and only those dairy operations so registered shall 
be covered by the stabilization program. 
(c) TIME FOR REGISTRATION.— 
(1) EXISTING DAIRY OPERATIONS.—During the 
15-month period beginning on the date of the initi-
ation of the registration period for the production 
margin protection program, a dairy operation that is 
actively engaged as of such date may register with 
the Secretary— 
(A) to receive basic production margin pro-
tection; and 
(B) if the dairy operation elects, to pur-
chase supplemental production margin protec-
tion. 
(2) NEW ENTRANTS.—A dairy producer that 
has no existing interest in a dairy operation as of 
the date of the initiation of the registration period 
for the production margin protection program, but 
that, after such date, establishes a new dairy oper-
ation, may register with the Secretary during the 1- 
year period beginning on the date on which the dairy 
operation first markets milk commercially— 
(A) to receive basic production margin pro-
tection; and 
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(B) if the dairy operation elects, to pur-
chase supplemental production margin protec-
tion. 
(d) TRANSITION FROM MILC TO PRODUCTION MAR-
GIN PROTECTION.— 
(1) DEFINITION OF TRANSITION PERIOD.—In 
this subsection, the term ‘‘transition period’’ means 
the period during which the milk income loss pro-
gram established under section 1506 of the Food, 
Conservation, and Energy Act of 2008 (7 U.S.C. 
8773) and the production margin protection pro-
gram under this subtitle are both in existence. 
(2) NOTICE OF AVAILABILITY.—Not later than 
30 days after the date of enactment of this Act, the 
Secretary shall publish a notice in the Federal Reg-
ister to inform dairy operations of the availability of 
basic production margin protection and supple-
mental production margin protection, including the 
terms of the protection and information about the 
option of dairy operations during the transition pe-
riod to make an election described in paragraph (3). 
(3) ELECTION.—Except as provided in para-
graph (4), a dairy operation may elect to participate 
in either the milk income loss program established 
under section 1506 of the Food, Conservation, and 
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sroberts on DSK5SPTVN1PROD with BILLS
Energy Act of 2008 (7 U.S.C. 8773) or the produc-
tion margin protection program under this subtitle 
for the duration of the transition period. 
(4) TRANSFER TO PRODUCTION MARGIN PRO-
TECTION.—A dairy operation that elects to partici-
pate in the milk income loss program established 
under section 1506 of the Food, Conservation, and 
Energy Act of 2008 (7 U.S.C. 8773) during the 
transition period may, at any time, make a perma-
nent transfer to the production margin protection 
program. 
(e) ADMINISTRATION FEE.— 
(1) ADMINISTRATION FEE REQUIRED.—Except 
as provided in paragraph (5), a participating dairy 
operation shall— 
(A) pay an administration fee under this 
subsection to register to participate in the pro-
duction margin protection program; and 
(B) pay the administration fee annually 
thereafter to continue to participate in the pro-
duction margin protection program. 
(2) FEE AMOUNT.—The administration fee for 
a participating dairy operation for a calendar year 
shall be based on the pounds of milk (in millions) 
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sroberts on DSK5SPTVN1PROD with BILLS
marketed by the participating dairy operation in the 
previous calendar year, as follows: 
Pounds Marketed (in millions) 
Administration Fee 
less than 1 
$100
1 to 5 
$250
more than 5 to 10 
$350
more than 10 to 40 
$1,000
more than 40 
$2,500. 
(3) DEPOSIT OF FEES.—All administration fees 
collected under this subsection shall be credited to 
the fund or account used to cover the costs incurred 
to administer the production margin protection pro-
gram and the stabilization program and shall be 
available to the Secretary, without further appro-
priation and until expended, for use or transfer as 
provided in paragraph (4). 
(4) USE OF FEES.—The Secretary shall use ad-
ministration fees collected under this subsection— 
(A) to cover administrative costs of the 
production margin protection program and sta-
bilization program; and 
(B) to cover costs of the Department of 
Agriculture relating to reporting of dairy mar-
ket news, carrying out the amendments made 
by section 1476, and carrying out section 273 
of the Agricultural Marketing Act of 1946 (7 
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sroberts on DSK5SPTVN1PROD with BILLS
U.S.C. 1637b), to the extent funds remain 
available after operation of subparagraph (A). 
