I

104TH CONGRESS

1ST SESSION H. R. 2000

To amend the Agricultural Act of 1949 to provide for the establishment

of a multiple-tier price support program for milk to assist milk producers

to receive an adequate income from their dairy operations and to support

long-term conservation practices by milk producers, while assuring sufficient low-cost dairy products for nutrition assistance programs.

IN THE HOUSE OF REPRESENTATIVES

JULY 10, 1995

Mr. SANDERS (for himself, Mr. MCHALE, Mr. HINCHEY, Mr. DELLUMS, and

Mr. FALEOMAVAEGA) introduced the following bill; which was referred to

the Committee on Agriculture

A BILL

To amend the Agricultural Act of 1949 to provide for the

establishment of a multiple-tier price support program

for milk to assist milk producers to receive an adequate

income from their dairy operations and to support longterm conservation practices by milk producers, while assuring sufficient low-cost dairy products for nutrition

assistance programs.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•HR 2000 IH

1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Dairy, Nutrition, and Conservation Act of 1995’’.

4 (b) TABLE OF CONTENTS.—The table of contents for

5 this Act is as follows:

Sec. 1. Short title and table of contents.

Sec. 2. Producer referendum to recommend implementation of milk supply

management and nutrition assistance provisions.

Sec. 3. National Milk Marketing Board.

Sec. 4. Alternative milk price support and inventory management program.

Sec. 5. Monitoring activities of National Milk Marketing Board.

Sec. 6. Financial assistance for environmental conservation compliance by milk

producers.

Sec. 7. Producer export contracts.

6 SEC. 2. PRODUCER REFERENDUM TO RECOMMEND IMPLE7 MENTATION OF MILK SUPPLY MANAGEMENT

8 AND NUTRITION ASSISTANCE PROVISIONS.

9 (a) REFERENDUM.—Title II of the Agricultural Act

10 of 1949 (7 U.S.C. 1446 et seq.) is amended by inserting

11 after section 204 the following new section:

12 ‘‘SEC. 204A. MILK PRODUCER REFERENDUM REGARDING

13 IMPLEMENTATION OF ALTERNATIVE MILK

14 PRICE SUPPORT AND INVENTORY MANAGE15 MENT PROGRAM.

16 ‘‘(a) REFERENDUM.—Not later than 30 days after

17 the date of the enactment of the Dairy, Nutrition, and

18 Conservation Act of 1995, the Secretary shall conduct a

19 referendum to determine whether milk producers in the

20 48 contiguous States favor the implementation of the al21 ternative milk price support and inventory management
3

•HR 2000 IH

1 program under section 204C in lieu of applying the rate

2 of price support (and required adjustments) specified in

3 subsections (b) and (d) of section 204 and the excess pro4 duction price reduction specified in subsection (g) of such

5 section.

6 ‘‘(b) ELIGIBLE VOTERS.—The Secretary shall con7 duct the referendum only among individual milk producers

8 in the 48 contiguous States who have been producing milk

9 during a representative period, as determined by the Sec10 retary. The Secretary shall maintain a list of eligible vot11 ers and make it available upon request. Only individual

12 producers may cast ballots in the referendum. An organi13 zation or other person representing milk producers, in14 cluding a general farm organization, may not cast ballots

15 in the referendum on behalf of milk producers.

16 ‘‘(c) CASTING BALLOTS.—The Secretary shall estab17 lish the methods by which ballots may be cast in the ref18 erendum, except that the referendum shall be conducted

19 by secret ballot and bloc voting shall not be permitted.

20 Such methods shall include casting ballots by mail (subject

21 to appropriate safeguards) and in person with a represent22 ative of the county or other office of the Consolidated

23 Farm Service Agency.

24 ‘‘(d) IMPLEMENTATION REQUIRED.—If the Secretary

25 determines that a simple majority of the milk producers
4

•HR 2000 IH

1 voting in the referendum favor the implementation of the

2 alternative milk price support and inventory management

3 program under section 204C, the Secretary (acting

4 through the National Milk Marketing Board established

5 by section 204B) shall carry out the provisions of such

6 section, beginning with the first calendar year that begins

7 after the date on which the referendum is completed. Sub8 sections (b), (d), and (g) of section 204 shall not apply

9 during and after that calendar year.’’.

