[Congressional Record Volume 141, Number 60 (Friday, March 31, 1995)]
[Senate]
[Pages S4993-S4997]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DOMENICI:
  S. 657. A bill to amend the Internal Revenue Code of 1986 to repeal 
the 1993 Federal income tax rate increases on trusts established for 
the benefit of individuals with disabilities or for college education 
costs of a beneficiary; to the Committee on Finance.


     the persons with disabilities trusts tax rate restoration act

 Mr. DOMENICI. Mr. President, things aren't always as they 
seem--especially in the world of tax legislation. Included in the same 
section that raised the tax rates for higher income individuals were 
provisions increasing the tax rate for trusts with meager incomes as 
low as $1,500.
  President Clinton campaigned that he wouldn't raise taxes on anyone 
earning less than $200,000, yet in the law the President signed in 
1993, tax bracket increases begin for trusts that have income of 
$1,500.
  This isn't really a tax on trusts. It is a tax on people who are 
mentally ill and people with disabilities. It is also a tax on 
education.
  The legislation I am introducing today would repeal that tax 
increase.
  Trusts, at first blush, are faceless entities associated with the 
idle rich. But the vast majority of trusts are long- 
[[Page S4994]] term financial planning tools for people with simple 
goals and very special needs.
  Trusts are set up to save for college or to provide a living 
allowance for people with disabilities or mental illness. It is a way 
that parents can plan for the time when they have passed on. These are 
``worthy purpose'' trusts that are taking a heavy tax hit under the 
1993 law.
  Increasing the tax rates on these faceless entities called trusts 
sounds appealing until we stop to realize that the money comes out of 
the living allowances of individuals with disabilities, or mental 
illnesses.
  I have experienced personally the agony a family faces as they try to 
adequately plan and provide for the future comfort and financial 
management of the affairs of a person with a disability or mental 
illness. Parents of children with special needs feel an indescribable 
vulnerability and responsibility as they contemplate, ``How can we best 
provide for our child who has a disability or mental illness when we 
are gone?'' ``How can we insure that he/she will have an adequate 
living allowance?'' It is an inescapable worry that shouldn't be 
compounded by misguided and ever changing tax policy.
  The problems are complex. It isn't just having enough money. Money
   isn't the issue. Taxes aren't the issue. It is a management and 
caring dilemma. Some loved ones who are mentally ill are not suited to 
have immediate access to the financial resources that their parents 
saved for their economic security. A trust is a mechanism to provide 
the financial resources that parents would provide if they were still 
alive.

  These trusts are not set up because wealthy people are trying to 
avoid taxes. Most of the tax avoidance schemes were written out of the 
Tax Code in 1986 anyway. The type of trust I am talking about is set up 
to provide for a loved one. Our tax policy should encourage family 
responsibility. Only the family can be counted on to provide financial 
support.
  This is a terrible deed that we did to raise the rates on these 
trusts. Some of these trusts were set up decades ago to provide an 
adequate living allowance. They are irrevocable trusts. Once they are 
set up they cannot be changed.
  These trusts are vulnerable to interest rate fluctuations and other 
economic variables. It is wrong to also subject them to an ever 
increasing tax burden.
  Parents and grandparents like to set up education trusts for their 
children and grandchildren. It teaches children to save. But under the 
current law, trust income is taxed much more steeply than in the past. 
In fact, these tax provisions really clobber these trusts, too.
  Under the old law, taxable trusts for college or for the care and 
maintenance of a person who is disabled or suffers from a mental 
illness paid a top rate of 31 percent on taxable income of more than 
$11,250. That was quite steep.
  But under current law, it became much, much worse. They pay 39.6 
percent on income of more than $7,500.
  This means that a very small trust under prior law with income of 
$2,750 would have paid $562 in Federal income taxes. Under the current 
law, the trust pays $862--a 53-percent increase.
  The bill I am introducing today would repeal that 53-percent rate 
increase.
  Under the new tax law, trusts would pay 31 percent on income between 
$3,500 and $5,500; 36 percent on income over $5,500 and 10 percent 
surcharge on income over $7,500 leading to a marginal rate of 39.6 
percent.
  For a country with a miserable savings rate, this is the wrong tax 
policy and the wrong message to our children about responsibility, 
savings and investment.
  I would like to think the rate increase for these trusts was an 
unintended consequence of the tax law. Regardless, it is one provision 
that should be repealed.
  I hope my colleagues will join me in cosponsoring this bill. I ask 
unanimous consent that a copy of the legislation be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
                                 S. 657
       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 ``Persons With Disabilities 
     Trusts Tax Rate Restoration Act''.

