I

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.

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 ‘‘Dairy Budget Rec5 onciliation and Self-Help Initiative Act of 1993’’.
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1 SEC. 2. FINDINGS, PURPOSES, AND STATEMENT OF POLICY.

2 (a) FINDINGS.—Congress finds that—

3 (1) milk and dairy products are vital compo4 nents of a balanced diet and have high nutritive

5 value, and the production of milk and dairy products

6 is an important segment of the Nation’s agricultural

7 industry;

8 (2) an effective Federal milk price support pro9 gram is needed to ensure consumers of a reliable

10 and adequate supply of pure and wholesome milk

11 and dairy products at reasonable prices, to respond

12 adequately to current and anticipated future supply

13 and demand problems, and to ensure a level of farm

14 income adequate to maintain productive capacity

15 sufficient to meet anticipated future needs;

16 (3) the effectiveness of the current Federal milk

17 price support program is being diminished and the

18 economic stress on milk producers increasing due to

19 the growing demands made on milk producers to

20 provide funds for reduction of the Federal budget

21 deficit through direct levies and similar measures in22 cluded in budget reconciliation Acts;

23 (4) milk producers are being asked to pay more

24 and more in budget reconciliation levies, while the

25 economic pressures being placed on the milk produc26 tion industry continue to squeeze them financially;
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1 (5) it is in the national interest and crucial to

2 milk producers that an alternative be found to the

3 continued expansion of budget reconciliation levies

4 and the corresponding diminution of the benefits of

5 the Federal milk price support program;

6 (6) since most Government outlays under the

7 Federal milk price support program stem from Com8 modity Credit Corporation removals of surplus dairy

9 products from the market to reduce the adverse ef10 fect of the surpluses on producer market prices for

11 milk, net Federal expenditures under that program

12 can be reduced, and thus needed budget savings

13 achieved, by reducing the level of removals of sur14 plus dairy products by the Corporation under the

15 price support program;

16 (7) an effective way to reduce the level of the

17 Commodity Credit Corporation’s price support re18 movals is through the implementation of a producer19 funded program (using deductions from producer

20 revenues) as a supplement to the existing milk price

21 support program to remove surplus dairy products

22 from the market before the Corporation has to take

23 them, and develop additional markets for domesti24 cally-produced dairy products;
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1 (8) implementation of such a producer-funded

2 self-help program is preferable to just increasing the

3 level of budget reconciliation levies, because, while

4 effectively reducing net Federal expenditures under

5 the milk price support program, it also stabilizes the

6 market for milk producers and lessens the economic

7 effect of the budget deficit reduction effort on them;

8 (9) implementation of the self-help program

9 also is fairer to milk producers because it will use

10 the funds collected from them under the budget rec11 onciliation process to provide them with tools that

12 they, as an industry, need to effectively develop new

13 markets for their products;

14 (10) if milk producers shoulder the financial

15 burden of removing surplus dairy products from the

16 market and developing new markets for domestic

17 milk production under this self-help program, it is

18 appropriate, as well as most conducive to the effi19 cient implementation of the program, that the milk

20 production and marketing industry be directly in21 volved in the operation of the program under the

22 oversight of the Secretary of Agriculture;

23 (11) the Federal milk price support program it24 self is the responsibility of the Secretary of Agri25 culture under the Agricultural Act of 1949, and the
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1 producer-funded efforts to dispose of surplus dairy

2 products and develop new markets for dairy prod3 ucts under the self-help program established by this

4 Act should be overseen by the Secretary of Agri5 culture and be coordinated with the milk price sup6 port program and other Department of Agriculture

7 programs; and

8 (12) the future of milk price stabilization re9 quires the opening of new market opportunities that

10 the efficient production capacity of our Nation’s

11 milk producers can respond to, and the self-help ef12 fort provided for in this Act should include aggres13 sive efforts to search out and find new market op14 portunities in promising export markets.

15 (b) STATEMENT OF PURPOSES AND POLICY.—

16 (1) PURPOSES.—The purposes of this Act are

17 to—

18 (A) achieve a reduction in net Federal ex19 penditures under the Federal milk price support

20 program that contributes substantially to the

21 needed reductions in net Federal outlays re22 quired under the Concurrent Budget Resolution

23 for fiscal years 1994 through 1998;

24 (B) achieve such reduction in net expendi25 tures through implementation of a self-help pro-
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1 gram funded by milk producers that will remove

2 surplus dairy products by timely intervention in

3 the market and through expanded exports, and

4 related changes in policies governing the Fed5 eral milk program; and

6 (C) establish the Dairy Stabilization Board

7 to develop and implement annual plans for han8 dling surplus dairy products and to develop new

9 markets for domestic dairy products, under the

10 oversight of the Secretary of Agriculture.

11 (2) STATEMENTS OF POLICY.—

12 (A) IN GENERAL.—It is declared to be the

13 policy of Congress that it is in the public inter14 est, and necessary to protect and strengthen the

15 Nation’s milk production and marketing sys16 tem, to reduce any adverse affects of budget

17 reconciliation actions on milk producers, and to

18 facilitate the continued effective operations of

19 the Federal milk price support program, that

20 the self-help program funded by milk producers

21 provided for in this Act be implemented.

22 (B) PROTECTION OF CONSUMERS.—It fur23 ther is declared to be the policy of Congress

24 that the powers provided in this Act shall not

25 be used to reduce the production of pure and
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1 wholesome milk and dairy products below the

2 level required for United States consumers or to

3 divert production from meeting the needs of

4 such consumers, and that, in carrying out this

5 Act, due regard shall be given to the mainte6 nance of a continuous and stable supply of milk

7 and dairy products adequate to meet the de8 mands of United States consumers at prices

9 fair to both producers and consumers.

10 SEC. 3. BUDGET RECONCILIATION AND MARKET STA11 BILIZATION DEDUCTIONS FROM PRODUCER

12 REVENUES; REFUNDS; COLLECTION.

13 (a) IN GENERAL.—Effective January 1, 1994, sec14 tion 204 of the Agricultural Act of 1949 (7 U.S.C. 1446e)

15 is amended by striking out subsection (h) and all that fol16 lows down through the end of subsection (j) and inserting

17 in lieu thereof the following:

18 ‘‘(h) DEDUCTIONS FROM PRODUCER REVENUES.—

19 ‘‘(1) BUDGET RECONCILIATION SAVING DEDUC20 TIONS FROM PRODUCER REVENUES.—

21 ‘‘(A) IN GENERAL.—During each of the

22 calendar years 1994 through 1998, the Sec23 retary shall provide for deductions from pro24 ducer revenues, as provided in paragraph (3),

25 on all milk produced in the 48 contiguous
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1 States and marketed by producers for commer2 cial use, in addition to any reduction in price

3 required under subsection (g).

4 ‘‘(B) AMOUNT.—The amount of the deduc5 tion from producer revenues under subpara6 graph (A) shall be 10 cents per hundredweight

7 of milk marketed, which rate shall be adjusted

8 on or before May 1 of each of the calendar

9 years 1994 through 1998 by an amount per

10 hundredweight that is necessary to compensate

11 for refunds made under subsection (i) on the

12 basis of marketings in the previous calendar

13 year.

14 ‘‘(C) REFUNDS.—The Secretary shall pro15 vide for refunds to producers of deductions

16 made from producer revenues under this para17 graph, as provided in subsection (i).

18 ‘‘(2) MARKET STABILIZATION DEDUCTIONS

19 FROM PRODUCER REVENUES.—

20 ‘‘(A) IN GENERAL.—During any of the cal21 endar years 1994 through 1998 in which a

22 Dairy Stabilization Plan is in effect that pro23 vides for the removal of dairy products from the

24 market, the Secretary shall provide for deduc25 tions from producer revenues, as provided in
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1 paragraph (3), on all milk produced in the 48

2 contiguous States and marketed by producers

3 for commercial use, in addition to any reduction

4 in price required under subsection (g) and the

5 deductions from producer revenues required

6 under paragraph (1).

7 ‘‘(B) AMOUNT.—

8 ‘‘(i) IN GENERAL.—The amount of

9 the deduction from producer revenues

10 under subparagraph (A) during any cal11 endar year shall be the amount per hun12 dredweight of milk marketed—not to ex13 ceed 10 cents per hundredweight—that is

14 established by the Dairy Stabilization

15 Board for such year, as provided in section

16 204B(a)(2), and approved by the Sec17 retary.

