Library / Laws / 113th / s / S. 605 / Introduced in Senate
II
113th CONGRESS
1st Session
S. 605
IN THE SENATE OF THE UNITED STATES
March 19, 2013
Mrs. Gillibrand
introduced the following bill; which was read twice and referred to the
Committee on Agriculture, Nutrition, and
Forestry
A BILL
To improve Federal dairy programs.
1.
Short
title
This Act may be cited as
the Dairy Income Fairness Act of
2013.
2.
Definition of
Secretary
In this Act, the
term Secretary means the Secretary of Agriculture.
D
Dairy
I
Dairy
production margin protection and dairy market stabilization programs
1401.
Definitions
In this part:
(1)
Actual dairy
production margin
The term actual dairy production
margin means the difference between the all-milk price and the average
feed cost, as calculated under section 1402.
(2)
All-milk
price
The term all-milk price means the average
price received, per hundredweight of milk, by dairy operations for all milk
sold to plants and dealers in the United States, as determined by the
Secretary.
(3)
Annual
production history
The term annual production
history means the production history determined for a participating
dairy operation under section 1413(b) whenever the participating dairy
operation purchases supplemental production margin protection.
(4)
Average feed
cost
The term average feed cost means the average
cost of feed used by a dairy operation to produce a hundredweight of milk,
determined under section 1402 using the sum of the following:
(A) The product
determined by multiplying 1.0728 by the price of corn per bushel.
(B) The product
determined by multiplying 0.00735 by the price of soybean meal per ton.
(C) The product
determined by multiplying 0.0137 by the price of alfalfa hay per ton.
(5)
Basic production
history
The term basic production history means the
production history determined for a participating dairy operation under section
1413(a) for provision of basic production margin protection.
(6)
Consecutive
2-month period
The term consecutive 2-month period
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.
(7)
Dairy
operation
(A)
In
general
The term dairy operation means, as
determined by the Secretary, 1 or more dairy producers that produce and market
milk as a single dairy operation in which each dairy producer—
(i) shares in the
pooling of resources and a common ownership structure;
(ii) is
at risk in the production of milk on the dairy operation; and
(iii) contributes
land, labor, management, equipment, or capital to the dairy operation.
(B)
Additional
ownership structures
The Secretary shall determine additional
ownership structures to be covered by the definition of dairy operation.
(8)
Handler
(A)
In
general
The term handler means the initial
individual or entity making payment to a dairy operation for milk produced in
the United States and marketed for commercial use.
(B)
Producer-handler
The
term includes a producer-handler when the producer satisfies the
definition in subparagraph (A).
(9)
Participating
dairy operation
The term participating dairy
operation means a dairy operation that—
(A) signs up under
section 1412 to participate in the production margin protection program under
subpart A; and
(B) as a result, also
participates in the stabilization program under subpart B.
(10)
Production
margin protection program
The term production margin
protection program means the dairy production margin protection program
required by subpart A.
(11)
Secretary
The
term Secretary means the Secretary of Agriculture.
(12)
Stabilization
program
The term stabilization program means the
dairy market stabilization program required by subpart B for all participating
dairy operations.
(13)
Stabilization
program base
The term stabilization program base,
with respect to a participating dairy operation, means the stabilization
program base calculated for the participating dairy operation under section
1431(b).
(14)
United
States
The term United States, in a geographical
sense, means the 50 States, the District of Columbia, American Samoa, Guam, the
Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico,
the Virgin Islands of the United States, and any other territory or possession
of the United States.
1402.
Calculation of
average feed cost and actual dairy production margins
(a)
Calculation of
average feed cost
The Secretary shall calculate the national
average feed cost for each month using the following data:
(1) The price of corn
for a month shall be the price received during that month by farmers in the
United States for corn, as reported in the monthly Agricultural Prices report
by the Secretary.
(2) The price of soybean meal for a month shall
be the central Illinois price for soybean meal, as reported in the Market
News–Monthly Soybean Meal Price Report by the Secretary.
(3) The price of alfalfa hay for a month shall
be the price received during that month by farmers in the United States for
alfalfa hay, as reported in the monthly Agricultural Prices report by the
Secretary.
(b)
Calculation of
actual dairy production margins
(1)
Production
margin protection program
For use in the production margin
protection program under subpart A, the Secretary shall calculate the actual
dairy production margin for each consecutive 2-month period by
subtracting—
(A) the average feed
cost for that consecutive 2-month period, determined in accordance with
subsection (a); from
(B) the all-milk price
for that consecutive 2-month period.
(2)
Stabilization
program
For use in the stabilization program under subpart B, the
Secretary shall calculate each month the actual dairy production margin for the
preceding month by subtracting—
(A) the average feed
cost for that preceding month, determined in accordance with subsection (a);
from
(B) the all-milk price
for that preceding month.
(3)
Time for
calculations
The calculations required by paragraphs (1) and (2)
shall be made as soon as practicable using the full month price of the
applicable reference month.
A
Dairy production
margin protection program
1411.
Establishment
of dairy production margin protection program
Effective not later than 120 days after the
effective date of this subtitle, the Secretary shall establish and administer a
dairy production margin protection program under which participating dairy
operations are paid—
(1) basic production
margin protection program payments under section 1414 when actual dairy
production margins are less than the threshold levels for such payments;
and
(2) supplemental
production margin protection program payments under section 1415 if purchased
by a participating dairy operation.
