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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1658 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1658

    To reform and reauthorize agricultural programs, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            October 5, 2011

   Mr. Lugar introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
    To reform and reauthorize agricultural programs, 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 ``Rural Economic 
Farm and Ranch Sustainability and Hunger Act of 2011'' or the ``REFRESH 
Act of 2011''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definition of Secretary.
                      TITLE I--PRODUCER SAFETY NET

                  Subtitle A--Revenue-Based Safety Net

Sec. 1001. Aggregate risk and revenue management program.
Sec. 1002. Supplemental insurance.
               Subtitle B--Federal Crop Insurance Program

Sec. 1201. Whole farm revenue insurance tools.
Sec. 1202. Insurance availability.
Sec. 1203. Crop insurance education assistance.
                    Subtitle C--Sugar Program Repeal

Sec. 1301. Repeal of sugar program.
Sec. 1302. Elimination of sugar price support and production adjustment 
                            programs.
Sec. 1303. Elimination of sugar tariff and over-quota tariff rate.
Sec. 1304. Application.
                    Subtitle D--Dairy Program Reform

PART I--Dairy Producer Margin Protection and Dairy Market Stabilization 
                                Programs

Sec. 1401. Definitions.
Sec. 1402. Calculation of average feed cost and actual dairy producer 
                            margins.
          subpart a--dairy producer margin protection program

Sec. 1411. Establishment of dairy producer margin protection program.
Sec. 1412. Eligibility and registration of dairy producers for margin 
                            protection program.
Sec. 1413. Production history and annual production quantity of 
                            participating dairy producers.
Sec. 1414. Basic margin protection.
Sec. 1415. Supplemental margin protection.
Sec. 1416. Effect of failure to pay administrative fees or premiums.
Sec. 1417. No payment limitations.
             subpart b--dairy market stabilization program

Sec. 1431. Establishment of dairy market stabilization program.
Sec. 1432. Threshold for implementation and reduction in dairy producer 
                            payments.
Sec. 1433. Producer milk marketings information.
Sec. 1434. Calculation and collection of reduced dairy producer 
                            payments.
Sec. 1435. Remitting monies to Commodity Credit Corporation.
Sec. 1436. Suspension of reduced payment requirement.
Sec. 1437. Audit requirements.
Sec. 1438. Board of directors.
                subpart c--commodity credit corporation

Sec. 1451. Use of Commodity Credit Corporation.
                          subpart d--duration

Sec. 1461. Duration.
              PART II--Federal Milk Marketing Order Reform

Sec. 1471. Required amendments to Federal milk marketing orders.
Sec. 1472. Amendment process.
Sec. 1473. Development of effective balancing programs for milk 
                            markets.
Sec. 1474. Study on elimination of milk marketing orders.
               PART III--Repeal of Superseded Provisions

Sec. 1481. Repeal of dairy product price support and milk income loss 
                            contract programs.
Sec. 1482. Repeal of permanent price support authority for milk.
Sec. 1483. Repeal of dairy export incentive program.
Sec. 1484. Effective date.
                         TITLE II--CONSERVATION

                Subtitle A--Conservation Reserve Program

Sec. 2001. Conservation reserve program.
Sec. 2002. Pilot program for enrollment of wetland and buffer acreage 
                            in conservation reserve.
Sec. 2003. Duties of owners and operators.
Sec. 2004. Payments.
Sec. 2005. Contracts.
Sec. 2006. Conversion of land subject to contract to other conserving 
                            uses.
                 Subtitle B--Easement Benefits Program

Sec. 2101. Easement benefits program.
                    Subtitle C--Working Land Program

Sec. 2201. Working land program.
                Subtitle D--Other Conservation Programs

Sec. 2301. Other conservation programs of the Food Security Act of 
                            1985.
Sec. 2302. Funding of conservation programs under Food Security Act of 
                            1985.
Sec. 2303. Cooperative conservation partnership initiative.
Sec. 2304. Administrative requirements for conservation programs.
Sec. 2305. Repeal of healthy forests reserve program.
                          TITLE III--NUTRITION

         Subtitle A--Supplemental Nutrition Assistance Program

Sec. 3001. Categorical eligibility limitations.
Sec. 3002. Repeal of funding for employment and training programs.
Sec. 3003. Repeal of incentive payments to States with low SNAP benefit 
                            allocation error rates.
Sec. 3004. Quality control.
                         Subtitle B--Extensions

Sec. 3101. Supplemental nutrition assistance program.
Sec. 3102. Commodity distribution programs.
Sec. 3103. Miscellaneous.
                  TITLE IV--ENERGY FROM RURAL AMERICA

Sec. 4001. Definitions.
Sec. 4002. Biobased markets program.
Sec. 4003. Biorefinery assistance.
Sec. 4004. Rural Energy for America Program.
Sec. 4005. Repeal of feedstock flexibility program for bioenergy 
                            producers.
Sec. 4006. Biomass Crop Assistance Program.
Sec. 4007. Rural energy savings program.
              TITLE V--TECHNICAL IMPROVEMENTS TO RESEARCH

Sec. 5001. Matching fund requirement under McIntire-Stennis Cooperative 
                            Forestry Act.
Sec. 5002. Matching fund requirement under Hatch Act of 1887.
Sec. 5003. Matching fund requirement under Smith-Lever Act.
Sec. 5004. Biomass Research and Development Initiative.
                        TITLE VI--MISCELLANEOUS

Sec. 6001. Budgetary effects.

SEC. 2. DEFINITION OF SECRETARY.

    In this Act, the term ``Secretary'' means the Secretary of 
Agriculture.

                      TITLE I--PRODUCER SAFETY NET

                  Subtitle A--Revenue-Based Safety Net

SEC. 1001. AGGREGATE RISK AND REVENUE MANAGEMENT PROGRAM.

    (a) In General.--Section 1105 of the Food, Conservation, and Energy 
Act of 2008 (7 U.S.C. 8715) is amended to read as follows:

``SEC. 1105. AGGREGATE RISK AND REVENUE MANAGEMENT PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Alternative price.--The term `alternative price' 
        means an average of the price for each of the immediately 
        preceding 4 years, as determined by the National Agricultural 
        Statistics Service, for each crop for which the harvest price 
        is unavailable.
            ``(2) ARRM.--The term `ARRM' means the aggregate risk and 
        revenue management program established under this section.
            ``(3) CRD.--The term `CRD' means a crop reporting district, 
        as determined by the National Agricultural Statistics Service.
            ``(4) Harvest price.--The term `harvest price' means the 
        harvest price determined by the Risk Management Agency.
    ``(b) Availability and Election of Alternative Approach.--
            ``(1) Availability of aggregate risk and revenue management 
        payments.--With respect to all covered commodities and peanuts 
        on a farm, during each of the 2013 through 2017 crop years, the 
        Secretary shall give the operator, tenant, or sharecropper, as 
        appropriate, on the farm an opportunity to make an annual 
        election for all producers on the farm to receive aggregate 
        risk and revenue management payments under this section for the 
        crop year for which the election is made.
            ``(2) Limitations.--
                    ``(A) In general.--The total number of planted 
                acres for which the producers on a farm may receive 
                ARRM payments under this section shall be equal to the 
                total number of acres planted to all covered 
                commodities and peanuts on the farm.
                    ``(B) Native sod.--
                            ``(i) In general.--Native sod (as defined 
                        in section 508(o)(1) of the Federal Crop 
                        Insurance Act (7 U.S.C. 1508(o)(1))) acreage 
                        that is tilled for the purpose of producing an 
                        annual crop after the date of enactment of the 
                        Rural Economic Farm and Ranch Sustainability 
                        and Hunger Act of 2011 shall not be considered 
                        acreage planted to the covered commodity or 
                        peanuts for harvest on a farm in a crop year 
                        for purposes of making ARRM payments under this 
                        section during the first 5 crop years of 
                        planting.
                            ``(ii) Requirement.--Ineligibility under 
                        clause (i) shall only apply to the actual 
                        acreage of native sod that was converted to 
                        crop production.
            ``(3) Election; time for election.--
                    ``(A) In general.--The Secretary shall provide 
                notice to the operators, tenants, or sharecroppers, as 
                appropriate regarding the opportunity to make each of 
                the elections described in paragraph (1).
                    ``(B) Notice requirements.--The notice shall 
                include--
                            ``(i) notice of the opportunity of the 
                        operator, tenant, or sharecropper, as 
                        appropriate, on a farm to make the election; 
                        and
                            ``(ii) 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.
            ``(4) Election deadline.--Within the time period and in the 
        manner prescribed pursuant to paragraph (3), the operator, 
        tenant, or sharecropper, as appropriate, on a farm shall submit 
        to the Secretary notice of an election made under paragraph 
        (1).
            ``(5) Effect of failure to make election.--If the 
        operators, tenants, or sharecroppers, as appropriate, on a farm 
        fail to make an election under paragraph (1) or fail to timely 
        notify the Secretary of the election made, as required by 
        paragraph (4), all of the producers on the farm shall be deemed 
        to not have made the election described in paragraph (1), for 
        the applicable crop years.
    ``(c) Payments Required.--
            ``(1) In general.--In the case of producers on a farm who 
        make an election under subsection (b) to receive ARRM payments 
        for any of the 2013 through 2017 crop years for all covered 
        commodities and peanuts, the Secretary shall make ARRM payments 
        available to the producers on a farm in accordance with this 
        subsection.
            ``(2) ARRM payment.--
                    ``(A) In general.--Subject to paragraph (3), in the 
                case of producers on a farm described in paragraph (1), 
                the Secretary shall make ARRM payments available to the 
                producers on a farm for each crop year if--
                            ``(i) the actual CRD revenue for the crop 
                        year for the covered commodity or peanuts in 
                        the CRD determined under subsection (e); is 
                        less than
                            ``(ii) the ARRM program guarantee for the 
                        crop year for the covered commodity or peanuts 
                        in the CRD determined under subsection (d).
                    ``(B) Individual loss.--The Secretary shall make 
                ARRM payments available to the producers on a farm in a 
                CRD for a crop year only if (as determined by the 
                Secretary)--
                            ``(i) the actual farm revenue for the crop 
                        year for the covered commodity or peanuts, as 
                        determined under subsection (g); is less than
                            ``(ii) the farm ARRM revenue guarantee for 
                        the crop year for the covered commodity or 
                        peanuts, as determined under subsection (f).
            ``(3) Time for payments.--In the case of each of the 2013 
        through 2017 crop years, the Secretary shall make ARRM payments 
        beginning October 1, or as soon as practicable thereafter, 
        after the date of determination of the harvest price for the 
        covered commodity or peanuts.
    ``(d) ARRM Program Guarantee.--
            ``(1) CRD amount.--
                    ``(A) In general.--For purposes of subsection 
                (c)(2)(A) and subject to subparagraphs (B) and (C), the 
                ARRM program guarantee for a crop year for a covered 
                commodity or peanuts in a CRD shall equal 90 percent of 
                the CRD average revenue, as determined under 
                subparagraph (B).
                    ``(B) CRD average revenue.--For purposes of 
                subparagraph (A), the CRD average revenue shall be the 
                average during the marketing years for the immediately 
                preceding 5 crops of a covered commodity and peanuts, 
                excluding the year in which the CRD revenue was the 
                highest and the year in which the CRD revenue was the 
                lowest in the period, of the product obtained by 
                multiplying--
                            ``(i) the CRD yield for the covered 
                        commodity or peanuts in a CRD determined under 
                        paragraph (2); and
                            ``(ii) the harvest price or alternative 
                        price for the covered commodity or peanuts.
                    ``(C) Minimum and maximum guarantee.--The ARRM 
                program guarantee for a crop year for a covered 
                commodity or peanuts under subparagraph (A) shall not 
                decrease or increase more than 10 percent from the 
                guarantee for the preceding crop year.
                    ``(D) Double-cropped acreage.--Any crop 
                subsequently planted on land determined for purposes of 
                the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) 
                to be prevented planted acreage shall not be included 
                in calculating the ARRM program guarantee under 
                subparagraph (A) or the actual farm revenue under 
                subsection (g) unless the farm has a history of double-
                cropping and is located in a region in which double-
                cropping is an acceptable farming practice, as 
                determined by the Secretary.
            ``(2) Assigned crd yield.--If the Secretary cannot 
        establish the CRD yield for each planted acre for a crop year 
        for a covered commodity or peanuts in a CRD in accordance with 
        subparagraph (A) or if the yield determined under subparagraph 
        (A) is an unrepresentative average yield for the CRD (as 
        determined by the Secretary), the Secretary shall assign a CRD 
        yield for each planted acre for the crop year for the covered 
        commodity or peanuts in the CRD on the basis of--
                    ``(A) previous average yields for a period of 5 
                crop years, excluding each of the crop years with the 
                highest and lowest yields; or
                    ``(B) CRD yields for planted acres for the crop 
                year for the covered commodity or peanuts in similar 
                CRDs.
            ``(3) CRDs with irrigated and nonirrigated land.--In the 
        case of a CRD in which at least 25 percent of the acreage 
        planted to a covered commodity or peanuts in the CRD is 
        irrigated and at least 25 percent of the acreage planted to the 
        covered commodity or peanuts in the CRD is not irrigated, the 
        Secretary shall calculate a separate ARRM program guarantee for 
        the irrigated and nonirrigated areas of the CRD for the covered 
        commodity or peanuts.
    ``(e) Actual CRD Revenue.--
            ``(1) In general.--For purposes of subsection (c)(2)(A), 
        the amount of the actual CRD revenue for a crop year of a 
        covered commodity or peanuts shall equal the product obtained 
        by multiplying--
                    ``(A) the actual CRD yield for each planted acre 
                for the crop year for the covered commodity or peanuts 
                determined under paragraph (2); and
                    ``(B) the national average harvest price or 
                alternative price received by producers for the crop 
                year for the covered commodity or peanuts as determined 
                by the Risk Management Agency.
            ``(2) Actual crd yield.--For purposes of paragraph (1)(A), 
        the actual CRD yield for each planted acre for a crop year for 
        a covered commodity or peanuts in a CRD shall equal (as 
        determined by the Secretary)--
                    ``(A) the quantity of the covered commodity or 
                peanuts that is produced in the CRD during the crop 
                year; divided by
                    ``(B) the number of acres that are planted to the 
                covered commodity or peanuts in the CRD during the crop 
                year.
    ``(f) Farm ARRM Revenue Guarantee.--
            ``(1) In general.--For purposes of subsection (c)(2)(B), 
        the farm ARRM revenue guarantee for the crop year for a covered 
        commodity or peanuts shall equal 90 percent of the average farm 
        revenue as determined under paragraph (2).
            ``(2) Average farm revenue.--The average farm revenue shall 
        be equal to the sum obtained by adding--
                    ``(A) the average during the marketing years for 
                the immediately preceding 5 crops of a covered 
                commodity and peanuts, excluding the year in which the 
                farm revenue was the highest and the year in which the 
                farm revenue was the lowest in the period, of the 
                product obtained by multiplying--
                            ``(i) the actual production history, as 
                        determined using production records and data of 
                        the Risk Management Agency; and
                            ``(ii) the harvest price or alternative 
                        price for the covered commodity or peanuts in a 
                        CRD; and
                    ``(B) the amount of the per acre crop insurance 
                premium required to be paid by the producers on the 
                farm for the applicable crop year for the covered 
                commodity or peanuts on the farm.
    ``(g) Actual Farm Revenue.--For purposes of subsection (c)(2)(B) 
and except as provided in subsection (d)(1)(C), the amount of the 
actual farm revenue for a crop year for a covered commodity or peanuts 
shall equal the amount determined by multiplying--
            ``(1) the actual yield for the covered commodity or peanuts 
        of the producers on the farm; and
            ``(2) the national average harvest price or alternative 
        price for the crop year for the covered commodity or peanuts.
    ``(h) Payment Amount.--If ARRM payments are required to be paid for 
any of the 2013 through 2017 crop years of a covered commodity or 
peanuts under this section, the amount of the ARRM payment to be paid 
to the producers on the farm for the crop year under this section shall 
be equal to the product obtained by multiplying--
            ``(1) the lesser of--
                    ``(A) the difference between--
                            ``(i) the ARRM program guarantee for the 
                        crop year for the covered commodity or peanuts 
                        in the CRD determined under subsection (d); and
                            ``(ii) the actual CRD revenue from the crop 
                        year for the covered commodity or peanuts in 
                        the CRD determined under subsection (e); and
                    ``(B) 15 percent of the ARRM program guarantee for 
                the crop year for the covered commodity or peanuts in 
                the CRD determined under subsection (d);
            ``(2) 85 percent of the acreage planted to the covered 
        commodity or peanuts for harvest on the farm in the crop year; 
        and
            ``(3) the quotient obtained by dividing--
                    ``(A) the actual production history for the covered 
                commodity or peanuts of the producers on the farm, as 
                determined using production records and data of the 
                Risk Management Agency; and
                    ``(B) the assigned CRD yield for each planted acre 
                for the crop year for the covered commodity or peanuts 
                in a CRD, as determined under subsection (d)(2).
    ``(i) Crop Reporting District Assessment.--The Secretary shall 
review CRDs in western States that have 7 or fewer CRDs to assess 
whether additional CRDs in the States are necessary.''.
    (b) Conforming Amendments.--
            (1) Repeal of direct and counter-cyclical payments for 
        covered commodities and peanuts.--
                    (A) In general.--Sections 1103, 1104, 1303, and 
                1304 of the Food, Conservation, and Energy Act of 2008 
                (7 U.S.C. 8713, 8714, 8753, 8754) are repealed.
                    (B) Application.--The amendments made by paragraph 
                (1) apply beginning with the 2013 crop year.
            (2) Period of effectiveness.--Section 1109 of the Food, 
        Conservation, and Energy Act of 2008 (7 U.S.C. 8719) is amended 
        by striking ``2012'' and inserting ``2017''.
            (3) Suspension of permanent price support authority.--
        Section 1602 of the Food, Conservation, and Energy Act of 2008 
        (7 U.S.C. 8782) is amended--
                    (A) by striking ``through 2012'' each place it 
                appears and inserting ``through 2017''; and
                    (B) by striking ``December 31, 2012'' each place it 
                appears and inserting ``December 31, 2017''.
            (4) Technical amendments.--
                    (A) Section 1001 of the Food, Conservation, and 
                Energy Act of 2008 (7 U.S.C. 8702) is amended by 
                striking paragraph (1) and inserting the following:
            ``(1) Aggregate risk and revenue management payment.--The 
        term `aggregate risk and revenue management payment' means a 
        payment made to producers on a farm under section 1105.''
                    (B) Section 1101(d)(1) of the Food, Conservation, 
                and Energy Act of 2008 (7 U.S.C. 8711(d)(1)) is amended 
                by striking ``average crop revenue election'' and 
                inserting ``aggregate risk and revenue management''.
                    (C) Section 1106 of the Food, Conservation, and 
                Energy Act of 2008 (7 U.S.C. 8716) is amended by 
                striking ``average crop revenue election'' each place 
                it appears in subsections (a)(1), (b), and (e) and 
                inserting ``aggregate risk and revenue management''.
                    (D) Section 1302(d)(1) of the Food, Conservation, 
                and Energy Act of 2008 (7 U.S.C. 8752(d)(1)) is amended 
                by striking ``average crop revenue election'' and 
                inserting ``aggregate risk and revenue management''.
                    (E) Section 1305 of the Food, Conservation, and 
                Energy Act of 2008 (7 U.S.C. 8755) is amended by 
                striking ``average crop revenue election'' each place 
                it appears in subsections (a)(1), (b), and (e) and 
                inserting ``aggregate risk and revenue management''.
                    (F) Section 1001 of the Food Security Act of 1985 
                (7 U.S.C. 1308) is amended--
                            (i) by striking ``ACRE'' each place it 
                        appears in the headings of subsections (b) and 
                        (c) and inserting ``ARRM'';
                            (ii) by striking ``ACRE'' each place it 
                        appears in the headings of paragraph (3) of 
                        subsections (b) and (c) and inserting ``ARRM''; 
                        and
                            (iii) by striking ``average crop revenue 
                        election'' each place it appears in subsections 
                        (b) and (c) and inserting ``aggregate risk and 
                        revenue management''.
                    (G) Section 1001D of the Food Security Act of 1985 
                (7 U.S.C. 1308-3a) is amended--
                            (i) in subsection (b)(C)(i), by striking 
                        ``average crop revenue election'' and inserting 
                        ``aggregate risk and revenue management''; and
                            (ii) in subsection (f), by striking 
                        ``2012'' and inserting ``2017''.

SEC. 1002. SUPPLEMENTAL INSURANCE.

