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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4235 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Dairy Producer Market Stabilization 
and Export Development Act of 1994''.

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

    (a) Findings.--Congress finds that--
            (1) milk and dairy products are vital components of a 
        balanced diet and have high nutritive value, and the production 
        of milk and dairy products is an important segment of the 
        Nation's agricultural industry;
            (2) effective Federal dairy programs are needed to ensure 
        consumers of a reliable and adequate supply of pure and 
        wholesome milk and dairy products at reasonable prices, to 
        respond adequately to current and anticipated future supply and 
        demand problems, and to ensure a level of farm income adequate 
        to maintain productive capacity sufficient to meet anticipated 
        future needs;
            (3) the effectiveness of the current Federal dairy programs 
        is being diminished and the economic stress on milk producers 
        increasing due to the growing demands made on milk producers to 
        provide funds for reduction of the Federal budget deficit 
        through direct levies and similar measures included in budget 
        reconciliation Acts;
            (4) milk producers are being asked to pay more and more in 
        budget reconciliation levies, while the economic pressures 
        being placed on the milk production industry continue to 
        squeeze them financially;
            (5) given the stresses being put on milk producers and on 
        the current Federal dairy programs, it is in the national 
        interest and crucial to milk producers that action be taken to 
        establish a producer--not government--program to help stabilize 
        milk prices, develop markets for dairy products, and promote 
        dairy sales that is financially supported by milk producers and 
        managed within the dairy production industry;
            (6) a program to implement a national Class IV Pool to 
        establish a fair and equitable blend price for milk used in 
        commercial export dairy products and to establish a Dairy 
        Export Marketing Board to administer the Pool and otherwise 
        work to expand exports of and develop markets for milk and 
        dairy products will meet the goals of paragraph (5);
            (7) since most government outlays under the Federal milk 
        price support program stem from Commodity Credit Corporation 
        removals of surplus dairy products from the market to reduce 
        the adverse effect of the surpluses on producer market prices 
        for milk, net Federal expenditures under the price support 
        program can be reduced, and thus budget savings achieved, by 
        reducing the level of removals of surplus dairy products by the 
        Corporation under that program;
            (8) an effective way to reduce the level of the Commodity 
        Credit Corporation's price support removals is through the 
        implementation of a producer-financed program as described in 
        paragraph (6), because such a program will--
                    (A) ensure producers that there will be a blend 
                price for milk used in commercially-exported dairy 
                products sufficiently high that they will market their 
                milk excess to domestic needs in the export market 
                rather than sell it to the Corporation under the price 
                support program; and
                    (B) provide nongovernmental moneys to fund efforts 
                needed to develop additional markets for United States 
                dairy products;
            (9) if milk producers shoulder the financial burden of 
        facilitating export sales of dairy products and developing 
        markets for domestic milk production under this new program, it 
        is appropriate, as well as most conducive to the efficient 
        implementation of the program, that the milk production and 
        marketing industry be directly responsible for managing the 
        program;
            (10) the Federal milk price support program itself is the 
        responsibility of the Secretary of Agriculture under the 
        Agricultural Act of 1949, and the new producer-financed program 
        should be coordinated with the milk price support program and 
        other Department of Agriculture dairy programs; and
            (11) the future of effective milk price stabilization 
        requires the opening of new market opportunities that the 
        efficient production capacity of our Nation's milk producers 
        can respond to, and the new producer-financed program provided 
        for in this Act should include aggressive efforts to search out 
        and find new market opportunities in promising export markets.
    (b) Statement of Purposes and Policy.--
            (1) Purposes.--The purposes of this Act are to--
                    (A) provide for the implementation by producers of 
                a national Class IV Pool to establish a fair and 
                equitable blend price for milk used in commercially-
                exported dairy products;
                    (B) establish the Dairy Export Marketing Board to 
                develop and implement annual plans for the Class IV 
                Pool and exporting dairy products under this Act, and 
                to otherwise work to expand exports of and develop new 
                markets for milk and dairy products; and
                    (C) make related changes in Federal dairy programs 
                that will aid in maintaining a stable and efficient 
                dairy production industry in the United States.
            (2) Statements of policy.--
                    (A) In general.--It is declared to be the policy of 
                Congress that it is in the public interest, and 
                necessary to protect and strengthen the Nation's milk 
                production and marketing system, to reduce any adverse 
                effects of Federal budget deficit reduction actions on 
                milk producers, and to facilitate the continued 
                effective operations of the Federal dairy programs, 
                that the implementation of the producer-financed 
                national Class IV Pool program and the establishment of 
                the Dairy Export Marketing Board provided for in this 
                Act be achieved.
                    (B) Operations of the program.--It further is 
                declared to be the policy of Congress that the 
                producer-financed national Class IV Pool program 
                provided for in this Act should be operated--
                            (i) in addition to, and not as a substitute 
                        for, the Dairy Export Incentive Program of the 
                        Department of Agriculture; and
                            (ii) in a manner consistent with the trade 
                        obligations of the United States.
                    (C) Protection of consumers.--It further is 
                declared to be the policy of Congress that the powers 
                provided in this Act shall not be used to reduce the 
                production of pure and wholesome milk and dairy 
                products below the level required for United States 
                consumers or to divert production from meeting the 
                needs of such consumers, and that, in carrying out this 
                Act, due regard shall be given to the maintenance of a 
                continuous and stable supply of milk and dairy products 
                adequate to meet the demands of United States consumers 
                at prices fair both to producers and consumers.

SEC. 3. NATIONAL CLASS IV MILK MARKETING POOL.