1412.
Participation
of dairy operations in production margin protection program
(a)
Eligibility
All dairy operations in the United States
shall be eligible to participate in the production margin protection program,
except that a participating dairy operation shall be required to register with
the Secretary before the participating dairy operation may receive—
(1) basic production
margin protection program payments under section 1414; and
(2) if the participating dairy operation
purchases supplemental production margin protection under section 1415,
supplemental production margin protection program payments under such
section.
(b)
Registration
process
(1)
In
general
The Secretary shall
specify the manner and form by which a participating dairy operation may
register to participate in the production margin protection program.
(2)
Treatment of
multiproducer dairy operations
If a participating dairy operation
is operated by more than 1 dairy producer, all of the dairy producers of the
participating dairy operation shall be treated as a single dairy operation for
purposes of—
(A) registration to
receive basic production margin protection and election to purchase
supplemental production margin protection;
(B) payment of the
participation fee under subsection (d) and producer premiums under section
1415; and
(C) participation in
the stabilization program under subtitle B.
(3)
Treatment of
producers with multiple dairy operations
If a dairy producer
operates 2 or more dairy operations, each dairy operation of the producer shall
separately register to receive basic production margin protection and purchase
supplemental production margin protection and only those dairy operations so
registered shall be covered by the stabilization program.
(c)
Time for
registration
(1)
Existing dairy
operations
During the
15-month period beginning on the date of the initiation of the registration
period for the production margin protection program, a dairy operation that is
actively engaged as of such date may register with the Secretary—
(A) to receive basic
production margin protection; and
(B) if the dairy
operation elects, to purchase supplemental production margin protection.
(2)
New
Entrants
A dairy producer
that has no existing interest in a dairy operation as of the date of the
initiation of the registration period for the production margin protection
program, but that, after such date, establishes a new dairy operation, may
register with the Secretary during the 1-year period beginning on the date on
which the dairy operation first markets milk commercially—
(A) to receive basic
production margin protection; and
(B) if the dairy
operation elects, to purchase supplemental production margin protection.
(d)
Transition from
MILC to production margin protection
(1)
Definition of
transition period
In this subsection, the term transition
period means the period during which the milk income loss program
established under section 1506 of the Food, Conservation, and Energy Act of
2008 (7 U.S.C. 8773) and the production margin protection program under this
subtitle are both in existence.
(2)
Notice of
availability
Not later than
30 days after the date of enactment of this Act, the Secretary shall publish a
notice in the Federal Register to inform dairy operations of the availability
of basic production margin protection and supplemental production margin
protection, including the terms of the protection and information about the
option of dairy operations during the transition period to make an election
described in paragraph (3).
(3)
Election
Except as provided in paragraph (4), a
dairy operation may elect to participate in either the milk income loss program
established under section 1506 of the Food, Conservation, and Energy Act of
2008 (7 U.S.C. 8773) or the production margin protection program under this
subtitle for the duration of the transition period.
(4)
Transfer to
production margin protection
A dairy operation that elects to
participate in the milk income loss program established under section 1506 of
the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) during the
transition period may, at any time, make a permanent transfer to the production
margin protection program.
(e)
Administration
fee
(1)
Administration
fee required
Except as
provided in paragraph (5), a participating dairy operation shall—
(A) pay an administration fee under this
subsection to register to participate in the production margin protection
program; and
(B) pay the administration fee annually
thereafter to continue to participate in the production margin protection
program.
(2)
Fee
amount
The administration fee
for a participating dairy operation for a calendar year shall be based on the
pounds of milk (in millions) marketed by the participating dairy operation in
the previous calendar year, as follows:
Pounds Marketed (in millions)Administration Fee
less than 1$100
1 to 5 $250
more than 5 to 10$350
more than 10 to 40$1,000
more than 40$2,500.
(3)
Deposit of
Fees
All administration fees
collected under this subsection shall be credited to the fund or account used
to cover the costs incurred to administer the production margin protection
program and the stabilization program and shall be available to the Secretary,
without further appropriation and until expended, for use or transfer as
provided in paragraph (4).
(4)
Use of
Fees
The Secretary shall use
administration fees collected under this subsection—
(A) to cover
administrative costs of the production margin protection program and
stabilization program; and
(B) to cover costs of the Department of
Agriculture relating to reporting of dairy market news, carrying out the
amendments made by section 1476, and carrying out section 273 of the
Agricultural Marketing Act of 1946 (7 U.S.C. 1637b), to the extent funds remain
available after operation of subparagraph (A).
(5)
Waiver
The
Secretary shall waive or reduce the administration fee required under paragraph
(1) in the case of a limited-resource dairy operation, as defined by the
Secretary.
(f)
Limitation
A
dairy operation may only participate in the production margin protection
program or the livestock gross margin for dairy program under the Federal Crop
Insurance Act (7 U.S.C. 1501 et seq.), but not both.
1413.
Production
history of participating dairy operations
(a)
Production
history for basic production margin protection
(1)
Determination
required
For purposes of
providing basic production margin protection, the Secretary shall determine the
basic production history of a participating dairy operation.