    (a) In General.--Section 508(c)(4) of the Federal Crop Insurance 
Act (7 U.S.C. 1508(c)(4)) is amended--
            (1) by striking ``The level of coverage'' and inserting the 
        following:
                    ``(A) Basic coverage.--The level of coverage'';
            (2) by striking ``Not later than'' and inserting the 
        following:
                    ``(B) Provision of information.--Not later than''; 
                and
            (3) by adding at the end the following:
                    ``(C) Supplemental coverage.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (3) and subparagraph (A), the 
                        Corporation may offer supplemental coverage, 
                        based on an area yield and loss basis, to cover 
                        that portion of a crop loss not covered under 
                        the individual yield and loss basis plan of 
                        insurance of a producer, including any revenue 
                        plan of insurance with coverage based in part 
                        on individual yield and loss.
                            ``(ii) Limitation.--The sum of the 
                        indemnity paid to the producer under the 
                        individual yield and loss plan of insurance and 
                        the supplemental coverage may not exceed 100 
                        percent of the loss incurred by the producer 
                        for the crop.
                            ``(iii) Administrative and operating 
                        expense reimbursement.--Notwithstanding 
                        subsection (k)(4), the reimbursement rate for 
                        approved insurance providers for the 
                        supplemental coverage shall equal 6 percent of 
                        the premium used to define the loss ratio.
                            ``(iv) Direct coverage.--If the Corporation 
                        determines that it is in the best interests of 
                        producers, the Corporation may offer 
                        supplemental coverage as a Corporation 
                        endorsement to existing plans and policies of 
                        crop insurance authorized under this title.
                            ``(v) Payment of portion of premium by 
                        corporation.--Notwithstanding subsection (e), 
                        the amount of the premium to be paid by the 
                        Corporation for supplemental coverage offered 
                        pursuant to this subparagraph shall be 
                        determined by the Corporation, but may not 
                        exceed the sum of--
                                    ``(I) 50 percent of the amount of 
                                premium established under subsection 
                                (d)(2)(C)(i) for the coverage level 
                                selected; and
                                    ``(II) the amount determined under 
                                subsection (d)(2)(C)(ii) for the 
                                coverage level selected to cover 
                                operating and administrative 
                                expenses.''.
    (b) Conforming Amendments.--Section 508(d)(2) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(d)(2)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``additional coverage'' and inserting ``additional and 
        supplemental coverages''; and
            (2) by adding at the end the following:
                    ``(C) In the case of supplemental coverage offered 
                under subsection (c)(4)(C), the amount of the premium 
                shall--
                            ``(i) be sufficient to cover anticipated 
                        losses and a reasonable reserve; and
                            ``(ii) include an amount for operating and 
                        administrative expenses, as determined by the 
                        Corporation on an industry-wide basis as a 
                        percentage of the amount of the premium used to 
                        define loss ratio.''.

               Subtitle B--Federal Crop Insurance Program

SEC. 1201. WHOLE FARM REVENUE INSURANCE TOOLS.

    (a) Establishment.--Section 508(c) of the Federal Crop Insurance 
Act (7 U.S.C. 1508(c)) is amended by adding at the end the following:
            ``(11) Whole farm insurance plan.--The Corporation shall 
        offer a whole farm insurance plan that allows a producer to 
        qualify for an indemnity if actual gross farm revenue is below 
        80 percent of the average gross farm revenue of the 
        producer.''.
    (b) Adjusted Gross Revenue Insurance Pilot Program.--Section 523(e) 
of the Federal Crop Insurance Act (7 U.S.C. 1523(e)) is amended--
            (1) in paragraph (1), by striking ``2004'' and inserting 
        ``2014'';
            (2) in paragraph (2), by striking subparagraph (A) and 
        inserting the following:
                    ``(A) In general.--In addition to counties 
                otherwise included in the pilot program, the 
                Corporation shall include in the pilot program for each 
                of the 2010 through 2014 reinsurance years all States 
                and counties that meet the criteria for selection 
                (pending required rating), as determined by the 
                Corporation.''; and
            (3) by adding at the end the following:
            ``(3) Eligible producers.--The Corporation shall permit the 
        producer of any type of agricultural commodity (including a 
        producer of specialty crops, floricultural, ornamental nursery, 
        and Christmas tree crops, turfgrass sod, seed crops, 
        aquacultural products (including ornamental fish), sea grass 
        and sea oats, and industrial crops) to participate in a pilot 
        program established under this subsection.''.

SEC. 1202. INSURANCE AVAILABILITY.

    (a) Conducting Research and Development.--Section 522(c) of the 
Federal Crop Insurance Act (7 U.S.C. 1522(c)) is amended--
            (1) in the subsection heading, by striking ``Contracting'';
            (2) in paragraph (1), in the matter preceding paragraph 
        (A), by striking ``enter into contracts to carry out research 
        and development to'' and inserting ``conduct activities or 
        enter into contracts to carry out research and development to 
        maintain or improve existing policies or develop new policies 
        to'';
            (3) in paragraph (2)--
                    (A) in subparagraph (A), by inserting ``conduct 
                research and development or'' after ``The Corporation 
                may''; and
                    (B) in subparagraph (B), by inserting ``conducting 
                research and development or'' after ``Before''; and
            (4) in paragraph (5), by inserting ``after expert review in 
        accordance with section 505(e)'' after ``approved by the 
        Board''.
    (b) Funding.--Section 522(e) of the Federal Crop Insurance Act (7 
U.S.C. 1522(e)) is amended--
            (1) in paragraph (2)--
                    (A) in the paragraph heading, by striking 
                ``Contracting'' and inserting ``Conducting and 
                contracting for research and development'';
                    (B) in subparagraph (A), by inserting ``conduct 
                research and development and'' after ``the Corporation 
                may use to''; and
                    (C) in subparagraph (B), by inserting ``conduct 
                research and development and'' after ``for the fiscal 
                year to'';
            (2) in paragraph (3), in the matter preceding subparagraph 
        (A), by striking ``to provide either reimbursement payments or 
        contract payments under this section for a fiscal year is not 
        needed for such purposes'' and inserting ``for a fiscal year is 
        not needed for the purposes for which the amount was made 
        available''; and
            (3) by striking paragraph (4).

SEC. 1203. CROP INSURANCE EDUCATION ASSISTANCE.

    Section 524(a)(3) of the Federal Crop Insurance Act (7 U.S.C. 
1524(a)(3)) is amended--
            (1) in subparagraph (B), by striking ``A grant'' and 
        inserting ``Subject to subparagraph (E), a grant''; and
            (2) by adding at the end the following:
                    ``(E) Allocation to states.--The Secretary shall 
                allocate funds made available to carry out this 
                subsection for each fiscal year in a manner that 
                ensures that grants are provided to eligible entities 
                in States based on the ratio that the value of 
                agricultural production of each State bears to the 
                total value of agricultural production in all States, 
                as determined by the Secretary.''.

                    Subtitle C--Sugar Program Repeal

SEC. 1301. REPEAL OF SUGAR PROGRAM.

    Section 156 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7272) is repealed.

SEC. 1302. ELIMINATION OF SUGAR PRICE SUPPORT AND PRODUCTION ADJUSTMENT 
              PROGRAMS.

    (a) In General.--Notwithstanding any other provision of law--
            (1) a processor of any of the 2013 or subsequent crops of 
        sugarcane or sugar beets shall not be eligible for a loan under 
        any provision of law with respect to the crop; and
            (2) the Secretary of Agriculture may not make price support 
        available, whether in the form of a loan, payment, purchase, or 
        other operation, for any of the 2013 and subsequent crops of 
        sugar beets and sugarcane by using the funds of the Commodity 
        Credit Corporation or other funds available to the Secretary.
    (b) Termination of Marketing Quotas and Allotments.--
            (1) In general.--Part VII of subtitle B of title III of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa et seq.) 
        is repealed.
            (2) Conforming amendment.--Section 344(f)(2) of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1344(f)(2)) is 
        amended by striking ``sugar cane for sugar, sugar beets for 
        sugar,''.
    (c) General Powers.--
            (1) Section 32 activities.--Section 32 of the Act of August 
        24, 1935 (7 U.S.C. 612c), is amended in the second sentence of 
        the first paragraph--
                    (A) in paragraph (1), by inserting ``(other than 
                sugar beets and sugarcane)'' after ``commodities''; and
                    (B) in paragraph (3), by inserting ``(other than 
                sugar beets and sugarcane)'' after ``commodity''.
            (2) Powers of commodity credit corporation.--Section 5(a) 
        of the Commodity Credit Corporation Charter Act (15 U.S.C. 
        714c(a)) is amended by inserting ``, sugar beets, and 
        sugarcane'' after ``tobacco''.
            (3) Price support for nonbasic agricultural commodities.--
        Section 201(a) of the Agricultural Act of 1949 (7 U.S.C. 
        1446(a)) is amended by striking ``milk, sugar beets, and 
        sugarcane'' and inserting ``, and milk''.
            (4) Commodity credit corporation storage payments.--Section 
        167 of the Federal Agriculture Improvement and Reform Act of 
        1996 (7 U.S.C. 7287) is repealed.
            (5) Suspension and repeal of permanent price support 
        authority.--Section 171(a)(1) of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7301(a)(1)) is 
        amended--
                    (A) by striking subparagraph (E); and
                    (B) by redesignating subparagraphs (F) through (I) 
                as subparagraphs (E) through (H), respectively.
            (6) Storage facility loans.--Section 1402(c) of the Farm 
        Security and Rural Investment Act of 2002 (7 U.S.C. 7971) is 
        repealed.
    (d) Transition Provisions.--This section and the amendments made by 
this section shall not affect the liability of any person under any 
provision of law as in effect before the application of this section 
and the amendments made by this section.

SEC. 1303. ELIMINATION OF SUGAR TARIFF AND OVER-QUOTA TARIFF RATE.

    (a) Elimination of Tariff on Raw Cane Sugar.--Chapter 17 of the 
Harmonized Tariff Schedule of the United States is amended by striking 
subheadings 1701.11 through 1701.11.50 and inserting in numerical 
sequence the following new subheading, with the article description for 
such subheading having the same degree of indentation as the article 
description for subheading 1701.11, as in effect on the day before the 
date of the enactment of this section:

``      1701.11.00       Cane sugar.........  Free                 ...................  39.85 cents/kg      ''.

    (b) Elimination of Tariff on Beet Sugar.--Chapter 17 of the 
Harmonized Tariff Schedule of the United States is amended by striking 
subheadings 1701.12 through 1701.12.50 and inserting in numerical 
sequence the following new subheading, with the article description for 
such subheading having the same degree of indentation as the article 
description for subheading 1701.12, as in effect on the day before the 
date of the enactment of this section:

``       1701.12.00       Beet sugar.........  Free                 ...................  42.05 cents/kg       ''
                                                                                                               .

    (c) Elimination of Tariff on Certain Refined Sugar.--Chapter 17 of 
the Harmonized Tariff Schedule of the United States is amended--
            (1) by striking the superior text immediately preceding 
        subheading 1701.91.05 and by striking subheadings 1701.91.05 
        through 1701.91.30 and inserting in numerical sequence the 
        following new subheading, with the article description for such 
        subheading having the same degree of indentation as the article 
        description for subheading 1701.12.05, as in effect on the day 
        before the date of the enactment of this section:

``       1701.91.02       Containing added     Free                 ...................  42.05 cents/kg       ''
                           coloring but not                                                                    ;
                           containing added
                           flavoring matter..

            (2) by striking subheadings 1701.99 through 1701.99.50 and 
        inserting in numerical sequence the following new subheading, 
        with the article description for such subheading having the 
        same degree of indentation as the article description for 
        subheading 1701.99, as in effect on the day before the date of 
        the enactment of this section:

``       1701.99.00       Other..............  Free                 ...................  42.05 cents/kg       ''
                                                                                                               ;

            (3) by striking the superior text immediately preceding 
        subheading 1702.90.05 and by striking subheadings 1702.90.05 
        through 1702.90.20 and inserting in numerical sequence the 
        following new subheading, with the article description for such 
        subheading having the same degree of indentation as the article 
        description for subheading 1702.60.22:

``       1702.90.02       Containing soluble   Free                                      42.05 cents/kg       ''
                           non-sugar solids                                                                    ;
                           (excluding any
                           foreign
                           substances,
                           including but not
                           limited to
                           molasses, that may
                           have been added to
                           or developed in
                           the product) equal
                           to 6 percent or
                           less by weight of
                           the total soluble
                           solids............

        and
            (4) by striking the superior text immediately preceding 
        subheading 2106.90.42 and by striking subheadings 2106.90.42 
        through 2106.90.46 and inserting in numerical sequence the 
        following new subheading, with the article description for such 
        subheading having the same degree of indentation as the article 
        description for subheading 2106.90.39:

``       2106.90.40       Syrups derived from  Free                                      42.50 cents/kg       ''
                           cane or beet                                                                        .
                           sugar, containing
                           added coloring but
                           not added
                           flavoring matter..

    (d) Conforming Amendment.--Chapter 17 of the Harmonized Tariff 
Schedule of the United States is amended by striking additional U.S. 
note 5.
    (e) Administration of Tariff-Rate Quotas.--Section 404(d)(1) of the 
Uruguay Round Agreements Act (19 U.S.C. 3601(d)(1)) is amended--
            (1) by inserting ``or'' at the end of subparagraph (B);
            (2) by striking ``; or'' at the end of subparagraph (C) and 
        inserting a period; and
            (3) by striking subparagraph (D).
    (f) Effective Date.--The amendments made by this section apply with 
respect to goods entered, or withdrawn from warehouse for consumption, 
on or after the 15th day after the date of the enactment of this Act.

SEC. 1304. APPLICATION.

    Except as otherwise provided in this subtitle, this subtitle and 
the amendments made by this subtitle shall apply beginning with the 
2013 crop of sugar beets and sugarcane.

                    Subtitle D--Dairy Program Reform

PART I--DAIRY PRODUCER MARGIN PROTECTION AND DAIRY MARKET STABILIZATION 
                                PROGRAMS

SEC. 1401. DEFINITIONS.

    In this part:
            (1) Actual dairy producer margin.--The term ``actual dairy 
        producer margin'' means the difference between the all-milk 
        price and the average feed cost, as calculated under section 
        1402.
            (2) All-milk price.--The term ``all-milk price'' means the 
        average price received, per hundredweight of milk, by dairy 
        producers for all milk sold to plants and dealers in the United 
        States, as reported by the National Agricultural Statistics 
        Service.
            (3) Annual production quantity.--The term ``annual 
        production quantity'' means the quantity of annual milk 
        marketings determined for a dairy producer under section 
        1413(b) for each year in which the dairy producer participates 
        in the margin protection program.
            (4) Average feed cost.--The term ``average feed cost'' 
        means the average cost of feed used by a dairy operation to 
        produce a hundredweight of milk, determined under section 1402 
        using the sum of the following:
                    (A) The product determined by multiplying 1.192 by 
                the price of corn per bushel.
                    (B) The product determined by multiplying 0.00817 
                by the price of soybean meal per ton.
                    (C) The product determined by multiplying 0.0152 by 
                the price of alfalfa hay per ton.
            (5) Board of directors.--The term ``board of directors'' 
        means the board of directors appointed by the Secretary under 
        section 1438.
            (6) Consecutive two-month period.--The term ``consecutive 
        two-month period'' refers to the two-month period consisting of 
        the months of January and February, March and April, May and 
        June, July and August, September and October, or November and 
        December, respectively.
            (7) Dairy producer.--The term ``dairy 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 
                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.
            (8) Handler.--
                    (A) In general.--The term ``handler'' means a 
                person making payment to a dairy producer for milk 
                produced in the United States and marketed for 
                commercial use.
                    (B) Producer-handler.--The term includes a 
                producer-handler.
            (9) Margin protection program.--The term ``margin 
        protection program'' means the dairy producer margin protection 
        program required by subpart A.
            (10) Participating dairy producer.--The term 
        ``participating dairy producer'' means a dairy producer that--
                    (A) registers under section 1412(b) to participate 
                in the margin protection program under subpart A; and
                    (B) as a result of such registration, also 
                participates in the stabilization program under subpart 
                B.
            (11) Production history.--The term ``production history'' 
        means the quantity of annual milk marketings determined for a 
        dairy producer under section 1413(a).
            (12) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (13) Stabilization program.--The term ``stabilization 
        program'' means the dairy market stabilization program required 
        by subpart B for all participating dairy producers.
            (14) Stabilization program base.--The term ``stabilization 
        program base'', with respect to a participating dairy producer, 
        means the stabilization program base calculated for the 
        producer under section 1431(b).
            (15) United states.--The term ``United States'', in a 
        geographical sense, means the 50 States.

SEC. 1402. CALCULATION OF AVERAGE FEED COST AND ACTUAL DAIRY PRODUCER 
              MARGINS.

    (a) Calculation of Average Feed Cost.--The Secretary shall 
calculate the national average feed cost for each month using the 
following data:
            (1) The price of corn for a month shall be the price 
        received during that month by farmers in the United States for 
        corn, as reported by the National Agricultural Statistics 
        Service.
            (2) The price of soybean meal for a month shall be the 
        central Illinois price for soybean meal, as reported by the 
        Agricultural Marketing Service.
            (3) The price of alfalfa hay for a month shall be the price 
        received during that month by farmers in the United States for 
        alfalfa hay, as reported by the National Agricultural 
        Statistics Service.
    (b) Calculation of Actual Dairy Producer Margins.--
            (1) Margin protection program.--For use in the margin 
        protection program under subpart A, the Secretary shall 
        calculate the actual dairy producer margin for each consecutive 
        two-month period by subtracting--
                    (A) the average feed cost for that consecutive two-
                month period, determined in accordance with subsection 
                (a); from
                    (B) the all-milk price for that consecutive two-
                month period.
            (2) Stabilization program.--For use in the stabilization 
        program under subpart B, the Secretary shall calculate (not 
        later than 20th of each month) the actual dairy producer margin 
        for the preceding month by subtracting--
                    (A) the average feed cost for that preceding month, 
                determined in accordance with subsection (a); from
                    (B) the all-milk price for that preceding month.

          Subpart A--Dairy Producer Margin Protection Program

SEC. 1411. ESTABLISHMENT OF DAIRY PRODUCER MARGIN PROTECTION PROGRAM.

    The Secretary shall establish and administer a dairy producer 
margin protection program for the purpose of protecting dairy producer 
income by paying participating dairy producers--
            (1) basic margin protection payments when actual dairy 
        producer margins are less than the threshold levels for such 
        payments; and
            (2) supplemental margin protection payments if purchased by 
        a participating dairy producer.

SEC. 1412. ELIGIBILITY AND REGISTRATION OF DAIRY PRODUCERS FOR MARGIN 
              PROTECTION PROGRAM.

    (a) Eligibility.--All dairy producers in the United States are 
eligible to participate in the margin protection program, except that a 
dairy producer must be registered with the Secretary before the 
producer may receive--
            (1) basic margin protection payments under section 1414; 
        and
            (2) if the dairy producer purchases supplemental margin 
        protection under section 1415, supplemental margin protection 
        payments under such section.
    (b) Registration Process.--
            (1) In general.--The Secretary shall register all 
        interested dairy producers in the margin protection program. 
        The Secretary shall specify the manner and form by which a 
        dairy producer must register.
            (2) Treatment of multi-producer operations.--If a dairy 
        operation consists of more than one dairy producer, all of the 
        dairy producers of the operation shall be treated as a single 
        dairy producer for purposes of--
                    (A) registration to receive basic margin protection 
                and purchase supplemental margin protection;
                    (B) payment of the administrative fee under 
                subsection (d) and producer premiums under section 
                1415; and
                    (C) participation in the stabilization program 
                under subpart B.
            (3) Treatment of producers with multiple dairy 
        operations.--If a dairy producer operates two or more dairy 
        operations, each dairy operation of the producer shall require 
        a separate registration to receive basic margin protection and 
        purchase supplemental margin protection. Only those dairy 
        operations so registered shall be subject to the stabilization 
        program.
    (c) Time for Registration.--
            (1) Existing dairy producers.--During the one-year period 
        beginning on the date of the enactment of this Act, a dairy 
        producer that is actively engaged in a dairy operation as of 
        such date may register with the Secretary--
                    (A) to receive basic margin protection; and
                    (B) if the producer elects, to purchase 
                supplemental margin protection.
            (2) New entrants.--A dairy producer that has no existing 
        interest in a dairy operation as of the date of the enactment 
        of this Act, but that, after such date, establishes a new dairy 
        operation, may register with the Secretary during the 180-day 
        period beginning on the date on which the dairy operation first 
        markets milk commercially--
                    (A) to receive basic margin protection; and
                    (B) if the producer elects, to purchase 
                supplemental margin protection.
    (d) Administrative Fee for Registration.--
            (1) Administrative fee required.--A dairy producer shall 
        pay an administrative fee under this subsection to register for 
        the margin protection program. The participating dairy producer 
        shall pay the administrative fee annually thereafter to remain 
        registered for the margin protection program.
            (2) Fee amount.--The administrative fee for a dairy 
        producer shall be as follows:
                    (A) If the dairy producer marketed less than 10 
                million pounds of milk in the previous calendar year, 
                the administrative fee shall be equal to $100.
                    (B) If the dairy producer marketed between 10 
                million and 40 million pounds of milk in the previous 
                calendar year, the administrative fee shall be equal to 
                $400.
                    (C) If the dairy producer marketed more than 40 
                million pounds of milk in the previous calendar year, 
                the administrative fee shall be equal to $1,000.
    (e) Reconstitution.--The Secretary shall ensure that a dairy 
producer does not reconstitute a dairy operation for the sole purpose 
of receiving basic margin protection, purchasing supplemental margin 
protection, or avoiding participation in the stabilization program.

SEC. 1413. PRODUCTION HISTORY AND ANNUAL PRODUCTION QUANTITY OF 
              PARTICIPATING DAIRY PRODUCERS.

