I

103D CONGRESS

2D SESSION H. R. 4235

To enable milk producers to implement a national Class IV Pool to establish

a fair and equitable blend price for milk used in export dairy products,

to establish the Dairy Export Marketing Board to administer the Class

IV Pool and otherwise work to expand exports of and develop markets

for milk and dairy products, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 14, 1994

Mr. VOLKMER (for himself, Mr. ROSE, Mr. STENHOLM, Ms. LONG, Mr.

SARPALIUS, Mr. PETERSON of Minnesota, Mr. HOLDEN, Mr. POMEROY,

Ms. DANNER, Mr. ANDREWS of Maine, and Ms. SNOWE) introduced the

following bill; which was referred to the Committee on Agriculture

A BILL

To enable milk producers to implement a national Class

IV Pool to establish a fair and equitable blend price

for milk used in export dairy products, to establish the

Dairy Export Marketing Board to administer the Class

IV Pool and otherwise work to expand exports of and

develop markets for milk and dairy products, and for

other purposes.

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

2 This Act may be cited as the ‘‘Dairy Producer Mar3 ket Stabilization and Export Development Act of 1994’’.

4 SEC. 2. FINDINGS, PURPOSES, AND STATEMENT OF POLICY.

5 (a) FINDINGS.—Congress finds that—

6 (1) milk and dairy products are vital compo7 nents of a balanced diet and have high nutritive

8 value, and the production of milk and dairy products

9 is an important segment of the Nation’s agricultural

10 industry;

11 (2) effective Federal dairy programs are needed

12 to ensure consumers of a reliable and adequate sup13 ply of pure and wholesome milk and dairy products

14 at reasonable prices, to respond adequately to cur15 rent and anticipated future supply and demand

16 problems, and to ensure a level of farm income ade17 quate to maintain productive capacity sufficient to

18 meet anticipated future needs;

19 (3) the effectiveness of the current Federal

20 dairy programs is being diminished and the eco21 nomic stress on milk producers increasing due to the

22 growing demands made on milk producers to provide

23 funds for reduction of the Federal budget deficit

24 through direct levies and similar measures included

25 in budget reconciliation Acts;
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1 (4) milk producers are being asked to pay more

2 and more in budget reconciliation levies, while the

3 economic pressures being placed on the milk produc4 tion industry continue to squeeze them financially;

5 (5) given the stresses being put on milk produc6 ers and on the current Federal dairy programs, it is

7 in the national interest and crucial to milk producers

8 that action be taken to establish a producer—not

9 government—program to help stabilize milk prices,

10 develop markets for dairy products, and promote

11 dairy sales that is financially supported by milk pro12 ducers and managed within the dairy production in13 dustry;

14 (6) a program to implement a national Class IV

15 Pool to establish a fair and equitable blend price for

16 milk used in commercial export dairy products and

17 to establish a Dairy Export Marketing Board to ad18 minister the Pool and otherwise work to expand ex19 ports of and develop markets for milk and dairy

20 products will meet the goals of paragraph (5);

21 (7) since most government outlays under the

22 Federal milk price support program stem from Com23 modity Credit Corporation removals of surplus dairy

24 products from the market to reduce the adverse ef25 fect of the surpluses on producer market prices for
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1 milk, net Federal expenditures under the price sup2 port program can be reduced, and thus budget sav3 ings achieved, by reducing the level of removals of

4 surplus dairy products by the Corporation under

5 that program;

6 (8) an effective way to reduce the level of the

7 Commodity Credit Corporation’s price support re8 movals is through the implementation of a producer9 financed program as described in paragraph (6), be10 cause such a program will—

11 (A) ensure producers that there will be a

12 blend price for milk used in commercially-ex13 ported dairy products sufficiently high that they

14 will market their milk excess to domestic needs

15 in the export market rather than sell it to the

16 Corporation under the price support program;

17 and

18 (B) provide nongovernmental moneys to

19 fund efforts needed to develop additional mar20 kets for United States dairy products;

21 (9) if milk producers shoulder the financial bur22 den of facilitating export sales of dairy products and

23 developing markets for domestic milk production

24 under this new program, it is appropriate, as well as

25 most conducive to the efficient implementation of
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1 the program, that the milk production and market2 ing industry be directly responsible for managing the

3 program;

4 (10) the Federal milk price support program it5 self is the responsibility of the Secretary of Agri6 culture under the Agricultural Act of 1949, and the

7 new producer-financed program should be coordi8 nated with the milk price support program and other

9 Department of Agriculture dairy programs; and

10 (11) the future of effective milk price stabiliza11 tion requires the opening of new market opportuni12 ties that the efficient production capacity of our Na13 tion’s milk producers can respond to, and the new

14 producer-financed program provided for in this Act

15 should include aggressive efforts to search out and

16 find new market opportunities in promising export

17 markets.

18 (b) STATEMENT OF PURPOSES AND POLICY.—

19 (1) PURPOSES.—The purposes of this Act are

20 to—

21 (A) provide for the implementation by pro22 ducers of a national Class IV Pool to establish

23 a fair and equitable blend price for milk used

24 in commercially-exported dairy products;
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1 (B) establish the Dairy Export Marketing

2 Board to develop and implement annual plans

3 for the Class IV Pool and exporting dairy prod4 ucts under this Act, and to otherwise work to

5 expand exports of and develop new markets for

6 milk and dairy products; and

7 (C) make related changes in Federal dairy

8 programs that will aid in maintaining a stable

9 and efficient dairy production industry in the

10 United States.

11 (2) STATEMENTS OF POLICY.—

12 (A) IN GENERAL.—It is declared to be the

13 policy of Congress that it is in the public inter14 est, and necessary to protect and strengthen the

15 Nation’s milk production and marketing sys16 tem, to reduce any adverse effects of Federal

17 budget deficit reduction actions on milk produc18 ers, and to facilitate the continued effective op19 erations of the Federal dairy programs, that the

20 implementation of the producer-financed na21 tional Class IV Pool program and the establish22 ment of the Dairy Export Marketing Board

23 provided for in this Act be achieved.

24 (B) OPERATIONS OF THE PROGRAM.—It

25 further is declared to be the policy of Congress
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1 that the producer-financed national Class IV

2 Pool program provided for in this Act should be

3 operated—

4 (i) in addition to, and not as a sub5 stitute for, the Dairy Export Incentive

6 Program of the Department of Agriculture;

7 and

8 (ii) in a manner consistent with the

9 trade obligations of the United States.

10 (C) PROTECTION OF CONSUMERS.—It fur11 ther is declared to be the policy of Congress

12 that the powers provided in this Act shall not

13 be used to reduce the production of pure and

14 wholesome milk and dairy products below the

15 level required for United States consumers or to

16 divert production from meeting the needs of

17 such consumers, and that, in carrying out this

18 Act, due regard shall be given to the mainte19 nance of a continuous and stable supply of milk

20 and dairy products adequate to meet the de21 mands of United States consumers at prices

22 fair both to producers and consumers.

23 SEC. 3. NATIONAL CLASS IV MILK MARKETING POOL.

24 (a) IN GENERAL.—
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1 (1) ESTABLISHMENT.—The Secretary of Agri2 cultural, by regulation as provided in subsection (f),

3 shall establish a national milk marketing pool, which

4 shall be known as the ‘‘Class IV Pool’’.

5 (2) COVERAGE.—Effective for the period begin6 ning January 1, 1995, and ending December 31,

7 1999, all milk produced in the 48 contiguous States

8 and marketed by producers shall be entered into the

9 Class IV Pool. Milk shall enter the Pool at the time

10 the milk is removed from the farm and before it en11 ters any other marketing channel, including Federal

12 and State milk marketing orders.

