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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2664 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2664

 To achieve needed savings in net Federal expenditures under the milk 
  price support program through establishment of a milk producer self-
help program to dispose of surplus dairy products, expand exports, and 
    stabilize the market for milk and dairy products, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 15, 1993

 Mr. Volkmer (for himself and Mr. Gunderson) introduced the following 
        bill; which was referred to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL

 
 To achieve needed savings in net Federal expenditures under the milk 
  price support program through establishment of a milk producer self-
help program to dispose of surplus dairy products, expand exports, and 
    stabilize the market for milk and dairy products, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Dairy Budget Reconciliation and 
Self-Help Initiative Act of 1993''.

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

    (a) Findings.--Congress finds that--
            (1) milk and dairy products are vital components of a 
        balanced diet and have high nutritive value, and the production 
        of milk and dairy products is an important segment of the 
        Nation's agricultural industry;
            (2) an effective Federal milk price support program is 
        needed to ensure consumers of a reliable and adequate supply of 
        pure and wholesome milk and dairy products at reasonable 
        prices, to respond adequately to current and anticipated future 
        supply and demand problems, and to ensure a level of farm 
        income adequate to maintain productive capacity sufficient to 
        meet anticipated future needs;
            (3) the effectiveness of the current Federal milk price 
        support program is being diminished and the economic stress on 
        milk producers increasing due to the growing demands made on 
        milk producers to provide funds for reduction of the Federal 
        budget deficit through direct levies and similar measures 
        included in budget reconciliation Acts;
            (4) milk producers are being asked to pay more and more in 
        budget reconciliation levies, while the economic pressures 
        being placed on the milk production industry continue to 
        squeeze them financially;
            (5) it is in the national interest and crucial to milk 
        producers that an alternative be found to the continued 
        expansion of budget reconciliation levies and the corresponding 
        diminution of the benefits of the Federal milk price support 
        program;
            (6) since most Government outlays under the Federal milk 
        price support program stem from Commodity Credit Corporation 
        removals of surplus dairy products from the market to reduce 
        the adverse effect of the surpluses on producer market prices 
        for milk, net Federal expenditures under that program can be 
        reduced, and thus needed budget savings achieved, by reducing 
        the level of removals of surplus dairy products by the 
        Corporation under the price support program;
            (7) an effective way to reduce the level of the Commodity 
        Credit Corporation's price support removals is through the 
        implementation of a producer-funded program (using deductions 
        from producer revenues) as a supplement to the existing milk 
        price support program to remove surplus dairy products from the 
        market before the Corporation has to take them, and develop 
        additional markets for domestically-produced dairy products;
            (8) implementation of such a producer-funded self-help 
        program is preferable to just increasing the level of budget 
        reconciliation levies, because, while effectively reducing net 
        Federal expenditures under the milk price support program, it 
        also stabilizes the market for milk producers and lessens the 
        economic effect of the budget deficit reduction effort on them;
            (9) implementation of the self-help program also is fairer 
        to milk producers because it will use the funds collected from 
        them under the budget reconciliation process to provide them 
        with tools that they, as an industry, need to effectively 
        develop new markets for their products;
            (10) if milk producers shoulder the financial burden of 
        removing surplus dairy products from the market and developing 
        new markets for domestic milk production under this self-help 
        program, it is appropriate, as well as most conducive to the 
        efficient implementation of the program, that the milk 
        production and marketing industry be directly involved in the 
        operation of the program under the oversight of the Secretary 
        of Agriculture;
            (11) the Federal milk price support program itself is the 
        responsibility of the Secretary of Agriculture under the 
        Agricultural Act of 1949, and the producer-funded efforts to 
        dispose of surplus dairy products and develop new markets for 
        dairy products under the self-help program established by this 
        Act should be overseen by the Secretary of Agriculture and be 
        coordinated with the milk price support program and other 
        Department of Agriculture programs; and
            (12) the future of milk price stabilization requires the 
        opening of new market opportunities that the efficient 
        production capacity of our Nation's milk producers can respond 
        to, and the self-help effort provided for in this Act should 
        include aggressive efforts to search out and find new market 
        opportunities in promising export markets.
    (b) Statement of Purposes and Policy.--
            (1) Purposes.--The purposes of this Act are to--
                    (A) achieve a reduction in net Federal expenditures 
                under the Federal milk price support program that 
                contributes substantially to the needed reductions in 
                net Federal outlays required under the Concurrent 
                Budget Resolution for fiscal years 1994 through 1998;
                    (B) achieve such reduction in net expenditures 
                through implementation of a self-help program funded by 
                milk producers that will remove surplus dairy products 
                by timely intervention in the market and through 
                expanded exports, and related changes in policies 
                governing the Federal milk program; and
                    (C) establish the Dairy Stabilization Board to 
                develop and implement annual plans for handling surplus 
                dairy products and to develop new markets for domestic 
                dairy products, under the oversight of the Secretary of 
                Agriculture.
            (2) Statements of policy.--
                    (A) In general.--It is declared to be the policy of 
                Congress that it is in the public interest, and 
                necessary to protect and strengthen the Nation's milk 
                production and marketing system, to reduce any adverse 
                affects of budget reconciliation actions on milk 
                producers, and to facilitate the continued effective 
                operations of the Federal milk price support program, 
                that the self-help program funded by milk producers 
                provided for in this Act be implemented.
                    (B) Protection of consumers.--It further is 
                declared to be the policy of Congress that the powers 
                provided in this Act shall not be used to reduce the 
                production of pure and wholesome milk and dairy 
                products below the level required for United States 
                consumers or to divert production from meeting the 
                needs of such consumers, and that, in carrying out this 
                Act, due regard shall be given to the maintenance of a 
                continuous and stable supply of milk and dairy products 
                adequate to meet the demands of United States consumers 
                at prices fair to both producers and consumers.

SEC. 3. BUDGET RECONCILIATION AND MARKET STABILIZATION DEDUCTIONS FROM 
              PRODUCER REVENUES; REFUNDS; COLLECTION.

