I 

108TH CONGRESS 

2D SESSION H. R. 4597

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

and support the income of dairy producers. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 16, 2004

Mr. REYNOLDS (for himself, Mr. MCHUGH, Mr. SANDERS, Mr. ETHERIDGE, 

Mr. OBEY, Mr. SIMMONS, Mr. BOEHLERT, Mr. MCGOVERN, Mrs. JOHNSON of Connecticut, Mr. QUINN, Mr. HOUGHTON, Mr. WALSH, Mr. 

TURNER of Texas, Ms. SLAUGHTER, Mr. OLVER, Mr. HINCHEY, Mr. 

SWEENEY, Mr. MCNULTY, Mr. LATOURETTE, Mrs. KELLY, and Mr. 

LANGEVIN) introduced the following bill; which was referred to the Committee on Agriculture 

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’’. 
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1 SEC. 2. REGIONAL DAIRY MARKETING AREAS. 

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

3 Investment Act of 2002 (7 U.S.C. 7981 et seq.) is amend4 ed—

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

6 7981) the following: 

7 ‘‘CHAPTER 1—GENERAL PROVISIONS’’; 

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

9 ‘‘CHAPTER 2—REGIONAL DAIRY 

10 MARKETING AREAS 

11 ‘‘SEC. 1511. DEFINITIONS. 

12 ‘‘In this chapter: 

13 ‘‘(1) BOARD.—The term ‘Board’ means the Re14 gional Dairy Board established for a Region under 

15 section 1514. 

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

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

18 milk’ mean milk (including components of milk) 

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

20 under a Federal milk marketing order. 

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

22 processor’ means a person or entity operating—

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

24 area of a Region; or 
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1 ‘‘(B) a milk plant that, while not located 

2 in the regulated area of a Region, distributes 

3 Class I milk products in a regulated area. 

4 ‘‘(4) ELIGIBLE PRODUCER.—(A) The term ‘eli5 gible producer’ means an individual or entity that 

6 the Secretary determines directly or indirectly—

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

8 and 

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

10 labor, management, equipment, or capital) to 

11 the dairy farming operation of the individual or 

12 entity that are at least commensurate with the 

13 share of the individual or entity of the proceeds 

14 of the operation. 

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

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

17 to receive national dairy market loss payments pur18 suant to a contract entered into under section 1502. 

19 ‘‘(5) FUND.—The term ‘Fund’ means the Na20 tional Dairy Producers Fund established under sec21 tion 1518. 

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

23 term ‘Federal milk marketing order’ means a Fed24 eral milk marketing order issued under section 8c of 

25 the Agricultural Adjustment Act (7 U.S.C. 608c), 
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1 reenacted with amendments by the Agricultural 

2 Marketing Agreement Act of 1937. 

3 ‘‘(7) OVER-ORDER PREMIUM.—The term ‘over4 order premium’ means the difference between—

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

6 the Board for the regulated area of a Region; 

7 and 

8 ‘‘(B) the Class I milk price per hundred9 weight in Boston under the applicable Federal 

10 milk marketing order. 

11 ‘‘(8) OVER-ORDER PRICE.—The term ‘over12 order price’ means the minimum price for Class I 

13 milk in the regulated area of a Region, as estab14 lished by the Board by regulation under section 

15 1515. 

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

17 term ‘partially regulated plant’ means—

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

19 the regulated area of a Region, distributes 

20 Class I milk products in a regulated area; or 

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

22 regulated area of a Region, distributes Class I 

23 milk products in the regulated area of a dif24 ferent Region. 
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1 ‘‘(B) The term does not include a milk plant 

2 described in subparagraph (A) that distributes less 

3 than a minimum quantity of Class I milk in the reg4 ulated area in which such distribution occurs, or de5 rives less than a minimum quantity of receipts from 

6 such distribution. The Board for the regulated area 

7 in which such distribution occurs shall establish the 

8 minimum quantity of milk or receipts for purposes 

9 of this exclusion. 

10 ‘‘(10) PARTICIPATING STATE.—The term ‘par11 ticipating State’ means a State that is designated as 

12 a participating State in a Region under section 

13 1512. 

