I
104TH CONGRESS
1ST SESSION
H. R. 2000
To amend the Agricultural Act of 1949 to provide for the establishment
of a multiple-tier price support program for milk to assist milk producers
to receive an adequate income from their dairy operations and to support
long-term conservation practices by milk producers, while assuring suffi-
cient low-cost dairy products for nutrition assistance programs.
IN THE HOUSE OF REPRESENTATIVES
JULY 10, 1995
Mr. SANDERS (for himself, Mr. MCHALE, Mr. HINCHEY, Mr. DELLUMS, and
Mr. FALEOMAVAEGA) introduced the following bill; which was referred to
the Committee on Agriculture
A BILL
To amend the Agricultural Act of 1949 to provide for the
establishment of a multiple-tier price support program
for milk to assist milk producers to receive an adequate
income from their dairy operations and to support long-
term conservation practices by milk producers, while as-
suring sufficient low-cost dairy products for nutrition
assistance programs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Dairy, Nutrition, and Conservation Act of 1995’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Producer referendum to recommend implementation of milk supply
management and nutrition assistance provisions.
Sec. 3. National Milk Marketing Board.
Sec. 4. Alternative milk price support and inventory management program.
Sec. 5. Monitoring activities of National Milk Marketing Board.
Sec. 6. Financial assistance for environmental conservation compliance by milk
producers.
Sec. 7. Producer export contracts.
SEC. 2. PRODUCER REFERENDUM TO RECOMMEND IMPLE-
MENTATION OF MILK SUPPLY MANAGEMENT
AND NUTRITION ASSISTANCE PROVISIONS.
(a) REFERENDUM.—Title II of the Agricultural Act
of 1949 (7 U.S.C. 1446 et seq.) is amended by inserting
after section 204 the following new section:
‘‘SEC. 204A. MILK PRODUCER REFERENDUM REGARDING
IMPLEMENTATION OF ALTERNATIVE MILK
PRICE SUPPORT AND INVENTORY MANAGE-
MENT PROGRAM.
‘‘(a) REFERENDUM.—Not later than 30 days after
the date of the enactment of the Dairy, Nutrition, and
Conservation Act of 1995, the Secretary shall conduct a
referendum to determine whether milk producers in the
48 contiguous States favor the implementation of the al-
ternative milk price support and inventory management
program under section 204C in lieu of applying the rate
of price support (and required adjustments) specified in
subsections (b) and (d) of section 204 and the excess pro-
duction price reduction specified in subsection (g) of such
section.
‘‘(b) ELIGIBLE VOTERS.—The Secretary shall con-
duct the referendum only among individual milk producers
in the 48 contiguous States who have been producing milk
during a representative period, as determined by the Sec-
retary. The Secretary shall maintain a list of eligible vot-
ers and make it available upon request. Only individual
producers may cast ballots in the referendum. An organi-
zation or other person representing milk producers, in-
cluding a general farm organization, may not cast ballots
in the referendum on behalf of milk producers.
‘‘(c) CASTING BALLOTS.—The Secretary shall estab-
lish the methods by which ballots may be cast in the ref-
erendum, except that the referendum shall be conducted
by secret ballot and bloc voting shall not be permitted.
Such methods shall include casting ballots by mail (subject
to appropriate safeguards) and in person with a represent-
ative of the county or other office of the Consolidated
Farm Service Agency.
‘‘(d) IMPLEMENTATION REQUIRED.—If the Secretary
determines that a simple majority of the milk producers
voting in the referendum favor the implementation of the
alternative milk price support and inventory management
program under section 204C, the Secretary (acting
through the National Milk Marketing Board established
by section 204B) shall carry out the provisions of such
section, beginning with the first calendar year that begins
after the date on which the referendum is completed. Sub-
sections (b), (d), and (g) of section 204 shall not apply
during and after that calendar year.’’.
