1.Short title; table of
contents
(a)This Act may be cited as the Dairy Pricing Reform and Farmer Protection Act of
2011
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—Federal milk marketing reform
Sec. 101. Federal milk marketing reform.
TITLE II—Dairy Producer Margin Protection Program
Sec. 201. Definitions.
Sec. 202. Dairy producer margin protection program.
Sec. 203. Eligibility and registration of dairy producers for
program.
Sec. 204. Establishment of production history of registered
dairy producers.
Sec. 205. Basic margin protection.
Sec. 206. Supplemental margin protection.
Sec. 207. No payment limitations.
Sec. 208. Use of Commodity Credit Corporation.
Sec. 209. Duration.
TITLE III—Dairy Market Stabilization Program
Sec. 301. Definitions.
Sec. 302. Dairy market stabilization program.
Sec. 303. Program threshold for implementation and reduction in
dairy producer payments.
Sec. 304. Collection of producer milk marketings
information.
Sec. 305. Calculation of reduced dairy producer
payments.
Sec. 306. Limited availability of amounts remitted to
Secretary.
Sec. 307. Suspension of reduced payment
requirement.
Sec. 308. Audit of producer and handler compliance.
Sec. 309. Program board.
Sec. 310. Duration.
TITLE IV—Miscellaneous
Sec. 401. Repeals.
Sec. 402. Regulations.
Sec. 403. Budgetary effects.
<enum>I</enum><header>Federal milk
marketing reform</header>
<section id="idBC0F3323E3E34B7FB3E10F105711EED5"><enum>101.</enum><header>Federal milk
marketing reform</header>
<subsection id="idB17AB33069A944F3A6C130ADB4FB855D"><enum>(a)</enum><header>In
general</header><text>Not later than 180 days after the date of enactment of
this Act, the Secretary of Agriculture shall conduct hearings to assess the
implications of transitioning Federal milk marketing orders from end-product
pricing to a competitive pay pricing system.</text>
</subsection><subsection id="idC3402F50B1D94EE4B1903B82A47F60B8"><enum>(b)</enum><header>Requirements</header><text display-inline="yes-display-inline">In conducting hearings under this section,
the Secretary shall—</text>
<paragraph id="ID0704e34f30464f7f8d9a1cb76735f92a"><enum>(1)</enum><text>ensure that
market administrators conduct a thorough analysis of—</text>
<subparagraph id="id8BCDABF969B14152BBCBBF541A22907D"><enum>(A)</enum><text>the reforms to
the Federal milk marketing orders proposed by the Maine Dairy Industry Advisory
Council; and</text>
</subparagraph><subparagraph id="idDC20963CD6834EAEB8033FCB9E64A8AC"><enum>(B)</enum><text>the reforms
included in H.R. 3062, 112th Congress, as introduced on September 23,
2011;</text>
</subparagraph></paragraph><paragraph id="IDca0d992e367b414a97211615a82af67d"><enum>(2)</enum><text>analyze the
implications of transitioning from a 4-class system for milk products to a
2-class system;</text>
</paragraph><paragraph id="IDd7d58168ba034291a6af5461680d45d5"><enum>(3)</enum><text>explore methods
to improve signals for price discovery in the short- and long-term to allow
dairy producers to better use risk management tools;</text>
</paragraph><paragraph id="ID7cbcbe5efb514c1c9de7088f23a481e6"><enum>(4)</enum><text>assess whether a
2-class competitive pay pricing system for milk products would be more or less
transparent than the system in effect as of the day before the date of
enactment of this Act; and</text>
</paragraph><paragraph id="IDed1f100e9ba74c2e8a92296a9df270cc"><enum>(5)</enum><text>analyze the
impact of eliminating a minimum regulated price on price volatility in dairy
markets.</text>
</paragraph></subsection></section><enum>II</enum><header>Dairy Producer
Margin Protection Program</header>
<section id="H3189B3F521BB4B00898EE3FD64D6866F"><enum>201.</enum><header>Definitions</header><text display-inline="no-display-inline">In this title:</text>
<paragraph id="HAC903CAB90734BBCA63B81A96C4A95E0"><enum>(1)</enum><header>Actual dairy
producer margin</header><text display-inline="yes-display-inline">The term
<term>actual dairy producer margin</term> means the difference between the
all-milk price and the average feed cost, as calculated under section
202(d).</text>
</paragraph><paragraph id="H898DDD632D6D4935BA5E54F6A0CF5C69"><enum>(2)</enum><header>All-milk
price</header><text>The term <term>all-milk price</term> means the average
price received, per hundredweight of milk, by dairy producers for all milk sold
to plants and dealers in the United States, as reported by the National
Agricultural Statistics Service.</text>
</paragraph><paragraph id="idDCDC63E6C6A44EE0A6EC2A10F2C38A15"><enum>(3)</enum><header>Average feed
cost</header><text display-inline="yes-display-inline">The term <term>average
feed cost</term> means the average cost of feed used by a dairy operation to
produce a hundredweight of milk, determined under section 202(c) using the sum
obtained by adding—</text>
<subparagraph id="id3F9A8396353A4E458336FC44681E5FC7"><enum>(A)</enum><text>the product
obtained by multiplying—</text>
<clause id="idFDEA2F82398F4457B9FEEA071CF3D60A"><enum>(i)</enum><text>1.192; by</text>
</clause><clause id="idCD82ED3BFBE847D4920543CB5A170185"><enum>(ii)</enum><text>the price of
corn per bushel;</text>
</clause></subparagraph><subparagraph id="id4B1764B520C14065A5163C8281215760"><enum>(B)</enum><text display-inline="yes-display-inline">the product obtained by multiplying—</text>
<clause id="idAB0CB04AA8144A7EB2AAE1DB14EF95EA"><enum>(i)</enum><text display-inline="yes-display-inline">0.00817; by</text>
</clause><clause id="id0D99B561803E438786C9CBB83E09AC7D"><enum>(ii)</enum><text display-inline="yes-display-inline">the price of soybean meal per ton;
and</text>
</clause></subparagraph><subparagraph id="id8AB93FACC11B458B8B103BCB4BF70897"><enum>(C)</enum><text display-inline="yes-display-inline">the product obtained by multiplying—</text>
<clause id="idC448F6BD76944698836C27C63C57F860"><enum>(i)</enum><text display-inline="yes-display-inline">0.0152; by</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idB34F54404FF647CCB2D664BD51ADB57D"><enum>(ii)</enum><text display-inline="yes-display-inline">the price of alfalfa hay per ton.</text>
</clause></subparagraph></paragraph><paragraph id="HF5C88CC2F35244B78C1A5E8448CA3C3C"><enum>(4)</enum><header>Consecutive
2-month period</header><text>The term <term>consecutive 2-month period</term>
refers to the 2-month period consisting of the months of January and February,
March and April, May and June, July and August, September and October, or
November and December, respectively.</text>
</paragraph><paragraph display-inline="no-display-inline" id="H7B5C13D109DD4125A8882C7F7606D1E5"><enum>(5)</enum><header>Dairy
producer</header><text display-inline="yes-display-inline">The term <term>dairy
producer</term> means an individual or entity that directly or indirectly (as
determined by the Secretary)—</text>
<subparagraph id="H4ACA6215A8C3475EA0C545398F68A52A"><enum>(A)</enum><text>shares in the risk
of producing milk; and</text>
</subparagraph><subparagraph id="H06E80B6505184187B2967BE8AD2C5983"><enum>(B)</enum><text>makes
contributions (including land, labor, management, equipment, or capital) to the
dairy operation of the individual or entity that are at least commensurate with
the share of the individual or entity of the proceeds of the operation.</text>
</subparagraph></paragraph><paragraph id="HE7E94330B2144822AF2A6AAE1FD0C09A"><enum>(6)</enum><header>Production
history</header>
