" ! HOUSE OF REPRESENTATIVES 107TH CONGRESS

2d Session

REPORT

107–424

FARM SECURITY AND RURAL

INVESTMENT ACT OF 2002

CONFERENCE REPORT

TO ACCOMPANY

H.R. 2646

MAY 1, 2002.—Ordered to be printed

FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

79–340

" ! HOUSE OF REPRESENTATIVES 107TH CONGRESS

2d Session

REPORT

2002

107–424

FARM SECURITY AND RURAL

INVESTMENT ACT OF 2002

CONFERENCE REPORT

TO ACCOMPANY

H.R. 2646

MAY 1, 2002.—Ordered to be printed

107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 107–424

FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

MAY 1, 2002.—Ordered to be printed

Mr. COMBEST, from the committee of conference,

submitted the following

CONFERENCE REPORT

[To accompany H.R. 2646]

The committee of conference on the disagreeing votes of the

two Houses on the amendments of the Senate to the bill (H.R.

2646), to provide for the continuation of agricultural programs

through fiscal year 2011, having met, after full and free conference,

have agreed to recommend and do recommend to their respective

Houses as follows:

That the House recede from its disagreement to the amendment of the Senate to the text of the bill and agree to the same

with an amendment as follows:

In lieu of the matter proposed to be inserted by the Senate

amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Farm Security

and Rural Investment Act of 2002’’.

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

as follows:

Sec. 1. Short title; table of contents.

TITLE I—COMMODITY PROGRAMS

Sec. 1001. Definitions.

Subtitle A—Direct Payments and Counter-Cyclical Payments

Sec. 1101. Establishment of base acres and payment acres for a farm.

Sec. 1102. Establishment of payment yield.

Sec. 1103. Availability of direct payments.

Sec. 1104. Availability of counter-cyclical payments.

Sec. 1105. Producer agreement required as condition of provision of direct payments

and counter-cyclical payments.

Sec. 1106. Planting flexibility.

Sec. 1107. Relation to remaining payment authority under production flexibility

contracts.

Sec. 1108. Period of effectiveness.

2

Subtitle B—Marketing Assistance Loans and Loan Deficiency Payments 

Sec. 1201. Availability of nonrecourse marketing assistance loans for loan commodities. 

Sec. 1202. Loan rates for nonrecourse marketing assistance loans. 

Sec. 1203. Term of loans. 

Sec. 1204. Repayment of loans. 

Sec. 1205. Loan deficiency payments. 

Sec. 1206. Payments in lieu of loan deficiency payments for grazed acreage. 

Sec. 1207. Special marketing loan provisions for upland cotton. 

Sec. 1208. Special competitive provisions for extra long staple cotton. 

Sec. 1209. Availability of recourse loans for high moisture feed grains and seed cotton. 

Subtitle C—Peanuts 

Sec. 1301. Definitions. 

Sec. 1302. Establishment of payment yield and base acres for peanuts for a farm. 

Sec. 1303. Availability of direct payments for peanuts. 

Sec. 1304. Availability of counter-cyclical payments for peanuts. 

Sec. 1305. Producer agreement required as condition on provision of direct payments 

and counter-cyclical payments. 

Sec. 1306. Planting flexibility. 

Sec. 1307. Marketing assistance loans and loan deficiency payments for peanuts. 

Sec. 1308. Miscellaneous provisions. 

Sec. 1309. Termination of marketing quota programs for peanuts and compensation 

to peanut quota holders for loss of quota asset value. 

Sec. 1310. Repeal of superseded price support authority and effect of repeal. 

Subtitle D—Sugar 

Sec. 1401. Sugar program. 

Sec. 1402. Storage facility loans. 

Sec. 1403. Flexible marketing allotments for sugar. 

Subtitle E—Dairy 

Sec. 1501. Milk price support program. 

Sec. 1502. National dairy market loss payments. 

Sec. 1503. Dairy export incentive and dairy indemnity programs. 

Sec. 1504. Dairy product mandatory reporting. 

Sec. 1505. Funding of dairy promotion and research program. 

Sec. 1506. Fluid milk promotion. 

Sec. 1507. Study of national dairy policy. 

Sec. 1508. Studies of effects of changes in approach to national dairy policy and 

fluid milk identity standards. 

Subtitle F—Administration 

Sec. 1601. Administration generally. 

Sec. 1602. Suspension of permanent price support authority. 

Sec. 1603. Payment limitations. 

Sec. 1604. Adjusted gross income limitation. 

Sec. 1605. Commission on application of payment limitations. 

Sec. 1606. Adjustments of loans. 

Sec. 1607. Personal liability of producers for deficiencies. 

Sec. 1608. Extension of existing administrative authority regarding loans. 

Sec. 1609. Commodity Credit Corporation Inventory. 

Sec. 1610. Reserve stock level. 

Sec. 1611. Farm reconstitutions. 

Sec. 1612. Assignment of payments. 

Sec. 1613. Equitable relief from ineligibility for loans, payments, or other benefits. 

Sec. 1614. Tracking of benefits. 

Sec. 1615. Estimates of net farm income. 

Sec. 1616. Availability of incentive payments for certain producers. 

Sec. 1617. Renewed availability of market loss assistance and certain emergency assistance to persons that failed to receive assistance under earlier authorities.

Sec. 1618. Producer retention of erroneously paid loan deficiency payments and 

marketing loan gains. 

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TITLE II—CONSERVATION 

Subtitle A—Conservation Security 

Sec. 2001. Conservation security program. 

Sec. 2002. Conservation compliance. 

Sec. 2003. Partnerships and cooperation. 

Sec. 2004. Administrative requirements for conservation programs. 

Sec. 2005. Reform and assessment of conservation programs. 

Sec. 2006. Conforming amendments. 

Subtitle B—Conservation Reserve 

Sec. 2101. Conservation reserve program. 

Subtitle C—Wetlands Reserve Program 

Sec. 2201. Reauthorization. 

Sec. 2202. Enrollment. 

Sec. 2203. Easements and agreements. 

Sec. 2204. Changes in ownership; agreement modification; termination. 

Subtitle D—Environmental Quality Incentives 

Sec. 2301. Environmental quality incentives program. 

Subtitle E—Grassland Reserve 

Sec. 2401. Grassland reserve program. 

Subtitle F—Other Conservation Programs 

Sec. 2501. Agricultural management assistance. 

Sec. 2502. Grazing, wildlife habitat incentive, source water protection, and Great 

Lakes basin programs. 

Sec. 2503. Farmland protection program. 

Sec. 2504. Resource conservation and development program. 

Sec. 2505. Small watershed rehabilitation program. 

Sec. 2506. Use of symbols, slogans, and logos. 

Sec. 2507. Desert terminal lakes. 

Subtitle G—Conservation Corridor Demonstration Program 

Sec. 2601. Definitions. 

Sec. 2602. Conservation corridor demonstration program. 

Sec. 2603. Implementation of conservation corridor plan. 

Sec. 2604. Funding requirements. 

Subtitle H—Funding and Administration 

Sec. 2701. Funding and administration. 

Sec. 2702. Regulations. 

TITLE III—TRADE 

Subtitle A—Agricultural Trade Development and Assistance Act of 1954 and Related 

Statutes 

Sec. 3001. United States policy.

Sec. 3002. Provision of agricultural commodities.

Sec. 3003. Generation and use of currencies by private voluntary organizations and 

cooperatives.

Sec. 3004. Levels of assistance.

Sec. 3005. Food Aid Consultative Group.

Sec. 3006. Maximum level of expenditures.

Sec. 3007. Administration.

Sec. 3008. Assistance for stockpiling and rapid transportation, delivery, and distribution of shelf-stable prepackaged foods.

Sec. 3009. Sale procedure.

Sec. 3010. Prepositioning.

Sec. 3011. Transportation and related costs.

Sec. 3012. Expiration date. 

Sec. 3013. Micronutrient fortification programs.

Sec. 3014. John Ogonowski Farmer-to-Farmer Program.

Subtitle B—Agricultural Trade Act of 1978

Sec. 3101. Exporter assistance initiative.

4

Sec. 3102. Export credit guarantee program.

Sec. 3103. Market access program.

Sec. 3104. Export enhancement program.

Sec. 3105. Foreign market development cooperator program.

Sec. 3106. Food for progress.

Sec. 3107. McGovern-Dole International Food for Education and Child Nutrition 

Program.

Subtitle C—Miscellaneous 

Sec. 3201. Surplus commodities for developing or friendly countries.

Sec. 3202. Bill Emerson Humanitarian Trust Act.

Sec. 3203. Emerging markets.

Sec. 3204. Biotechnology and agricultural trade program.

Sec. 3205. Technical assistance for specialty crops. 

Sec. 3206. Global market strategy.

Sec. 3207. Report on use of perishable commodities and live animals.

Sec. 3208. Study on fee for services.

Sec. 3209. Sense of Congress concerning foreign assistance programs.

Sec. 3210. Sense of the Senate concerning agricultural trade.

TITLE IV—NUTRITION PROGRAMS 

Sec. 4001. Short title. 

Subtitle A—Food Stamp Program 

Sec. 4101. Encouragement of payment of child support. 

Sec. 4102. Simplified definition of income. 

Sec. 4103. Standard deduction. 

Sec. 4104. Simplified utility allowance. 

Sec. 4105. Simplified determination of housing costs. 

Sec. 4106. Simplified determination of deductions. 

Sec. 4107. Simplified definition of resources. 

Sec. 4108. Alternative issuance systems in disasters. 

Sec. 4109. State option to reduce reporting requirements. 

Sec. 4110. Cost neutrality for electronic benefit transfer systems. 

Sec. 4111. Report on electronic benefit transfer systems. 

Sec. 4112. Alternative procedures for residents of certain group facilities. 

Sec. 4113. Redemption of benefits through group living arrangements. 

Sec. 4114. Availability of food stamp program applications on the Internet. 

Sec. 4115. Transitional food stamps for families moving from welfare. 

Sec. 4116. Grants for simple application and eligibility determination systems and 

improved access to benefits. 

Sec. 4117. Delivery to retailers of notices of adverse action. 

Sec. 4118. Reform of quality control system. 

Sec. 4119. Improvement of calculation of State performance measures. 

Sec. 4120. Bonuses for States that demonstrate high or most improved performance. 

Sec. 4121. Employment and training program. 

Sec. 4122. Reauthorization of food stamp program and food distribution program on 

Indian reservations. 

Sec. 4123. Expanded grant authority. 

Sec. 4124. Consolidated block grants for Puerto Rico and American Samoa. 

Sec. 4125. Assistance for community food projects. 

Sec. 4126. Availability of commodities for the emergency food assistance program. 

Subtitle B—Commodity Distribution 

Sec. 4201. Commodity supplemental food program. 

Sec. 4202. Commodity donations. 

Sec. 4203. Distribution of surplus commodities to special nutrition projects. 

Sec. 4204. Emergency food assistance. 

Subtitle C—Child Nutrition and Related Programs 

Sec. 4301. Commodities for school lunch program.

Sec. 4302. Eligibility for free and reduced price meals. 

Sec. 4303. Purchases of locally produced foods. 

Sec. 4304. Applicability of Buy-American requirement to Puerto Rico. 

Sec. 4305. Fruit and vegetable pilot program. 

Sec. 4306. Eligibility for assistance under the special supplemental nutrition program for women, infants, and children. 

Sec. 4307. WIC farmers’ market nutrition program. 

5

Subtitle D—Miscellaneous 

Sec. 4401. Partial restoration of benefits to legal immigrants. 

Sec. 4402. Seniors farmers’ market nutrition program. 

Sec. 4403. Nutrition information and awareness pilot program. 

Sec. 4404. Hunger fellowship program. 

Sec. 4405. General effective date. 

TITLE V—CREDIT 

Subtitle A—Farm Ownership Loans 

Sec. 5001. Direct loans. 

Sec. 5002. Financing of bridge loans. 

Sec. 5003. Amount of guarantee of loans for farm operations on tribal lands. 

Sec. 5004. Guarantee of loans made under State beginning farmer or rancher programs. 

Sec. 5005. Down Payment Loan Program. 

Sec. 5006. Beginning farmer and rancher contract land sales program. 

Subtitle B—Operating Loans 

Sec. 5101. Direct loans. 

Sec. 5102. Suspension of limitation on period for which borrowers are eligible for 

guaranteed assistance. 

Subtitle C—Emergency Loans 

Sec. 5201. Emergency loans in response to an emergency resulting from quarantines. 

Subtitle D—Administrative Provisions 

Sec. 5301. Evaluations of direct and guaranteed loan programs. 

Sec. 5302. Eligibility of trusts and limited liability companies for farm ownership 

loans, farm operating loans, and emergency loans. 

Sec. 5303. Debt settlement. 

Sec. 5304. Temporary authority to enter into contracts; private collection agencies. 

Sec. 5305. Interest rate options for loans in servicing. 

Sec. 5306. Elimination of requirement that Secretary require county committees to 

certify in writing that certain loan reviews have been conducted. 

Sec. 5307. Simplified loan guarantee application available for loans of greater 

amounts. 

Sec. 5308. Inventory property. 

Sec. 5309. Administration of certified lenders and preferred certified lenders programs. 

Sec. 5310. Definitions. 

Sec. 5311. Loan authorization levels. 

Sec. 5312. Reservation of funds for direct operating loans for beginning farmers and 

ranchers. 

Sec. 5313. Interest rate reduction program. 

Sec. 5314. Reamortization of recapture payments. 

Sec. 5315. Allocation of certain funds for socially disadvantaged farmers and ranchers. 

Sec. 5316. Waiver of borrower training certification requirement. 

Sec. 5317. Timing of loan assessments. 

Sec. 5318. Annual review of borrowers. 

Sec. 5319. Loan eligibility for borrowers with prior debt forgiveness. 

Sec. 5320. Making and servicing of loans by personnel of State, county, or area committees. 

Sec. 5321. Eligibility of employees of State, county, or area committee for loans and 

loan guarantees. 

Subtitle E—Farm Credit 

Sec. 5401. Repeal of burdensome approval requirements. 

Sec. 5402. Banks for cooperatives. 

Sec. 5403. Insurance corporation premiums. 

Subtitle F—General Provisions 

Sec. 5501. Technical amendments. 

6

TITLE VI—RURAL DEVELOPMENT 

Subtitle A—Consolidated Farm and Rural Development Act 

Sec. 6001. Eligibility of rural empowerment zones and rural enterprise communities 

for direct and guaranteed loans for essential community facilities.

Sec. 6002. Water or waste disposal grants.

Sec. 6003. Rural business opportunity grants.

Sec. 6004. Child day care facilities.

Sec. 6005. Rural water and wastewater circuit rider program.

Sec. 6006. Multijurisdictional regional planning organizations.

Sec. 6007. Loan guarantees for certain rural development loans.

Sec. 6008. Tribal college and university essential community facilities.

Sec. 6009. Emergency and imminent community water assistance grant program.

Sec. 6010. Water and waste facility grants for Native American tribes.

Sec. 6011. Grants for water systems for rural and native villages in Alaska.

Sec. 6012. Grants to nonprofit organizations to finance the construction, refurbishing, and servicing of individually-owned household water well systems in rural areas for individuals with low or moderate incomes.

Sec. 6013. Loans and loan guarantees for renewable energy systems.

Sec. 6014. Rural business enterprise grants.

Sec. 6015. Rural cooperative development grants.

Sec. 6016. Grants to broadcasting systems.

Sec. 6017. Business and industry loan modifications.

Sec. 6018. Use of rural development loans and grants for other purposes.

Sec. 6019. Simplified application forms for loan guarantees.

Sec. 6020. Definition of rural and rural area.

Sec. 6021. National Rural Development Partnership.

Sec. 6022. Rural telework.

Sec. 6023. Historic barn preservation.

Sec. 6024. Grants for NOAA weather radio transmitters.

Sec. 6025. Grants to train farm workers in new technologies and to train farm 

workers in specialized skills necessary for higher value crops.

Sec. 6026. Rural community advancement program.

Sec. 6027. Delta Regional Authority.

Sec. 6028. Northern Great Plains Regional Authority.

Sec. 6029. Rural business investment program.

Sec. 6030. Rural strategic investment program.

Sec. 6031. Funding of pending rural development loan and grant applications.

Subtitle B—Rural Electrification Act of 1936

Sec. 6101. Guarantees for bonds and notes issued for electrification or telephone 

purposes.

Sec. 6102. Expansion of 911 access.

Sec. 6103. Enhancement of access to broadband service in rural areas.

Subtitle C—Food, Agriculture, Conservation, and Trade Act of 1990

Sec. 6201. Alternative Agricultural Research and Commercialization Corporation.

Sec. 6202. Rural electronic commerce extension program.

Sec. 6203. Telemedicine and distance learning services in rural areas.

Subtitle D—SEARCH Grants for Small Communities 

Sec. 6301. Definitions. 

Sec. 6302. SEARCH grant program. 

Sec. 6303. Report. 

Sec. 6304. Funding. 

Subtitle E—Miscellaneous 

Sec. 6401. Value-added agricultural product market development grants.

Sec. 6402. Agriculture innovation center demonstration program.

Sec. 6403. Fund for Rural America.

Sec. 6404. Rural local television broadcast signal loan guarantees.

Sec. 6405. Rural firefighters and emergency personnel grant program.

Sec. 6406. Sense of Congress on rural policy coordination.

TITLE VII—RESEARCH AND RELATED MATTERS 

Subtitle A—Extensions 

Sec. 7101. National rural information center clearinghouse. 

7

Sec. 7102. Grants and fellowships for food and agricultural sciences education. 

Sec. 7103. Policy research centers. 

Sec. 7104. Human nutrition intervention and health promotion research program. 

Sec. 7105. Pilot research program to combine medical and agricultural research. 

Sec. 7106. Nutrition education program. 

Sec. 7107. Continuing animal health and disease research programs. 

Sec. 7108. Appropriations for research on national or regional problems. 

Sec. 7109. Grants to upgrade agricultural and food sciences facilities at 1890 landgrant colleges, including Tuskegee University. 

Sec. 7110. National research and training virtual centers. 

Sec. 7111. Hispanic-serving institutions. 

Sec. 7112. Competitive grants for international agricultural science and education 

programs. 

Sec. 7113. University research. 

Sec. 7114. Extension service. 

Sec. 7115. Supplemental and alternative crops. 

Sec. 7116. Aquaculture research facilities. 

Sec. 7117. Rangeland research. 

Sec. 7118. National genetics resources program. 

Sec. 7119. High-priority research and extension initiatives. 

Sec. 7120. Nutrient management research and extension initiative. 

Sec. 7121. Agricultural telecommunications program. 

Sec. 7122. Assistive technology program for farmers with disabilities. 

Sec. 7123. Partnerships for high-value agricultural product quality research. 

Sec. 7124. Biobased products. 

Sec. 7125. Integrated research, education, and extension competitive grants program. 

Sec. 7126. Equity in Educational Land-Grant Status Act of 1994. 

Sec. 7127. 1994 Institution research grants. 

Sec. 7128. Endowment for 1994 Institutions. 

Sec. 7129. Precision agriculture. 

Sec. 7130. Thomas Jefferson Initiative for crop diversification. 

Sec. 7131. Support for research regarding diseases of wheat, triticale, and barley 

caused by fusarium graminearum or by tilletia indica. 

Sec. 7132. Office of Pest Management Policy. 

Sec. 7133. National Agricultural Research, Extension, Education, and Economics 

Advisory Board. 

Sec. 7134. Grants for research on production and marketing of alcohols and industrial hydrocarbons from agricultural commodities and forest products. 

Sec. 7135. Agricultural experiment stations research facilities. 

Sec. 7136. Competitive, special, and facilities research grants national research initiative. 

Sec. 7137. Federal agricultural research facilities authorization of appropriations. 

Sec. 7138. Critical agricultural materials research. 

Sec. 7139. Aquaculture. 

Subtitle B—Modifications 

Sec. 7201. Equity in Educational Land-Grant Status Act of 1994. 

Sec. 7202. Carryover for experiment stations. 

Sec. 7203. Authorization percentages for research and extension formula funds. 

Sec. 7204. Carryover for eligible institutions. 

Sec. 7205. Initiative for future agriculture and food systems. 

Sec. 7206. Eligibility for integrated grants program. 

Sec. 7207. Agricultural Research, Extension, and Education Reform Act of 1998. 

Sec. 7208. Food, Agriculture, Conservation, and Trade Act of 1990. 

Sec. 7209. National Agricultural Research, Extension, and Teaching Policy Act of 

1977. 

Sec. 7210. Biotechnology risk assessment research. 

Sec. 7211. Competitive, special, and facilities research grants. 

Sec. 7212. Matching funds requirement for research and extension activities of 1890 

Institutions. 

Sec. 7213. Matching requirements for research and extension formula funds for insular area land-grant institutions. 

Sec. 7214. Definition of food and agricultural sciences. 

Sec. 7215. Federal Extension Service. 

Sec. 7216. Policy research centers. 

Sec. 7217. Availability of competitive grant funds. 

Sec. 7218. Organic agriculture research and extension initiative. 

Sec. 7219. Senior scientific research service. 

8

Sec. 7220. Termination of certain schedule a appointments. 

Sec. 7221. Biosecurity planning and response programs. 

Sec. 7222. Indirect costs for small business innovation research grants. 

Sec. 7223. Carbon cycle research. 

Subtitle C—Repeal of Certain Activities and Authorities 

Sec. 7301. Food Safety Research Information Office and National Conference. 

Sec. 7302. Reimbursement of expenses under Sheep Promotion, Research, and Information Act of 1994. 

Sec. 7303. Market expansion research. 

Sec. 7304. National Advisory Board on Agricultural Weather. 

Sec. 7305. Agricultural information exchange with Ireland. 

Sec. 7306. Pesticide resistance study. 

Sec. 7307. Expansion of education study. 

Sec. 7308. Task force on 10-year strategic plan for agricultural research facilities. 

Subtitle D—New Authorities 

Sec. 7401. Subtitle definitions. 

Sec. 7402. Research equipment grants. 

Sec. 7403. Joint requests for proposals. 

Sec. 7404. Review of Agricultural Research Service. 

Sec. 7405. Beginning farmer and rancher development program. 

Sec. 7406. Sense of Congress regarding doubling of funding for agricultural research. 

Sec. 7407. Organic production and market data initiatives. 

Sec. 7408. International organic research collaboration. 

Sec. 7409. Report on producers and handlers of organic agricultural products. 

Sec. 7410. Report on genetically modified pest-protected plants. 

Sec. 7411. Study of nutrient banking. 

Sec. 7412. Grants for youth organizations. 

Subtitle E—Miscellaneous 

Sec. 7501. Resident instruction and distance education at institutions of higher education in United States insular areas. 

Sec. 7502. Definitions. 

Sec. 7503. Resident instruction and distance education grants program for insular 

area institutions of higher education. 

Sec. 7504. Declaration of extraordinary emergency and resulting authorities. 

Sec. 7505. Agricultural biotechnology research and development for developing countries. 

Sec. 7506. Land acquisition authority, national peanut research laboratory, Dawson, Georgia. 

TITLE VIII—FORESTRY 

Subtitle A—Cooperative Forestry Assistance Act of 1978

Sec. 8001. Repeal of forestry incentives program and stewardship incentive program. 

Sec. 8002. Establishment of forest land enhancement program. 

Sec. 8003. Enhanced community fire protection. 

Subtitle B—Amendments to Other Laws 

Sec. 8101. Sustainable forestry outreach initiative; renewable resources extension activities. 

Sec. 8102. Office of International Forestry. 

Subtitle C—Miscellaneous Provisions 

Sec. 8201. McIntire-Stennis cooperative forestry research program.

TITLE IX—ENERGY 

Sec. 9001. Definitions.

Sec. 9002. Federal procurement of biobased products.

Sec. 9003. Biorefinery development grants.

Sec. 9004. Biodiesel fuel education program.

Sec. 9005. Energy audit and renewable energy development program.

Sec. 9006. Renewable energy systems and energy efficiency improvements.

Sec. 9007. Hydrogen and fuel cell technologies.

Sec. 9008. Biomass research and development.

9

Sec. 9009. Cooperative research and extension projects.

Sec. 9010. Continuation of bioenergy program.

TITLE X—MISCELLANEOUS 

Subtitle A—Crop Insurance 

Sec. 10001. Equal crop insurance treatment of potatoes and sweet potatoes. 

Sec. 10002. Continuous coverage. 

Sec. 10003. Quality loss adjustment procedures. 

Sec. 10004. Adjusted gross revenue insurance pilot program. 

Sec. 10005. Sense of Congress on expansion of crop insurance coverage. 

Sec. 10006. Report on specialty crop insurance. 

Subtitle B—Disaster Assistance 

Sec. 10101. Reference to sea grass and sea oats as crops covered by noninsured crop 

disaster assistance program. 

Sec. 10102. Emergency grants to assist low-income migrant and seasonal farmworkers. 

Sec. 10103. Emergency loans for seed producers. 

Sec. 10104. Assistance for livestock producers. 

Sec. 10105. Market loss assistance for apple producers. 

Sec. 10106. Market loss assistance for onion producers. 

Sec. 10107. Commercial fisheries failure. 

Sec. 10108. Study of feasibility of producer indemnification from Governmentcaused disasters. 

Subtitle C—Tree Assistance Program 

Sec. 10201. Definitions. 

Sec. 10202. Eligibility. 

Sec. 10203. Assistance. 

Sec. 10204. Limitations on assistance. 

Sec. 10205. Authorization of appropriations. 

Subtitle D—Animal Welfare 

Sec. 10301. Definition of animal under the Animal Welfare Act. 

Sec. 10302. Prohibition on interstate movement of animals for animal fighting. 

Sec. 10303. Penalties and foreign commerce provisions of the Animal Welfare Act. 

Sec. 10304. Report on rats, mice, and birds. 

Sec. 10305. Enforcement of Humane Methods of Slaughter Act of 1958. 

Subtitle E—Animal Health Protection 

Sec. 10401. Short title. 

Sec. 10402. Findings. 

Sec. 10403. Definitions. 

Sec. 10404. Restriction on importation or entry. 

Sec. 10405. Exportation. 

Sec. 10406. Interstate movement. 

Sec. 10407. Seizure, quarantine, and disposal. 

Sec. 10408. Inspections, seizures, and warrants. 

Sec. 10409. Detection, control, and eradication of diseases and pests. 

Sec. 10410. Veterinary accreditation program. 

Sec. 10411. Cooperation. 

Sec. 10412. Reimbursable agreements. 

Sec. 10413. Administration and claims. 

Sec. 10414. Penalties. 

Sec. 10415. Enforcement. 

Sec. 10416. Regulations and orders. 

Sec. 10417. Authorization of appropriations. 

Sec. 10418. Repeals and conforming amendments. 

Subtitle F—Livestock 

Sec. 10501. Transportation of poultry and other animals. 

Sec. 10502. Swine contractors. 

Sec. 10503. Right to discuss terms of contract. 

Sec. 10504. Veterinary training. 

Sec. 10505. Pseudorabies eradication program. 

10

Subtitle G—Specialty Crops 

Sec. 10601. Marketing orders for caneberries. 

Sec. 10602. Availability of section 32 funds. 

Sec. 10603. Purchase of specialty crops. 

Sec. 10604. Protection for purchasers of farm products. 

Sec. 10605. Farmers’ market promotion program. 

Sec. 10606. National organic certification cost-share program. 

Sec. 10607. Exemption of certified organic products from assessments. 

Sec. 10608. Cranberry acreage reserve program. 

Subtitle H—Administration 

Sec. 10701. Initial rate of basic pay for employees of county committees. 

Sec. 10702. Commodity Futures Trading Commission pay comparability. 

Sec. 10703. Overtime and holiday pay. 

Sec. 10704. Assistant Secretary of Agriculture for Civil Rights. 

Sec. 10705. Operation of Graduate School of Department of Agriculture. 

Sec. 10706. Implementation funding and information management. 

Sec. 10707. Outreach and assistance for socially disadvantaged farmers and ranchers. 

Sec. 10708. Transparency and accountability for socially disadvantaged farmers 

and ranchers; public disclosure requirements for county committee elections. 

Subtitle I—General Provisions 

Sec. 10801. Cotton classification services. 

Sec. 10802. Program of public education regarding use of biotechnology in producing food for human consumption. 

Sec. 10803. Chino Dairy Preserve Project. 

Sec. 10804. Grazinglands Research Laboratory. 

Sec. 10805. Food and Agricultural Policy Research Institute. 

Sec. 10806. Market names for catfish and ginseng. 

Sec. 10807. Food Safety Commission. 

Sec. 10808. Pasteurization. 

Sec. 10809. Rulemaking on labeling of irradiated food; certain petitions. 

Sec. 10810. Penalties for violations of Plant Protection Act. 

Sec. 10811. Preclearance quarantine inspections. 

Sec. 10812. Connecticut River Atlantic Salmon Commission. 

Sec. 10813. Pine Point School. 

Sec. 10814. 7-month extension of chapter 12 of title 11 of the United States Code. 

Sec. 10815. Practices involving nonambulatory livestock. 

Sec. 10816. Country of origin labeling. 

Subtitle J—Miscellaneous Studies and Reports 

Sec. 10901. Report on specialty crop purchases. 

Sec. 10902. Report on pouched and canned salmon. 

Sec. 10903. Study on updating yields. 

Sec. 10904. Report on effect of farm program payments. 

Sec. 10905. Chiloquin Dam fish passage feasibility study. 

Sec. 10906. Report on geographically disadvantaged farmers and ranchers. 

Sec. 10907. Studies on agricultural research and technology. 

Sec. 10908. Report on tobacco settlement agreement. 

Sec. 10909. Report on sale and use of pesticides for agricultural uses. 

Sec. 10910. Review of operation of agricultural and natural resource programs on 

tribal trust land.

TITLE I—COMMODITY PROGRAMS 

SEC. 1001. DEFINITIONS. 

In this title (other than subtitle C): 

(1) AGRICULTURAL ACT OF 1949.—The term ‘‘Agricultural 

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

et seq.), as in effect prior to the suspensions under section 171 

of the Federal Agriculture Improvement and Reform Act of 1996 

(7 U.S.C. 7301). 

11

(2) BASE ACRES.—The term ‘‘base acres’’, with respect to a 

covered commodity on a farm, means the number of acres established under section 1101 with respect to the covered commodity 

on the election made by the owner of the farm under subsection 

(a) of such section. 

(3) COUNTER-CYCLICAL PAYMENT.—The term ‘‘counter-cyclical payment’’ means a payment made to producers on a farm 

under section 1104. 

(4) COVERED COMMODITY.—The term ‘‘covered commodity’’ means wheat, corn, grain sorghum, barley, oats, upland cotton, 

rice, soybeans, and other oilseeds. 

(5) DIRECT PAYMENT.—The term ‘‘direct payment’’ means a 

payment made to producers on a farm under section 1103. 

(6) EFFECTIVE PRICE.—The term ‘‘effective price’’, with respect to a covered commodity for a crop year, means the price 

calculated by the Secretary under section 1104 to determine 

whether counter-cyclical payments are required to be made for 

that crop year. 

(7) EXTRA LONG STAPLE COTTON.—The term ‘‘extra long staple cotton’’ means cotton that— (A) is produced from pure strain varieties of the 

Barbadense species or any hybrid thereof, or other similar 

types of extra long staple cotton, designated by the Secretary, having characteristics needed for various end uses 

for which United States upland cotton is not suitable and 

grown in irrigated cotton-growing regions of the United 

States designated by the Secretary or other areas designated by the Secretary as suitable for the production of 

the varieties or types; and 

(B) is ginned on a roller-type gin or, if authorized by 

the Secretary, ginned on another type gin for experimental 

purposes. 

(8) LOAN COMMODITY.—The term ‘‘loan commodity’’ means 

wheat, corn, grain sorghum, barley, oats, upland cotton, extra 

long staple cotton, rice, soybeans, other oilseeds, wool, mohair, 

honey, dry peas, lentils, and small chickpeas. 

(9) OTHER OILSEED.—The term ‘‘other oilseed’’ means a crop 

of sunflower seed, rapeseed, canola, safflower, flaxseed, mustard 

seed, or, if designated by the Secretary, another oilseed. 

(10) PAYMENT ACRES.—The term ‘‘payment acres’’ means 85 

percent of the base acres of a covered commodity on a farm, as 

established under section 1101, on which direct payments and 

counter-cyclical payments are made. 

(11) PAYMENT YIELD.—

(A) IN GENERAL.—The term ‘‘payment yield’’ means the 

yield established under section 1102 for a farm for a covered commodity.

(B) UPDATED PAYMENT YIELD.—The term ‘‘updated payment yield’’ means the payment yield elected by the owner 

of a farm under section 1102(e) to be used in calculating 

the counter-cyclical payments for the farm.

(12) PRODUCER.—The term ‘‘producer’’ means an owner, operator, landlord, tenant, or sharecropper that shares in the risk 

of producing a crop and is entitled to share in the crop available for marketing from the farm, or would have shared had 

12

the crop been produced. In determining whether a grower of hybrid seed is a producer, the Secretary shall not take into consideration the existence of a hybrid seed contract and shall ensure 

that program requirements do not adversely affect the ability of 

the grower to receive a payment under this title. 

(13) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture. 

(14) STATE.—The term ‘‘State’’ means each of the several 

States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession 

of the United States. 

(15) TARGET PRICE.—The term ‘‘target price’’ means the 

price per bushel (or other appropriate unit in the case of upland 

cotton, rice, and other oilseeds) of a covered commodity used to 

determine the payment rate for counter-cyclical payments. 

(16) UNITED STATES.—The term ‘‘United States’’, when used 

in a geographical sense, means all of the States.

Subtitle A—Direct Payments and CounterCyclical Payments

SEC. 1101. ESTABLISHMENT OF BASE ACRES AND PAYMENT ACRES FOR 

A FARM. 

(a) ELECTION BY OWNER OF BASE ACRES CALCULATION METHOD.—

(1) ALTERNATIVE CALCULATION METHODS.—For the purpose 

of making direct payments and counter-cyclical payments with 

respect to a farm, the Secretary shall give an owner of the farm 

an opportunity to elect 1 of the following as the method by 

which the base acres of all covered commodities on the farm are 

to be determined: 

(A) Subject to paragraphs (3) and (4), the 4-year average of the following: 

(i) Acreage planted on the farm to covered commodities for harvest, grazing, haying, silage, or other 

similar purposes for the 1998 through 2001 crop years. 

(ii) Any acreage on the farm that the producers 

were prevented from planting during the 1998 through 

2001 crop years to covered commodities because of 

drought, flood, or other natural disaster, or other condition beyond the control of the producers, as determined by the Secretary. 

(B) Subject to paragraph (3), the sum of the following: 

(i) The contract acreage (as defined in section 102 

of the Federal Agriculture Improvement and Reform 

Act of 1996 (7 U.S.C. 7202)) used by the Secretary to 

calculate the fiscal year 2002 payment authorized 

under section 114 of such Act (7 U.S.C. 7214) for the 

covered commodities on the farm. 

(ii) The 4-year average of eligible oilseed acreage 

on the farm for the 1998 through 2001 crop years, as 

determined by the Secretary under paragraph (2). 

(2) ELIGIBLE OILSEED ACREAGE.—

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(A) CALCULATION.—For purposes of paragraph 

(1)(B)(ii), the eligible acreage for each oilseed on a farm 

during each of the 1998 through 2001 crop years shall be 

determined in the manner provided in paragraph (1)(A), except that the total acreage for all oilseeds on the farm for 

a crop year may not exceed the difference between—

(i) the total acreage determined under paragraph 

(1)(A) for all covered commodities for that crop year; 

and 

(ii) the total contract acreage determined under 

paragraph (1)(B)(i). 

(B) EFFECT OF NEGATIVE NUMBER.—If the subtraction 

performed under subparagraph (A) results in a negative 

number, the eligible oilseed acreage on the farm for that 

crop year shall be zero for purposes of determining the 4-

year average. 

(C) OFFSET OF CONTRACT ACREAGE.—The owner of a 

farm may increase the eligible acreage for an oilseed on the 

farm by reducing the contract acreage determined under 

paragraph (1)(B)(i) for 1 or more covered commodities on 

an acre-for-acre basis, except that the total base acreage for 

each oilseed on the farm may not exceed the 4-year average 

of each oilseed determined under paragraph (1)(B)(ii).

(3) INCLUSION OF ALL 4 YEARS IN AVERAGE.—For the purpose of determining a 4-year acreage average under this subsection for a farm, the Secretary shall not exclude any crop year 

in which a covered commodity was not planted. 

(4) TREATMENT OF MULTIPLE PLANTING OR PREVENTED

PLANTING.—For the purpose of determining under paragraph 

(1)(A) the acreage on a farm that producers planted or were prevented from planting during the 1998 through 2001 crop years 

to covered commodities, if the acreage that was planted or prevented from being planted was devoted to another covered commodity in the same crop year (other than a covered commodity 

produced under an established practice of double cropping), the 

owner may elect the commodity to be used for that crop year in 

determining the 4-year average, but may not include both the 

initial commodity and the subsequent commodity.

(b) SINGLE ELECTION; TIME FOR ELECTION.—

(1) NOTICE OF ELECTION OPPORTUNITY.—As soon as practicable after the date of enactment of this Act, the Secretary 

shall provide notice to owners of farms regarding their opportunity to make the election described in subsection (a). The notice shall include the following: 

(A) Notice that the opportunity of an owner to make the 

election is being provided only once. 

(B) Information regarding the manner in which the 

election must be made and the time periods and manner in 

which notice of the election must be submitted to the Secretary. 

(2) ELECTION DEADLINE.—Within the time period and in 

the manner prescribed pursuant to paragraph (1), the owner of 

a farm shall submit to the Secretary notice of the election made 

by the owner under subsection (a).

14

(c) EFFECT OF FAILURE TO MAKE ELECTION.—If the owner of a 

farm fails to make the election under subsection (a) or fails to timely 

notify the Secretary of the election made, as required by subsection 

(b), the owner shall be deemed to have made the election described 

in subsection (a)(1)(B) to determine base acres for all covered commodities on the farm. 

(d) APPLICATION OF ELECTION TO ALL COVERED COMMOD- ITIES.—The election made under subparagraph (A) or (B) of subsection (a)(1), or deemed to be made under subsection (c), with respect to a farm shall apply to all of the covered commodities on the 

farm. 

(e) TREATMENT OF CONSERVATION RESERVE CONTRACT ACRE- AGE.— (1) IN GENERAL.—The Secretary shall provide for an adjustment, as appropriate, in the base acres for covered commodities 

for a farm whenever either of the following circumstances occurs: 

(A) A conservation reserve contract entered into under 

section 1231 of the Food Security Act of 1985 (16 U.S.C. 

3831) with respect to the farm expires or is voluntarily terminated. 

(B) Cropland is released from coverage under a conservation reserve contract by the Secretary. 

(2) SPECIAL PAYMENT RULES.—For the crop year in which 

a base acres adjustment under paragraph (1) is first made, the 

owner of the farm shall elect to receive either direct payments 

and counter-cyclical payments with respect to the acreage added 

to the farm under this subsection or a prorated payment under 

the conservation reserve contract, but not both. 

(f) PAYMENT ACRES.—The payment acres for a covered commodity on a farm shall be equal to 85 percent of the base acres for 

the covered commodity.

(g) PREVENTION OF EXCESS BASE ACRES.— (1) REQUIRED REDUCTION.—If the sum of the base acres for 

a farm, together with the acreage described in paragraph (2), 

exceeds the actual cropland acreage of the farm, the Secretary 

shall reduce the base acres for 1 or more covered commodities 

for the farm or the base acres for peanuts for the farm under 

subtitle C so that the sum of the base acres and acreage described in paragraph (2) does not exceed the actual cropland 

acreage of the farm. 

(2) OTHER ACREAGE.—For purposes of paragraph (1), the 

Secretary shall include the following: 

(A) Any base acres for peanuts for the farm under subtitle C. 

(B) Any acreage on the farm enrolled in the conservation reserve program or wetlands reserve program under 

chapter 1 of subtitle D of title XII of the Food Security Act 

of 1985 (16 U.S.C. 3830 et seq.). 

(C) Any other acreage on the farm enrolled in a conservation program for which payments are made in exchange for not producing an agricultural commodity on the 

acreage.

(3) SELECTION OF ACRES.—The Secretary shall give the 

owner of the farm the opportunity to select the base acres or the 

15

base acres for peanuts for the farm under subtitle C against 

which the reduction required by paragraph (1) will be made.

(4) EXCEPTION FOR DOUBLE-CROPPED ACREAGE.—In applying paragraph (1), the Secretary shall make an exception in the 

case of double cropping, as determined by the Secretary.

(5) COORDINATED APPLICATION OF REQUIREMENTS.—The 

Secretary shall take into account section 1302(f) when applying 

the requirements of this subsection.

(h) PERMANENT REDUCTION IN BASE ACRES.—The owner of a 

farm may reduce, at any time, the base acres for any covered commodity for the farm. The reduction shall be permanent and made 

in the manner prescribed by the Secretary.

SEC. 1102. ESTABLISHMENT OF PAYMENT YIELD. 

(a) ESTABLISHMENT AND PURPOSE.—For the purpose of making 

direct payments and counter-cyclical payments under this subtitle, 

the Secretary shall provide for the establishment of a payment yield 

for each farm for each covered commodity in accordance with this 

section. 

(b) USE OF FARM PROGRAM PAYMENT YIELD.—Except as otherwise provided in this section, the payment yield for each of the 2002 

through 2007 crops of a covered commodity for a farm shall be the 

farm program payment yield established for the 1995 crop of the 

covered commodity under section 505 of the Agricultural Act of 1949 

(7 U.S.C. 1465), as adjusted by the Secretary to account for any additional yield payments made with respect to that crop under section 505(b)(2) of that Act. 

(c) FARMS WITHOUT FARM PROGRAM PAYMENT YIELD.—In the 

case of a farm for which a farm program payment yield is unavailable for a covered commodity (other than soybeans or other oilseeds), the Secretary shall establish an appropriate payment yield 

for the covered commodity on the farm taking into consideration the 

farm program payment yields applicable to the commodity under 

subsection (b) for similar farms, but before the yields for the similar 

farms are updated as provided in subsection (e). 

(d) PAYMENT YIELDS FOR OILSEEDS.— (1) DETERMINATION OF AVERAGE YIELD.—In the case of soybeans and each other oilseed, the Secretary shall determine the 

average yield per planted acre for the oilseed on a farm for the 

1998 through 2001 crop years, excluding any crop year in 

which the acreage planted to the oilseed was zero.

(2) ADJUSTMENT FOR PAYMENT YIELD.—The payment yield 

for a farm for an oilseed shall be equal to the product of the 

following: 

(A) The average yield for the oilseed determined under 

paragraph (1). 

(B) The ratio resulting from dividing the national average yield for the oilseed for the 1981 through 1985 crops by 

the national average yield for the oilseed for the 1998 

through 2001 crops.

(3) USE OF PARTIAL COUNTY AVERAGE YIELD.—If the yield 

per planted acre for a crop of an oilseed for a farm for any of 

the 1998 through 2001 crop years was less than 75 percent of 

the county yield for that oilseed, the Secretary shall assign a 

yield for that crop year equal to 75 percent of the county yield 

for the purpose of determining the average under paragraph (1).

16

(e) OPPORTUNITY TO PARTIALLY UPDATE YIELDS USED TO DE- TERMINE COUNTER-CYCLICAL PAYMENTS.— (1) ELECTION TO UPDATE.—If the owner of a farm elects to 

use the base acres calculation method described in section 

1101(a)(1)(A), the owner shall also have a 1-time opportunity to 

elect to use 1 of the methods described in paragraph (3) to partially update the payment yields that would otherwise be used 

in calculating any counter-cyclical payments for covered commodities on the farm. 

(2) TIME FOR ELECTION.—The election under paragraph (1) 

shall be made at the same time and in the same manner as the 

Secretary prescribes for the election required under section 

1101. 

(3) METHODS OF UPDATING YIELDS.—If the owner of a farm 

elects to update yields under this subsection, the payment yield 

for a covered commodity on the farm, for the purpose of calculating counter-cyclical payments only, shall be equal to the yield 

determined using either of the following: 

(A) The sum of the following: 

(i) The payment yield applicable for direct payments for the covered commodity on the farm. 

(ii) 70 percent of the difference between— (I) the average yield per planted acre for the 

crop of the covered commodity on the farm for the 

1998 through 2001 crop years, as determined by 

the Secretary, excluding any crop year in which the 

acreage planted to the crop of the covered commodity was zero; and 

(II) the payment yield applicable for direct 

payments for the covered commodity on the farm. 

(B) 93.5 percent of the average of the yield per planted 

acre for the crop of the covered commodity on the farm for 

the 1998 through 2001 crop years, as determined by the 

Secretary, excluding any crop year in which the acreage 

planted to the crop of the covered commodity was zero.

(4) USE OF PARTIAL COUNTY AVERAGE YIELD.—If the yield 

per planted acre for a crop of the covered commodity for a farm 

for any of the 1998 through 2001 crop years was less than 75 

percent of the county yield for that commodity, the Secretary 

shall assign a yield for that crop year equal to 75 percent of the 

county yield for the purpose of determining the average yield 

under paragraph (3).

(5) APPLICATION OF ELECTION AND METHOD TO ALL COVERED COMMODITIES.—The owner of a farm may not elect the 

method described in paragraph (3)(A) for 1 covered commodity 

on the farm and the method described in paragraph (3)(B) for 

other covered commodities on the farm.

SEC. 1103. AVAILABILITY OF DIRECT PAYMENTS. 

(a) PAYMENT REQUIRED.—For each of the 2002 through 2007 

crop years of each covered commodity, the Secretary shall make direct payments to producers on farms for which payment yields and 

base acres are established. 

(b) PAYMENT RATE.—The payment rates used to make direct 

payments with respect to covered commodities for a crop year are as 

follows: 

17

(1) Wheat, $0.52 per bushel. 

(2) Corn, $0.28 per bushel. 

(3) Grain sorghum, $0.35 per bushel. 

(4) Barley, $0.24 per bushel. 

(5) Oats, $0.024 per bushel. 

(6) Upland cotton, $0.0667 per pound. 

(7) Rice, $2.35 per hundredweight. 

(8) Soybeans, $0.44 per bushel. 

(9) Other oilseeds, $0.0080 per pound. 

(c) PAYMENT AMOUNT.—The amount of the direct payment to be 

paid to the producers on a farm for a covered commodity for a crop 

year shall be equal to the product of the following: 

(1) The payment rate specified in subsection (b). 

(2) The payment acres of the covered commodity on the 

farm. 

(3) The payment yield for the covered commodity for the 

farm. 

(d) TIME FOR PAYMENT.—

(1) IN GENERAL.—The Secretary shall make direct payments—

(A) in the case of the 2002 crop year, as soon as practicable after the date of enactment of this Act; and 

(B) in the case of each of the 2003 through 2007 crop 

years, not before October 1 of the calendar year in which 

the crop of the covered commodity is harvested.

(2) ADVANCE PAYMENTS.—At the option of the producers on 

a farm, up to 50 percent of the direct payment for a covered 

commodity for any of the 2003 through 2007 crop years shall 

be paid to the producers in advance. The producers shall select 

the month within which the advance payment for a crop year 

will be made. The month selected may be any month during the 

period beginning on December 1 of the calendar year before the 

calendar year in which the crop of the covered commodity is 

harvested through the month within which the direct payment 

would otherwise be made. The producers may change the selected month for a subsequent advance payment by providing 

advance notice to the Secretary.

(3) REPAYMENT OF ADVANCE PAYMENTS.—If a producer on 

a farm that receives an advance direct payment for a crop year 

ceases to be a producer on that farm, or the extent to which the 

producer shares in the risk of producing a crop changes, before 

the date the remainder of the direct payment is made, the producer shall be responsible for repaying the Secretary the applicable amount of the advance payment, as determined by the 

Secretary. 

SEC. 1104. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS. 

(a) PAYMENT REQUIRED.—For each of the 2002 through 2007 

crop years for each covered commodity, the Secretary shall make 

counter-cyclical payments to producers on farms for which payment 

yields and base acres are established with respect to the covered 

commodity if the Secretary determines that the effective price for the 

covered commodity is less than the target price for the covered commodity. 

18

(b) EFFECTIVE PRICE.—For purposes of subsection (a), the effective price for a covered commodity is equal to the sum of the following: 

(1) The higher of the following: 

(A) The national average market price received by producers during the 12-month marketing year for the covered 

commodity, as determined by the Secretary. 

(B) The national average loan rate for a marketing assistance loan for the covered commodity in effect for the applicable period under subtitle B. 

(2) The payment rate in effect for the covered commodity 

under section 1103 for the purpose of making direct payments 

with respect to the covered commodity. 

(c) TARGET PRICE.— (1) 2002 AND 2003 CROP YEARS.—For purposes of the 2002 

and 2003 crop years, the target prices for covered commodities 

shall be as follows: (A) Wheat, $3.86 per bushel. 

(B) Corn, $2.60 per bushel. 

(C) Grain sorghum, $2.54 per bushel. 

(D) Barley, $2.21 per bushel. 

(E) Oats, $1.40 per bushel. 

(F) Upland cotton, $0.7240 per pound. 

(G) Rice, $10.50 per hundredweight. 

(H) Soybeans, $5.80 per bushel. 

(I) Other oilseeds, $0.0980 per pound. 

(2) SUBSEQUENT CROP YEARS.—For purposes of each of the 

2004 through 2007 crop years, the target prices for covered commodities shall be as follows: (A) Wheat, $3.92 per bushel. 

(B) Corn, $2.63 per bushel. 

(C) Grain sorghum, $2.57 per bushel. 

(D) Barley, $2.24 per bushel. 

(E) Oats, $1.44 per bushel. 

(F) Upland cotton, $0.7240 per pound. 

(G) Rice, $10.50 per hundredweight. 

(H) Soybeans, $5.80 per bushel. 

(I) Other oilseeds, $0.1010 per pound.

(d) PAYMENT RATE.—The payment rate used to make countercyclical payments with respect to a covered commodity for a crop 

year shall be equal to the difference between— (1) the target price for the covered commodity; and 

(2) the effective price determined under subsection (b) for 

the covered commodity.

(e) PAYMENT AMOUNT.—If counter-cyclical payments are required to be paid for any of the 2002 through 2007 crop years of 

a covered commodity, the amount of the counter-cyclical payment to 

be paid to the producers on a farm for that crop year shall be equal 

to the product of the following: 

(1) The payment rate specified in subsection (d). 

(2) The payment acres of the covered commodity on the 

farm. 

(3) The payment yield or updated payment yield for the 

farm, depending on the election of the owner of the farm under 

section 1102. 

19

(f) TIME FOR PAYMENTS.— (1) GENERAL RULE.—If the Secretary determines under subsection (a) that counter-cyclical payments are required to be 

made under this section for the crop of a covered commodity, 

the Secretary shall make the counter-cyclical payments for the 

crop as soon as practicable after the end of the 12-month marketing year for the covered commodity. 

(2) AVAILABILITY OF PARTIAL PAYMENTS.—If, before the end 

of the 12-month marketing year for a covered commodity, the 

Secretary estimates that counter-cyclical payments will be required for the crop of the covered commodity, the Secretary 

shall give producers on a farm the option to receive partial payments of the counter-cyclical payment projected to be made for 

that crop of the covered commodity. 

(3) TIME FOR PARTIAL PAYMENTS.— (A) 2002 THROUGH 2006 CROP YEARS.—When the Secretary makes partial payments available under paragraph 

(2) for a covered commodity for any of the 2002 through 

2006 crop years— (i) the first partial payment for the crop year shall 

be made not earlier than October 1, and, to the maximum extent practicable, not later than October 31, of 

the calendar year in which the crop of the covered commodity is harvested; 

(ii) the second partial payment shall be made not 

earlier than February 1 of the next calendar year; and 

(iii) the final partial payment shall be made as 

soon as practicable after the end of the 12-month marketing year for the covered commodity. 

(B) 2007 CROP YEAR.—When the Secretary makes partial payments available for a covered commodity for the 

2007 crop year— (i) the first partial payment shall be made after 

completion of the first 6 months of the marketing year 

for the covered commodity; and 

(ii) the final partial payment shall be made as 

soon as practicable after the end of the 12-month marketing year for the covered commodity. 

(4) AMOUNT OF PARTIAL PAYMENTS.— (A) 2002 THROUGH 2006 CROP YEARS.—

(i) FIRST PARTIAL PAYMENT.—For each of the 2002 

through 2006 crop years of a covered commodity, the 

first partial payment under paragraph (3) to the producers on a farm may not exceed 35 percent of the projected counter-cyclical payment for the covered commodity for the crop year, as determined by the Secretary. 

(ii) SECOND PARTIAL PAYMENT.—The second partial 

payment for a covered commodity for a crop year may 

not exceed the difference between—

(I) 70 percent of the projected counter-cyclical 

payment (including any revision thereof) for the 

crop of the covered commodity; and 

(II) the amount of the payment made under 

clause (i). 

20

(iii) FINAL PAYMENT.—The final payment for a covered commodity for a crop year shall be equal to the 

difference between— (I) the actual counter-cyclical payment to be 

made to the producers for the covered commodity 

for that crop year; and 

(II) the amount of the partial payments made 

to the producers under clauses (i) and (ii) for that 

crop year. 

(B) 2007 CROP YEAR.— (i) FIRST PARTIAL PAYMENT.—For the 2007 crop 

year, the first partial payment under paragraph (3) to 

the producers on a farm may not exceed 40 percent of 

the projected counter-cyclical payment for the covered 

commodity for the crop year, as determined by the Secretary. 

(ii) FINAL PAYMENT.—The final payment for the 

2007 crop year shall be equal to the difference between— (I) the actual counter-cyclical payment to be 

made to the producers for the covered commodity 

for that crop year; and 

(II) the amount of the partial payment made to 

the producers under clause (i).

(5) REPAYMENT.—The producers on a farm that receive a 

partial payment under this subsection for a crop year shall 

repay to the Secretary the amount, if any, by which the total of 

the partial payments exceed the actual counter-cyclical payment 

to be made for the covered commodity for that crop year.

SEC. 1105. PRODUCER AGREEMENT REQUIRED AS CONDITION OF PROVISION OF DIRECT PAYMENTS AND COUNTER-CYCLICAL 

PAYMENTS. 

(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.— (1) REQUIREMENTS.—Before the producers on a farm may 

receive direct payments or counter-cyclical payments with respect to the farm, the producers shall agree, during the crop 

year for which the payments are made and in exchange for the 

payments—

(A) to comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act 

of 1985 (16 U.S.C. 3811 et seq.); 

(B) to comply with applicable wetland protection requirements under subtitle C of title XII of the Act (16 

U.S.C. 3821 et seq.); 

(C) to comply with the planting flexibility requirements 

of section 1106; 

(D) to use the land on the farm, in a quantity equal to 

the attributable base acres for the farm and any base acres 

for peanuts for the farm under subtitle C for an agricultural or conserving use, and not for a nonagricultural commercial or industrial use, as determined by the Secretary; 

and 

(E) to effectively control noxious weeds and otherwise 

maintain the land in accordance with sound agricultural 

practices, as determined by the Secretary, if the agriculVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00024 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
21

tural or conserving use involves the noncultivation of any 

portion of the land referred to in subparagraph (D).

(2) COMPLIANCE.—The Secretary may issue such rules as 

the Secretary considers necessary to ensure producer compliance 

with the requirements of paragraph (1).

(3) MODIFICATION.—At the request of the transferee or 

owner, the Secretary may modify the requirements of this subsection if the modifications are consistent with the objectives of 

this subsection, as determined by the Secretary.

(b) TRANSFER OR CHANGE OF INTEREST IN FARM.—

(1) TERMINATION.—Except as provided in paragraph (2), a 

transfer of (or change in) the interest of the producers on a farm 

in base acres for which direct payments or counter-cyclical payments are made shall result in the termination of the payments 

with respect to the base acres, unless the transferee or owner of 

the acreage agrees to assume all obligations under subsection 

(a). The termination shall take effect on the date determined by 

the Secretary.

(2) EXCEPTION.—If a producer entitled to a direct payment 

or counter-cyclical payment dies, becomes incompetent, or is 

otherwise unable to receive the payment, the Secretary shall 

make the payment, in accordance with rules issued by the Secretary. 

(c) ACREAGE REPORTS.—As a condition on the receipt of any 

benefits under this subtitle or subtitle B, the Secretary shall require 

producers on a farm to submit to the Secretary annual acreage reports with respect to all cropland on the farm. 

(d) TENANTS AND SHARECROPPERS.—In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the 

interests of tenants and sharecroppers.

(e) SHARING OF PAYMENTS.—The Secretary shall provide for the 

sharing of direct payments and counter-cyclical payments among 

the producers on a farm on a fair and equitable basis. 

SEC. 1106. PLANTING FLEXIBILITY. 

(a) PERMITTED CROPS.—Subject to subsection (b), any commodity or crop may be planted on base acres on a farm. 

(b) LIMITATIONS REGARDING CERTAIN COMMODITIES.—

(1) GENERAL LIMITATION.—The planting of an agricultural 

commodity specified in paragraph (3) shall be prohibited on 

base acres unless the commodity, if planted, is destroyed before 

harvest. 

(2) TREATMENT OF TREES AND OTHER PERENNIALS.—The 

planting of an agricultural commodity specified in paragraph 

(3) that is produced on a tree or other perennial plant shall be 

prohibited on base acres. 

(3) COVERED AGRICULTURAL COMMODITIES.—Paragraphs (1) 

and (2) apply to the following agricultural commodities: 

(A) Fruits. 

(B) Vegetables (other than lentils, mung beans, and dry 

peas). 

(C) Wild rice. 

(c) EXCEPTIONS.—Paragraphs (1) and (2) of subsection (b) shall 

not limit the planting of an agricultural commodity specified in 

paragraph (3) of that subsection—

22

(1) in any region in which there is a history of double-cropping of covered commodities with agricultural commodities 

specified in subsection (b)(3), as determined by the Secretary, in 

which case the double-cropping shall be permitted; 

(2) on a farm that the Secretary determines has a history 

of planting agricultural commodities specified in subsection 

(b)(3) on base acres, except that direct payments and countercyclical payments shall be reduced by an acre for each acre 

planted to such an agricultural commodity; or 

(3) by the producers on a farm that the Secretary determines has an established planting history of a specific agricultural commodity specified in subsection (b)(3), except that—

(A) the quantity planted may not exceed the average 

annual planting history of such agricultural commodity by 

the producers on the farm in the 1991 through 1995 or 

1998 through 2001 crop years (excluding any crop year in 

which no plantings were made), as determined by the Secretary; and 

(B) direct payments and counter-cyclical payments 

shall be reduced by an acre for each acre planted to such 

agricultural commodity.

(d) SPECIAL RULE FOR 2002 CROP YEAR.—For the 2002 crop 

year only, if the calculation of base acres under section 1101(a) results in total base acres for a farm in excess of the contract acreage 

(as defined in section 102 of the Federal Agriculture Improvement 

and Reform Act of 1996 (7 U.S.C. 7202)) for the farm used to calculate the fiscal year 2002 payment authorized under section 114 of 

such Act (7 U.S.C. 7214), paragraphs (1) and (2) of subsection (b) 

shall not limit the harvesting of an agricultural commodity specified in paragraph (3) of that subsection on the excess base acres, except that direct payments and counter-cyclical payments for the 

2002 crop year shall be reduced by an acre for each acre of the excess base acres planted to such an agricultural commodity.

SEC. 1107. RELATION TO REMAINING PAYMENT AUTHORITY UNDER 

PRODUCTION FLEXIBILITY CONTRACTS. 

(a) TERMINATION OF SUPERSEDED PAYMENT AUTHORITY.—Notwithstanding section 113(a)(7) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7213(a)(7)) or any other provision of law, the Secretary shall not make payments for fiscal year 

2002 after the date of enactment of this Act under a production 

flexibility contract entered into under section 111 of that Act (7 

U.S.C. 7211) unless requested by the producer that is a party to the 

contract. 

(b) CONTRACT PAYMENTS MADE BEFORE ENACTMENT.—If a producer receives all or any portion of the payment authorized for fiscal 

year 2002 under a production flexibility contract, the Secretary shall 

reduce the amount of the direct payment otherwise due the producer 

for the 2002 crop year under section 1103 by the amount of the fiscal year 2002 payment received by the producer under the production flexibility contract.

SEC. 1108. PERIOD OF EFFECTIVENESS. 

This subtitle shall be effective beginning with the 2002 crop 

year of each covered commodity through the 2007 crop year.

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Subtitle B—Marketing Assistance Loans 

and Loan Deficiency Payments 

SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE 

LOANS FOR LOAN COMMODITIES. 

(a) NONRECOURSE LOANS AVAILABLE.— (1) AVAILABILITY.—For each of the 2002 through 2007 crops 

of each loan commodity, the Secretary shall make available to 

producers on a farm nonrecourse marketing assistance loans for 

loan commodities produced on the farm. 

(2) TERMS AND CONDITIONS.—The marketing assistance 

loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under 

section 1202 for the loan commodity. 

(b) ELIGIBLE PRODUCTION.—The producers on a farm shall be 

eligible for a marketing assistance loan under subsection (a) for any 

quantity of a loan commodity produced on the farm. 

(c) TREATMENT OF CERTAIN COMMINGLED COMMODITIES.—In 

carrying out this subtitle, the Secretary shall make loans to producers on a farm that would be eligible to obtain a marketing assistance loan, but for the fact the loan commodity owned by the producers on the farm commingled with loan commodities of other producers in facilities unlicensed for the storage of agricultural commodities by the Secretary or a State licensing authority, if the producers obtaining the loan agree to immediately redeem the loan collateral in accordance with section 166 of the Federal Agriculture 

Improvement and Reform Act of 1996 (7 U.S.C. 7286). 

(d) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIREMENTS.—As a condition of the receipt of a marketing assistance loan 

under subsection (a), the producer shall comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland 

protection requirements under subtitle C of title XII of the Act (16 

U.S.C. 3821 et seq.) during the term of the loan. 

(e) TERMINATION OF SUPERSEDED LOAN AUTHORITY.—Notwithstanding section 131 of the Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. 7231), nonrecourse marketing assistance loans shall not be made for the 2002 crop of loan commodities 

under subtitle C of title I of such Act.

SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING ASSISTANCE 

LOANS. 

(a) 2002 AND 2003 CROP YEARS.—For purposes of the 2002 and 

2003 crop years, the loan rate for a marketing assistance loan under 

section 1201 for a loan commodity shall be equal to the following: 

(1) In the case of wheat, $2.80 per bushel. 

(2) In the case of corn, $1.98 per bushel. 

(3) In the case of grain sorghum, $1.98 per bushel. 

(4) In the case of barley, $1.88 per bushel. 

(5) In the case of oats, $1.35 per bushel. 

(6) In the case of upland cotton, $0.52 per pound. 

(7) In the case of extra long staple cotton, $0.7977 per 

pound. 

(8) In the case of rice, $6.50 per hundredweight. 

(9) In the case of soybeans, $5.00 per bushel. 

24

(10) In the case of other oilseeds, $0.0960 per pound. 

(11) In the case of graded wool, $1.00 per pound. 

(12) In the case of nongraded wool, $0.40 per pound. 

(13) In the case of mohair, $4.20 per pound. 

(14) In the case of honey, $0.60 per pound. 

(15) In the case of dry peas, $6.33 per hundredweight. 

(16) In the case of lentils, $11.94 per hundredweight. 

(17) In the case of small chickpeas, $7.56 per hundredweight. 

(b) 2004 THROUGH 2007 CROP YEARS.—For purposes of the 

2004 through 2007 crop years, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal 

to the following: 

(1) In the case of wheat, $2.75 per bushel. 

(2) In the case of corn, $1.95 per bushel. 

(3) In the case of grain sorghum, $1.95 per bushel. 

(4) In the case of barley, $1.85 per bushel. 

(5) In the case of oats, $1.33 per bushel. 

(6) In the case of upland cotton, $0.52 per pound. 

(7) In the case of extra long staple cotton, $0.7977 per 

pound. 

(8) In the case of rice, $6.50 per hundredweight. 

(9) In the case of soybeans, $5.00 per bushel. 

(10) In the case of other oilseeds, $0.0930 per pound. 

(11) In the case of graded wool, $1.00 per pound. 

(12) In the case of nongraded wool, $0.40 per pound. 

(13) In the case of mohair, $4.20 per pound. 

(14) In the case of honey, $0.60 per pound. 

(15) In the case of dry peas, $6.22 per hundredweight.

(16) In the case of lentils, $11.72 per hundredweight. 

(17) In the case of small chickpeas, $7.43 per hundredweight.

SEC. 1203. TERM OF LOANS. 

(a) TERM OF LOAN.—In the case of each loan commodity, a marketing assistance loan under section 1201 shall have a term of 9 

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

in which the loan is made.

(b) EXTENSIONS PROHIBITED.—The Secretary may not extend 

the term of a marketing assistance loan for any loan commodity. 

SEC. 1204. REPAYMENT OF LOANS. 

(a) GENERAL RULE.—The Secretary shall permit the producers 

on a farm to repay a marketing assistance loan under section 1201 

for a loan commodity (other than upland cotton, rice, and extra long 

staple cotton) at a rate that is the lesser of—

(1) the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 

163 of the Federal Agriculture Improvement and Reform Act of 

1996 (7 U.S.C. 7283)); or 

(2) a rate that the Secretary determines will—

(A) minimize potential loan forfeitures; 

(B) minimize the accumulation of stocks of the commodity by the Federal Government; 

(C) minimize the cost incurred by the Federal Government in storing the commodity; 

25

(D) allow the commodity produced in the United States 

to be marketed freely and competitively, both domestically 

and internationally; and

(E) minimize discrepancies in marketing loan benefits 

across State boundaries and across county boundaries.

(b) REPAYMENT RATES FOR UPLAND COTTON AND RICE.—The 

Secretary shall permit producers to repay a marketing assistance 

loan under section 1201 for upland cotton and rice at a rate that 

is the lesser of— (1) the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 

163 of the Federal Agriculture Improvement and Reform Act of 

1996 (7 U.S.C. 7283)); or 

(2) the prevailing world market price for the commodity 

(adjusted to United States quality and location), as determined 

by the Secretary. 

(c) REPAYMENT RATES FOR EXTRA LONG STAPLE COTTON.—Repayment of a marketing assistance loan for extra long staple cotton 

shall be at the loan rate established for the commodity under section 

1202, plus interest (determined in accordance with section 163 of 

the Federal Agriculture Improvement and Reform Act of 1996 (7 

U.S.C. 7283)).

(d) PREVAILING WORLD MARKET PRICE.—For purposes of this 

section and section 1207, the Secretary shall prescribe by regulation— (1) a formula to determine the prevailing world market 

price for upland cotton and rice, adjusted to United States 

quality and location; and 

(2) a mechanism by which the Secretary shall announce periodically the prevailing world market price for upland cotton 

and rice. 

(e) ADJUSTMENT OF PREVAILING WORLD MARKET PRICE FOR UP- LAND COTTON.— (1) IN GENERAL.—During the period beginning on the date 

of the enactment of this Act through July 31, 2008, the prevailing world market price for upland cotton (adjusted to 

United States quality and location) established under subsection (d) shall be further adjusted if—

(A) the adjusted prevailing world market price is less 

than 115 percent of the loan rate for upland cotton established under section 1202, as determined by the Secretary; 

and 

(B) the Friday through Thursday average price 

quotation for the lowest-priced United States growth as 

quoted for Middling (M) 13⁄32-inch cotton delivered C.I.F. 

Northern Europe is greater than the Friday through Thursday average price of the 5 lowest-priced growths of upland 

cotton, as quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe (referred to in this section as 

the ‘‘Northern Europe price’’). 

(2) FURTHER ADJUSTMENT.—Except as provided in paragraph (3), the adjusted prevailing world market price for upland cotton shall be further adjusted on the basis of some or all 

of the following data, as available: 

(A) The United States share of world exports. 

26

(B) The current level of cotton export sales and cotton 

export shipments. 

(C) Other data determined by the Secretary to be relevant in establishing an accurate prevailing world market 

price for upland cotton (adjusted to United States quality 

and location). 

(3) LIMITATION ON FURTHER ADJUSTMENT.—The adjustment under paragraph (2) may not exceed the difference between— (A) the Friday through Thursday average price for the 

lowest-priced United States growth as quoted for Middling 

13⁄32-inch cotton delivered C.I.F. Northern Europe; and 

(B) the Northern Europe price.

(f) GOOD FAITH EXCEPTION TO BENEFICIAL INTEREST REQUIRE- MENT.—For the 2001 crop year only, in the case of the producers on 

a farm that marketed or otherwise lost beneficial interest in a loan 

commodity for which a marketing assistance loan was made under 

section 131 of the Federal Agriculture Improvement and Reform Act 

of 1996 (7 U.S.C. 7231) before repaying the loan, the Secretary shall 

permit the producers to repay the loan at the appropriate repayment 

rate that was in effect for the loan commodity under section 134 of 

that Act (7 U.S.C. 7234) on the date that the producers lost beneficial interest, as determined by the Secretary, if the Secretary determines the producers acted in good faith.

SEC. 1205. LOAN DEFICIENCY PAYMENTS. 

(a) AVAILABILITY OF LOAN DEFICIENCY PAYMENTS.— (1) IN GENERAL.—Except as provided in subsection (d), the 

Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing 

assistance loan under section 1201 with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in 

return for loan deficiency payments under this section. 

(2) UNSHORN PELTS, HAY, AND SILAGE.—Nongraded wool in 

the form of unshorn pelts and hay and silage derived from a 

loan commodity are not eligible for a marketing assistance loan 

under section 1201. However, effective for the 2002 through 

2007 crop years, the Secretary may make loan deficiency payments available under this section to producers on a farm that 

produce unshorn pelts or hay and silage derived from a loan 

commodity. 

(b) COMPUTATION.—A loan deficiency payment for a loan commodity or commodity referred to in subsection (a)(2) shall be computed by multiplying—

(1) the payment rate determined under subsection (c) for the 

commodity; by 

(2) the quantity of the commodity produced by the eligible 

producers, excluding any quantity for which the producers obtain a marketing assistance loan under section 1201. 

(c) PAYMENT RATE.—

(1) IN GENERAL.—In the case of a loan commodity, the payment rate shall be the amount by which—

(A) the loan rate established under section 1202 for the 

loan commodity; exceeds 

(B) the rate at which a marketing assistance loan for 

the loan commodity may be repaid under section 1204. 

27

(2) UNSHORN PELTS.—In the case of unshorn pelts, the payment rate shall be the amount by which— (A) the loan rate established under section 1202 for 

ungraded wool; exceeds 

(B) the rate at which a marketing assistance loan for 

ungraded wool may be repaid under section 1204. 

(3) HAY AND SILAGE.—In the case of hay or silage derived 

from a loan commodity, the payment rate shall be the amount 

by which—

(A) the loan rate established under section 1202 for the 

loan commodity from which the hay or silage is derived; exceeds 

(B) the rate at which a marketing assistance loan for 

the loan commodity may be repaid under section 1204. 

(d) EXCEPTION FOR EXTRA LONG STAPLE COTTON.—This section 

shall not apply with respect to extra long staple cotton. 

(e) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION.—The 

Secretary shall determine the amount of the loan deficiency payment 

to be made under this section to the producers on a farm with respect to a quantity of a loan commodity or commodity referred to 

in subsection (a)(2) using the payment rate in effect under subsection (c) as of the date the producers request the payment. 

(f) SPECIAL LOAN DEFICIENCY PAYMENT RULES.—

(1) FIRST-TIME LOAN COMMODITIES.—For the 2002 crop of 

wool, mohair, honey, dry peas, lentils and small chickpeas, in

the case of producers of such a crop that would be eligible for 

a loan deficiency payment under this section except for the fact 

that the producers lost beneficial interest in the crop prior to the 

date of publication of the regulations implementing this section, 

the producers shall be eligible for a loan deficiency payment as 

of the date producers marketed or otherwise lost beneficial interest in the crop, as determined by the Secretary. 

(2) 2001 CROP YEAR.—Section 135 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7235) 

is amended— (A) in subsection (a)(2), by striking ‘‘2000 crop year’’ and inserting ‘‘2000 and 2001 crop years’’; and 

(B) by adding at the end the following: ‘‘(g) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION.— For the 2001 crop year, the Secretary shall determine the amount 

of the loan deficiency payment to be made under this section to the 

producers on a farm with respect to a quantity of a loan commodity 

using the payment rate in effect under subsection (c) as of the earlier 

of the following: ‘‘(1) The date on which the producers marketed or otherwise 

lost beneficial interest in the crop of the loan commodity, as determined by the Secretary. ‘‘(2) The date the producers requested the payment.’’.

SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR 

GRAZED ACREAGE. 

(a) ELIGIBLE PRODUCERS.—

(1) IN GENERAL.—Effective for the 2002 through 2007 crop 

years, in the case of a producer that would be eligible for a loan 

deficiency payment under section 1205 for wheat, barley, or 

oats, but that elects to use acreage planted to the wheat, barley, 

28

or oats for the grazing of livestock, the Secretary shall make a 

payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other 

harvesting of the wheat, barley, or oats on that acreage. 

(2) GRAZING OF TRITICALE ACREAGE.—Effective for the 2002 

through 2007 crop years, with respect to a producer on a farm 

that uses acreage planted to triticale for the grazing of livestock, 

the Secretary shall make a payment to the producer under this 

section if the producer enters into an agreement with the Secretary to forgo any other harvesting of triticale on that acreage.

(b) PAYMENT AMOUNT.—

(1) IN GENERAL.—The amount of a payment made under 

this section to a producer on a farm described in subsection 

(a)(1) shall be equal to the amount determined by multiplying—

(A) the loan deficiency payment rate determined under 

section 1205(c) in effect, as of the date of the agreement, for 

the county in which the farm is located; by 

(B) the payment quantity determined by multiplying—

(i) the quantity of the grazed acreage on the farm 

with respect to which the producer elects to forgo harvesting of wheat, barley, or oats; and 

(ii) the payment yield in effect for the calculation 

of direct payments under subtitle A with respect to that 

loan commodity on the farm or, in the case of a farm 

without a payment yield for that loan commodity, an 

appropriate yield established by the Secretary in a 

manner consistent with section 1102(c). 

(2) GRAZING OF TRITICALE ACREAGE.—The amount of a payment made under this section to a producer on a farm described 

in subsection (a)(2) shall be equal to the amount determined by 

multiplying—

(A) the loan deficiency payment rate determined under 

section 1205(c) in effect for wheat, as of the date of the 

agreement, for the county in which the farm is located; by 

(B) the payment quantity determined by multiplying—

(i) the quantity of the grazed acreage on the farm 

with respect to which the producer elects to forgo harvesting of triticale; and 

(ii) the payment yield in effect for the calculation 

of direct payments under subtitle A with respect to 

wheat on the farm or, in the case of a farm without a 

payment yield for wheat, an appropriate yield established by the Secretary in a manner consistent with 

section 1102(c).

(c) TIME, MANNER, AND AVAILABILITY OF PAYMENT.—

(1) TIME AND MANNER.—A payment under this section shall 

be made at the same time and in the same manner as loan deficiency payments are made under section 1205. 

(2) AVAILABILITY.—The Secretary shall establish an availability period for the payments authorized by this section. In 

the case of wheat, barley, and oats, the availability period shall 

be consistent with the availability period for the commodity established by the Secretary for marketing assistance loans authorized by this subtitle.

29

(d) PROHIBITION ON CROP INSURANCE INDEMNITY OR NONINSURED CROP ASSISTANCE.—A 2002 through 2007 crop of wheat, 

barley, oats, or triticale planted on acreage that a producer elects, 

in the agreement required by subsection (a), to use for the grazing 

of livestock in lieu of any other harvesting of the crop shall not be 

eligible for an indemnity under the Federal Crop Insurance Act (7 

U.S.C. 1501 et seq.) or noninsured crop assistance under section 196 

of the Federal Agriculture Improvement and Reform Act of 1996 (7 

U.S.C. 7333). 

SEC. 1207. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON. 

(a) COTTON USER MARKETING CERTIFICATES.—

(1) ISSUANCE.—During the period beginning on the date of 

the enactment of this Act through July 31, 2008, the Secretary 

shall issue marketing certificates or cash payments, at the option of the recipient, to domestic users and exporters for documented purchases by domestic users and sales for export by exporters made in the week following a consecutive 4-week period 

in which—

(A) the Friday through Thursday average price 

quotation for the lowest-priced United States growth, as 

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

Northern Europe exceeds the Northern Europe price by 

more than 1.25 cents per pound; and 

(B) the prevailing world market price for upland cotton 

(adjusted to United States quality and location) does not 

exceed 134 percent of the loan rate for upland cotton established under section 1202. 

(2) VALUE OF CERTIFICATES OR PAYMENTS.—The value of 

the marketing certificates or cash payments shall be based on 

the amount of the difference (reduced by 1.25 cents per pound) 

in the prices during the fourth week of the consecutive 4-week 

period multiplied by the quantity of upland cotton included in 

the documented sales. 

(3) ADMINISTRATION OF MARKETING CERTIFICATES.—

(A) REDEMPTION, MARKETING, OR EXCHANGE.—The Secretary shall establish procedures for redeeming marketing 

certificates for cash or marketing or exchange of the certificates for agricultural commodities owned by the Commodity Credit Corporation or pledged to the Commodity 

Credit Corporation as collateral for a loan in such manner, 

and at such price levels, as the Secretary determines will 

best effectuate the purposes of cotton user marketing certificates, including enhancing the competitiveness and marketability of United States cotton. Any price restrictions that 

would otherwise apply to the disposition of agricultural 

commodities by the Commodity Credit Corporation shall 

not apply to the redemption of certificates under this subsection. 

(B) DESIGNATION OF COMMODITIES AND PRODUCTS.—To 

the extent practicable, the Secretary shall permit owners of 

certificates to designate the commodities and products, including storage sites, the owners would prefer to receive in 

exchange for certificates 

30

(C) TRANSFERS.—Marketing certificates issued to domestic users and exporters of upland cotton may be transferred to other persons in accordance with regulations 

issued by the Secretary. 

(4) DELAYED APPLICATION OF THRESHOLD.—Through July 

31, 2006, the Secretary shall make the calculations under paragraphs (1)(A) and (2) without regard to the 1.25 cent threshold 

provided under those paragraphs.

(b) SPECIAL IMPORT QUOTA.—

(1) ESTABLISHMENT.—

(A) IN GENERAL.—The President shall carry out an import quota program during the period beginning on the 

date of the enactment of this Act through July 31, 2008, as 

provided in this subsection. 

(B) PROGRAM REQUIREMENTS.—Except as provided in 

subparagraph (C), whenever the Secretary determines and 

announces that for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling 

(M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe, adjusted for the value of any certificate issued under subsection (a), exceeds the Northern Europe price by more than 

1.25 cents per pound, there shall immediately be in effect 

a special import quota.

(C) TIGHT DOMESTIC SUPPLY.—During any month for 

which the Secretary estimates the season-ending United 

States upland cotton stocks-to-use ratio, as determined 

under subparagraph (D), to be below 16 percent, the Secretary, in making the determination under subparagraph 

(B), shall not adjust the Friday through Thursday average 

price quotation for the lowest-priced United States growth, 

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

C.I.F. Northern Europe, for the value of any certificates 

issued under subsection (a). 

(D) SEASON-ENDING UNITED STATES STOCKS-TO-USE

RATIO.—For the purposes of making estimates under subparagraph (C), the Secretary shall, on a monthly basis, estimate and report the season-ending United States upland 

cotton stocks-to-use ratio, excluding projected raw cotton 

imports but including the quantity of raw cotton that has 

been imported into the United States during the marketing 

year. 

(E) DELAYED APPLICATION OF THRESHOLD.—Through 

July 31, 2006, the Secretary shall make the calculation 

under subparagraph (B) without regard to the 1.25 cent 

threshold provided under that subparagraph.

(2) QUANTITY.—The quota shall be equal to one week’s consumption of upland cotton by domestic mills at the seasonally 

adjusted average rate of the most recent three months for which 

data are available. 

(3) APPLICATION.—The quota shall apply to upland cotton 

purchased not later than 90 days after the date of the Secretary’s announcement under paragraph (1) and entered into 

the United States not later than 180 days after the date. 

31

(4) OVERLAP.—A special quota period may be established 

that overlaps any existing quota period if required by paragraph (1), except that a special quota period may not be established under this subsection if a quota period has been established under subsection (c). 

(5) PREFERENTIAL TARIFF TREATMENT.—The quantity under 

a special import quota shall be considered to be an in-quota 

quantity for purposes of—

(A) section 213(d) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(d)); 

(B) section 204 of the Andean Trade Preference Act (19 

U.S.C. 3203); 

(C) section 503(d) of the Trade Act of 1974 (19 U.S.C. 

2463(d)); and 

(D) General Note 3(a)(iv) to the Harmonized Tariff 

Schedule. 

(6) DEFINITION.—In this subsection, the term ‘‘special import quota’’ means a quantity of imports that is not subject to 

the over-quota tariff rate of a tariff-rate quota. 

(7) LIMITATION.—The quantity of cotton entered into the 

United States during any marketing year under the special import quota established under this subsection may not exceed the 

equivalent of 5 week’s consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the 3 months 

immediately preceding the first special import quota established 

in any marketing year. 

(c) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND COTTON.—

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

quota program that provides that whenever the Secretary determines and announces that the average price of the base quality 

of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the 

average price of such quality of cotton in the markets for the 

preceding 36 months, notwithstanding any other provision of 

law, there shall immediately be in effect a limited global import 

quota subject to the following conditions: 

(A) QUANTITY.—The quantity of the quota shall be 

equal to 21 days of domestic mill consumption of upland 

cotton at the seasonally adjusted average rate of the most 

recent 3 months for which data are available. 

(B) QUANTITY IF PRIOR QUOTA.—If a quota has been established under this subsection during the preceding 12 

months, the quantity of the quota next established under 

this subsection shall be the smaller of 21 days of domestic 

mill consumption calculated under subparagraph (A) or the 

quantity required to increase the supply to 130 percent of 

the demand. 

(C) PREFERENTIAL TARIFF TREATMENT.—The quantity 

under a limited global import quota shall be considered to 

be an in-quota quantity for purposes of—

(i) section 213(d) of the Caribbean Basin Economic 

Recovery Act (19 U.S.C. 2703(d)); 

(ii) section 204 of the Andean Trade Preference Act 

(19 U.S.C. 3203); 

32

(iii) section 503(d) of the Trade Act of 1974 (19 

U.S.C. 2463(d)); and 

(iv) General Note 3(a)(iv) to the Harmonized Tariff 

Schedule. 

(D) DEFINITIONS.—In this subsection: 

(i) SUPPLY.—The term ‘‘supply’’ means, using the 

latest official data of the Bureau of the Census, the Department of Agriculture, and the Department of the 

Treasury—

(I) the carry-over of upland cotton at the beginning of the marketing year (adjusted to 480-

pound bales) in which the quota is established; 

(II) production of the current crop; and 

(III) imports to the latest date available during the marketing year. 

(ii) DEMAND.—The term ‘‘demand’’ means— (I) the average seasonally adjusted annual 

rate of domestic mill consumption during the most 

recent 3 months for which data are available; and 

(II) the larger of— (aa) average exports of upland cotton during the preceding 6 marketing years; or 

(bb) cumulative exports of upland cotton 

plus outstanding export sales for the marketing year in which the quota is established. 

(iii) LIMITED GLOBAL IMPORT QUOTA.—The term 

‘‘limited global import quota’’ means a quantity of imports that is not subject to the over-quota tariff rate of 

a tariff-rate quota. 

(E) QUOTA ENTRY PERIOD.—When a quota is established under this subsection, cotton may be entered under 

the quota during the 90-day period beginning on the date 

the quota is established by the Secretary. 

(2) NO OVERLAP.—Notwithstanding paragraph (1), a quota 

period may not be established that overlaps an existing quota 

period or a special quota period established under subsection 

(b). 

SEC. 1208. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA LONG STAPLE COTTON. 

(a) COMPETITIVENESS PROGRAM.—Notwithstanding any other 

provision of law, during the period beginning on the date of the enactment of this Act through July 31, 2008, the Secretary shall carry 

out a program—

(1) to maintain and expand the domestic use of extra long 

staple cotton produced in the United States; 

(2) to increase exports of extra long staple cotton produced 

in the United States; and 

(3) to ensure that extra long staple cotton produced in the 

United States remains competitive in world markets. 

(b) PAYMENTS UNDER PROGRAM; TRIGGER.—Under the program, the Secretary shall make payments available under this section whenever—

(1) for a consecutive 4-week period, the world market price 

for the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for 

33

other factors affecting the competitiveness of such cotton), as determined by the Secretary, is below the prevailing United States 

price for a competing growth of extra long staple cotton; and 

(2) the lowest priced competing growth of extra long staple 

cotton (adjusted to United States quality and location and for 

other factors affecting the competitiveness of such cotton), as determined by the Secretary, is less than 134 percent of the loan 

rate for extra long staple cotton. 

(c) ELIGIBLE RECIPIENTS.—The Secretary shall make payments 

available under this section to domestic users of extra long staple 

cotton produced in the United States and exporters of extra long staple cotton produced in the United States that enter into an agreement with the Commodity Credit Corporation to participate in the 

program under this section. 

(d) PAYMENT AMOUNT.—Payments under this section shall be 

based on the amount of the difference in the prices referred to in 

subsection (b)(1) during the fourth week of the consecutive 4-week 

period multiplied by the amount of documented purchases by domestic users and sales for export by exporters made in the week following such a consecutive 4-week period.

(e) FORM OF PAYMENT.—Payments under this section shall be 

made through the issuance of cash or marketing certificates, at the 

option of eligible recipients of the payments. 

SEC. 1209. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE 

FEED GRAINS AND SEED COTTON. 

(a) HIGH MOISTURE FEED GRAINS.—

(1) RECOURSE LOANS AVAILABLE.—For each of the 2002 

through 2007 crops of corn and grain sorghum, the Secretary 

shall make available recourse loans, as determined by the Secretary, to producers on a farm that—

(A) normally harvest all or a portion of their crop of 

corn or grain sorghum in a high moisture state; 

(B) present—

(i) certified scale tickets from an inspected, certified commercial scale, including a licensed warehouse, feedlot, feed mill, distillery, or other similar entity approved by the Secretary, pursuant to regulations 

issued by the Secretary; or 

(ii) field or other physical measurements of the 

standing or stored crop in regions of the United States, 

as determined by the Secretary, that do not have certified commercial scales from which certified scale tickets may be obtained within reasonable proximity of 

harvest operation; 

(C) certify that they were the owners of the feed grain 

at the time of delivery to, and that the quantity to be placed 

under loan under this subsection was in fact harvested on 

the farm and delivered to, a feedlot, feed mill, or commercial or on-farm high-moisture storage facility, or to a facility maintained by the users of corn and grain sorghum in 

a high moisture state; and 

(D) comply with deadlines established by the Secretary 

for harvesting the corn or grain sorghum and submit applications for loans under this subsection within deadlines established by the Secretary. 

34

(2) ELIGIBILITY OF ACQUIRED FEED GRAINS.—A loan under 

this subsection shall be made on a quantity of corn or grain 

sorghum of the same crop acquired by the producer equivalent 

to a quantity determined by multiplying—

(A) the acreage of the corn or grain sorghum in a high 

moisture state harvested on the producer’s farm; by 

(B) the lower of the farm program payment yield used 

to make counter-cyclical payments under subtitle A or the 

actual yield on a field, as determined by the Secretary, that 

is similar to the field from which the corn or grain sorghum was obtained. 

(3) HIGH MOISTURE STATE DEFINED.—In this subsection, the 

term ‘‘high moisture state’’ means corn or grain sorghum having a moisture content in excess of Commodity Credit Corporation standards for marketing assistance loans made by the Secretary under section 1201. 

(b) RECOURSE LOANS AVAILABLE FOR SEED COTTON.—For each 

of the 2002 through 2007 crops of upland cotton and extra long staple cotton, the Secretary shall make available recourse seed cotton 

loans, as determined by the Secretary, on any production. 

(c) REPAYMENT RATES.—Repayment of a recourse loan made 

under this section shall be at the loan rate established for the commodity by the Secretary, plus interest (determined in accordance 

with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)). 

(d) TERMINATION OF SUPERSEDED LOAN AUTHORITY.—Notwithstanding section 137 of the Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. 7237), recourse loans shall not be 

made for the 2002 crop of corn, grain sorghum, and seed cotton 

under such section.

Subtitle C—Peanuts 

SEC. 1301. DEFINITIONS. 

In this subtitle: 

(1) BASE ACRES FOR PEANUTS.—The term ‘‘base acres for 

peanuts’’ means the number of acres assigned to a farm by historic peanut producers pursuant to section 1302(b). 

(2) COUNTER-CYCLICAL PAYMENT.—The term ‘‘counter-cyclical payment’’ means a payment made under section 1304. 

(3) EFFECTIVE PRICE.—The term ‘‘effective price’’ means the 

price calculated by the Secretary under section 1304 for peanuts 

to determine whether counter-cyclical payments are required to 

be made under that section for a crop year. 

(4) DIRECT PAYMENT.—The term ‘‘direct payment’’ means a 

payment made under section 1303. 

(5) HISTORIC PEANUT PRODUCER.—The term ‘‘historic peanut producer’’ means a producer on a farm in the United States 

that produced or was prevented from planting peanuts during 

any or all of the 1998 through 2001 crop years. 

(6) PAYMENT ACRES.—The term ‘‘payment acres’’ means— (A) for the 2002 crop of peanuts, 85 percent of the average acreage determined under section 1302(a)(2) for an historic peanut producer; and 

35

(B) for the 2003 through 2007 crops of peanuts, 85 percent of the base acres for peanuts assigned to a farm under 

section 1302(b). 

(7) PAYMENT YIELD.—The term ‘‘payment yield’’ means the 

yield assigned to a farm by historic peanut producers pursuant 

to section 1302(b). 

(8) PRODUCER.—The term ‘‘producer’’ means an owner, operator, landlord, tenant, or sharecropper that shares in the risk 

of producing a crop on a farm and is entitled to share in the 

crop available for marketing from the farm, or would have 

shared had the crop been produced. In determining whether a 

grower of hybrid seed is a producer, the Secretary shall not take 

into consideration the existence of a hybrid seed contract and 

shall ensure that program requirements do not adversely affect 

the ability of the grower to receive a payment under this subtitle.

(9) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

(10) STATE.—The term ‘‘State’’ means each of the several 

States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession 

of the United States. 

(11) TARGET PRICE.—The term ‘‘target price’’ means the 

price per ton of peanuts used to determine the payment rate for 

counter-cyclical payments. 

(12) UNITED STATES.—The term ‘‘United States’’, when used 

in a geographical sense, means all of the States. 

SEC. 1302. ESTABLISHMENT OF PAYMENT YIELD AND BASE ACRES FOR 

PEANUTS FOR A FARM. 

(a) AVERAGE YIELD AND ACREAGE AVERAGE FOR HISTORIC PEA- NUT PRODUCERS.— (1) DETERMINATION OF AVERAGE YIELD.— (A) IN GENERAL.—The Secretary shall determine, for 

each historic peanut producer, the average yield for peanuts 

on each farm on which the historic peanut producer planted peanuts for harvest for the 1998 through 2001 crop 

years, excluding any crop year in which the producer did 

not plant or was prevented from planting peanuts. 

(B) ASSIGNED YIELDS.—For the purposes of determining the 4-year average yield for an historic peanut producer under this paragraph, the historic peanut producer 

may elect to substitute for a farm, for not more than 3 of 

the 1998 through 2001 crop years in which the producer 

planted peanuts on the farm, the average yield for peanuts 

produced in the county in which the farm is located for the 

1990 through 1997 crop years. 

(2) DETERMINATION OF ACREAGE AVERAGE.—

(A) IN GENERAL.—The Secretary shall determine, for 

each historic peanut producer, the 4-year average of the following:

(i) Acreage planted to peanuts on each farm on 

which the historic peanut producer planted peanuts for 

harvest for the 1998 through 2001 crop years.

(ii) Any acreage on each farm that the historic peanut producer was prevented from planting to peanuts 

36

during the 1998 through 2001 crop years because of 

drought, flood, or other natural disaster, or other condition beyond the control of the historic peanut producer, as determined by the Secretary.

(B) INCLUSION OF ALL 4 YEARS IN AVERAGE.—For the 

purposes of determining the 4-year acreage average for an 

historic peanut producer under this paragraph, the Secretary shall not exclude any crop year in which the producer did not plant peanuts.

(C) PROPORTIONAL SHARES.—If more than 1 historic 

peanut producer shared in the risk of producing the crop 

on a farm, the historic peanut producers shall receive their 

proportional share of the number of acres planted (or prevented from being planted) to peanuts for harvest on the 

farm based on the sharing arrangement that was in effect 

among the producers for the crop. 

(3) TIME FOR DETERMINATIONS.—The Secretary shall make 

the determinations required by this subsection as soon as practicable after the date of enactment of this Act. 

(4) SPECIAL CONSIDERATIONS.—In making the determinations required by this subsection, the Secretary shall take into 

account changes in the number, identity, or interest of producers sharing in the risk of producing a peanut crop since the 

1998 crop year, including providing a method for the assignment of average acres and average yield to a farm— (A) when an historic peanut producer is no longer living; 

(B) when an entity composed of historic peanut producers has been dissolved; or 

(C) in other appropriate situations, as determined by 

the Secretary. 

(b) ASSIGNMENT OF AVERAGE YIELDS AND AVERAGE ACREAGE

TO FARMS.—

(1) ASSIGNMENT BY HISTORIC PEANUT PRODUCERS.—The 

Secretary shall give each historic peanut producer an opportunity to assign the average peanut yield and average acreage 

determined under subsection (a) for each farm of the historic 

peanut producer to cropland on that farm or another farm in 

the same State or a contiguous State.

(2) LIMITATION ON ACREAGE ASSIGNMENT.—Notwithstanding paragraph (1), the average acreage determined under 

subsection (a)(2) for a farm may not be assigned to a farm in 

a contiguous State unless—

(A) the historic peanut producer making the assignment produced peanuts in that State during at least 1 of 

the 1998 through 2001 crop years; or 

(B) as of March 31, 2003, the historic peanut producer 

is a producer on a farm in that State.

(3) NOTICE OF ASSIGNMENT OPPORTUNITY.—The Secretary 

shall provide notice to historic peanut producers regarding their 

opportunity to assign average peanut yields and average acreages to farms under paragraph (1). The notice shall include the 

following: 

(A) Notice that the opportunity to make the assignments is being provided only once. 

37

(B) A description of the limitation in paragraph (2) on 

their ability to make the assignments. 

(C) Information regarding the manner in which the assignments must be made and the time periods and manner 

in which notice of the assignments must be submitted to the 

Secretary.

(4) ASSIGNMENT DEADLINES.—Not later than March 31, 

2003, an historic peanut producer shall submit to the Secretary 

notice of the assignments made by the producer under this subsection. If an historic peanut producer fails to submit the notice 

by that date, the notice shall be submitted in such other manner 

as the Secretary may prescribe.

(c) PAYMENT YIELD.—The average of all of the yields assigned 

by historic peanut producers under subsection (b) to a farm shall be 

considered to be the payment yield for that farm for the purpose of 

making direct payments and counter-cyclical payments under this 

subtitle. 

(d) BASE ACRES FOR PEANUTS.—Subject to subsection (e), the 

total number of acres assigned by historic peanut producers under 

subsection (b) to a farm shall be considered to be the farm’s base 

acres for peanuts for the purpose of making direct payments and 

counter-cyclical payments under this subtitle.

(e) TREATMENT OF CONSERVATION RESERVE CONTRACT ACRE- AGE.— (1) IN GENERAL.—The Secretary shall provide for an adjustment, as appropriate, in the base acres for peanuts for a farm 

whenever either of the following circumstances occur: 

(A) A conservation reserve contract entered into under 

section 1231 of the Food Security Act of 1985 (16 U.S.C. 

3831) with respect to the farm expires or is voluntarily terminated. 

(B) Cropland is released from coverage under a conservation reserve contract by the Secretary. 

(2) SPECIAL PAYMENT RULES.—For the crop year in which 

a base acres for peanuts adjustment under paragraph (1) is 

first made, the owner of the farm shall elect to receive either direct payments and counter-cyclical payments with respect to the 

acreage added to the farm under this subsection or a prorated 

payment under the conservation reserve contract, but not both.

(f) PREVENTION OF EXCESS BASE ACRES FOR PEANUTS.—

(1) REQUIRED REDUCTION.—If the sum of the base acres for 

peanuts for a farm, together with the acreage described in paragraph (2), exceeds the actual cropland acreage of the farm, the 

Secretary shall reduce the base acres for peanuts for the farm 

or the base acres for 1 or more covered commodities under subtitle A for the farm so that the sum of the base acres for peanuts 

and acreage described in paragraph (2) does not exceed the actual cropland acreage of the farm. 

(2) OTHER ACREAGE.—For purposes of paragraph (1), the 

Secretary shall include the following: 

(A) Any base acres for the farm under subtitle A. 

(B) Any acreage on the farm enrolled in the conservation reserve program or wetlands reserve program under 

chapter 1 of subtitle D of title XII of the Food Security Act 

of 1985 (16 U.S.C. 3830 et seq.). 

38

(C) Any other acreage on the farm enrolled in a conservation program for which payments are made in exchange for not producing an agricultural commodity on the 

acreage. 

(3) SELECTION OF ACRES.—The Secretary shall give the 

owner of the farm the opportunity to select the base acres for 

peanuts or the subtitle A base acres against which the reduction 

required by paragraph (1) will be made. 

(4) EXCEPTION FOR DOUBLE-CROPPED ACREAGE.—In applying paragraph (1), the Secretary shall make an exception in the 

case of double cropping, as determined by the Secretary.

(5) COORDINATED APPLICATION OF REQUIREMENTS.—The 

Secretary shall take into account section 1101(g) when applying 

the requirements of this subsection.

(g) PERMANENT REDUCTION IN BASE ACRES FOR PEANUTS.—The 

owner of a farm may reduce, at any time, the base acres for peanuts 

assigned to the farm. The reduction shall be permanent and made 

in the manner prescribed by the Secretary.

SEC. 1303. AVAILABILITY OF DIRECT PAYMENTS FOR PEANUTS.

(a) PAYMENT REQUIRED.— (1) 2002 CROP YEAR.—For the 2002 crop year, the Secretary 

shall make direct payments under this section to historic peanut producers. 

(2) SUBSEQUENT CROP YEARS.—For each of the 2003 

through 2007 crop years for peanuts, the Secretary shall make 

direct payments to the producers on a farm to which a payment 

yield and base acres for peanuts are assigned under section 

1302.

(b) PAYMENT RATE.—The payment rate used to make direct pay- ments with respect to peanuts for a crop year shall be equal to $36 

per ton. 

(c) PAYMENT AMOUNT FOR 2002 CROP YEAR.—The amount of 

the direct payment to be paid to an historic peanut producer for the 

2002 crop of peanuts shall be equal to the product of the following: 

(1) The payment rate specified in subsection (b). 

(2) The payment acres of the historic peanut producer. 

(3) The average peanut yield determined under section 

1302(a)(1) for the historic peanut producer. 

(d) PAYMENT AMOUNT FOR SUBSEQUENT CROP YEARS.—The 

amount of the direct payment to be paid to the producers on a farm 

for the 2003 through 2007 crops of peanuts shall be equal to the 

product of the following: 

(1) The payment rate specified in subsection (b). 

(2) The payment acres on the farm. 

(3) The payment yield for the farm. 

(e) TIME FOR PAYMENT.—

(1) IN GENERAL.—The Secretary shall make direct payments—

(A) in the case of the 2002 crop year, as soon as practicable after the date of enactment of this Act; and 

(B) in the case of each of the 2003 through 2007 crop 

years, not later than September 30 of the calendar year in 

which the crop is harvested.

(2) ADVANCE PAYMENTS.—At the option of the producers on 

a farm, up to 50 percent of the direct payment for any of the 

39

2003 through 2007 crop years shall be paid to the producers in 

advance. The producers shall select the month within which the 

advance payment for a crop year will be made. The month selected may be any month during the period beginning on December 1 of the calendar year before the calendar year in which 

the crop is harvested through the month within which the direct 

payment would otherwise be made. The producers may change 

the selected month for a subsequent advance payment by providing advance notice to the Secretary.

(3) REPAYMENT OF ADVANCE PAYMENTS.—If a producer on 

a farm that receives an advance direct payment for a crop year 

ceases to be a producer on that farm, or the extent to which the 

producer shares in the risk of producing a crop changes, before 

the date the remainder of the direct payment is made, the producer shall be responsible for repaying the Secretary the applicable amount of the advance payment, as determined by the 

Secretary. 

SEC. 1304. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS FOR PEANUTS. 

(a) PAYMENT REQUIRED.—

(1) IN GENERAL.—During the 2002 through 2007 crop years 

for peanuts, the Secretary shall make counter-cyclical payments 

under this section with respect to peanuts if the Secretary determines that the effective price for peanuts is less than the target 

price for peanuts.

(2) 2002 CROP YEAR.—If counter-cyclical payments are required for the 2002 crop year, the Secretary shall make the payments to historic peanut producers. 

(3) SUBSEQUENT CROP YEARS.—If counter-cyclical payments 

are required for any of the 2003 through 2007 crop years for 

peanuts, the Secretary shall make the payments to the producers on a farm to which a payment yield and base acres for 

peanuts are assigned under section 1302.

(b) EFFECTIVE PRICE.—For purposes of subsection (a), the effective price for peanuts is equal to the sum of the following: 

(1) The higher of the following: 

(A) The national average market price for peanuts received by producers during the 12-month marketing year 

for peanuts, as determined by the Secretary. 

(B) The national average loan rate for a marketing assistance loan for peanuts in effect for the applicable period 

under this subtitle. 

(2) The payment rate in effect under section 1303 for the 

purpose of making direct payments. 

(c) TARGET PRICE.—For purposes of subsection (a), the target 

price for peanuts shall be equal to $495 per ton. 

(d) PAYMENT RATE.—The payment rate used to make countercyclical payments for a crop year shall be equal to the difference between—

(1) the target price; and 

(2) the effective price determined under subsection (b). 

(e) PAYMENT AMOUNT FOR 2002 CROP YEAR.—If counter-cyclical 

payments are required to be paid for the 2002 crop of peanuts, the 

amount of the counter-cyclical payment to be paid to an historic 

40

peanut producer for that crop year shall be equal to the product of 

the following: 

(1) The payment rate specified in subsection (d). 

(2) The payment acres of the historic peanut producer. 

(3) The average peanut yield determined under section 

1302(a)(1) for the historic peanut producer. 

(f) PAYMENT AMOUNT FOR SUBSEQUENT CROP YEARS.—If 

counter-cyclical payments are required to be paid for any of the 

2003 through 2007 crops of peanuts, the amount of the counter-cyclical payment to be paid to the producers on a farm for that crop 

year shall be equal to the product of the following: 

(1) The payment rate specified in subsection (d). 

(2) The payment acres on the farm. 

(3) The payment yield for the farm. 

(g) TIME FOR PAYMENTS.— (1) GENERAL RULE.—If the Secretary determines under subsection (a) that counter-cyclical payments are required to be 

made under this section for a crop year, the Secretary shall 

make the counter-cyclical payments as soon as practicable after 

the end of the 12-month marketing year for the crop. 

(2) AVAILABILITY OF PARTIAL PAYMENTS.—If, before the end 

of the 12-month marketing year, the Secretary estimates that 

counter-cyclical payments will be required under this section for 

a crop year, the Secretary shall give producers on a farm (or, 

in the case of the 2002 crop year, historic peanut producers) the 

option to receive partial payments of the counter-cyclical payment projected to be made for that crop. 

(3) TIME FOR PARTIAL PAYMENTS.— (A) 2002 THROUGH 2006 CROP YEARS.—When the Secretary makes partial payments available under paragraph 

(2) for any of the 2002 through 2006 crop years— (i) the first partial payment for the crop year shall 

be made not earlier than October 1, and, to the maximum extent practicable, not later than October 31, of 

the calendar year in which the crop is harvested; 

(ii) the second partial payment shall be made not 

earlier than February 1 of the next calendar year; and 

(iii) the final partial payment shall be made as 

soon as practicable after the end of the 12-month marketing year for that crop. 

(B) 2007 CROP YEAR.—When the Secretary makes partial payments available for the 2007 crop year—

(i) the first partial payment shall be made after 

completion of the first 6 months of the marketing year 

for that crop; and 

(ii) the final partial payment shall be made as 

soon as practicable after the end of the 12-month marketing year for that crop. 

(4) AMOUNT OF PARTIAL PAYMENTS.— (A) 2002 CROP YEAR.— (i) FIRST PARTIAL PAYMENT.—In the case of the 

2002 crop year, the first partial payment under paragraph (3) to an historic peanut producer may not exceed 35 percent of the projected counter-cyclical payment for the crop year, as determined by the Secretary. 

41

(ii) SECOND PARTIAL PAYMENT.—The second partial 

payment may not exceed the difference between— (I) 70 percent of the projected counter-cyclical 

payment (including any revision thereof) for the 

2002 crop year; and 

(II) the amount of the payment made under 

clause (i).

(iii) FINAL PAYMENT.—The final payment shall be 

equal to the difference between— (I) the actual counter-cyclical payment to be 

made to the historic peanut producer; and 

(II) the amount of the partial payments made 

to the historic peanut producer under clauses (i) 

and (ii). 

(B) 2003 THROUGH 2006 CROP YEARS.— (i) FIRST PARTIAL PAYMENT.—For each of the 2003 

through 2006 crop years, the first partial payment 

under paragraph (3) to the producers on a farm may 

not exceed 35 percent of the projected counter-cyclical 

payment for the crop year, as determined by the Secretary. 

(ii) SECOND PARTIAL PAYMENT.—The second partial 

payment for a crop year may not exceed the difference 

between—

(I) 70 percent of the projected counter-cyclical 

payment (including any revision thereof) for the 

crop year; and 

(II) the amount of the payment made under 

clause (i). 

(iii) FINAL PAYMENT.—The final payment for a 

crop year shall be equal to the difference between— (I) the actual counter-cyclical payment to be 

made to the producers for that crop year; and 

(II) the amount of the partial payments made 

to the producers under clauses (i) and (ii) for that 

crop year. 

(C) 2007 CROP YEAR.— (i) FIRST PARTIAL PAYMENT.—For the 2007 crop 

year, the first partial payment under paragraph (3) to 

the producers on a farm may not exceed 40 percent of 

the projected counter-cyclical payment for the crop 

year, as determined by the Secretary. 

(ii) FINAL PAYMENT.—The final payment for the 

2007 crop year shall be equal to the difference between—

(I) the actual counter-cyclical payment to be 

made to the producers for that crop year; and 

(II) the amount of the partial payment made to 

the producers under clause (i).

(5) REPAYMENT.—The producers on a farm (or, in the case 

of the 2002 crop year, historic peanut producers) that receive a 

partial payment under this subsection for a crop year shall 

repay to the Secretary the amount, if any, by which the total of 

the partial payments exceed the actual counter-cyclical payment 

to be made for that crop year. 

42

SEC. 1305. PRODUCER AGREEMENT REQUIRED AS CONDITION ON PROVISION OF DIRECT PAYMENTS AND COUNTER-CYCLICAL 

PAYMENTS.

(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.—

(1) REQUIREMENTS.—Before the producers on a farm may 

receive direct payments or counter-cyclical payments under this 

subtitle with respect to the farm, the producers shall agree, during the crop year for which the payments are made and in exchange for the payments—

(A) to comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act 

of 1985 (16 U.S.C. 3811 et seq.); 

(B) to comply with applicable wetland protection requirements under subtitle C of title XII of that Act (16 

U.S.C. 3821 et seq.); 

(C) to comply with the planting flexibility requirements 

of section 1306; 

(D) to use the land on the farm, in a quantity equal to 

the attributable base acres for peanuts and any base acres 

for the farm under subtitle A, for an agricultural or conserving use, and not for a nonagricultural commercial or 

industrial use, as determined by the Secretary; and 

(E) to effectively control noxious weeds and otherwise 

maintain the land in accordance with sound agricultural 

practices, as determined by the Secretary, if the agricultural or conserving use involves the noncultivation of any 

portion of the land referred to in subparagraph (D).

(2) COMPLIANCE.—The Secretary may issue such rules as 

the Secretary considers necessary to ensure producer compliance 

with the requirements of paragraph (1). 

(3) MODIFICATION.—At the request of the transferee or 

owner, the Secretary may modify the requirements of this subsection if the modifications are consistent with the objectives of 

this subsection, as determined by the Secretary. 

(b) TRANSFER OR CHANGE OF INTEREST IN FARM.—

(1) TERMINATION.—Except as provided in paragraph (2), a 

transfer of (or change in) the interest of the producers on a farm 

in the base acres for peanuts for which direct payments or 

counter-cyclical payments are made shall result in the termination of the payments with respect to those acres, unless the 

transferee or owner of the acreage agrees to assume all obligations under subsection (a). The termination shall take effect on 

the date determined by the Secretary. 

(2) EXCEPTION.—If a producer entitled to a direct payment 

or counter-cyclical payment dies, becomes incompetent, or is 

otherwise unable to receive the payment, the Secretary shall 

make the payment, in accordance with rules issued by the Secretary. 

(c) ACREAGE REPORTS.—As a condition on the receipt of direct 

payments, counter-cyclical payments, marketing assistance loans, or 

loan deficiency payments under this subtitle, the Secretary shall require the producers on a farm to which a payment yield and base 

acres for peanuts are assigned under section 1302 to submit to the 

Secretary annual acreage reports with respect to all cropland on the 

farm. 

43

(d) TENANTS AND SHARECROPPERS.—In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the 

interests of tenants and sharecroppers.

(e) SHARING OF PAYMENTS.—The Secretary shall provide for the 

sharing of direct payments and counter-cyclical payments among 

the producers on a farm on a fair and equitable basis. 

SEC. 1306. PLANTING FLEXIBILITY. 

(a) PERMITTED CROPS.—Subject to subsection (b), any commodity or crop may be planted on the base acres for peanuts on a 

farm. 

(b) LIMITATIONS REGARDING CERTAIN COMMODITIES.—

(1) GENERAL LIMITATION.—The planting of an agricultural 

commodity specified in paragraph (2) shall be prohibited on 

base acres for peanuts unless the commodity, if planted, is destroyed before harvest. 

(2) TREATMENT OF TREES AND OTHER PERENNIALS.—The 

planting of an agricultural commodity specified in paragraph 

(3) that is produced on a tree or other perennial plant shall be 

prohibited on base acres for peanuts. 

(3) COVERED AGRICULTURAL COMMODITIES.—Paragraphs (1) 

and (2) apply to the following agricultural commodities: 

(A) Fruits. 

(B) Vegetables (other than lentils, mung beans, and dry 

peas). 

(C) Wild rice. 

(c) EXCEPTIONS.—Paragraphs (1) and (2) of subsection (b) shall 

not limit the planting of an agricultural commodity specified in 

paragraph (3) of that subsection—

(1) in any region in which there is a history of double-cropping of peanuts with agricultural commodities specified in subsection (b)(3), as determined by the Secretary, in which case the 

double-cropping shall be permitted; 

(2) on a farm that the Secretary determines has a history 

of planting agricultural commodities specified in subsection 

(b)(3) on the base acres for peanuts, except that direct payments 

and counter-cyclical payments shall be reduced by an acre for 

each acre planted to such an agricultural commodity; or 

(3) by the producers on a farm that the Secretary determines has an established planting history of a specific agricultural commodity specified in subsection (b)(3), except that—

(A) the quantity planted may not exceed the average 

annual planting history of such agricultural commodity by 

the producers on the farm in the 1991 through 1995 or 

1998 through 2001 crop years (excluding any crop year in 

which no plantings were made), as determined by the Secretary; and 

(B) direct payments and counter-cyclical payments 

shall be reduced by an acre for each acre planted to such 

agricultural commodity. 

SEC. 1307. MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY 

PAYMENTS FOR PEANUTS. 

(a) NONRECOURSE LOANS AVAILABLE.— (1) AVAILABILITY.—For each of the 2002 through 2007 crops 

of peanuts, the Secretary shall make available to producers on 

44

a farm nonrecourse marketing assistance loans for peanuts produced on the farm. The loans shall be made under terms and 

conditions that are prescribed by the Secretary and at the loan 

rate established under subsection (b). 

(2) ELIGIBLE PRODUCTION.—The producers on a farm shall 

be eligible for a marketing assistance loan under this subsection 

for any quantity of peanuts produced on the farm. 

(3) TREATMENT OF CERTAIN COMMINGLED COMMODITIES.— In carrying out this subsection, the Secretary shall make loans 

to producers on a farm that would be eligible to obtain a marketing assistance loan, but for the fact the peanuts owned by the 

producers on the farm are commingled with other peanuts in 

facilities unlicensed for the storage of agricultural commodities 

by the Secretary or a State licensing authority, if the producers 

obtaining the loan agree to immediately redeem the loan collateral in accordance with section 166 of the Federal Agriculture 

Improvement and Reform Act of 1996 (7 U.S.C. 7286). 

(4) OPTIONS FOR OBTAINING LOAN.—A marketing assistance 

loan under this subsection, and loan deficiency payments under 

subsection (e), may be obtained at the option of the producers 

on a farm through— (A) a designated marketing association or marketing 

cooperative of producers that is approved by the Secretary; 

or 

(B) the Farm Service Agency. 

(5) STORAGE OF LOAN PEANUTS.—As a condition on the Secretary’s approval of an individual or entity to provide storage 

for peanuts for which a marketing assistance loan is made 

under this section, the individual or entity shall agree— (A) to provide such storage on a nondiscriminatory 

basis; and 

(B) to comply with such additional requirements as the 

Secretary considers appropriate to accomplish the purposes 

of this section and promote fairness in the administration 

of the benefits of this section. 

(6) PAYMENT OF PEANUT STORAGE COSTS.—Effective for the 

2002 through 2006 crops of peanuts, to ensure proper storage 

of peanuts for which a loan is made under this section, the Secretary shall use the funds of the Commodity Credit Corporation 

to pay storage, handling, and other associated costs. This authority terminates beginning with the 2007 crop of peanuts. 

(7) MARKETING.—A marketing association or cooperative 

may market peanuts for which a loan is made under this section in any manner that conforms to consumer needs, including 

the separation of peanuts by type and quality.

(b) LOAN RATE.—The loan rate for a marketing assistance loan 

under for peanuts subsection (a) shall be equal to $355 per ton. 

(c) TERM OF LOAN.—

(1) IN GENERAL.—A marketing assistance loan for peanuts 

under subsection (a) shall have a term of 9 months beginning 

on the first day of the first month after the month in which the 

loan is made. 

(2) EXTENSIONS PROHIBITED.—The Secretary may not extend the term of a marketing assistance loan for peanuts under 

subsection (a). 

45

(d) REPAYMENT RATE.— (1) IN GENERAL.—The Secretary shall permit producers on 

a farm to repay a marketing assistance loan for peanuts under 

subsection (a) at a rate that is the lesser of— (A) the loan rate established for peanuts under subsection (b), plus interest (determined in accordance with 

section 163 of the Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. 7283)); or 

(B) a rate that the Secretary determines will— (i) minimize potential loan forfeitures; 

(ii) minimize the accumulation of stocks of peanuts 

by the Federal Government; 

(iii) minimize the cost incurred by the Federal Government in storing peanuts; and 

(iv) allow peanuts produced in the United States to 

be marketed freely and competitively, both domestically 

and internationally.

(2) GOOD FAITH EXCEPTION TO BENEFICIAL INTEREST RE- QUIREMENT.—For the 2002 crop year only, in the case of the 

producers on a farm that marketed or otherwise lost beneficial 

interest in the peanuts for which a marketing assistance loan 

was made under this section before repaying the loan, the Secretary shall permit the producers to repay the loan at the applicable repayment rate that was in effect for peanuts under this 

subsection on the date that the producers lost beneficial interest, 

as determined by the Secretary, if the Secretary determines the 

producers acted in good faith.

(e) LOAN DEFICIENCY PAYMENTS.— (1) AVAILABILITY.—The Secretary may make loan deficiency 

payments available to producers on a farm that, although eligible to obtain a marketing assistance loan for peanuts under 

subsection (a), agree to forgo obtaining the loan for the peanuts 

in return for loan deficiency payments under this subsection. 

(2) COMPUTATION.—A loan deficiency payment under this 

subsection shall be computed by multiplying—

(A) the payment rate determined under paragraph (3) 

for peanuts; by 

(B) the quantity of the peanuts produced by the producers, excluding any quantity for which the producers obtain a marketing assistance loan under subsection (a). 

(3) PAYMENT RATE.—For purposes of this subsection, the 

payment rate shall be the amount by which—

(A) the loan rate established under subsection (b); exceeds 

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

(4) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION.—

(A) IN GENERAL.—The Secretary shall determine the 

amount of the loan deficiency payment to be made under 

this subsection to the producers on a farm with respect to 

a quantity of peanuts using the payment rate in effect 

under paragraph (3) as of the date the producers request 

the payment. 

(B) SPECIAL RULE FOR 2002 CROP YEAR.—For the 2002 

crop year only, the Secretary shall determine the amount of 

46

the loan deficiency payment to be made under this subsection to the producers on a farm with respect to a quantity of peanuts using the payment rate in effect under paragraph (3) as of the earlier of the following: 

(i) The date on which the producers marketed or 

otherwise lost beneficial interest in the crop, as determined by the Secretary. 

(ii) The date the producers request the payment. 

(f) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIREMENTS.—As a condition of the receipt of a marketing assistance loan 

under subsection (a), the producer shall comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland 

protection requirements under subtitle C of title XII of that Act (16 

U.S.C. 3821 et seq.) during the term of the loan. 

(g) REIMBURSABLE AGREEMENTS AND PAYMENT OF ADMINISTRATIVE EXPENSES.—The Secretary may implement any reimbursable 

agreements or provide for the payment of administrative expenses 

under this subtitle only in a manner that is consistent with such activities in regard to other commodities.

SEC. 1308. MISCELLANEOUS PROVISIONS. 

(a) MANDATORY INSPECTION.—All peanuts marketed in the 

United States shall be officially inspected and graded by Federal or 

Federal-State inspectors. 

(b) TERMINATION OF PEANUT ADMINISTRATIVE COMMITTEE.—

The Peanut Administrative Committee established under Marketing 

Agreement No. 146 issued pursuant to the Agricultural Adjustment 

Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, is terminated. 

(c) PEANUT STANDARDS BOARD.—

(1) ESTABLISHMENT AND PURPOSE.—The Secretary shall establish a Peanut Standards Board for the purpose of advising 

the Secretary regarding the establishment of quality and handling standards for domestically produced and imported peanuts. 

(2) MEMBERSHIP AND APPOINTMENT.—

(A) TOTAL MEMBERS.—The Board shall consist of 18 

members, with representation equally divided between peanut producers and peanut industry representatives. 

(B) APPOINTMENT PROCESS FOR PRODUCERS.—The Secretary shall appoint—

(i) 3 producers from the Southeast (Alabama, 

Georgia, and Florida) peanut producing region; 

(ii) 3 producers from the Southwest (Texas, Oklahoma, and New Mexico) peanut producing region; and 

(iii) 3 producers from the Virginia/Carolina (Virginia and North Carolina) peanut producing region. 

(C) APPOINTMENT PROCESS FOR INDUSTRY REPRESENTATIVES.—The Secretary shall appoint 3 peanut industry representatives from each of the 3 peanut producing regions in 

the United States.

(3) TERMS.—

(A) IN GENERAL.—A member of the Board shall serve 

a 3-year term.

47

(B) INITIAL APPOINTMENT.—In making the initial appointments to the Board, the Secretary shall stagger the 

terms of the members so that— (i) 1 producer member and peanut industry member from each peanut producing region serves a 1-year 

term; 

(ii) 1 producer member and peanut industry member from each peanut producing region serves a 2-year 

term; and 

(iii) 1 producer member and peanut industry member from each peanut producing region serves a 3-year 

term.

(4) CONSULTATION REQUIRED.—The Secretary shall consult 

with the Board in advance whenever the Secretary establishes 

or changes, or considers the establishment of or a change to, 

quality and handling standards for peanuts. 

(5) FEDERAL ADVISORY COMMITTEE ACT.—The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the 

Board. 

(d) PRIORITY.—The Secretary shall make identifying and combating the presence of all quality concerns related to peanuts a priority in the development of quality and handling standards for peanuts and in the inspection of domestically produced and imported 

peanuts. The Secretary shall consult with appropriate Federal and 

State agencies to provide adequate safeguards against all quality 

concerns related to peanuts. 

(e) CONSISTENT STANDARDS.—Imported peanuts shall be subject 

to the same quality and handling standards as apply to domestically produced peanuts. 

(f) AUTHORIZATION OF APPROPRIATIONS.— (1) IN GENERAL.—In addition to other funds that are available to carry out this section, there is authorized to be appropriated such sums as are necessary to carry out this section. 

(2) TREATMENT OF BOARD EXPENSES.—The expenses of the 

Peanut Standards Board shall not be counted toward any general limitation on the expenses of advisory committees, panels, 

commissions, and task forces of the Department of Agriculture, 

whether enacted before, on, or after the date of enactment of this 

Act, unless the limitation specifically refers to this paragraph 

and specifically includes the Peanut Standards Board within 

the general limitation. 

(g) TRANSITION RULE.—

(1) TEMPORARY DESIGNATION OF PEANUT ADMINISTRATIVE

COMMITTEE MEMBERS.—Notwithstanding the appointment process specified in subsection (c) for the Peanut Standards Board, 

during the transition period, the Secretary may designate persons serving as members of the Peanut Administrative Committee on the day before the date of enactment of this Act to 

serve as members of the Peanut Standards Board for the purpose of carrying out the duties of the Board described in this 

section. 

(2) FUNDS.—The Secretary may transfer any funds available to carry out the activities of the Peanut Administrative 

Committee to the Peanut Standards Board to carry out the duties of the Board described in this section. 

48

(3) TRANSITION PERIOD.—In paragraph (1), the term ‘‘transition period’’ means the period beginning on the date of enactment of this Act and ending on the earlier of— (A) the date the Secretary appoints the members of the 

Peanut Standards Board pursuant to subsection (c); or 

(B) 180 days after the date of enactment of this Act. 

(h) EFFECTIVE DATE.—This section shall take effect with the 

2002 crop of peanuts. 

SEC. 1309. TERMINATION OF MARKETING QUOTA PROGRAMS FOR PEANUTS AND COMPENSATION TO PEANUT QUOTA HOLDERS 

FOR LOSS OF QUOTA ASSET VALUE. 

(a) REPEAL OF MARKETING QUOTA.— (1) REPEAL.—Part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357–1359a), relating 

to peanuts, is repealed. 

(2) TREATMENT OF 2001 CROP.—Part VI of subtitle B of title 

III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357– 1359a), as in effect on the day before the date of enactment of 

this Act, shall continue to apply with respect to the 2001 crop 

of peanuts notwithstanding the amendment made by paragraph 

(1). Section 1308(g)(2) shall also apply to the 2001 crop of peanuts. 

(b) COMPENSATION CONTRACT REQUIRED.— (1) IN GENERAL.—The Secretary shall offer to enter into a 

contract with each person that the Secretary determines is an 

eligible peanut quota holder under subsection (f) for the purpose 

of providing compensation for the lost value of the quota on account of the repeal of the marketing quota program for peanuts 

under subsection (a). 

(2) PAYMENT PERIOD.—The Secretary shall make payments 

under the contracts during fiscal years 2002 through 2006. 

(c) TIME FOR PAYMENT.—

(1) PAYMENT IN INSTALLMENTS.—The payments required 

under the contracts shall be provided in 5 equal installments 

not later than September 30 of each of fiscal years 2002 

through 2006.

(2) SINGLE PAYMENT.—At the request of an eligible peanut 

quota holder entitled to payments under a contract, the Secretary shall provide the entire payment amount determined 

under subsection (d) with respect to the eligible peanut quota 

holder for the 5 fiscal years in a single lump sum during the 

fiscal year specified by the eligible peanut quota holder.

(d) PAYMENT AMOUNT.—The amount of the payment for a fiscal 

year to an eligible peanut quota holder under a contract shall be 

equal to the product obtained by multiplying—

(1) $0.11 per pound; by 

(2) the number of pounds of quota with respect to which the 

person qualifies as a peanut quota holder under subsection (f). 

(e) ASSIGNMENT OF PAYMENTS.—The provisions of section 8(g) 

of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 

590h(g)), relating to assignment of payments, shall apply to the payments made under the contracts. A person making an assignment 

of the payment, or the assignee, shall provide the Secretary with notice, in such manner as the Secretary may require, of any assignment made under this subsection. 

49

(f) ELIGIBLE PEANUT QUOTA HOLDER.— (1) IN GENERAL.—Except as otherwise provided in this subsection, the Secretary shall consider a person to be an eligible 

peanut quota holder for the purposes of this section if the person, as of the date of enactment of this Act, owned a farm that, 

also as of that date, was eligible for a permanent peanut quota 

under section 358–1(b) of the Agricultural Adjustment Act of 

1938 (7 U.S.C. 1358–1(b)), irrespective of temporary leases, 

transfers of quotas for seed, or quotas for experimental purposes. 

(2) EFFECT OF PURCHASE CONTRACT.—If there was a written contract for the purchase of all or a portion of a farm described in paragraph (1) as of the date of enactment of this Act 

and the parties to the sale are unable to agree to the disposition 

of eligibility for payments under this section, the Secretary, taking into account any incomplete permanent transfer of quota 

that has otherwise been agreed to, shall provide for the equitable division of the payments among the parties by adjusting 

the determination of who is the eligible peanut quota holder 

with respect to particular pounds of the quota. 

(3) EFFECT OF AGREEMENT FOR PERMANENT QUOTA TRANS- FER.—If the Secretary determines that there was in existence, as 

of the date of enactment of this Act, an agreement for the permanent transfer of quota, but that the transfer was not completed by that date, the Secretary shall consider the peanut 

quota holder to be the party to the agreement who, as of that 

date, was the owner of the farm to which the quota was to be 

transferred.

(4) PROTECTED BASES.—A person that owns a farm with a 

peanut poundage quota which is protected under a conservation 

reserve program contract entered into under section 1231 of the 

Food Security Act of 1985 (16 U.S.C. 3831) shall be considered 

to be an eligible quota holder with respect to the protected 

poundage.

(5) SECRETARIAL DISCRETION.—Notwithstanding the preceding paragraphs, the Secretary may declare a person to be the 

eligible peanut quota holder with respect to certain pounds of 

quota or otherwise for purposes of this section if the Secretary 

considers the declaration is needed to insure a fair and equitable administration of the payments provided for in this section, so long as the Secretary does not, in exercising this authority, effectively increase the total quota in excess of the quota that 

was available to all producers for the 2001 crop year for other 

than seed or experimental use. 

(6) LIMITATION ON QUANTITY OF QUOTA HELD.—A person 

shall be considered an eligible peanut quota holder for purposes 

of this section only with respect to that number of permanent 

pounds that qualifies the person as a peanut quota holder 

under one of the preceding paragraphs. The determination of 

the peanut poundage amount for which the person qualifies 

shall be made based on the 2001 crop quota levels and shall

take into account sales of the farm that occurred before the date 

of enactment of this Act and any permanent transfers of quota 

that took place before that date, consistent with the preceding 

paragraphs. The Secretary shall not take into account, or allow 

50

eligibility for, quotas for seed, granted as experimental quotas, 

or obtained by temporary lease or transfer. 

(g) SUCCESSIONS IN PAYMENT ELIGIBILITY AND ATTACHMENT OF

ELIGIBILITY TO PERSONS.— (1) ELIGIBILITY ATTACHES TO PERSONS.—Once a person is 

eligible for payments under this section, as determined under 

subsection (f), the continued eligibility of the person for the payments does not run with a farm, but shall remain with the person for the term of this section irrespective of whether the person sells, or continues to have an interest in, the farm that had 

the quota that qualified the person as an eligible peanut quota 

holder under subsection (f) and irrespective of whether the person has a continuing interest in the production of peanuts. 

(2) SUCCESSION.—If a person eligible for payments under 

this section dies, in the case of an individual, or ceases to exist, 

in the case of other persons, the payment eligibility of the person 

shall pass to the person’s personal or organizational successor, 

as determined by the Secretary.

(h) CONFORMING AMENDMENTS.— (1) ADMINISTRATIVE PROVISIONS.—Section 361 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is amended by 

striking ‘‘peanuts,’’. 

(2) ADJUSTMENT OF QUOTAS.—Section 371 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1371) is amended—

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

‘‘peanuts,’’; and 

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

‘‘peanuts’’. 

(3) REPORTS AND RECORDS.—Section 373 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1373) is amended—

(A) in the first sentence of subsection (a)—

(i) by striking ‘‘peanuts,’’ each place it appears; 

(ii) by inserting ‘‘and’’ after ‘‘from producers,’’; and 

(iii) by striking ‘‘for producers, all’’ and all that 

follows through the period at the end of the sentence 

and inserting ‘‘for producers.’’; and 

(B) in subsection (b), by striking ‘‘peanuts,’’. (4) EMINENT DOMAIN.—Section 378(c) of the Agricultural 

Adjustment Act of 1938 (7 U.S.C. 1378(c)) is amended in the 

first sentence— (A) by striking ‘‘cotton,’’ and inserting ‘‘cotton and’’; 

and 

(B) by striking ‘‘and peanuts,’’. 

SEC. 1310. REPEAL OF SUPERSEDED PRICE SUPPORT AUTHORITY AND 

EFFECT OF REPEAL. 

(a) REPEAL OF PRICE SUPPORT AUTHORITY.—

(1) IN GENERAL.—Section 155 of the Federal Agriculture 

Improvement and Reform Act of 1996 (7 U.S.C. 7271) is repealed. 

(2) CONFORMING AMENDMENTS.—The Agricultural Act of 

1949 (7 U.S.C. 1441 et seq.) is amended—

(A) in section 101(b) (7 U.S.C. 1441(b)), by striking 

‘‘and peanuts’’; and 

(B) in section 408(c) (7 U.S.C. 1428(c)), by striking 

‘‘peanuts,’’. 

51

(3) TECHNICAL AMENDMENT.—The chapter heading of chapter 2 of subtitle D of the Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. prec. 7271) is amended by striking ‘‘PEANUTS AND’’. 

(b) DISPOSAL.—Notwithstanding any other provision of law or 

previous declaration made by the Secretary, the Secretary shall ensure that the disposal of all peanuts for which a loan for the 2001 

crop of peanuts was made under section 155 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7271) before 

the date of enactment of this Act is carried out in a manner that 

prevents price disruptions in the domestic and international markets for peanuts. 

(c) TREATMENT OF CROP INSURANCE POLICIES FOR 2002 CROP

YEAR.—

(1) APPLICABILITY.—This subsection shall apply for the 

2002 crop year only notwithstanding any other provision of law 

or crop insurance policy. 

(2) PRICE ELECTION.—The nonquota price election for segregation I, II, and III peanuts shall be 17.75 cents per pound 

and shall be used for all aspects of the policy relating to the calculations of premium, liability, and indemnities. 

(3) QUALITY ADJUSTMENT.—For the purposes of quality adjustment only, the average support price per pound of peanuts 

shall be a price equal to 17.75 cents per pound. Quality under 

the crop insurance policy for peanuts shall be adjusted under 

procedures issued by the Federal Crop Insurance Corporation.

Subtitle D—Sugar

SEC. 1401. SUGAR PROGRAM. 

(a) EXTENSION AND MODIFICATION OF EXISTING SUGAR PROGRAM.—Section 156 of the Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. 7272) is amended to read as follows: 

‘‘SEC. 156. SUGAR PROGRAM. 

‘‘(a) SUGARCANE.—The Secretary shall make loans available to 

processors of domestically grown sugarcane at a rate equal to 18 

cents per pound for raw cane sugar. 

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

to processors of domestically grown sugar beets at a rate equal to 

22.9 cents per pound for refined beet sugar. 

‘‘(c) LOAN RATE ADJUSTMENTS.—

‘‘(1) IN GENERAL.—The Secretary may reduce the loan rate 

specified in subsection (a) for domestically grown sugarcane 

and subsection (b) for domestically grown sugar beets if the Secretary determines that negotiated reductions in export subsidies 

and domestic subsidies provided for sugar of other major sugar 

growing, producing, and exporting countries in the aggregate 

exceed the commitments made as part of the Agreement on Agriculture. 

‘‘(2) EXTENT OF REDUCTION.—The Secretary shall not reduce the loan rate under subsection (a) or (b) below a rate that 

provides an equal measure of support to that provided by other 

major sugar growing, producing, and exporting countries, based 

52

on an examination of both domestic and export subsidies subject to reduction in the Agreement on Agriculture. 

‘‘(3) ANNOUNCEMENT OF REDUCTION.—The Secretary shall 

announce any loan rate reduction to be made under this subsection as far in advance as is practicable. 

‘‘(4) DEFINITIONS.—In this subsection: 

‘‘(A) AGREEMENT ON AGRICULTURE.—The term ‘Agreement on Agriculture’ means the Agreement on Agriculture 

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

Agreements Act (19 U.S.C. 3511(d)(2)), or any amendatory 

or successor agreement. 

‘‘(B) MAJOR SUGAR COUNTRIES.—The term ‘major sugar 

growing, producing, and exporting countries’ means—

‘‘(i) the countries of the European Union; and 

‘‘(ii) the 10 foreign countries not covered by subparagraph (A) that the Secretary determines produce 

the greatest quantity of sugar. 

‘‘(d) TERM OF LOANS.—

‘‘(1) IN GENERAL.—A loan under this section during any fiscal year shall be made available not earlier than the beginning 

of the fiscal year and shall mature at the earlier of—

‘‘(A) the end of the 9-month period beginning on the 

first day of the first month after the month in which the 

loan is made; or 

‘‘(B) the end of the fiscal year in which the loan is 

made. 

‘‘(2) SUPPLEMENTAL LOANS.—In the case of a loan made 

under this section in the last 3 months of a fiscal year, the processor may repledge the sugar as collateral for a second loan in 

the subsequent fiscal year, except that the second loan shall—

‘‘(A) be made at the loan rate in effect at the time the 

second loan is made; and 

‘‘(B) mature in 9 months less the quantity of time that 

the first loan was in effect. 

‘‘(e) LOAN TYPE; PROCESSOR ASSURANCES.—

‘‘(1) NONRECOURSE LOANS.—The Secretary shall carry out 

this section through the use of nonrecourse loans. 

‘‘(2) PROCESSOR ASSURANCES.—

‘‘(A) IN GENERAL.—The Secretary shall obtain from 

each processor that receives a loan under this section such 

assurances as the Secretary considers adequate to ensure 

that the processor will provide payments to producers that 

are proportional to the value of the loan received by the 

processor for the sugar beets and sugarcane delivered by 

producers to the processor. 

‘‘(B) MINIMUM PAYMENTS.—

‘‘(i) IN GENERAL.—Subject to clause (ii), the Secretary may establish appropriate minimum payments 

for purposes of this paragraph. 

‘‘(ii) LIMITATION.—In the case of sugar beets, the 

minimum payment established under clause (i) shall 

not exceed the rate of payment provided for under the 

applicable contract between a sugar beet producer and 

a sugar beet processor. 

53

‘‘(iii) EFFECT OF DISASTER.—The Secretary may not 

bar a beet sugar processor from eligibility to obtain a 

loan under this section because of the failure of the 

processor to provide the appropriate minimum payment 

established under this subsection if the failure—

‘‘(I) occurred during a crop year prior to the 

date of enactment of the Farm Security and Rural 

Investment Act of 2002; and 

‘‘(II) was related, at least in part, to the effects 

of a natural disaster, including damage from 

freeze. 

‘‘(3) ADMINISTRATION.—The Secretary may not impose or 

enforce any prenotification requirement, or similar administrative requirement not otherwise in effect on the date of enactment 

of the Farm Security and Rural Investment Act of 2002, that 

has the effect of preventing a processor from electing to forfeit 

the loan collateral (of an acceptable grade and quality) on the 

maturity of the loan. 

‘‘(f) LOANS FOR IN-PROCESS SUGAR.—

‘‘(1) DEFINITION OF IN-PROCESS SUGARS AND SYRUPS.—In 

this subsection, the term ‘in-process sugars and syrups’ does not 

include raw sugar, liquid sugar, invert sugar, invert syrup, or 

other finished product that is otherwise eligible for a loan 

under subsection (a) or (b). 

‘‘(2) AVAILABILITY.—The Secretary shall make nonrecourse 

loans available to processors of a crop of domestically grown 

sugarcane and sugar beets for in-process sugars and syrups derived from the crop. 

‘‘(3) LOAN RATE.—The loan rate shall be equal to 80 percent 

of the loan rate applicable to raw cane sugar or refined beet 

sugar, as determined by the Secretary on the basis of the source 

material for the in-process sugars and syrups. 

‘‘(4) FURTHER PROCESSING ON FORFEITURE.—

‘‘(A) IN GENERAL.—As a condition of the forfeiture of 

in-process sugars and syrups serving as collateral for a 

loan under paragraph (2), the processor shall, within such 

reasonable time period as the Secretary may prescribe and 

at no cost to the Commodity Credit Corporation, convert the 

in-process sugars and syrups into raw cane sugar or refined beet sugar of acceptable grade and quality for sugars 

eligible for loans under subsection (a) or (b). 

‘‘(B) TRANSFER TO CORPORATION.—Once the in-process 

sugars and syrups are fully processed into raw cane sugar 

or refined beet sugar, the processor shall transfer the sugar 

to the Commodity Credit Corporation. 

‘‘(C) PAYMENT TO PROCESSOR.—On transfer of the 

sugar, the Secretary shall make a payment to the processor 

in an amount equal to the amount obtained by multiplying—

‘‘(i) the difference between—

‘‘(I) the loan rate for raw cane sugar or refined 

beet sugar, as appropriate; and 

‘‘(II) the loan rate the processor received under 

paragraph (3); by 

54

‘‘(ii) the quantity of sugar transferred to the Secretary. ‘‘(5) LOAN CONVERSION.—If the processor does not forfeit the 

collateral as described in paragraph (4), but instead further 

processes the in-process sugars and syrups into raw cane sugar 

or refined beet sugar and repays the loan on the in-process sugars and syrups, the processor may obtain a loan under subsection (a) or (b) for the raw cane sugar or refined beet sugar, 

as appropriate. ‘‘(6) TERM OF LOAN.—The term of a loan made under this 

subsection for a quantity of in-process sugars and syrups, when 

combined with the term of a loan made with respect to the raw 

cane sugar or refined beet sugar derived from the in-process 

sugars and syrups, may not exceed 9 months, consistent with 

subsection (d). 

‘‘(g) AVOIDING FORFEITURES; CORPORATION INVENTORY DISPOSI- TION.— ‘‘(1) IN GENERAL.—Subject to subsection (e)(3), to the maximum extent practicable, the Secretary shall operate the program established under this section at no cost to the Federal 

Government by avoiding the forfeiture of sugar to the Commodity Credit Corporation. ‘‘(2) INVENTORY DISPOSITION.— ‘‘(A) IN GENERAL.—To carry out paragraph (1), the 

Commodity Credit Corporation may accept bids to obtain 

raw cane sugar or refined beet sugar in the inventory of the 

Commodity Credit Corporation from (or otherwise make 

available such commodities, on appropriate terms and conditions, to) processors of sugarcane and processors of sugar 

beets (acting in conjunction with the producers of the sugarcane or sugar beets processed by the processors) in return 

for the reduction of production of raw cane sugar or refined 

beet sugar, as appropriate. ‘‘(B) ADDITIONAL AUTHORITY.—The authority provided 

under this paragraph is in addition to any authority of the 

Commodity Credit Corporation under any other law. 

‘‘(h) INFORMATION REPORTING.— ‘‘(1) DUTY OF PROCESSORS AND REFINERS TO REPORT.—A 

sugarcane processor, cane sugar refiner, and sugar beet processor shall furnish the Secretary, on a monthly basis, such information as the Secretary may require to administer sugar 

programs, including the quantity of purchases of sugarcane, 

sugar beets, and sugar, and production, importation, distribution, and stock levels of sugar. ‘‘(2) DUTY OF PRODUCERS TO REPORT.—

‘‘(A) PROPORTIONATE SHARE STATES.—As a condition of 

a loan made to a processor for the benefit of a producer, the 

Secretary shall require each producer of sugarcane located 

in a State (other than the Commonwealth of Puerto Rico) 

in which there are in excess of 250 producers of sugarcane 

to report, in the manner prescribed by the Secretary, the 

sugarcane yields and acres planted to sugarcane of the producer. ‘‘(B) OTHER STATES.—The Secretary may require each 

producer of sugarcane or sugar beets not covered by subVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00058 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
55

paragraph (A) to report, in a manner prescribed by the Secretary, the yields of, and acres planted to, sugarcane or 

sugar beets, respectively, of the producer. 

‘‘(3) DUTY OF IMPORTERS TO REPORT.— ‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), the Secretary shall require an importer of sugars, syrups, or molasses to be used for human consumption or to 

be used for the extraction of sugar for human consumption 

to report, in the manner prescribed by the Secretary, the 

quantities of the products imported by the importer and the 

sugar content or equivalent of the products. ‘‘(B) TARIFF-RATE QUOTAS.—Subparagraph (A) shall 

not apply to sugars, syrups, or molasses that are within the 

quantities of tariff-rate quotas that are subject to the lower 

rate of duties. 

‘‘(4) PENALTY.—Any person willfully failing or refusing to 

furnish the information, or furnishing willfully any false information, shall be subject to a civil penalty of not more than 

$10,000 for each such violation. ‘‘(5) MONTHLY REPORTS.—Taking into consideration the information received under this subsection, the Secretary shall 

publish on a monthly basis composite data on production, imports, distribution, and stock levels of sugar. 

‘‘(i) SUBSTITUTION OF REFINED SUGAR.—For purposes of Additional U.S. Note 6 to chapter 17 of the Harmonized Tariff Schedule 

of the United States and the reexport programs and polyhydric alcohol program administered by the Secretary, all refined sugars 

(whether derived from sugar beets or sugarcane) produced by cane 

sugar refineries and beet sugar processors shall be fully substitutable for the export of sugar and sugar-containing products under 

those programs. ‘‘(j) EFFECTIVE PERIOD.—This section shall be effective only for 

the 1996 through 2007 crops of sugar beets and sugarcane.’’. (b) EFFECTIVE DATE OF ASSESSMENT TERMINATION.—Subsection (f) of section 156 of the Federal Agriculture Improvement 

and Reform Act of 1996 (7 U.S.C. 7272(f)), as in effect immediately 

before the enactment of the Farm Security and Rural Investment 

Act of 2002, is deemed to have been repealed effective as of October 

1, 2001. 

(c) INTEREST RATE.—Section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283) is amended—

(1) by inserting ‘‘(a) IN GENERAL.—’’ before ‘‘Notwithstanding’’; and 

(2) by adding at the end the following:

‘‘(b) SUGAR.—For purposes of this section, raw cane sugar, refined beet sugar, and in-process sugar eligible for a loan under section 156 shall not be considered an agricultural commodity.’’.

SEC. 1402. STORAGE FACILITY LOANS. 

(a) IN GENERAL.—Notwithstanding any other provision of law 

and as soon as practicable after the date of enactment of this Act, 

the Commodity Credit Corporation shall amend part 1436 of title 

7, Code of Federal Regulations, to establish a sugar storage facility 

loan program to provide financing for processors of domesticallyproduced sugarcane and sugar beets to construct or upgrade storage 

and handling facilities for raw sugars and refined sugars. 

56

(b) ELIGIBLE PROCESSORS.—A storage facility loan described in 

subsection (a) shall be made available to any processor of domestically produced sugarcane or sugar beets that (as determined by the 

Secretary)—

(1) has a satisfactory credit history; 

(2) has a need for increased storage capacity, taking into 

account the effects of marketing allotments; and 

(3) demonstrates an ability to repay the loan. 

(c) TERM OF LOANS.—A storage facility loan described in subsection (a) shall— (1) have a minimum term of 7 years; and 

(2) be in such amounts and on such terms and conditions 

(including terms and conditions relating to downpayments, collateral, and eligible facilities) as are normal, customary, and 

appropriate for the size and commercial nature of the borrower.

SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

Part VII of subtitle B of title III of the Agricultural Adjustment 

Act of 1938 (7 U.S.C. 359aa et seq.) is amended to read as follows: 

‘‘PART VII—FLEXIBLE MARKETING 

ALLOTMENTS FOR SUGAR 

‘‘SEC. 359a. DEFINITIONS. 

‘‘In this part: ‘‘(1) MAINLAND STATE.—The term ‘mainland State’ means a 

State other than an offshore State. ‘‘(2) OFFSHORE STATE.—The term ‘offshore State’ means a 

sugarcane producing State located outside of the continental 

United States. ‘‘(3) STATE.—Notwithstanding section 301, the term ‘State’ means—‘‘(A) a State; 

‘‘(B) the District of Columbia; and 

‘‘(C) the Commonwealth of Puerto Rico. 

‘‘(4) UNITED STATES.—The term ‘United States’, when used 

in a geographical sense, means all of the States. 

‘‘SEC. 359b. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR. 

‘‘(a) SUGAR ESTIMATES.—

‘‘(1) IN GENERAL.—Not later than August 1 before the beginning of each of the 2002 through 2007 crop years, the Secretary 

shall estimate—

‘‘(A) the quantity of sugar that will be consumed in the 

United States during the crop year; 

‘‘(B) the quantity of sugar that would provide for reasonable carryover stocks; 

‘‘(C) the quantity of sugar that will be available from 

carry-in stocks for consumption in the United States during 

the crop year; ‘‘(D) the quantity of sugar that will be available from 

the domestic processing of sugarcane and sugar beets; and ‘‘(E) the quantity of sugars, syrups, and molasses that 

will be imported for human consumption or to be used for 

the extraction of sugar for human consumption in the 

United States during the crop year, whether such articles 

57

are under a tariff-rate quota or are in excess or outside of 

a tariff-rate quota. 

‘‘(2) EXCLUSION.—The estimates under this subsection shall 

not apply to sugar imported for the production of polyhydric alcohol or to any sugar refined and reexported in refined form or 

in products containing sugar. ‘‘(3) REESTIMATES.—The Secretary shall make reestimates 

of sugar consumption, stocks, production, and imports for a 

crop year as necessary, but no later than the beginning of each 

of the second through fourth quarters of the crop year. 

‘‘(b) SUGAR ALLOTMENTS.— ‘‘(1) IN GENERAL.—By the beginning of each crop year, the 

Secretary shall establish for that crop year appropriate allotments under section 359c for the marketing by processors of 

sugar processed from sugar beets and from domestically produced sugarcane at a level that the Secretary estimates will result in no forfeitures of sugar to the Commodity Credit Corporation under the loan program for sugar established under section 

156 of the Federal Agriculture Improvement and Reform Act of 

1996 (7 U.S.C. 7272). ‘‘(2) PRODUCTS.—The Secretary may include sugar products, whose majority content is sucrose for human consumption, 

derived from sugarcane, sugar beets, molasses, or sugar in the 

allotments under paragraph (1) if the Secretary determines it to 

be appropriate for purposes of this part. 

‘‘(c) PROHIBITIONS.— ‘‘(1) IN GENERAL.—During any crop year or portion thereof 

for which marketing allotments have been established, no processor of sugar beets or sugarcane shall market a quantity of 

sugar in excess of the allocation established for such processor, 

except to enable another processor to fulfill an allocation established for such other processor or to facilitate the exportation of 

such sugar. ‘‘(2) CIVIL PENALTY.—Any processor who knowingly violates 

paragraph (1) shall be liable to the Commodity Credit Corporation for a civil penalty in an amount equal to 3 times the 

United States market value, at the time of the commission of 

the violation, of that quantity of sugar involved in the violation. ‘‘(3) DEFINITION OF MARKET.—For purposes of this part, the 

term ‘market’ shall mean to sell or otherwise dispose of in commerce in the United States (including the forfeiture of sugar 

under the loan program for sugar under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 

7272) and, with respect to any integrated processor and refiner, 

the movement of raw cane sugar into the refining process).

‘‘SEC. 359c. ESTABLISHMENT OF FLEXIBLE MARKETING ALLOTMENTS. 

‘‘(a) IN GENERAL.—The Secretary shall establish flexible marketing allotments for sugar for any crop year in which the allotments are required under section 359b(b) in accordance with this 

section. 

‘‘(b) OVERALL ALLOTMENT QUANTITY.—

‘‘(1) IN GENERAL.—The Secretary shall establish the overall 

quantity of sugar to be allotted for the crop year (in this part 

referred to as the ‘overall allotment quantity’) by deducting from 

the sum of the estimated sugar consumption and reasonable 

58

carryover stocks (at the end of the crop year) for the crop year, 

as determined under section 359b(a)— ‘‘(A) 1,532,000 short tons, raw value; and 

‘‘(B) carry-in stocks of sugar, including sugar in Commodity Credit Corporation inventory. 

‘‘(2) ADJUSTMENT.—The Secretary shall adjust the overall 

allotment quantity to avoid the forfeiture of sugar to the Commodity Credit Corporation. 

‘‘(c) MARKETING ALLOTMENT FOR SUGAR DERIVED FROM SUGAR

BEETS AND SUGAR DERIVED FROM SUGARCANE.—The overall allotment quantity for the crop year shall be allotted between— ‘‘(1) sugar derived from sugar beets by establishing a marketing allotment for a crop year at a quantity equal to the product of multiplying the overall allotment quantity for the crop 

year by 54.35 percent; and ‘‘(2) sugar derived from sugarcane by establishing a marketing allotment for a crop year at a quantity equal to the product of multiplying the overall allotment quantity for the crop 

year by 45.65 percent. 

‘‘(d) FILLING CANE SUGAR AND BEET SUGAR ALLOTMENTS.— ‘‘(1) CANE SUGAR.—Each marketing allotment for cane 

sugar established under this section may only be filled with 

sugar processed from domestically grown sugarcane. ‘‘(2) BEET SUGAR.—Each marketing allotment for beet sugar 

established under this section may only be filled with sugar domestically processed from sugar beets. 

‘‘(e) STATE CANE SUGAR ALLOTMENTS.— ‘‘(1) IN GENERAL.—The allotment for sugar derived from 

sugarcane shall be further allotted, among the States in the 

United States in which sugarcane is produced, after a hearing 

(if requested by the affected sugarcane processors and growers) 

and on such notice as the Secretary by regulation may prescribe, in a fair and equitable manner as provided in this subsection and section 359d(b)(1)(D). 

‘‘(2) OFFSHORE ALLOTMENT.— ‘‘(A) COLLECTIVELY.—Prior to the allotment of sugar 

derived from sugarcane to any other State, 325,000 short 

tons, raw value shall be allotted to the offshore States. ‘‘(B) INDIVIDUALLY.—The collective offshore State allotment provided for under subparagraph (A) shall be further

allotted among the offshore States in which sugarcane is 

produced, after a hearing (if requested by the affected sugarcane processors and growers) and on such notice as the 

Secretary by regulation may prescribe, in a fair and equitable manner on the basis of— ‘‘(i) past marketings of sugar, based on the average 

of the 2 highest years of production of raw cane sugar 

from the 1996 through 2000 crops; ‘‘(ii) the ability of processors to market the sugar 

covered under the allotments for the crop year; and 

‘‘(iii) past processings of sugar from sugarcane, 

based on the 3-year average of the 1998 through 2000 

crop years. 

‘‘(3) MAINLAND ALLOTMENT.—The allotment for sugar derived from sugarcane, less the amount provided for under paraVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00062 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
59

graph (2), shall be allotted among the mainland States in the 

United States in which sugarcane is produced, after a hearing 

(if requested by the affected sugarcane processors and growers) 

and on such notice as the Secretary by regulation may prescribe, in a fair and equitable manner on the basis of—

‘‘(A) past marketings of sugar, based on the average of 

the 2 highest years of production of raw cane sugar from 

the 1996 through 2000 crops; 

‘‘(B) the ability of processors to market the sugar covered under the allotments for the crop year; and 

‘‘(C) past processings of sugar from sugarcane, based 

on the 3 crop years with the greatest processings (in the 

mainland States collectively) during the 1991 through 2000 

crop years. 

‘‘(f) FILLING CANE SUGAR ALLOTMENTS.—Except as provided in 

section 359e, a State cane sugar allotment established under subsection (e) for a crop year may be filled only with sugar processed 

from sugarcane grown in the State covered by the allotment. 

‘‘(g) ADJUSTMENT OF MARKETING ALLOTMENTS.—

‘‘(1) IN GENERAL.—The Secretary shall, based on reestimates under section 359b(a)(3), adjust upward or downward 

marketing allotments in a fair and equitable manner, as the 

Secretary determines appropriate, to reflect changes in estimated sugar consumption, stocks, production, or imports. 

‘‘(2) ALLOCATION TO PROCESSORS.—In the case of any increase or decrease in an allotment, each allocation to a processor of the allotment under section 359d, and each proportionate share established with respect to the allotment under 

section 359f(c), shall be increased or decreased by the same percentage that the allotment is increased or decreased. 

‘‘(3) CARRY-OVER OF REDUCTIONS.—Whenever a marketing 

allotment for a crop year is required to be reduced during the 

crop year under this subsection, if, at the time of the reduction, 

the quantity of sugar marketed exceeds the processor’s reduced 

allocation, the allocation of an allotment next established for 

the processor shall be reduced by the quantity of the excess 

sugar marketed. 

‘‘(h) SUSPENSION OF ALLOTMENTS.—Whenever the Secretary estimates or reestimates under section 359b(a), or has reason to believe, that imports of sugars, syrups or molasses for human consumption or to be used for the extraction of sugar for human consumption, whether under a tariff-rate quota or in excess or outside 

of a tariff-rate quota, will exceed 1,532,000 short tons (raw value 

equivalent) (excluding any imports attributable to reassignment 

under paragraph (1)(D) or (2)(C) of section 359e(b)), and that the 

imports would lead to a reduction of the overall allotment quantity, 

the Secretary shall suspend the marketing allotments established 

under this section until such time as the imports have been restricted, eliminated, or reduced to or below the level of 1,532,000 

short tons (raw value equivalent). 

‘‘SEC. 359d. ALLOCATION OF MARKETING ALLOTMENTS.

‘‘(a) ALLOCATION TO PROCESSORS.—Whenever marketing allotments are established for a crop year under section 359c, in order 

to afford all interested persons an equitable opportunity to market 

60

sugar under an allotment, the Secretary shall allocate each such allotment among the processors covered by the allotment. ‘‘(b) HEARING AND NOTICE.— ‘‘(1) CANE SUGAR.— ‘‘(A) IN GENERAL.—The Secretary shall make allocations for cane sugar after a hearing, if requested by the affected sugarcane processors and growers, and on such notice as the Secretary by regulation may prescribe, in such 

manner and in such quantities as to provide a fair, efficient, and equitable distribution of the allocations under 

this paragraph. Each such allocation shall be subject to adjustment under section 359c(g). ‘‘(B) MULTIPLE PROCESSOR STATES.—Except as provided in subparagraphs (C) and (D), the Secretary shall allocate the allotment for cane sugar among multiple cane 

sugar processors in a single State based on— ‘‘(i) past marketings of sugar, based on the average 

of the 2 highest years of production of raw cane sugar 

from among the 1996 through 2000 crops; ‘‘(ii) the ability of processors to market sugar covered by that portion of the allotment allocated for the 

crop year; and ‘‘(iii) past processings of sugar from sugarcane, 

based on the average of the 3 highest years of production during the 1996 through 2000 crop years. 

‘‘(C) TALISMAN PROCESSING FACILITY.—In the case of 

allotments under subparagraph (B) attributable to the operations of the Talisman processing facility before the date of 

enactment of this subparagraph, the Secretary shall allocate the allotment among processors in the State under subparagraph (A) in accordance with the agreements of March 

25 and 26, 1999, between the affected processors and the 

Secretary of the Interior. ‘‘(D) PROPORTIONATE SHARE STATES.—In the case of 

States subject to section 359f(c), the Secretary shall allocate 

the allotment for cane sugar among multiple cane sugar 

processors in a single State based on—

‘‘(i) past marketings of sugar, based on the average 

of the 2 highest years of production of raw cane sugar 

from among the 1997 through 2001 crop years; 

‘‘(ii) the ability of processors to market sugar covered by that portion of the allotments allocated for the 

crop year; and 

‘‘(iii) past processings of sugar from sugarcane, 

based on the average of the 2 highest crop years of crop 

production during the 1997 through 2001 crop years. 

‘‘(E) NEW ENTRANTS.—

‘‘(i) IN GENERAL.—Notwithstanding subparagraphs 

(B) and (D), the Secretary, on application of any processor that begins processing sugarcane on or after the 

date of enactment of this subparagraph, and after a 

hearing (if requested by the affected sugarcane processors and growers) and on such notice as the Secretary by regulation may prescribe, may provide the 

processor with an allocation that provides a fair, effiVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00064 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
61

cient and equitable distribution of the allocations from 

the allotment for the State in which the processor is located. ‘‘(ii) PROPORTIONATE SHARE STATES.—In the case 

of proportionate share States, the Secretary shall establish proportionate shares in a quantity sufficient to 

produce the sugarcane required to satisfy the allocations. ‘‘(iii) LIMITATIONS.—The allotment for a new processor under this subparagraph shall not exceed— ‘‘(I) in the case of the first crop year of operation of a new processor, 50,000 short tons (raw 

value); and ‘‘(II) in the case of each subsequent crop year 

of operation of the new processor, a quantity established by the Secretary in accordance with this 

subparagraph and the criteria described in subparagraph (B) or (D), as applicable. 

‘‘(iv) NEW ENTRANT STATES.— ‘‘(I) IN GENERAL.—Notwithstanding subparagraphs (A) and (C) of section 359c(e)(3), to accommodate an allocation under clause (i) to a new 

processor located in a new entrant mainland State, 

the Secretary shall provide the new entrant mainland State with an allotment. ‘‘(II) EFFECT ON OTHER ALLOTMENTS.—The allotment to any new entrant mainland State shall 

be subtracted, on a pro rata basis, from the allotments otherwise allotted to each mainland State 

under section 359c(e)(3). 

‘‘(v) ADVERSE EFFECTS.—Before providing an initial processor allocation or State allotment to a new entrant processor or a new entrant State under this subparagraph, the Secretary shall take into consideration 

any adverse effects that the provision of the allocation 

or allotment may have on existing cane processors and 

producers in mainland States. 

‘‘(vi) ABILITY TO MARKET.—Consistent with section 

359c and this section, any processor allocation or State 

allotment made to a new entrant processor or to a new 

entrant State under this subparagraph shall be provided only after the applicant processor, or the applicable processors in the State, have demonstrated the ability to process, produce, and market (including the 

transfer or delivery of the raw cane sugar to a refinery 

for further processing or marketing) raw cane sugar for 

the crop year for which the allotment is applicable. ‘‘(vii) PROHIBITION.—Not more than 1 processor allocation provided under this subparagraph may be applicable to any individual sugar processing facility. 

‘‘(F) TRANSFER OF OWNERSHIP.—Except as otherwise 

provided in section 359f(c)(8), if a sugarcane processor is 

sold or otherwise transferred to another owner or is closed 

as part of an affiliated corporate group processing consolidation, the Secretary shall transfer the allotment allocation 

62

for the processor to the purchaser, new owner, successor in 

interest, or any remaining processor of an affiliated entity, 

as applicable, of the processor. 

‘‘(2) BEET SUGAR.— ‘‘(A) IN GENERAL.—Except as otherwise provided in this 

paragraph and sections 359c(g), 359e(b), and 359f(b), the 

Secretary shall make allocations for beet sugar among beet 

sugar processors for each crop year that allotments are in 

effect on the basis of the adjusted weighted average quantity of beet sugar produced by the processors for each of the 

1998 through 2000 crop years, as determined under this 

paragraph. ‘‘(B) QUANTITY.—The quantity of an allocation made 

for a beet sugar processor for a crop year under subparagraph (A) shall bear the same ratio to the quantity of allocations made for all beet sugar processors for the crop year 

as the adjusted weighted average quantity of beet sugar 

produced by the processor (as determined under subparagraphs (C) and (D)) bears to the total of the adjusted 

weighted average quantities of beet sugar produced by all 

processors (as so determined). ‘‘(C) WEIGHTED AVERAGE QUANTITY.—Subject to subparagraph (D), the weighted quantity of beet sugar produced by a beet sugar processor during each of the 1998 

through 2000 crop years shall be (as determined by the Secretary)—

‘‘(i) in the case of the 1998 crop year, 25 percent of 

the quantity of beet sugar produced by the processor 

during the crop year; ‘‘(ii) in the case of the 1999 crop year, 35 percent 

of the quantity of beet sugar produced by the processor 

during the crop year; and ‘‘(iii) in the case of the 2000 crop year, 40 percent 

of the quantity of beet sugar produced by the processor 

(including any quantity of sugar received from the 

Commodity Credit Corporation) during the crop year. 

‘‘(D) ADJUSTMENTS.— ‘‘(i) IN GENERAL.—The Secretary shall adjust the 

weighted average quantity of beet sugar produced by a 

beet sugar processor during the 1998 through 2000 

crop years under subparagraph (C) if the Secretary determines that the processor— ‘‘(I) during the 1996 through 2000 crop years, 

opened a sugar beet processing factory; ‘‘(II) during the 1998 through 2000 crop years, 

closed a sugar beet processing factory; ‘‘(III) during the 1998 through 2000 crop 

years, constructed a molasses desugarization facility; or ‘‘(IV) during the 1998 through 2000 crop 

years, suffered substantial quality losses on sugar 

beets stored during any such crop year. 

‘‘(ii) QUANTITY.—The quantity of beet sugar produced by a beet sugar processor under subparagraph 

(C) shall be—

63

‘‘(I) in the case of a processor that opened a 

sugar beet processing factory, increased by 1.25 

percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years 

(without consideration of any adjustment under 

this subparagraph) for each sugar beet processing 

factory that is opened by the processor; ‘‘(II) in the case of a processor that closed a 

sugar beet processing factory, decreased by 1.25 

percent of the total of the adjusted weighted average quantities of beet sugar produced by all processors during the 1998 through 2000 crop years 

(without consideration of any adjustment under 

this subparagraph) for each sugar beet processing 

factory that is closed by the processor; ‘‘(III) in the case of a processor that constructed a molasses desugarization facility, increased by 0.25 percent of the total of the adjusted 

weighted average quantities of beet sugar produced 

by all processors during the 1998 through 2000 

crop years (without consideration of any adjustment under this subparagraph) for each molasses 

desugarization facility that is constructed by the 

processor; and ‘‘(IV) in the case of a processor that suffered 

substantial quality losses on stored sugar beets, increased by 1.25 percent of the total of the adjusted 

weighted average quantities of beet sugar produced 

by all processors during the 1998 through 2000 

crop years (without consideration of any adjustment under this subparagraph). ‘‘(E) PERMANENT TERMINATION OF OPERATIONS OF A

PROCESSOR.—If a processor of beet sugar has been dissolved, liquidated in a bankruptcy proceeding, or otherwise 

has permanently terminated operations (other than in conjunction with a sale or other disposition of the processor or 

the assets of the processor), the Secretary shall—

‘‘(i) eliminate the allocation of the processor provided under this section; and 

‘‘(ii) distribute the allocation to other beet sugar 

processors on a pro rata basis. 

‘‘(F) SALE OF ALL ASSETS OF A PROCESSOR TO ANOTHER

PROCESSOR.—If a processor of beet sugar (or all of the assets of the processor) is sold to another processor of beet 

sugar, the Secretary shall transfer the allocation of the seller to the buyer unless the allocation has been distributed to 

other sugar beet processors under subparagraph (E). 

‘‘(G) SALE OF FACTORIES OF A PROCESSOR TO ANOTHER

PROCESSOR.— ‘‘(i) IN GENERAL.—Subject to subparagraphs (E) 

and (F), if 1 or more factories of a processor of beet 

sugar (but not all of the assets of the processor) are 

sold to another processor of beet sugar during a crop 

year, the Secretary shall assign a pro rata portion of 

64

the allocation of the seller to the allocation of the buyer 

to reflect the historical contribution of the production of 

the sold factory or factories to the total allocation of the 

seller. ‘‘(ii) APPLICATION OF ALLOCATION.—The assignment of the allocation under clause (i) shall apply— ‘‘(I) during the remainder of the crop year during which the sale described in clause (i) occurs 

(referred to in this subparagraph as the ‘initial 

crop year’); and ‘‘(II) each subsequent crop year (referred in 

this subparagraph as a ‘subsequent crop year’), 

subject to clause (iii). 

‘‘(iii) SUBSEQUENT CROP YEARS.— ‘‘(I) IN GENERAL.—The assignment of the allocation under clause (i) shall apply during each 

subsequent crop year unless the acquired factory or 

factories continue in operation for less than the initial crop year and the first subsequent crop year. ‘‘(II) REASSIGNMENT.—If the acquired factory 

or factories do not continue in operation for the 

complete initial crop year and the first subsequent 

crop year, the Secretary shall reassign the temporary allocation to other processors of beet sugar 

on a pro rata basis. 

‘‘(iv) USE OF OTHER FACTORIES TO FILL ALLOCA- TION.—If the transferred allocation to the buyer for the 

purchased factory or factories cannot be filled by the 

production of the purchased factory or factories for the 

initial crop year or a subsequent crop year, the remainder of the transferred allocation may be filled by beet 

sugar produced by the buyer from other factories of the 

buyer.

‘‘(H) NEW ENTRANTS STARTING PRODUCTION OR REOPENING FACTORIES.— ‘‘(i) IN GENERAL.—Except as provided by clause (ii), 

if an individual or entity that does not have an allocation of beet sugar under this part (referred to in this 

paragraph as a ‘new entrant’) starts processing sugar 

beets after the date of enactment of this subparagraph, 

or acquires and reopens a factory that produced beet 

sugar during previous crop years that (at the time of 

acquisition) has no allocation associated with the factory under this part, the Secretary shall— ‘‘(I) assign an allocation for beet sugar to the 

new entrant that provides a fair and equitable distribution of the allocations for beet sugar; and ‘‘(II) reduce the allocations for beet sugar of all 

other processors on a pro rata basis to reflect the 

new allocation. 

‘‘(ii) EXCEPTION.—If a new entrant acquires and 

reopens a factory that previously produced beet sugar 

from sugar beets and from sugar beet molasses but the 

factory last processed sugar beets during the 1997 crop 

year and the new entrant starts to process sugar beets 

65

at such factory after the date of enactment of this 

clause, the Secretary shall— ‘‘(I) assign an allocation for beet sugar to the 

new entrant that is not less than the greater of 

1.67 percent of the total of the adjusted weighted 

average quantities of beet sugar produced by all 

processors during the 1998 through 2000 crop 

years as determined under subsection (b)(2)(C), or 

1,500,000 hundredweights; and ‘‘(II) reduce the allocations for beet sugar of all 

other processors on a pro rata basis to reflect the 

new allocation. ‘‘(I) NEW ENTRANTS ACQUIRING ONGOING FACTORIES

WITH PRODUCTION HISTORY.—If a new entrant acquires a 

factory that has production history during the period of the 

1998 through 2000 crop years and that is producing beet 

sugar at the time the allocations are made from a processor 

that has an allocation of beet sugar, the Secretary shall 

transfer a portion of the allocation of the seller to the new 

entrant to reflect the historical contribution of the production of the sold factory to the total allocation of the seller.

‘‘SEC. 359e. REASSIGNMENT OF DEFICITS. 

‘‘(a) ESTIMATES OF DEFICITS.—At any time allotments are in effect under this part, the Secretary, from time to time, shall determine whether (in view of then-current inventories of sugar, the estimated production of sugar and expected marketings, and other pertinent factors) any processor of sugarcane will be unable to market 

the sugar covered by the portion of the State cane sugar allotment 

allocated to the processor and whether any processor of sugar beets 

will be unable to market sugar covered by the portion of the beet 

sugar allotment allocated to the processor. ‘‘(b) REASSIGNMENT OF DEFICITS.— ‘‘(1) CANE SUGAR.—If the Secretary determines that any 

sugarcane processor who has been allocated a share of a State 

cane sugar allotment will be unable to market the processor’s 

allocation of the State’s allotment for the crop year— ‘‘(A) the Secretary first shall reassign the estimated 

quantity of the deficit to the allocations for other processors 

within that State, depending on the capacity of each other 

processor to fill the portion of the deficit to be assigned to 

it and taking into account the interests of producers served 

by the processors; ‘‘(B) if after the reassignments the deficit cannot be 

completely eliminated, the Secretary shall reassign the estimated quantity of the deficit proportionately to the allotments for other cane sugar States, depending on the capacity of each other State to fill the portion of the deficit to be 

assigned to it, with the reassigned quantity to each State 

to be allocated among processors in that State in proportion 

to the allocations of the processors; ‘‘(C) if after the reassignments the deficit cannot be 

completely eliminated, the Secretary shall reassign the estimated quantity of the deficit to the Commodity Credit Corporation and shall sell such quantity of sugar from inventories of the Corporation unless the Secretary determines 

66

that such sales would have a significant effect on the price 

of sugar; and

‘‘(D) if after the reassignments and sales, the deficit 

cannot be completely eliminated, the Secretary shall reassign the remainder to imports. 

‘‘(2) BEET SUGAR.—If the Secretary determines that a sugar 

beet processor who has been allocated a share of the beet sugar 

allotment will be unable to market that allocation—

‘‘(A) the Secretary first shall reassign the estimated 

quantity of the deficit to the allotments for other sugar beet 

processors, depending on the capacity of each other processor to fill the portion of the deficit to be assigned to it and 

taking into account the interests of producers served by the 

processors;

‘‘(B) if after the reassignments the deficit cannot be 

completely eliminated, the Secretary shall reassign the estimated quantity of the deficit to the Commodity Credit Corporation and shall sell such quantity of sugar from inventories of the Corporation unless the Secretary determines 

that such sales would have a significant effect on the price 

of sugar; and

‘‘(C) if after the reassignments and sales, the deficit 

cannot be completely eliminated, the Secretary shall reassign the remainder to imports. 

‘‘(3) CORRESPONDING INCREASE.—The allocation of each 

processor receiving a reassigned quantity of an allotment under 

this subsection for a crop year shall be increased to reflect the 

reassignment.

‘‘SEC. 359f. PROVISIONS APPLICABLE TO PRODUCERS. 

‘‘(a) PROCESSOR ASSURANCES.—

‘‘(1) IN GENERAL.—If allotments for a crop year are allocated to processors under section 359d, the Secretary shall obtain from the processors such assurances as the Secretary considers adequate that the allocation will be shared among producers served by the processor in a fair and equitable manner 

that adequately reflects producers’ production histories. 

‘‘(2) ARBITRATION.—

‘‘(A) IN GENERAL.—Any dispute between a processor 

and a producer, or group of producers, with respect to the 

sharing of the allocation to the processor shall be resolved 

through arbitration by the Secretary on the request of either 

party. 

‘‘(B) PERIOD.—The arbitration shall, to the maximum 

extent practicable, be—

‘‘(i) commenced not more than 45 days after the request; and 

‘‘(ii) completed not more than 60 days after the request. 

‘‘(b) SUGAR BEET PROCESSING FACILITY CLOSURES.—

‘‘(1) IN GENERAL.—If a sugar beet processing facility is 

closed and the sugar beet growers that previously delivered 

beets to the facility elect to deliver their beets to another processing company, the growers may petition the Secretary to modify allocations under this part to allow the delivery. 

67

‘‘(2) INCREASED ALLOCATION FOR PROCESSING COMPANY.—

The Secretary may increase the allocation to the processing 

company to which the growers elect to deliver their sugar beets, 

with the approval of the processing company, to a level that 

does not exceed the processing capacity of the processing company, to accommodate the change in deliveries. 

‘‘(3) DECREASED ALLOCATION FOR CLOSED COMPANY.—The 

increased allocation shall be deducted from the allocation to the 

company that owned the processing facility that has been closed 

and the remaining allocation shall be unaffected. 

‘‘(4) TIMING.—The determinations of the Secretary on the 

issues raised by the petition shall be made within 60 days after 

the filing of the petition. 

‘‘(c) PROPORTIONATE SHARES OF CERTAIN ALLOTMENTS.—

‘‘(1) IN GENERAL.—

‘‘(A) STATES AFFECTED.—In any case in which a State 

allotment is established under section 359c(f) and there are 

in excess of 250 sugarcane producers in the State (other 

than Puerto Rico), the Secretary shall make a determination under subparagraph (B). 

‘‘(B) DETERMINATION.—The Secretary shall determine, 

for each State allotment described in subparagraph (A), 

whether the production of sugarcane, in the absence of proportionate shares, will be greater than the quantity needed 

to enable processors to fill the allotment and provide a normal carryover inventory of sugar. 

‘‘(2) ESTABLISHMENT OF PROPORTIONATE SHARES.—If the 

Secretary determines under paragraph (1) that the quantity of 

sugarcane produced by producers in the area covered by a State 

allotment for a crop year will be in excess of the quantity needed to enable processors to fill the allotment for the crop year 

and provide a normal carryover inventory of sugar, the Secretary shall establish a proportionate share for each sugarcaneproducing farm that limits the acreage of sugarcane that may 

be harvested on the farm for sugar or seed during the crop year 

the allotment is in effect as provided in this subsection. Each 

such proportionate share shall be subject to adjustment under 

paragraph (7) and section 359c(g). 

‘‘(3) METHOD OF DETERMINING.—For purposes of determining proportionate shares for any crop of sugarcane: 

‘‘(A) The Secretary shall establish the State’s per-acre 

yield goal for a crop of sugarcane at a level (not less than 

the average per-acre yield in the State for the 2 highest 

years from among the 1999, 2000, and 2001 crop years, as 

determined by the Secretary) that will ensure an adequate 

net return per pound to producers in the State, taking into 

consideration any available production research data that 

the Secretary considers relevant. 

‘‘(B) The Secretary shall adjust the per-acre yield goal 

by the average recovery rate of sugar produced from sugarcane by processors in the State. 

‘‘(C) The Secretary shall convert the State allotment for 

the crop year involved into a State acreage allotment for the 

crop by dividing the State allotment by the per-acre yield 

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goal for the State, as established under subparagraph (A) 

and as further adjusted under subparagraph (B). ‘‘(D) The Secretary shall establish a uniform reduction 

percentage for the crop by dividing the State acreage allotment, as determined for the crop under subparagraph (C), 

by the sum of all adjusted acreage bases in the State, as 

determined by the Secretary. ‘‘(E) The uniform reduction percentage for the crop, as 

determined under subparagraph (D), shall be applied to the 

acreage base for each sugarcane-producing farm in the 

State to determine the farm’s proportionate share of sugarcane acreage that may be harvested for sugar or seed. 

‘‘(4) ACREAGE BASE.—For purposes of this subsection, the 

acreage base for each sugarcane-producing farm shall be determined by the Secretary, as follows: ‘‘(A) The acreage base for any farm shall be the number 

of acres that is equal to the average of the acreage planted 

and considered planted for harvest for sugar or seed on the 

farm in the 2 highest of the 1999, 2000, and 2001 crop 

years. ‘‘(B) Acreage planted to sugarcane that producers on a 

farm were unable to harvest to sugarcane for sugar or seed 

because of drought, flood, other natural disaster, or other 

condition beyond the control of the producers may be considered as harvested for the production of sugar or seed for 

purposes of this paragraph. 

‘‘(5) VIOLATION.— ‘‘(A) IN GENERAL.—Whenever proportionate shares are 

in effect in a State for a crop of sugarcane, producers on 

a farm shall not knowingly harvest, or allow to be harvested, for sugar or seed an acreage of sugarcane in excess 

of the farm’s proportionate share for the crop year, or otherwise violate proportionate share regulations issued by the 

Secretary under section 359h(a). 

‘‘(B) DETERMINATION OF VIOLATION.—No producer 

shall be considered to have violated subparagraph (A) unless the processor of the sugarcane harvested by such producer from acreage in excess of the proportionate share of 

the farm markets an amount of sugar that exceeds the allocation of such processor for a crop year. ‘‘(C) CIVIL PENALTY.—Any producer on a farm who violates subparagraph (A) by knowingly harvesting, or allowing to be harvested, an acreage of sugarcane in excess of the 

farm’s proportionate share shall be liable to the Commodity 

Credit Corporation for a civil penalty equal to one and onehalf times the United States market value of the quantity 

of sugar that is marketed by the processor of such sugarcane in excess of the allocation of such processor for the 

crop year. The Secretary shall prorate penalties imposed 

under this subparagraph in a fair and equitable manner 

among all the producers of sugarcane harvested from excess 

acreage that is acquired by such processor. 

‘‘(6) WAIVER.—Notwithstanding the preceding subparagraph, the Secretary may authorize the county and State committees established under section 8(b) of the Soil Conservation 

69

and Domestic Allotment Act (16 U.S.C. 590h(b)) to waive or 

modify deadlines and other proportionate share requirements in 

cases in which lateness or failure to meet the other requirements 

does not affect adversely the operation of proportionate shares. 

‘‘(7) ADJUSTMENTS.—Whenever the Secretary determines 

that, because of a natural disaster or other condition beyond the 

control of producers that adversely affects a crop of sugarcane 

subject to proportionate shares, the amount of sugarcane produced by producers subject to the proportionate shares will not 

be sufficient to enable processors in the State to meet the State’s 

cane sugar allotment and provide a normal carryover inventory 

of sugar, the Secretary may uniformly allow producers to harvest an amount of sugarcane in excess of their proportionate 

share, or suspend proportionate shares entirely, as necessary to 

enable processors to meet the State allotment and provide a normal carryover inventory of sugar. 

‘‘(8) PROCESSING FACILITY CLOSURES.—

‘‘(A) IN GENERAL.—If a sugarcane processing facility 

subject to this subsection is closed and the sugarcane growers that delivered sugarcane to the facility prior to closure 

elect to deliver their sugarcane to another processing company, the growers may petition the Secretary to modify allocations under this part to allow the delivery. 

‘‘(B) INCREASED ALLOCATION FOR PROCESSING COMPANY.—The Secretary may increase the allocation to the 

processing company to which the growers elect to deliver 

the sugarcane, with the approval of the processing company, to a level that does not exceed the processing capacity 

of the processing company, to accommodate the change in 

deliveries. 

‘‘(C) DECREASED ALLOCATION FOR CLOSED COMPANY.—

The increased allocation shall be deducted from the allocation to the company that owned the processing facility that 

has been closed and the remaining allocation shall be unaffected. 

‘‘(D) TIMING.—The determinations of the Secretary on 

the issues raised by the petition shall be made within 60 

days after the filing of the petition. 

‘‘SEC. 359g. SPECIAL RULES. 

‘‘(a) TRANSFER OF ACREAGE BASE HISTORY.—For the purpose of 

establishing proportionate shares for sugarcane farms under section 

359f(c), the Secretary, on application of any producer, with the written consent of all owners of a farm, may transfer the acreage base 

history of the farm to any other parcels of land of the applicant. 

‘‘(b) PRESERVATION OF ACREAGE BASE HISTORY.—If for reasons 

beyond the control of a producer on a farm, the producer is unable 

to harvest an acreage of sugarcane for sugar or seed with respect 

to all or a portion of the proportionate share established for the 

farm under section 359f(c), the Secretary, on the application of the 

producer and with the written consent of all owners of the farm, 

may preserve for a period of not more than 5 consecutive years the 

acreage base history of the farm to the extent of the proportionate 

share involved. The Secretary may permit the proportionate share to 

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70

poses of establishing acreage bases shall accrue to the other farms 

by virtue of the redistribution of the proportionate share. ‘‘(c) REVISIONS OF ALLOCATIONS AND PROPORTIONATE

SHARES.—The Secretary, after such notice as the Secretary by regulation may prescribe, may revise or amend any allocation of a marketing allotment under section 359d, or any proportionate share established or adjusted for a farm under section 359f(c), on the same 

basis as the initial allocation or proportionate share was required 

to be established. ‘‘(d) TRANSFERS OF MILL ALLOCATIONS.— ‘‘(1) TRANSFER AUTHORIZED.—A producer in a proportionate share State, upon written consent from all crop-share 

owners (or the representative of the crop-share owners) of a 

farm, and from the processing company holding the applicable 

allocation for such shares, may deliver sugarcane to another 

processing company if the additional delivery, when combined 

with such other processing company’s existing deliveries, does 

not exceed the processing capacity of the company. ‘‘(2) ALLOCATION ADJUSTMENT.—Notwithstanding section 

359d, the Secretary shall adjust the allocations of each of such 

processing companies affected by a transfer under paragraph 

(1) to reflect the change in deliveries, based on the product of— ‘‘(A) the number of acres of proportionate shares being 

transferred; and ‘‘(B) the State’s per acre yield goal established under 

section 359f(c)(3).

‘‘SEC. 359h. REGULATIONS; VIOLATIONS; PUBLICATION OF SECRETARY’S DETERMINATIONS; JURISDICTION OF THE 

COURTS; UNITED STATES ATTORNEYS. 

‘‘(a) REGULATIONS.—The Secretary or the Commodity Credit 

Corporation, as appropriate, shall issue such regulations as may be 

necessary to carry out the authority vested in the Secretary in administering this part. ‘‘(b) VIOLATION.—Any person knowingly violating any regulation of the Secretary issued under subsection (a) shall be subject to 

a civil penalty of not more than $5,000 for each violation. 

‘‘(c) PUBLICATION IN FEDERAL REGISTER.—Each determination 

issued by the Secretary to establish, adjust, or suspend allotments 

under this part shall be promptly published in the Federal Register 

and shall be accompanied by a statement of the reasons for the determination. 

‘‘(d) JURISDICTION OF COURTS; UNITED STATES ATTORNEYS.—

‘‘(1) JURISDICTION OF COURTS.—The several district courts 

of the United States are vested with jurisdiction specifically to 

enforce, and to prevent and restrain any person from violating, 

this part or any regulation issued thereunder. 

‘‘(2) UNITED STATES ATTORNEYS.—Whenever the Secretary 

shall so request, it shall be the duty of the several United States 

attorneys, in their respective districts, to institute proceedings to 

enforce the remedies and to collect the penalties provided for in 

this part. The Secretary may elect not to refer to a United States 

attorney any violation of this part or regulation when the Secretary determines that the administration and enforcement of 

this part would be adequately served by written notice or warning to any person committing the violation. 

71

‘‘(e) NONEXCLUSIVITY OF REMEDIES.—The remedies and penalties provided for in this part shall be in addition to, and not exclusive of, any remedies or penalties existing at law or in equity. 

‘‘SEC. 359i. APPEALS.

‘‘(a) IN GENERAL.—An appeal may be taken to the Secretary 

from any decision under section 359d establishing allocations of 

marketing allotments, or under section 359f, by any person adversely affected by reason of any such decision. ‘‘(b) PROCEDURE.— ‘‘(1) NOTICE OF APPEAL.—Any such appeal shall be taken by 

filing with the Secretary, within 20 days after the decision complained of is effective, notice in writing of the appeal and a 

statement of the reasons therefor. Unless a later date is specified by the Secretary as part of the Secretary’s decision, the decision complained of shall be considered to be effective as of the 

date on which announcement of the decision is made. The Secretary shall deliver a copy of any notice of appeal to each person 

shown by the records of the Secretary to be adversely affected 

by reason of the decision appealed, and shall at all times thereafter permit any such person to inspect and make copies of appellant’s reasons for the appeal and shall on application permit 

the person to intervene in the appeal. ‘‘(2) HEARING.—The Secretary shall provide each appellant 

an opportunity for a hearing before an administrative law 

judge in accordance with sections 554 and 556 of title 5, United 

States Code. The expenses for conducting the hearing shall be 

reimbursed by the Commodity Credit Corporation.

‘‘(c) SPECIAL APPEAL PROCESS REGARDING BEET SUGAR ALLO- CATIONS.—

‘‘(1) APPEAL AUTHORIZED.—Beginning after the 2006 crop 

year, a processor that has an allocation of the beet sugar allotment under this part (referred to in this subsection as a ‘petitioner’) may file a notice of appeal with the Secretary regarding 

the petitioner’s beet sugar allocation. Except as provided in 

paragraph (2), the Secretary shall consider the appeal if the notice alleges that any processor that has a beet sugar allocation 

has failed to fill at least 82.5 percent of its allocation of the beet 

sugar allotment with sugar produced by it or received from the 

Commodity Credit Corporation in 2 out of the 3 crop years preceding the crop year in which the appeal is filed. A processor 

that is alleged to have failed to fill at least 82.5 percent of its 

allocation shall be allowed to fully participate in the appeal. ‘‘(2) EXCEPTIONS.—An appeal under paragraph (1) shall 

not be based on the failure of a processor to fill at least 82.5 

percent of its allocation because of drought, flood, hail, or other 

weather disaster, as determined by the Secretary. The determination by the Secretary shall not require a formal disaster 

declaration. 

‘‘(3) RESPONSE TO APPEAL.—Upon the petitioner making an 

appeal to the Secretary, and upon a review by the Secretary of 

how processors have filled their allocations, the Secretary 

may—

‘‘(A) assign an increased allocation for beet sugar to the 

petitioner that provides a fair and equitable distribution of 

the allocations for beet sugar, taking into account—

72

‘‘(i) production history during the period beginning 

on April 4, 1996, and through the date of enactment of 

the Farm Security and Rural Investment Act of 2002; 

‘‘(ii) capital investment during that period; 

‘‘(iii) increases in United States sugar consumption; and 

‘‘(iv) the ability or inability of processors to fill the 

allocations they have received under this part; and 

‘‘(B) reduce, correspondingly, the allocation for beet 

sugar of each processor determined to have failed to fill at 

least 82.5 percent of its allocation of the beet sugar allotment as described in paragraph (1). 

‘‘(4) FILING DEADLINE.—For purposes of the filing deadline 

specified in subsection (b)(1), the 20-day period shall commence 

on the date on which the Secretary announces the allocations 

for the subsequent crop year or October 1, whichever is earlier.

‘‘SEC. 359j. ADMINISTRATION. 

‘‘(a) USE OF CERTAIN AGENCIES.—In carrying out this part, the 

Secretary may use the services of local committees of sugar beet or 

sugarcane producers, sugarcane processors, or sugar beet processors, 

State and county committees established under section 8(b) of the 

Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)), 

and the departments and agencies of the United States Government.

‘‘(b) USE OF COMMODITY CREDIT CORPORATION.—The Secretary 

shall use the services, facilities, funds, and authorities of the Commodity Credit Corporation to carry out this part. 

‘‘SEC. 359k. REALLOCATING SUGAR QUOTA IMPORT SHORTFALLS. 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of law, 

on or after June 1 of each of the 2002 through 2007 calendar years, 

the United States Trade Representative, in consultation with the 

Secretary, shall determine the amount of the quota of cane sugar 

used by each qualified supplying country for that crop year, and 

may reallocate the unused quota for that crop year among qualified 

supplying countries.

‘‘(b) QUALIFIED SUPPLYING COUNTRY DEFINED.—In this section, 

the term ‘qualified supplying country’ means one of the following 

foreign countries that is allowed to export cane sugar to the United 

States under an agreement or any other country with which the 

United States has an agreement relating to the importation of cane 

sugar:

Argentina 

Australia 

Barbados 

Belize 

Bolivia 

Brazil 

Colombia 

Republic of the Congo 

Costa Rica 

Dominican Republic 

Ecuador 

El Salvador 

Fiji 

Gabon 

Guatemala 

Guyana 

Haiti 

73

Honduras 

India 

Cote D’Ivoire, formerly known as the Ivory Coast 

Jamaica 

Madagascar 

Malawi 

Mauritius 

Mexico 

Mozambique 

Nicaragua 

Panama 

Papua New Guinea 

Paraguay 

Peru 

Philippines 

St. Kitts and Nevis 

South Africa 

Swaziland 

Taiwan 

Thailand 

Trinidad-Tobago 

Uruguay 

Zimbabwe.’’.

Subtitle E—Dairy 

SEC. 1501. MILK PRICE SUPPORT PROGRAM. 

(a) SUPPORT ACTIVITIES.—During the period beginning on June 

1, 2002, and ending on December 31, 2007, the Secretary of Agriculture shall support the price of milk produced in the 48 contiguous States through the purchase of cheese, butter, and nonfat dry 

milk produced from the milk. 

(b) RATE.—During the period specified in subsection (a), the 

price of milk shall be supported at a rate equal to $9.90 per hundredweight for milk containing 3.67 percent butterfat. 

(c) PURCHASE PRICES.—

(1) UNIFORM PRICES.—The support purchase prices under 

this section for each of the products of milk (butter, cheese, and 

nonfat dry milk) announced by the Secretary shall be the same 

for all of that product sold by persons offering to sell the product to the Secretary. 

(2) SUFFICIENT PRICES.—The purchase prices shall be sufficient to enable plants of average efficiency to pay producers, on 

average, a price that is not less than the rate of price support 

for milk in effect under subsection (b). 

(d) SPECIAL RULE FOR BUTTER AND NONFAT DRY MILK PURCHASE PRICES.—

(1) ALLOCATION OF PURCHASE PRICES.—The Secretary may 

allocate the rate of price support between the purchase prices for 

nonfat dry milk and butter in a manner that will result in the 

lowest level of expenditures by the Commodity Credit Corporation or achieve such other objectives as the Secretary considers 

appropriate. Not later than 10 days after making or changing 

an allocation, the Secretary shall notify the Committee on Agriculture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate of the allocation. Section 553 of title 5, United States Code, shall not apply 

with respect to the implementation of this section. 

74

(2) TIMING OF PURCHASE PRICE ADJUSTMENTS.—The Secretary may make any such adjustments in the purchase prices 

for nonfat dry milk and butter the Secretary considers to be necessary not more than twice in each calendar year. 

(e) COMMODITY CREDIT CORPORATION.—The Secretary shall 

carry out the program authorized by this section through the Commodity Credit Corporation.

SEC. 1502. NATIONAL DAIRY MARKET LOSS PAYMENTS. 

(a) DEFINITIONS.—In this section: 

(1) CLASS I MILK.—The term ‘‘Class I milk’’ means milk (including milk components) classified as Class I milk under a 

Federal milk marketing order. 

(2) ELIGIBLE PRODUCTION.—The term ‘‘eligible production’’ means milk produced by a producer in a participating State. 

(3) FEDERAL MILK MARKETING ORDER.—The term ‘‘Federal 

milk marketing order’’ means an order issued under section 8c 

of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted 

with amendments by the Agricultural Marketing Agreement Act 

of 1937.

(4) PARTICIPATING STATE.—The term ‘‘participating State’’ means each State. 

(5) PRODUCER.—The term ‘‘producer’’ means an individual 

or entity that directly or indirectly (as determined by the Secretary)—

(A) shares in the risk of producing milk; and 

(B) makes contributions (including land, labor, management, equipment, or capital) to the dairy farming operation of the individual or entity that are at least commensurate with the share of the individual or entity of the proceeds of the operation. 

(b) PAYMENTS.—The Secretary shall offer to enter into contracts 

with producers on a dairy farm located in a participating State 

under which the producers receive payments on eligible production. 

(c) AMOUNT.—Payments to a producer under this section shall 

be calculated by multiplying (as determined by the Secretary)— (1) the payment quantity for the producer during the applicable month established under subsection (d); 

(2) the amount equal to— (A) $16.94 per hundredweight; less 

(B) the Class I milk price per hundredweight in Boston 

under the applicable Federal milk marketing order; by 

(3) 45 percent. 

(d) PAYMENT QUANTITY.—

(1) IN GENERAL.—Subject to paragraph (2), the payment 

quantity for a producer during the applicable month under this 

section shall be equal to the quantity of eligible production marketed by the producer during the month. 

(2) LIMITATION.—The payment quantity for all producers 

on a single dairy operation during the months of the applicable 

fiscal year for which the producers receive payments under subsection (b) shall not exceed 2,400,000 pounds. For purposes of 

determining whether producers are producers on separate dairy 

operations or a single dairy operation, the Secretary shall apply 

the same standards as were applied in implementing the dairy 

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ment, Food and Drug Administration, and Related Agencies 

Appropriations Act, 2001 (as enacted into law by Public Law 

106–387; 114 Stat. 1549A–50). 

(3) RECONSTITUTION.—The Secretary shall promulgate regulations to ensure that a producer does not reconstitute a dairy 

operation for the sole purpose of receiving additional payments 

under this section. 

(e) PAYMENTS.—A payment under a contract under this section 

shall be made on a monthly basis not later than 60 days after the 

last day of the month for which the payment is made. 

(f) SIGNUP.—The Secretary shall offer to enter into contracts 

under this section during the period beginning on the date that is 

60 days after the date of enactment of this Act and ending on September 30, 2005. 

(g) DURATION OF CONTRACT.—

(1) IN GENERAL.—Except as provided in paragraph (2) and 

subsection (h), any contract entered into by producers on a 

dairy farm under this section shall cover eligible production 

marketed by the producers on the dairy farm during the period 

starting with the first day of month the producers on the dairy 

farm enter into the contract and ending on September 30, 2005. 

(2) VIOLATIONS.—If a producer violates the contract, the 

Secretary may—

(A) terminate the contract and allow the producer to retain any payments received under the contract; or 

(B) allow the contract to remain in effect and require 

the producer to repay a portion of the payments received 

under the contract based on the severity of the violation. 

(h) TRANSITION RULE.—In addition to any payment that is otherwise available under this section, if the producers on a dairy farm 

enter into a contract under this section, the Secretary shall make a 

payment in accordance with the formula specified in subsection (c) 

on the quantity of eligible production of the producer marketed during the period beginning on December 1, 2001, and ending on the 

last day of the month preceding the month the producers on the 

dairy farm entered into the contract.

SEC. 1503. DAIRY EXPORT INCENTIVE AND DAIRY INDEMNITY PROGRAMS. 

(a) DAIRY EXPORT INCENTIVE PROGRAM.—Section 153(a) of the 

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

striking ‘‘2002’’ and inserting ‘‘2007’’. 

(b) DAIRY INDEMNITY PROGRAM.—Section 3 of Public Law 90–

484 (7 U.S.C. 450l) is amended by striking ‘‘1995’’ and inserting 

‘‘2007’’. 

SEC. 1504. DAIRY PRODUCT MANDATORY REPORTING. 

Section 272(1) of the Agricultural Marketing Act of 1946 (7 

U.S.C. 1637a(1)) is amended—

(1) by striking ‘‘means manufactured dairy products’’ and 

inserting ‘‘means—

‘‘(A) manufactured dairy products’’; 

(2) by striking the period at the end and inserting ‘‘; and’’; 

and 

(3) by adding at the end the following: 

76

‘‘(B) substantially identical products designated by the 

Secretary.’’. 

SEC. 1505. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM. 

(a) DEFINITIONS.—Section 111 of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502) is amended—

(1) in subsection (k), by striking ‘‘and’’ at the end; 

(2) in subsection (l), by striking the period at the end and 

inserting a semicolon; and 

(3) by adding at the end the following:

‘‘(m) the term ‘imported dairy product’ means any dairy 

product that is imported into the United States (as defined in 

subsection (l)), including dairy products imported into the 

United States in the form of—

‘‘(1) milk, cream, and fresh and dried dairy products; 

‘‘(2) butter and butterfat mixtures; 

‘‘(3) cheese; and 

‘‘(4) casein and mixtures;

‘‘(n) the term ‘importer’ means a person that imports an imported dairy product into the United States; and 

‘‘(o) the term ‘Customs’ means the United States Customs 

Service.’’. 

(b) REPRESENTATION OF IMPORTERS ON BOARD.—Section 113(b) 

of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(b)) 

is amended—

(1) by inserting ‘‘NATIONAL DAIRY PROMOTION AND RESEARCH BOARD.—’’ after ‘‘(b)’’; 

(2) by designating the first through ninth sentences as 

paragraphs (1) through (5) and paragraphs (7) through (10), respectively, and indenting the paragraphs appropriately; 

(3) in paragraph (2) (as so designated), by striking ‘‘Members’’ and inserting ‘‘Except as provided in paragraph (6), the 

members’’; 

(4) by inserting after paragraph (5) (as so designated) the 

following: 

‘‘(6) IMPORTERS.—

‘‘(A) INITIAL REPRESENTATION.—In making initial appointments to the Board of importer representatives, the 

Secretary shall appoint 2 members who represent importers 

of dairy products and are subject to assessments under the 

order. 

‘‘(B) SUBSEQUENT REPRESENTATION.—At least once 

every 3 years after the initial appointment of importer representatives under subparagraph (A), the Secretary shall 

review the average volume of domestic production of dairy 

products compared to the average volume of imports of 

dairy products into the United States during the previous 

3 years and, on the basis of that review, shall reapportion 

importer representation on the Board to reflect the proportional share of the United States market by domestic production and imported dairy products.

‘‘(C) ADDITIONAL MEMBERS; NOMINATIONS.—The members appointed under this paragraph—

‘‘(i) shall be in addition to the total number of 

members appointed under paragraph (2); and 

77

‘‘(ii) shall be appointed from nominations submitted by importers under such procedures as the Secretary determines to be appropriate.’’; and 

(5) in paragraph (8) (as so designated), by striking ‘‘is produced’’ and inserting ‘‘is produced as well as importers of dairy 

products’’. 

(c) BUDGETS.—Section 113(e) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(e)) is amended—

(1) by striking ‘‘(e)’’ and inserting: 

‘‘(e) BUDGETS.—

‘‘(1) PREPARATION AND SUBMISSION.—’’; 

(2) by striking the last sentence; and 

(3) by adding at the end the following: 

‘‘(2) FOREIGN MARKET EFFORTS.—The order shall authorize 

the Board to expend in the maintenance and expansion of foreign markets an amount not to exceed the amount collected 

from United States producers for a fiscal year. Of those funds, 

for each of the 2002 through 2007 fiscal years, the Board’s 

budget may provide for the expenditure of revenues available to 

the Board to develop international markets for, and to promote 

within such markets, the consumption of dairy products produced or manufactured in the United States.’’. 

(d) IMPORTER ASSESSMENT.—Section 113(g) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended—

(1) by inserting ‘‘ASSESSMENTS.—’’ after ‘‘(g)’’; 

(2) by designating the first through fifth sentences as paragraphs (1) through (5), respectively, and indenting appropriately; 

(3) in paragraph (3) (as so designated)—

(A) by inserting ‘‘for milk produced in the United 

States and imported dairy products’’ after ‘‘The rate of assessment’’; and 

(B) by inserting before the period at the end the following: ‘‘, as determined by the Secretary’’; and 

(4) by adding at the end the following: 

‘‘(6) IMPORTERS.—

‘‘(A) IN GENERAL.—The order shall provide that each 

importer of imported dairy products shall pay an assessment to the Board in the manner prescribed by the order. 

‘‘(B) TIME FOR PAYMENT.—The assessment on imported 

dairy products shall be paid by the importer to Customs at 

the time the entry documents are filed with Customs. Customs shall remit the assessments to the Board. For purposes of this subparagraph, the term ‘importer’ includes 

persons who hold title to foreign-produced dairy products 

immediately upon release by Customs, as well as persons 

who act on behalf of others, as agents, brokers, or consignees, to secure the release of dairy products from Customs. 

‘‘(C) USE OF ASSESSMENTS ON IMPORTED DAIRY PRODUCTS.—Assessments collected on imported dairy products 

shall not be used for foreign market promotion.’’. 

(e) RECORDS.—Section 113(k) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(k)) is amended in the first sentence 

78

by striking ‘‘person receiving’’ and inserting ‘‘importer of imported 

dairy products, each person receiving’’. (f) IMPORTER ELIGIBILITY TO VOTE IN REFERENDUM.—Section 

116(b) of the Dairy Promotion Stabilization Act of 1983 (7 U.S.C. 

4507(b)) is amended— (1) in the first sentence— (A) by inserting after ‘‘of producers’’ the following: ‘‘and 

importers’’; and 

(B) by inserting after ‘‘the producers’’ the following: ‘‘and importers’’; and 

(2) in the second sentence, by inserting after ‘‘commercial 

use’’ the following: ‘‘and importers voting in the referendum 

(who have been engaged in the importation of dairy products 

during the same representative period, as determined by the 

Secretary)’’. (g) ORDER IMPLEMENTATION AND INTERNATIONAL TRADE OBLI- GATIONS.—Section 112 of the Dairy Promotion Stabilization Act of 

1983 (7 U.S.C. 4503) is amended by adding at the end the following: ‘‘(d) ORDER IMPLEMENTATION AND INTERNATIONAL TRADE OBLI- GATIONS.—The Secretary, in consultation with the United States 

Trade Representative, shall ensure that the order is implemented in 

a manner consistent with the international trade obligations of the 

Federal Government.’’. (h) CONFORMING AMENDMENTS TO REFLECT ADDITION OF IM- PORTERS.—The Dairy Production Stabilization Act of 1983 is 

amended—

(1) in section 110(b) (7 U.S.C. 4501(b))— (A) in the first sentence— (i) by inserting after ‘‘commercial use’’ the following: ‘‘and on imported dairy products’’; and 

(ii) by striking ‘‘products produced in the United 

States.’’ and inserting ‘‘products.’’; and 

(B) in the second sentence, by inserting after ‘‘produce 

milk’’ the following: ‘‘or the right of any person to import 

dairy products’’; and 

(2) in section 111(d) (7 U.S.C. 4502(d)), by striking ‘‘produced in the United States’’.

SEC. 1506. FLUID MILK PROMOTION. 

(a) DEFINITION OF FLUID MILK PRODUCT.—Section 1999C of the 

Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402) is amended by 

striking paragraph (3) and inserting the following: 

‘‘(3) FLUID MILK PRODUCT.—The term ‘fluid milk product’

has the meaning given the term in—

‘‘(A) section 1000.15 of title 7, Code of Federal Regulations, subject to such amendments as may be made by the 

Secretary; or 

‘‘(B) any successor regulation.’’. 

(b) DEFINITION OF FLUID MILK PROCESSOR.—Section 1999C(4) 

of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402(4)) is 

amended by striking ‘‘500,000 pounds of fluid milk products in consumer-type packages per month’’ and inserting ‘‘3,000,000 pounds of 

fluid milk products in consumer-type packages per month (excluding products delivered directly to the place of residence of a consumer)’’. 

79

(c) ELIMINATION OF ORDER TERMINATION DATE.—Section 

1999O of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6414) is 

amended—

(1) by striking subsection (a); and 

(2) by redesignating subsections (b) and (c) as subsections 

(a) and (b), respectively. 

SEC. 1507. STUDY OF NATIONAL DAIRY POLICY. 

(a) STUDY REQUIRED.—The Secretary of Agriculture shall conduct a comprehensive economic evaluation of the potential direct 

and indirect effects of the various elements of the national dairy policy, including an examination of the effect of the national dairy policy on— (1) farm price stability, farm profitability and viability, 

and local rural economies in the United States;

(2) child, senior, and low-income nutrition programs, including impacts on schools and institutions participating in the 

programs, on program recipients, and other factors; and 

(3) the wholesale and retail cost of fluid milk, dairy farms, 

and milk utilization. 

(b) REPORT.—Not later than 1 year after the date of enactment 

of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing 

the results of the study required by this section. 

(c) NATIONAL DAIRY POLICY DEFINED.—In this section, the term ‘‘national dairy policy’’ means the dairy policy of the United States 

as evidenced by the following policies and programs: 

(1) Federal milk marketing orders issued under section 8c 

of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted 

with amendments by the Agricultural Marketing Act of 1937. 

(2) Interstate dairy compacts (including proposed compacts 

described in H.R. 1827 and S. 1157, as introduced in the 107th 

Congress). 

(3) Over-order premiums and State pricing programs. 

(4) Direct payments to milk producers. 

(5) Federal milk price support program established under 

section 1401. 

(6) Export programs regarding milk and dairy products, 

such as the dairy export incentive program established under 

section 153 of the Food Security Act of 1985 (15 U.S.C. 713a– 14). 

SEC. 1508. STUDIES OF EFFECTS OF CHANGES IN APPROACH TO NATIONAL DAIRY POLICY AND FLUID MILK IDENTITY STANDARDS. 

(a) FEDERAL DAIRY POLICY CHANGES.—The Secretary of Agriculture shall conduct a study of the effects of—

(1) terminating all Federal programs relating to price support and supply management for milk; and 

(2) granting the consent of Congress to cooperative efforts 

by States to manage milk prices and supply. 

(b) FLUID MILK IDENTITY STANDARDS.—The Secretary shall 

conduct a study of the effects of including in the standard of identity for fluid milk a required minimum protein content that is commensurate with the average nonfat solids content of bovine milk 

produced in the United States. 

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(c) REPORTS.—Not later than 1 year after the date of enactment 

of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing 

the results of the studies required by this section.

Subtitle F—Administration 

SEC. 1601. ADMINISTRATION GENERALLY. 

(a) USE OF COMMODITY CREDIT CORPORATION.—The Secretary 

shall use the funds, facilities, and authorities of the Commodity 

Credit Corporation to carry out this title. 

(b) DETERMINATIONS BY SECRETARY.—A determination made by 

the Secretary under this title shall be final and conclusive. 

(c) REGULATIONS.—

(1) IN GENERAL.—Not later than 90 days after the date of 

the enactment of this Act, the Secretary and the Commodity 

Credit Corporation, as appropriate, shall promulgate such regulations as are necessary to implement this title. 

(2) PROCEDURE.—The promulgation of the regulations and 

administration of this title shall be made without regard to—

(A) chapter 35 of title 44, United States Code (commonly know as the ‘‘Paperwork Reduction Act’’); 

(B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and 

(C) the notice and comment provisions of section 553 of 

title 5, United States Code. 

