(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, the producer
shall be ineligible for two calendar years to receive
any marketing history under this subsection or to re-
ceive any domestic production base under subsection
(e). A producer shall have the right to appeal an ad-
verse decision under this paragraph in the manner
provided by subtitle H of title II of the Federal Crop
Insurance Reform and Department 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 domestic pro-
duction base for the producer shall be equal to the
product of—
(A) the milk marketing history of the pro-
ducer; 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 fac-
tor 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 assistance
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 support
for milk per hundredweight in effect for that
calendar year for the class of milk involved; 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 support
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 Cor-
poration under this subsection shall be used for
United States foreign food assistance programs.
(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 Program.