(b) CONFORMING AMENDMENTS.—Section 204 of the
Agricultural Act of 1949 (7 U.S.C. 1446e) is amended—
(1) in subsection (a), by inserting before the pe-
riod the following: ‘‘and section 204C, if that section
is in effect’’;
(2) in subsection (b), by striking ‘‘December
31, 1996,’’ and inserting ‘‘the date on which the al-
ternative milk price support and inventory manage-
ment program under section 204C takes effect or
December 31, 1996, whichever is earlier,’’;
(3) in subsection (d), by adding at the end the
following new paragraph:
‘‘(6) EFFECT OF IMPLEMENTATION OF SECTION
204C.—Upon the implementation of the alternative
milk price support and inventory management pro-
gram under section 204C, if required by section
204A(d), the support price adjustments required by
this subsection and the minimum price specified in
paragraph (4) shall not apply.’’; and
(4) in subsection (g), by adding at the end the
following new paragraph:
‘‘(4) EFFECT OF IMPLEMENTATION OF SECTION
204C.—Upon the implementation of the alternative
milk price support and inventory management pro-
gram under section 204C, if required by section
204A(d), the support price reduction required by
this subsection shall not apply.’’.
SEC. 3. NATIONAL MILK MARKETING BOARD.
Title II of the Agricultural Act of 1949 (7 U.S.C.
1446 et seq.) is amended by inserting after section 204A,
as added by section 2, the following new section:
‘‘SEC. 204B. NATIONAL MILK MARKETING BOARD.
‘‘(a) ELECTION OF BOARD REQUIRED.—
‘‘(1) ELECTION.—If the implementation of the
alternative milk price support and inventory man-
agement program under section 204C is approved in
the referendum required by section 204A, the Sec-
retary shall conduct an election for a National Milk
Marketing Board to assist the Secretary in estab-
lishing an adequate national supply and demand for
milk under the alternative milk price support and in-
ventory management program under section 204C.
To the extent practicable, the election shall be con-
ducted not later than 60 days before the date on
which the alternative milk price support and inven-
tory management program takes effect pursuant to
section 204A(d). If the election is not completed by
that date, or the Board is not capable of participat-
ing in the alternative milk price support and inven-
tory management program by that date, the Sec-
retary shall temporarily operate the program until
the Board determines that it is ready to assume its
duties under the program.
‘‘(2) BOARD DEFINED.—For purposes of this
section and section 204C, the term ‘Board’ means
the National Milk Marketing Board elected under
this section.
‘‘(b) MEMBERSHIP.—The Board shall consist of 23
members as follows:
‘‘(1) Fourteen milk producers, two from each
region specified in subsection (c), who shall be elect-
ed by milk producers.
‘‘(2) Seven representatives of consumers of milk
and milk products, one from each region specified in
subsection (c), who may not be milk producers, but
who shall be elected by milk producers.
‘‘(3) Two members appointed by the Secretary
from among individuals who have a demonstrable ex-
pertise in the area of milk production, processing, or
marketing.
‘‘(c) ELECTION PROCESS.—
‘‘(1) CONDUCT OF ELECTIONS.—The Secretary
shall conduct elections to select the members of the
Board specified in paragraphs (1) and (2) of sub-
section (b). A separate election shall be held in each
of the seven geographic regions specified in para-
graph (2) to elect the two milk producer members
and one consumer member from each region. The
initial elections may be conducted by the Secretary
in conjunction with the referendum required under
section 204A to permit the timely establishment of
the Board before the date on which the alternative
milk price support and inventory management pro-
gram would take effect under section 204C.
‘‘(2) BOARD REGIONS.—For purposes of elect-
ing members for the Board, the 48 contiguous
States shall be organized into seven geographic re-
gions as follows:
‘‘(A) California, Oregon, and Washington.
‘‘(B) Arizona, Arkansas, Colorado, Idaho,
Kansas, Montana, Nevada, New Mexico, Okla-
homa, Texas, Utah, and Wyoming.
‘‘(C) Iowa, Minnesota, Missouri, Nebraska,
North Dakota, and South Dakota.
‘‘(D) Wisconsin and Illinois.
‘‘(E) Alabama, Florida, Georgia, Ken-
tucky, Louisiana, Mississippi, North Carolina,
South Carolina, Tennessee, and Virginia.
‘‘(F) Delaware, Indiana, Maryland, Michi-
gan, New Jersey, Ohio, Pennsylvania, and West
Virginia.
‘‘(G) Connecticut, Maine, Massachusetts,
New Hampshire, New York, Rhode Island, and
Vermont.
