Union Calendar No. 223

104TH CONGRESS

2D SESSION H. R. 2854

[Report No. 104–462, Parts I and II]

A BILL

To modify the operation of certain agricultural

programs.

FEBRUARY 9, 1996

Reported from the Committee on Agriculture with an

amendment

FEBRUARY 9, 1996

Referral to the Committee on Ways and Means extended

for a period ending not later than February 9, 1996

FEBRUARY 9, 1996

Committee on Ways and Means discharged; committed to

Union and ordered to be printedthe Committee of the Whole House on the State of the
IB

Union Calendar No. 223

104TH CONGRESS

2D SESSION H. R. 2854

[Report No. 104–462, Parts I and II]

To modify the operation of certain agricultural programs.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1996

Mr. ROBERTS (for himself, Mr. EMERSON, Mr. ALLARD, Mr. BARRETT of Nebraska, Mr. EWING, Mr. COMBEST, Mr. BOEHNER, Mr. CHAMBLISS, and

Mr. NETHERCUTT) introduced the following bill; which was referred to

the Committee on Agriculture, and in addition to the Committee on Ways

and Means, 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

FEBRUARY 9, 1996

Additional sponsors: Mr. TIAHRT, Mr. EVERETT, Mr. LEWIS of Kentucky, Mr.

SMITH of Michigan, Mr. CHRYSLER, Mr. EHLERS, and Mr. GUNDERSON

FEBRUARY 9, 1996

Reported from the Committee on Agriculture with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

FEBRUARY 9, 1996

Referral to the Committee on Ways and Means extended for a period ending

not later than February 9, 1996

FEBRUARY 9, 1996

Committee on Ways and Means discharged; committed to the Committee of

the Whole House on the State of the Union and ordered to be printed

[For text of introduced bill, see copy of bill as introduced on January 5, 1996]
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A BILL

To modify the operation of certain agricultural programs.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the ‘‘Ag5 ricultural Market Transition Act’’.

6 (b) TABLE OF CONTENTS.—The table of contents of this

7 Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—AGRICULTURAL MARKET TRANSITION PROGRAM

Sec. 101. Purpose.

Sec. 102. Definitions.

Sec. 103. Production flexibility contracts.

Sec. 104. Nonrecourse marketing assistance loans and loan deficiency payments.

Sec. 105. Payment limitations.

Sec. 106. Peanut program.

Sec. 107. Sugar program.

Sec. 108. Administration.

Sec. 109. Elimination of permanent price support authority.

Sec. 110. Effect of amendments.

TITLE II—DAIRY

Subtitle A—Milk Price Support and Other Activities

Sec. 201. Milk price support program.

Sec. 202. Recourse loans for commercial processors of dairy products.

Sec. 203. Dairy export incentive program.

Sec. 204. Dairy promotion program.

Sec. 205. Fluid milk standards under milk marketing orders.

Sec. 206. Manufacturing allowance.

Sec. 207. Establishment of temporary Class I price and temporary Class I equalization pools.

Sec. 208. Establishment of temporary Class IV price and temporary Class IV

equalization pool.

Sec. 209. Authority for establishment of standby pools.

Subtitle B—Reform of Federal Milk Marketing Orders

Sec. 221. Issuance or amendment of Federal milk marketing orders to implement

certain reforms.

Sec. 222. Reform process.
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Sec. 223. Effect of failure to comply with reform process requirements.

TITLE III—CONSERVATION

Sec. 301. Conservation.

TITLE IV—AGRICULTURAL PROMOTION AND EXPORT

PROGRAMS

Sec. 401. Market promotion program.

Sec. 402. Export enhancement program.

TITLE V—MISCELLANEOUS

Sec. 501. Crop insurance.

Sec. 502. Collection and use of agricultural quarantine and inspection fees.

Sec. 503. Commodity Credit Corporation interest rate.

Sec. 504. Establishment of Office of Risk Management.

Sec. 505. Business Interruption Insurance Program.

Sec. 506. Continuation of options pilot program.

TITLE VI—COMMISSION ON 21ST CENTURY PRODUCTION

AGRICULTURE

Sec. 601. Establishment.

Sec. 602. Composition.

Sec. 603. Comprehensive review of past and future of production agriculture.

Sec. 604. Reports.

Sec. 605. Powers.

Sec. 606. Commission procedures.

Sec. 607. Personnel matters.

Sec. 608. Termination of Commission.

TITLE VII—EXTENSION OF CERTAIN AUTHORITIES

Sec. 701. Extension of authority under Public Law 480.

Sec. 702. Extension of food for progress program.

1 TITLE I—AGRICULTURAL

2 MARKET TRANSITION PROGRAM

3 SEC. 101. PURPOSE.

4 It is the purpose of this title—

5 (1) to authorize the use of binding production

6 flexibility contracts between the United States and ag7 ricultural producers to support farming certainty and

8 flexibility while ensuring continued compliance with
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1 farm conservation compliance plans and wetland pro2 tection requirements;

3 (2) to make nonrecourse marketing assistance

4 loans and loan deficiency available for certain crops;

5 (3) to improve the operation of farm programs

6 for peanuts and sugar; and

7 (4) to terminate price support authority under

8 the Agricultural Act of 1949.

9 SEC. 102. DEFINITIONS.

10 In this title:

11 (1) CONSIDERED PLANTED.—The term ‘‘consid12 ered planted’’ means acreage that is considered plant13 ed under title V of the Agricultural Act of 1949 (7

14 U.S.C. 1461 et seq.) (as in effect prior to the amend15 ment made by section 109(b)(2)).

16 (2) CONTRACT.—The term ‘‘contract’’ means a

17 production flexibility contract entered into under sec18 tion 103.

19 (3) CONTRACT ACREAGE.—The term ‘‘contract

20 acreage’’ means 1 or more crop acreage bases estab21 lished for contract commodities under title V of the

22 Agricultural Act of 1949 (as in effect prior to the

23 amendment made by section 109(b)(2)) that would

24 have been in effect for the 1996 crop (but for the

25 amendment made by section 109(b)(2)).
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1 (4) CONTRACT COMMODITY.—The term ‘‘contract

2 commodity’’ means wheat, corn, grain sorghum, bar3 ley, oats, upland cotton, and rice.

4 (5) CONTRACT PAYMENT.—The term ‘‘contract

5 payment’’ means a payment made under section 103

6 pursuant to a contract.

7 (6) CORN.—The term ‘‘corn’’ means field corn.

8 (7) DEPARTMENT.—The term ‘‘Department’’

9 means the United States Department of Agriculture.

10 (8) FARM PROGRAM PAYMENT YIELD.—The term

11 ‘‘farm program payment yield’’ means the farm pro12 gram payment yield established for the 1995 crop of

13 a contract commodity under title V of the Agricul14 tural Act of 1949 (as in effect prior to the amendment

15 made by section 109(b)(2)).

16 (9) LOAN COMMODITY.—The term ‘‘loan com17 modity’’ means each contract commodity, extra long

18 staple cotton, and oilseeds.

19 (10) OILSEED.—The term ‘‘oilseed’’ means a

20 crop of soybeans, sunflower seed, rapeseed, canola, saf21 flower, flaxseed, mustard seed, or, if designated by the

22 Secretary, other oilseeds.

23 (11) PERSON.—The term ‘‘person’’ means an in24 dividual, partnership, firm, joint-stock company, cor25 poration, association, trust, estate, or State agency.
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1 (12) PRODUCER.—

2 (A) IN GENERAL.—The term ‘‘producer’’

3 means a person who, as owner, landlord, tenant,

4 or sharecropper, shares in the risk of producing

5 a crop, and is entitled to share in the crop avail6 able for marketing from the farm, or would have

7 shared had the crop been produced.

8 (B) HYBRID SEED.—The term ‘‘producer’’

9 includes a person growing hybrid seed under

10 contract. In determining the interest of a grower

11 of hybrid seed in a crop, the Secretary shall not

12 take into consideration the existence of a hybrid

13 seed contract.

14 (13) PROGRAM.—The term ‘‘program’’ means the

15 agricultural market transition program established

16 under this title.

17 (14) SECRETARY.—The term ‘‘Secretary’’ means

18 the Secretary of Agriculture.

19 (15) STATE.—The term ‘‘State’’ means each of

20 the several States of the United States, the District of

21 Columbia, the Commonwealth of Puerto Rico, and

22 any other territory or possession of the United States.

23 (16) UNITED STATES.—The term ‘‘United

24 States’’, when used in a geographical sense, means all

25 of the States.
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1 SEC. 103. PRODUCTION FLEXIBILITY CONTRACTS.

2 (a) CONTRACTS AUTHORIZED.—

3 (1) OFFER AND TERMS.—Beginning as soon as

4 practicable after the date of the enactment of this

5 title, the Secretary shall offer to enter into a contract

6 with an eligible owner or operator described in para7 graph (2) on a farm containing eligible farmland.

8 Under the terms of a contract, the owner or operator

9 shall agree, in exchange for annual contract pay10 ments, to comply with—

11 (A) the conservation plan for the farm pre12 pared in accordance with section 1212 of the

13 Food Security Act of 1985 (16 U.S.C. 3812);

14 (B) wetland protection requirements appli15 cable to the farm under subtitle C of title XII of

16 the Act (16 U.S.C. 3821 et seq.); and

17 (C) the planting flexibility requirements of

18 subsection (j).

19 (2) ELIGIBLE OWNERS AND OPERATORS DE20 SCRIBED.—The following persons shall be considered

21 to be an owner or operator eligible to enter into a

22 contract:

23 (A) An owner of eligible farmland who as24 sumes all of the risk of producing a crop.

25 (B) An owner of eligible farmland who

26 shares in the risk of producing a crop.
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1 (C) An operator of eligible farmland with a

2 share-rent lease of the eligible farmland, regard3 less of the length of the lease, if the owner enters

4 into the same contract.

5 (D) An operator of eligible farmland who

6 cash rents the eligible farmland under a lease ex7 piring on or after September 30, 2002, in which

8 case the consent of the owner is not required.

9 (E) An operator of eligible farmland who

10 cash rents the eligible farmland under a lease ex11 piring before September 30, 2002, if the owner

12 consents to the contract.

13 (F) An owner of eligible farmland who cash

14 rents the eligible farmland and the lease term ex15 pires before September 30, 2002, but only if the

16 actual operator of the farm declines to enter into

17 a contract. In the case of an owner covered by

18 this subparagraph, contract payments shall not

19 begin under a contract until the fiscal year fol20 lowing the fiscal year in which the lease held by

21 the nonparticipating operator expires.

22 (G) An owner or operator described in any

23 preceding subparagraph of this paragraph re24 gardless of whether the owner or operator pur25 chased catastrophic risk protection for a fall-
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1 planted 1996 crop under section 508(b) of the

2 Federal Crop Insurance Act (7 U.S.C. 1508(b)).

3 (3) TENANTS AND SHARECROPPERS.—In carry4 ing out this section, the Secretary shall provide ade5 quate safeguards to protect the interests of operators

6 who are tenants and sharecroppers.

7 (b) ELEMENTS.—

8 (1) TIME FOR CONTRACTING.—

9 (A) DEADLINE.—Except as provided in sub10 paragraph (B), the Secretary may not enter into

11 a contract after April 15, 1996.

12 (B) CONSERVATION RESERVE LANDS.—

13 (i) IN GENERAL.—At the beginning of

14 each fiscal year, the Secretary shall allow

15 an eligible owner or operator on a farm cov16 ered by a conservation reserve contract en17 tered into under section 1231 of the Food

18 Security Act of 1985 (16 U.S.C. 3831) that

19 terminates after the date specified in sub20 paragraph (A) to enter into or expand a

21 production flexibility contract to cover the

22 contract acreage of the farm that was sub23 ject to the former conservation reserve con24 tract.
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1 (ii) AMOUNT.—Contract payments

2 made for contract acreage under this sub3 paragraph shall be made at the rate and

4 amount applicable to the annual contract

5 payment level for the applicable crop.

6 (2) DURATION OF CONTRACT.—

7 (A) BEGINNING DATE.—A contract shall

8 begin with—

9 (i) the 1996 crop of a contract com10 modity; or

11 (ii) in the case of acreage that was sub12 ject to a conservation reserve contract de13 scribed in paragraph (1)(B), the date the

14 production flexibility contract was entered

15 into or expanded to cover the acreage.

16 (B) ENDING DATE.—A contract shall extend

17 through the 2002 crop.

18 (3) ESTIMATION OF CONTRACT PAYMENTS.—At

19 the time the Secretary enters into a contract, the Sec20 retary shall provide an estimate of the minimum con21 tract payments anticipated to be made during at

22 least the first fiscal year for which contract payments

23 will be made.

24 (c) ELIGIBLE FARMLAND DESCRIBED.—Land shall be

25 considered to be farmland eligible for coverage under a con-
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1 tract only if the land has contract acreage attributable to

2 the land and—

3 (1) for at least 1 of the 1991 through 1995 crops,

4 at least a portion of the land was enrolled in the acre5 age reduction program authorized for a crop of a con6 tract commodity under section 101B, 103B, 105B, or

7 107B of the Agricultural Act of 1949 (as in effect

8 prior to the amendment made by section 109(b)(2)) or

9 was considered planted;

10 (2) was subject to a conservation reserve contract

11 under section 1231 of the Food Security Act of 1985

12 (16 U.S.C. 3831) whose term expired, or was volun13 tarily terminated, on or after January 1, 1995; or

14 (3) is released from coverage under a conserva15 tion reserve contract by the Secretary during the pe16 riod beginning on January 1, 1995, and ending on

17 the date specified in subsection (b)(1)(A).

18 (d) TIME FOR PAYMENT.—

19 (1) IN GENERAL.—An annual contract payment

20 shall be made not later than September 30 of each of

21 fiscal years 1996 through 2002.

22 (2) ADVANCE PAYMENTS.—

23 (A) FISCAL YEAR 1996.—At the option of the

24 owner or operator, 50 percent of the contract
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1 payment for fiscal year 1996 shall be made not

2 later than June 15, 1996.

3 (B) SUBSEQUENT FISCAL YEARS.—At the

4 option of the owner or operator for fiscal year

5 1997 and each subsequent fiscal year, 50 percent

6 of the annual contract payment shall be made on

7 December 15.

8 (e) AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS

9 FOR EACH FISCAL YEAR.—

10 (1) IN GENERAL.—The Secretary shall, to the

11 maximum extent practicable, expend on a fiscal year

12 basis the following amounts to satisfy the obligations

13 of the Secretary under all contracts:

14 (A) For fiscal year 1996, $5,570,000,000.

15 (B) For fiscal year 1997, $5,385,000,000.

16 (C) For fiscal year 1998, $5,800,000,000.

17 (D) For fiscal year 1999, $5,603,000,000.

18 (E) For fiscal year 2000, $5,130,000,000.

19 (F) For fiscal year 2001, $4,130,000,000.

20 (G) For fiscal year 2002, $4,008,000,000.

21 (2) ALLOCATION.—The amount made available

22 for a fiscal year under paragraph (1) shall be allo23 cated as follows:

24 (A) For wheat, 26.26 percent.

25 (B) For corn, 46.22 percent.
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1 (C) For grain sorghum, 5.11 percent.

2 (D) For barley, 2.16 percent.

3 (E) For oats, 0.15 percent.

4 (F) For upland cotton, 11.63 percent.

5 (G) For rice, 8.47 percent.

6 (3) ADJUSTMENT.—The Secretary shall adjust

7 the amounts allocated for each contract commodity

8 under paragraph (2) for a particular fiscal year by—

9 (A) adding an amount equal to the sum of

10 all repayments of deficiency payments received

11 under section 114(a)(2) of the Agricultural Act

12 of 1949 (as in effect prior to the amendment

13 made by section 109(b)(2)) for the commodity;

14 (B) to the maximum extent practicable,

15 adding an amount equal to the sum of all con16 tract payments withheld by the Secretary, at the

17 request of an owner or operator subject to a con18 tract, as an offset against repayments of defi19 ciency payments otherwise required under sec20 tion 114(a)(2) of the Act (as so in effect) for the

21 commodity;

22 (C) adding an amount equal to the sum of

23 all refunds of contract payments received during

24 the preceding fiscal year under subsection (h) of

25 this section for the commodity; and
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1 (D) subtracting an amount equal to the

2 amount, if any, necessary during that fiscal year

3 to satisfy payment requirements for the commod4 ity under sections 103B, 105B, or 107B of the

5 Agricultural Act of 1949 (as in effect prior to the

6 amendment made by section 109(b)(2)) for the

7 1994 and 1995 crop years.

8 (4) SPECIAL ADJUSTMENT TO COVER EXISTING

9 RICE PAYMENT REQUIREMENTS.—As soon as possible

10 after the date of the enactment of this Act, the Sec11 retary shall determine the amount, if any, necessary

12 to satisfy remaining payment requirements under sec13 tion 101B of the Agricultural Act of 1949 (as in effect

14 prior to the amendment made by section 109(b)(2))

15 for the 1994 and 1995 crops of rice. The total amount

16 determined under this paragraph shall be deducted,

17 in equal amounts each fiscal year, from the amount

18 allocated for rice under paragraph (2)(G) for fiscal

19 years after the fiscal year in which the final remain20 ing payments are made for rice.

21 (f) DETERMINATION OF CONTRACT PAYMENTS.—

22 (1) INDIVIDUAL PAYMENT QUANTITY OF CON23 TRACT COMMODITIES.—For each contract, the pay24 ment quantity of a contract commodity for each fiscal

25 year shall be equal to the product of—
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1 (A) 85 percent of the contract acreage; and

2 (B) the farm program payment yield.

3 (2) ANNUAL PAYMENT QUANTITY OF CONTRACT

4 COMMODITIES.—The payment quantity of each con5 tract commodity covered by all contracts for each fis6 cal year shall equal the sum of the amounts calculated

7 under paragraph (1) for each individual contract.

8 (3) ANNUAL PAYMENT RATE.—The payment rate

9 for a contract commodity for each fiscal year shall be

10 equal to—

11 (A) the amount made available under sub12 section (e) for the contract commodity for the fis13 cal year; divided by

14 (B) the amount determined under para15 graph (2) for the fiscal year.

16 (4) ANNUAL PAYMENT AMOUNT.—The amount to

17 be paid under a contract in effect for each fiscal year

18 with respect to a contract commodity shall be equal

19 to the product of—

20 (A) the payment quantity determined under

21 paragraph (1) with respect to the contract; and

22 (B) the payment rate in effect under para23 graph (3).

24 (5) ASSIGNMENT OF CONTRACT PAYMENTS.—The

25 provisions of section 8(g) of the Soil Conservation and
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1 Domestic Allotment Act (16 U.S.C. 590h(g)) (relating

2 to assignment of payments) shall apply to contract

3 payments under this subsection. The owner or opera4 tor making the assignment, or the assignee, shall pro5 vide the Secretary with notice, in such manner as the

6 Secretary may require in the contract, of any assign7 ment made under this paragraph.

8 (6) SHARING OF CONTRACT PAYMENTS.—The

9 Secretary shall provide for the sharing of contract

10 payments among the owners and operators subject to

11 the contract on a fair and equitable basis.

12 (g) PAYMENT LIMITATION.—The total amount of con13 tract payments made to a person under a contract during

14 any fiscal year may not exceed the payment limitations es15 tablished under sections 1001 through 1001C of the Food

16 Security Act of 1985 (7 U.S.C. 1308 through 1308–3).

17 (h) EFFECT OF VIOLATION.—

18 (1) TERMINATION OF CONTRACT.—Except as pro19 vided in paragraph (2), if an owner or operator sub20 ject to a contract violates the conservation plan for

21 the farm containing eligible farmland under the con22 tract, wetland protection requirements applicable to

23 the farm, or the planting flexibility requirements of

24 subsection (j), the Secretary shall terminate the con25 tract with respect to the owner or operator on each
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1 farm in which the owner or operator has an interest.

2 On the termination, the owner or operator shall for3 feit all rights to receive future contract payments on

4 each farm in which the owner or operator has an in5 terest and shall refund to the Secretary all contract

6 payments received by the owner or operator during

7 the period of the violation, together with interest on

8 the contract payments as determined by the Sec9 retary.

10 (2) REFUND OR ADJUSTMENT.—If the Secretary

11 determines that a violation does not warrant termi12 nation of the contract under paragraph (1), the Sec13 retary may require the owner or operator subject to

14 the contract—

15 (A) to refund to the Secretary that part of

16 the contract payments received by the owner or

17 operator during the period of the violation, to18 gether with interest on the contract payments as

19 determined by the Secretary; or

20 (B) to accept a reduction in the amount of

21 future contract payments that is proportionate

22 to the severity of the violation, as determined by

23 the Secretary.

