II 

108TH CONGRESS 

2D SESSION S. 2525 

To establish regional dairy marketing areas to stabilize the price of milk 

and support the income of dairy producers. 

IN THE SENATE OF THE UNITED STATES 

JUNE 16, 2004 

Mr. SPECTER (for himself and Mr. SCHUMER) introduced the following bill; 

which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry 

A BILL 

To establish regional dairy marketing areas to stabilize the 

price of milk and support the income of dairy producers. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘National Dairy Equity 

5 Act of 2004’’. 

6 SEC. 2. REGIONAL DAIRY MARKETING AREAS. 

7 Subtitle E of title I of the Farm Security and Rural 

8 Investment Act of 2002 (7 U.S.C. 7981 et seq.) is amend9 ed— 
2 

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1 (1) by inserting before section 1501 (7 U.S.C. 

2 7981) the following: 

3 ‘‘CHAPTER 1—GENERAL PROVISIONS’’; 

4 (2) by adding at the end the following: 

5 ‘‘CHAPTER 2—REGIONAL DAIRY 

6 MARKETING AREAS 

7 ‘‘SEC. 1511. DEFINITIONS. 

8 ‘‘In this chapter: 

9 ‘‘(1) BOARD.—The term ‘Board’ means the Re10 gional Dairy Board established for a Region under 

11 section 1514. 

12 ‘‘(2) CLASSES OF MILK.—The terms ‘Class I 

13 milk’, ‘Class II milk’, ‘Class III milk’, and ‘Class IV 

14 milk’ mean milk (including components of milk) 

15 classified as Class I, II, III, or IV milk, respectively, 

16 under a Federal milk marketing order. 

17 ‘‘(3) COVERED PROCESSOR.—The term ‘covered 

18 processor’ means a person or entity operating— 

19 ‘‘(A) a milk plant located in the regulated 

20 area of a Region; or 

21 ‘‘(B) a milk plant that, while not located 

22 in the regulated area of a Region, distributes 

23 Class I milk products in a regulated area. 
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1 ‘‘(4) ELIGIBLE PRODUCER.—(A) The term ‘eli2 gible producer’ means an individual or entity that 

3 the Secretary determines directly or indirectly— 

4 ‘‘(i) shares in the risk of producing milk; 

5 and 

6 ‘‘(ii) makes contributions (including land, 

7 labor, management, equipment, or capital) to 

8 the dairy farming operation of the individual or 

9 entity that are at least commensurate with the 

10 share of the individual or entity of the proceeds 

11 of the operation. 

12 ‘‘(B) The term does not include an individual or 

13 entity that elects under section 1512(c) to continue 

14 to receive national dairy market loss payments pur15 suant to a contract entered into under section 1502. 

16 ‘‘(5) FUND.—The term ‘Fund’ means the Na17 tional Dairy Producers Fund established under sec18 tion 1518. 

19 ‘‘(6) FEDERAL MILK MARKETING ORDER.—The 

20 term ‘Federal milk marketing order’ means a Fed21 eral milk marketing order issued under section 8c of 

22 the Agricultural Adjustment Act (7 U.S.C. 608c), 

23 reenacted with amendments by the Agricultural 

24 Marketing Agreement Act of 1937. 
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1 ‘‘(7) OVER-ORDER PREMIUM.—The term ‘over2 order premium’ means the difference between— 

3 ‘‘(A) the over-order price established by 

4 the Board for the regulated area of a Region; 

5 and 

6 ‘‘(B) the Class I milk price per hundred7 weight in Boston under the applicable Federal 

8 milk marketing order. 

9 ‘‘(8) OVER-ORDER PRICE.—The term ‘over10 order price’ means the minimum price for Class I 

11 milk in the regulated area of a Region, as estab12 lished by the Board by regulation under section 

13 1515. 

14 ‘‘(9) PARTIALLY REGULATED PLANT.—(A) The 

15 term ‘partially regulated plant’ means— 

16 ‘‘(i) a milk plant that, while not located in 

17 the regulated area of a Region, distributes 

18 Class I milk products in a regulated area; or 

19 ‘‘(ii) a milk plant that, while located in the 

20 regulated area of a Region, distributes Class I 

21 milk products in the regulated area of a dif22 ferent Region. 

