112 
SEC. 1434. CALCULATION AND COLLECTION OF REDUCED 
DAIRY OPERATION PAYMENTS. 
(a) REDUCED PARTICIPATING DAIRY OPERATION 
PAYMENTS REQUIRED.—During any month in which pay-
ment reductions are in effect under the stabilization pro-
gram, each handler shall reduce payments to each partici-
pating dairy operation from whom the handler receives 
milk. 
(b) REDUCTIONS BASED ON ACTUAL DAIRY PRO-
DUCTION MARGIN.— 
(1) REDUCTION REQUIREMENT 1.—If the Sec-
retary determines that the average actual dairy pro-
duction margin has been less than $6.00 but greater 
than $5.00 per hundredweight of milk for 2 consecu-
tive months, the handler shall make payments to a 
participating dairy operation for a month based on 
the greater of the following: 
(A) 98 percent of the stabilization program 
base of the participating dairy operation. 
(B) 94 percent of the marketings of milk 
for the month by the participating dairy oper-
ation. 
(2) REDUCTION REQUIREMENT 2.—If the Sec-
retary determines that the average actual dairy pro-
duction margin has been less than $5.00 but greater 
than $4.00 for 2 consecutive months, the handler 
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shall make payments to a participating dairy oper-
ation for a month based on the greater of the fol-
lowing: 
(A) 97 percent of the stabilization program 
base of the participating dairy operation. 
(B) 93 percent of the marketings of milk 
for the month by the participating dairy oper-
ation. 
(3) REDUCTION REQUIREMENT 3.—If the Sec-
retary determines that the average actual dairy pro-
duction margin has been $4.00 or less for any 1 
month, the handler shall make payments to a par-
ticipating dairy operation for a month based on the 
greater of the following: 
(A) 96 percent of the stabilization program 
base of the participating dairy operation. 
(B) 92 percent of the marketings of milk 
for the month by the participating dairy oper-
ation. 
(c) CONTINUATION OF REDUCTIONS.—The largest 
level of payment reduction required under paragraph (1), 
(2), or (3) of subsection (b) shall be continued for each 
month until the Secretary suspends the stabilization pro-
gram and terminates payment reductions in accordance 
with section 1436. 
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(d) PAYMENT REDUCTION EXCEPTION.—Notwith-
standing any preceding subsection of this section, a han-
dler shall make no payment reductions for a participating 
dairy operation for a month if the participating dairy oper-
ation’s milk marketings for the month are equal to or less 
than the percentage of the stabilization program base ap-
plicable to the participating dairy operation under para-
graph (1), (2), or (3) of subsection (b). 
SEC. 1435. REMITTING FUNDS TO THE SECRETARY AND USE 
OF FUNDS. 
(a) REMITTING FUNDS.—As soon as practicable after 
the end of each month during which payment reductions 
are in effect under the stabilization program, each handler 
shall remit to the Secretary an amount equal to the 
amount by which payments to participating dairy oper-
ations are reduced by the handler under section 1434. 
(b) DEPOSIT OF REMITTED FUNDS.—All funds re-
ceived under subsection (a) shall be available to the Sec-
retary, without further appropriation and until expended, 
for use or transfer as provided in subsection (c). 
(c) USE OF FUNDS.— 
(1) AVAILABILITY
FOR
CERTAIN
COMMODITY 
DONATIONS.—Not later than 90 days after the 
funds described in subsection (a) are due as deter-
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‘‘(B) less than 5 percent per year. 
‘‘(c) PERIOD FOR REPAYMENT.—The period for re-
payment of a loan made under this chapter may not ex-
ceed 7 years. 
‘‘(d) LINE-OF-CREDIT LOANS.— 
‘‘(1) IN GENERAL.—A loan made or guaranteed 
by the Secretary under this chapter may be in the 
form of a line-of-credit loan. 
‘‘(2) TERM.—A line-of-credit loan under para-
graph (1) shall terminate not later than 5 years 
after the date that the loan is made or guaranteed. 
‘‘(3) ELIGIBILITY.—For purposes of deter-
mining eligibility for an operating loan under this 
chapter, each year during which a farmer takes an 
advance or draws on a line-of-credit loan the farmer 
shall be considered as having received an operating 
loan for 1 year. 
‘‘(4) TERMINATION OF DELINQUENT LOANS.— 
If a borrower does not pay an installment on a line- 
of-credit loan on schedule, the borrower may not 
take an advance or draw on the line-of-credit, unless 
the Secretary determines that— 
‘‘(A) the failure of the borrower to pay on 
schedule was due to unusual conditions that the 
borrower could not control; and 
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