<subparagraph commented="no" id="H71D5DCB5518F484BAF88D163844C7C5F"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided in
subparagraph (B), the term <term>production history</term>, with respect to a
dairy producer, means the highest annual milk production of the dairy producer
during any 1 of the 3 calendar years immediately preceding the registration of
the dairy producer with the Secretary for participation in the program.</text>
</subparagraph><subparagraph id="H5F5106805C6648849F2869126263D7F9"><enum>(B)</enum><header>New
producers</header><text display-inline="yes-display-inline">If a dairy producer
has been in operation for less than a year, the Secretary shall determine the
production history of the dairy producer by extrapolating the actual milk
production for the months the dairy producer has been in operation to a yearly
production amount.</text>
</subparagraph></paragraph><paragraph id="HD4C6A169317E417881D1263BCF578089"><enum>(7)</enum><header>Program</header><text display-inline="yes-display-inline">The term <term>program</term> means the
dairy producer margin protection program required by this title.</text>
</paragraph><paragraph id="H8B5990EC7BB84CB7A454A2A58D91E0AA"><enum>(8)</enum><header>Projected dairy
producer margin</header><text display-inline="yes-display-inline">The term
<term>projected dairy producer margin</term> means the estimate prepared by the
Secretary pursuant to section 202(b).</text>
</paragraph><paragraph id="H35C4DEC2F2D240158280525F6AB9BBB0"><enum>(9)</enum><header>Secretary</header><text display-inline="yes-display-inline">The term <term>Secretary</term> means the
Secretary of Agriculture.</text>
</paragraph><paragraph id="H9BC26B2DAF054F42B11780DA6CBB0621"><enum>(10)</enum><header>United
States</header><text display-inline="yes-display-inline">The term <term>United
States</term>, in a geographical sense, means the 50 States.</text>
</paragraph></section><section id="HCF57E4E5BFF24B09A7FA15BA67978775"><enum>202.</enum><header>Dairy producer
margin protection program</header>
<subsection id="H6B12FA36736343AF9875287F7FF55D4D"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
establish and administer a dairy producer margin protection program for the
purpose of protecting dairy producer income through the provision of basic
margin protection payments and, if purchased by a dairy producer, supplemental
margin protection payments when actual dairy producer margins are less than the
threshold levels for the payments.</text>
</subsection><subsection id="H0278AF8AE4FC401E99857353CE7B5AB9"><enum>(b)</enum><header>Estimation of
projected dairy producer margin</header>
<paragraph id="H10FDC88884BF4CB7AE8FB01333E703A2"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
prepare an estimate of the projected dairy producer margin for the 5-year
period beginning on January 1, 2012, consisting of the difference
between—</text>
<subparagraph id="H5C06E6F4846D4D08AB2AB17DACF187D4"><enum>(A)</enum><text display-inline="yes-display-inline">an estimate of the average all-milk price,
per hundredweight of milk, for that period; and</text>
</subparagraph><subparagraph id="H20D9DBF6C0014A0293BC98D7770118D8"><enum>(B)</enum><text display-inline="yes-display-inline">an estimate of average feed cost for that
period.</text>
</subparagraph></paragraph><paragraph commented="no" id="H9BA8833ABE2C422DB0FF4D56B82557D3"><enum>(2)</enum><header>Publication</header><text display-inline="yes-display-inline">The Secretary shall publish the estimate of
the projected dairy producer margin in the Federal Register as soon as
practicable after the date of enactment of this Act, but in no case later than
90 days after that date.</text>
</paragraph></subsection><subsection id="H4A87F497DEFE4ED2829394F4B1444A6A"><enum>(c)</enum><header>Calculation of
average feed cost</header><text display-inline="yes-display-inline">Not later
than the fifth day after the end of each consecutive 2-month period, the
Secretary shall calculate the national average feed cost for that consecutive
2-month period using the following data:</text>
<paragraph id="H9E42A84ECDE64E19A88A60B5BA85BE5D"><enum>(1)</enum><text display-inline="yes-display-inline">The price of corn for each month of that
consecutive 2-month period shall be the price received during that month by
agricultural producers in the United States for corn, as reported by the
National Agricultural Statistics Service.</text>
</paragraph><paragraph id="H665D0D5177B74102999A78A32D4CE77E"><enum>(2)</enum><text display-inline="yes-display-inline">The price of soybean meal for each month of
that consecutive 2-month period shall be the price received during that month
by agricultural producers in the United States for soybean meal, as reported by
the Agricultural Marketing Service.</text>
</paragraph><paragraph id="H3E14974A52C34CB2A56B099A617BD97F"><enum>(3)</enum><text display-inline="yes-display-inline">The price of alfalfa hay for each month of
that consecutive 2-month period shall be the price received during that month
by agricultural producers in the United States for alfalfa hay, as reported by
the National Agricultural Statistics Service.</text>
</paragraph></subsection><subsection id="HCE916365480040618FC54E14954E27A2"><enum>(d)</enum><header>Calculation of
actual dairy producer margin</header><text display-inline="yes-display-inline">The Secretary shall calculate the actual
dairy producer margin for each consecutive 2-month period by
subtracting—</text>
<paragraph id="H5FFB9E44B45041DCBEC88600609BA412"><enum>(1)</enum><text>the average feed
cost for that consecutive 2-month period, determined in accordance with
subsection (c); from</text>
</paragraph><paragraph id="H1FA43B2C55C0407BAD646C3D1BDBAFFA"><enum>(2)</enum><text>the all-milk price
for that consecutive 2-month period.</text>
</paragraph></subsection></section><section id="HEA814CA8C8E5411A987D8666D412AFD1"><enum>203.</enum><header>Eligibility and
registration of dairy producers for program</header>
<subsection id="H382D8B094F154F06A0FCCC57B1348B14"><enum>(a)</enum><header>Eligibility</header>
<paragraph id="id88434A54FDD445D298DD595288358899"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Subject to paragraph
(2), all dairy producers in the United States shall be eligible to participate
in the program.</text>
</paragraph><paragraph id="idA615DE4D1C6146D9AB43B753D63296C5"><enum>(2)</enum><header>Requirement</header><text display-inline="yes-display-inline">A dairy producer shall be required to be
registered with the Secretary before the producer may—</text>
<subparagraph id="H1D448F4E0D284927BBBB8A19267A719A"><enum>(A)</enum><text>receive basic
margin protection payments under section 205; and</text>
</subparagraph><subparagraph id="H0DBB8B5C70C545258E38C053A7D3AEE4"><enum>(B)</enum><text>if purchased by
the dairy producer, supplemental margin protection payments under section
206.</text>
</subparagraph></paragraph></subsection><subsection id="HA11E419C793B44D9A03ED504340F1A9E"><enum>(b)</enum><header>Registration</header>
<paragraph id="HC1CF72D3449346279626AF9945D0B757"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary
shall—</text>
<subparagraph id="id36A3D7BA84B2437B8E55671C103D8BC1"><enum>(A)</enum><text display-inline="yes-display-inline">register all interested dairy producers in
the program; and</text>
</subparagraph><subparagraph id="id5FBA93C070E0497BA415CBA37FD345FF"><enum>(B)</enum><text display-inline="yes-display-inline">specify the manner and form by which a