10 (b) CONFORMING AMENDMENTS.—Section 204 of the

11 Agricultural Act of 1949 (7 U.S.C. 1446e) is amended—

12 (1) in subsection (a), by inserting before the pe13 riod the following: ‘‘and section 204C, if that section

14 is in effect’’;

15 (2) in subsection (b), by striking ‘‘December

16 31, 1996,’’ and inserting ‘‘the date on which the al17 ternative milk price support and inventory manage18 ment program under section 204C takes effect or

19 December 31, 1996, whichever is earlier,’’;

20 (3) in subsection (d), by adding at the end the

21 following new paragraph:

22 ‘‘(6) EFFECT OF IMPLEMENTATION OF SECTION

23 204C.—Upon the implementation of the alternative

24 milk price support and inventory management pro25 gram under section 204C, if required by section
5

•HR 2000 IH

1 204A(d), the support price adjustments required by

2 this subsection and the minimum price specified in

3 paragraph (4) shall not apply.’’; and

4 (4) in subsection (g), by adding at the end the

5 following new paragraph:

6 ‘‘(4) EFFECT OF IMPLEMENTATION OF SECTION

7 204C.—Upon the implementation of the alternative

8 milk price support and inventory management pro9 gram under section 204C, if required by section

10 204A(d), the support price reduction required by

11 this subsection shall not apply.’’.

12 SEC. 3. NATIONAL MILK MARKETING BOARD.

13 Title II of the Agricultural Act of 1949 (7 U.S.C.

14 1446 et seq.) is amended by inserting after section 204A,

15 as added by section 2, the following new section:

16 ‘‘SEC. 204B. NATIONAL MILK MARKETING BOARD.

17 ‘‘(a) ELECTION OF BOARD REQUIRED.—

18 ‘‘(1) ELECTION.—If the implementation of the

19 alternative milk price support and inventory man20 agement program under section 204C is approved in

21 the referendum required by section 204A, the Sec22 retary shall conduct an election for a National Milk

23 Marketing Board to assist the Secretary in estab24 lishing an adequate national supply and demand for

25 milk under the alternative milk price support and in-
6

•HR 2000 IH

1 ventory management program under section 204C.

2 To the extent practicable, the election shall be con3 ducted not later than 60 days before the date on

4 which the alternative milk price support and inven5 tory management program takes effect pursuant to

6 section 204A(d). If the election is not completed by

7 that date, or the Board is not capable of participat8 ing in the alternative milk price support and inven9 tory management program by that date, the Sec10 retary shall temporarily operate the program until

11 the Board determines that it is ready to assume its

12 duties under the program.

13 ‘‘(2) BOARD DEFINED.—For purposes of this

14 section and section 204C, the term ‘Board’ means

15 the National Milk Marketing Board elected under

16 this section.

17 ‘‘(b) MEMBERSHIP.—The Board shall consist of 23

18 members as follows:

19 ‘‘(1) Fourteen milk producers, two from each

20 region specified in subsection (c), who shall be elect21 ed by milk producers.

22 ‘‘(2) Seven representatives of consumers of milk

23 and milk products, one from each region specified in

24 subsection (c), who may not be milk producers, but

25 who shall be elected by milk producers.
7

•HR 2000 IH

1 ‘‘(3) Two members appointed by the Secretary

2 from among individuals who have a demonstrable ex3 pertise in the area of milk production, processing, or

4 marketing.

5 ‘‘(c) ELECTION PROCESS.—

6 ‘‘(1) CONDUCT OF ELECTIONS.—The Secretary

7 shall conduct elections to select the members of the

8 Board specified in paragraphs (1) and (2) of sub9 section (b). A separate election shall be held in each

10 of the seven geographic regions specified in para11 graph (2) to elect the two milk producer members

12 and one consumer member from each region. The

13 initial elections may be conducted by the Secretary

14 in conjunction with the referendum required under

15 section 204A to permit the timely establishment of

16 the Board before the date on which the alternative

17 milk price support and inventory management pro18 gram would take effect under section 204C.

19 ‘‘(2) BOARD REGIONS.—For purposes of elect20 ing members for the Board, the 48 contiguous

21 States shall be organized into seven geographic re22 gions as follows:

23 ‘‘(A) California, Oregon, and Washington.
8

•HR 2000 IH

1 ‘‘(B) Arizona, Arkansas, Colorado, Idaho,

2 Kansas, Montana, Nevada, New Mexico, Okla3 homa, Texas, Utah, and Wyoming.

4 ‘‘(C) Iowa, Minnesota, Missouri, Nebraska,

5 North Dakota, and South Dakota.

6 ‘‘(D) Wisconsin and Illinois.

7 ‘‘(E) Alabama, Florida, Georgia, Ken8 tucky, Louisiana, Mississippi, North Carolina,

9 South Carolina, Tennessee, and Virginia.

10 ‘‘(F) Delaware, Indiana, Maryland, Michi11 gan, New Jersey, Ohio, Pennsylvania, and West

12 Virginia.

13 ‘‘(G) Connecticut, Maine, Massachusetts,

14 New Hampshire, New York, Rhode Island, and

15 Vermont.

16 ‘‘(3) PROCEDURE FOR ELECTION.—As soon as

17 practicable after the date of the enactment of the

18 Dairy, Nutrition, and Conservation Act of 1995, the

19 Secretary shall conduct a broad-based publicity ef20 fort about the election process and solicit the names

21 of individuals to be included as candidates on the

22 ballot for the election in each region. The names of

23 proposed milk producer members may be submitted

24 by milk producers in the region or by organizations,

25 except that each nominee must be supported by at
9

•HR 2000 IH

1 least 25 individual milk producer signatures, and the

2 nominee must be a milk producer who has sold milk

3 in the past six months. The names of proposed

4 consumer members may be submitted by such per5 sons as the Secretary considers appropriate.