(3) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING.—In 

carrying out this subsection, the Secretary shall use the authority provided under section 808 of title 5, United States Code. 

(d) TREATMENT OF ADVANCE PAYMENT OPTION.—The protection 

that was afforded producers that had an option to elect to accelerate 

the receipt of any payment under a production flexibility contract 

payable under the Federal Agriculture Improvement and Reform 

Act of 1996, as provided by section 525 of Public 106–170 (113 Stat. 

1928; 7 U.S.C. 7212 note), shall also apply to the option to receive—

(1) the advance payment of direct payments and counter-cyclical payments under subtitle A and subtitle C; and 

(2) the single payment of compensation for eligible peanut 

quota holders under section 1310.

(e) ADJUSTMENT AUTHORITY RELATED TO URUGUAY ROUND

COMPLIANCE.—

(1) REQUIRED DETERMINATION; ADJUSTMENT.—If the Secretary determines that expenditures under subtitles A through 

E that are subject to the total allowable domestic support levels 

under the Uruguay Round Agreements (as defined in section 2 

of the Uruguay Round Agreements Act (19 U.S.C. 3501)), as in 

effect on the date of enactment of this Act, will exceed such allowable levels for any applicable reporting period, the Secretary 

shall, to the maximum extent practicable, make adjustments in 

the amount of such expenditures during that period to ensure 

that such expenditures do not exceed such allowable levels. 

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(2) CONGRESSIONAL NOTIFICATION.—Before making any adjustment under paragraph (1), the Secretary shall submit to the 

Committee on Agriculture, Nutrition, and Forestry of the Senate 

and the Committee on Agriculture of the House of Representatives a report describing the determination made under that 

paragraph and the extent of the adjustment to be made. 

SEC. 1602. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY. 

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

provisions of the Agricultural Adjustment Act of 1938 shall not be 

applicable to the 2002 through 2007 crops of covered commodities, 

peanuts, and sugar and shall not be applicable to milk during the 

period beginning on the date of enactment of this Act through December 31, 2007: 

(1) Parts II through V of subtitle B of title III (7 U.S.C. 

1326–1351). 

(2) In the case of upland cotton, section 377 (7 U.S.C. 

1377). 

(3) Subtitle D of title III (7 U.S.C. 1379a–1379j). 

(4) Title IV (7 U.S.C. 1401–1407). 

(b) AGRICULTURAL ACT OF 1949.—The following provisions of 

the Agricultural Act of 1949 shall not be applicable to the 2002 

through 2007 crops of covered commodities, peanuts, and sugar and 

shall not be applicable to milk during the period beginning on the 

date of enactment of this Act and through December 31, 2007: 

(1) Section 101 (7 U.S.C. 1441). 

(2) Section 103(a) (7 U.S.C. 1444(a)). 

(3) Section 105 (7 U.S.C. 1444b). 

(4) Section 107 (7 U.S.C. 1445a). 

(5) Section 110 (7 U.S.C. 1445e). 

(6) Section 112 (7 U.S.C. 1445g). 

(7) Section 115 (7 U.S.C. 1445k). 

(8) Section 201 (7 U.S.C. 1446). 

(9) Title III (7 U.S.C. 1447–1449). 

(10) Title IV (7 U.S.C. 1421–1433d), other than sections 

404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431). 

(11) Title V (7 U.S.C. 1461–1469). 

(12) Title VI (7 U.S.C. 1471–1471j). 

(c) SUSPENSION OF CERTAIN QUOTA PROVISIONS.—The joint resolution entitled ‘‘A joint resolution relating to corn and wheat marketing quotas under the Agricultural Adjustment Act of 1938, as 

amended’’, approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall 

not be applicable to the crops of wheat planted for harvest in the 

calendar years 2002 through 2007. 

(d) CONFORMING AMENDMENT.—Section 171(a)(1) of the Federal 

Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 

7301(a)(1)) is amended by striking ‘‘2002’’ the first place appears 

and inserting ‘‘2001’’. 

SEC. 1603. PAYMENT LIMITATIONS. 

(a) LIMITATION ON AMOUNTS RECEIVED.—Section 1001 of the 

Food Security Act of 1985 (7 U.S.C. 1308) is amended by striking 

the section heading, ‘‘SEC. 1001.’’, and all that follows through the 

end of paragraph (4) and inserting the following: 

‘‘SEC. 1001. PAYMENT LIMITATIONS. 

‘‘(a) DEFINITIONS.—In this section: 

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‘‘(1) COVERED COMMODITY.—The term ‘covered commodity’

has the meaning given that term in section 1001 of the Farm 

Security and Rural Investment Act of 2002. 

‘‘(2) LOAN COMMODITY.—The term ‘loan commodity’ has the 

meaning given that term in section 1001 of the Farm Security 

and Rural Investment Act of 2002, except that the term does not 

include wool, mohair, or honey. 

‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Agriculture. 

‘‘(b) LIMITATION ON DIRECT PAYMENTS.—

‘‘(1) COVERED COMMODITIES.—The total amount of direct 

payments made to a person during any crop year under subtitle 

A of title I of the Farm Security and Rural Investment Act of 

2002 for 1 or more covered commodities may not exceed 

$40,000. 

‘‘(2) PEANUTS.—The total amount of direct payments made 

to a person during any crop year under subtitle C of title I of 

the Farm Security and Rural Investment Act of 2002 may not 

exceed $40,000. 

‘‘(c) LIMITATION ON COUNTER-CYCLICAL PAYMENTS.—

‘‘(1) COVERED COMMODITIES.—The total amount of countercyclical payments made to a person during any crop year under 

subtitle A of title I of the Farm Security and Rural Investment 

Act of 2002 for 1 or more covered commodities may not exceed 

$65,000. 

‘‘(2) PEANUTS.—The total amount of counter-cyclical payments made to a person during any crop year under subtitle C 

of title I of the Farm Security and Rural Investment Act of 2002 

may not exceed $65,000. 

‘‘(d) LIMITATION ON MARKETING LOAN GAINS AND LOAN DEFICIENCY PAYMENTS.—

‘‘(1) LOAN COMMODITIES.—The total amount of the following gains and payments that a person may receive during 

any crop year may not exceed $75,000: 

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

marketing assistance loan for 1 or more loan commodities 

under subtitle B of title I of the Farm Security and Rural 

Investment Act of 2002 at a lower level than the original 

loan rate established for the loan commodity under that 

subtitle. 

‘‘(B) Any loan deficiency payments received for 1 or 

more loan commodities under that subtitle. 

‘‘(2) OTHER COMMODITIES.—The total amount of the following gains and payments that a person may receive during 

any crop year may not exceed $75,000: 

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

marketing assistance loan for peanuts, wool, mohair, or 

honey under subtitle B or C of title I of the Farm Security 

and Rural Investment Act of 2002 at a lower level than the 

original loan rate established for the commodity under 

those subtitles. 

‘‘(B) Any loan deficiency payments received for peanuts, 

wool, mohair, and honey under those subtitles.’’. 

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(b) CLERICAL AND CONFORMING AMENDMENTS TO SECTION

1001.—Section 1001 of the Food Security Act of 1985 (7 U.S.C. 

1308) is amended— (1) in paragraph (5)— (A) by striking ‘‘(5)’’ and inserting ‘‘(e) DEFINITION OF

PERSON.—’’

(B) by redesignating subparagraphs (A) through (E) as 

paragraphs (1) through (5), respectively; 

(C) in paragraph (1), as so redesignated— (i) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively; and 

(ii) by striking the second sentence; and 

(D) in paragraph (2), as so redesignated— (i) by redesignating clause (i) as subparagraph (A) 

and, in such subparagraph (as so redesignated)— (I) by striking ‘‘subparagraph (A), subject to 

clause (ii)’’ and inserting ‘‘paragraph (1), subject to 

subparagraph (B)’’; and 

(II) by redesignating subclauses (I), (II), and 

(III), as clauses (i), (ii), and (iii), respectively; 

(ii) by redesignating clause (ii) as subparagraph 

(B) and, in such subparagraph (as so redesignated), by 

redesignating subclauses (I), (II), and (III), as clauses 

(i), (ii), and (iii), respectively; and 

(iii) by redesignating clause (iii) as subparagraph 

(C) and, in such subparagraph (as so redesignated)— (I) by striking ‘‘as described in paragraphs (1) 

and (2)’’ and inserting ‘‘as described in subsections 

(b), (c), and (d)’’; and 

(II) by redesignating subclauses (I) and (II) as 

clauses (i) and (ii), respectively; 

(2) in paragraph (6), by striking ‘‘(6)’’ and inserting ‘‘(f) 

PUBLIC SCHOOLS.—’’; and 

(3) in paragraph (7), by striking ‘‘(7)’’ and inserting ‘‘(g) 

TIME LIMITS; RELIANCE.—’’. (c) CONFORMING AMENDMENTS TO OTHER LAWS.— (1) Section 1001A of the Food Security Act of 1985 (7 

U.S.C. 1308–1) is amended— (A) in subsections (a)(1) and (b)(2)(B), by striking ‘‘section 1001(5)(B)(i)(II)’’ and inserting ‘‘section 

1001(e)(2)(A)(ii)’’; and 

(B) in subsections (a)(1) and (b)(1), by striking ‘‘section 

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

(2) Section 1001B of the Food Security Act of 1985 (7 

U.S.C. 1308–2) is amended by striking ‘‘as described in paragraphs (1) and (2)’’ and inserting ‘‘as described in subsections 

(b), (c), and (d)’’. (3) Section 1001C(a) of the Food Security Act of 1985 (7 

U.S.C. 1308–3(a)) is amended by inserting ‘‘title I of the Farm 

Security and Rural Investment Act of 2002,’’ after ‘‘made available under’’. 

(d) TRANSITION.—Section 1001 of the Food Security Act of 1985 

(7 U.S.C. 1308), as in effect on the day before the date of the enactment of this Act, shall continue to apply with respect to the 2001 

crop of any covered commodity.

84

SEC. 1604. ADJUSTED GROSS INCOME LIMITATION. 

The Food Security Act of 1985 is amended— (1) by redesignating section 1001D (7 U.S.C. 1308–4) and 

section 1001E (7 U.S.C. 1308–5) as sections 1001E and 1001F, 

respectively; and 

(2) by inserting after section 1001C (7 U.S.C. 1308–3) the 

following: 

‘‘SEC. 1001D. ADJUSTED GROSS INCOME LIMITATION. 

‘‘(a) DEFINITION OF AVERAGE ADJUSTED GROSS INCOME.— ‘‘(1) IN GENERAL.—In this section, the term ‘average adjusted gross income’, with respect to an individual or entity (for 

purposes of this section, as defined in section 1001(e)(2)(A)(ii)), 

means the 3-year average of the adjusted gross income or comparable measure of the individual or entity over the 3 preceding 

tax years, as determined by the Secretary. ‘‘(2) SPECIAL RULES FOR CERTAIN INDIVIDUALS AND ENTI- TIES.—In the case of an entity that is not required to file a Federal income tax return or an individual or entity that did not 

have taxable income in 1 or more of the tax years used to determine the average under paragraph (1), the Secretary shall provide, by regulation, a method for determining the average adjusted gross income of the individual or entity for purposes of 

this section. 

‘‘(b) LIMITATION.— ‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

law, an individual or entity shall not be eligible to receive any 

benefit described in paragraph (2) during a crop year if the average adjusted gross income of the individual or entity exceeds 

$2,500,000, unless not less than 75 percent of the average adjusted gross income of the individual or entity is derived from 

farming, ranching, or forestry operations, as determined by the 

Secretary. ‘‘(2) COVERED BENEFITS.—Paragraph (1) applies with respect to the following: 

‘‘(A) A direct payment or counter-cyclical payment 

under subtitle A or C of title I of the Farm Security and 

Rural Investment Act of 2002. 

‘‘(B) A marketing loan gain or payment described in 

section 1001(d) of this Act. 

‘‘(C) A payment under any program under title XII of 

this Act or title II of the Farm Security and Rural Investment Act of 2002. 

‘‘(c) CERTIFICATION.—To comply with the limitation under subsection (b), an individual or entity shall provide to the Secretary—

‘‘(1) a certification by a certified public accountant or another third party that is acceptable to the Secretary that the average adjusted gross income of the individual or entity does not 

exceed the limitation specified in that subsection; or 

‘‘(2) information and documentation regarding the adjusted 

gross income of the individual or entity through other procedures established by the Secretary. 

‘‘(d) COMMENSURATE REDUCTION.—In the case of a benefit described in subsection (b)(2) made in a crop year to an entity, general 

partnership, or joint venture, the amount of the benefit shall be reduced by an amount that is commensurate with the direct and indiVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00088 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
85

rect ownership interest in the entity, general partnership, or joint 

venture of each individual who has an average adjusted gross income in excess of the limitation specified in subsection (b) for the average of the 3 preceding crop years. 

‘‘(e) EFFECTIVE PERIOD.—This section shall apply only during 

the 2003 through 2007 crop years.’’.

SEC. 1605. COMMISSION ON APPLICATION OF PAYMENT LIMITATIONS. 

(a) ESTABLISHMENT.—There is established a commission to be 

known as the ‘‘Commission on the Application of Payment Limitations for Agriculture’’ (referred to in this section as the ‘‘Commission’’). 

(b) DUTIES.—The Commission shall conduct a study on the potential impacts of further payment limitations on the receipt of direct payments, counter-cyclical payments, and marketing loan gains 

and loan deficiency payments on—

(1) farm income; 

(2) land values; 

(3) rural communities; 

(4) agribusiness infrastructure; 

(5) planting decisions of producers affected; and 

(6) supply and prices of covered commodities, loan commodities, specialty crops (including fruits and vegetables), and 

other agricultural commodities. 

(c) MEMBERSHIP.—

(1) COMPOSITION.—The Commission shall be composed of 

10 members as follows: 

(A) 3 members appointed by the Secretary. 

(B) 3 members appointed by the Committee on Agriculture, Nutrition, and Forestry of the Senate. 

(C) 3 members appointed by the Committee on Agriculture of the House of Representatives. 

(D) The Chief Economist of the Department of Agriculture. 

(2) FEDERAL GOVERNMENT EMPLOYMENT.—The membership 

of the Commission may include 1 or more employees of the Department of Agriculture or other Federal agencies. 

(3) DATE OF APPOINTMENTS.—The appointment of a member of the Commission shall be made not later than 60 days 

after the date of enactment of this Act. 

(4) TERM; VACANCIES.—

(A) TERM.—A member shall be appointed for the life of 

the Commission. 

(B) VACANCIES.—A vacancy on the Commission—

(i) shall not affect the powers of the Commission; 

and 

(ii) shall be filled in the same manner as the original appointment was made. 

(5) INITIAL MEETING.—Not later than 30 days after the date 

on which all members of the Commission have been appointed, 

the Commission shall hold the initial meeting of the Commission. 

(d) QUORUM.—A majority of the members of the Commission 

shall constitute a quorum for the transaction of business, but a lesser number of members may hold hearings. 

86

(e) CHAIRPERSON.—The Secretary shall appoint 1 of the members of the Commission to serve as Chairperson of the Commission. 

(f) REPORT.—Not later than 1 year after the date of enactment 

of this Act, the Commission shall submit to the President, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report 

containing the results of the study required by subsection (b), including such recommendations as the Commission considers appropriate. 

(g) HEARINGS.—The Commission may hold such hearings, meet 

and act at such times and places, take such testimony, and receive 

such evidence as the Commission considers advisable to carry out 

this section. 

(h) INFORMATION FROM FEDERAL AGENCIES.—The Commission 

may secure directly from a Federal agency such information as the 

Commission considers necessary to carry out this section. On request of the Chairperson of the Commission, the head of the agency 

shall provide the information to the Commission. 

(i) POSTAL SERVICES.—The Commission may use the United 

States mails in the same manner and under the same conditions as 

other agencies of the Federal Government. 

(j) ASSISTANCE FROM SECRETARY.—The Secretary may provide 

to the Commission appropriate office space and such reasonable administrative and support services as the Commission may request. 

(k) COMPENSATION OF MEMBERS.—

(1) NON-FEDERAL EMPLOYEES.—A member of the Commission who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of 

the Executive Schedule under section 5315 of title 5, United 

States Code, for each day (including travel time) during which 

the member is engaged in the performance of the duties of the 

Commission. 

(2) FEDERAL EMPLOYEES.—A member of the Commission 

who is an officer or employee of the Federal Government shall 

serve without compensation in addition to the compensation received for the services of the member as an officer or employee 

of the Federal Government. 

(3) TRAVEL EXPENSES.—A member of the Commission shall 

be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for an employee of an agency under 

subchapter I of chapter 57 of title 5, United States Code, while 

away from the home or regular place of business of the member 

in the performance of the duties of the Commission. 

(l) FEDERAL ADVISORY COMMITTEE ACT.—The Federal Advisory 

Committee Act (5 U.S.C. App.) shall not apply to the Commission 

or any proceeding of the Commission.

SEC. 1606. ADJUSTMENTS OF LOANS. 

Section 162(b) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7282(b)) is amended by striking ‘‘this 

title’’ and inserting ‘‘this title and title I of the Farm Security and 

Rural Investment Act of 2002’’. 

87

SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES. 

Section 164 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7284) is amended by striking ‘‘this title’’

each place it appears and inserting ‘‘this title and title I of the Farm 

Security and Rural Investment Act of 2002’’.

SEC. 1608. EXTENSION OF EXISTING ADMINISTRATIVE AUTHORITY REGARDING LOANS. 

Section 166 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286) is amended—

(1) in subsection (a), by striking ‘‘subtitle C’’ and inserting 

‘‘subtitle C of this title and subtitle B and C of title I of the 

Farm Security and Rural Investment Act of 2002’’; and 

(2) in subsection (c)(1), by striking ‘‘subtitle C’’ and inserting ‘‘subtitle C of this title and subtitle B and C of title I of the 

Farm Security and Rural Investment Act of 2002’’. 

SEC. 1609. COMMODITY CREDIT CORPORATION INVENTORY. 

Section 5 of the Commodity Credit Corporation Charter Act (15 

U.S.C. 714c) is amended in the last sentence by inserting before the 

period at the end the following: ‘‘(including, at the option of the Corporation, the use of private sector entities)’’. 

SEC. 1610. RESERVE STOCK LEVEL. 

Section 301(b)(14)(C) of the Agricultural Adjustment Act of 

1938 (7 U.S.C. 1301(b)(14)(C)) is amended—

(1) in clause (i), by striking ‘‘100,000,000’’ and inserting 

‘‘60,000,000’’; and 

(2) in clause (ii), by striking ‘‘15 percent’’ and inserting ‘‘10 

percent’’. 

SEC. 1611. FARM RECONSTITUTIONS. 

(a) IN GENERAL.—Section 316(a)(1)(A)(ii) of the Agricultural 

Adjustment Act of 1938 (7 U.S.C. 1314b(a)(1)(A)(ii)) is amended by 

adding at the end the following: ‘‘Notwithstanding any other provision of law, for the 2002 crop only, the Secretary shall allow special 

farm reconstitutions, in lieu of lease and transfer of allotments and 

quotas, under this section, in accordance with such conditions as 

are established by the Secretary.’’. 

(b) STUDY.—

(1) IN GENERAL.—The Secretary shall conduct a study on 

the effects on the limitation on producers to move quota to a 

farm other than the farm to which the quota was initially assigned under part I of subtitle B of title III of the Agricultural 

Adjustment Act of 1938 (7 U.S.C. 1311 et seq.). 

(2) REPORT.—Not later than 90 days after the date of enactment of this Act, the Secretary shall submit to the Committee 

on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a 

report on the results of the study.

SEC. 1612. ASSIGNMENT OF PAYMENTS. 

The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)), relating to assignment of 

payments, shall apply to payments made under the authority of this 

Act. The producer making the assignment, or the assignee, shall 

provide the Secretary with notice, in such manner as the Secretary 

may require, of any assignment made under this section.

88

SEC. 1613. EQUITABLE RELIEF FROM INELIGIBILITY FOR LOANS, PAYMENTS, OR OTHER BENEFITS. 

(a) DEFINITIONS.—In this section:

(1) AGRICULTURAL COMMODITY.—The term ‘‘agricultural 

commodity’’ means any agricultural commodity, food, feed, 

fiber, or livestock that is subject to a covered program. 

(2) COVERED PROGRAM.—

(A) IN GENERAL.—The term ‘‘covered program’’

means—

(i) a program administered by the Secretary under 

which price or income support, or production or market 

loss assistance, is provided to producers of agricultural 

commodities; and 

(ii) a conservation program administered by the 

Secretary. 

(B) EXCLUSIONS.—The term ‘‘covered program’’ does 

not include—

(i) an agricultural credit program carried out 

under the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1921 et seq.); or 

(ii) the crop insurance program carried out under 

the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.). 

(3) PARTICIPANT.—The term ‘‘participant’’ means a participant in a covered program. 

(4) STATE CONSERVATIONIST.—The term ‘‘State Conservationist’’ means the State Conservationist with respect to a program administered by the Natural Resources Conservation 

Service. 

(5) STATE DIRECTOR.—The term ‘‘State Director’’ means the 

State Executive Director of the Farm Service Agency with respect to a program administered by the Farm Service Agency. 

(b) EQUITABLE RELIEF.—The Secretary may provide relief to 

any participant that is determined to be not in compliance with the 

requirements of a covered program, and therefore ineligible for a 

loan, payment, or other benefit under the covered program, if the 

participant—

(1) acting in good faith, relied on the action or advice of the 

Secretary (including any authorized representative of the Secretary) to the detriment of the participant; or 

(2) failed to comply fully with the requirements of the covered program, but made a good faith effort to comply with the 

requirements. 

(c) FORMS OF RELIEF.—The Secretary may authorize a participant in a covered program to—

(1) retain loans, payments, or other benefits received under 

the covered program; 

(2) continue to receive loans, payments, and other benefits 

under the covered program; 

(3) continue to participate, in whole or in part, under any 

contract executed under the covered program; 

(4) in the case of a conservation program, reenroll all or 

part of the land covered by the program; and 

(5) receive such other equitable relief as the Secretary determines to be appropriate. 

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(d) REMEDIAL ACTION.—As a condition of receiving relief under 

this section, the Secretary may require the participant to take actions designed to remedy any failure to comply with the covered program. 

(e) EQUITABLE RELIEF BY STATE DIRECTORS AND STATE CON- SERVATIONISTS.— (1) IN GENERAL.—A State Director, in the case of programs 

administered by the State Director, and the State Conservationist, in the case of programs administered by the State Conservationist, may grant relief to a participant in accordance 

with subsections (b) through (d) if— (A) the amount of loans, payments, and benefits for 

which relief will be provided to the participant under this 

subsection is less than $20,000; 

(B) the total amount of loans, payments, and benefits 

for which relief has been previously provided to the participant under this subsection is not more than $5,000; and 

(C) the total amount of loans, payments, and benefits 

for which relief is provided to similarly situated participants under this subsection is not more than $1,000,000, as 

determined by the Secretary. 

(2) CONSULTATION, APPROVAL, AND REVERSAL.—The decision by a State Director or State Conservationist to grant relief 

under this subsection— (A) shall not require prior approval by the Administrator of the Farm Service Agency, the Chief of the Natural 

Resources Conservation Service, or any other officer or employee of the Agency or Service; 

(B) shall be made only after consultation with, and the 

approval of, the Office of General Counsel of the Department of Agriculture; and 

(C) is subject to reversal only by the Secretary (who 

may not delegate the reversal authority). 

(3) NONAPPLICABILITY.—The authority of a State Director 

or State Conservationist under this subsection does not apply to 

the administration of—

(A) payment limitations under—

(i) sections 1001 through 1001F of the Food Security Act of 1985 (7 U.S.C. 1308 et seq.); or 

(ii) a conservation program administered by the 

Secretary. 

(B) highly erodible land and wetland conservation requirements under subtitle B or C of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.). 

(4) OTHER AUTHORITY.—The authority provided to a State 

Director and State Conservationist under this subsection is in 

addition to any other applicable authority and does not limit 

other authority provided by law or the Secretary. 

(f) JUDICIAL REVIEW.—A discretionary decision by the Secretary, the State Director, or the State Conservationist under this 

section shall be final, and shall not be subject to review under chapter 7 of title 5, United States Code. 

(g) REPORTS.—Not later than February 1 of each year, the Secretary shall submit to the Committee on Agriculture of the House of 

Representatives and the Committee on Agriculture, Nutrition, and 

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Forestry of the Senate a report that describes for the previous calendar year—

(1) the number of requests for equitable relief under subsections (b) and (e) and the disposition of the requests; and 

(2) the number of requests for equitable relief under section 

278(d) of the Department of Agriculture Reorganization Act of 

1994 (7 U.S.C. 6998(d)) and the disposition of the requests. 

(h) RELATIONSHIP TO OTHER LAW.—The authority provided in 

this section is in addition to any other authority provided in this 

or any other Act. 

(i) FINALITY RULE.—Section 281(a) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 7001(a)) is amended—

(1) by striking ‘‘Consolidated Farm Service Agency’’ each 

place it appears and inserting ‘‘Farm Service Agency’’; 

(2) in paragraph (1)—

(A) by striking ‘‘This subsection’’ and inserting the following: 

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

(B), this subsection’’; and 

(B) by adding at the end the following: 

‘‘(B) NONAPPLICABILITY.—This subsection does not 

apply to—

‘‘(i) a function performed under section 376 of the 

Consolidated Farm and Rural Development Act; or 

‘‘(ii) a function performed under a conservation 

program administered by the Natural Resources Conservation Service.’’; and 

(3) in paragraph (2), by inserting ‘‘, before the end of the 

90-day period,’’ after ‘‘unless the decision’’. 

(j) CONFORMING AMENDMENTS.—

(1) Section 326 of the Food and Agriculture Act of 1962 (7 

U.S.C. 1339a) is repealed. 

(2) Section 278(d) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6998(d)) is amended in the first 

sentence by striking ‘‘section 326 of the Food and Agriculture 

Act of 1962 (7 U.S.C. 1339a)’’ and inserting ‘‘section 1613 of the 

Farm Security and Rural Investment Act of 2002’’. 

(3) Section 1230A of the Food Security Act of 1985 (16 

U.S.C. 3830a) is repealed.

SEC. 1614. TRACKING OF BENEFITS. 

As soon as practicable after the date of enactment of this Act, 

the Secretary shall establish procedures to track the benefits provided, directly or indirectly, to individuals and entities under titles 

I and II and the amendments made by those titles. 

SEC. 1615. ESTIMATES OF NET FARM INCOME. 

In each issuance of projections of net farm income, the Secretary 

shall include (as determined by the Secretary)—

(1) an estimate of the net farm income earned by commercial producers in the United States; and 

(2) an estimate of the net farm income attributable to commercial producers of each of the following: 

(A) Livestock. 

(B) Loan commodities.

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(C) Agricultural commodities other than loan commodities. 

SEC. 1616. AVAILABILITY OF INCENTIVE PAYMENTS FOR CERTAIN PRODUCERS. 

(a) INCENTIVE PAYMENTS REQUIRED.—Subject to subsection (b), the Secretary shall make available a total of $20,000,000 of funds 

of the Commodity Credit Corporation during the 2003 through 2005 

crop years to provide incentive payments to producers of hard white 

wheat. 

(b) CONDITIONS ON IMPLEMENTATION.—The Secretary shall implement subsection (a)—

(1) only with regard to production that meets minimum 

quality criteria; and 

(2) on not more than 2,000,000 acres or the equivalent volume of production. 

(c) DEMAND FOR WHEAT.—To be eligible to obtain an incentive 

payment under subsection (a), a producer shall demonstrate to the 

satisfaction of the Secretary that buyers and end-users are available 

for the wheat to be covered by the incentive payment.

SEC. 1617. RENEWED AVAILABILITY OF MARKET LOSS ASSISTANCE 

AND CERTAIN EMERGENCY ASSISTANCE TO PERSONS 

THAT FAILED TO RECEIVE ASSISTANCE UNDER EARLIER 

AUTHORITIES. 

(a) AUTHORITY TO PROVIDE ASSISTANCE.—The Secretary of Agriculture may use such funds of the Commodity Credit Corporation 

as are necessary to provide market loss assistance and other emergency assistance under a provision of law specified in subsection (c) 

to persons that, as determined by the Secretary—

(1) were eligible to receive the assistance under the provision of law; but 

(2) did not receive the assistance before October 1, 2001. 

(b) LIMITATION.—The amount of assistance provided under a 

provision of law specified in subsection (c) and this section to a person shall not exceed the amount of assistance the person would have 

been eligible to receive under the provision had the claim of the producer under the provision been timely resolved. 

(c) COVERED MARKET LOSS ASSISTANCE AUTHORITIES.—The following provisions of law are covered by this section: 

(1) Sections 1, 2, 3, 4, and 5 of Public Law 107–25 (115 

Stat. 201). 

(2) Sections 805, 806, and 814 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2001 (as enacted into law by Public 

Law 106–387; 114 Stat. 1549). 

(3) Sections 201, 202, 204(a), 204(d), 257, and 259 of the 

Agricultural Risk Protection Act of 2000 (Public Law 106–224; 

7 U.S.C. 1421 note). 

(4) Sections 802, 803(a), 804, and 805 of the Agriculture, 

Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2000 (Public Law 106–78; 

113 Stat. 1135). 

(5) The livestock indemnity program under the heading 

‘‘COMMODITY CREDIT CORPORATION FUND’’ in chapter 1 of title 

I of the 1999 Emergency Supplemental Appropriations Act 

(Public 106–31; 113 Stat. 59). 

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(6) Section 1111(a) of the Agriculture, Rural Development, 

Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (as contained in section 101(a) of division 

A of Public Law 105–277; 112 Stat. 2681–44). 

SEC. 1618. PRODUCER RETENTION OF ERRONEOUSLY PAID LOAN DEFICIENCY PAYMENTS AND MARKETING LOAN GAINS. 

Notwithstanding any other provision of law, the Secretary and 

the Commodity Credit Corporation shall not require producers in 

Erie County, Pennsylvania, to repay loan deficiency payments and 

marketing loan gains erroneously paid or determined to have been 

earned by the Commodity Credit Corporation for certain 1998 and 

1999 crops under subtitle C of title I of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231 et seq.). In the 

case of a producer who has already made the repayment on or before the date of the enactment of this Act, the Commodity Credit 

Corporation shall reimburse the producer for the full amount of the 

repayment.

TITLE II—CONSERVATION

Subtitle A—Conservation Security

SEC. 2001. CONSERVATION SECURITY PROGRAM. 

(a) IN GENERAL.—Subtitle D of title XII of the Food Security 

Act of 1985 (16 U.S.C. 3830 et seq.) is amended by inserting after 

chapter 1 the following: 

‘‘CHAPTER 2—CONSERVATION SECURITY AND 

FARMLAND PROTECTION 

‘‘Subchapter A—Conservation Security Program 

‘‘SEC. 1238. DEFINITIONS. 

‘‘In this subchapter: 

‘‘(1) BASE PAYMENT.—The term ‘base payment’ means an 

amount that is—

‘‘(A) determined in accordance with the rate described 

in section 1238C(b)(1)(A); and 

‘‘(B) paid to a producer under a conservation security 

contract in accordance with clause (i) of subparagraph (C), 

(D), or (E) of section 1238C(b)(1), as appropriate. 

‘‘(2) BEGINNING FARMER OR RANCHER.—The term ‘beginning 

farmer or rancher’ has the meaning given the term under section 343(a) of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1991(a)). 

‘‘(3) CONSERVATION PRACTICE.—The term ‘conservation 

practice’ means a conservation farming practice described in 

section 1238A(d)(4) that—

‘‘(A) requires planning, implementation, management, 

and maintenance; and 

‘‘(B) promotes 1 or more of the purposes described in 

section 1238A(a). 

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‘‘(4) CONSERVATION SECURITY CONTRACT.—The term ‘conservation security contract’ means a contract described in section 1238A(e). ‘‘(5) CONSERVATION SECURITY PLAN.—The term ‘conservation security plan’ means a plan described in section 1238A(c). ‘‘(6) CONSERVATION SECURITY PROGRAM.—The term ‘conservation security program’ means the program established 

under section 1238A(a). ‘‘(7) ENHANCED PAYMENT.—The term ‘enhanced payment’ means the amount paid to a producer under a conservation security contract that is equal to the amount described in section 

1238C(b)(1)(C)(iii). ‘‘(8) NONDEGRADATION STANDARD.—The term ‘nondegradation standard’ means the level of measures required to adequately protect, and prevent degradation of, 1 or more natural 

resources, as determined by the Secretary in accordance with 

the quality criteria described in handbooks of the Natural Resources Conservation Service. ‘‘(9) PRODUCER.— ‘‘(A) IN GENERAL.—The term ‘producer’ means an 

owner, operator, landlord, tenant, or sharecropper that— ‘‘(i) shares in the risk of producing any crop or 

livestock; and ‘‘(ii) is entitled to share in the crop or livestock 

available for marketing from a farm (or would have 

shared had the crop or livestock been produced). 

‘‘(B) HYBRID SEED GROWERS.—In determining whether 

a grower of hybrid seed is a producer, the Secretary shall 

not take into consideration the existence of a hybrid seed 

contract. 

‘‘(10) RESOURCE-CONSERVING CROP ROTATION.—The term ‘resource-conserving crop rotation’ means a crop rotation that— ‘‘(A) includes at least 1 resource-conserving crop (as defined by the Secretary); 

‘‘(B) reduces erosion; 

‘‘(C) improves soil fertility and tilth; 

‘‘(D) interrupts pest cycles; and 

‘‘(E) in applicable areas, reduces depletion of soil moisture (or otherwise reduces the need for irrigation). 

‘‘(11) RESOURCE MANAGEMENT SYSTEM.—The term ‘resource 

management system’ means a system of conservation practices 

and management relating to land or water use that is designed 

to prevent resource degradation and permit sustained use of 

land, water, and other natural resources, as defined in accordance with the technical guide of the Natural Resources Conservation Service. 

‘‘(12) SECRETARY.—The term ‘Secretary’ means the Secretary of Agriculture, acting through the Chief of the Natural 

Resources Conservation Service. ‘‘(13) TIER I CONSERVATION SECURITY CONTRACT.—The term ‘Tier I conservation security contract’ means a contract described in section 1238A(d)(5)(A). ‘‘(14) TIER II CONSERVATION SECURITY CONTRACT.—The 

term ‘Tier II conservation security contract’ means a contract 

described in section 1238A(d)(5)(B). 

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‘‘(15) TIER III CONSERVATION SECURITY CONTRACT.—The 

term ‘Tier III conservation security contract’ means a contract 

described in section 1238A(d)(5)(C). 

‘‘SEC. 1238A. CONSERVATION SECURITY PROGRAM. 

‘‘(a) IN GENERAL.—The Secretary shall establish and, for each 

of fiscal years 2003 through 2007, carry out a conservation security 

program to assist producers of agricultural operations in promoting, 

as is applicable with respect to land to be enrolled in the program, 

conservation and improvement of the quality of soil, water, air, energy, plant and animal life, and any other conservation purposes, 

as determined by the Secretary. ‘‘(b) ELIGIBILITY.— ‘‘(1) ELIGIBLE PRODUCERS.—To be eligible to participate in 

the conservation security program (other than to receive technical assistance under section 1238C(g) for the development of 

conservation security contracts), a producer shall— ‘‘(A) develop and submit to the Secretary, and obtain 

the approval of the Secretary of, a conservation security 

plan that meets the requirements of subsection (c)(1); and ‘‘(B) enter into a conservation security contract with the 

Secretary to carry out the conservation security plan. 

‘‘(2) ELIGIBLE LAND.—Except as provided in paragraph (3), 

private agricultural land (including cropland, grassland, prairie land, improved pasture land, and rangeland), land under 

the jurisdiction of an Indian tribe (as defined by the Secretary), 

and forested land that is an incidental part of an agricultural 

operation shall be eligible for enrollment in the conservation security program. ‘‘(3) EXCLUSIONS.— ‘‘(A) CONSERVATION RESERVE PROGRAM.—Land enrolled in the conservation reserve program under subchapter B of chapter 1 shall not be eligible for enrollment 

in the conservation security program. ‘‘(B) WETLANDS RESERVE PROGRAM.—Land enrolled in 

the wetlands reserve program established under subchapter 

C of chapter 1 shall not be eligible for enrollment in the 

conservation security program. ‘‘(C) GRASSLAND RESERVE PROGRAM.—Land enrolled in 

the grassland reserve program established under subchapter C of chapter 2 shall not be eligible for enrollment 

in the conservation security program. 

‘‘(D) CONVERSION TO CROPLAND.—Land that is used for 

crop production after the date of enactment of this subchapter that had not been planted, considered to be planted, or devoted to crop production for at least 4 of the 6 

years preceding that date (except for land enrolled in the 

conservation reserve program under subchapter B of chapter 1) or that has been maintained using long-term crop rotation practices, as determined by the Secretary, shall not 

be the basis for any payment under the conservation security program. 

‘‘(4) ECONOMIC USES.—The Secretary shall permit a producer to implement, with respect to all eligible land covered by 

a conservation security plan, economic uses that—

‘‘(A) maintain the agricultural nature of the land; and 

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‘‘(B) are consistent with the natural resource and conservation objectives of the conservation security program. 

‘‘(c) CONSERVATION SECURITY PLANS.—

‘‘(1) IN GENERAL.—A conservation security plan shall—

‘‘(A) identify the designated land and resources to be 

conserved under the conservation security plan; 

‘‘(B) describe the tier of conservation security contract, 

and the particular conservation practices to be implemented, maintained, or improved, in accordance with subsection (d) on the land covered by the conservation security 

contract for the specified term; and 

‘‘(C) contain a schedule for the implementation, maintenance, or improvement of the conservation practices described in the conservation security plan during the term of 

the conservation security contract. 

‘‘(2) RESOURCE PLANNING.—The Secretary may assist producers that enter into conservation security contracts in developing a comprehensive, long-term strategy for improving and 

maintaining all natural resources of the agricultural operation 

of the producer. 

‘‘(d) CONSERVATION CONTRACTS AND PRACTICES.—

‘‘(1) IN GENERAL.—

‘‘(A) ESTABLISHMENT OF TIERS.—The Secretary shall 

establish, and offer to eligible producers, 3 tiers of conservation contracts under which a payment under this subchapter may be received. 

‘‘(B) ELIGIBLE CONSERVATION PRACTICES.—

‘‘(i) IN GENERAL.—The Secretary shall make eligible for payment under a conservation security contract 

land management, vegetative, and structural practices. 

‘‘(ii) DETERMINATION.—In determining the eligibility of a practice described in clause (i), the Secretary 

shall require, to the maximum extent practicable, that 

the lowest cost alternatives be used to fulfill the purposes of the conservation security plan, as determined 

by the Secretary. 

‘‘(2) ON-FARM RESEARCH AND DEMONSTRATION OR PILOT

TESTING.—With respect to land enrolled in the conservation security program, the Secretary may approve a conservation security plan that includes—

‘‘(A) on-farm conservation research and demonstration 

activities; and 

‘‘(B) pilot testing of new technologies or innovative conservation practices. 

‘‘(3) USE OF HANDBOOK AND GUIDES; STATE AND LOCAL CONSERVATION CONCERNS.—

‘‘(A) USE OF HANDBOOK AND GUIDES.—In determining 

eligible conservation practices and the criteria for implementing or maintaining the conservation practices under 

the conservation security program, the Secretary shall use 

the National Handbook of Conservation Practices of the 

Natural Resources Conservation Service. 

‘‘(B) STATE AND LOCAL CONSERVATION PRIORITIES.—

The conservation priorities of a State or locality in which 

96

an agricultural operation is situated shall be determined by 

the State Conservationist, in consultation with—

‘‘(i) the State technical committee established 

under subtitle G; and 

‘‘(ii) local agricultural producers and conservation 

working groups. 

‘‘(4) CONSERVATION PRACTICES.—Conservation practices 

that may be implemented by a producer under a conservation 

security contract (as appropriate for the agricultural operation 

of a producer) include—

‘‘(A) nutrient management; 

‘‘(B) integrated pest management; 

‘‘(C) water conservation (including through irrigation) 

and water quality management; 

‘‘(D) grazing, pasture, and rangeland management; 

‘‘(E) soil conservation, quality, and residue management; 

‘‘(F) invasive species management; 

‘‘(G) fish and wildlife habitat conservation, restoration, 

and management; 

‘‘(H) air quality management; 

‘‘(I) energy conservation measures; 

‘‘(J) biological resource conservation and regeneration; 

‘‘(K) contour farming; 

‘‘(L) strip cropping; 

‘‘(M) cover cropping; 

‘‘(N) controlled rotational grazing; 

‘‘(O) resource-conserving crop rotation; 

‘‘(P) conversion of portions of cropland from a soil-depleting use to a soil-conserving use, including production of 

cover crops; 

‘‘(Q) partial field conservation practices; 

‘‘(R) native grassland and prairie protection and restoration; and 

‘‘(S) any other conservation practices that the Secretary 

determines to be appropriate and comparable to other conservation practices described in this paragraph. 

‘‘(5) TIERS.—Subject to paragraph (6), to carry out this subsection, the Secretary shall establish the following 3 tiers of conservation contracts: 

‘‘(A) TIER I CONSERVATION SECURITY CONTRACTS.—A 

conservation security plan for land enrolled under a Tier I 

conservation security contract shall—

‘‘(i) be for a period of 5 years; and 

‘‘(ii) include conservation practices appropriate for 

the agricultural operation, that, at a minimum (as determined by the Secretary)—

‘‘(I) address at least 1 significant resource of 

concern for the enrolled portion of the agricultural

operation at a level that meets the appropriate 

nondegradation standard; and 

‘‘(II) cover active management of conservation 

practices that are implemented or maintained 

under the conservation security contract. 

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‘‘(B) TIER II CONSERVATION SECURITY CONTRACTS.—A 

conservation security plan for land enrolled under a Tier II 

conservation security contract shall—

‘‘(i) be for a period of not less than 5 nor more than 

10 years, as determined by the producer; 

‘‘(ii) include conservation practices appropriate for 

the agricultural operation, that, at a minimum—

‘‘(I) address at least 1 significant resource of 

concern for the entire agricultural operation, as determined by the Secretary, at a level that meets the 

appropriate nondegradation standard; and 

‘‘(II) cover active management of conservation 

practices that are implemented or maintained 

under the conservation security contract. 

‘‘(C) TIER III CONSERVATION SECURITY CONTRACTS.—A 

conservation security plan for land enrolled under a Tier 

III conservation security contract shall—

‘‘(i) be for a period of not less than 5 nor more than 

10 years, as determined by the producer; and 

‘‘(ii) include conservation practices appropriate for 

the agricultural operation that, at a minimum—

‘‘(I) apply a resource management system that 

meets the appropriate nondegradation standard 

for all resources of concern of the entire agricultural operation, as determined by the Secretary; 

and 

‘‘(II) cover active management of conservation 

practices that are implemented or maintained 

under the conservation security contract. 

‘‘(6) MINIMUM REQUIREMENTS.—The minimum requirements for each tier of conservation contracts implemented under 

paragraph (5) shall be determined and approved by the Secretary. 

‘‘(e) CONSERVATION SECURITY CONTRACTS.—

‘‘(1) IN GENERAL.—On approval of a conservation security 

plan of a producer, the Secretary shall enter into a conservation 

security contract with the producer to enroll the land covered by 

the conservation security plan in the conservation security program. 

‘‘(2) MODIFICATION.—

‘‘(A) OPTIONAL MODIFICATIONS.—A producer may apply 

to the Secretary for a modification of the conservation security contract of the producer that is consistent with the purposes of the conservation security program. 

‘‘(B) OTHER MODIFICATIONS.—

‘‘(i) IN GENERAL.—The Secretary may, in writing, 

require a producer to modify a conservation security 

contract before the expiration of the conservation security contract if the Secretary determines that a change 

made to the type, size, management, or other aspect of 

the agricultural operation of the producer would, without the modification of the contract, significantly interfere with achieving the purposes of the conservation security program. 

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‘‘(ii) PARTICIPATION IN OTHER PROGRAMS.—If appropriate payment reductions and other adjustments 

(as determined by the Secretary) are made to the conservation security contract of a producer, the producer 

may— ‘‘(I) simultaneously participate in— ‘‘(aa) the conservation security program; 

‘‘(bb) the conservation reserve program 

under subchapter B of chapter 1; and ‘‘(cc) the wetlands reserve program under 

subchapter C of chapter 1; and 

‘‘(II) may remove land enrolled in the conservation security program for enrollment in a program described in item (bb) or (cc) of subclause (I). ‘‘(3) TERMINATION.— ‘‘(A) OPTIONAL TERMINATION.—A producer may terminate a conservation security contract and retain payments 

received under the conservation security contract, if— ‘‘(i) the producer is in full compliance with the 

terms and conditions (including any maintenance requirements) of the conservation security contract as of 

the date of the termination; and ‘‘(ii) the Secretary determines that termination of 

the contract would not defeat the purposes of the conservation security plan of the producer. 

‘‘(B) OTHER TERMINATION.—A producer that is required 

to modify a conservation security contract under paragraph 

(2)(B)(i) may, in lieu of modifying the contract— ‘‘(i) terminate the conservation security contract; 

and ‘‘(ii) retain payments received under the conservation security contract, if the producer has fully complied with the terms and conditions of the conservation 

security contract before termination of the contract, as 

determined by the Secretary. 

‘‘(4) RENEWAL.— ‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), at the option of a producer, the conservation security 

contract of the producer may be renewed for an additional 

period of not less than 5 nor more than 10 years. ‘‘(B) TIER I RENEWALS.—In the case of a Tier I conservation security contract of a producer, the producer may 

renew the contract only if the producer agrees—

‘‘(i) to apply additional conservation practices that 

meet the nondegradation standard on land already enrolled in the conservation security program; or 

‘‘(ii) to adopt new conservation practices with respect to another portion of the agricultural operation 

that address resource concerns and meet the nondegradation standard under the terms of the Tier I conservation security contract. ‘‘(f) NONCOMPLIANCE DUE TO CIRCUMSTANCES BEYOND THE

CONTROL OF PRODUCERS.—The Secretary shall include in the conservation security contract a provision, and may permit modification of a conservation security contract under subsection (e)(1), to 

99

ensure that a producer shall not be considered in violation of a conservation security contract for failure to comply with the conservation security contract due to circumstances beyond the control of the 

producer, including a disaster or related condition, as determined 

by the Secretary. 

‘‘SEC. 1238B. DUTIES OF PRODUCERS. 

‘‘Under a conservation security contract, a producer shall agree, 

during the term of the conservation security contract—

‘‘(1) to implement the applicable conservation security plan 

approved by the Secretary; 

‘‘(2) to maintain, and make available to the Secretary at 

such times as the Secretary may request, appropriate records 

showing the effective and timely implementation of the conservation security plan; 

‘‘(3) not to engage in any activity that would interfere with 

the purposes of the conservation security program; and 

‘‘(4) on the violation of a term or condition of the conservation security contract—

‘‘(A) if the Secretary determines that the violation warrants termination of the conservation security contract—

‘‘(i) to forfeit all rights to receive payments under 

the conservation security contract; and 

‘‘(ii) to refund to the Secretary all or a portion of 

the payments received by the producer under the conservation security contract, including any advance payments and interest on the payments, as determined by 

the Secretary; or 

‘‘(B) if the Secretary determines that the violation does 

not warrant termination of the conservation security contract, to refund to the Secretary, or accept adjustments to, 

the payments provided to the producer, as the Secretary determines to be appropriate. 

‘‘SEC. 1238C. DUTIES OF THE SECRETARY. 

‘‘(a) TIMING OF PAYMENTS.—The Secretary shall make payments 

under a conservation security contract as soon as practicable after 

October 1 of each fiscal year. 

‘‘(b) ANNUAL PAYMENTS.—

‘‘(1) CRITERIA FOR DETERMINING AMOUNT OF PAYMENTS.—

‘‘(A) BASE PAYMENT.—A base payment under this paragraph shall be (as determined by the Secretary)—

‘‘(i) the average national per-acre rental rate for a 

specific land use during the 2001 crop year; or 

‘‘(ii) another appropriate rate for the 2001 crop 

year that ensures regional equity. 

‘‘(B) PAYMENTS.—A payment for a conservation practice 

under this paragraph shall be determined in accordance 

with subparagraphs (C) through (E).

‘‘(C) TIER I CONSERVATION SECURITY CONTRACTS.—The 

payment for a Tier I conservation security contract shall 

consist of the total of the following amounts: ‘‘(i) An amount equal to 5 percent of the applicable 

base payment for land covered by the contract. ‘‘(ii) An amount that does not exceed 75 percent (or, 

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cent) of the average county costs of practices for the 

2001 crop year that are included in the conservation 

security contract, as determined by the Secretary, including the costs of— ‘‘(I) the adoption of new management, vegetative, and land-based structural practices; ‘‘(II) the maintenance of existing land management and vegetative practices; and ‘‘(III) the maintenance of existing land-based 

structural practices that are approved by the Secretary but not already covered by a Federal or 

State maintenance requirement. 

‘‘(iii) An enhanced payment that is determined by 

the Secretary in a manner that ensures equity across 

regions of the United States, if the producer— ‘‘(I) implements or maintains multiple conservation practices that exceed minimum requirements for the applicable tier of participation (including practices that involve a change in land 

use, such as resource-conserving crop rotation, 

managed rotational grazing, or conservation buffer 

practices); ‘‘(II) addresses local conservation priorities in 

addition to resources of concern for the agricultural operation; ‘‘(III) participates in an on-farm conservation 

research, demonstration, or pilot project; ‘‘(IV) participates in a watershed or regional 

resource conservation plan that involves at least 75 

percent of producers in a targeted area; or ‘‘(V) carries out assessment and evaluation activities relating to practices included in a conservation security plan. ‘‘(D) TIER II CONSERVATION SECURITY CONTRACTS.—The 

payment for a Tier II conservation security contract shall 

consist of the total of the following amounts: 

‘‘(i) An amount equal to 10 percent of the applicable base payment for land covered by the conservation 

security contract. 

‘‘(ii) An amount that does not exceed 75 percent (or, 

in the case of a beginning farmer or rancher, 90 percent) of the average county cost of adopting or maintaining practices for the 2001 crop year that are included in the conservation security contract, as described in subparagraph (C)(ii). 

‘‘(iii) An enhanced payment that is determined in 

accordance with subparagraph (C)(iii). 

‘‘(E) TIER III CONSERVATION SECURITY CONTRACTS.—

The payment for a Tier III conservation security contract 

shall consist of the total of the following amounts: 

‘‘(i) An amount equal to 15 percent of the base payment for land covered by the conservation security contract. 

‘‘(ii) An amount that does not exceed 75 percent (or, 

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cent) of the average county cost of adopting or maintaining practices for the 2001 crop year that are included in the conservation security contract, as described in subparagraph (C)(ii). ‘‘(iii) An enhanced payment that is determined in 

accordance with subparagraph (C)(iii). ‘‘(2) LIMITATION ON PAYMENTS.— ‘‘(A) IN GENERAL.—Subject to paragraphs (1) and (3), 

the Secretary shall make an annual payment, directly or 

indirectly, to an individual or entity covered by a conservation security contract in an amount not to exceed— ‘‘(i) in the case of a Tier I conservation security contract, $20,000; ‘‘(ii) in the case of a Tier II conservation security contract, $35,000; or ‘‘(iii) in the case of a Tier III conservation security contract, $45,000. 

‘‘(B) LIMITATION ON BASE PAYMENTS.—In applying the 

payment limitation under each of clauses (i), (ii), and (iii) 

of subparagraph (A), an individual or entity may not receive, directly or indirectly, payments described in clause (i) 

of paragraph (1)(C), (1)(D), or (1)(E), as appropriate, in an 

amount that exceeds— ‘‘(i) in the case of Tier I contracts, 25 percent of the 

applicable payment limitation; or ‘‘(ii) in the case of Tier II contracts and Tier III 

contracts, 30 percent of the applicable payment limitation. 

‘‘(C) OTHER USDA PAYMENTS.—A producer shall not receive payments under the conservation security program 

and any other conservation program administered by the 

Secretary for the same practices on the same land. ‘‘(D) COMMENSURATE SHARE.—To be eligible to receive 

a payment under this subchapter, an individual or entity 

shall make contributions (including contributions of land, 

labor, management, equipment, or capital) to the operation 

of the farm that are at least commensurate with the share 

of the proceeds of the operation of the individual or entity. 

‘‘(3) EQUIPMENT OR FACILITIES.—A payment to a producer 

under this subchapter shall not be provided for— ‘‘(A) construction or maintenance of animal waste storage or treatment facilities or associated waste transport or 

transfer devices for animal feeding operations; or ‘‘(B) the purchase or maintenance of equipment or a 

non-land based structure that is not integral to a landbased practice, as determined by the Secretary. ‘‘(c) MINIMUM PRACTICE REQUIREMENT.—In determining a payment under subsection (b) for a producer that receives a payment 

under another program administered by the Secretary that is contingent on complying with requirements under subtitle B or C (relating to the use of highly erodible land or wetland), a payment 

under this subchapter on land subject to those requirements shall 

be for practices only to the extent that the practices exceed minimum 

requirements for the producer under those subtitles, as determined 

by the Secretary. 

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‘‘(d) REGULATIONS.—The Secretary shall promulgate regulations 

that— ‘‘(1) provide for adequate safeguards to protect the interests 

of tenants and sharecroppers, including provision for sharing 

payments, on a fair and equitable basis; and ‘‘(2) prescribe such other rules as the Secretary determines 

to be necessary to ensure a fair and reasonable application of 

the limitations established under subsection (b). 

‘‘(e) TRANSFER OR CHANGE OF INTEREST IN LAND SUBJECT TO

CONSERVATION SECURITY CONTRACT.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the 

transfer, or change in the interest, of a producer in land subject 

to a conservation security contract shall result in the termination of the conservation security contract. ‘‘(2) TRANSFER OF DUTIES AND RIGHTS.—Paragraph (1) 

shall not apply if, not later than 60 days after the date of the 

transfer or change in the interest in land, the transferee of the 

land provides written notice to the Secretary that all duties and 

rights under the conservation security contract have been transferred to, and assumed by, the transferee. 

‘‘(f) ENROLLMENT PROCEDURE.—In entering into conservation 

security contracts with producers under this subchapter, the Secretary shall not use competitive bidding or any similar procedure. 

‘‘(g) TECHNICAL ASSISTANCE.—For each of fiscal years 2003 

through 2007, the Secretary shall provide technical assistance to 

producers for the development and implementation of conservation 

security contracts, in an amount not to exceed 15 percent of amounts 

expended for the fiscal year.’’. 

(b) REGULATIONS.—Not later than 270 days after the date of enactment of this Act, the Secretary of Agriculture shall promulgate 

regulations implementing the amendment made by subsection (a). 

SEC. 2002. CONSERVATION COMPLIANCE. 

(a) HIGHLY ERODIBLE LAND.—Section 1211 of the Food Security 

Act of 1985 (16 U.S.C. 3811) is amended—

(1) by striking the section heading and all that follows 

through ‘‘Except as provided in’’ and inserting the following: 

‘‘SEC. 1211. PROGRAM INELIGIBILITY. 

‘‘(a) IN GENERAL.—Except as provided in’’; and 

(2) by adding at the end the following: 

‘‘(b) HIGHLY ERODIBLE LAND.—The Secretary shall have, and 

shall not delegate to any private person or entity, authority to determine whether a person has complied with this subtitle.’’. 

(b) WETLAND.—Section 1221 of the Food Security Act of 1985 

(16 U.S.C. 3821) is amended by adding at the end the following:

‘‘(e) WETLAND.—The Secretary shall have, and shall not delegate to any private person or entity, authority to determine whether 

a person has complied with this subtitle.’’. 

SEC. 2003. PARTNERSHIPS AND COOPERATION. 

Section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843) 

is amended by adding at the end the following: 

‘‘(f) PARTNERSHIPS AND COOPERATION.—

‘‘(1) IN GENERAL.—In carrying out any program under subtitle D, the Secretary may use resources provided under that 

subtitle to enter into stewardship agreements with State and 

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local agencies, Indian tribes, and nongovernmental organizations and to designate special projects, as recommended by the 

State Conservationist, after consultation with the State technical committee, to enhance technical and financial assistance 

provided to owners, operators, and producers to address natural resource issues related to agricultural production. ‘‘(2) CRITERIA FOR SPECIAL PROJECTS.—The purposes of special projects carried out under this subsection shall be to encourage—

‘‘(A) producers to cooperate in the installation and 

maintenance of conservation practices that affect multiple 

agricultural operations; ‘‘(B) the sharing of information and technical and financial resources among producers; ‘‘(C) cumulative conservation benefits in geographic 

areas; and ‘‘(D) the development and demonstration of innovative 

conservation methods. 

‘‘(3) INCENTIVES.—To realize the purposes of the special 

projects under paragraph (1), the Secretary may provide special 

incentives to owners, operators, and producers participating in 

the special projects to encourage partnerships and enrollments 

of optimal conservation value. ‘‘(4) FLEXIBILITY.— ‘‘(A) IN GENERAL.—The Secretary may enter into stewardship agreements with States (including State agencies 

and units of local government), Indian tribes, and nongovernmental organizations that have a history of working 

with agricultural producers to allow greater flexibility to 

adjust the application of eligibility criteria, approved practices, innovative conservation practices, and other elements 

of the programs under this title to better reflect unique 

local circumstances and purposes in a manner that is consistent with—

‘‘(i) conservation enhancement and long-term productivity of the natural resource base; and 

‘‘(ii) the purposes and requirements of this title. 

‘‘(B) PLAN.—Each party to a stewardship agreement 

under subparagraph (A) shall submit to the Secretary, for 

approval by the Secretary, a special project area plan for 

each program to be carried out by the party that includes— ‘‘(i) a description of the requested resources and 

adjustments to program implementation (including a 

description of how those adjustments will accelerate the 

achievement of conservation benefits); ‘‘(ii) an analysis of the contribution those adjustments will make to the effectiveness of programs in 

achieving the purposes of the special project; ‘‘(iii) a timetable for reevaluating the need for or 

performance of the proposed adjustments; 

‘‘(iv) a description of non-Federal programs and resources that will contribute to achieving the purposes 

of the special project; and 

‘‘(v) a plan for the evaluation of progress toward 

the purposes of the special project. 

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‘‘(5) FUNDING.—

‘‘(A) IN GENERAL.—In addition to resources from programs under subtitle D, subject to subparagraph (B), the 

Secretary shall use not more than 5 percent of the funds 

made available for each fiscal year under section 1241(a) to 

carry out activities that are authorized under conservation 

programs under subtitle D. 

‘‘(B) UNUSED FUNDING.—Any funds made available for 

a fiscal year under subparagraph (A) that are not obligated 

by April 1 of the fiscal year may be used to carry out other 

activities under conservation programs under subtitle D 

during the fiscal year in which the funding becomes available.’’. 

SEC. 2004. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION 

PROGRAMS. 

(a) IN GENERAL.—Subtitle E of title XII of the Food Security 

Act of 1985 (16 U.S.C. 3841 et seq.) is amended by adding at the 

end the following: 

‘‘SEC. 1244. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION 

PROGRAMS. 

‘‘(a) BEGINNING FARMERS AND RANCHERS AND INDIAN TRIBES.—

In carrying out any conservation program administered by the Secretary, the Secretary may provide to beginning farmers and ranchers and Indian tribes (as those terms are defined in section 1238) 

and limited resource agricultural producers incentives to participate 

in the conservation program to—

‘‘(1) foster new farming and ranching opportunities; and 

‘‘(2) enhance environmental stewardship over the long term. 

‘‘(b) PRIVACY OF PERSONAL INFORMATION RELATING TO NATURAL RESOURCES CONSERVATION PROGRAMS.—

‘‘(1) INFORMATION RECEIVED FOR TECHNICAL AND FINANCIAL

ASSISTANCE.—

‘‘(A) IN GENERAL.—In accordance with section 552(b)(3) 

of title 5, United States Code, except as provided in subparagraph (C) and paragraph (2), information described in 

subparagraph (B)—

‘‘(i) shall not be considered to be public information; and 

‘‘(ii) shall not be released to any person or Federal, 

State, local agency or Indian tribe (as defined by the 

Secretary) outside the Department of Agriculture.

‘‘(B) INFORMATION.—The information referred to in 

subparagraph (A) is information—

‘‘(i) provided to the Secretary or a contractor of the 

Secretary (including information provided under subtitle D) for the purpose of providing technical or financial assistance to an owner, operator, or producer with 

respect to any natural resources conservation program 

administered by the Natural Resources Conservation 

Service or the Farm Service Agency; and 

‘‘(ii) that is proprietary (within the meaning of section 552(b)(4) of title 5, United States Code) to the agricultural operation or land that is a part of an agricultural operation of the owner, operator, or producer. 

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‘‘(C) EXCEPTION.—Nothing in this section affects the 

availability of payment information (including payment 

amounts and the names and addresses of recipients of payments) under section 552 of title 5, United States Code. 

‘‘(2) EXCEPTIONS.—

‘‘(A) RELEASE AND DISCLOSURE FOR ENFORCEMENT.—

The Secretary may release or disclose to the Attorney General information covered by paragraph (1) to the extent necessary to enforce the natural resources conservation programs referred to in paragraph (1)(B)(i). 

‘‘(B) DISCLOSURE TO COOPERATING PERSONS AND AGENCIES.—

‘‘(i) IN GENERAL.—The Secretary may release or 

disclose information covered by paragraph (1) to a person or Federal, State, local, or tribal agency working in 

cooperation with the Secretary in providing technical 

and financial assistance described in paragraph 

(1)(B)(i) or collecting information from data gathering 

sites. 

‘‘(ii) USE OF INFORMATION.—The person or Federal, 

State, local, or tribal agency that receives information 

described in clause (i) may release the information only 

for the purpose of assisting the Secretary—

‘‘(I) in providing the requested technical or financial assistance; or 

‘‘(II) in collecting information from data gathering sites. 

‘‘(C) STATISTICAL AND AGGREGATE INFORMATION.—Information covered by paragraph (1) may be disclosed to the 

public if the information has been transformed into a statistical or aggregate form without naming any—

‘‘(i) individual owner, operator, or producer; or 

‘‘(ii) specific data gathering site. 

‘‘(D) CONSENT OF OWNER, OPERATOR, OR PRODUCER.—

‘‘(i) IN GENERAL.—An owner, operator, or producer 

may consent to the disclosure of information described 

in paragraph (1). 

‘‘(ii) CONDITION OF OTHER PROGRAMS.—The participation of the owner, operator, or producer in, and 

the receipt of any benefit by the owner, operator, or producer under, this title or any other program administered by the Secretary may not be conditioned on the 

owner, operator, or producer providing consent under 

this paragraph. 

‘‘(3) VIOLATIONS; PENALTIES.—Section 1770(c) shall apply 

with respect to the release of information collected in any manner or for any purpose prohibited by this subsection. 

‘‘(4) DATA COLLECTION, DISCLOSURE, AND REVIEW.—Nothing 

in this subsection—

‘‘(A) affects any procedure for data collection or disclosure through the National Resources Inventory; or 

‘‘(B) limits the authority of Congress or the General Accounting Office to review information collected or disclosed 

under this subsection.’’. 

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(b) NATIONAL RESOURCES INVENTORY.—Section 1770 of the 

Food Security Act of 1985 (7 U.S.C. 2276) is amended—

(1) in subsection (a)—

(A) in paragraph (1), by striking ‘‘or’’ at the end; 

(B) in paragraph (2), by striking the period and inserting ‘‘; or’’; and 

(C) by adding at the end the following: 

‘‘(3) in the case of information collected under the authority 

described in subsection (d)(12), disclose the information to any 

person or any Federal, State, local, or tribal agency outside the 

Department of Agriculture, unless the information has been 

converted into a statistical or aggregate form that does not 

allow the identification of the person that supplied particular 

information.’’; and 

(2) in subsection (d)—

(A) in paragraph (9), by striking ‘‘or’’ at the end; 

(B) in paragraph (11), by striking the period and inserting ‘‘; or’’; and 

(C) by adding at the end the following: 

‘‘(12) section 302 of the Rural Development Act of 1972 (7 

U.S.C. 1010a) regarding the authority to collect data for the 

National Resources Inventory.’’. 

SEC. 2005. REFORM AND ASSESSMENT OF CONSERVATION PROGRAMS. 

(a) IN GENERAL.—The Secretary of Agriculture shall develop a 

plan to coordinate land retirement and agricultural working land 

conservation programs that are administered by the Secretary to 

achieve the goals of—

(1) eliminating redundancy; 

(2) streamlining program delivery; and 

(3) improving services provided to agricultural producers 

(including the reevaluation of the provision of technical assistance). 

(b) REPORT.—Not later than December 31, 2005, the Secretary 

of Agriculture shall submit to the Committee on Agriculture of the 

House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report that describes—

(1) the plan developed under subsection (a); and 

(2) the means by which the Secretary intends to achieve the 

goals described in subsection (a). 

SEC. 2006. CONFORMING AMENDMENTS. 

(a) Chapter 1 of subtitle D of title XII of the Food Security Act 

of 1985 (16 U.S.C. 3830 et seq.) is amended by striking the chapter 

heading and inserting the following: 

‘‘CHAPTER 1—COMPREHENSIVE CONSERVATION 

ENHANCEMENT PROGRAM’’. 

(b) Section 1230 of the Food Security Act of 1985 (16 U.S.C. 

3830) is amended—

(1) in the section heading, by striking ‘‘ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM’’ and inserting ‘‘COMPREHENSIVE CONSERVATION 

ENHANCEMENT PROGRAM’’;

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(2) in subsection (a)(1), by striking ‘‘an environmental conservation acreage reserve program’’ and inserting ‘‘a comprehensive conservation enhancement program’’; 

(3) by striking subsection (c); and 

(4) by striking ‘‘ECARP’’ each place it appears and inserting ‘‘CCEP’’. 

(c) Section 1230A of the Food Security Act of 1985 (16 U.S.C. 

3830a) is repealed. 

(d) Section 1243 of the Food Security Act of 1985 (16 U.S.C. 

3843) is amended by striking the section heading and inserting the 

following: 

‘‘SEC. 1243. ADMINISTRATION OF CCEP.’’. 

Subtitle B—Conservation Reserve

SEC. 2101. CONSERVATION RESERVE PROGRAM. 

(a) IN GENERAL.—Subchapter B of chapter 1 of subtitle D of 

title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) 

is amended to read as follows: 

‘‘Subchapter B—Conservation Reserve 

‘‘SEC. 1231. CONSERVATION RESERVE. 

‘‘(a) IN GENERAL.—Through the 2007 calendar year, the Secretary shall formulate and carry out a conservation reserve program 

under which land is enrolled through the use of contracts to assist 

owners and operators of land specified in subsection (b) to conserve 

and improve the soil, water, and wildlife resources of such land. 

‘‘(b) ELIGIBLE LAND.—The Secretary may include in the program established under this subchapter—

‘‘(1) highly erodible cropland that—

‘‘(A)(i) if permitted to remain untreated could substantially reduce the agricultural production capability for future generations; or 

‘‘(ii) cannot be farmed in accordance with a plan that 

complies with the requirements of subtitle B; and 

‘‘(B) the Secretary determines had a cropping history or 

was considered to be planted for 4 of the 6 years preceding 

the date of enactment of the Farm Security and Rural Investment Act of 2002 (except for land enrolled in the conservation reserve program as of that date).

‘‘(2) marginal pasture land converted to wetland or established as wildlife habitat prior to November 28, 1990; 

‘‘(3) marginal pasture land to be devoted to appropriate 

vegetation, including trees, in or near riparian areas, or devoted 

to similar water quality purposes (including marginal 

pastureland converted to wetland or established as wildlife 

habitat); 

‘‘(4) cropland that is otherwise ineligible if the Secretary determines that—

‘‘(A) if permitted to remain in agricultural production, 

the land would—

‘‘(i) contribute to the degradation of soil, water, or 

air quality; or 

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‘‘(ii) pose an on-site or off-site environmental threat 

to soil, water, or air quality; 

‘‘(B) the land is a— ‘‘(i) newly-created, permanent grass sod waterway; 

or ‘‘(ii) a contour grass sod strip established and 

maintained as part of an approved conservation plan; 

‘‘(C) the land will be devoted to newly established living snow fences, permanent wildlife habitat, windbreaks, 

shelterbelts, or filterstrips devoted to trees or shrubs; or ‘‘(D) the land poses an off-farm environmental threat, 

or a threat of continued degradation of productivity due to 

soil salinity, if permitted to remain in production; and ‘‘(E) enrollment of the land would facilitate a net savings in groundwater or surface water resources of the agricultural operation of the producer; 

‘‘(5) the portion of land in a field not enrolled in the conservation reserve in a case in which more than 50 percent of the 

land in the field is enrolled as a buffer, if— ‘‘(A) the land is enrolled as part of the buffer; and 

‘‘(B) the remainder of the field is— ‘‘(i) infeasible to farm; and 

‘‘(ii) enrolled at regular rental rates. ‘‘(c) PLANTING STATUS OF CERTAIN LAND.—For purposes of determining the eligibility of land to be placed in the conservation reserve established under this subchapter, land shall be considered to 

be planted to an agricultural commodity during a crop year if— ‘‘(1) during the crop year, the land was devoted to a conserving use; or ‘‘(2)(A) during the crop year or during any of the 2 years 

preceding the crop year, the land was enrolled in the water 

bank program; and ‘‘(B) the contract of the owner or operator of the cropland 

expired or will expire in calendar year 2000, 2001, or 2002. 

‘‘(d) MAXIMUM ENROLLMENT.—The Secretary may maintain up 

to 39,200,000 acres in the conservation reserve at any 1 time during 

the 2002 through 2007 calendar years (including contracts extended 

by the Secretary pursuant to section 1437(c) of the Food, Agriculture, Conservation, and Trade Act of 1990 (16 U.S.C. 3831 note; 

Public Law 101–624)). ‘‘(e) DURATION OF CONTRACT.—

‘‘(1) IN GENERAL.—For the purpose of carrying out this subchapter, the Secretary shall enter into contracts of not less than 

10, nor more than 15, years. 

‘‘(2) CERTAIN LAND.—

‘‘(A) IN GENERAL.—In the case of land devoted to hardwood trees, shelterbelts, windbreaks, or wildlife corridors 

under a contract entered into under this subchapter after 

October 1, 1990, and land devoted to such uses under contracts modified under section 1235A, the owner or operator 

of the land may, within the limitations prescribed under 

this section, specify the duration of the contract. ‘‘(B) HARDWOOD TREES.—In the case of land that is devoted to hardwood trees under a contract entered into 

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retary may extend the contract for a term of not to exceed 

5 years, as agreed to by the owner or operator of such land 

and the Secretary. 

‘‘(3) 1-YEAR EXTENSION.—In the case of a contract described 

in paragraph (1) the term of which expires during calendar 

year 2002, an owner or operator of land enrolled under the contract may extend the contract for 1 additional year.

‘‘(f) CONSERVATION PRIORITY AREAS.— ‘‘(1) DESIGNATION.—On application by the appropriate 

State agency, the Secretary shall designate watershed areas of 

the Chesapeake Bay Region (Pennsylvania, Maryland, and Virginia), the Great Lakes Region, the Long Island Sound Region, 

and other areas of special environmental sensitivity as conservation priority areas. ‘‘(2) ELIGIBLE WATERSHEDS.—Watersheds eligible for designation under this subsection shall include areas with actual 

and significant adverse water quality or habitat impacts related 

to agricultural production activities. ‘‘(3) EXPIRATION.—Conservation priority area designation 

under this subsection shall expire after 5 years, subject to redesignation, except that the Secretary may withdraw a watershed’s 

designation— ‘‘(A) on application by the appropriate State agency; or 

‘‘(B) in the case of an area covered by this subsection, 

if the Secretary finds that the area no longer contains actual and significant adverse water quality or habitat impacts related to agricultural production activities. 

‘‘(4) DUTY OF SECRETARY.—In carrying out this subsection, 

the Secretary shall attempt to maximize water quality and 

habitat benefits in the watersheds described in paragraph (1) by 

promoting a significant level of enrollment of land within the 

watersheds in the program under this subchapter by whatever 

means the Secretary determines are appropriate and consistent 

with the purposes of this subchapter. 

‘‘(g) MULTI-YEAR GRASSES AND LEGUMES.—For purposes of this 

subchapter, alfalfa and other multi-year grasses and legumes in a 

rotation practice, approved by the Secretary, shall be considered agricultural commodities. ‘‘(h) PILOT PROGRAM FOR ENROLLMENT OF WETLAND AND BUFF- ER ACREAGE IN CONSERVATION RESERVE.—

‘‘(1) PROGRAM.—

‘‘(A) IN GENERAL.—During the 2002 through 2007 calendar years, the Secretary shall carry out a program in 

each State under which the Secretary shall include eligible 

acreage described in paragraph (2) in the program established under this subchapter. 

‘‘(B) PARTICIPATION AMONG STATES.—The Secretary 

shall ensure, to the maximum extent practicable, that owners and operators in each State have an equitable opportunity to participate in the pilot program established under 

this subsection. 

‘‘(2) ELIGIBLE ACREAGE.— ‘‘(A) IN GENERAL.—Subject to subparagraphs (B) 

through (D), an owner or operator may enroll in the conservation reserve under this subsection—

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‘‘(i) a wetland (including a converted wetland described in section 1222(b)(1)(A)) that was cropped during at least 3 of the immediately preceding 10 crop 

years; and 

‘‘(ii) buffer acreage that—

‘‘(I) is contiguous to the wetland described in 

clause (i); 

‘‘(II) is used to protect the wetland; and 

‘‘(III) is of such width as the Secretary determines is necessary to protect the wetland, taking 

into consideration and accommodating the farming practices (including the straightening of 

boundaries to accommodate machinery) used with 

respect to the cropland that surrounds the wetland. 

‘‘(B) EXCLUSIONS.—An owner or operator may not enroll in the conservation reserve under this subsection—

‘‘(i) any wetland, or land on a floodplain, that is, 

or is adjacent to, a perennial riverine system wetland 

identified on the final national wetland inventory map 

of the Secretary of the Interior; or 

‘‘(ii) in the case of an area that is not covered by 

the final national inventory map, any wetland, or land 

on a floodplain, that is adjacent to a perennial stream 

identified on a 1–24,000 scale map of the United States 

Geological Survey. 

‘‘(C) PROGRAM LIMITATIONS.—

‘‘(i) IN GENERAL.—The Secretary may enroll in the 

conservation reserve under this subsection not more 

than—

‘‘(I) 100,000 acres in any 1 State referred to in 

paragraph (1); and 

‘‘(II) not more than a total of 1,000,000 acres.

‘‘(ii) RELATIONSHIP TO PROGRAM MAXIMUM.—Subject to clause (iii), for the purposes of subsection (d), 

any acreage enrolled in the conservation reserve under 

this subsection shall be considered acres maintained in 

the conservation reserve.

‘‘(iii) RELATIONSHIP TO OTHER ENROLLED ACREAGE.—Acreage enrolled under this subsection shall not 

affect for any fiscal year the quantity of—

‘‘(I) acreage enrolled to establish conservation 

buffers as part of the program announced on 

March 24, 1998 (63 Fed. Reg. 14109); or 

‘‘(II) acreage enrolled into the conservation reserve enhancement program announced on May 

27, 1998 (63 Fed. Reg. 28965). 

‘‘(iv) REVIEW; POTENTIAL INCREASE IN ENROLLMENT

ACREAGE.—Not later than 3 years after the date of enactment of this clause, the Secretary shall—

‘‘(I) conduct a review of the program under 

this subsection with respect to each State that has 

enrolled land in the program; and 

‘‘(II) notwithstanding clause (i)(I), increase the 

number of acres that may be enrolled by a State 

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under clause (i)(I) to not more than 150,000 acres, 

as determined by the Secretary.

‘‘(D) OWNER OR OPERATOR LIMITATIONS.—

‘‘(i) WETLAND.—

‘‘(I) IN GENERAL.—The maximum size of any 

wetland described in subparagraph (A)(i) of an 

owner or operator enrolled in the conservation reserve under this subsection shall be 10 contiguous 

acres, of which not more than 5 acres shall be eligible for payment. 

‘‘(II) COVERAGE.—All acres described in subclause (I) (including acres that are ineligible for 

payment) shall be covered by the conservation contract.

‘‘(ii) BUFFER ACREAGE.—The maximum size of any 

buffer acreage described in subparagraph (A)(ii) of an 

owner or operator enrolled in the conservation reserve 

under this subsection shall be the greater of—

‘‘(I) 3 times the size of any wetland described 

in subparagraph (A)(i) to which the buffer acreage 

is contiguous; or 

‘‘(II) 150 feet on either side of the wetland. 

‘‘(iii) TRACTS.—The maximum size of any eligible 

acreage described in subparagraph (A) in a tract (as 

determined by the Secretary) of an owner or operator 

enrolled in the conservation reserve under this subsection shall be 40 acres. 

‘‘(3) DUTIES OF OWNERS AND OPERATORS.—Under a contract 

entered into under this subsection, during the term of the contract, an owner or operator of a farm or ranch shall agree—

‘‘(A) to restore the hydrology of the wetland within the 

eligible acreage to the maximum extent practicable, as determined by the Secretary; 

‘‘(B) to establish vegetative cover (which may include 

emerging vegetation in water) on the eligible acreage, as determined by the Secretary; and 

‘‘(C) to carry out other duties described in section 1232. 

‘‘(4) DUTIES OF THE SECRETARY.—

‘‘(A) IN GENERAL.—Except as provided in subparagraphs (B) and (C), in return for a contract entered into by 

an owner or operator under this subsection, the Secretary 

shall make payments and provide assistance to the owner 

or operator in accordance with sections 1233 and 1234. 

‘‘(B) CONTINUOUS SIGNUP.—The Secretary shall use 

continuous signup under section 1234(c)(2)(B) to determine 

the acceptability of contract offers and the amount of rental 

payments under this subsection. 

‘‘(C) INCENTIVES.—The amounts payable to owners and 

operators in the form of rental payments under contracts 

entered into under this subsection shall reflect incentives 

that are provided to owners and operators to enroll 

filterstrips in the conservation reserve under section 1234. 

‘‘(i) ELIGIBILITY FOR CONSIDERATION.—On the expiration of a 

contract entered into under this subchapter, the land subject to the 

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contract shall be eligible to be considered for reenrollment in the 

conservation reserve. 

‘‘(j) BALANCE OF NATURAL RESOURCE PURPOSES.—In determining the acceptability of contract offers under this subchapter, the 

Secretary shall ensure, to the maximum extent practicable, an equitable balance among the conservation purposes of soil erosion, water 

quality, and wildlife habitat.

‘‘SEC. 1232. DUTIES OF OWNERS AND OPERATORS. 

‘‘(a) IN GENERAL.—Under the terms of a contract entered into 

under this subchapter, during the term of the contract, an owner or 

operator of a farm or ranch shall agree—

‘‘(1) to implement a plan approved by the local conservation 

district (or in an area not located within a conservation district, 

a plan approved by the Secretary) for converting eligible land 

normally devoted to the production of an agricultural commodity on the farm or ranch to a less intensive use (as defined 

by the Secretary), such as pasture, permanent grass, legumes, 

forbs, shrubs, or trees, substantially in accordance with a 

schedule outlined in the plan; 

‘‘(2) to place highly erodible cropland subject to the contract 

in the conservation reserve established under this subchapter; 

‘‘(3) not to use the land for agricultural purposes, except as 

permitted by the Secretary; 

‘‘(4) to establish approved vegetative cover (which may include emerging vegetation in water), water cover for the enhancement of wildlife, or, where practicable, maintain existing 

cover on the land, except that—

‘‘(A) the water cover shall not include ponds for the 

purpose of watering livestock, irrigating crops, or raising 

fish for commercial purposes; and 

‘‘(B) the Secretary shall not terminate the contract for 

failure to establish approved vegetative or water cover on 

the land if—

‘‘(i) the failure to plant the cover was due to excessive rainfall or flooding; 

‘‘(ii) the land subject to the contract that could 

practicably be planted to the cover is planted to the 

cover; and 

‘‘(iii) the land on which the owner or operator was 

unable to plant the cover is planted to the cover after 

the wet conditions that prevented the planting subsides; 

‘‘(5) on a violation of a term or condition of the contract at 

any time the owner or operator has control of the land—

‘‘(A) to forfeit all rights to receive rental payments and 

cost sharing payments under the contract and to refund to 

the Secretary any rental payments and cost sharing payments received by the owner or operator under the contract, 

together with interest on the payments as determined by the 

Secretary, if the Secretary, after considering the recommendations of the soil conservation district and the Natural Resources Conservation Service, determines that the 

violation is of such nature as to warrant termination of the 

contract; or 

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‘‘(B) to refund to the Secretary, or accept adjustments 

to, the rental payments and cost sharing payments provided to the owner or operator, as the Secretary considers 

appropriate, if the Secretary determines that the violation 

does not warrant termination of the contract; 

‘‘(6) on the transfer of the right and interest of the owner 

or operator in land subject to the contract—

‘‘(A) to forfeit all rights to rental payments and cost 

sharing payments under the contract; and 

‘‘(B) to refund to the United States all rental payments 

and cost sharing payments received by the owner or operator, or accept such payment adjustments or make such refunds as the Secretary considers appropriate and consistent 

with the objectives of this subchapter;

unless the transferee of the land agrees with the Secretary to assume all obligations of the contract, except that no refund of 

rental payments and cost sharing payments shall be required if 

the land is purchased by or for the United States Fish and 

Wildlife Service, or the transferee and the Secretary agree to 

modifications to the contract, in a case in which the modifications are consistent with the objectives of the program, as determined by the Secretary; 

‘‘(7) not to conduct any harvesting or grazing, nor otherwise 

make commercial use of the forage, on land that is subject to 

the contract, nor adopt any similar practice specified in the contract by the Secretary as a practice that would tend to defeat 

the purposes of the contract, except that the Secretary may permit, consistent with the conservation of soil, water quality, and 

wildlife habitat (including habitat during nesting seasons for 

birds in the area)—

‘‘(A) managed harvesting and grazing (including the 

managed harvesting of biomass), except that in permitting 

managed harvesting and grazing, the Secretary—

‘‘(i) shall, in coordination with the State technical 

committee—

‘‘(I) develop appropriate vegetation management requirements; and 

‘‘(II) identify periods during which harvesting 

and grazing under this paragraph may be conducted; 

‘‘(ii) may permit harvesting and grazing or other 

commercial use of the forage on the land that is subject 

to the contract in response to a drought or other emergency; and 

‘‘(iii) shall, in the case of routine managed harvesting or grazing or harvesting or grazing conducted 

in response to a drought or other emergency, reduce the 

rental payment otherwise payable under the contract 

by an amount commensurate with the economic value 

of the activity; and 

‘‘(B) the installation of wind turbines, except that in 

permitting the installation of wind turbines, the Secretary 

shall determine the number and location of wind turbines 

that may be installed, taking into account—

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‘‘(i) the location, size, and other physical characteristics of the land; 

‘‘(ii) the extent to which the land contains wildlife 

and wildlife habitat; and 

‘‘(iii) the purposes of the conservation reserve program under this subchapter;

‘‘(8) not to conduct any planting of trees on land that is 

subject to the contract unless the contract specifies that the harvesting and commercial sale of trees such as Christmas trees 

are prohibited, nor otherwise make commercial use of trees on 

land that is subject to the contract unless it is expressly permitted in the contract, nor adopt any similar practice specified 

in the contract by the Secretary as a practice that would tend 

to defeat the purposes of the contract, except that no contract 

shall prohibit activities consistent with customary forestry practice, such as pruning, thinning, or stand improvement of trees, 

on land converted to forestry use; 

‘‘(9) not to adopt any practice specified by the Secretary in 

the contract as a practice that would tend to defeat the purposes 

of this subchapter; and 

‘‘(10) to comply with such additional provisions as the Secretary determines are desirable and are included in the contract 

to carry out this subchapter or to facilitate the practical administration of this subchapter. 

‘‘(b) CONSERVATION PLANS.—The plan referred to in subsection 

(a)(1)—

‘‘(1) shall set forth—

‘‘(A) the conservation measures and practices to be carried out by the owner or operator during the term of the 

contract; and 

‘‘(B) the commercial use, if any, to be permitted on the 

land during the term; and 

‘‘(2) may provide for the permanent retirement of any existing cropland base and allotment history for the land. 

‘‘(c) FORECLOSURE.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

law, an owner or operator who is a party to a contract entered 

into under this subchapter may not be required to make repayments to the Secretary of amounts received under the contract 

if the land that is subject to the contract has been foreclosed on 

and the Secretary determines that forgiving the repayments is 

appropriate in order to provide fair and equitable treatment. 

‘‘(2) RESUMPTION OF CONTROL.—

‘‘(A) IN GENERAL.—This subsection shall not void the 

responsibilities of an owner or operator under the contract 

if the owner or operator resumes control over the land that 

is subject to the contract within the period specified in the 

contract. 

‘‘(B) CONTRACT.—On the resumption of the control over 

the land by the owner or operator, the provisions of the contract in effect on the date of the foreclosure shall apply. 

‘‘SEC. 1233. DUTIES OF THE SECRETARY. 

‘‘In return for a contract entered into by an owner or operator 

under section 1232, the Secretary shall—

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‘‘(1) share the cost of carrying out the conservation measures and practices set forth in the contract for which the Secretary determines that cost sharing is appropriate and in the 

public interest; and ‘‘(2) for a period of years not in excess of the term of the 

contract, pay an annual rental payment in an amount necessary to compensate for— ‘‘(A) the conversion of highly erodible cropland normally devoted to the production of an agricultural commodity on a farm or ranch to a less intensive use; and ‘‘(B) the retirement of any cropland base and allotment 

history that the owner or operator agrees to retire permanently. 

‘‘SEC. 1234. PAYMENTS. 

‘‘(a) TIMING.—The Secretary shall provide payment for obligations incurred by the Secretary under a contract entered into under 

this subchapter— ‘‘(1) with respect to any cost-sharing payment obligation incurred by the Secretary, as soon as practicable after the obligation is incurred; and ‘‘(2) with respect to any annual rental payment obligation 

incurred by the Secretary— ‘‘(A) as soon as practicable after October 1 of each calendar year; or ‘‘(B) at the option of the Secretary, at any time prior to 

such date during the year that the obligation is incurred. ‘‘(b) FEDERAL PERCENTAGE OF COST SHARING PAYMENTS.— ‘‘(1) IN GENERAL.—In making cost sharing payments to an 

owner or operator under a contract entered into under this subchapter, the Secretary shall pay 50 percent of the cost of establishing water quality and conservation measures and practices 

required under each contract for which the Secretary determines that cost sharing is appropriate and in the public interest. ‘‘(2) LIMITATION.—The Secretary shall not make any payment to an owner or operator under this subchapter to the extent that the total amount of cost sharing payments provided to 

the owner or operator from all sources would exceed 100 percent 

of the total cost of establishing measures and practices described in paragraph (1). ‘‘(3) HARDWOOD TREES, WINDBREAKS, SHELTERBELTS, AND

WILDLIFE CORRIDORS.—

‘‘(A) APPLICABILITY.—This paragraph applies to—

‘‘(i) land devoted to the production of hardwood 

trees, windbreaks, shelterbelts, or wildlife corridors 

under a contract entered into under this subchapter 

after November 28, 1990; and 

‘‘(ii) land converted to such production under section 1235A. 

‘‘(B) PAYMENTS.—In making cost share payments to an 

owner or operator of land described in subparagraph (A), 

the Secretary shall pay 50 percent of the reasonable and 

necessary costs, as determined by the Secretary, incurred by 

the owner or operator for maintaining trees or shrubs, including the cost of replanting (if the trees or shrubs were 

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lost due to conditions beyond the control of the owner or operator), during not less than the 2-year, and not more than 

the 4-year, period beginning on the date of the planting of 

the trees or shrubs, as determined appropriate by the Secretary. 

‘‘(4) HARDWOOD TREE PLANTING.—The Secretary may permit owners or operators that contract to devote at least 10 acres 

of land to the production of hardwood trees under this subchapter to extend the planting of the trees over a 3-year period 

if at least 1⁄3 of the trees are planted in each of the first 2 years. 

‘‘(5) OTHER FEDERAL COST SHARE ASSISTANCE.—An owner 

or operator shall not be eligible to receive or retain cost share 

assistance under this subsection if the owner or operator receives any other Federal cost share assistance with respect to 

the land under any other provision of law. 

‘‘(c) ANNUAL RENTAL PAYMENTS.—

‘‘(1) IN GENERAL.—In determining the amount of annual 

rental payments to be paid to owners and operators for converting highly erodible cropland normally devoted to the production of an agricultural commodity to less intensive use, the 

Secretary may consider, among other things, the amount necessary to encourage owners or operators of highly erodible cropland to participate in the program established by this subchapter. 

‘‘(2) METHOD OF DETERMINATION.—The amounts payable to 

owners or operators in the form of rental payments under contracts entered into under this subchapter may be determined 

through—

‘‘(A) the submission of bids for such contracts by owners and operators in such manner as the Secretary may 

prescribe; or 

‘‘(B) such other means as the Secretary determines are 

appropriate.

‘‘(3) ACCEPTANCE OF CONTRACT OFFERS.—In determining 

the acceptability of contract offers, the Secretary may—

‘‘(A) take into consideration the extent to which enrollment of the land that is the subject of the contract offer 

would improve soil resources, water quality, wildlife habitat, or provide other environmental benefits; and 

‘‘(B) establish different criteria in various States and 

regions of the United States based on the extent to which 

water quality or wildlife habitat may be improved or erosion may be abated. 

‘‘(4) HARDWOOD TREE ACREAGE.—In the case of acreage enrolled in the conservation reserve established under this subchapter that is to be devoted to hardwood trees, the Secretary 

may consider bids for contracts under this subsection on a continuous basis. 

‘‘(d) CASH OR IN-KIND PAYMENTS.—

‘‘(1) IN GENERAL.—Except as otherwise provided in this section, payments under this subchapter—

‘‘(A) shall be made in cash or in commodities in such 

amount and on such time schedule as is agreed on and 

specified in the contract; and 

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‘‘(B) may be made in advance of determination of performance. 

‘‘(2) METHOD OF PROVIDING IN-KIND PAYMENTS.—If the payment to an owner or operator is made with in-kind commodities, the payment shall be made by the Commodity Credit Corporation—

‘‘(A) by delivery of the commodity involved to the owner 

or operator at a warehouse or other similar facility located 

in the county in which the highly erodible cropland is located or at such other location as is agreed to by the Secretary and the owner or operator; 

‘‘(B) by the transfer of negotiable warehouse receipts; or 

‘‘(C) by such other method, including the sale of the 

commodity in commercial markets, as is determined by the 

Secretary to be appropriate to enable the owner or operator 

to receive efficient and expeditious possession of the commodity. 

‘‘(3) CASH PAYMENTS.—

‘‘(A) COMMODITY CREDIT CORPORATION STOCKS.—If 

stocks of a commodity acquired by the Commodity Credit 

Corporation are not readily available to make full payment 

in kind to the owner or operator, the Secretary may substitute full or partial payment in cash for payment in kind. 

‘‘(B) SPECIAL CONSERVATION RESERVE ENHANCEMENT

PROGRAM.—Payments to an owner or operator under a special conservation reserve enhancement program described 

in subsection (f)(4) shall be in the form of cash only. 

‘‘(e) PAYMENTS ON DEATH, DISABILITY, OR SUCCESSION.—If an 

owner or operator that is entitled to a payment under a contract entered into under this subchapter dies, becomes incompetent, is otherwise unable to receive the payment, or is succeeded by another person that renders or completes the required performance, the Secretary shall make the payment, in accordance with regulations prescribed by the Secretary and without regard to any other provision 

of law, in such manner as the Secretary determines is fair and reasonable in light of all of the circumstances. 

‘‘(f) PAYMENT LIMITATION FOR RENTAL PAYMENTS.—

‘‘(1) IN GENERAL.—The total amount of rental payments, including rental payments made in the form of in-kind commodities, made to a person under this subchapter for any fiscal year 

may not exceed $50,000. 

‘‘(2) REGULATIONS.—

‘‘(A) IN GENERAL.—The Secretary shall promulgate regulations—

‘‘(i) defining the term ‘person’ as used in this subsection; and 

‘‘(ii) providing such terms and conditions as the 

Secretary determines necessary to ensure a fair and 

reasonable application of the limitation established by 

this subsection. 

‘‘(B) CORPORATIONS AND STOCKHOLDERS.—The regulations promulgated by the Secretary on December 18, 1970, 

under section 101 of the Agricultural Act of 1970 (7 U.S.C. 

1307), shall be used to determine whether corporations and 

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their stockholders may be considered as separate persons 

under this subsection. 

‘‘(3) OTHER PAYMENTS.—Rental payments received by an 

owner or operator shall be in addition to, and not affect, the 

total amount of payments that the owner or operator is otherwise eligible to receive under the Farm Security and Rural Investment Act of 2002. ‘‘(4) SPECIAL CONSERVATION RESERVE ENHANCEMENT PRO- GRAM.— ‘‘(A) IN GENERAL.—The provisions of this subsection 

that limit payments to any person, and section 1305(d) of 

the Agricultural Reconciliation Act of 1987 (7 U.S.C. 1308 

note; Public Law 100–203), shall not be applicable to payments received by a State, political subdivision, or agency 

thereof in connection with agreements entered into under a 

special conservation reserve enhancement program carried 

out by that entity that has been approved by the Secretary. ‘‘(B) AGREEMENTS.—The Secretary may enter into such 

agreements for payments to States (including political subdivisions and agencies of States) that the Secretary determines will advance the purposes of this subchapter. ‘‘(g) OTHER STATE OR LOCAL ASSISTANCE.—In addition to any 

payment under this subchapter, an owner or operator may receive 

cost share assistance, rental payments, or tax benefits from a State 

or subdivision thereof for enrolling land in the conservation reserve 

program. 

‘‘SEC. 1235. CONTRACTS. 

‘‘(a) OWNERSHIP OR OPERATION REQUIREMENTS.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), no 

contract shall be entered into under this subchapter concerning 

land with respect to which the ownership has changed in the 

1-year period preceding the first year of the contract period unless— ‘‘(A) the new ownership was acquired by will or succession as a result of the death of the previous owner; ‘‘(B) the new ownership was acquired before January 1, 

1985; ‘‘(C) the Secretary determines that the land was acquired under circumstances that give adequate assurance 

that the land was not acquired for the purpose of placing 

the land in the program established by this subchapter; or 

‘‘(D) the ownership change occurred due to foreclosure 

on the land and the owner of the land immediately before 

the foreclosure exercises a right of redemption from the 

mortgage holder in accordance with State law. 

‘‘(2) EXCEPTIONS.—Paragraph (1) shall not—

‘‘(A) prohibit the continuation of an agreement by a 

new owner after an agreement has been entered into under 

this subchapter; or 

‘‘(B) require a person to own the land as a condition of 

eligibility for entering into the contract if the person—

‘‘(i) has operated the land to be covered by a contract under this section for at least 1 year preceding the 

date of the contract or since January 1, 1985, whichever is later; and 

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‘‘(ii) controls the land for the contract period. ‘‘(b) SALES OR TRANSFERS.—If, during the term of a contract entered into under this subchapter, an owner or operator of land subject to the contract sells or otherwise transfers the ownership or 

right of occupancy of the land, the new owner or operator of the 

land may—

‘‘(1) continue the contract under the same terms or conditions; ‘‘(2) enter into a new contract in accordance with this subchapter; or ‘‘(3) elect not to participate in the program established by 

this subchapter. 

‘‘(c) MODIFICATIONS.— ‘‘(1) IN GENERAL.—The Secretary may modify a contract entered into with an owner or operator under this subchapter if— ‘‘(A) the owner or operator agrees to the modification; 

and ‘‘(B) the Secretary determines that the modification is 

desirable—

‘‘(i) to carry out this subchapter; 

‘‘(ii) to facilitate the practical administration of 

this subchapter; or ‘‘(iii) to achieve such other goals as the Secretary 

determines are appropriate, consistent with this subchapter. ‘‘(2) PRODUCTION OF AGRICULTURAL COMMODITIES.—The 

Secretary may modify or waive a term or condition of a contract 

entered into under this subchapter in order to permit all or part 

of the land subject to such contract to be devoted to the production of an agricultural commodity during a crop year, subject 

to such conditions as the Secretary determines are appropriate. 

‘‘(d) TERMINATION.—

‘‘(1) IN GENERAL.—The Secretary may terminate a contract 

entered into with an owner or operator under this subchapter 

if—

‘‘(A) the owner or operator agrees to the termination; 

and 

‘‘(B) the Secretary determines that the termination 

would be in the public interest. 

‘‘(2) NOTICE TO CONGRESSIONAL COMMITTEES.—At least 90 

days before taking any action to terminate under paragraph (1) 

all conservation reserve contracts entered into under this subchapter, the Secretary shall provide to the Committee on Agriculture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate written notice 

of the action. 

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

‘‘(1) EARLY TERMINATION.—

‘‘(A) IN GENERAL.—The Secretary shall allow a participant that entered into a contract under this subchapter before January 1, 1995, to terminate the contract at any time 

if the contract has been in effect for at least 5 years. ‘‘(B) LIABILITY FOR CONTRACT VIOLATION.—The termination shall not relieve the participant of liability for a contract violation occurring before the date of the termination. 

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‘‘(C) NOTICE TO SECRETARY.—The participant shall 

provide the Secretary with reasonable notice of the desire of 

the participant to terminate the contract. 

‘‘(2) CERTAIN LAND EXCEPTED.—The following land shall 

not be subject to an early termination of contract under this 

subsection: 

‘‘(A) Filterstrips, waterways, strips adjacent to riparian 

areas, windbreaks, and shelterbelts. 

‘‘(B) Land with an erodibility index of more than 15. 

‘‘(C) Other land of high environmental value (including 

wetland), as determined by the Secretary. 

‘‘(3) EFFECTIVE DATE.—The contract termination shall become effective 60 days after the date on which the owner or operator submits the notice required under paragraph (1)(C). 

‘‘(4) PRORATED RENTAL PAYMENT.—If a contract entered 

into under this subchapter is terminated under this subsection 

before the end of the fiscal year for which a rental payment is 

due, the Secretary shall provide a prorated rental payment covering the portion of the fiscal year during which the contract 

was in effect. 

‘‘(5) RENEWED ENROLLMENT.—The termination of a contract 

entered into under this subchapter shall not affect the ability of 

the owner or operator that requested the termination to submit 

a subsequent bid to enroll the land that was subject to the contract into the conservation reserve. 

‘‘(6) CONSERVATION REQUIREMENTS.—If land that was subject to a contract is returned to production of an agricultural 

commodity, the conservation requirements under subtitles B 

and C shall apply to the use of the land to the extent that the 

requirements are similar to those requirements imposed on 

other similar land in the area, except that the requirements 

may not be more onerous than the requirements imposed on 

other land. 

‘‘SEC. 1235A. CONVERSION OF LAND SUBJECT TO CONTRACT TO 

OTHER CONSERVING USES. 

‘‘(a) CONVERSION TO TREES.—

‘‘(1) IN GENERAL.—The Secretary shall permit an owner or 

operator that has entered into a contract under this subchapter 

that is in effect on November 28, 1990, to convert areas of highly erodible cropland that are subject to the contract, and that 

are devoted to vegetative cover, from that use to hardwood trees, 

windbreaks, shelterbelts, or wildlife corridors. 

‘‘(2) TERMS.—

‘‘(A) EXTENSION OF CONTRACT.—With respect to a contract that is modified under this section that provides for 

the planting of hardwood trees, windbreaks, shelterbelts, or 

wildlife corridors, if the original term of the contract was 

less than 15 years, the owner or operator may extend the 

contract to a term of not to exceed 15 years. 

‘‘(B) COST SHARE ASSISTANCE.—The Secretary shall 

pay 50 percent of the cost of establishing conservation 

measures and practices authorized under this subsection 

for which the Secretary determines the cost sharing is appropriate and in the public interest. 

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‘‘(b) CONVERSION TO WETLAND.—The Secretary shall permit an 

owner or operator that has entered into a contract under this subchapter that is in effect on November 28, 1990, to restore areas of 

highly erodible cropland that are devoted to vegetative cover under 

the contract to wetland if—

‘‘(1) the areas are prior converted wetland; 

‘‘(2) the owner or operator of the areas enters into an agreement to provide the Secretary with a long-term or permanent 

easement under subchapter C covering the areas; 

‘‘(3) there is a high probability that the prior converted area 

can be successfully restored to wetland status; and 

‘‘(4) the restoration of the areas otherwise meets the requirements of subchapter C. 

‘‘(c) LIMITATION.—The Secretary shall not incur, through a conversion under this section, any additional expense on the acres, including the expense involved in the original establishment of the 

vegetative cover, that would result in cost share for costs under this 

section in excess of the costs that would have been subject to cost 

share for the new practice had that practice been the original practice. 

‘‘(d) CONDITION OF CONTRACT.—An owner or operator shall as 

a condition of entering into a contract under subsection (a) participate in the Forest Stewardship Program established under section 

5 of the Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 

2103a).’’. 

(b) STUDY ON ECONOMIC EFFECTS.—

(1) IN GENERAL.—Not later than 18 months after the date 

of enactment of this Act, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry 

of the Senate a report that describes the economic and social effects on rural communities resulting from the conservation reserve program established under subchapter B of chapter 1 of 

subtitle D of title XII of the Food Security Act of 1985 (16 

U.S.C. 3831 et seq.). 

(2) COMPONENTS.—The study under paragraph (1) shall include analyses of—

(A) the impact that enrollments in the conservation reserve program have on rural businesses, civic organizations, and community services (such as schools, public safety, and infrastructure), particularly in communities with a 

large percentage of whole farm enrollments; 

(B) the effect that those enrollments have on rural population and beginning farmers (including a description of 

any connection between the rate of enrollment and the incidence of absentee ownership); 

(C)(i) the manner in which differential per acre payment rates potentially impact the types of land (by productivity) enrolled; 

(ii) changes to the per acre payment rates that may affect that impact; and 

(iii) the manner in which differential per acre payment 

rates could facilitate retention of productive agricultural 

land in agriculture; and 

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(D) the effect of enrollment on opportunities for recreational activities (including hunting and fishing). 

Subtitle C—Wetlands Reserve Program 

SEC. 2201. REAUTHORIZATION. 

Section 1237(c) of the Food Security Act of 1985 (16 U.S.C. 

3837(c)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 2202. ENROLLMENT. 

Section 1237 of the Food Security Act of 1985 (16 U.S.C. 3837) 

is amended— (1) by striking subsection (b) and inserting the following: ‘‘(b) ENROLLMENT CONDITIONS.— ‘‘(1) MAXIMUM ENROLLMENT.—The total number of acres enrolled in the wetlands reserve program shall not exceed 

2,275,000 acres, of which, to the maximum extent practicable, 

the Secretary shall enroll 250,000 acres in each calendar year. ‘‘(2) METHODS OF ENROLLMENT.—The Secretary shall enroll 

acreage into the wetlands reserve program through the use of 

permanent easements, 30-year easements, restoration cost share 

agreements, or any combination of those options.’’; and 

(2) by striking subsection (g). 

SEC. 2203. EASEMENTS AND AGREEMENTS. 

Section 1237A of the Food Security Act of 1985 (16 U.S.C. 

3837a) is amended by striking subsection (h).

SEC. 2204. CHANGES IN OWNERSHIP; AGREEMENT MODIFICATION; 

TERMINATION. 

Section 1237E(a) of the Food Security Act of 1985 (16 U.S.C. 

3837e(a)) is amended by striking paragraph (2) and inserting the 

following: ‘‘(2)(A) the ownership change occurred because of foreclosure on the land; and 

‘‘(B) immediately before the foreclosure, the owner of the 

land exercises a right of redemption from the mortgage holder 

in accordance with State law; or’’. 

Subtitle D—Environmental Quality 

Incentives

SEC. 2301. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM. 

Chapter 4 of subtitle D of title XII of the Food Security Act of 

1985 (16 U.S.C. 3839aa et seq.) is amended to read as follows: 

‘‘SEC. 1240. PURPOSES. 

‘‘The purposes of the environmental quality incentives program 

established by this chapter are to promote agricultural production 

and environmental quality as compatible goals, and to optimize environmental benefits, by—

‘‘(1) assisting producers in complying with local, State, and 

national regulatory requirements concerning—

‘‘(A) soil, water, and air quality; 

‘‘(B) wildlife habitat; and 

‘‘(C) surface and ground water conservation; 

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‘‘(2) avoiding, to the maximum extent practicable, the need 

for resource and regulatory programs by assisting producers in 

protecting soil, water, air, and related natural resources and 

meeting environmental quality criteria established by Federal, 

State, tribal, and local agencies; ‘‘(3) providing flexible assistance to producers to install and 

maintain conservation practices that enhance soil, water, related natural resources (including grazing land and wetland), 

and wildlife while sustaining production of food and fiber; ‘‘(4) assisting producers to make beneficial, cost effective 

changes to cropping systems, grazing management, nutrient 

management associated with livestock, pest or irrigation management, or other practices on agricultural land; and ‘‘(5) consolidating and streamlining conservation planning 

and regulatory compliance processes to reduce administrative 

burdens on producers and the cost of achieving environmental 

goals. 

‘‘SEC. 1240A. DEFINITIONS. 

‘‘In this chapter: ‘‘(1) BEGINNING FARMER OR RANCHER.—The term ‘beginning 

farmer or rancher’ has the meaning provided under section 

343(a) of the Consolidated Farm and Rural Development Act (7 

U.S.C. 1999(a)). ‘‘(2) ELIGIBLE LAND.— ‘‘(A) IN GENERAL.—The term ‘eligible land’ means land 

on which agricultural commodities or livestock are produced. ‘‘(B) INCLUSIONS.—The term ‘eligible land’ includes— ‘‘(i) cropland; 

‘‘(ii) grassland; 

‘‘(iii) rangeland; 

‘‘(iv) pasture land; 

‘‘(v) private, nonindustrial forest land; and 

‘‘(vi) other agricultural land that the Secretary determines poses a serious threat to soil, air, water, or related resources. ‘‘(3) LAND MANAGEMENT PRACTICE.—The term ‘land management practice’ means a site-specific nutrient or manure management, integrated pest management, irrigation management, 

tillage or residue management, grazing management, air quality management, or other land management practice carried out 

on eligible land that the Secretary determines is needed to protect from degradation, in the most cost-effective manner, water, 

soil, or related resources. 

‘‘(4) LIVESTOCK.—The term ‘livestock’ means dairy cattle, 

beef cattle, laying hens, broilers, turkeys, swine, sheep, and 

other such animals as are determined by the Secretary. 

‘‘(5) PRACTICE.—The term ‘practice’ means 1 or more structural practices, land management practices, and comprehensive 

nutrient management planning practices. 

‘‘(6) STRUCTURAL PRACTICE.—The term ‘structural practice’

means—

‘‘(A) the establishment on eligible land of a site-specific 

animal waste management facility, terrace, grassed waterway, contour grass strip, filterstrip, tailwater pit, permaVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00127 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
124

nent wildlife habitat, constructed wetland, or other structural practice that the Secretary determines is needed to 

protect, in the most cost effective manner, water, soil, or related resources from degradation; and 

‘‘(B) the capping of abandoned wells on eligible land. 

‘‘SEC. 1240B. ESTABLISHMENT AND ADMINISTRATION OF ENVIRONMENTAL QUALITY INCENTIVES PROGRAM. 

‘‘(a) ESTABLISHMENT.—

‘‘(1) IN GENERAL.—During each of the 2002 through 2007 

fiscal years, the Secretary shall provide cost-share payments 

and incentive payments to producers that enter into contracts 

with the Secretary under the program. 

‘‘(2) ELIGIBLE PRACTICES.—With respect to practices implemented under this chapter—

‘‘(A) a producer that implements a structural practice 

in accordance with this chapter shall be eligible to receive 

cost-share payments; and 

‘‘(B) a producer that implements a land management 

practice, or develops a comprehensive nutrient management 

plan, in accordance with this chapter shall be eligible to receive incentive payments. 

‘‘(b) PRACTICES AND TERM.—

‘‘(1) PRACTICES.—A contract under this chapter may apply 

to 1 or more structural practices, land management practices, 

and comprehensive nutrient management practices. 

‘‘(2) TERM.—A contract under this chapter shall have a 

term that—

‘‘(A) at a minimum, is equal to the period beginning on 

the date on which the contract is entered into and ending 

on the date that is 1 year after the date on which all practices under the contract have been implemented; but 

‘‘(B) not to exceed 10 years. 

‘‘(c) BIDDING DOWN.—If the Secretary determines that the environmental values of 2 or more applications for cost-share payments 

or incentive payments are comparable, the Secretary shall not assign a higher priority to the application only because it would 

present the least cost to the program established under the program. 

‘‘(d) COST-SHARE PAYMENTS.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the 

cost-share payments provided to a producer proposing to implement 1 or more practices under the program shall be not more 

than 75 percent of the cost of the practice, as determined by the 

Secretary. 

‘‘(2) EXCEPTIONS.—

‘‘(A) LIMITED RESOURCE AND BEGINNING FARMERS.—

The Secretary may increase the amount provided to a producer under paragraph (1) to not more than 90 percent if 

the producer is a limited resource or beginning farmer or 

rancher, as determined by the Secretary. 

‘‘(B) COST-SHARE ASSISTANCE FROM OTHER SOURCES.—

Except as provided in paragraph (3), any cost-share payments received by a producer from a State or private organization or person for the implementation of 1 or more 

practices on eligible land of the producer shall be in addiVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00128 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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tion to the payments provided to the producer under paragraph (1). 

‘‘(3) OTHER PAYMENTS.—A producer shall not be eligible for 

cost-share payments for practices on eligible land under the program if the producer receives cost-share payments or other benefits for the same practice on the same land under chapter 1 and 

the program. 

‘‘(e) INCENTIVE PAYMENTS.—

‘‘(1) IN GENERAL.—The Secretary shall make incentive payments in an amount and at a rate determined by the Secretary 

to be necessary to encourage a producer to perform 1 or more 

land management practices. 

‘‘(2) SPECIAL RULE.—In determining the amount and rate of 

incentive payments, the Secretary may accord great significance 

to a practice that promotes residue, nutrient, pest, invasive species, or air quality management. 

‘‘(f) MODIFICATION OR TERMINATION OF CONTRACTS.—

‘‘(1) VOLUNTARY MODIFICATION OR TERMINATION.—The Secretary may modify or terminate a contract entered into with a 

producer under this chapter if—

‘‘(A) the producer agrees to the modification or termination; and

‘‘(B) the Secretary determines that the modification or 

termination is in the public interest. 

‘‘(2) INVOLUNTARY TERMINATION.—The Secretary may terminate a contract under this chapter if the Secretary determines 

that the producer violated the contract. 

‘‘(g) ALLOCATION OF FUNDING.—For each of fiscal years 2002 

through 2007, 60 percent of the funds made available for cost-share 

payments and incentive payments under this chapter shall be targeted at practices relating to livestock production. 

‘‘SEC. 1240C. EVALUATION OF OFFERS AND PAYMENTS. 

‘‘In evaluating applications for cost-share payments and incentive payments, the Secretary shall accord a higher priority to assistance and payments that—

‘‘(1) encourage the use by producers of cost-effective conservation practices; and 

‘‘(2) address national conservation priorities. 

‘‘SEC. 1240D. DUTIES OF PRODUCERS. 

‘‘To receive technical assistance, cost-share payments, or incentive payments under the program, a producer shall agree— ‘‘(1) to implement an environmental quality incentives program plan (including a comprehensive nutrient management 

plan, if applicable) that describes conservation and environmental purposes to be achieved through 1 or more practices that 

are approved by the Secretary; 

‘‘(2) not to conduct any practices on the farm or ranch that 

would tend to defeat the purposes of the program; 

‘‘(3) on the violation of a term or condition of the contract 

at anytime the producer has control of the land—

‘‘(A) if the Secretary determines that the violation warrants termination of the contract—

‘‘(i) to forfeit all rights to receive payments under 

the contract; and 

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‘‘(ii) to refund to the Secretary all or a portion of 

the payments received by the owner or operator under 

the contract, including any interest on the payments, as 

determined by the Secretary; or 

‘‘(B) if the Secretary determines that the violation does 

not warrant termination of the contract, to refund to the 

Secretary, or accept adjustments to, the payments provided 

to the owner or operator, as the Secretary determines to be 

appropriate; 

‘‘(4) on the transfer of the right and interest of the producer 

in land subject to the contract, unless the transferee of the right 

and interest agrees with the Secretary to assume all obligations 

of the contract, to refund all cost-share payments and incentive 

payments received under the program, as determined by the 

Secretary; 

‘‘(5) to supply information as required by the Secretary to 

determine compliance with the program plan and requirements 

of the program; and 

‘‘(6) to comply with such additional provisions as the Secretary determines are necessary to carry out the program plan. 

‘‘SEC. 1240E. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN. 

‘‘(a) IN GENERAL.—To be eligible to receive cost-share payments 

or incentive payments under the program, a producer shall submit 

to the Secretary for approval a plan of operations that—

‘‘(1) specifies practices covered under the program; 

‘‘(2) includes such terms and conditions as the Secretary 

considers necessary to carry out the program, including a description of the purposes to be met by the implementation of the 

plan; and 

‘‘(3) in the case of a confined livestock feeding operation, 

provides for development and implementation of a comprehensive nutrient management plan, if applicable. 

‘‘(b) AVOIDANCE OF DUPLICATION.—The Secretary shall, to the 

maximum extent practicable, eliminate duplication of planning activities under the program under this chapter and comparable conservation programs. 

‘‘SEC. 1240F. DUTIES OF THE SECRETARY. 

‘‘To the extent appropriate, the Secretary shall assist a producer 

in achieving the conservation and environmental goals of a program 

plan by—

‘‘(1) providing cost-share payments or incentive payments 

for developing and implementing 1 or more practices, as appropriate; and 

‘‘(2) providing the producer with information and training 

to aid in implementation of the plan. 

‘‘SEC. 1240G. LIMITATION ON PAYMENTS. 

‘‘An individual or entity may not receive, directly or indirectly, 

cost-share or incentive payments under this chapter that, in the aggregate, exceed $450,000 for all contracts entered into under this 

chapter by the individual or entity during the period of fiscal years 

2002 through 2007, regardless of the number of contracts entered 

into under this chapter by the individual or entity. 

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‘‘SEC. 1240H. CONSERVATION INNOVATION GRANTS. 

‘‘(a) IN GENERAL.—The Secretary may pay the cost of competitive grants that are intended to stimulate innovative approaches to 

leveraging Federal investment in environmental enhancement and 

protection, in conjunction with agricultural production, through the 

program. ‘‘(b) USE.—The Secretary may provide grants under this section 

to governmental and nongovernmental organizations and persons, 

on a competitive basis, to carry out projects that— ‘‘(1) involve producers that are eligible for payments or 

technical assistance under the program; ‘‘(2) implement projects, such as— ‘‘(A) market systems for pollution reduction; and 

‘‘(B) innovative conservation practices, including the 

storing of carbon in the soil; and 

‘‘(3) leverage funds made available to carry out the program 

under this chapter with matching funds provided by State and 

local governments and private organizations to promote environmental enhancement and protection in conjunction with agricultural production. 

‘‘(c) COST SHARE.—The amount of a grant made under this section to carry out a project shall not exceed 50 percent of the cost of 

the project. 

‘‘SEC. 1240I. GROUND AND SURFACE WATER CONSERVATION. 

‘‘(a) ESTABLISHMENT.—In carrying out the program under this 

chapter, subject to subsection (b), the Secretary shall promote 

ground and surface water conservation by providing cost-share payments, incentive payments, and loans to producers to carry out eligible water conservation activities with respect to the agricultural operations of producers, to— ‘‘(1) improve irrigation systems; 

‘‘(2) enhance irrigation efficiencies; 

‘‘(3) convert to— ‘‘(A) the production of less water-intensive agricultural 

commodities; or 

‘‘(B) dryland farming; 

‘‘(4) improve the storage of water through measures such as 

water banking and groundwater recharge; 

‘‘(5) mitigate the effects of drought; or 

‘‘(6) institute other measures that improve groundwater and 

surface water conservation, as determined by the Secretary, in 

the agricultural operations of producers. 

‘‘(b) NET SAVINGS.—The Secretary may provide assistance to a 

producer under this section only if the Secretary determines that the 

assistance will facilitate a conservation measure that results in a 

net savings in groundwater or surface water resources in the agricultural operation of the producer. 

‘‘(c) FUNDING.—Of the funds of the Commodity Credit Corporation, in addition to amounts made available under section 

1241(a)(6) to carry out this chapter, the Secretary shall use—

‘‘(1) to carry out this section—

‘‘(A) $25,000,000 for fiscal year 2002; 

‘‘(B) $45,000,000 for fiscal year 2003; and 

‘‘(C) $60,000,000 for each of fiscal years 2004 through 

2007; and 

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‘‘(2) $50,000,000 to carry out water conservation activities 

in Klamath Basin, California and Oregon, to be made available 

as soon as practicable after the date of enactment of this section.’’. 

Subtitle E—Grassland Reserve 

SEC. 2401. GRASSLAND RESERVE PROGRAM. 

Chapter 2 of the Food Security Act of 1985 (as amended by section 2001) is amended by adding at the end the following: 

‘‘Subchapter C—Grassland Reserve Program 

‘‘SEC. 1238N. GRASSLAND RESERVE PROGRAM. 

‘‘(a) ESTABLISHMENT.—The Secretary shall establish a grassland reserve program (referred to in this subchapter as the ‘program’) to assist owners in restoring and conserving eligible land described in subsection (c).

‘‘(b) ENROLLMENT CONDITIONS.—

‘‘(1) MAXIMUM ENROLLMENT.—The total number of acres enrolled in the program shall not exceed 2,000,000 acres of restored or improved grassland, rangeland, and pastureland. 

‘‘(2) METHODS OF ENROLLMENT.—

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

(B), the Secretary shall enroll in the program from a willing owner not less than 40 contiguous acres of land 

through the use of—

‘‘(i) a 10-year, 15-year, or 20-year rental agreement; 

‘‘(ii)(I) a 30-year rental agreement or permanent or 

30-year easement; or 

‘‘(II) in a State that imposes a maximum duration 

for easements, an easement for the maximum duration 

allowed under State law. 

‘‘(B) WAIVER.—The Secretary may enroll in the program such parcels of land that are less than 40 acres as 

the Secretary determines are appropriate to achieve the 

purposes of the program. 

‘‘(3) LIMITATION ON USE OF EASEMENTS AND RENTAL AGREEMENTS.—Of the total amount of funds expended under the program to acquire easements and rental agreements described in 

paragraph (2)(A)—

‘‘(A) not more than 40 percent shall be used for rental 

agreements described in paragraph (2)(A)(i); and 

‘‘(B) not more than 60 percent shall be used for easements and rental agreements described in paragraph 

(2)(A)(ii). 

‘‘(c) ELIGIBLE LAND.—Land shall be eligible to be enrolled in 

the program if the Secretary determines that the land is private 

land that is—

‘‘(1) grassland, land that contains forbs, or shrubland (including improved rangeland and pastureland); or 

‘‘(2) land that—

‘‘(A) is located in an area that has been historically 

dominated by grassland, forbs, or shrubland; and 

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‘‘(B) has potential to serve as habitat for animal or 

plant populations of significant ecological value if the land 

is—

‘‘(i) retained in the current use of the land; or 

‘‘(ii) restored to a natural condition; or 

‘‘(3) land that is incidental to land described in paragraph 

(1) or (2), if the incidental land is determined by the Secretary 

to be necessary for the efficient administration of an agreement 

or easement. 

‘‘SEC. 1238O. REQUIREMENTS RELATING TO EASEMENTS AND AGREEMENTS. 

‘‘(a) REQUIREMENTS OF LANDOWNER.—

‘‘(1) IN GENERAL.—To be eligible to enroll land in the program through the grant of an easement, the owner of the land 

shall enter into an agreement with the Secretary—

‘‘(A) to grant an easement that applies to the land to 

the Secretary; 

‘‘(B) to create and record an appropriate deed restriction in accordance with applicable State law to reflect the 

easement; 

‘‘(C) to provide a written statement of consent to the 

easement signed by persons holding a security interest or 

any vested interest in the land; 

‘‘(D) to provide proof of unencumbered title to the underlying fee interest in the land that is the subject of the 

easement; and 

‘‘(E) to comply with the terms of the easement and restoration agreement. 

‘‘(2) AGREEMENTS.—To be eligible to enroll land in the program under an agreement, the owner or operator of the land 

shall agree—

‘‘(A) to comply with the terms of the agreement (including any related restoration agreements); and 

‘‘(B) to the suspension of any existing cropland base 

and allotment history for the land under a program administered by the Secretary. 

‘‘(b) TERMS OF EASEMENT OR RENTAL AGREEMENT.—An easement or rental agreement under subsection (a) shall—

‘‘(1) permit—

‘‘(A) common grazing practices, including maintenance 

and necessary cultural practices, on the land in a manner 

that is consistent with maintaining the viability of grassland, forb, and shrub species common to that locality; 

‘‘(B) subject to appropriate restrictions during the nesting season for birds in the local area that are in significant 

decline or are conserved in accordance with Federal or 

State law, as determined by the Natural Resources Conservation Service State conservationist, haying, mowing, or 

harvesting for seed production; and 

‘‘(C) fire rehabilitation and construction of fire breaks 

and fences (including placement of the posts necessary for 

fences); 

‘‘(2) prohibit—

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‘‘(A) the production of crops (other than hay), fruit 

trees, vineyards, or any other agricultural commodity that 

requires breaking the soil surface; and 

‘‘(B) except as permitted under this subsection or subsection (d), the conduct of any other activity that would disturb the surface of the land covered by the easement or 

rental agreement; and 

‘‘(3) include such additional provisions as the Secretary determines are appropriate to carry out or facilitate the administration of this subchapter. 

‘‘(c) EVALUATION AND RANKING OF EASEMENT AND RENTAL

AGREEMENT APPLICATIONS.—

‘‘(1) IN GENERAL.—The Secretary shall establish criteria to 

evaluate and rank applications for easements and rental agreements under this subchapter. 

‘‘(2) CONSIDERATIONS.—In establishing the criteria, the Secretary shall emphasize support for—

‘‘(A) grazing operations; 

‘‘(B) plant and animal biodiversity; and 

‘‘(C) grassland, land that contains forbs, and 

shrubland under the greatest threat of conversion. 

‘‘(d) RESTORATION AGREEMENTS.—

‘‘(1) IN GENERAL.—The Secretary shall prescribe the terms 

of a restoration agreement by which grassland, land that contains forbs, or shrubland that is subject to an easement or rental agreement entered into under the program shall be restored. 

‘‘(2) REQUIREMENTS.—The restoration agreement shall describe the respective duties of the owner and the Secretary (including the Federal share of restoration payments and technical 

assistance). 

‘‘(e) VIOLATIONS.—On a violation of the terms or conditions of 

an easement, rental agreement, or restoration agreement entered 

into under this section—

‘‘(1) the easement or rental agreement shall remain in force; 

and 

‘‘(2) the Secretary may require the owner to refund all or 

part of any payments received by the owner under this subchapter, with interest on the payments as determined appropriate by the Secretary. 

‘‘SEC. 1238P. DUTIES OF SECRETARY. 

‘‘(a) IN GENERAL.—In return for the granting of an easement, or 

the execution of a rental agreement, by an owner under this subchapter, the Secretary shall, in accordance with this section—

‘‘(1) make easement or rental agreement payments to the 

owner in accordance with subsection (b); and 

‘‘(2) make payments to the owner for the Federal share of 

the cost of restoration in accordance with subsection (c). 

‘‘(b) PAYMENTS.—

‘‘(1) EASEMENT PAYMENTS.—

‘‘(A) AMOUNT.—In return for the granting of an easement by an owner under this subchapter, the Secretary 

shall make easement payments to the owner in an amount 

equal to—

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‘‘(i) in the case of a permanent easement, the fair 

market value of the land less the grazing value of the 

land encumbered by the easement; and ‘‘(ii) in the case of a 30-year easement or an easement for the maximum duration allowed under applicable State law, 30 percent of the fair market value of 

the land less the grazing value of the land for the period during which the land is encumbered by the easement. 

‘‘(B) SCHEDULE.—Easement payments may be provided 

in not less than 1 payment nor more than 10 annual payments of equal or unequal amount, as agreed to by the Secretary and the owner. 

‘‘(2) RENTAL AGREEMENT PAYMENTS.—In return for entering 

into a rental agreement by an owner under this subchapter, the 

Secretary shall make annual payments to the owner during the 

term of the rental agreement in an amount that is not more 

than 75 percent of the grazing value of the land covered by the 

contract.

‘‘(c) FEDERAL SHARE OF RESTORATION.—The Secretary shall 

make payments to an owner under this section of not more than— ‘‘(1) in the case of grassland, land that contains forbs, or 

shrubland that has never been cultivated, 90 percent of the 

costs of carrying out measures and practices necessary to restore 

functions and values of that land; or ‘‘(2) in the case of restored grassland, land that contains 

forbs, or shrubland, 75 percent of those costs. 

‘‘(d) PAYMENTS TO OTHERS.—If an owner that is entitled to a 

payment under this subchapter dies, becomes incompetent, is otherwise unable to receive the payment, or is succeeded by another person who renders or completes the required performance, the Secretary shall make the payment, in accordance with regulations promulgated by the Secretary and without regard to any other provision of law, in such manner as the Secretary determines is fair and 

reasonable in light of all the circumstances. 

‘‘SEC. 1238Q. DELEGATION TO PRIVATE ORGANIZATIONS. 

‘‘(a) IN GENERAL.—The Secretary may permit a private conservation or land trust organization (referred to in this section as 

a ‘private organization’) or a State agency to hold and enforce an 

easement under this subchapter, in lieu of the Secretary, subject to 

the right of the Secretary to conduct periodic inspections and enforce 

the easement, if—

‘‘(1) the Secretary determines that granting the permission 

will promote protection of grassland, land that contains forbs, 

and shrubland; 

‘‘(2) the owner authorizes the private organization or State 

agency to hold and enforce the easement; and 

‘‘(3) the private organization or State agency agrees to assume the costs incurred in administering and enforcing the 

easement, including the costs of restoration or rehabilitation of 

the land as specified by the owner and the private organization 

or State agency. 

‘‘(b) APPLICATION.—A private organization or State agency that 

seeks to hold and enforce an easement under this subchapter shall 

apply to the Secretary for approval. 

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‘‘(c) APPROVAL BY SECRETARY.—The Secretary may approve a 

private organization to hold and enforce an easement under this 

subchapter if (as determined by the Secretary) the private organization—

‘‘(1)(A) is an organization described in section 501(c)(3) of 

the Internal Revenue Code of 1986 that is exempt from taxation 

under section 501(a) of that Code; or 

‘‘(B) is described in section 509(a)(3), and is controlled by 

an organization described in section 509(a)(2), of that Code; 

‘‘(2) has the relevant experience necessary to administer 

grassland and shrubland easements; 

‘‘(3) has a charter that describes the commitment of the private organization to conserving ranchland, agricultural land, or 

grassland for grazing and conservation purposes; and 

‘‘(4) has the resources necessary to effectuate the purposes 

of the charter. 

‘‘(d) REASSIGNMENT.—

‘‘(1) IN GENERAL.—If a private organization holding an 

easement on land under this subchapter terminates, not later 

than 30 days after termination of the private organization, the 

owner of the land shall reassign the easement to—

‘‘(A) a new private organization that is approved by the 

Secretary; or 

‘‘(B) the Secretary. 

‘‘(2) NOTIFICATION OF SECRETARY.—

‘‘(A) IN GENERAL.—If the easement is reassigned to a 

new private organization, not later than 60 days after the 

date of reassignment, the owner and the new organization 

shall notify the Secretary in writing that a reassignment 

for termination has been made. 

‘‘(B) FAILURE TO NOTIFY.—If the owner and the new organization fail to notify the Secretary of the reassignment 

in accordance with subparagraph (A), the easement shall 

revert to the control of the Secretary.’’. 

Subtitle F—Other Conservation Programs 

SEC. 2501. AGRICULTURAL MANAGEMENT ASSISTANCE. 

Section 524 of the Federal Crop Insurance Act (7 U.S.C. 1524) 

is amended by striking subsection (b) and inserting the following: 

‘‘(b) AGRICULTURAL MANAGEMENT ASSISTANCE.—

‘‘(1) AUTHORITY.—The Secretary shall provide financial assistance to producers in the States of Connecticut, Delaware, 

Maryland, Massachusetts, Maine, Nevada, New Hampshire, 

New Jersey, New York, Pennsylvania, Rhode Island, Utah, 

Vermont, West Virginia, and Wyoming. 

‘‘(2) USES.—A producer may use financial assistance provided under this subsection to—

‘‘(A) construct or improve—

‘‘(i) watershed management structures; or 

‘‘(ii) irrigation structures; 

‘‘(B) plant trees to form windbreaks or to improve water 

quality; 

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‘‘(C) mitigate financial risk through production or marketing diversification or resource conservation practices, including—

‘‘(i) soil erosion control; 

‘‘(ii) integrated pest management; 

‘‘(iii) organic farming; or 

‘‘(iv) to develop and implement a plan to create 

marketing opportunities for the producer, including 

through value-added processing; 

‘‘(D) enter into futures, hedging, or options contracts in 

a manner designed to help reduce production, price, or revenue risk; 

‘‘(E) enter into agricultural trade options as a hedging 

transaction to reduce production, price, or revenue risk; or 

‘‘(F) conduct any other activity relating to an activity 

described in subparagraphs (A) through (E), as determined 

by the Secretary.

‘‘(3) PAYMENT LIMITATION.—The total amount of payments 

made to a person (as defined in section 1001(5) of the Food Security Act (7 U.S.C. 1308(5))) under this subsection for any year 

may not exceed $50,000. 

‘‘(4) COMMODITY CREDIT CORPORATION.—

‘‘(A) IN GENERAL.—The Secretary shall carry out this 

subsection through the Commodity Credit Corporation. 

‘‘(B) FUNDING.—

‘‘(i) IN GENERAL.—Except as provided in clause (ii), 

the Commodity Credit Corporation shall make available to carry out this subsection not less than 

$10,000,000 for each fiscal year. 

‘‘(ii) EXCEPTION.—For each of fiscal years 2003 

through 2007, the Commodity Credit Corporation shall 

make available to carry out this subsection 

$20,000,000.’’. 

SEC. 2502. GRAZING, WILDLIFE HABITAT INCENTIVE, SOURCE WATER 

PROTECTION, AND GREAT LAKES BASIN PROGRAMS. 

(a) IN GENERAL.—Chapter 5 of subtitle D of title XII of the 

Food Security Act of 1985 (16 U.S.C. 3839bb et seq.) is amended to 

read as follows: 

‘‘CHAPTER 5—OTHER CONSERVATION PROGRAMS 

‘‘SEC. 1240M. CONSERVATION OF PRIVATE GRAZING LAND. 

‘‘(a) PURPOSE.—It is the purpose of this section to authorize the 

Secretary to provide a coordinated technical, educational, and related assistance program to conserve and enhance private grazing 

land resources and provide related benefits to all citizens of the 

United States by—

‘‘(1) establishing a coordinated and cooperative Federal, 

State, and local grazing conservation program for management 

of private grazing land; ‘‘(2) strengthening technical, educational, and related assistance programs that provide assistance to owners and managers of private grazing land; ‘‘(3) conserving and improving wildlife habitat on private 

grazing land; 

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‘‘(4) conserving and improving fish habitat and aquatic systems through grazing land conservation treatment; ‘‘(5) protecting and improving water quality; 

‘‘(6) improving the dependability and consistency of water 

supplies; ‘‘(7) identifying and managing weed, noxious weed, and 

brush encroachment problems on private grazing land; and ‘‘(8) integrating conservation planning and management 

decisions by owners and managers of private grazing land, on 

a voluntary basis. 

‘‘(b) DEFINITIONS.—In this section: ‘‘(1) DEPARTMENT.—The term ‘Department’ means the Department of Agriculture. ‘‘(2) PRIVATE GRAZING LAND.—The term ‘private grazing 

land’ means private, State-owned, tribally-owned, and any 

other non-federally owned rangeland, pastureland, grazed forest 

land, and hay land. ‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Agriculture. 

‘‘(c) PRIVATE GRAZING LAND CONSERVATION ASSISTANCE.— ‘‘(1) ASSISTANCE TO GRAZING LANDOWNERS AND OTHERS.— Subject to the availability of appropriations for this section, the 

Secretary shall establish a voluntary program to provide technical, educational, and related assistance to owners and managers of private grazing land and public agencies, through local 

conservation districts, to enable the landowners, managers, and 

public agencies to voluntarily carry out activities that are consistent with this section, including— ‘‘(A) maintaining and improving private grazing land 

and the multiple values and uses that depend on private 

grazing land; ‘‘(B) implementing grazing land management technologies; ‘‘(C) managing resources on private grazing land, including—

‘‘(i) planning, managing, and treating private 

grazing land resources; 

‘‘(ii) ensuring the long-term sustainability of private grazing land resources; 

‘‘(iii) harvesting, processing, and marketing private 

grazing land resources; and 

‘‘(iv) identifying and managing weed, noxious 

weed, and brush encroachment problems; 

‘‘(D) protecting and improving the quality and quantity 

of water yields from private grazing land; 

‘‘(E) maintaining and improving wildlife and fish 

habitat on private grazing land; 

‘‘(F) enhancing recreational opportunities on private 

grazing land; 

‘‘(G) maintaining and improving the aesthetic character of private grazing land; 

‘‘(H) identifying the opportunities and encouraging the 

diversification of private grazing land enterprises; and 

‘‘(I) encouraging the use of sustainable grazing systems, 

such as year-round, rotational, or managed grazing. 

135

‘‘(2) PROGRAM ELEMENTS.— ‘‘(A) FUNDING.—If funding is provided to carry out this 

section, it shall be provided through a specific line-item in 

the annual appropriations for the Natural Resources Conservation Service. ‘‘(B) TECHNICAL ASSISTANCE AND EDUCATION.—Personnel of the Department trained in pasture and range 

management shall be made available under the program to 

deliver and coordinate technical assistance and education 

to owners and managers of private grazing land, at the request of the owners and managers. ‘‘(d) GRAZING TECHNICAL ASSISTANCE SELF-HELP.— ‘‘(1) FINDINGS.—Congress finds that— ‘‘(A) there is a severe lack of technical assistance for 

farmers and ranchers that graze livestock; ‘‘(B) Federal budgetary constraints preclude any significant expansion, and may force a reduction of, current 

levels of technical support; and ‘‘(C) farmers and ranchers have a history of cooperatively working together to address common needs in the 

promotion of their products and in the drainage of wet 

areas through drainage districts. 

‘‘(2) ESTABLISHMENT OF GRAZING DEMONSTRATION.—In accordance with paragraph (3), the Secretary may establish 2 

grazing management demonstration districts at the recommendation of the grazing land conservation initiative steering committee. ‘‘(3) PROCEDURE.— ‘‘(A) PROPOSAL.—Within a reasonable time after the 

submission of a request of an organization of farmers or 

ranchers engaged in grazing, the Secretary shall propose 

that a grazing management district be established. ‘‘(B) FUNDING.—The terms and conditions of the funding and operation of the grazing management district shall 

be proposed by the producers. 

‘‘(C) APPROVAL.—The Secretary shall approve the proposal if the Secretary determines that the proposal— ‘‘(i) is reasonable; 

‘‘(ii) will promote sound grazing practices; and 

‘‘(iii) contains provisions similar to the provisions 

contained in the beef promotion and research order 

issued under section 4 of the Beef Research and Information Act (7 U.S.C. 2903) in effect on April 4, 1996. 

‘‘(D) AREA INCLUDED.—The area proposed to be included in a grazing management district shall be determined by the Secretary on the basis of an application by 

farmers or ranchers. 

‘‘(E) AUTHORIZATION.—The Secretary may use authority under the Agricultural Adjustment Act (7 U.S.C. 601 et 

seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, to operate, on a demonstration basis, a grazing management district. 

‘‘(F) ACTIVITIES.—The activities of a grazing management district shall be scientifically sound activities, as determined by the Secretary in consultation with a technical 

136

advisory committee composed of ranchers, farmers, and 

technical experts. ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $60,000,000 for each of 

fiscal years 2002 through 2007. 

‘‘SEC. 1240N. WILDLIFE HABITAT INCENTIVE PROGRAM. 

‘‘(a) IN GENERAL.—The Secretary, in consultation with the State 

technical committees established under section 1261, shall establish 

within the Natural Resources Conservation Service a program to be 

known as the wildlife habitat incentive program (referred to in this 

section as the ‘program’). 

‘‘(b) COST-SHARE PAYMENTS.—

‘‘(1) IN GENERAL.—Under the program, the Secretary shall 

make cost-share payments to landowners to develop—

‘‘(A) upland wildlife habitat; 

‘‘(B) wetland wildlife habitat; 

‘‘(C) habitat for threatened and endangered species; 

‘‘(D) fish habitat; and 

‘‘(E) other types of wildlife habitat approved by the Secretary. 

‘‘(2) INCREASED COST SHARE FOR LONG-TERM AGREEMENTS.—

‘‘(A) IN GENERAL.—In a case in which the Secretary enters into an agreement or contract to protect and restore 

plant and animal habitat that has a term of at least 15 

years, the Secretary may provide cost-share payments in 

addition to amounts provided under paragraph (1). 

‘‘(B) FUNDING LIMITATION.—The Secretary may use, for 

a fiscal year, not more than 15 percent of funds made 

available under section 1241(a)(7) for the fiscal year to 

carry out contracts and agreements described in subparagraph (A). 

‘‘(c) REGIONAL EQUITY.—In carrying out this section, the Secretary shall, to the maximum extent practicable, ensure that regional issues of concern relating to wildlife habitat are addressed 

in an appropriate manner. 

‘‘SEC. 1240O. GRASSROOTS SOURCE WATER PROTECTION PROGRAM. 

‘‘(a) IN GENERAL.—The Secretary shall establish a national 

grassroots water protection program to more effectively use onsite 

technical assistance capabilities of each State rural water association that, as of the date of enactment of this section, operates a wellhead or groundwater protection program in the State. 

‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $5,000,000 for each of 

fiscal years 2002 through 2007. 

‘‘SEC. 1240P. GREAT LAKES BASIN PROGRAM FOR SOIL EROSION AND 

SEDIMENT CONTROL. 

‘‘(a) IN GENERAL.—The Secretary, in consultation with the 

Great Lakes Commission created by Article IV of the Great Lakes 

Basin Compact (82 Stat. 415) and in cooperation with the Administrator of the Environmental Protection Agency and the Secretary of 

the Army, may carry out the Great Lakes basin program for soil erosion and sediment control (referred to in this section as the ‘program’). 

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‘‘(b) ASSISTANCE.—In carrying out the program, the Secretary 

may—

‘‘(1) provide project demonstration grants, provide technical 

assistance, and carry out information and education programs 

to improve water quality in the Great Lakes basin by reducing 

soil erosion and improving sediment control; and 

‘‘(2) provide a priority for projects and activities that directly reduce soil erosion or improve sediment control. 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $5,000,000 for each of 

fiscal years 2002 through 2007.’’. 

(b) CONFORMING AMENDMENT.—Sections 386 and 387 of the 

Federal Agriculture Improvement and Reform Act of 1996 (16 

U.S.C. 2005b, 3836a) are repealed. 

SEC. 2503. FARMLAND PROTECTION PROGRAM. 

(a) IN GENERAL.—Chapter 2 of the Food Security Act of 1985 

(as amended by section 2001) is amended by adding at the end the 

following: 

‘‘Subchapter B—Farmland Protection Program 

‘‘SEC. 1238H. DEFINITIONS. 

‘‘In this subchapter: 

‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible entity’ means—

‘‘(A) any agency of any State or local government or an 

Indian tribe (including a farmland protection board or 

land resource council established under State law); or 

‘‘(B) any organization that—

‘‘(i) is organized for, and at all times since the formation of the organization has been operated principally for, 1 or more of the conservation purposes specified in clause (i), (ii), (iii), or (iv) of section 

170(h)(4)(A) of the Internal Revenue Code of 1986; 

‘‘(ii) is an organization described in section 

501(c)(3) of that Code that is exempt from taxation 

under section 501(a) of that Code; 

‘‘(iii) is described in section 509(a)(2) of that Code; 

or 

‘‘(iv) is described in section 509(a)(3), and is controlled by an organization described in section 

509(a)(2), of that Code. 

‘‘(2) ELIGIBLE LAND.—

‘‘(A) IN GENERAL.—The term ‘eligible land’ means land 

on a farm or ranch that—

‘‘(i)(I) has prime, unique, or other productive soil; 

or 

‘‘(II) contains historical or archaeological resources; and 

‘‘(ii) is subject to a pending offer for purchase from 

an eligible entity. 

‘‘(B) INCLUSIONS.—The term ‘eligible land’ includes, on 

a farm or ranch— ‘‘(i) cropland; 

‘‘(ii) rangeland; 

‘‘(iii) grassland; 

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‘‘(iv) pasture land; and 

‘‘(v) forest land that is an incidental part of an agricultural operation, as determined by the Secretary. 

‘‘(3) INDIAN TRIBE.—The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination 

and Education Assistance Act (25 U.S.C. 450b). 

‘‘(4) PROGRAM.—The term ‘program’ means the farmland 

protection program established under section 1238I(a). 

‘‘SEC. 1238I. FARMLAND PROTECTION. 

‘‘(a) IN GENERAL.—The Secretary, acting through the Natural 

Resources Conservation Service, shall establish and carry out a 

farmland protection program under which the Secretary shall purchase conservation easements or other interests in eligible land that 

is subject to a pending offer from an eligible entity for the purpose 

of protecting topsoil by limiting nonagricultural uses of the land. 

‘‘(b) CONSERVATION PLAN.—Any highly erodible cropland for 

which a conservation easement or other interest is purchased under 

this subchapter shall be subject to the requirements of a conservation plan that requires, at the option of the Secretary, the conversion 

of the cropland to less intensive uses. 

‘‘(c) COST SHARING.—

‘‘(1) FARMLAND PROTECTION.—

‘‘(A) SHARE PROVIDED UNDER THIS SUBSECTION.—The 

share of the cost of purchasing a conservation easement or 

other interest in eligible land described in subsection (a) 

provided under section 1241(d) shall not exceed 50 percent 

of the appraised fair market value of the conservation easement or other interest in eligible land. 

‘‘(B) SHARE NOT PROVIDED UNDER THIS SUBSECTION.—

As part of the share of the cost of purchasing a conservation easement or other interest in eligible land described in 

subsection (a) that is not provided under section 1241(d), 

an eligible entity may include a charitable donation by the 

private landowner from which the eligible land is to be 

purchased of not more than 25 percent of the fair market 

value of the conservation easement or other interest in eligible land. 

‘‘(2) BIDDING DOWN.—If the Secretary determines that 2 or 

more applications for the purchase of a conservation easement 

or other interest in eligible land described in subsection (a) are 

comparable in achieving the purposes of this section, the Secretary shall not assign a higher priority to any 1 of those applications solely on the basis of lesser cost to the farmland protection program established under subsection (a). 

‘‘SEC. 1238J. FARM VIABILITY PROGRAM. 

‘‘(a) IN GENERAL.—The Secretary may provide to eligible entities identified by the Secretary grants for use in carrying out farm 

viability programs developed by the eligible entities and approved 

by the Secretary. ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to the Secretary to carry out this section such 

sums as are necessary for each of fiscal years 2002 through 2007.’’. (b) CONFORMING AMENDMENTS.— (1) IN GENERAL.—

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(A) Section 388 of the Federal Agriculture Improvement 

and Reform Act of 1996 (16 U.S.C. 3830 note; Public Law 

104–127) is repealed. 

(B) Section 211 of the Agriculture Risk Protection Act 

of 2000 (16 U.S.C. 3830 note; Public Law 106–224) is 

amended—

(i) by striking subsection (a); and 

(ii) in subsection (b)—

(I) by striking the subsection designation and 

the subsection heading; 

(II) by redesignating paragraphs (1), (2), and 

(3) as subsections (a), (b), and (c), respectively, and 

indenting appropriately; 

(III) in subsection (a) (as so redesignated), by 

redesignating subparagraphs (A), (B), and (C) as 

paragraphs (1), (2), and (3), respectively, and indenting appropriately; 

(IV) in subsection (b) (as so redesignated), by 

striking ‘‘ASSISTANCE’’ and inserting ‘‘ASSISTANCE’’; 

and 

(V) by striking ‘‘subsection’’ each place it appears and inserting ‘‘section’’.

(2) EFFECT ON CONTRACTS.—The amendment made by 

paragraph (1)(A) shall have no effect on any contract entered 

into under section 388 of the Federal Agriculture Improvement 

and Reform Act of 1996 (16 U.S.C. 3830 note) that is in effect 

as of the date of enactment of this Act. 

SEC. 2504. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM. 

Subtitle H of title XV of the Agriculture and Food Act of 1981 

(16 U.S.C. 3451 et seq.) is amended to read as follows: 

‘‘Subtitle H—Resource Conservation and 

Development Program 

‘‘SEC. 1528. DEFINITIONS. 

‘‘In this subtitle: 

‘‘(1) AREA PLAN.—The term ‘area plan’ means a resource 

conservation and use plan developed through a planning process by a council for a designated area of 1 or more States, or 

of land under the jurisdiction of an Indian tribe, that includes 

1 or more of the following elements: 

‘‘(A) A land conservation element, the purpose of which 

is to control erosion and sedimentation. 

‘‘(B) A water management element that provides 1 or 

more clear environmental or conservation benefits, the purpose of which is to provide for—

‘‘(i) the conservation, use, and quality of water, including irrigation and rural water supplies; 

‘‘(ii) the mitigation of floods and high water tables; 

‘‘(iii) the repair and improvement of reservoirs; 

‘‘(iv) the improvement of agricultural water management; and 

‘‘(v) the improvement of water quality. 

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‘‘(C) A community development element, the purpose of 

which is to improve—

‘‘(i) the development of resources-based industries; 

‘‘(ii) the protection of rural industries from natural 

resource hazards; 

‘‘(iii) the development of adequate rural water and 

waste disposal systems; 

‘‘(iv) the improvement of recreation facilities; 

‘‘(v) the improvement in the quality of rural housing; 

‘‘(vi) the provision of adequate health and education facilities; 

‘‘(vii) the satisfaction of essential transportation 

and communication needs; and 

‘‘(viii) the promotion of food security, economic development, and education. 

‘‘(D) A land management element, the purpose of which 

is—

‘‘(i) energy conservation, including the production 

of energy crops; 

‘‘(ii) the protection of agricultural land, as appropriate, from conversion to other uses; 

‘‘(iii) farmland protection; and 

‘‘(iv) the protection of fish and wildlife habitats. 

‘‘(2) BOARD.—The term ‘Board’ means the Resource Conservation and Development Policy Advisory Board established 

under section 1533(a). 

‘‘(3) COUNCIL.—The term ‘council’ means a nonprofit entity 

(including an affiliate of the entity) operating in a State that 

is—

‘‘(A) established by volunteers or representatives of 

States, local units of government, Indian tribes, or local 

nonprofit organizations to carry out an area plan in a designated area; and 

‘‘(B) designated by the chief executive officer or legislature of the State to receive technical assistance and financial assistance under this subtitle. 

‘‘(4) DESIGNATED AREA.—The term ‘designated area’ means 

a geographic area designated by the Secretary to receive technical assistance and financial assistance under this subtitle. 

‘‘(5) FINANCIAL ASSISTANCE.—The term ‘financial assistance’ means a grant or loan provided by the Secretary (or the 

Secretary and other Federal agencies) to, or a cooperative agreement entered into by the Secretary (or the Secretary and other 

Federal agencies) with, a council, or association of councils, to 

carry out an area plan in a designated area, including assistance provided for planning, analysis, feasibility studies, training, education, and other activities necessary to carry out the 

area plan. 

‘‘(6) INDIAN TRIBE.—The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination 

and Education Assistance Act (25 U.S.C. 450b). 

‘‘(7) LOCAL UNIT OF GOVERNMENT.—The term ‘local unit of 

government’ means—

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‘‘(A) any county, city, town, township, parish, village, 

or other general-purpose subdivision of a State; and 

‘‘(B) any local or regional special district or other limited political subdivision of a State, including any soil conservation district, school district, park authority, and water 

or sanitary district. 

‘‘(8) NONPROFIT ORGANIZATION.—The term ‘nonprofit organization’ means any organization that is—

‘‘(A) described in section 501(c) of the Internal Revenue 

Code of 1986; and 

‘‘(B) exempt from taxation under section 501(a) of the 

Internal Revenue Code of 1986. 

‘‘(9) PLANNING PROCESS.—The term ‘planning process’

means actions taken by a council to develop and carry out an 

effective area plan in a designated area, including development 

of the area plan, goals, purposes, policies, implementation activities, evaluations and reviews, and the opportunity for public 

participation in the actions. 

‘‘(10) PROJECT.—The term ‘project’ means a project that is 

carried out by a council to achieve any of the elements of an 

area plan. 

‘‘(11) SECRETARY.—The term ‘Secretary’ means the Secretary of Agriculture. 

‘‘(12) STATE.—The term ‘State’ means—

‘‘(A) any State; 

‘‘(B) the District of Columbia; or 

‘‘(C) any territory or possession of the United States. 

‘‘(13) TECHNICAL ASSISTANCE.—The term ‘technical assistance’ means any service provided by the Secretary or agent of 

the Secretary, including—

‘‘(A) inventorying, evaluating, planning, designing, supervising, laying out, and inspecting projects; 

‘‘(B) providing maps, reports, and other documents associated with the services provided; 

‘‘(C) providing assistance for the long-term implementation of area plans; and 

‘‘(D) providing services of an agency of the Department 

of Agriculture to assist councils in developing and carrying 

out area plans. 

‘‘SEC. 1529. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM. 

‘‘The Secretary shall establish a resource conservation and development program under which the Secretary shall provide technical assistance and financial assistance to councils to develop and 

carry out area plans and projects in designated areas— ‘‘(1) to conserve and improve the use of land, develop natural resources, and improve and enhance the social, economic, 

and environmental conditions in primarily rural areas of the 

United States; and 

‘‘(2) to encourage and improve the capability of State, units 

of government, Indian tribes, nonprofit organizations, and 

councils to carry out the purposes described in paragraph (1). 

‘‘SEC. 1530. SELECTION OF DESIGNATED AREAS. 

‘‘The Secretary shall select designated areas for assistance 

under this subtitle on the basis of the elements of area plans. 

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‘‘SEC. 1531. POWERS OF THE SECRETARY. 

‘‘In carrying out this subtitle, the Secretary may— ‘‘(1) provide technical assistance to any council to assist in 

developing and implementing an area plan for a designated 

area; ‘‘(2) cooperate with other departments and agencies of the 

Federal Government, States, local units of government, local Indian tribes, and local nonprofit organizations in conducting 

surveys and inventories, disseminating information, and developing area plans; ‘‘(3) assist in carrying out an area plan approved by the 

Secretary for any designated area by providing technical assistance and financial assistance to any council; and ‘‘(4) enter into agreements with councils in accordance with 

section 1532. 

‘‘SEC. 1532. ELIGIBILITY; TERMS AND CONDITIONS. 

‘‘(a) ELIGIBILITY.—Technical assistance and financial assistance 

may be provided by the Secretary under this subtitle to any council 

to assist in carrying out a project specified in an area plan approved 

by the Secretary only if— ‘‘(1) the council agrees in writing— ‘‘(A) to carry out the project; and 

‘‘(B) to finance or arrange for financing of any portion 

of the cost of carrying out the project for which financial 

assistance is not provided by the Secretary under this subtitle; 

‘‘(2) the project is included in an area plan and is approved 

by the council; ‘‘(3) the Secretary determines that assistance is necessary to 

carry out the area plan; ‘‘(4) the project provided for in the area plan is consistent 

with any comprehensive plan for the area; 

‘‘(5) the cost of the land or an interest in the land acquired 

or to be acquired under the plan by any State, local unit of government, Indian tribe, or local nonprofit organization is borne 

by the State, local unit of government, Indian tribe, or local 

nonprofit organization, respectively; and ‘‘(6) the State, local unit of government, Indian tribe, or 

local nonprofit organization participating in the area plan 

agrees to maintain and operate the project. 

‘‘(b) LOANS.—

‘‘(1) IN GENERAL.—Subject to paragraphs (2) and (3), a loan 

made under this subtitle shall be made on such terms and conditions as the Secretary may prescribe. 

‘‘(2) TERM.—A loan for a project made under this subtitle 

shall have a term of not more than 30 years after the date of 

completion of the project. 

‘‘(3) INTEREST RATE.—A loan made under this subtitle shall 

bear interest at the average rate of interest paid by the United 

States on obligations of a comparable term, as determined by 

the Secretary of the Treasury. 

‘‘(c) APPROVAL BY SECRETARY.—Technical assistance and financial assistance under this subtitle may not be made available to a 

council to carry out an area plan unless the area plan has been submitted to and approved by the Secretary. 

143

‘‘(d) WITHDRAWAL.—The Secretary may withdraw technical assistance and financial assistance with respect to any area plan if 

the Secretary determines that the assistance is no longer necessary 

or that sufficient progress has not been made toward developing or 

implementing the elements of the area plan. 

‘‘SEC. 1533. RESOURCE CONSERVATION AND DEVELOPMENT POLICY 

ADVISORY BOARD. 

‘‘(a) ESTABLISHMENT.—The Secretary shall establish within the 

Department of Agriculture a Resource Conservation and Development Policy Advisory Board. ‘‘(b) COMPOSITION.— ‘‘(1) IN GENERAL.—The Board shall be composed of at least 

7 employees of the Department of Agriculture selected by the 

Secretary. ‘‘(2) CHAIRPERSON.—A member of the Board shall be designated by the Secretary to serve as chairperson of the Board. 

‘‘(c) DUTIES.—The Board shall advise the Secretary regarding 

the administration of this subtitle, including the formulation of 

policies for carrying out this subtitle. 

‘‘SEC. 1534. EVALUATION OF PROGRAM. 

‘‘(a) IN GENERAL.—The Secretary, in consultation with councils, 

shall evaluate the program established under this subtitle to determine whether the program is effectively meeting the needs of, and 

the purposes identified by, States, units of government, Indian 

tribes, nonprofit organizations, and councils participating in, or 

served by, the program. 

‘‘(b) REPORT.—Not later than June 30, 2005, the Secretary shall 

submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of 

the Senate a report describing the results of the evaluation, together 

with any recommendations of the Secretary for continuing, terminating, or modifying the program. 

‘‘SEC. 1535. LIMITATION ON ASSISTANCE. 

‘‘In carrying out this subtitle, the Secretary shall provide technical assistance and financial assistance with respect to not more 

than 450 active designated areas. 

‘‘SEC. 1536. SUPPLEMENTAL AUTHORITY OF THE SECRETARY. 

‘‘The authority of the Secretary under this subtitle to assist 

councils in the development and implementation of area plans shall 

be supplemental to, and not in lieu of, any authority of the Secretary under any other provision of law. 

‘‘SEC. 1537. AUTHORIZATION OF APPROPRIATIONS. 

‘‘(a) IN GENERAL.—There are authorized to be such sums as are 

necessary to carry out this subtitle. ‘‘(b) LOANS.—The Secretary shall not use more than $15,000,000 of any funds made available for a fiscal year to make 

loans under this subtitle. ‘‘(c) AVAILABILITY.—Funds appropriated to carry out this subtitle shall remain available until expended.’’. 

SEC. 2505. SMALL WATERSHED REHABILITATION PROGRAM. 

Section 14 of the Watershed Protection and Flood Prevention 

Act (16 U.S.C. 1012) is amended by striking subsection (h) and inserting the following: 

144

‘‘(h) FUNDING.—

‘‘(1) FUNDS OF COMMODITY CREDIT CORPORATION.—In carrying out this section, of the funds of the Commodity Credit 

Corporation, the Secretary shall make available, to remain 

available until expended—

‘‘(A) $45,000,000 for fiscal year 2003; 

‘‘(B) $50,000,000 for fiscal year 2004; 

‘‘(C) $55,000,000 for fiscal year 2005; 

‘‘(D) $60,000,000 for fiscal year 2006; 

‘‘(E) $65,000,000 for fiscal year 2007; and 

‘‘(F) $0 for fiscal year 2008. 

‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—In addition to 

amounts made available under paragraph (1), there are authorized to be appropriated to the Secretary to carry out this section, 

to remain available until expended—

‘‘(A) $45,000,000 for fiscal year 2003; 

‘‘(B) $55,000,000 for fiscal year 2004; 

‘‘(C) $65,000,000 for fiscal year 2005; 

‘‘(D) $75,000,000 for fiscal year 2006; and 

‘‘(E) $85,000,000 for fiscal year 2007.’’. 

SEC. 2506. USE OF SYMBOLS, SLOGANS, AND LOGOS. 

Section 356 of the Federal Agriculture Improvement Act of 1996 

(16 U.S.C. 5801 et seq.) is amended—

(1) in subsection (c)—

(A) by redesignating paragraphs (4) through (7) as 

paragraphs (5) through (8), respectively; and 

(B) by inserting after paragraph (3) the following: 

‘‘(4) on the written approval of the Secretary, to use, license, 

or transfer symbols, slogans, and logos of the Foundation (exclusive of any symbol or logo of a governmental entity);’’; and 

(2) in subsection (d), by adding at the end the following: 

‘‘(3) USE OF SYMBOLS, SLOGANS, AND LOGOS OF THE FOUNDATION.—

‘‘(A) IN GENERAL.—The Secretary may authorize the 

Foundation to use, license, or transfer symbols, slogans, 

and logos of the Foundation. 

‘‘(B) INCOME.—

‘‘(i) IN GENERAL.—All revenue received by the 

Foundation from the use, licensing, or transfer of symbols, slogans, and logos of the Foundation shall be 

transferred to the Secretary. 

‘‘(ii) CONSERVATION OPERATIONS.—The Secretary 

shall transfer all revenue received under clause (i) to 

the account within the Natural Resources Conservation 

Service that is used to carry out conservation operations.’’.

SEC. 2507. DESERT TERMINAL LAKES. 

‘‘(a) IN GENERAL.—Subject to subsection (b), as soon as practicable after the date of enactment of this Act, the Secretary of Agriculture shall transfer $200,000,000 of the funds of the Commodity 

Credit Corporation to the Bureau of Reclamation Water and Related 

Resources Account, which funds shall—

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‘‘(1) be used by the Secretary of the Interior, acting through 

the Commissioner of Reclamation, to provide water to at-risk 

natural desert terminal lakes; and ‘‘(2) remain available until expended. ‘‘(b) LIMITATION.—The funds described in subsection (a) shall 

not be used to purchase or lease water rights. 

Subtitle G—Conservation Corridor 

Demonstration Program 

SEC. 2601. DEFINITIONS. 

In this subtitle: 

(1) DELMARVA PENINSULA.—The term ‘‘Delmarva Peninsula’’ means land in the States of Delaware, Maryland, and 

Virginia located on the east side of the Chesapeake Bay. 

(2) DEMONSTRATION PROGRAM.—The term ‘‘demonstration 

program’’ means the Conservation Corridor Demonstration Program established under this subtitle. 

(3) CONSERVATION CORRIDOR PLAN; PLAN.—The terms ‘‘conservation corridor plan’’ and ‘‘plan’’ mean a conservation corridor plan required to be submitted and approved as a condition for participation in the demonstration program. 

(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

SEC. 2602. CONSERVATION CORRIDOR DEMONSTRATION PROGRAM. 

(a) ESTABLISHMENT.—The Secretary shall carry out a demonstration program, to be known as the ‘‘Conservation Corridor 

Demonstration Program’’, under which any of the States of Delaware, Maryland, and Virginia, a local government of any 1 of those 

States with jurisdiction over land on the Delmarva Peninsula, or a 

combination of those States, may submit a conservation corridor 

plan to integrate agriculture and forestry conservation programs of 

the Department of Agriculture with State and local efforts to address farm conservation needs. 

(b) SUBMISSION OF CONSERVATION CORRIDOR PLAN.— (1) SUBMISSION AND PROPOSAL.—To be eligible to participate in the demonstration program, a State, local government, 

or combination of States referred to in subsection (a) shall— (A) submit to the Secretary a conservation corridor 

plan that—

(i) proposes specific criteria and commitment of resources in the geographic region designated in the 

plan; and 

(ii) describes how the linkage of Federal, State, 

and local resources will improve— (I) the economic viability of agriculture; and 

(II) the environmental integrity of the watersheds in the Delmarva Peninsula; and 

(B) demonstrate to the Secretary that, in developing the 

plan, the State, local government, or combination of States 

has solicited and taken into account the views of local residents. 

(2) DRAFT MEMORANDUM OF AGREEMENT.—If the conservation corridor plan is submitted by more than 1 State, the plan 

146

shall provide a draft memorandum of agreement among entities 

in each submitting State. 

(c) REVIEW OF PLAN.—Not later than 90 days after the date of 

receipt of a conservation corridor plan, the Secretary— (1) shall review the plan; and 

(2) may approve the plan for implementation under this 

subtitle if the Secretary determines that the plan meets the requirements specified in subsection (d). 

(d) CRITERIA FOR APPROVAL.—The Secretary may approve a 

conservation corridor plan only if, as determined by the Secretary, 

the plan provides for each of the following: 

(1) VOLUNTARY ACTIONS.—Actions taken under the plan— (A) are voluntary; 

(B) require the consent of willing landowners; and 

(C) provide a mechanism by which the landowner may 

withdraw such consent without adverse consequences other 

than the loss of any payments to the landowner conditioned 

on continued enrollment of the land. 

(2) LAND OF HIGH CONSERVATION VALUE.—Criteria specified 

in the plan ensure that land enrolled in each conservation program incorporated through the plan are of exceptionally high 

conservation value, as determined by the Secretary. 

(3) NO EFFECT ON UNENROLLED LAND.—The enrollment of 

land in a conservation program incorporated through the plan 

will neither— (A) adversely affect any adjacent land not so enrolled; 

nor 

(B) create any buffer zone on such unenrolled land. 

(4) GREATER BENEFITS.—The conservation programs incorporated through the plan provide benefits greater than the benefits that would likely be achieved through individual application of the conservation programs. 

(5) SUFFICIENT STAFFING.—Staffing, considering both Federal and non-Federal resources, is sufficient to ensure success of 

the plan. 

SEC. 2603. IMPLEMENTATION OF CONSERVATION CORRIDOR PLAN. 

(a) MEMORANDUM OF AGREEMENT.—On approval of a conservation corridor plan, the Secretary may enter into a memorandum of 

agreement with the State, local government, or combination of 

States that submitted the plan to— (1) guarantee specific program resources for implementation of the plan; 

(2) establish various compensation rates to the extent that 

the parties to the agreement consider justified; and 

(3) provide streamlined and integrated paperwork requirements. 

(b) CONTINUED COMPLIANCE WITH PLAN APPROVAL CRITERIA.—

The Secretary shall terminate the memorandum of agreement entered into under subsection (a) with respect to an approved conservation corridor plan and cease the provision of resources for implementation of the plan if the Secretary determines that, in the implementation of the plan—

(1) the State, local government, or combination of States 

that submitted the plan has deviated from—

(A) the plan; 

147

(B) the criteria specified in section 2602(d) on which 

approval of the plan was conditioned; or 

(C) the cost-sharing requirements of section 2604(a) or 

any other condition of the plan; or 

(2) the economic viability of agriculture in the geographic 

region designated in the plan is being hindered. 

(c) PROGRESS REPORT.—At the end of the 3-year period that begins on the date on which funds are first provided with respect to 

a conservation corridor plan under the demonstration program, the 

State, local government, or combination of States that submitted the 

plan shall submit to the Secretary— (1) a report on the effectiveness of the activities carried out 

under the plan; and 

(2) an evaluation of the economic viability of agriculture in 

the geographic region designated in the plan. 

(d) DURATION.—The demonstration program shall be carried 

out for not less than 3 nor more than 5 years beginning on the date 

on which funds are first provided under the demonstration program. 

SEC. 2604. FUNDING REQUIREMENTS. 

(a) COST SHARING.— (1) REQUIRED NON-FEDERAL SHARE.—Subject to paragraph 

(2), as a condition on the approval of a conservation corridor 

plan, the Secretary shall require the State and local participants to contribute financial resources sufficient to cover at 

least 50 percent of the total cost of the activities carried out 

under the plan. 

(2) EXCEPTION.—The Secretary may reduce the cost-sharing 

requirement in the case of a specific project or activity under the 

demonstration program on good cause and on demonstration 

that the project or activity is likely to achieve extraordinary natural resource benefits. 

(b) RESERVATION OF FUNDS.—The Secretary may consider directing funds on a priority basis to the demonstration program and 

to projects in areas identified by the plan. 

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this subtitle for each of fiscal years 2002 through 2007. 

Subtitle H—Funding and Administration 

SEC. 2701. FUNDING AND ADMINISTRATION. 

Subtitle E of the Food Security Act of 1985 is amended by striking sections 1241 and 1242 (16 U.S.C. 3841, 3842) and inserting the 

following: 

‘‘SEC. 1241. COMMODITY CREDIT CORPORATION. 

‘‘(a) IN GENERAL.—For each of fiscal years 2002 through 2007, 

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

Commodity Credit Corporation to carry out the following programs 

under subtitle D (including the provision of technical assistance): ‘‘(1) The conservation reserve program under subchapter B 

of chapter 1. ‘‘(2) The wetlands reserve program under subchapter C of 

chapter 1. 

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‘‘(3) The conservation security program under subchapter A 

of chapter 2. ‘‘(4) The farmland protection program under subchapter B 

of chapter 2, using, to the maximum extent practicable— ‘‘(A) $50,000,000 in fiscal year 2002; 

‘‘(B) $100,000,000 in fiscal year 2003; 

‘‘(C) $125,000,000 in each of fiscal years 2004 and 

2005; ‘‘(D) $100,000,000 in fiscal year 2006; and 

‘‘(E) $97,000,000 in fiscal year 2007. ‘‘(5) The grassland reserve program under subchapter C of 

chapter 2, using, to the maximum extent practicable 

$254,000,000 for the period of fiscal years 2003 through 2007. ‘‘(6) The environmental quality incentives program under 

chapter 4, using, to the maximum extent practicable— ‘‘(A) $400,000,000 in fiscal year 2002; 

‘‘(B) $700,000,000 in fiscal year 2003; 

‘‘(C) $1,000,000,000 in fiscal year 2004; 

‘‘(D) $1,200,000,000 in each of fiscal years 2005 and 

2006; and ‘‘(E) $1,300,000,000 in fiscal year 2007. ‘‘(7) The wildlife habitat incentives program under section 

1240N, using, to the maximum extent practicable— ‘‘(A) $15,000,000 in fiscal year 2002; 

‘‘(B) $30,000,000 in fiscal year 2003; 

‘‘(C) $60,000,000 in fiscal year 2004; and 

‘‘(D) $85,000,000 in each of fiscal years 2005 through 

2007. ‘‘(b) SECTION 11.—Nothing in this section affects the limit on 

expenditures for technical assistance imposed by section 11 of the 

Commodity Credit Corporation Charter Act (15 U.S.C. 714i). ‘‘(c) REGIONAL EQUITY.—Before April 1 of each fiscal year, the 

Secretary shall give priority for funding under the conservation programs under subtitle D (excluding the conservation reserve program 

under subchapter B of chapter 1, the wetlands reserve program 

under subchapter C of chapter 1, and the conservation security program under subchapter A of chapter 2) to approved applications in 

any State that has not received, for the fiscal year, an aggregate 

amount of at least $12,000,000 for those conservation programs. 

‘‘SEC. 1242. DELIVERY OF TECHNICAL ASSISTANCE. 

‘‘(a) IN GENERAL.—The Secretary shall provide technical assistance under this title to a producer eligible for that assistance—

‘‘(1) directly; or 

‘‘(2) at the option of the producer, through a payment, as 

determined by the Secretary, to the producer for an approved 

third party, if available. 

‘‘(b) CERTIFICATION OF THIRD-PARTY PROVIDERS.—

‘‘(1) IN GENERAL.—Not later than 180 days after the date 

of enactment of the Farm Security and Rural Investment Act of 

2002, the Secretary shall, by regulation, establish a system 

for—

‘‘(A) approving individuals and entities to provide technical assistance to carry out programs under this title (including criteria for the evaluation of providers or potential 

providers of technical assistance); and 

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‘‘(B) establishing the amounts and methods for payments for that assistance. 

‘‘(2) EXPERTISE.—In promulgating regulations to carry out 

this subsection the Secretary shall ensure that persons with expertise in the technical aspects of conservation planning, watershed planning, environmental engineering (including commercial entities, nonprofit entities, State or local governments or 

agencies, and other Federal agencies), are eligible to become approved providers of the technical assistance. 

‘‘(3) INTERIM ASSISTANCE.—

‘‘(A) IN GENERAL.—A person that has provided technical assistance in accordance with an agreement between 

the person and the Secretary before the date of enactment 

of the Farm Security and Rural Investment Act of 2002 

may continue to provide technical assistance under this section until the date on which the Secretary establishes the 

system described in paragraph (1). 

‘‘(B) EVALUATION.—If a person described in subparagraph (A) seeks to continue to provide technical assistance 

after the date referred to in subparagraph (A), the Secretary 

shall evaluate the person using criteria referred to in paragraph (1). 

‘‘(4) NON-FEDERAL ASSISTANCE.—The Secretary may request 

the services of, and enter into cooperative agreements or contracts with, non-Federal entities to assist the Secretary in providing technical assistance necessary to develop and implement 

conservation programs under this title.’’. 

SEC. 2702. REGULATIONS. 

(a) IN GENERAL.—Except as otherwise provided in this title or 

an amendment made by this title, not later than 90 days after the 

date of enactment of this Act, the Secretary of Agriculture, in consultation with the Commodity Credit Corporation, shall promulgate 

such regulations as are necessary to implement this title. 

(b) APPLICABLE AUTHORITY.—The promulgation of regulations 

under subsection (a) and administration of this title—

(1) shall—

(A) be carried out without regard to chapter 35 of title 

44, United States Code (commonly known as the Paperwork 

Reduction Act); and 

(B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804) relating 

to notices of proposed rulemaking and public participation 

in rulemaking; and 

(2) may—

(A) be promulgated with an opportunity for notice and 

comment; or 

(B) if determined to be appropriate by the Secretary of 

Agriculture or the Commodity Credit Corporation, as an interim rule effective on publication with an opportunity for 

notice and comment. 

(c) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING.—In carrying out this section, the Secretary shall use the authority provided 

under section 808(2) of title 5, United States Code.

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TITLE III—TRADE 

Subtitle A—Agricultural Trade Development and Assistance Act of 1954 and Related Statutes 

SEC. 3001. UNITED STATES POLICY. 

Section 2 of the Agricultural Trade Development and Assistance 

Act of 1954 (7 U.S.C. 1691) is amended—

(1) in paragraph (4), by striking ‘‘and’’ at the end; 

(2) in paragraph (5), by striking the period at the end and 

inserting ‘‘; and’’; and 

(3) by adding at the end the following: 

‘‘(6) prevent conflicts.’’. 

SEC. 3002. PROVISION OF AGRICULTURAL COMMODITIES. 

Section 202 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1722) is amended—

(1) in subsection (b), by adding at the end the following: 

‘‘(3) PROGRAM DIVERSITY.—The Administrator shall—

‘‘(A) encourage eligible organizations to propose and 

implement program plans to address 1 or more aspects of 

the program under section 201; and 

‘‘(B) consider proposals that incorporate a variety of 

program objectives and strategic plans based on the identification by eligible organizations of appropriate activities, 

consistent with section 201, to assist development of foreign 

countries.’’; 

(2) in subsection (e)(1), by striking ‘‘not less than 

$10,000,000, and not more than $28,000,000,’’ and inserting 

‘‘not less than 5 percent nor more than 10 percent of the funds’’; 

and 

(3) by adding at the end the following: 

‘‘(h) STREAMLINED PROGRAM MANAGEMENT.—

‘‘(1) IMPROVEMENTS.—Not later than 1 year after the date 

of enactment of this subsection, the Administrator shall—

‘‘(A) streamline program procedures and guidelines 

under this title for agreements with eligible organizations 

for programs in 1 or more countries; and 

‘‘(B) effective beginning with fiscal year 2004, to the 

maximum extent practicable, incorporate the changes into 

the procedures and guidelines for programs and the guidelines for resource requests. 

‘‘(2) STREAMLINED PROCEDURES AND GUIDELINES.—In carrying out paragraph (1), the Administrator shall make improvements in the Office of Food for Peace management systems that 

include—

‘‘(A) expedition of and greater consistency in the program review and approval process under this title;

‘‘(B) streamlining of information collection and reporting systems by identifying the critical information that 

needs to be monitored and reported on by eligible organizations; and 

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‘‘(C) for approved programs, provision of greater flexibility for an eligible organization to make modifications in 

program activities to achieve program results with streamlined procedures for reporting such modifications. 

‘‘(3) CONSULTATION.—

‘‘(A) IN GENERAL.—Paragraphs (1) and (2) shall be carried out in accordance with section 205 and subsections (b) 

and (c) of section 207. 

‘‘(B) CONSULTATION WITH CONGRESSIONAL COMMITTEES.—Not later than 180 days after the date of enactment 

of this subsection, the Administrator shall consult with the 

Committee on Agriculture and the Committee on International Relations of the House of Representatives and the 

Committee on Agriculture, Nutrition, and Forestry of the 

Senate on progress made in carrying out this subsection. 

‘‘(4) REPORT.—Not later than 270 days after the date of enactment of this subsection, the Administrator shall submit to 

the Committee on Agriculture and the Committee on International Relations of the House of Representatives and the 

Committee on Agriculture, Nutrition, and Forestry of the Senate 

a report on the improvements made and planned upgrades in 

the information management, procurement, and financial management systems to administer this title.’’. 

SEC. 3003. GENERATION AND USE OF CURRENCIES BY PRIVATE VOLUNTARY ORGANIZATIONS AND COOPERATIVES. 

Section 203 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1723) is amended—

(1) in the section heading, by striking ‘‘FOREIGN’’; 

(2) in subsection (a), by striking ‘‘the recipient country, or 

in a country’’ and inserting ‘‘1 or more recipient countries, or 1 

or more countries’’; 

(3) in subsection (b)—

(A) by striking ‘‘in recipient countries, or in countries’’

and inserting ‘‘1 or more recipient countries, or in 1 or 

more countries’’; and 

(B) by striking ‘‘foreign currency’’; 

(4) in subsection (c)—

(A) by striking ‘‘foreign currency’’; and 

(B) by striking ‘‘the recipient country, or in a country’’

and inserting ‘‘1 or more recipient countries, or in 1 or 

more countries’’; and 

(5) in subsection (d)—

(A) by striking ‘‘Foreign currencies’’ and inserting ‘‘Proceeds’’; 

(B) in paragraph (2)—

(i) by striking ‘‘income generating’’ and inserting 

‘‘income-generating’’; and 

(ii) by striking ‘‘the recipient country or within a 

country’’ and inserting ‘‘1 or more recipient countries or 

within 1 or more countries’’; and 

(C) in paragraph (3)—

(i) by inserting a comma after ‘‘invested’’; and 

(ii) by inserting a comma after ‘‘used’’. 

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SEC. 3004. LEVELS OF ASSISTANCE. 

Section 204(a) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1724(a)) is amended—

(1) by striking ‘‘1996 through 2002’’ each place it appears 

and inserting ‘‘2002 through 2007’’; 

(2) in paragraph (1), by striking ‘‘2,025,000’’ and inserting 

‘‘2,500,000’’; and 

(3) in paragraph (2), by striking ‘‘1,550,000 metric tons’’

and inserting ‘‘1,875,000 metric tons’’. 

SEC. 3005. FOOD AID CONSULTATIVE GROUP. 

Section 205(f) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1725(f)) is amended by striking 

‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 3006. MAXIMUM LEVEL OF EXPENDITURES. 

Section 206 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1726) is repealed. 

SEC. 3007. ADMINISTRATION. 

Section 207 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1726a) is amended—

(1) in subsection (a)—

(A) by redesignating paragraph (2) as paragraph (3); 

and 

(B) by striking paragraph (1) and inserting the following: 

‘‘(1) RECIPIENT COUNTRIES.—A proposal to enter into a nonemergency food assistance agreement under this title shall identify the recipient country or countries that are the subject of the 

agreement. 

‘‘(2) TIMING.—Not later than 120 days after the date of receipt by the Administrator of a proposal submitted by an eligible organization under this title, the Administrator shall determine whether to accept the proposal.’’; 

(2) in subsection (b), by striking ‘‘guideline’’ each place it 

appears and inserting ‘‘guideline or annual policy guidance’’; 

and 

(3) by adding at the end the following: 

‘‘(e) TIMELY APPROVAL.—

‘‘(1) IN GENERAL.—The Administrator is encouraged to finalize program agreements and resource requests for programs 

under this section before the beginning of each fiscal year. 

‘‘(2) REPORT.—Not later than December 1 of each year, the 

Administrator shall submit to the Committee on Agriculture 

and the Committee on International Relations of the House of 

Representatives and the Committee on Agriculture, Nutrition, 

and Forestry of the Senate a report that contains—

‘‘(A) a list of programs, countries, and commodities approved to date for assistance under this section; and 

‘‘(B) a statement of the total amount of funds approved 

to date for transportation and administrative costs under 

this section.’’. 

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SEC. 3008. ASSISTANCE FOR STOCKPILING AND RAPID TRANSPORTATION, DELIVERY, AND DISTRIBUTION OF SHELF-STABLE 

PREPACKAGED FOODS. 

Section 208(f) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1726b(f)) is amended by striking ‘‘and 

2002’’ and inserting ‘‘through 2007’’. 

SEC. 3009. SALE PROCEDURE. 

(a) IN GENERAL.—Section 403 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1733) is amended—

(1) in subsection (e)—

(A) by striking ‘‘In carrying’’ and inserting the following: 

‘‘(1) IN GENERAL.—In carrying’’; and 

(B) by adding at the end the following: 

‘‘(2) SALE PRICE.—Sales of agricultural commodities described in paragraph (1) shall be made at a reasonable market 

price in the economy where the agricultural commodity is to be 

sold, as determined by the Secretary or the Administrator, as 

appropriate.’’; and 

(2) by adding at the end the following: 

‘‘(l) SALE PROCEDURE.—

‘‘(1) IN GENERAL.—Subsections (b) and (h) shall apply to 

sales of commodities in recipient countries to generate proceeds 

to carry out projects under—

‘‘(A) titles I and II; 

‘‘(B) section 416(b) of the Agricultural Act of 1949 (7 

U.S.C. 1431(b)); and 

‘‘(C) the Food for Progress Act of 1985 (7 U.S.C. 1736o). 

‘‘(2) CURRENCY.—A sale described in paragraph (1) may be 

made in United States dollars or other currencies.’’. 

(b) CONFORMING AMENDMENTS.—

(1) Section 416(b) of the Agricultural Act of 1949 (7 U.S.C. 

1431(b)) is amended by adding at the end the following: 

‘‘(10) SALE PROCEDURE.—In approving sales of commodities 

under this subsection, the Secretary shall follow the sale procedure described in section 403(l) of the Agricultural Trade Development and Assistance Act of 1954.’’. 

(2) Subsection (f) of the Food for Progress Act of 1985 (7 

U.S.C. 1736o(f)) is amended by adding at the end the following: 

‘‘(5) SALE PROCEDURE.—In making sales of eligible commodities under this section, the Secretary shall follow the sale 

procedure described in section 403(l) of the Agricultural Trade 

Development and Assistance Act of 1954.’’. 

SEC. 3010. PREPOSITIONING. 

Section 407(c)(4) of the Agricultural Trade Development and 

Assistance Act of 1954 (7 U.S.C. 1736a(c)(4)) is amended by striking 

‘‘and 2002’’ and inserting ‘‘through 2007’’. 

SEC. 3011. TRANSPORTATION AND RELATED COSTS. 

Section 407(c)(1) of the Agricultural Trade Development and 

Assistance Act of 1954 (7 U.S.C. 1736a(c)(1)) is amended—

(1) by striking ‘‘The Administrator’’ and inserting the following: 

‘‘(A) IN GENERAL.—The Administrator’’; and 

(2) by adding at the end the following: 

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‘‘(B) CERTAIN COMMODITIES MADE AVAILABLE FOR NONEMERGENCY ASSISTANCE.—In the case of agricultural commodities made available for nonemergency assistance under title II 

for least developed countries that meet the poverty and other eligibility criteria established by the International Bank for Reconstruction and Development for financing under the International Development Association, the Administrator may pay 

the transportation costs incurred in moving the agricultural 

commodities from designated points of entry or ports of entry 

abroad to storage and distribution sites and associated storage 

and distribution costs.’’. 

SEC. 3012. EXPIRATION DATE. 

Section 408 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736b) is amended by striking ‘‘2002’’

and inserting ‘‘2007’’. 

SEC. 3013. MICRONUTRIENT FORTIFICATION PROGRAMS. 

Section 415 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736g–2) is amended—

(1) in the section heading, by striking ‘‘PILOT PROGRAM.’’ and inserting ‘‘PROGRAMS.’’; 

(2) in subsection (a)—

(A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and adjusting the 

margins appropriately; 

(B) by striking the first sentence and inserting the following: 

‘‘(1) PROGRAMS.—Not later than September 30, 2003, the 

Administrator, in consultation with the Secretary, shall establish micronutrient fortification programs.’’; and 

(C) in the second sentence, by striking ‘‘The purpose of 

the program’’ and inserting the following: 

‘‘(2) PURPOSE.—The purpose of a program’’; and 

(D) in paragraph (2) (as designated by subparagraph 

(C))—

(i) in subparagraph (A), by striking ‘‘and’’ at the 

end; 

(ii) in subparagraph (B)—

(I) by striking ‘‘whole’’; and 

(II) by striking the period at the end and inserting ‘‘; and’’; and 

(iii) by adding at the end the following: 

‘‘(C) assess and apply technologies and systems to improve and ensure the quality, shelf life, bioavailability, and 

safety of fortified food aid commodities, and products of 

those commodities, that are provided to developing countries, by using the same mechanism that was used to assess 

the micronutrient fortification program in the report entitled ‘Micronutrient Compliance Review of Fortified P.L. 480 

Commodities’, published October 2001 with funds from the 

Bureau for Humanitarian Response of the United States 

Agency for International Development.’’; 

(3) in subsection (b), by striking ‘‘the pilot program’’ and inserting ‘‘a program under this section’’; 

(4) in the first sentence of subsection (c)—

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(A) by striking ‘‘the pilot program, whole’’ and inserting 

‘‘a program,’’; 

(B) by striking ‘‘the pilot program may’’ and inserting 

‘‘a program may’’; 

(C) by striking ‘‘including’’ and inserting ‘‘such as’’; 

and 

(D) by striking ‘‘and iodine’’ and inserting ‘‘iodine, and 

folic acid’’; and 

(5) in subsection (d)—

(A) by striking ‘‘the pilot program’’ and inserting ‘‘programs’’; and 

(B) by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 3014. JOHN OGONOWSKI FARMER-TO-FARMER PROGRAM. 

Section 501 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1737) is amended to read as follows: 

‘‘SEC. 501. JOHN OGONOWSKI FARMER-TO-FARMER PROGRAM. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) CARIBBEAN BASIN COUNTRY.—The term ‘Caribbean 

Basin country’ means a country eligible for designation as a 

beneficiary country under section 212 of the Caribbean Basin 

Economic Recovery Act (19 U.S.C. 2702). 

‘‘(2) EMERGING MARKET.—The term ‘emerging market’

means a country that the Secretary determines—

‘‘(A) is taking steps toward a market-oriented economy 

through the food, agriculture, or rural business sectors of 

the economy of the country; and 

‘‘(B) has the potential to provide a viable and significant market for United States agricultural commodities or 

products of United States agricultural commodities. 

‘‘(3) MIDDLE INCOME COUNTRY.—The term ‘middle income 

country’ means a country that has developed economically to the 

point at which the country does not receive bilateral development assistance from the United States. 

‘‘(4) SUB-SAHARAN AFRICAN COUNTRY.—The term ‘sub-Saharan African country’ has the meaning given the term in section 

107 of the Trade and Development Act of 2000 (19 U.S.C. 

3706). 

‘‘(b) PROVISION.—Notwithstanding any other provision of law, 

to further assist developing countries, middle-income countries, 

emerging markets, sub-Saharan African countries, and Caribbean 

Basin countries to increase farm production and farmer incomes, 

the President may—

‘‘(1) establish and administer a program, to be known as 

the ‘John Ogonowski Farmer-to-Farmer Program’, of farmer-tofarmer assistance between the United States and such countries 

to assist in—

‘‘(A) increasing food production and distribution; and 

‘‘(B) improving the effectiveness of the farming and 

marketing operations of agricultural producers in those 

countries; 

‘‘(2) use United States agricultural producers, 

agriculturalists, colleges and universities (including historically 

black colleges and universities, land grant colleges or universities, and foundations maintained by colleges or universities), 

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private agribusinesses, private organizations (including grassroots organizations with an established and demonstrated capacity to carry out such a bilateral exchange program), private 

corporations, and nonprofit farm organizations to work in conjunction with agricultural producers and farm organizations in 

those countries, on a voluntary basis— ‘‘(A) to improve agricultural and agribusiness operations and agricultural systems in those countries, including improving— ‘‘(i) animal care and health; 

‘‘(ii) field crop cultivation; 

‘‘(iii) fruit and vegetable growing; 

‘‘(iv) livestock operations; 

‘‘(v) food processing and packaging; 

‘‘(vi) farm credit; 

‘‘(vii) marketing; 

‘‘(viii) inputs; and 

‘‘(ix) agricultural extension; and ‘‘(B) to strengthen cooperatives and other agricultural 

groups in those countries; 

‘‘(3) transfer the knowledge and expertise of United States 

agricultural producers and businesses, on an individual basis, 

to those countries while enhancing the democratic process by 

supporting private and public agriculturally related organizations that request and support technical assistance activities 

through cash and in-kind services; ‘‘(4) to the maximum extent practicable, make grants to or 

enter into contracts or other cooperative agreements with private voluntary organizations, cooperatives, land grant universities, private agribusiness, or nonprofit farm organizations to 

carry out this section (except that any such contract or other 

agreement may obligate the United States to make outlays only 

to the extent that the budget authority for such outlays is available under subsection (d) or has otherwise been provided in advance in appropriation Acts); 

‘‘(5) coordinate programs established under this section 

with other foreign assistance programs and activities carried 

out by the United States; and 

‘‘(6) to the extent that local currencies can be used to meet 

the costs of a program established under this section, augment 

funds of the United States that are available for such a program through the use, within the country in which the program 

is being conducted, of—

‘‘(A) foreign currencies that accrue from the sale of agricultural commodities and products under this Act; and 

‘‘(B) local currencies generated from other types of foreign assistance activities.

‘‘(c) SPECIAL EMPHASIS ON SUB-SAHARAN AFRICAN AND CARIBBEAN BASIN COUNTRIES.— ‘‘(1) FINDINGS.—Congress finds that— ‘‘(A) agricultural producers in sub-Saharan African 

and Caribbean Basin countries need training in agricultural techniques that are appropriate for the majority of eligible agricultural producers in those countries, including 

training in—

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‘‘(i) standard growing practices; 

‘‘(ii) insecticide and sanitation procedures; and 

‘‘(iii) other agricultural methods that will produce 

increased yields of more nutritious and healthful crops; 

‘‘(B) agricultural producers in the United States (including African-American agricultural producers) and 

banking and insurance professionals have agribusiness expertise that would be invaluable for agricultural producers 

in sub-Saharan African and Caribbean Basin countries; ‘‘(C) a commitment by the United States is appropriate 

to support the development of a comprehensive agricultural 

skills training program for those agricultural producers 

that focuses on— ‘‘(i) improving knowledge of insecticide and sanitation procedures to prevent crop destruction; ‘‘(ii) teaching modern agricultural techniques that 

would facilitate a continual analysis of crop production, including— ‘‘(I) the identification and development of 

standard growing practices; and ‘‘(II) the establishment of systems for recordkeeping; 

‘‘(iii) the use and maintenance of agricultural 

equipment that is appropriate for the majority of eligible agricultural producers in sub-Saharan African or 

Caribbean Basin countries; ‘‘(iv) the expansion of small agricultural operations 

into agribusiness enterprises by increasing access to 

credit for agricultural producers through— ‘‘(I) the development and use of village banking systems; and ‘‘(II) the use of agricultural risk insurance 

pilot products; and 

‘‘(v) marketing crop yields to prospective purchasers (including businesses and individuals) for 

local needs and export; and 

‘‘(D) programs that promote the exchange of agricultural knowledge and expertise through the exchange of 

American and foreign agricultural producers have been effective in promoting improved agricultural techniques and 

food security and the extension of additional resources to 

such farmer-to-farmer exchanges is warranted. 

‘‘(2) GOALS FOR PROGRAMS CARRIED OUT IN SUB-SAHARAN

AFRICAN AND CARIBBEAN COUNTRIES.—The goals of programs 

carried out under this section in sub-Saharan African and Caribbean Basin countries shall be—

‘‘(A) to expand small agricultural operations in those 

countries into agribusiness enterprises by increasing access 

to credit for agricultural producers through— ‘‘(i) the development and use of village banking 

systems; and ‘‘(ii) the use of agricultural risk insurance pilot 

products; 

‘‘(B) to provide training to agricultural producers in 

those countries that will—

158

‘‘(i) enhance local food security; and 

‘‘(ii) help mitigate and alleviate hunger; 

‘‘(C) to provide training to agricultural producers in 

those countries in groups to encourage participants to share 

and pass on to other agricultural producers in the home 

communities of the participants, the information and skills 

obtained from the training, rather than merely retaining 

the information and skills for the personal enrichment of 

the participants; and 

‘‘(D) to maximize the number of beneficiaries of the programs in sub-Saharan African and Caribbean Basin countries. 

‘‘(d) MINIMUM FUNDING.—Notwithstanding any other provision 

of law, in addition to any funds that may be specifically appropriated to carry out this section, not less than 0.5 percent of the 

amounts made available for each of fiscal years 2002 through 2007 

to carry out this Act shall be used to carry out programs under this 

section, with—

‘‘(1) not less than 0.2 percent to be used for programs in developing countries; and 

‘‘(2) not less than 0.1 percent to be used for programs in 

sub-Saharan African and Caribbean Basin countries. 

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—

‘‘(1) IN GENERAL.—There is authorized to be appropriated to 

carry out programs under this section in sub-Saharan African 

and Caribbean Basin countries $10,000,000 for each of fiscal 

years 2002 through 2007. 

‘‘(2) ADMINISTRATIVE COSTS.—Not more than 5 percent of 

the funds made available for a fiscal year under paragraph (1) 

may be used to pay administrative costs incurred in carrying 

out programs in sub-Saharan African and Caribbean Basin 

countries.’’. 

Subtitle B—Agricultural Trade Act of 1978

SEC. 3101. EXPORTER ASSISTANCE INITIATIVE. 

Title I of the Agricultural Trade Act of 1978 (7 U.S.C. 5601 et 

seq.) is amended by adding at the end the following: 

‘‘SEC. 107. EXPORTER ASSISTANCE INITIATIVE. 

‘‘To provide a comprehensive source of information to facilitate 

exports of United States agricultural commodities, the Secretary 

shall maintain on a website on the Internet information to assist exporters and potential exporters of United States agricultural commodities.’’.

SEC. 3102. EXPORT CREDIT GUARANTEE PROGRAM. 

(a) TERMS OF SUPPLIER CREDIT PROGRAM.—Section 202(a) of 

the Agricultural Trade Act of 1978 (7 U.S.C. 5622(a)) is amended 

by adding at the end the following: 

‘‘(3) EXTENDED SUPPLIER CREDITS.—

‘‘(A) IN GENERAL.—Subject to the appropriation of 

funds under subparagraph (B), in carrying out this section, 

the Commodity Credit Corporation may issue guarantees 

for the repayment of credit made available for a period of 

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more than 180 days, but not more than 360 days, by a 

United States exporter to a buyer in a foreign country. 

‘‘(B) AUTHORIZATION OF APPROPRIATIONS.—There are 

authorized to be appropriated such sums as are necessary 

to fund the additional costs attributable to the portion of 

any guarantee issued under this paragraph to cover the repayment of credit beyond the initial 180-day period.’’. 

(b) PROCESSED AND HIGH-VALUE PRODUCTS.—Section 202(k)(1) 

of the Agricultural Trade Act of 1978 (7 U.S.C. 5622(k)(1)) is 

amended by striking ‘‘, 2001, and 2002’’ and inserting ‘‘through 

2007’’. 

(c) REPORT.—Section 202 of the Agricultural Trade Act of 1978 

(7 U.S.C. 5622) is amended by adding at the end the following: 

‘‘(l) CONSULTATION ON AGRICULTURAL EXPORT CREDIT PROGRAMS.—The Secretary and the United States Trade Representative 

shall consult on a regular basis with the Committee on Agriculture, 

and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate on the status of multilateral negotiations regarding agricultural export credit programs.’’. 

(d) REAUTHORIZATION.—Section 211(b)(1) of the Agricultural 

Trade Act of 1978 (7 U.S.C. 5641(b)(1)) is amended by striking 

‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 3103. MARKET ACCESS PROGRAM. 

Section 211(c) of the Agricultural Trade Act of 1978 (7 U.S.C. 

5641(c)) is amended—

(1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and indenting appropriately; 

(2) by striking ‘‘The Commodity’’ and inserting the following: 

‘‘(1) IN GENERAL.—The Commodity’’; 

(3) by striking subparagraph (A) (as so redesignated) and 

inserting the following: 

‘‘(A) in addition to any funds that may be specifically 

appropriated to implement a market access program, not 

more than $90,000,000 for fiscal year 2001, $100,000,000 

for fiscal year 2002, $110,000,000 for fiscal year 2003, 

$125,000,000 for fiscal year 2004, $140,000,000 for fiscal 

year 2005, and $200,000,000 for each of fiscal years 2006 

and 2007, of the funds of, or an equal value of commodities 

owned by, the Commodity Credit Corporation; and’’; and 

(4) by adding at the end the following: 

‘‘(2) PROGRAM PRIORITIES.—In providing any amount of 

funds made available under paragraph (1)(A) for any fiscal 

year that is in excess of the amount made available under paragraph (1)(A) for fiscal year 2001, the Secretary shall, to the 

maximum extent practicable—

‘‘(A) give equal consideration to—

‘‘(i) proposals submitted by organizations that were 

participating organizations in prior fiscal years; and 

‘‘(ii) proposals submitted by eligible trade organizations that have not previously participated in the 

program established under this title; and 

‘‘(B) give equal consideration to—

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‘‘(i) proposals submitted for activities in emerging 

markets; and 

‘‘(ii) proposals submitted for activities in markets 

other than emerging markets.’’. 

SEC. 3104. EXPORT ENHANCEMENT PROGRAM. 

(a) IN GENERAL.—Section 301(e)(1)(G) of the Agricultural Trade 

Act of 1978 (7 U.S.C. 5651(e)(1)(G)) is amended by striking ‘‘fiscal 

year 2002’’ and inserting ‘‘each of fiscal years 2002 through 2007’’. 

(b) UNFAIR TRADE PRACTICES.—Section 102(5)(A) of the Agricultural Trade Act of 1978 (7 U.S.C. 5602(5)(A)) is amended—

(1) in clause (i), by striking ‘‘or’’ at the end; and 

(2) by striking clause (ii) and inserting the following: 

‘‘(ii) in the case of a monopolistic state trading enterprise engaged in the export sale of an agricultural 

commodity, implements a pricing practice that is inconsistent with sound commercial practice; 

‘‘(iii) provides a subsidy that—

‘‘(I) decreases market opportunities for United 

States exports; or 

‘‘(II) unfairly distorts an agricultural market 

to the detriment of United States exporters; 

‘‘(iv) imposes an unfair technical barrier to trade, 

including—

‘‘(I) a trade restriction or commercial requirement (such as a labeling requirement) that adversely affects a new technology (including biotechnology); and 

‘‘(II) an unjustified sanitary or phytosanitary 

restriction (including any restriction that, in violation of the Uruguay Round Agreements, is not 

based on scientific principles; 

‘‘(v) imposes a rule that unfairly restricts imports 

of United States agricultural commodities in the administration of tariff rate quotas; or 

‘‘(vi) fails to adhere to, or circumvents any obligation under, any provision of a trade agreement with the 

United States.’’. 

SEC. 3105. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM. 

(a) VALUE-ADDED PRODUCTS.—

(1) IN GENERAL.—Section 702(a) of the Agricultural Trade 

Act of 1978 (7 U.S.C. 5722(a)) is amended by inserting ‘‘, with 

a continued significant emphasis on the importance of the export of value-added United States agricultural products into 

emerging markets’’ after ‘‘products’’. 

(2) REPORT TO CONGRESS.—Section 702 of the Agricultural 

Trade Act of 1978 (7 U.S.C. 5722) is amended by adding at the 

end the following: 

‘‘(c) REPORT TO CONGRESS.—The Secretary shall annually submit to the Committee on Agriculture and the Committee on International Relations of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report 

on activities under this section describing the amount of funding 

provided, the types of programs funded, the value-added products 

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that have been targeted, and the foreign markets for those products 

that have been developed.’’. 

(b) FUNDING.—Section 703 of the Agricultural Trade Act of 

1978 (7 U.S.C. 5723) is amended to read as follows: 

‘‘SEC. 703. FUNDING. 

‘‘(a) IN GENERAL.—To carry out this title, the Secretary shall 

use funds of the Commodity Credit Corporation, or commodities of 

the Commodity Credit Corporation of a comparable value, in the 

amount of $34,500,000 for each of fiscal years 2002 through 2007. 

‘‘(b) PROGRAM PRIORITIES.—In providing any amount of funds 

or commodities made available under subsection (a) for any fiscal 

year that is in excess of the amount made available under this section for fiscal year 2001, the Secretary shall, to the maximum extent 

practicable—

‘‘(1) give equal consideration to—

‘‘(A) proposals submitted by organizations that were 

participating organizations in prior fiscal years; and 

‘‘(B) proposals submitted by eligible trade organizations that have not previously participated in the program 

established under this title; and 

‘‘(2) give equal consideration to—

‘‘(A) proposals submitted for activities in emerging 

markets; and ‘‘(B) proposals submitted for activities in markets other 

than emerging markets.’’. 

SEC. 3106. FOOD FOR PROGRESS. 

(a) IN GENERAL.—Subsections (f)(3), (k), and (l)(1) of the Food 

for Progress Act of 1985 (7 U.S.C. 1736o) are each amended by 

striking ‘‘2002’’ and inserting ‘‘2007’’. 

(b) DEFINITIONS; PROGRAM.—

(1) IN GENERAL.—The Food for Progress Act of 1985 (7 

U.S.C. 1736o) is amended by striking subsections (b) and (c) 

and inserting the following: 

‘‘(b) DEFINITIONS.—In this section: 

‘‘(1) COOPERATIVE.—The term ‘cooperative’ has the meaning 

given the term in section 402 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1732). 

‘‘(2) CORPORATION.—The term ‘Corporation’ means the 

Commodity Credit Corporation. 

‘‘(3) DEVELOPING COUNTRY.—The term ‘developing country’

has the meaning given the term in section 402 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 

1732).

‘‘(4) ELIGIBLE COMMODITY.—The term ‘eligible commodity’

means an agricultural commodity, or a product of an agricultural commodity, in inventories of the Corporation or acquired 

by the President or the Corporation for disposition through 

commercial purchases under a program authorized under this 

section. ‘‘(5) ELIGIBLE ENTITY.—The term ‘eligible entity’ means— ‘‘(A) the government of an emerging agricultural country; ‘‘(B) an intergovernmental organization; 

‘‘(C) a private voluntary organization; 

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‘‘(D) a nonprofit agricultural organization or cooperative; ‘‘(E) a nongovernmental organization; and 

‘‘(F) any other private entity. ‘‘(6) FOOD SECURITY.—The term ‘food security’ means access 

by all people at all times to sufficient food and nutrition for a 

healthy and productive life. ‘‘(7) NONGOVERNMENTAL ORGANIZATION.—The term ‘nongovernmental organization’ has the meaning given the term in 

section 402 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1732). ‘‘(8) PRIVATE VOLUNTARY ORGANIZATION.—The term ‘private 

voluntary organization’ has the meaning given the term in section 402 of the Agricultural Trade Development and Assistance 

Act of 1954 (7 U.S.C. 1732). ‘‘(9) PROGRAM.—The term ‘program’ means a food assistance or development initiative proposed by an eligible entity 

and approved by the President under this section. 

‘‘(c) PROGRAM.—In order to use the food resources of the United 

States more effectively in support of developing countries, and countries that are emerging democracies that have made commitments 

to introduce or expand free enterprise elements in their agricultural 

economies through changes in commodity pricing, marketing, input 

availability, distribution, and private sector involvement, the President may enter into agreements with eligible entities to furnish to 

the countries eligible commodities made available under subsections 

(e) and (f).’’. (2) CONFORMING AMENDMENTS.—The Food for Progress Act 

of 1985 (7 U.S.C. 136o) is amended— (A) in the first sentence of subsection (d), by striking ‘‘food’’; 

(B) in subsection (l)(2), by striking ‘‘agricultural’’; 

(C) in subsection (m)(1), by striking ‘‘these’’; 

(D) in subsections (d), (e), (f), (h), (j), (l), and (m), by 

striking ‘‘commodities’’ each place it appears and inserting 

‘‘eligible commodities’’; and 

(E) in subsections (e), (f), and (l), by striking ‘‘Commodity Credit Corporation’’ each place it appears and inserting ‘‘Corporation’’; and 

(F) by striking subsection (o). 

(c) CONSIDERATION FOR AGREEMENTS.—Subsection (d) of the 

Food for Progress Act of 1985 (7 U.S.C. 1736o(d)) is amended by 

striking ‘‘(d) In determining’’ and inserting ‘‘(d) CONSIDERATION FOR

AGREEMENTS.—In determining’’. 

(d) FUNDING OF ELIGIBLE COMMODITIES.—Subsection (e) of the 

Food for Progress Act of 1985 (7 U.S.C. 1736o(e)) is amended—

(1) by striking ‘‘(e)’’ and inserting ‘‘(e) FUNDING OF ELIGIBLE

COMMODITIES.—’’; 

(2) in paragraph (2), by inserting ‘‘, and subsection (g) does 

not apply to eligible commodities furnished on a grant basis or 

on credit terms under that title’’ before the period at the end; 

and 

(3) by adding at the end the following: 

‘‘(5) NO EFFECT ON DOMESTIC PROGRAMS.—The President 

shall not make an eligible commodity available for disposition 

163

under this section in any amount that will reduce the amount 

of the eligible commodity that is traditionally made available 

through donations to domestic feeding programs or agencies, as 

determined by the President. 

(e) PROVISION OF ELIGIBLE COMMODITIES TO DEVELOPING

COUNTRIES.—Subsection (f) of the Food for Progress Act of 1985 (7 

U.S.C. 1736o(f)) is amended— (1) by striking ‘‘(f)’’ and inserting ‘‘(f) PROVISION OF ELIGI- BLE COMMODITIES TO DEVELOPING COUNTRIES.—’’; and 

(2) in paragraph (3), by striking ‘‘$30,000,000 (or in the 

case of fiscal year 1999, $35,000,000)’’ and inserting ‘‘$40,000,000’’. (f) MINIMUM TONNAGE.—The Food for Progress Act of 1985 is 

amended by striking subsection (g) (7 U.S.C. 1736o(g)) and inserting the following: ‘‘(g) MINIMUM TONNAGE.—Subject to subsection (f)(3), not less 

than 400,000 metric tons of eligible commodities may be provided 

under this section for the program for each of fiscal years 2002 

through 2007.’’. (g) PROHIBITION ON RESALE OR TRANSSHIPMENT OF ELIGIBLE

COMMODITIES.—Subsection (h) of the Food for Progress Act of 1985 

(7 U.S.C. 1736o(h)) is amended by striking ‘‘(h) An agreement’’ and 

inserting ‘‘(h) PROHIBITION ON RESALE OR TRANSSHIPMENT OF ELI- GIBLE COMMODITIES.—An agreement’’. (h) DISPLACEMENT OF UNITED STATES COMMERCIAL SALES.— Subsection (i) of the Food for Progress Act of 1985 (7 U.S.C. 

1736o(i)) is amended by striking ‘‘(i) In entering’’ and inserting ‘‘(i) 

DISPLACEMENT OF UNITED STATES COMMERCIAL SALES.—In entering’’. 

(i) MULTICOUNTRY OR MULTIYEAR BASIS.—Subsection (j) of the 

Food for Progress Act of 1985 (7 U.S.C. 1736o(j)) is amended— (1) by striking ‘‘(j) In carrying out this section, the President may,’’ and inserting the following: ‘‘(j) MULTICOUNTRY OR

MULTIYEAR BASIS.—

‘‘(1) IN GENERAL.—In carrying out this section, the President,’’; 

(2) by striking ‘‘approve’’ and inserting ‘‘is encouraged to 

approve’’; 

(3) by striking ‘‘multiyear’’ and inserting ‘‘multicountry or 

multiyear’’; and 

(4) by adding at the end the following: 

‘‘(2) DEADLINE FOR PROGRAM ANNOUNCEMENTS.—Before the 

beginning of any fiscal year, the President shall, to the maximum extent practicable—

‘‘(A) make all determinations concerning program 

agreements and resource requests for programs under this 

section; and 

‘‘(B) announce those determinations. 

