I

104TH CONGRESS

2D SESSION H. R. 2854

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

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 SEC. 1. TABLE OF CONTENTS.

4 The table of contents of this Act is as follows:

Sec. 1. Table of contents.

TITLE I—AGRICULTURAL MARKET TRANSITION PROGRAM

Sec. 101. Short title.

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.
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Sec. 108. Administration.

Sec. 109. Elimination of permanent price support authority.

Sec. 110. Effect of amendments.

TITLE II—CONSERVATION

Sec. 201. Conservation.

TITLE III—AGRICULTURAL PROMOTION AND EXPORT PROGRAMS

Sec. 301. Market promotion program.

Sec. 302. Export enhancement program.

TITLE IV—MISCELLANEOUS

Sec. 401. Crop insurance.

Sec. 402. Collection and use of agricultural quarantine and inspection fees.

Sec. 403. Commodity Credit Corporation interest rate.

TITLE V—COMMISSION ON 21ST CENTURY PRODUCTION

AGRICULTURE

Sec. 501. Establishment.

Sec. 502. Composition.

Sec. 503. Comprehensive review of past and future of production agriculture.

Sec. 504. Reports.

Sec. 505. Powers.

Sec. 506. Commission procedures.

Sec. 507. Personnel matters.

Sec. 508. Termination of Commission.

1 TITLE I—AGRICULTURAL

2 MARKET TRANSITION PROGRAM

3 SEC. 101. SHORT TITLE.

4 This title may be cited as the ‘‘Agricultural Market

5 Transition Act’’.

6 SEC. 102. DEFINITIONS.

7 In this title:

8 (1) CONSIDERED PLANTED.—The term ‘‘con9 sidered planted’’ means acreage that is considered

10 planted under title V of the Agricultural Act of 1949

11 (7 U.S.C. 1461 et seq.) (as in effect prior to the

12 amendment made by section 109(b)(2)).
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1 (2) CONTRACT.—The term ‘‘contract’’ means a

2 production flexibility contract entered into under

3 section 103.

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

5 acreage’’ means 1 or more crop acreage bases estab6 lished for contract commodities under title V of the

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

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

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

10 amendment made by section 109(b)(2)).

11 (4) CONTRACT COMMODITY.—The term ‘‘con12 tract commodity’’ means wheat, corn, grain sor13 ghum, barley, oats, upland cotton, and rice.

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

15 payment’’ means a payment made under section 103

16 pursuant to a contract.

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

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

19 means the United States Department of Agriculture.

20 (8) FARM PROGRAM PAYMENT YIELD.—The

21 term ‘‘farm program payment yield’’ means the farm

22 program payment yield established for the 1995 crop

23 of a contract commodity under title V of the Agri24 cultural Act of 1949 (as in effect prior to the

25 amendment made by section 109(b)(2)).
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1 (9) LOAN COMMODITY.—The term ‘‘loan com2 modity’’ means each contract commodity, extra long

3 staple cotton, and oilseeds.

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

5 crop of soybeans, sunflower seed, rapeseed, canola,

6 safflower, flaxseed, mustard seed, or, if designated

7 by the Secretary, other oilseeds.

8 (11) PERSON.—The term ‘‘person’’ means an

9 individual, partnership, firm, joint-stock company,

10 corporation, association, trust, estate, or State agen11 cy.

12 (12) PRODUCER.—

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

14 means a person who, as owner, landlord, ten15 ant, or sharecropper, shares in the risk of pro16 ducing a crop, and is entitled to share in the

17 crop available for marketing from the farm, or

18 would have shared had the crop been produced.

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

20 includes a person growing hybrid seed under

21 contract. In determining the interest of a grow22 er of hybrid seed in a crop, the Secretary shall

23 not take into consideration the existence of a

24 hybrid seed contract.
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1 (13) PROGRAM.—The term ‘‘program’’ means

2 the agricultural market transition program estab3 lished under this title.

4 (14) SECRETARY.—The term ‘‘Secretary’’

5 means the Secretary of Agriculture.

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

7 the several States of the United States, the District

8 of Columbia, the Commonwealth of Puerto Rico, and

9 any other territory or possession of the United

10 States.

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

12 States’’, when used in a geographical sense, means

13 all of the States.

14 SEC. 103. PRODUCTION FLEXIBILITY CONTRACTS.

15 (a) CONTRACTS AUTHORIZED.—

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

17 practicable after the date of the enactment of this

18 title, the Secretary shall offer to enter into a con19 tract with an eligible owner or operator described in

20 paragraph (2) on a farm containing eligible farm21 land. Under the terms of a contract, the owner or

22 operator shall agree, in exchange for annual contract

23 payments, to comply with—
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1 (A) the conservation plan for the farm pre2 pared in accordance with section 1212 of the

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

4 (B) wetland protection requirements appli5 cable to the farm under subtitle C of title XII

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

7 (C) the planting flexibility requirements of

8 subsection (j).

9 (2) ELIGIBLE OWNERS AND OPERATORS DE10 SCRIBED.—The following persons shall be considered

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

12 contract:

13 (A) An owner of eligible farmland who as14 sumes all of the risk of producing a crop.

15 (B) An owner of eligible farmland who

16 shares in the risk of producing a crop.

17 (C) An operator of eligible farmland with

18 a share-rent lease of the eligible farmland, re19 gardless of the length of the lease, if the owner

20 enters into the same contract.

21 (D) An operator of eligible farmland who

22 cash rents the eligible farmland under a lease

23 expiring on or after September 30, 2002, in

24 which case the consent of the owner is not re25 quired.
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1 (E) An operator of eligible farmland who

2 cash rents the eligible farmland under a lease

3 expiring before September 30, 2002, if the

4 owner consents to the contract.

5 (F) An owner of eligible farmland who

6 cash rents the eligible farmland and the lease

7 term expires before September 30, 2002, but

8 only if the actual operator of the farm declines

9 to enter into a contract. In the case of an

10 owner covered by this subparagraph, contract

11 payments shall not begin under a contract until

12 the fiscal year following the fiscal year in which

13 the lease held by the nonparticipating operator

14 expires.

15 (G) An owner or operator described in a

16 preceding subparagraph regardless of whether

17 the owner or operator purchased catastrophic

18 risk protection for a fall-planted 1996 crop

19 under section 508(b) of the Federal Crop Insur20 ance Act (7 U.S.C. 1508(b)).

21 (3) TENANTS AND SHARECROPPERS.—In carry22 ing out this section, the Secretary shall provide ade23 quate safeguards to protect the interests of opera24 tors who are tenants and sharecroppers.

25 (b) ELEMENTS.—
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1 (1) TIME FOR CONTRACTING.—

2 (A) DEADLINE.—Except as provided in

3 subparagraph (B), the Secretary may not enter

4 into a contract after April 15, 1996.

5 (B) CONSERVATION RESERVE LANDS.—

6 (i) IN GENERAL.—At the beginning of

7 each fiscal year, the Secretary shall allow

8 an eligible owner or operator on a farm

9 covered by a conservation reserve contract

10 entered into under section 1231 of the

11 Food Security Act of 1985 (16 U.S.C.

12 3831) that terminates after the date speci13 fied in subparagraph (A) to enter into or

14 expand a production flexibility contract to

15 cover the contract acreage of the farm that

16 was subject to the former conservation re17 serve contract.

18 (ii) AMOUNT.—Contract payments

19 made for contract acreage under this sub20 paragraph shall be made at the rate and

21 amount applicable to the annual contract

22 payment level for the applicable crop.

23 (2) DURATION OF CONTRACT.—

24 (A) BEGINNING DATE.—A contract shall

25 begin with—
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1 (i) the 1996 crop of a contract com2 modity; or

3 (ii) in the case of acreage that was

4 subject to a conservation reserve contract

5 described in paragraph (1)(B), the date

6 the production flexibility contract was en7 tered into or expanded to cover the acre8 age.

9 (B) ENDING DATE.—A contract shall ex10 tend through the 2002 crop.

11 (3) ESTIMATION OF CONTRACT PAYMENTS.—At

12 the time the Secretary enters into a contract, the

13 Secretary shall provide an estimate of the minimum

14 contract payments anticipated to be made during at

15 least the first fiscal year for which contract pay16 ments will be made.

17 (c) ELIGIBLE FARMLAND DESCRIBED.—Land shall

18 be considered to be farmland eligible for coverage under

19 a contract only if the land has contract acreage attrib20 utable to the land and—

21 (1) for at least 1 of the 1991 through 1995

22 crops, at least a portion of the land was enrolled in

23 the acreage reduction program authorized for a crop

24 of a contract commodity under section 101B, 103B,

25 105B, or 107B of the Agricultural Act of 1949 (as
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1 in effect prior to the amendment made by section

2 109(b)(2)) or was considered planted;

3 (2) was subject to a conservation reserve con4 tract under section 1231 of the Food Security Act

5 of 1985 (16 U.S.C. 3831) whose term expired, or

6 was voluntarily terminated, on or after January 1,

7 1995; or

8 (3) is released from coverage under a conserva9 tion reserve contract by the Secretary during the pe10 riod beginning on January 1, 1995, and ending on

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

12 (d) TIME FOR PAYMENT.—

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

14 shall be made not later than September 30 of each

15 of fiscal years 1996 through 2002.

16 (2) ADVANCE PAYMENTS.—

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

18 the owner or operator, 50 percent of the con19 tract payment for fiscal year 1996 shall be

20 made not later than June 15, 1996.

21 (B) SUBSEQUENT FISCAL YEARS.—At the

22 option of the owner or operator for fiscal year

23 1997 and each subsequent fiscal year, 50 per24 cent of the annual contract payment shall be

25 made on December 15.
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1 (e) AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS

2 FOR EACH FISCAL YEAR.—

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

4 maximum extent practicable, expend on a fiscal year

5 basis the following amounts to satisfy the obligations

6 of the Secretary under all contracts:

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

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

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

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

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

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

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

14 (2) ALLOCATION.—The amount made available

15 for a fiscal year under paragraph (1) shall be allo16 cated as follows:

17 (A) For wheat, 26.26 percent.

18 (B) For corn, 46.22 percent.

19 (C) For grain sorghum, 5.11 percent.

20 (D) For barley, 2.16 percent.

21 (E) For oats, 0.15 percent.

22 (F) For upland cotton, 11.63 percent.

23 (G) For rice, 8.47 percent.
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1 (3) ADJUSTMENT.—The Secretary shall adjust

2 the amounts allocated for each contract commodity

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

4 (A) subtracting an amount equal to the

5 amount, if any, necessary to satisfy payment re6 quirements under sections 101B, 103B, 105B,

7 and 107B of the Agricultural Act of 1949 (as

8 in effect prior to the amendment made by sec9 tion 109(b)(2)) for the 1994 and 1995 crops of

10 the commodity;

11 (B) adding an amount equal to the sum of

12 all repayments of deficiency payments received

13 under section 114(a)(2) of the Act (as so in ef14 fect) for the commodity;

15 (C) to the maximum extent practicable,

16 adding an amount equal to the sum of all con17 tract payments withheld by the Secretary, at

18 the request of an owner or operator subject to

19 a contract, as an offset against repayments of

20 deficiency payments otherwise required under

21 section 114(a)(2) of the Act (as so in effect) for

22 the commodity; and

23 (D) adding an amount equal to the sum of

24 all refunds of contract payments received dur-
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1 ing the preceding fiscal year under subsection

2 (h) for the commodity.

3 (f) DETERMINATION OF CONTRACT PAYMENTS.—

4 (1) INDIVIDUAL PAYMENT QUANTITY OF CON5 TRACT COMMODITIES.—For each contract, the pay6 ment quantity of a contract commodity for each fis7 cal year shall be equal to the product of—

8 (A) 85 percent of the contract acreage;

9 and

10 (B) the farm program payment yield.

11 (2) ANNUAL PAYMENT QUANTITY OF CONTRACT

12 COMMODITIES.—The payment quantity of each con13 tract commodity covered by all contracts for each

14 fiscal year shall equal the sum of the amounts cal15 culated under paragraph (1) for each individual con16 tract.

17 (3) ANNUAL PAYMENT RATE.—The payment

18 rate for a contract commodity for each fiscal year

19 shall be equal to—

20 (A) the amount made available under sub21 section (e) for the contract commodity for the

22 fiscal year; divided by

23 (B) the amount determined under para24 graph (2) for the fiscal year.
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1 (4) ANNUAL PAYMENT AMOUNT.—The amount

2 to be paid under a contract in effect for each fiscal

3 year with respect to a contract commodity shall be

4 equal to the product of—

5 (A) the payment quantity determined

6 under paragraph (1) with respect to the con7 tract; and

8 (B) the payment rate in effect under para9 graph (3).

10 (5) ASSIGNMENT OF CONTRACT PAYMENTS.—

11 The provisions of section 8(g) of the Soil Conserva12 tion and Domestic Allotment Act (16 U.S.C.

13 590h(g)) (relating to assignment of payments) shall

14 apply to contract payments under this subsection.

15 The owner or operator making the assignment, or

16 the assignee, shall provide the Secretary with notice,

17 in such manner as the Secretary may require in the

18 contract, of any assignment made under this para19 graph.

20 (6) SHARING OF CONTRACT PAYMENTS.—The

21 Secretary shall provide for the sharing of contract

22 payments among the owners and operators subject

23 to the contract on a fair and equitable basis.

24 (g) PAYMENT LIMITATION.—The total amount of

25 contract payments made to a person under a contract dur-
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1 ing any fiscal year may not exceed the payment limitations

2 established under sections 1001 through 1001C of the

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

4 3).

5 (h) EFFECT OF VIOLATION.—

6 (1) TERMINATION OF CONTRACT.—Except as

7 provided in paragraph (2), if an owner or operator

8 subject to a contract violates the conservation plan

9 for the farm containing eligible farmland under the

10 contract, wetland protection requirements applicable

11 to the farm, or the planting flexibility requirements

12 of subsection (j), the Secretary shall terminate the

13 contract with respect to the owner or operator on

14 each farm in which the owner or operator has an in15 terest. On the termination, the owner or operator

16 shall forfeit all rights to receive future contract pay17 ments on each farm in which the owner or operator

18 has an interest and shall refund to the Secretary all

19 contract payments received by the owner or operator

20 during the period of the violation, together with in21 terest on the contract payments as determined by

22 the Secretary.