18 ‘‘(ii) REVISIONS OF AMOUNT.—The

19 amount of the deduction established for a

20 year under clause (i) may be adjusted by

21 the Dairy Stabilization Board at the begin22 ning of the second, third, or fourth quarter

23 of the year, as provided in section

24 204B(c)(2) and if approved by the Sec25 retary, to reflect changes in anticipated
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1 costs under the Dairy Stabilization Plan

2 for such year.

3 ‘‘(C) REFUNDS.—The Secretary shall pro4 vide for refunds to producers of deductions

5 made from producer revenues under this para6 graph, as provided in subsection (i).

7 ‘‘(3) DEDUCTION PROCESS.—The Secretary

8 shall provide for the deductions from producer reve9 nues required under paragraphs (1) and (2) as fol10 lows:

11 ‘‘(A) with respect to milk marketed under

12 a Federal milk marketing order, the Secretary

13 shall provide for a monthly deduction, from the

14 total pool revenues available to producers from

15 marketings of milk under such marketing order

16 during such month, of such sum that is equiva17 lent to a uniform reduction in the blend price,

18 per hundredweight, to producers for such milk

19 at the rate per hundredweight provided for in

20 paragraph (1) or (2), and the remittal of such

21 deducted amounts to the Commodity Credit

22 Corporation;

23 ‘‘(B) with respect to milk marketed under

24 a State milk pricing and pooling program, the

25 Secretary shall provide for a monthly deduction,
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1 from the total pool revenues available to pro2 ducers from marketing of milk under the pro3 gram during such month, of such sum that is

4 equivalent to a uniform reduction in the price,

5 per hundredweight, to producers for such milk

6 at the rate per hundredweight provided for in

7 paragraph (1) or (2), and the remittal of such

8 deducted amounts to the Commodity Credit

9 Corporation. For purposes of this subpara10 graph, at the option of the appropriate State

11 authority, in lieu of the required amounts being

12 withheld from producers by directly deducting

13 such amounts from the total pool revenues

14 under the State program, the required amounts

15 may be withheld from producers by the Sec16 retary through a reduction of the amount per

17 hundredweight provided for in paragraph (1) or

18 (2) from the price received on all milk marketed

19 for commercial use by producers subject to the

20 order; and

21 ‘‘(C) with respect to all milk marketed for

22 commercial use, the Secretary shall provide for

23 a deduction of the amount, per hundredweight,

24 provided for in paragraph (1) or (2) from the

25 price received by producers on all milk mar-
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1 keted for commercial use (including milk not el2 igible for fluid use and milk marketed by pro3 ducer-distributors), and the remittal of such de4 ducted amounts to the Commodity Credit Cor5 poration.

6 ‘‘(i) REFUNDS TO PRODUCERS.—

7 ‘‘(1) IN GENERAL.—The Secretary shall provide

8 a refund of—

9 ‘‘(A) the reductions under subsection (g) in

10 the price received by a producer during a cal11 endar year (excluding any such reduction that

12 is a targeted reduction under subsection

13 (g)(3)), except when a refund is otherwise avail14 able to the producer under subsection (g)(5);

15 and

16 ‘‘(B) the entire amount of the deductions

17 from producer revenues made under subsection

18 (h) during such calendar year that are applica19 ble to the milk marketed by the producer dur20 ing the year,

21 if the producer provides evidence that the producer

22 did not increase marketings in the calendar year

23 over the amount determined by multiplying market24 ings of such producer during the preceding year by

25 the market adjustment factor established under
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1 paragraph (2) to reflect growth or shrinkage in the

2 market for milk during the refund year.

3 ‘‘(2) MARKET ADJUSTMENT FACTOR.—The

4 market adjustment factor used in paragraph (1)

5 shall be established by the Dairy Stabilization

6 Board, in consultation with the Secretary, at a per7 centage determined by dividing the amount of all

8 milk produced in the 48 contiguous States and mar9 keted by producers for commercial use in the year

10 for which refunds are available by the amount of

11 such milk marketings in the year preceding such

12 year.

13 ‘‘(3) FUNDS FOR REFUNDS.—Funds used to

14 make refunds under this subsection shall be made

15 available from the Commodity Credit Corporation

16 general account, except that such funds as are need17 ed to cover refunds of market stabilization deduc18 tions from producer revenues shall be transferred to

19 the Corporation’s general account from the Dairy

20 Stabilization Fund.

21 ‘‘(4) REFUND NOT DEEMED A GOVERNMENT

22 PAYMENT.—Any refund under this subsection shall

23 not be considered as any type of price support or

24 payment for purposes of section 1211 or 1212 of the
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1 Food Security Act of 1985 (16 U.S.C. 3811 and

2 3821).

3 ‘‘(j) COLLECTION AND ENFORCEMENT.—

4 ‘‘(1) COLLECTION.—Reductions in price re5 quired under subsection (g) and deductions from

6 producer revenues required under subsection (h)

7 shall be collected and remitted to the Commodity

8 Credit Corporation in the manner prescribed by the

9 Secretary, except that—

10 ‘‘(A) in any year in which a market sta11 bilization deduction from producer revenues is

12 in effect under subsection (h)(2), the Secretary

13 shall combine such deduction with the budget

14 reconciliation savings deduction in effect for

15 that year under subsection (h)(1), and provide

16 for the collection of both deductions together;

17 and

18 ‘‘(B) on receipt by the Commodity Credit

19 Corporation of amounts deducted from pro20 ducer revenues under subsection (h), the Com21 modity Credit Corporation immediately shall

22 place into the Dairy Stabilization Fund that

23 portion of the receipts that is due to the Dairy

24 Stabilization Board as provided in subsection

25 (k).
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1 ‘‘(2) PENALTIES.—If any person fails to collect

2 or remit the reduction required by subsection (g) or

3 deduction required by subsection (h) or fails to com4 ply with such requirements for recordkeeping or oth5 erwise as are required by the Secretary to carry out

6 such subsection, the person shall be liable to the

7 Secretary for a civil penalty up to an amount deter8 mined by multiplying—

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

10 violation; by

11 ‘‘(B) the support rate for the applicable

12 calendar year for milk.

13 ‘‘(k) DAIRY STABILIZATION FUND.—

14 ‘‘(1) IN GENERAL.—There shall be established

15 in the Commodity Credit Corporation a special fund,

16 to be known as the ‘Dairy Stabilization Fund’. Mon17 ies in such Fund shall be available solely for the use

18 of the Dairy Stabilization Board for expenditures

19 provided for in this Act.

20 ‘‘(2) MONEY INTO THE FUND.—There shall be

21 deposited into the Fund—

22 ‘‘(A) all monies collected from market sta23 bilization deductions from producer revenues

24 made under subsection (h)(2);
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1 ‘‘(B) of the monies collected from budget

2 reconciliation savings deductions from producer

3 revenues under subsection (h)(1) during any

4 calendar year—

5 ‘‘(i) that portion of the collected de6 ductions that is budgeted to cover the

7 Board’s administrative expenses under the

8 Dairy Stabilization Plan for such year ap9 proved by the Secretary; and

10 ‘‘(ii) that portion of the collected de11 ductions that is in compensation for trans12 fers to the Commodity Credit Corporation

13 under section 204A(h)(2)(B) to cover re14 funds of market stabilization deductions

15 under subsection (h)(2) made on the basis

16 of marketings in the previous calendar

17 year;

18 ‘‘(C) monies collected from any excess pur19 chases reduction in price under subsection (g),

20 the transfer of which to the Fund is approved

21 by the Commodity Credit Corporation, under

22 any agreement between the Board and the Cor23 poration for the Board to assist the Corporation

24 in removing from the market excess dairy prod25 ucts, as provided for in section 204B(a)(1)(C);
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1 ‘‘(D) revenues received by the Board from

2 sales of dairy products it has removed from the

3 market or from any other source; and

4 ‘‘(E) credits, each month, from the general

5 account of the Commodity Credit Corporation

6 to represent interest earned (at the then cur7 rent rates of interest being charged by the

8 Commodity Credit Corporation) on the average

9 outstanding balance in the Fund during such

10 month.

11 ‘‘(3) TERMINATION OF FUND.—The Dairy Sta12 bilization Fund shall terminate, and any monies re13 maining in the Fund transferred to the general ac14 count of the Commodity Credit Corporation, at such

15 time as the Dairy Stabilization Board winds up its

16 affairs and all legal obligations of the Board, includ17 ing rebates to milk producers under section 204A(l),

18 have been met.