‘‘(3) PROCEDURE FOR ELECTION.—As soon as
practicable after the date of the enactment of the
Dairy, Nutrition, and Conservation Act of 1995, the
Secretary shall conduct a broad-based publicity ef-
fort about the election process and solicit the names
of individuals to be included as candidates on the
ballot for the election in each region. The names of
proposed milk producer members may be submitted
by milk producers in the region or by organizations,
except that each nominee must be supported by at
least 25 individual milk producer signatures, and the
nominee must be a milk producer who has sold milk
in the past six months. The names of proposed
consumer members may be submitted by such per-
sons as the Secretary considers appropriate.
‘‘(4) CONFLICT OF INTEREST.—The Secretary
shall reject any nominee to an elected position who
is directly involved in the marketing of dairy prod-
ucts, since the election of such a nominee would cre-
ate a conflict of interest.
‘‘(5) VOTING BY PRODUCERS.—
‘‘(A) ELIGIBLE
VOTERS.—The Secretary
shall conduct an election in each region to de-
termine the members of the Board from that
region. The election shall be conducted only
among individual milk producers who have been
producing milk during any six months of the
previous year.
‘‘(B) PROHIBITION
ON
BLOC
VOTING.—
Only individual milk producers may cast ballots
in the election. An organization or other person
representing milk producers, including a gen-
eral farm organization, may not cast ballots in
the election on behalf of milk producers.
‘‘(C) CASTING
BALLOTS.—The Secretary
shall establish the methods by which ballots
may be cast. Such methods shall include casting
ballots by mail (subject to appropriate safe-
guards) and in person with a representative of
the county or other office of the Consolidated
Farm Service Agency.
‘‘(d) REGIONAL BOARD.—The three members elected
to the Board from each region shall also serve as a Re-
gional Milk Marketing Board for that region.
‘‘(e) MEETINGS OF THE BOARD.—
‘‘(1) FIRST MEETING.—Within two weeks after
the completion of the first election of Board mem-
bers under subsection (d) in each region, the Board
shall convene for its initial meeting and elect offi-
cers.
‘‘(2) OTHER MEETINGS.—The Board shall meet
at the call of the chair, or as requested by the Sec-
retary, but at least once every three months. The
public shall be notified of meetings one month prior
to each meeting.
‘‘(f) PROCEDURES OF THE BOARD.—
‘‘(1) QUORUM.—A quorum of the Board shall
be 12 members.
‘‘(2) RULES OF PROCEDURE AND BYLAWS.—
The Board shall adopt written bylaws and rules of
procedures to govern its operations.
‘‘(3) 
EX
OFFICIO
REPRESENTATION.—The
Board shall notify the Secretary in advance of each
meeting of the Board. The Secretary, or a represent-
ative of the Secretary, shall attend each meeting as
a nonvoting ex officio member of the Board.
‘‘(g) TERMS; COMPENSATION.—
‘‘(1) FULL TERM.—Each member of the Board
shall serve a four-year term, except that, for the ini-
tial Board, the member elected under subsection
(b)(1) from each region who received the fewer votes
shall serve a two-year term. The consumer members
shall be elected for a four-year term with an alter-
nate nonvoting consumer member. The Secretary
may remove for cause a member from the Board be-
fore the expiration of the term of the member.
‘‘(2) VACANCIES.—A vacancy on the Board
shall be filled by Secretarial appointment with the
term expiring at the next scheduled election. Re-
gional boards shall hold regional elections to fill va-
cancies.
‘‘(3) TERM LIMITS.—A member of the Board
may not serve on the Board for more than two con-
secutive full terms or a total of eight years, which-
ever occurs first. However, a member of the Board
subject to the preceding sentence shall become eligi-
ble for reelection or reappointment to the Board
upon the expiration of the four-year period begin-
ning on the date the member became ineligible for
the Board under such sentence.
‘‘(3) REIMBURSEMENT
FOR
EXPENSES.—The
members of the Board shall serve without compensa-
tion, but shall be reimbursed for reasonable expenses
incurred in performing their duties as members of
the Board, including a per diem.
‘‘(h) DUTIES.—
‘‘(1) PARTICIPATION IN DAIRY PROGRAM.—The
Board shall assist the Secretary in implementing,
administering, and operating the alternative milk
price support and inventory management program
under section 204C. The program shall remain
under the final authority and control of the Sec-
retary.
