Sec. 1401. DAIRY MARGIN COVERAGE

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## SEC. 1401 DAIRY MARGIN COVERAGE ###

(a)Review of Data Used in Calculation of Average Feed Cost Not later than 60 days after the date of the 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 evaluating the extent to which the average cost of feed used by a dairy operation to produce a hundredweight of milk calculated by the Secretary as required by section 1402(a) of the Agricultural Act of 2014 (7 U.S.C. 9052(a)) is representative of actual dairy feed costs. ###

(b)Corn Silage Report Not later than 1 year after the date of the 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 detailing the costs incurred by dairy operations in the use of corn silage as feed, and the difference between the feed cost of corn silage and the feed cost of corn. ###

(c)Collection of Alfalfa Hay Data **[**[7 U.S.C. 9052 note](/us/usc/t7/s9052)**]** Not later than 120 days after the date of the enactment of this Act, the Secretary, acting through the National Agricultural Statistics Service, shall revise monthly price survey reports to include prices for high-quality alfalfa hay in the top five milk producing States, as measured by volume of milk produced during the previous month. ###

(d)Registration of Multiproducer Dairy Operations Section 1404(b) of the Agricultural Act of 2014 (7 U.S.C. 9054(b)) is amended— ####

(1)by redesignating paragraph

(4)as paragraph (5); and ####

(2)by striking paragraph

(3)and inserting the following: > > #### “(3) Election period for 2019 calendar year > > For the 2019 calendar year, the Secretary shall— > > > ##### “(A) > > open the election period not later than 60 days after the effective date described in section 1401(m) of the Agriculture Improvement Act of 2018; and > > > ##### “(B) > > hold that election period open for not less than 90 days. > > > #### “(4) Treatment of multiproducer dairy operation > > > ##### “(A) In general > > If a participating dairy operation is operated by more than 1 dairy producer, the dairy producers of the dairy operation who elect to participate shall be treated as a single dairy operation for purposes of participating in dairy margin coverage. > > > ##### “(B) Rule of construction > > Subparagraph

(A)shall not be construed to allow a producer to adjust the proportion of their share covered under tier I or tier II premiums from the proportion covered for the operation.” > . ###

(e)Relation to Livestock Gross Margin for Dairy Program ####

(1)In general Section 1404 of the Agricultural Act of 2014 (7 U.S.C. 9054) is amended by striking subsection (d). ####

(2)Retroactive program option Section 1404(b)(2) of the Agricultural Act of 2014 (7 U.S.C. 9054(b)(2)) is amended— #####

(A)by striking “ The Secretary ” and inserting the following: > > ##### “(A) In general > > The Secretary” > ; and #####

(B)by adding at the end the following: > > ##### “(B) Retroactive program option > > In the case of a dairy operation that, by operation of subsection

(d)(as in effect on the day before the date of enactment of the Agriculture Improvement Act of 2018), was ineligible to participate in the margin protection program for any part of calendar year 2018, the Secretary shall establish a new election period for that calendar year that ends on a date that is not less than 90 days after the date of enactment of the Agriculture Improvement Act of 2018 and the Secretary determines is necessary for dairy operations to make new elections to participate in the margin protection program (as in effect on the day before the date of enactment of the Agriculture Improvement Act of 2018) for that calendar year, including dairy operations that elected to participate in the livestock gross margin for dairy program under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) before the date of enactment of the Bipartisan Budget Act of 2018 (Public Law 115-123).” > . ###

(f)Production History of Participating Dairy Operators ####

(1)Adjustment Section 1405 of the Agricultural Act of 2014 (7 U.S.C. 9055) is amended— #####

(A)in subsection (a)— ######

(i)in paragraph (2), by striking “In subsequent years” and inserting “In the subsequent calendar years ending before January 1, 2019”; and ######

(ii)in paragraph (3), by inserting “, as applicable” after “paragraph (2)”; and #####

(B)in subsection (b)— ######

(i)by redesignating paragraphs

(1)and

(2)as subparagraphs

(A)and (B), respectively, and indenting appropriately; ######

(ii)in the matter preceding subparagraph

(A)(as so redesignated), by striking “ In the case ” and inserting the following: > > #### “(1) Dairy operations with less than 1 year of production history > > In the case” > ; and ######