‘‘(3) REPORT.—Not later than December 1 of each fiscal 

year, the President shall submit to the Committee on Agriculture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate a list of programs, countries, and eligible commodities, and the total 

amount of funds for transportation and administrative costs, 

approved to date for the fiscal year under this section.’’. 

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(j) EFFECTIVE AND TERMINATION DATES.—Subsection (k) of the 

Food for Progress Act of 1985 (7 U.S.C. 1736o(k)) is amended by 

striking ‘‘(k) This section’’ and inserting ‘‘(k) EFFECTIVE AND TERMI- NATION DATES.—This section’’. (k) ADMINISTRATIVE EXPENSES.—Subsection (l) of the Food for 

Progress Act of 1985 (7 U.S.C. 1736o(l)) is amended— (1) by striking ‘‘(l)’’ and inserting ‘‘(l) ADMINISTRATIVE EX- PENSES.—’’; 

(2) in paragraph (1), by striking ‘‘$10,000,000’’ and inserting ‘‘$15,000,000’’; 

(3) in paragraph (3), by striking ‘‘local currencies’’ and inserting ‘‘proceeds’’; and 

(4) by adding at the end the following: 

‘‘(4) HUMANITARIAN OR DEVELOPMENT PURPOSES.—The Secretary may authorize the use of proceeds to pay the costs incurred by an eligible entity under this section for— ‘‘(A)(i) programs targeted at hunger and malnutrition; 

or ‘‘(ii) development programs involving food security; 

‘‘(B) transportation, storage, and distribution of eligible 

commodities provided under this section; and ‘‘(C) administration, sales, monitoring, and technical 

assistance.’’. (l) PRESIDENTIAL APPROVAL.—Subsection (m) of the Food for 

Progress Act of 1985 (7 U.S.C. 1736o(m)) is amended by striking 

‘‘(m) In carrying’’ and inserting ‘‘(m) PRESIDENTIAL APPROVAL.—In 

carrying’’. (m) PROGRAM MANAGEMENT.—The Food for Progress Act of 

1985 is amended by striking subsection (n) (7 U.S.C. 1736o(n)) and 

inserting the following: ‘‘(n) PROGRAM MANAGEMENT.— ‘‘(1) IN GENERAL.—The President shall ensure, to the maximum extent practicable, that each eligible entity participating 

in 1 or more programs under this section— ‘‘(A) uses eligible commodities made available under 

this section— ‘‘(i) in an effective manner; 

‘‘(ii) in the areas of greatest need; and 

‘‘(iii) in a manner that promotes the purposes of 

this section;

‘‘(B) in using eligible commodities, assesses and takes 

into account the needs of recipient countries and the target 

populations of the recipient countries; ‘‘(C) works with recipient countries, and indigenous institutions or groups in recipient countries, to design and 

carry out mutually acceptable programs authorized under 

this section; and ‘‘(D) monitors and reports on the distribution or sale of 

eligible commodities provided under this section using 

methods that, as determined by the President, facilitate accurate and timely reporting. 

‘‘(2) REQUIREMENTS.— ‘‘(A) IN GENERAL.—Not later than 270 days after the 

date of enactment of this paragraph, the President shall review and, as necessary, make changes in regulations and 

165

internal procedures designed to streamline, improve, and 

clarify the application, approval, and implementation processes pertaining to agreements under this section. ‘‘(B) CONSIDERATIONS.—In conducting the review, the 

President shall consider— ‘‘(i) revising procedures for submitting proposals; 

‘‘(ii) developing criteria for program approval that 

separately address the objectives of the program; ‘‘(iii) pre-screening organizations and proposals to 

ensure that the minimum qualifications are met; ‘‘(iv) implementing e-government initiatives and 

otherwise improving the efficiency of the proposal submission and approval processes; ‘‘(v) upgrading information management systems; 

‘‘(vi) improving commodity and transportation procurement processes; and ‘‘(vii) ensuring that evaluation and monitoring 

methods are sufficient. 

‘‘(C) CONSULTATIONS.—Not later than 1 year after the 

date of enactment of this paragraph, the President shall 

consult with the Committee on Agriculture, and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, 

and Forestry of the Senate on changes made in regulations 

and procedures. 

‘‘(3) REPORTS.—Each eligible entity that enters into an 

agreement under this section shall submit to the President, at 

such time as the President may request, a report containing 

such information as the President may request relating to the 

use of eligible commodities and funds furnished to the eligible 

entity under this section.’’. 

SEC. 3107. MCGOVERN-DOLE INTERNATIONAL FOOD FOR EDUCATION 

AND CHILD NUTRITION PROGRAM. 

(a) DEFINITION OF AGRICULTURAL COMMODITY.—In this section, 

the term ‘‘agricultural commodity’’ means an agricultural commodity, or a product of an agricultural commodity, that is produced 

in the United States. 

(b) PROGRAM.—Subject to subsection (l), the President may establish a program, to be known as ‘‘McGovern-Dole International 

Food for Education and Child Nutrition Program’’, requiring the 

procurement of agricultural commodities and the provision of financial and technical assistance to carry out—

(1) preschool and school food for education programs in foreign countries to improve food security, reduce the incidence of 

hunger, and improve literacy and primary education, particularly with respect to girls; and 

(2) maternal, infant, and child nutrition programs for pregnant women, nursing mothers, infants, and children who are 5 

years of age or younger. 

(c) ELIGIBLE COMMODITIES AND COST ITEMS.—Notwithstanding 

any other provision of law—

(1) any agricultural commodity is eligible to be provided 

under this section; 

(2) as necessary to achieve the purposes of this section, 

funds appropriated under this section may be used to pay—

166

(A)(i) the cost of acquiring agricultural commodities; 

(ii) the costs associated with packaging, enrichment, 

preservation, and fortification of agricultural commodities; 

(iii) the processing, transportation, handling, and other 

incidental costs up to the time of the delivery of agricultural commodities free on board vessels in United States 

ports; 

(iv) the vessel freight charges from United States ports 

or designated Canadian transshipment ports, as determined by the Secretary, to designated ports of entry abroad; 

(v) the costs associated with transporting agricultural 

commodities from United States ports to designated points 

of entry abroad in the case— (I) of landlocked countries; 

(II) of ports that cannot be used effectively because 

of natural or other disturbances; 

(III) of the unavailability of carriers to a specific 

country; or 

(IV) of substantial savings in costs or time that 

may be effected by the utilization of points of entry 

other than ports; and 

(vi) the charges for general average contributions arising out of the ocean transport of agricultural commodities 

transferred pursuant thereto; 

(B) all or any part of the internal transportation, storage, and handling costs incurred in moving the eligible 

commodity, if the President determines that— (i) payment of the costs is appropriate; and 

(ii) the recipient country is a low income, net foodimporting country that— (I) meets the poverty criteria established by the 

International Bank for Reconstruction and Development for Civil Works Preference; and 

(II) has a national government that is committed to or is working toward, through a national 

action plan, the goals of the World Declaration on 

Education for All convened in 1990 in Jomtien, 

Thailand, and the followup Dakar Framework for 

Action of the World Education Forum, convened in 

2000; 

(C) the costs of activities conducted in the recipient 

countries by a nonprofit voluntary organization, cooperative, or intergovernmental agency or organization that 

would enhance the effectiveness of the activities implemented by such entities under this section; and 

(D) the costs of meeting the allowable administrative 

expenses of private voluntary organizations, cooperatives, or 

intergovernmental organizations that are implementing activities under this section. 

(d) GENERAL AUTHORITIES.—The President shall designate 1 or 

more Federal agencies to— (1) implement the program established under this section; 

(2) ensure that the program established under this section 

is consistent with the foreign policy and development assistance 

objectives of the United States; and 

167

(3) consider, in determining whether a country should receive assistance under this section, whether the government of 

the country is taking concrete steps to improve the preschool 

and school systems in the country. 

(e) ELIGIBLE ENTITIES.—Assistance may be provided under this 

section to private voluntary organizations, cooperatives, intergovernmental organizations, governments of developing countries and their 

agencies, and other organizations. 

(f) PROCEDURES.—

(1) IN GENERAL.—In carrying out subsection (b), the President shall ensure that procedures are established that—

(A) provide for the submission of proposals by eligible 

entities, each of which may include 1 or more recipient 

countries, for commodities and other assistance under this 

section; 

(B) provide for eligible commodities and assistance on 

a multiyear basis; 

(C) ensure that eligible entities demonstrate the organizational capacity and the ability to develop, implement, 

monitor, report on, and provide accountability for activities 

conducted under this section; 

(D) provide for the expedited development, review, and 

approval of proposals submitted in accordance with this 

section; 

(E) ensure monitoring and reporting by eligible entities 

on the use of commodities and other assistance provided 

under this section; and 

(F) allow for the sale or barter of commodities by eligible entities to acquire funds to implement activities that improve the food security of women and children or otherwise 

enhance the effectiveness of programs and activities authorized under this section. 

(2) PRIORITIES FOR PROGRAM FUNDING.—In carrying out 

paragraph (1) with respect to criteria for determining the use 

of commodities and other assistance provided for programs and 

activities authorized under this section, the implementing agency may consider the ability of eligible entities to—

(A) identify and assess the needs of beneficiaries, especially malnourished or undernourished mothers and their 

children who are 5 years of age or younger, and school-age 

children who are malnourished, undernourished, or do not 

regularly attend school; 

(B)(i) in the case of preschool and school-age children, 

target low-income areas where children’s enrollment and 

attendance in school is low or girls’ enrollment and participation in preschool or school is low, and incorporate developmental objectives for improving literacy and primary 

education, particularly with respect to girls; and 

(ii) in the case of programs to benefit mothers and children who are 5 years of age or younger, coordinate supplementary feeding and nutrition programs with existing or 

newly-established maternal, infant, and children programs 

that provide health-needs interventions, including maternal, prenatal, and postnatal and newborn care; 

168

(C) involve indigenous institutions as well as local 

communities and governments in the development and implementation of the programs and activities to foster local 

capacity building and leadership; and 

(D) carry out multiyear programs that foster local selfsufficiency and ensure the longevity of programs in the recipient country. 

(g) USE OF FOOD AND NUTRITION SERVICE.—The Food and Nutrition Service of the Department of Agriculture may provide technical advice on the establishment of programs under subsection 

(b)(1) and on implementation of the programs in the field in recipient countries. 

(h) MULTILATERAL INVOLVEMENT.—

(1) IN GENERAL.—The President is urged to engage existing 

international food aid coordinating mechanisms to ensure multilateral commitments to, and participation in, programs similar to programs supported under this section. 

(2) REPORTS.—The President shall annually submit to the 

Committee on International Relations and the Committee on 

Agriculture of the House of Representatives and the Committee 

on Agriculture, Nutrition, and Forestry of the Senate a report 

on the commitments and activities of governments, including 

the United States government, in the global effort to reduce 

child hunger and increase school attendance. 

(i) PRIVATE SECTOR INVOLVEMENT.—The President is urged to 

encourage the support and active involvement of the private sector, 

foundations, and other individuals and organizations in programs 

assisted under this section. 

(j) GRADUATION.—An agreement with an eligible organization 

under this section shall include provisions—

(1) to—

(A) sustain the benefits to the education, enrollment, 

and attendance of children in schools in the targeted communities when the provision of commodities and assistance 

to a recipient country under a program under this section 

terminates; and 

(B) estimate the period of time required until the recipient country or eligible organization is able to provide sufficient assistance without additional assistance under this 

section; or 

(2) to provide other long-term benefits to targeted populations of the recipient country. 

(k) REQUIREMENT TO SAFEGUARD LOCAL PRODUCTION AND

USUAL MARKETING.—The requirement of section 403(a) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 

1733(a)) applies with respect to the availability of commodities 

under this section. 

(l) FUNDING.—

(1) IN GENERAL.—Of the funds of the Commodity Credit 

Corporation, the President shall use $100,000,000 for fiscal 

year 2003 to carry out this section. 

(2) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry out 

this section for each of fiscal years 2004 through 2007. 

169

(3) ADMINISTRATIVE EXPENSES.—Funds made available to 

carry out this section may be used to pay the administrative expenses of any Federal agency implementing or assisting in the 

implementation of this section. 

Subtitle C—Miscellaneous 

SEC. 3201. SURPLUS COMMODITIES FOR DEVELOPING OR FRIENDLY 

COUNTRIES. 

(a) USE OF CURRENCIES.—Section 416(b)(7)(D) of the Agricultural Act of 1949 (7 U.S.C. 1431(b)(7)(D)) is amended— (1) in clauses (i) and (iii), by striking ‘‘foreign currency’’ each place it appears; 

(2) in clause (ii)— (A) by striking ‘‘Foreign currencies’’ and inserting ‘‘Proceeds’’; and 

(B) by striking ‘‘foreign currency’’; and 

(3) in clause (iv)— (A) by striking ‘‘Foreign currency proceeds’’ and inserting ‘‘Proceeds’’; 

(B) by striking ‘‘country of origin’’ the second place it 

appears and all that follows through ‘‘as necessary to expedite’’ and inserting ‘‘country of origin as necessary to expedite’’; 

(C) by striking ‘‘; or’’ and inserting a period; and 

(D) by striking subclause (II). 

(b) IMPLEMENTATION OF AGREEMENTS.—Section 416(b) of the 

Agricultural Act of 1949 (7 U.S.C. 1431(b)) (as amended by section 

3009(b)) is amended— (1) in paragraph (8), by striking ‘‘(8)(A)’’ and all that follows through ‘‘(B) The Secretary’’ and inserting the following: ‘‘(8) ADMINISTRATIVE PROVISIONS.— ‘‘(A) EXPEDITED PROCEDURES.—To the maximum extent 

practicable, expedited procedures shall be used in the implementation of this subsection. ‘‘(B) ESTIMATE OF COMMODITIES.—The Secretary shall 

publish in the Federal Register, not later than October 31 

of each fiscal year, an estimate of the types and quantities 

of commodities and products that will be available under 

this section for the fiscal year. ‘‘(C) FINALIZATION OF AGREEMENTS.—The Secretary is 

encouraged to finalize program agreements under this section not later than December 31 of each fiscal year. ‘‘(D) REGULATIONS.—The Secretary’’; and 

(2) by adding at the end the following: 

‘‘(11) REQUIREMENTS.— ‘‘(A) IN GENERAL.—Not later than 270 days after the 

date of enactment of this subparagraph, the Secretary shall 

review and, as necessary, make changes in regulations and 

internal procedures designed to streamline, improve, and 

clarify the application, approval, and implementation processes pertaining to agreements under this section. ‘‘(B) CONSIDERATIONS.—In conducting the review, the 

Secretary shall consider—

‘‘(i) revising procedures for submitting proposals; 

170

‘‘(ii) developing criteria for program approval that 

separately address the objectives of the program; 

‘‘(iii) pre-screening organizations and proposals to 

ensure that the minimum qualifications are met; 

‘‘(iv) implementing e-government initiatives and 

otherwise improving the efficiency of the proposal submission and approval processes; 

‘‘(v) upgrading information management systems; 

‘‘(vi) improving commodity and transportation procurement processes; and 

‘‘(vii) ensuring that evaluation and monitoring 

methods are sufficient. 

‘‘(C) CONSULTATIONS.—Not later than 1 year after the 

date of enactment of this subparagraph, the Secretary shall 

consult with the Committee on Agriculture, and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, 

and Forestry of the Senate on changes made in regulations 

and procedures under this paragraph.’’. 

SEC. 3202. BILL EMERSON HUMANITARIAN TRUST. 

Section 302 of the Bill Emerson Humanitarian Trust Act (7 

U.S.C. 1736f–1) is amended by striking ‘‘2002’’ each place it appears 

in subsection (b)(2)(B)(i) and paragraphs (1) and (2) of subsection 

(h) and inserting ‘‘2007’’. 

SEC. 3203. EMERGING MARKETS. 

Section 1542 of the Food, Agriculture, Conservation, and Trade 

Act of 1990 (7 U.S.C. 5622 note) is amended in subsections (a) and 

(d)(1)(A)(i) by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 3204. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM. 

The Food, Agriculture, Conservation, and Trade Act of 1990 is 

amended by inserting after section 1543 (7 U.S.C. 3293) the following:

‘‘SEC. 1543A. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM. 

‘‘(a) ESTABLISHMENT.—There is established in the Department 

the biotechnology and agricultural trade program. 

‘‘(b) PURPOSE.—The purpose of the program shall be to remove, 

resolve, or mitigate significant regulatory nontariff barriers to the 

export of United States agricultural commodities (as defined in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602)) into 

foreign markets through public and private sector projects funded 

by grants that address—

‘‘(1) quick response intervention regarding nontariff barriers to United States exports involving—

‘‘(A) United States agricultural commodities produced 

through biotechnology; 

‘‘(B) food safety; 

‘‘(C) disease; or 

‘‘(D) other sanitary or phytosanitary concerns; or 

‘‘(2) developing protocols as part of bilateral negotiations 

with other countries on issues such as animal health, grain 

quality, and genetically modified commodities. 

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‘‘(c) ELIGIBLE PROGRAMS.—Depending on need, as determined 

by the Secretary, activities authorized under this section may be carried out through—

‘‘(1) this section; 

‘‘(2) the emerging markets program under section 1542; or 

‘‘(3) the Cochran Fellowship Program under section 1543. 

‘‘(d) FUNDING.—There is authorized to be appropriated 

$6,000,000 for each of fiscal years 2002 through 2007.’’. 

SEC. 3205. TECHNICAL ASSISTANCE FOR SPECIALTY CROPS. 

(a) ESTABLISHMENT.—The Secretary of Agriculture shall establish an export assistance program (referred to in this section as the 

‘‘program’’) to address unique barriers that prohibit or threaten the 

export of United States specialty crops. 

(b) PURPOSE.—The program shall provide direct assistance 

through public and private sector projects and technical assistance 

to remove, resolve, or mitigate sanitary and phytosanitary and related barriers to trade. 

(c) PRIORITY.—The program shall address time sensitive and 

strategic market access projects based on—

(1) trade effect on market retention, market access, and 

market expansion; and 

(2) trade impact. 

(d) FUNDING.—For each of fiscal years 2002 through 2007, the 

Secretary shall make available $2,000,000 of the funds of, or an 

equal value of commodities owned by, the Commodity Credit Corporation. 

SEC. 3206. GLOBAL MARKET STRATEGY. 

(a) IN GENERAL.—Not later than 180 days after the date of enactment of this Act, and biennially thereafter, the Secretary of Agriculture shall consult with the Committee on Agriculture, and the 

Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of 

the Senate on the formulation and implementation of a global market strategy for the Department of Agriculture that, to the maximum 

extent practicable—

(1) identifies opportunities for the growth of agricultural exports to overseas markets; 

(2) ensures that the resources, programs, and policies of the 

Department are coordinated with those of other agencies; and 

(3) remove barriers to agricultural trade in overseas markets. 

(b) REVIEW.—The consultations under subsection (a) shall include a review of—

(1) the strategic goals of the Department; and 

(2) the progress of the Department in implementing the 

strategic goals through the global market strategy. 

SEC. 3207. REPORT ON USE OF PERISHABLE COMMODITIES AND LIVE 

ANIMALS. 

Not later than 120 days after the date of enactment of this Act, 

the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on international food aid programs of the United States that evaluates—

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(1) the implications of storage and transportation capacity 

and funding for the use of perishable agricultural commodities 

and semiperishable agricultural commodities; and 

(2) the feasibility of the transport of lambs and other live 

animals under the program. 

SEC. 3208. STUDY ON FEE FOR SERVICES. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture shall submit to the 

Committee on Agriculture, and the Committee on International Relations, of the House of Representatives and the Committee on Agriculture, Nutrition and Forestry of the Senate a report on the feasibility of instituting a program under which the Secretary would 

charge and retain a fee to cover the costs incurred by the Department of Agriculture, acting through the Foreign Agricultural Service 

or any successor agency, in providing persons with commercial services provided outside the United States. 

(b) PURPOSE OF PROGRAM.—The purpose of a program described in subsection (a) would be to supplement and not replace 

any services currently offered overseas by the Foreign Agricultural 

Service. 

(c) MARKET DEVELOPMENT STRATEGY.—A program under subsection (b) would be part of an overall market development strategy 

for a particular country or region. 

(d) PILOT PROGRAM.—A program under subsection (a) would be 

established on a pilot basis to ensure that the program does not disadvantage small- and medium-sized companies, including companies that have never engaged in exporting. 

SEC. 3209. SENSE OF CONGRESS CONCERNING FOREIGN ASSISTANCE 

PROGRAMS. 

(a) FINDINGS.—Congress finds that—

(1) the international community faces a continuing epidemic of ethnic, sectarian, and criminal violence;

(2) poverty, hunger, political uncertainty, and social instability are the principal causes of violence and conflict around 

the world; 

(3) broad-based, equitable economic growth and agriculture 

development facilitates political stability, food security, democracy, and the rule of law; 

(4) democratic governments are more likely to advocate and 

observe international laws, protect civil and human rights, pursue free market economies, and avoid external conflicts; 

(5) the United States Agency for International Development 

has provided critical democracy and governance assistance to a 

majority of the nations that successfully made the transition to 

democratic governments during the past 2 decades; 

(6) 43 of the top 50 consumer nations of American agricultural products were once United States foreign aid recipients; 

(7) in the past 50 years, infant child death rates in the developing world have been reduced by 50 percent, and health 

conditions around the world have improved more during this 

period than in any other period; 

(8) the United States Agency for International Development 

child survival programs have significantly contributed to a 10 

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percent reduction in infant mortality rates worldwide in just 

the past 8 years; 

(9) in providing assistance by the United States and other 

donors in better seeds and teaching more efficient agricultural 

techniques over the past 2 decades have helped make it possible 

to feed an additional 1,000,000,000 people in the world; 

(10) despite this progress, approximately 1,200,000,000 people, one-quarter of the world’s population, live on less that $1 

per day, and approximately 3,000,000,000 people live on only 

$2 per day; 

(11) 95 percent of new births occur in developing countries, 

including the world’s poorest countries; and 

(12) only 1⁄2 percent of the Federal budget is dedicated to 

international economic and humanitarian assistance. 

(b) SENSE OF CONGRESS.—It is the sense of Congress that— (1) United States foreign assistance programs should play 

an increased role in the global fight against terrorism to complement the national security objectives of the United States; 

(2) the United States should lead coordinated international 

efforts to provide increased financial assistance to countries 

with impoverished and disadvantaged populations that are the 

breeding grounds for terrorism; and 

(3) the United States Agency for International Development 

and the Department of Agriculture should substantially increase humanitarian, economic development, and agricultural 

assistance to foster international peace and stability and the 

promotion of human rights. 

SEC. 3210. SENSE OF THE SENATE CONCERNING AGRICULTURAL 

TRADE. 

(a) AGRICULTURE TRADE NEGOTIATING OBJECTIVES.—It is the 

sense of the Senate that the principal negotiating objective of the 

United States with respect to agricultural trade in all multilateral, 

regional, and bilateral negotiations is to obtain competitive opportunities for the export of United States agricultural commodities in 

foreign markets substantially equivalent to the competitive opportunities afforded foreign exports in United States markets and to 

achieve fairer and more open conditions of agricultural trade in 

bulk and value-added commodities by—

(1) reducing or eliminating, by a date certain, tariffs or 

other charges that decrease market opportunities for the export 

of United States agricultural commodities, giving priority to 

United States agricultural commodities that are subject to significantly higher tariffs or subsidy regimes of major producing 

countries; 

(2) immediately eliminating all export subsidies on agricultural commodities worldwide while maintaining bona fide food 

aid and preserving United States agricultural market development and export credit programs that allow the United States 

to compete with other foreign export promotion efforts; 

(3) leveling the playing field for United States agricultural 

producers by disciplining domestic supports such that no other 

country can provide greater support, measured as a percentage 

of total agricultural production value, than the United States 

does while preserving existing green box category to support 

conservation activities, family farms, and rural communities; 

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(4) developing, strengthening, and clarifying rules and effective dispute settlement mechanisms to eliminate practices 

that unfairly decrease United States market access opportunities for United States agricultural commodities or distort agricultural markets to the detriment of the United States, including— (A) unfair or trade-distorting activities of state trading 

enterprises and other administrative mechanisms, with emphasis on—

(i) requiring price transparency in the operation of 

state trading enterprises and such other mechanisms; 

and 

(ii) ending discriminatory pricing practices for agricultural commodities that amount to de facto export 

subsidies so that the enterprises or other mechanisms 

do not (except in cases of bona fide food aid) sell agricultural commodities in foreign markets at prices 

below domestic market prices or prices below the full 

costs of acquiring and delivering agricultural commodities to the foreign markets; 

(B) unjustified trade restrictions or commercial requirements affecting new agricultural technologies, including 

biotechnology; 

(C) unjustified sanitary or phytosanitary restrictions, 

including restrictions that are not based on scientific principles, in contravention of the Agreement on the Application 

of Sanitary and Phytosanitary Measures (as described in 

section 101(d)(3) of the Uruguay Round Agreements Act (19 

U.S.C. 3511(d)(3))); 

(D) other unjustified technical barriers to agricultural 

trade; and

(E) restrictive and nontransparent rules in the administration of tariff rate quotas; 

(5) improving import relief mechanisms to recognize the 

unique characteristics of perishable agricultural commodities; 

(6) taking into account whether a party to negotiations with 

respect to trading in an agricultural commodity has—

(A) failed to adhere to the provisions of an existing bilateral trade agreement with the United States; 

(B) circumvented obligations under a multilateral 

trade agreement to which the United States is a signatory; 

or 

(C) manipulated its currency value to the detriment of 

United States agricultural producers or exporters; and 

(7) otherwise ensuring that countries that accede to the 

World Trade Organization—

(A) have made meaningful market liberalization commitments in agriculture; and 

(B) make progress in fulfilling those commitments over 

time. 

(b) PRIORITY FOR AGRICULTURE TRADE.—It is the sense of the 

Senate that—

(1) reaching a successful agreement on agriculture should 

be the top priority of United States negotiators in World Trade 

Organization talks; and 

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(2) if the primary export competitors of the United States 

fail to reduce their trade distorting domestic supports and 

eliminate export subsidies in accordance with the negotiating 

objectives expressed in this section, the United States should 

take steps to increase the leverage of United States negotiators 

and level the playing field for United States producers, within 

existing World Trade Organization commitments. 

(c) CONSULTATION WITH CONGRESSIONAL COMMITTEES.—It is 

the sense of the Senate that— (1) before the United States Trade Representative negotiates 

a trade agreement that would reduce tariffs on agricultural 

commodities or require a change in United States agricultural 

law, the United States Trade Representative should consult 

with the Committee on Agriculture and the Committee on Ways 

and Means of the House of Representatives and the Committee 

on Agriculture, Nutrition, and Forestry and the Committee on 

Finance of the Senate; 

(2) not less than 48 hours before initialing an agreement relating to agricultural trade negotiated under the auspices of the 

World Trade Organization, the United States Trade Representative should consult closely with the committees referred to in 

paragraph (1) regarding— (A) the details of the agreement; 

(B) the potential impact of the agreement on United 

States agricultural producers; and 

(C) any changes in United States law necessary to implement the agreement; and 

(3) any agreement or other understanding (whether verbal 

or in writing) that relates to agricultural trade that is not disclosed to Congress before legislation implementing a trade 

agreement is introduced in either the Senate or the House of 

Representatives should not be considered to be part of the agreement approved by Congress and should have no force and effect 

under Unites States law or in any dispute settlement body.

TITLE IV—NUTRITION PROGRAMS 

SEC. 4001. SHORT TITLE. 

This title may be cited as the ‘‘Food Stamp Reauthorization Act 

of 2002’’. 

Subtitle A—Food Stamp Program 

SEC. 4101. ENCOURAGEMENT OF PAYMENT OF CHILD SUPPORT. 

(a) EXCLUSION.—Section 5(d)(6) of the Food Stamp Act of 1977 

(7 U.S.C. 2014(d)(6)) is amended by adding at the end the following: ‘‘and child support payments made by a household member 

to or for an individual who is not a member of the household if the 

household member is legally obligated to make the payments,’’. 

(b) SIMPLIFIED PROCEDURE.—Section 5 of the Food Stamp Act 

of 1977 (7 U.S.C. 2014) is amended—

(1) in subsection (e), by striking paragraph (4) and inserting the following: 

‘‘(4) DEDUCTION FOR CHILD SUPPORT PAYMENTS.—

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‘‘(A) IN GENERAL.—In lieu of providing an exclusion for 

legally obligated child support payments made by a household member under subsection (d)(6), a State agency may 

elect to provide a deduction for the amount of the payments. 

‘‘(B) ORDER OF DETERMINING DEDUCTIONS.—A deduction under this paragraph shall be determined before the 

computation of the excess shelter expense deduction under 

paragraph (6).’’; and 

(2) by adding at the end the following: 

‘‘(n) STATE OPTIONS TO SIMPLIFY DETERMINATION OF CHILD

SUPPORT PAYMENTS.—Regardless of whether a State agency elects 

to provide a deduction under subsection (e)(4), the Secretary shall 

establish simplified procedures to allow State agencies, at the option 

of the State agencies, to determine the amount of any legally obligated child support payments made, including procedures to allow 

the State agency to rely on information from the agency responsible 

for implementing the program under part D of title IV of the Social 

Security Act (42 U.S.C. 651 et seq.) concerning payments made in 

prior months in lieu of obtaining current information from the 

households.’’. 

SEC. 4102. SIMPLIFIED DEFINITION OF INCOME. 

Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) 

is amended—

(1) by striking ‘‘and (15)’’ and inserting ‘‘(15)’’; and 

(2) by inserting before the period at the end the following: 

‘‘, (16) at the option of the State agency, any educational loans 

on which payment is deferred, grants, scholarships, fellowships, 

veterans’ educational benefits, and the like (other than loans, 

grants, scholarships, fellowships, veterans’ educational benefits, 

and the like excluded under paragraph (3)), to the extent that 

they are required to be excluded under title XIX of the Social 

Security Act (42 U.S.C. 1396 et seq.), (17) at the option of the 

State agency, any State complementary assistance program payments that are excluded for the purpose of determining eligibility for medical assistance under section 1931 of the Social 

Security Act (42 U.S.C. 1396u–1), and (18) at the option of the 

State agency, any types of income that the State agency does not 

consider when determining eligibility for (A) cash assistance 

under a program funded under part A of title IV of the Social 

Security Act (42 U.S.C. 601 et seq.) or the amount of such assistance, or (B) medical assistance under section 1931 of the Social Security Act (42 U.S.C. 1396u–1), except that this paragraph does not authorize a State agency to exclude wages or 

salaries, benefits under title I, II, IV, X, XIV, or XVI of the Social Security Act (42 U.S.C. 301 et seq.), regular payments from 

a government source (such as unemployment benefits and general assistance), worker’s compensation, child support payments 

made to a household member by an individual who is legally 

obligated to make the payments, or such other types of income 

the consideration of which the Secretary determines by regulation to be essential to equitable determinations of eligibility and 

benefit levels’’. 

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SEC. 4103. STANDARD DEDUCTION. 

Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) 

is amended by striking paragraph (1) and inserting the following: 

‘‘(1) STANDARD DEDUCTION.—

‘‘(A) IN GENERAL.—

‘‘(i) DEDUCTION.—The Secretary shall allow a 

standard deduction for each household in the 48 contiguous States and the District of Columbia, Alaska, 

Hawaii, and the Virgin Islands of the United States in 

an amount that is—

‘‘(I) equal to 8.31 percent of the income standard of eligibility established under subsection 

(c)(1); but 

‘‘(II) not more than 8.31 percent of the income 

standard of eligibility established under subsection 

(c)(1) for a household of 6 members. 

‘‘(ii) MINIMUM AMOUNT.—Notwithstanding clause 

(i), the standard deduction for each household in the 

48 contiguous States and the District of Columbia, 

Alaska, Hawaii, and the Virgin Islands of the United 

States shall be not less than $134, $229, $189, and 

$118, respectively. 

‘‘(B) GUAM.—

‘‘(i) IN GENERAL.—The Secretary shall allow a 

standard deduction for each household in Guam in an 

amount that is—

‘‘(I) equal to 8.31 percent of twice the income 

standard of eligibility established under subsection 

(c)(1) for the 48 contiguous States and the District 

of Columbia; but 

‘‘(II) not more than 8.31 percent of twice the 

income standard of eligibility established under 

subsection (c)(1) for the 48 contiguous States and 

the District of Columbia for a household of 6 members. 

‘‘(ii) MINIMUM AMOUNT.—Notwithstanding clause 

(i), the standard deduction for each household in 

Guam shall be not less than $269.’’. 

SEC. 4104. SIMPLIFIED UTILITY ALLOWANCE. 

Section 5(e)(7)(C)(iii) of the Food Stamp Act of 1977 (7 U.S.C. 

2014(e)(7)(C)(iii)) is amended—

(1) in subclause (I)(bb), by inserting ‘‘(without regard to 

subclause (III))’’ after ‘‘Secretary finds’’; and 

(2) by adding at the end the following: 

‘‘(III) INAPPLICABILITY OF CERTAIN RESTRICTIONS.—Clauses (ii)(II) and (ii)(III) shall not apply 

in the case of a State agency that has made the use 

of a standard utility allowance mandatory under 

subclause (I).’’. 

SEC. 4105. SIMPLIFIED DETERMINATION OF HOUSING COSTS. 

(a) IN GENERAL.—Section 5(e)(7) of the Food Stamp Act of 1977 

(7 U.S.C. 2014(e)(7)) is amended by adding at the end the following: 

‘‘(D) HOMELESS HOUSEHOLDS.—

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‘‘(i) ALTERNATIVE DEDUCTION.—In lieu of the deduction provided under subparagraph (A), a State 

agency may elect to allow a household in which all 

members are homeless individuals, but that is not receiving free shelter throughout the month, to receive a 

deduction of $143 per month. 

‘‘(ii) INELIGIBILITY.—The State agency may make a 

household with extremely low shelter costs ineligible for 

the alternative deduction under clause (i).’’. 

(b) CONFORMING AMENDMENTS.—Section 5 of the Food Stamp 

Act of 1977 (7 U.S.C. 2014) is amended—

(1) in subsection (e)—

(A) by striking paragraph (5); and 

(B) by redesignating paragraphs (6) and (7) as paragraphs (5) and (6), respectively; and 

(2) in subsection (k)(4)(B), by striking ‘‘subsection (e)(7)’’

and inserting ‘‘subsection (e)(6)’’. 

SEC. 4106. SIMPLIFIED DETERMINATION OF DEDUCTIONS. 

Section 5(f)(1) of the Food Stamp Act of 1977 (7 U.S.C. 

2014(f)(1)) is amended by adding at the end the following: 

‘‘(C) SIMPLIFIED DETERMINATION OF DEDUCTIONS.—

‘‘(i) IN GENERAL.—Except as provided in clause (ii), 

for the purposes of subsection (e), a State agency may 

elect to disregard until the next recertification of eligibility under section 11(e)(4) 1 or more types of changes 

in the circumstances of a household that affect the 

amount of deductions the household may claim under 

subsection (e).

‘‘(ii) CHANGES THAT MAY NOT BE DISREGARDED.—

Under clause (i), a State agency may not disregard—

‘‘(I) any reported change of residence; or 

‘‘(II) under standards prescribed by the Secretary, any change in earned income.’’. 

SEC. 4107. SIMPLIFIED DEFINITION OF RESOURCES. 

Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) 

is amended—

(1) in paragraph (1), by striking ‘‘a member who is 60 years 

of age or older’’ and inserting ‘‘an elderly or disabled member’’; 

and 

(2) by adding at the end the following: 

‘‘(6) EXCLUSION OF TYPES OF FINANCIAL RESOURCES NOT

CONSIDERED UNDER CERTAIN OTHER FEDERAL PROGRAMS.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), a 

State agency may, at the option of the State agency, exclude 

from financial resources under this subsection any types of 

financial resources that the State agency does not consider 

when determining eligibility for—

‘‘(i) cash assistance under a program funded under 

part A of title IV of the Social Security Act (42 U.S.C. 

601 et seq.); or ‘‘(ii) medical assistance under section 1931 of the 

Social Security Act (42 U.S.C. 1396u–1). ‘‘(B) LIMITATIONS.—Except to the extent that any of the 

types of resources specified in clauses (i) through (iv) are exVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00182 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
179

cluded under another paragraph of this subsection, subparagraph (A) does not authorize a State agency to exclude— ‘‘(i) cash; 

‘‘(ii) licensed vehicles; 

‘‘(iii) amounts in any account in a financial institution that are readily available to the household; or ‘‘(iv) any other similar type of resource the inclusion in financial resources of which the Secretary determines by regulation to be essential to equitable determinations of eligibility under the food stamp program.’’. 

SEC. 4108. ALTERNATIVE ISSUANCE SYSTEMS IN DISASTERS. 

(a) IN GENERAL.—Section 5(h)(3)(B) of the Food Stamp Act of 

1977 (7 U.S.C. 2014(h)(3)(B)) is amended— (1) in the first sentence, by inserting ‘‘issuance methods 

and’’ after ‘‘shall adjust’’; and 

(2) in the second sentence, by inserting ‘‘, any conditions 

that make reliance on electronic benefit transfer systems described in section 7(i) impracticable,’’ after ‘‘personnel’’. (b) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

SEC. 4109. STATE OPTION TO REDUCE REPORTING REQUIREMENTS. 

Section 6(c)(1) of the Food Stamp Act of 1977 (7 U.S.C. 

2015(c)(1)) is amended— (1) in subparagraph (B), by striking ‘‘on a monthly basis’’; 

and 

(2) by adding at the end the following: ‘‘(D) FREQUENCY OF REPORTING.— ‘‘(i) IN GENERAL.—Except as provided in subparagraphs (A) and (C), a State agency may require households that report on a periodic basis to submit reports— ‘‘(I) not less often than once each 6 months; but 

‘‘(II) not more often than once each month. ‘‘(ii) REPORTING BY HOUSEHOLDS WITH EXCESS IN- COME.—A household required to report less often than 

once each 3 months shall, notwithstanding subparagraph (B), report in a manner prescribed by the Secretary if the income of the household for any month exceeds the income standard of eligibility established 

under section 5(c)(2).’’. 

SEC. 4110. COST NEUTRALITY FOR ELECTRONIC BENEFIT TRANSFER 

SYSTEMS. 

Section 7(i)(2) of the Food Stamp Act of 1977 (7 U.S.C. 

2016(i)(2)) is amended—

(1) by striking subparagraph (A); and 

(2) by redesignating subparagraphs (B) through (I) as subparagraphs (A) through (H), respectively. 

SEC. 4111. REPORT ON ELECTRONIC BENEFIT TRANSFER SYSTEMS. 

(a) DEFINITION OF EBT SYSTEM.—In this section, the term 

‘‘EBT system’’ means an electronic benefit transfer system used in 

issuance of benefits under the food stamp program under the Food 

Stamp Act of 1977 (7 U.S.C. 2011 et seq.). 

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(b) REPORT.—Not later than October 1, 2003, the Secretary of 

Agriculture shall submit to the Committee on Agriculture of the 

House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that—

(1) describes the status of use by each State agency of EBT 

systems; 

(2) specifies the number of vendors that have entered into 

a contract for an EBT system with a State agency; 

(3)(A) specifies the number of State agencies that have entered into an EBT-system contract with multiple EBT-system 

vendors; and 

(B) describes, for each State agency described in subparagraph (A), how responsibilities are divided among the various 

vendors; 

(4) with respect to any State in which an EBT system is not 

operational throughout the State as of October 1, 2002—

(A) provides an explanation of the reasons why an EBT 

system is not operational throughout the State; 

(B) describes how the reasons are being addressed; and 

(C) specifies the expected date of operation of an EBT 

system throughout the State; 

(5) provides a description of—

(A) the issues faced by any State agency that has 

awarded a second EBT-system contract in the 2-year period 

preceding the date of the report; and

(B) the steps that the State agency has taken to address 

those issues; 

(6) provides a description of—

(A) the issues faced by any State agency that will 

award a second EBT-system contract within the 2-year period beginning on the date of the report; and 

(B) strategies that the State agency is considering to 

address those issues; 

(7) describes initiatives being considered or taken by the 

Department of Agriculture, food retailers, EBT-system vendors, 

and client advocates to address any outstanding issues with respect to EBT systems; and 

(8) examines areas of potential advances in electronic benefit delivery in the 5- to 10-year period beginning on the date 

of the report, including—

(A) access to EBT systems at farmers’ markets; 

(B) increased use of transaction data from EBT systems to identify and prosecute fraud; and 

(C) fostering of increased competition among EBT-system vendors to ensure cost containment and optimal service. 

SEC. 4112. ALTERNATIVE PROCEDURES FOR RESIDENTS OF CERTAIN 

GROUP FACILITIES. 

(a) IN GENERAL.—Section 8 of the Food Stamp Act of 1977 (7 

U.S.C. 2017) is amended by adding at the end the following: 

‘‘(f) ALTERNATIVE PROCEDURES FOR RESIDENTS OF CERTAIN

GROUP FACILITIES.—

‘‘(1) IN GENERAL.—

‘‘(A) APPLICABILITY.—

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‘‘(i) IN GENERAL.—Subject to clause (ii), at the option of the State agency, allotments for residents of any 

facility described in subparagraph (B), (C), (D), or (E) 

of section 3(i)(5) (referred to in this subsection as a 

‘covered facility’) may be determined and issued under 

this paragraph in lieu of subsection (a). ‘‘(ii) LIMITATION.—Unless the Secretary authorizes 

implementation of this paragraph in all States under 

paragraph (3), clause (i) shall apply only to residents 

of covered facilities participating in a pilot project 

under paragraph (2). 

‘‘(B) AMOUNT OF ALLOTMENT.—The allotment for each 

eligible resident described in subparagraph (A) shall be calculated in accordance with standardized procedures established by the Secretary that take into account the allotments typically received by residents of covered facilities. ‘‘(C) ISSUANCE OF ALLOTMENT.— ‘‘(i) IN GENERAL.—The State agency shall issue an 

allotment determined under this paragraph to a covered facility as the authorized representative of the 

residents of the covered facility. ‘‘(ii) ADJUSTMENT.—The Secretary shall establish 

procedures to ensure that a covered facility does not receive a greater proportion of a resident’s monthly allotment than the proportion of the month during which 

the resident lived in the covered facility. 

‘‘(D) DEPARTURES OF RESIDENTS OF COVERED FACILI- TIES.— ‘‘(i) NOTIFICATION.—Any covered facility that receives an allotment for a resident under this paragraph 

shall— ‘‘(I) notify the State agency promptly on the departure of the resident; and ‘‘(II) notify the resident, before the departure of 

the resident, that the resident—

‘‘(aa) is eligible for continued benefits 

under the food stamp program; and 

‘‘(bb) should contact the State agency concerning continuation of the benefits. 

‘‘(ii) ISSUANCE TO DEPARTED RESIDENTS.—On receiving a notification under clause (i)(I) concerning the 

departure of a resident, the State agency—

‘‘(I) shall promptly issue the departed resident 

an allotment for the days of the month after the 

departure of the resident (calculated in a manner 

prescribed by the Secretary) unless the departed 

resident reapplies to participate in the food stamp 

program; and 

‘‘(II) may issue an allotment for the month following the month of the departure (but not any 

subsequent month) based on this paragraph unless 

the departed resident reapplies to participate in 

the food stamp program. 

‘‘(iii) STATE OPTION.—The State agency may elect 

not to issue an allotment under clause (ii)(I) if the 

182

State agency lacks sufficient information on the location of the departed resident to provide the allotment. 

‘‘(iv) EFFECT OF REAPPLICATION.—If the departed 

resident reapplies to participate in the food stamp program, the allotment of the departed resident shall be 

determined without regard to this paragraph. 

‘‘(2) PILOT PROJECTS.—

‘‘(A) IN GENERAL.—Before the Secretary authorizes implementation of paragraph (1) in all States, the Secretary 

shall carry out, at the request of 1 or more State agencies 

and in 1 or more areas of the United States, such number 

of pilot projects as the Secretary determines to be sufficient 

to test the feasibility of determining and issuing allotments 

to residents of covered facilities under paragraph (1) in lieu 

of subsection (a). 

‘‘(B) PROJECT PLAN.—To be eligible to participate in a 

pilot project under subparagraph (A), a State agency shall 

submit to the Secretary for approval a project plan that includes—

‘‘(i) a specification of the covered facilities in the 

State that will participate in the pilot project; 

‘‘(ii) a schedule for reports to be submitted to the 

Secretary on the pilot project; 

‘‘(iii) procedures for standardizing allotment 

amounts that takes into account the allotments typically received by residents of covered facilities; and 

‘‘(iv) a commitment to carry out the pilot project in 

compliance with the requirements of this subsection 

other than paragraph (1)(B). 

‘‘(3) AUTHORIZATION OF IMPLEMENTATION IN ALL STATES.—

‘‘(A) IN GENERAL.—The Secretary shall—

‘‘(i) determine whether to authorize implementation 

of paragraph (1) in all States; and 

‘‘(ii) notify the Committee on Agriculture of the 

House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate of the determination. 

‘‘(B) DETERMINATION NOT TO AUTHORIZE IMPLEMENTATION IN ALL STATES.—

‘‘(i) IN GENERAL.—If the Secretary makes a finding 

described in clause (ii), the Secretary—

‘‘(I) shall not authorize implementation of 

paragraph (1) in all States; and 

‘‘(II) shall terminate all pilot projects under 

paragraph (2) within a reasonable period of time 

(as determined by the Secretary). 

‘‘(ii) FINDING.—The finding referred to in clause (i) 

is that—

‘‘(I) an insufficient number of project plans 

that the Secretary determines to be eligible for approval are submitted by State agencies under paragraph (2)(B); or 

‘‘(II)(aa) a sufficient number of pilot projects 

have been carried out under paragraph (2)(A); and 

183

‘‘(bb) authorization of implementation of paragraph (1) in all States is not in the best interest of 

the food stamp program.’’. (b) CONFORMING AMENDMENTS.— (1) Section 3(i) of the Food Stamp Act of 1977 (7 U.S.C. 

2012(i)) is amended— (A) by striking ‘‘(i) ‘Household’ means (1) an’’ and inserting the following: ‘‘(i)(1) ‘Household’ means— ‘‘(A) an’’; 

(B) in the first sentence, by striking ‘‘others, or (2) a 

group’’ and inserting the following: ‘‘others; or ‘‘(B) a group’’; 

(C) in the second sentence, by striking ‘‘Spouses’’ and 

inserting the following: ‘‘(2) Spouses’’; 

(D) in the third sentence, by striking ‘‘Notwithstanding’’ and inserting the following: ‘‘(3) Notwithstanding’’; 

(E) in paragraph (3) (as designated by subparagraph 

(D)), by striking ‘‘the preceding sentences’’ and inserting ‘‘paragraphs (1) and (2)’’;

(F) in the fourth sentence, by striking ‘‘In no event’’ and 

inserting the following: ‘‘(4) In no event’’; 

(G) in the fifth sentence, by striking ‘‘For the purposes 

of this subsection, residents’’ and inserting the following: ‘‘(5) For the purposes of this subsection, the following persons 

shall not be considered to be residents of institutions and shall be 

considered to be individual households: ‘‘(A) Residents’’; and 

(H) in paragraph (5) (as designated by subparagraph 

(G))— (i) by striking ‘‘Act, or are individuals’’ and inserting the following: ‘‘Act. 

‘‘(B) Individuals’’; 

(ii) by striking ‘‘such section, temporary’’ and inserting the following: ‘‘that section. 

‘‘(C) Temporary’’; 

(iii) by striking ‘‘children, residents’’ and inserting 

the following: ‘‘children. 

‘‘(D) Residents’’; 

(iv) by striking ‘‘coupons, and narcotics’’ and inserting the following: ‘‘coupons. 

‘‘(E) Narcotics’’; and 

(v) by striking ‘‘shall not’’ and all that follows and 

inserting a period. 

(2) Section 5(a) of the Food Stamp Act of 1977 (7 U.S.C. 

2014(a)) is amended by striking ‘‘the third sentence of section 

3(i)’’ each place it appears and inserting ‘‘section 3(i)(4)’’. 

(3) Section 8(e)(1) of the Food Stamp Act of 1977 (7 U.S.C. 

2017(e)(1)) is amended by striking ‘‘the last sentence of section 

3(i)’’ and inserting ‘‘section 3(i)(5)’’. 

(4) Section 17(b)(1)(B)(iv)(III)(aa) of the Food Stamp Act of 

1977 (7 U.S.C. 2026(b)(1)(B)(iv)(III)(aa)) is amended by striking 

184

‘‘the last 2 sentences of section 3(i)’’ and inserting ‘‘paragraphs 

(4) and (5) of section 3(i)’’. 

SEC. 4113. REDEMPTION OF BENEFITS THROUGH GROUP LIVING ARRANGEMENTS. 

(a) IN GENERAL.—Section 10 of the Food Stamp Act of 1977 (7 

U.S.C. 2019) is amended by inserting after the first sentence the following: ‘‘Notwithstanding the preceding sentence, a center, organization, institution, shelter, group living arrangement, or establishment 

described in that sentence may be authorized to redeem coupons 

through a financial institution described in that sentence if the center, organization, institution, shelter, group living arrangement, or 

establishment is equipped with 1 or more point-of-sale devices and 

is operating in an area in which an electronic benefit transfer system described in section 7(i) has been implemented.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

takes effect on the date of enactment of this Act. 

SEC. 4114. AVAILABILITY OF FOOD STAMP PROGRAM APPLICATIONS 

ON THE INTERNET. 

(a) IN GENERAL.—Section 11(e)(2)(B)(ii) of the Food Stamp Act 

of 1977 (7 U.S.C. 2020(e)(2)(B)(ii)) is amended—

(1) by inserting ‘‘(I)’’ after ‘‘(ii)’’; 

(2) in subclause (I) (as designated by paragraph (1)), by 

adding ‘‘and’’ at the end; and 

(3) by adding at the end the following: 

‘‘(II) if the State agency maintains a website for the 

State agency, shall make the application available on the 

website in each language in which the State agency makes 

a printed application available;’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect 18 months after the date of enactment of this Act. 

SEC. 4115. TRANSITIONAL FOOD STAMPS FOR FAMILIES MOVING FROM 

WELFARE. 

(a) IN GENERAL.—Section 11 of the Food Stamp Act of 1977 (7 

U.S.C. 2020) is amended by adding at the end the following: 

‘‘(s) TRANSITIONAL BENEFITS OPTION.—

‘‘(1) IN GENERAL.—A State agency may provide transitional 

food stamp benefits to a household that ceases to receive cash 

assistance under a State program funded under part A of title 

IV of the Social Security Act (42 U.S.C. 601 et seq.). 

‘‘(2) TRANSITIONAL BENEFITS PERIOD.—Under paragraph 

(1), a household may receive transitional food stamp benefits for 

a period of not more than 5 months after the date on which 

cash assistance is terminated. 

‘‘(3) AMOUNT OF BENEFITS.—During the transitional benefits period under paragraph (2), a household shall receive an 

amount of food stamp benefits equal to the allotment received 

in the month immediately preceding the date on which cash assistance was terminated, adjusted for the change in household 

income as a result of—

‘‘(A) the termination of cash assistance; and 

‘‘(B) at the option of the State agency, information from 

another program in which the household participates. 

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‘‘(4) DETERMINATION OF FUTURE ELIGIBILITY.—In the final 

month of the transitional benefits period under paragraph (2), 

the State agency may—

‘‘(A) require the household to cooperate in a recertification of eligibility; and 

‘‘(B) initiate a new certification period for the household without regard to whether the preceding certification 

period has expired. 

‘‘(5) LIMITATION.—A household shall not be eligible for 

transitional benefits under this subsection if the household—

‘‘(A) loses eligibility under section 6; 

‘‘(B) is sanctioned for a failure to perform an action required by Federal, State, or local law relating to a cash assistance program described in paragraph (1); or 

‘‘(C) is a member of any other category of households 

designated by the State agency as ineligible for transitional 

benefits. 

‘‘(6) APPLICATIONS FOR RECERTIFICATION.—

‘‘(A) IN GENERAL.—A household receiving transitional 

benefits under this subsection may apply for recertification 

at any time during the transitional benefits period under 

paragraph (2). 

‘‘(B) DETERMINATION OF ALLOTMENT.—If a household 

applies for recertification under subparagraph (A), the allotment of the household for all subsequent months shall be 

determined without regard to this subsection.’’. 

(b) CONFORMING AMENDMENTS.—

(1) Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 

2012(c)) is amended by adding at the end the following: ‘‘The 

limits specified in this subsection may be extended until the end 

of any transitional benefit period established under section 

11(s).’’. 

(2) Section 6(c) of the Food Stamp Act of 1977 (7 U.S.C. 

2015(c)) is amended by striking ‘‘No household’’ and inserting 

‘‘Except in a case in which a household is receiving transitional 

benefits during the transitional benefits period under section 

11(s), no household’’. 

SEC. 4116. GRANTS FOR SIMPLE APPLICATION AND ELIGIBILITY DETERMINATION SYSTEMS AND IMPROVED ACCESS TO BENEFITS. 

(a) IN GENERAL.—Section 11 of the Food Stamp Act of 1977 (7 

U.S.C. 2020) (as amended by section 4115(a)) is amended by adding 

at the end the following: 

‘‘(t) GRANTS FOR SIMPLE APPLICATION AND ELIGIBILITY DETERMINATION SYSTEMS AND IMPROVED ACCESS TO BENEFITS.—

‘‘(1) IN GENERAL.—For each of fiscal years 2003 through 

2007, the Secretary shall use not more than $5,000,000 of funds 

made available under section 18(a)(1) to make grants to pay 

100 percent of the costs of eligible entities approved by the Secretary to carry out projects to develop and implement—

‘‘(A) simple food stamp application and eligibility determination systems; or 

‘‘(B) measures to improve access to food stamp benefits 

by eligible households. 

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‘‘(2) TYPES OF PROJECTS.—A project under paragraph (1) 

may consist of—

‘‘(A) coordinating application and eligibility determination processes, including verification practices, under the 

food stamp program and other Federal, State, and local assistance programs; 

‘‘(B) establishing methods for applying for benefits and 

determining eligibility that—

‘‘(i) more extensively use—

‘‘(I) communications by telephone; and 

‘‘(II) electronic alternatives such as the Internet; or 

‘‘(ii) otherwise improve the administrative infrastructure used in processing applications and determining eligibility; 

‘‘(C) developing procedures, training materials, and 

other resources aimed at reducing barriers to participation 

and reaching eligible households; 

‘‘(D) improving methods for informing and enrolling eligible households; or 

‘‘(E) carrying out such other activities as the Secretary 

determines to be appropriate.

‘‘(3) LIMITATION.—A grant under this subsection shall not 

be made for the ongoing cost of carrying out any project. 

‘‘(4) ELIGIBLE ENTITIES.—To be eligible to receive a grant 

under this subsection, an entity shall be—

‘‘(A) a State agency administering the food stamp program; 

‘‘(B) a State or local government; 

‘‘(C) an agency providing health or welfare services; 

‘‘(D) a public health or educational entity; or 

‘‘(E) a private nonprofit entity such as a communitybased organization, food bank, or other emergency feeding 

organization. 

‘‘(5) SELECTION OF ELIGIBLE ENTITIES.—The Secretary—

‘‘(A) shall develop criteria for the selection of eligible 

entities to receive grants under this subsection; and 

‘‘(B) may give preference to any eligible entity that consists of a partnership between a governmental entity and a 

nongovernmental entity.’’. 

(b) CONFORMING AMENDMENTS.—Section 17 of the Food Stamp 

Act of 1977 (7 U.S.C. 2026) is amended—

(1) by striking subsection (i); and 

(2) by redesignating subsections (j) and (k) as subsections 

(i) and (j), respectively. 

SEC. 4117. DELIVERY TO RETAILERS OF NOTICES OF ADVERSE ACTION. 

(a) IN GENERAL.—Section 14(a) of the Food Stamp Act of 1977 

(7 U.S.C. 2023(a)) is amended by striking paragraph (2) and inserting the following: 

‘‘(2) DELIVERY OF NOTICES.—A notice under paragraph (1) 

shall be delivered by any form of delivery that the Secretary determines will provide evidence of the delivery.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

takes effect on the date of enactment of this Act.

187

SEC. 4118. REFORM OF QUALITY CONTROL SYSTEM. 

(a) IN GENERAL.—Section 16(c) of the Food Stamp Act of 1977 

(7 U.S.C. 2025(c)) is amended—

(1) by striking ‘‘(c)(1) The program’’ and all that follows 

through the end of paragraph (1) and inserting the following: 

‘‘(c) QUALITY CONTROL SYSTEM.—

‘‘(1) IN GENERAL.—

‘‘(A) SYSTEM.—In carrying out the food stamp program, 

the Secretary shall carry out a system that enhances payment accuracy and improves administration by establishing fiscal incentives that require State agencies with 

high payment error rates to share in the cost of payment 

error. ‘‘(B) ADJUSTMENT OF FEDERAL SHARE OF ADMINISTRATIVE COSTS FOR FISCAL YEARS BEFORE FISCAL YEAR 2003.—

‘‘(i) IN GENERAL.—Subject to clause (ii), with respect to any fiscal year before fiscal year 2003, the Secretary shall adjust a State agency’s federally funded 

share of administrative costs under subsection (a), 

other than the costs already shared in excess of 50 percent under the proviso in the first sentence of subsection (a) or under subsection (g), by increasing that 

share of all such administrative costs by 1 percentage 

point to a maximum of 60 percent of all such administrative costs for each full 1⁄10 of a percentage point by 

which the payment error rate is less than 6 percent. 

‘‘(ii) LIMITATION.—Only States with a rate of invalid decisions in denying eligibility that is less than 

a nationwide percentage that the Secretary determines 

to be reasonable shall be entitled to the adjustment 

under clause (i). 

‘‘(C) ESTABLISHMENT OF LIABILITY AMOUNT FOR FISCAL

YEAR 2003 AND THEREAFTER.—With respect to fiscal year 

2004 and any fiscal year thereafter for which the Secretary 

determines that, for the second or subsequent consecutive 

fiscal year, a 95 percent statistical probability exists that 

the payment error rate of a State agency exceeds 105 percent of the national performance measure for payment error 

rates announced under paragraph (6), the Secretary shall 

establish an amount for which the State agency may be liable (referred to in this paragraph as the ‘liability amount’) 

that is equal to the product obtained by multiplying—

‘‘(i) the value of all allotments issued by the State 

agency in the fiscal year; 

‘‘(ii) the difference between—

‘‘(I) the payment error rate of the State agency; 

and 

‘‘(II) 6 percent; and 

‘‘(iii) 10 percent. 

‘‘(D) AUTHORITY OF SECRETARY WITH RESPECT TO LIABILITY AMOUNT.—With respect to the liability amount established for a State agency under subparagraph (C) for 

any fiscal year, the Secretary shall—

‘‘(i)(I) waive the responsibility of the State agency 

to pay all or any portion of the liability amount estabVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00191 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
188

lished for the fiscal year (referred to in this paragraph 

as the ‘waiver amount’); ‘‘(II) require that a portion, not to exceed 50 percent, of the liability amount established for the fiscal 

year be used by the State agency for new investment, 

approved by the Secretary, to improve administration 

by the State agency of the food stamp program (referred to in this paragraph as the ‘new investment 

amount’), which new investment amount shall not be 

matched by Federal funds; ‘‘(III) designate a portion, not to exceed 50 percent, 

of the amount established for the fiscal year for payment to the Secretary in accordance with subparagraph 

(E) (referred to in this paragraph as the ‘at-risk 

amount’); or ‘‘(IV) take any combination of the actions described 

in subclauses (I) through (III); or ‘‘(ii) make the determinations described in clause 

(i) and enter into a settlement with the State agency, 

only with respect to any waiver amount or new investment amount, before the end of the fiscal year in which 

the liability amount is determined under subparagraph 

(C). 

‘‘(E) PAYMENT OF AT-RISK AMOUNT FOR CERTAIN

STATES.—

‘‘(i) IN GENERAL.—A State agency shall pay to the 

Secretary the at-risk amount designated under subparagraph (D)(i)(III) for any fiscal year in accordance 

with clause (ii), if, with respect to the immediately following fiscal year, a liability amount has been established for the State agency under subparagraph (C). ‘‘(ii) METHOD OF PAYMENT OF AT-RISK AMOUNT.—

‘‘(I) REMISSION TO THE SECRETARY.—In the 

case of a State agency required to pay an at-risk 

amount under clause (i), as soon as practicable 

after completion of all administrative and judicial 

reviews with respect to that requirement to pay, the 

chief executive officer of the State shall remit to the 

Secretary the at-risk amount required to be paid. 

‘‘(II) ALTERNATIVE METHOD OF COLLECTION.—

‘‘(aa) IN GENERAL.—If the chief executive 

officer of the State fails to make the payment 

under subclause (I) within a reasonable period 

of time determined by the Secretary, the Secretary may reduce any amount due to the 

State agency under any other provision of this 

section by the amount required to be paid 

under clause (i). 

‘‘(bb) ACCRUAL OF INTEREST.—During any 

period of time determined by the Secretary 

under item (aa), interest on the payment under 

subclause (I) shall not accrue under section 

13(a)(2). ‘‘(F) USE OF PORTION OF LIABILITY AMOUNT FOR NEW

INVESTMENT.—

189

‘‘(i) REDUCTION OF OTHER AMOUNTS DUE TO STATE

AGENCY.—In the case of a State agency that fails to 

comply with a requirement for new investment under 

subparagraph (D)(i)(II) or clause (iii)(I), the Secretary 

may reduce any amount due to the State agency under 

any other provision of this section by the portion of the 

liability amount that has not been used in accordance 

with that requirement. ‘‘(ii) EFFECT OF STATE AGENCY’S WHOLLY PRE- VAILING ON APPEAL.—If a State agency begins required 

new investment under subparagraph (D)(i)(II), the 

State agency appeals the liability amount of the State 

agency, and the determination by the Secretary of the 

liability amount is reduced to $0 on administrative or 

judicial review, the Secretary shall pay to the State 

agency an amount equal to 50 percent of the new investment amount that was included in the liability 

amount subject to the appeal. ‘‘(iii) EFFECT OF SECRETARY’S WHOLLY PREVAILING

ON APPEAL.—If a State agency does not begin required 

new investment under subparagraph (D)(i)(II), the 

State agency appeals the liability amount of the State 

agency, and the determination by the Secretary of the 

liability amount is wholly upheld on administrative or 

judicial review, the Secretary shall— ‘‘(I) require all or any portion of the new investment amount to be used by the State agency for 

new investment, approved by the Secretary, to improve administration by the State agency of the 

food stamp program, which amount shall not be 

matched by Federal funds; and ‘‘(II) require payment of any remaining portion 

of the new investment amount in accordance with 

subparagraph (E)(ii). 

‘‘(iv) EFFECT OF NEITHER PARTY’S WHOLLY PRE- VAILING ON APPEAL.—The Secretary shall promulgate 

regulations regarding obligations of the Secretary and 

the State agency in a case in which the State agency 

appeals the liability amount of the State agency and 

neither the Secretary nor the State agency wholly prevails. 

‘‘(G) CORRECTIVE ACTION PLANS.—The Secretary shall 

foster management improvements by the States by requiring State agencies, other than State agencies with payment 

error rates of less than 6 percent, to develop and implement 

corrective action plans to reduce payment errors.’’; 

(2) in paragraph (4), by striking ‘‘(4)’’ and all that follows 

through the end of the first sentence and inserting the following: ‘‘(4) REPORTING REQUIREMENTS.—The Secretary may require a State agency to report any factors that the Secretary 

considers necessary to determine a State agency’s payment error 

rate, liability amount or new investment amount under paragraph (1), or performance under the performance measures 

under subsection (d).’’; 

190

(3) in paragraph (5)— (A) by striking ‘‘(5)’’ and all that follows through the 

end of the second sentence and inserting the following: 

‘‘(5) PROCEDURES.—To facilitate the implementation of this 

subsection, each State agency shall expeditiously submit to the 

Secretary data concerning the operations of the State agency in 

each fiscal year sufficient for the Secretary to establish the State 

agency’s payment error rate, liability amount or new investment 

amount under paragraph (1), or performance under the performance measures under subsection (d).’’; and 

(B) in the last sentence, by striking ‘‘paragraph (1)(C)’’ and inserting ‘‘paragraph (1)’’; 

(4) in paragraph (6)— (A) by striking ‘‘(6) At’’ and inserting the following: ‘‘(6) NATIONAL PERFORMANCE MEASURE FOR PAYMENT

ERROR RATES.— ‘‘(A) ANNOUNCEMENT.—At’’; 

(B) in subparagraph (A) (as designated by subparagraph (A)), by striking ‘‘and incentive payments or claims 

pursuant to paragraphs (1)(A) and (1)(C)’’; 

(C) in the first and third sentences, by striking ‘‘paragraph (5)’’ each place it appears and inserting ‘‘paragraph 

(8)’’; 

(D) by striking ‘‘Where a State’’ and inserting the following: ‘‘(B) USE OF ALTERNATIVE MEASURE OF STATE ERROR.— Where a State’’; 

(E) by striking ‘‘The announced’’ and inserting the following: ‘‘(C) USE OF NATIONAL PERFORMANCE MEASURE.—The 

announced’’; 

(F) in subparagraph (C) (as designated by subparagraph (E)), by striking ‘‘the State share of the cost of payment error under paragraph (1)(C)’’ and inserting ‘‘the liability amount of a State under paragraph (1)(C)’’; and 

(G) by adding at the end the following: 

‘‘(D) NO ADMINISTRATIVE OR JUDICIAL REVIEW.—The 

national performance measure announced under this paragraph shall not be subject to administrative or judicial review.’’; 

(5) in paragraph (7)— (A) by striking ‘‘(7) If the Secretary asserts a financial 

claim against’’ and inserting the following: ‘‘(7) ADMINISTRATIVE AND JUDICIAL REVIEW.—

‘‘(A) IN GENERAL.—Except as provided in subparagraphs (B) and (C), if the Secretary asserts a financial 

claim against or establishes a liability amount with respect 

to’’; 

(B) in subparagraph (A) (as designated by subparagraph (A)), by striking ‘‘paragraph (1)(C)’’ and inserting ‘‘paragraph (1)’’; and 

(C) by adding at the end the following: 

‘‘(B) DETERMINATION OF PAYMENT ERROR RATE.—With 

respect to any fiscal year, a determination of the payment 

error rate of a State agency or a determination whether the 

191

payment error rate exceeds 105 percent of the national performance measure for payment error rates shall be subject 

to administrative or judicial review only if the Secretary establishes a liability amount with respect to the fiscal year 

under paragraph (1)(C). 

‘‘(C) AUTHORITY OF SECRETARY WITH RESPECT TO LIABILITY AMOUNT.—An action by the Secretary under subparagraph (D) or (F)(iii) of paragraph (1) shall not be subject to administrative or judicial review.’’; and 

(6) in paragraph (8)—

(A) in subparagraph (A), by striking ‘‘paragraph (1)(C)’’

and inserting ‘‘paragraph (1)’’; 

(B) in subparagraph (C)—

(i) in clause (i), by striking ‘‘payment claimed 

against State agencies; and’’ and inserting ‘‘payment 

claimed against State agencies or liability amount established with respect to State agencies;’’; 

(ii) in clause (ii), by striking ‘‘claims.’’ and inserting ‘‘claims or liability amounts; and’’; and 

(iii) by adding at the end the following: 

‘‘(iii) provide a copy of the document providing notification under clause (ii) to the chief executive officer 

and the legislature of the State.’’; and 

(C) in subparagraphs (D) and (H), by inserting ‘‘or liability amount’’ after ‘‘claim’’ each place it appears. 

(b) AUTHORITY TO SETTLE CLAIMS CONCERNING AT-RISK

AMOUNTS.—Section 13(a) of the Food Stamp Act of 1977 (7 U.S.C. 

2022(a)) is amended—

(1) by striking ‘‘(a)(1) The’’ and inserting the following: 

‘‘(a) GENERAL AUTHORITY OF THE SECRETARY.—

‘‘(1) DETERMINATION OF CLAIMS.—Except in the case of an 

at-risk amount required under section 16(c)(1)(D)(i)(III), the’’; 

(2) by striking the fourth sentence; 

(3) by striking ‘‘To the extent’’ and inserting the following: 

‘‘(2) CLAIMS ESTABLISHED UNDER QUALITY CONTROL SYSTEM.—To the extent’’; 

(4) in paragraph (2) (as designated by paragraph (3)), by 

striking ‘‘section 16(c)(1)(C)’’ and inserting ‘‘section 16(c)(1)’’; 

(5) by striking ‘‘Any interest’’ and inserting the following: 

‘‘(3) COMPUTATION OF INTEREST.—Any interest’’; and 

(6) by striking ‘‘(2) Each adult’’ and inserting the following: 

‘‘(4) JOINT AND SEVERAL LIABILITY OF HOUSEHOLD MEMBERS.—Each adult’’. 

(c) CREDITING OF PAYMENTS TO FOOD STAMP APPROPRIATIONS

ACCOUNT.—Section 18(e) of the Food Stamp Act of 1977 (7 U.S.C. 

2027(e)) is amended in the first sentence—

(1) by striking ‘‘11(g) and (h), and’’ and inserting ‘‘subsections (g) and (h) of section 11,’’; and 

(2) by inserting ‘‘and section 16(c)(1),’’ after ‘‘section 13,’’. 

(d) CONFORMING AMENDMENTS.—Section 22(h) of the Food 

Stamp Act of 1977 (7 U.S.C. 2031(h)) is amended—

(1) in the second sentence, by striking ‘‘section 16(c)(1)(C)’’

and inserting ‘‘section 16(c)(1)’’; and 

(2) by striking the third sentence. 

192

(e) APPLICABILITY.—The amendments made by this section shall 

not apply with respect to any sanction, appeal, new investment 

agreement, or other action by the Secretary of Agriculture or a State 

agency that is based on a payment error rate calculated for any fiscal year before fiscal year 2003. 

SEC. 4119. IMPROVEMENT OF CALCULATION OF STATE PERFORMANCE 

MEASURES. 

(a) IN GENERAL.—Section 16(c)(8) of the Food Stamp Act of 

1977 (7 U.S.C. 2025(c)(8)) is amended—

(1) in subparagraph (B), by striking ‘‘180 days after the end 

of the fiscal year’’ and inserting ‘‘the first May 31 after the end 

of the fiscal year referred to in subparagraph (A)’’; and 

(2) in subparagraph (C), by striking ‘‘30 days thereafter’’

and inserting ‘‘the first June 30 after the end of the fiscal year 

referred to in subparagraph (A)’’.

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

SEC. 4120. BONUSES FOR STATES THAT DEMONSTRATE HIGH OR MOST 

IMPROVED PERFORMANCE. 

(a) IN GENERAL.—Section 16 of the Food Stamp Act of 1977 (7 

U.S.C. 2025) is amended by striking subsection (d) and inserting 

the following: 

‘‘(d) BONUSES FOR STATES THAT DEMONSTRATE HIGH OR MOST

IMPROVED PERFORMANCE.—

‘‘(1) FISCAL YEARS 2003 AND 2004.—

‘‘(A) GUIDANCE.—With respect to fiscal years 2003 and 

2004, the Secretary shall establish, in guidance issued to 

State agencies not later than October 1, 2002—

‘‘(i) performance criteria relating to—

‘‘(I) actions taken to correct errors, reduce rates 

of error, and improve eligibility determinations; 

and 

‘‘(II) other indicators of effective administration determined by the Secretary; and 

‘‘(ii) standards for high and most improved performance to be used in awarding performance bonus 

payments under subparagraph (B)(ii). 

‘‘(B) PERFORMANCE BONUS PAYMENTS.—With respect to 

each of fiscal years 2003 and 2004, the Secretary shall—

‘‘(i) measure the performance of each State agency 

with respect to the criteria established under subparagraph (A)(i); and 

‘‘(ii) subject to paragraph (3), award performance 

bonus payments in the following fiscal year, in a total 

amount of $48,000,000 for each fiscal year, to State 

agencies that meet standards for high or most improved performance established by the Secretary under 

subparagraph (A)(ii). 

‘‘(2) FISCAL YEARS 2005 AND THEREAFTER.—

‘‘(A) REGULATIONS.—With respect to fiscal year 2005 

and each fiscal year thereafter, the Secretary shall—

‘‘(i) establish, by regulation, performance criteria 

relating to—

193

‘‘(I) actions taken to correct errors, reduce rates 

of error, and improve eligibility determinations; 

and 

‘‘(II) other indicators of effective administration determined by the Secretary; 

‘‘(ii) establish, by regulation, standards for high 

and most improved performance to be used in awarding performance bonus payments under subparagraph 

(B)(ii); and 

‘‘(iii) before issuing proposed regulations to carry 

out clauses (i) and (ii), solicit ideas for performance 

criteria and standards for high and most improved 

performance from State agencies and organizations 

that represent State interests. 

‘‘(B) PERFORMANCE BONUS PAYMENTS.—With respect to 

fiscal year 2005 and each fiscal year thereafter, the Secretary shall—

‘‘(i) measure the performance of each State agency 

with respect to the criteria established under subparagraph (A)(i); and 

‘‘(ii) subject to paragraph (3), award performance 

bonus payments in the following fiscal year, in a total 

amount of $48,000,000 for each fiscal year, to State 

agencies that meet standards for high or most improved performance established by the Secretary under 

subparagraph (A)(ii). 

‘‘(3) PROHIBITION ON RECEIPT OF PERFORMANCE BONUS PAYMENTS.—A State agency shall not be eligible for a performance 

bonus payment with respect to any fiscal year for which the 

State agency has a liability amount established under subsection (c)(1)(C). 

‘‘(4) PAYMENTS NOT SUBJECT TO JUDICIAL REVIEW.—A determination by the Secretary whether, and in what amount, to 

award a performance bonus payment under this subsection 

shall not be subject to administrative or judicial review.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

takes effect on the date of enactment of this Act. 

SEC. 4121. EMPLOYMENT AND TRAINING PROGRAM. 

(a) LEVELS OF FUNDING.—Section 16(h)(1) of the Food Stamp 

Act of 1977 (7 U.S.C. 2025(h)(1)) is amended—

(1) in subparagraph (A), by striking clause (vii) and inserting the following: 

‘‘(vii) for each of fiscal years 2002 through 2007, 

$90,000,000.’’; 

(2) by striking subparagraph (B) and inserting the following: 

‘‘(B) ALLOCATION.—Funds made available under subparagraph (A) shall be made available to and reallocated 

among State agencies under a reasonable formula that—

‘‘(i) is determined and adjusted by the Secretary; 

and 

‘‘(ii) takes into account the number of individuals 

who are not exempt from the work requirement under 

section 6(o).’’; and 

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(3) by striking subparagraphs (E) through (G) and inserting the following: ‘‘(E) ADDITIONAL ALLOCATIONS FOR STATES THAT EN- SURE AVAILABILITY OF WORK OPPORTUNITIES.— ‘‘(i) IN GENERAL.—In addition to the allocations 

under subparagraph (A), from funds made available 

under section 18(a)(1), the Secretary shall allocate not 

more than $20,000,000 for each of fiscal years 2002 

through 2007 to reimburse a State agency that is eligible under clause (ii) for the costs incurred in serving 

food stamp recipients who— ‘‘(I) are not eligible for an exception under section 6(o)(3); and ‘‘(II) are placed in and comply with a program 

described in subparagraph (B) or (C) of section 

6(o)(2). 

‘‘(ii) ELIGIBILITY.—To be eligible for an additional 

allocation under clause (i), a State agency shall make 

and comply with a commitment to offer a position in 

a program described in subparagraph (B) or (C) of section 6(o)(2) to each applicant or recipient who—

‘‘(I) is in the last month of the 3-month period 

described in section 6(o)(2); 

‘‘(II) is not eligible for an exception under section 6(o)(3); 

‘‘(III) is not eligible for a waiver under section 

6(o)(4); and 

‘‘(IV) is not exempt under section 6(o)(6).’’. 

(b) CARRYOVER FUNDS.—Notwithstanding any other provision 

of law, funds provided under section 16(h)(1)(A) of the Food Stamp 

Act of 1977 (7 U.S.C. 2025(h)(1)(A)) for any fiscal year before fiscal 

year 2002 shall be rescinded on the date of enactment of this Act, 

unless obligated by a State agency before that date. 

(c) PARTICIPANT EXPENSES.—Section 6(d)(4)(I)(i)(I) of the Food 

Stamp Act of 1977 (7 U.S.C. 2015(d)(4)(I)(i)(I)) is amended by striking ‘‘, except that the State agency may limit such reimbursement to each participant to $25 per month’’. (d) FEDERAL REIMBURSEMENT.—Section 16(h)(3) of the Food 

Stamp Act of 1977 (7 U.S.C. 2025(h)(3)) is amended by striking 

‘‘such total amount shall not exceed an amount representing $25 per 

participant per month for costs of transportation and other actual 

costs (other than dependent care costs) and’’ and inserting ‘‘the 

amount of the reimbursement for dependent care expenses shall not 

exceed’’. (e) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

SEC. 4122. REAUTHORIZATION OF FOOD STAMP PROGRAM AND FOOD 

DISTRIBUTION PROGRAM ON INDIAN RESERVATIONS. 

(a) REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS.—

Section 16(k)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(3)) 

is amended—

(1) in the first sentence of subparagraph (A), by striking 

‘‘2002’’ and inserting ‘‘2007’’; and 

(2) in subparagraph (B)(ii), by striking ‘‘2002’’ and inserting ‘‘2007’’. 

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(b) CASH PAYMENT PILOT PROJECTS.—Section 17(b)(1)(B)(vi) of 

the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(vi)) is amended 

by striking ‘‘2002’’ and inserting ‘‘2007’’. 

(c) AUTHORIZATION OF APPROPRIATIONS.—Section 18(a)(1) of the 

Food Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended in the 

first sentence by striking ‘‘1996 through 2002’’ and inserting ‘‘2003 

through 2007’’. 

SEC. 4123. EXPANDED GRANT AUTHORITY. 

(a) IN GENERAL.—Section 17(a)(1) of the Food Stamp Act of 

1977 (7 U.S.C. 2026(a)(1)) is amended—

(1) by striking ‘‘, by way of making contracts with or grants 

to public or private organizations or agencies,’’ and inserting 

‘‘enter into contracts with or make grants to public or private 

organizations or agencies under this section to’’; and 

(2) by adding at the end the following: ‘‘The waiver authority of the Secretary under subsection (b) shall extend to all contracts and grants under this section.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

SEC. 4124. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND 

AMERICAN SAMOA. 

(a) CONSOLIDATED FUNDING.—Section 19 of the Food Stamp 

Act of 1977 (7 U.S.C. 2028) is amended—

(1) by striking the section heading and ‘‘(a)(1)(A) From’’

and all that follows through ‘‘(2) The’’ and inserting the following: 

‘‘SEC. 19. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND 

AMERICAN SAMOA. 

‘‘(a) PAYMENTS TO GOVERNMENTAL ENTITIES.—

‘‘(1) DEFINITION OF GOVERNMENTAL ENTITY.—In this subsection, the term ‘governmental entity’ means—

‘‘(A) the Commonwealth of Puerto Rico; and 

‘‘(B) American Samoa. 

‘‘(2) BLOCK GRANTS.—

‘‘(A) AMOUNT OF BLOCK GRANTS.—From the sums appropriated under this Act, the Secretary shall, subject to 

this section, pay to governmental entities to pay the expenditures for nutrition assistance programs for needy persons 

as described in subparagraphs (B) and (C)—

‘‘(i) for fiscal year 2003, $1,401,000,000; and 

‘‘(ii) for each of fiscal years 2004 through 2007, the 

amount specified in clause (i), as adjusted by the percentage by which the thrifty food plan has been adjusted under section 3(o)(4) between June 30, 2002, and 

June 30 of the immediately preceding fiscal year. 

‘‘(B) PAYMENTS TO COMMONWEALTH OF PUERTO RICO.—

‘‘(i) IN GENERAL.—For fiscal year 2003 and each 

fiscal year thereafter, the Secretary shall use 99.6 percent of the funds made available under subparagraph 

(A) for payment to the Commonwealth of Puerto Rico 

to pay—

‘‘(I) 100 percent of the expenditures by the 

Commonwealth for the fiscal year for the provision 

of nutrition assistance included in the plan of the 

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Commonwealth approved under subsection (b); 

and ‘‘(II) 50 percent of the related administrative 

expenses. 

‘‘(ii) EXCEPTION FOR EXPENDITURES FOR CERTAIN

SYSTEMS.—Notwithstanding clause (i), the Commonwealth of Puerto Rico may spend in fiscal year 2002 or 

2003 not more than $6,000,000 of the amount required 

to be paid to the Commonwealth for fiscal year 2002 

under this paragraph (as in effect on the day before the 

date of enactment of this clause) to pay 100 percent of 

the costs of—‘‘(I) upgrading and modernizing the electronic 

data processing system used to carry out nutrition 

assistance programs for needy persons; ‘‘(II) implementing systems to simplify the determination of eligibility to receive the nutrition assistance; and ‘‘(III) operating systems to deliver the nutrition 

assistance through electronic benefit transfers. ‘‘(C) PAYMENTS TO AMERICAN SAMOA.—For fiscal year 

2003 and each fiscal year thereafter, the Secretary shall use 

0.4 percent of the funds made available under subparagraph (A) for payment to American Samoa to pay 100 percent of the expenditures by American Samoa for a nutrition 

assistance program extended under section 601(c) of Public 

Law 96–597 (48 U.S.C. 1469d(c)). ‘‘(D) CARRYOVER OF FUNDS.—For fiscal year 2002 and 

each fiscal year thereafter, not more than 2 percent of the 

funds made available under this paragraph for the fiscal 

year to each governmental entity may be carried over to the 

following fiscal year. 

‘‘(3) TIME AND MANNER OF PAYMENTS TO COMMONWEALTH

OF PUERTO RICO.—The’’; 

(2) in subsection (b), by striking ‘‘subsection (a)(1)(A)’’ each 

place it appears and inserting ‘‘subsection (a)(2)(B)’’; and 

(3) in subsection (c), by striking ‘‘subsection (a)(1)(A)’’ each 

place it appears and inserting ‘‘subsection (a)(2)(A)’’. (b) CONFORMING AMENDMENT.—Section 24 of the Food Stamp 

Act of 1977 (7 U.S.C. 2033) is repealed. 

(c) APPLICABILITY.—

(1) IN GENERAL.—Except as provided in paragraph (2), the 

amendments made by this section apply beginning on October 

1, 2002. 

(2) EXCEPTIONS.—Subparagraphs (B)(ii) and (D) of section 

19(a)(2) of the Food Stamp Act of 1977 (as amended by subsection (a)(1)) apply beginning on the date of enactment of this 

Act. 

(d) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

SEC. 4125. ASSISTANCE FOR COMMUNITY FOOD PROJECTS. 

(a) IN GENERAL.—Section 25 of the Food Stamp Act of 1977 (7 

U.S.C. 2034) is amended—

(1) in subsection (a)—

(A) by striking ‘‘(1)’’ and inserting ‘‘(1)(A)’’; 

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(B) by redesignating paragraphs (2) and (3) as subparagraphs (B) and (C), respectively, of paragraph (1); 

(C) in paragraph (1)(C) (as redesignated by subparagraph (B)), by striking the period at the end and inserting 

‘‘; or’’; and 

(D) by adding at the end the following: ‘‘(2) meet specific State, local, or neighborhood food and agricultural needs, including needs for— ‘‘(A) infrastructure improvement and development; 

‘‘(B) planning for long-term solutions; or 

‘‘(C) the creation of innovative marketing activities that 

mutually benefit agricultural producers and low-income 

consumers.’’; 

(2) in subsection (b)(2)(B)— (A) by striking ‘‘$2,500,000’’ and inserting ‘‘$5,000,000’’; and 

(B) by striking ‘‘2002’’ and inserting ‘‘2007’’; 

(3) in subsection (d), by striking paragraph (4) and inserting the following: ‘‘(4) encourage long-term planning activities, and multisystem, interagency approaches with multistakeholder collaborations, that build the long-term capacity of communities to address the food and agricultural problems of the communities, 

such as food policy councils and food planning associations.’’; 

and 

(4) by striking subsection (h) and inserting the following: ‘‘(h) INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMU- NITY PROBLEMS.— ‘‘(1) IN GENERAL.—The Secretary shall offer to enter into a 

contract with, or make a grant to, 1 nongovernmental organization that meets the requirements of paragraph (2) to coordinate 

with Federal agencies, States, political subdivisions, and nongovernmental organizations (collectively referred to in this subsection as ‘targeted entities’) to gather information, and recommend to the targeted entities, innovative programs for addressing common community problems, including—

‘‘(A) loss of farms and ranches; 

‘‘(B) rural poverty; 

‘‘(C) welfare dependency; 

‘‘(D) hunger; 

‘‘(E) the need for job training; and 

‘‘(F) the need for self-sufficiency by individuals and 

communities. 

‘‘(2) NONGOVERNMENTAL ORGANIZATION.—The nongovernmental organization referred to in paragraph (1) shall—

‘‘(A) be selected by the Secretary on a competitive basis; 

‘‘(B) be experienced in working with other targeted entities and in organizing workshops that demonstrate programs to other targeted entities; ‘‘(C) be experienced in identifying programs that effectively address community problems described in paragraph 

(1) that can be implemented by other targeted entities; ‘‘(D) be experienced in, and capable of, receiving information from and communicating with other targeted entities throughout the United States; 

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‘‘(E) be experienced in operating a national information 

clearinghouse that addresses 1 or more of the community 

problems described in paragraph (1); and 

‘‘(F) as a condition of entering into the contract or receiving the grant referred to in paragraph (1), agree—

‘‘(i) to contribute in-kind resources toward implementation of the contract or grant;

‘‘(ii) to provide to other targeted entities information and guidance on the innovative programs referred 

to in paragraph (1); and 

‘‘(iii) to operate a national information clearinghouse on innovative means for addressing community 

problems described in paragraph (1) that—

‘‘(I) is easily usable by—

‘‘(aa) Federal, State, and local government 

agencies; 

‘‘(bb) local community leaders; 

‘‘(cc) nongovernmental organizations; and 

‘‘(dd) the public; and 

‘‘(II) includes information on approved community food projects. 

‘‘(3) AUDITS; EFFECTIVE USE OF FUNDS.—The Secretary 

shall establish auditing procedures and otherwise ensure the effective use of funds made available to carry out this subsection. 

‘‘(4) FUNDING.—Not later than 90 days after the date of enactment of this paragraph, and on October 1 of each of fiscal 

years 2003 through 2007, the Secretary shall allocate to carry 

out this subsection $200,000 of the funds made available under 

subsection (b), to remain available until expended.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

SEC. 4126. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY 

FOOD ASSISTANCE PROGRAM. 

(a) IN GENERAL.—Section 27(a) of the Food Stamp Act of 1977 

(7 U.S.C. 2036(a)) is amended—

(1) by striking ‘‘1997 through 2002’’ and inserting ‘‘2002 

through 2007’’; and 

(2) by striking ‘‘$100,000,000’’ and inserting 

‘‘$140,000,000’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect on October 1, 2001. 

Subtitle B—Commodity Distribution 

SEC. 4201. COMMODITY SUPPLEMENTAL FOOD PROGRAM. 

(a) COMMODITY DISTRIBUTION PROGRAM.—Section 4(a) of the 

Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c 

note; Public Law 93–86) is amended in the first sentence by striking 

‘‘2002’’ and inserting ‘‘2007’’. 

(b) COMMODITY SUPPLEMENTAL FOOD PROGRAM.—Section 5 of 

the Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c 

note; Public Law 93–86) is amended—

(1) by striking subsection (a) and inserting the following: 

‘‘(a) GRANTS PER ASSIGNED CASELOAD SLOT.—

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‘‘(1) IN GENERAL.—In carrying out the program under section 4 (referred to in this section as the ‘commodity supplemental food program’), for each of fiscal years 2003 through 

2007, the Secretary shall provide to each State agency from 

funds made available to carry out that section (including any 

such funds remaining available from the preceding fiscal year), 

a grant per assigned caseload slot for administrative costs incurred by the State agency and local agencies in the State in 

operating the commodity supplemental food program. ‘‘(2) AMOUNT OF GRANTS.— ‘‘(A) FISCAL YEAR 2003.—For fiscal year 2003, the 

amount of each grant per assigned caseload slot shall be 

equal to the amount of the grant per assigned caseload slot 

for administrative costs in 2001, adjusted by the percentage 

change between— ‘‘(i) the value of the State and local government 

price index, as published by the Bureau of Economic 

Analysis of the Department of Commerce, for the 12-

month period ending June 30, 2001; and ‘‘(ii) the value of that index for the 12-month period ending June 30, 2002. 

‘‘(B) FISCAL YEARS 2004 THROUGH 2007.—For each of fiscal years 2004 through 2007, the amount of each grant per 

assigned caseload slot shall be equal to the amount of the 

grant per assigned caseload slot for the preceding fiscal 

year, adjusted by the percentage change between— ‘‘(i) the value of the State and local government 

price index, as published by the Bureau of Economic 

Analysis of the Department of Commerce, for the 12-

month period ending June 30 of the second preceding 

fiscal year; and ‘‘(ii) the value of that index for the 12-month period ending June 30 of the preceding fiscal year.’’; 

(2) in subsection (d)(2), by striking ‘‘2002’’ each place it appears and inserting ‘‘2007’’; and 

(3) by striking subsection (l) and inserting the following: 

‘‘(l) USE OF APPROVED FOOD SAFETY TECHNOLOGY.— ‘‘(1) IN GENERAL.—In acquiring commodities for distribution through a program specified in paragraph (2), the Secretary shall not prohibit the use of any technology to improve 

food safety that— ‘‘(A) has been approved by the Secretary; or 

‘‘(B) has been approved or is otherwise allowed by the 

Secretary of Health and Human Services. 

‘‘(2) PROGRAMS.—A program referred to in paragraph (1) is 

a program authorized under—

‘‘(A) this Act; 

‘‘(B) the Food Stamp Act of 1977 (7 U.S.C. 2011 et 

seq.); ‘‘(C) the Emergency Food Assistance Act of 1983 (7 

U.S.C. 7501 et seq.); ‘‘(D) the Richard B. Russell National School Lunch Act 

(42 U.S.C. 1751 et seq.); or ‘‘(E) the Child Nutrition Act of 1966 (42 U.S.C. 1771 

et seq.).’’. 

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(c) ADDITIONAL FUNDING FOR CERTAIN STATES.—

(1) IN GENERAL.—Not later than 30 days after the date of 

enactment of this Act, of the funds of the Commodity Credit 

Corporation, the Secretary of Agriculture shall make available 

an amount equal to the amount that the Secretary of Agriculture determines to be necessary to permit each State that 

began administering the commodity supplemental food program 

under the Agriculture and Consumer Protection Act of 1973 (7 

U.S.C. 612c note; Public Law 93–86) in the 2000 caseload cycle 

to administer the program, through the 2002 caseload cycle, at 

a caseload level that is not less than the originally assigned 

caseload level of the State. 

(2) PROVISION TO STATES.—The Secretary shall provide to 

each State described in paragraph (1) for the purpose described 

in that paragraph the funds made available under that paragraph. 

(d) EFFECTIVE DATE.—The amendment made by subsection 

(b)(3) takes effect on the date of enactment of this Act. 

SEC. 4202. COMMODITY DONATIONS. 

(a) IN GENERAL.—The Commodity Distribution Reform Act and 

WIC Amendments of 1987 (7 U.S.C. 612c note; Public Law 100–237) 

is amended—

(1) by redesignating sections 17 and 18 as sections 18 and 

19, respectively; and 

(2) by inserting after section 16 the following: 

‘‘SEC. 17. COMMODITY DONATIONS. 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of law 

concerning commodity donations, any commodities acquired in the 

conduct of the operations of the Commodity Credit Corporation and 

any commodities acquired under section 32 of the Act of August 24, 

1935 (7 U.S.C. 612c), to the extent that the commodities are in excess of the quantities of commodities that are essential to carry out 

other authorized activities of the Commodity Credit Corporation 

and the Secretary (including any quantity specifically reserved for 

a specific purpose), may be used for any program authorized to be 

carried out by the Secretary that involves the acquisition of commodities for use in a domestic feeding program, including any program conducted by the Secretary that provides commodities to individuals in cases of hardship. 

‘‘(b) PROGRAMS.—A program described in subsection (a) includes a program authorized by—

‘‘(1) the Emergency Food Assistance Act of 1983 (7 U.S.C. 

7501 et seq.); 

‘‘(2) the Richard B. Russell National School Lunch Act (42 

U.S.C. 1751 et seq.); 

‘‘(3) the Child Nutrition Act of 1966 (42 U.S.C. 1771 et 

seq.); 

‘‘(4) the Older Americans Act of 1965 (42 U.S.C. 3001 et 

seq.); or 

‘‘(5) such other laws as the Secretary determines to be appropriate.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

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SEC. 4203. DISTRIBUTION OF SURPLUS COMMODITIES TO SPECIAL NUTRITION PROJECTS. 

Section 1114(a)(2)(A) of the Agriculture and Food Act of 1981 

(7 U.S.C. 1431e(2)(A)) is amended in the first sentence by striking 

‘‘2002’’ and inserting ‘‘2007’’.

SEC. 4204. EMERGENCY FOOD ASSISTANCE. 

Section 204(a)(1) of the Emergency Food Assistance Act of 1983 

(7 U.S.C. 7508(a)(1)) is amended in the first sentence—

(1) by striking ‘‘$50,000,000’’ and inserting ‘‘$60,000,000’’; 

(2) by striking ‘‘1991 through 2002’’ and inserting ‘‘2003 

through 2007’’; 

(3) by striking ‘‘administrative’’; 

(4) by inserting ‘‘storage,’’ after ‘‘processing,’’; and 

(5) by inserting ‘‘, including commodities secured by gleaning (as defined in section 111(a) of the Hunger Prevention Act 

of 1988 (7 U.S.C. 612c note; Public Law 100–435))’’ after 

‘‘sources’’. 

Subtitle C—Child Nutrition and Related 

Programs 

SEC. 4301. COMMODITIES FOR SCHOOL LUNCH PROGRAM. 

(a) IN GENERAL.—Section 6(e)(1)(B) of the Richard B. Russell 

National School Lunch Act (42 U.S.C. 1755(e)(1)(B)) is amended by 

striking ‘‘2001’’ and inserting ‘‘2003’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

takes effect on the date of enactment of this Act. 

SEC. 4302. ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS. 

(a) IN GENERAL.—Section 9(b) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758(b)) is amended by adding 

at the end the following: 

‘‘(7) EXCLUSION OF CERTAIN MILITARY HOUSING ALLOWANCES.—For each of fiscal years 2002 and 2003, the amount of 

a basic allowance provided under section 403 of title 37, United 

States Code, on behalf of a member of a uniformed service for 

housing that is acquired or constructed under subchapter IV of 

chapter 169 of title 10, United States Code, or any related provision of law, shall not be considered to be income for the purpose of determining the eligibility of a child who is a member 

of the household of the member of a uniformed service for free 

or reduced price lunches under this Act.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

takes effect on the date of enactment of this Act. 

SEC. 4303. PURCHASES OF LOCALLY PRODUCED FOODS. 

Section 9 of the Richard B. Russell National School Lunch Act 

(42 U.S.C. 1758) is amended by adding at the end the following: 

‘‘(j) PURCHASES OF LOCALLY PRODUCED FOODS.—

‘‘(1) IN GENERAL.—The Secretary shall—

‘‘(A) encourage institutions participating in the school 

lunch program under this Act and the school breakfast program established by section 4 of the Child Nutrition Act of 

1966 (42 U.S.C. 1773) to purchase, in addition to other 

202

food purchases, locally produced foods for school meal programs, to the maximum extent practicable and appropriate; 

‘‘(B) advise institutions participating in a program described in subparagraph (A) of the policy described in that 

subparagraph and post information concerning the policy 

on the website maintained by the Secretary; and 

‘‘(C) in accordance with requirements established by 

the Secretary, provide startup grants to not more than 200 

institutions to defray the initial costs of equipment, materials, and storage facilities, and similar costs, incurred in 

carrying out the policy described in subparagraph (A). 

‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—

‘‘(A) IN GENERAL.—There is authorized to be appropriated to carry out this subsection $400,000 for each of fiscal years 2003 through 2007, to remain available until expended. 

‘‘(B) LIMITATION.—No amounts may be made available 

to carry out this subsection unless specifically provided by 

an appropriation Act.’’. 

SEC. 4304. APPLICABILITY OF BUY-AMERICAN REQUIREMENT TO PUERTO RICO. 

Section 12(n) of the Richard B. Russell National School Lunch 

Act (42 U.S.C. 1760(n)) is amended by adding at the end the following: 

‘‘(4) APPLICABILITY TO PUERTO RICO.—Paragraph (2)(A) 

shall apply to a school food authority in the Commonwealth of 

Puerto Rico with respect to domestic commodities or products 

that are produced in the Commonwealth of Puerto Rico in sufficient quantities to meet the needs of meals provided under the 

school lunch program under this Act or the school breakfast 

program under section 4 of the Child Nutrition Act of 1966 (42 

U.S.C. 1773).’’. 

SEC. 4305. FRUIT AND VEGETABLE PILOT PROGRAM. 

(a) IN GENERAL.—Section 18 of the Richard B. Russell National 

School Lunch Act (42 U.S.C. 1769) is amended by adding at the end 

the following: 

‘‘(g) FRUIT AND VEGETABLE PILOT PROGRAM.—

‘‘(1) IN GENERAL.—In the school year beginning July 2002, 

the Secretary shall carry out a pilot program to make available 

to students in 25 elementary or secondary schools in each of 4 

States, and in elementary or secondary schools on 1 Indian reservation, free fresh and dried fruits and fresh vegetables 

throughout the school day in 1 or more areas designated by the 

school. 

‘‘(2) PUBLICITY.—A school that participates in the pilot program shall widely publicize within the school the availability of 

free fruits and vegetables under the pilot program. 

‘‘(3) REPORT.—Not later than May 1, 2003, the Secretary, 

acting through the Administrator of the Economic Research 

Service, shall report to the Committee on Education and the 

Workforce of the House of Representatives and the Committee 

on Agriculture, Nutrition, and Forestry of the Senate on the results of the pilot program. 

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‘‘(4) FUNDING.—The Secretary shall use not more than 

$6,000,000 of funds made available under section 32 of the Act 

of August 24, 1935 (7 U.S.C. 612c), to carry out this subsection 

(other than paragraph (3)).’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

takes effect on the date of enactment of this Act. 

SEC. 4306. ELIGIBILITY FOR ASSISTANCE UNDER THE SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, 

AND CHILDREN. 

(a) IN GENERAL.—Section 17(d)(2)(B)(i) of the Child Nutrition 

Act of 1966 (42 U.S.C. 1786(d)(2)(B)(i)) is amended—

(1) by striking ‘‘basic allowance for housing’’ and inserting 

the following: ‘‘basic allowance—

‘‘(I) for housing’’; 

(2) by striking ‘‘and’’ at the end and inserting ‘‘or’’; and 

(3) by adding at the end the following: 

‘‘(II) provided under section 403 of title 37, United 

States Code, for housing that is acquired or constructed 

under subchapter IV of chapter 169 of title 10, United 

States Code, or any related provision of law; and’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

SEC. 4307. WIC FARMERS’ MARKET NUTRITION PROGRAM. 

(a) IN GENERAL.—Section 17(m)(9) of the Child Nutrition Act of 

1966 (42 U.S.C. 1786(m)(9)) is amended—

(1) by striking ‘‘(9)(A) There’’ and inserting the following: 

‘‘(9) FUNDING.—

‘‘(A) IN GENERAL.—

‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There’’; 

and 

(2) in subparagraph (A), by adding at the end the following: 

‘‘(ii) MANDATORY FUNDING.—Not later than 30 

days after the date of enactment of the Food Stamp Reauthorization Act of 2002, of the funds of the Commodity Credit Corporation, the Secretary shall make 

available to carry out this subsection $15,000,000, to 

remain available until expended.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

take effect on the date of enactment of this Act. 

Subtitle D—Miscellaneous 

SEC. 4401. PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS. 

(a) RESTORATION OF BENEFITS TO DISABLED ALIENS.—Section 

402(a)(2)(F) of the Personal Responsibility and Work Opportunity 

Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(F)) is amended by 

striking ‘‘(i) was’’ and all that follows through ‘‘(II) in the case’’ and 

inserting the following: 

‘‘(i) in the case of the specified Federal program described in paragraph (3)(A)—

‘‘(I) was lawfully residing in the United States 

on August 22, 1996; and 

204

‘‘(II) is blind or disabled (as defined in paragraph (2) or (3) of section 1614(a) of the Social Security Act (42 U.S.C. 1382c(a))); and

‘‘(ii) in the case’’. (b) RESTORATION OF BENEFITS TO ALL QUALIFIED ALIEN CHIL- DREN.— (1) IN GENERAL.—Section 402(a)(2)(J) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 

U.S.C. 1612(a)(2)(J)) is amended by striking ‘‘who’’ and all that 

follows through ‘‘is under’’ and inserting ‘‘who is under’’. (2) CONFORMING AMENDMENTS.— (A) Section 403(c)(2) of the Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 

1613(c)(2)) is amended by adding at the end the following: ‘‘(L) Assistance or benefits provided to individuals 

under the age of 18 under the Food Stamp Act of 1977 (7 

U.S.C. 2011 et seq.).’’. (B) Section 421(d) of the Personal Responsibility and 

Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 

1631(d)) is amended by adding at the end the following: 

‘‘(3) This section shall not apply to assistance or benefits 

under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) to the 

extent that a qualified alien is eligible under section 

402(a)(2)(J).’’. (C) Section 5(i)(2)(E) of the Food Stamp Act of 1977 (7 

U.S.C. 2014(i)(2)(E)) is amended by inserting before the period at the end the following: ‘‘, or to any alien who is 

under 18 years of age’’. (3) EFFECTIVE DATE.—The amendments made by this subsection take effect on October 1, 2003. 

(c) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED ALIENS.— (1) IN GENERAL.—Section 402(a)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 

U.S.C. 1612(a)(2)) is amended by adding at the end the following: ‘‘(L) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED

ALIENS.—With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) shall not apply to any qualified alien who has resided in the United States with a status within the meaning of the term ‘qualified alien’ for a period of 5 years or 

more beginning on the date of the alien’s entry into the 

United States.’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph 

(1) takes effect on April 1, 2003. 

SEC. 4402. SENIORS FARMERS’ MARKET NUTRITION PROGRAM. 

(a) ESTABLISHMENT.—The Secretary of Agriculture shall use 

$5,000,000 for fiscal year 2002, and $15,000,000 for each of fiscal 

years 2003 through 2007, of the funds available to the Commodity 

Credit Corporation to carry out and expand a seniors farmers’ market nutrition program. 

(b) PROGRAM PURPOSES.—The purposes of the seniors farmers’

market nutrition program are—

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ers’ markets, roadside stands, and community supported agriculture programs to low-income seniors; 

(2) to increase the domestic consumption of agricultural 

commodities by expanding or aiding in the expansion of domestic farmers’ markets, roadside stands, and community supported agriculture programs; and 

(3) to develop or aid in the development of new and additional farmers’ markets, roadside stands, and community supported agriculture programs. 

(c) REGULATIONS.—The Secretary may issue such regulations as 

the Secretary considers necessary to carry out the seniors farmers’

market nutrition program. 

SEC. 4403. NUTRITION INFORMATION AND AWARENESS PILOT PROGRAM. 

(a) ESTABLISHMENT.—The Secretary of Agriculture may establish, in not more than 5 States, for a period not to exceed 4 years 

for each participating State, a pilot program to increase the domestic consumption of fresh fruits and vegetables. 

(b) PURPOSE.—

(1) IN GENERAL.—Subject to paragraph (2), the purpose of 

the program shall be to provide funds to States solely for the 

purpose of assisting eligible public and private sector entities 

with cost-share assistance to carry out demonstration projects—

(A) to increase fruit and vegetable consumption; and 

(B) to convey related health promotion messages. 

(2) LIMITATION.—Funds made available to a State under 

the program shall not be used to disparage any agricultural 

commodity. 

(c) SELECTION OF STATES.—

(1) IN GENERAL.—In selecting States to participate in the 

program, the Secretary shall take into consideration, with respect to projects and activities proposed to be carried out under 

the program—

(A) experience in carrying out similar projects or activities; 

(B) innovative approaches; and 

(C) the ability of the State to promote and track increases in levels of fruit and vegetable consumption. 

(2) ENHANCEMENT OF EXISTING STATE PROGRAMS.—The 

Secretary may use the pilot program to enhance existing State 

programs that are consistent with the purpose of the pilot program specified in subsection (b). 

(d) ELIGIBLE PUBLIC AND PRIVATE SECTOR ENTITIES.—

(1) IN GENERAL.—A participating State shall establish eligibility criteria under which the State may select public and 

private sector entities to carry out demonstration projects under 

the program. 

(2) LIMITATION.—No funds made available to States under 

the program shall be provided by a State to any foreign forprofit corporation. 

(e) FEDERAL SHARE.—The Federal share of the cost of any 

project or activity carried out using funds provided under this section shall be 50 percent. 

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(f) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to 

be appropriated to carry out this section $10,000,000 for each of fiscal years 2002 through 2007. 

SEC. 4404. HUNGER FELLOWSHIP PROGRAM. 

(a) SHORT TITLE; FINDINGS.—

(1) SHORT TITLE.—This section may be cited as the ‘‘Congressional Hunger Fellows Act of 2002’’. 

(2) FINDINGS.—The Congress finds as follows: 

(A) There is a critical need for compassionate individuals who are committed to assisting people who suffer from 

hunger as well as a need for such individuals to initiate 

and administer solutions to the hunger problem. 

(B) Bill Emerson, the distinguished late Representative 

from the 8th District of Missouri, demonstrated his commitment to solving the problem of hunger in a bipartisan manner, his commitment to public service, and his great affection for the institution and the ideals of the United States 

Congress. 

(C) George T. (Mickey) Leland, the distinguished late 

Representative from the 18th District of Texas, demonstrated his compassion for those in need, his high regard 

for public service, and his lively exercise of political talents. 

(D) The special concern that Mr. Emerson and Mr. Leland demonstrated during their lives for the hungry and 

poor was an inspiration for others to work toward the goals 

of equality and justice for all. 

(E) These two outstanding leaders maintained a special bond of friendship regardless of political affiliation 

and worked together to encourage future leaders to recognize and provide service to others, and therefore it is especially appropriate to honor the memory of Mr. Emerson 

and Mr. Leland by creating a fellowship program to develop and train the future leaders of the United States to 

pursue careers in humanitarian service. 

(b) ESTABLISHMENT.—There is established as an independent 

entity of the legislative branch of the United States Government the 

Congressional Hunger Fellows Program (hereinafter in this section 

referred to as the ‘‘Program’’). 

(c) BOARD OF TRUSTEES.—

(1) IN GENERAL.—The Program shall be subject to the supervision and direction of a Board of Trustees. 

(2) MEMBERS OF THE BOARD OF TRUSTEES.—

(A) APPOINTMENT.—The Board shall be composed of 6 

voting members appointed under clause (i) and one nonvoting ex officio member designated in clause (ii) as follows: 

(i) VOTING MEMBERS.—(I) The Speaker of the 

House of Representatives shall appoint two members. 

(II) The minority leader of the House of Representatives shall appoint one member. 

(III) The majority leader of the Senate shall appoint two members. 

(IV) The minority leader of the Senate shall appoint one member. 

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(ii) NONVOTING MEMBER.—The Executive Director 

of the program shall serve as a nonvoting ex officio 

member of the Board.

(B) TERMS.—Members of the Board shall serve a term 

of 4 years. 

(C) VACANCY.—

(i) AUTHORITY OF BOARD.—A vacancy in the membership of the Board does not affect the power of the remaining members to carry out this section. 

(ii) APPOINTMENT OF SUCCESSORS.—A vacancy in 

the membership of the Board shall be filled in the 

same manner in which the original appointment was 

made. 

(iii) INCOMPLETE TERM.—If a member of the Board 

does not serve the full term applicable to the member, 

the individual appointed to fill the resulting vacancy 

shall be appointed for the remainder of the term of the 

predecessor of the individual. 

(D) CHAIRPERSON.—As the first order of business of the 

first meeting of the Board, the members shall elect a Chairperson. 

(E) COMPENSATION.—

(i) IN GENERAL.—Subject to clause (ii), members of 

the Board may not receive compensation for service on 

the Board. 

(ii) TRAVEL.—Members of the Board may be reimbursed for travel, subsistence, and other necessary expenses incurred in carrying out the duties of the program. 

(3) DUTIES.—

(A) BYLAWS.—

(i) ESTABLISHMENT.—The Board shall establish 

such bylaws and other regulations as may be appropriate to enable the Board to carry out this section, including the duties described in this paragraph. 

(ii) CONTENTS.—Such bylaws and other regulations shall include provisions—

(I) for appropriate fiscal control, funds accountability, and operating principles; 

(II) to prevent any conflict of interest, or the 

appearance of any conflict of interest, in the procurement and employment actions taken by the 

Board or by any officer or employee of the Board 

and in the selection and placement of individuals 

in the fellowships developed under the program; 

(III) for the resolution of a tie vote of the members of the Board; and 

(IV) for authorization of travel for members of 

the Board. 

(iii) TRANSMITTAL TO CONGRESS.—Not later than 

90 days after the date of the first meeting of the Board, 

the Chairperson of the Board shall transmit to the appropriate congressional committees a copy of such bylaws. 

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(B) BUDGET.—For each fiscal year the program is in 

operation, the Board shall determine a budget for the program for that fiscal year. All spending by the program 

shall be pursuant to such budget unless a change is approved by the Board. 

(C) PROCESS FOR SELECTION AND PLACEMENT OF FELLOWS.—The Board shall review and approve the process established by the Executive Director for the selection and 

placement of individuals in the fellowships developed under 

the program. 

(D) ALLOCATION OF FUNDS TO FELLOWSHIPS.—The 

Board of Trustees shall determine the priority of the programs to be carried out under this section and the amount 

of funds to be allocated for the Emerson and Leland fellowships. 

(d) PURPOSES; AUTHORITY OF PROGRAM.—

(1) PURPOSES.—The purposes of the program are—

(A) to encourage future leaders of the United States to 

pursue careers in humanitarian service, to recognize the 

needs of people who are hungry and poor, and to provide 

assistance and compassion for those in need; 

(B) to increase awareness of the importance of public 

service; and 

(C) to provide training and development opportunities 

for such leaders through placement in programs operated 

by appropriate organizations or entities. 

(2) AUTHORITY.—The program is authorized to develop 

such fellowships to carry out the purposes of this section, including the fellowships described in paragraph (3). 

(3) FELLOWSHIPS.—

(A) IN GENERAL.—The program shall establish and 

carry out the Bill Emerson Hunger Fellowship and the 

Mickey Leland Hunger Fellowship. 

(B) CURRICULUM.—

(i) IN GENERAL.—The fellowships established 

under subparagraph (A) shall provide experience and 

training to develop the skills and understanding necessary to improve the humanitarian conditions and the 

lives of individuals who suffer from hunger, including—

(I) training in direct service to the hungry in 

conjunction with community-based organizations 

through a program of field placement; and 

(II) experience in policy development through 

placement in a governmental entity or nonprofit 

organization. 

(ii) FOCUS OF BILL EMERSON HUNGER FELLOWSHIP.—The Bill Emerson Hunger Fellowship shall address hunger and other humanitarian needs in the 

United States. 

(iii) FOCUS OF MICKEY LELAND HUNGER FELLOWSHIP.—The Mickey Leland Hunger Fellowship shall 

address international hunger and other humanitarian 

needs. 

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(iv) WORKPLAN.—To carry out clause (i) and to assist in the evaluation of the fellowships under paragraph (4), the program shall, for each fellow, approve 

a work plan that identifies the target objectives for the 

fellow in the fellowship, including specific duties and 

responsibilities related to those objectives. 

(C) PERIOD OF FELLOWSHIP.—

(i) EMERSON FELLOW.—A Bill Emerson Hunger 

Fellowship awarded under this paragraph shall be for 

no more than 1 year. 

(ii) LELAND FELLOW.—A Mickey Leland Hunger 

Fellowship awarded under this paragraph shall be for 

no more than 2 years. Not less than 1 year of the fellowship shall be dedicated to fulfilling the requirement 

of subparagraph (B)(i)(I). 

(D) SELECTION OF FELLOWS.—

(i) IN GENERAL.—A fellowship shall be awarded 

pursuant to a nationwide competition established by 

the program. 

(ii) QUALIFICATION.—A successful applicant shall 

be an individual who has demonstrated—

(I) an intent to pursue a career in humanitarian service and outstanding potential for such a 

career; 

(II) leadership potential or actual leadership 

experience; 

(III) diverse life experience; 

(IV) proficient writing and speaking skills; 

(V) an ability to live in poor or diverse communities; and 

(VI) such other attributes as determined to be 

appropriate by the Board. 

(iii) AMOUNT OF AWARD.—

(I) IN GENERAL.—Each individual awarded a 

fellowship under this paragraph shall receive a 

living allowance and, subject to subclause (II), an 

end-of-service award as determined by the program. 

(II) REQUIREMENT FOR SUCCESSFUL COMPLETION OF FELLOWSHIP.—Each individual awarded a 

fellowship under this paragraph shall be entitled 

to receive an end-of-service award at an appropriate rate for each month of satisfactory service as 

determined by the Executive Director. 

(iv) RECOGNITION OF FELLOWSHIP AWARD.—

(I) EMERSON FELLOW.—An individual awarded a fellowship from the Bill Emerson Hunger Fellowship shall be known as an ‘‘Emerson Fellow’’. 

(II) LELAND FELLOW.—An individual awarded 

a fellowship from the Mickey Leland Hunger Fellowship shall be known as a ‘‘Leland Fellow’’. 

(4) EVALUATION.—The program shall conduct periodic evaluations of the Bill Emerson and Mickey Leland Hunger Fellowships. Such evaluations shall include the following: 

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(A) An assessment of the successful completion of the 

work plan of the fellow.

(B) An assessment of the impact of the fellowship on 

the fellows. 

(C) An assessment of the accomplishment of the purposes of the program. 

(D) An assessment of the impact of the fellow on the 

community. 

(e) TRUST FUND.— (1) ESTABLISHMENT.—There is established the Congressional Hunger Fellows Trust Fund (hereinafter in this section 

referred to as the ‘‘Fund’’) in the Treasury of the United States, 

consisting of amounts appropriated to the Fund under subsection (i), amounts credited to it under paragraph (3), and 

amounts received under subsection (g)(3)(A). 

(2) INVESTMENT OF FUNDS.—The Secretary of the Treasury 

shall invest the full amount of the Fund. Each investment shall 

be made in an interest bearing obligation of the United States 

or an obligation guaranteed as to principal and interest by the 

United States that, as determined by the Secretary in consultation with the Board, has a maturity suitable for the Fund. 

(3) RETURN ON INVESTMENT.—Except as provided in subsection (f)(2), the Secretary of the Treasury shall credit to the 

Fund the interest on, and the proceeds from the sale or redemption of, obligations held in the Fund. 

(f) EXPENDITURES; AUDITS.— (1) IN GENERAL.—The Secretary of the Treasury shall 

transfer to the program from the amounts described in subsection (e)(3) and subsection (g)(3)(A) such sums as the Board 

determines are necessary to enable the program to carry out the 

provisions of this section. 

(2) LIMITATION.—The Secretary may not transfer to the program the amounts appropriated to the Fund under subsection 

(i). 

(3) USE OF FUNDS.—Funds transferred to the program 

under paragraph (1) shall be used for the following purposes: 

(A) STIPENDS FOR FELLOWS.—To provide for a living 

allowance for the fellows. 

(B) TRAVEL OF FELLOWS.—To defray the costs of transportation of the fellows to the fellowship placement sites. 

(C) INSURANCE.—To defray the costs of appropriate insurance of the fellows, the program, and the Board. 

(D) TRAINING OF FELLOWS.—To defray the costs of 

preservice and midservice education and training of fellows. 

(E) SUPPORT STAFF.—Staff described in subsection (g). 

(F) AWARDS.—End-of-service awards under subsection 

(d)(3)(D)(iii)(II). 

(G) ADDITIONAL APPROVED USES.—For such other purposes that the Board determines appropriate to carry out 

the program. 

(4) AUDIT BY GAO.— (A) IN GENERAL.—The Comptroller General of the 

United States shall conduct an annual audit of the accounts of the program. 

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(B) BOOKS.—The program shall make available to the 

Comptroller General all books, accounts, financial records 

(including records of salaries of the Executive Director and 

other personnel), reports, files, and all other papers, things, 

or property belonging to or in use by the program and necessary to facilitate such audit. 

(C) REPORT TO CONGRESS.—The Comptroller General 

shall submit a copy of the results of each such audit to the 

appropriate congressional committees. 

(g) STAFF; POWERS OF PROGRAM.— (1) EXECUTIVE DIRECTOR.— (A) IN GENERAL.—The Board shall appoint an Executive Director of the program who shall administer the program. The Executive Director shall carry out such other 

functions consistent with the provisions of this section as 

the Board shall prescribe. 

(B) RESTRICTION.—The Executive Director may not 

serve as Chairperson of the Board. 

(C) COMPENSATION.—The Executive Director shall be 

paid at a rate not to exceed the rate of basic pay payable 

for level V of the Executive Schedule under section 5316 of 

title 5, United States Code. 

(2) STAFF.— (A) IN GENERAL.—With the approval of a majority of 

the Board, the Executive Director may appoint and fix the 

pay of additional personnel as the Executive Director considers necessary and appropriate to carry out the functions 

of the provisions of this section. 

(B) COMPENSATION.—An individual appointed under 

subparagraph (A) shall be paid at a rate not to exceed the 

rate of basic pay payable for level GS–15 of the General 

Schedule. 

(3) POWERS.—In order to carry out the provisions of this 

section, the program may perform the following functions: 

(A) GIFTS.—The program may solicit, accept, use, and 

dispose of gifts, bequests, or devises of services or property, 

both real and personal, for the purpose of aiding or facilitating the work of the program. Gifts, bequests, or devises 

of money and proceeds from sales of other property received 

as gifts, bequests, or devises shall be deposited in the Fund 

and shall be available for disbursement upon order of the 

Board. 

(B) EXPERTS AND CONSULTANTS.—The program may 

procure temporary and intermittent services under section 

3109 of title 5, United States Code, but at rates for individuals not to exceed the daily equivalent of the maximum annual rate of basic pay payable for GS–15 of the General 

Schedule. 

(C) CONTRACT AUTHORITY.—The program may contract, with the approval of a majority of the members of the 

Board, with and compensate Government and private agencies or persons without regard to section 3709 of the Revised Statutes (41 U.S.C. 5). 

(D) OTHER NECESSARY EXPENDITURES.—The program 

shall make such other expenditures which the program conVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00215 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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siders necessary to carry out the provisions of this section, 

but excluding project development. 

(h) REPORT.—Not later than December 31 of each year, the 

Board shall submit to the appropriate congressional committees a 

report on the activities of the program carried out during the previous fiscal year, and shall include the following: 

(1) An analysis of the evaluations conducted under subsection (d)(4) (relating to evaluations of the Emerson and Leland fellowships and accomplishment of the program purposes) 

during that fiscal year. 

(2) A statement of the total amount of funds attributable to 

gifts received by the program in that fiscal year (as authorized 

under subsection (g)(3)(A)), and the total amount of such funds 

that were expended to carry out the program that fiscal year. 

(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated $18,000,000 to carry out the provisions of this 

section. 

(j) DEFINITION.—In this section, the term ‘‘appropriate congressional committees’’ means—

(1) the Committee on Agriculture and the Committee on 

International Relations of the House of Representatives; and 

(2) the Committee on Agriculture, Nutrition, and Forestry 

and the Committee on Foreign Relations of the Senate. 

SEC. 4405. GENERAL EFFECTIVE DATE. 

Except as otherwise provided in this title, the amendments 

made by this title take effect on October 1, 2002.

TITLE V—CREDIT 

Subtitle A—Farm Ownership Loans 

SEC. 5001. DIRECT LOANS. 

Section 302(b)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922(b)(1)) is amended by striking ‘‘operated’’

and inserting ‘‘participated in the business operations of’’. 

SEC. 5002. FINANCING OF BRIDGE LOANS. 

Section 303(a)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1923(a)(1)) is amended—

(1) in subparagraph (C), by striking ‘‘or’’ at the end; 

(2) in subparagraph (D), by striking the period at the end 

and inserting ‘‘; or’’; and 

(3) by adding at the end the following: 

‘‘(E) refinancing a temporary bridge loan made by a 

commercial or cooperative lender to a farmer or rancher for 

the acquisition of land for a farm or ranch, if—

‘‘(i) the Secretary approved an application for a direct farm ownership loan to the farmer or rancher for 

acquisition of the land; and

‘‘(ii) funds for direct farm ownership loans under 

section 346(b) were not available at the time at which 

the application was approved.’’. 

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SEC. 5003. AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS 

ON TRIBAL LANDS. 

Section 309(h) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(h)) is amended—

(1) in paragraph (4), by striking ‘‘paragraphs (5) and (6)’’

and inserting ‘‘paragraphs (5), (6), and (7)’’; and 

(2) by adding at the end the following: 

‘‘(7) AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS ON TRIBAL LANDS.—In the case of an operating loan 

made to a farmer or rancher whose farm or ranch land is subject to the jurisdiction of an Indian tribe and whose loan is secured by 1 or more security instruments that are subject to the 

jurisdiction of an Indian tribe, the Secretary shall guarantee 95 

percent of the loan.’’. 

SEC. 5004. GUARANTEE OF LOANS MADE UNDER STATE BEGINNING 

FARMER OR RANCHER PROGRAMS. 

Section 309 of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1929) is amended by adding at the end the following: 

‘‘(j) GUARANTEE OF LOANS MADE UNDER STATE BEGINNING

FARMER OR RANCHER PROGRAMS.—The Secretary may guarantee 

under this title a loan made under a State beginning farmer or 

rancher program, including a loan financed by the net proceeds of 

a qualified small issue agricultural bond for land or property described in section 144(a)(12)(B)(ii) of the Internal Revenue Code of 

1986.’’. 

SEC. 5005. DOWN PAYMENT LOAN PROGRAM. 

Section 310E of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1935) is amended—

(1) in subsection (b)—

(A) in paragraph (1), by striking ‘‘30 percent’’ and inserting ‘‘40 percent’’; and 

(B) in paragraph (3), by striking ‘‘10 years’’ and inserting ‘‘15 years’’; and 

(2) in subsection (c)(3)(B), by striking ‘‘10-year’’ and inserting ‘‘15-year’’. 

SEC. 5006. BEGINNING FARMER AND RANCHER CONTRACT LAND 

SALES PROGRAM. 

Subtitle A of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1922 et seq.) is amended by adding at the end the following: 

‘‘SEC. 310F. BEGINNING FARMER AND RANCHER CONTRACT LAND 

SALES PROGRAM. 

‘‘(a) IN GENERAL.—If the Secretary makes a determination that 

the risk is comparable under subsection (b), the Secretary shall 

carry out a pilot program in not fewer than 5 States, as determined 

by the Secretary, to guarantee up to 5 loans per State in each of fiscal years 2003 through 2007 made by a private seller of a farm or 

ranch to a qualified beginning farmer or rancher on a contract land 

sale basis, if the loan meets applicable underwriting criteria and a 

commercial lending institution agrees to serve as escrow agent. 

‘‘(b) DATE OF COMMENCEMENT OF PROGRAM.—Not later than 

October 1, 2002, the Secretary shall make a determination on 

whether guarantees of contract land sales present a risk that is comVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00217 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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parable with the risk presented in the case of guarantees to commercial lenders.’’. 

Subtitle B—Operating Loans 

SEC. 5101. DIRECT LOANS. 

Section 311(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(c)) is amended— (1) in paragraph (1)— (A) in the matter that precedes subparagraph (A), by 

striking ‘‘paragraph (3)’’ and inserting ‘‘paragraphs (3) and 

(4)’’; and 

(B) in subparagraph (A), by striking ‘‘who has not’’ and 

all that follows through ‘‘5 years’’; and 

(2) by adding at the end the following: 

‘‘(4) WAIVERS.— ‘‘(A) FARM AND RANCH OPERATIONS ON TRIBAL LANDS.— The Secretary shall waive the limitation under paragraph 

(1)(C) or (3) for a direct loan made under this subtitle to 

a farmer or rancher whose farm or ranch land is subject 

to the jurisdiction of an Indian tribe and whose loan is secured by 1 or more security instruments that are subject to 

the jurisdiction of an Indian tribe if the Secretary determines that commercial credit is not generally available for 

such farm or ranch operations. ‘‘(B) OTHER FARM AND RANCH OPERATIONS.—On a caseby-case determination not subject to administrative appeal, 

the Secretary may grant a borrower a waiver, 1 time only 

for a period of 2 years, of the limitation under paragraph 

(1)(C) or (3) for a direct operating loan if the borrower demonstrates to the satisfaction of the Secretary that— ‘‘(i) the borrower has a viable farm or ranch operation; ‘‘(ii) the borrower applied for commercial credit 

from at least 2 commercial lenders; ‘‘(iii) the borrower was unable to obtain a commercial loan (including a loan guaranteed by the Secretary); and ‘‘(iv) the borrower successfully has completed, or 

will complete within 1 year, borrower training under 

section 359 (from which requirement the Secretary 

shall not grant a waiver under section 359(f)).’’. 

SEC. 5102. SUSPENSION OF LIMITATION ON PERIOD FOR WHICH BORROWERS ARE ELIGIBLE FOR GUARANTEED ASSISTANCE. 

During the period beginning January 1, 2002, and ending December 31, 2006, section 319(b) of the Consolidated Farm and Rural 

Development Act (7 U.S.C. 1949(b)) shall have no force or effect. 

Subtitle C—Emergency Loans 

SEC. 5201. EMERGENCY LOANS IN RESPONSE TO AN EMERGENCY RESULTING FROM QUARANTINES. 

(a) LOAN AUTHORITY.—Section 321(a) of the Consolidated Farm 

and Rural Development Act (7 U.S.C. 1961(a)) is amended—

215

(1) in each of the 1st and 3rd sentences, by striking ‘‘a natural disaster in the United States or by’’ and inserting ‘‘a quarantine imposed by the Secretary under the Plant Protection Act 

or the animal quarantine laws (as defined in section 2509 of 

the Food, Agriculture, Conservation, and Trade Act of 1990), a 

natural disaster in the United States, or’’; and 

(2) in the 4th sentence—

(A) by striking ‘‘a natural disaster’’ and inserting ‘‘such 

a quarantine or natural disaster’’; and 

(B) by striking ‘‘by such natural disaster’’ and inserting 

‘‘by such quarantine or natural disaster’’. 

(b) CONFORMING AMENDMENT.—Section 323 of such Act (7 

U.S.C. 1963) is amended by inserting ‘‘quarantine,’’ before ‘‘natural 

disaster’’. 

Subtitle D—Administrative Provisions 

SEC. 5301. EVALUATIONS OF DIRECT AND GUARANTEED LOAN PROGRAMS. 

(a) STUDIES.—The Secretary of Agriculture shall conduct 2 

studies of the direct and guaranteed loan progams under sections 

302 and 311 of the Consolidated Farm and Rural Development Act, 

each of which shall include an examination of the number, average 

principal amount, and delinquency and default rates of loans provided or guaranteed during the period covered by the study. 

(b) PERIODS COVERED.—

(1) FIRST STUDY.—One study under subsection (a) shall 

cover the 1-year period that begins 1 year after the date of the 

enactment of this section. 

(2) SECOND STUDY.—One study under subsection (a) shall 

cover the 1-year period that begins 3 years after such date of enactment. 

(c) REPORTS TO THE CONGRESS.—At the end of the period covered by each study under this section, the Secretary of Agriculture 

shall submit to the Congress a report that contains an evaluation 

of the results of the study, including an analysis of the effectiveness 

of loan programs referred to in subsection (a) in meeting the credit 

needs of agricultural producers in an efficient and fiscally responsible manner. 

SEC. 5302. ELIGIBILITY OF TRUSTS AND LIMITED LIABILITY COMPANIES FOR FARM OWNERSHIP LOANS, FARM OPERATING 

LOANS, AND EMERGENCY LOANS. 

(a) IN GENERAL.—Sections 302(a), 311(a), and 321(a) of the 

Consolidated Farm and Rural Development Act (7 U.S.C. 1922(a), 

1941(a), and 1961(a)) are each amended by striking ‘‘and joint operations’’ each place it appears and inserting ‘‘joint operations, trusts, 

and limited liability companies’’. (b) CONFORMING AMENDMENT.—Section 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)) is 

amended by striking ‘‘or joint operations’’ each place it appears and 

inserting ‘‘joint operations, trusts, or limited liability companies’’. 

SEC. 5303. DEBT SETTLEMENT. 

Section 331(b)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981(b)(4)) is amended—

216

(1) by striking ‘‘The Secretary may release’’ and inserting ‘‘After consultation with a local or area county committee, the 

Secretary may release’’; and 

(2) by striking ‘‘carried out—’’ and all that follows through ‘‘(B) after’’ and inserting ‘‘carried out after’’. 

SEC. 5304. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS; PRIVATE COLLECTION AGENCIES. 

(a) IN GENERAL.—Section 331 of the Consolidated Farm and 

Rural Development Act (7 U.S.C. 1981) is amended by striking subsections (d) and (e). 

(b) APPLICATION.—The amendment made by subsection (a) shall 

not apply to a contract entered into before the effective date of this 

Act. 

SEC. 5305. INTEREST RATE OPTIONS FOR LOANS IN SERVICING. 

Section 331B of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981b) is amended— (1) by striking ‘‘lower of (1) the’’ and inserting the following: ‘‘lowest of— ‘‘(1) the’’; and 

(2) by striking ‘‘original loan or (2) the’’ and inserting the 

following: ‘‘original loan; 

‘‘(2) the rate being charged by the Secretary for loans, other 

than guaranteed loans, of the same type at the time at which 

the borrower applies for a deferral, consolidation, rescheduling, 

or reamortization; or 

‘‘(3) the’’. 

SEC. 5306. ELIMINATION OF REQUIREMENT THAT SECRETARY REQUIRE COUNTY COMMITTEES TO CERTIFY IN WRITING 

THAT CERTAIN LOAN REVIEWS HAVE BEEN CONDUCTED. 

Section 333(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983(2)) is amended to read as follows: 

‘‘(2) except with respect to a loan under section 306, 310B, 

or 314—

‘‘(A) an annual review of the credit history and business operation of the borrower; and 

‘‘(B) an annual review of the continued eligibility of the 

borrower for the loan;’’. 

SEC. 5307. SIMPLIFIED LOAN GUARANTEE APPLICATION AVAILABLE 

FOR LOANS OF GREATER AMOUNTS. 

Section 333A(g)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983a(g)(1)) is amended by striking ‘‘$50,000’’

and inserting ‘‘$125,000’’. 

SEC. 5308. INVENTORY PROPERTY. 

Section 335(c) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1985(c)) is amended—

(1) in paragraph (1)—

(A) in subparagraph (B)—

(i) in clause (i), by striking ‘‘75 days’’ and inserting 

‘‘135 days’’; and 

(ii) by adding at the end the following: 

‘‘(iv) COMBINING AND DIVIDING OF PROPERTY.—To 

the maximum extent practicable, the Secretary shall 

maximize the opportunity for beginning farmers and 

ranchers to purchase real property acquired by the SecVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00220 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
217

retary under this title by combining or dividing inventory parcels of the property in such manner as the Secretary determines to be appropriate.’’; and 

(B) in subparagraph (C)— (i) by striking ‘‘75 days’’ and inserting ‘‘135 days’’; 

and 

(ii) by striking ‘‘75-day period’’ and inserting ‘‘135-

day period’’; and 

(2) by striking paragraph (2) and inserting the following: 

‘‘(2) PREVIOUS LEASE.—In the case of real property acquired 

before April 4, 1996, that the Secretary leased before April 4, 

1996, not later than 60 days after the lease expires, the Secretary shall offer to sell the property in accordance with paragraph (1).’’. 

SEC. 5309. ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED CERTIFIED LENDERS PROGRAMS. 

Section 339 of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1989) is amended by adding at the end the following: 

‘‘(e) ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED

CERTIFIED LENDERS PROGRAMS.—The Secretary may administer the 

loan guarantee programs under subsections (c) and (d) through central offices established in States or in multi-State areas.’’. 

SEC. 5310. DEFINITIONS. 

(a) QUALIFIED BEGINNING FARMER OR RANCHER.—Section 

343(a)(11)(F) of the Consolidated Farm and Rural Development Act 

(7 U.S.C. 1991(a)(11)(F)) is amended by striking ‘‘25 percent’’ and 

inserting ‘‘30 percent’’. 

(b) DEBT FORGIVENESS.—Section 343(a)(12)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)(12)(B)) 

is amended to read as follows: 

‘‘(B) EXCEPTIONS.—The term ‘debt forgiveness’ does not 

include—

‘‘(i) consolidation, rescheduling, reamortization, or 

deferral of a loan; or 

‘‘(ii) any write-down provided as part of a resolution of a discrimination complaint against the Secretary.’’. 

SEC. 5311. LOAN AUTHORIZATION LEVELS. 

Section 346(b)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1994(b)(1)) is amended to read as follows: 

‘‘(1) IN GENERAL.—The Secretary may make or guarantee 

loans under subtitles A and B from the Agricultural Credit Insurance Fund provided for in section 309 for not more than 

$3,796,000,000 for each of fiscal years 2003 through 2007, of 

which, for each fiscal year—

‘‘(A) $770,000,000 shall be for direct loans, of which—

‘‘(i) $205,000,000 shall be for farm ownership 

loans under subtitle A; and 

‘‘(ii) $565,000,000 shall be for operating loans 

under subtitle B; and 

‘‘(B) $3,026,000,000 shall be for guaranteed loans, of 

which—

‘‘(i) $1,000,000,000 shall be for guarantees of farm 

ownership loans under subtitle A; and 

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‘‘(ii) $2,026,000,000 shall be for guarantees of operating loans under subtitle B.’’. 

SEC. 5312. RESERVATION OF FUNDS FOR DIRECT OPERATING LOANS 

FOR BEGINNING FARMERS AND RANCHERS. 

Section 346(b)(2)(A)(ii)(III) of the Consolidated Farm and Rural 

Development Act (7 U.S.C. 1994(b)(2)(A)(ii)(III)) is amended by 

striking ‘‘2000 through 2002’’ and inserting ‘‘2003 through 2007’’. 

SEC. 5313. INTEREST RATE REDUCTION PROGRAM. 

Section 351 of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1999) is amended—

(1) in subsection (a)—

(A) by striking ‘‘PROGRAM.—’’ and all that follows 

through ‘‘The Secretary’’ and inserting ‘‘PROGRAM.—The 

Secretary’’; and 

(B) by striking paragraph (2); and 

(2) in subsection (e), by striking paragraph (2) and inserting the following: 

‘‘(2) MAXIMUM AMOUNT OF FUNDS.—

‘‘(A) IN GENERAL.—The total amount of funds used by 

the Secretary to carry out this section for a fiscal year shall 

not exceed $750,000,000. 

‘‘(B) BEGINNING FARMERS AND RANCHERS.—

‘‘(i) IN GENERAL.—The Secretary shall reserve not 

less than 15 percent of the funds used by the Secretary 

under subparagraph (A) to make payments for guaranteed loans made to beginning farmers and ranchers. 

‘‘(ii) DURATION OF RESERVATION OF FUNDS.—

Funds reserved for beginning farmers or ranchers 

under clause (i) for a fiscal year shall be reserved only 

until March 1 of the fiscal year.’’. 

SEC. 5314. REAMORTIZATION OF RECAPTURE PAYMENTS. 

Section 353(e)(7) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001(e)(7)) is amended by adding at the end the 

following: 

‘‘(D) REAMORTIZATION.—

‘‘(i) IN GENERAL.—The Secretary may modify the 

amortization of a recapture payment referred to in subparagraph (A) of this paragraph on which a payment 

has become delinquent by using loan service tools 

under section 343(b)(3) if—

‘‘(I) the default is due to circumstances beyond 

the control of the borrower; and

‘‘(II) the borrower acted in good faith (as determined by the Secretary) in attempting to repay the 

recapture amount. 

‘‘(ii) LIMITATIONS.—

‘‘(I) TERM OF REAMORTIZATION.—The term of a 

reamortization under this subparagraph may not 

exceed 25 years from the date of the original amortization agreement. 

‘‘(II) NO REDUCTION OR PRINCIPAL OR UNPAID

INTEREST DUE.—A reamortization of a recapture 

payment under this subparagraph may not provide 

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for reducing the outstanding principal or unpaid 

interest due on the recapture payment. 

SEC. 5315. ALLOCATION OF CERTAIN FUNDS FOR SOCIALLY DISADVANTAGED FARMERS AND RANCHERS. 

The last sentence of section 355(c)(2) of the Consolidated Farm 

and Rural Development Act (7 U.S.C. 2003(c)(2)) is amended to 

read as follows: ‘‘Any funds reserved and allocated under this paragraph but not used within a State shall, to the extent necessary to 

satisfy pending applications under this title, be available for use by 

socially disadvantaged farmers and ranchers in other States, as determined by the Secretary, and any remaining funds shall be reallocated within the State.’’. 

SEC. 5316. WAIVER OF BORROWER TRAINING CERTIFICATION REQUIREMENT. 

Section 359 of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 2006a) is amended by striking subsection (f) and inserting the following: 

‘‘(f) WAIVERS.—

‘‘(1) IN GENERAL.—The Secretary may waive the requirements of this section for an individual borrower if the Secretary 

determines that the borrower demonstrates adequate knowledge 

in areas described in this section. 

‘‘(2) CRITERIA.—The Secretary shall establish criteria providing for the application of paragraph (1) consistently in all 

counties nationwide.’’. 

SEC. 5317. TIMING OF LOAN ASSESSMENTS. 

Section 360(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006b(a)) is amended by striking ‘‘After an applicant is determined eligible for assistance under this title by the 

appropriate county committee established pursuant to section 332, 

the’’ and inserting ‘‘The’’. 

SEC. 5318. ANNUAL REVIEW OF BORROWERS. 

Section 360(d)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006b(d)(1)) is amended by striking ‘‘biannual’’

and inserting ‘‘annual’’. 

SEC. 5319. LOAN ELIGIBILITY FOR BORROWERS WITH PRIOR DEBT 

FORGIVENESS. 

Section 373(b)(2)(A) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008h(b)(2)(A)) is amended—

(1) in clause (i), by striking ‘‘or’’; 

(2) in clause (ii), by striking the period and inserting ‘‘; or’’; 

and 

(3) by adding at the end the following: 

‘‘(iii) received debt forgiveness on not more than 1 

occasion resulting directly and primarily from a major 

disaster or emergency designated by the President on 

or after April 4, 1996, under the Robert T. Stafford 

Disaster Relief and Emergency Assistance Act (42 

U.S.C. 5121 et seq.).’’. 

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SEC. 5320. MAKING AND SERVICING OF LOANS BY PERSONNEL OF 

STATE, COUNTY, OR AREA COMMITTEES. 

Subtitle D of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981–2008j) is amended by adding at the end the following: 

‘‘SEC. 376. MAKING AND SERVICING OF LOANS BY PERSONNEL OF 

STATE, COUNTY, OR AREA COMMITTEES. 

‘‘The Secretary shall use personnel of a State, county or area 

committee established under section 8(b)(5) of the Soil Conservation 

and Domestic Allotment Act (16 U.S.C 590h(b)(5)) to make and 

service loans under this title to the extent the personnel have been 

trained to do so.’’. 

SEC. 5321. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA 

COMMITTEE FOR LOANS AND LOAN GUARANTEES. 

Subtitle D of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981–2008j) is further amended by adding at the end 

the following: 

‘‘SEC. 377. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA 

COMMITTEE FOR LOANS AND LOAN GUARANTEES. 

‘‘(a) IN GENERAL.—The Secretary shall not prohibit an employee 

of a State, county or area committee established under section 

8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 

U.S.C. 590h(b)(5)) or an employee of the Department of Agriculture 

from obtaining a loan or loan guarantee under subtitle A, B or C 

of this title. ‘‘(b) APPROVALS.— ‘‘(1) COUNTY OR AREA OFFICE.—In the case of a loan application from an employee in a county or area office, the Farm 

Service Agency State office shall be responsible for reviewing 

and approving the application. ‘‘(2) STATE OFFICE.—In the case of a loan application from 

an employee of a State office, the Farm Service Agency national 

office shall be responsible for reviewing and approving the application.’’. 

Subtitle E—Farm Credit 

SEC. 5401. REPEAL OF BURDENSOME APPROVAL REQUIREMENTS. 

(a) BANKS FOR COOPERATIVES.—Section 3.1(11)(B) of the Farm 

Credit Act of 1971 (12 U.S.C. 2122(11)(B)) is amended— (1) by striking clause (iii); and 

(2) by redesignating clause (iv) as clause (iii). 

(b) OTHER SYSTEM BANKS; ASSOCIATIONS.—Section 4.18A of the 

Farm Credit Act of 1971 (12 U.S.C. 2206a) is amended—

(1) in subsection (a)(1), by striking ‘‘3.1(11)(B)(iv)’’ and inserting ‘‘3.1(11)(B)(iii)’’; and 

(2) by striking subsection (c). 

SEC. 5402. BANKS FOR COOPERATIVES. 

Section 3.7(b) of the Farm Credit Act of 1971 (12 U.S.C. 

2128(b)) is amended—

(1) in paragraphs (1) and (2)(A)(i), by striking ‘‘farm supplies’’ each place it appears and inserting ‘‘agricultural supplies’’; and 

(2) by adding at the end the following: 

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‘‘(4) DEFINITION OF AGRICULTURAL SUPPLY.—In this subsection, the term ‘agricultural supply’ includes— ‘‘(A) a farm supply; and 

‘‘(B)(i) agriculture-related processing equipment; 

‘‘(ii) agriculture-related machinery; and 

‘‘(iii) other capital goods related to the storage or handling of agricultural commodities or products.’’. 

SEC. 5403. INSURANCE CORPORATION PREMIUMS. 

(a) REDUCTION IN PREMIUMS FOR GSE-GUARANTEED LOANS.— (1) IN GENERAL.—Section 5.55 of the Farm Credit Act of 

1971 (12 U.S.C. 2277a–4) is amended— (A) in subsection (a)— (i) in paragraph (1)— (I) in subparagraph (A), by striking ‘‘government-guaranteed loans provided for in subparagraph (C)’’ and inserting ‘‘loans provided for in 

subparagraphs (C) and (D)’’; 

(II) in subparagraph (B), by striking ‘‘and’’ at 

the end; 

(III) in subparagraph (C), by striking the period at the end and inserting ‘‘; and’’; and 

(IV) by adding at the end the following: ‘‘(D) the annual average principal outstanding for such 

year on the guaranteed portions of Government Sponsored 

Enterprise-guaranteed loans made by the bank that are in 

accrual status, multiplied by a factor, not to exceed 0.0015, 

determined by the Corporation at the sole discretion of the 

Corporation.’’; and 

(ii) by adding at the end the following: ‘‘(4) DEFINITION OF GOVERNMENT SPONSORED ENTERPRISE- GUARANTEED LOAN.—In this section and sections 1.12(b) and 

5.56(a), the term ‘Government Sponsored Enterprise-guaranteed 

loan’ means a loan or credit, or portion of a loan or credit, that 

is guaranteed by an entity that is chartered by Congress to 

serve a public purpose and the debt obligations of which are not 

explicitly guaranteed by the United States, including the Federal National Mortgage Association, the Federal Home Loan 

Mortgage Corporation, the Federal Home Loan Bank System, 

and the Federal Agricultural Mortgage Corporation, but not including any other institution of the Farm Credit System.’’; and 

(B) in subsection (e)(4)(B), by striking ‘‘governmentguaranteed loans described in subsection (a)(1)(C)’’ and inserting ‘‘loans described in subparagraph (C) or (D) of subsection (a)(1)’’. 

(2) CONFORMING AMENDMENTS.—

(A) Section 1.12(b) of the Farm Credit Act of 1971 (12 

U.S.C. 2020(b)) is amended—

(i) in paragraph (1), by inserting ‘‘and Government 

Sponsored Enterprise-guaranteed loans (as defined in 

section 5.55(a)(4)) provided for in paragraph (4)’’ after 

‘‘government-guaranteed loans (as defined in section 

5.55(a)(3)) provided for in paragraph (3)’’; 

(ii) in paragraph (2), by striking ‘‘and’’ at the end; 

(iii) in paragraph (3), by striking the period at the 

end and inserting ‘‘; and’’; and 

222

(iv) by adding at the end the following: 

‘‘(4) the annual average principal outstanding for such year 

on the guaranteed portions of Government Sponsored Enterprise-guaranteed loans (as so defined) made by the association, 

or by the other financing institution and funded by or discounted with the Farm Credit Bank, that are in accrual status, 

multiplied by a factor, not to exceed 0.0015, determined by the 

Corporation for the purpose of setting the premium for such 

guaranteed portions of loans under section 5.55(a)(1)(D).’’. 

(B) Section 5.56(a) of the Farm Credit Act of 1971 (12 

U.S.C. 2277a–5(a)) is amended—

(i) in paragraph (1), by inserting ‘‘and Government 

Sponsored Enterprise-guaranteed loans (as defined in 

section 5.55(a)(4))’’ after ‘‘government-guaranteed 

loans’’; 

(ii) by redesignating paragraphs (4) and (5) as 

paragraphs (5) and (6), respectively; and 

(iii) by inserting after paragraph (3) the following: 

‘‘(4) the annual average principal outstanding on the guaranteed portions of Government Sponsored Enterprise-guaranteed loans (as defined in section 5.55(a)(4)) that are in accrual 

status;’’. (b) APPLICABILITY.—The amendments made by this section shall 

apply with respect to determinations of premiums for calendar year 

2002 and for any succeeding calendar year, and to certified statements with respect to such premiums. 

Subtitle F—General Provisions 

SEC. 5501. TECHNICAL AMENDMENTS. 

(a) Section 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)) is amended by striking ‘‘Disaster Relief 

and Emergency Assistance Act’’ each place it appears and inserting 

‘‘Robert T. Stafford Disaster Relief and Emergency Assistance Act 

(42 U.S.C. 5121 et seq.)’’. 

(b) Section 336(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1986(b)) is amended in the second sentence by 

striking ‘‘provided for in section 332 of this title’’. 

(c) Section 359(c)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006a(c)(1)) is amended by striking ‘‘established pursuant to section 332,’’.

TITLE VI—RURAL DEVELOPMENT 

Subtitle A—Consolidated Farm and Rural 

Development Act 

SEC. 6001. ELIGIBILITY OF RURAL EMPOWERMENT ZONES AND RURAL 

ENTERPRISE COMMUNITIES FOR DIRECT AND GUARANTEED LOANS FOR ESSENTIAL COMMUNITY FACILITIES. 

Section 306(a)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the 

first sentence the following: ‘‘The Secretary may also make or insure 

223

loans to communities that have been designated as rural empowerment zones or rural enterprise communities pursuant to part I of 

subchapter U of chapter 1 of the Internal Revenue Code of 1986, or 

as rural enterprise communities pursuant to section 766 of the Agriculture, Rural Development, Food and Drug Administration, and 

Related Agencies Appropriations Act, 1999 (Public Law 105–277; 

112 Stat. 2681, 2681–37), to provide for the installation or improvement of essential community facilities including necessary related 

equipment, and to furnish financial assistance or other aid in planning projects for such purposes.’’. 

SEC. 6002. WATER OR WASTE DISPOSAL GRANTS. 

Section 306(a)(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(2)) is amended—

(1) by striking ‘‘(2) The’’ and inserting the following: 

‘‘(2) WATER, WASTE DISPOSAL, AND WASTEWATER FACILITY

GRANTS.—

‘‘(A) AUTHORITY.—

‘‘(i) IN GENERAL.—The’’; 

(2) by striking ‘‘aggregating not to exceed $590,000,000 in 

any fiscal year’’; 

(3) by striking ‘‘The amount’’ and inserting the following: 

‘‘(ii) AMOUNT.—The amount’’; 

(4) by striking ‘‘paragraph’’ and inserting ‘‘subparagraph’’; 

(5) by striking ‘‘The Secretary shall’’ and inserting the following: 

‘‘(iii) GRANT RATE.—The Secretary shall’’; and 

(6) by adding at the end the following: 

‘‘(B) REVOLVING FUNDS FOR FINANCING WATER AND

WASTEWATER PROJECTS.—

‘‘(i) IN GENERAL.—The Secretary may make grants 

to qualified private, nonprofit entities to capitalize revolving funds for the purpose of providing financing to 

eligible entities for—

‘‘(I) predevelopment costs associated with proposed water and wastewater projects or with existing water and wastewater systems; and 

‘‘(II) short-term costs incurred for replacement 

equipment, small-scale extension services, or other 

small capital projects that are not part of the regular operations and maintenance activities of existing water and wastewater systems. 

‘‘(ii) ELIGIBLE ENTITIES.—To be eligible to obtain 

financing from a revolving fund under clause (i), an eligible entity must be eligible to obtain a loan, loan 

guarantee, or grant under paragraph (1) or this paragraph. 

‘‘(iii) MAXIMUM AMOUNT OF FINANCING.—The 

amount of financing made to an eligible entity under 

this subparagraph shall not exceed—

‘‘(I) $100,000 for costs described in clause 

(i)(I); and 

‘‘(II) $100,000 for costs described in clause 

(i)(II). 

224

‘‘(iv) TERM.—The term of financing provided to an 

eligible entity under this subparagraph shall not exceed 10 years. ‘‘(v) ADMINISTRATION.—The Secretary shall limit 

the amount of grant funds that may be used by a grant 

recipient for administrative costs incurred under this 

subparagraph. ‘‘(vi) ANNUAL REPORT.—A nonprofit entity receiving 

a grant under this subparagraph shall submit to the 

Secretary an annual report that describes the number 

and size of communities served and the type of financing provided. ‘‘(vii) AUTHORIZATION OF APPROPRIATIONS.—There 

are authorized to be appropriated to carry out this subparagraph $30,000,000 for each of fiscal years 2002 

through 2007.’’. 

SEC. 6003. RURAL BUSINESS OPPORTUNITY GRANTS. 

Section 306(a)(11)(D) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(11)(D)) is amended—

(1) by striking ‘‘$7,500,000’’ and inserting ‘‘$15,000,000’’; 

and 

(2) by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 6004. CHILD DAY CARE FACILITIES. 

Section 306(a)(19) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(19)) is amended by adding at the end 

the following: 

‘‘(C) RESERVATION OF FUNDS FOR CHILD DAY CARE FACILITIES.—

‘‘(i) IN GENERAL.—For each fiscal year, not less 

than 10 percent of the funds made available to carry 

out this paragraph shall be reserved for grants to pay 

the Federal share of the cost of developing and constructing day care facilities for children in rural areas. ‘‘(ii) RELEASE.—Funds reserved under clause (i) for 

a fiscal year shall be reserved only until April 1 of the 

fiscal year.’’. 

SEC. 6005. RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM. 

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) is amended by adding at the end the 

following:

‘‘(22) RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM.—

‘‘(A) IN GENERAL.—The Secretary shall establish a national rural water and wastewater circuit rider program 

that is based on the rural water circuit rider program of 

the National Rural Water Association that (as of the date 

of enactment of this paragraph) receives funding from the 

Secretary, acting through the Rural Utilities Service. 

‘‘(B) RELATIONSHIP TO EXISTING PROGRAM.—The program established under subparagraph (A) shall not affect 

the authority of the Secretary to carry out the circuit rider 

program for which funds are made available under the 

heading ‘‘RURAL COMMUNITY ADVANCEMENT PROGRAM’’ in 

225

title III of the Agriculture, Rural Development, Food and 

Drug Administration, and Related Agencies Appropriations 

Act, 2002 (115 Stat. 719). 

‘‘(C) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this paragraph 

$15,000,000 for fiscal year 2003 and each fiscal year thereafter.’’. 

SEC. 6006. MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS. 

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 6005) is amended by adding at the end the following: 

‘‘(23) MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS.—

‘‘(A) GRANTS.—The Secretary shall provide grants to 

multijurisdictional regional planning and development organizations to pay the Federal share of the cost of providing assistance to local governments to improve the infrastructure, services, and business development capabilities of 

local governments and local economic development organizations. 

‘‘(B) PRIORITY.—In determining which organizations 

will receive a grant under this paragraph, the Secretary 

shall give priority to an organization that—

‘‘(i) serves a rural area that, during the most recent 

5-year period—

‘‘(I) had a net out-migration of inhabitants, or 

other population loss, from the rural area that 

equals or exceeds 5 percent of the population of the 

rural area; or 

‘‘(II) had a median household income that is 

less than the nonmetropolitan median household 

income of the applicable State; and 

‘‘(ii) has a history of providing substantive assistance to local governments and economic development 

organizations. 

‘‘(C) FEDERAL SHARE.—A grant provided under this 

paragraph shall be for not more than 75 percent of the cost 

of providing assistance described in subparagraph (A). 

‘‘(D) MAXIMUM AMOUNT OF GRANTS.—The amount of a 

grant provided to an organization under this paragraph 

shall not exceed $100,000. 

‘‘(E) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this paragraph 

$30,000,000 for each of fiscal years 2003 through 2007.’’. 

SEC. 6007. LOAN GUARANTEES FOR CERTAIN RURAL DEVELOPMENT 

LOANS. 

(a) LOAN GUARANTEES FOR WATER, WASTEWATER, AND ESSENTIAL COMMUNITY FACILITIES LOANS.—Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1925(a)) (as 

amended by section 6006) is amended by adding at the end the following: 

‘‘(24) LOAN GUARANTEES FOR WATER, WASTEWATER, AND ESSENTIAL COMMUNITY FACILITIES LOANS.—

226

‘‘(A) IN GENERAL.—The Secretary may guarantee a loan 

made to finance a community facility or water or waste facility project in a rural area, including a loan financed by 

the net proceeds of a bond described in section 142(a) of the 

Internal Revenue Code of 1986. 

‘‘(B) REQUIREMENTS.—To be eligible for a loan guarantee under subparagraph (A), an individual or entity offering to purchase the loan shall demonstrate to the Secretary that the person has—

‘‘(i) the capabilities and resources necessary to 

service the loan in a manner that ensures the continued performance of the loan, as determined by the Secretary; and 

‘‘(ii) the ability to generate capital to provide borrowers of the loan with the additional credit necessary 

to properly service the loan.’’. 

(b) LOAN GUARANTEES FOR CERTAIN LOANS.—Section 310B of 

the Consolidated Farm and Rural Development Act (7 U.S.C. 1932) 

is amended by adding at the end the following: 

‘‘(h) LOAN GUARANTEES FOR CERTAIN LOANS.—The Secretary 

may guarantee loans made under subsection (a) to finance the 

issuance of bonds for the projects described in section 306(a)(24).’’. 

SEC. 6008. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY 

FACILITIES. 

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 6007(a)) is 

amended by adding at the end the following: 

‘‘(25) TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY FACILITIES.—

‘‘(A) IN GENERAL.—The Secretary may make grants to 

tribal colleges and universities (as defined in section 316 of 

the Higher Education Act of 1965 (20 U.S.C. 1059c)) to provide the Federal share of the cost of developing specific tribal college or university essential community facilities in 

rural areas. 

‘‘(B) FEDERAL SHARE.—

‘‘(i) IN GENERAL.—Except as provided in clauses 

(ii) and (iii), the Secretary shall, by regulation, establish the maximum percentage of the cost of the facility 

that may be covered by a grant under this paragraph. 

‘‘(ii) MAXIMUM AMOUNT.—The amount of a grant 

provided under this paragraph for a facility shall not 

exceed 75 percent of the cost of developing the facility. 

‘‘(iii) GRADUATED SCALE.—The Secretary shall provide for a graduated scale of the percentages of the cost 

covered by a grant made under this paragraph that 

provides higher percentages for facilities in communities that have lower community population and income levels, as determined by the Secretary. 

‘‘(C) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this paragraph 

$10,000,000 for each of fiscal years 2003 through 2007.’’. 

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SEC. 6009. EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANT PROGRAM. 

Section 306A of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1926a) is amended—

(1) in the section heading, by inserting ‘‘and imminent’’

after ‘‘emergency’’; 

(2) in subsection (a)—

(A) in paragraph (1), by inserting ‘‘, or when such a decline is imminent’’ before the semicolon at the end; and 

(B) in paragraph (2)—

(i) in subparagraph (A), by striking ‘‘acute’’ and inserting ‘‘acute, or imminent,’’; and 

(ii) in subparagraph (B), by striking ‘‘decline’’ and 

inserting ‘‘decline, or imminent decline,’’; 

(3) in subsection (c)(2), by striking ‘‘occurred’’ and inserting 

‘‘occurred, or will occur,’’; 

(4) in subsection (d), by striking paragraph (1) and inserting the following: 

‘‘(1) IN GENERAL.—Grants made under this section may be 

used—

‘‘(A) for waterline extensions from existing systems, laying of new waterlines, repairs, significant maintenance, 

digging of new wells, equipment replacement, and hook 

and tap fees; 

‘‘(B) for any other appropriate purpose associated with 

developing sources of, treating, storing, or distributing 

water; 

‘‘(C) to assist communities in complying with the requirements of the Federal Water Pollution Control Act (33 

U.S.C. 1251 et seq.) or the Safe Drinking Water Act (42 

U.S.C. 300f et seq.); and 

‘‘(D) to provide potable water to communities through 

other means.’’; 

(5) in subsection (f)(2), by striking ‘‘$75,000’’ and inserting 

‘‘$150,000’’; 

(6) in subsection (h)—

(A) in the second sentence of paragraph (1), by striking 

‘‘decline’’ and inserting ‘‘decline, or imminent decline,’’; and 

(B) by striking paragraph (2) and inserting the following:

‘‘(2) TIMING OF REVIEW OF APPLICATIONS.—

‘‘(A) SIMPLIFIED APPLICATION.—The application process 

developed by the Secretary under paragraph (1) shall include a simplified application form that will permit expedited consideration of an application for a grant filed 

under this section. 

‘‘(B) PRIORITY REVIEW.—In processing applications for 

any water or waste grant or loan authorized under this 

title, the Secretary shall afford priority processing to an application for a grant under this section to the extent funds 

will be available for an award on the application at the 

conclusion of priority processing. 

‘‘(C) TIMING.—The Secretary shall, to the maximum extent practicable, review and act on an application under 

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this section within 60 days after the date on which the application is submitted to the Secretary.’’; and 

(7) by striking subsection (i) and inserting the following: 

‘‘(i) FUNDING.—

‘‘(1) RESERVATION.—

‘‘(A) IN GENERAL.—For each fiscal year, not less than 

3 nor more than 5 percent of the total amount made available to carry out section 306(a)(2) for the fiscal year shall 

be reserved for grants under this section. 

‘‘(B) RELEASE.—Funds reserved under subparagraph 

(A) for a fiscal year shall be reserved only until July 1 of 

the fiscal year. 

‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—In addition to 

funds made available under paragraph (1), there is authorized 

to be appropriated to carry out this section $35,000,000 for each 

of fiscal years 2003 through 2007.’’. 

SEC. 6010. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMERICAN TRIBES. 

Section 306C of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1926c) is amended by striking subsection (e) and inserting the following: 

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—

‘‘(1) IN GENERAL.—Subject to paragraph (2), there are authorized to be appropriated—

‘‘(A) for grants under this section, $30,000,000 for each 

fiscal year; 

‘‘(B) for loans under this section, $30,000,000 for each 

fiscal year; and 

‘‘(C) in addition to grants provided under subparagraph (A), for grants under this section to benefit Indian 

tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), 

$20,000,000 for each fiscal year. 

‘‘(2) EXCEPTION.—An entity eligible to receive funding 

through a grant made under section 306D shall not be eligible 

for a grant from funds made available under paragraph 

(1)(C).’’. 

SEC. 6011. GRANTS FOR WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN ALASKA. 

Section 306D(d)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926d(d)(1)) is amended by striking ‘‘and 

2002’’ and inserting ‘‘through 2007’’. 

SEC. 6012. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE 

CONSTRUCTION, REFURBISHING, AND SERVICING OF INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS 

IN RURAL AREAS FOR INDIVIDUALS WITH LOW OR MODERATE INCOMES. 

(a) IN GENERAL.—The Consolidated Farm and Rural Development Act is amended by inserting after section 306D (7 U.S.C. 

1926d) the following: 

229

‘‘SEC. 306E. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE 

THE CONSTRUCTION, REFURBISHING, AND SERVICING OF 

INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS IN RURAL AREAS FOR INDIVIDUALS WITH LOW OR 

MODERATE INCOMES. 

‘‘(a) DEFINITION OF ELIGIBLE INDIVIDUAL.—In this section, the 

term ‘eligible individual’ means an individual who is a member of 

a household the members of which have a combined income (for the 

most recent 12-month period for which the information is available) 

that is not more than 100 percent of the median nonmetropolitan 

household income for the State or territory in which the individual 

resides, according to the most recent decennial census of the United 

States. 

‘‘(b) GRANTS.—

‘‘(1) IN GENERAL.—The Secretary may make grants to private nonprofit organizations for the purpose of providing loans 

to eligible individuals for the construction, refurbishing, and 

servicing of individual household water well systems in rural 

areas that are or will be owned by the eligible individuals. 

‘‘(2) TERMS OF LOANS.—A loan made with grant funds 

under this section—

‘‘(A) shall have an interest rate of 1 percent; 

‘‘(B) shall have a term not to exceed 20 years; and 

‘‘(C) shall not exceed $8,000 for each water well system 

described in paragraph (1). 

‘‘(3) ADMINISTRATIVE EXPENSES.—A recipient of a grant 

made under this section may use grant funds to pay administrative expenses associated with providing the assistance described in paragraph (1), as determined by the Secretary. 

‘‘(c) PRIORITY IN AWARDING GRANTS.—In awarding grants 

under this section, the Secretary shall give priority to an applicant 

that has substantial expertise and experience in promoting the safe 

and productive use of individually-owned household water well systems and ground water. 

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $10,000,000 for each of 

fiscal years 2003 through 2007.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

takes effect on October 1, 2002. 

SEC. 6013. LOANS AND LOAN GUARANTEES FOR RENEWABLE ENERGY 

SYSTEMS. 

Section 310B(a)(3) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(a)(3)) is amended by inserting ‘‘and other 

renewable energy systems (including wind energy systems and anaerobic digestors for the purpose of energy generation)’’ after ‘‘solar 

energy systems’’. 

SEC. 6014. RURAL BUSINESS ENTERPRISE GRANTS. 

Section 310B(c)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(c)(1)) is amended—

(1) by striking ‘‘(1) IN GENERAL.—The Secretary’’ and inserting the following: 

‘‘(1) GRANTS.—

‘‘(A) IN GENERAL.—The Secretary’’; and 

(2) by adding at the end the following: 

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‘‘(B) SMALL AND EMERGING PRIVATE BUSINESS ENTER- PRISES.—

‘‘(i) IN GENERAL.—For the purpose of subparagraph 

(A), a small and emerging private business enterprise 

shall include (regardless of the number of employees or 

operating capital of the enterprise) an eligible nonprofit 

entity, or other tax-exempt organization, with a principal office in an area that is located— ‘‘(I) on land of an existing or former Native 

American reservation; and ‘‘(II) in a city, town, or unincorporated area 

that has a population of not more than 5,000 inhabitants. 

‘‘(ii) USE OF GRANT.—An eligible nonprofit entity, 

or other tax exempt organization, described in clause (i) 

may use assistance provided under this paragraph to 

create, expand, or operate value-added processing in an 

area described in clause (i) in connection with production agriculture. ‘‘(iii) PRIORITY.—In making grants under this 

paragraph, the Secretary shall give priority to grants 

that will be used to provide assistance to eligible nonprofit entities and other tax exempt organizations described in clause (i).’’. 

SEC. 6015. RURAL COOPERATIVE DEVELOPMENT GRANTS. 

Section 310B(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(e)) is amended—

(1) in paragraph (5)(F), before the period at the end the following: ‘‘, except that the Secretary shall not require non-Federal financial support in an amount that is greater than 5 percent in the case of a 1994 institution (as defined in section 532 

of the Equity in Educational Land-Grant Status Act of 1994 (7 

U.S.C. 301 note; Public Law 103–382))’’; and 

(2) in paragraph (9), by striking ‘‘2002’’ and inserting 

‘‘2007’’.

SEC. 6016. GRANTS TO BROADCASTING SYSTEMS. 

Section 310B(f) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(f)) is amended by adding at the end the 

following: 

‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $5,000,000 

for each of fiscal years 2002 through 2007.’’. 

SEC. 6017. BUSINESS AND INDUSTRY LOAN MODIFICATIONS. 

Section 310B of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1932) is amended by striking subsection (g) and inserting the following: 

‘‘(g) BUSINESS AND INDUSTRY DIRECT AND GUARANTEED

LOANS.—

‘‘(1) DEFINITION OF BUSINESS AND INDUSTRY LOAN.—In this 

subsection, the term ‘business and industry loan’ means a business and industry direct or guaranteed loan that is made or 

guaranteed by the Secretary under subsection (a)(1). 

‘‘(2) LOAN GUARANTEES FOR THE PURCHASE OF COOPERATIVE STOCK.—

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‘‘(A) IN GENERAL.—The Secretary may guarantee a 

business and industry loan to individual farmers or ranchers for the purpose of purchasing capital stock of a farmer 

or rancher cooperative established for the purpose of processing an agricultural commodity. 

‘‘(B) PROCESSING CONTRACTS DURING INITIAL PERIOD.—

A cooperative described in subparagraph (A) for which a 

farmer or rancher receives a guarantee to purchase stock 

under subparagraph (A) may contract for services to process agricultural commodities, or otherwise process valueadded agricultural products, during the 5-year period beginning on the date of the startup of the cooperative in 

order to provide adequate time for the planning and construction of the processing facility of the cooperative. 

‘‘(C) FINANCIAL INFORMATION.—Financial information 

required by the Secretary from a farmer or rancher as a 

condition of making a business and industry loan guarantee under this paragraph shall be provided in the manner generally required by commercial agricultural lenders 

in the area. 

‘‘(3) LOANS TO COOPERATIVES.—

‘‘(A) IN GENERAL.—The Secretary may make or guarantee a business and industry loan to a cooperative organization that is headquartered in a metropolitan area if the 

loan is used for a project or venture described in subsection 

(a) that is located in a rural area or a loan guarantee that 

meets the requirements of paragraph (6). 

‘‘(B) REFINANCING.—A cooperative organization that is 

eligible for a business and industry loan shall be eligible 

to refinance an existing business and industry loan with a 

lender if—

‘‘(i) the cooperative organization—

‘‘(I) is current and performing with respect to 

the existing loan; and 

‘‘(II) is not, and has not been, in payment default, or the collateral of which has not been converted, with respect to the existing loan; and 

‘‘(ii) there is adequate security or full collateral for 

the refinanced loan. 

‘‘(4) LOAN APPRAISALS.—The Secretary may require that 

any appraisal made in connection with a business and industry 

loan be conducted by a specialized appraiser that uses standards that are similar to standards used for similar purposes in 

the private sector, as determined by the Secretary. 

‘‘(5) FEES.—The Secretary may assess a 1-time fee for any 

guaranteed business and industry loan in an amount that does 

not exceed 2 percent of the guaranteed principal portion of the 

loan. 

‘‘(6) LOAN GUARANTEES IN NONRURAL AREAS.—

‘‘(A) IN GENERAL.—The Secretary may guarantee a 

business and industry loan to a cooperative organization 

for a facility that is not located in a rural area if—

‘‘(i) the primary purpose of the loan guarantee is 

for a facility to provide value-added processing for agVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00235 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
232

ricultural producers that are located within 80 miles of 

the facility; 

‘‘(ii) the applicant demonstrates to the Secretary 

that the primary benefit of the loan guarantee will be 

to provide employment for residents of a rural area; 

and 

‘‘(iii) the total amount of business and industry 

loans guaranteed for a fiscal year under this paragraph does not exceed 10 percent of the business and 

industry loans guaranteed for the fiscal year under 

subsection (a)(1). 

‘‘(B) PRINCIPAL AMOUNTS.—The principal amount of a 

business and industry loan guaranteed under this paragraph may not exceed $25,000,000. 

‘‘(7) INTANGIBLE ASSETS.—In determining whether a cooperative organization is eligible for a guaranteed business and industry loan, the Secretary may consider the market value of a 

properly appraised brand name, patent, or trademark of the cooperative. 

‘‘(8) LIMITATIONS ON LOAN GUARANTEES FOR COOPERATIVE

ORGANIZATIONS.—

‘‘(A) PRINCIPAL AMOUNT.—

‘‘(i) IN GENERAL.—Subject to clause (ii), the principal amount of a business and industry loan made to 

a cooperative organization and guaranteed under this 

subsection shall not exceed $40,000,000. 

‘‘(ii) USE.—To be eligible for a guarantee under 

this subsection for a business and industry loan made 

to a cooperative organization, the principal amount of 

the any such loan in excess of $25,000,000 shall be 

used to carry out a project—

‘‘(I) in a rural area; and 

‘‘(II) that provides for the value-added processing of agricultural commodities. 

‘‘(B) APPLICATIONS.—If a cooperative organization submits an application for a guarantee under this subsection 

of a business and industry loan with a principal amount 

that is in excess of $25,000,000, the Secretary—

‘‘(i) shall review and, if appropriate, approve the 

application; and 

‘‘(ii) may not delegate the approval authority. 

‘‘(C) MAXIMUM AMOUNT.—The total amount of business 

and industry loans made to cooperative organizations and 

guaranteed for a fiscal year under this subsection with 

principal amounts that are in excess of $25,000,000 may 

not exceed 10 percent of the business and industry loans 

guaranteed for the fiscal year under subsection (a)(1).’’. 

SEC. 6018. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR 

OTHER PURPOSES. 

Subtitle A of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1921 et seq.) (as amended by section 5006) is amended 

by adding at the end the following: 

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‘‘SEC. 310G. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR 

OTHER PURPOSES. 

‘‘If, after making a loan or a grant described in section 381E(d), 

the Secretary determines that the circumstances under which the 

loan or grant was made have sufficiently changed to make the 

project or activity for which the loan or grant was made available 

no longer appropriate, the Secretary may allow the loan borrower 

or grant recipient to use property (real and personal) purchased or 

improved with the loan or grant funds, or proceeds from the sale 

of property (real and personal) purchased with such funds, for another project or activity that (as determined by the Secretary)—

‘‘(1) will be carried out in the same area as the original 

project or activity; 

‘‘(2) meets the criteria for a loan or a grant described in section 381E(d); and 

‘‘(3) satisfies such additional requirements as are established by the Secretary.’’. 

SEC. 6019. SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES. 

Section 333A of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1983a) (as amended by section 5307) is amended by 

striking subsection (g) and inserting the following: ‘‘(g) SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES.— ‘‘(1) IN GENERAL.—The Secretary shall provide to lenders a 

short, simplified application form for guarantees under this 

title of—‘‘(A) farmer program loans the principal amount of which is $125,000 or less; and ‘‘(B) business and industry guaranteed loans under section 310B(a)(1) the principal amount of which is— ‘‘(i) in the case of a loan guarantee made during fiscal year 2002 or 2003, $400,000 or less; and ‘‘(ii) in the case of a loan guarantee made during 

any subsequent fiscal year— ‘‘(I) $400,000 or less; or

‘‘(II) if the Secretary determines that there is 

not a significant increased risk of a default on the 

loan, $600,000 or less. 

‘‘(2) WATER AND WASTE DISPOSAL GRANTS AND LOANS.—The 

Secretary shall develop an application process that accelerates, 

to the maximum extent practicable, the processing of applications for water and waste disposal grants or direct or guaranteed loans under paragraph (1) or (2) of section 306(a) the grant 

award amount or principal loan amount, respectively, of which 

is $300,000 or less. 

‘‘(3) ADMINISTRATION.—In developing an application under 

this subsection, the Secretary shall—

‘‘(A) consult with commercial and cooperative lenders; 

and 

‘‘(B) ensure that—

‘‘(i) the form can be completed manually or electronically, at the option of the lender; 

‘‘(ii) the form minimizes the documentation required to accompany the form; 

‘‘(iii) the cost of completing and processing the 

form is minimal; and 

234

‘‘(iv) the form can be completed and processed in 

an expeditious manner.’’. 

SEC. 6020. DEFINITION OF RURAL AND RURAL AREA. 

(a) IN GENERAL.—Section 343(a) of the Consolidated Farm and 

Rural Development Act (7 U.S.C. 1991(a)) is amended by adding at 

the end the following: ‘‘(13) RURAL AND RURAL AREA.— ‘‘(A) IN GENERAL.—Except as otherwise provided in this 

paragraph, the terms ‘rural’ and ‘rural area’ mean any 

area other than— ‘‘(i) a city or town that has a population of greater 

than 50,000 inhabitants; and ‘‘(ii) the urbanized area contiguous and adjacent to 

such a city or town. 

‘‘(B) WATER AND WASTE DISPOSAL GRANTS AND DIRECT

AND GUARANTEED LOANS.—For the purpose of water and 

waste disposal grants and direct and guaranteed loans provided under paragraphs (1), (2), and (24) of section 306(a), 

the terms ‘rural’ and ‘rural area’ mean a city, town, or unincorporated area that has a population of no more than 

10,000 inhabitants. ‘‘(C) COMMUNITY FACILITY LOANS AND GRANTS.—For 

the purpose of community facility direct and guaranteed 

loans and grants under paragraphs (1), (19), (20), (21), and 

(24) of section 306(a), the terms ‘rural’ and ‘rural area’ mean a city, town, or unincorporated area that has a population of not more than 20,000 inhabitants. ‘‘(D) MULTIJURISDICTIONAL REGIONAL PLANNING ORGA- NIZATIONS; NATIONAL RURAL DEVELOPMENT PARTNERSHIP.— In sections 306(a)(23) and 378, the term ‘rural area’ means—‘‘(i) all the territory of a State that is not within 

the boundary of any standard metropolitan statistical 

area; and ‘‘(ii) all territory within any standard metropolitan 

statistical area within a census tract having a population density of less than 20 persons per square mile, 

as determined by the Secretary according to the most 

recent census of the United States as of any date. 

‘‘(E) RURAL BUSINESS INVESTMENT PROGRAM.—In subtitle H, the term ‘rural area’ means an area that is located—

‘‘(i) outside a standard metropolitan statistical 

area; or 

‘‘(ii) within a community that has a population of 

50,000 inhabitants or less.’’. 

(b) CONFORMING AMENDMENTS.—

(1) Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) is amended by striking paragraph (7). 

(2) Section 381A of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009) is amended—

(A) by striking paragraph (1); and 

(B) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively. 

235

(3) Section 735 of the Agriculture, Rural Development, Food 

and Drug Administration, and Related Agencies Appropriations 

Act, 1999 (112 Stat. 2681–29) is repealed. 

SEC. 6021. NATIONAL RURAL DEVELOPMENT PARTNERSHIP. 

Subtitle D of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981 et seq.) (as amended by section 5321) is amended 

by adding at the end the following: 

‘‘SEC. 378. NATIONAL RURAL DEVELOPMENT PARTNERSHIP. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) AGENCY WITH RURAL RESPONSIBILITIES.—The term 

‘agency with rural responsibilities’ means any executive agency 

(as defined in section 105 of title 5, United States Code) that 

implements a Federal law, or administers a program, targeted 

at or having a significant impact on rural areas. 

‘‘(2) COORDINATING COMMITTEE.—The term ‘Coordinating 

Committee’ means the National Rural Development Coordinating Committee established by subsection (c). 

‘‘(3) PARTNERSHIP.—The term ‘Partnership’ means the National Rural Development Partnership continued by subsection 

(b). 

‘‘(4) STATE RURAL DEVELOPMENT COUNCIL.—The term ‘State 

rural development council’ means a State rural development 

council that meets the requirements of subsection (d). 

‘‘(b) PARTNERSHIP.—

‘‘(1) IN GENERAL.—The Secretary shall continue the National Rural Development Partnership composed of—

‘‘(A) the Coordinating Committee; and 

‘‘(B) State rural development councils. 

‘‘(2) PURPOSES.—The purposes of the Partnership are to empower and build the capacity of States and rural communities 

to design flexible and innovative responses to their own special 

rural development needs, with local determinations of progress 

and selection of projects and activities. 

‘‘(3) GOVERNING PANEL.—

‘‘(A) IN GENERAL.—A panel consisting of representatives 

of the Coordinating Committee and State rural development councils shall be established to lead and coordinate 

the strategic operation, policies, and practices of the Partnership. 

‘‘(B) ANNUAL REPORTS.—In conjunction with the Coordinating Committee and State rural development councils, the panel shall prepare and submit to Congress an annual report on the activities of the Partnership. 

‘‘(4) ROLE OF FEDERAL GOVERNMENT.—The role of the Federal Government in the Partnership may be that of a partner 

and facilitator, with Federal agencies authorized—

‘‘(A) to cooperate with States to implement the Partnership; 

‘‘(B) to provide States with the technical and administrative support necessary to plan and implement tailored 

rural development strategies to meet local needs; 

‘‘(C) to ensure that the head of each agency with rural 

responsibilities designates a senior-level agency official to 

represent the agency on the Coordinating Committee and 

236

directs appropriate field staff to participate fully with the 

State rural development council within the jurisdiction of 

the field staff; and 

‘‘(D) to enter into cooperative agreements with, and to 

provide grants and other assistance to, the Coordinating 

Committee and State rural development councils. 

‘‘(c) NATIONAL RURAL DEVELOPMENT COORDINATING COMMITTEE.—

‘‘(1) ESTABLISHMENT.—The Secretary shall establish a National Rural Development Coordinating Committee within the 

Department of Agriculture. 

‘‘(2) COMPOSITION.—The Coordinating Committee shall be 

composed of—

‘‘(A) 1 representative of each agency with rural responsibilities; and 

‘‘(B) representatives, approved by the Secretary, of—

‘‘(i) national associations of State, regional, local, 

and tribal governments and intergovernmental and 

multijurisdictional agencies and organizations; 

‘‘(ii) national public interest groups; 

‘‘(iii) other national nonprofit organizations that 

elect to participate in the activities of the Coordinating 

Committee; and 

‘‘(iv) the private sector. 

‘‘(3) DUTIES.—The Coordinating Committee shall—

‘‘(A) support the work of the State rural development 

councils;

‘‘(B) facilitate coordination of rural development policies, programs, and activities among Federal agencies and 

with those of State, local, and tribal governments, the private sector, and nonprofit organizations; 

‘‘(C) review and comment on policies, regulations, and 

proposed legislation that affect or would affect rural areas 

and gather and provide related information; 

‘‘(D) develop and facilitate strategies to reduce or eliminate administrative and regulatory impediments; and 

‘‘(E) require each State rural development council receiving funds under this section to submit an annual report 

on the use of the funds, including a description of strategic 

plans, goals, performance measures, and outcomes for the 

State rural development council of the State. 

‘‘(4) FEDERAL PARTICIPATION IN COORDINATING COMMITTEE.—

‘‘(A) IN GENERAL.—A Federal employee shall fully participate in the governance and operations of the Coordinating Committee, including activities related to grants, 

contracts, and other agreements, in accordance with this 

section. 

‘‘(B) CONFLICTS.—Participation by a Federal employee 

in the Coordinating Committee in accordance with this 

paragraph shall not constitute a violation of section 205 or 

208 of title 18, United States Code. 

‘‘(5) ADMINISTRATIVE SUPPORT.—The Secretary may provide 

such administrative support for the Coordinating Committee as 

237

the Secretary determines is necessary to carry out the duties of 

the Coordinating Committee. 

‘‘(6) PROCEDURES.—The Secretary may prescribe such regulations, bylaws, or other procedures as are necessary for the operation of the Coordinating Committee. 

‘‘(d) STATE RURAL DEVELOPMENT COUNCILS.—

‘‘(1) ESTABLISHMENT.—Notwithstanding chapter 63 of title 

31, United States Code, each State may elect to participate in 

the Partnership by entering into an agreement with the Secretary to recognize a State rural development council. 

‘‘(2) COMPOSITION.—A State rural development council 

shall—

‘‘(A) be composed of representatives of Federal, State, 

local, and tribal governments, nonprofit organizations, regional organizations, the private sector, and other entities 

committed to rural advancement; and 

‘‘(B) have a nonpartisan and nondiscriminatory membership that—

‘‘(i) is broad and representative of the economic, social, and political diversity of the State; and 

‘‘(ii) shall be responsible for the governance and 

operations of the State rural development council. 

‘‘(3) DUTIES.—A State rural development council shall—

‘‘(A) facilitate collaboration among Federal, State, 

local, and tribal governments and the private and nonprofit 

sectors in the planning and implementation of programs 

and policies that have an impact on rural areas of the 

State; 

‘‘(B) monitor, report, and comment on policies and programs that address, or fail to address, the needs of the 

rural areas of the State; 

‘‘(C) as part of the Partnership, in conjunction with the 

Coordinating Committee, facilitate the development of 

strategies to reduce or eliminate conflicting or duplicative 

administrative or regulatory requirements of Federal, State, 

local, and tribal governments; and 

‘‘(D)(i) provide to the Coordinating Committee an annual plan with goals and performance measures; and 

‘‘(ii) submit to the Coordinating Committee an annual 

report on the progress of the State rural development council in meeting the goals and measures. 

‘‘(4) FEDERAL PARTICIPATION IN STATE RURAL DEVELOPMENT

COUNCILS.—

‘‘(A) IN GENERAL.—A State Director for Rural Development of the Department of Agriculture, other employees of 

the Department, and employees of other Federal agencies 

with rural responsibilities shall fully participate as voting 

members in the governance and operations of State rural 

development councils (including activities related to grants, 

contracts, and other agreements in accordance with this 

section) on an equal basis with other members of the State 

rural development councils. 

‘‘(B) CONFLICTS.—Participation by a Federal employee 

in a State rural development council in accordance with 

238

this paragraph shall not constitute a violation of section 

205 or 208 of title 18, United States Code. ‘‘(e) ADMINISTRATIVE SUPPORT OF THE PARTNERSHIP.— ‘‘(1) DETAIL OF EMPLOYEES.— ‘‘(A) IN GENERAL.—In order to provide experience in 

intergovernmental collaboration, the head of an agency 

with rural responsibilities that elects to participate in the 

Partnership may, and is encouraged to, detail to the Secretary for the support of the Partnership 1 or more employees of the agency with rural responsibilities without reimbursement for a period of up to 1 year. ‘‘(B) CIVIL SERVICE STATUS.—The detail shall be without interruption or loss of civil service status or privilege. 

‘‘(2) ADDITIONAL SUPPORT.—The Secretary may provide for 

any additional support staff to the Partnership as the Secretary 

determines to be necessary to carry out the duties of the Partnership. ‘‘(3) INTERMEDIARIES.—The Secretary may enter into a contract with a qualified intermediary under which the intermediary shall be responsible for providing administrative and 

technical assistance to a State rural development council, including administering the financial assistance available to the 

State rural development council. 

‘‘(f) MATCHING REQUIREMENTS FOR STATE RURAL DEVELOP- MENT COUNCILS.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), a 

State rural development council shall provide matching funds, 

or in-kind goods or services, to support the activities of the State 

rural development council in an amount that is not less than 

33 percent of the amount of Federal funds received from a Federal agency under subsection (g)(2). ‘‘(2) EXCEPTIONS TO MATCHING REQUIREMENT FOR CERTAIN

FEDERAL FUNDS.—Paragraph (1) shall not apply to funds, 

grants, funds provided under contracts or cooperative agreements, gifts, contributions, or technical assistance received by a 

State rural development council from a Federal agency that are 

used—

‘‘(A) to support 1 or more specific program or project 

activities; or 

‘‘(B) to reimburse the State rural development council 

for services provided to the Federal agency providing the 

funds, grants, funds provided under contracts or cooperative agreements, gifts, contributions, or technical assistance. 

‘‘(3) DEPARTMENT’S SHARE.—The Secretary shall develop a 

plan to decrease, over time, the share of the Department of Agriculture of the cost of the core operations of State rural development councils. 

‘‘(g) FUNDING.—

‘‘(1) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this section $10,000,000 for 

each of fiscal years 2003 through 2007. ‘‘(2) FEDERAL AGENCIES.— ‘‘(A) IN GENERAL.—Notwithstanding any other provision of law limiting the ability of an agency, along with 

other agencies, to provide funds to the Coordinating ComVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00242 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
239

mittee or a State rural development council in order to 

carry out the purposes of this section, a Federal agency may 

make grants, gifts, or contributions to, provide technical assistance to, or enter into contracts or cooperative agreements with, the Coordinating Committee or a State rural 

development council. 

‘‘(B) ASSISTANCE.—Federal agencies are encouraged to 

use funds made available for programs that have an impact on rural areas to provide assistance to, and enter into 

contracts with, the Coordinating Committee or a State 

rural development council, as described in subparagraph 

(A). 

‘‘(3) CONTRIBUTIONS.—The Coordinating Committee and a 

State rural development council may accept private contributions. 

‘‘(h) TERMINATION.—The authority provided under this section 

shall terminate on the date that is 5 years after the date of enactment of this section.’’. 

SEC. 6022. RURAL TELEWORK. 

Subtitle D of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981 et seq.) (as amended by section 6021) is amended 

by adding at the end the following:

‘‘SEC. 379. RURAL TELEWORK. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) ELIGIBLE ORGANIZATION.—The term ‘eligible organization’ means a nonprofit entity, an educational institution, an 

Indian tribe (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)), or 

any other organization, in a rural area (except for the institute), 

that meets the requirements of this section and such other requirements as are established by the Secretary. 

‘‘(2) INSTITUTE.—The term ‘institute’ means a rural 

telework institute established using a grant under subsection 

(b). 

‘‘(3) TELEWORK.—The term ‘telework’ means the use of telecommunications to perform work functions at a rural work center located outside the place of business of an employer. 

‘‘(b) RURAL TELEWORK INSTITUTE.—

‘‘(1) IN GENERAL.—The Secretary shall make 1 or more 

grants to an eligible organization to pay the Federal share of 

the cost of establishing and operating a national rural telework 

institute to carry out projects described in paragraph (2). 

‘‘(2) PROJECTS.—The institute shall use grant funds received under this subsection to carry out a 5-year project—

‘‘(A) to serve as a clearinghouse for telework research 

and development; 

‘‘(B) to conduct outreach to rural communities and 

rural workers; ‘‘(C) to develop and share best practices in rural 

telework throughout the United States; ‘‘(D) to develop innovative, market-driven telework 

projects and joint ventures with the private sector that employ workers in rural areas in jobs that promote economic 

self-sufficiency; 

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‘‘(E) to share information about the design and implementation of telework arrangements; ‘‘(F) to support private sector businesses that are 

transitioning to telework; ‘‘(G) to support and assist telework projects and individuals at the State and local level; and ‘‘(H) to perform such other functions as the Secretary 

considers appropriate. 

‘‘(3) NON-FEDERAL SHARE.— ‘‘(A) IN GENERAL.—As a condition of receiving a grant 

under this subsection, an eligible organization shall agree 

to obtain, after the application of the eligible organization 

has been approved and notice of award has been issued, 

contributions from non-Federal sources that are equal to— ‘‘(i) during each of the first, second, and third 

years of a project, 30 percent of the amount of the 

grant; and ‘‘(ii) during each of the fourth and fifth years of the 

project, 50 percent of the amount of the grant. 

‘‘(B) INDIAN TRIBES.—Notwithstanding subparagraph 

(A), an Indian tribe may use any Federal funds made 

available to the Indian tribe for self-governance to pay the 

non-Federal contributions required under subparagraph 

(A). ‘‘(C) FORM.—The non-Federal contributions required 

under subparagraph (A) may be in the form of in-kind contributions, including office equipment, office space, computer software, consultant services, computer networking 

equipment, and related services. ‘‘(c) TELEWORK GRANTS.— ‘‘(1) IN GENERAL.—Subject to paragraphs (2) through (5), 

the Secretary shall make grants to eligible organizations to pay 

the Federal share of the cost of— ‘‘(A) obtaining equipment and facilities to establish or 

expand telework locations in rural areas; and 

‘‘(B) operating telework locations in rural areas. 

‘‘(2) APPLICATIONS.—To be eligible to receive a grant under 

this subsection, an eligible organization shall submit to the Secretary, and receive the approval of the Secretary of, an application for the grant that demonstrates that the eligible organization has adequate resources and capabilities to establish or expand a telework location in a rural area. ‘‘(3) NON-FEDERAL SHARE.—

‘‘(A) IN GENERAL.—As a condition of receiving a grant 

under this subsection, an eligible organization shall agree 

to obtain, after the application of the eligible organization 

has been approved and notice of award has been issued, 

contributions from non-Federal sources that are equal to 50 

percent of the amount of the grant. ‘‘(B) INDIAN TRIBES.—Notwithstanding subparagraph 

(A), an Indian tribe may use Federal funds made available 

to the tribe for self-governance to pay the non-Federal contributions required under subparagraph (A). ‘‘(C) SOURCES.—The non-Federal contributions required under subparagraph (A)—

241

‘‘(i) may be in the form of in-kind contributions, including office equipment, office space, computer software, consultant services, computer networking equipment, and related services; and 

‘‘(ii) may not be made from funds made available 

for community development block grants under title I 

of the Housing and Community Development Act of 

1974 (42 U.S.C. 5301 et seq.). 

‘‘(4) DURATION.—The Secretary may not provide a grant 

under this subsection to expand or operate a telework location 

in a rural area after the date that is 3 years after the establishment of the telework location. 

‘‘(5) AMOUNT.—The amount of a grant provided to an eligible organization under this subsection shall be not less than 

$1,000,000 and not more than $2,000,000. 

‘‘(d) APPLICABILITY OF CERTAIN FEDERAL LAW.—An eligible organization that receives funds under this section shall be subject to 

the provisions of Federal law (including regulations) administered 

by the Secretary of Labor or the Equal Employment Opportunity 

Commission that govern the responsibilities of employers to employees. 

‘‘(e) REGULATIONS.—Not later than 180 days after the date of 

enactment of this section, the Secretary shall promulgate regulations 

to carry out this section. 

‘‘(f) AUTHORIZATION OF APPROPRIATION.—There is authorized to 

be appropriated to carry out this section $30,000,000 for each of fiscal years 2002 through 2007, of which $5,000,000 shall be provided 

to establish and support an institute under subsection (b).’’. 

SEC. 6023. HISTORIC BARN PRESERVATION. 

Subtitle D of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981 et seq.) (as amended by section 6022) is amended 

by adding at the end the following: 

‘‘SEC. 379A. HISTORIC BARN PRESERVATION. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) BARN.—The term ‘barn’ means a building (other than 

a dwelling) on a farm, ranch, or other agricultural operation 

for—

‘‘(A) housing animals; 

‘‘(B) storing or processing crops; 

‘‘(C) storing and maintaining agricultural equipment; 

or 

‘‘(D) serving an essential or useful purpose related to 

agricultural activities conducted on the adjacent land. 

‘‘(2) ELIGIBLE APPLICANT.—The term ‘eligible applicant’

means—

‘‘(A) a State department of agriculture (or a designee); 

‘‘(B) a national or State nonprofit organization that—

‘‘(i) is described in section 501(c)(3) of the Internal 

Revenue Code of 1986 and exempt from taxation under 

section 501(a) of such Code; and 

‘‘(ii) has experience or expertise, as determined by 

the Secretary, in the identification, evaluation, rehabilitation, preservation, or protection of historic barns; 

and 

242

‘‘(C) a State historic preservation office. 

‘‘(3) HISTORIC BARN.—The term ‘historic barn’ means a 

barn that—

‘‘(A) is at least 50 years old; 

‘‘(B) retains sufficient integrity of design, materials, 

and construction to clearly identify the barn as an agricultural building; and 

‘‘(C) meets the criteria for listing on National, State, or 

local registers or inventories of historic structures. 

‘‘(4) SECRETARY.—The term ‘Secretary’ means the Secretary, 

acting through the Under Secretary of Rural Development. 

‘‘(b) PROGRAM.—The Secretary shall establish a historic barn 

preservation program—

‘‘(1) to assist States in developing a list of historic barns; 

‘‘(2) to collect and disseminate information on historic 

barns; 

‘‘(3) to foster educational programs relating to the history, 

construction techniques, rehabilitation, and contribution to society of historic barns; and 

‘‘(4) to sponsor and conduct research on—

‘‘(A) the history of barns; and 

‘‘(B) best practices to protect and rehabilitate historic 

barns from the effects of decay, fire, arson, and natural disasters. 

‘‘(c) GRANTS.—

‘‘(1) IN GENERAL.—The Secretary may make grants to, or 

enter into contracts or cooperative agreements with, eligible applicants to carry out an eligible project under paragraph (2). 

‘‘(2) ELIGIBLE PROJECTS.—A grant under this subsection 

may be made to an eligible applicant for a project—

‘‘(A) to rehabilitate or repair a historic barn; 

‘‘(B) to preserve a historic barn through—

‘‘(i) the installation of a fire protection system, including fireproofing or fire detection system and sprinklers; and 

‘‘(ii) the installation of a system to prevent vandalism; and 

‘‘(C) to identify, document, and conduct research on a 

historic barn to develop and evaluate appropriate techniques or best practices for protecting historic barns. 

‘‘(3) REQUIREMENTS.—An eligible applicant that receives a 

grant for a project under this subsection shall comply with any 

standards established by the Secretary of the Interior for historic preservation projects. ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry 

out this section for each of fiscal years 2002 through 2007.’’. 

SEC. 6024. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS. 

Subtitle D of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981 et seq.) (as amended by section 6023)) is amended by adding at the end the following: 

‘‘SEC. 379B. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS. 

‘‘(a) IN GENERAL.—The Secretary, acting through the Administrator of the Rural Utilities Service, may make grants to public and 

243

nonprofit entities, and borrowers of loans made by the Rural Utilities Service, for the Federal share of the cost of acquiring radio 

transmitters to increase coverage of rural areas by the all hazards 

weather radio broadcast system of the National Oceanic and Atmospheric Administration. ‘‘(b) ELIGIBILITY.—To be eligible for a grant under this section, 

an applicant shall provide to the Secretary— ‘‘(1) a binding commitment from a tower owner to place the 

transmitter on a tower; and ‘‘(2) a description of how the tower placement will increase 

coverage of a rural area by the all hazards weather radio 

broadcast system of the National Oceanic and Atmospheric Administration. 

‘‘(c) FEDERAL SHARE.—A grant provided under this section shall 

be not more than 75 percent of the total cost of acquiring a radio 

transmitter, as described in subsection (a). ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry out this 

section for each of fiscal years 2002 through 2007.’’. 

SEC. 6025. GRANTS TO TRAIN FARM WORKERS IN NEW TECHNOLOGIES 

AND TO TRAIN FARM WORKERS IN SPECIALIZED SKILLS 

NECESSARY FOR HIGHER VALUE CROPS. 

Subtitle D of the Consolidated Farm and Rural Development 

Act (7 U.S.C. 1981 et seq.) (as amended by section 6024) is amended 

by adding at the end the following: 

‘‘SEC. 379C. GRANTS TO TRAIN FARM WORKERS IN NEW TECHNOLOGIES AND TO TRAIN FARM WORKERS IN SPECIALIZED SKILLS NECESSARY FOR HIGHER VALUE CROPS. 

‘‘(a) IN GENERAL.—The Secretary shall make grants to nonprofit 

organizations, or to a consortium of nonprofit organizations, agribusinesses, State and local governments, agricultural labor organizations, farmer or rancher cooperatives, and community-based organizations with the capacity to train farm workers. ‘‘(b) USE OF FUNDS.—An entity to which a grant is made under 

this section shall use the grant to train farm workers to use new 

technologies and develop specialized skills for agricultural development. ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $10,000,000 for each of 

fiscal years 2002 through 2007.’’. 

SEC. 6026. RURAL COMMUNITY ADVANCEMENT PROGRAM. 

(a) NATIONAL RESERVE PROGRAM.—Section 381E of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009d) is amended—

(1) in subsection (b)—

(A) by striking paragraph (4); and 

(B) by redesignating paragraph (5) as paragraph (4); 

(2) by striking subsection (e); 

(3) by redesignating subsections (f) through (h) as subsections (e) through (g), respectively; and 

(4) in subsection (g) (as so redesignated), by striking ‘‘subsection (g) of this section’’ and inserting ‘‘subsection (f)’’. 

(b) RURAL VENTURE CAPITAL DEMONSTRATION PROGRAM.—Section 381O of the Consolidated Farm and Rural Development Act (7 

U.S.C. 2009n) is repealed. 

244

(c) CONFORMING AMENDMENTS.—Section 381G of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009f(a)) is 

amended—

(1) in subsection (a), by striking ‘‘section 381E(g)’’ each 

place it appears and inserting ‘‘section 381E(f)’’; and 

(2) in subsection (b)(1), by striking ‘‘section 381E(h)’’ and 

inserting ‘‘section 381E(g)’’. 

SEC. 6027. DELTA REGIONAL AUTHORITY. 

(a) VOTING.—Section 382B(c) of the Consolidated Farm and 

Rural Development Act (7 U.S.C. 2009aa–1(c)) is amended by striking paragraph (1) and inserting the following: 

‘‘(1) IN GENERAL.—

‘‘(A) TEMPORARY METHOD.—During the period beginning on the date of enactment of this subparagraph and 

ending on December 31, 2004, a decision by the Authority 

shall require the affirmative vote of the Federal cochairperson and a majority of the State members (not including 

any member representing a State that is delinquent under 

subsection (g)(2)(C)) to be effective. 

‘‘(B) PERMANENT METHOD.—Effective beginning on 

January 1, 2005, a decision by the Authority shall require 

a majority vote of the Authority (not including any member 

representing a State that is delinquent under subsection 

(g)(2)(C)) to be effective.’’. 

(b) AUTHORITY TO ISSUE REGULATIONS.—Section 382B(e)(4) of 

the Consolidated Farm and Rural Development Act (7 U.S.C. 

2009aa–1(e)(4)) is amended by striking ‘‘and rules’’ and inserting ‘‘, 

rules, and regulations’’. 

(c) ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.—Section 382C(b) of the Consolidated Farm and Rural Development Act 

(7 U.S.C. 2009aa–2(b)) is amended by striking paragraph (3). 

(d) SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.—Section 

382D of the Consolidated Farm and Rural Development Act (7 

U.S.C. 2009aa–3) is amended to read as follows: 

‘‘SEC. 382D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS. 

‘‘(a) FINDING.—Congress finds that certain States and local 

communities of the region, including local development districts, 

may be unable to take maximum advantage of Federal grant programs for which the States and communities are eligible because—

‘‘(1) the States or communities lack the economic resources 

to provide the required matching share; or 

‘‘(2) there are insufficient funds available under the applicable Federal law authorizing the Federal grant program to 

meet pressing needs of the region. 

‘‘(b) FEDERAL GRANT PROGRAM FUNDING.—Notwithstanding 

any provision of law limiting the Federal share, the areas eligible 

for assistance, or the authorizations of appropriations of any Federal grant program, and in accordance with subsection (c), the Authority, with the approval of the Federal cochairperson and with respect to a project to be carried out in the region—

‘‘(1) may increase the Federal share of the costs of a project 

under the Federal grant program to not more than 90 percent 

(except as provided in section 382F(b)); and 

245

‘‘(2) shall use amounts made available to carry out this 

subtitle to pay the increased Federal share. 

‘‘(c) CERTIFICATIONS.— ‘‘(1) IN GENERAL.—In the case of any project for which all 

or any portion of the basic Federal share of the costs of the 

project is proposed to be paid under this section, no Federal 

contribution shall be made until the Federal official administering the Federal law that authorizes the Federal grant program certifies that the project— ‘‘(A) meets (except as provided in subsection (b)) the applicable requirements of the applicable Federal grant program; and ‘‘(B) could be approved for Federal contribution under 

the Federal grant program if funds were available under 

the law for the project. 

‘‘(2) CERTIFICATION BY AUTHORITY.— ‘‘(A) IN GENERAL.—The certifications and determinations required to be made by the Authority for approval of 

projects under this Act in accordance with section 382I— ‘‘(i) shall be controlling; and 

‘‘(ii) shall be accepted by the Federal agencies. 

‘‘(B) ACCEPTANCE BY FEDERAL COCHAIRPERSON.—In the 

case of any project described in paragraph (1), any finding, 

report, certification, or documentation required to be submitted with respect to the project to the head of the department, agency, or instrumentality of the Federal Government 

responsible for the administration of the Federal grant program under which the project is carried out shall be accepted by the Federal cochairperson.’’. 

(e) GRANTS TO LOCAL DEVELOPMENT AGENCIES.—Section 

382E(b)(1) of the Consolidated Farm and Rural Development Act (7 

U.S.C. 2009aa–4(b)(1)) is amended by striking ‘‘may’’ and inserting 

‘‘shall’’. (f) APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.—Section 

382I of the Consolidated Farm and Rural Development Act (7 

U.S.C. 2009aa–8) is amended— (1) in subsection (a), by inserting ‘‘and approved’’ after ‘‘reviewed’’; and 

(2) in subsection (d), by striking ‘‘VOTES FOR DECISIONS.—’’

and inserting ‘‘APPROVAL OF GRANT APPLICATIONS.—’’. (g) AUTHORIZATION OF APPROPRIATIONS.—Section 382M(a) of 

the Consolidated Farm and Rural Development Act (7 U.S.C. 

2009aa–12(a)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. (h) TERMINATION OF AUTHORITY.—Section 382N of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa–13) is 

amended by striking ‘‘2002’’ and inserting ‘‘2007’’. (i) DELTA REGION AGRICULTURAL ECONOMIC DEVELOPMENT.— Subtitle D of the Consolidated Farm and Rural Development Act (7 

U.S.C. 1981 et seq.) (as amended by section 6025) is amended by 

adding at the end the following: 

‘‘SEC. 379D. DELTA REGION AGRICULTURAL ECONOMIC DEVELOPMENT. 

‘‘(a) IN GENERAL.—The Secretary may make grants to assist in 

the development of state-of-the-art technology in animal nutrition 

(including research and development of the technology) and valueVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00249 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
246

added manufacturing to promote an economic platform for the 

Delta region (as defined in section 382A) to relieve severe economic 

conditions. 

‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this section $7,000,000 for each of 

fiscal years 2002 through 2007.’’. 

(j) DEFINITION OF LOWER MISSISSIPPI.—Section 4(2)(I) of the 

Delta Development Act (42 U.S.C. 3121 note; Public Law 100–460) 

is amended by inserting ‘‘Butler, Conecuh, Escambia, Monroe,’’ after 

‘‘Russell,’’. 

SEC. 6028. NORTHERN GREAT PLAINS REGIONAL AUTHORITY. 

The Consolidated Farm and Rural Development Act (7 U.S.C. 

1921 et seq.) is amended by adding at the end the following: 

‘‘Subtitle G—Northern Great Plains 

Regional Authority 

‘‘SEC. 383A. DEFINITIONS. 

‘‘In this subtitle: 

‘‘(1) AUTHORITY.—The term ‘Authority’ means the Northern 

Great Plains Regional Authority established by section 383B. 

‘‘(2) FEDERAL GRANT PROGRAM.—The term ‘Federal grant 

program’ means a Federal grant program to provide assistance 

in—

‘‘(A) implementing the recommendations of the Northern Great Plains Rural Development Commission established by the Northern Great Plains Rural Development Act 

(7 U.S.C. 2661 note; Public Law 103–318); 

‘‘(B) acquiring or developing land; 

‘‘(C) constructing or equipping a highway, road, bridge, 

or facility; 

‘‘(D) carrying out other economic development activities; or 

‘‘(E) conducting research activities related to the activities described in subparagraphs (A) through (D). 

‘‘(3) INDIAN TRIBE.—The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination 

and Education Assistance Act (25 U.S.C. 450b). 

‘‘(4) REGION.—The term ‘region’ means the States of Iowa, 

Minnesota, Nebraska, North Dakota, and South Dakota. 

‘‘SEC. 383B. NORTHERN GREAT PLAINS REGIONAL AUTHORITY. 

‘‘(a) ESTABLISHMENT.—

‘‘(1) IN GENERAL.—There is established the Northern Great 

Plains Regional Authority. 

‘‘(2) COMPOSITION.—The Authority shall be composed of—

‘‘(A) a Federal member, to be appointed by the President, by and with the advice and consent of the Senate; 

‘‘(B) the Governor (or a designee of the Governor) of 

each State in the region that elects to participate in the Authority; and 

‘‘(C) a member of an Indian tribe, who shall be a chairperson of an Indian tribe in the region or a designee of 

247

such a chairperson, to be appointed by the President, by 

and with the advice and consent of the Senate. 

‘‘(3) COCHAIRPERSONS.—The Authority shall be headed by—

‘‘(A) the Federal member, who shall serve—

‘‘(i) as the Federal cochairperson; and 

‘‘(ii) as a liaison between the Federal Government 

and the Authority; 

‘‘(B) a State cochairperson, who—

‘‘(i) shall be a Governor of a participating State in 

the region; and 

‘‘(ii) shall be elected by the State members for a 

term of not less than 1 year; and 

‘‘(C) the member of an Indian tribe, who shall serve—

‘‘(i) as the tribal cochairperson; and 

‘‘(ii) as a liaison between the governments of Indian tribes in the region and the Authority. 

