received by representative producers for milk pro-
duced in the 48 contiguous States and marketed for
commercial 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 re-
tail levels. The Board may publish reports 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, except that administra-
tive expenses for a year may not exceed three percent of
the funds available to the Board for that year.
‘‘(j) FUNDING AND BUDGETS.—
‘‘(1) BOARD FUNDS.—Consistent with the ap-
proved budget of the Board, funds of the Commodity
Credit Corporation shall be available to pay for ac-
tivities under this section and section 204C.
‘‘(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.—The price of milk shall be supported at
a rate established by the Board, and adjusted annually,
to reflect the costs of production for milk producers. The
types of factors to be considered by the Board in determin-
ing the costs of production shall include the following:
‘‘(1) Prices for articles and services purchased
by milk producers.
‘‘(2) Wages paid to hired farm workers.
‘‘(3) The costs of conservation and environ-
mental requirements.
‘‘(4) Taxes on farm real estate.
‘‘(b) MILK PRODUCTION AND CONSUMPTION ESTI-
MATE.—
‘‘(1) ANNUAL ESTIMATE.—Not later than No-
vember 20 of each calendar year, 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 and exports of milk and the prod-
ucts 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 Board—
‘‘(A) shall use the rate of price support to
be in effect for the following calendar year; and
‘‘(B) may not consider any inventory man-
agement program to balance supply and de-
mand.
‘‘(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 subparagraphs
(A) and (B) of subsection (b)(1) for a calendar year, the
Board shall establish a milk marketing allocation factor
for the purpose of determining milk producer bases for
that year. The milk marketing allocation factor shall be
equal to the ratio of subparagraph (A) 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.—For each
calendar year, the Board shall assign to each pro-
ducer of milk a marketing history for the producer
equal (at the producer’s option) to—
‘‘(A) the quantity of milk marketed by the
producer during the preceding calendar year; or
‘‘(B) the average quantity of milk mar-
keted by the producer during the five preceding
calendar years, excluding the year in which the
largest quantity was marketed and the year in
which the smallest quantity was marketed.
‘‘(3) USE OF COUNTY COMMITTEES.—In carry-
ing out this subsection, the Board shall utilize the
services of the county committees established under
section 8(b) of the Soil Conservation and Domestic
Allotment Act (16 U.S.C. 590h(b)).
‘‘(4) AMOUNTS
PRODUCED.—For purposes of
determining the milk marketing history of a pro-
ducer, all milk marketed by the producer from all
farms of the producer for the calendar years in-
volved shall be counted, including milk subject to a
reduction of the price received under this section or
section 204.
‘‘(5) 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 marketing history of the producer for a
farm in areas in which class I monetary bases
have been established before the date of the en-
actment of this section.
‘‘(C) The county committee shall permit a
producer to reestablish the marketing history of
a farm owned or leased by the producer at an-
other farm owned or leased by the same pro-
ducer.
‘‘(D) The county committee may approve
the transfer of the marketing history of a pro-
ducer to another producer (for use on the same
farm or another farm) to prevent extreme hard-
ship.
‘‘(6) SET-ASIDE OF UNUSED MARKETING HIS-
TORY FOR COUNTY COMMITTEES.—Subject to trans-
fer options specified in paragraph (5), if a producer
in a county receives a milk marketing history under
this subsection for a calendar year and ceases the
production of milk during that year, the portion of
that milk marketing history remaining unused shall
be available to the county committee in which the
producer is located for transfer among producers in
accordance with this paragraph for that calendar
year. The county committee shall transfer any milk
marketing history available to the committee under
this paragraph to persons (excluding nonfarm cor-
porations and investors) in the following order of
priority:
‘‘(A) A new milk producer described in
paragraph (7).
‘‘(B) A milk producer who has been in op-
eration for less than five years.
‘‘(C) A producer in the county whose milk
marketing history for the calendar year involved
is less than 1,000,000 pounds.
‘‘(D) Other producers in the county.
‘‘(E) Other producers in the region in
which the county is located, to be recommended
by the Regional Milk Marketing Board.
‘‘(7) NEW PRODUCERS.—A producer who has
been engaged in the production of milk for less than
12 consecutive months at the beginning of a cal-
endar year shall be assigned a marketing history by
the Board for that year at a reasonable level taking
into consideration the milk marketing histories of
similarly situated producers in the county. A pro-
ducer who participated in the milk production termi-
nation program under section 201(d), as added by
section 101(b) of the Food Security Act of 1985
(Public Law 99–198; 99 Stat. 1363), may reenter
milk production as a new producer.
