[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5288 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 5288

To amend the Dairy Production Stabilization Act of 1983 to establish a 
                   dairy price stabilization program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 12, 2010

    Mr. Costa (for himself, Mr. Welch, Mr. Courtney, Mr. Larsen of 
  Washington, and Mr. Larson of Connecticut) introduced the following 
        bill; which was referred to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
To amend the Dairy Production Stabilization Act of 1983 to establish a 
                   dairy price stabilization program.

    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 Price Stabilization Program 
Act of 2010''.

SEC. 2. DAIRY PRICE STABILIZATION PROGRAM.

    The Dairy Production Stabilization Act of 1983 (7 U.S.C. 1421 note; 
title I of Public Law 98-189) is amended by adding at the end the 
following new subtitle:

            ``Subtitle D--Dairy Price Stabilization Program

``SEC. 141. DEFINITIONS.

    ``In this subtitle:
            ``(1) Allowable milk marketing.--The term `allowable milk 
        marketing' means the quantity of milk production that a dairy 
        facility may produce during a quarter without incurring a 
        market access fee, as determined under section 143(b)(1).
            ``(2) Allowable milk marketing growth rate.--The term 
        `allowable milk marketing growth rate' means the allowable milk 
        marketing growth rate established by the Secretary for the 
        applicable quarter under section 143(b)(1).
            ``(3) Alternative market access fee.--The term `alternative 
        market access fee' means a fee described in section 143(b)(2) 
        that is assessed on all milk produced in excess of the 
        allowable milk marketings of a dairy facility.
            ``(4) Appeals committee.--The term `Appeals Committee' 
        means the producer appeals committee established under section 
        142(c).
            ``(5) Dairy facility.--The term `dairy facility' means an 
        operation on a property, or set of properties that are 
        contiguous or separated only by a public right-of-way, that is 
        directly related to raising cows or producing milk from cows 
        for the purpose of making a profit or for a livelihood.
            ``(6) Market access fee dividend.--The term `market access 
        fee dividend' means the market access fees collected during an 
        applicable quarter that are redistributed to dairy facilities 
        with allowable milk marketings under section 143(e).
            ``(7) Milk handler.--The term `milk handler' means a person 
        that makes payments to a dairy facility for milk produced in 
        the United States and purchased from the dairy facility for 
        commercial use.
            ``(8) Order.--The term `order' means an order issued by the 
        Secretary under section 142(a).
            ``(9) Producer.--The term `producer' means all persons 
        engaged in the production of bovine milk for commercial use. 
        All producers holding a milk license shall be included.
            ``(10) Producer board.--The term `Producer Board' means the 
        Producer Board established under section 142(b).
            ``(11) Program.--The term `Program' means the Dairy Price 
        Stabilization Program established under section 142(a).
            ``(12) Quarter.--The term `quarter' means each of the 
        following 4 quarters of a calendar year:
                    ``(A) January 1 through March 31.
                    ``(B) April 1 through June 30.
                    ``(C) July 1 through September 30.
                    ``(D) October 1 through December 31.
            ``(13) Region.--The term `region' means each of the 
        following
                    ``(A) Region 1, Northeast, consisting of the States 
                of Connecticut, Delaware, Maine, Maryland, 
                Massachusetts, New Hampshire, New Jersey, New York, 
                Pennsylvania, Rhode Island, Vermont, and West Virginia.
                    ``(B) Region 2, Southeast, consisting of the States 
                of Alabama, Arkansas, Florida, Georgia, Kentucky, 
                Louisiana, Mississippi, Missouri, North Carolina, South 
                Carolina, Tennessee, and Virginia.
                    ``(C) Region 3, Midwest, consisting of the States 
                of Illinois, Indiana, Iowa, Michigan, Minnesota, 
                Nebraska, North Dakota, Ohio, South Dakota, and 
                Wisconsin.
                    ``(D) Region 4, South, consisting of the States of 
                Kansas, New Mexico, Oklahoma, and Texas.
                    ``(E) Region 5, Northwest, consisting of the States 
                of Colorado, Idaho, Montana, Oregon, Utah, Washington, 
                and Wyoming.
                    ``(F) Region 6, West, consisting of the States of 
                Arizona, California, and Nevada.
            ``(14) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture, acting in consultation with the Appeals 
        Committee or Producer Board (as appropriate).
            ``(15) Standard market access fee.--The term `standard 
        market access fee' means a fee assessed under section 143(d) on 
        all milk produced by a dairy facility.

``SEC. 142. ESTABLISHMENT.