6 ‘‘(4) CONFLICT OF INTEREST.—The Secretary

7 shall reject any nominee to an elected position who

8 is directly involved in the marketing of dairy prod9 ucts, since the election of such a nominee would cre10 ate a conflict of interest.

11 ‘‘(5) VOTING BY PRODUCERS.—

12 ‘‘(A) ELIGIBLE VOTERS.—The Secretary

13 shall conduct an election in each region to de14 termine the members of the Board from that

15 region. The election shall be conducted only

16 among individual milk producers who have been

17 producing milk during any six months of the

18 previous year.

19 ‘‘(B) PROHIBITION ON BLOC VOTING.—

20 Only individual milk producers may cast ballots

21 in the election. An organization or other person

22 representing milk producers, including a gen23 eral farm organization, may not cast ballots in

24 the election on behalf of milk producers.
10

•HR 2000 IH

1 ‘‘(C) CASTING BALLOTS.—The Secretary

2 shall establish the methods by which ballots

3 may be cast. Such methods shall include casting

4 ballots by mail (subject to appropriate safe5 guards) and in person with a representative of

6 the county or other office of the Consolidated

7 Farm Service Agency.

8 ‘‘(d) REGIONAL BOARD.—The three members elected

9 to the Board from each region shall also serve as a Re10 gional Milk Marketing Board for that region.

11 ‘‘(e) MEETINGS OF THE BOARD.—

12 ‘‘(1) FIRST MEETING.—Within two weeks after

13 the completion of the first election of Board mem14 bers under subsection (d) in each region, the Board

15 shall convene for its initial meeting and elect offi16 cers.

17 ‘‘(2) OTHER MEETINGS.—The Board shall meet

18 at the call of the chair, or as requested by the Sec19 retary, but at least once every three months. The

20 public shall be notified of meetings one month prior

21 to each meeting.

22 ‘‘(f) PROCEDURES OF THE BOARD.—

23 ‘‘(1) QUORUM.—A quorum of the Board shall

24 be 12 members.
11

•HR 2000 IH

1 ‘‘(2) RULES OF PROCEDURE AND BYLAWS.—

2 The Board shall adopt written bylaws and rules of

3 procedures to govern its operations.

4 ‘‘(3) EX OFFICIO REPRESENTATION.—The

5 Board shall notify the Secretary in advance of each

6 meeting of the Board. The Secretary, or a represent7 ative of the Secretary, shall attend each meeting as

8 a nonvoting ex officio member of the Board.

9 ‘‘(g) TERMS; COMPENSATION.—

10 ‘‘(1) FULL TERM.—Each member of the Board

11 shall serve a four-year term, except that, for the ini12 tial Board, the member elected under subsection

13 (b)(1) from each region who received the fewer votes

14 shall serve a two-year term. The consumer members

15 shall be elected for a four-year term with an alter16 nate nonvoting consumer member. The Secretary

17 may remove for cause a member from the Board be18 fore the expiration of the term of the member.

19 ‘‘(2) VACANCIES.—A vacancy on the Board

20 shall be filled by Secretarial appointment with the

21 term expiring at the next scheduled election. Re22 gional boards shall hold regional elections to fill va23 cancies.

24 ‘‘(3) TERM LIMITS.—A member of the Board

25 may not serve on the Board for more than two con-
12

•HR 2000 IH

1 secutive full terms or a total of eight years, which2 ever occurs first. However, a member of the Board

3 subject to the preceding sentence shall become eligi4 ble for reelection or reappointment to the Board

5 upon the expiration of the four-year period begin6 ning on the date the member became ineligible for

7 the Board under such sentence.

8 ‘‘(3) REIMBURSEMENT FOR EXPENSES.—The

9 members of the Board shall serve without compensa10 tion, but shall be reimbursed for reasonable expenses

11 incurred in performing their duties as members of

12 the Board, including a per diem.

13 ‘‘(h) DUTIES.—

14 ‘‘(1) PARTICIPATION IN DAIRY PROGRAM.—The

15 Board shall assist the Secretary in implementing,

16 administering, and operating the alternative milk

17 price support and inventory management program

18 under section 204C. The program shall remain

19 under the final authority and control of the Sec20 retary.