(2)
Calculation
Except as provided in paragraph (3), the
basic production history of a participating dairy operation for basic
production margin protection is equal to the highest annual milk marketings of
the participating dairy operation during any 1 of the 3 calendar years
immediately preceding the calendar year in which the participating dairy
operation first signed up to participate in the production margin protection
program.
(3)
Election by new
dairy operations
In the case
of a participating dairy operation that has been in operation for less than a
year, the participating dairy operation shall elect 1 of the following methods
for the Secretary to determine the basic production history of the
participating dairy operation:
(A) The volume of the
actual milk marketings for the months the participating dairy operation has
been in operation extrapolated to a yearly amount.
(B) An estimate of the
actual milk marketings of the participating dairy operation based on the herd
size of the participating dairy operation relative to the national rolling herd
average data published by the Secretary.
(4)
No change in
production history for basic production margin protection
Once the basic production history of a
participating dairy operation is determined under paragraph (2) or (3), the
basic production history shall not be subsequently changed for purposes of
determining the amount of any basic production margin protection payments for
the participating dairy operation made under section 1414.
(b)
Annual
production history for supplemental production margin protection
(1)
Determination
required
For purposes of
providing supplemental production margin protection for a participating dairy
operation that purchases supplemental production margin protection for a year
under section 1415, the Secretary shall determine the annual production history
of the participating dairy operation under paragraph (2).
(2)
Calculation
The annual production history of a
participating dairy operation for a year is equal to the actual milk marketings
of the participating dairy operation during the preceding calendar year.
(3)
New dairy
operations
Subsection (a)(3)
shall apply with respect to determining the annual production history of a
participating dairy operation that has been in operation for less than a
year.
(c)
Required
information
A participating
dairy operation shall provide all information that the Secretary may require in
order to establish—
(1) the basic production history of the
participating dairy operation under subsection (a); and
(2) the production history of the participating
dairy operation whenever the participating dairy operation purchases
supplemental production margin protection under section 1415.
(d)
Transfer of
production histories
(1)
Transfer by sale
or lease
In promulgating the
rules to initiate the production margin protection program, the Secretary shall
specify the conditions under which and the manner by which the production
history of a participating dairy operation may be transferred by sale or
lease.
(2)
Coverage
level
(A)
Basic production
margin protection
A purchaser
or lessee to whom the Secretary transfers a basic production history under this
subsection shall not obtain a different level of basic production margin
protection than the basic production margin protection coverage held by the
seller or lessor from whom the transfer was obtained.
(B)
Supplemental
production margin protection
A purchaser or lessee to whom the Secretary
transfers an annual production history under this subsection shall not obtain a
different level of supplemental production margin protection coverage than the
supplemental production margin protection coverage in effect for the seller or
lessor from whom the transfer was obtained for the calendar year in which the
transfer was made.
(e)
Movement and
transfer of production history
(1)
Movement and
transfer authorized
Subject
to paragraph (2), if a participating dairy operation moves from one location to
another location, the participating dairy operation may transfer the basic
production history and annual production history associated with the
participating dairy operation.
(2)
Notification
requirement
A participating dairy operation shall notify the
Secretary of any move of a participating dairy operation under paragraph
(1).
(3)
Subsequent
occupation of vacated location
A party subsequently occupying a
participating dairy operation location vacated as described in paragraph (1)
shall have no interest in the basic production history or annual production
history previously associated with the participating dairy operation at such
location.
1414.
Basic
production margin protection
(a)
Payment
threshold
The Secretary shall
make a payment to participating dairy operations in accordance with subsection
(b) whenever the average actual dairy production margin for a consecutive
2-month period is less than $4.00 per hundredweight of milk.
(b)
Basic production
margin protection payment
The
basic production margin protection payment for a participating dairy operation
for a consecutive 2-month period shall be equal to the product obtained by
multiplying—
(1) the difference between the average actual
dairy production margin for the consecutive 2-month period and $4.00, except
that, if the difference is more than $4.00, the Secretary shall use $4.00;
by
(2) the lesser of—
(A) 80 percent of the
production history of the participating dairy operation, divided by 6;
or
(B) the actual quantity of milk marketed by the
participating dairy operation during the consecutive 2-month period.
1415.
Supplemental
production margin protection
(a)
Election of
supplemental production margin protection
A participating dairy operation may
annually purchase supplemental production margin protection to protect, during
the calendar year for which purchased, a higher level of the income of a
participating dairy operation than the income level guaranteed by basic
production margin protection under section 1414.
(b)
Selection of
payment threshold
A
participating dairy operation purchasing supplemental production margin
protection for a year shall elect a coverage level that is higher, in any
increment of $0.50, than the payment threshold for basic production margin
protection specified in section 1414(a), but not to exceed $8.00.
(c)
Coverage
percentage
A participating
dairy operation purchasing supplemental production margin protection for a year
shall elect a percentage of coverage equal to not more than 90 percent, nor
less than 25 percent, of the annual production history of the participating
dairy operation.