     SEC. 2. REPEAL OF 1993 RATE INCREASES ON TRUSTS FOR 
                   INDIVIDUALS WHO ARE DISABLED OR FOR COLLEGE 
                   EDUCATIONS.

       (a) In General.--Section 1(e) of the Internal Revenue Code 
     of 1986 (relating to tax imposed on estates and trusts) is 
     amended to read as follows:
       ``(e) Estates and Trusts.--
       ``(1) In general.--Except as provided in paragraph (2), 
     there is hereby imposed on the taxable income of--
       ``(A) every estate, and
       ``(B) every trust,

     taxable under this subsection a tax determined in accordance 
     with the following table:

The tax is:e income is:
15% of taxable income..................................................
$225, plus 28% of the excess over $1,500...............................
$785, plus 31% of the excess over $3,500...............................
$1,405, plus 36% of the excess over $5,500.............................
$2,125, plus 39.6% of the excess over $7,500...........................

       ``(2) Special rule for certain trusts.--
       ``(A) In general.--There is hereby imposed on the taxable 
     income of an eligible trust taxable under this subsection a 
     tax determined in accordance with the following table:

The tax is:e income is:
15% of taxable income..................................................
$495, plus 28% of the excess over $3,300...............................
$2,343, plus 31% of the excess over $9,900.............................

       ``(B) Eligible trust.--For purposes of subparagraph (A), 
     the term `eligible trust' means a trust which is established 
     exclusively for the purpose of providing reasonable amounts 
     for--
       (i) the support and maintenance of 1 or more beneficiaries 
     each of whom is an individual who is mentally ill or has a 
     disability (within the meaning of section 3(2) of the 
     Americans With Disabilities Act of 1990 (42 U.S.C. 12102(2)) 
     at the time the trust is established,
       (ii) the support and maintenance of 1 or more beneficiaries 
     each of whom is under 21 years of age and whose custodial 
     parent or parents are deceased, or
       (iii) the payment of qualified higher education expenses 
     (as defined in section 135(c)(2)) of the grantor's children 
     or grandchildren.

     A trust shall not fail to meet the requirements of this 
     subparagraph merely because the corpus of the trust may 
     revert to the grantor or a member of the grantor's family 
     upon the death of the beneficiary.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1994.
                                 ______

      By Mr. BINGAMAN:
  S. 658. A bill to expand the boundary of the Santa Fe National 
Forest, and for other purposes; to the Committee on Energy and Natural 
Resources.


          The Santa Fe National Forest Boundary Adjustment Act

 Mr. BINGAMAN. Mr. President, today I am introducing 
legislation on behalf of myself and Senator Domenici to authorize the 
Forest Service to acquire land and easements adjacent to the Santa Fe 
National Forest in New Mexico. The purpose of this legislation is to 
preserve the Atalaya Mountain area, east of the city of Santa Fe, NM. 
The tracts of land in question comprise a portion of the eastern scenic 
backdrop of Santa Fe which provide the physical and visual edge of the 
city. They are logical additions to the Santa Fe Forest.
  The expanded boundary will adjoin existing city-owned lands, and will 
connect with and contribute to the city's open space plan. This 
boundary adjustment will provide a more logical exterior boundary for 
the Santa Fe National Forest, thereby also facilitating management and 
administration of these Federal lands.
  This property possesses outstanding scenic qualities that are 
presently enjoyed by the general public traveling in the vicinity. In 
addition, these lands are crossed by historic wood gathering trails, 
used by Santa Fe residents for over 300 years, and could provide 
permanently protected public access corridors.
  Over the last several months, broad community concern has been 
expressed over the prospect of development of the west face of Atalaya 
Mountain. There is strong public support for preserving this property 
in an undeveloped state for public use and enjoyment. The purpose of 
this legislation is to protect Atalaya Mountain through acquisition of 
land and conservation easements by the Forest Service, thus returning 
the land to the public as open space. This 
[[Page S4995]] legislation specifically prohibits the Forest Service 
from selling this land and endangering it to development in the future. 
It is our intent that this legislation spur Forest Service acquisition 
and provide the extra protection that the mountain so richly deserves.
  This effort represents a high level of cooperation and compromise 
among several parties--the current owners of the land in question, 
Santa Feans concerned about the preservation of open space, and local 
and Federal governments. I am pleased to support this effort through 
introduction of this legislation, which will ensure that Atalaya 
Mountain, one of Santa Fe's natural treasures, will be protected. Let 
me take this opportunity to thank my colleague, Senator Domenici, for 
his cosponsorship of this legislation. Congressman Richardson has 
introduced companion legislation in the House of Representatives. It is 
my hope that we will be able to move swiftly to pass this legislation, 
and I urge my colleagues to support this bill.
  Thank you, Mr. President. I ask that the full text of this 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 658