‘‘(8) EQUITABLE ADJUSTMENTS FOR PRODUC-
ERS RESTRAINING PRODUCTION.—In the case of a
producer who restrained milk production during a
calendar year in order to qualify for a refund under
subsection (f)(3) or (h)(3) of section 204 or as a re-
sult of participation in a dairy inventory manage-
ment activity conducted by the Board, the Board
shall assign the producer a milk marketing history
for the next calendar year equal (at the producer’s
option) to—
‘‘(A) the amount determined under para-
graph (2); or
‘‘(B) the quantity of milk marketed by the
producer from the farm during the most recent
calendar year in which the producer did not re-
ceive such a refund or participate in such an
activity.
‘‘(9) SCHEME OR DEVICE.—If the Board deter-
mines that a producer has adopted a scheme or de-
vice for a calendar year to inflate the milk market-
ing history of the producer determined under this
paragraph or to evade reductions in price required
under this section or section 204, the producer shall
be ineligible for that year and the succeeding cal-
endar year to receive—
‘‘(A) any marketing history under this sub-
section; or
‘‘(B) any milk production base under sub-
section (e).
‘‘(e) DETERMINATION OF COMMERCIAL PRODUCTION
BASE.—
‘‘(1) NOTIFICATION.—Before January 1 of each
calendar year, the Board shall notify each milk pro-
ducer in the 48 contiguous States of the commercial
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 for a calendar year does not exceed
1,000,000 pounds, the commercial production base
for the producer for that calendar year 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
for a calendar year exceeds 1,000,000 pounds, the
commercial production base for the producer for
that calendar year 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) MAXIMUM COMMERCIAL BASE.—The Re-
gional Milk Marketing Board for each region speci-
fied in section 204B(c) may establish a maximum
commercial production base for producers in that re-
gion to reflect the economic and production needs of
the region. Notwithstanding paragraphs (2) and (3),
no commercial production base determined under
this subsection for a producer may exceed the maxi-
mum commercial production base in effect for the
region in which the producer operates.
‘‘(f) DETERMINATION
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 Board
shall assign to each milk producer a nutrition assist-
ance base for each calendar year. The Commodity
Credit Corporation shall offer to purchase from each
purchaser, at the reduced price specified in sub-
section (g)(2), a quantity of milk corresponding to
the nutrition assistance base of the producer for the
calendar year involved.
‘‘(2) DETERMINATION.—The nutrition assist-
ance base for a producer for a calendar year shall
be equal to the product of—
‘‘(A) the commercial production base of
the producer under subsection (e) for that year;
and
‘‘(B) a percentage established by the
Board for that year, but not to exceed five per-
cent.
‘‘(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) REDUCTIONS IN PRICE FOR EXCESS PRODUC-
TION.—
‘‘(1) 
PRICE
REDUCTION
REQUIRED.—The
Board shall provide for a reduction to be made in
the price to be received by a milk producer for any
quantity of milk produced in the 48 contiguous
States and marketed during a calendar year by the
producer for commercial use in excess of the com-
mercial production base of the producer for that
year.
‘‘(2) REDUCTION FOR NUTRITION BASE MAR-
KETINGS.—For quantities of milk marketed by a
producer in excess of the commercial production
base of the producer, but not in excess of the nutri-
tion assistance base of the producer, the amount of
the reduction under this subsection in the price re-
ceived by such producer shall be equal to the prod-
uct of—
‘‘(A) 70 percent of the rate of price sup-
port for milk (per hundredweight) in effect
under subsection (a) for the calendar year in-
volved; and
‘‘(B) the quantity of such milk (measured
in hundredweights) so marketed.
‘‘(3) REDUCTION FOR OTHER EXCESS MARKET-
INGS.—For quantities of milk marketed by a pro-
ducer in excess of the commercial production base
and the nutrition assistance base of the producer,
the amount of the reduction under this subsection in
the price received by such producer shall be equal to
the product of—
‘‘(A) 100 percent of the rate of price sup-
port for milk (per hundredweight) in effect
under subsection (a) for the calendar year in-
volved; and
‘‘(B) the quantity of milk (measured in
hundredweights) so marketed that exceeds the
commercial production base and the nutrition
assistance base of the producer.
‘‘(h) ENFORCEMENT.—
‘‘(1) COLLECTION.—Reductions in price re-
quired under subsection (g) shall be collected and re-
mitted to the Commodity Credit Corporation in the
manner prescribed by the Board.
‘‘(2) PENALTIES.—If any person fails to collect
or remit the reduction required by subsection (g) or
fails to comply with such requirements for record-
keeping or otherwise as are required by the Board
to carry out such subsection, the person shall be lia-
ble for a civil penalty up to an amount determined
by multiplying—
‘‘(A) the quantity of milk involved in the
violation; by
‘‘(B) price support rate for milk (per hun-
dredweight) in effect under subsection (a) for
the calendar year involved.
‘‘(3) ENFORCEMENT.—The Board may enforce
subsection (g) in the courts of the United States.’’.