21 ‘‘(2) MONITORING ACTUAL PRICE RECEIVED BY

22 PRODUCERS.—The Board may monitor actual prices

23 received by representative producers for milk pro24 duced in the 48 contiguous States and marketed for

25 domestic use in order to compare those prices with
13

•HR 2000 IH

1 the rate of price support for milk in effect for that

2 month and dairy prices at the processor and retail

3 levels. The Board shall publish and disseminate re4 ports regarding the results of this monitoring.

5 ‘‘(i) POWERS.—The Board shall have such incidental

6 powers consistent with the requirements of this section

7 and section 204C as the Secretary may prescribe. Such

8 powers shall include the power to hire such staff and incur

9 such other administrative expenses as necessary to meet

10 the responsibilities of the Board.

11 ‘‘(j) FUNDING AND BUDGETS.—

12 ‘‘(1) BOARD FUNDS; OPERATING ASSESS13 MENT.—Consistent with the approved budget of the

14 Board, funds of the Commodity Credit Corporation

15 shall be available to pay for activities under this sec16 tion and section 204C. In order to ensure adequate

17 Commodity Credit Corporation funds to finance

18 Board activities, all producers of milk produced in

19 the continental United States and marketed for com20 mercial use shall be assessed a National Milk Mar21 keting Board operating fee, not to exceed 1.5 cents

22 per hundredweight of milk produced.

23 ‘‘(2) BUDGETS AND OPERATING PLANS.—The

24 Board shall submit to the Secretary its proposed an25 nual budget and plan of operations for each calendar
14

•HR 2000 IH

1 year in which it operates. The budget and plan of

2 operations shall be subject to the approval of the

3 Secretary, and the Secretary may require such

4 changes in the budget or plan of operations as the

5 Secretary considers to be necessary. The Board may

6 not enter into any obligations or expend any funds

7 for a year, except as authorized in the budget for

8 the year approved by the Secretary.

9 ‘‘(k) BOOKS AND RECORDS OF THE BOARD.—

10 ‘‘(1) RECORDKEEPING AND ACCOUNTING RE11 QUIREMENTS.—The Board shall—

12 ‘‘(A) maintain such books and records,

13 which shall be available to the Secretary for in14 spection and audit, as the Secretary may pre15 scribe;

16 ‘‘(B) prepare and submit to the Secretary

17 such reports as the Secretary may prescribe;

18 and

19 ‘‘(C) account for the receipt and disburse20 ment of all funds entrusted to the Board.

21 ‘‘(2) ANNUAL INDEPENDENT AUDITS.—The

22 Board shall cause its books and records to be au23 dited by an independent auditor at the end of each

24 calendar year and a report of such audit to be sub-
15

•HR 2000 IH

1 mitted to the Secretary. The Secretary shall make

2 such report available to the public upon request.

3 ‘‘(3) ACCESS BY COMPTROLLER GENERAL.—

4 The Comptroller General and the duly authorized

5 representatives of the Comptroller General shall

6 have access to and the right to examine all books,

7 documents, papers, records, or other recorded infor8 mation within the possession or control of the

9 Board.’’.

10 SEC. 4. ALTERNATIVE MILK PRICE SUPPORT AND INVEN11 TORY MANAGEMENT PROGRAM.

12 Title II of the Agricultural Act of 1949 (7 U.S.C.

13 1446 et seq.) is amended by inserting after section 204B,

14 as added by section 3, the following new section:

15 ‘‘SEC. 204C. ALTERNATIVE MILK PRICE SUPPORT AND IN16 VENTORY MANAGEMENT PROGRAM.

17 ‘‘(a) PRICE SUPPORT RATE TO REFLECT COST OF

18 PRODUCTION.—

19 ‘‘(1) ANNUAL ADJUSTMENT.—The price of milk

20 shall be supported at a rate established by the Sec21 retary and adjusted annually to reflect the cost of

22 production for milk producers.

23 ‘‘(2) DETERMINATION OF COST OF PRODUC24 TION.—To determine the cost of milk production on
16

•HR 2000 IH

1 a per hundredweight basis, the Secretary shall con2 sider the following:

3 ‘‘(A) The latest cash cost of production (as

4 estimated by the Secretary), adjusted annually

5 by the wholesale price index.

6 ‘‘(B) Domestic market/nutrition assistance

7 adjustments equal to 7.5 percent of adjusted

8 cash cost of production.

9 ‘‘(C) Return on investment established at

10 8 percent of 70 percent of total farm assets (as

11 estimated by the Secretary) figured on a per

12 hundredweight basis.

13 ‘‘(D) Cost of conservation and environ14 mental requirements and improvements as de15 termined by the Secretary on a per hundred16 weight basis, prorated over a 10-year period.

