[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4235 Introduced in House (IH)]
103d CONGRESS
2d Session
H. R. 4235
To enable milk producers to implement a national Class IV Pool to
establish a fair and equitable blend price for milk used in export
dairy products, to establish the Dairy Export Marketing Board to
administer the Class IV Pool and otherwise work to expand exports of
and develop markets for milk and dairy products, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 14, 1994
Mr. Volkmer (for himself, Mr. Rose, Mr. Stenholm, Ms. Long, Mr.
Sarpalius, Mr. Peterson of Minnesota, Mr. Holden, Mr. Pomeroy, Ms.
Danner, Mr. Andrews of Maine, and Ms. Snowe) introduced the following
bill; which was referred to the Committee on Agriculture
_______________________________________________________________________
A BILL
To enable milk producers to implement a national Class IV Pool to
establish a fair and equitable blend price for milk used in export
dairy products, to establish the Dairy Export Marketing Board to
administer the Class IV Pool and otherwise work to expand exports of
and develop markets for milk and dairy products, and for other
purposes.
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 Producer Market Stabilization
and Export Development Act of 1994''.
SEC. 2. FINDINGS, PURPOSES, AND STATEMENT OF POLICY.
(a) Findings.--Congress finds that--
(1) milk and dairy products are vital components of a
balanced diet and have high nutritive value, and the production
of milk and dairy products is an important segment of the
Nation's agricultural industry;
(2) effective Federal dairy programs are needed to ensure
consumers of a reliable and adequate supply of pure and
wholesome milk and dairy products at reasonable prices, to
respond adequately to current and anticipated future supply and
demand problems, and to ensure a level of farm income adequate
to maintain productive capacity sufficient to meet anticipated
future needs;
(3) the effectiveness of the current Federal dairy programs
is being diminished and the economic stress on milk producers
increasing due to the growing demands made on milk producers to
provide funds for reduction of the Federal budget deficit
through direct levies and similar measures included in budget
reconciliation Acts;
(4) milk producers are being asked to pay more and more in
budget reconciliation levies, while the economic pressures
being placed on the milk production industry continue to
squeeze them financially;
(5) given the stresses being put on milk producers and on
the current Federal dairy programs, it is in the national
interest and crucial to milk producers that action be taken to
establish a producer--not government--program to help stabilize
milk prices, develop markets for dairy products, and promote
dairy sales that is financially supported by milk producers and
managed within the dairy production industry;
(6) a program to implement a national Class IV Pool to
establish a fair and equitable blend price for milk used in
commercial export dairy products and to establish a Dairy
Export Marketing Board to administer the Pool and otherwise
work to expand exports of and develop markets for milk and
dairy products will meet the goals of paragraph (5);
(7) since most government outlays under the Federal milk
price support program stem from Commodity Credit Corporation
removals of surplus dairy products from the market to reduce
the adverse effect of the surpluses on producer market prices
for milk, net Federal expenditures under the price support
program can be reduced, and thus budget savings achieved, by
reducing the level of removals of surplus dairy products by the
Corporation under that program;
(8) an effective way to reduce the level of the Commodity
Credit Corporation's price support removals is through the
implementation of a producer-financed program as described in
paragraph (6), because such a program will--
(A) ensure producers that there will be a blend
price for milk used in commercially-exported dairy
products sufficiently high that they will market their
milk excess to domestic needs in the export market
rather than sell it to the Corporation under the price
support program; and
(B) provide nongovernmental moneys to fund efforts
needed to develop additional markets for United States
dairy products;
(9) if milk producers shoulder the financial burden of
facilitating export sales of dairy products and developing
markets for domestic milk production under this new program, it
is appropriate, as well as most conducive to the efficient
implementation of the program, that the milk production and
marketing industry be directly responsible for managing the
program;
(10) the Federal milk price support program itself is the
responsibility of the Secretary of Agriculture under the
Agricultural Act of 1949, and the new producer-financed program
should be coordinated with the milk price support program and
other Department of Agriculture dairy programs; and
(11) the future of effective milk price stabilization
requires the opening of new market opportunities that the
efficient production capacity of our Nation's milk producers
can respond to, and the new producer-financed program provided
for in this Act should include aggressive efforts to search out
and find new market opportunities in promising export markets.
(b) Statement of Purposes and Policy.--
(1) Purposes.--The purposes of this Act are to--
(A) provide for the implementation by producers of
a national Class IV Pool to establish a fair and
equitable blend price for milk used in commercially-
exported dairy products;
(B) establish the Dairy Export Marketing Board to
develop and implement annual plans for the Class IV
Pool and exporting dairy products under this Act, and
to otherwise work to expand exports of and develop new
markets for milk and dairy products; and
(C) make related changes in Federal dairy programs
that will aid in maintaining a stable and efficient
dairy production industry in the United States.
(2) Statements of policy.--
(A) In general.--It is declared to be the policy of
Congress that it is in the public interest, and
necessary to protect and strengthen the Nation's milk
production and marketing system, to reduce any adverse
effects of Federal budget deficit reduction actions on
milk producers, and to facilitate the continued
effective operations of the Federal dairy programs,
that the implementation of the producer-financed
national Class IV Pool program and the establishment of
the Dairy Export Marketing Board provided for in this
Act be achieved.
(B) Operations of the program.--It further is
declared to be the policy of Congress that the
producer-financed national Class IV Pool program
provided for in this Act should be operated--
(i) in addition to, and not as a substitute
for, the Dairy Export Incentive Program of the
Department of Agriculture; and
(ii) in a manner consistent with the trade
obligations of the United States.
(C) Protection of consumers.--It further is
declared to be the policy of Congress that the powers
provided in this Act shall not be used to reduce the
production of pure and wholesome milk and dairy
products below the level required for United States
consumers or to divert production from meeting the
needs of such consumers, and that, in carrying out this
Act, due regard shall be given to the maintenance of a
continuous and stable supply of milk and dairy products
adequate to meet the demands of United States consumers
at prices fair both to producers and consumers.
SEC. 3. NATIONAL CLASS IV MILK MARKETING POOL.
(a) In General.--
(1) Establishment.--The Secretary of Agricultural, by
regulation as provided in subsection (f), shall establish a
national milk marketing pool, which shall be known as the
``Class IV Pool''.