dairy producer may register.</text>
</subparagraph></paragraph><paragraph id="H200957E7C7DE46E09EEE96E86705C58A"><enum>(2)</enum><header>Existing Dairy
Producers</header><text>During the 1-year period beginning on the date of
enactment of this Act, a dairy producer who is actively engaged in a dairy
operation as of that date may register with the Secretary—</text>
<subparagraph id="HA383B4AFE62B4FE38AE7EC9F7089F067"><enum>(A)</enum><text>to receive basic
margin protection; and</text>
</subparagraph><subparagraph id="HB6A99978314B41C486D482CF0815D37F"><enum>(B)</enum><text>if the dairy
producer chooses, to purchase supplemental margin protection.</text>
</subparagraph></paragraph><paragraph commented="no" id="H819695BF80054DA9954071D23DA95051"><enum>(3)</enum><header>New
Entrants</header><text display-inline="yes-display-inline">A dairy producer who
has no existing interest in a dairy operation as of the date of enactment of
this Act, but who, after that date, establishes a new dairy operation, may
register with the Secretary during the 180-day period beginning on the date on
which the dairy operation first markets milk commercially—</text>
<subparagraph commented="no" id="HDAC4FD28A8214539A91282A5B977EE31"><enum>(A)</enum><text>to receive basic
margin protection; and</text>
</subparagraph><subparagraph commented="no" id="H231B4796A0794AD0A208759A0D23A2FD"><enum>(B)</enum><text>if the dairy
producer chooses, to purchase supplemental margin protection.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="HE2DE8CCE91BA4C388F5519442C6AA207"><enum>(4)</enum><header>Treatment of
multi-producer operations</header><text display-inline="yes-display-inline">If
a dairy operation consists of more than 1 dairy producer, all of the dairy
producers of the operation shall be treated as a single dairy producer for
purposes of registration—</text>
<subparagraph id="HE7596FA15C294D9984784B010770CC69"><enum>(A)</enum><text>to receive basic
margin protection; and</text>
</subparagraph><subparagraph id="HF0F3DFCF53AD4930A427F8B8E324E475"><enum>(B)</enum><text>at the election of
the producers, to purchase supplemental margin protection.</text>
</subparagraph></paragraph><paragraph id="H6A07DC6966CB48F78AA110694CAED2FB"><enum>(5)</enum><header>Treatment of
Producers with Multiple dairy Operations</header><text display-inline="yes-display-inline">If a dairy producer operates 2 or more
dairy operations, each dairy operation of the producer shall require a separate
registration—</text>
<subparagraph id="HEE6411D6577247168998775CC640832C"><enum>(A)</enum><text>to receive basic
margin protection; and</text>
</subparagraph><subparagraph id="H1671A3E80EC2414D848608DAF2BBADBD"><enum>(B)</enum><text>at the election of
the producer, to purchase supplemental margin protection.</text>
</subparagraph></paragraph></subsection><subsection id="H25F96FC3147E49C5BCFD74699B3574E2"><enum>(c)</enum><header>Reconstitution</header><text display-inline="yes-display-inline">The Secretary shall ensure that a dairy
producer does not reconstitute a dairy operation for the sole purpose of
receiving basic margin protection or supplemental margin protection.</text>
</subsection></section><section id="HB6052B276B0147BC971E2F5A87C5D436"><enum>204.</enum><header>Establishment
of production history of registered dairy producers</header>
<subsection id="HD5C91AD500BF45029D196A8F8817CC74"><enum>(a)</enum><header>Establishment of
production history</header>
<paragraph id="HF6DE12E0526746F5B1844B925F7BA64C"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">When a dairy producer registers with the
Secretary for participation in the program, the dairy producer shall provide
all information required by the Secretary to establish the production history
of the dairy operation of the producer.</text>
</paragraph><paragraph commented="no" id="H72E4837FD9BB4A14B8BC5E7C29318C99"><enum>(2)</enum><header>Duration</header><text display-inline="yes-display-inline">Once the production history is established
for a dairy producer upon registration, the production history shall not be
changed for the duration of the participation by the dairy producer in the
program.</text>
</paragraph></subsection><subsection id="HC40E4F6E3D87436A9846766C5B0CD883"><enum>(b)</enum><header>Transfer of
production history of existing dairy producers</header>
<paragraph id="HBCC2A7A199754E22BD031A30D209651E"><enum>(1)</enum><header>Transfer by
sale</header>
<subparagraph id="H673778B2FFCF4B52A2C9BC61782C1F0F"><enum>(A)</enum><header>Request for
transfer</header><text display-inline="yes-display-inline">If an existing dairy
producer, as described in section 203(b)(2), sells an entire dairy operation to
another party, the seller and purchaser may jointly request that the Secretary
transfer the production history of the seller to the purchaser.</text>
</subparagraph><subparagraph id="H65DDAEB5E8D641BE9AF30F6CFC9675C2"><enum>(B)</enum><header>Transfer</header><text>If
the Secretary determines that the seller has sold the entire dairy operation to
the purchaser—</text>
<clause id="id1151F717485F44A6959CD03E58AD40CA"><enum>(i)</enum><text>the
Secretary shall approve the transfer; and</text>
</clause><clause id="idA8F249F24573479F8EDE23C03C2EBCA4"><enum>(ii)</enum><text>after the
approval of the transfer, the seller shall have no interest in that production
history.</text>
</clause></subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H3F174556BDCF4359A240667DAC01BAF8"><enum>(2)</enum><header>Transfer by
Lease</header>
<subparagraph id="HEC34EB556FF8479EB8F56635CD66FD1C"><enum>(A)</enum><header>Request for
transfer</header><text display-inline="yes-display-inline">If an existing dairy
producer, as described in section 203(b)(2), leases an entire dairy operation
to another party, the lessor and lessee may jointly request that the Secretary
transfer the production history of the lessor to the lessee for the duration of
the term of the lease.</text>
</subparagraph><subparagraph id="HC9C23CCAA6BC42288A1D80382E3A1FDC"><enum>(B)</enum><header>Transfer</header><text display-inline="yes-display-inline">If the Secretary determines that the lessor
has leased the entire dairy operation to the lessee—</text>
<clause id="id158D137FC53A4A2BAFA9BBAB8F2AB44D"><enum>(i)</enum><text display-inline="yes-display-inline">the Secretary shall approve the transfer;
and</text>
</clause><clause id="idB64F45AABE8C483E8DDE0B4A6D322140"><enum>(ii)</enum><text display-inline="yes-display-inline">after the approval of the transfer, the
lessor shall have no interest in that production history for the duration of
the term of the lease.</text>
</clause></subparagraph></paragraph><paragraph id="H54CB931E757E435ABB36415DC897F410"><enum>(3)</enum><header>Coverage
level</header><text display-inline="yes-display-inline">A purchaser or lessee
to whom the Secretary transfers a production history under this subsection may
not obtain a different level of basic margin protection or supplemental margin
protection coverage than the basic margin protection or supplemental margin
protection coverage held by the seller or lessor from whom the purchaser or
lessee obtained the production history.</text>
</paragraph></subsection><subsection id="HB72F6AAD328E4CF8B41206281E8CD687"><enum>(c)</enum><header>Transfer of
production history of new entrants</header><text>The Secretary may not transfer