13 (3) FIRST HANDLER’S DUTY.—Each first han14 dler of milk shall be responsible for ensuring that all

15 milk is entered into the Class IV Pool and is han16 dled in compliance with the requirements of the

17 Pool, as provided in this Act and in regulations is18 sued by the Secretary of Agriculture under sub19 section (f).

20 (b) POOL ADMINISTRATION.—The Class IV Pool

21 shall be administered, as provided in the annual Class IV

22 Pool plans established under section 5 of this Act, by the

23 Dairy Export Marketing Board established under section

24 4 of this Act.

25 (c) BLEND PRICING IN THE POOL.—
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1 (1) ESTABLISHMENT OF BLEND PRICE AND AP2 PLICATION TO ALL MILK IN THE POOL.—The Class

3 IV Pool shall establish for all milk entering the pool

4 during each calendar year a blend price for each

5 hundredweight of such milk, equal to the weighted

6 average of—

7 (A) the price support level, per hundred8 weight, for milk under the Agricultural Act of

9 1949, as applied to all milk entering the pool

10 that is not used for those export dairy products

11 described in subparagraph (B), as determined

12 by the Dairy Export Marketing Board; and

13 (B) the average market price, per hundred14 weight of milk, for the milk equivalent (total

15 milk solids basis) used in that amount of export

16 dairy products projected to be exported during

17 such year under the Class IV Pool plan for that

18 year, as determined by the Board,

19 adjusted as provided in paragraph (2): Provided,

20 That in no case may such blend price be less than

21 the milk price support level per hundredweight

22 minus 10 cents.

23 (2) ADJUSTMENT TO ACCOUNT FOR RE24 FUNDS.—The blend price for a year calculated as a

25 weighted average price for milk under paragraph (1)
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1 shall be adjusted by the Dairy Export Marketing

2 Board as necessary to cover the costs of refunds

3 paid under paragraph (5) and other expenditures

4 made out of the settlement fund, as provided in sub5 section (d)(3), during such year.

6 (3) QUARTERLY ADJUSTMENTS.—The Class IV

7 Pool blend price established for a year may be ad8 justed at the beginning of each of the second, third,

9 and fourth quarters of such year to reflect changes

10 in the Board’s determinations as to the amount of

11 milk that will enter the Pool during the year, the

12 amount of export dairy products eligible for blend

13 price payments under paragraph (4)(B), and dairy

14 product export market prices during such year.

15 (4) APPLICATION OF BLEND PRICING TO MILK

16 ENTERING THE POOL.—The Board shall apply the

17 Class IV Pool blend price established under para18 graph (1) or (3), as appropriate, to milk entering

19 the Pool by—

20 (A) collecting on each hundredweight of

21 milk entering the Pool, and depositing into the

22 settlement fund established under subsection

23 (e), a uniform adjustment amount equal to the

24 difference between the per hundredweight price

25 support level for milk and the blend price, ex-
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1 cept that, whenever the difference between the

2 price support level and the blend price is less

3 than 1 cent, or there is no difference between

4 the two figures, the Board may collect up to 1

5 cent on each hundredweight of milk entering

6 the Pool as necessary to adequately fund the

7 operation of the Pool and the Board; and

8 (B) paying out of the settlement fund, on

9 dairy products commercially exported from the

10 United States (not including exports under the

11 Dairy Export Incentive Program) that cumula12 tively do not exceed the level of exports for

13 which the Class IV blend pricing shall be estab14 lished for the year, as provided in the Class IV

15 Pool plan for the year, an amount per hundred16 weight of milk equivalent (total milk solids

17 basis) exported that reflects the difference be18 tween the milk equivalent (total milk solids

19 basis) market price for the product exported

20 and the Pool blend price.

21 (5) REFUNDS.—The Dairy Export Marketing

22 Board shall provide a refund of the entire amount

23 remitted to the settlement fund on a producer’s milk

24 entering the Class IV Pool during a calendar year,

25 if the producer provides evidence that the producer
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1 did not increase marketings in that calendar year

2 when compared to the producer’s marketings during

3 the immediately preceding calendar year. A refund

4 under this paragraph shall not be considered as any

5 type of price support or payment for purposes of

6 sections 1211 and 1221 of the Food Security Act of

7 1985 (16 U.S.C. 3811 and 3821).

8 (6) WHEN BLEND PRICE PAYMENTS MADE.—

9 Blend price payments on dairy product exports

10 under paragraph (4)(B) may be made before, at the

11 time, or after the dairy product involved is exported

12 as long as the milk equivalent (total milk solids

13 basis) market price for the exported product is ade14 quately documented and established to the satisfac15 tion of the Board.

16 (d) HANDLER REMITTANCES.—Each first handler of

17 milk produced in the 48 contiguous States and marketed

18 by producers shall collect and remit to the Dairy Export

19 Marketing Board blend price adjustments required under

20 subsection (c)(4)(A) on all milk handled by such handler.

21 (e) SETTLEMENT FUND.—

22 (1) IN GENERAL.—The Dairy Export Market23 ing Board shall establish a special fund, to be known

24 as the ‘‘settlement fund’’. Monies in such fund shall

25 be available solely for the use of the Board to oper-
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1 ate the Class IV Pool, make blend price payments,

2 other payments as provided in paragraph (3), and

3 refunds under subsection (c)(5), as provided in the

4 budgets of the Board.

5 (2) MONEY INTO THE FUND.—There shall be

6 deposited into the settlement fund—

7 (A) all blend price adjustments remitted by

8 first handlers under subsection (d); and

9 (B) all revenues received by the Board

10 from sales of dairy products it has directly re11 moved from the domestic market or from any

12 other source.

13 (3) ADDITIONAL EXPENDITURES OUT OF THE

14 SETTLEMENT FUND.—Moneys in the settlement

15 fund may be used by the Board for export expansion

16 and market development activities, and administra17 tive activities of the Board, provided for in sections

18 4 and 5 of this Act.

19 (4) TERMINATION OF FUND.—The settlement

20 fund shall terminate, and any monies remaining in

21 the Fund returned to milk producers as rebates

22 under section 4(l), at such time as the Board winds

23 up its affairs and all legal obligations of the Board.

24 (f) USDA REGULATIONS.—The Secretary of Agri25 culture, by regulation, shall establish—
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1 (1) rules governing the manner in which blend

2 price adjustments shall be remitted by first handlers

3 to the settlement fund for milk marketed through

4 Federal or State milk marketing orders, and for

5 milk marketed through producer-handlers or other

6 operations outside the Federal and State milk mar7 keting order systems;

8 (2) provisions for coordination of the operation

9 of the Class IV Pool with milk marketings under

10 Federal and State milk marketing orders, and with

11 milk marketing done outside Federal or State milk

12 marketing orders;

13 (3) such other terms and conditions, not incon14 sistent with the provisions of this Act, necessary to

15 effectuate the establishment and operation of the

16 Class IV Pool, the operation of the Dairy Export

17 Marketing Board, and the implementation of annual

18 Class IV Pool plans; and

19 (4) provisions for assessment of penalties for

20 violations of this Act and the Secretary’s regula21 tions, and for the filing of petitions by persons sub22 ject to such regulations objecting to such regulations

23 or seeking exemption from them. For the purposes

24 of regulations under this paragraph, notwithstanding

25 any other provision of law, the provisions of para-
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1 graphs (14) and (15) of section 8c of the Agricul2 tural Adjustment Act, as reenacted and amended by

3 the Agricultural Marketing Agreement Act of 1937

4 (7 U.S.C. 608c), shall be applicable to this Act and

5 the regulations under this subsection and persons

6 subject to this Act or regulations as if such laws are

7 orders, and such persons are handlers, under section

8 8c.