23 ‘‘(B) The term does not include a milk plant 

24 described in subparagraph (A) that distributes less 

25 than a minimum quantity of Class I milk in the reg-
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1 ulated area in which such distribution occurs, or de2 rives less than a minimum quantity of receipts from 

3 such distribution. The Board for the regulated area 

4 in which such distribution occurs shall establish the 

5 minimum quantity of milk or receipts for purposes 

6 of this exclusion. 

7 ‘‘(10) PARTICIPATING STATE.—The term ‘par8 ticipating State’ means a State that is designated as 

9 a participating State in a Region under section 

10 1512. 

11 ‘‘(11) POOL PLANT.—The term ‘pool plant’ 

12 means a milk plant located in the regulated area of 

13 a Region. 

14 ‘‘(12) REGION.—The term ‘Region’ means a 

15 Regional Dairy Marketing Area established under 

16 section 1513. 

17 ‘‘(13) REGULATED AREA.—The term ‘regulated 

18 area’ means that portion of a Region consisting of 

19 participating States. 

20 ‘‘(14) SECRETARY.—The term ‘Secretary’ 

21 means the Secretary of Agriculture. 

22 ‘‘SEC. 1512. PARTICIPATING STATES. 

23 ‘‘(a) DESIGNATION OF PARTICIPATING STATES.— 

24 For the purpose of this chapter, the following States are 

25 participating States: 
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1 ‘‘(1) Each State in the Northeast, Southern, 

2 and Upper Midwest Regions specified in section 

3 1513. 

4 ‘‘(2) Each State in a different Region specified 

5 in section 1513, if that State elects to become a par6 ticipating State by providing to the Secretary writ7 ten notice through the Governor of the State in ac8 cordance with State law. 

9 ‘‘(b) TERMINATION OF PARTICIPATION.— 

10 ‘‘(1) METHOD OF TERMINATION.—To terminate 

11 the designation of a State as a participating State 

12 in a Region, the Governor of the State (with the 

13 concurrence of the legislature of the State) shall 

14 submit written notice to the Secretary and the appli15 cable Board of the termination. 

16 ‘‘(2) EFFECTIVE DATE OF TERMINATION.— 

17 ‘‘(A) INITIAL TERMINATION AUTHORITY.— 

18 If a State submits the written notice required 

19 by paragraph (1) before the end of the 30-day 

20 period beginning on the date of enactment of 

21 this chapter, the termination of the designation 

22 of the State as a participating State shall take 

23 effect 30 days after the date on which the no24 tice was submitted. 
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1 ‘‘(B) SUBSEQUENT TERMINATION AUTHOR2 ITY.—If a State submits the written notice re3 quired by paragraph (1) after the end of the pe4 riod specified in subparagraph (A), the termi5 nation of the designation of the State as a par6 ticipating State shall take effect 1 year after 

7 the date on which notice was submitted. 

8 ‘‘(c) RELATION TO NATIONAL DAIRY MARKET LOSS

9 PAYMENTS.— 

10 ‘‘(1) ELECTION OF BENEFITS.—In the case of 

11 each eligible producer operating in a participating 

12 State that is also a party to a contract entered into 

13 under section 1502 to receive national dairy market 

14 loss payments, the Secretary shall give the producer 

15 a 60-day period within which to elect to terminate 

16 the contract and to instead receive payments under 

17 this chapter. The 60-day period for eligible pro18 ducers in a State shall commence on the date on 

19 which the State is first designated as a participating 

20 State under subsection (a). 

21 ‘‘(2) EFFECTIVE DATE OF TERMINATION.—If 

22 an eligible producer elects to terminate a contract 

23 under section 1502, as authorized by paragraph (1), 

24 the termination shall take effect on the date on 

25 which payments are first made to eligible producers 
8 

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1 under section 1521 in the participating State in 

2 which the producer operates. 

3 ‘‘(3) PROTECTION DURING INITIAL STATE TER4 MINATION PERIOD.— If a State exercises the initial 

5 termination authority provided under subsection (b), 

6 any election made by an eligible producer in that 

7 State under paragraph (1) to terminate a contract 

8 under section 1502 shall not take effect. 

9 ‘‘(4) EFFECT OF ELECTION TO CONTINUE CON10 TRACT.—An eligible producer that does not elect to 

11 terminate a contract under section 1502, as author12 ized by paragraph (1), shall cease to be an eligible 

13 producer for the purpose of this chapter at the end 

14 of the period specified in such paragraph. The con15 tract of such a producer shall terminate on Sep16 tember 30, 2005, notwithstanding any amendment 

17 to section 1502 to extend the duration of such con18 tracts. After that date, the producer shall be ineli19 gible for national dairy market loss payments under 

20 section 1502 and ineligible for payments under this 

21 chapter. 