    (a) In General.--
            (1) Establishment.--The Secretary of Agricultural, by 
        regulation as provided in subsection (f), shall establish a 
        national milk marketing pool, which shall be known as the 
        ``Class IV Pool''.
            (2) Coverage.--Effective for the period beginning January 
        1, 1995, and ending December 31, 1999, all milk produced in the 
        48 contiguous States and marketed by producers shall be entered 
        into the Class IV Pool. Milk shall enter the Pool at the time 
        the milk is removed from the farm and before it enters any 
        other marketing channel, including Federal and State milk 
        marketing orders.
            (3) First handler's duty.--Each first handler of milk shall 
        be responsible for ensuring that all milk is entered into the 
        Class IV Pool and is handled in compliance with the 
        requirements of the Pool, as provided in this Act and in 
        regulations issued by the Secretary of Agriculture under 
        subsection (f).
    (b) Pool Administration.--The Class IV Pool shall be administered, 
as provided in the annual Class IV Pool plans established under section 
5 of this Act, by the Dairy Export Marketing Board established under 
section 4 of this Act.
    (c) Blend Pricing in the Pool.--
            (1) Establishment of blend price and application to all 
        milk in the pool.--The Class IV Pool shall establish for all 
        milk entering the pool during each calendar year a blend price 
        for each hundredweight of such milk, equal to the weighted 
        average of--
                    (A) the price support level, per hundredweight, for 
                milk under the Agricultural Act of 1949, as applied to 
                all milk entering the pool that is not used for those 
                export dairy products described in subparagraph (B), as 
                determined by the Dairy Export Marketing Board; and
                    (B) the average market price, per hundredweight of 
                milk, for the milk equivalent (total milk solids basis) 
                used in that amount of export dairy products projected 
                to be exported during such year under the Class IV Pool 
                plan for that year, as determined by the Board,
        adjusted as provided in paragraph (2): Provided, That in no 
        case may such blend price be less than the milk price support 
        level per hundredweight minus 10 cents.
            (2) Adjustment to account for refunds.--The blend price for 
        a year calculated as a weighted average price for milk under 
        paragraph (1) shall be adjusted by the Dairy Export Marketing 
        Board as necessary to cover the costs of refunds paid under 
        paragraph (5) and other expenditures made out of the settlement 
        fund, as provided in subsection (d)(3), during such year.
            (3) Quarterly adjustments.--The Class IV Pool blend price 
        established for a year may be adjusted at the beginning of each 
        of the second, third, and fourth quarters of such year to 
        reflect changes in the Board's determinations as to the amount 
        of milk that will enter the Pool during the year, the amount of 
        export dairy products eligible for blend price payments under 
        paragraph (4)(B), and dairy product export market prices during 
        such year.
            (4) Application of blend pricing to milk entering the 
        pool.--The Board shall apply the Class IV Pool blend price 
        established under paragraph (1) or (3), as appropriate, to milk 
        entering the Pool by--
                    (A) collecting on each hundredweight of milk 
                entering the Pool, and depositing into the settlement 
                fund established under subsection (e), a uniform 
                adjustment amount equal to the difference between the 
                per hundredweight price support level for milk and the 
                blend price, except that, whenever the difference 
                between the price support level and the blend price is 
                less than 1 cent, or there is no difference between the 
                two figures, the Board may collect up to 1 cent on each 
                hundredweight of milk entering the Pool as necessary to 
                adequately fund the operation of the Pool and the 
                Board; and
                    (B) paying out of the settlement fund, on dairy 
                products commercially exported from the United States 
                (not including exports under the Dairy Export Incentive 
                Program) that cumulatively do not exceed the level of 
                exports for which the Class IV blend pricing shall be 
                established for the year, as provided in the Class IV 
                Pool plan for the year, an amount per hundredweight of 
                milk equivalent (total milk solids basis) exported that 
                reflects the difference between the milk equivalent 
                (total milk solids basis) market price for the product 
                exported and the Pool blend price.
            (5) Refunds.--The Dairy Export Marketing Board shall 
        provide a refund of the entire amount remitted to the 
        settlement fund on a producer's milk entering the Class IV Pool 
        during a calendar year, if the producer provides evidence that 
        the producer did not increase marketings in that calendar year 
        when compared to the producer's marketings during the 
        immediately preceding calendar year. A refund under this 
        paragraph shall not be considered as any type of price support 
        or payment for purposes of sections 1211 and 1221 of the Food 
        Security Act of 1985 (16 U.S.C. 3811 and 3821).
            (6) When blend price payments made.--Blend price payments 
        on dairy product exports under paragraph (4)(B) may be made 
        before, at the time, or after the dairy product involved is 
        exported as long as the milk equivalent (total milk solids 
        basis) market price for the exported product is adequately 
        documented and established to the satisfaction of the Board.
    (d) Handler Remittances.--Each first handler of milk produced in 
the 48 contiguous States and marketed by producers shall collect and 
remit to the Dairy Export Marketing Board blend price adjustments 
required under subsection (c)(4)(A) on all milk handled by such 
handler.
    (e) Settlement Fund.--
            (1) In general.--The Dairy Export Marketing Board shall 
        establish a special fund, to be known as the ``settlement 
        fund''. Monies in such fund shall be available solely for the 
        use of the Board to operate the Class IV Pool, make blend price 
        payments, other payments as provided in paragraph (3), and 
        refunds under subsection (c)(5), as provided in the budgets of 
        the Board.
            (2) Money into the fund.--There shall be deposited into the 
        settlement fund--
                    (A) all blend price adjustments remitted by first 
                handlers under subsection (d); and
                    (B) all revenues received by the Board from sales 
                of dairy products it has directly removed from the 
                domestic market or from any other source.
            (3) Additional expenditures out of the settlement fund.--
        Moneys in the settlement fund may be used by the Board for 
        export expansion and market development activities, and 
        administrative activities of the Board, provided for in 
        sections 4 and 5 of this Act.
            (4) Termination of fund.--The settlement fund shall 
        terminate, and any monies remaining in the Fund returned to 
        milk producers as rebates under section 4(l), at such time as 
        the Board winds up its affairs and all legal obligations of the 
        Board.
    (f) USDA Regulations.--The Secretary of Agriculture, by regulation, 
shall establish--
            (1) rules governing the manner in which blend price 
        adjustments shall be remitted by first handlers to the 
        settlement fund for milk marketed through Federal or State milk 
        marketing orders, and for milk marketed through producer-
        handlers or other operations outside the Federal and State milk 
        marketing order systems;
            (2) provisions for coordination of the operation of the 
        Class IV Pool with milk marketings under Federal and State milk 
        marketing orders, and with milk marketing done outside Federal 
        or State milk marketing orders;
            (3) such other terms and conditions, not inconsistent with 
        the provisions of this Act, necessary to effectuate the 
        establishment and operation of the Class IV Pool, the operation 
        of the Dairy Export Marketing Board, and the implementation of 
        annual Class IV Pool plans; and
            (4) provisions for assessment of penalties for violations 
        of this Act and the Secretary's regulations, and for the filing 
        of petitions by persons subject to such regulations objecting 
        to such regulations or seeking exemption from them. For the 
        purposes of regulations under this paragraph, notwithstanding 
        any other provision of law, the provisions of paragraphs (14) 
        and (15) of section 8c of the Agricultural Adjustment Act, as 
        reenacted and amended by the Agricultural Marketing Agreement 
        Act of 1937 (7 U.S.C. 608c), shall be applicable to this Act 
        and the regulations under this subsection and persons subject 
        to this Act or regulations as if such laws are orders, and such 
        persons are handlers, under section 8c.

SEC. 4. DAIRY EXPORT MARKETING BOARD.