9 SEC. 4. DAIRY EXPORT MARKETING BOARD.

10 (a) ESTABLISHMENT.—Not later than October 1,

11 1994, or 30 days after the date of the enactment of this

12 Act, whichever occurs later, the Secretary of Agriculture

13 shall establish the Dairy Export Marketing Board to ad14 minister the national Class IV Pool established under sec15 tion 3, develop and implement Class IV Pool plans, and

16 perform other tasks of the Board provided for in this Act.

17 (b) MEMBERSHIP.—

18 (1) IN GENERAL.—The Dairy Export Market19 ing Board shall consist of 18 members appointed by

20 the Secretary of Agriculture as provided in this sub21 section. No person may be appointed to the Board

22 unless the Secretary determines that the person

23 meets the qualification criteria set out in paragraph

24 (5).

25 (2) COMPOSITION OF BOARD.—
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1 (A) REGIONAL DISTRIBUTION.—The 18

2 seats on the Board shall be evenly allocated

3 among the 6 geographic regions described in

4 paragraph (3).

5 (B) REGIONAL APPOINTMENTS.—Three

6 members shall be appointed to the Board from

7 each of the 6 geographic regions, as follows:

8 (i) 2 members shall be qualified milk

9 producers whose farms are located in that

10 region, each appointed from among nomi11 nees selected by the milk producers in such

12 region, as provided in this subsection; and

13 (ii) 1 member shall be a qualified per14 son employed in some capacity in the dairy

15 industry other than as a producer, and se16 lected in such manner as the Secretary de17 termines appropriate. For any individual

18 employed by a company or organization

19 that conducts business in more than one

20 such region, such individual will be deemed

21 to be located in the region in which such

22 individual’s normal place of business is

23 located.

24 (3) SIX GEOGRAPHIC REGIONS.—For purposes

25 of making regional appointments of persons to the
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1 Board, as provided in paragraph (2), the 48 contig2 uous States shall be grouped into 6 regions, as fol3 lows:

4 (A) Region I: Connecticut, Maine, Massa5 chusetts, New Hampshire, New Jersey, New

6 York, Pennsylvania, Rhode Island, and Ver7 mont.

8 (B) Region II: Illinois, Indiana, Iowa, Kan9 sas, Michigan, Missouri, Nebraska, and Ohio.

10 (C) Region III: Alabama, Arkansas, Dela11 ware, Florida, Georgia, Kentucky, Louisiana,

12 Maryland, Mississippi, North Carolina, Okla13 homa, South Carolina, Tennessee, Texas, Vir14 ginia, and West Virginia.

15 (D) Region IV: Wisconsin.

16 (E) Region V: Colorado, Idaho, Minnesota,

17 Montana, North Dakota, Oregon, South Da18 kota, Utah, Washington, and Wyoming.

19 (F) Region VI: Arizona, California, Ne20 vada, and New Mexico.

21 (4) SELECTION OF NOMINEES FOR APPOINT22 MENT AS PRODUCER MEMBERS.—

23 (A) TWO NOMINEES REQUIRED.—For the

24 appointment of the initial Board and whenever

25 there is a vacancy on the Board, the producers
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1 in each of the 6 geographic regions described in

2 paragraph (3) that has a producer seat on the

3 Board that is vacant shall choose, by election,

4 two producer nominees for such seat.

5 (B) NOMINATION PROCESS.—The Sec6 retary shall begin the process of appointing a

7 person to fill a producer seat on the Board by

8 soliciting recommendations of the names of pro9 ducers in the region involved to be listed on the

10 ballot for election as a nominee for appointment

11 to that seat. The names and qualifications of

12 producers for inclusion on the ballot may be

13 submitted by any milk producer in the region,

14 or any organization that represents milk pro15 ducers in such region. The Secretary shall de16 termine whether each such producer whose

17 name is submitted for inclusion on the ballot is

18 eligible to serve on the Board and meets the

19 qualification criteria set out in paragraph (5),

20 and shall include on the ballot the name of

21 every qualified person determined to be eligible

22 and qualified if such person agrees to permit

23 his or her name being put on the ballot.

24 (C) ELECTIONS.—Following the develop25 ment of any ballot under subparagraph (B), the
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1 Secretary shall conduct an election among milk

2 producers in the region involved to choose the

3 two nominees for appointment to the vacant

4 seat to which the ballot applies. Each producer

5 shall have one vote in the election of each nomi6 nee, and bloc voting as provided in subpara7 graph (D) shall be permitted. The two persons

8 receiving the highest number of votes in the

9 election shall be the nominees.

10 (D) VOTING BY ASSOCIATIONS.—For the

11 purpose of elections under this paragraph, the

12 Secretary shall consider the vote cast by any co13 operative association of producers, engaged in a

14 bona fide manner in marketing milk or dairy

15 products, as the vote of the producers who are

16 members of or under contract with such cooper17 ative association of producers. If a cooperative

18 association of producers elects to vote on behalf

19 of its members, such cooperative association

20 shall provide each producer, on whose behalf

21 the cooperative association is voting, a descrip22 tion of the election process and a description of

23 each nominee (including the person’s qualifica24 tions), together with a statement of the manner

25 in which the cooperative association intends to
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1 cast its vote on behalf of the membership. Such

2 information shall inform the producer of proce3 dures to follow to cast an individual ballot

4 should the producer so choose within the period

5 of time established by the Secretary for casting

6 ballots. Such notification shall be made at least

7 15 days prior to the election and shall include

8 an official ballot. The ballots shall be tabulated

9 by the Secretary and the vote of the cooperative

10 association shall be adjusted to reflect such in11 dividual votes.

12 (E) ADDITIONAL RULES.—The Secretary

13 shall establish such additional rules for the con14 duct of elections to choose producer nominees

15 as are appropriate.

16 (5) QUALIFICATION CRITERIA.—

17 (A) BASIC CRITERIA.—The name of a per18 son may not be included on the ballot in an

19 election to choose producer nominees for the

20 Board, nor may the Secretary appoint any

21 member to the Board, unless the Secretary de22 termines that such person meets the following

23 qualification criteria:

24 (i) the person must have substantial

25 experience or a high level of expertise in
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1 the production of milk, the marketing of

2 milk or dairy products, or the financing of

3 such marketing activities;

4 (ii) if the person is being considered

5 for a producer seat on the Board, the per6 son must have been a milk producer for at

7 least 5 years; and

8 (iii) if the person is being considered

9 for a non-producer seat on the board, the

10 person must have leadership experience in

11 his or her field of expertise.

12 (B) FURTHER CRITERIA.—In choosing

13 among producer nominees or directly selecting

14 non-producer members for appointment to the

15 Board, the Secretary shall give priority to per16 sons with—

17 (i) if the appointment is to a non-pro18 ducer seat on the Board, substantial expe19 rience as a professional milk marketer; or

20 (ii) practical familiarity with, or dem21 onstrated knowledge of, the process of

22 marketing agricultural commodities for ex23 port or the financing of such transactions;

24 or
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1 (iii) practical familiarity with, or dem2 onstrated knowledge of, the mechanics and

3 market effects of moving dairy products

4 from the processing plant into the market;

5 or

6 (iv) substantial experience with the

7 Federal milk price support program, or

8 Commodity Credit Corporation removals of

9 dairy products from the market under that

10 program, or operations of milk marketing

11 order blend price pools.