‘‘(2) MONITORING ACTUAL PRICE RECEIVED BY
PRODUCERS.—The Board may monitor actual prices
received by representative producers for milk pro-
duced in the 48 contiguous States and marketed for
domestic use in order to compare those prices with
the rate of price support for milk in effect for that
month and dairy prices at the processor and retail
levels. The Board shall publish and disseminate re-
ports regarding the results of this monitoring.
‘‘(i) POWERS.—The Board shall have such incidental
powers consistent with the requirements of this section
and section 204C as the Secretary may prescribe. Such
powers shall include the power to hire such staff and incur
such other administrative expenses as necessary to meet
the responsibilities of the Board.
‘‘(j) FUNDING AND BUDGETS.—
‘‘(1) 
BOARD
FUNDS; 
OPERATING
ASSESS-
MENT.—Consistent with the approved budget of the
Board, funds of the Commodity Credit Corporation
shall be available to pay for activities under this sec-
tion and section 204C. In order to ensure adequate
Commodity Credit Corporation funds to finance
Board activities, all producers of milk produced in
the continental United States and marketed for com-
mercial use shall be assessed a National Milk Mar-
keting Board operating fee, not to exceed 1.5 cents
per hundredweight of milk produced.
‘‘(2) BUDGETS AND OPERATING PLANS.—The
Board shall submit to the Secretary its proposed an-
nual budget and plan of operations for each calendar
year in which it operates. The budget and plan of
operations shall be subject to the approval of the
Secretary, and the Secretary may require such
changes in the budget or plan of operations as the
Secretary considers to be necessary. The Board may
not enter into any obligations or expend any funds
for a year, except as authorized in the budget for
the year approved by the Secretary.
‘‘(k) BOOKS AND RECORDS OF THE BOARD.—
‘‘(1) RECORDKEEPING
AND
ACCOUNTING
RE-
QUIREMENTS.—The Board shall—
‘‘(A) maintain such books and records,
which shall be available to the Secretary for in-
spection and audit, as the Secretary may pre-
scribe;
‘‘(B) prepare and submit to the Secretary
such reports as the Secretary may prescribe;
and
‘‘(C) account for the receipt and disburse-
ment of all funds entrusted to the Board.
‘‘(2) ANNUAL
INDEPENDENT
AUDITS.—The
Board shall cause its books and records to be au-
dited by an independent auditor at the end of each
calendar year and a report of such audit to be sub-
mitted to the Secretary. The Secretary shall make
such report available to the public upon request.
‘‘(3) ACCESS
BY
COMPTROLLER
GENERAL.—
The Comptroller General and the duly authorized
representatives of the Comptroller General shall
have access to and the right to examine all books,
documents, papers, records, or other recorded infor-
mation within the possession or control of the
Board.’’.
SEC. 4. ALTERNATIVE MILK PRICE SUPPORT AND INVEN-
TORY MANAGEMENT PROGRAM.
Title II of the Agricultural Act of 1949 (7 U.S.C.
1446 et seq.) is amended by inserting after section 204B,
as added by section 3, the following new section:
‘‘SEC. 204C. ALTERNATIVE MILK PRICE SUPPORT AND IN-
VENTORY MANAGEMENT PROGRAM.
‘‘(a) PRICE SUPPORT RATE TO REFLECT COST OF
PRODUCTION.—
‘‘(1) ANNUAL ADJUSTMENT.—The price of milk
shall be supported at a rate established by the Sec-
retary and adjusted annually to reflect the cost of
production for milk producers.
‘‘(2) DETERMINATION
OF
COST
OF
PRODUC-
TION.—To determine the cost of milk production on
a per hundredweight basis, the Secretary shall con-
sider the following:
‘‘(A) The latest cash cost of production (as
estimated by the Secretary), adjusted annually
by the wholesale price index.
‘‘(B) Domestic market/nutrition assistance
adjustments equal to 7.5 percent of adjusted
cash cost of production.
‘‘(C) Return on investment established at
8 percent of 70 percent of total farm assets (as
estimated by the Secretary) figured on a per
hundredweight basis.
‘‘(D) Cost of conservation and environ-
mental requirements and improvements as de-
termined by the Secretary on a per hundred-
weight basis, prorated over a 10-year period.
