Title: Dairy Business Innovation Act of 2018
Policy area: Agriculture and Food

Summary:
Dairy Business Innovation Act of 2018
This bill requires the Department of Agriculture to establish at least three regionally located product and business innovation initiatives to provide grants and technical assistance to dairy businesses.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3113 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3113

To promote dairy product innovation, including in specialty cheese, and 
   value-added dairy product development for the economic benefit of 
           United States dairy farmers and their communities.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 21, 2018

  Ms. Baldwin introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
To promote dairy product innovation, including in specialty cheese, and 
   value-added dairy product development for the economic benefit of 
           United States dairy farmers and their communities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Dairy Business Innovation Act of 
2018''.

SEC. 2. DAIRY PRODUCT AND BUSINESS INNOVATION INITIATIVES.

    (a) Definitions.--In this section:
            (1) Dairy business.--The term ``dairy business'' means a 
        business that develops, produces, markets, or distributes dairy 
        products.
            (2) Dairy product.--The term ``dairy product'' means a food 
        that contains as a primary ingredient, or is derived from, the 
        lacteal secretion, practically free from colostrum, obtained by 
        the complete milking of one or more hooved mammals.
            (3) Initiative.--The term ``initiative'' means a dairy 
        product and business innovation initiative established under 
        subsection (b).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
    (b) Establishment.--The Secretary shall establish not less than 3 
regionally located dairy product and business innovation initiatives 
for the purposes of--
            (1) utilizing regional milk production;
            (2) creating higher-value uses for dairy products;
            (3) promoting business development that diversifies farmer 
        income through processing and marketing innovation; and
            (4) diversifying dairy product markets to reduce risk.
    (c) Selection of Initiatives.--An initiative--
            (1) shall be located in a region with a history of dairy 
        farming;
            (2) shall be positioned in proximity to existing dairy 
        industry resources, including research capacity, academic and 
        industry expertise, a density of dairy farms or farmland 
        suitable for dairying, and dairy businesses;
            (3) may serve a certain product niche, such as artisanal 
        cheese, or serve dairy businesses with dairy products derived 
        from a specific type of dairy animal; and
            (4) shall serve dairy businesses in other regions.
    (d) Entities Eligible To Host Initiative.--
            (1) In general.--Any of the following entities may submit 
        to the Secretary an application to host an initiative:
                    (A) A State department of agriculture or other 
                State entity.
                    (B) A nonprofit entity with capacity to provide 
                consultation, expertise, and grant distribution and 
                tracking.
                    (C) An institution of higher education.
                    (D) A cooperative extension service.
            (2) Partners.--An entity described in paragraph (1) may 
        establish partners prior to the submission of the application 
        under that paragraph, or add partners on consultation with the 
        Secretary, which may include--
                    (A) a generic program to promote and provide 
                research and information for dairy and dairy products 
                (commonly known as a ``dairy checkoff program'');
                    (B) a foundation; and
                    (C) any other entity described in subparagraphs (A) 
                through (D) of that paragraph.
    (e) Activities of Initiatives.--
            (1) Direct assistance to dairy businesses.--An initiative 
        shall provide assistance to dairy businesses in accordance with 
        the following:
                    (A) Provision of direct assistance.--Assistance may 
                be provided directly to dairy businesses in a private 
                consultation or through widely available distribution, 
                and may be provided--
                            (i) directly by the entity that hosts the 
                        initiative under subsection (d)(1);
                            (ii) through contracting with industry 
                        experts;
                            (iii) through the provision of technical 
                        assistance, such as informational websites, 
                        webinars, conferences, trainings, plant tours, 
                        and field days; and
                            (iv) through research institutions, 
                        including cooperative extension services.
                    (B) Types of assistance.--Eligible forms of 
                assistance include--
                            (i) business consulting, including business 
                        plan development for processed dairy products;
                            (ii) accounting and financial literacy 
                        training;
                            (iii) market evaluation;
                            (iv) strategic planning assistance;
                            (v) product innovation, including relating 
                        to value-added products;
                            (vi) marketing and branding assistance, 
                        including market messaging, consumer 
                        assessments, and evaluation of regional, 
                        national, and international markets;
                            (vii) innovation in emerging market 
                        opportunities, including agritourism, and 
                        marketing communication methods;
                            (viii) packaging, distribution, and supply 
                        chain innovation;
                            (ix) food safety training;
                            (x) dairy product production training, 