(2) Coverage.--Effective for the period beginning January
1, 1995, and ending December 31, 1999, all milk produced in the
48 contiguous States and marketed by producers shall be entered
into the Class IV Pool. Milk shall enter the Pool at the time
the milk is removed from the farm and before it enters any
other marketing channel, including Federal and State milk
marketing orders.
(3) First handler's duty.--Each first handler of milk shall
be responsible for ensuring that all milk is entered into the
Class IV Pool and is handled in compliance with the
requirements of the Pool, as provided in this Act and in
regulations issued by the Secretary of Agriculture under
subsection (f).
(b) Pool Administration.--The Class IV Pool shall be administered,
as provided in the annual Class IV Pool plans established under section
5 of this Act, by the Dairy Export Marketing Board established under
section 4 of this Act.
(c) Blend Pricing in the Pool.--
(1) Establishment of blend price and application to all
milk in the pool.--The Class IV Pool shall establish for all
milk entering the pool during each calendar year a blend price
for each hundredweight of such milk, equal to the weighted
average of--
(A) the price support level, per hundredweight, for
milk under the Agricultural Act of 1949, as applied to
all milk entering the pool that is not used for those
export dairy products described in subparagraph (B), as
determined by the Dairy Export Marketing Board; and
(B) the average market price, per hundredweight of
milk, for the milk equivalent (total milk solids basis)
used in that amount of export dairy products projected
to be exported during such year under the Class IV Pool
plan for that year, as determined by the Board,
adjusted as provided in paragraph (2): Provided, That in no
case may such blend price be less than the milk price support
level per hundredweight minus 10 cents.
(2) Adjustment to account for refunds.--The blend price for
a year calculated as a weighted average price for milk under
paragraph (1) shall be adjusted by the Dairy Export Marketing
Board as necessary to cover the costs of refunds paid under
paragraph (5) and other expenditures made out of the settlement
fund, as provided in subsection (d)(3), during such year.
(3) Quarterly adjustments.--The Class IV Pool blend price
established for a year may be adjusted at the beginning of each
of the second, third, and fourth quarters of such year to
reflect changes in the Board's determinations as to the amount
of milk that will enter the Pool during the year, the amount of
export dairy products eligible for blend price payments under
paragraph (4)(B), and dairy product export market prices during
such year.
(4) Application of blend pricing to milk entering the
pool.--The Board shall apply the Class IV Pool blend price
established under paragraph (1) or (3), as appropriate, to milk
entering the Pool by--
(A) collecting on each hundredweight of milk
entering the Pool, and depositing into the settlement
fund established under subsection (e), a uniform
adjustment amount equal to the difference between the
per hundredweight price support level for milk and the
blend price, except that, whenever the difference
between the price support level and the blend price is
less than 1 cent, or there is no difference between the
two figures, the Board may collect up to 1 cent on each
hundredweight of milk entering the Pool as necessary to
adequately fund the operation of the Pool and the
Board; and
(B) paying out of the settlement fund, on dairy
products commercially exported from the United States
(not including exports under the Dairy Export Incentive
Program) that cumulatively do not exceed the level of
exports for which the Class IV blend pricing shall be
established for the year, as provided in the Class IV
Pool plan for the year, an amount per hundredweight of
milk equivalent (total milk solids basis) exported that
reflects the difference between the milk equivalent
(total milk solids basis) market price for the product
exported and the Pool blend price.
(5) Refunds.--The Dairy Export Marketing Board shall
provide a refund of the entire amount remitted to the
settlement fund on a producer's milk entering the Class IV Pool
during a calendar year, if the producer provides evidence that
the producer did not increase marketings in that calendar year
when compared to the producer's marketings during the
immediately preceding calendar year. A refund under this
paragraph shall not be considered as any type of price support
or payment for purposes of sections 1211 and 1221 of the Food
Security Act of 1985 (16 U.S.C. 3811 and 3821).
(6) When blend price payments made.--Blend price payments
on dairy product exports under paragraph (4)(B) may be made
before, at the time, or after the dairy product involved is
exported as long as the milk equivalent (total milk solids
basis) market price for the exported product is adequately
documented and established to the satisfaction of the Board.
(d) Handler Remittances.--Each first handler of milk produced in
the 48 contiguous States and marketed by producers shall collect and
remit to the Dairy Export Marketing Board blend price adjustments
required under subsection (c)(4)(A) on all milk handled by such
handler.
(e) Settlement Fund.--
(1) In general.--The Dairy Export Marketing Board shall
establish a special fund, to be known as the ``settlement
fund''. Monies in such fund shall be available solely for the
use of the Board to operate the Class IV Pool, make blend price
payments, other payments as provided in paragraph (3), and
refunds under subsection (c)(5), as provided in the budgets of
the Board.
(2) Money into the fund.--There shall be deposited into the
settlement fund--
(A) all blend price adjustments remitted by first
handlers under subsection (d); and
(B) all revenues received by the Board from sales
of dairy products it has directly removed from the
domestic market or from any other source.
(3) Additional expenditures out of the settlement fund.--
Moneys in the settlement fund may be used by the Board for
export expansion and market development activities, and
administrative activities of the Board, provided for in
sections 4 and 5 of this Act.
(4) Termination of fund.--The settlement fund shall
terminate, and any monies remaining in the Fund returned to
milk producers as rebates under section 4(l), at such time as
the Board winds up its affairs and all legal obligations of the
Board.
(f) USDA Regulations.--The Secretary of Agriculture, by regulation,
shall establish--
(1) rules governing the manner in which blend price
adjustments shall be remitted by first handlers to the
settlement fund for milk marketed through Federal or State milk
marketing orders, and for milk marketed through producer-
handlers or other operations outside the Federal and State milk
marketing order systems;
(2) provisions for coordination of the operation of the
Class IV Pool with milk marketings under Federal and State milk
marketing orders, and with milk marketing done outside Federal
or State milk marketing orders;
(3) such other terms and conditions, not inconsistent with
the provisions of this Act, necessary to effectuate the
establishment and operation of the Class IV Pool, the operation
of the Dairy Export Marketing Board, and the implementation of
annual Class IV Pool plans; and
(4) provisions for assessment of penalties for violations
of this Act and the Secretary's regulations, and for the filing
of petitions by persons subject to such regulations objecting
to such regulations or seeking exemption from them. For the
purposes of regulations under this paragraph, notwithstanding
any other provision of law, the provisions of paragraphs (14)
and (15) of section 8c of the Agricultural Adjustment Act, as
reenacted and amended by the Agricultural Marketing Agreement
Act of 1937 (7 U.S.C. 608c), shall be applicable to this Act
and the regulations under this subsection and persons subject
to this Act or regulations as if such laws are orders, and such
persons are handlers, under section 8c.