(d)
Premiums for
supplemental production margin protection
(1)
Premiums
required
A participating
dairy operation that purchases supplemental production margin protection shall
pay an annual premium equal to the product obtained by multiplying—
(A) the coverage
percentage elected by the participating dairy operation under subsection
(c);
(B) the annual
production history of the participating dairy operation; and
(C) the premium per
hundredweight of milk, as specified in the applicable table under paragraph (2)
or (3).
(2)
Premium per
hundredweight for first 4 million pounds of production
For the
first 4,000,000 pounds of milk marketings included in the annual production
history of a participating dairy operation, the premium per hundredweight
corresponding to each coverage level specified in the following table is as
follows:
Coverage LevelPremium per Cwt.
$6.50$0.00
$7.00$0.40
$7.50$0.60
$8.00$0.95.
(3)
Premium per
hundredweight for production in excess of 4 million pounds
For milk marketings in excess of 4,000,000
pounds included in the annual production history of a participating dairy
operation, the premium per hundredweight corresponding to each coverage level
is as follows:
Coverage LevelPremium per Cwt.
$4.50$0.02
$5.00$0.04
$5.50$0.10
$6.00$0.15
$6.50$0.29
$7.00$0.62
$7.50$0.83
$8.00$1.06.
(4)
Time for
payment
In promulgating the
rules to initiate the production margin protection program, the Secretary shall
provide more than 1 method by which a participating dairy operation that
purchases supplemental production margin protection for a calendar year may pay
the premium under this subsection for that year in any manner that maximizes
participating dairy operation payment flexibility and program integrity.
(e)
Premium
obligations
(1)
Pro-ration of
premium for new dairy operations
A participating dairy operation described
in section 1412(c)(2) that purchases supplemental production margin protection
for a calendar year after the start of the calendar year shall pay a pro-rated
premium for that calendar year based on the portion of the calendar year for
which the participating dairy operation purchases the coverage.
(2)
Legal
obligation
A participating dairy operation that purchases
supplemental production margin protection for a calendar year shall be legally
obligated to pay the applicable premium for that calendar year, except that the
Secretary may waive that obligation, under terms and conditions determined by
the Secretary, for 1 or more producers in any participating dairy operation in
the case of death, retirement, permanent dissolution of a participating dairy
operation, or other circumstances as the Secretary considers appropriate to
ensure the integrity of the program.
(f)
Supplemental
payment threshold
A
participating dairy operation with supplemental production margin protection
shall receive a supplemental production margin protection payment whenever the
average actual dairy production margin for a consecutive 2-month period is less
than the coverage level threshold selected by the participating dairy operation
under subsection (b).
(g)
Supplemental
production margin protection payments
(1)
In
general
The supplemental
production margin protection payment for a participating dairy operation is in
addition to the basic production margin protection payment.
(2)
Amount of
payment
The supplemental
production margin protection payment for the participating dairy operation
shall be determined as follows:
(A) The Secretary shall calculate the
difference between the coverage level threshold selected by the participating
dairy operation under subsection (b) and the greater of—
(i) the
average actual dairy production margin for the consecutive 2-month period;
or
(ii) $4.00.
(B) The amount determined under subparagraph
(A) shall be multiplied by the percentage selected by the participating dairy
operation under subsection (c) and by the lesser of the following:
(i) The annual production history of the
participating dairy operation, divided by 6.
(ii) The actual amount of milk marketed by the
participating dairy operation during the consecutive 2-month period.
1416.
Effect of
failure to pay administration fees or premiums
(a)
Loss of
benefits
A participating
dairy operation that fails to pay the required administration fee under section
1412 or is in arrears on premium payments for supplemental production margin
protection under section 1415—
(1) remains legally obligated to pay the
administration fee or premiums, as the case may be; and
(2) may not receive basic production margin
protection payments or supplemental production margin protection payments until
the fees or premiums are fully paid.
(b)
Enforcement
The Secretary may take such action as
necessary to collect administration fees and premium payments for supplemental
production margin protection.
B
Dairy market
stabilization program
1431.
Establishment
of dairy market stabilization program
(a)
Program
required; purpose
Effective
not later than 120 days after the effective date of this subtitle, the
Secretary shall establish and administer a dairy market stabilization program
applicable to participating dairy operations for the purpose of assisting in
balancing the supply of milk with demand when participating dairy operations
are experiencing low or negative operating margins.
(b)
Election of
stabilization program base calculation method
(1)
Election
When a dairy operation signs up under
section 1412 to participate in the production margin protection program, the
dairy operation shall inform the Secretary of the method by which the
stabilization program base for the participating dairy operation will be
calculated under paragraph (3).
(2)
Change in
calculation method
A participating dairy operation may change the
stabilization program base calculation method to be used for a calendar year by
notifying the Secretary of the change not later than a date determined by the
Secretary.
(3)
Calculation
methods
A participating dairy operation may elect either of the
following methods for calculation of the stabilization program base for the
participating dairy operation:
(A) The volume of the
average monthly milk marketings of the participating dairy operation for the 3
months immediately preceding the announcement by the Secretary that the
stabilization program will become effective.
(B) The volume of the monthly milk marketings
of the participating dairy operation for the same month in the preceding year
as the month for which the Secretary has announced the stabilization program
will become effective.