‘‘(3) BASIC FORMULA PRICE AND CLASS DIF-
FERENTIALS.—
‘‘(A) CALCULATION.—The basic formula
price shall be equal to the sum of subpara-
graphs (A), (B), (C) of paragraph (2). If the
sum of such subparagraphs is at least $14 per
hundredweight, then the Secretary may also
factor in the cost of conservation improvements
determined under subparagraph (D) of para-
graph (2).
‘‘(B) CLASS III.—Milk used for products of
milk listed as Class III products shall receive a
price not lower than the basic formula price per
hundredweight.
‘‘(C) CLASS II.—Milk used for products of
milk listed as Class II products shall receive a
price equal to Class III products plus a dif-
ferential of 30 cents per hundredweight.
‘‘(D) CLASS I.—Milk used for products of
milk listed as Class I products shall receive a
price equal to—
‘‘(i) the basic formula price; plus
‘‘(ii) an amount determined by a for-
mula based on a nine-hour day (milk relat-
ed labor) multiplied by 365 days and gross
hourly earnings MFR Labor (based on cal-
culations of the Bureau of Labor Statis-
tics) and divided by 1,500,000 pounds
(which is the equivalent of 15,000 hun-
dredweight, the estimated 1995 average
production per farm).
‘‘(E) APPLICATION.—The Class I price dif-
ferential determined under subparagraph (D)
shall be used in all Federal and State milk mar-
keting orders in operation in the 48 contiguous
States.
‘‘(b) MILK PRODUCTION AND CONSUMPTION ESTI-
MATE.—
‘‘(1) ANNUAL ESTIMATE.—Not later than No-
vember 20 of each calendar year, the Secretary, in
consultation with the Board, shall publish in the
Federal Register an estimate of—
‘‘(A) the amount of milk and the products
of milk in pounds (on a milk equivalent, total
milk solids basis) necessary to satisfy domestic
consumption, government domestic assistance
programs, of milk during the following calendar
year and maintain a reasonable milk reserve;
‘‘(B) the amount of milk and the products
of milk in pounds (on a milk equivalent, total
milk solids basis) to be produced in the 48 con-
tiguous States during the following year; and
‘‘(C) the amount of milk and the products
of milk in pounds (on a milk equivalent, total
milk solids basis) that the Commodity Credit
Corporation would purchase during the follow-
ing calendar year under this section or section
204.
‘‘(2) RULES FOR ESTIMATE.—When making an
estimate under this subsection, the Secretary shall—
‘‘(A) consider any existing inventory man-
agement programs to balance domestic supply
and demand; and
‘‘(B) consider conditions affecting import
projections of all dairy products.
‘‘(3) DEFINITION.—For purposes of this sec-
tion, the term ‘milk equivalent, total milk solids
basis’ has the meaning given that term in section
204(d)(5)(A).
‘‘(c) MILK MARKETING ALLOCATION FACTOR.—On
the basis of the estimates prepared under subsection
(b)(1) for a calendar year, the Board shall develop a milk
marketing allocation factor for the purpose of determining
milk producer bases for that year and submit to the Sec-
retary. The milk marketing allocation factor shall be equal
to the ratio of subparagraphs (A) and (C) of subsection
(b)(1) to subparagraph (B) of such subsection.
‘‘(d) MILK MARKETING HISTORIES.—
‘‘(1) PRODUCER
TO
INCLUDE
CERTAIN
MILK
PRODUCERS
USING
ANOTHER’S
LAND.—For pur-
poses of this section, the term ‘producer’ includes a
person who is actively engaged in a dairy operation
on a farm, as a full-time occupation (as evidenced by
the person’s contribution of active personal labor
and dairy cows to the operation), although the per-
son uses the land, equipment, or facilities of another
person.
‘‘(2) ONE- OR FIVE-YEAR AVERAGE.—Upon im-
plementation of the Dairy, Nutrition, and Conserva-
tion Act of 1995, the Secretary shall assign to each
producer of milk a milk marketing history equal (at
the producer’s option) to—
‘‘(A) the quantity of milk marketed by the
producer during the calendar year preceding the
enactment of such Act; or
‘‘(B) the average quantity of milk mar-
keted by the producer during the five calendar
years preceding the enactment of such Act, ex-
cluding the year in which the largest quantity
was marketed and the year in which the small-
est quantity was marketed.
