‘‘(C) NOTICE OF INTENT AND OBLIGATION 
TO PARTICIPATE.—In no way does filing a no-
tice of intent under this paragraph obligate a 
dairy producer to sign up for the margin insur-
ance program once the program rules are final, 
but if a producer does file a notice of intent and 
subsequently signs up for the margin insurance 
program, that dairy producer is obligated to 
pay premiums for any retroactive margin insur-
ance selected in the notice of intent. 
‘‘(5) RECONSTITUTION.—The Secretary shall 
ensure that a dairy producer does not reconstitute a 
dairy operation for the sole purpose of purchasing 
margin insurance. 
‘‘(e) PRODUCTION
HISTORY
OF
PARTICIPATING 
DAIRY PRODUCERS.— 
‘‘(1) DETERMINATION
OF
PRODUCTION
HIS-
TORY.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
determine the production history of the dairy 
operation of each participating dairy producer 
in the margin insurance program. 
‘‘(B) CALCULATION.—Except as provided 
in subparagraph (C), the production history of 
a participating dairy producer shall be equal to 
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the highest annual milk marketings of the dairy 
producer during any 1 of the 3 calendar years 
immediately preceding the registration of the 
dairy producer for participation in the margin 
insurance program. 
‘‘(C) NEW PRODUCERS.—If a dairy pro-
ducer has been in operation for less than 1 
year, the Secretary shall determine the produc-
tion history of the dairy producer by extrapo-
lating the actual milk marketings for the 
months that the dairy producer has been in op-
eration to a yearly amount. 
‘‘(2) 
REQUIRED
INFORMATION.—A 
partici-
pating dairy producer shall provide all information 
that the Secretary may require in order to establish 
the production history of the dairy operation of the 
dairy producer. 
‘‘(3) TRANSFER OF PRODUCTION HISTORY.— 
‘‘(A) TRANSFER BY SALE.— 
‘‘(i) REQUEST FOR TRANSFER.—If an 
existing dairy producer sells an entire 
dairy operation to another party, the seller 
and purchaser may jointly request that the 
Secretary transfer to the purchaser the in-
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terest of the seller in the production his-
tory of the dairy operation. 
‘‘(ii) TRANSFER.—If the Secretary de-
termines that the seller has sold the entire 
dairy operation to the purchaser, the Sec-
retary shall approve the transfer and, 
thereafter, the seller shall have no interest 
in the production history of the sold dairy 
operation. 
‘‘(B) TRANSFER BY LEASE.— 
‘‘(i) REQUEST FOR TRANSFER.—If an 
existing dairy producer leases an entire 
dairy operation to another party, the lessor 
and lessee may jointly request that the 
Secretary transfer to the lessee for the du-
ration of the term of the lease the interest 
of the lessor in the production history of 
the dairy operation. 
‘‘(ii) TRANSFER.—If the Secretary de-
termines that the lessor has leased the en-
tire dairy operation to the lessee, the Sec-
retary shall approve the transfer and, 
thereafter, the lessor shall have no interest 
for the duration of the term of the lease in 
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the production history of the leased dairy 
operation. 
‘‘(C) COVERAGE LEVEL.—A purchaser or 
lessee to whom the Secretary transfers a pro-
duction history under this paragraph may not 
obtain a different level of margin insurance cov-
erage held by the seller or lessor from whom the 
transfer was obtained. 
‘‘(D) NEW
ENTRANTS.—The Secretary 
may not transfer the production history deter-
mined for a dairy producer described in sub-
section (d)(3)(B) to another person. 
‘‘(4) MOVEMENT AND TRANSFER OF PRODUC-
TION HISTORY.— 
‘‘(A) MOVEMENT AND TRANSFER AUTHOR-
IZED.—Subject to subparagraph (B), if a dairy 
producer moves from 1 location to another loca-
tion, the dairy producer may maintain the pro-
duction history associated with the operation. 
‘‘(B) NOTIFICATION
REQUIREMENT.—A 
dairy producer shall notify the Secretary of any 
move of a dairy operation under subparagraph 
(A). 
