Beginning Farmers Agenda Act of 2016

Summary: Beginning Farmers Agenda Act of 2016  This bill amends various agricultural laws to modify and establish programs to assist beginning farmers.  The bill makes land trusts eligible for certain assistance under the Department of Agriculture (USDA) Agricultural Conservation Easement Program. In administering the program, USDA may prioritize an application for purchasing an easement that maintains agricultural viability, requires subsequent purchases to be at agricultural value, or both.  The bill amends the Internal Revenue Code to exclude from gross income up to $250,000 in gains from the sale or exchange of certain agricultural property to a beginning, socially disadvantaged, or veteran farmer or rancher, subject to specified conditions.  The bill modifies several agricultural programs to:    require the Farm Service Agency (FSA) to prequalify loan applicants,   increase and index for inflation the limit on the amount of USDA farm ownership loans per borrower,  establish minimum funding requirements for agriculture land easements and wetland reserve easements,   transfer jurisdiction of the Advisory Committee on Beginning Farmers and Ranchers to the FSA,   establish an online customer self-service portal,   reauthorize the Beginning Farmer and Rancher Development Program, and  authorize grants for farm viability programs.  The FSA must assign state coordinators to promote communication with beginning farmers or ranchers and increase their access to USDA programs.  The General Services Administration may sell surplus farm equipment or property to socially disadvantaged, veteran, or beginning farmers and ranchers.  The bill provides funding for: (1) the Beginning Farmer and Rancher Individual Development Accounts Pilot Program, and (2) the Farmers Market and Local Food Promotion Program. 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Beginning Farmers 
Agenda Act of 2016''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--IMPROVED ACCESS TO LAND

Sec. 101. Land trust eligibility for assistance for agricultural land 
                            easements.
Sec. 102. Priority for option to purchase at agricultural value in 
                            agricultural land easements.
Sec. 103. Exclusion of gain from sale of farm or ranch to a qualified 
                            agricultural purchaser.
Sec. 104. Prequalification of prospective applicants for credit from 
                            Farm Service Agency programs.
Sec. 105. Increase in limitation on amount of direct farm ownership 
                            loans; inflation indexation of limit.
Sec. 106. Minimum funding percentage for agricultural land easements 
                            and wetland reserve easements.
Sec. 107. Report on agricultural conservation easement program.
  TITLE II--IMPROVED ACCESS TO DEPARTMENT OF AGRICULTURE TRAINING AND 
                                PROGRAMS

Sec. 201. Beginning farmer coordination.
Sec. 202. Transfer of Advisory Committee on Beginning Farmers and 
                            Ranchers to jurisdiction of Farm Service 
                            Agency.
Sec. 203. Department of Agriculture on-line customer self-service 
                            portal.
Sec. 204. Extension of beginning farmer and rancher development program 
                            to provide training, education, outreach, 
                            and technical assistance initiatives.
Sec. 205. Mandatory funding for beginning farmer and rancher individual 
                            development accounts pilot program.
Sec. 206. Sale of surplus farm equipment or property to socially 
                            disadvantaged farmers or ranchers, veteran 
                            farmers or ranchers, and beginning farmers 
                            or ranchers.
        TITLE III--INVESTMENT IN LOCAL AND REGIONAL FOOD SYSTEMS

Sec. 301. Mandatory funding for farmers' market and local food 
                            promotion program.
Sec. 302. Grants to support farm viability programs.

                    TITLE I--IMPROVED ACCESS TO LAND

SEC. 101. LAND TRUST ELIGIBILITY FOR ASSISTANCE FOR AGRICULTURAL LAND 
              EASEMENTS.

    (a) Land Trusts.--Section 1265B of the Food Security Act of 1985 
(16 U.S.C. 3865b) is amended by adding at the end the following:
    ``(e) Land Trusts.--
            ``(1) Eligibility for assistance.--Notwithstanding section 
        1001D(b), an eligible entity that is a qualified land trust, as 
        determined by the Secretary, may receive assistance under this 
        section.
            ``(2) Assistance for reservation of easement.--The 
        Secretary may provide assistance to an eligible entity that is 
        a qualified land trust to supplement the sale price of eligible 
        land to a farmer or rancher, who is not ineligible to receive 
        assistance under section 1001D, if the eligible entity that is 
        a qualified land trust reserves for itself an agricultural land 
        easement in the eligible land.''.
    (b) Conforming Amendment.--Section 1001D(b)(1) of the Food Security 
Act of 1985 (7 U.S.C. 1308-3a(b)(1)) is amended by striking 
``Notwithstanding'' and inserting ``Except as provided in section 
1265B(e), notwithstanding''.

