Board of a District 

25 shall be composed of not less than two, and not 
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1 more than three, members from each participating 

2 State in the District, appointed by the Secretary 

3 from nominations submitted by the Governor of the 

4 State. 

5 (3) NOMINATIONS.—The Governor of a partici6 pating State shall nominate at least five residents of 

7 the State to serve on the Board, of which—

8 (A) at least one nominee shall be an eligi9 ble producer at the time of nomination; and 

10 (B) at least one nominee shall be a con11 sumer representative. 

12 (f) NATIONAL DAIRY PRODUCERS TRUST FUND.—

13 (1) ESTABLISHMENT AND FUNDING.—There is 

14 established in the Treasury of the United States a 

15 trust fund to be known as the National Dairy Pro16 ducers Trust Fund, which shall consist of—

17 (A) the payments received by the Secretary 

18 and deposited in the Trust Fund under sub19 section (g); and 

20 (B) the payments made by the Secretary 

21 to the Trust Fund under subsection (h). 

22 (2) EXPENDITURES.—Amounts in the Trust 

23 Fund shall be available to the Secretary, to the ex24 tent provided for in advance in an appropriations 

25 Act, to carry out this section. 
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1 (g) PAYMENTS FROM COVERED PROCESSORS TO

2 TRUST FUND.—

3 (1) PAYMENTS REQUIRED.—During any month 

4 for which the Class I mover is less than $14.25, 

5 each covered processor that purchases Class I milk 

6 during the month that will be sold in a participating 

7 State shall pay to the Secretary for deposit in the 

8 Trust Fund an amount obtained by multiplying—

9 (A) the difference between $14.25 per hun10 dredweight and the Class I mover; by 

11 (B) the quantity of Class I milk purchased 

12 from eligible producers during the month. 

13 (2) COMPENSATORY PAYMENTS.—The Sec14 retary shall promulgate regulations requiring per15 sons who sell Class I milk into a participating State 

16 to make compensatory payments into the Trust 

17 Fund with respect to all such milk to the extent nec18 essary to equalize the cost of milk purchased by per19 sons subject to paragraph (1). In no case may a 

20 compensatory payment be required on Class I milk 

21 on which a payment has been made under paragraph 

22 (1). 

23 (h) COUNTER-CYCLICAL PAYMENTS FROM SEC24 RETARY TO TRUST FUND.—If the average price for Class 

25 III milk during a month is less than $13.25 per hundred-
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1 weight, the Secretary shall use the funds, facilities, and 

2 authorities of the Commodity Credit Corporation (in such 

3 amounts as may be necessary) to make a payment each 

4 month to the Trust Fund in an amount determined by 

5 multiplying—

6 (1) 25 percent of the difference between $13.25 

7 per hundredweight and the weighted average of the 

8 price received by producers in each participating 

9 State for Class III milk during the month, as deter10 mined by the Secretary; by 

11 (2) the quantity of eligible production of Class 

12 II, Class III, and Class IV milk produced in the var13 ious participating States during the month, as deter14 mined by the Secretary. 

15 (i) COMPENSATION FROM TRUST FUND FOR ADMIN16 ISTRATIVE AND INCREASED FOOD ASSISTANCE COSTS.—

17 The Secretary shall use amounts in the Trust Fund to 

18 provide compensation—

19 (1) to the Secretary for administrative costs in20 curred by the Secretary and Boards in carrying out 

21 this section; 

22 (2) to the Secretary to cover the increased cost 

23 of any milk and milk products provided under any 

24 food assistance program administered by the Sec-
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1 retary that results from carrying out this section; 

2 and 

3 (3) to each State for the increased costs in4 curred by the State of any milk or milk products 

5 provided under the Special Supplemental Nutrition 

6 Program for Women, Infants, and Children estab7 lished by section 17 of the Child Nutrition Act of 

8 1966 (42 U.S.C. 1786) that results from carrying 

9 out this section 

10 (j) PAYMENTS FROM TRUST FUND TO BOARDS.—

11 (1) IN GENERAL.—The Secretary shall use any 

12 amounts in the Trust Fund that remain after pro13 viding the compensation required under subsection 

14 (i) to make monthly payments to Boards. 

15 (2) AMOUNT.—The amount of a payment made 

16 to a Board of a District for a month under para17 graph (1) shall bear the same ratio to payments 

18 made to all Boards for the month as the eligible pro19 duction in the District during the month bears to el20 igible production sold in all Districts. 

21 (k) PAYMENTS BY BOARDS TO PRODUCERS.—

22 (1) IN GENERAL.—With the approval of the 

23 Secretary, a Board of a District shall use payments 

24 received under subsection (j) to make payments to 
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1 eligible producers for eligible production of milk that 

2 is produced in a participating State in the District. 

3 (2) LIMITATION.—An eligible producer may not 

4 receive payments under this subsection on produc5 tion in excess of 500,000 pounds of milk per month 

6 (3) SUPPLY MANAGEMENT.—In carrying out 

7 paragraph (1), a Board of a District may—

8 (A) use a portion of the payments de9 scribed in paragraph (1) to provide bonuses or 

10 other incentives to eligible producers for eligible 

11 production to manage the supply of milk pro12 duced in the District; and 

13 (B) request the Secretary to review a pro14 posed action under subparagraph (A). 

15 (4) REIMBURSEMENT OF COMMODITY CREDIT

16 CORPORATION.—

17 (A) IN GENERAL.—If the Secretary deter18 mines that the Commodity Credit Corporation 

19 has incurred additional costs in a fiscal year to 

20 carry out section 1501 of the Farm Security 

21 and Rural Investment Act of 2002 (7 U.S.C. 

22 7981) as a result of overproduction of milk in 

23 a District due solely to the operation of this 

24 section in that District, the Secretary shall re25 quire the Board of that District to reimburse 
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1 the Commodity Credit Corporation for the addi2 tional costs. The amount of any reimbursement 

3 by a Board under this subparagraph is limited 

4 to the amount that would otherwise be available 

5 to the Board to make payments to producers 

6 under subsection (j). 

7 (B) BOARD ASSESSMENT.—The Board of 

8 the District may impose an assessment on pro9 ducers within participating States in the Dis10 trict to compensate the Commodity Credit Cor11 poration for the additional costs.

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