‘‘(b) ALTERNATE MEMBERS.—

‘‘(1) ALTERNATE FEDERAL COCHAIRPERSON.—The President 

shall appoint an alternate Federal cochairperson. 

‘‘(2) STATE ALTERNATES.—

‘‘(A) IN GENERAL.—The State member of a participating 

State may have a single alternate, who shall be—

‘‘(i) a resident of that State; and 

‘‘(ii) appointed by the Governor of the State. 

‘‘(B) QUORUM.—A State alternate member shall not be 

counted toward the establishment of a quorum of the members of the Authority in any case in which a quorum of the 

State members is required to be present. 

‘‘(3) ALTERNATE TRIBAL COCHAIRPERSON.—The President 

shall appoint an alternate tribal cochairperson, by and with the 

advice and consent of the Senate. 

‘‘(4) DELEGATION OF POWER.—No power or responsibility of 

the Authority specified in paragraphs (2) and (3) of subsection 

(c), and no voting right of any member of the Authority, shall 

be delegated to any person who is not—

‘‘(A) a member of the Authority; or 

‘‘(B) entitled to vote in Authority meetings. 

‘‘(c) VOTING.—

‘‘(1) IN GENERAL.—A decision by the Authority shall require 

a majority vote of the Authority (not including any member representing a State that is delinquent under subsection (g)(2)(D)) 

to be effective. 

‘‘(2) QUORUM.—A quorum of State members shall be required to be present for the Authority to make any policy decision, including—

‘‘(A) a modification or revision of an Authority policy 

decision; 

‘‘(B) approval of a State or regional development plan; 

and 

‘‘(C) any allocation of funds among the States. 

‘‘(3) PROJECT AND GRANT PROPOSALS.—The approval of 

project and grant proposals shall be—

‘‘(A) a responsibility of the Authority; and 

‘‘(B) conducted in accordance with section 383I. 

248

‘‘(4) VOTING BY ALTERNATE MEMBERS.—An alternate member shall vote in the case of the absence, death, disability, removal, or resignation of the Federal, State, or Indian tribe 

member for whom the alternate member is an alternate. 

‘‘(d) DUTIES.—The Authority shall— ‘‘(1) develop, on a continuing basis, comprehensive and coordinated plans and programs to establish priorities and approve grants for the economic development of the region, giving 

due consideration to other Federal, State, tribal, and local planning and development activities in the region; ‘‘(2) not later than 220 days after the date of enactment of 

this subtitle, establish priorities in a development plan for the 

region (including 5-year regional outcome targets); ‘‘(3) assess the needs and assets of the region based on 

available research, demonstrations, investigations, assessments, 

and evaluations of the region prepared by Federal, State, tribal, 

and local agencies, universities, local development districts, and 

other nonprofit groups; ‘‘(4) formulate and recommend to the Governors and legislatures of States that participate in the Authority forms of interstate cooperation; ‘‘(5) work with State, tribal, and local agencies in developing appropriate model legislation; ‘‘(6)(A) enhance the capacity of, and provide support for, 

local development districts in the region; or ‘‘(B) if no local development district exists in an area in a 

participating State in the region, foster the creation of a local 

development district; ‘‘(7) encourage private investment in industrial, commercial, and other economic development projects in the region; and ‘‘(8) cooperate with and assist State governments with economic development programs of participating States. 

‘‘(e) ADMINISTRATION.—In carrying out subsection (d), the Authority may—

‘‘(1) hold such hearings, sit and act at such times and 

places, take such testimony, receive such evidence, and print or 

otherwise reproduce and distribute a description of the proceedings and reports on actions by the Authority as the Authority considers appropriate; 

‘‘(2) authorize, through the Federal, State, or tribal cochairperson or any other member of the Authority designated by the 

Authority, the administration of oaths if the Authority determines that testimony should be taken or evidence received 

under oath; 

‘‘(3) request from any Federal, State, tribal, or local agency 

such information as may be available to or procurable by the 

agency that may be of use to the Authority in carrying out the 

duties of the Authority; 

‘‘(4) adopt, amend, and repeal bylaws and rules governing 

the conduct of business and the performance of duties of the Authority; 

‘‘(5) request the head of any Federal agency to detail to the 

Authority such personnel as the Authority requires to carry out 

duties of the Authority, each such detail to be without loss of 

seniority, pay, or other employee status; 

249

‘‘(6) request the head of any State agency, tribal government, or local government to detail to the Authority such personnel as the Authority requires to carry out duties of the Authority, each such detail to be without loss of seniority, pay, or 

other employee status; 

‘‘(7) provide for coverage of Authority employees in a suitable retirement and employee benefit system by—

‘‘(A) making arrangements or entering into contracts 

with any participating State government or tribal government; or 

‘‘(B) otherwise providing retirement and other employee 

benefit coverage; 

‘‘(8) accept, use, and dispose of gifts or donations of services 

or real, personal, tangible, or intangible property; 

‘‘(9) enter into and perform such contracts, leases, cooperative agreements, or other transactions as are necessary to carry 

out Authority duties, including any contracts, leases, or cooperative agreements with—

‘‘(A) any department, agency, or instrumentality of the 

United States; 

‘‘(B) any State (including a political subdivision, agency, or instrumentality of the State); 

‘‘(C) any Indian tribe in the region; or 

‘‘(D) any person, firm, association, or corporation; and 

‘‘(10) establish and maintain a central office and field offices at such locations as the Authority may select. 

‘‘(f) FEDERAL AGENCY COOPERATION.—A Federal agency shall—

‘‘(1) cooperate with the Authority; and 

‘‘(2) provide, on request of the Federal cochairperson, appropriate assistance in carrying out this subtitle, in accordance 

with applicable Federal laws (including regulations). 

‘‘(g) ADMINISTRATIVE EXPENSES.—

‘‘(1) FEDERAL SHARE.—The Federal share of the administrative expenses of the Authority shall be—

‘‘(A) for fiscal year 2002, 100 percent; 

‘‘(B) for fiscal year 2003, 75 percent; and 

‘‘(C) for fiscal year 2004 and each fiscal year thereafter, 

50 percent. 

‘‘(2) NON-FEDERAL SHARE.—

‘‘(A) IN GENERAL.—The non-Federal share of the administrative expenses of the Authority shall be paid by nonFederal sources in the States that participate in the Authority. 

‘‘(B) SHARE PAID BY EACH STATE.—The share of administrative expenses of the Authority to be paid by non-Federal sources in each State shall be determined by the Authority. 

‘‘(C) NO FEDERAL PARTICIPATION.—The Federal cochairperson shall not participate or vote in any decision 

under subparagraph (B). 

‘‘(D) DELINQUENT STATES.—If a State is delinquent in 

payment of the State’s share of administrative expenses of 

the Authority under this subsection—

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‘‘(i) no assistance under this subtitle shall be provided to the State (including assistance to a political 

subdivision or a resident of the State); and 

‘‘(ii) no member of the Authority from the State 

shall participate or vote in any action by the Authority. 

‘‘(h) COMPENSATION.—

‘‘(1) FEDERAL AND TRIBAL COCHAIRPERSONS.—The Federal 

cochairperson and the tribal cochairperson shall be compensated by the Federal Government at the annual rate of basic 

pay prescribed for level III of the Executive Schedule in subchapter II of chapter 53 of title 5, United States Code. 

‘‘(2) ALTERNATE FEDERAL AND TRIBAL COCHAIRPERSONS.—

The alternate Federal cochairperson and the alternate tribal cochairperson—

‘‘(A) shall be compensated by the Federal Government 

at the annual rate of basic pay prescribed for level V of the 

Executive Schedule described in paragraph (1); and 

‘‘(B) when not actively serving as an alternate, shall 

perform such functions and duties as are delegated by the 

Federal cochairperson or the tribal cochairperson, respectively. 

‘‘(3) STATE MEMBERS AND ALTERNATES.—

‘‘(A) IN GENERAL.—A State shall compensate each 

member and alternate representing the State on the Authority at the rate established by State law. 

‘‘(B) NO ADDITIONAL COMPENSATION.—No State member or alternate member shall receive any salary, or any 

contribution to or supplementation of salary from any 

source other than the State for services provided by the 

member or alternate member to the Authority. 

‘‘(4) DETAILED EMPLOYEES.—

‘‘(A) IN GENERAL.—No person detailed to serve the Authority under subsection (e)(6) shall receive any salary or 

any contribution to or supplementation of salary for services provided to the Authority from—

‘‘(i) any source other than the State, tribal, local, 

or intergovernmental agency from which the person 

was detailed; or 

‘‘(ii) the Authority. 

‘‘(B) VIOLATION.—Any person that violates this paragraph shall be fined not more than $5,000, imprisoned not 

more than 1 year, or both. 

‘‘(C) APPLICABLE LAW.—The Federal cochairperson, the 

alternate Federal cochairperson, and any Federal officer or 

employee detailed to duty on the Authority under subsection 

(e)(5) shall not be subject to subparagraph (A), but shall remain subject to sections 202 through 209 of title 18, United 

States Code. 

‘‘(5) ADDITIONAL PERSONNEL.—

‘‘(A) COMPENSATION.—

‘‘(i) IN GENERAL.—The Authority may appoint and 

fix the compensation of an executive director and such 

other personnel as are necessary to enable the Authority to carry out the duties of the Authority. 

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‘‘(ii) EXCEPTION.—Compensation under clause (i) 

shall not exceed the maximum rate for the Senior Executive Service under section 5382 of title 5, United 

States Code, including any applicable locality-based 

comparability payment that may be authorized under 

section 5304(h)(2)(C) of that title. 

‘‘(B) EXECUTIVE DIRECTOR.—The executive director 

shall be responsible for— ‘‘(i) the carrying out of the administrative duties of 

the Authority; ‘‘(ii) direction of the Authority staff; and

‘‘(iii) such other duties as the Authority may assign. 

‘‘(C) NO FEDERAL EMPLOYEE STATUS.—No member, alternate, officer, or employee of the Authority (except the 

Federal cochairperson of the Authority, the alternate and 

staff for the Federal cochairperson, and any Federal employee detailed to the Authority under subsection (e)(5)) 

shall be considered to be a Federal employee for any purpose. ‘‘(i) CONFLICTS OF INTEREST.— ‘‘(1) IN GENERAL.—Except as provided under paragraph (2), 

no State member, Indian tribe member, State alternate, officer, 

or employee of the Authority shall participate personally and 

substantially as a member, alternate, officer, or employee of the 

Authority, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, in any proceeding, application, request for a ruling or 

other determination, contract, claim, controversy, or other matter in which, to knowledge of the member, alternate, officer, or 

employee—

‘‘(A) the member, alternate, officer, or employee; 

‘‘(B) the spouse, minor child, partner, or organization 

(other than a State or political subdivision of the State or 

the Indian tribe) of the member, alternate, officer, or employee, in which the member, alternate, officer, or employee 

is serving as officer, director, trustee, partner, or employee; 

or 

‘‘(C) any person or organization with whom the member, alternate, officer, or employee is negotiating or has any 

arrangement concerning prospective employment; 

has a financial interest. 

‘‘(2) DISCLOSURE.—Paragraph (1) shall not apply if the 

State member, Indian tribe member, alternate, officer, or employee—

‘‘(A) immediately advises the Authority of the nature 

and circumstances of the proceeding, application, request 

for a ruling or other determination, contract, claim, controversy, or other particular matter presenting a potential 

conflict of interest; ‘‘(B) makes full disclosure of the financial interest; and 

‘‘(C) before the proceeding concerning the matter presenting the conflict of interest, receives a written determination by the Authority that the interest is not so substantial 

as to be likely to affect the integrity of the services that the 

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Authority may expect from the State member, Indian tribe 

member, alternate, officer, or employee. 

‘‘(3) VIOLATION.—Any person that violates this subsection 

shall be fined not more than $10,000, imprisoned not more than 

2 years, or both. 

‘‘(j) VALIDITY OF CONTRACTS, LOANS, AND GRANTS.—The Authority may declare void any contract, loan, or grant of or by the 

Authority in relation to which the Authority determines that there 

has been a violation of any provision under subsection (h)(4) or subsection (i) of this subtitle, or sections 202 through 209 of title 18, 

United States Code. 

‘‘SEC. 383C. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS. 

‘‘(a) IN GENERAL.—The Authority may approve grants to States, 

Indian tribes, local governments, and public and nonprofit organizations for projects, approved in accordance with section 383I—

‘‘(1) to develop the transportation and telecommunication 

infrastructure of the region for the purpose of facilitating economic development in the region (except that grants for this 

purpose may be made only to States, Indian tribes, local governments, and nonprofit organizations); 

‘‘(2) to assist the region in obtaining the job training, employment-related education, and business development (with an 

emphasis on entrepreneurship) that are needed to build and 

maintain strong local economies; 

‘‘(3) to provide assistance to severely distressed and underdeveloped areas that lack financial resources for improving 

basic public services; 

‘‘(4) to provide assistance to severely distressed and underdeveloped areas that lack financial resources for equipping industrial parks and related facilities; and 

‘‘(5) to otherwise achieve the purposes of this subtitle. 

‘‘(b) FUNDING.—

‘‘(1) IN GENERAL.—Funds for grants under subsection (a) 

may be provided—

‘‘(A) entirely from appropriations to carry out this section; 

‘‘(B) in combination with funds available under another Federal grant program; or 

‘‘(C) from any other source. 

‘‘(2) PRIORITY OF FUNDING.—To best build the foundations 

for long-term economic development and to complement other 

Federal, State, and tribal resources in the region, Federal funds 

available under this subtitle shall be focused on the activities 

in the following order or priority: 

‘‘(A) Basic public infrastructure in distressed counties 

and isolated areas of distress. 

‘‘(B) Transportation and telecommunication infrastructure for the purpose of facilitating economic development in 

the region. 

‘‘(C) Business development, with emphasis on entrepreneurship. 

‘‘(D) Job training or employment-related education, 

with emphasis on use of existing public educational institutions located in the region. 

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‘‘SEC. 383D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS. 

‘‘(a) FINDING.—Congress finds that certain States and local 

communities of the region, including local development districts, 

may be unable to take maximum advantage of Federal grant programs for which the States and communities are eligible because— ‘‘(1) they lack the economic resources to provide the required 

matching share; or ‘‘(2) there are insufficient funds available under the applicable Federal law authorizing the Federal grant program to 

meet pressing needs of the region. 

‘‘(b) FEDERAL GRANT PROGRAM FUNDING.—Notwithstanding 

any provision of law limiting the Federal share, the areas eligible 

for assistance, or the authorizations of appropriations, under any 

Federal grant program, and in accordance with subsection (c), the 

Authority, with the approval of the Federal cochairperson and with 

respect to a project to be carried out in the region—

‘‘(1) may increase the Federal share of the costs of a project 

under any Federal grant program to not more than 90 percent 

(except as provided in section 383F(b)); and 

‘‘(2) shall use amounts made available to carry out this 

subtitle to pay the increased Federal share. 

‘‘(c) CERTIFICATIONS.—

‘‘(1) IN GENERAL.—In the case of any project for which all 

or any portion of the basic Federal share of the costs of the 

project is proposed to be paid under this section, no Federal 

contribution shall be made until the Federal official administering the Federal law that authorizes the Federal grant program certifies that the project—

‘‘(A) meets (except as provided in subsection (b)) the applicable requirements of the applicable Federal grant program; and 

‘‘(B) could be approved for Federal contribution under 

the Federal grant program if funds were available under 

the law for the project. 

‘‘(2) CERTIFICATION BY AUTHORITY.— ‘‘(A) IN GENERAL.—The certifications and determinations required to be made by the Authority for approval of 

projects under this Act in accordance with section 383I— ‘‘(i) shall be controlling; and 

‘‘(ii) shall be accepted by the Federal agencies. ‘‘(B) ACCEPTANCE BY FEDERAL COCHAIRPERSON.—In the 

case of any project described in paragraph (1), any finding, 

report, certification, or documentation required to be submitted with respect to the project to the head of the department, agency, or instrumentality of the Federal Government 

responsible for the administration of the Federal grant program under which the project is carried out shall be accepted by the Federal cochairperson. 

‘‘SEC. 383E. LOCAL DEVELOPMENT DISTRICTS AND ORGANIZATIONS 

AND NORTHERN GREAT PLAINS INC. 

‘‘(a) DEFINITION OF LOCAL DEVELOPMENT DISTRICT.—In this 

section, the term ‘local development district’ means an entity—

‘‘(1) that—

‘‘(A) is a planning district in existence on the date of 

enactment of this subtitle that is recognized by the EcoVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00257 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
254

nomic Development Administration of the Department of 

Commerce; or 

‘‘(B) is—

‘‘(i) organized and operated in a manner that ensures broad-based community participation and an effective opportunity for other nonprofit groups to contribute to the development and implementation of programs in the region; 

‘‘(ii) governed by a policy board with at least a 

simple majority of members consisting of—

‘‘(I) elected officials or employees of a general 

purpose unit of local government who have been 

appointed to represent the government; or 

‘‘(II) individuals appointed by the general purpose unit of local government to represent the government; 

‘‘(iii) certified to the Authority as having a charter 

or authority that includes the economic development of 

counties or parts of counties or other political subdivisions within the region—

‘‘(I) by the Governor of each State in which the 

entity is located; or 

‘‘(II) by the State officer designated by the appropriate State law to make the certification; and 

‘‘(iv)(I) a nonprofit incorporated body organized or 

chartered under the law of the State in which the entity is located; 

‘‘(II) a nonprofit agency or instrumentality of a 

State or local government; 

‘‘(III) a public organization established before the 

date of enactment of this subtitle under State law for 

creation of multi-jurisdictional, area-wide planning organizations; or 

‘‘(IV) a nonprofit association or combination of 

bodies, agencies, and instrumentalities described in 

subclauses (I) through (III); and 

‘‘(2) that has not, as certified by the Federal cochairperson—

‘‘(A) inappropriately used Federal grant funds from 

any Federal source; or 

‘‘(B) appointed an officer who, during the period in 

which another entity inappropriately used Federal grant 

funds from any Federal source, was an officer of the other 

entity. 

‘‘(b) GRANTS TO LOCAL DEVELOPMENT DISTRICTS.—

‘‘(1) IN GENERAL.—The Authority may make grants for administrative expenses under this section. 

‘‘(2) CONDITIONS FOR GRANTS.—

‘‘(A) MAXIMUM AMOUNT.—The amount of any grant 

awarded under paragraph (1) shall not exceed 80 percent 

of the administrative expenses of the local development district receiving the grant. 

‘‘(B) MAXIMUM PERIOD.—No grant described in paragraph (1) shall be awarded to a State agency certified as 

255

a local development district for a period greater than 3 

years. 

‘‘(C) LOCAL SHARE.—The contributions of a local development district for administrative expenses may be in cash 

or in kind, fairly evaluated, including space, equipment, 

and services. 

‘‘(c) DUTIES OF LOCAL DEVELOPMENT DISTRICTS.—A local development district shall—

‘‘(1) operate as a lead organization serving multicounty 

areas in the region at the local level; and 

‘‘(2) serve as a liaison between State, tribal, and local governments, nonprofit organizations (including community-based 

groups and educational institutions), the business community, 

and citizens that—

‘‘(A) are involved in multijurisdictional planning; 

‘‘(B) provide technical assistance to local jurisdictions 

and potential grantees; and 

‘‘(C) provide leadership and civic development assistance. 

‘‘(d) NORTHERN GREAT PLAINS INC.—Northern Great Plains 

Inc., a nonprofit corporation incorporated in the State of Minnesota 

to implement the recommendations of the Northern Great Plains 

Rural Development Commission established by the Northern Great 

Plains Rural Development Act (7 U.S.C. 2661 note; Public Law 

103–318)—

‘‘(1) shall serve as an independent, primary resource for the 

Authority on issues of concern to the region; 

‘‘(2) shall advise the Authority on development of international trade; 

‘‘(3) may provide research, education, training, and other 

support to the Authority; and 

‘‘(4) may carry out other activities on its own behalf or on 

behalf of other entities. 

‘‘SEC. 383F. DISTRESSED COUNTIES AND AREAS AND NONDISTRESSED 

COUNTIES. 

‘‘(a) DESIGNATIONS.—Not later than 90 days after the date of 

enactment of this subtitle, and annually thereafter, the Authority, in 

accordance with such criteria as the Authority may establish, shall 

designate—

‘‘(1) as distressed counties, counties in the region that are 

the most severely and persistently distressed and underdeveloped and have high rates of poverty, unemployment, or 

outmigration; 

‘‘(2) as nondistressed counties, counties in the region that 

are not designated as distressed counties under paragraph (1); 

and 

‘‘(3) as isolated areas of distress, areas located in nondistressed counties (as designated under paragraph (2)) that have 

high rates of poverty, unemployment, or outmigration. 

‘‘(b) DISTRESSED COUNTIES.—

‘‘(1) IN GENERAL.—The Authority shall allocate at least 75 

percent of the appropriations made available under section 

383M for programs and projects designed to serve the needs of 

distressed counties and isolated areas of distress in the region. 

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‘‘(2) FUNDING LIMITATIONS.—The funding limitations under 

section 383D(b) shall not apply to a project to provide transportation or telecommunication or basic public services to residents 

of 1 or more distressed counties or isolated areas of distress in 

the region. 

‘‘(c) NONDISTRESSED COUNTIES.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), no 

funds shall be provided under this subtitle for a project located 

in a county designated as a nondistressed county under subsection (a)(2). ‘‘(2) EXCEPTIONS.— ‘‘(A) IN GENERAL.—The funding prohibition under 

paragraph (1) shall not apply to grants to fund the administrative expenses of local development districts under section 383E(b). ‘‘(B) MULTICOUNTY PROJECTS.—The Authority may 

waive the application of the funding prohibition under 

paragraph (1) to— ‘‘(i) a multicounty project that includes participation by a nondistressed county; or ‘‘(ii) any other type of project; 

if the Authority determines that the project could bring significant benefits to areas of the region outside a nondistressed county. ‘‘(C) ISOLATED AREAS OF DISTRESS.—For a designation 

of an isolated area of distress for assistance to be effective, 

the designation shall be supported— ‘‘(i) by the most recent Federal data available; or 

‘‘(ii) if no recent Federal data are available, by the 

most recent data available through the government of 

the State in which the isolated area of distress is located. ‘‘(d) TRANSPORTATION, TELECOMMUNICATION, AND BASIC PUB- LIC INFRASTRUCTURE.—The Authority shall allocate at least 50 percent of any funds made available under section 383M for transportation, telecommunication, and basic public infrastructure projects 

authorized under paragraphs (1) and (3) of section 383C(a). 

‘‘SEC. 383G. DEVELOPMENT PLANNING PROCESS. 

‘‘(a) STATE DEVELOPMENT PLAN.—In accordance with policies 

established by the Authority, each State member shall submit a development plan for the area of the region represented by the State 

member. 

‘‘(b) CONTENT OF PLAN.—A State development plan submitted 

under subsection (a) shall reflect the goals, objectives, and priorities 

identified in the regional development plan developed under section 

383B(d)(2). 

‘‘(c) CONSULTATION WITH INTERESTED LOCAL PARTIES.—In carrying out the development planning process (including the selection 

of programs and projects for assistance), a State may—

‘‘(1) consult with—

‘‘(A) local development districts; and 

‘‘(B) local units of government; and 

‘‘(2) take into consideration the goals, objectives, priorities, 

and recommendations of the entities described in paragraph (1). 

‘‘(d) PUBLIC PARTICIPATION.—

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‘‘(1) IN GENERAL.—The Authority and applicable State and 

local development districts shall encourage and assist, to the 

maximum extent practicable, public participation in the development, revision, and implementation of all plans and programs under this subtitle. 

‘‘(2) REGULATIONS.—The Authority shall develop guidelines 

for providing public participation described in paragraph (1), 

including public hearings. 

‘‘SEC. 383H. PROGRAM DEVELOPMENT CRITERIA. 

‘‘(a) IN GENERAL.—In considering programs and projects to be 

provided assistance under this subtitle, and in establishing a priority ranking of the requests for assistance provided to the Authority, the Authority shall follow procedures that ensure, to the maximum extent practicable, consideration of—

‘‘(1) the relationship of the project or class of projects to 

overall regional development; 

‘‘(2) the per capita income and poverty and unemployment 

and outmigration rates in an area; 

‘‘(3) the financial resources available to the applicants for 

assistance seeking to carry out the project, with emphasis on ensuring that projects are adequately financed to maximize the 

probability of successful economic development; 

‘‘(4) the importance of the project or class of projects in relation to other projects or classes of projects that may be in competition for the same funds; 

‘‘(5) the prospects that the project for which assistance is 

sought will improve, on a continuing rather than a temporary 

basis, the opportunities for employment, the average level of income, or the economic development of the area to be served by 

the project; and 

‘‘(6) the extent to which the project design provides for detailed outcome measurements by which grant expenditures and 

the results of the expenditures may be evaluated. 

‘‘(b) NO RELOCATION ASSISTANCE.—No financial assistance authorized by this subtitle shall be used to assist a person or entity 

in relocating from one area to another, except that financial assistance may be used as otherwise authorized by this title to attract 

businesses from outside the region to the region. 

‘‘(c) MAINTENANCE OF EFFORT.—Funds may be provided for a 

program or project in a State under this subtitle only if the Authority determines that the level of Federal or State financial assistance 

provided under a law other than this subtitle, for the same type of 

program or project in the same area of the State within the region, 

will not be reduced as a result of funds made available by this subtitle. 

‘‘SEC. 383I. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS. 

‘‘(a) IN GENERAL.—A State or regional development plan or any 

multistate subregional plan that is proposed for development under 

this subtitle shall be reviewed by the Authority. 

‘‘(b) EVALUATION BY STATE MEMBER.—An application for a 

grant or any other assistance for a project under this subtitle shall 

be made through and evaluated for approval by the State member 

of the Authority representing the applicant. 

258

‘‘(c) CERTIFICATION.—An application for a grant or other assistance for a project shall be approved only on certification by the 

State member that the application for the project—

‘‘(1) describes ways in which the project complies with any 

applicable State development plan;

‘‘(2) meets applicable criteria under section 383H; 

‘‘(3) provides adequate assurance that the proposed project 

will be properly administered, operated, and maintained; and 

‘‘(4) otherwise meets the requirements of this subtitle. 

‘‘(d) VOTES FOR DECISIONS.—On certification by a State member of the Authority of an application for a grant or other assistance 

for a specific project under this section, an affirmative vote of the 

Authority under section 383B(c) shall be required for approval of 

the application. 

‘‘SEC. 383J. CONSENT OF STATES. 

‘‘Nothing in this subtitle requires any State to engage in or accept any program under this subtitle without the consent of the 

State. 

‘‘SEC. 383K. RECORDS. 

‘‘(a) RECORDS OF THE AUTHORITY.—

‘‘(1) IN GENERAL.—The Authority shall maintain accurate 

and complete records of all transactions and activities of the 

Authority. 

‘‘(2) AVAILABILITY.—All records of the Authority shall be 

available for audit and examination by the Comptroller General 

of the United States and the Inspector General of the Department of Agriculture (including authorized representatives of the 

Comptroller General and the Inspector General of the Department of Agriculture). 

‘‘(b) RECORDS OF RECIPIENTS OF FEDERAL ASSISTANCE.—

‘‘(1) IN GENERAL.—A recipient of Federal funds under this 

subtitle shall, as required by the Authority, maintain accurate 

and complete records of transactions and activities financed 

with Federal funds and report to the Authority on the transactions and activities to the Authority. 

‘‘(2) AVAILABILITY.—All records required under paragraph 

(1) shall be available for audit by the Comptroller General of 

the United States, the Inspector General of the Department of 

Agriculture, and the Authority (including authorized representatives of the Comptroller General, the Inspector General of the 

Department of Agriculture, and the Authority). 

‘‘(c) ANNUAL AUDIT.—The Inspector General of the Department 

of Agriculture shall audit the activities, transactions, and records of 

the Authority on an annual basis. 

‘‘SEC. 383L. ANNUAL REPORT. 

‘‘Not later than 180 days after the end of each fiscal year, the 

Authority shall submit to the President and to Congress a report describing the activities carried out under this subtitle. 

‘‘SEC. 383M. AUTHORIZATION OF APPROPRIATIONS. 

‘‘(a) IN GENERAL.—There is authorized to be appropriated to the 

Authority to carry out this subtitle $30,000,000 for each of fiscal 

years 2002 through 2007, to remain available until expended. 

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‘‘(b) ADMINISTRATIVE EXPENSES.—Not more than 5 percent of 

the amount appropriated under subsection (a) for a fiscal year shall 

be used for administrative expenses of the Authority. 

‘‘(c) MINIMUM STATE SHARE OF GRANTS.—Notwithstanding any 

other provision of this subtitle, for any fiscal year, the aggregate 

amount of grants received by a State and all persons or entities in 

the State under this subtitle shall be not less than 1⁄3 of the product 

obtained by multiplying—

‘‘(1) the aggregate amount of grants under this subtitle for 

the fiscal year; and 

‘‘(2) the ratio that—

‘‘(A) the population of the State (as determined by the 

Secretary of Commerce based on the most recent decennial 

census for which data are available); bears to 

‘‘(B) the population of the region (as so determined). 

‘‘SEC. 383N. TERMINATION OF AUTHORITY. 

‘‘The authority provided by this subtitle terminates effective October 1, 2007.’’.

SEC. 6029. RURAL BUSINESS INVESTMENT PROGRAM. 

The Consolidated Farm and Rural Development Act (as amended by section 6028) is amended by adding at the end the following: 

‘‘Subtitle H—Rural Business Investment 

Program 

‘‘SEC. 384A. DEFINITIONS. 

‘‘In this subtitle: 

‘‘(1) ARTICLES.—The term ‘articles’ means articles of incorporation for an incorporated body or the functional equivalent 

or other similar documents specified by the Secretary for other 

business entities. 

‘‘(2) DEVELOPMENTAL VENTURE CAPITAL.—The term ‘developmental venture capital’ means capital in the form of equity 

capital investments in rural business investment companies 

with an objective of fostering economic development in rural 

areas. 

‘‘(3) EMPLOYEE WELFARE BENEFIT PLAN; PENSION PLAN.—

‘‘(A) IN GENERAL.—The terms ‘employee welfare benefit 

plan’ and ‘pension plan’ have the meanings given the terms 

in section 3 of the Employee Retirement Income Security 

Act of 1974 (29 U.S.C. 1002). 

‘‘(B) INCLUSIONS.—The terms ‘employee welfare benefit 

plan’ and ‘pension plan’ include—

‘‘(i) public and private pension or retirement plans 

subject to this subtitle; and 

‘‘(ii) similar plans not covered by this subtitle that 

have been established, and that are maintained, by the 

Federal Government or any State (including by a political subdivision, agency, or instrumentality of the Federal Government or a State) for the benefit of employees. 

260

‘‘(4) EQUITY CAPITAL.—The term ‘equity capital’ means common or preferred stock or a similar instrument, including subordinated debt with equity features. ‘‘(5) LEVERAGE.—The term ‘leverage’ includes— ‘‘(A) debentures purchased or guaranteed by the Secretary; ‘‘(B) participating securities purchased or guaranteed 

by the Secretary; and ‘‘(C) preferred securities outstanding as of the date of 

enactment of this subtitle. 

‘‘(6) LICENSE.—The term ‘license’ means a license issued by 

the Secretary as provided in section 384D(e). ‘‘(7) LIMITED LIABILITY COMPANY.—The term ‘limited liability company’ means a business entity that is organized and operating in accordance with a State limited liability company 

law approved by the Secretary. ‘‘(8) MEMBER.—The term ‘member’ means, with respect to a 

rural business investment company that is a limited liability 

company, a holder of an ownership interest or a person otherwise admitted to membership in the limited liability company. ‘‘(9) OPERATIONAL ASSISTANCE.—The term ‘operational assistance’ means management, marketing, and other technical 

assistance that assists a rural business concern with business 

development. ‘‘(10) PARTICIPATION AGREEMENT.—The term ‘participation 

agreement’ means an agreement, between the Secretary and a 

rural business investment company granted final approval 

under section 384D(e), that requires the rural business investment company to make investments in smaller enterprises in 

rural areas. ‘‘(11) PRIVATE CAPITAL.— ‘‘(A) IN GENERAL.—The term ‘private capital’ means the 

total of—

‘‘(i)(I) the paid-in capital and paid-in surplus of a 

corporate rural business investment company; ‘‘(II) the contributed capital of the partners of a 

partnership rural business investment company; or ‘‘(III) the equity investment of the members of a 

limited liability company rural business investment 

company; and ‘‘(ii) unfunded binding commitments from investors that meet criteria established by the Secretary to 

contribute capital to the rural business investment 

company, except that— ‘‘(I) unfunded commitments may be counted as 

private capital for purposes of approval by the Secretary of any request for leverage; but ‘‘(II) leverage shall not be funded based on the 

commitments. ‘‘(B) EXCLUSIONS.—The term ‘private capital’ does not 

include—

‘‘(i) any funds borrowed by a rural business investment company from any source; ‘‘(ii) any funds obtained through the issuance of leverage; or 

261

‘‘(iii) any funds obtained directly or indirectly from 

the Federal Government or any State (including by a 

political subdivision, agency, or instrumentality of the 

Federal Government or a State), except for— ‘‘(I) funds obtained from the business revenues 

(excluding any governmental appropriation) of any 

federally chartered or government-sponsored enterprise established prior to the date of enactment of 

this subtitle; ‘‘(II) funds invested by an employee welfare 

benefit plan or pension plan; and ‘‘(III) any qualified nonprivate funds (if the investors of the qualified nonprivate funds do not 

control, directly or indirectly, the management, 

board of directors, general partners, or members of 

the rural business investment company). ‘‘(12) QUALIFIED NONPRIVATE FUNDS.—The term ‘qualified 

nonprivate funds’ means any— ‘‘(A) funds directly or indirectly invested in any applicant or rural business investment company on or before the 

date of enactment of this subtitle, by any Federal agency, 

other than the Department of Agriculture, under a provision of law explicitly mandating the inclusion of those 

funds in the definition of the term ‘private capital’; and ‘‘(B) funds invested in any applicant or rural business 

investment company by 1 or more entities of any State (including by a political subdivision, agency, or instrumentality of the State and including any guarantee extended by 

those entities) in an aggregate amount that does not exceed 

33 percent of the private capital of the applicant or rural 

business investment company. 

‘‘(13) RURAL BUSINESS CONCERN.—The term ‘rural business 

concern’ means— ‘‘(A) a public, private, or cooperative for-profit or nonprofit organization; ‘‘(B) a for-profit or nonprofit business controlled by an 

Indian tribe on a Federal or State reservation or other federally recognized Indian tribal group; or ‘‘(C) any other person or entity; 

that primarily operates in a rural area, as determined by the 

Secretary. ‘‘(14) RURAL BUSINESS INVESTMENT COMPANY.—The term 

‘rural business investment company’ means a company that—

‘‘(A) has been granted final approval by the Secretary 

under section 384D(e); and 

‘‘(B) has entered into a participation agreement with 

the Secretary. 

‘‘(15) SMALLER ENTERPRISE.—The term ‘smaller enterprise’

means any rural business concern that, together with its affiliates—

‘‘(A) has—

‘‘(i) a net financial worth of not more than 

$6,000,000, as of the date on which assistance is provided under this subtitle to the rural business concern; 

and 

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‘‘(ii) an average net income for the 2-year period 

preceding the date on which assistance is provided 

under this subtitle to the rural business concern, of not 

more than $2,000,000, after Federal income taxes (excluding any carryover losses), except that, for purposes 

of this clause, if the rural business concern is not required by law to pay Federal income taxes at the enterprise level, but is required to pass income through to 

the shareholders, partners, beneficiaries, or other equitable owners of the business concern, the net income of 

the business concern shall be determined by allowing a 

deduction in an amount equal to the total of—

‘‘(I) if the rural business concern is not required by law to pay State (and local, if any) income taxes at the enterprise level, the net income 

(determined without regard to this clause), multiplied by the marginal State income tax rate (or by 

the combined State and local income tax rates, as 

applicable) that would have applied if the business 

concern were a corporation; and 

‘‘(II) the net income (so determined) less any 

deduction for State (and local) income taxes calculated under subclause (I), multiplied by the marginal Federal income tax rate that would have applied if the rural business concern were a corporation; or 

‘‘(B) satisfies the standard industrial classification size 

standards established by the Administrator of the Small 

Business Administration for the industry in which the 

rural business concern is primarily engaged. 

‘‘SEC. 384B. PURPOSES. 

‘‘The purposes of the Rural Business Investment Program established under this subtitle are—

‘‘(1) to promote economic development and the creation of 

wealth and job opportunities in rural areas and among individuals living in those areas by encouraging developmental venture 

capital investments in smaller enterprises primarily located in 

rural areas; and 

‘‘(2) to establish a developmental venture capital program, 

with the mission of addressing the unmet equity investment 

needs of small enterprises located in rural areas, by authorizing 

the Secretary—

‘‘(A) to enter into participation agreements with rural 

business investment companies; 

‘‘(B) to guarantee debentures of rural business investment companies to enable each rural business investment 

company to make developmental venture capital investments in smaller enterprises in rural areas; and 

‘‘(C) to make grants to rural business investment companies, and to other entities, for the purpose of providing 

operational assistance to smaller enterprises financed, or 

expected to be financed, by rural business investment companies.

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‘‘SEC. 384C. ESTABLISHMENT. 

‘‘In accordance with this subtitle, the Secretary shall establish 

a Rural Business Investment Program, under which the Secretary 

may— ‘‘(1) enter into participation agreements with companies 

granted final approval under section 384D(e) for the purposes 

set forth in section 384B; ‘‘(2) guarantee the debentures issued by rural business investment companies as provided in section 384E; and ‘‘(3) make grants to rural business investment companies, 

and to other entities, under section 384H. 

‘‘SEC. 384D. SELECTION OF RURAL BUSINESS INVESTMENT COMPANIES. 

‘‘(a) ELIGIBILITY.—A company shall be eligible to apply to participate, as a rural business investment company, in the program established under this subtitle if— ‘‘(1) the company is a newly formed for-profit entity or a 

newly formed for-profit subsidiary of such an entity; ‘‘(2) the company has a management team with experience 

in community development financing or relevant venture capital 

financing; and ‘‘(3) the company will invest in enterprises that will create 

wealth and job opportunities in rural areas, with an emphasis 

on smaller enterprises. 

‘‘(b) APPLICATION.—To participate, as a rural business investment company, in the program established under this subtitle, a 

company meeting the eligibility requirements of subsection (a) shall 

submit an application to the Secretary that includes— ‘‘(1) a business plan describing how the company intends to 

make successful developmental venture capital investments in 

identified rural areas; ‘‘(2) information regarding the community development finance or relevant venture capital qualifications and general 

reputation of the management of the company; 

‘‘(3) a description of how the company intends to work with 

community-based organizations and local entities (including 

local economic development companies, local lenders, and local 

investors) and to seek to address the unmet equity capital needs 

of the communities served; 

‘‘(4) a proposal describing how the company intends to use 

the grant funds provided under this subtitle to provide operational assistance to smaller enterprises financed by the company, including information regarding whether the company intends to use licensed professionals, as necessary, on the staff of 

the company or from an outside entity; 

‘‘(5) with respect to binding commitments to be made to the 

company under this subtitle, an estimate of the ratio of cash to 

in-kind contributions; 

‘‘(6) a description of the criteria to be used to evaluate 

whether and to what extent the company meets the purposes of 

the program established under this subtitle; 

‘‘(7) information regarding the management and financial 

strength of any parent firm, affiliated firm, or any other firm 

essential to the success of the business plan of the company; and 

‘‘(8) such other information as the Secretary may require. 

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‘‘(c) STATUS.—Not later than 90 days after the initial receipt by 

the Secretary of an application under this section, the Secretary 

shall provide to the applicant a written report describing the status 

of the application and any requirements remaining for completion 

of the application. 

‘‘(d) MATTERS CONSIDERED.—In reviewing and processing any 

application under this section, the Secretary—

‘‘(1) shall determine whether—

‘‘(A) the applicant meets the requirements of subsection 

(e); and 

‘‘(B) the management of the applicant is qualified and 

has the knowledge, experience, and capability necessary to 

comply with this subtitle; 

‘‘(2) shall take into consideration—

‘‘(A) the need for and availability of financing for rural 

business concerns in the geographic area in which the applicant is to commence business; 

‘‘(B) the general business reputation of the owners and 

management of the applicant; and 

‘‘(C) the probability of successful operations of the applicant, including adequate profitability and financial 

soundness; and 

‘‘(3) shall not take into consideration any projected shortage 

or unavailability of grant funds or leverage. 

‘‘(e) APPROVAL; LICENSE.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the 

Secretary may approve an applicant to operate as a rural business investment company under this subtitle and license the applicant as a rural business investment company, if—

‘‘(A) the Secretary determines that the application satisfies the requirements of subsection (b); 

‘‘(B) the area in which the rural business investment 

company is to conduct its operations, and establishment of 

branch offices or agencies (if authorized by the articles), are 

approved by the Secretary; and 

‘‘(C) the applicant enters into a participation agreement 

with the Secretary. 

‘‘(2) CAPITAL REQUIREMENTS.—

‘‘(A) IN GENERAL.—Notwithstanding any other provision of this subtitle, the Secretary may approve an applicant to operate as a rural business investment company 

under this subtitle and designate the applicant as a rural 

business investment company, if the Secretary determines 

that the applicant—

‘‘(i) has private capital of more than $2,500,000; 

‘‘(ii) would otherwise be approved under this subtitle, except that the applicant does not satisfy the requirements of section 384I(c); and 

‘‘(iii) has a viable business plan that—

‘‘(I) reasonably projects profitable operations; 

and

‘‘(II) has a reasonable timetable for achieving 

a level of private capital that satisfies the requirements of section 384I(c). 

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‘‘(B) LEVERAGE.—An applicant approved under subparagraph (A) shall not be eligible to receive leverage under 

this subtitle until the applicant satisfies the requirements of 

section 384I(c). 

‘‘(C) GRANTS.—An applicant approved under subparagraph (A) shall be eligible for grants under section 384H in 

proportion to the private capital of the applicant, as determined by the Secretary. 

‘‘SEC. 384E. DEBENTURES. 

‘‘(a) IN GENERAL.—The Secretary may guarantee the timely payment of principal and interest, as scheduled, on debentures issued 

by any rural business investment company. 

‘‘(b) TERMS AND CONDITIONS.—The Secretary may make guarantees under this section on such terms and conditions as the Secretary considers appropriate, except that the term of any debenture 

guaranteed under this section shall not exceed 15 years. 

‘‘(c) FULL FAITH AND CREDIT OF THE UNITED STATES.—Section 

381H(i) shall apply to any guarantee under this section. 

‘‘(d) MAXIMUM GUARANTEE.—Under this section, the Secretary 

may—

‘‘(1) guarantee the debentures issued by a rural business investment company only to the extent that the total face amount 

of outstanding guaranteed debentures of the rural business investment company does not exceed the lesser of—

‘‘(A) 300 percent of the private capital of the rural business investment company; or 

‘‘(B) $105,000,000; and 

‘‘(2) provide for the use of discounted debentures. 

‘‘SEC. 384F. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES. 

‘‘(a) ISSUANCE.—The Secretary may issue trust certificates representing ownership of all or a fractional part of debentures issued 

by a rural business investment company and guaranteed by the Secretary under this subtitle, if the certificates are based on and backed 

by a trust or pool approved by the Secretary and composed solely 

of guaranteed debentures. 

‘‘(b) GUARANTEE.—

‘‘(1) IN GENERAL.—The Secretary may, under such terms 

and conditions as the Secretary considers appropriate, guarantee the timely payment of the principal of and interest on 

trust certificates issued by the Secretary or agents of the Secretary for purposes of this section. 

‘‘(2) LIMITATION.—Each guarantee under this subsection 

shall be limited to the extent of principal and interest on the 

guaranteed debentures that compose the trust or pool. 

‘‘(3) PREPAYMENT OR DEFAULT.—

‘‘(A) IN GENERAL.—In the event a debenture in a trust 

or pool is prepaid, or in the event of default of such a debenture, the guarantee of timely payment of principal and 

interest on the trust certificates shall be reduced in proportion to the amount of principal and interest the prepaid debenture represents in the trust or pool. ‘‘(B) INTEREST.—Interest on prepaid or defaulted debentures shall accrue and be guaranteed by the Secretary 

only through the date of payment of the guarantee. 

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‘‘(C) REDEMPTION.—At any time during its term, a 

trust certificate may be called for redemption due to prepayment or default of all debentures. 

‘‘(c) FULL FAITH AND CREDIT OF THE UNITED STATES.—Section 

381H(i) shall apply to any guarantee of a trust certificate issued by 

the Secretary under this section. 

‘‘(d) SUBROGATION AND OWNERSHIP RIGHTS.—

‘‘(1) SUBROGATION.—If the Secretary pays a claim under a 

guarantee issued under this section, the claim shall be subrogated fully to the rights satisfied by the payment. 

‘‘(2) OWNERSHIP RIGHTS.—No Federal, State, or local law 

shall preclude or limit the exercise by the Secretary of the ownership rights of the Secretary in a debenture residing in a trust 

or pool against which 1 or more trust certificates are issued 

under this section. 

‘‘(e) MANAGEMENT AND ADMINISTRATION.—

‘‘(1) REGISTRATION.—The Secretary shall provide for a central registration of all trust certificates issued under this section. 

‘‘(2) CREATION OF POOLS.—The Secretary may—

‘‘(A) maintain such commercial bank accounts or investments in obligations of the United States as may be 

necessary to facilitate the creation of trusts or pools backed 

by debentures guaranteed under this subtitle; and 

‘‘(B) issue trust certificates to facilitate the creation of 

those trusts or pools. 

‘‘(3) FIDELITY BOND OR INSURANCE REQUIREMENT.—Any 

agent performing functions on behalf of the Secretary under 

this paragraph shall provide a fidelity bond or insurance in 

such amount as the Secretary considers to be necessary to fully 

protect the interests of the United States. 

‘‘(4) REGULATION OF BROKERS AND DEALERS.—The Secretary may regulate brokers and dealers in trust certificates 

issued under this section. 

‘‘(5) ELECTRONIC REGISTRATION.—Nothing in this subsection prohibits the use of a book-entry or other electronic form 

of registration for trust certificates issued under this section. 

‘‘SEC. 384G. FEES. 

‘‘(a) IN GENERAL.—The Secretary may charge such fees as the 

Secretary considers appropriate with respect to any guarantee or 

grant issued under this subtitle. 

‘‘(b) TRUST CERTIFICATE.—Notwithstanding subsection (a), the 

Secretary shall not collect a fee for any guarantee of a trust certificate under section 384F, except that any agent of the Secretary may 

collect a fee approved by the Secretary for the functions described 

in section 384F(e)(2). 

‘‘(c) LICENSE.—

‘‘(1) IN GENERAL.—The Secretary may prescribe fees to be 

paid by each applicant for a license to operate as a rural business investment company under this subtitle. 

‘‘(2) USE OF AMOUNTS.—Fees collected under this subsection—

‘‘(A) shall be deposited in the account for salaries and 

expenses of the Secretary; and 

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‘‘(B) are authorized to be appropriated solely to cover 

the costs of licensing examinations. 

‘‘SEC. 384H. OPERATIONAL ASSISTANCE GRANTS. 

‘‘(a) IN GENERAL.—In accordance with this section, the Secretary may make grants to rural business investment companies 

and to other entities, as authorized by this subtitle, to provide operational assistance to smaller enterprises financed, or expected to be 

financed, by the entities. 

‘‘(b) TERMS.—Grants made under this section shall be made 

over a multiyear period (not to exceed 10 years) under such terms 

as the Secretary may require. 

‘‘(c) USE OF FUNDS.—The proceeds of a grant made under this 

section may be used by the rural business investment company receiving the grant only to provide operational assistance in connection with an equity or prospective equity investment in a business 

located in a rural area. 

‘‘(d) SUBMISSION OF PLANS.—A rural business investment company shall be eligible for a grant under this section only if the rural 

business investment company submits to the Secretary, in such form 

and manner as the Secretary may require, a plan for use of the 

grant. 

‘‘(e) GRANT AMOUNT.—

‘‘(1) RURAL BUSINESS INVESTMENT COMPANIES.—The 

amount of a grant made under this section to a rural business 

investment company shall be equal to the lesser of—

‘‘(A) 10 percent of the private capital raised by the 

rural business investment company; or 

‘‘(B) $1,000,000. 

‘‘(2) OTHER ENTITIES.—The amount of a grant made under 

this section to any entity other than a rural business investment 

company shall be equal to the resources (in cash or in kind) 

raised by the entity in accordance with the requirements applicable to rural business investment companies under this subtitle. 

‘‘SEC. 384I. RURAL BUSINESS INVESTMENT COMPANIES. 

‘‘(a) ORGANIZATION.—For the purpose of this subtitle, a rural 

business investment company shall—

‘‘(1) be an incorporated body, a limited liability company, 

or a limited partnership organized and chartered or otherwise 

existing under State law solely for the purpose of performing 

the functions and conducting the activities authorized by this 

subtitle; 

‘‘(2)(A) if incorporated, have succession for a period of not 

less than 30 years unless earlier dissolved by the shareholders 

of the rural business investment company; and

‘‘(B) if a limited partnership or a limited liability company, 

have succession for a period of not less than 10 years; and 

‘‘(3) possess the powers reasonably necessary to perform the 

functions and conduct the activities. 

‘‘(b) ARTICLES.—The articles of any rural business investment 

company—

‘‘(1) shall specify in general terms— ‘‘(A) the purposes for which the rural business investment company is formed; 

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‘‘(B) the name of the rural business investment company; 

‘‘(C) the area or areas in which the operations of the 

rural business investment company are to be carried out; 

‘‘(D) the place where the principal office of the rural 

business investment company is to be located; and 

‘‘(E) the amount and classes of the shares of capital 

stock of the rural business investment company; 

‘‘(2) may contain any other provisions consistent with this 

subtitle that the rural business investment company may determine appropriate to adopt for the regulation of the business of 

the rural business investment company and the conduct of the 

affairs of the rural business investment company; and 

‘‘(3) shall be subject to the approval of the Secretary. 

‘‘(c) CAPITAL REQUIREMENTS.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the 

private capital of each rural business investment company shall 

be not less than—

‘‘(A) $5,000,000; or 

‘‘(B) $10,000,000, with respect to each rural business 

investment company authorized or seeking authority to 

issue participating securities to be purchased or guaranteed 

by the Secretary under this subtitle. 

‘‘(2) EXCEPTION.—The Secretary may, in the discretion of 

the Secretary and based on a showing of special circumstances 

and good cause, permit the private capital of a rural business 

investment company described in paragraph (1)(B) to be less 

than $10,000,000, but not less than $5,000,000, if the Secretary 

determines that the action would not create or otherwise contribute to an unreasonable risk of default or loss to the Federal 

Government. 

‘‘(3) ADEQUACY.—In addition to the requirements of paragraph (1), the Secretary shall—

‘‘(A) determine whether the private capital of each 

rural business investment company is adequate to ensure a 

reasonable prospect that the rural business investment company will be operated soundly and profitably, and managed actively and prudently in accordance with the articles 

of the rural business investment company; 

‘‘(B) determine that the rural business investment company will be able to comply with the requirements of this 

subtitle; 

‘‘(C) require that at least 75 percent of the capital of 

each rural business investment company is invested in 

rural business concerns and not more than 10 percent of 

the investments shall be made in an area containing a city 

of over 150,000 in the last decennial census and the Census 

Bureau defined urbanized area containing or adjacent to 

that city; 

‘‘(D) ensure that the rural business investment company is designed primarily to meet equity capital needs of 

the businesses in which the rural business investment company invests and not to compete with traditional small 

business financing by commercial lenders; and 

269

‘‘(E) require that the rural business investment company makes short-term non-equity investments of less than 

5 years only to the extent necessary to preserve an existing 

investment. 

‘‘(d) DIVERSIFICATION OF OWNERSHIP.—The Secretary shall ensure that the management of each rural business investment company licensed after the date of enactment of this subtitle is sufficiently diversified from and unaffiliated with the ownership of the 

rural business investment company so as to ensure independence 

and objectivity in the financial management and oversight of the investments and operations of the rural business investment company. 

‘‘SEC. 384J. FINANCIAL INSTITUTION INVESTMENTS. 

‘‘(a) IN GENERAL.—Except as otherwise provided in this section 

and notwithstanding any other provision of law, the following 

banks, associations, and institutions are eligible both to establish 

and invest in any rural business investment company or in any entity established to invest solely in rural business investment companies: 

‘‘(1) Any bank or savings association the deposits of which 

are insured under the Federal Deposit Insurance Act (12 U.S.C. 

1811 et seq.). 

‘‘(2) Any Farm Credit System institution described in section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)). 

‘‘(b) LIMITATION.—No bank, association, or institution described 

in subsection (a) may make investments described in subsection (a) 

that are greater than 5 percent of the capital and surplus of the 

bank, association, or institution. 

‘‘(c) LIMITATION ON RURAL BUSINESS INVESTMENT COMPANIES

CONTROLLED BY FARM CREDIT SYSTEM INSTITUTIONS.—If a Farm 

Credit System institution described in section 1.2(a) of the Farm 

Credit Act of 1971 (12 U.S.C. 2002(a)) holds more than 15 percent 

of the shares of a rural business investment company, either alone 

or in conjunction with other System institutions (or affiliates), the 

rural business investment company shall not provide equity investments in, or provide other financial assistance to, entities that are 

not otherwise eligible to receive financing from the Farm Credit System under that Act (12 U.S.C. 2001 et seq.). 

‘‘SEC. 384K. REPORTING REQUIREMENTS. 

‘‘(a) RURAL BUSINESS INVESTMENT COMPANIES.—Each rural 

business investment company that participates in the program established under this subtitle shall provide to the Secretary such information as the Secretary may require, including—

‘‘(1) information relating to the measurement criteria that 

the rural business investment company proposed in the program application of the rural business investment company; 

and 

‘‘(2) in each case in which the rural business investment 

company under this subtitle makes an investment in, or a loan 

or grant to, a business that is not located in a rural area, a report on the number and percentage of employees of the business 

who reside in those areas. 

‘‘(b) PUBLIC REPORTS.—

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‘‘(1) IN GENERAL.—The Secretary shall prepare and make 

available to the public an annual report on the program established under this subtitle, including detailed information on— ‘‘(A) the number of rural business investment companies licensed by the Secretary during the previous fiscal 

year; ‘‘(B) the aggregate amount of leverage that rural business investment companies have received from the Federal 

Government during the previous fiscal year; ‘‘(C) the aggregate number of each type of leveraged instruments used by rural business investment companies 

during the previous fiscal year and how each number compares to previous fiscal years; ‘‘(D) the number of rural business investment company 

licenses surrendered and the number of rural business investment companies placed in liquidation during the previous fiscal year, identifying the amount of leverage each 

rural business investment company has received from the 

Federal Government and the type of leverage instruments 

each rural business investment company has used; ‘‘(E) the amount of losses sustained by the Federal Government as a result of operations under this subtitle during 

the previous fiscal year and an estimate of the total losses 

that the Federal Government can reasonably expect to incur 

as a result of the operations during the current fiscal year; ‘‘(F) actions taken by the Secretary to maximize 

recoupment of funds of the Federal Government expended 

to implement and administer the Rural Business Investment Program under this subtitle during the previous fiscal 

year and to ensure compliance with the requirements of this 

subtitle (including regulations); ‘‘(G) the amount of Federal Government leverage that 

each licensee received in the previous fiscal year and the 

types of leverage instruments each licensee used; ‘‘(H) for each type of financing instrument, the sizes, 

types of geographic locations, and other characteristics of 

the small business investment companies using the instrument during the previous fiscal year, including the extent 

to which the investment companies have used the leverage 

from each instrument to make loans or equity investments 

in rural areas; and 

‘‘(I) the actions of the Secretary to carry out this subtitle. 

‘‘(2) PROHIBITION.—In compiling the report required under 

paragraph (1), the Secretary may not—

‘‘(A) compile the report in a manner that permits identification of any particular type of investment by an individual rural business investment company or small business concern in which a rural business investment company 

invests; and 

‘‘(B) may not release any information that is prohibited 

under section 1905 of title 18, United States Code. 

‘‘SEC. 384L. EXAMINATIONS. 

‘‘(a) IN GENERAL.—Each rural business investment company 

that participates in the program established under this subtitle 

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shall be subject to examinations made at the direction of the Secretary in accordance with this section. 

‘‘(b) ASSISTANCE OF PRIVATE SECTOR ENTITIES.—An examination under this section may be conducted with the assistance of a 

private sector entity that has the qualifications and the expertise 

necessary to conduct such an examination. 

‘‘(c) COSTS.—

‘‘(1) IN GENERAL.—The Secretary may assess the cost of an 

examination under this section, including compensation of the 

examiners, against the rural business investment company examined. 

‘‘(2) PAYMENT.—Any rural business investment company 

against which the Secretary assesses costs under this paragraph 

shall pay the costs. 

‘‘(d) DEPOSIT OF FUNDS.—Funds collected under this section 

shall—

‘‘(1) be deposited in the account that incurred the costs for 

carrying out this section; 

‘‘(2) be made available to the Secretary to carry out this section, without further appropriation; and 

‘‘(3) remain available until expended. 

‘‘SEC. 384M. INJUNCTIONS AND OTHER ORDERS. 

‘‘(a) IN GENERAL.—

‘‘(1) APPLICATION BY SECRETARY.—Whenever, in the judgment of the Secretary, a rural business investment company or 

any other person has engaged or is about to engage in any act 

or practice that constitutes or will constitute a violation of a 

provision of this subtitle (including any rule, regulation, order, 

or participation agreement under this subtitle), the Secretary 

may apply to the appropriate district court of the United States 

for an order enjoining the act or practice, or for an order enforcing compliance with the provision, rule, regulation, order, or 

participation agreement. 

‘‘(2) JURISDICTION; RELIEF.—The court shall have jurisdiction over the action and, on a showing by the Secretary that the 

rural business investment company or other person has engaged 

or is about to engage in an act or practice described in paragraph (1), a permanent or temporary injunction, restraining 

order, or other order, shall be granted without bond. 

‘‘(b) JURISDICTION.—

‘‘(1) IN GENERAL.—In any proceeding under subsection (a), 

the court as a court of equity may, to such extent as the court 

considers necessary, take exclusive jurisdiction over the rural 

business investment company and the assets of the rural business investment company, wherever located. 

‘‘(2) TRUSTEE OR RECEIVER.—The court shall have jurisdiction in any proceeding described in paragraph (1) to appoint a 

trustee or receiver to hold or administer the assets. 

‘‘(c) SECRETARY AS TRUSTEE OR RECEIVER.—

‘‘(1) AUTHORITY.—The Secretary may act as trustee or receiver of a rural business investment company. 

‘‘(2) APPOINTMENT.—On the request of the Secretary, the 

court shall appoint the Secretary to act as a trustee or receiver 

of a rural business investment company unless the court conVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00275 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
272

siders the appointment inequitable or otherwise inappropriate 

by reason of any special circumstances involved. 

‘‘SEC. 384N. ADDITIONAL PENALTIES FOR NONCOMPLIANCE. 

‘‘(a) IN GENERAL.—With respect to any rural business investment company that violates or fails to comply with this subtitle (including any rule, regulation, order, or participation agreement 

under this subtitle), the Secretary may, in accordance with this section—

‘‘(1) void the participation agreement between the Secretary 

and the rural business investment company; and 

‘‘(2) cause the rural business investment company to forfeit 

all of the rights and privileges derived by the rural business investment company under this subtitle. 

‘‘(b) ADJUDICATION OF NONCOMPLIANCE.—

‘‘(1) IN GENERAL.—Before the Secretary may cause a rural 

business investment company to forfeit rights or privileges 

under subsection (a), a court of the United States of competent 

jurisdiction must find that the rural business investment company committed a violation, or failed to comply, in a cause of 

action brought for that purpose in the district, territory, or 

other place subject to the jurisdiction of the United States, in 

which the principal office of the rural business investment company is located. 

‘‘(2) PARTIES AUTHORIZED TO FILE CAUSES OF ACTION.—

Each cause of action brought by the United States under this 

subsection shall be brought by the Secretary or by the Attorney 

General. 

‘‘SEC. 384O. UNLAWFUL ACTS AND OMISSIONS; BREACH OF FIDUCIARY 

DUTY. 

‘‘(a) PARTIES DEEMED TO COMMIT A VIOLATION.—Whenever any 

rural business investment company violates this subtitle (including 

any rule, regulation, order, or participation agreement under this 

subtitle), by reason of the failure of the rural business investment 

company to comply with this subtitle or by reason of its engaging 

in any act or practice that constitutes or will constitute a violation 

of this subtitle, the violation shall also be deemed to be a violation 

and an unlawful act committed by any person that, directly or indirectly, authorizes, orders, participates in, causes, brings about, 

counsels, aids, or abets in the commission of any acts, practices, or 

transactions that constitute or will constitute, in whole or in part, 

the violation. 

‘‘(b) FIDUCIARY DUTIES.—It shall be unlawful for any officer, director, employee, agent, or other participant in the management or 

conduct of the affairs of a rural business investment company to engage in any act or practice, or to omit any act or practice, in breach 

of the fiduciary duty of the officer, director, employee, agent, or participant if, as a result of the act or practice, the rural business investment company suffers or is in imminent danger of suffering financial loss or other damage. ‘‘(c) UNLAWFUL ACTS.—Except with the written consent of the 

Secretary, it shall be unlawful— ‘‘(1) for any person to take office as an officer, director, or 

employee of any rural business investment company, or to become an agent or participant in the conduct of the affairs or 

273

management of a rural business investment company, if the 

person—

‘‘(A) has been convicted of a felony, or any other criminal offense involving dishonesty or breach of trust; or 

‘‘(B) has been found liable in a civil action for damages, or has been permanently or temporarily enjoined by 

an order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud or 

breach of trust; and 

‘‘(2) for any person to continue to serve in any of the capacities described in paragraph (1), if—

‘‘(A) the person is convicted of a felony or any other 

criminal offense involving dishonesty or breach of trust; or 

‘‘(B) the person is found liable in a civil action for 

damages, or is permanently or temporarily enjoined by an 

order, judgment, or decree of a court of competent jurisdiction, by reason of any act or practice involving fraud or 

breach of trust. 

‘‘SEC. 384P. REMOVAL OR SUSPENSION OF DIRECTORS OR OFFICERS. 

‘‘Using the procedures established by the Secretary for removing 

or suspending a director or an officer of a rural business investment 

company, the Secretary may remove or suspend any director or officer of any rural business investment company. 

‘‘SEC. 384Q. CONTRACTING OF FUNCTIONS. 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of law, 

to carry out the day-to-day management and operation of the program authorized by this subtitle on behalf of the Secretary, the Secretary shall enter into an interagency agreement under section 1535 

of title 31, United States Code, with another Federal agency that 

has considerable expertise in operating a program under which capital is provided for equity investments in private sector companies. 

‘‘(b) FUNDING.—The costs incurred by a Federal agency entering 

into an agreement under subsection (a) shall be reimbursed in accordance with section 1535 of title 31, United States Code, from 

amounts made available under section 384S(a)(2). 

‘‘SEC. 384R. REGULATIONS. 

‘‘The Secretary may promulgate such regulations as the Secretary considers necessary to carry out this subtitle.

‘‘SEC. 384S. FUNDING. 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of law, 

of the funds of the Commodity Credit Corporation, the Secretary 

shall make available—

‘‘(1) such sums as may be necessary for the cost of guaranteeing $280,000,000 of debentures under this subtitle; and 

‘‘(2) $44,000,000 to make grants under this subtitle. 

‘‘(b) AVAILABILITY OF FUNDS.—Funds transferred under subsection (a) shall remain available until expended.’’. 

SEC. 6030. RURAL STRATEGIC INVESTMENT PROGRAM. 

The Consolidated Farm and Rural Development Act (as amended by section 6029) is amended by adding at the end the following: 

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‘‘Subtitle I—Rural Strategic Investment 

Program 

‘‘SEC. 385A. PURPOSE. 

‘‘The purpose of this subtitle is to establish a rural strategic investment program—

‘‘(1) to provide rural communities with flexible resources to 

develop comprehensive, collaborative, and locally-based strategic planning processes; and 

‘‘(2) to implement innovative community and economic development strategies that optimize regional competitive advantages. 

‘‘SEC. 385B. DEFINITIONS. 

‘‘In this subtitle: 

‘‘(1) BENCHMARK.—The term ‘benchmark’ means an annual 

set of strategies and goals of a Regional Board established for 

the purpose of measuring performance in meeting the regional 

plan of the Regional Board. 

‘‘(2) CONFERENCE.—The term ‘‘Conference’’ means the National Conference on Rural America conducted under section 

385H. 

‘‘(3) ELIGIBLE AREA.—

‘‘(A) IN GENERAL.—The term ‘eligible area’ means a 

nonmetropolitan county (as defined by the Secretary) that 

has a population of 50,000 inhabitants or less. 

‘‘(B) INCLUSION.—

‘‘(i) IN GENERAL.—Subject to clause (ii), the term 

‘eligible area’ includes an unincorporated or other area 

of a county that has a population of more than 50,000 

inhabitants if the unincorporated area or other area is 

adjacent to an eligible rural area described in subparagraph (A). 

‘‘(ii) PARTICIPATION.—An area described in clause 

(i) may be represented on a Regional Board. 

‘‘(C) EXCLUSION.—The term ‘eligible area’ does not include any area designated by the Secretary as a rural empowerment zone or rural enterprise community. 

‘‘(4) INNOVATION GRANT.—The term ‘innovation grant’

means an innovation grant made by the National Board to a 

Regional Board under section 385G. 

‘‘(5) NATIONAL BOARD.—The term ‘National Board’ means 

the National Board on Rural America established under section 

385D(a). 

‘‘(6) NATIONAL PLAN.—The term ‘national plan’ means a national strategic investment plan of the National Board developed under section 385D(d)(3). 

‘‘(7) PLANNING GRANT.—The term ‘planning grant’ means a 

regional strategic investment planning grant made by the National Board to a Regional Board under section 385F. 

‘‘(8) PROGRAM.—The term ‘program’ means the rural strategic investment program established under this subtitle. 

‘‘(9) REGION.—The term ‘region’ means the eligible areas 

that—

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‘‘(A) are under the jurisdiction of a Regional Board; 

and ‘‘(B) meet criteria established by the National Board 

not later than 1 year after the date of enactment of this 

subtitle. 

‘‘(10) REGIONAL BOARD.—The term ‘Regional Board’ means 

a Regional Investment Board certified under section 385C(a). ‘‘(11) REGIONAL PLAN.—The term ‘regional plan’ means a 

regional strategic investment plan of a Regional Board developed under section 385C(b)(3)(B). 

‘‘SEC. 385C. REGIONAL INVESTMENT BOARDS. 

‘‘(a) IN GENERAL.—The National Board may certify a group representing the interests described in subsection (b)(2)(A) as a Regional Investment Board created to develop and implement a regional strategic investment plan for grants made under this subtitle 

to promote investment in eligible areas. ‘‘(b) REQUIREMENTS FOR CERTIFICATION.— ‘‘(1) IN GENERAL.—A Regional Board shall meet the requirements of this subsection for certification. ‘‘(2) COMPOSITION.— ‘‘(A) IN GENERAL.—A Regional Board shall be composed of residents of the region that broadly represent diverse public, nonprofit, and private sector interests in investment in the region, including (to the maximum extent 

practicable) representatives of— ‘‘(i) units of local government (including multijurisdictional units of local government); ‘‘(ii) in the case of regions with Indian populations, 

Indian tribes (as defined in section 4 of the Indian 

Self-Determination and Education Assistance Act (25 

U.S.C. 450b)); ‘‘(iii) private nonprofit community-based development organizations; ‘‘(iv) regional development organizations; 

‘‘(v) private business organizations; 

‘‘(vi) other entities and organizations, as determined by the Regional Board; and ‘‘(vii) consortia of entities and organizations described in clauses (i) through (vii). 

‘‘(B) LOCAL PUBLIC-PRIVATE REPRESENTATION.—Of the 

members of a Regional Board, to the maximum extent practicable—

‘‘(i) 1⁄2 of the members shall be representatives of 

units of local government and Indian tribes described 

in subparagraph (A); and 

‘‘(ii) 1⁄2 of the members shall be representatives of 

nonprofit, regional, private, and other entities and organizations described in subparagraph (A). 

‘‘(C) EX-OFFICIO MEMBERS.—

‘‘(i) IN GENERAL.—An officer or employee of a Federal or State agency may serve as an ex-officio, non-voting member of a Regional Board representing the agency. 

‘‘(ii) CONFLICTS.—Participation by a Federal officer 

or employee in activities of the Regional Board shall 

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not constitute a violation of section 205 or 208 of title 

18, United States Code. 

‘‘(D) CERTIFICATION.—To be certified by the National 

Board, a Regional Board shall demonstrate to the National 

Board that the Regional Board is broadly representative of 

the interests described in subparagraph (A). ‘‘(E) APPEALS.— ‘‘(i) IN GENERAL.—Prior to certification of the Regional Board by the National Board, representatives of 

interests described in subparagraph (A) that participated in the development of a Regional Board may appeal the composition of the Regional Board to the National Board on the ground that— ‘‘(I) the composition of the Regional Board 

does not adequately reflect the purposes of the program; or ‘‘(II) the selection process for the Regional 

Board unfairly disadvantaged those interests. 

‘‘(ii) ACTION BY NATIONAL BOARD.—The National 

Board shall act on any appeal of the composition of a 

Regional Board before taking action on the certification 

of the Regional Board. ‘‘(3) DUTIES AND PURPOSE.—The organizational documents 

of the proposed Regional Board shall demonstrate that, on certification, the Regional Board shall— ‘‘(A) create a collaborative, inclusive public-private 

planning process; ‘‘(B) develop, and submit to the National Board for approval, a regional strategic investment plan that meets the 

requirements of section 385F, with benchmarks, to promote 

investment in eligible areas through the use of grants made 

available under this subtitle; ‘‘(C) implement the approved regional plan; 

‘‘(D) provide annual reports to the Secretary and the 

National Board on progress made in achieving the benchmarks of the regional plan, including an annual financial 

statement; and ‘‘(E) select a non-Federal organization (such as a regional development organization) in the local area served 

by the Regional Board that has previous experience in the 

management of Federal funds to serve as fiscal manager of 

any funds of the Regional Board. 

‘‘SEC. 385D. NATIONAL BOARD ON RURAL AMERICA. 

‘‘(a) ESTABLISHMENT.—

‘‘(1) IN GENERAL.—The Secretary shall establish a National 

Board on Rural America to carry out the rural strategic investment program established under this subtitle. 

‘‘(2) SUPERVISION AND DIRECTION.—Except as otherwise 

provided in this subtitle, the National Board shall be subject to 

the general supervision and direction of the Secretary. 

‘‘(b) COMPOSITION.—

‘‘(1) IN GENERAL.—

‘‘(A) APPOINTMENT.—In addition to the Secretary or the 

designee of the Secretary, the National Board shall consist 

of 14 members appointed by the Secretary from among—

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‘‘(i) representatives of nationally recognized entrepreneurship organizations; ‘‘(ii) representatives of regional planning and development organizations; ‘‘(iii) representatives of community-based organizations; ‘‘(iv) elected members of county governments; 

‘‘(v) elected members of State legislatures; 

‘‘(vi) representatives of the rural philanthropic 

community; and ‘‘(vii) representatives of Indian tribes (as defined in 

section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)). 

‘‘(B) RECOMMENDATIONS.—In appointing the members 

of the National Board under subparagraph (A), the Secretary shall consider recommendations made by— ‘‘(i) the chairman and ranking member of each of 

the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate; ‘‘(ii) the Majority Leader of the Senate; and 

‘‘(iii) the Speaker of the House of Representatives. ‘‘(3) TERM OF OFFICE.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), the 

term of office of a member of the National Board appointed 

under paragraph (1)(A) shall be 4 years. ‘‘(B) STAGGERED INITIAL TERMS.—Of the initial members of the National Board appointed under paragraph 

(1)(A), the term of office of— ‘‘(i) 5 members shall be 4 years; 

‘‘(ii) 5 members shall be 3 years; and 

‘‘(iii) 4 members shall be 2 years. ‘‘(4) INITIAL APPOINTMENTS.—Not later than 90 days after 

the date of enactment of this subtitle, the Secretary shall appoint the initial members of the National Board under paragraph (1)(A). 

‘‘(5) EX-OFFICIO MEMBERS.— ‘‘(A) SPECIAL ASSISTANT TO THE PRESIDENT FOR RURAL

POLICY.—If appointed by the President under section 

6406(1) of the Farm Security and Rural Investment Act of 

2002, the Special Assistant to the President for Rural Policy shall serve as an ex-officio, non-voting member of the 

National Board. ‘‘(B) OTHER MEMBERS.—In consultation with the chairman and ranking member of each of the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, the Secretary may appoint not more than 3 other officers or employees of the Executive Branch to serve as exofficio, non-voting members of the National Board. 

‘‘(6) VACANCIES.—A vacancy on the National Board shall be 

filled in the same manner as the original appointment. 

‘‘(7) COMPENSATION.—A member of the National Board 

shall receive no compensation for service on the National 

Board, but shall be reimbursed for travel and other expenses inVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00281 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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curred in carrying out the duties of the member of the National 

Board in accordance with section 5702 and 5703 of title 5, 

United States Code. 

‘‘(8) CHAIRPERSON.—The National Board shall select a 

chairperson from among the members of the National Board. 

‘‘(9) MEETINGS.—

‘‘(A) TIME AND PLACE.—The National Board shall meet 

at the call of the chairperson. 

‘‘(B) QUORUM.—A quorum of the National Board shall 

consist of a majority of the members. 

‘‘(C) MAJORITY VOTE.—A decision of the National 

Board shall be made by majority vote. 

‘‘(10) FEDERAL STATUS.—For purposes of Federal law, a 

member of the National Board shall be considered a special 

Government employee (as defined in section 202(a) of title 18, 

United States Code). 

‘‘(11) CONFLICT OF INTEREST.—

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

(C), no member of the National Board shall vote on any 

matter respecting any application for a grant or other particular matter pending before the National Board in which, 

to the knowledge of the member, the member, spouse, or 

child of the member, partner, or organization in which the 

member is serving as officer, director, trustee, partner, or 

employee, or any person or organization with whom the 

member is negotiating or has any arrangement concerning 

prospective employment, has a financial interest. 

‘‘(B) VIOLATIONS.—A violation of subparagraph (A) by 

a member of the National Board shall be cause for removal 

of the member, but shall not impair or otherwise affect the 

validity of any otherwise lawful action by the National 

Board in which the member participated.

‘‘(C) EXCEPTION.—Subparagraph (A) shall not apply to 

the extent a member of the National Board advises the National Board of the nature of the particular matter in 

which the member proposes to participate, if—

‘‘(i) the member makes a full disclosure of the financial interest; and 

‘‘(ii) prior to any participation by the member, the 

National Board determines, by majority vote of the 

other members of the National Board, that the financial interest is too remote or too inconsequential to affect the integrity of the services of the member to the 

National Board in that matter. 

‘‘(c) ADMINISTRATIVE SUPPORT.—The Secretary, on a reimbursable basis, may provide such administrative support to the National 

Board as the Secretary determines is necessary to carry out the duties of the National Board. 

‘‘(d) DUTIES.—The National Board shall—

‘‘(1) certify Regional Boards in accordance with section 

385C, with the initial certification of Regional Boards occurring 

not later than 540 days after the date of enactment of this subtitle; 

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‘‘(2) approve, negotiate, or disapprove each regional plan 

that is submitted by a Regional Board to the National Board 

under section 385C; 

‘‘(3) develop, and submit to the Secretary for approval, a 

national strategic investment plan; 

‘‘(4) use the amount received from the Secretary under section 385E to make planning grants and innovation grants to 

Regional Boards and to otherwise carry out the program; 

‘‘(5) provide leadership and advice to Regional Boards on 

issues, best practices, and emerging trends relating to rural development; 

‘‘(6) evaluate the progress of each Regional Board in achieving the benchmarks of the regional plan using annual reports 

submitted under section 385C(b)(3)(D) and any other information that is available to the Regional Board; and 

‘‘(7) submit an annual report on the performance of Regional Boards and the program to—

‘‘(A) the Committee on Agriculture of the House of Representatives; 

‘‘(B) the Committee on Agriculture, Nutrition, and Forestry of the Senate; and 

‘‘(C) the Secretary. 

‘‘SEC. 385E. RURAL STRATEGIC INVESTMENT PROGRAM. 

‘‘(a) IN GENERAL.—If the Secretary approves a national strategic investment plan submitted by the National Board, of the funds 

of the Commodity Credit Corporation, the Secretary shall transfer 

to the National Board $100,000,000, to remain available until expended, for the Board to use to make planning grants and innovation grants to Regional Boards and to otherwise carry out this subtitle. 

‘‘(b) USE BY NATIONAL BOARD.—Of the amount transferred by 

the Secretary to the National Board under subsection (a), the National Board shall use—

‘‘(1) not less than $8,000,000 to make planning grants to 

Regional Boards under section 385F; 

‘‘(2) not less than $87,000,000 to make innovation grants to 

Regional Boards under section 385G; and 

‘‘(3) the remainder of the funds to carry out section 385H 

and administer this subtitle (other than section 385H). 

‘‘SEC. 385F. REGIONAL STRATEGIC INVESTMENT PLANNING GRANTS. 

‘‘(a) IN GENERAL.—The National Board shall use amounts 

made available under section 385E(b)(1) to make not fewer than 80 

planning grants, on a competitive basis, to applicant Regional 

Boards to develop, maintain, evaluate, and report progress on regional strategic investment plans in accordance with section 385C 

and this section. 

‘‘(b) REGIONAL PLANS.—A regional plan for a region covered by 

a Regional Board shall, to the maximum extent practicable, cover—

‘‘(1) basic infrastructure needs of the region; 

‘‘(2) basic services within the region; 

‘‘(3) opportunities for economic diversification and innovation within the region, with particular attention to entrepreneurial support and innovation; 

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‘‘(4) the current and future human resource capacity of the 

region; 

‘‘(5) access to market-based financing and venture and equity capital in the region; 

‘‘(6) the development of innovative public and private collaborations for investments in the region; and 

‘‘(7) other appropriate matters, as determined by the National Board and the Secretary. 

‘‘(c) PREFERENCES.—In awarding planning grants, the National 

Board shall give a preference to planning grants that will be used 

to address community capacity building and community sustainability. 

‘‘(d) AMOUNT.—The total amount of a planning grant made to 

a Regional Board shall not exceed $100,000. 

‘‘(e) COST SHARING.—

‘‘(1) IN GENERAL.—Subject to paragraphs (2) and (3), the 

share of the costs of developing, maintaining, evaluating, and 

reporting on a regional plan funded by a grant under this section shall not exceed 50 percent. 

‘‘(2) FORM.—

‘‘(A) IN GENERAL. Except as provided in subparagraph 

(B), a Regional Board shall pay the grantee share of the 

costs described in paragraph (1) in the form of cash, services, materials, or other in-kind contributions. 

‘‘(B) LIMITATION.—A grantee shall not pay more than 

50 percent of the grantee share in the form of services, materials, or other in-kind contributions. 

‘‘(3) INCREASED SHARE.—The National Board may increase 

the share of the costs covered by a planning grant made to a 

Regional Board under this section if a limited ability of the Regional Board to pay would otherwise create a barrier to full 

participation in the program. 

‘‘SEC. 385G. INNOVATION GRANTS. 

‘‘(a) IN GENERAL.—The National Board shall use amounts 

made available under section 385E(b)(2) to make innovation grants, 

on a competitive basis, to Regional Boards to implement projects 

that are identified in the regional plans of the Regional Boards. 

‘‘(b) ELIGIBILITY.—

‘‘(1) IN GENERAL.—For a Regional Board to be eligible to receive an innovation grant, the National Board shall determine 

that—

‘‘(A) the regional plan of a Regional Board meets the 

requirements of this subtitle; 

‘‘(B) the management and organizational structure of 

the Regional Board is sufficient to oversee grant projects; 

‘‘(C) the Regional Board will be able to provide the 

grantee share required under this section; and 

‘‘(D) the Regional Board agrees to achieve, to the maximum extent practicable, the performance-based benchmarks of the regional plan. 

‘‘(2) RELATIONSHIP TO PLANNING GRANTS.—A Regional 

Board that meets the requirements of paragraph (1) shall be eligible to receive an innovation grant, regardless of whether the 

Regional Board receives a planning grant. 

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‘‘(c) SELECTION.—Subject to subsection (d), of the applications 

submitted by Regional Boards for innovation grants, the National 

Board shall, to the maximum extent practicable, select not fewer 

than 30 regional boards to receive innovation grants. 

‘‘(d) PREFERENCES.—In awarding innovation grants, the National Board shall give a preference (in order of priority) to Regional 

Boards that—

‘‘(1) exhibit collaborative innovation and entrepreneurship, 

particularly within a public-private partnership; 

‘‘(2) represent a broad coalition of interests described in section 385C(b)(2)(A); 

‘‘(3) demonstrate a plan to leverage public (Federal and 

non-federal) and private funds and existing assets, including 

natural assets and public infrastructure; 

‘‘(4) address gaps in existing basic services within a region; 

‘‘(5) address economic diversification, including agricultural and non-agriculturally based economies, within a regional 

framework; 

‘‘(6) demonstrate a plan to achieve multijurisdictional regional planning and development, with particular evidence of 

economic development successes within diverse stakeholder 

frameworks; or 

‘‘(7) meet other community development needs identified by 

a Regional Board. 

‘‘(e) USES.—

‘‘(1) LEVERAGE.—A Regional Board shall prioritize projects, 

in part, on the degree to which the Regional Board is able to 

leverage additional funds for the implementation of the projects. 

‘‘(2) PURPOSES.—A Regional Board may use an innovation 

grant provided for a region—

‘‘(A) to support the development of critical infrastructure necessary to facilitate economic development in the region; 

‘‘(B) to provide assistance to entities within the region 

that provide basic public services; 

‘‘(C) to assist with job training, workforce development, 

or other needs related to the development and maintenance 

of strong local and regional economies; 

‘‘(D) to assist in the development of unique new collaborations that link public, private, and philanthropic resources to achieve collaboratively designed regional advancement; and 

‘‘(E) to provide support to business investment. 

‘‘(3) OTHER DEPARTMENT PROGRAMS.—A Regional Board 

may not use an innovation grant provided for a region for any 

purpose for which funding may be obtained under any other 

rural development program of the Department of Agriculture 

unless—

‘‘(A) the Regional Board—

‘‘(i) has submitted an application for the funding 

under the other program; and 

‘‘(ii) withdraws the application; and 

‘‘(B) the National Board approves use of the innovation 

grant for that purpose. 

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‘‘(4) OPERATING EXPENSES.—A Regional Board may use for 

administrative costs in carrying out programs and activities related to the grant the greater of—

‘‘(A) $100,000; or 

‘‘(B) 5 percent of the amount of an innovation grant 

provided. 

‘‘(f) AMOUNT.—

‘‘(1) IN GENERAL.—The amount of an innovation grant 

made to a Regional Board shall not exceed $3,000,000. 

‘‘(2) AVAILABILITY.—The amount of an innovation grant 

made to a Regional Board shall remain available until expended. 

‘‘(g) COST SHARING.—

‘‘(1) IN GENERAL.—Subject to paragraphs (2) and (3), the 

share of the costs of projects covered by an innovation grant 

made to a Regional Board under this section shall not exceed 

75 percent, as determined by the National Board. 

‘‘(2) FORM.—A Regional Board may pay the grantee share 

of the costs of projects covered by an innovation grant in the 

form of cash or services, materials, or other in-kind contributions. 

‘‘(3) WAIVER OF GRANTEE SHARE.—The National Board may 

waive the grantee share of the costs of projects covered by an 

innovation grant made to a Regional Board under this section 

if the National Board determines that such a waiver is appropriate. 

‘‘(4) OTHER FEDERAL PROGRAMS.—For the purpose of determining grantee share requirements for any other Federal programs, funds provided for innovation grants shall be considered to be non-Federal funds. 

‘‘(h) NEGOTIATION.—The National Board may—

‘‘(1) negotiate with a Regional Board on the substance, size, 

and scope of a regional plan; and 

‘‘(2) approve an innovation grant for an amount that is 

lower than the amount requested by the Regional Board. 

‘‘(i) NONCOMPLIANCE.—If a Regional Board fails to comply with 

the requirements of this section, the National Board may take such 

actions as are necessary to obtain reimbursement of unused grant 

funds. 

‘‘(j) OTHER USES.—The National Board may use not more than 

5 percent of the amounts made available for innovation grants—

‘‘(1) to provide assistance to interests described in section 

385C(b)(2)(A) to obtain certification of a Regional Board; 

‘‘(2) to provide assistance for emergent innovative opportunities that are not covered by existing regional plans; 

‘‘(3) to provide technical assistance, research, organizational support, and other capacity building infrastructure to 

support existing Regional Boards; 

‘‘(4) to provide assistance for other entrepreneurial opportunities to advance the goals of the program; or 

‘‘(5) to advance a more integrative rural policy framework 

for the United States. 

‘‘(k) TRANSFERS.—To ensure maximum use of funds provided 

under this subtitle, the National Board may transfer not more than 

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10 percent of the amount of funds made available between planning 

grants and innovation grants. 

‘‘SEC. 385H. NATIONAL CONFERENCE ON RURAL AMERICA. 

‘‘(a) IN GENERAL.—The President shall call and conduct a National Conference on Rural America, which shall be held not earlier 

than November 1, 2002, and not later than October 30, 2004. ‘‘(b) PURPOSE.—The purpose of the Conference shall be to bring 

together the resources of governmental agencies and the private and 

nonprofit sectors to develop— ‘‘(1) policy recommendations and integrative strategies for 

addressing the unique challenges facing rural areas of the 

United States; and ‘‘(2) an implementation plan, with outcome-based measurements, for addressing the challenges. 

‘‘(c) COMPOSITION.— ‘‘(1) IN GENERAL.—The Conference shall be comprised of— ‘‘(A) representatives of organizations devoted to rural 

development; ‘‘(B) Members of Congress, including the chairman and 

ranking member of each of the Committee on Agriculture of 

the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate; ‘‘(C) representatives of the Department of Agriculture 

and other Federal agencies; ‘‘(D) State, local, and tribal elected officials and representatives; ‘‘(E) representatives of colleges and universities, State 

and tribal extension services, and State rural development 

councils; and ‘‘(F) individuals with specialized knowledge of and expertise in rural and community development, cooperative 

business, agricultural credit, venture capital, health care, 

and rural demography. 

‘‘(2) SELECTION.—Of the participants in the Conference described in paragraph (1)— ‘‘(A) 1⁄3 of the members shall be selected by the President; ‘‘(B) 1⁄3 of the members shall be selected by the Chairman and the ranking member of the Committee on Agriculture of the House of Representatives; and ‘‘(C) 1⁄3 of the members shall be selected by the Chairman and the ranking member of the Committee on Agriculture, Nutrition, and Forestry of the Senate. 

‘‘(3) REPRESENTATION.—In selecting the participants of the 

Conference, the President and the Chairman of each Committee 

referred to in paragraph (2) shall ensure, to the maximum extent practicable, that the participants are representative of the 

ethnic, racial, and linguistic diversity of rural areas of the 

United States. 

‘‘(d) REPORT.—

‘‘(1) REPORT TO PRESIDENT.—Not later than 120 days after 

the termination of the Conference, the Conference shall submit 

to the President a report that contains the findings and recommendations of the Conference, including findings and recommendations to address needs related to—

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‘‘(A) telecommunications; 

‘‘(B) rural health issues; 

‘‘(C) transportation; 

‘‘(D) opportunities for economic diversification and innovation within rural America, with particular attention to 

entrepreneurial support and innovation; ‘‘(E) the current and future human resource capacity of 

rural America; ‘‘(F) access to market-based financing and venture and 

equity capital in rural America; and ‘‘(G) the development of innovative public and private 

collaborations for investments in rural America. 

‘‘(2) REPORT MADE PUBLIC AND TO CONGRESS.—Not later 

than 90 days after receipt by the President, the President 

shall— ‘‘(A) make the report public; and 

‘‘(B) transmit to the Committee on Agriculture of the 

House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a copy of the 

report and a statement of the President containing recommendations for implementing the report. 

‘‘(3) PUBLICATION AND DISTRIBUTION.—

‘‘(A) IN GENERAL.—The Conference shall publish and 

distribute the report described in paragraph (1). 

‘‘(B) MANDATORY DISTRIBUTION.—The Conference shall 

provide a copy of a report published under subparagraph 

(A), at no cost, to—

‘‘(i) each Federal depository library; and

‘‘(ii) on request, each State, tribal, and local elected 

official in a rural area of the United States. 

‘‘(e) FUNDING.—Not later than 180 days after the establishment 

of the National Board, the National Board shall transfer not more 

than $2,000,000 to the Office of the President to carry out this section, to remain available until expended.’’. 

SEC. 6031. FUNDING OF PENDING RURAL DEVELOPMENT LOAN AND 

GRANT APPLICATIONS. 

(a) DEFINITION OF APPLICATION.—In this section, the term ‘‘application’’ does not include an application for a loan or grant that, 

as of the date of enactment of this Act, is in the preapplication 

phase of consideration under regulations of the Secretary of Agriculture in effect on the date of enactment of this Act. 

(b) USE OF FUNDS.—Subject to subsection (c), the Secretary of 

Agriculture shall use funds made available under subsection (d) to 

provide funds for applications that are pending on the date of enactment of this Act for—

(1) water or waste disposal grants or direct loans under 

paragraph (1) or (2) of section 306(a) of the Consolidated Farm 

and Rural Development Act (7 U.S.C. 1926(a)); and 

(2) emergency community water assistance grants under 

section 306A of that Act (7 U.S.C. 1926a). 

(c) LIMITATIONS.—

(1) APPROPRIATED AMOUNTS.—Funds made available under 

this section shall be available to the Secretary to provide funds 

for applications for loans and grants described in subsection (b) 

that are pending on the date of enactment of this Act only to 

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the extent that funds for the loans and grants appropriated in 

the annual appropriations Act for fiscal year 2002 have been exhausted. 

(2) PROGRAM REQUIREMENTS.—The Secretary may use 

funds made available under this section to provide funds for a 

pending application for a loan or grant described in subsection 

(b) only if the Secretary processes, reviews, and approves the application in accordance with regulations in effect on the date of 

enactment of this Act. 

(3) PRIORITY.—In providing funding under this section for 

pending applications for loans or grants described in subsection 

(b), the Secretary shall provide funding in the following order 

of priority (until funds made available under this section are 

exhausted): 

(A) Pending applications for water systems. 

(B) Pending applications for waste disposal systems. 

(d) FUNDING.—Notwithstanding any other provision of law, of 

the funds of the Commodity Credit Corporation, the Secretary shall 

use $360,000,000 to carry out this section, to remain available until 

expended.

Subtitle B—Rural Electrification Act of 

1936

SEC. 6101. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR TELEPHONE PURPOSES. 

(a) IN GENERAL.—The Rural Electrification Act of 1936 is 

amended by inserting after section 313 (7 U.S.C. 940c) the following: 

‘‘SEC. 313A. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR TELEPHONE PURPOSES. 

‘‘(a) IN GENERAL.—Subject to subsection (b), the Secretary shall 

guarantee payments on bonds or notes issued by cooperative or other 

lenders organized on a not-for-profit basis if the proceeds of the 

bonds or notes are used to make loans for any electrification or telephone purpose eligible for assistance under this Act, including section 4 or 201 or to refinance bonds or notes issued for such purposes. 

‘‘(b) LIMITATIONS.—

‘‘(1) OUTSTANDING LOANS.—A lender shall not receive a 

guarantee under this section for a bond or note if, at the time 

of the guarantee, the total principal amount of such guaranteed 

bonds or notes outstanding of the lender would exceed the principal amount of outstanding loans of the lender for electrification or telephone purposes that have been made concurrently 

with loans approved for such purposes under this Act. 

‘‘(2) GENERATION OF ELECTRICITY.—The Secretary shall not 

guarantee payment on a bond or note issued by a lender, the 

proceeds of which are used for the generation of electricity. 

‘‘(3) QUALIFICATIONS.—The Secretary may deny the request 

of a lender for the guarantee of a bond or note under this section if the Secretary determines that—

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‘‘(A) the lender does not have appropriate expertise or 

experience or is otherwise not qualified to make loans for 

electrification or telephone purposes; ‘‘(B) the bond or note issued by the lender would not be 

investment grade quality without a guarantee; or ‘‘(C) the lender has not provided to the Secretary a list 

of loan amounts approved by the lender that the lender certifies are for eligible purposes described in subsection (a). 

‘‘(4) INTEREST RATE REDUCTION.— ‘‘(A) IN GENERAL.—Except as provided in subparagraph 

(B), a lender may not use any amount obtained from the reduction in funding costs as a result of the guarantee of a 

bond or note under this section to reduce the interest rate 

on a new or outstanding loan. ‘‘(B) CONCURRENT LOANS.—A lender may use any 

amount described in subparagraph (A) to reduce the interest rate on a loan if the loan is— ‘‘(i) made by the lender for electrification or telephone projects that are eligible for assistance under 

this Act; and ‘‘(ii) made concurrently with a loan approved by 

the Secretary under this Act for such a project, as provided in section 307. ‘‘(c) FEES.— ‘‘(1) IN GENERAL.—A lender that receives a guarantee issued 

under this section on a bond or note shall pay a fee to the Secretary. ‘‘(2) AMOUNT.—The amount of an annual fee paid for the 

guarantee of a bond or note under this section shall be equal 

to 30 basis points of the amount of the unpaid principal of the 

bond or note guaranteed under this section. ‘‘(3) PAYMENT.—A lender shall pay the fees required under 

this subsection on a semiannual basis. ‘‘(4) RURAL ECONOMIC DEVELOPMENT SUBACCOUNT.—Subject to subsection (e)(2), fees collected under this subsection shall 

be—

‘‘(A) deposited into the rural economic development 

subaccount maintained under section 313(b)(2)(A), to remain available until expended; and 

‘‘(B) used for the purposes described in section 

313(b)(2)(B). 

‘‘(d) GUARANTEES.—

‘‘(1) IN GENERAL.—A guarantee issued under this section 

shall—

‘‘(A) be for the full amount of a bond or note, including 

the amount of principal, interest, and call premiums; 

‘‘(B) be fully assignable and transferable; and 

‘‘(C) represent the full faith and credit of the United 

States. 

‘‘(2) LIMITATION.—To ensure that the Secretary has the resources necessary to properly examine the proposed guarantees, 

the Secretary may limit the number of guarantees issued under 

this section to 5 per year. ‘‘(3) DEPARTMENT OPINION.—On the timely request of a 

lender, the General Counsel of the Department of Agriculture 

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shall provide the Secretary with an opinion regarding the validity and authority of a guarantee issued to the lender under this 

section. 

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.— ‘‘(1) IN GENERAL.—There are authorized to be appropriated 

such sums as are necessary to carry out this section. ‘‘(2) FEES.—To the extent that the amount of funds appropriated for a fiscal year under paragraph (1) are not sufficient 

to carry out this section, the Secretary may use up to 1⁄3 of the 

fees collected under subsection (c) for the cost of providing guarantees of bonds and notes under this section before depositing 

the remainder of the fees into the rural economic development 

subaccount maintained under section 313(b)(2)(A). 

‘‘(f) TERMINATION.—The authority provided under this section 

shall terminate on September 30, 2007.’’. (b) ADMINISTRATION.— (1) REGULATIONS.—Not later than 180 days after the date 

of enactment of this Act, the Secretary of Agriculture shall promulgate regulations to carry out the amendments made by this 

section. 

(2) IMPLEMENTATION.—Not later than 240 days after the 

date of enactment of this Act, the Secretary shall implement the 

amendment made by this section. 

SEC. 6102. EXPANSION OF 911 ACCESS. 

Title III of the Rural Electrification Act of 1936 (7 U.S.C. 931 

et seq.) is amended by adding at the end the following: 

‘‘SEC. 315. EXPANSION OF 911 ACCESS. 

‘‘(a) IN GENERAL.—Subject to such terms and conditions as the 

Secretary may prescribe, the Secretary may make telephone loans 

under this title to borrowers of loans made by the Rural Utilities 

Service, State or local governments, Indian tribes (as defined in section 4 of the Indian Self-Determination and Education Assistance 

Act (25 U.S.C. 450b)), or other public entities for facilities and 

equipment to expand or improve 911 access and integrated emergency communications systems in rural areas. ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007.’’. 

SEC. 6103. ENHANCEMENT OF ACCESS TO BROADBAND SERVICE IN 

RURAL AREAS. 

(a) IN GENERAL.—The Rural Electrification Act of 1936 (7 

U.S.C. 901 et seq.) is amended by adding at the end the following: 

‘‘TITLE VI—RURAL BROADBAND ACCESS 

‘‘SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES 

IN RURAL AREAS. 

‘‘(a) PURPOSE.—The purpose of this section is to provide loans 

and loan guarantees to provide funds for the costs of the construction, improvement, and acquisition of facilities and equipment for 

broadband service in eligible rural communities. ‘‘(b) DEFINITIONS.—In this section: ‘‘(1) BROADBAND SERVICE.—The term ‘broadband service’

means any technology identified by the Secretary as having the 

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capacity to transmit data to enable a subscriber to the service 

to originate and receive high-quality voice, data, graphics, and 

video. ‘‘(2) ELIGIBLE RURAL COMMUNITY.—The term ‘eligible rural 

community’ means any incorporated or unincorporated place 

that— ‘‘(A) has not more than 20,000 inhabitants, based on 

the most recent available population statistics of the Bureau of the Census; and ‘‘(B) is not located in an area designated as a standard 

metropolitan statistical area. ‘‘(c) LOANS AND LOAN GUARANTEES.— ‘‘(1) IN GENERAL.—The Secretary shall make or guarantee 

loans to eligible entities described in subsection (d) to provide 

funds for the construction, improvement, or acquisition of facilities and equipment for the provision of broadband service in eligible rural communities. ‘‘(2) PRIORITY.—In making or guaranteeing loans under 

paragraph (1), the Secretary shall give priority to eligible rural 

communities in which broadband service is not available to residential customers. 

‘‘(d) ELIGIBLE ENTITIES.— ‘‘(1) IN GENERAL.—To be eligible to obtain a loan or loan 

guarantee under this section, an entity shall— ‘‘(A) have the ability to furnish, improve, or extend a 

broadband service to an eligible rural community; and ‘‘(B) submit to the Secretary a proposal for a project 

that meets the requirements of this section. 

‘‘(2) STATE AND LOCAL GOVERNMENTS.—A State or local 

government (including any agency, subdivision, or instrumentality thereof (including consortia thereof)) shall be eligible for 

a loan or loan guarantee under this section to provide 

broadband services to an eligible rural community only if, not 

later than 90 days after the Administrator has promulgated 

regulations to carry out this section, no other eligible entity is 

already offering, or has committed to offer, broadband services 

to the eligible rural community. 

‘‘(3) SUBSCRIBER LINES.—An entity shall not be eligible to 

obtain a loan or loan guarantee under this section if the entity 

serves more than 2 percent of the telephone subscriber lines installed in the aggregate in the United States. 

‘‘(e) BROADBAND SERVICE.—The Secretary shall, from time to 

time as advances in technology warrant, review and recommend 

modifications of rate-of-data transmission criteria for purposes of 

the identification of broadband service technologies under subsection (b)(1). 

‘‘(f) TECHNOLOGICAL NEUTRALITY.—For purposes of determining 

whether or not to make a loan or loan guarantee for a project under 

this section, the Secretary shall use criteria that are technologically 

neutral. ‘‘(g) TERMS AND CONDITIONS FOR LOANS AND LOAN GUARANTEES.—Notwithstanding any other provision of law, a loan or loan 

guarantee under subsection (c) shall— ‘‘(1) bear interest at an annual rate of, as determined by the 

Secretary—

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‘‘(A) in the case of a direct loan—

‘‘(i) the cost of borrowing to the Department of the 

Treasury for obligations of comparable maturity; or 

‘‘(ii) 4 percent; and 

‘‘(B) in the case of a guaranteed loan, the current applicable market rate for a loan of comparable maturity; and 

‘‘(2) have a term not to exceed the useful life of the assets 

constructed, improved, or acquired with the proceeds of the loan 

or extension of credit. 

‘‘(h) USE OF LOAN PROCEEDS TO REFINANCE LOANS FOR DEPLOYMENT OF BROADBAND SERVICE.—Notwithstanding any other 

provision of this Act, the proceeds of any loan made or guaranteed 

by the Secretary under this Act may be used by the recipient of the 

loan for the purpose of refinancing an outstanding obligation of the 

recipient on another telecommunications loan made under this Act 

if the use of the proceeds for that purpose will further the construction, improvement, or acquisition of facilities and equipment for the 

provision of broadband service in eligible rural communities. 

‘‘(i) REPORTS.—Not later than 1 year after the date of enactment 

of this section, and biennially thereafter, the Administrator shall 

submit to Congress a report that—

‘‘(1) describes how the Administrator determines under subsection (a)(1) that a service enables a subscriber to originate 

and receive high-quality voice, data, graphics, and video; and 

‘‘(2) provides a detailed list of services that have been 

granted assistance under this section. 

‘‘(j) FUNDING.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

law, of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section—

‘‘(A) $20,000,000 for each of fiscal years 2002 through 

2005, to remain available until expended; and 

‘‘(B) $10,000,000 for each of fiscal years 2006 and 

2007, to remain available until expended. 

‘‘(2) TELEVISION FUNDS.—

‘‘(A) IN GENERAL.—The Secretary shall be entitled to receive, shall accept, and shall use to carry out this section, 

without further appropriation any funds made available 

under section 1011(a)(2)(B) of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 

1109(a)(2)(B)). 

‘‘(B) USE OF TELEVISION FUNDS.—The Secretary shall 

use any funds received under subparagraph (A) in equal 

amounts for each remaining fiscal year on receipt of the 

funds (including the fiscal year of receipt) through fiscal 

year 2007. 

‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—In addition to 

funds otherwise made available under this subsection, there are 

authorized to be appropriated such sums as necessary to carry 

out this section for each of fiscal years 2003 through 2007. 

‘‘(4) ALLOCATION OF FUNDS.—

‘‘(A) IN GENERAL.—From amounts made available for 

each fiscal year under this subsection, the Secretary shall—

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‘‘(i) establish a national reserve for loans and loan 

guarantees to eligible entities in States under this section; and 

‘‘(ii) allocate amounts in the reserve to each State 

for each fiscal year for loans and loan guarantees to eligible entities in the State. 

‘‘(B) AMOUNT.—The amount of an allocation made to a 

State for a fiscal year under subparagraph (A) shall bear 

the same ratio to the amount of allocations made for all 

States for the fiscal year as the number of communities 

with a population of 2,500 inhabitants or less in the State 

bears to the number of communities with a population of 

2,500 inhabitants or less in all States, as determined on the 

basis of the latest available census. 

‘‘(C) UNOBLIGATED AMOUNTS.—Any amounts in the reserve established for a State for a fiscal year under subparagraph (B) that are not obligated by April 1 of the fiscal 

year shall be available to the Secretary to make loans and 

loan guarantees under this section to eligible entities in any 

State, as determined by the Secretary. 

‘‘(k) TERMINATION OF AUTHORITY.—No loan or loan guarantee 

may be made under this section after September 30, 2007.’’. 

(b) REGULATIONS.— (1) IN GENERAL.—Not later than 180 days after the date of 

enactment of this Act, the Secretary of Agriculture shall promulgate such regulations as are necessary to implement the 

amendment made by subsection (a). 

(2) PROCEDURE.—The promulgation of the regulations shall 

be made without regard to—

(A) the notice and comment provisions of section 553 of 

title 5, United States Code; 

(B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and 

(C) chapter 35 of title 44, United States Code (commonly known as the ‘‘Paperwork Reduction Act’’). 

(3) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING.—In 

carrying out this subsection, the Secretary shall use the authority provided under section 808 of title 5, United States Code.

Subtitle C—Food, Agriculture, 

Conservation, and Trade Act of 1990

SEC. 6201. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION. 

(a) REPEAL OF CORPORATION AUTHORIZATION.—Subtitle G of 

title XVI of the Food, Agriculture, Conservation, and Trade Act of 

1990 (7 U.S.C. 5901 et seq.) is repealed. 

(b) DISPOSITION OF ASSETS.—On the date of enactment of this 

Act—

(1) the assets, both tangible and intangible, of the Alternative Agricultural Research and Commercialization Corporation (referred to in this section as the ‘‘Corporation’’), including 

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the funds in the Alternative Agricultural Research and Commercialization Revolving Fund as of the date of enactment of 

this Act, are transferred to the Secretary of Agriculture; and 

(2) notwithstanding the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) and any other 

law that prescribes procedures for procurement, use, and disposal of property by a Federal agency, the Secretary shall have 

authority to manage and dispose of the assets transferred under 

paragraph (1) in a manner that, to the maximum extent practicable, provides the best value to the Federal Government. 

(c) USE OF ASSETS.—

(1) IN GENERAL.—Funds transferred under subsection (b), 

and any income from assets or proceeds from the sale of assets 

transferred under subsection (b), shall be deposited in an account in the Treasury, and shall remain available to the Secretary until expended, without further appropriation, to pay—

(A) any claims against, or obligations of, the Corporation; and 

(B) the costs incurred by the Secretary in carrying out 

this section. 

(2) FINAL DISPOSITION.—On final disposition of all assets 

transferred under subsection (b), any funds remaining in the 

account described in paragraph (1) shall be transferred into 

miscellaneous receipts in the Treasury. 

(d) CONFORMING AMENDMENTS.—

(1) Section 5315 of title 5, United States Code, is amended 

by striking ‘‘Executive Director of the Alternative Agricultural 

Research and Commercialization Corporation’’. 

(2) Section 730 of the Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. 5902 note; Public Law 104–127) 

is repealed. 

(3) Section 211(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6911(b)) is amended by striking 

paragraph (5). 

(4) Section 404(d) of the Agricultural Research, Extension, 

and Education Reform Act of 1998 (7 U.S.C. 7624(d)) is amended—

(A) by striking paragraph (2); and 

(B) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. 

(5) The Herger-Feinstein Quincy Library Group Forest Recovery Act (16 U.S.C. 2104; Public Law 105–277; 112 Stat. 

2681–305) is amended by striking subsection (m). 

(6) Section 9101(3) of title 31, United States Code, is 

amended by striking subparagraph (Q). 

SEC. 6202. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM. 

Subtitle H of title XVI of the Food, Agriculture, Conservation, 

and Trade Act of 1990 is amended by inserting after section 1669 

(7 U.S.C. 5922) the following: 

‘‘SEC. 1670. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) DEVELOPMENT CENTER.—The term ‘development center’

means—

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‘‘(A) the North Central Regional Center for Rural Development; ‘‘(B) the Northeast Regional Center for Rural Development or its designee; ‘‘(C) the Southern Rural Development Center; and 

‘‘(D) the Western Rural Development Center or its designee. 

‘‘(2) EXTENSION PROGRAM.—The term ‘extension program’ means the rural electronic commerce extension program established under subsection (b). ‘‘(3) MICROENTERPRISE.—The term ‘microenterprise’ means 

a commercial enterprise that has 5 or fewer employees, 1 or 

more of whom own the enterprise. ‘‘(4) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Agriculture, acting through the Administrator of the Cooperative State Research, Education, and Extension Service. ‘‘(5) SMALL BUSINESS.—The term ‘small business’ has the 

meaning given the term ‘small-business concern’ by section 3(a) 

of the Small Business Act (15 U.S.C. 632(a)). 

‘‘(b) ESTABLISHMENT.—The Secretary shall establish a rural 

electronic commerce extension program to expand and enhance electronic commerce practices and technology to be used by small businesses and microenterprises in rural areas. ‘‘(c) GRANTS.— ‘‘(1) IN GENERAL.—The Secretary shall carry out the program established under subsection (b) by making— ‘‘(A) grants to each of the development centers; and 

‘‘(B) competitive grants to land-grant colleges and universities (or consortia of land-grant colleges and universities) and to colleges and universities (including community colleges) with agricultural or rural development programs—‘‘(i) to develop and facilitate innovative rural electronic commerce business strategies; and 

‘‘(ii) to assist small businesses and microenterprises in identifying, adapting, implementing, and 

using electronic commerce business practices and technologies. 

‘‘(2) ELIGIBILITY.—The selection criteria established for 

grants awarded under paragraph (1)(B) shall include— ‘‘(A) the ability of an applicant to provide training and 

education on best practices, technology transfer, adoption, 

and use of electronic commerce in rural communities by 

small businesses and microenterprises; ‘‘(B) the extent and geographic diversity of the area 

served by the proposed project or activity under the extension program; ‘‘(C) in the case of a land-grant college or university, 

the extent of participation of the land-grant college or university in the extension program (including any economic 

benefits that would result from that participation); 

‘‘(D) the percentage of funding and in-kind commitments from non-Federal sources that would be needed by 

and available for a proposed project or activity under the 

extension program; and 

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‘‘(E) the extent of participation of low-income and minority businesses or microenterprises in a proposed project 

or activity under the extension program. 

‘‘(3) NON-FEDERAL SHARE.— ‘‘(A) IN GENERAL.—As a condition of the receipt of 

funds under this section, a development center or grant applicant shall agree to obtain from non-Federal sources (including State, local, nonprofit, or private sector sources) 

contributions of an amount equal to 50 percent of the grant 

amount. ‘‘(B) FORM.—The non-Federal share required under 

subparagraph (A) may be provided in the form of in-kind 

contributions. ‘‘(C) EXCEPTION.—The non-Federal share required 

under subparagraph (A) may be reduced to 25 percent if 

the grant recipient serves low-income or minority-owned 

businesses or microenterprises, as determined by the Secretary. ‘‘(d) REPORT.—Not later than 2 years after the date of enactment of this section, the Secretary shall submit to the Committee on 

Agriculture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate a report that describes—

‘‘(1) the policies, practices, and procedures used to assist 

rural communities in efforts to adopt and use electronic commerce techniques; and 

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $60,000,000 for each of 

fiscal years 2002 through 2007, of which not less than 1⁄3 of the 

amount made available for each fiscal year shall be used to carry 

out activities under subsection (c)(1)(A).’’. 

SEC. 6203. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN 

RURAL AREAS. 

(a) IN GENERAL.—Section 2335A of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa–5) is amended 

by striking ‘‘2002’’ and inserting ‘‘2007’’. 

(b) CONFORMING AMENDMENT.—Section 1(b) of Public Law 

102–551 (7 U.S.C. 950aaa note) is amended by striking ‘‘1997’’ and 

inserting ‘‘2007’’. 

Subtitle D—SEARCH Grants for Small 

Communities 

SEC. 6301. DEFINITIONS. 

In this subtitle: 

(1) COUNCIL.—The term ‘‘council’’ means an independent 

citizens’ council established by a State rural development director under section 6302(c). 

(2) ENVIRONMENTAL PROJECT.—

(A) IN GENERAL.—The term ‘‘environmental project’’

means a project that—

(i) improves environmental quality; and 

(ii) is necessary to comply with an applicable environmental law (including a regulation). 

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(B) INCLUSION.—The term ‘‘environmental project’’ includes an initial feasibility study of a project. 

(3) REGION.—The term ‘‘region’’ means a geographic area of 

a State, as determined by the State rural development director, 

in coordination with the environmental protection director of 

the State. 

(4) SEARCH GRANT.—The term ‘‘SEARCH grant’’ means a 

grant awarded under section 6302(f). 

(5) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

(6) SMALL COMMUNITY.—The term ‘‘small community’’

means an incorporated or unincorporated rural community 

with a population of 2,500 inhabitants or less.

(7) STATE.—The term ‘‘State’’ has the meaning given the 

term in section 381A of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009). 

SEC. 6302. SEARCH GRANT PROGRAM. 

(a) IN GENERAL.—The Secretary, in coordination with the Administrator of the Environmental Protection Agency, may establish 

the SEARCH grant program. 

(b) ALLOCATION TO STATE RURAL DEVELOPMENT DIRECTORS.—

(1) IN GENERAL.—Subject to paragraph (2) and section 

6304(a)(2), not later than 60 days after the date on which the 

Director of the Office of Management and Budget apportions 

any amounts made available under this subtitle for any of fiscal years 2002 through 2007, the Secretary, on request of a 

State rural development director (in coordination with the environmental protection director of the State), shall allocate to the 

State rural development director an amount not to exceed 

$1,000,000, to be used by the State rural development director 

to award SEARCH grants under subsection (d). 

(2) GRANTS TO STATES.—The total amount of funds allocated to State rural development directors in all States other 

than Alaska, Hawaii, or the 48 contiguous States for a fiscal 

year under this subsection shall not exceed $1,000,000. 

(c) INDEPENDENT CITIZENS’ COUNCIL.—

(1) ESTABLISHMENT.—The State rural development director 

of a State shall establish an independent citizens’ council to 

carry out the duties described in this section. 

(2) COMPOSITION.—

(A) IN GENERAL.—A council shall be composed of 9 

members, appointed by the State rural development director, in coordination with the environmental protection director of the State. 

(B) REPRESENTATION; RESIDENCE.—Each member of a 

council shall—

(i) represent an individual region of the State, as 

determined by the State rural development director; 

and 

(ii) reside in a small community in the State. 

(d) ELIGIBILITY.—A SEARCH grant shall be awarded under 

this section only to a small community for 1 or more environmental 

projects for which the small community—

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(1) needs funds to carry out initial feasibility or environmental studies as required by Federal or State law before applying to traditional funding sources; and 

(2) demonstrates that the small community has been unable 

to obtain sufficient funding from traditional funding sources. 

(e) APPLICATIONS.—To be eligible to receive a SEARCH grant, 

a small community in a State shall submit to the State rural development director of the State an application that includes— (1) a description of the proposed environmental project (including an explanation of how the project would assist the 

small community in complying with a Federal or State environmental law (including a regulation); 

(2) an explanation of why the project is important to the 

small community; 

(3) a description of all actions taken with respect to the 

project as of the date of the application, including any attempt 

to secure funding; and 

(4) a description of demonstrated need for funding for the 

project. 

(f) AWARDS.— (1) IN GENERAL.—Not later than May 1 of each fiscal year, 

a State rural development director, in coordination with the 

council and the environmental protection director of the State, 

shall— (A) review all applications received by the State rural 

development director under subsection (e); and 

(B) award SEARCH grants to small communities 

based on—

(i) an evaluation of whether the proposed project 

meets the eligibility criteria under subsection (d); and 

(ii) the content of the application. 

(2) ADMINISTRATION.—In awarding a SEARCH grant, a 

State rural development director— (A) shall award the funds for any recommended environmental project in a timely and expeditious manner; and 

(B) shall not award a SEARCH grant to a grantee or 

project in violation of any Federal or State law (including 

a regulation). 

(3) MATCHING REQUIREMENT.—A small community that receives a SEARCH grant under this section may be required to 

provide matching funds. 

(g) UNEXPENDED FUNDS.—

(1) IN GENERAL.—If, for any fiscal year, any unexpended 

funds remain after SEARCH grants are awarded by a State 

rural development director under subsection (f), the State rural 

development director, in coordination with the environmental 

protection director of the State, may repeat the application and 

review process so that any remaining funds are recommended 

for award, and awarded, not later than July 30 of the fiscal 

year. 

(2) RETENTION OF FUNDS.—

(A) IN GENERAL.—Any unexpended funds that are not 

awarded under subsection (f) or paragraph (1) shall be retained by the State rural development director for award 

during the following fiscal year. 

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(B) LIMITATION.—A State SEARCH account that accumulates a balance of unexpended funds described in subparagraph (A) in excess of $2,000,000 shall be ineligible to 

receive additional funds for SEARCH grants until such 

time as the State rural development director awards grants 

in the amount of the excess. 

SEC. 6303. REPORT. 

Not later than 30 days after the end of the first fiscal year for 

which SEARCH grants are awarded, and annually thereafter, the 

Secretary shall submit to the Committee on Energy and Commerce 

and the Committee on Agriculture of the House of Representatives 

and the Committee on Agriculture, Nutrition, and Forestry of the 

Senate a report that— (1) describes the number of SEARCH grants awarded during the fiscal year; 

(2) identifies each small community that received a 

SEARCH grant during the fiscal year; 

(3) describes the project or purpose for which each 

SEARCH grant was awarded, including a statement of the benefit to public health or the environment of the environmental 

project receiving the grant funds; and 

(4) describes the status of each project or portion of a 

project for which a SEARCH grant was awarded, including a 

project or portion of a project for which a SEARCH grant was 

awarded for any previous fiscal year. 

SEC. 6304. FUNDING. 

(a) ALLOCATION TO STATE RURAL DEVELOPMENT DIRECTORS.— (1) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out section 6302(b) $51,000,000 

for each of fiscal years 2002 through 2007, of which not to exceed $1,000,000 shall be used to make grants under section 

6302(b)(2). 

(2) ACTUAL APPROPRIATION.—If funds to carry out section 

6302(b) are made available for a fiscal year in an amount that 

is less than the amount authorized under paragraph (1) for the 

fiscal year, the Secretary shall divide the appropriated funds 

for the fiscal year equally among the 50 States. 

(b) OTHER EXPENSES.—There are authorized to be appropriated 

such sums as are necessary to carry out this subtitle (other than section 6302(b)). 

Subtitle E—Miscellaneous 

SEC. 6401. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS. 

(a) IN GENERAL.—Section 231 of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106–224) is 

amended—

(1) by redesignating subsections (b) through (d) as subsections (c) through (e), respectively; 

(2) by striking subsection (a) and inserting the following: 

‘‘(a) DEFINITION OF VALUE-ADDED AGRICULTURAL PRODUCT.—

‘‘(1) IN GENERAL.—The term ‘value-added agricultural 

product’ means any agricultural commodity or product that—

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‘‘(A)(i) has undergone a change in physical state; 

‘‘(ii) was produced in a manner that enhances the value 

of the agricultural commodity or product, as demonstrated 

through a business plan that shows the enhanced value, as 

determined by the Secretary; or ‘‘(iii) is physically segregated in a manner that results 

in the enhancement of the value of the agricultural commodity or product; and ‘‘(B) as a result of the change in physical state or the 

manner in which the agricultural commodity or product 

was produced or segregated— ‘‘(i) the customer base for the agricultural commodity or product has been expanded; and ‘‘(ii) a greater portion of the revenue derived from 

the marketing, processing, or physical segregation of 

the agricultural commodity or product is available to 

the producer of the commodity or product. ‘‘(2) INCLUSION.—The term ‘value-added agricultural product’ includes farm- or ranch-based renewable energy. ‘‘(b) GRANT PROGRAM.— ‘‘(1) IN GENERAL.—From amounts made available under 

paragraph (4), the Secretary shall award competitive grants— ‘‘(A) to an eligible independent producer (as determined 

by the Secretary) of a value-added agricultural product to 

assist the producer— ‘‘(i) in developing a business plan for viable marketing opportunities for the value-added agricultural 

product; or ‘‘(ii) in developing strategies that are intended to 

create marketing opportunities for the producer; and 

‘‘(B) to an eligible agricultural producer group, farmer 

or rancher cooperative, or majority-controlled producerbased business venture (as determined by the Secretary) to 

assist the entity—

‘‘(i) in developing a business plan for viable marketing opportunities in emerging markets for a valueadded agricultural product; or 

‘‘(ii) in developing strategies that are intended to 

create marketing opportunities in emerging markets for 

the value-added agricultural product. 

‘‘(2) AMOUNT OF GRANT.—

‘‘(A) IN GENERAL.—The total amount provided under 

this subsection to a grant recipient shall not exceed 

$500,000. 

‘‘(B) MAJORITY-CONTROLLED PRODUCER-BASED BUSINESS VENTURES.—The amount of grants provided to majority-controlled producer-based business ventures under paragraph (1)(B) for a fiscal year may not exceed 10 percent of 

the amount of funds that are used to make grants for the 

fiscal year under this subsection. 

‘‘(3) GRANTEE STRATEGIES.—A grantee under paragraph (1) 

shall use the grant—

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

study to establish a viable marketing opportunity for a 

value-added agricultural product; or 

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‘‘(B) to provide capital to establish alliances or business 

ventures that allow the producer of the value-added agricultural product to better compete in domestic or international markets. 

‘‘(4) FUNDING.—Not later than 30 days after the date of enactment of this paragraph, on October 1, 2002, and on each October 1 thereafter through October 1, 2006, of the funds of the 

Commodity Credit Corporation, the Secretary shall make available to carry out this subsection $40,000,000, to remain available until expended.’’; 

(3) in subsection (c)(1) (as redesignated by paragraph (1))— (A) by striking ‘‘subsection (a)(2)’’ and inserting ‘‘subsection (b)(2)’’; 

(B) by striking ‘‘$5,000,000’’ and inserting ‘‘5 percent’’; 

and 

(C) by striking ‘‘subsection (a)’’ and inserting ‘‘subsection (b)’’; and 

(4) in subsection (d) (as redesignated by paragraph (1)), by 

striking ‘‘subsections (a) and (b)’’ and inserting ‘‘subsections (b) 

and (c)’’. (b) APPLICABILITY.—

(1) IN GENERAL.—Except as provided in paragraph (2), the 

amendments made by subsection (a) apply beginning on October 1, 2002. 

(2) FUNDING.—Funds made available under section 

231(b)(4)(A)(i) of the Agricultural Risk Protection Act of 2000 

(as amended by subsection (a)(2)) shall be made available not 

later than 30 days after the date of enactment of this Act. 

SEC. 6402. AGRICULTURE INNOVATION CENTER DEMONSTRATION 

PROGRAM. 

(a) PURPOSE.—The purpose of this section is to direct the Secretary of Agriculture to establish a demonstration program under 

which agricultural producers are provided— (1) technical assistance, consisting of engineering services, 

applied research, scale production, and similar services, to enable the agricultural producers to establish businesses to 

produce value-added agricultural commodities or products; 

(2) assistance in marketing, market development, and business planning; and 

(3) organizational, outreach, and development assistance to 

increase the viability, growth, and sustainability of businesses 

that produce value-added agricultural commodities or products. 

(b) DEFINITIONS.—In this section: 

(1) PROGRAM.—The term ‘‘Program’’ means the Agriculture 

Innovation Center Demonstration Program established under 

subsection (c). 

(2) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

(c) ESTABLISHMENT OF PROGRAM.—The Secretary shall establish a demonstration program, to be known as the ‘‘Agriculture Innovation Center Demonstration Program’’ under which the Secretary shall—

(1) make grants to assist eligible entities in establishing Agriculture Innovation Centers to enable agricultural producers to 

obtain the assistance described in subsection (a); and 

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(2) provide assistance to eligible entities in establishing Agriculture Innovation Centers through the research and technical 

services of the Department of Agriculture. 

(d) ELIGIBILITY REQUIREMENTS.—

(1) IN GENERAL.—An entity shall be eligible for a grant and 

assistance described in subsection (c) to establish an Agriculture Innovation Center if—

(A) the entity—

(i) has provided services similar to the services described in subsection (a); or 

(ii) demonstrates the capability of providing such 

services; 

(B) the application of the entity for the grant and assistance includes a plan, in accordance with regulations 

promulgated by the Secretary, that outlines—

(i) the support for the entity in the agricultural 

community; 

(ii) the technical and other expertise of the entity; 

and 

(iii) the goals of the entity for increasing and improving the ability of local agricultural producers to 

develop markets and processes for value-added agricultural commodities or products; 

(C) the entity demonstrates that adequate resources (in 

cash or in kind) are available, or have been committed to 

be made available, to the entity, to increase and improve 

the ability of local agricultural producers to develop markets and processes for value-added agricultural commodities or products; and 

(D) the Agriculture Innovation Center of the entity has 

a board of directors established in accordance with paragraph (2). 

(2) BOARD OF DIRECTORS.—Each Agriculture Innovation 

Center of an eligible entity shall have a board of directors composed of representatives of each of the following groups: 

(A) The 2 general agricultural organizations with the 

greatest number of members in the State in which the eligible entity is located. 

(B) The department of agriculture, or similar State department or agency, of the State in which the eligible entity 

is located. 

(C) Entities representing the 4 highest grossing commodities produced in the State, determined on the basis of 

annual gross cash sales. 

(e) GRANTS AND ASSISTANCE.—

(1) IN GENERAL.—Subject to subsection (i), under the Program, the Secretary shall make, on a competitive basis, annual 

grants to eligible entities. 

(2) MAXIMUM AMOUNT OF GRANTS.—A grant under paragraph (1) shall be in an amount that does not exceed the lesser 

of—

(A) $1,000,000; or 

(B) twice the dollar amount of the resources (in cash or 

in kind) that the eligible entity demonstrates are available, 

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or have been committed to be made available, to the eligible 

entity in accordance with subsection (d)(1)(C). 

(3) MAXIMUM NUMBER OF GRANTS.— (A) FIRST FISCAL YEAR OF PROGRAM.—In the first fiscal 

year of the Program, the Secretary shall make grants to not 

more than 5 eligible entities.

(B) SECOND FISCAL YEAR OF PROGRAM.—In the second 

fiscal year of the Program, the Secretary may make grants 

to— (i) the eligible entities to which grants were made 

under subparagraph (A); and 

(ii) not more than 10 additional eligible entities. 

(4) STATE LIMITATION.— (A) IN GENERAL.—Subject to subparagraph (B), in the 

first 3 fiscal years of the Program, the Secretary shall not 

make a grant under the Program to more than 1 entity in 

any 1 State. 

(B) COLLABORATION.—Nothing in subparagraph (A) 

precludes a recipient of a grant under the Program from 

collaborating with any other institution with respect to activities conducted using the grant. 

(f) USE OF FUNDS.—An eligible entity to which a grant is made 

under the Program may use the grant only for the following purposes (but only to the extent that the use is not described in section 

231(d) of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 

1621 note; Public Law 106–224)): 

(1) Applied research. 

(2) Consulting services. 

(3) Hiring of employees, at the discretion of the board of directors of the Agriculture Innovation Center of the eligible entity. 

(4) The making of matching grants, each of which shall be in an amount not to exceed $5,000, to agricultural producers, 

except that the aggregate amount of all such matching grants 

made by the eligible entity shall be not more than $50,000. 

(5) Legal services. 

(6) Any other related cost, as determined by the Secretary. 

(g) RESEARCH ON EFFECTS ON THE AGRICULTURAL SECTOR.— (1) IN GENERAL.—Of the amount made available under sub- section (i) for each fiscal year, the Secretary shall use $300,000 

to support research at a university concerning the effects of 

projects for value-added agricultural commodities or products 

on agricultural producers and the commodity markets. 

(2) RESEARCH ELEMENTS.—Research under paragraph (1) 

shall systematically examine, using linked, long-term, global 

projections of the agricultural sector, the potential effects of 

projects described in subparagraph (A) on—

(A) demand for agricultural commodities; 

(B) market prices; 

(C) farm income; and 

(D) Federal outlays on commodity programs. 

(h) REPORT TO CONGRESS.— (1) IN GENERAL.—Not later than 3 years after the date on 

which the last of the first 10 grants is made under the Program, the Secretary shall submit to the Committee on AgriVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00304 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
301

culture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate a report on—

(A) the effectiveness of the Program in improving and 

expanding the production of value-added agricultural commodities or products; and 

(B) the effects of the Program on the economic viability 

of agricultural producers. 

(2) REQUIRED ELEMENTS.—The report under paragraph (1) 

shall—

(A) include a description of the best practices and innovations found at each of the Agriculture Innovation Centers 

established under the Program; and 

(B) specify the number and type of activities assisted, 

and the type of assistance provided, under the Program. 

(i) FUNDING.—Of the amount made available under section 

231(a)(1) of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 

1621 note; Public Law 106–224) for each fiscal year, the Secretary 

shall use to carry out this section—

(1) not less than $3,000,000 for fiscal year 2002; and 

(2) not less than $6,000,000 for each of fiscal years 2003 

and 2004. 

SEC. 6403. FUND FOR RURAL AMERICA. 

(a) IN GENERAL.—Section 793 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 2204f) is repealed. 

(b) CONFORMING AMENDMENT.—Section 2(b)(8)(B) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 

450i(b)(8)(B)) is amended in the second sentence by striking ‘‘smaller college or university (as described in section 793(c)(2)(ii) of the 

Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 

2204f(c)(2)(ii))’’ and inserting ‘‘college, university, or research foundation maintained by a college or university that ranks in the lowest 1⁄3 of such colleges, universities, and research foundations on the 

basis of Federal research funds received’’. 

SEC. 6404. RURAL LOCAL TELEVISION BROADCAST SIGNAL LOAN 

GUARANTEES. 

(a) IN GENERAL.—Section 1011(a) of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 1109(a)) 

is amended—

(1) by striking ‘‘For’’ and inserting the following: 

‘‘(1) AUTHORIZATION OF APPROPRIATIONS.—For’’; and 

(2) by adding at the end the following: 

‘‘(2) COMMODITY CREDIT CORPORATION FUNDS.—

‘‘(A) IN GENERAL.—Notwithstanding any other provision of law, subject to subparagraph (B), in addition to 

amounts made available under paragraph (1), of the funds 

of the Commodity Credit Corporation, the Secretary of Agriculture shall make available for loan guarantees to carry 

out this title $80,000,000 for the period beginning on the 

date of enactment of this paragraph and ending on December 31, 2006, to remain available until expended. ‘‘(B) BROADBAND LOANS AND LOAN GUARANTEES.— ‘‘(i) IN GENERAL.—Amounts made available under 

subparagraph (A) that are not obligated as of the release date described in clause (ii) shall be available to 

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the Secretary to make loans and loan guarantees under 

section 601 of the Rural Electrification Act of 1936. 

‘‘(ii) RELEASE DATE.—For purposes of clause (i), the 

release date is the date that is the earlier of—

‘‘(I) the date the Secretary determines that at 

least 75 percent of the designated market areas (as 

defined in section 122(j) of title 17, United States 

Code) not in the top 40 designated market areas 

described in section 1004(e)(1)(C)(i) of the Launching Our Communities’ Access to Local Television 

Act of 2000 (47 U.S.C. 1103(e)(1)(C)(i)) have access 

to local television broadcast signals for virtually 

all households (as determined by the Secretary); or 

‘‘(II) December 31, 2006. 

‘‘(C) ADVANCED APPROPRIATIONS.—Subsections (c) and 

(h)(1)(B) of section 1004 and section 1005(n)(3)(B) shall not 

apply to amounts made available under this paragraph.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) APPROVAL OF LOAN GUARANTEES.—Section 1004 of the 

Launching Our Communities’ Access to Local Television Act of 

2000 (47 U.S.C. 1103) is amended—

(A) in subsection (b)(1)—

(i) by striking ‘‘section 5’’ and inserting ‘‘section 

1005’’; and 

(ii) by striking ‘‘section 11’’ and inserting ‘‘section 

1011’’; 

(B) in subsection (d)(1), by striking ‘‘section 3’’ and inserting ‘‘section 1003’’; and 

(C) in the first sentence of subsection (h)(2)(D), by striking ‘‘section 5’’ and inserting ‘‘section 1005’’. 

(2) ADMINISTRATION OF LOAN GUARANTEES.—Section 1005 

of the Launching Our Communities’ Access to Local Television 

Act of 2000 (47 U.S.C. 1104) is amended—

(A) in subsection (a), by striking ‘‘sections 3 and 4’’ and 

inserting ‘‘sections 1003 and 1004’’; 

(B) in subsection (b)—

(i) in paragraph (1)(D), by striking ‘‘section 6(a)(2)’’

and inserting ‘‘section 1006(a)(2)’’; and 

(ii) in paragraph (3), by striking ‘‘section 

4(d)(3)(B)(iii)’’ and inserting ‘‘section 1004(d)(3)(B)(iii)’’; 

and 

(C) in subsection (e)(3), by striking ‘‘section 4(g)’’ and 

inserting ‘‘section 1004(g)’’. 

SEC. 6405. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL 

GRANT PROGRAM. 

(a) IN GENERAL.—The Secretary of Agriculture may make 

grants to units of general local government and Indian tribes (as defined in section 4 of the Indian Self-Determination and Education 

Assistance Act (25 U.S.C. 450b)) to pay the cost of training firefighters and emergency medical personnel in firefighting, emergency 

medical practices, and responding to hazardous materials and bioagents in rural areas. 

(b) USE OF FUNDS.—

(1) SCHOLARSHIPS.—

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(A) IN GENERAL.—Not less than 60 percent of the 

amounts made available for competitively-awarded grants 

under this section shall be used to provide grants to fund 

partial scholarships for training of individuals at training 

centers approved by the Secretary. 

(B) PRIORITY.—In awarding grants under this paragraph, the Secretary shall give priority to grant applicants 

that provide for training within the region (or locality) of 

the applicant. 

(2) GRANTS FOR TRAINING CENTERS.— (A) IN GENERAL.—A grant under subsection (a) may be 

used to provide financial assistance to State and regional 

centers that provide training for firefighters and emergency 

medical personnel for improvements to the training facility, 

equipment, curricula, and personnel. 

(B) LIMITATION.—Not more than $750,000 shall be provided to any single training center for any fiscal year under 

this paragraph. 

(c) FUNDING.—Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section 

$10,000,000 for each of fiscal years 2003 through 2007, to remain 

available until expended. 

SEC. 6406. SENSE OF CONGRESS ON RURAL POLICY COORDINATION. 

It is the sense of Congress that the President should—

(1) appoint a Special Assistant to the President for Rural 

Policy; 

(2) designate within each Federal agency with jurisdiction 

over rural programs or activities 1 or more senior officers or 

employees to provide rural policy leadership for the agency; and 

(3) create an intergovernmental rural policy working group 

comprised of—

(A) the Special Assistant to the President for Rural Policy, who should serve as Chairperson; and 

(B) the senior officers and employees designated under 

paragraph (2).

TITLE VII—RESEARCH AND RELATED 

MATTERS 

Subtitle A—Extensions 

SEC. 7101. NATIONAL RURAL INFORMATION CENTER CLEARINGHOUSE. 

Section 2381(e) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (7 U.S.C. 3125b(e)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7102. GRANTS AND FELLOWSHIPS FOR FOOD AND AGRICULTURAL 

SCIENCES EDUCATION. 

Section 1417 of the National Agricultural Research, Extension, 

and Teaching Policy Act of 1977 (7 U.S.C. 3152) is amended—

(1) in subsection (a)—

(A) by striking ‘‘and’’ after ‘‘economics,’’; and 

(B) by inserting ‘‘, and rural economic, community, and 

business development’’ before the period; 

304

(2) in subsection (b)—

(A) in paragraph (1), by inserting ‘‘, or in rural economic, community, and business development’’ before the 

semicolon; 

(B) in paragraph (2), by inserting ‘‘, or in rural economic, community, and business development’’ before the 

semicolon; 

(C) in paragraph (3), by inserting ‘‘, or teaching programs emphasizing rural economic, community, and business development’’ before the semicolon; 

(D) in paragraph (4), by inserting ‘‘, or programs emphasizing rural economic, community, and business development,’’ after ‘‘programs’’; and 

(E) in paragraph (5), by inserting ‘‘, or professionals in 

rural economic, community, and business development’’ before the semicolon; 

(3) in subsection (d)—

(A) in paragraph (1), by inserting ‘‘, or in rural economic, community, and business development,’’ after 

‘‘sciences’’; and 

(B) in paragraph (2), by inserting ‘‘, or in the rural economic, community, and business development workforce,’’

after ‘‘workforce’’; and 

(4) in subsection (l), by striking ‘‘2002’’ and inserting 

‘‘2007’’. 

SEC. 7103. POLICY RESEARCH CENTERS. 

Section 1419A(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3155(d)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7104. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH PROGRAM. 

Section 1424(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3174(d)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7105. PILOT RESEARCH PROGRAM TO COMBINE MEDICAL AND AGRICULTURAL RESEARCH. 

Section 1424A(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3174a(d)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7106. NUTRITION EDUCATION PROGRAM. 

Section 1425(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3175(c)(3)) is 

amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7107. CONTINUING ANIMAL HEALTH AND DISEASE RESEARCH 

PROGRAMS. 

Section 1433(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3195(a)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7108. APPROPRIATIONS FOR RESEARCH ON NATIONAL OR REGIONAL PROBLEMS. 

Section 1434(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3196(a)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’.

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SEC. 7109. GRANTS TO UPGRADE AGRICULTURAL AND FOOD SCIENCES 

FACILITIES AT 1890 LAND-GRANT COLLEGES, INCLUDING 

TUSKEGEE UNIVERSITY. 

Section 1447(b) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222b(b)) is amended by striking ‘‘$15,000,000 for each of fiscal years 1996 through 

2002’’ and inserting ‘‘$25,000,000 for each of fiscal years 2002 

through 2007’’. 

SEC. 7110. NATIONAL RESEARCH AND TRAINING VIRTUAL CENTERS. 

(a) AUTHORIZATION.—Section 1448 of the National Agricultural 

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

3222c) is amended by striking ‘‘2002’’ each place it appears in subsections (a)(1) and (f) and inserting ‘‘2007’’. 

(b) REDESIGNATION.—Section 1448 of the National Agricultural 

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

3222c) is amended—

(1) in the section heading, by striking ‘‘CENTENNIAL’’

and inserting ‘‘VIRTUAL’’; and 

(2) by striking ‘‘centennial’’ each place it appears and inserting ‘‘virtual’’. 

SEC. 7111. HISPANIC-SERVING INSTITUTIONS. 

Section 1455(c) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3241(c)) is amended 

by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7112. COMPETITIVE GRANTS FOR INTERNATIONAL AGRICULTURAL SCIENCE AND EDUCATION PROGRAMS. 

Section 1459A(c) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3292b(c)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7113. UNIVERSITY RESEARCH. 

Section 1463 of the National Agricultural Research, Extension, 

and Teaching Policy Act of 1977 (7 U.S.C. 3311) is amended—

(1) in subsection (a), by striking ‘‘$850,000,000 for each of 

the fiscal years 1991 through 2002’’ and inserting ‘‘such sums 

as may be necessary for each of fiscal years 1991 through 

2007’’; and 

(2) in subsection (b), by striking ‘‘$310,000,000 for each of 

the fiscal years 1991 through 2002’’ and inserting ‘‘such sums 

as may be necessary for each of fiscal years 1991 through 

2007’’. 

SEC. 7114. EXTENSION SERVICE. 

Section 1464 of the National Agricultural Research, Extension, 

and Teaching Policy Act of 1977 (7 U.S.C. 3312) is amended by 

striking ‘‘$420,000,000 for fiscal year 1991, $430,000,000 for fiscal 

year 1992, $440,000,000 for fiscal year 1993, $450,000,000 for fiscal 

year 1994, and $460,000,000 for each of fiscal years 1995 through 

2002’’ and inserting ‘‘such sums as may be necessary for each of fiscal years 1991 through 2007’’. 

SEC. 7115. SUPPLEMENTAL AND ALTERNATIVE CROPS. 

Section 1473D(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319d(a)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

306

SEC. 7116. AQUACULTURE RESEARCH FACILITIES. 

The first sentence of section 1477 of the National Agricultural 

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

3324) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7117. RANGELAND RESEARCH. 

Section 1483(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3336(a)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7118. NATIONAL GENETICS RESOURCES PROGRAM. 

Section 1635(b) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (7 U.S.C. 5844(b)) is amended by striking ‘‘2002’’

and inserting ‘‘2007’’. 

SEC. 7119. HIGH-PRIORITY RESEARCH AND EXTENSION INITIATIVES. 

Section 1672(h) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (7 U.S.C. 5925(h)) is amended by striking ‘‘2002’’

and inserting ‘‘2007. 

SEC. 7120. NUTRIENT MANAGEMENT RESEARCH AND EXTENSION INITIATIVE. 

Section 1672A(g) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (7 U.S.C. 5925a(g)) is amended by striking 

‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7121. AGRICULTURAL TELECOMMUNICATIONS PROGRAM. 

Section 1673(h) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (7 U.S.C. 5926(h)) is amended by striking ‘‘2002’’

and inserting ‘‘2007’’. 

SEC. 7122. ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH 

DISABILITIES. 

Section 1680(c)(1) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (7 U.S.C. 5933(c)(1)) is amended by striking 

‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7123. PARTNERSHIPS FOR HIGH-VALUE AGRICULTURAL PRODUCT 

QUALITY RESEARCH. 

Section 402(g) of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7622(g)) is amended by 

striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7124. BIOBASED PRODUCTS. 

(a) PILOT PROJECT.—Section 404(e)(2) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7624(e)(2)) is amended by striking ‘‘2001’’ and inserting ‘‘2007’’. (b) AUTHORIZATION OF APPROPRIATIONS.—Section 404(h) of 

such Act (7 U.S.C. 7624(h)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7125. INTEGRATED RESEARCH, EDUCATION, AND EXTENSION 

COMPETITIVE GRANTS PROGRAM. 

Section 406 of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7626) is amended—

(1) by redesignating subsection (e) as subsection (f); 

(2) by inserting after subsection (d) the following: 

‘‘(e) TERM OF GRANT.—A grant under this section shall have a 

term of not more than 5 years.’’; and 

(3) in subsection (f) (as so redesignated), by striking ‘‘2002’’

and inserting ‘‘2007’’. 

307

SEC. 7126. EQUITY IN EDUCATIONAL LAND-GRANT STATUS ACT OF 

1994. 

(f) INSTITUTIONAL CAPACITY BUILDING GRANTS.—Section 535 of 

the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 

301 note; Public Law 103–382) is amended—

(1) in subsection (b)(1), by striking ‘‘2002’’ and inserting 

‘‘2007’’; and 

(2) in subsection (c), by striking ‘‘$1,700,000 for each of fiscal years 1996 through 2002’’ and inserting ‘‘such sums as are 

necessary for each of fiscal years 2002 through 2007’’. 

SEC. 7127. 1994 INSTITUTION RESEARCH GRANTS. 

Section 536(c) of the Equity in Educational Land-Grant Status 

Act of 1994 (7 U.S.C. 301 note) is amended by striking ‘‘2002’’ and 

inserting ‘‘2007’’. 

SEC. 7128. ENDOWMENT FOR 1994 INSTITUTIONS. 

The first sentence of section 533(b) of the Equity in Educational 

Land-Grant Status Act of 1994 (7 U.S.C. 301 note) is amended by 

striking ‘‘$4,600,000’’ and all that follows through the period and 

inserting ‘‘such sums as are necessary to carry out this section for 

each of fiscal years 1996 through 2007.’’. 

SEC. 7129. PRECISION AGRICULTURE. 

Section 403(i) of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7623(i)) is amended by 

striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7130. THOMAS JEFFERSON INITIATIVE FOR CROP DIVERSIFICATION. 

Section 405(h) of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7625(h)) is amended by 

striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7131. SUPPORT FOR RESEARCH REGARDING DISEASES OF WHEAT, 

TRITICALE, AND BARLEY CAUSED BY FUSARIUM 

GRAMINEARUM OR BY TILLETIA INDICA. 

Section 408(e) of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7628(e)) is amended—

(1) by striking ‘‘$5,200,000’’ and inserting ‘‘such sums as 

may be necessary’’; and 

(2) by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7132. OFFICE OF PEST MANAGEMENT POLICY. 

Section 614(f) of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7653(f)) is amended by 

striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7133. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMICS ADVISORY BOARD. 

Section 1408(h) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3123(h)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’.

SEC. 7134. GRANTS FOR RESEARCH ON PRODUCTION AND MARKETING 

OF ALCOHOLS AND INDUSTRIAL HYDROCARBONS FROM 

AGRICULTURAL COMMODITIES AND FOREST PRODUCTS. 

Section 1419(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3154(d)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

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SEC. 7135. AGRICULTURAL EXPERIMENT STATIONS RESEARCH FACILITIES. 

Section 6(a) of the Research Facilities Act (7 U.S.C. 390d(a)) is 

amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7136. COMPETITIVE, SPECIAL, AND FACILITIES RESEARCH 

GRANTS NATIONAL RESEARCH INITIATIVE. 

Section 2(b)(10) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(10)) is amended by striking 

‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7137. FEDERAL AGRICULTURAL RESEARCH FACILITIES AUTHORIZATION OF APPROPRIATIONS. 

Section 1431 of the National Agricultural Research, Extension, 

and Teaching Policy Act Amendments of 1985 (Public Law 99–198; 

99 Stat. 1556) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7138. CRITICAL AGRICULTURAL MATERIALS RESEARCH. 

Section 16(a) of the Critical Agricultural Materials Act (7 

U.S.C. 178n(a)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

SEC. 7139. AQUACULTURE. 

Section 10 of the National Aquaculture Act of 1980 (16 U.S.C. 

2809) is amended by striking ‘‘2002’’ each place it appears and inserting ‘‘2007’’. 

Subtitle B—Modifications 

SEC. 7201. EQUITY IN EDUCATIONAL LAND-GRANT STATUS ACT OF 

1994. 

(a) AUTHORIZATION OF APPROPRIATIONS.—Section 534(a)(1)(A) 

of the Equity in Educational Land-Grant Status Act of 1994 (7 

U.S.C. 301 note) is amended by striking ‘‘$50,000’’ and inserting ‘‘$100,000’’. (b) CHANGE OF INDIAN STUDENT COUNT FORMULA.—Section 

533(c)(4)(A) of the Equity in Educational Land-Grant Status Act of 

1994 (7 U.S.C. 301 note; Public Law 103–382) is amended by striking ‘‘(as defined in section 390(3) of the Carl D. Perkins Vocational 

and Applied Technology Education Act, as such section was in effect 

on the day preceding the date of enactment of the Carl. D. Perkins 

Vocational and Applied Technology Education Amendments of 1998 

(Oct. 31, 1998)) for each 1994 Institution for the fiscal year’’ and inserting ‘‘(as defined in section 2(a) of the Tribally Controlled College 

or University Assistance Act of 1978 (25 U.S.C. 1801(a)))’’. (c) ACCREDITATION REQUIREMENT FOR RESEARCH GRANTS.— Section 533(a)(3) of the Equity in Educational Land-Grant Status 

Act of 1994 (7 U.S.C. 301 note; Public Law 103–382) is amended 

by striking ‘‘sections 534 and 535’’ and inserting ‘‘sections 534, 535, 

and 536’’. 

(d) TECHNICAL AMENDMENT TO REFLECT NAME CHANGES.—

Section 532 of the Equity in Educational Land-Grant Status Act of 

1994 (7 U.S.C. 301 note; Public Law 103–382) is amended by striking paragraphs (1) through (30) and inserting the following: ‘‘(1) Bay Mills Community College. 

‘‘(2) Blackfeet Community College. 

‘‘(3) Cankdeska Cikana Community College. 

‘‘(4) College of Menominee Nation. 

‘‘(5) Crownpoint Institute of Technology. 

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‘‘(6) D-Q University. 

‘‘(7) Dine College. 

‘‘(8) Chief Dull Knife Memorial College. 

‘‘(9) Fond du Lac Tribal and Community College. 

‘‘(10) Fort Belknap College. 

‘‘(11) Fort Berthold Community College. 

‘‘(12) Fort Peck Community College. 

‘‘(13) Haskell Indian Nations University. 

‘‘(14) Institute of American Indian and Alaska Native Culture and Arts Development. ‘‘(15) Lac Courte Oreilles Ojibwa Community College. 

‘‘(16) Leech Lake Tribal College. 

‘‘(17) Little Big Horn College. 

‘‘(18) Little Priest Tribal College. 

‘‘(19) Nebraska Indian Community College. 

‘‘(20) Northwest Indian College. 

‘‘(21) Oglala Lakota College. 

‘‘(22) Salish Kootenai College. 

‘‘(23) Sinte Gleska University. 

‘‘(24) Sisseton Wahpeton Community College. 

‘‘(25) Si Tanka/Huron University. 

‘‘(26) Sitting Bull College. 

‘‘(27) Southwestern Indian Polytechnic Institute. 

‘‘(28) Stone Child College. 

‘‘(29) Turtle Mountain Community College. 

‘‘(30) United Tribes Technical College. 

‘‘(31) White Earth Tribal and Community College.’’. (e) REPORT RECOMMENDING CRITERIA FOR ADDITIONAL ELIGI- BLE ENTITIES.—Not later than 1 year after the date of enactment of 

this Act, the Secretary of Agriculture shall submit a report containing recommended criteria for designating additional 1994 Institutions to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of 

the Senate. 

SEC. 7202. CARRYOVER FOR EXPERIMENT STATIONS. 

Section 7 of the Hatch Act of 1887 (7 U.S.C. 361g) is amended 

by striking subsection (c) and inserting the following: ‘‘(c) CARRYOVER.— ‘‘(1) IN GENERAL.—The balance of any annual funds provided under this Act to a State agricultural experiment station 

for a fiscal year that remains unexpended at the end of the fiscal year may be carried over for use during the following fiscal 

year. 

‘‘(2) FAILURE TO EXPEND FULL ALLOTMENT.—

‘‘(A) IN GENERAL.—If any unexpended balance carried 

over by a State is not expended by the end of the second fiscal year, an amount equal to the unexpended balance shall 

be deducted from the next succeeding annual allotment to 

the State. 

‘‘(B) REDISTRIBUTION.—Federal funds that are deducted under subparagraph (A) for a fiscal year shall be redistributed by the Secretary in accordance with the formula 

set forth in section 3(c) to those States for which no deduction under subparagraph (A) has been taken for that fiscal 

year.’’. 

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SEC. 7203. AUTHORIZATION PERCENTAGES FOR RESEARCH AND EXTENSION FORMULA FUNDS. 

(a) EXTENSION.—Section 1444(a) of the National Agricultural 

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

3221(a)) is amended— (1) by striking ‘‘(a) There’’ and inserting the following: ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.— ‘‘(1) IN GENERAL.—There’’; 

(2) by striking the second sentence; and 

(3) in the third sentence, by striking ‘‘Beginning’’ through ‘‘6 per centum’’ and inserting the following: 

‘‘(2) MINIMUM AMOUNT.—Beginning with fiscal year 2003, 

there shall be appropriated under this section for each fiscal 

year an amount that is not less than 15 percent’’; 

(3) by striking ‘‘Funds appropriated’’ and inserting the following: 

‘‘(3) USES.—Funds appropriated’’; and 

(4) by striking ‘‘No more’’ and inserting the following: 

‘‘(4) CARRYOVER.—No more’’. 

(b) RESEARCH.—Section 1445(a) of the National Agricultural 

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

3222(a)) is amended—

(1) by striking ‘‘(a) There’’ and inserting the following: 

‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—

‘‘(1) IN GENERAL.—There’’; 

(2) by striking the second sentence and inserting the following: 

‘‘(2) MINIMUM AMOUNT.—Beginning with fiscal year 2003, 

there shall be appropriated under this section for each fiscal 

year an amount that is not less than 25 percent of the total appropriations for the fiscal year under section 3 of the Hatch Act 

of 1887 (7 U.S.C. 361c).’’; 

(3) by striking ‘‘Funds appropriated’’ and inserting the following: 

‘‘(3) USES.—Funds appropriated’’; 

(4) by striking ‘‘The eligible’’ and inserting the following: 

‘‘(4) COORDINATION.—The eligible’’; and 

(5) by striking ‘‘No more’’ and inserting the following: 

‘‘(5) CARRYOVER.—No more’’. 

SEC. 7204. CARRYOVER FOR ELIGIBLE INSTITUTIONS. 

Section 1445(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222(a)) (as amended by section 7203 of this Act) is further amended by striking paragraph (5) and inserting the following: ‘‘(5) CARRYOVER.—

‘‘(A) IN GENERAL.—The balance of any annual funds 

provided to an eligible institution for a fiscal year under 

this section that remains unexpended at the end of the fiscal year may be carried over for use during the following 

fiscal year. 

‘‘(B) FAILURE TO EXPEND FULL AMOUNT.—

‘‘(i) IN GENERAL.—If any unexpended balance carried over by an eligible institution is not expended by 

the end of the second fiscal year, an amount equal to 

the unexpended balance shall be deducted from the 

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next succeeding annual allotment to the eligible institution. 

‘‘(ii) REDISTRIBUTION.—Federal funds that are deducted under clause (i) for a fiscal year shall be redistributed by the Secretary in accordance with the formula set forth in subsection (b)(2)(B) to those eligible 

institutions for which no deduction under clause (i) has 

been taken for that fiscal year.’’. 

SEC. 7205. INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS. 

(a) FUNDING.—Section 401(b) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7621(b)) is 

amended—

(1) in paragraph (1), by striking ‘‘2002’’ and inserting 

‘‘2001’’; and 

(2) by adding at the end the following: 

‘‘(3) OTHER FUNDING.—Out of funds in the Commodity 

Credit Corporation, the Secretary shall transfer to the Account—

‘‘(A) on October 1, 2003, $120,000,000; 

‘‘(B) on October 1, 2004, $140,000,000; 

‘‘(C) on October 1, 2005, $160,000,000; and 

‘‘(D) on October 1, 2006, and each October 1 thereafter, 

$200,000,000.’’. 

(2) by amending subsection (c)(1) to read as follows: 

‘‘(1) CRITICAL EMERGING AGRICULTURAL AND RURAL

ISSUES.—The Secretary shall use the funds in the Account for 

research, extension, and education grants (referred to in this 

section as ‘grants’) to address critical emerging agricultural and 

rural issues related to—

‘‘(A) future food production; 

‘‘(B) environmental quality and natural resource management; 

‘‘(C) farm income; or 

‘‘(D) rural economic and business and community development policy.’’; and 

(3) in subsection (e)(1), by striking ‘‘small and mid-sized’’

and inserting ‘‘small, mid-sized, and minority-serving’’. 

SEC. 7206. ELIGIBILITY FOR INTEGRATED GRANTS PROGRAM. 

Section 406(b) of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7626(b)) is amended by inserting ‘‘and 1994 Institutions’’ before ‘‘on a competitive basis’’. 

SEC. 7207. AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION 

REFORM ACT OF 1998. 

(a) PRECISION AGRICULTURE.—Section 403 of the Agricultural 

Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7623) is amended—

(1) in subsection (a)—

(A) in paragraph (3)—

(i) in subparagraph (A), inserting ‘‘, horticultural,’’

following ‘‘agronomic’’ the second place it appears; and 

(ii) in subparagraph (C), by striking ‘‘or’’ at the 

end; 

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(iii) in subparagraph (D), by striking the period at 

the end and inserting ‘‘; or’’; and 

(iv) by adding at the end the following: ‘‘(E) using such information to enable intelligent 

mechanized harvesting and sorting systems for horticultural crops.’’; 

(B) in paragraph (4)— (i) in subparagraph (C), by striking ‘‘or’’ at the end; 

(ii) in subparagraph (D), by striking the period at 

the end and inserting ‘‘; or’’; and 

(iii) by adding at the end the following: ‘‘(E) robotic and other intelligent machines for use in 

horticultural cropping systems.’’; and 

(C) in paragraph (5)(F), by inserting ‘‘(including improved use of energy inputs)’’ after ‘‘farm production efficiencies’’; 

(2) in subsection (c)(2)— (A) by inserting ‘‘or horticultural’’ after ‘‘agronomic’’; 

and 

(B) by striking ‘‘and meteorological variability’’ and inserting ‘‘product variability, and meteorological variability’’; 

(3) in subsection (d)— (A) by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively; and 

(B) by inserting after paragraph (3) the following: ‘‘(4) Improve farm energy use efficiencies.’’. (b) THOMAS JEFFERSON INITIATIVE FOR CROP DIVERSIFICA- TION.—Section 405(a) of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7625(a)) is amended by 

striking ‘‘and marketing’’ and inserting ‘‘, marketing, and efficient 

use’’. 

(c) COORDINATED PROGRAM OF RESEARCH, EXTENSION, AND

EDUCATION TO IMPROVE VIABILITY OF SMALL- AND MEDIUM-SIZE

DAIRY, LIVESTOCK, AND POULTRY OPERATIONS.—Section 407(b)(3) of 

the Agricultural Research, Extension, and Education Reform Act of 

1998 (7 U.S.C. 7627(b)(3)) is amended by inserting ‘‘(including improved use of energy inputs)’’ after ‘‘poultry systems that increase efficiencies’’. (d) SUPPORT FOR RESEARCH REGARDING DISEASES OF WHEAT, 

TRITICALE, AND BARLEY CAUSED BY FUSARIUM GRAMINEARUM OR BY

TILLETIA INDICA.—

(1) RESEARCH GRANT AUTHORIZED.—Section 408(a) of the 

Agricultural Research, Extension, and Education Reform Act of 

1998 (7 U.S.C. 7628(a)) is amended to read as follows: 

‘‘(a) RESEARCH GRANT AUTHORIZED.—The Secretary of Agriculture may make grants to consortia of land-grant colleges and 

universities to enhance the ability of the consortia to carry out 

multi-State research projects aimed at understanding and combating diseases of wheat, triticale, and barley caused by Fusarium 

graminearum and related fungi (referred to in this section as ‘wheat 

scab’) or by Tilletia indica and related fungi (referred to in this section as ‘Karnal bunt’).’’. (2) RESEARCH COMPONENTS.—Section 408(b) of such Act (7 

U.S.C. 7628(b)) is amended—

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(A) in paragraph (1), by inserting ‘‘or of Karnal bunt,’’

after ‘‘epidemiology of wheat scab’’; 

(B) in paragraph (1), by inserting ‘‘, triticale,’’ after ‘‘occurring in wheat’’; 

(C) in paragraph (2), by inserting ‘‘or Karnal bunt’’

after ‘‘wheat scab’’; 

(D) in paragraph (3)(A), by striking ‘‘and barley for the 

presence of’’ and inserting ‘‘, triticale, and barley for the 

presence of Karnal bunt or of’’; 

(E) in paragraph (3)(B), by striking ‘‘and barley infected with wheat scab’’ and inserting ‘‘, triticale, and barley infected with wheat scab or with Karnal bunt’’; 

(F) in paragraph (3)(C), by inserting ‘‘wheat scab’’ after 

‘‘to render’’; 

(G) in paragraph (4), by striking ‘‘and barley to wheat 

scab’’ and inserting ‘‘, triticale, and barley to wheat scab 

and to Karnal bunt’’; and 

(H) in paragraph (5)—

(i) by inserting ‘‘and Karnal bunt’’ after ‘‘wheat 

scab’’; and 

(ii) by inserting ‘‘, triticale,’’ after ‘‘resistant wheat’’. 

(3) COMMUNICATIONS NETWORKS.—Section 408(c) of such 

Act (7 U.S.C. 7628(c)) is amended by inserting ‘‘or Karnal bunt’’

after ‘‘wheat scab’’. 

(4) TECHNICAL AMENDMENTS.—(A) The section heading for 

section 408 of such Act is amended by striking ‘‘AND BARLEY 

CAUSED BY FUSARIUM GRAMINEARUM’’ and inserting ‘‘, 

TRITICALE, AND BARLEY CAUSED BY FUSARIUM 

GRAMINEARUM OR BY TILLETIA INDICA’’. 

(B) The table of sections for such Act is amended by striking ‘‘and barley caused by fusarium graminearum’’ in the item 

relating to section 408 and inserting ‘‘, triticale, and barley 

caused by Fusarium graminearum or by Tilletia indica’’. 

(e) PROGRAM TO CONTROL JOHNE’S DISEASE.—Title IV of the 

Agricultural Research, Extension, and Education Reform Act of 

1998 (7 U.S.C. 7621 et seq.) is amended by adding at the end the 

following new section: 

‘‘SEC. 409. BOVINE JOHNE’S DISEASE CONTROL PROGRAM. 

‘‘(a) ESTABLISHMENT.—The Secretary of Agriculture, in coordination with State veterinarians and other appropriate State animal 

health professionals, may establish a program to conduct research, 

testing, and evaluation of programs for the control and management 

of Johne’s disease in livestock. 

‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to the Secretary such sums as may be necessary 

to carry out this section for each of fiscal years 2003 through 2007.’’. 

SEC. 7208. FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF 

1990. 

(a) AGRICULTURAL GENOME INITIATIVE.—Section 1671(b) of the 

Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 

5924(b)) is amended— (1) in paragraph (3), by inserting ‘‘pathogens and’’ before ‘‘diseases causing economic hardship’’; 

(2) in paragraph (6), by striking ‘‘and’’ at the end;

314

(3) by redesignating paragraph (7) as paragraph (8); and 

(4) by inserting after paragraph (6) the following new paragraph: ‘‘(7) reducing the economic impact of plant pathogens on 

commercially important crop plants; and’’. (b) HIGH-PRIORITY RESEARCH AND EXTENSION INITIATIVES.— Section 1672(e) of the Food, Agriculture, Conservation, and Trade 

Act of 1990 (7 U.S.C. 5925) is amended by adding at the end the 

following new paragraphs: ‘‘(25) GENETICALLY MODIFIED AGRICULTURE PRODUCTS

(GMAP) RESEARCH.—Research grants may be made under this 

section for the purposes of providing unbiased, science-based 

evaluation of the risks and benefits to the public and the environment of specific genetically modified plant and animal products. Grants may be used to form interdisciplinary teams to review and conduct research on scientific, social, economic, and 

ethical issues during the review process, to answer questions 

raised by the release of new genetically modified agriculture 

products, to conduct fundamental studies on the health and environmental safety of genetically modified agriculture products 

(including quantitative risk assessment, the effect of specific genetically modified agriculture products on human health, and 

gene flow studies), to communicate the risk of genetically modified agriculture products through extension and education programs, and to engage the public and industry in relevant 

issues. ‘‘(26) WIND EROSION RESEARCH AND EXTENSION.—Research 

and extension grants may be made under this section for the 

purpose of validating wind erosion models. ‘‘(27) CROP LOSS RESEARCH AND EXTENSION.—Research and 

extension grants may be made under this section for the purpose of validating crop loss models. ‘‘(28) LAND USE MANAGEMENT RESEARCH AND EXTENSION.— Research and extension grants may be made under this section 

for the purposes of evaluating the environmental benefits of 

land use management tools such as those provided in the Farmland Protection Program. 

‘‘(29) WATER AND AIR QUALITY RESEARCH AND EXTENSION.— Research and extension grants may be made under this section 

for the purpose of better understanding agricultural impacts to 

air and water quality and means to address them. ‘‘(30) REVENUE AND INSURANCE TOOLS RESEARCH AND EXTENSION.—Research and extension grants may be made under 

this section for the purposes of better understanding the impact 

of revenue and insurance tools on farm income. 

‘‘(31) AGROTOURISM RESEARCH AND EXTENSION.—Research 

and extension grants may be made under this section for the 

purpose of better understanding the economic, environmental, 

and food systems impacts of agrotourism. ‘‘(32) HARVESTING PRODUCTIVITY FOR FRUITS AND VEGETA- BLES.—Research and extension grants may be made under this 

section for the purpose of improving harvesting productivity for 

fruits and vegetables (including citrus), including the development of mechanical harvesting technologies and effective, economical, and safe abscission compounds. 

315

‘‘(33) NITROGEN-FIXATION BY PLANTS.—Research and extension grants may be made under this section for the purpose of 

enhancing the nitrogen-fixing ability and efficiency of legumes, 

developing new varieties of legumes that fix nitrogen more efficiently, and developing new varieties of other commercially important crops that potentially are able to fix nitrogen. ‘‘(34) AGRICULTURAL MARKETING.—Extension grants may be 

made under this section for the purpose of providing education 

materials, information, and outreach programs regarding commodity and livestock marketing strategies for agricultural producers and for cooperatives and other marketers of any agricultural commodity, including livestock. ‘‘(35) ENVIRONMENT AND PRIVATE LANDS RESEARCH AND EX- TENSION.—Research and extension grants may be made under 

this section for the purpose of researching the use of computer 

models to aid in assessment of best management practices on a 

watershed basis, working with government, industry, and private landowners to help craft industry-led solutions to identified environmental issues, researching and monitoring water, 

air, or soil environmental quality to aid in the development of 

new approaches to local environmental concerns, and working 

with local, State, and federal officials to help craft effective environmental solutions that respect private property rights and 

agricultural production realities. ‘‘(36) LIVESTOCK DISEASE RESEARCH AND EXTENSION.—Research and extension grants may be made under this section for 

the purpose of identifying possible livestock disease threats, 

educating the public regarding livestock disease threats, training persons to deal with such threats, and conducting related 

research. ‘‘(37) PLANT GENE EXPRESSION.—Research grants may be 

made under this section for the purpose of plant gene expression 

research to accelerate the application of basic plant genomic 

science to the development and testing of new varieties of enhanced food crops, crops that can be used as renewable energy 

sources, and other alternative uses of agricultural crops. 

‘‘(38) ANIMAL INFECTIOUS DISEASES RESEARCH.—Research 

and extension grants may be made under this section for the 

purpose of developing prevention and control methodologies for 

animal infectious diseases (including evaluation under field 

conditions in countries in which an animal disease occurs) such 

as laboratory tests for quicker detection of infected animals and 

presence of disease, prevention strategies (including vaccination 

programs), and rapid diagnostic techniques for animal disease 

agents considered to be risks for agricultural bioterrorism attack. ‘‘(39) PROGRAM TO COMBAT CHILDHOOD OBESITY.—Research 

and extension grants may be made under this section to institutions of higher education with demonstrated capacity in basic 

and clinical obesity research, nutrition research, and community health education research to develop and evaluate community-wide strategies that catalyze partnerships between families 

and health care, education, recreation, mass media, and other 

community resources to reduce the incidence of childhood obesity. 

316

‘‘(40) INTEGRATED PEST MANAGEMENT.—Research and extension grants may be made under this section to coordinate 

and improve research, education, and outreach on, and implementation on farms of, integrated pest management. ‘‘(41) BEEF CATTLE GENETICS.—Research and extension 

grants for beef cattle genetics evaluation research may be made 

under this section to consortia of institutions of higher education that have expertise in beef cattle genetic evaluation research and technology and that have been actively involved for 

at least 20 years in the estimation and prediction of progeny 

differences for publication and use by seed stock producer breed 

associations. ‘‘(42) DAIRY PIPELINE CLEANER.—Research and extension 

grants may be made under this section for the purpose of preventing and eliminating the dangers of dairy pipeline cleaner, 

including development of safer packaging and transfer mechanisms, outlining accident causes and potential prevention measures, and other means of improving efforts to prevent ingestion 

of dairy pipeline cleaner. ‘‘(43) DEVELOPMENT OF PUBLICLY HELD PLANTS AND ANIMAL

VARIETIES.—Research and extension grants may be made under 

this section for the purpose of development of publicly held 

plants and animal varieties (including germplasm for identitypreserved markets) and genetic resource conservation activities. 

‘‘(44) SUGARCANE GENETICS.—Research grants may be 

made under this section for the purpose of maintaining acceptable yields under reduced production inputs, implementing 

marker-assisted breeding strategies and other basic plant 

genomic technologies to screen for improved plant resistance to 

diseases, weeds, and insects toward minimizing pesticide use, 

enhancing food, fiber and energy production, and developing 

varieties for maximum performance under prevailing conditions, including management for improved soil and water conservation.’’. 

(c) ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH DIS- ABILITIES.—Section 1680(a) of the Food, Agriculture, Conservation, 

and Trade Act of 1990 (7 U.S.C. 5933(a)) is amended by adding at 

the end the following new paragraph: ‘‘(6) CONSIDERATION FOR GRANTS FOR NEW PROGRAMS.—For 

each fiscal year that amounts are made available for grants 

under this subsection, the Secretary may make grants in a 

manner that ensures that eligible entities who apply for grants, 

but have not previously received a grant under this subsection, 

are given full consideration.’’. 

SEC. 7209. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND 

TEACHING POLICY ACT OF 1977. 

(a) NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMIC ADVISORY BOARD.—Section 1408 of the National Agricultural Research, Extension, and Teaching Policy Act of 

1977 (7 U.S.C. 3123) is amended—

(1) in subsection (b)(1), by striking ‘‘30 members’’ and inserting ‘‘31 members’’; 

(2) in subsection (b)(3)—

(A) by redesignating subparagraphs (R) through (DD) 

as subparagraphs (S) through (EE), respectively; and 

317

(B) by inserting after subparagraph (Q) the following 

new subparagraph: ‘‘(R) 1 member representing a non-land grant college or 

university with a historic commitment to research in the 

food and agricultural sciences.’’; 

(3) in subsection (c)(1), by striking ‘‘and land-grant colleges 

and universities’’ and inserting ‘‘, land-grant colleges and universities, and the Committee on Agriculture of the House of 

Representatives, the Committee on Agriculture, Nutrition, and 

Forestry of the Senate, the Subcommittee on Agriculture, Rural 

Development, Food and Drug Administration and Related 

Agencies of the Committee on Appropriations of the House of 

Representatives, and the Subcommittee on Agriculture, Rural 

Development and Related Agencies of the Committee on Appropriations of the Senate’’; and 

(4) in subsection (d)(1), inserting ‘‘consult with any appropriate agencies of the Department of Agriculture and’’ after ‘‘the 

Advisory Board shall’’. (b) GRANTS FOR RESEARCH ON PRODUCTION AND MARKETING OF

ALCOHOLS AND INDUSTRIAL HYDROCARBONS FROM AGRICULTURAL

COMMODITIES AND FOREST PRODUCTS.—Section 1419 of the National Agricultural Research, Extension, and Teaching Policy Act of 

1977 (7 U.S.C. 3154) is amended— (1) in subsection (a)(2), by inserting ‘‘and animal fats and 

oils’’ after ‘‘industrial oilseed crops’’; and 

(2) in subsection (a)(4), by inserting ‘‘or triglycerides’’ after ‘‘other industrial hydrocarbons’’. (c) FAS OVERSEAS INTERN PROGRAM.—Section 1458(a) of the 

National Agricultural Research, Extension, and Teaching Policy Act 

of 1977 (7 U.S.C. 3291(a)) is amended— (1) by striking ‘‘and’’ at the end of paragraph (8); 

(2) by striking the period at the end of paragraph (9) and 

inserting ‘‘; and’’; and 

(3) by adding at the end the following new paragraph: 

‘‘(10) establish a program, to be coordinated by the Cooperative State Research, Education, and Extension Service and the 

Foreign Agricultural Service, to place interns from United 

States colleges and universities at Foreign Agricultural Service 

field offices overseas.’’. (d) RANGELAND RESEARCH GRANTS.—Section 1480 of the National Agricultural Research, Extension, and Teaching Policy Act of 

1977 (7 U.S.C. 3333) is amended to read as follows: 

‘‘SEC. 1480. RANGELAND RESEARCH GRANTS. 

‘‘(a) IN GENERAL.—The Secretary may make grants to—

‘‘(1) land-grant colleges and universities, State agricultural 

experiment stations, and colleges, universities, and Federal laboratories having a demonstrable capacity in rangeland research, as determined by the Secretary, to carry out rangeland 

research; and 

‘‘(2) the Joe Skeen Institute for Rangeland Restoration for 

the purposes of facilitating and expanding ongoing State-Federal range management, animal husbandry, and agricultural 

research, education, and extension programs to meet the targeted, emerging, and future needs of western United States 

rangelands and associated natural resources. 

318

‘‘(b) MATCHING REQUIREMENTS.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 

this grant program shall be based on a matching formula of 50 

percent Federal and 50 percent non-Federal funding. 

‘‘(2) EXCEPTION.—Paragraph (1) shall not apply to a grant 

to a Federal laboratory or a grant under subsection (a)(2).’’. 

SEC. 7210. BIOTECHNOLOGY RISK ASSESSMENT RESEARCH. 

Section 1668 of the Food, Agriculture, Conservation, and Trade 

Act of 1990 (7 U.S.C. 5921) is amended to read as follows: 

‘‘SEC. 1668. BIOTECHNOLOGY RISK ASSESSMENT RESEARCH. 

‘‘(a) PURPOSE.—It is the purpose of this section—

‘‘(1) to authorize and support environmental assessment research to help identify and analyze environmental effects of biotechnology; and 

‘‘(2) to authorize research to help regulators develop longterm policies concerning the introduction of such technology. 

‘‘(b) GRANT PROGRAM.—The Secretary of Agriculture shall establish a grant program within the Cooperative State Research, 

Education, and Extension Service and the Agricultural Research 

Service to provide the necessary funding for environmental assessment research concerning the introduction of genetically engineered 

animals, plants, and microorganisms into the environment. 

‘‘(c) RESEARCH PRIORITIES.— The following types of research 

shall be given priority for funding: 

‘‘(1) Research designed to identify and develop appropriate 

management practices to minimize physical and biological risks 

associated with genetically engineered animals, plants, and 

microorganisms. 

‘‘(2) Research designed to develop methods to monitor the 

dispersal of genetically engineered animals, plants, and microorganisms. 

‘‘(3) Research designed to further existing knowledge with 

respect to the characteristics, rates, and methods of gene transfer that may occur between genetically engineered animals, 

plants, and microorganisms and related wild and agricultural 

organisms. 

‘‘(4) Environmental assessment research designed to provide 

analysis which compares the relative impacts of animals, 

plants, and microorganisms modified through genetic engineering to other types of production systems. 

‘‘(5) Other areas of research designed to further the purposes of this section. 

‘‘(d) ELIGIBILITY REQUIREMENTS.—Grants under this section 

shall be—

‘‘(1) made on the basis of the quality of the proposed research project; and 

‘‘(2) available to any public or private research or educational institution or organization. 

‘‘(e) CONSULTATION.— In considering specific areas of research 

for funding under this section, the Secretary of Agriculture shall 

consult with the Administrator of the Animal and Plant Health Inspection Service and the National Agricultural Research, Extension, 

Education, and Economics Advisory Board. 

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‘‘(f) PROGRAM COORDINATION.— The Secretary of Agriculture 

shall coordinate research funded under this section with the Office 

of Research and Development of the Environmental Protection Agency in order to avoid duplication of research activities. 

‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—

‘‘(1) IN GENERAL.— There are authorized to be appropriated 

such sums as necessary to carry out this section. 

‘‘(2) WITHHOLDINGS FROM BIOTECHNOLOGY OUTLAYS.—The 

Secretary of Agriculture shall withhold from outlays of the Department of Agriculture for research on biotechnology, as defined and determined by the Secretary, at least 2 percent of 

such amount for the purpose of making grants under this section for research on biotechnology risk assessment. 

‘‘(3) APPLICATION OF FUNDS.—Funds made available under 

this subsection shall be applied, to the maximum extent practicable, to risk assessment research on all categories identified 

in subsection (c).’’. 

SEC. 7211. COMPETITIVE, SPECIAL, AND FACILITIES RESEARCH 

GRANTS. 

Section 2(b)(2) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(2)) is amended by striking ‘‘in—

’’ and inserting the following: ‘‘in the areas described in subparagraphs (A) through (F). Such needs shall be determined by the Secretary, in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board, not later than 

July 1 of each fiscal year for the purposes of the following fiscal 

year.’’. 

SEC. 7212. MATCHING FUNDS REQUIREMENT FOR RESEARCH AND EXTENSION ACTIVITIES OF 1890 INSTITUTIONS. 

Section 1449 of the National Agricultural Research, Extension, 

and Teaching Policy Act of 1977 (7 U.S.C. 3222d) is amended—

(1) by amending subsection (c) to read as follows: 

‘‘(c) MATCHING FORMULA.—Notwithstanding any other provision of this subtitle, for each of fiscal years 2003 through 2007, the

State shall provide matching funds from non-Federal sources. Such 

matching funds shall be for an amount equal to not less than—

‘‘(1) 60 percent of the formula funds to be distributed to the 

eligible institution for fiscal year 2003; 

‘‘(2) 70 percent of the formula funds to be distributed to the 

eligible institution for fiscal year 2004; 

‘‘(3) 80 percent of the formula funds to be distributed to the 

eligible institution for fiscal year 2005; 

‘‘(4) 90 percent of the formula funds to be distributed to the 

eligible institution for fiscal year 2006; and 

‘‘(5) 100 percent of the formula funds to be distributed to 

the eligible institution for fiscal year 2007 and each fiscal year 

thereafter.’’; and 

(2) by amending subsection (d) to read as follows: 

‘‘(d) WAIVER AUTHORITY.—Notwithstanding subsection (f), the 

Secretary may waive the matching funds requirement under subsection (c) above the 50 percent level for any fiscal year for an eligible institution of a State if the Secretary determines that the State 

will be unlikely to satisfy the matching requirement.’’. 

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SEC. 7213. MATCHING REQUIREMENTS FOR RESEARCH AND EXTENSION FORMULA FUNDS FOR INSULAR AREA LAND-GRANT 

INSTITUTIONS. 

(a) EXPERIMENT STATIONS.—Section 3(d) of the Hatch Act of 

1887 (7 U.S.C. 361c(d)) is amended by striking paragraph (4) and 

inserting the following: 

‘‘(4) EXCEPTION FOR INSULAR AREAS.—

‘‘(A) IN GENERAL.—Effective beginning for fiscal year 

2003, in lieu of the matching funds requirement of paragraph (1), the insular areas of the Commonwealth of Puerto 

Rico, Guam, and the Virgin Islands of the United States 

shall provide matching funds from non-Federal sources in 

an amount equal to not less than 50 percent of the formula 

funds distributed by the Secretary to each of the insular 

areas, respectively, under this section. 

‘‘(B) WAIVERS.—The Secretary may waive the matching 

fund requirement of subparagraph (A) for any fiscal year if 

the Secretary determines that the government of the insular 

area will be unlikely to meet the matching requirement for 

the fiscal year.’’. 

(b) COOPERATIVE AGRICULTURAL EXTENSION.—Section 3(e) of 

the Smith-Lever Act (7 U.S.C. 343(e)) is amended by striking paragraph (4) and inserting the following: 

‘‘(4) EXCEPTION FOR INSULAR AREAS.—

‘‘(A) IN GENERAL.—Effective beginning for fiscal year 

2003, in lieu of the matching funds requirement of paragraph (1), the insular areas of the Commonwealth of Puerto 

Rico, Guam, and the Virgin Islands of the United States 

shall provide matching funds from non-Federal sources in 

an amount equal to not less than 50 percent of the formula 

funds distributed by the Secretary to each of the insular 

areas, respectively, under this section. 

‘‘(B) WAIVERS.—The Secretary may waive the matching 

fund requirement of subparagraph (A) for any fiscal year if 

the Secretary determines that the government of the insular 

area will be unlikely to meet the matching requirement for 

the fiscal year.’’. 

SEC. 7214. DEFINITION OF FOOD AND AGRICULTURAL SCIENCES. 

Section 2(3) of the Research Facilities Act (7 U.S.C. 390(2)(3)) 

is amended to read as follows: 

‘‘(3) FOOD AND AGRICULTURAL SCIENCES.—The term ‘food 

and agricultural sciences’ has the meaning given that term in 

section 1404(8) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103(8)).’’. 

SEC. 7215. FEDERAL EXTENSION SERVICE. 

Section 3(b)(3) of the Smith-Lever Act (7 U.S.C. 343(b)(3)) is 

amended—

(1) by striking ‘‘$5,000,000’’ and inserting ‘‘such sums as 

are necessary’’; and 

(2) by adding after the first sentence the following new sentence: ‘‘The balance of any annual funds provided under the 

preceding sentence for a fiscal year that remains unexpended at 

the end of that fiscal year shall remain available without fiscal 

year limitation.’’. 

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SEC. 7216. POLICY RESEARCH CENTERS. 

Section 1419A(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3155(c)(3)) is 

amended by striking ‘‘collect and analyze’’ and inserting ‘‘collect, 

analyze, and disseminate’’. 

SEC. 7217. AVAILABILITY OF COMPETITIVE GRANT FUNDS. 

The National Agricultural Research, Extension, and Teaching 

Policy Act of 1977 is amended by inserting after section 1469 (7 

U.S.C. 3315) the following: 

‘‘SEC. 1469A. AVAILABILITY OF COMPETITIVE GRANT FUNDS. 

‘‘Except as otherwise provided by law, funds made available to 

the Secretary to carry out a competitive agricultural research, education, or extension grant program under this or any other Act shall 

be available for obligation for a 2-year period beginning on October 

1 of the fiscal year for which the funds are made available.’’. 

SEC. 7218. ORGANIC AGRICULTURE RESEARCH AND EXTENSION INITIATIVE. 

Section 1672B of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (7 U.S.C. 5925b) is amended—

(1) in subsection (a)—

(A) in paragraph (1), by inserting ‘‘, breeding,’’ after 

‘‘production’’; 

(B) in paragraph (2), by striking ‘‘and’’ at the end; 

(C) in paragraph (3), by striking the period at the end 

and inserting a semicolon; and 

(D) by adding at the end the following: 

‘‘(4) determining desirable traits for organic commodities; 

‘‘(5) identifying marketing and policy constraints on the expansion of organic agriculture; and 

‘‘(6) conducting advanced on-farm research and development that emphasizes observation of, experimentation with, and 

innovation for working organic farms, including research relating to production and marketing and to socioeconomic conditions.’’; and 

(2) by amending subsection (e) to read as follows: 

‘‘(e) FUNDING.—On October 1, 2003, and each October 1 thereafter through October 1, 2007, out of any funds in the Treasury not 

otherwise appropriated, the Secretary of the Treasury shall transfer 

$3,000,000 to the Secretary of Agriculture for this section.’’. 

SEC. 7219. SENIOR SCIENTIFIC RESEARCH SERVICE. 

Subtitle B of title VI of the Agricultural Research, Extension, 

and Education Reform Act of 1998 (7 U.S.C. 7651 et seq.) is amended by adding at the end the following: 

‘‘SEC. 620. SENIOR SCIENTIFIC RESEARCH SERVICE. 

‘‘(a) IN GENERAL.—There is established in the Department of 

Agriculture the Senior Scientific Research Service (referred to in 

this section as the ‘Service’). 

‘‘(b) MEMBERS.—

‘‘(1) IN GENERAL.—Subject to paragraphs (2) through (4), 

the Secretary shall appoint the members of the Service. 

‘‘(2) QUALIFICATIONS.—To be eligible for appointment to the 

Service, an individual shall—

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‘‘(A) have conducted outstanding research in the field 

of agriculture or forestry; ‘‘(B) have earned a doctoral level degree at an institution of higher education (as defined in section 101 of the 

Higher Education Act of 1965 (20 U.S.C. 1001)); and ‘‘(C) meet qualification standards prescribed by the Director of the Office of Personnel Management for appointment to a position at level GS–15 of the General Schedule. ‘‘(3) NUMBER.—Not more than 100 individuals may serve 

as members of the Service at any 1 time. ‘‘(4) OTHER REQUIREMENTS.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B) and 

subsection (d)(2), the Secretary may appoint and employ a 

member of the Service without regard to— ‘‘(i) the provisions of title 5, United States Code, 

governing appointments in the competitive service; ‘‘(ii) the provisions of subchapter I of chapter 35 of 

title 5, United States Code, relating to retention preference; ‘‘(iii) the provisions of chapter 43 of title 5, United 

States Code, relating to performance appraisal and 

performance actions; ‘‘(iv) the provisions of chapter 51 and subchapter 

III of chapter 53 of title 5, United States Code, relating 

to classification and General Schedule pay rates; and ‘‘(v) the provisions of chapter 75 of title 5, United 

States Code, relating to adverse actions. 

‘‘(B) EXCEPTION.—A member of the Service appointed 

and employed by the Secretary under subparagraph (A) 

shall have the same right of appeal to the Merit Systems 

Protection Board and the same right to file a complaint 

with the Office of Special Counsel as an employee appointed to a position at level GS–15 of the General Schedule. 

‘‘(c) PERFORMANCE APPRAISAL SYSTEM.—The Secretary shall develop a performance appraisal system for members of the Service 

that is designed to— ‘‘(1) provide for the systematic appraisal of the employment 

performance of the members; and ‘‘(2) encourage excellence in employment performance by the 

members. 

‘‘(d) COMPENSATION.—

‘‘(1) IN GENERAL.—Subject to paragraph (2), the Secretary 

shall determine the compensation of members of the Service. 

‘‘(2) LIMITATIONS.—The rate of pay for a member of the 

Service shall—

‘‘(A) not be less than the minimum rate payable for a 

position at level GS–15 of the General Schedule; and 

‘‘(B) not be more than the rate payable for a position 

at level I of the Executive Schedule, unless the rate is approved by the President under section 5377(d)(2) of title 5, 

United States Code. ‘‘(e) RETIREMENT CONTRIBUTIONS.—

‘‘(1) IN GENERAL.—On the request of a member of the Service who was an employee of an institution of higher education 

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(as defined in section 101 of the Higher Education Act of 1965 

(20 U.S.C. 1001)) immediately prior to appointment as a member of the Service and who retains the right to continue to make 

contributions to the retirement system of the institution, the Secretary may contribute an amount not to exceed 10 percent of the 

basic pay of the member to the retirement system of the institution on behalf of the member. 

‘‘(2) FEDERAL RETIREMENT SYSTEM.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), a 

member for whom a contribution is made under paragraph 

(1) shall not, as a result of serving as a member of the 

Service, be covered by, or earn service credit under, chapter 

83 or 84 of title 5, United States Code. 

‘‘(B) ANNUAL LEAVE.—Service of a member of the Service described in subparagraph (A) shall be creditable for 

determining years of service under section 6303(a) of title 

5, United States Code. 

‘‘(f) INVOLUNTARY SEPARATION.—

‘‘(1) IN GENERAL.—Subject to paragraph (2) and notwithstanding the provisions of title 5, United States Code, governing 

appointment in the competitive service, in the case of an individual who is separated from the Service involuntarily and 

without cause—

‘‘(A) the Secretary may appoint the individual to a position in the competitive civil service at level GS–15 of the 

General Schedule; and 

‘‘(B) the appointment shall be a career appointment. 

‘‘(2) EXCEPTED CIVIL SERVICE.—In the case of an individual 

described in paragraph (1) who immediately prior to appointment as a member of the Service was not a career appointee in 

the civil service or the Senior Executive Service, the appointment of the individual under paragraph (1)—

‘‘(A) shall be to the excepted civil service; and 

‘‘(B) may not exceed a period of 2 years.’’. 

SEC. 7220. TERMINATION OF CERTAIN SCHEDULE A APPOINTMENTS. 

(a) TERMINATION.—Not later than January 31, 2003, the Secretary of Agriculture shall terminate each appointment listed as an 

excepted position under schedule A of the General Schedule made 

by the Secretary to the Federal civil service of an individual who 

holds dual government appointments, and who carries out agricultural extension work in a program at a college or university eligible 

to receive funds, under—

(1) the Smith-Lever Act (7 U.S.C. 341 et seq.); 

(2) section 1444 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3221); or 

(3) section 208(e) of the District of Columbia Public Postsecondary Education Reorganization Act (88 Stat. 1428). 

(b) CONTINUATION OF CERTAIN FEDERAL BENEFITS.—

(1) IN GENERAL.—Notwithstanding title 5, United States 

Code, and subject to paragraph (2), an individual described in 

subsection (a), during the period the individual is employed in 

an agricultural extension program described in subsection (a) 

without a break in service, shall continue to—

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(A) be eligible to participate, to the same extent that the 

individual was eligible to participate (on the day before the 

date of enactment of this Act), in—

(i) the Federal Employee Health Benefits Program; 

(ii) the Federal Employee Group Life Insurance 

Program; 

(iii) the Civil Service Retirement System; 

(iv) the Federal Employee Retirement System; 

(v) the Thrift Savings Plan; and 

(vi) the Federal Long Term Care Insurance Program; and 

(B) receive Federal Civil Service employment credit to 

the same extent that the individual was receiving such 

credit on the day before the date of enactment of this Act. 

(2) LIMITATIONS.—An individual may continue to be eligible for the benefits described in paragraph (1) if—

(A) in the case of an individual who remains employed 

in the agricultural extension program described in subsection (a) on the date of enactment of this Act, the employing college or university continues to fulfill the administrative and financial responsibilities (including making agency contributions) associated with providing those benefits, 

as determined by the Secretary of Agriculture; and 

(B) in the case of an individual who changes employment to a second college or university described in subsection (a)—

(i) the individual continues to work in an agricultural extension program described in subsection (a), as 

determined by the Secretary of Agriculture; 

(ii) the second college or university—

(I) fulfills the administrative and financial responsibilities (including making agency contributions) associated with providing those benefits, as 

determined by the Secretary of Agriculture; and 

(II) within 1 year before the date of the employment of the individual, had employed a different individual described in subsection (a) who 

had performed the same duties of employment; and 

(iii) the individual was eligible for those benefits 

on the day before the date of enactment of this Act. 

SEC. 7221. BIOSECURITY PLANNING AND RESPONSE PROGRAMS. 

(a) BIOSECURITY.—The National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3101 et seq.) is 

amended by adding at the end the following: 

‘‘Subtitle N—Biosecurity 

‘‘SEC. 1484. SPECIAL AUTHORIZATION FOR BIOSECURITY PLANNING 

AND RESPONSE. 

‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—In addition to 

amounts for agricultural research, extension, and education under 

this Act, there are authorized to be appropriated for agricultural research, education, and extension activities for biosecurity planning 

325

and response such sums as are necessary for each of fiscal years 

2002 through 2007. ‘‘(b) USE OF FUNDS.—Using any authority available to the Secretary, the Secretary shall use funds made available under this section to carry out agricultural research, education, and extension activities (including through competitive grants) for the following: ‘‘(1) To reduce the vulnerability of the United States food 

and agricultural system to chemical or biological attack. ‘‘(2) To continue partnerships with institutions of higher 

education and other institutions to help form stable, long-term 

programs to enhance the biosecurity of the United States, including the coordination of the development, implementation, 

and enhancement of diverse capabilities for addressing threats 

to the Nation’s agricultural economy and food supply with special emphasis on planning, training, outreach, and research activities related to vulnerability analyses, incident response, and 

detection and prevention technologies. ‘‘(3) To make competitive grants to universities and qualified research institutions for research on counterbioterrorism. ‘‘(4) To counter or otherwise respond to chemical or biological attack. 

‘‘SEC. 1485. AGRICULTURE RESEARCH FACILITY EXPANSION AND SECURITY UPGRADES. 

‘‘(a) IN GENERAL.—To enhance the security of agriculture in the 

United States against threats posed by bioterrorism, the Secretary 

shall make expansion or security upgrade grants on a competitive 

basis to colleges and universities (as defined in section 1404(4)). 

‘‘(b) LIMITATION ON GRANTS.—Grants to a recipient under this 

section shall not exceed $10,000,000 in any fiscal year.

‘‘(c) REQUIREMENTS FOR GRANTS.—The Secretary shall make a 

grant under this section only if the grant applicant provides satisfactory assurances to the Secretary that—

‘‘(1) sufficient funds are available to pay the non-Federal 

share of the cost of the proposed expansion or security upgrades; 

and 

‘‘(2) the proposed expansion or security upgrades meet such 

reasonable qualifications as may be established by the Secretary 

with respect to biosafety and biosecurity requirements necessary 

to protect facility staff, members of the public, and the food supply. 

‘‘(d) ADDITIONAL REQUIREMENTS FOR GRANTS FOR FACILITY EX- PANSION.—The Secretary shall make a grant under this section for 

the expansion, renovation, remodeling, or alteration (collectively referred to in this section as ‘‘expansion’’) of a facility only if the grant 

applicant provides such assurances as the Secretary determines to 

be satisfactory to ensure the following: 

‘‘(1) For not less than 20 years after the grant is awarded, 

the facility shall be used for the purposes of the research for 

which the facility was expanded, as described in the grant application. 

‘‘(2) Sufficient funds will be available, as of the date of 

completion of the expansion, for the effective use of the facility 

for the purposes of the research for which the facility was expanded. 

‘‘(3) The proposed expansion—

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‘‘(A) will increase the capability of the applicant to conduct research for which the facility was expanded; or ‘‘(B) is necessary to improve the quality of the research 

of the applicant. ‘‘(e) AMOUNT OF GRANT.—The amount of a grant awarded 

under this section shall be determined by the Secretary. ‘‘(f) FEDERAL SHARE.—The Federal share of the cost of any expansion or security upgrade carried out using funds from a grant 

provided under this section shall not exceed 50 percent. ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this section such sums as are necessary for each fiscal year.’’. (b) SENSE OF CONGRESS ON INCREASING CAPACITY FOR RE- SEARCH ON BIOSECURITY AND ANIMAL AND PLANT HEALTH DIS- EASES.—It is the sense of Congress that funding for the Agricultural 

Research Service, the Animal and Plant Health Inspection Service, 

and other agencies of the Department of Agriculture with responsibilities for biosecurity should be increased as necessary to improve 

the capacity of the agencies to conduct research and analysis of, and 

respond to, bioterrorism and animal and plant diseases. 

SEC. 7222. INDIRECT COSTS FOR SMALL BUSINESS INNOVATION RESEARCH GRANTS. 

Section 1462 of the National Agricultural Research, Extension, 

and Teaching Policy Act of 1977 (7 U.S.C. 3310) is amended— (1) by inserting ‘‘(a) IN GENERAL.—’’ before ‘‘Except’’; and 

(2) by adding at the end the following: ‘‘(b) EXCEPTION.—Subsection (a) shall not apply to a grant 

awarded competitively under section 9 of the Small Business Act (15 

U.S.C. 638).’’. 

SEC. 7223. CARBON CYCLE RESEARCH. 

Section 221 of the Agricultural Risk Protection Act of 2000 

(Public Law 106–224; 114 Stat. 407), as amended by section 9009 

of this Act, is amended— (1) in subsection (a), by striking ‘‘Of the amount’’ and all 

that follows through ‘‘to provide’’ and inserting ‘‘To the extent 

funds are made available for this purpose, the Secretary shall 

provide’’; 

(2) in subsection (f), by striking ‘‘under subsection (a)’’ and 

inserting ‘‘for this section’’; and 

(3) by adding at the end the following new subsection: ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated for fiscal years 2002 through 2007 such sums as 

may be necessary to carry out this section.’’. 

Subtitle C—Repeal of Certain Activities 

and Authorities 

SEC. 7301. FOOD SAFETY RESEARCH INFORMATION OFFICE AND NATIONAL CONFERENCE. 

(a) REPEAL.—Subsections (b) and (c) of section 615 of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 

U.S.C. 7654(b) and (c)) are repealed. 

(b) CONFORMING AMENDMENTS.—

(1) GENERALLY.—Section 615 of such Act is amended—

327

(A) in the section heading, by striking ‘‘AND NATIONAL CONFERENCE’’; 

(B) by striking ‘‘(a) FOOD SAFETY RESEARCH INFORMATION OFFICE.—’’; 

(C) by redesignating paragraphs (1), (2), and (3) as 

subsections (a), (b), and (c), respectively, and moving the 

margins 2 ems to the left; 

(D) in subsection (b) (as so redesignated), by redesignating subparagraphs (A) and (B) as paragraphs (1) and 

(2), respectively, and moving the margins 2 ems to the left; 

and 

(E) in subsection (c) (as so redesignated), by striking 

‘‘this subsection’’ and inserting ‘‘this section’’. 

(2) TABLE OF SECTIONS.—The table of sections for such Act 

is amended by striking ‘‘and National Conference’’ in the item 

relating to section 615. 

SEC. 7302. REIMBURSEMENT OF EXPENSES UNDER SHEEP PROMOTION, RESEARCH, AND INFORMATION ACT OF 1994. 

Section 617 of the Agricultural Research, Extension, and Education Reform Act of 1998 (Public Law 105–185; 112 Stat. 607) is 

repealed. 

SEC. 7303. MARKET EXPANSION RESEARCH. 

Section 1436 of the Food Security Act of 1985 (7 U.S.C. 1632) 

is repealed. 

SEC. 7304. NATIONAL ADVISORY BOARD ON AGRICULTURAL WEATHER. 

(a) REPEAL.—Section 1639 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5853) is repealed. 

(b) CONFORMING AMENDMENT.—Section 1640(b) of the Food, 

Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5854(b)) 

is amended by striking ‘‘take into’’ and all that follows through 

‘‘Weather and’’. 

SEC. 7305. AGRICULTURAL INFORMATION EXCHANGE WITH IRELAND. 

Section 1420 of the National Agricultural Research, Extension 

and Teaching Policy Act Amendments of 1985 (Public Law 99–198; 

99 Stat. 1551) is repealed. 

SEC. 7306. PESTICIDE RESISTANCE STUDY. 

Section 1437 of the National Agricultural Research, Extension, 

and Teaching Policy Act Amendments of 1985 (Public Law 99–198; 

99 Stat. 1558) is repealed. 

SEC. 7307. EXPANSION OF EDUCATION STUDY. 

Section 1438 of the National Agricultural Research, Extension, 

and Teaching Policy Act Amendments of 1985 (Public Law 99–198; 

99 Stat. 1559) is repealed. 

SEC. 7308. TASK FORCE ON 10-YEAR STRATEGIC PLAN FOR AGRICULTURAL RESEARCH FACILITIES. 

(a) REPEAL.—Section 4 of the Research Facilities Act (7 U.S.C. 

390b) is repealed. 

(b) CONFORMING AMENDMENT.—Section 2 of such Act (7 U.S.C. 

390) is amended by striking paragraph (5). 

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Subtitle D—New Authorities 

SEC. 7401. SUBTITLE DEFINITIONS. 

In this subtitle: 

(1) DEPARTMENT.—The term ‘‘Department’’ means the Department of Agriculture. 

(2) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

SEC. 7402. RESEARCH EQUIPMENT GRANTS. 

The National Agricultural Research, Extension, and Teaching 

Policy Act of 1977 is amended by inserting after section 1462 (7 

U.S.C. 3310) the following: 

‘‘SEC. 1462A. RESEARCH EQUIPMENT GRANTS. 

‘‘(a) IN GENERAL.—The Secretary may make competitive grants 

for the acquisition of special purpose scientific research equipment 

for use in the food and agricultural sciences programs of eligible institutions described in subsection (b). ‘‘(b) ELIGIBLE INSTITUTIONS.—The Secretary may make a grant 

under this section to— ‘‘(1) a college or university; or 

‘‘(2) a State cooperative institution. ‘‘(c) MAXIMUM AMOUNT.—The amount of a grant made to an eli- gible institution under this section may not exceed $500,000. ‘‘(d) PROHIBITION ON CHARGE OF EQUIPMENT AS INDIRECT

COSTS.—The cost of acquisition or depreciation of equipment purchased with a grant under this section shall not be— ‘‘(1) charged as an indirect cost against another Federal 

grant; or ‘‘(2) included as part of the indirect cost pool for purposes 

of calculating the indirect cost rate of an eligible institution. 

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this section such sums as may be 

necessary for each of fiscal years 2002 through 2007.’’. 

SEC. 7403. JOINT REQUESTS FOR PROPOSALS. 

(a) PURPOSES.—The purposes of this section are—

(1) to reduce the duplication of administrative functions relating to grant awards and administration among Federal 

agencies conducting similar types of research, education, and 

extension programs; 

(2) to maximize the use of peer review resources in research, 

education, and extension programs; and 

(3) to reduce the burden on potential recipients that may 

offer similar proposals to receive competitive grants under different Federal programs in overlapping subject areas. 

(b) AUTHORITY.—The National Agricultural Research, Extension, and Teaching Policy Act of 1977 is amended by inserting after 

section 1473A (7 U.S.C. 3319a) the following: 

‘‘SEC. 1473B. JOINT REQUESTS FOR PROPOSALS. 

‘‘(a) IN GENERAL.—In carrying out any competitive agricultural 

research, education, or extension grant program authorized under 

this or any other Act, the Secretary may cooperate with 1 or more 

other Federal agencies (including the National Science Foundation) 

in issuing joint requests for proposals, awarding grants, and adVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00332 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
329

ministering grants, for similar or related research, education, or extension projects or activities. 

‘‘(b) ADMINISTRATION.—

‘‘(1) SECRETARY.—The Secretary may delegate authority to 

issue requests for proposals, make grant awards, or administer 

grants, in whole or in part, to a cooperating Federal agency. 

‘‘(2) COOPERATING FEDERAL AGENCY.—The cooperating Federal agency may delegate to the Secretary authority to issue requests for proposals, make grant awards, or administer grants, 

in whole or in part. 

‘‘(c) REGULATIONS.—The Secretary and a cooperating Federal 

agency may agree to make applicable to recipients of grants—

‘‘(1) the post-award grant administration regulations applicable to recipients of grants from the Secretary; or 

‘‘(2) the post-award grant administration regulations applicable to recipients of grants from the cooperating Federal agency. 

‘‘(d) JOINT PEER REVIEW PANELS.—Subject to section 1413B, 

the Secretary and a cooperating Federal agency may establish joint 

peer review panels for the purpose of evaluating grant proposals.’’. 

SEC. 7404. REVIEW OF AGRICULTURAL RESEARCH SERVICE. 

(a) IN GENERAL.—Not later than 90 days after the date of enactment of this Act, the Secretary shall establish a task force to—

(1) conduct a review of the Agricultural Research Service; 

and 

(2) evaluate the merits of establishing one or more National 

Institutes focused on disciplines important to the progress of 

food and agricultural science. 

(b) MEMBERSHIP.—

(1) IN GENERAL.—The Task Force shall consist of 8 members, appointed by the Secretary, that—

(A) have a broad-based background in plant, animal, 

and agricultural sciences research, food, nutrition, biotechnology, crop production methods, environmental 

science, or related disciplines; and 

(B) are familiar with the role and infrastructure used 

to conduct Federal and private research, including—

(i) the Agricultural Research Service; 

(ii) the National Institutes of Health; 

(iii) the National Science Foundation; 

(iv) the National Aeronautics and Space Administration; 

(v) the Department of Energy laboratory system; or 

(vi) the Cooperative State Research, Education, 

and Extension Service. 

(2) PRIVATE SECTOR.—Of the members appointed under 

paragraph (1), the Secretary shall appoint at least 6 members 

that are members of the private sector or come from institutions 

of higher education. 

(3) PLANT AND AGRICULTURAL SCIENCES RESEARCH.—Of the 

members appointed under paragraph (1), the Secretary shall 

appoint at least 3 members that have an extensive background 

and preeminence in the field of plant, animal, and agricultural 

sciences research. 

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(4) CHAIRPERSON.—Of the members appointed under paragraph (1), the Secretary shall designate a Chairperson that has 

significant leadership experience in educational and research 

institutions and indepth knowledge of the research enterprises 

of the United States. 

(5) CONSULTATION.—Before appointing members of the 

Task Force under this subsection, the Secretary shall consult 

with the National Academy of Sciences and the Office of Science 

and Technology Policy. 

(c) DUTIES.—The Task Force shall— (1) conduct a review of the purpose, efficiency, effectiveness, 

and impact on agricultural research of the Agricultural Research Service; 

(2) conduct a review and evaluation of the merits of establishing one or more National Institutes (such as National Institutes for Plant and Agricultural Sciences) focused on disciplines 

important to the progress of food and agricultural sciences, 

and, if establishment of one or more National Institutes is recommended, provide further recommendations to the Secretary, 

including the structure for establishing each Institute, the 

multistate area location of each Institute, and the amount of 

funding necessary to establish each Institute; and 

(3) submit the reports required by subsection (d).

(d) REPORTS.—Not later than 12 months after the date of enactment of this Act, the Task Force shall submit to the Committee on 

Agriculture of the House of Representatives, the Committee on Agriculture, Nutrition, and Forestry of the Senate, and the Secretary—

(1) a report on the review and evaluation required under 

subsection (c)(1); and 

(2) a report on the review and evaluation required under 

subsection (c)(2). 

(e) FUNDING.—The Secretary shall use to carry out this section 

not more than 0.1 percent of the amount of appropriations available 

to the Agricultural Research Service for fiscal year 2003. 

SEC. 7405. BEGINNING FARMER AND RANCHER DEVELOPMENT PROGRAM. 

(a) DEFINITION OF BEGINNING FARMER OR RANCHER.—In this 

section, the term ‘‘beginning farmer or rancher’’ means a person 

that—

(1)(A) has not operated a farm or ranch; or 

(B) has operated a farm or ranch for not more than 10 

years; and 

(2) meets such other criteria as the Secretary may establish. 

(b) PROGRAM.—The Secretary shall establish a beginning farmer and rancher development program to provide training, education, 

outreach, and technical assistance initiatives for beginning farmers 

or ranchers. 

(c) GRANTS.—

(1) IN GENERAL.—In carrying out this section, the Secretary 

shall make competitive grants to support new and established 

local and regional training, education, outreach, and technical 

assistance initiatives for beginning farmers or ranchers, including programs and services (as appropriate) relating to—

(A) mentoring, apprenticeships, and internships; 

(B) resources and referral; 

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(C) assisting beginning farmers or ranchers in acquiring land from retiring farmers and ranchers; 

(D) innovative farm and ranch transfer strategies; 

(E) entrepreneurship and business training; 

(F) model land leasing contracts; 

(G) financial management training; 

(H) whole farm planning; 

(I) conservation assistance; 

(J) risk management education; 

(K) diversification and marketing strategies; 

(L) curriculum development; 

(M) understanding the impact of concentration and 

globalization; 

(N) basic livestock and crop farming practices; 

(O) the acquisition and management of agricultural 

credit; 

(P) environmental compliance; 

(Q) information processing; and 

(R) other similar subject areas of use to beginning 

farmers or ranchers. 

(2) ELIGIBILITY.—To be eligible to receive a grant under 

this subsection, the recipient shall be a collaborative State, tribal, local, or regionally-based network or partnership of public 

or private entities, which may include—

(A) a State cooperative extension service; 

(B) a Federal, State, or tribal agency; 

(C) a community-based and nongovernmental organization; 

(D) a college or university (including an institution 

awarding an associate’s degree) or foundation maintained 

by a college or university; or 

(E) any other appropriate partner, as determined by 

the Secretary. 

(3) TERM OF GRANT.—The term of a grant under this subsection shall not exceed 3 years. 