23 (2) REFUND OR ADJUSTMENT.—If the Sec24 retary determines that a violation does not warrant

25 termination of the contract under paragraph (1), the
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1 Secretary may require the owner or operator subject

2 to the contract—

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

4 the contract payments received by the owner or

5 operator during the period of the violation, to6 gether with interest on the contract payments

7 as determined by the Secretary; or

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

9 future contract payments that is proportionate

10 to the severity of the violation, as determined

11 by the Secretary.

12 (3) FORECLOSURE.—An owner or operator sub13 ject to a contract may not be required to make re14 payments to the Secretary of amounts received

15 under the contract if the contract acreage has been

16 foreclosed on and the Secretary determines that for17 giving the repayments is appropriate in order to pro18 vide fair and equitable treatment. This paragraph

19 shall not void the responsibilities of such an owner

20 or operator under the contract if the owner or opera21 tor continues or resumes operation, or control, of the

22 contract acreage. On the resumption of operation or

23 control over the contract acreage by the owner or

24 operator, the provisions of the contract in effect on

25 the date of the foreclosure shall apply.
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1 (4) REVIEW.—A determination of the Secretary

2 under this subsection shall be considered to be an

3 adverse decision for purposes of the availability of

4 administrative review of the determination.

5 (i) TRANSFER OF INTEREST IN LANDS SUBJECT TO

6 CONTRACT.—

7 (1) EFFECT OF TRANSFER.—Except as pro8 vided in paragraph (2), the transfer by an owner or

9 operator subject to a contract of the right and inter10 est of the owner or operator in the contract acreage

11 shall result in the termination of the contract with

12 respect to the acreage, effective on the date of the

13 transfer, unless the transferee of the acreage agrees

14 with the Secretary to assume all obligations of the

15 contract. At the request of the transferee, the Sec16 retary may modify the contract if the modifications

17 are consistent with the objectives of this section as

18 determined by the Secretary.

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

20 is entitled to a contract payment dies, becomes in21 competent, or is otherwise unable to receive the con22 tract payment, the Secretary shall make the pay23 ment, in accordance with regulations prescribed by

24 the Secretary.

25 (j) PLANTING FLEXIBILITY.—
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1 (1) PERMITTED CROPS.—Subject to paragraph

2 (2)(A), any commodity or crop may be planted on

3 contract acreage.

4 (2) LIMITATIONS.—

5 (A) IN GENERAL.—Except as provided in

6 subparagraph (B), the planting of any fruit or

7 vegetable, and unlimited haying and grazing,

8 shall be permitted on not more than 15 percent

9 of the contract acreage.

10 (B) EXCEPTION.—Subparagraph (A) shall

11 not apply to the planting of contract commod12 ities, lentils, mung beans, and dry peas on con13 tract acreage.

14 (3) ALFALFA.—The planting and harvesting of

15 alfalfa on contract acreage shall be unlimited, except

16 that the quantity of acreage on which the contract

17 payment of the owner or operator would otherwise

18 be based shall be reduced for each acre planted to

19 alfalfa in excess of the limitation in effect under

20 paragraph (2)(A) for the contract.

21 (4) HAYING AND GRAZING.—Subject to para22 graphs (2) and (3), haying and grazing of contract

23 acreage shall be permitted, except during any con24 secutive 5-month period that is established by the

25 State committee established under section 8(b) of
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1 the Soil Conservation and Domestic Allotment Act

2 (16 U.S.C. 590h(b)) for a State. The 5-month pe3 riod shall be established during the period beginning

4 April 1, and ending October 31, of a year. In the

5 case of a natural disaster, the Secretary may permit

6 unlimited haying and grazing on the contract acre7 age.

8 (k) PRODUCTION FLEXIBILITY CONTRACTS.—Not9 withstanding any other provision of law, no order issued

10 for any fiscal year under section 252 of the Balanced

11 Budget and Emergency Deficit Control Act of 1985 (2

12 U.S.C. 902) shall affect any payment under any produc13 tion flexibility contract.

14 SEC. 104. NONRECOURSE MARKETING ASSISTANCE LOANS

15 AND LOAN DEFICIENCY PAYMENTS.

16 (a) AVAILABILITY OF NONRECOURSE LOANS.—

17 (1) AVAILABILITY.—For each of the 1996

18 through 2002 crops of each loan commodity, the

19 Secretary shall make available to producers on a

20 farm nonrecourse marketing assistance loans for

21 loan commodities produced on the farm. The loans

22 shall be made under terms and conditions that are

23 prescribed by the Secretary and at the loan rate es24 tablished under subsection (b) for the loan commod25 ity.
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1 (2) ELIGIBLE PRODUCTION.—The following

2 production shall be eligible for a marketing assist3 ance loan under this section:

4 (A) In the case of a marketing assistance

5 loan for a contract commodity, any production

6 by a producer who has entered into a produc7 tion flexibility contract.

8 (B) In the case of a marketing assistance

9 loan for extra long staple cotton and oilseeds,

10 any production.

11 (b) LOAN RATES.—

12 (1) WHEAT.—

13 (A) LOAN RATE.—Subject to subparagraph

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

15 loan for wheat shall be—

16 (i) not less than 85 percent of the

17 simple average price received by producers

18 of wheat, as determined by the Secretary,

19 during the marketing years for the imme20 diately preceding 5 crops of wheat, exclud21 ing the year in which the average price was

22 the highest and the year in which the aver23 age price was the lowest in the period; but

24 (ii) not more than $2.58 per bushel.
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1 (B) STOCKS TO USE RATIO ADJUST2 MENT.—If the Secretary estimates for any mar3 keting year that the ratio of ending stocks of

4 wheat to total use for the marketing year will

5 be—

6 (i) equal to or greater than 30 per7 cent, the Secretary may reduce the loan

8 rate for wheat for the corresponding crop

9 by an amount not to exceed 10 percent in

10 any year;

11 (ii) less than 30 percent but not less

12 than 15 percent, the Secretary may reduce

13 the loan rate for wheat for the correspond14 ing crop by an amount not to exceed 5 per15 cent in any year; or

16 (iii) less than 15 percent, the Sec17 retary may not reduce the loan rate for

18 wheat for the corresponding crop.

19 (C) NO EFFECT ON FUTURE YEARS.—Any

20 reduction in the loan rate for wheat under sub21 paragraph (B) shall not be considered in deter22 mining the loan rate for wheat for subsequent

23 years.

24 (2) FEED GRAINS.—
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1 (A) LOAN RATE FOR CORN.—Subject to

2 subparagraph (B), the loan rate for a market3 ing assistance loan for corn shall be—

4 (i) not less than 85 percent of the

5 simple average price received by producers

6 of corn, as determined by the Secretary,

7 during the marketing years for the imme8 diately preceding 5 crops of corn, excluding

9 the year in which the average price was the

10 highest and the year in which the average

11 price was the lowest in the period; but

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

13 (B) STOCKS TO USE RATIO ADJUST14 MENT.—If the Secretary estimates for any mar15 keting year that the ratio of ending stocks of

16 corn to total use for the marketing year will

17 be—

18 (i) equal to or greater than 25 per19 cent, the Secretary may reduce the loan

20 rate for corn for the corresponding crop by

21 an amount not to exceed 10 percent in any

22 year;

23 (ii) less than 25 percent but not less

24 than 12.5 percent, the Secretary may re25 duce the loan rate for corn for the cor-
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1 responding crop by an amount not to ex2 ceed 5 percent in any year; or

3 (iii) less than 12.5 percent the Sec4 retary may not reduce the loan rate for

5 corn for the corresponding crop.

6 (C) NO EFFECT ON FUTURE YEARS.—Any

7 reduction in the loan rate for corn under sub8 paragraph (B) shall not be considered in deter9 mining the loan rate for corn for subsequent

10 years.

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

12 for a marketing assistance loan for grain sor13 ghum, barley, and oats, respectively, shall be es14 tablished at such level as the Secretary deter15 mines is fair and reasonable in relation to the

16 rate that loans are made available for corn, tak17 ing into consideration the feeding value of the

18 commodity in relation to corn.

19 (3) UPLAND COTTON.—

20 (A) LOAN RATE.—Subject to subparagraph

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

22 loan for upland cotton shall be established by

23 the Secretary at such loan rate, per pound, as

24 will reflect for the base quality of upland cot25 ton, as determined by the Secretary, at average
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1 locations in the United States a rate that is not

2 less than the smaller of—

3 (i) 85 percent of the average price

4 (weighted by market and month) of the

5 base quality of cotton as quoted in the des6 ignated United States spot markets during

7 3 years of the 5-year period ending July

8 31 in the year in which the loan rate is an9 nounced, excluding the year in which the

10 average price was the highest and the year

11 in which the average price was the lowest

12 in the period; or

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

14 15-week period beginning July 1 of the

15 year in which the loan rate is announced,

16 of the 5 lowest-priced growths of the

growths quoted for Middling 13 17 ⁄32-inch cot18 ton C.I.F. Northern Europe (adjusted

19 downward by the average difference during

20 the period April 15 through October 15 of

21 the year in which the loan is announced

22 between the average Northern European

23 price quotation of such quality of cotton

24 and the market quotations in the des25 ignated United States spot markets for the
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1 base quality of upland cotton), as deter2 mined by the Secretary.

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

4 marketing assistance loan for upland cotton

5 shall not be less than $0.50 per pound or more

6 than $0.5192 per pound.

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

8 rate for a marketing assistance loan for extra long

9 staple cotton shall be—

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

11 average price received by producers of extra

12 long staple cotton, as determined by the Sec13 retary, during 3 years of the 5 previous market14 ing years, excluding the year in which the aver15 age price was the highest and the year in which

16 the average price was the lowest in the period;

17 but

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

19 (5) RICE.—The loan rate for a marketing as20 sistance loan for rice shall be $6.50 per hundred21 weight.

22 (6) OILSEEDS.—

23 (A) SOYBEANS.—The loan rate for a mar24 keting assistance loan for soybeans shall be

25 $4.92 per bushel.
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1 (B) SUNFLOWER SEED, CANOLA,

2 RAPESEED, SAFFLOWER, MUSTARD SEED, AND

3 FLAXSEED.—The loan rates for a marketing as4 sistance loan for sunflower seed, canola,

5 rapeseed, safflower, mustard seed, and flaxseed,

6 individually, shall be $0.087 per pound.

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

8 a marketing assistance loan for other oilseeds

9 shall be established at such level as the Sec10 retary determines is fair and reasonable in rela11 tion to the loan rate available for soybeans, ex12 cept in no event shall the rate for the oilseeds

13 (other than cottonseed) be less than the rate es14 tablished for soybeans on a per-pound basis for

15 the same crop.

16 (c) TERM OF LOAN.—In the case of each loan com17 modity (other than upland cotton or extra long staple cot18 ton), a marketing assistance loan under subsection (a)

19 shall have a term of 9 months beginning on the first day

20 of the first month after the month in which the loan is

21 made. A marketing assistance loan for upland cotton or

22 extra long staple cotton shall have a term of 10 months

23 beginning on the first day of the first month after the

24 month in which the loan is made. The Secretary may not
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•HR 2854 IH

1 extend the term of a marketing assistance loan for any

2 loan commodity.

3 (d) REPAYMENT.—

4 (1) REPAYMENT RATES FOR WHEAT AND FEED

5 GRAINS.—The Secretary shall permit a producer to

6 repay a marketing assistance loan under subsection

7 (a) for wheat, corn, grain sorghum, barley, and oats

8 at a level that the Secretary determines will—

9 (A) minimize potential loan forfeitures;

10 (B) minimize the accumulation of stocks of

11 the commodities by the Federal Government;

12 (C) minimize the cost incurred by the Fed13 eral Government in storing the commodities;

14 and

15 (D) allow the commodities produced in the

16 United States to be marketed freely and com17 petitively, both domestically and internationally.

18 (2) REPAYMENT RATES FOR UPLAND COTTON

19 AND RICE.—The Secretary shall permit producers to

20 repay a marketing assistance loan under subsection

21 (a) for upland cotton and rice at a level that is the

22 lesser of—

23 (A) the loan rate established for upland

24 cotton and rice, respectively, under subsection

25 (b); or
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•HR 2854 IH

1 (B) the prevailing world market price for

2 upland cotton and rice, respectively (adjusted to

3 United States quality and location), as deter4 mined by the Secretary.

5 (3) REPAYMENT RATES FOR EXTRA LONG STA6 PLE COTTON.—Repayment of a marketing assistance

7 loan for extra long staple cotton shall be at the loan

8 rate established for the commodity under subsection

9 (b), plus interest (as determined by the Secretary).

10 (4) PREVAILING WORLD MARKET PRICE.—For

11 purposes of paragraph (2)(B) and subsection (f), the

12 Secretary shall prescribe by regulation—

13 (A) a formula to determine the prevailing

14 world market price for each loan commodity,

15 adjusted to United States quality and location;

16 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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•HR 2854 IH

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

5 loan rate for upland cotton established

6 under subsection (b), as determined by the

7 Secretary; and

8 (ii) the Friday through Thursday av9 erage 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 Fri13 day through Thursday average price of the

14 5 lowest-priced growths of upland cotton,

as quoted for Middling (M) 13 15 ⁄32-inch cot16 ton, delivered C.I.F. Northern Europe (re17 ferred to in this subsection as the ‘‘North18 ern Europe 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

23 or all of the following data, as available:

24 (i) The United States share of world

25 exports.
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•HR 2854 IH

1 (ii) The current level of cotton export

2 sales and cotton export shipments.

