I 

109TH CONGRESS 

1ST SESSION H. R. 3562 

To amend the Specialty Crops Competitiveness Act of 2004 to increase 

the authorization of appropriations for grants to support the competitiveness of specialty crops, to amend the Agricultural Risk Protection Act 

of 2000 to improve the program of value-added agricultural product 

market development grants by routing funds through State departments 

of agriculture, to amend the Federal Crop Insurance Act to require 

a nationwide expansion of the adjusted gross revenue insurance program, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 28, 2005 

Ms. HOOLEY introduced the following bill; which was referred to the Committee on Agriculture, and in addition to the Committees on Ways and 

Means and Education and the Workforce, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Specialty Crops Competitiveness Act of 2004 

to increase the authorization of appropriations for grants 

to support the competitiveness of specialty crops, to 

amend the Agricultural Risk Protection Act of 2000 

to improve the program of value-added agricultural product market development grants by routing funds through 

State departments of agriculture, to amend the Federal 

Crop Insurance Act to require a nationwide expansion 

of the adjusted gross revenue insurance program, and 

for other purposes. 
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Specialty Crop and 

5 Value-Added Agriculture Promotion Act’’. 

6 SEC. 2. DEFINITION OF SPECIALTY CROP. 

7 Section 3(1) of the Specialty Crops Competitiveness 

8 Act of 2004 (Public 108–465; 7 U.S.C. 1621 note) is 

9 amended— 

10 (1) by inserting ‘‘fish and shellfish whether 

11 farm-raised or harvested in the wild,’’ after ‘‘dried 

12 fruits,’’; and 

13 (2) by adding at the end the following new sen14 tence: ‘‘The term includes specialty crops that are 

15 organically produced (as defined in section 2103 of 

16 the Organic Foods Production Act of 1990 (7 

17 U.S.C. 6502).’’. 

18 SEC. 3. PERMANENT AUTHORIZATION OF APPROPRIATIONS 

19 FOR STATE SPECIALTY CROP BLOCK GRANTS. 

20 Subsection (i) of section 101 of the Specialty Crops 

21 Competitiveness Act of 2004 (Public 108–465; 7 U.S.C. 

22 1621 note) is amended to read as follows: 

23 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—For fis24 cal year 2006 and every fiscal year thereafter, there is au-
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1 thorized to be appropriated to the Secretary of Agriculture 

2 $500,000,000 to make grants under this section.’’. 

3 SEC. 4. BLOCK GRANTS TO STATES FOR VALUE-ADDED AG4 RICULTURAL PRODUCT MARKET DEVELOP5 MENT. 

6 (a) IN GENERAL.—Subsection (b) of section 231 of 

7 the Agricultural Risk Protection Act of 2000 (Public Law 

8 106–224; 7 U.S.C. 1621 note) is amended to read as fol9 lows: 

10 ‘‘(b) GRANT PROGRAM.— 

11 ‘‘(1) BLOCK GRANTS TO STATES.— 

12 ‘‘(A) AMOUNT OF GRANT TO STATE.— 

13 From the amount made available under para14 graph (6) for a fiscal year, the Secretary shall 

15 provide to each State, subject to subparagraph 

16 (B), a grant in an amount equal to the product 

17 obtained by multiplying the amount made avail18 able for that fiscal year by the result obtained 

19 by dividing— 

20 ‘‘(i) the total value of the agricultural 

21 commodities and products made in the 

22 State during the preceding fiscal year; by 

23 ‘‘(ii) the total value of the agricultural 

24 commodities and products made in all of 

25 the States during the preceding fiscal year. 
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1 ‘‘(B) LIMITATION.—The total grant pro2 vided to a State for a fiscal year under sub3 paragraph (A) shall not exceed $3,000,000. 

4 ‘‘(2) USE OF GRANT FUNDS BY STATES.—A 

5 State shall use the grant funds to award competitive 

6 grants— 

7 ‘‘(A) to an eligible independent producer 

8 (as determined by the State) of a value-added 

9 agricultural product to assist the producer— 

10 ‘‘(i) in developing a business plan for 

11 viable marketing opportunities for the 

12 value-added agricultural product; or 

13 ‘‘(ii) in developing strategies that are 

14 intended to create marketing opportunities 

15 for the producer; and 

16 ‘‘(B) to an eligible agricultural producer 

17 group, farmer or rancher cooperative, or major18 ity-controlled producer-based business venture 

19 (as determined by the State) to assist the enti20 ty— 

21 ‘‘(i) in developing a business plan for 

22 viable marketing opportunities in emerging 

23 markets for a value-added agricultural 

24 product; or 
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1 ‘‘(ii) in developing strategies that are 

2 intended to create marketing opportunities 

3 in emerging markets for the value-added 

4 agricultural product. 