SEC. 4. DAIRY EXPORT MARKETING BOARD.
(a) Establishment.--Not later than October 1, 1994, or 30 days
after the date of the enactment of this Act, whichever occurs later,
the Secretary of Agriculture shall establish the Dairy Export Marketing
Board to administer the national Class IV Pool established under
section 3, develop and implement Class IV Pool plans, and perform other
tasks of the Board provided for in this Act.
(b) Membership.--
(1) In general.--The Dairy Export Marketing Board shall
consist of 18 members appointed by the Secretary of Agriculture
as provided in this subsection. No person may be appointed to
the Board unless the Secretary determines that the person meets
the qualification criteria set out in paragraph (5).
(2) Composition of board.--
(A) Regional distribution.--The 18 seats on the
Board shall be evenly allocated among the 6 geographic
regions described in paragraph (3).
(B) Regional appointments.--Three members shall be
appointed to the Board from each of the 6 geographic
regions, as follows:
(i) 2 members shall be qualified milk
producers whose farms are located in that
region, each appointed from among nominees
selected by the milk producers in such region,
as provided in this subsection; and
(ii) 1 member shall be a qualified person
employed in some capacity in the dairy industry
other than as a producer, and selected in such
manner as the Secretary determines appropriate.
For any individual employed by a company or
organization that conducts business in more
than one such region, such individual will be
deemed to be located in the region in which
such individual's normal place of business is
located.
(3) Six geographic regions.--For purposes of making
regional appointments of persons to the Board, as provided in
paragraph (2), the 48 contiguous States shall be grouped into 6
regions, as follows:
(A) Region I: Connecticut, Maine, Massachusetts,
New Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, and Vermont.
(B) Region II: Illinois, Indiana, Iowa, Kansas,
Michigan, Missouri, Nebraska, and Ohio.
(C) Region III: Alabama, Arkansas, Delaware,
Florida, Georgia, Kentucky, Louisiana, Maryland,
Mississippi, North Carolina, Oklahoma, South Carolina,
Tennessee, Texas, Virginia, and West Virginia.
(D) Region IV: Wisconsin.
(E) Region V: Colorado, Idaho, Minnesota, Montana,
North Dakota, Oregon, South Dakota, Utah, Washington,
and Wyoming.
(F) Region VI: Arizona, California, Nevada, and New
Mexico.
(4) Selection of nominees for appointment as producer
members.--
(A) Two nominees required.--For the appointment of
the initial Board and whenever there is a vacancy on
the Board, the producers in each of the 6 geographic
regions described in paragraph (3) that has a producer
seat on the Board that is vacant shall choose, by
election, two producer nominees for such seat.
(B) Nomination process.--The Secretary shall begin
the process of appointing a person to fill a producer
seat on the Board by soliciting recommendations of the
names of producers in the region involved to be listed
on the ballot for election as a nominee for appointment
to that seat. The names and qualifications of producers
for inclusion on the ballot may be submitted by any
milk producer in the region, or any organization that
represents milk producers in such region. The Secretary
shall determine whether each such producer whose name
is submitted for inclusion on the ballot is eligible to
serve on the Board and meets the qualification criteria
set out in paragraph (5), and shall include on the
ballot the name of every qualified person determined to
be eligible and qualified if such person agrees to
permit his or her name being put on the ballot.
(C) Elections.--Following the development of any
ballot under subparagraph (B), the Secretary shall
conduct an election among milk producers in the region
involved to choose the two nominees for appointment to
the vacant seat to which the ballot applies. Each
producer shall have one vote in the election of each
nominee, and bloc voting as provided in subparagraph
(D) shall be permitted. The two persons receiving the
highest number of votes in the election shall be the
nominees.
(D) Voting by associations.--For the purpose of
elections under this paragraph, the Secretary shall
consider the vote cast by any cooperative association
of producers, engaged in a bona fide manner in
marketing milk or dairy products, as the vote of the
producers who are members of or under contract with
such cooperative association of producers. If a
cooperative association of producers elects to vote on
behalf of its members, such cooperative association
shall provide each producer, on whose behalf the
cooperative association is voting, a description of the
election process and a description of each nominee
(including the person's qualifications), together with
a statement of the manner in which the cooperative
association intends to cast its vote on behalf of the
membership. Such information shall inform the producer
of procedures to follow to cast an individual ballot
should the producer so choose within the period of time
established by the Secretary for casting ballots. Such
notification shall be made at least 15 days prior to
the election and shall include an official ballot. The
ballots shall be tabulated by the Secretary and the
vote of the cooperative association shall be adjusted
to reflect such individual votes.
(E) Additional rules.--The Secretary shall
establish such additional rules for the conduct of
elections to choose producer nominees as are
appropriate.
(5) Qualification criteria.--
(A) Basic criteria.--The name of a person may not
be included on the ballot in an election to choose
producer nominees for the Board, nor may the Secretary
appoint any member to the Board, unless the Secretary
determines that such person meets the following
qualification criteria:
(i) the person must have substantial
experience or a high level of expertise in the
production of milk, the marketing of milk or
dairy products, or the financing of such
marketing activities;
(ii) if the person is being considered for
a producer seat on the Board, the person must
have been a milk producer for at least 5 years;
and
(iii) if the person is being considered for
a non-producer seat on the board, the person
must have leadership experience in his or her
field of expertise.
(B) Further criteria.--In choosing among producer
nominees or directly selecting non-producer members for
appointment to the Board, the Secretary shall give
priority to persons with--
(i) if the appointment is to a non-producer
seat on the Board, substantial experience as a
professional milk marketer; or
(ii) practical familiarity with, or
demonstrated knowledge of, the process of
marketing agricultural commodities for export
or the financing of such transactions; or
(iii) practical familiarity with, or
demonstrated knowledge of, the mechanics and
market effects of moving dairy products from
the processing plant into the market; or
(iv) substantial experience with the
Federal milk price support program, or
Commodity Credit Corporation removals of dairy
products from the market under that program, or
operations of milk marketing order blend price
pools.