‘‘(C) SUBSEQUENT
OCCUPATION
OF
VA-
CATED LOCATION.—A party subsequently occu-
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pying a dairy operation location vacated as de-
scribed in subparagraph (A) shall have no inter-
est in the production history previously associ-
ated with the operation at that location. 
‘‘(f) MARGIN INSURANCE.— 
‘‘(1) IN GENERAL.—At the time of the registra-
tion of a dairy producer in the margin insurance 
program under subsection (d) and annually there-
after during the duration of the margin insurance 
program, an eligible dairy producer may purchase 
margin insurance. 
‘‘(2) SELECTION OF PAYMENT THRESHOLD.—A 
participating dairy producer purchasing margin in-
surance shall elect a coverage level in any increment 
of $0.50, with a minimum of $4.00 and a maximum 
of $8.00. 
‘‘(3) SELECTION OF COVERAGE PERCENTAGE.— 
A participating dairy producer purchasing margin 
insurance shall elect a percentage of coverage, equal 
to not more than 80 percent nor less than 25 per-
cent, of the production history of the dairy operation 
of the participating dairy producer. 
‘‘(4) PRODUCER PREMIUMS.— 
‘‘(A) PREMIUMS
REQUIRED.—A partici-
pating dairy producer that purchases margin 
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insurance shall pay an annual premium equal to 
the product obtained by multiplying— 
‘‘(i) the percentage selected by the 
dairy producer under paragraph (3); 
‘‘(ii) the production history applicable 
to the dairy producer; and 
‘‘(iii) the premium per hundredweight 
of milk, as specified in the applicable table 
under paragraph (B) or (C). 
‘‘(B) PREMIUM PER HUNDREDWEIGHT FOR 
FIRST 4 MILLION POUNDS OF PRODUCTION.— 
For the first 4,000,000 pounds of milk mar-
ketings included in the annual production his-
tory of a participating dairy operation, the pre-
mium per hundredweight corresponding to each 
coverage level specified in the following table is 
as follows: 
‘‘Coverage Level 
Premium per Cwt. 
$4.00 
$0.000 
$4.50 
$0.01
$5.00 
$0.02
$5.50 
$0.035 
$6.00 
$0.045 
$6.50 
$0.09
$7.00 
$0.18
$7.50 
$0.60
$8.00 
$0.95.
‘‘(C) PREMIUM PER HUNDREDWEIGHT FOR 
PRODUCTION
IN
EXCESS
OF
MILLION 
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POUNDS.—For milk marketings in excess of 
4,000,000 pounds included in the annual pro-
duction history of a participating dairy oper-
ation, the premium per hundredweight cor-
responding to each coverage level is as follows: 
‘‘Coverage Level 
Premium per Cwt. 
$4.00 
$0.030 
$4.50 
$0.045 
$5.00 
$0.066 
$5.50 
$0.11
$6.00 
$0.185 
$6.50 
$0.29
$7.00 
$0.38
$7.50 
$0.83
$8.00 
$1.06.
‘‘(D) TIME FOR PAYMENT.— 
‘‘(i) FIRST YEAR.—As soon as prac-
ticable after a dairy producer registers to 
participate in the margin insurance pro-
gram and purchases margin insurance, the 
dairy producer shall pay the premium de-
termined under subparagraph (A) for the 
dairy producer for the first calendar year 
of the margin insurance. 
‘‘(ii) SUBSEQUENT YEARS.— 
‘‘(I) IN
GENERAL.—When the 
dairy producer first purchases margin 
insurance, the dairy producer shall 
also elect the method by which the 
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dairy producer will pay premiums 
under this subsection for subsequent 
years in accordance with 1 of the 
schedules described in subclauses (II) 
and (III). 
‘‘(II) 
SINGLE
ANNUAL
PAY-
MENT.—The participating dairy pro-
ducer may elect to pay 100 percent of 
the annual premium determined under 
subparagraph (A) for the dairy pro-
ducer for a calendar year by not later 
than January 15 of the calendar year. 