‘‘(3) AMOUNTS
PRODUCED.—For purposes of
determining the milk marketing history of a pro-
ducer under paragraph (2), all milk marketed by the
producer from all farms of the producer for the cal-
endar years involved shall be counted, including milk
subject to a reduction of the price received under
this section or section 204.
‘‘(4) USE OF COUNTY COMMITTEES.—Subject
to paragraph (5), county and other committees es-
tablished under section 8(b)(5) of the Soil Conserva-
tion and Domestic Allotment Act (16 U.S.C.
590h(b)(5)) shall be responsible for local administra-
tion of the alternative milk price support and inven-
tory management programs.
‘‘(5) COUNTY DAIRY COMMITTEE.—
‘‘(A) ELECTION.—Milk producers in each
county shall elect a separate dairy committee
who are active milk producers. This committee
shall be responsible for decisions concerning
market history allocation and appeals. Counties
that have fewer than 50 active milk producers
shall join with other counties in order to com-
pose an adequate dairy committee. This com-
mittee shall serve milk producers in the com-
bined counties and adopt a single Consolidated
Farm Service Agency office to perform their
duties. Each committee shall consist of five
milk producers with a one-year term of office.
‘‘(B) COMPENSATION.—The members of a
dairy committee shall be entitled to per diem
and mileage reimbursement in the same manner
as committees referred to in paragraph (4), and
subject to the same hourly limitations.
‘‘(C) FUNDING.—The Board shall make
funds available to an appropriate official of the
Consolidated Farm Service Agency to finance
the cost of the dairy committees.
‘‘(6) NONTRANSFERABILITY; EXCEPTIONS.—A
producer’s marketing history may not be transferred
(by sale, lease, gift, devise, or other method) except
as follows:
‘‘(A) There is no restriction on the ability
of a producer who is an individual to transfer
the marketing history of the producer to an im-
mediate family member (such as the spouse,
parent, brother or sister, or child of the pro-
ducer or a person to whom the producer stands
in loco parentis) for use on the same farm.
‘‘(B) There is no restriction on the ability
of a producer to sell, lease, or otherwise trans-
fer the Class I base of the producer for a farm
in areas in which Class I bases have been estab-
lished.
‘‘(C) The relevant dairy committee shall
permit a producer to reestablish the marketing
history of a farm owned or leased by the pro-
ducer at another farm owned or leased by the
same producer.
‘‘(D) The relevant dairy committee may
approve the transfer of the marketing history of
a producer (for use on the same farm or an-
other farm) to prevent extreme hardship.
‘‘(E) Any producer with a marketing his-
tory shall be allowed to relocate the marketing
history to another location in the 48 contiguous
States upon notification of the dairy committee
for the new location.
‘‘(7) SET-ASIDE OF UNUSED MARKETING HIS-
TORY FOR DAIRY COMMITTEES.—Subject to transfer
options specified in paragraph (6), if a producer in
a county receives a milk marketing history under
this subsection and ceases the production of milk
during any subsequent calendar year, the portion of
that milk marketing history remaining unused shall
be available to the dairy committee in which the pro-
ducer is located for transfer among eligible produc-
ers on an equitable basis in accordance with this
paragraph. The dairy committee shall transfer any
milk marketing history available to the committee
under this paragraph to persons (excluding nonfarm
corporations and investors) in the following order of
priority:
‘‘(A) New milk producers described in
paragraph (8).
‘‘(B) Producers in the county whose milk
marketing history for the calendar year involved
is less than 1,000,000 pounds for each pro-
ducer.
‘‘(C) Milk producers who have been in op-
eration for less than 5 years.
‘‘(D) Other producers in the county.
‘‘(E) Other producers in the region in
which the county is located, to be recommended
by the relevant regional milk marketing board
established under section 204B(d).
‘‘(F) Other regions of the Continental
United States.
‘‘(8) NEW OR REENTRY PRODUCERS.—The rel-
evant dairy committee shall assign to a new milk
producer a milk marketing history at a reasonable
level taking into consideration the milk marketing
histories of similarly situated producers in the coun-
ty and the availability of excess milk marketing his-
tories for distribution by the committee under para-
graph (7). The term ‘new milk producer’ means a
person who does not have a milk marketing history
and is purchasing production units (cows or a farm)
or who previously relinquished the producer’s milk
marketing history.