(4)
Exemption
The stabilization program base for a
participating dairy producer shall not include the first 4,000,000 pounds of
production of the participating dairy producer per calendar year, as determined
by the Secretary.
1432.
Threshold for
implementation and reduction in dairy payments
(a)
When
stabilization program required
Except as provided in subsection (b), the
Secretary shall announce that the stabilization program is in effect and order
reduced payments by handlers to participating dairy operations that exceed the
applicable percentage of the participating dairy operation’s stabilization
program base whenever—
(1) the actual dairy production margin has been
$6.00 or less per hundredweight of milk for each of the immediately preceding 2
months; or
(2) the actual dairy production margin has been
$4.00 or less per hundredweight of milk for the immediately preceding
month.
(b)
Exception
If any of the conditions described in
section 1436(b) have been met during the 2-month period immediately preceding
the month in which the announcement under subsection (a) would otherwise be
made by the Secretary in the absence of this exception, the Secretary
shall—
(1) suspend the stabilization program;
(2) refrain from making the announcement under
subsection (a) to implement order the stabilization payment; or
(3) order reduced payments.
(c)
Effective date
for implementation of payment reductions
Reductions in dairy
payments shall commence beginning on the first day of the month immediately
following the date of the announcement by the Secretary under subsection
(a).
1433.
Milk
marketings information
(a)
Collection of
milk marketing data
The
Secretary shall establish, by regulation, a process to collect from
participating dairy operations and handlers such information that the Secretary
considers necessary for each month during which the stabilization program is in
effect.
(b)
Reduce
regulatory burden
When implementing the process under subsection
(a), the Secretary shall minimize the regulatory burden on participating dairy
operations and handlers.
1434.
Calculation
and collection of reduced dairy operation payments
(a)
Reduced
participating dairy operation payments required
During any month in which payment
reductions are in effect under the stabilization program, each handler shall
reduce payments to each participating dairy operation from whom the handler
receives milk.
(b)
Reductions based
on actual dairy production margin
(1)
Reduction
requirement 1
If the
Secretary determines that the average actual dairy production margin has been
less than $6.00 but greater than $5.00 per hundredweight of milk for 2
consecutive months, the handler shall make payments to a participating dairy
operation for a month based on the greater of the following:
(A) 98 percent of the
stabilization program base of the participating dairy operation.
(B) 94 percent of the
marketings of milk for the month by the participating dairy operation.
(2)
Reduction
requirement 2
If the
Secretary determines that the average actual dairy production margin has been
less than $5.00 but greater than $4.00 for 2 consecutive months, the handler
shall make payments to a participating dairy operation for a month based on the
greater of the following:
(A) 97 percent of the stabilization program
base of the participating dairy operation.
(B) 93 percent of the marketings of milk for
the month by the participating dairy operation.
(3)
Reduction
requirement 3
If the
Secretary determines that the average actual dairy production margin has been
$4.00 or less for any 1 month, the handler shall make payments to a
participating dairy operation for a month based on the greater of the
following:
(A) 96 percent of the stabilization program
base of the participating dairy operation.
(B) 92 percent of the marketings of milk for
the month by the participating dairy operation.
(c)
Continuation of
reductions
The largest level of payment reduction required under
paragraph (1), (2), or (3) of subsection (b) shall be continued for each month
until the Secretary suspends the stabilization program and terminates payment
reductions in accordance with section 1436.
(d)
Payment
reduction exception
Notwithstanding any preceding subsection of
this section, a handler shall make no payment reductions for a participating
dairy operation for a month if the participating dairy operation’s milk
marketings for the month are equal to or less than the percentage of the
stabilization program base applicable to the participating dairy operation
under paragraph (1), (2), or (3) of subsection (b).
1435.
Remitting
funds to the Secretary and use of funds
(a)
Remitting
funds
As soon as practicable
after the end of each month during which payment reductions are in effect under
the stabilization program, each handler shall remit to the Secretary an amount
equal to the amount by which payments to participating dairy operations are
reduced by the handler under section 1434.
(b)
Deposit of
remitted funds
All funds
received under subsection (a) shall be available to the Secretary, without
further appropriation and until expended, for use or transfer as provided in
subsection (c).
(c)
Use of
funds
(1)
Availability for
certain commodity donations
Not later than 90 days after the funds
described in subsection (a) are due as determined by the Secretary, the
Secretary shall obligate the funds for the purpose of—
(A) purchasing dairy products for donation to
food banks and other programs that the Secretary determines appropriate;
and
(B) expanding
consumption and building demand for dairy products.
(2)
No duplication
of effort
The Secretary shall
ensure that expenditures 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.).
(3)
Accounting
The
Secretary shall keep an accurate account of all funds expended under paragraph
(1).
(d)
Annual
Report
Not later than December 31 of each year that the
stabilization program is in effect, the Secretary shall submit to the Committee
on Agriculture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate a report that provides an
accurate accounting of—
(1) the funds received
by the Secretary during the preceding fiscal year under subsection (a);
(2) all expenditures
made by the Secretary under subsection (b) during the preceding fiscal year;
and
(3) the impact of the
stabilization program on dairy markets.