3 (iii) Other data determined by the

4 Secretary to be relevant in establishing an

5 accurate 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

10 (B) may not exceed the difference between—

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

13 States growth as quoted for Middling

13 14 ⁄32-inch cotton delivered C.I.F. Northern

15 Europe; and

16 (ii) the Northern Europe price.

17 (e) LOAN DEFICIENCY PAYMENTS.—

18 (1) AVAILABILITY.—Except as provided in

19 paragraph (4), the Secretary may make loan defi20 ciency payments available to producers who, al21 though eligible to obtain a marketing assistance loan

22 under subsection (a) with respect to a loan commod23 ity, agree to forgo obtaining the loan for the com24 modity in return for payments under this subsection.
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•HR 2854 IH

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

7 that the producers on a farm are eligible to

8 place under loan but for which the producers

9 forgo obtaining the loan in return for payments

10 under this subsection.

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

12 this subsection, the loan payment rate shall be the

13 amount 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

20 to extra long staple cotton.

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

23 (1) FIRST HANDLER MARKETING CERTIFI24 CATES.—
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•HR 2854 IH

1 (A) IN GENERAL.—During the period end2 ing on July 31, 2003, if the repayment rates

3 provided in subsection (d) for upland cotton or

4 the availability of loan deficiency payments for

5 upland cotton under subsection (e) fails to

6 make United States upland cotton fully com7 petitive in world markets and the prevailing

8 world market price of upland cotton (adjusted

9 to United States quality and location) is below

10 the current loan repayment rate for upland cot11 ton, to make United States upland cotton com12 petitive in world markets and to maintain and

13 expand domestic consumption and exports of

14 upland cotton produced in the United States,

15 the Secretary shall provide for the issuance of

16 marketing certificates or cash payments in ac17 cordance with this paragraph.

18 (B) PAYMENTS.—The Commodity Credit

19 Corporation, under such regulations as the Sec20 retary may prescribe, shall make payments,

21 through the issuance of marketing certificates

22 or cash payments, to first handlers of upland

23 cotton (persons regularly engaged in buying or

24 selling upland cotton) who have entered into an

25 agreement with the Commodity Credit Corpora-
33

•HR 2854 IH

1 tion to participate in the program established

2 under this paragraph. The payments shall be

3 made in such amounts and subject to such

4 terms and conditions as the Secretary deter5 mines will make upland cotton produced in the

6 United States available at competitive prices,

7 consistent with the purposes of this paragraph.

8 (C) VALUE.—The value of each certificate

9 or cash payment issued under subparagraph

10 (B) shall be based on the difference between—

11 (i) the loan repayment rate for upland

12 cotton; and

13 (ii) the prevailing world market price

14 of upland cotton (adjusted to United

15 States quality and location), as determined

16 by the Secretary.

17 (D) REDEMPTION, MARKETING, OR EX18 CHANGE.—The Commodity Credit Corporation,

19 under regulations prescribed by the Secretary,

20 may assist any person receiving marketing cer21 tificates under this paragraph in the redemp22 tion of certificates for cash, or marketing or ex23 change of the certificates for agricultural com24 modities or products owned by the Commodity

25 Credit Corporation, at such times, in such man-
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•HR 2854 IH

1 ner, and at such price levels as the Secretary

2 determines will best effectuate the purposes of

3 the program established under this paragraph.

4 Any price restrictions that may otherwise apply

5 to the disposition of agricultural commodities

6 by the Commodity Credit Corporation shall not

7 apply to the redemption of certificates under

8 this paragraph.

9 (E) DESIGNATION OF COMMODITIES AND

10 PRODUCTS; CHARGES.—Insofar as practicable,

11 the Secretary shall permit owners of certificates

12 to designate the commodities and products, in13 cluding storage sites, the owners would prefer

14 to receive in exchange for certificates. If any

15 certificate is not presented for redemption, mar16 keting, or exchange within a reasonable number

17 of days after the issuance of the certificate (as

18 determined by the Secretary), reasonable costs

19 of storage and other carrying charges, as deter20 mined by the Secretary, shall be deducted from

21 the value of the certificate for the period begin22 ning after the reasonable number of days and

23 ending with the date of the presentation of the

24 certificate to the Commodity Credit Corpora25 tion.
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•HR 2854 IH

1 (F) DISPLACEMENT.—The Secretary shall

2 take such measures as may be necessary to pre3 vent the marketing or exchange of agricultural

4 commodities and products for certificates under

5 this subsection from adversely affecting the in6 come of producers of the commodities or prod7 ucts.

8 (G) TRANSFERS.—Under regulations pre9 scribed by the Secretary, certificates issued to

10 cotton handlers under this paragraph may be

11 transferred to other handlers and persons ap12 proved by the Secretary.

13 (2) COTTON USER MARKETING CERTIFI14 CATES.—

15 (A) ISSUANCE.—Subject to subparagraph

16 (D), during the period ending July 31, 2003,

17 the Secretary shall issue marketing certificates

18 or cash payments to domestic users and export19 ers for documented purchases by domestic users

20 and sales for export by exporters made in the

21 week following a consecutive 4-week period in

22 which—

23 (i) the Friday through Thursday aver24 age price quotation for the lowest-priced

25 United States growth, as quoted for Mid-
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•HR 2854 IH

dling (M) 13 1 ⁄32-inch cotton, delivered

2 C.I.F. Northern Europe exceeds the

3 Northern Europe price by more than 1.25

4 cents per pound; and

5 (ii) the prevailing world market price

6 for upland cotton (adjusted to United

7 States quality and location) does not ex8 ceed 130 percent of the loan rate for up9 land cotton established under subsection

10 (b).

11 (B) VALUE OF CERTIFICATES OR PAY12 MENTS.—The value of the marketing certifi13 cates or cash payments shall be based on the

14 amount of the difference (reduced by 1.25 cents

15 per pound) in the prices during the 4th week of

16 the consecutive 4-week period multiplied by the

17 quantity of upland cotton included in the docu18 mented sales.

19 (C) ADMINISTRATION.—Subparagraphs

20 (D) through (G) of paragraph (1) shall apply to

21 marketing certificates issued under this para22 graph. Any such certificates may be transferred

23 to other persons in accordance with regulations

24 issued by the Secretary.
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•HR 2854 IH

1 (D) EXCEPTION.—The Secretary shall not

2 issue marketing certificates or cash payments

3 under subparagraph (A) if, for the immediately

4 preceding consecutive 10-week period, the Fri5 day through Thursday average price quotation

6 for the lowest priced United States growth, as

quoted for Middling (M) 13 7 ⁄32-inch cotton, deliv8 ered C.I.F. Northern Europe, adjusted for the

9 value of any certificate issued under this para10 graph, exceeds the Northern Europe price by

11 more than 1.25 cents per pound.

12 (E) LIMITATION ON EXPENDITURES.—

13 Total expenditures under this paragraph shall

14 not exceed $701,000,000 during fiscal years

15 1996 through 2002.

16 (3) SPECIAL IMPORT QUOTA.—

17 (A) ESTABLISHMENT.—The President

18 shall carry out an import quota program that

19 provides that, during the period ending July 31,

20 2003, whenever the Secretary determines and

21 announces that for any consecutive 10-week pe22 riod, the Friday through Thursday average

23 price quotation for the lowest-priced United

24 States growth, as quoted for Middling (M)

13 25 ⁄32-inch cotton, delivered C.I.F. Northern Eu-
38

•HR 2854 IH

1 rope, adjusted for the value of any certificates

2 issued under paragraph (2), exceeds the North3 ern Europe price by more than 1.25 cents per

4 pound, there shall immediately be in effect a

5 special import quota.

6 (B) QUANTITY.—The quota shall be equal

7 to 1 week’s consumption of upland cotton by

8 domestic mills at the seasonally adjusted aver9 age rate of the most recent 3 months for which

10 data are available.

11 (C) APPLICATION.—The quota shall apply

12 to upland cotton purchased not later than 90

13 days after the date of the Secretary’s announce14 ment under subparagraph (A) and entered into

15 the United States not later than 180 days after

16 the date.

17 (D) OVERLAP.—A special quota period

18 may be established that overlaps any existing

19 quota period if required by subparagraph (A),

20 except that a special quota period may not be

21 established under this paragraph if a quota pe22 riod has been established under subsection (g).

23 (E) PREFERENTIAL TARIFF TREAT24 MENT.—The quantity under a special import
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•HR 2854 IH

1 quota shall be considered to be an in-quota

2 quantity for purposes of—

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

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

5 2703(d));

6 (ii) section 204 of the Andean Trade

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

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

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

10 (iv) General Note 3(a)(iv) to the Har11 monized Tariff Schedule.

12 (F) DEFINITION.—In this paragraph, the

13 term ‘‘special import quota’’ means a quantity

14 of imports that is not subject to the over-quota

15 tariff rate of a tariff-rate quota.

16 (g) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND

17 COTTON.—

18 (1) IN GENERAL.—The President shall carry

19 out an import quota program that provides that

20 whenever the Secretary determines and announces

21 that the average price of the base quality of upland

22 cotton, as determined by the Secretary, in the des23 ignated spot markets for a month exceeded 130 per24 cent of the average price of such quality of cotton

25 in the markets for the preceding 36 months, not-
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•HR 2854 IH

1 withstanding any other provision of law, there shall

2 immediately be in effect a limited global import

3 quota subject to the following conditions:

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

5 shall be equal to 21 days of domestic mill con6 sumption of upland cotton at the seasonally ad7 justed average rate of the most recent 3 months

8 for which data are available.

9 (B) QUANTITY IF PRIOR QUOTA.—If a

10 quota has been established under this sub11 section during the preceding 12 months, the

12 quantity of the quota next established under

13 this subsection shall be the smaller of 21 days

14 of domestic mill consumption calculated under

15 subparagraph (A) or the quantity required to

16 increase the supply to 130 percent of the de17 mand.

18 (C) PREFERENTIAL TARIFF TREAT19 MENT.—The quantity under a limited global

20 import quota shall be considered to be an in21 quota quantity for purposes of—

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

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

24 2703(d));
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•HR 2854 IH

1 (ii) section 204 of the Andean Trade

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

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

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

5 (iv) General Note 3(a)(iv) to the Har6 monized Tariff Schedule.

7 (D) DEFINITIONS.—In this subsection:

8 (i) SUPPLY.—The term ‘‘supply’’

9 means, using the latest official data of the

10 Bureau of the Census, the Department of

11 Agriculture, and the Department of the

12 Treasury—

13 (I) the carry-over of upland cot14 ton at the beginning of the marketing

15 year (adjusted to 480-pound bales) in

16 which the quota is established;

17 (II) production of the current

18 crop; and

19 (III) imports to the latest date

20 available during the marketing year.

21 (ii) DEMAND.—The term ‘‘demand’’

22 means—

23 (I) the average seasonally ad24 justed annual rate of domestic mill

25 consumption in the most recent 3
42

•HR 2854 IH

1 months for which data are available;

2 and

3 (II) the larger of—

4 (aa) average exports of up5 land cotton during the preceding

6 6 marketing years; or

7 (bb) cumulative exports of

8 upland cotton plus outstanding

9 export sales for the marketing

10 year in which the quota is estab11 lished.

12 (iii) LIMITED GLOBAL IMPORT

13 QUOTA.—The term ‘‘limited global import

14 quota’’ means a quantity of imports that is

15 not subject to the over-quota tariff rate of

16 a tariff-rate quota.

17 (E) QUOTA ENTRY PERIOD.—When a

18 quota is established under this subsection, cot19 ton may be entered under the quota during the

20 90-day period beginning on the date the quota

21 is established by the Secretary.

22 (2) NO OVERLAP.—Notwithstanding paragraph

23 (1), a quota period may not be established that over24 laps an existing quota period or a special quota pe25 riod established under subsection (f)(3).
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•HR 2854 IH

1 (h) SOURCE OF LOANS.—

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

3 the loans authorized by this section and the Agricul4 tural Adjustment Act of 1938 (7 U.S.C. 1281 et

5 seq.) through the Commodity Credit Corporation

6 and other means available to the Secretary.

7 (2) PROCESSORS.—Whenever any loan or sur8 plus removal operation for any agricultural commod9 ity is carried out through purchases from or loans

10 or payments to processors, the Secretary shall, to

11 the extent practicable, obtain from the processors

12 such assurances as the Secretary considers adequate

13 that the producers of the commodity have received

14 or will receive maximum benefits from the loan or

15 surplus removal operation.

16 (i) ADJUSTMENTS OF LOANS.—

17 (1) IN GENERAL.—The Secretary may make

18 appropriate adjustments in the loan levels for any

19 commodity for differences in grade, type, quality, lo20 cation, and other factors.

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

22 the maximum extent practicable, be made in such

23 manner that the average loan level for the commod24 ity will, on the basis of the anticipated incidence of

25 the factors, be equal to the level of support deter-
44

•HR 2854 IH

1 mined as provided in this section or the Agricultural

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

3 (j) PERSONAL LIABILITY OF PRODUCERS FOR DEFI4 CIENCIES.—

5 (1) IN GENERAL.—Except as provided in para6 graph (2), no producer shall be personally liable for

7 any deficiency arising from the sale of the collateral

8 securing any nonrecourse loan made under this sec9 tion or the Agricultural Adjustment Act of 1938 (7

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

11 through a fraudulent representation by the producer.

12 (2) LIMITATIONS.—Paragraph (1) shall not

13 prevent the Commodity Credit Corporation or the

14 Secretary from requiring a producer to assume li15 ability for—

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

17 quantity of a commodity stored on a farm or

18 delivered by the producer;

19 (B) a failure to properly care for and pre20 serve a commodity; or

21 (C) a failure or refusal to deliver a com22 modity in accordance with a program estab23 lished under this section or the Agricultural Ad24 justment Act of 1938.
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•HR 2854 IH

1 (3) ACQUISITION OF COLLATERAL.—The Sec2 retary may include in a contract for a nonrecourse

3 loan made under this section or the Agricultural Ad4 justment Act of 1938 a provision that permits the

5 Commodity Credit Corporation, on and after the ma6 turity of the loan or any extension of the loan, to ac7 quire title to the unredeemed collateral without obli8 gation to pay for any market value that the collat9 eral may have in excess of the loan indebtedness.