    (a) In General.--Effective January 1, 1994, section 204 of the 
Agricultural Act of 1949 (7 U.S.C. 1446e) is amended by striking out 
subsection (h) and all that follows down through the end of subsection 
(j) and inserting in lieu thereof the following:
    ``(h) Deductions from Producer Revenues.--
            ``(1) Budget reconciliation saving deductions from producer 
        revenues.--
                    ``(A) In general.--During each of the calendar 
                years 1994 through 1998, the Secretary shall provide 
                for deductions from producer revenues, as provided in 
                paragraph (3), on all milk produced in the 48 
                contiguous States and marketed by producers for 
                commercial use, in addition to any reduction in price 
                required under subsection (g).
                    ``(B) Amount.--The amount of the deduction from 
                producer revenues under subparagraph (A) shall be 10 
                cents per hundredweight of milk marketed, which rate 
                shall be adjusted on or before May 1 of each of the 
                calendar years 1994 through 1998 by an amount per 
                hundredweight that is necessary to compensate for 
                refunds made under subsection (i) on the basis of 
                marketings in the previous calendar year.
                    ``(C) Refunds.--The Secretary shall provide for 
                refunds to producers of deductions made from producer 
                revenues under this paragraph, as provided in 
                subsection (i).
            ``(2) Market stabilization deductions from producer 
        revenues.--
                    ``(A) In general.--During any of the calendar years 
                1994 through 1998 in which a Dairy Stabilization Plan 
                is in effect that provides for the removal of dairy 
                products from the market, the Secretary shall provide 
                for deductions from producer revenues, as provided in 
                paragraph (3), on all milk produced in the 48 
                contiguous States and marketed by producers for 
                commercial use, in addition to any reduction in price 
                required under subsection (g) and the deductions from 
                producer revenues required under paragraph (1).
                    ``(B) Amount.--
                            ``(i) In general.--The amount of the 
                        deduction from producer revenues under 
                        subparagraph (A) during any calendar year shall 
                        be the amount per hundredweight of milk 
                        marketed--not to exceed 10 cents per 
                        hundredweight--that is established by the Dairy 
                        Stabilization Board for such year, as provided 
                        in section 204B(a)(2), and approved by the 
                        Secretary.
                            ``(ii) Revisions of amount.--The amount of 
                        the deduction established for a year under 
                        clause (i) may be adjusted by the Dairy 
                        Stabilization Board at the beginning of the 
                        second, third, or fourth quarter of the year, 
                        as provided in section 204B(c)(2) and if 
                        approved by the Secretary, to reflect changes 
                        in anticipated costs under the Dairy 
                        Stabilization Plan for such year.
                    ``(C) Refunds.--The Secretary shall provide for 
                refunds to producers of deductions made from producer 
                revenues under this paragraph, as provided in 
                subsection (i).
            ``(3) Deduction process.--The Secretary shall provide for 
        the deductions from producer revenues required under paragraphs 
        (1) and (2) as follows:
                    ``(A) with respect to milk marketed under a Federal 
                milk marketing order, the Secretary shall provide for a 
                monthly deduction, from the total pool revenues 
                available to producers from marketings of milk under 
                such marketing order during such month, of such sum 
                that is equivalent to a uniform reduction in the blend 
                price, per hundredweight, to producers for such milk at 
                the rate per hundredweight provided for in paragraph 
                (1) or (2), and the remittal of such deducted amounts 
                to the Commodity Credit Corporation;
                    ``(B) with respect to milk marketed under a State 
                milk pricing and pooling program, the Secretary shall 
                provide for a monthly deduction, from the total pool 
                revenues available to producers from marketing of milk 
                under the program during such month, of such sum that 
                is equivalent to a uniform reduction in the price, per 
                hundredweight, to producers for such milk at the rate 
                per hundredweight provided for in paragraph (1) or (2), 
                and the remittal of such deducted amounts to the 
                Commodity Credit Corporation. For purposes of this 
                subparagraph, at the option of the appropriate State 
                authority, in lieu of the required amounts being 
                withheld from producers by directly deducting such 
                amounts from the total pool revenues under the State 
                program, the required amounts may be withheld from 
                producers by the Secretary through a reduction of the 
                amount per hundredweight provided for in paragraph (1) 
                or (2) from the price received on all milk marketed for 
                commercial use by producers subject to the order; and
                    ``(C) with respect to all milk marketed for 
                commercial use, the Secretary shall provide for a 
                deduction of the amount, per hundredweight, provided 
                for in paragraph (1) or (2) from the price received by 
                producers on all milk marketed for commercial use 
                (including milk not eligible for fluid use and milk 
                marketed by producer-distributors), and the remittal of 
                such deducted amounts to the Commodity Credit 
                Corporation.
    ``(i) Refunds to Producers.--
            ``(1) In general.--The Secretary shall provide a refund 
        of--
                    ``(A) the reductions under subsection (g) in the 
                price received by a producer during a calendar year 
                (excluding any such reduction that is a targeted 
                reduction under subsection (g)(3)), except when a 
                refund is otherwise available to the producer under 
                subsection (g)(5); and
                    ``(B) the entire amount of the deductions from 
                producer revenues made under subsection (h) during such 
                calendar year that are applicable to the milk marketed 
                by the producer during the year,
        if the producer provides evidence that the producer did not 
        increase marketings in the calendar year over the amount 
        determined by multiplying marketings of such producer during 
        the preceding year by the market adjustment factor established 
        under paragraph (2) to reflect growth or shrinkage in the 
        market for milk during the refund year.
            ``(2) Market adjustment factor.--The market adjustment 
        factor used in paragraph (1) shall be established by the Dairy 
        Stabilization Board, in consultation with the Secretary, at a 
        percentage determined by dividing the amount of all milk 
        produced in the 48 contiguous States and marketed by producers 
        for commercial use in the year for which refunds are available 
        by the amount of such milk marketings in the year preceding 
        such year.
            ``(3) Funds for refunds.--Funds used to make refunds under 
        this subsection shall be made available from the Commodity 
        Credit Corporation general account, except that such funds as 
        are needed to cover refunds of market stabilization deductions 
        from producer revenues shall be transferred to the 
        Corporation's general account from the Dairy Stabilization 
        Fund.
            ``(4) Refund not deemed a government payment.--Any refund 
        under this subsection shall not be considered as any type of 
        price support or payment for purposes of section 1211 or 1212 
        of the Food Security Act of 1985 (16 U.S.C. 3811 and 3821).
    ``(j) Collection and Enforcement.--
            ``(1) Collection.--Reductions in price required under 
        subsection (g) and deductions from producer revenues required 
        under subsection (h) shall be collected and remitted to the 
        Commodity Credit Corporation in the manner prescribed by the 
        Secretary, except that--
                    ``(A) in any year in which a market stabilization 
                deduction from producer revenues is in effect under 
                subsection (h)(2), the Secretary shall combine such 
                deduction with the budget reconciliation savings 
                deduction in effect for that year under subsection 
                (h)(1), and provide for the collection of both 
                deductions together; and
                    ``(B) on receipt by the Commodity Credit 
                Corporation of amounts deducted from producer revenues 
                under subsection (h), the Commodity Credit Corporation 
                immediately shall place into the Dairy Stabilization 
                Fund that portion of the receipts that is due to the 
                Dairy Stabilization Board as provided in subsection 
                (k).
            ``(2) Penalties.--If any person fails to collect or remit 
        the reduction required by subsection (g) or deduction required 
        by subsection (h) or fails to comply with such requirements for 
        recordkeeping or otherwise as are required by the Secretary to 
        carry out such subsection, the person shall be liable to the 
        Secretary for a civil penalty up to an amount determined by 
        multiplying--
                    ``(A) the quantity of milk involved in the 
                violation; by
                    ``(B) the support rate for the applicable calendar 
                year for milk.
            ``(k) Dairy Stabilization Fund.--
            ``(1) In general.--There shall be established in the 
        Commodity Credit Corporation a special fund, to be known as the 
        `Dairy Stabilization Fund'. Monies in such Fund shall be 
        available solely for the use of the Dairy Stabilization Board 
        for expenditures provided for in this Act.
            ``(2) Money into the fund.--There shall be deposited into 
        the Fund--
                    ``(A) all monies collected from market 
                stabilization deductions from producer revenues made 
                under subsection (h)(2);
                    ``(B) of the monies collected from budget 
                reconciliation savings deductions from producer 
                revenues under subsection (h)(1) during any calendar 
                year--
                            ``(i) that portion of the collected 
                        deductions that is budgeted to cover the 
                        Board's administrative expenses under the Dairy 
                        Stabilization Plan for such year approved by 
                        the Secretary; and
                            ``(ii) that portion of the collected 
                        deductions that is in compensation for 
                        transfers to the Commodity Credit Corporation 
                        under section 204A(h)(2)(B) to cover refunds of 
                        market stabilization deductions under 
                        subsection (h)(2) made on the basis of 
                        marketings in the previous calendar year;
                    ``(C) monies collected from any excess purchases 
                reduction in price under subsection (g), the transfer 
                of which to the Fund is approved by the Commodity 
                Credit Corporation, under any agreement between the 
                Board and the Corporation for the Board to assist the 
                Corporation in removing from the market excess dairy 
                products, as provided for in section 204B(a)(1)(C);
                    ``(D) revenues received by the Board from sales of 
                dairy products it has removed from the market or from 
                any other source; and
                    ``(E) credits, each month, from the general account 
                of the Commodity Credit Corporation to represent 
                interest earned (at the then current rates of interest 
                being charged by the Commodity Credit Corporation) on 
                the average outstanding balance in the Fund during such 
                month.
            ``(3) Termination of fund.--The Dairy Stabilization Fund 
        shall terminate, and any monies remaining in the Fund 
        transferred to the general account of the Commodity Credit 
        Corporation, at such time as the Dairy Stabilization Board 
        winds up its affairs and all legal obligations of the Board, 
        including rebates to milk producers under section 204A(l), have 
        been met.
    ``(l) Use of the Commodity Credit Corporation.--The Secretary shall 
use the funds, facilities, and authorities of the Commodity Credit 
Corporation to carry out this section and sections 204A and 204B.''.
    ``(b) Conforming Changes.--
            ``(1) Redesignations.--Subsection (k) of section 204 of the 
        Agricultural Act of 1949 (7 U.S.C. 1446e) is redesignated as 
        subsection (m).
            ``(2) 1990 farm bill amendment.--Section 101(b) of the 
        Food, Agriculture, Conservation, and Trade Act of 1990 (7 
        U.S.C. 1446e note) is amended by inserting ``or deduction taken 
        from milk producer revenues'' immediately before the period at 
        the end thereof.