    (a) Determination of Production History.--
            (1) Determination required.--The Secretary shall determine 
        the production history of the dairy operation of each 
        participating dairy producer in the margin protection program.
            (2) Calculation.--Except as provided in paragraph (3), the 
        production history of a participating dairy producer is equal 
        to the highest annual milk marketings of the dairy producer 
        during any one of the three calendar years immediately 
        preceding the dairy producer's registration for participation 
        in the margin protection program.
            (3) New producers.--If a dairy producer has been in 
        operation for less than a year, the Secretary shall determine 
        the production history of the dairy producer by extrapolating 
        the actual milk marketings for the months the dairy producer 
        has been in operation to a yearly amount.
            (4) No change in production history for basic margin 
        protection.--Once the production history of a participating 
        dairy producer is determined under paragraph (2) or (3), the 
        production history shall not be subsequently changed for 
        purposes of determining the amount of any basic margin 
        protection payments for the dairy producer made under section 
        1414.
    (b) Determination of Annual Production Quantity for Supplemental 
Margin Protection.--
            (1) Determination required.--If a dairy producer selects 
        the growth option when purchasing supplemental margin 
        protection under section 1415, the Secretary shall determine 
        the annual production quantity of the dairy operation of the 
        dairy producer under paragraph (2).
            (2) Calculation.--The annual production quantity of a 
        participating dairy producer is equal to the actual milk 
        marketings of the dairy producer during each calendar year in 
        which the dairy producer purchases supplemental margin 
        protection, including the calendar year during which the dairy 
        producer first purchases such supplemental margin protection.
    (c) Required Information.--A participating dairy producer shall 
provide all information that the Secretary may require in order to 
establish--
            (1) the production history of the dairy operation of the 
        dairy producer; and
            (2) the annual production quantity of the dairy operation 
        of the dairy producer if the dairy producer selects the growth 
        option when purchasing supplemental margin protection under 
        section 1415.
    (d) Transfer of Production History or Annual Production Quantity.--
            (1) Transfer by sale.--
                    (A) Request for transfer.--If an existing dairy 
                producer, as described in section 1412(c)(1), sells an 
                entire dairy operation to another party, the seller and 
                purchaser may jointly request that the Secretary 
                transfer to the purchaser the seller's interest in--
                            (i) production history of the dairy 
                        operation; and
                            (ii) if applicable, the annual production 
                        quantity of the dairy operation for each year 
                        in which the margin protection program has been 
                        in effect.
                    (B) Transfer.--If the Secretary determines that the 
                seller has sold the entire dairy operation to the 
                purchaser, the Secretary shall approve the transfer 
                described in subparagraph (A), and, thereafter, the 
                seller shall have no interest in--
                            (i) the production history of the sold 
                        dairy operation; or
                            (ii) if applicable, the annual production 
                        quantity of the dairy operation.
            (2) Transfer by lease.--
                    (A) Request for transfer.--If an existing dairy 
                producer, as described in section 1412(c)(1), leases an 
                entire dairy operation to another party, the lessor and 
                lessee may jointly request that the Secretary transfer 
                to the lessee for the duration of the term of the lease 
                the lessor's interest in--
                            (i) production history of the dairy 
                        operation; and
                            (ii) if applicable, the annual production 
                        quantity of the dairy operation for each year 
                        in which the margin protection program has been 
                        in effect.
                    (B) Transfer.--If the Secretary determines that the 
                lessor has leased the entire dairy operation to the 
                lessee, the Secretary shall approve the transfer 
                described in subparagraph (A), and, thereafter, the 
                lessor shall have no interest for the duration of the 
                term of the lease in--
                            (i) the production history of the leased 
                        dairy operation; or
                            (ii) if applicable, the annual production 
                        quantity of the dairy operation.
            (3) Coverage level.--
                    (A) Basic margin protection.--A purchaser or lessee 
                to whom the Secretary transfers a production history or 
                annual production quantity under this subsection may 
                not obtain a different level of basic margin protection 
                than the basic margin protection coverage held by the 
                seller or lessor from whom the transfer was obtained.
                    (B) Supplemental margin protection.--A purchaser or 
                lessee to whom the Secretary transfers a production 
                history or annual production quantity under this 
                subsection may not obtain a different level of 
                supplemental margin protection coverage than the 
                supplemental margin protection coverage held by the 
                seller or lessor from whom the transfer was obtained.
            (4) New entrants.--The Secretary may not transfer the 
        production history or annual production quantity determined for 
        a dairy producer described in section 1412(c)(2) to another 
        person.
    (e) Movement and Transfer of Production History or Annual 
Production Quantity.--
            (1) Movement and transfer authorized.--Subject to paragraph 
        (2), if a dairy producer moves from one location to another 
        location, the dairy producer may maintain the production 
        history and annual production quantity associated with the 
        operation.
            (2) Notification requirement.--A dairy producer shall 
        notify the Secretary of any move of a dairy operation under 
        paragraph (1).
            (3) Subsequent occupation of vacated location.--A party 
        subsequently occupying a dairy operation location vacated as 
        described in paragraph (1) shall have no interest in the 
        production history or annual production quantity previously 
        associated with the operation at such location.

SEC. 1414. BASIC MARGIN PROTECTION.

    (a) Eligibility.--All participating dairy producers are eligible to 
receive basic margin protection under the margin protection program.
    (b) Payment Threshold.--Participating dairy producers shall receive 
a basic margin protection payment whenever the average actual dairy 
producer margin for a consecutive two-month period is less than $4.00 
per hundredweight of milk.
    (c) Basic Margin Protection Payment.--
            (1) Payment required.--The Secretary shall make a basic 
        margin protection payment to each participating dairy producer 
        for a consecutive two-month period whenever such a payment is 
        required by subsection (b) for that period.
            (2) Amount of payment.--The basic margin protection payment 
        for the dairy operation of a participating dairy producer for a 
        consecutive two-month period shall be determined as follows:
                    (A) The Secretary shall calculate the difference 
                between the average actual dairy producer margin for 
                the consecutive two-month period and $4.00, except 
                that, if the difference is more than $4.00, the 
                Secretary shall use $4.00.
                    (B) The Secretary shall multiply the amount under 
                subparagraph (A) by of the lesser of the following:
                            (i) 80 percent of the production history of 
                        the dairy producer, divided by six.
                            (ii) The actual amount of milk marketed by 
                        the dairy operation of the dairy producer 
                        during the consecutive two-month period.

SEC. 1415. SUPPLEMENTAL MARGIN PROTECTION.

    (a) Election of Supplemental Margin Protection.--At the time of the 
registration of a dairy producer in the margin protection program under 
section 1412, the dairy producer may purchase supplemental margin 
protection to protect a higher level of the income of a participating 
dairy producer than the income level guaranteed by basic margin 
protection under section 1414.
    (b) Selection of Payment Threshold.--A participating dairy producer 
purchasing supplemental margin protection shall elect a coverage level 
that is higher, in any increment of $0.50, than the payment threshold 
for basic margin protection specified in section 1414(b), but not to 
exceed $8.00.
    (c) Selection of Coverage Percentage.--A participating dairy 
producer purchasing supplemental margin protection shall elect a 
percentage of coverage, equal to not more than 90 percent nor less than 
25 percent, of--
            (1) the production history of the dairy operation of the 
        participating dairy producer; or
            (2) if the participating dairy producer elects the growth 
        option under subsection (d)--
                    (A) the production history of the dairy operation 
                of the dairy producer, to be used for the calendar year 
                during which the dairy producer registers for 
                participation in the margin protection program; and
                    (B) for subsequent calendar years in which the 
                margin protection program is in effect, the greater 
                of--
                            (i) the production history of the dairy 
                        operation of the dairy producer; or
                            (ii) the highest annual production quantity 
                        of the dairy operation of the dairy producer 
                        during any previous calendar year in which the 
                        margin protection program was in effect.
    (d) Availability of Growth Option.--When a dairy producer purchases 
supplemental margin protection, the dairy producer may elect a growth 
option that authorizes the use of the annual production quantity of the 
dairy operation of the dairy producer, in lieu of production history, 
as provided in subsection (c)(2) to determine supplemental margin 
protection payments for the dairy producer under subsection (h).
    (e) Producer Premiums.--
            (1) Premiums required.--A participating dairy producer that 
        purchases supplemental margin protection shall pay an annual 
        premium equal to the product obtained by multiplying--
                    (A) the percentage selected by the dairy producer 
                under subsection (c);
                    (B) the production history or annual production 
                quantity applicable to the dairy producer under such 
                subsection; and
                    (C) the premium per hundredweight of milk, as 
                follows:

------------------------------------------------------------------------
           Coverage Level                      Premium per Cwt.
------------------------------------------------------------------------
                       $4.50                               $0.015
                       $5.00                               $0.036
                       $5.50                               $0.081
                       $6.00                               $0.155
                       $6.50                               $0.230
                       $7.00                               $0.434
                       $7.50                               $0.590
                       $8.00                              $0.922.
------------------------------------------------------------------------

            (2) Time for payment.--
                    (A) First year.--As soon as practicable after a 
                dairy producer registers to participate in the margin 
                protection program and purchases supplemental margin 
                protection, the dairy producer shall pay the premium 
                determined under paragraph (1) for the dairy producer 
                for the first calendar year of such supplemental margin 
                protection.
                    (B) Subsequent years.--When the dairy producer 
                first purchases supplemental margin protection, the 
                dairy producer shall also elect the method by which the 
                dairy producer will pay premiums under this subsection 
                for subsequent years in accordance with one of the 
                following schedules:
                            (i) Single annual payment.--The 
                        participating dairy producer may elect to pay 
                        100 percent of the annual premium determined 
                        under paragraph (1) for the dairy producer for 
                        a calendar year not later than January 15 of 
                        the calendar year.
                            (ii) Semi-annual payment.--The 
                        participating dairy producer may elect to pay 
                        50 percent of the annual premium determined 
                        under paragraph (1) for the dairy producer for 
                        a calendar year not later than January 15 of 
                        the calendar year and the remaining 50 percent 
                        of the premium not later than June 15 of the 
                        calendar year.
    (f) Producer's Premium Obligations.--
            (1) Pro-ration of first year premium.--A participating 
        dairy producer that purchases supplemental margin protection 
        after initial registration in the margin protection program 
        shall pay a pro-rated premium for the first calendar year based 
        on the date on which the producer purchases the coverage.
            (2) Subsequent premiums.--Other than as provided in 
        paragraph (1), the annual premium for a participating dairy 
        producer shall be determined under subsection (e) for each year 
        in which the margin protection program is in effect.
            (3) Legal obligation.--A participating dairy producer that 
        purchases supplemental margin protection shall be legally 
        obligated to pay the applicable premiums for the entire period 
        of the margin protection program (as provided in the payment 
        schedule elected under subsection (e)(2)), and may not opt out 
        of the margin protection program, except--
                    (A) if the dairy producer dies, the estate of the 
                deceased may cancel the supplemental margin protection 
                and shall not be responsible for any further premium 
                payments; or
                    (B) if the dairy producer retires, the producer may 
                request that Secretary cancel the supplemental margin 
                protection if the producer has terminated the dairy 
                operation entirely and certifies under oath that the 
                producer will not be actively engaged in any dairy 
                operation for at least the next seven years.
    (g) Supplemental Payment Threshold.--A participating dairy producer 
with supplemental margin protection shall receive a supplemental margin 
protection payment whenever the average actual dairy producer margin 
for a consecutive two-month period is less than the coverage level 
threshold selected by the dairy producer under subsection (b).
    (h) Supplemental Margin Protection Payments.--
            (1) In general.--The supplemental margin protection payment 
        for a participating dairy producer is in addition to the basic 
        margin protection payment.
            (2) Amount of payment.--The supplemental margin protection 
        payment for the dairy operation of a participating dairy 
        producer shall be determined as follows:
                    (A) The Secretary shall calculate the difference 
                between the coverage level threshold selected by the 
                dairy producer under subsection (b) and the greater 
                of--
                            (i) the average actual dairy producer 
                        margin for the consecutive two-month period; or
                            (ii) $4.00.
                    (B) The amount determined under subparagraph (A) 
                shall be multiplied by the percentage selected by the 
                dairy producer under subsection (c) and by the lesser 
                of the following:
                            (i) The production history or annual 
                        production quantity applicable to the producer 
                        under subsection (c), divided by six.
                            (ii) The actual amount of milk marketed by 
                        the dairy operation of the dairy producer 
                        during the consecutive two-month period.

SEC. 1416. EFFECT OF FAILURE TO PAY ADMINISTRATIVE FEES OR PREMIUMS.

    (a) Loss of Benefits.--A participating dairy producer that fails to 
pay the required administrative fee under section 1412 or is in arrears 
on premium payments for supplemental margin protection under section 
1415--
            (1) remains legally obligated to pay the administrative fee 
        or premiums, as the case may be; and
            (2) may not receive basic margin protection payments or 
        supplemental margin protection payments until the fees or 
        premiums are fully paid.
    (b) Enforcement.--The Secretary may take such action as necessary 
to collect administrative fees and premium payments for supplemental 
margin protection.

SEC. 1417. NO PAYMENT LIMITATIONS.

    Notwithstanding any other provision of law (except section 1416), 
basic margin protection payments and supplemental margin protection 
payments received by a participating dairy producer shall not be 
subject to limitations for any reason.

             Subpart B--Dairy Market Stabilization Program

SEC. 1431. ESTABLISHMENT OF DAIRY MARKET STABILIZATION PROGRAM.

    (a) Program Required; Purpose.--The Secretary shall establish and 
administer a dairy market stabilization program applicable to 
participating dairy producers for the purpose of assisting in balancing 
the supply of milk with demand when dairy producers are experiencing 
low or negative operating margins.
    (b) Election of Stabilization Program Base Calculation Method.--
            (1) Deadline for election.--Not later than January 15, 
        2012, each participating dairy producer shall inform the 
        Secretary of the method by which the stabilization program base 
        for the dairy producer for 2012 will be calculated under 
        paragraph (3).
            (2) Change in calculation method.--A participating dairy 
        producer may change the stabilization program base calculation 
        method to be used for a calendar year by notifying the 
        Secretary of the change not later than January 15 of that year.
            (3) Calculation methods.--A participating dairy producer 
        may elect either of the following methods for calculation of 
        the stabilization program base for the producer:
                    (A) The volume of the average monthly milk 
                marketings of the dairy producer for the three months 
                immediately preceding the announcement by the Secretary 
                that the stabilization program will become effective.
                    (B) The volume of the monthly milk marketings of 
                the dairy producer for the same month in the preceding 
                year as the month for which the Secretary has announced 
                the stabilization program will become effective.
    (c) Treatment of Multi-Producer Operations.--As provided in section 
1412(b)(2), if a dairy operation consists of more than one dairy 
producer, all of the dairy producers of the operation shall be treated 
as a single participating dairy producer for purposes of operation of 
the stabilization program with respect to the producers.
    (d) Treatment of Producers With Multiple Dairy Operations.--As 
provided in section 1412(b)(3), if a participating dairy producer 
operates two or more dairy operations, only those dairy operations of 
the dairy producer registered under section 1412 shall be subject to 
the stabilization program.

SEC. 1432. THRESHOLD FOR IMPLEMENTATION AND REDUCTION IN DAIRY PRODUCER 
              PAYMENTS.

    (a) When Stabilization Program Required.--The Secretary shall 
announce that the stabilization program is in effect and order reduced 
payments for any participating dairy producer that exceeds the 
applicable percentage of the producer's stabilization program base 
whenever--
            (1) the actual dairy producer margin has been $6.00 or less 
        per hundredweight of milk for the immediately preceding two 
        months; or
            (2) the actual dairy producer margin has been $4.00 or less 
        per hundredweight of milk for the immediately preceding month.
    (b) Effective Date for Implementation of Payment Reductions.--
Reductions in dairy producer payments shall commence beginning on the 
first day of the month immediately following the announcement by the 
Secretary under subsection (a).

SEC. 1433. PRODUCER MILK MARKETINGS INFORMATION.

    (a) Collection of Milk Marketing Data.--For each month during which 
the stabilization program is in effect, each handler shall calculate 
the following:
            (1) The volume of milk marketings the handler has received 
        from each participating dairy producer during that month.
            (2) The volume of milk marketings the handler has received 
        from each participating dairy producer during the same month of 
        the preceding year.
            (3) The volume of milk marketings the handler has received 
        from each participating dairy producer during each of the three 
        months preceding the month in which the Secretary makes the 
        announcement that the stabilization program will be in effect.
    (b) Effect of Changing Handlers.--If a participating dairy producer 
changes handlers, the producer shall ensure that milk marketings data 
required to make the calculations under subsection (a) is provided to 
the new handler.

SEC. 1434. CALCULATION AND COLLECTION OF REDUCED DAIRY PRODUCER 
              PAYMENTS.

    (a) Reduced Producer Payments Required.--During any month in which 
payment reductions are in effect under the stabilization program, each 
handler shall reduce payments to each participating dairy producer from 
whom the handler receives milk.
    (b) Reductions Based on Actual Dairy Producer Margin.--
            (1) Reduction requirement 1.--Unless the reduction required 
        by paragraph (2) or (3) applies, when the actual dairy producer 
        margin has been $6.00 or less per hundredweight of milk for two 
        consecutive months, the handler shall make payments to a 
        participating dairy producer for a month based on the greater 
        of the following:
                    (A) 98 percent of the stabilization program base of 
                the dairy producer.
                    (B) 94 percent of the marketings of milk for the 
                month by the producer.
            (2) Reduction requirement 2.--Unless the reduction required 
        by paragraph (3) applies, when the actual dairy producer margin 
        has been $5.00 or less per hundredweight of milk for two 
        consecutive months, the handler shall make payments to a 
        participating dairy producer for a month based on the greater 
        of the following:
                    (A) 97 percent of the stabilization program base of 
                the dairy producer.
                    (B) 93 percent of the marketings of milk for the 
                month by the producer.
            (3) Reduction requirement 3.--When the actual dairy 
        producer margin has been $4.00 or less for any one month, the 
        handler shall make payments to a participating dairy producer 
        for a month based on the greater of the following:
                    (A) 96 percent of the stabilization program base of 
                the dairy producer.
                    (B) 92 percent of the marketings of milk for the 
                month by the producer.
    (c) Continuation of Reductions.--The largest level of payment 
reduction required under paragraph (1), (2), or (3) of subsection (b) 
shall be continued for each month until the Secretary suspends the 
stabilization program and terminates payment reductions in accordance 
with section 1436.
    (d) Payment Reduction Exception.--Notwithstanding any preceding 
subsection of this section, a handler shall make no payment reductions 
for a dairy producer for a month if the producer's milk marketings for 
the month are equal to or less than the percentage of the stabilization 
program base applicable to the producer under paragraph (1), (2), or 
(3) of subsection (b).

SEC. 1435. REMITTING MONIES TO COMMODITY CREDIT CORPORATION.

    (a) Remitting Monies.--As soon as practicable after the end of each 
month during which payment reductions are in effect under the 
stabilization program, each handler shall remit to the Commodity Credit 
Corporation an amount equal to the amount by which payments to 
participating dairy producers are reduced by the handler under section 
1434.
    (b) Availability of Monies.--As soon as practicable after receipt 
of monies under subsection (a), the Commodity Credit Corporation shall 
make the monies available to the board of directors under section 1438.

SEC. 1436. SUSPENSION OF REDUCED PAYMENT REQUIREMENT.

    (a) Suspension Thresholds.--The Secretary shall suspend the 
stabilization program whenever the Secretary determines that--
            (1) the actual dairy producer margin is greater than $6.00 
        per hundredweight of milk for 2 consecutive months;
            (2)(A) the price for cheddar cheese or non-fat dry milk in 
        the United States, as determined by the National Agricultural 
        Statistics Service, is equal to or higher than the world price 
        of cheddar cheese or skim milk powder in Oceania, as determined 
        by the Secretary, for 2 consecutive months; and
            (B) the dairy producer margin is equal to or less than $6 
        for the same 2 consecutive months;
            (3)(A) the price for cheddar cheese or non-fat dry milk in 
        the United States, as determined by the National Agricultural 
        Statistics Service, is more than 5 percent higher than the 
        world price of cheddar cheese or skim milk powder in Oceania, 
        as determined by the Secretary, for 2 consecutive months; and
            (B) the dairy producer margin is equal to or less than $5 
        for the same 2 consecutive months; or
            (4)(A) the price for cheddar cheese or non-fat dry milk in 
        the United States, as determined by the National Agricultural 
        Statistics Service, is more than 10 percent higher than the 
        world price of cheddar cheese or skim milk powder in Oceania, 
        as determined by the Secretary, for 2 consecutive months; and
            (B) the dairy producer margin is equal to or less than $4 
        for the same 2 consecutive months.
    (b) Implementation by Handlers.--Handlers shall cease reducing 
payments to participating dairy producers under the stabilization 
program upon receiving notice of the suspension of the stabilization 
program from the Secretary.

SEC. 1437. AUDIT REQUIREMENTS.