    (a) Establishment.--Not later than October 1, 1994, or 30 days 
after the date of the enactment of this Act, whichever occurs later, 
the Secretary of Agriculture shall establish the Dairy Export Marketing 
Board to administer the national Class IV Pool established under 
section 3, develop and implement Class IV Pool plans, and perform other 
tasks of the Board provided for in this Act.
    (b) Membership.--
            (1) In general.--The Dairy Export Marketing Board shall 
        consist of 18 members appointed by the Secretary of Agriculture 
        as provided in this subsection. No person may be appointed to 
        the Board unless the Secretary determines that the person meets 
        the qualification criteria set out in paragraph (5).
            (2) Composition of board.--
                    (A) Regional distribution.--The 18 seats on the 
                Board shall be evenly allocated among the 6 geographic 
                regions described in paragraph (3).
                    (B) Regional appointments.--Three members shall be 
                appointed to the Board from each of the 6 geographic 
                regions, as follows:
                            (i) 2 members shall be qualified milk 
                        producers whose farms are located in that 
                        region, each appointed from among nominees 
                        selected by the milk producers in such region, 
                        as provided in this subsection; and
                            (ii) 1 member shall be a qualified person 
                        employed in some capacity in the dairy industry 
                        other than as a producer, and selected in such 
                        manner as the Secretary determines appropriate. 
                        For any individual employed by a company or 
                        organization that conducts business in more 
                        than one such region, such individual will be 
                        deemed to be located in the region in which 
                        such individual's normal place of business is 
                        located.
            (3) Six geographic regions.--For purposes of making 
        regional appointments of persons to the Board, as provided in 
        paragraph (2), the 48 contiguous States shall be grouped into 6 
        regions, as follows:
                    (A) Region I: Connecticut, Maine, Massachusetts, 
                New Hampshire, New Jersey, New York, Pennsylvania, 
                Rhode Island, and Vermont.
                    (B) Region II: Illinois, Indiana, Iowa, Kansas, 
                Michigan, Missouri, Nebraska, and Ohio.
                    (C) Region III: Alabama, Arkansas, Delaware, 
                Florida, Georgia, Kentucky, Louisiana, Maryland, 
                Mississippi, North Carolina, Oklahoma, South Carolina, 
                Tennessee, Texas, Virginia, and West Virginia.
                    (D) Region IV: Wisconsin.
                    (E) Region V: Colorado, Idaho, Minnesota, Montana, 
                North Dakota, Oregon, South Dakota, Utah, Washington, 
                and Wyoming.
                    (F) Region VI: Arizona, California, Nevada, and New 
                Mexico.
            (4) Selection of nominees for appointment as producer 
        members.--
                    (A) Two nominees required.--For the appointment of 
                the initial Board and whenever there is a vacancy on 
                the Board, the producers in each of the 6 geographic 
                regions described in paragraph (3) that has a producer 
                seat on the Board that is vacant shall choose, by 
                election, two producer nominees for such seat.
                    (B) Nomination process.--The Secretary shall begin 
                the process of appointing a person to fill a producer 
                seat on the Board by soliciting recommendations of the 
                names of producers in the region involved to be listed 
                on the ballot for election as a nominee for appointment 
                to that seat. The names and qualifications of producers 
                for inclusion on the ballot may be submitted by any 
                milk producer in the region, or any organization that 
                represents milk producers in such region. The Secretary 
                shall determine whether each such producer whose name 
                is submitted for inclusion on the ballot is eligible to 
                serve on the Board and meets the qualification criteria 
                set out in paragraph (5), and shall include on the 
                ballot the name of every qualified person determined to 
                be eligible and qualified if such person agrees to 
                permit his or her name being put on the ballot.
                    (C) Elections.--Following the development of any 
                ballot under subparagraph (B), the Secretary shall 
                conduct an election among milk producers in the region 
                involved to choose the two nominees for appointment to 
                the vacant seat to which the ballot applies. Each 
                producer shall have one vote in the election of each 
                nominee, and bloc voting as provided in subparagraph 
                (D) shall be permitted. The two persons receiving the 
                highest number of votes in the election shall be the 
                nominees.
                    (D) Voting by associations.--For the purpose of 
                elections under this paragraph, the Secretary shall 
                consider the vote cast by any cooperative association 
                of producers, engaged in a bona fide manner in 
                marketing milk or dairy products, as the vote of the 
                producers who are members of or under contract with 
                such cooperative association of producers. If a 
                cooperative association of producers elects to vote on 
                behalf of its members, such cooperative association 
                shall provide each producer, on whose behalf the 
                cooperative association is voting, a description of the 
                election process and a description of each nominee 
                (including the person's qualifications), together with 
                a statement of the manner in which the cooperative 
                association intends to cast its vote on behalf of the 
                membership. Such information shall inform the producer 
                of procedures to follow to cast an individual ballot 
                should the producer so choose within the period of time 
                established by the Secretary for casting ballots. Such 
                notification shall be made at least 15 days prior to 
                the election and shall include an official ballot. The 
                ballots shall be tabulated by the Secretary and the 
                vote of the cooperative association shall be adjusted 
                to reflect such individual votes.
                    (E) Additional rules.--The Secretary shall 
                establish such additional rules for the conduct of 
                elections to choose producer nominees as are 
                appropriate.
            (5) Qualification criteria.--
                    (A) Basic criteria.--The name of a person may not 
                be included on the ballot in an election to choose 
                producer nominees for the Board, nor may the Secretary 
                appoint any member to the Board, unless the Secretary 
                determines that such person meets the following 
                qualification criteria:
                            (i) the person must have substantial 
                        experience or a high level of expertise in the 
                        production of milk, the marketing of milk or 
                        dairy products, or the financing of such 
                        marketing activities;
                            (ii) if the person is being considered for 
                        a producer seat on the Board, the person must 
                        have been a milk producer for at least 5 years; 
                        and
                            (iii) if the person is being considered for 
                        a non-producer seat on the board, the person 
                        must have leadership experience in his or her 
                        field of expertise.
                    (B) Further criteria.--In choosing among producer 
                nominees or directly selecting non-producer members for 
                appointment to the Board, the Secretary shall give 
                priority to persons with--
                            (i) if the appointment is to a non-producer 
                        seat on the Board, substantial experience as a 
                        professional milk marketer; or
                            (ii) practical familiarity with, or 
                        demonstrated knowledge of, the process of 
                        marketing agricultural commodities for export 
                        or the financing of such transactions; or
                            (iii) practical familiarity with, or 
                        demonstrated knowledge of, the mechanics and 
                        market effects of moving dairy products from 
                        the processing plant into the market; or
                            (iv) substantial experience with the 
                        Federal milk price support program, or 
                        Commodity Credit Corporation removals of dairy 
                        products from the market under that program, or 
                        operations of milk marketing order blend price 
                        pools.
            (6) Diversity of appointment.--In making appointments to 