(e)
Enforcement
If a participating dairy operation or
handler fails to remit or collect the amounts by which payments to
participating dairy operations are reduced under section 1434, the
participating dairy operation or handler responsible for the failure shall be
liable to the Secretary for the amount that should have been remitted or
collected, plus interest. In addition to the enforcement authorities available
under section 1437, the Secretary may enforce this subsection in the courts of
the United States.
1436.
Suspension of
reduced payment requirement
(a)
Determination of
prices
For purposes of this
section:
(1) The price in the United States for cheddar
cheese and nonfat dry milk shall be determined by the Secretary.
(2) The world price of
cheddar cheese and skim milk powder shall be determined by the
Secretary.
(b)
Suspension
thresholds
The stabilization
program shall be suspended or the Secretary shall refrain from making the
announcement under section 1432(a) if the Secretary determines that—
(1) the actual dairy production margin is
greater than $6.00 per hundredweight of milk for 2 consecutive months;
(2) the actual dairy production margin is equal
to or less than $6.00 (but greater than $5.00) for 2 consecutive months, and
during the same 2 consecutive months—
(A) the price in the
United States for cheddar cheese is equal to or greater than the world price of
cheddar cheese; or
(B) the price in the
United States for nonfat dry milk is equal to or greater than the world price
of skim milk powder;
(3) the actual dairy
production margin is equal to or less than $5.00 (but greater than $4.00) for 2
consecutive months, and during the same 2 consecutive months—
(A) the price in the
United States for cheddar cheese is more than 5 percent above the world price
of cheddar cheese; or
(B) the price in the
United States for nonfat dry milk is more than 5 percent above the world price
of skim milk powder; or
(4) the actual dairy
production margin is equal to or less than $4.00 for 2 consecutive months, and
during the same 2 consecutive months—
(A) the price in the
United States for cheddar cheese is more than 7 percent above the world price
of cheddar cheese; or
(B) the price in the
United States for nonfat dry milk is more than 7 percent above the world price
of skim milk powder.
(c)
Implementation
by handlers
Effective on the
day after the date of the announcement by the Secretary under subsection (b) of
the suspension of the stabilization program, the handler shall cease reducing
payments to participating dairy operations under the stabilization
program.
(d)
Condition on
resumption of stabilization program
Upon the announcement by the Secretary
under subsection (b) that the stabilization program has been suspended, the
stabilization program may not be implemented again until, at the
earliest—
(1) 2
months have passed, beginning on the first day of the month immediately
following the announcement by the Secretary; and
(2) the conditions of
section 1432(a) are again met.
1437.
Enforcement
(a)
Unlawful
act
It shall be unlawful and
a violation of the this subpart for any person subject to the stabilization
program to willfully fail or refuse to provide, or delay the timely reporting
of, accurate information and remittance of funds to the Secretary in accordance
with this subpart.
(b)
Order
After
providing notice and opportunity for a hearing to an affected person, the
Secretary may issue an order against any person to cease and desist from
continuing any violation of this subpart.
(c)
Appeal
An
order of the Secretary under subsection (b) shall be final and conclusive
unless an affected person files an appeal of the order of the Secretary in
United States district court not later than 30 days after the date of the
issuance of the order. A finding of the Secretary in the order shall be set
aside only if the finding is not supported by substantial evidence.
(d)
Noncompliance
with order
If a person subject to this subpart fails to obey an
order issued under subsection (b) after the order has become final and
unappealable, or after the appropriate United States district court has entered
a final judgment in favor of the Secretary, the United States may apply to the
appropriate United States district court for enforcement of the order. If the
court determines that the order was lawfully made and duly served and that the
person violated the order, the court shall enforce the order.
1438.
Audit
requirements
(a)
Audits of dairy
operation and handler compliance
(1)
Audits
authorized
If determined by
the Secretary to be necessary to ensure compliance by participating dairy
operations and handlers with the stabilization program, the Secretary may
conduct periodic audits of participating dairy operations and handlers.
(2)
Sample of dairy
operations
Any audit conducted under this subsection shall
include, at a minimum, investigation of a statistically valid and random sample
of participating dairy operations.
(b)
Submission of
results
The Secretary shall
submit the results of any audit conducted under subsection (a) to the Committee
on Agriculture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate and include such
recommendations as the Secretary considers appropriate regarding the
stabilization program.
1439.
Study;
report
(a)
In
general
The Secretary shall direct the Office of the Chief
Economist to conduct a study of the impacts of the program established under
section 1431(a).
(b)
Considerations
The
study conducted under subsection (a) shall consider—
(1) the economic
impact of the program throughout the dairy product value chain, including the
impact on producers, processors, domestic customers, export customers, actual
market growth and potential market growth, farms of different sizes, and
different regions and States; and
(2) the impact of the
program on the competitiveness of the United States dairy industry in
international markets.
(c)
Report
Not
later than December 1, 2016, the Office of the Chief Economist shall submit to
the Committee on Agriculture of the House of Representatives and the Committee
on Agriculture, Nutrition, and Forestry of the Senate a report that describes
the results of the study conducted under subsection (a).
C
Administration
1451.
Duration
The production margin protection program and
the stabilization program shall end on December 31, 2017.
1452.
Administration
and enforcement
(a)
In
general
The Secretary shall promulgate regulations to address
administrative and enforcement issues involved in carrying out the production
margin protection, supplemental production margin protection, and market
stabilization programs.