22 ‘‘SEC. 1513. DAIRY MARKETING AREAS. 

23 ‘‘There are established 5 Regional Dairy Marketing 

24 Areas to be composed of the following States, so long as 

25 the States are designated as participating States: 
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1 ‘‘(1) NORTHEAST REGION.—A Northeast Dairy 

2 Marketing Area composed of the States of Con3 necticut, Delaware, Maine, Maryland, Massachu4 setts, New Hampshire, New Jersey, New York, 

5 Ohio, Pennsylvania, Rhode Island, and Vermont. 

6 ‘‘(2) SOUTHERN REGION.—A Southern Dairy 

7 Marketing Area composed of the States of Alabama, 

8 Arkansas, Florida, Georgia, Kansas, Kentucky, Lou9 isiana, Mississippi, Missouri, Nebraska, North Caro10 lina, Oklahoma, South Carolina, Texas, Tennessee, 

11 Virginia, and West Virginia. 

12 ‘‘(3) UPPER MIDWEST REGION.—An Upper 

13 Midwest Dairy Marketing Area composed of the 

14 States of Illinois, Indiana, Iowa, Michigan, Min15 nesota, North Dakota, South Dakota, and Wis16 consin. 

17 ‘‘(4) INTERMOUNTAIN REGION.—An Inter18 mountain Dairy Marketing Area composed of the 

19 States of Arizona, Colorado, Idaho, Montana, Ne20 vada, New Mexico, Utah, and Wyoming. 

21 ‘‘(5) PACIFIC REGION.—A Pacific Dairy Mar22 keting Area composed of the States of Alaska, Cali23 fornia, Hawaii, Oregon, and Washington. 
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1 ‘‘SEC. 1514. REGIONAL DAIRY BOARDS. 

2 ‘‘(a) IN GENERAL.—Each Region shall be adminis3 tered by a Regional Dairy Board. 

4 ‘‘(b) COMPOSITION.— 

5 ‘‘(1) NUMBER AND APPOINTMENT.—The Board 

6 for a Region shall be composed of 3 members from 

7 each participating State in the Region, appointed by 

8 the Secretary from nominations submitted as pro9 vided in paragraph (2). 

10 ‘‘(2) NOMINATION PROCESS.—The members of 

11 the Board from a participating State shall be se12 lected from at least 9 individuals nominated by the 

13 Governor of the State, except that, if the commis14 sioner of the department of agriculture of the State 

15 is an elected position, the nominations for the State 

16 shall be made by the commissioner. The nominations 

17 shall be made in consultation with eligible producers 

18 and the dairy industry in the participating State. 

19 ‘‘(3) REPRESENTATION.—Of the members of 

20 the Board nominated and appointed to represent a 

21 participating State— 

22 ‘‘(A) at least 1 member shall be an eligible 

23 producer in the State at the time of nomination 

24 and appointment; and 

25 ‘‘(B) at least 1 member shall be a con26 sumer representative. 
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1 ‘‘(c) TERMS.— 

2 ‘‘(1) IN GENERAL.—Except as provided in para3 graph (2), each member of the Board shall serve for 

4 a term of 3 years. 

5 ‘‘(2) INITIAL APPOINTMENTS.—Of the members 

6 first appointed to the Board from a participating 

7 State, the Secretary shall appoint— 

8 ‘‘(A) 1 member to serve a term of 1 year; 

9 ‘‘(B) 1 member to a term of 2 years; and 

10 ‘‘(C) 1 member to a term of 3 years. 

11 ‘‘(d) VOTING.—The members of the Board rep12 resenting a participating State shall be entitled to cast 

13 only 1 vote on behalf of the participating State in any 

14 vote taken by members of the Board. 

15 ‘‘(e) POWERS.—In carrying out this chapter in a Re16 gion, the Board for the Region is authorized— 

17 ‘‘(1) to investigate, or provide for investigations 

18 or research projects designed to review, the laws of 

19 participating States in the Region— 

20 ‘‘(A) to measure the impact of the laws 

21 on— 

22 ‘‘(i) the production and marketing of 

23 milk; and 

24 ‘‘(ii) the shipment of milk and milk 

25 products in the Region; and 
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1 ‘‘(B) to review the administration and 

2 costs of the laws. 