        the Board, the Secretary shall ensure that not more than one 
        person employed by a particular company or associated with a 
        particular cooperative organization that can bloc vote in the 
        election of producer nominees sits on the Board at the same 
        time.
            (7) Rejection.--The Secretary may reject any nominee 
        selected by milk producers. If there are insufficient 
        nominations from which to appoint members to the Board as a 
        result of the Secretary rejecting nominees selected by milk 
        producers, milk producers shall select additional nominees, as 
        provided in this subsection.
            (8) Time schedule.--The Secretary shall conduct the 
        regional elections of producer nominees for appointment to the 
        initial Board and appoint all the initial members to the Board 
        no later than October 1, 1994, or 30 days after the date of the 
        enactment of this Act, whichever occurs later. Thereafter, 
        whenever a seat becomes vacant for any reason, the Secretary, 
        as soon as practicable, shall conduct an election (if the 
        vacant seat is a producer seat) and make an appointment of a 
        person to fill the vacant seat.
            (9) Terms of members.--Each member of the Board shall serve 
        for a 3-year term except that terms shall be staggered, as 
        follows:
                    (A) 4 of the producer members and 2 of the non-
                producer members appointed to the initial Board shall 
                have a 1-year term;
                    (B) 4 of the producer members and 2 of the non-
                producer members appointed to the initial Board shall 
                have a 2-year term; and
                    (C) 4 of the producer members and 2 of the non-
                producer members appointed to the initial Board shall 
                have a full 3-year term.
            (10) Operations committee.--The Board may establish an 
        Operations Committee for consultation and advice, consisting of 
        persons not sitting on the Board who as a group are suitably 
        qualified, either in experience or knowledge, in the various 
        aspects of the dairy industry, including but not limited to 
        marketing order blend price pools, export marketing, and dairy 
        research and production. The Operations Committee shall have no 
        right to cast votes in any matter voted on by the Board or the 
        Board's member committees, nor shall it have the power to 
        perform any of the functions of the Board under this Act.
            (11) Conflict rules.--The members of the Board shall be 
        subject to such conflict of interest rules as determined 
        appropriate by the Secretary.
            (12) Reimbursement for expenses.--Members of the Board and 
        the Operating Committee shall serve without pay, but shall be 
        allowed reimbursement for expenses incurred in their service on 
        the Board or Committee, including reasonable travel costs and 
        out-of-pocket expenses when required to be away from their home 
        or place of business in the service of the Board or Committee.
            (13) Removal for cause.--The Secretary may remove any 
        member of the Board for good cause shown.
            (14) Termination of the board.--The Board shall terminate 
        at such date--not later than June 30, 2000--agreed on by the 
        Secretary and the Board, unless extended by later enactment of 
        Congress.
    (c) Board Procedures.--
            (1) Meetings of the board.--
                    (A) First meeting.--Within 2 weeks after a quorum 
                has been appointed to the initial Dairy Export 
                Marketing Board, the Secretary of Agriculture shall 
                convene the Board for its initial meeting; and at that 
                meeting the Board shall elect officers and adopt 
                written bylaws and rules of procedure to govern its 
                meetings, and determine a place of domicile for the 
                Board.
                    (B) Subsequent meetings.--Following the initial 
                meeting, the Board shall meet at the call of the chair, 
                but at least once every 3 months.
            (2) Quorum.--A quorum of the Board shall be 10 persons.
            (3) Notice to secretary; ex officio representation.--The 
        Board shall notify the Secretary of Agriculture in advance of 
        each meeting of the Board. The Secretary, or a representative 
        of the Secretary, shall attend each meeting as a non-voting ex 
        officio member of the Board.
    (d) Duties of the Board.--The Dairy Export Marketing Board shall 
have the duties to--
            (1) prepare annually, for each of the 1995 through 1999 
        calendar years, a plan for the operation during that year of 
        the Class IV Pool established under section 3, and establish a 
        per hundredweight blend price for milk entering the Pool during 
        such year as provided in this Act;
            (2) before the beginning of the second, third, and fourth 
        quarter of each calendar year, make adjustments in the blend 
        price for milk in the Pool as necessary to reflect changes in 
        the Board's determinations as to the amount of milk that will 
        enter the Pool during the year, the amount of export dairy 
        products eligible for blend price payments under section 
        3(c)(4)(B) of this Act, and dairy product export market prices 
        during such year;
            (3) prepare the Board's proposed budget for each calendar 
        year it is in operation, as provided in subsection (f);
            (4) implement each annual Class IV Pool plan and budget, 
        administer the Class IV Pool, and coordinate activities under 
        the plan with the programs of the Secretary of Agriculture;
            (5) evaluate results under each annual Class IV Pool plan 
        and report on the evaluations to the Secretary, and provide a 
        copy of each such report to the Senate Committee on 
        Agriculture, Nutrition, and Forestry and the House Committee on 
        Agriculture;
            (6) with respect to the estimate of the value and volume of 
        Commodity Credit Corporation milk and milk product purchases 
        made by the Secretary by November 20 of each year under section 
        204(f) of the Agricultural Act of 1949, in cooperation with the 
        Secretary, make monthly revisions of such estimate for each 
        month of the year to which the estimate applies;
            (7) receive, investigate, and report to the Secretary 
        complaints of violations of this Act and regulations issued 
        under this Act; and
            (8) manage the settlement fund established under section 
        3(e).
    (e) Powers of the Board.--
            (1) General powers.--The Dairy Export Marketing Board may--
                    (A) adopt bylaws and issue rules and regulations 
                governing the manner in which its business may be 
                conducted and the powers vested in it may be exercised;
                    (B) sue and be sued, complain and defend, in any 
                court of law or equity, State or Federal. All suits of 
                a civil nature at common law or in equity to which the 
                Board shall be a party shall be deemed to arise under 
                the laws of the United States, and the United States 
                district courts shall have original jurisdiction 
                thereof, without regard to the amount in controversy, 
                and the Board, in any capacity, without bond or 
                security, may remove any such action, suit, or 
                proceeding from a State court to the United States 
                district court by following any procedure for removal 
                then in effect. Any suit filed against the Board shall 
                be filed in the district in which the Board is 
                domiciled or in the district wherein the plaintiff 
                resides or is engaged in business;
                    (C) incur and pay for administrative and other 
                expenses under this Act;
                    (D) appoint staff, define their duties, and fix and 
                provide their compensation;
                    (E) enter into contracts and agreements as 
                necessary in the conduct of its business;
                    (F) contract for the use, in accordance with the 
                usual customs of trade and commerce, of plants and 
                facilities for the physical handling, storage, 
                processing, servicing, and transportation of dairy 
                products subject to its control;
                    (G) make final and conclusive settlement and 
                adjustment of any claims by or against the Board or its 
                accounts;
                    (H) use and expend monies in the settlement fund 
                established under section 3(e); and
                    (I) exercise other powers that are incidental to 
                its performance of the functions required or authorized 
                for it under this Act.
            (2) Specific powers.--To meet its duties under this Act and 
        implement annual Class IV Pool plans, the Board may use its 
        general powers to--
                    (A) remove, or cause the removal, of dairy products 
                from the domestic commercial market or accept donated 
                stocks from the Commodity Credit Corporation, and 
                maintain such products in inventory;
                    (B) dispose, or cause the disposal, of dairy 
                products it has removed from the market or received 
                from the Commodity Credit Corporation through outlets 