17 ‘‘(3) BASIC FORMULA PRICE AND CLASS DIF18 FERENTIALS.—

19 ‘‘(A) CALCULATION.—The basic formula

20 price shall be equal to the sum of subpara21 graphs (A), (B), (C) of paragraph (2). If the

22 sum of such subparagraphs is at least $14 per

23 hundredweight, then the Secretary may also

24 factor in the cost of conservation improvements
17

•HR 2000 IH

1 determined under subparagraph (D) of para2 graph (2).

3 ‘‘(B) CLASS III.—Milk used for products of

4 milk listed as Class III products shall receive a

5 price not lower than the basic formula price per

6 hundredweight.

7 ‘‘(C) CLASS II.—Milk used for products of

8 milk listed as Class II products shall receive a

9 price equal to Class III products plus a dif10 ferential of 30 cents per hundredweight.

11 ‘‘(D) CLASS I.—Milk used for products of

12 milk listed as Class I products shall receive a

13 price equal to—

14 ‘‘(i) the basic formula price; plus

15 ‘‘(ii) an amount determined by a for16 mula based on a nine-hour day (milk relat17 ed labor) multiplied by 365 days and gross

18 hourly earnings MFR Labor (based on cal19 culations of the Bureau of Labor Statis20 tics) and divided by 1,500,000 pounds

21 (which is the equivalent of 15,000 hun22 dredweight, the estimated 1995 average

23 production per farm).

24 ‘‘(E) APPLICATION.—The Class I price dif25 ferential determined under subparagraph (D)
18

•HR 2000 IH

1 shall be used in all Federal and State milk mar2 keting orders in operation in the 48 contiguous

3 States.

4 ‘‘(b) MILK PRODUCTION AND CONSUMPTION ESTI5 MATE.—

6 ‘‘(1) ANNUAL ESTIMATE.—Not later than No7 vember 20 of each calendar year, the Secretary, in

8 consultation with the Board, shall publish in the

9 Federal Register an estimate of—

10 ‘‘(A) the amount of milk and the products

11 of milk in pounds (on a milk equivalent, total

12 milk solids basis) necessary to satisfy domestic

13 consumption, government domestic assistance

14 programs, of milk during the following calendar

15 year and maintain a reasonable milk reserve;

16 ‘‘(B) the amount of milk and the products

17 of milk in pounds (on a milk equivalent, total

18 milk solids basis) to be produced in the 48 con19 tiguous States during the following year; and

20 ‘‘(C) the amount of milk and the products

21 of milk in pounds (on a milk equivalent, total

22 milk solids basis) that the Commodity Credit

23 Corporation would purchase during the follow24 ing calendar year under this section or section

25 204.
19

•HR 2000 IH

1 ‘‘(2) RULES FOR ESTIMATE.—When making an

2 estimate under this subsection, the Secretary shall—

3 ‘‘(A) consider any existing inventory man4 agement programs to balance domestic supply

5 and demand; and

6 ‘‘(B) consider conditions affecting import

7 projections of all dairy products.

8 ‘‘(3) DEFINITION.—For purposes of this sec9 tion, the term ‘milk equivalent, total milk solids

10 basis’ has the meaning given that term in section

11 204(d)(5)(A).

12 ‘‘(c) MILK MARKETING ALLOCATION FACTOR.—On

13 the basis of the estimates prepared under subsection

14 (b)(1) for a calendar year, the Board shall develop a milk

15 marketing allocation factor for the purpose of determining

16 milk producer bases for that year and submit to the Sec17 retary. The milk marketing allocation factor shall be equal

18 to the ratio of subparagraphs (A) and (C) of subsection

19 (b)(1) to subparagraph (B) of such subsection.

20 ‘‘(d) MILK MARKETING HISTORIES.—

21 ‘‘(1) PRODUCER TO INCLUDE CERTAIN MILK

22 PRODUCERS USING ANOTHER’S LAND.—For pur23 poses of this section, the term ‘producer’ includes a

24 person who is actively engaged in a dairy operation

25 on a farm, as a full-time occupation (as evidenced by
20

•HR 2000 IH

1 the person’s contribution of active personal labor

2 and dairy cows to the operation), although the per3 son uses the land, equipment, or facilities of another

4 person.

5 ‘‘(2) ONE- OR FIVE-YEAR AVERAGE.—Upon im6 plementation of the Dairy, Nutrition, and Conserva7 tion Act of 1995, the Secretary shall assign to each

8 producer of milk a milk marketing history equal (at

9 the producer’s option) to—

10 ‘‘(A) the quantity of milk marketed by the

11 producer during the calendar year preceding the

12 enactment of such Act; or

13 ‘‘(B) the average quantity of milk mar14 keted by the producer during the five calendar

15 years preceding the enactment of such Act, ex16 cluding the year in which the largest quantity

17 was marketed and the year in which the small18 est quantity was marketed.