24 (3) FORECLOSURE.—An owner or operator sub25 ject to a contract may not be required to make repay-
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1 ments to the Secretary of amounts received under the

2 contract if the contract acreage has been foreclosed on

3 and the Secretary determines that forgiving the re4 payments is appropriate in order to provide fair and

5 equitable treatment. This paragraph shall not void

6 the responsibilities of such an owner or operator

7 under the contract if the owner or operator continues

8 or resumes operation, or control, of the contract acre9 age. On the resumption of operation or control over

10 the contract acreage by the owner or operator, the

11 provisions of the contract in effect on the date of the

12 foreclosure shall apply.

13 (4) REVIEW.—A determination of the Secretary

14 under this subsection shall be considered to be an ad15 verse decision for purposes of the availability of ad16 ministrative review of the determination.

17 (i) TRANSFER OF INTEREST IN LANDS SUBJECT TO

18 CONTRACT.—

19 (1) EFFECT OF TRANSFER.—Except as provided

20 in paragraph (2), the transfer by an owner or opera21 tor subject to a contract of the right and interest of

22 the owner or operator in the contract acreage shall re23 sult in the termination of the contract with respect to

24 the acreage, effective on the date of the transfer, unless

25 the transferee of the acreage agrees with the Secretary
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1 to assume all obligations of the contract. At the re2 quest of the transferee, the Secretary may modify the

3 contract if the modifications are consistent with the

4 objectives of this section as determined by the Sec5 retary.

6 (2) EXCEPTION.—If an owner or operator who is

7 entitled to a contract payment dies, becomes incom8 petent, or is otherwise unable to receive the contract

9 payment, the Secretary shall make the payment, in

10 accordance with regulations prescribed by the Sec11 retary.

12 (j) PLANTING FLEXIBILITY.—

13 (1) PERMITTED CROPS.—Subject to paragraph

14 (2), any commodity or crop may be planted on con15 tract acreage on a farm.

16 (2) LIMITATIONS.—

17 (A) HAYING AND GRAZING.—

18 (i) TIME LIMITATIONS.—Haying and

19 grazing on land exceeding 15 percent of the

20 contract acreage on a farm as provided in

21 clause (iii) shall be permitted, except during

22 any consecutive 5-month period between

23 April 1 and October 31 that is determined

24 by the State committee established under

25 section 8(b) of the Soil Conservation and
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1 Domestic Allotment Act (6 U.S.C. 590h(b))

2 for a State. In the case of a natural disas3 ter, the Secretary may permit unlimited

4 haying and grazing on the contract acreage

5 of a farm.

6 (ii) CONTRACT COMMODITIES.—Con7 tract acreage planted to a contract commod8 ity for harvest may be hayed or grazed at

9 any time without limitation.

10 (iii) HAYING AND GRAZING LIMITATION

11 ON PORTION OR CONTRACT ACREAGE.—Un12 limited haying and grazing shall be per13 mitted on not more than 15 percent of the

14 contract acreage on a farm.

15 (B) ALFALFA.—Alfalfa may be grown on

16 contract acreage in excess of the acreage limita17 tion in subparagraph (A)(iii) and without re18 gard to the time limitation in subparagraph

19 (A)(i), except that each contract acre on a farm

20 that is planted for harvest to alfalfa in excess of

21 15 percent of the total contract acreage on the

22 farm shall be ineligible for contract payments.

23 (C) FRUITS AND VEGETABLES.—

24 (i) IN GENERAL.—The planting for

25 harvest of fruits and vegetables shall be pro-
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1 hibited on contract acreage, except in any

2 region in which there is a history of double3 cropping, as determined by the Secretary.

4 (ii) UNRESTRICTED VEGETABLES.—

5 Notwithstanding clause (i), lentils, mung

6 beans, and dry peas may be planted for

7 harvest without limitation on contract acre8 age.

9 SEC. 104. NONRECOURSE MARKETING ASSISTANCE LOANS

10 AND LOAN DEFICIENCY PAYMENTS.

11 (a) AVAILABILITY OF MARKETING ASSISTANCE

12 LOANS.—

13 (1) NONRECOURSE LOANS AVAILABLE.—For each

14 of the 1996 through 2002 crops of each loan commod15 ity, the Secretary shall make available to producers

16 on a farm nonrecourse marketing assistance loans for

17 loan commodities produced on the farm. The loans

18 shall be made under terms and conditions that are

19 prescribed by the Secretary and at the loan rate es20 tablished under subsection (b) for the loan commodity.

21 (2) ELIGIBLE PRODUCTION.—The following pro22 duction shall be eligible for a marketing assistance

23 loan under paragraph (1):

24 (A) In the case of a marketing assistance

25 loan for a contract commodity, any production
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1 by a producer who has entered into a production

2 flexibility contract.

3 (B) In the case of a marketing assistance

4 loan for extra long staple cotton and oilseeds,

5 any production.

6 (3) RECOURSE LOANS FOR HIGH MOISTURE

7 FEED GRAINS.—

8 (A) RECOURSE LOANS AVAILABLE.—For

9 each of the 1996 through 2002 crops of corn and

10 grain sorghum, the Secretary shall make avail11 able recourse loans, as determined by the Sec12 retary, to producers on a farm who—

13 (i) normally harvest all or a portion of

14 their crop of corn or grain sorghum in a

15 high moisture state;

16 (ii) present—

17 (I) certified scale tickets from an

18 inspected, certified commercial scale,

19 including licensed warehouses, feedlots,

20 feed mills, distilleries, or other similar

21 entities approved by the Secretary,

22 pursuant to regulations issued by the

23 Secretary; or

24 (II) present field or other physical

25 measurements of the standing or stored
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1 crop in regions of the country, as de2 termined by the Secretary, that do not

3 have certified commercial scales from

4 which certified scale tickets may be ob5 tained within reasonable proximity of

6 harvest operation;

7 (iii) certify that they were the owners

8 of the feed grain at the time of delivery to,

9 and that the quantity to be placed under

10 loan under this paragraph was in fact har11 vested on the farm and delivered to, a feed12 lot, feed mill, or commercial or on-farm

13 high-moisture storage facility, or to such fa14 cilities maintained by the users of corn and

15 grain sorghum in a high moisture state;

16 and

17 (iv) comply with deadlines established

18 by the Secretary for harvesting the corn or

19 grain sorghum and submit applications for

20 loans under this paragraph within dead21 lines established by the Secretary.

22 (B) ELIGIBILITY OF ACQUIRED FEED

23 GRAINS.—Loans under this paragraph shall be

24 made on a quantity of corn or grain sorghum of
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1 the same crop acquired by the producer equiva2 lent to a quantity determined by multiplying—

3 (i) the acreage of the corn or grain sor4 ghum in a high moisture state harvested on

5 the producer’s farm; by

6 (ii) the lower of the farm program

7 payment yield or the actual yield on a field,

8 as determined by the Secretary, that is

9 similar to the field from which the corn or

10 grain sorghum was obtained.

11 (C) HIGH MOISTURE STATE DEFINED.—In

12 this paragraph, the term ‘‘high moisture state’’

13 means corn or grain sorghum having a moisture

14 content in excess of Commodity Credit Corpora15 tion standards for marketing assistance loans

16 made by the Secretary under paragraph (1).

17 (b) LOAN RATES.—

18 (1) WHEAT.—

19 (A) LOAN RATE.—Subject to subparagraph

20 (B), the loan rate for a marketing assistance

21 loan under subsection (a)(1) for wheat shall be—

22 (i) not less than 85 percent of the sim23 ple average price received by producers of

24 wheat, as determined by the Secretary, dur25 ing the marketing years for the immediately
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1 preceding 5 crops of wheat, excluding the

2 year in which the average price was the

3 highest and the year in which the average

4 price was the lowest in the period; but

5 (ii) not more than $2.58 per bushel.

6 (B) STOCKS TO USE RATIO ADJUSTMENT.—

7 If the Secretary estimates for any marketing

8 year that the ratio of ending stocks of wheat to

9 total use for the marketing year will be—

10 (i) equal to or greater than 30 percent,

11 the Secretary may reduce the loan rate for

12 wheat for the corresponding crop by an

13 amount not to exceed 10 percent in any

14 year;

15 (ii) less than 30 percent but not less

16 than 15 percent, the Secretary may reduce

17 the loan rate for wheat for the correspond18 ing crop by an amount not to exceed 5 per19 cent in any year; or

20 (iii) less than 15 percent, the Secretary

21 may not reduce the loan rate for wheat for

22 the corresponding crop.

23 (C) NO EFFECT ON FUTURE YEARS.—Any

24 reduction in the loan rate for wheat under sub25 paragraph (B) shall not be considered in deter-
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1 mining the loan rate for wheat for subsequent

2 years.

3 (2) FEED GRAINS.—

4 (A) LOAN RATE FOR CORN.—Subject to sub5 paragraph (B), the loan rate for a marketing as6 sistance loan under subsection (a)(1) for corn

7 shall be—

8 (i) not less than 85 percent of the sim9 ple average price received by producers of

10 corn, as determined by the Secretary, dur11 ing the marketing years for the immediately

12 preceding 5 crops of corn, excluding the

13 year in which the average price was the

14 highest and the year in which the average

15 price was the lowest in the period; but

16 (ii) not more than $1.89 per bushel.

17 (B) STOCKS TO USE RATIO ADJUSTMENT.—

18 If the Secretary estimates for any marketing

19 year that the ratio of ending stocks of corn to

20 total use for the marketing year will be—

21 (i) equal to or greater than 25 percent,

22 the Secretary may reduce the loan rate for

23 corn for the corresponding crop by an

24 amount not to exceed 10 percent in any

25 year;
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1 (ii) less than 25 percent but not less

2 than 12.5 percent, the Secretary may reduce

3 the loan rate for corn for the corresponding

4 crop by an amount not to exceed 5 percent

5 in any year; or

6 (iii) less than 12.5 percent the Sec7 retary may not reduce the loan rate for corn

8 for the corresponding crop.

9 (C) NO EFFECT ON FUTURE YEARS.—Any

10 reduction in the loan rate for corn under sub11 paragraph (B) shall not be considered in deter12 mining the loan rate for corn for subsequent

13 years.

14 (D) OTHER FEED GRAINS.—The loan rate

15 for a marketing assistance loan under subsection

16 (a)(1) for grain sorghum, barley, and oats, re17 spectively, shall be established at such level as the

18 Secretary determines is fair and reasonable in

19 relation to the rate that loans are made available

20 for corn, taking into consideration the feeding

21 value of the commodity in relation to corn.

22 (3) UPLAND COTTON.—

23 (A) LOAN RATE.—Subject to subparagraph

24 (B), the loan rate for a marketing assistance

25 loan under subsection (a)(1) for upland cotton
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1 shall be established by the Secretary at such loan

2 rate, per pound, as will reflect for the base qual3 ity of upland cotton, as determined by the Sec4 retary, at average locations in the United States

5 a rate that is not less than the smaller of—

6 (i) 85 percent of the average price

7 (weighted by market and month) of the base

8 quality of cotton as quoted in the designated

9 United States spot markets during 3 years

10 of the 5-year period ending July 31 in the

11 year in which the loan rate is announced,

12 excluding the year in which the average

13 price was the highest and the year in which

14 the average price was the lowest in the pe15 riod; or

16 (ii) 90 percent of the average, for the

17 15-week period beginning July 1 of the year

18 in which the loan rate is announced, of the

19 5 lowest-priced growths of the growths

quoted for Middling 13 20 ⁄32-inch cotton C.I.F.

21 Northern Europe (adjusted downward by

22 the average difference during the period

23 April 15 through October 15 of the year in

24 which the loan is announced between the av25 erage Northern European price quotation of
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1 such quality of cotton and the market

2 quotations in the designated United States

3 spot markets for the base quality of upland

4 cotton), as determined by the Secretary.

5 (B) LIMITATIONS.—The loan rate for a

6 marketing assistance loan for upland cotton shall

7 not be less than $0.50 per pound or more than

8 $0.5192 per pound.

9 (4) EXTRA LONG STAPLE COTTON.—The loan

10 rate for a marketing assistance loan under subsection

11 (a)(1) for extra long staple cotton shall be—

12 (A) not less than 85 percent of the simple

13 average price received by producers of extra long

14 staple cotton, as determined by the Secretary,

15 during 3 years of the 5 previous marketing

16 years, excluding the year in which the average

17 price was the highest and the year in which the

18 average price was the lowest in the period; but

19 (B) not more than $0.7965 per pound.

20 (5) RICE.—The loan rate for a marketing assist21 ance loan under subsection (a)(1) for rice shall be

22 $6.50 per hundredweight.

23 (6) OILSEEDS.—
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1 (A) SOYBEANS.—The loan rate for a mar2 keting assistance loan under subsection (a)(1) for

3 soybeans shall be $4.92 per bushel.

4 (B) SUNFLOWER SEED, CANOLA, RAPESEED,

5 SAFFLOWER, MUSTARD SEED, AND FLAXSEED.—

6 The loan rates for a marketing assistance loan

7 under subsection (a)(1) for sunflower seed,

8 canola, rapeseed, safflower, mustard seed, and

9 flaxseed, individually, shall be $0.087 per pound.

10 (C) OTHER OILSEEDS.—The loan rates for

11 a marketing assistance loan under subsection

12 (a)(1) for other oilseeds shall be established at

13 such level as the Secretary determines is fair and

14 reasonable in relation to the loan rate available

15 for soybeans, except in no event shall the rate for

16 the oilseeds (other than cottonseed) be less than

17 the rate established for soybeans on a per-pound

18 basis for the same crop.

19 (c) TERM OF LOAN.—In the case of each loan commod20 ity (other than upland cotton or extra long staple cotton),

21 a marketing assistance loan under subsection (a)(1) shall

22 have a term of 9 months beginning on the first day of the

23 first month after the month in which the loan is made. A

24 marketing assistance loan for upland cotton or extra long

25 staple cotton shall have a term of 10 months beginning on
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1 the first day of the first month after the month in which

2 the loan is made. The Secretary may not extend the term

3 of a marketing assistance loan for any loan commodity.

4 (d) REPAYMENT.—

5 (1) REPAYMENT RATES GENERALLY.—The Sec6 retary shall permit producers to repay a marketing

7 assistance loan under subsection (a)(1) for a loan

8 commodity (other than extra long staple cotton) at a

9 level that is the lesser of—

10 (A) the loan rate established for the com11 modity under subsection (b); or

12 (B) the prevailing world market price for

13 the commodity (adjusted to United States qual14 ity and location), as determined by the Sec15 retary.

16 (2) ADDITIONAL REPAYMENT RATES FOR WHEAT,

17 FEED GRAINS, AND OILSEEDS.—In the case of a mar18 keting assistance loan under subsection (a)(1) for

19 wheat, corn, grain sorghum, barley, oats, or oilseeds,

20 the Secretary shall also permit a producer to repay

21 the loan at such level as the Secretary determines

22 will—

23 (A) minimize potential loan forfeitures;

24 (B) minimize the accumulation of stocks of

25 the commodity by the Federal Government;
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1 (C) minimize the cost incurred by the Fed2 eral Government in storing the commodity; and

3 (D) allow the commodity produced in the

4 United States to be marketed freely and competi5 tively, both domestically and internationally.

6 (3) REPAYMENT RATES FOR EXTRA LONG STAPLE

7 COTTON.—Repayment of a marketing assistance loan

8 for extra long staple cotton shall be at the loan rate

9 established for the commodity under subsection (b),

10 plus interest (as determined by the Secretary).

11 (4) PREVAILING WORLD MARKET PRICE.—For

12 purposes of paragraph (1) and subsection (f), the Sec13 retary shall prescribe by regulation—

14 (A) a formula to determine the prevailing

15 world market price for each loan commodity, ad16 justed to United States quality and location; and

17 (B) a mechanism by which the Secretary

18 shall announce periodically the prevailing world

19 market price for each loan commodity.

20 (5) ADJUSTMENT OF PREVAILING WORLD MAR21 KET PRICE FOR UPLAND COTTON.—

22 (A) IN GENERAL.—During the period end23 ing July 31, 2003, the prevailing world market

24 price for upland cotton (adjusted to United
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1 States quality and location) established under

2 paragraph (4) shall be further adjusted if—

3 (i) the adjusted prevailing world mar4 ket price is less than 115 percent of the loan

5 rate for upland cotton established under

6 subsection (b), as determined by the Sec7 retary; and

8 (ii) the Friday through Thursday aver9 age price quotation for the lowest-priced

10 United States growth as quoted for Middling (M) 13 11 ⁄32-inch cotton delivered C.I.F.

12 Northern Europe is greater than the Friday

13 through Thursday average price of the 5

14 lowest-priced growths of upland cotton, as

quoted for Middling (M) 13 15 ⁄32-inch cotton,

16 delivered C.I.F. Northern Europe (referred

17 to in this subsection as the ‘‘Northern Eu18 rope price’’).

19 (B) FURTHER ADJUSTMENT.—Except as

20 provided in subparagraph (C), the adjusted pre21 vailing world market price for upland cotton

22 shall be further adjusted on the basis of some or

23 all of the following data, as available:

24 (i) The United States share of world

25 exports.
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1 (ii) The current level of cotton export

2 sales and cotton export shipments.

3 (iii) Other data determined by the Sec4 retary to be relevant in establishing an ac5 curate prevailing world market price for

6 upland cotton (adjusted to United States

7 quality and location).

8 (C) LIMITATION ON FURTHER ADJUST9 MENT.—The adjustment under subparagraph (B)

10 may not exceed the difference between—

11 (i) the Friday through Thursday aver12 age price for the lowest-priced United States

growth as quoted for Middling 13 13 ⁄32-inch

14 cotton delivered C.I.F. Northern Europe;

15 and

16 (ii) the Northern Europe price.

17 (e) LOAN DEFICIENCY PAYMENTS.—

18 (1) AVAILABILITY.—Except as provided in para19 graph (4), the Secretary may make loan deficiency

20 payments available to producers who, although eligi21 ble to obtain a marketing assistance loan under sub22 section (a)(1) with respect to a loan commodity, agree

23 to forgo obtaining the loan for the commodity in re24 turn for payments under this subsection.
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1 (2) COMPUTATION.—A loan deficiency payment

2 under this subsection shall be computed by multiply3 ing—

4 (A) the loan payment rate determined

5 under paragraph (3) for the loan commodity; by

6 (B) the quantity of the loan commodity that

7 the producers on a farm are eligible to place

8 under loan but for which the producers forgo ob9 taining the loan in return for payments under

10 this subsection.

11 (3) LOAN PAYMENT RATE.—For purposes of this

12 subsection, the loan payment rate shall be the amount

13 by which—

14 (A) the loan rate established under sub15 section (b) for the loan commodity; exceeds

16 (B) the rate at which a loan for the com17 modity may be repaid under subsection (d).

18 (4) EXCEPTION FOR EXTRA LONG STAPLE COT19 TON.—This subsection shall not apply with respect to

20 extra long staple cotton.

21 (f) SPECIAL MARKETING LOAN PROVISIONS FOR UP22 LAND COTTON.—

23 (1) COTTON USER MARKETING CERTIFICATES.—

24 (A) ISSUANCE.—Subject to subparagraph

25 (D), during the period ending July 31, 2003, the
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1 Secretary shall issue marketing certificates or

2 cash payments to domestic users and exporters

3 for documented purchases by domestic users and

4 sales for export by exporters made in the week

5 following a consecutive 4-week period in which—

6 (i) the Friday through Thursday aver7 age price quotation for the lowest-priced

8 United States growth, as quoted for Middling (M) 13 9 ⁄32-inch cotton, delivered C.I.F.

10 Northern Europe exceeds the Northern Eu11 rope price by more than 1.25 cents per

12 pound; and

13 (ii) the prevailing world market price

14 for upland cotton (adjusted to United States

15 quality and location) does not exceed 130

16 percent of the loan rate for upland cotton

17 established under subsection (b).

18 (B) VALUE OF CERTIFICATES OR PAY19 MENTS.—The value of the marketing certificates

20 or cash payments shall be based on the amount

21 of the difference (reduced by 1.25 cents per

22 pound) in the prices during the 4th week of the

23 consecutive 4-week period multiplied by the

24 quantity of upland cotton included in the docu25 mented sales.
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1 (C) REDEMPTION, MARKETING, OR EX2 CHANGE.—The Secretary shall establish proce3 dures to assist persons receiving marketing cer4 tificates under this paragraph in the redemption

5 of certificates for cash, or in the marketing or ex6 change of certificates for agricultural commod7 ities owned by the Commodity Credit Corpora8 tion, in such manner and at such price levels as

9 the Secretary determines will best effectuate the

10 purposes of the marketing certificates. Any price

11 restrictions that may otherwise apply to the dis12 position of agricultural commodities by the Com13 modity Credit Corporation shall not apply to the

14 redemption of certificates under this paragraph.

15 (D) EXCEPTION.—The Secretary shall not

16 issue marketing certificates or cash payments

17 under subparagraph (A) if, for the immediately

18 preceding consecutive 10-week period, the Friday

19 through Thursday average price quotation for the

20 lowest priced United States growth, as quoted for

Middling (M) 13 21 ⁄32-inch cotton, delivered C.I.F.