       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 ``Santa Fe National Forest 
     Boudary Adjustment Act of 1995''.

     SEC. 2. BOUNDARY MODIFICATION.

       The boundary of the Santa Fe National Forest is modified 
     and expanded as generally depicted on a map entitled ``Santa 
     Fe National Boundary Expansion 1994'', dated July 19, 1994. 
     The map shall be on file and available for public inspection 
     in the office of the Chief of the Forest Service.

     SEC. 3. ATALAYA PEAK EXCHANGES.

       (a) In General.--The Secretary of the Interior may exchange 
     public land and interests in land managed by the Director of 
     the Bureau of Land Management for private land and interests 
     in land depicted on the map described in section 2.
       (b) Withdrawal.--Upon the acquisition of land under 
     subsection (a) by the Secretary of the Interior, and subject 
     to valid existing rights, such land is withdrawn from--
       (1) all forms of entry, appropriation, or disposal under 
     the public land laws;
       (2) location, entry, and patent under the mining laws; and
       (3) disposition under all laws pertaining to mineral and 
     geothermal leasing.

     SEC. 4. EXCHANGE OF FEDERAL LANDS IN NEW MEXICO.

       (a) Identification of Lands.--In conjunction with the 
     exchange of lands under section 3, the Secretary of 
     Agriculture and the Secretary of the Interior shall identify 
     federally owned lands and interests in land that are within 
     the boundary of the Santa Fe National Forest on the date of 
     enactment of this Act and are suitable for transfer to and 
     administration by the Bureau of Land Management. The 
     identification of National Forest System land available for 
     transfer shall be made under criteria that are mutually 
     agreeable to the Secretaries.
       (b) Lands Acquired for the Bureau of Land Management.--
       (1) Transfer by secretary of agriculture.--The Secretary of 
     Agriculture shall transfer to the Secretary of the Interior, 
     acting through the Director of the Bureau of Land Management, 
     lands and interests in land identified under subsection (a). 
     The transfer shall be effective on publication in the Federal 
     Register of notice of the transfer that identifies the lands 
     and interests in land.
       (2) Boundary modification.--The boundary of the Santa Fe 
     National Forest shall be modified as of the date of notice 
     under paragraph (1) to exclude lands and interests in land 
     that are transferred to the Secretary of the Interior.
       (3) Management.--Lands transferred under paragraph (1) 
     shall be administered by the Director of the Bureau of Land 
     Management as part of the public lands (as defined in section 
     103(e) of the Federal Land Policy and Management Act of 1976 
     (43 U.S.C. 1702(e))).
       (c) Lands Acquired for the Forest Service.--
       (1) Addition to Sante Fe National Forest.--Lands and 
     Interests in Land--
       (A) acquired by the Secretary of the Interior under section 
     3; or
       (B) acquired by the Secretary of Agriculture within the 
     areas identified as ``potential acquisition'' on the map 
     described in section 2,

     shall, upon acquisition, be added to and administered as part 
     of the Santa Fe National Forest in accordance with the laws 
     relating to the National Forest System.
       (2) Management.--The Secretary of Agriculture shall manage 
     lands and interest in land described in paragraph (1) 
     primarily to preserve open space and scenic values and to 
     preclude development.
       (3) Availability of certain funds.--For the purposes of 
     section 7(a)(1) of the Land and Water Conservation Fund Act 
     of 1965 (16 U.S.C. 460l-9(a)(1)), the boundary of the Santa 
     Fe National Forest, as modified under this Act, shall be 
     treated as if it had been the boundary as of January 1, 1965.

