PUBLIC LAW 107–171—MAY 13, 2002

FARM SECURITY AND RURAL INVESTMENT

ACT OF 2002

116 STAT. 134 PUBLIC LAW 107–171—MAY 13, 2002

Public Law 107–171

107th Congress

An Act

To provide for the continuation of agricultural programs through fiscal year 2007,

and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

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.

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.

7 USC 7901 note.

Farm Security

and Rural

Investment Act

of 2002.

May 13, 2002

[H.R. 2646]

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 135

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.

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.

116 STAT. 136 PUBLIC LAW 107–171—MAY 13, 2002

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.

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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 137

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.

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.

116 STAT. 138 PUBLIC LAW 107–171—MAY 13, 2002

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.

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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 139

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.

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.

116 STAT. 140 PUBLIC LAW 107–171—MAY 13, 2002

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.

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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 141

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.

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.

116 STAT. 142 PUBLIC LAW 107–171—MAY 13, 2002

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.

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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 143

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).

(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 ‘‘countercyclical 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

7 USC 7901.

116 STAT. 144 PUBLIC LAW 107–171—MAY 13, 2002

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 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

7 USC 7911.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 145

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.— (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

116 STAT. 146 PUBLIC LAW 107–171—MAY 13, 2002

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).

(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 COMMODITIES.—

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 ACREAGE.—

(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:

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 147

(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 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:

116 STAT. 148 PUBLIC LAW 107–171—MAY 13, 2002

(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).

(e) OPPORTUNITY TO PARTIALLY UPDATE YIELDS USED TO DETER- MINE 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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 149

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:

(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.

7 USC 7913.

116 STAT. 150 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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:

7 USC 7914.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 151

(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.

(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—

116 STAT. 152 PUBLIC LAW 107–171—MAY 13, 2002

(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).

(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 COUNTERCYCLICAL 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

7 USC 7915.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 153

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 base acres for which direct payments or countercyclical 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).

7 USC 7916.

116 STAT. 154 PUBLIC LAW 107–171—MAY 13, 2002

(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 doublecropping 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 countercyclical 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.

7 USC 7917.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 155

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.

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 REQUIRE- MENTS.—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 USC 7932.

7 USC 7931.

7 USC 7918.

116 STAT. 156 PUBLIC LAW 107–171—MAY 13, 2002

(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, $0.0960 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;

7 USC 7934.

7 USC 7933.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 157

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

(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

UPLAND 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.

Regulations.

116 STAT. 158 PUBLIC LAW 107–171—MAY 13, 2002

(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.

7 USC 7935.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 159

(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,

7 USC 7936.

116 STAT. 160 PUBLIC LAW 107–171—MAY 13, 2002

barley, 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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 161

(d) PROHIBITION ON CROP INSURANCE INDEMNITY OR NON- INSURED 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

(C) TRANSFERS.—Marketing certificates issued to

domestic users and exporters of upland cotton may be

7 USC 7937.

116 STAT. 162 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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).

Deadlines.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 163

(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);

(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

116 STAT. 164 PUBLIC LAW 107–171—MAY 13, 2002

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 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),

7 USC 7938.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 165

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.

(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

7 USC 7939.

116 STAT. 166 PUBLIC LAW 107–171—MAY 13, 2002

(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 ‘‘countercyclical 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

(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

7 USC 7951.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 167

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 PEANUT 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 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.

7 USC 7952.

116 STAT. 168 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 169

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.).

(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.

116 STAT. 170 PUBLIC LAW 107–171—MAY 13, 2002

(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

payments 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 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

Deadline.

7 USC 7953.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 171

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

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 countercyclical 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.

7 USC 7954.

116 STAT. 172 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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).

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 173

(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.

SEC. 1305. PRODUCER AGREEMENT REQUIRED AS CONDITION ON

PROVISION OF DIRECT PAYMENTS AND COUNTERCYCLICAL 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.);

7 USC 7955.

116 STAT. 174 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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.

7 USC 7956.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 175

(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 doublecropping 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 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

7 USC 7957.

116 STAT. 176 PUBLIC LAW 107–171—MAY 13, 2002

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).

(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 177

(2) GOOD FAITH EXCEPTION TO BENEFICIAL INTEREST

REQUIREMENT.—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 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

116 STAT. 178 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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.

7 USC 7958.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 179

(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.

(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

7 USC 7959.

116 STAT. 180 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 181

(3) EFFECT OF AGREEMENT FOR PERMANENT QUOTA

TRANSFER.—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 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.—

116 STAT. 182 PUBLIC LAW 107–171—MAY 13, 2002

(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,’’.

(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

7 USC 7960.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 183

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 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.—

116 STAT. 184 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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.—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 185

‘‘(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

‘‘(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 inprocess 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.

116 STAT. 186 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

subparagraph (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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 187

‘‘(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 domestically-produced sugarcane and sugar beets to construct or upgrade

storage and handling facilities for raw sugars and refined sugars.

(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:

7 USC 7971.

7 USC 7272 note.

116 STAT. 188 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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

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).

Deadline.

7 USC 1359bb.

7 USC 1359aa.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 189

‘‘(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 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.

7 USC 1359cc.

116 STAT. 190 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

paragraph (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.—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 191

‘‘(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

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;

7 USC 1359dd.

116 STAT. 192 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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, efficient 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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 193

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

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).