    (a) Audits of Producer and Handler Compliance.--
            (1) Audits authorized.--If determined by the Secretary to 
        be necessary to ensure compliance by participating dairy 
        producers and handlers with the stabilization program, the 
        Secretary may conduct periodic audits of participating dairy 
        producers and handlers.
            (2) Sample of dairy producers.--Any audit conducted under 
        this subsection shall include, at a minimum, investigation of a 
        statistically valid and random sample of participating dairy 
        producers.
    (b) Audit by Inspector General.--
            (1) Audit required.--At the end of the second year of 
        operation of the stabilization program, the Inspector General 
        of the Department of Agriculture shall audit and evaluate the 
        effectiveness of the stabilization program. In conducting the 
        audit and evaluation, the Inspector General shall include the 
        use of established dairy economic models to ascertain the 
        effectiveness, operation, and administration of the program.
            (2) Submission of results.--The Inspector General shall 
        submit the results of the audit and evaluation conducted under 
        paragraph (1) to the Secretary, who shall make such 
        recommendations to Congress as the Secretary considers 
        appropriate regarding the stabilization program.

SEC. 1438. BOARD OF DIRECTORS.

    (a) Establishment; Purpose.--The Secretary shall establish a board 
of directors for the stabilization program for the purpose of--
            (1) administering the monies made available to the board of 
        directors under section 1435; and
            (2) determining the most effective use of such monies.
    (b) Appointment of Directors.--
            (1) Number and qualifications.--The Secretary shall appoint 
        15 members to serve on the board of directors, who shall be 
        representative of the United States dairy producer community, 
        taking into account geographical diversity, cooperative 
        membership, and volumes of milk produced in various States and 
        regions.
            (2) Reimbursement of expenses.--Monies made available to 
        the board of directors under section 1435 may be used to 
        reimburse a member of the board of directors for reasonable and 
        appropriate costs incurred by the member to serve on the board 
        of directors.
    (c) Decisionmaking.--The board of directors shall reach decisions 
by an affirmative vote of \2/3\ of its members.
    (d) Removal of Dairy Products and Expansion of Demand.--
            (1) Spending authority.--The board of directors shall have 
        the authority to use monies made available to the board of 
        directors under section 1435--
                    (A) to purchase dairy products through commercial 
                sources for donation to food banks and other food 
                programs that the Board determines appropriate, within 
                three months of collecting the funds; and
                    (B) to expand consumption and build demand for 
                dairy products.
            (2) No duplication of effort.--The board of directors shall 
        ensure that projects supported under paragraph (1) are 
        compatible with, and do not duplicate, programs supported by 
        the dairy research and promotion activities conducted under the 
        Dairy Production Stabilization Act of 1983 (7 U.S.C. 4501 et 
        seq.).
            (3) Management contract.--The board of directors may enter 
        into a contract with a managing entity to carry out this 
        subsection.
    (e) Accounting and Reporting Requirement.--
            (1) Accounting.--The board of directors shall keep an 
        accurate account of all monies made available to the board of 
        directors under section 1435.
            (2) Reporting.--Not later than December 31 of each year 
        that the stabilization program is in effect, the board of 
        directors shall provide to the Committee on Agriculture of the 
        House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a report that provides an 
        accurate accounting of the monies received by the board of 
        directors during that year and all expenditures made by the 
        board of directors during that year.

                Subpart C--Commodity Credit Corporation

SEC. 1451. USE OF COMMODITY CREDIT CORPORATION.

    The Secretary shall use the funds, facilities, and the authorities 
of the Commodity Credit Corporation to carry out this part.

                          Subpart D--Duration

SEC. 1461. DURATION.

    The Secretary shall conduct the margin protection program and the 
stabilization program during the period beginning on January 1, 2012, 
and ending on December 31, 2017.

              PART II--FEDERAL MILK MARKETING ORDER REFORM

SEC. 1471. REQUIRED AMENDMENTS TO FEDERAL MILK MARKETING ORDERS.

    (a) Amendments Required.--
            (1) In general.--The Secretary of Agriculture shall amend 
        each Federal milk marketing 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 
        (in this part referred to as a ``milk marketing order''), as 
        required by this section.
            (2) Relation to other laws.--Except as provided in section 
        1472, the Secretary shall execute the amendments required by 
        this section without regard to any provision of section 8c of 
        the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
        amendments by the Agricultural Marketing Agreement Act of 1937, 
        as in effect on the day before the date of the enactment of 
        this Act.
    (b) Use of End-Product Price Formulas.--The Secretary shall 
eliminate the use of end-product price formulas for setting prices for 
Class III milk, and instead use a competitive price for setting prices 
for Class III milk.
    (c) Administrative Authority.--In addition to and notwithstanding 
the authority provided under section 8d of the Agricultural Adjustment 
Act (7 U.S.C. 608d), reenacted with amendments by the Agricultural 
Marketing Agreement Act of 1937, the Secretary may--
            (1) require handlers to report, maintain, and make 
        available all information and records as the Secretary 
        considers necessary for the administration of any milk 
        marketing order; and
            (2) adopt only such conforming amendments to milk marketing 
        orders as the Secretary determines to be necessary to implement 
        the amendments required by this section.

SEC. 1472. AMENDMENT PROCESS.

    (a) In General.--The amendments to milk marketing orders required 
to be made by section 1471 shall be subject to the provisions of 
sections 8c(17) and 8c(19) of the Agricultural Adjustment Act (7 U.S.C. 
608c(17) and (19)), reenacted with amendments by the Agricultural 
Marketing Agreement Act of 1937, except as follows:
            (1) Notice of final decision on proposed amendments.--Not 
        later than 270 days after the date of the enactment of this 
        Act, the Secretary of Agriculture shall publish in the Federal 
        Register notice of a final decision on the proposed amendments 
        to be made to milk marketing orders in order to comply with the 
        requirements of section 1471.
            (2) Producer referendum.--
                    (A) Referendum required.--As soon as practicable 
                after publication of the final decision on the proposed 
                amendments under paragraph (1), the Secretary shall 
                conduct a producer referendum regarding the final 
                decision on the proposed amendments.
                    (B) Terms of referendum; exceptions.--The producer 
                referendum shall be conducted in the manner provided by 
                section 8c(19) of the Agricultural Adjustment Act (7 
                U.S.C. 608c(19)), reenacted with amendments by the 
                Agricultural Marketing Agreement Act of 1937, except 
                that--
                            (i) the referendum shall be a single 
                        referendum upon which approval or failure of 
                        the proposed amendments to all milk marketing 
                        orders shall depend; and
                            (ii) the proposed amendments shall require 
                        approval by \1/2\ of participating producers or 
                        by volume of production (rather than \2/3\) in 
                        order for the referendum to pass and the 
                        proposed amendments to take effect.
                    (C) Effect of failure.--If the referendum fails, 
                the milk marketing orders shall remain in force as in 
                effect before the proposed amendments were published.
    (b) Effect of Court Order.--In the event that the Secretary is 
enjoined or otherwise restrained by a court order from executing the 
amendments to milk marketing orders required by section 1471, the 
length of time for which that injunction or other restraining order is 
effective shall be added to any time limitation in effect under 
paragraph (1) or (2) of subsection (a), thereby extending those time 
limitations by a period of time equal to the period of time for which 
the injunction or other restraining order is in effect.
    (c) Relation to Other Amendment Authority.--Nothing in this part 
affects the authority of the Secretary to subsequently amend milk 
marketing orders, or the ability of producers or other persons to seek 
such amendments, in accordance with the rulemaking process provided by 
section 8c(17) of the Agricultural Adjustment Act (7 U.S.C. 608c(17)), 
reenacted with amendments by the Agricultural Marketing Agreement Act 
of 1937.

SEC. 1473. DEVELOPMENT OF EFFECTIVE BALANCING PROGRAMS FOR MILK 
              MARKETS.

    (a) Advanced Notice of Proposed Rulemaking.--Not later than 90 days 
after the enactment of this Act, the Secretary of Agriculture shall 
publish in the Federal Register an Advanced Notice of Proposed 
Rulemaking seeking public comment on, and proposals recommending, 
effective programs that address the issues of the costs of balancing 
milk markets, including the use of inter- and intra-marketing 
transportation credits. The Secretary shall solicit comments and 
proposals that--
            (1) address the market's balancing needs;
            (2) target support to those producers and handlers who 
        provide balancing services; and
            (3) provide compensation that is in line with the costs of 
        providing the services and with the benefits to the market of 
        the services.
    (b) Timeliness of Rulemaking.--Not later than one year after the 
date of the enactment of this Act, the Secretary shall--
            (1) initiate formal rulemaking (by publishing in the 
        Federal Register a hearing notice) in response to the public 
        comments received under subsection (a); or
            (2) publish notice of the reasons that such a rulemaking is 
        not to be initiated.

SEC. 1474. STUDY ON ELIMINATION OF MILK MARKETING ORDERS.

    (a) In General.--The Secretary shall study the effects on the 
marketplace associated with the elimination of the Federal milk 
marketing orders.
    (b) Requirements.--The study under this section shall, at a 
minimum, address--
            (1) the regional differences in milk prices that would 
        result from the elimination of the Federal milk marketing 
        orders, compared to the regional differences derived from the 
        order system in effect on the day before the date of enactment 
        of this Act;
            (2) shifts in milk production patterns and product use that 
        would derive from the elimination;
            (3) an examination of changes in the flow of milk and what 
        would be required for milk to move from surplus to deficit 
        regions in the absence of the orders;
            (4) the potential for any premiums to be paid for milk in 
        fluid use form and what, if any, regional differences in those 
        premiums might exist;
            (5) the potential impact on export markets; and
            (6) potential changes in market price volatility.
    (c) Report.--Not later than 180 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 conducted under this section, including any recommendations.

               PART III--REPEAL OF SUPERSEDED PROVISIONS

SEC. 1481. REPEAL OF DAIRY PRODUCT PRICE SUPPORT AND MILK INCOME LOSS 
              CONTRACT PROGRAMS.

    (a) Repeal of Dairy Product Price Support Program.--Section 1501 of 
the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8771) is 
repealed.
    (b) Repeal of Milk Income Loss Contract Program.--Section 1506 of 
the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) is 
repealed.

SEC. 1482. REPEAL OF PERMANENT PRICE SUPPORT AUTHORITY FOR MILK.

    (a) Repeal.--
            (1) In general.--Section 201 of the Agricultural Act of 
        1949 (7 U.S.C. 1446) is amended--
                    (A) in subsection (a) (as amended by section 
                1302(c)(3)), by striking ``honey, and milk,'' and 
                inserting ``and honey''; and
                    (B) by striking subsections (c) and (d).
            (2) Conforming amendments.--Section 256(j) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
        906(j)) is amended--
                    (A) by striking paragraph (5); and
                    (B) redesignating paragraph (6) as paragraph (5).
    (b) Exclusion From Price Support for Other Nonbasic Agricultural 
Commodities.--Section 301 of the Agricultural Act of 1949 (7 U.S.C. 
1447) is amended by inserting ``(other than milk)'' after 
``agricultural commodity''.

SEC. 1483. REPEAL OF DAIRY EXPORT INCENTIVE PROGRAM.

    (a) In General.--Section 153 of the Food Security Act of 1985 (15 
U.S.C. 713a-14) is repealed.
    (b) Conforming Amendments.--Section 902(2) of the Trade Sanctions 
Reform and Export Enhancement Act of 2000 (22 U.S.C. 7201(2)) is 
amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraphs (E) and (F) as 
        subparagraphs ((D) and (E).

SEC. 1484. EFFECTIVE DATE.

    The amendments made by this part shall take effect on January 1, 
2012.

                         TITLE II--CONSERVATION

                Subtitle A--Conservation Reserve Program

SEC. 2001. CONSERVATION RESERVE PROGRAM.

    (a) In General.--Section 1231(a) of the Food Security Act of 1985 
(16 U.S.C. 3831(a)) is amended--
            (1) by striking ``(a) In General.--Through the 2012 fiscal 
        year'' and inserting the following:
    ``(a) Authority.--
            ``(1) In general.--Through the 2017 fiscal year''; and
            (2) by adding at the end the following:
            ``(2) Relationship to easement benefits program.--
                    ``(A) In general.--The Secretary shall administer 
                the conservation reserve program in conjunction with 
                the easement benefits program under subchapter C in a 
                manner that encourages landowners to enroll land in the 
                easement benefits program to maximize the long-term 
                benefits of fiscal outlay.
                    ``(B) Transfer.--The Secretary shall make available 
                to all owners and operators enrolled in the 
                conservation reserve program the option to transfer the 
                enrolled land into the easement benefits program under 
                subchapter C.
            ``(3) Minimization of costs.--
                    ``(A) New contracts.--In entering into contracts 
                under the conservation reserve program, the Secretary 
                shall seek to minimize cost by allowing limited 
                commercial use of land under contract, as authorized 
                under section 1232(a)(3) and subparagraphs (A) through 
                (D) of section 1232(a)(8).
                    ``(B) Existing contracts.--
                            ``(i) In general.--Not later than 2 years 
                        after the date of enactment of the Rural 
                        Economic Farm and Ranch Sustainability and 
                        Hunger Act of 2011, the Secretary shall make 
                        available a revision of contracts in existence 
                        on the date of enactment of this subsection to 
                        allow limited commercial usage under the 
                        contracts of not less than 5,000,000 acres of 
                        land (such as for prescribed or routing grazing 
                        and managed harvesting), subject to conditions 
                        in section 1232.
                            ``(ii) Use of savings.--Any amounts saved 
                        through contract revisions described in clause 
                        (i) may, as determined the Secretary, be used--
                                    ``(I) to expand the provision of 
                                technical assistance; and
                                    ``(II) to provide incentives for 
                                owners or operators to shift land into 
                                the easement benefits program.''.
    (b) Eligible Land.--
            (1) In general.--Section 1231(b) of the Food Security Act 
        of 1985 (16 U.S.C. 3831(b)) is amended--
                    (A) in paragraph (4)--
                            (i) in subparagraph (B)--
                                    (I) in clause (i), by striking 
                                ``or'' at the end;
                                    (II) in clause (ii), by adding 
                                ``or'' at the end; and
                                    (III) by adding at the end the 
                                following:
                            ``(iii) riparian buffer or filter strip 
                        planted to grass, shrubs, trees or other 
                        appropriate vegetation, as determined by the 
                        Secretary;''; and
                            (ii) in subparagraph (E), by striking 
                        ``or'' at the end;
                    (B) in subparagraph (5)(B)(ii), by striking the 
                period at the end and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(6) subject to subsection (j), land--
                    ``(A) that is wetland (including a converted 
                wetland described in section 1222(b)(1)(A)) that had a 
                cropping history during at least 3 of the immediately 
                preceding 10 crop years;
                    ``(B) on which a constructed wetland is to be 
                developed that will receive flow from a row crop 
                agriculture drainage system and is designed to provide 
                nitrogen removal in addition to other wetland 
                functions;
                    ``(C) that was devoted to commercial pond-raised 
                aquaculture in any year during the period of calendar 
                years 2002 through 2007; or
                    ``(D) that, after January 1, 1990, and before 
                December 31, 2002, was--
                            ``(i) cropped during at least 3 of 10 crop 
                        years; and
                            ``(ii) subject to the natural overflow of a 
                        prairie wetland; or
            ``(7) subject to subsection (j), buffer acreage that--
                    ``(A) with respect to land described in 
                subparagraph (A), (B), or (C) of paragraph (6)--
                            ``(i) is contiguous to such land;
                            ``(ii) is used to protect such land; and
                            ``(iii) is of such width as the Secretary 
                        determines is necessary to protect such land, 
                        taking into consideration and accommodating the 
                        farming practices (including the straightening 
                        of boundaries to accommodate machinery) used 
                        with respect to the cropland that surrounds 
                        such land; and
                    ``(B) with respect to land described in 
                subparagraph (D) of paragraph (6), enhances a wildlife 
                benefit.''.
            (2) Limitations and duties relating to enrolled wetland and 
        buffer acreage.--Section 1231 of the Food Security Act of 1985 
        (16 U.S.C. 3831) is amended by adding at the end the following:
    ``(j) Limitations and Duties Relating to Enrolled Wetland and 
Buffer Acreage.--
            ``(1) Enrollment limitations.--
                    ``(A) Wetland and related land.--
                            ``(i) Wetlands and constructed wetlands.--
                        The maximum size of any land described in 
                        subparagraph (A) or (B) of subsection (b)(6) 
                        that an owner or operator may enroll in the 
                        conservation reserve shall be 40 contiguous 
                        acres.
                            ``(ii) Flooded farmland.--The maximum size 
                        of any land described in subparagraph (D) of 
                        subsection (b)(6) that an owner or operator may 
                        enroll in the conservation reserve shall be 20 
                        contiguous acres.
                            ``(iii) Coverage.--All acres described in 
                        clause (i) or (ii), including acres that are 
                        ineligible for payment, shall be covered by the 
                        conservation contract.
                    ``(B) Buffer acreage.--The maximum size of any 
                buffer acreage described in subsection (b)(7) that an 
                owner or operator may enroll in the conservation 
                reserve shall be determined by the Secretary, in 
                consultation with the State Technical Committee.
                    ``(C) Tracts.--Except for land described in 
                subsection (b)(6)(C) and buffer acreage relating to 
                that land, the maximum size of any eligible acreage 
                described in subsection (b)(6) in a tract of an owner 
                or operator enrolled in the conservation reserve under 
                this section shall be 40 acres.
            ``(2) Duties of owners and operators.--During the term of a 
        contract entered into involving land described in paragraph (6) 
        or (7) of subsection (b), an owner or operator shall agree to a 
        prohibition of commercial use except for activities conducive 
        to conservation of the enrolled land, as determined by the 
        Secretary.''.
    (c) Maximum Enrollment.--Section 1231 of the Food Security Act of 
1985 (16 U.S.C. 3831) is amended by striking subsection (d) and 
inserting the following:
    ``(d) Maximum Enrollment.--
            ``(1) In general.--The Secretary may maintain in the 
        conservation reserve at any 1 time, not more than--
                    ``(A) during fiscal year 2012, 30,000,000 acres;
                    ``(B) during fiscal year 2013, 26,000,000 acres; 
                and
                    ``(C) during each of fiscal years 2014 through 
                2017, 24,000,000 acres.
            ``(2) Transfer of enrollment.--The Secretary may transfer 
        enrolled acre allowance from the conservation reserve program 
        to the easement benefits program established under subchapter 
        C.''.
    (d) Conservation Priority Areas.--Section 1231(f)(1) of the Food 
Security Act of 1985 (16 U.S.C. 3831(f)(1)) is amended by striking 
``areas of the Chesapeake Bay Region, the Great Lakes Region, the Long 
Island Sound Region, and other''.

SEC. 2002. PILOT PROGRAM FOR ENROLLMENT OF WETLAND AND BUFFER ACREAGE 
              IN CONSERVATION RESERVE.

    Section 1231B of the Food Security Act of 1985 (16 U.S.C. 3831b) is 
repealed.

SEC. 2003. DUTIES OF OWNERS AND OPERATORS.

    Section 1232(a)(8)(C) of the Food Security Act of 1985 (16 U.S.C. 
3832(a)(8)(C)) is amended by striking ``for the control of invasive 
species''.

SEC. 2004. PAYMENTS.

    Section 1234 of the Food Security Act of 1985 (16 U.S.C. 3834) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by inserting ``not more 
                than'' before ``50 percent'';
                    (B) in paragraph (3)(B)(i), by inserting ``not more 
                than'' before ``50 percent'';
                    (C) by redesignating paragraph (5) as paragraph 
                (6); and
                    (D) by inserting after paragraph (4) the following:
            ``(5) Prescribed burning.--Notwithstanding any other 
        provision of this section, in making cost-sharing payments to 
        an owner or operator under a contract entered into under this 
        subchapter, the Secretary shall pay not more than 75 percent of 
        the cost of prescribed burning.''; and
            (2) in subsection (c)(5), by adding at the end the 
        following:
                    ``(C) Review required.--The Secretary shall 
                periodically review the competitiveness of rental rates 
                for land that--
                            ``(i) provides substantial environmental 
                        benefits consistent with the purposes of this 
                        subchapter;
                            ``(ii) provides critical habitat to species 
                        of concern; or
                            ``(iii) meets other ecological priorities, 
                        as determined by the Secretary.''.

SEC. 2005. CONTRACTS.

    Section 1235 of the Food Security Act of 1985 (16 U.S.C. 3835) is 
amended--
            (1) in subsection (a)(1)--
                    (A) in subparagraph (C), by striking ``or'' at the 
                end;
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(E) the new ownership was acquired by the 
                sibling, parent, child, or grandchild of the previous 
                owner.''; and
            (2) in subsection (f)(1)(D), by striking ``conservation 
        stewardship program or the environmental quality incentives 
        program'' and inserting ``working land program''.

SEC. 2006. CONVERSION OF LAND SUBJECT TO CONTRACT TO OTHER CONSERVING 
              USES.