(6) Diversity of appointment.--In making appointments to
the Board, the Secretary shall ensure that not more than one
person employed by a particular company or associated with a
particular cooperative organization that can bloc vote in the
election of producer nominees sits on the Board at the same
time.
(7) Rejection.--The Secretary may reject any nominee
selected by milk producers. If there are insufficient
nominations from which to appoint members to the Board as a
result of the Secretary rejecting nominees selected by milk
producers, milk producers shall select additional nominees, as
provided in this subsection.
(8) Time schedule.--The Secretary shall conduct the
regional elections of producer nominees for appointment to the
initial Board and appoint all the initial members to the Board
no later than October 1, 1994, or 30 days after the date of the
enactment of this Act, whichever occurs later. Thereafter,
whenever a seat becomes vacant for any reason, the Secretary,
as soon as practicable, shall conduct an election (if the
vacant seat is a producer seat) and make an appointment of a
person to fill the vacant seat.
(9) Terms of members.--Each member of the Board shall serve
for a 3-year term except that terms shall be staggered, as
follows:
(A) 4 of the producer members and 2 of the non-
producer members appointed to the initial Board shall
have a 1-year term;
(B) 4 of the producer members and 2 of the non-
producer members appointed to the initial Board shall
have a 2-year term; and
(C) 4 of the producer members and 2 of the non-
producer members appointed to the initial Board shall
have a full 3-year term.
(10) Operations committee.--The Board may establish an
Operations Committee for consultation and advice, consisting of
persons not sitting on the Board who as a group are suitably
qualified, either in experience or knowledge, in the various
aspects of the dairy industry, including but not limited to
marketing order blend price pools, export marketing, and dairy
research and production. The Operations Committee shall have no
right to cast votes in any matter voted on by the Board or the
Board's member committees, nor shall it have the power to
perform any of the functions of the Board under this Act.
(11) Conflict rules.--The members of the Board shall be
subject to such conflict of interest rules as determined
appropriate by the Secretary.
(12) Reimbursement for expenses.--Members of the Board and
the Operating Committee shall serve without pay, but shall be
allowed reimbursement for expenses incurred in their service on
the Board or Committee, including reasonable travel costs and
out-of-pocket expenses when required to be away from their home
or place of business in the service of the Board or Committee.
(13) Removal for cause.--The Secretary may remove any
member of the Board for good cause shown.
(14) Termination of the board.--The Board shall terminate
at such date--not later than June 30, 2000--agreed on by the
Secretary and the Board, unless extended by later enactment of
Congress.
(c) Board Procedures.--
(1) Meetings of the board.--
(A) First meeting.--Within 2 weeks after a quorum
has been appointed to the initial Dairy Export
Marketing Board, the Secretary of Agriculture shall
convene the Board for its initial meeting; and at that
meeting the Board shall elect officers and adopt
written bylaws and rules of procedure to govern its
meetings, and determine a place of domicile for the
Board.
(B) Subsequent meetings.--Following the initial
meeting, the Board shall meet at the call of the chair,
but at least once every 3 months.
(2) Quorum.--A quorum of the Board shall be 10 persons.
(3) Notice to secretary; ex officio representation.--The
Board shall notify the Secretary of Agriculture in advance of
each meeting of the Board. The Secretary, or a representative
of the Secretary, shall attend each meeting as a non-voting ex
officio member of the Board.
(d) Duties of the Board.--The Dairy Export Marketing Board shall
have the duties to--
(1) prepare annually, for each of the 1995 through 1999
calendar years, a plan for the operation during that year of
the Class IV Pool established under section 3, and establish a
per hundredweight blend price for milk entering the Pool during
such year as provided in this Act;
(2) before the beginning of the second, third, and fourth
quarter of each calendar year, make adjustments in the blend
price for milk in the Pool as necessary to reflect changes in
the Board's determinations as to the amount of milk that will
enter the Pool during the year, the amount of export dairy
products eligible for blend price payments under section
3(c)(4)(B) of this Act, and dairy product export market prices
during such year;
(3) prepare the Board's proposed budget for each calendar
year it is in operation, as provided in subsection (f);
(4) implement each annual Class IV Pool plan and budget,
administer the Class IV Pool, and coordinate activities under
the plan with the programs of the Secretary of Agriculture;
(5) evaluate results under each annual Class IV Pool plan
and report on the evaluations to the Secretary, and provide a
copy of each such report to the Senate Committee on
Agriculture, Nutrition, and Forestry and the House Committee on
Agriculture;
(6) with respect to the estimate of the value and volume of
Commodity Credit Corporation milk and milk product purchases
made by the Secretary by November 20 of each year under section
204(f) of the Agricultural Act of 1949, in cooperation with the
Secretary, make monthly revisions of such estimate for each
month of the year to which the estimate applies;
(7) receive, investigate, and report to the Secretary
complaints of violations of this Act and regulations issued
under this Act; and
(8) manage the settlement fund established under section
3(e).
(e) Powers of the Board.--
(1) General powers.--The Dairy Export Marketing Board may--
(A) adopt bylaws and issue rules and regulations
governing the manner in which its business may be
conducted and the powers vested in it may be exercised;
(B) sue and be sued, complain and defend, in any
court of law or equity, State or Federal. All suits of
a civil nature at common law or in equity to which the
Board shall be a party shall be deemed to arise under
the laws of the United States, and the United States
district courts shall have original jurisdiction
thereof, without regard to the amount in controversy,
and the Board, in any capacity, without bond or
security, may remove any such action, suit, or
proceeding from a State court to the United States
district court by following any procedure for removal
then in effect. Any suit filed against the Board shall
be filed in the district in which the Board is
domiciled or in the district wherein the plaintiff
resides or is engaged in business;
(C) incur and pay for administrative and other
expenses under this Act;
(D) appoint staff, define their duties, and fix and
provide their compensation;
(E) enter into contracts and agreements as
necessary in the conduct of its business;
(F) contract for the use, in accordance with the
usual customs of trade and commerce, of plants and
facilities for the physical handling, storage,
processing, servicing, and transportation of dairy
products subject to its control;
(G) make final and conclusive settlement and
adjustment of any claims by or against the Board or its
accounts;
(H) use and expend monies in the settlement fund
established under section 3(e); and
(I) exercise other powers that are incidental to
its performance of the functions required or authorized
for it under this Act.