SEC. 4. DAIRY STABILIZATION INITIATIVE.

    The Agricultural Act of 1949 is amended by inserting after section 
204 (7 U.S.C. 1446e) the following new sections:

``SEC. 204A. DAIRY STABILIZATION BOARD.

    ``(a) Establishment.--Not later than September 1, 1993, the 
Secretary of Agriculture shall establish the Dairy Stabilization Board 
to develop and implement Dairy Stabilization Plans and perform other 
tasks of the Board provided for in this title, subject to the 
supervision and regulations of the Secretary.
    ``(b) Membership.--
            ``(1) In general.--The Dairy Stabilization Board shall 
        consist of 18 members appointed by the Secretary as provided in 
        this subsection. The Secretary may not appoint any person to 
        the Board unless the Secretary determines that the person meets 
        the qualification criteria set out in paragraph (5).
            ``(2) Composition of board.--
                    ``(A) Regional distribution.--The 18 seats on the 
                Board shall be evenly allocated among the 6 geographic 
                regions described in paragraph (3).
                    ``(B) Regional appointments.--The Secretary shall 
                appoint 3 members to the Board from each of the 6 
                geographic regions, as follows:
                            ``(i) 2 members shall be qualified milk 
                        producers whose farms are located in that 
                        region, each appointed by the Secretary from 
                        among nominees selected by the milk producers 
                        in such region, as provided in this subsection; 
                        and
                            ``(ii) 1 member shall be a qualified person 
                        employed in some capacity in the dairy industry 
                        other than as a producer, and selected by the 
                        Secretary in such manner as the Secretary 
                        determines appropriate. For any individual 
                        employed by a company or organization that 
                        conducts business in more than one such region, 
                        such individual will be deemed to be located in 
                        the region in which such individual's normal 
                        place of business is located.
            ``(3) 6 geographic regions.--For purposes of making 
        regional appointments of persons to the Board, as provided in 
        paragraph (2), the 48 contiguous States shall be grouped into 6 
        regions, as follows:
                    ``(A) Region I: Connecticut, Maine, Massachusetts, 
                New Hampshire, New Jersey, New York, Pennsylvania, 
                Rhode Island, and Vermont.
                    ``(B) Region II: Illinois, Indiana, Iowa, Kansas, 
                Michigan, Missouri, Nebraska, and Ohio.
                    ``(C) Region III: Alabama, Arkansas, Delaware, 
                Florida, Georgia, Kentucky, Louisiana, Maryland, 
                Mississippi, North Carolina, Oklahoma, South Carolina, 
                Tennessee, Texas, Virginia, and West Virginia.
                    ``(D) Region IV: Wisconsin.
                    ``(E) Region V: Colorado, Idaho, Minnesota, 
                Montana, North Dakota, Oregon, South Dakota, Utah, 
                Washington, and Wyoming.
                    ``(F) Region VI: Arizona, California, Nevada, and 
                New Mexico.
            ``(4) Selection of nominees for appointment as producer 
        members.--
                    ``(A) Two nominees required.--For the appointment 
                of the initial Board and whenever there is a vacancy on 
                the Board, the producers in each of the 6 geographic 
                regions described in paragraph (3) that has a producer 
                seat on the Board that is vacant shall choose, by 
                election, two producer nominees for such seat.
                    ``(B) Nomination process.--The Secretary shall 
                begin the process of appointing a person to fill a 
                producer seat on the Board by soliciting 
                recommendations of the names of producers in the region 
                involved to be listed on the ballot for election as a 
                nominee for appointment to that seat. The names and 
                qualifications of producers for inclusion on the ballot 
                may be submitted by any milk producer in the region, or 
                any organization that represents milk producers in such 
                region. The Secretary shall determine whether each such 
                producer submitted for inclusion on the ballot is 
                eligible to serve on the Board and meets the 
                qualification criteria set out in paragraph (5), and 
                shall include on the ballot the name of every qualified 
                person determined to be eligible and qualified if such 
                person agrees to permit his or her name being put on 
                the ballot.
                    ``(C) Elections.--The Secretary shall conduct an 
                election among milk producers in the region involved to 
                choose the two nominees for appointment to the vacant 
                seat. Each producer shall have one vote in the election 
                of each nominee, and bloc voting as provided in 
                subparagraph (D) shall be permitted. The two persons 
                receiving the highest number of votes in the election 
                shall be the nominees.
                    ``(D) Voting by associations.--For the purpose of 
                elections under this paragraph, the Secretary shall 
                consider the vote cast by any cooperative association 
                of producers, engaged in a bona fide manner in 
                marketing milk or the products of milk, as the vote of 
                the producers who are members of or under contract with 
                such cooperative association of producers. If a 
                cooperative association of producers elects to vote on 
                behalf of its members, such cooperative association 
                shall provide each producer, on whose behalf the 
                cooperative association is voting, a description of the 
                election process together with a statement of the 
                manner in which the cooperative association intends to 
                cast its vote on behalf of the membership. Such 
                information shall inform the producer of procedures to 
                follow to cast an individual ballot should the producer 
                so choose within the period of time established by the 
                Secretary for casting ballots. Such notification shall 
                be made at least 10 days prior to the election and 
                shall include an official ballot. The ballots shall be 
                tabulated by the Secretary and the vote of the 
                cooperative association shall be adjusted to reflect 
                such individual votes.
                    ``(E) Additional rules.--The Secretary shall 
                establish such additional rules for the conduct of 
                elections to choose producer nominees as are 
                appropriate.
            ``(5) Qualification criteria.--
                    ``(A) Basic criteria.--The Secretary may not 
                include the name of a person on the ballot in an 
                election to choose producer nominees for the Board, or 
                appoint any member to the Board, unless the Secretary 
                determines that such person meets the following 
                qualification criteria:
                            ``(i) the person must have substantial 
                        experience or a high level of expertise in the 
                        production of milk, the marketing of milk or 
                        dairy products, or the financing of such 
                        marketing activities; and
                            ``(ii) if the person is being considered 
                        for--
                                    ``(I) a producer seat on the Board, 
                                the person must have served in a 
                                leadership position for a dairy 
                                marketing cooperative or other dairy 
                                industry organization; or
                                    ``(II) a non-producer seat on the 
                                board, the person must have comparable 
                                leadership experience in his or her 
                                field of expertise.
                    ``(B) Further criteria.--In choosing among producer 
                nominees or directly selecting non-producer members for 
                appointment to the Board, the Secretary shall give 
                priority to persons with--
                            ``(i) if the appointment is to a non-
                        producer seat on the Board, substantial 
                        experience as a professional milk marketer; or
                            ``(ii) practical familiarity with, or 
                        demonstrated knowledge of, the process of 
                        marketing agricultural commodities for export 
                        or the financing of such transactions; or
                            ``(iii) practical familiarity with, or 
                        demonstrated knowledge of, the mechanics and 
                        market effects of moving dairy products from 
                        the processing plant into the market; or
                            ``(iv) substantial experience with the 
                        Federal milk price support program or Commodity 
                        Credit Corporation removals of dairy products 
                        from the market under that program.