19 ‘‘(l) USE OF THE COMMODITY CREDIT CORPORA20 TION.—The Secretary shall use the funds, facilities, and

21 authorities of the Commodity Credit Corporation to carry

22 out this section and sections 204A and 204B.’’.

23 ‘‘(b) CONFORMING CHANGES.—
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1 ‘‘(1) REDESIGNATIONS.—Subsection (k) of sec2 tion 204 of the Agricultural Act of 1949 (7 U.S.C.

3 1446e) is redesignated as subsection (m).

4 ‘‘(2) 1990 FARM BILL AMENDMENT.—Section

5 101(b) of the Food, Agriculture, Conservation, and

6 Trade Act of 1990 (7 U.S.C. 1446e note) is amend7 ed by inserting ‘‘or deduction taken from milk pro8 ducer revenues’’ immediately before the period at the

9 end thereof.

10 SEC. 4. DAIRY STABILIZATION INITIATIVE.

11 The Agricultural Act of 1949 is amended by inserting

12 after section 204 (7 U.S.C. 1446e) the following new sec13 tions:

14 ‘‘SEC. 204A. DAIRY STABILIZATION BOARD.

15 ‘‘(a) ESTABLISHMENT.—Not later than September 1,

16 1993, the Secretary of Agriculture shall establish the

17 Dairy Stabilization Board to develop and implement Dairy

18 Stabilization Plans and perform other tasks of the Board

19 provided for in this title, subject to the supervision and

20 regulations of the Secretary.

21 ‘‘(b) MEMBERSHIP.—

22 ‘‘(1) IN GENERAL.—The Dairy Stabilization

23 Board shall consist of 18 members appointed by the

24 Secretary as provided in this subsection. The Sec25 retary may not appoint any person to the Board un-
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1 less the Secretary determines that the person meets

2 the qualification criteria set out in paragraph (5).

3 ‘‘(2) COMPOSITION OF BOARD.—

4 ‘‘(A) REGIONAL DISTRIBUTION.—The 18

5 seats on the Board shall be evenly allocated

6 among the 6 geographic regions described in

7 paragraph (3).

8 ‘‘(B) REGIONAL APPOINTMENTS.—The

9 Secretary shall appoint 3 members to the Board

10 from each of the 6 geographic regions, as fol11 lows:

12 ‘‘(i) 2 members shall be qualified milk

13 producers whose farms are located in that

14 region, each appointed by the Secretary

15 from among nominees selected by the milk

16 producers in such region, as provided in

17 this subsection; and

18 ‘‘(ii) 1 member shall be a qualified

19 person employed in some capacity in the

20 dairy industry other than as a producer,

21 and selected by the Secretary in such man22 ner as the Secretary determines appro23 priate. For any individual employed by a

24 company or organization that conducts

25 business in more than one such region,
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1 such individual will be deemed to be lo2 cated in the region in which such individ3 ual’s normal place of business is located.

4 ‘‘(3) 6 GEOGRAPHIC REGIONS.—For purposes of

5 making regional appointments of persons to the

6 Board, as provided in paragraph (2), the 48 contig7 uous States shall be grouped into 6 regions, as fol8 lows:

9 ‘‘(A) Region I: Connecticut, Maine, Massa10 chusetts, New Hampshire, New Jersey, New

11 York, Pennsylvania, Rhode Island, and Ver12 mont.

13 ‘‘(B) Region II: Illinois, Indiana, Iowa,

14 Kansas, Michigan, Missouri, Nebraska, and

15 Ohio.

16 ‘‘(C) Region III: Alabama, Arkansas, Dela17 ware, Florida, Georgia, Kentucky, Louisiana,

18 Maryland, Mississippi, North Carolina, Okla19 homa, South Carolina, Tennessee, Texas, Vir20 ginia, and West Virginia.

21 ‘‘(D) Region IV: Wisconsin.

22 ‘‘(E) Region V: Colorado, Idaho, Min23 nesota, Montana, North Dakota, Oregon, South

24 Dakota, Utah, Washington, and Wyoming.
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1 ‘‘(F) Region VI: Arizona, California, Ne2 vada, and New Mexico.

3 ‘‘(4) SELECTION OF NOMINEES FOR APPOINT4 MENT AS PRODUCER MEMBERS.—

5 ‘‘(A) TWO NOMINEES REQUIRED.—For the

6 appointment of the initial Board and whenever

7 there is a vacancy on the Board, the producers

8 in each of the 6 geographic regions described in

9 paragraph (3) that has a producer seat on the

10 Board that is vacant shall choose, by election,

11 two producer nominees for such seat.

12 ‘‘(B) NOMINATION PROCESS.—The Sec13 retary shall begin the process of appointing a

14 person to fill a producer seat on the Board by

15 soliciting recommendations of the names of pro16 ducers in the region involved to be listed on the

17 ballot for election as a nominee for appointment

18 to that seat. The names and qualifications of

19 producers for inclusion on the ballot may be

20 submitted by any milk producer in the region,

21 or any organization that represents milk pro22 ducers in such region. The Secretary shall de23 termine whether each such producer submitted

24 for inclusion on the ballot is eligible to serve on

25 the Board and meets the qualification criteria
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1 set out in paragraph (5), and shall include on

2 the ballot the name of every qualified person

3 determined to be eligible and qualified if such

4 person agrees to permit his or her name being

5 put on the ballot.

6 ‘‘(C) ELECTIONS.—The Secretary shall

7 conduct an election among milk producers in

8 the region involved to choose the two nominees

9 for appointment to the vacant seat. Each pro10 ducer shall have one vote in the election of each

11 nominee, and bloc voting as provided in sub12 paragraph (D) shall be permitted. The two per13 sons receiving the highest number of votes in

14 the election shall be the nominees.

15 ‘‘(D) VOTING BY ASSOCIATIONS.—For the

16 purpose of elections under this paragraph, the

17 Secretary shall consider the vote cast by any co18 operative association of producers, engaged in a

19 bona fide manner in marketing milk or the

20 products of milk, as the vote of the producers

21 who are members of or under contract with

22 such cooperative association of producers. If a

23 cooperative association of producers elects to

24 vote on behalf of its members, such cooperative

25 association shall provide each producer, on
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1 whose behalf the cooperative association is vot2 ing, a description of the election process to3 gether with a statement of the manner in which

4 the cooperative association intends to cast its

5 vote on behalf of the membership. Such infor6 mation shall inform the producer of procedures

7 to follow to cast an individual ballot should the

8 producer so choose within the period of time es9 tablished by the Secretary for casting ballots.

10 Such notification shall be made at least 10 days

11 prior to the election and shall include an official

12 ballot. The ballots shall be tabulated by the

13 Secretary and the vote of the cooperative asso14 ciation shall be adjusted to reflect such individ15 ual votes.

16 ‘‘(E) ADDITIONAL RULES.—The Secretary

17 shall establish such additional rules for the con18 duct of elections to choose producer nominees

19 as are appropriate.

20 ‘‘(5) QUALIFICATION CRITERIA.—

21 ‘‘(A) BASIC CRITERIA.—The Secretary

22 may not include the name of a person on the

23 ballot in an election to choose producer nomi24 nees for the Board, or appoint any member to

25 the Board, unless the Secretary determines that
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1 such person meets the following qualification

2 criteria:

3 ‘‘(i) the person must have substantial

4 experience or a high level of expertise in

5 the production of milk, the marketing of

6 milk or dairy products, or the financing of

7 such marketing activities; and

8 ‘‘(ii) if the person is being considered

9 for—

10 ‘‘(I) a producer seat on the

11 Board, the person must have served in

12 a leadership position for a dairy mar13 keting cooperative or other dairy in14 dustry organization; or

15 ‘‘(II) a non-producer seat on the

16 board, the person must have com17 parable leadership experience in his or

18 her field of expertise.