116 STAT. 194 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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—

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 195

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 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

116 STAT. 196 PUBLIC LAW 107–171—MAY 13, 2002

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 ALLOCATION.—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 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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 197

‘‘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 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

7 USC 1359ee.

116 STAT. 198 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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

Deadline.

Deadlines.

7 USC 1359ff.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 199

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 sugarcane-producing 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 peracre yield 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

116 STAT. 200 PUBLIC LAW 107–171—MAY 13, 2002

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 one-half 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 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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 201

‘‘(B) INCREASED ALLOCATION FOR PROCESSING COM- PANY.—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 be redistributed to other farms, but no acreage

base history for purposes 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—

7 USC 1359gg.

Deadline.

116 STAT. 202 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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.

7 USC 1359ii.

7 USC 1359hh.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 203

‘‘(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 ALLOCA- TIONS.—‘‘(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—

‘‘(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

7 USC 1359jj.

116 STAT. 204 PUBLIC LAW 107–171—MAY 13, 2002

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

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.’’.

7 USC 1359kk.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 205

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.

(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.

7 USC 7982.

7 USC 7981.

116 STAT. 206 PUBLIC LAW 107–171—MAY 13, 2002

(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 program under section 805 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. 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

Contracts.

Deadline.

Contracts.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 207

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: ‘‘(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.’’.

116 STAT. 208 PUBLIC LAW 107–171—MAY 13, 2002

(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

‘‘(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.’’.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 209

(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

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

OBLIGATIONS.—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

OBLIGATIONS.—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.’’.

116 STAT. 210 PUBLIC LAW 107–171—MAY 13, 2002

(h) CONFORMING AMENDMENTS TO REFLECT ADDITION OF

IMPORTERS.—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)’’.

(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.

Deadline.

7 USC 7983.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 211

(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.

(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’’);

Regulations.

Deadline.

7 USC 7991.

Deadline.

7 USC 7984.

116 STAT. 212 PUBLIC LAW 107–171—MAY 13, 2002

(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 countercyclical 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.

(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

7 USC 7992.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 213

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: ‘‘(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

116 STAT. 214 PUBLIC LAW 107–171—MAY 13, 2002

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 DEFI- CIENCY 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.’’.

(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)—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 215

(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.

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

7 USC 1308–3a.

116 STAT. 216 PUBLIC LAW 107–171—MAY 13, 2002

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 indirect 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.

7 USC 7993.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 217

(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.

(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

Deadline.

Deadline.

Deadline.

116 STAT. 218 PUBLIC LAW 107–171—MAY 13, 2002

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’’.

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 places 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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 219

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.

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

7 USC 7996.

7 USC 7995.

Deadline.

7 USC 7994.

116 STAT. 220 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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 CONSERVATIONISTS.—

(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—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 221

(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 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.

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116 STAT. 222 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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).

7 USC 8000.

7 USC 7999.

7 USC 7998.

7 USC 7997.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 223

(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).

(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

16 USC 3838.

7 USC 8001.

116 STAT. 224 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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).

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 225

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). ‘‘(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

16 USC 3838a.

116 STAT. 226 PUBLIC LAW 107–171—MAY 13, 2002

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 longterm 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

‘‘(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 227

‘‘(3) USE OF HANDBOOK AND GUIDES; STATE AND LOCAL CON- SERVATION 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 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 soildepleting 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)—

116 STAT. 228 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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,

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 229

without the modification of the contract, significantly

interfere with achieving the purposes of the conservation security program. ‘‘(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 CON- TROL OF PRODUCERS.—The Secretary shall include in the conservation security contract a provision, and may permit modification

116 STAT. 230 PUBLIC LAW 107–171—MAY 13, 2002

of a conservation security contract under subsection (e)(1), to 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, in the case of a beginning farmer or rancher,

90 percent) of the average county costs of practices

16 USC 3838c.

16 USC 3838b.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 231

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, 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

116 STAT. 232 PUBLIC LAW 107–171—MAY 13, 2002

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.

‘‘(d) REGULATIONS.—The Secretary shall promulgate regulations

that—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 233

‘‘(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

local agencies, Indian tribes, and nongovernmental organizations and to designate special projects, as recommended by

the State Conservationist, after consultation with the State

Deadline.

16 USC 3838

note.

Deadline.

116 STAT. 234 PUBLIC LAW 107–171—MAY 13, 2002

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.

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 235

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.

‘‘(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.—

16 USC 3844.

116 STAT. 236 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.’’.

(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:

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 237

‘‘(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’’;

(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:

Deadline.

16 USC 3801

note.

116 STAT. 238 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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

‘‘(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

16 USC 3831.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 239

‘‘(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

under this subchapter prior to October 1, 1990, the Secretary 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.

116 STAT. 240 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

BUFFER 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—

‘‘(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 241

‘‘(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

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

Deadline.

116 STAT. 242 PUBLIC LAW 107–171—MAY 13, 2002

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 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,

16 USC 3832.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 243

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

‘‘(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

116 STAT. 244 PUBLIC LAW 107–171—MAY 13, 2002

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—

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 245

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— ‘‘(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

16 USC 3834.

16 USC 3833.

116 STAT. 246 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 247

‘‘(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

‘‘(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

116 STAT. 248 PUBLIC LAW 107–171—MAY 13, 2002

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 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 PROGRAM.—

‘‘(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 249

‘‘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

‘‘(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.