    Section 1235A of the Food Security Act of 1985 (16 U.S.C. 3835a) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (2)(B), by inserting ``not more 
                than'' before ``50'';
                    (B) striking ``(1) In general.--The Secretary'' and 
                inserting the following:
            ``(1) November 28, 1990.--
                    ``(A) In general.--The Secretary'';
                    (C) by redesignating subparagraphs (A) and (B) of 
                paragraph (2) as clauses (i) and (ii), respectively, 
                and indenting appropriately;
                    (D) by redesignating paragraph (2) as subparagraph 
                (B) and indenting appropriately; and
                    (E) by adding at the end the following:
            ``(2) October 1, 2011.--The Secretary shall permit an owner 
        or operator that has entered into a contract under this 
        subchapter that is in effect on October 1, 2011, to convert 
        areas of highly erodible cropland that are subject to the 
        contract, and that are devoted to vegetative cover, from that 
        use to forest land if--
                    ``(A) the areas are prior converted forest land;
                    ``(B) the owner or operator of the areas enters 
                into an agreement to provide the Secretary with a long-
                term or permanent easement under the easement benefits 
                program under subchapter C covering the areas;
                    ``(C) there is a high probability that the prior 
                converted area can be successfully restored to forest 
                land status; and
                    ``(D) the restoration of the areas otherwise meets 
                the requirements the easement benefits program.'';
            (2) in subsection (b), by striking ``November 28, 1990'' 
        and inserting ``October 1, 2011''; and
            (3) by adding at the end the following:
    ``(e) Early Contract Opt-Out.--
            ``(1) In general.--The Secretary shall--
                    ``(A) make available a no-penalty early contract 
                opt-out for not less than 8,000,000 acres enrolled 
                under contracts in existence on the date of enactment 
                of this subsection;
                    ``(B) not later than 1 year after the date of 
                enactment of this subsection, ensure that not less than 
                \1/2\ of the required acreage has been made available 
                to be opted-out of the conservation reserve program;
                    ``(C) not later than 2 years after the date of 
                enactment of this subsection, ensure that the entire 
                amount of required acreage has been made available to 
                opt-out; and
                    ``(D) terminate a contract entered into with an 
                owner or operator offered an early opt-out under this 
                subchapter if the owner or operator agrees to the 
                termination.
            ``(2) Considerations.--In determining land to offer for 
        opt-out under this subsection, the Secretary shall--
                    ``(A) make available for opt-out those acres 
                offering the least environmental benefit, as determined 
                by the Secretary;
                    ``(B) consider the need to protect critical habitat 
                (including nesting areas for birds); and
                    ``(C) maintain in the conservation reserve land of 
                high environmental value (including wetland), as 
                determined by the Secretary, and including--
                            ``(i) riparian buffers;
                            ``(ii) wildlife habitat buffers;
                            ``(iii) wetland buffers;
                            ``(iv) filter strips;
                            ``(v) grass waterways;
                            ``(vi) wetland restoration areas;
                            ``(vii) shelterbelts;
                            ``(viii) living snow fences;
                            ``(ix) contour grass strips;
                            ``(x) land with a high erodibility index;
                            ``(xi) salt-tolerant vegetation; and
                            ``(xii) shallow-water areas for wildlife.
            ``(3) Subdivision.--In carrying out this subsection, the 
        Secretary may subdivide leased acres enrolled in the 
        conservation reserve under the same contract.
            ``(4) Conditions.--
                    ``(A) Commodity production.--If land that was 
                subject to a contract under this subchapter is 
                converted to production of an agricultural commodity 
                through the opt-out under this subsection, the land 
                shall be subject to a conservation plan determined by 
                the Secretary in coordination with the State technical 
                committee for the duration of what would have been the 
                full term of the conservation reserve contract of the 
                land, if not for opt-out.
                    ``(B) Grazing and managed harvesting.--If land that 
                was subject to a contract under this subchapter is 
                converted to grazing and managed harvesting through the 
                opt-out under this subsection, the land shall be 
                subject to environmental management criteria pursuant 
                section 1232(a)(8) for the duration of what would have 
                been the full term of the conservation reserve contract 
                of the land, if not for opt-out.
                    ``(C) Technical assistance.--The Secretary shall 
                make available conservation technical assistance to 
                owners and operators that opt-out of the conservation 
                reserve under this subsection.
            ``(5) Effective date.--Contract termination under the opt-
        out shall become effective 60 days after the date on which the 
        owner or operator accepts the opt-off offer of the Secretary.
            ``(6) 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.''.

                 Subtitle B--Easement Benefits Program

SEC. 2101. EASEMENT BENEFITS PROGRAM.

    (a) In General.--Title XII of the Food Security Act of 1985 (16 
U.S.C. 3801 et seq.) is amended--
            (1) by striking subchapters C and D of chapter 2 of 
        subtitle D (16 U.S.C. 3838h et seq.); and
            (2) by striking subchapter C of chapter 1 of subtitle D (16 
        U.S.C. 3837 et seq.) and inserting the following:

               ``Subchapter C--Easement Benefits Program

``SEC. 1237. EASEMENT BENEFITS PROGRAM.

    ``(a) Establishment.--The Secretary shall establish an easement 
benefits program (referred to in this subchapter as the `program')--
            ``(1) to protect land (including wildlife resources of the 
        land) and water; and
            ``(2) to address issues raised by State, regional, and 
        national conservation initiatives.
    ``(b) Purposes.--
            ``(1) In general.--The purposes of the program are--
                    ``(A) to restore, enhance, conserve, and protect 
                land (including wildlife resources of the land) and 
                water;
                    ``(B) to protect vulnerable and ecologically 
                important land;
                    ``(C) to restore, protect, and enhance wetland and 
                grassland;
                    ``(D) to promote wildlife habitat;
                    ``(E) to protect the agricultural use and related 
                conservation values of prime and other productive 
                agricultural land by limiting the nonagricultural uses 
                of the land;
                    ``(F) to restore and enhance forest ecosystems, 
                including the recovery of threatened and endangered 
                species and improving biodiversity;
                    ``(G) to provide assistance to owners to ensure the 
                economic use of enrolled land by owners consistent with 
                long-term conservation functions and values, including 
                wildlife resources of the land; and
                    ``(H) to address issues of restoration, 
                conservation, and protection of land (including 
                wildlife resources of the land) and water raised by 
                State, regional, and national conservation priorities.
            ``(2) State coordination.--The Secretary shall give 
        priority consideration to conservation needs identified by 
        State technical committees established under section 1261.
    ``(c) Existing Easements.--
            ``(1) In general.--Any easement or interest in land 
        enrolled as of the date of enactment of the Rural Economic Farm 
        and Ranch Sustainability and Hunger Act of 2011 in 1 of the 
        programs described in paragraph (2) shall be considered 
        enrolled in the easement benefits program under this 
        subchapter.
            ``(2) Affected programs.--The programs described in this 
        paragraph are as the programs were authorized on the day before 
        the date of enactment of the Rural Economic Farm and Ranch 
        Sustainability and Hunger Act of 2011--
                    ``(A) the wetlands reserve program established 
                under this subchapter;
                    ``(B) the grassland reserve program established 
                under subchapter D of chapter 2;
                    ``(C) the farmland protection program established 
                under subchapter C of chapter 2; and
                    ``(D) the healthy forests reserve program 
                established under section 501 of the Healthy Forests 
                Restoration Act of 2003 (16 U.S.C. 6571).

``SEC. 1237A. EASEMENTS AND 30-YEAR CONTRACTS.

    ``(a) Enrollment.--
            ``(1) In general.--Lands may be enrolled under this 
        subchapter through the submission of applications under a 
        competitive procedure established by the Secretary.
            ``(2) Methods of enrollment.--
                    ``(A) In general.--The Secretary shall enroll 
                acreage into the program through the use of--
                            ``(i) permanent easements; and
                            ``(ii) 30-year easements, or in a State 
                        that imposes a maximum duration for easements, 
                        easements for the maximum duration allowed 
                        under State law (referred to as `nonpermanent 
                        easements').
                    ``(B) Acreage owned by indian tribes.--In the case 
                of acreage owned by an Indian tribe, the Secretary may 
                also enroll acreage into the program through the use of 
                a 30-year contract (the value of which shall be 
                equivalent to the value of a 30-year easement).
            ``(3) Enrollment of conservation reserve land.--
                    ``(A) Transfer from the conservation reserve 
                program.--The Secretary may terminate or modify an 
                existing contract entered into the conservation reserve 
                program under section 1231 if eligible land that is 
                subject to the contract is transferred into the program 
                established by this subchapter.
                    ``(B) Priority.--On expiration of a contract under 
                the conservation reserve program under subchapter B, 
                the Secretary shall give priority for enrollment in the 
                program to land previously enrolled in the conservation 
                reserve program if--
                            ``(i) the land is eligible land under 
                        subsection (b); and
                            ``(ii) the Secretary determines that the 
                        land is of high ecological value.
                    ``(C) Special funding pool.--
                            ``(i) In general.--Of the funds made 
                        available for the program for each of the 2013 
                        through 2017 fiscal years, the Secretary shall 
                        reserve 10 percent of the funds to ensure an 
                        adequate source of funds and acres to give 
                        priority for enrollment of land identified 
                        under subparagraph (B).
                            ``(ii) Reobligation.--Funds not obligated 
                        under clause (i) by April 1 of each year may be 
                        available for use for other purposes of the 
                        program.
    ``(b) Eligible Land.--
            ``(1) Enrollment.--
                    ``(A) In general.--Eligible land shall be enrolled 
                into the program subject to appropriate program 
                requirements depending on the resource objectives 
                sought to be achieved through the easement or 30-year 
                contract, as determined by the Secretary.
                    ``(B) Eligibility.--Private or tribal land shall be 
                eligible to be enrolled into the program if the 
                Secretary determines that the land--
                            ``(i) maximizes the purpose of this 
                        subchapter;
                            ``(ii) is enrolled in the conservation 
                        reserve program; or
                            ``(iii) in the case of land enrolled for 
                        restoration purposes, the likelihood of the 
                        successful restoration of the land and the 
                        resultant values merit the inclusion of the 
                        land in the program taking into consideration 
                        the cost of the restoration.
            ``(2) Wetland.--
                    ``(A) In general.--Land shall be eligible to be 
                enrolled into the program if the Secretary determines 
                that the land is--
                            ``(i) farmed wetland or converted wetland, 
                        together with the adjacent land that is 
                        functionally dependent on the wetland, except 
                        that converted wetland with respect to which 
                        the conversion was not commenced prior to 
                        December 23, 1985, shall not be eligible to be 
                        enrolled in the program;
                            ``(ii) cropland or grassland that was used 
                        for agricultural production prior to flooding 
                        from the natural overflow of a closed basin 
                        lake or pothole, as determined by the 
                        Secretary, together (if practicable) with the 
                        adjacent land that is functionally dependent on 
                        the cropland or grassland;
                            ``(iii) farmed wetland and adjoining land, 
                        enrolled in the conservation reserve, with the 
                        highest wetland functions and values, and that 
                        is likely to return to production after the 
                        land is not enrolled in the conservation 
                        reserve;
                            ``(iv) other wetland (such as filter strips 
                        and vernal pools) of an owner that would not 
                        otherwise be eligible if the Secretary 
                        determines that the inclusion of the wetland in 
                        the easement would significantly add to the 
                        functional value of the easement; or
                            ``(v) a riparian area.
                    ``(B) Restoration agreement.--Land described in 
                subparagraph (A) that is enrolled in the program shall 
                be subject to a restoration agreement that provides the 
                opportunity for the restoration and enhancement of the 
                enrolled land.
            ``(3) Grassland.--
                    ``(A) In general.--Land shall be eligible to be 
                enrolled into the program if the Secretary determines 
                that the land is at risk of conversion to nongrazing 
                uses and is--
                            ``(i) grassland, land that contains forbs, 
                        or shrubland (including improved rangeland and 
                        pastureland), including land for which grazing 
                        is the predominant use; or
                            ``(ii) located in an area that has been 
                        historically dominated by grassland, forbs, or 
                        shrubland, and the land--
                                    ``(I) could provide habitat for 
                                animal or plant populations of 
                                significant ecological value if the 
                                land--
                                            ``(aa) is retained in the 
                                        current use of the land; or
                                            ``(bb) is restored to a 
                                        natural condition; or
                                    ``(II) contains historical or 
                                archaeological resources.
                    ``(B) Restoration agreement.--Land described in 
                subparagraph (A) that is enrolled in the program shall 
                be subject to a restoration agreement that provides the 
                opportunity for the restoration and enhancement of the 
                enrolled land.
            ``(4) Forest land.--
                    ``(A) In general.--Land shall be eligible to be 
                enrolled into the program if the Secretary determines 
                that the land is land, the enrollment of which--
                            ``(i) will restore and conserve forest 
                        land, improve biodiversity, or conserve land 
                        from the conservation reserve program that is 
                        being restored to forest land;
                            ``(ii) will restore, enhance, or otherwise 
                        measurably increase the likelihood of recovery 
                        of a species listed as endangered or threatened 
                        under section 4 of the Endangered Species Act 
                        of 1973 (16 U.S.C. 1533); or
                            ``(iii) will restore, enhance, or otherwise 
                        measurably improve the well-being of a species 
                        that--
                                    ``(I) is not listed as endangered 
                                or threatened under section 4 of the 
                                Endangered Species Act of 1973 (16 
                                U.S.C. 1533); but
                                    ``(II) is candidates for such 
                                listing, State-listed species, or 
                                special concern species.
                    ``(B) Restoration agreement.--Land described in 
                subparagraph (A) that is enrolled in the program shall 
                be subject to a restoration agreement that provides the 
                opportunity for the restoration and enhancement of the 
                enrolled land.
            ``(5) Prime and productive agricultural land.--Land shall 
        be eligible to be enrolled into the program if the Secretary 
        determines that the land is at risk of conversion to 
        nonagricultural uses and--
                    ``(A) has prime, unique, or other productive soil;
                    ``(B) contains historical or archaeological 
                resources; or
                    ``(C) the protection of the land will further a 
                State or local policy consistent with the purposes of 
                the program.
    ``(c) Other Eligible Land.--
            ``(1) In general.--The Secretary may enroll other land of 
        the owner that would not otherwise be eligible if the land is 
        determined by the Secretary to be necessary for the efficient 
        administration of the 30-year contract or easement under the 
        program.
            ``(2) Type of land.--Land enrolled under this subsection 
        may include small areas of land as defined by the Secretary, 
        such as riparian zones, filter strips, buffers, fence lines, 
        and other incidental land.
    ``(d) Leveraging Non-Federal Investment.--The Secretary may enter 
into 1 or more agreements with a State (including a political 
subdivision or agency of a State), nongovernmental organization, or 
Indian tribe to carry out a special enhancement program that the 
Secretary determines would advance the purposes of the program.

``SEC. 1237B. DUTIES OF OWNERS.

    ``(a) Easements.--To be eligible to enroll eligible land in the 
program under an easement, the owner of the land shall agree--
            ``(1) to grant an easement to the Secretary;
            ``(2) to create and record an appropriate deed restriction 
        in accordance with applicable State law to reflect the 
        easement;
            ``(3) to provide a written statement of consent to the 
        easement signed by persons holding a security interest or any 
        vested interest in the land;
            ``(4) to comply with the terms of the easement and related 
        agreements;
            ``(5) to comply with the easement implement plan, as 
        approved by the Secretary, which may be modified upon mutual 
        agreement of the parties if the Secretary authorizes compatible 
        uses; and
            ``(6) to the permanent retirement of any existing cropland 
        base and allotment history for the land under any program 
        administered by the Secretary, unless the purpose of the 
        particular easement is limited to the prevention of the 
        conversion of prime and productive agricultural land to 
        nonagricultural uses.
    ``(b) Restoration Agreements.--
            ``(1) In general.--To be eligible for financial assistance 
        to restore eligible land subject to a 30-year contract or an 
        easement under the program, the owner of the land shall agree 
        to comply with the terms of a restoration agreement.
            ``(2) Type of agreement.--A restoration agreement may be--
                    ``(A) a cost-share agreement with the owner;
                    ``(B) a cooperative agreement with an agency or 
                organization with restoration expertise; or
                    ``(C) a contract with a vendor.
            ``(3) Terms and conditions.--The Secretary shall prescribe 
        the terms and conditions of a restoration agreement by which 
        eligible land that is subject to a 30-year contract or easement 
        under the program shall be restored.
            ``(4) Duties.--The restoration agreement shall describe the 
        respective duties of the parties to the agreement, including 
        the Federal share of restoration payments and technical 
        assistance.
    ``(c) Terms and Conditions Applicable to Easements and 30-Year 
Contracts.--
            ``(1) Reserved rights.--
                    ``(A) In general.--An easement or 30-year contract 
                entered into under the program shall provide to the 
                Secretary control of the surface rights of the land 
                while identifying rights reserved to the owner for 
                specified usages consistent with the purposes of the 
                particular enrollment so as--
                            ``(i) to maximize conservation benefits 
                        (including wildlife habitat) per dollar spent 
                        across the program; and
                            ``(ii) to allow the owner uses of the land 
                        that are consistent with the purposes for which 
                        the land is enrolled.
                    ``(B) Limitations on activities.--Rights reserved 
                to the owner shall be consistent with the wetland, 
                grassland, forest land, or productive land purposes for 
                which the land is enrolled.
            ``(2) Easement conservation plan.--
                    ``(A) In general.--The Secretary shall develop an 
                easement conservation plan for each easement or 30-year 
                contract enrolled in the program that will identify how 
                land enrolled in the program will be restored, if 
                applicable, and managed.
                    ``(B) Modification.--An easement conservation plan 
                shall be modified in response to changing resource 
                conditions to ensure that the purposes of the program 
                are achieved.
                    ``(C) Local and state involvement.--An easement 
                conservation plan, including any compatible use that 
                may be authorized for the owner under the program, 
                shall be made through the local Natural Resources 
                Conservation Service representative, in coordination 
                with the State technical committee.
                    ``(D) Permissible activities.--Consistent with 
                paragraph (3), an easement conservation plan shall 
                identify the following activities as permissible:
                            ``(i) Grassland.--In the case of grassland, 
                        an easement conservation plan shall permit--
                                    ``(I) common grazing practices, 
                                including maintenance and necessary 
                                cultural practices, on the land that is 
                                consistent with maintaining the 
                                viability of grassland, forb, and shrub 
                                species appropriate to that locality;
                                    ``(II) haying, mowing, or 
                                harvesting for seed production or 
                                biomass, subject to appropriate 
                                restrictions during the nesting season 
                                for birds in the local area, consistent 
                                with Federal or State law and in 
                                coordination with the State technical 
                                committee, as determined by the 
                                Secretary;
                                    ``(III) fire presuppression, 
                                rehabilitation, and construction of 
                                fire breaks; and
                                    ``(IV) grazing-related activities, 
                                such as fencing and livestock watering.
                            ``(ii) Wetland.--In the case of wetland, an 
                        easement conservation plan shall permit 
                        repairs, improvements, and inspections of the 
                        land that are necessary to maintain existing 
                        public drainage systems if the land is 
                        subsequently restored to the condition required 
                        by the terms of the easement.
                            ``(iii) All enrolled land.--
                                    ``(I) In general.--In the case of 
                                all enrolled land, the easement 
                                conservation plan shall permit the 
                                owner--
                                            ``(aa) to conduct any 
                                        activities that are inherent 
                                        and necessary to rights that 
                                        are reserved to the owner under 
                                        the terms of the easement or 
                                        30-year contract and have been 
                                        identified as compatible use in 
                                        the easement conservation 
                                        program;
                                            ``(bb) to control public 
                                        access; and
                                            ``(cc) in accordance with 
                                        subclause (II), the right to 
                                        undeveloped recreational uses, 
                                        including undeveloped hunting 
                                        and fishing and leasing of 
                                        those rights for economic gain, 
                                        pursuant to applicable State 
                                        and Federal laws (including 
                                        regulations).
                                    ``(II) Undeveloped recreational 
                                uses.--Undeveloped recreational uses 
                                under subclause (I)(cc)--
                                            ``(aa) shall be consistent 
                                        with the long-term protection 
                                        and enhancement of the 
                                        conservation purposes and other 
                                        natural values of the easement 
                                        area; and
                                            ``(bb) may include hunting 
                                        equipment, such as tree stands 
                                        and hunting blinds that are 
                                        rustic and customary for the 
                                        locale, as determined by the 
                                        Secretary.
                    ``(E) Prohibited activities.--An easement 
                conservation plan shall identify the following 
                activities as prohibited:
                            ``(i) Grassland.--In the case of grassland, 
                        an easement conservation plan shall prohibit 
                        the production of crops (other than hay or 
                        grass grown for biomass harvest), fruit trees, 
                        vineyards, or any other agricultural commodity 
                        that is inconsistent with maintaining grazing 
                        land.
                            ``(ii) Wetland.--In the case of wetland, an 
                        easement conservation plan shall prohibit--
                                    ``(I) the alteration of wildlife 
                                habitat and other natural features of 
                                the land, unless specifically permitted 
                                by the easement conservation plan; and
                                    ``(II) the spraying of the land 
                                with chemicals or the mowing of the 
                                land, unless spraying or mowing is--
                                            ``(aa) permitted by the 
                                        easement conservation plan to 
                                        meet the habitat needs of 
                                        specific wildlife species; or
                                            ``(bb) necessary to comply 
                                        with Federal or State noxious 
                                        weed control laws and emergency 
                                        pest treatment program.
                            ``(iii) All enrolled land.--In the case of 
                        all enrolled land, the easement conservation 
                        plan shall prohibit--
                                    ``(I) any activities to be carried 
                                out on the land of the owner that is 
                                immediately adjacent to, and 
                                functionally related to, the land that 
                                is subject to the easement if the 
                                activities will alter, degrade, or 
                                otherwise diminish the functional value 
                                of the eligible land; and
                                    ``(II) the adoption of any other 
                                practice that would tend to defeat the 
                                purposes of this subchapter, as 
                                determined by the Secretary.
            ``(3) Compatible uses by the owner.--
                    ``(A) In general.--Land enrolled in the program may 
                be used for compatible uses if the use is specifically 
                permitted by an easement conservation plan and 
                consistent with the long-term protection and 
                enhancement of the resources for which the easement was 
                established.
                    ``(B) Authorized uses.--The Secretary may authorize 
                the use of the easement area for compatible uses under 
                the terms of the easement deed or contract, even if the 
                uses were not identified as compatible at the time of 
                easement enrollment.
                    ``(C) Limitations.--
                            ``(i) In general.--Compatible use 
                        authorizations shall only be made if the 
                        Secretary determines, in coordination with the 
                        State technical committee, that the amount, 
                        timing, intensity, and duration of the 
                        compatible use ensures that the purposes of the 
                        program will be achieved.
                            ``(ii) Inclusions.--Compatible uses under 
                        clause (i) may include managed haying and 
                        grazing for grassland (including the managed 
                        harvesting of biomass) or timber harvesting or 
                        managed harvesting of biomass of forest land.
            ``(4) Additional terms and conditions.--A 30-year contract 
        or easement under the program shall include such additional 
        provisions as the Secretary determines are appropriate to carry 
        out or facilitate the purposes and administration of the 
        program.
    ``(d) Compliance.--On a violation of the terms or conditions of a 
30-year contract or easement under this subchapter--
            ``(1) the contract or easement shall remain in force; and
            ``(2) the Secretary may require the owner to refund all or 
        part of any payments received under the program, with interest 
        on the payments as determined appropriate by the Secretary.