19 ‘‘(B) FURTHER CRITERIA.—In choosing

20 among producer nominees or directly selecting

21 non-producer members for appointment to the

22 Board, the Secretary shall give priority to per23 sons with—

24 ‘‘(i) if the appointment is to a non25 producer seat on the Board, substantial ex-
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1 perience as a professional milk marketer;

2 or

3 ‘‘(ii) practical familiarity with, or

4 demonstrated knowledge of, the process of

5 marketing agricultural commodities for ex6 port or the financing of such transactions;

7 or

8 ‘‘(iii) practical familiarity with, or

9 demonstrated knowledge of, the mechanics

10 and market effects of moving dairy prod11 ucts from the processing plant into the

12 market; or

13 ‘‘(iv) substantial experience with the

14 Federal milk price support program or

15 Commodity Credit Corporation removals of

16 dairy products from the market under that

17 program.

18 ‘‘(6) DIVERSITY OF APPOINTMENTS.—In mak19 ing appointments to the Board, the Secretary shall

20 ensure that not more than one person employed by

21 a particular company or associated with a particular

22 cooperative organization that can bloc vote in the

23 election of producer nominees sits on the Board at

24 the same time.
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1 ‘‘(7) REJECTION.—The Secretary may reject

2 any nominee selected by milk producers. If there are

3 insufficient nominations from which to appoint

4 members to the Board as a result of the Secretary

5 rejecting nominees selected by milk producers, milk

6 producers shall select additional nominees, as pro7 vided in this subsection.

8 ‘‘(8) TIME SCHEDULE.—The Secretary shall

9 conduct the regional elections of producer nominees

10 for appointment to the initial Board and appoint all

11 the initial members to the Board no later than Sep12 tember 1, 1993. Thereafter, whenever a seat be13 comes vacant for any reason, the Secretary, as soon

14 as practicable, shall conduct an election (if the va15 cant seat is a producer seat) and make an appoint16 ment of a person to fill the vacant seat.

17 ‘‘(9) TERMS OF MEMBERS.—Each member of

18 the Board shall serve for a three-year term, subject

19 to termination of the Board by June 30, 1999, ex20 cept that terms shall be staggered, as follows:

21 ‘‘(A) 4 of the producer members and 2 of

22 the non-producer members appointed by the

23 Secretary to the initial Board shall have a 1-

24 year term;
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1 ‘‘(B) 4 of the producer members and 2 of

2 the non-producer members appointed by the

3 Secretary to the initial Board shall have a 2-

4 year term; and

5 ‘‘(C) 4 of the producer members and 2 of

6 the non-producer members appointed by the

7 Secretary shall have a full 3-year term.

8 ‘‘(10) OPERATIONS COMMITTEE.—The Board

9 may establish an Operations Committee for con10 sultation and advice, consisting of persons not sit11 ting on the Board who as a group are suitably quali12 fied, either in experience or knowledge, in the var13 ious aspects of the dairy industry, from research and

14 production to export marketing. The Operations

15 Committee shall have no right to cast votes in any

16 matter voted on by the Board or the Board’s mem17 ber committees, nor shall it have the power to per18 form any of the functions of the Board under this

19 title.

20 ‘‘(11) CONFLICT RULES.—The members of the

21 Board shall be subject to such conflict of interest

22 rules as determined appropriate by the Secretary.

23 ‘‘(12) REIMBURSEMENT FOR EXPENSES.—

24 Members of the Board and the Operating Committee

25 shall serve without pay, but shall be allowed reim-
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1 bursement for expenses incurred in their service on

2 the Board or Committee, including reasonable travel

3 costs and out-of-pocket expenses when required to be

4 away from their home or place of business in the

5 service of the Board or Committee.

6 ‘‘(13) REMOVAL FOR CAUSE.—The Secretary

7 may remove any member of the Board for good

8 cause shown.

9 ‘‘(14) TERMINATION OF THE BOARD.—The

10 Board shall terminate at such date—not later than

11 June 30, 1999—agreed on by the Secretary and the

12 Board, unless extended by later enactment of Con13 gress.

14 ‘‘(c) BOARD PROCEDURES.—

15 ‘‘(1) MEETINGS OF THE BOARD.—

16 ‘‘(A) FIRST MEETING.—Within 2 weeks

17 after the Secretary has appointed a quorum to

18 the initial Dairy Stabilization Board, the Board

19 shall convene for its initial meeting and elect of20 ficers and adopt written bylaws and rules of

21 procedure to govern its meetings.

22 ‘‘(B) SUBSEQUENT MEETINGS.—Following

23 the initial meeting, the Board shall meet at the

24 call of the chair or as requested by the Sec25 retary, but at least once every 3 months.
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1 ‘‘(2) QUORUM.—A quorum of the Board shall

2 be 10 persons.

3 ‘‘(3) NOTICE TO SECRETARY; EX OFFICIO REP4 RESENTATION.—The Board shall notify the Sec5 retary in advance of each meeting of the Board. The

6 Secretary, or a representative of the Secretary, shall

7 attend each meeting as a non-voting ex officio mem8 ber of the Board.

9 ‘‘(d) DUTIES OF THE BOARD.—The Dairy Stabiliza10 tion Board shall have the duties to—

11 ‘‘(1) prepare annually, for each of the 1994

12 through 1998 calendar years, a Dairy Stabilization

13 Plan for that year and, as necessary, establish a per

14 hundredweight rate of deductions from producer rev15 enues for such year under section 204(h)(2) to cover

16 the costs of removals of surplus dairy products and

17 other activities of the Board under the Plan, and

18 submit both to the Secretary in advance for ap19 proval;

20 ‘‘(2) before the beginning of the second, third,

21 and fourth quarter of each calendar year in which

22 deductions under section 204(h)(2) are in effect,

23 make adjustments in the rate of deductions for such

24 year as necessary to reflect changes in anticipated

25 costs under the Plan for such year based on revi-
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1 sions in the estimate of net Commodity Credit Cor2 poration removals of dairy products for the year,

3 and submit any such adjustment to the Secretary in

4 advance for approval;

5 ‘‘(3) prepare and submit to the Secretary in ad6 vance for approval the Board’s proposed budget for

7 each calendar year it is in operation;

8 ‘‘(4) implement each annual Dairy Stabilization

9 Plan and approved budget, and coordinate activities

10 under the Plan with the programs of the Depart11 ment of Agriculture;

12 ‘‘(5) evaluate results under each Dairy Sta13 bilization Plan and report on the evaluations to the

14 Secretary, and provide a copy of each such report to

15 the Senate Committee on Agriculture, Nutrition, and

16 Forestry and the House Committee on Agriculture;

17 ‘‘(6) with respect to the estimate of the value

18 and volume of Commodity Credit Corporation milk

19 and milk product purchases made by the Secretary

20 by November 20 under section 204(f), in cooperation

21 with the Secretary, make monthly revisions of such

22 estimate for each month of the year to which the es23 timate applies;
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1 ‘‘(7) manage funds deposited into the Dairy

2 Stabilization Fund, as provided in section 240(j);

3 and

4 ‘‘(8) establish the refund market adjustment

5 factor for each year as provided for in section

6 204(i)(2).

7 ‘‘(e) POWERS OF THE BOARD—

8 ‘‘(1) GENERAL POWERS.—The Dairy Stabiliza9 tion Board may—

10 ‘‘(A) adopt bylaws and issue rules and reg11 ulations governing the manner in which its

12 business may be conducted and the powers vest13 ed in it may be exercised;

14 ‘‘(B) sue and be sued, complain and de15 fend, in any court of law or equity, State or

16 Federal. All suits of a civil nature at common

17 law or in equity to which the Board shall be a

18 party shall be deemed to arise under the laws

19 of the United States, and the United States dis20 trict courts shall have original jurisdiction

21 thereof, without regard to the amount in con22 troversy, and the Board, in any capacity, with23 out bond or security, may remove any such ac24 tion, suit, or proceeding from a State court to

25 the United States district court for the district
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1 or division embracing the place where the same

2 is pending by following any procedure for re3 moval then in effect;

4 ‘‘(C) incur and pay for administrative and

5 other expenses under this title;

6 ‘‘(D) appoint staff, define their duties, and

7 fix and provide their compensation;

8 ‘‘(E) enter into contracts and agreements

9 as necessary in the conduct of its business;

10 ‘‘(F) contract for the use, in accordance

11 with the usual customs of trade and commerce,

12 of plants and facilities for the physical han13 dling, storage, processing, servicing, and trans14 portation of dairy products subject to its con15 trol; and