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

15 means a milk plant located in the regulated area of 

16 a Region. 

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

18 Regional Dairy Marketing Area established under 

19 section 1513. 

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

21 area’ means that portion of a Region consisting of 

22 participating States. 

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

24 means the Secretary of Agriculture. 
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1 ‘‘SEC. 1512. PARTICIPATING STATES. 

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

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

4 participating States: 

5 ‘‘(1) Each State in the Northeast, Southern, 

6 and Midwest Regions specified in section 1513. 

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

8 in section 1513, if that State elects to become a par9 ticipating State by providing to the Secretary writ10 ten notice through the Governor of the State in ac11 cordance with State law. 

12 ‘‘(b) TERMINATION OF PARTICIPATION.—

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

14 the designation of a State as a participating State 

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

16 concurrence of the legislature of the State) shall 

17 submit written notice to the Secretary and the appli18 cable Board of the termination. 

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

20 ‘‘(A) INITIAL TERMINATION AUTHORITY.—

21 If a State submits the written notice required 

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

23 period beginning on the date of enactment of 

24 this chapter, the termination of the designation 

25 of the State as a participating State shall take 
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1 effect 30 days after the date on which the no2 tice was submitted. 

3 ‘‘(B) SUBSEQUENT TERMINATION AUTHOR4 ITY.—If a State submits the written notice re5 quired by paragraph (1) after the end of the pe6 riod specified in subparagraph (A), the termi7 nation of the designation of the State as a par8 ticipating State shall take effect 1 year after 

9 the date on which notice was submitted. 

10 ‘‘(3) RESUMPTION OF PARTICIPATION.—A 

11 State that terminates its designation as a partici12 pating State may restore, in the manner provided by 

13 State law, the designation of the State as a partici14 pating State. The Governor of the State shall pro15 vide written notice to the Secretary and the applica16 ble Board of the decision to restore such designa17 tion, which shall take effect on the first day of the 

18 first month beginning after the Secretary receives 

19 the written notice. 

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

21 PAYMENTS.—

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

23 each eligible producer operating in a participating 

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

25 under section 1502 to receive national dairy market 
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1 loss payments, the Secretary shall give the producer 

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

3 the contract and to instead receive payments under 

4 this chapter. The 60-day period for eligible pro5 ducers in a State shall commence on the date on 

6 which the State is first designated as a participating 

7 State under subsection (a). 

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

9 an eligible producer elects to terminate a contract 

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

11 the termination shall take effect on the date on 

12 which payments are first made to eligible producers 

13 under section 1521 in the participating State in 

14 which the producer operates. 

15 ‘‘(3) PROTECTION DURING INITIAL STATE TER16 MINATION PERIOD.— If a State exercises the initial 

17 termination authority provided under subsection (b), 

18 any election made by an eligible producer in that 

19 State under paragraph (1) to terminate a contract 

20 under section 1502 shall not take effect. 

21 ‘‘(4) EFFECT OF ELECTION TO CONTINUE CON22 TRACT.—An eligible producer that does not elect to 

23 terminate a contract under section 1502, as author24 ized by paragraph (1), shall cease to be an eligible 

25 producer for the purpose of this chapter at the end 
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1 of the period specified in such paragraph. The con2 tract of such a producer shall terminate on Sep3 tember 30, 2005, notwithstanding any amendment 

4 to section 1502 to extend the duration of such con5 tracts. After that date, the producer shall be ineli6 gible for national dairy market loss payments under 

7 section 1502 and ineligible for payments under this 

8 chapter. 

9 ‘‘(5) EFFECT OF SUBSEQUENT STATE TERMI10 NATION OR RESTORATION OF PARTICIPATION.—An 

11 eligible producer operating in a State that termi12 nates its designation as a participating State under 

13 subsection (b)(2)(B) shall be eligible to enter into a 

14 contract under section 1502 to receive national dairy 

15 market loss payments, but only if—

16 ‘‘(A) the producer is not ineligible to re17 ceive such payments under paragraph (4); and 

18 ‘‘(B) the producer agrees to terminate the 

19 contract under section 1502 if the State in 

20 which the producer operates restores its des21 ignation as a participating State under sub22 section (b)(3). 
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1 ‘‘SEC. 1513. DAIRY MARKETING AREAS. 