10 (4) SUGARCANE AND SUGAR BEETS.—A secu11 rity interest obtained by the Commodity Credit Cor12 poration as a result of the execution of a security

13 agreement by the processor of sugarcane or sugar

14 beets shall be superior to all statutory and common

15 law liens on raw cane sugar and refined beet sugar

16 in favor of the producers of sugarcane and sugar

17 beets and all prior recorded and unrecorded liens on

18 the crops of sugarcane and sugar beets from which

19 the sugar was derived.

20 (k) COMMODITY CREDIT CORPORATION SALES PRICE

21 RESTRICTIONS.—

22 (1) IN GENERAL.—The Commodity Credit Cor23 poration may sell any commodity owned or con24 trolled by the Corporation at any price that the Sec-
46

•HR 2854 IH

1 retary determines will maximize returns to the Cor2 poration.

3 (2) NONAPPLICATION OF SALES PRICE RE4 STRICTIONS.—Paragraph (1) shall not apply to—

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

6 (B) a sale of peanuts or oilseeds for the ex7 traction of oil;

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

9 not substantially impair any loan program;

10 (D) a sale of a commodity that has sub11 stantially deteriorated in quality or as to which

12 there is a danger of loss or waste through dete13 rioration or spoilage;

14 (E) a sale for the purpose of establishing

15 a claim arising out of a contract or against a

16 person who has committed fraud, misrepresen17 tation, or other wrongful act with respect to the

18 commodity;

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

20 Corporation; and

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

22 (3) PRESIDENTIAL DISASTER AREAS.—

23 (A) IN GENERAL.—Notwithstanding para24 graph (1), on such terms and conditions as the

25 Secretary may consider in the public interest,
47

•HR 2854 IH

1 the Corporation may make available any com2 modity or product owned or controlled by the

3 Corporation for use in relieving distress—

4 (i) in any area in the United States

5 (including the Virgin Islands) declared by

6 the President to be an acute distress area

7 because of unemployment or other eco8 nomic cause, if the President finds that the

9 use will not displace or interfere with nor10 mal marketing of agricultural commodities;

11 and

12 (ii) in connection with any major dis13 aster determined by the President to war14 rant assistance by the Federal Government

15 under the Robert T. Stafford Disaster Re16 lief and Emergency Assistance Act (42

17 U.S.C. 5121 et seq.).

18 (B) COSTS.—Except on a reimbursable

19 basis, the Corporation shall not bear any costs

20 in connection with making a commodity avail21 able under subparagraph (A) beyond the cost of

22 the commodity to the Corporation incurred in—

23 (i) the storage of the commodity; and

24 (ii) the handling and transportation

25 costs in making delivery of the commodity
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•HR 2854 IH

1 to designated agencies at 1 or more central

2 locations in each State or other area.

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

4 shall not apply to the sale of a commodity the dis5 position of which is desirable in the interest of the

6 effective and efficient conduct of the operations of

7 the Corporation because of the small quantity of the

8 commodity involved, or because of the age, location,

9 or questionable continued storability of the commod10 ity.

11 SEC. 105. PAYMENT LIMITATIONS.

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

13 Act of 1985 (7 U.S.C. 1308) is amended by striking para14 graphs (1) through (4) and inserting the following:

15 ‘‘(1) LIMITATION ON PAYMENTS UNDER PRO16 DUCTION FLEXIBILITY CONTRACTS.—The total

17 amount of contract payments made under section

18 103 of the Agricultural Market Transition Act to a

19 person under 1 or more production flexibility con20 tracts during any fiscal year may not exceed

21 $40,000.

22 ‘‘(2) LIMITATION ON MARKETING LOAN GAINS

23 AND LOAN DEFICIENCY PAYMENTS.—

24 ‘‘(A) LIMITATION.—The total amount of

25 payments specified in subparagraph (B) that a
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•HR 2854 IH

1 person shall be entitled to receive under section

2 104 of the Agricultural Market Transition Act

3 for contract commodities and oilseeds during

4 any crop year may not exceed $75,000.

5 ‘‘(B) DESCRIPTION OF PAYMENTS.—The

6 payments referred to in subparagraph (A) are

7 the following:

8 ‘‘(i) Any gain realized by a producer

9 from repaying a marketing assistance loan

10 for a crop of any loan commodity at a

11 lower level than the original loan rate es12 tablished for the commodity under section

13 104(b) of the Act.

14 ‘‘(ii) Any loan deficiency payment re15 ceived for a loan commodity under section

16 104(e) of the Act.’’.

17 (b) CONFORMING AMENDMENTS.—

18 (1) Section 1001 of the Food Security Act of

19 1985 (7 U.S.C. 1308) (as amended by subsection

20 (a)) is amended—

21 (A) by redesignating paragraphs (5), (6),

22 and (7) as paragraphs (3), (4), and (5), respec23 tively; and

24 (B) in the second sentence of paragraph

25 (3)(A) (as so redesignated), by striking ‘‘para-
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•HR 2854 IH

1 graphs (6) and (7)’’ and inserting ‘‘paragraphs

2 (4) and (5)’’.

3 (2) Section 1305(d) of the Agricultural Rec4 onciliation Act of 1987 (Public Law 100–203; 7

5 U.S.C. 1308 note) is amended by striking ‘‘para6 graphs (5) through (7) of section 1001, as amended

7 by this subtitle,’’ and inserting ‘‘paragraphs (3)

8 through (5) of section 1001,’’.

9 (3) Section 1001A of the Food Security Act of

10 1985 (7 U.S.C. 1308–1(a)(1)) is amended—

11 (A) in the first sentence of subsection

12 (a)(1)—

13 (i) by striking ‘‘section 1001(5)(B)(i)’’

14 and inserting ‘‘section 1001(3)(B)(i)’’;

15 (ii) by striking ‘‘under the Agricul16 tural Act of 1949 (7 U.S.C. 1421 et

17 seq.)’’; and

18 (iii) by striking ‘‘section

19 1001(5)(B)(i)(II)’’ and inserting ‘‘section

20 1001(3)(B)(i)(II)’’; and

21 (B) in subsection (b)—

22 (i) in paragraph (1)—

23 (I) by striking ‘‘under the Agri24 cultural Act of 1949’’; and
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•HR 2854 IH

1 (II) by striking ‘‘section

2 1001(5)(B)(i)’’ and inserting ‘‘section

3 1001(3)(B)(i)’’; and

4 (ii) in paragraph (2)(B), by striking

5 ‘‘section 1001(5)(B)(i)(II)’’ and inserting

6 ‘‘section 1001(3)(B)(i)(II)’’.

7 (4) Section 1001C(a) of the Food Security Act

8 of 1985 (7 U.S.C. 1308–3(a)) is amended—

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

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

11 (B) by striking ‘‘price support program

12 loans, payments, or benefits made available

13 under the Agricultural Act of 1949 (7 U.S.C.

14 1421 et seq.),’’ and inserting ‘‘loans or pay15 ments made available under the Agricultural

16 Market Transition Act’’; and

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

18 1997 crop years’’.

19 SEC. 106. PEANUT PROGRAM.

20 (a) QUOTA PEANUTS.—

21 (1) AVAILABILITY OF LOANS.—The Secretary

22 shall make nonrecourse loans available to producers

23 of quota peanuts.

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

25 loan rate for quota peanuts shall be $610 per ton.
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•HR 2854 IH

1 (3) INSPECTION, HANDLING, OR STORAGE.—

2 The loan amount may not be reduced by the Sec3 retary by any deductions for inspection, handling, or

4 storage.

5 (4) LOCATION AND OTHER FACTORS.—The Sec6 retary may make adjustments in the loan rate for

7 quota peanuts for location of peanuts and such other

8 factors as are authorized by section 411 of the Agri9 cultural Adjustment Act of 1938.

10 (5) OFFERS FROM HANDLERS.—The Secretary

11 shall reduce the support rate by 5 percent for any

12 producer who had an offer, within a county or con13 tiguous county at the time and place of delivery,

14 from a handler to purchase quota peanuts from that

15 farm on which the peanuts were produced at a price

16 equal to or greater than the applicable quota sup17 port rate.

18 (b) ADDITIONAL PEANUTS.—

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

20 nonrecourse loans available to producers of addi21 tional peanuts at such rates as the Secretary finds

22 appropriate, taking into consideration the demand

23 for peanut oil and peanut meal, expected prices of

24 other vegetable oils and protein meals, and the de25 mand for peanuts in foreign markets.
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1 (2) ANNOUNCEMENT.—The Secretary shall an2 nounce the loan rate for additional peanuts of each

3 crop not later than February 15 preceding the mar4 keting year for the crop for which the loan rate is

5 being determined.

6 (c) AREA MARKETING ASSOCIATIONS.—

7 (1) WAREHOUSE STORAGE LOANS.—

8 (A) IN GENERAL.—In carrying out sub9 sections (a) and (b), the Secretary shall make

10 warehouse storage loans available in each of the

11 producing areas (described in section 1446.95

12 of title 7 of the Code of Federal Regulations

13 (January 1, 1989)) to a designated area mar14 keting association of peanut producers that is

15 selected and approved by the Secretary and

16 that is operated primarily for the purpose of

17 conducting the loan activities. The Secretary

18 may not make warehouse storage loans avail19 able to any cooperative that is engaged in oper20 ations or activities concerning peanuts other

21 than those operations and activities specified in

22 this section and section 358e of the Agricultural

23 Adjustment Act of 1938 (7 U.S.C. 1359a).

24 (B) ADMINISTRATIVE AND SUPERVISORY

25 ACTIVITIES.—An area marketing association
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•HR 2854 IH

1 shall be used in administrative and supervisory

2 activities relating to loans and marketing activi3 ties under this section and section 358e of the

4 Agricultural Adjustment Act of 1938 (7 U.S.C.

5 1359a).

6 (C) ASSOCIATION COSTS.—Loans made to

7 the association under this paragraph shall in8 clude such costs as the area marketing associa9 tion reasonably may incur in carrying out the

10 responsibilities, operations, and activities of the

11 association under this section and section 358e

12 of the Agricultural Adjustment Act of 1938 (7

13 U.S.C. 1359a).

14 (2) POOLS FOR QUOTA AND ADDITIONAL PEA15 NUTS.—

16 (A) IN GENERAL.—The Secretary shall re17 quire that each area marketing association es18 tablish pools and maintain complete and accu19 rate records by area and segregation for quota

20 peanuts handled under loan and for additional

21 peanuts placed under loan, except that separate

22 pools shall be established for Valencia peanuts

23 produced in New Mexico. Bright hull and dark

24 hull Valencia peanuts shall be considered as
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1 separate types for the purpose of establishing

2 the pools.

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

4 each pool, unless otherwise approved by the

5 Secretary, shall be distributed only to producers

6 who placed peanuts in the pool and shall be dis7 tributed in proportion to the value of the pea8 nuts placed in the pool by each producer. Net

9 gains for peanuts in each pool shall consist of

10 the following:

11 (i) QUOTA PEANUTS.—For quota pea12 nuts, the net gains over and above the loan

13 indebtedness and other costs or losses in14 curred on peanuts placed in the pool.

15 (ii) ADDITIONAL PEANUTS.—For ad16 ditional peanuts, the net gains over and

17 above the loan indebtedness and other

18 costs or losses incurred on peanuts placed

19 in the pool for additional peanuts.

20 (d) LOSSES.—Losses in quota area pools shall be cov21 ered using the following sources in the following order of

22 priority:

23 (1) TRANSFERS FROM ADDITIONAL LOAN

24 POOLS.—The proceeds due any producer from any

25 pool shall be reduced by the amount of any loss that
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•HR 2854 IH

1 is incurred with respect to peanuts transferred from

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

3 producer under section 358–1(b)(8) of the Agricul4 tural Adjustment Act of 1938 (7 U.S.C. 1358–

5 1(b)(8)).

6 (2) OTHER PRODUCERS IN SAME POOL.—Fur7 ther losses in an area quota pool shall be offset by

8 reducing the gain of any producer in the pool by the

9 amount of pool gains attributed to the same pro10 ducer from the sale of additional peanuts for domes11 tic and export edible use.

12 (3) USE OF MARKETING ASSESSMENTS.—The

13 Secretary shall use funds collected under subsection

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

15 further losses in area quota pools. The Secretary

16 shall transfer to the Treasury those funds collected

17 under subsection (g) and available for use under this

18 subsection that the Secretary determines are not re19 quired to cover losses in area quota pools.

20 (4) CROSS COMPLIANCE.—Further losses in

21 area quota pools, other than losses incurred as a re22 sult of transfers from additional loan pools to quota

23 loan pools under section 358–1(b)(8) of the Agricul24 tural Adjustment Act of 1938 (7 U.S.C. 1358–

25 1(b)(8)), shall be offset by any gains or profits from
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•HR 2854 IH

1 quota pools in other production areas (other than

2 separate type pools established under subsection

3 (c)(2)(A) for Valencia peanuts produced in New

4 Mexico) in such manner as the Secretary shall by

5 regulation prescribe.

6 (5) INCREASED ASSESSMENTS.—If use of the

7 authorities provided in the preceding paragraphs is

8 not sufficient to cover losses in an area quota pool,

9 the Secretary shall increase the marketing assess10 ment established under subsection (g) by such an

11 amount as the Secretary considers necessary to

12 cover the losses. The increased assessment shall

13 apply only to quota peanuts covered by that pool.

14 Amounts collected under subsection (g) as a result

15 of the increased assessment shall be retained by the

16 Secretary to cover losses in that pool.

17 (e) DISAPPROVAL OF QUOTAS.—Notwithstanding

18 any other provision of law, no loan for quota peanuts may

19 be made available by the Secretary for any crop of peanuts

20 with respect to which poundage quotas have been dis21 approved by producers, as provided for in section 358–

22 1(d) of the Agricultural Adjustment Act of 1938 (7 U.S.C.