12 (6) DIVERSITY OF APPOINTMENT.—In making

13 appointments to the Board, the Secretary shall en14 sure that not more than one person employed by a

15 particular company or associated with a particular

16 cooperative organization that can bloc vote in the

17 election of producer nominees sits on the Board at

18 the same time.

19 (7) REJECTION.—The Secretary may reject any

20 nominee selected by milk producers. If there are in21 sufficient nominations from which to appoint mem22 bers to the Board as a result of the Secretary reject23 ing nominees selected by milk producers, milk pro24 ducers shall select additional nominees, as provided

25 in this subsection.
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1 (8) TIME SCHEDULE.—The Secretary shall con2 duct the regional elections of producer nominees for

3 appointment to the initial Board and appoint all the

4 initial members to the Board no later than October

5 1, 1994, or 30 days after the date of the enactment

6 of this Act, whichever occurs later. Thereafter,

7 whenever a seat becomes vacant for any reason, the

8 Secretary, as soon as practicable, shall conduct an

9 election (if the vacant seat is a producer seat) and

10 make an appointment of a person to fill the vacant

11 seat.

12 (9) TERMS OF MEMBERS.—Each member of the

13 Board shall serve for a 3-year term except that

14 terms shall be staggered, as follows:

15 (A) 4 of the producer members and 2 of

16 the non-producer members appointed to the ini17 tial Board shall have a 1-year term;

18 (B) 4 of the producer members and 2 of

19 the non-producer members appointed to the ini20 tial Board shall have a 2-year term; and

21 (C) 4 of the producer members and 2 of

22 the non-producer members appointed to the ini23 tial Board shall have a full 3-year term.

24 (10) OPERATIONS COMMITTEE.—The Board

25 may establish an Operations Committee for con-
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1 sultation and advice, consisting of persons not sit2 ting on the Board who as a group are suitably quali3 fied, either in experience or knowledge, in the var4 ious aspects of the dairy industry, including but not

5 limited to marketing order blend price pools, export

6 marketing, and dairy research and production. The

7 Operations Committee shall have no right to cast

8 votes in any matter voted on by the Board or the

9 Board’s member committees, nor shall it have the

10 power to perform any of the functions of the Board

11 under this Act.

12 (11) CONFLICT RULES.—The members of the

13 Board shall be subject to such conflict of interest

14 rules as determined appropriate by the Secretary.

15 (12) REIMBURSEMENT FOR EXPENSES.—Mem16 bers of the Board and the Operating Committee

17 shall serve without pay, but shall be allowed reim18 bursement for expenses incurred in their service on

19 the Board or Committee, including reasonable travel

20 costs and out-of-pocket expenses when required to be

21 away from their home or place of business in the

22 service of the Board or Committee.

23 (13) REMOVAL FOR CAUSE.—The Secretary

24 may remove any member of the Board for good

25 cause shown.
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1 (14) TERMINATION OF THE BOARD.—The

2 Board shall terminate at such date—not later than

3 June 30, 2000—agreed on by the Secretary and the

4 Board, unless extended by later enactment of Con5 gress.

6 (c) BOARD PROCEDURES.—

7 (1) MEETINGS OF THE BOARD.—

8 (A) FIRST MEETING.—Within 2 weeks

9 after a quorum has been appointed to the initial

10 Dairy Export Marketing Board, the Secretary

11 of Agriculture shall convene the Board for its

12 initial meeting; and at that meeting the Board

13 shall elect officers and adopt written bylaws and

14 rules of procedure to govern its meetings, and

15 determine a place of domicile for the Board.

16 (B) SUBSEQUENT MEETINGS.—Following

17 the initial meeting, the Board shall meet at the

18 call of the chair, but at least once every 3

19 months.

20 (2) QUORUM.—A quorum of the Board shall be

21 10 persons.

22 (3) NOTICE TO SECRETARY; EX OFFICIO REP23 RESENTATION.—The Board shall notify the Sec24 retary of Agriculture in advance of each meeting of

25 the Board. The Secretary, or a representative of the
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1 Secretary, shall attend each meeting as a non-voting

2 ex officio member of the Board.

3 (d) DUTIES OF THE BOARD.—The Dairy Export

4 Marketing Board shall have the duties to—

5 (1) prepare annually, for each of the 1995

6 through 1999 calendar years, a plan for the oper7 ation during that year of the Class IV Pool estab8 lished under section 3, and establish a per hundred9 weight blend price for milk entering the Pool during

10 such year as provided in this Act;

11 (2) before the beginning of the second, third,

12 and fourth quarter of each calendar year, make ad13 justments in the blend price for milk in the Pool as

14 necessary to reflect changes in the Board’s deter15 minations as to the amount of milk that will enter

16 the Pool during the year, the amount of export dairy

17 products eligible for blend price payments under sec18 tion 3(c)(4)(B) of this Act, and dairy product export

19 market prices during such year;

20 (3) prepare the Board’s proposed budget for

21 each calendar year it is in operation, as provided in

22 subsection (f);

23 (4) implement each annual Class IV Pool plan

24 and budget, administer the Class IV Pool, and co-
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1 ordinate activities under the plan with the programs

2 of the Secretary of Agriculture;

3 (5) evaluate results under each annual Class IV

4 Pool plan and report on the evaluations to the Sec5 retary, and provide a copy of each such report to the

6 Senate Committee on Agriculture, Nutrition, and

7 Forestry and the House Committee on Agriculture;

8 (6) with respect to the estimate of the value

9 and volume of Commodity Credit Corporation milk

10 and milk product purchases made by the Secretary

11 by November 20 of each year under section 204(f)

12 of the Agricultural Act of 1949, in cooperation with

13 the Secretary, make monthly revisions of such esti14 mate for each month of the year to which the esti15 mate applies;

16 (7) receive, investigate, and report to the Sec17 retary complaints of violations of this Act and regu18 lations issued under this Act; and

19 (8) manage the settlement fund established

20 under section 3(e).

21 (e) POWERS OF THE BOARD.—

22 (1) GENERAL POWERS.—The Dairy Export

23 Marketing Board may—

24 (A) adopt bylaws and issue rules and regu25 lations governing the manner in which its busi-
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1 ness may be conducted and the powers vested

2 in it may be exercised;

3 (B) sue and be sued, complain and defend,

4 in any court of law or equity, State or Federal.

5 All suits of a civil nature at common law or in

6 equity to which the Board shall be a party shall

7 be deemed to arise under the laws of the United

8 States, and the United States district courts

9 shall have original jurisdiction thereof, without

10 regard to the amount in controversy, and the

11 Board, in any capacity, without bond or secu12 rity, may remove any such action, suit, or pro13 ceeding from a State court to the United States

14 district court by following any procedure for re15 moval then in effect. Any suit filed against the

16 Board shall be filed in the district in which the

17 Board is domiciled or in the district wherein the

18 plaintiff resides or is engaged in business;

19 (C) incur and pay for administrative and

20 other expenses under this Act;

21 (D) appoint staff, define their duties, and

22 fix and provide their compensation;

23 (E) enter into contracts and agreements as

24 necessary in the conduct of its business;
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1 (F) contract for the use, in accordance

2 with the usual customs of trade and commerce,

3 of plants and facilities for the physical han4 dling, storage, processing, servicing, and trans5 portation of dairy products subject to its con6 trol;

7 (G) make final and conclusive settlement

8 and adjustment of any claims by or against the

9 Board or its accounts;

10 (H) use and expend monies in the settle11 ment fund established under section 3(e); and

12 (I) exercise other powers that are inciden13 tal to its performance of the functions required

14 or authorized for it under this Act.