‘‘(9) SCHEME
OR
DEVICE.—If the Secretary
makes a final determination that a producer has
adopted a scheme or device to inflate the milk mar-
keting history of the producer or to evade reductions
in price required under this section or section 204,
the producer shall be ineligible for two calendar
years to receive any marketing history under this
subsection or to receive any domestic production
base under subsection (e). A producer shall have the
right to appeal an adverse decision under this para-
graph in the manner provided by subtitle H of title
II of the Federal Crop Insurance Reform and De-
partment of Agriculture Reorganization Act of 1994
(7 U.S.C. 6991 et seq.).
‘‘(e) DETERMINATION OF DOMESTIC PRODUCTION
BASE.—
‘‘(1) NOTIFICATION.—Before January 1 of each
calendar year, the Secretary, in consultation with
the Board, shall notify each milk producer in the 48
contiguous States of the domestic production base of
the producer for that year.
‘‘(2) MARKETING
HISTORY
EQUAL
TO
OR
UNDER 1,000,000 POUNDS.—If the milk marketing
history determined under subsection (d) for a milk
producer does not exceed 1,000,000 pounds, the do-
mestic production base for the producer shall be
equal to the product of—
‘‘(A) the milk marketing history of the
producer; and
‘‘(B) the milk marketing allocation factor
determined for that year under subsection (c)
or one, whichever is greater.
‘‘(3) MARKETING
HISTORY
IN
EXCESS
OF
1,000,000 POUNDS.—If the milk marketing history
determined under subsection (d) for a milk producer
exceeds 1,000,000 pounds, the domestic production
base for the producer shall be equal to the sum of—
‘‘(A) 1,000,000 pounds; and
‘‘(B) the product of—
‘‘(i) the milk marketing history of the
producer (reduced by 1,000,000 pounds);
and
‘‘(ii) the milk marketing allocation
factor determined for that year under sub-
section (c).
‘‘(4) REDUCTION FOR DISUSE.—Any producer
who produces less than the producer’s domestic pro-
duction base for two consecutive years (except in the
case of a disaster) shall have the producer’s domes-
tic marketing base reduced to an amount equal to
the average of the two lower years. The amount of
base reduction shall then be reallocated by the rel-
evant dairy committee.
‘‘(f) DESIGNATION
OF
NUTRITION
ASSISTANCE
BASE.—
‘‘(1) PURPOSE OF BASE.—To assure adequate
quantities of low-cost milk and milk products for the
Commodity Credit Corporation for distribution
through nutrition assistance programs, the Sec-
retary, in consultation with the Board, shall assign
to each milk producer a nutrition assistance base for
each calendar year. The nutrition assistance base
shall be part of the domestic production base of the
producer. The Commodity Credit Corporation shall
offer to purchase from each purchaser, at the re-
duced price specified in subsection (g)(1), a quantity
of milk corresponding to the nutrition assistance
base of the producer.
‘‘(2) DETERMINATION.—The nutrition assist-
ance base for a producer shall be equal to not more
than five percent of the domestic production base of
the producer under subsection (e).
‘‘(3) NOTIFICATION.—The notification required
to be provided to milk producers under subsection
(e)(1) for each calendar year shall also include the
nutrition assistance base for the producers for that
year.
‘‘(g) DAIRY NUTRITION ASSISTANCE PRICE REDUC-
TION.—
‘‘(1) PRICE REDUCTION.—All milk producers in
the 48 contiguous States shall receive a reduced
price for that percentage of their domestic produc-
tion base that is determined by the Secretary, in
consultation with the Board, to be required to fulfill
the needs of domestic nutrition assistance programs.
The amount of reduction under this subsection shall
be equal to the product of—
‘‘(A) 70 percent of the rate of price sup-
port for milk per hundredweight in effect for
that calendar year for the class of milk in-
volved; and
‘‘(B) the quantity of milk (in hundred-
weight) so marketed.
‘‘(2) DURATION.—These reductions shall be
made on a monthly basis until the producer’s total
nutrition assistance base has been fulfilled.
‘‘(h) EXCESS PRODUCTION.—
‘‘(1) USE AS EXPORTS.—If a milk producer in
the 48 contiguous States produces milk in excess of
the domestic production base of the producer, the
producer may dispose of such excess production only
on the export market as provided in section 7.