``SEC. 1237C. DUTIES OF THE SECRETARY.

    ``(a) In General.--In return for the granting of an easement by an 
owner under this subchapter, the Secretary shall--
            ``(1) share the cost of carrying out the establishment of 
        conservation measures and practices, including necessary 
        maintenance activities, as described in the easement 
        conservation plan associated with the easement to the extent 
        that the Secretary determines that cost sharing is appropriate 
        and in the public interest; and
            ``(2) provide necessary technical assistance to assist 
        owners in complying with the terms and conditions of the 
        easement and the easement conservation plan.
    ``(b) Ranking of Offers.--When evaluating offers from owners, the 
Secretary may consider--
            ``(1) the cost-effectiveness of each easement or other 
        interest in the eligible land, so as to maximize the 
        environmental benefits per dollar expended;
            ``(2) whether the owner or another individual or legal 
        entity is offering to contribute financially to the cost of the 
        easement or other interest in the land to leverage Federal 
        funds;
            ``(3) the conservation and wildlife habitat benefits of 
        obtaining an easement or other interest in the land;
            ``(4) the relative threat of conversion of the land to 
        development or row cropping, as applicable;
            ``(5) the extent to which the purposes of the easement 
        program would be achieved on the land offered for enrollment; 
        and
            ``(6) other factors the Secretary determines are 
        appropriate to select among offers with similar resource 
        concerns and objectives.
    ``(c) Easement Priority.--In carrying out this subchapter, to the 
extent practicable taking into consideration costs and future 
agricultural and food needs, the Secretary shall give priority--
            ``(1) to obtaining permanent conservation easements before 
        shorter-term conservation easements; and
            ``(2) in consultation with the Secretary of the Interior, 
        to acquiring easements based on the value of the easements for 
        protecting vulnerable land and protecting and enhancing habitat 
        for migratory birds and other wildlife.
    ``(d) Technical Assistance.--The Secretary shall provide owners 
with technical assistance to assist the owners in complying with the 
terms of the easement, 30-year contract, and associated easement 
conservation plans under the program.
    ``(e) Payments to Others.--If an owner who is entitled to a payment 
under the program dies, becomes incompetent, is otherwise unable to 
receive the payment, or is succeeded by another person who renders or 
completes the required performance, the Secretary shall make the 
payment, in accordance with regulations promulgated by the Secretary 
and without regard to any other provision of law, in such manner as the 
Secretary determines is fair and reasonable in light of all the 
circumstances.

``SEC. 1237D. PAYMENTS.

    ``(a) In General.--Effective on the date of enactment of the Rural 
Economic Farm and Ranch Sustainability and Hunger Act of 2011, the 
Secretary shall pay as compensation for a permanent conservation 
easement acquired under this subchapter the lowest of--
            ``(1) the fair market value of the land, as determined by 
        the Secretary, using the Uniform Standards of Professional 
        Appraisal Practices or an area-wide market analysis or survey;
            ``(2) the amount corresponding to a geographical cap, as 
        determined by the Secretary in regulations; or
            ``(3) the offer made by the owner.
    ``(b) Form of Payment.--Compensation for an easement shall be 
provided by the Secretary in the form of a cash payment, in an amount 
determined under subsection (a) and specified in the easement 
agreement.
    ``(c) Payment Schedule for Easements.--
            ``(1) Easements valued at $500,000 or less.--For easements 
        valued at $500,000 or less, the Secretary may provide easement 
        payments in not more than 30 annual payments.
            ``(2) Easements in excess of $500,000.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for easements valued at more than 
                $500,000, the Secretary may provide easement payments 
                in at least 5, but not more than 30, annual payments.
                    ``(B) Exception.--If the Secretary determines it 
                would further the purposes of the program, the 
                Secretary may make a lump sum payment for an easement 
                described in subparagraph (A).
    ``(d) Restoration Payments.--
            ``(1) Payment rates.--In making restoration payments, the 
        Secretary shall seek to minimize Federal costs and may offer--
                    ``(A) in the case of a permanent easement, to pay 
                an amount that is not more than 90 percent of the 
                eligible costs; and
                    ``(B) in the case of a nonpermanent easement 
                described in section 1237A(a)(2)(A)(ii) or a 30-year 
                contract, to pay an amount that is not more than 70 
                percent of the eligible costs.
            ``(2) Restoration offset.--The Secretary shall deduct as a 
        closing cost from the easement compensation to be paid, the 
        estimated share of the owner of the restoration costs, and that 
        payment shall be--
                    ``(A) determined complete and final for purposes of 
                meeting the cost-share responsibility of the owner; and
                    ``(B) administered using the restoration funds of 
                the Secretary.
    ``(e) Exemption From Automatic Sequester.--Notwithstanding any 
other provision of law, no order issued under section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
902) shall affect any payment under this subchapter.

``SEC. 1237E. DELEGATION OF DUTY.

    ``(a) Definition of Eligible Entity.--In this section, the term 
`eligible entity' means--
            ``(1) an agency of State or local government or an Indian 
        tribe; or
            ``(2) an organization that--
                    ``(A) 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;
                    ``(B) is an organization described in section 
                501(c)(3) of that Code that is exempt from taxation 
                under section 501(a) of that Code; and
                    ``(C) is described in--
                            ``(i) paragraph (1) or (2) of section 
                        509(a) of that Code; or
                            ``(ii) in section 509(a)(3) of that Code, 
                        and is controlled by an organization described 
                        in section 509(a)(2) of that Code.
    ``(b) Authority To Delegate.--
            ``(1) In general.--The Secretary may delegate a duty under 
        the program--
                    ``(A) by transferring title of ownership to an 
                easement originally acquired by the Secretary to an 
                eligible entity to hold and enforce; or
                    ``(B) by entering into a cooperative agreement with 
                an eligible entity for the eligible entity to own, 
                write, and enforce an easement that the Secretary 
                determines will further the purposes of the program.
            ``(2) Delegation of easement administration of easements 
        acquired by the secretary.--
                    ``(A) In general.--The Secretary may delegate any 
                of the easement management, monitoring, and enforcement 
                responsibilities of the Secretary under the program to 
                Federal or State agencies or other eligible entities 
                that the Secretary determines have the appropriate 
                authority, expertise, and resources necessary to carry 
                out the delegated responsibilities.
                    ``(B) Secretarial discretion.--The Secretary may 
                determine that the delegation to a particular agency or 
                eligible entity is appropriate for 1 type of easement 
                and not appropriate for another type of easement, 
                depending on the resource purposes for which an 
                easement is acquired.
            ``(3) Transfer of title of ownership.--
                    ``(A) Transfer.--The Secretary may transfer title 
                of ownership to an easement to an eligible entity to 
                hold and enforce, in lieu of the Secretary, subject to 
                the right of the Secretary to conduct periodic 
                inspections and enforce the easement, if--
                            ``(i) the Secretary determines that the 
                        transfer will promote long-term protection of 
                        the easement;
                            ``(ii) the owner authorizes the eligible 
                        entity to hold or enforce the easement; and
                            ``(iii) the eligible entity agrees to 
                        assume the costs incurred in administering and 
                        enforcing the easement, including the costs of 
                        restoration or rehabilitation of the land as 
                        determined by the Secretary.
                    ``(B) Application.--An eligible entity that seeks 
                to hold and enforce an easement that has been acquired 
                by the Secretary shall apply to the Secretary for 
                approval.
                    ``(C) Approval by secretary.--The Secretary may 
                approve an application described in subparagraph (B) if 
                the eligible entity--
                            ``(i) has the relevant experience necessary 
                        for the particular resources to be protected, 
                        as appropriate for the application, to 
                        administer an easement previously acquired by 
                        the Secretary;
                            ``(ii) has a charter that describes a 
                        commitment to furthering the particular 
                        conservation purposes for which an easement was 
                        originally acquired by the Secretary; and
                            ``(iii) has the resources necessary to 
                        effectuate the purposes of this subchapter.
    ``(c) Cooperative Agreements.--
            ``(1) Authorized; terms and conditions.--The Secretary 
        shall establish the terms and conditions of a cooperative 
        agreement under which an eligible entity shall use funds 
        provided by the Secretary to own, write, and enforce an 
        easement, in lieu of the Secretary.
            ``(2) Minimum requirements.--At a minimum, the cooperative 
        agreement shall--
                    ``(A) specify the qualification of the eligible 
                entity to carry out the responsibilities of the 
                eligible entity under the program, including 
                acquisition, monitoring, enforcement, and 
                implementation of management policies and procedures 
                that ensure the long-term integrity of the easement 
                protections;
                    ``(B) require the eligible entity 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 
                Secretary;
                    ``(C) specify the right of the Secretary to conduct 
                periodic inspections to verify the enforcement by the 
                eligible entity of the easement;
                    ``(D) subject to subparagraph (E), identify a 
                specific project or a range of projects to be funded 
                under the agreement;
                    ``(E) allow, upon mutual agreement of the parties, 
                substitution of qualified projects that are identified 
                at the time of substitution;
                    ``(F) specify the manner in which the eligible 
                entity will evaluate and report the use of funds to the 
                Secretary;
                    ``(G) allow the eligible entity flexibility to 
                develop and use terms and conditions for easements, if 
                the Secretary finds the terms and conditions consistent 
                with the purposes of the program and adequate to enable 
                effective enforcement of the easements; and
                    ``(H) provide for a schedule of payments to an 
                eligible entity, as agreed to by the Secretary and the 
                eligible entity.
            ``(3) Cost sharing.--
                    ``(A) In general.--As part of a cooperative 
                agreement with an eligible entity under this 
                subsection, the Secretary may provide a share of the 
                purchase price of an easement under the program.
                    ``(B) Minimum share by eligible entity.--
                            ``(i) In general.--The eligible entity 
                        shall be required to provide a share of the 
                        purchase price at least equivalent to that 
                        provided by the Secretary.
                            ``(ii) Amount of share.--The Secretary 
                        shall base the share on the amount that the 
                        Secretary would have paid for an easement 
                        acquired directly by the Secretary under this 
                        subchapter.
                    ``(C) Priority.--The Secretary may accord a higher 
                priority to proposals from eligible entities that 
                leverage a greater share of the purchase price of the 
                easement.
                    ``(D) Minimization of federal expense.--In 
                determining cost-share levels, the Secretary--
                            ``(i) shall seek to minimize Federal costs; 
                        and
                            ``(ii) may provide an amount less than the 
                        maximum cost-share authorized under this 
                        section.
    ``(d) Certification of Eligible Entities.--
            ``(1) Certification process.--The Secretary shall establish 
        a process under which the Secretary may--
                    ``(A) directly certify eligible entities that meet 
                established criteria;
                    ``(B) enter into long-term agreements with 
                certified entities; and
                    ``(C) accept proposals for cost-share assistance to 
                certified entities for the purchase of conservation 
                easements throughout the duration of the agreements.
            ``(2) Certification criteria.--In order to be certified, an 
        eligible entity shall demonstrate to the Secretary that the 
        entity will maintain, at a minimum, for the duration of the 
        agreement--
                    ``(A) a plan for administering easements that is 
                consistent with the purpose of this subchapter;
                    ``(B) the capacity and resources to monitor and 
                enforce easements; and
                    ``(C) policies and procedures to ensure--
                            ``(i) the long-term integrity of easements;
                            ``(ii) timely completion of acquisitions of 
                        easements; and
                            ``(iii) timely and complete evaluation and 
                        reporting to the Secretary on the use of funds 
                        provided by the Secretary under the program.
            ``(3) Review and revision.--
                    ``(A) Review.--The Secretary shall conduct a review 
                of eligible entities certified under paragraph (1) at 
                least every 3 years to ensure that the entities are 
                meeting the criteria established under paragraph (2).
                    ``(B) Revocation.--If the Secretary finds that the 
                certified entity no longer meets the criteria 
                established under paragraph (2), the Secretary may--
                            ``(i) allow the certified entity a 
                        specified period of time of not less than 180 
                        days in which to take such actions as may be 
                        necessary to meet the criteria; and
                            ``(ii) revoke the certification of the 
                        entity, if after the specified period of time, 
                        the certified entity does not meet the criteria 
                        established in paragraph (2).
    ``(e) Protection of Federal Investment.--
            ``(1) In general.--If delegating a duty under this section, 
        the Secretary shall ensure that the terms of an easement 
        include a right of enforcement for the Department.
            ``(2) Violation.--If an agency or other eligible entity 
        violates the terms or conditions of a delegated responsibility 
        or associated cooperative agreement entered into under this 
        section--
                    ``(A) the delegation, and any associated 
                cooperative agreement, may be revoked or terminated; 
                and
                    ``(B) the Secretary may required the agency or 
                other eligible entity to refund all or part of any 
                payments received by the agency or eligible entity 
                under the program, with interest on the payments as 
                determined appropriate by the Secretary.

``SEC. 1237F. CHANGES IN OWNERSHIP AND AGREEMENT MODIFICATION.

    ``(a) Limitations.--No easement shall be created under this 
subchapter on land that has changed ownership during the preceding 2-
year period unless the Secretary determines that--
            ``(1) the new ownership was acquired by will or succession 
        as a result of the death of the previous owner;
            ``(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;
            ``(3) the land was acquired under circumstances that give 
        adequate assurances that the land was not acquired for the 
        purposes of placing the land in the program; or
            ``(4) the new ownership was acquired by the sibling, 
        parent, child, or grandchild of the previous owner.
    ``(b) Modification, Exchange, and Termination.--
            ``(1) In general.--The Secretary may subordinate, exchange, 
        terminate, or modify any easement or other interest in land 
        administered by the Natural Resources Conservation Service, 
        either directly or on behalf of the Commodity Credit 
        Corporation, when the Secretary determines that--
                    ``(A) it is in the interest of the Federal 
                Government to subordinate, exchange, modify, or 
                terminate the easement or other interest in the land;
                    ``(B) the action will address a compelling public 
                need or will further the practical administration of 
                the program;
                    ``(C) the action will result in comparable 
                conservation value and equal or greater economic value 
                to the United States; and
                    ``(D) the current owner agrees to the modification.
            ``(2) Notice.--At least 90 days before taking any action to 
        terminate an easement or other interest in land, the Secretary 
        shall provide written notice of the action to the Committee on 
        Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate.
    ``(c) Enforceability.--An easement, contract, or other agreement 
entered into under the program shall continue to be legally enforceable 
on the land for the duration of the easement, contract, or other 
agreement, regardless of whether the ownership of the land changes.

``SEC. 1237G. PROTECTIONS.

    ``(a) Protections.--In the case of an owner that enrolls land in 
the program under an agreement that includes protection of vulnerable 
species and whose conservation activities result in a net conservation 
benefit for listed, candidate, or other species, the Secretary shall 
make available to the owner safe harbor or similar assurances and 
protection under--
            ``(1) section 7(b)(4) of the Endangered Species Act of 1973 
        (16 U.S.C. 1536(b)(4)); or
            ``(2) section 10(a)(1) of that Act (16 U.S.C. 1539(a)(1)).
    ``(b) Measures.--If protection under subsection (a) requires the 
taking of measures that are in addition to the measures covered by the 
applicable restoration plan agreed to under the program, the cost of 
the additional measures, as well as the cost of any permit, shall be 
considered part of the restoration plan for purposes of financial 
assistance under the program.

``SEC. 1237H. FUNDING.

    ``(a) In General.--Of the funds of the Commodity Credit 
Corporation, the Secretary shall use to carry out this subchapter 
$1,000,000,000 for each fiscal year.
    ``(b) Additional Funding.--In addition to the funds made available 
under subsection (a), there is authorized to be appropriated to carry 
out this subchapter $500,000,000 for each fiscal year.
    ``(c) Use of Funds.--Of amounts made available to carry out this 
section for a fiscal year, the Secretary shall use--
            ``(1) not less than 5 percent of the funds to enroll forest 
        land in the program eligible under section 1237A(b)(4);
            ``(2) not more than 5 percent to enroll prime and 
        productive agricultural land eligible under section 
        1237A(b)(5);
            ``(3) not more than 5 percent to enroll land eligible under 
        section 1237E(c); and
            ``(4) not less than 8 percent of the funds to provide 
        technical assistance.
    ``(d) Acceptance of Contributions.--Notwithstanding any other 
provision of law, the Secretary may accept and use contributions of 
non-Federal funds to make payments under this section.''.
    (b) Conforming Amendments.--
            (1) Chapter 1 of subtitle D of the Food Security Act of 
        1985 (16 U.S.C. 3830 et seq.) is amended in the chapter heading 
        by inserting ``, CONSERVATION RESERVE, AND EASEMENT BENEFITS 
        PROGRAM''.
            (2) Section 1238A of the Food Security Act of 1985 (16 
        U.S.C. 3838a) is amended--
                    (A) in subsection (b)(3)--
                            (i) by striking subparagraphs (B) and (C) 
                        and inserting the following:
                    ``(B) Easement benefits program.--Land enrolled in 
                the easement benefits program established under 
                subchapter C of chapter 1 shall not be eligible for 
                enrollment in the conservation security program.''; and
                            (ii) by redesignating subparagraph (D) as 
                        subparagraph (C); and
                    (B) in subsection (e)(2)(B)(ii)(I)(cc), by striking 
                ``wetlands reserve program'' and inserting ``easement 
                benefits program''.
            (3) Section 1252(c) of the Food Security Act of 1985 (16 
        U.S.C. 3851(c)) is amended--
                    (A) by striking ``(c) Funding Source.--'' and all 
                that follows through ``the Secretary'' in paragraph (1) 
                and inserting the following:
    ``(c) Funding Source.--The Secretary''; and
                    (B) by striking paragraph (2).

                    Subtitle C--Working Land Program

SEC. 2201. WORKING LAND PROGRAM.

    (a) In General.--Title XII of the Food Security Act of 1985 (16 
U.S.C. 3801 et seq.) is amended--
            (1) by striking subchapter B of chapter 2 of subtitle D (16 
        U.S.C. 3838d et seq.);
            (2) by striking section 1240N (16 U.S.C. 3839bb-1); and
            (3) by striking chapter 4 of subtitle D (16 U.S.C. 3839aa) 
        and inserting the following:

                   ``CHAPTER 4--WORKING LAND PROGRAM

``SEC. 1240. WORKING LAND PROGRAM.