15 (2) SPECIFIC POWERS.—To meet its duties

16 under this Act and implement annual Class IV Pool

17 plans, the Board may use its general powers to—

18 (A) remove, or cause the removal, of dairy

19 products from the domestic commercial market

20 or accept donated stocks from the Commodity

21 Credit Corporation, and maintain such products

22 in inventory;

23 (B) dispose, or cause the disposal, of dairy

24 products it has removed from the market or re25 ceived from the Commodity Credit Corporation
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1 through outlets that are not in competition with

2 United States commercial markets, primarily

3 through export sales;

4 (C) transfer to the Commodity Credit Cor5 poration, at the Corporation’s announced price,

6 dairy products it has removed from the market,

7 as necessary for Board or Corporation stock

8 management purposes, and the regulations of

9 the Corporation shall so provide;

10 (D) cause the export of dairy cattle;

11 (E) conduct other activities related to mar12 ket development and product disposal specified

13 in section 5, as necessary to meet its respon14 sibilities under this Act and annual Class IV

15 Pool plans; and

16 (F) recommend to the Secretary amend17 ments to the regulations issued under this Act.

18 (f) BUDGETS OF THE BOARD.—

19 (1) PREPARATION.—Not later than October 31

20 of each of the years 1994 through 1998 (or, with re21 spect to the first budget, 60 days after the date of

22 the enactment of this Act if that sixtieth day is later

23 than October 31, 1994) the Dairy Export Marketing

24 Board shall prepare a budget of its anticipated ex-
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1 penses and disbursements in the upcoming calendar

2 year.

3 (2) ITEMS IN EACH BUDGET.—

4 (A) IN GENERAL.—Each such budget shall

5 provide—

6 (i) a detailed account of the Board’s

7 anticipated administrative expenses and

8 other outlays to be incurred in implement9 ing the annual Class IV Pool plan for the

10 upcoming year;

11 (ii) an estimate of expected blend

12 price revenues and other revenues of, and

13 blend price payments on dairy exports and

14 refunds made by, the Board during the up15 coming year, to which the budget of all

16 other expenditures of the Board during

17 such year shall be reconciled;

18 (iii) an analysis of anticipated expend19 itures for administrative expenses, showing

20 how they are being kept to the minimum

21 necessary to operate the Class IV Pool and

22 the programs of the Board; and

23 (iv) a description of the anticipated

24 contracts during such year for the removal

25 and disposition of dairy products.
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1 (B) ADDITIONAL ITEMS.—The budget pre2 pared for calendar year 1995 shall include an

3 additional amount to reimburse the Commodity

4 Credit Corporation for expenditures to cover ex5 penses of the Board prior to January 1, 1995,

6 as provided for in subsection (h)(1)(B); and the

7 budget prepared for calendar year 1999 shall

8 include an additional amount to cover the

9 Board’s administrative expenses to be incurred

10 in calendar year 2000 in wrapping up its busi11 ness.

12 (3) SUBMISSION WITH PLAN.—Each budget

13 prepared under this subsection shall be submitted to

14 the Secretary of Agriculture with the annual Class

15 IV Pool plan for the year involved.

16 (g) ADMINISTRATION; CONTRACTING.—

17 (1) LIMITATION ON ADMINISTRATIVE EX18 PENSES.—For any calendar year in which the Sec19 retary of Agriculture estimates under section 204(f)

20 of the Agricultural Act of 1949 that the level of

21 Commodity Credit Corporation purchases of milk

22 and the products of milk will exceed 5,000,000,000

23 pounds (milk equivalent, total milk solids basis), the

24 Board may not budget for or incur administrative
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1 expenses (including the cost of paying employees of

2 the Board) in the year that exceed the lesser of—

3 (A) $2,000,000, or

4 (B) 5 percent of the annual budget of the

5 Board for the year.

6 (2) CONTRACTS FOR SERVICES.—

7 (A) IN GENERAL.—To ensure efficient use

8 of funds available to the Board under this Act

9 and avoid duplication of efforts, whenever pos10 sible, the Board shall enter into contracts and

11 agreements for the removal of dairy products

12 from the market, the disposition of such prod13 ucts, and such other nonadministrative activi14 ties of the Board, and for the payment of cost

15 thereof with funds available to the Board under

16 this Act.

17 (B) SCOPE.—The tasks that may be in18 cluded under a contract or agreement include,

19 but are not limited to, offers to buy, purchases

20 of dairy products, storage and delivery of dairy

21 products, management of dairy product inven22 tories, and statistical collection and analysis.

23 (C) REQUIREMENTS.—In any contract or

24 agreement of the Board under this paragraph,

25 the contracting or agreeing party shall agree to
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1 keep accurate records of all its transactions, ac2 count for funds received and expended, make

3 periodic reports to the Board of activities con4 ducted, and make such other reports as the

5 Board may require.

6 (3) DIRECT SALES BY OTHERS.—The Board

7 shall ensure, to the extent practicable, that the ac8 tual export marketing and sale of dairy products for

9 which blend price payments are made available

10 under this Act are done by dairy cooperatives or

11 other persons engaged in international marketing.

12 (h) FUNDING FOR THE BOARD; EXPENDITURES.—

13 (1) IN GENERAL.—

14 (A) SETTLEMENT FUND.—Monies in the

15 settlement fund established under section 3(e)

16 shall be available to the Dairy Export Market17 ing Board, effective January 1, 1995, for ex18 penditure as provided in this subsection.

19 (B) CCC FUNDS.—Notwithstanding any

20 other provision of law, prior to January 1,

21 1995, the activities of the Board in starting up

22 operation and preparing the initial annual Class

23 IV Pool plan shall be paid with funds of the

24 Commodity Credit Corporation. The Corpora25 tion shall be reimbursed by the Board for such
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1 payments from monies placed in the settlement

2 fund during 1995.

3 (2) LIMITATION.—Monies in the settlement

4 fund may be expended by the Board only to cover

5 budgeted activities of the Board under a budget es6 tablished under subsection (f), including expendi7 tures to transfer to the Commodity Credit Corpora8 tion general account reimbursements provided for in

9 paragraph (1)(B), and to provide for rebates to milk

10 producers of excess monies remaining in the Fund

11 when the Board is terminated, as provided in sub12 section (l).

13 (3) CARRYOVER OF FUNDS.—To allow for con14 tinuity of activities of the Board from year to year,

15 monies in the settlement fund shall be available to

16 the Board without fiscal or calendar year limitation,

17 except that, in any year into which monies are car18 ried over, any Class IV Pool blend price for the year

19 under section 3(c) shall be reduced so as to reduce

20 blend price adjustments remitted to the settlement

21 fund during such year by the amount of the carry22 over.

23 (j) BOOKS AND RECORDS.—

24 (1) IN GENERAL.—The Dairy Export Market25 ing Board shall—
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1 (A) maintain such books and records

2 (which shall be available to the Secretary for in3 spection and audit) as the Secretary may pre4 scribe;

5 (B) prepare and submit to the Secretary,

6 from time to time, such reports as the Sec7 retary may prescribe; and

8 (C) account for the receipt and disburse9 ment of all funds entrusted to the Board.

10 (2) AUDITS.—The Board shall cause its books

11 and records to be audited by an independent auditor

12 at the end of each fiscal year, and a report of each

13 such audit to be submitted to the Secretary.