‘‘(2) PENALTIES.—If any person fails to comply
with the requirements of paragraph (1) regarding
the disposal of excess production, the person shall be
liable for a civil penalty up to an amount determined
by multiplying—
‘‘(A) the quantity of milk involved in the
violation; by
‘‘(B) 80 percent of the rate of price sup-
port for milk per hundredweight in effect for
that calendar year for the class of milk involved
in the violation.
‘‘(3) ENFORCEMENT.—The Secretary may en-
force paragraph (2) in the courts of the United
States.
‘‘(4) PRODUCT AND PENALTY DISTRIBUTION.—
‘‘(A) USE OF ACQUIRED MILK.—Products
of milk purchased by the Commodity Credit
Corporation under this subsection shall be used
for United States foreign food assistance pro-
grams.
‘‘(B) USE
OF
PAYMENTS.—Penalty pay-
ments received by the Commodity Credit Cor-
poration under this subsection shall be used to
help fund the Dairy Export Incentive Pro-
gram.’’.
SEC. 5. MONITORING ACTIVITIES OF NATIONAL MILK MAR-
KETING BOARD.
(a) MONITORING ACTIVITIES.—The National Milk
Marketing Board established under section 204B of the
Agricultural Act of 1949 shall continuously monitor—
(1) the relationship between the price received
by milk producers for sales of milk, the profits re-
ceived by processors of milk and milk products, and
the prices paid by consumers for milk and milk
products; and
(2) the actual need of nutrition assistance pro-
grams of the United States for milk and milk prod-
ucts.
(b) REPORTING.—Not less than twice annually, the
Board shall submit to Congress the results of its monitor-
ing activities under subsection (a).
SEC. 6. FINANCIAL ASSISTANCE FOR ENVIRONMENTAL
CONSERVATION COMPLIANCE BY MILK PRO-
DUCERS.
(a) FUNDS
FOR ENVIRONMENTAL CONSERVATION
COMPLIANCE.—To encourage environmentally sound con-
servation practices by milk producers in the 48 contiguous
States, the Secretary of Agriculture shall determine the
amount of money, on a per hundredweight of milk basis
as provided in section 204C(a)(2)(D) of the Dairy, Nutri-
tion, and Conservation Act of 1995, that would cover the
cost of environmentally sound conservation practices by
such milk producers mandated by Federal, State, or local
laws.
(b) AVAILABILITY.—To the extent funds are available
under subsection (d) to carry out this section, such funds
shall be provided to milk producers on an annual basis,
subject to Consolidated Farm Service Agency committee
approval. Amounts provided under this subsection shall be
in addition to any Federal cost share payments made to
milk producers under any other law.
(c) AMOUNT OF PAYMENTS.—State and county Con-
solidated Farm Service Agency committees shall deter-
mine which farm practices for which payments are avail-
able are applicable to each milk producer based on the
producer’s farm plan and other factors. Payments to each
milk producer shall be based on the economic cost of ob-
taining and maintaining compliance and the number of
programs in which the producer participates.
(d) DEDUCTION.—The amount of money involved
shall be considered an environmental conservation compli-
ance fee deducted from the Federal or State order pool
prior to the computation of the Federal order price. These
deductions shall be made and held in escrow by the State
Consolidated Farm Service Agency director in the State
of the producer’s residence until compliance payments are
made. In the case of nonregulated areas, provisions shall
be made for environmental conservation compliance fees
to be deducted by the State Regulatory Commission in-
volved or the State Commissioner of Agriculture.
(e) ENVIRONMENTAL CONSERVATION COMPLIANCE
PROGRAMS.—Environmental conservation compliance pro-
grams shall include at least the following:
(1) 
Manure 
management 
systems 
and
composting systems.
(2) Waste water management.
(3) Wetland conservation practices.
(4) Pesticide and herbicide alternatives.
(5) Rotational grazing.
(6) Green strips.
SEC. 7. PRODUCER EXPORT CONTRACTS.
(a) EXPORT CONTRACTS.—Any milk producer in the
48 contiguous States shall be allowed to contract directly
(or indirectly through another person) any volume of milk
in hundredweights or products of milk at a predetermined
price agreed to by all parties involved for the sole purpose
of export out of the United States.
Æ
HR 2000 IH——2
HR 2000 IH——3