     SEC. 5. SAVINGS PROVISION.

       (a) In General.--Nothing in this Act shall affect the 
     authority of the Secretary of Agriculture to acquire lands in 
     New Mexico by purchase or exchange.
       (b) Management.--Notwithstanding the Act of June 15, 1926 
     (16 U.S.C. 471a), all lands acquired before, on, or after the 
     date of enactment of this Act by the exchange of National 
     Forest lands shall be managed as a part of the National 
     Forest System.

     SEC. 6. IMPLEMENTATION.

       The procedures used in carrying out the land transfers 
     under this Act shall be the procedures agreed to between the 
     Secretary of the Interior and the Secretary of 
     Agriculture.
                                 ______

      By Mr. FEINGOLD:
  S. 659. A bill to amend the Food, Agriculture, Conservation, and 
Trade Act of 1990 to replace the prohibition on higher State make-
allowances for the processing of milk with a requirement that the 
support purchase price for milk be reduced if a person collects a State 
make-allowance that is higher than the Federal make-allowance and the 
milk is purchased by the Commodity Credit Corporation, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.


           elimination of double subsidy to dairy processors

  Mr. FEINGOLD. Mr. President, today I am introducing the legislation 
that will restore some fairness to the Dairy Price Support Program. 
Previous legislative and administrative attempts to correct the problem 
in the system have been unsuccessful. It is time to try a new approach.
  Under the Dairy Price Support Program, USDA set Commodity Credit 
Corporation purchase prices for manufactured daily products in order to 
indirectly support the price of milk. Rather than requiring the 
processors to pay dairy producers the support price, the Dairy Price 
Support Program sets the support price for the individual manufactured 
products at levels sufficient to achieve plant returns that in turn, 
allow processors to pay farmers the specified support price. This 
requires a determination by USDA as to the appropriate plant margin. 
This margin is more commonly known as a ``make allowance. ''
  Despite changes in the 1990 farm bill, some States in this country, 
are still able to set prices for milk used to make cheese, butter, and 
nonfat dry milk such that processing plants are guaranteed a higher 
profit margin--or make allowance--for their products than allowed under 
the dairy price support system. That allowance provides companies in 
those States with an artificial competitive advantage. At the same 
time, processors in those States sell significant amounts of surplus 
dairy products to the Federal Government.
  The bill I am introducing today sends a clear message to those 
States--it says ``You can't have it both ways.''
  While the specifics of this issue are complex, the fundamentals are 
clear and understandable. If States create pricing structures to give 
their milk processors a leg up, they cannot do so at taxpayers expense.
  That is exactly what is happening in the State of California today. 
Because of the California State pricing system, cheese, butter, and dry 
milk processors are provided such a high make allowance that they can 
sell their products competitively on the east coast even with the high 
cost of transportation. Meanwhile, other States must abide by the 
manufacturing margin set by the Department of Agriculture.
  Currently, the State of California provides their plants with a make 
allowance that is 57 cents per hundredweight higher than the national 
make allowance for cheese, and nearly 60 cents per hundredweight higher 
than the national make allowance for the processing of butter and milk 
powder.
  California processors pay their dairy farmers less for the milk they 
need to make cheese, butter, and powder, and let farmers absorb the 
market risk, while taxpayers absorb the cost.
  Meanwhile, processors elsewhere in the country who are playing by 
the 
[[Page S4996]] rules, paying at least Minnesota-Wisconsin base price or 
an associated minimum price for milk used in dry milk production, are 
forced to compete with California's products in the grocery store's 
dairy
 case. If we don't change this inequity, processors and dairy farmers 
outside of California will continue to lose.