(iii)by adding at the end the following: > > #### “(2) Dairy operations with 1 year or more of production history > > In the case of a participating dairy operation that was not in operation prior to January 1, 2014, that has not established a production history, and that has been in operation for equal to or longer than 1 year, the participating dairy operation shall elect the annual milk marketings during any 1 calendar year to determine the production history of the participating dairy operation. > > > #### “(3) Adjustment > > The Secretary shall adjust the production history of a participating dairy operation determined under paragraph

(1)or

(2)to reflect any increase or decrease in the national average milk production relative to calendar year 2017.” > . ####

(2)Limitation on changes to business structure Section 1405 of the Agricultural Act of 2014 (7 U.S.C. 9055) is amended by adding at the end the following new subsection: > > ### “(d) Limitation on Changes to Business Structure > > The Secretary may not make dairy margin coverage payments to a participating dairy operation if the Secretary determines that the participating dairy operation has reorganized the structure of such operation solely for the purpose of qualifying as a new operation under subsection (b).” > . ###

(g)Coverage Level Threshold and Coverage Percentage Section 1406 of the Agricultural Act of 2014 (7 U.S.C. 9056) is amended by striking subsection

(a)and inserting the following: > > ### “(a) Coverage Level Threshold and Coverage Percentage > > > #### “(1) Coverage level threshold > > > ##### “(A) In general > > For purposes of receiving dairy margin coverage payments for a month, a participating dairy operation shall annually elect a coverage level threshold that is equal to $4.00, $4.50, $5.00, $5.50, $6.00, $6.50, $7.00, $7.50, $8.00, $8.50, $9.00, or $9.50. > > > ##### “(B) Applicability > > Except as provided in subparagraph (C), the coverage level threshold elected under subparagraph

(A)shall apply to the covered production elected by the participating dairy operation under paragraph (2). > > > ##### “(C) Second coverage election for tier ii > > In the case of a participating dairy operation that elects a coverage level threshold of $8.50, $9.00, or $9.50 under subparagraph (A)— > > > ###### “(i) > > that coverage level threshold shall apply to the first 5,000,000 pounds of milk marketings included in the covered production elected by the participating dairy operation; and > > > ###### “(ii) > > the participating dairy operation shall elect a coverage level threshold that is equal to $4.00, $4.50, $5.00, $5.50, $6.00, $6.50, $7.00, $7.50, or $8.00 to apply to milk marketings in excess of 5,000,000 pounds included in the covered production elected by the participating dairy operation. > > > #### “(2) Coverage percentage > > For purposes of receiving dairy margin coverage payments for a month, a participating dairy operation shall annually elect a percentage of coverage, in 5-percent increments, not exceeding 95 percent of the production history of the participating dairy operation.” > . ###

(h)Producer Premiums Section 1407 of the Agricultural Act of 2014 (7 U.S.C. 9057) is amended— ####

(1)in subsection (b), by striking paragraphs

(2)and

(3)and inserting the following: > > #### “(2) Producer premiums > > Except as provided in subsection (g), the following annual premiums apply:Coverage LevelPremium per Cwt.$4.00None$4.50$0.0025$5.00$0.005$5.50$0.030$6.00$0.050$6.50$0.070$7.00$0.080$7.50$0.090$8.00$0.100$8.50$0.105$9.00$0.110$9.50$0.150 > ; and ####

(2)in subsection (c), by striking paragraph

(2)and inserting the following: > > #### “(2) Producer premiums > > Except as provided in subsection (g), the following annual premiums apply:Coverage LevelPremium per Cwt.$4.00None$4.50$0.0025$5.00$0.005$5.50$0.100$6.00$0.310$6.50$0.650$7.00$1.107$7.50$1.413$8.00$1.813 > . ###

(i)Repayment of Premiums Section 1407 of the Agricultural Act of 2014 (7 U.S.C. 9057) is amended by adding at the end the following: > > ### “(f) Repayment of Premiums > > > #### “(1) In general > > Each dairy operation described in paragraph