the production history of a dairy producer described in section 203(b)(3) to
another person.</text>
</subsection><subsection id="HBA312889882B4AA8B4FEE7487FF05E3F"><enum>(d)</enum><header>Movement and
transfer of production history</header>
<paragraph id="H0C4F8B915B3642E596AB1FC95FF16DF3"><enum>(1)</enum><header>Movement and
transfer authorized</header><text display-inline="yes-display-inline">Subject
to paragraph (2), if a dairy producer moves from 1 location to another
location, the dairy producer may maintain the production history associated
with the operation.</text>
</paragraph><paragraph id="H64E74F5BCBEE4329B3FF31027B056DDE"><enum>(2)</enum><header>Notification
requirement</header><text>A dairy producer shall notify the Secretary of any
move of a dairy operation under paragraph (1).</text>
</paragraph><paragraph id="HBB5FA1A7D5D243BB9CD723FBE66B24CB"><enum>(3)</enum><header>Subsequent
occupation of vacated location</header><text display-inline="yes-display-inline">A party subsequently occupying a dairy
operation location vacated as described in paragraph (1) shall have no interest
in the production history previously associated with the operation at the
location.</text>
</paragraph></subsection></section><section id="H3DF9BF44A9D547139B245FE0FE3389B8"><enum>205.</enum><header>Basic margin
protection</header>
<subsection id="HA6C9F0F211CF47719091A5684D4847D4"><enum>(a)</enum><header>Eligibility</header><text display-inline="yes-display-inline">Each dairy producer registered to
participate in the program shall be eligible to receive basic margin protection
under the program through a 2-tier system described in subsection (c).</text>
</subsection><subsection id="HAFD99C74D0B1495888829DA05F38E833"><enum>(b)</enum><header>No Cost to Dairy
Producer</header><text>Basic margin protection shall be provided to a
registered dairy producer at no cost to the dairy producer.</text>
</subsection><subsection id="H3D15E0A3574045CE92C038B74D2DEF10"><enum>(c)</enum><header>Payment
threshold</header>
<paragraph id="id2FB20E71D18C465D821A2B8C6B1A508B"><enum>(1)</enum><header>First
tier</header><text display-inline="yes-display-inline">All registered dairy
producers shall receive a basic margin protection payment for the first
2,985,000 pounds of actual milk production of the dairy producer for the
calendar year whenever the average actual dairy producer margin for a
consecutive 2-month period is less than $6.00 per hundredweight of milk
(referred to in this section as the <term>first tier payment
threshold</term>).</text>
</paragraph><paragraph id="id349C412FA8C249D2BBAA16EF6EAD5D4C"><enum>(2)</enum><header>Second
tier</header><text>All registered dairy producers shall receive a basic margin
protection payment for all pounds of actual milk production of the dairy
producer for the calendar year that is in excess of 2,985,000 pounds whenever
the average actual dairy producer margin for a consecutive 2-month period is
less than $4.00 per hundredweight of milk (referred to in this section as the
<term>second tier payment threshold</term>).</text>
</paragraph></subsection><subsection id="H6FA7689D30EF4E6B8030849124465B60"><enum>(d)</enum><header>Basic margin
protection payment</header>
<paragraph id="HB286EF6E05404A4F873A209DCFA2D9DF"><enum>(1)</enum><header>Payment
required</header><text display-inline="yes-display-inline">The Secretary shall
make a basic margin protection payment to each registered dairy producer for a
consecutive 2-month period whenever the payment is required by subsection (c)
for that period.</text>
</paragraph><paragraph id="H0D718EBE64B64C8AA643BE08680D5626"><enum>(2)</enum><header>Amount of
payment</header><text display-inline="yes-display-inline">The basic margin
protection payment for the dairy operation of a dairy producer for a
consecutive 2-month period shall be equal to (as determined by the Secretary)
the product obtained by multiplying—</text>
<subparagraph id="HE0CF149AD2BB4DC7B64BB95542B3C1C8"><enum>(A)</enum><text>the difference
between—</text>
<clause id="id95135782B4F946C8B2B99D14C14F59FC"><enum>(i)</enum><text>the
average actual dairy producer margin for the consecutive 2-month period;
and</text>
</clause><clause id="id779522D135DF4C089ADDCCDE4A031BF8"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="idC780B5E6AA444F9DB0A8CC9051039976"><enum>(I)</enum><text>in the case of milk
under the first tier payment threshold, $6.00; and</text>
</subclause><subclause id="idB9134E4339A24D1DB302C706D9288776" indent="up1"><enum>(II)</enum><text>in the case of milk under the second
tier payment threshold, $4.00; and</text>
</subclause></clause></subparagraph><subparagraph id="H0F17319E9A0B4175A0F1DA70A6127F4D"><enum>(B)</enum><text display-inline="yes-display-inline">the lesser of—</text>
<clause id="H0D82E444811C46BC830F28BAE9AED666"><enum>(i)</enum><text>the
quotient obtained by dividing—</text>
<subclause id="id317FACA679A942598A51F8425ED31EC4"><enum>(I)</enum><item commented="no" display-inline="yes-display-inline" id="id461472FD994C4C96ACD7233D62A5E1DF"><enum>(aa)</enum><text>in the case of milk
under the first tier payment threshold, 90 percent of the production history of
the dairy producer; and</text>
</item><item id="idD9745DF20FE34066B7F17B91AEA8EDC1" indent="up1"><enum>(bb)</enum><text>in the case of milk under the second
tier payment threshold, 70 percent of the production history of the dairy
producer; by</text>
</item></subclause><subclause id="idFEEB6A65CB214E098035E697DDF96BCD"><enum>(II)</enum><text>6; and</text>
</subclause></clause><clause id="H510EDA52BBAA4CC4BA3D91993C8440DB"><enum>(ii)</enum><text>the
actual amount of milk produced by the dairy operation of the dairy producer
during the consecutive 2-month period.</text>
</clause></subparagraph></paragraph></subsection></section><section id="HF04BFE94F7C54B92BC032C331442C1E2"><enum>206.</enum><header>Supplemental
margin protection</header>
<subsection id="H1CBA77DB947547B3BC724DCB69CCE2DF"><enum>(a)</enum><header>Election of
supplemental margin protection</header><text display-inline="yes-display-inline">At the time of program registration of a
dairy producer, the dairy producer may purchase supplemental margin protection
under the program.</text>
</subsection><subsection id="H2EA8F0788BDD49FE8167000384A4CD6A"><enum>(b)</enum><header>Payment
threshold and percentage of production history covered</header>
<paragraph id="H4609F5F1E5314ED5876D67D1B78783FA"><enum>(1)</enum><header>Election of
payment threshold</header><text display-inline="yes-display-inline">A dairy
producer purchasing supplemental margin protection may elect a coverage level
that is higher, in any increment of $0.50, than the payment threshold for basic
margin protection specified in section 205(c), but not to exceed the lesser
of—</text>
<subparagraph id="H855C84E7B4524DDFB36E77EF8EE32DEA"><enum>(A)</enum><text>the projected
dairy producer margin; or</text>
</subparagraph><subparagraph id="H0DFEB79C84E5446A9CA8B5C2424A02C5"><enum>(B)</enum><text>$8.00.</text>
</subparagraph></paragraph><paragraph id="H245226C714E749B4828A6BEF2A20A3EE"><enum>(2)</enum><header>Election of
production history percentage</header><text display-inline="yes-display-inline">A dairy producer purchasing supplemental
margin protection shall elect a percentage, equal to not more than 90 percent
nor less than 25 percent, of the production history of the producer to be