22 Northern Europe, adjusted for the value of any

23 certificate issued under this paragraph, exceeds

24 the Northern Europe price by more than 1.25

25 cents per pound.
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1 (E) LIMITATION ON EXPENDITURES.—Total

2 expenditures under this paragraph shall not ex3 ceed $701,000,000 during fiscal years 1996

4 through 2002.

5 (2) SPECIAL IMPORT QUOTA.—

6 (A) ESTABLISHMENT.—The President shall

7 carry out an import quota program that pro8 vides that, during the period ending July 31,

9 2003, whenever the Secretary determines and an10 nounces that for any consecutive 10-week period,

11 the Friday through Thursday average price

12 quotation for the lowest-priced United States

growth, as quoted for Middling (M) 13 13 ⁄32-inch

14 cotton, delivered C.I.F. Northern Europe, ad15 justed for the value of any certificates issued

16 under paragraph (1), exceeds the Northern Eu17 rope price by more than 1.25 cents per pound,

18 there shall immediately be in effect a special im19 port quota.

20 (B) QUANTITY.—The quota shall be equal to

21 1 week’s consumption of upland cotton by domes22 tic mills at the seasonally adjusted average rate

23 of the most recent 3 months for which data are

24 available.
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1 (C) APPLICATION.—The quota shall apply

2 to upland cotton purchased not later than 90

3 days after the date of the Secretary’s announce4 ment under subparagraph (A) and entered into

5 the United States not later than 180 days after

6 the date.

7 (D) OVERLAP.—A special quota period may

8 be established that overlaps any existing quota

9 period if required by subparagraph (A), except

10 that a special quota period may not be estab11 lished under this paragraph if a quota period

12 has been established under subsection (g).

13 (E) PREFERENTIAL TARIFF TREATMENT.—

14 The quantity under a special import quota shall

15 be considered to be an in-quota quantity for pur16 poses of—

17 (i) section 213(d) of the Caribbean

18 Basin Economic Recovery Act (19 U.S.C.

19 2703(d));

20 (ii) section 204 of the Andean Trade

21 Preference Act (19 U.S.C. 3203);

22 (iii) section 503(d) of the Trade Act of

23 1974 (19 U.S.C. 2463(d)); and

24 (iv) General Note 3(a)(iv) to the Har25 monized Tariff Schedule.
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1 (F) DEFINITION.—In this paragraph, the

2 term ‘‘special import quota’’ means a quantity of

3 imports that is not subject to the over-quota tar4 iff rate of a tariff-rate quota.

5 (g) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND

6 COTTON.—

7 (1) IN GENERAL.—The President shall carry out

8 an import quota program that provides that whenever

9 the Secretary determines and announces that the av10 erage price of the base quality of upland cotton, as de11 termined by the Secretary, in the designated spot

12 markets for a month exceeded 130 percent of the aver13 age price of such quality of cotton in the markets for

14 the preceding 36 months, notwithstanding any other

15 provision of law, there shall immediately be in effect

16 a limited global import quota subject to the following

17 conditions:

18 (A) QUANTITY.—The quantity of the quota

19 shall be equal to 21 days of domestic mill con20 sumption of upland cotton at the seasonally ad21 justed average rate of the most recent 3 months

22 for which data are available.

23 (B) QUANTITY IF PRIOR QUOTA.—If a quota

24 has been established under this subsection during

25 the preceding 12 months, the quantity of the
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1 quota next established under this subsection shall

2 be the smaller of 21 days of domestic mill con3 sumption calculated under subparagraph (A) or

4 the quantity required to increase the supply to

5 130 percent of the demand.

6 (C) PREFERENTIAL TARIFF TREATMENT.—

7 The quantity under a limited global import

8 quota shall be considered to be an in-quota quan9 tity for purposes of—

10 (i) section 213(d) of the Caribbean

11 Basin Economic Recovery Act (19 U.S.C.

12 2703(d));

13 (ii) section 204 of the Andean Trade

14 Preference Act (19 U.S.C. 3203);

15 (iii) section 503(d) of the Trade Act of

16 1974 (19 U.S.C. 2463(d)); and

17 (iv) General Note 3(a)(iv) to the Har18 monized Tariff Schedule.

19 (D) DEFINITIONS.—In this subsection:

20 (i) SUPPLY.—The term ‘‘supply’’

21 means, using the latest official data of the

22 Bureau of the Census, the Department of

23 Agriculture, and the Department of the

24 Treasury—
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1 (I) the carry-over of upland cotton

2 at the beginning of the marketing year

3 (adjusted to 480-pound bales) in which

4 the quota is established;

5 (II) production of the current

6 crop; and

7 (III) imports to the latest date

8 available during the marketing year.

9 (ii) DEMAND.—The term ‘‘demand’’

10 means—

11 (I) the average seasonally adjusted

12 annual rate of domestic mill consump13 tion in the most recent 3 months for

14 which data are available; and

15 (II) the larger of—

16 (aa) average exports of up17 land cotton during the preceding

18 6 marketing years; or

19 (bb) cumulative exports of

20 upland cotton plus outstanding

21 export sales for the marketing

22 year in which the quota is estab23 lished.

24 (iii) LIMITED GLOBAL IMPORT

25 QUOTA.—The term ‘‘limited global import
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1 quota’’ means a quantity of imports that is

2 not subject to the over-quota tariff rate of a

3 tariff-rate quota.

4 (E) QUOTA ENTRY PERIOD.—When a quota

5 is established under this subsection, cotton may

6 be entered under the quota during the 90-day pe7 riod beginning on the date the quota is estab8 lished by the Secretary.

9 (2) NO OVERLAP.—Notwithstanding paragraph

10 (1), a quota period may not be established that over11 laps an existing quota period or a special quota pe12 riod established under subsection (f)(2).

13 (h) SOURCE OF LOANS.—

14 (1) IN GENERAL.—The Secretary shall provide

15 the loans authorized by this section and the Agricul16 tural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.)

17 through the Commodity Credit Corporation and other

18 means available to the Secretary.

19 (2) PROCESSORS.—Whenever any loan or sur20 plus removal operation for any agricultural commod21 ity is carried out through purchases from or loans or

22 payments to processors, the Secretary shall, to the ex23 tent practicable, obtain from the processors such as24 surances as the Secretary considers adequate that the

25 producers of the commodity have received or will re-
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1 ceive maximum benefits from the loan or surplus re2 moval operation.

3 (i) ADJUSTMENTS OF LOANS.—

4 (1) IN GENERAL.—The Secretary may make ap5 propriate adjustments in the loan levels for any com6 modity for differences in grade, type, quality, loca7 tion, and other factors.

8 (2) LOAN LEVEL.—The adjustments shall, to the

9 maximum extent practicable, be made in such man10 ner that the average loan level for the commodity will,

11 on the basis of the anticipated incidence of the factors,

12 be equal to the level of support determined as pro13 vided in this section or the Agricultural Adjustment

14 Act of 1938 (7 U.S.C. 1281 et seq.).

15 (j) PERSONAL LIABILITY OF PRODUCERS FOR DEFI16 CIENCIES.—

17 (1) IN GENERAL.—Except as provided in para18 graph (2), no producer shall be personally liable for

19 any deficiency arising from the sale of the collateral

20 securing any nonrecourse loan made under this sec21 tion or the Agricultural Adjustment Act of 1938 (7

22 U.S.C. 1281 et seq.) unless the loan was obtained

23 through a fraudulent representation by the producer.

24 (2) LIMITATIONS.—Paragraph (1) shall not pre25 vent the Commodity Credit Corporation or the Sec-
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1 retary from requiring a producer to assume liability

2 for—

3 (A) a deficiency in the grade, quality, or

4 quantity of a commodity stored on a farm or de5 livered by the producer;

6 (B) a failure to properly care for and pre7 serve a commodity; or

8 (C) a failure or refusal to deliver a com9 modity in accordance with a program estab10 lished under this section or the Agricultural Ad11 justment Act of 1938.

12 (3) ACQUISITION OF COLLATERAL.—The Sec13 retary may include in a contract for a nonrecourse

14 loan made under this section or the Agricultural Ad15 justment Act of 1938 a provision that permits the

16 Commodity Credit Corporation, on and after the ma17 turity of the loan, to acquire title to the unredeemed

18 collateral without obligation to pay for any market

19 value that the collateral may have in excess of the

20 loan indebtedness.

21 (4) SUGARCANE AND SUGAR BEETS.—A security

22 interest obtained by the Commodity Credit Corpora23 tion as a result of the execution of a security agree24 ment by the processor of sugarcane or sugar beets

25 shall be superior to all statutory and common law
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1 liens on raw cane sugar and refined beet sugar in

2 favor of the producers of sugarcane and sugar beets

3 and all prior recorded and unrecorded liens on the

4 crops of sugarcane and sugar beets from which the

5 sugar was derived.

6 (k) COMMODITY CREDIT CORPORATION SALES PRICE

7 RESTRICTIONS.—

8 (1) IN GENERAL.—The Commodity Credit Cor9 poration may sell any commodity owned or controlled

10 by the Corporation at any price that the Secretary

11 determines will maximize returns to the Corporation.

12 (2) NONAPPLICATION OF SALES PRICE RESTRIC13 TIONS.—Paragraph (1) shall not apply to—

14 (A) a sale for a new or byproduct use;

15 (B) a sale of peanuts or oilseeds for the ex16 traction of oil;

17 (C) a sale for seed or feed if the sale will

18 not substantially impair any loan program;

19 (D) a sale of a commodity that has substan20 tially deteriorated in quality or as to which

21 there is a danger of loss or waste through deterio22 ration or spoilage;

23 (E) a sale for the purpose of establishing a

24 claim arising out of a contract or against a per25 son who has committed fraud, misrepresentation,
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1 or other wrongful act with respect to the com2 modity;

3 (F) a sale for export, as determined by the

4 Corporation; and

5 (G) a sale for other than a primary use.

6 (3) PRESIDENTIAL DISASTER AREAS.—

7 (A) IN GENERAL.—Notwithstanding para8 graph (1), on such terms and conditions as the

9 Secretary may consider in the public interest,

10 the Corporation may make available any com11 modity or product owned or controlled by the

12 Corporation for use in relieving distress—

13 (i) in any area in the United States

14 (including the Virgin Islands) declared by

15 the President to be an acute distress area

16 because of unemployment or other economic

17 cause, if the President finds that the use

18 will not displace or interfere with normal

19 marketing of agricultural commodities; and

20 (ii) in connection with any major dis21 aster determined by the President to war22 rant assistance by the Federal Government

23 under the Robert T. Stafford Disaster Relief

24 and Emergency Assistance Act (42 U.S.C.

25 5121 et seq.).
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1 (B) COSTS.—Except on a reimbursable

2 basis, the Corporation shall not bear any costs in

3 connection with making a commodity available

4 under subparagraph (A) beyond the cost of the

5 commodity to the Corporation incurred in—

6 (i) the storage of the commodity; and

7 (ii) the handling and transportation

8 costs in making delivery of the commodity

9 to designated agencies at 1 or more central

10 locations in each State or other area.

11 (4) EFFICIENT OPERATIONS.—Paragraph (1)

12 shall not apply to the sale of a commodity the dis13 position of which is desirable in the interest of the ef14 fective and efficient conduct of the operations of the

15 Corporation because of the small quantity of the com16 modity involved, or because of the age, location, or

17 questionable continued storability of the commodity.

18 SEC. 105. PAYMENT LIMITATIONS.

19 (a) IN GENERAL.—Section 1001 of the Food Security

20 Act of 1985 (7 U.S.C. 1308) is amended by striking para21 graphs (1) through (4) and inserting the following:

22 ‘‘(1) LIMITATION ON PAYMENTS UNDER PRODUC23 TION FLEXIBILITY CONTRACTS.—The total amount of

24 contract payments made under section 103 of the Ag25 ricultural Market Transition Act to a person under 1
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1 or more production flexibility contracts entered into

2 under the section during any fiscal year may not ex3 ceed $40,000.

4 ‘‘(2) LIMITATION ON MARKETING LOAN GAINS

5 AND LOAN DEFICIENCY PAYMENTS.—For each of the

6 1996 through 2002 crops of loan commodities, the

7 total amount of payments specified in paragraph (3)

8 that a person shall be entitled to receive under section

9 104 of the Agricultural Market Transition Act for one

10 or more loan commodities may not exceed $75,000.

11 ‘‘(3) DESCRIPTION OF PAYMENTS SUBJECT TO

12 LIMITATION.—The payments referred to in paragraph

13 (2) are the following:

14 ‘‘(A) Any gain realized by a producer from

15 repaying a marketing assistance loan for a crop

16 of any loan commodity at a lower level than the

17 original loan rate established for the loan com18 modity under section 104(b) of the Agricultural

19 Market Transition Act.

20 ‘‘(B) Any loan deficiency payment received

21 for a loan commodity under section 104(e) of the

22 Act.

23 ‘‘(4) DEFINITIONS.—In this title, the terms ‘con24 tract payment’ and ‘loan commodity’ have the mean-
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1 ing given those terms in section 102 of the Agricul2 tural Market Transition Act.’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) Section 1001A of the Food Security Act of

5 1985 (7 U.S.C. 1308–1) is amended—

6 (A) in subsection (a)(1), by striking ‘‘under

7 the Agricultural Act of 1949 (7 U.S.C. 1421 et

8 seq.)’’; and

9 (B) in subsection (b)(1), by striking ‘‘under

10 the Agricultural Act of 1949’’.

11 (2) Section 1001C(a) of the Act (7 U.S.C. 1308–

12 3(a)) is amended—

13 (A) by striking ‘‘For each of the 1991

14 through 1997 crops, any’’ and inserting ‘‘Any’’;

15 (B) by striking ‘‘production adjustment

16 payments, price support program loans, pay17 ments, or benefits made available under the Ag18 ricultural Act of 1949 (7 U.S.C. 1421 et seq.),’’

19 and inserting ‘‘loans or payments made avail20 able under title I of the Agricultural Market

21 Transition Act,’’; and

22 (C) by striking ‘‘during the 1989 through

23 1997 crop years’’.

24 SEC. 106. PEANUT PROGRAM.

25 (a) QUOTA PEANUTS.—
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1 (1) AVAILABILITY OF LOANS.—The Secretary

2 shall make nonrecourse loans available to producers of

3 quota peanuts.

4 (2) LOAN RATE.—The national average quota

5 loan rate for quota peanuts shall be $610 per ton.

6 (3) INSPECTION, HANDLING, OR STORAGE.—The

7 loan amount may not be reduced by the Secretary by

8 any deductions for inspection, handling, or storage.

9 (4) LOCATION AND OTHER FACTORS.—The Sec10 retary may make adjustments in the loan rate for

11 quota peanuts for location of peanuts and such other

12 factors as are authorized by section 411 of the Agri13 cultural Adjustment Act of 1938.

14 (5) OFFERS FROM HANDLERS.—In the case of

15 any producer who had an offer available from a han16 dler to purchase quota peanuts, for delivery within

17 the same county or a contiguous county, at a price

18 equal to or greater than the applicable quota support

19 rate, the Secretary shall reduce the support rate by 5

20 percent for the peanuts that were subject to the offer.

21 (b) ADDITIONAL PEANUTS.—

22 (1) IN GENERAL.—The Secretary shall make

23 nonrecourse loans available to producers of additional

24 peanuts at such rates as the Secretary finds appro25 priate, taking into consideration the demand for pea-
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1 nut oil and peanut meal, expected prices of other veg2 etable oils and protein meals, and the demand for

3 peanuts in foreign markets.

4 (2) ANNOUNCEMENT.—The Secretary shall an5 nounce the loan rate for additional peanuts of each

6 crop not later than February 15 preceding the mar7 keting year for the crop for which the loan rate is

8 being determined.

9 (c) AREA MARKETING ASSOCIATIONS.—

10 (1) WAREHOUSE STORAGE LOANS.—

11 (A) IN GENERAL.—In carrying out sub12 sections (a) and (b), the Secretary shall make

13 warehouse storage loans available in each of the

14 producing areas (described in section 1446.95 of

15 title 7 of the Code of Federal Regulations (Janu16 ary 1, 1989)) to a designated area marketing as17 sociation of peanut producers that is selected and

18 approved by the Secretary and that is operated

19 primarily for the purpose of conducting the loan

20 activities. The Secretary may not make ware21 house storage loans available to any cooperative

22 that is engaged in operations or activities con23 cerning peanuts other than those operations and

24 activities specified in this section and section
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1 358e of the Agricultural Adjustment Act of 1938

2 (7 U.S.C. 1359a).

3 (B) ADMINISTRATIVE AND SUPERVISORY AC4 TIVITIES.—An area marketing association shall

5 be used in administrative and supervisory ac6 tivities relating to loans and marketing activities

7 under this section and section 358e of the Agri8 cultural Adjustment Act of 1938 (7 U.S.C.

9 1359a).

10 (C) ASSOCIATION COSTS.—Loans made to

11 the association under this paragraph shall in12 clude such costs as the area marketing associa13 tion reasonably may incur in carrying out the

14 responsibilities, operations, and activities of the

15 association under this section and section 358e of

16 the Agricultural Adjustment Act of 1938 (7

17 U.S.C. 1359a).

18 (2) POOLS FOR QUOTA AND ADDITIONAL PEA19 NUTS.—

20 (A) IN GENERAL.—The Secretary shall re21 quire that each area marketing association estab22 lish pools and maintain complete and accurate

23 records by area and segregation for quota pea24 nuts handled under loan and for additional pea25 nuts placed under loan, except that separate
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1 pools shall be established for Valencia peanuts

2 produced in New Mexico. Bright hull and dark

3 hull Valencia peanuts shall be considered as sep4 arate types for the purpose of establishing the

5 pools.

6 (B) NET GAINS.—Net gains on peanuts in

7 each pool, unless otherwise approved by the Sec8 retary, shall be distributed only to producers who

9 placed peanuts in the pool and shall be distrib10 uted in proportion to the value of the peanuts

11 placed in the pool by each producer. Net gains

12 for peanuts in each pool shall consist of the fol13 lowing:

14 (i) QUOTA PEANUTS.—For quota pea15 nuts, the net gains over and above the loan

16 indebtedness and other costs or losses in17 curred on peanuts placed in the pool.

18 (ii) ADDITIONAL PEANUTS.—For addi19 tional peanuts, the net gains over and above

20 the loan indebtedness and other costs or

21 losses incurred on peanuts placed in the

22 pool for additional peanuts.

23 (d) LOSSES.—Losses in quota area pools shall be cov24 ered using the following sources in the following order of

25 priority:
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1 (1) TRANSFERS FROM ADDITIONAL LOAN

2 POOLS.—The proceeds due any producer from any

3 pool shall be reduced by the amount of any loss that

4 is incurred with respect to peanuts transferred from

5 an additional loan pool to a quota loan pool by the

6 producer under section 358–1(b)(8) of the Agricul7 tural Adjustment Act of 1938 (7 U.S.C. 1358–

8 1(b)(8)).

9 (2) OTHER PRODUCERS IN SAME POOL.—Further

10 losses in an area quota pool shall be offset by reduc11 ing the gain of any producer in the pool by the

12 amount of pool gains attributed to the same producer

13 from the sale of additional peanuts for domestic and

14 export edible use.

15 (3) BUY-BACK GAINS WITHIN AREA.—Further

16 losses in an area quota pool shall be offset by gains

17 or profits attributable to sales of additional peanuts

18 in that area pursuant to the provisions of section

19 358e(g)(1)(A) of the Agricultural Adjustment Act of

20 1938 (7 U.S.C. 1359a(g)(1)(A)).

21 (4) USE OF MARKETING ASSESSMENTS.—The

22 Secretary shall use funds collected under subsection

23 (g) (except funds attributable to handlers) to offset

24 further losses in area quota pools. The Secretary shall

25 transfer to the Treasury those funds collected under
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1 subsection (g) and available for use under this sub2 section that the Secretary determines are not required

3 to cover losses in area quota pools.

4 (5) CROSS COMPLIANCE.—Further losses in area

5 quota pools, other than losses incurred as a result of

6 transfers from additional loan pools to quota loan

7 pools under section 358–1(b)(8) of the Agricultural

8 Adjustment Act of 1938 (7 U.S.C. 1358–1(b)(8)), shall

9 be offset by any gains or profits from quota pools in

10 other production areas (other than separate type pools

11 established under subsection (c)(2)(A) for Valencia

12 peanuts produced in New Mexico) in such manner as

13 the Secretary shall by regulation prescribe. If losses in

14 area quota pools have not been entirely offset through

15 use of the preceding sentence, then further losses shall

16 be offset by gains or profits attributable to sales of ad17 ditional peanuts in other areas pursuant to section

18 358e(g)(1)(A) of such Act (7 U.S.C. 1359a(g)(1)(A)).

19 (6) INCREASED ASSESSMENTS.—If use of the au20 thorities provided in the preceding paragraphs is not

21 sufficient to cover losses in an area quota pool, the

22 Secretary shall increase the marketing assessment es23 tablished under subsection (g) by such an amount as

24 the Secretary considers necessary to cover the losses.