16 USC 3835.

116 STAT. 250 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 251

‘‘(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.

‘‘(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).’’.

16 USC 3835a.

116 STAT. 252 PUBLIC LAW 107–171—MAY 13, 2002

(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

(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).

16 USC 3831

note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 253

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; ‘‘(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.

16 USC

3839aa–1.

16 USC 3839aa.

116 STAT. 254 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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, permanent 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—

16 USC

3839aa–2.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 255

‘‘(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 addition 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.

116 STAT. 256 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(g) ALLOCATION OF FUNDING.—For each of fiscal years 2002

through 2007, 60 percent of the funds made available for costshare 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

‘‘(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

16 USC

3839aa–5.

16 USC

3839aa–4.

16 USC

3839aa–3.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 257

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.

‘‘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

16 USC

3839aa–9.

16 USC

3839aa–8.

16 USC

3839aa–7.

16 USC

3839aa–6.

116 STAT. 258 PUBLIC LAW 107–171—MAY 13, 2002

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

‘‘(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;

16 USC 3838n.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 259

‘‘(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

‘‘(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.

16 USC 3838o.

116 STAT. 260 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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—

‘‘(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).

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 261

‘‘(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—

‘‘(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

16 USC 3838p.

116 STAT. 262 PUBLIC LAW 107–171—MAY 13, 2002

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.

‘‘(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.’’.

Deadline.

16 USC 3838q.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 263

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;

‘‘(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.’’.

116 STAT. 264 PUBLIC LAW 107–171—MAY 13, 2002

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; ‘‘(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—

16 USC 3839bb.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 265

‘‘(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.

‘‘(2) PROGRAM ELEMENTS.—

‘‘(A) FUNDING.—If funding is provided to carry out

this section, it shall be provided through a specific lineitem 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—

116 STAT. 266 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 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.

Establishment.

16 USC

3839bb–1.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 267

‘‘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’). ‘‘(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;

16 USC 3838h.

16 USC

3839bb–3.

16 USC

3839bb–2.

116 STAT. 268 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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;

‘‘(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

16 USC 3838i.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 269

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.—

(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:

16 USC 3830

note.

16 USC 3838j.

116 STAT. 270 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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. ‘‘(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

16 USC 3451.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 271

‘‘(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—

‘‘(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

116 STAT. 272 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘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

16 USC 3455.

16 USC 3454.

16 USC 3453.

Establishment.

16 USC 3452.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 273

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.

‘‘(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.

Deadline.

16 USC 3457.

16 USC 3456.

116 STAT. 274 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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: ‘‘(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 FOUNDA- TION.—

16 USC 5805.

16 USC 3460.

16 USC 3459.

16 USC 3458.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 275

‘‘(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— ‘‘(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.—

16 USC 3801

note.

16 USC 3801

note.

43 USC 2211

note.

116 STAT. 276 PUBLIC LAW 107–171—MAY 13, 2002

(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 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.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 277

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;

(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.

16 USC 3801

note.

16 USC 3801

note.

116 STAT. 278 PUBLIC LAW 107–171—MAY 13, 2002

(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.

‘‘(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

16 USC 3841.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 279

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 ‘‘(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.

Deadline.

16 USC 3801

note.

Deadline.

16 USC 3842.

116 STAT. 280 PUBLIC LAW 107–171—MAY 13, 2002

(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.

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.—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 281

‘‘(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 ‘‘(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’’;

Deadline.

Deadline.

Deadline.

116 STAT. 282 PUBLIC LAW 107–171—MAY 13, 2002

(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’’.

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.—

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 283

‘‘(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.’’.

SEC. 3008. ASSISTANCE FOR STOCKPILING AND RAPID TRANSPORTATION, DELIVERY, AND DISTRIBUTION OF SHELFSTABLE 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:

Deadline.

116 STAT. 284 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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:

‘‘(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

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 285

(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)— (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

116 STAT. 286 PUBLIC LAW 107–171—MAY 13, 2002

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 farmerto-farmer 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),

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—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 287

‘‘(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 CARIB- BEAN 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— ‘‘(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

116 STAT. 288 PUBLIC LAW 107–171—MAY 13, 2002

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—

‘‘(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.’’.

7 USC 5607.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 289

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

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—

116 STAT. 290 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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— ‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 291

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 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—

116 STAT. 292 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(A) the government of an emerging agricultural

country; ‘‘(B) an intergovernmental organization;

‘‘(C) a private voluntary organization;

‘‘(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’’;

(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:

7 USC 1736.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 293

‘‘(5) NO EFFECT ON DOMESTIC PROGRAMS.—The President

shall not make an eligible commodity available for disposition

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

ELIGIBLE 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

ELIGIBLE 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.’’.

Deadline.

President.

116 STAT. 294 PUBLIC LAW 107–171—MAY 13, 2002

(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

TERMINATION 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

EXPENSES.—’’;

(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 internal procedures designed to streamline, improve,

Deadline.

President.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 295

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—

(A)(i) the cost of acquiring agricultural commodities;

7 USC 1736o–1.

Deadline.

116 STAT. 296 PUBLIC LAW 107–171—MAY 13, 2002

(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

(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.