(4) MATCHING REQUIREMENT.—To be eligible to receive a 

grant under this subsection, a recipient shall provide a match 

in the form of cash or in-kind contributions in an amount equal 

to 25 percent of the funds provided by the grant. 

(5) SET-ASIDE.—Not less than 25 percent of funds used to 

carry out this subsection for a fiscal year shall be used to support programs and services that address the needs of—

(A) limited resource beginning farmers or ranchers (as 

defined by the Secretary); 

(B) socially disadvantaged beginning farmers or ranchers (as defined in section 355(e) of the Consolidated Farm 

and Rural Development Act (7 U.S.C. 2003(e)); and 

(C) farmworkers desiring to become farmers or ranchers. 

(6) PROHIBITION.—A grant made under this subsection may 

not be used for the planning, repair, rehabilitation, acquisition, 

or construction of a building or facility. 

(7) ADMINISTRATIVE COSTS.—The Secretary shall use not 

more than 4 percent of the funds made available to carry out 

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this subsection for administrative costs incurred by the Secretary in carrying out this section. 

(d) EDUCATION TEAMS.—

(1) IN GENERAL.—In carrying out this section, the Secretary 

shall establish beginning farmer and rancher education teams 

to develop curricula and conduct educational programs and 

workshops for beginning farmers or ranchers in diverse geographical areas of the United States. 

(2) CURRICULUM.—In promoting the development of curricula, the Secretary shall, to the maximum extent practicable, 

include modules tailored to specific audiences of beginning 

farmers or ranchers, based on crop or regional diversity. 

(3) COMPOSITION.—In establishing an education team for a 

specific program or workshop, the Secretary shall, to the maximum extent practicable—

(A) obtain the short-term services of specialists with 

knowledge and expertise in programs serving beginning 

farmers or ranchers; and 

(B) use officers and employees of the Department with 

direct experience in programs of the Department that may 

be taught as part of the curriculum for the program or 

workshop. 

(4) COOPERATION.—

(A) IN GENERAL.—In carrying out this subsection, the 

Secretary shall cooperate, to the maximum extent practicable, with—

(i) State cooperative extension services; 

(ii) Federal and State agencies; 

(iii) community-based and nongovernmental organizations; 

(iv) colleges and universities (including an institution awarding an associate’s degree) or foundations 

maintained by a college or university; and 

(v) other appropriate partners, as determined by 

the Secretary. 

(B) COOPERATIVE AGREEMENT.—Notwithstanding chapter 63 of title 31, United States Code, the Secretary may 

enter into a cooperative agreement to reflect the terms of 

any cooperation under subparagraph (A). 

(e) CURRICULUM AND TRAINING CLEARINGHOUSE.—The Secretary shall establish an online clearinghouse that makes available 

to beginning farmers or ranchers education curricula and training 

materials and programs, which may include online courses for direct use by beginning farmers or ranchers. 

(f) STAKEHOLDER INPUT.—In carrying out this section, the Secretary shall seek stakeholder input from—

(1) beginning farmers and ranchers; 

(2) national, State, tribal, and local organizations and 

other persons with expertise in operating beginning farmer and 

rancher programs; and 

(3) the Advisory Committee on Beginning Farmers and 

Ranchers established under section 5 of the Agricultural Credit 

Improvement Act of 1992 (7 U.S.C. 1929 note; Public Law 102–

554). 

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(g) PARTICIPATION BY OTHER FARMERS AND RANCHERS.—Nothing in this section prohibits the Secretary from allowing farmers 

and ranchers who are not beginning farmers or ranchers from participating in programs authorized under this section to the extent 

that the Secretary determines that such participation is appropriate 

and will not detract from the primary purpose of educating beginning farmers and ranchers. 

(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated to carry out this section such sums as may be 

necessary for each of fiscal years 2002 through 2007. 

SEC. 7406. SENSE OF CONGRESS REGARDING DOUBLING OF FUNDING 

FOR AGRICULTURAL RESEARCH. 

It is the sense of Congress that— (1) Federal funding for food and agricultural research has 

been essentially constant for 2 decades, putting at risk the scientific base on which food and agricultural advances have been 

made; 

(2) the resulting increase in the relative proportion of private sector, industry investments in food and agricultural research has led to questions about the independence and objectivity of research and outreach conducted by the Federal and 

university research sectors; and

(3) funding for food and agricultural research should be at 

least doubled over the next 5 fiscal years—

(A) to restore the balance between public and private 

sector funding for food and agricultural research; and 

(B) to maintain the scientific base on which food and 

agricultural advances are made. 

SEC. 7407. ORGANIC PRODUCTION AND MARKET DATA INITIATIVES. 

The Secretary shall ensure that segregated data on the production and marketing of organic agricultural products is included in 

the ongoing baseline of data collection regarding agricultural production and marketing. 

SEC. 7408. INTERNATIONAL ORGANIC RESEARCH COLLABORATION. 

The Secretary, acting through the Agricultural Research Service 

(including the National Agricultural Library) and the Economic Research Service, shall facilitate access by research and extension professionals, farmers, and other interested persons in the United 

States to, and the use by those persons of, organic research conducted outside the United States. 

SEC. 7409. REPORT ON PRODUCERS AND HANDLERS OF ORGANIC AGRICULTURAL PRODUCTS. 

Not later than 1 year after funds are made available to carry 

out this section, the Secretary shall submit to Congress a report 

that—

(1) describes—

(A) the extent to which producers and handlers of organic agricultural products are contributing to research 

and promotion programs of the Department; 

(B) the extent to which producers and handlers of organic agricultural products are surveyed for ideas for research and promotion; 

(C) ways in which the programs reflect the contributions made by producers and handlers of organic agriculVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00337 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
334

tural products and directly benefit the producers and handlers; and 

(D) the implementation of initiatives that directly benefit organic producers and handlers; and 

(2) evaluates industry and other proposals for improving 

the treatment of certified organic agricultural products under 

Federal marketing orders, including proposals to target additional resources for research and promotion of organic products 

and to differentiate between certified organic and other products in new or existing volume limitations or other orderly marketing requirements. 

SEC. 7410. REPORT ON GENETICALLY MODIFIED PEST-PROTECTED 

PLANTS. 

It is the sense of Congress that, not later than 1 year after the 

date of enactment of this Act, the Secretary should— (1) review the recommendations of the Committee on Genetically Modified Pest-Protected Plants of the Board on Agriculture and Natural Resources of the National Research Council made during 2000 and the Committee on Environmental Impacts Associated with Commercialization of Transgenic Plants 

made during 2002, concerning food safety, ecological research, 

monitoring needs for transgenic crops with plant incorporated 

protectants, and the environmental effects of transgenic plants; 

and 

(2) submit to the Committee on Agriculture of the House of 

Representatives and the Committee on Agriculture, Nutrition, 

and Forestry of the Senate a report that describes actions taken 

to implement those recommendations by agencies within the Department, including agencies that develop or implement programs or objectives relating to marketing, regulation, food safety, research, education, or economics. 

SEC. 7411. STUDY OF NUTRIENT BANKING. 

(a) IN GENERAL.—The Secretary may conduct a study to evaluate nutrient banking for the purpose of enhancing the health and 

viability of watersheds in areas with large concentrations of animal 

producing units. 

(b) COMPONENTS.—In conducting any study under subsection 

(a), the Secretary shall evaluate the costs, needs, and means by 

which litter may be collected and distributed outside the applicable 

watershed to reduce potential point source and nonpoint source 

phosphorous pollution. 

(c) REPORT.—The Secretary shall submit to the Committee on 

Agriculture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate a report that describes the results of any study conducted under subsection (a). 

SEC. 7412. GRANTS FOR YOUTH ORGANIZATIONS. 

Title IV of the Agricultural Research, Extension, and Education 

Reform Act of 1998 (7 U.S.C. 7621 et seq.) (as amended by section 

7206(e)) is amended by adding at the end the following: 

‘‘SEC. 410. GRANTS FOR YOUTH ORGANIZATIONS. 

‘‘(a) IN GENERAL.—The Secretary, acting through the Administrator of the Cooperative State Research, Education, and Extension 

Service, shall make grants to the Girl Scouts of the United States 

of America, the Boy Scouts of America, the National 4–H Council, 

335

and the National FFA Organization to establish pilot projects to expand the programs carried out by the organizations in rural areas 

and small towns (including, with respect to the National 4–H Council, activities provided for in Public Law 107–19 (115 Stat. 153)). 

‘‘(b) FUNDING.—Of the funds of the Commodity Credit Corporation, the Secretary shall make available $8,000,000 for fiscal year 

2002, which shall remain available until expended. 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section such sums as are necessary for each of fiscal years 2003 through 2007.’’. 

Subtitle E—Miscellaneous 

SEC. 7501. RESIDENT INSTRUCTION AND DISTANCE EDUCATION AT INSTITUTIONS OF HIGHER EDUCATION IN UNITED STATES 

INSULAR AREAS. 

(a) PURPOSE.—It is the purpose of this subtitle to promote and 

strengthen higher education in the food and agricultural sciences at 

institutions of higher education (as defined in section 101(a) of the 

Higher Education Act of 1965 (20 U.S.C. 1001(a))) that have demonstrable capacity to carry out teaching and extension programs 

in food and agricultural sciences and that are located in the insular 

areas of the Commonwealth of Puerto Rico, the Virgin Islands of the 

United States, Guam, American Samoa, the Commonwealth of the 

Northern Mariana Islands, the Federated States of Micronesia, the 

Republic of the Marshall Islands, or the Republic of Palau by formulating and administering programs to enhance teaching programs in agriculture, natural resources, forestry, veterinary medicine, home economics, and disciplines closely allied to the food and 

agriculture production and delivery systems. 

SEC. 7502. DEFINITIONS. 

(a) IN GENERAL.—Section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103) 

is amended—

(1) by redesignating paragraphs (10) through (17) as paragraphs (11) through (18), respectively; 

(2) by inserting after paragraph (9) the following: 

‘‘(10) INSULAR AREA.—The term ‘insular area’ means—

‘‘(A) the Commonwealth of Puerto Rico; 

‘‘(B) Guam; 

‘‘(C) American Samoa; 

‘‘(D) the Commonwealth of the Northern Mariana Islands; 

‘‘(E) the Federated States of Micronesia; 

‘‘(F) the Republic of the Marshall Islands; 

‘‘(G) the Republic of Palau; and 

‘‘(H) the Virgin Islands of the United States.’’; and 

(3) by striking paragraph (13) (as so redesignated) and inserting the following: 

‘‘(13) STATE.—The term ‘State’ means—

‘‘(A) a State; 

‘‘(B) the District of Columbia; and 

‘‘(C) any insular area.’’. 

336

(b) EFFECT OF AMENDMENTS.—The amendments made by subsection (a) shall not affect any basis for distribution of funds by formula (in effect on the date of enactment of this Act) to— (1) the Federated States of Micronesia; 

(2) the Republic of the Marshall Islands; or 

(3) the Republic of Palau. 

SEC. 7503. RESIDENT INSTRUCTION AND DISTANCE EDUCATION 

GRANTS PROGRAM FOR INSULAR AREA INSTITUTIONS OF 

HIGHER EDUCATION. 

The National Agricultural Research, Extension, and Teaching 

Policy Act of 1977 (7 U.S.C. 3101 et seq.) is amended by adding at 

the end the following: 

‘‘Subtitle O—Institutions of Higher 

Education in Insular Areas 

‘‘SEC. 1489. DEFINITION. 

‘‘For the purposes of this subtitle, the term ‘eligible institution’ means an institution of higher education (as defined in section 

101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)) in

an insular area that has demonstrable capacity to carry out teaching and extension programs in the food and agricultural sciences. 

‘‘SEC. 1490. DISTANCE EDUCATION GRANTS FOR INSULAR AREAS. 

‘‘(a) IN GENERAL.—The Secretary may make competitive or noncompetitive grants to eligible institutions in insular areas to 

strengthen the capacity of such institutions to carry out distance 

food and agricultural education programs using digital network 

technologies. ‘‘(b) USE.—Grants made under this section shall be used— ‘‘(1) to acquire the equipment, instrumentation, networking 

capability, hardware and software, digital network technology, 

and infrastructure necessary to teach students and teachers 

about technology in the classroom; ‘‘(2) to develop and provide educational services (including 

faculty development) to prepare students or faculty seeking a 

degree or certificate that is approved by the State or a regional 

accrediting body recognized by the Secretary of Education; ‘‘(3) to provide teacher education, library and media specialist training, and preschool and teacher aid certification to 

individuals who seek to acquire or enhance technology skills in 

order to use technology in the classroom or instructional process; ‘‘(4) to implement a joint project to provide education regarding technology in the classroom with a local educational 

agency, community-based organization, national nonprofit organization, or business; or ‘‘(5) to provide leadership development to administrators, 

board members, and faculty of eligible institutions with institutional responsibility for technology education. 

‘‘(c) LIMITATION ON USE OF GRANT FUNDS.—Funds provided 

under this section shall not be used for the planning, acquisition, 

construction, rehabilitation, or repair of a building or facility. ‘‘(d) ADMINISTRATION OF PROGRAM.—The Secretary may carry 

out this section in a manner that recognizes the different needs and 

337

opportunities for eligible institutions in the Atlantic and Pacific 

Oceans. 

‘‘(e) MATCHING REQUIREMENT.—

‘‘(1) IN GENERAL.—The Secretary may establish a requirement that an eligible institution receiving a grant under this 

section shall provide matching funds from non-Federal sources 

in an amount equal to not less than 50 percent of the grant. 

‘‘(2) WAIVERS.—If the Secretary establishes a matching requirement under paragraph (1), the Secretary shall retain an 

option to waive the requirement for an eligible institution for 

any fiscal year if the Secretary determines that the institution 

will be unlikely to meet the matching requirement for the fiscal 

year. 

‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section such sums as may be 

necessary for each of fiscal years 2002 through 2007. 

‘‘SEC. 1491. RESIDENT INSTRUCTION GRANTS FOR INSULAR AREAS. 

‘‘(a) IN GENERAL.—The Secretary of Agriculture shall make 

competitive grants to eligible institutions to—

‘‘(1) strengthen institutional educational capacities, including libraries, curriculum, faculty, scientific instrumentation, instruction delivery systems, and student recruitment and retention, in order to respond to identified State, regional, national, 

or international education needs in the food and agricultural 

sciences; 

‘‘(2) attract and support undergraduate and graduate students in order to educate them in identified areas of national 

need in the food and agriculture sciences; 

‘‘(3) facilitate cooperative initiatives between two or more 

insular area eligible institutions, or between those institutions 

and units of State Government or organizations in the private 

sector, to maximize the development and use of resources such 

as faculty, facilities, and equipment to improve food and agricultural sciences teaching programs; and 

‘‘(4) conduct undergraduate scholarship programs to assist 

in meeting national needs for training food and agricultural 

scientists 

‘‘(b) GRANT REQUIREMENTS.—

‘‘(1) The Secretary of Agriculture shall ensure that each eligible institution, prior to receiving grant funds under subsection 

(a), shall have a significant demonstrable commitment to higher education programs in the food and agricultural sciences 

and to each specific subject area for which grant funds under 

this section are to be used. 

‘‘(2) The Secretary of Agriculture may require that any 

grant awarded under this section contain provisions that require funds to be targeted to meet the needs identified in section 

1402. 

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary for each of the fiscal 

years 2002 through 2007 to carry out this section.’’. 

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SEC. 7504. DECLARATION OF EXTRAORDINARY EMERGENCY AND RESULTING AUTHORITIES. 

(a) REVIEW OF PAYMENT OF COMPENSATION.—Section 415(e) of 

the Plant Protection Act (7 U.S.C. 7715(e)) is amended by inserting 

before the final period the following: ‘‘or a review of longer than 60 

days by any officer or employee of the Federal Government other 

than the Secretary or the designee of the Secretary’’. 

(b) REVIEW OF CERTAIN DECISIONS.—Section 442 of the Plant 

Protection Act (7 U.S.C. 7772) is amended by adding at the end the 

following new subsection: 

‘‘(c) SECRETARIAL DISCRETION.—The action of any officer, employee, or agent of the Secretary in carrying out this Act, including 

determining the amount of and making any payment authorized to 

be made under this title, shall not be subject to a review of longer 

than 60 days by any officer or employee of the Federal Government 

other than the Secretary or the designee of the Secretary.’’. 

(c) METHYL BROMIDE.—The Plant Protection Act (7 U.S.C. 7701 

et seq.) is amended by inserting after section 418 the following new 

section: 

‘‘SEC. 419. METHYL BROMIDE. 

‘‘(a) IN GENERAL.—The Secretary, upon request of State, local, 

or tribal authorities, shall determine whether methyl bromide treatments or applications required by State, local, or tribal authorities 

to prevent the introduction, establishment, or spread of plant pests 

(including diseases) or noxious weeds should be authorized as an official control or official requirement. The Secretary shall not authorize such treatments or applications unless the Secretary finds there 

is no other registered, effective, and economically feasible alternative 

available. 

‘‘(b) METHYL BROMIDE ALTERNATIVE.—The Secretary, in consultation with State, local and tribal authorities, shall establish a 

program to identify alternatives to methyl bromide for treatment 

and control of plant pests and weeds. For uses where no registered, 

effective, economically feasible alternatives available can currently 

be identified, the Secretary shall initiate research programs to develop alternative methods of control and treatment. 

‘‘(c) REGISTRY.—Not later than 180 days after the date of enactment of this section, the Secretary shall publish, and thereafter 

maintain, a registry of State, local, and tribal requirements authorized by the Secretary under this section. 

‘‘(d) ADMINISTRATION.—

‘‘(1) TIMELINE FOR DETERMINATION.—Upon the promulgation of regulations to carry out this section, the Secretary shall 

make the determination required by subsection (a) not later 

than 90 days after receiving the request for such a determination. 

‘‘(2) CONSTRUCTION.—Nothing in this section shall be construed to alter or modify the authority of the Administrator of 

the Environmental Protection Agency or to provide any authority to the Secretary of Agriculture under the Clean Air Act or 

regulations promulgated under the Clean Air Act.’’. 

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SEC. 7505. AGRICULTURAL BIOTECHNOLOGY RESEARCH AND DEVELOPMENT FOR DEVELOPING COUNTRIES. 

Title IV of the Agricultural Research, Extension, and Education 

Reform Act of 1998 (7 U.S.C. 7621 et seq.) is amended by adding 

at the end the following: 

‘‘SEC. 411. AGRICULTURAL BIOTECHNOLOGY RESEARCH AND DEVELOPMENT FOR DEVELOPING COUNTRIES. 

‘‘(a) ELIGIBLE ENTITY.—In this section, the term ‘eligible entity’

means—

‘‘(A) an institution of higher education that offers a 

curriculum in agriculture or the biosciences; 

‘‘(B) a nonprofit organization; or 

‘‘(C) a consortium of for-profit institutions and agricultural research institutions. 

‘‘(b) GRANT PROGRAM.—

‘‘(1) IN GENERAL.—The Secretary (acting through the Foreign Agricultural Service) shall establish and administer a program to make competitive grants to eligible entities to develop 

agricultural biotechnology for developing countries. 

‘‘(2) USE OF FUNDS.—Funds provided to an eligible entity 

under this section may be used for projects that use biotechnology to—

‘‘(A) enhance the nutritional content of agricultural 

products that can be grown in developing countries; 

‘‘(B) increase the yield and safety of agricultural products that can be grown in developing countries; 

‘‘(C) increase the yield of agricultural products that are 

drought- and stress-resistant and that can be grown in developing countries; 

‘‘(D) extend the growing range of crops that can be 

grown in developing countries; 

‘‘(E) enhance the shelf-life of fruits and vegetables 

grown in developing countries; 

‘‘(F) develop environmentally sustainable agricultural 

products that can be grown in developing countries; and 

‘‘(G) develop vaccines to immunize against life-threatening illnesses and other medications that can be administered by consuming genetically-engineered agricultural 

products. 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as may be necessary to carry out this 

section for each of fiscal years 2002 through 2007.’’. 

SEC. 7506. LAND ACQUISITION AUTHORITY, NATIONAL PEANUT RESEARCH LABORATORY, DAWSON, GEORGIA. 

The limitation on the authority of the Agricultural Research 

Service to acquire lands by purchase using funds appropriated 

under the heading AGRICULTURAL RESEARCH SERVICE-SALARIES

AND EXPENSES in the Agriculture, Rural Development, Food and 

Drug Administration, and Related Agencies Appropriations Act, 

2002 (Public Law 107–76; 115 Stat. 708), shall not apply to the purchase of land for a research farm for the National Peanut Research 

Laboratory in Dawson, Georgia, for which a lease with an option 

to purchase has been entered into before the date of enactment of 

this Act.

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TITLE VIII—FORESTRY

Subtitle A—Cooperative Forestry Assistance 

Act of 1978

SEC. 8001. REPEAL OF FORESTRY INCENTIVES PROGRAM AND STEWARDSHIP INCENTIVE PROGRAM. 

(a) REPEAL.—The Cooperative Forestry Assistance Act of 1978 is 

amended by striking section 4 (16 U.S.C. 2103) and section 6 (16 

U.S.C. 2103b).

(b) USE OF REMAINING FUNDS.—Notwithstanding the amendment made by subsection (a), the Secretary of Agriculture may use 

funds appropriated for fiscal year 2002 for the forestry incentives 

program or the stewardship incentive program, but not expended before the date of enactment of this Act, to carry out sections 4 and 

6 of the Cooperative Forestry Assistance Act of 1978, as in effect on 

the date before the date of enactment of this Act.

SEC. 8002. ESTABLISHMENT OF FOREST LAND ENHANCEMENT PROGRAM. 

(a) PURPOSES.—The purposes of this section are—

(1) to strengthen the commitment of the Secretary of Agriculture to sustainable forest management to enhance the productivity of timber, fish and wildlife habitat, soil and water 

quality, wetland, recreational resources, and aesthetic values of 

forest land; and 

(2) to establish a coordinated and cooperative Federal, 

State, and local sustainable forestry program for the establishment, management, maintenance, enhancement, and restoration 

of forests on nonindustrial private forest land. 

(b) FOREST LAND ENHANCEMENT PROGRAM.—The Cooperative 

Forestry Assistance Act of 1978 is amended by inserting after section 3 (16 U.S.C. 2102) the following: 

‘‘SEC. 4. FOREST LAND ENHANCEMENT PROGRAM. 

‘‘(a) ESTABLISHMENT.—

‘‘(1) IN GENERAL.—The Secretary of Agriculture shall establish a forest land enhancement program—

‘‘(A) to provide financial assistance to State foresters; 

and 

‘‘(B) to encourage the long-term sustainability of nonindustrial private forest lands in the United States by assisting the owners of nonindustrial private forest lands, 

through State foresters, in more actively managing the nonindustrial private forest lands and related resources of 

those owners through the use of State, Federal, and private 

sector resource management expertise, financial assistance, 

and educational programs. 

‘‘(2) COORDINATION AND CONSULTATION.—The Secretary, 

acting through State foresters, shall implement the program—

‘‘(A) in coordination with the State Forest Stewardship 

Coordinating Committees; and 

‘‘(B) in consultation with other Federal, State, and 

local natural resource management agencies, institutions of 

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higher education, and a broad range of private sector interests. 

‘‘(b) PROGRAM OBJECTIVES.—In implementing the program, the 

Secretary shall target resources to achieve the following objectives: 

‘‘(1) Investing in practices to establish, restore, protect, 

manage, maintain, and enhance the health and productivity of 

the nonindustrial private forest lands in the United States for 

timber, habitat for flora and fauna, soil, water, and air quality, 

wetlands, and riparian buffers. 

‘‘(2) Ensuring that afforestation, reforestation, improvement 

of poorly stocked stands, timber stand improvement, practices 

necessary to improve seedling growth and survival, and growth 

enhancement practices occur where needed to enhance and sustain the long-term productivity of timber and nontimber forest 

resources to help meet future public demand for all forest resources and provide environmental benefits. 

‘‘(3) Reducing the risks and helping restore, recover, and 

mitigate the damage to forests caused by fire, insects, invasive 

species, disease, and damaging weather.

‘‘(4) Increasing and enhancing carbon sequestration opportunities. 

‘‘(5) Enhancing implementation of agroforestry practices. 

‘‘(6) Maintaining and enhancing the forest landbase and leverage State and local financial and technical assistance to 

owners that promote the same conservation and environmental 

values. 

‘‘(7) Preserving the aesthetic quality of nonindustrial private forest lands and providing opportunities for outdoor recreation. 

‘‘(c) STATE PRIORITY PLAN.—

‘‘(1) DEVELOPMENT.—The State Forester and State Forest 

Stewardship Coordinating Committee of a State shall jointly 

develop and submit to the Secretary a State priority plan that 

is intended to promote forest management objectives in that 

State. 

‘‘(2) REPORT.—Not later than September 30, 2006, each 

State that implemented a State priority plan shall submit to the 

Secretary a report describing the status of all activities and 

practices funded under the program as of that date. 

‘‘(d) OWNER ELIGIBILITY FOR ASSISTANCE.—

‘‘(1) ELIGIBILITY CRITERIA.—To be eligible for cost-share assistance under the program, an owner of nonindustrial private 

forest lands shall agree—

‘‘(A) to develop and implement, in cooperation with a 

State forester, another State official, or a professional resources manager, a management plan that—

‘‘(i) except as provided in paragraph (2) or (3), provides for the treatment of not more than 1,000 acres of 

nonindustrial private forest lands; 

‘‘(ii) is approved by the State forester; and 

‘‘(iii) addresses site specific activities and practices; 

and 

‘‘(B) to implement approved activities and practices in 

a manner consistent with the management plan for a peVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00345 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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riod of not less than 10 years, unless the State forester approves a modification to the plan.

‘‘(2) PUBLIC BENEFIT EXCEPTION.—The Secretary may increase the acreage limitation specified in paragraph (1)(A)(i) to 

not more than 5,000 acres for an owner of nonindustrial private 

forest lands if the Secretary, in consultation with the State forester, determines that significant public benefits will accrue as 

a result of the provision of cost-share assistance under the program for the treatment of the additional acreage. ‘‘(3) PLAN DEVELOPMENT EXCEPTION.—An owner may receive cost-share assistance under the program for the purpose of 

developing a management plan under subsection (e) that provides for the treatment of acreage in excess of the acreage limitations specified in paragraphs (1)(A)(i) and (2), except that the 

owner’s eligibility for cost-share assistance to implement approved activities and practices under the management plan remains subject to the acreage limitation specified in paragraph 

(1)(A)(i) or, if the Secretary makes the determination described 

in paragraph (2), the acreage limitation specified in that paragraph.

‘‘(e) MANAGEMENT PLAN.— ‘‘(1) SUBMISSION AND CONTENT.—An owner of nonindustrial private forest lands that seeks to participate in the program shall submit to the State forester of the State in which the 

lands are located a management plan that— ‘‘(A) identifies and describes projects and activities to 

be carried out by the owner to protect or enhance soil, 

water, air, range and aesthetic quality, recreation, timber, 

water, wetland, or fish and wildlife resources on the lands 

in a manner that is compatible with the objectives of the 

owner; ‘‘(B) addresses any criteria established by the State and 

the applicable Committee; and ‘‘(C) meets the other requirements of this section. 

‘‘(2) LANDS COVERED.—At a minimum, the management 

plan shall apply to those portions of the nonindustrial private 

forest lands of the owner on which any project or activity funded under the program will be carried out. In a case in which 

a project or activity may affect acreage outside the portion of the 

land on which the project or activity is carried out, the management plan shall apply to all lands of the owner that are in forest cover and may be affected by the project or activity. 

‘‘(f) APPROVED ACTIVITIES.—

‘‘(1) STATE LIST.—The Secretary shall develop for each 

State a list of approved forest activities and practices eligible 

for cost-share assistance that meets the purposes of the program. The Secretary shall develop the list for a State in consultation with the State forester and the Committee for that 

State. ‘‘(2) TYPES OF ACTIVITIES.—Approved activities and practices under paragraph (1) may consist of activities and practices 

for the following purposes: ‘‘(A) The establishment, management, maintenance, 

and restoration of forests for shelterbelts, windbreaks, aesthetic quality, and other conservation purposes. 

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‘‘(B) The sustainable growth and management of forests for timber production. 

‘‘(C) The restoration, use, and enhancement of forest 

wetland and riparian areas. 

‘‘(D) The protection of water quality and watersheds 

through—

‘‘(i) the planting of trees in riparian areas; and 

‘‘(ii) the enhanced management and maintenance 

of native vegetation on land vital to water quality. 

‘‘(E) The management, maintenance, restoration, or development of habitat for plants, fish, and wildlife. 

‘‘(F) The control, detection, monitoring, and prevention 

of the spread of invasive species and pests on nonindustrial 

private forest lands. 

‘‘(G) The restoration of nonindustrial private forest 

land affected by invasive species and pests. 

‘‘(H) The conduct of other management activities, such 

as the reduction of hazardous fuels, that reduce the risks 

to forests posed by, and that restore, recover, and mitigate 

the damage to forests caused by, fire or any other catastrophic event, as determined by the Secretary. 

‘‘(I) The development of management plans; 

‘‘(J) The conduct of energy conservation and carbon sequestration activities. 

‘‘(K) The conduct of other activities approved by the 

Secretary, in consultation with the State forester and the 

appropriate Committees. 

‘‘(g) REIMBURSEMENT OF ELIGIBLE ACTIVITIES.—

‘‘(1) IN GENERAL.—In the case of an eligible owner that has 

an approved management plan, the Secretary shall share the 

cost of implementing the approved activities and practices that 

the Secretary determines are appropriate. 

‘‘(2) RATE.—The Secretary shall determine the appropriate 

reimbursement rate for cost-share payments under paragraph 

(1) and the schedule for making those payments. 

‘‘(3) MAXIMUM COST SHARE.—The Secretary shall not make 

cost-share payments under this subsection to an owner in an 

amount in excess of 75 percent, or a lower percentage as determined by the State forester, of the total cost to the owner to implement the approved activities and practices under the management plan. 

‘‘(4) AGGREGATE PAYMENT LIMIT.—The Secretary shall determine the maximum aggregate amount of cost-share payments 

that an owner may receive under the program. 

‘‘(5) CONSULTATION.—The Secretary shall make determinations under this subsection in consultation with the State forester. 

‘‘(h) RECAPTURE.—

‘‘(1) IN GENERAL.—The Secretary shall establish and implement a mechanism to recapture payments made to an owner in 

the event that the owner fails to implement an approved activity 

or practice specified in the management plan for which the 

owner received cost-share payments. 

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‘‘(2) ADDITIONAL REMEDY.—The remedy provided in paragraph (1) is in addition to any other remedy available to the 

Secretary. 

‘‘(i) DISTRIBUTION OF COST-SHARE FUNDS.—The Secretary, acting through the State foresters, shall distribute funds available for 

cost sharing under the program only after giving appropriate consideration to the following factors: 

‘‘(1) The public benefits that would result from the distribution. 

‘‘(2) The total acreage of nonindustrial private forest lands 

in each State. 

‘‘(3) The potential productivity of those lands, as determined by the Secretary. 

‘‘(4) The number of owners eligible for cost sharing in each 

State. 

‘‘(5) The opportunities to enhance nontimber resources on 

those lands, including—

‘‘(A) the protection of riparian buffers and forest wetland; 

‘‘(B) the preservation of fish and wildlife habitat; 

‘‘(C) the enhancement of soil, air, and water quality; 

and 

‘‘(D) the preservation of aesthetic quality and opportunities for outdoor recreation. 

‘‘(6) The anticipated demand for timber and nontimber resources in each State. 

‘‘(7) The need to improve forest health to minimize the damaging effects of catastrophic fire, insects, disease, or weather. 

‘‘(8) The need and demand for agroforestry practices in 

each State. 

‘‘(9) The need to maintain and enhance the forest landbase. 

‘‘(10) The need for afforestation, reforestation, and timber 

stand improvement. 

‘‘(j) AVAILABILITY OF FUNDS.—The Secretary shall use 

$100,000,000 of funds of the Commodity Credit Corporation to carry 

out the Program during the period beginning on the date of enactment of the Farm Security and Rural Investment Act of 2002 and 

ending on September 30, 2007. 

‘‘(k) DEFINITIONS.—In this section: 

‘‘(1) NONINDUSTRIAL PRIVATE FOREST LANDS.—The term 

‘nonindustrial private forest lands’ means rural lands, as determined by the Secretary, that—

‘‘(A) have existing tree cover or are suitable for growing 

trees; and 

‘‘(B) are owned by any nonindustrial private individual, group, association, corporation, Indian tribe, or 

other private legal entity so long as the individual, group, 

association, corporation, tribe, or entity has definitive decision-making authority over the lands. 

‘‘(2) COMMITTEE.—The terms ‘State Forest Stewardship Coordinating Committee’ and ‘Committee’ means a State Forest 

Stewardship Coordinating Committee established under section 

19(b). 

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‘‘(3) INDIAN TRIBE.—The term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination 

and Education Assistance Act (25 U.S.C. 450b). 

‘‘(4) OWNER.—The term ‘owner’ means an owner of nonindustrial private forest land. 

‘‘(5) PROGRAM.—The term ‘program’ means the forest land 

enhancement program established by this section. 

‘‘(6) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Agriculture. 

‘‘(7) STATE FORESTER.—The term ‘State forester’ means the 

director or other head of a State Forestry Agency or equivalent 

State official.’’. 

(c) CONFORMING AMENDMENT.—Section 246(b)(2) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 

6962(b)(2)) is amended by striking ‘‘forestry incentive program’’ and 

inserting ‘‘forest land enhancement program’’.

SEC. 8003. ENHANCED COMMUNITY FIRE PROTECTION. 

(a) FINDINGS.—Congress finds the following: 

(1) The severity and intensity of wildland fires has increased dramatically over the past few decades as a result of 

past fire and land management policies. 

(2) The record 2000 fire season is a prime example of what 

can be expected if action is not taken. 

(3) Wildland fires threaten not only the forested resources 

of the United States, but also the thousands of communities 

intermingled with the wildlands in the wildland-urban interface. 

(4) The National Fire Plan, if implemented to achieve appropriate priorities, is the proper, coordinated, and most effective means to address the issue of wildfires. 

(5) While adequate authorities exist to tackle the wildfire 

issues at the landscape level on Federal lands, there is limited 

authority to take action on most private lands, and the largest 

threat to life and property exists on private lands. 

(6) There is a significant Federal interest in enhancing 

community protection from wildfire. 

(b) ENHANCED PROTECTION.—The Cooperative Forestry Assistance Act of 1978 is amended by inserting after section 10 (16 U.S.C. 

2106) the following: 

‘‘SEC. 10A. ENHANCED COMMUNITY FIRE PROTECTION. 

‘‘(a) COOPERATIVE MANAGEMENT RELATED TO WILDFIRE

THREATS.—The Secretary may cooperate with State foresters and 

equivalent State officials in the management of lands in the United 

States for the following purposes: 

‘‘(1) Aid in wildfire prevention and control. 

‘‘(2) Protect communities from wildfire threats. 

‘‘(3) Enhance the growth and maintenance of trees and forests that promote overall forest health. ‘‘(4) Ensure the continued production of all forest resources, 

including timber, outdoor recreation opportunities, wildlife 

habitat, and clean water, through conservation of forest cover 

on watersheds, shelterbelts, and windbreaks. 

‘‘(b) COMMUNITY AND PRIVATE LAND FIRE ASSISTANCE PRO- GRAM.—

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‘‘(1) ESTABLISHMENT; PURPOSE.—The Secretary shall establish a Community and Private Land Fire Assistance program 

(in this subsection referred to as the ‘Program’)—

‘‘(A) to focus the Federal role in promoting optimal firefighting efficiency at the Federal, State, and local levels; 

‘‘(B) to augment Federal projects that establish landscape level protection from wildfires; 

‘‘(C) to expand outreach and education programs to 

homeowners and communities about fire prevention; and 

‘‘(D) to establish space around homes and property of 

private landowners that is defensible against wildfires. 

‘‘(2) ADMINISTRATION AND IMPLEMENTATION.—The Program 

shall be administered by the Forest Service and implemented 

through State foresters or equivalent State officials. 

‘‘(3) COMPONENTS.—In coordination with existing authorities under this Act, the Secretary, in consultation with the State 

forester or equivalent State official, may undertake on non-Federal lands—

‘‘(A) fuel hazard mitigation and prevention; 

‘‘(B) invasive species management; 

‘‘(C) multiresource wildfire planning; 

‘‘(D) community protection planning; 

‘‘(E) community and landowner education enterprises, 

including the program known as FIREWISE; 

‘‘(F) market development and expansion; 

‘‘(G) improved wood utilization; and 

‘‘(H) special restoration projects.

‘‘(4) CONSENT REQUIRED.—Program activities undertaken 

by the Secretary on non-Federal lands shall be undertaken only 

with the consent of the owner of the lands. 

‘‘(5) CONSIDERATIONS.—The Secretary shall use persons in 

the local community wherever possible to carry out projects 

under the Program.

‘‘(c) CONSULTATION.—In carrying out this section, the Secretary 

shall consult with the Administrator of the United States Fire Administration, the Director of the National Institute of Standards 

and Technology, and the heads of other Federal agencies, as necessary.

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are hereby authorized to be appropriated to the Secretary to carry out this section—

(1) $35,000,000 for each of fiscal years 2002 through 2007; 

and 

(2) such sums as are necessary for fiscal years thereafter.’’.

Subtitle B—Amendments to Other Laws

SEC. 8101. SUSTAINABLE FORESTRY OUTREACH INITIATIVE; RENEWABLE RESOURCES EXTENSION ACTIVITIES. 

(a) SUSTAINABLE FORESTRY OUTREACH INITIATIVE.—The Renewable Resources Extension Act of 1978 is amended by inserting 

after section 5A (16 U.S.C. 1674a) the following: 

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‘‘SEC. 5B. SUSTAINABLE FORESTRY OUTREACH INITIATIVE. 

‘‘The Secretary shall establish a program, to be known as the 

‘Sustainable Forestry Outreach Initiative’, to educate landowners 

concerning the following: 

‘‘(1) The value and benefits of practicing sustainable forestry. 

‘‘(2) The importance of professional forestry advice in 

achieving sustainable forestry objectives. 

‘‘(3) The variety of public and private sector resources available to assist the landowners in planning for and practicing 

sustainable forestry.’’. 

(b) RENEWABLE RESOURCES EXTENSION ACTIVITIES.—

(1) AUTHORIZATION OF APPROPRIATIONS.—Section 6 of the 

Renewable Resources Extension Act of 1978 (16 U.S.C. 1675) is 

amended by striking the first sentence and inserting the following: ‘‘There is authorized to be appropriated to carry out this 

Act $30,000,000 for each of fiscal years 2002 through 2007.’’.

(2) TERMINATION DATE.—Section 8 of the Renewable Resources Extension Act of 1978 (16 U.S.C. 1671 note; Public Law 

95–306) is amended by striking ‘‘2000’’ and inserting ‘‘2007’’.

SEC. 8102. OFFICE OF INTERNATIONAL FORESTRY. 

Section 2405(d) of the Global Climate Change Prevention Act of 

1990 (7 U.S.C. 6704(d)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

Subtitle C—Miscellaneous Provisions

SEC. 8201. MCINTIRE-STENNIS COOPERATIVE FORESTRY RESEARCH 

PROGRAM. 

It is the sense of Congress to reaffirm the importance of Public 

Law 87–788 (16 U.S.C. 582a et seq.), commonly known as the 

‘‘McIntire-Stennis Cooperative Forestry Act’’.

TITLE IX—ENERGY 

SEC. 9001. DEFINITIONS. 

In this title: 

(1) ADMINISTRATOR.—The term ‘‘Administrator’’ means the 

Administrator of the Environmental Protection Agency. 

(2) BIOBASED PRODUCT.—The term ‘‘biobased product’’

means a product determined by the Secretary to be a commercial or industrial product (other than food or feed) that is composed, in whole or in significant part, of biological products or 

renewable domestic agricultural materials (including plant, 

animal, and marine materials) or forestry materials. 

(3) BIOMASS.—

(A) IN GENERAL.—The term ‘‘biomass’’ means any organic material that is available on a renewable or recurring basis. 

(B) INCLUSIONS.—The term ‘‘biomass’’ includes—

(i) agricultural crops; 

(ii) trees grown for energy production; 

(iii) wood waste and wood residues; 

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(iv) plants (including aquatic plants and grasses); 

(v) residues; 

(vi) fibers; 

(vii) animal wastes and other waste materials; and 

(viii) fats, oils, and greases (including recycled 

fats, oils, and greases). 

(C) EXCLUSIONS.—The term ‘‘biomass’’ does not include— (i) paper that is commonly recycled; or 

(ii) unsegregated solid waste. 

(4) RENEWABLE ENERGY.—The term ‘‘renewable energy’’ means energy derived from— (A) a wind, solar, biomass, or geothermal source; or 

(B) hydrogen derived from biomass or water using an 

energy source described in subparagraph (A). 

(5) RURAL SMALL BUSINESS.—The term ‘‘rural small business’’ has the meaning that the Secretary shall prescribe by regulation. 

(6) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

SEC. 9002. FEDERAL PROCUREMENT OF BIOBASED PRODUCTS. 

(a) APPLICATION OF SECTION.—Except as provided in subsection 

(c), each Federal agency shall comply with the requirements set 

forth in this section and any regulations issued under this section, 

with respect to any purchase or acquisition of a procurement item 

where the purchase price of the item exceeds $10,000 or where the 

quantity of such items or of functionally equivalent items purchased 

or acquired in the course of the preceding fiscal year was $10,000 

or more. 

(b) PROCUREMENT SUBJECT TO OTHER LAW.—Any procurement, 

by any Federal agency, which is subject to regulations of the Administrator under section 6002 of the Solid Waste Disposal Act (42 

U.S.C. 6962), shall not be subject to the requirements of this section 

to the extent that such requirements are inconsistent with such regulations. 

(c) PROCUREMENT PREFERENCE.—(1) Except as provided in 

paragraph (2), after the date specified in applicable guidelines prepared pursuant to subsection (e) of this section, each Federal agency 

which procures any items designated in such guidelines shall, in 

making procurement decisions, give preference to such items composed of the highest percentage of biobased products practicable, 

consistent with maintaining a satisfactory level of competition, considering such guidelines. 

(2) AGENCY FLEXIBILITY.—Notwithstanding paragraph (1), an 

agency may decide not to procure such items if the agency determines that the items—

(A) are not reasonably available within a reasonable period 

of time; 

(B) fail to meet the performance standards set forth in the 

applicable specifications or fail to meet the reasonable performance standards of the procuring agencies; or 

(C) are available only at an unreasonable price. 

(3) After the date specified in any applicable guidelines prepared pursuant to subsection (e) of this section, contracting offices 

shall require that, with respect to biobased products, vendors certify 

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that the biobased products to be used in the performance of the contract will comply with the applicable specifications or other contractual requirements. 

(d) SPECIFICATIONS.—All Federal agencies that have the responsibility for drafting or reviewing specifications for procurement 

items procured by Federal agencies shall, within one year after the 

date of publication of applicable guidelines under subsection (e), or 

as otherwise specified in such guidelines, assure that such specifications require the use of biobased products consistent with the requirements of this section. 

(e) GUIDELINES.—

(1) IN GENERAL.—The Secretary, after consultation with the 

Administrator, the Administrator of General Services, and the 

Secretary of Commerce (acting through the Director of the National Institute of Standards and Technology), shall prepare, 

and from time to time revise, guidelines for the use of procuring 

agencies in complying with the requirements of this section. 

Such guidelines shall—

(A) designate those items which are or can be produced 

with biobased products and whose procurement by procuring agencies will carry out the objectives of this section; 

(B) set forth recommended practices with respect to the 

procurement of biobased products and items containing 

such materials and with respect to certification by vendors 

of the percentage of biobased products used; and 

(C) provide information as to the availability, relative 

price, performance, and environmental and public health 

benefits, of such materials and items and where appropriate shall recommend the level of biobased material to be 

contained in the procured product. 

(2) CONSIDERATIONS.—In making the designation under 

paragraph (1)(A), the Secretary shall, at a minimum, consider—

(A) the availability of such items; and 

(B) the economic and technological feasibility of using 

such items, including life cycle costs. 

(3) FINAL GUIDELINES.—The Secretary shall prepare final 

guidelines under this section within 180 days after the date of 

enactment of this Act. 

(f) OFFICE OF FEDERAL PROCUREMENT POLICY.—The Office of 

Federal Procurement Policy, in cooperation with the Secretary, shall 

implement the requirements of this section. It shall be the responsibility of the Office of Federal Procurement Policy to coordinate this 

policy with other policies for Federal procurement to implement the 

requirements of this section, and, every two years beginning in 2003, 

to report to the Congress on actions taken by Federal agencies and 

the progress made in the implementation of this section, including 

agency compliance with subsection (d). 

(g) PROCUREMENT PROGRAM.—(1) Within one year after the date 

of publication of applicable guidelines under subsection (e), each 

Federal agency shall develop a procurement program which will assure that items composed of biobased products will be purchased to 

the maximum extent practicable and which is consistent with applicable provisions of Federal procurement law. 

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(2) Each procurement program required under this subsection 

shall, at a minimum, contain—

(A) a biobased products preference program; 

(B) an agency promotion program to promote the preference 

program adopted under subparagraph (A); and 

(C) annual review and monitoring of the effectiveness of an 

agency’s procurement program. 

(3) In developing the preference program, the following options 

shall be considered for adoption: 

(A) CASE-BY-CASE POLICY DEVELOPMENT.—Subject to the 

limitations of subsection (c)(2) (A) through (C), a policy of 

awarding contracts to the vendor offering an item composed of 

the highest percentage of biobased products practicable. Subject 

to such limitations, agencies may make an award to a vendor

offering items with less than the maximum biobased products 

content. 

(B) MINIMUM CONTENT STANDARDS.—Minimum biobased 

products content specifications which are set in such a way as 

to assure that the biobased products content required is consistent with the requirements of this section, without violating 

the limitations of subsection (c)(2) (A) through (C).

Federal agencies shall adopt one of the options set forth in subparagraphs (A) and (B) or a substantially equivalent alternative, for inclusion in the procurement program. 

(h) LABELING.—

(1) IN GENERAL.—The Secretary, in consultation with the 

Administrator, shall establish a voluntary program under 

which the Secretary authorizes producers of biobased products 

to use the label ‘‘U.S.D.A. Certified Biobased Product’’. 

(2) ELIGIBILITY CRITERIA.—Within one year after the date of 

enactment of this Act, the Secretary, in consultation with the 

Administrator, shall issue criteria for determining which products may qualify to receive the label under paragraph (1). The 

criteria shall encourage the purchase of products with the maximum biobased content, and should, to the maximum extent 

possible, be consistent with the guidelines issued under subsection (e). 

(3) USE OF THE LABEL.—The Secretary shall ensure that the 

label referred to in paragraph (1) is used only on products that 

meet the criteria issued pursuant to paragraph (2). 

(4) RECOGNITION.—The Secretary shall establish a voluntary program to recognize Federal agencies and private entities that use a substantial amount of biobased products. 

(i) LIMITATION.—Nothing in this section shall apply to the procurement of motor vehicle fuels or electricity. 

(j) FUNDING.—

(1) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as may be necessary to carry 

out this section. 

(2) FUNDING FOR TESTING OF BIOBASED PRODUCTS.—

(A) IN GENERAL.—Of the funds of the Commodity Credit Corporation, the Secretary shall use $1,000,000 for each 

of fiscal years 2002 through 2007 to support testing of 

biobased products to carry out this section. 

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(B) USE OF FUNDS.—Amounts made available under 

subparagraph (A) may be used to support contracts or cooperative agreements with entities that have experience and 

special skills to conduct such testing. 

(C) PRIORITY.—At the discretion of the Secretary, the 

Secretary may give priority to the testing of products for 

which private sector firms provide cost sharing for the testing. 

SEC. 9003. BIOREFINERY DEVELOPMENT GRANTS. 

(a) PURPOSE.—The purpose of this section is to assist in the development of new and emerging technologies for the use of biomass, 

including lignocellulosic biomass, so as to—

(1) develop transportation and other fuels, chemicals, and 

energy from renewable sources; 

(2) increase the energy independence of the United States; 

(3) provide beneficial effects on conservation, public health, 

and the environment; 

(4) diversify markets for raw agricultural and forestry 

products; and 

(5) create jobs and enhance the economic development of the 

rural economy. 

(b) DEFINITIONS.—In this section: 

(1) ADVISORY COMMITTEE.—The term ‘‘Advisory Committee’’

means the Biomass Research and Development Technical Advisory Committee established by section 306 of the Biomass Research and Development Act of 2000 (7 U.S.C. 7624 note; Public 

Law 106–224). 

(2) BIOREFINERY.—The term ‘‘biorefinery’’ means equipment 

and processes that—

(A) convert biomass into fuels and chemicals; and 

(B) may produce electricity. 

(3) BOARD.—The term ‘‘Board’’ means the Biomass Research and Development Board established by section 305 of the 

Biomass Research and Development Act of 2000 (7 U.S.C. 7624 

note; Public Law 106–224). 

(4) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has the meaning given the term in section 4 of the Indian Self-Determination 

and Education Assistance Act (25 U.S.C. 450b). 

(c) GRANTS.—The Secretary shall award grants to eligible entities to assist in paying the cost of development and construction of 

biorefineries to carry out projects to demonstrate the commercial viability of 1 or more processes for converting biomass to fuels or 

chemicals. 

(d) ELIGIBLE ENTITIES.—An individual, corporation, farm cooperative, association of farmers, national laboratory, institution of 

higher education (as defined in section 101 of the Higher Education 

Act of 1965 (20 U.S.C. 1001)), State or local energy agency or office, 

Indian tribe, or consortium comprised of any of those entities shall 

be eligible to receive a grant under subsection (c). 

(e) COMPETITIVE BASIS FOR AWARDS.—

(1) IN GENERAL.—The Secretary shall award grants under 

subsection (c) on a competitive basis after consulting the Board 

and Advisory Committee. 

(2) SELECTION CRITERIA.—

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(A) IN GENERAL.—In selecting projects to receive grants 

under subsection (c), the Secretary— (i) shall select projects based on the likelihood that 

the projects will demonstrate the commercial viability 

of a new and emerging process for converting biomass 

into fuels, chemicals, or energy; and 

(ii) may consider the likelihood that the projects 

will produce electricity. 

(B) FACTORS.—The factors to be considered under subparagraph (A) may include— (i) the potential market for the product or products; 

(ii) the level of financial participation by the applicants; 

(iii) the availability of adequate funding from 

other sources; 

(iv) the beneficial impact on resource conservation, 

public health, and the environment; 

(v) the participation of producer associations and 

cooperatives; 

(vi) the timeframe in which the project will be 

operational; 

(vii) the potential for rural economic development; 

(viii) the participation of multiple eligible entities; 

and 

(ix) the potential for developing advanced industrial biotechnology approaches. 

(f) COST SHARING.— (1) IN GENERAL.—The amount of a grant for a project 

awarded under subsection (c) shall not exceed 30 percent of the 

cost of the project. 

(2) FORM OF GRANTEE SHARE.— (A) IN GENERAL.—The grantee share of the cost of a 

project may be made in the form of cash or the provision 

of services, material, or other in-kind contributions. 

(B) LIMITATION.—The amount of the grantee share of 

the cost of a project that is made in the form of the provision of services, material, or other in-kind contributions 

shall not exceed 25 percent of the amount of the grantee 

share determined under paragraph (1). 

(g) CONSULTATION.—In carrying out this section, the Secretary 

shall consult with the Secretary of Energy. 

(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007. 

SEC. 9004. BIODIESEL FUEL EDUCATION PROGRAM. 

(a) ESTABLISHMENT.—The Secretary shall, under such terms 

and conditions as are appropriate, make competitive grants to eligible entities to educate governmental and private entities that operate 

vehicle fleets, other interested entities (as determined by the Secretary), and the public about the benefits of biodiesel fuel use. 

(b) ELIGIBLE ENTITIES.—To receive a grant under subsection 

(a), an entity—

(1) shall be a nonprofit organization or institution of higher 

education (as defined in section 101 of the Higher Education 

Act of 1965 (20 U.S.C. 1001)); 

353

(2) shall have demonstrated knowledge of biodiesel fuel production, use, or distribution; and 

(3) shall have demonstrated the ability to conduct educational and technical support programs. 

(c) CONSULTATION.—In carrying out this section, the Secretary 

shall consult with the Secretary of Energy. 

(d) FUNDING.—Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section 

$1,000,000 for each of fiscal years 2003 through 2007.

SEC. 9005. ENERGY AUDIT AND RENEWABLE ENERGY DEVELOPMENT 

PROGRAM. 

(a) IN GENERAL.—The Secretary shall make competitive grants 

to eligible entities to carry out a program to assist farmers, ranchers, and rural small businesses in becoming more energy efficient 

and in using renewable energy technology and resources. 

(b) ELIGIBLE ENTITIES.—Entities eligible to carry out a program 

under subsection (a) are— (1) a State energy or agricultural office; 

(2) a regional or State-based energy organization or energy 

organization of an Indian tribe (as defined in section 4 of the 

Indian Self-Determination and Education Assistance Act (25 

U.S.C. 450b)); 

(3) a land-grant college or university (as defined in section 

1404 of the National Agricultural Research, Extension, and 

Teaching Policy Act of 1977 (7 U.S.C. 3103)) or other institution of higher education (as defined in section 101 of the Higher 

Education Act of 1965 (20 U.S.C. 1001)); 

(4) a rural electric cooperative or utility; 

(5) a nonprofit organization; and 

(6) any other entity, as determined by the Secretary. 

(c) MERIT REVIEW.— (1) MERIT REVIEW PROCESS.—The Secretary shall establish 

a merit review process to review applications for grants under 

subsection (a) that uses the expertise of other Federal agencies, 

industry, and nongovernmental organizations. 

(2) SELECTION CRITERIA.—In reviewing applications of eligible entities to receive grants under subsection (a), the Secretary shall consider—

(A) the ability and expertise of the eligible entity in providing professional energy audits and renewable energy assessments; 

(B) the geographic scope of the program proposed by 

the eligible entity; 

(C) the number of farmers, ranchers, and rural small 

businesses to be assisted by the program; 

(D) the potential for energy savings and environmental 

and public health benefits resulting from the program; and 

(E) the plan of the eligible entity for educating farmers, 

ranchers, and rural small businesses on the benefits of energy efficiency and renewable energy development. 

(d) USE OF GRANT FUNDS.—

(1) REQUIRED USES.—A recipient of a grant under subsection (a) shall use the grant funds to conduct and promote energy audits for farmers, ranchers, and rural small businesses to 

provide farmers, ranchers, and rural small businesses recVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00357 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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ommendations on how to improve energy efficiency and use renewable energy technology and resources. 

(2) PERMITTED USES.—In addition to the uses described in 

paragraph (1), a recipient of a grant may use the grant funds 

to make farmers, ranchers, and rural small businesses aware 

of, and ensure that they have access to—

(A) financial assistance under section 9006; and 

(B) other Federal, State, and local financial assistance 

programs for which farmers, ranchers, and rural small 

businesses may be eligible. 

(e) COST SHARING.—A recipient of a grant under subsection (a) 

that conducts an energy audit for a farmer, rancher, or rural small 

business under subsection (d)(1) shall require that, as a condition 

of the energy audit, the farmer, rancher, or rural small business pay 

at least 25 percent of the cost of the audit. 

(f) USE OF COST-SHARE FUNDS.—Funds collected by a recipient 

of a grant under subsection (e) as a result of activities carried out 

using the grant funds shall be used to conduct activities authorized 

under this section, as approved by the Secretary. 

(g) CONSULTATION.—In carrying out this section, the Secretary 

shall consult with the Secretary of Energy. 

(h) REPORTS.—Not later than 4 years after the date of enactment of this Act, the Secretary shall submit to Congress a report on 

the implementation of this section. 

(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007. 

SEC. 9006. RENEWABLE ENERGY SYSTEMS AND ENERGY EFFICIENCY 

IMPROVEMENTS. 

(a) IN GENERAL.—In addition to exercising authority to make 

loans and loan guarantees under other law, the Secretary shall 

make loans, loan guarantees, and grants to farmers, ranchers, and 

rural small businesses to—

(1) purchase renewable energy systems; and 

(2) make energy efficiency improvements. 

(b) ELIGIBILITY.—To be eligible to receive a grant under subsection (a), a farmer, rancher, or rural small business shall demonstrate financial need as determined by the Secretary. 

(c) COST SHARING.—

(1) IN GENERAL.—

(A) GRANTS.—The amount of a grant shall not exceed 

25 percent of the cost of the activity funded under subsection (a). 

(B) MAXIMUM AMOUNT OF COMBINED GRANT AND

LOAN.—The combined amount of a grant and loan made or 

guaranteed shall not exceed 50 percent of the cost of the activity funded under subsection (a). 

(2) FACTORS.—In determining the amount of a grant or 

loan, the Secretary shall take into consideration, as applicable—

(A) the type of renewable energy system to be purchased; 

(B) the estimated quantity of energy to be generated by 

the renewable energy system; 

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(C) the expected environmental benefits of the renewable energy system; 

(D) the extent to which the renewable energy system 

will be replicable; 

(E) the amount of energy savings expected to be derived 

from the activity, as demonstrated by an energy audit comparable to an energy audit under section 9005; 

(F) the estimated length of time it would take for the 

energy savings generated by the activity to equal the cost of 

the activity; and 

(G) other factors as appropriate. 

(d) INTEREST RATE.— (1) IN GENERAL.—A loan made by the Secretary under subsection (a) shall bear interest at the rate equivalent to the rate 

of interest charged on Treasury securities of comparable maturity on the date the loan is approved. 

(2) DURATION.—The interest rate for each loan will remain 

in effect for the term of the loan. 

(e) CONSULTATION.—In carrying out this section, the Secretary 

shall consult with the Secretary of Energy. 

(f) FUNDING.—Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this section 

$23,000,000 for each of fiscal years 2003 through 2007. 

SEC. 9007. HYDROGEN AND FUEL CELL TECHNOLOGIES. 

(a) IN GENERAL.—The Secretary and the Secretary of Energy 

shall enter into a memorandum of understanding under which the 

Secretary and the Secretary of Energy shall cooperate in the application of hydrogen and fuel cell technology programs for rural communities and agricultural producers. 

(b) DISSEMINATION OF INFORMATION.—Under the memorandum 

of understanding, the Secretary shall work with the Secretary of Energy to disseminate information to rural communities and agricultural producers on potential applications of hydrogen and fuel cell 

technologies. 

SEC. 9008. BIOMASS RESEARCH AND DEVELOPMENT. 

(a) FUNDING.—The Biomass Research and Development Act of 

2000 (7 U.S.C. 7624 note; Public Law 106–224) is amended— (1) in section 307, by striking subsection (f); 

(2) by redesignating section 310 as section 311; and 

(3) by inserting after section 309 the following: 

‘‘SEC. 310. FUNDING. 

‘‘(a) FUNDING.—Of funds of the Commodity Credit Corporation, 

the Secretary shall make available to carry out this title— ‘‘(1) $5,000,000 for fiscal year 2002; and 

‘‘(2) $14,000,000 for each of fiscal years 2003 through 2007;

to remain available until expended. 

‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—In addition to 

amounts transferred under subsection (a), there are authorized to be 

appropriated to carry out this title $49,000,000 for each of fiscal 

years 2002 through 2007.’’. 

(b) TERMINATION OF AUTHORITY.—Section 311 of the Biomass 

Research and Development Act of 2000 (7 U.S.C. 7624 note; Public 

Law 106–224) (as redesignated by subsection (a)) is amended by 

striking ‘‘December 31, 2005’’ and inserting ‘‘September 30, 2007’’. 

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SEC. 9009. COOPERATIVE RESEARCH AND EXTENSION PROJECTS. 

Section 221 of the Agricultural Risk Protection Act of 2000 (114 

Stat. 407) is amended—

(1) by redesignating subsection (d) as subsection (f); and 

(2) by inserting after subsection (c) the following:

‘‘(d) COOPERATIVE RESEARCH.—

‘‘(1) IN GENERAL.—Subject to the availability of appropriations, the Secretary, in cooperation with departments and agencies participating in the U.S. Global Change Research Program 

(which may use any of their statutory authorities) and with eligible entities, may carry out research to promote understanding 

of— ‘‘(A) the flux of carbon in soils and plants (including 

trees); and ‘‘(B) the exchange of other greenhouse gases from agriculture. 

‘‘(2) ELIGIBLE ENTITIES.—Research under this subsection 

may be carried out through the competitive awarding of grants 

and cooperative agreements to colleges and universities (as defined in section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 1303)). 

‘‘(3) COOPERATIVE RESEARCH PURPOSES.—Research conducted under this subsection shall encourage collaboration 

among scientists with expertise in the areas of soil science, 

agronomy, agricultural economics, forestry, and other agricultural sciences to focus on—

‘‘(A) developing data addressing carbon losses and 

gains in soils and plants (including trees) and the exchange 

of methane and nitrous oxide from agriculture; 

‘‘(B) understanding how agricultural and forestry practices affect the sequestration of carbon in soils and plants 

(including trees) and the exchange of other greenhouse 

gases, including the effects of new technologies such as biotechnology and nanotechnology; 

‘‘(C) developing cost-effective means of measuring and 

monitoring changes in carbon pools in soils and plants (including trees), including computer models; 

‘‘(D) evaluating the linkage between federal conservation programs and carbon sequestration; 

‘‘(E) developing methods, including remote sensing, to 

measure the exchange of carbon and other greenhouse gases 

sequestered, and to evaluate leakage, performance, and permanence issues; and 

‘‘(F) assessing the applicability of the results of research conducted under this subsection for developing 

methods to account for the impact of agricultural activities 

(including forestry) on the exchange of greenhouse gases. 

‘‘(4) AUTHORIZATION OF APPROPRIATION.—There are authorized to be appropriated such sums as are necessary to carry out 

this subsection for each of fiscal years 2002 through 2007. 

‘‘(e) EXTENSION PROJECTS.—

‘‘(1) IN GENERAL.—The Secretary, in cooperation with departments and agencies participating in the U.S. Global 

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357

tutions of higher education that offer a curriculum in agricultural and biological sciences, and other local agricultural or 

conservation organizations, may implement extension projects 

(including on-farm projects with direct involvement of agricultural producers) that combine measurement tools and modeling 

techniques into integrated packages to monitor the carbon sequestering benefits of conservation practices and the exchange of 

greenhouse gas emissions from agriculture which demonstrate 

the feasibility of methods of measuring and monitoring— ‘‘(A) changes in carbon content and other carbon pools 

in soils and plants (including trees); and ‘‘(B) the exchange of other greenhouse gases. ‘‘(2) EXTENSION PROJECT RESULTS.—The Secretary may disseminate to farmers, ranchers, private forest landowners, and 

appropriate State agencies in each State information concerning—

‘‘(A) the results of projects under this subsection; and 

‘‘(B) the manner in which the methods used in the 

projects might be applicable to the operations of the farmers, ranchers, private forest landowners, and State agencies. 

‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry 

out this subsection for each of fiscal years 2002 through 2007.’’. 

SEC. 9010. CONTINUATION OF BIOENERGY PROGRAM. 

(a) DEFINITIONS.—In this section: 

(1) BIOENERGY.—The term ‘‘bioenergy’’ means— (A) biodiesel; and 

(B) fuel grade ethanol. 

(2) BIODIESEL.—The term ‘‘biodiesel’’ means a monoalkyl 

ester that meets the requirements of an appropriate American 

Society for Testing and Materials standard. 

(3) ELIGIBLE COMMODITY.—The term ‘‘eligible commodity’’ means—(A) wheat, corn, grain sorghum, barley, oats, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, 

mustard, crambe, sesame seed, and cottonseed; 

(B) a cellulosic commodity (such as hybrid poplar and 

switch grass); 

(C) fats, oils, and greases (including recycled fats, oils, 

and greases) derived from an agricultural product; and 

(D) any animal byproduct (in addition to oils, fats, and 

greases) that may be used to produce bioenergy, as determined by the Secretary. 

(4) ELIGIBLE PRODUCER.—The term ‘‘eligible producer’’

means a producer that uses an eligible commodity to produce 

bioenergy. 

(b) BIOENERGY PROGRAM.—

(1) CONTINUATION.—The Secretary shall continue the program under part 1424 of title 7, Code of Federal Regulations 

(or any successor regulation), under which the Secretary makes 

payments to eligible producers to encourage increased purchases 

of eligible commodities for the purpose of expanding production 

of such bioenergy and supporting new production capacity for 

such bioenergy. 

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(2) CONTRACTS.—To be eligible to receive a payment, an eligible producer shall—

(A) enter into a contract with the Secretary to increase 

bioenergy production for 1 or more fiscal years; and 

(B) submit to the Secretary such records as the Secretary may require as evidence of increased purchase and 

use of eligible commodities for the production of bioenergy. 

(3) PAYMENT.—

(A) IN GENERAL.—Under the program, the Secretary 

shall make payments to eligible producers, based on the 

quantity of bioenergy produced by the eligible producer 

during a fiscal year that exceeds the quantity of bioenergy 

produced by the eligible producer during the preceding fiscal year. 

(B) PAYMENT RATE.—

(i) PRODUCERS OF LESS THAN 65,000,000 GALLONS.—

An eligible producer that produces less than 65,000,000 

gallons of bioenergy shall be reimbursed 1 feedstock 

unit for every 2.5 feedstock units of eligible commodity 

used for increased production. 

(ii) PRODUCERS OF 65,000,000 OR MORE GALLONS.—

An eligible producer that produces 65,000,000 or more 

gallons of bioenergy shall be reimbursed 1 feedstock 

unit for every 3.5 feedstock units of eligible commodity 

used for increased production. 

(C) QUARTERLY PAYMENTS.—The Secretary shall make 

payments to an eligible producer for each quarter of the fiscal year. 

(4) PRORATION.—If the amount made available for a fiscal 

year under subsection (c) is insufficient to allow the payment of 

the amount of the payments that eligible producers (that apply 

for the payments) otherwise would receive under this subsection, 

the Secretary shall prorate the amount of the funds among all 

such eligible producers. 

(5) OVERPAYMENTS.—If the total amount of payments that 

an eligible producer receives for a fiscal year under this section 

exceeds the amount that the eligible producer should have received under this subsection, the eligible producer shall repay 

the amount of the overpayment to the Secretary, with interest 

(as determined by the Secretary). 

(6) LIMITATION.—No eligible producer shall receive more 

than 5 percent of the total amount made available under subsection (c) for a fiscal year. 

(7) OTHER REQUIREMENTS.—To be eligible to receive a payment under this subsection, an eligible producer shall meet 

other requirements of Federal law (including regulations) applicable to the production of bioenergy. 

(c) FUNDING.—Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section—

(1) not more than $150,000,000 for each of fiscal years 2003 

through 2006; and 

(2) $0 for fiscal year 2007.

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TITLE X—MISCELLANEOUS 

Subtitle A—Crop Insurance 

SEC. 10001. EQUAL CROP INSURANCE TREATMENT OF POTATOES AND 

SWEET POTATOES. 

Section 508(a)(2) of the Federal Crop Insurance Act (7 U.S.C. 

1508(a)(2)) is amended in the first sentence by striking ‘‘and potatoes’’ and inserting ‘‘, potatoes, and sweet potatoes’’. 

SEC. 10002. CONTINUOUS COVERAGE. 

Section 508(e)(4) of the Federal Crop Insurance Act (7 U.S.C. 

1508(e)(4)) is amended— (1) in the paragraph heading, by striking ‘‘TEMPORARY PROHIBITION’’ and inserting ‘‘PROHIBITION’’; and 

(2) by striking ‘‘through 2005’’ and inserting ‘‘and subsequent’’. 

SEC. 10003. QUALITY LOSS ADJUSTMENT PROCEDURES. 

Section 508(m) of the Federal Crop Insurance Act (7 U.S.C. 

1508(m)) is amended—

(1) in paragraph (3)—

(A) by striking ‘‘The Corporation’’ and inserting the following: 

‘‘(A) REVIEW.—The Corporation’’; and 

(B) by striking ‘‘Based on’’ and inserting the following: 

‘‘(B) PROCEDURES.—Effective beginning not later than 

the 2004 reinsurance year, based on’’; and 

(2) by adding at the end the following: 

‘‘(4) QUALITY OF AGRICULTURAL COMMODITIES DELIVERED

TO WAREHOUSE OPERATORS.—In administering this title, the 

Secretary shall accept, in the same manner and under the same 

terms and conditions, evidence of the quality of agricultural 

commodities delivered to—

‘‘(A) warehouse operators that are licensed under the 

United States Warehouse Act (7 U.S.C. 241 et seq.); 

‘‘(B) warehouse operators that—

‘‘(i) are licensed under State law; and 

‘‘(ii) have entered into a storage agreement with the 

Commodity Credit Corporation; and 

‘‘(C) warehouse operators that—

‘‘(i) are not licensed under State law but are in 

compliance with State law regarding warehouses; and 

‘‘(ii) have entered into a commodity storage agreement with the Commodity Credit Corporation.’’. 

SEC. 10004. ADJUSTED GROSS REVENUE INSURANCE PILOT PROGRAM. 

Section 523 of the Federal Crop Insurance Act (7 U.S.C. 1523) 

is amended by adding at the end the following: 

‘‘(e) ADJUSTED GROSS REVENUE INSURANCE PILOT PROGRAM.—

‘‘(1) IN GENERAL.—The Corporation shall carry out, through 

at least the 2004 reinsurance year, the adjusted gross revenue 

insurance pilot program in effect for the 2002 reinsurance year. 

‘‘(2) ADDITIONAL COUNTIES.—

‘‘(A) IN GENERAL.—In addition to counties otherwise included in the pilot program, the Corporation shall include 

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in the pilot program for the 2003 reinsurance year at least 

8 counties in the State of California and at least 8 counties 

in the State of Pennsylvania. 

‘‘(B) SELECTION CRITERIA.—In carrying out subparagraph (A), the Corporation shall work with the respective 

State Departments of Agriculture to establish criteria to determine which counties to include in the pilot program.’’. 

SEC. 10005. SENSE OF CONGRESS ON EXPANSION OF CROP INSURANCE 

COVERAGE. 

It is the sense of Congress that the Federal Crop Insurance Corporation should address needs of producers through the expansion 

of pilot programs and coverage under the Federal Crop Insurance 

Act (7 U.S.C. 1501 et seq.), including—

(1) crop revenue insurance for the producers of pecans in 

the State of Georgia; and 

(2) coverage for continuous crops of wheat produced in the 

State of Kansas. 

SEC. 10006. REPORT ON SPECIALTY CROP INSURANCE. 

Not later than 180 days after the date of enactment of this Act, 

the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes—

(1) the progress made by the Federal Crop Insurance Corporation in research and development of innovative risk management products to include cost of production insurance that 

provides coverage for specialty crops, paying special attention to 

apples, asparagus, blueberries (wild and domestic), cabbage, 

canola, carrots, cherries, Christmas trees, citrus fruits, cucumbers, dry beans, eggplants, floriculture, grapes, greenhouse and 

nursery agricultural commodities, green peas, green peppers, 

hay, lettuce, maple, mushrooms, pears, potatoes, pumpkins, 

snap beans, spinach, squash, strawberries, sugar beets, and tomatoes; and 

(2) the progress made by the Corporation in increasing the 

use of risk management products offered through the Corporation by producers of specialty crops, by small- and moderatesized farms, and in areas that are underserved, as determined 

by the Secretary. 

Subtitle B—Disaster Assistance 

SEC. 10101. REFERENCE TO SEA GRASS AND SEA OATS AS CROPS COVERED BY NONINSURED CROP DISASTER ASSISTANCE PROGRAM. 

Section 196(a)(2)(B) of the Federal Agriculture Improvement 

and Reform Act of 1996 (7 U.S.C. 7333(a)(2)(B)) is amended by inserting ‘‘sea grass and sea oats,’’ after ‘‘fish),’’. 

SEC. 10102. EMERGENCY GRANTS TO ASSIST LOW-INCOME MIGRANT 

AND SEASONAL FARMWORKERS. 

Section 2281(a) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (42 U.S.C. 5177a(a)) is amended by striking ‘‘, 

not to exceed $20,000,000 annually,’’. 

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SEC. 10103. EMERGENCY LOANS FOR SEED PRODUCERS. 

Section 253(b)(5)(B) of the Agricultural Risk Protection Act of 

2000 (Public Law 106–224; 114 Stat. 423) is amended by striking 

‘‘18 months’’ and inserting ‘‘36 months’’. 

SEC. 10104. ASSISTANCE FOR LIVESTOCK PRODUCERS. 

(a) AVAILABILITY OF ASSISTANCE.—In such amounts as are provided in advance in appropriation Acts, the Secretary of Agriculture 

may provide assistance to dairy and other livestock producers to 

cover economic losses incurred by such producers in connection with 

the production of livestock. 

(b) TYPES OF ASSISTANCE.—The assistance provided to livestock 

producers may be in the following forms: 

(1) Indemnity payments to livestock producers who incur 

livestock mortality losses. 

(2) Livestock feed assistance to livestock producers affected 

by shortages of feed. 

(3) Compensation for sudden increases in production costs. 

(4) Such other assistance, and for such other economic 

losses, as the Secretary considers appropriate. 

(c) LIMITATIONS.—The Secretary may not use the funds of the 

Commodity Credit Corporation to provide assistance under this section. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to the Secretary such sums as may be necessary 

to carry out this section. 

SEC. 10105. MARKET LOSS ASSISTANCE FOR APPLE PRODUCERS. 

(a) IN GENERAL.—Of the funds of the Commodity Credit Corporation, the Secretary of Agriculture shall use $94,000,000 for fiscal year 2002 to make payments, as soon as practicable after the 

date of enactment of this Act, to apple producers for the loss of markets during the 2000 crop year. 

(b) PAYMENT QUANTITY.—The payment quantity of apples for 

which the producers on a farm are eligible for payments under this 

section shall be equal to the lesser of—

(1) the quantity of the 2000 crop of apples produced by the 

producers on the farm; or 

(2) 5,000,000 pounds of apples produced on the farm. 

(c) LIMITATIONS.—Subject to subsection (b)(2), the Secretary 

shall not establish a payment limitation, or income eligibility limitation, with respect to payments made under this section. 

(d) REGULATIONS.—

(1) IN GENERAL.—The Secretary shall promulgate such regulations as are necessary to implement this section. 

(2) PROCEDURE.—The promulgation of the regulations and 

administration of this section shall be made without regard 

to—

(A) the notice and comment provisions of section 553 of 

title 5, United States Code;

(B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; and 

(C) chapter 35 of title 44, United States Code (commonly known as the ‘‘Paperwork Reduction Act’’). 

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(3) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING.—In 

carrying out this subsection, the Secretary shall use the authority provided under section 808 of title 5, United States Code. 

SEC. 10106. MARKET LOSS ASSISTANCE FOR ONION PRODUCERS. 

The Secretary of Agriculture shall use $10,000,000 of the funds 

of the Commodity Credit Corporation to make a grant to the State 

of New York to be used to support onion producers in Orange County, New York, that have suffered losses to onion crops during 1 or 

more of the 1996 through 2000 crop years. 

SEC. 10107. COMMERCIAL FISHERIES FAILURE. 

(a) IN GENERAL.—The Secretary of Agriculture, in consultation 

with the Secretary of Commerce, shall provide emergency disaster 

assistance for the commercial fishery failure under section 308(b)(1) 

of the Interjurisdictional Fisheries Act of 1986 (16 U.S.C. 

4107(b)(1)) with respect to Northeast multispecies fisheries. 

(b) PROGRAM REQUIREMENTS.—Amounts made available to 

carry out this section shall be used to support a voluntary fishing 

capacity reduction program in the Northeast multispecies fishery 

that—

(1) is certified by the Secretary of Commerce to be consistent with section 312(b) of the Magnuson-Stevens Fishery 

Conservation and Management Act (16 U.S.C. 1861a(b)); and 

(2) permanently revokes multispecies limited access fishing 

permits so as to obtain the maximum sustained reduction in 

fishing capacity at the least cost and in the minimum period of 

time and to prevent the replacement of fishing capacity removed 

by the program. 

(c) APPLICATION OF REGULATIONS.—The program shall be carried out in accordance with the regulations codified at part 648 of 

title 50, Code of Federal Regulations, and any corresponding rule 

issued in accordance with the regulations. 

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this section. 

(e) TERMINATION OF AUTHORITY.—The authority provided 

under this section terminates on the date that is 1 year after the 

date of enactment of this Act. 

SEC. 10108. STUDY OF FEASIBILITY OF PRODUCER INDEMNIFICATION 

FROM GOVERNMENT-CAUSED DISASTERS. 

(a) FINDINGS.—Congress finds that the implementation of Federal disaster assistance programs fails to adequately address situations in which disaster conditions are caused primarily by Federal 

action. 

(b) AUTHORITY.—The Secretary of Agriculture shall conduct a 

study of the feasibility of expanding eligibility for crop insurance 

under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.), and 

noninsured crop assistance under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333), to agricultural producers experiencing disaster conditions caused primarily by Federal agency action restricting access to irrigation 

water, including any lack of access to an adequate supply of water 

caused by failure by the Secretary of the Interior to fulfill a contract 

in accordance with the Central Valley Project Improvement Act (106 

Stat. 4706). 

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(c) REPORT.—Not later than 150 days after the date of enactment of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that describes the results of the study, including any recommendations. 

Subtitle C—Tree Assistance Program 

SEC. 10201. DEFINITIONS. 

In this subtitle: 

(1) ELIGIBLE ORCHARDIST.—The term ‘‘eligible orchardist’’

means a person that produces annual crops from trees for commercial purposes. 

(2) NATURAL DISASTER.—The term ‘‘natural disaster’’

means plant disease, insect infestation, drought, fire, freeze, 

flood, earthquake, lightning, and other occurrence, as determined by the Secretary. 

(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

(4) TREE.—The term ‘‘tree’’ includes a tree, bush, and vine. 

SEC. 10202. ELIGIBILITY. 

(a) LOSS.—Subject to subsection (b), the Secretary shall provide 

assistance under section 10203 to eligible orchardists that planted 

trees for commercial purposes but lost the trees as a result of a natural disaster, as determined by the Secretary. 

(b) LIMITATION.—An eligible orchardist shall qualify for assistance under subsection (a) only if the tree mortality of the eligible orchardist, as a result of damaging weather or related condition, exceeds 15 percent (adjusted for normal mortality). 

SEC. 10203. ASSISTANCE. 

Subject to section 10204, the assistance provided by the Secretary to eligible orchardists for losses described in section 10202 

shall consist of—

(1) reimbursement of 75 percent of the cost of replanting 

trees lost due to a natural disaster, as determined by the Secretary, in excess of 15 percent mortality (adjusted for normal 

mortality); or 

(2) at the option of the Secretary, sufficient seedlings to reestablish a stand. 

SEC. 10204. LIMITATIONS ON ASSISTANCE. 

(a) AMOUNT.—The total amount of payments that a person shall be entitled to receive under this subtitle may not exceed $75,000, or 

an equivalent value in tree seedlings. 

(b) ACRES.—The total quantity of acres planted to trees or tree 

seedlings for which a person shall be entitled to receive payments 

under this subtitle may not exceed 500 acres. 

(c) REGULATIONS.—The Secretary shall promulgate regulations—

(1) defining the term ‘‘person’’ for the purposes of this subtitle, which shall conform, to the maximum extent practicable, 

to the regulations defining the term ‘‘person’’ promulgated 

under section 1001 of the Food Security Act of 1985 (7 U.S.C. 

1308); and 

364

(2) promulgating such regulations as the Secretary determines necessary to ensure a fair and reasonable application of 

the limitation established under this section. 

SEC. 10205. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated such sums as are necessary to carry out this subtitle. 

Subtitle D—Animal Welfare 

SEC. 10301. DEFINITION OF ANIMAL UNDER THE ANIMAL WELFARE 

ACT. 

Section 2(g) of the Animal Welfare Act (7 U.S.C. 2132(g)) is 

amended in the first sentence by striking ‘‘excludes horses not used 

for research purposes and’’ and inserting the following: ‘‘excludes (1) 

birds, rats of the genus Rattus, and mice of the genus Mus, bred for 

use in research, (2) horses not used for research purposes, and (3)’’. 

SEC. 10302. PROHIBITION ON INTERSTATE MOVEMENT OF ANIMALS 

FOR ANIMAL FIGHTING. 

(a) IN GENERAL.—Section 26 of the Animal Welfare Act (7 

U.S.C. 2156) is amended— (1) by striking subsection (a) and inserting the following: ‘‘(a) SPONSORING OR EXHIBITING AN ANIMAL IN AN ANIMAL

FIGHTING VENTURE.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), it 

shall be unlawful for any person to knowingly sponsor or exhibit an animal in an animal fighting venture, if any animal 

in the venture was moved in interstate or foreign commerce. ‘‘(2) SPECIAL RULE FOR CERTAIN STATES.—With respect to 

fighting ventures involving live birds in a State where it would 

not be in violation of the law, it shall be unlawful under this 

subsection for a person to sponsor or exhibit a bird in the fighting venture only if the person knew that any bird in the fighting 

venture was knowingly bought, sold, delivered, transported, or 

received in interstate or foreign commerce for the purpose of 

participation in the fighting venture.’’; 

(2) in subsection (b), by striking ‘‘or deliver to another person or receive from another person’’ and inserting ‘‘deliver, or 

receive’’; and 

(3) in subsection (d), by striking ‘‘subsections (a), (b), or (c) 

of this section’’ and inserting ‘‘subsection (c)’’. (b) EFFECTIVE DATE.—The amendments made by this section 

take effect 1 year after the date of enactment of this Act.

SEC. 10303. PENALTIES AND FOREIGN COMMERCE PROVISIONS OF THE 

ANIMAL WELFARE ACT. 

(a) IN GENERAL.—Section 26 of the Animal Welfare Act (7 

U.S.C. 2156) is amended—

(1) in subsection (e)—

(A) by inserting ‘‘PENALTIES.—’’ after ‘‘(e)’’; and 

(B) by striking ‘‘$5,000’’ and inserting ‘‘$15,000’’; and 

(2) in subsection (g)(2)(B), by inserting before the semicolon 

at the end the following: ‘‘or from any State into any foreign 

country’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

takes effect 1 year after the date of enactment of this Act. 

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SEC. 10304. REPORT ON RATS, MICE, AND BIRDS. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, the National Research Council shall submit to the 

Committee on Agriculture of the House of Representatives and the 

Committee on Agriculture, Nutrition, and Forestry of the Senate, a 

report on the implications of including rats, mice, and birds within 

the definition of animal under the regulations promulgated under 

the Animal Welfare Act (7 U.S.C. 2131 et seq.) 

(b) REQUIREMENTS.—The report under subsection (a) shall—

(1) be completed with input, consultation, and recommendations from— (A) the Secretary of Agriculture; 

(B) the Secretary of Health and Human Services; and 

(C) the Institute for Animal Laboratory Research within the National Academy of Sciences; 

(2) contain an estimate of— (A) the number and types of entities that use rats, mice, 

and birds for research purposes; and 

(B) which of the entities— (i) are subject to regulations of the Department of 

Agriculture; 

(ii) are subject to regulations or guidelines of the 

Department of Health and Human Services; or 

(iii) voluntarily comply with the accreditation requirements of the Association for Assessment and Accreditation of Laboratory Animal Care; 

(3) contain an estimate of the numbers of rats, mice, and 

birds used in research facilities, with an indication of which of 

the facilities—

(A) are subject to regulations of the Department of Agriculture; 

(B) are subject to regulations or guidelines of the Department of Health and Human Services; or 

(C) voluntarily comply with the accreditation requirements of the Association for Assessment and Accreditation 

of Laboratory Animal Care; 

(4) contain an estimate of the additional costs likely to be 

incurred by breeders and research facilities resulting from the 

additional regulatory requirements needed in order to afford 

the same level of protection to rats, mice, and birds as is provided for species regulated by the Department of Agriculture, 

detailing the costs associated with individual regulatory requirements; 

(5) contain recommendations for minimizing such costs, including—

(A) an estimate of the cost savings that would result 

from providing a different level of protection to rats, mice, 

and birds than is provided for species regulated by the Department of Agriculture; and 

(B) an estimate of the cost savings that would result if 

new regulatory requirements were substantially equivalent 

to, and harmonized with, guidelines of the National Institutes of Health; 

(6) contain an estimate of the additional funding that the 

Animal and Plant Health Inspection Service would require to 

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be able to ensure that the level of compliance with respect to 

other regulated animals is not diminished by the increase in the 

number of facilities that would require inspections if a rule extending the regulatory definition of animal to rats, mice, and 

birds were to become effective; and 

(7) contain recommendations for— (A) minimizing the regulatory burden on facilities subject to— (i) regulations of the Department of Agriculture; 

(ii) regulations or guidelines of the Department of 

Health and Human Services; or 

(iii) accreditation requirements of the Association 

for Assessment and Accreditation of Laboratory Animal Care; and 

(B) preventing any duplication of regulatory requirements. 

SEC. 10305. ENFORCEMENT OF HUMANE METHODS OF SLAUGHTER 

ACT OF 1958. 

(a) SENSE OF CONGRESS.—It is the sense of Congress that the 

Secretary of Agriculture should— (1) continue tracking the number of violations of Public 

Law 85–765 (7 U.S.C. 1901 et seq.; commonly known as the ‘‘Humane Methods of Slaughter Act of 1958’’) and report the results and relevant trends annually to Congress; and 

(2) fully enforce Public Law 85–765 by ensuring that humane methods in the slaughter of livestock— (A) prevent needless suffering; 

(B) result in safer and better working conditions for 

persons engaged in slaughtering operations; 

(C) bring about improvement of products and economies in slaughtering operations; and 

(D) produce other benefits for producers, processors, 

and consumers that tend to expedite an orderly flow of livestock and livestock products in interstate and foreign commerce. 

(b) UNITED STATES POLICY.—It is the policy of the United 

States that the slaughtering of livestock and the handling of livestock in connection with slaughter shall be carried out only by humane methods, as provided by Public Law 85–765. 

Subtitle E—Animal Health Protection 

SEC. 10401. SHORT TITLE. 

This subtitle may be cited as the ‘‘Animal Health Protection 

Act’’. 

SEC. 10402. FINDINGS. 

Congress finds that—

(1) the prevention, detection, control, and eradication of diseases and pests of animals are essential to protect—

(A) animal health; 

(B) the health and welfare of the people of the United 

States; 

(C) the economic interests of the livestock and related 

industries of the United States; 

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(D) the environment of the United States; and 

(E) interstate commerce and foreign commerce of the 

United States in animals and other articles; 

(2) animal diseases and pests are primarily transmitted by 

animals and articles regulated under this subtitle; 

(3) the health of animals is affected by the methods by 

which animals and articles are transported in interstate commerce and foreign commerce; 

(4) the Secretary must continue to conduct research on animal diseases and pests that constitute a threat to the livestock 

of the United States; and 

(5)(A) all animals and articles regulated under this subtitle 

are in or affect interstate commerce or foreign commerce; and 

(B) regulation by the Secretary and cooperation by the Secretary with foreign countries, States or other jurisdictions, or 

persons are necessary— (i) to prevent and eliminate burdens on interstate commerce and foreign commerce; 

(ii) to regulate effectively interstate commerce and foreign commerce; and 

(iii) to protect the agriculture, environment, economy, 

and health and welfare of the people of the United States. 

SEC. 10403. DEFINITIONS. 

In this subtitle: 

(1) ANIMAL.—The term ‘‘animal’’ means any member of the 

animal kingdom (except a human). 

(2) ARTICLE.—The term ‘‘article’’ means any pest or disease 

or any material or tangible object that could harbor a pest or 

disease. 

(3) DISEASE.—The term ‘‘disease’’ has the meaning given 

the term by the Secretary. 

(4) ENTER.—The term ‘‘enter’’ means to move into the commerce of the United States. 

(5) EXPORT.—The term ‘‘export’’ means to move from a 

place within the territorial limits of the United States to a place 

outside the territorial limits of the United States. 

(6) FACILITY.—The term ‘‘facility’’ means any structure.

(7) IMPORT.—The term ‘‘import’’ means to move from a 

place outside the territorial limits of the United States to a 

place within the territorial limits of the United States. 

(8) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has the meaning given the term in section 4 of the Indian Self-Determination 

and Education Assistance Act (25 U.S.C. 450b). 

(9) INTERSTATE COMMERCE.—The term ‘‘interstate commerce’’ means trade, traffic, or other commerce—

(A) between a place in a State and a place in another 

State, or between places within the same State but through 

any place outside that State; or 

(B) within the District of Columbia or any territory or 

possession of the United States. 

(10) LIVESTOCK.—The term ‘‘livestock’’ means all farmraised animals. 

(11) MEANS OF CONVEYANCE.—The term ‘‘means of conveyance’’ means any personal property used for or intended for use 

for the movement of any other personal property. 

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(12) MOVE.—The term ‘‘move’’ means— (A) to carry, enter, import, mail, ship, or transport; 

(B) to aid, abet, cause, or induce carrying, entering, importing, mailing, shipping, or transporting; 

(C) to offer to carry, enter, import, mail, ship, or transport; 

(D) to receive in order to carry, enter, import, mail, 

ship, or transport; 

(E) to release into the environment; or 

(F) to allow any of the activities described in this paragraph. 

(13) PEST.—The term ‘‘pest’’ means any of the following 

that can directly or indirectly injure, cause damage to, or cause 

disease in livestock: 

(A) A protozoan. 

(B) A plant. 

(C) A bacteria. 

(D) A fungus. 

(E) A virus or viroid. 

(F) An infectious agent or other pathogen. 

(G) An arthropod. 

(H) A parasite. 

(I) A prion. 

(J) A vector. 

(K) Any organism similar to or allied with any of the 

organisms described in this paragraph. 

(14) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture. 

(15) STATE.—The term ‘‘State’’ means any of the States, the 

District of Columbia, the Commonwealth of Puerto Rico, Guam, 

the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United States, or any territory or possession 

of the United States. 

(16) THIS SUBTITLE.—Except when used in this section, the 

term ‘‘this subtitle’’ includes any regulation or order issued by 

the Secretary under the authority of this subtitle. 

(17) UNITED STATES.—The term ‘‘United States’’ means all 

of the States. 

SEC. 10404. RESTRICTION ON IMPORTATION OR ENTRY. 

(a) IN GENERAL.—With notice to the Secretary of the Treasury 

and public notice as soon as practicable, the Secretary may prohibit 

or restrict—

(1) the importation or entry of any animal, article, or 

means of conveyance, or use of any means of conveyance or facility, if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction into or dissemination within the United States of any pest or disease of livestock; 

(2) the further movement of any animal that has strayed 

into the United States if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction 

into or dissemination within the United States of any pest or 

disease of livestock; and 

(3) the use of any means of conveyance in connection with 

the importation or entry of livestock if the Secretary determines 

that the prohibition or restriction is necessary because the 

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means of conveyance has not been maintained in a clean and 

sanitary condition or does not have accommodations for the safe 

and proper movement of livestock. 

(b) REGULATIONS.—

(1) RESTRICTIONS ON IMPORT AND ENTRY.—The Secretary 

may issue such orders and promulgate such regulations as are 

necessary to carry out subsection (a). 

(2) POST IMPORTATION QUARANTINE.—The Secretary may 

promulgate regulations requiring that any animal imported or 

entered be raised or handled under post-importation quarantine 

conditions by or under the supervision of the Secretary for the 

purpose of determining whether the animal is or may be affected by any pest or disease of livestock. 

(c) DESTRUCTION OR REMOVAL.—

(1) IN GENERAL.—The Secretary may order the destruction 

or removal from the United States of—

(A) any animal, article, or means of conveyance that 

has been imported but has not entered the United States if 

the Secretary determines that destruction or removal from 

the United States is necessary to prevent the introduction 

into or dissemination within the United States of any pest 

or disease of livestock; 

(B) any animal or progeny of any animal, article, or 

means of conveyance that has been imported or entered in 

violation of this subtitle; or 

(C) any animal that has strayed into the United States 

if the Secretary determines that destruction or removal 

from the United States is necessary to prevent the introduction into or dissemination within the United States of any 

pest or disease of livestock. 

(2) REQUIREMENTS OF OWNERS.—

(A) ORDERS TO DISINFECT.—The Secretary may require 

the disinfection of—

(i) a means of conveyance used in connection with 

the importation of an animal; 

(ii) an individual involved in the importation of an 

animal and personal articles of the individual; and 

(iii) any article used in the importation of an animal. 

(B) FAILURE TO COMPLY WITH ORDERS.—If an owner 

fails to comply with an order of the Secretary under this 

section, the Secretary may—

(i) take remedial action, destroy, or remove from 

the United States the animal or progeny of any animal, 

article, or means of conveyance as authorized under 

paragraph (1); and 

(ii) recover from the owner the costs of any care, 

handling, disposal, or other action incurred by the Secretary in connection with the remedial action, destruction, or removal. 

SEC. 10405. EXPORTATION. 

(a) IN GENERAL.—The Secretary may prohibit or restrict—

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striction is necessary to prevent the dissemination from or within the United States of any pest or disease of livestock; 

(2) the exportation of any livestock if the Secretary determines that the livestock is unfit to be moved; 

(3) the use of any means of conveyance or facility in connection with the exportation of any animal or article if the Secretary determines that the prohibition or restriction is necessary 

to prevent the dissemination from or within the United States 

of any pest or disease of livestock; or 

(4) the use of any means of conveyance in connection with 

the exportation of livestock if the Secretary determines that the 

prohibition or restriction is necessary because the means of conveyance has not been maintained in a clean and sanitary condition or does not have accommodations for the safe and proper 

movement and humane treatment of livestock. 

(b) REQUIREMENTS OF OWNERS.—

(1) ORDERS TO DISINFECT.—The Secretary may require the 

disinfection of—

(A) a means of conveyance used in connection with the 

exportation of an animal; 

(B) an individual involved in the exportation of an animal and personal articles of the individual; and 

(C) any article used in the exportation of an animal. 

(2) FAILURE TO COMPLY WITH ORDERS.—If an owner fails to 

comply with an order of the Secretary under this section, the 

Secretary may—

(A) take remedial action with respect to the animal, article, or means of conveyance referred to in paragraph (1); 

and 

(B) recover from the owner the costs of any care, handling, disposal, or other action incurred by the Secretary in 

connection with the remedial action. 

(c) CERTIFICATION.—The Secretary may certify the classification, quality, quantity, condition, processing, handling, or storage of 

any animal or article intended for export.

SEC. 10406. INTERSTATE MOVEMENT. 

The Secretary may prohibit or restrict—

(1) the movement in interstate commerce of any animal, article, or means of conveyance if the Secretary determines that 

the prohibition or restriction is necessary to prevent the introduction or dissemination of any pest or disease of livestock; and 

(2) the use of any means of conveyance or facility in connection with the movement in interstate commerce of any animal 

or article if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction or dissemination of any pest or disease of livestock. 

SEC. 10407. SEIZURE, QUARANTINE, AND DISPOSAL. 

(a) IN GENERAL.—The Secretary may hold, seize, quarantine, 

treat, destroy, dispose of, or take other remedial action with respect 

to—

(1) any animal or progeny of any animal, article, or means 

of conveyance that—

(A) is moving or has been moved in interstate commerce or has been imported and entered; and 

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(B) the Secretary has reason to believe may carry, may 

have carried, or may have been affected with or exposed to 

any pest or disease of livestock at the time of movement or 

that is otherwise in violation of this subtitle; 

(2) any animal or progeny of any animal, article, or means 

of conveyance that is moving or is being handled, or has moved 

or has been handled, in interstate commerce in violation of this 

subtitle; 

(3) any animal or progeny of any animal, article, or means 

of conveyance that has been imported, and is moving or is being 

handled or has moved or has been handled, in violation of this 

subtitle; or 

(4) any animal or progeny of any animal, article, or means 

of conveyance that the Secretary finds is not being maintained, 

or has not been maintained, in accordance with any post-importation quarantine, post-importation condition, post-movement 

quarantine, or post-movement condition in accordance with this 

subtitle. 

(b) EXTRAORDINARY EMERGENCIES.— (1) IN GENERAL.—Subject to paragraph (2), if the Secretary 

determines that an extraordinary emergency exists because of 

the presence in the United States of a pest or disease of livestock 

and that the presence of the pest or disease threatens the livestock of the United States, the Secretary may— (A) hold, seize, treat, apply other remedial actions to, 

destroy (including preventative slaughter), or otherwise dispose of, any animal, article, facility, or means of conveyance if the Secretary determines the action is necessary to 

prevent the dissemination of the pest or disease; and 

(B) prohibit or restrict the movement or use within a 

State, or any portion of a State of any animal or article, 

means of conveyance, or facility if the Secretary determines 

that the prohibition or restriction is necessary to prevent 

the dissemination of the pest or disease. 

(2) STATE ACTION.— (A) IN GENERAL.—The Secretary may take action in a 

State under this subsection only on finding that measures 

being taken by the State are inadequate to control or eradicate the pest or disease, after review and consultation 

with— ‘‘(i) the Governor or an appropriate animal health 

official of the State; or ‘‘(ii) in the case of any animal, article, facility, or 

means of conveyance under the jurisdiction of an Indian tribe, the head of the Indian tribe. 

(B) NOTICE.—Subject to subparagraph (C), before any 

action is taken in a State under subparagraph (A), the Secretary shall—

(i) notify the Governor, an appropriate animal 

health official of the State, or head of the Indian tribe 

of the proposed action; 

(ii) issue a public announcement of the proposed 

action; and 

(iii) publish in the Federal Register— (I) the findings of the Secretary; 

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(II) a description of the proposed action; and 

(III) a statement of the reasons for the proposed action. 

(C) NOTICE AFTER ACTION.—If it is not practicable to 

publish in the Federal Register the information required 

under subparagraph (B)(iii) before taking action under subparagraph (A), the Secretary shall publish the information 

as soon as practicable, but not later than 10 business days, 

after commencement of the action. 

(c) QUARANTINE, DISPOSAL, OR OTHER REMEDIAL ACTION.—

(1) IN GENERAL.—The Secretary, in writing, may order the 

owner of any animal, article, facility, or means of conveyance 

referred to in subsection (a) or (b) to maintain in quarantine, 

dispose of, or take other remedial action with respect to the animal, article, facility, or means of conveyance, in a manner determined by the Secretary. 

(2) FAILURE TO COMPLY WITH ORDERS.—If the owner fails 

to comply with the order of the Secretary, the Secretary may—

(A) seize, quarantine, dispose of, or take other remedial 

action with respect to the animal, article, facility, or means 

of conveyance under subsection (a) or (b); and 

(B) recover from the owner the costs of any care, handling, disposal, or other remedial action incurred by the 

Secretary in connection with the seizure, quarantine, disposal, or other remedial action. 

(d) COMPENSATION.—

(1) IN GENERAL.—Except as provided in paragraph (3), the 

Secretary shall compensate the owner of any animal, article, facility, or means of conveyance that the Secretary requires to be 

destroyed under this section. 

(2) AMOUNT.—

(A) IN GENERAL.—Subject to subparagraphs (B) and 

(C), the compensation shall be based on the fair market 

value, as determined by the Secretary, of the destroyed animal, article, facility, or means of conveyance. 

(B) LIMITATION.—Compensation paid any owner under 

this subsection shall not exceed the difference between—

(i) the fair market value of the destroyed animal, 

article, facility, or means of conveyance; and 

(ii) any compensation received by the owner from 

a State or other source for the destroyed animal, article, facility, or means of conveyance. 

(C) REVIEWABILITY.—The determination by the Secretary of the amount to be paid under this subsection shall 

be final and not subject to judicial review or review of 

longer than 60 days by any officer or employee of the Federal Government other than the Secretary or the designee of 

the Secretary. 

(3) EXCEPTIONS.—No payment shall be made by the Secretary under this subsection for—

(A) any animal, article, facility, or means of conveyance 

that has been moved or handled by the owner in violation 

of an agreement for the control and eradication of diseases 

or pests or in violation of this subtitle; 

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(B) any progeny of any animal or article, which animal 

or article has been moved or handled by the owner of the 

animal or article in violation of this subtitle; 

(C) any animal, article, or means of conveyance that is 

refused entry under this subtitle; or 

(D) any animal, article, facility, or means of conveyance that becomes or has become affected with or exposed 

to any pest or disease of livestock because of a violation of 

an agreement for the control and eradication of diseases or 

pests or a violation of this subtitle by the owner. 

SEC. 10408. INSPECTIONS, SEIZURES, AND WARRANTS. 

(a) GUIDELINES.—The activities authorized by this section shall 

be carried out consistent with guidelines approved by the Attorney 

General. 

(b) WARRANTLESS INSPECTIONS.—The Secretary may stop and 

inspect, without a warrant, any person or means of conveyance moving—

(1) into the United States, to determine whether the person 

or means of conveyance is carrying any animal or article regulated under this subtitle; 

(2) in interstate commerce, on probable cause to believe that 

the person or means of conveyance is carrying any animal or 

article regulated under this subtitle; or 

(3) in intrastate commerce from any State, or any portion 

of a State, quarantined under section 10407(b), on probable 

cause to believe that the person or means of conveyance is carrying any animal or article quarantined under section 10407(b). 

(c) INSPECTIONS WITH WARRANTS.—

(1) IN GENERAL.—The Secretary may enter, with a warrant, 

any premises in the United States for the purpose of making inspections and seizures under this subtitle. 

(2) APPLICATION AND ISSUANCE OF WARRANTS.—

(A) IN GENERAL.—On proper oath or affirmation showing probable cause to believe that there is on certain premises any animal, article, facility, or means of conveyance 

regulated under this subtitle, a United States judge, a 

judge of a court of record in the United States, or a United 

States magistrate judge may issue a warrant for the entry 

on premises within the jurisdiction of the judge or magistrate to make any inspection or seizure under this subtitle. 

(B) EXECUTION.—The warrant may be applied for and 

executed by the Secretary or any United States marshal. 

SEC. 10409. DETECTION, CONTROL, AND ERADICATION OF DISEASES 

AND PESTS. 

(a) IN GENERAL.—The Secretary may carry out operations and 

measures to detect, control, or eradicate any pest or disease of livestock (including the drawing of blood and diagnostic testing of animals), including animals at a slaughterhouse, stockyard, or other 

point of concentration. 

(b) COMPENSATION.— (1) IN GENERAL.—The Secretary may pay a claim arising 

out of the destruction of any animal, article, or means of conveyance consistent with the purposes of this subtitle. 

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(2) REVIEWABILITY.—The action of the Secretary in carrying 

out paragraph (1) shall not be subject to review of longer than 

60 days by any officer or employee of the Federal Government 

other than the Secretary or the designee of the Secretary. 

SEC. 10410. VETERINARY ACCREDITATION PROGRAM. 

(a) IN GENERAL.—The Secretary may establish a veterinary accreditation program that is consistent with this subtitle, including 

the establishment of standards of conduct for accredited veterinarians. 

(b) CONSULTATION.—The Secretary shall consult with State animal health officials and veterinary professionals regarding the establishment of the veterinary accreditation program. 

(c) SUSPENSION OR REVOCATION OF ACCREDITATION.—

(1) IN GENERAL.—The Secretary may, after notice and opportunity for a hearing on the record, suspend or revoke the accreditation of any veterinarian accredited under this title who 

violates this subtitle. 

(2) FINAL ORDER.—The order of the Secretary suspending or 

revoking accreditation shall be treated as a final order reviewable under chapter 158 of title 28, United States Code. 

(3) SUMMARY SUSPENSION.—

(A) IN GENERAL.—The Secretary may summarily suspend the accreditation of a veterinarian whom the Secretary has reason to believe knowingly violated this subtitle. 

(B) HEARINGS.—The Secretary shall provide the veterinarian with a subsequent notice and an opportunity for a 

prompt post-suspension hearing on the record. 

(d) APPLICATION OF PENALTY PROVISIONS.—The criminal and 

civil penalties described in section 10414 shall not apply to a violation of this section that is not a violation of any other provision of 

this subtitle. 

SEC. 10411. COOPERATION. 

(a) IN GENERAL.—To carry out this subtitle, the Secretary may 

cooperate with other Federal agencies, States or political subdivisions of States, national governments of foreign countries, local governments of foreign countries, domestic or international organizations, domestic or international associations, Indian tribes, and 

other persons. 

(b) RESPONSIBILITY.—The person or other entity cooperating 

with the Secretary shall be responsible for the authority necessary 

to carry out operations or measures—

(1) on all land and property within a foreign country or 

State, or under the jurisdiction of an Indian tribe, other than 

on land and property owned or controlled by the United States; 

and 

(2) using other facilities and means, as determined by the 

Secretary. 

(c) SCREWWORMS.— (1) IN GENERAL.—The Secretary may, independently or in 

cooperation with national governments of foreign countries or 

international organizations or associations, produce and sell 

sterile screwworms to any national government of a foreign 

country or international organization or association, if the SecVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00378 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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retary determines that the livestock industry and related industries of the United States will not be adversely affected by the 

production and sale. 

(2) PROCEEDS.— (A) INDEPENDENT PRODUCTION AND SALE.—If the Secretary independently produces and sells sterile screwworms 

under paragraph (1), the proceeds of the sale shall be— (i) deposited into the Treasury of the United 

States; and 

(ii) credited to the account from which the operating expenses of the facility producing the sterile 

screwworms have been paid. 

(B) COOPERATIVE PRODUCTION AND SALE.— (i) IN GENERAL.—If the Secretary cooperates to 

produce and sell sterile screwworms under paragraph 

(1), the proceeds of the sale shall be divided between 

the United States and the cooperating national government or international organization or association in a 

manner determined by the Secretary. 

(ii) ACCOUNT.—The United States portion of the 

proceeds shall be— (I) deposited into the Treasury of the United 

States; and 

(II) credited to the account from which the operating expenses of the facility producing the sterile screwworms have been paid. 

(d) COOPERATION IN PROGRAM ADMINISTRATION.—The Secretary 

may cooperate with State authorities, Indian tribe authorities, or 

other persons in the administration of regulations for the improvement of livestock and livestock products. 

(e) CONSULTATION AND COORDINATION WITH OTHER FEDERAL

AGENCIES.—

(1) IN GENERAL.—The Secretary shall consult and coordinate with the head of a Federal agency with respect to any activity that is under the jurisdiction of the Federal agency. 

(2) LEAD AGENCY.—Subject to the consultation and coordination requirement in paragraph (1), the Department of Agriculture shall be the lead agency with respect to issues related 

to pests and diseases of livestock. 

SEC. 10412. REIMBURSABLE AGREEMENTS. 

(a) AUTHORITY TO ENTER INTO AGREEMENTS.—The Secretary 

may enter into reimbursable fee agreements with persons for 

preclearance of animals or articles at locations outside the United 

States for movement into the United States. 

(b) FUNDS COLLECTED FOR PRECLEARANCE.—Funds collected 

for preclearance activities shall—

(1) be credited to accounts that may be established by the 

Secretary for carrying out this section; and 

(2) remain available until expended for the preclearance activities, without fiscal year limitation. 

(c) PAYMENT OF EMPLOYEES.—

(1) IN GENERAL.—Notwithstanding any other law, the Secretary may pay an officer or employee of the Department of Agriculture performing services under this subtitle relating to imports into and exports from the United States for all overtime, 

376

night, or holiday work performed by the officer or employee at 

a rate of pay determined by the Secretary. 

(2) REIMBURSEMENT.—

(A) IN GENERAL.—The Secretary may require a person 

for whom the services are performed to reimburse the Secretary for any expenses paid by the Secretary for the services under this subsection. 

(B) USE OF FUNDS.—All funds collected under this subsection shall—

(i) be credited to the account that incurs the costs; 

and 

(ii) remain available until expended, without fiscal 

year limitation. 

(d) LATE PAYMENT PENALTIES.—

(1) COLLECTION.—On failure by a person to reimburse the 

Secretary in accordance with this section, the Secretary may assess a late payment penalty against the person, including interest on overdue funds, as required by section 3717 of title 31, 

United States Code. 

(2) USE OF FUNDS.—Any late payment penalty and any accrued interest shall—

(A) be credited to the account that incurs the costs; and 

(B) remain available until expended, without fiscal 

year limitation. 

SEC. 10413. ADMINISTRATION AND CLAIMS. 

(a) ADMINISTRATION.—To carry out this subtitle, the Secretary 

may—

(1) acquire and maintain real or personal property;

(2) employ a person; 

(3) make a grant; and 

(4) notwithstanding chapter 63 of title 31, United States 

Code, enter into a contract, cooperative agreement, memorandum of understanding, or other agreement. 

(b) TORT CLAIMS.—

(1) IN GENERAL.—Except as provided in paragraph (2), the 

Secretary may pay a tort claim, in the manner authorized by 

the first paragraph of section 2672 of title 28, United States 

Code, if the claim arises outside the United States in connection 

with an activity authorized under this subtitle. 

(2) REQUIREMENTS.—A claim may not be allowed under 

this subsection unless the claim is presented in writing to the 

Secretary not later than 2 years after the date on which the 

claim arises. 

SEC. 10414. PENALTIES. 

(a) CRIMINAL PENALTIES.—

(1) OFFENSES.—

(A) IN GENERAL.—A person that knowingly violates this 

subtitle, or knowingly forges, counterfeits, or, without authority from the Secretary, uses, alters, defaces, or destroys 

any certificate, permit, or other document provided for in 

this subtitle shall be fined under title 18, United States 

Code, imprisoned not more than 1 year, or both. 

(B) DISTRIBUTION OR SALE.—A person that knowingly 

imports, enters, exports, or moves any animal or article, for 

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distribution or sale, in violation of this subtitle, shall be 

fined under title 18, United States Code, imprisoned not 

more than 5 years, or both. 

(2) MULTIPLE VIOLATIONS.—On the second and any subsequent conviction of a person of a violation of this subtitle under 

paragraph (1), the person shall be fined under title 18, United 

States Code, imprisoned not more than 10 years, or both. 

(b) CIVIL PENALTIES.— (1) IN GENERAL.—Except as provided in section 10410(d), 

any person that violates this subtitle, or that forges, counterfeits, or, without authority from the Secretary, uses, alters, defaces, or destroys any certificate, permit, or other document provided under this subtitle may, after notice and opportunity for 

a hearing on the record, be assessed a civil penalty by the Secretary that does not exceed the greater of— (A)(i) $50,000 in the case of any individual, except that the civil penalty may not exceed $1,000 in the case of an 

initial violation of this subtitle by an individual moving 

regulated articles not for monetary gain; (ii) $250,000 in the case of any other person for each 

violation; and 

(iii) $500,000 for all violations adjudicated in a single 

proceeding; or 

(B) twice the gross gain or gross loss for any violation 

or forgery, counterfeiting, or unauthorized use, alteration, 

defacing or destruction of a certificate, permit, or other document provided under this subtitle that results in the person’s deriving pecuniary gain or causing pecuniary loss to 

another person. 

(2) FACTORS IN DETERMINING CIVIL PENALTY.—In determining the amount of a civil penalty, the Secretary shall take 

into account the nature, circumstance, extent, and gravity of the 

violation or violations and the Secretary may consider, with respect to the violator—

(A) the ability to pay; 

(B) the effect on ability to continue to do business; 

(C) any history of prior violations; 

(D) the degree of culpability; and 

(E) such other factors as the Secretary considers to be 

appropriate. 

(3) SETTLEMENT OF CIVIL PENALTIES.—The Secretary may 

compromise, modify, or remit, with or without conditions, any 

civil penalty that may be assessed under this subsection. 

(4) FINALITY OF ORDERS.—

(A) FINAL ORDER.—The order of the Secretary assessing 

a civil penalty shall be treated as a final order reviewable 

under chapter 158 of title 28, United States Code. 

(B) REVIEW.—The validity of the order of the Secretary 

may not be reviewed in an action to collect the civil penalty. 

(C) INTEREST.—Any civil penalty not paid in full when 

due under an order assessing the civil penalty shall thereafter accrue interest until paid at the rate of interest applicable to civil judgments of the courts of the United States. 

(c) LIABILITY FOR ACTS OF AGENTS.—In the construction and 

enforcement of this subtitle, the act, omission, or failure of any offiVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00381 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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cer, agent, or person acting for or employed by any other person 

within the scope of the employment or office of the officer, agent, or 

person, shall be deemed also to be the act, omission, or failure of 

the other person. 

(d) GUIDELINES FOR CIVIL PENALTIES.—Subject to the approval 

of the Attorney General, the Secretary shall establish guidelines to 

determine under what circumstances the Secretary may issue a civil 

penalty or suitable notice of warning in lieu of prosecution by the 

Attorney General of a violation of this subtitle. 

SEC. 10415. ENFORCEMENT. 

(a) COLLECTION OF INFORMATION.—

(1) IN GENERAL.—The Secretary may gather and compile 

information and conduct any inspection or investigation that 

the Secretary considers to be necessary for the administration or 

enforcement of this subtitle. 

(2) SUBPOENAS.—

(A) IN GENERAL.—The Secretary shall have power to 

issue a subpoena to compel the attendance and testimony of 

any witness and the production of any documentary evidence relating to the administration or enforcement of this 

subtitle or any matter under investigation in connection 

with this subtitle. 

(B) LOCATION OF PRODUCTION.—The attendance of any 

witness and production of documentary evidence relevant to 

the inquiry may be required from any place in the United 

States. 

(C) ENFORCEMENT.—

(i) IN GENERAL.—In case of disobedience to a subpoena by any person, the Secretary may request the Attorney General to invoke the aid of any court of the 

United States within the jurisdiction in which the investigation is conducted, or where the person resides, is 

found, transacts business, is licensed to do business, or 

is incorporated, to require the attendance and testimony of any witness and the production of documentary evidence. 

(ii) NONCOMPLIANCE.—In case of a refusal to obey 

a subpoena issued to any person, a court may order the 

person to appear before the Secretary and give evidence 

concerning the matter in question or to produce documentary evidence. 

(iii) CONTEMPT.—Any failure to obey the order of 

the court may be punished by the court as contempt of 

the court. 

(D) COMPENSATION.—

(i) WITNESSES.—A witness summoned by the Secretary under this subtitle shall be paid the same fees 

and mileage that are paid to a witness in a court of the 

United States. 

(ii) DEPOSITIONS.—A witness whose deposition is 

taken, and the person taking the deposition, shall be 

entitled to the same fees that are paid for similar services in a court of the United States. 

(E) PROCEDURES.—

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(i) PUBLICATION.—The Secretary shall publish procedures for the issuance of subpoenas under this section. 

(ii) REVIEW.—The procedures shall include a requirement that subpoenas be reviewed for legal sufficiency and, to be effective, be signed by the Secretary. 

(iii) DELEGATION.—If the authority to sign a subpoena is delegated to an agency other than the Office 

of Administrative Law Judges, the agency receiving the 

delegation shall seek review of the subpoena for legal 

sufficiency outside that agency. 

(b) AUTHORITY OF ATTORNEY GENERAL.—The Attorney General 

may—

(1) prosecute, in the name of the United States, all criminal 

violations of this subtitle that are referred to the Attorney General by the Secretary or are brought to the notice of the Attorney 

General by any person; 

(2) bring an action to enjoin the violation of or to compel 

compliance with this subtitle, or to enjoin any interference by 

any person with the Secretary in carrying out this subtitle, in 

any case in which the Secretary has reason to believe that the 

person has violated, or is about to violate this subtitle or has 

interfered, or is about to interfere, with the actions of the Secretary; or

(3) bring an action for the recovery of any unpaid civil penalty, funds under a reimbursable agreement, late payment penalty, or interest assessed under this subtitle. 

(c) COURT JURISDICTION.—

(1) IN GENERAL.—The United States district courts, the District Court of Guam, the District Court of the Northern Mariana Islands, the District Court of the Virgin Islands, the highest court of American Samoa, and the United States courts of 

the other territories and possessions are vested with jurisdiction 

in all cases arising under this subtitle. 

(2) VENUE.—Any action arising under this subtitle may be 

brought, and process may be served, in the judicial district 

where a violation or interference occurred or is about to occur, 

or where the person charged with the violation, interference, impending violation, impending interference, or failure to pay resides, is found, transacts business, is licensed to do business, or 

is incorporated. 

(3) EXCEPTION.—Paragraphs (1) and (2) do not apply to 

sections 10410(c) and 10414(b). 

SEC. 10416. REGULATIONS AND ORDERS. 

The Secretary may promulgate such regulations, and issue such 

orders, as the Secretary determines necessary to carry out this subtitle. 

SEC. 10417. AUTHORIZATION OF APPROPRIATIONS. 

(a) IN GENERAL.—There are authorized to be appropriated such 

sums as are necessary to carry out this subtitle. 

(b) TRANSFER OF FUNDS.—

(1) IN GENERAL.—In connection with an emergency under 

which a pest or disease of livestock threatens any segment of agricultural production in the United States, the Secretary may 

380

transfer from other appropriations or funds available to the 

agencies or corporations of the Department of Agriculture such 

funds as the Secretary determines are necessary for the arrest, 

control, eradication, or prevention of the spread of the pest or 

disease of livestock and for related expenses. 

(2) AVAILABILITY.—Any funds transferred under this subsection shall remain available until expended, without fiscal 

year limitation. 

(3) REVIEWABILITY.—The action of any officer, employee, or 

agent of the Secretary in carrying out this section (including determining the amount of and making any payment authorized 

to be made under this subtitle) shall not be subject to review of 

longer than 60 days by any officer or employee of the Federal 

Government other than the Secretary or the designee of the Secretary. 

(c) USE OF FUNDS.—In carrying out this subtitle, the Secretary 

may use funds made available to carry out this subtitle for—

(1) the employment of civilian nationals in foreign countries; and 

(2) the construction and operation of research laboratories, 

quarantine stations, and other buildings and facilities for special purposes. 

SEC. 10418. REPEALS AND CONFORMING AMENDMENTS. 

(a) REPEALS.—The following provisions of law are repealed: 

(1) Public Law 97–46 (7 U.S.C. 147b). 

(2) Section 101(b) of the Act of September 21, 1944 (7 

U.S.C. 429). 

(3) The Act of August 28, 1950 (7 U.S.C. 2260). 

(4) Section 919 of the Federal Agriculture Improvement and 

Reform Act of 1996 (7 U.S.C. 2260a). 

(5) Section 306 of the Tariff Act of 1930 (19 U.S.C. 1306). 

(6) Sections 6 through 8 and 10 of the Act of August 30, 

1890 (21 U.S.C. 102 through 105). 

(7) The Act of February 2, 1903 (21 U.S.C. 111, 120 

through 122). 

(8) Sections 2 through 9, 11, and 13 of the Act of May 29, 

1884 (21 U.S.C. 112, 113, 114, 114a, 114a–1, 115 through 120, 

130). 

(9) The first section and sections 2, 3, and 5 of the Act of 

February 28, 1947 (21 U.S.C. 114b, 114c, 114d, 114d–1). 

(10) The Act of June 16, 1948 (21 U.S.C. 114e, 114f). 

(11) Public Law 87–209 (21 U.S.C. 114g, 114h). 

(12) The third and fourth provisos of the fourth paragraph 

under the heading ‘‘BUREAU OF ANIMAL INDUSTRY’’ of the Act of 

May 31, 1920 (21 U.S.C. 116). 

(13) The first section and sections 2, 3, 4, and 6 of the Act 

of March 3, 1905 (21 U.S.C. 123 through 127). 

(14) The first proviso under the heading ‘‘GENERAL EXPENSES, BUREAU OF ANIMAL INDUSTRY’’ under the heading 

‘‘BUREAU OF ANIMAL INDUSTRY’’ of the Act of June 30, 

1914 (21 U.S.C. 128). 

(15) The fourth proviso under the heading ‘‘SALARIES AND

EXPENSES’’ under the heading ‘‘ANIMAL AND PLANT HEALTH INSPECTION SERVICE’’ of title I of the Agriculture, Rural DevelopVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00384 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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ment, Food and Drug Administration, and Related Agencies 

Appropriations Act, 2001 (21 U.S.C. 129). 

(16) The third paragraph under the heading ‘‘MISCELLANEOUS’’ of the Act of May 26, 1910 (21 U.S.C. 131). 

(17) The first section and sections 2 through 6 and 11 

through 13 of Public Law 87–518 (21 U.S.C. 134 through 

134h). 

(18) Public Law 91–239 (21 U.S.C. 135 through 135b). 

(19) Sections 12 through 14 of the Federal Meat Inspection 

Act (21 U.S.C. 612 through 614). 

(20) Chapter 39 of title 46, United States Code. 

(b) CONFORMING AMENDMENTS.— (1) Section 414(b) of the Plant Protection Act (7 U.S.C. 

7714(b)) is amended— (A) in paragraph (1), by striking ‘‘, or the owner’s 

agent,’’; and 

(B) in paragraph (2), by striking ‘‘or agent of the 

owner’’ each place it appears. 

(2) Section 423 of the Plant Protection Act (7 U.S.C. 7733) 

is amended— (A) by striking subsection (b) and inserting the following: ‘‘(b) LOCATION OF PRODUCTION.—The attendance of any witness 

and production of documentary evidence relevant to the inquiry may 

be required from any place in the United States.’’; 

(B) in the third sentence of subsection (e), by inserting ‘‘to an agency other than the Office of Administrative Law 

Judges’’ after ‘‘is delegated’’; and 

(C) by striking subsection (f). 

(3) Section 11(h) of the Endangered Species Act of 1973 (16 

U.S.C. 1540(h)) is amended in the first sentence by striking 

‘‘animal quarantine laws (21 U.S.C. 101–105, 111–135b, and 

612–614)’’ and inserting ‘‘animal quarantine laws (as defined in 

section 2509(f) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (21 U.S.C. 136a(f))’’. 

(4) Section 18 of the Federal Meat Inspection Act (21 U.S.C. 

618) is amended by striking ‘‘of the cattle’’ and all that follows 

through ‘‘as herein described’’ and inserting ‘‘of the carcasses 

and products of cattle, sheep, swine, goats, horses, mules, and 

other equines’’. 

(5) Section 2509 of the Food, Agriculture, Conservation, 

and Trade Act of 1990 (21 U.S.C. 136a) is amended—

(A) in subsection (c), by inserting after paragraph (1) 

the following: 

‘‘(2) VETERINARY DIAGNOSTICS.—The Secretary may prescribe and collect fees to recover the costs of carrying out the 

provisions of the Animal Health Protection Act that relate to 

veterinary diagnostics.’’; and 

(B) in subsection (f)(1), by striking subparagraphs (B) 

through (O) and inserting the following: ‘‘(B) section 9 of the Act of August 30, 1890 (21 U.S.C. 

101); ‘‘(C) the Animal Health Protection Act; or 

‘‘(D) any other Act administered by the Secretary relating to plant or animal diseases or pests.’’. 

382

(c) EFFECT ON REGULATIONS.—A regulation issued under a provision of law repealed by subsection (a) shall remain in effect until 

the Secretary issues a regulation under section 10404(b) or 10416 

that supersedes the earlier regulation. 

Subtitle F—Livestock 

SEC. 10501. TRANSPORTATION OF POULTRY AND OTHER ANIMALS. 

Section 5402(d)(2) of title 39, United States Code, is amended— (1) in subparagraph (A), by inserting ‘‘, honeybees,’’ after ‘‘poultry’’; and 

(2) by striking subparagraph (C). 

SEC. 10502. SWINE CONTRACTORS. 

(a) DEFINITIONS.—Section 2(a) of the Packers and Stockyards 

Act, 1921 (7 U.S.C. 182(a)), is amended by adding at the end the 

following: ‘‘(12) SWINE CONTRACTOR.—The term ‘swine contractor’ means any person engaged in the business of obtaining swine 

under a swine production contract for the purpose of slaughtering the swine or selling the swine for slaughter, if— ‘‘(A) the swine is obtained by the person in commerce; 

or ‘‘(B) the swine (including products from the swine) obtained by the person is sold or shipped in commerce. 

‘‘(13) SWINE PRODUCTION CONTRACT.—The term ‘swine production contract’ means any growout contract or other arrangement under which a swine production contract grower raises 

and cares for the swine in accordance with the instructions of 

another person. ‘‘(14) SWINE PRODUCTION CONTRACT GROWER.—The term ‘swine production contract grower’ means any person engaged 

in the business of raising and caring for swine in accordance 

with the instructions of another person.’’. (b) SWINE CONTRACTORS.— (1) IN GENERAL.—The Packers and Stockyards Act, 1921, is 

amended by striking ‘‘packer’’ each place it appears in sections 

202, 203, 204, and 205 (7 U.S.C. 192, 193, 194, 195) (other 

than section 202(c)) and inserting ‘‘packer or swine contractor’’. (2) CONFORMING AMENDMENTS.— (A) Section 202(c) of the Packers and Stockyards Act, 

1921 (7 U.S.C. 192(c)), is amended by inserting ‘‘, swine 

contractor,’’ after ‘‘other packer’’ each place it appears. 

(B) Section 308(a) of the Packers and Stockyards Act, 

1921 (7 U.S.C. 209(a)), is amended by inserting ‘‘or swine 

production contract’’ after ‘‘poultry growing arrangement’’. (C) Sections 401 and 403 of the Packers and Stockyards Act, 1921 (7 U.S.C. 221, 223), are amended by inserting ‘‘any swine contractor, and’’ after ‘‘packer,’’ each place 

it appears. 

SEC. 10503. RIGHT TO DISCUSS TERMS OF CONTRACT. 

(a) DEFINITIONS.—In this section: 

(1) PRODUCER.—The term ‘‘producer’’ means any person engaged in the raising and caring for livestock or poultry for 

slaughter. 

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(2) PROCESSOR.—The term ‘‘processor’’ means any person 

engaged in the business of obtaining livestock or poultry for the 

purpose of slaughtering the livestock or poultry. 

(b) NO PROHIBITION OF DISCUSSION.—Notwithstanding a provision in any contract between a producer and a processor for the production of livestock or poultry, or in any marketing agreement between a producer and a processor for the sale of livestock or poultry 

for a term of 1 year or more, that provides that information contained in the contract is confidential, a party to the contract shall 

not be prohibited from discussing any terms or details of the contract with—

(1) a Federal or State agency; 

(2) a legal adviser to the party; 

(3) a lender to the party; 

(4) an accountant hired by the party; 

(5) an executive or manager of the party; 

(6) a landlord of the party; or 

(7) a member of the immediate family of the party. 

(c) EFFECT ON STATE LAWS.—Subsection (b) does not— (1) preempt any State law that addresses confidentiality 

provisions in contracts for the sale or production of livestock or 

poultry, except any provision of State law that makes lawful a 

contract provision that prohibits a party from, or limits a party 

in, engaging in discussion that subsection (b) requires to be permitted; or 

(2) deprive any State court of jurisdiction under any such 

State law. 

(d) APPLICABILITY.—This section applies to each contract described in subsection (b) that is entered into, amended, renewed, or 

extended after the date of enactment of this Act. 

SEC. 10504. VETERINARY TRAINING. 

The Secretary of Agriculture may develop a program to maintain in all regions of the United States a sufficient number of Federal and State veterinarians who are well trained in recognition 

and diagnosis of exotic and endemic animal diseases. 

SEC. 10505. PSEUDORABIES ERADICATION PROGRAM. 

Section 2506(d) of the Food, Agriculture, Conservation, and 

Trade Act of 1990 (21 U.S.C. 114i(d)) is amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

Subtitle G—Specialty Crops 

SEC. 10601. MARKETING ORDERS FOR CANEBERRIES. 

(a) IN GENERAL.—Section 8c of the Agricultural Adjustment Act 

(7 U.S.C. 608c), reenacted with amendments by the Agricultural 

Marketing Agreement Act of 1937, is amended— (1) in subsection (2)(A), by inserting ‘‘caneberries (including 

raspberries, blackberries, and loganberries),’’ after ‘‘other than 

pears, olives, grapefruit, cherries,’’; and 

(2) in subsection (6)(I), by striking ‘‘tomatoes,,’’ and inserting ‘‘tomatoes, caneberries (including raspberries, blackberries, 

and loganberries),’’. (b) CONFORMING AMENDMENT.—Section 8e(a) of the Agricultural Adjustment Act (7 U.S.C. 608e–l(a)), reenacted with amendVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00387 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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ments by the Agricultural Marketing Agreement Act of 1937, is 

amended in the first sentence by striking ‘‘or apples’’ and inserting 

‘‘apples, or caneberries (including raspberries, blackberries, and loganberries)’’. 

SEC. 10602. AVAILABILITY OF SECTION 32 FUNDS. 

The second undesignated paragraph of section 32 of the Act of 

August 24, 1935 (7 U.S.C. 612c), is amended by striking 

‘‘$300,000,000’’ and inserting ‘‘$500,000,000’’. 

SEC. 10603. PURCHASE OF SPECIALTY CROPS. 

(a) GENERAL PURCHASE AUTHORITY.—Of the funds made available under section 32 of the Act of August 24, 1935 (7 U.S.C. 612c), 

for fiscal year 2002 and each subsequent fiscal year, the Secretary 

of Agriculture shall use not less than $200,000,000 each fiscal year 

to purchase fruits, vegetables, and other specialty food crops. 

(b) PURCHASE AUTHORITY.—

(1) PURCHASE.—Of the amount specified in subsection (a), 

the Secretary of Agriculture shall use not less than $50,000,000 

each fiscal year for the purchase of fresh fruits and vegetables 

for distribution to schools and service institutions in accordance 

with section 6(a) of the Richard B. Russell National School 

Lunch Act (42 U.S.C. 1755(a)). 

(2) SERVICING AGENCY.—The Secretary of Agriculture shall 

provide for the Secretary of Defense to serve as the servicing 

agency for the procurement of the fresh fruits and vegetables 

under this subsection on the same terms and conditions as provided in the memorandum of agreement entered into between 

the Agricultural Marketing Service, the Food and Consumer 

Service, and the Defense Personnel Support Center during August 1995 (or any successor memorandum of agreement). 

(c) DEFINITIONS.—In this section, the terms ‘‘fruits’’, ‘‘vegetables’’, and ‘‘other specialty food crops’’ shall have the meaning given 

the terms by the Secretary of Agriculture. 

SEC. 10604. PROTECTION FOR PURCHASERS OF FARM PRODUCTS. 

(a) DEFINITION OF EFFECTIVE FINANCING STATEMENT.—Section 

1324(c)(4) of the Food Security Act of 1985 (7 U.S.C. 1631(c)(4)) is 

amended—

(1) in subparagraph (B), by striking ‘‘signed’’ and inserting 

‘‘signed, authorized, or otherwise authenticated by the debtor,’’; 

(2) by striking subparagraph (C); 

(3) in subparagraph (D)—

(A) in clause (iii), by adding ‘‘and’’ after the semicolon 

at the end; and 

(B) in clause (iv), by striking ‘‘applicable;’’ and all that 

follows and inserting ‘‘applicable, and the name of each 

county or parish in which the farm products are produced 

or located;’’; 

(4) in subparagraph (E), by striking ‘‘signed’’ and inserting 

‘‘signed, authorized, or otherwise authenticated by the debtor’’; 

(5) in subparagraph (G), by striking ‘‘notice signed’’ and inserting ‘‘notice signed, authorized, or otherwise authenticated’’; 

and 

(6) by redesignating subparagraphs (D) through (I) as subparagraphs (C) through (H), respectively. 

385

(b) PURCHASES SUBJECT TO SECURITY INTERESTS.—Section 

1324(e) of the Food Security Act of 1985 (7 U.S.C. 1631(e)) is 

amended—

(1) in paragraph (1)(A)(ii)—

(A) in subclause (III), by adding ‘‘and’’ after the semicolon at the end; and 

(B) in subclause (IV), by striking ‘‘crop year,’’ and all 

that follows and inserting ‘‘crop year, and the name of each 

county or parish in which the farm products are produced 

or located;’’; 

(2) in paragraph (1)(A)(iii), by striking ‘‘similarly signed’’

and inserting ‘‘similarly signed, authorized, or otherwise authenticated’’; 

(3) in paragraph (1)(A)(iv), by striking ‘‘notice signed’’ and 

inserting ‘‘notice signed, authorized, or otherwise authenticated’’; 

(4) in paragraph (1)(A)(v), by inserting ‘‘contains’’ before 

‘‘any payment’’; and

(5) in paragraph (3)—

(A) in subparagraph (A), by striking ‘‘subparagraph’’

and inserting ‘‘subsection’’; and 

(B) in subparagraph (B), by striking ‘‘; and’’ and inserting a period. 

(c) CERTAIN SALES SUBJECT TO SECURITY INTEREST.—Section 

1324(g)(2)(A) of the Food Security Act of 1985 (7 U.S.C. 

1631(g)(2)(A)) is amended—

(1) in clause (ii)—

(A) in subclause (III), by adding ‘‘and’’ after the semicolon at the end; and 

(B) in subclause (IV), by striking ‘‘crop year,’’ and all 

that follows and inserting ‘‘crop year, and the name of each 

county or parish in which the farm products are produced 

or located;’’; 

(2) in clause (iii), by striking ‘‘similarly signed’’ and inserting ‘‘similarly signed, authorized, or otherwise authenticated’’; 

(3) in clause (iv), by striking ‘‘notice signed’’ and inserting 

‘‘notice signed, authorized, or otherwise authenticated’’; and 

(4) in clause (v), by inserting ‘‘contains’’ before ‘‘any payment’’. 

SEC. 10605. FARMERS’ MARKET PROMOTION PROGRAM. 

(a) IN GENERAL.—The Farmer-to-Consumer Direct Marketing 

Act of 1976 is amended by inserting after section 5 (7 U.S.C. 3004) 

the following: 

‘‘SEC. 6. FARMERS’ MARKET PROMOTION PROGRAM. 

‘‘(a) ESTABLISHMENT.—The Secretary shall carry out a program, to be known as the ‘Farmers’ Market Promotion Program’ (referred to in this section as the ‘Program’), to make grants to eligible 

entities for projects to establish, expand, and promote farmers’ markets. 

‘‘(b) PROGRAM PURPOSES.—

‘‘(1) IN GENERAL.—The purposes of the Program are—

‘‘(A) to increase domestic consumption of agricultural 

commodities by improving and expanding, or assisting in 

the improvement and expansion of, domestic farmers’ marVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00389 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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kets, roadside stands, community-supported agriculture 

programs, and other direct producer-to-consumer market 

opportunities; and ‘‘(B) to develop, or aid in the development of, new farmers’ markets, roadside stands, community-supported agriculture programs, and other direct producer-to-consumer 

infrastructure. 

‘‘(2) LIMITATIONS.—An eligible entity may not use a grant 

or other assistance provided under the Program for the purchase, construction, or rehabilitation of a building or structure. 

‘‘(c) ELIGIBLE ENTITIES.—An entity shall be eligible to receive a 

grant under the Program if the entity is— ‘‘(1) an agricultural cooperative; 

‘‘(2) a local government; 

‘‘(3) a nonprofit corporation; 

‘‘(4) a public benefit corporation; 

‘‘(5) an economic development corporation; 

‘‘(6) a regional farmers’ market authority; or ‘‘(7) such other entity as the Secretary may designate. ‘‘(d) CRITERIA AND GUIDELINES.—The Secretary shall establish 

criteria and guidelines for the submission, evaluation, and funding 

of proposed projects under the Program. ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007.’’. (b) TECHNICAL AND CONFORMING AMENDMENTS.— (1) SURVEY.—Section 4 of the Farmer-to-Consumer Direct 

Marketing Act of 1976 (7 U.S.C. 3003) is amended— (A) in the first sentence, by striking ‘‘a continuing’’ and 

inserting ‘‘an annual’’; and 

(B) by striking the second sentence. 

(2) DIRECT MARKETING ASSISTANCE.—Section 5 of the 

Farmer-to-Consumer Direct Marketing Act of 1976 (7 U.S.C. 

3004) is amended— (A) in subsection (a)— (i) in the first sentence, by striking ‘‘Extension 

Service of the United States Department of Agriculture’’ and inserting ‘‘Secretary’’; and 

(ii) in the second sentence— (I) by striking ‘‘Extension Service’’ and inserting ‘‘Secretary’’; and 

(II) by striking ‘‘and on the basis of which of 

these two agencies, or combination thereof, can 

best perform these activities’’ and inserting ‘‘, as 

determined by the Secretary’’; 

(B) by redesignating subsection (b) as subsection (c); 

and 

(C) by inserting after subsection (a) the following: ‘‘(b) DEVELOPMENT OF FARMERS’ MARKETS.—The Secretary 

shall— ‘‘(1) work with the Governor of a State, and a State agency 

designated by the Governor, to develop programs to train managers of farmers’ markets; ‘‘(2) develop opportunities to share information among managers of farmers’ markets; 

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‘‘(3) establish a program to train cooperative extension service employees in the development of direct marketing techniques; and 

‘‘(4) work with producers to develop farmers’ markets.’’. 

SEC. 10606. NATIONAL ORGANIC CERTIFICATION COST-SHARE PROGRAM. 

(a) IN GENERAL.—Of funds of the Commodity Credit Corporation, the Secretary of Agriculture (acting through the Agricultural 

Marketing Service) shall use $5,000,000 for fiscal year 2002, to remain available until expended, to establish a national organic certification cost-share program to assist producers and handlers of agricultural products in obtaining certification under the national organic production program established under the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq.). 

(b) FEDERAL SHARE.—

(1) IN GENERAL.—Subject to paragraph (2), the Secretary 

shall pay under this section not more than 75 percent of the 

costs incurred by a producer or handler in obtaining certification under the national organic production program, as certified to and approved by the Secretary. 

(2) MAXIMUM AMOUNT.—The maximum amount of a payment made to a producer or handler under this section shall be 

$500. 

SEC. 10607. EXEMPTION OF CERTIFIED ORGANIC PRODUCTS FROM ASSESSMENTS. 

(a) IN GENERAL.—Section 501 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7401) is amended by 

adding at the end the following: 

‘‘(e) EXEMPTION OF CERTIFIED ORGANIC PRODUCTS FROM ASSESSMENTS.—

‘‘(1) IN GENERAL.—Notwithstanding any provision of a commodity promotion law, a person that produces and markets 

solely 100 percent organic products, and that does not produce 

any conventional or nonorganic products, shall be exempt from 

the payment of an assessment under a commodity promotion 

law with respect to any agricultural commodity that is produced on a certified organic farm (as defined in section 2103 of 

the Organic Foods Production Act of 1990 (7 U.S.C. 6502)). 

‘‘(2) REGULATIONS.—Not later than 1 year after the date of 

enactment of this subsection, the Secretary shall promulgate 

regulations concerning eligibility and compliance for an exemption under paragraph (1).’’. (b) TECHNICAL AMENDMENTS.—Section 501(a) of the Federal 

Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7401(a)) 

is amended—

(1) in paragraph (17), by striking ‘‘or’’; 

(2) in paragraph (18), by striking the period and inserting 

‘‘; or’’; and 

(3) by adding at the end the following: 

‘‘(19) any other provision of law enacted after April 4, 1996, 

that provides for the establishment and operation of a promotion program described in the first sentence.’’. 

SEC. 10608. CRANBERRY ACREAGE RESERVE PROGRAM. 

(a) DEFINITIONS.—In this section: 

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(1) ELIGIBLE AREA.—The term ‘‘eligible area’’ means a wetland or buffer strip adjacent to a wetland that, as determined 

by the Secretary—

(A)(i) is used, and has a history of being used, for the 

cultivation of cranberries; or 

(ii) is an integral component of a cranberry-growing 

operation; 

(B) is located in an environmentally sensitive area. 

(2) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Agriculture. 

(b) PROGRAM.—The Secretary shall establish a program to purchase permanent easements in eligible areas from willing sellers. 

(c) PURCHASE PRICE.—The Secretary shall ensure, to the maximum extent practicable, that each easement purchased under this 

section is for an amount that appropriately reflects the range of values for agricultural and nonagricultural land in the region in 

which the eligible area subject to the easement is located (including 

whether that land is located in 1 or more environmentally sensitive 

areas, as determined by the Secretary). 

(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $10,000,000. 

Subtitle H—Administration 

SEC. 10701. INITIAL RATE OF BASIC PAY FOR EMPLOYEES OF COUNTY 

COMMITTEES. 

Section 5334 of title 5, United States Code, is amended by striking subsection (e) and inserting the following: 

‘‘(e) An employee of a county committee established pursuant to 

section 8(b) of the Soil Conservation and Domestic Allotment Act (16 

U.S.C. 590h(b)) may, on appointment to a position subject to this 

subchapter, have the initial rate of basic pay of the employee fixed 

at—

‘‘(1) the lowest rate of the higher grade that exceeds the rate 

of basic pay of the employee with the county committee by not 

less than 2 step-increases of the grade from which the employee 

was promoted, if the Federal Civil Service position under this 

subchapter is at a higher grade than the last grade the employee had while an employee of the county committee; 

‘‘(2) the same step of the grade as the employee last held 

during service with the county committee, if the Federal Civil 

Service position under this subchapter is at the same grade as 

the last grade the employee had while an employee of the county 

committee; or 

‘‘(3) the lowest step of the Federal grade for which the rate 

of basic pay is equal to or greater than the highest previous rate 

of pay of the employee, if the Federal Civil Service position 

under this subchapter is at a lower grade than the last grade 

the employee had while an employee of the county committee.’’. 

SEC. 10702. COMMODITY FUTURES TRADING COMMISSION PAY COMPARABILITY. 

(a) APPOINTMENT AND COMPENSATION OF EMPLOYEES OF THE

COMMISSION.—Section 2(a) of the Commodity Exchange Act (7 

U.S.C. 2(a)) is amended—

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(1) by redesignating paragraphs (7) through (11) as paragraphs (8) through (12), respectively; and 

(2) by inserting after paragraph (6) the following: 

‘‘(7) APPOINTMENT AND COMPENSATION.— ‘‘(A) IN GENERAL.—The Commission may appoint and 

fix the compensation of such officers, attorneys, economists, 

examiners, and other employees as may be necessary for 

carrying out the functions of the Commission under this 

Act. ‘‘(B) RATES OF PAY.—Rates of basic pay for all employees of the Commission may be set and adjusted by the Commission without regard to chapter 51 or subchapter III of 

chapter 53 of title 5, United States Code. ‘‘(C) COMPARABILITY.— ‘‘(i) IN GENERAL.—The Commission may provide 

additional compensation and benefits to employees of 

the Commission if the same type of compensation or 

benefits are provided by any agency referred to in section 1206(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 

1833b(a)) or could be provided by such an agency 

under applicable provisions of law (including rules 

and regulations). ‘‘(ii) CONSULTATION.—In setting and adjusting the 

total amount of compensation and benefits for employees, the Commission shall consult with, and seek to 

maintain comparability with, the agencies referred to 

in section 1206(a) of the Financial Institutions Reform, 

Recovery, and Enforcement Act of 1989 (12 U.S.C. 

1833b(a)).’’. (b) REPORTING OF INFORMATION BY THE COMMISSION.—Section 

1206 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b) is amended— (1) by striking ‘‘The Federal’’ and inserting the following: 

‘‘(a) IN GENERAL.—The Federal’’; and 

(2) by adding at the end the following: ‘‘(b) COMMODITY FUTURES TRADING COMMISSION.—In establishing and adjusting schedules of compensation and benefits for 

employees of the Commodity Futures Trading Commission under 

applicable provisions of law, the Commission shall— ‘‘(1) inform the heads of the agencies referred to in subsection (a) and Congress of such compensation and benefits; 

and ‘‘(2) seek to maintain comparability with those agencies regarding compensation and benefits.’’. (c) CONFORMING AMENDMENTS.—

(1) Section 3132(a)(1) of title 5, United States Code, is 

amended—

(A) in subparagraph (C), by striking ‘‘or’’ at the end; 

(B) in subparagraph (D), by adding ‘‘or’’ at the end; 

and 

(C) by adding at the end the following: 

‘‘(E) the Commodity Futures Trading Commission;’’. (2) Section 5316 of title 5, United States Code, is amended—

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(A) by striking ‘‘General Counsel, Commodity Futures 

Trading Commission.’’; and 

(B) by striking ‘‘Executive Director, Commodity Futures 

Trading Commission.’’. 

(3) Section 5373(a) of title 5, United States Code, is amended—

(A) in paragraph (2), by striking ‘‘or’’ at the end; 

(B) in paragraph (3), by striking the period at the end 

and inserting ‘‘; or’’; and 

(C) by adding at the end the following: 

‘‘(4) section 2(a)(7) of the Commodity Exchange Act (7 

U.S.C. 2(a)(7)).’’.

SEC. 10703. OVERTIME AND HOLIDAY PAY. 

(a) IN GENERAL.—The Secretary of Agriculture may—

(1) pay employees of the Department of Agriculture employed in an establishment subject to the Federal Meat Inspection Act (21 U.S.C. 601 et seq.) or the Poultry Products Inspection Act (21 U.S.C. 451 et seq.) for all overtime and holiday 

work performed at the establishment at rates determined by the 

Secretary, subject to applicable law relating to minimum wages 

and maximum hours; and 

(2) accept from the establishment reimbursement for any 

sums paid by the Secretary for the overtime and holiday work, 

at rates determined under paragraph (1). 

(b) AVAILABILITY.—Sums received by the Secretary under this 

section shall remain available until expended without further appropriation and without fiscal year limitation, to carry out subsection (a). 

(c) CONFORMING AMENDMENTS.—

(1) Section 25 of the Poultry Products Inspection Act (21 

U.S.C. 468) is amended by striking ‘‘except that the cost’’ and 

all that follows and inserting ‘‘except the cost of overtime and 

holiday pay paid pursuant to the section 10703 of the Farm Security and Rural Investment Act of 2002.’’. 

(2) The Act of June 5, 1948 (21 U.S.C. 695), is amended by 

striking ‘‘overtime’’ and all that follows and inserting ‘‘overtime 

and holiday pay paid pursuant to section 10703 of the Farm 

Security and Rural Investment Act of 2002.’’. 

(3) The matter under the heading ‘‘BUREAU OF ANIMAL INDUSTRY’’ of the Act of July 24, 1919, is amended by striking the 

next to the last paragraph (7 U.S.C. 394). 

(4) Section 5549 of title 5, United States Code is amended 

by striking paragraph (1) and inserting the following: 

‘‘(1) section 10703 of the Farm Security and Rural Investment Act of 2002;’’. 

SEC. 10704. ASSISTANT SECRETARY OF AGRICULTURE FOR CIVIL 

RIGHTS. 

(a) IN GENERAL.—Section 218 of the Department of Agriculture 

Reorganization Act of 1994 (7 U.S.C. 6918) is amended— (1) in subsection (a)— (A) in paragraph (1), by striking ‘‘and’’ at the end; 

(B) in paragraph (2), by striking the period at the end 

and inserting ‘‘; and’’; and 

(C) by adding at the end the following: 

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‘‘(3) Assistant Secretary of Agriculture for Civil Rights.’’; 

and 

(2) by striking subsections (d) and (e) and inserting the following: 

‘‘(d) DUTIES OF ASSISTANT SECRETARY OF AGRICULTURE FOR

CIVIL RIGHTS.—The Secretary may delegate to the Assistant Secretary for Civil Rights responsibility for—

‘‘(1) ensuring compliance with all civil rights and related 

laws by all agencies and under all programs of the Department; 

‘‘(2) coordinating administration of civil rights laws (including regulations) within the Department for employees of, 

and participants in, programs of the Department; and 

‘‘(3) ensuring that necessary and appropriate civil rights 

components are properly incorporated into all strategic planning initiatives of the Department and agencies of the Department.’’. 

(b) COMPENSATION.—Section 5315 of title 5, United States 

Code, is amended by striking ‘‘Assistant Secretaries of Agriculture 

(2)’’ and inserting ‘‘Assistant Secretaries of Agriculture (3)’’. 

(c) CONFORMING AMENDMENTS.—Section 296(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 7014(b)) 

is amended—

(1) in paragraph (3), by striking ‘‘or’’ at the end; 

(2) in paragraph (4), by striking the period at the end and 

inserting ‘‘; or’’; and 

(3) by adding at the end the following: 

‘‘(5) the authority of the Secretary to establish within the 

Department the position of Assistant Secretary of Agriculture 

for Civil Rights, and delegate duties to the Assistant Secretary, 

under section 218.’’. 

SEC. 10705. OPERATION OF GRADUATE SCHOOL OF DEPARTMENT OF 

AGRICULTURE. 

(a) AUDITS OF RECORDS.—Section 921 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 2279b) is 

amended by adding at the end the following: 

‘‘(k) AUDITS OF RECORDS.—The financial records of the Graduate School (including records relating to contracts or agreements 

entered into under subsection (c)) shall be made available to the 

Comptroller General for purposes of conducting an audit.’’. 

(b) CONFORMING REPEAL.—Section 1669 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5922) is repealed. 

(c) EFFECTIVE DATE.—The amendments made by this section 

take effect on October 1, 2002. 

SEC. 10706. IMPLEMENTATION FUNDING AND INFORMATION MANAGEMENT. 

(a) ADDITIONAL FUNDS FOR ADMINISTRATIVE COSTS.—

(1) IN GENERAL.—The Secretary of Agriculture, acting 

through the Farm Service Agency, may use not more than 

$55,000,000 of funds of the Commodity Credit Corporation to 

cover administrative costs associated with the implementation 

of title I and the amendments made by that title. 

(2) AVAILABILITY.—The funds referred to in paragraph (1) 

shall remain available to the Secretary until expended. 

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(3) SET-ASIDE.—Of the amount specified in paragraph (1), the Secretary shall use not less than $5,000,000, but not more 

than $8,000,000, to carry out subsection (b). 

(b) INFORMATION MANAGEMENT.— (1) DEVELOPMENT OF SYSTEM.—The Secretary of Agriculture shall develop a comprehensive information management 

system, using appropriate technologies, to be used in implementing the programs administered by the Federal Crop Insurance Corporation and the Farm Service Agency. 

(2) ELEMENTS.—The information management system developed under this subsection shall be designed to— (A) improve access by agricultural producers to programs described in paragraph (1); 

(B) improve and protect the integrity of the information 

collected; 

(C) meet the needs of the agencies that require the data 

in the administration of their programs; 

(D) improve the timeliness of the collection of the information; 

(E) contribute to the elimination of duplication of information collection; 

(F) lower the overall cost to the Department of Agriculture for information collection; and 

(G) achieve such other goals as the Secretary considers 

appropriate. 

(3) RECONCILIATION OF CURRENT INFORMATION MANAGE- MENT.—The Secretary shall ensure that all current information 

of the Federal Crop Insurance Corporation and the Farm Service Agency is combined, reconciled, redefined, and reformatted 

in such a manner so that the agencies can use the common information management system developed under this subsection. 

(4) ASSISTANCE FOR DEVELOPMENT OF SYSTEM.—The Secretary shall enter into an agreement or contract with a non-Federal entity to assist the Secretary in the development of the information management system. The Secretary shall give preference in entering into an agreement or contract to entities that 

have— (A) prior experience with the information and management systems of the Federal Crop Insurance Corporation; 

and 

(B) collaborated with the Corporation in the development of the identification procedures required by section 

515(f) of the Federal Crop Insurance Act (7 U.S.C. 1515(f)). 

(5) USE.—The information collected using the information 

management system developed under this subsection may be 

made available to—

(A) any Federal agency that requires the information to 

carry out the functions of the agency; and 

(B) any approved insurance provider, as defined in section 502(b) of the Federal Crop Insurance Act (7 U.S.C. 

1502(b)), with respect to producers insured by the approved 

insurance provider. 

(6) RELATION TO OTHER ACTIVITIES.—This subsection shall 

not interfere with, or delay, existing agreements or requests for 

proposals of the Federal Crop Insurance Corporation or the 

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Farm Service Agency regarding the information management 

activities known as data mining or data warehousing. 

(c) AUTHORIZATION OF APPROPRIATIONS.—In addition to 

amounts made available under subsection (a)(3), there are authorized to be appropriated such sums as are necessary to carry out subsection (b) for each of fiscal years 2003 through 2008.

SEC. 10707. OUTREACH AND ASSISTANCE FOR SOCIALLY DISADVANTAGED FARMERS AND RANCHERS. 

(a) DEFINITIONS.—Section 2501(e) of the Food, Agriculture, 

Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)) is amended 

by adding at the end the following: ‘‘(4) DEPARTMENT.—The term ‘Department’ means the Department of Agriculture. ‘‘(5) ELIGIBLE ENTITY.—The term ‘eligible entity’ means any 

of the following: ‘‘(A) Any community-based organization, network, or 

coalition of community-based organizations that— ‘‘(i) has demonstrated experience in providing agricultural education or other agriculturally related services to socially disadvantaged farmers and ranchers; ‘‘(ii) has provided to the Secretary documentary 

evidence of work with socially disadvantaged farmers 

and ranchers during the 2-year period preceding the 

submission of an application for assistance under subsection (a); and ‘‘(iii) does not engage in activities prohibited under 

section 501(c)(3) of the Internal Revenue Code of 1986. 

‘‘(B) An 1890 institution or 1994 institution (as defined 

in section 2 of the Agricultural Research, Extension, and 

Education Reform Act of 1998 (7 U.S.C. 7601)), including 

West Virginia State College. ‘‘(C) An Indian tribal community college or an Alaska 

Native cooperative college. ‘‘(D) An Hispanic-serving institution (as defined in section 1404 of the National Agricultural Research, Extension, 

and Teaching Policy Act of 1977 (7 U.S.C. 3103)). 

‘‘(E) Any other institution of higher education (as defined in section 101 of the Higher Education Act of 1965 

(20 U.S.C. 1001)) that has demonstrated experience in providing agriculture education or other agriculturally related 

services to socially disadvantaged farmers and ranchers in 

a region. 

‘‘(F) An Indian tribe (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 

U.S.C. 450b)) or a national tribal organization that has 

demonstrated experience in providing agriculture education 

or other agriculturally related services to socially disadvantaged farmers and ranchers in a region. 

‘‘(G) An organization or institution that received funding under subsection (a) before January 1, 1996, but only 

with respect to projects that the Secretary considers are 

similar to projects previously carried out by the organization or institution under such subsection. 

‘‘(6) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Agriculture.’’. 

394

(b) OUTREACH AND ASSISTANCE.—Section 2501 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279) is 

amended by striking subsection (a) and inserting the following: 

‘‘(a) OUTREACH AND ASSISTANCE.—

‘‘(1) PROGRAM.—The Secretary of Agriculture shall carry 

out an outreach and technical assistance program to encourage 

and assist socially disadvantaged farmers and ranchers—

‘‘(A) in owning and operating farms and ranches; and 

‘‘(B) in participating equitably in the full range of agricultural programs offered by the Department. 

‘‘(2) REQUIREMENTS.—The outreach and technical assistance program under paragraph (1) shall—

‘‘(A) enhance coordination of the outreach, technical assistance, and education efforts authorized under various 

agriculture programs; and 

‘‘(B) include information on, and assistance with—

‘‘(i) commodity, conservation, credit, rural, and 

business development programs; 

‘‘(ii) application and bidding procedures; 

‘‘(iii) farm and risk management; 

‘‘(iv) marketing; and 

‘‘(v) other activities essential to participation in agricultural and other programs of the Department. 

‘‘(3) GRANTS AND CONTRACTS.—

‘‘(A) IN GENERAL.—The Secretary may make grants to, 

and enter into contracts and other agreements with, an eligible entity to provide information and technical assistance 

under this subsection. 

‘‘(B) RELATIONSHIP TO OTHER LAW.—The authority to 

carry out this section shall be in addition to any other authority provided in this or any other Act. 

‘‘(C) OTHER PROJECTS.—Notwithstanding paragraph 

(1), the Secretary may make grants to, and enter into contracts and other agreements with, an organization or institution that received funding under this section before January 1, 1996, to carry out a project that is similar to a 

project for which the organization or institution received 

such funding. 

‘‘(4) FUNDING.—

‘‘(A) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection 

$25,000,000 for each of fiscal years 2002 through 2007. 

‘‘(B) INTERAGENCY FUNDING.—In addition to funds authorized to be appropriated under subparagraph (A), any 

agency of the Department may participate in any grant, 

contract, or agreement entered into under this subsection by 

contributing funds, if the agency determined that the objectives of the grant, contract, or agreement will further the 

authorized programs of the contributing agency.’’. 

(c) CONFORMING AMENDMENTS.—Section 2501 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279) is 

amended—

(1) in subsection (d)(1), by striking ‘‘of Agriculture’’ after 

‘‘Department’’; and 

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(2) in subsection (g)(1), by striking ‘‘of Agriculture’’ after ‘‘Department’’.

SEC. 10708. TRANSPARENCY AND ACCOUNTABILITY FOR SOCIALLY DISADVANTAGED FARMERS AND RANCHERS; PUBLIC DISCLOSURE REQUIREMENTS FOR COUNTY COMMITTEE ELECTIONS. 

(a) TRANSPARENCY AND ACCOUNTABILITY FOR SOCIALLY DIS- ADVANTAGED FARMERS AND RANCHERS.—The Food, Agriculture, 

Conservation, and Trade Act of 1990 is amended by inserting after 

section 2501 (7 U.S.C. 2279) the following: 

‘‘SEC. 2501A. TRANSPARENCY AND ACCOUNTABILITY FOR SOCIALLY 

DISADVANTAGED FARMERS AND RANCHERS. 

‘‘(a) PURPOSE.—The purpose of this section is to ensure compilation and public disclosure of data to assess and hold the Department of Agriculture accountable for the nondiscriminatory participation of socially disadvantaged farmers and ranchers in programs 

of the Department. ‘‘(b) DEFINITION OF SOCIALLY DISADVANTAGED FARMER OR

RANCHER.—In this section, the term ‘socially disadvantaged farmer 

or rancher’ has the meaning given the term in section 355(e) of the 

Consolidated Farm and Rural Development Act (7 U.S.C. 2003(e)). 

‘‘(c) COMPILATION OF PROGRAM PARTICIPATION DATA.—

‘‘(1) ANNUAL REQUIREMENT.—For each county and State in 

the United States, the Secretary shall compute annually the 

participation rate of socially disadvantaged farmers and ranchers as a percentage of the total participation of all farmers and 

ranchers for each program of the Department of Agriculture established for farmers or ranchers. 

‘‘(2) REPORTING PARTICIPATION.—In reporting the rates of 

participation under paragraph (1), the Secretary shall report 

the participation rate of socially disadvantaged farmers and 

ranchers according to race, ethnicity, and gender.’’. 

(b) PUBLIC DISCLOSURE REQUIREMENTS FOR COUNTY COMMITTEE ELECTIONS.—Section 8(b)(5) of the Soil Conservation and 

Domestic Allotment Act (16 U.S.C. 590h(b)(5)) is amended by striking subparagraph (B) and inserting the following: 

‘‘(B) ESTABLISHMENT AND ELECTIONS FOR COUNTY, 

AREA, OR LOCAL COMMITTEES.—

‘‘(i) ESTABLISHMENT.—

‘‘(I) IN GENERAL.—In each county or area in 

which activities are carried out under this section, 

the Secretary shall establish a county or area committee. ‘‘(II) LOCAL ADMINISTRATIVE AREAS.—The Secretary may designate local administrative areas 

within a county or a larger area under the jurisdiction of a committee established under subclause 

(I). 

‘‘(ii) COMPOSITION OF COUNTY, AREA, OR LOCAL

COMMITTEES.—A committee established under clause 

(i) shall consist of not fewer than 3 nor more than 5 

members that—

‘‘(I) are fairly representative of the agricultural 

producers within the area covered by the county, 

area, or local committee; and 

396

‘‘(II) are elected by the agricultural producers 

that participate or cooperate in programs administered within the area under the jurisdiction of the 

county, area, or local committee. 

‘‘(iii) ELECTIONS.— ‘‘(I) IN GENERAL.—Subject to subclauses (II) 

through (V), the Secretary shall establish procedures for nominations and elections to county, 

area, or local committees. ‘‘(II) NONDISCRIMINATION STATEMENT.—Each 

solicitation of nominations for, and notice of elections of, a county, area, or local committee shall 

include the nondiscrimination statement used by 

the Secretary. ‘‘(III) NOMINATIONS.— ‘‘(aa) ELIGIBILITY.—To be eligible for nomination and election to the applicable county, 

area, or local committee, as determined by the 

Secretary, an agricultural producer shall be 

located within the area under the jurisdiction 

of a county, area, or local committee, and participate or cooperate in programs administered 

within that area. ‘‘(bb) OUTREACH.—In addition to such 

nominating procedures as the Secretary may 

prescribe, the Secretary shall solicit and accept 

nominations from organizations representing 

the interests of socially disadvantaged groups 

(as defined in section 355(e)(1) of the Consolidated Farm and Rural Development Act (7 

U.S.C. 2003(e)(1)). 

‘‘(IV) OPENING OF BALLOTS.—

‘‘(aa) PUBLIC NOTICE.—At least 10 days 

before the date on which ballots are to be 

opened and counted, a county, area, or local 

committee shall announce the date, time, and 

place at which election ballots will be opened 

and counted. 

‘‘(bb) OPENING OF BALLOTS.—Election ballots shall not be opened until the date and 

time announced under item (aa). ‘‘(cc) OBSERVATION.—Any person may observe the opening and counting of the election 

ballots. 

‘‘(V) REPORT OF ELECTION.—Not later than 20 

days after the date on which an election is held, a 

county, area, or local committee shall file an election report with the Secretary and the State office 

of the Farm Service Agency that includes— ‘‘(aa) the number of eligible voters in the 

area covered by the county, area, or local committee; ‘‘(bb) the number of ballots cast in the 

election by eligible voters (including the percentage of eligible voters that cast ballots);

397

‘‘(cc) the number of ballots disqualified in 

the election; ‘‘(dd) the percentage that the number of 

ballots disqualified is of the number of ballots 

received; ‘‘(ee) the number of nominees for each seat 

up for election; ‘‘(ff) the race, ethnicity, and gender of each 

nominee, as provided through the voluntary 

self-identification of each nominee; and ‘‘(gg) the final election results (including 

the number of ballots received by each nominee). 

‘‘(VI) NATIONAL REPORT.—Not later than 90 

days after the date on which the first election of a 

county, area, or local committee that occurs after 

the date of enactment of the Farm Security and 

Rural Investment Act of 2002 is held, the Secretary 

shall complete a report that consolidates all the 

election data reported to the Secretary under subclause (V). ‘‘(VII) ELECTION REFORM.— ‘‘(aa) ANALYSIS.—If determined necessary 

by the Secretary after analyzing the data contained in the report under subclause (VI), the 

Secretary shall promulgate and publish in the 

Federal Register proposed uniform guidelines 

for conducting elections for members and alternate members of county, area, and local 

committees not later than 1 year after the date 

of completion of the report. ‘‘(bb) INCLUSION.—The procedures promulgated by the Secretary under item (aa) shall 

ensure fair representation of socially disadvantaged groups described in subclause 

(III)(bb) in an area covered by the county, 

area, or local committee, in cases in which 

those groups are underrepresented on the 

county, area, or local committee for that area. ‘‘(cc) METHODS OF INCLUSION.—Notwithstanding clause (ii), the Secretary may ensure 

inclusion of socially disadvantaged farmers 

and ranchers through provisions allowing for 

appointment of 1 additional voting member to 

a county, area, or local committee or through 

other methods. 

‘‘(iv) TERM OF OFFICE.—The term of office for a 

member of a county, area, or local committee shall not 

exceed 3 years. ‘‘(v) PUBLIC AVAILABILITY AND REPORT TO CON- GRESS.—

‘‘(I) PUBLIC DISCLOSURE.—The Secretary shall 

maintain and make readily available to the public, 

via website and otherwise in electronic and paper 

form, all data required to be collected and comVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00401 Fmt 6659 Sfmt 6603 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
398

puted under section 2501A(c) of the Food, Agriculture, Conservation, and Trade Act of 1990 and 

clause (iii)(V) collected annually since the most recent Census of Agriculture. 

‘‘(II) REPORT TO CONGRESS.—After each Census of Agriculture, the Secretary shall report to 

Congress the rate of loss or gain in participation 

by each socially disadvantaged group, by race, ethnicity, and gender, since the previous Census.’’. 

Subtitle I—General Provisions 

SEC. 10801. COTTON CLASSIFICATION SERVICES. 

(a) EXTENSION OF AUTHORITY TO PROVIDE SERVICES.—The first 

sentence of section 3a of the Act of March 3, 1927 (commonly known 

as the ‘‘Cotton Statistics and Estimates Act’’; 7 U.S.C. 473a), is 

amended by striking ‘‘2002’’ and inserting ‘‘2007’’. 

(b) REPEAL OF OBSOLETE EFFECTIVE DATE PROVISIONS.—

(1) 1984 AMENDMENT.—The first section of Public Law 98–

403 (98 Stat. 1479) is amended by striking ‘‘, effective for the 

period beginning October 1, 1984, and ending September 30, 

1988,’’. 

(2) 1987 AMENDMENTS.—Section 2 of the Uniform Cotton 

Classing Fees Act of 1987 (Public Law 100–108; 101 Stat. 728) 

is amended by striking ‘‘Effective for the period beginning on 

the date of enactment of this Act and ending September 30, 

1992, section’’ and inserting ‘‘Section’’. 

(3) 1991 AMENDMENTS.—Section 120 of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 

(Public Law 102–237; 105 Stat. 1842) is amended by striking 

subsection (e). 

SEC. 10802. PROGRAM OF PUBLIC EDUCATION REGARDING USE OF 

BIOTECHNOLOGY IN PRODUCING FOOD FOR HUMAN CONSUMPTION. 

(a) PUBLIC INFORMATION CAMPAIGN.—Not later than 1 year 

after the date of enactment of this Act, the Secretary of Agriculture 

shall develop and implement a program to communicate with the 

public regarding the use of biotechnology in producing food for 

human consumption. The information provided under the program 

shall include the following: 

(1) Science-based evidence on the safety of foods produced 

with biotechnology. 

(2) Scientific data on the human outcomes of the use of biotechnology to produce food for human consumption. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2002 through 2007. 

SEC. 10803. CHINO DAIRY PRESERVE PROJECT. 

Notwithstanding any other provision of law, the Secretary of 

Agriculture, acting through the Natural Resources Conservation 

Service, may provide financial and technical assistance to the Chino 

Dairy Preserve Project, San Bernadino County, California.

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SEC. 10804. GRAZINGLANDS RESEARCH LABORATORY. 

Notwithstanding any other provision of law, before December 

31, 2007, the Federal land and facilities at El Reno, Oklahoma, currently administered by the Secretary of Agriculture as the 

Grazinglands Research Laboratory shall not, without specific authorization by Congress—

(1) be declared to be excess or surplus under the Federal 

Property and Administrative Services Act of 1949 (40 U.S.C. 

471 et seq.); or 

(2) be conveyed or otherwise transferred in whole or in part. 

SEC. 10805. FOOD AND AGRICULTURAL POLICY RESEARCH INSTITUTE. 

(a) AUTHORITY.—The Secretary of Agriculture may award 

grants to the Food and Agricultural Policy Research Institute for 

the purpose of funding prospective, independent research on the effects of alternative domestic, foreign, and trade policies, on the agricultural sector, including research on the effects of those policies 

on—

(1) commodity prices for—

(A) feed; and 

(B) food grains, oilseeds, cotton, livestock, and products 

thereof; 

(2) supply and demand conditions for similar products; 

(3) costs to the Federal Government; 

(4) farm income; 

(5) food costs; 

(6) the volume and value of trade in agricultural commodities; and 

(7) exporter and importer supply, demand, and trade. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out this section $6,000,000 for each of 

fiscal years 2003 through 2007. 

SEC. 10806. MARKET NAMES FOR CATFISH AND GINSENG. 

(a) CATFISH LABELING.—

(1) IN GENERAL.—Notwithstanding any other provision of 

law, for purposes of the Federal Food, Drug, and Cosmetic Act 

(21 U.S.C. 301 et seq.)—

(A) the term ‘‘catfish’’ may only be considered to be a 

common or usual name (or part thereof) for fish classified 

within the family Ictaluridae; and 

(B) only labeling or advertising for fish classified within that family may include the term ‘‘catfish’’. 

(2) AMENDMENT.—Section 403 of the Federal Food, Drug, 

and Cosmetic Act (21 U.S.C. 343) is amended by adding at the 

end the following: 

‘‘(t) If it purports to be or is represented as catfish, unless it is 

fish classified within the family Ictaluridae.’’. 

(b) GINSENG LABELING.—

(1) IN GENERAL.—Notwithstanding any other provision of 

law, for purposes of the Federal Food, Drug, and Cosmetic Act 

(21 U.S.C. 301 et seq.)—

(A) the term ‘‘ginseng’’ may only be considered to be a 

common or usual name (or part thereof) for any herb or 

herbal ingredient derived from a plant classified within the 

genus Panax; and 

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(B) only labeling or advertising for herbs or herbal ingredients classified within that genus may include the term 

‘‘ginseng’’. 

(2) AMENDMENT.—Section 403 of the Federal Food, Drug, 

and Cosmetic Act (21 U.S.C. 343) (as amended by subsection 

(a)(2)) is amended by adding at the end the following: 

‘‘(u) If it purports to be or is represented as ginseng, unless it 

is an herb or herbal ingredient derived from a plant classified within the genus Panax.’’. 

SEC. 10807. FOOD SAFETY COMMISSION. 

(a) ESTABLISHMENT.—

(1) IN GENERAL.—There is established a commission to be 

known as the ‘‘Food Safety Commission’’ (referred to in this section as the ‘‘Commission’’). 

(2) MEMBERSHIP.—

(A) COMPOSITION.—The Commission shall be composed 

of 15 members (including a Chairperson, appointed by the 

President. 

(B) ELIGIBILITY.—

(i) IN GENERAL.—Members of the Commission—

(I) shall have specialized training or significant experience in matters under the jurisdiction of 

the Commission; and 

(II) shall represent, at a minimum—

(aa) consumers; 

(bb) food scientists; 

(cc) the food industry; and 

(dd) health professionals. 

(ii) FEDERAL EMPLOYEES.—Not more than 3 members of the Commission may be Federal employees. 

(C) DATE OF APPOINTMENTS.—The appointment of the 

members of the Commission shall be made as soon as practicable after the date on which funds authorized to be appropriated under subsection (e)(1) are made available. 

(D) VACANCIES.—A vacancy on the Commission—

(i) shall not affect the powers of the Commission; 

and 

(ii) shall be filled—

(I) not later than 60 days after the date on 

which the vacancy occurs; and 

(II) in the same manner as the original appointment was made. 

(3) MEETINGS.—

(A) INITIAL MEETING.—The initial meeting of the Commission shall be conducted not later than 30 days after the 

date of appointment of the final member of the Commission. 

(B) OTHER MEETINGS.—The Commission shall meet at 

the call of the Chairperson. 

(4) QUORUM; STANDING RULES.—

(A) QUORUM.—A majority of the members of the Commission shall constitute a quorum to conduct business.

(B) STANDING RULES.—At the first meeting of the Commission, the Commission shall adopt standing rules of the 

401

Commission to guide the conduct of business and decisionmaking of the Commission. 

(b) DUTIES.—

(1) RECOMMENDATIONS.—The Commission shall make specific recommendations to enhance the food safety system of the 

United States, including a description of how each recommendation would improve food safety. 

(2) COMPONENTS.—Recommendations made by the Commission under paragraph (1) shall address all food available 

commercially in the United States. 

(3) REPORT.—Not later than 1 year after the date on which 

the Commission first meets, the Commission shall submit to the 

President and Congress—

(A) the findings, conclusions, and recommendations of 

the Commission, including a description of how each recommendation would improve food safety; 

(B) a summary of any other material used by the Commission in the preparation of the report under this paragraph; and 

(C) if requested by 1 or more members of the Commission, a statement of the minority views of the Commission. 

(c) POWERS OF THE COMMISSION.—

(1) HEARINGS.—The Commission may, for the purpose of 

carrying out this section, hold such hearings, meet and act at 

such times and places, take such testimony, and receive such 

evidence as the Commission considers advisable. 

(2) INFORMATION FROM FEDERAL AGENCIES.—

(A) IN GENERAL.—The Commission may secure directly, 

from any Federal agency, such information as the Commission considers necessary to carry out this section. 

(B) PROVISION OF INFORMATION.—

(i) IN GENERAL.—Subject to subparagraph (C), on 

the request of the Commission, the head of a Federal 

agency described in subparagraph (A) may furnish information requested by the Commission to the Commission. 

(ii) ADMINISTRATION.—The furnishing of information by a Federal agency to the Commission shall not 

be considered a waiver of any exemption available to 

the agency under section 552 of title 5, United States 

Code. 

(C) INFORMATION TO BE KEPT CONFIDENTIAL.—

(i) IN GENERAL.—For purposes of section 1905 of 

title 18, United States Code—

(I) the Commission shall be considered an 

agency of the Federal Government; and 

(II) any individual employed by an individual, 

entity, or organization that is a party to a contract 

with the Commission under this section shall be 

considered an employee of the Commission. 

(ii) PROHIBITION ON DISCLOSURE.—Information obtained by the Commission, other than information that 

is available to the public, shall not be disclosed to any 

person in any manner except to an employee of the 

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Commission as described in clause (i), for the purpose 

of receiving, reviewing, or processing the information. 

(d) COMMISSION PERSONNEL MATTERS.—

(1) MEMBERS.—

(A) COMPENSATION.—A member of the Commission 

shall serve without compensation for the services of the 

member on the Commission. 

(B) TRAVEL EXPENSES.—A member of the Commission 

shall be allowed travel expenses, including per diem in lieu 

of subsistence, at rates authorized for an employee of an 

agency under subchapter I of chapter 57 of title 5, United 

States Code, while away from the home or regular place of 

business of the member in the performance of the duties of 

the Commission. 

(2) STAFF.—

(A) IN GENERAL.—The Chairperson of the Commission 

may, without regard to the civil service laws (including regulations), appoint and terminate the appointment of an executive director and such other additional personnel as are 

necessary to enable the Commission to perform the duties 

of the Commission. 

(B) CONFIRMATION OF EXECUTIVE DIRECTOR.—The employment of an executive director shall be subject to confirmation by the Commission. 

(C) COMPENSATION.—

(i) IN GENERAL.—Except as provided in clause (ii), 

the Chairperson of the Commission may fix the compensation of the executive director and other personnel 

without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, 

relating to classification of positions and General 

Schedule pay rates. 

(ii) MAXIMUM RATE OF PAY.—The rate of pay for 

the executive director and other personnel shall not exceed the rate payable for level II of the Executive 

Schedule under section 5316 of title 5, United States 

Code. 

(3) DETAIL OF FEDERAL GOVERNMENT EMPLOYEES.—

(A) IN GENERAL.—An employee of the Federal Government may be detailed to the Commission, without reimbursement, for such period of time as is permitted by law. 

(B) CIVIL SERVICE STATUS.—The detail of the employee 

shall be without interruption or loss of civil service status 

or privilege. 

(4) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES.—The Chairperson of the Commission may procure temporary and intermittent services in accordance with section 

3109(b) of title 5, United States Code, at rates for individuals 

that do not exceed the daily equivalent of the annual rate of 

basic pay prescribed for level II of the Executive Schedule under 

section 5316 of that title. 

(e) AUTHORIZATION OF APPROPRIATIONS.—

(1) IN GENERAL.—There is authorized to be appropriated 

such sums as are necessary to carry out this section. 

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(2) LIMITATION.—No payment may be made under subsection (d) except to the extent provided for in advance in an appropriations Act. 

(f) TERMINATION.—The Commission shall terminate on the date 

that is 60 days after the date on which the Commission submits the 

recommendations and report under subsection (b)(3). 

SEC. 10808. PASTEURIZATION. 

(a) PASTEURIZATION OF MEAT AND POULTRY.—

(1) IN GENERAL.—Effective beginning not later than 30 

days after the date of enactment of this Act, the Secretary of Agriculture shall conduct an education program regarding the 

availability and safety of processes and treatments that eliminate or substantially reduce the level of pathogens on meat, 

meat food products, poultry, and poultry products. 

(2) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated such sums as are necessary to carry out 

this subsection. 

(b) PASTEURIZATION OF FOOD AS PASTEURIZED.—Section 403(h) 

of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 343(h)) is 

amended—

(1) by striking ‘‘or’’ at the end of paragraph (1); 

(2) by striking the period at the end of paragraph (2) and 

inserting ‘‘; or’’; and 

(3) by adding at the end the following: 

‘‘(3) a food that is pasteurized unless—

‘‘(A) such food has been subjected to a safe process or 

treatment that is prescribed as pasteurization for such food 

in a regulation promulgated under this Act; or 

‘‘(B)(i) such food has been subjected to a safe process or 

treatment that—

‘‘(I) is reasonably certain to achieve destruction or 

elimination in the food of the most resistant microorganisms of public health significance that are likely to 

occur in the food; 

‘‘(II) is at least as protective of the public health as 

a process or treatment described in subparagraph (A); 

‘‘(III) is effective for a period that is at least as 

long as the shelf life of the food when stored under normal and moderate abuse conditions; and 

‘‘(IV) is the subject of a notification to the Secretary, including effectiveness data regarding the process or treatment; and 

‘‘(ii) at least 120 days have passed after the date of receipt of such notification by the Secretary without the Secretary making a determination that the process or treatment involved has not been shown to meet the requirements 

of subclauses (I) through (III) of clause (i).

For purposes of paragraph (3), a determination by the Secretary 

that a process or treatment has not been shown to meet the requirements of subclauses (I) through (III) of subparagraph (B)(i) shall 

constitute final agency action under such subclauses.’’.

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SEC. 10809. RULEMAKING ON LABELING OF IRRADIATED FOOD; CERTAIN PETITIONS. 

The Secretary of Health and Human Services (referred to in 

this section as the ‘‘Secretary’’) shall publish a proposed rule and, 

with due consideration to public comment, a final rule to revise, as 

appropriate, the current regulation governing the labeling of foods 

that have been treated to reduce pest infestation or pathogens by 

treatment by irradiation using radioactive isotope, electronic beam, 

or x-ray. Pending promulgation of the final rule required by this 

subsection, any person may petition the Secretary for approval of labeling, which is not false or misleading in any material respect, of 

a food which has been treated by irradiation using radioactive isotope, electronic beam, or x-ray. The Secretary shall approve or deny 

such a petition within 180 days of receipt of the petition, or the petition shall be deemed denied, except to the extent additional agency 

review is mutually agreed upon by the Secretary and the petitioner. 

Any denial of a petition under this subsection shall constitute final 

agency action subject to judicial review by the United States Court 

of Appeals for the District of Columbia Circuit. Any labeling approved through the foregoing petition process shall be subject to the 

provisions of the final rule referred to in the first sentence of the 

subparagraph on the effective date of such final rule. 

SEC. 10810. PENALTIES FOR VIOLATIONS OF PLANT PROTECTION ACT. 

Section 424 of the Plant Protection Act (7 U.S.C. 7734) is 

amended by striking subsection (a) and inserting the following: 

‘‘(a) CRIMINAL PENALTIES.—

‘‘(1) OFFENSES.—

‘‘(A) IN GENERAL.—A person that knowingly violates 

this title, or knowingly forges, counterfeits, or, without authority from the Secretary, uses, alters, defaces, or destroys 

any certificate, permit, or other document provided for in 

this title shall be fined under title 18, United States Code, 

imprisoned not more than 1 year, or both. 

‘‘(B) MOVEMENT.—A person that knowingly imports, 

enters, exports, or moves any plant, plant product, biological control organism, plant pest, noxious weed, or article, 

for distribution or sale, in violation of this title, shall be 

fined under title 18, United States Code, imprisoned not 

more than 5 years, or both. 

‘‘(2) MULTIPLE VIOLATIONS.—On the second and any subsequent conviction of a person of a violation of this title under 

paragraph (1), the person shall be fined under title 18, United 

States Code, imprisoned not more than 10 years, or both.’’. 

SEC. 10811. PRECLEARANCE QUARANTINE INSPECTIONS. 

(a) PRECLEARANCE INSPECTIONS REQUIRED.—The Secretary of 

Agriculture, acting through the Administrator of the Animal and 

Plant Health Inspection Service, shall conduct preclearance quarantine inspections of persons, baggage, cargo, and any other articles 

destined for movement from the State of Hawaii to any of the following—

(1) The continental United States. 

(2) Guam. 

(3) Puerto Rico. 

(4) The United States Virgin Islands. 

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(b) INSPECTION LOCATIONS.—The preclearance quarantine inspections required by subsection (a) shall be conducted at all direct 

departure and interline airports in the State of Hawaii. 

(c) LIMITATION.—The Secretary shall not implement this section 

unless appropriations for necessary expenses of the Animal and 

Plant Health Inspection Service for inspection, quarantine, and regulatory activities are increased by an amount not less than 

$3,000,000 in an Act making appropriations for fiscal year 2003. 

SEC. 10812. CONNECTICUT RIVER ATLANTIC SALMON COMMISSION. 

Section 3(2) of Public Law 98–138 (Public Law 98–138; 97 Stat. 

870) is amended by striking ‘‘twenty’’ and inserting ‘‘40’’. 

SEC. 10813. PINE POINT SCHOOL. 

Section 802(b)(2) of the No Child Left Behind Act of 2001 (Public Law 107–110) is amended by striking ‘‘2002’’ each place it appears and inserting ‘‘2000’’. 

SEC. 10814. 7-MONTH EXTENSION OF CHAPTER 12 OF TITLE 11 OF THE 

UNITED STATES CODE. 

(a) AMENDMENTS.—Section 149 of title I of division C of Public 

Law 105–277 is amended—

(1) by striking ‘‘June 1, 2002’’ each place it appears and inserting ‘‘January 1, 2003’’; and 

(2) in subsection (a)—

(A) by striking ‘‘September 30, 2001’’ and inserting 

‘‘May 31, 2002’’; and 

(B) by striking ‘‘October 1, 2001’’ and inserting ‘‘June 

1, 2002’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall take effect on June 1, 2002. 

SEC. 10815. PRACTICES INVOLVING NONAMBULATORY LIVESTOCK. 

(a) REPORT.—The Secretary of Agriculture shall investigate and 

submit to Congress a report on—

(1) the scope of nonambulatory livestock; 

(2) the causes that render livestock nonambulatory; 

(3) the humane treatment of nonambulatory livestock; and 

(4) the extent to which nonambulatory livestock may 

present handling and disposition problems for stockyards, market agencies, and dealers. 

(b) AUTHORITY.—Based on the findings of the report, if the Secretary determines it necessary, the Secretary shall promulgate regulations to provide for the humane treatment, handling, and disposition of nonambulatory livestock by stockyards, market agencies, and 

dealers. 

(c) ADMINISTRATION AND ENFORCEMENT.—For the purpose of 

administering and enforcing any regulations promulgated under 

subsection (b), the authorities provided under sections 10414 and 

10415 shall apply to the regulations in a similar manner as those 

sections apply to the Animal Health Protection Act. Any person that 

violates regulations promulgated under subsection (b) shall be subject to penalties provided in section 10414. 

SEC. 10816. COUNTRY OF ORIGIN LABELING. 

The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.) 

is amended by adding at the end the following:

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‘‘Subtitle D—Country of Origin Labeling 

‘‘SEC. 281. DEFINITIONS. 

‘‘In this subtitle: ‘‘(1) BEEF.—The term ‘beef’ means meat produced from cattle (including veal). ‘‘(2) COVERED COMMODITY.— ‘‘(A) IN GENERAL.—The term ‘covered commodity’ means—‘‘(i) muscle cuts of beef, lamb, and pork; 

‘‘(ii) ground beef, ground lamb, and ground pork; 

‘‘(iii) farm-raised fish; 

‘‘(iv) wild fish; 

‘‘(v) a perishable agricultural commodity; and 

‘‘(vi) peanuts. 

‘‘(B) EXCLUSIONS.—The term ‘covered commodity’ does 

not include an item described in subparagraph (A) if the 

item is an ingredient in a processed food item. 

‘‘(3) FARM-RAISED FISH.—The term ‘farm-raised fish’ includes—

‘‘(A) farm-raised shellfish; and 

‘‘(B) fillets, steaks, nuggets, and any other flesh from a 

farm-raised fish or shellfish. 

‘‘(4) FOOD SERVICE ESTABLISHMENT.—The term ‘food service 

establishment’ means a restaurant, cafeteria, lunch room, food 

stand, saloon, tavern, bar, lounge, or other similar facility operated as an enterprise engaged in the business of selling food to 

the public. 

‘‘(5) LAMB.—The term ‘lamb’ means meat, other than mutton, produced from sheep. 

‘‘(6) PERISHABLE AGRICULTURAL COMMODITY; RETAILER.—

The terms ‘perishable agricultural commodity’ and ‘retailer’

have the meanings given the terms in section 1(b) of the Perishable Agricultural Commodities Act of 1930 (7 U.S.C. 499a(b)). 

‘‘(7) PORK.—The term ‘pork’ means meat produced from 

hogs. 

‘‘(8) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Agriculture, acting through the Agricultural Marketing Service. 

‘‘(9) WILD FISH.— ‘‘(A) IN GENERAL.—The term ‘wild fish’ means naturally-born or hatchery-raised fish and shellfish harvested 

in the wild. ‘‘(B) INCLUSIONS.—The term ‘wild fish’ includes a fillet, 

steak, nugget, and any other flesh from wild fish or shellfish. 

‘‘(C) EXCLUSIONS.—The term ‘wild fish’ excludes netpen aquacultural or other farm-raised fish. 

‘‘SEC. 282. NOTICE OF COUNTRY OF ORIGIN. 

‘‘(a) IN GENERAL.—

‘‘(1) REQUIREMENT.—Except as provided in subsection (b), a 

retailer of a covered commodity shall inform consumers, at the 

final point of sale of the covered commodity to consumers, of the 

country of origin of the covered commodity. 

407

‘‘(2) UNITED STATES COUNTRY OF ORIGIN.—A retailer of a 

covered commodity may designate the covered commodity as 

having a United States country of origin only if the covered 

commodity—

‘‘(A) in the case of beef, is exclusively from an animal 

that is exclusively born, raised, and slaughtered in the 

United States (including from an animal exclusively born 

and raised in Alaska or Hawaii and transported for a period not to exceed 60 days through Canada to the United 

States and slaughtered in the United States); 

‘‘(B) in the case of lamb and pork, is exclusively from 

an animal that is exclusively born, raised, and slaughtered 

in the United States; 

‘‘(C) in the case of farm-raised fish, is hatched, raised, 

harvested, and processed in the United States; 

‘‘(D) in the case of wild fish, is—

‘‘(i) harvested in waters of the United States, a territory of the United States, or a State; and 

‘‘(ii) processed in the United States, a territory of 

the United States, or a State, including the waters 

thereof; and 

‘‘(E) in the case of a perishable agricultural commodity 

or peanuts, is exclusively produced in the United States. 

‘‘(3) WILD FISH AND FARM-RAISED FISH.—The notice of country of origin for wild fish and farm-raised fish shall distinguish 

between wild fish and farm-raised fish. 

‘‘(b) EXEMPTION FOR FOOD SERVICE ESTABLISHMENTS.—Subsection (a) shall not apply to a covered commodity if the covered 

commodity is—

‘‘(1) prepared or served in a food service establishment; and 

‘‘(2)(A) offered for sale or sold at the food service establishment in normal retail quantities; or 

‘‘(B) served to consumers at the food service establishment. 

‘‘(c) METHOD OF NOTIFICATION.—

‘‘(1) IN GENERAL.—The information required by subsection 

(a) may be provided to consumers by means of a label, stamp, 

mark, placard, or other clear and visible sign on the covered 

commodity or on the package, display, holding unit, or bin containing the commodity at the final point of sale to consumers. 

‘‘(2) LABELED COMMODITIES.—If the covered commodity is 

already individually labeled for retail sale regarding country of 

origin, the retailer shall not be required to provide any additional information to comply with this section. 

‘‘(d) AUDIT VERIFICATION SYSTEM.—The Secretary may require 

that any person that prepares, stores, handles, or distributes a covered commodity for retail sale maintain a verifiable recordkeeping 

audit trail that will permit the Secretary to verify compliance with 

this subtitle (including the regulations promulgated under section 

284(b)). 

‘‘(e) INFORMATION.—Any person engaged in the business of supplying a covered commodity to a retailer shall provide information 

to the retailer indicating the country of origin of the covered commodity. 

‘‘(f) CERTIFICATION OF ORIGIN.—

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‘‘(1) MANDATORY IDENTIFICATION.—The Secretary shall not 

use a mandatory identification system to verify the country of 

origin of a covered commodity. 

‘‘(2) EXISTING CERTIFICATION PROGRAMS.—To certify the 

country of origin of a covered commodity, the Secretary may use 

as a model certification programs in existence on the date of enactment of this Act, including—

‘‘(A) the carcass grading and certification system carried out under this Act; 

‘‘(B) the voluntary country of origin beef labeling system carried out under this Act; 

‘‘(C) voluntary programs established to certify certain 

premium beef cuts; 

‘‘(D) the origin verification system established to carry 

out the child and adult care food program established 

under section 17 of the Richard B. Russell National School 

Lunch Act (42 U.S.C. 1766); or 

‘‘(E) the origin verification system established to carry 

out the market access program under section 203 of the Agricultural Trade Act of 1978 (7 U.S.C. 5623). 

‘‘SEC. 283. ENFORCEMENT. 

‘‘(a) IN GENERAL.—Except as provided in subsections (b) and 

(c), section 253 shall apply to a violation of this subtitle. 

‘‘(b) WARNINGS.—If the Secretary determines that a retailer is 

in violation of section 282, the Secretary shall—

‘‘(1) notify the retailer of the determination of the Secretary; 

and 

‘‘(2) provide the retailer a 30-day period, beginning on the 

date on which the retailer receives the notice under paragraph 

(1) from the Secretary, during which the retailer may take necessary steps to comply with section 282. 

‘‘(c) FINES.—If, on completion of the 30-day period described in 

subsection (b)(2), the Secretary determines that the retailer has willfully violated section 282, after providing notice and an opportunity 

for a hearing before the Secretary with respect to the violation, the 

Secretary may fine the retailer in an amount of not more than 

$10,000 for each violation. 

‘‘SEC. 284. REGULATIONS. 

‘‘(a) GUIDELINES.—Not later than September 30, 2002, the Secretary shall issue guidelines for the voluntary country of origin labeling of covered commodities based on the requirements of section 

282. 

‘‘(b) REGULATIONS.—Not later than September 30, 2004, the 

Secretary shall promulgate such regulations as are necessary to implement this subtitle. 

‘‘(c) PARTNERSHIPS WITH STATES.—In promulgating the regulations, the Secretary shall, to the maximum extent practicable, enter 

into partnerships with States with enforcement infrastructure to assist in the administration of this subtitle.

‘‘SEC. 285. APPLICABILITY. 

‘‘This subtitle shall apply to the retail sale of a covered commodity beginning September 30, 2004.’’. 

409

Subtitle J—Miscellaneous Studies and 

Reports 

SEC. 10901. REPORT ON SPECIALTY CROP PURCHASES. 

Not later than 1 year after the date of enactment of this Act, 

the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on the quantity and type of—

(1) fruits, vegetables, and other specialty food crops that are 

purchased under section 10603; and 

(2) other commodities that are purchased under section 32 

of the Act of August 24, 1935 (7 U.S.C. 612c). 

SEC. 10902. REPORT ON POUCHED AND CANNED SALMON. 

(a) IN GENERAL.—Not later than 180 days after the date of enactment of this Act, the Secretary of Agriculture shall submit to 

Congress a report on efforts to expand the promotion, marketing, 

and purchasing of pouched and canned salmon harvested and processed in the United States under food and nutrition programs administered by the Secretary. 

(b) COMPONENTS.—The report under subsection (a) shall include—

(1) an analysis of pouched and canned salmon inventories 

in the United States that, as of the date on which the report is 

submitted, are available for purchase; 

(2) an analysis of the demand for pouched and canned 

salmon and value-added products (such as salmon ‘‘nuggets’’) 

by—

(A) partners of the Department of Agriculture (including other appropriate Federal agencies); and 

(B) consumers; and 

(3) an analysis of impediments to additional purchases of 

pouched and canned salmon, including—

(A) any marketing issues; and 

(B) recommendations for methods to resolve those impediments. 

SEC. 10903. STUDY ON UPDATING YIELDS. 

(a) IN GENERAL.—The Comptroller General shall conduct a 

study and make findings and recommendations with respect to determining how producer income would be affected by updating yield 

bases, including— (1) whether crop yields have increased over the past 20 crop 

years for program crops and oilseeds; 

(2) whether program payments would be disbursed differently under title I if yield bases were updated further; 

(3) what impact the target prices under title I would have 

on producer income if the yield bases of the target prices were 

further updated; and 

(4) what impact lower target prices with updated yield 

bases would have on producer income, as compared with the 

impact of target prices under title I. 

(b) REPORT.—Not later than 180 days after the date of enactment of this Act, the Comptroller General shall submit to Congress 

410

a report on the study, findings, and recommendations required by 

subsection (a). 

SEC. 10904. REPORT ON EFFECT OF FARM PROGRAM PAYMENTS. 

(a) IN GENERAL.—The Secretary of Agriculture shall conduct a 

review of the effects that payments under production flexibility contracts and market loss assistance payments have had, and that direct payments and counter-cyclical payments are likely to have, on 

the economic viability of producers and the farming infrastructure, 

particularly in areas where climate, soil types, and other agronomic 

conditions severely limit the covered crops that producers can choose 

to successfully and profitably produce. 

(b) CASE STUDY RELATED TO RICE PRODUCTION.—The review 

shall include a case study of the effects that the payments described 

in subsection (a), and the forecast effects of increasing these or other 

fixed payments, are likely to have on rice producers (including tenant rice producers), the rice milling industry, and the economies of 

rice farming areas in Texas, where harvested rice acreage has fallen 

from 320,000 acres in 1995 to only 211,000 acres in 2001. 

(c) REPORT AND RECOMMENDATIONS.—

(1) REPORT.—Not later than 90 days after the date of the 

enactment of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the 

Committee on Agriculture, Nutrition, and Forestry of the Senate 

a report describing the information collected for the review and 

the case study and any findings made on the basis of the information. 

(2) RECOMMENDATIONS.—The report shall include recommendations for minimizing the adverse effects on producers, 

with a special focus on—

(A) producers who are tenants; 

(B) the agricultural economies in farming areas generally; 

(C) particular areas described in subsection (a); and 

(D) on the area that is the subject of the case study conducted under subsection (b). 

SEC. 10905. CHILOQUIN DAM FISH PASSAGE FEASIBILITY STUDY. 

(a) IN GENERAL.—The Secretary of the Interior, in collaboration 

with all interested parties (including the Modoc Point Irrigation 

District, the Klamath Tribes, and the Oregon Department of Fish 

and Wildlife), shall conduct a study of the feasibility of providing 

adequate upstream and downstream passage for fish at the 

Chiloquin Dam on the Sprague River, Oregon. 

(b) SUBJECTS.—The study shall include—

(1) a review of all alternatives for providing passage described in subsection (a), including the removal of the dam; 

(2) the determination of the most appropriate alternative; 

(3) the development of recommendations for implementing 

that alternative; and 

(4) examination of mitigation needed for upstream and 

downstream water users, and for Klamath tribal nonconsumptive uses, as a result of the implementation of the alternative. 

(c) REPORT.—Not later than 1 year after the date of enactment 

of this Act, the Secretary of the Interior shall submit to Congress a 

411

report that describes the findings, conclusions, and recommendations of the study. 

SEC. 10906. REPORT ON GEOGRAPHICALLY DISADVANTAGED FARMERS 

AND RANCHERS. 

(a) DEFINITION OF GEOGRAPHICALLY DISADVANTAGED FARMER

OR RANCHER.—In this section, the term ‘‘geographically disadvantaged farmer or rancher’ means a farmer or rancher in—

(1) an insular area (as defined in section 1404 of the National Agricultural Research, Extension, and Teaching Policy 

Act of 1977 (7 U.S.C. 3103) (as amended by section 7502(a)); or 

(2) a State other than 1 of the 48 contiguous States. 

(b) REPORT.—Not later than 1 year after the date of enactment 

of this Act, the Secretary of Agriculture shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report 

that describes—

(1) barriers to efficient and competitive transportation of inputs and products by geographically disadvantaged farmers 

and ranchers; and 

(2) means of encouraging and assisting geographically disadvantaged farmers and ranchers—

(A) to own and operate farms and ranches; and 

(B) to participate equitably in the full range of agricultural programs offered by the Department of Agriculture. 

SEC. 10907. STUDIES ON AGRICULTURAL RESEARCH AND TECHNOLOGY. 

(a) SCIENTIFIC STUDIES.—

(1) IN GENERAL.—The Secretary of Agriculture may conduct 

scientific studies on—

(A) the transmission of spongiform encephalopathy in 

deer, elk, and moose; and 

(B) chronic wasting disease (including the risks that 

chronic wasting disease poses to livestock). 

(2) REPORT.—The Secretary shall submit to the Committee 

on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a 

report on the results of any scientific studies conducted under 

paragraph (1). 

(b) VACCINES.—

(1) VACCINE STORAGE STUDY.—The Secretary may—

(A) conduct a study to determine the number of doses 

of livestock disease vaccines that should be available to protect against livestock diseases that could be introduced into 

the United States; and 

(B) compare that number with the number of doses of 

the livestock disease vaccines that are available as of that 

date. 

(2) STOCKPILING OF VACCINES.—If, after conducting the 

study and comparison described in paragraph (1), the Secretary 

determines that there is an insufficient number of doses of a 

particular vaccine referred to in that paragraph, the Secretary 

may take such actions as are necessary to obtain the required 

additional doses of the vaccine. 

412

SEC. 10908. REPORT ON TOBACCO SETTLEMENT AGREEMENT. 

Not later than December 31, 2002, and annually thereafter 

through 2006, the Comptroller General shall submit to Congress a 

report that describes all programs and activities that States have 

carried out using funds received under all phases of the Master Settlement Agreement of 1997. 

SEC. 10909. REPORT ON SALE AND USE OF PESTICIDES FOR AGRICULTURAL USES. 

Not later than 180 days after the date of enactment of this Act, 

the Administrator of the Environmental Protection Agency shall 

submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of 

the Senate a report on the manner in which the Agency is applying 

regulations of the Agency governing the sale and use of pesticides 

for agricultural use to electronic commerce transactions. 

SEC. 10910. REVIEW OF OPERATION OF AGRICULTURAL AND NATURAL 

RESOURCE PROGRAMS ON TRIBAL TRUST LAND. 

(a) REVIEW.—The Secretary of Agriculture (referred to in this 

section as the ‘‘Secretary’’) shall conduct a review of the operation 

of agricultural and natural resource programs available to farmers 

and ranchers operating on tribal and trust land, including—

(1) agricultural commodity, price support, and farm income 

support programs (collectively referred to in this section as ‘‘agricultural commodity programs’’); 

(2) conservation programs (including financial and technical assistance); 

(3) agricultural credit programs; 

(4) rural development programs; and 

(5) forestry programs. 

(b) CRITERIA FOR REVIEW.—In carrying out the review under 

subsection (a), the Secretary shall consider—

(1) the extent to which agricultural commodity programs 

and conservation programs are consistent with tribal goals and 

priorities regarding the sustainable use of agricultural land; 

(2) strategies for increasing tribal participation in agricultural commodity programs and conservation programs; 

(3) the educational and training opportunities available to 

Indian tribes and members of Indian tribes in the practical, 

technical, and professional aspects of agriculture and land 

management; and 

(4) the development and management of agricultural land 

under the jurisdiction of Indian tribes in accordance with integrated resource management plans that—

(A) ensure proper management of the land; 

(B) produce increased economic returns; 

(C) promote employment opportunities; and 

(D) improve the social and economic well-being of Indian tribes and members of Indian tribes. 

(c) CONSULTATION.—In carrying out this section, the Secretary 

shall consult with—

(1) the Secretary of the Interior; 

(2) local officers and employees of the Department of Agriculture; and 

(3) program recipients. 

413

(d) REPORT.—Not later than 1 year after the date of enactment 

of this Act, the Secretary shall submit to Congress a report that contains— (1) a description of the results of the review conducted 

under this section; 

(2) recommendations for program improvements; and 

(3) a description of actions that will be taken to carry out 

the improvements.

And the Senate agree to the same. 

That the House recede from its disagreement to the amendment of the Senate to the title of the bill and agree to the same 

with an amendment as follows: 

In lieu of the matter proposed to be inserted by the amendment of the Senate to the title of the bill, insert the following: ‘‘An 

Act to provide for the continuation of agricultural programs 

through fiscal year 2007, and for other purposes.’’. And the Senate agree to the same.

From the Committee on Agriculture, for consideration of 

the House bill and the Senate amendment, and modifications committed to conference: 

LARRY COMBEST, BOB GOODLATTE, RICHARD POMBO, TERRY EVERETT, FRANK D. LUCAS, SAXBY CHAMBLISS, JERRY MORAN, CHARLES W. STENHOLM, GARY CONDIT, COLLIN C. PETERSON, EVA M. CLAYTON, TIM HOLDEN, As additional conferees from the Committee on the Budget, 

for consideration of sec. 197 of the Senate amendment, and 

modifications committed to conference: 

JIM NUSSLE, From the Committee on Education and the Workforce, for 

consideration of secs. 453–5, 457–9, 460–1, and 464 of the 

Senate amendment, and modifications committed to conference: 

MICHAEL N. CASTLE, 

TOM OSBORNE, 

DALE E. KILDEE, 

From the Committee on Energy and Commerce, for consideration of secs. 213, 605, 627, 648, 652, 902, 1041, and 

1079E of the Senate amendment, and modifications committed to conference: 

BILLY TAUZIN, 

JOE BARTON, 

JOHN D. DINGELL, 

From the Committee on Financial Services, for consideration of secs. 335 and 601 of the Senate amendment, and 

modifications committed to conference: 

MICHAEL G. OXLEY, 

SPENCER BACHUS, 

414

JOHN J. LAFALCE

(except for sec. 335),

From the Committee on International Relations, for consideration of title III of the House bill and title III of the 

Senate amendment, and modifications committed to conference: 

HENRY HYDE, CHRISTOPHER SMITH, TOM LANTOS, From the Committee on the Judiciary, for consideration of 

secs. 940–1 of the House bill and secs. 602, 1028–9, 1033– 5, 1046, 1049, 1052–3, 1058, 1068–9, 1070–1, 1098, and 

1098A of the Senate amendment, and modifications committed to conference: 

MARK GREEN, From the Committee on Resources, for consideration of 

secs. 201, 203, 211, 213, 215–7, 262, 721, 786, 806, 810, 

817–8, 1069, 1070, and 1076 of the Senate amendment, 

and modifications committed to conference: 

JAMES V. HANSEN, DON YOUNG, From the Committee on Science, for consideration of secs. 

808, 811, 902–3, and 1079 of the Senate amendment, and 

modifications committed to conference: 

SHERWOOD BOEHLERT, ROSCOE G. BARTLETT, RALPH M. HALL, From the Committee on Ways and Means, for consideration of secs. 127 and 146 of the House bill and sections 

144, 1024, 1038, and 1070 of the Senate amendment, and 

modifications committed to conference: 

CHARLES B. RANGEL, 

Managers on the Part of the House.

TOM HARKIN, 

PATRICK LEAHY, 

KENT CONRAD, 

TOM DASCHLE, 

THAD COCHRAN, 

Managers on the Part of the Senate.

(415)

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF 

CONFERENCE 

The Managers on the part of the House and the Senate at the 

conference on the disagreeing votes of the two Houses on the 

amendment of the Senate to the bill (H.R. 2646) to provide for the 

continuation of agricultural programs through fiscal year 2011, 

submit the following joint statement to the House and the Senate 

in explanation of the effect of the action agreed upon by the managers and recommended in the accompanying conference report: 

The Senate amendment struck out all of the House bill after 

the enacting clause and inserted a substitute text. 

The House recedes from its disagreement to the amendment of 

the Senate with an amendment which is a substitute for the House 

bill and the Senate amendment. The differences between the House 

bill, the Senate amendment, and the substitute agreed to in conference are noted below, except for clerical corrections, conforming 

changes made necessary by agreements reached by the conferees, 

and minor drafting and clarifying changes. 

SHORT TITLE; TABLE OF CONTENTS

(1) Short Title 

The House bill cites that this Act may be cited as the ‘‘Farm 

Security Act of 2001’’. (Section 1) 

The Senate amendment cites that the Act may be cited as the 

‘‘Agriculture, Conservation, and Rural Enhancement Act of 2002’’. 

(Section 1) 

The Conference substitute cites this Act as the ‘‘Farm Security 

and Rural Investment Act of 2002’’. (Section 1000) 

TITLE I—COMMODITY PROGRAMS

(2) Definitions 

The House bill defines terms necessary for implementation of 

this Act: Agricultural Act of 1949, base acres, counter-cyclical payment, covered commodity, effective price, eligible producer, fixed 

decoupled payment, other oilseed, payment acres, payment yield, 

producer, Secretary, State, target price and United States. (Section 

101) 

The Senate amendment defines terms necessary for implementation of this Act: Agricultural Act of 1949, considered planted, contract, contract acreage, contract commodity, contract payment, Department, ELS Cotton, loan commodity, oilseed, payment yield, 

producer, Secretary, State and United States. (Section 101) 

The Conference substitute defines terms necessary for implementation of this Act: Agricultural Act of 1949, base acres, countercyclical payment, covered commodity, direct payment, effective 

416

price, extra long staple cotton, loan commodity, other oilseed, payment acres, payment yield, updated payment yield, producer, Secretary, State, target price and United States. (Section 1001) 

SUBTITLE A—FIXED DECOUPLED PAYMENTS AND COUNTER-CYCLICAL

PAYMENTS

(3) Payments to Eligible Producers 

The House bill provides that beginning with the 2002 crop 

year, the Secretary will make fixed decoupled payments and 

counter-cyclical payments to eligible producers, including producers 

that would have been eligible for an AMTA contract payment in 

2002 and other producers of a covered commodity on a farm in the 

United States as described in section 103(a). 