                that are not in competition with United States 
                commercial markets, primarily through export sales;
                    (C) transfer to the Commodity Credit Corporation, 
                at the Corporation's announced price, dairy products it 
                has removed from the market, as necessary for Board or 
                Corporation stock management purposes, and the 
                regulations of the Corporation shall so provide;
                    (D) cause the export of dairy cattle;
                    (E) conduct other activities related to market 
                development and product disposal specified in section 
                5, as necessary to meet its responsibilities under this 
                Act and annual Class IV Pool plans; and
                    (F) recommend to the Secretary amendments to the 
                regulations issued under this Act.
    (f) Budgets of the Board.--
            (1) Preparation.--Not later than October 31 of each of the 
        years 1994 through 1998 (or, with respect to the first budget, 
        60 days after the date of the enactment of this Act if that 
        sixtieth day is later than October 31, 1994) the Dairy Export 
        Marketing Board shall prepare a budget of its anticipated 
        expenses and disbursements in the upcoming calendar year.
            (2) Items in each budget.--
                    (A) In general.--Each such budget shall provide--
                            (i) a detailed account of the Board's 
                        anticipated administrative expenses and other 
                        outlays to be incurred in implementing the 
                        annual Class IV Pool plan for the upcoming 
                        year;
                            (ii) an estimate of expected blend price 
                        revenues and other revenues of, and blend price 
                        payments on dairy exports and refunds made by, 
                        the Board during the upcoming year, to which 
                        the budget of all other expenditures of the 
                        Board during such year shall be reconciled;
                            (iii) an analysis of anticipated 
                        expenditures for administrative expenses, 
                        showing how they are being kept to the minimum 
                        necessary to operate the Class IV Pool and the 
                        programs of the Board; and
                            (iv) a description of the anticipated 
                        contracts during such year for the removal and 
                        disposition of dairy products.
                    (B) Additional items.--The budget prepared for 
                calendar year 1995 shall include an additional amount 
                to reimburse the Commodity Credit Corporation for 
                expenditures to cover expenses of the Board prior to 
                January 1, 1995, as provided for in subsection 
                (h)(1)(B); and the budget prepared for calendar year 
                1999 shall include an additional amount to cover the 
                Board's administrative expenses to be incurred in 
                calendar year 2000 in wrapping up its business.
            (3) Submission with plan.--Each budget prepared under this 
        subsection shall be submitted to the Secretary of Agriculture 
        with the annual Class IV Pool plan for the year involved.
    (g) Administration; Contracting.--
            (1) Limitation on administrative expenses.--For any 
        calendar year in which the Secretary of Agriculture estimates 
        under section 204(f) of the Agricultural Act of 1949 that the 
        level of Commodity Credit Corporation purchases of milk and the 
        products of milk will exceed 5,000,000,000 pounds (milk 
        equivalent, total milk solids basis), the Board may not budget 
        for or incur administrative expenses (including the cost of 
        paying employees of the Board) in the year that exceed the 
        lesser of--
                    (A) $2,000,000, or
                    (B) 5 percent of the annual budget of the Board for 
                the year.
            (2) Contracts for services.--
                    (A) In general.--To ensure efficient use of funds 
                available to the Board under this Act and avoid 
                duplication of efforts, whenever possible, the Board 
                shall enter into contracts and agreements for the 
                removal of dairy products from the market, the 
                disposition of such products, and such other 
                nonadministrative activities of the Board, and for the 
                payment of cost thereof with funds available to the 
                Board under this Act.
                    (B) Scope.--The tasks that may be included under a 
                contract or agreement include, but are not limited to, 
                offers to buy, purchases of dairy products, storage and 
                delivery of dairy products, management of dairy product 
                inventories, and statistical collection and analysis.
                    (C) Requirements.--In any contract or agreement of 
                the Board under this paragraph, the contracting or 
                agreeing party shall agree to keep accurate records of 
                all its transactions, account for funds received and 
                expended, make periodic reports to the Board of 
                activities conducted, and make such other reports as 
                the Board may require.
            (3) Direct sales by others.--The Board shall ensure, to the 
        extent practicable, that the actual export marketing and sale 
        of dairy products for which blend price payments are made 
        available under this Act are done by dairy cooperatives or 
        other persons engaged in international marketing.
    (h) Funding for the Board; Expenditures.--
            (1) In general.--
                    (A) Settlement fund.--Monies in the settlement fund 
                established under section 3(e) shall be available to 
                the Dairy Export Marketing Board, effective January 1, 
                1995, for expenditure as provided in this subsection.
                    (B) CCC funds.--Notwithstanding any other provision 
                of law, prior to January 1, 1995, the activities of the 
                Board in starting up operation and preparing the 
                initial annual Class IV Pool plan shall be paid with 
                funds of the Commodity Credit Corporation. The 
                Corporation shall be reimbursed by the Board for such 
                payments from monies placed in the settlement fund 
                during 1995.
            (2) Limitation.--Monies in the settlement fund may be 
        expended by the Board only to cover budgeted activities of the 
        Board under a budget established under subsection (f), 
        including expenditures to transfer to the Commodity Credit 
        Corporation general account reimbursements provided for in 
        paragraph (1)(B), and to provide for rebates to milk producers 
        of excess monies remaining in the Fund when the Board is 
        terminated, as provided in subsection (l).
            (3) Carryover of funds.--To allow for continuity of 
        activities of the Board from year to year, monies in the 
        settlement fund shall be available to the Board without fiscal 
        or calendar year limitation, except that, in any year into 
        which monies are carried over, any Class IV Pool blend price 
        for the year under section 3(c) shall be reduced so as to 
        reduce blend price adjustments remitted to the settlement fund 
        during such year by the amount of the carryover.
    (j) Books and Records.--
            (1) In general.--The Dairy Export Marketing Board shall--
                    (A) maintain such books and records (which shall be 
                available to the Secretary for inspection and audit) as 
                the Secretary may prescribe;
                    (B) prepare and submit to the Secretary, from time 
                to time, such reports as the Secretary may prescribe; 
                and
                    (C) account for the receipt and disbursement of all 
                funds entrusted to the Board.
            (2) Audits.--The Board shall cause its books and records to 
        be audited by an independent auditor at the end of each fiscal 
        year, and a report of each such audit to be submitted to the 
        Secretary.
    (k) FACA Not Applicable.--The Federal Advisory Committee Act (5 
U.S.C. App. 2) shall not apply to the Dairy Export Marketing Board, or 
the operations of the Board.
    (l) Rebates on Termination of Board.--
            (1) In general.--At the time that the Dairy Export 
        Marketing Board terminates and winds up its affairs, any funds 
        remaining in the settlement fund established under section 3(e) 
        of this Act shall be rebated to milk producers who have been 
        subject to the operation of the Class IV Pool under section 3, 
        unless the administrative costs of distributing any such rebate 
        will exceed the amount rebated (in which case, the amount shall 
        revert to the Commodity Credit Corporation general account). 
        Rebates shall be made pro rata, based on the cumulative amount 
        of milk entered into the Class IV Pool by each milk producer to 
        which refunds under section 3(c)(5) do not apply during the 
        period the Class IV Pool was in operation.
            (2) Rebate not deemed a government payment.--Any rebate 
        under this paragraph shall not be considered as any type of 
        price support or payment for purposes of section 1211 or 1212 
        of the Food Security Act of 1985 (16 U.S.C. 3811 and 3821).