President.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 297

(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 schoolage 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;

(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

President.

116 STAT. 298 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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.

President.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 299

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;

‘‘(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;

Deadline.

Deadline.

Federal Register,

publication.

Deadline.

116 STAT. 300 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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.

7 USC 5679.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 301

‘‘(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—

(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.

Deadline.

Deadline.

7 USC 5603a.

7 USC 5680.

116 STAT. 302 PUBLIC LAW 107–171—MAY 13, 2002

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

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

Deadline.

7 USC 5693 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 303

$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;

(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—

116 STAT. 304 PUBLIC LAW 107–171—MAY 13, 2002

(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

(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—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 305

(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.—

‘‘(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

7 USC 2011 note.

Food Stamp

Reauthorization

Act of 2002.

116 STAT. 306 PUBLIC LAW 107–171—MAY 13, 2002

(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’’.

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—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 307

‘‘(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 RESTRIC- TIONS.—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.— ‘‘(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)—

116 STAT. 308 PUBLIC LAW 107–171—MAY 13, 2002

(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 excluded 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.’’.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 309

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

INCOME.—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.).

(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

Deadline.

7 USC 2016 note.

116 STAT. 310 PUBLIC LAW 107–171—MAY 13, 2002

(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 EBTsystem 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.—

‘‘(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).

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 311

‘‘(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 FACILITIES.—

‘‘(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

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

116 STAT. 312 PUBLIC LAW 107–171—MAY 13, 2002

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

‘‘(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:

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 313

‘‘(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 ‘‘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 pointof-sale devices and is operating in an area in which an electronic

benefit transfer system described in section 7(i) has been implemented.’’.

116 STAT. 314 PUBLIC LAW 107–171—MAY 13, 2002

(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.

‘‘(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.—

7 USC 2020 note.

7 USC 2019 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 315

‘‘(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.

‘‘(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;

116 STAT. 316 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

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 ADMINISTRA- TIVE 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

7 USC 2023 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 317

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 established 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

116 STAT. 318 PUBLIC LAW 107–171—MAY 13, 2002

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 atrisk 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.— ‘‘(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 PREVAILING 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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 319

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).’’;

(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)’’;

Regulations.

116 STAT. 320 PUBLIC LAW 107–171—MAY 13, 2002

(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 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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 321

(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 MEM- BERS.—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.

(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.—

7 USC 2025 note.

7 USC 2022 note.

116 STAT. 322 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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—

‘‘(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 PAY- MENTS.—A State agency shall not be eligible for a performance

bonus payment with respect to any fiscal year for which the

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 323

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

(3) by striking subparagraphs (E) through (G) and inserting

the following:

‘‘(E) ADDITIONAL ALLOCATIONS FOR STATES THAT

ENSURE 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

7 USC 2025 note.

7 USC 2025 note.

116 STAT. 324 PUBLIC LAW 107–171—MAY 13, 2002

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’’.

(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:

7 USC 2026 note.

7 USC 2015 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 325

‘‘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

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

116 STAT. 326 PUBLIC LAW 107–171—MAY 13, 2002

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)’’;

(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 COMMUNITY 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

Contracts.

7 USC 2028 note.

7 USC 2028 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 327

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;

‘‘(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.

7 USC 2034 note.

Deadline.

116 STAT. 328 PUBLIC LAW 107–171—MAY 13, 2002

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.—

‘‘(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.’’;

7 USC 2036 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 329

(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.).’’. (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

7 USC 612c note.

7 USC 612c note.

116 STAT. 330 PUBLIC LAW 107–171—MAY 13, 2002

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.

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 ALLOW- ANCES.—For each of fiscal years 2002 and 2003, the amount

of a basic allowance provided under section 403 of title 37,

42 USC 1755

note.

7 USC 612c note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 331

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 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).’’.

42 USC 1758

note.

116 STAT. 332 PUBLIC LAW 107–171—MAY 13, 2002

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.

‘‘(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

Deadline.

42 USC 1786

note.

42 USC 1769

note.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 333

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

‘‘(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 CHILDREN.—

(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:

7 USC 2014 note.

Applicability.

42 USC 1786

note.

116 STAT. 334 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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— (1) to provide resources in the form of fresh, nutritious,

unprepared, locally grown fruits, vegetables, and herbs from

farmers’ 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;

7 USC 3171 note.

7 USC 3007.

8 USC 1612 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 335

(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.

(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’’).

Congressional

Hunger Fellows

Act of 2002.

2 USC 1161.

116 STAT. 336 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 337

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.

(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.

116 STAT. 338 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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’’.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 339

(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:

(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).

116 STAT. 340 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 341

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

considers 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

2 USC 1161 note.

Deadline.

116 STAT. 342 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(ii) funds for direct farm ownership loans under

section 346(b) were not available at the time at which

the application was approved.’’.

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 OPER- ATIONS 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

7 USC 1936.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 343

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

comparable 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.

Effective date.

Termination

date.

7 USC 1949 note.

Deadline.

116 STAT. 344 PUBLIC LAW 107–171—MAY 13, 2002

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—

(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’’.

7 USC 1922 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 345

(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— (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—

7 USC 1981 note.

116 STAT. 346 PUBLIC LAW 107–171—MAY 13, 2002

(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

Secretary 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—

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PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 347

‘‘(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

‘‘(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.—

116 STAT. 348 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 349

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.).’’.