Defines a producer eligible to share in a fixed, decoupled and 

counter-cyclical payment as ‘‘an owner, operator, landlord, tenant, 

or sharecropper who shares in the risk of producing a crop and who 

is entitled to share in the crop available for marketing from the 

farm, or would have shared had the crop been produced. In determining whether a grower of hybrid seed is a producer, the Secretary shall not take into consideration the existence of a hybrid 

seed contract and shall ensure that program requirements do not 

adversely affect the ability of the grower to receive a payment 

under this title’’. 

Requires the Secretary to protect the interests of tenants and 

sharecroppers in carrying out this title. 

Sharing of Contract Payments.—The Secretary shall provide 

for the sharing of fixed, decoupled payments and counter-cyclical 

payments among the eligible producers on a farm on a fair and equitable basis. 

The Senate amendment provides that the Secretary shall offer 

to enter into a contract with an eligible owner or producer on a 

farm containing eligible cropland under which the eligible owner or 

producer will receive direct and counter-cyclical payments under 

sections 113 and 114, respectively. 

For each of the 2002 through 2006 fiscal years, the Secretary 

shall make direct payments available to eligible owners and producers on a farm that have entered into a contract to receive payments under this section. 

For each of the 2002 through 2006 crop years, the Secretary 

shall make counter-cyclical payments to eligible owners and producers on a farm of each contract commodity that have entered into 

a contract to receive payments under this section. 

An eligible owner or producer on a farm, subject to the provisions for share-rent tenants, cash-rent tenants and cash-rent owners, shall be eligible to enter into a contract. 

Share-rent Tenant.—A producer on eligible cropland that is a 

tenant with a share-rent lease of the eligible cropland shall be eligible to enter into a contract, regardless of the length of the lease, 

if the owner enters into the same contract. 

Cash-Rent Tenant.—Contracts With Long-Term Lease—A producer on eligible cropland that cash rents the eligible cropland 

under a lease expiring on or after the termination of the contract 

shall be eligible to enter into a contract. 

417

Contracts With Short-Term Lease.—A producer that cash rents 

the eligible cropland under a lease expiring before the termination 

of the contract shall be eligible to enter into a contract in addition 

to the owner. Provides that the owner must consent if a producer 

elects to enroll less than 100 percent of the eligible cropland in the 

contract. 

Cash-Rent Owner.—An owner of eligible cropland that cash 

rents under a lease that expires before the end of the 2006 crop 

year shall be eligible to enter into a contract if the tenant declines 

to do so, however the Secretary shall not make contract payments 

to the owner under the contract until the lease held by the tenant 

terminates. 

Requires the Secretary to protect the interest of tenants and 

sharecroppers in carrying out this subtitle. 

Requires the Secretary to provide for the sharing of contract 

payments among the eligible producers on a farm on a fair and equitable basis. (Section 111) 

The Conference substitute deletes both the House and the Senate provisions, except provides in section 1105 for the protection of 

the interest of tenants and sharecroppers and requires the sharing 

of direct and counter-cyclical payments among the producers on a 

farm on a fair and equitable basis. (Section 1105) 

The Managers intend that the Secretary will consider acreage 

and production data from producers’ federal crop insurance records, 

as well as records provided to the Farm Service Agency to qualify 

for market assistance loan benefits during the relevant crop years. 

(4) Establishment of Payment Yield 

The House bill requires the Secretary to establish payment 

yields for each farm for each covered commodity. The yield for a 

farm will be the payment yield in effect for the 2002 crop of the 

commodity as provided under section 505 of the Agricultural Act of 

1949. If no yield is available, the Secretary shall establish an appropriate payment yield taking into account the payment yields applicable to the commodity for similar farms in the area. 

Relative to soybeans and other oilseeds, the Secretary will establish a yield for a farm by determining the average yield from 

1998 through 2001, excluding years where the acreage planted to 

the oilseed was zero. If a farm would have satisfied disaster eligibility requirements under the FY1999 Agriculture Appropriations 

Bill in any of the 1998 through 2001 crop years, the Secretary will 

assign a yield to the farm equal to 65 percent of the county yield 

for that year in determining the 4–year average. 

The payment yield for a farm for an oilseed shall be equal to 

the product of the following: (A) the average yield for the oilseed 

determined under paragraph (1). The ratio resulting from dividing 

the national average yield for the oilseed for the 1981 through 1985 

crops by the national average yield for the oilseed for the 1998 

through 2001 crops. (Section 102) 

The Senate amendment provides that subject to subsection (h), 

an eligible owner or producer that has entered into a contract 

under this subtitle may make a 1–time election to have the payment yield for each of the contract commodities for a farm be equal 

to an amount that is the greater of: (1) the average yield per harVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00421 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
418

vested acre for the crop of the contract commodity for the farm for 

the 1998–2001 crop years, excluding any crop year for which the 

producers on the farm did not plant the contract crop and, at the 

option of the producers, 1 additional crop year or the farm program 

payment yield adjusted for any additional yields. If no yield records 

are available for a contract commodity, including land devoted to 

oilseed under a conservation reserve contract, the Secretary shall 

establish an appropriate payment yield taking into account the 

payment yields applicable to the commodity for similar farms in 

the area. (Section 111) 

The Conference substitute requires the Secretary to establish 

payment yields for each farm for each covered commodity. The 

yield for a farm will be the payment yield in effect for the 2002 

crop of the commodity as provided under section 505 of the Agricultural Act of 1949, as adjusted by the Secretary to account for any 

additional yield payments. If no yield is available, the Secretary 

shall establish an appropriate payment yield taking into account 

the payment yields applicable to the commodity for similar farms 

in the area, but before the yields for the similar farms are updated 

to reflect the actual yield per planted acre for the period 1998 

through 2001. 

Relative to soybeans and other oilseeds, the Secretary will establish a yield for a farm by determining the average yield from 

1998 through 2001, excluding years where the acreage planted to 

the oilseed was zero. 

The payment yield for a farm for an oilseed shall be equal to 

the product of the following: (A) The average yield for the oilseed 

for the 1998 through 2001 crops. (B) The ratio resulting from dividing the national average yield for the oilseed for the 1981 through 

1985 crops by the national average yield for the oilseed for the 

1998 through 2001 crops. 

If the yield per planted acre for a crop of an oilseed for a farm 

for any of the 1998 through 2001 crop years was less than 75 percent of the county yield for that oilseed, the Secretary shall assign 

a yield for that crop year equal to 75 percent of the county yield 

for purposes of determining the average yield for the 1998 through 

2001 crop years. 

If the owner of a farm elects to update the crop acreage base 

for all covered commodities using the average of the planted and 

prevented from planting acreage for 1998 through 2001, the owner 

shall also have a 1–time opportunity to elect to partially update the 

payment yields that would be used in calculating any counter-cyclical payments for covered commodities on the farm. If yields are updated for counter-cyclical payments for one covered commodity, 

they must be updated for all covered commodities on the farm. 

If the owner of a farm elects to update yields for payments, the 

counter-cyclical payment yield for a covered commodity on the farm 

shall be equal to the yield determined using either of the following: 

(A) The sum of the payment yield applicable for direct payments 

for the covered commodity on the farm and 70 percent of the difference between the average of the yield per planted acre for the 

crop of the covered commodity on the farm for the 1998 through 

2001 crop years and the payment yield applicable for direct payments for the covered commodity on the farm, or (B) 93.5 percent 

419

of the average yield per planted acre for the crop of the covered 

commodity for the farm for the 1998 through 2001 crop years. 

If the yield per planted acre for a crop of the covered commodity for a farm for any of the 1998 through 2001 crop years was 

less than 75 percent of the county yield for that commodity, the 

Secretary shall assign a yield for that crop year equal to 75 percent 

of the county for the purpose of determining the average yield. 

Owners electing to partially update yields are required to have 

the partially updated yield determined on the average yield per 

planted acre, excluding any year in which the crop was not planted. 

The Managers intend that the Secretary recognize that those producers planting crops for grazing that will be included as base acreage are unable to furnish production evidence similar to that furnished by producers that harvest crops for grain. For those owners 

intending to partially update a crop’s counter-cyclical yield that 

have this situation, the Managers intend for the Secretary to equitably determine the yield on the grazed acreage to be used for purposes of proven yields by either assigning a yield based on the actual production for that year on similar farms that harvested for 

grain or other method determined appropriate by the Secretary. 

(Section 1102) 

(5) Establishment of Base Acres and Payment Acres for a Farm 

The House bill provides that the Secretary will give producers 

a choice in determining their base acres. Producers may choose 

base acres reflecting the four-year average of acreage planted or 

prevented from being planted to the commodity for harvest, grazing, haying, silage, and other similar purposes during the 1998 

through 2001 crop years. Alternatively, producers may choose base 

acres reflecting contract acreage that would otherwise be used to 

calculate the fiscal year 2002 production flexibility contract payments. 

Producers may make an election of base acres only once and 

provide notice of the election to the Secretary no later than 180 

days after the date of enactment of this Act. If a producer fails to 

make an election of base acreage, or fails to timely notify the Secretary of the selected base acreage, the producers shall be deemed 

to have chosen base acres reflecting the production flexibility contract acreage. 

The election made by the producer shall apply to all covered 

commodities on the farm. 

In the case of producers on a farm that elect as their base acreage the contract acreage used by the Secretary to calculate the fiscal year 2002 payment, the Secretary will restore base acres when 

land under a conservation reserve contract expires, is voluntary 

terminated, or is released by the Secretary. (Conservation Reserve 

Program Sign-up 1–14) 

For the fiscal year and crop year in which a base acre adjustment is first made, the producers on the farm shall elect to receive 

either fixed decoupled payments and counter-cyclical payments 

with respect to the acreage added to the farm or a prorated payment under the conservation reserve contract, but not both. 

In the case of producers on a farm that elect as their base acreage the contract acreage used by the Secretary to calculate the fisVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00423 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
420

cal year 2002 payment, the Secretary will restore base acres when 

land under a conservation reserve contract expires, is voluntary 

terminated, or is released by the Secretary. (Conservation Reserve 

Program Sign-up 15 and greater) 

Payment acres for both the fixed decoupled and the counter-cyclical payment shall be equal to 85% of the base acres. 

The sum of base acres, peanut acres and acreage enrolled in 

CRP, WRP, or other programs in which a producer agrees not to 

produce a commodity on acreage in exchange for a payment, cannot 

exceed the actual cropland acreage on the farm. The Secretary 

shall give producers on the farm the opportunity to select base 

acres or peanuts acres against which the reduction will be made. 

The Secretary shall make an exception in the case of double cropping. (Section 103) 

The Senate amendment provides that land shall be considered 

to be cropland eligible for coverage under a contract only if the 

land has with respect to a contract commodity, contract acreage attributable to the land and a payment yield or was subject to a conservation reserve contract with a term that expired, or was voluntarily terminated on or after the date of enactment. 

Provides that an eligible owner or producer may enroll as contract acreage under this subtitle all or a portion of the eligible cropland on the farm. 

Provides that an owner or producer that enters into a contract 

may subsequently reduce the quantity of contract acreage covered 

by the contract. 

Subject to subsection (h) the Secretary shall provide eligible 

owners and producers on the farm with an opportunity to elect 1 

of the following methods as the method by which the contract acreage for the 2002 through 2006 crops of all contract commodities for 

a farm are determined: (1) the 4-year average of acreage planted 

or considered planted to a contract commodity for harvest, grazing, 

haying, silage, or other similar purposes during the 1998 through 

2001 crop years or (2) contract acreage that would be used to calculate the fiscal year 2002 production flexibility contract payments 

and the 4-year average for each oilseed produced on the farm. 

In making the contract acreage and yield elections, eligible 

owners and producers on a farm shall elect to update the contract 

acreage using the 4-year 1998 through 2001 average acreage and 

the 1998 through 2001 average yield per harvested acre (adjusted 

for years with no planted acreage and at the option of the producer, 

1 additional crop year) or the 2002 production flexibility contract 

crop acreage plus the 4-year average of oilseeds and the farm program payment yield for current contract crops and for oilseeds, the 

1998 through 2001 average yield per harvested acre (adjusted for 

years with no planted acreage and at the option of the producer, 

1 additional crop year). 

At the beginning of each fiscal year, the Secretary shall allow 

an eligible owner or producer on a farm covered by a conservation 

reserve contract that terminated after 180 days after the enactment of this Act to enter into or expand a contract to cover the eligible cropland of the farm that was subject to the former conservation reserve contract. 

421

For the fiscal year and crop year for which a contract acreage 

adjustment is made as a result of the termination of a conservation 

reserve program contract the eligible owners and producers on the 

farm shall elect to receive direct payments and counter-cyclical 

payments with respect to the acreage added to the farm or a prorated payment under the conservation reserve contract. 

The sum of the contract acreage, peanut acres and acreage enrolled in CRP, WRP, or other acreage on a farm enrolled in a voluntary Federal conservation program under which production of 

any agricultural commodity is prohibited, cannot exceed the actual 

cropland acreage on a farm. The Secretary shall give owners and 

producers on the farm the opportunity to select contract acreage or 

peanut acres against which the reduction will be made. The Secretary shall take into account additional acreage as a result of an 

established double-cropping history on a farm. (Section 111) 

The Conference substitute provides that for the purpose of 

making direct and counter-cyclical payments to a farm, the Secretary shall give an owner of the farm an opportunity to elect the 

method by which the base acres of all covered commodities on the 

farm are to be determined. Subject to the provision requiring the 

base acreage to be determined based on a 4-year average, including 

the years in which the crop was not planted, and the treatment of 

multiple plantings or prevented planting on the same acreage, owners may choose the farms crop acreage base by either: (1) using the 

acreage planted on the farm to covered commodities for harvest, 

grazing, haying, silage, or other similar purposes for the 1998 

through 2001 crop years including any acreage on the farm that 

the producers were prevented from planting to covered commodities 

because of drought, flood, or other natural disaster, or other condition beyond the control of the producers, as determined by the Secretary or (2) contract acreage that would be used to calculate the 

fiscal year 2002 production flexibility contract payments and the 4-

year average for each oilseed produced on the farm for the 1998 

through 2001 crop years. The eligible acreage for each oilseed on 

a farm shall be the average of each oilseed for the 1998 through 

2001 crop years, except that the total acreage for all oilseeds on the 

farm for a crop year may not exceed the difference between the 

total acreage determined for all covered commodities for that crop 

year and the total contract acreage used by the Secretary to calculate the fiscal year 2002 production flexibility contract payment. 

The owner of a farm may increase the eligible acreage for an 

oilseed on the farm by reducing the production flexibility contract 

acreage for one or more covered commodities on an acre-for-acrebasis, except that the total base acreage for each oilseed on the 

farm may not exceed the 4-year average of each oilseed. 

The Secretary shall not exclude any crop year in which a covered commodity was not planted for purposes of determining a 4-

year acreage average. 

For the purposes of determining the 4-year average of acreage 

planted or prevented from being planted during the 1998 through 

2001 crop years to covered commodities, acreage that was planted 

or prevented from being planted that was devoted to another covered commodity in the same crop year may only be used in the 

base calculation after the owner determines whether the initial 

422

commodity or the subsequent commodity, but not both, will be 

used. 

As soon as practicable after the date of enactment of this Act, 

the Secretary shall provide notice to owners of farms regarding 

their opportunity to make the applicable base election. The notice 

shall include: (1) notice that the opportunity of an owner to make 

the election is being provided only once and (2) information regarding the manner in which the election must be made and the time 

periods and manner in which notice of the election must be submitted to the Secretary. 

The owner may make an election of base acres only once and 

must provide notice of the election to the Secretary within the time 

period and in the manner prescribed by the Secretary. If an owner 

fails to make an election of base acreage, or fails to timely notify 

the Secretary of the election made, the owner shall be deemed to 

have chosen base acres reflecting the production flexibility contract 

acreage, plus oilseeds if applicable. 

The election made by the producer shall apply to all covered 

commodities on the farm. 

The Secretary shall provide for an appropriate adjustment in 

the base acres for covered commodities for a farm whenever land 

under a conservation reserve contract expires, is voluntary terminated, or is released by the Secretary. 

For the crop year in which a base acre adjustment is first 

made, the owner on the farm shall elect to receive either direct 

payments and counter-cyclical payments with respect to the acreage added to the farm or a prorated payment under the conservation reserve contract, but not both. 

Payment acres for both the direct and the counter-cyclical payment shall be equal to 85% of the base acres. 

The sum of base acres, base acres for peanuts and acreage enrolled in CRP, WRP, or other conservation programs which restrict 

or prohibit the production of an agricultural commodity cannot exceed the actual cropland acreage on the farm. The Secretary shall 

give producers on the farm the opportunity to select base acres or 

base acres for peanuts against which the reduction will be made. 

The Secretary shall make an exception in the case of double cropping. 

The owner of a farm may reduce, at any time, base acreage for 

any covered commodity for the farm provided the reduction of base 

acreage is permanent. 

In implementing Section 1101, the Secretary shall also allow 

owners of a farm who did not hold a production flexibility contract 

under the Federal Agriculture Improvement and Reform Act of 

1996 to elect to calculate base acreage for planting history on the 

farm for crop years 1998–2001. The intent of this section is to provide the opportunity to owners to update base acreage to reflect a 

more recent planting history, to allow owners not holding a production flexibility contract to receive farm program benefits under this 

Act, and to allow owners holding production flexibility contracts the 

opportunity to retain their base acreage and add oilseeds in a limited manner. 

The Managers expect the Secretary to recognize that although 

the owner of the farm will be allowed the opportunity to make the 

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applicable base election under Section 1101, it is important that 

other producers on the farm are notified of the acreage options 

available to the owner. In addition to providing notice to the owner 

of the farm, the Managers expect the Secretary to provide notice 

to operators or producers on a farm of the owner’s opportunity to 

elect the method in which to calculate base acres at the time the 

Secretary provides notice to the owner. 

The Managers are aware that production flexibility contract 

acreage was not protected on acreage enrolled into the Conservation Reserve Program during CRP signup number 15 and later. 

The Managers intend that the Secretary develop a method that 

provides for the restoration of base acreage on farms that permanently reduced contract acreage because of enrollment in CRP. 

Since soybeans and other oilseeds did not have contract acreage 

prior to this Act, the Managers expect the Secretary to treat soybeans and other oilseeds in a manner that is similar and consistent 

with other covered commodities. (Section 1101) 

(6) Elements of Contracts 

The Senate amendment provides the Time for Contracting—

(1) Commencement.—To the extent practicable, the Secretary 

shall commence entering into contracts not later than 45 days after 

the date of enactment of this title. 

(2) Except as provided in paragraph the Secretary may not 

enter into a contract after the date that is 180 days after the date 

of enactment. 

(3) At the beginning of each fiscal year, the Secretary shall 

allow an eligible owner or producer on a farm with a conservation 

reserve contract that terminated after the final date to enroll eligible cropland in a direct and counter-cyclical payment contract to 

enter into or expand a contract to cover the eligible cropland that 

was subject to the former conservation reserve contract. 

Duration of Contract.—The term of a contract shall begin with 

the 2002 crop or in the case of acreage that was subject to a conservation reserve contract that is subsequently terminated, the 

date the contract was entered into or expanded to cover the terminated acreage. Unless earlier terminated by eligible owners or producer, the contract shall extend through the 2006 crop. (Section 

111) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(7) Availability of Fixed, Decoupled Payments 

The House bill provides that the Secretary shall make fixed decoupled payments to eligible producers for each of the 2002 through 

2011 crop years at a payment rate of $0.53 per bushel for wheat, 

$0.30 per bushel for corn, $0.36 per bushel for grain sorghum, 

$0.25 per bushel for barley, $0.025 per bushel for oats, $0.0667 per 

pound for upland cotton, $2.35 per hundredweight for rice, $0.42 

per bushel for soybeans, and $0.0074 per pound for other oilseeds. 

The amount of the fixed, decoupled payment will be equal to 

the product of the payment rate of the applicable base crop, the 

payment acres, and the payment yield. 

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Fixed decoupled payments shall be paid no later than September 30 of fiscal years 2002 through 2011, except that in fiscal 

year 2002 payments may be made on or after December 1, 2001. 

A producer may elect to receive 50 percent of the fixed decoupled payment in advance anytime on or after December 1 of a fiscal 

year. The producer may change the selected date for a subsequent 

fiscal year by providing advance notice to the Secretary. 

If a producer who receives an advance fixed decoupled payment 

ceases to be an eligible producer by the time final fixed decoupled 

payments are to be made, the producer must repay the advance 

amount. 

The Senate amendment provides that the Secretary shall make 

direct payments available to eligible owners and producers that 

have entered into a contract at a payment rate as follows:

2002–03 2004–05 2006 

Wheat (bu) ................................................................................................ $0.45 $0.225 $0.113

Corn (bu) ................................................................................................... 0.27 0.135 0.068

Barley (bu) ................................................................................................ 0.20 0.100 0.050

Oats (bu) ................................................................................................... 0.05 0.025 0.013

Cotton (lb) ................................................................................................. 0.13 0.065 0.0325

Rice (cwt) .................................................................................................. 2.45 2.400 2.400

Soybeans (bu) ........................................................................................... 0.55 0.275 0.138

Other oilseeds (lb) .................................................................................... 0.01 0.005 0.0025

Grain sorghum (bu) .................................................................................. 2002—0.31 0.135 0.068

2003—0.27 

The amount of direct payment will be equal to the product of 

the payment rate for the contract crop for the applicable year, contract acreage and the payment yield. 

A final direct payment (less the amount of any initial payment 

made to the producers on the farm of the contract commodity) shall 

be made not later than September 30 of the fiscal year. 

A producer may elect to receive 50% of the direct payment in 

advance anytime on or after December 1 of the fiscal year. (Section 

111) 

The Conference substitute provides that the Secretary shall 

make direct payments to eligible producers for each of the 2002 

through 2007 crop years at a payment rate of $0.52 per bushel for 

wheat, $0.28 per bushel for corn, $0.35 per bushel for grain sorghum, $0.24 per bushel for barley, $0.024 per bushel for oats, 

$0.0667 per pound for upland cotton, $2.35 per hundredweight for 

rice, $0.44 per bushel for soybeans, and $0.008 per pound for other 

oilseeds. 

The amount of the direct payment will be equal to the product 

of the payment rate of the applicable base crop, the payment acres, 

and the payment yield. 

For 2002, the Secretary is directed to make payments as soon 

as practicable after the date of enactment of this Act and for 2002 

through 2007, but not before October 1 of the calendar year in 

which the crop of the covered commodity is harvested. 

A producer may elect to receive up to 50 percent of the direct 

payment in advance in any month after December 1 of the calendar 

year before the calendar year in which the crop of the covered commodity is harvested. The producer may change the selected month 

425

for a subsequent crop year by providing advance notice to the Secretary. 

If a producer who receives an advance fixed decoupled payment 

ceases to be a producer or changes share before the date the remainder of the direct payments are to be made, the producer must 

repay the applicable amount of the advance payment. 

The Managers are aware that producers that elect to receive 

up to 50 percent of an advance direct payment might cease to be 

a producer on the farm before the date the remainder of the direct 

payment is made. The Managers assume the Secretary recognizes 

that different reasons exist for a producer ceasing to be a producer 

on a farm. These reasons would include bankruptcy, foreclosure 

and other similar situations that would preclude the producer from 

repaying the advance direct payment. Specifically, the Managers 

would not intend for this provision to apply in situations where a 

producer with winter wheat harvested a crop or failed to harvest 

the crop for weather related reasons beyond their control and the 

acreage was subsequently under the control of another producer 

that intended to plant a subsequent crop, or other similar situations. Conversely, the Managers expect there are a number of situations where the producer receiving the advance direct payment 

ceases to be a producer on the farm and should refund the advance 

direct payment. (Section 1103) 

(8) Availability of Counter-Cyclical Payments 

The House bill provides that the Secretary shall make countercyclical payments relative to a covered commodity whenever the effective price is less than the target price. 

The target price is $4.04 per bushel for wheat, $2.78 per bushel for corn, $2.64 per bushel for grain sorghum, $2.39 per bushel 

for barley, $1.47 per bushel for oats, $0.736 per pound for upland 

cotton, $10.82 per hundredweight for rice, $5.86 per bushel for soybeans, and $0.1036 per pound for other oilseeds. 

The effective price is equal to the sum of (1) the higher of the 

national average market price during the 12-month marketing year 

for the commodity or the national average loan rate for the commodity, and (2) the payment rate for fixed decoupled payments for 

the commodity. 

The payment rate for counter-cyclical payments is equal to the 

difference between the target price and the effective price for the 

commodity. 

The payment amount for counter-cyclical payments is the product of the payment rate, the payment acres, and the payment yield. 

The Secretary shall make counter-cyclical payments for a covered commodity as soon as possible after determining that such 

payments are required. 

The Secretary may provide a partial payment up to 40 percent 

of the projected counter-cyclical payment to producers upon completion of the first 6 months of the marketing year for that crop. 

The producer must repay the amount, if any, by which the partial payment exceeds the counter-cyclical payment to be made in 

that crop year. 

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If the Secretary uses the authority to designate another oilseed 

for counter-cyclical payments the Secretary may modify the target 

price in subsection (c)(9) that would otherwise apply to that oilseed. 

For purposes of calculating the effective price for barley the 

Secretary shall use the loan rate in effect for barley under section 

122(b)(3) except in the case of producers who received the higher 

loan rate provided under such section for barley used only for feed 

purposes, the Secretary shall use the that higher loan rate. (Section 105) 

The Senate amendment provides that the Secretary shall make 

counter-cyclical payments relative to a contract commodity to owners and producers on a farm that have entered into a contract to 

receive such payments. The income protection price is $3.4460 per bushel for wheat, $2.3472 per bushel for corn, $2.3472 per bushel for grain sorghum, 

$2.1973 per bushel for barley, $1.5480 per bushel for oats, $0.6793 

per pound for upland cotton, $9.2914 per hundredweight for rice, 

$5.7431 per bushel for soybeans, and $0.1049 per pound for other 

oilseeds. 

The payment rate for counter-cyclical payments shall equal the 

difference between the income protection price and the total of the 

higher of (1) the average price of the contract commodity during 

the first 5 months of the marketing year of the contract commodity 

or the loan rate for the commodity, and (2) the direct payment for 

the contract crop for the fiscal year that precedes the date of payment under this section. 

The payment amount for counter-cyclical payments is the product of the payment rate for the contract crop, the contract acreage, 

and the payment yield. 

The Secretary shall make counter-cyclical payments not later 

than 190 days after the beginning of the marketing year for the applicable contract crop. (Section 114) 

The Conference substitute provides that the Secretary shall 

make counter-cyclical payments to producers on farms for which 

payment yields and bases acres are established with respect to a 

covered commodity whenever the effective price is less than the 

target price. 

The effective price is equal to the sum of (1) the higher of the 

national average market price during the 12-month marketing year 

for the commodity or the national average loan rate for the commodity, and (2) the payment rate for direct payments for the commodity. 

For the 2002 and 2003 crop years, the target price is $3.86 per 

bushel for wheat, $2.60 per bushel for corn, $2.54 per bushel for 

grain sorghum, $2.21 per bushel for barley, $1.40 per bushel for 

oats, $0.724 per pound for upland cotton, $10.50 per hundredweight for rice, $5.80 per bushel for soybeans, and $0.098 per 

pound for other oilseeds. 

For the 2004 and 2007 crop years, the target price is $3.92 per 

bushel for wheat, $2.63 per bushel for corn, $2.57 per bushel for 

grain sorghum, $2.24 per bushel for barley, $1.44 per bushel for 

oats, $0.724 per pound for upland cotton, $10.50 per hundredweight for rice, $5.80 per bushel for soybeans, and $0.1010 per 

pound for other oilseeds. 

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The payment rate for counter-cyclical payments is equal to the 

difference between the target price and the effective price for the 

commodity. 

The payment amount for counter-cyclical payments is the product of the payment rate, the payment acres, and the payment yield 

or updated payment yield, depending on the election of the owner 

of the farm. 

If the Secretary determines that a counter-cyclical payment is 

required to be made for a covered commodity, the Secretary shall 

make the counter-cyclical payments for the crop as soon as practicable after the end of the 12-month marketing year for the covered commodity. 

If the Secretary estimates counter-cyclical payments will be required, the Secretary shall give producers the option to receive partial payments. 

When the Secretary makes partial payments for any of the 

2002 through 2006 crop years, the first partial payment for the 

crop shall be made not earlier than October 1 and to the maximum 

extent practicable, not later than October 31, of the calendar year 

in which the crop is harvested. The second partial payment shall 

be made not earlier than February 1 of the next calendar year and 

the third and final partial payment shall be made as soon as practicable after the end of the 12-month marketing year for the covered commodity. 

For the 2002 through 2006 crop years, the first partial payment may not exceed 35 percent of the projected counter-cyclical 

payment for the covered commodity for the crop year. The second 

partial payment may not exceed the difference between 70 percent 

of the revised projection of the counter-cyclical payment for the 

crop of the covered commodity and the amount of the payment 

made under clause (i). The final payment shall be equal to the difference between the actual counter-cyclical payment to be made to 

the producer and the amount of the first and second partial payment. 

For the 2007 crop year, the first partial payment shall be made 

after completion of the first 6 months of the marketing year and 

the second and final partial payment shall be made as soon as 

practicable after the end of the 12-month marketing year for the 

covered commodity. 

For the 2007 crop year, the first partial payment may not exceed 40 percent of the projected counter-cyclical payment. The final 

payment shall be equal to the difference between the actual 

counter-cyclical payment to be made to the producer and the 

amount of the partial payment. 

The producer must repay the amount, if any, by which the partial payment exceeds the counter-cyclical payment to be made in 

that crop year. (Section 1104) 

(9) Producer Agreement Required as Condition on Provision of 

Fixed, Decoupled Payments and Counter-Cyclical Payments 

The House bill provides that before producers on a farm may 

receive fixed, decoupled payments or counter-cyclical payments 

with respect to the farm, the producers shall agree, in exchange for 

the payments to comply with applicable conservation requirements, 

428

applicable wetland protection requirements, planting flexibility requirements and to use the land on the farm, in an amount equal 

to the base acres, for an agricultural or conserving use, and not for 

a nonagricultural commercial or industrial use, as determined by 

the Secretary. 

The Secretary may issue such rules to ensure compliance with 

these requirements. 

A producer may not be required to make repayments to the 

Secretary of fixed, decoupled payments and counter-cyclical payments if the farm has been foreclosed on and the Secretary determines that forgiving the repayments is appropriate to provide fair 

and equitable treatment. This subsection shall not void the responsibilities of the producer to comply with conservation, wetlands protection, planting flexibility and agriculture land use requirements 

if the producer continues or resumes operation, or control of the 

farm. On the resumption of operation or control over the farm by 

the producer, the above noted requirements in effect on the date 

of the foreclosure shall apply. 

A transfer of (or change in) the interest of a producer in base 

acres for which fixed decoupled or counter-cyclical payments are 

made shall result in the termination of the payments with respect 

to bases acres, unless the transferee or owner of the acreage agrees

to assume all obligations under conservation, wetland, planting 

flexibility or agriculture land use provisions. The termination shall 

be effective on the date of the transfer or change. 

There is no restriction on the transfer of base acres or payment 

yield as part of a change in the producers on the farm. 

At the request of the transferee or owner, the Secretary may 

modify the conservation, wetlands protection, planting flexibility 

and agriculture land use requirements if the modifications are consistent with the objectives of such subsection, as determined by the 

Secretary. 

If a producer entitled to a fixed, decoupled payment or countercyclical payment dies, becomes incompetent, or is otherwise unable 

to receive the payment, the Secretary shall make the payment, in 

accordance with regulations prescribed by the Secretary. 

Requires a producer who receives fixed decoupled payments, 

counter-cyclical payments, or marketing loan assistance to submit 

acreage reports to the Secretary. 

A determination of the Secretary under this section shall be 

considered an adverse decision for purposes of availability of administrative review. (Section 106) 

The Senate amendment provides that under the terms of a 

contract, the owner or producer shall agree, in exchange for annual 

payments to comply with applicable highly erodible land conservation requirements, applicable wetland conservation requirements, 

planting flexibility requirements and to use a quantity of land on 

the farm equal to the contract acreage, for an agricultural or conserving use, and not for a nonagricultural commercial or industrial 

use, as determined by the Secretary. (Section 111) 

The Conference substitute provides that before producers on a 

farm may receive direct payments or counter-cyclical payments 

with respect to the farm, the producers shall agree, in exchange for 

the payments to comply with applicable conservation requirements, 

429

applicable wetland protection requirements, planting flexibility requirements, to use the land on the farm in a quantity attributable 

to the base acres for an agricultural or conserving use and not for 

a nonagricultural commercial or industrial use, as determined by 

the Secretary and on noncultivated land attributable to the base 

acres, control noxious weeds and otherwise maintain the land in 

accordance with sound agricultural practices. 

The Secretary may issue rules to ensure compliance with these 

requirements. 

At the request of the transferee or owner, the Secretary may 

modify the requirements of this subsection if the modifications are 

consistent with the objectives of such subsection, as determined by 

the Secretary. 

A transfer of (or change in) the interest of a producer in base 

acres for which direct or counter-cyclical payments are made shall 

result in the termination of the payments with respect to base 

acres, unless the transferee or owner of the acreage agrees to assume all obligations under conservation, wetland, planting flexibility, agriculture land use provisions and controlling noxious 

weeds provisions. The termination shall take effect on the date determined by the Secretary. 

If a producer entitled to a direct payment or counter-cyclical 

payment dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment, in accordance with regulations prescribed by the Secretary. 

A producer who receives direct payments, counter-cyclical payments, or marketing loan benefits is required to submit annual 

acreage reports with respect to all cropland on the farm to the Secretary. 

The Secretary shall provide adequate safeguards to protect the 

interests of tenants and sharecroppers. 

The Secretary shall provide for the sharing of direct payments 

and counter-cyclical payments among the producers on a farm on 

a fair and equitable basis. 

When there is a transfer (or change in) the interest of a producer in base acres for which direct or counter-cyclical payments 

are made, the Managers intend for the Secretary to provide a time 

frame for the succession to occur that is farmer-friendly. 

Acreage reports provide important information such as assisting in determining the eligibility of land to be accepted into the 

Conservation Reserve Program. The Managers are aware that in 

prior years, the Secretary has imposed penalties on producers that 

submit acreage reports that the Secretary later determines to be 

inaccurate. The Managers understand that under prior acreage 

limiting and acreage reduction programs there was a need for very 

accurate reporting. However, under this Act, with the exception of 

determining the amount of fruits, vegetables, and wild rice planted 

on base acreage, there is no such need or requirement for the level 

of accuracy. Therefore, under this provision the Managers do not 

intend for any penalty to be applicable to inaccurate acreage reports on covered commodities or peanuts, provided the producer 

has made a good faith effort to accurately report acreage. (Section 

1105) 

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(10) Violations of Contracts 

The Senate amendment is the same as current law except for 

amending language in existing law to add a provision for a planting flexibility violation. Makes corrections to add: 

Planting Flexibility.—In the case of a first violation of the 

planting flexibility provisions by an eligible owner or producer that 

has entered into a contract and that acted in good faith, in lieu of 

terminating the contract under subsection (a), the Secretary shall 

require a refund or reduce a future contract payment under subsection (b) in an amount that does not exceed twice the amount 

otherwise payable under the contract on the number of acres involved in the violation. (Section 112) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(11) Planting Flexibility 

The House bill provides that all rules concerning planting flexibility are unchanged with the exception of adding wild rice as a 

prohibited crop. 

Subject to the limitations in subsection (b), any commodity 

may be planted on base acres on a farm. 

The planting of fruits, vegetables (excluding lentils, mung 

beans, and dry peas) and wild rice are prohibited on base acres. 

The 3 exceptions to this rule in current law are also unchanged. 

(1) Fruits, vegetables or wild rice may be planted on base acres 

in a region where the Secretary determines there is a history of 

double cropping of covered commodities with fruits, vegetables or 

wild rice. 

(2) Fruits, vegetables or wild rice may be planted on base acres 

on a farm that the Secretary determines has a history of planting 

fruits, vegetables or wild rice on base acres, except that fixed decoupled payments and counter-cyclical payments will be reduced 

for each acre planted. Fruits and vegetables also may be planted 

by a producer who the Secretary determines has an established 

planting history of a specific fruit, vegetable or wild rice, except 

that the quantity planted may not exceed the producer’s annual 

planting history of such agricultural commodity from the 1991 

through 1995 crop years, as determined by the Secretary, and 

fixed, decoupled payments and counter-cyclical payments will be reduced for each acre planted. (Section 107) 

The Senate amendment provides that all rules concerning 

planting flexibility are unchanged with the exception of adding 

chickpeas as a permitted exception, wild rice as a prohibited crop 

for 2003 and beyond, and by changing the base period from 1991 

through 1995 to 1996 through 2001 to establish a planting history 

for a producer. 

Limitations.—The planting of the following agricultural commodities shall be prohibited on contract acreage: (A) Fruits. (B) 

Vegetables (other than lentils, mung beans, dry peas, and chickpeas). (C) In the case of the 2003 and subsequent crops of an agricultural commodity, wild rice; 

Same as current law except for the change in base period (for 

a producer) as noted directly below. 

431

Sec. 118(b)(2)(C) by striking ‘‘1991 through 1995’’ and inserting ‘‘1996 through 2001’’. (Section 113) 

The Conference substitute adopts the House provision with an 

amendment that provides that the planting of fruits, vegetables 

(other than lentils, mung beans and dry peas) and wild rice shall 

be prohibited on base acreage unless the commodity, if planted, is 

destroyed before harvest. 

The planting of fruits and vegetables produced on trees and 

other perennials shall be prohibited on base acres. 

The Secretary shall establish a producer planting history for 

fruits, vegetables and wild rice planted by the producers on the 

farm in the 1991 through 1995 or 1998 through 2001 crop years. 

For the 2002 crop year, if the calculation of base acres results 

in total base acres for a farm in excess of the contract acreage for 

the farm that was used to calculate the fiscal year 2002 payment, 

the planting of fruits, vegetables and wild rice on new base acres 

is allowed, provided the direct and counter-cyclical payments for 

the 2002 crop year are reduced on an acre-for-acre basis. (Section 

1106) 

(12) Relation to Remaining Payment Authority Under Production 

Flexibility Contracts 

The House bill provides authority to make production flexibility contract payments for the 2002 fiscal year is terminated upon 

enactment. If a producer receives a PFC contract payment for the 

2002 fiscal year before enactment of this legislation, the amount of 

the producer’s fixed decoupled payment for fiscal year 2002 will be 

reduced by the amount of the PFC contract payment. (Section 108) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment that terminates the authority of the Secretary to make 

production flexibility contract payments on the date of the enactment of this Act, unless requested by the producer. Any direct payments due a producer under this Act would be reduced by any fiscal year 2002 payments made under a production flexibility contract. (Section 1107) 

(13) Payment Limitations 

The House bill provides fixed decoupled payments and countercyclical payments are subject to the payment limitations contained 

in sections 1001 through 1001C of the Food Security Act of 1985 

as amended. Limitations are based on a crop year and the fixed, 

decoupled limitation is $50,000 and the counter-cyclical limitation 

is $75,000. (Section 109) 

The Senate amendment amends Section 1001 of the Food Security Act of 1985. The total of direct and counter-cyclical payments 

that an individual or entity may receive during any fiscal year for 

program commodities shall not exceed $75,000. The total of marketing loan gains, forfeiture gains, gains from marketing certificates and loan deficiency payments that a person is entitled to receive for program crops, peanuts, honey and wool is $150,000 per 

crop year. 

During a fiscal and corresponding crop year, the total amount 

of payments and benefits that a married couple may receive from 

432

direct, counter-cyclical and marketing loan is $75,000 and $150,000 

respectively, plus a combined total of an additional $50,000. 

Provides that an individual or entity shall not be eligible for 

a direct, income-protection and marketing loan program benefits if 

the average adjusted gross income of the individual or entity exceeds $2.5 million. (Section 169) 

The Conference substitute provides the total direct and 

counter-cyclical payments to a person for corn, grain sorghum, barley, oats, wheat, soybeans, minor oilseeds, cotton and rice may not 

exceed $40,000 and $65,000, respectively. The total marketing loan 

gains and loan deficiency payments for corn, grain sorghum, barley, 

oats, wheat, soybeans, minor oilseeds, cotton, rice, lentils, dry peas 

and small chickpeas that a person is entitled to receive is $75,000. 

Provides for a separate direct and counter-cyclical payment limitation for peanuts of $40,000 and $65,000, respectively. Provides for a separate marketing loan gain and loan deficiency payments limitation for peanuts, wool, mohair and honey of $75,000. 

Retains current rules on husband and wife, 3-entities, actively engaged, generic certificates and adopts the $2.5 million adjusted 

gross income means test. 

The Conference substitute refers to levels of adjusted gross income or comparable measures of income. The Managers intend that 

the comparable measure provision be utilized when necessary and 

in cases of applicants for whom, because of their status under the 

Internal Revenue Code, adjusted gross income is not measured or 

reported. For example, participants who are organized as C Corporations, S Corporations, or as nonprofit organizations, the Managers intend for the Secretary to use this direction to adopt alternative income measurements that compare most closely to adjusted 

gross income. The Managers expect the Secretary to implement 

this provision in a manner that provides equitable treatment, to 

the maximum extent practicable to all producers regardless of the 

legal structure of their farming operation. 

For purposes of subsection (b), the Managers expect the Secretary to determine the individual or entity to be ineligible only if 

the adjusted gross income or similar equivalent exceeds $2.5 million and less than 75 percent of the adjusted gross income is derived from farming, ranching or forestry operations as determined 

by the Secretary. (Section 1603) 

(14) Period of Effectiveness 

The House bill provides that the subtitle is effective from the 

2002 crop year through the 2011 crop year. (Section 110) 

The Senate amendment provides that the term of a contract 

shall extend through the 2006 crop, unless earlier terminated by 

the eligible owners or producers on a farm. (Section 111) 

The Conference substitute adopts the House provision with an 

amendment that the subtitle is effective through the 2007 crop 

year. (Section 1109) 

(15) Pilot Program for Farm Counter-Cyclical Savings Accounts 

The Senate amendment amends Subtitle B of title I of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C 

7211 et seq.) to authorize and fund a pilot program for farm 

433

counter-cyclical savings accounts. Eligible producers may establish 

such accounts in the name of the producer in a bank or financial 

institution selected by the producer and approved by the Secretary 

of Agriculture. A savings account shall consist of B contributions of 

the producer; matching contributions of the Secretary; and interest 

earned on account balances. 

To be eligible, a producer must share in the risk of producing 

an agricultural commodity for the applicable year; have filed a 

farm business-related federal income tax return during each of the 

previous 5 years, or be a beginning farmer or rancher, and have 

at least $50,000 in average adjusted gross farm revenue, except for 

limited resource farmers as determined by the Secretary. 

An eligible producer may deposit such amounts in the account 

of the producer as the producer considers appropriate. The Secretary shall provide a matching contribution on the amount deposited by the producer into the account, except that matching contributions may not exceed 2 percent of the producer’s average adjusted gross farm revenue, or $5,000 for any applicable fiscal year. 

The Secretary shall provide the required matching contributions for 

a producer as of the date that a majority of the commodities grown 

by the producer are harvested. 

In any year, a producer may withdraw funds from the account 

in an amount up to the difference between 90 percent of the producer’s average adjusted gross revenue and the producers adjusted 

gross revenue in that year. A producer that ceases to be actively 

engaged in farming, as determined by the Secretary, may withdraw 

the full balance from, and close, the account; and may not establish 

another account. 

The Secretary shall administer this program through the Farm 

Service Agency and local, county, and area offices of the Agriculture Department. For each of fiscal years 2003 through 2005, 

the Secretary shall establish a farm counter-cyclical savings account pilot program in 3 States, as determined by the Secretary. 

The total amount of matching contributions in a State may not exceed $4 million per State for each of fiscal years 2003 through 

2005. (Section 114) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

SUBTITLE B—MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY

PAYMENTS

(16) Availability of Nonrecourse Marketing Assistance Loans for 

Covered Commodities 

The House bill provides that the Secretary shall make available to producers on a farm nonrecourse marketing assistance 

loans for covered commodities produced on the farm, including 

extra long staple cotton, for each of the 2002 through 2011 crop 

years. 

Any production of a covered commodity on a farm is eligible for 

a marketing assistance loan. 

Producers that would otherwise be eligible for the assistance, 

but for the fact the covered commodity is commingled with covered 

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age of commodities, if the producer obtaining the loan agrees to immediately redeem the loan collateral. 

Producers are required to comply with applicable conservation 

requirements and applicable wetland protection requirements as a 

condition to receiving marketing loan assistance. 

Extra long staple cotton is defined. 

Marketing assistance loans for the 2002 crop of covered commodities shall not be made under subtitle C of title I of such Act. 

(Section 121) 

The Senate amendment provides that the Secretary shall make 

available to producers on a farm nonrecourse marketing assistance 

loans for loan commodities produced on the farm through the 2006 

crop. 

The FAIR Act is amended by striking the definition of eligible 

production and redefining as: Eligible Production.—The producers 

on a farm shall be eligible for a marketing loan under subsection 

(a) for any quantity of a loan commodity produced on the farm. 

Sec. 169 may restrict quantity. (Section 121) 

The Conference substitute provides that the Secretary shall 

make available to producers on a farm nonrecourse marketing assistance loans for loan commodities produced on the farm, including extra long staple cotton, wool, mohair, honey, dry peas, lentils 

and small chickpeas for each of the 2002 through 2007 crop years. 

Any production of a loan commodity on a farm is eligible for 

a marketing assistance loan, however loan commodities harvested 

for hay and silage, and unshorn pelts are eligible only for a loan 

deficiency payment. 

The Secretary shall make loans to producers that would otherwise be eligible for the assistance, but for the fact the loan commodity is commingled with loan commodities of other producers in 

facilities unlicensed for the storage of commodities, if the producer 

obtaining the loan agrees to immediately redeem the loan collateral. 

Producers are required to comply with applicable conservation 

requirements and applicable wetland protection requirements as a 

condition to receiving marketing loan assistance. 

Marketing assistance loans for the 2002 crop of loan commodities shall not be made under subtitle C of title I of the Federal Agriculture Improvement and Reform Act of 1996. 

Beginning with the 2002 crop, the Managers intend for marketing loan and loan deficiency program benefits to be made available for all farms producing loan commodities, regardless of whether the farm does or does not have base acreage. (Section 1201) 

(17) Loan Rates for Nonrecourse Marketing Assistance Loans 

The House bill provides loan rates (per bushel or pound, as applicable) are maintained at not more than $2.58 for wheat, $1.89 

for corn and grain sorghum, $1.65 for barley except not more than 

$1.70 for barley used only for feed purposes, $1.21 for oats, $0.5192 

for upland cotton (and not less than $0.50), $0.7965 for extra long 

staple cotton, $4.92 for soybeans, and $0.087 for other oilseeds, and 

equal to $6.50 per cwt. for rice. 

435

Amends section 162(b) of the FAIR Act by striking ‘‘this title’’ and inserting ‘‘this title and title I of the Farm Security Act of 

2001’’. (Section 122) 

The Senate amendment provides loan rates are $2.9960 per bushel for wheat, $2.0772 per bushel for corn and grain sorghum, 

$1.9973 per bushel for barley, $1.4980 per bushel for oats, $0.5493 

per pound for upland cotton, $0.7965 per pound for extra long staple cotton, $6.4914 per hundredweight for rice, $5.1931 per bushel 

for soybeans, $0.0949 per pound for other oilseeds, $6.78 per hundredweight for dry peas, $12.79 per hundredweight for lentils, 

$17.44 per hundredweight for large chickpeas and $8.10 per hundredweight for small chickpeas. 

Sec. 132(b)(1) of the FAIR Act. No change from existing law except instead of referencing ‘‘commodity’’, ‘‘loan commodity’’ is referenced. 

Sec. 132(b)(2) of the FAIR Act is consistent with Sec 162(b) of 

existing law. Sec. 123(b) Repeals Sec. 162(c) of current law, but 

Sec. 171(b)(2) repeals Sec. 123(b). (Section 123) 

The Conference substitute provides for loan rates for the 2002 

and 2003 crop years that are different than loan rates for the 2004 

through 2007 crop years for most crops. Loan rates for the 2002 and 2003 crop years are $2.80 per bushel for wheat, $1.98 per bushel for corn, $1.98 per bushel for 

grain sorghum, $1.88 per bushel for barley, $1.35 per bushel for 

oats, $0.52 per pound for upland cotton, $0.7977 per pound for 

extra long staple cotton, $5.00 per bushel for soybeans, $0.096 per 

pound for other oilseeds, and $6.50 per hundredweight for rice, 

$6.33 per hundredweight for dry peas, $11.94 per hundredweight 

for lentils and $7.56 per hundredweight for small chickpeas. Loan rates for the 2004 through 2007 crop years are $2.75 per bushel for wheat, $1.95 per bushel for corn, $1.95 per bushel for 

grain sorghum, $1.85 per bushel for barley, $1.33 per bushel for 

oats, $0.52 per pound for upland cotton, $0.7977 per pound for 

extra long staple cotton, $5.00 per bushel for soybeans, $0.093 per 

pound for other oilseeds, and $6.50 per hundredweight for rice, 

$6.22 per hundredweight for dry peas, $11.72 per hundredweight 

for lentils and $7.43 per hundredweight for small chickpeas. 

Loan rates for the 2002 through 2007 crop years are $1.00 per 

pound for graded wool, $0.40 per pound for ungraded wool and 

unshorn pelts and $4.20 per pound for mohair. 

Loan rate for the 2002 through 2007 crop years for honey is 

$0.60 per pound. 

The Managers anticipate the Secretary will take advantage of 

the change in national average loan rates to review and adjust as 

appropriate the county loan rates. 

To the extent practicable, for purposes of making loans and 

loan deficiency payments, the Secretary should designate loan rates 

in those units that are consistent with the units in common usage 

in the industry. 

It is the intention of the Committee that the provision for nongraded wool be made available for wool that has not been objectively measured for fiber diameter (micron) and yield. Documentation of objective measurement is commonly known as a core test, 

which is available through laboratory analysis. It is the intent of 

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the Mangers that the Secretary provide the graded wool loan rate 

to wool that meets the terminology used by the wool industry to define graded wool, such as core tested. (Section 1202) 

(18) Term of Loans 

The House bill provides that the term for marketing assistance 

loans is unchanged. For all covered commodities except upland cotton and extra long staple cotton, the term of the loan is nine 

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

month in which the loan is made. 

For upland cotton and extra long staple cotton, the term of the 

loan is 10 months beginning on the first day of the month in which 

the loan is made. 

Prohibits extension of a marketing assistance loan for a covered commodity. (Section 123) 

The Senate amendment provides that the term for marketing 

assistance loans for all commodities shall be 9 months beginning 

on the first day of the first month after the month in which the 

loan is made. (Section 124) 

The Conference substitute adopts the Senate provision with respect to the term of loans and adopts the House provision with respect to the prohibition on extension of loans. (Section 1203) 

(19) Repayment of Loans 

The House bill provides repayment of marketing assistance 

loans is unchanged. The Secretary will permit producers of wheat, 

corn, grain sorghum, barley, oats, soybeans, and other oilseeds to 

repay a marketing assistance loan at a rate that is the lesser of the 

loan rate for the commodity plus interest or a rate that the Secretary determines will minimize forfeitures, accumulation of stocks, 

storage costs, and allow the commodity to be marketed freely and 

competitively. 

The Secretary will permit producers of upland cotton and rice 

to repay a marketing assistance loan at a rate that is the lesser 

of the loan rate for the commodity plus interest or the prevailing 

world market price (adjusted to U.S. quality and location), as determined by the Secretary. 

The Secretary will permit producers of extra long staple cotton 

to repay a marketing assistance loan at the loan rate plus interest. 

The Secretary will prescribe by regulation the formula to determine the prevailing world market price and a mechanism to periodically announce this price. 

The adjustment of the prevailing world market price for upland cotton is unchanged. 

In the case of a producer that marketed or lost beneficial interest before repaying the loan, the Secretary shall permit the producer to repay the loan at the lowest repayment rate that was in 

effect for the covered commodity under this section as of the date 

that the producer lost beneficial interest. (Section 124) 

The Senate amendment amends Section 134(a) of the FAIR Act 

by striking the reference to wheat, corn, grain sorghum, barley, 

oats and oilseeds and inserting ‘‘a loan commodity (other than upland cotton, rice, and extra long staple cotton)’’ (in effect, adding 

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ities) and adding ‘‘minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries’’ to the 

other 4 factors the Secretary is required to use in determining a 

loan repayment rate. 

Amends Sec. 1001 of the Food Security Act of 1985. Sec. 

1001(c) Limitations on marketing loan gains, loan deficiency payments, and commodity certificate transactions and Sec. 1001(d) 

Settlement of certain loans may restrict the eligibility of some producers to repay loans at a lower repayment rate. 

Amends Sec. 134(e)(1) of the FAIR Act by authorizing the program through July 31, 2007. (Section 125, 121, and 169) 

The Conference substitute permits producers of wheat, corn, 

grain sorghum, barley, oats, soybeans, other oilseeds, dry peas, lentils, small chickpeas, wool, mohair, and honey to repay a marketing 

assistance loan at a rate that is the lesser of the loan rate for the 

commodity plus interest or a rate that the Secretary determines 

will minimize forfeitures, accumulation of stocks, storage costs, 

allow the commodity to be marketed freely and competitively, and 

minimizes discrepancies in marketing loan benefits across State 

boundaries and county boundaries. 

The Secretary will permit producers of upland cotton and rice 

to repay a marketing assistance loan at a rate that is the lesser 

of the loan rate for the commodity plus interest or the prevailing 

world market price (adjusted to U.S. quality and location), as determined in accordance with section 163 of the FAIR Act. 

The Secretary will permit producers of extra long staple cotton 

to repay a marketing assistance loan at the loan rate plus interest 

as determined in accordance with section 163 of the FAIR Act. 

The Secretary will prescribe by regulation the formula to determine the prevailing world market price for upland cotton and rice 

and a mechanism to periodically announce this price. 

The adjustment of the prevailing world market price for upland cotton is unchanged. 

For the 2001 crop, in the case of a producer that marketed or 

lost beneficial interest before repaying the loan, the Secretary shall 

permit the producer to repay the loan at the appropriate repayment rate that was in effect for the loan commodity under as of the 

date that the producer lost beneficial interest, if the Secretary determines the producers acted in good faith. 

The Managers intend that in determining loan repayment 

rates for loan commodities other than upland cotton and rice, the 

Secretary will consider alternative methodologies, including establishing the Posted County Prices for grains and oilseeds at levels 

that reflect market prices at both terminal markets for counties 

with two terminal markets. The Managers expect the Secretary to 

determine whether assigning equal weight to two terminal markets 

will better reflect local market prices than the current system of 

using the higher of the two terminal markets to establish the Posted County Price. 

In implementing the marketing assistance loan program for 

minor oilseeds, the Managers expect the Secretary to establish a 

single sunflower loan rate in each county for oil-type, confection 

and other-type sunflowers combined. Managers also expect the Secretary to continue to announce weekly loan repayment rates for 

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sunflowers reflecting local market prices that minimize potential 

loan forfeitures. Accordingly, sunflower seed loan repayment rates 

should reflect oil-type sunflower seed local market prices. 

The Conference substitute established a marketing assistance 

loan program for pulse crops—dry peas, lentils and small chickpeas. The loan rate for dry peas is based on U.S. feed pea prices; 

the loan rate for lentils is based on the price of U.S. No. 3 lentils; 

and the loan rate for small chickpeas is based on the price of chickpeas that drop below a 20/64 screen. Accordingly, the Managers expect the Secretary to calculate regional pulse loan rates and repayment rates based on the prices of feed peas, No. 3 lentils, and 

chickpeas that drop below a 20/64 screen. (Section 1204) 

(20) Loan Deficiency Payments 

The House bill provides loan deficiency payments are maintained. The Secretary will make loan deficiency payments available 

to producers who, although eligible for a marketing assistance loan, 

agree to forgo a loan in favor of receiving a payment. 

The loan deficiency payment is determined by multiplying the 

loan payment rate by the quantity of the covered commodity produced, excluding any commodity for which the producer obtained a 

loan. 

The loan payment rate is the amount by which the loan rate 

exceeds the rate at which the loan may be repaid. 

Loan deficiency payments do not apply to extra long staple cotton. 

The Secretary shall make a loan deficiency payment on the 

earlier of the date the producer marketed or lost beneficial interest 

in the commodity, or the date the producer requests the payment. 

Provides for loan deficiency payments on crop year 2001 covered commodities on farms that do not have an AMTA contract. 

(Section 125) 

The Senate amendment amends Sec. 135 of the FAIR Act. 

Makes loan deficiency payments available to producers on a farm 

that, although eligible to obtain a marketing assistance loan with 

respect to a loan commodity, agree to forgo obtaining the loan in 

return for payments under this section. 

Strikes subsections (e) and (f) of section 135 of the FAIR Act 

and inserts language comparable to the House provision except the 

provision is applicable for the 2001–2006 crops. The Secretary shall 

make a loan deficiency payment only if the producer has beneficial 

interest in the loan commodity as of the earlier of the date on 

which the producers on the farm marketed or otherwise lost beneficial interest in the loan commodity or the date the producers on 

the farm request the payment. 

Amends section 135(a)(2) to provide for loan deficiency payments on crop year 2001 contract commodities on farms that do not 

have a production flexibility contract. (Section 126) 

The Conference substitute provides for the continuation of loan 

deficiency payments. The Secretary will make loan deficiency payments available to producers who, although eligible for a marketing 

assistance loan, agree to forgo a loan in favor of receiving a payment. 

439

Unshorn pelts, hay and silage derived from a loan commodity 

are not eligible for a marketing assistance loan, however the commodities are eligible for loan deficiency payments when unshorn 

pelts, hay or silage are derived from a loan commodity. 

The loan deficiency payment is determined by multiplying the 

payment rate by the quantity of the loan commodity produced, excluding any commodity for which the producer obtained a loan. 

The payment rate is the amount by which the loan rate exceeds the rate at which the loan may be repaid. 

Provides that the loan deficiency payment for unshorn pelts is 

based on the rate in effect for ungraded wool and the loan deficiency payment for hay and silage is based on the loan commodity 

from which the hay and silage is derived. 

Loan deficiency payments do not apply to extra long staple cotton. 

The Secretary shall make a loan deficiency payment on the 

date the producer requests the payment. 

Provides for loan deficiency payments on crop year 2001 loan 

commodities on farms that do not have an AMTA contract. 

For the 2001 crop, the Secretary shall make a loan deficiency 

payment on the earlier of the date the producer marketed or lost 

beneficial interest in the loan commodity, or the date the producer 

requested the payment. (Section 1205) 

(21) Payments in Lieu of Loan Deficiency Payments for Grazed 

Acreage 

The House bill provide that the Secretary will make payments 

in lieu of loan deficiency payments for grazed acreage to producers 

that would be eligible for such a loan deficiency payment for wheat, 

barley, or oats but elects to use the acreage planted to the crops 

for livestock grazing. 

To receive a payment, the producer must agree to forgo any 

other harvesting of the commodity on that acreage. 

The payment amount is determined by multiplying the loan 

deficiency payment rate by the payment quantity, which is determined by multiplying the quantity of grazed acreage in which the 

producer elects to forgo harvesting by the payment yield. 

The time, manner, and availability of these payments are to be 

consistent with the general loan deficiency payment and marketing 

assistance loan provisions for wheat, barley, and oats. 

Producers who receive a loan deficiency payment under this 

section are ineligible for crop insurance or noninsured crop assistance as to that acreage. (Section 126) 

The Senate amendment adds Sec. 138 to Subtitle C of the 

FAIR Act. The Secretary will make payments in lieu of loan deficiency payments for grazed acreage to producers that would be eligible for such a loan deficiency payment for wheat, grain sorghum, 

barley, or oats but who elect to use the acreage planted to the crops 

for livestock grazing. 

To receive a payment, the producer must agree to forgo any 

other harvesting of the commodity on that acreage. 

The payment amount is determined by multiplying the loan 

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mined by multiplying the quantity of grazed acreage in which the 

producer elects to forgo harvesting by the payment yield. 

The time, manner, and availability of these payments are to be 

consistent with the general loan deficiency payment and marketing 

assistance loan provisions for wheat, grain sorghum, barley, and 

oats. 

Producers who receive a loan deficiency payment under this 

section are ineligible for crop insurance or noninsured crop assistance as to that acreage. (Section 127) 

The Conference substitute adopts the House provision with an 

amendment that provides payments to producers with triticale for 

grazing when the producer agrees to forgo any other harvesting of 

the acreage. 

For purposes of determining the loan deficiency payment to be 

used in calculating the payment for the grazing of triticale acreage 

only, the Managers intend for the Secretary to take into account 

the predominate class of wheat grown in the county in which the 

farm is located. (Section 1206) 

(22) Special Marketing Loan Provisions for Upland Cotton 

The House bill provides that the special marketing loan provisions for upland cotton remain unchanged, including provisions relating to cotton user marketing certificates, the special import 

quota, and the limited global import quota for upland cotton. 

Authorizes through July 31, 2012. (Section 127) 

The Senate amendment amends section 136(a) of the FAIR Act 

by adding language that removes the 1.25-cent threshold for Step2 cotton payments beginning on the date of enactment of this paragraph and ending on July 31, 2003. 

Amends Sec. 136 of the FAIR Act by authorizing program 

through July 31, 2007. (Section 121 and 128) 

The Conference substitute adopts the House provision with an 

amendment that accepts the Senate provision removing the 1.25-

cent threshold for cotton Step-2 payments through July 31, 2006. 

(Section 1207) 

(23) Special Competitive Provisions for Extra Long Staple Cotton 

The House bill provides that the special competitive provisions 

for extra long staple cotton remain unchanged, including provisions 

relating to the competitiveness program, payments under the program, eligibility, and the amount and form of payment. (Section 

128) 

The Senate amendment amends Sec. 136(A)(a) of the FAIR Act 

by authorizing the program through July 31, 2007. (Section 121) 

The Conference substitute adopts the House provisions 

through July 31, 2008. (Section 1208) 

(24) Availability of Recourse Loans for High Moisture Feed Grains 

and Seed Cotton and other Fibers 

The House bill provides that the availability of recourse loans 

for high moisture feed grains and seed cotton remains unchanged. 

Authority under the FAIR Act to provide this assistance for the 

2002 crop year is terminated. (Section 129) 

441

The Senate amendment amends Sec. 137 of the FAIR Act by 

authorizing the loans through the 2006 crops. Otherwise retains 

current law. (Section 121) 

The Conference substitute adopts the House provision with an 

amendment that provides that a loan under this subsection shall 

be made on a quantity of acquired grain determined by multiplying 

the acreage in a high moisture state on the farm by the lower of 

the farm program payment yield used for counter-cyclical payments 

under subtitle A or the actual yield on a field, as determined by 

the Secretary. (Section 1209) 

(25) Availability of Nonrecourse Marketing Assistance Loans for 

Wool and Mohair 

The House bill provides that the Secretary will make nonrecourse marketing assistance loans available to producers of wool 

and mohair for the 2002 through 2011 marketing years. 

The graded wool loan rate is not more than $1.00 per pound. 

The non-graded wool loan rate is not more than $0.40 per pound. 

The mohair loan rate is not more than $4.20 per pound. 

The term of the loan is one year beginning on the first day of 

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

Producers may repay the loan at a rate that is the lesser of the 

loan rate established for the commodity plus interest or at a rate 

that the Secretary determines will minimize forfeitures, accumulation of stocks, storage costs, and that allows the commodity to be 

marketed freely and competitively. 

Loan deficiency payments are also authorized to those producers who agree to forgo obtaining a loan. 

The loan payment rate shall be the amount by which the loan 

rate in effect for the commodity exceeds the rate at which a loan 

may be repaid. 

The Secretary shall make a loan deficiency payment on the 

earlier of the date the producer marketed or lost beneficial interest 

in the commodity or the date the producer requests the payment. 

The marketing loan gains and loan deficiency payment a producer may receive under the wool and mohair program is subject 

to a separate but equal payment limitation than other covered commodities receiving marketing loan benefits. (Section 130) 

The Senate amendment amends Sec. 132 of the FAIR Act. 

Loan rates are $1.00 per pound for graded wool, $0.40 per pound 

for nongraded wool and unshorn pelts. The Senate amendment contains no provisions for mohair. 

Amends Sec. 133 of the FAIR Act to establish a 9-month loan 

term for all loan commodities. 

Amends Sec. 134(a) of the FAIR Act to provide loan repayment 

rate criteria for wool and other loan commodities. (Section 123, 124 

and 125) 

The Conference substitute accepts the House provisions with 

an amendment that adds unshorn pelts as a commodity eligible for 

a loan deficiency payment. In addition, all marketing loan and loan 

deficiency provisions for wool and mohair are integrated into the 

same sections in subtitle B as for other loan commodities. 

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(26) Availability of Nonrecourse Marketing Assistance Loans for 

Honey 

The House bill provides that the Secretary will make nonrecourse marketing assistance loans available to producers of 

honey for the 2002 through 2011 marketing years. 

The honey loan rate shall be equal to $0.60 per pound. 

The term of the loan is one year beginning on the first day of 

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

Producers may repay the loan at a rate that is the lesser of the 

loan rate established for the commodity plus interest or at the prevailing domestic market price for honey. 

Loan deficiency payments are also authorized to those producers who agree to forgo obtaining a loan. 

The loan payment rate shall be the amount by which the loan 

rate in effect for the commodity exceeds the rate at which a loan 

may be repaid. 

The Secretary shall make a loan deficiency payment on the 

earlier of the date the producer marketed or lost beneficial interest 

in the commodity or the date the producer requests the payment. 

The marketing loan gains and loan deficiency payment a producer may receive under the honey program is subject to a separate but equal payment limitation than other covered commodities 

receiving marketing loan benefits. 

This section shall be carried out in a manner as to minimize 

forfeitures of honey. (Section 131) 

The Senate amendment amends Sec. 132 of the FAIR Act. 

Loan rate is $0.60 per pound. 

Amends Sec. 133 of the FAIR Act to establish a 9-month loan 

term for all loan commodities. 

Amends Sec. 134(a) of the FAIR Act to provide loan repayment 

rate criteria for honey and other loan commodities. (Section 123, 

124, and 125) 

The Conference substitute accepts the House provisions with 

an amendment that includes honey in the same marketing loan 

and loan deficiency sections as for other loan commodities in subtitle B. 

(26) Availability of Nonrecourse Marketing Assistance Loans for Dry 

Peas, Lentils and Chickpeas 

The Senate amendment amends Sec. 132 of the FAIR Act. 

Loan rate for dry peas is $6.78 per hundredweight, loan rate for 

lentils is $12.79 per hundredweight, loan rate for large chickpeas 

is $17.44 per hundredweight, and loan rate for small chickpeas is 

$8.10 per hundredweight. 

Amends Sec. 133 of the FAIR Act to establish a 9-month loan 

term for all loan commodities. 

Amends Sec. 134(a) of the FAIR Act to provide loan repayment 

rate criteria for dry peas, lentils, chickpeas and other loan commodities. (Section 123, 124, and 125) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that provides a loan rate for the 2002 and 2003 crop 

years at $7.56 per hundredweight for small chickpeas, $11.94 per 

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hundredweight for lentils and $6.33 per hundredweight for dry 

peas. 

Provides a loan rate for the 2004 through 2007 crop years at $7.43 per hundredweight for small chickpeas, $11.72 per hundredweight for lentils and $6.22 per hundredweight for dry peas. (Section 1202) 

(28) Producer Retention of Erroneously Paid Loan Deficiency Payments and Marketing Loan Gains 

The House bill provides that neither the Secretary nor CCC 

shall require producers in Erie County, Pennsylvania, to repay 

1998 and 1999 loan deficiency payments and marketing loan gains 

erroneously paid or determined to have been earned. In the case 

of a producer who has already made repayment, CCC shall reimburse the producer the full amount of the repayment. (Section 132) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

1618) 

SUBTITLE C—OTHER COMMODITIES

Chapter 1—Dairy 

(29) Milk Price Support Program 

The House bill provides that the Milk Price Support Program is authorized through December 31, 2011 at a rate of $9.90/cwt on 

a 3.67% milk fat basis. The Secretary is authorized to purchase 

butter, nonfat dry milk powder or cheese at established prices in 

order to maintain the $9.90/cwt support price. The purchase prices 

for butter and nonfat dry milk powder may be allocated so as to 

minimize expenditures from the Commodity Credit Corporation. 

The Secretary may modify purchase prices for butter and nonfat 

dry milk not more than 2 times per year. (Section 141)

The Senate amendment amends the Federal Agriculture Improvement and Reform Act of 1996 extending the price support program through December 31, 2006. It also retains provisions of the 

1996 Act to provide that at the program’s termination, it shall be 

considered to have expired notwithstanding section 257 (relating to 

the baseline) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 907). (Section 131) 

The Conference substitute adopts the House provision (including an enduring budgetary baseline) with an amendment providing 

for the program’s operation through December 31, 2007. 

(30) Repeal of Recourse Loan Program For Processors 

The House bill provides that the Recourse Loan Program for 

Processors (7 U.S.C. 7252) is repealed (Section 142) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. P.L. 

107–76 repealed the Recourse Loan Program. 

(31) Extension of Dairy Export Incentive and Dairy Indemnity Programs 

The House bill provides that the Dairy Export Incentive Program (15 U.S.C. 713a–14(a)) is extended through 2011. The Dairy 

444

Indemnity Program (7 U.S.C. 4501) is extended through 2011. (Section 143) 

The Senate amendment extends the Dairy Export Incentive 

Program and the Dairy Indemnity Program through 2006. (Section 

133) 

The Conference substitute adopts the House provision with an 

amendment to extend both programs through 2007. 

(32) Fluid Milk Promotion 

The House bill provides that the Fluid Milk Processor Promotion Program (7 U.S.C. 6402) is amended to repeal the termination of authority, and to make technical changes to the definitions of ‘‘Fluid Milk Product’’ and ‘‘Fluid Milk Processor.’’ (Section 

144) 

The Senate amendment is similar with technical amendments 

within the definition of fluid milk processor regarding exclusion for 

products delivered directly to the place of residence of a consumer. 

(Section 134) 

The Conference substitute adopts the Senate provision. 

(33) Dairy Product Mandatory Reporting 

The House bill provides that the Dairy Product Mandatory Reporting (7 U.S.C. 1637a(1)) is amended to make technical corrections regarding products to be reported. (Section 145) 

The Senate amendment is similar with technical amendments 

regarding the definition of manufactured dairy products. (Section 

135) 

The Conference substitute adopts the Senate provision. 

The managers want to ensure the enforcement of federal 

standards of identity that apply for fluid milk products purchased 

by the federal government for distribution in all federally supported feeding and nutrition programs. If the Secretary of Health 

and Human Services determines that the federal standards are not 

being enforced, the Secretary is urged to develop and implement 

procedures for the enforcement of federal standards of identity for 

fluid milk products purchased by the federal government within 1 

year of enactment of this legislation. 

(34) Funding of Dairy Promotion and Research Program 

The House bill provides that the Dairy Promotion Program (7 

U.S.C. 4502) is amended to require dairy importers to pay an assessment equivalent to domestic dairy producers. Importers would 

be eligible to vote in referenda and would have representation on 

the National Dairy Promotion and Research Board. (Section 146) 

The Senate amendment is the same (Section 136) 

The Conference substitute adopts the House provision with 

amendments to authorize the Secretary of Agriculture to reapportion the representation levels of domestic producers and importers 

to reflect a proportion of domestic production and imports supplying the United States market; to make clear that assessments 

from importers will not be used for foreign export promotion purposes; to clarify when the importer must pay the assessment; to 

make clear that the domestic milk rate shall be applied to imports 

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motion program and order must promote milk and dairy products 

without regard to origin; and to require that in implementing an 

order under this section, the Secretary consults with the United 

States Trade Representative in order to ensure consistency with 

the international trade obligations of the United States. 

The Conferees note that since 1990, the provisions of 7 U.S.C. 

2278 have been in effect and apply generally to research and promotion programs administered by the Department of Agriculture. 

Those provisions require that the Secretary consult with the U.S. 

Trade Representative when research and promotion orders are 

modified or implemented to apply to imported products, and take 

steps to ensure that international trade obligations are met. The 

Conferees intend that the similar provision included specifically in 

the conference substitute with respect to assessments on imports 

for the dairy promotion program not be regarded as being in conflict with current law. 

(35) Study of National Dairy Policy and Studies of Effects of 

Changes in Approach to National Dairy Policy and Fluid Milk 

Identity Standards 

The House bill requires the Secretary of Agriculture to conduct 

an economic analysis of various options for a National Dairy Program and report to Congress not later than April 30, 2002. (Section 

147) 

The Senate amendment requires studies of the effects of terminating all Federal dairy programs and establishing regional compacts, and a study of the effects of establishing minimum protein 

standards to be reported to Congress not later than September 30, 

2002. (Section 137) 

The Conference substitute adopts the both the House and Senate provisions with an amendment to require that each report be 

issued one year after the date of enactment of this Act. 

(36) National Dairy Program 

The Senate amendment creates a national dairy support program with two components. The National Dairy Market Loss Assistance Program is authorized from December 1, 2001, through 

September 30, 2005. The program covers producers in states not included in the Northeast Dairy Market Loss Payment program. Payment is calculated by taking 40% of the difference between the allmilk price and the historical five-year average multiplied by eligible production. Eligible production is based on taking the lesser of 

(A) the average quantity of milk marketed for commercial use in 

which the producer has had a direct or indirect interest during 

each of the 1999 through 2001 fiscal years, (B) 8,000,000 pounds, 

or (C) actual production for the time period. The program is capped 

at $1.5 billion. 

The Northeast Dairy Market Loss Payment program is authorized from December 1, 2001 through September 30, 2005. The program covers the states of Connecticut, Delaware, Maine, Maryland, 

Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and West Virginia. Payment is 

based on a target price of $16.94. Eligible production is based on 

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446

cial use in which the producer had a direct or indirect interest during each of the 1999 through 2001 fiscal years, (B) 8,000,000 

pounds, or (C) actual production for the time period. The program 

is capped at $500 million. (Section 132) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision to create a single national program using the payment formula established under the proposed Northeast Dairy Market Loss Assistance 

Program. Under this program, participating dairy producers will 

receive monthly payments equal to 45 percent of the difference between $16.94 and the price per hundredweight of Class I fluid milk 

in Boston under the applicable federal milk marketing order. No 

payments will be made for months during which the fluid milk 

price in Boston is $16.94 or higher. Payments will be made not 

later than 60 days after the end of the month for which a payment 

is made. Producers, on an operation-by-operation basis, may receive payments on no more than 2.4 million pounds of milk marketed per year. Retroactive payments will be made covering market 

losses due to low prices since December 1, 2001. The program is 

authorized through September 30, 2005. 

The Managers understand that previous Dairy Market Loss 

Assistance Programs provided discretion to the Secretary to limit 

payments to individual dairy operations. It is the intent of the 

Managers that this program shall be administered in the same 

manner, thereby limiting payments on an operation-by-operation 

basis. Accordingly, a producer might qualify for separate limits on 

separate operations. 

The managers intend that in carrying out this section, the Secretary utilize information available through the Agricultural Marketing Service monthly milk marketing’s by producers. 

Chapter 2—Sugar 

(37) Sugar Program 

The House bill subsection (a) reauthorizes the sugar program 

through the 2011 crop year. 

Subsection (b) terminates the marketing assessment on sugar 

effective October 1, 2001. 

Subsection (c) provides the Secretary of Agriculture the discretion to reduce loan rates for U.S. sugar producers in the event that 

support for foreign competitors is reduced beyond that required 

under the Agreement on Agriculture. 

Subsection (d) ensures that notification requirements do not 

frustrate the purposes of the nonrecourse loan program. 

Subsection (e) authorizes nonrecourse loans on in-process sugars. 

Subsection (f) requires the Secretary of Agriculture to administer the sugar program at no net cost to the federal government 

to the maximum extent practicable. The subsection also authorizes 

the CCC to accept bids from processors for the purchase of sugar 

inventory in exchange for reduced production. 

Subsection (g) establishes reporting guidelines for producers 

and importers relative to yields and acreage planted and amounts 

447

imported. Requires reporting by sugar cane producers in proportionate share states. 

Subsection (h) makes section 163 of the FAIR Act inapplicable 

to sugar. (Section 151) 

The Senate amendment subsection (i) reauthorizes the sugar 

program through the 2006 crop year. 

Subsection (c) terminates the marketing assessment on sugar 

effective October 1, 2001. 

Subsection (a) provides the Secretary of Agriculture the discretion to reduce loan rates for U.S. sugar producers in the event that 

support for foreign competitors is reduced beyond that required 

under the Agreement on Agriculture. 

Paragraph (2) of subsection (b) ensures that notification requirements do not frustrate the purposes of the nonrecourse loan 

program. 

Subsection (e) authorizes nonrecourse loans on in-process sugars. 

Subsection (f) requires the Secretary of Agriculture to administer the sugar program at no net cost to the federal government 

to the maximum extent practicable and subject to subsection (e)(3) 

(which bars the Secretary from imposing pre notification requirements as a condition to forfeiture). The subsection also authorizes 

the CCC to accept bids from processors for the purchase of sugar 

inventory in exchange for reduced production. 

Subsection (g) establishes reporting guidelines for producers 

and importers relative to yields and acreage planted and amounts 

imported. Loan assistance is conditioned on reporting by sugar 

cane producers located in proportionate share states. 

Subsection (j) makes section 163 of the FAIR Act inapplicable 

to sugar. 

Subsection (b)(1) modifies provisions to assure that loan benefits are passed through to producers by allowing beet producers to 

contract minimum payments and by providing for the use of CCC 

funds to compensate producers in the event of bankruptcy or insolvency of the processor. 

Subsection (h) allows substitutability of all refined sugar for 

re-export. (Section 141) 

The Conference substitute adopts the Senate sugar provisions, 

with technical and clarifying amendments, except that the provision providing for the use of CCC funds to compensate producers 

in the event of processor bankruptcy or insolvency is excluded. 

(38) Reauthorize Provisions of Agricultural Adjustment Act of 1938 

Regarding Sugar 

The House bill subsection (a) repeals repetitive reporting provisions. 

Subsection (b) requires the Secretary to establish marketing allotments for domestically grown sugar to eliminate forfeitures 

through 2011. 

Subsection (c) updates the allotment formula to take into account current U.S. import obligations. The subsection also assigns 

allotments between sugarcane and sugar beets. Finally the subsection authorizes the Secretary to suspend allotments whenever 

imports exceed a certain level. 

448

Subsection (d) updates the base periods and other factors applicable to the allocation of sugarcane and sugar beet allotments 

among sugarcane and sugar beet processors, respectively. 

Subsection (e) establishes procedures for the Secretary to reassign allotments if a processor cannot meet the allocation. 

Subsection (f) prescribes the manner in which allotment disputes are settled and provides for certain adjustments in the event 

a processor closes. 

Subsection (g) allows the Secretary to preserve certain acreage 

base history for a longer period and also defines the term ‘‘offshore 

states’’. Subsection (h) lifts the suspension on allotments for the 2002 

crop. (Section 152) 

The Senate amendment subsection (a) repeals repetitive reporting provisions. 

Subsection (b) requires the Secretary to establish marketing allotments for domestically grown sugar to eliminate forfeitures 

through 2006. 

Subsection (c) updates the allotment formula to take into account current U.S. import obligations. The subsection also assigns 

allotments between sugarcane and sugar beets. Finally the subsection authorizes the Secretary to suspend allotments whenever 

imports exceed a certain level. 

Subsection (d) updates the base periods and other factors applicable to the allocation of sugarcane and sugar beet allotments 

among sugarcane and sugar beet processors, respectively. Adds provisions for new entrant states. Provides formula for beet sugar allocation. 

Subsection (e) establishes procedures for the Secretary to reassign allotments if a processor cannot meet the allocation. 

Subsection (f) prescribes the manner in which allotment disputes are settled and provides for certain adjustments in the event 

a processor closes. 

Subsection (g) allows the Secretary to preserve certain acreage 

base history for a longer period and also defines the term ‘‘offshore 

states’’. 

Sec. 165(2)(A) strikes the suspension of price support authority 

for sugar. (Section 143) 

The Conference substitute adopts the Senate sugar provisions, 

with technical and clarifying amendments. 

Subsections (b)(1)(D) and (b)(2)(C) of section 359(e) of the Agricultural Adjustment Act of 1938, as amended by section 1403 of the 

conference agreement, provide for the reassignment of unused marketing allotments for cane sugar and beet sugar, respectively to imports of sugar under certain specified conditions. It is the intent of 

the conferees that in the event that any allotments are reassigned 

to imports, the appropriate agency shall accommodate the allotted 

imports by increasing the tariff-rate quota for sugar in an amount 

equal to the total amount of the allotments reassigned to imports. 

By doing so, the market balance sought by the allotment system 

should be maintained and will not result in a reduction in the overall allotment quantity, a suspension of the allotments, or any increase in the prospect of the forfeiture of domestically produced 

sugar to the Commodity Credit Corporation. 

449

(39) Storage Facility Loans 

The House bill subsection (a) requires the CCC to amend the 

Code of Federal Regulations to establish a sugar storage facility 

loan program. Subsection (b) requires the CCC to make such loans 

to processors of domestically produced sugar that have satisfactory 

credit history, that need increased storage, and that demonstrate 

an ability to repay the loan. Subsection (c) provides for a 7-year 

term for the loan. Subsection (d) requires the program be administered using the services, facilities, and funds of the CCC. (Section 

153) 

The Senate amendment subsection (a) requires the CCC to 

amend the Code of Federal Regulations to establish a sugar storage 

facility loan program. Subsection (b) requires the CCC to make 

such loans to processors of domestically produced sugar that have 

satisfactory credit history, that need increased storage, and that 

demonstrate an ability to repay the loan. Subsection (c) provides 

for a 7-year term for the loan. (Section 142) 

The Conference substitute adopts the Senate provision. 

(40) Reallocation of Sugar Quota 

The Senate amendment requires the U.S. Trade Representative in consultation with the Secretary, by June 1 of each year, to 

determine the amount of the quota of cane sugar used by each 

qualified supplying country for that country for that fiscal year. 

The Trade Representative may reallocate the unused quota. (Section 144) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate amendment with 

technical amendments. 

Chapter 3—Peanuts 

(41) Definitions 

The House bill defines terms necessary for implementation of 

this act, including counter-cyclical payment, effective price, historic 

peanut producer, fixed, decoupled payment, payment acres, peanut 

acres, payment yield, peanut producer, Secretary, State, target 

price, and United States. (Section 161) 

The Senate amendment defines terms necessary for implementation of this act, including counter-cyclical payment, direct payment, effective price, historical peanut producers on a farm, income 

protection price, payment acres, peanut acres, payment yield, and 

peanut producer. (Section 151) 

The Conference substitute adopts the House provision with an 

amendment that clarifies the definition of ‘‘producer’’, changes the 

term ‘‘peanut acres’’ to ‘‘base acres for peanuts’’, changes the term ‘‘fixed, decoupled payment’’ to ‘‘direct payment’’, and provides 2002 

transitional payment language under the term ‘‘payment acres’’. (Section 1301) 

(42) Establishment of Payment Yield, Peanut Acres, and Payment 

Acres for a Farm 

The House bill provides that the Secretary shall determine, for 

each historic peanut producer, the average yield for peanuts on 

450

each farm on which the historic peanut producer produced peanuts 

for the 1998 through 2001 crops years, excluding any crop year in 

which the producer did not produce peanuts. 

If, for any of these four crop years in which peanuts were 

planted on a farm by the producer, the farm would have satisfied 

the eligibility criteria established to carry out section 1102 of the 

Agriculture, Rural Development, Food and Drug Administration, 

and Related Agencies Appropriations Act 1999, the Secretary shall 

assign a yield for the producer for that year equal to 65 percent of 

the county yield, as determined by the Secretary. (Section 162) 

The Secretary shall determine, for each historic peanut producer, the four-year average of acreage actually planted in peanuts 

by the historic peanut producer for harvest on one or more farms 

during crop years 1998, 1999, 2000, and 2001 and any acreage that 

the producer was prevented from planting to peanuts during such 

crops years because of drought, flood or other natural disaster, or 

other condition beyond the control of the producer, as determined 

by the Secretary. 

If more than one historic peanut producer shared in the risk 

of producing the crop on the farm, the historic peanut producers 

shall receive their proportional share of the number of acres planted (or prevented from being planted) to peanuts for harvest on the 

farm based on the sharing arrangement that was in effect among 

the producers for the crop. 

The Secretary shall make the determinations required by this 

subsection not later than 90 days after the date of the enactment 

of this Act. In making such determinations, the Secretary shall 

take into account changes in the number and identity of persons 

sharing in the risk of producing a peanut crop since the 1998 crop 

year, including providing a method for the assignment of average 

acres and average yield to a farm when the historic peanut producer is no longer living or an entity composed of historic peanut 

producers has been dissolved. 

The Secretary shall give each historic peanut producer an opportunity to assign the average peanut yield and average acreage 

determined under subsection (a) for the producer to cropland on a 

farm. 

The average of all of the yields assigned by historic peanut producers to a farm shall be deemed to be the payment yield for that 

farm for the purpose of making fixed, decoupled payments and 

counter-cyclical payments under this chapter. 

Subject to subsection (e), the total number of acres assigned by 

historic peanut producers to a farm shall be deemed to be the peanut acres for a farm for the purpose of making fixed, decoupled 

payments and counter-cyclical payments under this chapter. 

The opportunity to make the assignments described in subsection (b) shall be available to historic peanut producers only once. 

The historic peanut producers shall notify the Secretary of the assignments made by such producers under such subsections not 

later than 180 days after the date of the enactment of this Act. 

The payment acres for peanuts on a farm shall be equal to 85 

percent of the peanut acres assigned to the farm. 

If the sum of the peanut acres for a farm, together with the 

base acres for the farm under subtitle A, any acreage on the farm 

451

enrolled in the conservation reserve program or wetlands reserve 

program, and any other acreage on the farm enrolled in a conservation program for which payments are made in exchange for not 

producing an agricultural commodity on the acreage, exceeds the 

actual cropland acreage of the farm, the Secretary shall reduce the 

quantity of peanut acres for the farm or base acres for one of more 

covered commodities for the farm as necessary so that sum of peanut acres and other covered acreage does not exceed the actual 

cropland acreage of the farm. The Secretary shall give the peanut 

producers on the farm the opportunity to select the peanut acres 

or base acres against which the reduction will be made. 

In applying paragraph (1), the Secretary shall make an exception in the case of double cropping as determined by the Secretary 

(Section 162) 

The Senate amendment provides that the Secretary shall determine, for each historical peanut producer, the average yield for 

peanuts on all farms of the historical peanut producer for the 1998 

through 2001 crop years, excluding any crop year during which the 

producers did not produce peanuts. 

If, for any of the crop years in which peanuts were planted on 

a farm by the historical peanut producer, the historical peanut producer has satisfied the eligibility criteria established to carry out 

section 1102 of the Agriculture, Rural Development, Food and Drug 

Administration, and Related Agencies Appropriations Act, 1999, 

the Secretary shall assign to the historical peanut producer a yield 

for the farm for the crop year equal to 65 percent of the average 

yield for peanuts for the previous 5 crop years. 

Except as provided in paragraph (3), the Secretary shall determine, for the historical peanut producer, the 4-year average of acreage planted to peanuts on all farms for harvest during the 1998 

through 2001 crop years, and any acreage that was prevented from 

being planted to peanuts during the crop years because of drought, 

flood or other natural disaster, or other condition beyond the control of the historical peanut producer, as determined by the Secretary. 

If a county in which a historical peanut producer is located is 

declared a disaster area during 1 or more of the four crop years, 

for purposes of determining the 4–year average acreage for the historical peanut producer, the historical peanut producer may elect 

to substitute, for not more than 1 year of the crop years during 

which a disaster is declared (A) the State average of acreage actually planted to peanuts; or (B) the average of acreage for the historical peanut producer determined by the Secretary under paragraph 

(2) 

The Secretary shall make the determinations required by this 

subsection not later than 90 days after the date of enactment of 

this section. In making the determinations, the Secretary shall 

take into account changes in the number and identity of historical 

peanut producers sharing in the risk of producing a peanut crop 

since the 1998 crop year, including providing a method for the assignment of average acres and average yield to a farm when a historical peanut producer is no longer living or an entity composed 

of historical peanut producers has been dissolved. 

452

The Secretary shall provide each historical peanut producer 

with an opportunity to assign the average peanut yield and average acreage determined under subsection (a) for the historical peanut producer to cropland on a farm 

The average of all of the yields assigned by historical peanut 

producers to a farm shall be considered to be the payment yield for 

the farm for the purpose of making direct payments and countercyclical payments under this chapter. 

Subject to subsection (e), the total number of acres assigned by 

historical peanut producers to a farm shall be considered to be the 

peanut acres for the farm for the purpose of making direct payments and counter-cyclical payments under this chapter 

Not later than 180 days after the date of enactment of this section, a historical peanut producer shall notify the Secretary of the 

assignments described in subsection (b). 

The payment acres for peanuts on a farm shall be equal to 85 

percent of the peanut acres assigned to the farm. 

If the total of the peanut acres for a farm, together with the 

contract acreage for the farm under subtitle B, any acreage on the 

farm enrolled in the conservation reserve program or wetlands reserve program, and any other acreage on the farm enrolled in a 

conservation program for which payments are made in exchange 

for not producing an agriculture commodity on the acreage, exceeds 

the actual cropland acreage of the farm, the Secretary shall reduce 

the quantity of peanut acres for the farm or contract acreage for 

one or more covered commodities for the farm as necessary so that 

the total of the peanut acres and other covered acreage does not 

exceed the actual cropland acreage of the farm. The Secretary shall 

give the peanut producers on the farm the opportunity to select the 

peanut acres or contact acreage against which the reduction will be 

made. 

In applying paragraph (1), the Secretary shall take into account additional acreage as a result of an established double-cropping history on a farm, as determined by the Secretary. (Section 

151) 

The Conference substitute adopts the House provision with an 

amendment. The amendment allows the historic peanut producer 

to elect to substitute for a farm, for not more than 3 of the 1998 

through 2001 crop years in which the producer planted peanuts on 

the farm, the average yield for peanuts produced in the county in 

which the farm is located for the 1990 through 1997 crop years. 

The amendment requires the historic peanut producer to assign average base acreage and average yield to a farm by March 

31, 2003. In addition, the amendment sets a series of criteria that 

a historic peanut producer must meet for them to assign average 

base acreage and average yield across state lines. The Secretary 

shall provide notice to historic peanut producers regarding their opportunity to assign average peanut yields and average acreages to 

farms. The amendment states that the notice shall include: notice 

that the opportunity to make the assignments is being provided 

once, a description of the limitation of assigning average acres and 

average yields across state lines, and information regarding the 

manner in which the assignments must be made and the time periVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00456 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
453

ods and manner in which the notice of the assignments must be 

submitted to the Secretary. 

The amendment further states the Secretary shall provide for 

an adjustment in the base acres for peanuts for a farm whenever 

a conservation reserve contract with respect to the farm expires or 

is voluntarily terminated, or the Secretary releases cropland from 

coverage under a conservation reserve contract. Also included is a 

provision to allow the owner of a farm to reduce at any time the 

base acres for peanuts assigned to the farm. (Section 1302) 

The Managers are aware that AMTA contract acreage was not 

protected on acreage enrolled into CRP during CRP signups 15 and 

later. The Managers intend that the Secretary develop a method 

that provides for the restoration of base acreage on farms that permanently reduced contract acreage because of enrollment in CRP. 

Since soybeans and other oilseeds did not have contract acreage 

prior to this Act, the Managers expect the Secretary to treat soybeans and other oilseeds in a manner that is similar and consistent 

with other covered commodities. (Section 1302) 

(43) Availability of Fixed, Decoupled Payments for Peanuts 

The House bill provides that for each of the 2002 through 2011 

crop years, the Secretary shall make fixed, decoupled payments to 

peanut producers on a farm. The payment rate used to make fixed, 

decoupled payments with respect to peanuts for a crop year shall 

be equal to $36 per ton. 

The amount of the fixed, decoupled payment to be paid to the 

peanut producers on a farm for a covered commodity for a crop 

year shall be equal to the product of the payment rate, the payment acres and the payment yield. 

Fixed, decoupled payments shall be paid not later than September 30 of each of the fiscal years 2002 through 2011. In the case 

of the 2002 crop, payments may begin to be made on or after December 1, 2001. 

At the option of a peanut producer, 50 percent of the fixed, decoupled payment for a fiscal year shall be paid on a date selected 

by the peanut producer. The selected date shall be on or after December 1 of that fiscal year, and the peanut producer may change 

the selected date for a subsequent fiscal year by providing advance 

notice to the Secretary. 

If a peanut producer that receives an advance fixed, decoupled 

payment for a fiscal year ceases to be a peanut producer before the 

date the fixed, decoupled payment would otherwise have been 

made by the Secretary, the peanut producer shall be responsible for 

repaying the Secretary the full amount of the advance payment. 

(Section 163) 

The Senate amendment provides that for each of the 2002 

through 2006 fiscal years, the Secretary shall make direct payments to peanut producers on a farm with peanut acres under section 158B and a payment yield for peanuts under section 158B. 

The payment rate used to make direct payments with respect to 

peanuts for a fiscal year shall be equal to $0.018 per pound. 

The amount of the direct payment to be paid to the peanut producers on a farm for peanuts for a fiscal year shall be equal to the 

454

product obtained by multiplying the payment rate, the payment 

acres, and the payment yield. 

The Secretary shall make direct payments in the case of the 

2002 fiscal year, during the period beginning December 1, 2001, 

and ending September 30, 2002; and in the case of each of the 2003 

through 2006 fiscal years, not later than September 30 of the fiscal 

year. 

At the option of the peanut producers on a farm, the Secretary 

shall pay 50 percent of the direct payment for a fiscal year for the 

producers on the farm on a date selected by the peanut producers 

on the farm. The selected date for a fiscal year shall be on or after 

December 1 of the fiscal year. The peanut producers on a farm may 

change the selected date for a subsequent fiscal year by providing 

advance notice to the Secretary. 

If any peanut producer on a farm that receives an advance direct payment for a fiscal year ceases to be eligible for a direct payment before the date the direct payment would have been made by 

the Secretary, the peanut producer shall be responsible for repaying the Secretary the full amount of the advance payment. (Section 

151) 

The Conference substitute adopts the House provision with an 

amendment to clarify payment rules for the 2002 crop year by directing the Secretary to make direct payments to historic peanut 

producers for the 2002 crop year. For each of the 2003 through 

2007 crop years for peanuts, the Secretary shall make direct payments to the producers on a farm to which a payment yield and 

base acres for peanuts are assigned under section 1302. 

The payment rate used to make direct payments with respect 

to peanuts for a crop year shall be equal to $36 per ton. (Section 

1303)

(43) Availability of Counter-Cyclical Payment for Peanuts 

The House bill provides that during the 2002 through 2011 

crop years for peanuts, the Secretary shall make counter-cyclical 

payments with respect to peanuts whenever the Secretary determines that the effective price for peanuts is less than the target 

price. 

The effective price for peanuts is equal to the sum of higher 

of either (A) the national average market price received by peanut 

producers during the 12–month marketing year for peanuts, as determined by the Secretary; or (B) the national average loan rate for 

a marketing assistance loan for peanuts in effect for the same period under this chapter; and the payment rate in effect under section 163 for the purpose of making fixed, decoupled payments. 

The target price for peanuts is $480 per ton. 

The payment rate for counter-cyclical payments is equal to the 

difference between the target price for peanuts and the effective 

price for the peanuts. 

The amount of the counter-cyclical payment to be paid to the 

peanut producers on a farm for a crop year shall be equal to the 

product of the payment rate, the payment acres, by the payment 

yield. 

455

The Secretary shall make counter-cyclical payments for a peanut crop as soon as possible after determining that such payments 

are required for that crop year. 

The Secretary may permit, and, if so permitted, a peanut producer may elect to receive, up to 40 percent of the projected 

counter-cyclical payment, as determined by the Secretary, to be 

made under this section for a peanut crop upon completion of the 

first six months of the marketing year for that crop. The peanut 

producer shall repay the Secretary the amount, if any, by which 

the partial payment exceeds the actual counter-cyclical payment to 

be made for that crop. (Section 164) 

The Senate amendment provides for each of the 2002 through 

2006 crops of peanuts, the Secretary shall make counter-cyclical 

payments with respect to peanuts if the Secretary determines that 

the effective price for peanuts is less than the income protection 

price for peanuts. 

The effective price for peanuts is equal to the total of the greater of either (A) the national average market price received by peanut producers during the 12-month marketing year for peanuts or 

(B) the national average loan rate for a marketing assistance loan 

for peanuts under section 158G in effect for the 12-month marketing year for peanuts under this chapter; and the payment rate 

in effect for peanuts under section 158C for the purpose of making 

direct payments with respect to peanuts. The income protection price for peanuts is $520 per ton. 

The amount of the counter-cyclical payment to be paid to the 

peanut producers on a farm for a crop year shall be equal to the 

product obtained by multiplying the payment rate, the payment 

acres, by the payment yield. 

The payment rate used to make counter-cyclical payments with 

respect to peanuts for a crop year shall be equal to the difference 

between the income protection price for peanuts and the effective 

price for peanuts. 

The Secretary shall make counter-cyclical payments to peanut 

producers on a farm under this section for a crop of peanuts as 

soon as practicable after determining under subsection (a) that the 

payments are required for the crop year. 

At the option of the Secretary, the peanut producers on a farm 

may elect to receive up to 40 percent of the projected counter-cyclical payment to be made under this section for a crop of peanuts 

on completion of the first six months of the marketing year for the 

crop. The peanut producers on a farm shall repay to the Secretary 

the amount, if any, by which the payment received by producers on 

the farm (including partial payments) exceeds the counter-cyclical 

payment the producers on the farm are eligible for under this section. (Section 151) 

The Conference substitute adopts the Senate provision with an 

amendment to clarify payment rules for the 2002 crop year by directing the Secretary to make counter-cyclical payments to historic 

peanut producers for the 2002 crop year. For each of the 2003 

through 2007 crop years for peanuts, the Secretary shall make 

counter-cyclical payments to the producers on a farm to which a 

payment yield and base acres for peanuts are assigned under section 1302. 

456

The amendment changes the effective price definition to state 

the effective price for peanuts is equal to the sum of the higher of 

(a) the national average market price for peanuts received by producers during the 12-month marketing year for peanuts or (b) the 

national average loan rate for a marketing assistance loan for peanuts in effect for the applicable period under this subtitle; plus the 

payment rate in effect under section 1303 for the purpose of making direct payments. 

If before the end of the 12-month marketing year, the Secretary estimates that counter-cyclical payments will be required 

under this section for a crop year, the Secretary shall give producers on a farm (or, in the case of the 2002 crop year, historic peanut producers) the option to receive partial payments of the 

counter-cyclical payment projected to be made for that crop. 

When the Secretary makes partial payments for any of the 

2002 through 2006 crop years the first partial payment for the crop 

year shall be made not earlier than October 1, and, to the maximum extent practicable, not later than October 31, of the calendar 

year in which the crop is harvested; the second partial payment 

shall be made not earlier than February 1 of the next calendar 

year; and the final payment shall be made as soon as practicable 

after the end of the 12-month marketing year for that crop. 

When the Secretary makes partial payments available for the 

2007 crop year the first partial payment shall be made after completion of the first 6 months of the marketing year for that crop; 

and the final partial payment shall be made as soon as practicable 

after the end of the 12-month marketing year for that crop. 

In the case of the 2002 crop year, the first partial payment to 

an historic peanut producer may not exceed 35 percent of the projected counter-cyclical payment for the crop year, as determined by 

the Secretary. The second partial payment may not exceed the difference between 70 percent of the revised projection of the countercyclical payment for the 2002 crop year and the amount of the first 

partial payment. The final payment shall be equal to the difference 

between the actual counter-cyclical payment to be made to the historic peanut producer and the amount of the partial payment already made to the historic peanut producers under clauses (i) and 

(ii). 

For each of the 2003 through 2006 crop years, the first partial 

payment to the producers on a farm may not exceed 35 percent of 

the projected counter-cyclical payment for the crop year, as determined by the Secretary. The second partial payment may not exceed the difference between 70 percent of the revised projection of 

the counter-cyclical payment for the 2002 crop year and the 

amount of the first partial payment. The final payment shall be 

equal to the difference between the actual counter-cyclical payment 

to be made to the producers for that crop year and the amount of 

the partial payment already made to the producers under clauses 

(i) and (ii) for that crop year.

For the 2007 crop year, the first partial payment to the producers on a farm may not exceed 40 percent of the projected 

counter-cyclical payment for that crop year, as determined by the 

Secretary. The final payment for the 2007 crop year shall be equal 

to the difference between the actual counter-cyclical payment to be 

457

made to the producers for that crop year and the amount of the 

partial payment made to the producers under clause (i). 

The producers on a farm (or, in the case of the 2002 crop year, 

historic peanut producers) must repay the amount, if any, by which 

the partial payment exceeds the counter-cyclical payment to be 

made in that crop year. (Section 1304) The target price for peanuts shall be equal to $495 per ton. 

(Section 1304) 

(45) Producer Agreement Required As Condition on Provision of 

Fixed, Decoupled Payments and Counter-Cyclical Payments 

The House bill provides that before the peanut producers on a 

farm may receive fixed, decoupled payments or counter-cyclical 

payments with respect to the farm, the peanut producers shall 

agree, in exchange for the payments to comply with applicable conservation and wetland protection requirements, to comply with the 

planting flexibility requirements, and to use the land on the farm, 

in an amount equal to the peanut acres for an agriculture or conserving use. 

The Secretary may issue such rules as the Secretary considers 

necessary to ensure peanut producer compliance with the requirements of paragraph (1). 

A peanut producer may not be required to make repayments 

to the Secretary of fixed, decoupled payments and counter-cyclical 

payments if the farm has been foreclosed on and the Secretary determines that the forgiving the repayments is appropriate to provide fair and equitable treatment. 

This subsection shall not void the responsibilities of the peanut 

producer under subsection (a) if the peanut producer continues or 

resumes operation or control of the farm. 

On the resumption of operation or control over the farm by the 

producer, the requirements of subsection (a) in effect on the date 

of foreclosure shall apply. 

Except as provided in paragraph (4), a transfer or change in 

the interest of a peanut producer in peanut acres for which fixed, 

decoupled payments or counter-cyclical payments are made shall 

result in the termination of the payments with respect to the peanut acres, unless the transferee or owner of the acreage agrees to 

assume all obligations under subsection (a). The termination shall 

be effective on the date of the transfer or change. 

There is no restriction on the transfer of a farm’s peanut acres 

or payment yield as part of a change in the peanut producers on 

the farm. 

At the request of the transferee or owner, the Secretary may 

modify the requirements of subsection (a) if the modifications are 

consistent with the objectives of such subsection, as determined by 

the Secretary. 

If a peanut producer entitled to a fixed, decoupled payment or 

counter-cyclical payment dies, becomes incompetent, or is otherwise 

unable to receive payment, the Secretary shall make the payment, 

in accordance with regulations prescribed by the Secretary. 

As a condition on the receipt of any benefits under this chapter, the Secretary shall require peanut producers to submit to the 

Secretary acreage reports. 

458

In carrying out this chapter, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers. 

The Secretary shall provide for the sharing of fixed, decoupled 

payments and counter-cyclical payments among the peanut producers on a farm on a fair and equitable basis. (Section 165) 

The Senate amendment provide that before the peanut producers on a farm may receive direct payments or counter cyclical 

payments with respect to the farm, the peanut producers on the 

farm shall agree during the fiscal year or crop year, respectively, 

for which the payments are received, in exchange for payments to 

comply with applicable highly erodible land conservation requirements, to comply with applicable wetland conservation requirements, to comply with planting flexibility requirements, and to 

agree to use a quantity of the land on the farm equal to peanut 

acres for an agriculture or conserving use. 

The Secretary may promulgate such regulations as the Secretary considers necessary to ensure peanut producer compliance 

with paragraph (1). 

The Secretary shall not require the peanut producers on a 

farm to repay a direct payment or counter-cyclical payment if a 

foreclosure has occurred with respect to the farm and the Secretary 

determines that forgiving the repayment is appropriate to provide 

fair and equitable treatment. 

This subsection shall not void the responsibilities of the peanut 

producers on a farm under subsection (a), if the peanut producers 

on the farm continue or resume operation, or control, of the farm. 

On the resumption of operation or control over the farm by the 

peanut producers on the farm, the requirements of subsection (a) 

in effect on the date of the foreclosure shall apply. 

Except as provided in paragraph (5), a transfer of or change in 

the interest of the peanut producers on a farm in peanut acres for 

which direct payments or counter-cyclical payments are made shall 

result in the termination of the payments with respect to the peanut acres, unless the transferee or owner of the acreage agrees to 

assume all obligations under subsection (a). The termination takes 

effect on the date of the transfer or change. 

The Secretary shall not impose any restrictions on the transfer 

of the peanut acres or payment yield of a farm as part of a transfer 

or change described in paragraph (1). 

At the request of the transferee or owner, the Secretary may 

modify the requirements of subsection (a) if the modifications are 

consistent with the purposes of subsection (a), as determined by the 

Secretary. 

If a peanut producer entitled to a direct payment or countercyclical payment dies, becomes incompetent, or is otherwise unable 

to receive the payment, the Secretary shall make the payment, in 

accordance with regulations promulgated by the Secretary. 

As a condition on the receipt of any benefits under this chapter, the Secretary shall require the peanut producers on a farm to 

submit to the Secretary acreage reports for the farm. 

In carrying out this chapter, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers. 

459

The Secretary shall provide for the sharing of direct payments 

and counter-cyclical payments among the peanut producers on a 

farm on a fair and equitable basis. (Section 151)

The Conference substitute provides that before producers on a 

farm may receive direct payments or counter-cyclical payments 

with respect to the farm, the producers shall agree, in exchange for 

the payments to comply with applicable conservation requirements, 

applicable wetland protection requirements, planting flexibility requirements, to use the land on the farm in a quantity attributable 

to the base acres for an agricultural or conserving use and not for 

a nonagricultural commercial or industrial use, as determined by 

the Secretary and on noncultivated land attributable to the base 

acres, control noxious weeds and otherwise maintain the land in 

accordance with sound agricultural practices. 

The Secretary may issue rules to ensure compliance with these 

requirements. 

At the request of the transferee or owner, the Secretary may 

modify the requirements of this subsection if the modifications are 

consistent with the objectives of such subsection, as determined by 

the Secretary. 

A transfer of (or change in) the interest of a producer in base 

acres for which direct or counter-cyclical payments are made shall 

result in the termination of the payments with respect to bases 

acres, unless the transferee or owner of the acreage agrees to assume all obligations under conservation, wetland, planting flexibility, agriculture land use provisions and controlling noxious 

weeds provisions. The termination shall take effect on the date determined by the Secretary. 

If a producer entitled to a direct payment or counter-cyclical 

payment dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment, in accordance with regulations prescribed by the Secretary. 

A producer who receives direct payments, counter-cyclical payments, or marketing loan benefits is required to submit annual 

acreage reports with respect to all cropland on the farm to the Secretary. 

The Secretary shall provide adequate safeguards to protect the 

interests of tenants and sharecroppers. 

The Secretary shall provide for the sharing of direct payments 

and counter-cyclical payments among the producers on a farm on 

a fair and equitable basis. 

When there is a transfer (or change in) the interest of a producer in base acres for which direct or counter-cyclical payments 

are made, the Managers intend for the Secretary to provide a time 

frame for the succession to occur that is farmer-friendly. 

Acreage reports provide important information such as assisting in determining the eligibility of land to be accepted into the 

Conservation Reserve Program. The Managers are aware that in 

prior years, the Secretary has imposed penalties on producers that 

submit acreage reports that the Secretary later determines to be 

inaccurate. The Managers understand that under prior acreage 

limiting and acreage reduction programs there was a need for very 

accurate reporting. However, under this Act, with the exception of 

determining the amount of fruits, vegetables, and wild rice planted 

460

on base acreage, there is no such need or requirement for the level 

of accuracy. Therefore, under this provision the Managers do not 

intend for any penalty to be applicable to inaccurate acreage reports on covered commodities or peanuts, provided the producer 

has made a good faith effort to accurately report acreage. (Section 

1305) 

(46) Planting Flexibility 

The House bill provides that generally, producers may plant 

any commodity on the peanut acres of a farm, except fruits and 

vegetables (other than lentils, mung beans, and dry peas), and wild 

rice. 

Paragraph (1) shall not limit the planting of an agriculture 

commodity in (A) any region in which there is a history of doublecropping of peanuts with agriculture commodities specified in paragraph (1), as determined by the Secretary, in which case the double-cropping shall be permitted; (B) on a farm that the Secretary 

determines has a history of planting agriculture commodities specified in paragraph (1) on peanut acres, except that fixed, decoupled 

payments and counter-cyclical payments shall be reduced by an 

acre for each acre planted to such an agriculture commodity; or (C) 

by a peanut producer who the Secretary determines has an established planting history of a specific agriculture commodity specified 

in paragraph (1), except that the quantity planted may not exceed 

the peanut producer’s average annual planting history of such agriculture commodity in the 1991 through 1995 crop years (excluding 

any crop year in which no plantings were made); and fixed decoupled payments and counter-cyclical payments shall be reduced by 

an acre for each acre planted to such agriculture commodity. (Section 166) 

The Senate amendment provides that generally, producers may 

plant any commodity on the peanut acres of a farm, except fruits 

and vegetables (other than lentils, mung beans, and dry peas), and 

in the case of the 2003 and subsequent crops of an agriculture commodity, wild rice. 

Paragraph (1) shall not limit the planting of an agriculture 

commodity in (A) any region in which there is a history of doublecropping of peanuts with agriculture commodities specified in paragraph (1), as determined by the Secretary, in which case the double-cropping shall be permitted; (B) on a farm that the Secretary 

determines has a history of planting agriculture commodities specified in paragraph (1) on peanut acres, except that direct payments 

and counter-cyclical payments shall be reduced by an acre for each 

acre planted to the agriculture commodity; or (C) by the peanut 

producers on a farm that the Secretary determines has an established planting history of a specific agriculture commodity specified 

in paragraph (1), except that the quantity planted may not exceed 

the average annual planting history of the agricultural commodity 

by the peanut producers on the farm during the 1996 through 2001 

crop years (excluding any crop year in which no plantings were 

made), as determined by the Secretary and direct payments and 

counter-cyclical payments shall be reduced by an acre for each acre 

planted to the agriculture commodity. (Section 151) 

461

The Conference substitute adopts the House provision with an 

amendment that provides that the planting of fruits, vegetables 

(other than lentils, mung beans and dry peas) and wild rice shall 

be prohibited on base acreage unless the commodity, if planted, is 

destroyed before harvest. 

The planting of fruits and vegetables produced on trees and 

other perennials shall be prohibited on base acres. 

The Secretary shall establish a producer planting history for 

fruits, vegetables and wild rice planted by the producers on the 

farm in the 1991 through 1995 or 1998 through 2001 crop years. 

(Section 1306) 

(47) Marketing Assistance Loans and Loan Deficiency Payments for 

Peanuts 

The House bill provides that for each of the 2002 through 2011 

crop of peanuts, the Secretary shall make available to peanut producers on a farm non-recourse marketing assistance loans for peanuts produced on the farm. Any production of peanuts on a farm 

shall be eligible for a marketing assistance loan. 

In carrying out this subsection, the Secretary shall make loans 

to a peanut producer that is otherwise eligible to obtain a marketing assistance loan, but for the fact the peanuts owned by the 

peanut producer are commingled with other peanuts in facilities 

unlicensed for the storage of agricultural commodities by the Secretary or a State licensing authority, if the peanut producer obtaining the loan agrees to immediately redeem the loan collateral in accordance with section 166 of the Federal Improvement and Reform 

Act of 1996. 

A marketing assistance loan and loan deficiency payments may 

be obtained at the option of the peanut producer through a designated marketing association of peanut producers that is approved 

by the Secretary; or the Farm Service Agency. 

The loan rate for a marketing assistance loan for peanuts shall 

be equal to $350 per ton. 

A marketing assistance loan for peanuts under subsection (a) 

shall have a term of nine months beginning on the first day of the 

first month after the month in which the loan is made. The Secretary may not extend the term of a marketing assistance loan 

under subsection (a). 

The Secretary shall permit producers to repay a marketing assistance loan for peanuts at a rate that is the lesser of the loan 

rate for the commodity plus interest; or a rate that the Secretary 

determines will minimize loan forfeitures, accumulation of stocks, 

storage costs, and allow peanuts produced in the United States to 

be marketed freely and competitively. 

The Secretary may make loan deficiency payments available to 

peanut producers who, although eligible to obtain a marketing assistance loan for peanuts, agree to forgo obtaining the loan for the 

peanuts in return for payments. 

A loan deficiency payment shall be computed by multiplying 

the loan payment rate and the quantity of the peanuts produced 

by the peanut producers, excluding any quantity for which the producers obtain a loan under subsection (a). 

462

The loan payment rate shall be the amount by which the loan 

rate exceeds the rate at which a loan may be repaid. 

The Secretary shall make a payment under this subsection to 

a peanut producer with respect to a quantity of peanuts as of the 

earlier of (A) the date on which the peanut producer marketed or 

otherwise lost beneficial interest in the peanuts or (B) the date the 

peanut producer requests the payment. 

As a condition of the receipt of a marketing assistance loan, 

the peanut producer shall comply with applicable conservation and 

wetland protection requirements, during the term of the loan. 

To the extent practicable, the Secretary shall implement any 

reimbursable agreements or provide for the payment of expenses 

under this chapter in a manner that is consistent with such activities in regard to other commodities. 

This section terminates section 155 of the Federal Agriculture 

Improvement and Reform Act of 1996, which provided superseded 

price support authority. (Section 166) 

The Senate amendment provides that for each of the 2002 

through 2006 crops of peanuts, the Secretary shall make available 

to peanut producers on a farm non-recourse marketing assistance 

loans for peanuts produced on the farm. The producers on a farm 

shall be eligible for a marketing assistance loan under this section 

for any quantity of peanuts produced on the farm. 

In carrying out this section, the Secretary shall make loans to 

peanut producers on a farm that would be eligible to obtain a marketing assistance loan, but for the fact the peanuts owned by the 

peanut producers on the farm are commingled with other peanuts 

of other producers in facilities unlicensed for the storage of agricultural commodities by the Secretary or a State licensing authority, 

if the peanut producers on a farm obtaining the loan agree to immediately redeem the loan collateral in accordance with section 

158E. 

A marketing assistance loan and loan deficiency payments may 

be obtained at the option of the peanut producers on a farm 

through (A) a designated marketing association of peanut producers that is approved by the Secretary, (B) the Farm Service 

Agency, or (C) a loan servicing agent approved by the Secretary. 

The loan rate for a marketing assistance loan for peanuts shall 

be equal to $400 per ton. 

A marketing assistance loan for peanuts under subsection (a) 

shall have a term of nine months beginning on the first day of the 

first month after the month in which the loan is made. The Secretary may not extend the term of a marketing assistance loan for 

peanuts under subsection (a). 

The Secretary shall permit peanut producers on a farm to 

repay a marketing assistance loan for peanuts at a rate that is the 

lesser of the loan rate for peanuts plus interest or a rate that the 

Secretary determines will minimize forfeitures, accumulation of 

stocks, storage costs; and allow peanuts produced in the United 

States to be marketed freely and competitively. 

The Secretary may make loan deficiency payments available to 

the peanut producers on a farm that, although eligible to obtain a 

marketing assistance loan for peanuts under subsection (a), agree 

463

to forgo obtaining the loan for the peanuts in return for payments 

under this subsection. 

A loan deficiency payment shall be obtained by multiplying the 

loan payment rate by the quantity of the peanuts produced by the 

peanut producers on the farm, excluding any quantity for which 

the producers on a farm obtain a loan under subsection (a). 

The loan payment rate shall be the amount by which the loan 

rate exceeds the rate at which a loan may be repaid. 

The Secretary shall make a payment under this subsection to 

the peanut producers on a farm with respect to a quantity of peanuts as of the earlier of (A) the date on which the peanut producers 

on the farm marketed or otherwise lost beneficial interest in the 

peanuts, as determined by the Secretary or (B) the date the peanut 

producers on the farm request the payment. 

As a condition of the receipt of a marketing assistance loan 

under subsection (a), the peanut producers on a farm shall comply 

during the term of the loan with applicable conservation and wetland protection requirements. 

To the maximum extent practicable, the Secretary shall implement any reimbursable agreements or provide for the payment of 

expenses under this chapter in a manner that is consistent with 

the implementation of the agreements or payment of the expenses 

for other commodities. 

This section terminates Section 155 of the Federal Agriculture 

Improvement and Reform Act of 1996 is repealed. (Section 151)

The Conference substitute adopts the House provision with an 

amendment modifying the options the producer has for obtaining 

a marketing assistance loan and loan deficiency payments to not 

only include a designated marketing association and the Farm 

Service Agency, but also a marketing cooperative of producers. 

Effective for the 2002 through 2006 crop of peanuts, to ensure 

proper storage of peanuts for which a loan is made under this section, the Secretary shall use the funds of the Commodity Credit 

Corporation to pay storage, handling, and other associated costs. 

This authority terminates beginning with the 2007 crop of peanuts. 

Also included is nondiscriminatory language for individuals or entities seeking approval to store peanuts for which a marketing loan 

is made. 

The amendment added language that a marketing association 

or cooperative may market peanuts for which a loan is made under 

this section in any manner that conforms to consumer needs, including the separation of peanuts by type and quality. 

The amendment added language on good faith exemptions to 

the beneficial interest requirement for the 2002 crop of peanuts. In 

the case of the producers on a farm that marketed or otherwise lost 

beneficial interest in the peanuts for which a marketing assistance 

loan was made under this section before repaying the loan, the Secretary shall permit the producers to repay the loan at the appropriate repayment rate that was in effect for peanuts under this 

subsection as of the date that the producers lost beneficial interest, 

as determined by the Secretary, if the Secretary determines the 

producers acted in good faith. 

The amendment establishes a special rule for the 2002 crop 

year loan deficiency payments. For the 2002 crop year only, the 

464

Secretary shall determine the amount of the loan deficiency payment to be made to the producers on a farm with respect to a 

quantity of peanuts using the payment rate for peanuts as of the 

earlier of the following: the date on which the producers marketed 

or otherwise lost beneficial interest in the crop, as determined by 

the Secretary, or the date the producers request the payment. 

The loan rate for a marketing assistance loan for peanuts shall 

be equal to $355 per ton. (Section 1307) 

The Managers encourage the Department to continue its traditional practice of accounting for all commingled peanuts such that 

all peanuts stored commingled with peanuts covered by a marketing assistance loan are graded and exchanged on a dollar value 

basis unless it is the determination of the Secretary that the beneficial interest in peanuts covered by the marketing assistance loan 

have been transferred to other parties prior to demand for delivery. 

(48) Quality Improvement 

The House bill peanuts placed under a marketing assistance 

loan under section 167 shall be officially inspected and graded by 

Federal or State inspectors. Peanuts not placed under a marketing 

assistance loan may be graded at the option of the producer. 

This section terminates the Peanut Administrative Committee 

and the Secretary is directed to establish a Peanut Standards 

Board for the purpose of assisting in the establishment of quality 

standards for peanuts. The authority of the Board is limited to assisting in the establishment of quality standards for peanuts. The 

members of the Board should fairly reflect all regions and segments of the peanut industry. 

This section shall take effect with the 2002 crop of peanuts. 

(Section 168) 

The Senate amendment provides that all peanuts placed under 

a marketing assistance loan under section 158G shall be officially 

inspected and graded by a Federal or State inspector. Peanuts not 

placed under a marketing assistance loan may be graded at the option of the peanut producers on a farm. 

The Senate amendment provides that this section terminates 

the Peanut Administrative Committee. The Secretary shall establish a Peanut Standards Board for the purpose of assisting in the 

establishment of quality standards with respect to peanuts. The 

Secretary shall appoint members to the Board that, to the maximum extent practicable, reflect all regions and segments of the 

peanut industry. The Board shall assist the Secretary in establishing quality standards for peanuts. 

This section shall apply beginning with the 2002 crop of peanuts. (Section 151) 

The Conference substitute adopts the Senate provision with an 

amendment requiring all peanuts marketed in the United States to 

be officially inspected and graded by Federal or Federal-State inspectors. 

The amendment clarifies the composition of the Peanut Standards Board, the terms for members, and provides language to transition from the Peanut Administrative Committee to the Peanut 

Standards Board. (Section 1308) 

465

It is the Managers’ intention that the definition of ‘‘peanut industry representatives’’ includes, but is not limited to, representatives of the manufacturers, shellers, buying points, marketing associations and marketing cooperatives. 

The Managers expect the Secretary, when developing inspection and grading standards, to encourage the use of the latest technology and evaluation systems to eliminate costs and increase efficiency in the inspection and grading process. The Secretary should 

also encourage the use of the latest research and technology to assist in the elimination and prevention of aflatoxin. 

(49) Payment Limitations 

The House bill provides that separate payment limitations 

shall apply to peanuts with respect to fixed, decoupled payments, 

counter-cyclical payments, and limitations on marketing loan gains 

and loan deficiency payments. 

The Senate amendment contains no comparable provision in 

Chapter 3. 

The Conference substitute provides the total direct and 

counter-cyclical payments to a person for corn, grain sorghum, barley, oats, wheat, soybeans, minor oilseeds, cotton and rice may not 

exceed $40,000 and $65,000, respectively. The total marketing loan 

gains and loan deficiency payments for corn, grain sorghum, barley, 

oats, wheat, soybeans, minor oilseeds, cotton, rice, lentils, dry peas 

and small chickpeas that a person is entitled to receive is $75,000. 

Provides for a separate direct and counter-cyclical payment 

limitation for peanuts of $40,000 and $65,000, respectively. Provides for a separate marketing loan gain and loan deficiency payments limitation for peanuts, wool, mohair and honey of $75,000. 

Retains current rules on husband and wife, 3-entities, actively 

engaged and generic certificates. 

Adopts the $2.5 million adjusted gross income means test. 

The Conference substitute refers to levels of adjusted gross income or comparable measures of income. The Managers intend that 

the comparable measure provision be utilized when necessary and 

in cases of applicants for whom, because of their status under the 

Internal Revenue Code, adjusted gross income is not measured or 

reported. For example, participants who are organized as C Corporations, S Corporations, or as nonprofit organizations, the Managers intend for the Secretary to use this direction to adopt alternative income measurements that compare most closely to adjusted 

gross income. (Section 1309) 

The Managers expect the Secretary to implement this provision in a manner that provides equitable treatment, to the maximum extent practicable to all producers regardless of the legal 

structure of their farming operation. 

For purposes of subsection (b), the Managers expect the Secretary to determine the individual or entity to be ineligible only if 

the adjusted gross income or similar equivalent exceeds $2.5 million and less than 75 percent of the adjusted gross income is derived from farming, ranching or forestry operations as determined 

by the Secretary. 

466

(50) Termination of Marketing Quota Programs for Peanuts and 

Compensation to Peanut Quota Holders for Loss of Quota Asset 

Value 

The House bill repeals the marketing quota for peanuts, part 

VI of subtitle B of title III of the Agricultural Adjustment Act of 

1938. 

The marketing quota as in effect the day before the date of enactment of this Act, shall continue to apply with respect to the 

2001 crop of peanuts. 

The Secretary shall offer to enter into a contract with eligible 

peanut quota holders for the purpose of providing compensation for 

the lost value of the quota on account of the repeal of the marketing quota program for peanuts. Under the contracts, the Secretary shall make payments to eligible peanut quota holders during 

fiscal years 2002 through 2006. The payments required under the 

contracts shall be provided in five equal installments not later than 

September 30 of each of the fiscal years 2002 through 2006. 

The amount of the payment for a fiscal year to a peanut quota 

holder under a contract shall be equal to the product obtained by 

multiplying $0.10 per pound by the actual farm poundage quota 

(excluding seed and experimental peanuts) established for the peanut quota holder’s farm for the 2001 marketing year. 

The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act, relating to the assignment of payments, shall 

apply to the payments made to peanut quota holders under the 

contracts. The peanut quota holder making the assignment or the 

assignee, shall provide the Secretary with notice, in such a manner 

as the Secretary may require, of any assignment made under this 

subsection. 

This section defines peanut quota holder as a person or enterprise that owns a farm that was eligible, immediately before the 

date of the enactment of this Act, to have a peanut quota established upon it; if there are not quotas currently established, would 

be eligible to have a quota established upon it for the succeeding 

crop year; or is otherwise a farm that was eligible for such a quota 

at the time the general quota establishment authority was repealed. 

The Secretary shall apply this definition without regard to 

temporary leases or transfers or quotas for seed or experimental 

purposes. (Section 170) 

The Senate amendment provides the effective beginning with 

the 2002 crop of peanuts, part VI of subtitle B of title III of the 

Agriculture Adjustment Act of 1938 is repealed. 

This section and the amendments made by this section apply 

beginning with the 2002 crop of peanuts. 

The Secretary shall offer to enter into a contract with peanut 

quota holders for the purpose of providing compensation for the lost 

value of quota as a result of the repeal of the marketing quota program for peanuts. Under a contract, the Secretary shall make payments to an eligible peanut quota holder for each of fiscal years 

2002 through 2006. The payments required under the contracts 

shall be provided in 5 equal installments not later than September 

30 of each of the fiscal years 2002 through 2006. 

467

The amount of the payment for a fiscal year to a peanut quota 

holder under contract shall be equal to the product obtained by 

multiplying $0.11 by the actual farm poundage quota (excluding 

any quantity for seed and experimental peanuts) established for 

the farm of a peanut quota holder for the 2001 marketing year. 

The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act, relating to assignment of payments, shall 

apply to the payments made to peanut quota holders under the 

contracts. The peanut quota holder making the assignment, or the 

assignee, shall provide the Secretary with notice, in such a manner 

as the Secretary may require, of any assignment made under this 

subsection. 

This section defines peanut quota holder as a person or entity 

that owns a farm that (I) held a peanut quota established for the 

farm for the 2001 crop of peanuts; (II) if there was not such a quota 

established for the farm for the 2001 crop of peanuts, would be eligible to have such a quota established for the farm for the 2002 

crop of peanuts; (III) is otherwise a farm that was eligible for such 

a quota as of the effective date of the amendments made by this 

section. 

The Secretary shall apply the definition of peanut quota holder 

without regard to temporary leases, transfers, or quotas for seed or 

experimental purposes. (Section 152) 

The Conference substitute adopts the House provision with 

clarifying language to the quota holder definition. The quota compensation payment shall be $0.11 per year for a total of five years. 

The amendment gives an option to eligible peanut quota holders 

entitled to payments under a contract to receive the entire payment in a single lump sum. 

The amendment adds disposal language to allow the Secretary 

to ensure that the disposal of peanuts for which a loan for the 2001 

crop was made is carried out in a manner that prevents price disruptions in the domestic and international markets for peanuts. 

The amendment adds language on the effect of termination on 

crop insurance policies. The subsection shall apply for the 2002 

crop year only notwithstanding any other provision of law or crop 

insurance policy. The nonquota price election for segregation I, II, 

and III shall be 17.75 cents per pound and shall be used for all aspects of the policy relating to the calculations of premium, liability, 

and indemnities. For the purposes of quality adjustment only, the 

average support price per pound of peanuts shall be a price equal 

to 17.75 cents per pound. Quality under the crop insurance policy 

for peanuts shall be adjusted under procedures issued by the Federal Crop Insurance Corporation. (Section 1310) 

SUBTITLE D—ADMINISTRATION

(51) Administration Generally

The House bill provides that: 

(a) USE OF COMMODITY CREDIT CORPORATION.—The Secretary 

shall carry out this title through the Commodity Credit Corporation. 

(b) DETERMINATIONS BY SECRETARY.—A determination made by 

the Secretary under this title shall be final and conclusive. 

468

(c) REGULATIONS.—Not later than 90 days after the date of the 

enactment of this Act, the Secretary and the Commodity Credit 

Corporation, as appropriate, shall issue such regulations as are 

necessary to implement this title. The issuance of the regulations 

shall be made without regard to—

(1) the notice and comment provisions of section 553 of 

title 5, United States Code; 

(2) the Statement of Policy of the Secretary of Agriculture 

effective July 24, 1971 (36 Fed. Reg. 13804) relating to notices 

of proposed rulemaking and public participation in rulemaking, 

and 

(3) chapter 35 of title 44, United States Code (commonly 

known as the ‘‘Paperwork Reduction Act’’). 

(d) PROTECTION OF PRODUCERS.—The protection afforded producers that elect the option to accelerate the receipt of any payment under a production flexibility contract payable under the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 

7212 note) shall also apply to the advance payment of fixed, decoupled payments and counter-cyclical payments. 

(e) ADJUSTMENT AUTHORITY RELATED TO URUGUAY ROUND

COMPLIANCE.—If the Secretary determines that expenditures under 

subtitles A, B, and C that are subject to the total allowable domestic support levels under the Uruguay Round Agreements (as defined in section 2(7) of the Uruguay Round Agreements Act (19 

U.S.C. 3501(7))), as in effect on the date of the enactment of this 

Act, will exceed such allowable levels for any applicable reporting 

period, the Secretary may make adjustments in the amount of such 

expenditures during that period to ensure that such expenditures 

do not exceed, but in no case are less than, such allowable levels. 

(Section 181) 

The Senate amendment provides that: 

(a) IN GENERAL.—The Secretary of Agriculture may promulgate such regulations as are necessary to implement this Act and 

the amendments made by this Act. 

(b) PROCEDURE.—The promulgation of the regulations and administration of title I and sections 456 and 508 and the amendments made by title I and sections 456 and 508 shall be made 

without regard to—

(1) the notice and comment provisions of section 553 of 

title 5, United States Code; 

(2) the Statement of Policy of the Secretary of Agriculture 

effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices 

of proposed rulemaking and public participation in rulemaking; 

and (3) chapter 35 of title 44, United States Code (commonly 

known as the ’’Paperwork Reduction Act’’). 

(c) CONGRESSIONAL REVIEW OF AGENCY RULE-MAKING.—In carrying out subsection (b), the Secretary shall use the authority provided under section 808 of title 5, United States Code. 

Amends Section 161 of the FAIR Act to allow the Secretary to 

adjust the amount of domestic support to assure compliance with 

Uruguay Round obligations. 

Requires the Secretary to report to Congress of intent to make 

adjustment and allows adjustment unless a joint resolution disVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00472 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
469

approving the adjustments is enacted by both Houses of Congress 

within 60 days. 

Requires annual reports on domestic support by April 30 of 

each year. (Section 164 and 1099) 

The Conference substitute adopts the House provision with an 

amendment that provides for the Secretary, to the maximum extent practicable, make adjustments in the amount of such expenditures during that period to ensure that such expenditures do not 

exceed such allowable levels. 

Before making any adjustment, the Secretary shall submit to 

the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives a report describing the determination made and the extent of 

the adjustment made. 

The Conference has made it a priority to craft a program that 

provides assistance to producers in a way that is consistent with 

our obligations under the Uruguay Round Agreement on Agriculture. (Section 1601) 

(52) Extension of Suspension of Permanent Price Support Authority 

The House bill amends Section 171 of the FAIR Act. 

(a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—Section 

171(a)(1) of the Federal Agriculture Improvement and Reform Act 

of 1996 (7 U.S.C. 7301(a)(1)) is amended by striking ‘‘2002’’ both 

places it appears and inserting ‘‘2011’’. (b) AGRICULTURAL ACT OF 1949.—Section 171(b)(1) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 

7301(b)(1)) is amended by striking ‘‘2002’’ both places it appears 

and inserting ‘‘2011’’. (c) SUSPENSION OF CERTAIN QUOTA PROVISIONS.—Section 

171(c) of the Federal Agriculture Improvement and Reform Act of 

1996 (7 U.S.C. 7301(c)) is amended by striking ‘‘2002’’ and inserting ‘‘2011’’. (Section 182) 

The Senate amendment amends Section 171 of the Fair Act. 

Section 171 of the Federal Agriculture Improvement and Reform 

Act of 1996 (7 U.S.C. 7301) is amended—

(1) by striking ‘‘2002’’ each place it appears and inserting 

‘‘2006’’; and 

(2) in subsection (a)(1)—

(A) by striking subparagraph (E); and 

(B) by redesignating subparagraphs (F) through (I) as subparagraphs (E) through (H), respectively. (Section 165) 

The Conference substitute adopts the House provision 

with an amendment. (Section 1602) 

(53) Commodity Purchases 

The Senate Amendment provides new mandatory spending for 

commodity purchases with a specific amount for specialty crops, for 

the Department of Defense nutrition program and for the Emergency Food Assistance Program. (Section 166) 

The House Bill contains no similar provision. 

The Conference Substitute adopts the Senate provision with an 

amendment to provide a minimum of $200 million per year from 

Section 32 funds for the purchase of fruits, vegetables and other 

470

specialty food crops. A minimum of $50 million per year of these 

funds is to be spent on the Department of Defense Fresh Program. 

And the Secretary shall submit a report not later than 1 year after 

the date of the enactment of this Act, to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate that analyzes by 

type the commodities purchased under this section as well as by 

type the commodities purchased using all other Section 32 funds. 

(Section 10603) 

The Managers intend that the funds made available under this 

section are to be used for additional purchases of fruits and vegetables, over and above the purchases made under current law or that 

might otherwise be made without this authority. The Managers expect the $200 million to be a minimum amount for fruit and vegetable purchases under Section 32 funds; it is not intended to interfere with or decrease from Agricultural Marketing Service’s historical purchases of fruits and vegetables [e.g. $243 million in 2001; 

$232 million in 2000] or to decrease or displace other commodity 

purchases. It is the Managers’ further intention that tree nuts may 

be included in the Secretary’s definition of ‘‘other specialty food 

crops’’ purchases for this section. The Managers intend that none 

of the amounts made available under this section for the purchases 

of fruits, vegetables, and other specialty food crops may be used to 

purchase apples for 2002 and 2003. The Secretary may continue to 

purchase apples under other existing authority. The amendment requires that a minimum of $50 million from the $200 million made available under section 10603 be used exclusively for additional purchases of fresh fruits and vegetables for the 

schools through the ‘‘DoD Fresh’’ program. The Department of Ag- riculture currently provides $25 million in funding each year for 

the purchase of fresh fruits and vegetables for the schools, pursuant to existing authority under the School Lunch Act. Through a 

1995 memorandum of agreement between the Agricultural Marketing Service, the Food & Consumer Service, and the Defense Personnel Support Center, the Department of Defense serves as the 

servicing agency for the procurement of these fresh fruits and vegetables through the ‘‘DoD Fresh’’ program. The Managers strongly 

support efforts to fully utilize this program to assist small businesses, specialty crop producers, and schools in providing greater 

quantities of fresh fruits and vegetables in USDA feeding programs, and expects the Secretary to review the effectiveness of the 

program in meeting these goals on an on-going basis. 

(54) Hard White Wheat Incentive Payments 

The Senate amendment amends Sec. 193 of the FAIR Act. For 

crop years 2003 through 2005, this section requires the Secretary 

to use $40 million of funds of the Commodity Credit Corporation 

to provide incentive payments to producers of hard white wheat. 

The program offers wheat producers an alternative crop to meet a 

growing international market opportunity. (Section 167) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that provides for the 2003 through 2005 crop years, a 

total of $20 million in hard white wheat incentive payments to 

471

growers that demonstrate that buyers and end-users are available 

for the wheat to be covered by the incentive payment. (Section 

1616) 

(55) Limitations 

The House bill amends section 1001 of the Food Security Act 

of 1985 to delete the references to production flexibility contract 

and AMTA and include fixed, decoupled and counter-cyclical payment limitations. The total fixed, decoupled payments and countercyclical payments to a person may not exceed $50,000 and $75,000, 

respectively. The total of marketing loan gains and loan deficiency 

payments that a person is entitled to receive is $150,000. 

Peanuts, honey and wool and mohair have limitations for the 

applicable programs separate from other commodities. (Section 183) 

The Senate amendment amends Section 1001 of the Food Security Act of 1985. The total of direct and counter-cyclical payments 

that an individual or entity may receive during any fiscal year for 

program commodities shall not exceed $75,000. The total of marketing loan gains, forfeiture gains, gains from marketing certificates and loan deficiency payments that a person is entitled to receive for program crops, peanuts, honey and wool is $150,000 per 

crop year. 

During a fiscal and corresponding crop year, the total amount 

of payments and benefits that a married couple may receive from 

direct, counter-cyclical and marketing loan is $75,000 and $150,000 

respectively, plus a combined total of an additional $50,000. (Section 169) 

The Conference substitute provides the total direct and 

counter-cyclical payments to a person for corn, grain sorghum, barley, oats, wheat, soybeans, minor oilseeds, cotton and rice may not 

exceed $40,000 and $65,000, respectively. The total marketing loan 

gains and loan deficiency payments for corn, grain sorghum, barley, 

oats, wheat, soybeans, minor oilseeds, cotton, rice, lentils, dry peas 

and small chickpeas that a person is entitled to receive is $75,000. 

Provides for a separate direct and counter-cyclical payment 

limitation for peanuts of $40,000 and $65,000, respectively. Provides for a separate marketing loan gain and loan deficiency payments limitation for peanuts, wool, mohair and honey of $75,000. 

Retains current rules on husband and wife, 3-entities, actively 

engaged, generic certificates and adopts the $2.5 million adjusted 

gross income means test. 

The Conference substitute refers to levels of adjusted gross income or comparable measures of income. The Managers intend that 

the comparable measure provision be utilized when necessary and 

in cases of applicants for whom, because of their status under the 

Internal Revenue Code, adjusted gross income is not measured or 

reported. For example, participants who are organized as C Corporations, S Corporations, or as nonprofit organizations, the Managers intend for the Secretary to use this direction to adopt the use 

of income measure terms that compare most closely to adjusted 

gross income. The Managers expect the Secretary to implement 

this provision in a manner that provides equal treatment, to the 

maximum extent practicable across all producers regardless of the 

legal structure of their farming operation. 

472

For purposes of subsection (b), the Managers expect the Secretary to determine the individual or entity to be ineligible only if 

the adjusted gross income or similar equivalent exceeds $2.5 million and less than 75 percent of the adjusted gross income is derived from farming, ranching or forestry operations as determined 

by the Secretary. (Section 1603) 

(56) Adjustments of Loans 

The House bill extends current authority to adjust loans so, to 

the maximum extent practicable, the average loan level for a commodity will be equal to the level of support determined appropriate 

under this Act. (Section 184) 

The Senate amendment retains current law as section 162 of 

the FAIR Act with ‘‘loan commodity’’ reference. (Section 171)

The Conference substitute adopts the House provision. (Section 

1606) 

(57) Personal Liability of Producers for Deficiencies 

The House bill amends Section 164 of the FAIR Act by striking ‘‘this title’’ and inserting ‘‘this title and title I of the Farm Security 

Act of 2001’’. The liability of a producer is limited if the collateral 

securing any nonrecourse loan is sold as long as the sale was not 

fraudulent. (Section 185) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

1607) 

(58) Extension of Existing Administrative Authority Regarding 

Loans 

The House bill amends Section 166 of the FAIR Act. The full 

protection of marketing loan assistance to producers is extended 

under this Act. (Section 186) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment that includes a reference to this Act. (Section 1608) 

(59) Assignment of Payments 

The House bill provides that producers may assign any payments received under this Act by providing notice in a manner prescribed by the Secretary. (Section 187) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

1612) 

(60) Report on Effect of Certain Farm Payments 

The House bill requires the Secretary to review the effects that 

payments under production flexibility contracts and market loss assistance payments have had, and that fixed, decoupled and 

counter-cyclical payments are likely to have, on the economic viability of producers and the farming infrastructure. The review shall 

include a case study on the effects these payments are likely to 

have on rice producers, millers and the economies of rice farming 

areas in Texas. (Section 187) 

The Senate amendment contains no comparable provision. 

473

The Conference substitute adopts the House provision. (Section 

???) 

(62) Reserve Stock Level 

The Senate amendment reduces the reserve stock level for 

Flue-cured tobacco from 100 million pounds (farm sales weight) to 

75 million pounds or 10 percent of the national marketing quota. 

(Section 162) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that reduces the reserve stock level for Flue-cured tobacco from 100 million pounds (farm sales weight) to 60 million 

pounds. (Section 1610) 

(63) Farm Reconstitutions 

The Senate amendment provides for the 2002 crop only, the 

Secretary shall allow special farm reconstitutions, in lieu of lease 

of tobacco quota. Requires a study on the effects of limitation on 

producers who move quota. (Section 163) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 1611) 

(64) Livestock Assistance Program 

The Senate amendment authorizes appropriations of $500 million for each of fiscal years 2003 through 2008 for the livestock assistance program. (Section 168) 

The House bill contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

10104) 

(65) Restriction of Commodity and Crop Insurance Payments, Loans 

and Benefits to Previously Cropped Land 

The Senate amendment restricts commodity and crop insurance payments to previously cropped land. To be eligible for benefits, land must have been planted, considered planted or devoted to 

an agricultural commodity (excluding forage, livestock, timber, forest products, or hay) at least 1 of the 5 crop years preceding the 

2002 crop year, or at least 3 of the 10 crop years preceding the 

2002 crop year, or at least 1 of the 20 crop years preceding 2002 

crop year if the land has been maintained, using long-term crop rotation practices. 

There are exceptions for land enrolled in the conservation reserve program and land under the jurisdiction of an Indian tribe. 

(Section 170) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(66) Reports of Equitable Relief and Misaction-Misinformation Requests 

The Senate amendment requires the Secretary to submit to the 

Committee on Agriculture of the House of Representatives and the 

Committee on Agriculture, Nutrition and Forestry of the Senate a 

report that describes the requests for equitable relief. (Section 172) 

474

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that provides State Executive Directors of the Farm 

Service Agency and State Conservationists with the Natural Resource Conservation Service authority to grant relief in special circumstances. In addition, a report is required to be provided annually that describes for the previous calendar year, the number of 

requests for equitable relief and the disposition of the requests. 

(Section 1613) 

(67) Estimates of Net Farm Income 

The Senate amendment requires the Secretary to include—

‘‘(1) an estimate of the net farm income earned by commercial producers in the United States; and 

‘‘(2) an estimate of the net farm income attributable to 

commercial producers of each of—

‘‘(A) livestock; 

‘‘(B) loan commodities; and 

‘‘(C) agricultural commodities other than loan commodities.’’ (Section 173) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 1615)

(68) Commodity Credit Corporation Inventory 

The Senate amendment authorizes the Commodity Credit Corporation to use private sector entities when purchasing and selling 

commodities. (Section 174) 

The House bill contains no comparable provision. 

The Conference substitute accepts the Senate provision. (Section 1609) 

(69) Agricultural Producers Supplemental Payments and Assistance 

The Senate amendment authorizes the Secretary to make payments to persons who are eligible to receive assistance under Public Law 107–25 but who did not receive the payments or assistance 

prior to October 1, 2001. 

The amount of payments or assistance shall not exceed the 

amount of payments or assistance the person would have been eligible to receive under Public Law 107–25. 

The House bill contains no comparable provision. 

The Conference substitute accepts the Senate provision with 

an amendment to also include producers participating in 1998, 

1999, 2000 or 2001 economic or disaster assistance programs that 

have not been paid. (Section 1617) 

SUBTITLE E—PAYMENT LIMITATION COMMISSION

(70) Establishment of Commission 

The Senate amendment establishes commission, specifies membership, establishes terms, meetings, quorum, and provides that 

the Secretary appoint one commissioner to serve as Chair. (Section 

181) 

The House bill contains no comparable provision. 

475

The Conference substitute provides for the establishment of a 

Commission on the Application of Payment Limitations for Agriculture. 

The Commission shall be composed of 10 members of which 3 

members are appointed by the Secretary of Agriculture, 3 members 

by the Committee on Agriculture, Nutrition and Forestry of the 

Senate, 3 members by the Committee on Agriculture of the House 

of Representatives and the Chief Economist of the Department of 

Agriculture. 

The Managers encourage the appointing authorities to ensure 

that the membership of the commission has a diversity of experiences and expertise on the issues to be studied by the Commission. 

(Section 1605) 

(71) Duties 

The Senate amendment requires the commission to conduct a 

comprehensive review of payment limitations. (Section 182) 

The House bill contains no comparable provision. 

The Conference substitute requires that the Commission conduct a study on the potential impacts of further payment limitations on the receipt of direct payments, counter-cyclical payments, 

and marketing loan gains and loan deficiency payments on farm income, land values, rural communities, agribusiness infrastructure, 

planting decisions, supply and prices of covered commodities and 

other agriculture commodities, including fruits and vegetables. 

Not later than 1 year after the date of enactment of this Act, 

the Commission shall submit a report containing the results of the 

study, including such recommendations as the Commission considers appropriate. 

The Managers intend for the Commission to examine the feasibility of improving the application and effectiveness of payment 

limitation requirements, including the use of commodity certificates 

and unlimited forfeiture of loan collateral. (Section 1605) 

(72) Powers 

The Senate amendment authorizes the commission to hold 

hearings and obtain information from Federal agencies. (Section 

183) 

The House bill contains no comparable provision. 

The Conference substitute provides that the Commission may 

hold such hearings, meet and act, take testimony and receive evidence the Commission considers advisable to carry out their duties. 

(Section 1605) 

(73) Commission Personnel Matters 

The Senate amendment provides for compensation of members. 

(Section 184) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 1605) 

(74) Federal Advisory Committee Act 

The Senate amendment exempts the commission from the Federal Advisory Committee Act. (Section 185) 

476

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 1605) 

(75) Funding 

The Senate amendment authorizes the Secretary to use not 

more than $100,000 of the funds of the CCC to carry out this subtitle. (Section 186) 

The House bill contains no comparable provision. 

The Conference substitute provides that the Commission may 

use the mail in the same manner and under the same conditions 

as other agencies of the Federal Government, allows the Secretary 

to provide appropriate office space and allows for the reimbursement of travel expenses. (Section 1605) 

(76) Termination of Commission 

The Senate amendment provides that the Commission terminates on the day after the Commission submits its report. (Section 

187) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

SUBTITLE F—EMERGENCY AGRICULTURE ASSISTANCE

(77) Income Loss Assistance 

The Senate amendment provides $500 million in emergency 

livestock assistance for 2001 losses. (Section 192) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision.

(78) Market Loss Assistance for Apple Producers 

The Senate amendment provides $100 million for apple producers for the loss of markets during the 2000 crop year and further specifies payment quantity and payment/eligibility limitations 

parameters. (Section 193) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments to provide $94 million to apple producers for the loss 

of markets during the 2000 crop year, payment quantity parameters are retained, the Secretary shall not establish a payment limitation or an income eligibility limitation with respect to payments 

made on the payment quantity of 5 million pounds of apples produced on the farm; and promulgation of regulations and administration of this section will be exempt from the rulemaking requirements and Paperwork Reduction Act. Also provides $10 million as 

a grant to the State of New York to be used to support current 

onion producers in Orange County, New York, who have suffered 

losses to onion crops during one or more of the 1996 through 2000 

crop years. (Section 10105) 

(79) Commodity Credit Corporation 

The Senate amendment authorizes the Secretary to use the 

funds, facilities, and authorities of the Commodity Credit Corporation to carry out this subtitle. (Section 194) 

477

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(80) Administrative Expenses 

The Senate amendment authorizes the transfer of $50 million 

from the Treasury to the Department of Agriculture to pay salaries 

and expenses in carrying out this subtitle. (Section 195) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(81) Regulations 

The Senate amendment authorizes the Secretary to promulgate rules and regulations to implement this subtitle. (Section 196) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(82) Emergency Requirement 

The Senate amendment designates the entire amount necessary to carry out this subtitle as emergency spending. (Section 

197) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

TITLE II—CONSERVATION

SUBTITLE A—CONSERVATION SECURITY PROGRAM

(1) Conservation Security Act 

The Senate amendment establishes the Conservation Security 

Program (CSP) and provides the applicable definitions. (Section 

201 (Section 1238)) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

modification. The Managers expect the Secretary to implement the 

CSP to encourage the widest participation possible at a level that 

ensures resources are protected at a non-degradation level. (Sec. 

2001) 

(2) Conservation Security Program 

The Senate amendment establishes the CSP for fiscal years 

2003 through 2006 to assist producers in implementing various 

conservation practices as applicable for each individual operation. 

Eligible lands include private cropland, grassland, prairie land, 

pasture land and rangeland and private forest land in agro-forestry 

practices. 

The Senate amendment establishes three tiers of conservation 

contracts that provide flexibility to farmers. Eligible practices may 

include the continuation of some practices combined with the adoption of new practices. Producers must adopt or maintain practices 

to address a resource concern of the operation, such as soil or water 

quality. 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

modification. The CSP, which is open to all producers for maintaining or adopting practices on private agricultural land, will be estabVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00481 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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lished from fiscal years 2003 through 2007. Only private agricultural lands and forested land that is incidental to an agricultural 

operation is eligible for enrollment. Lands enrolled in the Conservation Reserve Program (CRP), the Wetlands Reserve Program 

(WRP), or the Grasslands Reserve Program (GRP) are not eligible 

for enrollment, nor are lands that have not been cropped for more 

than four out of the past six years. This change is to help discourage producers from using the program as an inducement to cultivate land. Because this is a working lands program, producers 

will be allowed economic use of the land, in a manner consistent 

with the program. (Section 2001) 

Agricultural producers are longtime stewards of America’s 

lands. In establishing the CSP, the Managers recognize the need 

to support ongoing stewardship by providing incentive payments 

for producers to maintain and enhance conservation practices at a 

non-degradation level. 

The Managers intend to assist agriculture producers to concentrate on resource problems, including soil, air, water, plant and 

animal (including wildlife) and energy conservation, on their particular operation using a broad array of conservation practices. Participation does not require a producer to address a locally-identified 

priority. Instead, a producer may receive an enhanced payment for 

addressing locally-identified priorities which will be determined by 

the state technical committees working with local working groups 

and agricultural producers. Overall, the Managers intend that the 

enhanced payments be used to ensure and optimize environmental 

benefits. The enhanced payments should reward producers who go 

beyond the minimum requirements of the program to address additional resource concerns. 

The Managers intend that the Secretary shall provide base 

payments based on the average national rental rate for the specific 

land use type. The Managers encourage the Secretary to look at alternative approaches for a base payment that is not based on rental rates. In applying another appropriate rate to ensure regional 

equity, the Secretary shall not provide a rate lower than the national average rental rate. 

The Managers intend the Secretary will not employ an environmental bidding or ranking system in implementing CSP and approve should approve a producer’s contract that meets the standards of the program. The Managers are aware that many agricultural producers who want to adopt conservation practices have not 

had access to conservation program funding. Together, with the 

overall increase in funds for all conservation programs, agriculture 

producers who chose to employ conservation practices should have 

access to funding. 

The Secretary should provide cost-share payments at a rate 

not exceeding 75 per cent. The Secretary should provide cost-share 

assistance at a comparable rate as that provided under the Environmental Quality Incentives Program for the same practices. In 

limiting cost-share for land-based structures, payments should be 

limited to those structures that are integral to the land-based conservation system. 

The Managers expect the Secretary to implement the CSP in 

a manner that will allow all agricultural producers, including fruit 

479

and vegetable producers and livestock producers, to participate equitably in the program. The Managers also direct the Secretary to 

begin CSP at the full national level as soon as practicable. 

While CSP is directed toward practices on working agricultural 

lands, the Managers recognize that some land use practices may 

involve alternative uses of the land, such as providing for wildlife 

habitat or the corners on center-pivot irrigation systems, and expect the Secretary to include these parcels, when incidental to the 

operation, as part of the CSP contract. 

The Managers are aware of the unique conservation and production practices utilized by specialty crop growers throughout the 

United States. The Managers expect the Department to ensure that 

adequate resources are made available for specialty crop conservation practices under CSP. They also expect that, in carrying out the 

financial assistance provisions of various conservation programs 

the unique production practices involved in fruit and vegetable production, are taken into account when drafting and implementing 

regulations to carry out those programs. 

(3) Partnerships and Cooperation 

The Senate amendment allows the Secretary to designate special projects and enter into agreements with nonfederal entities to 

provide enhanced technical and financial assistance to be used by 

owners to meet the purposes of the Clean Water Act, Safe Drinking 

Water Act and Clean Air Act, and other Federal, state or local 

laws, and to address environmental issues associated with watersheds of special significance or other geographic areas of environmental sensitivity such as wetlands. 

It also allows the Secretary to provide incentive payments to 

producers participating in special projects to encourage partnerships and sharing of technical and financial resources among owners, producers, government and non-governmental organizations 

and to adjust the application of eligibility criteria, approved practices, innovative conservation practices and other elements of the 

conservation programs to better reflect unique local circumstances, 

if consistent with environmental enhancement and purposes and 

requirements of the title. Participating parties must submit a plan 

to the Secretary. The purposes of the special projects include the 

installation of systems affecting multiple agricultural operations 

and innovative techniques. This provision directs the Secretary to 

use 5 percent of the funds made available for the EQIP to carry 

out special projects consistent with the purposes of EQIP. (Section 

203) The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

modification. The Secretary may enter into agreements to enhance 

technical and financial assistance provided to owners, operators, 

and producers to address natural resource issues related to agricultural production. The Secretary may provide incentives for special 

projects to encourage partnerships and enrollments of optimal conservation value. (Section 2003) 

The Managers intend for the Secretary to use this authority to 

help producers avoid the need for further federal and state regulation to protect clean water and air. The Secretary is strongly enVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00483 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
480

couraged to be proactive in establishing partnerships in critical 

areas such as the Chesapeake Bay. 

(4) Administrative Requirements for Conservation Programs 

(a) Good-faith reliance 

The Senate amendment requires the Secretary to provide relief 

to owners, operators or producers injured by good faith reliance 

based on an action or on the advice of an employee of the Secretary. 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision due to 

the adoption of a general good faith reliance provision covering 

both the commodity and conservation titles. (Section 2004) 

(b) Education, assessment and evaluation 

The Senate amendment requires the Secretary to provide education, outreach, training, monitoring, evaluation, and technical assistance to agricultural producers. Allows Secretary to enter contracts with nonfederal entities to provide these services. 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. The 

Secretary has been providing education and outreach to agricultural producers, beginning farmers and ranchers and Indian tribes. 

The Managers intend that education, monitoring, and assessment 

of the programs under Subtitle D of the 1985 Food Security Act be 

conducted as a part of the technical assistance for these programs. 

In carrying out these activities, the Managers would also expect 

the Secretary to utilize the experience and expertise of outside entities such as, states (including state agencies and local units of government), educational institutions, and non-profit groups with a 

demonstrated history of working with agricultural producers. The 

Managers expect $10 million per year from technical assistance 

funds for the conservation programs to be used for these purposes. 

(c) Beginning and limited-resource farmers 

The Senate amendment allows the Secretary to provide beginning farmers and ranchers and Indian tribes and limited-resource 

producer incentives to participate in conservation programs. 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision for beginning farmers and ranchers. (Section 2004) 

(d) Maintenance of conservation data 

The Senate amendment requires the Secretary to maintain 

data concerning conservation plans and programs.

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2004) 

(e) Mediation 

The Senate amendment requires the Secretary to provide aggrieved producers mediation services or an informal hearing on the 

matter. 

481

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2004) 

(f) Privacy 

The Senate amendment directs the Secretary to ensure the privacy of individual information provided to USDA to secure technical or financial assistance for conservation programs. Information 

may be released to the Attorney General to enforce programs. (Section 204) 

The House bill amended the Freedom of Information Act to 

provide similar protections for producer-provided information. 

The Conference substitute adopts the Senate provision with 

modification. 

(g) Cooperation with tribal governments 

The Senate amendment directs the Secretary to cooperate with 

the tribal government of Indian tribes when administering lands 

under the jurisdiction of an Indian tribe. 

The House bill contains no comparable provision. 

The Conference substitute deletes this provision due to the 

adoption of similar provisions in the Miscellaneous Title. (Section 

2004) 

(5) Reform and Assessment of Conservation Programs 

The Senate amendment directs the Secretary to develop a plan 

for coordinating conservation plans and programs to facilitate implementation and delivery of conservation programs and provide a 

report to Congress within 180 days after enactment of this Act. 

(Section 205) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

modification. (Section 2005) 

(6) Conservation Security Program Regulations 

The Senate amendment states that the Secretary may promulgate regulations for implementation of the CSP upon enactment of 

this Act. (Section 206) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 2702) 

(7) Conforming Amendments 

The House bill reauthorizes the Environmental Conservation 

Acreage Reserve Program (ECARP) through 2011 and removes provisions establishing conservation priority areas. (Section 201) 

The Senate amendment renames the ECARP the Comprehensive Conservation Enhancement Program (CCEP), reauthorizes the 

CCEP programs through 2006, and directs the Secretary to give 

priority to areas in which designated land would facilitate the most 

rapid completion of projects that are ongoing as of the date of the 

application. (Sections 207 and 211) 

The Conference substitute adopts the Senate provision, with a 

modification that removes priority areas from CCEP as well as the 

482

reference to priority being given to the most rapid completion of 

projects. Also, the substitute extends the program to 2007. (Section 

2006) 

The Managers find that bobwhite quail are a valued traditional symbol of farmed landscapes, but their populations have declined by two-thirds since 1980. The Managers further find that the 

success of the Southeast Quail Study Group’s new ‘‘Northern Bobwhite Conservation Initiative’’ is largely dependent upon land management actions by agricultural producers and non-industrial private forestland owners. The Managers further find that many conservation programs of this farm bill have large potential to contribute to bobwhite quail habitat objectives and encourage the Secretary to support the goal of restoring habitat for this species. 

The Managers intend that the CRP, the CREP, the Wildlife 

Habitat Incentives Program (WHIP), the EQIP, the WRP, the GRP, 

the CSP and other USDA programs could be helpful in 

supplementing the Comprehensive Everglades Restoration Program. The Secretary is encouraged to work with appropriate state 

and federal officials to develop and implement a coordinated plan 

toward this end. 

SUBTITLE B—CONSERVATION RESERVE PROGRAM

(1) Reauthorization 

The House bill reauthorizes the CRP through 2011 and adds 

conservation and improvement of wildlife resources to the scope of 

the program’s purpose. (Section 211) 

The Senate amendment reauthorizes the CRP through 2006. 

(Section 212(a)) 

The Conference substitute adopts the House provision with a 

modification that extends the program to 2007. (Section 2101) 

(2) Enrollment 

The House bill modifies language on land eligibility to add: (1) 

marginal pasturelands devoted to natural vegetation in or near riparian areas or for similar water quality purposes, (2) land that the 

Secretary determines will contribute to the degradation of soil, 

water or air quality or poses an environmental threat if permitted 

to remain in production, (3) land where soil, water and air quality 

objectives cannot be achieved under the Environmental Quality Incentives Program (EQIP), and (4) land where enrollment would 

contribute to the conservation of ground or surface water. (Section 

212(a)) 

The Senate amendment modifies language on vegetative cover, 

providing that in the case of marginal pastureland, an owner or operator shall not be required to plant trees if the land is to be restored as a wetland or with appropriate native riparian vegetation. 

(Sec. 212 (g)) 

The Conference substitute adopts the House provision with a 

technical change. Marginal pastureland should be devoted to appropriate vegetation, including trees, in or near riparian areas or 

for similar water quality purposes, including marginal pastureland 

converted to wetlands or established as wildlife habitat. (Section 

2101) 

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The Conference substitute adopts the House provision on land 

which would contribute to degradation of soil, water or air quality 

if permitted to remain in production. The substitute also adopts the 

provision on land where enrollment would contribute to the conservation of ground or surface water, with modification that land 

may only be enrolled where the measure would provide a net savings in ground or surface water resources on the agricultural operation of the producer. This is a new factor, under CRP, that should 

not be given a significant increase in points under the Environmental Benefits Index. (Section 2101) 

(3) Eligibility and Cropping History 

The House amendment modifies the language on eligibility to 

limit enrollment of land that has not been in production for at least 

four years. 

The Senate amendment modifies language on eligibility of 

highly-erodible cropland that cannot be farmed in accordance with 

a conservation plan, and requires that the land have a cropping 

history or be considered to have been planted for three of the six 

years preceding the enactment of this legislation, and modifies language on land eligibility to add: (1) the portion of land in a field 

in cases where more than 50 percent of the land in the field is enrolled as a buffer, and (2) land (including land with no cropping 

history) enrolled through the continuous sign-up program or Conservation Reserve Enhancement Program (CREP). (Section 212(b)) 

The Conference substitute adopts the Senate provision, with 

modification requiring that land have a cropping history or be considered to have been planted for four of the six years preceding the 

enactment of this legislation to be eligible. The Managers are concerned about reports that producers are planting crops on noncropped lands as a means of being eligible to participate in CRP. 

This language is intended to prevent the enrollment of these lands 

under CRP. (Section 2101) 

The Conference substitute deletes the Senate provision on 

land, other than cropland, being enrolled in the continuous sign-up 

program. However, the Managers understand the Secretary is currently reviewing the land eligibility criteria, including the eligibility of non-cropland that could be restored to serve as buffers. 

The Managers expect the Secretary to do this examination expeditiously. (Section 212(b)) (Section 2101) 

The Conference substitute adopts the Senate provision with 

modification on the eligibility of partial fields. The provision allows 

producers to enroll entire fields through the continuous CRP as 

buffers in cases in which more than 50 percent of the field is eligible for enrollment and the remainder of the field is infeasible to 

farm. The modification restricts payments on the remaining acreage to general sign-up rates. (Section 212(b)(1)(B)) (Section 2101) 

The Managers intend the USDA to allow prescribed burning 

and other measures that are intended to enhance forage for the 

benefit of pheasants and other wildlife species on land enrolled in 

the CRP. 

In carrying out the CRP, the Managers direct the Secretary to 

evaluate qualifications and criteria relating to spring wind erosion 

484

of sandy soils not currently recognized by the Wind Erosion Equation. 

The Managers expect the Secretary to develop ways to make 

land prone to frequent seasonal flooding, such as 3 out of the last 

5 years, eligible for enrollment in the CRP, including, but not limited to, designating the area as a conservation priority area. 

(4) Acreage Limitations 

The House bill increases the acreage cap to 39.2 million acres. 

(Section 212(b)) 

The Senate amendment increases the acreage cap to 41.1 million acres. (Section 212 (c)) 

The Conference substitute adopts the House provision on raising the acreage cap to 39.2 million acres. (Section 2101) 

(5) Priority Areas 

The House bill deletes priority areas and requires that on the 

expiration of a CRP contract the land shall be eligible to be considered for re-enrollment in the program. (Section 212) 

The Senate amendment modifies language regarding priority 

areas to direct the Secretary to give priority to areas in which designated land would facilitate the most rapid completion of projects 

that are ongoing and that meet the purposes of the program. 

The Conference substitute adopts the Senate provision that retains priority areas. The Managers recognize that conservation 

benefits may increase from cumulative enrollment and encourages 

the Secretary to consider these cumulative benefits by enrolling 

lands in areas where land is currently enrolled. (Section 2101) 

The Managers expect the Secretary to revisit the issue of how 

the CRP national priority area for the Prairie Pothole Region was 

determined and direct the Secretary to utilize the Prairie Pothole 

Joint Venture Implementation Plan map as the area to be considered the national CRP priority area for the Prairie Pothole Region. 

The Conference substitute adopts the House provision on requiring land to be considered for re-enrollment in CRP. It is the intent of the Managers not to provide an automatic re-enrollment of 

these lands, but instead require that these lands go through the 

normal application process. (Section 2101) 

(6) Balance of Natural Resources 

The House bill requires the Secretary to do a rule making that 

balances CRP contracts between soil erosion, water quality and 

wildlife habitat. (Section 212) 

The Senate amendment has no comparable provision 

The Conference substitute adopts the House provision to conduct a rulemaking to achieve a balance between natural resource 

purposes. (Section 2101) 

The Managers are concerned that a general sign-up has not 

taken place for several years. The Managers expect the Secretary 

to hold a general sign-up as soon as practicable. 

(7) Hardwood Trees 

The Senate amendment permits the Secretary to extend the 

duration of CRP contracts for an additional 15 years in the case of 

485

land devoted to hardwood trees. The Secretary may provide rental 

payments in an amount not exceeding 50 percent of the applicable 

rental payment before the contract was extended. For new CRP 

contracts with hardwood trees, the Secretary may allow 30-year 

contracts at reduced rates. The bill provides a one-year extension 

on 15-year contracts required to be terminated by statute. (Section 

212 (d)) 

The House bill contains no comparable provision. 

The Conference substitute strikes the Senate provision regarding longer-term contracts for hardwood trees, but the substitute 

adopts the Senate provision regarding one-year extensions. (Section 

2101)

It has come to the attention of the Managers that CRP offers 

that include the planting of longleaf pines may not be receiving a 

weight equal to those assigned to other softwoods planted on CRP 

contract acres. The Managers encourage the Secretary to take such 

measures as may be necessary to ensure that a portion of land accepted for CRP contracts devoted to pine trees include longleaf 

pines. 

(8) Irrigated Land Rates 

The Senate amendment makes irrigated land eligible for enrollment at irrigated land rates unless the Secretary determines 

that other compensation is appropriate. (Section 212(f)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2101) 

(9) Signing and Practice Incentive Payments 

The Senate amendment directs the Secretary to provide signing and practice incentive payments for landowners who implement 

a practice under the conservation buffer or CREP programs at the 

highest rate currently provided. (Section 212(i)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2101) 

The Managers are concerned that the payments for practices 

may not reflect the conservation benefits of the practices. Grass 

wind strips, shelterbelts, living snow fences and wellhead protection are particular activities that should receive serious consideration for signing and practice incentive payments. The Managers 

strongly encourage the Secretary to re-examine the procedures 

used to determine the incentive payment. The Managers intend 

that the Secretary should continue current signing and practice incentive payments throughout the duration of this legislation. 

(10) Payment Limits for Conservation Buffers and CREP 

The Senate amendment creates an exception to the CRP payment limit for payments received for conservation buffers and the 

CREP. (Section 212(j)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2101) 

486

(11) County Acreage Limitation 

The Senate amendment exempts land enrolled under continuous sign-up from the limitation on the percentage of land in a 

county eligible for enrollment. (Section 212(k)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2101) 

(12) Report on Economic and Social Impacts 

The Senate amendment requires the Secretary to submit a report to the House and Senate Agriculture Committees about the 

economic and social impacts on rural communities resulting from 

the CRP within 270 days from the date of enactment of this legislation. (Section 212(l)). 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

modifications that require the Secretary to submit the report within 18 months and require the Secretary to consider the economic 

value from recreational opportunities (including hunting and fishing). (Section 2101) 

(13) Duties of Owners and Operators 

The House bill permits landowners to maintain existing cover 

where practicable. In addition, it authorizes the Secretary to permit managed haying and grazing, wind turbines and biomass recovery as long as these activities are consistent with the conservation of soil, water quality and wildlife habitat. Finally, the House 

bill deletes the environmental use and alley-cropping provisions. 

(Section 213) 

The Senate amendment permits owners of marginal pasture 

land not to plant trees if native prairie grass may be retained or 

restored or if land is restored as a wetland; directs the Secretary 

to permit harvesting or grazing for maintenance purposes, without 

a reduction in rental payment, on acres that are enrolled to establish conservation buffers and acres enrolled into the CREP in a 

manner that is consistent with the purposes of the CRP; allows the 

Secretary to permit an owner of CRP land, other than that enrolled 

under continuous sign-up, to install wind turbines on the land at 

a reduced rate; and modifies language regarding duties of participating landowners to say that an owner also agrees not to produce 

a crop for the duration of the CRP contract on any other highly 

erodible land without a cropping history that the owner owns or operates with exemptions of land used as a homestead or building 

site. (Section 212 (g), (h)) 

The Conference substitute adopts the House provision to permit landowners to continue with existing cover where practicable 

and consistent with wildlife reserve benefits of CRP. (Section 2101) 

The Conference substitute adopts the House provision on managed haying (including for biomass) and grazing and wind turbines, 

with modification. USDA will permit, consistent with the conservation of soil, water quality and wildlife habitat, managed harvesting 

and grazing on the land at a reduced rate. Harvesting and grazing 

or other commercial use of the forage is permitted in response to 

a drought or other emergency. In addition, the Secretary shall enVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00490 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
487

sure that all precautions are taken to protect against overgrazing 

or haying or use of land during a period that may adversely impact 

wildlife habitat or wildlife directly, especially ensuring that activities take place after nesting season is completed. USDA, with the 

State technical committees, will develop appropriate vegetation 

management requirements including appropriate harvesting and 

grazing periods. In determining the appropriate use of CRP lands 

for haying and grazing (including the frequency and time period), 

the Secretary shall require the State Technical Committees to consider the type of grass (shrubs, forbs or bushes) on the land as well 

as the local ecosystem. (Section 2101) 

The Secretary shall permit wind turbines on CRP land, whether commercial in nature or not, in a manner that does not interfere 

with wildlife. In so doing, the Secretary may restrict the number 

and location of wind turbines that may be installed on a tract of 

land. The Secretary shall take special care when allowing wind turbines on small parcels of land, especially buffers, so that turbines 

are spaced in a manner that does not interfere with wildlife habitat, flyways or movement. (House Section 213(1)(C)) (Section 212 

(h)(f))

The Conference substitute deletes the Senate provision requiring an owner to agree not to produce a crop for the duration of the 

CRP contract on any other highly erodible land without a cropping 

history that the owner owns or operates. (Section 2101) 

The Conference substitute adopts the House provision to delete 

the environmental use and alley-cropping provisions. 

(14) Reference to Conservation Reserve Payments 

The House bill replaces the term rental payment with conservation reserve payment. (Section 214) 

The Senate amendment has no comparable provision. 

The Conference substitute deletes the House provision. (Section 2101) 

(15) Expansion of Pilot Program to All States 

The House bill reauthorizes the project through 2011, directs 

the Secretary to carry out a project in each state and limits enrollment to not more than 150,000 acres in any state. 

The Senate amendment reauthorizes the pilot program 

through 2006 in Minnesota, Montana, Nebraska, Iowa, North Dakota and South Dakota. Expands the maximum size of any wetland 

enrolled to 10 contiguous acres with not more than 5 acres being 

eligible for payment. (Section 212(e)) 

The Conference substitute adopts the House provision with 

modification. The Secretary shall carry out a nationwide program, 

limiting enrollment to 100,000 acres in any state and a million 

acres nationwide. After three years the Secretary may reallocate 

another 50,000 acres to interested states, based on their original allocation. The provision also expands the maximum size of any wetland enrolled to 10 contiguous acres with not more than 5 acres 

being eligible for payment. This change was made to facilitate enrollment of lands that meet the eligibility of the program and will 

achieve the goals of this program. The Secretary shall ensure that 

changes to regulations to the program do not have a significant imVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00491 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
488

pact on the original 6 states involved in the pilot program. (Section 

2101) 

In expanding the CRP Wetland Pilot nationwide, the Managers 

recognize that the playa lakes found throughout the Southern 

Great Plains states of Kansas, Oklahoma, Colorado, New Mexico 

and Texas, are also worthy of protection as they function as recharge points for the Ogalalla Aquifer, help in containing flood waters and provide habitat for hundreds of bird species. Playa lakes 

are the most significant topographical and hydrological attribute in 

the Southern Great Plains. Playa lakes are often dry enough to be 

farmed due to the annual precipitation rates and high evaporation 

rates that occur in the high plains. 

(16) Water Conservation 

The Senate amendment requires the Secretary to provide up to 

500,000 acres for CREP for water conservation measures in California, Maine, Nevada, New Hampshire, New Mexico, Oregon, and 

Washington. (Section 215) 

The House bill contains no comparable provision. 

The Conference substitute strikes the Senate provision. (Section 2101) 

The Managers encourage the Secretary to allow states to have 

flexibility in creating CREP programs. 

SUBTITLE C—WETLANDS RESERVE PROGRAM

(1) Enrollment 

The House bill allows the Secretary to enroll an additional 

150,000 acres per year. Any acres not enrolled may be carried over 

to subsequent years. (Section 221) 

The Senate amendment clarifies that technical assistance is 

provided under the WRP and allows the Secretary to raise the 

acreage cap to 2.225 million acres. Of this acreage, the Secretary 

may enroll not more than 25,000 acres per year in the Wetlands 

Reserve Enhancement Program (WREP). (Section 214 (a) and (b)) 

The Conference substitute adopts the Senate provision with 

modification to increase the acreage cap up to 2.275 million acres. 

Also, the substitute requires the Secretary to enroll 250,000 acres 

per year to the maximum extent practicable. (Section 2202) 

(2) Easements and Cost-Share Allocations 

The House bill strikes language requiring the Secretary to enroll acres with numeric allocations to particular methods. Directs 

the Secretary to enroll acres through easements, restoration cost 

share agreements or both. (Section 221) 

The Senate amendment has no comparable provision. 

The Conference substitute strikes the House provision. It modifies current law to clarify that land can be enrolled with 30-year 

or permanent easements, restoration cost share agreements or 

both. The Conference substitute also continues to require the Secretary to enroll lands in proportion to landowner interest. (Section 

1237(b)(2)(B)). (Section 2203) 

489

(3) Reauthorization 

The House bill extends the WRP through 2011. (Section 221) 

The Senate amendment extends the WRP through 2006. (Section 214(c)) 

The Conference substitute extends the WRP through 2007. 

(Section 2201) 

(4) Wetlands Reserve Enhancement Program 

The Senate amendment creates a WREP under which the Secretary may enter into cooperative with state or local governments, 

and with private organizations, to conduct wetland restoration activities that address critical environmental issues. (Section 214(d)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2202) 

(5) Technical Assistance, Monitoring and Maintenance 

The Senate amendment clarifies that technical assistance includes monitoring and maintenance of the terms and conditions of 

the easement and the plan. (Section 214(e)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. (Section 2203) 

(6) Easements and Agreements 

The House bill consolidates the language defining prohibited 

activities to prohibit the alteration of wildlife habitat and other 

natural features of such land, unless specifically permitted by the 

plan. Consolidates the language describing the length of a WRP 

easement to say that easements shall be consistent with applicable 

state law, and strikes redundant language stating that the Secretary can enroll land into the WRP using restoration cost-share 

agreements. (Section 222) 

The Senate amendment has no comparable provision. 

The Conference substitute deletes the House provisions on prohibited activities and length of easements. In addition, it strikes 

the redundant provision in current law regarding restoration costshare agreements. (Section 2203) 

(7) Duties of the Secretary 

The House bill deletes a provision that requires the Secretary 

to give priority to obtaining permanent conservation easements and 

easements designed to protect and enhance habitat for migratory 

birds and other wildlife. (Section 223) 

The Senate amendment has no comparable provision. 

The Conference substitute deletes the House provision. (Section 2203) 

(8) Changes in Ownership: Agreement Modification; Termination 

The House bill amends the language regarding changes in 

ownership to provide that no easement can be created on land that 

has changed ownership in the past 12 months unless: (1) the new 

ownership was acquired by will or succession as a result of the 

death of the previous owner, (2) the ownership change occurred due 

490

to foreclosure on the land and the owner of the land exercises a 

right of redemption from the mortgage holder in accordance with 

state law, or (3) the Secretary determines that the land was acquired under circumstances which give adequate assurances that 

such land was not acquired for the purposes of placing it in the 

WRP. (Section 223) 

The Senate amendment has no comparable provision. 

The Conference substitute adopts the House provision with a 

modification to replace the section on changes in ownership due to 

a foreclosure with new language. (Section 1237E(a)(2)) (Section 

2204) 

SUBTITLE D—ENVIRONMENTAL QUALITY INCENTIVES PROGRAM

(1) Purposes 

The House bill strikes language describing the purpose of the 

EQIP as combining four previous conservation programs into a single program; strikes language regarding carrying out a program to 

maximize the environmental benefits per dollar expended; and 

rewords language about assisting farmers and ranchers who face 

the most serious environmental threats to providing assistance to 

farmers and ranchers to address environmental needs; adds air to 

the list of resources to be addressed; and replaces the terms farmers and ranchers with producers. (Section 231) 

The Senate amendment rewrites the purposes of the EQIP to 

promote agricultural production and environmental quality as compatible national goals and to: (1) assist producers in complying with 

federal, state and local environmental laws, (2) avoid the need for 

regulatory programs, (3) provide assistance to producers for installing and maintaining conservation systems, (4) assist producers in 

making certain conservation changes, (5) facilitate partnerships between producers, government and nongovernmental organizations, 

and (6) consolidating and streamlining conservation planning; retains language regarding a program goal to maximize the environmental benefits per dollar expended; and includes air in the purposes of the EQIP. (Section 213(a)) 

The Conference substitute adopts the Senate provision on the 

purposes of the program with a modification to subsection (1) stating that the purposes of EQIP are to promote agricultural production and environmental quality as compatible goals and to optimize 

environmental benefits by assisting producers in complying with 

local, state and national regulatory requirements concerning soil, 

water, and air quality, wildlife habitat, and surface and ground 

water conservation. (Section 1240) (Section 2301) 

The Conference substitute adopts the Senate provision with a 

modification changing the phrase conservation systems to conservation practices. (Section 1240(3)) (Section 2301) 

The Managers expect the Secretary to continue carrying out 

EQIP with the goal of optimizing environmental benefits. (Section 

213(a)) 

(2) Definitions 

The House bill adds the term non-industrial private forestland 

to the definition of eligible land. Further, the House bill changes 

491

the definition of eligible land by striking reference to land that 

poses a serious threat and inserting that provides increased environmental benefits to air, soil, water or related resources, and adds 

the term non-industrial private forestland to the definition of producer. (Section 2302) 

The Senate amendment defines the term eligible land to include private non-industrial private forestland, defines producer 

with the same meaning given to the term in the Agricultural Market Transition Act. 

The definition section includes definitions for: beginning farmer and rancher, comprehensive nutrient management, eligible land, 

innovative technology, land management practice, livestock, maximize environmental benefits per dollar expended, practice, producer and structural practice. (Section 213(a)) 

The Conference substitute adopts the Senate definition of beginning farmer, land management practice, livestock, structural 

practice, and practice. (Section 2301) 

The Conference substitute adopts the Senate definition of eligible land with an amendment that adds air to the list of protected 

resources but excludes specific threatening conditions. (Section 

2301) 

The Conference substitute deletes the Senate provisions defining innovative technology and comprehensive nutrient management 

plan. (Section 2301) 

The Conference substitute deletes the Senate provisions defining managed grazing, innovative technology, producer, and program. The substitute also deletes the Senate provision defining the 

term ‘‘maximize environmental benefits per dollar expended,’’ thus 

striking the provision throughout the program. (Section 1240(A)(8)) 

(Section 2301) 

(3) Establishment and Administration 

The House bill re-authorizes the EQIP through 2011; amends 

the permissible term of EQIP contracts to allow for agreements 

ranging from one to ten years; amends language governing the selection process for structural practice applications. Strikes references to priorities established in the EQIP and factors to maximize the environmental benefits per dollar expended replaces with 

language directing the Secretary to base the selection process on 

achieving the purposes established under this subtitle; removes 

prohibition on large confined livestock operations getting cost-share 

assistance to build waste management facilities; and replaces the 

language regarding incentive payments with new language directing the Secretary to make incentive payments to encourage producers to perform multiple land management practices and to promote the enhancement of soil, water, wildlife habitat, air and related resources. Permits the Secretary to give great weight to practices that include residue, nutrient, pest, invasive species and air 

quality management. (Section 233) 

The Senate amendment reauthorizes the EQIP through 2006; 

directs the Secretary to provide conservation education; amends the 

permissible term of EQIP contracts to allow for agreements ranging 

from three to ten years; prohibits a producer from entering into 

more than one contract for structural practices relating to livestock 

492

nutrient management from fiscal years 2002 through 2006; directs 

the Secretary to develop an application and evaluation process for 

awarding assistance that maximizes the environmental benefits per 

dollar expended; prohibits the Secretary from assigning a higher 

priority to an application based solely on the reason that it presents the least cost to the program; cost-share payments shall not 

exceed 75 percent of the cost of the practice; cost-share payments 

to limited resource and beginning farmers shall not exceed 90%; removes prohibition on large confined livestock operations getting 

cost-share assistance to build waste management facilities; directs 

the Secretary to make incentive payments in an amount and rate 

determined to be necessary to encourage a producer to perform 1 

or more practices; directs the Secretary to give incentive payments 

to producers to be used to obtain technical assistance associated 

with the development of any component of a comprehensive nutrient management plan from certified providers. (Section 213(a)) 

(Section 2301) 

The Conference substitute adopts the Senate provision with 

modification providing incentive payments for producers who develop a comprehensive nutrient management plan. (Section 

1240B(a)(2)) (Section 2301) 

The Conference substitute deletes the Senate provision on education. (Section 1240B(a)(3)) (Section 2301) 

The Conference substitute adopts the Senate provision with 

modification on the application and term of contracts. At a minimum, the contract should have a term of one year beyond the date 

of completion of the project. (Section 1240B(b)) (Section 2301) 

The Conference substitute adopts the Senate provision on incentive payments with modification, by including a special rule for 

priority under incentive payments. (House Section 233(e)) (Section 

2301) 

The Conference substitute adopts the House provision by striking the provision on the application and evaluation process for 

awarding assistance that maximizes the environmental benefits per 

dollar expended. (House Section 233(c), Senate 213(a) (1240B(c))) 

(Section 2301) 

The Conference substitute adopts the Senate provision to remove the bidding down procedure that assigns a higher priority to 

an application because it costs less. (Section 1240B(c)(4)) (Section 

2301) 

The Conference substitute adopts the Senate provision on increased cost-share payments for beginning and limited resource 

farmers. (Section 1240B(d)) (Section 2301) 

The Conference substitute adopts the House provision on technical assistance in EQIP. All technical assistance will be addressed 

in Subtitle E in the Administration and Technical Assistance section. (Section 1240B(f)) (Section 2301) 

(4) Evaluation of Offers and Payments 

The House bill strikes existing language. Replaces with language directing the Secretary to give a higher priority to EQIP offers that: (1) aid producers in complying with federal and state environmental laws, (2) promote the use of animal manure or other 

493

similar soil amendments, and (3) encourage the utilization of sustainable grazing systems. (Section 234) 

The Senate amendment directs the Secretary to give priority 

to applications that: (1) maximize the environmental benefits per 

dollar expended, (2) national conservation priority areas, (3) are 

provided in conservation priority areas, (4) are provided in special 

projects, or (5) include an innovative technology in connection with 

a structural practice or land management practice. (Section 213(a)) 

(Section 2301) 

The Conference substitute adopts the Senate provision with 

modification on giving higher priority to applications that use costeffective conservation practices and address national conservation 

priorities. (Section 1240C(a)(2)) (Section 2301) 

The Conference substitute deletes the Senate provision on special projects and innovative technology. (Section 2301) 

Inhibitor Technology.—To make efficient use of urea and ammonium fertilizers, reduce nitrate run-off and leaching, and the 

emission of ammonia and greenhouse gases, the incorporation of 

urease inhibitors and nitrification inhibitors into urea and ammonium containing fertilizers should be recommended as a best management practice. 

Nutrient Management.—Since enactment of the Food, Agriculture, Conservation and Trade Act of 1990, Congress has been 

concerned about the impact federal, state and local environmental 

laws eventually would have on U.S. agricultural producers and 

their ability to maintain viable farming and ranching operations. 

In the past few years, those laws, regulations and court orders 

have been focused on agriculture. Those provisions reflect a disconnect between regulators and agricultural producers as well as 

rural communities. In this posture, U.S. farmers and ranchers feel 

as though they are pressed against an inflexible wall of legal and 

environmental requirements. These requirements are issued from 

Washington in a top-down management style that attempts to fit 

all areas of the country into a national program. Congress has responded with financial and technical assistance implemented 

through the USDA. 

In 1996, Congress created the EQIP to help farmers and ranchers meet environmental laws. The Managers believe EQIP is a valuable tool to help producers avoid the need for future regulation, 

and the Secretary shall manage the program to maximize this purpose. As legislation was developed to improve EQIP and provide 

additional resources to it, Congress was specifically concerned 

about how the U.S. livestock industry would meet new Clean 

Water Act requirements on animal feeding operations. In that regard, the Managers agree that nutrient management, especially 

animal waste management, is both a problem to address and a resource to be used. To that extent, the Managers encourage the Secretary to evaluate EQIP contract offers on their use of animal manures and other similar soil amendments that improve soil health, 

tilth, and water-holding capacity. 

Managed Grazing.—The Managers further encourage the use 

of grazing systems, such as year-round, rotational or managed 

grazing systems, that enhance productive livestock operations. 

494

(5) Duties of Producers 

The Senate amendment requires producers to implement a 

conservation plan; not conduct any practices that defeat the purposes of the program; take actions upon termination of a contract 

and supply information to determine compliance, and submit a list 

of all confined livestock feeding operations wholly or partiallyowned or operated by the applicant. (Section 213(a)) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

modification removing the requirement to submit a list of all confined livestock feeding operations wholly or partially-owned or operated by the applicant. (Section 2301) 

(6) Environmental Quality Incentives Program Plan 

The House bill strikes language regarding practices and principles that the Secretary deems necessary. Replaces with language 

requiring the producer to submit a plan that provides or will continue to provide increased environmental benefits to air, soil, water 

or related resources. (Section 235) 

The Senate amendment requires a producer to submit an EQIP 

plan that describes conservation and environmental purposes to be 

achieved through 1 or more practices that are approved by the Secretary. Confined livestock feeding operations with an animal waste 

system must develop and implement comprehensive nutrient management plans if applicable. (Section 1240E(a)) 

The Senate amendment requires the Secretary to eliminate duplication, to the maximum extent practicable, of planning activities 

under EQIP and other conservation programs. (Section 1240E(b)) 

The Conference substitute adopts the Senate provision with 

modification. All livestock producers that receive funding for animal waste manure systems must have a comprehensive nutrient 

management plan. The Managers believe that there will be few 

cases in which a comprehensive nutrient management plan will not 

be required. The Managers recognize the importance of comprehensive nutrient management plans for the proper use and storage of 

animal waste and for that reason require these plans. (Section 

2301) 

The Conference substitute also adopts the Senate provision on 

eliminating duplication. (Section 1240E(a), (b)) (Section 2301) 

(7) Duties of the Secretary 

The House bill requires the Secretary to provide technical assistance and cost-share payments for developing structural practices or land management practices. (Section 236) 

The Senate amendment requires the Secretary to provide costshare assistance and incentive payments for developing and implementing one or more practices. (Section 213(a) (1240F) 

The Conference substitute adopts the Senate provision. (Section 2301) 

The Managers are aware of the unique conservation and production practices utilized by specialty crop growers throughout the 

United States. The Managers expect the USDA to ensure that adequate resources are made available for specialty crop conservation 

practices under the EQIP. The Managers also expect that, in carVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00498 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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rying out the financial assistance provisions of the various conservation programs, the unique production practices involved in 

fruit and vegetable production are taken into account when drafting and implementing regulations to carry out those programs. In 

particular, the Managers would direct the Secretary when enrolling 

a producer who is already undertaking activities related to integrated pest management, make those ongoing activities eligible for 

financial assistance after the date of enrollment. 

(8) Limitation on Payments 

The House bill raises the payment limits to $50,000 in any fis- cal year and $200,000 for any multi-fiscal year contract, strikes reference to the phrase ‘‘maximization of environmental benefits per 

dollar expended’’ in discussion of exceptions to the annual limit, 

and strikes prohibition on payment in the same fiscal year in 

which the contract is entered into. (Section 237) 

The Senate amendment raises the payment limitations to $30,000 in any fiscal year and $150,000 for any multi-year contract 

of four or more years and permits payment during the first year 

of the contract. The Secretary may waive the annual limit. (Section 

213(a)) 

The Conference substitute adopts the House provision with 

modification. A producer may receive, directly or indirectly, up to 

$450,000 in any combination of contracts over the life of the farm 

bill. The Managers recognize that the Secretary may need to adjust 

cost-share percentages provided under a contract to maximize participation and optimize environmental benefits. (Section 2301) 

(9) Ground and Surface Water Conservation 

The House bill replaces the entire section with a new program 

within the EQIP providing cost-share, low-interest loans and incentive payments to encourage ground and surface water conservation, 

and funds at $30 million in fiscal year 2002, $45 million in fiscal 

year 2003 and $60 million for fiscal years 2004 through 2011. (Section 238) 

The Senate amendment has no comparable provision. 

The Conference substitute adopts the House provision with 

modification. Water conservation activities that are eligible for incentive payments and cost-share include the lining of ditches and 

installation of piping, tail water return systems, low-energy precision irrigation systems, low-flow irrigation systems, off-stream and 

groundwater storage, and conversion from gravity or flood irrigation to higher efficiency systems. In addition, the Secretary may 

provide cost-share and incentive payments under this section only 

if the assistance will facilitate a conservation measure that results 

in a net savings in ground or surface water resources on the agricultural operations of the producers. (Section 2301)

Of the $600 million in funding made available for this program, the Secretary should make available $50 million per year to 

assist producers in the Klamath Basin. 

In providing funding for water conservation incentives, the 

Managers recognize that the High Plains Aquifer underlying the 

states of Texas, New Mexico, Oklahoma, Kansas, Colorado, South 

Dakota, Wyoming, and Nebraska is a critical source of groundwater 

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for agricultural and municipal uses. The Managers encourage the 

Secretary to give producers in the High Plains Aquifer the highest 

priority for funding under this program. The communities on the 

High Plains depend on the Aquifer as their major water supply. 

Due to the scope and significance of this geological feature, there 

is a need for regional efforts to address groundwater management 

in the High Plains Aquifer. The Managers urge the Secretary to 

work with state water or conservation agencies and agricultural 

producers in the High Plains region to coordinate federal assistance 

with state programs and to encourage cooperation between states 

in implementing conservation incentives and water reduction practices. 

(10) Desert Terminal Lakes 

The Conference substitute directs the Secretary to transfer $200 million to the Bureau of Reclamation to be used to provide 

water to at-risk natural desert terminal lakes. These funds cannot 

be used for the purchase or lease of water rights. (Section 2507) 

(11) Conservation Grants 

The Senate amendment allows the Secretary to use up to $100 

million in each of fiscal years 2003 through 2006 for competitive 

grants that are intended to stimulate innovative approaches to 

leveraging federal investment in environmental enhancement and 

protection through the use of the EQIP. Funds not obligated by 

April 1st of the fiscal year shall be used to carry out other activities under EQIP. (Section 213(a)) (Section 1240H) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision by authorizing the Secretary to provide innovation grants. The Managers 

encourage the Secretary to allow funding for these grants, including for practices that foster markets for nutrient trading and for 

the continued implementation and acceleration of programs for 

demonstrating innovative nutrient management technology systems for animal feeding operations. (Section 2301) 

This section has been included as a discretionary use of EQIP 

funds to foster the adoption of innovative, cost effective approaches 

to addressing a broad base of conservation needs. 

This Managers intend that these grants be used to provide for 

the use of incentives to farmers—as opposed to regulations—to address some of the nation’s most difficult conservation needs. By establishing market-based incentives, an efficient mechanism is created to improve water quality and create environmentally beneficial income alternatives for farmers. 

By leveraging Federal funds through competitive grants, the 

Managers expect other sectors of the economy, such as States, and 

the conservation and philanthropic communities will be engaged in 

helping find and deliver the best solutions to environmental needs. 

(12) Southern High Plains Aquifer Groundwater Conservation 

The Senate amendment creates a southern High Plains Aquifer groundwater conservation program. Directs the Secretary to 

provide cost-share payments, incentive payments and groundwater 

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ern High Plains Aquifer. Funds at $15 million for fiscal year 2003, 

$25 million for fiscal years 2004 and 2005, $35 million for fiscal 

year 2006 and $0 for fiscal year 2007. Funds not expended by April 

1st of each fiscal year shall be made available for other states 

under EQIP. (Section 213(a)) (Section 1240I) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision, but 

recognizes the importance of providing producers access to funds to 

aid their efforts in water conservation. (Section 2301) 

(13) Pilot Programs 

The Senate amendment creates a drinking water suppliers 

pilot program in selected watersheds to allow the Secretary to work 

cooperatively with local water utilities to improve water quality. 

The Secretary shall also carry out a nutrient reduction pilot program in the Chesapeake Bay watershed for fiscal years 2003 

through 2006 to reduce nutrient loads in the Chesapeake Bay. 

Funds at $10 million for fiscal year 2003, $15 million for fiscal year 

2004, $20 million for fiscal year 2005, $25 million for fiscal year 

2006 and $0 for fiscal year 2007. Funds not obligated by April 1st 

shall be made available under EQIP. (Section 213(a)) (Section 

1240J(a), (b)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision on the 

drinking water suppliers pilot program. In so doing, the Managers 

believe that coordination with third parties, including drinking 

water suppliers should be encouraged. Any projects which involve 

drinking water suppliers and EQIP participants should be encouraged. (Section 1240J(a)) (Section 2301) 

The Conference substitute deletes the Senate provision on the 

nutrient reduction pilot program. 

(14) Section 11 

The Senate amendment amends Section 11 of the Commodity 

Credit Corporation (CCC) Charter Act to exclude transfers and allotments for conservation technical assistance from the current limitation. (Section 213(c)) 

The House bill contains no comparable provision. 

The Conference deletes the Senate provision. The Managers 

understand the critical nature of providing adequate funding for 

technical assistance. For that reason, technical assistance should 

come from each individual program. (Section 2301) 

(15) Water Benefits Program 

The Senate amendment states that the Secretary shall establish a Water Benefits Program, run through the Natural Resources 

Conservation Service (NRCS), in Nevada, California, New Mexico, 

Oregon, Washington, Maine and New Hampshire for cost-share 

payments for practices, including irrigation efficiency infrastructures and conversions from a water-intensive crop to a crop that requires less water, aimed at conservation of water to benefit fish 

and wildlife, with special emphasis on threatened and endangered 

species. (Section 1240R) 

The House bill contains no comparable provision. 

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The Conference substitute deletes the Senate provision. 

SUBTITLE E—FUNDING AND ADMINISTRATION

(1) Reauthorization 

The House bill reauthorizes these programs through 2011. 

(Section 241) 

The Senate amendment has no comparable provision. 

The Conference substitute reauthorizes the CCEP programs 

through 2007. (Section 2701) 

(2) Funding 

The House bill funds EQIP at $1.025 billion in fiscal years 

2002 and 2003, $1.2 billion in fiscal years 2004, 2005 and 2006, 

$1.4 billion in fiscal years 2007, 2008 and 2009, and $1.5 billion fiscal years 2010 and 2011. (Section 242) 

The Senate amendment funds EQIP at $500 million in fiscal 

year 2002, $1.3 billion in fiscal year 2003, $1.45 billion in fiscal 

years 2004 and 2005, and $1.5 billion in fiscal year 2006 and $850 

million in fiscal year 2007. (Section 213(b)) 

The Conference substitute funds EQIP at $400 million in fiscal 

year 2002, $700 million in fiscal year 2003, $1 billion in fiscal year 

2004, $1.2 in fiscal years 2005 and 2006, and $1.3 billion in fiscal 

year 2007. (Section 2701) 

(3) Allocation for Livestock Production 

The House bill extends the allocation of 50 percent of the EQIP 

funding to livestock through 2011. (Section 243) 

The Senate amendment removes the allocation formula. 

The Conference substitute adopts the House provision with 

modification to allow 60 percent for practices related livestock and 

40 percent for practices related to crops through fiscal year 2007. 

(Section 2701) 

(4) Administration and Technical Assistance 

The House bill broadens the exception to the acreage limitation 

by striking the requirement that operators in the county be having 

difficulties complying with a conservation plan, and requires the 

Secretary to reevaluate the provision of and amount of technical assistance made available under CRP, WRP and EQIP. (Section 244) 

The Senate amendment has no comparable provision. 

The Conference substitute adopts the House provision with 

modification. The Managers provide that funds for technical assistance shall come directly from the mandatory money provided for 

conservation programs under Subtitle D. (Section 2701) 

In order to ensure implementation, the Managers believe that 

technical assistance must be an integral part of all conservation 

programs authorized for mandatory funding. Accordingly, the Managers have provided for the payment of technical assistance from 

program accounts. The Managers expect technical assistance for all 

conservation programs to follow the model currently used for the 

EQIP whereby the Secretary determines, on an annual basis, the 

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agers intend that the funding will cover costs associated with technical assistance, such as administrative and overhead costs. 

(5) Third-Party Providers 

The House bill requires the Secretary to develop a system for 

approving third-party providers to give technical assistance within 

six months of the enactment of this subsection. (Section 244) 

The Senate amendment requires the Secretary to establish 

provisions for increased technical assistance by nonfederal providers, including certification of providers (without undermining 

private certification organizations). The Secretary may also enter 

cooperative agreements with state, local and nongovernmental 

groups to provide technical assistance. The Secretary shall require 

certification (including payment of a fee) for providers of technical 

assistance and offer waivers for both certification and fee payment. 

The Secretary shall establish an advisory committee with federal, 

state, local and private representatives charged with advising the 

Secretary on third-party technical assistance. (Section 204(f)) 

The Conference substitute adopts the House provision with 

modification. The Managers strongly encourage the Secretary to design a certification program for approving individuals and entities 

to provide technical assistance that includes individuals currently 

providing technical assistance through agreements or contracts, including cooperative agreements and memorandums of understanding. Persons that have provided technical assistance through 

a previous agreement such as a memorandum of understanding 

contract or cooperative agreement with the Secretary may continue 

to provide technical assistance. Their certification should be evaluated according to the criteria established by the regulations. In addition, the Secretary may request the services of, and enter into a 

cooperative agreement or a contract with, non-federal entities, a 

state water quality agency, a state fish and wildlife agency, a state 

forestry agency, a state conservation agency or conservation district, a land grant institution or other institutions of higher learning, or any other governmental or non-governmental organization. 

(Section 2701) 

Today there is considerable interest in both the private and 

public sectors to provide technical assistance for USDA conservation programs. In the past, USDA has been the primary provider 

of technical assistance to conservation program participants. However, it will be difficult to meet the increased demand for technical 

services as financial assistance increases over the life of the farm 

bill. The potential volume of many new, as well as returning, 

USDA conservation program participants may overwhelm the assistance available through existing resources. To meet this demand, assistance from third-party providers will be needed. 

It is the intent of the Managers that the third-party technical 

assistance certification program will result in a pool of individuals 

and organizations and agencies that are qualified to provide technical assistance to producers related to the development and implementation of conservation practices. The Managers intend for the 

Secretary to seek to optimize the delivery of technical assistance 

through public and private sources, and in conjunction with USDA 

500

staff, to effectively, efficiently, and expeditiously deliver conservation programs. 

The Managers intend that third-party vendors accepting federal technical assistance payments will follow all the applicable 

Federal laws. Furthermore, the Managers intend for third parties 

to accept the appropriate liability for the adequacy of their plans, 

practice designs, and implementation procedures, and to comply 

with all appropriate privacy and confidentiality requirements. 

It is the Managers intent in this section that third-party private providers may certify that the technical assistance meets 

USDA standards, but it is not intended as a certification for approval of program payment. 

SUBTITLE F—OTHER PROGRAMS

(1) Private Grazing Land and Conservation Assistance 

The House bill adds sustainable grazing systems to the list of 

activities eligible for assistance. (Section 251) 

The Senate amendment reauthorizes program to 2006. (Section 

217 (Section 1240P)) 

The Conference substitute adopts the Senate provision, with a 

modification to remove the findings section. The substitute reauthorizes the program through 2007. (Section 2501) 

(2) Wildlife Habitat Incentives Program 

The Senate amendment allows the Secretary to provide costshare payments and technical assistance to landowners to develop 

and enhance wildlife habitat. Funds the Wildlife Habitat Incentive 

Program (WHIP) at $50 million in fiscal year 2002, $225 million for 

fiscal year 2003, $275 million for fiscal year 2004, $325 million for 

fiscal year 2005, $355 million for fiscal year 2006, and $50 million 

for fiscal year 2007. The amendment reserves at least 15 percent 

of funds for projects to benefit endangered, threatened and sensitive species, allows the Secretary to establish a pilot program 

using up to 15 percent of the funds to enroll lands for at least 15 

years for essential habitat, and allows the Secretary to provide 

grants to individuals or nonprofit groups that lease public lands for 

enhancing wildlife habitat, if the work on the public land if it directly benefits private land. (Section 217) 

The House bill funds WHIP at $25 million in fiscal year 2002, 

$30 million in fiscal years 2003 and 2004, $35 million in fiscal 

years 2005 and 2006, $40 million in fiscal year 2007, $45 million 

in fiscal years 2008 and 2009, and $50 million in fiscal years 2010 

and 2011. (Section 252) 

The Conference substitute adopts the House amendment with 

modification. Cost-share payments will be made to landowners to 

develop upland wildlife, wetland wildlife, threatened and endangered species, fish and other types of wildlife habitat. Up to 15 percent of annual funds under this section may be for increased costshare payments to producers to protect and restore essential plant 

and animal habitat using agreements with a duration of at least 

15 years. The Managers strongly encourage the Secretary to continue using at least 15 percent of funds for threatened and endangered species. (Section 2502) 

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The Conference substitute funds the program as follows: $15 

million for fiscal year 2002; $30 million for fiscal year 2003; $60 

million for fiscal year 2004; $85 million for each of fiscal years 2005 

through 2007. (Section 2502) 

Where private lands adjoin public lands that are leased by the 

same producer, the Secretary may provide WHIP assistance if the 

conservation purpose directly benefits the adjacent private lands. 

(3) Farmland Protection Program 

(a) Acreage and eligibility 

The House bill strikes the acreage limitation, and makes agricultural land that contains historic or archaeological resources eligible for enrollment. (Section 253) 

The Senate amendment strikes the Farmland Protection Program (FPP) from the 1996 FAIR Act and moves to the 1985 Farm 

Bill, strikes the acreage limitation, expands the definition of eligible land, and makes agricultural land that contains historic or archaeological resources eligible for enrollment. (Section 218) 

The Conference substitute adopts the Senate provision. (Section 1238H(1)) (Section 2503) 

The Conference substitute adopts the Senate provision with 

clarification that forested land can only be enrolled if it is an incidental part of the agricultural operation. (Section 1238H(2)) (Section 2503) 

FPP has been a successful program and the Managers’ intent 

is that it continue to protect the nation’s best working agricultural 

lands. Although the name of the FPP shall remain the same for the 

purpose of continuity, the purpose of the program has been expanded to also include grazing, pasture, range, and forestland that 

is a part of an agricultural operation. 

In order to ensure that all states can participate in the program, the Managers have added non-profit organizations as eligible 

entities. In addition, the Managers recognize the need to protect 

important historic and archaeological resources located on farms 

and ranches. 

(b) Funding 

The House bill increases funding to $50 million per year in FY 

2002 through 2011. (Section 253) 

The Senate amendment increases FPP funding to $150 million 

in fiscal year 2002, $250 million in fiscal year 2003; $400 million 

in fiscal year 2004, $450 million for fiscal year 2005, $500 million 

in fiscal year 2006, and $100 million for fiscal year 2007. (Section 

218) 

The Conference substitute funds the program as follows: $50 

million for fiscal year 2002, $100 million for fiscal year 2003, $125 

million for fiscal years 2004 and 2005, $100 million for fiscal year 

2006, and $97 million for fiscal year 2007. (Section 2503) 

(c) Purchase of conservation easements 

The House bill clarifies entities that are eligible to receive 

funding for the purchase of conservation easements. (Section 253) 

502

The Senate amendment clarifies entities that are eligible to receive funding for the purchase of conservation easements. (Section 

218) 

The Conference substitute adopts the Senate provision. (Section 2503) 

The Managers expect the Secretary to utilize funds out of the 

FPP to protect from development the farm operated by American 

Airlines Captain John Ogonowski, the pilot of AA Flight 11 that 

was hijacked on September 11, 2001. The Managers direct the Secretary to work with the Dracut Land Trust, Incorporated, in 

Dracut, Massachusetts, to preserve this prime farmland as a working memorial to Captain Ogonowski. The Managers understand 

that the Dracut Land Trust would intend to keep a portion of the 

farm available for the New Entry Sustainable Farming Project that 

assists immigrant farmers from Cambodia, a project that Captain 

Ogonowski was deeply involved with from its inception. 

(d) Market viability grants 

The Senate amendment allows the Secretary to use up to $10 

million annually to provide matching market viability grants. The 

grantee must provide matching funds, limits federal cost-share to 

50 percent of the appraised fair market value of the easement. 

(Section 218) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

modification allowing for authorization of funding for market viability grants. (Section 218(b)) (Section 2503) 

(4) Resource Conservation and Development Program 

The House bill provides permanent authorization for the Resource Conservation and Development (RC&D) program and makes 

technical and conforming changes necessary to the program. (Section 254) 

The Senate amendment provides permanent authorization for 

the RC&D program and makes technical and conforming changes 

necessary to the program. (Section 216) 

The Conference substitute adopts the Senate provision with 

the modification that Senate amendment section 1532(e) will be 

struck, thereby disallowing an RC&D Council from using another 

person or entity to assist in developing and implementing an area 

plan. (Section 2504) 

(5) Grassland Reserve Program 

(a) Establishment 

The House amendment establishes a Grasslands Reserve Program (GRP) under which the Secretary may enroll up to 2 million 

acres (1 million acres of restored grassland, 1 million acres of virgin (never cultivated) grassland) using ten, fifteen and twenty-year 

contracts as well as thirty-year and permanent easements. 