5 ‘‘(3) AMOUNT OF COMPETITIVE GRANT.—

6 ‘‘(A) IN GENERAL.—The total amount pro7 vided under paragraph (2) to a grant recipient 

8 shall not exceed $500,000. 

9 ‘‘(B) MAJORITY-CONTROLLED PRODUCER10 BASED BUSINESS VENTURES.—The amount of 

11 grants provided by a State to majority-con12 trolled producer-based business ventures under 

13 paragraph (2)(B) for a fiscal year may not ex14 ceed 10 percent of the amount of funds that are 

15 used by the State to make grants for the fiscal 

16 year under paragraph (2). 

17 ‘‘(4) GRANTEE STRATEGIES.—A recipient of a 

18 grant under paragraph (2) shall use the grant 

19 funds—

20 ‘‘(A) to develop a business plan or perform 

21 a feasibility study to establish a viable mar22 keting opportunity for a value-added agricul23 tural product; or 

24 ‘‘(B) to provide capital to establish alli25 ances or business ventures that allow the pro-
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1 ducer of the value-added agricultural product to 

2 better compete in domestic or international 

3 markets. 

4 ‘‘(5) REPORTS.—Within 90 days after the end 

5 of a fiscal year for which funds are provided to a 

6 State under paragraph (1), the State shall submit to 

7 the Committee on Agriculture of the House of Rep8 resentatives and the Committee on Agriculture, Nu9 trition, and Forestry of the Senate a report describ10 ing how the funds were used. 

11 ‘‘(6) FUNDING.—On October 1 of each fiscal 

12 year, of the funds of the Commodity Credit Corpora13 tion, the Secretary shall make available to carry out 

14 this subsection $100,000,000, to remain available 

15 until expended. 

16 ‘‘(7) STATE DEFINED.—In this subsection, the 

17 term ‘State’ means each of the 50 States, the Dis18 trict of Columbia, the Commonwealth of Puerto 

19 Rico, the United States Virgin Islands, Guam, 

20 American Samoa, and the Commonwealth of the 

21 Northern Mariana Islands.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 subsection (a) shall take effect on October 1, 2005. 
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1 SEC. 5. REIMBURSEMENT OF CERTIFICATION COSTS. 

2 (a) INCENTIVE PROGRAM.—The Secretary of Agri3 culture shall establish an incentive program to encourage 

4 the independent third-party certification of agricultural 

5 producers and processors for product qualities, production 

6 practices, or other product or process attributes that in7 crease marketability or value of an agricultural com8 modity. The Secretary shall include independent third9 party certification systems, including programs such as 

10 Good Agricultural Practices, Good Handling Practices, 

11 and Good Manufacturing Practices programs, that the 

12 Secretary finds will provide one or more measurable social, 

13 environmental, or marketing advantages. 

14 (b) STANDARDS.—The Secretary shall set standards 

15 regarding the types of certifications, and the types of cer16 tification-related expenses, that will qualify for reimburse17 ment under the program. 

18 (c) LIMITATION ON AMOUNT OF REIMBURSEMENT.— 

19 An agricultural producer or processor may not receive re20 imbursement for more than 50 percent of the qualified ex21 penses incurred by the producer or processor related to 

22 accepted certifications. 
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1 SEC. 6. NATIONWIDE EXPANSION OF RISK MANAGEMENT 

2 AGENCY ADJUSTED GROSS REVENUE INSUR3 ANCE PROGRAM. 

4 (a) EXPANSION.—Section 523(e) of the Federal Crop 

5 Insurance Act (7 U.S.C. 1523(e)) is amended by adding 

6 at the end the following new paragraph: 

7 ‘‘(3) PERMANENT NATIONWIDE OPERATION.— 

8 Effective beginning with the 2006 reinsurance year, 

9 the Corporation shall carry out the adjusted gross 

10 revenue insurance pilot program as a permanent 

11 program under this title and may expand the pro12 gram to cover any county in which crops are pro13 duced. To facilitate the expansion of the program 

14 nationwide, the Corporation may grant temporary 

15 premium subsidies for the purchase of a policy 

16 under the program to producers whose farm oper17 ations are located in a county that has a high level 

18 of specialty crop production and has not had a high19 level of participation in the purchase of crop insur20 ance coverage.’’. 