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).

7 USC 2008l.

7 USC 2008k.

116 STAT. 350 PUBLIC LAW 107–171—MAY 13, 2002

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:

‘‘(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 ENTERPRISEGUARANTEED 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—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 351

(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

(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 Enterpriseguaranteed 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,’’.

12 USC 2020

note.

116 STAT. 352 PUBLIC LAW 107–171—MAY 13, 2002

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 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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 353

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).

‘‘(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 PRO- GRAM.—

116 STAT. 354 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 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.’’.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 355

SEC. 6007. LOAN GUARANTEES FOR CERTAIN RURAL DEVELOPMENT

LOANS.

(a) LOAN GUARANTEES FOR WATER, WASTEWATER, AND ESSEN- TIAL 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.—

‘‘(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

Regulation.

7 USC 1926.

116 STAT. 356 PUBLIC LAW 107–171—MAY 13, 2002

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.’’.

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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 357

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

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:

116 STAT. 358 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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:

7 USC 1926e

note.

7 USC 1926e.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 359

‘‘(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 nonFederal 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.—

116 STAT. 360 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 value-added

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

agricultural producers that are located within 80 miles

of the facility;

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 361

‘‘(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:

‘‘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

7 USC 1936a.

116 STAT. 362 PUBLIC LAW 107–171—MAY 13, 2002

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

‘‘(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:

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 363

‘‘(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

ORGANIZATIONS; 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.

(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:

7 USC 2009 note.

116 STAT. 364 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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

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.—

Establishment.

7 USC 2008m.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 365

‘‘(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 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.

116 STAT. 366 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 367

‘‘(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 DEVELOPMENT

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 Committee 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).

116 STAT. 368 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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;

‘‘(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

Grants.

7 USC 2008n.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 369

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)—

‘‘(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.

116 STAT. 370 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

‘‘(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.

7 USC 2008o.

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PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 371

‘‘(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 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

7 USC 2008p.

116 STAT. 372 PUBLIC LAW 107–171—MAY 13, 2002

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 communitybased 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.

(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)’’.

7 USC 2008q.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 373

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

‘‘(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—

Effective date.

Effective date.

Termination

date.

116 STAT. 374 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 valueadded 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,’’.

7 USC 2008r.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 375

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 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—

7 USC 2009bb–1.

7 USC 2009bb.

116 STAT. 376 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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,

Deadline.

President.

President.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 377

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;

‘‘(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

116 STAT. 378 PUBLIC LAW 107–171—MAY 13, 2002

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 non-Federal 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—

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 379

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.

‘‘(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.—

116 STAT. 380 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 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);

7 USC 2009bb–2.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 381

‘‘(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.

‘‘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.—

7 USC 2009bb–3.

116 STAT. 382 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

Economic 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

7 USC 2009bb–4.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 383

‘‘(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 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 communitybased 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

116 STAT. 384 PUBLIC LAW 107–171—MAY 13, 2002

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.

‘‘(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.

Deadline.

7 USC 2009bb–5.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 385

‘‘(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 PUBLIC

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.—

‘‘(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;

7 USC 2009bb–7.

7 USC 2009bb–6.

116 STAT. 386 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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.

7 USC

2009bb–10.

7 USC 2009bb–9.

7 USC 2009bb–8.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 387

‘‘(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.

‘‘(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:

7 USC

2009bb–13.

7 USC

2009bb–12.

Deadline.

7 USC

2009bb–11.

116 STAT. 388 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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. ‘‘(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

7 USC 2009cc.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 389

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

‘‘(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

116 STAT. 390 PUBLIC LAW 107–171—MAY 13, 2002

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

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 391

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.

‘‘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—

7 USC 2009cc–3.

7 USC 2009cc–2.

7 USC 2009cc–1.

116 STAT. 392 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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—

Deadline.

Reports.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 393

‘‘(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). ‘‘(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

7 USC 2009cc–5.

Applicability.

7 USC 2009cc–4.

116 STAT. 394 PUBLIC LAW 107–171—MAY 13, 2002

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.

‘‘(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.

Applicability.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 395

‘‘(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

‘‘(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.

7 USC 2009cc–7.

7 USC 2009cc–6.

116 STAT. 396 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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;

‘‘(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

7 USC 2009cc–8.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 397

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

‘‘(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.).

7 USC 2009cc–9.

116 STAT. 398 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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.— ‘‘(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

7 USC

2009cc–10.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 399

‘‘(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

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.—

7 USC

2009cc–12.

7 USC

2009cc–11.

116 STAT. 400 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 considers 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.

7 USC

2009cc–14.

7 USC

2009cc–13.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 401

‘‘(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 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.

7 USC

2009cc–17.

7 USC

2009cc–16.

7 USC

2009cc–15.

116 STAT. 402 PUBLIC LAW 107–171—MAY 13, 2002

‘‘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 guaran- teeing $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:

‘‘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.

7 USC 2009dd–1.

7 USC 2009dd.

7 USC

2009cc–18.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 403

‘‘(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—

‘‘(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—

7 USC 2009dd–2.

116 STAT. 404 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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, nonvoting member of a Regional Board representing the

agency.