                        including in new, rare, or innovative 
                        techniques; and
                            (xi) process and processing facility 
                        improvement, including planning for and 
                        implementing plant upgrades, food safety 
                        modernization, energy and water efficiency, 
                        byproduct reprocessing and use maximization, 
                        and waste treatment.
            (2) Competitive grants to dairy businesses.--An initiative 
        shall provide competitive grants for new and existing dairy 
        businesses for the purposes of--
                    (A) modernization, specialization, and grazing 
                transition on dairy farms;
                    (B) value chain and commodity innovation and 
                facility and process updates for dairy processors; and
                    (C) product development, packaging, and marketing 
                of dairy products.
    (f) Distribution of Funds.--
            (1) In general.--Of the funds made available to carry out 
        this section, the Secretary shall provide not less than 3 
        awards to eligible entities described in subsection (d)(1) for 
        the purposes of carrying out the activities under subsection 
        (e).
            (2) Multiyear funding.--The Secretary is encouraged--
                    (A) to award funds under paragraph (1) in multiyear 
                funding allocations; and
                    (B) to require frequent reporting, as appropriate.
            (3) Use of funds.--
                    (A) In general.--The funds awarded to an eligible 
                entity under paragraph (1) may be used--
                            (i) for program administration of an 
                        initiative, including staff costs; and
                            (ii) for workshops or other informational 
                        sessions that--
                                    (I) directly benefit dairy 
                                businesses and entrepreneurs; or
                                    (II) enhance the capacity of 
                                providers of technical assistance to 
                                dairy businesses.
                    (B) Allocation.--Not less than 50 percent of the 
                funds awarded to an eligible entity under paragraph (1) 
                shall be allocated to directly benefit new dairy 
                businesses or dairy businesses that wish to update 
                their products or processes using a grant under 
                subsection (e)(2).
            (4) Priority.--An eligible entity shall give priority the 
        provision of direct assistance under subsection (e)(1) and 
        grants under subsection (e)(2) to--
                    (A) small- and medium-sized dairy farms and dairy 
                businesses;
                    (B) employee-owned dairy businesses;
                    (C) cooperatives;
                    (D) dairy businesses that establish contracting 
                mechanisms that return profits to farmers who supply 
                their milk;
                    (E) dairy businesses that, in addition to salary 
                and wage compensation, return profits to employees; and
                    (F) dairy businesses that seek to create dairy 
                products that add substantial value in processing or 
                marketing, such as specialty cheeses.
            (5) Requirement.--In the case of direct assistance under 
        subsection (e)(1) or a grant under subsection (e)(2) that is 
        provided to a specific dairy business and does not benefit the 
        general public, as determined by the Secretary, the assistance 
        or grant shall exclusively be available to dairy businesses 
        owned in the United States.
            (6) Supplementation.--To the extent practicable, the 
        Secretary shall ensure that funds provided to an initiative 
        supplement, and do not duplicate or replace, existing dairy 
        product research, development, and promotion activities.
    (g) Matching Funding.--
            (1) In general.--The Secretary shall encourage, but not 
        require, an eligible entity described in subsection (d)(1) to 
        provide matching funding to carry out this section.
            (2) Additional funding.--After an initial term of funding 
        provided to an eligible entity described in subsection (d)(1) 
        under this section, the Secretary is encouraged to work with 
        the eligible entity to develop additional funding streams to 
        supplement the Federal investment, including from funds of a 
        generic program to promote and provide research and information 
        for a specific agricultural commodity, if the provision of 
        funds is approved by the members of the generic program.
    (h) Reporting.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report describing the implementation of this section.
            (2) Innovation reports.--The Secretary, in coordination 
        with the Chief Economist, shall publish an annual report on the 
        status of--
                    (A) innovation in dairy products;
                    (B) product development under the program under 
                this section;
                    (C) growth areas for dairy product development; and
                    (D) barriers inhibiting majority member-owned 
                domestic dairy firms from--
                            (i) updating capacity;
                            (ii) performing competitively in the 
                        marketplace; and
                            (iii) returning gains to members or 
                        reinvesting the gains in ways that benefit the 
                        long-term financial stability of the majority 
                        member-owned domestic dairy firm and the 
                        members of that firm.
    (i) Funding.--
            (1) Mandatory funding.--Of the funds of the Commodity 
        Credit Corporation, the Secretary shall use to carry out this 
        section $50,000,000, to remain available until expended.
            (2) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $20,000,000 for 
        each fiscal year.
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