23 1358–1(d)).

24 (f) QUALITY IMPROVEMENT.—
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•HR 2854 IH

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

2 under loan, the Secretary shall—

3 (A) promote the crushing of peanuts at a

4 greater risk of deterioration before peanuts of a

5 lesser risk of deterioration;

6 (B) ensure that all Commodity Credit Cor7 poration inventories of peanuts sold for domes8 tic edible use must be shown to have been offi9 cially inspected by licensed Department inspec10 tors both as farmer stock and shelled or cleaned

11 in-shell peanuts;

12 (C) continue to endeavor to operate the

13 peanut program so as to improve the quality of

14 domestic peanuts and ensure the coordination

15 of activities under the Peanut Administrative

16 Committee established under Marketing Agree17 ment No. 146, regulating the quality of domes18 tically produced peanuts (under the Agricul19 tural Adjustment Act (7 U.S.C. 601 et seq.),

20 reenacted with amendments by the Agricultural

21 Marketing Agreement Act of 1937); and

22 (D) ensure that any changes made in the

23 peanut program as a result of this subsection

24 requiring additional production or handling at
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•HR 2854 IH

1 the farm level shall be reflected as an upward

2 adjustment in the Department loan schedule.

3 (2) EXPORTS AND OTHER PEANUTS.—The Sec4 retary shall require that all peanuts in the domestic

5 and export markets fully comply with all quality

6 standards under Marketing Agreement No. 146.

7 (g) MARKETING ASSESSMENT.—

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

9 for a nonrefundable marketing assessment. The as10 sessment shall be made on a per pound basis in an

11 amount equal to 1.1 percent for each of the 1994

12 and 1995 crops, 1.15 percent for the 1996 crop, and

13 1.2 percent for each of the 1997 through 2002

14 crops, of the national average quota or additional

15 peanut loan rate for the applicable crop.

16 (2) FIRST PURCHASERS.—

17 (A) IN GENERAL.—Except as provided

18 under paragraphs (3) and (4), the first pur19 chaser of peanuts shall—

20 (i) collect from the producer a mar21 keting assessment equal to the quantity of

22 peanuts acquired multiplied by—

23 (I) in the case of each of the

24 1994 and 1995 crops, .55 percent of
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•HR 2854 IH

1 the applicable national average loan

2 rate;

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

4 .6 percent of the applicable national

5 average loan rate; and

6 (III) in the case of each of the

7 1997 through 2002 crops, .65 percent

8 of the applicable national average loan

9 rate;

10 (ii) pay, in addition to the amount col11 lected under clause (i), a marketing assess12 ment in an amount equal to the quantity

13 of peanuts acquired multiplied by .55 per14 cent of the applicable national average loan

15 rate; and

16 (iii) remit the amounts required under

17 clauses (i) and (ii) to the Commodity Cred18 it Corporation in a manner specified by the

19 Secretary.

20 (B) DEFINITION OF FIRST PURCHASER.—

21 In this subsection, the term ‘‘first purchaser’’

22 means a person acquiring peanuts from a pro23 ducer except that in the case of peanuts for24 feited by a producer to the Commodity Credit

25 Corporation, the term means the person acquir-
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•HR 2854 IH

1 ing the peanuts from the Commodity Credit

2 Corporation.

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

4 of a private marketing by a producer directly to a

5 consumer through a retail or wholesale outlet or in

6 the case of a marketing by the producer outside of

7 the continental United States, the producer shall be

8 responsible for the full amount of the assessment

9 and shall remit the assessment by such time as is

10 specified by the Secretary.

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

12 that are pledged as collateral for a loan made under

this section, 1 13 ⁄2 of the assessment shall be deducted

14 from the proceeds of the loan. The remainder of the

15 assessment shall be paid by the first purchaser of

16 the peanuts. For purposes of computing net gains on

17 peanuts under this section, the reduction in loan

18 proceeds shall be treated as having been paid to the

19 producer.

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

21 or remit the reduction required by this subsection or

22 fails to comply with the requirements for record23 keeping or otherwise as are required by the Sec24 retary to carry out this subsection, the person shall
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•HR 2854 IH

1 be liable to the Secretary for a civil penalty up to

2 an amount determined by multiplying—

3 (A) the quantity of peanuts involved in the

4 violation; by

5 (B) the national average quota peanut rate

6 for the applicable crop year.

7 (6) ENFORCEMENT.—The Secretary may en8 force this subsection in the courts of the United

9 States.

10 (h) CROPS.—Subsections (a) through (f) shall be ef11 fective only for the 1996 through 2002 crops of peanuts.

12 (i) MARKETING QUOTAS.—

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

14 III of the Agricultural Adjustment Act of 1938 is

15 amended—

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

17 (i) in the section heading, by striking

18 ‘‘1991 THROUGH 1997 CROPS OF’’;

19 (ii) in subsections (a)(1), (b)(1)(B),

20 (b)(2)(A), (b)(2)(C), and (b)(3)(A), by

21 striking ‘‘of the 1991 through 1997 mar22 keting years’’ each place it appears and in23 serting ‘‘marketing year’’;

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

25 ‘‘1990’’ and inserting ‘‘1990, for the 1991
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•HR 2854 IH

1 through 1995 marketing years, and 1995,

2 for the 1996 through 2002 marketing

3 years’’;

4 (iv) in subsection (b)(1)(A)—

5 (I) by striking ‘‘each of the 1991

6 through 1997 marketing years’’ and

7 inserting ‘‘each marketing year’’; and

8 (II) in clause (i), by inserting be9 fore the semicolon the following: ‘‘, in

10 the case of the 1991 through 1995

11 marketing years, and the 1995 mar12 keting year, in the case of the 1996

13 through 2002 marketing years’’; and

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

15 ‘‘1997’’ and inserting ‘‘2002’’;

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

17 (i) in the section heading, by striking

18 ‘‘1991 THROUGH 1995 CROPS OF’’; and

19 (ii) in subsection (c), by striking

20 ‘‘1995’’ and inserting ‘‘2002’’;

21 (C) in section 358c(d) (7 U.S.C.

22 1358c(d)), by striking ‘‘1995’’ and inserting

23 ‘‘2002’’; and

24 (D) in section 358e (7 U.S.C. 1359a)—
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•HR 2854 IH

1 (i) in the section heading, by striking

2 ‘‘FOR 1991 THROUGH 1997 CROPS OF

3 PEANUTS’’; and

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

5 ‘‘1997’’ and inserting ‘‘2002’’.

6 (2) PRIORITIZED QUOTA REDUCTIONS.—Section

7 358–1(b)(2)(C) of the Agricultural Adjustment Act

8 of 1938 (7 U.S.C. 1358–1(b)(2)(C)) is amended—

9 (A) by striking ‘‘all the’’; and

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

11 sentence: ‘‘Rather than allocating the decrease

12 among all the farms in a State, the Secretary

13 shall allocate the decrease among farms in the

14 following order of priority:

15 ‘‘(i) Farms owned or controlled by

16 municipalities, airport authorities, schools,

17 colleges, refuges, and other public entities

18 (not including universities for research

19 purposes).

20 ‘‘(ii) Farms for which the quota hold21 er is not a producer and resides in another

22 State.

23 ‘‘(iii) Other farms described in the

24 first sentence of this subparagraph.’’.
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1 (3) ELIMINATION OF QUOTA FLOOR.—Section

2 358–1(a)(1) of the Act (7 U.S.C. 1358–1(a)(1)) is

3 amended by striking the second sentence.

4 (4) TEMPORARY QUOTA ALLOCATION.—Section

5 358–1 of the Act (7 U.S.C. 1358–1) is amended—

6 (A) in subsection (a)(1), by striking ‘‘do7 mestic edible, seed,’’ and inserting ‘‘domestic

8 edible use’’;

9 (B) in subsection (b)(2)—

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

11 ‘‘subparagraph (B) and subject to’’; and

12 (ii) by striking subparagraph (B) and

13 inserting the following:

14 ‘‘(B) TEMPORARY QUOTA ALLOCATION.—

15 ‘‘(i) ALLOCATION RELATED TO SEED

16 PEANUTS.—Temporary allocation of quota

17 pounds for the marketing year only in

18 which the crop is planted shall be made to

19 producers for each of the 1996 through

20 2002 marketing years as provided in this

21 subparagraph.

22 ‘‘(ii) QUANTITY.—The temporary

23 quota allocation shall be equal to the

24 pounds of seed peanuts planted on the
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•HR 2854 IH

1 farm, as may be adjusted under regula2 tions prescribed by the Secretary.

3 ‘‘(iii) ADDITIONAL QUOTA.—The tem4 porary allocation of quota pounds under

5 this paragraph shall be in addition to the

6 farm poundage quota otherwise established

7 under this subsection and shall be credited,

8 for the applicable marketing year only, in

9 total to the producer of the peanuts on the

10 farm in a manner prescribed by the Sec11 retary.

12 ‘‘(iv) EFFECT OF OTHER REQUIRE13 MENTS.—Nothing in this section alters or

14 changes the requirements regarding the

15 use of quota and additional peanuts estab16 lished by section 358e(b).’’; and

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

18 and use on a farm’’.

19 (5) SPRING AND FALL TRANSFERS WITHIN A

20 STATE.—Section 358b(a)(1) of the Agricultural Ad21 justment Act of 1938 (7 U.S.C. 1358b(a)(1)) is

22 amended—

23 (A) by striking ‘‘any such lease’’ in the

24 matter preceding the subparagraphs and insert25 ing ‘‘any such sale or lease’’; and
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•HR 2854 IH

1 (B) by striking ‘‘in the fall or after the

2 normal planting season—’’ and subparagraphs

3 (A) and (B) and inserting the following: ‘‘in the

4 spring (or before the normal planting season)

5 or in the fall (or after the normal planting sea6 son) with the owner or operator of a farm lo7 cated within any county in the same State. In

8 the case of a fall transfer or a transfer after the

9 normal planting season, the transfer may be

10 made only if not less than 90 percent of the

11 basic quota (the farm quota exclusive of tem12 porary quota transfers), plus any poundage

13 quota transferred to the farm under this sub14 section, has been planted or considered planted

15 on the farm from which the quota is to be

16 leased.’’.

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

18 of title III of the Act is amended—

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

20 1(b))—

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

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

23 inserting ‘‘including any increases resulting

24 from the allocation of quotas voluntarily

25 released for 1 year under paragraph (7).’’;
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1 (ii) in paragraph (3)(B), by striking

2 ‘‘include—’’ and clauses (i) and (ii) and in3 serting ‘‘include any increase resulting

4 from the allocation of quotas voluntarily

5 released for 1 year under paragraph (7).’’;

6 and

7 (iii) by striking paragraphs (8) and

8 (9); and

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

10 1358b(a))—

11 (i) in paragraph (1), by striking ‘‘(in12 cluding any applicable under marketings)’’

13 both places it appears;

14 (ii) in paragraph (1)(A), by striking

15 ‘‘of undermarketings and’’;

16 (iii) in paragraph (2), by striking

17 ‘‘(including any applicable under market18 ings)’’; and

19 (iv) in paragraph (3), by striking

20 ‘‘(including any applicable

21 undermarketings)’’.

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

23 of the Act (7 U.S.C. 1358–1(b)), as amended by

24 paragraph (4)(A)(iii), is further amended by adding

25 at the end the following:
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1 ‘‘(8) DISASTER TRANSFERS.—

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

3 subparagraph (B), additional peanuts produced

4 on a farm from which the quota poundage was

5 not harvested and marketed because of drought,

6 flood, or any other natural disaster, or any

7 other condition beyond the control of the pro8 ducer, may be transferred to the quota loan

9 pool for pricing purposes on such basis as the

10 Secretary shall by regulation provide.

11 ‘‘(B) LIMITATION.—The poundage of pea12 nuts transferred under subparagraph (A) shall

13 not exceed the difference between—

14 ‘‘(i) the total quantity of peanuts

15 meeting quality requirements for domestic

16 edible use, as determined by the Secretary,

17 marketed from the farm; and

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

19 excluding quota pounds transferred to the

20 farm in the fall.

21 ‘‘(C) SUPPORT RATE.—Peanuts trans22 ferred under this paragraph shall be supported

23 at 70 percent of the quota support rate for the

24 marketing years in which the transfers occur.

25 The transfers for a farm shall not exceed 25
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1 percent of the total farm quota pounds, exclud2 ing pounds transferred in the fall.’’.

3 SEC. 107. SUGAR PROGRAM.

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

5 available to processors of domestically grown sugarcane at

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

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

8 available to processors of domestically grown sugar beets

9 at a rate equal to 22.9 cents per pound for refined beet

10 sugar.

11 (c) REDUCTION IN LOAN RATES.—

12 (1) REDUCTION REQUIRED.—The Secretary

13 shall reduce the loan rate specified in subsection (a)

14 for domestically grown sugarcane and subsection (b)

15 for domestically grown sugar beets if the Secretary

16 determines that negotiated reductions in export sub17 sidies and domestic subsidies provided for sugar of

18 the European Union and other major sugar growing,

19 producing, and exporting countries in the aggregate

20 exceed the commitments made as part of the Agree21 ment on Agriculture.

22 (2) EXTENT OF REDUCTION.—The Secretary

23 shall not reduce the loan rate under subsection (a)

24 or (b) below a rate that provides an equal measure

25 of support to that provided by the European Union
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1 and other major sugar growing, producing, and ex2 porting countries, based on an examination of both

3 domestic and export subsidies subject to reduction in

4 the Agreement on Agriculture.

5 (3) ANNOUNCEMENT OF REDUCTION.—The

6 Secretary shall announce any loan rate reduction to

7 be made under this subsection as far in advance as

8 is practicable.

9 (4) MAJOR SUGAR COUNTRIES DEFINED.—For

10 purposes of this subsection, the term ‘‘major sugar

11 growing, producing, and exporting countries’’

12 means—

13 (A) the countries of the European Union;

14 and

15 (B) the ten foreign countries not covered

16 by subparagraph (A) that the Secretary deter17 mines produce the greatest amount of sugar.