covered by supplemental margin protection.</text>
</paragraph></subsection><subsection id="HF6D1314F52D0478592E19CC7CFC777EB"><enum>(c)</enum><header>Producer
Premiums</header><text display-inline="yes-display-inline">Not later than
January 15 of each year for which supplemental margin protection is available,
a dairy producer purchasing supplemental margin protection shall pay a premium
equal to the product obtained by multiplying—</text>
<paragraph id="H541C1C9F9A564FDDAA1F70934F09BD05"><enum>(1)</enum><text>the percentage of
production history elected by the producer under subsection (b)(3);</text>
</paragraph><paragraph id="H07759AC17DB14544BBFAB6232CB6A57B"><enum>(2)</enum><text>the production
history of the producer for the calendar year; and</text>
</paragraph><paragraph id="H35B4B376FADF4AD287C538E4F001B67C"><enum>(3)</enum><text>the premium per
hundredweight of milk, as follows:</text>
<table align-to-level="section" blank-lines-before="1" colsep="1" frame="topbot" line-rules="hor-ver" rowsep="0" rule-weights="4.4.4.0.0.0" table-template-name="Generic: 2 text, even cols" table-type="">
<tgroup cols="2" grid-typeface="1.1" no-carding="1" rowsep="0" thead-tbody-ldg-size="10.10.12"><colspec align="center" coldef="fig" colname="column1" colwidth="106pts" min-data-value="19" rowsep="0"></colspec><colspec align="center" coldef="fig" colname="column2" colwidth="106pts" min-data-value="19" rowsep="0"></colspec>
<thead>
<row><entry align="center" colname="column1" morerows="0" namest="column1" rowsep="1">Coverage Level</entry><entry align="center" colname="column2" morerows="0" namest="column2" rowsep="1">Premium per Cwt.</entry>
</row>
</thead>
<tbody>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$4.50</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.015</entry>
</row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$5.00</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.036</entry>
</row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$5.50</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.081</entry>
</row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$6.00</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.155</entry>
</row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$6.50</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.230</entry>
</row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$7.00</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.434</entry>
</row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$7.50</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.590</entry>
</row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr" stub-hierarchy="1">$8.00</entry><entry align="center" colname="column2" leader-modify="clr-ldr" rowsep="0">$0.922.</entry>
</row>
</tbody>
</tgroup>
</table>
</paragraph></subsection><subsection id="H85A2306A20D24311B6C125C80282D9BD"><enum>(d)</enum><header>Premium
obligations of producer</header>
<paragraph id="HFED63640BAA945F49558060B80F733C6"><enum>(1)</enum><header>Pro-ration of
first year premium</header><text>A dairy producer who purchases supplemental
margin protection after initial program registration shall pay a prorated
premium for the first year based on the date on which the producer purchases
the coverage.</text>
</paragraph><paragraph id="H26554E015A84419AA25E6AFCD1F80EE7"><enum>(2)</enum><header>Subsequent
premiums</header><text>Except as otherwise provided in paragraph (1), the
annual premium for a dairy producer shall be fixed at the level determined
under subsection (c) for each year of the program.</text>
</paragraph><paragraph id="H199F6D74AB504956997E15AD9EFAB201"><enum>(3)</enum><header>Legal
obligation</header>
<subparagraph id="id42609DD3A1304D009249B13603073850"><enum>(A)</enum><header>In
general</header><text>Except as provided in subparagraphs (B) and (C), a dairy
producer who elects to purchase supplemental margin protection shall be legally
obligated to pay the applicable premiums for the entire period of the program,
and may not opt out of the program.</text>
</subparagraph><subparagraph id="H8BDBCD4647B3418DBD0EAFDF02886945"><enum>(B)</enum><header>Death of dairy
producer</header><text>If a dairy producer dies, the estate of the deceased may
cancel the supplemental margin protection and shall not be responsible for any
further premium payments.</text>
</subparagraph><subparagraph id="H37625329C09B4E1CA5F5D6133FF47D9B"><enum>(C)</enum><header>Retirement of
dairy producer</header><text display-inline="yes-display-inline">If a dairy
producer retires, the producer may request that the Secretary cancel the
supplemental margin protection if the producer has terminated the dairy
operation entirely and certifies under oath that the producer will not be
actively engaged in any dairy operation for at least the subsequent 7
years.</text>
</subparagraph></paragraph><paragraph id="H5CBF78FD6A924DA2BBB075861E686329"><enum>(4)</enum><header>Loss of
Benefits; repayment</header><text display-inline="yes-display-inline">A dairy
producer who is in arrears on premium payments for supplemental margin
protection for more than 90 days shall—</text>
<subparagraph id="HC2BA4F1A0DE345D4883E5C90E65BB45C"><enum>(A)</enum><text display-inline="yes-display-inline">remain legally obligated to pay the
premiums;</text>
</subparagraph><subparagraph id="H4419D196269F45C1BD0DF51BAD30AF57"><enum>(B)</enum><text display-inline="yes-display-inline">repay supplemental margin protection
payments previously paid to the producer; and</text>
</subparagraph><subparagraph id="H7C59C795FA9A410B854266B2FAE5FDAA"><enum>(C)</enum><text>lose the right to
receive any further supplemental margin protection payments.</text>
</subparagraph></paragraph></subsection><subsection id="H5306282B5C8C424E83963DC8A752A568"><enum>(e)</enum><header>Supplemental
Payment threshold</header><text>A dairy producer who has purchased supplemental
margin protection shall receive a payment whenever the average actual dairy
producer margin for a consecutive 2-month period is less than the coverage
level elected by the dairy producer under subsection (b)(2).</text>
</subsection><subsection id="H74E6D0AEF6364406885C559D932E4236"><enum>(f)</enum><header>Supplemental
margin protection payments</header>
<paragraph id="H0F3433A0A11B4BB1A40A6DBD6932160E"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The supplemental
margin protection payment for a dairy producer shall be—</text>
<subparagraph id="idC617BCC673E9429192DEBAFA31AE2AD1"><enum>(A)</enum><text display-inline="yes-display-inline">made on the actual milk production of the
dairy producer for the calendar year; and</text>
</subparagraph><subparagraph id="id08B77EE0BF694BF1A5411DF05D582E1E"><enum>(B)</enum><text display-inline="yes-display-inline">in addition to the basic margin protection
payment that is made on the actual milk production of the dairy producer for
the calendar year.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H3056378DAB444407B678CFAF763156C5"><enum>(2)</enum><header>Amount of
payment</header><text display-inline="yes-display-inline">The supplemental
margin protection payment for the dairy operation of a dairy producer shall be
equal to (as determined by the Secretary) the product obtained by
multiplying—</text>
<subparagraph id="HE5922BABE2984B7CA7E9C6A5BF9A5775"><enum>(A)</enum><text display-inline="yes-display-inline">the difference between the elected coverage