The Senate amendment establishes a GRP under which the 

Secretary may enroll up to 2 million acres of natural grassland or 

land that was historically natural grassland using thirty-year rental agreements, easements or permanent easements. 

503

The Conference substitute adopts the House provision with 

modification that the total number of acres shall not exceed 2 million acres of restored, improved, or natural grassland, rangeland 

and pastureland, including prairie. The Secretary shall enroll not 

less than 40 contiguous acres of land using ten-year, fifteen-year, 

twenty-year and thirty-year contracts as well as thirty-year and 

permanent easements. The Secretary may provide a waiver for 

smaller tracts of land in the case of exceptional acreage that meets 

the purposes of the program. (Section 2401) 

The Managers expect the Secretary to use 40 percent of the 

funds to conduct the sign-up and enrollment for the ten, fifteen, 

and twenty-year GRP contracts in a manner similar to the method 

currently used by the Secretary for the CRP. This should allow for 

enrollment competition that will limit the cost per acre but encourage the producer to maintain or initiate sound grazing practices 

commonly used in the local area. For long-term agreements and 

easements, the Managers intend that the sign-up be conducted in 

a manner similar to the WRP. The standards for grazing should be 

no more stringent than those used in the CRP, the CSP or the 

FPP. All grasslands should receive equitable treatment in the signup and enrollment process. 

(b) Funding 

The House amendment provides $254 million in funding. Not 

more than one-third of this money may be used to acquire permanent easements. 

The Senate amendment directs that funding shall be provided 

through the CCC. 

The Conference substitute adopts the House provision with 

modification that 60 percent of this money may be used to enter 

into thirty-year agreements and acquire thirty-year and permanent 

easements. (Section 2401) 

(c) Eligible practices 

The House bill permits common grazing practices where consistent with maintaining the viability of natural grass and shrub 

species indigenous to that locality, allows for haying, mowing or 

haying for seed production except during the nesting season for 

birds in the local area which are in significant decline or are conserved pursuant to state or federal law as determined by NRCS. 

The bill also permits the construction of firebreaks and fences. The 

House bill prohibits the production of any agricultural commodity 

(other than hay) and any other activity that would disturb the surface of the land covered by the agreement. 

The Senate amendment permits common grazing practices 

where consistent with maintaining the viability of natural grass, 

shrub, forb and wildlife species indigenous to that locality and allows for haying, mowing or haying for seed production except during the nesting or brood-rearing season for birds in the local area 

which are in significant decline as determined by NRCS. It permits 

the construction of firebreaks and fences and gives emphasis to 

support for native grassland and land containing shrubs or forb, 

grazing operations, and plant and animal bio-diversity under the 

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tion of any agricultural commodity (other than hay) and any other 

activity that would disturb the surface of the land covered by the 

agreement. The Secretary together with the State technical committee shall establish criteria for ranking applications, but shall 

emphasize support for grazing operations, biodiversity and lands 

under greatest threat of conversion. 

The Conference substitute adopts the House provision with 

modification. (Section 2401) 

The Managers intend that the Secretary shall permit common 

grazing practices. In permitting such activities, the Managers intend that the Secretary will allow for maintenance and necessary 

cultural practices common to grazing systems utilized throughout 

the various regions of the country. These management practices 

may include such things as: controlled burning, aeration, over-seeding, reseeding, planting of new native species or any other practice 

as determined by the Secretary to be necessary for grazing management. Beyond maintenance, the Managers intend that the Secretary will permit haying, mowing, or harvesting for seed production, subject to appropriate restrictions for completion of the nesting season for birds in the local area which are in significant decline or are conserved pursuant to state or federal law, as determined by the NRCS state conservationist. 

(d) Payments 

The House amendment directs that contract payments shall be 

made annually in an amount that is not more than 75 percent of 

the grazing value of the land. Easement payments may be made 

as a single payment or a series of annual payments. In the case

of a permanent easement, the payment shall be equal to the fair 

market value of the land less the grazing value of the land encumbered by the easement. With respect to a thirty-year easement, the 

payment shall be equal to 30 percent of the fair market value of 

the land less the grazing value of the land for the period that the 

land is encumbered by the easement. In addition to incentive payments, the Secretary is authorized to provide cost-share assistance 

for restoration projects. In the case of virgin grassland, these payments may not exceed 90 percent of the restoration costs. With respect to restored grasslands, these payments may not exceed 75 

percent of such costs. (Section 255) 

The Senate amendment establishes payments for permanent 

easements that shall equal the fair market value of the land less 

the grazing value and for 30-year easements, 30% of the fair market value of the land less the grazing value. 30-year rental agreements shall be equal, to the maximum extent possible, to the payment for 30-year easements. The Secretary shall provide up to 75% 

of cost-share for restoration of grassland. The Secretary may permit an eligible private organization or state agency to hold and enforce an easement. (Section 219) 

The Conference substitute adopts the House provision with 

modification to use the Senate formula for thirty-year agreements 

as well as thirty-year and permanent easements. (Section 2401) 

505

(6) Farmland Stewardship Program 

The House bill establishes a new program to use federal conservation programs in conjunction and cooperation with state and 

local conservation efforts, and enables the Secretary to implement 

or combine together the features of the WRP, WHIP, FPP, the new 

Forest Land Enhancement Program (FLEP) or other conservation 

programs where feasible. (Section 256) 

The Senate amendment has no comparable provision. 

The Conference substitute deletes the House provision. (Section 2502) 

(7) Small Watershed Rehabilitation Program 

The House bill authorizes appropriations to fund the program 

at $15 million annually for fiscal year 2002 and each succeeding 

fiscal year. (Section 257) 

The Senate amendment has no comparable provision. 

The Conference substitute adopts the House provision, providing $275 million over the length of this legislation and reauthorizes the program. (Section 2505) 

(8) Provision of Assistance For Repaupo Creek Tide Gate and Dike 

Restoration Project, New Jersey 

The House bill directs the Secretary, acting through NRCS, to 

provide assistance for planning and implementation of the Repaupo 

Creek Tide Gate and Dike Restoration Project. (Section 258) 

The Senate amendment has no comparable provision. 

The Conference substitute deletes the House provision. (Section 2501) 

(9) Conservation Corridor Demonstration Program 

The Conference substitute adopts a new provision not contained in either bill that requires the Secretary of Agriculture to 

establish a conservation corridor demonstration program on the 

Delmarva Peninsula in the states of Delaware, Maryland and Virginia located on the east side of the Chesapeake Bay. A state, local 

government or combination of states must submit a plan and commit resources in order to participate in the program that is designed to demonstrate local conservation and economic cooperation 

using existing agriculture and forestry conservation programs of 

the Department of Agriculture. 

The Managers intend that this new program may use only conservation program funds for which they are authorized and annually appropriated by the Congress. 

SUBTITLE G—MISCELLANEOUS

(1) Grassroots Source Water Protection Program 

The Senate amendment authorizes $5 million annually from 

fiscal years 2002 to 2006 for a national grassroots water protection 

program to more effectively use technical capabilities of each state 

rural water association that operates a well-head or groundwater 

protection program. (Section 217 (Section 1240Q)) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. 

506

(2) Underserved States 

The Conference substitute adopts a provision adding $10 million per year for USDA’s Agriculture Management Assistance Program for fiscal years 2003 through 2007. The program assists 

states found by USDA to be under-served in the Agricultural Risk 

Protection Act of 2000. 

(3) Organic Agriculture Research Trust Fund 

The Senate amendment establishes an Organic Agriculture Research Trust Fund. 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

funding of $3 million a year through the life of the bill. (Section 

231) 

(4) Establishment of National Organic Research Endowment Institute 

The Senate amendment states that the Secretary shall establish a National Organic Research Endowment Institute. 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(5) Allocation of Conservation Funds by State 

The Senate amendment states that the Secretary shall, to the 

maximum extent possible, provide each state with a minimum of 

$12 million annually from conservation programs. Each state shall 

be provided $5 million from EQIP and a minimum of $7 million 

from other conservation programs administered by the Secretary. 

Any funds not obligated under this provision by April 1 of the fiscal 

year shall be available to carry out activities under Subtitle D. 

(Section 241) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

modification. Before April 1 of each fiscal year, priority for funding 

for conservation programs, excluding CRP, CSP and WRP, shall be 

given to approved applications in any state that has not received 

cumulative conservation funding for the fiscal year of at least $12 

million. The Managers understand that only participants who qualify under the individual program from which funds will be provided 

shall be eligible to receive this priority under this program. 

(6) Watershed Risk Reduction 

The Senate amendment states that the Secretary, acting 

through NRCS, shall cooperate with landowners and land users to 

conduct projects (including the purchase of flood plain easements) 

to safeguard lives and property from floods, drought, and the products of erosion on any watershed. Priority shall be given to any 

project or activity that is carried out on a flood plain adjacent to 

a major river and there is authorized to be appropriate $15 million 

for each of fiscal years 2002 through 2006. (Section 217 (Section 

1240N)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

507

(7) Great Lakes Basin Program For Soil Erosion and Sediment 

Control 

The Senate amendment authorizes the Secretary of Agriculture, in consultation with the Great Lakes Commission, and in 

cooperation with the Administrator of the Environmental Protection Agency and the Secretary of the Army to carry out a program 

in the Great Lakes basin for soil erosion and sediment control. 

There is an authorization of appropriations of $5 million for each 

of the fiscal years 2002 through 2006. (Sec. 12400) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate amendment. 

(8) Cranberry Acreage Reserve Program 

The Senate amendment states that the Secretary shall establish a program to purchase permanent easements on wetlands or 

buffer strips adjacent to a wetland that is environmentally sensitive and has or is used for cultivation of cranberries. The purchase price should reflect the range of values for agricultural and 

non-agricultural lands. The section authorizes appropriations of 

$10 million. (Section 261) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision and 

moves the item to the Miscellaneous Title of this legislation. 

(9) Klamath Basin 

The Senate amendment provides that the Secretary shall, in 

coordination with the Secretary of the Interior, establish the Klamath Basin Interagency Task Force composed of relevant federal 

agencies to use conservation programs to address the environmental and agricultural needs of the Klamath Basin. (Section 262) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision, however, funding is provided to assist producers in the Klamath Basin 

under the new section 1240I, Ground and Surface Water Conservation. 

The Managers encourage the U.S. Department of Agriculture 

to make full use of specific funding of $50,000,000 for the Klamath 

Basin contained in the new water conservation program to help 

farmers and ranchers with cost-share assistance, incentive payments and technical assistance. 

(10) State Technical Committees 

The Senate amendment expands and updates membership of 

State Technical Committee to include NRCS (instead of the Soil 

Conservation Service) as chair, Farm Service Agency, land grant 

colleges and universities, and forestry experts. (Section 1261) 

The House bill contains no comparable provision 

The Conference substitute deletes the Senate provision. 

The Managers strongly encourage updating the involvement of 

interested experts, including those with expertise in forestry and 

land grant colleges. Also, the Managers are concerned about reports that in some states, members of state technical committees 

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retary to ensure that chairpersons of the committee strive to increase involvement. 

SUBTITLE H—REPEALS

(1) Provisions of the Food Security Act of 1985 

The House bill repeals various authorities including the wetlands mitigation-banking program (1222(k)), environmental easement program (chapter 3 of subtitle D), conservation farm option 

(chapter 5 of subtitle D) and tree planting initiative (1256). Repeals 

various provisions of the CRP and WRP. (Section 261) 

The Senate amendment has no comparable provision. 

The Conference substitute deletes the House provision. 

(2) National Natural Resources Conservation Foundation Act 

The House bill repeals subtitle F of Title III of the 1996 FAIR 

Act. (Section 262) 

The Senate amendment permits the Secretary to authorize the 

Foundation to use, license or transfer symbols, slogans and logos 

of the Department. Requires that all revenues be transferred to 

NRCS account to carry out conservation operations. (Section 221) 

The Conference substitute adopts the Senate provision with a 

modification to authorize the Foundation to license logos of the 

Foundation and explicitly prohibits the licensing of any symbol or 

logo of a government entity. (Section 2506) 

TITLE III—TRADE

(1) Market Access Program 

The House bill reauthorizes the Market Access Program through 2011 and increases funding to $200 million. (Section 301) 

The Senate amendment reauthorizes MAP through 2006, and increases MAP funding to: $100 million in 2002, $120 million in 

2003, $140 million in 2004, $180 million in 2005, and $200 million 

in 2006. It also establishes priority for new program participants 

and programs in emerging markets for amounts above $90 million 

and authorizes the new Quality Export Initiative to identify high 

quality U.S. agricultural products. This initiative will be subject to 

appropriations. (Section 322)

The Conference substitute adopts the Senate provision on reauthorization through 2007, at the following annual funding levels: 

$100 million in 2002, $110 million in 2003, $125 million in 2004, 

$140 million in 2005, and $200 million in 2006 and subsequent 

years. It establishes that proposals submitted by new program participants and programs in emerging markets shall receive consideration equal to that given to current program participants for new 

funds made available. It includes no provision dealing with the 

Quality Export Initiative program. (Section 3103) 

(2) Food for Progress 

The House bill includes the following: reauthorizes Food for 

Progress through 2011; increases the limits on Commodity Credit 

Corporation funding for administrative costs to $15 million; increases the limits on Commodity Credit Corporation funding for 

transportation costs related to distribution of commodities to $40 

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million; excludes from the limitations on tonnage in Section 1110(g) 

of Food for Progress those commodities furnished on a grant basis 

or on credit terms under title I of the Agricultural Trade Development Act of 1954; increases limits on amounts of commodities to 

1,000,000 metric tons; encourages the President to approve agreements that provide commodities to be made available for distribution or sale on a multi-year basis; allows for the use of U.S. dollars 

and other currencies for the monetization of commodities by authorizing the President to use ‘‘proceeds’’; adds a new provision 

that encourages the Secretary to finalize program agreements and 

requests before the beginning of the relevant fiscal year; and requires the Secretary to provide the House Committee on Agriculture, House Committee on International Relations and the Senate Committee on Agriculture, Nutrition and Forestry a list of approved programs, countries and commodities, and the total 

amounts of funds approved for transportation and administrative 

costs related to Food for Progress by November 1 of the relevant 

fiscal year. (Section 302) 

The Senate amendment includes the following: rewrites Food 

for Progress as a new Title VIII of the 1978 Agricultural Trade Act 

called ‘‘Food for Progress and Education Programs,’’ authorized 

through 2006; permits USDA to provide agricultural commodities 

to support introduction or expansion of free trade enterprises in recipient country economies; defines eligible commodities as ‘‘agricultural commodities (including vitamins and minerals) acquired by 

the Secretary or the Corporation for disposition in a program authorized under this title’’; provides that not more than $55 million 

of the funds made available may be used to cover non-commodity 

costs, of which not more than $12 million may be used to cover administrative costs; establishes a 400,000 MT minimum tonnage per 

year for the program; allows multi-year PVO agreements and certified institutional partners status for PVO’s; allows monetization 

in U.S. dollars; encourages timely and streamlined approval programs; directs the Secretary to make program announcements before the beginning of the fiscal year; requires eligible organizations 

with agreements under this title to submit reports to the Secretary 

containing such information as is required relating to the use of 

commodities and funds provided for said agreements; requires that 

assistance under this title shall be coordinated with other forms of 

foreign assistance under the mechanism designated by the President; requires the Secretary to ensure that each eligible organization is optimizing the use of donated commodities, as follows: (1) 

taking into account the needs of target populations in recipient 

countries; (2) working with recipient countries and institutions or 

groups within those countries to design mutually acceptable programs; (3) monitor and report on distribution and sale of eligible 

commodities using accurate and timely reporting methods; (4) periodically evaluate the eligible organization’s program effectiveness; 

and (5) consider means of improving program operation. 

Agricultural commodities shall be made available under this 

title without regard to political, geographic, ethnic, or religious 

identity of the recipient. The Secretary is barred from providing 

commodities under any agreement that requires or permits the distribution or handling of those commodities by any military forces, 

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except when non-military channels are not available and the Secretary deems that conditions require such distributions occur. 

The Senate amendment also authorizes the appropriation of 

such sums as may be necessary to carry out the title, plus permits 

the use of P.L. 480 Title I funds; Provides that all commodities related expenses must be in addition to any other P.L. 480 assistance. (Section 325) 

The Conference substitute adopts the House bill provisions in 

the following areas: (1) the program is reauthorized through 2007; 

(2) an exclusion from the limitation on tonnage for those commodities furnished on a grant basis or on credit terms under title I; (3) 

encouragement of the President to finalize agreements before the 

beginning of the relevant fiscal year, and provision by the President to the relevant Committees a list of approved programs, countries, and commodities by December 1 of the relevant fiscal year; 

(4) definition of eligible commodities, and (5) funding levels for the 

program, both for non-commodity costs and administrative expenses. 

The Conference substitute adopts the following House provisions with modifications. The President was encouraged to approve 

agreements on a multi-year basis; the provision was expanded to 

include all eligible organizations rather than just PVO’s and to encourage multi-country agreements as well, subject to the availability of commodities. 

The Conference substitute adopts the Senate provisions on 

monetization of commodities in U.S. dollars, on minimum tonnage. 

In recognition of the Senate provision on certified institutional 

partners, the Conference substitute adopts language to streamline, 

improve and clarify the application, approval, and implementation 

processes pertaining to agreements under the Food for Progress 

program. It also requires the Department to undertake consultation with the relevant Congressional Committees within one year 

of enactment of the Act on the Department’s progress in achieving 

streamlining. Unlike the certified institutional partners provisions, 

the streamlining provisions will apply equally to all eligible organizations, whether or not they have previously participated in the 

program. 

The Conference substitute amends the existing Food for 

Progress Act of 1985, rather than establishes a new Title VIII of 

the Agricultural Trade Act of 1978. Out of the Senate amendment, 

it incorporates a definition section in the statute, establishes quality assurance requirements, and requires the President to ensure 

that each eligible organization is optimizing the use of donated 

commodities, as follows: (1) taking into account the needs of target 

populations in recipient countries; (2) working with recipient countries and institutions or groups within those countries to design 

mutually acceptable programs; (3) monitor and report on distribution and sale of eligible commodities using accurate and timely reporting methods; and (4) periodically evaluate the eligible organization’s program effectiveness. It also establishes the purposes of the 

program. (Section 3106)

The Managers are aware of the Food Aid Review conducted by 

the Administration, which is a continuing process of review of all 

foreign food aid programs. The Administration plans to make sevVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00514 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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eral changes beginning in FY 2003, which include USDA administering all government-to-government programs as a result of 

funding Food for Progress programs through Title I and USAID administering most private voluntary programs through Title II. 

Under the current Food for Progress statute, eligible organizations include private voluntary organizations, cooperatives, other 

non-governmental and intergovernmental organizations, as well as 

foreign governments. In providing additional resources and establishing a minimum tonnage requirement for the Food for Progress 

program under this section, the Managers wish to see the program 

accessible to all eligible organizations submitting proposals. The 

Administration’s ongoing food aid review should take this into consideration. In many circumstances, the institutional experience of 

private voluntary organizations and other organizations may be 

crucial in determining the success or failure of projects in emerging 

markets under the Food for Progress program. 

(3) Surplus Commodities for Developing or Friendly Countries 

The House bill authorizes the use of U.S. dollars and other currencies for the monetization of commodities and requires the Secretary to publish in the Federal Register by October 31 of each fiscal year an estimate of the total commodities available under this 

section for that fiscal year and encourages the Secretary to finalize 

agreements by Dec. 31. (Section 303) 

The Senate amendment authorizes the use of U.S. dollars and 

other currencies for the monetization of commodities, strikes subparagraph 416(b)(8)(A), allows direct delivery of commodities to 

milling or processing facilities in recipient countries, with proceeds 

of transactions going to eligible organizations to carry out the approved project, permits PVO’s to apply to become certified institutional partners, and provides that PVO’s may submit multi-country 

proposals. (Section 334) 

The Conference substitute adopts the House provision with respect to monetization and requiring the Secretary to report by October 31 the commodities available under this section for that fiscal 

year. The Conference substitute adopts the Senate provision with 

respect to encouraging submission of multi-country proposals, expanded to include all eligible organizations rather than just PVO’s, 

and to encourage multi-year agreements as well, subject to the 

availability of commodities. The conference substitute omits the 

Senate provision on direct delivery of commodities. 

The Conference substitute also adopts the Senate provision on 

certified institutional partners, with the following changes: within 

270 days, the Secretary shall review and, as necessary, make 

changes in regulations and internal procedures designed to streamline, improve, and clarify the application, approval, and implementation processes pertaining to agreements under Section 416(b). It 

also requires the Secretary to undertake consultation with the relevant Congressional Committees within one year of enactment of 

the Act on the Secretary’s progress in achieving streamlining. 

These new procedures will apply equally to all eligible organizations, whether or not they have previously participated in the program. (Section 3201) 

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The Managers believe that the use of donated American agricultural commodities to support rural electrification overseas is a 

highly appropriate use of surplus commodity monetization, particularly where the USDA’s own rural electrification expertise can be 

added to the on-going efforts of American electric cooperatives to 

‘‘export’’ the successful rural electrification model that was established with the Rural Electrification Administration. The Conferees 

encourage the Secretary of Agriculture to direct a more aggressive 

rural electrification development effort as part of USDA’s monetization programs under section 416(b) of the Agricultural Act of 1949, 

including collaboration with other international development agencies in leveraging funds to build on the successful experience of 

American electric co-op projects in less developed countries. 

(4) Export Enhancement Program 

The House bill extends the Export Enhancement Act through 

2011 at the current funding level. (Section 304) 

The Senate amendment extends the Export Enhancement Act 

through 2006 at the current funding level and expands definition 

of unfair trade practices to include (1) pricing practices by an exporting state trading enterprise that ‘‘are not consistent with sound 

commercial practices conducted in the ordinary course of trade,’’ or 

(2) changing U.S. ‘‘export terms of trade through a deliberate 

change in the dollar exchange rate of a competing exporter.’’ (Section 323) 

The Conference substitute adopts the House provision with respect to reauthorization of the program through 2007. The Conference substitute adopts the Senate provision on unfair trade practices, with the following changes: amends paragraph (2) to clarify 

the type of state trading enterprise covered by this definition, drops 

the exchange rate reference, and inserts the following list of activities: subsidies that decrease market opportunities for United States 

exports or unfairly distort agricultural markets to the detriment of 

the United States; unjustified trade restrictions or commercial requirements, such as labeling, that affect new technologies, including biotechnology; unjustified sanitary or phytosanitary restrictions, including those not based on scientific principles in contravention of the Uruguay Round Agreements; other unjustified 

technical barriers to trade; rules that unfairly restrict imports of 

United States agricultural products in the administration of tariff 

rate quotas; and the failure of a country to adhere to the provision 

of already existing trade agreements with the United States or by 

the circumvention by that country of its obligations under those 

agreements. (Section 3104) 

(5) Foreign Market Development Cooperator Program 

The House bill includes the following: reauthorizes the Foreign 

Market Development Cooperator Program through 2011; authorizes 

such sums as may be necessary to carry out this title, and in addition to any sums appropriated, authorizes $37 million from the 

Commodity Credit Corporation for each of fiscal years 2002 

through 2011 to carry out the program; directs the Secretary to 

carry out the Foreign Market Development Cooperator Program 

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added agricultural products to emerging markets; specifies that the 

Secretary shall report to the House Committees on Agriculture and 

International Relations, and the Committees on Agriculture, Nutrition and Forestry and Foreign Relations of the Senate, on the funding and success of the Foreign Market Development Cooperator 

Program. (Section 305) 

The Senate amendment contains the following: reauthorizes 

Foreign Market Development Cooperator Program through 2006; 

authorizes, from the Commodity Credit Corporation: $37.5 million 

for 2002, $40 million for 2003, and $42.5 million for 2004, 2005 and 

2006; establishes priority for new program participants and programs in emerging markets for amounts above $35 million. (Section 324) 

The Conference substitute adopts the Senate provision on reauthorizing the program through 2007, and establishes that proposals submitted by new program participants and programs in 

emerging markets shall receive consideration equal to that given to 

current program participants for additional funds made available. 

The substitute authorizes, from the Commodity Credit Corporation, 

$34.5 million for each fiscal year between 2002 and fiscal year 

2007. 

The Conference substitute adopts the House provision with respect to a significant emphasis on value-added products, with clarification that the emphasis required is a ‘‘continued significant emphasis’’, to recognize that USDA already places a significant emphasis on value-added, accounting for about one-third of the program. It also requires a report on funding and success of the Foreign Market Development Cooperator Program to the relevant Congressional Committees. (Section 3105) 

(6) Export Credit Guarantee Program 

The House bill reauthorizes the Export Credit Guarantee Program through 2011, and continues for fiscal years 2002 through 

2011 the current requirement that not less than 35 percent of the 

export credit guarantees issued be used to promote the export of 

processed or high-value agricultural products. (Section 306) 

The Senate amendment reauthorizes Export Credit Guarantee 

Program through 2006, continues for fiscal years 2002 through 

2006 the current requirement that not less than 35 percent of the 

export credit guarantees issued be used to promote the export of 

processed or high-value agricultural products; extends terms of repayment for the supplier credit guarantee program from 180 days 

to 12 months, and requires Secretary to provide a report, one year 

after enactment of the law, on the status of multilateral export 

credit negotiations at the WTO and OECD. (Section 321) 

The Conference substitute adopts the Senate provision and reauthorizes the program through 2007. It changes the subsection 

that requires the Secretary to provide a report on multilateral export credit negotiations to requiring the Secretary and the United 

States Trade Representative to regularly consult with the relevant 

House and Senate Committees on that issue. The substitute also 

changes the new terms of repayment for the supplier credit guarantee program from 12 months to 360 days, if an authorization of 

514

appropriations to fund loan terms greater than current length of 

180 days is provided. (Section 3102) 

(7) Food for Peace Program and the International Food Relief Partnership Act 

The House bill reauthorizes the Food for Peace Program and 

the International Food Relief Partnership Act through 2011, and 

adds conflict prevention as a program objective. (Section 307) 

The Senate amendment reauthorizes the Food for Peace Program and the International Food Relief Partnership Act through 

2006, and adds conflict prevention as a program objective. (Section 

311) 

The Conference substitute adopts the House provision, reauthorizing the program through 2007. Program approvals should be 

based on the potential benefits of the program on food security and 

the choice of the appropriate commodity for the intended use. (Section 3011) 

(8) Non-emergency Assistance 

The Senate amendment adds a new provision under ‘‘(b) Nonemergency Assistance’’ requiring the Administrator to foster program diversity by encouraging eligible organizations to propose and 

implement plans that address 1 or more aspects of Food for Peace 

and incorporate a variety of program objectives to assist development in foreign countries. (Section 302) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision, with 

an amendment clarifying that plans shall address program objectives specified in Section 201 of the Agricultural Trade, Development and Assistance Act of 1954. (Section 3002) 

(9) Funding 

The House bill provides that the funding for transportation, 

storage and handling of P.L. 480 commodities shall be not less than 

5 percent and not more than 10 percent of the funds made available under title II in each fiscal year. (Section 307) 

The Senate amendment provides that the funding for transportation, storage and handling of P.L. 480 commodities shall be not 

less than 5 percent and not more than 10 percent of the funds 

made available under title II in each fiscal year. (Section 302) 

The Conference substitute adopts the Senate provision. (Section 3002) 

(10) Private Voluntary Organization Authority (PVO) 

The House bill grants PVO’s authority to submit multi-country 

proposals. (Section 307) 

The Senate amendment grants PVO’s authority to submit 

multi-country proposals. Also requires US–AID or USDA, as applicable, to establish a process enabling PVO’s and cooperatives that 

can demonstrate their capacity to carry out the programs, to qualify as ‘‘certified institutional partners,’’ which would entitle them to 

use streamlined application procedures, including expedited review, 

to receive commodities. (Section 302) 

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The Conference substitute adopts the House provision with the 

following changes: the inclusion of all eligible organizations rather 

than just PVO’s and to encourage multi-year agreements as well. 

The Conference substitute also adopts the Senate provision 

with the following changes: within one year after enactment of this 

Act, requires the Administrator to establish streamlined guidelines 

and application procedures for programs under Title II, to be effective for fiscal year 2004, to the maximum extent practicable, for resource allocation for existing projects and for new project proposals. 

It also requires US–AID to undertake stakeholder consultation 

using statutory procedures, as well as consultation with the relevant Congressional Committees, within six months of enactment, 

on the Agency’s progress in achieving streamlining. A report is to 

be submitted within 270 days on progress achieved in modernizing 

US–AID’s information management, procurement, and financial 

management systems to accommodate Title II needs. (Section 3002) 

(11) Use of U.S. Dollars 

The House bill allows PVO’s to use U.S. dollars when monetizing commodities in foreign countries. (Section 307)

The Senate amendment allows the use of U.S. dollars when 

monetization is done in foreign countries. (Section 303) 

The Conference substitute adopts the Senate provision on permitting eligible organizations to monetize commodities in U.S. dollars in foreign countries. (Section 3003) 

(12) Minimum Level of Commodities 

The House bill increases the minimum level of commodities 

available to 2,250,000 metric tons. (Section 307) 

The Senate amendment increases the minimum level of commodities available from 2,025,000 MT to: 2,100,000 metric tons for 

2002; 2,200,000 metric tons for 2003; 2,300,000 metric tons for 

2004; 2,400,000 metric tons for 2005; and 2,500,000 metric tons for 

2006. It also adds crude degummed soybean oil to list of valueadded commodities under Title II. (Section 304) 

The Conference substitute adopts the House provision, with a 

change to 2,500,000 metric tons per year as the minimum level of 

commodities beginning in fiscal year 2002. 

The Conference substitute adopts a new provision, changing 

the sub-minimum requirement for non-emergency programs to 

1,875,000 tons annually (Section 3004) 

The Managers ask the Administrator to examine the commodities currently shipped under Title II non-emergency programs, and 

determine which ones qualify as value-added products to satisfy 

the sub-minimum requirement under Section 204(b) of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 

1724). 

(13) Food Aid Consultative Group 

The House bill reauthorizes the food aid consultative group 

through 2011. (Section 307) 

The Senate amendment reauthorizes the food aid consultative 

group through 2006. (Section 305) 

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The Conference substitute adopts the House provision, reauthorizing the consultative group through 2007. (Section 3005) 

(14) Title II Spending 

The House bill eliminates the $1 billion cap on spending for 

Title II. (Section 307) 

The Senate amendment raises the cap on Title II spending 

from $1 billion to $2 billion annually. (Section 306) 

The Conference substitute adopts the House provision. (Section 

3006) 

(15) Duties of the Administrator of US–AID 

The House bill requires that the Administrator of US-AID 

make decisions on program proposals, received from PVO’s, not 

later than 120 days after receipt. (Section 307) 

The Senate amendment requires that the Administrator of 

US–AID make decisions on program proposals, received from 

PVO’s, not later than 120 days after receipt, requires the Administrator to treat proposed policy determinations the same as guidelines, and allows direct delivery of commodities to milling or processing facilities in recipient countries, with proceeds of transactions 

going to eligible organizations to carry out the approved project. 

(Section 307) 

The Conference substitute adopts the Senate provision, with 

the technical change that the 120 day period begins after submission of the proposal to the Administrator rather than receipt of the 

proposal by the Administrator, and that to the maximum extent 

practicable, the Administrator is encouraged to make decisions on 

program proposals within that period. The annual policy guidance 

letter issued by the Administrator shall be subject to notice and 

comment requirements. The conference substitute omits the Senate 

provision on direct delivery of commodities. (Section 3007) 

The Managers note that at present, milling or processing facilities located in or near countries receiving food aid are occasionally 

unable to process commodities or arrange for the monetization of 

commodities because the non-governmental organizations coordinating or arranging the food aid delivery do not interact on a timely basis with the milling or processing facilities. This often leads 

to delay and inefficiencies in the food aid program. 

The streamlining of procedures and regulatory requirements, 

and acceleration of the approval and review of projects involving 

food aid programs administered by USDA and US–AID are a priority in this legislation. It is equally important that participating 

non-governmental organizations also expedite the delivery of their 

projects by consulting with milling or processing facilities prior to 

filing project applications with USDA or US–AID. It is necessary 

for USDA, US–AID, and participating non-governmental organizations to act in concert to streamline and expedite procedures and 

activities to achieve a more effective and timely food aid delivery 

process. 

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(16) Funding for Stockpiling and Rapid Transportation, Delivery, 

and Distribution of Shelf-Stable Prepackaged Foods 

The House bill reauthorizes at current funding level through 

2011. (Section 307) 

The Senate amendment reauthorizes at current funding level 

through 2006. (Section 308) 

The Conference substitute adopts the House provision, reauthorizing the funding through 2007. (Section 3008) 

(17) Sale Procedure 

The House bill adds a new subsection, (l), to section 403 that 

provides that (b) and (h) shall apply to titles II and III of Food for 

Peace, section 416(b) of the Agricultural Act of 1949, and section 

1110 of the Food and Security Act of 1985. It also allows for monetization in the sales to generate proceeds under these designated 

sections and titles. (Section 307) 

The Senate amendment adds a new subsection, (l), to section 

403 that provides that (b) shall apply to section 416(b) of the Agricultural Act of 1949, and title VIII of the Agricultural Trade Act 

of 1978. It also allows for monetization in the sales to generate proceeds under these programs, and defines reasonable market price 

for purposes of monetization of commodities. (Section 310) 

The Conference substitute adopts the House provision with respect to sale procedure and adopts the Senate provision with respect to reasonable market price. (Section 3009) 

The reasonable market price provision requires that commodities be sold at a reasonable market price in the economy where the 

commodity is to be sold. This would generally be the locally prevailing price for the same or a similar commodity. 

The Managers understand that, as with commercial sales, the 

actual sales price will be affected by product quality and delivery 

and payment terms. There are two primary purposes for this provision. The first is to ensure that commodities are sold at the prevailing local market price, rather than imposing an arbitrary formula approach. 

The Managers believe that a relatively inflexible formula approach is undesirable because in situations in which local prices 

are above the formula value, the formula does not maximize proceeds from sales of commodities. Conversely, in cases in which the 

formula produces a price significantly above locally prevailing 

prices, no sales are likely to result, to the possible detriment of program operations in recipient countries. 

The second reason for this provision is to bring consistency to 

the approaches currently used by US–AID and USDA. The Managers understand that although the two agencies generally operate 

in different countries at different times, some monetization programs may overlap. The Managers expect that, should this occur, 

the two agencies will consult to ensure that, to the extent possible, 

a uniform sales price is established. More generally, the Managers 

expect the two agencies to adopt methodologies for determining a 

reasonable market price that will tend to produce similar results 

in determining sales prices. 

Finally, the Managers note that this provision is intended to 

be consistent with the goal of maximizing proceeds from commodity 

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sales. In deciding whether to approve a proposed sale of commodities at the local market price, the Managers expect that both agencies will take into account the prevailing U.S. and world market 

prices of a commodity, including U.S. acquisition costs, transportation costs, and any localized factors that might result in significant differences between prevailing local market prices and those 

prices that would be expected to prevail in a pure free market. In 

cases in which high-quality U.S. agricultural products are purchased for the program, it should be noted that the market in the 

recipient country may not be sufficiently sensitive to fully reflect 

quality premiums. 

(18) Lamb Program 

The Senate amendment permits the Secretary to establish a 

program to provide live lamb on an emergency food relief basis to 

Afghanistan. (Section 309) 

The House bill contains no comparable provision. 

The Conference substitute incorporates the Senate provision 

into another section of this title dealing with a report on use of perishable commodities in food aid programs. (Sec. 3207) 

(19) Reauthorize Limits on Funding for Prepositioning 

The House bill reauthorizes limits on funding for 

prepositioning through 2011. (Section 307) 

The Senate amendment reauthorizes limits on funding for 

prepositioning through 2006. (Section 311) 

The Conference substitute adopts the Senate provision, reauthorizing the funding through 2007. (Section 3010) 

(20) Authority for Paying Transportation Costs Under Title II NonEmergency Program 

The House bill adds a provision providing the authority for the 

US–AID Administrator to pay for transportation costs for nonemergency assistance under Title II, and only to least developed 

countries. (Section 307) 

The Senate bill contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

3012) 

(21) Expiration Date 

The House bill extends the expiration date to December 31, 

2011. (Section 307) 

The Senate amendment extends the expiration date to December 31, 2006. (Section 312) 

The Conference substitute adopts the House provision, reauthorizing the program through fiscal year 2007. (Section 3011) 

(22) Reauthorize Farmer-to-Farmer Program 

The House bill reauthorizes the Farmer-to-Farmer Program 

through 2011 at the current funding level of 0.4 percent of the 

funds made available under titles I and II of P.L. 480 (Section 307) 

The Senate amendment reauthorizes the Farmer-to-Farmer 

Program through 2006 and increases the share of P.L.–480 title I 

519

and title II funding which can be diverted for support of the program from 0.4 to 0.5 percent. (Section 314) 

The Conference substitute adopts the House provision, reauthorizing the program through 2007 and the Senate provision that 

increases funding for the program. (Section 3014) 

(23) Micronutrient Fortification Pilot Program 

The Senate amendment re-authorizes the micronutrient fortification pilot program. (Section 313) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

technical corrections, also adding folic acid as a fortifying element 

that can be used under the program. The US–AID sponsored ‘‘Micronutrient Assessment Project’’ study (report issued in 1999), 

found significant quality problems in fortified food aid commodities, 

including low micronutrient levels and the loss of highly labile vitamins. A US–AID-sponsored ‘‘Micronutrient Compliance Review of 

Fortified P.L. 480 Commodities’’ (report issued in 2001) found that 

while progress has been made, additional follow-up is needed to assure adequate micronutrient levels in the fortified commodities and 

to standardize procedures used to test and monitor for compliance. 

Additional concerns, such as lack of shelf-life information, 

bioavailibility and package durability have also been reported. The 

organization that conducted the 1999 and 2001 assessments uses 

an effective approach of engaging technical experts from food industries to improve the quality and nutritional content of food 

products for developing countries. This provision calls on the Administrator, in consultation with the Secretary, to use the same 

mechanism to follow-up on the 2001 compliance review recommendations to improve and assure the quality of fortified food 

aid commodities. (Section 3013) 

(24) Emerging Markets 

The House bill reauthorizes the Emerging Markets program 

through 2011, and increases the amount of assistance the Secretary shall provide for the Agricultural Fellowship Program from 

$10 million to $13 million. (Section 308) 

The Senate amendment reauthorizes the Emerging Markets 

program at current levels through 2006, but does not increase the 

amount of assistance. (Section 332) 

The Conference substitute adopts the Senate provision reauthorizing the program through 2007. (Section 3203) 

(25) Bill Emerson Humanitarian Trust 

The House bill extends the Bill Emerson Humanitarian Trust 

Act through 2011. (Section 309) 

The Senate amendment extends the Bill Emerson Humanitarian Trust Act through 2006. (Section 331) 

The Conference substitute adopts the Senate provision, reauthorizing the program through 2007. (Section 3202) 

(26) Technical Assistance for Specialty Crops 

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vides direct assistance through public and private sector projects; 

and technical assistance to remove, resolve, and/or mitigate sanitary or phytosanitary and related barriers to trade. It also gives 

priority to time sensitive and market access projects based on the 

trade effect and trade impact and authorizes $3 million annually 

from the Commodity Credit Corporation. (Section 310) 

The Senate amendment directs USDA to assist U.S. exporters 

harmed by ‘‘unwarranted and arbitrary’’ barriers to trade due to 

marketing of biotechnology products, food safety, disease, or other 

SPS concerns and authorizes appropriations of $1 million annually 

through 2006. (Section 333) 

The Conference substitute adopts the House provision, with funding provided at $2 million per year from the Commodity Credit 

Corporation. (Section 3205) 

(27) Farmers From Africa and Caribbean Basin Program 

The House bill authorizes $10 million for the President to establish and administer bilateral exchange programs whereby U.S. 

farmers and farming specialists provide technical advice and assistance to eligible farmers in Africa and the Caribbean Basin countries. (Section 311) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision, to be incorporated into the existing Farmer-to-Farmer program, authorizing appropriations, while allowing the Administrator to use up to 

five percent of those appropriated funds to cover administrative expenses in operating the program. (Section 3014) 

(28) George McGovern-Robert Dole International Food for Education 

and Child Nutrition Program 

The House bill authorizes the President to direct the provision 

of U.S. agricultural commodities and financial and technical assistance for foreign preschool and school feeding programs to reduce 

hunger and improve literacy (particularly among girls) and nutrition programs for pregnant and nursing women and young children. It also authorizes the appropriation of such sums as may be 

necessary each year through FY2011. The President has the authority to designate the administering federal agency. For this program, eligible recipients are PVO’s, cooperatives, governments and 

their agencies, and other organizations. Funds may be used to pay 

commodity transportation and storage costs, in-country activities 

that enhance the programs, and certain providers’ administrative 

expenses. The House bill specifies a list of priorities for program 

funding and provides guidelines for application process, encourages 

multilateral involvement and private sector involvement, and requires assurances that local production and marketing in recipient 

countries are not disrupted. Annual reports to Congress are required. (Section 312) 

The Senate amendment requires the establishment of an International Food for Education and Nutrition Program, as a separately funded program within the new Food for Progress title, 

whereby USDA may provide commodities and technical and nutrition assistance for programs that improve food security and enhance educational opportunities for preschool and primary school 

521

children in the recipient countries. USDA is authorized to use not 

more than $150 million per year for four years to carry out this 

program. Eligible organizations are PVO’s, cooperatives, nongovernmental organizations, or foreign countries, as determined by 

USDA. Permitted uses of funds, and various other requirements 

not specified here are the same as those that apply to Food for 

Progress activities generally. The Senate amendment includes a 

‘‘graduation requirement’’ to provide for continuation of the program when funding terminates. It also encourages other donor and 

private sector involvement and requires an annual report to Congress. (Section 325(c)) 

The Conference substitute adopts the House bill provisions, 

with the following modifications: (1) accepts Senate provisions on 

graduation; (2) accept Senate language on availability of funds for 

internal shipping, transportation, and handling costs, and (3) provides $100 million in mandatory funding for fiscal year 2003 to 

continue existing pilot projects. The program is to be named the 

McGovern-Dole International Food for Education and Child Nutrition program. (Section 3107) 

The Managers expect that mandatory funds provided for fiscal 

year 2003 will be utilized to continue the operation of projects approved under the pilot program. 

(29) Study on Fee for Services 

The House bill instructs the Secretary to report to Congress on 

the feasibility of instituting a program charging fees to cover the 

costs of services performed abroad on matters within the authority 

of the Department of Agriculture administered by the Foreign Agriculture Service. (Section 313) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with the 

clarification that the report would address the feasibility of a program that charged fees would be assessed only for services performed beyond those already provided by the Foreign Agricultural 

Service as part of an overall market development strategy for a 

particular country or region. (Section 3208) 

(30) National Export Strategy Report 

The House bill directs the Secretary to prepare a long-range 

comprehensive agricultural trade strategy and to report to the 

House Committees on Agriculture and International Relations, and 

the Senate Committee on Agriculture, Nutrition and Forestry, on 

the activities the Department of Agriculture has undertaken to implement the National Export Strategy Report. (Section 314) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision, changing the report to consultations with relevant Congressional Committees which will occur within six months of enactment, and every 

two years subsequently. (Section 3206) 

(31) Exporter Assistance Initiative 

The Senate amendment authorizes development of a federal 

website to assist aspiring exporters to learn all they need to know 

about getting started. An authorization of appropriations is proVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00525 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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vided at the following levels: $1 million for each of 2003 and 2004 

and $500,000 for 2005 and 2006. (Section 326) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision, amended to instruct the Secretary to maintain a website to assist exporters or potential exporters of U.S. agricultural products. No appropriations are authorized. (Section 3101) 

The Managers observe that knowledge about legal and regulatory requirements that apply to the export of an agricultural 

product is basic to any transaction. This applies to the country in 

which the exporter is located and the importing foreign country. 

Many countries already provide at least this much assistance to 

private exporters. In the United States, a small exporter that cannot afford to hire a trade consultant has been forced to navigate 

among numerous Federal laws and regulations that impact an export transaction. Today, the Internet provides a propitious vehicle 

for making such information accessible. The Foreign Agricultural 

Service at USDA has developed a website that provides information 

about USDA programs that may affect the exporter, recommendations on how to develop a marketing plan, and tariff and sanitary/

phyto-sanitary requirements of several countries. However the 

website does not alert the small exporter to U.S. laws such as, for 

example, the Corrupt Practices Act that may impact the export. 

Linkage to the website of the Treasury Department for detailed information about the Corrupt Practices Act is also necessary. A new 

Government website, ‘FirstGov’, provides access to the Department 

of the Treasury’s website, but the FAS website does not provide a 

link to FirstGov. 

Other U.S. agencies such as the Treasury Department’s Office 

of Foreign Assets Control and the Commerce Department’s Bureau 

of Export Administration enforce laws and regulations which bear 

on international business transactions involving agricultural products. Access to the websites of these agencies is also necessary to 

ensure that a potential or current exporter has access to a maximum amount of information relevant to the international commercial transaction. A small exporter needs more than just information 

about U.S. laws and regulations. Information about tariff and nontariff regulations of importing countries is needed. Information 

about private companies in this country and abroad that may impact a marketing plan and decision to proceed with the export 

transaction is also necessary. A new website established by USDA, 

the Export Directory of U.S. Food Distribution Companies, provides 

a good start. The Secretary of Agriculture is directed to improve 

and maintain the FAS website consistent with the requirements of 

this provision and to coordinate the content of this website with the 

agency responsible for the FirstGov website. The Secretary is further directed to improve the FAS website so that an exporter may 

connect to links with oversees governmental, private sector, and 

non-profit sector websites that provide information on market opportunities, marketing requirements and restrictions, product preferences, foreign legal considerations, and other information that 

may assist the exporter with marketing an agricultural product in 

a foreign market. 

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(32) Biotechnology and Agriculture Trade Program 

The Senate amendment requires USDA to establish a program 

to assist exporters facing problems with biotech-based agricultural 

products. The Senate amendment requires $15 million of CCC 

funding per year through 2006. (Section 333) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision establishing a stand-alone program, providing an authorization of appropriations. The provision is also revised to reflect a narrower purpose than the original Senate provision, focusing on technical assistance in addressing barriers to trade. (Section 3204) 

(33) Agricultural Trade with Cuba 

The Senate amendment strikes restrictions on private financing of sales of food and medicine to Cuba that were established in 

the FY 2001 Agricultural Appropriations bill. (Section 335) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(34) Sense of Congress Regarding Agricultural Trade 

The Senate amendment establishes Congressional priorities 

and concerns for bilateral and multilateral agricultural trade 

negations. (Section 336) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision, changing it to reflect the Sense of the Senate rather than the Congress. 

Similar priorities are also reflected in the Trade Promotion Authority bill (H.R. 3005) passed by the House in 2001. (Section 3210) 

(35) Report on Use of Perishable Commodities in Food Aid 

The Senate amendment requires the Secretary to report on 

transportation, storage, and funding deficiencies that limit the use 

of perishable and semi-perishable commodities in USDA international food aid programs. (Section 337) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision, with 

technical changes and adds a requirement to examine the cost of 

shipping live lambs and other animals for use in U.S. food aid programs. (Section 3207) 

(36) Sense of Senate Regarding Foreign Assistance Programs 

The Senate amendment notes past success of U.S. foreign assistance in helping democratize developing nations and create U.S. 

commercial customers, and urges increased role of such programs 

in countries with impoverished and disadvantaged populations that 

are the breeding grounds for terrorism. (Section 338) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision, changing it to reflect the Sense of the Congress rather than the Senate. 

(Section 3209)

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TITLE IV—NUTRITION

(1) Short Title 

The Senate Amendment names Title IV the Food Stamp Reauthorization Act of 2001. (Section 401) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4001) 

SUBTITLE A—FOOD STAMP PROGRAM

(2) Simplified Definition of Income 

The House bill adds new types of income exclusions: at state 

option, education assistance that is required to be excluded under 

its Medicaid rules; ‘‘state complementary assistance program payments’’ that are excluded under Medicaid rules; and at state option, 

any income the state does not consider when determining eligibility 

for cash assistance under its Temporary Assistance for Needy Families (TANF) program or eligibility for medical assistance under its 

Medicaid program. Under the third exclusion authority, states are 

specifically not permitted to exclude earned income, various Social 

Security Act payments (e.g., Supplemental Security Income (SSI), 

Social Security disability and retirement benefits, and foster care 

and adoption assistance payments), or other types of income the 

Secretary judges essential to equitable eligibility determinations. 

(Section 401) 

The Senate amendment adds new income exclusions: education 

assistance, ‘‘state complementary assistance program payments,’’

same as the House bill with technical differences and at state option; any types of income the state does not consider when determining eligibility for or the amount of cash assistance under its 

TANF program or eligibility for medical assistance under its Medicaid program. Under the third exclusion authority, states are specifically not permitted to exclude wages or salaries, various Social 

Security Act payments, regular payments from a government 

source (such as unemployment benefits and general assistance), 

workers’ compensation, child support payments (for the recipient), 

or other types of income the Secretary judges essential to equitable 

eligibility determinations. It is the intent of this provision to align, 

to the extent possible, with Medicaid and TANF rules and that the 

Secretary will only add additional types of income that are judged 

to be absolutely essential to make equitable determinations of eligibility in the food stamp program. (Section 412) 

The Conference substitute adopts the Senate provision. (Section 4102) 

The Managers intend that this provision will allow states to 

eliminate consideration of any types of income they do not consider 

when judging eligibility for temporary assistance to needy families 

(TANF) cash assistance or those required to be covered by Medicaid. It does not include items that are included in the definition 

of income but part of which are disregarded for the purposes of 

TANF and Medicaid by state agencies. 

525

(3) Standard Deduction 

The House bill establishes multiple standard deductions equal 

to 9.7 percent of the federal poverty income guideline amounts used 

for food stamp income eligibility determinations in FY2002. The 

new standard deductions would remain fixed over time. It also requires that the new standard deductions not be less than the current amount for each jurisdiction or greater than 9.7 percent of the 

FY2002 poverty guideline amounts for a 6-person household. In the 

case of the Virgin Islands, the new standard deductions would be 

similar to those for the 48 states and the District of Columbia. In 

the case of Guam, a special rule would maintain standard deduction levels at about twice the levels for the 48 states and the District of Columbia. (Section 402) 

The Senate amendment establishes multiple standard deductions equal to an increasing percentage of the inflation-indexed federal poverty income guideline amounts used for food stamp income 

eligibility determinations: for FY2002–FY2004, the new standard 

deductions would equal 8 percent of each year’s poverty guideline 

amounts; for FY2005–FY2007, the new standard deductions would 

equal 8.5 percent of each year’s poverty guideline amounts; for 

FY2008–FY2010, the new standard deductions would equal 9 percent of each year’s poverty guideline amounts; and for FY2011 and 

each following year, the new standard deductions would equal 10 

percent of each year’s poverty guideline amounts. The Senate 

amendment also requires that the new standard deductions not be 

less than the current amount for each jurisdiction or greater than 

the applicable percentage (noted above) of the poverty guideline 

amounts for a 6-person household. In the case of the Virgin Islands, the new standard deductions would be similar to those for 

the 48 states and the District of Columbia. In the case of Guam, 

a special rule would maintain standard deduction levels at about 

twice the levels for the 48 states and the District of Columbia. (Section 171(c)(2), replacing Section 413) 

The Conference substitute adopts the House provision with an 

amendment that sets the standard deduction equal to 8.31 percent 

of the inflation-indexed federal poverty income guideline used for 

food stamp income eligibility determinations and includes comparable provisions for the Virgin Islands and Guam. (Section 4103) 

(4) Transitional Food Stamps for Families Moving From Welfare 

The House bill provides, at state option, for 6 months of transitional food stamp benefits for families no longer eligible to receive 

Temporary Assistance for Needy Families (TANF). Households 

could receive transitional benefits for up to 6 months after termination of cash assistance, regardless of whether their certification 

period expires during the transitional period. The transitional benefit amount would be equal to the monthly allotment households 

received in the month immediately prior to termination. Households receiving transitional benefits could apply for food stamps 

under regular rules at any time during the transitional period. In 

the final month of the transitional period, states could require a 

household to cooperate in a re-determination of eligibility in order 

to receive continued benefits. 

526

Transitional benefits would not be allowed for (1) households 

sanctioned under food stamp rules for intentional program violations, failure to cooperate, failure to meet work requirements, 

transferring assets to gain eligibility, failure to perform an action 

required under a federal, state, or local means-tested public assistance program, multiple receipt of food stamp benefits, or failure to 

fulfill child-support-related requirements and (2) households sanctioned for failure to perform an action required by federal, state, 

or local law relating to TANF cash assistance. (Section 403) 

The Senate amendment permits states to provide transitional 

food stamp benefits to households who cease to receive TANF cash 

assistance. Under this option, households could receive transitional 

benefits for up to 6 months after termination of cash assistance, 

without regard to normal eligibility reviews or termination of an 

eligibility review period. During the transitional period, food stamp 

benefits generally would be frozen, without required reports of 

changed circumstances. Transitional benefits would be equal to the 

monthly allotment received in the month immediately prior to termination adjusted for (1) the change in household income because 

of termination of cash assistance and (2) any changes in circumstances that could increase household benefits (if the household 

elects to report them). In the final month of the transitional period, 

states could require a household to cooperate in a re-determination 

of eligibility in order to receive continued benefits. 

Transitional benefits would not be allowed for households (1) 

losing eligibility under food stamp rules for intentional program 

violations, failure to cooperate or meet work-requirements, postsecondary students, transferring assets to gain eligibility, failure to 

perform an action required by a means-tested assistance program, 

receipt of multiple benefits, fleeing felons, or failure to fulfill childsupport-related requirements, (2) sanctioned for failure to perform 

an action required by a federal, state, or local TANF law, or (3) in 

any state-designated category. (Section 429) 

The Conference substitute adopts the Senate provision with an 

amendment that allows households to receive transitional benefits 

for up to 5, instead of up to 6, months after termination of cash 

assistance, without regard to normal eligibility reviews or termination of an eligibility review period. In addition, transitional benefits are equal to the monthly allotment received in the month immediately prior to termination, adjusted for the change in household income because of termination of cash assistance but not adjusted for any other changes in circumstances that could increase 

household benefits and which the household may report. The Conference substitute retains the House bill language that enables 

households receiving transitional benefits to apply for food stamps 

under regular rules at any time during the transitional period. 

(Section 4115) 

(5) Quality Control Systems 

The House bill reforms the food stamp quality control program 

to require the Secretary to use a 95 percent statistical probability 

(lower bound) in calculating state error rates. States with a total 

payment error rate (lower bound) between 6 percent and the national performance measure (plus 1 percentage point) receive no 

527

special treatment, but have to develop and implement corrective action plans to reduce errors. The bill provides that, in determining 

sanctions against states for high error rates, sanctions are delayed 

until the third consecutive year in which a state’s error rate (lower 

bound) exceeds the national average error rate by more than 1 percentage point. 

Sanctions are figured as follows: First, the state’s potential 

total liability amount is calculated. This is the difference between 

its total payment error rate (point estimate) and the national performance measure plus one percentage point, multiplied by the dollar value of benefits issued in the state for the year. Then, the 

state’s actual penalty/sanction is calculated. This assessment is ‘‘scaled’’ according to how far above 10 percent the state’s total payment error rate (point estimate) is. 

The House bill also requires the Secretary to measure states’ performance with respect to (1) compliance with deadlines for 

prompt determinations of eligibility and issuance of benefits and (2) 

the percentage of negative eligibility decisions that are made correctly for each of fiscal years 2002 through 2007. It provides for 

‘‘excellence bonus payments’’ of $1 million each to (1) the 5 states 

with the highest combined performance in the 2 measures noted 

above and (2) the 5 states whose combined performance in the 2 

measures noted above is most improved for each of fiscal years 

2002–2007. (Section 404) 

The Senate amendment reforms the system that measures the 

degree to which states make erroneous eligibility and benefit decisions so that only states with serious, persistent problems would be 

sanctioned. For states with error rates below 6 percent, enhanced 

federal matching is reduced for 2001 and then discontinued in subsequent years. States with a total payment error rate between 6 

percent and the national average plus 1 percentage point would receive no special treatment. All states are required to develop and 

implement corrective action plans to reduce payment errors. Each 

year, the Secretary is required to investigate the administration of 

the food stamp program in states with a total payment error rate 

above the national average plus one percentage point, unless sufficient information is already available to review the state’s administration. A ‘‘good cause’’ exception is provided. If the investigation/

review results in a determination that the state has been ‘‘seriously 

negligent’’ (under standards promulgated by the Secretary), the 

state has to pay a fine (‘‘initial sanction’’) that reflects the extent 

of negligence (again, under standards promulgated by the Secretary) not to exceed 5 percent of the federal match for state administrative costs. States with a total payment error rate above the 

national average plus 1 percentage point are assessed fiscal penalties if they have been the subject of an investigation/review or 

sanctioned for high error rates in each of the 2 preceding years. 

This effectively sanctions states with a payment error rate above 

the national average plus 1 percentage point for 3 consecutive 

years, in the third year as in the House bill. Sanctions are figured 

in the same way as is done in the House bill. 

Beginning with error rates calculated for FY2002, the Senate 

amendment establishes in law a requirement that the Secretary 

adjust states’ total payment error rates to take into account any inVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00531 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
528

creases in errors because a state serves high percentages of households with earnings or households containing non-citizens. The adjustments are similar to those carried out under current policy for 

states subject to penalties/sanctions; however, they are somewhat 

more liberal in the measurement standard they use to identify 

states with ‘‘high’’ proportions of error-prone households, likely 

qualifying more states for an adjustment. For error rates figured 

for FY2003 and later years, additional adjustments to states’ total 

payment error rates are permitted, as the Secretary determines 

consistent with achieving the purposes of the Food Stamp Act. 

(Section 431) 

The Senate amendment beginning with FY2002, requires the 

Secretary to measure states’ performance with respect to the proportion of households with children having (a) income below 130 

percent of the federal poverty income guidelines and (b) annual 

earnings of at least half the full-time minimum wage equivalent 

who receive food stamps. Beginning with FY2002, it also requires 

the Secretary to measure states’ performance with respect to four 

additional measures established by the Secretary in consultation 

with the National Governors Association, the American Public 

Human Services Association, and the National Conference of State 

Legislatures. The additional four measures must be established not 

later than 180 days after enactment, and at least 1 measure must 

relate to the provision of timely and appropriate services to food 

stamp applicants and recipients.

In FY2003 and each following year, it requires the Secretary 

to make ‘‘high performance bonus payments’’ totaling $6 million for 

each of the 5 measures noted above. For each measure, payments 

(allocated by caseload size) are to be made to the 6 states with (1) 

the greatest improvement in performance, (2) the highest level of 

performance, or (3) a combination of greatest improvement and 

highest performance. Among the 6 states chosen for payments 

under each measure, payments are allocated according to caseload 

size. 

The Senate amendment prohibits bonus payments to states 

subject to a quality control system sanction for that fiscal year and 

it provides that the Secretary’s determinations relating to whether 

and in what amount bonus payments are made are not subject to 

judicial review. (Section 433) 

The Conference substitute adopts the Senate provisions with 

amendments. In general, the new system eliminates features of 

current law under which approximately half the states must be assessed sanctions each year, reconfigures the formula for determining sanction amounts, delays any sanctions until a state has 

shown a persistently high error rate, explicitly recognizes a policy 

for new investment in improved administration by states with high 

error rates, places some limits on the Secretary’s ability to excuse 

payment of sanctions, and replaces the current system for rewarding states with very low error rates with a requirement to pay bonuses to states that exhibit exemplary administrative performance. 

The major features of the Conference substitute are as follows. 

Threshold for potential sanctions: The threshold for sanctions 

is set at 105 percent of the national average, rather than the national average as under current law. 

529

Calculation of state error rates: A state is not considered to be 

above the threshold unless there is a 95 percent statistical certainty that the state’s error rate is truly above the threshold. 

Sanction notification and method of payment: When the Secretary determines that a state must pay a sanction, the state agency, the Governor, and the state legislature must be notified. The 

Chief Executive Officer of the state subject to a sanction must 

remit the amount of the sanction or the state’s letter of credit will 

be reduced. 

Corrective action plans: States with combined error rates of 6 

percent or more are required to provide a corrective action plan to 

the Secretary. 

Time period for sanctions: States will not have a sanction 

amount calculated until the second consecutive year in which their 

error rates exceed the threshold. If, in the following year, they still 

exceed the threshold, they will be required to pay an amount the 

Secretary has determined to be at risk. 

State liability: States’ potential liability amounts will equal 

dollar issuance multiplied by ten percent of the amount by which 

a state’s error rate exceeds a six percent threshold. Under the Conference substitute, the Secretary has the authority to resolve the 

liability (calculated for the second consecutive year in which the 

state exceeds the threshold) in one of three ways: require the state 

to reinvest up to 50 percent of the liability; hold up to 50 percent 

of the liability ‘‘at risk,’’ to be paid as a sanction by the state the 

following year only if the state’s error rate continues to exceed the 

threshold; or to waive any amount that is not reinvested or held 

at risk. If a state fails to reduce its error rate to below the threshold for a third consecutive year, it must pay its ‘‘at-risk’’ amount 

to the federal government. The Secretary may settle amounts required to be reinvested. 

Waivers, adjustments and appeals: The Secretary retains the 

authority to waive any amount of a state’s potential liability and 

to make adjustments to claims against states. States continue to 

have the full right to appeal liability amounts. 

Enhanced funding and bonus payments: Enhanced funding is 

eliminated for Fiscal Year 2003 and beyond and replaced by bonuses to states. The Secretary must issue regulations regarding the 

criteria for bonus awards for FY2005 and succeeding years. Performance criteria specified in legislation include those related to actions taken to correct errors; reduce rates of error; and improve eligibility determinations, including in the area of service delivery 

(such as timeliness and a low rate of improper denials). The Secretary is directed to solicit concrete ideas within these general 

areas from state agencies and organizations that represent state 

interests prior to issuing proposed regulations. For FY2003 and 

FY2004, the Secretary is provided the authority to issue guidance 

to the state regarding criteria for bonus awards. 

Effective dates: The new policy is effective for error rates measured in FY 2003 and sanctions and enhanced funding laws and regulations are unchanged for FY2002 and prior years. (Sections 4118 

and 4120) 

530

(6) Simplified Application and Eligibility Determination Systems 

The House bill requires the Secretary to spend up to $9.5 million to provide grants to states to develop and implement programs 

that improve the food stamp application and eligibility determination process. (Section 405) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment to establish a program of grants to states and other eligible entities to simplify food stamp application and eligibility determination systems and to improve access to the food stamp program. The Secretary would be required to fund grants totaling up 

to $5 million per year for projects: to coordinate application and eligibility procedures; establish methods for applying and determining 

eligibility that use electronic alternatives; otherwise improve program administration; or improve access to the Program. Grants 

could not be made for on-going costs and preference would be given 

to government/non-government partnerships. 

In addition to the types of projects described in the amendment, the Managers believe that other types of projects may be 

permissible under this section. These projects include but are not 

limited to: 

(a) establishing a single site at which individuals may apply 

for food stamp benefits, supplemental security income, Medicaid, 

states’ children’s health insurance program benefits, WIC benefits 

and benefits under other programs as determined by the Secretary; 

(b) developing systems to enable increased participation in the 

provision of benefits under the food stamp program through farmers’ markets, roadside stands, and other community-supported agriculture programs, including wireless electronic benefit transfer 

systems and other systems appropriate to open-air settings where 

farmers and other vendors sell directly to consumers; 

(c) encouraging consumption of fruit and vegetables by developing a cost-effective system for providing discounts for purchases 

of fruit and vegetables made through use of electronic benefit 

transfer cards; or, 

(d) reducing barriers to participation by individuals, with emphasis on working families, eligible immigrants, elderly individuals, and individuals with disabilities. 

The Conference substitute repeals existing grant authority 

(Section 17(i)), dependent on appropriations, in the expectation that 

similar grants may be made under this new authority. (Section 

4116) 

(7) Authorization of Appropriations: Employment and Training Programs 

The House bill reauthorizes the existing food stamp employment and training program through FY2011. It sets the annual 

amount of unmatched federal funds at the current FY2002 level of 

$165 million. It also preserves the current requirement to use at 

least 80 percent of unmatched federal funding for able-bodied 

adults without dependents (ABAWDs). (Section 406(a)) 

The Senate amendment extends the requirement for unmatched federal funding for employment and training programs 

531

through FY2006; and sets the basic amount of unmatched federal 

funding at $90 million a year for FY2002–FY2006. 

In addition to the basic $90 million a year, the Senate amendment requires the Secretary to allocate up to $25 million a year for 

FY2002–FY2006 to reimburse states for services to able-bodied 

adults without dependents (ABAWDs). In order to be eligible for a 

share of this unmatched funding, a state must (1) exhaust its basic 

funding allocation and (2) make and comply with a commitment to 

offer an employment/training placement (‘‘position’’) to all applicant/recipient ABAWDs who are in the last month of their 6-month 

eligibility period under ABAWD work rules and not eligible for an 

exemption. 

The Senate amendment rescinds any unmatched federal funding provided through FY2001 unless obligated by a state before enactment. However, the new $90 million basic grant money would 

remain available until expended, while the new $25 million 

ABAWD grant money would not. It also provides that the basic $90 

million a year in unmatched federal funding be allocated among 

states according to a formula established and adjusted by the Secretary that takes into account their ABAWD populations; and 

eliminates the requirement to use at least 80 percent of unmatched 

federal funding for ABAWDs. 

The Senate amendment eliminates the ‘‘maintenance of effort’’

requirement, whereby states must maintain expenditures on employment and training programs at a level not less than FY 1996 

spending in order to receive a portion of their allocation of unmatched federal funding; and eliminates the authority for the Secretary to set reimbursement levels for each qualifying employment 

and training slot that a state offers or fills. (Section 434) 

The Senate amendment eliminates the $25 per-month limit on 

the amount that states provide to participants in employment and 

training programs for transportation and other costs (other than 

dependent care costs) that are reasonably necessarily and directly 

related to their participation. (Section 169(c)(3)) It also eliminates 

the limit on federal matching payments for these costs. (Section 

169(c)(4)) 

The Conference substitute adopts the Senate provision with 

technical changes, and amendments to: provide unmatched funding 

through FY2007, reduce the allocation from ‘‘up to $25 million a 

year’’ to ‘‘up to $20 million a year’’ to reimburse states for services 

provided only to ABAWDs, and eliminate the requirement that 

states must exhaust their basic funding allocation before being eligible for a share of this unmatched funding. (Section 4121) 

(8) Authorization of Appropriations: Cost Allocation 

The House bill extends the required reduction in federal 

matching payments to states for administrative costs through 

FY2011. (Section 406(b)) 

The Senate amendment extends the required reduction in federal matching payments to states for administrative costs through 

FY2006. (Section 435(a)) 

The Conference substitute adopts the House provision with an 

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532

ing payments to states for administrative costs through FY2007. 

(Section 4122) 

(9) Authorization of Appropriations: Cash Payment Pilot Projects 

The House bill extends the authority for cash payment projects 

through FY2011, if the state requests. (Section 406(c)) 

The Senate amendment extends authority for cash payment 

projects through FY2006, if the state requests. (Section 435(b)) 

The Conference substitute adopts the House provision with an 

amendment to extend the authority for cash payment projects 

through FY2007, if the state requests. (Section 4122) 

(10) Authorization of Appropriations: Outreach Demonstration 

Projects 

The House bill extends the authority for outreach demonstration projects through FY2011. (Section 406(d)) 

The Senate amendment extends the authority for outreach 

demonstration projects through FY2006. (Section 435(c)) 

The Conference substitute repeals the authority for outreach 

demonstration projects and replaces it with new grant authority 

found in Section 4116. (Section 4122) 

(11) Authorization of Appropriations 

The House bill extends the authorization of appropriations for 

the Food Stamp Act through FY2011. This includes the food stamp 

program as well as the Food Distribution Program on Indian Reservations. (Section 406(e)) 

The Senate amendment extends the authorization of appropriations for the Food Stamp Act through FY2006. This includes 

the food stamp program as well as the Food Distribution Program 

on Indian Reservations. (Section 435(d)) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization of appropriations for the 

Food Stamp Act through FY2007. This includes the food stamp program as well as the Food Distribution Program on Indian Reservations. (Section 4122) 

(12) Puerto Rico and Territory of American Samoa 

The House bill extends Puerto Rico’s nutrition assistance block 

grant through FY2011, retaining annual indexing for food-price inflation using changes in the cost of the Thrifty Food Plan. It also 

authorizes the use of up to $6 million to pay for upgrading and 

modernizing electronic data processing systems and implementing 

systems to simplify eligibility determinations without regard to the 

regular 50 percent administrative cost matching requirement. (Section 406(f)) 

The House bill extends American Samoa’s nutrition assistance 

grant through FY2011 and increases the size of the annual grant 

to $5.75 million in FY2002 and $5.8 million a year for FYs 2003–

2011. (Section 406(g)) 

The Senate amendment consolidates funding for Puerto Rico’s 

nutrition assistance block grant and American Samoa’s nutrition 

assistance grant and establishes the consolidated ‘‘mandatory’’

grant through FY2006. The base consolidated grant amount would 

533

be $1.356 billion (FY2002), which would then be adjusted for foodprice inflation using changes in the cost of the Thrifty Food Plan 

starting with FY2003. Under the terms of the consolidated grant, 

Puerto Rico would receive 99.6 percent of the annual total. Of the 

amount paid to Puerto Rico in FY2002, up to $6 million could be 

used to pay for upgrading and modernizing electronic data processing systems, implementing systems to simplify eligibility determinations, and operating electronic benefit transfer systems without regard to the regular 50 percent administrative cost matching 

requirement. Not later than 270 days after enactment, the Senate 

amendment requires the GAO to develop and submit a report to 

Congress that: describes the similarities and differences (in program administration, rules, benefits, and requirements) between 

the regular Food Stamp program and Puerto Rico’s nutrition assistance program; specifies the costs and savings associated with each 

similarity and difference; and states the recommendation of the 

GAO as to whether additional funding should be provided to carry 

out Puerto Rico’s nutrition assistance program. Effective on the 

date of submission of the report, it authorizes additional appropriations for the new consolidated nutrition assistance block grant at 

a level of $50 million a year. 

Under the terms of the consolidated grant, American Samoa 

would receive .4 percent of the annual total. (Section 439) 

The Conference substitute adopts the Senate provision with a 

number of amendments: authorizing the consolidated grant 

through FY2007; deleting reference to the report and authorization 

for appropriations; increasing the base consolidated grant amount 

by (approximately $10 million per year for Puerto Rico) to $1.401 

billion in FY2003; allowing carryover of up to two-percent of funds; 

allowing the one-time authority to use $6 million for upgrading and 

modernizing electronic data processing systems, implementing systems to simplify eligibility determinations, and operating electronic 

benefit transfer systems without regard to the regular 50 percent 

administrative cost matching requirement, in either FY2002, 

FY2003 or in both years. (Section 4124) 

(13) Authorization of Appropriations: Assistance for Community 

Food Projects 

The House bill extends the authority for community food 

project grants through FY2011 and increases the amount reserved 

to $7.5 million a year, beginning in FY2002. (Section 406) 

The Senate amendment extends the authority for community 

food project grants through FY2006; and maintains the amount reserved at $2.5 million a year. It also increases the federal share of 

projects’ costs to 75 percent. 

The Senate amendment broadens the list of projects that must 

be given preference by: modifying the 4th preference category to 

projects that encourage long-term planning activities and multisystem, interagency approaches with multi-stakeholder collaborations, that build the long-term capacity of communities to address 

their food and agriculture problems (such as food policy councils 

and food planning associations); and adding a 5th preference category of projects that meet (through grants not exceeding $25,000 

each) specific neighborhood, local, or state food and agriculture 

534

needs including: needs for infrastructure improvement and development (purchase of equipment for production, handling, or marketing of locally produced food), needs for planning for long-term 

solutions, or needs for the creation of innovative marketing activities that mutually benefit farmers and low-income consumers. (Section 440) 

The Conference substitute adopts the House provision with amendments to increase funding for the projects to $5 million per 

year, extend the authority for community food project grants 

through FY2007, and add additional language describing other purposes for community food projects which must meet specific state, 

local, or neighborhood food and agriculture needs, including needs 

for infrastructure improvement and development; planning for 

long-term solutions; or, the creation of innovative marketing activities that mutually benefit agricultural producers and low-income 

consumers. 

The Conference substitute includes language from former Senate section 443 (‘‘Innovative Programs for Addressing Common 

Community Problems’’) as a new subsection (h) and provides funding for additional years such that not later than 90 days after enactment, and on October 1 of each of fiscal years 2003 through 

2007, the Secretary must allocate $200,000 out of the funds made 

available under this section, to implement subsection (h), and to remain available until expended. The Conference language permits 

the Secretary in selecting a non-governmental organization (NGO) 

to carry out this provision to either contract with that NGO or provide a grant to that NGO indicating the responsibilities to be completed for the $200,000. (Section 4125) 

As was the case with the Senate amendment, the Managers intend that the NGO selected by the Secretary to carry out this subsection shall: be experienced in gathering relevant information 

about successful innovative programs; be experienced in working 

with other targeted entities (NGOs, federal agencies, states, and 

political subdivisions) and be experienced in providing information 

about such innovative programs; and be experienced in operating 

a national information clearinghouse. In addition, the Managers intend that the NGO selected under subsection (h) shall contribute 

in-kind resources toward implementation of any contract or grant 

and should be prepared to coordinate with targeted entities and 

with the Community Food Security Coalition. 

(14) Authorization of Appropriations: Availability of Commodities 

for Emergency Food Assistance Programs

The House bill extends the requirement to purchase commodities for The Emergency Food Assistance Program (TEFAP) 

through FY2011 and increases to $140 million a year through 

FY2011 the amount of commodities the Secretary must purchase 

for TEFAP. Beginning in FY2002, the House bill requires the Secretary to use $10 million a year of the TEFAP funds to pay for direct and indirect costs related to processing, storing, transporting, 

and distributing commodities, including gleaned commodities. (Section 406(i)) 

The Senate amendment extends the requirement to purchase 

commodities for TEFAP through FY2006 and increases the amount 

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reserved for TEFAP to $110 million a year for FY2002–2006. The 

provision setting aside $10 million a year is the same as the House 

bill, but through FY2006. (Section 441) 

The Conference substitute adopts the House funding level of 

$140 million a year with an amendment extending the purchasing 

requirement through FY2007, eliminating the $10 million a year 

set-aside, and increasing the authorization of appropriations from 

$50 million to $60 million a year for direct and indirect costs related to processing, storing, transporting, and distributing commodities, including gleaned commodities. (Section 4126) 

SUBTITLE B—COMMODITY DISTRIBUTION

(15) Distribution of Surplus Commodities to Special Nutrition 

Projects 

The House bill extends this requirement through FY2011. (Section 441) 

The Senate amendment reauthorizes the commodity distribution program through FY2006. (Section 451(c)) 

The Conference substitute adopts the Senate provision with an 

amendment to reauthorize the program through FY2007. (Section 

4203) 

(16) Commodity Supplemental Food Program 

The House bill reauthorizes the commodity supplemental food 

program through FY2011. (Section 442) 

The Senate amendment reauthorizes the commodity supplemental food program through FY2006. (Section 451(a)) 

The Senate amendment also replaces the current rule limiting 

administrative payments to 20 percent of the Commodity Supplemental Food Program (CSFP) appropriation with a requirement for 

‘‘grants per caseload slot.’’ The amendment requires the Secretary 

to provide each state CSFP agency (from discretionary funds for 

the current year or carried over) an administrative grant per assigned caseload slot, as follows: for FY2003, the grant would be $50 

per assigned caseload slot adjusted for the percentage change in 

the state and local government price index of the Bureau of Economic Analysis between the 12-month period ending June 30, 2001, 

and the 12-month period ending June 30, 2002. For later years, the 

per-slot grant would be adjusted in the same manner. (Section 

451(b)) 

The Conference substitute adopts the Senate provision with 

amendments reauthorizing the program through FY2007; requiring 

the Secretary to use the FY2001 fiscal year grant-per-assigned slot 

as the baseline from which the administrative cost grant per assigned caseload slot is calculated, rather than using $50 as the 

base; requiring the Secretary to spend the amount necessary to 

permit all states that began to participate in the Commodity Supplemental Food Program in the FY2000 caseload cycle to participate at a caseload level not less than their originally assigned caseload through the FY2002 caseload cycle, as determined by the Secretary. Funding from the Commodity Credit Corporation (CCC) is 

provided to permit the Secretary to alleviate an unusual situation 

that has arisen in two states that have recently implemented the 

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CSFP. This is a one-time emergency use of CCC funds and is not 

intended as a precedent for drawing on the CCC to supplement appropriations for the CSFP. (Section 4201) 

(17) Emergency Food Assistance 

The House bill reauthorizes TEFAP administrative cost appropriations through FY2011 and revises the definition of costs to be 

covered to include the costs to the states related to the processing, 

storage, transporting, and distributing commodities. (Section 443) 

The Senate amendment reauthorizes TEFAP administrative 

cost appropriations through FY2006 and revises the definition of 

costs to be covered to include the costs to the states related to the 

processing, storage, transporting, and distributing commodities. 

(Section 451(d)) 

The Conference substitute adopts the House provision with an 

amendment to reauthorize TEFAP administrative costs through 

FY2007. (Section 4204) 

SUBTITLE C—MISCELLANEOUS PROVISIONS

(18) Hunger Fellowship Program 

The House bill establishes an independent agency of the Legislative Branch of the U.S. government, the Congressional Hunger 

Fellows Program. (Section 461) 

The Senate amendment establishes a Congressional Hunger 

Fellowship. This formalizes an internship program already being 

carried out by the Congressional Hunger Center and funded under 

annual appropriations bills. (Section 462) 

The Conference substitute adopts the House provision but deletes a reference to ‘‘a commitment to social change’’ as a required 

attribute for fellows. In addition, it directs the program to make 

available to the General Accounting Office the salaries of the Executive Director and personnel, in addition to the other materials already included, to carry out audits. (Section 4404) 

(19) General Effective Date 

The House bill designates that the amendments made by this 

title shall take effect on October 1, 2002, unless otherwise specified. (Section 462) 

The Senate amendment designates that the amendments made 

by this title shall take effect on September 1, 2002, except that a 

state agency may elect to implement any or all of the amendments 

on October 1, 2002. (Section 464) 

The Conference substitute adopts the House provision. (Section 

4405) 

(20) Payment Limitations; Nutrition and Commodity Programs 

The Senate amendment increases the cap on the amount that 

may be claimed as an excess shelter expense deduction. For 

FY2003, the cap would be $390 a month for the 48 states and the 

District of Columbia, $624 for Alaska, $526 for Hawaii, $458 for 

Guam, and $307 for the Virgin Islands. For FY2004–FY2009, 

amounts would be annually adjusted for changes in the Consumer 

537

Price Index for All Urban Consumers (CPI–U). Effective, FY2010, 

the cap is eliminated. (Section 169(c)(2)) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(21) Encouragement of Payment of Child Support 

The Senate amendment permits states to (1) exclude completely from a household’s counted income any legally obligated 

child support payments made by a household member (before calculating any deductions) or (2) continue to deduct them in the calculation of net income (as under current law). Regardless of a 

state’s exclusion or deduction choice, the Senate amendment requires the Secretary to establish simplified procedures that allow 

a state option to determine the amount of child support paid. These 

must include procedures that permit states to rely on information 

from state child support enforcement agencies about payments 

made in prior months in lieu of obtaining current information from 

the household. The amendment also allows states to freeze the 

amount of any child support payment exclusion or deduction until 

the eligibility of the household is re-determined. (Section 411) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

technical amendment and an amendment that deletes the state option to freeze the amount of child support payment exclusion or deduction. In addition, states are allowed to rely on information from 

child support enforcement agencies about payments made in prior 

months. (Section 4101) 

(22) Simplified Determination of Housing Costs 

The Senate amendment mandates that states treat any required payment to a landlord as a housing or shelter cost when determining a household’s shelter expenses for application of the excess shelter expense deduction. The payments are included without 

regard to the specific charges they cover. It also permits states to 

allow homeless households not receiving free shelter throughout 

the month to choose a standard shelter deduction from income (set 

by law at $143 a month) in lieu of any excess shelter expense deduction. States could deny this deduction to households with extremely low shelter costs. Homeless households would continue to 

be permitted to choose the regular excess shelter expense deduction 

that is based on actual shelter costs. (Section 414) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that strikes the section mandating that states treat 

any required payment to a landlord as a housing or shelter cost 

when determining a household’s shelter expenses for application of 

the excess shelter expense deduction. It does, however, permit 

states to allow homeless households not receiving free shelter 

throughout the month to receive a standard deduction from income 

in lieu of any excess shelter expense deduction. 

The Conference substitute deletes the Senate provision that allows all required payments to landlords to count as eligible shelter 

costs for the purpose of calculating a food stamp excess shelter expense deduction. The Secretary should review current rules govVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00541 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
538

erning allowable shelter costs and their implementation and identify any means, within existing authority, to modify or communicate these rules in a manner that makes the determination of eligible shelter costs less complicated and error prone for food stamp 

participants and eligibility workers. (Section 4105) 

(23) Simplified Utility Allowances 

The Senate amendment allows states choosing to make standard utility allowances (SUAs) mandatory to do so without regard 

to the current metered public housing and prorating rules. SUAs 

could be used in lieu of actual costs for all households incurring a 

heating or cooling expense and covered by a mandatory SUA without having to determine their utility metering status or prorated 

expenses. (Section 415) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4104) 

(24) Simplified Procedure for Determination of Earned Income 

The Senate amendment allows states to elect to determine 

monthly-earned income by multiplying weekly income by 4 and biweekly income by 2. The amendment requires states making this 

election to adjust the earned income deduction (normally 20 percent of earnings) downward for all households with earnings to the 

extent necessary to prevent the election from resulting in increased 

benefit costs consistent with standards promulgated by the Secretary. (Section 416) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(25) Simplified Determination of Deductions 

The Senate amendment establishes a state option to disregard 

most types of changes in household circumstances that affect the 

amount of those deductions until the next determination of eligibility. The amendment makes clear that states are not permitted 

to disregard (1) any reported change in residence or (2) under 

standards prescribed by the Secretary, any change in earned income. (Section 417) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. States 

will be able to disregard changes in: household size; the costs for 

dependent care; the amount of child support payments; medical expenses for elderly or disabled individuals; and shelter costs, unless 

they were the result of a move. (Section 4106) 

(26) Simplified Definition of Resources 

The Senate amendment requires the Secretary to promulgate 

regulations under which a state may exclude any types of financial 

resources that it does not consider when determining eligibility for 

cash assistance under its TANF program, or medical assistance 

under its Medicaid program. This authority would not allow the exclusion of cash, vehicles (except to the extent states already are allowed to use their TANF standard to exclude vehicles), and readily 

available amounts in any account in a financial institution, or any 

539

similar type of resource the Secretary judges essential to equitable 

determinations of eligibility. The intent of this provision is to align 

with, to the extent possible, Medicaid and TANF rules. The Secretary will only count types of resources that are required by law 

or judged to be absolutely essential to equitable determinations of 

eligibility in the food stamp program. (Section 418) 

The Senate amendment also adds households with disabled 

members to those covered by the current $3,000 liquid asset limit 

applied to the elderly. (Section 171(c)(1)) 

The House bill contains no comparable provisions. 

The Conference substitute adopts the Senate provisions. (Section 4107) 

(27) Alternative Issuance Systems in Disasters 

The Senate amendment allows the Secretary to adjust issuance 

systems in disaster situations to take into account any conditions 

that make reliance on EBT systems impracticable, effectively permitting the issuance of cash or other forms of benefits. (Section 

419) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4108) 

The Managers expect the authority provided in this section for 

alternative issuances in disaster programs will only be used in the 

most extreme circumstances, after the Secretary, working with the 

state, has exhausted all other means of benefit delivery and determined that electronic systems cannot be restored in a timely fashion and that the use of food coupons is impractical. 

(28) State Option to Reduce Reporting Requirements 

The Senate amendment allows states to establish semi-annual 

reporting requirements for any household, independent of the presence of earners or other characteristics. However, households required to report less often than once each 3 months are required 

to report, in a manner prescribed by the Secretary, if their income 

exceeds the food stamp gross income eligibility limit (130 percent 

of the federal poverty income guidelines). (Section 420) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4109) 

(29) Benefits for Adults Without Dependents 

The Senate amendment changes the ‘‘3-months-out-of-36 

months’’ rule to make able-bodied adults without dependents 

(ABAWDs) ineligible if, during the preceding 24 months they received benefits for 6 months while not meeting work-related requirements. ABAWDS ineligible under this new ‘‘6-months-out-of24-months’’ rule may become eligible during any period in which 

they work 20+ hours a week, participate in a work program 20+ 

hours a week, or participate in a workfare program. In implementing the new ‘‘6-months-out-of-24-months’’ rule, states are required to disregard any period before enactment during which an 

individual received food stamps. 

540

The Senate amendment changes the definition of a qualifying 

work program to include job search or job search training programs 

if (1) they meet standards set by the Secretary to ensure that participants are continuously and actively seeking private-sector employment and (2) no position is available for the participant in another employment or training program. (Section 421) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(30) Preservation of Access to Electronic Benefits 

The Senate amendment requires that no benefits provided 

through EBT systems be taken ‘‘off-line’’ (or otherwise made inaccessible) because of inactivity until at least 180 days have elapsed 

since the recipient household last accessed the account. Where benefits are taken off-line or made inaccessible, it requires that the 

household be sent a notice that explains how to reactivate benefits 

and offers assistance if the household is having difficulty doing so. 

These requirements apply to states as they enter into EBT contracts. (Section 422) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(31) Cost Neutrality for Electronic Benefit Transfer Systems 

The Senate amendment eliminates the current requirement 

that EBT systems not cost the federal government more than the 

prior paper issuance systems. (Section 423) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4110) 

The Managers encourage the Department to continue its cost 

containment and competition efforts and its efforts to work with 

the states on this issue. Information about these efforts will be provided in the report detailed in Section 4110. 

(32) Alternative Procedures for Residents of Certain Groups’ Facilities 

The Senate amendment provides a state option that allows the 

provision of an inflation-adjusted standardized monthly benefit to 

residents of group homes, rather than going through the individualized benefit calculation for each resident. The group homes that 

are eligible include those for the disabled; shelters for battered 

women/children or the homeless, and substance abuse treatment 

centers. Recipients’ benefits are calculated according to standardized procedures established by the Secretary and take into account 

benefits typically received by recipients in these group living facilities. 

States shall issue benefits to the facility (as an authorized representative), and the Secretary shall establish procedures to ensure 

that the facility does not receive a greater proportion of a recipient’s monthly benefits than the proportion of the month during 

which the recipient lived there. 

Group living facilities are required to (1) notify the state when 

a recipient departs and (2) notify the recipient that the recipient 

541

is eligible for continued benefits and should contact the state about 

continuation of benefits. 

On receiving notification that a recipient has departed a group 

living facility, the state is required to issue the recipient a benefit 

allotment covering the remainder of the month (calculated in a 

manner prescribed by the Secretary) unless the recipient re-applies 

for food stamps or the state cannot locate the recipient. The state 

also is permitted to issue a benefit allotment for the month following departure calculated under the standardized procedures 

used to set the amount received while the departed recipient lived 

in the group living facility. Recipients who have left group facilities 

and re-apply for food stamps will have their benefits determined 

under regular food stamp rules. (Section 424)

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to convert this provision to a pilot program that tests, 

at the request of a state agency or state agencies, the feasibility of 

the alternative procedures for determining allotments for residents 

of groups living in certain group facilities. If an insufficient number 

of pilot projects are proposed by state agencies or the Secretary 

concludes that this is not in the best interest of the food stamp program, the Secretary must inform the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture, and will not implement this provision nationwide. (Section 

4112) 

(33) Redemption of Benefits Through Group Living Arrangements 

The Senate amendment allows the Secretary to authorize 

group living facilities to redeem food stamp benefits through direct 

use of EBT cards, if they are equipped with ‘‘point-of-sale’’ devices. 

This provision allows authorized group living facilities to continue 

a practice they have been carrying out using waiver authority. 

(Section 425) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4113) 

(34) Availability of Food Stamp Program Applications on the Internet 

The Senate amendment requires states to make food stamp applications available on their agencies’ Internet websites in each 

language in which printed applications are available. (Section 426) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to change the effective date for this provision to 18 

months after enactment of this Act. Section 504 of the Rehabilitation Act requires state agencies to make their web sites accessible 

to people with disabilities. The requirement includes ensuring that 

documents are in a format in which browsers for the visually impaired can read them, and that they can be converted to Braille 

documents; that graphic elements that convey meaning have text 

explanations available; and that English language text is also 

available in other languages, as appropriate. Many states have already adopted standards that comply with this requirement. States 

542

should, therefore, not incur additional costs to put their food stamp 

application forms on their web sites. (Section 4114) 

(35) Simplified Determinations of Continuing Eligibility 

The Senate amendment provides for procedures for re-determining recipient households’ continuing eligibility that are consistent with re-determination procedures in other programs serving 

low-income families. It replaces assigned certification periods and 

the rules governing recertification with new ‘‘eligibility review periods’’ under which states periodically review the eligibility status of 

recipient households. Eligibility review periods are up to 12 months 

(or 24 months if all adult household members are elderly or disabled), and states are required to have at least 1 contact with each 

household every 12 months. Eligibility review periods are not necessarily assigned to each household when their eligibility is established. Instead, states are mandated to periodically require each 

household to cooperate in a re-determination of eligibility. Each redetermination is based on information supplied by the household 

and has to conform to standards established by the Secretary, and 

the interval between redeterminations cannot exceed 12 or 24 

months. Where households are found ineligible (or eligible for a reduced amount) in their re-determination, they can continue to receive benefits until the conclusion of any fair hearing process. (Section 427) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(36) Clearinghouse for Successful Nutrition Education Efforts 

The Senate amendment requires the Secretary to (1) ask states 

for descriptions of successful nutrition education programs for the 

food stamp and other nutrition assistance programs, (2) make them 

available on the Agriculture Department’s website, and (3) inform 

states of their availability on the website. (Section 428) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. In 

March 2002, the U.S. Department of Agriculture unveiled a 

Website that features a clearinghouse for nutrition education efforts described in the Senate amendment. 

(37) Delivery to Retailers of Notices of Adverse Action 

The Senate amendment permits notices of adverse action 

against retailers to be delivered by any form of delivery that the 

Secretary determines will provide evidence of delivery. (Section 

430) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4117) 

(38) Improvement of Calculation of State Performance Measures 

The Senate amendment changes the deadline for completion of 

error-rate determinations and arbitration of state-federal differences to May 31st; it also changes the deadline for the determination of final error rates and claims against states to June 

30th. (Section 432) 

543

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4119) 

(39) Coordination of Program Information Efforts 

The Senate amendment permits states to use Temporary Assistance for Needy Families (TANF) funds to conduct food stamp 

information informational activities. (Section 436) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

The Managers understand that, to further the purposes of 

TANF, it is current policy to allow states to use TANF (and ‘‘maintenance of effort’’) funds for food stamp informational activities directed to families, as long as they do not also charge these same 

costs to the food stamp program. The Managers expect the Secretary and the Secretary of Health and Human Services to issue 

guidance that clearly informs states of this policy. 

(40) Expanded Grant Authority 

The Senate amendment extends the Secretary’s waiver authority to cover any and all contracts and grants authorized under this 

section. (Section 437)

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4123) 

(41) Access and Outreach Pilot Programs 

The Senate amendment requires the Secretary to make grants 

to states and other entities to pay the federal share (75 percent) 

of the cost of projects to improve access to food stamp benefits or 

outreach to eligible individuals. It authorizes appropriations totaling $3 million for FY2003–FY2005 for pilot programs and requires 

the Secretary to evaluate funded projects, but limits spending on 

evaluations to no more than 10 percent of funds made available. 

Criteria for selecting grantees are to be developed by the Secretary 

and include a record of serving low-income individuals, ability to 

reach hard-to-serve populations, innovative proposals in the application, and the development of public-private partnerships and 

community linkages. Preference is required for project partnerships 

between states and private/public entities (e.g., food banks, community-based organizations, public schools and health clinics, nonprofit health or welfare agencies). At least 1 grantee has to be selected from each Food and Nutrition Service (FNS) region and additional rural or urban areas chosen by the Secretary. The Secretary is not required to select grantees where an insufficient number of applications have been received. (Section 438) 

The House bill contains no comparable provision. 

The Conference substitute combines Section 405 of the House 

Bill with Section 438 of the Senate amendment, as described in 

Section 4116: ‘‘Grants for simple application and eligibility determination systems and improved access to benefits.’’

544

(42) Use of Approved Food Safety Technology 

The Senate amendment bars the Secretary from prohibiting 

the use of ‘‘any technology that has been approved by the Secretary 

or the Secretary of Health and Human Services’’ in acquiring commodities for distribution through TEFAP, the Food Distribution 

Program on Indian Reservations (FDPIR), the Commodity Supplemental Food Program (CSFP), and programs under the Richard B. 

Russell National School Lunch Act and the Child Nutrition Act. 

This bar is effective on enactment. (Section 442) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

technical amendment that clarifies that the Secretary cannot prohibit the use of any technology to improve food safety that has been 

approved or is otherwise allowed by the Secretary or the Secretary 

of Health and Human Services. In implementing this provision, the 

Secretary is not expected to set aside established, well-founded procurement practices. (Section 4201) 

The Managers expect the Secretary to continue to make commodity purchases, taking into consideration the acceptability by recipients of products purchased and considering the relative costs of 

products available for purchase. 

(43) Innovative Programs Addressing Common Community Problems 

The Senate amendment requires the Secretary to offer a contract to a non-governmental organization to coordinate with federal 

agencies, states, political subdivisions, and nongovernmental organizations (‘‘targeted entities’’) to develop, and recommend to the 

targeted entities, innovative programs for addressing ‘‘common 

community problems’’ including loss of farms, rural poverty, welfare dependency, hunger, the need for job training, juvenile crime 

prevention, and individuals’ and communities’ need for self-sufficiency. The organization must be selected competitively and must 

(1) be experienced in working with targeted entities and organizing 

workshops that demonstrate programs to targeted entities, (2) be 

experienced in identifying programs that effectively address ‘‘common community problems,’’ (3) agree to contribute in-kind resources and provide targeted entities information free of charge, (4) 

be experienced in and capable of receiving information from (and 

communicating with) targeted entities throughout the U.S., and (5) 

be experienced in operating a national information clearinghouse 

that addresses ‘‘common community problems.’’ It also makes available to the Secretary mandatory funding totaling $400,000 to carry 

out the contract in two installments effective on enactment. 

This Senate provision was based in part on a project (called 

‘‘Reinvesting in America’’) in which a non-profit group 

headquartered in New York, called World Hunger Year, gathered 

information about successful innovative local programs and then 

advised other NGOs, communities, or city, state or federal agencies 

(targeted entities) about these successful projects and about how to 

replicate them. This turned out to be a very efficient approach because other communities or agencies would be aware of the lessons 

learned by the community that originated the idea. World Hunger 

Year held ‘‘replication workshops’’ in which they advised these tarVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00548 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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geted entities about how to replicate those successful programs in 

other areas. World Hunger Year officials also provided information 

about some of these programs to the Community Food Security Coalition and to federal Departments. (Section 443) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. The 

Conference substitute includes a variation of this provision in 

House Section 440, as described in Section 4125. 

(44) Report on Use of Electronic Benefit Transfer Systems 

The Senate amendment requires the Secretary to submit a report to Congress on (1) difficulties relating to use of EBT systems, 

(2) the extent of fraud and the types of fraud that exist, and (3) 

the efforts being made by the Secretary, retailers, EBT contractors, 

and states to address difficulties and fraud in EBT systems. The 

report is due no later than one year after enactment. (Section 444) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that changes the elements to be included in the report. 

The report will include: a description of the status of statewide 

EBT implementation in the food stamp program; an indication of 

the number of vendors that currently hold an EBT-related contract 

with the states; information on the number of states that are working with multiple vendors and a description of how responsibilities 

are divided among the various vendors and other organizations 

within a given state; an explanation of the reasons any state is not 

operational statewide by October 1, 2002, how these issues are 

being addressed, and the expected date for statewide EBT operations; a description of the issues faced by any states that have 

awarded a second EBT contract in the last two years and the steps 

taken to resolve them; a description of the issues faced by any 

states that will award a second EBT contract within the next two 

years and strategies they are considering to address these issues; 

initiatives being considered or taken by USDA, food retailers, EBT 

vendors, and client advocates to address any outstanding issues 

with respect to EBT systems; and an examination of areas of potential advances in electronic benefit delivery in the next 5–10 years 

including but not limited to access to electronic benefits in farmers’

markets, increased use of EBT transaction data to identify and 

prosecute fraud, and the fostering of increased EBT vendor competition to ensure cost-containment and optimal service. (Section 

4111) 

(45) Vitamin and Mineral Supplements 

The Senate amendment adds dietary supplements that ‘‘provide exclusively 1 or more vitamins or minerals’’ to the food items 

that may be purchased with food stamp benefits. 

Not later than April 1, 2003, the amendment requires the Secretary to contract with a scientific research organization to study 

and develop a report on technical issues, economic impacts, and 

health effects associated with allowing individuals to use food 

stamp benefits to purchase dietary vitamin-mineral supplements. 

The report is to be submitted to the Secretary no later than 2 years 

after the contract is entered into. The Senate amendment authorVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00549 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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izes $3 million for the report. At a minimum, the report is to examine: the extent to which problems arise in the purchase of vitaminmineral supplements with EBT cards; the extent of any difficulties 

in distinguishing vitamin-mineral supplements from herbal and botanical supplements (for which food stamp benefits may not be 

used); whether recipients spend more on vitamin-mineral supplements than non-recipients; the extent to which vitamin-mineral 

supplements are substituted for other foods purchased with food 

stamp benefits; the proportion of the average food stamp allotment 

that is being used to purchase vitamin-mineral supplements; and 

the extent to which the quality of recipients’ diets has changed as 

the result of allowing them to use food stamp benefits to purchase 

vitamin-mineral supplements. (Section 445) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(46) Partial Restoration of Benefits to Legal Immigrants 

The Senate amendment makes legal permanent residents 

under age 18 eligible for food stamps without regard to date of 

entry. It also exempts them from requirements that their sponsors’ financial resources be deemed to them in determining food stamp 

eligibility. The Senate amendment also reduces the work history 

requirement for legal permanent residents’ eligibility for food 

stamps to 16 quarters (4 years); removes the 7-year limit on eligibility for refuges and people seeking asylum, Cuban/Haitian entrants, certain aliens whose deportation is being withheld for humanitarian reasons, and Vietnam-born Americans fathered by U.S. 

citizens; and makes eligible legal permanent residents receiving 

government disability benefits regardless of date of entry so long 

as they meet any non citizen test applied by the program under 

which they receive benefits. (Section 452) 

Effective April 1, 2003, the Senate amendment makes eligible 

individuals who have continuously resided in the U.S. as ‘‘qualified 

aliens’’ for a period of 5 years or more beginning on the date on 

which the qualified alien entered the U.S. However, eligibility 

based on this new 5-year residence rule would not apply in the case 

of an alien who enters the country illegally and remains illegally 

for a period of one year or more (or has been an ‘‘illegal alien’’ for 

one year or more) unless the alien has continuously resided in the 

U.S. for a period of 5 years or more as of the ‘‘date of enactment.’’

(Section 170(b) and (c)) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that eliminates the provision that restricts application 

of the new 5-year residence rule by denying it to aliens who enter 

the country illegally and remain illegally for a period of one year 

or more. The substitute also eliminates the provision that changes 

the work history requirement provision for legal permanent residents’ from 40 quarters (in current law) to 16 quarters and the removal of the 7-year limit on the length of time that refugees and 

people seeking asylum may participate in the program. The Managers note that application of the new 5-year residence rule to refugees and asylees has the same effect as lifting the 7-year limit. 

(Section 4401) 

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(47) Commodities for School Lunch Programs 

The Senate amendment extends, until FY2004, provisions of 

current law that remove a mandate that any ‘‘bonus’’ commodities 

acquired for agricultural support purposes and donated to schools 

be counted toward a minimum requirement that 12 percent of all 

school lunch assistance be in the form of commodities. The provision, therefore, mandates that only entitlement commodities count 

toward the 12 percent requirement through FY2003. (Section 453) 

The House bill contains no comparable provisions. 

The Conference substitute adopts the Senate provision. (Section 4301) 

(48) Eligibility for Free and Reduced-Price School Meals: Military 

Housing 

Effective on enactment and through FY2003, the Senate 

amendment requires that, in cases where military personnel live in 

‘‘privatized’’ housing, their housing allowance not be counted as income in determining eligibility for free and reduced-price school 

meals. (Section 454) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4302) 

(49) Eligibility for Assistance Under the Special Supplemental Nutrition Program From Women, Infants, and Children 

Effective on enactment, the Senate amendment adds an option 

for states to exclude any housing allowance in cases in which military personnel live in ‘‘privatized’’ housing whether on base or off 

base. (Section 455) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4306) 

(50) Report on Conversion of the WIC Program Into an Individual 

Entitlement Program 

The Senate amendment requires, no later than December 31, 

2002, a report from the Secretary to the House Committee on Education and the Workforce and the Senate Committee on Agriculture, Nutrition, and Forestry that analyzes the conversion of the 

WIC program from a discretionary program into an individual entitlement program. It also requires the Secretary to use funds made 

available to carry out the WIC program to fund the cost of the report. (Section 456) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate amendment. 

The Managers expect that, in preparation for child nutrition 

programs’ reauthorization in FY2003, the Department will work 

with the Congressional Budget Office, the Office of Management 

and Budget and others to review the current WIC funding approach and alternative approaches to ensure an appropriate level 

of funding is available throughout the fiscal year. Also in preparation for this legislation, the Managers encourage the continued development, refinement, and testing of a national standard for WIC 

electronic benefit transfer (EBT) transactions. The Managers enVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00551 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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courage the completion of work on a national standard for WIC 

EBT transactions prior to WIC reauthorization. 

In addition, the Managers understand that several states differentiate between 100 percent fruit juice and blended 100 percent 

fruit juices in formulating an approved WIC list. The Managers are 

aware that a number of factors are considered by a state when selecting products for its approved WIC list. The Managers encourage 

states not to limit the availability of eligible food choices of WIC 

participants, and strongly urge states to evaluate objectively the 

merits of WIC-eligible food products. The Managers encourage the 

Department to provide guidance to the states, making them aware 

that blended 100 percent fruit juices are permissible WIC products. 

(51) Use of Commodities for Domestic Feeding Programs 

The Senate amendment provides that, notwithstanding any 

provision of law concerning commodity donations, any commodities 

acquired in the conduct of CCC operations and any ‘‘Section 32’’ commodities may be used for any domestic feeding program involving acquisition and use of commodities. This authority applies to 

the extent that the commodities involved are in excess of quantities 

needed to carry out other obligations (including quantities otherwise reserved for a specific purpose). The domestic feeding programs covered by this authority include TEFAP, and programs authorized under the Richard B. Russell National School Lunch Act, 

the Child Nutrition Act, the Older Americans Act, or other laws the 

Secretary determines appropriate. (Section 457) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 4202) 

The Managers recognize that, under current law, the source of 

funding for the purchase of a particular commodity can limit the 

eligible recipient programs. As a result, distribution of commodities 

to the Department’s School Nutrition Programs and other domestic 

programs has sometimes been difficult or prevented entirely. The 

limitation in the current law has stymied the two-fold purposes of 

commodity purchases—to support American agriculture and to provide nutritious foods through our domestic feeding programs. For 

purposes of this distribution authority, the Managers consider eligible excess commodities to be those that are purchased by the Commodity Credit Corporation or by the Secretary and remain available after all other authorized distributions, including distribution 

of specific quantities reserved for specific purposes, have been satisfied. This section allows more efficient, expeditious and direct distribution of excess commodities by expanding the Secretary’s existing distribution authorities. 

(52) Purchase of Locally Produced Foods 

The Senate amendment requires the Secretary to: encourage 

institutions participating in the School Lunch and Breakfast programs to purchase locally produced foods, to the maximum extent 

practicable and appropriate and in addition to other food purchases; advise these institutions of the locally produced food policy; 

and provide start-up grants to up to 200 institutions to defray initial costs of equipment, materials, storage facilities, and similar 

549

costs incurred in carrying out the locally produced food policy. Also 

it authorizes appropriations of $400,000 a year for FY2002– FY2006. (Section 458) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. 

The intent of the Managers is to authorize the Secretary to 

award modest start-up grants for equipment, materials and similar 

costs associated with purchasing locally produced foods. It is not 

the intent to create a geographical preference for purchases of locally produced foods or purchases made with grant funds. All purchases are to be made competitively, consistent with federal procurement laws and regulations. 

The Conference substitute also includes an amendment that 

treats Puerto Rico in the same way as Hawaii is treated under the 

Buy America provision in the National School Lunch Act. It extends, to the extent practicable, an advantage of domestic grown or 

produced products over foreign products, to Puerto Rico for purposes of the School Lunch Program. The Buy America provision 

originally applied only to the 48 contiguous states with the later 

addition of Hawaii. 

The Managers want to make clear that school food authorities 

are still required to follow federal procurement rules calling for free 

and open competition and limit local product purchases to those 

that are practicable. Furthermore, while products from Puerto Rico 

will have an advantage over foreign products, this provision will 

not give an advantage to products produced or grown in one of the 

48 contiguous states or Hawaii. (Section 4303) 

(53) WIC Farmers’ Market Nutrition Program 

The Senate amendment makes available an additional $15 million in mandatory funding for the WIC farmers’ market nutrition 

program no later than 30 days after enactment. (Section 460) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment providing that funding for the program is made available out of the Commodity Credit Corporation. This emergency allocation of CCC funding to the WIC farmers’ market nutrition program is made to meet a one-time shortfall and is not intended to 

set a precedent for the use of CCC resources to support the WIC 

farmers’ market nutrition program. (Section 4307) 

(54) Fruit and Vegetable Pilot Program 

The Senate amendment requires the Secretary to use ‘‘Section 

32’’ funds to conduct a pilot program to make free fruits and vegetables available to students in 25 schools in each of four states and 

students in schools on one Indian reservation, in the 2002–2003 

school year. It also requires an evaluation of the pilot to determine 

whether students take advantage, whether interest increased or 

lessened over time, and what effect the pilot has on vending machine sales and sales of school meals. The Secretary is required to 

use $200,000 in ‘‘Section 32’’ funds to carry out the evaluation. The 

evaluation is to be conducted through the Economic Research Service and submitted to the House Committee on Education and the 

Workforce and the Senate Committee on Agriculture, Nutrition, 

550

and Forestry not later than one year after implementation of the 

pilot program. (Section 461) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments: The pilot will begin in July 2002 and last one year; 

free fresh and dried fruits and fresh vegetables will be made available throughout the school day in one or more areas designated by 

the school; not later than one year after the implementation of the 

pilot program, the Secretary (acting through the Economic Research Service) shall report to the Committee on Education and the 

Workforce of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate, the results of 

the pilot program; $6 million of Section 32 funds shall be made 

available to carry out this pilot program. (Section 4305) 

The Managers agree that the intent of the pilot program is to 

determine the feasibility of carrying out such a program and its 

success as determined by the students’ interest in participating in 

the program. The Managers encourage USDA to work with the 

schools to collect information on the types of schools that ultimately participate in the program, how schools choose to implement the program (including information on whether or not they 

incorporate nutrition education), and reasons for different implementation approaches. The Department is encouraged to find out 

from the schools about lessons learned and whether or not (and 

why) they are interested in continuing to participate in a similar 

program. To the extent practical, the Department is also asked to 

find out from teachers and/or students about students’ attitudes 

and actual behavior over the course of time. The Managers recommend the selection of the following four states to participate in 

the pilot: Indiana, Iowa, Michigan, and Ohio. The Secretary will select the Indian reservation and the schools within each of the 

states that will participate in the pilot project. 

(55) Nutrition Information and Awareness Pilot Program 

The Senate amendment authorizes the Secretary to establish—

in not more than 15 states—a pilot program to increase domestic 

consumption of fresh fruits and vegetables and convey related 

health messages. It authorizes appropriations of $25 million a year 

for FY2002–FY2006. The federal share of project costs is 50 percent 

and funds are not available to any foreign for-profit corporation. 

Where practicable, the amendment requires the Secretary to: establish the program in states where production of fresh fruits and 

vegetables is a significant industry; and base the program on ‘‘strategic initiatives,’’ including health promotion and education interventions, public service and paid marketing activities, and health 

promotion and social marketing campaigns. In selecting states, the 

Senate amendment requires the Secretary to take into account the 

state’s experience in: carrying out similar activities and its ability 

to be innovative, conduct marketing campaigns to promote produce 

consumption, track increases in levels of produce consumption, and 

to optimize the availability of produce. (Section 463) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments: establishing in not more than 5 states, and for a peVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00554 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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riod not to exceed 4 years for each participating state, a pilot program for the purpose of increasing the domestic consumption of 

fresh fruits and vegetables and conveying related health promotion 

messages; funds may not be used to disparage any other agricultural commodities and funds made available to states under this 

program may not be provided by a state to any foreign for-profit 

corporation; regarding the Secretary selecting states to participate 

in the program, the funds may be used to enhance existing state 

programs that are consistent with the purposes of this section, and 

the Secretary shall take into consideration states’ experience in 

carrying out similar projects or activities, innovative approaches, 

and the ability of the state to promote and track increases in levels 

of produce consumption; participating states shall establish eligibility criteria under which the states may select public and private 

sector entities to carry out demonstration projects under this program; authorizing to be appropriated $10 million per fiscal year 

2002 through 2007 to carry out this section. (Section 4403) 

TITLE V—CREDIT

(1) Eligibility of Limited Liability Companies for Farm Ownership 

Loans, Farm Operating Loans, and Emergency Loans 

The House bill includes limited liability companies as entities 

eligible for USDA farmer loan programs. (Sec. 501) 

The Senate amendment is identical to the House provision. 

(Sec. 521) 

The Conference substitute adopts the House provision and also 

includes trusts as eligible entities. (Sec. 532) 

(2) Suspension of Effectiveness of Certain Provision 

The House bill provides that Sec. 319(b) of the Consolidated 

Farm and Rural Development Act (ConAct) limiting loan eligibility 

of borrowers with Farm Service Agency loan guarantees will have 

no effect through December 31, 2006. (Section 501) 

The Senate amendment amends Sec. 311(c) of the ConAct by 

adding new provisions—(1) to require the Secretary to waive the direct OL loan eligibility limitations to a farmer or rancher who is 

a member of an Indian tribe and whose operation is within an Indian reservation; and (2) to authorize the Secretary, on a case-bycase basis, to grant a waiver for a direct OL loan to a borrower one 

time for a period of two years if the borrower demonstrates, (a) he 

has a viable farm or ranch operation; (b) he has applied for commercial credit from two commercial lenders; (c) he was unable to 

obtain a commercial loan, including a loan guarantee; and (d) he 

has completed successfully or will complete within one year a borrower’s training course required under Sec. 359 of the ConAct. 

(Section 502(b)) 

The Conference substitute adopts the House provision with regard to loan eligibility under Section 319(b) of the ConAct. (Sec. 

512) 

The Conference substitute adopts the Senate provision with regard to the case by case determination on the one time waiver of 

two years. The substitute also permits the Secretary to waive limitations with respect to direct loans for farmers and ranchers who 

552

farm land subject to the jurisdiction of an Indian Tribe, or when 

applicable security interests are subject to such jurisdiction, if commercial credit is not generally available. (Sec. 511) 

(3) Administration of Certified Lenders and Preferred Certified 

Lenders Programs 

The House bill amends Sec. 331(b) of the ConAct to add a new 

provision authorizing the Secretary to administer the certified and 

preferred lender guaranteed loan programs through central offices 

in states or multi-state areas. (Sec. 503) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment to make the authority discretionary. (Sec. 539) 

(4) Simplified Loan Guarantee Application Available for Loans of 

Greater Amounts 

The House bill amends Sec. 333A(g)(1) of the ConAct to increase the loan amount of the guaranteed program using a simplified short form to a maximum of $150,000. (Sec. 504) 

The Senate amendment amends Sec. 333A(g)(1) to increase the 

loan amount of the guaranteed program using a simplified short 

form to $100,000. (Sec. 526) 

The Conference substitute sets the loan amount at $125,000. 

(Sec. 537) 

(5) Elimination of Requirement That Secretary Require County 

Committees To Certify in Writing That Certain Loan Reviews 

Have Been Conducted 

The House bill strikes Sec. 333(2) of the ConAct to remove the 

requirement that county committees must certify in writing annually that farmer program borrowers’ business operations and credit 

histories have been reviewed for the borrowers to continue to be eligible for the loan program. (Sec. 505) 

The Senate amendment amends Sec. 333(2) by removing the 

requirement that local or area FSA committees must certify in 

writing that they have reviewed the credit histories, business operations and continued eligibility of all borrowers. The amendment 

retains language requiring that these annual reviews be conducted. 

(Sec 525) 

The Conference substitute adopts the Senate provision. (Sec. 

536) 

(6) Authority To Reduce Percentage of Loan Guaranteed if Borrower 

Income Is Insufficient to Service Debt 

The House bill amends Sec. 339(c)(4)(A) and (d)(4)(A) of the 

ConAct dealing with the certified and preferred guaranteed lending 

program to authorize the Secretary to guarantee less than 80 percent of farm program loans even though the borrower does not 

show adequate income as described in current law. (Sec. 506) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

553

(7) Timing of Loan Assessments 

The House bill strikes language in Sec. 360(a) of the ConAct 

to conform to a provision of the 1994 USDA Reauthorization Act 

that eliminated a requirement for the local county committee to approve a borrower’s eligibility for farmer program loans. (Sec. 507) 

The Senate amendment amends Sec. 360(a) of the ConAct by 

striking the words, ‘‘established pursuant to section 332’’. (Sec 

552(d)) 

The Conference substitute adopts the House provision. (Sec. 

546) 

(8) Making and Servicing of Loans by Personnel of State, County 

or Area Committees 

The House bill amends Subtitle D of the ConAct to add a new 

section 376 to require the Secretary to use Farm Service Agency 

state, area or county office employees to make and service farmer 

program loans if the personnel are trained to do so. This authority 

overrides the 90-day finality rule of FSA state, area or county office 

employees in Sec. 281(a)(1) of the USDA reorganization act. (Sec. 

508) 

The Senate amendment amends Sec. 281(a)(1) of the Department of Agriculture Reorganization Act so that the finality rule 

does not apply to an agricultural credit decision made by a state, 

area or county FSA employee. (Sec. 551) 

The Conference substitute adopts the House provision. (Sec. 

549) 

This section would enable the Secretary to employ personnel of 

a State, county or area committee to make and service USDA farm 

loans to the extent the personnel are trained to do so. The Managers believe that the Secretary should provide that these individuals have been adequately trained in these areas in a comparable 

manner as USDA Farm Service Agency employees with the same 

job responsibilities. Furthermore, the Secretary should ensure that 

the credit decisions of these individuals are subject to the same 

USDA loan review as any USDA employee making credit decisions, 

including internal control review, and disciplinary action to protect 

against the misuse of government funds. 

(9) Eligibility of Employees of State, County, or Area Committees for 

Loans and Loan Guarantees 

The House bill amends Subtitle D of the ConAct to add a new 

section 377 to make eligible Farm Service Agency local county office employees and USDA employees for farmer program loans so 

long as a local county office other than the applicant’s home office 

approves the loan application. (Sec. 509) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment providing that when applying for loans, local/county 

employees apply to the State level and State employees apply to 

the federal level. (Sec. 550) 

This section would allow employees of a State, county or area 

committee to be eligible for USDA farm loans as long as these 

loans are approved at a higher level within the Farm Service Agency, either at the state office or national level. The Managers believe 

554

it is important for these employees, many of whom are farmers in 

their communities, to have access to the same farm loan programs 

as other producers. Nevertheless, the Managers believe that a 

higher level of review is appropriate to alleviate concerns regarding 

the eligibility of these individuals for the farm loan programs. 

(10) Emergency Loans in Response to an Economic Emergency Resulting From Sharply Increasing Energy Costs 

The House bill amends: (1) Sec. 321(a) of the ConAct to include 

among natural disasters economic disasters caused by high energy 

costs and crop and livestock quarantines for which farmers, ranchers or persons engaged in aquaculture may be eligible for disaster 

loans; (2) Sec. 323 of the ConAct to conform disasters or emergencies referred to in this section caused by plant or animal quarantines or sharply rising energy costs; (3) Sec. 329 of the ConAct 

by adding a new subsection (b) requiring the Secretary to make financial assistance available when energy costs for any three-month 

period is at least 50 percent greater than the average of the preceding five years and the applicant’s income loss was incurred to 

prevent livestock mortality, degradation of perishable commodities 

or damage to field crops; and (4) Sec. 324(a) of the ConAct by adding two provisions to limit the amount of any loan made in response to a quarantine to $500,000 and any loan made in response 

to an energy emergency to $200,000. (Sec. 510) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision only on 

providing new authority to make emergency loans for plant or animal quarantines. (Sec. 521) 

(11) Extension of Authority To Contract for Servicing of Farmer 

Program Loans 

The House bill reauthorizes the program in Sec. 331(d) of the 

ConAct through 2011 to allow the Secretary to contract with regulated financial institutions to service farmer program loans under 

the ConAct and removes the ‘‘temporary’’ designation of this program. (Sec. 511) 

The Senate amendment amends Sec. 331 by striking subsections (d) [loan servicing pilot program for farm loans] and (e) 

[authority for the Secretary to use private debt collection agencies] 

and provides that any existing contracts are unaffected by this provision. (Sec. 523) 

The Conference substitute adopts the Senate provision. (Sec. 

534) 

(12) Authorization for Loans 

The House bill amends Sec. 346(b)(1) by reauthorizing the 

farmer loan programs at such sums as may be necessary. (Sec. 512) 

The Senate amendment amends Sec. 346(b)(1) of the ConAct 

by providing not more than $3,796,000,000 for each of the fiscal 

years 2002 through 2006. 

Of the above amount in each fiscal year, $770,000,000 shall be 

for direct loans of which—

(1) $205,000,000 shall be for farm ownership loans; and 

(2) $565,000,000 shall be for operating loans. 

555

Of the remainder of the above amount in each fiscal year, $3,026,000,000 shall be for guaranteed loans of which— (1) $1,000,000,000 shall be for guaranteed farm ownership 

loans; and 

(2) $2,000,026,000 shall be for guaranteed operating loans. 

(Sec. 529(1)(A)) 

The Conference substitute adopts the Senate provision with an 

amendment to provide the authorization from fiscal years 2002 to 

2007. (Sec. 541) 

(13) Reservation of Funds for Direct Operating Loans for Beginning 

Farmers and Ranchers 

The House bill amends Sec. 346(b)(2)(A)(ii)(III) of the ConAct 

to reauthorize the reservation of beginning farmer and ranchers 

loan amounts at 35 percent of the funds through 2011. (Sec. 513) 

The Senate amendment amends Sec. 346(b)(2)(A)(ii) of the 

ConAct to provide that the Secretary shall reserve during fiscal 

years 2002 through 2006 35 percent of the funds made available 

for direct operating loans authorized to be appropriated under the 

ConAct. Further, in addition to funds made available under Agricultural Appropriations, the Secretary shall use $5,000,000 of funds 

of the CCC for fiscal year 2002 to make loans described in section 

346(b)(2)(A)(i). (Sec. 529(1)(B)) 

The Conference substitute adopts the House provision with an 

amendment to provide the authorization from fiscal years 2002 to 

2007. (Sec. 542) 

(14) Extension of Interest Rate Reduction Program 

The House bill amends Sec. 351(a)(2) to reauthorize the interest rate buy-down program for farmer program loan guarantees 

through 2011. (Sec. 514) 

The Senate amendment amends Sec. 351 of the ConAct and replaces subsection (c) by providing an interest rate reduction of 

three percent for farmers and ranchers and four percent for beginning farmers and ranchers; authorizes $750,000,000 to carry out 

this program; and requires the Secretary to reserve until April of 

each fiscal year not less than 25 percent of the funds for the interest rate reduction program for beginning farmers and ranchers. 

(Sec. 530) 

The Conference substitute adopts the Senate provision with an 

amendment that retains current law on the interest rate, but reserves 15% of funds in a fiscal year for beginning farmers and 

ranchers until March 1st and provides for a permanent authorization of $750 million annually. (Sec. 543) 

(15) Increase in Duration of Loans Under Down Payment Loan Program 

The House bill amends Sec. 310E (b)(3) of the beginning farmer and rancher down payment loan program by increasing the loan 

repayment period to 15 years and makes a conforming amendment 

to Sec. 310E (c)(3)(B). (Sec. 515) 

The Senate amendment amends Sec. 310E (b)(3) of the beginning farmer and rancher down payment loan program by increasing the repayment period to 20 years (Sec. 507(1)(B)). The Senate 

556

amendment also makes a conforming amendment to Sec. 310E 

(c)(3)(B). (Sec. 507(2)) 

The Conference substitute adopts the House provision. (Sec. 

505) 

(16) Horse Breeder Loans 

The House bill (1) defines a horse breeder as a person that derives more than 70 percent of the income of the person from the 

business of breeding, boarding, raising, training or selling horses 

during the shorter of (a) the five-year period ending on Jan. 1, 

2001; or (b) the period the person has been engaged in the business; (2) directs the Secretary to make a loan to an eligible horse 

breeder for losses suffered from mare reproductive loss syndrome; 

(3) defines eligible breeders are those (a) who suffered at least a 

30 percent loss of mare offspring as a result of mare reproductive 

loss syndrome during the periods of Jan. 1, 2000–Oct. 1, 2000, or 

Jan. 1, 2001–Oct. 1, 2001. Losses could be from mares having failed 

to conceive, or miscarried, aborted or otherwise failed to produce a 

live healthy foal. Mares could be owned by a breeder or boarded on 

a farm owned, operated or leased by a breeder; (b) who, during the 

period Jan. 1, 2000, and ending on Sept. 30, 2002, were unable to 

meet financial obligations in connection with breeding, boarding, 

raising, training, or selling horses; (c) who were unable to obtain 

sufficient credit elsewhere (within the meaning of Sec. 321(a) of the 

ConAct; (4) directs the Secretary shall determine the amount of the 

loan based on the amount losses suffered by a breeder but a loan 

may not exceed $500,000; (5) directs the Secretary shall determine 

the duration of the loan but any loan may not exceed 15 years; (6) 

establishes the interest rate shall be at a rate prescribed by Sec. 

324(b)(1) of the ConAct; (7) directs the Secretary shall take a security interest in the loan; (8) establishes that a breeder must submit 

a loan application by Sept. 30, 2002; (9) directs the Secretary shall 

carry out this section using funds made available for the emergency loan program under subtitle C of the ConAct; and (10) establishes the authority for this loan program that expires on Sept. 30, 

2003. (Sec. 516) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(17) Evaluations of Direct and Guaranteed Loan Programs 

The House bill (1) requires the Secretary to conduct two studies of the direct and guaranteed farm ownership and operating loan 

programs. Each will include an examination of the number, average principal amount, and delinquency and default rates of loans 

during the period covered by the study. (2) The first study shall 

cover the one-year period that begins one year after enactment. 

The second study shall cover the one-year period that begins three 

years after enactment. (3) At the end of the period covered by each 

study, the Secretary shall submit reports to Congress that contains 

an evaluation of the results of the study, including an analysis of 

the effectiveness of the loan programs in meeting the credit needs 

of agricultural producers. (Sec. 517) 

The Senate amendment contains no comparable provision. 

557

The Conference substitute adopts the House provision. (Sec. 

531) 

(18) Loan Eligibility for Borrowers With Prior Debt Forgiveness 

The House bill amends Sec. 373(b)(1) of the ConAct to authorize the Secretary to make loans to borrowers who have not received 

debt forgiveness on loans or loan guarantees more than two times 

and to guarantee loans to borrowers who have not received debt 

forgiveness on loans or loan guarantees more than three times. 

(Sec. 519) 

The Senate amendment contains no comparable provisions. 

The Conference substitute deletes the House provision and provides for the Secretary to make an operating loan to a borrower 

who has received debt forgiveness on not more than one occasion 

that was directly and primarily resulting from a natural disaster 

as designated by the President. (Sec. 548) 

(19) Allocation of Certain Funds for Socially Disadvantaged Farmers and Ranchers 

The House bill amends Sec. 355(c)(2) of the ConAct to authorize the Secretary to provide unused funds allocated for socially disadvantaged farmers and ranchers within a state to other states 

where there are pending loan applications for (SDA) farmers and 

ranchers. Any remaining unused SDA funds within a state may be 

reallocated to other applicants in that state. (Sec. 520) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Sec. 

544) 

(20) Horses Considered To Be Livestock Under the Consolidated 

Farm and Rural Development Act 

The House bill amends Sec. 343 of the ConAct to include 

horses within the meaning of livestock (Sec. 521) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(21) Temporary Suspension of Foreclosure on Certain Real Property 

Owned by, and Recovery of Certain Payments From, Borrowers 

With Shared Appreciation Arrangements 

The House bill directs the Secretary upon enactment of the bill 

and through Dec. 31, 2002, to suspend foreclosure on real property 

secured by a shared appreciation arrangement and not attempt to 

recover payments on the terms of any shared appreciation arrangement entered into between the Secretary and a borrower. (Sec. 522) 

The Senate amendment amends Sec. 353(e)(7) to provide alternatives to repaying the recapture amount of a shared appreciation 

arrangement by—(1) financing the recapture agreement; or (2) 

granting the Secretary an agricultural use protection and conservation easement on the secured property which is subject to the 

shared appreciation arrangement. 

An agricultural use protection and conservation easement 

shall—(1) be for all of the real security property subject to the 

shared appreciation arrangement in lieu of payment of the recapture amount; (2) be for a term of 25 years; (3) require that the 

558

property subject to the easement be used or conserved for agricultural or conservation purposes in accordance with sound farming 

and conservation practices; and (4) provide that the borrower who 

is financing the recapture amount may replace the financing with 

an agricultural use protection and conservation easement. 

The amendments shall apply to a shared appreciation arrangement that—(1) matures on or after the date of enactment; or (2) 

matured before the date of enactment if—(a) the recapture was reamortized under Sec. 353(e)(7) or (b)(1) the recapture amount had 

not been paid before the date of enactment because of circumstances beyond the control of the borrower; and (b)(2) the borrower acted in good faith in attempting to repay the recapture 

amount. (Sec. 531) 

The Conference substitute provides that the Secretary may 

modify a recapture loan on which a payment has become delinquent by using loan servicing tools if the default was beyond the 

control of the borrower and the borrower acted in good faith in attempting to repay the recapture loan. A reamortized loan may not 

exceed 25 years from the date of the original amortization agreement or provide for reducing the outstanding principal or unpaid 

interest due on the loan. 

The Managers expect the Secretary to review USDA appeal 

policies regarding appraisals used for shared appreciation agreements. The Managers expect the Secretary to establish policies 

that will result in the use of the most accurate appraisal of assets, 

including the use of independent appraisals provided on appeal by 

the borrower that are consistent with Federal appraisal standards. 

(22) Authority To Make Business and Industry Guaranteed Loans 

for Farmer-Owned Projects That Add Value to or Process Agricultural Products 

The House bill amends Sec. 310B(a)(1) by expanding the Secretary’s loan making authority in the business and industry loan 

program to larger than rural communities if a majority of the 

project involved is owned by individuals who reside and have farming operations in rural communities and the project adds value to 

or processes agricultural commodities. (Sec. 523) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision.

(23) Direct Loans 

The Senate amendment amends Sec. 302(b)(1) to authorize the 

Secretary to make direct farm ownership loans to farmers and 

ranchers who have ‘‘participated in the business operations of’’ a 

farm or ranch for not less than three years. (Sec. 501) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

501) 

The Managers are aware of the limiting impact of the requirement for 3 years of operating experience on the eligibility of qualified beginning farmers and ranchers for farm ownership loans. The 

Managers intend for the Department to examine potential borrowers comprehensively in terms of their participation in the business operations of a farm or ranch, whether or not the potential 

559

borrower was the primary or senior operator. In making these determinations, the Department should ensure the borrower fully 

meets the training and experience requirement of section 302(a). 

The Department should also place considerable weight on whether 

the borrower has enrolled and will successfully complete the borrower training program. 

(24) Financing of Bridge Loans 

The Senate amendment amends Sec. 303(a)(1) to add a new 

purpose authorizing the refinancing of short-term temporary bridge 

loans made by a commercial or cooperative lender to a beginning 

farmer or rancher for the acquisition of a farm or ranch if—the 

Secretary approved an application for a direct farm ownership loan 

for acquisition of the land and the funds for direct farm ownership 

loans were not available at the time the application was approved. 

(Sec. 502) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to refinance bridge loans made by commercial or cooperative lenders to borrowers who have a direct ownership loan approved and for which funds are available. (Sec. 502) 

(25) Limitation on Amount of Farm Ownership Loans 

The Senate amendment amends Sec. 305(a) to limit the unpaid 

indebtedness of any borrower to the lesser of—(1) the value of the 

farm or other security; or (2) in the case of a direct loan to a beginning farmer or rancher $250,000 (adjusted for inflation) or 

$200,000 to other farmers or ranchers; or in the case of a guaranteed loan, $700,000 (adjusted for inflation and reduced by the 

amount of any unpaid indebtedness on guaranteed operating loans 

of the borrower). (Sec. 503) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(26) Joint Financing Arrangements 

The Senate amendment amends Sec. 307(a)(3)(D) to require 

the Secretary to charge a rate of interest to beginning farmers or 

ranchers that is 50 basis points less than the rate charged to other 

farmers and ranchers on a direct loan that is part of a joint financing arrangement. (Sec. 504) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(27) Guarantee Percentage for Beginning Farmers and Ranchers 

The Senate amendment amends Sec. 305(h)(6) to require the 

Secretary to guarantee 95 percent of a farm ownership loan to a 

beginning farmer or rancher participating in the down payment 

loan program or an operating loan to a beginning farmer or rancher who is participating in the down payment loan program during 

the period the borrower has an outstanding direct farm ownership 

loan. (Sec. 505) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

560

(28) Guarantee of Loans Made Under State Beginning Farmer or 

Rancher Programs 

The Senate amendment amends Sec. 309 by adding a new subsection to authorize the Secretary to guarantee loans made under 

a state beginning farmer or rancher program, including a loan financed by the net proceeds of a qualified small issue agricultural 

bond pursuant to the federal tax code. (Sec. 506) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

504) 

(29) Down Payment Loan Program 

The Senate amendment amends Sec. 310E(b)(1) to increase the 

principal amount of the down payment loan to be equal to 40 percent of the purchase price of the land acquisition. (Sec. 507(1)(A)) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

505) 

The Managers are aware that on an average per dollar basis, 

funds used for down payment loans serve over 3 times as many 

borrowers as regular farm ownership loans, and thus help to 

stretch limited loan funds and increase new farming and ranching 

opportunities. The Managers encourage the Secretary to widely 

publicize the availability of loans under this section as amended 

among potentially eligible recipients of the loans, retiring farmers 

and ranchers, and applicants for farm ownership loans under this 

subtitle and to coordinate the loan program established by this section with State programs that provide farm ownership or operating 

loans for beginning farmers and ranchers. The Managers strongly 

encourage the Secretary to establish performance goals for each 

state with a significant volume of real estate loans under this subtitle, with a goal of attaining down payment loan volumes consistent with the loan reservation percentage for down payment 

loans. 

(30) Beginning Farmer and Rancher Contract Land Sales Program 

The Senate amendment adds a new Sec. 310F to the ConAct 

to require the Secretary to carry out a pilot program by Oct. 1, 

2002, in at least 10 geographically dispersed states. The Secretary 

is required to guarantee at least five loans per state in each of the 

fiscal years 2003 through 2006 made by a private seller of a farm 

or ranch to a qualified beginning farmer or rancher on a contract 

land sale basis, if the loan meets the applicable underwriting 

standards and a commercial lending institution agrees to serve as 

escrow agent. The Secretary shall start the program on making a 

determination that guarantees of contract land sales present a risk 

comparable to the risk presented in the case of guarantees to commercial lenders. (Sec. 508) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment requiring a pilot program in not fewer than 5 states 

to guarantee loans made by a private seller to a beginning farmer 

or rancher on a contract land sale basis commencing once the SecVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00564 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
561

retary makes a determination and authorizing the program 

through 2007 if it is carried out. (Sec. 506) 

The Managers are aware that contract land sales are prevalent 

in many states and encourage the Secretary to create a pilot program for guaranteeing the financing of such contract land sales. 

The Managers intend for the Secretary to approve any loan guarantee under this pilot program using its normal underwriting criteria. The Managers envision that land contracts between the seller and buyer will contain a side escrow agreement that outlines the 

duties and responsibilities of the escrow agent. 

(31) Direct Loans 

The Senate amendment amends Sec. 311(c)(1)(A) to delete the 

requirement that a direct loan may not be made to a farmer or 

rancher who has operated a farm or ranch for five years or more. 

(Sec. 511) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

511) 

(32) Amount of Guarantee of Loans for Tribal Farm Operations; 

Waiver of Limitations for Tribal Operations and Other Operations 

The Senate amendment adds a new paragraph (7) to Sec. 

309(h) requiring the Secretary to guarantee 95 percent of operating 

loans made to a farmer or rancher who is a member of an Indian 

tribe whose farm or ranch is within an Indian reservation. (Sec. 

512(a)) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment requiring the Secretary to guarantee 95% of operating 

loans made to any farmer or rancher whose operation is subject to 

the jurisdiction of an Indian tribe. (Sec. 503) 

(33) Debt Settlement 

The Senate amendment amends Sec. 331(b)(4) by deleting the 

provision that the Secretary may not release a borrower from a 

debt obligation on more favorable terms than that recommended by 

the county committee under Sec. 332. Note: Sec. 332 was repealed 

by the 1994 USDA reorganization act. (Sec. 522) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to change the role of local or area Farm Service Agency 

committees in debt settlement to consultation only regarding a potential debt settlement agreement. (Sec. 533) 

(34) Interest Rate Options for Loans in Servicing 

The Senate amendment amends Sec. 331B to require the Secretary, when restructuring a farmer program loan, to charge the 

lowest of (1) the rate of the original loan; (2) the rate being charged 

when the borrower applies for restructuring the loan; or (3) the 

rate being charged when the borrower restructures the loan. (Sec. 

524) 

The House bill contains no comparable provision. 

562

The Conference substitute adopts the Senate provision. (Sec. 

535) 

(35) Inventory Property 

The Senate amendment amends Sec. 335(c) dealing with the 

sale of inventory property by—(1) providing a greater number of 

days that the property must be held by the Secretary and offered 

for sale to beginning farmers and ranchers; (2) authorizing the Secretary to bundle or parcel real estate in such ways as to maximize 

the sale of such real estate to beginning farmers and ranchers; (3) 

authorizing the Secretary to sell farm real estate that has been acquired and leased before April 4, 1996, to beginning farmers and 

ranchers within 60 days of the expiration of the lease arrangements; and (4) authorizing the Secretary, for purposes of farmland 

preservation and in consultation with the State Conservationist, to 

sell or grant easements, restrictions or development rights to 

states, political subdivisions within states or private nonprofit organizations of real estate held in inventory. (Sec. 527) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to extend the period of time inventory property must 

be offered to beginning farmers and ranchers and to maximize the 

purchase of inventory property by combining or dividing parcels of 

property as appropriate. (Sec. 538) 

(36) Definitions 

The Senate amendment amends Sec. 343(a)(11)(F) to replace 

the 25 percent limitation on ownership of the median ownership 

acreage within a county for purposes of determining a beginning 

farmer or rancher with a 30 percent acreage limitation. (Sec. 

528(a)) 

The House bill contains no comparable provisions. 

The Conference substitute adopts the Senate provision. (Sec. 

540) 

(37) Waiver of Borrower Training Certification Requirement 

The Senate amendment amends Sec. 359(f) by authorizing the 

Secretary to waive the educational training requirements of Sec. 

359 if the Secretary determines that the borrower demonstrates 

adequate knowledge in financial and farm management. The Secretary shall establish standards for this waiver that is implemented consistently in all counties. (Sec. 532) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

545) 

The Managers are aware that waivers have not always been 

applied consistently and are concerned that in many areas waivers 

are exceptionally high, exceeding the 50% level. The Managers intend for the Secretary to issue clear and transparent criteria for 

waivers as quickly after enactment as possible and to re-assert the 

importance of borrower training to the success of borrowers and the 

effectiveness of the direct lending programs. 

563

(38) Repeal of Burdensome Approval Requirements 

The Senate amendment amends Sec. 3.1(11)(B) to delete a provision that restricts without prior approval the loan participation 

activities of a bank for cooperatives in the lending territory of a 

Farm Credit Bank or association. The Senate amendment also 

amends Sec. 4.18A to make conforming changes to loan participation activities of banks for cooperatives and FCS institutions that 

operate under separate titles of the Farm Credit Act. (Sec. 541) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

551) 

The Managers understand that although this provision eliminates certain territorial concurrence requirements on Farm Credit 

System lenders so that lenders may participate in loan syndications or other multiple-lender arrangements for ‘‘similar entity’’ loans originated in other Farm Credit System geographic territories without seeking the permission of the Farm Credit System 

lender in that territory. Current law requires System institutions 

to obtain permission from one another when participating in similar entity transactions in which a commercial bank originates the 

loan and then sells the loan to a group of lenders (including the 

System institution). The change eliminates these requirements only 

as they pertain to similar entity loans that the System does not 

originate. Territorial concurrence for loans other than similar entity loans are not affected by this change. The Managers are expressing no opinion with this provision on pending litigation regarding 

participation regulations issued by the Farm Credit Administration 

on April 25, 2000. 

(39) Banks for Cooperatives 

The Senate amendment amends Sec. 3.7(b) of the Farm Credit 

Act to replace the words ‘‘farm supplies’’ with ‘‘agricultural supplies’’ and to add a definition of an agricultural supply to include 

farm supply, agriculture-related processing equipment, agriculturerelated machinery and other capital goods related to the storage or 

handling of agricultural commodities or products. (Sec. 542) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

552) 

(40) Insurance Corporation Premiums 

The Senate amendment amends Sec. 5.55 of the Farm Credit 

Act to include government sponsored enterprise-guaranteed loans 

or credits and establishes the rate at which these loans or credits 

in accrual or non-accrual status are used to fund the Insurance 

Fund. (Sec. 543) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision and 

makes it applicable to calendar year 2002. (Sec. 553) 

(41) Board of Directors of the Federal Agricultural Mortgage Corporation 

The Senate amendment amends Sec. 8.2(b) to increase the 

board to 17 members. The two new members of the board shall be 

564

elected by Class A (commercial banks and other financial institutions) and Class B (Farm Credit System institutions) stockholders, 

and the two new members shall be the chief executive officer and 

another executive officer of Farmer Mac. The Senate amendment 

also amends Sec. 8.2(b)(9) to provide for the election of the chairperson from among the board members instead of by appointment 

by the President. (Sec. 544) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(42) Technical Amendments 

See Sec. 505 of the House bill 

The Senate amendment strikes references to Sec. 332 and corrects the reference to the ‘‘Robert T. Stafford Disaster Relief and 

Emergency Assistance Act’’. (Sec. 552) 

The Conference substitute adopts the Senate provisions. (Sec. 

561) 

(43) Effective Date 

The Senate amendment makes for the amendments made by 

this title, except for subsection (b) of this section and section 

543(b), take effect on Oct. 1, 2002. (Sec. 553) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

TITLE VI—RURAL DEVELOPMENT

(1) Funding for Rural Local Television Broadcast Signal Loan 

Guarantees 

The House bill amends the Launching Our Communities’ Access to Local Television Act of 2000 to provide $200 million for loan 

guarantees for fiscal years 2002–2006 without fiscal year limitation. (Section 601) 

The Senate amendment contain no comparable provision 

The Conference substitute adopts the House provision with an 

amendment to provide $80 million for loan guarantees from the 

date of enactment through December 31, 2006, without fiscal year 

limitation. (Section 6404) 

It is the view of the Managers that funding dedicated to providing access to signals of local television stations should be made 

available by the Secretary for rural broadband deployment either 

upon expiration of the LOCAL TV Act on December 31, 2006, or 

when the RUS Administrator certifies that the goals of the program have already been met. 

(2) Expanded Eligibility for Value-Added Agricultural Product Market Development Grants 

The House bill amends the Agricultural Risk Protection Act of 

2000 to allow $60 million ($50 million plus $10 million from Sec. 

943) to be used for value-added grants for each of the fiscal years 

2002–2011. This section is designed to increase the participation in 

the Value-Added Agricultural Products Market Development 

Grants by allowing broader standards of eligibility for this specific 

grant category only so that public bodies and trade association can 

565

compete along with non-profit institutions and universities for 

grants designed to develop value-added products for foreign markets. Extends the current program with increased mandatory 

spending. (Section 602) 

The Senate amendment amends ARPA, Section 231, to spend $75 million each year 2002–2006. Eligible independent producers 

and nonprofit entities may receive grants with a priority given to 

proposals requesting less than $200,000. Defines value added as 

undergoing a change in the physical state or produced in a manner 

that enhances its value to consumers. No less than 5% of the funding shall be used to assist producers of certified organic agricultural products. The Senate amendment provides 7.5% of the $75 

million per year be allocated to the established Agricultural Marketing Resource Center authorized in ARPA. (Section 606) 

The Conference substitute adopts the Senate provision with an 

amendment to make technical corrections, expand eligibility, strike 

the priority designations and reserve, and modify funding for the 

established innovation center. This provision provides $40 million 

each fiscal year 2002 through 2007. Of this amount, five percent 

of the funds will be used for the Agricultural Marketing Resource 

Center. (Section 6401) 

The Managers intend that the Department, in administering 

the program, will seek to fund a broad diversity of projects that 

help increase agricultural producers’ share of the food and agricultural system profit, including projects likely to increase the profitability and viability of small and medium-sized farms and ranches. 

The Managers intend for the Department to consider a project’s potential for creating self-employment opportunities in farming and 

ranching and the likelihood that the project will contribute to conserving and enhancing the quality of land, water and other natural 

resources. 

When making these grants, the Managers expect the Secretary 

to consider applications from a variety of agricultural sectors, such 

as renewable energy, wineries, high value products from major 

crops, agri-marketing ventures, and community supported agricultural projects. The inclusion of renewable energy includes farm or 

ranch based wind, solar, hydrogen, and other renewable energy. 

An exception from the normal rural area requirement is made 

for majority controlled producer based business ventures. It is the 

Managers intent that the Department award grants, to the maximum extent practicable, to projects located in rural areas. However, state rules and regulations and other circumstances may 

hinder some worthy value-added agricultural projects from meeting 

the Department’s specific definition of ‘‘rural’’. One such example is 

wineries in certain areas. In this instance, the Managers expect the 

Department to consider the importance and value of the project to 

area agriculture producers who will be the ultimate beneficiaries of 

the project, including the consistency of the project with the intent 

of the program. 

(3) Agriculture Innovation Center Demonstration Program 

The House bill provides that the Secretary shall make grants 

to establish centers to provide producers with technical assistance, 

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tural businesses. The Secretary shall use not less than $5 million 

for fiscal year 2002 and not less than $10 million for fiscal years 

2003 and 2004. This money is part of the $50 million being used 

for Section 602 activities. The Secretary shall use $300,000 of the 

funds made available each year to support research at a university 

on the effects of value-added projects on producers and commodity 

markets. The Secretary shall submit a report to the House and 

Senate Agriculture Committees on the effectiveness of this demonstration program. (Section 603) The Senate amendment provides 7.5% of the $75 million per 

year that is allocated to the established Agricultural Marketing Resource Center authorized in ARPA. (Section 606) 

The Conference substitute adopts the House provision with an amendment that the Secretary shall use not less than $3 million 

for fiscal year 2002 and not less than $6 million for fiscal years 

2003 and 2004. (Section 6402) 

(4) Funding of Community Water Assistance Grant Program 

The House bill directs the Secretary to use $30 million for each 

of the fiscal years 2002–2011 to fund drinking water assistance 

grants. Extends current program and makes it mandatory spending. Strikes the word ‘‘emergency’’ in the subtitle. 

Increases funding by another $45 million per year, for a total of $75 million per year. (Section 604 and 943) 

The Senate amendment extends authority of the program 

through 2006 with no changes. 

See also section 603 of the Senate amendment, which fully 

funds existing backlog of applications for this grant program and 

other rural development loan and grant programs. (Section 629) 

The Conference substitute adopts the House provision with an 

amendment to make rural areas and small communities eligible for 

grants in cases where a significant decline in quantity and quality 

of water is imminent, in addition to where there is an emergency. 

No less than 3 percent but no more than 5 percent of appropriated 

funds shall be used for these grants. (Section 6009) 

The Managers are acutely aware of the ongoing needs of rural 

communities in maintaining water systems to provide adequate 

and safe drinking water for its residents. The Managers are particularly concerned about current drought conditions in many areas 

of the United States and its dire impact on a rural area’s drinking 

water needs. Many areas are faced not only with the lack of potable water but with the lack of any water at all. For this reason, 

the provision allowing for potable water includes the delivery of 

bottled water where necessary. 

The Managers expect this provision to provide USDA, Rural 

Development with a flexible program with a certainty of funds to 

meet the emergency and imminent drinking water needs of rural 

areas. The Secretary should ensure that communities eligible for 

assistance under this program receive immediate attention. 

(5) Loan Guarantees for the Financing of the Purchase of Renewable 

Energy Systems 

The House bill provides that the Secretary may provide to persons or individuals a loan guarantee under Section 4 of the Rural 

567

Electrification Act to finance the purchase of a renewable energy 

system, including a wind energy system and anaerobic digesters for 

the purpose of energy generation. (Section 605) 

The Senate amendment provides that the Secretary, in addition to making loans and loan guarantees under other laws, shall 

make low interest rate loans (4%), loan guarantees, and grants to 

be used by producers for the purchase of renewable energy systems 

and energy efficiency improvements. Provides $33 million per year 

for such purposes. (Only those producing agricultural products with 

a market value of less than $1,000,000 in the preceding year are 

eligible.) (Section 902) 

The Conference substitute deletes the House provision. 

(6) Loans and Loan Guarantees for Renewable Energy Systems 

The House bill amends Section 310B of the ConAct by inserting ‘‘and other renewable energy systems including wind energy 

systems and anaerobic digesters for the purpose of energy generation’’. (Section 606) 

The Senate amendment provides that the Secretary, acting 

through the Rural Business Cooperative Service shall establish a 

program to make loans, loan guarantees (in addition to loans and 

loan guarantees under other laws) and competitively award grants 

to cooperatives or other rural business ventures to enable producers to own and market sources of renewable energy and increase the quantity of electricity available from renewable energy 

sources. Loans would be used to provide capital for start-up costs

associated with rural business ventures or the promotion of the aggregation of renewable electric energy sources. Grants would be 

used to develop business plans or perform feasibility studies. (much 

like existing Value-Added Grants). (Section 902) 

The Conference substitute adopts the House provision. (Section 

6013) 

(7) Reauthorization of Programs Through 2011 

The House amendment reauthorizes current programs through 

2011. Those programs are Rural Business Opportunity Grants (Sec. 

607), Grants for Water Systems for Rural and Native Villages in 

Alaska (Sec. 608), Rural Cooperative Development Grants (Sec. 

609), National Reserve Account for Rural Development Trust Fund 

(Sec. 610), and the Rural Venture Capital Demonstration Program 

(Sec. 611). (Sections 607, 608, 609, 610, and 611) 

The Senate amendment reauthorizes Rural Business Opportunity Grants (same as House Sec. 607) except that authorization 

is increased from $7.5 million to $15 million a year, and authority 

runs through 2006. 

Reauthorizes Grants for Water Systems for Rural and Native 

Villages in Alaska (same as House Sec. 608) except that authority 

runs through 2006. 

Reauthorizes Rural Cooperative Development Grants (same as 

House Sec. 609) except that it prohibits the Secretary from requiring a non-federal share of more than 5% for 1994 institutions, and 

authority runs through 2006. 

The Senate amendment contains no comparable provisions on 

the National Reserve Account for Rural Development Trust Fund 

568

or the Rural Venture Capital Demonstration Program. (Section 

622, 631, and 633) 

The Conference substitute adopts the Senate provision on 

Rural Business Opportunity Grants. (Section 6003) 

The Conference substitute adopts the House provision on 

Grants for Water Systems for Rural and Native Villages in Alaska. 

(Section 6011) 

The Conference substitute adopts the Senate provision on 

Rural Cooperative Development Grants. (Section 6015) 

The Conference substitute adopts the House provisions with an 

amendment to repeal the National Reserve Account for Rural Development Trust Fund and the Rural Venture Capital Demonstration Program. (Section 6026) 

(8) Increase in Limit on Certain Loans for Rural Development 

The House bill increases the loan limit of the Business and Industry lending program authorized by Sec. 310B of the ConAct 

from $25 million to $100 million. (Section 612) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment that the Secretary may guarantee a loan that may not 

exceed $40 million for a project that is located in a rural area and 

provides for the value-added processing of agricultural commodities. The Secretary may not delegate the approval authority. (Section 6017) 

(9) Pilot Program for Rural Development Strategic Plans and Implementation 

The House bill provides that the Secretary shall select states 

to implement rural development strategic plans. This is a new program that provides mandatory spending of $2 million in grants for 

each fiscal year 2002–2011 (plus another 2⁄13 or approximately $6.9 

million from Sec. 943.). 

Provides mandatory spending of $13 million for grants to implement the plans for each fiscal year 2002–2011 (plus 11⁄13 or approximately $38 million from Sec. 943.). The Strategic Planning 

Initiative and Implementation provision authorizes a matching 

grant pilot program of $2 million (plus $6.9 million) per year to entities for regional, collaborative rural development strategic plans 

in those states that are chosen by the Secretary. Community-based 

and grassroots organizations’ support and participation are critically important to successful planning. The matching grant requirement will help ensure that there is a commitment at the local level 

for the planning process. The provision allows the Secretary to require up to a 50% matching grant. This requirement is not intended to serve as a barrier to limited resource communities in 

fully participating in the program. The Secretary should require 

matching grants commensurate with a community’s ability to pay, 

even to the point of only requiring a nominal amount in order to 

ensure the broadest participation. 

In developing a regional development plan it is imperative that 

local specialists representing many varied areas of expertise be included. The Secretary should give priority to grant applicants 

whose proposals include the broadest coalitions of regional and 

569

local organizations—both public and private. Entities eligible for 

matching grants include but are not limited to Councils of Government, Area Development Districts, Economic Development Districts, Local Development Districts, Planning and Development 

Districts, Regional Planning Commissions and Regional Councils of 

Government. (Section 613) 

The Senate amendment spends $5 million in 2002 for planning 

grants to conditionally approved program entities under Sec. 

385C(d). Spends $2 million in 2002 for private technical assistance 

under Sec. 358C(h). 

Amends the ConAct to create a Program that will provide rural 

communities with technical and financial assistance to develop and 

implement community development strategies. The Secretary shall 

approve a program entity to receive grants if the entity meets certain criteria, and once approved, the entity shall establish an endowment fund. The Secretary may award supplemental grants, not 

to exceed $100,000, to approved entities to assist in developing a 

strategy (Sec. 385C(d) see above). To be eligible for an endowment 

grant, approved entities shall develop and obtain the approval of 

the Secretary for a comprehensive strategy. An approved entity 

shall receive final approval if the strategy meets certain requirements, and the Secretary may make grants, not to exceed $6 million, to these entities to implement the strategy (Sec. 385C(f) see 

above). Approved entities must provide a 50% match of the amount 

received in grant funds, except in certain cases where it is determined that a lower non-federal share is allowable to invest and 

then use the funds for infrastructure improvements and/or investments in enterprises that will improve the area. Grants may be 

made, not to exceed $100,000, to qualified intermediaries to provide 

technical assistance and capacity building to approved entities (Sec. 

358C(h) see above). Authorizes such sums as are necessary for fiscal years 2004–2006. (Section 604) 

The Conference substitute adopts the House provision with an 

amendment to establish a National Board on Rural America that 

will make planning grants and innovation grants to certified Regional Investment Boards. A National Conference on Rural America will be held to address challenges in rural areas. A total of $100 

million is available to carry out this section. (Section 6030) 

For over 40 years rural policy scholars and analysts have recognized the absolute necessity of a more integrated, comprehensive 

rural policy framework. In establishing this framework, Section 

6030, will require the active participation of all Federal agencies, 

rural units of local government, development organizations, community-based organizations, rural nongovernmental organization, 

and the private and philanthropic sectors. While a collaborative effort and comprehensive planning is essential for success of any endeavor, no plan can succeed without resources for its implementation and completion. 

This program is designed to use Federal funds as a catalyst to 

bring together the various sectors from rural areas in order to 

make maximum use of Federal, state and local resources. 

The Managers intend that the appropriate population of an eligible area is between 50,000 and 150,000; however, the Managers 

expect the regional and national boards to make exceptions as 

570

needed. The target population does not include a metropolitan area 

which may be participating in a regional plan. 

The Managers understand the diversity of governance, governmental entities and governmental structure in the 50 states. In 

composing the regional boards, the Managers expect that it will include the broadest possible collection of public and private entities 

representative of the area or region of the eligible area. 

In appointing the National Board on Rural America, the Managers expect the Secretary to carefully consider individuals recommended by the Chairman and Ranking Members of the House 

Committee on Agriculture and the Senate Committee on Agriculture, Nutrition and Forestry, the Speaker of the House of Representatives, and the Majority Leader of the Senate. The Secretary 

is encouraged to consider seven recommendations from the House 

of Representatives and seven recommendations from the Senate. 

(10) Grants to Nonprofit Organizations To Finance the Construction, Refurbishing, and Servicing of Individually-Owned Household Water Well Systems in Rural Areas for Individuals With 

Low or Moderate Incomes 

The House bill amends the water and wastewater authorities 

under the ConAct to authorize the Secretary to make grants and 

loans to provide individual residential water wells. (Section 614) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an amendment limiting loans to $8,000 per water well system and authorizing the program at $10 million per fiscal year. (Section 6012) 

(11) National Rural Development Partnership 

The House bill adds a new section to Subtitle E of the ConAct 

to establish a National Rural Development Partnership composed 

of the Coordinating Committee and the state rural development 

councils. (Section 615) 

The Senate amendment amends Subtitle D of the ConAct to 

add the NRDP composed of the Coordinating Committee and the 

state rural development councils. (Section 611) 

The Conference substitute adopts the Senate provision with an 

amendment clarifying the Senate language and authorizing up to 

$10 million per fiscal year. (Section 6021) 

The Conference substitute includes provisions which are intended to ensure the accountability of State Rural Development 

Councils (SRDCs) to the rural residents they are expected to serve 

and to agencies which provide financial support for their operations. The Managers specifically intend that all SRDCs will continue to abide by or come into compliance with the structural and 

process guiding principles of this section. The Managers also intend 

that USDA/Rural Development State Directors and other employees of USDA and other Federal agencies with rural responsibilities 

will fully participate as voting members in the governance and operations of SRDCs on an equal basis with other SRDC members. 

The Managers expect the National Rural Development Coordinating Committee to make significant progress toward the goal of 

better coordinating the rural policies and programs of Federal 

agencies and developing greater collaboration between the Federal 

571

government, the States, and others with resources to invest in 

rural areas. 

The Partnership has depended on voluntary contributions of 

discretionary funds from multiple Federal agencies to support its 

activities. This system has not met all of the needs of the SRDC. 

Accordingly, the Conference substitute contains an authorization 

for annual appropriations of $10 million. The Managers encourage 

Federal agencies, whether or not they have contributed to the Partnership in the past, to financially support collaborative initiatives 

managed by SRDCs. The Managers specifically intend that all Federal funds that are provided to the SRDCs will be used solely for 

SRDC operations and projects and that the use of these funds will 

be controlled exclusively by the SRDCs’ governing boards. The 

Managers also strongly urge SRDCs to identify additional sources 

of non-Federal funds to support their activities. 

SRDCs currently operate in 40 States. The Managers encourage the Secretary to work with the remaining 10 States to establish SRDCs. 

(12) Eligibility of Rural Empowerment Zones, Rural Enterprise 

Communities, and Champion Communities for Direct and 

Guaranteed Loans for Essential Community Facilities 

The House bill amends Sec. 306(a) of the ConAct to authorize 

the Secretary to make or insure loans to communities designated 

as rural empowerment zones, rural enterprise communities or as 

champion communities to install or improve essential community 

facilities. (Section 616) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment to strike ‘‘champion communities’’. (Section 6001) 

The Managers intend that this provision affect only two communities—Lewiston, Maine, and Eagle Pass, Texas. These communities were designated rural Enterprise Communities in 1999, and 

this amendment would make them eligible for participation in essential community facility programs only. 

(13) Grants To Train Farm Workers in New Technologies and To 

Train Farm Workers in Specialized Skills Necessary for Higher 

Value Crops

The House bill provides that the Secretary may make grants 

to an entity to train farm workers to use new technologies and develop specialized skills for agricultural development. Authorizes no 

more than $10 million be appropriated to the Secretary for fiscal 

years 2002–2011 to make such grants. (Section 617) 

The Senate amendment is the same except it authorizes grants 

through 2006. (Section 646) 

The Conference substitute adopts the House provision with an 

amendment making technical changes and adding ‘‘farmer cooperatives’’ as an eligible entity. (Section 6025) 

(14) Loan Guarantees for the Purchase of Stock in a Farmer Cooperative Seeking To Modernize or Expand 

The House bill amends Sec. 310B of the ConAct to provide loan 

guarantees for individual farmers to purchase capital stock of a 

572

farmer cooperative established for an agricultural purpose. (Section 

618) 

See also Sec. 523 (Credit Title) of the House bill, which contains additional modifications to the B&I Loan Program to provide 

for guaranteed loans to projects in areas other than rural communities, in the case of insured loans, if a majority of the project involved is owned by individuals who reside and have farming operations in rural communities, and the project adds value to or processes agricultural commodities. 

The Senate amendment amends Sec. 310B of the ConAct to 

provide loan guarantees to farmers, ranchers or cooperatives to 

purchase start-up capital stock for expanding or creating an agriculture coop. The Secretary may guarantee a loan to a producer to 

join a coop in order to sell products he produces. Farmer coops eligible for B&I loans shall be eligible to refinance existing loans. The 

Secretary may establish appraisal standards for the Business and 

Industry Loan Program. The Secretary may assess a one-time fee 

for a loan guarantee, not to exceed 2% of the guaranteed principal 

portion of the loan. (Section 635) 

The Conference substitute adopts the Senate provision with an 

amendment to provide loan guarantees to purchase capital stock. 

The Secretary may make or guarantee a loan to a cooperative organization headquartered in a metropolitan area if the loan is used 

for a project in a rural area or meets the criteria of a cooperative 

generally. A cooperative organization shall be eligible to refinance 

an existing loan if certain requirements are met. The Secretary 

may guarantee a loan to a cooperative for a facility that is not located in a rural area if the facility provides value-added processing 

to producers located within 80 miles of the facility; if the primary 

benefit of the guarantee provides employment to rural areas; and 

the total amount of loans guaranteed does not exceed 10 percent 

of total loan guarantees in a fiscal year. The Secretary may consider the value of a properly appraised brand name, patent, or 

trademark of the cooperative in determining whether the cooperative organization is eligible for a loan guarantee. The Secretary 

may guarantee a loan that may not exceed $40 million for a project 

that is located in a rural area and provides for the value-added 

processing of agricultural commodities and the Secretary may not 

delegate the approval authority for such a guarantee. (Section 

6017) 

There is a 2% limit on an initial fee. That limit does not prevent annual fees which may be needed to preserve an appropriate 

program level. 

The Managers expect the Secretary, to consider on a priority 

basis, Business and Industry loan and loan guarantee program applications from eligible marketing cooperatives of agriculture producers for the purpose of constructing peanut storage facilities and 

for value-added agriculture and renewable energy. In regard to 

paragraphs (6) and (8), the 10 percent limit in each of those paragraphs is not a goal to be worked toward, but a limit. The Managers recognize that the loans or loan guarantees provided may be 

less than that level. 

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(15) Intangible Assets and Subordinated Unsecured Debt Required 

To Be Considered in Determining Eligibility of Farmer-Owned 

Cooperative for Business and Industry Guaranteed Loan 

The House bill amends Sec. 310B of the ConAct for this purpose. In considering applications for a loan guarantee from an agricultural cooperative, the Rural Business-Cooperative Service may 

consider the value of intangible assets such as trademarks, patents, 

licenses, and brands subject to appraisal, when evaluating the eligibility of an agricultural cooperative for loan guarantees. The 

same consideration may be given to unsecured subordinated debt, 

which may be viewed as the equivalent of equity in the cooperative. 

Both intangible assets and unsecured subordinated debt may be 

considered in determining the viability of a cooperative’s balance 

sheet. (Section 619) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment that the Secretary may consider the value of a properly appraised brand name, patent, or trademark of a cooperative. 

(Section 6017) 

(16) Ban on Limiting Eligibility of Farmer Cooperative for Business 

and Industry Loan Guarantee Based on Population of Area in 

Which Cooperative Is Located 

The House bill amends the ConAct so that in determining 

whether a cooperative organization owned by farmers is eligible for 

a guaranteed loan, the Secretary shall not apply any lending restrictions based on population to the area in which the cooperative 

is located. (Section 620) 

The Senate amendment provides for that loans can be made to 

coops headquartered in a metropolitan area if the project is in a 

rural area. (Section 635) 

The Conference substitute adopts the House provision with an 

amendment that the Secretary may guarantee a loan to a cooperative for a facility that is not located in a rural area if the facility 

provides value-added processing to producers located within 80 

miles of the facility; if the primary benefit of the guarantee provides employment to rural areas; and the total amount of loans 

guaranteed does not exceed 10 percent of total loan guarantees in 

a fiscal year. (Section 6017) 

(17) Rural Water and Waste Facility Grants 

The House bill removes the appropriation authorization from 

the rural water and waste water program under the ConAct, in effect providing such sums as may be necessary. (Section 621) 

The Senate amendment increases current law from $590 million in total spending per year to a new authorization of $1.5 billion per year. The Secretary may make grants to entities to capitalize revolving funds to provide loans to eligible borrowers to finance up to $100,000 of the costs of predevelopment, equipment, 

replacement, small systems extensions and other small water and 

wastewater projects. Authorizes appropriations of $30 million each 

fiscal year 2002–2006 for this subparagraph. (Section 621) 

574

The Conference substitute adopts the Senate provision with an 

amendment to authorize such sums as necessary for the rural 

water and waste water program. (Section 6002) 

(18) Rural Water Circuit Rider Program 

The House bill establishes permanently under the ConAct a 

national rural water circuit rider program to provide technical expertise to existing and start-up rural water systems throughout the 

country. Provides an authorization of appropriations of $15 million 

per year (Section 622) 

The Senate amendment is nearly identical to House bill except 

for (B) that contains language that says the new program ‘‘shall 

not affect the authority of the Secretary to carry out the circuit 

rider program for which funds are made available under the heading RCAP for 2002.’’ Also, the authorization for $15 million is only 

through 2006. (Section 623) 

The Conference substitute adopts the Senate provision with an 

amendment making the program permanent. (Section 6005) 

(19) Rural Water Grassroots Source Water Protection Program 

The House bill establishes a national source water protection 

program within the U.S. Department of Agriculture that will enable rural water associations to provide better services in the implementation of wellhead and ground water protection programs. 

The program is authorized at an annual appropriation of $5 million. (Section 623) 

The Senate amendment contains no comparable provision in 

rural development title, but see conservation title. 

The Conference substitute adopts the Senate provision. (Section 217 (1240Q)) 

(20) National Rural Cooperative and Business Equity Fund 

The Senate amendment amends the ConAct to establish the 

Fund, governed by a board of directors, to revitalize rural communities and sustain rural business development by providing federal 

funds and credit enhancements to a private equity fund in order 

to encourage investments by authorized private investors. The Secretary shall make $150 million available (subject to appropriations) 

for the fund which is to be matched by the investors; guarantee 

50% of each investment up to $300 million made by a Fund investor; guarantee 100% of the repayment of principal and accrued interest on approved debentures issued by the Fund, not to exceed 

$500 million. No single investment shall exceed the greater of $2 

million or 7% of the Fund. The total investment made in a company may not exceed 20% of the total investment in the project. 

Authorizes such sums as are necessary. (Senate 601) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(21) Rural Business Investment Program 

The Senate amendment spends $70 million in 2002 for subsidies and $50 million in 2002 for grants. 

Adds a new subtitle H to the ConAct that establishes a Rural 

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retary that, among other things, promotes economic development 

and the creation of wealth and job opportunities in rural areas. 

New Sec. 384A. defines various terms used by the Secretary to 

implement the RBIP, including the term Rural Business Investment Company (RBIC). 

New Sec. 384B. sets out the purposes of the RBIP to promote 

economic development and to establish a developmental venture 

capital program that addresses the unmet investment needs of 

small enterprises. The Secretary is authorized to enter into participation agreements with RBICs, guarantee RBIC debentures and 

make grants to RBICs. 

New Sec. 384C. establishes the RBIP. 

New Sec. 384D provides for the eligibility of companies to 

apply to participate in the RBIP if (1) the company is newly formed 

for-profit or a subsidiary of such company; (2) the company has a 

management team experienced in financing community development; and (3) the company will invest in enterprises that will create wealth and job opportunities. 

Applications to participate must contain a business plan, information about management’s experience in financing rural development, a description of how the company intends to work with community organizations to meet unmet capital needs, a proposal on 

how the company will use grant funds, an estimate of cash to inkind contributions the company will have in binding commitments, 

a description of the evaluation standards the company will use to 

determine whether or not it is meeting the RBIP’s purposes, information regarding the financial strength of the parent company or 

its subsidiary, and any other information the Secretary requires. 

The Secretary must issue within 90 days a status report about 

an application to participate and must approve or disapprove the 

application within a reasonable time and, on approval, issue a license for the operation of the applicant. If disapproved, the Secretary must notify the applicant in writing. 

The Secretary is required to make determinations about the 

applicant when reviewing and processing the application, including 

finding that the management personnel of the applicant are qualified to carry out the RBIP and generally have a good business reputation. 

The Secretary shall approve and designate the applicant as a 

RBIC if it is determined that the applicant qualifies, the area in 

which the RBIC will operate is acceptable and the applicant enters 

into a participation agreement. The applicant has a capital requirement of at least $2.5 million. 

New Sec. 384E provides that the Secretary is authorized to 

guarantee, using the full faith and credit of the United States, the 

timely payment of principal and interest on debentures issued by 

the RBIC. Debenture guarantees may not exceed 15 years. Such 

guarantees may not exceed the lesser of 300 percent of the private 

capital of the RBIC or $105 million, and may provide for use of discounted debentures. 

New Sec. 384F authorizes the Secretary to issue trust certificates that represent partial or full ownership of RBIC debentures. 

The Secretary may pool RBIC debentures on which the certificates 

are based and may guarantee the timely payment of principal and 

576

interest on the certificates. The Secretary may administer the guaranteed trust or pool to provide for prepayment of or defaults on debentures. Trust certificates are backed by the full faith and credit 

of the U.S.

The Secretary is required to provide for a central registration 

of all trust certificates and will subrogate and retain ownership 

rights over a debenture on which a claim is satisfied. The Secretary 

may maintain bank accounts and investments to facilitate the creation of trusts or pools of debentures. The Secretary may regulate 

brokers and dealers in RBIP trust certificates and require any person functioning as the Secretary’s agent to provide a bond or evidence of insurance. 

New Sec. 384G authorizes the Secretary to charge fees for the 

guarantee of debentures or grants, and the Secretary’s agents may 

collect a fee for operating a trust pool. The Secretary may charge 

a fee to license a RBIC. The Secretary shall use the fees to cover 

salaries and expenses of the Secretary and are authorized for covering the costs of licensing exams. 

New Sec. 384H authorizes the Secretary to make grants to 

RBICs over a multi-year period to be used only to provide operational assistance. RBICs must show how they will use grant 

funds. The amount of the grant can be up to the lesser of 10% of 

the private capital raise or $1 million. NOTE: INTENT was to also 

limit such funds to the lesser of twice the match provided by the 

RBIC. The Secretary may make grants to entities other than a 

RBIC under the same terms as it would to an RBIC. 

New Sec. 384I sets out the legal organization of RBICs, including their articles of incorporation if incorporated, and minimum 

levels of private capital acceptable to operate as a RBIC. The Secretary may accommodate lesser capital standards upon the showing of special circumstances and good cause. The Secretary shall 

ensure that the private capital is adequate for success and that at 

least 75 percent of the capital is invested in rural business and not 

more than 10% may be invested in a city of over 100,000 or its surrounding urbanized area. That the minimum amount of capital required for RBICs authorized to be issued guarantees on debentures 

shall be $10,000,000 or $5,000,000 with a determination by the 

Secretary regarding risk. Secretary also is required to ensure that 

the RBIC management is diversified and unaffiliated with the ownership of the RBIC. 

New Sec. 384J provides that national banks, Federal Reserve 

member banks, federal savings associations, Farm Credit System 

(FCS) institutions and other insured banks may invest in RBICs 

but in no event may a lending institution make a greater than five 

percent investment of its capital and surplus in RBICs. In the case 

of a FCS institution or a combination of FCS institutions holding 

more than 15 percent of the voting stock in a RBIC, the RBIC may 

not provide financial or equity investment assistance to any entity 

not otherwise eligible to receive financing from the FCS. 

The total invested by any of the described financial institutions 

shall not exceed 5% of their capital. 

New Sec. 384K sets out the reporting requirements. 

New Sec. 384L provides for the Secretary to direct a private 

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pating RBICs, and the Secretary may charge RBICs for the costs 

of such examinations. 

New Sec. 384M authorizes the Secretary to use the federal district courts to enforce compliance of all provisions of the RBIP set 

out in rules, regulations, orders or participation agreements should 

the Secretary have reason to believe a RBIC is engaging in or 

about to engage in any act or practice that violates the RBIP. In 

the event of violations, a court of competent jurisdiction may issue 

temporary or permanent injunctions, restraining orders or other orders to prohibit further activities and may appoint a trustee or receiver to manage the assets of a RBIC. The Secretary may act as 

a trustee or receiver. 

New Sec. 384N authorizes the Secretary to void RBICs’ participation agreements and to stop the exercise of all rights and privileges as a RBIC. A RBIC must be found to be in violation of the 

RBIP before the loss of such privileges. 

New Sec. 384O provides that RBICs and other, associated persons involved in any activity that violates the act to be held together to the extent the associated persons authorize or otherwise 

bring about the violation. Any mismanagement or misconduct shall 

be a breach of fiduciary responsibility and unlawful. Any person associated with the RBIC that commits any unlawful act or practice, 

or fails in any act or practice, that would result in the RBIC suffering financial losses has breached his fiduciary responsibility. 

This section further provides suitability rules for officers or agents 

of the RBIC and makes any breach of those rules to be unlawful 

acts. 

Sec. 384P provides procedures for removing officers or agents 

of a RBIC. 

Sec. 384Q requires the Secretary to enter into an interagency 

agreement with the Small Business Administration to carry out the 

day-to-day management and operation of the RBIP. 

Sec. 384R authorizes the Secretary to write regulations to 

carry out the RBIP. 

Sec. 384S provides $350 million for the guarantee of debentures and $50 million for grants from Treasury funds not otherwise 

appropriated to carry out the RBIP. Such funds shall remain available until spent. 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment making clarifying changes and that the Secretary shall 

enter into an interagency agreement with another federal agency 

that has expertise in operating a program of this nature. The Conference substitute provides $100 million to carry out this program. 

(Section 6029) 

This program addresses the crucial problem of limited equity 

capital in rural America. The program allows investment companies to considerably leverage their equity resources, increasing the 

equity funds available in rural America by attracting capital for 

the program and through the leverage that the program provides. 

Only for profit Rural Business Investment Companies (RBIC) may 

apply because the profit motive and danger of loss will help minimize losses to the government. The Managers believe that a high 

578

quality management team of the applicants is crucial for success 

and expects that this factor will be given solid consideration. 

Financial institutions may participate in the program as set 

forth in the program. The Managers intend that financial institution regulators including the Farm Credit Administration, the Office of the Comptroller, the Federal Reserve, state bank regulators, 

and other financial institution regulators continue to have the authority to impose on any financial institution that they regulate 

any safeguard, limitation, or condition that the regulator considers 

to be appropriate (including, without limitation, any investment 

limit that is lower than the investment limit that this section imposes on insured depository institutions). The strong expectation of 

the Managers is that RBICs will not normally engage in lending 

of a type performed by regulated financial institutions except in circumstances where such assistance is not likely to be available and 

where the equity investment makes such arrangements prudent 

given the overall risks involved. 

The program is modeled after the Small Business Investment 

Company program, where considerable expertise in operating the 

program that provides capital for equity investments has been developed. That program shares many of the same provisions with 

the RBIC program that is being enacted allowing day-to-day management to follow almost identical practices with a few exceptions 

such as those dealing with the grants program and rural targeting 

of investments. It is the expectation of the Managers that the Secretary enter into an agreement under the Economy Act within 60 

days of enactment with that appropriate agency. 

It is the expectation of the Managers that a considerable share 

of the rules and operating procedures for this program will be the 

same as the rules and operating procedures for the Small Business 

Investment Company program. Given that reality, it is the Manager’s expectation that rules implementing this program can be 

proposed in a very short time period. The grant provisions are similar to the New Markets Venture Capital Program. 

(22) Full Funding of Pending Rural Development Loan and Grant 

Applications 

The Senate amendment spends a CBO estimated $454 million 

in 2002 (no future spending) to close out the backlog in the following rural development programs: community facility direct 

loans and grants; water and waste disposal direct loans and grants; 

rural water or wastewater technical assistance and training grants; 

emergency community water assistance grants; B&I guaranteed 

loans; solid waste management grants. Applications in the 

preapplication phase are not eligible for funding under this provision. (Section 603) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to provide $360 million to fund pending applications 

for water and waste disposal system grants and loans, with priority 

to water systems. (Section 6031) 

579

(23) Enhancement of Access to Broadband in Rural Areas 

The Senate amendment spends $100 million each year 2002–

2006. Amends the Rural Electrification Act. The Secretary shall 

make grants, loans, and loan guarantees at 4% or market rate interest to construct, improve, acquire facilities and equipment to 

provide broadband service to rural communities with no more than 

20,000 residents. Funding will be allocated to states, and funds not 

obligated by April 1 will go in a national pool to be used by the 

Secretary to make grants, loans, and loan guarantees in any state. 

(Section 605) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to provide loans and loan guarantees for broadband 

service and to clarify what entities are eligible to receive a loan or 

loan guarantee. (Section 6103) 

The Managers expect that the state government or local government or any agency, subdivision or instrumentality thereof (including consortia thereof) will be permitted to file applications during the three-month waiting period after the RUS has promulgated 

rules on the broadband program in order to keep their place in line 

for the next available round of funding. 

The Managers expect the RUS to evaluate the priority status 

of all pending broadband applications as soon as practicable after 

the date of enactment. Any completed application which meets the 

priority criteria should be evaluated for expedited approval. The 

Managers expect the Agency to determine the priority status of applications on hand at least once every quarter. In general, all other 

applications should be evaluated and awarded on a first come first 

serve basis. 

The Managers are aware that in the current broadband pilot 

program RUS has generally used the FCC’s definition of broadband 

services. It is the Manager’s intent that this practice should continue and that is why the Manager’s used the definition of 

broadband services that is currently being used by the FCC and 

the RUS. The Managers want to make clear that the purpose behind using this definition was to maintain the current high standard used by RUS in determining what a broadband service is. 

However, the Managers expect the Administrator will apply a 

definition of broadband services to encourage new broader bandwidth technologies in rural areas and that the program will foster 

the development of a variety of technological applications including 

terrestrial and satellite wireless services. This is a critical function 

since this is a rapidly changing technology. 

The Managers have taken no position on particular technologies and believe that it is very important for the Department 

not to choose among adequate technologies. The Managers expect 

the Secretary to participate in any FCC proceedings or Department 

of Commerce study of the future of broadband services and the 

markets for such services. 

The Managers are aware that the RUS has administered a 

telecommunications program for over 50 years. To date there has 

not been a loan loss in that program. The Managers expect, that 

given that record, program levels will fully take that reality into 

580

account. The Managers intend for direct loans to be made at the 

treasury rate of interest in most circumstances. 

(24) National Rural Development Information Clearinghouse 

The House bill extends the National Rural Information Center 

Clearing-House—(7 U.S.C. 3125b(c)) through 2011. (Section 701) 

The Senate amendment amends Section 2381 of the Food, Agriculture, Conservation, and Trade Act of 1990 to establish a Clearinghouse at USDA to collect and disseminate information about 

programs and services available to a person or entity in a rural 

area regarding financial, technical or other assistance. The Clearinghouse will maintain an Internet website, and the Secretary 

shall use not more than $600,000 of the funds available to RHS, 

RUS, RBS each fiscal year to operate and maintain the Clearinghouse. (Section 607) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7101) 

The Managers expect the Rural Development mission area of 

the Department to highlight the existence and resources of the 

Rural Information Center of the National Agricultural Library on 

its websites and in its informational materials. 

(25) Multijurisdictional Regional Planning Organizations 

The Senate amendment amends the ConAct to allow the Secretary to provide grants up to $100,000 to multijurisdictional regional planning organizations to pay for costs of assisting local governments to improve infrastructure, services and business development capabilities. Authorizes appropriations for $30 million in each 

year 2003–2006. A local match is required. (Section 624) 

The House bill contains no comparable provision.

The Conference substitute adopts the Senate provision. (Section 6006) 

(26) Certified Nonprofit Organizations Sharing Expertise 

The Senate amendment amends Sec. 306(a) of the ConAct. The 

Secretary shall certify nonprofit organizations (which may include 

an institution of higher education) that demonstrate experience in 

providing technical assistance to improve infrastructure, services 

and business development capabilities of local governments, and 

make this list available to the public. Authorizes appropriations of 

$20 million each fiscal year 2003–2006 to make grants to certified 

organizations. (Section 625) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(27) Loan Guarantees for Certain Rural Development Loans 

The Senate amendment amends Sec. 306(a) to authorize the 

Secretary to guarantee loans made for community facilities or 

water and sewer systems, including loans financed by bond 

issuances described by Section 144(a)(12)(B)(ii) of the IR code. 

(NOTE: currently, projects with bonds receiving assistance under 

that section may not receive other government support. This section does not impact the IRS provision). Any individual or entity 

581

offering to buy these loans may receive the guarantee if the individual or entity demonstrates that person can continue the performance of the loan and can generate capital to assist borrowers 

of loans with additional credit needs to ensure servicing of loans. 

Amends Sec. 310B. to authorize the Secretary to guarantee 

loans made to finance bond issues for the provision of community 

facilities or water and sewer systems. (Section 626) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to change the reference to section 142(a) of the Internal Revenue Code of 1986. (Section 6007) 

The Managers intent is that this section will allow the Department to provide support for noted projects in the event the IRS 

code is modified to allow such support without adversely affecting 

tax benefits. 

(28) Rural Firefighters and Emergency Personnel Grant Program 

The Senate amendment spends $10 million in 2002 and then 

$30 million each year 2003–2006. Amends the ConAct to establish 

a grant program to provide scholarships to local government units 

to train firefighters and emergency medical personnel in firefighting, emergency medical practices, and responding to hazardous 

material and bioagents. Not less than 60% of the funds shall be 

used for this purpose. Grants may be used for facility improvements, equipment, operating, or establishing regional training centers. Not more than 40% may be used for the facility grants. The 

federal share of the facility grants shall not exceed 50%. (Section 

627) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

technical amendment to clarify that the Secretary shall give priority to grant applicants that provide for training within the region 

or locality in which the grant applicant is located. The Conference 

substitute provides for a funding level of $10 million for each of fiscal years 2003 through 2007, and as a result of this lower level of 

overall funding for the program, reduces the $2 million limitation 

for any single training center in any single year to $750,000. (Section 6405) 

The Managers expect that efforts will be made to minimize 

travel costs in order to maximize actual training provided. In order 

to minimize costs, appropriate training facilities within the area or 

region should be utilized whenever possible. Many firefighter and 

first responder training facilities, some with specialized functions 

such as farm safety have received USDA or FEMA assistance in 

the past, have excellent reputations but have significant facility 

needs. It is expected that the Department give a high priority to 

such facility needs. 

(29) Tribal College and University Essential Community Facilities 

The Senate amendment amends Section 306(a) of the ConAct 

to add a provision allowing the Secretary to make grants to tribal 

colleges and universities to help them develop essential community 

facilities in rural areas. The federal share is not to exceed 75% of 

582

the total cost of these facilities. Authorizes $10 million a year for 

each of fiscal years 2003 through 2006. (Section 628) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 6008) 

(30) Water and Waste Facility Grants for Native American Tribes 

The Senate amendment amends Section 306C of the ConAct to 

authorize appropriations for $30 million in grants, $30 million in 

loans, and $20 million in grants to benefit Indian tribes each year 

2002–2006. (Section 630) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 6010) 

(31) Rural Business Enterprise Grants 

The Senate amendment amends Section 310B(c)(1) of the 

ConAct by creating a priority in awarding grants under this program to non-profit entities operating on tribal land in an area with 

a population of no more than 5,000. (Section 632) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 6014) 

In many rural tribal communities, tribes and tribal governments play a dominant role in the economic development of the 

area. As a result, unique patterns of economic development exist 

whereby the local economy is often composed of a single dominant 

employer. Because of these circumstances, many organizations located in isolated tribal communities are often unable to receive assistance from the Rural Business Enterprise Grant program. The 

Managers recognize the different patterns of economic development 

that exist in many rural tribal communities. 

It is the Managers expectation that funds made available 

under this provision will be used to assist in the financing or development of small and emerging businesses located in communities 

of less than 5,000 people on tribal lands or former tribal lands 

without respect to revenue or employee limitations. Funds made 

available under this provision may only be used to create, expand 

or operate value-added agricultural processing facilities.

(32) Grants to Broadcasting Systems 

The Senate amendment amends section 310B(f) of the ConAct 

by adding: $5 million is authorized per year from 2002–2006 for 

this subsection. (Section 634) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 6016) 

(33) Value-Added Intermediary Relending Program 

The Senate amendment amends sec. 310B of the ConAct. The 

Secretary shall make loans to eligible intermediaries, including 

State agencies, to make loans to recipients for projects to establish, 

enlarge, or operate enterprises adding value to agriculture products 

and commodities. Intermediaries shall give preference to bioenergy 

583

projects. Limits loans to $2 million except in cases where the intermediary is a state agency. Authorizes $15 million to be appropriated for fiscal years 2003–2006. (Section 636) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(34) Use of Rural Development Loans and Grants for Other Purposes 

The Senate amendment amends subtitle A of the ConAct. If, 

after making a loan or grant, the Secretary determines the circumstances under which the loan or grant was made have sufficiently changed, the Secretary may allow the recipient to use the 

loan or grant for other purposes, meeting certain requirements. 

(Section 637) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 6018) 

(35) Simplified Application Forms for Loan Guarantees 

The Senate amendment amends Sec. 333A of the ConAct. The 

Secretary shall provide lenders a simplified application for guarantees of farmer program loans under $100,000 and B&I guaranteed 

loans under $400,000. It also provides that after 2003, USDA may 

increase to $600,000 the limit on the size B&I loans eligible to use 

the simplified application process. The Secretary shall develop a 

process that accelerates processing applications for water and 

waste disposal grants and loans. (Section 638) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to allow the simplified application process to be used 

for guarantees of farmer program loans under $125,000. (Section 

6019) 

(36) Definition of Rural and Rural Area 

The Senate amendment amends Sec. 343(a) of the ConAct so 

that a ‘‘rural area’’ means a city, town or unincorporated area with 

a population of 50,000 or less (applied to Community Facility loans 

and grants, B&I direct and guaranteed loans, Sections 601 and 

638); 10,000 or less for water and waste disposal grants and loans. 

Other definitions of rural are provided for multijurisdictional regional planning organizations and the microenterprise program 

(Section 639) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

technical amendment to clarify the definition of ‘‘rural’’ and ‘‘rural 

areas’’, and reduce the population requirement for the Community 

Facilities Program from 50,000 to 20,000. (Section 6020) 

(37) Rural Enterprises and Microenterprise Assistance Program 

The Senate amendment spends $10 million each year from 

2002–2006. Amends Subtitle D of the ConAct to establish a Program to provide low- and moderate-income individuals with skills 

to start new small businesses in rural areas, and to provide continuing technical assistance through local organizations as these 

584

new businesses begin operating. Grants may be made to qualified 

organizations to provide training and technical assistance. (Section 

642) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(38) Rural Seniors 

The Senate amendment amends Subtitle D of the ConAct. The 

Secretary shall establish an interagency committee to examine special problems of rural seniors and report recommendations to the 

Senate and House Ag Committees. Authorizes $25 million to be appropriated each fiscal year 

2003–2006 for grants to nonprofit organizations of up to 20% of the 

cost of programs that provide facilities, equipment and technology 

for seniors. 

Reserves no less than 12.5% of the Community Facilities program funds for Senior Facilities up to April 1 of each fiscal year. 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(39) Children’s Day Care Facilities 

The Senate amendment provides that Sec. 306(a)(19) of the 

ConAct is amended to reserve no less than 10% of the Community 

Facilities funds for grants to pay the cost share of developing and 

constructing day care facilities for children in rural areas up to 

April 1 of each fiscal year. (Section 642) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 6004) 

(40) Rural Telework 

The Senate amendment amends Subtitle D of the ConAct. The 

Secretary shall make a grant to an eligible organization to pay the 

cost of establishing a national rural telework institute. Nonprofit 

organizations and educational institutions may receive a grant of 

up to $500,000 for obtaining equipment and facilities to establish, 

expand or operate telework locations in rural areas. A 50% match 

is required. Authorizes $30 million for each fiscal year 2002–2006, 

of which $5 million each year will establish the institute. (Section 

643) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that the matching requirement for a grant be 30 percent the first three years of a project and 50 percent during the 

fourth and fifth years. The Conference substitute also prescribes 

non-federal contribution requirements and grant amounts. (Section 

6022)

(41) Historic Barn Preservation 

The Senate amendment provides that Subtitle D of the ConAct 

is amended so the Secretary may make grants or enter into agreements with states to rehabilitate, preserve, or identify historic 

barns. Authorizes $25 million total for fiscal years 2002–2006. (Section 644) 

585

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to authorize such sums as necessary. (Section 6023) 

(42) Grants for Emergency Weather Radio Transmitters 

The Senate amendment amends Subtitle D of the ConAct. Authorizes $2 million each fiscal year 2002–2006 so the Secretary 

may make grants to public and nonprofit entities for acquiring 

radio transmitters to increase coverage of rural areas by the emergency weather broadcast system. (Section 645) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

technical amendment. (Section 6024) 

The Managers are concerned that many rural and remote 

areas in the United States do not have access to timely and accurate alerts and warnings regarding severe weather in the vicinity. 

In many cases, timely weather warnings may be the difference between life and death for individuals in the path of severe weather. 

It is the Managers intent that this grant program increase the coverage area of the all hazards weather radio broadcast system of the 

National Oceanic and Atmospheric Administration to as many 

rural and remote areas as possible. 

(43) Delta Regional Authority 

The Senate amendment provides that Sec. 382D of the ConAct 

is amended to clarify (as a drafting matter) the provision relating 

to supplements to federal grant programs. Subtitle D of the ConAct 

is amended to add 4 Alabama counties to the definition of Lower 

Mississippi, and to allow grants for research at a particular university. Sec. 382M(a) of the ConAct is amended by extending authorization of appropriations and authority to 2006. (Section 647) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment clarifying the voting structure. (Section 6027) 

(44) SEARCH Grants for Small Communities 

The Senate amendment amends the ConAct. States may establish a Council that may apply for a grant of no more than $1 million. The Council will use this funding to award SEARCH (special 

environmental assistance for the regulation of communities and 

habitat) grants to communities with a population with 2,500 or less 

for an environmental project or to comply with an environmental 

law. Authorizes $51 million in appropriations and such sums as are 

necessary to carry out this section. (Section 648) 

The House bill contains no comparable provision. 

The Conference substitute does not amend the ConAct. It 

adopts the Senate provision with an amendment to administer this 

program through the State Rural Development Directors, in coordination with the environmental protection director of the State. 

(Sections 6301, 6302, 6303, 6304) 

The consultation and coordination provided by the Environmental Protection Agency is for technical and informational purposes; the Managers intend that the State rural development direcVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00589 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
586

tors award SEARCH grants in each state. Annual appropriations 

are authorized at $1,000,000 per state per year. 

The State rural development directors are expected to appoint 

the members of the independent citizens’ councils, which will help 

receive and review SEARCH grant applications from communities 

in the state. After a review of the applications by the council, in 

coordination with the State rural development director and the 

state environmental protection director, the State rural development directors will award SEARCH grants to communities for environmental projects that are necessary to carry out initial feasibility 

studies or to assist communities that demonstrate an inability to 

obtain sufficient funding from traditional sources as determined by 

the State rural development directors, in coordination with state 

environmental directors and the Council. Some State and Federal 

environmental laws and regulations require initial feasibility or environmental studies prior to undertaking an environmental project. 

It is the Managers’ intent that SEARCH grants provided to communities for the purposes of carrying out an initial feasibility or 

environmental study be consistent with applicable State and Federal laws. It is not the Managers’ intent to prohibit SEARCH 

grants to communities for initial feasibility or environmental studies where such requirements do not exist. 

The Managers are aware that many communities do not have 

experts with the technical ability to complete the paperwork and 

other documents accompanying traditional funding programs. 

Therefore, it is the Managers’ intent that the application process 

be simplified and streamlined as is practicable. State rural development directors should work with rural communities to identify the 

requirements of such a simplified application process. 

Many communities coping with environmental laws and regulations are economically distressed and lack the resources to comply with mandates without grant assistance. It is the Managers’ intent that State rural development directors not seek a local match 

from communities for grants awarded if it will result in economic 

hardship to the community in question. State rural development directors should reserve match requirements for specific situations 

and circumstances, and allow communities reasonable amounts of 

flexibility to provide, in lieu of cash payment, in-kind contributions 

when calculating the cost-share amount. 

(45) Northern Great Plains Regional Authority 

The Senate amendment amends the ConAct to establish the 

Authority to be composed of one member appointed by the President and confirmed by the Senate, and the Governors of the states 

participating in the Authority (Iowa, Minnesota, Nebraska, North 

Dakota and South Dakota). The Authority may approve grants to 

state and local governments, public and nonprofit entities for 

projects including transportation and telecommunication infrastructure, business development, and job training. Establishes distressed areas in which to target funding as well as a minimum requirement for the distribution of funds among the states. State and 

regional development plans and grant applications must be approved by the Authority. Authorizes $30 million each fiscal year

2002–2006 for the Authority, which expires in 2006. (Section 649) 

587

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision (Section 

6028) 

The Northern Great Plains Regional Authority is authorized in 

the states of Iowa, Minnesota, Nebraska, North Dakota, and South 

Dakota. The Authority is expected to develop a series of comprehensive coordinated plans for the economic development of the 

region. The Conference substitute authorizes appropriations of 

$30,000,000 in each of fiscal years 2002 through 2007. 

Grants will be made by the Authority particularly to those 

counties which are distressed, with a special emphasis on transportation, telecommunications, and basic infrastructure such as sewer 

and water facilities as funds become available. The Managers recognize the ongoing rural development efforts that have evolved 

from the recommendations of the Northern Great Plains Rural Development Commission. The Commission was established in 1994 

through the passage of P.L. 103–318 to prepare a 10-year rural development strategy for the Northern Great Plains Region. The 

Managers support the efforts of the Northern Great Plains, Inc. to 

implement the Commission’s recommendations and urge the Department, along with this organization, to continue to advance the 

findings of the Commission. 

It is the expectation of the Managers that staff resources of 

that organization are allocated in a balanced manner to the benefit 

of all parts of the region. Grants to the Authority must be allocated 

geographically so each state receives at least one third of its proportional population share without regard to the level of distress 

of counties in that state. 

(46) Alternative Agricultural Research and Commercialization Corporation 

The House bill extends Sec. 722. Alternative Agricultural research and commercialization revolving fund. (7 U.S.C. 5908(g)(1) 

and capitalization (7 U.S.C. 5908(g)(2) through 2011. (Section 651) 

The Senate amendment repeals Subtitle G of Title XVI of the 

1990 FACTA. The assets of the Corporation are transferred to the 

Secretary, and funds and any income shall be deposited into an account in the Treasury to pay outstanding claims or obligations of 

the Corporation and the cost of carrying out this section. There are 

other conforming amendments. (Section 651) 

The Conference substitute adopts the Senate provision with a 

technical amendment. (Section 6201) 

(47) Telemedicine and Distance Learning Services in Rural Areas 

The Senate amendment amends Section 2335A of the 1990 

FACTA to extend this provision through 2006. (Section 652) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 6203) 

The Managers direct that public television entities are eligible 

to receive assistance under this section for high speed telecommunication services in rural areas to provide educational programming for schools and communities in rural areas. 

588

(48) Guarantees for Bonds and Notes Issued for Electrification or 

Telephone Purposes 

The Senate amendment amends the REA. The Secretary shall 

guarantee bonds and notes issued by an eligible private lender if 

the proceeds are used for electrification or telephone projects eligible for assistance under this Act. The Secretary may not guarantee 

the bonds if they are not of reasonable and sufficient quality and 

for several other reasons. Bonds funding electric generation 

projects are specifically excluded from this program. Authorizes 

such sums as are necessary. Provides for fees for the issuance of 

the guarantees. 

Proceeds from the fees minus certain costs are placed in an 

economic development subaccount. Grants as provided by current 

law are made from the subaccount for economic development. (Section 661) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

technical amendment. (Section 6101) 

This section provides for a new source of private funding for 

the Rural Economic Development Loan and Grant (REDLG) program. Since enactment in 1987, the REDLG program has provided 

approximately $185 million in economic development assistance to 

rural communities in the form of grants and zero-interest loans for 

rural development projects such as water and waste, business incubator, schools, hospitals, emergency services, and general economic 

and community development. 

Private funding is provided through the payment of an annual 

30 basis point fee by lenders that issue bonds or notes guaranteed 

by the Administrator of RUS under this section. These fees are 

placed in a sub-account for the purpose of providing the budget authority for eligible economic development projects through intermediaries participating in the REDLG program. 

The provision provides for safety and soundness and permits 

the Administrator to deny the request of a lender for a guarantee 

if the lender does not have expertise and experience in rural utility 

lending, or issues bonds that, without the guarantee, would not be 

of investment grade quality. In addition, a lender should provide 

documentation that the proceeds of a guaranteed bond or note are 

used for eligible REAct purposes. 

This provision further requires that a private lender make payments on the bonds or notes even if a loan made using the proceeds 

of such bond or note is not repaid to the lender. This effectively 

places the lender between the RUS and the borrower minimizing 

the risk to the government 

(49) Expansion of 911 Access 

The Senate amendment amends Title III of the REA. The Secretary may make telephone loans to state or local governments, Indian tribes, or other public entities for facilities and equipment to 

expand 911 access in rural areas. Authorizes such sums as are necessary. (Section 662) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with a 

technical amendment. (Section 6102) 

589

TITLE VII—RESEARCH AND RELATED MATTERS

SUBTITLE A—EXTENSIONS

(1) Market Expansion Research 

The House bill extends section 1436(b)(3)(C) of the Food Security Act of 1985 (7 U.S.C. 1632(b)(3)(c)) through 2011. (Section 700) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment to repeal Section 1436(b)(3)(C) of the Food Security Act 

of 1985. (Section 7303) 

(2) National Rural Information Center Clearing-House 

The House bill extends section 2381(e) of the Food, Agriculture, 

Conservation, and Trade Act of 1990 (7 U.S.C. 3125b(e)) through 

2011. (Section 701) 

The Senate amendment amends and generally revises section 

2381(e) of the Food, Agriculture, Conservation, and Trade Act of 

1990 and transfers authority from the research mission area to the 

rural development mission area. (Section 607) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. The Managers expect the Rural Development mission area of the Department to highlight the existence and resources of the Rural Information Center of the National Agricultural Library on its websites 

and in its informational materials. (Section 7101) 

(3) Grants and Fellowships for Food and Agricultural Sciences 

Education 

The House bill extends section 1417(1) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3152(1)) through 2011. (Section 702) 

The Senate amendment amends section 1417 of NARETPA in 

several places to expressly include teaching and educational programs in ‘‘rural economic, community, and business development’’

as eligible purposes or recipients under this grant program and extends the authorization through 2006. (Section 703) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7102) 

(4) Policy Research Centers 

The House bill extends section 1419A(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3155(d)) through 2011. (Section 703) 

The Senate amendment extends NARETPA (7 U.S.C. 3155(d)) 

through 2006. (Section 706(2)) 

The Conference Substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7103) 

590

(5) Human Nutrition Intervention and Health Promotion Research 

Program 

The House bill extends section 1424(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3174(d)) through 2011. (Section 704) 

The Senate amendment amends section 1424 of NARETPA to 

extend authorization through 2006. (Section 707) 

The Conference Substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7104) 

(6) Pilot Research Program To Combine Medical and Agricultural 

Research 

The House bill extends section 1424A(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3174a(d)) through 2011. (Section 705) 

The Senate amendment extends section 1424A of the 

NARETPA through 2006. (Section 708) 

The Conference Substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7105) 

(7) Nutrition Education Program 

The House bill extends section 1425(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3175(c)(3)) through 2011. (Section 706) 

The Senate amendment extends section 1425 of NARETPA 

through 2006. (Section 709) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7106) 

(8) Continuing Animal Health and Disease Research Programs 

The House bill extends section 1433(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3195(a)) through 2011. (Section 707) 

The Senate amendment extends section 1433 of NARETPA 

through 2006. (Section 710) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7107) 

(9) Appropriations for Research on National or Regional Problems 

The House bill extends section 1434(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3196(a)) through 2011. (Section 708) 

The Senate amendment extends section 1434 of NARETPA 

through 2006. (Section 711) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7108) 

591

(10) Grants to Upgrade Agricultural and Food Sciences Facilities at 

1890 Land-Grant Colleges, Including Tuskegee University 

The House bill extends section 1447(b) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3222b(b)) through 2011. (Section 709) 

The Senate amendment amends section 1447 of NARETPA to 

increase the authorization from $15 million to $25 million and extends the authorization through 2006. (Section 760) 

The Conference substitute adopts the Senate provision with an 

amendment authorizing such sums as necessary and extending the 

authorization through 2007. (Section 7109) 

(11) National Research and Training Centennial Centers at 1890 

Land-Grant Institutions 

The House bill extends section 1448(a)(1) and (f) of the National Agricultural Research, Extension, and Teaching Policy Act of 

1977 (7 U.S.C. 3222c(a) (1) and (f)) through 2011. (Section 710) 

The Senate amendment extends section 1448 of NARETPA 

through 2006 and strikes ‘‘centennial’’ and replaces it with ‘‘virtual’’ each place it appears. (Section 761) 

The Conference Substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7110) 

(12) Hispanic Serving Institutions 

The House bill extends section 1455(c) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3241(c)) through 2011. (Section 711) 

The Senate amendment extends section 1455 of NARETPA 

through 2006. (Section 712) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7111) 

(13) Competitive Grants for International Agricultural Science and 

Education Programs 

The House bill extends section 1459A(c) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3292b (c)) through 2011. (Section 712) 

The Senate amendment extends section 1459A of NARETPA 

through 2006. (Section 713) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7112) 

(14) University Research 

The House bill extends subsections (a) and (b) of section 1463 

of the National Agricultural Research, Extension, and Teaching 

Policy Act of 1977 (7 U.S.C. 3311(a) and (b)) through 2011. (Section 

713) 

The Senate amendment extends section 1463(a) of NARETPA 

to increase the authorization from $850 million per year to $1.5 billion per year, and extends the authorizations in subsections (a) and 

(b) to 2006. (Section 716) 

592

The Conference substitute adopts the House provision with an 

amendment authorizing such sums as necessary and extending the 

authorization through 2007. (Section 7113) 

The Managers encourage the Secretary to review USDA competitive grants programs administered by the Cooperative States 

Research, Education and Extension Service and provide to Congress a report that includes an accounting of the success of minority-serving institutions in accessing competitive research funding 

during the applicable fiscal year, and recommendations for steps 

that Congress, the Administration and the minority-serving institutions might take to achieve greater success by minority-serving institutions in securing competitively awarded grant funds. 

(15) Extension Service 

The House bill extends section 1464 the National Agricultural, 

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

3312) through 2011. (Section 714) 

The Senate amendment extends section 1464 of NARETPA to 

increase the authorization from $420 million to $500 million and 

extend it through 2006. (Section 717) 

The Conference substitute adopts the House provision with an 

amendment authorizing such sums as necessary and extending the 

authorization through 2007. (Section 7113) 

The Managers recognize the importance of ensuring that 

America’s farmers and ranchers have the tools necessary to remain 

the most productive, efficient and competitive producers in the 

global marketplace. Due to the complexity of marketing and management issues, intensive educational efforts have proven effective 

in helping producers increase their returns. The Agricultural Risk 

Protection Act acknowledged the need to establish a risk management education program to inform agricultural producers about the 

full range of risk management activities available to them. 

One program that has proven to be successful is the Master 

Marketer Educational System (MMES) conducted by Texas Cooperative Extension. This intensive training course takes producers 

from an intermediate to an advanced level in marketing/risk management. Program graduates serve as volunteer leaders in establishing and /or revitalizing marketing clubs in their home county 

to share what they have learned. Two-year post-training surveys 

have indicated that graduates have increased their returns by 

$25,000 to $30,000 per year. While the Master Marketer training 

and marketing clubs are the cornerstones of the system, MMES 

also includes an advanced topic series for producers and an indepth risk management training for lenders. The Managers encourage the Secretary of Agriculture to expand such programs to provide quality risk management training for farmers across the country. 

(16) Supplemental and Alternative Crops 

The House bill extends section 1473D(a) the National Agricultural, Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3319d(a)) through 2011. (Section 715) 

The Senate amendment extends section 1473D of NARETPA 

through 2006. (Section 720) 

593

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7115) 

(17) Aquaculture Research Facilities 

The House bill extends section 1477 of the National Agricultural, Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3324) through 2011. (Section 716) 

The Senate amendment extends section 1477 of NARETPA 

through 2006. (Section 721) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7116)

(18) Rangeland Research 

The House bill extends section 1483(a) of the National Agricultural, Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3336(a)) through 2011. (Section 717) 

The Senate amendment extends section 1483 of NARETPA 

through 2006. (Section 722) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7117) 

(19) National Genetics Resources Program 

The House bill extends section 1635(b) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5844(b)) is 

extended through 2011. (Section 718) 

The Senate amendment extends section 1635 of the FACT Act 

through 2006. (Section 731) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7118) 

(20) High-Priority Research and Extension Initiatives 

The House bill extends section 1672(h) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925(h)) is 

extended through 2011. (Section 719) 

The Senate amendment extends section 1672 of the FACT Act 

through 2006. Section 734) 

The Conference substitute combines the House and Senate provision, conforming to the format of the House provision and extending the authorization through 2007. (Section 7119) 

The Managers note that the US Department of Agriculture has 

relocated the Western Human Nutrition Research Center 

(WHNRC) to the University of California, Davis campus. In order 

to ensure that the full potential of a research and education partnership between the WHNRC and the University is realized, the 

Managers fully expect the Secretary of Agriculture to establish a 

Cooperative Agreement, to replace the current Memorandum of 

Understanding, with the University of California for the management of the WHNRC by August 1, 2002. 

The Managers expect that the Secretary shall, in making 

grants under paragraph 41, give priority to proposals to: (i) estabVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00597 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
594

lish and coordinate priorities for genetic evaluation of domestic beef 

cattle; (ii) consolidate research efforts to reduce duplication of effort 

and maximize the return to beef industry; (iii) streamline the process between the development and adoption of new genetic evaluation methodologies by the industry; (iv) identify new traits and 

technologies for inclusion in genetic programs in order to reduce 

the costs of beef production and provide consumers with a high nutritional value, healthy, and affordable protein source or create decision making tools that incorporate the increasing number of traits 

being evaluated and the increasing amount of information from 

DNA technology into genetic improvement programs, with the goal 

of optimizing the overall efficiency, product quality and safety, and 

health of the domestic beef cattle herd resource. 

The Managers recognize the importance of proper management 

and stewardship of the Ogallala Aquifer and other natural resources to the long-term viability of agricultural enterprises and 

communities in the Central and Southern Great Plains. The Managers recognize the ongoing efforts of educational institutions and 

agricultural entities in this region that have expertise in developing enhanced management strategies for conserving water, natural resources and associated agricultural infrastructure in order to 

protect the region’s economic integrity over the long term. The 

Managers commend multi-disciplinary research efforts to develop 

new technologies and strategies to manage and utilize water and 

natural resources to produce sustainable economic returns. 

To maintain the economic vitality and rural population base of 

the Central and Southern Great Plains, the Secretary is encouraged to give priority to and fund collaborative research efforts that 

seek to protect the water and natural resources of this region. 