‘‘(ii) CONFLICTS.—Participation by a Federal officer

or employee in activities of the Regional Board shall

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.

Reports.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 405

‘‘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—

‘‘(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.

7 USC 2009dd–3.

116 STAT. 406 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 ex-officio, 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 incurred

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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 407

‘‘(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; ‘‘(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.

7 USC 2009dd–5.

7 USC 2009dd–4.

116 STAT. 408 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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;

‘‘(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

7 USC 2009dd–6.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 409

‘‘(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.

‘‘(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—

116 STAT. 410 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 411

‘‘(k) TRANSFERS.—To ensure maximum use of funds provided

under this subtitle, the National Board may transfer not more

than 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

Deadline.

President.

President.

Deadline.

7 USC 2009dd–7.

116 STAT. 412 PUBLIC LAW 107–171—MAY 13, 2002

to the President a report that contains the findings and recommendations of the Conference, including findings and recommendations to address needs related to— ‘‘(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

Deadline.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 413

for applications for loans and grants described in subsection

(b) that are pending on the date of enactment of this Act

only to 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—

7 USC 940c–1.

116 STAT. 414 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

shall provide the Secretary with an opinion regarding the

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 415

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 capacity to transmit data to enable a subscriber to the

Loans.

7 USC 950bb.

7 USC 940e.

7 USC 940c–1

note.

Deadline.

116 STAT. 416 PUBLIC LAW 107–171—MAY 13, 2002

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—

‘‘(A) in the case of a direct loan—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 417

‘‘(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—

Deadline.

116 STAT. 418 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

the funds in the Alternative Agricultural Research and

7 USC 5901 note.

Deadline.

7 USC 950bb

note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 419

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—

‘‘(A) the North Central Regional Center for Rural

Development;

7 USC 5923.

31 USC 9101.

5 USC 5315.

7 USC 5901 note.

116 STAT. 420 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

‘‘(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.—

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 421

‘‘(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).

(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

7 USC 2009ee.

Deadline.

116 STAT. 422 PUBLIC LAW 107–171—MAY 13, 2002

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—

(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.

Deadline.

7 USC 2009ee–1.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 423

(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.

(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.

Deadline.

Deadline.

116 STAT. 424 PUBLIC LAW 107–171—MAY 13, 2002

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—

‘‘(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

7 USC 2009ee–3.

Deadline.

7 USC 2009ee–2.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 425

‘‘(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 majoritycontrolled 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

‘‘(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

Deadline.

116 STAT. 426 PUBLIC LAW 107–171—MAY 13, 2002

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

(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—

Grants.

7 USC 1621 note.

Deadline.

Effective date.

7 USC 1621 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 427

(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, 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—

Establishment.

116 STAT. 428 PUBLIC LAW 107–171—MAY 13, 2002

(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

subsection (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 Agriculture 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—

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 429

(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 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

116 STAT. 430 PUBLIC LAW 107–171—MAY 13, 2002

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.—

(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.

7 USC 2655.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 431

(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;

(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;

116 STAT. 432 PUBLIC LAW 107–171—MAY 13, 2002

(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’’.

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’’

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 433

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’’.

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’’.

116 STAT. 434 PUBLIC LAW 107–171—MAY 13, 2002

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’’.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 435

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’’.

116 STAT. 436 PUBLIC LAW 107–171—MAY 13, 2002

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’’.

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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 437

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.

‘‘(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 ELIGIBLE

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.—

7 USC 301 note.

Deadline.

116 STAT. 438 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.’’.

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.—

Effective date.

Effective date.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 439

‘‘(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

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’’.

116 STAT. 440 PUBLIC LAW 107–171—MAY 13, 2002

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;

(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 DIVERSIFICATION.—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:

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 441

‘‘(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— (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

7 USC 7629.

116 STAT. 442 PUBLIC LAW 107–171—MAY 13, 2002

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;

(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 443

‘‘(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 VEGETABLES.—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.

‘‘(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

EXTENSION.—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.

116 STAT. 444 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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 markerassisted 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

DISABILITIES.—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, EDU- CATION, AND ECONOMIC ADVISORY BOARD.—Section 1408 of the

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 445

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

(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

116 STAT. 446 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(2) the Joe Skeen Institute for Rangeland Restoration

for the purposes of facilitating and expanding ongoing StateFederal 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.

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 447

consult with the Administrator of the Animal and Plant Health

Inspection Service and the National Agricultural Research, Extension, Education, and Economics Advisory Board. ‘‘(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.’’.

Deadline.

116 STAT. 448 PUBLIC LAW 107–171—MAY 13, 2002

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.’’.

Effective date.

Effective date.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 449

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—

Establishment.

7 USC 7657.

Effective date.

7 USC 3315a.

116 STAT. 450 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 (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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 451

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—

(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;

Deadline.

116 STAT. 452 PUBLIC LAW 107–171—MAY 13, 2002

(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 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

7 USC 3351.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 453

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

EXPANSION.—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—

‘‘(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.

Grants.

7 USC 3352.

116 STAT. 454 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

RESEARCH 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—

(A) in the section heading, by striking ‘‘AND NATIONAL

CONFERENCE’’;

(B) by striking ‘‘(a) FOOD SAFETY RESEARCH INFORMA- TION OFFICE.—’’;

7 USC 6711.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 455

(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).