  The growth in the California dairy processing industry in the last 10 
years has been dramatic--and it is due--at least in part--to the higher 
make allowance. The higher profitability of the plants drives the need 
to operate plants at capacity and build even more plants creating a 
demand for milk that spurs on the growth of milk production. The lack 
of risk for processors makes dairy manufacturing even more attractive 
to investors. As one might expect, Mr. President, the sales of surplus 
dairy product to the Federal Government from California have been 
dramatic as well.
  Between 1990 and 1994 marketing years, one State--the State of 
California--sold 35 percent of all of the surplus butter purchased by 
the Federal Government and 42 percent of all the nonfat dry milk 
purchased by the Government.
  Not only does the higher make allowance provide California dairy 
product manufacturers with an artificial competitive advantage in the 
market place, it encourages milk production and increases surpluses, 
driving down national milk prices to farmers.
  Congress recognized the importance of this issue in the 1990 farm 
bill when we prohibited any State from having a higher make allowance 
than the Federal make allowance. Five years later, the law has not been 
implemented. The Secretary's attempt to implement the law has already 
been the subject of seven lawsuits. Complaints about the Department's 
proposed rule have at the same time charged the rule will have no 
impact whatsoever or be wholly devastating on both the California 
processing industry and the national dairy industry. Well, Mr. 
President, I doubt that both could simultaneously be true, but it is 
hard to know which will be the final outcome.
  It is time to restore some reason to this drawn out administrative 
process. My bill does that. It simplifies the law by removing the 
overall prohibition on States having higher make allowances. It 
eliminates the existing statutory requirements for penalties and it 
removes the burden from the producer to bring a complaint against his 
processor to USDA.
  My bill simply requires the Commodity Credit Corporation to reduce 
the price it pays to any plant or person selling surplus dairy products 
to the Government operating in a state with a pricing system that 
provides a higher make allowance, by an amount that is equal to the 
difference between the State and Federal make allowance. Regardless of 
the point of sale of the dairy products, if they were produced by a 
plant in a state with a higher make allowance, the CCC purchase price 
must be reduced.
  This bill also explicitly includes cooperatives which have been 
exempted from the proposed USDA rules. Since dairy cooperatives market 
most of the milk in California, it is essential that they be compelled 
to comply with the requirements of this bill.
  This bill is based upon a proposal by the Lakeshore Federated Dairy 
Cooperative in Wisconsin and their member-producers who are fed up with 
USDA's inability to implement current law, the artificial competitive 
disadvantages they face in the dairy case, and the bald-faced abuse of 
the dairy price support system that has gone unfettered for the last 15 
years.
  The appeal of this approach is obvious. It allows an individual State 
to have its own pricing structures, but forces them to play by the 
rules of the Federal dairy price support program if they wish to take 
advantage of it. States should not be allowed to increase the cost of 
the dairy price support program to taxpayers and depress national 
prices to other producers in the process, while providing their own 
dairy industry with an additional processing subsidy.
  The legislation I am proposing not only makes more sense than the 
current proposal, it also saves money. It has less of an impact on 
California producer prices and will not lead to significant increases 
in milk production. In fact, preliminary CBO estimates indicate that 
this legislation, if enacted, would save upwards of $40 million over 5 
years.
  I think this is a solid compromise to a long-standing problem that 
will persist if Congress fails to act. I encourage my colleagues to 
support this legislation.
  I ask unanimous consent that a letter from the Lakeshore Federated 
Dairy Cooperative be included in the Record, and that the text of the 
bill also be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 659

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

     SECTION 1. MILK MANUFACTURING MARKETING ADJUSTMENT.

       Subsections (a) and (b) of section 102 of the Food, 
     Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
     1446e-1) are amended to read as follows:
       ``(a) Definitions.--In this section:
       ``(1) Federal make allowance.--The term `Federal make 
     allowance' means the allowance for the processing of milk 
     that is permitted under a Federal program to establish a 
     Grade A price for manufacturing butter, nonfat dry milk, or 
     cheese.
       ``(2) Person.--The term `person' includes a cooperative.
       ``(3) State make allowance.--The term `State make 
     allowance' means the allowance for the processing of milk 
     that is permitted by a State for manufacturing butter, nonfat 
     dry milk, or cheese.
       ``(b) Milk Manufacturing Marketing Adjustment.--
     Notwithstanding any other provision of law, if a person 
     collects a State make allowance that is higher than the 
     Federal make allowance and the milk or product of milk that 
     is subject to the allowance is purchased by the Commodity 
     Credit Corporation, regardless of the point of sale, the 
     Corporation shall reduce the support purchase price for the 
     milk and each product of the milk by an amount that is equal 
     to the difference between the State make allowance and the 
     Federal make allowance for the milk and product, as 
     determined by the Secretary of Agriculture.''.
                                                                    ____