(5) WAIVER.—The Secretary shall waive or re-
duce the administration fee required under para-
graph (1) in the case of a limited-resource dairy op-
eration, as defined by the Secretary. 
(f) LIMITATION.—A dairy operation may only partici-
pate in the production margin protection program or the 
livestock gross margin for dairy program under the Fed-
eral Crop Insurance Act (7 U.S.C. 1501 et seq.), but not 
both. 
SEC. 1413. PRODUCTION HISTORY OF PARTICIPATING 
DAIRY OPERATIONS. 
(a) PRODUCTION HISTORY FOR BASIC PRODUCTION 
MARGIN PROTECTION.— 
(1) DETERMINATION REQUIRED.—For purposes 
of providing basic production margin protection, the 
Secretary shall determine the basic production his-
tory of a participating dairy operation. 
(2) CALCULATION.—Except as provided in 
paragraph (3), the basic production history of a par-
ticipating dairy operation for basic production mar-
gin protection is equal to the highest annual milk 
marketings of the participating dairy operation dur-
ing any 1 of the 3 calendar years immediately pre-
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ceding the calendar year in which the participating 
dairy operation first signed up to participate in the 
production margin protection program. 
(3) ELECTION BY NEW DAIRY OPERATIONS.—In 
the case of a participating dairy operation that has 
been in operation for less than a year, the partici-
pating dairy operation shall elect 1 of the following 
methods for the Secretary to determine the basic 
production history of the participating dairy oper-
ation: 
(A) The volume of the actual milk mar-
ketings for the months the participating dairy 
operation has been in operation extrapolated to 
a yearly amount. 
(B) An estimate of the actual milk mar-
ketings of the participating dairy operation 
based on the herd size of the participating dairy 
operation relative to the national rolling herd 
average data published by the Secretary. 
(4) NO CHANGE IN PRODUCTION HISTORY FOR 
BASIC
PRODUCTION
MARGIN
PROTECTION.—Once 
the basic production history of a participating dairy 
operation is determined under paragraph (2) or (3), 
the basic production history shall not be subse-
quently changed for purposes of determining the 
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sroberts on DSK5SPTVN1PROD with BILLS
amount of any basic production margin protection 
payments for the participating dairy operation made 
under section 1414. 
(b) ANNUAL PRODUCTION HISTORY FOR SUPPLE-
MENTAL PRODUCTION MARGIN PROTECTION.— 
(1) DETERMINATION REQUIRED.—For purposes 
of providing supplemental production margin protec-
tion for a participating dairy operation that pur-
chases supplemental production margin protection 
for a year under section 1415, the Secretary shall 
determine the annual production history of the par-
ticipating dairy operation under paragraph (2). 
(2) CALCULATION.—The annual production his-
tory of a participating dairy operation for a year is 
equal to the actual milk marketings of the partici-
pating dairy operation during the preceding calendar 
year. 
(3) 
NEW
DAIRY
OPERATIONS.—Subsection 
(a)(3) shall apply with respect to determining the 
annual production history of a participating dairy 
operation that has been in operation for less than a 
year. 
(c) REQUIRED INFORMATION.—A participating dairy 
operation shall provide all information that the Secretary 
may require in order to establish— 
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465 
‘‘(ii) an additional charge not to ex-
ceed 1 percent, as determined by the Sec-
retary. 
‘‘(B) ADJUSTMENT.—The sum obtained 
under subparagraph (A) shall be adjusted to 
the nearest 1⁄8 of 1 percent. 
‘‘(2) GUARANTEED LOAN.—The interest rate on 
a guaranteed loan made under this chapter shall be 
such rate as may be agreed on by the borrower and 
the lender, but may not exceed any rate prescribed 
by the Secretary. 
‘‘(3) LOW-INCOME LOAN.—The interest rate on 
a direct loan made under this chapter to a low-in-
come, limited-resource borrower shall be determined 
by the Secretary at a rate that is not— 
‘‘(A) greater than the sum obtained by 
adding— 
‘‘(i) an amount that does not exceed 
1⁄2 of the current average market yield on 
outstanding marketable obligations of the 
United States with a maturity of 5 years; 
and 
‘‘(ii) an amount not to exceed 1 per-
cent per year, as the Secretary determines 
is appropriate; or 
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