19 ‘‘(3) AMOUNTS PRODUCED.—For purposes of

20 determining the milk marketing history of a pro21 ducer under paragraph (2), all milk marketed by the

22 producer from all farms of the producer for the cal23 endar years involved shall be counted, including milk

24 subject to a reduction of the price received under

25 this section or section 204.
21

•HR 2000 IH

1 ‘‘(4) USE OF COUNTY COMMITTEES.—Subject

2 to paragraph (5), county and other committees es3 tablished under section 8(b)(5) of the Soil Conserva4 tion and Domestic Allotment Act (16 U.S.C.

5 590h(b)(5)) shall be responsible for local administra6 tion of the alternative milk price support and inven7 tory management programs.

8 ‘‘(5) COUNTY DAIRY COMMITTEE.—

9 ‘‘(A) ELECTION.—Milk producers in each

10 county shall elect a separate dairy committee

11 who are active milk producers. This committee

12 shall be responsible for decisions concerning

13 market history allocation and appeals. Counties

14 that have fewer than 50 active milk producers

15 shall join with other counties in order to com16 pose an adequate dairy committee. This com17 mittee shall serve milk producers in the com18 bined counties and adopt a single Consolidated

19 Farm Service Agency office to perform their

20 duties. Each committee shall consist of five

21 milk producers with a one-year term of office.

22 ‘‘(B) COMPENSATION.—The members of a

23 dairy committee shall be entitled to per diem

24 and mileage reimbursement in the same manner
22

•HR 2000 IH

1 as committees referred to in paragraph (4), and

2 subject to the same hourly limitations.

3 ‘‘(C) FUNDING.—The Board shall make

4 funds available to an appropriate official of the

5 Consolidated Farm Service Agency to finance

6 the cost of the dairy committees.

7 ‘‘(6) NONTRANSFERABILITY; EXCEPTIONS.—A

8 producer’s marketing history may not be transferred

9 (by sale, lease, gift, devise, or other method) except

10 as follows:

11 ‘‘(A) There is no restriction on the ability

12 of a producer who is an individual to transfer

13 the marketing history of the producer to an im14 mediate family member (such as the spouse,

15 parent, brother or sister, or child of the pro16 ducer or a person to whom the producer stands

17 in loco parentis) for use on the same farm.

18 ‘‘(B) There is no restriction on the ability

19 of a producer to sell, lease, or otherwise trans20 fer the Class I base of the producer for a farm

21 in areas in which Class I bases have been estab22 lished.

23 ‘‘(C) The relevant dairy committee shall

24 permit a producer to reestablish the marketing

25 history of a farm owned or leased by the pro-
23

•HR 2000 IH

1 ducer at another farm owned or leased by the

2 same producer.

3 ‘‘(D) The relevant dairy committee may

4 approve the transfer of the marketing history of

5 a producer (for use on the same farm or an6 other farm) to prevent extreme hardship.

7 ‘‘(E) Any producer with a marketing his8 tory shall be allowed to relocate the marketing

9 history to another location in the 48 contiguous

10 States upon notification of the dairy committee

11 for the new location.

12 ‘‘(7) SET-ASIDE OF UNUSED MARKETING HIS13 TORY FOR DAIRY COMMITTEES.—Subject to transfer

14 options specified in paragraph (6), if a producer in

15 a county receives a milk marketing history under

16 this subsection and ceases the production of milk

17 during any subsequent calendar year, the portion of

18 that milk marketing history remaining unused shall

19 be available to the dairy committee in which the pro20 ducer is located for transfer among eligible produc21 ers on an equitable basis in accordance with this

22 paragraph. The dairy committee shall transfer any

23 milk marketing history available to the committee

24 under this paragraph to persons (excluding nonfarm
24

•HR 2000 IH

1 corporations and investors) in the following order of

2 priority:

3 ‘‘(A) New milk producers described in

4 paragraph (8).

5 ‘‘(B) Producers in the county whose milk

6 marketing history for the calendar year involved

7 is less than 1,000,000 pounds for each pro8 ducer.

9 ‘‘(C) Milk producers who have been in op10 eration for less than 5 years.

11 ‘‘(D) Other producers in the county.

12 ‘‘(E) Other producers in the region in

13 which the county is located, to be recommended

14 by the relevant regional milk marketing board

15 established under section 204B(d).

16 ‘‘(F) Other regions of the Continental

17 United States.

18 ‘‘(8) NEW OR REENTRY PRODUCERS.—The rel19 evant dairy committee shall assign to a new milk

20 producer a milk marketing history at a reasonable

21 level taking into consideration the milk marketing

22 histories of similarly situated producers in the coun23 ty and the availability of excess milk marketing his24 tories for distribution by the committee under para25 graph (7). The term ‘new milk producer’ means a
25

•HR 2000 IH

1 person who does not have a milk marketing history

2 and is purchasing production units (cows or a farm)

3 or who previously relinquished the producer’s milk

4 marketing history.