2 ‘‘There are established 5 Regional Dairy Marketing 

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

4 the States are designated as participating States: 

5 ‘‘(1) NORTHEAST REGION.—A Northeast Dairy 

6 Marketing Area composed of the States of Con7 necticut, Delaware, Maine, Maryland, Massachu8 setts, New Hampshire, New Jersey, New York, 

9 Pennsylvania, Rhode Island, and Vermont. 

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

11 Marketing Area composed of the States of Alabama, 

12 Arkansas, Florida, Georgia, Kentucky, Louisiana, 

13 Mississippi, Missouri, North Carolina, Oklahoma, 

14 South Carolina, Texas, Tennessee, Virginia, and 

15 West Virginia. 

16 ‘‘(3) MIDWEST REGION.—A Midwest Dairy 

17 Marketing Area composed of the States of Illinois, 

18 Indiana, Iowa, Kansas, Michigan, Minnesota, Ne19 braska, North Dakota, Ohio, South Dakota, and 

20 Wisconsin. 

21 ‘‘(4) INTERMOUNTAIN REGION.—An Inter22 mountain Dairy Marketing Area composed of the 

23 States of Arizona, Colorado, Idaho, Montana, Ne24 vada, New Mexico, Utah, and Wyoming. 
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1 ‘‘(5) PACIFIC REGION.—A Pacific Dairy Mar2 keting Area composed of the States of Alaska, Cali3 fornia, Hawaii, Oregon, and Washington. 

4 ‘‘SEC. 1514. REGIONAL DAIRY BOARDS. 

5 ‘‘(a) IN GENERAL.—Each Region shall be adminis6 tered by a Regional Dairy Board. 

7 ‘‘(b) COMPOSITION.—

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

9 for a Region shall be composed of 3 members from 

10 each participating State in the Region, appointed by 

11 the Secretary from nominations submitted as pro12 vided in paragraph (2). 

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

14 the Board from a participating State shall be se15 lected from at least 9 individuals nominated by the 

16 Governor of the State, except that, if the commis17 sioner of the department of agriculture of the State 

18 is an elected position, the nominations for the State 

19 shall be made by the commissioner. The nominations 

20 shall be made in consultation with eligible producers 

21 and the dairy industry in the participating State. 

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

23 the Board nominated and appointed to represent a 

24 participating State—
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1 ‘‘(A) at least 1 member shall be an eligible 

2 producer in the State at the time of nomination 

3 and appointment; and 

4 ‘‘(B) at least 1 member shall be a con5 sumer representative. 

6 ‘‘(c) TERMS.—

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), each member of the Board shall serve for 

9 a term of 3 years. 

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

11 first appointed to the Board from a participating 

12 States, the Secretary shall appoint—

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

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

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

16 ‘‘(d) VOTING.—The members of the Board rep17 resenting a participating State shall be entitled to cast 

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

19 vote taken by members of the Board. 

20 ‘‘(e) POWERS.—In carrying out this chapter in a Re21 gion, the Board for the Region is authorized—

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

23 or research projects designed to review, the laws of 

24 participating States in the Region—
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1 ‘‘(A) to measure the impact of the laws 

2 on—

3 ‘‘(i) the production and marketing of 

4 milk; and 

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

6 products in the Region; and 

7 ‘‘(B) to review the administration and 

8 costs of the laws. 