(21) Nutrient Management Research and Extension Initiative 

The House bill extends section 1672A(g) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925a(g)) 

through 2011. (Section 720) 

The Senate amendment extends section 1672A of the FACT 

Act through 2006. (Section 735) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7120) 

The Managers acknowledge the many benefits of the worm 

farming industry. Worm farms, while not recognized in any specific 

program within the USDA, provide considerable environmental 

benefits. By recycling organic waste, worms fertilize our agriculturally productive lands and improve nutrient-deficient soil. The Managers encourage the USDA to study and promote worm farming industry techniques that are beneficial to the environment. 

(22) Agriculture Telecommunications Program 

The House bill extends section 1673(h) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5926(h)) 

through 2011. (Section 721) 

The Senate amendment extends section 1673 of the FACT Act 

through 2006. (Section 737) 

595

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7121) 

(23) Alternative Agricultural Research and Commercialization Revolving Fund 

The House bill extends section 1664(g)(1) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5908(g)(1) 

and the capitalization section 1664(g)(2)of the FACT Act (7 U.S.C. 

5908(g)(2)) is extended through 2011. (Section 722) 

The Senate amendment repeals the provision and provides authority to the Secretary for the orderly disposal of AARCC assets. 

(Section 651) 

The Conference substitute adopts the Senate provision. (Sec. 

6201) 

(24) Assistive Technology Program for Farmers With Disabilities 

The House bill extends section 1680(c)(1) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5933(c)(1)) 

through 2011. 

The Senate amendment extends section 1680 of the FACT Act 

through 2006. 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7122) 

(25) Partnerships for High-Value Agricultural Product Quality Research 

The House bill extends section 402(g) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7622(g)) through 2011. (Section 724) 

The Senate amendment extends section 402 of AREERA 

through 2006. (Section 742) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7123) 

(26) Biobased Products 

The House bill extends section 404(e)(2) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7624(e)(2)) and section 404(h) the authorization of appropriations of 

the Agricultural Research, Extension, and Education Reform Act of 

1998 (7 U.S.C. 7624(h)) through 2011. (Section 725) 

The Senate amendment extends section 404 of AREERA for 

the basic authorization for the program and the authority to conduct the pilot project through 2006. (Section 744) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7124) 

596

(27) Integrated Research, Education, and Extension Competitive 

Grants Program 

The House bill extends section 406(e) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7626(e)) through 2011. (Section 726) 

The Senate amendment amends section 406 of AREERA to 

provide that the term for a grant under that section shall not exceed 5 years and to extend the authorization through 2006. (Section 746) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7125) 

(28) Institutional Capacity Building Grants 

The House bill extends section 535(b)(1) of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note) through 

2011. (Section 727) 

The Senate amendment amends section 535 of the Act to extend the authorization for institutional capacity building grants 

through 2006 and change the authorized amount from $1.7 million 

per year to such sums as necessary. (Section 755(f)) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7126) 

(29) 1994 Institution Research Grants 

The House bill extends section 536(c) of the Equity in Educational Land-grant States Act of 1994 (7 U.S.C. 301 note) through 

2011. (Section 728) 

The Senate amendment amends section 536 of the Act to extend the authorization for the research grants program through 

2006. (Section 755(g)) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7127) 

(30) Endowment for 1994 Institutions 

The House bill extends section 533(b) of the Equity in Educational Land-grant States Act of 1994 (7 U.S.C. 301 note) through 

2011. Current authorization limit of $4,600,000 is amended to 

‘‘such sums as are necessary’’. (Section 729) 

The Senate amendment extends the authorization of the 1994 

Institutions endowment under section 533 of the Act through 2006 

and changes the amount from $4.6 million per fiscal year to such 

sums as are necessary. (Section 755(c)) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7128) 

(31) Precision Agriculture 

The House bill extends section 403(i) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7623(i) through 2011. (Section 730) 

597

The Senate amendment extends section 403 of AREERA 

through 2006. (Section 743) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7129) 

(32) Thomas Jefferson Initiative for Crop Diversity 

The House bill extends section 405(h) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7625(h) through 2011. (Section 731) 

The Senate amendment extends section 405 of AREERA 

through 2006. (Section 745) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7130) 

(33) Support for Research Regarding Diseases of Wheat, Triticale, 

and Barley Caused by Fusarium graminearum or by Tilletitia 

indica 

The House bill extends section 408(e) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7628(e) through 2011. 

The Senate amendment extends section 408 of AREERA 

through 2006. (Section 747) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007 and strike 

the dollar figure and authorize such sums as are necessary. (Section 7131) 

(34) Office of Pest Management Policy 

The House bill extends section 614(f) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7653(f)) through 2011. (Section 733) 

The Senate amendment extends section 614 of AREERA 

through 2006. (Section 750A) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7132) 

(35) National Agricultural Research, Extension, Education and Economics Advisory Board

The House bill extends section 1408(h) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3123(h) through 2011. (Section 734) 

The Senate amendment amends section 1408 of NARETPA to 

extend the term of the Board through 2006. (Section 702) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7133) 

598

(36) Grants for Research on Production and Marketing of Alcohols 

and Industrial Hydrocarbons From Agricultural Commodities 

and Forest Products 

The House bill extends section 1419(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3154(d)) through 2011. (Section 735) 

The Senate amendment extends section 1419 of NARETPA 

through 2006. (Section 705) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7134) 

(37) Biomass Research and Development 

The House bill extends title III of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 7624 note) through 2011. (Section 736) 

The Senate amendment extends title III of ARPA through 

2006. (Section 903) 

The Conference Substitute adopts the Senate provision with 

amendments. The conference substitute provides $12,500,000 annually for each fiscal year 2002–2007. (Section 9008) 

(38) Agricultural Experiment Stations Research Facilities 

The House bill extends section 6(a) of the Research Facilities 

Act (7 U.S.C. 390d(a)) through 2011. (Section 737) 

The Senate amendment extends section 6 of the Research Facilities Act through 2006. (Section 782) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7135) 

(39) Competitive, Special, and Facilities Research Grants, National 

Research Initiative 

The House bill extends subsection 2(b)(10) of the Competitive, 

Special, and Facilities Research Grant Act (7 U.S.C. 450(i)(b)(10)) 

through 2011. (Section 738) 

The Senate amendment extends subsection (b)(10) through 

2006. (Section 784) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7136) 

(40) Federal Agricultural Research Facilities Authorization of Appropriations 

The House bill extends section 1431 of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 

1985 (P.L. 99–198; 99 Stat. 1556) through 2011. (Section 739) 

The Senate amendment extends section 1431 of the NARETPA 

through 2006. (Section 783) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7137) 

599

(41) Cotton Classification Services 

The House bill extends the first sentence of section 3a of the 

Act of March 3, 1927 (commonly known as the ‘‘Cotton Statistics 

and Estimates Act; 7 U.S.C. 473a) through 2011. (Section 740) 

The Senate amendment extends the first sentence of section 3a 

of the Act of March 3, 1927 through 2006. (Section 1047) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Sec. 10501) 

(42) Critical Agricultural Materials Research 

The House bill extends section 16(a) of the Critical Agricultural Materials Act (7 U.S.C. 178n(a)) through 2011. (Section 740A) 

The Senate amendment extends section 16 of the Act through 

2006. (Section 781) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7138) 

SUBTITLE B—MODIFICATIONS

(43) Equity in Educational Land-Grant Status Act of 1994 

The House bill amends section 534(a)(1)(A) of the Equity in 

Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note) by 

increasing the authorization of appropriations from $50,000 to 

$100,000; by modifying the definition by which full-time equivalent 

Indian Student Count is calculated; by making accreditation requirements; and by updating the names of the 1994 institutions. 

(Section 741) 

The Senate amendment has the same language but also adds 

White Earth Tribal and Community College to the list of 1994 Institutions. (Section 755) 

The Conference substitute adopts the House provision for 

741(a), the Senate provision for 741(b), the Senate provision for 

741(c), and the Senate provision for 741(d) with an amendment 

that adds White Earth Tribal and Community College to list of 

1994 Institutions and requires USDA to report to Congress with 

guidance on standards for future additions. (Section 7201) 

(44) The National Agricultural Research, Extension, and Teaching 

Policy Act of 1977 

The House bill amends Section 1404(4) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3103(4)) by adding 1994 institutions to the definition of colleges and universities. Intent is to make 1994 land grant institution eligible for competitive grants. (Section 742) 

The Senate amendment has the same intent, but adds the 

1994 Institutions to the list of institutions eligible for the Integrated Grants Program in section 406 of AREERA. (Section 756) 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7209)

600

(45) Agricultural Research, Extension, and Education Reform Act of 

1998 

The House bill amends section 401(c)(2) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7621(c)(2)) by adding: 

(1) alternative fuels and renewable energy sources to Priority 

Mission Areas; 

(2) by including energy efficiency in priority research areas in 

Precision Agriculture (7 U.S.C. 7623; by including energy efficiency 

in priority research areas of the Thomas Jefferson Initiative for 

Crop Diversity (7 U.S.C. 7625(a)); 

(3) by including energy efficiency and renewable resources in 

priority research areas of the Coordinated Program of Research, 

Extension, and Education to Improve Viability of Small and Medium Size Dairy, Livestock, and Poultry Operations (7 U.S.C. 

7627); 

(4) by amending section 408 of AREERA, Support for Research 

Regarding Diseases of Wheat, Triticale, and Barley caused by Fusarium graminearum or by Tilletitia Indica (7 U.S.C. 7628(a)) to include research related to Karnal bunt identification and control; 

and 

(5) by adding a new section to the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7621 et seq) 

to authorize a Program to Control Johne’s Disease. (Section 743) 

The Senate amendment provides for the definition of precision 

agriculture, adds ‘‘horticultural’’ into subsection (a)(3)(A), adds a 

new subsection (a)(3)(E) to read ‘‘using such information to enable 

intelligent mechanized harvesting and sorting systems for 

horitcultural crops’’; and adds a new subsection (a)(4)(E) to read ‘‘robotic and other intelligent machines for use in horticultural 

cropping systems’’ and in subsection (c)(2) by adding ‘‘horticultural’’ after ‘‘agronomic’’ and adding ‘‘product variability’’. (Section 743) 

The Conference substitute adopts the Senate provision from 

743(a) and the House provision from 743(b), (c), (d), (e), and (f). 

(Section 7207) 

The Managers do not intend that any future funds made available for Tilletia indica (commonly referred to as Karnal Bunt) research would be taken from the amount presently made available 

for research related to Fusarium graminearum (commonly referred 

to as Wheat Scab). 

(46) Food, Agriculture, Conservation, and Trade Act of 1990 

The House bill amends section 1671(b) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5924(b)) to 

include plant pathogens as an eligible research priority. The House 

bill also amends the High-Priority Research and Education Initiative section 1672(e) of the FACT Act (7 U.S.C. 5925(e)) to include 

several new high-priority research and extension projects: 

research to protect the United States food supply and agriculture from bioterrorism 

wind erosion research 

crop loss research and extension 

land use management research and extension 

water and air quality research and extension 

601

revenue and insurance tools research and extension 

agrotourism research and extension 

harvesting productivity for fruits and vegetables 

nitrogen-fixation by plants 

agricultural marketing 

environment and private lands research and extension 

livestock disease research and extension 

plant gene expression (Section 744) 

The Senate amendment amends section 1672 of the FACT Act 

to extend the authorization through 2006 and add the following 

new high-priority research and extension areas: 

animal infectious diseases research and extension 

program to combat childhood obesity 

integrated pest management 

beef cattle genetics 

dairy pipeline cleaner (with a set-aside of not less than 

$100,000 of authorized funds for this purpose) 

plant and animal varieties (Section 743) 

The Conference substitute adopts the House provision for Section 744(a) and the Senate provision for Section 744(b) with an 

amendment conforming Senate provisions to the format of the 

House provision and combining both the House and Senate lists of 

high priority research and extension projects. Additional priorities 

to be named are Genetically Modified Agriculture Products Research, Publicly Held Plant and Animal Varieties, and Sugarcane 

Genetics. New language is added to the assistive technology program for farmers with disabilities to ensure full consideration is 

given to entities applying for grants but have not previously received grants. (Section 7208) 

The Managers recognize the success of state AgrAbility programs that have benefited from assistive technology competitive 

grants. The Managers understand the difficulty faced by new applicants in competing with established programs for limited funds. To 

continue the success of this program and broaden its scope to additional states, the Managers encourage full funding of the program 

and urge the Secretary to give full consideration to the potential 

merits of eligible programs that have not previously received a 

grant award. 

(47) The National Agricultural Research, Extension, Education and 

Teaching Policy Act of 1977 

The House bill amends section 1408 of the National Agricultural Research Extension, Education and Teaching Policy Act of 

1977—National Agricultural Research, Extension, Education, and 

Economics Advisory Board. (7 U.S.C. 3123) to add a non Landgrant college or university representative to the board, and provide 

authority for the board to consult with Congress and non-research 

agencies of the U.S. Department of Agriculture. Total Membership 

of the Advisory Board is increased from 30 to 31 members; and section 1419 of that Act—Grants for Research on Production and Marketing of Alcohols and Industrial Hydrocarbons from Agricultural 

Commodities and Forest Products (7 U.S.C. 3154) to include industrial oilseed crops. 

602

The National Agricultural Research, Extension, and Teaching 

Policy Act of 1977 (7 U.S.C. 3291(a)) is also amended to authorize 

an internship program in Foreign Agriculture Service overseas offices. (Section 745) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment to move the provision concerning the total number of 

Advisory Board Members from subsection (c) to subsection (a) of 

House Section 745. New language amends current law to allow for 

funding of the Joe Skeen Institute for Rangeland Restoration. (Sec. 

7209) 

(48) Biomass Research and Development 

The House bill amends title III of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 7624 note) to include biodiesel in the 

Congressional Statement of Findings, to include animal by-products in the definition of ‘‘Biomass’’, and to add a livestock trade association representative to the Biomass Research and Development 

Technical Advisory Committee. (Section 746) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. 

(49) Biotechnology Risk Assessment Research 

The House bill amends section 1668 of the Food, Agriculture, 

Conservation, and Trade Act of 1990 (7 U.S.C. 5921) to ensure that 

risk assessment projects carried out under this program compare 

the risks associated with products of agricultural biotechnology to 

those associated with traditionally bred plants and animals. Assessment is increased from 1% to 3%. (Section 747) 

The Senate amendment amends section 1668 of the FACT Act 

by inserting a new subsection providing priorities for grant award 

and raising from 1 percent to 3 percent the amount to be withheld 

from USDA biotech research outlays for the purpose of making 

grants under this section for research on biotechnology risk assessment, with new language specifying that the research be ‘‘on all 

categories identified by the Secretary of Agriculture as biotechnology’’. 

Under the new language, ‘‘the Secretary shall give priority to 

public and private research or educational institutions and organizations the goals of which include—

(1) formation of interdisciplinary teams to review or conduct 

research on the environmental effects of the release of new genetically modified agricultural products; 

(2) conduct of studies relating to biosafety of genetically modified agricultural products; 

(3) evaluation of the cost and benefit for development of an 

identity preservation system for genetically modified agricultural 

products; 

(4) establishment of international partnerships for research 

and education on biosafety issues; or 

(5) formation of interdisciplinary teams to renew and conduct 

research on the nutritional enhancement and environmental benefits of genetically modified agricultural products. (Section 732) 

603

The Conference substitute adopts the House provision with an 

amendment adding genetically engineered microorganisms as a priority topic for risk assessment research, including international 

partnerships on bio-safety as a research priority, and reducing the 

amount withheld from biotechnology research funding from 3% to 

2%. (Section 7210) 

(50) Competitive, Special, and Facilities Research Grants 

The House bill amends section 2(a) of the Competitive, Special, 

and Facilities Research Grant Act (7 U.S.C. 450i(a)) to provide for 

consultation on development of program priorities with the National Agriculture Research, Extension, Education, and Economics 

Advisory Board. (Section 748) 

The Senate amendment amends subsection (b)(2) of the Act to 

strike the stated substantive areas of national and multistate 

needs under high priority research and instead provide for the Secretary to determine those needs in consultation with the REE 

Board not later than July 1 of each fiscal year for the following fiscal year. (Section 784) 

The Conference substitute adopts the Senate provision with an 

amendment to retain the high priority research focuses prescribed 

in current law. (Section 7211) 

(51) Matching Funds Requirement for Research and Extension Activities of 1890 Institutions 

The House bill amends section 1449 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3222d) to phase in an increased matching requirement for 

non-Federal funds for 1890 land-grant colleges and universities to 

100% by 2007. The Secretary is granted authority to waive the 

matching requirement if it is unlikely that a Territorial college will 

be able to satisfy the matching requirement in an individual fiscal 

year. (Section 749) 

The Senate amendment amends the matching requirements for 

1890 Institution research and extension formula funds in section 

1449 of NARETPA to require that a State must match 60 percent 

of Federal funds provided an 1890 Institution in FY 2003 and provide a match of 110 percent of the amount required to be matched 

in the prior fiscal year for FY 2004 through 2006. For fiscal years 

2003 through 2006, the Secretary may waive any amount of the 

match above 50 percent for an institution if the Secretary determines that the State will be unlikely to meet the matching requirement. (Section 762) 

The Conference substitute adopts the House provision with an 

amendment to require a unified approach to a phase-in of 100% 

matching requirement over 5 years; extended through 2007. (Section 7212) 

(52) Matching Fund Requirement for Research and Extension Activities for the United States Territories 

The House bill amends Section 3(d)4 of the Hatch Act of 1877 

(7 U.S.C. 361c(d)(4)) and section 3(e)4 of the Smith-Lever (7 U.S.C. 

343(e)(4)) making a technical correction to establish matching requirements. (Section 749A) 

604

The Senate amendment has the same intent, but legislative 

language is drafted significantly differently. (Section 776) 

The Conference substitute adopts the Senate provision. (Section 7213) 

(53) The Initiative for Future Agriculture and Food Systems 

The House bill amends section 401(b)(1) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 

7621(b)(1)) to provide a total of $1,160,000,000 to be transferred 

from the Treasury in equal increments for each fiscal year beginning on October 1, 2003 through September 30, 2011. Funds transferred beginning on October 1, 2003 would be available until expended. Funds will be deposited directly into the Commodity Credit 

Corporation accounts as opposed to a separate account in the 

Treasury. (Section 750) 

The Senate amendment amends section 401 of AREERA to retain $130 million in mandatory money for 2002 and extend the program for fiscal years 2003 through 2006 at $225 million per fiscal 

year in mandatory money. Encourages Secretary to set aside 10% 

of available funds for minority serving institutions. (Section 741)

The Conference substitute adopts the House provision with an 

amendment adding ‘‘minority-serving institutions’’ to the list of 

those institutions that have not previously been successful in obtaining competitive grants under current law, adding rural economic policy analysis as a critical issue for research, and extending 

the authorization for the program through 2007. New language creates a budgetary baseline and provides $1.3 billion in new mandatory funding. (Section 7205) 

In making grants to address rural economic and business and 

community development policy issues, the Managers encourage the 

agency to solicit and fund research, education, and extension 

projects on rural policy, rural economic and community development, agriculturally-based development, new and alternative markets, locally-owned value-adding enterprises, and self employment 

and entrepreneurial opportunities. The Managers also encourage 

the agency to solicit project proposals addressing critical issues related to improving the effectiveness of Federal rural and agricultural development programs, including projects directly involving 

rural organizations and rural entrepreneurs that participate in 

Federal rural development programs. 

The Managers note the importance of funding for the farm efficiency and profitability priority mission area. The Mangers encourage the agency to solicit and fund projects which promote the development of management and marketing systems that improved 

profitability, including development of diversification and input 

cost reduction strategies; effective local, regional, and international 

marketing programs; farm-based value-added processing and new 

high return production and marketing niches; improved methods of 

managing risk; and means to improve management and marketing 

of natural and environmental resources. Also, as part of this priority mission area, the Managers encourage the agency to solicit 

and fund research and development of farm tenure, transfer, succession, finance, management, production, and marketing models 

605

and strategies that foster new farming and ranching opportunities 

for beginning farmers and ranchers. 

(54) Carbon Cycle Research 

The House bill amends section 221 of the Agricultural Risk 

Protection Act of 2000 (P.L. 106–224; 114 Stat. 407) to provide an 

authorization of appropriations so that a discretionary program 

could be continued. (Section 751) 

The Senate amendment is similar but authorization is extended only through 2006. (Section 787) 

The Conference substitute adopts the House provision with an 

amendment to extend the authorization through 2007. (Section 

7223) 

The Managers recognize the success of the carbon cycle research consortium (created by Sec. 221 of the Agriculture Risk Protection Act of 2000) and encourage these institutions to continue 

their cooperative work. The Managers understand that the consortium network may be expanded, as deemed appropriate by the consortium, to include additional institutions with interest or expertise 

in carbon cycle research. 

(55) Definition of Food and Agricultural Sciences. 

The House bill amends section 2(3) of the Research Facilities 

Act (7 U.S.C. 390(2)(3)) to strike the definition of Food and Agricultural Sciences and instead refer to the definition of Food and Agricultural Sciences in section 1408(8) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

3103(8)). (Section 752) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7214) 

(56) Federal Extension Service 

The House bill amends section 3(b)(3) of the Smith-Lever Act 

(7 U.S.C. 343(b)(3)) to provide that ‘‘such sums as are necessary’’

may be appropriated to carry out this section. (Section 753) 

The Senate amendment rewrites section 3(b)(3) of the SmithLever Act, which authorizes extension funds for the 1994 Institutions, to change the authorization from $5 million to such sums as 

necessary beginning in FY 2002, to change the manner of distribution of such funds from a competitive application basis to a formula 

to be developed and implemented by the Secretary in consultation 

with the 1994 Institutions, and allows payments for extension activities that may be carried out in more than one fiscal year. (Section 754) 

The Conference substitute adopts the House provision with an 

amendment to allow the carry-over of funding until expended. (Section 7215) 

(57) Policy Research Centers 

The House bill amends section 1419A(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act (7 U.S.C. 

3155(c)(3)) to provide that grant funding may be used to disseminate policy research information. (Section 754) 

606

The Senate amendment is the same language. 

The Conference substitute adopts the Senate provision. (Section 7216) 

SUBTITLE C—RELATED MATTERS

(58) Resident Instruction at Land-Grant Colleges in U.S. Territories 

The House bill provides new authority for resident instruction 

at land-grant colleges in United States Territories, subject to the 

availability of appropriations. (Section 761) 

The Senate amendment amends section 1404 of the NARETPA 

of 1977 to add a definition for ‘‘insular area’’ to include the Commonwealth of Puerto Rico and U.S. Territories. (Section 701) 

Also amends NARETPA to add a new subtitle O—Land Grant 

Institutions in Insular Areas. The ‘‘insular areas’’ are defined in 

section 1404 of NARETPA as amended by section 701 of the bill. 

New section 1489 under that subtitle provides an authorization of 

$4 million per fiscal year through 2006 for the Secretary to make 

competitive or noncompetitive grants to State cooperative institutions (i.e., land-grants) in insular areas to strengthen the capacity 

of such institutions to carry out distance food and agricultural education programs using digital network technologies. Grants may be 

used: (1) to acquire equipment, instrumentation, networking capability, hardware and software, digital network technology, and infrastructure necessary to teach students and teachers about technology in the classroom; (2) to develop and provide educational 

services (including faculty development) to prepare students or faculty seeking a degree or certificate approved by the State or a DOE 

recognized regional accrediting body; (3) to provide teacher education, library and media specialist training, and preschool and 

teacher aid certification to those who seek to acquire or enhance 

technology skills for use of technology in the instructional process; 

(4) to implement a joint project to provide technology education in 

the classroom with a local educational agency, community-based organization, national nonprofit, or a business; (5) to provide leadership development to administrators, board members, and faculty of 

eligible institutions with responsibility for technology education. 

Funds may not be used for the planning, acquisition, construction, 

rehab, or repair of buildings. The Secretary may carry out the program in a manner that recognizes the different needs and opportunities between institutions in the Pacific and those in the Atlantic. 

The Secretary may establish a matching requirement of up to 50 

percent, which is subject to waiver. (Section 775) 

The Conference substitute adopts the House provision with an 

amendment to combine House section 761 with Senate sections 701 

and 775. The amendment also makes technical changes in Senate 

section 775, strikes the reference to businesses located within a 

HUB Zone under the Small Business Act, authorizes funding at 

such sums as are necessary, and extends the authorization through 

2007. (Section 7503) 

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(59) Declaration of Extraordinary Emergency and Resulting Authorities 

The House bill amends section 415(e) of the Plant Protection 

Act (7 U.S.C. 7715(e)), section 442 of the Plant Protection Act (7 

U.S.C. 7772), section 11 of the Act of May, 1884, commonly known 

as the ‘‘Animal Industry Act’’ (21 U.S.C. 114a) and the first section 

of the Act of September 25, 1981 (7 U.S.C. 147b) to provide for 

more efficient management of declarations of extraordinary emergencies and transfer of funds from the Commodity Credit Corporation. 

A new section (419(a)) is added to the Plant Protection Act that 

requires the Secretary to determine if uses of methyl bromide required by state, local and tribal authorities to control the spread 

of plant pests and noxious weeds shall be authorized. In addition, 

the Secretary would maintain a registry of authorized uses. (Section 762) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision for 

762(a) and deletes the House provision for 762(b). For Section 

762(c), the Conference substitute adopts the House provision with 

an amendment to require the Secretary of Agriculture to consider 

the availability of methyl bromide alternatives prior to making a 

determination under this section, and to establish a program, in 

consultation with State, local and tribal authorities to identify 

methyl bromide alternatives. Exemptions from regulatory procedures under the Administrative Procedures Act and Paperwork Reduction Act are eliminated. A rule of construction is included to 

provide that nothing in this section would alter or modify the authority of the Administrator of the Environmental Protection Agency or to provide authority to the Secretary of Agriculture under the 

Clean Air Act or regulations promulgated under the Clean Air Act. 

(Section 7504) 

(60) Agricultural Biotechnology Research and Development for the 

Developing World 

The House bill authorizes the Secretary to use $5 million for 

each of the fiscal years 2004 through 2008 from funds allocated to 

the Initiative for Future Food and Agriculture Systems to establish 

a competitive grants program for the development of agricultural 

biotechnology in the developing world. (Section 763) The Senate amendment provides an authorization of $5 million 

per year from 2002 through 2006 for the Secretary, acting through 

FAS, to carry out a competitive grant program to develop agricultural biotechnology for developing countries. Eligible recipients 

would include historically black colleges and universities, Hispanicserving institutions, tribal colleges or universities that offer a curriculum in agriculture or the biosciences, a nonprofit organization, 

or a consortium of for-profit institutions and agricultural research 

institutions. Grants would be available for biotechnology projects 

that: 

(1) enhance nutritional content of agricultural products that 

can be grown in developing countries; 

(2) increase the yield and safety of agricultural products that 

can be grown in the developing countries; 

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(3) increase the yield of agricultural products that are drought 

and stress-resistant and that can be grown in developing countries 

(4) extend the growing range of crops that can be grown in developing countries; 

(5) enhance the shelf-life of fruits and vegetables grown in 

countries; 

(6) develop environmentally sustainable agricultural products 

that can be grown in developing countries; and 

(7) develop vaccines to immunize against life-threatening illnesses and other medications that can be administered by consuming genetically engineered agricultural products. (Section 750) 

The Conference substitute adopts the Senate provision with an 

amendment to modify the definition of ‘‘eligible entity’’ to include 

all colleges and universities with an agricultural or bioscience curriculum and to authorize such sums as necessary through 2007. 

(Section 7505) 

SUBTITLE D—REPEAL OF CERTAIN ACTIVITIES AND AUTHORITIES

(61) Food Safety Research Information Office and National Conference 

The House bill repeals subsections (b) and (c) of section 615 of 

the Agricultural Research, Extension, and Education Reform Act of 

1998 (7 U.S.C. 7654(b) National Conference and (c)) Food Safety 

Report. (Section 771) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7301) 

(62) Reimbursement of Expenses Under Sheep Promotion, Research, 

and Information Act of 1994 

The House bill repeals section 617 of the Agricultural Research, Extension, and Education Reform Act of 1998 (P.L. 105–

185; 112 Stat. 607). 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7302) 

(63) National Genetic Resources Program 

The House bill repeals section 1634 of the Food, Agriculture, 

Conservation, and Trade Act of 1990 (7 U.S.C. 5843). (Section 773) 

The Senate amendment extends section 1634 of the FACT Act 

through 2006. (Section 731)

The Conference substitute adopts the Senate provision with an 

amendment to authorize through 2007. (Section 7118) 

(64) National Advisory Board on Agricultural Weather 

The House bill repeals section 1639 of the Food, Agriculture, 

Conservation, and Trade Act of 1990 (7 U.S.C. 5853). (Section 774) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7304) 

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(65) Agricultural Information Exchange With Ireland 

The House bill repeals section 1420 of the National Agricultural Research, Extension and Teaching Policy Act Amendments of 

1985 (P.L. 99–198; 99 Stat. 1551) 

No comparable provision. (Section 775) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7305) 

(66) Pesticide Resistance Study 

The House bill repeals section 1437 of the National Agricultural Research, Extension and Teaching Policy Act Amendments of 

1985 (P.L. 99–198; 99 Stat. 1558). (Section 775) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7306) 

(67) Expansion of Education Study 

The House bill repeals section 1438 of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 

1985 (P.L. 99–198; 99 Stat. 1559). (Section 777) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7307) 

(68) Support for Advisory Board 

The House bill repeals section 1412 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 

U.S.C. 3127). (Section 778) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(69) Task Force on 10-year Strategic Plan for Agricultural Research 

Facilities 

The House bill repeals section 4 of the Research Facilities Act 

(7 U.S. C. 390b). (Section 779) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Section 

7308) 

SUBTITLE E—AGRICULTURE FACILITY PROTECTION

(70) Additional Protections for Animal or Agricultural Enterprises, 

Research Facilities, and Other Entities 

The House bill amends the Research Facilities Act (7 U.S.C. 

390 et seq.) by adding a new section to provide the Secretary with 

authority to investigate and assess civil penalties in cases of reckless or intentional destruction of animal or agricultural enterprises. 

A civil penalty assessed by the Secretary against a person for a violation shall be not less than the total cost incurred by the Secretary 

and the total cost of the economic damage suffered by the agricultural enterprise. A fund to assist victims of disruption would be established in the Treasury consisting of that portion of each civil 

penalty that represents the recovery of economic damages. The SecVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00613 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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retary of Agriculture shall use the fund to compensate an animal 

or agricultural enterprise for economic losses. (Section 790) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(71) Competitive Research Facilities Grant Program 

The Senate amendment amends NARETPA to add a new section 1417A providing an authorization for a new competitive food 

and agricultural research facilities grant program 1862 Institutions, 1890 Institutions, 1994 Institutions, Hatch experiment stations, McIntire-Stennis schools, veterinary schools under the animal and health disease formula program authorized in NARETPA, 

and Hispanic-serving institutions. Grants awarded have to support 

the national research purposes specified in section 1402, States 

with more than one institution must coordinate proposals, and the 

Secretary may require a match and may afford an evaluation preference for matches made with cash. (Section 704) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(72) Indirect Costs 

The Senate amendment amends section 1462 of NARETPA by 

striking the 19 percent cap on indirect costs for competitive agricultural research, education, and extension grants under the authority 

of the Under Secretary for REE and providing instead that the cap 

shall be the ‘‘negotiated indirect cost rate established for an institution by the cognizant Federal audit agency for that institution’’ and 

also adds a new subsection specifying that the cap does not apply 

to SBIR grants. (Section 714) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to exempt grants awarded competitively under the 

Small Business Act. (Section 7222) 

(73) Research Equipment Grants 

The Senate amendment adds a new section 1462A to 

NARETPA providing an authorization for $50,000,000 per year for 

a competitive research equipment grants program for the acquisition of special purpose scientific research equipment for use in the 

food and agricultural sciences programs of colleges and universities 

and 1862 Institutions, 1890 Institutions, 1994 Institutions, Hatch 

experiment stations, McIntire-Stennis schools, veterinary schools 

under the animal and health disease formula program authorized 

in NARETPA, and Hispanic-serving institutions. The maximum 

amount of a grant is $500,000 and the costs of acquisition or depreciation of equipment purchased with a grant may not be charged 

as an indirect cost. (Section 715) 

The House bill contains no comparable provision.

The Conference substitute adopts the Senate provision with an 

amendment to authorize such sums as necessary and extend the 

authorization through 2007. (Section 7402) 

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(74) Availability of Competitive Grant Funds 

The Senate amendment adds a new section 1469A to 

NARETPA to provide that funds made available to the Secretary 

to carry out any competitive agricultural research, education, or extension grant programs under NARETPA or any other Act shall be 

available for obligation for two fiscal years. (Section 718) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7217) 

(75) Joint Requests for Proposals 

The Senate amendment adds a new section 1473B to 

NARETPA to authorize the Secretary, in carrying out competitive 

agricultural research, education, or extension grant programs, to 

cooperate with other Federal agencies in issuing joint requests for 

proposals, awarding grants, and administering grants, for similar 

or related research, education, or extension projects or activities. 

Under the provision, with respect to issuing joint requests for proposals, making awards, and administering grants, the Secretary 

and a cooperating agency each are given authority to: (1) transfer 

funds to the other; (2) delegate authority to the other; (3) and 

choose which agencies post-award grant administration regulations 

and indirect rates shall apply to grant awards made by the Secretary and the cooperating agency. Funds transferred may only be 

used in accordance with the laws authorizing the appropriation and 

to make grants only to recipients eligible to receive grants under 

such laws. The Secretary and cooperating agencies may establish 

joint peer review panels exempt from FACA to evaluate grant proposals. 

Subsection (b) allows the Secretary to transfer funds to cooperating agencies subject to applicable laws. 

Subsection (c) allows the Secretary to delegate her authority to 

an appropriate coordinating agency. 

Subsection (d) provides the Secretary with authority to coordinate regulations and indirect rates with a cooperating agency. 

Subsection (e) allows joint peer review panels to be established. 

(Section 719) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to strike the authority to transfer appropriated funds 

between Federal Departments and Agencies and to prohibit authority to adopt ‘‘negotiated’’ indirect cost recovery rates. (Section 7403) 

(76) Biosecurity Planning and Response Programs 

The Senate amendment subsection (a) adds a new subtitle N—

Biosecurity to NARETPA. Chapter 1 of the new subtitle (sections 

1484 through 1486) deals with agriculture infrastructure security. 

Authorizations are provided of such sums as necessary through 

2006 to establish an Agriculture Infrastructure Security Fund Account (the Fund) in the Treasury and an Agriculture Infrastructure 

Security Commission. New section 1484 sets forth definitions of 

‘‘agricultural research facility,’’ ‘‘Commission,’’ and ‘‘Fund’’. 

New section 1485 authorizes the establishment of the Fund. 

The Fund would be financed from any appropriations, proceeds 

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from the sale of assets as provided for in this chapter, and gifts accepted as provided for in this chapter, and such amounts would remain available until expended. Subsection (b) sets forth the purposes of the Fund as to provide funding to protect and strengthen 

the Federal food safety and agricultural infrastructure that—(1) 

safeguards against animal and plant diseases and pests; (2) ensures the safety of the food supply; and (3) ensures sound science 

in support of food and agricultural policy. Amounts in the Fund 

may be used by the Secretary for: (1) the costs of planning, design, 

development, construction, acquisition, modernization, leasing, and 

disposal of facilities, equipment, and technology used by USDA in 

carrying out programs related to the purposes specified in subsection (b), notwithstanding the Federal Property and Administrative Services Act of 1949, or any other law that prescribes procedures for the procurement, use, or disposal of property or services 

by a Federal agency; (2) the costs of specialized services relating to 

the purposes specified in subsection (b); (3) the costs of cooperative 

arrangements (notwithstanding the Federal Grant and Cooperative 

Agreement Act) with State, tribal, and local governments, and 

other public and private entities to carry out programs related to 

the purposes specified in subsection (b); and (4) administrative 

costs at a rate of not more than 1 percent per fiscal year of 

amounts in the fund on October 1 of that fiscal year beginning in 

2003. Amounts in the Fund may not be used to create any new full 

or part-time Federal employee positions. Notwithstanding the Federal Property and Administrative Services Act, the Secretary by 

sale may dispose of all or any part of any right or title in land, facilities, or equipment in the full control of the Department used for 

the purposes specified in subsection (b), with the exception of National Forest System land and land and facilities at the Beltsville 

Agricultural Research Center. The Secretary is authorized to accept 

gifts and bequests of funds property (real, personal, and intangible), equipment, services, and other in-kind contributions from 

any public or private source to carry out the purposes specified in 

subsection (b). For the purposes of gifts, the Secretary shall not 

consider a State, local, or tribal government, other public entity, or 

college or university as a prohibited source under USDA gift acceptance policies, and the Secretary may accept gifts from private 

entities or individuals that would be considered prohibited sources 

only if the Secretary determined it was in the public interest to accept such gifts. 

New section 1486 authorizes the Secretary to establish the Agriculture Infrastructure Security Commission to: (1) advise the Secretary on the uses of the Fund; (2) to review all agricultural research facilities for research importance and importance to agriculture infrastructure security, (3) to identify any agricultural research facility that should be closed, realigned, consolidated, or 

modernized to carry out the research agenda of the Secretary and 

to protect agriculture infrastructure security; (4) to develop recommendations concerning agricultural research facilities; and (5) to 

evaluate the agricultural research facilities acquisition and modernization system used by USDA and make recommendations for 

improvement to that system based on that evaluation. An ‘‘agricultural research facility’’ as defined in new section 1484 means a faVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00616 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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cility—‘‘(A) at which agricultural research is regularly carried out 

or proposed to be carried out; and (B) that is—(i)(I) an Agricultural 

Research Service facility; (II) a Forest Service facility; or (III) an 

Animal and Plant Health Inspection Service facility; (ii) a Federal 

agricultural facility in the process of being planned or being constructed; or (iii) any other facility under the full control of the Secretary.’’ The Commission is to use the 10-year strategic plan prepared by the Strategic Planning Task Force established under section 4 of the Research Facilities Act to assist it in carrying out its 

duties. The Commission shall be composed of 15 voting members 

appointed by the Secretary that represent a balance of the public 

and private sectors and that have combined expertise in facilities 

development, modernization, construction, security, consolidation, 

and closure; plant diseases and pests; animal diseases and pests; 

food safety; biosecurity; the needs of farmers and ranchers; public 

health; State, local, and tribal government; and any other area related to agriculture infrastructure security, as determined by the 

Secretary. Nonvoting members of the Commission shall include the 

Secretary, four representatives appointed by the Secretary of HHS, 

1 each from PHS, CDC, FDA, and NIH; one representative appointed by the Attorney General; one representative appointed by 

the Director of Homeland Security; and not more than four USDA 

representatives appointed by the Secretary. The term of office for 

Commission members is 4 years. The Commission is exempted 

from FACA, but open meetings and records are required with exceptions provided for purposes of national security. Not later than 

240 days after enactment of this Act, and each June 1 thereafter, 

the Commission shall submit a report of its findings and recommendations to the Committees on Agriculture and Appropriations of the House and Senate, and the Secretary shall provide a 

written response to that report within 90 days as to the manner 

and extent to which she will implement the recommendations 

made. The report, and the Secretary’s response, shall be publicly 

available unless the Secretary or the Commission determine that 

the report or response, or any portion thereof, shall not be released 

in the interest of national security, and any portion so classified 

shall not be releasable under FOIA. Provision is made for compensation of non-Federal voting members at a rate equivalent to 

GS–15 and travel to be paid at the rate for a Federal employee. 

The Secretary shall provide the Commission with any personnel or 

other resources as the Secretary determines appropriate. New 

chapter 2 of the new subtitle N includes two new sections for other 

biosecurity programs. 

New section 1487 provides a special supplemental authorization of such sums as are necessary for biosecurity planning and response through 2006. Funds provided under section 1487 may be 

used in accordance with any authority available to the Secretary to 

carry out agricultural research, education, and extension activities 

(including competitive grants) necessary: (1) to reduce the vulnerability of the United States food and agricultural system to chemical or biological attack; (2) to continue joint research initiatives between the Agricultural Research Service, universities, and industry 

on counterbioterrorism efforts; (3) to make competitive grants to 

universities and qualified research institutions for research on 

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counterbioterrorism; and (4) to counter or otherwise respond to 

chemical or biological attack. New section 1488 provides an authorization of $100 million per 

year through 2006 for a competitive research facilities construction 

grants program for land-grant colleges and universities to enhance 

the security of agriculture in the United States against threats 

posed by bioterrorism. To be eligible to receive a grant, a landgrant institution must have (1) demonstrated expertise in the area 

of animal and plant diseases; (2) substantial animal and plant diagnostic laboratories; and (3) well-established working relationships with the agricultural industry and farm and commodity organizations. In making grants, the Secretary shall give priority to institutions with demonstrated expertise in (1) animal and plant disease prevention; (2) pathogen and toxin mitigation; (3) cereal disease resistance; (4) grain milling and processing; (5) livestock production practices; (6) vaccine development; (7) meat processing; (8) 

pathogen detection and control; or (9) food safety. An institution 

may not receive more than $10,000,00 of grants under this section 

per fiscal year, and the Federal share of any construction project 

shall not exceed 50 percent. Finally, subsection (b) of section 723 

of the bill includes a sense of Congress that funding for ARS, 

APHIS, and other USDA agencies with biosecurity responsibilities 

should be increased as necessary to improve the capacity of the 

agencies to conduct research and analysis of, and respond to, bioterrorism and animal and plant diseases. (Section 723) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment deleting the Agriculture Infrastructure Security Fund 

and the Agriculture Infrastructure Security Commission. The Conference adopts the Senate program for agriculture bioterrorism research facilities with an amendment authorizing grants for expansion and security upgrades of agriculture research facilities. (Section 7221) 

The Managers encourage the Secretary to give priority in 

awarding grants for the expansion of biosecurity research facilities 

to those universities or institutions which have demonstrated expertise in the area of animal and plant diseases; substantial animal and plant diagnostic laboratories; and well-established working 

relationships with the agriculture industry and farm and commodity organizations. 

(77) Rural Electronic Commerce Extension Program 

The Senate amendment adds a new section 1670 to the FACT 

Act providing an authorization for a Rural Electronic Commerce 

Extension Program. The Secretary would be required to establish 

within CSREES an Office of Rural Electronic Commerce to carry 

out this program. The purposes of the program are: (1) to expand 

and enhance electronic commerce practices and technology to be 

used by small businesses and microenterprises in rural areas; (2) 

disseminate information and expertise through a cooperative extension service clearinghouse in rural areas; (3) disseminate management, scientific, engineering, and technical information to small 

businesses in rural areas through the extension program; and (4) 

use, when appropriate, the expertise, technology, and capabilities of 

615

other organizations, including State and local governments, Federal 

agencies, institutions of higher education, nonprofit organizations, 

small businesses and microenterprises that have experience in electronic commerce practice and technology, and the development centers established under this section. In carrying out this program, 

the Secretary shall: (1) provide leadership, support, and coordination for the program; (2) establish policies, practices, and procedures to assist rural communities in the adoption and use of electronic commerce techniques; (3) identify and strengthen existing 

mechanisms designed to assist rural areas in the adoption and use 

of electronic commerce techniques; (4) provide grants to fund 

projects and activities under the program; and (5) establish a clearinghouse system for States, communities, and businesses to obtain 

information on best practices, technology transfer, training, education, adoption, and use of electronic commerce in rural areas. 

The Secretary shall make grants to the North Central Regional 

Center for Rural Development, the Northeast Regional Center for 

Development, the Southern Rural Development Center, and a development center in the Western Region, as determined by the 

State Extension Program Directors in the Western Region, to (1) 

assemble regional expertise, and develop innovative education programs, that may be adapted and refined by State extension programs; (2) train State-based cooperative extension agents to deliver 

rural electronic commerce education programs; and establish networks among universities, local governments, and private industries to focus on regional economic issues. 

The Secretary also is authorized to make competitive grants to 

cooperative extension programs at land-grant institutions, or consortia of such institutions), to develop and facilitate nationally innovative rural electronic commerce business strategies, and to assist small businesses and microenterprises in identifying, adapting, 

implementing, and using electronic commerce business practices 

and technologies. The provision also includes selection criteria for 

grant awards. As a condition of funding, during the years of funding under a grant the recipient must provide from non-Federal 

sources 50 percent (25 percent if the grant recipient serves low-income or minority-owned businesses or microenterprises of the estimated capital and annual operating and maintenance costs of the 

extension program, and after expiration of the grant funding period 

the recipient must provide 100 percent of such costs from non-Federal sources. Awards are limited to $900,000 for an individual landgrant institution, either individually or as a member of a consortium, and funds awarded to a consortium must be shared equally 

among its members. The provision also establishes an evaluation 

panel and process to evaluate projects and activities funded under 

the program beginning one year after grant award. The Secretary 

is required to report to the Agriculture Committees on activities 

under this section 2 years after the date of enactment. 

The program is authorized at $60,000,000 each fiscal year 

through 2006, with $20,000,000 of that set aside for funding the regional development centers. The Secretary is authorized to use up 

to 2 percent of funds made available for administrative costs to 

carry out this section. (Section 733) 

The House bill contains no comparable provision. 

616

The Conference substitute adopts the Senate provision with an 

amendment clarifying the Senate provision and expanding the eligibility for grants to include colleges and universities with agricultural or rural development programs. (Section 6202) The Committee authorizes $60 million to establish a Rural 

Electronic Commerce Extension Program within the Cooperative 

State Research, Education, and Extension Service. Electronic commerce represents an opportunity for small businesses and micro enterprises in the domestic and international market, but there is 

currently no mechanism available in rural areas to enable individuals or organizations to both learn and take advantage of innovative technologies and business practices. The United States has a 

strong interest in ensuring that small businesses and micro enterprises in rural areas participate in electronic commerce as it will 

promote productivity and economic growth throughout the United 

States. The specific objectives of the program are: (1) expand and 

enhance electronic commerce practices and technology to be used 

by small businesses and micro enterprises in rural areas; (2) disseminate information and expertise through a cooperative extension service clearinghouse; (3) disseminate management, scientific, 

and technical information to small businesses and micro enterprises in rural areas through the extension program, and (4) use, 

when appropriate, the expertise, technology, and capabilities of 

other institutions and organizations—examples being state and 

local governments, Federal departments and agencies, institutions 

of higher education, non-profit organizations, small businesses and 

micro enterprises with previous experience in this area, and regional development centers—to achieve the stated objectives. The 

program will be competitive and merit-based, with grants being 

provided to cooperative extension service programs at land-grant 

colleges and universities (or consortia of land-grant colleges and 

universities) and to colleges and universities with agriculture or 

rural development programs. Using language in the legislation as 

guidelines, the Cooperative State Research, Education, and Extension Service shall establish appropriate criteria for the submission, 

evaluation, and funding of applications for grants to implement 

projects and activities for the program and shall be responsible for 

evaluating, ranking, and selecting grant applications. 

(78) Organic Agricultural Research and Extension Initiative 

The Senate amendment amends section 1672B of the FACT 

Act to require the Secretary to consult with the National Organics 

Standards Board as well as the REE Board in making grants, and 

to add the following purposes for which grants may be awarded: 

‘‘(4) determining desirable traits for organic commodities 

using advanced genomics, field trials, and other methods; 

‘‘(5) pursuing classical and marker-assisted breeding for 

publicly held varieties of crops and animals optimized for organic systems; 

‘‘(6) identifying marketing and policy constraints on the expansion of organic agriculture; and 

‘‘(7) conducting advanced on-farm research and development that emphasizes observation of, experimentation with, 

and innovation for working organic farms, including research 

617

relating to production and to socioeconomic conditions.’’ (Section 736, 231, 232) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to include breeding, marketing, and policy research as 

priority areas and include $3 million in new mandatory funding 

from 2003 through 2007. (Section 7218) 

It is the intent of the Managers that these funds shall be allocated for high priority aspects of organic agricultural systems research, education, and extension. Priority concerns encompass biological, physical, and social sciences (including economics). The authorization of these funds shall not preclude or preempt the allocation of funds for other organic farming research, education, and extension programs under any other competitive or special grants 

programs, integrated activity, or formula funding. Rather, it is the 

intent of the Managers that organic agriculture be recognized as a 

legitimate priority of all Research, Education, and Economics programs, and should be recognized accordingly in appropriate USDA 

Research, Education and Extension program plans and requests for 

proposals. 

(79) Grants for Youth Organizations 

The Senate amendment amends AREERA by adding a new section 410 providing $8 million in mandatory money from CCC (to 

remain available until expended), and such sums as necessary for 

2002 through 2006, for the Secretary, acting through CSREES, to 

make grants to the Girl Scouts, the Boy Scouts, the National 4–H 

Council, and the National FFA organization to establish pilot 

projects to expand the programs carried out by the organizations 

in rural areas and small towns, and for purposes of the 4–H Centennial under Pub. Law 107–19. (Section 749)

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. 

(80) Senior Scientific Research Service 

The Senate amendment adds a new section to subtitle B of 

AREERA establishing within USDA a Senior Scientist Research 

Service of not more than 100 members. To be eligible to be appointed to the Service by the Secretary, an individual must (1) 

have conducted outstanding research in the field of agriculture or 

forestry, (2) have a PhD, and meet OPM qualification standards for 

a GS–15 position. The Secretary may appoint and employ a member of the Service with regard to Federal civil service laws regarding competitive service appointments, retention preferences, performance appraisal and performance actions, pay rates and classification, and adverse actions, except that a member of the Service 

will have the same rights as a GS–15 appointee to appeal to the 

Merits Systems Protection Board or the Office of Special Counsel. 

The Secretary must develop a performance appraisal system for the 

Service that provides for systematic appraisals and encourages excellence. The Secretary shall set compensation in a range between 

a GS–15 and an ES–I appointment, with an exception to ES–I 

maximum for a rate approved by the President by law. A member 

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appointed to the Service from a prior position at an institution of 

higher education who retains the right to make contributions to 

that institution’s retirement system may request that the Secretary 

contribute an amount not to exceed 10 percent of his pay to that 

system, but such a member shall not earn service credit under Federal law for time served in the Service except for purposes crediting 

annual leave. Any person involuntarily separated from the Service 

without cause may be appointed by the Secretary to a career appointment at the GS–15 level in the competitive service, unless 

that person was not a career appointee in the civil service of excepted service prior to his appointment to the Service, in which 

case that person’s appointment following separation shall be to the 

excepted service for a term not to exceed 2 years. (Section 750B) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7219) 

(81) Carryover 

The Senate amendment amends the Hatch Act to allow a State 

agricultural institution to carryover the balance of any fiscal year’s 

allocation of funding remaining at the end of the fiscal year to the 

next fiscal year, and if that balance is not spent in the succeeding 

fiscal year, an amount equivalent to that remaining shall be deducted from the following fiscal year allocation to that State. (Section 751) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7202) 

(82) Reporting of Technology Transfer Activities 

The Senate amendment amends the Hatch Act to require a 

State to include in its plan of work a description of the technology 

transfer activities conducted with respect to federally-funded agricultural research. (Section 752) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

The Managers expect the Secretary to require land-grant universities to include descriptions of technology transfer activities in 

any annual or other regular reports made to the Secretary regarding research activities funded by the Department. 

(83) Compliance With Multistate and Integration Requirements 

The Senate amendment amends the Hatch and Smith-Lever 

Act requirements for multistate extension and integrated research 

and extension activities to require: 

(1) that in order to receive Smith-Lever Act funding a State 

must expend an amount equal to not less than 25 percent of SmithLever Act funds received by the State in a prior year on multistate 

activities, and in determining compliance with that requirement 

the Secretary shall include all cooperative extension funds expended by the State in the prior year, including Federal, State, and 

local funds; and 

(2) that in order to receive Hatch and Smith-Lever Act funding, 

a State must expend an amount equal to not less than 25 percent 

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of Smith-Lever Act and Hatch Act of 1887 funds received by the 

State in a prior year on integrated research and extension activities, and in determining compliance with that requirement the Secretary shall include all cooperative research and extension funds 

expended by the State in the prior year, including Federal, State, 

and local funds. This amendment would be effective October 1, 

2002. (Section 753) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(84) Authorization Percentages for Research and Extension Formula 

Funds 

The Senate amendment subsection (a) amends section 1444 of 

NARETPA to increase the authorization level for 1890 Institutions 

extension appropriations from not less than 6 percent of the 

amount appropriated annually for extension at the 1862 Institutions under the Smith-Lever Act to not less than 15 percent of the 

amount appropriated annually under the Smith-Lever Act, and 

strikes obsolete language. Subsection (b) amends section 1445 of 

NARETPA to increase the authorization level for 1890 Institutions 

research appropriations from not less than 15 percent of the 

amount appropriated annually for research at the 1862 Institutions 

under the Hatch Act of 1887 to not less than 25 percent of the 

amount appropriated annually under the Hatch Act of 1887, and 

strikes obsolete language. (Section 757) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7203) 

It is the intent of the Managers that increased formula funding 

for 1890 institutions be the mechanism for reaching this increased 

ratio, rather than a redistribution of the current limited formula 

funds. 

(85) Carryover 

The Senate amendment provides that in the same manner as 

the amendment made by section 751 for 1862 Institutions, this provision amends section 1445 of NARETPA to allow an 1890 Institution to carryover the balance of any fiscal year’s allocation of funding remaining at the end of the fiscal year to the next fiscal year, 

and if that balance is not spent in the succeeding fiscal year, an 

amount equivalent to that remaining shall be deducted from the 

following fiscal year allocation to that 1890 Institution. (Section 

758) 

The House bill contains no comparable provision.

The Conference substitute adopts the Senate provision. (Section 7204) 

(86) Reporting of Technology Transfer Activities 

The Senate amendment provides that in the same manner as 

the amendment made by section 752 for 1862 Institutions, this section amends section 1445 of NARETPA to require an 1890 Institution to include in its plan of work a description of the technology 

transfer activities conducted with respect to federally-funded agricultural research. (Section 759) 

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The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

The Managers expect the Secretary to require land-grant universities to include descriptions of technology transfer activities in 

any annual or other regular reports made to the Secretary regarding research activities funded by the Department. 

(87) Priority-Setting Process 

The Senate amendment amends requirement in section 

102(c)(1) of AREERA for land-grant colleges to obtain stakeholder 

input to require that the process for obtaining that input ‘‘reflects 

transparency and opportunity for input from producers of diverse 

agricultural crops and diverse geographic and cultural communities.’’ (Section 771) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(88) Termination of Certain Schedule A Appointments 

The Senate amendment provision provides for the termination 

60 days after enactment of Schedule A, dual Federal-State appointments, of employees working in agricultural extension programs at 

1862 Institutions, 1890 Institutions, and the University of the District of Columbia. An individual whose appointment is terminated 

but who remains employed in the agricultural extension program 

will continue to be eligible, to the same extent as before enactment 

of this provision, to participate in the Federal Employee Health 

Benefits Program, the Federal Employee Group Life Insurance Program, the Civil Service Retirement System, the Federal Employee 

Retirement System, and the Thrift Savings Plan, and will continue 

to receive Federal civil service employment credit to the same extent the individual was receiving that credit prior to enactment of 

this provision, as long as the employing college or university continues to fulfill the administrative and financial responsibilities (including making agency contributions) associated with providing 

those benefits. If an individual changes employment from an agricultural extension program at one institution to that in another, 

the individual will continue to receive such benefits as long as the 

second institution fulfills its administrative and financial responsibilities and the second institution had employed another person 

in the same position within 120 days before the date of employment of the individual. (Section 772) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment changing the effective date to January 31, 2003, and 

adding ‘‘federal long-term care benefits’’ to the list of covered benefits. (Section 7220) 

(89) Risk Management Education for Beginning Farmers and 

Ranchers 

The Senate amendment amends the risk management education grant program in section 524(a)(3) of the Federal Crop Insurance Act to give the Secretary authority to target grants to programs specifically for beginning farmers and ranchers, and makes 

a technical amendment to section 524(b) of that Act. (Section 785) 

621

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(90) Joint Subcommittee on Aquaculture 

The Senate amendment extends authorization for National 

Aquaculture Act of 1980 through 2006. (Section 786) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to extend the authorization through 2007. (Section 

7139) 

SUBTITLE F—NEW AUTHORITIES (SECTIONS 791–798D)

(91) Definitions 

The Senate amendment defines ‘‘Department’’ and ‘‘Secretary’’

for purposes of the subtitle. (Section 791) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7401) 

(92) Regulatory and Inspection Research 

The Senate amendment authorizes the Secretary to use a public or private source, and requires the Secretary to use the most 

practicable source to provide timely cost-effective means of providing the research, to meet the urgent applied research needs of 

an inspection or regulatory agency of the Department (defined as 

APHIS, FSIS, GIPSA, and AMS) in carrying out agricultural marketing programs; programs to protect the animal and plant resources of the United States; and education programs or special 

studies to improve the safety of the food supply of the United 

States. Provision also requires the Secretary to establish guidelines 

to prevent any conflict of interest that may arise if an inspection 

or regulatory agency obtains research from a Federal agency the 

work or technology transfer efforts of which are funded in part by 

an industry subject to the jurisdiction of the inspection or regulatory agency. (Section 792) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(93) Emergency Research Transfer Authority 

The Senate amendment, in addition to any transfer authority 

she may have, authorizes the Secretary to transfer up to 2 percent 

of any appropriation account of the Department for agricultural research, extension, marketing, animal and plant health, nutrition, 

food safety, nutrition education, or forestry programs to any other 

appropriation account of the Department for emergency research, 

extension, or education activities needed to address imminent 

threats to animal and plant health, food safety, or human nutrition, including bioterrorism. Such transfers are limited by three 

conditions: (1) the Secretary must determine the need is so imminent that the need will not be timely met by annual, supplemental, 

or emergency appropriations; (2) the aggregate total of such transfers cannot exceed $5 million per fiscal year; and (3) transfers must 

be approved by OMB. (Section 793) 

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The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(94) Review of Agricultural Research Service 

The Senate amendment requires the Secretary to conduct a review of the purpose, efficiency, effectiveness, and impact on agricultural research of ARS, using persons outside the Department, with 

a report to be submitted to the Agriculture Committees by September 30, 2004; and provides that Secretary shall use no more 

than 0.1 percent of appropriations made available to ARS in fiscal 

years 2002 through 2004 to carry out the study. (Section 794) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment creating a task force appointed by the Secretary to conduct a review of ARS and examining the merits of establishing National Institutes focused on disciplines important to the progress of 

food and agriculture sciences. The report is to be submitted one 

year after enactment of this legislation. (Section 7404) 

The sciences related to plant biology and agriculture have contributed greatly to human welfare. The gains in the next decades 

have the potential to be astonishing. The challenge is to establish 

appropriate mechanisms, with adequate funding, to ensure that the 

United States is home to highest quality research and is able to 

maximize its benefits to its economy. In 1999, food and agriculture 

accounted for 16.4% of the GDP (or $1.5 trillion) yet attracted less 

than two percent of the federal research budget. In real terms, the 

U.S. now spends less on food and agricultural research than was 

spent in 1978. 

The Managers believe a new model for plant and agricultural 

research might be patterned after the highly successful biomedical 

research conducted by the National Institutes of Health (NIH). The 

mechanisms employed by NIH and the National Science Foundation (NSF) have advanced science of the highest quality, attracted 

the best young scientists to careers in research and teaching, and 

provided a stream of discoveries that has been rapid and highly 

beneficial to society. The Managers intend that any new research 

institute would supplement, not supplant, the successful programs 

of USDA and other existing federal research programs. As such, 

the conferees urge the Secretary to place high priority in establishing a task force of members, the majority of which should be 

from the private sector, including institutions of higher education, 

that have extensive background and preeminence in the field of 

plant and agricultural sciences research. In addition, the Secretary 

is urged to designate a Chairperson that has significant leadership 

experience in educational and research institutions and in depth 

knowledge of the research enterprises of the United States in leading the evaluation of the merits of establishing a National Institutes for Plant and Agricultural Sciences and provide recommendations to the Committees. In addition, the task force is charged with 

conducting a separate review of the purpose, efficiency, effectiveness, and impact of agricultural research conducted by the Agricultural Research Service. Together, these two separate reports should 

provide a roadmap for the future of the federal government conVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00626 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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cerning plant and agriculture research and the potential benefits 

that could be realized. 

(95) Technology Transfer for Rural Development 

The Senate amendment directs the Secretary, through RBS 

and ARS, to establish a program to promote USDA tech transfer 

opportunities to rural businesses and residents through a website 

featuring information on such technologies, an annual joint program for State economic development directors and Department 

rural development directors regarding such opportunities, and programs at each ARS lab at least biennially, with participation of 

other Federal labs as appropriate. Funding for the program is to 

come from amounts available to ARS and amounts available to 

RBS for salaries and expenses. (Section 795) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

The Managers expect the Rural Business-Cooperative Service 

to promote to rural businesses and residents the availability of 

technology transfer opportunities with the Agricultural Research 

Service (ARS), research facilities of the Forest Service, and other 

research activities of the Department. The Managers also expect 

ARS to continue its efforts to promote and publicize technology 

transfer opportunities available to the private sector, and especially 

those opportunities that would provide employment in rural areas. 

(96) Beginning Farmer and Rancher Development Program 

The Senate amendment provides $15 million in mandatory 

money in each of fiscal years 2002 through 2006 for the Secretary 

to carry out a beginning farmer and rancher development program 

to provide training, education, outreach, and technical assistance 

initiatives for beginning farmers or ranchers. A ‘‘beginning farmer 

or rancher’’ is defined as a person that has not operated a farm or 

ranch, or operated one for less than 10 years, and meeting such 

other criteria as the Secretary prescribes. 

The program has three parts: 

(1) The Secretary may make competitive grants to new and established local and regional training, education, outreach, and technical assistance initiatives for beginning farmers or ranchers, including programs and services (as appropriate) relating to: (A) 

mentoring, apprenticeships, and internships; (B) resources and referral; (C) assisting beginning farmers or ranchers in acquiring 

land from retiring farmers and ranchers; (D) innovative farm and 

ranch transfer strategies; (E) entrepreneurship and business training; (F) model land leasing contracts; (G) financial management 

training; (H) whole farm planning; (I) conservation assistance; (J) 

risk management education; (K) diversification and marketing 

strategies; (L) curriculum development; (M) understanding the impact of concentration and globalization; (N) basic livestock and crop 

farming practices; (O) the acquisition and management of agricultural credit; (P) environmental compliance; (Q) information processing; and (R) other similar subject areas. Entities eligible to receive grants include collaborative State, local, tribal or regionallybased networks or partnerships of private or public entities including State cooperative extension services, Federal, State, and tribal 

624

agencies, community-based and nongovernmental organizations, 

colleges and universities (including community colleges) and others 

as determined by the Secretary. Grants are for 3 years, are subject 

to a 25% matching requirement, and not less than 25 percent of 

funds used to carry out the grant program must be set aside to 

support programs that address needs of limited resource beginning 

farmers and ranchers, socially disadvantaged beginning farmers 

and ranchers, and farmworkers desiring to become farmers or 

ranchers.

(2) The Secretary is authorized to establish teams to develop 

curricula and conduct educational programs and workshops for beginning farmers and ranchers tailored to diverse crop and regional 

areas. In establishing such teams, the Secretary can use the services of specialists in beginning farmer and rancher training and 

USDA employees who can offer program expertise. The Secretary 

is authorized to enter into cooperative agreements with the same 

entities that are eligible for the grants to carry out team programs. 

(3) The Secretary is required to establish an online clearinghouse to make curricula, training materials, and online courses 

available for beginning farmers and ranchers. 

The Secretary is required to obtain stakeholder input from beginning farmers and ranchers; national, state, tribal, and local organizations or other persons with expertise in operating beginning 

farmer and rancher programs; and the Advisory Committee on Beginning Farmers and Ranchers. 

The provision allows for participation of non-beginning farmers 

and ranchers in these programs to the extent that the Secretary 

determines it will not detract from the primary purpose of beginning farmer and rancher education. 

In addition to the mandatory funding provided, the Secretary 

is authorized to collect and use fees for the delivery of programs 

or workshops by beginning farmer and rancher education teams or 

by the online clearinghouse, and the Secretary is authorized to receive contributions under cooperative agreements for program delivery by education teams. Four percent of funds used for grants 

may be used by the Secretary for administrative costs. Funds provided remain available for obligation for two fiscal years. (Section 

796) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment making the 4% set-aside for administrative costs apply 

only to competitive grants appropriations and making the mandatory funding subject to appropriations. (Section 7405) 

(97) Sense of Congress Regarding Doubling of Funding for Agricultural Research 

The Senate amendment expresses sense of Congress that food 

and agricultural research funding should be doubled over next five 

years. (Section 797) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7406) 

625

(98) Rural Policy Research 

The Senate amendment provides $15 million in mandatory 

money in each of fiscal years 2002 through 2006 for the Secretary 

to make competitive research grants for applied and outcome oriented research and policy research and analysis of rural issues relating to: (1) rural sociology; (2) effects of demographic change, including aging population, outmigration, and labor resources; (3) 

needs of groups of rural citizens, including senior citizens, families, 

youth, children, and socially disadvantaged individuals; (4) rural 

community development; (5) rural infrastructure, including water 

and waste, community facilities, telecommunications, electricity, 

and high-speed broadband services; (6) rural business development, 

including credit, venture capital, cooperatives, value-added enterprises, new and alternative markets, farm and rural enterprise formation, and entrepreneurship; (7) farm management, including 

strategic planning, business and marketing opportunities, risk 

management, natural resources and environmental management, 

organic and sustainable farming systems, and intergenerational 

transfer strategies; (8) rural education and extension programs, including methods of delivery, availability of resources, and use of 

distance learning; and (9) rural health, including mental health, 

on-farm safety, and food safety. 

The Secretary must seek stakeholder input in making grants, 

and ensure that grants will provide high-quality research of use to 

public policymakers and private entities in making decisions that 

affect development in rural areas. 

Eligible grantees include individuals, colleges and universities, 

a State cooperative institution, a community college, a nonprofit organization, institution, or association, a business association, or a 

regional partnership of public and private entities. Grant terms 

may be up to 5 years. The Secretary may establish a matching requirement, but a grant to a business association is subject to a 100 

percent match. Up to four percent of funds may be used by the Secretary for administrative costs. Funds provided remain available 

for two fiscal years. (Section 798) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(99) Priority for Farmers and Ranchers Participating in Conservation Programs 

The Senate amendment requires the Secretary, in carrying out 

new on-farm research or extension programs or projects authorized 

by this bill, amendments made by this bill, and any later enacted 

law, to give priority to carrying out such programs or projects using 

farms and ranchers of farmers and ranchers that participate in 

Federal agricultural conservation programs. (Section 798A) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(100) Organic Production and Market Data Initiatives 

The Senate amendment requires the Secretary to ensure that 

segregated data on the production and marketing of organic agricultural products is included in the ongoing baseline of data collecVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00629 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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tion regarding agricultural production and marketing. (Section 

798B) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7407) 

(101) Organically Produced Product Research and Education 

The Senate amendment requires the Secretary, in consultation 

with the Advisory Committee on Small Farms, to submit a report 

to the Agriculture Committees by December 1, 2004 on: 

(1) the impact on small farms of the implementation of the national organic program; and (2) the production and marketing costs 

to producers and handlers associated with transitioning to organic 

production. (Section 798C) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(102) International Organic Research Collaboration

The Senate amendment requires the Agricultural Research 

Service and the National Agricultural Library to facilitate access 

by research and extension professionals to organic research conducted outside the United States. (Section 798D) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7408) 

(103) Report on Producers and Handlers of Organic Agricultural 

Products 

The Senate amendment provides for a report to be submitted 

not later than 1 year after funds are made available to carry out 

this section. (Section 798E) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Section 7409) 

TITLE VIII—FORESTRY INITIATIVES

(1) Repeal of Forestry Incentives Program (FIP) and Stewardship 

Incentive Program (SIP) 

The House bill repeals the Forestry Incentives Program and 

the Stewardship Incentives Program. (Sec. 801) 

The Senate amendment reauthorizes the Forestry Incentives 

Program through 2006. The Senate amendment contains no comparable provision regarding the Stewardship Incentives Program. 

(Sec. 804) 

The Conference substitute adopts the House provision. (Sec. 

801) 

(2) Establishment of New Cost Share Assistance Program 

The House bill amends the Cooperative Forestry Assistance 

Act of 1978 by inserting a new section 4. (Sec. 802) 

The Senate amendment amends the Cooperative Forestry Assistance Act of 1978 by inserting a new program after section 6. 

(Sec. 806) 

627

The Conference substitute adopts the House provision. (Sec. 

802) 

(3) Findings 

The House bill sets forth Congressional findings with respect 

to dependence on private non-industrial forest lands, demand for 

assistance from owners of non-industrial private forest land, environmental benefits of good stewardship of forest land, economic 

benefits resulting from non-industrial private forest lands, wildfire 

threats, and development pressure faced by owners of non-industrial private forest land. (Sec. 802(a)) 

The Senate amendment sets forth Congressional findings with 

respect to dependence on private non-industrial forest lands, demand for assistance from owners of non-industrial private forest 

land, environmental benefits of good stewardship of forest land, 

economic benefits resulting from non-industrial private forest 

lands, wildfire threats, development pressure faced by owners of 

non-industrial private forest land, federal and state cooperation in 

forest fire prevention, difficulty for owners of non-industrial private 

forest land to invest in the management of long-rotation forest 

stands, and the benefits of comprehensive, multi-resource planning 

assistance to landowners. (Sec. 806(a)(1)) 

The Conference substitute deletes both provisions. 

(4) Purpose 

The House bill describes the purpose of the new section as: (1) 

strengthening the commitment of the Secretary to sustainable forest management, and (2) establishing a coordinated and cooperative federal, state and local sustainable forestry program for nonindustrial private forest land. (Sec. 802(b)) 

The Senate amendment describes the purpose of the new section as: (1) strengthening the commitment of the Secretary to sustainable forest management, and (2) establishing a coordinated and 

cooperative federal, state and local sustainable forestry program for 

non-industrial private forest land. (Sec. 806(a)(2)) 

The Conference substitute adopts the Senate provision. (Sec. 

806(a)(2)) 

(5) Forest Land Enhancement Program 

The House bill establishes a Forest Land Enhancement Program by inserting a new section 4 in the Cooperative Forestry Assistance Act of 1978. (Sec. 802(c)) 

The Senate amendment establishes a Sustainable Forest Management Program by inserting a new section 6A in the Cooperative 

Forestry Assistance Act of 1978. (Sec. 806(b)) 

The Conference substitute adopts the House provision. (Sec. 

802 (c)) 

(6) Definitions 

The House bill defines: (1) non-industrial private forest land, 

(2) owner, (3) Secretary, and (4) state forester. (Sec. 802) 

The Senate amendment defines: (1) committee, (2) Indian tribe, 

(3) program, (4) non-industrial private forest land, (5) owner, and 

(6) state forester. (Sec. 806) 

628

The Conference substitute adopts the House provision with 

amendment to include definitions for the terms Committee and Indian Tribe. 

(7) Establishment 

The House bill (1) directs the Secretary to establish a Forest 

Land Enhancement Program (FLEP) for the purposes of providing 

financial, technical, educational, and related assistance to State 

Foresters to assist private landowners in actively managing their 

land through the utilization of management expertise, financial assistance and educational programs; (2) directs the Secretary to administer the program through NRCS; (3) directs the Secretary to 

implement the program in coordination with the State Foresters. 

(Sec. 802) 

The Senate amendment (1) directs the Secretary to establish a 

Sustainable Forestry Management Program for the purposes of providing financial assistance to State foresters, and encouraging the 

long-term sustainability of non-industrial private forest land in 

U.S. by assisting owners in actively managing land and related resources through the use of State, Federal, and private sector resource management expertise, financial assistance, and educational 

programs; (2) directs the Secretary to administer the program 

through the State Foresters, in coordination with the Committees, 

and in consultation with Federal, State, and local natural resource 

management agencies, institutions of higher education and a broad 

range of private sector interests. (Sec. 806) 

The Conference substitute adopts the Senate provision. (Sec. 

806) 

(8) Program Objectives

The House bill directs the Secretary to target resources to 

achieve a list of objectives including: (1) making investments in 

practices to establish, restore, protect, manage, maintain and enhance the health and productivity of non-industrial private forest 

land, (2) ensuring that afforestation, reforestation, improvement of 

poorly stocked stands, timber stand improvement, practices necessary to improve seedling growth and survival, and growth enhancement practices occur where needed, (3) reducing the risks and 

helping to restore, recover and mitigate damage caused by fire, insects, invasive species, disease, and weather, (4) increasing and enhancing carbon sequestration, (5) enhancing implementation of 

agro forestry practices, and (6) maintaining and enhancing the forest land base and leveraging State and local financial and technical 

assistance. (Sec. 802) 

The Senate amendment directs the Secretary to allocate the resources among the states (in accordance with the distribution formula described below) to encourage: (1) the investment in practices 

to establish, restore, protect, manage, maintain, and enhance the 

health and productivity of non-industrial private forest land, and 

(2) the occurrence of afforestation, reforestation, improvement of 

poorly stocked stands, practices necessary to improve seedling 

growth and survival, and growth enhancement practices as needed 

to enhance and sustain the long-term productivity of timber and 

non-timber forest resources to meet public demand for forest reVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00632 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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sources, provide environmental benefits, protect riparian buffers 

and wetlands, maintain and enhance fish and wildlife habitat, enhance soil, air and water quality, reduce soil erosion and maintain 

soil quality, maintain and enhance the forest land base, reduce the 

threat of catastrophic wildfires, and preserve aesthetic quality and 

opportunities for outdoor recreation. (Sec. 806) 

The Conference substitute adopts the House provision with 

minor amendments. 

(9) Eligibility 

The House bill makes an owner of non-industrial private forest 

land eligible for cost-share assistance if the owner: (1) agrees to develop and implement a forest plan developed in coordination with 

and/or approved by the State forester, state official, or private sector program in consultation with the State Forester, (2) agrees to 

implement the plan for a period of 10 years unless the State Forester approves a modification to such plan, and (3) meets acreage 

restrictions determined by the State Forester in conjunction with 

the State Forest Stewardship Coordinating Committee. (Sec. 802) 

The Senate amendment (a) makes an owner of non-industrial 

private forest land eligible for cost-share assistance if the owner: 

(1) develops a management plan that addresses site-specific activities and practices and is approved by the State Forester, (2) agrees 

to implement the plan for at least 10 years unless the State Forester approves a modification to the management plan, and (3) 

owns not more than 1,000 acres; and (b) creates an exception to the 

above acreage restriction requirement for owners with more than 

1,000 acres but less than 5,000 acres where the Secretary, in consultation with the State forester, determines that significant public 

benefits will accrue as a result of the owner’s participation. (Sec. 

806) 

The Conference substitute adopts the House provision with 

minor changes. 

(10) State Priorities 

The House bill allows the Secretary to develop State priorities 

for cost-share assistance in consultation with the State Forester 

and the State Forest Stewardship Coordinating Committee. (Sec. 

802) 

The Senate amendment (1) directs the State Forester and the 

Committee of the State to develop and submit to the Secretary a 

5-year plan that describes the funding priorities of the state and 

makes this requirement a condition of receipt of funding under the 

Sustainable Forest Management program; (2) requires the state 

priority plan to include documentation of public participation in the 

development of the plan; (3) requires the Secretary to ensure, to 

the maximum extent practicable, that the need for expanded technical assistance programs for owners is met in the annual funding 

priorities of each state. (Sec. 806) 

The Conference substitute adopts the Senate provision with 

minor changes. 

630

(11) Development of Plan 

The House bill makes a landowner eligible for cost-share assistance for the development of a forest management plan required 

to participate in the FLEP. (Sec. 802) 

The Senate amendment requires a landowner to submit a plan 

to the State Forester that is prepared by a professional resource 

manager, identifies and describes projects and activities to protect 

certain environmental qualities in a manner that is compatible 

with the objectives of the owner, addresses criteria established by 

the State and Committee, and applies to the portion of the land on 

which any project or activity funded under the program will be carried out. In addition, the landowner must also agree that all 

projects and activities conducted on the land will be consistent with 

the management plan.(Sec. 806) 

The Conference substitute adopts the Senate provision with 

minor changes. (Sec. 806) 

(12) Approved Activities 

The House bill directs the Secretary, in consultation with the 

State Forester and State Forest Stewardship Coordinating Committee, to develop a list of approved forest activities and practices 

that will be eligible for cost-share assistance under the FLEP within each state. In developing this list, the Secretary is required to 

attempt to achieve the establishment, restoration, management, 

maintenance and enhancement of forests and trees for the following: sustainable growth and management for timber production, 

water quality, energy conservation, habitat, invasive species control, hazardous fuels reduction, development of forest or stand 

management plans and other activities approved by the Secretary. 

(Sec. 802) 

The Senate amendment requires the Secretary, in consultation 

with the State forester and appropriate committee, to develop a list 

of approved forest activities and practices eligible for cost-share assistance. Approved activities may include: (1) the establishment, 

management, maintenance and restoration of forests for 

shelterbelts, windbreaks, aesthetic quality and other conservation 

purposes, (2) sustainable growth and management for timber production, (3) the protection of water quality, (4) the preservation, 

restoration or development of habitat, (5) invasive species control, 

(6) the conduct of other management activities such as hazardous 

fuels reduction that reduce the risks to forests posed by fire, (7) the 

development of management plans, (8) the acquisition of permanent conservation easements, and (9) the conduct of other activities 

approved by the Secretary. (Sec. 806) 

The Conference substitute adopts the Senate provision with 

minor changes including an amendment to strike the acquisition of 

permanent easements as an eligible activity. 

(13) Reimbursement of Eligible Activities 

The House bill (1) directs the Secretary to share the cost of implementing the approved activities that the Secretary determines 

are appropriate to carry out the Forest Land Enhancement Program; (2) directs the Secretary to determine the appropriate reimbursement rate for cost-share payments and the schedule for makVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00634 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
631

ing such payments; (3) prohibits the Secretary from making costshare payments in an amount that exceeds 75% of the total cost, 

or a lower percentage as determined by the State forester; (4) directs the Secretary to determine the maximum payment made to 

any one owner. (Sec. 802) 

The Senate amendment allows the Secretary to provide costshare assistance to an owner to develop a sustainable forest management plan. 

The Senate amendment prevents an owner from receiving any 

cost-share assistance for management of non-industrial private forest land if the owner receives assistance for that land under the 

FIP, SIP or any conservation program administered by the Secretary. 

The Senate amendment directs the Secretary, in consultation 

with the State forester, to determine the rate and timing of costshare payments. 

The Senate amendment limits the amount of a cost-share payment to the lesser of: 75% of the total cost of implementing the 

project or activity or such lesser percentage of the total cost of implementing the project or activity as is determined by the appropriate State forester; and requires the Secretary to determine the 

maximum aggregate amount of cost-share payments that each 

owner may receive. (Sec. 806) 

The Conference substitute adopts the House provision. (Sec. 

802) 

(14) Recapture 

The House bill directs the Secretary to establish and implement a mechanism to recapture payments made to an owner in the 

event that the owner fails to implement any approved activity for 

which the owner received cost-share payments under the Forest 

Land Enhancement Program. (Sec. 802) 

The Senate amendment directs the Secretary to establish a 

procedure to recapture cost-share payments in any case in which 

the recipient fails to implement a project or activity in accordance 

with the management plan or comply with any requirement of Sustainable Forest Management Program. (Sec. 806) 

The Conference substitute adopts the House provision. (Sec. 

802) 

(15) Distribution 

The House bill directs the Secretary to consider the following 

in distributing funds to the states under the Forest Land Enhancement program: the number of owners eligible in each state; demand for timber; demand for agro forestry; need to improve forest 

health, etc. (Sec 802) 

The Senate amendment directs the Secretary, acting through 

the State Foresters and considering the program objectives (described above), to develop a nationwide funding formula for the 

Sustainable Forest Management program. In developing the formula, the Secretary is required to assess the public benefits that 

would result from the distribution as well as the following factors: 

the total acreage of non-industrial private forest land in each state, 

the potential productivity of that land, the number of owners eligiVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00635 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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ble for cost-sharing in each state, the opportunities to enhance nontimber resources on that land, the anticipated demand for timber 

and non-timber resources, the need to improve forest health, the 

need and demand for agro forestry practices in each state, the need 

to maintain and enhance the forest land base, and the need for 

afforestation, reforestation and timber stand improvement. (Sec. 

806) 

The Conference substitute adopts the Senate provision with 

minor changes. 

(16) Availability of Funds 

The House bill makes $200 million available from the CCC for 

carrying out the Forest Land Enhancement program from October 

1, 2001 to September 30, 2011. (Sec. 802) The Senate amendment makes $48 million available from the 

Treasury during fiscal years 2002 through 2005 to fund the Sustainable Forest Management Program. (Sec. 806) The Conference substitute provides for $100 million from the 

CCC to carry out the program. 

(17) Conforming Amendment 

The House bill amends section 246(b)(2) of Department of Agriculture Reorganization Act of 1994 by striking ‘‘forestry incentive 

program’’ and inserting ‘‘Forest Land Enhancement Program’’. (Sec. 

802(d)) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Sec. 

802(d)) 

(18) Reports 

The Senate amendment (1) directs the states to submit an interim report to the Secretary not later than 21⁄2 years after the 

date on which funds are made available to implement a state Sustainable Forest Management priority plan. The report must describe the status of projects and activities being funded under the 

plan; and (2) requires states to submit a final report no later than 

5 years after the date on which funds are made available to implement a state priority plan. The report must describe the status of 

all projects and activities funded under the plan as of that date. 

(Sec. 806) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

changes to require one report one year prior to reauthorization of 

the program. 

(19) Renewable Resources Extension Activities (Sustainable Forestry 

Outreach Initiative) 

The House bill (1) reauthorizes the RREA through 2011 and 

amends the amount of authorization from $ 15 million to $ 30 million; and (2) amends the RREA by inserting a new Sustainable Forestry Outreach Initiative designed to educate landowners on the 

value and benefits of practicing sustainable forestry, and to educate 

landowners about the variety of programs available to them. (Sec. 

803) 

633

The Senate amendment (1) reauthorizes the RREA through 2006 and amends the amount of the authorization from $ 15 million to $30 million per year; (2) amends the RREA by inserting a 

new Sustainable Forestry Outreach Initiative designed to educate

landowners on the value and benefits of practicing sustainable forestry, and to educate landowners about the variety of programs 

available to them. (Sec. 803) 

The Conference substitute adopts the Senate provision. (Sec. 

803) 

(20) Enhanced Community Fire Protection 

The House bill amends the Cooperative Forestry Assistance 

Act of 1978 by adding a new Enhanced Community Fire Protection 

program. (Sec. 804) 

The Senate amendment amends the Cooperative Forestry Assistance Act of 1978 by adding an Enhanced Community Fire Protection section. (Sec. 811) 

The Conference substitute adopts the House provision. (Sec. 

804) 

(21) Findings 

The House bill contains findings of Congress with respect to severity and intensity of wildland fires, 2000 fire season, threat of 

wildfires to communities in the wildland-urban interface, National 

Fire Plan, authority for addressing the wildfire issue on private 

lands and federal interest in enhanced community protection from 

wildfire. (Sec. 804(a)) 

The Senate amendment contains findings of Congress with respect to severity and intensity of wildland fires, 2000 fire season, 

threat of wildfires to communities in the wildland-urban interface, 

National Fire Plan, authority for addressing the wildfire issue on 

private lands and federal interest in enhanced community protection from wildfire; and adds additional finding with respect to forest wetlands. (Sec. 811(a)) 

The Conference substitute adopts the House provision with 

minor changes. (Sec. 804(a)) 

(22) Enhanced Protection 

The House bill adds a new section 10A to the Cooperative Forestry Assistance Act of 1978. (Sec. 804(b)) 

The Senate amendment adds a new section 10A to the Cooperative Forestry Assistance Act of 1978. (Sec. 811(b)) 

The Conference substitute adopts the House provision. (Sec. 

804(b)) 

(23) Cooperative Management Relating to Wildfire Threats 

The House bill allows the Secretary to cooperate with State 

foresters and equivalent state officials to: (1) prevent and control 

wildfire, (2) protect communities from wildfire threats, (3) enhance 

the growth and maintenance of trees and forests, and (4) ensure 

the continued production of all forest resources. (Sec. 804) 

The Senate amendment allows the Secretary to cooperate with 

State foresters and equivalent state officials to: (1) prevent, control, 

suppress and assist in the prescribed use of fires, (2) protect comVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00637 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
634

munities from wildfire threats, (3) enhance the growth and maintenance of trees and forests, and (4) ensure the continued production 

of all forest resources. (Sec. 811) 

The Conference substitute adopts the House provision. (Sec. 

804) 

(24) Community and Private Land Fire Assistance Program 

The House bill (1) directs the Secretary to establish a Community and Private Land Fire Assistance Program to be administered 

by the Forest Service and implemented through the State forester 

or an equivalent state official; and (2) allows the Secretary to undertake the following activities on both federal and non-federal 

lands: fuel hazard mitigation and prevention, invasive species management, multi-resource wildfire planning, community protection 

planning, community and landowner education, market development and expansion, improved wood utilization, and special restoration projects. (Sec. 804) 

The Senate amendment (1) directs the Secretary to establish a 

Community and Private Land Fire Assistance Program to be administered by the Secretary and, with respect to non-federal lands, 

carried out through the State forester or equivalent state official; 

allows the Secretary to undertake the following activities on both 

federal and non-federal lands: fuel hazard mitigation and prevention, invasive species management, multi-resource wildfire planning, community protection planning, community and landowner 

education, market development and expansion, improved wood utilization, and special restoration projects; and (2) directs the Secretary to give priority to contracts with local persons or entities in 

carrying out the program. (Sec. 811) 

The Conference substitute adopts the House provision with 

minor changes. (Sec. 804) 

(25) Authorization of Appropriations 

The House bill authorizes $35 million in appropriations for 

each fiscal year during 2002 through 2011 for the Enhanced Community Fire Protection program. (Sec. 804) 

The Senate amendment authorizes $35 million in appropriations for each fiscal year during 2002 through 2006 for the Enhanced Community Fire Protection program. (Sec. 811) 

The Conference substitute adopts House provision. (Sec. 804) 

(26) International Forestry Program/Office 

The House bill reauthorizes the International Forestry Program through 2011. (Sec. 805) 

The Senate amendment reauthorizes the International Forestry Office through 2006. (Sec. 801) 

The Conference substitute adopts the Senate provision. (Sec. 

801) 

(27) Long-Term Forest Stewardship Contracts 

The Senate amendment (1) lists the findings of Congress with 

respect to wildfire damage, risk to communities from wildfire, accumulation of heavy forest fuel loads, modification of forest fuel load 

conditions, hazardous fuels as a renewable resource, and the need 

635

for the United States to invest in technologies that promote economic and entrepreneurial opportunities in processing forest products removed through hazardous fuel reduction activities (Sec. 

809(a)); and (2) defines: (a) biomass-to-energy facility, (b) eligible 

community, (c) forest biomass, (d) hazardous fuel, (e) Indian tribe, 

(f) National Fire Plan, (g) person, and (h) Secretary. (Sec. 809(b)) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(28) Annual Assessment of Treatment Acreage 

The House bill directs the Secretary to submit to Congress an 

assessment of the number of acres of forested National Forest System lands recommended to be treated using stewardship contracts 

during the next fiscal year no later than March 1 of each of fiscal 

years 2002 through 2006. This assessment is to be based on the 

treatment schedules contained in the report entitled ‘‘Protecting 

People and Sustaining Resources in Fire-Adapted Ecosystems’’ and 

dated October 13, 2000; and requires the assessment to identify the 

acreage by condition class, type of treatment and treatment year to 

achieve the restoration goals outlined in the report. (Sec. 806(a)) 

The Senate amendment (1) directs the Secretary to submit to 

Congress an assessment of the number of forested National Forest 

System acres recommended for treatment during the next fiscal 

year using stewardship contracts no later than March 1 of each of 

fiscal years 2002 through 2006. This assessment is to be based on 

the treatment schedules contained in the report ‘‘Protecting People 

and Sustaining Resources in Fire-Adapted Ecosystems’’ and dated 

October 13, 2000; (2) requires the assessment to identify the acreage by condition class, type of treatment, and treatment year; (3) 

in addition, the assessment is to give priority to condition class 3 

acreage, provide information relating to the type of material and 

estimated quantity and range of sizes of material, and describe 

land allocation categories in which the contract authorities will be 

used. (Sec. 809(d)(1)) 

The Conference substitute did not adopt this provision. 

(29) Funding Recommendation 

The House bill directs the Secretary to include in the annual 

assessment a request for funds sufficient to implement the recommendations contained in the assessment. (Sec. 806(b)) 

The Senate amendment directs the Secretary to include in the 

annual assessment a request for funds sufficient to implement the 

recommendations contained in the assessment. (Sec. 809(d)(2)) 

The Conference substitute did not adopt this provision. 

(30) Stewardship End Result Contracting 

The House bill (1) permits the Secretary to enter into stewardship contracts to implement the National Fire Plan on National 

Forest Service lands under the direction of the assessment and 

with the authorities described in section 347 of the Department of 

the Interior Appropriations Act of 1999. But, the period of the contracts will be for 10 years. The House bill also provides that the 

authority of the Secretary to enter into contracts under this section 

expires on September 30, 2007. (Sec. 806(c)) 

636

The Senate amendment permits the Secretary to enter into no 

more than 28 stewardship end result contracts to implement the 

National Fire Plan. The contracting goals and authorities outlined 

in the original stewardship contracting authorization in the 1999 

Department of the Interior Appropriations Act (16 U.S.C. 2104 

note; Public Law 105–277, Section 347, subsections (b) through (g) 

apply to these contracts. Fourteen of the 28 contracts shall be subject to additional conditions. (Sec. 809(d)(3)) 

The Conference substitute did not adopt this provision. 

(31) Status Report 

The House bill beginning in fiscal year 2003, requires the Secretary to include a status report of stewardship contracts underway 

in the annual assessment submitted to Congress. (Sec. 806(d)) 

The Senate amendment, beginning in fiscal year 2003, requires 

the Secretary to include in the annual assessment a status report 

on the contracts entered into under the Long-term Forest Stewardship Contracts for Hazardous Fuels Removal section. (Sec. 

809(d)(3)(C)) 

The Conference substitute did not adopt this provision. 

(32) Authorization of Appropriations 

The Senate amendment authorizes to be appropriated such 

sums as are necessary to carry out the Long-term Forest Stewardship Contracts for Hazardous Fuels Removal in subsection (d) for 

fiscal years 2002 through 2006. (Sec. 809(d)(4)) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(33) Excluded Areas 

The Senate amendment allows the Secretary to carry out the 

Wildfire Prevention and Hazardous Fuel Purchase Program only in 

the wildland/urban interface. (Sec. 809(e)) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(34) Duration 

The House bill provides that the authority of the Secretary to 

enter into contracts under the Long-term Forest Stewardship contracts for Hazardous Fuels Removal and Implementation of National Fire Plan section expires on September 30, 2007. (Sec. 806 

(c)(2)) 

The Senate amendment terminates the Secretary’s authority 

under the Wildfire Prevention and Hazardous Fuel Purchase Program on September 30, 2006. (Sec. 809(f)) 

The Conference substitute did not adopt this provision. 

(35) Hazardous Fuels to Energy Grant Program 

The House bill lists findings of Congress with respect to damages caused by wildfire disasters, risk of communities to wildfire, 

effect that modification of forest fuel load conditions will have on 

minimizing damage from wildfires, and hazardous fuels as an 

abundant renewable resource. (Sec. 921(a)) 

637

The Senate amendment lists Congress findings with respect to 

wildfire damage, risk to communities from wildfire, accumulation 

of heavy forest fuel loads, modification of forest fuel load conditions, hazardous fuels as a renewable resource, and the need for 

the United States to invest in technologies that promote economic 

and entrepreneurial opportunities in processing forest products removed through hazardous fuel reduction activities. (Sec. 809 (a)) 

The Conference substitute did not adopt this provision. 

(36) Definitions 

The House bill defines: (1) biomass-to-energy-facility, (2) forest 

biomass, (3) hazardous fuels, and (4) Secretary concerned. (Sec. 

921(e)) 

The Senate amendment defines: (1) biomass-to-energy facility, 

(2) eligible community, (3) forest biomass, (4) hazardous fuel, (5) 

Indian tribe, (6) National Fire Plan, (7) person, and (8) Secretary. 

(Sec. 809(b)

The Conference substitute did not adopt this provision. 

(37) Hazardous Fuels to Energy Grant Program 

The House bill authorizes the Secretary to make grants to the 

operators of a biomass-to-energy facility to offset the costs incurred 

to purchase hazardous fuels from forest lands for the use in the 

production of electric energy, useful heat, or transportation fuels; 

and requires that grant recipients be selected on the basis of their 

planned purchases of hazardous fuels and the level of anticipated 

benefits to reduced wildfire risk. (Sec. 921(b)) 

The Senate amendment (1) authorizes the Secretary to make 

grants to persons that operate biomass-to-energy facilities to offset 

the costs incurred by those persons in purchasing hazardous fuels 

AND persons in rural communities that are seeking ways to improve the use of, or add value to, hazardous fuels; and (2) directs 

the Secretary to select recipients for grants based on planned purchases of hazardous fuels, the level of anticipated benefits of purchases in reducing risk of wildfires, the extent to which the project 

avoids adverse environmental impacts, and the level of anticipated 

benefits for eligible communities. (Sec. 809(c)(1)) 

The Conference substitute did not adopt this provision. 

(38) Grant Amounts 

The House bill requires grants to be equal to at least $5 per 

ton of hazardous fuels delivered, but not to exceed $10 per ton, 

based on the distance of hazardous fuels from the biomass-to-energy facility. (Sec. 921(c)) 

The Senate amendment (1) requires that grant amounts be 

based on the distance required to transport hazardous fuels to a 

biomass-to-energy facility and the cost of removal of hazardous 

fuels; (2) requires that grants be in an amount that is at least 

equal to $5 per ton but not more than $10 per ton of hazardous 

fuels; and (3) limits grants to $1,500,000 per year, per facility. But, 

a facility with an annual production of 5 megawatts or less is not 

subject to this limitation. (Sec. 809) 

The Conference substitute did not adopt this provision. 

638

(39) Monitoring of Grant Recipient Activities 

The House bill requires grant recipients to keep such records 

as the Secretary may require, and on notice by the Secretary, grant 

reasonable access to facility and an opportunity to review records. 

(Sec. 921(d)) 

The Senate amendment requires grant recipients to keep such 

records as the Secretary may require, and on notice by the Secretary, grant reasonable access to facility and an opportunity to review records. (Sec. 809(c)(3)) 

The Conference substitute did not adopt this provision. 

(40) Monitoring of Effects of Treatment 

The House bill requires the Secretary to monitor federal lands 

from which hazardous fuels are removed and sold to biomass-to-energy facilities to determine and document the reduction in fire hazard. (Sec. 921(e)) 

The Senate amendment requires the Secretary to monitor federal lands from which hazardous fuels are removed and sold to a 

biomass-to-energy facility to determine the environmental impact 

of fuels removal; requires the Comptroller General to monitor the 

number of jobs created, the opportunities created for small and 

micro-businesses and the types and amounts of energy supplies created and energy prices for eligible communities; and requires the 

Comptroller General to submit an annual report to Congress beginning in fiscal year 2003 that describes the information obtained 

through monitoring. (Sec. 809(c)(4)) 

The Conference substitute did not adopt this provision. 

(41) Authorization of Appropriations 

The House bill authorizes $50 million in appropriations for 

each fiscal year. (Sec. 921(g)) The Senate amendment authorizes $50 million in appropriations for each fiscal year from 2002 to 2006. (Sec. 809(c)(7)) 

The Conference substitute did not adopt this provision. 

(42) Review and Report 

The Senate amendment directs the Comptroller General to 

submit a report to Congress that describes the results and effectiveness of the Wildfire Prevention and Hazardous Fuel Purchase 

Program not later than September 30, 2004; requires the Secretary 

to submit to Congress an annual report describing the results of 

the pilot program that includes an identification of the size of each 

facility that receives a grant and the haul radius associated with 

each grant; and requires the Secretary to submit a report to Congress by December 1, 2003 which describes the technical feasibility 

of the use of small diameter trees and biomass for energy production, the environmental impacts of using small diameter trees and 

forest residues and any social or economic benefits of small-scale 

biomass energy units for rural communities. (Sec. 809 (c)(5)) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(43) Grants to Other Persons 

The House bill contains no comparable provision. 

639

The Senate amendment allows the Secretary to make grants to 

persons in rural communities that are seeking ways to improve the 

use of, or add value to, hazardous fuels. (Sec. 809(c)(6)) 

The Conference substitute did not adopt this provision. 

(44) Excluded Areas 

The Senate amendment allows the Secretary to carry out the 

Wildfire Prevention and Hazardous Fuel Purchase Program only in 

the wildland/urban interface. (Sec. 809(e)) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(45) Termination of Authority 

The Senate amendment terminates the Secretary’s authority 

under the Wildfire Prevention and Hazardous Fuel Purchase Program on September 30, 2006. (Sec. 809(f)) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision.

(46) McIntire-Stennis Cooperative Forestry Research Program 

The House bill reaffirms the importance of the McIntire-Stennis Cooperative Forestry Act. (Sec. 807) 

The Senate amendment reaffirms the importance of the 

McIntire-Stennis Cooperative Forestry Act. (Sec. 802) 

The Conference substitute adopts the House provision with 

minor technical change to public law number. (Sec. 807) 

The Managers recognize the importance of university-based 

programs in forest and natural resources to the success of many of 

the technical assistance and cost-share programs in the Conservation and Forestry Titles of this Act including the Conservation Reserve Program, EQIP, Sustainable Forestry Outreach Initiative, 

Forest Land Enhancement Program. As these programs are expanded and enhanced, there will be an increased need for sciencebased information in the development of these initiatives. The nation’s forestry schools and colleges are uniquely equipped to expand 

the base of knowledge and to assist in the delivery of educational 

outreach to our nation’s nonfederal forest landowners. The Managers expect the Department to seek greater cooperation and collaboration with universities as it implements these various technical assistance and cost-share programs. 

(47) Sustainable Forestry Cooperative Program 

The Senate amendment amends the Cooperative Forestry Assistance Act of 1978 by inserting a new section 5A: 

The Senate amendment defines: (a) farmer or rancher, (b) forestry cooperative, and (c) non-industrial private forestland. 

The Senate amendment directs the Secretary to establish a 

program to provide grants to nonprofit organizations on a competitive basis to establish and support forestry cooperatives. 

The Senate amendment requires funds to be used for the support of forestry cooperatives or the support of a sustainable forestry 

practice of a member of a cooperative. 

The Senate amendment requires the Secretary to provide 

funds only to a nonprofit organization with demonstrated expertise 

640

in cooperative development as determined by the Secretary. Requires funds being used to support a land management practice to 

comply with an approved forest plan. The Senate amendment makes $2 million available from the 

Treasury to remain available until expended. (Sec. 805) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(48) Forest Fire Research Centers 

The Senate amendment lists Congressional findings with respect to: (1) increasing threat of fire to forest land and rangeland, 

(2) concentration of fire threat in the western part of the United 

States, (3) degraded condition of forest land and rangeland, (4) results of current land management practices in the United States, 

(5) population movement into wildland-urban interface, (6) budgets 

of governments, (7) diminishing Federal resources for fire research, 

(h) funding for Federal fire research program, and (8) critical need 

for cost-effective investments in improved fire management technologies. (Sec. 808(a)) 

The Senate amendment directs the Secretary to establish at 

least 2 forest fire research centers at institutions of higher education to: (1) conduct integrative, interdisciplinary research into the 

ecological, socioeconomic and environmental impact of fire control 

and the use of managing ecosystems and landscapes to facilitate 

fire control, and (2) to develop mechanisms to transfer new fire 

technologies. (Sec. 808(b)) 

The Senate amendment directs the Secretary, in consultation 

with the Secretary of Interior, to establish an advisory committee 

to establish priorities for research projects conducted at the forest 

fire research centers established above. (Sec. 808(c)) 

The Senate amendment authorizes the appropriation of such 

sums as are necessary to carry out this section. (Sec. 808(d)) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(49) Watershed Forestry Assistance Program 

The Senate amendment lists Congressional findings with respect to: (1) public attitudes about forest management, (2) benefits 

of proper stewardship, (3) importance of forests to protecting the 

drinking water supply, (4) forest loss and fragmentation in urbanizing areas, (5) scientific evidence and public awareness about forest 

management and water quality, (6) application of forestry best 

management practices, (7) efforts to improve forestry best management practices, (8) role of forests in maintenance of clean water, (9) 

burden of management on private forest land owners, (10) need to 

integrate management, conservation, restoration and stewardship, 

(11) responsibility of federal government, (12) availability of federal 

assistance, and (13) the need for increased research, education, 

technical and financial assistance to private forest land owners. 

The Senate amendment describes the purposes of this section 

as: (1) improving the understanding of landowners and public with 

respect to the relationship between water quality and forest management, (2) encouraging landowners to utilize trees to promote 

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tection in watersheds that provide drinking water, (4) establishing 

new partnerships, and (5) providing technical and financial assistance to States. 

The Senate amendment directs the Secretary to establish a 

new program to provide states, through the State foresters, technical, financial, and related assistance to expand forest stewardship and prevent water quality degradation and address watershed 

issues on non-Federal forestland (Sec. 812(c)); requires the Secretary to cooperate with the State Foresters to develop a plan to 

provide technical assistance to States in addressing water quality; 

requires the plan to include provisions to accomplish the following 

tasks: (1) build and strengthen watershed partnerships, (2) provide 

State BMPs and water quality technical assistance to landowners, 

(3) provide technical guidance to land managers and policymakers, 

(4) complement State non-point source assessment and management plans, (5) provide opportunities for coordination and cooperation among Federal and State agencies for water and watershed 

management, and (6) provide forest resource data for improved implementation of state BMPs; directs the Secretary to develop a costshare program to provide grants and other assistance for eligible 

programs and projects; sets forth criteria which the Secretary must 

consider in allocating funds among the states; requires the State 

foresters, in coordination with the State Coordinating Committee, 

to provide annual grants and cost-share payments to communities, 

non-profit groups, and landowners to carry out eligible programs 

and projects; directs the Secretary to prioritize cost-share assistance to eligible programs and projects that are identified by the 

State foresters and the State Stewardship Committees as having a 

greater need for assistance; limits the amount of federal cost-share 

to not exceed 75% and permits the non-federal share to be made 

in the form of cash, services, or in-kind contributions; allows states 

to use a portion of the funds made available to the state to establish and fill a position of watershed forester to lead state-wide programs; authorizes $20 million to be appropriated for each fiscal 

year through 2006; and requires funding to be allocated in such a 

manner that 75% is going to the cost-share portion of the program 

and the remainder for other provisions within the section. (Sec. 

812) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(50) General Provisions 

The Senate amendment amends section 13 of the Cooperative 

Forestry Assistance Act to enable the Secretary to make grants and 

enter into contracts, agreements or other arrangements to carry 

out the Cooperative Forestry Assistance Act. (Sec. 814) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(51) State Forest Stewardship Coordinating Committees 

The Senate amendment amends section 19(b) of the Cooperative Forestry Assistance Act by adding the U.S. Fish and Wildlife 

Service as a member of the State Forest Stewardship Coordinating 

Committees. 

642

The Senate amendment also directs the Committees to submit 

to the Secretary, and House and Senate Agriculture Committees an 

annual report of the list of members on the Committee, and an explanation of why certain groups may not be represented. (Sec. 815) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(52) Forest Legacy Program 

The Senate amendment amends section 7(l) of the Cooperative 

Forestry Management Act to allow a state to authorize any local 

government or qualified organization to acquire land or conservation easements to carry out the Forest Legacy Program in that 

state. (Sec. 807) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(53) Chesapeake Bay Watershed Forestry Program 

The Senate amendment amends the Cooperative Forestry Assistance Act of 1978 by adding a new section 9A: 

The Senate amendment lists definitions for: (1) agreement, (2) 

Bay-Area state, (3) Chesapeake Bay Executive Council, (4) director, 

(5) eligible entity, (6) eligible project, (7) program, and (8) Secretary. 

The Senate amendment directs the Secretary to establish a 

Chesapeake Bay Watershed Forestry Program to provide technical 

and financial assistance to carry out eligible projects; and directs 

the Secretary to designate a Forest Service employee to serve as a 

director for the Chesapeake Bay watershed forestry efforts. 

The Senate amendment allows the Secretary, in coordination 

with the director, to provide grants to assist eligible entities in carrying out eligible projects; and limits the federal share of the costshare assistance to 75%. 

The Senate amendment requires the director, in cooperation 

with the Council, to conduct a study to: (1) assess the extent and 

location of forest loss and fragmentation, (2) identify critical forest 

land, (3) prioritize afforestation needs, (4) recommend management 

strategies to expand conservation and stewardship of the forest ecosystem and ways in which the Federal government can work with 

State, county, local, and private entities to conserve critical forests 

including establishing new units of the National Forest System, 

and (5) identify further inventory assessment and research which 

is needed and requires the director to report to Congress not later 

than 2 years after the date of enactment of this legislation. 

The Senate amendment allows the Secretary, in cooperation 

with the director, to establish a cooperative program to provide 

technical and financial assistance to eligible entities to meet the 

needs of the urban population of the watershed in managing forest 

land. 

The Senate amendment authorizes $3 million in appropriations 

for fiscal year 2002 and $3.5 million for each fiscal year in 2003 

through 2006. (Sec. 810) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

643

(54) Suburban and Community Forestry and Open Space Initiative 

The Senate amendment amends the Cooperative Forestry Assistance Act of 1978 by adding a new section 7A: 

The Senate amendment lists definitions for: (1) eligible entity, 

(2) Indian tribe, (3) private forestland, (4) program, and (5) Secretary. 

The Senate amendment establishes a Suburban and Community Forestry and Open Space Initiative within the Forest Service 

to provide assistance to eligible entities to carry out projects and 

activities to conserve private forest land and maintain working forests in suburban environments. 

The Senate Amendment requires the Secretary, in consultation 

with the State foresters, to establish criteria for identifying private 

forest land in each state that may be conserved, and identifying eligible entities; requires the Secretary to then award grants to eligible entities to carry out certain projects or activities; and requires 

the Secretary to give priority to projects that promote the following 

objectives: (1) sustainable forest management, (2) education programs and curricula relating to sustainable forestry, and (3) community involvement in determining the objectives for projects or activities that are funded under this program, and limits grants to 

50% of the cost of a project or activity. 

The Senate amendment allows funds to be used to purchase 

land or easements only from willing sellers at fair market value; 

requires sales at less than fair market value only on certification 

by the landowner that the sale is being entered into willingly and 

without coercion; and allows title to be held, as determined by the 

Secretary, by a State or non-profit organization. 

The Senate amendment authorizes $50 million to be appropriated for fiscal year 2003 and such sums as are necessary for 

each fiscal year thereafter. (Sec. 813) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(55) USDA National Agro Forestry Center 

The Senate amendment amends section 1243 of the Food, Agriculture, Conservation, and Trade Act of 1990 (16 U.S.C. 1642 note; 

Public Law 101–624) by striking the section heading and inserting: 

‘‘USDA National Agro Forestry Center’’. (Sec. 816) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. (Sec. 

819) 

(56) Office of Tribal Relations 

The Senate amendment amends the Cooperative Forestry Assistance Act of 1978 by inserting a new section 19A: 

The Senate amendment defines the following: (1) Indian tribe, 

(2) office, and (3) Secretary. 

The Senate amendment directs the Secretary to establish an 

Office of Tribal Relations within the Forest Service and requires 

the Secretary to appoint a director of such office and to consult 

with interested tribes in making this determination; and requires 

the director to report directly to the Secretary. 

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The Senate amendment requires the director to provide assistance to the Secretary on all issues, policies, actions, and programs 

of the Forest Service that affect Indian tribes and requires the director to submit an annual report on the status of relations between the Forest Service and Indian Tribes to the Secretary. (Sec. 

817) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(57) Assistance to Tribal Governments 

The Senate amendment amends the Cooperative Forestry Assistance Act of 1978 by adding a new section 21: 

The Senate amendment defines an Indian tribe. 

The Senate amendment allows the Secretary to provide financial, technical, educational and related assistance to Indian tribes. 

The Senate amendment directs the Secretary to promulgate 

regulations in consultation with Indian tribes and representatives 

of tribes, to implement the program. 

The Senate amendment directs the Secretary to coordinate 

with the Secretary of the Interior to establish, implement and administer the program. 

The Senate amendment authorizes the appropriation of such 

sums, as are necessary for fiscal year 2002 and each fiscal year 

thereafter. (Sec. 818) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(58) Sudden Oak Death Syndrome 

The Senate amendment directs the Secretary to research, monitor and carry out a treatment program to develop, control, manage, or eradicate Sudden Oak Death Syndrome on public and private land. 

The Senate amendment requires the Secretary to conduct management, regulation, and fire prevention activities to reduce the 

threat of fire and fallen trees killed by Sudden Oak Death Syndrome. 

The Senate amendment requires the Secretary to conduct education and outreach activities to make information available to the 

public on Sudden Oak Death Syndrome. 

The Senate amendment requires the Secretary to establish a 

Sudden Oak Death Syndrome advisory committee to assist the Secretary in carrying out this section. 

The Senate amendment authorizes $14.25 million in appropriations for each of the fiscal years in 2002 through 2006. (Sec. 819) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(59) Independent Investigation of Fire-Fighter Fatalities 

The Senate amendment requires the Inspector General of the 

Department of Agriculture to conduct an independent investigation 

whenever there is a fatality of an officer or employee of the Forest 

Service that occurs due to wildfire entrapment or burn over and requires the IG to submit a report to Congress and the Secretary of 

Agriculture. (Sec. 820) 

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The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

(60) Adaptive Ecosystem Restoration of Arizona and New Mexico 

Forests and Woodlands 

The Senate amendment lists Congressional findings with respect to: (1) degradation of ecological conditions of forests and 

woodlands in Arizona and New Mexico, (2) unnaturally high quantities of biomass, (3) effects of degraded forests and woodlands, (4) 

benefits of healthy forests and woodland ecosystems, (5) importance 

of best available scientific knowledge in developing forest and 

woodland treatments, (6) failure of treatments not based on sound 

science, (7) integration of scientific research and land management 

activities, and (8) translation of scientific knowledge; 

The Senate amendment describes the purposes of this section 

as: (1) improving the ecological health, resource values, and sustainability of forest and woodland ecosystems in Arizona and New 

Mexico, (2) reducing the threat of unnatural wildfire, disease, and 

insect infestations in those states, (3) restoring ecosystem structure 

and function so that ecosystems will support biodiversity; enhance 

watershed values; increase water flow; and increase tree, grass, 

forb, and shrub vigor and growth to provide sustainable economic 

activities, (4) developing the scientific knowledge to inform adaptive ecosystem management restoration treatments that will restore 

long-term ecological health to forests and woodlands in the States, 

and (5) encouraging collaboration among land management agencies, communities, and interest groups in developing, implementing, and monitoring adaptive ecosystem management restoration treatments that are ecologically sound, economically viable, 

and socially responsible; 

The Senate amendment lists definitions for: (1) adaptive ecosystem management, (2) ecological integrity, (3) ecological restoration, (4) institute, (5) land management agency, (6) practitioner, (7) 

Secretaries, and (8) state.

The Senate amendment requires the Secretary of Agriculture, 

in consultation with the Secretary of the Interior, to establish: (1) 

an Ecological Restoration Institute in Flagstaff, Arizona, and (2) an 

institute at a college or university in the State of New Mexico. 

The Senate amendment requires each institute to plan, conduct, or otherwise arrange for applied ecosystem management research that: (1) assists in answering questions identified by land 

managers, practitioners, and others concerned with land management, (2) will be useful in the development and implementation of 

practical, science-based, ecological restoration treatments, (3) translate scientific knowledge into communication tools that are easily 

understood by land managers, natural resource professionals, and 

concerned citizens, and (4) provide similar information to land 

managers and other interested persons. 

The Senate amendment requires each institute to cooperate 

with various entities, including colleges and universities. 

The Senate amendment requires the Secretary, in consultation 

with the Secretary of Interior, to complete a detailed evaluation of 

each institute not later than 5 years after the date of enactment 

of this Act, and every 5 years thereafter. 

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The Senate amendment authorizes $10 million in appropriations for each fiscal year. (Sec. 821) 

The House bill contains no comparable provision. 

The Conference substitute did not adopt this provision. 

TITLE IX—ENERGY

(1) Findings 

The Senate amendment provides Congressional findings with 

respect to the development of agriculturally based renewable energy, the promotion of energy efficiency and biobased products. 

(Section 901) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(2) Consolidated Farm and Rural Development Act 

The Senate amendment amends the Consolidated Farm and 

Rural Development Act by adding a new subtitle on ‘‘Clean Energy’’ and includes definitions for biomass, renewable energy, and 

rural small business. (Section 902) 

The House bill contains no comparable provision. 

The Conference substitute does not amend the Consolidated 

Farm and Rural Development Act, but rather maintains the section 

as individual stand-alone provisions. The substitute adopts the 

Senate definitions with amendments. (Section 9001) 

(3) Federal Procurement of Biobased Products 

The Senate amendment establishes a federal purchasing program for biobased products if they are on a United States Department of Agriculture biobased products list and the biobased products are reasonably comparable in price, performance and availability to non-biobased products. The section also instructs the Secretary to develop a labeling program for biobased products similar 

to the Energy Star program of the Environmental Protection Agency and Department of Energy. The amendment provides $2,000,000 

annually in each of fiscal years 2002–2006. (Section 902) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments. The substitute establishes a new program for the 

purchase of biobased products by Federal agencies, which is modeled on the existing program for purchase of recycled materials 

under section 6002 of the Solid Waste Disposal Act (42 U.S.C. 

6962). The intent of the section is to stimulate the production of 

new biobased products and to energize emerging markets for those 

products. The section also includes a voluntary biobased-labeling 

program. The Conference substitute provides $1,000,000 annually 

for each of fiscal year 2002–2007 for testing biobased products to 

carry out this section. (Section 9002) The Managers encourage the 

Secretary to make the results of such testing available to the public. 

The United States Department of Agriculture, in consultation 

with the Environmental Protection Agency, General Services Administration, and the Department of Commerce, will serve as the 

final arbiter of what is or is not considered a biobased product to 

647

be listed and afforded Federal procurement preference. The Office 

of Federal Procurement Policy will ensure compliance by all Federal agencies, including executive departments, military departments, Government corporations, Government controlled corporations, and other establishments of Federal government. 

The Managers intend that any procurement regulations implementing this section will be promulgated within the existing procurement system through revisions to the Federal Acquisition Regulation by the Civilian Agency Acquisition Council and the Defense 

Acquisition Council and through revisions as necessary to individual agency acquisition regulations by such agencies. 

The Managers encourage the Secretary to carry out the 

biobased product analysis in this section through the Office of Energy Policy and New Uses, which have undertaken economic and 

technical feasibility analysis and have identified numerous examples of biobased products that can be easily substituted for 

nonbiobased products. 

(4) Biorefinery Development Grants 

The Senate amendment establishes a competitive grant program to support the development of biorefineries for the conversion 

of biomass into multiple products such as fuels, chemicals and electricity. The amendment provides $15,000,000 annually in each of 

fiscal years 2002–2006. (Section 902) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments. The section is subject to appropriated funds. (Section 

9003) 

In making selections for competitive awards, the Secretary is 

encouraged to give particular weight to projects that produce multiple products—fuels, chemicals, and in some cases power—and do 

so in a cost effective and environmentally sound manner. 

(5) Biodiesel Fuel Education Program 

The Senate amendment establishes a competitive grant program to educate governmental and private entities with vehicle 

fleets and the public about the benefits of biodiesel fuel use. The 

amendment provides $5,000,000 annually in each of fiscal year 

2003–2006. (Section 902)

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments. The Substitute provides $1,000,000 annually in each 

of fiscal year 2003–2007. (Section 9004) 

The Managers encourage the Secretary to utilize the expertise 

of the Office of Energy Policy and New Uses in carrying out the 

purposes of this section. 

(6) Renewable Energy Development Loan and Grant Program 

The House bill amends Section 310B of the Consolidated Farm 

and Rural Development Act by adding other renewable energy systems including wind energy and anaerobic digesters to the list of 

purposes for which loans and loan guarantees are available. (Section 606) The House bill also contains a provision that provides 

648

value-added grants to entities to develop new marketing and income opportunities for farmers. (Section 602) 

The Senate amendment establishes a competitive grant and 

loan program to assist new cooperatives and business ventures, 

which are at least 51 percent owned by farmers or ranchers, in the 

development of renewable energy projects to produce electricity. 

The amendment provides $16,000,000 annually in each of fiscal 

years 2002–2006. (Section 902) 

The Conference substitute adopts the House provisions with 

amendment. The value-added grant program in the Rural Development title has been expanded to better achieve the purposes of this 

section. This expansion, along with the adoption of House language 

that allows loans for these purposes, should accomplish the goals 

of the Senate’s provision and encourage more farmers and ranchers 

to become involved in the ownership of renewable energy systems. 

(Sections 6401 and 6013) 

(7) Energy Audit and Renewable Energy Development Program 

The Senate amendment establishes a competitive grant program for entities to administer energy audits and renewable energy 

development assessments for farmers, ranchers and rural small 

businesses. The amendment provides $15,000,000 annually in each 

of fiscal years 2002–2006. (Section 902) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments. The section is subject to appropriated funds. (Section 

9005) 

(8) Renewable Energy Systems and Energy Efficiency Improvements 

The House bill authorizes the Secretary to provide to individuals a loan guarantee under Section 4 of the Rural Electrification 

Act to finance the purchase of renewable energy systems, including 

wind energy systems and anaerobic digesters for the purpose of energy generation. (Section 605) 

The Senate amendment establishes a loan, loan guarantee and 

grant program to assist eligible farmers, ranchers and rural small 

businesses in purchasing renewable energy systems and making 

energy efficiency improvements. The amendment provides 

$33,000,000 annually in each of fiscal years 2002–2006. (Section 

902) 

The Conference substitute adopts the Senate provision with 

amendments. The Conference substitute provides $23,000,000 annually in each of fiscal year 2003–2007. (Section 9006) 

The Managers intend for the Secretary to consider funding energy audits an eligible energy efficiency improvement measure 

under this section. 

(9) Hydrogen and Fuel Cell Technologies 

The Senate amendment establishes a competitive grant program to eligible entities to demonstrate the use of hydrogen and 

fuel cell technologies in farm and rural applications. The amendment provides $5,000,000 in each of fiscal years 2002–2006. (Section 902) 

The House bill contains no comparable provision. 

649

The Conference substitute deletes the Senate provision and replaces it with language directing the Secretaries of Agriculture and 

Energy to enter into a memorandum of understanding regarding 

hydrogen and fuel cell technology applications for agricultural producers and rural communities. The memorandum of understanding 

also requires the Secretary of Agriculture to disseminate information relating to hydrogen and fuel cell technologies to rural communities and agricultural producers. (Section 9007) 

The Managers encourage the Secretary to utilize the expertise 

of the Office of Energy Policy and New Uses in carrying out this 

section. 

(10) Technical Assistance for Farmers and Ranchers to Develop Renewable Energy Resources 

The House bill expands the purpose of the Environmental 

Quality Incentives Program to include assistance to farmers and 

ranchers for the assessment and development of their on-farm renewable resources, including biomass for production of power and 

fuel, wind and solar. (Section 942a) 

The House bill also provides that the Secretary of Agriculture, 

through the Cooperative State Research, Education, and Extension 

Service and, to the extent practicable, in collaboration with the 

Natural Resources Conservation Service, regional biomass programs under the Department of Energy, and other appropriate entities, may provide education and technical assistance to farmers 

and ranchers for the development and marketing of renewable energy resources, including biomass for the production of power and 

fuels, wind, solar, and geothermal. (Section 942b) 

The Senate amendment provides that the Secretary, acting 

through the Cooperative State Research, Education, and Extension 

Service in consultation with the Natural Resources Conservation 

Service, regional biomass programs under the Department of Energy, and other entities as appropriate, may provide for education 

and technical assistance to farmers and ranchers for the development and marketing of renewable energy resources. The Secretary 

may retain up to 4 percent to pay administrative expenses incurred 

in carrying out this section. (Section 902) 

The Conference substitute deletes both the House and Senate 

provisions. 

The Managers encourage the Cooperative State Research, Education, and Extension Service to provide education and technical 

assistance to agricultural producers for the development of renewable energy resources. Such assistance should enable producers to 

become more energy efficient and provide for the development and 

marketing of renewable energy resources. In assisting producers, 

the Cooperative Extension Service may consult with other entities 

as appropriate. 

(11) Biomass Research and Development

The House bill extends the Biomass Research and Development Initiative through 2011. (Section 736) 

The Senate amendment extends the Act’s termination date to 

September 30, 2006. The amendment provides $15,000,000 in each 

of fiscal years 2002–2006. (Section 903) 

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The Conference substitute adopts the Senate provision with amendments. The substitute provides $5,000,000 for fiscal year 

2002, and $14,000,000 annually for each of fiscal year 2003–2007. 

(Section 9008) 

(12) Cooperative Research and Extension Projects 

The Senate amendment establishes a carbon sequestration research and development program to promote understanding of the 

net sequestration of carbon in soil and net emissions of other 

greenhouse gases from agriculture. The amendment requires that, 

within three years, the Secretary convene a conference of key scientific experts on carbon sequestration from various sectors to establish benchmark standards for measuring soil carbon content and 

net emissions of other greenhouse gases, designate measurement 

techniques and modeling approaches to achieve such standards, 

and evaluate results of analyses on baseline, permanence and leakage issues. The section authorizes appropriations of $25,000,000 

annually. (Section 902) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments that incorporate this section into Section 221 of the 

Agricultural Risk Protection Act of 2000 (114 Stat. 407)—Carbon 

Cycle Research. (Section 9009) The substitute also reauthorizes 

Section 221 of the Agriculture Risk Protection Act of 2002 (114 

Stat. 407)—Carbon Cycle Research through fiscal year 2007. (Section 7223) 

The Managers encourage the Secretary to convene a conference 

of key scientific experts on carbon to evaluate tools and procedures 

for measuring the carbon content of soils and plants (including 

trees) and net emissions of other greenhouse gases from agriculture, and identify techniques and modeling approaches for measuring carbon content associated with several different levels of precision. Conference participants should include grant or cooperative 

agreement recipients under federal carbon cycle research programs, 

other experts on carbon sequestration from academia and the private sector, and government scientists in the area of carbon sequestration, from the Department of Agriculture and other federal 

agencies with programs in carbon cycle research. The Secretary is 

encouraged to provide information to the public regarding any such 

conference proceedings. 

The Managers encourage the Secretary to establish demonstration projects that assist agricultural producers and farmer-owned 

cooperatives in paying the costs associated with the testing of 

methods developed under this section (including costs incurred in 

employing certified independent third persons to carry out those 

activities). In the view of the Managers, such demonstration 

projects may provide valuable data in testing the methods by which 

farmers measure their storage of carbon and reduce net emissions 

of greenhouse gases. 

(13) Demonstration Projects and Outreach 

The Senate amendment establishes carbon sequestration monitoring programs; demonstration projects of methods for measuring, 

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house gas emissions; and periodic outreach to farmers and ranchers 

regarding the connection between global climate change mitigation 

strategies and agriculture. The section authorizes appropriations of 

$10,000,000 annually. (Section 902) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. Some 

of the goals of this section have been incorporated into Section 

9009. 

(14) Rural Electrification Act of 1936 

The House bill amends Section 310B of the Consolidated Farm 

and Rural Development Act to specifically include wind energy systems and anaerobic digesters in the list of purposes for which loans 

and loan guarantees are available. (Section 606) 

The Senate amendment amends the Rural Electrification Act 

of 1936 by adding Section 21 at the end which establishes a grant 

and loan program to assist rural electric cooperatives and other 

rural electric utilities in developing renewable energy to serve the 

needs of rural communities or for rural economic development. 

Grants may be used to help pay for renewable energy project feasibility studies and technical assistance. Loans are available for 

other costs associated with a project. The amendment provides 

$9,000,000 in each of fiscal years 2002–2006. (Section 904) 

The Conference substitute adopts the House provision. (Section 

6013) 

The Managers encourage the Secretary to use existing authorities to provide loans, loan guarantees and grants to rural electric 

cooperatives and other electric utilities to promote the development 

of economically and environmentally sustainable renewable energy 

projects to serve the needs of rural communities or to promote 

rural economic development. 

(15) Carbon Sequestration Demonstration Program 

The Senate amendment establishes a competitive research and 

development program to test the methodologies by which private 

parties may pay farmers and foresters a market-based fee to store 

carbon and to otherwise reduce net emissions of greenhouse gases. 

Under this program, the Department of Agriculture would share in 

the costs of monitoring, verifying and auditing such trades on a 

demonstration basis and would also make grants to researchers to 

establish the best methodologies for measuring additional carbon 

sequestration in soils and plants. The section authorizes appropriations of $20,000,000 annually. (Section 905) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. Some 

of the goals of this section are incorporated into Section 9009. 

(16) Sense of Congress Concerning National Renewable Fuels 

Standard 

The Senate amendment expresses the sense of Congress that 

a national renewable fuels program should be adopted and that the 

Department of Agriculture should ensure that its policies and programs promote the production of fuels from renewable fuel sources. 

(Section 906) 

652

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(17) Continuation of the Bioenergy Program

The House bill requires the Secretary to include animal fats, 

agricultural by-products, and oils as eligible commodities under the 

existing Bioenergy Program (7 CFR 1424). (Section 922) 

The Senate amendment expresses the sense of Congress that 

biofuel production capacity will be needed to phase out methyl tertiary butyl ether in gasoline, and because of the dependence of the 

United States on foreign oil, the bioenergy program of the Department of Agriculture should be continued and expanded. (Section 

907) 

The Conference substitute deletes both provisions, and instead 

authorizes the continuation of the Commodity Credit Corporation 

Bioenergy Program and includes animal byproducts and fat, oils 

and greases (including recycled fats, oils and greases) as eligible 

commodities. The conference substitute provides a total of $204 

million to fund this program during fiscal years 2003–2006. (Section 9010) 

The Managers encourage the Secretary to investigate the feasibility of utilizing wheat that has been infested with karnal bunt 

spores, and for which a market is not readily available, in the operation of the Commodity Credit Corporation Bioenergy Program. 

General Intent—Title IX. The Managers intend for all reports 

to Congress required under Title IX to be transmitted to the Senate 

Committee on Agriculture, Nutrition and Forestry; the House Committee on Agriculture; the House Committee on Energy and Commerce and the House Committee on Science. 

The Managers intend for the Secretary to identify and incorporate the mission of Title IX and the strategy for implementation 

as part of the reporting required by the Government Performance 

and Results Act. 

TITLE X—MISCELLANEOUS PROVISIONS

SUBTITLE A—TREE ASSISTANCE PROGRAM

(1) Eligibility 

The House bill requires the Secretary of Agriculture to provide 

assistance to eligible orchardists that planted trees for commercial 

purposes but lost such trees as a result of a natural disaster. Orchardists qualify for assistance only if tree mortality exceeds 15%. 

(Section 901) 

The Senate amendment amends Sec. 194 of the Federal Agriculture Improvement Act of 1996 as follows: Sec. 194(b) requires 

the Secretary of Agriculture to provide assistance to eligible orchardists that planted trees for commercial purposes but lost such 

trees as a result of a natural disaster. Orchardists qualify for assistance only if tree mortality exceeds 15%. (Sec. 1062) 

The Conference substitute adopts the House provision. (Sec. 

10202) 

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(2) Assistance 

The House bill amends the Tree Assistance Program authorized by the Disaster Assistance Act of 1988 to establish a reimbursement of either 75% of the cost of replanting eligible trees lost 

or, at the discretion of the Secretary, sufficient seedlings to reestablish the stand. (Sec. 902) 

The Senate amendment amends Sec. 194(c)(1) consists of either reimbursement of 75% of the cost of replanting eligible trees 

lost or, at the discretion of the Secretary, sufficient seedlings to reestablish the stand. (Sec. 1062) 

The Conference substitute adopts the House provision. (Sec. 

10203) 

(3) Limitation on Assistance 

The House bill establishes that a limit on payments per person may not exceed $50,000 or an equivalent value in tree seedlings; 

requires the Secretary to issue regulations defining a person; and 

requires the Secretary to issue regulations prescribing rules to ensure a fair and reasonable application of the limitation established 

under this section. (Sec. 903) 

The Senate amendment amends Sec. 194(c)(2) by setting pay- ment limitations per person to not exceed $100,000 or an equivalent value in tree seedlings; requires the Secretary to issue regulations defining a person; and requires the Secretary to issue regulations prescribing rules to ensure a fair and reasonable application 

of the limitation established under this section. (Sec. 1062) 

The Conference substitute adopts the House provision with an 

amendment that a payment limitation per person may not exceed 

$75,000 or an equivalent in tree seedlings. (Sec. 10204) 

(4) Definitions 

The House bill defines eligible orchardist, natural disaster and 

tree. (Sec. 904) 

The Senate amendment defines Sec. 194 (a) eligible orchardist, 

natural disaster, tree and Secretary. These definitions are very 

similar to the House bill, with one exception as follow: there is no 

requirement that an eligible orchardist owns 500 acres or less of 

such trees. (Sec. 1062) 

The Conference substitute adopts the House provision with 

amendments that the total quantity of acres for which a person 

shall be entitled to receive payments under this chapter may not 

exceed 500 acres and adds ‘‘lightning’’ to the definition of natural 

disaster. (Sec. 10201) 

The Senate amendment makes the Tree Assistance Program 

an authorization subject to appropriations. 

The Conference substitute adopts the Senate amendment’s authorization of Appropriations. (Sec. 10205) 

The Managers acknowledge that assistance was provided to 

producers to compensate for losses of trees from which a crop is 

harvested under the Agriculture, Rural Development, Food and 

Drug Administration, and Related Agencies Appropriations Act of 

2000, for losses suffered in 1999, but not since that time. Establishment of legislative authority for the Tree Assistance Program does 

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654

half of tree crop producers who suffered similar losses between 

January 2000 and the date of enactment of this Act. 

SUBTITLE B—OTHER MATTERS

(5) Hazardous Fuels Reduction Grants to Prevent Wildfire Disasters 

and Transform Hazardous Fuels to Electric Energy, Useful 

Heat or Transportation Fuels

The House bill (1) provides the findings of the Congress on 

hazardous fuel reduction grants; (2) authorizes the Secretary concerned to make a grant to a person that operates a biomass-to-energy facility to offset the costs incurred to purchase hazardous fuels 

from forestlands. (3) establishes the grants shall be equal to $5 per 

ton but not to exceed $10 per ton of hazardous fuels based on distance from source to facility; (4) establishes as a condition of receiving a grant under this section, the owner of the facility is required 

to keep records as required by the Secretary, and to award the Secretary or their designee access to the facility to examine inventory 

and records of the facility; (5) authorizes the Secretary concerned 

to monitor Federal lands from which hazardous fuels are removed 

and sold to a biomass-to-energy facility to determine and document 

the reduction in fire hazards on such lands; defines biomass-to-energy facility, forest biomass, hazardous fuels, and Secretary concerned; authorizes $50 million for each FY for the duration of the 

bill. (Sec. 921) 

The Senate amendment (1) provides findings similar to House 

version findings under Hazardous Fuels Reduction Grants; (2) defines ‘‘eligible community’’ as any town, township, municipality, or 

other similar unit of local government or any area represented by 

a nonprofit to promote broad-based economic development, and has 

a population of not more than 10,000, and is located within a county with 15% of total labor and income is derived from forestry and 

is located near forest land the Secretary determines poses a potential hazard, the ‘‘hazardous fuels’’ definition is different from the 

House version, only in that it specifies the land must be in an 

wildland-urban interface area or in an area located near an eligible 

community, Indian tribe, Secretary, and others; (3) authorizes the 

Secretary concerned to make a grant to a person that operates a 

biomass-to-energy facility to offset the costs incurred to purchase 

hazardous fuels from forestlands. The Secretary shall select recipients based on planned purchases of hazardous fuels and the anticipated associated wildfire risk reduction; (4) establishes the grant 

amounts shall be equal to $5 per ton but not to exceed $10 per ton 

of hazardous fuels based on distance from source to facility; OR 

based on the distance from source to facility and the cost of removal of fuels; (5) establishes a grant shall not exceed $1.5 million 

for any facility for any year with the exception of a small facility 

with an annual production of 5 megawatts or less; provides the 

monitoring of grants is very similar to House version, but with a 

little more detail; (6) authorizes the Secretary concerned shall monitor Federal lands from which hazardous fuels are removed and 

sold to a biomass-to-energy facility to determine and document the 

reduction in fire hazards on such lands; (7) authorizes $50 million 

for each FY for the duration of the bill. (Sec. 809) 

655

The Conference substitute deletes both the House and Senate 

provisions. 

(6) Bioenergy Program 

The House bill requires the Secretary to include animal fats, 

agricultural by-products, and oils as eligible commodities under the 

existing Bioenergy Program (7 CFR 1424). (Sec. 922) 

The Senate amendment establishes the Sense of Congress that 

Ethanol and Biodiesel production capacity will be needed to phase 

out MTBE and U.S. dependence on foreign oil and that the Bioenergy Program (7 CFR 1424) should be continued and expanded. 

(Sec. 907) 

The Conference substitute deletes both provisions, and instead 

authorizes the continuation of the Commodity Credit Corporation 

Bioenergy Program and includes animal byproducts and fat, oils 

and greases (including recycled fats, oils and greases) as eligible 

commodities. The conference substitute provides a total of $204 

million to fund this program during fiscal years 2003–2006. (Section 9010) 

(7) Availability of Section 32 Funds 

The House bill amends the second undesignated paragraph of 

section 32 of 7 U.S.C. 612c by striking $300,000,000 and inserting 

$500,000,000. (Sec. 923) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Sec. 

10602) 

(8) Seniors Farmers Market Nutrition Program 

The House bill allows the Secretary to use $15,000,000 of CCC 

funds for each of fiscal years 2002 through 2011 to carry out and 

expand a seniors farmers’ market nutrition program. Further explains purposes of program. (Sec. 924) 

The Senate amendment requires the Secretary of the Treasury 

to transfer $15,000,000 30 days after enactment and each fiscal 

year 2003 through 2006 to the Secretary of Agriculture to carry out 

and expand a seniors farmers’ market nutrition program. Further 

explains purposes of program. (Sec. 459) 

The Conference substitute adopts the House provision with an 

amendment to provide $5 million in 2002, $15 million per year 

thereafter 2003 through 2007 (The program already received $10 

million for FY2002 in the Agriculture, Rural Development, Food 

and Drug Administration, and Related Agencies Appropriations 

Act, 2002.). (Sec. 4402) 

(9) Federal Marketing Order for Cane Berries 

The House bill requires the Secretary to issue a Federal marketing order for producers and processors of cane berries grown in 

the United States. (Section 925) 

The Senate amendment provides marketing orders for producers of cane berries. (Sec. 161) 

The Conference substitute adopts the Senate provision. (Sec. 

10601) 

656

A Federal Marketing Order for cane berries will allow producers to promote orderly marketing through collectively influencing the supply, demand or price and to pool resources to finance 

research and promotion. Producers need this tool to address low 

prices due, in part, to overproduction. 

(10) National Appeals Division 

The House bill provides that if an appellant prevails at the regional level in an administrative appeal of a decision by the National Appeals Division, the Agency may not pursue an administrative appeal of that decision to the national level. (Sec. 926) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(11) Outreach and Assistance for Socially Disadvantaged Farmers 

and Ranchers

The House bill amends the outreach program for socially disadvantaged farmers and ranchers contained in Sec. 2501 of the 

Food, Agriculture, Conservation and Trade Act of 1990 by increasing the authorization of appropriations from $10 million in each fiscal year to $25 million and further explains assistance and eligibility. (Sec. 927) 

The Senate amendment is similar except that subsection 

(a)(5)(B) allows for interagency funding and subsection (b) adds 

‘‘gender’’ to the definition of ‘‘Socially Disadvantaged Group’’. (Sec. 

1054) 

The Conference substitute adopts the Senate language with an 

amendment to strike the reference to ‘‘gender,’’ and maintain eligibility for certain institutions. (Sec. 10707) 

(12) Reference to Sea Grass and Sea Oats as Crops Covered by Noninsured Crop Disaster Assistance Program 

The House Bill amends Section 196(a)(2)(B) of the Federal Agriculture Improvement and Reform Act of 1996 to include sea oats 

and sea grass as crops covered by Noninsured Crop Disaster Assistance Program. (Section 929) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Sec. 

10101) 

(13) Operation of Graduate School of Department of Agriculture 

The House bill requires that contracts entered into between 

the USDA Graduate School and Federal agencies for educational, 

training, and professional development activities must be open to 

competitive bidding with the private sector. (Sec. 930) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with an 

amendment striking section 1669 of the Food, Agriculture, Conservation, and Trade Act of 1990, adding an audit authority to section 921 of the Federal Agriculture Improvement Reform Act of 

1996, and delaying the effective date of the amendment to October 

1, 2002. (Sec. 10705) 

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(14) Assistance for Livestock Producers 

The House bill authorizes, subject to appropriations, assistance 

for livestock and dairy producers who have suffered economic 

losses. (Sec. 931) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Sec. 

10104) 

(15) Compliance With Buy American Act 

The House bill prevents the use of funds, under the Act, from 

being used by any producer, person, or entity that does not agree 

to comply with the Buy American Act in the expenditure of such 

funds; expressed the Sense of Congress that producers and other 

recipients of funds should, in expending the funds, purchase only 

American-made equipment, products, and services; and the directs 

Secretary to provide to each recipient of funds a notice describing 

these requirements. (Sec. 932) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(16) Report Regarding Genetically Engineered Foods 

The House bill instructs the Secretary, through the National 

Academy of Sciences to complete and transmit a report to Congress 

including the data and test needed to assess human health risk 

from consumption of genetically engineered foods; the types of monitoring systems that should be created for future assessment; and 

a federal regulatory structure to approve such foods as safe for 

human consumption. (Sec. 933) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(17) Market Name for Pangasius Fish Species 

The House bill clarifies that the term catfish may not be considered a common or usual name for the fish Pangasius bocourti, 

or any other fish not classified within the family Ictalariidae, including the importation of such fish pursuant to section 801 of the 

Federal Food, Drug and Cosmetic Act. (Section 934) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision with 

amendment to clarify labeling restrictions of catfish pursuant to 

the Federal Food, Drug and Cosmetic Act. (Sec. 10806) 

(18) Program of Public Education Regarding Use of Biotechnology 

in Producing Food for Human Consumption 

The House bill instructs the Secretary to develop and implement a program to communicate with the public regarding the use 

of biotechnology in producing food for human consumption, including science-based evidence of the safety of such foods and the 

human outcomes of biotechnology used to produce food for human 

consumption. (Sec. 935) 

The Senate amendment contains no comparable provision. 

The Conference substitute adopts the House provision. (Sec. 

10802) 

658

(19) GAO Study 

The House bill instructs the Comptroller General to conduct a 

study and make findings and recommendations with respect to determining how producer income would be affected by updating yield 

bases. The comptroller shall submit a report to Congress not later 

than 6 months after the date of enactment. (Sec. 936) 

The Senate amendment contained no comparable provision. 

The Conference substitute adopts the House provision. (Sec. 

10903) 

(20) Interagency Task Force on Agricultural Competition 

The House Bill instructs the Secretary to, within 90 days of enactment, establish an Interagency Task Force on Agricultural Competition, consisting of 9 employees of the Department of Agriculture 

and the Department of Justice. The task force shall conduct hearings to review the lessening of competition among purchases of 

livestock, poultry, and unprocessed agricultural commodities. The 

task force shall submit a report to the committee of Agriculture in 

both the House and the Senate within 1 year after the last member 

of the task force is appointed. (Sec. 937) 

The Senate amendment contains no comparable provision.

The Conference substitute deletes the House provision. 

(21) Authorization for Additional Staff and Funding for the Grain 

Inspection, Packers, and Stockyards Administration 

The House bill authorizes to be appropriated such sums as are 

necessary to enhance the capability of GIPSA to monitor, investigate, and pursue the competitive implications of structural 

changes in the meat packing industry. Sums are specifically earmarked to hire litigating attorneys to allow GIPSA to more comprehensively and effectively pursue its enforcement activities. (Sec. 

938) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(22) Enforcement of the Humane Methods of Slaughter Act of 1958

The House bill (1) added the following findings: 

Public demand for passage of P.L. 85–765; 

The Humane Method of Slaughter Act of 1958 requires 

that animals be rendered insensible to pain when they are 

slaughtered; 

Scientific evidence indicates that treating animals humanely result in tangible economic benefits; 

The United States Animal Health Association passed a 

resolution to encourage strong enforcement of the Act; 

The Secretary of Agriculture is responsible for enforcing 

the Act, including monitoring and compliance; 

(2) expressed the Sense of Congress that the Secretary should 

fully enforce P.L. 85–765 by ensuring humane methods in the 

slaughter of livestock; and (3) determined it is the policy of the 

U.S. that the slaughter of livestock and handling of livestock in 

connection with slaughter shall be carried out only by humane 

methods, as proved by P.L. 85–765. (Sec. 939) 

659

The Senate amendment provided for the same general intent 

as the House provision, but with drafting differences. (Sec. 1067) 

The Conference substitute adopts the House provision with an 

amendment eliminating Congressional findings. In Sec. 1067(1)(A) 

‘‘resume’’ is changed to ‘‘continue’’ with regard to the reporting requirement. The Managers expect the Department to include a report on violations of this Act in its annual report to Congress. (Sec. 

10305) 

(23) Penalties and Foreign Commerce Provisions of the Animal Welfare Act 

The House bill increased the penalties provided by current law, by raising the maximum penalty for violation from $5,000 to 

$15,000 and raising the maximum imprisonment for violation from 

1 year to 2 years and also closes the ‘‘foreign commerce loophole’’ by prohibiting transportation of animals for fighting purposes from 

any state into any foreign country effective 30 days after enactment. (Sec. 940) 

The Senate amendment is identical to the House provision. 

(Sec. 1052) 

The Conference substitute also provides an amendment to 

eliminate the increase in maximum prison terms found in the 

House and Senate provision. (Sec. 10303) 

(24) Prohibition on Interstate Movement of Animals for Animal 

Fighting 

The House bill amends Sec. 26(d) of the Animal Welfare Act 

to prohibit the interstate shipment of birds for fighting purposes. 

(Sec. 941) 

The Senate amendment is identical to the House provision. 

(Sec. 1053) 

The Conference substitute made technical changes to make it 

illegal ship a bird in interstate commerce for the purpose of engaging in a animal fight and further, makes it illegal to fight a bird 

in a fight in which any bird in the fight was transported illegally. 

(Sec. 10302) 

(25) Renewable Energy Resources 

The House bill expands the purpose of the Environmental 

Quality Incentives Program to include assistance to farmer and 

ranchers for the assessment and development of their on-farm renewable resources, including biomass for production of power and 

fuel, wind and solar. (Section 942a) 

The House bill also provides that the Secretary of Agriculture, 

through the Cooperative State Research, Education, and Extension 

Service and, to the extent practicable, in collaboration with the 

Natural Resources Conservation Service, regional biomass programs under the Department of Energy, and other appropriate entities, may provide education and technical assistance to farmers 

and ranchers for the development and marketing of renewable energy resources, including biomass for the production of power and 

fuels, wind, solar, and geothermal. (Section 942b) 

The Senate amendment provides that the Secretary, acting 

through the Cooperative State Research, Education, and Extension 

660

Service in consultation with the Natural Resources Conservation 

Service, regional biomass programs under the Department of Energy, and other entities as appropriate, may provide for education 

and technical assistance to farmers and ranchers for the development and marketing of renewable energy resources. The Secretary 

may retain up to 4 percent to pay administrative expenses incurred 

in carrying out this section. (Section 902) 

The Conference substitute deletes both the House and Senate 

provisions. 

The Managers encourage the Cooperative State Research, Education, and Extension Service to provide education and technical 

assistance to agricultural producers for the development of renewable energy resources. Such assistance should enable producers to 

become more energy efficient and provide for the development and 

marketing of renewable energy resources. In assisting producers, 

the Cooperative Extension Service may consult with other entities 

as appropriate. 

(26) Use of Amounts Provided for Fixed, Decoupled Payments to 

Provide Necessary Funds for Rural Development Programs 

The House bill reduces the total amount payable under Sec. 

104 (Fixed Decoupled Payments) of the Act on a pro rata basis, so 

that the total amount of such reductions equals $100,000,000, fiscal 

years 2002–2001. 

The House bill expends such sums as follows: 

(A) $45,000,000 for grants under 306A of the Consolidated 

Farm and Rural Development Act (relating to the community water 

assistance grant program); (B) $45,000,000 for grants under 613 of this Act (relating to 

the pilot program for development and implementation of strategic 

regional development plans); and (C) $10,000,000 for grants under 

section 231(a)(1) of the Agricultural Risk Protection Act of 2000 (relating to value-added agricultural product market development 

grants). (Section 943) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

(27) Country of Origin Labeling of Perishable Agricultural Commodities 

The House bill amends the Perishable Agricultural Commodities Act, 7 U.S.C. 499a, to mandate country of origin labeling on 

all perishable agriculture commodities, including both imported 

and domestically produced commodities by adding the following 

sections: 

Sec. 18(a) A retailer of a perishable agricultural commodity 

shall inform consumers, at the final point of sale of the perishable 

agricultural commodity to consumers, of the country of origin of the 

perishable agricultural commodity. This applies to both imported 

and domestically produced commodities. 

Sec. 18(b) Provides an exemption for the labeling requirements 

for perishable agricultural commodities that are prepared in a food 

establishment, sold or offered for sale at the food service establishment in normal retail quantities and served to consumers at the 

food service establishment. 

661

Sec 18(c) The information regarding the country of origin may 

be provided to consumers via a label, stamp, mark, placard, or 

other clear and visible sign on the perishable agricultural commodity or on the package, display, holding unit, or bin containing 

the commodity at the final point of sale to consumers. A retailer 

is not required to provide any additional information on a commodity that has already been individually labeled with the country 

of origin by the packer, importer, or other individual. 

USDA may assess Sec. 18(d) Civil penalties ($1,000 for the 

first day the violation occurs; $250 for each day the violation continues) against any retailer who fails to indicate the country of origin. 

Sec. 18(e) Amounts collected under subsection (d) shall be deposited in the Treasury. 

The House bill states the provision would take effect six 

months following enactment. (Section 944) 

The Senate amendment amends the Agricultural Marketing 

Act of 1946 (7 U.S.C. 1621 et seq.). Sec. 281 & Sec. 282(a)(1) requires labeling for muscle cuts and ground beef, lamb and pork as 

well as farm-raised fish and shellfish (including steaks, nuggets 

and any other flesh from farm raised fish and shellfish) and 

produce as defined in the Perishable Agricultural Commodities Act. 

Sec. 282(a)(2) Only those products that are exclusively born, 

raised and slaughtered, hatched, raised, harvested, and processed 

and produced in the U.S. may be designated as U.S. country of origin. 

Sec 282(b) Subsection (a) shall not apply if the covered commodity is prepared or served in a food service establishment and 

offered for sale or sold at the food service establishment in normal 

retail quantities or served to consumers at the food service establishment. 

Sec. 282(c) The information regarding the country of origin 

may be provided to consumers via a label, stamp, mark, placard, 

or other clear and visible sign on the perishable agricultural commodity or on the package, display, holding unit, or bin containing 

the commodity at the final point of sale to consumers. 

Sec. 282(d) Those who prepare, store, handle or distribute a 

covered commodity shall maintain a verifiable record keeping an 

audit trail. 

Sec. 282(e) Any person engaged in the business of supplying a 

covered commodity to a retailer shall provide information to the retailer indicating the country of origin of the covered commodity. 

Sec. 282(f) The Secretary shall not establish a mandatory identification system to verify the country of origin of a covered commodity. Model certification programs the Secretary can use for 

verification purposes include the carcass grading system, voluntary 

country of origin beef labeling system, and those systems used to 

carry out market access program under the Agricultural Trade Act 

and the National School Lunch Act. 

Sec. 283 The Secretary of USDA will notify a retailer if a violation is found, give the retailer 30 days to cure, provide notice and 

an opportunity for a hearing and may fine the retailer in an 

amount determined by the Secretary. 

662

Sec. 284 The Secretary may promulgate regulations and may 

enter into partnerships with individual states for enforcement purposes. 

Sec. 285 Takes effect 180 days following enactment. (Sec. 1001) 

The Conference substitute adopts the Senate language with an 

amendment to provide for the implementation of two-years of voluntary guidelines to precede mandatory labeling. The exclusion 

from a covered commodity has been further defined to include 

items that are an ingredient in a processed food item. The Conference substitute provides that animals trans-shipped from Alaska 

or Hawaii through Canada shall be eligible to be designated as 

‘‘U.S. Country of Origin’’ as long as the period of trans-shipment 

does not exceed 60 days. (Sec. 10506) 

(28) Unlawful Stockyard Practices Involving Nonambulatory Livestock 

The House bill amends Title III of the Packers and Stockyards 

Act, 1921 by adding following on Sec. 318: 

Sec. 318(a) defines the terms: humanely euthanize and nonambulatory livestock. 

Sec. 318(b)(1) It shall be unlawful for any stockyard owner, 

market agency, or dealer to buy, sell, give, receive, transfer, market, hold, or drag any nonambulatory livestock unless the nonambulatory livestock has been humanely euthanized. 

Sec. 318(b)(2) provides exceptions. 

Sec. 318 (c) stipulates that the application of this prohibition 

is to commence one year after enactment of the Farm Security Act 

of 2001. The Secretary shall promulgate regulations to carry out 

this section. (Sec. 945) 

The Senate amendment is a substantively identical provision 

with the following difference: Sec. 318(c) stipulates that the application of this prohibition is to commence one year after enactment 

of the Agriculture, Conservation, and Rural Enhancement Act of 

2002. (Sec. 1045) 

The Conference substitute adopts the House provision with an 

amendment to require the Secretary to investigate the problem of 

nonambulatory livestock and report the findings to Congress. 

Based on the findings of the report the Secretary shall promulgate 

regulations if the Secretary deems them necessary to regulate the 

humane treatment, handling and disposition of nonambulatory 

livestock. The Conference substitute provides for investigative and 

penalty authority consistent with the Animal Health Protection 

Act. (Sec. 10502) 

(29) Annual Report on Imports of Beef and Pork 

The House bill requires the Secretary of Agriculture to submit 

to Congress an annual report on the amount of beef and pork that 

is imported into the U.S. each calendar year. (Sec. 946) 

The Senate amendment contains no comparable provision. 

The Conference substitute deletes the House provision. 

663

(30) Quality Grade Labeling of Imported Meat and Meat Food Products 

The Senate amendment amends the Agricultural Marketing 

Act of 1946 (7 U.S.C. 1621 et seq.): 

Sec. 291 defines the Secretary; 

Sec. 292 prevents an imported carcass, part thereof, meat, or 

meat food product (as defined by the Secretary) from bearing a 

quality grade label issued by the Secretary; 

Sec. 293 Secretary to promulgate regulations. (Sec. 1002) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(31) Continuous Coverage 

The Senate amendment amends Section 508(e)(4) of the Federal Crop Insurance Act to impose a permanent prohibition on the 

availability of continuous coverage. (Sec. 1012) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

10002) 

(32) Quality Loss Adjustment Procedures 

The Senate amendment amends Sec. 508(m) of the Federal 

Crop Insurance Act to require the Federal Crop Insurance Corporation to implement quality loss adjustment procedure review recommendations effective for the 2003 reinsurance year. (Sec. 1013) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to implement recommendations effective for the 2004 

reinsurance year and provides additional language to require the 

Secretary, for purposes of quality loss adjustment under the Federal crop insurance program, to allow certain classifications of 

warehouse operators to make adjustments for quality. Should the 

Secretary find that this provision causes fraud and abuse of the 

Federal crop insurance program by warehouse operators, the Managers intend for the Secretary to take appropriate measures 

against those operators to alleviate the problem. (Sec. 10003) 

It is the intent of the Managers that quality loss adjustments 

reflect market discounts in the year of adjustment. The term ‘‘local’’

outlined in Section 508(m) of the Federal Crop Insurance Act may 

include discounts determined based on regional surveys. 

(33) Conservation Requirements 

The Senate Amendment amends Section 1211(1) and Section 

1221(b) of the Food Security Act of 1985 and Section 519(b) of the 

Controlled Substances Act to prohibit the issuance of an indemnity 

payment under the Federal Crop Insurance Act to a producer who 

has planted on highly erodible land, converted wetland, or has produced a controlled substance (Sec. 1014). 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

664

(34) Animal Health Protection 

The Senate amendment provides for the consolidation and updating of existing animal health authorities at USDA. (Sec. 1021 

to Sec. 1038) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with 

amendments (1) regarding the definition of disease 

(S1023.CR10403) (2) requires notification to the Secretary of Treasury as well as public notification regarding development of rules on 

restrictions of imports (S1024. CR10404) (3) directs the Secretary 

of Agriculture to consult with State animal health officials and veterinary health professionals regarding the establishment of the veterinary accreditation program, gives guidelines for suspension or 

revocation of accreditation of any veterinarian accredited under 

this subtitle that violates this subtitle, and clarifies that the criminal and civil penalties in section 1034 shall not apply to violations 

of this section that are not violations of any other provision of this 

subtitle (S1030. CR10410) (4) establishes increased criminal penalties in cases of violations of the Animal Health Protection Act involving persons knowingly destroying records or moving pests in 

commerce for distribution. Criminal penalties are likewise increased in cases of persons who have committed multiple violations 

of the Animal Health Protection Act. Strike the provision of Section 

1034 regarding criminal and civil penalties relating to suspension 

or revocation of accreditation. (S1034. CR10414) (5) authorization 

of appropriations and to provide for more efficient management of 

declarations of extraordinary emergencies and transfer of funds 

from the Commodity Credit Corporation (S1037. CR10417) (6) 

strikes the repeal of the Pseudorabies Eradication Program which 

is reauthorized in the Conference substitute in Section 10507. 

(S1038. CR10418) 

The managers recognize that the principal purpose of the Animal Health Protection Act is to protect against animal disease. 

With this in mind, the managers have considered numerous options 

with regard to a statutory definition of disease. In considering 

these options, the managers were concerned that an overly broad 

definition could result in litigation forcing the Agency to divert 

scarce resources to protecting against conditions which have little 

if anything to do with the scientific understanding of disease. Likewise, the managers were equally concerned that an arbitrarily narrow definition would limit the ability of the Agency to respond to 

as of yet unknown threats to animal health. The managers have 

therefore concluded that in order for the Agency to have maximum 

flexibility to focus it’s resources and respond to new or emerging 

disease threats that a regulatory definition of disease should be left 

to the discretion of the Secretary. In so doing, the managers strongly encourage the Secretary to continually reexamine the principal 

definitions developed during implementation of this statute and 

make such changes as deemed necessary to achieve the goal of protecting animal health. 

It is also the Managers intent that nothing in the Act should 

be construed in a manner that will unduly restrict or delay the importation, export, or transportation of biomedical research materials, including tissues, specimens, samples, animal embryos, or 

665

animals designated for use in research. The Managers do not expect the Secretary to issue any rule or regulation that would unduly restrict or delay the importation, export, or transportation of 

biomedical research materials, including tissues, specimens, samples, animal embryos, or animals designated for use in research. 

It is the Managers understanding that Veterinary Services, 

within the United States Department of Agriculture’s Animal and 

Plant Health Inspection Service (APHIS), has a long history of cooperation with the veterinary community in performing important 

regulatory work nationwide. Private practitioners were first used to 

perform regulatory work in 1907. However, the current voluntary 

accreditation program (National Veterinary Accreditation Program) 

officially began in 1921, when USDA, Bureau of Animal Industry, 

administered the first accreditation examination to certify practitioners as representatives of the Federal government. Accredited 

veterinarians are the backbone of U.S. regulatory programs for 

livestock and poultry diseases. The overriding goal of the National 

Veterinary Accreditation Program is for Veterinary Services, veterinarians, State Animal Health Officials and veterinary colleges to 

work cooperatively toward the goal of protecting and improving the 

health, quality, and marketability of U.S. animals. Increased collaboration will be crucial to the success of new enhancements to 

this program. It is the intent of the Managers that APHIS’ existing 

Veterinary Accreditation Program and implementing regulations 

continue unimpeded pursuant to section 1038(c). With regard to future revisions by APHIS to its Veterinary Accreditation Program, 

the Managers strongly encourage APHIS’ Veterinary Services to 

consult with State animal health officials and veterinary professionals, including State Veterinary Medical Associations and private veterinary practitioners. 

The Managers note that USDA currently is evaluating three 

rapid screening tests to determine which is the most sensitive and 

effective at detecting scrapie. Ensuring proper screening and testing, and, where necessary, the eradication of animal diseases, is of 

paramount importance to American Agriculture, USDA, the Congress, and the American people. With the stakes to animal health 

and the farm economy so high, the U.S. government should use the 

very best methods available to detect animal diseases. Accordingly, 

the Managers request that USDA use science-based criteria to 

evaluate the tests under review and invite third-party animal 

health diagnostic test experts to review preliminary findings and 

evaluation methodology. 

The purpose of the Animal Health Protection Act is to address 

pest and disease threats to animal health and production. The 

managers do not intend for the Animal Health Protection Act to be 

used to manage or control predation. The Managers expect the Secretary of Agriculture to continue to use the authorities under the 

Act of March 2, 1931 (7 U.S.C. 426–426b) as amended. 

In a case of extraordinary emergency, the section regarding 

seizure, quarantine, and disposal provides express authority in the 

Secretary to hold, seize, treat, and apply other remedial actions to 

destroy or otherwise dispose of any animal. However, nothing in 

this section or in this title should be construed as impliedly vesting 

in the Secretary authority to manage fish or wildlife populations. 

666

If fish or wildlife is affected by control or eradication measures proposed by the Secretary in an extraordinary emergency, the Managers expect that the Secretary will consult with officials of the 

State agency having authority for protection and management of 

such wildlife, as is the current practice in such instances. 

(35) Pesticide Fees 

The Senate amendment (1) amends the FIFRA, with respect to 

the pesticide registration maintenance fee system, to: (a) make uniform the amount of the annual fee for each registration; (b) set 

maximum amounts payable by a registrant and an increased aggregate amount of collected fees; (c) expand the definition of a small 

business; and (d) extend the authority to collect such fees and the 

prohibition on levy of fees other than those specified in the Act’s 

fee provisions; (2) extends the requirement that the Administrator 

use maintenance fees to ensure expedited processing of similar applications and adds a requirement that the fees be used to review 

inert ingredients; (3) the Administrator the authority to change 

current fee amounts by the same percentage as the annual adjustment to the Federal General Schedule pay scale. If fully implemented the total cost of the provision will be $214 million over 4 

years. (Sec. 1041) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

On June 9, 1999, EPA proposed a rule, ‘‘Pesticides; Tolerance 

Processing Fees Proposed Rule,’’ 64 FR 31039, Docket Number 

OPP–30115. EPA proposed to increase tolerance fees dramatically 

and to collect fees retroactively back to 1996. The Managers question the legal basis and are concerned about imposing fees retroactively and with the proposed level of fees. Retroactive imposition 

of increased tolerance fees, if imposed, could result in unnecessary 

loss of valuable pesticide products for American farmers. The Managers strongly encourage the EPA to withdraw its proposed tolerance fee rule, and instead, work with the appropriate oversight 

committees in the House of Representatives and the U.S. Senate to 

develop comprehensive pesticide user fee legislation. 

The Managers continue to be concerned that the Administrator 

has yet to issue protocols for the issuance of registrations for 

antimicrobials under the Food Quality Protection Act. The Managers expect the Administrator to expeditiously develop and implement these protocols. The Managers further expect the Administrator to give full consideration to an exemption under Sec. 25(b) 

of the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 

136) for antimicrobial products approved for use in food packaging 

immediately before aseptic fill. 

(36) Pest Management in Schools 

The Senate amendment amends FIFRA to create a new section 

33, ‘‘School Environment Protection Act of 2002’’ that requires Pest 

Management in Schools. Requires states to develop pest management plans as part of state cooperative enforcement agreements 

with the EPA. Sets requirements for what should be included in 

plans and requires the EPA to distribute guidelines to states no 

later than one year after enactment, after which State educational 

667

agencies would be required to develop plans and submit them to 

the Administrator for approval. Local education agencies would be 

required to implement their state plan within one year of receiving 

it. (Sec. 1042). 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(37) Packer Ownership 

The Senate amendment amends Section 202 of the Packers 

and Stockyards Act of 1921 (7 U.S.C. 192(f)) (as amended by section 1043(a)) by banning ownership or control of livestock by a 

packer prior to 14 days before slaughter. An exemption from the 

ban is provided for any packer that is a cooperative entity with a 

majority ownership interest held by livestock producers who own, 

feed or control their own livestock which are provided to the cooperative for slaughter, or for any packer who kills less than 2 percent of the total U.S. annual slaughter for that type of livestock. 

In general, the ban becomes effective upon enactment of the Act, 

but packers of swine would not be required to complete livestock 

divestitures until 18 months following the enactment of the Act. 

For packers of any other type of livestock, the ban would become 

effective no later than 180 days following enactment of the Act. 

(Section 1043, amended by Sec. 1072 of the Senate amendment 

below). 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

The Managers recognize the importance of Congress holding 

hearings to address issues affecting livestock producers, such as agribusiness consolidation, and livestock marketing issues. 

(38) Packers and Stockyards 

The Senate amendment (1) amends Section 2(a) of the Packers 

and Stockyards Act by adding definitions of ‘livestock contractor’, ‘livestock production contract’, and ‘livestock production contract 

grower’; (2) Amends sections 202, 203, 205, 204, 308, 401, and 403 

of the P&S Act to include ‘‘livestock contractor’’ as a covered entity 

under the P&S Act; (3) adds new section 417 to the P&S Act that 

allows, notwithstanding a provision of a livestock or poultry contract, a party to the contract to discuss terms of the contract with 

a legal advisor, a lender, an accountant, an executive or manager, 

a landlord, a family member, or a Federal or State agency with responsibility for enforcing a statute designed to protect a party to 

the contract. (Sec. 1044) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that includes only swine production contractors as a 

covered entity under the P&S Act. (Sec. 10503) The amendment 

was rewritten so that the disclosure and preemption provisions appear in Sec. 10504. This section clarifies that people can discuss 

contracts with state & federal agencies and certain other individuals. The language does not preempt any state law that addresses 

confidentiality provisions in contracts for the sale or production of 

livestock or poultry except any provision of state law that makes 

lawful a contract provision that prohibits a party from or limits a 

668

party in engaging in a discussion that this section otherwise requires to be permitted. 

(39) Arbitration Clauses 

The Senate amendment adds No Comparable Provision 413A 

to the Packers and Stockyards Act that states that a person that 

seeks to resolve a dispute in the contract may, notwithstanding the 

terms of the contract, elect to arbitrate the dispute in accordance 

with the contract; or resolve the dispute in accordance any other 

lawful method of dispute resolution, including mediation and civil 

action. (Sec. 1046) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(40) Cotton Classification Services 

The Senate amendment amends the first sentence of section 3a 

of the Act of March 3, 1927 (commonly known as the ‘Cotton Statistics and Estimates Act’) by striking ‘2002’ and inserting ‘2006’. 

(Sec. 1047) 

The House bill had an identical provision contained in the Research Title. (Sec. 740) 

The Conference substitute adopts the Senate provision with 

technical and clarifying amendments and extends the program 

through 2007. (Sec. 10801) 

(41) Protection for Purchasers of Farm Products 

The Senate amendment (1) amends Section 1324 subsection 

(c)(4)(B) of the Food Security Act of 1985 by striking signed, and 

inserting signed, authorized, or otherwise authenticated by the 

debtor and (2) amends subsection (c)(4) by striking subsection (C); 

(2) amends subsection (c)(4)(D)(iv) by striking applicable and all 

that follows and inserting applicable, and the name of each county 

or parish in which the farm products are growing or located; (3) redesignates subparagraph numbering; (4) amends subsection 

(e)(1)(A)(ii)(IV) by striking crop year, and all that follows and inserting crop year, and the name of each county or parish in which 

the farm products are growing or located; (5) amends subsection 

(c)(4)(D)(iv) by inserting contains before any payment; (6) the same 

changes are made in subsection (g)(2)(A). (Sec. 1048) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

10604) 

(42) Improved Standards for the Care and Treatment of Certain 

Animals 

The Senate amendment provides for the socialization of puppies intended for sale as pets, and prohibits female dogs from being 

bred before they are one year old, or from having more than three 

litters every two years. The Act also establishes a ‘‘three strikes’’

system for AWA licensees that commit 3 or more serious violations 

of the Act over an eight-year period. (Sec. 1049) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

669

(43) Farmers Market Promotion Program 

The Senate amendment (1) makes minor technical changes to 

the Sec. 4 and Sec. 5 of the Farmer-to-Consumer Direct Marketing 

Act of 1976; (2) amends Sec. 5 to include a Development of Farmers 

Markets whereby the Secretary of Agriculture will work to train 

managers of farmers markets, develop opportunities to share information among managers of farmers markets, develop a program to 

train extension service employees in the development of direct marketing techniques, and work with producers to develop farmers 

markets; (3) amends the Farmer-to-Consumer Direct Marketing 

Act of 1976 by adding Sec. 6 to establish the Farmers’ Market Promotion Program to make grants to eligible entities to establish, expand and promote farmers’ markets. (Sec. 1050) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to make minor technical changes to Section 4 and Section 5, only authorizes the new Section 6 of the Farmer-to-Consumer Direct Marketing Act of 1976, and further prohibits the use 

of funds appropriated under this new section for construction of 

buildings or structures. (Sec. 10605) 

(44) Definition of Animal Under the Animal Welfare Act 

The Senate amendment amended the definition of animal to 

add birds, rats, and mice bred for use in research to the list of 

those animals excluded from coverage under the Animal Welfare 

Act. (Sec. 1051) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

10301) 

(45) Wild Fish and Wild Shellfish 

The Senate amendment amends section 2104 of the Organic 

Foods Production Act of 1990 by inserting a new subsection (c) to 

provide, notwithstanding section 2107(a) (i.e., notwithstanding the 

requirement that an organic product be farm-raised), the Secretary 

may allow for certification and labeling of wild fish and wild shellfish harvested from salt water as organic, following a rulemaking. 

In doing this, The Secretary is required to consult with the Secretary of Commerce; the National Organics Standards Board; producers, processors, and sellers; and interested members of the public; and to the maximum extent practicable, the Secretary is to accommodate the unique characteristics of the industries in the 

United States that harvest and process wild fish and wild shellfish. 

(Sec. 1055) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(46) Assistant Secretary of Agriculture for Civil Rights 

The Senate amendment directs the Secretary to establish within USDA a position of Assistant Secretary of Agriculture for Civil 

Rights. President shall appoint the Assistant Secretary with the 

advice and consent of the Senate. Duties include enforcing and coordinating compliance with all civil rights laws; ensuring that 

USDA has measurable goals for fair and nondiscriminatory treatVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00673 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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ment; compiling and disclosing data used in assessing civil rights 

compliance in the socially disadvantaged farmer program; holding 

USDA agency heads and senior executives accountable for civil 

rights compliance and assessing their performance; ensuring that 

there is sufficient level of participation by socially disadvantaged 

farmers and ranchers in deliberations of county and area committees established under section 8(b) of the Soil Conservation and Domestic Allotment Act and that participation and election data are 

made publicly available. (Sec. 1056) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that ensures the new Assistant Secretary of Agriculture for Civil Rights is under the authority of the Secretary of 

Agriculture. (Sec. 10704) 

(47) Transparency and Accountability for Socially Disadvantaged 

Farmers and Ranchers; Public Disclosure Requirements for 

County Committee Elections 

The Senate amendment: 

(1) Amends the Food, Agriculture, Conservation and Trade Act 

of 1990 by inserting Sec. 2501A to ensure compilation and disclosure of data to assess and hold the Department of Agriculture accountable for the nondiscriminatory participation of socially disadvantaged farmers and ranchers in programs of the department; 

(2) Amends Section 8(b)(5) of the Soil Conservation and Domestic Allotment Act by striking subparagraph (B) and replacing it 

with a modified subparagraph (B), which in addition to those 

things already required under current law: Requires that each solicitation of nominations for, and notice of elections of, a county, 

area, or local committee shall include the nondiscrimination statement used by the Secretary; 

(3) Sets forth procedure for the opening of ballots as follows: 

At least 10 days before the date on which ballots are to be 

opened and counted, a county, area, or local committee shall announce the date, time, and place at which election ballots will be 

opened and counted. Election ballots shall not be opened until the 

date and time announced. Any person may observe the opening and 

counting of the election ballots; 

(4) Requires that not later than 20 days after the date on 

which an election is held, a county, area, or local committee shall 

file an election report with the Secretary and the State office of the 

Farm Service Agency; 

(5) Requires that not later than 90 days after the date of the 

election, the Secretary shall complete a report that consolidates all 

the election data reported to the Secretary; 

(6) Provides that, if after analyzing the election data it is necessary, the Secretary shall promulgate proposed uniform guidelines 

for conducting elections; 

(7) Provides that the term of office for a member of a county, 

area, or local committee shall not exceed 3 years; and 

(8) provides that the Secretary shall maintain and make readily available to the public all the data required to be collected 

under this section. (Sec. 1057) 

The House bill contains no comparable provision. 

671

The Conference substitute adopts the Senate provision with 

amendments to require the Secretary to report participation rates 

of socially-disadvantaged farmers and ranchers by race, ethnicity 

and gender and in those instances when socially-disadvantaged 

farmers or ranchers are not adequately represented on a local or 

area committee, the Secretary may appoint one additional voting 

member to the local or area committee. (Sec. 10708) 

(48) Animal Terrorism Penalties 

The Senate amendment amends title 18 U.S.C. 43 to revise 

and enhance criminal penalties and restitution for offenses against 

animal enterprises. Subsection (a) of existing law for offenses causing economic damages is revised to add a 6 month sentence and/

or fines for offenses involving less than $10,000 in economic damages and increases the penalty for offenses causing more than 

$10,000 from one to three years, plus retaining fines. 

Subsection (b) is revised to increase the penalty for offenses 

causing serious bodily injury from 10 to 20 years, plus adding the 

possibility of a fine, or both, and for an offense causing death adding the possibility of a fine, or both a fine and criminal penalty, to 

the existing law penalties of life or a term of years. 

Subsection (c) is amended to allow restitution for ‘‘any other 

economic damage resulting from the offense’’. (Sec. 1058) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(49) Pseudorabies Eradication Program 

The Senate amendment amends Section 2506(d) of the Food, 

Agriculture, Conservation, and Trade Act of 1990 by striking ‘2002’ and inserting ‘2006’. (Sec. 1059) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to extend the Pseudorabies Eradication Program to 

2007. (Sec. 10507) 

(50) Transportation of Poultry and Other Animals 

The Senate amendment amends the FY 02 Treasury Appropriations measure which provides a provision allowing the Postal 

Service to require air carriers to accept as mail, day old poultry if 

the air carrier allows the shipment of any live animals as cargo. 

The Appropriations provision only covers the period through June 

30, 2002. The Senate provision makes the provision in the Appropriations bill permanent. (Sec. 1060) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to include honeybees. (Sec. 10501) 

(51) Emergency Grants to Low-Income, Migrant and Seasonal Farm 

Workers 

The Senate amendment amends Section 2281 of the Food, Agriculture, Conservation, and Trade Act of 1990 by specifying an authorization for appropriations at $40,000,000 for each fiscal year. 

(Sec. 1061) 

The House bill contains no comparable provision. 

672

The Conference substitute adopts the Senate provision with an 

amendment to authorize such sums as are necessary. (Sec. 10102) 

(52) Preclearance Quarantine Inspections 

The Senate amendment adds a no comparable provision to the 

FACT Act to require the APHIS to conduct preclearance quarantine inspections at all direct departure and interline airports of 

persons, baggage, cargo and other items destined from Hawaii to 

the U.S. mainland, Guam, Puerto Rico, and the U.S. Virgin Islands, but provides this provision shall not be implemented unless 

the APHIS appropriation for inspection, quarantine, and regulatory 

activities is increased by $3,000,000 in a non-Agriculture FY 2002 

appropriations act. (Sec. 1063) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to authorize appropriations in fiscal year 2003. (Sec. 

10811) 

(53) Emergency Loans for Seed Producers 

The Senate amendment amended Section 253(b)(5)(B) of the 

Agricultural Risk Protection Act of 2000 regarding loans to seed 

producers who were unsecured creditors of a seed company that 

filed for bankruptcy in 2000. The provision changed the duration 

of these loans from 18 months to 54 months. (Sec 1064) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to change the duration of the loans from 18 months to 

36 months. (Sec. 10103) 

(54) National Organic Certification Cost Share Program 

The Senate amendment directs the Secretary of Agriculture 

(acting through the Agricultural Marketing Service) to use 

$3,500,000 of Commodity Credit Corporation funds for each of the 

fiscal years 2002 through 2004, and $3,000,000 for fiscal year 2005 

to establish a national organic certification cost-share program to 

assist producers and handlers of agricultural products in obtaining 

certification under the National Organic Production Program established under the Organic Foods Production Act of 1990. Maximum 

federal cost share is 75% and the maximum amount of a payment 

made to a producer or handler under this provision shall be $500. 

(Sec. 1065) 

The House Bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment providing in fiscal year 2002, $5,000,000 to remain 

available until expended to (in a cost-share manner) assist producers and handlers of organic agricultural products in obtaining 

certification under the National Organic Production Program established under the Organic Foods Production Act of 1990. (Sec. 

10606) 

The Managers urge the Secretary to assist producers, processors and firms interested in shifting production into organic products in making this transition and, to the extent possible, work to 

eliminate unnecessary, over burdensome and any other barriers to 

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dertake a study to ascertain the availability of key inputs into organic production, including the availability of organically produced 

feedstuffs for the organic production of livestock and poultry. 

(55) Food Safety Commission 

The Senate amendment establishes the Food Safety Commission composed of 15 members from consumer groups; food processors, producers, and retailers; public health professionals; food inspectors; former or current food safety regulators; members of academia; or any other interested individuals. The Commission shall 

make specific recommendations that build on and implement, to 

the maximum extent practicable, the recommendations contained 

in the report of the National Academy of Sciences entitled Ensuring Safe Food from Production to Consumption and that shall serve 

as the basis for draft legislative language to improve the food safety system; improve public health; create a harmonized, central 

framework for managing Federal food safety programs (including 

outbreak management, standard-setting, inspection, monitoring, 

surveillance, risk assessment, enforcement, research, and education); enhance the effectiveness of Federal food safety resources; 

and eliminate, to the maximum extent practicable, gaps, conflicts, 

duplication, and failures in the food safety system. Not later than 

1 year after the date on which the Commission first meets, the 

Commission shall submit to the President and Congress a comprehensive report. 

The Commission shall terminate on the date that is 60 days 

after the date on which the Commission submits the recommendations and report. (Sec. 1066) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment providing that members be appointed by the President, 

changing the eligibility standards for appointees, and requiring the 

Commission’s recommendations to include descriptions of how each 

would improve food safety. (Sec. 10807) 

The Managers expect that the Commission shall make recommendations to improve public health, help create a harmonized 

framework for managing Federal food safety programs (including 

outbreak management, standard-setting, inspection, monitoring, 

surveillance, risk assessment, enforcement, research and education), and enhance the effectiveness of Federal food safety resources (including the application of all resources based on risk, including resources for inspection, research, enforcement, and education). 

The recommendations should build on, to the maximum extent 

practicable, the recommendations contained in the report of the 

National Academy of Sciences entitled ‘Ensuring Safe Food from 

Production to Consumption’. 

(56) Penalties for Violations of Plant Protection Act 

The Senate amendment amends criminal penalty provisions of 

the Plant Protection Act (7 U.S.C. 7734) to include felony and misdemeanor penalties. Violations involving plant pests, more than 50 

pounds of plants, more than 5 pounds of plant products, more than 

50 pounds of noxious weeds, possession with the intent to disVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00677 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
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tribute items known to be in violation of this Act, or any fraud involving official documents issued under this act shall be subject to 

felony penalties (not more than 5 years imprisonment and/or not 

more than $25000 fine). Misdemeanor penalties (not more than 1 

year imprisonment and/or not more than $1000 fine) for violations 

involving less than 50 pounds of plants, less than 5 pounds of plant 

products, or less than 50 pounds of noxious weeds. Felony and misdemeanor penalty limits are increased for second and subsequent 

violations. Violations involving intent to harm U.S. agriculture 

would be subject to not less than 10 years, nor more than 20 years 

imprisonments and/or a fine not to exceed $500,000. Finally, additional sections are added authorizing criminal and civil forfeiture 

for violations other than misdemeanors. (Sec. 1068) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to establish increased criminal penalties in cases of 

violations of the Plant Protection Act involving persons knowingly 

destroying records or moving pests in commerce for distribution. 

Criminal penalties are likewise increased in cases of persons who 

have committed multiple violations of the Plant Protection Act. 

(Sec. 10810) 

The Managers encourage the Secretary to consider the need for 

the post-harvest treatment of imported and domestic agricultural 

products, and for untreated agricultural products moving into or 

through the United States, for fruit flies and other plant pests and 

diseases to improve the protection of domestic crops from plant 

pests and diseases. Such facilities could be located in ports of entry 

on the border between the United States and Mexico from Nogales, 

Arizona to Galveston, Texas as well as in Wilmington, North Carolina, Atlanta, Georgia, Gulfport, Mississippi, and Seattle, Washington. 

(57) Connecticut River Atlantic Salmon Commission 

The Senate amendment changes the effective period of the 

Connecticut River Atlantic Salmon Commission from 20 to 40 years 

and authorizes $9,000,000 for each of fiscal years 2002 through 

2010 to the Secretary of the Interior to carry out the activities of 

the Connecticut River Atlantic Salmon Commission. (Sec. 1069) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to extend the compact and strike the authorization of 

appropriations. (Sec. 10812) 

(58) Bear Protection 

The Senate amendment prohibits movement in interstate or 

foreign commerce of bear viscera—defined as the body fluids and 

organs, not including blood or brains, of any species of bear. Exceptions are made for wildlife law enforcement purposes, and nothing 

in this section affects state regulation of bear populations or any 

hunting of bears allowed under state law and establishes civil and 

criminal penalties for violations. (Sec. 1070) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

675

(59) Family Farmer Bankruptcy Provisions 

The Senate amendment makes permanent Chapter 12 of the 

bankruptcy code effective, October 1, 2001, the date on which the 

section lapsed. Chapter 12 covers bankruptcies where the total 

debts can be no more than $1.5 million, where 50% of the income 

and 80% of the debts are farm related. (Sec. 1071) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to extend Chapter 12 Bankruptcy through December 

31, 2002. (Sec. 10814) 

(60) Packer Ownership 

The Senate amendment adds a new subsection to the Packers 

and Stockyards Act that prohibits meatpackers from owning or 

feeding livestock directly, through a subsidiary, or through an arrangement that gives the packer operational, managerial, or supervisory control over the livestock, or over the farming operation that 

produces the livestock, to such an extent that the producer is no 

longer materially participating in the management of the operation 

with respect to the production of the livestock. 

Exempts from prohibition: 

1. Arrangements entered into within 14 days before slaughter; 

2. A cooperative or entity owned by a cooperative, if a majority 

of the ownership interest in the coop is held by active coop members that own, feed, or control livestock and provide the livestock 

to the coop; and 

3. A packer that is owned by producers of a type of livestock, 

if during a calendar year the packer slaughters less than 2 percent 

of the head of that type of livestock in the U.S. (Sec. 1072 which 

amends Sec. 1043) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision.

(61) Hass Avocados 

The Senate amendment (1) amends Section 1205 to require the 

Secretary to revisit the issue of seat allocation on the board; (2) 

amends subsection (h)(1)(C)(iii) by allowing importers to pay the 

assessment ‘‘not less than 30 days after the avocado clears customs, 

unless deemed not feasible as determined by the Commissioner of 

Customs and the Secretary’’. (Sec. 1073) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(62) Social Security Surplus Funds 

The Senate amendment expresses the Sense of the Senate regarding Social Security; that no social security surplus funds 

should be used to make currently scheduled tax cuts permanent or 

for wasteful spending. (Sec. 1074) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(63) Repeal of Estate Taxes 

The Senate amendment expresses the Sense of the Senate that 

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nating the sunset provision’s applicability to the estate tax. That 

estate tax provision expires on Dec 31, 2010. (Sec. 1075) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(64) Commercial Fisheries Failure 

The Senate amendment permanently revokes Northeast U.S. 

multi-species fishing permits using a ‘‘reverse auction,’’ method, a 

method developed to remove the maximum amount of capacity 

from the fishery at the lowest possible price to the taxpayers. The 

goal is to reduce the total number of days multi-species fishing is 

allowed in certain areas off the New England coast because of depletion of key fish species. $10 million is provided in CCC funds for 

the purpose; USDA with consultation with the Department of Commerce would administer the program. The provision provides for 

expedited procedures under an existing rule but does not prevent 

alternative rules if developed. The provision remains in effect for 

1 year. (Sec. 1076) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to authorize such sums as necessary. (Sec. 10107) 

(65) State Meat Inspection Programs 

The Senate amendment (1) requires the Secretary not later 

than September 30, 2003, to conduct a comprehensive review of 

each State meat and poultry inspection program, to include— An analysis of the effectiveness of the State program; 

Identification of changes necessary to enable the possible 

transformation of the State program to a State program that includes the mandatory requirements of the Federal Meat Inspection 

Act and the Poultry Products Inspection Act; 

(2) Requires the Secretary to obtain comment from interested 

parties in carrying out the review and authorizes appropriations. 

(Sec. 1077) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

The Managers recognize that it is the policy of Congress to ensure that consumers continue to have access to a safe, wholesome, 

abundant and affordable supply of meat and meat food products. 

The Managers further believe the goal of providing a safe, wholesome, abundant and affordable supply of meat and meat food products throughout the United States is achieved, in part, through the 

role played by both State and Federal food safety inspection systems. The State and Federal meat inspection programs should continue to function together to create an inspection system that ensures food safety and increases consumer confidence in the food 

supply in both intrastate and interstate commerce. The Managers 

recognize that these goals cannot be met in the absence of viable 

State meat inspection programs that help to foster the participation of smaller establishments in the food production economy. 

Therefore, the Managers intend that when the Secretary of Agriculture submits the annual report to Congress on the activities of 

the Food Safety Inspection Service, the Secretary should include a 

full review of State inspection systems. This review should also 

677

offer guidance about changes the State systems might expect 

should the statutory prohibition against the interstate shipment of 

state inspected product be removed. 

(66) Agricultural Research and Technology 

The Senate amendment authorizes such sums as necessary 

from 2002 through 2006 for (1) studies on the transmission of 

spongiform encephalopathy in deer, elk, and moose and chronic 

wasting disease with results to be reported to the Ag Committees; 

(2) a research and extension grants program to develop prevention 

and control methodologies for infectious animal diseases of livestock and laboratory tests to expedite detection of infected livestock 

and presence of disease in herds or flocks; (3) a vaccine storage 

study to determine how much vaccine is needed, how much is 

available, and directing the Secretary to take action to correct any 

identified shortfall; and (4) a program of veterinary training to retain sufficient capacity of State and Federal vets in all regions 

well-trained in recognition and diagnosis of exotic and endemic animal diseases. (Sec. 1078) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to provide additional discretion to the Secretary with 

regard to implementation of the program and authorize the program through 2007. The research and extension grant program for 

livestock production is deleted. A new research and extension grant 

program for livestock production is established within the High Priority Research and Extension grants program [See Sec. 7208]. (Sec. 

10907) 

(67) Office of Science Technology Policy 

The Senate amendment authorizes the President to establish 

an SES position in the Office of Science and Technology Policy for 

a Veterinary Advisor. (Sec. 1079) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

The U.S. Department of Agriculture holds primary responsibility for preventing, monitoring and responding to outbreaks of 

diseases that affect livestock and other animals used for agricultural purposes. Recent experiences in Europe with Bovine 

Spongiform Encephalopathy and with Foot and Mouth Disease, 

however, demonstrate that the technical expertise of other federal 

agencies will also be required if a similar outbreak ever erupts in 

the United States. 

The Managers are aware of successful efforts by the White 

House Office of Science and Technology Policy (OSTP) to pull together and draw upon the scientific and technical expertise of experts from across the federal government to evaluate solutions to 

emerging problems. When these or similar problems arise, the 

Managers expect that OSTP will draw heavily upon the expertise 

of veterinarians to provide similar leadership to facilitate multiagency efforts to prevent, detect, and respond to outbreaks of animal diseases. 

678

(68) Operation of Agricultural and Natural Resource Programs on 

Tribal Lands 

The Senate amendment requires the Secretary of Agriculture 

with consultation of the Secretary of the Interior, to conduct a review on tribal and trust land. The review will address natural resource management programs, incentive programs and farm income support programs. The report will contain a plan to carry out 

actions found in this section and shall be submitted to Congress 

not later than 1 year after the date of enactment of this Act. (Sec 

1079A) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate language with an 

amendment to include a report in consultation with the Secretary 

of the Interior and clarify that the report will apply to commodity 

supports, natural resource, credit and forestry programs. (Sec. 

10910) 

(69) Geographically Disadvantaged Farmers 

The Senate amendment, Subsection (a), (1) provides a definition of eligible entity, which includes community-based organizations with experience in serving geographically disadvantaged 

farmers, land-grant colleges, and national tribal organizations that 

have experience in serving geographically disadvantaged farmers; 

(2) defines geographically disadvantaged farmer as one in an insular area (as defined in 7 U.S.C. 3103); (3) requires the Secretary 

to carry out an assistance program to encourage and assist geographically disadvantaged farmers in owning and operating farms 

and participating equitably in USDA programs; (4) provides Secretary authority to make grants and enter into contracts with eligible entities to provide information and technical assistance; and (5) 

authorizes $10,000,000 each year to carry out the program. (Sec. 

1079B) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate language with an 

amendment to require a report describing how to improve geographically disadvantaged farmers’ participation in USDA programs. (Sec. 10906) 

(70) Naming Ginseng 

The Senate amendment expresses the Sense of the Senate that 

the Commissioner of FDA should promulgate regulations to ensure 

that the name ‘‘ginseng’’ or any name that includes the word ‘‘ginseng’’ shall be used in reference to an herb or herbal ingredient 

that is part of the plant of one of the species of the genus Panax 

and is produced in compliance with U.S. law regarding the use of 

pesticides. (Sec. 1079C) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that the term ‘‘ginseng’’ may not be considered to be 

a common or usual name for any herb or herbal ingredient not derived from a plant classified within the genus Panax, including 

with respect to importation under section 801 of the Federal Food, 

Drug, and Cosmetic Act. (Sec. 10806) 

679

(71) Adjusted Gross Revenue Insurance Pilot Program 

The Senate Amendment amends Section 523 of the Federal 

Crop Insurance Act to require the Federal Crop Insurance Corporation to expand for the 2003 reinsurance year the Adjusted Gross 

Revenue Insurance Pilot Program into at least 8 counties in the 

State that produces the highest quantity of specialty crops for 

which adjusted gross revenue insurance is not available. The language requires the Corporation to include those counties that 

produce a significant quantity of specialty crops. (Sec. 1079D) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to expand the Adjusted Gross Revenue Insurance Pilot 

Program for the 2003 reinsurance year to at least 8 counties in the 

State of California and at least 8 counties in the State of Pennsylvania. The substitute language requires the Corporation to work 

with the respective State Departments of Agriculture to establish 

criteria to determine which counties to include in the pilot program. (Sec. 10004) 

(72) Report on Specialty Crop Insurance 

The Senate Amendment amends Section 522(e) of the Federal 

Crop Insurance Act to provide additional mandatory funding to reimbursements made available under research and development; 

amends Section 524(a)(4) of the Federal Crop Insurance Act to provide additional mandatory funding to education and information 

programs established under paragraph (2) of that section; provides 

that the Secretary of Agriculture shall submit to the Committee on 

Agriculture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate a report that describes the progress made by the Corporation in research and development of innovative risk management products to include cost 

of production insurance that provides coverage for various crops, 

the progress made by the Corporation in increasing the use of risk 

management products offered through the Corporation by producers of specialty crops, by small- and moderate-sized farms, and 

in areas that are underserved, as determined by the Secretary, and 

how the additional funding provided under the amendments made 

by the section has been used. (Sec. 169(h)(3)) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision pertaining only to the report with commensurate changes. The Senate 

language amending Section 522(e) and Section 524(a)(4) of the Federal Crop Insurance Act is deleted. (Sec. 10006) 

The Managers expect the Federal Crop Insurance Corporation 

to fully utilize contracting allocations for research and development 

of policies in underserved states under Section 522(e)(2)(B) of the 

Federal Crop Insurance Act.

The Managers urge the Federal Crop Insurance Corporation to 

consider expanding its contract for research and development of a 

cost of production policy in order to cover as many commodities as 

is practicable. The Managers recognize the attraction of the cost of 

production plan currently under development and recommend that 

the current list of 12 crops be expanded over the next several years 

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dos, bananas, barley, beans, beets, blueberries, boysenberries, broccoli, cabbage, canola, cantaloupes, carrots, cauliflower, celery, cherries, chicory, Christmas trees, coffee, cucumbers, dry beans, eggplant, escarole, flaxseed, floriculture, forest products, garlic, grain 

sorghum, grapefruit, grapes, guava, guar, grass seed, greenhouse 

and nursery agricultural commodities, hay, herbs, honeydew melons, lemons, lettuce, lima beans, limes, loganberries, maple, mango, 

mushrooms, mustard greens, okra, olives, oranges, papaya, peanuts, peas, pears, pecans, peppers, plums, pineapple, pistachios, potatoes, prunes, pumpkins, raspberries, rye, safflower, spinach, 

squash, strawberries, sugar beets, sunflower, sweet corn, sweet potatoes, tangerines, tangelos, tobacco, tomatoes, walnuts, and watermelons. 

The Managers recognize that there are several types of innovative insurance plans, such as whole farm revenue insurance, which 

have the potential to help farmers better manage the risks associated with agricultural production. Whether whole farm revenue insurance, commodity-specific cost of production plans, or other innovative approaches, the Managers encourage the development of actuarially sound policies that do not distort markets and that keep 

moral hazard and adverse selection problems to a minimum. 

(73) Pasteurization 

The Senate amendment provides a common definition of pasteurization for ‘‘any provision of federal law under which a food or 

food product is required to undergo a treatment of pasteurization’’ which means ‘‘any safe treatment that— (1) Is a treatment prescribed as pasteurization applicable to 

the food or food product under any Federal law (including regulation); or 

(2) Has been determined to the satisfaction of the Secretary of 

HHS to achieve a level of reduction in the food or food product of 

the microorganisms of public health concern that— (A) Is at least as protective of the public health as a treatment 

described in paragraph (1); and 

(B) Is effective for a period that is at least as long as the shelf 

life of the food or food product when stored under normal, moderate, and severe abuse conditions’’. (Sec. 1079E) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment that clarifies the Food and Drug Administration approval process for claims of pasteurization. FDA is directed to revise as appropriate its existing regulation covering the labeling of 

foods. Pending the completion of such a review, such authorization 

is provided for any person to seek FDA approval of an irradiationlabeling claim. (Sec. 10808) 

The Managers have included a provision to require the Secretary of Health and Human Services to complete a rulemaking to 

review current Food and Drug Administration requirements for the 

labeling of irradiated foods. Since 1997, Congress has repeatedly 

urged the performance of such a review to ensure that any required 

disclosure statement in the labeling of irradiated foods should ‘‘be 

of a type and character such that it would not be perceived to be 

a warning or give rise to inappropriate consumer anxiety.’’ House 

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Conference Report No. 105–399, U.S. Code Congr. & Admin. News 

1997, pp. 2,888–89. Pending completion of the rulemaking required 

by this provision, any person may petition the Secretary regarding 

the adequacy of proposed labeling for a particular irradiated food 

so that the person may receive from the Secretary a determination 

as to whether labeling inconsistent with current regulatory requirements is truthful and non-misleading and, therefore, permissible. If 

such petition is neither approved nor denied within 180 days of receipt (unless the petitioner and the Secretary mutually agree to extend this time frame), the petition will be deemed denied and the 

denial will constitute final agency action subject to judicial review. 

The Managers have included a provision to facilitate the use 

of effective food safety technologies. Specifically, an amendment to 

Section 403 of the Federal Food, Drug, and Cosmetic Act is included to recognize that the term ‘‘pasteurization’’ or ‘‘pasteurized’’

may be uniformly used to advise consumers that a treatment or 

process, including a series of treatments or controls, may be used 

if it achieves the same food safety effect as currently recognized 

pasteurization methods. The intent of this provision is to make explicit that the term ‘‘pasteurization’’ is available to describe a food 

safety effect, regardless of the technology or process employed to 

achieve that result. Currently, regulations regarding milk and egg 

products recognize that technologies other than thermal treatment 

may achieve a food safety effect equivalent to pasteurization and, 

therefore, employ the term in product labeling. This provision provides for FDA to receive pre-market notification of the basis for use 

of this provision. Enactment of this provision should not be construed as a basis for regulatory action against any products that 

have borne the term ‘‘pasteurization’’ in a truthful and non-misleading manner prior to enactment of the provision or bear the 

term ‘‘pasteurization’’ under other authority. Further, nothing in 

this provision mandates that products not required to be labeled, 

as ‘‘pasteurized’’ presently is required to be labeled as ‘‘pasteurized’’

solely for the fact that they could be labeled as ‘‘pasteurized’’ under 

this provision. 

The Managers encourage the Secretary in consultation with 

the Secretary of Health and Human Services, to pursue a comparable pasteurization labeling program for meat and poultry products. Such labeling could allow use of the term pasteurization for 

meat and poultry products treated by similar processing technologies such as irradiation. 

(74) Report on Pouched and Canned Salmon 

The Senate amendment requires the Secretary not later than 

120 days after enactment to submit to Congress a report on efforts 

to expand the promotion, marketing, and purchasing of pouched 

and canned salmon harvested and processed in the U.S. under food 

and nutrition programs administered by the Secretary. (Sec. 1081) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to increase the required amount of time for the report 

to be completed from 120 to 180 days. (Sec. 10902) 

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(75) Tobacco Settlement Agreement Report 

The Senate amendment requires the Comptroller General of 

the U.S. to submit to Congress not later than December 31, 2002 

and annually thereafter through 2006, a report that describes all 

programs and activities that States have carried out using funds 

received under all phases of the Master Settlement Agreement of 

1997. (Sec. 1082) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision. (Sec. 

10908) 

(76) Report on GM Pest Protected Plants 

The Senate amendment requires the Secretary to report to the 

House and Senate Agriculture Committees within 90 days of enactment on the actions taken by USDA to implement recommendations made by the Committee on Genetically Modified Pest-Protected Plants of the Board on Agriculture and Natural Resources 

of the National Research Council in 2000 regarding food safety, ecological research, and monitoring needs for transgenic crops with 

plant incorporated protectants; and regarding enhancements to certain operational aspects of the regulatory framework for agricultural biotechnology, including improving coordination and enhanced consistency of review across regulatory agencies and clarifying the regulatory jurisdiction of APHIS. (Sec. 1083) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment accepting the Sense of the Congress provision of Senate Sec. 1083 and dropping remaining provisions. (Sec. 7410) 

(77) Study of Creation of Litter Bank by University of Arkansas 

The Senate amendment directs the Secretary to conduct a 

study to evaluate the creation of a litter bank by USDA at the University of Arkansas for the purpose of enhancing health and viability of watersheds in areas with large concentrations of animal producing units and report the results of the study to Congress. (Sec. 

1084) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment changing the reference from ‘‘litter bank’’ to ‘‘nutrient 

banking,’’ deleting any reference to a particular institution, and 

providing the Secretary with discretion to carry out a study under 

this section. (Sec. 7411) 

(78) Study of Feasibility of Producer Indemnification From Government-Caused Disasters 

The Senate Amendment requires the Secretary of Agriculture 

to conduct a study of the feasibility of expanding eligibility for crop 

insurance under the Federal Crop Insurance Act and noninsured 

crop assistance under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 to agricultural producers experiencing disaster conditions caused primarily by Federal agency action. (Sec. 1085) 

The House bill contains no comparable provision. 

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The Conference substitute adopts the Senate provision with an 

amendment to clarify that the feasibility study shall focus on disaster conditions caused by Federal agency action restricting access 

to irrigation water, including any lack of access to an adequate 

supply of water caused by failure by the Secretary of the Interior 

to fulfill a contract in accordance with the Central Valley Project 

Improvement Act. (Sec. 10108) 

The Managers expect the study to include losses to farmers 

due to regulatory actions or inactions, which result in failure to 

meet water delivery targets as specified under the Calfed Record 

of Decision for agriculture service contractors who receive water 

from the Central Valley Project. 

(79) Report on the Sale and Use of Pesticides for Agricultural Uses 

The Senate amendment directs the Administrator to submit to 

Congress a report on the manner in which the Agency is applying 

regulations of the Agency governing the sale and use of pesticides 

for agricultural use to electronic transactions. (Sec. 1086) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to increase the required amount of time for the report 

to be completed from 120 to 180 days. (Sec. 10909) 

(80) Report on Birds, Rats and Mice 

The Senate amendment requires a GAO report on the implications of including birds, rats, and mice in the definition of ‘‘animal’’

under USDA’s regulations under the Animal Welfare Act. (Sec. 

1087) 

The House bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment for the National Research Council to submit this report to Congress. The report shall be completed with input from 

the Secretary of Agriculture, the Secretary of Health and Human 

Services and the Institute for Animal Laboratory Research. It shall 

contain an estimate of the number and types of entities that use 

rats, mice and birds for research purposes, and a description of the 

regulations to which these are subjected. It shall also contain an 

estimate of the rats, mice and birds used in research facilities and 

an indication of which of those facilities are currently under federal 

regulation. Further, the report shall include an estimate of the additional costs likely to be incurred by researchers resulting from 

additional regulations, recommendations for minimizing such costs, 

an estimate of the additional funding APHIS would require to ensure compliance, and recommendations for minimizing the regulatory burden on facilities already subject to federal regulations. 

(Sec. 10304) 

(81) Task Force on National Institutes for Plant and Animal 

Sciences 

The Senate amendment requires the Secretary not later than 

90 days after enactment to establish a task force of 8 members (6 

of them private or academic sector) to study review and evaluate 

publicly funded agricultural research activities and consider the 

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merits of establishing 1 or more National Institutes for Plant and 

Agricultural Sciences similar to NIH. (Sec. 1088) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(82) Organic Products Promotion 

The Senate Amendment authorizes the establishment of a new 

organic research and promotion check off program, which must be 

proposed and approved by a majority of certified organic producers 

and handlers. This provision is designed to facilitate the establishment of one order covering a category of products (organic products) rather than individual commodities, requires that the composition of the check off board must reflect both regional distribution and differing scales of organic production, and requires the 

Secretary to conduct a referendum on whether the order should 

continue at least once every four years. Assessments under an 

order established under this provision would be voluntary (at the 

option of individual farmers). To avoid having farmers paying more 

than one check off assessment, the provision provides that producers choosing to contribute to the organic order would be entitled 

to a credit against assessments under another order. (Sec. 1091– 1098G) 

The House Bill contains no comparable provision. 

The Conference substitute adopts the Senate provision with an 

amendment to allow a person that produces and markets only 

100% organic products and does not produce any conventional or 

non-organic products, to be exempt from the payment of an assessment under a commodity promotion law with respect to any agricultural commodity that is produced on a certified organic farm. 

The Secretary shall promulgate regulations, not later than one year 

after the date of enactment of this Act, regarding eligibility and 

compliance for such an exemption. (Sec. 10607) 

(83) Effect of Amendments 

The Senate amendment provides that amendments made by 

the Act do not affect Secretarial authority to carry out current price 

support or production adjustment programs as in effect before the 

date of enactment. (Sec. 1099A) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate amendment. 

(84) CCC Funding 

The Senate amendment specifies that notwithstanding any 

other provision of the bill, any funds made available under the bill 

will be made available through the Commodity Credit Corporation. 

(Sec. 1099B) 

The House bill contains no comparable provision. 

The Conference substitute deletes the Senate provision. 

(85) Implementation Funding and Information Management 

The Conference Substitute provides $55 million for administrative costs associated with the implementation of Title I. Of that 

amount, not less than $5 million nor more than $8 million is to be 

available for the development of a comprehensive information manVerDate Apr 18 2002 05:23 May 04, 2002 Jkt 079340 PO 00000 Frm 00688 Fmt 6604 Sfmt 6601 E:\HR\OC\HR424.XXX pfrm20 PsN: HR424
685

agement system for programs operated by the Farm Service Agency 

and the Federal Crop Insurance Corporation. The Conference Substitute requires that the Secretary enter into agreements or contracts with outside entities to development information management system. The Conference Substitute also provides that the new 

requirements shall not interfere with or delay existing agreements 

or requests for proposals of the agencies regarding data mining or 

data warehousing. Such sums as may be necessary are authorized 

to be appropriated for each of fiscal years 2003 through 2008. (Sec. 

10706) 

The Managers continue to be concerned about the lack of information sharing and progress toward a common information management system for the service agencies of the Department. The 

Managers believe that integrating information management systems at USDA will reduce the waste associated with the maintenance of duplicative systems and allow the agencies to operate 

more effectively and efficiently to the benefit of agricultural producers. 

In the Agricultural Risk Protection Act of 2000 (ARPA), the 

Farm Service Agency (FSA) and the Federal Crop Insurance Corporation (Corporation) were required to reconcile producer information. FSA and the Corporation serve the same producers with commodity and crop insurance programs, respectively; it is logical that 

both agencies should use a common information management system so that the collection of data is not duplicated, the integrity 

of the data collected is improved and, most importantly, customer 

service to producers is enhanced. The Managers believe that the 

development of a common information management system for FSA 

and the Corporation will demonstrate substantial efficiencies and 

serve as a first step toward broader, Department-wide integration. 

Valuable groundwork will be laid for further modernization of information technology systems of USDA agencies in the future, and 

for the incorporation of those systems into that developed for FSA 

and the Corporation. 

The Managers commend the work being done at the Center for 

Agribusiness Excellence at Tarleton State University in cooperation 

with the Corporation on crop insurance compliance as directed by 

ARPA. It is the expectation of the Managers that the Secretary of 

Agriculture will build upon the work currently being conducted at 

the Center for Agribusiness Excellence and through further contracting with the Center to develop the information management 

system for FSA and the Corporation. 

The Managers intend for funds provided to the Farm Service 

Agency under this Section to be used for salaries and expenses of 

county office personnel in implementing this Act.

From the Committee on Agriculture, for consideration of 

the House bill and the Senate amendment, and modifications committed to conference: 

LARRY COMBEST, 

BOB GOODLATTE, 

RICHARD POMBO, 

TERRY EVERETT, 

FRANK D. LUCAS, 

SAXBY CHAMBLISS, 

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JERRY MORAN, CHARLES W. STENHOLM, GARY CONDIT, COLLIN C. PETERSON, EVA M. CLAYTON, TIM HOLDEN, As additional conferees from the Committee on the Budget, 

for consideration of sec. 197 of the Senate amendment, and 

modifications committed to conference: 

JIM NUSSLE, From the Committee on Education and the Workforce, for 

consideration of secs. 453–5, 457–9, 460–1, and 464 of the 

Senate amendment, and modifications committed to conference: 

MICHAEL N. CASTLE, TOM OSBORNE, DALE E. KILDEE, From the Committee on Energy and Commerce, for consideration of secs. 213, 605, 627, 648, 652, 902, 1041, and 

1079E of the Senate amendment, and modifications committed to conference: 

BILLY TAUZIN, JOE BARTON, JOHN D. DINGELL, From the Committee on Financial Services, for consideration of secs. 335 and 601 of the Senate amendment, and 

modifications committed to conference: 

MICHAEL G. OXLEY, SPENCER BACHUS, JOHN J. LAFALCE

(except for sec. 335), 

From the Committee on International Relations, for consideration of title III of the House bill and title III of the 

Senate amendment, and modifications committed to conference: 

HENRY HYDE, CHRISTOPHER SMITH, TOM LANTOS, From the Committee on the Judiciary, for consideration of 

secs. 940–1 of the House bill and secs. 602, 1028–9, 1033– 5, 1046, 1049, 1052–3, 1058, 1068–9, 1070–1, 1098, and 

1098A of the Senate amendment, and modifications committed to conference: 

MARK GREEN, 

From the Committee on Resources, for consideration of 

secs. 201, 203, 211, 213, 215–7, 262, 721, 786, 806, 810, 

817–8, 1069, 1070, and 1076 of the Senate amendment, 

and modifications committed to conference: 

JAMES V. HANSEN, DON YOUNG, From the Committee on Science, for consideration of secs. 

808, 811, 902–3, and 1079 of the Senate amendment, and 

modifications committed to conference: 

SHERWOOD BOEHLERT, 

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ROSCOE G. BARTLETT, RALPH M. HALL, From the Committee on Ways and Means, for consideration of secs. 127 and 146 of the House bill and sections 

144, 1024, 1038, and 1070 of the Senate amendment, and 

modifications committed to conference: 

CHARLES B. RANGEL, Managers on the Part of the House.

TOM HARKIN, 

PATRICK LEAHY, 

KENT CONRAD, 

TOM DASCHLE, 

THAD COCHRAN, 

Managers on the Part of the Senate.

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