16 ‘‘(G) make final and conclusive settlement

17 and adjustment of any claims by or against the

18 Board or its accounts; and

19 ‘‘(H) use and expend monies in the Dairy

20 Stabilization Fund for purposes authorized

21 under this Act; and

22 ‘‘(I) exercise such other powers incidental

23 to its performance of functions required or au24 thorized for it under this title.
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1 ‘‘(2) SPECIFIC POWERS.—To meet its duties

2 under this title and implement Dairy Stabilization

3 Plan, the Dairy Stabilization Board may use its gen4 eral powers to—

5 ‘‘(A) remove, or cause the removal, of

6 dairy products from the domestic commercial

7 market or accept donated stocks from the Com8 modity Credit Corporation, and maintain such

9 products in inventory,

10 ‘‘(B) dispose, or cause the disposal, of

11 dairy products it has removed from the market

12 or received from the Commodity Credit Cor13 poration through outlets that are not in com14 petition with United States commercial mar15 kets, primarily through export sales;

16 ‘‘(C) transfer to the Commodity Credit

17 Corporation, at the Corporation’s announced

18 price, dairy products it has removed from the

19 market, as necessary for Board or Corporation

20 stock management purposes, and the regula21 tions of the Corporation shall so provide;

22 ‘‘(D) cause the export of dairy cattle; and

23 ‘‘(E) conduct other activities related to

24 market development and product disposal speci25 fied in section 204B(d), as necessary to meet
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1 its responsibilities under this title and Dairy

2 Stabilization Plans.

3 ‘‘(f) BUDGETS OF THE BOARD.—

4 ‘‘(1) PREPARATION.—Not later than October

5 31 of each of the calendar years 1993 through 1997,

6 the Dairy Stabilization Board shall prepare and sub7 mit to the Secretary for approval a budget of its an8 ticipated expenses and disbursements in the upcom9 ing calendar year.

10 ‘‘(2) ITEMS IN EACH BUDGET.—

11 ‘‘(A) IN GENERAL.—Each such budget

12 shall provide—

13 ‘‘(i) a detailed account of the Board’s

14 anticipated administrative expenses and

15 other outlays to be incurred in implement16 ing the Dairy Stabilization Plan for the

17 upcoming year;

18 ‘‘(ii) an estimate of expected revenues

19 to the Board during the upcoming year, to

20 which the budget of expenditures shall be

21 reconciled;

22 ‘‘(iii) an estimate of the anticipated

23 outlays to be incurred for administrative

24 expenses for the upcoming year;
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1 ‘‘(iv) an analysis of anticipated ex2 penditures for administrative expenses,

3 showing how they are being kept to the

4 minimum necessary to operate the pro5 grams of the Board; and

6 ‘‘(v) a description of the anticipated

7 contracts during such year for the removal

8 and disposition of surplus dairy products.

9 ‘‘(B) ADDITIONAL ITEMS.—The budget

10 prepared for calendar year 1994 shall include

11 an additional amount to reimburse the Com12 modity Credit Corporation for expenditures to

13 cover expenses of the Board prior to January 1,

14 1994; and the budget prepared for calendar

15 year 1998 shall include an additional amount to

16 cover the Board’s administrative expenses to be

17 incurred in 1999 in wrapping up its business.

18 ‘‘(3) SUBMISSION WITH PLAN; APPROVAL RE19 QUIRED.—Each budget prepared under this sub20 section shall be submitted to the Secretary with the

21 Dairy Stabilization Plan for the year involved; and

22 no budget may be implemented prior to its approval

23 by the Secretary. Each such budget shall be re24 viewed for approval by the Secretary under the pro-
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1 cedures provided for review and approval of Dairy

2 Stabilization Plans under section 204B(b)(2).

3 ‘‘(g) ADMINISTRATION; CONTRACTING.—

4 ‘‘(1) LIMITATION ON ADMINISTRATIVE EX5 PENSES.—For any calendar year in which the Sec6 retary estimates under section 204(f) that the level

7 of Commodity Credit Corporation purchases of milk

8 and the products of milk will exceed 5,000,000,000

9 pounds (milk equivalent, total milk solids basis), the

10 Board may not budget for or incur administrative

11 expenses (including the cost of paying employees of

12 the Board) in the year that exceed the lesser of—

13 ‘‘(A) $2,000,000, or

14 ‘‘(B) 5 percent of the annual budget of the

15 Board for the year.

16 ‘‘(2) CONTRACTS FOR SERVICES.—

17 ‘‘(A) IN GENERAL.—To ensure efficient

18 use of funds available to the Dairy Stabilization

19 Board under this title and avoid duplication of

20 efforts, whenever possible, the Board shall enter

21 into contracts and agreements for the removal

22 of dairy products from the market, the disposi23 tion of such products, and such other

24 nonadministrative activities of the Board, and
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1 for the payment of the cost thereof with funds

2 available to the Board under this title.

3 ‘‘(B) COVERAGE OF RULE.—The tasks

4 that may be included under a contract or agree5 ment include, but are not limited to, offers to

6 buy, purchases of dairy products, storage and

7 delivery of dairy products, management of dairy

8 product inventories, and statistical collection

9 and analysis.

10 ‘‘(C) REQUIREMENTS.—Any contract or

11 agreement of the Board under this paragraph

12 shall be subject to the approval of the Sec13 retary; and the contracting or agreeing party

14 shall keep accurate records of all its trans15 actions, account for funds received and ex16 pended, make periodic reports to the Board of

17 activities conducted, and make such other re18 ports as the Board or the Secretary may re19 quire.

20 ‘‘(3) DIRECT SALES BY OTHERS.—The Board

21 shall ensure the actual export marketing and sale of

22 dairy products it has removed from the market are

23 done by dairy cooperatives and other persons en24 gaged in international marketing, rather than by it25 self or its agents.
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1 ‘‘(h) FUNDING FOR THE BOARD; EXPENDITURES.—

2 ‘‘(1) IN GENERAL.—

3 ‘‘(A) DAIRY STABILIZATION FUND.—Mon4 ies in the Dairy Stabilization Fund established

5 under section 204(k) shall be available to the

6 Dairy Stabilization Board for expenditure, ef7 fective January 1, 1994, as provided in this

8 subsection.

9 ‘‘(B) CCC FUNDS.—Prior to January 1,

10 1994, the activities of the Board in starting up

11 operation and preparing the initial Dairy Sta12 bilization Plan shall be paid with funds of the

13 Commodity Credit Corporation. The Corpora14 tion shall be reimbursed by the Board for such

15 payments from monies placed in the Dairy Sta16 bilization Fund during 1994.

17 ‘‘(2) LIMITATION.—Monies in the Dairy Sta18 bilization Fund may be expended by the Board only

19 to—

20 ‘‘(A) cover budgeted activities of the Board

21 under a budget approved by the Secretary

22 under section 204B(b)(2);

23 ‘‘(B) transfer to the Commodity Credit

24 Corporation general account reimbursements

25 provided for in paragraph (1)(B), and as nec-
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1 essary monies to provide for refunds to produc2 ers of market stabilization deductions from pro3 ducer revenues, as provided in section 204(i);

4 and

5 ‘‘(C) provide for rebates to milk producers

6 of excess monies remaining in the Fund when

7 the Board is terminated, as provided in sub8 section (k).

9 ‘‘(3) CARRYOVER OF FUNDS.—To allow for con10 tinuity of activities of the Board from year to year,

11 monies in the Dairy Stabilization Fund shall be

12 available to the Board without fiscal or calendar

13 year limitation, except that, in any year into which

14 monies are carried over, the amount of any market

15 stabilization deduction from producer revenues for

16 the year under section 204(h)(2) shall be reduced by

17 the amount of the carryover.

18 ‘‘(j) BOOKS AND RECORDS.—

19 ‘‘(1) IN GENERAL.—The Dairy Stabilization

20 Board shall—

21 ‘‘(A) maintain such books and records

22 (which shall be available to the Secretary for in23 spection and audit) as the Secretary may pre24 scribe;
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1 ‘‘(B) prepare and submit to the Secretary,

2 from time to time, such reports as the Sec3 retary may prescribe; and

4 ‘‘(C) account for the receipt and disburse5 ment of all funds entrusted to the Board.

6 ‘‘(2) AUDITS.—The Board shall cause its books

7 and records to be audited by an independent auditor

8 at the end of each fiscal year, and a report of such

9 audit to be submitted to the Secretary.