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

10 States of the Region joint or cooperative programs 

11 for the administration of dairy marketing laws and 

12 to prepare estimates of cost savings and benefits of 

13 such programs; 

14 ‘‘(3) to encourage harmonious relationships be15 tween the various elements of the dairy industry in 

16 the Region for the solution of material problems, in17 cluding conducting symposia or conferences designed 

18 to improve dairy-industry relations; or resolve prob19 lems of the dairy industry; 

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

21 Region periodic reports on activities and programs 

22 of the Board; 

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

24 system for milk and milk products in the regulated 

25 area of the Region and to recommend changes in the 
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1 system used for the production and distribution of 

2 milk to assist, improve, or promote more efficient 

3 production and distribution of milk; 

4 ‘‘(6) to investigate costs and charges in the reg5 ulated area of the Region for producing, hauling, 

6 handling, processing, distributing, selling, and con7 ducting all other services performed with respect to 

8 milk; 

9 ‘‘(7) to examine—

10 ‘‘(A) economic forces affecting eligible pro11 ducers in the Region; 

12 ‘‘(B) probable trends in production and 

13 consumption of milk and milk products in the 

14 Region; 

15 ‘‘(C) the level of dairy farm prices in rela16 tion to costs in the Region; 

17 ‘‘(D) the financial condition of eligible pro18 ducers in the Region; and 

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

20 relieve critical conditions on dairy farms in the 

21 regulated area; 

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

23 to manage any overproduction of milk in the regu24 lated area of the Region, including the authority to 

25 develop and implement an incentive-based supply 
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1 management program in addition to other actions to 

2 manage such overproduction; and 

3 ‘‘(9) to issue such orders, promulgate such reg4 ulations, and take such other actions as are nec5 essary to carry out this chapter in the regulated 

6 area of the Region. 

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

8 Region shall, to the maximum extent practicable, enter 

9 into agreements with Federal or State agencies for the ex10 change of information or services for the purpose of reduc11 ing regulatory burden and cost of administering this chap12 ter. The Board may reimburse other agencies for the rea13 sonable cost of providing the services. 

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

15 Board, the administrator of a Federal milk marketing 

16 order shall provide technical assistance to the Board. The 

17 Board shall reimburse the administrator for the reason18 able cost of providing the technical assistance. 

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

20 SALE OF CLASS I MILK. 

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

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

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

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

25 that—
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1 ‘‘(1) is higher than the price for Class I milk 

2 established under Federal milk marketing orders op3 erating in the regulated area; and 

4 ‘‘(2) is higher than the price for fluid milk oth5 erwise applicable in any portion of the regulated 

6 area not covered by a Federal milk marketing order. 

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

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

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

10 price established under subsection (a) may not exceed 

11 $17.50 per hundredweight. For each subsequent calendar 

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

13 preceding year shall be adjusted by the Secretary to reflect 

14 changes for the 12-month period ending the preceding No15 vember 30 in the Consumer Price Index for All Urban 

16 Consumers published by the Bureau of Labor Statistics 

17 of the Department of Labor. 

18 ‘‘(c) APPLICATION OF OVER-ORDER PRICE AND PRE19 MIUM.—

20 ‘‘(1) UNIFORM PRICES.—In the regulations es21 tablishing an over-order price, the Board shall pro22 vide for—

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

24 eligible producers and associations of eligible 

25 producers delivering milk to all covered proc-
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1 essors for all milk so delivered, irrespective of 

2 the uses made of the milk by an individual cov3 ered processor; or 

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

5 eligible producers and associations of eligible 

6 producers delivering milk to the same covered 

7 processor for all milk delivered by the eligible 

8 producers and associations to that covered proc9 essor. 

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

11 provided in section 1516, the over-order premium 

12 applicable to the regulated area of a Region, deter13 mined on the basis of the over-order price estab14 lished under subsection (a) for the regulated area, 

15 shall be paid by pool plants, partially regulated 

16 plants, and all other covered processors receiving 

17 milk from eligible producers located in a regulated 

18 area. 

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

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

21 determined solely by the terms and purpose of the 

22 regulation establishing the price, without regard to 

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

24 any other factors not related to the purposes of the 

25 regulation and this chapter. 
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1 ‘‘(4) PRODUCER-HANDLERS.—A producer-han2 dler (as defined in the applicable Federal milk mar3 keting order) that sells not more 150,000 pounds of 

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

5 price under this subsection or the payment of the re6 sulting over-order premium. 