25 The increased assessment shall apply only to quota
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1 peanuts covered by that pool. Amounts collected under

2 subsection (g) as a result of the increased assessment

3 shall be retained by the Secretary to cover losses in

4 that pool.

5 (e) DISAPPROVAL OF QUOTAS.—Notwithstanding any

6 other provision of law, no loan for quota peanuts may be

7 made available by the Secretary for any crop of peanuts

8 with respect to which poundage quotas have been dis9 approved by producers, as provided for in section 358–1(d)

10 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–

11 1(d)).

12 (f) QUALITY IMPROVEMENT.—

13 (1) IN GENERAL.—With respect to peanuts under

14 loan, the Secretary shall—

15 (A) promote the crushing of peanuts at a

16 greater risk of deterioration before peanuts of a

17 lesser risk of deterioration;

18 (B) ensure that all Commodity Credit Cor19 poration inventories of peanuts sold for domestic

20 edible use must be shown to have been officially

21 inspected by licensed Department inspectors both

22 as farmer stock and shelled or cleaned in-shell

23 peanuts;

24 (C) continue to endeavor to operate the pea25 nut program so as to improve the quality of do-
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1 mestic peanuts and ensure the coordination of

2 activities under the Peanut Administrative Com3 mittee established under Marketing Agreement

4 No. 146, regulating the quality of domestically

5 produced peanuts (under the Agricultural Ad6 justment Act (7 U.S.C. 601 et seq.), reenacted

7 with amendments by the Agricultural Marketing

8 Agreement Act of 1937); and

9 (D) ensure that any changes made in the

10 peanut program as a result of this subsection re11 quiring additional production or handling at the

12 farm level shall be reflected as an upward adjust13 ment in the Department loan schedule.

14 (2) EXPORTS AND OTHER PEANUTS.—The Sec15 retary shall require that all peanuts in the domestic

16 and export markets fully comply with all quality

17 standards under Marketing Agreement No. 146.

18 (g) MARKETING ASSESSMENT.—

19 (1) IN GENERAL.—The Secretary shall provide

20 for a nonrefundable marketing assessment. The assess21 ment shall be made on a per pound basis in an

22 amount equal to 1.1 percent for each of the 1994 and

23 1995 crops, 1.15 percent for the 1996 crop, and 1.2

24 percent for each of the 1997 through 2002 crops, of the
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1 national average quota or additional peanut loan rate

2 for the applicable crop.

3 (2) FIRST PURCHASERS.—

4 (A) IN GENERAL.—Except as provided

5 under paragraphs (3) and (4), the first pur6 chaser of peanuts shall—

7 (i) collect from the producer a market8 ing assessment equal to the quantity of pea9 nuts acquired multiplied by—

10 (I) in the case of each of the 1994

11 and 1995 crops, .55 percent of the ap12 plicable national average loan rate;

13 (II) in the case of the 1996 crop,

14 .6 percent of the applicable national

15 average loan rate; and

16 (III) in the case of each of the

17 1997 through 2002 crops, .65 percent

18 of the applicable national average loan

19 rate;

20 (ii) pay, in addition to the amount

21 collected under clause (i), a marketing as22 sessment in an amount equal to the quan23 tity of peanuts acquired multiplied by .55

24 percent of the applicable national average

25 loan rate; and
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1 (iii) remit the amounts required under

2 clauses (i) and (ii) to the Commodity Credit

3 Corporation in a manner specified by the

4 Secretary.

5 (B) DEFINITION OF FIRST PURCHASER.—In

6 this subsection, the term ‘‘first purchaser’’ means

7 a person acquiring peanuts from a producer ex8 cept that in the case of peanuts forfeited by a

9 producer to the Commodity Credit Corporation,

10 the term means the person acquiring the peanuts

11 from the Commodity Credit Corporation.

12 (3) OTHER PRIVATE MARKETINGS.—In the case

13 of a private marketing by a producer directly to a

14 consumer through a retail or wholesale outlet or in

15 the case of a marketing by the producer outside of the

16 continental United States, the producer shall be re17 sponsible for the full amount of the assessment and

18 shall remit the assessment by such time as is specified

19 by the Secretary.

20 (4) LOAN PEANUTS.—In the case of peanuts that

21 are pledged as collateral for a loan made under this

section, 1 22 ⁄2 of the assessment shall be deducted from

23 the proceeds of the loan. The remainder of the assess24 ment shall be paid by the first purchaser of the pea25 nuts. For purposes of computing net gains on peanuts
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1 under this section, the reduction in loan proceeds

2 shall be treated as having been paid to the producer.

3 (5) PENALTIES.—If any person fails to collect or

4 remit the reduction required by this subsection or

5 fails to comply with the requirements for record6 keeping or otherwise as are required by the Secretary

7 to carry out this subsection, the person shall be liable

8 to the Secretary for a civil penalty up to an amount

9 determined by multiplying—

10 (A) the quantity of peanuts involved in the

11 violation; by

12 (B) the national average quota peanut rate

13 for the applicable crop year.

14 (6) ENFORCEMENT.—The Secretary may enforce

15 this subsection in the courts of the United States.

16 (h) CROPS.—Subsections (a) through (f) shall be effec17 tive only for the 1996 through 2002 crops of peanuts.

18 (i) MARKETING QUOTAS.—

19 (1) IN GENERAL.—Part VI of subtitle B of title

20 III of the Agricultural Adjustment Act of 1938 is

21 amended—

22 (A) in section 358–1 (7 U.S.C. 1358–1)—

23 (i) in the section heading, by striking

24 ‘‘1991 THROUGH 1997 CROPS OF’’;
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1 (ii) in subsections (a)(1), (b)(1)(B),

2 (b)(2)(A), (b)(2)(C), and (b)(3)(A), by strik3 ing ‘‘of the 1991 through 1997 marketing

4 years’’ each place it appears and inserting

5 ‘‘marketing year’’;

6 (iii) in subsection (a)(3), by striking

7 ‘‘1990’’ and inserting ‘‘1990, for the 1991

8 through 1995 marketing years, and 1995,

9 for the 1996 through 2002 marketing

10 years’’;

11 (iv) in subsection (b)(1)(A)—

12 (I) by striking ‘‘each of the 1991

13 through 1997 marketing years’’ and

14 inserting ‘‘each marketing year’’; and

15 (II) in clause (i), by inserting be16 fore the semicolon the following: ‘‘, in

17 the case of the 1991 through 1995 mar18 keting years, and the 1995 marketing

19 year, in the case of the 1996 through

20 2002 marketing years’’; and

21 (v) in subsection (f), by striking

22 ‘‘1997’’ and inserting ‘‘2002’’;

23 (B) in section 358b (7 U.S.C. 1358b)—

24 (i) in the section heading, by striking

25 ‘‘1991 THROUGH 1995 CROPS OF’’; and
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1 (ii) in subsection (c), by striking

2 ‘‘1995’’ and inserting ‘‘2002’’;

3 (C) in section 358c(d) (7 U.S.C. 1358c(d)),

4 by striking ‘‘1995’’ and inserting ‘‘2002’’; and

5 (D) in section 358e (7 U.S.C. 1359a)—

6 (i) in the section heading, by striking

7 ‘‘FOR 1991 THROUGH 1997 CROPS OF

8 PEANUTS’’; and

9 (ii) in subsection (i), by striking

10 ‘‘1997’’ and inserting ‘‘2002’’.

11 (2) ELIGIBILITY FOR FARM POUNDAGE QUOTA.—

12 (A) CERTAIN FARMS INELIGIBLE.—Section

13 358–1(b)(1) of the Act (7 U.S.C. 1358–1(b)(1)) is

14 amended by adding at the end the following:

15 ‘‘(D) CERTAIN FARMS INELIGIBLE TO HOLD

16 QUOTA.—Effective beginning with the 1997 mar17 keting year, the Secretary shall no longer estab18 lish farm poundage quotas under subparagraph

19 (A) for farms—

20 ‘‘(i) owned or controlled by munici21 palities, airport authorities, schools, col22 leges, refuges, and other public entities (not

23 including universities for research pur24 poses); or
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1 ‘‘(ii) owned or controlled by a person

2 who is not a producer and resides in an3 other State.’’.

4 (B) ALLOCATION OF QUOTA TO OTHER

5 FARMS.—Section 358–1(b)(2) of the Act (7

6 U.S.C. 1358–1(b)(2)) is amended by adding at

7 the end the following:

8 ‘‘(E) TRANSFER OF QUOTA FROM INELI9 GIBLE FARMS.—Any farm poundage quota held

10 at the end of the 1996 marketing year by a farm

11 described in paragraph (1)(D) shall be allocated

12 to other farms in the same State on such basis

13 as the Secretary may by regulation prescribe.’’.

14 (3) ELIMINATION OF QUOTA FLOOR.—Section

15 358–1(a)(1) of the Act (7 U.S.C. 1358–1(a)(1)) is

16 amended by striking the second sentence.

17 (4) TEMPORARY QUOTA ALLOCATION.—Section

18 358–1 of the Act (7 U.S.C. 1358–1) is amended—

19 (A) in subsection (a)(1), by striking ‘‘do20 mestic edible, seed,’’ and inserting ‘‘domestic edi21 ble use’’;

22 (B) in subsection (b)(2)—

23 (i) in subparagraph (A), by striking

24 ‘‘subparagraph (B) and subject to’’; and
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1 (ii) by striking subparagraph (B) and

2 inserting the following:

3 ‘‘(B) TEMPORARY QUOTA ALLOCATION.—

4 ‘‘(i) ALLOCATION RELATED TO SEED

5 PEANUTS.—Temporary allocation of quota

6 pounds for the marketing year only in

7 which the crop is planted shall be made to

8 producers for each of the 1996 through 2002

9 marketing years as provided in this sub10 paragraph.

11 ‘‘(ii) QUANTITY.—The temporary quota

12 allocation shall be equal to the pounds of

13 seed peanuts planted on the farm, as may

14 be adjusted under regulations prescribed by

15 the Secretary.

16 ‘‘(iii) ADDITIONAL QUOTA.—The tem17 porary allocation of quota pounds under

18 this paragraph shall be in addition to the

19 farm poundage quota otherwise established

20 under this subsection and shall be credited,

21 for the applicable marketing year only, in

22 total to the producer of the peanuts on the

23 farm in a manner prescribed by the Sec24 retary.
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1 ‘‘(iv) EFFECT OF OTHER REQUIRE2 MENTS.—Nothing in this section alters or

3 changes the requirements regarding the use

4 of quota and additional peanuts established

5 by section 358e(b).’’; and

6 (C) in subsection (e)(3), strike ‘‘and seed

7 and use on a farm’’.

8 (5) SPRING AND FALL TRANSFERS WITHIN A

9 STATE.—Section 358b(a)(1) of the Act (7 U.S.C.

10 1358b(a)(1)) is amended—

11 (A) by striking ‘‘, conditions, or limita12 tions’’ in the matter preceding the subpara13 graphs and inserting ‘‘and conditions’’;

14 (B) by striking ‘‘any such lease’’ in the

15 matter preceding the subparagraphs and insert16 ing ‘‘any such sale or lease’’; and

17 (C) by striking ‘‘in the fall or after the nor18 mal planting season—’’ and subparagraphs (A)

19 and (B) and inserting the following: ‘‘in the

20 spring (or before the normal planting season) or

21 in the fall (or after the normal planting season)

22 with the owner or operator of a farm located

23 within any county in the same State. In the case

24 of a fall transfer or a transfer after the normal

25 planting season, the transfer may be made only
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1 if not less than 90 percent of the basic quota (the

2 farm quota exclusive of temporary quota trans3 fers), plus any poundage quota transferred to the

4 farm under this subsection, has been planted or

5 considered planted on the farm from which the

6 quota is to be leased.’’.

7 (6) UNDERMARKETINGS.—Part VI of subtitle B

8 of title III of the Act is amended—

9 (A) in section 358–1(b) (7 U.S.C. 1358–

10 1(b))—

11 (i) in paragraph (1)(B), by striking

12 ‘‘including—’’ and clauses (i) and (ii) and

13 inserting ‘‘including any increases resulting

14 from the allocation of quotas voluntarily re15 leased for 1 year under paragraph (7).’’;

16 (ii) in paragraph (3)(B), by striking

17 ‘‘include—’’ and clauses (i) and (ii) and

18 inserting ‘‘include any increase resulting

19 from the allocation of quotas voluntarily re20 leased for 1 year under paragraph (7).’’;

21 and

22 (iii) by striking paragraphs (8) and

23 (9); and

24 (B) in section 358b(a) (7 U.S.C.

25 1358b(a))—
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1 (i) in paragraph (1), by striking ‘‘(in2 cluding any applicable under marketings)’’

3 both places it appears;

4 (ii) in paragraph (2), by striking ‘‘(in5 cluding any applicable under marketings)’’;

6 and

7 (iii) in paragraph (3), by striking

8 ‘‘(including any applicable

9 undermarketings)’’.

10 (7) DISASTER TRANSFERS.—Section 358–1(b) of

11 the Act (7 U.S.C. 1358–1(b)), as amended by para12 graph (6)(A)(iii), is further amended by adding at

13 the end the following:

14 ‘‘(8) DISASTER TRANSFERS.—

15 ‘‘(A) IN GENERAL.—Except as provided in

16 subparagraph (B), additional peanuts produced

17 on a farm from which the quota poundage was

18 not harvested and marketed because of drought,

19 flood, or any other natural disaster, or any other

20 condition beyond the control of the producer,

21 may be transferred to the quota loan pool for

22 pricing purposes on such basis as the Secretary

23 shall by regulation provide.
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1 ‘‘(B) LIMITATION.—The poundage of pea2 nuts transferred under subparagraph (A) shall

3 not exceed the difference between—

4 ‘‘(i) the total quantity of peanuts meet5 ing quality requirements for domestic edible

6 use, as determined by the Secretary, mar7 keted from the farm; and

8 ‘‘(ii) the total farm poundage quota,

9 excluding quota pounds transferred to the

10 farm in the fall.

11 ‘‘(C) SUPPORT RATE.—Peanuts transferred

12 under this paragraph shall be supported at 70

13 percent of the quota support rate for the market14 ing years in which the transfers occur. The

15 transfers for a farm shall not exceed 25 percent

16 of the total farm quota pounds, excluding pounds

17 transferred in the fall.’’.

18 SEC. 107. SUGAR PROGRAM.

19 (a) SUGARCANE.—The Secretary shall make loans

20 available to processors of domestically grown sugarcane at

21 a rate equal to 18 cents per pound for raw cane sugar.

22 (b) SUGAR BEETS.—The Secretary shall make loans

23 available to processors of domestically grown sugar beets at

24 a rate equal to 22.9 cents per pound for refined beet sugar.

25 (c) REDUCTION IN LOAN RATES.—
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1 (1) REDUCTION REQUIRED.—The Secretary shall

2 reduce the loan rate specified in subsection (a) for do3 mestically grown sugarcane and subsection (b) for do4 mestically grown sugar beets if the Secretary deter5 mines that negotiated reductions in export subsidies

6 and domestic subsidies provided for sugar of the Eu7 ropean Union and other major sugar growing, pro8 ducing, and exporting countries in the aggregate ex9 ceed the commitments made as part of the Agreement

10 on Agriculture.

11 (2) EXTENT OF REDUCTION.—The Secretary

12 shall not reduce the loan rate under subsection (a) or

13 (b) below a rate that provides an equal measure of

14 support to that provided by the European Union and

15 other major sugar growing, producing, and exporting

16 countries, based on an examination of both domestic

17 and export subsidies subject to reduction in the Agree18 ment on Agriculture.

19 (3) ANNOUNCEMENT OF REDUCTION.—The Sec20 retary shall announce any loan rate reduction to be

21 made under this subsection as far in advance as is

22 practicable.

23 (4) MAJOR SUGAR COUNTRIES DEFINED.—For

24 purposes of this subsection, the term ‘‘major sugar
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1 growing, producing, and exporting countries’’

2 means—

3 (A) the countries of the European Union;

4 and

5 (B) the ten foreign countries not covered by

6 subparagraph (A) that the Secretary determines

7 produce the greatest amount of sugar.

8 (5) AGREEMENT ON AGRICULTURE DEFINED.—

9 For purposes of this subsection, the term ‘‘Agreement

10 on Agriculture’’ means the Agreement on Agriculture

11 referred to in section 101(d)(2) of the Uruguay Round

12 Agreements Act (19 U.S.C. 3511(d)(2)).

13 (d) TERM OF LOANS.—

14 (1) IN GENERAL.—Loans under this section dur15 ing any fiscal year shall be made available not earlier

16 than the beginning of the fiscal year and shall mature

17 at the earlier of—

18 (A) the end of 9 months; or

19 (B) the end of the fiscal year.

20 (2) SUPPLEMENTAL LOANS.—In the case of loans

21 made under this section in the last 3 months of a fis22 cal year, the processor may repledge the sugar as col23 lateral for a second loan in the subsequent fiscal year,

24 except that the second loan shall—
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1 (A) be made at the loan rate in effect at the

2 time the second loan is made; and

3 (B) mature in 9 months less the quantity of

4 time that the first loan was in effect.

5 (e) LOAN TYPE; PROCESSOR ASSURANCES.—

6 (1) RECOURSE LOANS.—Subject to paragraph

7 (2), the Secretary shall carry out this section through

8 the use of recourse loans.

9 (2) NONRECOURSE LOANS.—During any fiscal

10 year in which the tariff rate quota for imports of

11 sugar into the United States is established at, or is

12 increased to, a level in excess of 1,500,000 short tons

13 raw value, the Secretary shall carry out this section

14 by making available nonrecourse loans. Any recourse

15 loan previously made available by the Secretary

16 under this section during the fiscal year shall be

17 changed by the Secretary into a nonrecourse loan.

18 (3) PROCESSOR ASSURANCES.—If the Secretary

19 is required under paragraph (2) to make nonrecourse

20 loans available during a fiscal year or to change re21 course loans into nonrecourse loans, the Secretary

22 shall obtain from each processor that receives a loan

23 under this section such assurances as the Secretary

24 considers adequate to ensure that the processor will

25 provide payments to producers that are proportional
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1 to the value of the loan received by the processor for

2 sugar beets and sugarcane delivered by producers

3 served by the processor. The Secretary may establish

4 appropriate minimum payments for purposes of this

5 paragraph.

6 (f) MARKETING ASSESSMENT.—

7 (1) SUGARCANE.—Effective for marketings of

8 raw cane sugar during the 1996 through 2003 fiscal

9 years, the first processor of sugarcane shall remit to

10 the Commodity Credit Corporation a nonrefundable

11 marketing assessment in an amount equal to—

12 (A) in the case of marketings during fiscal

13 year 1996, 1.1 percent of the loan rate estab14 lished under subsection (a) per pound of raw

15 cane sugar, processed by the processor from do16 mestically produced sugarcane or sugarcane mo17 lasses, that has been marketed (including the

18 transfer or delivery of the sugar to a refinery for

19 further processing or marketing); and

20 (B) in the case of marketings during each

21 of fiscal years 1997 through 2003, 1.375 percent

22 of the loan rate established under subsection (a)

23 per pound of raw cane sugar, processed by the

24 processor from domestically produced sugarcane

25 or sugarcane molasses, that has been marketed
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1 (including the transfer or delivery of the sugar

2 to a refinery for further processing or market3 ing).

4 (2) SUGAR BEETS.—Effective for marketings of

5 beet sugar during the 1996 through 2003 fiscal years,

6 the first processor of sugar beets shall remit to the

7 Commodity Credit Corporation a nonrefundable mar8 keting assessment in an amount equal to—

9 (A) in the case of marketings during fiscal

10 year 1996, 1.1794 percent of the loan rate estab11 lished under subsection (a) per pound of beet

12 sugar, processed by the processor from domesti13 cally produced sugar beets or sugar beet molas14 ses, that has been marketed; and

15 (B) in the case of marketings during each

16 of fiscal years 1997 through 2003, 1.47425 per17 cent of the loan rate established under subsection

18 (a) per pound of beet sugar, processed by the

19 processor from domestically produced sugar beets

20 or sugar beet molasses, that has been marketed.

21 (3) COLLECTION.—

22 (A) TIMING.—A marketing assessment re23 quired under this subsection shall be collected on

24 a monthly basis and shall be remitted to the

25 Commodity Credit Corporation not later than 30
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1 days after the end of each month. Any cane

2 sugar or beet sugar processed during a fiscal

3 year that has not been marketed by September

4 30 of the year shall be subject to assessment on

5 that date. The sugar shall not be subject to a sec6 ond assessment at the time that it is marketed.

7 (B) MANNER.—Subject to subparagraph

8 (A), marketing assessments shall be collected

9 under this subsection in the manner prescribed

10 by the Secretary and shall be nonrefundable.