‘‘(III) 
SEMI-ANNUAL
PAY-
MENTS.—The participating dairy pro-
ducer may elect to pay— 
‘‘(aa) 50 percent of the an-
nual premium determined under 
subparagraph (A) for the dairy 
producer for a calendar year by 
not later than January 15 of the 
calendar year; and 
‘‘(bb) the remaining 50 per-
cent of the premium by not later 
than June 15 of the calendar 
year. 
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‘‘(5) PRODUCER PREMIUM OBLIGATIONS.— 
‘‘(A) PRO-RATION
OF
FIRST
YEAR
PRE-
MIUM.—A participating dairy producer that 
purchases margin insurance after initial reg-
istration in the margin insurance program shall 
pay a pro-rated premium for the first calendar 
year based on the date on which the producer 
purchases the coverage. 
‘‘(B) SUBSEQUENT PREMIUMS.—Except as 
provided in subparagraph (A), the annual pre-
mium for a participating dairy producer shall 
be determined under paragraph (4) for each 
year in which the margin insurance program is 
in effect. 
‘‘(C) LEGAL OBLIGATION.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clauses (ii) and (iii), a partici-
pating dairy producer that purchases mar-
gin insurance shall be legally obligated to 
pay the applicable premiums for the entire 
period of the margin insurance program 
(as provided in the payment schedule elect-
ed under paragraph (4)(B)), and may not 
opt out of the margin insurance program. 
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‘‘(ii) DEATH.—If the dairy producer 
dies, the estate of the deceased may cancel 
the margin insurance and shall not be re-
sponsible for any further premium pay-
ments. 
‘‘(iii) RETIREMENT.—If the dairy pro-
ducer retires, the producer may request 
that Secretary cancel the margin insurance 
if the producer has terminated the dairy 
operation entirely and certifies under oath 
that the producer will not be actively en-
gaged in any dairy operation for at least 
the next 7 years. 
‘‘(6) PAYMENT
THRESHOLD.—A participating 
dairy producer with margin insurance shall receive a 
margin insurance payment whenever the average ac-
tual dairy producer margin for a consecutive 2- 
month period is less than the coverage level thresh-
old selected by the dairy producer under paragraph 
(2). 
‘‘(7) MARGIN INSURANCE PAYMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
make a margin insurance protection payment to 
each participating dairy producer whenever the 
average actual dairy producer margin for a con-
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secutive 2-month period is less than the cov-
erage level threshold selected by the dairy pro-
ducer under paragraph (2). 
‘‘(B) AMOUNT OF PAYMENT.—The margin 
insurance payment for the dairy operation of a 
participating dairy producer shall be determined 
as follows: 
‘‘(i) The Secretary shall calculate the 
difference between— 
‘‘(I) the coverage level threshold 
selected by the dairy producer under 
paragraph (2); and 
‘‘(II) the average actual dairy 
producer margin for the consecutive 
2-month period. 
‘‘(ii) The amount determined under 
clause (i) shall be multiplied by— 
‘‘(I) the percentage selected by 
the dairy producer under paragraph 
(3); and 
‘‘(II) the lesser of— 
‘‘(aa) the quotient obtained 
by dividing— 
‘‘(AA) the production 
history applicable to the pro-
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ducer 
under 
subsection 
(e)(1); by 
‘‘(BB) 6; and 
‘‘(bb) the actual quantity of 
milk marketed by the dairy oper-
ation of the dairy producer dur-
ing the consecutive 2-month pe-
riod. 
‘‘(g) EFFECT OF FAILURE TO PAY PREMIUMS.— 
‘‘(1) LOSS
OF
BENEFITS.—A participating 
dairy producer that is in arrears on premium pay-
ments for margin insurance— 
‘‘(A) remains legally obligated to pay the 
premiums; and 
‘‘(B) may not receive margin insurance 
until the premiums are fully paid. 
‘‘(2) ENFORCEMENT.—The Secretary may take 
such action as is necessary to collect premium pay-
ments for margin insurance. 
‘‘(h) DURATION.—The Secretary shall conduct the 
margin insurance program during the period beginning on 
October 1, 2014, and ending on September 30, 2018.’’. 
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