7 ‘‘(d) EQUALIZATION POOLS.—

8 ‘‘(1) OVER-ORDER PRICES.—In the case of reg9 ulations establishing an over-order price, the Board 

10 may establish 1 or more equalization pools within 

11 the regulated area for the sole purpose of equalizing 

12 returns to eligible producers throughout the regu13 lated area. 

14 ‘‘(2) POOLING AND EQUALIZATION OF OVER15 ORDER PRICES.—For purposes of the pooling and 

16 equalization of an over-order price—

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

18 classifications shall be calculated at the appro19 priate class price established pursuant to the 

20 applicable Federal milk marketing order; and 

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

22 Federal milk marketing order shall be cal23 culated in relation to the nearest prevailing 

24 class price in accordance with and subject to 
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1 such adjustments as the Board may prescribe 

2 by regulation. 

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

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

5 Board shall consider—

6 ‘‘(1) the balance between production and con7 sumption of milk and milk products in the regulated 

8 area; 

9 ‘‘(2) the costs of milk production in the regu10 lated area, including—

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

12 hay, silage, pasture, and other forage; 

13 ‘‘(B) the cost of labor, including the rea14 sonable value of the eligible producer’s own 

15 labor and management; 

16 ‘‘(C) machinery expenses; 

17 ‘‘(D) interest expenses; and 

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

19 cost of hauling, veterinary services and medi20 cine, bedding and litter, marketing, custom 

21 services and supplies, fuel, lubrication, elec22 tricity, machinery and building repairs, labor, 

23 association fees, and assessments; 

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

25 regulated area; 
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1 ‘‘(4) the purchasing power of the public; and 

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

3 return to the eligible producer. 

4 ‘‘(f) PRODUCER SETTLEMENT FUNDS.—The regula5 tions shall require that the account of any person regu6 lated under the over-order price shall be adjusted for any 

7 payments made to or received by the person with respect 

8 to a producer settlement fund of any Federal milk mar9 keting order within the regulated area. 

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

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

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

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

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

15 to the product obtained by multiplying—

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

17 regulated area for the month; by 

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

19 from eligible producers during the month. 

20 ‘‘(b) REDUCTION FOR ANY APPLICABLE EQUALI21 ZATION PAYMENTS.—The product obtained under sub22 section (a) for a covered processor for a month shall be 

23 reduced by any applicable equalization payments made for 

24 the same month by the covered processor pursuant to reg25 ulations issued under section 1517(a). 
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1 ‘‘(c) DEPOSIT OF PAYMENTS IN FUND.—The Sec2 retary shall deposit amounts received under this section 

3 in the Fund. 

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

5 ‘‘(a) EQUALIZATION PAYMENTS.—

6 ‘‘(1) IN GENERAL.—In issuing regulations es7 tablishing an over-order price, the Board for a Re8 gion may include a provision to require persons that 

9 bring Class I milk into the regulated area of the Re10 gion to make equalization payments with respect to 

11 all such milk to the extent necessary to equalize the 

12 cost of milk purchased by covered processors subject 

13 to the over-order price. 

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

15 not discriminate against milk producers outside the 

16 regulated area. 

17 ‘‘(3) AMOUNT.—The regulations for equali18 zation payments may require payment of the dif19 ference between—

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

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

22 for the milk in the State of production by a 

23 Federal milk marketing order. 

24 ‘‘(b) PARTIALLY REGULATED PLANTS.—The regula25 tions issued by the Board for a Region may provide special 
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1 provisions governing the pricing and pooling of milk han2 dled by partially regulated plants. 

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

4 the Board for a Region may contain such other provisions 

5 and requirements as the Board determines are necessary 

6 or appropriate—

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

8 and 

9 ‘‘(2) to provide for the payment of fair and eq10 uitable minimum prices for milk sold by eligible pro11 ducers. 

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

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

14 Treasury of the United States a revolving fund to be 

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

16 shall consist of the following: 

17 ‘‘(1) Payments by covered processors required 

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

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

20 sale or redemption of, any obligations held in the 

21 Fund under subsection (d). 

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

23 the preceding paragraphs are insufficient to carry 

24 out this chapter, funds of the Commodity Credit 
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1 Corporation, which shall be transferred by the Sec2 retary to the Fund to make up the short-fall. 