10 ‘‘(k) FACA NOT APPLICABLE.—The Federal Advi11 sory Committee Act (5 U.S.C. App. 2) shall not apply to

12 the Board, or the operations of the Board.

13 ‘‘(l) REBATES ON TERMINATION OF BOARD.—

14 ‘‘(1) IN GENERAL.—At the time that the Board

15 terminates and winds up its affairs, any funds re16 maining in the Dairy Stabilization Fund shall be re17 bated to milk producers who have been subject to

18 market stabilization deductions under section

19 204(h)(2), unless the administrative costs of distrib20 uting any such rebate will exceed the amount re21 bated (in which case, the amount shall revert to the

22 Commodity Credit Corporation general account). Re23 bates shall be made pro rata, based on the cumu24 lative amount deducted from the revenues of each

25 milk producer under section 204(h)(2).
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1 ‘‘(2) REBATE NOT DEEMED A GOVERNMENT

2 PAYMENT.—Any rebate under this paragraph shall

3 not be considered as any type of price support or

4 payment for purposes of section 1211 or 1212 of the

5 Food Security Act of 1985 (16 U.S.C. 3811 and

6 3821).

7 ‘‘SEC. 204B. DAIRY STABILIZATION PLANS.

8 ‘‘(a) REQUIREMENTS.—

9 ‘‘(1) IN GENERAL.—The Dairy Stabilization

10 Board shall prepare and implement a Dairy Sta11 bilization Plan for each of the calendar years 1994

12 through 1998, as provided in this section, that shall

13 provide a business plan of operation for the Dairy

14 Stabilization Board for the year, and shall include

15 the following elements:

16 ‘‘(A) GENERALLY.—The Plan for any year

17 may include such of the activities described in

18 subsection (d) or comparable activities within

19 the authority of the Board that are determined

20 by the Board, to be appropriate for such year.

21 ‘‘(B) WHEN ESTIMATED CCC PURCHASES

22 EXCEED 5,000,000,000 POUNDS.—For any year

23 in which the Secretary estimates, by November

24 20 of the preceding year, that Commodity Cred25 it Corporation purchases of milk and the prod-
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1 ucts of milk will exceed 5,000,000,000 pounds

2 (milk equivalent, total milk solids basis), the

3 Plan shall provide for—

4 ‘‘(i) timely market intervention meas5 ures by the Board to remove from the

6 market an amount of dairy products that

7 is equivalent to the portion of the esti8 mated Commodity Credit Corporation pur9 chases in excess of 5,000,000,000 pounds

10 but not in excess of 7,000,000,000 pounds;

11 and

12 ‘‘(ii) other appropriate measures by

13 the Dairy Stabilization Board to stabilize

14 milk and dairy product prices, and to im15 prove farm income during such year.

16 ‘‘(C) WHEN ESTIMATED CCC PURCHASES

17 EXCEED 7,000,000,000 POUNDS.—For any year

18 in which the Secretary estimates, by November

19 20 of the preceding year, that Commodity Cred20 it Corporation purchases of milk and the prod21 ucts of milk will exceed 7,000,000,000 pounds

22 (milk equivalent, total milk solids basis), the

23 Plan shall provide for such supplemental mar24 ket intervention measures that the Board

25 agrees with the Commodity Credit Corporation
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1 that it should undertake if approved by the Sec2 retary, regarding those anticipated purchases in

3 excess of 7,000,000,000 pounds, using for such

4 purposes monies transferred to the Dairy Sta5 bilization Fund by the Commodity Credit Cor6 poration from the collected reductions in price

7 under section 204(g).

8 ‘‘(D) CONTINUATION AND CARRYOVER.—

9 For the second and succeeding Plans, to the ex10 tent necessary or appropriate, the Plan shall

11 provide for the continuation of activities initi12 ated in the preceding year and the carryover of

13 funds made available for the preceding year but

14 not expended and the payment of obligations in15 curred in the preceding year but not paid.

16 ‘‘(D) 1998 PLAN.—The Plan for calendar

17 year 1998 shall cover activities and expendi18 tures of the Board in 1999 to wind up the busi19 ness of the Board.

20 ‘‘(2) RATE OF DEDUCTION.—For any year in

21 which the Secretary estimates, by November 20 of

22 the preceding year, that Commodity Credit Corpora23 tion purchases of milk and the products of milk will

24 exceed 5,000,000,000 pounds (milk equivalent, total

25 milk solids basis), the Plan for such year also shall
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1 establish the rate, per hundredweight, of the market

2 stabilization deduction from producer revenues

3 under section 204(h)(2) at a level sufficient to cover

4 the budgeted outlays of the Board (other than for

5 administrative costs) for its activities under the plan

6 during such year, net of any monies otherwise in the

7 Daily Stabilization Fund or otherwise allocated to

8 the Board for such year.

9 ‘‘(b) SCHEDULE FOR DEVELOPMENT OF PLAN.—

10 ‘‘(1) PREPARATION AND SUBMITTAL.—Each

11 Dairy Stabilization Plan for a year (A) shall be pre12 pared, and the rate of the market stabilization de13 duction determined (if necessary of such year), dur14 ing the period after the preliminary estimate of net

15 Commodity Credit Corporation purchases of milk

16 and milk products for a year is issued on August 1

17 of the preceding year, and (B) shall be submitted to

18 the Secretary for approval not later than October 31

19 preceding the year the plan addresses.

20 ‘‘(2) REVIEW BY SECRETARY.—The Secretary

21 shall review each proposed Plan and rate of the mar22 ket stabilization deduction (if necessary for such

23 year), and either approve or disapprove the Plan and

24 rate, within 20 days after receiving them. If the Sec-
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1 retary disapproves a proposed Plan or the rate of

2 deduction, the Secretary shall—

3 ‘‘(A) specify the reasons for disapproval,

4 and give the Board an additional 10 days to

5 modify the Plan or deduction rate to meet those

6 concerns and resubmit it for the Secretary’s ap7 proval; or

8 ‘‘(B) with respect to a disapproved Plan,

9 draft an alternative play or program for imple10 mentation by the Board that would achieve the

11 same goals as the Plan proposed by the Board

12 at the same or lower cost to milk producers.

13 ‘‘(c) QUARTERLY REVISIONS.—

14 ‘‘(1) IN GENERAL.—The Dairy Stabilization

15 Plan for any year shall be updated and revised at

16 the beginning of each of the second, third, and

17 fourth quarters of the year, or at such other times

18 specified by the Secretary or determined necessary

19 by the Board. Any such revision may not go into ef20 fect until approved by the Secretary.

21 ‘‘(2) REVISION OF DEDUCTION RATE.—Any re22 vision of a Plan at the beginning of the second,

23 third, or fourth quarter of a year, as provided in

24 paragraph (1), may include a revision in the rate,

25 per hundredweight, of the market stabilization de-
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1 duction from producer revenues under section

2 204(h)(2) for such year, as necessary to reflect

3 changes in anticipated costs under the Plan for such

4 year based on revisions in the estimate of Commu5 nity Credit Corporation purchases of milk and the

6 products of milk during such year. Any such revision

7 may not go into effect until approved by the Sec8 retary.

9 ‘‘(d) ACTIVITIES OF THE BOARD IN IMPLEMENTING

10 A PLAN.—

11 ‘‘(1) WHEN ESTIMATED CCC PURCHASES EX12 CEED 5,000,000,000 POUNDS.—The Dairy Stabiliza13 tion Board, in implementing the Dairy Stabilization

14 Plan for any year in which the Secretary estimates,

15 by November 20 of the preceding year, that Com16 modity Credit Corporation purchases of milk and the

17 products of milk will exceed 5,000,000,000 pounds

18 (milk equivalent, total milk solids basis), the Board

19 may undertake the following activities as authorized

20 under the Plan:

21 ‘‘(A) To acquire, or otherwise cause the re22 moval of, dairy products from domestic com23 mercial markets on the basis of bids by sellers

24 in response to initiations for bids announced by

25 the Board.
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1 ‘‘(B) To acquire, or otherwise cause the re2 moval of, dairy products from domestic com3 mercial markets at announced prices during pe4 riods announced by the Board.