SEC. 102. PRIORITY FOR OPTION TO PURCHASE AT AGRICULTURAL VALUE IN 
              AGRICULTURAL LAND EASEMENTS.

    Section 1265B(b)(3) of the Food Security Act of 1985 (16 U.S.C. 
3865b(b)(3)) is amended by adding at the end the following:
                    ``(D) Priority.--In evaluating applications under 
                the program, the Secretary may give priority to an 
                application for the purchase of an agricultural land 
                easement that maintains agricultural viability or 
                includes, as a condition of the easement, a requirement 
                that any subsequent purchase of the land subject to the 
                easement shall be at agricultural value, as determined 
                by the Secretary, or both.''.

SEC. 103. EXCLUSION OF GAIN FROM SALE OF FARM OR RANCH TO A QUALIFIED 
              AGRICULTURAL PURCHASER.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139E the following:

``SEC. 139F. GAIN FROM SALE OF FARM OR RANCH TO A QUALIFIED 
              AGRICULTURAL PURCHASER.

    ``(a) In General.--In the case of an individual, gross income shall 
not include gain from the sale or exchange of property if--
            ``(1) during the 3-year period ending on the date of the 
        sale or exchange, such property has been owned and used by the 
        taxpayer in a farming business (as defined in section 263A(e)),
            ``(2) such property is acquired by a qualified agricultural 
        purchaser,
            ``(3) immediately before such sale or exchange, the 
        qualified agricultural purchaser does not own property that, in 
        aggregate acreage, is greater than or equal to twice the 
        average farm size in the county in which the property subject 
        to the sale or exchange is located, and
            ``(4) in connection with such transfer there is in effect a 
        restriction (granted in perpetuity) that such property be used 
        in a farming business (as so defined).
    ``(b) Limitations.--
            ``(1) In general.--The amount of gain excluded from gross 
        income under subsection (a) with respect to any sale or 
        exchange shall not exceed $250,000.
            ``(2) Special rule for joint returns.--In the case of a 
        joint return for the taxable year of the sale or exchange of 
        the property, paragraph (1) shall be applied by substituting 
        `$500,000' for `$250,000' if--
                    ``(A) either spouse meets the ownership 
                requirements of subsection (a) with respect to such 
                property, and
                    ``(B) both spouses meet the use requirements of 
                subsection (a) with respect to such property.
    ``(c) Qualified Agricultural Purchaser.--For purposes of this 
section--
            ``(1) In general.--The term `qualified agricultural 
        purchaser' means an individual who is--
                    ``(A) a beginning farmer or rancher,
                    ``(B) a socially disadvantaged farmer (as defined 
                in section 2501(e) of the Food, Agriculture, 
                Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)), 
                or
                    ``(C) a veteran farmer or rancher (as defined in 
                (as defined in section 2501(e) of the Food, 
                Agriculture, Conservation, and Trade Act of 1990 (7 
                U.S.C. 2279(e))).
            ``(2) Beginning farmer or rancher.--For purposes of this 
        section--
                    ``(A) In general.--The term `beginning farmer or 
                rancher' means an individual or entity who--
                            ``(i) has not operated a farm or ranch, or 
                        who has operated a farm or ranch for not more 
                        than 10 consecutive years, and
                            ``(ii) will materially and substantially 
                        participate in the operation of the farm or 
                        ranch.
                    ``(B) Material and substantial participation.--For 
                purposes of subparagraph (A), material and substantial 
                participation means--
                            ``(i) in the case of an individual, that 
                        the individual provides substantial day-to-day 
                        labor and management of the farm or ranch, 
                        consistent with the practices in the county or 
                        State where the farm is located, and
                            ``(ii) in the case of an entity, that all 
                        shareholders, holders of a capital or profits 
                        interest in the case of a partnership, or 
                        holders of a beneficial interest in the case of 
                        a trust or cooperative provide some amount of 
                        the management or labor necessary for day-to-
                        day activities such that if each of the members 
                        did not provide these inputs, operation of the 
                        farm or ranch would be seriously impaired.
    ``(d) Applicable Rules.--For purposes of this section, rules 
similar to the rules of paragraphs (2), (3), and (6) of section 121(d) 
shall apply.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139E the following new item:

``Sec. 139F. Gain from sale of farm or ranch to a qualified 
                            agricultural purchaser.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to sales and exchanges on or after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 104. PREQUALIFICATION OF PROSPECTIVE APPLICANTS FOR CREDIT FROM 
              FARM SERVICE AGENCY PROGRAMS.