14 (k) FACA NOT APPLICABLE.—The Federal Advisory

15 Committee Act (5 U.S.C. App. 2) shall not apply to the

16 Dairy Export Marketing Board, or the operations of the

17 Board.

18 (l) REBATES ON TERMINATION OF BOARD.—

19 (1) IN GENERAL.—At the time that the Dairy

20 Export Marketing Board terminates and winds up

21 its affairs, any funds remaining in the settlement

22 fund established under section 3(e) of this Act shall

23 be rebated to milk producers who have been subject

24 to the operation of the Class IV Pool under section

25 3, unless the administrative costs of distributing any
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1 such rebate will exceed the amount rebated (in which

2 case, the amount shall revert to the Commodity

3 Credit Corporation general account). Rebates shall

4 be made pro rata, based on the cumulative amount

5 of milk entered into the Class IV Pool by each milk

6 producer to which refunds under section 3(c)(5) do

7 not apply during the period the Class IV Pool was

8 in operation.

9 (2) REBATE NOT DEEMED A GOVERNMENT PAY10 MENT.—Any rebate under this paragraph shall not

11 be considered as any type of price support or pay12 ment for purposes of section 1211 or 1212 of the

13 Food Security Act of 1985 (16 U.S.C. 3811 and

14 3821).

15 SEC. 5. ANNUAL CLASS IV POOL PLANS.

16 (a) REQUIREMENTS.—The Dairy Export Marketing

17 Board shall prepare and implement an annual Class IV

18 Pool plan for each of the calendar years 1995 through

19 1999, as provided in this section, that shall provide a busi20 ness plan of operation for the Class IV Pool and the Board

21 for the year, and shall include the following elements:

22 (1) GENERALLY.—The plan for any year may

23 include such of the activities described in subsection

24 (d) or comparable activities within the authority of
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1 the Board that are determined by the Board to be

2 appropriate for such year.

3 (2) WHEN ESTIMATED CCC PURCHASES EXCEED

4 5,000,000,000 POUNDS.—For any year in which the

5 Secretary of Agriculture estimates, by November 20

6 of the preceding year under section 204(f) of the

7 Agricultural Act of 1949, that Commodity Credit

8 Corporation purchases of milk and the products of

9 milk (less sales under section 407 of the Agricultural

10 Act of 1949 for unrestricted use) will exceed

11 5,000,000,000 pounds (milk equivalent, total milk

12 solids basis), the Plan shall provide for—

13 (A) the establishment under section 3 of a

14 blend price for milk entering the Pool that will

15 cover Pool blend price payments on exports of

16 dairy products during such year that are equiv17 alent in milk (total milk solids basis) to the por18 tion of the estimated Commodity Credit Cor19 poration purchases (less sales under section 407

20 of the Agricultural Act of 1949 for unrestricted

21 use) in excess of 5,000,000,000 pounds but not

22 in excess of 7,000,000,000 pounds; and

23 (B) other appropriate measures by the

24 Board to stabilize milk and dairy product
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1 prices, and to improve farm income during such

2 year.

3 (3) WHEN ESTIMATED CCC PURCHASES EXCEED

4 7,000,000,000 POUNDS.—For any year in which the

5 Secretary estimates, by November 20 of the preced6 ing year under section 204(f) of the Agricultural Act

7 of 1949, that Commodity Credit Corporation pur8 chases of milk and the products of milk (less sales

9 under section 407 of the Agricultural Act of 1949

10 for unrestricted use) will exceed 7,000,000,000

11 pounds (milk equivalent, total milk solids basis), the

12 plan shall provide for such market intervention

13 measures that the Board agrees with the Commodity

14 Credit Corporation that it should undertake if ap15 proved by the Secretary, regarding those anticipated

16 purchases in excess of 7,000,000,000 pounds, using

17 for such purposes monies transferred to the settle18 ment fund established under section 3(e) of this Act

19 by the Commodity Credit Corporation from the col20 lected reductions in price under section 204(g) of

21 the Agricultural Act of 1949.

22 (4) CONTINUATION AND CARRYOVER.—For the

23 second and succeeding plans, to the extent necessary

24 or appropriate, the plan shall provide for the con25 tinuation of activities initiated in the preceding year
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1 and the carryover of funds made available for the

2 preceding year but not expended and the payment of

3 obligations incurred in the preceding year but not

4 paid.

5 (5) 1999 PLAN.—The plan for calendar year

6 1999 shall cover activities and expenditures of the

7 Board in calendar year 2000 to wind up the busi8 ness of the Board.

9 (b) SCHEDULE FOR DEVELOPMENT OF PLAN.—Each

10 annual Class IV Pool plan for a year—

11 (1) shall be prepared, and the Class IV blend

12 price for the year shall be determined, during the

13 period after the preliminary estimate of net Com14 modity Credit Corporation purchases of milk and

15 milk products for a year is issued on August 1 of

16 the preceding year; and

17 (2) shall be submitted to the Secretary not later

18 than October 31 preceding the year the plan ad19 dresses, except that the plan for 1995 shall be sub20 mitted not later than 60 days after the date of the

21 enactment of this Act if such sixtieth day is later

22 than October 31, 1994.

23 (c) QUARTERLY REVISIONS.—

24 (1) IN GENERAL.—The annual Class IV Pool

25 plan for any year shall be updated and revised at the
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1 beginning of each of the second, third, and fourth

2 quarters of the year, or at such other times deter3 mined necessary by the Board.

4 (2) REVISION OF DEDUCTION RATE.—Any revi5 sion of a plan at the beginning of the second, third,

6 or fourth quarter of a year, as provided in para7 graph (1), may include a revision in the blend price

8 for milk entering the Class IV Pool under section 3

9 for such year, as necessary to reflect changes in the

10 Board’s determinations as to the amount of milk

11 that will enter the Pool during the year, the amount

12 of export dairy products eligible for blend price pay13 ments under section 3(c)(4)(B) of this Act, and

14 dairy product export market prices during such year.

15 (d) ACTIVITIES OF THE BOARD IN IMPLEMENTING A

16 PLAN.—

17 (1) WHEN ESTIMATED CCC PURCHASES EXCEED

18 5,000,000,000 POUNDS.—The Dairy Export Marketing

19 Board, in implementing the annual Class IV Pool

20 plan for any year in which the Secretary estimates,

21 by November 20 of the preceding year under section

22 204(f) of the Agricultural Act of 1949, that Com23 modity Credit Corporation purchases of milk and the

24 products of milk (less sales under section 407 of the

25 Agricultural Act of 1949 for unrestricted use) will
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1 exceed 5,000,000,000 pounds (milk equivalent, total

2 milk solids basis), the Board may undertake the fol3 lowing activities with respect to the amount of milk

4 included in the portion of Corporation purchases in

5 excess of 5,000,000,000 pounds, in addition to ad6 ministering the Pool and managing the settlement

7 fund estimated under section 3(e):

8 (A) To acquire, or otherwise cause the re9 moval of, dairy products from domestic com10 mercial markets on the basis of bids by sellers

11 in response to invitations for bids announced by

12 the Board.

13 (B) To acquire, or otherwise cause the re14 moval of, dairy products from domestic com15 mercial markets at announced prices during pe16 riods announced by the Board.

17 (C) To implement a program to cause the

18 export of dairy products the Board has removed

19 from the market, in coordination with the ac20 tivities of the Foreign Agricultural Service in

21 implementing the Dairy Export Incentive Pro22 gram under section 153 of the Food Security

23 Act of 1985 (15 U.S.C. 713a–14). Under the

24 program, the Board may cause the export of

25 dairy products with the assistance of export bo-
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1 nuses provided by the Board, and determined

2 on the basis of bids by exporters in response to

3 invitations for bids announced by the Board. In

4 implementing such a program, the Board shall

5 enter into an agreement with the General Sales

6 Manager to seek the Manager’s prior approval

7 of any export transactions under the program.

8 This program shall not be implemented as a re9 placement for the Dairy Export Incentive Pro10 gram, but as a supplement to it.