18 (5) AGREEMENT ON AGRICULTURE DEFINED.—

19 For purposes of this subsection, the term ‘‘Agree20 ment on Agriculture’’ means the Agreement on Agri21 culture referred to in section 101(d)(2) of the Uru22 guay Round Agreements Act (19 U.S.C.

23 3511(d)(2)).

24 (d) TERM OF LOANS.—
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1 (1) IN GENERAL.—Loans under this section

2 during any fiscal year shall be made available not

3 earlier than the beginning of the fiscal year and

4 shall mature at the earlier of—

5 (A) the end of 9 months; or

6 (B) the end of the fiscal year.

7 (2) SUPPLEMENTAL LOANS.—In the case of

8 loans made under this section in the last 3 months

9 of a fiscal year, the processor may repledge the

10 sugar as collateral for a second loan in the subse11 quent fiscal year, except that the second loan shall—

12 (A) be made at the loan rate in effect at

13 the time the second loan is made; and

14 (B) mature in 9 months less the quantity

15 of time that the first loan was in effect.

16 (e) LOAN TYPE; PROCESSOR ASSURANCES.—

17 (1) RECOURSE LOANS.—Subject to paragraph

18 (2), the Secretary shall carry out this section

19 through the use of recourse loans.

20 (2) NONRECOURSE LOANS.—During any fiscal

21 year in which the tariff rate quota for imports of

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

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

24 tons raw value, the Secretary shall carry out this

25 section by making available nonrecourse loans. Any
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1 recourse loan previously made available by the Sec2 retary under this section during the fiscal year shall

3 be changed by the Secretary into a nonrecourse loan.

4 (3) PROCESSOR ASSURANCES.—If the Secretary

5 is required under paragraph (2) to make

6 nonrecourse loans available during a fiscal year or to

7 change recourse loans into nonrecourse loans, the

8 Secretary shall obtain from each processor that re9 ceives a loan under this section such assurances as

10 the Secretary considers adequate to ensure that the

11 processor will provide payments to producers that

12 are proportional to the value of the loan received by

13 the processor for sugar beets and sugarcane deliv14 ered by producers served by the processor. The Sec15 retary may establish appropriate minimum payments

16 for purposes of this paragraph.

17 (f) MARKETING ASSESSMENT.—

18 (1) SUGARCANE.—Effective for marketings of

19 raw cane sugar during the 1996 through 2003 fiscal

20 years, the first processor of sugarcane shall remit to

21 the Commodity Credit Corporation a nonrefundable

22 marketing assessment in an amount equal to—

23 (A) in the case of marketings during fiscal

24 year 1996, 1.1 percent of the loan rate estab25 lished under subsection (a) per pound of raw
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1 cane sugar, processed by the processor from do2 mestically produced sugarcane or sugarcane

3 molasses, that has been marketed (including the

4 transfer or delivery of the sugar to a refinery

5 for further processing or marketing); and

6 (B) in the case of marketings during each

7 of fiscal years 1997 through 2003, 1.375 per8 cent of the loan rate established under sub9 section (a) per pound of raw cane sugar, proc10 essed by the processor from domestically pro11 duced sugarcane or sugarcane molasses, that

12 has been marketed (including the transfer or

13 delivery of the sugar to a refinery for further

14 processing or marketing).

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

16 beet sugar during the 1996 through 2003 fiscal

17 years, the first processor of sugar beets shall remit

18 to the Commodity Credit Corporation a nonrefund19 able marketing assessment in an amount equal to—

20 (A) in the case of marketings during fiscal

21 year 1996, 1.1794 percent of the loan rate es22 tablished under subsection (a) per pound of

23 beet sugar, processed by the processor from do24 mestically produced sugar beets or sugar beet

25 molasses, that has been marketed; and
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1 (B) in the case of marketings during each

2 of fiscal years 1997 through 2003, 1.47425

3 percent of the loan rate established under sub4 section (a) per pound of beet sugar, processed

5 by the processor from domestically produced

6 sugar beets or sugar beet molasses, that has

7 been marketed.

8 (3) COLLECTION.—

9 (A) TIMING.—A marketing assessment re10 quired under this subsection shall be collected

11 on a monthly basis and shall be remitted to the

12 Commodity Credit Corporation not later than

13 30 days after the end of each month. Any cane

14 sugar or beet sugar processed during a fiscal

15 year that has not been marketed by September

16 30 of the year shall be subject to assessment on

17 that date. The sugar shall not be subject to a

18 second assessment at the time that it is mar19 keted.

20 (B) MANNER.—Subject to subparagraph

21 (A), marketing assessments shall be collected

22 under this subsection in the manner prescribed

23 by the Secretary and shall be nonrefundable.

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

25 the assessment required by this subsection or fails to
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1 comply with such requirements for recordkeeping or

2 otherwise as are required by the Secretary to carry

3 out this subsection, the person shall be liable to the

4 Secretary for a civil penalty up to an amount deter5 mined by multiplying—

6 (A) the quantity of cane sugar or beet

7 sugar involved in the violation; by

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

9 sugarcane or sugar beets.

10 (5) ENFORCEMENT.—The Secretary may en11 force this subsection in a court of the United States.

12 (g) FORFEITURE PENALTY.—

13 (1) IN GENERAL.—A penalty shall be assessed

14 on the forfeiture of any sugar pledged as collateral

15 for a nonrecourse loan under this section.

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

17 shall be 1 cent per pound.

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

19 shall bear the same relation to the penalty for cane

20 sugar as the marketing assessment for sugar beets

21 bears to the marketing assessment for sugarcane.

22 (4) EFFECT OF FORFEITURE.—Any payments

23 owed producers by a processor that forfeits of any

24 sugar pledged as collateral for a nonrecourse loan
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1 shall be reduced in proportion to the loan forfeiture

2 penalty incurred by the processor.

3 (h) INFORMATION REPORTING.—

4 (1) DUTY OF PROCESSORS AND REFINERS TO

5 REPORT.—A sugarcane processor, cane sugar re6 finer, and sugar beet processor shall furnish the Sec7 retary, on a monthly basis, such information as the

8 Secretary may require to administer sugar pro9 grams, including the quantity of purchases of sugar10 cane, sugar beets, and sugar, and production, impor11 tation, distribution, and stock levels of sugar.

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

13 refusing to furnish the information, or furnishing

14 willfully any false information, shall be subject to a

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

16 violation.

17 (3) MONTHLY REPORTS.—Taking into consider18 ation the information received under paragraph (1),

19 the Secretary shall publish on a monthly basis com20 posite data on production, imports, distribution, and

21 stock levels of sugar.

22 (i) MARKETING ALLOTMENTS.—Part VII of subtitle

23 B of title III of the Agricultural Adjustment Act of 1938

24 (7 U.S.C. 1359aa et seq.) is repealed.
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1 (j) CROPS.—This section (other than subsection (i))

2 shall be effective only for the 1996 through 2002 crops

3 of sugar beets and sugarcane.

4 SEC. 108. ADMINISTRATION.

5 (a) COMMODITY CREDIT CORPORATION.—

6 (1) USE OF CORPORATION.—The Secretary

7 shall carry out this title through the Commodity

8 Credit Corporation.

9 (2) PROHIBITION ON SALARIES AND EX10 PENSES.—Notwithstanding any other provision of

11 law, no funds of the Corporation shall be used for

12 any salary or expense of any officer or employee of

13 the Department of Agriculture.

14 (b) DETERMINATIONS BY SECRETARY.—A deter15 mination made by the Secretary under this title or the

16 Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et

17 seq.) shall be final and conclusive.

18 (c) REGULATIONS.—The Secretary may issue such

19 regulations as the Secretary determines necessary to carry

20 out this title.

21 SEC. 109. ELIMINATION OF PERMANENT PRICE SUPPORT

22 AUTHORITY.

23 (a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—

24 The Agricultural Adjustment Act of 1938 is amended—

25 (1) in title III—
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1 (A) in subtitle B—

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

3 U.S.C. 1326–1351); and

4 (ii) in part VI—

5 (I) by moving subsection (c) of

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

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

8 U.S.C. 1301(b)(17)) and redesignat9 ing the subsection as paragraph (18);

10 and

11 (II) by striking sections 358,

12 358a, and 358d (7 U.S.C. 1358,

13 1358a, and 1359); and

14 (B) by striking subtitle D (7 U.S.C.

15 1379a–1379j); and

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

17 (b) AGRICULTURAL ACT OF 1949.—

18 (1) TRANSFER OF CERTAIN SECTIONS.—The

19 Agricultural Act of 1949 is amended—

20 (A) by transferring sections 106, 106A,

21 and 106B (7 U.S.C. 1445, 1445–1, 1445–2) to

22 appear after section 314A of the Agricultural

23 Adjustment Act of 1938 (7 U.S.C. 1314–1) and

24 redesignating the transferred sections as sec25 tions 315, 315A, and 315B, respectively;
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1 (B) by transferring sections 111, 201(c),

2 and 204 (7 U.S.C. 1445f, 1446(c), 1446e) to

3 appear after section 304 of the Agricultural Ad4 justment Act of 1938 (7 U.S.C. 1304) and re5 designating the transferred sections as sections

6 305, 306, and 307, respectively; and

7 (C) by transferring sections 404 and 416

8 (7 U.S.C. 1424 and 1431) to appear after sec9 tion 390 of the Agricultural Adjustment Act of

10 1938 (7 U.S.C. 1390) and redesignating the

11 transferred sections as sections 390A and

12 390B, respectively.

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

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

15 is repealed.

16 (c) CONFORMING AMENDMENTS.—

17 (1) Section 306 of the Agricultural Adjustment

18 Act of 1938 (as transferred and redesignated by

19 subsection (b)(1)(B)) is amended by striking ‘‘204’’

20 and inserting ‘‘307’’.

21 (2) Section 361 of the Agricultural Adjustment

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

23 ‘‘, corn, wheat, cotton, peanuts, and rice, estab24 lished’’.
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1 (3) Section 371 of the Agricultural Adjustment

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

3 (A) in the first sentence of subsection (a),

4 by striking ‘‘cotton, rice, peanuts, or’’; and

5 (B) in the first sentence of subsection (b),

6 by striking ‘‘cotton, rice, peanuts or’’.

7 SEC. 110. EFFECT OF AMENDMENTS.

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

9 specifically provided and notwithstanding any other provi10 sion of law, this title and the amendments made by this

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

12 out a price support or production adjustment program for

13 any of the 1991 through 1995 crops of an agricultural

14 commodity established under a provision of law in effect

15 immediately before the date of the enactment of this Act.

16 (b) LIABILITY.—A provision of this title or an

17 amendment made by this title shall not affect the liability

18 of any person under any provision of law as in effect be19 fore the date of the enactment of this Act.

20 TITLE II—CONSERVATION

21 SEC. 201. CONSERVATION.

22 (a) FUNDING.—Subtitle E of title XII of the Food

23 Security Act of 1985 (16 U.S.C. 3841 et seq.) is amended

24 to read as follows:
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1 ‘‘Subtitle E—Funding

2 ‘‘SEC. 1241. FUNDING.

3 ‘‘(a) MANDATORY EXPENSES.—For each of fiscal

4 years 1996 through 2002, the Secretary shall use the

5 funds of the Commodity Credit Corporation to carry out

6 the programs authorized by—

7 ‘‘(1) subchapter B of chapter 1 of subtitle D

8 (including contracts extended by the Secretary pur9 suant to section 1437 of the Food, Agriculture, Con10 servation, and Trade Act of 1990 (Public Law 101–

11 624; 16 U.S.C. 3831 note));

12 ‘‘(2) subchapter C of chapter 1 of subtitle D;

13 and

14 ‘‘(3) chapter 4 of subtitle D.

15 ‘‘(b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PRO16 GRAM.—For each of fiscal years 1996 through 2002,

17 $100,000,000 of the funds of the Commodity Credit Cor18 poration shall be available for providing technical assist19 ance, cost-sharing payments, and incentive payments for

20 practices relating to livestock production under the live21 stock environmental assistance program under chapter 4

22 of subtitle D.’’.

23 (b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PRO24 GRAM.—To carry out the programs funded under the

25 amendment made by subsection (a), subtitle D of title XII
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1 of the Food Security Act of 1985 (16 U.S.C. 3830 et seq.)

2 is amended by adding at the end the following:

3 ‘‘CHAPTER 4—LIVESTOCK

4 ENVIRONMENTAL ASSISTANCE PROGRAM

5 ‘‘SEC. 1240. DEFINITIONS.

6 ‘‘In this chapter:

7 ‘‘(1) LAND MANAGEMENT PRACTICE.—The

8 term ‘land management practice’ means a site-spe9 cific nutrient or manure management, irrigation

10 management, tillage or residue management, grazing

11 management, or other land management practice

12 that the Secretary determines is needed to protect,

13 in the most cost effective manner, water, soil, or re14 lated resources from degradation due to livestock

15 production.

16 ‘‘(2) LARGE CONFINED LIVESTOCK OPER17 ATION.—The term ‘large confined livestock oper18 ation’ means an operation that—

19 ‘‘(A) is a confined animal feeding oper20 ation; and

21 ‘‘(B) has more than—

22 ‘‘(i) 55 mature dairy cattle;

23 ‘‘(ii) 10,000 beef cattle;
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1 ‘‘(iii) 30,000 laying hens or broilers

2 (if the facility has continuous overflow wa3 tering);

4 ‘‘(iv) 100,000 laying hens or broilers

5 (if the facility has a liquid manure sys6 tem);

7 ‘‘(v) 55,000 turkeys;

8 ‘‘(vi) 15,000 swine; or

9 ‘‘(vii) 10,000 sheep or lambs.

10 ‘‘(3) LIVESTOCK.—The term ‘livestock’ means

11 dairy cows, beef cattle, laying hens, broilers, turkeys,

12 swine, sheep, lambs, and such other animals as de13 termined by the Secretary.