21 (b) COMPTROLLER GENERAL STUDY.—The Comp22 troller General shall conduct a study of the Federal crop 

23 insurance program to determine how well the program 

24 serves specialty crop producers and to recommend such 

25 changes as the Comptroller General considers appropriate 

26 to improve the program for specialty crop producers. 
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1 SEC. 7. EXPANSION OF FRUIT AND VEGETABLE PROGRAM 

2 IN SCHOOL LUNCH PROGRAMS. 

3 The Richard B. Russell National School Lunch Act 

4 is amended— 

5 (1) in section 18 (42 U.S.C. 1769), by striking 

6 subsection (g); and 

7 (2) by inserting after section 18 the following 

8 new section: 

9 ‘‘SEC. 19. FRUIT AND VEGETABLE PROGRAM. 

10 ‘‘(a) IN GENERAL.—The Secretary shall make avail11 able in not more than 100 schools in each State, and in 

12 elementary and secondary schools on 1 Indian reservation, 

13 free fresh and dried fruits and vegetables and frozen ber14 ries to be served to school children throughout the school 

15 day in 1 or more areas designated by the school. 

16 ‘‘(b) PRIORITY IN ALLOCATION.—In selecting States 

17 to participate in the program, the Secretary shall give pri18 ority to States that produce large quantities of specialty 

19 crops. 

20 ‘‘(c) PUBLICITY.—A school participating in the pro21 gram authorized by this section shall publicize within the 

22 school the availability of free fruits and vegetables under 

23 the program. 

24 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

25 is authorized to be appropriated for fiscal years 2006 and 

26 2007, $20,000,000 to carry out this section.’’. 
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1 SEC. 8. INCREASE IN LIMIT ON DIRECT OPERATING LOANS; 

2 INDEXATION TO INFLATION. 

3 Section 313 of the Consolidated Farm and Rural De4 velopment Act (7 U.S.C. 1943) is amended— 

5 (1) in subsection (a)(1), by striking ‘‘$200,000’’ 

6 and inserting ‘‘$500,000 (increased, beginning with 

7 fiscal year 2007, by the inflation percentage applica8 ble to the fiscal year in which the loan is made)’’; 

9 and 

10 (2) in subsection (b), by striking paragraph (2) 

11 and inserting the following new paragraph: 

12 ‘‘(2) the average of such index (as so defined) 

13 for the 12-month period ending on— 

14 ‘‘(A) in the case of a loan other than a 

15 loan guaranteed by the Secretary, August 31, 

16 2005; or 

17 ‘‘(B) in the case of a loan guaranteed by 

18 the Secretary, August 31, 1996.’’. 

19 SEC. 9. TRADE OF SPECIALTY CROPS. 

20 (a) ASSISTANT USTR FOR SPECIALTY CROPS.—Sec21 tion 141(c) of the Trade Act of 1974 (19 U.S.C. 2171(c)) 

22 is amended by adding at the end the following new para23 graph: 

24 ‘‘(6)(A) There is established in the Office the 

25 position of Assistant United States Trade Rep26 resentative for Specialty Crops. The Assistant 
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1 United States Trade Representative for Specialty 

2 Crops shall be appointed by the United States Trade 

3 Representative. 

4 ‘‘(B) The primary function of the Assistant 

5 United States Trade Representative for Specialty 

6 Crops shall be to promote the trade interests of spe7 cialty crop businesses, to remove foreign trade bar8 riers that impede specialty crop businesses, and to 

9 enforce existing trade agreements beneficial to spe10 cialty crop businesses. 

11 ‘‘(C) The Assistant United States Trade Rep12 resentative for Specialty Crops shall be paid at the 

13 level of a member of the Senior Executive Service 

14 with equivalent time and service.’’. 

15 (b) STUDY OF URUGUAY ROUND TABLE AGREEMENT

16 BENEFITS.— 

17 (1) STUDY.—The Comptroller General of the 

18 United States shall conduct a study on the benefits 

19 of the agreements approved by Congress under sec20 tion 101(a)(1) of the Uruguay Round Agreements 

21 Act (Public Law 103–465) to specialty crop busi22 nesses. 

23 (2) REPORT.—Not later than one year after the 

24 date of the enactment of this Act, the Comptroller 

25 General shall submit to Congress a report describing 
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1 the results of the study conducted under paragraph 

2 (1). 

3 (c) FOREIGN MARKET ACCESS STRATEGY.—Not 

4 later than one year after the date of the enactment of this 

5 Act, the Secretary of Agriculture shall develop and imple6 ment a foreign market access strategy to increase exports 

7 of specialty crops to foreign markets. 

8 SEC. 10. INCREASED AUTHORIZATION FOR TECHNICAL AS9 SISTANCE FOR SPECIALTY CROPS. 

10 Section 3205(d) of the Farm Security and Rural In11 vestment Act of 2002 (7 U.S.C. 5680(d)) is amended by 

12 striking ‘‘$2,000,000’’ and inserting ‘‘$10,000,000’’. 

Æ