Subtitle D—New Authorities

SEC. 7401. SUBTITLE DEFINITIONS.

In this subtitle:

7 USC 3319f

note.

116 STAT. 456 PUBLIC LAW 107–171—MAY 13, 2002

(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

eligible 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 administering grants, for similar or related research, education,

or extension projects or activities.

‘‘(b) ADMINISTRATION.—

7 USC 3319b.

7 USC 3319b

note.

7 USC 3310a.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 457

‘‘(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.

(4) CHAIRPERSON.—Of the members appointed under paragraph (1), the Secretary shall designate a Chairperson that

Deadline.

Establishment.

7 USC 3101 note.

116 STAT. 458 PUBLIC LAW 107–171—MAY 13, 2002

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;

7 USC 3319f.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 459

(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 this subsection for administrative costs incurred by the

Secretary in carrying out this section.

(d) EDUCATION TEAMS.— Establishment.

116 STAT. 460 PUBLIC LAW 107–171—MAY 13, 2002

(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).

(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 461

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 agricultural products and directly benefit the producers and handlers; and

(D) the implementation of initiatives that directly benefit organic producers and handlers; and

Deadline.

7 USC 5925b

note.

7 USC 5925d.

7 USC 5925c.

116 STAT. 462 PUBLIC LAW 107–171—MAY 13, 2002

(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,

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

7 USC 7630.

7 USC 5925a

note.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 463

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.’’.

(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;

7 USC 3103 note.

7 USC 3361 note.

116 STAT. 464 PUBLIC LAW 107–171—MAY 13, 2002

(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 opportunities for eligible institutions in the Atlantic and Pacific

Oceans.

7 USC 3362.

7 USC 3361.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 465

‘‘(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.’’.

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

7 USC 3363.

116 STAT. 466 PUBLIC LAW 107–171—MAY 13, 2002

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.’’.

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:

Deadline.

Deadline.

Publication.

7 USC 7719.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 467

‘‘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.

7 USC 7631.

116 STAT. 468 PUBLIC LAW 107–171—MAY 13, 2002

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

16 USC 2103.

16 USC 2103

note.

16 USC 2103

note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 469

of 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 period of not less than 10 years, unless the State forester

approves a modification to the plan.

Deadline.

116 STAT. 470 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(B) The sustainable growth and management of forests

for timber production.

‘‘(C) The restoration, use, and enhancement of forest

wetland and riparian areas.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 471

‘‘(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.

‘‘(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:

116 STAT. 472 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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 decisionmaking 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).

‘‘(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 473

‘‘(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.— ‘‘(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.

16 USC 2106c.

16 USC 2106c

note.

116 STAT. 474 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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:

‘‘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)

16 USC 1674b.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 475

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;

(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

7 USC 8101.

116 STAT. 476 PUBLIC LAW 107–171—MAY 13, 2002

(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

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

7 USC 8102.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 477

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.

(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

Deadline.

Reports.

Deadline.

116 STAT. 478 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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

7 USC 8103.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 479

(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.— (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;

116 STAT. 480 PUBLIC LAW 107–171—MAY 13, 2002

(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));

(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));

Grants.

7 USC 8105.

7 USC 8104.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 481

(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 recommendations 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.

Establishment.

116 STAT. 482 PUBLIC LAW 107–171—MAY 13, 2002

(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;

(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.

7 USC 8106.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 483

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’’.

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,

7 USC 6711.

26 USC 7624

note.

26 USC 7624

note.

Memorandum.

7 USC 8107.

116 STAT. 484 PUBLIC LAW 107–171—MAY 13, 2002

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

Change Research Program (which may use any of their statutory authorities), and local extension agents, experts from

institutions 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.’’.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 485

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.

(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.

7 USC 8108.

116 STAT. 486 PUBLIC LAW 107–171—MAY 13, 2002

(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.

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

Effective date.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 487

(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

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

Deadline.

116 STAT. 488 PUBLIC LAW 107–171—MAY 13, 2002

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 moderate-sized 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,’’.

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.

7 USC 1472.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 489

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’’).

(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

Disaster

assistance.

Grants.

New York.

116 STAT. 490 PUBLIC LAW 107–171—MAY 13, 2002

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).

(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.

7 USC 8202.

7 USC 8201.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 491

(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

(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.—

7 USC 8205.

7 USC 8204.

7 USC 8203.

116 STAT. 492 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

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

Deadline.

7 USC 2132 note.

7 USC 2156 note.

7 USC 2156 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 493

(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 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

7 USC 1901 note.

116 STAT. 494 PUBLIC LAW 107–171—MAY 13, 2002

(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;

(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:

7 USC 8302.

7 USC 8301.

7 USC 8301 note.

Animal Health

Protection Act.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 495

(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.

(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.

116 STAT. 496 PUBLIC LAW 107–171—MAY 13, 2002

(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

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

7 USC 8303.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 497

(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—

(1) the exportation of any animal, article, or means of

conveyance 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;

(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—

7 USC 8304.

116 STAT. 498 PUBLIC LAW 107–171—MAY 13, 2002

(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

(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 postimportation 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—

7 USC 8306.

7 USC 8305.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 499

(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;

(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.—

Federal Register,

publication.

Public

information.

116 STAT. 500 PUBLIC LAW 107–171—MAY 13, 2002

(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;

(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).