(2) Specific powers.--To meet its duties under this Act and
implement annual Class IV Pool plans, the Board may use its
general powers to--
(A) remove, or cause the removal, of dairy products
from the domestic commercial market or accept donated
stocks from the Commodity Credit Corporation, and
maintain such products in inventory;
(B) dispose, or cause the disposal, of dairy
products it has removed from the market or received
from the Commodity Credit Corporation through outlets
that are not in competition with United States
commercial markets, primarily through export sales;
(C) transfer to the Commodity Credit Corporation,
at the Corporation's announced price, dairy products it
has removed from the market, as necessary for Board or
Corporation stock management purposes, and the
regulations of the Corporation shall so provide;
(D) cause the export of dairy cattle;
(E) conduct other activities related to market
development and product disposal specified in section
5, as necessary to meet its responsibilities under this
Act and annual Class IV Pool plans; and
(F) recommend to the Secretary amendments to the
regulations issued under this Act.
(f) Budgets of the Board.--
(1) Preparation.--Not later than October 31 of each of the
years 1994 through 1998 (or, with respect to the first budget,
60 days after the date of the enactment of this Act if that
sixtieth day is later than October 31, 1994) the Dairy Export
Marketing Board shall prepare a budget of its anticipated
expenses and disbursements in the upcoming calendar year.
(2) Items in each budget.--
(A) In general.--Each such budget shall provide--
(i) a detailed account of the Board's
anticipated administrative expenses and other
outlays to be incurred in implementing the
annual Class IV Pool plan for the upcoming
year;
(ii) an estimate of expected blend price
revenues and other revenues of, and blend price
payments on dairy exports and refunds made by,
the Board during the upcoming year, to which
the budget of all other expenditures of the
Board during such year shall be reconciled;
(iii) an analysis of anticipated
expenditures for administrative expenses,
showing how they are being kept to the minimum
necessary to operate the Class IV Pool and the
programs of the Board; and
(iv) a description of the anticipated
contracts during such year for the removal and
disposition of dairy products.
(B) Additional items.--The budget prepared for
calendar year 1995 shall include an additional amount
to reimburse the Commodity Credit Corporation for
expenditures to cover expenses of the Board prior to
January 1, 1995, as provided for in subsection
(h)(1)(B); and the budget prepared for calendar year
1999 shall include an additional amount to cover the
Board's administrative expenses to be incurred in
calendar year 2000 in wrapping up its business.
(3) Submission with plan.--Each budget prepared under this
subsection shall be submitted to the Secretary of Agriculture
with the annual Class IV Pool plan for the year involved.
(g) Administration; Contracting.--
(1) Limitation on administrative expenses.--For any
calendar year in which the Secretary of Agriculture estimates
under section 204(f) of the Agricultural Act of 1949 that the
level of Commodity Credit Corporation purchases of milk and the
products of milk will exceed 5,000,000,000 pounds (milk
equivalent, total milk solids basis), the Board may not budget
for or incur administrative expenses (including the cost of
paying employees of the Board) in the year that exceed the
lesser of--
(A) $2,000,000, or
(B) 5 percent of the annual budget of the Board for
the year.
(2) Contracts for services.--
(A) In general.--To ensure efficient use of funds
available to the Board under this Act and avoid
duplication of efforts, whenever possible, the Board
shall enter into contracts and agreements for the
removal of dairy products from the market, the
disposition of such products, and such other
nonadministrative activities of the Board, and for the
payment of cost thereof with funds available to the
Board under this Act.
(B) Scope.--The tasks that may be included under a
contract or agreement include, but are not limited to,
offers to buy, purchases of dairy products, storage and
delivery of dairy products, management of dairy product
inventories, and statistical collection and analysis.
(C) Requirements.--In any contract or agreement of
the Board under this paragraph, the contracting or
agreeing party shall agree to keep accurate records of
all its transactions, account for funds received and
expended, make periodic reports to the Board of
activities conducted, and make such other reports as
the Board may require.
(3) Direct sales by others.--The Board shall ensure, to the
extent practicable, that the actual export marketing and sale
of dairy products for which blend price payments are made
available under this Act are done by dairy cooperatives or
other persons engaged in international marketing.
(h) Funding for the Board; Expenditures.--
(1) In general.--
(A) Settlement fund.--Monies in the settlement fund
established under section 3(e) shall be available to
the Dairy Export Marketing Board, effective January 1,
1995, for expenditure as provided in this subsection.
(B) CCC funds.--Notwithstanding any other provision
of law, prior to January 1, 1995, the activities of the
Board in starting up operation and preparing the
initial annual Class IV Pool plan shall be paid with
funds of the Commodity Credit Corporation. The
Corporation shall be reimbursed by the Board for such
payments from monies placed in the settlement fund
during 1995.
(2) Limitation.--Monies in the settlement fund may be
expended by the Board only to cover budgeted activities of the
Board under a budget established under subsection (f),
including expenditures to transfer to the Commodity Credit
Corporation general account reimbursements provided for in
paragraph (1)(B), and to provide for rebates to milk producers
of excess monies remaining in the Fund when the Board is
terminated, as provided in subsection (l).
(3) Carryover of funds.--To allow for continuity of
activities of the Board from year to year, monies in the
settlement fund shall be available to the Board without fiscal
or calendar year limitation, except that, in any year into
which monies are carried over, any Class IV Pool blend price
for the year under section 3(c) shall be reduced so as to
reduce blend price adjustments remitted to the settlement fund
during such year by the amount of the carryover.
(j) Books and Records.--
(1) In general.--The Dairy Export Marketing Board shall--
(A) maintain such books and records (which shall be
available to the Secretary for inspection and audit) as
the Secretary may prescribe;
(B) prepare and submit to the Secretary, from time
to time, such reports as the Secretary may prescribe;
and
(C) account for the receipt and disbursement of all
funds entrusted to the Board.
(2) Audits.--The Board shall cause its books and records to
be audited by an independent auditor at the end of each fiscal
year, and a report of each such audit to be submitted to the
Secretary.
(k) FACA Not Applicable.--The Federal Advisory Committee Act (5
U.S.C. App. 2) shall not apply to the Dairy Export Marketing Board, or
the operations of the Board.