14 ‘‘(4) OPERATOR.—The term ‘operator’ means a

15 person who is engaged in livestock production (as

16 defined by the Secretary).

17 ‘‘(5) STRUCTURAL PRACTICE.—The term ‘struc18 tural practice’ means the establishment of an animal

19 waste management facility, terrace, grassed water20 way, contour grass strip, filterstrip, or other struc21 tural practice that the Secretary determines is need22 ed to protect, in the most cost effective manner,

23 water, soil, or related resources from degradation

24 due to livestock production.
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1 ‘‘SEC. 1240A. ESTABLISHMENT AND ADMINISTRATION OF

2 LIVESTOCK ENVIRONMENTAL ASSISTANCE

3 PROGRAM.

4 ‘‘(a) ESTABLISHMENT.—

5 ‘‘(1) IN GENERAL.—During the 1996 through

6 2002 fiscal years, the Secretary shall provide tech7 nical assistance, cost-sharing payments, and incen8 tive payments to operators who enter into contracts

9 with the Secretary, through a livestock environ10 mental assistance program.

11 ‘‘(2) ELIGIBLE PRACTICES.—

12 ‘‘(A) STRUCTURAL PRACTICES.—An opera13 tor who implements a structural practice shall

14 be eligible for technical assistance or cost-shar15 ing payments, or both.

16 ‘‘(B) LAND MANAGEMENT PRACTICES.—An

17 operator who performs a land management

18 practice shall be eligible for technical assistance

19 or incentive payments, or both.

20 ‘‘(3) ELIGIBLE LAND.—Assistance under this

21 chapter may be provided with respect to land that

22 is used for livestock production and on which a seri23 ous threat to water, soil, or related resources exists,

24 as determined by the Secretary, by reason of the soil

25 types, terrain, climatic, soil, topographic, flood, or
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1 saline characteristics, or other factors or natural

2 hazards.

3 ‘‘(4) SELECTION CRITERIA.—In providing tech4 nical assistance, cost-sharing payments, and incen5 tive payments to operators in a region, watershed, or

6 conservation priority area in which an agricultural

7 operation is located, the Secretary shall consider—

8 ‘‘(A) the significance of the water, soil, and

9 related natural resource problems; and

10 ‘‘(B) the maximization of environmental

11 benefits per dollar expended.

12 ‘‘(b) APPLICATION AND TERM.—

13 ‘‘(1) IN GENERAL.—A contract between an op14 erator and the Secretary under this chapter may—

15 ‘‘(A) apply to 1 or more structural prac16 tices or 1 or more land management practices,

17 or both; and

18 ‘‘(B) have a term of not less than 5, nor

19 more than 10, years, as determined appropriate

20 by the Secretary, depending on the practice or

21 practices that are the basis of the contract.

22 ‘‘(2) DUTIES OF OPERATORS AND SEC23 RETARY.—To receive cost-sharing or incentive pay24 ments, or technical assistance, participating opera25 tors shall comply with all terms and conditions of
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1 the contract and a plan, as established by the Sec2 retary.

3 ‘‘(c) STRUCTURAL PRACTICES.—

4 ‘‘(1) COMPETITIVE OFFER.—The Secretary

5 shall administer a competitive offer system for oper6 ators proposing to receive cost-sharing payments in

7 exchange for the implementation of 1 or more struc8 tural practices by the operator. The competitive

9 offer system shall consist of—

10 ‘‘(A) the submission of a competitive offer

11 by the operator in such manner as the Sec12 retary may prescribe; and

13 ‘‘(B) evaluation of the offer in light of the

14 selection criteria established under subsection

15 (a)(4) and the projected cost of the proposal, as

16 determined by the Secretary.

17 ‘‘(2) CONCURRENCE OF OWNER.—If the opera18 tor making an offer to implement a structural prac19 tice is a tenant of the land involved in agricultural

20 production, for the offer to be acceptable, the opera21 tor shall obtain the concurrence of the owner of the

22 land with respect to the offer.

23 ‘‘(d) LAND MANAGEMENT PRACTICES.—The Sec24 retary shall establish an application and evaluation proc25 ess for awarding technical assistance or incentive pay-
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1 ments, or both, to an operator in exchange for the per2 formance of 1 or more land management practices by the

3 operator.

4 ‘‘(e) COST-SHARING, INCENTIVE PAYMENTS, AND

5 TECHNICAL ASSISTANCE.—

6 ‘‘(1) COST-SHARING PAYMENTS.—

7 ‘‘(A) IN GENERAL.—The Federal share of

8 cost-sharing payments to an operator proposing

9 to implement 1 or more structural practices

10 shall not be greater than 75 percent of the pro11 jected cost of each practice, as determined by

12 the Secretary, taking into consideration any

13 payment received by the operator from a State

14 or local government.

15 ‘‘(B) LIMITATION.—An operator of a large

16 confined livestock operation shall not be eligible

17 for cost-sharing payments to construct an ani18 mal waste management facility.

19 ‘‘(C) OTHER PAYMENTS.—An operator

20 shall not be eligible for cost-sharing payments

21 for structural practices on eligible land under

22 this chapter if the operator receives cost-shar23 ing payments or other benefits for the same

24 land under chapter 1, 2, or 3.
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1 ‘‘(2) INCENTIVE PAYMENTS.—The Secretary

2 shall make incentive payments in an amount and at

3 a rate determined by the Secretary to be necessary

4 to encourage an operator to perform 1 or more land

5 management practices.

6 ‘‘(3) TECHNICAL ASSISTANCE.—

7 ‘‘(A) FUNDING.—The Secretary shall allo8 cate funding under this chapter for the provi9 sion of technical assistance according to the

10 purpose and projected cost for which the tech11 nical assistance is provided for a fiscal year.

12 The allocated amount may vary according to

13 the type of expertise required, quantity of time

14 involved, and other factors as determined ap15 propriate by the Secretary. Funding shall not

16 exceed the projected cost to the Secretary of the

17 technical assistance provided for a fiscal year.

18 ‘‘(B) OTHER AUTHORITIES.—The receipt

19 of technical assistance under this chapter shall

20 not affect the eligibility of the operator to re21 ceive technical assistance under other authori22 ties of law available to the Secretary.

23 ‘‘(f) LIMITATION ON PAYMENTS.—
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1 ‘‘(1) IN GENERAL.—The total amount of cost2 sharing and incentive payments paid to a person

3 under this chapter may not exceed—

4 ‘‘(A) $10,000 for any fiscal year; or

5 ‘‘(B) $50,000 for any multiyear contract.

6 ‘‘(2) REGULATIONS.—The Secretary shall issue

7 regulations that are consistent with section 1001 for

8 the purpose of—

9 ‘‘(A) defining the term ‘person’ as used in

10 paragraph (1); and

11 ‘‘(B) prescribing such rules as the Sec12 retary determines necessary to ensure a fair

13 and reasonable application of the limitations es14 tablished under this subsection.

15 ‘‘(g) REGULATIONS.—Not later than 180 days after

16 the effective date of this subsection, the Secretary shall

17 issue regulations to implement the livestock environmental

18 assistance program established under this chapter.’’.

19 (c) CONFORMING AMENDMENTS.—

20 (1) USE OF COMMODITY CREDIT CORPORA21 TION.—Section 1241 of the Food Security Act of

22 1985 (16 U.S.C. 3841(a)) is amended to read as fol23 lows:

24 ‘‘(a) The Secretary may use facilities, services, au25 thorities, and funds of the Commodity Credit Corporation
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1 to carry out subtitle D. Except for the purpose of carrying

2 out subchapter B of chapter 1 of such subtitle, the Sec3 retary may not use funds of the Corporation to carry out

4 such subtitle unless the Corporation has received funds to

5 cover such expenditures from appropriations made to

6 carry out this subtitle.’’.

7 (2) WETLANDS RESERVE PROGRAM.—

8 (A) IN GENERAL.—Section 1237 of the

9 Food Security Act of 1985 (16 U.S.C. 3837) is

10 amended—

11 (i) in subsection (b)(2)—

12 (I) by striking ‘‘not less’’ and in13 serting ‘‘not more’’; and

14 (II) by striking ‘‘2000’’ and in15 serting ‘‘2002’’; and

16 (ii) in subsection (c), by striking

17 ‘‘2000’’ and inserting ‘‘2002’’.

18 (B) LENGTH OF EASEMENT.—Section

19 1237A(e) of the Food Security Act of 1985 (16

20 U.S.C. 3837a(e)) is amended by striking para21 graph (2) and inserting the following:

22 ‘‘(2) shall be for 15 years, but in no case shall

23 be a permanent easement.’’.

24 (3) CONSERVATION RESERVE PROGRAM.—
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1 (A) IN GENERAL.—Section 1231(d) of the

2 Food Security Act of 1985 (16 U.S.C. 3831(d))

3 is amended by striking ‘‘total of’’ and all that

4 follows through the period at the end of the

5 subsection and inserting ‘‘total of 36,400,000

6 acres.’’.

7 (B) OPTIONAL CONTRACT TERMINATION

8 BY PRODUCERS.—Section 1235 of the Food Se9 curity Act of 1985 (16 U.S.C. 3835) is amend10 ed by adding at the end the following:

11 ‘‘(e) TERMINATION BY OWNER OR OPERATOR.—

12 ‘‘(1) NOTICE OF TERMINATION.—An owner or

13 operator of land subject to a contract entered into

14 under this subchapter may terminate the contract by

15 submitting to the Secretary written notice of the in16 tention of the owner or operator to terminate the

17 contract.

18 ‘‘(2) EFFECTIVE DATE.—The contract termi19 nation shall take effect 60 days after the date on

20 which the owner or operator submits the written no21 tice under paragraph (1).

22 ‘‘(3) PRORATED RENTAL PAYMENT.—If a con23 tract entered into under this subchapter is termi24 nated under this subsection before the end of the fis25 cal year for which a rental payment is due, the Sec-
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1 retary shall provide a prorated rental payment cover2 ing the portion of the fiscal year during which the

3 contract was in effect.

4 ‘‘(4) RENEWED ENROLLMENT.—The termi5 nation of a contract entered into under this sub6 chapter shall not affect the ability of the owner or

7 operator who requested the termination to submit a

8 subsequent bid to enroll the land that was subject to

9 the contract into the conservation reserve.

10 ‘‘(5) CONSERVATION REQUIREMENTS.—If land

11 that was subject to a contract is returned to produc12 tion of an agricultural commodity, the conservation

13 requirements under subtitles B and C shall apply to

14 the use of the land to the extent that the require15 ments are similar to those requirements imposed on

16 other similar lands in the area, except that the re17 quirements may not be more onerous that the re18 quirements imposed on other lands.

19 ‘‘(6) REPAYMENT OF COST SHARE.—A person

20 who terminates a contract entered into under this

21 subchapter within less than 3 years after entering

22 into the contract shall reimburse the Secretary for

23 any cost share assistance provided under the con24 tract.’’.
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1 (C) LIMITATION.—Notwithstanding any

2 other provision of law, no new acres shall be en3 rolled in the conservation reserve program es4 tablished under subchapter B of chapter 1 of

5 subtitle D of title XII of the Food Security Act

6 of 1985 (16 U.S.C. 3831 et seq.) in calendar

7 year 1997.

8 TITLE III—AGRICULTURAL PRO9 MOTION AND EXPORT PRO10 GRAMS

11 SEC. 301. MARKET PROMOTION PROGRAM.

12 Effective October 1, 1995, section 211(c)(1) of the

13 Agricultural Trade Act of 1978 (7 U.S.C. 5641(c)(1)) is

14 amended—

15 (1) by striking ‘‘and’’ after ‘‘1991 through

16 1993,’’; and

17 (2) by striking ‘‘through 1997,’’ and inserting

18 ‘‘through 1995, and not more than $100,000,000

19 for each of fiscal years 1996 through 2002,’’.

20 SEC. 302. EXPORT ENHANCEMENT PROGRAM.

21 Effective October 1, 1995, section 301(e)(1) of the

22 Agricultural Trade Act of 1978 (7 U.S.C. 5651(e)(1)) is

23 amended to read as follows:

24 ‘‘(1) IN GENERAL.—The Commodity Credit

25 Corporation shall make available to carry out the
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1 program established under this section not more

2 than—

3 ‘‘(A) $350,000,000 for fiscal year 1996;

4 ‘‘(B) $350,000,000 for fiscal year 1997;

5 ‘‘(C) $500,000,000 for fiscal year 1998;

6 ‘‘(D) $550,000,000 for fiscal year 1999;

7 ‘‘(E) $579,000,000 for fiscal year 2000;

8 ‘‘(F) $478,000,000 for fiscal year 2001;

9 and

10 ‘‘(G) $478,000,000 for fiscal year 2002.’’.

11 TITLE IV—MISCELLANEOUS

12 SEC. 401. CROP INSURANCE.

13 (a) CATASTROPHIC RISK PROTECTION.—Section

14 508(b) of the Federal Crop Insurance Act (7 U.S.C.

15 1508(b)) is amended—

16 (1) in paragraph (4), by adding at the end the

17 following:

18 ‘‘(C) DELIVERY OF COVERAGE.—

19 ‘‘(i) IN GENERAL.—In full consulta20 tion with approved insurance providers, the

21 Secretary may continue to offer cata22 strophic risk protection in a State (or a

23 portion of a State) through local offices of

24 the Department if the Secretary deter25 mines that there is an insufficient number
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1 of approved insurance providers operating

2 in the State or portion to adequately pro3 vide catastrophic risk protection coverage

4 to producers.