(2)shall be eligible to receive a repayment from the Secretary in an amount equal to the difference between— > > > ##### “(A) > > the total amount of premiums paid by the participating dairy operation under this section for each applicable calendar year; and > > > ##### “(B) > > the total amount of payments made to the participating dairy operation under section 1406 for that calendar year. > > > #### “(2) Eligibility > > A dairy operation that is eligible to receive a repayment under paragraph

(1)is a dairy operation that— > > > ##### “(A) > > participated in the margin protection program, as in effect for any of calendar years 2014 through 2017; and > > > ##### “(B) > > submits to the Secretary an application for the repayment at such time, in such manner, and containing such information as the Secretary may require. > > > #### “(3) Method of repayment > > A dairy operation that is eligible to receive a repayment under paragraph

(1)shall elect to receive the repayment— > > > ##### “(A) > > in an amount equal to 75 percent of the repayment calculated under that paragraph as credit that may be used by the dairy operation for dairy margin coverage premiums; or > > > ##### “(B) > > in an amount equal to 50 percent of the repayment calculated under that paragraph as a direct cash repayment. > > > #### “(4) Applicability > > Paragraph

(1)shall only apply to a calendar year during the period of calendar years 2014 through 2017 for which the amount described in subparagraph

(A)of that paragraph is greater than the amount described in subparagraph

(B)of that paragraph.” > . ###

(j)Premium Discount Section 1407 of the Agricultural Act of 2014 (7 U.S.C. 9057) (as amended by subsection (i)) is amended by adding at the end the following: > > ### “(g) Premium Discount > > The premium per hundredweight specified in the tables contained in subsections

(b)and

(c)for each coverage level shall be reduced by 25 percent in accordance with the following: > > > #### “(1) In general > > For each of calendar years 2019 through 2023, for a participating dairy operation that makes a 1-time election of coverage level in a tier and of a percentage of coverage under section 1406(a) for the 5-year period beginning in January 2019. > > > #### “(2) New dairy operations > > For each applicable calendar year through 2023, for a participating dairy operation that— > > > ##### “(A) > > establishes a production history pursuant to section 1405(b); and > > > ##### “(B) > > makes a 1-time election of coverage level in a tier and of a percentage of coverage under section 1406(a) for the period beginning with the first available calendar year and ending in December 2023. > > > #### “(3) Full participation required > > Notwithstanding the annual elections under section 1406(a)— > > > ##### “(A) > > a 1-time enrollment under this subsection shall remain in effect for the full duration applicable to a participating dairy operation in accordance with paragraph

(1)or (2)(B), as applicable; and > > > ##### “(B) > > a participating dairy operation that makes a 1-time enrollment under this subsection and is noncompliant under section 1408 shall be subject to that section.” > . ###

(k)Conforming Amendments Related to Program Name ####

(1)Heading The heading of part I of subtitle D of title I of the Agricultural Act of 2014 (Public Law 113-79; 128 Stat. 688) is amended to read as follows: > > ### “PART I DAIRY MARGIN COVERAGE” > . ####

(2)Definitions Section 1401 of the Agricultural Act of 2014 (7 U.S.C. 9051) is amended— #####

(A)by striking paragraphs

(5)and

(6)and inserting the following new paragraphs: > > #### “(5) Dairy margin coverage > > The term ‘dairy margin coverage’ means the dairy margin coverage program required by section 1403. > > > #### “(6) Dairy margin coverage payment > > The term ‘dairy margin coverage payment’ means a payment made to a participating dairy operation under dairy margin coverage pursuant to section 1406.” > ; and #####

(B)in paragraphs

(7)and (8), by striking “the margin protection program” both places it appears and inserting “dairy margin coverage”. ####

(3)Calculation of actual dairy production margin Section 1402(b)(1) of the Agricultural Act of 2014 (7 U.S.C. 9052(b)(1)) is amended in the matter preceding subparagraph

(A)by striking “the margin protection program” and inserting “dairy margin coverage”. ####

(4)Program operation Section 1403 of the Agricultural Act of 2014 (7 U.S.C. 9053) is amended— #####