level under subsection (b)(2) and the greater of—</text>
<clause id="H511D94CEF89F4EFD9BD4A261D01788C9"><enum>(i)</enum><text>the
average actual dairy producer margin for the consecutive 2-month period;
or</text>
</clause><clause id="H98C6355DC65541649810B51BEDA642B9"><enum>(ii)</enum><text>$6.00;</text>
</clause></subparagraph><subparagraph id="HAC55F4071FE241B59950E2FBBD0ADE76"><enum>(B)</enum><text display-inline="yes-display-inline">the percentage of production history
elected by the dairy producer under subsection (b)(3); and</text>
</subparagraph><subparagraph id="idDE7821714B3E4366972D5C84B8949FC1"><enum>(C)</enum><text display-inline="yes-display-inline">the lesser of—</text>
<clause id="H466BAE6345C044F2A69A6EF21528E9BE"><enum>(i)</enum><text>the
quotient obtained by dividing—</text>
<subclause id="id4CBBFB3145204AA9839A8EC733FD1CFB"><enum>(I)</enum><text>the production
history of the dairy producer for the calendar year; by</text>
</subclause><subclause id="idC9BB441BDD004606B15A0324D1F68DA4"><enum>(II)</enum><text>6; and</text>
</subclause></clause><clause id="H8AF22F2A7EE64C1EAFCE41AD2DA8D3A2"><enum>(ii)</enum><text>the
actual amount of milk produced by the dairy operation of the dairy producer
during the consecutive 2-month period.</text>
</clause></subparagraph></paragraph></subsection></section><section id="HFA29BC99F10C481586D6A1848D9D3749"><enum>207.</enum><header>No payment
limitations</header><text display-inline="no-display-inline">Notwithstanding
any other provision of law, basic margin protection payments and supplemental
margin protection payments received by a dairy producer under the program shall
not be subject to limitations for any reason.</text>
</section><section id="HC8D020781401452E99406F93BB6D3D65"><enum>208.</enum><header>Use of
Commodity Credit Corporation</header><text display-inline="no-display-inline">The Secretary shall use the funds,
facilities, and the authorities of the Commodity Credit Corporation to carry
out this title.</text>
</section><section commented="no" display-inline="no-display-inline" id="H6E90103E5206462E9C5101060EF5F7ED" section-type="subsequent-section"><enum>209.</enum><header>Duration</header><text display-inline="no-display-inline">The Secretary shall conduct the program
during the period beginning on January 1, 2012, and ending on December 31,
2017.</text>
</section><enum>III</enum><header>Dairy Market
Stabilization Program</header>
<section id="HAD0E2119CC8B4FD4B609ABB42CB31E53"><enum>301.</enum><header>Definitions</header><text display-inline="no-display-inline">In this title:</text>
<paragraph id="HF3E696EDA9F549698B272BE516D0A11C"><enum>(1)</enum><header>Dairy
producer</header><text display-inline="yes-display-inline">The term <term>dairy
producer</term> means an individual or entity that directly or indirectly (as
determined by the Secretary)—</text>
<subparagraph id="HD1C5A7C04B254C11AC5008E26CDB4F36"><enum>(A)</enum><text>shares in the risk
of producing milk; and</text>
</subparagraph><subparagraph id="HF024118179BB4E92A123033ECE684852"><enum>(B)</enum><text>makes
contributions (including land, labor, management, equipment, or capital) to the
dairy farming operation of the individual or entity that are at least
commensurate with the share of the individual or entity of the proceeds of the
operation.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="HA82544D2A95E48D9BAC40B677A2CDEE9"><enum>(2)</enum><header>Handler</header>
<subparagraph id="H422C55F3111041629E07D7897BB24F3F"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The term
<term>handler</term> means a person making payment to a dairy producer for milk
produced in the United States and marketed for commercial use.</text>
</subparagraph><subparagraph id="H77436E20742B4C268497CB848920DFAF"><enum>(B)</enum><header>Producer-handler</header><text>The
term includes a producer-handler.</text>
</subparagraph></paragraph><paragraph id="HD20C5E9D817B49B492C985CAEF36B792"><enum>(3)</enum><header>Program</header><text display-inline="yes-display-inline">The term <term>program</term> means the
dairy market stabilization program established under this title.</text>
</paragraph><paragraph id="HAA45B702C935471E9A0AC1524F77900A"><enum>(4)</enum><header>Program
base</header><text>The term <term>program base</term>, with respect to a dairy
producer, means the program base calculated for the producer under section
302(b).</text>
</paragraph><paragraph id="H816F1A5676B146AEB00C39D67249093A"><enum>(5)</enum><header>Program
board</header><text>The term <term>program board</term> means the board of
directors appointed by the Secretary under section 309.</text>
</paragraph><paragraph id="HBD365018BFEE48AF8C71ACB0F79208AC"><enum>(6)</enum><header>Secretary</header><text display-inline="yes-display-inline">The term <term>Secretary</term> means the
Secretary of Agriculture.</text>
</paragraph><paragraph id="H05FC932AE12243758B356DD3C1AE4234"><enum>(7)</enum><header>United
States</header><text display-inline="yes-display-inline">The term <term>United
States</term>, in a geographical sense, means the 50 States.</text>
</paragraph></section><section id="H71C7F4F5D02C41B29B5C9714F2888C8E"><enum>302.</enum><header>Dairy market
stabilization program</header>
<subsection id="HAA98F90EF5394D1D9DBC12F6E64E37E3"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
establish and administer a dairy market stabilization program applicable to all
dairy producers in the United States for the purpose of balancing the supply of
milk with demand when the total percent production growth in milk products in a
Federal milk marketing order exceeds the combined percent growth in Class I,
II, and III milk products.</text>
</subsection><subsection id="HFCB6007E1E944F49AC315C6957C2DFD3"><enum>(b)</enum><header>Election of
program base calculation method</header>
<paragraph id="HB15E57FF91EB4E548D2EC98BBE47653D"><enum>(1)</enum><header>Deadline for
election</header><text display-inline="yes-display-inline">Not later than
January 15, 2012, each dairy producer shall inform the Secretary of the method
by which the program base for the producer for 2012 will be calculated under
paragraph (5).</text>
</paragraph><paragraph id="H5A2FD646074F4D6DBF5445E342BB7E02"><enum>(2)</enum><header>Change in
calculation method</header><text>For each year after 2012, a dairy producer may
change the program base calculation method to be used for a calendar year by
notifying the Secretary of the change not later than January 15 of that
year.</text>
</paragraph><paragraph commented="no" id="H8A08E1745DCE40CE8CA54680E1FED628"><enum>(3)</enum><header>Treatment of
multi-producer operations</header><text display-inline="yes-display-inline">If
a dairy operation consists of more than 1 dairy producer, all of the dairy
producers of the operation shall jointly make the election under paragraph (1)
with respect to the operation and jointly make any change to that election
under paragraph (2).</text>
</paragraph><paragraph display-inline="no-display-inline" id="H3432820F994143CFA64B4851B8B69754"><enum>(4)</enum><header>Treatment of
Producers with multiple dairy operations</header><text display-inline="yes-display-inline">If a dairy producer operates 2 or more
dairy operations, each dairy operation of the producer shall require a separate
election under paragraph (1).</text>
</paragraph><paragraph id="H21237770135B47C19682E9307DAAF29F"><enum>(5)</enum><header>Calculation
