[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3531 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3531

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 24, 2010

 Mr. Sanders (for himself, Mrs. Murray, and Mr. Leahy) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
To amend the Dairy Production Stabilization Act of 1983 to establish a 
                  dairy market 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 Market Stabilization Act of 
2010''.

SEC. 2. DAIRY MARKET 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:

            ``Subtitle D--Dairy Market 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(a)(2).
            ``(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(a)(3).
            ``(3) Alternative market access fee.--The term `alternative 
        market access fee' means a fee described in section 143(a)(4) 
        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(c).
            ``(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.--
                    ``(A) In general.--The term `producer' means any 
                person engaged in the production of bovine milk for 
                commercial use.
                    ``(B) Inclusions.--The term `producer' includes any 
                producer holding a license to produce milk.
            ``(10) Producer board.--The term `Producer Board' means the 
        Producer Board established under section 142(b).
            ``(11) Program.--The term `Program' means the Dairy Market 
        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(b) 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 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 Market Stabilization Program' that 
        shall apply to all dairy facilities within the contiguous 
        United States that produce milk for sale commercially.
            ``(2) Final order.--After providing notice and opportunity 
        for public comment on the proposed order under paragraph (1), 
        but not later than 90 days after publication of the proposed 
        order, the Secretary shall issue an order to establish the 
        Program.
            ``(3) Referendum on continuation of program.--
                    ``(A) In general.--Not later than 3 years after the 
                date of enactment of this subtitle, the Secretary shall 
                conduct a referendum among dairy 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.
                    ``(B) Voting procedure.--The Secretary shall 
                conduct the following 2 rounds of voting in the 
                referendum:
                            ``(i) First round.--
                                    ``(I) In general.--In the first 
                                round of voting, each dairy producer 
                                shall be entitled to cast the vote of 
                                the dairy producer.
                                    ``(II) Prohibition.--A cooperative 
                                association of dairy producers may not 
                                vote on behalf of the members of the 
                                association.
                            ``(ii) Second round.--
                                    ``(I) In general.--In the second 
                                round of voting, a cooperative 
                                association of dairy producers may vote 
                                on behalf of those of the members of 
                                the association who did not vote in the 
                                first round.
                                    ``(II) Prohibition.--A cooperative 
                                association of dairy producers may not 
                                vote on behalf of the members of the 
                                association who voted in the first 
                                round.
                    ``(C) Determination.--The Program shall be 
                continued after the date of the referendum only if the 
                Secretary determines that the Program has been approved 
                by not less than a majority of the eligible dairy 
                producers voting in the referendum.
                    ``(D) Termination.--If continuation of the Program 
                is not approved by a majority of the eligible dairy 
                producers voting in the referendum, the Secretary 
                shall--
                            ``(i) terminate the collection of fees 
                        under the Program not later than 180 days after 
                        the Secretary determines that termination is 
                        favored by a majority of the eligible producers 
                        voting in the referendum; and
                            ``(ii) terminate the Program in an orderly 
                        manner as soon as practicable after that 
                        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 
        15 members, of whom--
                    ``(A) 12 shall be producers, of whom--
                            ``(i) 6 producers shall be elected under 
                        paragraph (3)(A) based on region, with 1 member 
                        from each of the 6 dairy-producing regions in 
                        the United States; and
                            ``(ii) 6 producers shall be elected under 
                        paragraph (3)(B) based on the geographical 
                        distribution of milk production volume 
                        throughout the United States;
                    ``(B) 1 shall represent dairy consumers;
                    ``(C) 1 shall represent fluid milk bottlers; and
                    ``(D) 1 shall represent dairy product processors.
            ``(3) Election.--
                    ``(A) Regional representation.--
                            ``(i) In general.--The Secretary shall hold 
                        an election of dairy producers in each region 
                        to select the members of the Producer Board 
                        described in paragraph (2)(A)(i).
                            ``(ii) Voting.--Each dairy producer shall 
                        have 1 vote per region in which the dairy 
                        producer has a dairy.
                            ``(iii) First round.--
                                    ``(I) In general.--In the first 
                                round of voting, each dairy producer 
                                shall be entitled to cast the vote of 
                                the dairy producer.
                                    ``(II) Prohibition.--A cooperative 
                                association of dairy producers may not 
                                vote on behalf of the members of the 
                                association.
                            ``(iv) Second round.--
                                    ``(I) In general.--In the second 
                                round of voting, a cooperative 
                                association of dairy producers may vote 
                                on behalf of those of the members of 
                                the association who did not vote in the 
                                first round.
                                    ``(II) Prohibition.--A cooperative 
                                association of dairy producers may not 
                                vote on behalf of the members of the 
                                association who voted in the first 
                                round.
                    ``(B) Geographical distribution of milk production 
                volume.--
                            ``(i) In general.--The Secretary shall 
                        determine which of the 6 dairy-producing 
                        regions in the United States shall hold an 
                        election of dairy producers to select the 
                        members of the Producer Board described in 
                        paragraph (2)(A)(ii), based on the milk 
                        production volume of each region.
                            ``(ii) Voting.--Each dairy producer in a 
                        region selected under clause (i) shall have 1 
                        vote per selected region in which the dairy 
                        producer has a dairy.
                            ``(iii) Voting procedure.--Each region 
                        selected under clause (i) shall conduct 2 
                        rounds of voting under similar procedures to 
                        the procedures described in subparagraph 
                        (A)(iii).
            ``(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) Allowable milk marketings.--
                    ``(A) In general.--At least 30 days before the 
                first day of each quarter, the Secretary shall--
                            ``(i) establish the quantity of allowable 
                        milk marketings for each dairy facility; and
                            ``(ii) notify each dairy facility of the 
                        quantity.
                    ``(B) Establishment of allowable milk marketings 
                during the first year of the program.--
                            ``(i) Dairy facilities that began marketing 
                        milk prior to 2007.--In the case of a dairy 
                        facility that marketed milk during the period 
                        beginning on January 1, 2007, and ending on the 
                        date of enactment of this subtitle, the 
                        allowable milk marketings for the dairy 
                        facility during the first year of operation of 
                        the Program shall be, at the option of the 
                        dairy facility--
                                    ``(I) the average of the milk 
                                marketings for the corresponding 
                                quarters of 2007, 2008, and 2009, as 
                                adjusted to reflect the allowable milk 
                                marketing growth rate; or
                                    ``(II) the milk marketings for the 
                                corresponding quarter of 2009.
                            ``(ii) Other dairy producers.--In the case 
                        of a dairy facility that did not market milk 
                        during each of the calendar years 2007, 2008, 
                        and 2009, but that is marketing milk as of the 
                        date of enactment of this Act, the initial 
                        establishment of allowable milk marketings 
                        shall be--
                                    ``(I) established by the Secretary 
                                in an amount determined by the 
                                Secretary to be appropriate; and
                                    ``(II) subject to review by the 
                                Appeals Committee.
                    ``(C) Establishment of allowable milk marketings in 
                subsequent years.--Except as otherwise provided in this 
                subsection, the quantity of allowable milk marketings 
                for a dairy facility under this subtitle 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.
                    ``(D) Appeal.--A dairy producer may appeal to the 
                Secretary the quantity of allowable milk marketings 
                established for the dairy producer.
                    ``(E) 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--
                            ``(i) an individual or entity that 
                        purchases the dairy facility; or
                            ``(ii) another dairy facility under the 
                        same ownership.
                    ``(F) Leap-year adjustment.--
                            ``(i) In general.--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 facility.
                            ``(ii) 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 facility during the preceding year.
            ``(3) Allowable milk marketing growth rate.--
                    ``(A) Establishment 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.
 