SEC. 5. ANNUAL CLASS IV POOL PLANS.

    (a) Requirements.--The Dairy Export Marketing Board shall prepare 
and implement an annual Class IV Pool plan for each of the calendar 
years 1995 through 1999, as provided in this section, that shall 
provide a business plan of operation for the Class IV Pool and the 
Board for the year, and shall include the following elements:
            (1) Generally.--The plan for any year may include such of 
        the activities described in subsection (d) or comparable 
        activities within the authority of the Board that are 
        determined by the Board to be appropriate for such year.
            (2) When estimated ccc purchases exceed 5,000,000,000 
        pounds.--For any year in which the Secretary of Agriculture 
        estimates, by November 20 of the preceding year under section 
        204(f) of the Agricultural Act of 1949, that Commodity Credit 
        Corporation purchases of milk and the products of milk (less 
        sales under section 407 of the Agricultural Act of 1949 for 
        unrestricted use) will exceed 5,000,000,000 pounds (milk 
        equivalent, total milk solids basis), the Plan shall provide 
        for--
                    (A) the establishment under section 3 of a blend 
                price for milk entering the Pool that will cover Pool 
                blend price payments on exports of dairy products 
                during such year that are equivalent in milk (total 
                milk solids basis) to the portion of the estimated 
                Commodity Credit Corporation purchases (less sales 
                under section 407 of the Agricultural Act of 1949 for 
                unrestricted use) in excess of 5,000,000,000 pounds but 
                not in excess of 7,000,000,000 pounds; and
                    (B) other appropriate measures by the Board to 
                stabilize milk and dairy product prices, and to improve 
                farm income during such year.
            (3) When estimated ccc purchases exceed 7,000,000,000 
        pounds.--For any year in which the Secretary estimates, by 
        November 20 of the preceding year under section 204(f) of the 
        Agricultural Act of 1949, that Commodity Credit Corporation 
        purchases of milk and the products of milk (less sales under 
        section 407 of the Agricultural Act of 1949 for unrestricted 
        use) will exceed 7,000,000,000 pounds (milk equivalent, total 
        milk solids basis), the plan shall provide for such market 
        intervention measures that the Board agrees with the Commodity 
        Credit Corporation that it should undertake if approved by the 
        Secretary, regarding those anticipated purchases in excess of 
        7,000,000,000 pounds, using for such purposes monies 
        transferred to the settlement fund established under section 
        3(e) of this Act by the Commodity Credit Corporation from the 
        collected reductions in price under section 204(g) of the 
        Agricultural Act of 1949.
            (4) Continuation and carryover.--For the second and 
        succeeding plans, to the extent necessary or appropriate, the 
        plan shall provide for the continuation of activities initiated 
        in the preceding year and the carryover of funds made available 
        for the preceding year but not expended and the payment of 
        obligations incurred in the preceding year but not paid.
            (5) 1999 plan.--The plan for calendar year 1999 shall cover 
        activities and expenditures of the Board in calendar year 2000 
        to wind up the business of the Board.
    (b) Schedule for Development of Plan.--Each annual Class IV Pool 
plan for a year--
            (1) shall be prepared, and the Class IV blend price for the 
        year shall be determined, during the period after the 
        preliminary estimate of net Commodity Credit Corporation 
        purchases of milk and milk products for a year is issued on 
        August 1 of the preceding year; and
            (2) shall be submitted to the Secretary not later than 
        October 31 preceding the year the plan addresses, except that 
        the plan for 1995 shall be submitted not later than 60 days 
        after the date of the enactment of this Act if such sixtieth 
        day is later than October 31, 1994.
    (c) Quarterly Revisions.--
            (1) In general.--The annual Class IV Pool plan for any year 
        shall be updated and revised at the beginning of each of the 
        second, third, and fourth quarters of the year, or at such 
        other times determined necessary by the Board.
            (2) Revision of deduction rate.--Any revision of a plan at 
        the beginning of the second, third, or fourth quarter of a 
        year, as provided in paragraph (1), may include a revision in 
        the blend price for milk entering the Class IV Pool under 
        section 3 for such year, as necessary to reflect changes in the 
        Board's determinations as to the amount of milk that will enter 
        the Pool during the year, the amount of export dairy products 
        eligible for blend price payments under section 3(c)(4)(B) of 
        this Act, and dairy product export market prices during such 
        year.
    (d) Activities of the Board in Implementing a Plan.--
            (1) When estimated ccc purchases exceed 5,000,000,000 
        pounds.--The Dairy Export Marketing Board, in implementing the 
        annual Class IV Pool plan for any year in which the Secretary 
        estimates, by November 20 of the preceding year under section 
        204(f) of the Agricultural Act of 1949, that Commodity Credit 
        Corporation purchases of milk and the products of milk (less 
        sales under section 407 of the Agricultural Act of 1949 for 
        unrestricted use) will exceed 5,000,000,000 pounds (milk 
        equivalent, total milk solids basis), the Board may undertake 
        the following activities with respect to the amount of milk 
        included in the portion of Corporation purchases in excess of 
        5,000,000,000 pounds, in addition to administering the Pool and 
        managing the settlement fund estimated under section 3(e):
                    (A) To acquire, or otherwise cause the removal of, 
                dairy products from domestic commercial markets on the 
                basis of bids by sellers in response to invitations for 
                bids announced by the Board.
                    (B) To acquire, or otherwise cause the removal of, 
                dairy products from domestic commercial markets at 
                announced prices during periods announced by the Board.
                    (C) To implement a program to cause the export of 
                dairy products the Board has removed from the market, 
                in coordination with the activities of the Foreign 
                Agricultural Service in implementing the Dairy Export 
                Incentive Program under section 153 of the Food 
                Security Act of 1985 (15 U.S.C. 713a-14). Under the 
                program, the Board may cause the export of dairy 
                products with the assistance of export bonuses provided 
                by the Board, and determined on the basis of bids by 
                exporters in response to invitations for bids announced 
                by the Board. In implementing such a program, the Board 
                shall enter into an agreement with the General Sales 
                Manager to seek the Manager's prior approval of any 
                export transactions under the program. This program 
                shall not be implemented as a replacement for the Dairy 
                Export Incentive Program, but as a supplement to it.
                    (D) To implement a program to cause the export of 
                dairy cattle. Under the program, the Board may cause 
                the export of dairy cattle with the assistance of 
                export bonuses provided by the Board, and determined on 
                the basis of bids by exporters in response to 
                invitations for bids announced by the Board.
                    (E) To effect the sale abroad, at world market 
                prices, of dairy products removed from the market by 
                the Board.
                    (F) To effect the domestic sale for unrestricted 
                use of dairy products removed from the market by the 
                Board at market prices, but in no case less than 110 
                percent of the Commodity Credit Corporation announced 
                purchase prices for the products.
                    (G) To donate, through the Secretary, products the 
                Board has removed from the market to domestic and 
                international feeding and aid programs, as needed for 
                emergency or disaster assistance.
                    (H) To transfer dairy products it has removed from 
                the market to the Commodity Credit Corporation at the 
                Corporation's announced purchase price (less an amount, 
                determined by the Secretary, to represent the average 
                level of bonus paid to exporters under the Dairy Export 
                Incentive Program), as necessary to manage Corporation 
                or Board inventories.
            (2) CCC operations.--Notwithstanding any other provision of 
        law, the Commodity Credit Corporation shall accept the transfer 
        of dairy products from the Board as provided in paragraph 
        (1)(H), and at any time may transfer its excess inventories of 
        dairy products to the control of the Board, as necessary to 
        manage Corporation or Board stocks or as provided for in 
        paragraph (4)(A).
            (3) When estimated ccc purchases are 5,000,000,000 pounds 
        or less.--The Board, in implementing the annual Class IV Pool 
        plan for any year in which the Secretary estimates, by November 
        20 of the preceding year under section 204(f) of the 
        Agricultural Act of 1949, that Commodity Credit Corporation 
        purchases of milk and the products of milk (less sales under 
        section 407 of the Agricultural Act of 1949 for unrestricted 
        use) will be 5,000,000,000 pounds or less (milk equivalent, 
        total milk solids basis), the Board may undertake the following 
        activities as authorized under the plan:
                    (A) To dispose of carryover stocks of dairy 
                products it had removed from the market in a previous 
                year, in any manner as specified in paragraph (1).
                    (B) To cause the export of dairy heifers with the 
                assistance of export bonuses provided by the Board on 
                the basis of bids by exporters in response to 
                invitations for bids announced by the Board.
            (4) In general.--The Board, in implementing the annual 
        Class IV Pool plan for any year, may undertake the following 
        activities as authorized under the plan:
                    (A) To accept stocks of dairy products transferred 
                from the Commodity Credit Corporation for use in 
                projects under the plan.
                    (B) To provide funds to the Foreign Agricultural 
                Service cooperator organization for dairy products to 
                implement export market development projects.
                    (C) To work with the Commodity Credit Corporation, 
                the Foreign Agricultural Service, marketing 
                organizations, and other entities in the dairy industry 
                in facilitating export sales of dairy products.
                    (D) To work with the Commodity Credit Corporation 
                and, through the Secretary, humanitarian relief and 
                development organizations in providing dairy products 
                for emergency relief and development programs.
                    (E) To develop surplus disposal opportunities for 
                use in years in which removals of surplus dairy 
                products will be needed.
            (5) Contracts and agreements.--In order to efficiently 
        manage stock acquisition and disposition under the annual Class 
        IV Pool plans and to avoid excessive overhead and unnecessary 
        duplication in any area of the Board's operations, the Board 
        shall contract or enter agreements, as provided in section 
        4(g)(2), for the performance of any or all of the functions 
        described in paragraphs (1), (3), and (4) or similar functions 
        included in annual plans.
            (6) Limits on market intervention.--The Board shall ensure 
        that any activity under an annual Class IV Pool plan does not 
        interfere with normal commercial inventory build-ups of dairy 
        products that are necessary to ensure adequate supplies on a 
        year-round basis. In this regard, the criterion the Board shall 
        use in planning activities under any plan is that intervention 
        by the Board in the market should promote moderate, regulated 
        market adjustments and prevent steep or contraseasonal changes 
        in the prices for dairy products.

