A bill to amend the Internal Revenue Code of 1954 to provide that interest on a State or local bond shall be included in gross income if the proceeds of the bond are used to finance milk production.

Amends the Internal Revenue Code to disallow the tax exclusion for interest earned on industrial development bonds issued by a State or local government if the proceeds of such bonds are used to finance milk production. Exempts from such requirement a limited amount of bonds used for first-time farmers and at times when there is a certification by the Secretary of Agriculture of a nationwide shortage of milk.