                    ``(B) Milk feed ratio.--For purposes of this 
                paragraph and paragraph (4), 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 Agricultural Prices report dated January 
                29, 2010, of the National Agricultural Statistics 
                Service of the Department of Agriculture (including the 
                data and factors noted in footnote 4).
                    ``(C) 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 3 most 
                recently available monthly figures for the milk-feed 
                ratio.
            ``(4) 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 3 
                        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.
            ``(5) Revisions.--
                    ``(A) In general.--The Secretary may make revisions 
                to the calculations of the market access fee and 
                allowable milk marketing growth rate, but only if at 
                least \2/3\ of the members of the Producer Board 
                support the revisions.
                    ``(B) Considerations.--For any revisions, the 
                Secretary shall consider--
                            ``(i) the economic conditions of the dairy 
                        industry in the United States;
                            ``(ii) the economic conditions of the world 
                        dairy market;
                            ``(iii) the commercial disappearance of 
                        fluid and manufactured milk products;
                            ``(iv) the domestic on-farm cost of 
                        producing raw milk, including--
                                    ``(I) the cost of feed;
                                    ``(II) the cost of labor, including 
                                the reasonable value of the labor and 
                                management of the dairy producer;
                                    ``(III) machinery expenses;
                                    ``(IV) interest expenses; and
                                    ``(V) other cash expenses, 
                                including the cost of hauling, 
                                veterinary services and medicine, 
                                bedding and litter, marketing, custom 
                                services and supplies, fuel, 
                                lubrication, electricity, machinery and 
                                building repairs, labor, association 
                                fees, and assessments;
                            ``(v)(I) the domestic mailbox milk price 
                        paid to dairy farmers in the United States; and
                            ``(II) the margin between that milk price 
                        and the domestic on-farm cost of producing milk 
                        referred to in subsection (iv);
                            ``(vi) other economic forces affecting 
                        dairy producers;
                            ``(vii) probable trends in production and 
                        consumption of milk and milk products;
                            ``(viii) the level of dairy farm prices in 
                        relation to production costs;
                            ``(ix) the financial condition of dairy 
                        producers;
                            ``(x) the costs and charges for producing, 
                        hauling, handling, processing, distributing, 
                        selling, and conducting all other services 
                        performed with respect to milk and milk 
                        products;
                            ``(xi) the international value of 
                        manufactured dairy products;
                            ``(xii) the current United States import/
                        export balance in dairy products;
                            ``(xiii) any foreseen purchases by the 
                        Federal Government for nutrition programs; and
                            ``(xiv) any other economic indicator that 
                        the Secretary determines to be appropriate.
    ``(b) 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 for 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 
                        (d).
                    ``(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 (d).
            ``(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.
    ``(c) 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 the applicable 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.
    ``(d) Administration.--Amounts collected by milk handlers under 
subsection (b) 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.''.
                                 <all>