    ``(a) Purposes.--The Secretary shall establish a working land 
program to promote agricultural production, forest management, 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 sustain food and fiber 
        production while--
                    ``(A) enhancing soil, water, and related natural 
                resources, including grazing land, forestland, wetland, 
                and wildlife; and
                    ``(B) improving energy efficiency and increasing 
                use of renewable energy;
            ``(4) assisting producers to make beneficial, cost-
        effective changes to production systems (including conservation 
        practices relating to organic production), grazing management, 
        fuels management, forest management, nutrient management 
        associated with livestock, pest or irrigation management, or 
        other practices on agricultural and forested 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.
    ``(b) Definitions.--In this chapter:
            ``(1) Conservation activities.--
                    ``(A) In general.--The term `conservation 
                activities' means conservation systems, practices, or 
                management measures that are designed to address a 
                resource concern.
                    ``(B) Inclusions.--The term `conservation 
                activities' includes--
                            ``(i) structural measures, vegetative 
                        measures, and land management measures, 
                        including agriculture drainage management 
                        systems, as determined by the Secretary; and
                            ``(ii) planning needed to address a 
                        resource concern.
            ``(2) Eligible land.--
                    ``(A) In general.--The term `eligible land' means 
                land on which agricultural commodities, livestock, or 
                forest-related products are produced.
                    ``(B) Inclusions.--The term `eligible land' 
                includes--
                            ``(i) cropland;
                            ``(ii) grassland;
                            ``(iii) rangeland;
                            ``(iv) pasture land;
                            ``(v) nonindustrial private forest land; 
                        and
                            ``(vi) other agricultural land (including 
                        cropped woodland, marshes, areas devoted to 
                        aquaculture and associated waters, and 
                        agricultural land used or capable of being used 
                        for the production of livestock) on which 
                        resource concerns relating to agricultural 
                        production could be addressed through a 
                        contract under the program, as determined by 
                        the Secretary.
                    ``(C) Exclusions.--The term `eligible land' does 
                not include any land enrolled in--
                            ``(i) the conservation reserve program 
                        under subchapter B of chapter 1; or
                            ``(ii) the easement benefits program under 
                        subchapter C of chapter 1.
            ``(3) Organic system plan.--The term `organic system plan' 
        means an organic plan approved under the national organic 
        program established under the Organic Foods Production Act of 
        1990 (7 U.S.C. 6501 et seq.).
            ``(4) Partner.--The term `partner' means any entity that 
        enters into a partnership agreement with the Secretary to carry 
        out a program on a regional basis, including--
                    ``(A) an agricultural or silvicultural producer 
                association or other group of such producers;
                    ``(B) a State or unit of local government; or
                    ``(C) an Indian tribe.
            ``(5) Partnership agreement.--The term `partnership 
        agreement' means an agreement between the Secretary and a 
        partner to carry out a practice under the program.
            ``(6) Payment.--The term `payment' means financial 
        assistance provided for performing practices under this 
        chapter, including compensation for--
                    ``(A) incurred costs associated with planning, 
                design, materials, equipment, installation, labor, 
                management, maintenance, or training; and
                    ``(B) income forgone by the producer.
            ``(7) Practice.--The term `practice' means 1 or more 
        improvements and conservation activities that are consistent 
        with the purposes of the program, as determined by the 
        Secretary, including--
                    ``(A) improvements to eligible land of the 
                producer, including--
                            ``(i) structural practices;
                            ``(ii) land management practices;
                            ``(iii) vegetative practices;
                            ``(iv) forest management; and
                            ``(v) other practices that the Secretary 
                        determines would further the purposes of the 
                        program; and
                    ``(B) conservation activities involving the 
                development of plans appropriate for the eligible land 
                of the producer, including--
                            ``(i) comprehensive nutrient management 
                        planning; and
                            ``(ii) other plans that the Secretary 
                        determines would further the purposes of the 
                        program under this part.
            ``(8) Priority resource concern.--The term `priority 
        resource concern' means a resource concern that is identified 
        at the State level, in consultation with the State technical 
        committee, as a priority for a particular watershed or area of 
        the State.
            ``(9) Producer.--The term `producer' has the meaning given 
        the term in section 1238.
            ``(10) Program.--The term `program' means the working land 
        program established under this chapter.
            ``(11) Resource concern.--The term `resource concern' means 
        a specific natural resource impairment or problem, as 
        determined by the Secretary, that--
                    ``(A) represents a significant concern in a State 
                or region; and
                    ``(B) is likely to be addressed successfully 
                through the implementation of conservation activities 
                by producers on land eligible for enrollment in the 
                program.

``SEC. 1240A. ESTABLISHMENT AND ADMINISTRATION.

    ``(a) In General.--During each of the 2013 through 2017 fiscal 
years, the Secretary shall provide payments to producers and partners 
that enter into contracts or partnership agreements with the Secretary 
under the program.
    ``(b) Evaluation of Applications.--
            ``(1) Evaluation criteria.--The Secretary shall develop 
        criteria for evaluating applications that will ensure that 
        national, State, and local conservation priorities are 
        effectively addressed.
            ``(2) Prioritization of applications.--In evaluating 
        applications under the program, the Secretary shall prioritize 
        applications--
                    ``(A) based on the overall level of cost-
                effectiveness of the project proposed in an application 
                to ensure that the conservation practices and 
                approaches proposed are the most cost-effective means 
                of achieving the anticipated environmental benefits of 
                the project;
                    ``(B) based on how effectively and comprehensively 
                the proposed project addresses the designated resource 
                concern or resource concerns;
                    ``(C) that best fulfill the purpose of the program 
                specified in section 1240(a);
                    ``(D) that improve conservation practices or 
                systems in place on the operation at the time the 
                contract offer is accepted or that will complete a 
                conservation system; and
                    ``(E) that will bring significant environmental 
                benefits in improving specific high-priority 
                environmental concerns, as designated by the Secretary.
            ``(3) Grouping of applications.--To the maximum extent 
        practicable, the Secretary shall group applications of similar 
        crop or livestock operations for evaluation purposes or 
        otherwise evaluate applications relative to other applications 
        for similar farming operations.
            ``(4) Bidding down.--If the Secretary determines that the 
        environmental values of 2 or more applications for payments are 
        comparable, the Secretary shall not assign a higher priority to 
        an application only because the application would present the 
        least cost to the program.
    ``(c) Practices and Term.--
            ``(1) Practices.--A contract under the program may apply to 
        the performance of 1 or more practices.
            ``(2) Term.--A contract or partnership agreement under the 
        program shall have a term that--
                    ``(A)(i) except as provided in clause (ii), 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; and
                    ``(ii) may, for contracts or partnership agreements 
                for development of conservation activity plans or for 
                other contracts or partnership agreements designated by 
                the Secretary, be less than 1 year; but
                    ``(B) does not exceed 10 years.
    ``(d) Payments.--
            ``(1) In general.--Payments shall be provided to a producer 
        or partner to implement 1 or more practices under the program.
            ``(2) Limitation on payment amounts.--
                    ``(A) In general.--Except as provided in paragraph 
                (4), a payment to a producer or partner for performing 
                a practice may not exceed, as determined by the 
                Secretary--
                            ``(i) 75 percent of the costs associated 
                        with planning, design, materials, equipment, 
                        installation, labor, management, maintenance, 
                        or training;
                            ``(ii) 100 percent of income foregone by 
                        the producer or partner, as determined in 
                        accordance with paragraph (3); or
                            ``(iii) in the case of a practice 
                        consisting of elements covered under clauses 
                        (i) and (ii)--
                                    ``(I) 75 percent of the costs 
                                incurred for those elements covered 
                                under clause (i); and
                                    ``(II) 100 percent of income 
                                foregone for those elements covered 
                                under clause (ii).
                    ``(B) Minimization of federal cost.--The 
                Secretary--
                            ``(i) shall seek to minimize Federal costs 
                        in determining cost-share levels; and
                            ``(ii) is not required to provide the 
                        maximum cost-share amount described in 
                        subparagraph (A).
            ``(3) Special rule involving payments for foregone 
        income.--In determining the amount and rate of payments under 
        paragraph (2)(A)(ii), the Secretary may accord great 
        significance to a practice that, as determined by the 
        Secretary, promotes--
                    ``(A) residue management;
                    ``(B) nutrient management;
                    ``(C) air quality management;
                    ``(D) invasive species management;
                    ``(E) pollinator habitat;
                    ``(F) animal carcass management technology;
                    ``(G) pest management; or
                    ``(H) water conservation.
            ``(4) Increased payments for certain producers.--
                    ``(A) In general.--Notwithstanding paragraph (2), 
                in the case of a producer that is a limited resource, 
                socially disadvantaged farmer or rancher, or a 
                beginning farmer or rancher, the Secretary shall 
                increase the amount that would otherwise be provided to 
                a producer under this subsection--
                            ``(i) to not more than 90 percent of the 
                        costs associated with planning, design, 
                        materials, equipment, installation, labor, 
                        management, maintenance, or training; and
                            ``(ii) to not less than 25 percent above 
                        the otherwise applicable rate.
                    ``(B) Advance payments.--Not more than 30 percent 
                of the amount determined under subparagraph (A) may be 
                provided in advance for the purpose of purchasing 
                materials or contracting.
                    ``(C) Minimization of federal cost.--The 
                Secretary--
                            ``(i) shall seek to minimize Federal costs 
                        in determining cost-share levels; and
                            ``(ii) is not required to provide the 
                        maximum cost-share amount described in 
                        subparagraph (A).
            ``(5) Financial assistance from other sources.--Except as 
        provided in paragraph (6), any payments received by a producer 
        or partner from a State or private organization, individual, or 
        legal entity 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 or partner under this 
        subsection.
            ``(6) Other payments.--A producer or partner shall not be 
        eligible for payments for practices on eligible land under the 
        program if the producer or partner receives payments or other 
        benefits for the same practice on the same land under another 
        program under this title.
    ``(e) Modification or Termination of Contracts or Partnership 
Agreements.--
            ``(1) Voluntary modification or termination.--The Secretary 
        may modify or terminate a contract or partnership agreement 
        entered into with a producer or partner under the program if--
                    ``(A) the producer or partner 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 or partnership agreement under the program if the 
        Secretary determines that the producer or partner violated the 
        contract or partnership agreement.
    ``(f) Funding for Indian Tribes and Alaska Native Corporations.--
The Secretary may enter into alternative funding arrangements with 
Indian tribes and Alaska Native Corporations (including affiliated 
membership organizations) if the Secretary determines that--
            ``(1) the goals and objectives of the program will be met 
        by the arrangements; and
            ``(2) statutory limitations regarding contracts with 
        individual producers will not be exceeded by any tribal or 
        Native Corporation member.

``SEC. 1240B. DUTIES OF PRODUCERS AND PARTNERS.

    ``(a) In General.--To receive payments under the program, a 
producer or partner shall agree--
            ``(1) to implement a 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 eligible land 
        that would tend to defeat the purposes of the program;
            ``(3) on the violation of a term or condition of the 
        contract or partnership agreement at any time during which the 
        producer or partner is required to have control of the eligible 
        land--
                    ``(A) if the Secretary determines that the 
                violation warrants termination of the contract or 
                partnership agreement--
                            ``(i) to forfeit all rights to receive 
                        payments under the contract or partnership 
                        agreement; and
                            ``(ii) to refund to the Secretary all or a 
                        portion of the payments received by the 
                        producer or partner under the contract or 
                        partnership agreement, 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 
                or partnership agreement, to refund to the Secretary, 
                or accept adjustments to, the payments provided to the 
                producer or partner, as the Secretary determines to be 
                appropriate;
            ``(4) on the transfer of the right and interest of the 
        producer or partner in eligible land subject to the contract or 
        partnership agreement, unless the transferee of the right and 
        interest agrees with the Secretary to assume all obligations of 
        the contract or partnership agreement, to refund all 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.
    ``(b) Program Plan.--
            ``(1) In general.--To be eligible to receive payments under 
        the program, a producer or partner shall submit to the 
        Secretary for approval a plan of operations that--
                    ``(A) specifies practices covered under the 
                program;
                    ``(B) includes such terms and conditions as the 
                Secretary considers necessary to carry out the program, 
                including a description of the purposes to be met by 
                the implementation of the plan;
                    ``(C) in the case of a confined livestock feeding 
                operation, provides for development and implementation 
                of a comprehensive nutrient management plan, if 
                applicable; and
                    ``(D) in the case of forest land, is consistent 
                with the provisions of a forest management plan that is 
                approved by the Secretary, which may include--
                            ``(i) a forest stewardship plan described 
                        in section 5 of the Cooperative Forestry 
                        Assistance Act of 1978 (16 U.S.C. 2103a);
                            ``(ii) another practice plan approved by 
                        the State forester; or
                            ``(iii) another plan determined appropriate 
                        by the Secretary.
            ``(2) Avoidance of duplication.--The Secretary shall--
                    ``(A) consider a plan developed in order to acquire 
                a permit under a water or air quality regulatory 
                program as the equivalent of a plan of operations under 
                paragraph (1), if the plan contains elements equivalent 
                to those elements required by a plan of operations; and
                    ``(B) to the maximum extent practicable, eliminate 
                duplication of planning activities under the program 
                and comparable conservation programs.

``SEC. 1240C. DUTIES OF THE SECRETARY.

    ``(a) In General.--To the extent appropriate, the Secretary shall 
assist a producer or partner in achieving the conservation and 
environmental goals of a program plan by--
            ``(1) providing payments for developing and implementing 1 
        or more practices, as appropriate; and
            ``(2) providing the producer or partner with information 
        and training to aid in the implementation of the plan.
    ``(b) Targeted Practices.--
            ``(1) Agricultural water enhancement initiative.--Of the 
        funds made available to carry out this chapter, the Secretary 
        shall use not less than $60,000,000 to provide payments for 
        agricultural water enhancement activity to promote ground and 
        surface water conservation and improve water quality on 
        agricultural land, including--
                    ``(A) water quality or water conservation plan 
                development, including resource condition assessment 
                and modeling;
                    ``(B) water conservation restoration or enhancement 
                projects, including conversion to the production of 
                less water-intensive agricultural commodities or 
                dryland farming;
                    ``(C) water quality or quantity restoration or 
                enhancement projects;
                    ``(D) irrigation system improvement and irrigation 
                efficiency enhancement;
                    ``(E) activities designed to mitigate the effects 
                of drought; and
                    ``(F) related activities that the Secretary 
                determines will help achieve water quality or water 
                conservation benefits on agricultural land.
            ``(2) Agricultural air quality concerns.--
                    ``(A) Implementation assistance.--Of the funds made 
                available to carry out this chapter, the Secretary 
                shall use not less than $37,500,000 to provide payments 
                under this paragraph to producers or partners to 
                implement practices--
                            ``(i) to address air quality concerns from 
                        agricultural operations; and
                            ``(ii) meet Federal, State, and local 
                        regulatory requirements.
                    ``(B) Availability and use.--The funds shall be--
                            ``(i) made available on the basis of air 
                        quality concerns in a State; and
                            ``(ii) used to provide payments to 
                        producers that are cost-effective and reflect 
                        innovative technologies.
            ``(3) Conservation stewardship initiative.--
                    ``(A) In general.--The Secretary may use funds made 
                available to carry out this chapter for conservation 
                stewardship initiatives to address resource concerns in 
                a comprehensive manner by--
                            ``(i) undertaking additional conservation 
                        activities; and
                            ``(ii) improving, maintaining, and managing 
                        existing conservation activities.
                    ``(B) Submission of contract or partnership 
                agreement offers.--To be eligible to participate in the 
                conservation stewardship initiative and receive an 
                initiative payment, a producer or partner shall submit 
                to the Secretary for approval a contract or partnership 
                agreement offer that--
                            ``(i) demonstrates to the satisfaction of 
                        the Secretary that the producer or partner, at 
                        the time of the contract or partnership 
                        agreement offer, is meeting the stewardship 
                        threshold for at least 1 resource concern; and
                            ``(ii) would, at a minimum, meet or exceed 
                        the stewardship threshold for at least 2 
                        priority resource concerns by the end of the 
                        contract or partnership agreement by--
                                    ``(I) installing and adopting 
                                additional conservation activities; and
                                    ``(II) improving, maintaining, and 
                                managing conservation activities in 
                                place at the operation of the producer 
                                at the time the contract or partnership 
                                agreement offer is accepted by the 
                                Secretary.
                    ``(C) Payment amount.--An initiative payment to a 
                producer shall be based on the conservation performance 
                to be achieved on eligible land in an amount determined 
                by the Secretary.
            ``(4) Competitive grants for innovative conservation 
        approaches.--
                    ``(A) In general.--The Secretary may use funds made 
                available to carry out this chapter to pay the cost of 
                competitive grants that are intended to stimulate 
                innovative approaches to leveraging the Federal 
                investment in environmental enhancement and protection, 
                in conjunction with agricultural production or forest 
                resource management, through the program.
                    ``(B) Use.--The Secretary may provide grants under 
                this paragraph to governmental and nongovernmental 
                organizations, individuals, and legal entities, on a 
                competitive basis, to carry out projects that--
                            ``(i) involve producers or partners who are 
                        eligible for payments or technical assistance 
                        under the program;
                            ``(ii) leverage Federal funds made 
                        available to carry out the program with 
                        matching funds provided by State and local 
                        governments and private organizations to 
                        promote environmental enhancement and 
                        protection in conjunction with agricultural 
                        production;
                            ``(iii) ensure efficient and effective 
                        transfer of innovative technologies and 
                        approaches demonstrated through projects that 
                        receive funding under this paragraph, such as 
                        market systems for pollution reduction and 
                        practices for the storage of carbon in soil; 
                        and
                            ``(iv) provide environmental and resource 
                        conservation benefits through increased 
                        participation by producers of specialty crops.
            ``(5) Organic production conservation initiatives.--
                    ``(A) In general.--The Secretary may provide 
                payments under this paragraph for conservation 
                practices, on some or all of the operations of a 
                producer or partner, relating to--
                            ``(i) organic production; and
                            ``(ii) the transition to organic 
                        production.
                    ``(B) Eligibility requirements.--As a condition for 
                receiving payments under this paragraph, a producer or 
                partner shall agree--
                            ``(i) to develop and carry out an organic 
                        system plan in furtherance of transitioning to 
                        organic production; or
                            ``(ii) to develop and implement 
                        conservation practices for certified organic 
                        production that are consistent with an organic 
                        system plan and the purposes of the program.
                    ``(C) Payment limitations.--
                            ``(i) In general.--Subject to clause (ii), 
                        payments under this paragraph to a person or 
                        legal entity, directly or indirectly, may not 
                        exceed, in the aggregate, $20,000 per year or 
                        $80,000 in payments made pursuant to contracts 
                        or partnership agreements entered into during 
                        the period of fiscal years 2013 through 2017.
                            ``(ii) Technical assistance excluded.--In 
                        applying clause (i), the Secretary shall not 
                        take into account payments received for 
                        technical assistance.
                    ``(D) Exclusion of certain organic certification 
                costs.--Payments may not be made under this paragraph 
                to cover the costs associated with organic 
                certification that are eligible for cost-share payments 
                under section 10606 of the Farm Security and Rural 
                Investment Act of 2002 (7 U.S.C. 6523).
                    ``(E) Termination of contracts or partnership 
                agreements.--The Secretary may cancel or otherwise 
                nullify a contract or partnership agreement to provide 
                payments under this paragraph if the Secretary 
                determines that the producer--
                            ``(i) is not pursuing organic 
                        certification; or
                            ``(ii) is not in compliance with the 
                        Organic Foods Production Act of 1990 (7 U.S.C. 
                        6501 et seq.).
            ``(6) Water conservation or irrigation efficiency 
        initiative.--
                    ``(A) In general.--The Secretary may provide 
                payments under this paragraph to a producer or partner 
                for a water conservation or irrigation practice.
                    ``(B) Priority.--In providing payments to a 
                producer or partner for a water conservation or 
                irrigation practice, the Secretary shall give priority 
                to applications in which--
                            ``(i) consistent with the law of the State 
                        in which the eligible land of the producer or 
                        partner is located, there is a reduction in 
                        water use in the operation of the producer or 
                        partner; or
                            ``(ii) the producer or partner agrees not 
                        to use any associated water savings to bring 
                        new land, other than incidental land needed for 
                        efficient operations, under irrigated 
                        production, unless the producer or partner is 
                        participating in a watershed-wide project that 
                        will effectively conserve water, as determined 
                        by the Secretary.
            ``(7) Wildlife habitat initiative.--
                    ``(A) In general.--Of the funds made available to 
                carry out this chapter, the Secretary, in consultation 
                with the State technical committees established under 
                section 1261, shall make available to producers and 
                owners of eligible land not less than $85,000,000 to 
                provide payments for the development of wildlife 
                habitat, including--
                            ``(i) upland wildlife habitat;
                            ``(ii) wetland wildlife habitat;
                            ``(iii) habitat for threatened or 
                        endangered species;
                            ``(iv) fish habitat;
                            ``(v) aquatic wildlife habitat associated 
                        with riparian or submerged land, even if the 
                        land is subject to title being held by the 
                        State when submerged if consistent with State 
                        law; and
                            ``(vi) other types of wildlife habitat 
                        approved by the Secretary, including habitat 
                        developed on pivot corners and irregular areas.
                    ``(B) Priority for certain conservation 
                initiatives.--In carrying out this paragraph, the 
                Secretary may give priority to projects that would 
                address issues raised by State, regional, and national 
                conservation initiatives.

``SEC. 1240D. FUNDING.

    ``(a) In General.--Of the funds of the Commodity Credit 
Corporation, the Secretary shall use to carry out this chapter 
$2,250,000,000 for each fiscal year.
    ``(b) Payment Limitations.--
            ``(1) In general.--Subject to paragraph (2), a person or 
        legal entity may not receive, directly or indirectly, practice 
        payments or incentive payments under this chapter that, in the 
        aggregate, exceed $300,000 for all contracts or partnership 
        agreements entered into under this chapter by the person or 
        legal entity during the period of fiscal years 2013 through 
        2017 (excluding funding arrangements with federally recognized 
        Native American Indian tribes or Alaska Native Corporations 
        under section 1240A(f)), regardless of the number of contracts 
        or partnership agreements entered into under this chapter by 
        the person or entity.
            ``(2) Waiver authority.--In the case of contracts or 
        partnership agreements under this chapter for projects of 
        special environmental significance (including projects 
        involving methane digesters), as determined by the Secretary, 
        the Secretary may--
                    ``(A) waive the limitation otherwise applicable 
                under paragraph (1); and
                    ``(B) raise the limitation to not more than 
                $450,000 for all contracts or partnership agreements 
                entered into during the period of fiscal years 2013 
                through 2017.''.
    (b) Conforming Amendments.--
            (1) Section 344(f)(8) of the Agricultural Adjustment Act of 
        1938 (7 U.S.C. 1344(f)(8)) is amended by striking 
        ``environmental quality incentives program'' and inserting 
        ``working land program''.
            (2) Section 377 of the Agricultural Adjustment Act of 1938 
        (7 U.S.C. 1377) is amended by striking ``environmental quality 
        incentives program'' and inserting ``working land program''.
            (3) Section 101(1) of the Department of Agriculture and 
        Farm Credit Administration Appropriation Act, 1959 (7 U.S.C. 
        1831a(1)) is amended by striking ``environmental quality 
        incentives program'' and inserting ``working land program''.
            (4) Section 1271(c)(3)(C) of the Forest Stewardship Act of 
        1990 (16 U.S.C. 2106a(c)(3)(C)) is amended by striking 
        ``environmental quality incentives program'' and inserting 
        ``working land program''.
            (5) Section 202(c) of the Colorado River Basin Salinity 
        Control Act (43 U.S.C. 1592(c)) is amended by striking 
        ``environmental quality incentives program'' and inserting 
        ``working land program''.
            (6) Section 1211(a)(3)(A) of the Food Security Act of 1985 
        (16 U.S.C. 3811(a)(3)(A)) is amended by striking 
        ``environmental quality incentives program'' and inserting 
        ``working land program''.
            (7) Section 1221(b)(3)(A) of the Food Security Act of 1985 
        (16 U.S.C. 3821(b)(3)(A)) is amended by striking 
        ``environmental quality incentives program'' and inserting 
        ``working land program''.