11 (4) PENALTIES.—If any person fails to remit the

12 assessment required by this subsection or fails to com13 ply with such requirements for recordkeeping or other14 wise as are required by the Secretary to carry out

15 this subsection, the person shall be liable to the Sec16 retary for a civil penalty up to an amount deter17 mined by multiplying—

18 (A) the quantity of cane sugar or beet sugar

19 involved in the violation; by

20 (B) the loan rate for the applicable crop of

21 sugarcane or sugar beets.

22 (5) ENFORCEMENT.—The Secretary may enforce

23 this subsection in a court of the United States.

24 (g) FORFEITURE PENALTY.—
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1 (1) IN GENERAL.—A penalty shall be assessed on

2 the forfeiture of any sugar pledged as collateral for a

3 nonrecourse loan under this section.

4 (2) CANE SUGAR.—The penalty for cane sugar

5 shall be 1 cent per pound.

6 (3) BEET SUGAR.—The penalty for beet sugar

7 shall bear the same relation to the penalty for cane

8 sugar as the marketing assessment for sugar beets

9 bears to the marketing assessment for sugarcane.

10 (4) EFFECT OF FORFEITURE.—Any payments

11 owed producers by a processor that forfeits of any

12 sugar pledged as collateral for a nonrecourse loan

13 shall be reduced in proportion to the loan forfeiture

14 penalty incurred by the processor.

15 (h) INFORMATION REPORTING.—

16 (1) DUTY OF PROCESSORS AND REFINERS TO RE17 PORT.—A sugarcane processor, cane sugar refiner,

18 and sugar beet processor shall furnish the Secretary,

19 on a monthly basis, such information as the Secretary

20 may require to administer sugar programs, including

21 the quantity of purchases of sugarcane, sugar beets,

22 and sugar, and production, importation, distribution,

23 and stock levels of sugar.

24 (2) PENALTY.—Any person willfully failing or

25 refusing to furnish the information, or furnishing
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1 willfully any false information, shall be subject to a

2 civil penalty of not more than $10,000 for each such

3 violation.

4 (3) MONTHLY REPORTS.—Taking into consider5 ation the information received under paragraph (1),

6 the Secretary shall publish on a monthly basis com7 posite data on production, imports, distribution, and

8 stock levels of sugar.

9 (i) MARKETING ALLOTMENTS.—Part VII of subtitle B

10 of title III of the Agricultural Adjustment Act of 1938 (7

11 U.S.C. 1359aa et seq.) is repealed.

12 (j) CROPS.—This section (other than subsection (i))

13 shall be effective only for the 1996 through 2002 crops of

14 sugar beets and sugarcane.

15 SEC. 108. ADMINISTRATION.

16 (a) COMMODITY CREDIT CORPORATION.—

17 (1) USE OF CORPORATION.—The Secretary shall

18 carry out this title through the Commodity Credit

19 Corporation.

20 (2) PROHIBITION ON SALARIES AND EX21 PENSES.—Notwithstanding any other provision of

22 law, no funds of the Corporation shall be used for any

23 salary or expense of any officer or employee of the De24 partment of Agriculture.
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1 (b) DETERMINATIONS BY SECRETARY.—A determina2 tion made by the Secretary under this title or the Agricul3 tural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) shall

4 be final and conclusive.

5 (c) REGULATIONS.—The Secretary may issue such reg6 ulations as the Secretary determines necessary to carry out

7 this title.

8 SEC. 109. ELIMINATION OF PERMANENT PRICE SUPPORT

9 AUTHORITY.

10 (a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—The

11 Agricultural Adjustment Act of 1938 is amended—

12 (1) in title III—

13 (A) in subtitle B—

14 (i) by striking parts II through V (7

15 U.S.C. 1326–1351); and

16 (ii) in part VI—

17 (I) by moving subsection (c) of

18 section 358d (7 U.S.C. 1358d(c)) to

19 appear after section 301(b)(17) (7

20 U.S.C. 1301(b)(17)), redesignating the

21 subsection as paragraph (18), and

22 moving the margin of the paragraph 2

23 ems to the right; and
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1 (II) by striking sections 358,

2 358a, and 358d (7 U.S.C. 1358, 1358a,

3 and 1359); and

4 (B) by striking subtitle D (7 U.S.C. 1379a–

5 1379j); and

6 (2) by striking title IV (7 U.S.C. 1401–1407).

7 (b) AGRICULTURAL ACT OF 1949.—

8 (1) TRANSFER OF CERTAIN SECTIONS.—The Ag9 ricultural Act of 1949 is amended—

10 (A) by transferring sections 106, 106A, and

11 106B (7 U.S.C. 1445, 1445–1, 1445–2) to appear

12 after section 314A of the Agricultural Adjust13 ment Act of 1938 (7 U.S.C. 1314–1) and redesig14 nating the transferred sections as sections 315,

15 315A, and 315B, respectively;

16 (B) by transferring section 111 (7 U.S.C.

17 1445f) to appear after section 304 of the Agricul18 tural Adjustment Act of 1938 (7 U.S.C. 1304)

19 and redesignating the transferred section as sec20 tion 305; and

21 (C) by transferring sections 404 and 416 (7

22 U.S.C. 1424 and 1431) to appear after section

23 390 of the Agricultural Adjustment Act of 1938

24 (7 U.S.C. 1390) and redesignating the trans-
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1 ferred sections as sections 390A and 390B, re2 spectively.

3 (2) REPEAL.—The Agricultural Act of 1949 (7

4 U.S.C. 1421 et seq.) (as amended by paragraph (1))

5 is repealed.

6 (c) CONFORMING AMENDMENTS.—

7 (1) Section 361 of the Agricultural Adjustment

8 Act of 1938 (7 U.S.C. 1361) is amended by striking

9 ‘‘, corn, wheat, cotton, peanuts, and rice, established’’.

10 (2) Section 371 of the Agricultural Adjustment

11 Act of 1938 (7 U.S.C. 1371) is amended—

12 (A) in the first sentence of subsection (a), by

13 striking ‘‘cotton, rice, peanuts, or’’; and

14 (B) in the first sentence of subsection (b), by

15 striking ‘‘cotton, rice, peanuts or’’.

16 SEC. 110. EFFECT OF AMENDMENTS.

17 (a) EFFECT ON PRIOR CROPS.—Except as otherwise

18 specifically provided and notwithstanding any other provi19 sion of law, this title and the amendments made by this

20 title shall not affect the authority of the Secretary to carry

21 out a price support or production adjustment program for

22 any of the 1991 through 1995 crops of an agricultural com23 modity established under a provision of law in effect imme24 diately before the date of the enactment of this Act.
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1 (b) LIABILITY.—A provision of this title or an amend2 ment made by this title shall not affect the liability of any

3 person under any provision of law as in effect before the

4 date of the enactment of this Act.

5 TITLE II—DAIRY

6 Subtitle A—Milk Price Support and

7 Other Activities

8 SEC. 201. MILK PRICE SUPPORT PROGRAM.

9 (a) SUPPORT ACTIVITIES.—To replace the milk price

10 support program established under section 204 of the Agri11 cultural Act of 1949 (7 U.S.C. 1446e), which is repealed

12 by section 109(b)(2)), the Secretary of Agriculture shall use

13 the authority provided in this section to support the price

14 of milk produced in the 48 contiguous States through the

15 purchase of cheddar cheese produced from such milk. Until

16 the first day of the first month beginning not less than 30

17 days after the date of the enactment of this Act, the Sec18 retary also may support the price of milk under this section

19 through the purchase of butter and nonfat dry milk pro20 duced from milk produced in the 48 contiguous States.

21 (b) RATE.—The price of milk shall be supported at the

22 following rates per hundredweight for milk containing 3.67

23 percent butterfat:

24 (1) During calendar year 1996, not less than

25 $10.35.
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1 (2) During calendar year 1997, not less than

2 $10.25.

3 (3) During calendar year 1998, not less than

4 $10.15.

5 (4) During calendar year 1999, not less than

6 $10.05.

7 (5) During calendar year 2000, not less than

8 $9.95.

9 (6) During calendar years 2001 and 2002, not

10 less than $9.85.

11 (c) BID PRICES.—The Commodity Credit Corporation

12 support purchase prices under this section for cheddar

13 cheese (and for butter and nonfat dry milk subject to sub14 section (a)) announced by the Corporation shall be the same

15 for all of that milk product sold by persons offering to sell

16 the product to the Corporation. The purchase prices shall

17 be sufficient to enable plants of average efficiency to pay

18 producers, on average, a price not less than the rate of price

19 support for milk in effect during a 12-month period under

20 this section.

21 (d) USE OF COMMODITY CREDIT CORPORATION.—The

22 Secretary shall use the funds, facilities, and authorities of

23 the Commodity Credit Corporation to carry out this section.

24 (e) RESIDUAL AUTHORITY FOR REFUND OF BUDGET

25 DEFICIT ASSESSMENTS.—
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1 (1) APPLICATION OF SUBSECTION.—This sub2 section shall apply with respect to the reductions

3 made under subsection (h)(2) of section 204 of the Ag4 ricultural Act of 1949, as in effect on the day before

5 the date of the enactment of this Act, in the price of

6 milk received by producers during calendar years

7 1995 and 1996.

8 (2) REFUND REQUIRED.—The Secretary shall

9 provide a refund of the entire reduction made under

10 such subsection (h)(2) in the price of milk received by

11 a producer during a calendar year referred to in

12 paragraph (1) if the producer provides evidence that

13 the producer did not increase marketings in that cal14 endar year when compared to the preceding calendar

15 year.

16 (3) TREATMENT OF REFUNDS.—A refund under

17 this subsection shall not be considered as any type of

18 price support or payment for purposes of sections

19 1211 and 1221 of the Food Security Act of 1985 (16

20 U.S.C. 3811, 3821).

21 (g) TRANSFER OF MILK PRODUCTS TO MILITARY AND

22 VETERANS HOSPITALS.—

23 (1) TRANSFER AUTHORIZED.—As a means of in24 creasing the utilization of milk and milk products,

25 upon the certification by the Secretary of Veterans Af-
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1 fairs or by the Secretary of the Army, acting for the

2 military departments under the Single Service Pur3 chase Assignment for Subsistence of the Department

4 of Defense, that the usual quantities of milk products

5 have been purchased in the normal channels of trade,

6 the Commodity Credit Corporation shall make avail7 able—

8 (A) to the Secretary of Veterans Affairs at

9 warehouses where milk products are stored, such

10 milk products acquired under this section as the

11 Secretary of Veterans Affairs certifies are re12 quired in order to provide milk products as a

13 part of the ration in hospitals under the jurisdic14 tion of the Secretary of Veterans Affairs; and

15 (B) to the Secretary of the Army, at ware16 houses where milk products are stored, such milk

17 products acquired under this section as the Sec18 retary of the Army certifies can be utilized in

19 order to provide additional milk products as a

20 part of the ration—

21 (i) of the Army, Navy, Air Force, or

22 Coast Guard;

23 (ii) in hospitals under the jurisdiction

24 of the Department of Defense; and
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1 (iii) of cadets and midshipmen at, and

2 other personnel assigned to, the United

3 States Merchant Marine Academy.

4 (2) REPORTS.—The Secretary of Veterans Affairs

5 and the Secretary of the Army shall report every six

6 months to the Committee on Agriculture, Nutrition,

7 and Forestry of the Senate and the Committee on Ag8 riculture of the House of Representatives and the Sec9 retary of Agriculture the amount of milk products

10 used under this subsection.

11 (3) PROCESS.—The Secretary of Veterans Affairs

12 and the Secretary of the Army shall reimburse the

13 Commodity Credit Corporation for all costs associated

14 in making milk products available under this sub15 section.

16 (4) LIMITATION.—The obligation of the Commod17 ity Credit Corporation to make milk products avail18 able pursuant to this subsection shall be limited to

19 milk products acquired by the Corporation under this

20 section and not disposed of under provisions (1) and

21 (2) of section 390B(a) of the Agricultural Adjustment

22 Act of 1938.

23 (h) PERIOD OF EFFECTIVENESS.—Notwithstanding

24 any other provision of law, this section shall be effective

25 only during the period—
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1 (1) beginning on the date of the enactment of

2 this Act; and

3 (2) ending on December 31, 2002.

4 SEC. 202. RECOURSE LOANS FOR COMMERCIAL PROC5 ESSORS OF DAIRY PRODUCTS.

6 (a) RECOURSE LOANS AVAILABLE.—The Secretary of

7 Agriculture shall make recourse loans available to commer8 cial processors of eligible dairy products to assist such proc9 essors to manage inventories of eligible dairy products to

10 assure a greater degree of price stability for the dairy indus11 try during the year. Recourse loans may be made available

12 under such reasonable terms and conditions as the Sec13 retary may prescribe. The Secretary shall use the funds, fa14 cilities, and authorities of the Commodity Credit Corpora15 tion to carry out this section.

16 (b) AMOUNT OF LOAN.—The Secretary shall establish

17 the amount of a loan for eligible dairy products, which shall

18 reflect 90 percent of the reference price for that product.

19 The rate of interest charged participants in this program

20 shall not be less than the rate of interest charged the Com21 modity Credit Corporation by the United States Treasury.

22 (c) PERIOD OF LOANS.—A recourse loan made under

23 this section may not extend beyond the end of the fiscal year

24 during which the loan is made, except that the Secretary
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1 may extend the loan for an additional period not to exceed

2 the end of the next fiscal year.

3 (d) DEFINITIONS.—In this section:

4 (1) The term ‘‘eligible dairy products’’ means

5 cheddar cheese, butter, and nonfat dry milk.

6 (2) The term ‘‘reference price’’ means—

7 (A) for cheddar cheese, the average National

8 (Green Bay) Cheese Exchange price for 40 pound

9 blocks of cheddar cheese for the previous three

10 months;

11 (B) for butter, the average Chicago Mer12 cantile Exchange price for Grade AA butter for

13 the previous three months; and

14 (C) for nonfat dry milk, the average West15 ern States Extra Grade and Grade A price for

16 nonfat dry milk for the previous three months.

17 SEC. 203. DAIRY EXPORT INCENTIVE PROGRAM.

18 (a) DURATION.—Subsection (a) of section 153 of the

19 Food Security Act of 1985 (15 U.S.C. 713a–14) is amended

20 by striking ‘‘2001’’ and inserting ‘‘2002’’.

21 (b) ELEMENTS OF PROGRAM.—Subsection (c) of such

22 section is amended—

23 (1) by striking ‘‘and’’ at the end of paragraph

24 (1);
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1 (2) by striking the period at the end of para2 graph (2) and inserting ‘‘; and’’; and

3 (3) by adding at the end the following new para4 graphs:

5 ‘‘(3) the maximum volume of dairy product ex6 ports allowable consistent with the obligations of the

7 United States as a member of the World Trade Orga8 nization are exported under the program each year

9 (minus the volume sold under section 1163 of this Act

10 (7 U.S.C. 1731 note) during that year), except to the

11 extent that the export of such a volume under the pro12 gram would, in the judgment of the Secretary, exceed

13 the limitations on the value set forth in subsection (f);

14 and

15 ‘‘(4) payments may be made under the program

16 for exports to any destination in the world for the

17 purpose of market development, except a destination

18 in a country with respect to which shipments from

19 the United States are otherwise restricted by law.’’.

20 (c) SOLE DISCRETION.—Subsection (b) of such section

21 is amended by inserting ‘‘sole’’ before ‘‘discretion’’.

22 (d) MARKET DEVELOPMENT.—Subsection (e)(1) of

23 such section is amended—

24 (1) by striking ‘‘and’’ and inserting ‘‘the’’; and
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1 (2) by inserting before the period the following:

2 ‘‘, and any additional amount that may be required

3 to assist in the development of world markets for

4 United States dairy products’’.

5 (e) MAXIMUM ALLOWABLE AMOUNTS.—Such section is

6 further amended by adding at the end the following:

7 ‘‘(f) REQUIRED FUNDING.—The Commodity Credit

8 Corporation shall in each year use money and commodities

9 for the program under this section in the maximum amount

10 consistent with the obligations of the United States as a

11 member of the World Trade Organization, minus the

12 amount expended under section 1163 of this Act (7 U.S.C.

13 1731 note) during that year. However, the Commodity

14 Credit Corporation may not exceed the limitations specified

15 in subsection (c)(3) on the volume of allowable dairy prod16 uct exports.’’.

17 SEC. 204. DAIRY PROMOTION PROGRAM.

18 (a) EXPANSION TO COVER DAIRY PRODUCTS IM19 PORTED INTO THE UNITED STATES.—Section 110(b) of the

20 Dairy Production Stabilization Act of 1983 (7 U.S.C.

21 4501(b)) is amended by inserting after ‘‘commercial use’’

22 the following: ‘‘and dairy products imported into the Unit23 ed States’’.

24 (b) DEFINITIONS.—
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1 (1) MILK.—Subsection (d) of section 111 of such

2 Act (7 U.S.C. 4502) is amended by inserting before

3 the semicolon the following: ‘‘or cow’s milk imported

4 into the United States in the form of dairy products

5 intended for consumption in the United States’’.

6 (2) DAIRY PRODUCTS.—Subsection (e) of such

7 section is amended by inserting before the semicolon

8 the following: ‘‘and casein (except casein imported

9 under sections 3501.90.20 (casein glue) and

10 3501.90.50 (other) of the Harmonized Tariff Sched11 ule)’’.

12 (3) RESEARCH.—Subsection (j) of such section is

13 amended by inserting before the semicolon the follow14 ing: ‘‘or to reduce the costs associated with processing

15 or marketing those products’’.

16 (4) UNITED STATES.—Subsection (l) of such sec17 tion is amended to read as follows:

18 ‘‘(l) the term ‘United States’ means the several

19 States and the District of Columbia;’’.

20 (5) IMPORTERS AND EXPORTERS.—Such section

21 is further amended—

22 (A) in subsection (k), by striking ‘‘and’’ at

23 the end of such subsection; and

24 (B) by adding at the end the following new

25 subsections:
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1 ‘‘(m) the term ‘importer’ means the first person

2 to take title to dairy products imported into the

3 United States for domestic consumption; and

4 ‘‘(n) the term ‘exporter’ means any person who

5 exports dairy products from the United States.’’.

6 (c) MEMBERSHIP OF BOARD.—Section 113(b) of such

7 Act (7 U.S.C. 4504(b)) is amended—

8 (1) in the first sentence, by striking ‘‘thirty-six

9 members’’ and inserting ‘‘38 members, including one

10 representative of importers and one representative of

11 exporters to be appointed by the Secretary’’;

12 (2) in the second sentence, by striking ‘‘Mem13 bers’’ and inserting ‘‘The remaining members’’; and

14 (3) in the third sentence, by striking ‘‘United

15 States’’ and inserting ‘‘United States, including Alas16 ka and Hawaii’’.

17 (d) ASSESSMENT.—Section 113(g) of such Act (7

18 U.S.C. 4504(g)) is amended—

19 (1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and

20 (2) by adding at the end the following new paragraph:

21 ‘‘(2) The order shall provide that each importer of

22 dairy products intended for consumption in the United

23 States shall remit to the Board, in the manner prescribed

24 by the order, an assessment equal to 1.2 cents per pound

25 of total milk solids contained in the imported dairy prod-
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1 ucts, or 15 cents per hundredweight of milk contained in

2 the imported dairy products, whichever is less. If an im3 porter can establish that it is participating in active, ongo4 ing qualified State or regional dairy product promotion or

5 nutrition programs intended to increase the consumption

6 of milk and dairy products, the importer shall receive credit

7 in determining the assessment due from that importer for

8 contributions to such programs of up to .8 cents per pound

9 of total milk solids contained in the imported dairy prod10 ucts, or 10 cents per hundredweight of milk contained in

11 the imported dairy products, whichever is less. The assess12 ment collected under this paragraph shall be used for the

13 purpose specified in paragraph (1).’’.

14 (e) RECORDS.—Section 113(k) of such Act (7 U.S.C.

15 4504(k)) is amended in the first sentence by inserting after

16 ‘‘commercial use,’’ the following: ‘‘each importer of dairy

17 products,’’.

18 (f) TERMINATION OR SUSPENSION OF ORDER.—Sec19 tion 116(b) of such Act (7 U.S.C. 4507(b)) is amended—

20 (1) by inserting ‘‘and importers’’ after ‘‘produc21 ers’’ each place it appears;

22 (2) by striking ‘‘who, during a representative pe23 riod (as determined by the Secretary), have been en24 gaged in the production of milk for commercial use’’;

25 and
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1 (3) by adding at the end the following new sen2 tences: ‘‘A producer shall be eligible to vote in the ref3 erendum if the producer, during a representative pe4 riod (as determined by the Secretary), has been en5 gaged in the production of milk for commercial use.

6 An importer shall be eligible to vote in the referendum

7 if the importer, during a representative period (as de8 termined by the Secretary), has been engaged in the

9 importation of dairy products into the United States

10 intended for consumption in the United States.’’.