            ``(6) Diversity of appointments.--In making appointments to 
        the Board, the Secretary shall ensure that not more than one 
        person employed by a particular company or associated with a 
        particular cooperative organization that can bloc vote in the 
        election of producer nominees sits on the Board at the same 
        time.
            ``(7) Rejection.--The Secretary may reject any nominee 
        selected by milk producers. If there are insufficient 
        nominations from which to appoint members to the Board as a 
        result of the Secretary rejecting nominees selected by milk 
        producers, milk producers shall select additional nominees, as 
        provided in this subsection.
            ``(8) Time schedule.--The Secretary shall conduct the 
        regional elections of producer nominees for appointment to the 
        initial Board and appoint all the initial members to the Board 
        no later than September 1, 1993. Thereafter, whenever a seat 
        becomes vacant for any reason, the Secretary, as soon as 
        practicable, shall conduct an election (if the vacant seat is a 
        producer seat) and make an appointment of a person to fill the 
        vacant seat.
            ``(9) Terms of members.--Each member of the Board shall 
        serve for a three-year term, subject to termination of the 
        Board by June 30, 1999, except that terms shall be staggered, 
        as follows:
                    ``(A) 4 of the producer members and 2 of the non-
                producer members appointed by the Secretary to the 
                initial Board shall have a 1-year term;
                    ``(B) 4 of the producer members and 2 of the non-
                producer members appointed by the Secretary to the 
                initial Board shall have a 2-year term; and
                    ``(C) 4 of the producer members and 2 of the non-
                producer members appointed by the Secretary shall have 
                a full 3-year term.
            ``(10) Operations committee.--The Board may establish an 
        Operations Committee for consultation and advice, consisting of 
        persons not sitting on the Board who as a group are suitably 
        qualified, either in experience or knowledge, in the various 
        aspects of the dairy industry, from research and production to 
        export marketing. The Operations Committee shall have no right 
        to cast votes in any matter voted on by the Board or the 
        Board's member committees, nor shall it have the power to 
        perform any of the functions of the Board under this title.
            ``(11) Conflict rules.--The members of the Board shall be 
        subject to such conflict of interest rules as determined 
        appropriate by the Secretary.
            ``(12) Reimbursement for expenses.--Members of the Board 
        and the Operating Committee shall serve without pay, but shall 
        be allowed reimbursement for expenses incurred in their service 
        on the Board or Committee, including reasonable travel costs 
        and out-of-pocket expenses when required to be away from their 
        home or place of business in the service of the Board or 
        Committee.
            ``(13) Removal for cause.--The Secretary may remove any 
        member of the Board for good cause shown.
            ``(14) Termination of the board.--The Board shall terminate 
        at such date--not later than June 30, 1999--agreed on by the 
        Secretary and the Board, unless extended by later enactment of 
        Congress.
    ``(c) Board Procedures.--
            ``(1) Meetings of the board.--
                    ``(A) First meeting.--Within 2 weeks after the 
                Secretary has appointed a quorum to the initial Dairy 
                Stabilization Board, the Board shall convene for its 
                initial meeting and elect officers and adopt written 
                bylaws and rules of procedure to govern its meetings.
                    ``(B) Subsequent meetings.--Following the initial 
                meeting, the Board shall meet at the call of the chair 
                or as requested by the Secretary, but at least once 
                every 3 months.
            ``(2) Quorum.--A quorum of the Board shall be 10 persons.
            ``(3) Notice to secretary; ex officio representation.--The 
        Board shall notify the Secretary in advance of each meeting of 
        the Board. The Secretary, or a representative of the Secretary, 
        shall attend each meeting as a non-voting ex officio member of 
        the Board.
    ``(d) Duties of the Board.--The Dairy Stabilization Board shall 
have the duties to--
            ``(1) prepare annually, for each of the 1994 through 1998 
        calendar years, a Dairy Stabilization Plan for that year and, 
        as necessary, establish a per hundredweight rate of deductions 
        from producer revenues for such year under section 204(h)(2) to 
        cover the costs of removals of surplus dairy products and other 
        activities of the Board under the Plan, and submit both to the 
        Secretary in advance for approval;
            ``(2) before the beginning of the second, third, and fourth 
        quarter of each calendar year in which deductions under section 
        204(h)(2) are in effect, make adjustments in the rate of 
        deductions for such year as necessary to reflect changes in 
        anticipated costs under the Plan for such year based on 
        revisions in the estimate of net Commodity Credit Corporation 
        removals of dairy products for the year, and submit any such 
        adjustment to the Secretary in advance for approval;
            ``(3) prepare and submit to the Secretary in advance for 
        approval the Board's proposed budget for each calendar year it 
        is in operation;
            ``(4) implement each annual Dairy Stabilization Plan and 
        approved budget, and coordinate activities under the Plan with 
        the programs of the Department of Agriculture;
            ``(5) evaluate results under each Dairy Stabilization Plan 
        and report on the evaluations to the Secretary, and provide a 
        copy of each such report to the Senate Committee on 
        Agriculture, Nutrition, and Forestry and the House Committee on 
        Agriculture;
            ``(6) with respect to the estimate of the value and volume 
        of Commodity Credit Corporation milk and milk product purchases 
        made by the Secretary by November 20 under section 204(f), in 
        cooperation with the Secretary, make monthly revisions of such 
        estimate for each month of the year to which the estimate 
        applies;
            ``(7) manage funds deposited into the Dairy Stabilization 
        Fund, as provided in section 240(j); and
            ``(8) establish the refund market adjustment factor for 
        each year as provided for in section 204(i)(2).
    ``(e) Powers of the Board--
            ``(1) General powers.--The Dairy Stabilization Board may--
                    ``(A) adopt bylaws and issue rules and regulations 
                governing the manner in which its business may be 
                conducted and the powers vested in it may be exercised;
                    ``(B) sue and be sued, complain and defend, in any 
                court of law or equity, State or Federal. All suits of 
                a civil nature at common law or in equity to which the 
                Board shall be a party shall be deemed to arise under 
                the laws of the United States, and the United States 
                district courts shall have original jurisdiction 
                thereof, without regard to the amount in controversy, 
                and the Board, in any capacity, without bond or 
                security, may remove any such action, suit, or 
                proceeding from a State court to the United States 
                district court for the district or division embracing 
                the place where the same is pending by following any 
                procedure for removal then in effect;
                    ``(C) incur and pay for administrative and other 
                expenses under this title;
                    ``(D) appoint staff, define their duties, and fix 
                and provide their compensation;
                    ``(E) enter into contracts and agreements as 
                necessary in the conduct of its business;
                    ``(F) contract for the use, in accordance with the 
                usual customs of trade and commerce, of plants and 
                facilities for the physical handling, storage, 
                processing, servicing, and transportation of dairy 
                products subject to its control; and
                    ``(G) make final and conclusive settlement and 
                adjustment of any claims by or against the Board or its 
                accounts; and
                    ``(H) use and expend monies in the Dairy 
                Stabilization Fund for purposes authorized under this 
                Act; and
                    ``(I) exercise such other powers incidental to its 
                performance of functions required or authorized for it 
                under this title.
            ``(2) Specific powers.--To meet its duties under this title 
        and implement Dairy Stabilization Plan, the Dairy Stabilization 
        Board may use its general powers to--
                    ``(A) remove, or cause the removal, of dairy 
                products from the domestic commercial market or accept 
                donated stocks from the Commodity Credit Corporation, 
                and maintain such products in inventory,
                    ``(B) dispose, or cause the disposal, of dairy 
                products it has removed from the market or received 
                from the Commodity Credit Corporation through outlets 
                that are not in competition with United States 