    Not later than October 1, 2016, the Secretary of Agriculture shall 
develop and implement procedures to ensure that the Farm Service Agency 
is prepared, in advance, to respond to a request by a prospective loan 
applicant (other than a request for preapproval) for a preliminary 
determination on--
            (1) whether the prospective applicant would likely qualify 
        for credit under any program administered by the Farm Service 
        Agency; or
            (2) the amount of credit for which the prospective 
        applicant would likely qualify under any such program.

SEC. 105. INCREASE IN LIMITATION ON AMOUNT OF DIRECT FARM OWNERSHIP 
              LOANS; INFLATION INDEXATION OF LIMIT.

    Section 305 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1925) is amended by striking ``$300,000'' and inserting 
``$500,000 (increased, beginning with fiscal year 2017, by the 
inflation percentage applicable to the fiscal year in which the loan is 
made, and reduced by the amount of any unpaid indebtedness of the 
borrower on direct loans under subtitle B)''.

SEC. 106. MINIMUM FUNDING PERCENTAGE FOR AGRICULTURAL LAND EASEMENTS 
              AND WETLAND RESERVE EASEMENTS.

    Section 1265D of the Food Security Act of 1985 (16 U.S.C. 3865d) is 
amended by adding at the end the following:
    ``(f) Minimum Percentages.--The Secretary shall ensure that, of 
funds made available to carry out this subtitle, not less than 40 
percent are used to carry out each of sections 1265B and 1265C.''.

SEC. 107. REPORT ON AGRICULTURAL CONSERVATION EASEMENT PROGRAM.

    Not later than 180 days after the date of the enactment of this 
Act, the Chief of the Natural Resources Conservation Service 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 includes an evaluation of the extent in which the 
agricultural conservation easement program established under section 
1265(a) of the Food Security Act of 1985 (16 U.S.C. 3865(a)) supports 
beginning farmers or ranchers (as defined in section 206(b)) in 
purchasing land.

  TITLE II--IMPROVED ACCESS TO DEPARTMENT OF AGRICULTURE TRAINING AND 
                                PROGRAMS

SEC. 201. BEGINNING FARMER COORDINATION.

    (a) Program Established.--Not later than 1 year after the date of 
the enactment of this Act, the Secretary, acting through the 
Administrator of the Farm Service Agency, shall implement a program to 
assign to each State at least one coordinator to--
            (1) promote communication between the Department of 
        Agriculture and beginning farmers or ranchers (as defined in 
        section 206(b)) located in such State; and
            (2) increase the access of such beginning farmers or 
        ranchers to apprenticeship programs, farm loan programs, and 
        land available for purchase.
    (b) State Defined.--In this section, the term ``State'' means each 
of the several States, the District of Columbia, and any commonwealth, 
territory, or possession of the United States.

SEC. 202. TRANSFER OF ADVISORY COMMITTEE ON BEGINNING FARMERS AND 
              RANCHERS TO JURISDICTION OF FARM SERVICE AGENCY.

    The Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 
6901 et seq.) is amended--
            (1) in section 226B(e)(2) (7 U.S.C. 6934)--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraph (D) as 
                subparagraph (C); and
            (2) in section 226 (7 U.S.C. 6932), by adding at the end 
        the following new subsection:
    ``(i) Advisory Committee on Beginning Farmers and Ranchers.--The 
Administrator of the Farm Service Agency shall coordinate the 
activities of the Farm Service Agency with the Advisory Committee on 
Beginning Farmers and Ranchers established under section 5(b) of the 
Agricultural Credit Improvement Act of 1992 (7 U.S.C. 1929 note; Public 
Law 102-554).''.

SEC. 203. DEPARTMENT OF AGRICULTURE ON-LINE CUSTOMER SELF-SERVICE 
              PORTAL.