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

4 the Secretary, the Secretary of the Treasury shall transfer 

5 from the Fund to the Secretary such amounts as the Sec6 retary determines are necessary to carry out this chapter. 

7 ‘‘(c) INVESTMENT OF AMOUNTS.—

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

9 Treasury shall invest such portion of the Fund as is 

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

11 meet current operating requirements. 

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

13 only in interest-bearing obligations of the United 

14 States. 

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

16 purpose of investments under paragraph (1), obliga17 tions may be acquired—

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

19 ‘‘(B) by purchase of outstanding obliga20 tions at the market price. 

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

22 acquired by the Fund may be sold by the Secretary 

23 of the Treasury at the market price. 
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1 ‘‘SEC. 1519. COMPENSATION FOR ADMINISTRATIVE AND IN2 CREASED FOOD ASSISTANCE COSTS. 

3 ‘‘(a) ADMINISTRATIVE COSTS.—

4 ‘‘(1) BOARD ASSESSMENT FOR ADMINISTRATIVE

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

6 collect an assessment on covered processors oper7 ating in the regulated area of the Region to cover 

8 administrative costs incurred by the Board to carry 

9 out its duties under this chapter. The assessment 

10 amount may not exceed $0.03 per hundredweight. 

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

12 amounts in the Fund to cover—

13 ‘‘(A) administrative costs incurred by the 

14 Secretary to carry out this chapter; and 

15 ‘‘(B) any administrative costs incurred by 

16 the Boards not covered by the assessments im17 posed under paragraph (1). 

18 ‘‘(b) INCREASED FEDERAL FOOD ASSISTANCE

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

20 cover the increased cost of any milk and milk products 

21 that results from carrying out this chapter—

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

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

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

25 ‘‘(2) nutrition services provided through 

26 projects carried out under part C of title IV of the 
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1 Older Americans Act of 1965 (42 U.S.C. 3030e et 

2 seq.). 

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

4 The Secretary shall use amounts in the Fund to make 

5 payments to each participating State for the increased 

6 costs incurred by the participating State of any milk or 

7 milk products provided under the special supplemental nu8 trition program for women, infants, and children estab9 lished by section 17 of the Child Nutrition Act of 1966 

10 (42 U.S.C. 1786) that results from carrying out this chap11 ter. 

12 ‘‘(d) COMPENSATION OF COMMODITY CREDIT COR13 PORATION FOR INCREASED MILK PURCHASES.—At the 

14 end of each month for which an over-order price is in ef15 fect for a Region, the Board of the Region shall com16 pensate the Commodity Credit Corporation for the cost 

17 of any purchases of milk and milk products by the Cor18 poration in the regulated area of the Region for that 

19 month resulting from a rate of increase in milk production 

20 for the month in the regulated area in excess of the na21 tional average rate of the increase in milk production over 

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

23 month, as determined by the Secretary. 
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1 ‘‘SEC. 1520. USE OF FUND TO ASSIST ELIGIBLE PRODUCERS. 

2 ‘‘(a) PROVISION OF FUNDS TO BOARDS.—The Sec3 retary shall use amounts in the Fund to make monthly 

4 payments to the Boards. 

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

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

7 data are available shall be the greater of—

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

9 processors to the Fund under section 1516 for pur10 chases of Class I milk that will be sold in the regu11 lated area of the Region during the month; or 

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

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

14 quantity of all milk produced in the regulated 

15 area of the Region during the month; 

16 ‘‘(B) a payment rate equal to the over17 order premium in effect for the regulated area 

18 for the month; and 

19 ‘‘(C) 50 percent. 

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

21 Region shall use amounts received under this section to 

22 make payments to eligible producers for all classes of milk 

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

24 ‘‘SEC. 1521. PRODUCER REFERENDUM. 

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

26 ascertaining whether the issuance, amendment, or termi-
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1 nation of regulations establishing an over-order price is 

2 approved by eligible producers in the regulated area of a 

3 Region, the Board for the Region shall conduct a ref4 erendum among such eligible producers. 

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

6 timely manner, as determined by regulation of the Board. 