SEC. 6. REVISIONS OF AUTHORITY FOR ``EXCESS PURCHASES'' REDUCTIONS IN 
              PRICE.

    Effective January 1, 1995, subsection (g) of section 204 of the 
Agricultural Act of 1949 (7 U.S.C. 1446e) is amended by adding at the 
end thereof the following:
            ``(3) Targeted reductions.--
                    ``(A) In general.--At any time during which a 
                reduction in price under this subsection is in effect, 
                if during the two consecutive months immediately 
                preceding any month, the United States average 
                manufacturing grade milk price, as reported by the 
                Secretary, does not exceed the Federal support price 
                for milk by more than 50 cents per hundredweight, 
                beginning the month following such two consecutive 
                months the reduction in price shall cease being 
                collected on a uniform basis on all milk produced in 
                the 48 contiguous States and marketed by producers for 
                commercial use, and shall be collected from each milk 
                producer in the contiguous 48 States only on the 
                quantity of milk marketed during each month by the 
                producer in excess of the producer's monthly base for 
                milk marketings.
                    ``(B) Rate of reduction.--The amount of the 
                reduction in the price received by producers on such 
                over-base milk marketings shall be an amount per 
                hundredweight determined by the Secretary to be 
                sufficient, when applied to the amount of all such 
                over-base milk marketings during the remainder of the 
                year, as estimated by the Secretary, to result in total 
                reductions during the remainder of the year equal to 
                the total amounts of reductions in price that would 
                otherwise be made on a uniform basis on all milk 
                marketings under the procedures provided in paragraph 
                (2).
                    ``(C) Bases.--For purposes of determining, for each 
                milk producer, whether the producer is subject to the 
                targeted reduction in price under this paragraph, an 
                annual base made up to 12 monthly bases will be 
                established by the Secretary for each dairy farm 
                reflecting the farm's milk marketings during the 
                preceding year. New milk producers will be assigned a 
                base equal to 75 percent of their milk marketings 
                during each month of the year the reduction is in 
                effect.
                    ``(D) Maximum targeted reductions.--No milk 
                producer shall be liable for a targeted reduction in 
                price under this paragraph on more than 25 percent of 
                the producer's marketings during any month targeted 
                reductions are in effect.
                    ``(E) Termination of targeted reductions.--If, 
                after targeted reductions in price are implemented 
                during a year under this paragraph, the United States 
                average manufacturing grade milk price, as reported by 
                the Secretary, rises to exceed the support price for 
                milk by more than $1.50 per hundredweight during two 
                consecutive months of such year, beginning the 
                following month, the targeted reduction in price will 
                cease being collected, and the reduction in price shall 
                be made uniformly on all milk produced in the 48 
                contiguous States and marketed by producers for 
                commercial use in the amount provided for in paragraph 
                (2).
            ``(4) Termination of all reductions.--Notwithstanding any 
        other provision of this subsection, if at any time during a 
        year in which reductions in price are being made under this 
        subsection, the Secretary, in consultation with the Dairy 
        Export Marketing Board established under section 4 of the Dairy 
        Producer Market Stabilization and Export Development Act of 
        1994, projects (based on the monthly revised estimates of 
        Commodity Credit Corporation purchases of milk and the products 
        of milk made under subsection (f)(2)) that Corporation 
        purchases of milk and the products of milk (less sales under 
        section 407 of the Agricultural Act of 1949 for unrestricted 
        use) during such year shall not exceed 7,000,000,000 pounds 
        (milk equivalent, total milk solids basis), less such amounts 
        of milk equivalent (total milk solids basis) exported in the 
        form of dairy products on which blend price payments are made 
        under section 3 of the Dairy Producer Market Stabilization and 
        Export Development Act of 1994 for that year, the reduction in 
        price under this subsection will cease being made for the 
        remainder of the year.
            ``(5) Special refunds.--
                    ``(A) In general.--If, at the end of any year in 
                which reductions in price are made under this 
                subsection, it is determined by the Secretary that 
                actual Commodity Credit Corporation purchases of milk 
                and the products of milk (less sales under section 407 
                of the Agricultural Act of 1949 for unrestricted use) 
                during that year did not exceed 7,000,000,000 pounds 
                (milk equivalent, total milk solids basis) less such 
                amounts of milk equivalent (total milk solids basis) 
                exported in the form of dairy products on which blend 
                price payments are made under section 3 of the Dairy 
                Producer Market Stabilization and Export Development 
                Act of 1994 for that year, the Secretary shall provide 
                refunds of all the reductions in price under this 
                subsection made during such year, other than reduction 
                monies transferred to the Board under an agreement made 
                under section 5(a)(3) of such Act. The transferred 
                amount not subject to the special refunds shall be 
                prorated among all producers eligible for such refunds 
                on the basis of the reductions in price collected from 
                such producers during the year; and the prorated amount 
                for each producer shall be deducted from the amount of 
                refund otherwise due to the producer under this 
                paragraph.
                    ``(B) Refund not deemed a government payment.--Any 
                refund under this paragraph shall not be considered as 
                any type of price support or payment for purposes of 
                section 1211 or 1212 of the Food Security Act of 1985 
                (16 U.S.C. 3811 and 3821).''.