11 (D) To implement a program to cause the

12 export of dairy cattle. Under the program, the

13 Board may cause the export of dairy cattle with

14 the assistance of export bonuses provided by the

15 Board, and determined on the basis of bids by

16 exporters in response to invitations for bids an17 nounced by the Board.

18 (E) To effect the sale abroad, at world

19 market prices, of dairy products removed from

20 the market by the Board.

21 (F) To effect the domestic sale for unre22 stricted use of dairy products removed from the

23 market by the Board at market prices, but in

24 no case less than 110 percent of the Commodity
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1 Credit Corporation announced purchase prices

2 for the products.

3 (G) To donate, through the Secretary,

4 products the Board has removed from the mar5 ket to domestic and international feeding and

6 aid programs, as needed for emergency or dis7 aster assistance.

8 (H) To transfer dairy products it has re9 moved from the market to the Commodity

10 Credit Corporation at the Corporation’s an11 nounced purchase price (less an amount, deter12 mined by the Secretary, to represent the aver13 age level of bonus paid to exporters under the

14 Dairy Export Incentive Program), as necessary

15 to manage Corporation or Board inventories.

16 (2) CCC OPERATIONS.—Notwithstanding any

17 other provision of law, the Commodity Credit Cor18 poration shall accept the transfer of dairy products

19 from the Board as provided in paragraph (1)(H),

20 and at any time may transfer its excess inventories

21 of dairy products to the control of the Board, as

22 necessary to manage Corporation or Board stocks or

23 as provided for in paragraph (4)(A).

24 (3) WHEN ESTIMATED CCC PURCHASES ARE

25 5,000,000,000 POUNDS OR LESS.—The Board, in im-
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1 plementing the annual Class IV Pool plan for any

2 year in which the Secretary estimates, by November

3 20 of the preceding year under section 204(f) of the

4 Agricultural Act of 1949, that Commodity Credit

5 Corporation purchases of milk and the products of

6 milk (less sales under section 407 of the Agricultural

7 Act of 1949 for unrestricted use) will be

8 5,000,000,000 pounds or less (milk equivalent, total

9 milk solids basis), the Board may undertake the fol10 lowing activities as authorized under the plan:

11 (A) To dispose of carryover stocks of dairy

12 products it had removed from the market in a

13 previous year, in any manner as specified in

14 paragraph (1).

15 (B) To cause the export of dairy heifers

16 with the assistance of export bonuses provided

17 by the Board on the basis of bids by exporters

18 in response to invitations for bids announced by

19 the Board.

20 (4) IN GENERAL.—The Board, in implementing

21 the annual Class IV Pool plan for any year, may un22 dertake the following activities as authorized under

23 the plan:
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1 (A) To accept stocks of dairy products

2 transferred from the Commodity Credit Cor3 poration for use in projects under the plan.

4 (B) To provide funds to the Foreign Agri5 cultural Service cooperator organization for

6 dairy products to implement export market de7 velopment projects.

8 (C) To work with the Commodity Credit

9 Corporation, the Foreign Agricultural Service,

10 marketing organizations, and other entities in

11 the dairy industry in facilitating export sales of

12 dairy products.

13 (D) To work with the Commodity Credit

14 Corporation and, through the Secretary, hu15 manitarian relief and development organizations

16 in providing dairy products for emergency relief

17 and development programs.

18 (E) To develop surplus disposal opportuni19 ties for use in years in which removals of sur20 plus dairy products will be needed.

21 (5) CONTRACTS AND AGREEMENTS.—In order

22 to efficiently manage stock acquisition and disposi23 tion under the annual Class IV Pool plans and to

24 avoid excessive overhead and unnecessary duplica25 tion in any area of the Board’s operations, the
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1 Board shall contract or enter agreements, as pro2 vided in section 4(g)(2), for the performance of any

3 or all of the functions described in paragraphs (1),

4 (3), and (4) or similar functions included in annual

5 plans.

6 (6) LIMITS ON MARKET INTERVENTION.—The

7 Board shall ensure that any activity under an an8 nual Class IV Pool plan does not interfere with nor9 mal commercial inventory build-ups of dairy prod10 ucts that are necessary to ensure adequate supplies

11 on a year-round basis. In this regard, the criterion

12 the Board shall use in planning activities under any

13 plan is that intervention by the Board in the market

14 should promote moderate, regulated market adjust15 ments and prevent steep or contraseasonal changes

16 in the prices for dairy products.

17 SEC. 6. REVISIONS OF AUTHORITY FOR ‘‘EXCESS PUR18 CHASES’’ REDUCTIONS IN PRICE.

19 Effective January 1, 1995, subsection (g) of section

20 204 of the Agricultural Act of 1949 (7 U.S.C. 1446e) is

21 amended by adding at the end thereof the following:

22 ‘‘(3) TARGETED REDUCTIONS.—

23 ‘‘(A) IN GENERAL.—At any time during

24 which a reduction in price under this subsection

25 is in effect, if during the two consecutive
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1 months immediately preceding any month, the

2 United States average manufacturing grade

3 milk price, as reported by the Secretary, does

4 not exceed the Federal support price for milk

5 by more than 50 cents per hundredweight, be6 ginning the month following such two consecu7 tive months the reduction in price shall cease

8 being collected on a uniform basis on all milk

9 produced in the 48 contiguous States and mar10 keted by producers for commercial use, and

11 shall be collected from each milk producer in

12 the contiguous 48 States only on the quantity

13 of milk marketed during each month by the

14 producer in excess of the producer’s monthly

15 base for milk marketings.

16 ‘‘(B) RATE OF REDUCTION.—The amount

17 of the reduction in the price received by produc18 ers on such over-base milk marketings shall be

19 an amount per hundredweight determined by

20 the Secretary to be sufficient, when applied to

21 the amount of all such over-base milk market22 ings during the remainder of the year, as esti23 mated by the Secretary, to result in total reduc24 tions during the remainder of the year equal to

25 the total amounts of reductions in price that
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1 would otherwise be made on a uniform basis on

2 all milk marketings under the procedures pro3 vided in paragraph (2).

4 ‘‘(C) BASES.—For purposes of determin5 ing, for each milk producer, whether the pro6 ducer is subject to the targeted reduction in

7 price under this paragraph, an annual base

8 made up to 12 monthly bases will be established

9 by the Secretary for each dairy farm reflecting

10 the farm’s milk marketings during the preced11 ing year. New milk producers will be assigned

12 a base equal to 75 percent of their milk market13 ings during each month of the year the reduc14 tion is in effect.

15 ‘‘(D) MAXIMUM TARGETED REDUC16 TIONS.—No milk producer shall be liable for a

17 targeted reduction in price under this para18 graph on more than 25 percent of the produc19 er’s marketings during any month targeted re20 ductions are in effect.