3 ‘‘(2) to study and recommend to participating 

4 States of the Region joint or cooperative programs 

5 for the administration of dairy marketing laws and 

6 to prepare estimates of cost savings and benefits of 

7 such programs; 

8 ‘‘(3) to encourage harmonious relationships be9 tween the various elements of the dairy industry in 

10 the Region for the solution of material problems, in11 cluding conducting symposia or conferences designed 

12 to improve dairy-industry relations; or resolve prob13 lems of the dairy industry; 

14 ‘‘(4) to submit to participating States in the 

15 Region periodic reports on activities and programs 

16 of the Board; 

17 ‘‘(5) to review the processing and marketing 

18 system for milk and milk products in the regulated 

19 area of the Region and to recommend changes in the 

20 system used for the production and distribution of 

21 milk to assist, improve, or promote more efficient 

22 production and distribution of milk; 

23 ‘‘(6) to investigate costs and charges in the reg24 ulated area of the Region for producing, hauling, 

25 handling, processing, distributing, selling, and con-
13 

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1 ducting all other services performed with respect to 

2 milk; 

3 ‘‘(7) to examine— 

4 ‘‘(A) economic forces affecting eligible pro5 ducers in the Region; 

6 ‘‘(B) probable trends in production and 

7 consumption of milk and milk products in the 

8 Region; 

9 ‘‘(C) the level of dairy farm prices in rela10 tion to costs in the Region; 

11 ‘‘(D) the financial condition of eligible pro12 ducers in the Region; and 

13 ‘‘(E) the need for an emergency order to 

14 relieve critical conditions on dairy farms in the 

15 regulated area; 

16 ‘‘(8) to take such actions as may be necessary 

17 to manage any overproduction of milk in the regu18 lated area of the Region, including the authority to 

19 develop and implement an incentive-based supply 

20 management program in addition to other actions to 

21 manage such overproduction; and 

22 ‘‘(9) to issue such orders, promulgate such reg23 ulations, and take such other actions as are nec24 essary to carry out this chapter in the regulated 

25 area of the Region. 
14 

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1 ‘‘(f) USE OF OTHER AGENCIES.—The Board for a 

2 Region shall, to the maximum extent practicable, enter 

3 into agreements with Federal or State agencies for the ex4 change of information or services for the purpose of reduc5 ing regulatory burden and cost of administering this chap6 ter. The Board may reimburse other agencies for the rea7 sonable cost of providing the services. 

8 ‘‘(g) TECHNICAL ASSISTANCE.—At the request of the 

9 Board, the administrator of a Federal milk marketing 

10 order shall provide technical assistance to the Board. The 

11 Board shall reimburse the administrator for the reason12 able cost of providing the technical assistance. 

13 ‘‘SEC. 1515. ESTABLISHMENT OF OVER-ORDER PRICE FOR 

14 SALE OF CLASS I MILK. 

15 ‘‘(a) AUTHORITY TO ESTABLISH OVER-ORDER

16 PRICE.—Subject to subsection (b), the Board for a Region 

17 may establish, by regulation, an over-order price for the 

18 sale of Class I milk in the regulated area of a Region 

19 that— 

20 ‘‘(1) is higher than the price for Class I milk 

21 established under Federal milk marketing orders op22 erating in the regulated area; and 

23 ‘‘(2) is higher than the price for fluid milk oth24 erwise applicable in any portion of the regulated 

25 area not covered by a Federal milk marketing order. 
15 

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1 ‘‘(b) MAXIMUM AUTHORIZED OVER-ORDER PRICE.— 

2 During the beginning on the date of the enactment of this 

3 chapter and ending on December 31, 2005, an over-order 

4 price established under subsection (a) may not exceed 

5 $17.50 per hundredweight. For each subsequent calendar 

6 year, the maximum over-order price applicable during the 

7 preceding year shall be adjusted by the Secretary to reflect 

8 changes for the 12-month period ending the preceding No9 vember 30 in the Consumer Price Index for All Urban 

10 Consumers published by the Bureau of Labor Statistics 

11 of the Department of Labor. 

12 ‘‘(c) APPLICATION OF OVER-ORDER PRICE AND PRE13 MIUM.— 

14 ‘‘(1) UNIFORM PRICES.—In the regulations es15 tablishing an over-order price, the Board shall pro16 vide for— 

17 ‘‘(A) the payment of uniform prices to all 

18 eligible producers and associations of eligible 

19 producers delivering milk to all covered proc20 essors for all milk so delivered, irrespective of 

21 the uses made of the milk by an individual cov22 ered processor; or 

23 ‘‘(B) the payment of uniform prices to all 

24 eligible producers and associations of eligible 

25 producers delivering milk to the same covered 
16 

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1 processor for all milk delivered by the eligible 

2 producers and associations to that covered proc3 essor. 