11 (g) PROMOTION IN INTERNATIONAL MARKETS.—Sec12 tion 113(e) of such Act (7 U.S.C. 4504(e)) is amended by

13 adding at the end the following new sentence: ‘‘For each

14 of the fiscal years 1996 through 2000, the Board’s budget

15 shall provide for the expenditure of not less than 10 percent

16 of the anticipated revenues available to the Board to develop

17 international markets for, and to promote within such mar18 kets, the consumption of dairy products produced in the

19 United States from milk produced in the United States.’’.

20 (h) IMPLEMENTATION OF AMENDMENTS.—

21 (1) IMPLEMENTATION PROCESS.—To implement

22 the amendments made by this section, the Secretary

23 of Agriculture shall issue an amended dairy products

24 promotion and research order under section 112 of the

25 Dairy Production Stabilization Act of 1983 (7 U.S.C.
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1 4503) reflecting such amendments, and no other

2 changes, in the order in existence on the date of the

3 enactment of this Act.

4 (2) PROPOSAL OF AMENDED ORDER.—Not later

5 than 60 days after the date of the enactment of this

6 Act, the Secretary shall publish a proposed dairy

7 products promotion and research order reflecting the

8 amendments made by this section. The Secretary shall

9 provide notice and an opportunity for public com10 ment on the proposed order.

11 (3) ISSUANCE OF AMENDED ORDER.—After no12 tice and opportunity for public comment are provided

13 in accordance with paragraph (2), the Secretary shall

14 issue a final dairy products promotion and research

15 order, taking into consideration the comments re16 ceived and including in the order such provisions as

17 are necessary to ensure that the order is in conform18 ity with the amendments made by this section.

19 (4) EFFECTIVE DATE.—The final dairy products

20 promotion and research order shall be issued and be21 come effective not later than 120 days after publica22 tion of the proposed order.

23 (i) REFERENDUM ON AMENDMENTS.—Not later than

24 36 months after the issuance of the dairy products pro25 motion and research order reflecting the amendments made
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1 by this section, the Secretary of Agriculture shall conduct

2 a referendum under section 115 of the Dairy Production

3 Stabilization Act of 1983 (7 U.S.C. 4506) for the sole pur4 pose of determining whether the requirements of such

5 amendments shall be continued. The Secretary shall conduct

6 the referendum among persons who have been producers or

7 importers (as defined in section 111 of such Act (7 U.S.C.

8 4502)) during a representative period as determined by the

9 Secretary. The requirements of such amendments shall be

10 continued only if the Secretary determines that such re11 quirements have been approved by not less than a majority

12 of the persons voting in the referendum. If continuation of

13 the amendments is not approved, the Secretary shall issue

14 a new order, within six months after the announcement of

15 the results of the referendum, that is identical to the order

16 in effect on the date of the enactment of this Act. The new

17 order shall become effective upon issuance and shall not be

18 subject to referendum for approval.

19 SEC. 205. FLUID MILK STANDARDS UNDER MILK MARKET20 ING ORDERS.

21 (a) NATURE OF STANDARDS.—Each marketing order

22 issued with respect to milk and its products under section

23 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reen24 acted with amendments by the Agricultural Marketing

25 Agreement Act of 1937, shall contain terms and conditions
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1 to provide that all dispositions of fluid milk products con2 taining milk of the highest use classification covered by such

3 orders shall comply with the following requirements:

4 (1) In the case of milk marketed as whole milk,

5 not less than 12.05 percent total milk solids consisting

6 of not less than 8.8 percent milk solids not fat and

7 not less than 3.25 percent milk fat.

8 (2) In the case of milk marketed as 2 percent (or

9 lowfat) milk, not less than 12 percent total milk solids

10 consisting of not less than 10 percent milk solids not

11 fat and not less than 2 percent milk fat.

12 (3) In the case of milk marketed as 1 percent (or

13 light) milk, not less than 12 percent total milk solids

14 consisting of not less than 11 percent milk solids not

15 fat and not less than 1 percent milk fat.

16 (4) In the case of milk marketed as skim (or

17 nonfat) milk, not less than 9 percent total milk solids

18 consisting of not less than 9 percent milk solids not

19 fat and not more than .25 percent milk fat.

20 (b) VIOLATIONS.—A violation of the requirements spec21 ified in subsection (a) shall be subject to the penalties pro22 vided in section 8c(14) of the Agricultural Adjustment Act

23 (7 U.S.C. 608c(14)), reenacted with amendments by the Ag24 ricultural Marketing Agreement Act of 1937.
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1 (c) EFFECTIVE DATE.—The requirements imposed by

2 this section shall apply to fluid milk marketed on and after

3 the first day of the first month beginning not less than 30

4 days after the date of the enactment of this Act.

5 SEC. 206. MANUFACTURING ALLOWANCE.

6 (a) MAXIMUM ALLOWANCES ESTABLISHED.—No State

7 shall provide for a manufacturing allowance for the process8 ing of milk in excess of—

9 (1) in the case of milk manufactured into butter,

10 butter oil, nonfat dry milk, or whole dry milk—

11 (A) $1.65 per hundredweight of milk, for

12 milk marketed during the 2-year period begin13 ning on the effective date of this section; and

14 (B) such allowance per hundredweight of

15 milk as the Secretary of Agriculture may estab16 lish under section 221(b)(3), for milk marketed

17 after the end of such period; and

18 (2) in the case of milk manufactured into cheese

19 and whey—

20 (A) $1.80 per hundredweight of milk, for

21 milk marketed during the 2-year period begin22 ning on the effective date of this section; and

23 (B) such allowance per hundredweight of

24 milk as the Secretary may establish under sec-
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1 tion 221(b)(3), for milk marketed after the end

2 of such period.

3 (b) YIELDS.—In converting the weight of milk to dairy

4 products during the two-year period beginning on the effec5 tive date of this section, the Secretary shall use the following

6 yields with respect to a hundred pounds of milk:

7 (1) Butter: 4.2 pounds.

8 (2) Nonfat dry milk: 8.613 pounds.

9 (3) 40 pound block cheddar cheese: 10.169

10 pounds.

11 (4) Whey cream butter: .27 pounds.

12 (c) SOURCES OF PRODUCT PRICE VALUES.—In deter13 mining the manufacturing allowance applicable in a State

14 during the 2-year period beginning on the effective date of

15 this section, the Secretary shall use the following sources

16 for product price values:

17 (1) For butter, Chicago Mercantile Exchange

18 Grade AA butter.

19 (2) For nonfat dry milk, California Manufactur20 ing Plants Extra Grade and Grade A nonfat dry

21 milk.

22 (3) For cheese, National (Green Bay) Cheese Ex23 change 40 pound block cheddar cheese.

24 (4) For whey cream butter, Chicago Mercantile

25 Exchange Grade B butter.
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1 (d) MANUFACTURING ALLOWANCE DEFINED.—In this

2 section, the term ‘‘manufacturing allowance’’ means—

3 (1) the amount by which the product price value

4 of butter and nonfat dry milk manufactured from a

5 hundred pounds of milk containing 3.5 pounds of

6 milk fat and 8.7 pounds of milk solids not fat exceeds

7 the class price for the milk used to produce those

8 products; or

9 (2) an amount by which the product price value

10 of cheese and whey manufactured from a hundred

11 pounds of milk containing 3.6 pounds of milk fat and

12 8.7 pounds of milk solids not fat exceeds the class

13 price for the milk used to produce those products.

14 (e) EFFECT OF VIOLATION.—If the Secretary deter15 mines that a State has in effect a manufacturing allowance

16 that exceeds the manufacturing allowance authorized in

17 subsection (a), the Secretary shall suspend, until such time

18 as the State complies with such subsection—

19 (1) purchases under section 201 of cheddar cheese

20 produced in that State; and

21 (2) disbursements from the Class IV equalization

22 pool under section 208 to milk marketing orders oper23 ating in that State with respect to milk produced in

24 that State.

25 (f) CONFORMING SUSPENSION AND REPEAL.—
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1 (1) SUSPENSION AND REPEAL.—During the 2-

2 year period beginning on the effective date of this sec3 tion, the requirements of section 102 of the Food, Ag4 riculture, Conservation, and Trade Act of 1990 (7

5 U.S.C. 1446e–1) shall not apply. Effective on the first

6 day after the end of such period, such section is re7 pealed.

8 (2) EXCEPTION.—Notwithstanding paragraph

9 (1), in the event that an injunction or other order of

10 a court prohibits or impairs the implementation of

11 this section or the activities of the Secretary under

12 this section, the Secretary shall use the authorities

13 provided by section 102 of the Food, Agriculture, Con14 servation, and Trade Act of 1990 (7 U.S.C. 1446e–1)

15 until such time as the injunction or other court order

16 is lifted.

17 (g) EFFECTIVE DATE; IMPLEMENTATION.—This sec18 tion shall take effect on the first day of the first month be19 ginning not less than 30 days after the date of the enact20 ment of this Act. After such effective date, the Secretary may

21 exercise the authority provided to the Secretary under this

22 section without regard to the issuance of regulations in23 tended to carry out this section.
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1 SEC. 207. ESTABLISHMENT OF TEMPORARY CLASS I PRICE

2 AND TEMPORARY CLASS I EQUALIZATION

3 POOLS.

4 (a) TEMPORARY PRICING FOR MILK OF THE HIGHEST

5 USE CLASSIFICATION (CLASS I MILK).—

6 (1) ESTABLISHMENT OF MINIMUM PRICE.—Dur7 ing the 2-year period beginning on the effective date

8 of this section, the minimum price for milk of the

9 highest use classification marketed under a marketing

10 order issued under section 8c of the Agricultural Ad11 justment Act (7 U.S.C. 608c), reenacted with amend12 ments by the Agricultural Marketing Agreement Act

13 of 1937, shall not be less than the sum of—

14 (A) $12.87 per hundredweight; and

15 (B) the aggregate adjustment in effect under

16 clauses (1) and (2) of the second sentence of

17 paragraph (5)(A) of such section on December

18 31, 1995, for milk of the highest use classifica19 tion in that order.

20 (2) ADDITION TO MINIMUM PRICE.—If the basic

21 formula price for milk exceeds $12.87 per hundred22 weight in any month during the 2-year period begin23 ning on the effective date of this section, the positive

24 difference between the basic formula price and $12.87

25 shall be added to the price for milk of the highest use

26 classification marketed under a marketing order is-
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1 sued under such section 8c in the second month fol2 lowing the month in which the difference occurred.

3 (3) EFFECT ON OTHER USE CLASSIFICATIONS.—

4 This subsection shall not affect the calculation of the

5 basic formula price used to determine the price for

6 milk of use classifications other than the highest use

7 classification.

8 (b) CLASS I EQUALIZATION POOLS.—

9 (1) COLLECTIONS.—During the 2-year period be10 ginning on the effective date of this section, the Sec11 retary of Agriculture shall collect, on a monthly basis,

12 from each marketing order issued with respect to milk

13 and its products under section 8c of the Agricultural

14 Adjustment Act (7 U.S.C. 608c), reenacted with

15 amendments by the Agricultural Marketing Agree16 ment Act of 1937, and from the comparable milk

17 marketing order issued by the State of California, an

18 amount equal to the product of—

19 (A) $0.80 per hundredweight; and

20 (B) the total hundredweights of all milk of

21 the highest use classification marketed under the

22 order for the month.

23 (2) DISBURSEMENTS.—The Secretary shall pay,

24 on a monthly basis, to each marketing order referred
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1 to in paragraph (1) an amount equal to the product

2 of—

3 (A) the total collection under paragraph (1)

4 for the month; and

5 (B) the ratio of the total hundredweights of

6 all milk marketed for the month under that order

7 to all milk marketed for the month under all

8 such orders.

9 (3) EFFECT ON BLEND PRICES.—Producer blend

10 prices under a milk marketing order shall be adjusted

11 to account for collections made under paragraph (1)

12 and disbursements made under paragraph (2).

13 (c) ENFORCEMENT.—

14 (1) IN GENERAL.—Amounts for which a milk

15 marketing order are responsible under subsection (b)

16 shall be determined on a monthly basis and shall be

17 collected and remitted to the Secretary in the manner

18 prescribed by the Secretary.

19 (2) PENALTIES.—If any person fails to remit the

20 amount required in subsection (b) or fails to comply

21 with such requirements for recordkeeping or otherwise

22 as are required by the Secretary to carry out this sec23 tion, the person shall be liable to the Secretary for a

24 civil penalty up to an amount determined by mul25 tiplying—
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1 (A) the quantity of milk involved in the vio2 lation; by

3 (B) the support rate for milk in effect at the

4 time of the violation under section 201.

5 (3) ENFORCEMENT.—The Secretary may enforce

6 this section in the courts of the United States.

7 (d) CONFORMING REPEAL.—Section 8c(5)(A) of the

8 Agricultural Adjustment Act (7 U.S.C. 608c(5)(A)), reen9 acted with amendments by the Agricultural Marketing

10 Agreement Act of 1937, is amended by striking out the sen11 tence beginning ‘‘Throughout the 2-year period’’ and all

12 that follows through the end of the subparagraph.

13 (e) EFFECTIVE DATE.—Except as provided in sub14 section (f), this section shall take effect on the first day of

15 the first month beginning not less than 30 days after the

16 date of the enactment of this Act.

17 (f) IMPLEMENTATION.—Not later than the effective

18 date of this section, the Secretary shall amend Federal milk

19 marketing orders issued under section 8c of the Agricultural

20 Adjustment Act (7 U.S.C. 608c), reenacted with amend21 ments by the Agricultural Marketing Agreement Act of

22 1937, to effectuate the requirements of this section. The

23 amendments shall not be—

24 (1) subject to a referendum under subsection (17)

25 or (19) of such section among milk producers to deter-
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1 mine whether issuance of such order is approved or

2 favored by milk producers;

3 (2) preconditioned on the existence of a market4 ing agreement among handlers under subsection (8) of

5 such section and section 8b of such Act (7 U.S.C.

6 608b);

7 (3) subject to rulemaking under title 5, United

8 States Code; or

9 (4) subject to review or approval by other execu10 tive agencies.

11 SEC. 208. ESTABLISHMENT OF TEMPORARY CLASS IV PRICE

12 AND TEMPORARY CLASS IV EQUALIZATION

13 POOL.

14 (a) TEMPORARY CLASSIFICATION OF CLASS IV

15 MILK.—

16 (1) CLASSIFICATION.—For purposes of

17 classifying milk in accordance with the form in which

18 or the purpose for which it is used, the Secretary of

19 Agriculture shall designate all milk marketed in the

20 48 contiguous States of the United States and used to

21 produce butter, butter oil, nonfat dry milk, or dry

22 whole milk as Class IV milk. The Secretary may in23 clude other products of milk, except cheese, within the

24 Class IV classification if the Secretary determines
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1 that inclusion of the product would be fair and equi2 table.

3 (2) USE OF CLASSIFICATION.—Each marketing

4 order issued with respect to milk and its products

5 under section 8c of the Agricultural Adjustment Act

6 (7 U.S.C. 608c), reenacted with amendments by the

7 Agricultural Marketing Agreement Act of 1937, and

8 each comparable State milk marketing order, shall

9 use the classification required by paragraph (1) in

10 lieu of any other classification, such as Class III–A

11 milk, to properly classify milk used to produce butter,

12 butter oil, nonfat dry milk, or dry whole milk.

13 (b) ESTABLISHMENT OF CLASS IV POOL.—The Sec14 retary shall establish a Class IV pool for the purpose of

15 making collections and disbursements related to milk classi16 fied as Class IV milk under subsection (a). The Class IV

17 pool shall apply to milk covered by a milk marketing order

18 referred to in subsection (a) and unregulated milk.

19 (c) ESTABLISHMENT OF MONTHLY CLASS IV PRICE.—

20 For the purpose of determining whether the Secretary will

21 make collections and disbursements under the Class IV

22 equalization pool, the Secretary shall establish, on a month23 ly basis, a price for dairy products manufactured from

24 Class IV milk on a 3.5 percent butterfat basis. In determin-
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1 ing that price, the Secretary shall calculate the amount

2 equal to—

3 (1) the sum of—

4 (A) the product of the Western States Extra

5 Grade and Grade A price per pound for nonfat

6 dry milk and 8.613; and

7 (B) the product of the Chicago Mercantile

8 Exchange Grade AA price per pound for butter

9 and 4.2; less

10 (2) a manufacturing allowance equal to $1.65

11 per hundredweight of milk.

12 (d) OPERATION OF CLASS IV EQUALIZATION POOL.—

13 (1) APPLICATION OF SUBSECTION.—This sub14 section shall apply in any month in which the sup15 port price for milk under section 201, adjusted to 3.5

16 percent butterfat, exceeds the Class IV price estab17 lished under subsection (c).

18 (2) COLLECTION.—In any month in which the

19 Class IV equalization pool is in operation under

20 paragraph (1), each milk marketing order referred to

21 in subsection (a) and each handler of unregulated

22 milk shall pay into the Class IV equalization pool an

23 amount equal to the product of—

24 (A) the total hundredweights of Class IV

25 milk used to manufacture dairy products during
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1 that month under all such orders and by all such

2 handlers;

3 (B) 50 percent of the amount by which the

4 support price for milk under section 201, ad5 justed to 3.5 percent butterfat, exceeded the Class

6 IV price determined under subsection (c) for that

7 month; and

8 (C) the ratio of the total hundredweights of

9 all milk marketed during that month under that

10 order or by that handler to the total

11 hundredweights of all milk marketed for that

12 month under all such orders and by all such

13 handlers.

14 (3) DISBURSEMENTS.—In any month in which

15 the Class IV equalization pool is in operation under

16 paragraph (1), each milk marketing order referred to

17 in subsection (a) in which products were manufac18 tured from Class IV milk during that month and each

19 handler of unregulated milk that manufactured prod20 ucts from Class IV milk during that month shall re21 ceive from the Class IV equalization pool an amount

22 equal to the product of—

23 (A) the total collection under paragraph (2)

24 for the month; and
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1 (B) the ratio of the total hundredweights of

2 Class IV milk manufactured into dairy products

3 during that month under that order or by that

4 handler to the total hundredweights of Class IV

5 milk manufactured into dairy products during

6 that month under all such orders and by all such

7 handlers.

8 (4) EFFECT ON BLEND PRICES.—Producer blend

9 prices under a milk marketing order referred to in

10 subsection (a) shall be adjusted to account for collec11 tions under paragraph (2) and disbursements under

12 paragraph (3).

13 (e) ENFORCEMENT.—

14 (1) IN GENERAL.—Amounts for which a milk

15 marketing order or handler are responsible under sub16 section (b) shall be determined on a monthly basis

17 and shall be collected and remitted to the Secretary

18 in the manner prescribed by the Secretary.

19 (2) PENALTIES.—If any person fails to remit the

20 amount required in subsection (c) or fails to comply

21 with such requirements for recordkeeping or otherwise

22 as are required by the Secretary to carry out this sec23 tion, the person shall be liable to the Secretary for a

24 civil penalty up to an amount determined by mul25 tiplying—
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1 (A) the quantity of milk involved in the vio2 lation; by

3 (B) the support rate for milk in effect at the

4 time of the violation under section 201.

5 (3) ENFORCEMENT.—The Secretary may enforce

6 this section in the courts of the United States.

7 (f) EFFECTIVE DATE.—Except as provided in sub8 section (g), this section shall—

9 (1) take effect on the first day of the first month

10 beginning not less than 30 days after the date of the

11 enactment of this Act; and

12 (2) apply during the 2-year period beginning on

13 such effective date.

14 (g) IMPLEMENTATION.—Not later than the start of the

15 effective date of this section, the Secretary shall amend Fed16 eral milk marketing orders issued under section 8c of the

17 Agricultural Adjustment Act (7 U.S.C. 608c), reenacted

18 with amendments by the Agricultural Marketing Agreement

19 Act of 1937, to effectuate the requirements of this section.

20 The amendments shall not be—

21 (1) subject to referendum under subsection (17)

22 or (19) of such section among milk producers to deter23 mine whether issuance of such order is approved or

24 favored by milk producers;
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1 (2) preconditioned on the existence of a market2 ing agreement among handlers under subsection (8) of

3 such section and section 8b of such Act (7 U.S.C.

4 608b);

5 (3) subject to rulemaking under title 5, United

6 States Code; or

7 (4) subject to review or approval by other execu8 tive agencies.

9 SEC. 209. AUTHORITY FOR ESTABLISHMENT OF STANDBY

10 POOLS.

11 (a) AUTHORITY TO ESTABLISH.—As soon as possible

12 after the effective date of this section, the Secretary of Agri13 culture shall publish in the Federal Register an invitation

14 for interested persons to submit proposals for the establish15 ment within Federal milk marketing orders issued under

16 section 8c of the Agricultural Adjustment Act (7 U.S.C.