(A)by striking the section heading and inserting “dairy margin coverage”; #####

(B)by striking “ Not later than September 1, 2014, the Secretary shall establish and administer a margin protection program ” and inserting the following: > > ### “(a) In General > > The Secretary shall continue to administer a dairy margin coverage program” > ; #####

(C)in subsection

(a)(as so designated), by striking “margin protection payment” both places it appears and inserting “dairy margin coverage payment”; and #####

(D)by adding at the end the following: > > ### “(b) Regulations > > Subpart A of part 1430 of title 7, Code of Federal Regulations (as in effect on the date of enactment of the Agriculture Improvement Act of 2018), shall remain in effect for dairy margin coverage beginning with the 2019 calendar year, except to the extent that the regulations are inconsistent with any provision of this Act.” > . ####

(5)Participation Section 1404 of the Agricultural Act of 2014 (7 U.S.C. 9054) is amended— #####

(A)in the section heading, by striking “margin protection program” and inserting “dairy margin coverage”; #####

(B)in subsection (a), by striking “the margin protection program to receive margin protection payments” and inserting “dairy margin coverage to receive dairy margin coverage payments”; and #####

(C)in subsections

(b)and (c), by striking “the margin protection program” each place it appears and inserting “dairy margin coverage”. ####

(6)Production history Section 1405 of the Agricultural Act of 2014 (7 U.S.C. 9055) is amended in subsections (a)(1) and

(c)by striking “the margin protection program” each place it appears and inserting “dairy margin coverage”. ####

(7)Payments Section 1406 of the Agricultural Act of 2014 (7 U.S.C. 9056) is amended— #####

(A)in the section heading, by striking “margin protection” and inserting “dairy margin coverage”; #####

(B)by striking “margin protection” each place it appears and inserting “dairy margin coverage”; and #####

(C)in the heading of subsection (c), by striking “Margin Protection”. ####

(8)Premiums Section 1407 of the Agricultural Act of 2014 (7 U.S.C. 9057) is amended— #####

(A)in the section heading, by striking “margin protection program” and inserting “dairy margin coverage”; #####

(B)in subsection (a), in the matter preceding paragraph (1), by striking “the margin protection program” and inserting “dairy margin coverage”; #####

(C)in subsection (d), by striking “program” and inserting “dairy margin coverage”; and #####

(D)in subsection (e)— ######

(i)by striking “the margin protection program” both places it appears and inserting “dairy margin coverage”; and ######

(ii)in paragraph (2), by striking “integrity of the program” and inserting “integrity of dairy margin coverage”. ####

(9)Failure to pay administrative fees or premiums Section 1408 of the Agricultural Act of 2014 (7 U.S.C. 9058) is amended— #####

(A)in subsection (a)(2), by striking “margin protection” and inserting “dairy margin coverage”; and #####

(B)in subsection (b), by striking “the margin protection program” and inserting “dairy margin coverage”. ####

(10)Administration and enforcement Section 1410 of the Agricultural Act of 2014 (7 U.S.C. 9060) is amended— #####

(A)in subsections

(a)and (c), by striking “the margin protection program” each place it appears and inserting “dairy margin coverage”; and #####

(B)in subsection (b), by striking “margin protection” and inserting “dairy margin coverage”. ###

(l)Duration Section 1409 of the Agricultural Act of 2014 (7 U.S.C. 9059) is amended— ####

(1)by striking “The margin protection program” and inserting “Dairy margin coverage”; and ####

(2)by striking “2018” and inserting “2023”. ###

(m)Effective Date **[**[7 U.S.C. 9051 note](/us/usc/t7/s9051)**]** The amendments made by this section shall take effect on January 1, 2019.

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128 Stat. 688

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Sec. 1401

DAIRY MARGIN COVERAGE

U.S.C.§ 9052

U.S.C.§ 9054

U.S.C.§ 1501

Pub. L.Public Law 115-123

U.S.C.§ 9055

U.S.C.§ 9056

U.S.C.§ 9057

Pub. L.Public Law 113-79

U.S.C.§ 9051

Stat.128 Stat. 688

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