(l) Rebates on Termination of Board.--
(1) In general.--At the time that the Dairy Export
Marketing Board terminates and winds up its affairs, any funds
remaining in the settlement fund established under section 3(e)
of this Act shall be rebated to milk producers who have been
subject to the operation of the Class IV Pool under section 3,
unless the administrative costs of distributing any such rebate
will exceed the amount rebated (in which case, the amount shall
revert to the Commodity Credit Corporation general account).
Rebates shall be made pro rata, based on the cumulative amount
of milk entered into the Class IV Pool by each milk producer to
which refunds under section 3(c)(5) do not apply during the
period the Class IV Pool was in operation.
(2) Rebate not deemed a government payment.--Any rebate
under this paragraph shall not be considered as any type of
price support or payment for purposes of section 1211 or 1212
of the Food Security Act of 1985 (16 U.S.C. 3811 and 3821).
SEC. 5. ANNUAL CLASS IV POOL PLANS.
(a) Requirements.--The Dairy Export Marketing Board shall prepare
and implement an annual Class IV Pool plan for each of the calendar
years 1995 through 1999, as provided in this section, that shall
provide a business plan of operation for the Class IV Pool and the
Board for the year, and shall include the following elements:
(1) Generally.--The plan for any year may include such of
the activities described in subsection (d) or comparable
activities within the authority of the Board that are
determined by the Board to be appropriate for such year.
(2) When estimated ccc purchases exceed 5,000,000,000
pounds.--For any year in which the Secretary of Agriculture
estimates, by November 20 of the preceding year under section
204(f) of the Agricultural Act of 1949, that Commodity Credit
Corporation purchases of milk and the products of milk (less
sales under section 407 of the Agricultural Act of 1949 for
unrestricted use) will exceed 5,000,000,000 pounds (milk
equivalent, total milk solids basis), the Plan shall provide
for--
(A) the establishment under section 3 of a blend
price for milk entering the Pool that will cover Pool
blend price payments on exports of dairy products
during such year that are equivalent in milk (total
milk solids basis) to the portion of the estimated
Commodity Credit Corporation purchases (less sales
under section 407 of the Agricultural Act of 1949 for
unrestricted use) in excess of 5,000,000,000 pounds but
not in excess of 7,000,000,000 pounds; and
(B) other appropriate measures by the Board to
stabilize milk and dairy product prices, and to improve
farm income during such year.
(3) When estimated ccc purchases exceed 7,000,000,000
pounds.--For any year in which the Secretary estimates, by
November 20 of the preceding year under section 204(f) of the
Agricultural Act of 1949, that Commodity Credit Corporation
purchases of milk and the products of milk (less sales under
section 407 of the Agricultural Act of 1949 for unrestricted
use) will exceed 7,000,000,000 pounds (milk equivalent, total
milk solids basis), the plan shall provide for such market
intervention measures that the Board agrees with the Commodity
Credit Corporation that it should undertake if approved by the
Secretary, regarding those anticipated purchases in excess of
7,000,000,000 pounds, using for such purposes monies
transferred to the settlement fund established under section
3(e) of this Act by the Commodity Credit Corporation from the
collected reductions in price under section 204(g) of the
Agricultural Act of 1949.
(4) Continuation and carryover.--For the second and
succeeding plans, to the extent necessary or appropriate, the
plan shall provide for the continuation of activities initiated
in the preceding year and the carryover of funds made available
for the preceding year but not expended and the payment of
obligations incurred in the preceding year but not paid.
(5) 1999 plan.--The plan for calendar year 1999 shall cover
activities and expenditures of the Board in calendar year 2000
to wind up the business of the Board.
(b) Schedule for Development of Plan.--Each annual Class IV Pool
plan for a year--
(1) shall be prepared, and the Class IV blend price for the
year shall be determined, during the period after the
preliminary estimate of net Commodity Credit Corporation
purchases of milk and milk products for a year is issued on
August 1 of the preceding year; and
(2) shall be submitted to the Secretary not later than
October 31 preceding the year the plan addresses, except that
the plan for 1995 shall be submitted not later than 60 days
after the date of the enactment of this Act if such sixtieth
day is later than October 31, 1994.
(c) Quarterly Revisions.--
(1) In general.--The annual Class IV Pool plan for any year
shall be updated and revised at the beginning of each of the
second, third, and fourth quarters of the year, or at such
other times determined necessary by the Board.
(2) Revision of deduction rate.--Any revision of a plan at
the beginning of the second, third, or fourth quarter of a
year, as provided in paragraph (1), may include a revision in
the blend price for milk entering the Class IV Pool under
section 3 for such year, as necessary to reflect changes in the
Board's determinations as to the amount of milk that will enter
the Pool during the year, the amount of export dairy products
eligible for blend price payments under section 3(c)(4)(B) of
this Act, and dairy product export market prices during such
year.
(d) Activities of the Board in Implementing a Plan.--
(1) When estimated ccc purchases exceed 5,000,000,000
pounds.--The Dairy Export Marketing Board, in implementing the
annual Class IV Pool plan for any year in which the Secretary
estimates, by November 20 of the preceding year under section
204(f) of the Agricultural Act of 1949, that Commodity Credit
Corporation purchases of milk and the products of milk (less
sales under section 407 of the Agricultural Act of 1949 for
unrestricted use) will exceed 5,000,000,000 pounds (milk
equivalent, total milk solids basis), the Board may undertake
the following activities with respect to the amount of milk
included in the portion of Corporation purchases in excess of
5,000,000,000 pounds, in addition to administering the Pool and
managing the settlement fund estimated under section 3(e):
(A) To acquire, or otherwise cause the removal of,
dairy products from domestic commercial markets on the
basis of bids by sellers in response to invitations for
bids announced by the Board.
(B) To acquire, or otherwise cause the removal of,
dairy products from domestic commercial markets at
announced prices during periods announced by the Board.
(C) To implement a program to cause the export of
dairy products the Board has removed from the market,
in coordination with the activities of the Foreign
Agricultural Service in implementing the Dairy Export
Incentive Program under section 153 of the Food
Security Act of 1985 (15 U.S.C. 713a-14). Under the
program, the Board may cause the export of dairy
products with the assistance of export bonuses provided
by the Board, and determined on the basis of bids by
exporters in response to invitations for bids announced
by the Board. In implementing such a program, the Board
shall enter into an agreement with the General Sales
Manager to seek the Manager's prior approval of any
export transactions under the program. This program
shall not be implemented as a replacement for the Dairy
Export Incentive Program, but as a supplement to it.