    (a) Customer Self-Service Portal.--The Secretary of Agriculture 
shall develop an on-line customer self-service portal through which 
farmers and ranchers will be able to securely access their customer and 
program information and complete program applications in a wide range 
of agricultural programs offered by the Department of Agriculture.
    (b) Sense of Congress.--It is the sense of Congress that the 
development of an on-line customer self-service portal, as required by 
subsection (a), should not negatively impact the many farmers and 
ranchers who do not yet have access to high-speed internet or who would 
prefer not to utilize the online self-service portal.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Agriculture to carry out subsection 
(a) $6,000,000 for the three-fiscal year period beginning on October 1, 
2016.

SEC. 204. EXTENSION OF BEGINNING FARMER AND RANCHER DEVELOPMENT PROGRAM 
              TO PROVIDE TRAINING, EDUCATION, OUTREACH, AND TECHNICAL 
              ASSISTANCE INITIATIVES.

    Section 7405(h) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 3319f(h)) is amended--
            (1) by striking ``2018'' both places it appears and 
        inserting ``2021'';
            (2) in the heading for paragraph (1), by striking ``2018'' 
        and inserting ``2021''; and
            (3) in the heading for paragraph (2), by striking ``2018'' 
        and inserting ``2021''.

SEC. 205. MANDATORY FUNDING FOR BEGINNING FARMER AND RANCHER INDIVIDUAL 
              DEVELOPMENT ACCOUNTS PILOT PROGRAM.

    Section 333B of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1983b) is amended--
            (1) in subsection (h), by striking ``2018'' and inserting 
        ``2016''; and
            (2) by adding at the end the following new subsection:
    ``(i) Mandatory Funding.--Of the funds of the Commodity Credit 
Corporation, the Secretary shall use to carry out this section 
$5,000,000 for fiscal year 2017 and each fiscal year thereafter.''.

SEC. 206. SALE OF SURPLUS FARM EQUIPMENT OR PROPERTY TO SOCIALLY 
              DISADVANTAGED FARMERS OR RANCHERS, VETERAN FARMERS OR 
              RANCHERS, AND BEGINNING FARMERS OR RANCHERS.

    (a) Sale Authorized.--The Administrator of General Services, under 
regulations prescribed by the Administrator, may sell to a socially 
disadvantaged farmer or rancher, veteran farmer or rancher, or 
beginning farmer or rancher any farm equipment acquired by the General 
Services Administration that--
            (1) is suitable for use in farming operations; and
            (2) has been determined to be surplus property under 
        chapter 5 of title 40, United States Code.
    (b) Definitions.--In this section:
            (1) Beginning farmer or rancher.--The term ``beginning 
        farmer or rancher'' means an individual or entity that has not 
        operated a farm or ranch or that has operated a farm or ranch 
        for not more than 10 consecutive years and that will materially 
        and substantially participate in the operation of the farm or 
        ranch. In the case of an entity, these requirements apply to 
        all members of the entity.
            (2) Food, agriculture, conservation, and trade act of 1990 
        terms.--The terms ``socially disadvantaged farmer or rancher'' 
        and ``veteran farmer or rancher'' have the meanings given those 
        terms in section 2501(e) of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)).

        TITLE III--INVESTMENT IN LOCAL AND REGIONAL FOOD SYSTEMS

SEC. 301. MANDATORY FUNDING FOR FARMERS' MARKET AND LOCAL FOOD 
              PROMOTION PROGRAM.

    Section 6(g)(1) of the Farmer-to-Consumer Direct Marketing Act of 
1976 (7 U.S.C. 3005(g)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) in subparagraph (D), by striking ``2018.'' and 
        inserting ``2016; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) $40,000,000 for each of fiscal years 2017 
                through 2021.''.

SEC. 302. GRANTS TO SUPPORT FARM VIABILITY PROGRAMS.

    (a) Grants Authorized.--The Secretary of Agriculture may make 
competitive grants to support a farm viability program developed by a 
public or private entity that is designed--
            (1) to improve the economic viability and environmental 
        integrity of farms participating in the program through the 
        development and implementation of a farm viability plans; and
            (2) to provide participating farmers with environmental, 
        technical, and business planning assistance to expand, upgrade, 
        and modernize their agricultural operations and assist in land 
        access and transfer.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Agriculture to make grants under this 
section such sums as are necessary for each of fiscal years 2017 
through 2021.