7 USC 8307.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 501

(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.

(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.

7 USC 8309.

7 USC 8308.

116 STAT. 502 PUBLIC LAW 107–171—MAY 13, 2002

(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 Secretary 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.

7 USC 8310.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 503

(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, 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

7 USC 8312.

7 USC 8311.

116 STAT. 504 PUBLIC LAW 107–171—MAY 13, 2002

(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 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

7 USC 8313.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 505

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

officer, 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

7 USC 8314.

116 STAT. 506 PUBLIC LAW 107–171—MAY 13, 2002

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.—

(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.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 507

(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 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).

21 USC 111–113,

120–122.

21 USC 129a

and note.

7 USC 8316.

7 USC 8315.

116 STAT. 508 PUBLIC LAW 107–171—MAY 13, 2002

(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

Development, 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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 509

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.’’.

(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)

7 USC 8317.

116 STAT. 510 PUBLIC LAW 107–171—MAY 13, 2002

(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.

(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.

7 USC 8318.

7 USC 229b.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 511

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 amendments

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.

7 USC 612c–4.

116 STAT. 512 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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’’;

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 513

(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’ markets, 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)—

7 USC 3005.

116 STAT. 514 PUBLIC LAW 107–171—MAY 13, 2002

(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; ‘‘(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 ASSESS- MENTS.—

‘‘(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

7 USC 6523.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 515

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:

(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

16 USC 3801

note.

Deadline.

116 STAT. 516 PUBLIC LAW 107–171—MAY 13, 2002

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—

(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 517

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—

(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.’’.

7 USC 2219a.

116 STAT. 518 PUBLIC LAW 107–171—MAY 13, 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: ‘‘(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.’’.

7 USC 394.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 519

(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.

(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 MANAGEMENT.—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 nonFederal 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

Contracts.

7 USC 8002.

7 USC 2279b

note.

116 STAT. 520 PUBLIC LAW 107–171—MAY 13, 2002

(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 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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 521

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.’’. (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.

116 STAT. 522 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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

(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 COM- MITTEE 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.

7 USC 2279–1.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 523

‘‘(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

‘‘(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.

116 STAT. 524 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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);

‘‘(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.

Deadline.

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 525

‘‘(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 CONGRESS.—

‘‘(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 computed 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.

Deadline.

7 USC 5921a.

7 USC 473a note.

7 USC 473a note.

7 USC 473a note.

Internet.

116 STAT. 526 PUBLIC LAW 107–171—MAY 13, 2002

(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.

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:

21 USC 321d.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 527

‘‘(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

(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

Deadline.

President.

21 USC 341 note.

116 STAT. 528 PUBLIC LAW 107–171—MAY 13, 2002

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 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

Deadline.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 529

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 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

116 STAT. 530 PUBLIC LAW 107–171—MAY 13, 2002

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.

(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).

Effective date.

Deadline.

21 USC 679b.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 531

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.’’.

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—

7 USC 8307 note.

Deadline.

21 USC 343 note.

116 STAT. 532 PUBLIC LAW 107–171—MAY 13, 2002

(1) The continental United States.

(2) Guam.

(3) Puerto Rico.

(4) The United States Virgin Islands.

(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.

Applicability.

7 USC 1967.

11 USC 1201

note.

11 USC

1201–1208,

1221–1231,

1201 note.

115 Stat. 1949.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 533

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:

‘‘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.—

7 USC 1638a.

7 USC 1638.

116 STAT. 534 PUBLIC LAW 107–171—MAY 13, 2002

‘‘(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.

‘‘(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

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 535

to the retailer indicating the country of origin of the covered commodity. ‘‘(f) CERTIFICATION OF ORIGIN.— ‘‘(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.’’.

Effective date.

7 USC 1638d.

Deadlines.

7 USC 1638c.

Applicability.

7 USC 1638b.

116 STAT. 536 PUBLIC LAW 107–171—MAY 13, 2002

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

7 USC 612c note.

Deadlines.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 537

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 report that describes the findings, conclusions, and recommendations of the study.

Oregon.

116 STAT. 538 PUBLIC LAW 107–171—MAY 13, 2002

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.

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

31 USC 712 note.

7 USC 3191 note.

7 USC 2204 note.

PUBLIC LAW 107–171—MAY 13, 2002 116 STAT. 539

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.

(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—

7 USC 2204 note.

116 STAT. 540 PUBLIC LAW 107–171—MAY 13, 2002

LEGISLATIVE HISTORY—H.R. 2646 (S. 1731):

HOUSE REPORTS: Nos. 107–191, Pts. 1 and 2 (both from Comm. on Agriculture)

and Pt. 3 (Comm. on International Relations) and 107–424

(Comm. of Conference).

SENATE REPORTS: No. 107–117 accompanying S. 1731 (Comm. on Agriculture,

Nutrition, and Forestry).

CONGRESSIONAL RECORD:

Vol. 147 (2001): Oct. 3–5, considered and passed House.

Vol. 148 (2002): Feb. 13, considered and passed Senate, amended, in lieu of

S. 1731.

May 2, House agreed to conference report.

May 7, 8, Senate considered and agreed to conference report.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 38 (2002):

May 13, Presidential remarks.

Æ

(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.

Approved May 13, 2002.