17 608c), reenacted with amendments by the Agricultural Mar18 keting Agreement Act of 1937, of standby pools to facilitate

19 the movement of milk over long distances during periods

20 of shortage through the sharing of proceeds from sales of

21 milk of the highest use classification due to producers under

22 the order with producers shipping to plants regulated by

23 another order to provide a reserve supply of milk in the

24 other market.
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1 (b) APPROVAL OR TERMINATION OF PARTICIPATION IN

2 STANDBY POOL.—Order provisions under this section shall

3 not become effective in any marketing order unless such pro4 visions are approved by producers in the manner provided

5 for the approval of marketing orders under section 8c of

6 the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted

7 with amendments by the Agricultural Marketing Agreement

8 Act of 1937, but separately from other order provisions.

9 Standby pool provisions approved under this section in an

10 order may be disapproved separately by producers or termi11 nated separately by the Secretary under section 8c(16)(B)

12 of such Act. Such disapproval or termination shall not be

13 considered to be a disapproval or termination of the other

14 terms of that order.

15 (c) EFFECTIVE DATE.—This section shall take effect

16 on the first day of the first month beginning not less than

17 30 days after the date of the enactment of this Act.

18 Subtitle B—Reform of Federal Milk

19 Marketing Orders

20 SEC. 221. ISSUANCE OR AMENDMENT OF FEDERAL MILK

21 MARKETING ORDERS TO IMPLEMENT CER22 TAIN REFORMS.

23 (a) ISSUANCE OF AMENDED ORDERS.—Subject to the

24 time limits specified in section 222, the Secretary of Agri25 culture shall issue new or amended marketing orders with
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1 respect to milk and its products under section 8c of the Ag2 ricultural Adjustment Act (7 U.S.C. 608c), reenacted with

3 amendments by the Agricultural Marketing Agreement Act

4 of 1937, to effectuate the requirements of subsection (b). The

5 orders shall take effect on the date the orders are issued and

6 shall supersede all other marketing orders and any other

7 statutes, rules, and regulations that are applicable to the

8 pricing and marketing of milk and its products in effect

9 immediately before that date, whether under the authority

10 of section 8c of such Act or a State or local law.

11 (b) REFORM REQUIREMENTS.—The Secretary shall re12 form the Federal milk marketing order system under sub13 section (a) to accomplish the following purposes:

14 (1) Consolidation of Federal milk marketing or15 ders into not less than 8 nor more than 13 orders,

16 which shall also include those areas of the 48 contig17 uous States not covered by a Federal milk marketing

18 order on the date of the enactment of this Act. One

19 of the new Federal milk marketing orders shall only

20 cover the State of California. A new or amended order

21 shall have the right to blend order receipts to address

22 unique issues to that order such as a preexisting State

23 quota system.
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1 (2) Implementation of uniform multiple compo2 nent pricing for milk used in manufactured dairy

3 products.

4 (3) Establishment of class prices for milk used to

5 produce cheese, nonfat dry milk, and butter based on

6 national product prices, less a manufacturing allow7 ance. The resulting prices shall not vary regionally,

8 except to reflect variances in transportation and rea9 sonable operating costs, if any, of efficient processing

10 plants in different geographical areas.

11 (c) STATUS OF PRODUCER HANDLERS.—In amending

12 Federal milk marketing orders under this section, the Sec13 retary shall ensure that the legal status of producer handlers

14 of milk under the Agricultural Adjustment Act (7 U.S.C.

15 601 et seq.), reenacted with amendments by the Agricultural

16 Marketing Agreement Act of 1937, shall be the same after

17 the amendments made by this section take effect as it was

18 before the effective date of the amendments.

19 SEC. 222. REFORM PROCESS.

20 (a) PROCESS.—In preparation for the issuance of the

21 new or amended Federal milk marketing orders required

22 under section 221, the Secretary of Agriculture shall comply

23 with the following expedited procedural requirements:

24 (1) Not later than 165 days after the date of the

25 enactment of this Act, the Secretary shall issue pro-
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1 posed amendments or new milk marketing orders to

2 effectuate the reform requirements specified in such

3 section.

4 (2) The Secretary shall provide for a 75-day

5 comment period on the proposed amendments or or6 ders issued under paragraph (1).

7 (3) Not later than 120 days after the end of the

8 comment period provided under paragraph (2), the

9 Secretary shall publish in the Federal Register a final

10 administrative decision regarding the issuance or

11 amendment of Federal milk marketing orders to effec12 tuate the reform requirements specified in such sec13 tion.

14 (b) REFERENDUM AND MARKETING AGREEMENT.—

15 After the issuance of the new or amended Federal milk mar16 keting orders under section 221, the Secretary may conduct

17 a referendum in the manner provided in section 8c(16)(B)

18 of the Agricultural Adjustment Act (7 U.S.C. 608c(16)(B)),

19 reenacted with amendments by the Agricultural Marketing

20 Agreement Act of 1937, with respect to each order to deter21 mine whether milk producers subject to the order favor the

22 termination of the order.

23 (c) APPLICATION OF ADMINISTRATIVE PROCEDURES

24 ACT.—The issuance of the new or amended Federal milk
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1 marketing orders required under section 221 shall not be

2 subject to rulemaking under title 5, United States Code.

3 (d) REVIEW AND APPROVAL.—The action of the Sec4 retary under section 221 shall not be subject to review or

5 approval by any other executive agency.

6 SEC. 223. EFFECT OF FAILURE TO COMPLY WITH REFORM

7 PROCESS REQUIREMENTS.

8 (a) FAILURE TO TIMELY ISSUE OR AMEND ORDERS.—

9 If, before the end of the 1-year period beginning on the date

10 of the enactment of this Act, the Secretary of Agriculture

11 does not issue new or amended Federal milk marketing or12 ders under section 8c of the Agricultural Adjustment Act

13 (7 U.S.C. 608c), reenacted with amendments by the Agricul14 tural Marketing Agreement Act of 1937, to effectuate the

15 requirements of section 221(b), then the Secretary may not

16 assess or collect assessments from milk producers or han17 dlers under such section 8c for marketing order administra18 tion and services provided under such section after the end

19 of that period. The Secretary may not reduce the level of

20 services provided under such section on account of the pro21 hibition against assessments, but shall rather cover the cost

22 of marketing order administration and services through

23 funds available for the Agricultural Marketing Service of

24 the Department of Agriculture.
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1 (b) FAILURE TO TIMELY IMPLEMENT ORDERS.—Un2 less the Secretary certifies to Congress before the end of the

3 2-year period beginning on the date of the enactment of this

4 Act that all of the Federal marketing order reforms required

5 by section 221(b) have been fully implemented, then, effec6 tive at the end of that period—

7 (1) the Secretary shall immediately cease all

8 price support activities under section 201;

9 (2) the Secretary shall immediately terminate all

10 Federal milk marketing orders under section 8c of the

11 Agricultural Adjustment Act (7 U.S.C. 608c), reen12 acted with amendments by the Agricultural Market13 ing Agreement Act of 1937, and may not issue any

14 further order under such Act with respect to milk;

15 (3) the Commodity Credit Corporation shall im16 mediately cease to operate the dairy export incentive

17 program under section 153 of the Food Security Act

18 of 1985 (15 U.S.C. 713a–14);

19 (4) the Secretary and the National Processor Ad20 vertising and Promotion Board shall immediately

21 cease all activities under the Fluid Milk Promotion

22 Act of 1990 (7 U.S.C. 6401 et seq.); and

23 (5) the Secretary and the National Dairy Pro24 motion and Research Board shall immediately cease
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1 all activities under the Dairy Production Stabiliza2 tion Act of 1983 (7 U.S.C. 4501 et seq.).

3 (c) EFFECT OF COURT ORDER.—The actions author4 ized by this section are intended to ensure the timely publi5 cation and implementation of new and amended Federal

6 milk marketing orders under section 8c of the Agricultural

7 Adjustment Act (7 U.S.C. 608c), reenacted with amend8 ments by the Agricultural Marketing Agreement Act of

9 1937. In the event that the Secretary is enjoined or other10 wise restrained by a court order from publishing or imple11 menting the reform requirements specified by section 221,

12 the length of time for which that injunction or other re13 straining order is effective shall be added to the time limita14 tions specified in subsections (a) and (b) thereby extending

15 those time limitations by a period of time equal to the pe16 riod of time for which the injunction or other restraining

17 order is effective.

18 TITLE III—CONSERVATION

19 SEC. 301. CONSERVATION.

20 (a) FUNDING.—Subtitle E of title XII of the Food Se21 curity Act of 1985 (16 U.S.C. 3841 et seq.) is amended to

22 read as follows:
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1 ‘‘Subtitle E—Funding

2 ‘‘SEC. 1241. FUNDING.

3 ‘‘(a) MANDATORY EXPENSES.—For each of fiscal years

4 1996 through 2002, the Secretary shall use the funds of the

5 Commodity Credit Corporation to carry out the programs

6 authorized by—

7 ‘‘(1) subchapter B of chapter 1 of subtitle D (in8 cluding contracts extended by the Secretary pursuant

9 to section 1437 of the Food, Agriculture, Conserva10 tion, and Trade Act of 1990 (Public Law 101–624; 16

11 U.S.C. 3831 note));

12 ‘‘(2) subchapter C of chapter 1 of subtitle D; and

13 ‘‘(3) chapter 4 of subtitle D.

14 ‘‘(b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PRO15 GRAM.—For each of fiscal years 1996 through 2002,

16 $100,000,000 of the funds of the Commodity Credit Cor17 poration shall be available for providing technical assist18 ance, cost-sharing payments, and incentive payments for

19 practices relating to livestock production under the livestock

20 environmental assistance program under chapter 4 of sub21 title D.’’.

22 (b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PRO23 GRAM.—Subtitle D of title XII of the Food Security Act

24 of 1985 (16 U.S.C. 3830 et seq.) is amended by adding at

25 the end the following:
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1 ‘‘CHAPTER 4—LIVESTOCK

2 ENVIRONMENTAL ASSISTANCE PROGRAM

3 ‘‘SEC. 1240. DEFINITIONS.

4 ‘‘In this chapter:

5 ‘‘(1) LAND MANAGEMENT PRACTICE.—The term

6 ‘land management practice’ means a site-specific nu7 trient or manure management, irrigation manage8 ment, tillage or residue management, grazing man9 agement, or other land management practice that the

10 Secretary determines is needed to protect, in the most

11 cost effective manner, water, soil, or related resources

12 from degradation due to livestock production.

13 ‘‘(2) LARGE CONFINED LIVESTOCK OPERATION.—

14 The term ‘large confined livestock operation’ means

15 an operation that—

16 ‘‘(A) is a confined animal feeding oper17 ation; and

18 ‘‘(B) has more than—

19 ‘‘(i) 55 mature dairy cattle;

20 ‘‘(ii) 10,000 beef cattle;

21 ‘‘(iii) 30,000 laying hens or broilers (if

22 the facility has continuous overflow water23 ing);

24 ‘‘(iv) 100,000 laying hens or broilers

25 (if the facility has a liquid manure system);
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1 ‘‘(v) 55,000 turkeys;

2 ‘‘(vi) 15,000 swine; or

3 ‘‘(vii) 10,000 sheep or lambs.

4 ‘‘(3) LIVESTOCK.—The term ‘livestock’ means

5 dairy cows, beef cattle, laying hens, broilers, turkeys,

6 swine, sheep, lambs, and such other animals as deter7 mined by the Secretary.

8 ‘‘(4) OPERATOR.—The term ‘operator’ means a

9 person who is engaged in livestock production (as de10 fined by the Secretary).

11 ‘‘(5) STRUCTURAL PRACTICE.—The term ‘struc12 tural practice’ means the establishment of an animal

13 waste management facility, terrace, grassed water14 way, contour grass strip, filterstrip, or other struc15 tural practice that the Secretary determines is needed

16 to protect, in the most cost effective manner, water,

17 soil, or related resources from degradation due to live18 stock production.

19 ‘‘SEC. 1240A. ESTABLISHMENT AND ADMINISTRATION OF

20 LIVESTOCK ENVIRONMENTAL ASSISTANCE

21 PROGRAM.

22 ‘‘(a) ESTABLISHMENT.—

23 ‘‘(1) IN GENERAL.—During the 1996 through

24 2002 fiscal years, the Secretary shall provide tech25 nical assistance, cost-sharing payments, and incentive
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1 payments to operators who enter into contracts with

2 the Secretary, through a livestock environmental as3 sistance program.

4 ‘‘(2) ELIGIBLE PRACTICES.—

5 ‘‘(A) STRUCTURAL PRACTICES.—An opera6 tor who implements a structural practice shall be

7 eligible for technical assistance or cost-sharing

8 payments, or both.

9 ‘‘(B) LAND MANAGEMENT PRACTICES.—An

10 operator who performs a land management prac11 tice shall be eligible for technical assistance or

12 incentive payments, or both.

13 ‘‘(3) ELIGIBLE LAND.—Assistance under this

14 chapter may be provided with respect to land that is

15 used for livestock production and on which a serious

16 threat to water, soil, or related resources exists, as de17 termined by the Secretary, by reason of the soil types,

18 terrain, climatic, soil, topographic, flood, or saline

19 characteristics, or other factors or natural hazards.

20 ‘‘(4) SELECTION CRITERIA.—In providing tech21 nical assistance, cost-sharing payments, and incentive

22 payments to operators in a region, watershed, or con23 servation priority area in which an agricultural op24 eration is located, the Secretary shall consider—
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1 ‘‘(A) the significance of the water, soil, and

2 related natural resource problems; and

3 ‘‘(B) the maximization of environmental

4 benefits per dollar expended.

5 ‘‘(b) APPLICATION AND TERM.—

6 ‘‘(1) IN GENERAL.—A contract between an oper7 ator and the Secretary under this chapter may—

8 ‘‘(A) apply to 1 or more structural practices

9 or 1 or more land management practices, or

10 both; and

11 ‘‘(B) have a term of not less than 5, nor

12 more than 10, years, as determined appropriate

13 by the Secretary, depending on the practice or

14 practices that are the basis of the contract.

15 ‘‘(2) DUTIES OF OPERATORS AND SECRETARY.—

16 To receive cost-sharing or incentive payments, or

17 technical assistance, participating operators shall

18 comply with all terms and conditions of the contract

19 and a plan, as established by the Secretary.

20 ‘‘(c) STRUCTURAL PRACTICES.—

21 ‘‘(1) COMPETITIVE OFFER.—The Secretary shall

22 administer a competitive offer system for operators

23 proposing to receive cost-sharing payments in ex24 change for the implementation of 1 or more structural
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1 practices by the operator. The competitive offer system

2 shall consist of—

3 ‘‘(A) the submission of a competitive offer

4 by the operator in such manner as the Secretary

5 may prescribe; and

6 ‘‘(B) evaluation of the offer in light of the

7 selection criteria established under subsection

8 (a)(4) and the projected cost of the proposal, as

9 determined by the Secretary.

10 ‘‘(2) CONCURRENCE OF OWNER.—If the operator

11 making an offer to implement a structural practice is

12 a tenant of the land involved in agricultural produc13 tion, for the offer to be acceptable, the operator shall

14 obtain the concurrence of the owner of the land with

15 respect to the offer.

16 ‘‘(d) LAND MANAGEMENT PRACTICES.—The Secretary

17 shall establish an application and evaluation process for

18 awarding technical assistance or incentive payments, or

19 both, to an operator in exchange for the performance of 1

20 or more land management practices by the operator.

21 ‘‘(e) COST-SHARING, INCENTIVE PAYMENTS, AND

22 TECHNICAL ASSISTANCE.—

23 ‘‘(1) COST-SHARING PAYMENTS.—

24 ‘‘(A) IN GENERAL.—The Federal share of

25 cost-sharing payments to an operator proposing
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1 to implement 1 or more structural practices shall

2 not be greater than 75 percent of the projected

3 cost of each practice, as determined by the Sec4 retary, taking into consideration any payment

5 received by the operator from a State or local

6 government.

7 ‘‘(B) LIMITATION.—An operator of a large

8 confined livestock operation shall not be eligible

9 for cost-sharing payments to construct an ani10 mal waste management facility.

11 ‘‘(C) OTHER PAYMENTS.—An operator shall

12 not be eligible for cost-sharing payments for

13 structural practices on eligible land under this

14 chapter if the operator receives cost-sharing pay15 ments or other benefits for the same land under

16 chapter 1, 2, or 3.

17 ‘‘(2) INCENTIVE PAYMENTS.—The Secretary shall

18 make incentive payments in an amount and at a rate

19 determined by the Secretary to be necessary to encour20 age an operator to perform 1 or more land manage21 ment practices.

22 ‘‘(3) TECHNICAL ASSISTANCE.—

23 ‘‘(A) FUNDING.—The Secretary shall allo24 cate funding under this chapter for the provision

25 of technical assistance according to the purpose
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1 and projected cost for which the technical assist2 ance is provided for a fiscal year. The allocated

3 amount may vary according to the type of exper4 tise required, quantity of time involved, and

5 other factors as determined appropriate by the

6 Secretary. Funding shall not exceed the projected

7 cost to the Secretary of the technical assistance

8 provided for a fiscal year.

9 ‘‘(B) OTHER AUTHORITIES.—The receipt of

10 technical assistance under this chapter shall not

11 affect the eligibility of the operator to receive

12 technical assistance under other authorities of

13 law available to the Secretary.

14 ‘‘(f) LIMITATION ON PAYMENTS.—

15 ‘‘(1) IN GENERAL.—The total amount of cost16 sharing and incentive payments paid to a person

17 under this chapter may not exceed—

18 ‘‘(A) $10,000 for any fiscal year; or

19 ‘‘(B) $50,000 for any multiyear contract.

20 ‘‘(2) REGULATIONS.—The Secretary shall issue

21 regulations that are consistent with section 1001 for

22 the purpose of—

23 ‘‘(A) defining the term ‘person’ as used in

24 paragraph (1); and
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1 ‘‘(B) prescribing such rules as the Secretary

2 determines necessary to ensure a fair and rea3 sonable application of the limitations established

4 under this subsection.

5 ‘‘(g) REGULATIONS.—Not later than 180 days after the

6 effective date of this subsection, the Secretary shall issue reg7 ulations to implement the livestock environmental assist8 ance program established under this chapter.’’.

9 (c) CONFORMING PROGRAM CHANGES.—

10 (1) WETLANDS RESERVE PROGRAM.—

11 (A) IN GENERAL.—Section 1237 of the Food

12 Security Act of 1985 (16 U.S.C. 3837) is amend13 ed—

14 (i) in subsection (b)(2)—

15 (I) by striking ‘‘not less’’ and in16 serting ‘‘not more’’; and

17 (II) by striking ‘‘2000’’ and in18 serting ‘‘2002’’; and

19 (ii) in subsection (c), by striking

20 ‘‘2000’’ and inserting ‘‘2002’’.

21 (B) LENGTH OF EASEMENT.—Section

22 1237A(e) of the Food Security Act of 1985 (16

23 U.S.C. 3837a(e)) is amended by striking para24 graph (2) and inserting the following:
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1 ‘‘(2) shall be for 15 years, but in no case shall

2 be a permanent easement.’’.

3 (2) CONSERVATION RESERVE PROGRAM.—Section

4 1231(d) of the Food Security Act of 1985 (16 U.S.C.

5 3831(d)) is amended by striking ‘‘total of’’ and all

6 that follows through the period at the end of the sub7 section and inserting ‘‘total of 36,400,000 acres.’’.

8 Section 725 of the Agriculture, Rural Development,

9 Food and Drug Administration, and Related Agencies

10 Appropriations Act, 1996 (Public Law 104–37; 109

11 Stat. 332), is amended by striking the proviso relat12 ing to enrollment of new acres in 1997.

13 TITLE IV—AGRICULTURAL PRO14 MOTION AND EXPORT PRO15 GRAMS

16 SEC. 401. MARKET PROMOTION PROGRAM.

17 Effective as of October 1, 1995, section 211(c)(1) of the

18 Agricultural Trade Act of 1978 (7 U.S.C. 5641(c)(1)) is

19 amended—

20 (1) by striking ‘‘and’’ after ‘‘1991 through

21 1993,’’; and

22 (2) by striking ‘‘through 1997,’’ and inserting

23 ‘‘through 1995, and not more than $100,000,000 for

24 each of fiscal years 1996 through 2002,’’.
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1 SEC. 402. EXPORT ENHANCEMENT PROGRAM.

2 Effective as of October 1, 1995, section 301(e)(1) of the

3 Agricultural Trade Act of 1978 (7 U.S.C. 5651(e)(1)) is

4 amended to read as follows:

5 ‘‘(1) IN GENERAL.—The Commodity Credit Cor6 poration shall make available to carry out the pro7 gram established under this section not more than—

8 ‘‘(A) $350,000,000 for fiscal year 1996;

9 ‘‘(B) $350,000,000 for fiscal year 1997;

10 ‘‘(C) $500,000,000 for fiscal year 1998;

11 ‘‘(D) $550,000,000 for fiscal year 1999;

12 ‘‘(E) $579,000,000 for fiscal year 2000;

13 ‘‘(F) $478,000,000 for fiscal year 2001; and

14 ‘‘(G) $478,000,000 for fiscal year 2002.’’.