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

    (a) Dairy Program Extensions.--
            (1) In general.--Section 204 of the Agricultural Act of 
        1949 (7 U.S.C. 1446e) is amended by--
                    (A) amending the section heading to read as 
                follows:

``SEC. 204. MILK PRICE SUPPORT AND CERTAIN COLLECTIONS FROM PRODUCERS 
              IN CALENDAR YEARS 1991 THROUGH 1999.'';

                    (B) in subsections (a), (b), (d)(1)(A), (d)(2)(A), 
                (d)(3), (g)(1), and (k), striking out ``1996'' each 
                place it appears and inserting in lieu thereof 
                ``1999''; and
                    (C) in subsection (g)(2), striking out ``1996'' and 
                inserting in lieu thereof ``1998''.
            (2) Transfer to military and veterans hospitals.--
        Subsections (a) and (b) of section 202 of the Agricultural Act 
        of 1949 (7 U.S.C. 1446e) are amended by striking out ``1995'' 
        both places it appears and inserting in lieu thereof ``1999''.
            (3) Federal milk marketing orders.--Section 101(b) of the 
        Agriculture and Food Act of 1981 (7 U.S.C. 603c note) is 
        amended by striking out ``1995'' and inserting in lieu thereof 
        ``1999''.
            (4) Dairy indemnity program.--Section 3 of Public Law 90-
        484 (7 U.S.C. 450l) is amended by striking out ``1995'' and 
        inserting in lieu thereof ``1999''.
            (5) Dairy export incentive program; ccc export dairy 
        sales.--The Food Security Act of 1985 is amended by--
                    (A) in section 153(a) (15 U.S.C. 713a-14(a)), 
                striking out ``1995'' and inserting in lieu thereof 
                ``1999''; and
                    (B) in section 1163 (7 U.S.C. 1731 note), striking 
                out ``1995'' each place it appears and inserting in 
                lieu thereof ``1999''.
    (b) Estimates of CCC Purchases.--Subsection (f) of section 204 of 
the Agricultural Act of 1949 (7 U.S.C. 1446e(f)) is amended to read as 
follows:
    ``(f) Estimates of CCC Purchases.--
            ``(1) In general.--On August 1 and by November 20 of each 
        of the calendar years 1991 through 1998, the Secretary shall 
        notify the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, Nutrition, 
        and Forestry of the Senate regarding the value and volume of 
        milk and milk product purchases on a milk equivalent, total 
        milk solids basis, the Secretary estimates that the Commodity 
        Credit Corporation will make during the upcoming calendar year, 
        before the effects from the operation of the national Class IV 
        Pool operated under section 3 of the Dairy Producer Market 
        Stabilization and Export Development Act of 1994 for such year 
        or from any reduction in price under subsection (g) made during 
        such year are calculated.
            ``(2) Revisions.--The estimates of Commodity Credit 
        Corporation purchases made under paragraph (1) shall be revised 
        monthly during the year by the Dairy Export Marketing Board 
        established under section 4 of the Dairy Producer Market 
        Stabilization and Export Development Act of 1994, in 
        cooperation with the Secretary.
            ``(3) Net purchases equivalent to net removals.--As used in 
        this section, the phrases `purchase of milk and the products of 
        milk' and `purchases of milk and the products of milk' shall 
        include all removals of dairy products from the domestic market 
        under this section, either by direct purchase or by export 
        under the Dairy Export Incentive Program under section 153 of 
        the Food Security Act of 1985.''.

SEC. 8. FEDERAL MILK ORDER SUPPLY BALANCING COST SHARING PLAN.

    Section 8c(5) of the Agricultural Adjustment Act (7 U.S.C. 
608c(5)), reenacted with amendments by the Agricultural Marketing 
Agreement Act of 1937, is amended by adding at the end thereof the 
following new subparagraph:
                    ``(M) Authorizing the market administrator to 
                deduct and set aside an amount when making the uniform 
                milk price calculation each month, to be available to 
                the market administrator to--
                            ``(i) reimburse handlers for additional 
                        costs incurred in obtaining supplemental milk 
                        supplies when local supplies are insufficient 
                        for market needs;
                            ``(ii) reimburse handlers for costs 
                        incurred in disposing of milk that exceeds 
                        local market needs; and
                            ``(iii) pay a distant plant that makes a 
                        binding commitment to supply supplemental milk 
                        to the market when called upon by the market 
                        administrator.''.

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