4 ‘‘(2) PAYMENT BY COVERED PROCESSORS.—As 

5 provided in section 1516, the over-order premium 

6 applicable to the regulated area of a Region, deter7 mined on the basis of the over-order price estab8 lished under subsection (a) for the regulated area, 

9 shall be paid by pool plants, partially regulated 

10 plants, and all other covered processors receiving 

11 milk from eligible producers located in a regulated 

12 area. 

13 ‘‘(3) LEGAL OBLIGATION TO PAY PRICE.—The 

14 legal obligation to pay the over-order price shall be 

15 determined solely by the terms and purpose of the 

16 regulation establishing the price, without regard to 

17 the location of the transfer of title, possession, or 

18 any other factors not related to the purposes of the 

19 regulation and this chapter. 

20 ‘‘(4) PRODUCER-HANDLERS.—A producer-han21 dler (as defined in the applicable Federal milk mar22 keting order) that sells not more 150,000 pounds of 

23 milk per month shall not be subject to an over-order 

24 price under this subsection or the payment of the re25 sulting over-order premium. 
17 

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1 ‘‘(d) EQUALIZATION POOLS.— 

2 ‘‘(1) OVER-ORDER PRICES.—In the case of reg3 ulations establishing an over-order price, the Board 

4 may establish 1 or more equalization pools within 

5 the regulated area for the sole purpose of equalizing 

6 returns to eligible producers throughout the regu7 lated area. 

8 ‘‘(2) POOLING AND EQUALIZATION OF OVER9 ORDER PRICES.—For purposes of the pooling and 

10 equalization of an over-order price— 

11 ‘‘(A) the value of milk used in other use 

12 classifications shall be calculated at the appro13 priate class price established pursuant to the 

14 applicable Federal milk marketing order; and 

15 ‘‘(B) the value of milk not covered by a 

16 Federal milk marketing order shall be cal17 culated in relation to the nearest prevailing 

18 class price in accordance with and subject to 

19 such adjustments as the Board may prescribe 

20 by regulation. 

21 ‘‘(e) FACTORS.—In determining the amount of an 

22 over-order price to be established under this section, the 

23 Board shall consider— 
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1 ‘‘(1) the balance between production and con2 sumption of milk and milk products in the regulated 

3 area; 

4 ‘‘(2) the costs of milk production in the regu5 lated area, including— 

6 ‘‘(A) the price of feed, including the cost of 

7 hay, silage, pasture, and other forage; 

8 ‘‘(B) the cost of labor, including the rea9 sonable value of the eligible producer’s own 

10 labor and management; 

11 ‘‘(C) machinery expenses; 

12 ‘‘(D) interest expenses; and 

13 ‘‘(E) other cash expenses, including the 

14 cost of hauling, veterinary services and medi15 cine, bedding and litter, marketing, custom 

16 services and supplies, fuel, lubrication, elec17 tricity, machinery and building repairs, labor, 

18 association fees, and assessments; 

19 ‘‘(3) the prevailing price for milk outside the 

20 regulated area; 

21 ‘‘(4) the purchasing power of the public; and 

22 ‘‘(5) the price necessary to yield a reasonable 

23 return to the eligible producer. 

24 ‘‘(f) PRODUCER SETTLEMENT FUNDS.—The regula25 tions shall require that the account of any person regu-
19 

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1 lated under the over-order price shall be adjusted for any 

2 payments made to or received by the person with respect 

3 to a producer settlement fund of any Federal milk mar4 keting order within the regulated area. 

5 ‘‘SEC. 1516. PAYMENTS FROM COVERED PROCESSORS. 

6 ‘‘(a) PAYMENTS REQUIRED.—Subject to subsection 

7 (b), each covered processor that purchases Class I milk 

8 during a month that will be sold in the regulated area 

9 of a Region shall pay to the Secretary an amount equal 

10 to the product obtained by multiplying— 

11 ‘‘(1) the over-order premium in effect for the 

12 regulated area for the month; by 

13 ‘‘(2) the quantity of Class I milk so purchased 

14 from eligible producers during the month. 