                commercial markets, primarily through export sales;
                    ``(C) transfer to the Commodity Credit Corporation, 
                at the Corporation's announced price, dairy products it 
                has removed from the market, as necessary for Board or 
                Corporation stock management purposes, and the 
                regulations of the Corporation shall so provide;
                    ``(D) cause the export of dairy cattle; and
                    ``(E) conduct other activities related to market 
                development and product disposal specified in section 
                204B(d), as necessary to meet its responsibilities 
                under this title and Dairy Stabilization Plans.
    ``(f) Budgets of the Board.--
            ``(1) Preparation.--Not later than October 31 of each of 
        the calendar years 1993 through 1997, the Dairy Stabilization 
        Board shall prepare and submit to the Secretary for approval a 
        budget of its anticipated expenses and disbursements in the 
        upcoming calendar year.
            ``(2) Items in each budget.--
                    ``(A) In general.--Each such budget shall provide--
                            ``(i) a detailed account of the Board's 
                        anticipated administrative expenses and other 
                        outlays to be incurred in implementing the 
                        Dairy Stabilization Plan for the upcoming year;
                            ``(ii) an estimate of expected revenues to 
                        the Board during the upcoming year, to which 
                        the budget of expenditures shall be reconciled;
                            ``(iii) an estimate of the anticipated 
                        outlays to be incurred for administrative 
                        expenses for the upcoming year;
                            ``(iv) an analysis of anticipated 
                        expenditures for administrative expenses, 
                        showing how they are being kept to the minimum 
                        necessary to operate the programs of the Board; 
                        and
                            ``(v) a description of the anticipated 
                        contracts during such year for the removal and 
                        disposition of surplus dairy products.
                    ``(B) Additional items.--The budget prepared for 
                calendar year 1994 shall include an additional amount 
                to reimburse the Commodity Credit Corporation for 
                expenditures to cover expenses of the Board prior to 
                January 1, 1994; and the budget prepared for calendar 
                year 1998 shall include an additional amount to cover 
                the Board's administrative expenses to be incurred in 
                1999 in wrapping up its business.
            ``(3) Submission with plan; approval required.--Each budget 
        prepared under this subsection shall be submitted to the 
        Secretary with the Dairy Stabilization Plan for the year 
        involved; and no budget may be implemented prior to its 
        approval by the Secretary. Each such budget shall be reviewed 
        for approval by the Secretary under the procedures provided for 
        review and approval of Dairy Stabilization Plans under section 
        204B(b)(2).
    ``(g) Administration; Contracting.--
            ``(1) Limitation on administrative expenses.--For any 
        calendar year in which the Secretary estimates under section 
        204(f) that the level of Commodity Credit Corporation purchases 
        of milk and the products of milk will exceed 5,000,000,000 
        pounds (milk equivalent, total milk solids basis), the Board 
        may not budget for or incur administrative expenses (including 
        the cost of paying employees of the Board) in the year that 
        exceed the lesser of--
                    ``(A) $2,000,000, or
                    ``(B) 5 percent of the annual budget of the Board 
                for the year.
            ``(2) Contracts for services.--
                    ``(A) In general.--To ensure efficient use of funds 
                available to the Dairy Stabilization Board under this 
                title and avoid duplication of efforts, whenever 
                possible, the Board shall enter into contracts and 
                agreements for the removal of dairy products from the 
                market, the disposition of such products, and such 
                other nonadministrative activities of the Board, and 
                for the payment of the cost thereof with funds 
                available to the Board under this title.
                    ``(B) Coverage of rule.--The tasks that may be 
                included under a contract or agreement include, but are 
                not limited to, offers to buy, purchases of dairy 
                products, storage and delivery of dairy products, 
                management of dairy product inventories, and 
                statistical collection and analysis.
                    ``(C) Requirements.--Any contract or agreement of 
                the Board under this paragraph shall be subject to the 
                approval of the Secretary; and the contracting or 
                agreeing party shall keep accurate records of all its 
                transactions, account for funds received and expended, 
                make periodic reports to the Board of activities 
                conducted, and make such other reports as the Board or 
                the Secretary may require.
            ``(3) Direct sales by others.--The Board shall ensure the 
        actual export marketing and sale of dairy products it has 
        removed from the market are done by dairy cooperatives and 
        other persons engaged in international marketing, rather than 
        by itself or its agents.
    ``(h) Funding for the Board; Expenditures.--
            ``(1) In general.--
                    ``(A) Dairy stabilization fund.--Monies in the 
                Dairy Stabilization Fund established under section 
                204(k) shall be available to the Dairy Stabilization 
                Board for expenditure, effective January 1, 1994, as 
                provided in this subsection.
                    ``(B) CCC funds.--Prior to January 1, 1994, the 
                activities of the Board in starting up operation and 
                preparing the initial Dairy Stabilization Plan shall be 
                paid with funds of the Commodity Credit Corporation. 
                The Corporation shall be reimbursed by the Board for 
                such payments from monies placed in the Dairy 
                Stabilization Fund during 1994.
            ``(2) Limitation.--Monies in the Dairy Stabilization Fund 
        may be expended by the Board only to--
                    ``(A) cover budgeted activities of the Board under 
                a budget approved by the Secretary under section 
                204B(b)(2);
                    ``(B) transfer to the Commodity Credit Corporation 
                general account reimbursements provided for in 
                paragraph (1)(B), and as necessary monies to provide 
                for refunds to producers of market stabilization 
                deductions from producer revenues, as provided in 
                section 204(i); and
                    ``(C) provide for rebates to milk producers of 
                excess monies remaining in the Fund when the Board is 
                terminated, as provided in subsection (k).
            ``(3) Carryover of funds.--To allow for continuity of 
        activities of the Board from year to year, monies in the Dairy 
        Stabilization Fund shall be available to the Board without 
        fiscal or calendar year limitation, except that, in any year 
        into which monies are carried over, the amount of any market 
        stabilization deduction from producer revenues for the year 
        under section 204(h)(2) shall be reduced by the amount of the 
        carryover.
    ``(j) Books and Records.--
            ``(1) In general.--The Dairy Stabilization Board shall--
                    ``(A) maintain such books and records (which shall 
                be available to the Secretary for inspection and audit) 
                as the Secretary may prescribe;
                    ``(B) prepare and submit to the Secretary, from 
                time to time, such reports as the Secretary may 
                prescribe; and
                    ``(C) account for the receipt and disbursement of 
                all funds entrusted to the Board.
            ``(2) Audits.--The Board shall cause its books and records 
        to be audited by an independent auditor at the end of each 
        fiscal year, and a report of such audit to be submitted to the 
        Secretary.
    ``(k) FACA Not Applicable.--The Federal Advisory Committee Act (5 
U.S.C. App. 2) shall not apply to the Board, or the operations of the 
Board.
    ``(l) Rebates on Termination of Board.--
            ``(1) In general.--At the time that the Board terminates 
        and winds up its affairs, any funds remaining in the Dairy 
        Stabilization Fund shall be rebated to milk producers who have 
        been subject to market stabilization deductions under section 
        204(h)(2), unless the administrative costs of distributing any 
        such rebate will exceed the amount rebated (in which case, the 
        amount shall revert to the Commodity Credit Corporation general 
        account). Rebates shall be made pro rata, based on the 
        cumulative amount deducted from the revenues of each milk 
        producer under section 204(h)(2).
            ``(2) Rebate not deemed a government payment.--Any rebate 
        under this paragraph shall not be considered as any type of 
        price support or payment for purposes of section 1211 or 1212 
        of the Food Security Act of 1985 (16 U.S.C. 3811 and 3821).