methods</header><text>A dairy producer may elect either of the following
methods for calculation of the program base for the producer:</text>
<subparagraph id="HAA262A4EA04144C9A9A95AABD590ADF7"><enum>(A)</enum><text>The volume of the
average monthly milk marketings of the dairy producer for the 3 months
immediately preceding the announcement by the Secretary that the program will
become effective.</text>
</subparagraph><subparagraph id="H633C192D0642486181BEFB264E5F47C4"><enum>(B)</enum><text display-inline="yes-display-inline">The volume of the monthly milk marketings
of the dairy producer for the same month in the preceding year as the month for
which the Secretary has announced the program will become effective.</text>
</subparagraph></paragraph></subsection></section><section id="HB61E381D30BD4537AB6C36D955456CD2"><enum>303.</enum><header>Program
threshold for implementation and reduction in dairy producer payments</header>
<subsection id="HC44F13560A5343E3859B824C575393BD"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
announce that the program is in effect and order reduced payments to any dairy
producer who exceeds the applicable percentage of the program base of the
producer whenever the total percent production growth in milk products in a
Federal milk marketing order exceeds the combined percent growth in Class I,
II, and III milk products for the immediately preceding 2 months.</text>
</subsection><subsection id="H02D5F8EED80B47A4878C20214EB69AD7"><enum>(b)</enum><header>Effective date
for implementation of payment reductions</header><text>Reductions in dairy
producer payments shall commence beginning on the first day of the month
immediately following the announcement by the Secretary under subsection
(a).</text>
</subsection></section><section id="H0C31CE7E6FFE4B1FBC7C1D1BC0DF223D"><enum>304.</enum><header>Collection of
producer milk marketings information</header>
<subsection id="HAA4604B566054121A354ED1AF0830BBB"><enum>(a)</enum><header>Collection by
handlers</header><text display-inline="yes-display-inline">For each month
during which the program is in effect, each handler shall calculate the
following:</text>
<paragraph id="H3450020EBEF74423AD671C8211B2BC2A"><enum>(1)</enum><text>The volume of milk
marketings the handler has received from each dairy producer during that
month.</text>
</paragraph><paragraph id="H1AFCD8FC47AF46628F5EAC7E2A6B3546"><enum>(2)</enum><text display-inline="yes-display-inline">The volume of milk marketings the handler
has received from each dairy producer during the same month of the preceding
year.</text>
</paragraph><paragraph id="H63EE426F00E74DB58A059CC5B0F0F7CE"><enum>(3)</enum><text display-inline="yes-display-inline">The volume of milk marketings the handler
has received from each dairy producer during each of the 3 months preceding the
month in which the Secretary makes the announcement that the program will be in
effect.</text>
</paragraph></subsection><subsection id="H266610582A624ED392B63C5129FB20C3"><enum>(b)</enum><header>Effect of
changing handlers</header><text>If a dairy producer changes handlers, the
producer shall ensure that milk marketings data required to make the
calculations under subsection (a) is provided to the new handler.</text>
</subsection></section><section id="HD5BA6B0F499A46AD93D783913B656322"><enum>305.</enum><header>Calculation of
reduced dairy producer payments</header>
<subsection id="H5AFB9D27AB1045E0926D872A37E661FE"><enum>(a)</enum><header>Reduced producer
payments required</header><text>During any month in which payment reductions
are in effect under the program, each handler shall—</text>
<paragraph id="HCF7B3680B499493A9053A123A63B5C8E"><enum>(1)</enum><text>reduce payments to
each dairy producer from whom the handler receives milk, if payment reductions
are required by this section; and</text>
</paragraph><paragraph id="H7DD98E412897424589F499F023BA6E91"><enum>(2)</enum><text display-inline="yes-display-inline">remit to the Secretary the amount by which
payments are reduced.</text>
</paragraph></subsection><subsection id="H4466F1A6154A47609E28A70DA4002C8A"><enum>(b)</enum><header>Reconstitution</header><text display-inline="yes-display-inline">The Secretary shall ensure that a dairy
producer does not reconstitute a dairy operation for the sole purpose of
altering the level of payment reductions required by this section.</text>
</subsection></section><section id="H6D3E39011C354073B903A6FBCF107347"><enum>306.</enum><header>Limited
availability of amounts remitted to Secretary</header>
<subsection id="H3E847E2E0C7A4E5495626237AF4E9A1D"><enum>(a)</enum><header>Availability for
program board activities</header><text display-inline="yes-display-inline">As
soon as practicable after the end of each month during which payment reductions
are in effect under the program, the Secretary shall make available to the
program board 50 percent of the amounts remitted to the Secretary under section
305 during that month.</text>
</subsection><subsection id="H6D6EEE735ABE4AD0ABED246040EADC68"><enum>(b)</enum><header>Use of remaining
amounts</header><text display-inline="yes-display-inline">The Secretary shall
deposit all amounts remitted to the Secretary under section 305 that are not
made available to the program board under subsection (a) into the general fund
of the Treasury.</text>
</subsection></section><section id="H7FB500B8872B42D09CEF0D0617C1D50B"><enum>307.</enum><header>Suspension of
reduced payment requirement</header>
<subsection id="H3B5D09B2328F49B0B63660D5E14650F3"><enum>(a)</enum><header>Suspension
thresholds</header><text display-inline="yes-display-inline">The Secretary
shall suspend the program whenever the Secretary determines that the price in
the United States for either cheddar cheese or skim milk powder (non-fat dry
milk) is more than 20 percent above the world price for that same commodity for
2 consecutive months.</text>
</subsection><subsection id="H330A29F7435848B8B16869D3D12CA522"><enum>(b)</enum><header>Implementation
by handlers</header><text display-inline="yes-display-inline">Handlers shall
cease reducing payments to dairy producers under the program upon receiving
notice of the suspension of the program from the Secretary.</text>
</subsection></section><section id="HB7D1080A448D4EB39B45B1F30A7AC291"><enum>308.</enum><header>Audit of
producer and handler compliance</header>
<subsection id="H33107BB9C1DD4D72BC6972123E57AEE2"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">If determined by the
Secretary to be necessary to ensure dairy producer and handler compliance with
the program, the Secretary may conduct periodic audits of participating dairy
operations and handlers.</text>
</subsection><subsection id="H01375A514ABC4260A1D8BEC68A87E6EE"><enum>(b)</enum><header>Sample of dairy
producers</header><text>Any audit conducted under subsection (a) shall include,
at a minimum, investigation of a statistically valid and random sample of dairy
producers.</text>
</subsection></section><section id="H2FCE3380BCBA46F881830FE4283739B3"><enum>309.</enum><header>Program
board</header>
<subsection id="H43826F77371847BBB8605C43AF1645B1"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary shall
establish a board of directors for the program for the purpose of—</text>
<paragraph id="H40BCD45A75FB485E8D6FAE370DBEFDFB"><enum>(1)</enum><text>administering the