5 ‘‘(ii) COVERAGE BY APPROVED INSUR6 ANCE PROVIDERS.—To the extent that cat7 astrophic risk protection coverage by ap8 proved insurance providers is sufficiently

9 available in a State as determined by the

10 Secretary, only approved insurance provid11 ers may provide the coverage in the State.

12 ‘‘(iii) CURRENT POLICIES.—Subject to

13 clause (ii), all catastrophic risk protection

14 policies written by local offices of the De15 partment shall be transferred (including all

16 fees collected for the crop year in which

17 the approved insurance provider will as18 sume the policies) to the approved insur19 ance provider for performance of all sales,

20 service, and loss adjustment functions.’’;

21 and

22 (2) in paragraph (7), by striking subparagraph

23 (A) and inserting the following:

24 ‘‘(A) IN GENERAL.—Effective for the

25 spring-planted 1996 and subsequent crops, to
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1 be eligible for any payment or loan under the

2 Agricultural Market Transition Act, the con3 servation reserve program, or any benefit de4 scribed in section 371 of the Consolidated Farm

5 and Rural Development Act (7 U.S.C. 2008f),

6 a person shall—

7 ‘‘(i) obtain at least the catastrophic

8 level of insurance for each crop of eco9 nomic significance in which the person has

10 an interest; or

11 ‘‘(ii) provide a written waiver to the

12 Secretary that waives any eligibility for

13 emergency crop loss assistance in connec14 tion with the crop.’’.

15 (b) COVERAGE OF SEED CROPS.—Section

16 519(a)(2)(B) of the Act (7 U.S.C. 1519(a)(2)(B)) is

17 amended by inserting ‘‘seed crops,’’ after ‘‘turfgrass sod,’’.

18 SEC. 402. COLLECTION AND USE OF AGRICULTURAL QUAR19 ANTINE AND INSPECTION FEES.

20 Subsection (a) of section 2509 of the Food, Agri21 culture, Conservation, and Trade Act of 1990 (21 U.S.C.

22 136a) is amended to read as follows:

23 ‘‘(a) QUARANTINE AND INSPECTION FEES.—

24 ‘‘(1) FEES AUTHORIZED.—The Secretary of Ag25 riculture may prescribe and collect fees sufficient—
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1 ‘‘(A) to cover the cost of providing agricul2 tural quarantine and inspection services in con3 nection with the arrival at a port in the cus4 toms territory of the United States, or the

5 preclearance or preinspection at a site outside

6 the customs territory of the United States, of

7 an international passenger, commercial vessel,

8 commercial aircraft, commercial truck, or rail9 road car;

10 ‘‘(B) to cover the cost of administering this

11 subsection; and

12 ‘‘(C) through fiscal year 2002, to maintain

13 a reasonable balance in the Agricultural Quar14 antine Inspection User Fee Account established

15 under paragraph (5).

16 ‘‘(2) LIMITATION.—In setting the fees under

17 paragraph (1), the Secretary shall ensure that the

18 amount of the fees are commensurate with the costs

19 of agricultural quarantine and inspection services

20 with respect to the class of persons or entities pay21 ing the fees. The costs of the services with respect

22 to passengers as a class includes the costs of related

23 inspections of the aircraft or other vehicle.

24 ‘‘(3) STATUS OF FEES.—Fees collected under

25 this subsection by any person on behalf of the Sec-
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1 retary are held in trust for the United States and

2 shall be remitted to the Secretary in such manner

3 and at such times as the Secretary may prescribe.

4 ‘‘(4) LATE PAYMENT PENALTIES.—If a person

5 subject to a fee under this subsection fails to pay the

6 fee when due, the Secretary shall assess a late pay7 ment penalty, and the overdue fees shall accrue in8 terest, as required by section 3717 of title 31, Unit9 ed States Code.

10 ‘‘(5) AGRICULTURAL QUARANTINE INSPECTION

11 USER FEE ACCOUNT.—

12 ‘‘(A) ESTABLISHMENT.—There is estab13 lished in the Treasury of the United States a

14 no-year fund, to be known as the ‘Agricultural

15 Quarantine Inspection User Fee Account’,

16 which shall contain all of the fees collected

17 under this subsection and late payment pen18 alties and interest charges collected under para19 graph (4) through fiscal year 2002.

20 ‘‘(B) USE OF ACCOUNT.—For each of the

21 fiscal years 1996 through 2002, funds in the

22 Agricultural Quarantine Inspection User Fee

23 Account shall be available, in such amounts as

24 are provided in advance in appropriations Acts,

25 to cover the costs associated with the provision
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1 of agricultural quarantine and inspection serv2 ices and the administration of this subsection.

3 Amounts made available under this subpara4 graph shall be available until expended.

5 ‘‘(C) EXCESS FEES.—Fees and other

6 amounts collected under this subsection in any

7 of the fiscal years 1996 through 2002 in excess

8 of $100,000,000 shall be available for the pur9 poses specified in subparagraph (B) until ex10 pended, without further appropriation.

11 ‘‘(6) USE OF AMOUNTS COLLECTED AFTER FIS12 CAL YEAR 2002.—After September 30, 2002, the un13 obligated balance in the Agricultural Quarantine In14 spection User Fee Account and fees and other

15 amounts collected under this subsection shall be

16 credited to the Department of Agriculture accounts

17 that incur the costs associated with the provision of

18 agricultural quarantine and inspection services and

19 the administration of this subsection. The fees and

20 other amounts shall remain available to the Sec21 retary until expended without fiscal year limitation.

22 ‘‘(7) STAFF YEARS.—The number of full-time

23 equivalent positions in the Department of Agri24 culture attributable to the provision of agricultural

25 quarantine and inspection services and the adminis-
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1 tration of this subsection shall not be counted to2 ward the limitation on the total number of full-time

3 equivalent positions in all agencies specified in sec4 tion 5(b) of the Federal Workforce Restructuring

5 Act of 1994 (Public Law 103–226; 5 U.S.C. 3101

6 note) or other limitation on the total number of full7 time equivalent positions.’’.

8 SEC. 403. COMMODITY CREDIT CORPORATION INTEREST

9 RATE.

10 Notwithstanding any other provision of law, the

11 monthly Commodity Credit Corporation interest rate ap12 plicable to loans provided for agricultural commodities by

13 the Corporation shall be 100 basis points greater than the

14 rate determined under the applicable interest rate formula

15 in effect on October 1, 1995.

16 TITLE V—COMMISSION ON 21ST

17 CENTURY PRODUCTION AGRI18 CULTURE

19 SEC. 501. ESTABLISHMENT.

20 There is hereby established a commission to be known

21 as the ‘‘Commission on 21st Century Production Agri22 culture’’ (hereinafter in this title referred to as the ‘‘Com23 mission’’).
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1 SEC. 502. COMPOSITION.

2 (a) MEMBERSHIP AND APPOINTMENT.—The Com3 mission shall be composed of 11 members, appointed as

4 follows:

5 (1) Three members shall be appointed by the

6 President.

7 (2) Four members shall be appointed by the

8 Chairman of the Committee on Agriculture of the

9 House of Representatives in consultation with the

10 ranking minority member of the Committee.

11 (3) Four members shall be appointed by the

12 Chairman of the Committee on Agriculture, Nutri13 tion, and Forestry of the Senate in consultation with

14 the ranking minority member of the Committee.

15 (b) QUALIFICATIONS.—At least one of the members

16 appointed under each of the paragraphs (1), (2), and (3)

17 of subsection (a) shall be an individual who is primarily

18 involved in production agriculture. All other members of

19 the Commission shall be appointed from among individ20 uals having knowledge and experience in agricultural pro21 duction, marketing, finance, or trade.

22 (c) TERM OF MEMBERS; VACANCIES.—Members of

23 the Commission shall be appointed for the life of the Com24 mission. A vacancy on the Commission shall not affect its

25 powers, but shall be filled in the same manner as the origi26 nal appointment was made.
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1 (d) TIME FOR APPOINTMENT; FIRST MEETING.—

2 The members of the Commission shall be appointed not

3 later than October 1, 1997. The Commission shall convene

4 its first meeting to carry out its duties under this Act 30

5 days after six members of the Commission have been ap6 pointed.

7 (e) CHAIRMAN.—The chairman of the Commission

8 shall be designated jointly by the Chairman of the Com9 mittee on Agriculture of the House of Representatives and

10 the Chairman of the Committee on Agriculture, Nutrition,

11 and Forestry of the Senate from among the members of

12 the Commission.

13 SEC. 503. COMPREHENSIVE REVIEW OF PAST AND FUTURE

14 OF PRODUCTION AGRICULTURE.

15 (a) INITIAL REVIEW.—The Commission shall conduct

16 a comprehensive review of changes in the condition of pro17 duction agriculture in the United States since the date of

18 the enactment of this Act and the extent to which such

19 changes are the result of the amendments made by this

20 Act. The review shall include the following:

21 (1) An assessment of the initial success of pro22 duction flexibility contracts under section 102 in

23 supporting the economic viability of farming in the

24 United States.
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1 (2) An assessment of the food security situation

2 in the United States in the areas of trade, consumer

3 prices, international competitiveness of United

4 States production agriculture, food supplies, and hu5 manitarian relief.

6 (3) An assessment of the changes in farmland

7 values and agricultural producer incomes since the

8 date of the enactment of this Act.

9 (4) An assessment of the extent to which regu10 latory relief for agricultural producers has been en11 acted and implemented, including the application of

12 cost/benefit principles in the issuance of agricultural

13 regulations.

14 (5) An assessment of the extent to which tax

15 relief for agricultural producers has been enacted in

16 the form of capital gains tax reductions, estate tax

17 exemptions, and mechanisms to average tax loads

18 over high and low income years.

19 (6) An assessment of the effect of any Govern20 ment interference in agricultural export markets,

21 such as the imposition of trade embargoes, and the

22 degree of implementation and success of inter23 national trade agreements.
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1 (7) An assessment of the likely affect of the

2 sale, lease, or transfer of farm poundage quota for

3 peanuts across State lines.

4 (b) SUBSEQUENT REVIEW.—The Commission shall

5 conduct a comprehensive review of the future of produc6 tion agriculture in the United States and the appropriate

7 role of the Federal Government in support of production

8 agriculture. The review shall include the following:

9 (1) An assessment of changes in the condition

10 of production agriculture in the United States since

11 the initial review conducted under subsection (a).

12 (2) Identification of the appropriate future rela13 tionship of the Federal Government with production

14 agriculture after 2002.

15 (3) An assessment of the personnel and infra16 structure requirements of the Department of Agri17 culture necessary to support the future relationship

18 of the Federal Government with production agri19 culture.

20 (c) RECOMMENDATIONS.—In carrying out the subse21 quent review under subsection (b), the Commission shall

22 develop specific recommendations for legislation to achieve

23 the appropriate future relationship of the Federal Govern24 ment with production agriculture identified under sub25 section (a)(2).
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1 SEC. 504. REPORTS.

2 (a) REPORT ON INITIAL REVIEW.—Not later than

3 June 1, 1998, the Commission shall submit to the Presi4 dent, the Committee on Agriculture of the House of Rep5 resentatives, and the Committee on Agriculture, Nutrition,

6 and Forestry of the Senate a report containing the results

7 of the initial review conducted under section 503(a).

8 (b) REPORT ON SUBSEQUENT REVIEW.—Not later

9 than January 1, 2001, the Commission shall submit to

10 the President and the congressional committees specified

11 in subsection (a) a report containing the results of the

12 subsequent review conducted under section 503(b).

13 SEC. 505. POWERS.

14 (a) HEARINGS.—The Commission may, for the pur15 pose of carrying out this Act, conduct such hearings, sit

16 and act at such times, take such testimony, and receive

17 such evidence, as the Commission considers appropriate.

18 (b) ASSISTANCE FROM OTHER AGENCIES.—The

19 Commission may secure directly from any department or

20 agency of the Federal Government such information as

21 may be necessary for the Commission to carry out its du22 ties under this Act. Upon request of the chairman of the

23 Commission, the head of the department or agency shall,

24 to the extent permitted by law, furnish such information

25 to the Commission.
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1 (c) MAIL.—The Commission may use the United

2 States mails in the same manner and under the same con3 ditions as the departments and agencies of the Federal

4 Government.

5 (d) ASSISTANCE FROM SECRETARY.—The Secretary

6 of Agriculture shall provide to the Commission appropriate

7 office space and such reasonable administrative and sup8 port services as the Commission may request.

9 SEC. 506. COMMISSION PROCEDURES.

10 (a) MEETINGS.—The Commission shall meet on a

11 regular basis (as determined by the chairman) and at the

12 call of the chairman or a majority of its members.

13 (b) QUORUM.—A majority of the members of the

14 Commission shall constitute a quorum for the transaction

15 of business.

16 SEC. 507. PERSONNEL MATTERS.

17 (a) COMPENSATION.—Each member of the Commis18 sion shall serve without compensation, but shall be allowed

19 travel expenses including per diem in lieu of subsistence,

20 as authorized by section 5703 of title 5, United States

21 Code, when engaged in the performance of Commission

22 duties.

23 (b) STAFF.—The Commission shall appoint a staff

24 director, who shall be paid at a rate not to exceed the

25 maximum rate of basic pay under section 5376 of title
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1 5, United States Code, and such professional and clerical

2 personnel as may be reasonable and necessary to enable

3 the Commission to carry out its duties under this Act

4 without regard to the provisions of title 5, United States

5 Code, governing appointments in the competitive service,

6 and without regard to the provisions of chapter 51 and

7 subchapter III of chapter 53 of such title, or any other

8 provision of law, relating to the number, classification, and

9 General Schedule rates. No employee appointed under this

10 subsection (other than the staff director) may be com11 pensated at a rate to exceed the maximum rate applicable

12 to level GS–15 of the General Schedule.

13 (c) DETAILED PERSONNEL.—Upon request of the

14 chairman of the Commission, the head of any department

15 or agency of the Federal Government is authorized to de16 tail, without reimbursement, any personnel of such depart17 ment or agency to the Commission to assist the Commis18 sion in carrying out its duties under this section. The de19 tail of any such personnel may not result in the interrup20 tion or loss of civil service status or privilege of such per21 sonnel.

22 SEC. 508. TERMINATION OF COMMISSION.

23 The Commission shall terminate upon submission of

24 the final report required by section 504.

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