(D) To implement a program to cause the export of
dairy cattle. Under the program, the Board may cause
the export of dairy cattle with the assistance of
export bonuses provided by the Board, and determined on
the basis of bids by exporters in response to
invitations for bids announced by the Board.
(E) To effect the sale abroad, at world market
prices, of dairy products removed from the market by
the Board.
(F) To effect the domestic sale for unrestricted
use of dairy products removed from the market by the
Board at market prices, but in no case less than 110
percent of the Commodity Credit Corporation announced
purchase prices for the products.
(G) To donate, through the Secretary, products the
Board has removed from the market to domestic and
international feeding and aid programs, as needed for
emergency or disaster assistance.
(H) To transfer dairy products it has removed from
the market to the Commodity Credit Corporation at the
Corporation's announced purchase price (less an amount,
determined by the Secretary, to represent the average
level of bonus paid to exporters under the Dairy Export
Incentive Program), as necessary to manage Corporation
or Board inventories.
(2) CCC operations.--Notwithstanding any other provision of
law, the Commodity Credit Corporation shall accept the transfer
of dairy products from the Board as provided in paragraph
(1)(H), and at any time may transfer its excess inventories of
dairy products to the control of the Board, as necessary to
manage Corporation or Board stocks or as provided for in
paragraph (4)(A).
(3) When estimated ccc purchases are 5,000,000,000 pounds
or less.--The Board, in implementing the annual Class IV Pool
plan for any year in which the Secretary estimates, by November
20 of the preceding year under section 204(f) of the
Agricultural Act of 1949, that Commodity Credit Corporation
purchases of milk and the products of milk (less sales under
section 407 of the Agricultural Act of 1949 for unrestricted
use) will be 5,000,000,000 pounds or less (milk equivalent,
total milk solids basis), the Board may undertake the following
activities as authorized under the plan:
(A) To dispose of carryover stocks of dairy
products it had removed from the market in a previous
year, in any manner as specified in paragraph (1).
(B) To cause the export of dairy heifers with the
assistance of export bonuses provided by the Board on
the basis of bids by exporters in response to
invitations for bids announced by the Board.
(4) In general.--The Board, in implementing the annual
Class IV Pool plan for any year, may undertake the following
activities as authorized under the plan:
(A) To accept stocks of dairy products transferred
from the Commodity Credit Corporation for use in
projects under the plan.
(B) To provide funds to the Foreign Agricultural
Service cooperator organization for dairy products to
implement export market development projects.
(C) To work with the Commodity Credit Corporation,
the Foreign Agricultural Service, marketing
organizations, and other entities in the dairy industry
in facilitating export sales of dairy products.
(D) To work with the Commodity Credit Corporation
and, through the Secretary, humanitarian relief and
development organizations in providing dairy products
for emergency relief and development programs.
(E) To develop surplus disposal opportunities for
use in years in which removals of surplus dairy
products will be needed.
(5) Contracts and agreements.--In order to efficiently
manage stock acquisition and disposition under the annual Class
IV Pool plans and to avoid excessive overhead and unnecessary
duplication in any area of the Board's operations, the Board
shall contract or enter agreements, as provided in section
4(g)(2), for the performance of any or all of the functions
described in paragraphs (1), (3), and (4) or similar functions
included in annual plans.
(6) Limits on market intervention.--The Board shall ensure
that any activity under an annual Class IV Pool plan does not
interfere with normal commercial inventory build-ups of dairy
products that are necessary to ensure adequate supplies on a
year-round basis. In this regard, the criterion the Board shall
use in planning activities under any plan is that intervention
by the Board in the market should promote moderate, regulated
market adjustments and prevent steep or contraseasonal changes
in the prices for dairy products.
SEC. 6. REVISIONS OF AUTHORITY FOR ``EXCESS PURCHASES'' REDUCTIONS IN
PRICE.
Effective January 1, 1995, subsection (g) of section 204 of the
Agricultural Act of 1949 (7 U.S.C. 1446e) is amended by adding at the
end thereof the following:
``(3) Targeted reductions.--
``(A) In general.--At any time during which a
reduction in price under this subsection is in effect,
if during the two consecutive months immediately
preceding any month, the United States average
manufacturing grade milk price, as reported by the
Secretary, does not exceed the Federal support price
for milk by more than 50 cents per hundredweight,
beginning the month following such two consecutive
months the reduction in price shall cease being
collected on a uniform basis on all milk produced in
the 48 contiguous States and marketed by producers for
commercial use, and shall be collected from each milk
producer in the contiguous 48 States only on the
quantity of milk marketed during each month by the
producer in excess of the producer's monthly base for
milk marketings.
``(B) Rate of reduction.--The amount of the
reduction in the price received by producers on such
over-base milk marketings shall be an amount per
hundredweight determined by the Secretary to be
sufficient, when applied to the amount of all such
over-base milk marketings during the remainder of the
year, as estimated by the Secretary, to result in total
reductions during the remainder of the year equal to
the total amounts of reductions in price that would
otherwise be made on a uniform basis on all milk
marketings under the procedures provided in paragraph
(2).
``(C) Bases.--For purposes of determining, for each
milk producer, whether the producer is subject to the
targeted reduction in price under this paragraph, an
annual base made up to 12 monthly bases will be
established by the Secretary for each dairy farm
reflecting the farm's milk marketings during the
preceding year. New milk producers will be assigned a
base equal to 75 percent of their milk marketings
during each month of the year the reduction is in
effect.
``(D) Maximum targeted reductions.--No milk
producer shall be liable for a targeted reduction in
price under this paragraph on more than 25 percent of
the producer's marketings during any month targeted
reductions are in effect.
``(E) Termination of targeted reductions.--If,
after targeted reductions in price are implemented
during a year under this paragraph, the United States
average manufacturing grade milk price, as reported by
the Secretary, rises to exceed the support price for
milk by more than $1.50 per hundredweight during two
consecutive months of such year, beginning the
following month, the targeted reduction in price will
cease being collected, and the reduction in price shall
be made uniformly on all milk produced in the 48
contiguous States and marketed by producers for
commercial use in the amount provided for in paragraph
(2).