``SEC. 204B. DAIRY STABILIZATION PLANS.

    ``(a) Requirements.--
            ``(1) In general.--The Dairy Stabilization Board shall 
        prepare and implement a Dairy Stabilization Plan for each of 
        the calendar years 1994 through 1998, as provided in this 
        section, that shall provide a business plan of operation for 
        the Dairy Stabilization Board for the year, and shall include 
        the following elements:
                    ``(A) Generally.--The Plan for any year may include 
                such of the activities described in subsection (d) or 
                comparable activities within the authority of the Board 
                that are determined by the Board, to be appropriate for 
                such year.
                    ``(B) When estimated ccc purchases exceed 
                5,000,000,000 pounds.--For any year in which the 
                Secretary estimates, by November 20 of the preceding 
                year, that Commodity Credit Corporation purchases of 
                milk and the products of milk will exceed 5,000,000,000 
                pounds (milk equivalent, total milk solids basis), the 
                Plan shall provide for--
                            ``(i) timely market intervention measures 
                        by the Board to remove from the market an 
                        amount of dairy products that is equivalent to 
                        the portion of the estimated Commodity Credit 
                        Corporation purchases in excess of 
                        5,000,000,000 pounds but not in excess of 
                        7,000,000,000 pounds; and
                            ``(ii) other appropriate measures by the 
                        Dairy Stabilization Board to stabilize milk and 
                        dairy product prices, and to improve farm 
                        income during such year.
                    ``(C) When estimated ccc purchases exceed 
                7,000,000,000 pounds.--For any year in which the 
                Secretary estimates, by November 20 of the preceding 
                year, that Commodity Credit Corporation purchases of 
                milk and the products of milk will exceed 7,000,000,000 
                pounds (milk equivalent, total milk solids basis), the 
                Plan shall provide for such supplemental market 
                intervention measures that the Board agrees with the 
                Commodity Credit Corporation that it should undertake 
                if approved by the Secretary, regarding those 
                anticipated purchases in excess of 7,000,000,000 
                pounds, using for such purposes monies transferred to 
                the Dairy Stabilization Fund by the Commodity Credit 
                Corporation from the collected reductions in price 
                under section 204(g).
                    ``(D) Continuation and carryover.--For the second 
                and succeeding Plans, to the extent necessary or 
                appropriate, the Plan shall provide for the 
                continuation of activities initiated in the preceding 
                year and the carryover of funds made available for the 
                preceding year but not expended and the payment of 
                obligations incurred in the preceding year but not 
                paid.
                    ``(D) 1998 plan.--The Plan for calendar year 1998 
                shall cover activities and expenditures of the Board in 
                1999 to wind up the business of the Board.
            ``(2) Rate of deduction.--For any year in which the 
        Secretary estimates, by November 20 of the preceding year, that 
        Commodity Credit Corporation purchases of milk and the products 
        of milk will exceed 5,000,000,000 pounds (milk equivalent, 
        total milk solids basis), the Plan for such year also shall 
        establish the rate, per hundredweight, of the market 
        stabilization deduction from producer revenues under section 
        204(h)(2) at a level sufficient to cover the budgeted outlays 
        of the Board (other than for administrative costs) for its 
        activities under the plan during such year, net of any monies 
        otherwise in the Daily Stabilization Fund or otherwise 
        allocated to the Board for such year.
    ``(b) Schedule for Development of Plan.--
            ``(1) Preparation and submittal.--Each Dairy Stabilization 
        Plan for a year (A) shall be prepared, and the rate of the 
        market stabilization deduction determined (if necessary of such 
        year), during the period after the preliminary estimate of net 
        Commodity Credit Corporation purchases of milk and milk 
        products for a year is issued on August 1 of the preceding 
        year, and (B) shall be submitted to the Secretary for approval 
        not later than October 31 preceding the year the plan 
        addresses.
            ``(2) Review by secretary.--The Secretary shall review each 
        proposed Plan and rate of the market stabilization deduction 
        (if necessary for such year), and either approve or disapprove 
        the Plan and rate, within 20 days after receiving them. If the 
        Secretary disapproves a proposed Plan or the rate of deduction, 
        the Secretary shall--
                    ``(A) specify the reasons for disapproval, and give 
                the Board an additional 10 days to modify the Plan or 
                deduction rate to meet those concerns and resubmit it 
                for the Secretary's approval; or
                    ``(B) with respect to a disapproved Plan, draft an 
                alternative play or program for implementation by the 
                Board that would achieve the same goals as the Plan 
                proposed by the Board at the same or lower cost to milk 
                producers.
    ``(c) Quarterly Revisions.--
            ``(1) In general.--The Dairy Stabilization Plan for any 
        year shall be updated and revised at the beginning of each of 
        the second, third, and fourth quarters of the year, or at such 
        other times specified by the Secretary or determined necessary 
        by the Board. Any such revision may not go into effect until 
        approved by the Secretary.
            ``(2) Revision of deduction rate.--Any revision of a Plan 
        at the beginning of the second, third, or fourth quarter of a 
        year, as provided in paragraph (1), may include a revision in 
        the rate, per hundredweight, of the market stabilization 
        deduction from producer revenues under section 204(h)(2) for 
        such year, as necessary to reflect changes in anticipated costs 
        under the Plan for such year based on revisions in the estimate 
        of Community Credit Corporation purchases of milk and the 
        products of milk during such year. Any such revision may not go 
        into effect until approved by the Secretary.
    ``(d) Activities of the Board in Implementing a Plan.--
            ``(1) When estimated ccc purchases exceed 5,000,000,000 
        pounds.--The Dairy Stabilization Board, in implementing the 
        Dairy Stabilization Plan for any year in which the Secretary 
        estimates, by November 20 of the preceding year, that Commodity 
        Credit Corporation purchases of milk and the products of milk 
        will exceed 5,000,000,000 pounds (milk equivalent, total milk 