    ``(a) Issuance of Orders.--
            ``(1) Proposed order.--Not later than 60 days after the 
        date of the enactment of this subtitle, the Secretary shall 
        publish in the Federal Register a proposed order to establish a 
        program to be known as the `Dairy Price Stabilization Program' 
        that shall apply to all dairy facilities within the contiguous 
        United States that produce milk for sale commercially.
            ``(2) Referendum on proposed order.--Not later than 90 days 
        after the date of the enactment of this subtitle, the Secretary 
        shall conduct a referendum among producers who, during a 
        representative period (as determined by the Secretary), have 
        been engaged in the production of milk for commercial use for 
        the purpose of ascertaining whether the proposed order shall 
        take effect. The Program shall be implemented only if the 
        Secretary determines that it has been approved by not less than 
        a majority of the eligible producers voting in the referendum. 
        If implementation of the Program is not approved by a majority 
        of the eligible producers voting in the referendum, the 
        Secretary may not issue a final order to establish the Program. 
        To determine the approval or disapproval of producers, the 
        Secretary shall consider the approval or disapproval by any 
        cooperative association of producers, engaged in a bona fide 
        manner in marketing milk or the products thereof, as the 
        approval or disapproval 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 expressing approval or disapproval, a 
        description of the question presented in the referendum 
        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 30 days before the referendum 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 the individual votes.
            ``(3) Final order.--If the Secretary determines that the 
        proposed order has been approved by not less than a majority of 
        the eligible producers voting in the referendum required by 
        paragraph (2), the Secretary shall issue, not later than 30 
        days after such determination, a final order to establish the 
        Program.
            ``(4) Referendum on continuation of program.--Not later 
        than 3 years after the date of the enactment of this subtitle, 
        the Secretary shall conduct a referendum among producers who, 
        during a representative period (as determined by the 
        Secretary), have been engaged in the production of milk for 
        commercial use, for the purpose of ascertaining whether the 
        Program then in effect shall be continued. The program shall be 
        continued only if the Secretary determines that it has been 
        approved by not less than a majority of the eligible producers 
        voting in the referendum. If continuation of the Program is not 
        approved by a majority of the eligible producers voting in the 
        referendum, the Secretary shall terminate collection of fees 
        under the Program within six months after the Secretary 
        determines that such action is favored by a majority of the 
        eligible producers voting in the referendum and shall terminate 
        the program in an orderly manner as soon as practicable after 
        such determination.
    ``(b) Producer Board.--
            ``(1) In general.--The order shall provide for the 
        establishment of a board of directors to be known as the 
        `Producer Board' to advise the Secretary on administration of 
        the Program.
            ``(2) Composition.--The Producer Board shall be composed of 
        30 members, of whom--
                    ``(A) 24 shall be producers, of whom--
                            ``(i) 12 producers shall be appointed based 
                        upon region, with 2 members from each of the 6 
                        dairy producing regions in the United States; 
                        and
                            ``(ii) 12 producers shall be appointed 
                        based upon the geographical distribution of 
                        milk production volume throughout the United 
                        States;
                    ``(B) 2 shall represent dairy consumers;
                    ``(C) 2 shall represent fluid milk bottlers; and
                    ``(D) 2 shall represent dairy product processors.
            ``(3) Appointment.--The Secretary shall appoint the members 
        of the Producer Board after considering any nominations 
        submitted by interested parties.
            ``(4) Advisor.--
                    ``(A) In general.--The Secretary shall appoint a 
                dairy economist to advise the Producer Board.
                    ``(B) Nonvoting member.--The individual appointed 
                under subparagraph (A) shall be a nonvoting member of 
                the Producer Board.
    ``(c) Producer Appeals Committee.--The order shall require the 
Producer Board to establish a committee to be known as the `Producer 
Appeals Committee' to advise the Secretary on appeals of decisions made 
during the first year of operation of the Program.

``SEC. 143. OPERATION OF THE PROGRAM.

    ``(a) Establishment of Rates, Fees, Dividends, and Initial 
Allowable Milk Marketings.--
            ``(1) In general.--The order shall provide for the 
        establishment of rates and fees and the payment of dividends in 
        accordance with this section.
            ``(2) Initial establishment of allowable milk marketings.--
        The initial establishment of allowable milk marketings for a 
        dairy facility under this subtitle shall based on the highest 
        of the annual milk marketings of the dairy facility from the 
        calendar year ending--
                    ``(A) December 31, 2007;
                    ``(B) December 31, 2008; or
                    ``(C) December 31, 2009.
    ``(b) Establishment of Rates and Fees.--
            ``(1) Allowable milk marketing growth rate.--
                    ``(A) Calculation of allowable milk marketing.--The 
                allowable milk marketings of a dairy facility for a 
                quarter shall be equal to the quantity of milk 
                commercially produced by the dairy facility during the 
                corresponding quarter during the previous calendar 
                year, as adjusted to reflect the allowable milk 
                marketing growth rate for the quarter.
                    ``(B) Calculation of allowable milk marketing 
                growth rate.--At least 30 days before the first day of 
                each quarter, the Secretary, after considering any 
                recommendations made by the Producer Board, shall 
                establish the allowable milk marketing growth rate for 
                the upcoming quarter based on the following table:


``Milk Feed Ratio                        Allowable milk marketing growth
                                          rate (in percent)
  Milk Feed Ratio greater than/equal to    3.00
   2.00.
  Milk Feed Ratio 1.75-1.99............    0.00
  Milk Feed Ratio less than/equal to     -3.00
   1.74.
 

                    ``(C) Milk feed ration.--For purposes of this 
                paragraph and paragraph (2)(A), the Secretary shall 
                calculate a milk feed ratio for a month using the same 
                procedures used to calculate the milk feed ratio on 
                page 64 of the USDA January 2010 Agricultural Prices 
                publication (including the data and factors noted in 
                footnote 4).
                    ``(D) Quarterly announcement of the allowable milk 
                marketing growth rate.--For the purpose of announcing 
                the quarterly allowable milk marketing growth rate, the 
                Secretary shall use the simple average of the three 
                most recently available monthly figures for the milk 
                feed ratio.
            ``(2) Standard and alternative market access fees.--
                    ``(A) Standard market access fee.--
                            ``(i) In general.--At least 30 days before 
                        the first day of each quarter, the Secretary 
                        shall establish the standard market access fee 
                        to be assessed on all commercial milk 
                        production of a dairy facility for that 
                        quarter.
                            ``(ii) Requirement.--The standard market 
                        access fee shall be based on the number of 
                        hundredweights of raw milk produced for 
                        commercial use, as determined by the Secretary.
                            ``(iii) Calculation of standard market 
                        access fee.--The standard market access fee 
                        shall be determined using the following table:


``Milk Feed Ratio                        Market Access Fee
  Milk Feed Ratio greater than/equal to  $0.03
   3.00.
  Milk Feed Ratio 2.50-2.99............  $0.13
  Milk Feed Ratio 2.00-2.49............  $0.25
  Milk Feed Ratio less than/equal to     $0.50
   1.99.
 