amounts remitted to the Secretary under section 305 that are made available to
the program board under section 306; and</text>
</paragraph><paragraph id="H8F01B9B8754A44EFB94B9880ED604997"><enum>(2)</enum><text>determining the
most effective use of such funds.</text>
</paragraph></subsection><subsection id="HEBF9D1D8DA8A405693B04E2B2611BF07"><enum>(b)</enum><header>Appointment of
directors</header>
<paragraph id="HEF4062D0C62E40A0B91BADF27679B714"><enum>(1)</enum><header>Number and
qualifications</header><text display-inline="yes-display-inline">The Secretary
shall appoint 24 members to serve on the program board, who shall be
representative of the United States dairy producer community, taking into
account geographical diversity, cooperative membership, and volumes of milk
produced in various States and regions.</text>
</paragraph><paragraph id="HCE9505FC5BA540B3BBE26E4CC22151B1"><enum>(2)</enum><header>Reimbursement of
expenses</header><text display-inline="yes-display-inline">From the amounts
made available to the program board under section 306, the Secretary shall
reimburse members of the program board for those costs of service on the
program board that the Secretary determines reasonable and appropriate.</text>
</paragraph></subsection><subsection id="H98D7C8DE7F1947C99AE81E10AD4E18C5"><enum>(c)</enum><header>Decisionmaking</header><text>The
program board shall reach decisions by an affirmative vote of
<fraction>2/3</fraction> of the members of the program board.</text>
</subsection><subsection id="HBDA8791243004C93AAC08A63347FB022"><enum>(d)</enum><header>Removal of dairy
products and expansion of demand</header>
<paragraph id="H3ED90FE3C4EC4F4A8074C5A9269A90BF"><enum>(1)</enum><header>Spending
authority</header><text display-inline="yes-display-inline">The program board
may use amounts made available to the program board under section 306—</text>
<subparagraph id="HF3AE82509FF04CC7B379E348DCE0D21B"><enum>(A)</enum><text>to purchase dairy
products through commercial sources for donation to food banks and other food
programs that the Board determines appropriate, not later than 3 months after
the date on which the Secretary collected the funds; and</text>
</subparagraph><subparagraph id="H390B20C4D64A481597FC93055EF5D91E"><enum>(B)</enum><text>to expand
consumption and build demand for dairy products.</text>
</subparagraph></paragraph><paragraph id="H8C7B6B1ABFF148B49953318D9260E2B9"><enum>(2)</enum><header>No duplication
of effort</header><text display-inline="yes-display-inline">The program board
shall ensure that projects supported under paragraph (1) are compatible with,
and do not duplicate, programs supported by the dairy research and promotion
activities conducted under the Dairy Production Stabilization Act of 1983 (7
U.S.C. 4501 et seq.).</text>
</paragraph><paragraph id="H146E88C4CE524FBDBB667756627D3833"><enum>(3)</enum><header>Management
contract</header><text>The program board may enter into a contract with a
managing entity to carry out this subsection.</text>
</paragraph></subsection><subsection id="H661CFDBD7B024AEB9337F33909A540B5"><enum>(e)</enum><header>Program
evaluation</header>
<paragraph id="H04A8BB56B9B3497681654B1EAA78F436"><enum>(1)</enum><header>Contract
authority</header>
<subparagraph id="id038D79FA047D45CA821187D497237D9C"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Using amounts made
available to the program board under section 306, the program board shall enter
into a contract for an evaluation of the program after the program has been in
operation for 2 years.</text>
</subparagraph><subparagraph id="id173D176781844794A23F95289683B60E"><enum>(B)</enum><header>Requirements</header><text display-inline="yes-display-inline">The evaluation shall include the use of
established dairy economic models to ascertain the effectiveness and operation
of the program.</text>
</subparagraph></paragraph><paragraph id="H44C3E780FB3D45A8A00349D6D4F4CAA2"><enum>(2)</enum><header>Submission of
results</header>
<subparagraph id="id41A1EECC08C0408BBCEBAA28533C32AA"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The program board
shall submit to the Secretary the results of evaluations conducted under
paragraph (1).</text>
</subparagraph><subparagraph id="id8DDA2A4742234B9CB4527E77C7410797"><enum>(B)</enum><header>Recommendations</header><text display-inline="yes-display-inline">The Secretary shall review the evaluations
under paragraph (1) and submit to Congress such recommendations as the
Secretary considers appropriate regarding the program.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="HD488587231BA4679B8F0ED4E03CA608A" section-type="subsequent-section"><enum>310.</enum><header>Duration</header><text display-inline="no-display-inline">The Secretary shall conduct the program
during the period beginning on January 1, 2012, and ending on December 31,
2017.</text>
</section><enum>IV</enum><header>Miscellaneous</header>
<section id="id3AAC094BD7FC47698450AAA09E0E1B74"><enum>401.</enum><header>Repeals</header>
<subsection id="id3A67B2D2AC0C4FA3929FE52C9EC9CF97"><enum>(a)</enum><header>Dairy product
price support program, dairy forward pricing program, and milk income loss
contract program</header><text display-inline="yes-display-inline">Sections
1501, 1502, and 1506 of the Food, Conservation, and Energy Act of 2008 (7
U.S.C. 8771, 8772, 8773) are repealed.</text>
</subsection><subsection id="ID9A995950293A4CF2BDAC5B5A149CA898"><enum>(b)</enum><header>Dairy export
incentive program</header>
<paragraph id="idF39896F40DB540CBB644FC5DA9F0E3BB"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 153 of the
Food Security Act of 1985 (15 U.S.C. 713a–14) is repealed.</text>
</paragraph><paragraph id="idD98CAEA104B94B3CBB9C6054E11DF96A"><enum>(2)</enum><header>Conforming
amendments</header><text>Section 902(2) of the Trade Sanctions Reform and
Export Enhancement Act of 2000 (22 U.S.C. 7201(2)) is amended—</text>
<subparagraph id="id7480C3839D49484389AF3266F33064EA"><enum>(A)</enum><text>by striking
subparagraph (D); and</text>
</subparagraph><subparagraph id="idB9B3A8098A514E09B46F7529F38112A2"><enum>(B)</enum><text>by redesignating
subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively.</text>
</subparagraph></paragraph></subsection><subsection id="id5600EF0D98CC4F6FBAB64D09EB195C65"><enum>(c)</enum><header>Application</header><text>The
amendments made by this section apply beginning on the date on which the
regulations required under section 402 take effect.</text>
</subsection></section><section id="idD8D3E107C449479DA49A2F4D15BA3DDD"><enum>402.</enum><header>Regulations</header><text display-inline="no-display-inline">Not later than 270 days after the date of
enactment of this Act, the Secretary of Agriculture shall promulgate such
regulations as are necessary to carry out this Act and the amendments made by
this Act.</text>
</section><section id="id0B662CFB964F41CCBA5D10E88C9D71AD"><enum>403.</enum><header>Budgetary
effects</header><text display-inline="no-display-inline">The budgetary effects
of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act
of 2010, shall be determined by reference to the latest statement titled
<quote>Budgetary Effects of PAYGO Legislation</quote> for this Act, submitted
for printing in the Congressional Record by the Chairman of the Senate Budget
Committee, provided that such statement has been submitted prior to the vote on
passage.</text>
</section>