(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. Regional
boards shall hold regional elections to fill vacancies.
(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.
(4) 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 4. The program shall remain under
the final authority and control of the Secretary.
(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 4 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 re-
sponsibilities of the Board.
(j) FUNDING AND BUDGETS.—
(1) BOARD FUNDS; OPERATING ASSESSMENT.—
Consistent with the approved budget of the Board,
funds of the Commodity Credit Corporation shall be
available to pay for activities under this section and
section 4. 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 commercial use
shall be assessed a National Milk Marketing Board
operating fee, not to exceed 1.5 cents per hundred-
weight 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 rep-
resentatives of the Comptroller General shall have
access to and the right to examine all books, docu-
ments, papers, records, or other recorded informa-
tion within the possession or control of the Board.
SEC. 4. ALTERNATIVE MILK PRICE SUPPORT AND INVEN-
TORY 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 of Agriculture and adjusted annually to re-
flect 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.
(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.
(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 oper-
ation on a farm, as a full-time occupation (as evi-
denced by the person’s contribution of active per-
sonal labor and dairy cows to the operation), al-
though the person uses the land, equipment, or fa-
cilities of another person.
(2) ONE- OR FIVE-YEAR AVERAGE.—Upon the
implementation of this Act, the Secretary shall as-
sign to each producer of milk a milk marketing his-
tory 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 marketed
by the producer during the five calendar years
preceding the enactment of such Act, excluding
the year in which the largest quantity was mar-
keted and the year in which the smallest quan-
tity was marketed.
(3) AMOUNTS PRODUCED.—For purposes of de-
termining the milk marketing history of a producer
under paragraph (2), all milk marketed by the pro-
ducer from all farms of the producer for the cal-
endar years involved shall be counted.
(4) USE OF COUNTY COMMITTEES.—Subject to
paragraph (5), county and other committees estab-
lished under section 8(b)(5) of the Soil Conservation
and Domestic Allotment Act (16 U.S.C. 590h(b)(5))
shall be responsible for local administration of the
alternative milk price support and inventory man-
agement 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 imme-
diate family member (such as the spouse, par-
ent, brother or sister, or child of the producer
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 transfer
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 ap-
prove 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 history
shall be allowed to relocate the marketing his-
tory 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 para-
graph (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 oper-
ation 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 estab-
lished under section 3.
(F) Other regions of the Continental Unit-
ed 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.