15 ‘‘(b) REDUCTION FOR ANY APPLICABLE EQUALI16 ZATION PAYMENTS.—The product obtained under sub17 section (a) for a covered processor for a month shall be 

18 reduced by any applicable equalization payments made for 

19 the same month by the covered processor pursuant to reg20 ulations issued under section 1517(a). 

21 ‘‘(c) DEPOSIT OF PAYMENTS IN FUND.—The Sec22 retary shall deposit amounts received under this section 

23 in the Fund. 

24 ‘‘SEC. 1517. OPTIONAL PROVISIONS FOR PRICING ORDERS. 

25 ‘‘(a) EQUALIZATION PAYMENTS.— 
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1 ‘‘(1) IN GENERAL.—In issuing regulations es2 tablishing an over-order price, the Board for a Re3 gion may include a provision to require persons that 

4 bring Class I milk into the regulated area of the Re5 gion to make equalization payments with respect to 

6 all such milk to the extent necessary to equalize the 

7 cost of milk purchased by covered processors subject 

8 to the over-order price. 

9 ‘‘(2) DISCRIMINATION.—The regulations shall 

10 not discriminate against milk producers outside the 

11 regulated area. 

12 ‘‘(3) AMOUNT.—The regulations for equali13 zation payments may require payment of the dif14 ference between— 

15 ‘‘(A) the applicable over-order price; and 

16 ‘‘(B) the Class I price required to be paid 

17 for the milk in the State of production by a 

18 Federal milk marketing order. 

19 ‘‘(b) PARTIALLY REGULATED PLANTS.—The regula20 tions issued by the Board for a Region may provide special 

21 provisions governing the pricing and pooling of milk han22 dled by partially regulated plants. 

23 ‘‘(c) OTHER PROVISIONS.—The regulations issued by 

24 the Board for a Region may contain such other provisions 
21 

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1 and requirements as the Board determines are necessary 

2 or appropriate— 

3 ‘‘(1) to effectuate the purposes of this chapter; 

4 and 

5 ‘‘(2) to provide for the payment of fair and eq6 uitable minimum prices for milk sold by eligible pro7 ducers. 

8 ‘‘SEC. 1518. NATIONAL DAIRY PRODUCERS FUND. 

9 ‘‘(a) ESTABLISHMENT.—There is established in the 

10 Treasury of the United States a revolving fund to be 

11 known as the ‘National Dairy Producers Fund’. The fund 

12 shall consist of the following: 

13 ‘‘(1) Payments by covered processors required 

14 to be deposited in the Fund under section 1516(c). 

15 ‘‘(2) The interest on, and the proceeds from the 

16 sale or redemption of, any obligations held in the 

17 Fund under subsection (d). 

18 ‘‘(3) To the extent that amounts referred to in 

19 the preceding paragraphs are insufficient to carry 

20 out this chapter, funds of the Commodity Credit 

21 Corporation, which shall be transferred by the Sec22 retary to the Fund to make up the short-fall. 

23 ‘‘(b) EXPENDITURES FROM FUND.—On request by 

24 the Secretary, the Secretary of the Treasury shall transfer 
22 

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1 from the Fund to the Secretary such amounts as the Sec2 retary determines are necessary to carry out this chapter. 

3 ‘‘(c) INVESTMENT OF AMOUNTS.— 

4 ‘‘(1) IN GENERAL.—The Secretary of the 

5 Treasury shall invest such portion of the Fund as is 

6 not, in the judgment of the Secretary, required to 

7 meet current operating requirements. 

8 ‘‘(2) INVESTMENTS.—Investments may be made 

9 only in interest-bearing obligations of the United 

10 States. 

11 ‘‘(3) ACQUISITION OF OBLIGATIONS.—For the 

12 purpose of investments under paragraph (1), obliga13 tions may be acquired— 

14 ‘‘(A) on original issue at the issue price; or 

15 ‘‘(B) by purchase of outstanding obliga16 tions at the market price. 

17 ‘‘(4) SALE OF OBLIGATIONS.—Any obligation 

18 acquired by the Fund may be sold by the Secretary 

19 of the Treasury at the market price. 

20 ‘‘SEC. 1519. COMPENSATION FOR ADMINISTRATIVE AND IN21 CREASED FOOD ASSISTANCE COSTS. 