7 ‘‘(c) BALLOT CONTENT.—

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

9 of the proposed order or amendment shall be de10 scribed by the Board in the ballot used in the ref11 erendum. 

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

13 of the description shall not be used a basis for at14 tacking the legality of the order or any action relat15 ing to the order. 

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

17 considered approved by eligible producers if the Board de18 termines that the order or amendment is approved by a 

19 majority of the voting eligible producers who, during a 

20 representative period determined by the Board, have been 

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

22 be regulated under the proposed order or amendment. 

23 ‘‘(e) COOPERATIVES.—

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

25 through (6), for the purpose of a referendum, the 
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1 Board shall consider the approval or disapproval by 

2 any cooperative association of eligible producers 

3 qualified under the Act entitled ‘An Act to authorize 

4 association of producers of agricultural products’ 

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

6 U.S.C. 291 et seq) and engaged in marketing milk, 

7 or in rendering services for or advancing the inter8 ests of eligible producers, as the approval or dis9 approval of the eligible producers who are members 

10 or stockholders in, or under contract with, the coop11 erative association of eligible producers. 

12 ‘‘(2) COMMON MARKETING AGENCY.—No coop13 erative that has been formed to act as a common 

14 marketing agency for both the cooperative and indi15 vidual eligible producers shall be qualified to block 

16 vote for the cooperative or individual eligible pro17 ducers. 

18 ‘‘(3) NOTIFICATION BY COOPERATIVE.—

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

20 is qualified to block vote shall, before submit21 ting the approval or disapproval of the coopera22 tive in any referendum, give prior written notice 

23 to each of the members of the cooperative as to 

24 whether and how the cooperative intends to cast 

25 the vote of the cooperative. 
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1 ‘‘(B) ADMINISTRATION.—The notice shall 

2 be given in a timely manner as established, and 

3 in the form prescribed, by the Board. 

4 ‘‘(4) PRODUCER BALLOTS.—

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

6 may obtain a ballot from the Board in order to 

7 register approval or disapproval of the proposed 

8 order. 

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

10 notice to an eligible producer of the intent of 

11 the cooperative to approve or not approve a pro12 posed order and the eligible producer casts a 

13 ballot that is contrary to the intent of the coop14 erative—

15 ‘‘(i) the eligible producer shall notify 

16 the Board as to the name of the coopera17 tive of which the eligible producer is a 

18 member; and 

19 ‘‘(ii) the Board shall—

20 ‘‘(I) remove the name of the eli21 gible producer from the list certified 

22 by the cooperative of corporate vote of 

23 the cooperative; and 
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1 ‘‘(II) provide the eligible pro2 ducer with an independent ballot that 

3 may be cast in the referendum. 

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

5 ensure that all eligible producers are informed re6 garding the proposed order, the Board shall notify 

7 all eligible producers that—

8 ‘‘(A) an order is being considered; and 

9 ‘‘(B) each eligible producer may register 

10 the approval or disapproval of the eligible pro11 ducer with the Board directly or through the 

12 cooperative of the eligible producer. 

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

14 PROCESSORS. 

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

16 enforce this chapter (including regulations establishing an 

17 over-order price and other regulations issued under this 

18 chapter) by—

19 ‘‘(1) commencing an action for legal or equi20 table relief brought in the name of the Board in 

21 Federal or State court of competent jurisdiction; 

22 ‘‘(2) referral to the State agency for enforce23 ment by judicial or administrative remedy with the 

24 agreement of the appropriate State agency of a par25 ticipating State; or 
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1 ‘‘(3) bringing an action for an injunction to en2 force this chapter, without being compelled to allege 

3 or prove that an adequate remedy of law does not 

4 exist.’’. 

5 SEC. 3. NATIONAL DAIRY MARKET LOSS PAYMENTS. 

6 Section 1502 of the Farm Security and Rural Invest7 ment Act of 2002 (7 U.S.C. 7982) is amended by striking 

8 ‘‘2005’’ each place it appears in subsections (f) and (g)(1) 

9 and inserting ‘‘2007’’.

Æ