21 ‘‘(E) TERMINATION OF TARGETED REDUC22 TIONS.—If, after targeted reductions in price

23 are implemented during a year under this para24 graph, the United States average manufactur25 ing grade milk price, as reported by the Sec-
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1 retary, rises to exceed the support price for

2 milk by more than $1.50 per hundredweight

3 during two consecutive months of such year, be4 ginning the following month, the targeted re5 duction in price will cease being collected, and

6 the reduction in price shall be made uniformly

7 on all milk produced in the 48 contiguous

8 States and marketed by producers for commer9 cial use in the amount provided for in para10 graph (2).

11 ‘‘(4) TERMINATION OF ALL REDUCTIONS.—Not12 withstanding any other provision of this subsection,

13 if at any time during a year in which reductions in

14 price are being made under this subsection, the Sec15 retary, in consultation with the Dairy Export Mar16 keting Board established under section 4 of the

17 Dairy Producer Market Stabilization and Export

18 Development Act of 1994, projects (based on the

19 monthly revised estimates of Commodity Credit Cor20 poration purchases of milk and the products of milk

21 made under subsection (f)(2)) that Corporation pur22 chases of milk and the products of milk (less sales

23 under section 407 of the Agricultural Act of 1949

24 for unrestricted use) during such year shall not ex25 ceed 7,000,000,000 pounds (milk equivalent, total
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1 milk solids basis), less such amounts of milk equiva2 lent (total milk solids basis) exported in the form of

3 dairy products on which blend price payments are

4 made under section 3 of the Dairy Producer Market

5 Stabilization and Export Development Act of 1994

6 for that year, the reduction in price under this sub7 section will cease being made for the remainder of

8 the year.

9 ‘‘(5) SPECIAL REFUNDS.—

10 ‘‘(A) IN GENERAL.—If, at the end of any

11 year in which reductions in price are made

12 under this subsection, it is determined by the

13 Secretary that actual Commodity Credit Cor14 poration purchases of milk and the products of

15 milk (less sales under section 407 of the Agri16 cultural Act of 1949 for unrestricted use) dur17 ing that year did not exceed 7,000,000,000

18 pounds (milk equivalent, total milk solids basis)

19 less such amounts of milk equivalent (total milk

20 solids basis) exported in the form of dairy prod21 ucts on which blend price payments are made

22 under section 3 of the Dairy Producer Market

23 Stabilization and Export Development Act of

24 1994 for that year, the Secretary shall provide

25 refunds of all the reductions in price under this
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1 subsection made during such year, other than

2 reduction monies transferred to the Board

3 under an agreement made under section 5(a)(3)

4 of such Act. The transferred amount not sub5 ject to the special refunds shall be prorated

6 among all producers eligible for such refunds on

7 the basis of the reductions in price collected

8 from such producers during the year; and the

9 prorated amount for each producer shall be de10 ducted from the amount of refund otherwise

11 due to the producer under this paragraph.

12 ‘‘(B) REFUND NOT DEEMED A GOVERN13 MENT PAYMENT.—Any refund under this para14 graph shall not be considered as any type of

15 price support or payment for purposes of sec16 tion 1211 or 1212 of the Food Security Act of

17 1985 (16 U.S.C. 3811 and 3821).’’.

18 SEC. 7. DAIRY PROGRAM EXTENSIONS; ESTIMATES OF CCC

19 PURCHASES.

20 (a) DAIRY PROGRAM EXTENSIONS.—

21 (1) IN GENERAL.—Section 204 of the Agricul22 tural Act of 1949 (7 U.S.C. 1446e) is amended by—

23 (A) amending the section heading to read

24 as follows:
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1 ‘‘SEC. 204. MILK PRICE SUPPORT AND CERTAIN COLLEC2 TIONS FROM PRODUCERS IN CALENDAR

3 YEARS 1991 THROUGH 1999.’’;

4 (B) in subsections (a), (b), (d)(1)(A),

5 (d)(2)(A), (d)(3), (g)(1), and (k), striking out

6 ‘‘1996’’ each place it appears and inserting in

7 lieu thereof ‘‘1999’’; and

8 (C) in subsection (g)(2), striking out

9 ‘‘1996’’ and inserting in lieu thereof ‘‘1998’’.

10 (2) TRANSFER TO MILITARY AND VETERANS

11 HOSPITALS.—Subsections (a) and (b) of section 202

12 of the Agricultural Act of 1949 (7 U.S.C. 1446e)

13 are amended by striking out ‘‘1995’’ both places it

14 appears and inserting in lieu thereof ‘‘1999’’.

15 (3) FEDERAL MILK MARKETING ORDERS.—Sec16 tion 101(b) of the Agriculture and Food Act of 1981

17 (7 U.S.C. 603c note) is amended by striking out

18 ‘‘1995’’ and inserting in lieu thereof ‘‘1999’’.

19 (4) DAIRY INDEMNITY PROGRAM.—Section 3 of

20 Public Law 90–484 (7 U.S.C. 450l) is amended by

21 striking out ‘‘1995’’ and inserting in lieu thereof

22 ‘‘1999’’.

23 (5) DAIRY EXPORT INCENTIVE PROGRAM; CCC

24 EXPORT DAIRY SALES.—The Food Security Act of

25 1985 is amended by—
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1 (A) in section 153(a) (15 U.S.C. 713a–

2 14(a)), striking out ‘‘1995’’ and inserting in

3 lieu thereof ‘‘1999’’; and

4 (B) in section 1163 (7 U.S.C. 1731 note),

5 striking out ‘‘1995’’ each place it appears and

6 inserting in lieu thereof ‘‘1999’’.

7 (b) ESTIMATES OF CCC PURCHASES.—Subsection (f)

8 of section 204 of the Agricultural Act of 1949 (7 U.S.C.

9 1446e(f)) is amended to read as follows:

10 ‘‘(f) ESTIMATES OF CCC PURCHASES.—

11 ‘‘(1) IN GENERAL.—On August 1 and by No12 vember 20 of each of the calendar years 1991

13 through 1998, the Secretary shall notify the Com14 mittee on Agriculture of the House of Representa15 tives and the Committee on Agriculture, Nutrition,

16 and Forestry of the Senate regarding the value and

17 volume of milk and milk product purchases on a

18 milk equivalent, total milk solids basis, the Secretary

19 estimates that the Commodity Credit Corporation

20 will make during the upcoming calendar year, before

21 the effects from the operation of the national Class

22 IV Pool operated under section 3 of the Dairy Pro23 ducer Market Stabilization and Export Development

24 Act of 1994 for such year or from any reduction in
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1 price under subsection (g) made during such year

2 are calculated.

3 ‘‘(2) REVISIONS.—The estimates of Commodity

4 Credit Corporation purchases made under paragraph

5 (1) shall be revised monthly during the year by the

6 Dairy Export Marketing Board established under

7 section 4 of the Dairy Producer Market Stabilization

8 and Export Development Act of 1994, in cooperation

9 with the Secretary.

10 ‘‘(3) NET PURCHASES EQUIVALENT TO NET RE11 MOVALS.—As used in this section, the phrases ‘pur12 chase of milk and the products of milk’ and ‘pur13 chases of milk and the products of milk’ shall in14 clude all removals of dairy products from the domes15 tic market under this section, either by direct pur16 chase or by export under the Dairy Export Incentive

17 Program under section 153 of the Food Security Act

18 of 1985.’’.

19 SEC. 8. FEDERAL MILK ORDER SUPPLY BALANCING COST

20 SHARING PLAN.

21 Section 8c(5) of the Agricultural Adjustment Act (7

22 U.S.C. 608c(5)), reenacted with amendments by the Agri23 cultural Marketing Agreement Act of 1937, is amended

24 by adding at the end thereof the following new subpara25 graph:
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1 ‘‘(M) Authorizing the market adminis2 trator to deduct and set aside an amount when

3 making the uniform milk price calculation each

4 month, to be available to the market adminis5 trator to—

6 ‘‘(i) reimburse handlers for additional

7 costs incurred in obtaining supplemental

8 milk supplies when local supplies are insuf9 ficient for market needs;

10 ‘‘(ii) reimburse handlers for costs in11 curred in disposing of milk that exceeds

12 local market needs; and

13 ‘‘(iii) pay a distant plant that makes

14 a binding commitment to supply supple15 mental milk to the market when called

16 upon by the market administrator.’’.

Æ

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