                            ``(iv) Quarterly announcement of the market 
                        access fee.--For the purpose of announcing the 
                        quarterly standard market access fee, the 
                        Secretary shall use the simple average of the 
                        three most recently available monthly figures 
                        for the milk feed ratio.
                    ``(B) Alternative access fee.--The amount of the 
                alternative market access fee to be assessed on all 
                commercial milk production of a dairy facility that 
                exceeds the allowable milk marketings of the dairy 
                facility for a quarter shall be equal to the product 
                obtained by multiplying--
                            ``(i) 5; by
                            ``(ii) the standard market access fee 
                        amount per hundredweight of milk.
            ``(3) Revisions.--The Secretary may make revisions to the 
        calculations of the market access fee and allowable milk 
        marketing growth rate, but only if at least two-thirds of the 
        members of the Producer Board support the revisions. For any 
        revisions, the Secretary shall consider--
                    ``(A) the economic conditions of the dairy industry 
                in the United States;
                    ``(B) the economic conditions of the world dairy 
                market;
                    ``(C) the commercial disappearance of fluid and 
                manufactured milk products;
                    ``(D) the domestic on-farm cost of producing raw 
                milk;
                    ``(E) the domestic farm-gate milk price paid to 
                dairy farmers in the United States;
                    ``(F) the international value of manufactured dairy 
                products;
                    ``(G) the current United States import/export 
                balance in dairy products;
                    ``(H) any foreseen purchases by the Federal 
                Government for nutrition programs; and
                    ``(I) any other economic indicator that the 
                Secretary determines to be appropriate.
    ``(c) Allowable Milk Marketings.--
            ``(1) In general.--At least 30 days before the first day of 
        each quarter, the Secretary shall--
                    ``(A) establish the quantity of allowable milk 
                marketings for each dairy facility; and
                    ``(B) notify each dairy facility of the quantity.
            ``(2) Appeal.--A dairy facility may appeal to the Secretary 
        any discrepancy in the quantity of allowable milk marketings 
        established for the dairy facility.
            ``(3) Transfers of allowable milk marketings.--The 1 or 
        more owners of the milk-producing cows at a dairy facility may 
        transfer, in full, the allowable milk marketings associated 
        with the dairy facility to--
                    ``(A) an individual or entity that purchases the 
                dairy facility; or
                    ``(B) another dairy facility under the same 
                ownership.
            ``(4) Leap-year adjustment.--
                    ``(A) Effect of leap year.--During a calendar year 
                that consists of 366 days, \1/90\th of the allowable 
                milk marketings for the first quarter shall be added to 
                the allowable milk marketings of each dairy producer.
                    ``(B) Subsequent year.--Following a year described 
                in subparagraph (A), \1/91\st of the allowable milk 
                marketings shall be subtracted from the allowable milk 
                marketings of each dairy producer during the preceding 
                year.
    ``(d) Collection of Market Access Fees.--
            ``(1) In general.--During any quarter, a dairy facility 
        that produces and markets milk in a quantity that is greater 
        than the allowable milk marketings of the dairy facility for 
        that quarter shall be assessed the standard market access fee 
        in the following quarter unless, not later than 7 days after 
        the end of the quarter, the dairy facility notifies in writing 
        the appropriate local office of the Farm Services Agency of the 
        intent of the dairy facility to pay the alternative market 
        access fee in lieu of the standard market access fee.
            ``(2) Notice.--Not later than 25 days after the end of a 
        quarter during which a dairy facility exceeded the allowable 
        milk marketings of the dairy facility, the Secretary shall send 
        to the dairy facility and to each of the milk handlers of the 
        dairy facility a notice that describes the market access fee to 
        be assessed against the dairy facility during the following 
        quarter.
            ``(3) Milk handlers.--
                    ``(A) In general.--Each milk handler of a dairy 
                facility notified under paragraph (2) shall--
                            ``(i) during the quarter in which the milk 
                        handler receives the notice, collect an 
                        assessment per hundredweight of milk from the 
                        dairy facility in the amount of the market 
                        access fee described in the notice; and
                            ``(ii) deposit the assessment amounts into 
                        the protected account described in subsection 
                        (f).
                    ``(B) Alternative market access fee.--If a dairy 
                facility notifies the appropriate local office of the 
                Farm Services Agency under paragraph (1) of an intent 
                to pay the alternative market access fee, the amount of 
                the assessment described in the notice under paragraph 
                (2) shall be--
                            ``(i) deducted from the revenues of the 
                        dairy facility in 3 equal monthly installments; 
                        and
                            ``(ii) deposited into the protected account 
                        described in subsection (f).
            ``(4) Subsequent overages.--If a dairy facility exceeds the 
        allowable milk marketings of the dairy facility in a quarter 
        and any of the 4 subsequent quarters, the dairy facility shall 
        be assessed a market access fee in an amount that is equal to 
        the lesser of--
                    ``(A) the market access fee announced after the 
                first quarter in which the dairy facility exceeded the 
                allowable milk marketings; or
                    ``(B) the market access fee announced for the 4 
                quarters in which the dairy facility subsequently 
                exceeds the allowable milk marketings of the dairy 
                facility.
            ``(5) Responsibility.--The milk handler for the 1 or more 
        owners of the milk-producing cows at a dairy facility that 
        receives a notice under paragraph (2) shall give notice to the 
        owners that the market access fees shall be--
                    ``(A) deducted from the proceeds of the dairy 
                facility; and
                    ``(B) submitted to the local office of the Farm 
                Services Agency with which the owners have registered.
    ``(e) Payment of Market Access Fee Dividends.--
            ``(1) In general.--During any quarter, a dairy facility 
        that produces and markets a quantity of milk that is less than 
        or equal to the allowable milk marketings of the dairy facility 
        for that quarter shall be entitled to receive a market access 
        fee dividend in an amount based on the ratio that--
                    ``(A) each hundredweight of allowable milk 
                marketings produced during that quarter at the dairy 
                facility; bears to
                    ``(B) total hundredweights produced by all 
                facilities that did not exceed their allowable milk 
                marketings during that quarter.
            ``(2) Total amount.--The total amount of market access fee 
        dividends available during a quarter shall be equal to the 
        cumulative market access fees collected under this subtitle for 
        a quarter.
            ``(3) Distribution.--
                    ``(A) In general.--The market access fee dividends 
                for a quarter shall be distributed to each qualifying 
                dairy facility not later than 30 days after the last 
                day of the following quarter.
                    ``(B) Eligibility.--The 1 or more owners of the 
                milk-producing cows at a dairy facility described in 
                paragraph (1) shall be eligible to receive any market 
                access fee dividends paid to the dairy facility under 
                this subsection.
                    ``(C) Payment.--Payment of market access fee 
                dividends shall be by check or direct deposit.
    ``(f) Administration.--Amounts collected by milk handlers under 
subsection (d) shall be deposited into a protected account established 
by the Secretary from which amounts may not be withdrawn other than for 
distribution as market access fee dividends.''.
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