        solids basis), the Board may undertake the following activities 
        as authorized under the Plan:
                    ``(A) To acquire, or otherwise cause the removal 
                of, dairy products from domestic commercial markets on 
                the basis of bids by sellers in response to initiations 
                for bids announced by the Board.
                    ``(B) To acquire, or otherwise cause the removal 
                of, dairy products from domestic commercial markets at 
                announced prices during periods announced by the Board.
                    ``(C) To implement a program to cause the export of 
                dairy products the Board has removed from the market, 
                in coordination with the activities of the Foreign 
                Agricultural Service in implementing the Dairy Export 
                Incentive Program under section 153 of the Food 
                Security Act of 1985 (15 U.S.C. 713a-14) and subject to 
                the oversight of the Foreign Agricultural Service. 
                Under the program, the Board may cause the export of 
                dairy products with the assistance of export bonuses 
                provided by the Board, and determined on the basis of 
                bids by exporters in response to invitations for bids 
                announced by the Board. In implementing such a program, 
                the Board shall enter into an agreement with the 
                General Sales Manager to seek the Manager's prior 
                approval of any export transactions under the program. 
                This program shall not be implemented as a replacement 
                for the Dairy Export Incentive Program, but as a 
                supplement to it.
                    ``(D) To implement a program to cause the export of 
                dairy cattle, subject to the oversight of the Foreign 
                Agricultural Service. Under the program, the Board may 
                cause the export of dairy cattle with the assistance of 
                export bonuses provided by the Board, and determined on 
                the basis of bids by exporters in response to 
                invitations for bids announced by the Board.
                    ``(E) To effect the sale abroad, at world market 
                prices, of dairy products removed from the market by 
                the Board.
                    ``(F) To effect the domestic sale for unrestricted 
                use of dairy products removed from the market by the 
                Board at market prices, but in no case less than 110 
                percent of the Commodity Credit Corporation announced 
                purchase prices for the products.
                    ``(G) To donate, through the Secretary, products 
                the Board has removed from the market to domestic and 
                international feeding and aid programs, as needed for 
                emergency or disaster assistance.
                    ``(H) To transfer dairy products it has removed 
                from the market to the Commodity Credit Corporation at 
                the Corporation's announced purchase price (less an 
                amount, determined by the Secretary, to represent the 
                average level of bonus paid to exporters under the 
                Dairy Export Incentive Program), as necessary to manage 
                Corporation or Board inventories.
            ``(2) CCC operations.--Notwithstanding any other provision 
        of law, the Commodity Credit Corporation shall accept the 
        transfer of dairy products from the Board as provided in 
        paragraph (1)(H), and at any time may transfer its excess 
        inventories of dairy products to the control of the Board, as 
        necessary to manage Corporation or Board stocks or as provided 
        for in paragraph (4)(A).
            ``(3) When estimated ccc purchases are 5,000,000,000 pounds 
        or less.--The Dairy Stabilization Board, in implementing the 
        Dairy Stabilization Plan for any year in which the Secretary 
        estimates, by November 20 of the preceding year, that Commodity 
        Credit Corporation purchases of milk and the products of milk 
        will be 5,000,000,000 pounds or less (milk equivalent, total 
        milk solids basis) the Board may undertake the following 
        activities as authorized under the plan:
                    ``(A) To dispose of carryover stocks of dairy 
                products it had removed from the market in a previous 
                year, in any manner as specified in paragraph (1).
                    ``(B) To cause the export of dairy heifers with the 
                assistance of export bonuses provided by the Board on 
                the basis of bids by exporters in response to 
                invitations for bids announced by the Board.
            ``(4) In general.--The Dairy Stabilization Board, in 
        implementing the Dairy Stabilization Plan for any year, may 
        undertake the following activities as authorized under the 
        Plan:
                    ``(A) To accept stocks of dairy products 
                transferred from the Commodity Credit Corporation for 
                use in projects under the Plan.
                    ``(B) To provide funding to the Foreign 
                Agricultural Service cooperator organization for dairy 
                products to implement export market development 
                projects.
                    ``(C) To work with the Commodity Credit 
                Corporation, the Foreign Agricultural Service, 
                marketing organizations, and other entities in the 
                dairy industry in facilitating export sales of dairy 
                products.
                    ``(D) To work with the Commodity Credit Corporation 
                and, through the Secretary, humanitarian relief and 
                development organizations in providing dairy products 
                for emergency relief and development programs.
                    ``(E) To develop surplus disposal opportunities for 
                use in years in which removals of surplus dairy 
                products under the Dairy Stabilization Plans will be 
                needed.
            ``(5) Contracts and agreements.--In order to efficiently 
        manage stock acquisition and disposition under the Dairy 
        Stabilization Plans and to avoid excessive overhead and 
        unnecessary duplication in any area of the Board's operations, 
        the Board shall contract or enter agreements, as authorized in 
        section 204A, for the performance of any or all of the 
        functions described in paragraphs (1), (3), and (4) or similar 
        functions included in Dairy Stabilization Plans and approved by 
        the Secretary.
            ``(6) Limits on market intervention.--The Board shall 
        ensure that any activity under a Dairy Stabilization Plan does 
        not interfere with normal commercial inventory build-ups of 
        dairy products that are necessary to ensure adequate supplies 
        on a year-round basis. In this regard, the criterion the Board 
        shall use in planning activities under any Plan is that 
        intervention by the Board in the market should promote 
        moderate, regulated market adjustments and prevent steep or 
        contraseasonal declines in the prices for dairy products.''.