5 ‘‘(C) To implement a program to cause the

6 export of dairy products the Board has removed

7 from the market, in coordination with the ac8 tivities of the Foreign Agricultural Service in

9 implementing the Dairy Export Incentive Pro10 gram under section 153 of the Food Security

11 Act of 1985 (15 U.S.C. 713a–14) and subject

12 to the oversight of the Foreign Agricultural

13 Service. Under the program, the Board may

14 cause the export of dairy products with the as15 sistance of export bonuses provided by the

16 Board, and determined on the basis of bids by

17 exporters in response to invitations for bids an18 nounced by the Board. In implementing such a

19 program, the Board shall enter into an agree20 ment with the General Sales Manager to seek

21 the Manager’s prior approval of any export

22 transactions under the program. This program

23 shall not be implemented as a replacement for

24 the Dairy Export Incentive Program, but as a

25 supplement to it.
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1 ‘‘(D) To implement a program to cause the

2 export of dairy cattle, subject to the oversight

3 of the Foreign Agricultural Service. Under the

4 program, the Board may cause the export of

5 dairy cattle with the assistance of export bo6 nuses provided by the Board, and determined

7 on the basis of bids by exporters in response to

8 invitations for bids announced by the Board.

9 ‘‘(E) To effect the sale abroad, at world

10 market prices, of dairy products removed from

11 the market by the Board.

12 ‘‘(F) To effect the domestic sale for unre13 stricted use of dairy products removed from the

14 market by the Board at market prices, but in

15 no case less than 110 percent of the Commodity

16 Credit Corporation announced purchase prices

17 for the products.

18 ‘‘(G) To donate, through the Secretary,

19 products the Board has removed from the mar20 ket to domestic and international feeding and

21 aid programs, as needed for emergency or dis22 aster assistance.

23 ‘‘(H) To transfer dairy products it has re24 moved from the market to the Commodity

25 Credit Corporation at the Corporation’s an-
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1 nounced purchase price (less an amount, deter2 mined by the Secretary, to represent the aver3 age level of bonus paid to exporters under the

4 Dairy Export Incentive Program), as necessary

5 to manage Corporation or Board inventories.

6 ‘‘(2) CCC OPERATIONS.—Notwithstanding any

7 other provision of law, the Commodity Credit Cor8 poration shall accept the transfer of dairy products

9 from the Board as provided in paragraph (1)(H),

10 and at any time may transfer its excess inventories

11 of dairy products to the control of the Board, as

12 necessary to manage Corporation or Board stocks or

13 as provided for in paragraph (4)(A).

14 ‘‘(3) WHEN ESTIMATED CCC PURCHASES ARE

15 5,000,000,000 POUNDS OR LESS.—The Dairy Sta16 bilization Board, in implementing the Dairy Sta17 bilization Plan for any year in which the Secretary

18 estimates, by November 20 of the preceding year,

19 that Commodity Credit Corporation purchases of

20 milk and the products of milk will be 5,000,000,000

21 pounds or less (milk equivalent, total milk solids

22 basis) the Board may undertake the following activi23 ties as authorized under the plan:

24 ‘‘(A) To dispose of carryover stocks of

25 dairy products it had removed from the market
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1 in a previous year, in any manner as specified

2 in paragraph (1).

3 ‘‘(B) To cause the export of dairy heifers

4 with the assistance of export bonuses provided

5 by the Board on the basis of bids by exporters

6 in response to invitations for bids announced by

7 the Board.

8 ‘‘(4) IN GENERAL.—The Dairy Stabilization

9 Board, in implementing the Dairy Stabilization Plan

10 for any year, may undertake the following activities

11 as authorized under the Plan:

12 ‘‘(A) To accept stocks of dairy products

13 transferred from the Commodity Credit Cor14 poration for use in projects under the Plan.

15 ‘‘(B) To provide funding to the Foreign

16 Agricultural Service cooperator organization for

17 dairy products to implement export market de18 velopment projects.

19 ‘‘(C) To work with the Commodity Credit

20 Corporation, the Foreign Agricultural Service,

21 marketing organizations, and other entities in

22 the dairy industry in facilitating export sales of

23 dairy products.

24 ‘‘(D) To work with the Commodity Credit

25 Corporation and, through the Secretary, hu-
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1 manitarian relief and development organizations

2 in providing dairy products for emergency relief

3 and development programs.

4 ‘‘(E) To develop surplus disposal opportu5 nities for use in years in which removals of sur6 plus dairy products under the Dairy Stabiliza7 tion Plans will be needed.

8 ‘‘(5) CONTRACTS AND AGREEMENTS.—In order

9 to efficiently manage stock acquisition and disposi10 tion under the Dairy Stabilization Plans and to

11 avoid excessive overhead and unnecessary duplica12 tion in any area of the Board’s operations, the

13 Board shall contract or enter agreements, as author14 ized in section 204A, for the performance of any or

15 all of the functions described in paragraphs (1), (3),

16 and (4) or similar functions included in Dairy Sta17 bilization Plans and approved by the Secretary.

18 ‘‘(6) LIMITS ON MARKET INTERVENTION.—The

19 Board shall ensure that any activity under a Dairy

20 Stabilization Plan does not interfere with normal

21 commercial inventory build-ups of dairy products

22 that are necessary to ensure adequate supplies on a

23 year-round basis. In this regard, the criterion the

24 Board shall use in planning activities under any

25 Plan is that intervention by the Board in the market
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1 should promote moderate, regulated market adjust2 ments and prevent steep or contraseasonal declines

3 in the prices for dairy products.’’.

4 SEC. 5. REVISIONS OF AUTHORITY FOR ‘‘EXCESS PUR5 CHASES’’ REDUCTIONS IN PRICE.

6 Effective January 1, 1994, subsection (g) of section

7 204 of the Agricultural Act of 1949 (7. U.S.C. 1446e)

8 is amended by adding at the end thereof the following:

9 ‘‘(3) TARGETED REDUCTIONS.—

10 ‘‘(A) IN GENERAL.—In any year in which

11 a reduction in price under this subsection is in

12 effect, if during any two consecutive months of

13 such year, the United States average manufac14 turing grade milk price, as reported by the Sec15 retary, does not exceed the Federal support

16 price for milk by more than 50 cents per hun17 dredweight, beginning the following month the

18 reduction in price shall cease being collected on

19 a uniform basis on all milk produced in the 48

20 contiguous States and marketed by producers

21 for commercial use, and shall be collected from

22 each milk producer in the contiguous 48 States

23 only on the quantity of milk marketed during

24 each month by the producer in excess of the

25 producer’s monthly base for milk marketings.
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1 ‘‘(B) RATE OF REDUCTION.—The amount

2 of the reduction in the price received by produc3 ers on such over-base milk marketings shall be

4 an amount per hundredweight determined by

5 the Secretary to be sufficient, when applied to

6 the amount of all such over-base milk market7 ings during the remainder of the year, as esti8 mated by the Secretary, to result in total reduc9 tions during the remainder of the year equal to

10 the total amounts of reductions in price that

11 would otherwise be made on a uniform basis on

12 all milk marketings under the procedures pro13 vided in paragraph (2).

14 ‘‘(C) BASES.—For purposes of determin15 ing, for each milk producer, whether the pro16 ducer is subject to the targeted reduction in

17 price under this paragraph, an annual base

18 made up of 12 monthly bases will be established

19 by the Secretary for each dairy farm reflecting

20 the farm’s milk marketings during the preced21 ing year. New milk producers will be assigned

22 a base equal to 75 percent of their milk market23 ings during each month of the year the reduc24 tion is in effect.
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1 ‘‘(D) MAXIMUM TARGETED REDUC2 TIONS.—No milk producer shall be liable for a

3 targeted reduction in price under this para4 graph on more than 25 percent of the produc5 er’s marketings during any month targeted re6 ductions are in effect.

7 ‘‘(E) TERMINATION OF TARGETED REDUC8 TIONS.—If, after targeted reductions in price

9 are implemented during a year under this para10 graph the United States average manufacturing

11 grade milk price, as reported by the Secretary,

12 rises to exceed the support price for milk by

13 more than $1.50 per hundredweight during two

14 consecutive months of such year, involved, be15 ginning the following month, the targeted re16 duction in price will cease being collected, and

17 the reduction in price shall be made uniformly

18 on all milk produced in the 48 contiguous

19 States and marketed by producers for commer20 cial use in the amount provided for in para21 graph (2).

22 ‘‘(4) TERMINATION OF ALL REDUCTIONS.—Not23 withstanding any other provision of this subsection,

24 if at any time during a year in which reductions in

25 price are being made under this subsection, the Sec-
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1 retary, in consultation with the Dairy Stabilization

2 Board, projects (based on the monthly revised esti3 mates of Commodity Credit Corporation purchases

4 of milk and the products of milk made under sub5 section (f)(2)) that Corporation purchases of milk

6 and the products of milk during such year shall not

7 exceed 7,000,000,000 pounds (milk equivalent, total

8 milk solids basis), less such amounts of estimated

9 Corporation purchases covered by the Board’s Dairy

10 Stabilization Plan for that year, the reduction in

11 price under this subsection will cease being made for

12 the remainder of the year.