(b)
Reconstitution
and eligibility issues
(1)
Reconstitution
Using
authorities under section 1001(f) and 1001B of the Food Security Act of 1985 (7
U.S.C. 1308(f), 1308–2), the Secretary shall promulgate regulations to prohibit
a dairy producer from reconstituting a dairy operation for the sole purpose of
the dairy producer—
(A) receiving basic
margin protection;
(B) purchasing
supplemental margin protection; or
(C) avoiding
participation in the market stabilization program.
(2)
Eligibility
issues
Using authorities under section 1001(f) and 1001B of the
Food Security Act of 1985 (7 U.S.C. 1308(f), 1308–2), the Secretary shall
promulgate regulations—
(A) to prohibit a
scheme or device;
(B) to provide for
equitable relief; and
(C) to provide for
other issues affecting eligibility and liability issues.
(3)
Administrative
appeals
Using authorities under section 1001(h) of the Food
Security Act of 1985 (7 U.S.C. 1308(h)) and subtitle H of the Department of
Agriculture Reorganization Act (7 U.S.C. 6991 et seq.), the Secretary shall
promulgate regulations to provide for administrative appeals of decisions of
the Secretary that are adverse to participants of the programs described in
subsection (a).
II
Dairy
market transparency
1461.
Dairy product
mandatory reporting
(a)
Definitions
Section
272(1)(A) of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637a(1)(A)) is
amended by inserting , or any other products that may significantly aid
price discovery in the dairy markets, as determined by the Secretary
after of 1937.
(b)
Mandatory
reporting for dairy products
Section 273(b) of the Agricultural
Marketing Act of 1946 (7 U.S.C. 1637b(b)) is amended—
(1) by striking
paragraph (1) and inserting the following new paragraph:
(1)
In
general
In establishing the program, the Secretary shall
only—
(A)
(i) subject to the conditions described in
paragraph (2), require each manufacturer to report to the Secretary, more
frequently than once per month, information concerning the price, quantity, and
moisture content of dairy products sold by the manufacturer and any other
product characteristics that may significantly aid price discovery in the dairy
markets, as determined by the Secretary; and
(ii) modify the format used to provide
the information on the day before the date of enactment of this subtitle to
ensure that the information can be readily understood by market participants;
and
(B) require each
manufacturer and other person storing dairy products (including dairy products
in cold storage) to report to the Secretary, more frequently than once per
month, information on the quantity of dairy products
stored.
;
and
(2) in paragraph (2), by inserting or
those that may significantly aid price discovery in the dairy markets
after Federal milk marketing order each place it appears in
subparagraphs (A), (B), and (C).
1462.
Federal milk
marketing order information
(a)
Information
clearinghouse
(1)
In
general
The Secretary shall, on behalf of each milk marketing
order issued under the Agricultural Adjustment Act (7 U.S.C. 601 et seq.),
reenacted with amendments by the Agricultural Marketing Agreement Act of 1937,
establish an information clearinghouse for the purposes of educating the public
about the Federal milk marketing order system and any marketing order
referenda, including proposal information and timelines that shall be kept
current and updated as information becomes available.
(2)
Requirements
Information
under paragraph (1) shall include—
(A) information on
procedures by which cooperatives vote;
(B) if applicable,
information on the manner by which producers may cast an individual
ballot;
(C) in applicable,
instructions on the manner in which to vote online;
(D) due dates for
each specific referendum;
(E) the text of each
referendum question under consideration;
(F) a description in
plain language of the question;
(G) any relevant
background information to the question; and
(H) any other
information that increases Federal milk marketing order transparency.
(b)
Notification
list for upcoming referendum
Each Federal milk marketing order
shall—
(1) make available
the information described in subsection (b) through an Internet site;
and
(2) publicize the
information in major agriculture and dairy-specific publications on upcoming
referenda.
(c)
Study
(1)
In
general
The Secretary shall conduct a study of the feasibility of
establishing 2 classes of milk, a fluid class and a manufacturing class, to
replace the 4-class system in effect on the date of enactment of this Act in
administering Federal milk marketing orders.
(2)
Federal Milk
Market Order Review Commission
The Secretary may elect to use the
Federal Milk Market Order Review Commission established under section 1509(a)
of the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122
Stat. 1726), or documents of the Commission, to conduct all or part of the
study.
(3)
Report
Not
later than 180 days after the date of enactment of this Act, the Secretary
shall submit to the Committee on Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition, and Forestry of the Senate a
report that describes the results of the study required under this subsection,
including any recommendations.
III
Repeal or
reauthorization of other dairy-related provisions
1471.
Repeal of
dairy product price support and milk income loss contract programs
(a)
Repeal of dairy
product price support program
Section 1501 of the Food,
Conservation, and Energy Act of 2008 (7 U.S.C. 8771) is repealed.