5 ‘‘(9) SCHEME OR DEVICE.—If the Secretary

6 makes a final determination that a producer has

7 adopted a scheme or device to inflate the milk mar8 keting history of the producer or to evade reductions

9 in price required under this section or section 204,

10 the producer shall be ineligible for two calendar

11 years to receive any marketing history under this

12 subsection or to receive any domestic production

13 base under subsection (e). A producer shall have the

14 right to appeal an adverse decision under this para15 graph in the manner provided by subtitle H of title

16 II of the Federal Crop Insurance Reform and De17 partment of Agriculture Reorganization Act of 1994

18 (7 U.S.C. 6991 et seq.).

19 ‘‘(e) DETERMINATION OF DOMESTIC PRODUCTION

20 BASE.—

21 ‘‘(1) NOTIFICATION.—Before January 1 of each

22 calendar year, the Secretary, in consultation with

23 the Board, shall notify each milk producer in the 48

24 contiguous States of the domestic production base of

25 the producer for that year.
26

•HR 2000 IH

1 ‘‘(2) MARKETING HISTORY EQUAL TO OR

2 UNDER 1,000,000 POUNDS.—If the milk marketing

3 history determined under subsection (d) for a milk

4 producer does not exceed 1,000,000 pounds, the do5 mestic production base for the producer shall be

6 equal to the product of—

7 ‘‘(A) the milk marketing history of the

8 producer; and

9 ‘‘(B) the milk marketing allocation factor

10 determined for that year under subsection (c)

11 or one, whichever is greater.

12 ‘‘(3) MARKETING HISTORY IN EXCESS OF

13 1,000,000 POUNDS.—If the milk marketing history

14 determined under subsection (d) for a milk producer

15 exceeds 1,000,000 pounds, the domestic production

16 base for the producer shall be equal to the sum of—

17 ‘‘(A) 1,000,000 pounds; and

18 ‘‘(B) the product of—

19 ‘‘(i) the milk marketing history of the

20 producer (reduced by 1,000,000 pounds);

21 and

22 ‘‘(ii) the milk marketing allocation

23 factor determined for that year under sub24 section (c).
27

•HR 2000 IH

1 ‘‘(4) REDUCTION FOR DISUSE.—Any producer

2 who produces less than the producer’s domestic pro3 duction base for two consecutive years (except in the

4 case of a disaster) shall have the producer’s domes5 tic marketing base reduced to an amount equal to

6 the average of the two lower years. The amount of

7 base reduction shall then be reallocated by the rel8 evant dairy committee.

9 ‘‘(f) DESIGNATION OF NUTRITION ASSISTANCE

10 BASE.—

11 ‘‘(1) PURPOSE OF BASE.—To assure adequate

12 quantities of low-cost milk and milk products for the

13 Commodity Credit Corporation for distribution

14 through nutrition assistance programs, the Sec15 retary, in consultation with the Board, shall assign

16 to each milk producer a nutrition assistance base for

17 each calendar year. The nutrition assistance base

18 shall be part of the domestic production base of the

19 producer. The Commodity Credit Corporation shall

20 offer to purchase from each purchaser, at the re21 duced price specified in subsection (g)(1), a quantity

22 of milk corresponding to the nutrition assistance

23 base of the producer.

24 ‘‘(2) DETERMINATION.—The nutrition assist25 ance base for a producer shall be equal to not more
28

•HR 2000 IH

1 than five percent of the domestic production base of

2 the producer under subsection (e).

3 ‘‘(3) NOTIFICATION.—The notification required

4 to be provided to milk producers under subsection

5 (e)(1) for each calendar year shall also include the

6 nutrition assistance base for the producers for that

7 year.

8 ‘‘(g) DAIRY NUTRITION ASSISTANCE PRICE REDUC9 TION.—

10 ‘‘(1) PRICE REDUCTION.—All milk producers in

11 the 48 contiguous States shall receive a reduced

12 price for that percentage of their domestic produc13 tion base that is determined by the Secretary, in

14 consultation with the Board, to be required to fulfill

15 the needs of domestic nutrition assistance programs.

16 The amount of reduction under this subsection shall

17 be equal to the product of—

18 ‘‘(A) 70 percent of the rate of price sup19 port for milk per hundredweight in effect for

20 that calendar year for the class of milk in21 volved; and

22 ‘‘(B) the quantity of milk (in hundred23 weight) so marketed.
29

•HR 2000 IH

1 ‘‘(2) DURATION.—These reductions shall be

2 made on a monthly basis until the producer’s total

3 nutrition assistance base has been fulfilled.

4 ‘‘(h) EXCESS PRODUCTION.—

5 ‘‘(1) USE AS EXPORTS.—If a milk producer in

6 the 48 contiguous States produces milk in excess of

7 the domestic production base of the producer, the

8 producer may dispose of such excess production only

9 on the export market as provided in section 7.