15 TITLE V—MISCELLANEOUS

16 SEC. 501. CROP INSURANCE.

17 (a) CATASTROPHIC RISK PROTECTION.—Section

18 508(b) of the Federal Crop Insurance Act (7 U.S.C.

19 1508(b)) is amended—

20 (1) in paragraph (4), by adding at the end the

21 following:

22 ‘‘(C) DELIVERY OF COVERAGE.—

23 ‘‘(i) IN GENERAL.—In full consultation

24 with approved insurance providers, the Sec25 retary may continue to offer catastrophic

26 risk protection in a State (or a portion of
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1 a State) through local offices of the Depart2 ment if the Secretary determines that there

3 is an insufficient number of approved in4 surance providers operating in the State or

5 portion to adequately provide catastrophic

6 risk protection coverage to producers.

7 ‘‘(ii) COVERAGE BY APPROVED INSUR8 ANCE PROVIDERS.—To the extent that cata9 strophic risk protection coverage by ap10 proved insurance providers is sufficiently

11 available in a State as determined by the

12 Secretary, only approved insurance provid13 ers may provide the coverage in the State.

14 ‘‘(iii) CURRENT POLICIES.—Subject to

15 clause (ii), all catastrophic risk protection

16 policies written by local offices of the De17 partment shall be transferred (including all

18 fees collected for the crop year in which the

19 approved insurance provider will assume

20 the policies) to the approved insurance pro21 vider for performance of all sales, service,

22 and loss adjustment functions.’’; and

23 (2) in paragraph (7), by striking subparagraph

24 (A) and inserting the following:
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1 ‘‘(A) IN GENERAL.—Effective for the spring2 planted 1996 and subsequent crops, to be eligible

3 for any payment or loan under title I of the Ag4 ricultural Market Transition Act or the Agricul5 tural Adjustment Act of 1938 (7 U.S.C. 1281 et

6 seq.), for the conservation reserve program, or for

7 any benefit described in section 371 of the Con8 solidated Farm and Rural Development Act (7

9 U.S.C. 2008f), a person shall—

10 ‘‘(i) obtain at least the catastrophic

11 level of insurance for each crop of economic

12 significance in which the person has an in13 terest; or

14 ‘‘(ii) provide a written waiver to the

15 Secretary that waives any eligibility for

16 emergency crop loss assistance in connection

17 with the crop.’’.

18 (b) COVERAGE OF SEED CROPS.—Section

19 519(a)(2)(B) of the Act (7 U.S.C. 1519(a)(2)(B)) is amend20 ed by inserting ‘‘seed crops,’’ after ‘‘turfgrass sod,’’.

21 SEC. 502. COLLECTION AND USE OF AGRICULTURAL QUAR22 ANTINE AND INSPECTION FEES.

23 Subsection (a) of section 2509 of the Food, Agriculture,

24 Conservation, and Trade Act of 1990 (21 U.S.C. 136a) is

25 amended to read as follows:
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1 ‘‘(a) QUARANTINE AND INSPECTION FEES.—

2 ‘‘(1) FEES AUTHORIZED.—The Secretary of Ag3 riculture may prescribe and collect fees sufficient—

4 ‘‘(A) to cover the cost of providing agricul5 tural quarantine and inspection services in con6 nection with the arrival at a port in the customs

7 territory of the United States, or the

8 preclearance or preinspection at a site outside

9 the customs territory of the United States, of an

10 international passenger, commercial vessel, com11 mercial aircraft, commercial truck, or railroad

12 car;

13 ‘‘(B) to cover the cost of administering this

14 subsection; and

15 ‘‘(C) through fiscal year 2002, to maintain

16 a reasonable balance in the Agricultural Quar17 antine Inspection User Fee Account established

18 under paragraph (5).

19 ‘‘(2) LIMITATION.—In setting the fees under

20 paragraph (1), the Secretary shall ensure that the

21 amount of the fees are commensurate with the costs of

22 agricultural quarantine and inspection services with

23 respect to the class of persons or entities paying the

24 fees. The costs of the services with respect to pas-
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1 sengers as a class includes the costs of related inspec2 tions of the aircraft or other vehicle.

3 ‘‘(3) STATUS OF FEES.—Fees collected under this

4 subsection by any person on behalf of the Secretary

5 are held in trust for the United States and shall be

6 remitted to the Secretary in such manner and at such

7 times as the Secretary may prescribe.

8 ‘‘(4) LATE PAYMENT PENALTIES.—If a person

9 subject to a fee under this subsection fails to pay the

10 fee when due, the Secretary shall assess a late pay11 ment penalty, and the overdue fees shall accrue inter12 est, as required by section 3717 of title 31, United

13 States Code.

14 ‘‘(5) AGRICULTURAL QUARANTINE INSPECTION

15 USER FEE ACCOUNT.—

16 ‘‘(A) ESTABLISHMENT.—There is estab17 lished in the Treasury of the United States a no18 year fund, to be known as the ‘Agricultural

19 Quarantine Inspection User Fee Account’, which

20 shall contain all of the fees collected under this

21 subsection and late payment penalties and inter22 est charges collected under paragraph (4)

23 through fiscal year 2002.

24 ‘‘(B) USE OF ACCOUNT.—For each of the

25 fiscal years 1996 through 2002, funds in the Ag-
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1 ricultural Quarantine Inspection User Fee Ac2 count shall be available, in such amounts as are

3 provided in advance in appropriations Acts, to

4 cover the costs associated with the provision of

5 agricultural quarantine and inspection services

6 and the administration of this subsection.

7 Amounts made available under this subpara8 graph shall be available until expended.

9 ‘‘(C) EXCESS FEES.—Fees and other

10 amounts collected under this subsection in any of

11 the fiscal years 1996 through 2002 in excess of

12 $100,000,000 shall be available for the purposes

13 specified in subparagraph (B) until expended,

14 without further appropriation.

15 ‘‘(6) USE OF AMOUNTS COLLECTED AFTER FIS16 CAL YEAR 2002.—After September 30, 2002, the unob17 ligated balance in the Agricultural Quarantine In18 spection User Fee Account and fees and other

19 amounts collected under this subsection shall be cred20 ited to the Department of Agriculture accounts that

21 incur the costs associated with the provision of agri22 cultural quarantine and inspection services and the

23 administration of this subsection. The fees and other

24 amounts shall remain available to the Secretary until

25 expended without fiscal year limitation.
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1 ‘‘(7) STAFF YEARS.—The number of full-time

2 equivalent positions in the Department of Agriculture

3 attributable to the provision of agricultural quar4 antine and inspection services and the administration

5 of this subsection shall not be counted toward the lim6 itation on the total number of full-time equivalent po7 sitions in all agencies specified in section 5(b) of the

8 Federal Workforce Restructuring Act of 1994 (Public

9 Law 103–226; 5 U.S.C. 3101 note) or other limita10 tion on the total number of full-time equivalent posi11 tions.’’.

12 SEC. 503. COMMODITY CREDIT CORPORATION INTEREST

13 RATE.

14 Notwithstanding any other provision of law, the

15 monthly Commodity Credit Corporation interest rate appli16 cable to loans provided for agricultural commodities by the

17 Corporation shall be 100 basis points greater than the rate

18 determined under the applicable interest rate formula in

19 effect on October 1, 1995.

20 SEC. 504. ESTABLISHMENT OF OFFICE OF RISK MANAGE21 MENT.

22 (a) ESTABLISHMENT.—The Department of Agriculture

23 Reorganization Act of 1994 is amended by inserting after

24 section 226 (7 U.S.C. 6932) the following new section:
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1 ‘‘SEC. 226A. OFFICE OF RISK MANAGEMENT.

2 ‘‘(a) ESTABLISHMENT.—Subject to subsection (e), the

3 Secretary shall establish and maintain in the Department

4 an independent Office of Risk Management.

5 ‘‘(b) FUNCTIONS OF THE OFFICE OF RISK MANAGE6 MENT.—The Office of Risk Management shall have jurisdic7 tion over the following functions:

8 ‘‘(1) Supervision of the Federal Crop Insurance

9 Corporation.

10 ‘‘(2) Administration and oversight of all aspects,

11 including delivery through local offices of the Depart12 ment, of all programs authorized under the Federal

13 Crop Insurance Act (7 U.S.C. 1501 et seq.).

14 ‘‘(3) Any pilot or other programs involving reve15 nue insurance, risk management savings accounts, or

16 the use of the futures market to manage risk and sup17 port farm income that may be established under the

18 Federal Crop Insurance Act or other law.

19 ‘‘(4) Such other functions as the Secretary con20 siders appropriate.

21 ‘‘(c) ADMINISTRATOR.—

22 ‘‘(1) The Office of Risk Management shall be

23 headed by an Administrator who shall be appointed

24 by the Secretary.
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1 ‘‘(2) The Administrator of the Office of Risk

2 Management shall also serve as Manager of the Fed3 eral Crop Insurance Corporation.

4 ‘‘(d) RESOURCES.—

5 ‘‘(1) FUNCTIONAL COORDINATION.—Certain func6 tions of the Office of Risk Management, such as

7 human resources, public affairs, and legislative af8 fairs, may be provided by a consolidation of such

9 functions under the Under Secretary of Agriculture

10 for Farm and Foreign Agricultural Services.

11 ‘‘(2) MINIMUM PROVISIONS.—Notwithstanding

12 paragraph (1) or any other provision of law or order

13 of the Secretary, the Secretary shall provide the Office

14 of Risk Management with human and capital re15 sources sufficient for the Office to carry out its func16 tions in a timely and efficient manner.’’.

17 (b) FISCAL YEAR 1996 FUNDING.—Not less than

18 $88,500,000 of the appropriation provided for the salaries

19 and expenses of the Consolidated Farm Services Agency in

20 the Agricultural, Rural Development, Food and Drug Ad21 ministration, and Related Agencies Appropriations Act,

22 1996 shall be available for the salaries and expenses of the

23 Office of Risk Management established under subsection (a).
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1 (c) CONFORMING AMENDMENT.—Section 226(b) of the

2 Act (7 U.S.C. 6932(b)) is amended by striking paragraph

3 (2).

4 SEC. 505. BUSINESS INTERRUPTION INSURANCE PROGRAM.

5 (a) ESTABLISHMENT OF PROGRAM.—Not later than

6 December 31, 1996, the Secretary of Agriculture shall im7 plement a program (to be known as the ‘‘Business Interrup8 tion Insurance Program’’), under which the producer of a

9 contract commodity could elect to obtain revenue insurance

10 coverage to ensure that the producer receives an indemnity

11 payment if the producer suffers a loss of revenue. The na12 ture and extent of the program and the manner of determin13 ing the amount of an indemnity payment shall be estab14 lished by the Secretary.

15 (b) REPORT ON PROGRESS AND PROPOSED EXPAN16 SION.—Not later than January 1, 1998, the Secretary shall

17 submit to the Commission on 21st Century Production Ag18 riculture the data and results of the program through Octo19 ber 1, 1997. In addition, the Secretary shall submit infor20 mation and recommendations to the Commission with re21 spect to the program that will serve as the basis for the

22 Secretary to offer revenue insurance to agricultural produc23 ers, at one or more levels of coverage, that—

24 (1) is in addition to, or in lieu of, catastrophic

25 and higher levels of crop insurance;
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1 (2) is offered through reinsurance arrangements

2 with private insurance companies;

3 (3) is actuarially sound; and

4 (4) requires the payment of premiums and ad5 ministrative fees by participating producers.

6 (c) CONTRACT COMMODITY DEFINED.—In this section,

7 the term ‘‘contract commodity’’ means a crop of wheat,

8 corn, grain sorghum, oats, barley, upland cotton, or rice.

9 SEC. 506. CONTINUATION OF OPTIONS PILOT PROGRAM.

10 During the 1996 through 2002 crop years, the Sec11 retary of Agriculture may continue to conduct the options

12 pilot program authorized by the Options Pilot Program Act

13 of 1990 (subtitle E of title XI of Public Law 101–624; 104

14 Stat. 3518; 7 U.S.C. 1421 note). To the extent that the Sec15 retary decides to continue the options pilot program, the

16 Secretary shall modify the terms and conditions of the pilot

17 program to reflect the changes to law made by this Act.

18 TITLE VI—COMMISSION ON 21ST

19 CENTURY PRODUCTION AGRI20 CULTURE

21 SEC. 601. ESTABLISHMENT.

22 There is hereby established a commission to be known

23 as the ‘‘Commission on 21st Century Production Agri24 culture’’ (in this title referred to as the ‘‘Commission’’).
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1 SEC. 602. COMPOSITION.

2 (a) MEMBERSHIP AND APPOINTMENT.—The Commis3 sion shall be composed of 11 members, appointed as follows:

4 (1) Three members shall be appointed by the

5 President.

6 (2) Four members shall be appointed by the

7 Chairman of the Committee on Agriculture of the

8 House of Representatives in consultation with the

9 ranking minority member of the Committee.

10 (3) Four members shall be appointed by the

11 Chairman of the Committee on Agriculture, Nutri12 tion, and Forestry of the Senate in consultation with

13 the ranking minority member of the Committee.

14 (b) QUALIFICATIONS.—At least one of the members ap15 pointed under each of the paragraphs (1), (2), and (3) of

16 subsection (a) shall be an individual who is primarily in17 volved in production agriculture. All other members of the

18 Commission shall be appointed from among individuals

19 having knowledge and experience in agricultural produc20 tion, marketing, finance, or trade.

21 (c) TERM OF MEMBERS; VACANCIES.—Members of the

22 Commission shall be appointed for the life of the Commis23 sion. A vacancy on the Commission shall not affect its pow24 ers, but shall be filled in the same manner as the original

25 appointment was made.
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1 (d) TIME FOR APPOINTMENT; FIRST MEETING.—The

2 members of the Commission shall be appointed not later

3 than October 1, 1997. The Commission shall convene its

4 first meeting to carry out its duties under this Act 30 days

5 after six members of the Commission have been appointed.

6 (e) CHAIRMAN.—The chairman of the Commission

7 shall be designated jointly by the Chairman of the Commit8 tee on Agriculture of the House of Representatives and the

9 Chairman of the Committee on Agriculture, Nutrition, and

10 Forestry of the Senate from among the members of the Com11 mission.

12 SEC. 603. COMPREHENSIVE REVIEW OF PAST AND FUTURE

13 OF PRODUCTION AGRICULTURE.

14 (a) INITIAL REVIEW.—The Commission shall conduct

15 a comprehensive review of changes in the condition of pro16 duction agriculture in the United States since the date of

17 the enactment of this Act and the extent to which such

18 changes are the result of the amendments made by this Act.

19 The review shall include the following:

20 (1) An assessment of the initial success of pro21 duction flexibility contracts under section 103 in sup22 porting the economic viability of farming in the Unit23 ed States.

24 (2) An assessment of the food security situation

25 in the United States in the areas of trade, consumer
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1 prices, international competitiveness of United States

2 production agriculture, food supplies, and humani3 tarian relief.

4 (3) An assessment of the changes in farmland

5 values and agricultural producer incomes since the

6 date of the enactment of this Act.

7 (4) An assessment of the extent to which regu8 latory relief for agricultural producers has been en9 acted and implemented, including the application of

10 cost/benefit principles in the issuance of agricultural

11 regulations.

12 (5) An assessment of the extent to which tax re13 lief for agricultural producers has been enacted in the

14 form of capital gains tax reductions, estate tax ex15 emptions, and mechanisms to average tax loads over

16 high and low income years.

17 (6) An assessment of the effect of any Govern18 ment interference in agricultural export markets, such

19 as the imposition of trade embargoes, and the degree

20 of implementation and success of international trade

21 agreements.

22 (7) An assessment of the likely affect of the sale,

23 lease, or transfer of farm poundage quota for peanuts

24 across State lines.
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1 (b) SUBSEQUENT REVIEW.—The Commission shall

2 conduct a comprehensive review of the future of production

3 agriculture in the United States and the appropriate role

4 of the Federal Government in support of production agri5 culture. The review shall include the following:

6 (1) An assessment of changes in the condition of

7 production agriculture in the United States since the

8 initial review conducted under subsection (a).

9 (2) Identification of the appropriate future rela10 tionship of the Federal Government with production

11 agriculture after 2002.

12 (3) An assessment of the personnel and infra13 structure requirements of the Department of Agri14 culture necessary to support the future relationship of

15 the Federal Government with production agriculture.

16 (c) RECOMMENDATIONS.—In carrying out the subse17 quent review under subsection (b), the Commission shall de18 velop specific recommendations for legislation to achieve the

19 appropriate future relationship of the Federal Government

20 with production agriculture identified under subsection

21 (a)(2).

22 SEC. 604. REPORTS.

23 (a) REPORT ON INITIAL REVIEW.—Not later than

24 June 1, 1998, the Commission shall submit to the President,

25 the Committee on Agriculture of the House of Representa-
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1 tives, and the Committee on Agriculture, Nutrition, and

2 Forestry of the Senate a report containing the results of

3 the initial review conducted under section 603(a).

4 (b) REPORT ON SUBSEQUENT REVIEW.—Not later

5 than January 1, 2001, the Commission shall submit to the

6 President and the congressional committees specified in sub7 section (a) a report containing the results of the subsequent

8 review conducted under section 603(b).

9 SEC. 605. POWERS.

10 (a) HEARINGS.—The Commission may, for the pur11 pose of carrying out this Act, conduct such hearings, sit

12 and act at such times, take such testimony, and receive such

13 evidence, as the Commission considers appropriate.

14 (b) ASSISTANCE FROM OTHER AGENCIES.—The Com15 mission may secure directly from any department or agen16 cy of the Federal Government such information as may be

17 necessary for the Commission to carry out its duties under

18 this Act. Upon request of the chairman of the Commission,

19 the head of the department or agency shall, to the extent

20 permitted by law, furnish such information to the Commis21 sion.

22 (c) MAIL.—The Commission may use the United

23 States mails in the same manner and under the same condi24 tions as the departments and agencies of the Federal Gov25 ernment.
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1 (d) ASSISTANCE FROM SECRETARY.—The Secretary of

2 Agriculture shall provide to the Commission appropriate of3 fice space and such reasonable administrative and support

4 services as the Commission may request.

5 SEC. 606. COMMISSION PROCEDURES.

6 (a) MEETINGS.—The Commission shall meet on a reg7 ular basis (as determined by the chairman) and at the call

8 of the chairman or a majority of its members.

9 (b) QUORUM.—A majority of the members of the Com10 mission shall constitute a quorum for the transaction of

11 business.

12 SEC. 607. PERSONNEL MATTERS.

13 (a) COMPENSATION.—Each member of the Commission

14 shall serve without compensation, but shall be allowed travel

15 expenses including per diem in lieu of subsistence, as au16 thorized by section 5703 of title 5, United States Code, when

17 engaged in the performance of Commission duties.

18 (b) STAFF.—The Commission shall appoint a staff di19 rector, who shall be paid at a rate not to exceed the maxi20 mum rate of basic pay under section 5376 of title 5, United

21 States Code, and such professional and clerical personnel

22 as may be reasonable and necessary to enable the Commis23 sion to carry out its duties under this Act without regard

24 to the provisions of title 5, United States Code, governing

25 appointments in the competitive service, and without re-
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1 gard to the provisions of chapter 51 and subchapter III of

2 chapter 53 of such title, or any other provision of law, relat3 ing to the number, classification, and General Schedule

4 rates. No employee appointed under this subsection (other

5 than the staff director) may be compensated at a rate to

6 exceed the maximum rate applicable to level GS–15 of the

7 General Schedule.

8 (c) DETAILED PERSONNEL.—Upon request of the

9 chairman of the Commission, the head of any department

10 or agency of the Federal Government is authorized to detail,

11 without reimbursement, any personnel of such department

12 or agency to the Commission to assist the Commission in

13 carrying out its duties under this section. The detail of any

14 such personnel may not result in the interruption or loss

15 of civil service status or privilege of such personnel.

16 SEC. 608. TERMINATION OF COMMISSION.

17 The Commission shall terminate upon submission of

18 the final report required by section 604.

19 TITLE VII—EXTENSION OF

20 CERTAIN AUTHORITIES

21 SEC. 701. EXTENSION OF AUTHORITY UNDER PUBLIC LAW

22 480.

23 Section 408 of the Agricultural Trade Development

24 and Assistance Act of 1954 (7 U.S.C. 1736b) is amended

25 by striking ‘‘1995’’ and inserting ‘‘1996’’.
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1 SEC. 702. EXTENSION OF FOOD FOR PROGRESS PROGRAM.

2 Section 1110 of the Food Security Act of 1985 (7

3 U.S.C. 1736o), also known as the Food for Progress Act of

4 1985, is amended—

5 (1) in subsection (k), by striking ‘‘1995’’ and in6 serting ‘‘1996’’; and

7 (2) in subsection (l), by striking ‘‘1995’’ and in8 serting ‘‘1996’’.

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