(b)
Repeal of milk
income loss contract program
(1)
Payments under
milk income loss contract program
Section 1506(c) of the Food,
Conservation, and Energy Act of 2008 (7 U.S.C. 8773(c)) is amended—
(A) in paragraph
(2)(A), by striking $16.94 and inserting $18.85;
and
(B) in paragraph
(3)—
(i) in
subparagraph (A), by inserting and after the semicolon;
(ii) in
subparagraph (B), by striking August 31, 2013, 45 percent; and
and inserting on the date that is 270 days after the date of enactment
of the Dairy Income Fairness Act of
2013, 45 percent.; and
(iii) by striking
subparagraph (C).
(2)
Extension
Section
1506(h)(1) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C.
8773(h)(1)) is amended by striking September 30, 2013 and
inserting the date that is 270 days after the date of enactment of the
Dairy Income Fairness Act of
2013.
(3)
Repeal
Effective
on the date that is 271 days after the date of enactment of the
Dairy Income Fairness Act of
2013, section 1506 of the Food, Conservation, and Energy Act of
2008 (7 U.S.C. 8773) is repealed.
1472.
Repeal of dairy
export incentive program
(a)
Repeal
Section 153 of the Food Security Act of
1985 (15 U.S.C. 713a–14) is repealed.
(b)
Conforming
amendments
Section 902(2) of the Trade Sanctions Reform and
Export Enhancement Act of 2000 (22 U.S.C. 7201(2)) is amended—
(1) by striking
subparagraph (D); and
(2) by redesignating
subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively.
1473.
Extension of
dairy forward pricing program
Section 1502(e) of the Food, Conservation,
and Energy Act of 2008 (7 U.S.C. 8772(e)) is amended—
(1) in paragraph (1),
by striking 2012 and inserting 2017; and
(2) in paragraph (2),
by striking 2015 and inserting 2020.
1474.
Extension of
dairy indemnity program
Section 3 of Public Law 90–484 (7 U.S.C.
450l) is amended by striking 2012 and inserting
2017.
1475.
Extension of
dairy promotion and research program
Section 113(e)(2) of the Dairy Production
Stabilization Act of 1983 (7 U.S.C. 4504(e)(2)) is amended by striking
2012 and inserting 2017.
1476.
Extension of
Federal Milk Marketing Order Review Commission
Section 1509(a) of the Food, Conservation,
and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1726) is amended by
inserting or other funds after Subject to the
availability of appropriations.
IV
Federal milk
marketing order reform
1481.
Federal milk
marketing order program pre-hearing procedure for Class III pricing
(a)
In
general
The Secretary shall use the pre-hearing procedure
described in this section to determine to conduct a hearing to consider
alternative formulas for Class III milk product pricing under section 8c of the
Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the
Agricultural Marketing Agreement Act of 1937.
(b)
Requests for
proposals
(1)
In
general
Not later than 60 days after the date of enactment of
this Act, the Secretary shall issue a request for the submission by interested
persons of preliminary proposals for replacement of the Class III milk product
pricing formula.
(2)
Preliminary
proposals
Preliminary proposals submitted under paragraph
(1)—
(A) may include
competitive pay price formulas; and
(B) shall provide
sufficient detail in concept to serve as the basis for the convening by the
Secretary of a public information session for review and discussion in
accordance with section 900.24 of title 7, Code of Federal Regulations (as in
effect on the date of enactment of this Act), but need not conform with the
other procedural requirements of part 900 of title 7, Code of Federal
Regulations (as in effect on the date of enactment of this Act).
(c)
Pre-Hearing
information session review
(1)
In
general
Not later than 180 days after the date of enactment of
this Act, the Secretary shall convene a public information session under
section 900.24 of title 7, Code of Federal Regulations (as in effect on the
date of enactment of this Act).
(2)
Requirements
The
Secretary shall review all preliminary proposals submitted under this section
that are of sufficient conceptual detail to allow for the review described in
paragraph (1).
(d)
Hearing
determination
(1)
In
general
Not later than 90 days after the conduct of the public
information session under subsection (c), the Secretary shall determine whether
to conduct a formal hearing in accordance with part 900 of title 7, Code of
Federal Regulations (as in effect on the date of enactment of this Act).
(2)
Hearing to be
conducted
If the Secretary determines under paragraph (1) to
conduct a formal hearing, the Secretary shall issue notice and conduct the
hearing in accordance with part 900 of title 7, Code of Federal Regulations (as
in effect on the date of enactment of this Act).
(3)
Hearing not to
be conducted
If the Secretary determines under paragraph (1) not
to conduct a formal hearing, not later than 90 days after that determination,
the Secretary shall submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition and Forestry of the
Senate a written report that explains the basis for the decision.
(e)
Proceeding with
a hearing at any time
Consistent with the purposes of this
section, the Secretary may dispense with the pre-hearing requirements of this
section and initiate at any time a formal hearing under part 900 of title 7,
Code of Federal Regulations (as in effect on the date of enactment of this
Act).
1482.
Federal milk
marketing orders
Not later
than 180 days after the date of enactment of this Act, the Secretary shall
conduct hearings—
(1) to analyze the
implications of transitioning from a 4-class system for milk products to a
2-class system;
(2) to explore
methods to improve signals for price discovery in the short- and long-term to
allow dairy producers to better use risk management tools; and
(3) to 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.
V
Effective
date
1491.
Effective
date
Except as otherwise
provided in this subtitle, this subtitle and the amendments made by this
subtitle take effect on October 1, 2012.