10 ‘‘(2) PENALTIES.—If any person fails to comply

11 with the requirements of paragraph (1) regarding

12 the disposal of excess production, the person shall be

13 liable for a civil penalty up to an amount determined

14 by multiplying—

15 ‘‘(A) the quantity of milk involved in the

16 violation; by

17 ‘‘(B) 80 percent of the rate of price sup18 port for milk per hundredweight in effect for

19 that calendar year for the class of milk involved

20 in the violation.

21 ‘‘(3) ENFORCEMENT.—The Secretary may en22 force paragraph (2) in the courts of the United

23 States.

24 ‘‘(4) PRODUCT AND PENALTY DISTRIBUTION.—
30

•HR 2000 IH

1 ‘‘(A) USE OF ACQUIRED MILK.—Products

2 of milk purchased by the Commodity Credit

3 Corporation under this subsection shall be used

4 for United States foreign food assistance pro5 grams.

6 ‘‘(B) USE OF PAYMENTS.—Penalty pay7 ments received by the Commodity Credit Cor8 poration under this subsection shall be used to

9 help fund the Dairy Export Incentive Pro10 gram.’’.

11 SEC. 5. MONITORING ACTIVITIES OF NATIONAL MILK MAR12 KETING BOARD.

13 (a) MONITORING ACTIVITIES.—The National Milk

14 Marketing Board established under section 204B of the

15 Agricultural Act of 1949 shall continuously monitor—

16 (1) the relationship between the price received

17 by milk producers for sales of milk, the profits re18 ceived by processors of milk and milk products, and

19 the prices paid by consumers for milk and milk

20 products; and

21 (2) the actual need of nutrition assistance pro22 grams of the United States for milk and milk prod23 ucts.
31

•HR 2000 IH

1 (b) REPORTING.—Not less than twice annually, the

2 Board shall submit to Congress the results of its monitor3 ing activities under subsection (a).

4 SEC. 6. FINANCIAL ASSISTANCE FOR ENVIRONMENTAL

5 CONSERVATION COMPLIANCE BY MILK PRO6 DUCERS.

7 (a) FUNDS FOR ENVIRONMENTAL CONSERVATION

8 COMPLIANCE.—To encourage environmentally sound con9 servation practices by milk producers in the 48 contiguous

10 States, the Secretary of Agriculture shall determine the

11 amount of money, on a per hundredweight of milk basis

12 as provided in section 204C(a)(2)(D) of the Dairy, Nutri13 tion, and Conservation Act of 1995, that would cover the

14 cost of environmentally sound conservation practices by

15 such milk producers mandated by Federal, State, or local

16 laws.

17 (b) AVAILABILITY.—To the extent funds are available

18 under subsection (d) to carry out this section, such funds

19 shall be provided to milk producers on an annual basis,

20 subject to Consolidated Farm Service Agency committee

21 approval. Amounts provided under this subsection shall be

22 in addition to any Federal cost share payments made to

23 milk producers under any other law.

24 (c) AMOUNT OF PAYMENTS.—State and county Con25 solidated Farm Service Agency committees shall deter-
32

•HR 2000 IH

1 mine which farm practices for which payments are avail2 able are applicable to each milk producer based on the

3 producer’s farm plan and other factors. Payments to each

4 milk producer shall be based on the economic cost of ob5 taining and maintaining compliance and the number of

6 programs in which the producer participates.

7 (d) DEDUCTION.—The amount of money involved

8 shall be considered an environmental conservation compli9 ance fee deducted from the Federal or State order pool

10 prior to the computation of the Federal order price. These

11 deductions shall be made and held in escrow by the State

12 Consolidated Farm Service Agency director in the State

13 of the producer’s residence until compliance payments are

14 made. In the case of nonregulated areas, provisions shall

15 be made for environmental conservation compliance fees

16 to be deducted by the State Regulatory Commission in17 volved or the State Commissioner of Agriculture.

18 (e) ENVIRONMENTAL CONSERVATION COMPLIANCE

19 PROGRAMS.—Environmental conservation compliance pro20 grams shall include at least the following:

21 (1) Manure management systems and

22 composting systems.

23 (2) Waste water management.

24 (3) Wetland conservation practices.

25 (4) Pesticide and herbicide alternatives.
33

•HR 2000 IH

1 (5) Rotational grazing.

2 (6) Green strips.

3 SEC. 7. PRODUCER EXPORT CONTRACTS.

4 (a) EXPORT CONTRACTS.—Any milk producer in the

5 48 contiguous States shall be allowed to contract directly

6 (or indirectly through another person) any volume of milk

7 in hundredweights or products of milk at a predetermined

8 price agreed to by all parties involved for the sole purpose

9 of export out of the United States.

Æ

HR 2000 IH——2

HR 2000 IH——3