22 ‘‘(a) ADMINISTRATIVE COSTS.— 

23 ‘‘(1) BOARD ASSESSMENT FOR ADMINISTRATIVE

24 COSTS.—The Board for a Region may impose and 

25 collect an assessment on covered processors oper-
23 

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1 ating in the regulated area of the Region to cover 

2 administrative costs incurred by the Board to carry 

3 out its duties under this chapter. The assessment 

4 amount may not exceed $0.03 per hundredweight. 

5 ‘‘(2) USE OF FUND.—The Secretary shall use 

6 amounts in the Fund to cover— 

7 ‘‘(A) administrative costs incurred by the 

8 Secretary to carry out this chapter; and 

9 ‘‘(B) any administrative costs incurred by 

10 the Boards not covered by the assessments im11 posed under paragraph (1). 

12 ‘‘(b) INCREASED FEDERAL FOOD ASSISTANCE

13 COSTS.—The Secretary shall use amounts in the Fund to 

14 cover the increased cost of any milk and milk products 

15 that results from carrying out this chapter— 

16 ‘‘(1) child nutrition programs (as defined in 

17 section 25(b) of the Richard B. Russell National 

18 School Lunch Act (42 U.S.C. 1769f(b)); and 

19 ‘‘(2) nutrition services provided through 

20 projects carried out under part C of title IV of the 

21 Older Americans Act of 1965 (42 U.S.C. 3030e et 

22 seq.). 

23 ‘‘(c) INCREASED STATE FOOD ASSISTANCE COSTS.— 

24 The Secretary shall use amounts in the Fund to make 

25 payments to each participating State for the increased 
24 

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1 costs incurred by the participating State of any milk or 

2 milk products provided under the special supplemental nu3 trition program for women, infants, and children estab4 lished by section 17 of the Child Nutrition Act of 1966 

5 (42 U.S.C. 1786) that results from carrying out this chap6 ter. 

7 ‘‘(d) COMPENSATION OF COMMODITY CREDIT COR8 PORATION FOR INCREASED MILK PURCHASES.—At the 

9 end of each month for which an over-order price is in ef10 fect for a Region, the Board of the Region shall com11 pensate the Commodity Credit Corporation for the cost 

12 of any purchases of milk and milk products by the Cor13 poration in the regulated area of the Region for that 

14 month resulting from a rate of increase in milk production 

15 for the month in the regulated area in excess of the na16 tional average rate of the increase in milk production over 

17 the 3-year period ending at the end of the preceding 

18 month, as determined by the Secretary. 

19 ‘‘SEC. 1520. USE OF FUND TO ASSIST ELIGIBLE PRODUCERS. 

20 ‘‘(a) PROVISION OF FUNDS TO BOARDS.—The Sec21 retary shall use amounts in the Fund to make monthly 

22 payments to the Boards. 

23 ‘‘(b) AMOUNT.—The amount of a payment made to 

24 a Board for a Region for the most recent month for which 

25 data are available shall be the greater of— 
25 

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1 ‘‘(1) the amount of payments made by covered 

2 processors to the Fund under section 1516 for pur3 chases of Class I milk that will be sold in the regu4 lated area of the Region during the month; or 

5 ‘‘(2) the amount obtained by multiplying— 

6 ‘‘(A) a payment quantity equal to the total 

7 quantity of all milk produced in the regulated 

8 area of the Region during the month; 

9 ‘‘(B) a payment rate equal to the over10 order premium in effect for the regulated area 

11 for the month; and 

12 ‘‘(C) 50 percent. 

13 ‘‘(c) PAYMENTS TO PRODUCERS.—The Board for a 

14 Region shall use amounts received under this section to 

15 make payments to eligible producers for all classes of milk 

16 that is produced in the regulated area of the Region. 

17 ‘‘SEC. 1521. PRODUCER REFERENDUM. 

18 ‘‘(a) REFERENDUM REQUIRED.—For the purpose of 

19 ascertaining whether the issuance, amendment, or termi20 nation of regulations establishing an over-order price is 

21 approved by eligible producers in the regulated area of a 

22 Region, the Board for the Region shall conduct a ref23 erendum among such eligible producers. 

24 ‘‘(b) TIMING.—The referendum shall be held in a 

25 timely manner, as determined by regulation of the Board. 
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1 ‘‘(c) BALLOT CONTENT.— 

2 ‘‘(1) IN GENERAL.—The terms and conditions 

3 of the proposed order or amendment shall be de4 scribed by the Board in the ballot used in the ref5 erendum. 

6 ‘‘(2) ACTIONS.—The nature, content, or extent 

7 of the description shall not be used a basis for at8 tacking the legality of the order or any action relat9 ing to the order. 