SEC. 5. REVISIONS OF AUTHORITY FOR ``EXCESS PURCHASES'' REDUCTIONS IN 
              PRICE.

    Effective January 1, 1994, subsection (g) of section 204 of the 
Agricultural Act of 1949 (7. U.S.C. 1446e) is amended by adding at the 
end thereof the following:
            ``(3) Targeted reductions.--
                    ``(A) In general.--In any year in which a reduction 
                in price under this subsection is in effect, if during 
                any two consecutive months of such year, the United 
                States average manufacturing grade milk price, as 
                reported by the Secretary, does not exceed the Federal 
                support price for milk by more than 50 cents per 
                hundredweight, beginning the following month the 
                reduction in price shall cease being collected on a 
                uniform basis on all milk produced in the 48 contiguous 
                States and marketed by producers for commercial use, 
                and shall be collected from each milk producer in the 
                contiguous 48 States only on the quantity of milk 
                marketed during each month by the producer in excess of 
                the producer's monthly base for milk marketings.
                    ``(B) Rate of reduction.--The amount of the 
                reduction in the price received by producers on such 
                over-base milk marketings shall be an amount per 
                hundredweight determined by the Secretary to be 
                sufficient, when applied to the amount of all such 
                over-base milk marketings during the remainder of the 
                year, as estimated by the Secretary, to result in total 
                reductions during the remainder of the year equal to 
                the total amounts of reductions in price that would 
                otherwise be made on a uniform basis on all milk 
                marketings under the procedures provided in paragraph 
                (2).
                    ``(C) Bases.--For purposes of determining, for each 
                milk producer, whether the producer is subject to the 
                targeted reduction in price under this paragraph, an 
                annual base made up of 12 monthly bases will be 
                established by the Secretary for each dairy farm 
                reflecting the farm's milk marketings during the 
                preceding year. New milk producers will be assigned a 
                base equal to 75 percent of their milk marketings 
                during each month of the year the reduction is in 
                effect.
                    ``(D) Maximum targeted reductions.--No milk 
                producer shall be liable for a targeted reduction in 
                price under this paragraph on more than 25 percent of 
                the producer's marketings during any month targeted 
                reductions are in effect.
                    ``(E) Termination of targeted reductions.--If, 
                after targeted reductions in price are implemented 
                during a year under this paragraph the United States 
                average manufacturing grade milk price, as reported by 
                the Secretary, rises to exceed the support price for 
                milk by more than $1.50 per hundredweight during two 
                consecutive months of such year, involved, beginning 
                the following month, the targeted reduction in price 
                will cease being collected, and the reduction in price 
                shall be made uniformly on all milk produced in the 48 
                contiguous States and marketed by producers for 
                commercial use in the amount provided for in paragraph 
                (2).
            ``(4) Termination of all reductions.--Notwithstanding any 
        other provision of this subsection, if at any time during a 
        year in which reductions in price are being made under this 
        subsection, the Secretary, in consultation with the Dairy 
        Stabilization Board, projects (based on the monthly revised 
        estimates of Commodity Credit Corporation purchases of milk and 
        the products of milk made under subsection (f)(2)) that 
        Corporation purchases of milk and the products of milk during 
        such year shall not exceed 7,000,000,000 pounds (milk 
        equivalent, total milk solids basis), less such amounts of 
        estimated Corporation purchases covered by the Board's Dairy 
        Stabilization Plan for that year, the reduction in price under 
        this subsection will cease being made for the remainder of the 
        year.
            ``(5) Special refunds.--
                    ``(A) In general.--If, at the end of any year in 
                which reductions in price are made under this 
                subsection, it is determined by the Secretary that 
                actual Commodity Credit Corporation purchases of milk 
                and the products of milk made under subsection (f)(2) 
                that Corporation purchases of milk and the products of 
                milk during that year did not exceed 7,000,000,000 
                pounds (milk equivalent, total milk solids basis) less 
                such amounts of estimated Corporation purchases covered 
                by the Board's Dairy Stabilization Plan for that year, 
                the Secretary shall provide refunds of all the 
                reductions in price under this subsection made during 
                such year, other than reduction monies transferred to 
                the Board under an agreement made under section 
                304B(a)(1)(C). The transferred amount not subject to 
                the special refunds shall be prorated among all 
                producers eligible for such refunds on the basis of the 
                reductions in price collected from such producers 
                during the year; and the prorated amount for each 
                producer shall be deducted from the amount of refund 
                otherwise due to the producer under this paragraph.
                    ``(B) Refund not deemed a government payment.--Any 
                refund under this paragraph shall not be considered as 
                any type of price support or payment for purposes of 
                section 1211 or 1212 of the Food Security Act of 1985 
                (16 U.S.C 3811 and 3821).''.

SEC. 6. CONTINUATION OF DEFICIT REDUCTION ACTIVITIES IN FISCAL YEARS 
              AFTER 1995.

    (1) In General.--Section 204 of the Agricultural Act of 1949 (7 
U.S.C. 1446e) is amended by--
          (A) amending the section heading to read as follows;

``SEC. 204. MILK PRICE SUPPORT AND CERTAIN COLLECTIONS FROM PRODUCERS 
              IN CALENDAR YEARS 1991 THROUGH 1998; MILK INVENTORY 
              MANAGEMENT REPORT.'';

            (B) in subsections (a), (b), (d)(1)(A), (d)(2)(A), (d)(3), 
        (g)(1), and (m) (as so redesignated by section 3(b)(1)) 
        striking ``1995'' each place it appears and inserting in lieu 
        thereof ``1998''; and
            (C) in subsection (g)(2), striking ``1994'' and inserting 
        in lieu thereof ``1997''.
    (2) Transfer to Military and Veterans Hospitals.--Subsections (a) 
and (b) of section 202 of the Agricultural Act of 1949 (7 U.S.C. 1446e) 
are amended by striking ``1995'' both places that date appears and 
inserting in lieu thereof ``1998''.
    (3) Federal Milk Marketing Orders.--Section 101(b) of the 
Agriculture and Food Act of 1981 (7 U.S.C. 603c note) is amended by 
striking ``1995'' and inserting in lieu thereof ``1998''.
    (4) Dairy Indemnity Program.--Section 3 of Public Law 90-484 (7 
U.S.C. 450l) is amended by striking ``1995'' and inserting in lieu 
thereof ``1998''.
    (5) Food Security Act of 1985.--The Food Security Act of 1985 is 
amended by--
            (A) in section 153(a) (15 U.S.C. 713a-14(a)), striking out 
        ``1995'' and inserting in lieu thereof ``1998''; and
            (B) in section 1163 (7 U.S.C. 1731 note), striking ``1995'' 
        each place that date appears and inserting in lieu thereof 
        ``1998''.

SEC. 7. ESTIMATES OF CCC PURCHASES.

    Subsection (f) of section 204 of the Agricultural Act of 1949 (7 
U.S.C. 1446e) is amended to read as follows:
    ``(f) Estimates of CCC Purchases.--
            ``(1) In general.--On August 1 and by November 20 of each 
        of the calendar years 1991 through 1998, the Secretary shall 
        notify the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, Nutrition, 
        and Forestry of the Senate regarding the value and volume of 
        milk and milk product purchases on a milk equivalent, total 
        milk solids basis, the Secretary estimates that the Commodity 
        Credit Corporation will make during the upcoming calendar year, 
        before the effects from the implementation of the Dairy 
        Stabilization Plan for such year or from any reduction in price 
        or deduction from producer revenues under subsection (g) or 
        (h), respectively, made during such year are calculated.
            ``(2) Revisions.--The estimates of Commodity Credit 
        Corporation purchases made under paragraph (1) shall be revised 
        monthly during the year by the Dairy Stabilization Board, in 
        cooperation with the Secretary.
            ``(3) Net purchases equivalent to net removals.--As used in 
        this section and section 204A, the phrases `purchase of milk 
        and the products of milk' and `purchases of milk' and 
        `purchases of milk and the products of milk' shall include all 
        removals of dairy products from the domestic market under this 
        section, either by direct purchase or by export under the Dairy 
        Export Incentive Program under section 153 of the Food Security 
        Act of 1985.''.

SEC. 8. ALLOCATION OF PURCHASE PRICES FOR BUTTER AND NONFAT DRY MILK.

    (a) In General.--Subsection (c)(3) of section 204 of the 
Agricultural Act of 1949 (7 U.S.C. 1446e) is amended by--
            (1) in the first sentence of subparagraph (A), striking 
        ``The Secretary'' and inserting in lieu thereof ``Subject to 
        subparagraph (B), the Secretary'';
            (2) redesignating subparagraph (B) as subparagraph (C); and
            (3) inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) Guidelines.--In allocating the rate of price 
                support between the purchase prices of butter and 
                nonfat dry milk under this paragraph, the Secretary may 
                not--
                            ``(i) offer to purchase butter for more 
                        than $0.65 per pound; or
                            ``(ii) offer to purchase nonfat dry milk 
                        for less than $1.034 per pound.''.
    (b) Application of Amendments.--The amendments made by subsection 
(a) shall apply with respect to purchases of butter and nonfat dry milk 
that are made by the Secretary of Agriculture under section 204 of the 
Agricultural Act of 1949 (7 U.S.C. 1446e) on or after the date of the 
enactment of this Act.

SEC. 9. FEDERAL MILK ORDER SUPPLY BALANCING COST SHARING PLAN.

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

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