                                               Lakeshore Federated


                                            Dairy Cooperative,

                                     Rockford, IL, March 31, 1995.
     Hon. Russ Feingold,
     U.S. Senate,
     Washington, DC.
       Dear Senator Feingold: Lakeshore Federated Dairy 
     Cooperative supports your adjustments to ``Milk Manufacturing 
     Marketing Adjustment'' in your proposed legislation.
       The major impact of implementing the ``Milk Manufacturing 
     Marketing Adjustment'' would be on cheese sales to the 
     Commodity Credit Cooperation. The current California make 
     allowance for cheese per hundredweight is $1.94. This 
     compares to the $1.37 per hundredweight used by the CCC in 
     calculating the block cheddar cheese purchase price. This 
     section will eliminate a $0.57 make allowance advantage 
     California has over cheese manufacturing plants in 42 other 
     states.
       California's Class 4b make allowance has resulted in the 
     cost of milk to California cheesemakers to fall below the M-W 
     price, which represents the minimum cost of milk to 
     cheesemakers regulated under federal orders in 42 states. 
     This allows California cheese plants to produce cheese at a 
     lower raw milk cost than plants in most other states, because 
     of a government loop-hole.
       California has had this windfall for the past 10 years and 
     is using politics and the court system to delay any new 
     regulations.
       The dairy industry in California had an opportunity to take 
     care of the California make allowance provision that had come 
     to the attention of the U.S. Congress and USDA in February 
     1992. California chose to ignore the U.S. Congress and 
     Section 102 of the 1990 Farm Bill. They chose to add 70 cents 
     per cwt. on milk used in Class I and Class II as a surcharge, 
     through an emergency price relief bill passed in 1991.
       This price relief bill allowed the California department of 
     Food and Agriculture to increase the cost of milk utilized in 
     Class I and Class II and the fluid milk consumers subsidized 
     the California milk producer and continued to allow a high 
     make allowance to the milk manufacturing industry. This 
     emergency price relief bill was just another California State 
     milk pricing scheme to allow the California milk 
     manufacturing industry to continue to use high state ``make 
     allowance.''
       Congress recognized this make allowance issue in the 1990 
     Farm Bill and instructed USDA to correct the problem. USDA 
     failed to honor the request, as they have done prior to the 
     1990 Farm Bill. Our cooperative filed briefs with Secretary 
     of Agriculture, Mike Espy, in 1994 on the make allowance 
     issue and as of today, nothing has been done.
       The California Department of Food and Agriculture has 
     denied a petition to hold hearings on whether the state's 
     Class 4-A and 4-B milk pricing formulas
      should be replaced with the Minnesota-Wisconsin price within 
     the past month. There is no doubt 
     [[Page S4997]] that the California dairy industry has no 
     respect for the U.S. Congress or USDA's internal politics. 
     They had a chance to correct the make allowance inequity this 
     past month and thumbed their nose at the rest of the United 
     States.
       Lakeshore Federated Dairy Cooperative is made up of three 
     Capper-Volstead Cooperatives: Manitowoc Milk Producers 
     Cooperative, Milwaukee Cooperative Milk Producers, 
     Brookfield, WI, and Mid-West Dairymens Co., Rockford, IL. The 
     combined membership of the three cooperatives includes 6,200 
     farm families located in Wisconsin, Illinois, Michigan, 
     Minnesota and Iowa.
       The cost to administrate this new section in the 1995 Farm 
     Bill is zero. The CCC will make a calculation once for the 
     States with milk pricing schemes and use the same reduction 
     on the price per pound of products purchased by the CCC. This 
     price per pound reduction will also reduce spending by USDA.
       Members of our cooperatives feel there is little downside 
     to your proposed legislation. There have been scenarios as to 
     the shift of milk from cheese to NFDM production or the shift 
     of milk from NFDM production to cheese production. These are 
     unpublished studies with questionable assumptions and 
     conclusions.
       We would like to thank you and your staff for supporting 
     this make allowance issue. If our cooperatives can be of any 
     assistance to you, please let us know.
           Sincerely,
     Dennis Donohue,
                                                    Manitowoc Milk
                                            Producers Cooperative.
     James Bird,
                                             Milwaukee Cooperative
                                                   Milk Producers.
     John Trei,
                                       Mid-West Dairymens Company.
     

                          ____________________