10 ‘‘(d) APPROVAL.—An order or amendment shall be 

11 considered approved by eligible producers if the Board de12 termines that the order or amendment is approved by a 

13 majority of the voting eligible producers who, during a 

14 representative period determined by the Board, have been 

15 engaged in the production of milk the price of which would 

16 be regulated under the proposed order or amendment. 

17 ‘‘(e) COOPERATIVES.— 

18 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

19 through (6), for the purpose of a referendum, the 

20 Board shall consider the approval or disapproval by 

21 any cooperative association of eligible producers 

22 qualified under the Act entitled ‘An Act to authorize 

23 association of producers of agricultural products’ 

24 (commonly known as the ‘Capper-Volstead Act’) (7 

25 U.S.C. 291 et seq.) and engaged in marketing milk, 
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1 or in rendering services for or advancing the inter2 ests of eligible producers, as the approval or dis3 approval of the eligible producers who are members 

4 or stockholders in, or under contract with, the coop5 erative association of eligible producers. 

6 ‘‘(2) COMMON MARKETING AGENCY.—No coop7 erative that has been formed to act as a common 

8 marketing agency for both the cooperative and indi9 vidual eligible producers shall be qualified to block 

10 vote for the cooperative or individual eligible pro11 ducers. 

12 ‘‘(3) NOTIFICATION BY COOPERATIVE.— 

13 ‘‘(A) IN GENERAL.—Any cooperative that 

14 is qualified to block vote shall, before submit15 ting the approval or disapproval of the coopera16 tive in any referendum, give prior written notice 

17 to each of the members of the cooperative as to 

18 whether and how the cooperative intends to cast 

19 the vote of the cooperative. 

20 ‘‘(B) ADMINISTRATION.—The notice shall 

21 be given in a timely manner as established, and 

22 in the form prescribed, by the Board. 

23 ‘‘(4) PRODUCER BALLOTS.— 

24 ‘‘(A) IN GENERAL.—Any eligible producer 

25 may obtain a ballot from the Board in order to 
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1 register approval or disapproval of the proposed 

2 order. 

3 ‘‘(B) BALLOTS.—If a cooperative provides 

4 notice to an eligible producer of the intent of 

5 the cooperative to approve or not approve a pro6 posed order and the eligible producer casts a 

7 ballot that is contrary to the intent of the coop8 erative— 

9 ‘‘(i) the eligible producer shall notify 

10 the Board as to the name of the coopera11 tive of which the eligible producer is a 

12 member; and 

13 ‘‘(ii) the Board shall— 

14 ‘‘(I) remove the name of the eli15 gible producer from the list certified 

16 by the cooperative of corporate vote of 

17 the cooperative; and 

18 ‘‘(II) provide the eligible pro19 ducer with an independent ballot that 

20 may be cast in the referendum. 

21 ‘‘(5) NOTIFICATION BY BOARD.—In order to 

22 ensure that all eligible producers are informed re23 garding the proposed order, the Board shall notify 

24 all eligible producers that— 

25 ‘‘(A) an order is being considered; and 
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1 ‘‘(B) each eligible producer may register 

2 the approval or disapproval of the eligible pro3 ducer with the Board directly or through the 

4 cooperative of the eligible producer. 

5 ‘‘SEC. 1522. ENFORCEMENT WITH RESPECT TO COVERED 

6 PROCESSORS. 

7 ‘‘In the case of covered processors, the Board may 

8 enforce this chapter (including regulations establishing an 

9 over-order price and other regulations issued under this 

10 chapter) by— 

11 ‘‘(1) commencing an action for legal or equi12 table relief brought in the name of the Board in 

13 Federal or State court of competent jurisdiction; 

14 ‘‘(2) referral to the State agency for enforce15 ment by judicial or administrative remedy with the 

16 agreement of the appropriate State agency of a par17 ticipating State; or 

18 ‘‘(3) bringing an action for an injunction to en19 force this chapter, without being compelled to allege 

20 or prove that an adequate remedy of law does not 

21 exist.’’. 

22 SEC. 3. NATIONAL DAIRY MARKET LOSS PAYMENTS. 

23 Section 1502 of the Farm Security and Rural Invest24 ment Act of 2002 (7 U.S.C. 7982) is amended by striking 
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1 ‘‘2005’’ each place it appears in subsections (f) and (g)(1) 

2 and inserting ‘‘2007’’. 

Æ