13 ‘‘(5) SPECIAL REFUNDS.—

14 ‘‘(A) IN GENERAL.—If, at the end of any

15 year in which reductions in price are made

16 under this subsection, it is determined by the

17 Secretary that actual Commodity Credit Cor18 poration purchases of milk and the products of

19 milk made under subsection (f)(2) that Cor20 poration purchases of milk and the products of

21 milk during that year did not exceed

22 7,000,000,000 pounds (milk equivalent, total

23 milk solids basis) less such amounts of esti24 mated Corporation purchases covered by the

25 Board’s Dairy Stabilization Plan for that year,
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1 the Secretary shall provide refunds of all the re2 ductions in price under this subsection made

3 during such year, other than reduction monies

4 transferred to the Board under an agreement

5 made under section 304B(a)(1)(C). The trans6 ferred amount not subject to the special refunds

7 shall be prorated among all producers eligible

8 for such refunds on the basis of the reductions

9 in price collected from such producers during

10 the year; and the prorated amount for each pro11 ducer shall be deducted from the amount of re12 fund otherwise due to the producer under this

13 paragraph.

14 ‘‘(B) REFUND NOT DEEMED A GOVERN15 MENT PAYMENT.—Any refund under this para16 graph shall not be considered as any type of

17 price support or payment for purposes of sec18 tion 1211 or 1212 of the Food Security Act of

19 1985 (16 U.S.C 3811 and 3821).’’.

20 SEC. 6. CONTINUATION OF DEFICIT REDUCTION ACTIVI21 TIES IN FISCAL YEARS AFTER 1995.

22 (1) IN GENERAL.—Section 204 of the Agricultural

23 Act of 1949 (7 U.S.C. 1446e) is amended by—

24 (A) amending the section heading to read as fol25 lows;
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1 ‘‘SEC. 204. MILK PRICE SUPPORT AND CERTAIN COLLEC2 TIONS FROM PRODUCERS IN CALENDAR

3 YEARS 1991 THROUGH 1998; MILK INVENTORY

4 MANAGEMENT REPORT.’’;

5 (B) in subsections (a), (b), (d)(1)(A), (d)(2)(A),

6 (d)(3), (g)(1), and (m) (as so redesignated by sec7 tion 3(b)(1)) striking ‘‘1995’’ each place it appears

8 and inserting in lieu thereof ‘‘1998’’; and

9 (C) in subsection (g)(2), striking ‘‘1994’’ and

10 inserting in lieu thereof ‘‘1997’’.

11 (2) TRANSFER TO MILITARY AND VETERANS HOS12 PITALS.—Subsections (a) and (b) of section 202 of the

13 Agricultural Act of 1949 (7 U.S.C. 1446e) are amended

14 by striking ‘‘1995’’ both places that date appears and in15 serting in lieu thereof ‘‘1998’’.

16 (3) FEDERAL MILK MARKETING ORDERS.—Section

17 101(b) of the Agriculture and Food Act of 1981 (7 U.S.C.

18 603c note) is amended by striking ‘‘1995’’ and inserting

19 in lieu thereof ‘‘1998’’.

20 (4) DAIRY INDEMNITY PROGRAM.—Section 3 of Pub21 lic Law 90–484 (7 U.S.C. 450l) is amended by striking

22 ‘‘1995’’ and inserting in lieu thereof ‘‘1998’’.

23 (5) FOOD SECURITY ACT OF 1985.—The Food Secu24 rity Act of 1985 is amended by—
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1 (A) in section 153(a) (15 U.S.C. 713a–14(a)),

2 striking out ‘‘1995’’ and inserting in lieu thereof

3 ‘‘1998’’; and

4 (B) in section 1163 (7 U.S.C. 1731 note),

5 striking ‘‘1995’’ each place that date appears and

6 inserting in lieu thereof ‘‘1998’’.

7 SEC. 7. ESTIMATES OF CCC PURCHASES.

8 Subsection (f) of section 204 of the Agricultural Act

9 of 1949 (7 U.S.C. 1446e) is amended to read as follows:

10 ‘‘(f) ESTIMATES OF CCC PURCHASES.—

11 ‘‘(1) IN GENERAL.—On August 1 and by No12 vember 20 of each of the calendar years 1991

13 through 1998, the Secretary shall notify the Com14 mittee on Agriculture of the House of Representa15 tives and the Committee on Agriculture, Nutrition,

16 and Forestry of the Senate regarding the value and

17 volume of milk and milk product purchases on a

18 milk equivalent, total milk solids basis, the Secretary

19 estimates that the Commodity Credit Corporation

20 will make during the upcoming calendar year, before

21 the effects from the implementation of the Dairy

22 Stabilization Plan for such year or from any reduc23 tion in price or deduction from producer revenues

24 under subsection (g) or (h), respectively, made dur25 ing such year are calculated.
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1 ‘‘(2) REVISIONS.—The estimates of Commodity

2 Credit Corporation purchases made under paragraph

3 (1) shall be revised monthly during the year by the

4 Dairy Stabilization Board, in cooperation with the

5 Secretary.

6 ‘‘(3) NET PURCHASES EQUIVALENT TO NET RE7 MOVALS.—As used in this section and section 204A,

8 the phrases ‘purchase of milk and the products of

9 milk’ and ‘purchases of milk’ and ‘purchases of milk

10 and the products of milk’ shall include all removals

11 of dairy products from the domestic market under

12 this section, either by direct purchase or by export

13 under the Dairy Export Incentive Program under

14 section 153 of the Food Security Act of 1985.’’.

15 SEC. 8. ALLOCATION OF PURCHASE PRICES FOR BUTTER

16 AND NONFAT DRY MILK.

17 (a) IN GENERAL.—Subsection (c)(3) of section 204

18 of the Agricultural Act of 1949 (7 U.S.C. 1446e) is

19 amended by—

20 (1) in the first sentence of subparagraph (A),

21 striking ‘‘The Secretary’’ and inserting in lieu there22 of ‘‘Subject to subparagraph (B), the Secretary’’;

23 (2) redesignating subparagraph (B) as subpara24 graph (C); and
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1 (3) inserting after subparagraph (A) the follow2 ing new subparagraph:

3 ‘‘(B) GUIDELINES.—In allocating the rate

4 of price support between the purchase prices of

5 butter and nonfat dry milk under this para6 graph, the Secretary may not—

7 ‘‘(i) offer to purchase butter for more

8 than $0.65 per pound; or

9 ‘‘(ii) offer to purchase nonfat dry milk

10 for less than $1.034 per pound.’’.

11 (b) APPLICATION OF AMENDMENTS.—The amend12 ments made by subsection (a) shall apply with respect to

13 purchases of butter and nonfat dry milk that are made

14 by the Secretary of Agriculture under section 204 of the

15 Agricultural Act of 1949 (7 U.S.C. 1446e) on or after the

16 date of the enactment of this Act.

17 SEC. 9. FEDERAL MILK ORDER SUPPLY BALANCING COST

18 SHARING PLAN.

19 Section 8c(5) of the Agricultural Adjustment Act (7

20 U.S.C. 608c(5)), reenacted with amendments by the Agri21 cultural Marketing Agreement Act of 1937, is amended

22 by adding at the end thereof the following new subpara23 graph:

24 ‘‘(M) Authorizing the market administrator to deduct

25 and set aside an amount when making the uniform milk
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1 price calculation each month, to be available to the market

2 administrator to—

3 ‘‘(i) reimburse handlers for additional costs in4 curred in obtaining supplemental milk supplies when

5 local supplies are insufficient for market needs;

6 ‘‘(ii) reimburse handlers for costs incurred in

7 disposing of milk that exceeds local market needs;

8 and

9 ‘‘(iii) pay a distant plant that makes a binding

10 commitment to supply supplemental milk to the

11 market when called upon by the market adminis12 trator.’’.

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