``(4) Termination of all reductions.--Notwithstanding any
other provision of this subsection, if at any time during a
year in which reductions in price are being made under this
subsection, the Secretary, in consultation with the Dairy
Export Marketing Board established under section 4 of the Dairy
Producer Market Stabilization and Export Development Act of
1994, projects (based on the monthly revised estimates of
Commodity Credit Corporation purchases of milk and the products
of milk made under subsection (f)(2)) that Corporation
purchases of milk and the products of milk (less sales under
section 407 of the Agricultural Act of 1949 for unrestricted
use) during such year shall not exceed 7,000,000,000 pounds
(milk equivalent, total milk solids basis), less such amounts
of milk equivalent (total milk solids basis) exported in the
form of dairy products on which blend price payments are made
under section 3 of the Dairy Producer Market Stabilization and
Export Development Act of 1994 for that year, the reduction in
price under this subsection will cease being made for the
remainder of the year.
``(5) Special refunds.--
``(A) In general.--If, at the end of any year in
which reductions in price are made under this
subsection, it is determined by the Secretary that
actual Commodity Credit Corporation purchases of milk
and the products of milk (less sales under section 407
of the Agricultural Act of 1949 for unrestricted use)
during that year did not exceed 7,000,000,000 pounds
(milk equivalent, total milk solids basis) less such
amounts of milk equivalent (total milk solids basis)
exported in the form of dairy products on which blend
price payments are made under section 3 of the Dairy
Producer Market Stabilization and Export Development
Act of 1994 for that year, the Secretary shall provide
refunds of all the reductions in price under this
subsection made during such year, other than reduction
monies transferred to the Board under an agreement made
under section 5(a)(3) of such Act. The transferred
amount not subject to the special refunds shall be
prorated among all producers eligible for such refunds
on the basis of the reductions in price collected from
such producers during the year; and the prorated amount
for each producer shall be deducted from the amount of
refund otherwise due to the producer under this
paragraph.
``(B) Refund not deemed a government payment.--Any
refund under this paragraph shall not be considered as
any type of price support or payment for purposes of
section 1211 or 1212 of the Food Security Act of 1985
(16 U.S.C. 3811 and 3821).''.
SEC. 7. DAIRY PROGRAM EXTENSIONS; ESTIMATES OF CCC PURCHASES.
(a) Dairy Program Extensions.--
(1) In general.--Section 204 of the Agricultural Act of
1949 (7 U.S.C. 1446e) is amended by--
(A) amending the section heading to read as
follows:
``SEC. 204. MILK PRICE SUPPORT AND CERTAIN COLLECTIONS FROM PRODUCERS
IN CALENDAR YEARS 1991 THROUGH 1999.'';
(B) in subsections (a), (b), (d)(1)(A), (d)(2)(A),
(d)(3), (g)(1), and (k), striking out ``1996'' each
place it appears and inserting in lieu thereof
``1999''; and
(C) in subsection (g)(2), striking out ``1996'' and
inserting in lieu thereof ``1998''.
(2) Transfer to military and veterans hospitals.--
Subsections (a) and (b) of section 202 of the Agricultural Act
of 1949 (7 U.S.C. 1446e) are amended by striking out ``1995''
both places it appears and inserting in lieu thereof ``1999''.
(3) Federal milk marketing orders.--Section 101(b) of the
Agriculture and Food Act of 1981 (7 U.S.C. 603c note) is
amended by striking out ``1995'' and inserting in lieu thereof
``1999''.
(4) Dairy indemnity program.--Section 3 of Public Law 90-
484 (7 U.S.C. 450l) is amended by striking out ``1995'' and
inserting in lieu thereof ``1999''.
(5) Dairy export incentive program; ccc export dairy
sales.--The Food Security Act of 1985 is amended by--
(A) in section 153(a) (15 U.S.C. 713a-14(a)),
striking out ``1995'' and inserting in lieu thereof
``1999''; and
(B) in section 1163 (7 U.S.C. 1731 note), striking
out ``1995'' each place it appears and inserting in
lieu thereof ``1999''.
(b) Estimates of CCC Purchases.--Subsection (f) of section 204 of
the Agricultural Act of 1949 (7 U.S.C. 1446e(f)) is amended to read as
follows:
``(f) Estimates of CCC Purchases.--
``(1) In general.--On August 1 and by November 20 of each
of the calendar years 1991 through 1998, the Secretary shall
notify the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate regarding the value and volume of
milk and milk product purchases on a milk equivalent, total
milk solids basis, the Secretary estimates that the Commodity
Credit Corporation will make during the upcoming calendar year,
before the effects from the operation of the national Class IV
Pool operated under section 3 of the Dairy Producer Market
Stabilization and Export Development Act of 1994 for such year
or from any reduction in price under subsection (g) made during
such year are calculated.
``(2) Revisions.--The estimates of Commodity Credit
Corporation purchases made under paragraph (1) shall be revised
monthly during the year by the Dairy Export Marketing Board
established under section 4 of the Dairy Producer Market
Stabilization and Export Development Act of 1994, in
cooperation with the Secretary.
``(3) Net purchases equivalent to net removals.--As used in
this section, the phrases `purchase of milk and the products of
milk' and `purchases of milk and the products of milk' shall
include all removals of dairy products from the domestic market
under this section, either by direct purchase or by export
under the Dairy Export Incentive Program under section 153 of
the Food Security Act of 1985.''.
SEC. 8. FEDERAL MILK ORDER SUPPLY BALANCING COST SHARING PLAN.
Section 8c(5) of the Agricultural Adjustment Act (7 U.S.C.
608c(5)), reenacted with amendments by the Agricultural Marketing
Agreement Act of 1937, is amended by adding at the end thereof the
following new subparagraph:
``(M) Authorizing the market administrator to
deduct and set aside an amount when making the uniform
milk price calculation each month, to be available to
the market administrator to--
``(i) reimburse handlers for additional
costs incurred in obtaining supplemental milk
supplies when local supplies are insufficient
for market needs;
``(ii) reimburse handlers for costs
incurred in disposing of milk that exceeds
local market needs; and
``(iii) pay a distant plant that makes a
binding commitment to supply supplemental milk
to the market when called upon by the market
administrator.''.
<all>
HR 4235 IH----2
HR 4235 IH----3
HR 4235 IH----4