                Subtitle D--Other Conservation Programs

SEC. 2301. OTHER CONSERVATION PROGRAMS OF THE FOOD SECURITY ACT OF 
              1985.

    (a) Conservation of Private Grazing Land.--Section 1240M(e) of the 
Food Security Act of 1985 (16 U.S.C. 3839bb(e)) is amended by striking 
``2012'' and inserting ``2017''.
    (b) Grassroots Source Water Protection Program.--Section 1240O(b) 
of the Food Security Act of 1985 (16 U.S.C. 3839bb-2(b)) is amended by 
striking ``2012'' and inserting ``2017''.
    (c) Great Lakes Basin Program for Soil Erosion and Sediment 
Control.--Section 1240P(d) of the Food Security Act of 1985 (16 U.S.C. 
3839bb-3(d)) is amended by striking ``2012'' and inserting ``2017''.
    (d) Chesapeake Bay Watershed Program.--Section 1240Q of the Food 
Security Act of 1985 (16 U.S.C. 3839bb-4) is amended by striking 
subsection (h) and inserting the following:
    ``(h) Funding.--There is authorized to be appropriated to carry out 
this section $50,000,000 for each of fiscal years 2012 through 2017.''.
    (e) Voluntary Public Access and Habitat Incentive Program.--Section 
1240R(f) of the Food Security Act of 1985 (16 U.S.C. 3839bb-5(f)) is 
amended by striking ``2012'' and inserting ``2017''.

SEC. 2302. FUNDING OF CONSERVATION PROGRAMS UNDER FOOD SECURITY ACT OF 
              1985.

    (a) In General.--Section 1241(a) of the Food Security Act of 1985 
(16 U.S.C. 3841(a)) is amended in the matter preceding paragraph (1) by 
striking ``2012'' and inserting ``2017''.
    (b) Conservation Reserve Program.--Section 1241(a)(1) of the Food 
Security Act of 1985 (16 U.S.C. 3841(a)(1)) is amended by striking 
``2012'' each place it appears and inserting ``2017''.
    (c) Repeals.--Section 1241 of the Food Security Act of 1985 (16 
U.S.C. 3841) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (3)--
                            (i) by striking ``(A)''; and
                            (ii) by striking subparagraph (B);
                    (B) by striking paragraphs (2), (4), (5), (6), and 
                (7); and
                    (C) by redesignating paragraph (3) as paragraph 
                (2);
            (2) in subsection (b), in the matter preceding paragraph 
        (1), by striking ``paragraphs (1) through (7) of''; and
            (3) in subsection (h)--
                    (A) in paragraph (1), by striking ``wetlands 
                reserve program'' and inserting ``easement benefits 
                program'';
                    (B) in paragraph (4), by striking ``environmental 
                quality incentives program for land determined to have 
                special environmental significance pursuant to section 
                1240G(b)'' and inserting ``working land program for 
                land determined to have special environmental 
                significance'';
                    (C) by striking paragraphs (2), (3), and (5); and
                    (D) by redesignating paragraphs (4) and (6) as 
                paragraphs (2) and (3), respectively.
    (d) Regional Equity.--Section 1241 of the Food Security Act of 1985 
(16 U.S.C. 3841) is amended--
            (1) by striking subsection (d); and
            (2) by redesignating subsections (e) through (h) as 
        subsections (d) through (g), respectively.
    (e) Assistance to Certain Farmers or Ranchers for Conservation 
Access.--Subsection (f) of section 1241 of the Food Security Act of 
1985 (16 U.S.C. 3841) (as redesignated by subsection (d)(2)) is 
amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``made available for'' and all that follows 
        through ``shall use'' and inserting ``and acres made available 
        for each of fiscal years 2012 through 2017 to carry out the 
        working land program, the Secretary shall use''; and
            (2) in paragraph (3), by striking ``conservation 
        stewardship program'' and inserting ``working land program''.

SEC. 2303. COOPERATIVE CONSERVATION PARTNERSHIP INITIATIVE.

    (a) Initiative Programs.--Section 1243(c) of the Food Security Act 
of 1985 (16 U.S.C. 3843(c)) is amended by striking paragraph (2) and 
inserting the following:
            ``(2) Limitation and coordination with the conservation 
        reserve program.--
                    ``(A) In general.--The Initiative shall not include 
                the conservation reserve program.
                    ``(B) Coordination.--The Secretary shall coordinate 
                implementation of the cooperative conservation 
                partnership initiative and those portions of the 
                conservation reserve program eligible for continuous 
                enrollment.''.
    (b) Applications.--Section 1243(f)(2) of the Food Security Act of 
1985 (16 U.S.C. 3843(f)(2)) is amended--
            (1) in subparagraph (A), by inserting ``, and may consider 
        applications that have identified producers for participation 
        in the project'' before the semicolon at the end;
            (2) in subparagraph (D), by striking ``or'' at the end;
            (3) by redesignating subparagraph (E) as subparagraph (F); 
        and
            (4) by inserting after subparagraph (D) the following:
                    ``(E) will benefit economic development of rural 
                communities, including as integrated into local 
                economic development plans; or''.
    (c) Relationship to Covered Programs.--Section 1243(g) of the Food 
Security Act of 1985 (16 U.S.C. 3843(g)) is amended by adding at the 
end the following:
            ``(3) Adjustment of programs by eligible partners.--The 
        Secretary shall allow eligible partners to adjust conservation 
        programs during the implementation phase if the adjustments--
                    ``(A) achieve purposes consistent with the purposes 
                of this section; and
                    ``(B) are approved by the Secretary prior to the 
                adjustments being implemented.''.
    (d) Funding.--Section 1243(i) of the Food Security Act of 1985 (16 
U.S.C. 3843(i)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) Reservation.--Of the funds and acres made available 
        for each fiscal year to implement the programs described in 
        subsection (c)(1), to ensure an adequate source of funds and 
        acres for the Initiative, the Secretary shall reserve--
                    ``(A) for fiscal year 2013, 10 percent of the funds 
                and acres;
                    ``(B) for fiscal year 2014, 12.5 percent of the 
                funds and acres; and
                    ``(C) for fiscal year 2015 and each fiscal year 
                thereafter, 15 percent of the funds and acres.''; and
            (2) in paragraph (4)--
                    (A) by striking ``Overhead'' and inserting the 
                following:
                    ``(A) In general.--Overhead''; and
                    (B) by adding at the end the following:
                    ``(B) Technical assistance.--The use of funds for 
                technical assistance to achieve conservation goals--
                            ``(i) is not subject to subparagraph (A); 
                        and
                            ``(ii) is subject to review by the 
                        Secretary.''.

SEC. 2304. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    Section 1244 of the Food Security Act of 1985 (16 U.S.C. 3844) is 
amended--
            (1) in subsection (c)--
                    (A) in paragraph (1)(C), by striking ``wetlands 
                reserve program'' and inserting ``easement benefits 
                program''; and
                    (B) in paragraph (2), by striking ``environmental 
                quality incentives program'' and inserting ``working 
                land program''; and
            (2) by striking subsection (i) and inserting the following:
    ``(i) Conservation Application Process.--
            ``(1) Initial application.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Secretary 
                shall establish a single, simplified application for 
                eligible entities to use in initially requesting 
                assistance under any conservation program administered 
                by the Secretary (referred to in this subsection as the 
                `initial application').
                    ``(B) Requirements.--To the maximum extent 
                practicable, the Secretary shall ensure that--
                            ``(i) a conservation program applicant is 
                        not required to provide information that is 
                        duplicative of information or resources already 
                        available to the Secretary for that applicant 
                        and the specific operation of the applicant; 
                        and
                            ``(ii) the initial application process is 
                        streamlined to minimize complexity and 
                        redundancy.
            ``(2) Review of application process.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Secretary 
                shall review the application process for each 
                conservation program administered by the Secretary, 
                including the forms and processes used to receive 
                assistance requests from eligible program participants.
                    ``(B) Requirements.--In carrying out the review, 
                the Secretary shall determine what information the 
                participant is required to submit during the 
                application process, including--
                            ``(i) identification information for the 
                        applicant;
                            ``(ii) identification and location 
                        information for the land parcel or tract of 
                        concern;
                            ``(iii) a general statement of the need or 
                        resource concern of the applicant for the land 
                        parcel or tract; and
                            ``(iv) the minimum amount of other 
                        information the Secretary considers to be 
                        essential for the applicant to provide 
                        personally.
            ``(3) Revision and streamline.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Secretary 
                shall carry out a revision of the application forms and 
                processes for each conservation program administered by 
                the Secretary to enable use of information technology 
                to incorporate appropriate data and information 
                concerning the conservation needs and solutions 
                appropriate for the land area identified by the 
                applicant.
                    ``(B) Goal.--The goal of the revision shall be to 
                streamline the application process to minimize the 
                burden placed on applicants.
            ``(4) Conservation program application.--
                    ``(A) In general.--Once the needs of an applicant 
                have been adequately assessed by the Secretary, or a 
                third party provider under section 1242, based on the 
                initial application, in order to determine the 1 or 
                more programs under this title that best match the 
                needs of the applicant, with the approval of the 
                applicant, the Secretary may convert the initial 
                application into the specific application for 
                assistance for the relevant conservation program.
                    ``(B) Secretarial burden.--To the maximum extent 
                practicable, the Secretary shall--
                            ``(i) complete the specific application for 
                        conservation program assistance for each 
                        applicant; and
                            ``(ii) request only that specific further 
                        information from the applicant that is not 
                        already available to the Secretary.
            ``(5) Implementation and notification.--Not later than 1 
        year after the date of enactment of this subsection, 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 written notification that 
        the Secretary has fulfilled the requirements of this 
        subsection.''.

SEC. 2305. REPEAL OF HEALTHY FORESTS RESERVE PROGRAM.

    Title V of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 
6571 et seq.) is repealed.

                          TITLE III--NUTRITION

         Subtitle A--Supplemental Nutrition Assistance Program

SEC. 3001. CATEGORICAL ELIGIBILITY LIMITATIONS.

    Section 5 of the Food and Nutrition Act of 2008 (7 U.S.C. 2014) is 
amended--
            (1) by striking the section heading and all that follows 
        through ``(a) Participation'' and inserting the following:

``SEC. 5. ELIGIBLE HOUSEHOLDS.

    ``(a) Requirements.--
            ``(1) In general.--Participation'';
            (2) in subsection (a)--
                    (A) by striking the second sentence and inserting 
                the following:
            ``(2) Recipients of other federal benefits.--Except as 
        provided in section 3(n)(4) and subsections (b), (d)(2), and 
        (g) of section 6, a household shall be eligible to participate 
        in the supplemental nutrition assistance program if each member 
        of the household receives--
                    ``(A) cash assistance in the form of ongoing basic 
                needs benefit payments for financially needy families 
                under the program of block grants to States for 
                temporary assistance for needy families established 
                under part A of title IV of the Social Security Act (42 
                U.S.C. 601 et seq.);
                    ``(B) cash assistance under the supplemental 
                security income program established under title XVI of 
                that Act (42 U.S.C. 1381 et seq.); or
                    ``(C) aid to the aged, blind, or disabled under 
                title I, X, XIV, or XVI of that Act (42 U.S.C. 301 et 
                seq.).'';
                    (B) in the third sentence, by striking ``Except for 
                sections 6, 16(e)(1), and section 3(n)(4), households'' 
                and inserting the following:
            ``(3) General assistance.--Except as provided in sections 
        3(n)(4), 6, and 16(e)(1), a household''; and
                    (C) in the fourth sentence, by striking 
                ``Assistance'' and inserting the following:
            ``(4) Applications.--Assistance''; and
            (3) in subsection (j)--
                    (A) by inserting ``cash assistance in the form of'' 
                before ``supplemental security income benefits''; and
                    (B) by striking ``or who receives benefits'' and 
                inserting ``or who receives cash assistance''.

SEC. 3002. REPEAL OF FUNDING FOR EMPLOYMENT AND TRAINING PROGRAMS.

    (a) In General.--Section 6(d)(4) of the Food and Nutrition Act of 
2008 (7 U.S.C. 2015(d)(4)) is amended--
            (1) by striking ``(A) In general.--''; and all that follows 
        through ``the following components'' in the matter preceding 
        clause (i) in subparagraph (B) and inserting the following:
                    ``(A) Definition of employment and training 
                program.--In this Act, the term `employment and 
                training program' means a Federal, State, or private 
                program not administered by the Secretary or funded 
                through the Food and Nutrition Service that contains 1 
                or more of the following components'';
            (2) by striking clause (viii) in subparagraph (A) (as 
        designated in paragraph (1)) and inserting the following:
                            ``(viii) As approved by the State, other 
                        employment, educational and training programs, 
                        projects, and experiments, such as a supported 
                        work program, aimed at accomplishing the 
                        purpose of the employment and training 
                        program.'';
            (3) in subparagraph (E), by striking ``subparagraph (D)'' 
        and inserting ``subparagraph (C)'';
            (4) by striking subparagraphs (H) through (K); and
            (5) by redesignating subparagraphs (C) through (G) and (L) 
        and (M) as subparagraphs (B) through (F) and (G) and (H), 
        respectively.
    (b) Repeal of Funding.--Section 16 of the Food and Nutrition Act of 
2008 (7 U.S.C. 2025) is amended by striking subsection (h).
    (c) Conforming Amendments.--
            (1) Section 5(d) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2014(d)) is amended--
                    (A) by striking paragraph (14); and
                    (B) by redesignating paragraphs (15) through (19) 
                as paragraphs (14) through (18), respectively.
            (2) Section 17(b)(1)(B)(iv)(III) of the Food and Nutrition 
        Act of 2008 (7 U.S.C. 2026(b)(1)(B)(iv)(III)) is amended--
                    (A) in item (dd), by striking ``, (4)(F)(i) or 
                (4)(K)'' and inserting ``or (4)(E)''; and
                    (B) in item (hh), by striking ``(g), (h)(2), or 
                (h)(3) of section 16'' and inserting ``or (g) of 
                section 16''.

SEC. 3003. REPEAL OF INCENTIVE PAYMENTS TO STATES WITH LOW SNAP BENEFIT 
              ALLOCATION ERROR RATES.

    (a) In General.--Section 16 of the Food and Nutrition Act of 2008 
(7 U.S.C. 2025) is amended by striking subsection (d).
    (b) Conforming Amendments.--Section 16 of the Food and Nutrition 
Act of 2008 (7 U.S.C. 2025) is amended--
            (1) in subsection (c), by striking ``, or performance under 
        the performance measures under subsection (d)'' each place it 
        appears in paragraphs (4) and (5); and
            (2) in subsection (i)(1), by striking ``as defined in 
        subsection (d)(1))'' and inserting ``as defined in guidance 
        issued by the Secretary''.

SEC. 3004. QUALITY CONTROL.

    (a) In General.--Section 16(c) of the Food and Nutrition Act of 
2008 (7 U.S.C. 2025(c)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (D)(i)(II), by inserting 
                ``except as provided in clause (iii),'' before 
                ``require''; and
                    (B) by adding at the end the following:
                    ``(H) States in liability status for a third 
                consecutive fiscal year.--
                            ``(i) In general.--If a liability amount 
                        has been established for a State agency under 
                        subparagraph (C) for 3 or more consecutive 
                        fiscal years, the Secretary shall require the 
                        State to pay the entire liability amount for 
                        those fiscal years.
                            ``(ii) Alternatives to full payment not 
                        available.--Subparagraph (D) shall not apply to 
                        a State agency described in clause (i).''; and
            (2) by redesignating paragraph (9) as paragraph (10); and
            (3) by inserting after paragraph (8) the following:
            ``(9) Penalty for negative error rate.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Affected state agency.--The term 
                        `affected State agency' means a State agency 
                        that maintains, for 2 or more consecutive 
                        fiscal years, a negative error rate that is 
                        more than 50 percent higher than the national 
                        average negative error rate, as determined by 
                        the Secretary.
                            ``(ii) Average negative error rate.--The 
                        term `average negative error rate' means the 
                        product obtained by multiplying--
                                    ``(I) the negative error rate of a 
                                State agency; and
                                    ``(II) the proportion of the total 
                                negative caseload of that State agency 
                                for the fiscal year, as calculated 
                                under the quality control sample at the 
                                time of the notifications issued under 
                                subparagraph (C), as determined by the 
                                Secretary.
                            ``(iii) Negative error rate.--
                                    ``(I) In general.--The term 
                                `negative error rate' means, for a 
                                State agency, the proportion that--
                                            ``(aa) the total number of 
                                        actions erroneously taken by 
                                        the State agency to deny 
                                        applications or suspend or 
                                        terminate benefits of a 
                                        household participating in the 
                                        supplemental nutrition 
                                        assistance program established 
                                        under this Act, as determined 
                                        by the Secretary, in that 
                                        fiscal year; bears to
                                            ``(bb) the total number of 
                                        actions taken by the State 
                                        agency to deny applications or 
                                        suspend or terminate benefits 
                                        of households participating in 
                                        the supplemental nutrition 
                                        assistance program established 
                                        under this Act in that fiscal 
                                        year.
                                    ``(II) Exclusions.--The term 
                                `negative error rate' does not 
                                include--
                                            ``(aa) an error resulting 
                                        from the application of 
                                        regulations promulgated under 
                                        this Act during the period--

                                                    ``(AA) beginning on 
                                                the date of enactment 
                                                of this clause; and

                                                    ``(BB) ending on 
                                                date that is 121 days 
                                                after the date on which 
                                                the regulation is 
                                                implemented; and

                                            ``(bb) an error resulting 
                                        from--

                                                    ``(AA) the use by a 
                                                State agency of 
                                                correctly processed 
                                                information concerning 
                                                households or 
                                                individuals received 
                                                under a Federal 
                                                program; or

                                                    ``(BB) an action 
                                                that is based on policy 
                                                information that is 
                                                approved or 
                                                disseminated, in 
                                                writing, by the 
                                                Secretary or a designee 
                                                of the Secretary.

                    ``(B) Penalty amount.--For fiscal year 2012 and 
                each subsequent fiscal year, the amount of the penalty 
                for an affected State agency shall be equal to 5 
                percent of the amount otherwise payable under 
                subsection (a).
                    ``(C) Information reporting by states.--
                            ``(i) In general.--For each fiscal year, 
                        each State agency shall expeditiously submit to 
                        the Secretary data concerning the operations of 
                        the State agency sufficient for the Secretary 
                        to establish the negative error rate and 
                        penalty amount of the State agency.
                            ``(ii) Relevant information.--The Secretary 
                        may require a State agency to report any 
                        factors necessary to determine the negative 
                        error rate of the State agency.
                            ``(iii) Information not reported.--If a 
                        State agency fails to report information 
                        required by the Secretary, the Secretary may 
                        use any information, as the Secretary considers 
                        appropriate, to establish the negative error 
                        rate of the State agency for the applicable 
                        year.
                            ``(iv) National average error rate.--If a 
                        State agency fails to report information 
                        required by the Secretary, the Secretary may 
                        use the national average negative error rate to 
                        establish the negative error rate for the State 
                        agency.
                    ``(D) Announcement of error rates.--
                            ``(i) Case review.--Not later than May 31 
                        of each fiscal year, the case review and all 
                        arbitration of State-Federal differences on 
                        negative error rates for the previous fiscal 
                        year shall be completed.
                            ``(ii) Determination and announcement.--Not 
                        later than June 30 of each fiscal year, the 
                        Secretary shall, for the previous fiscal year--
                                    ``(I) determine--
                                            ``(aa) final negative error 
                                        rates;
                                            ``(bb) the national average 
                                        negative error rate; and
                                            ``(cc) penalty amounts;
                                    ``(II) notify affected State 
                                agencies of the penalty amounts;
                                    ``(III) provide a copy of the 
                                notification under subclause (II) to 
                                the chief executive officer and the 
                                legislature of the affected State; and
                                    ``(IV) establish a claim against 
                                the State agency for the monetary 
                                penalty amount assessed against the 
                                State agency.
                    ``(E) Review.--
                            ``(i) In general.--For any fiscal year, if 
                        the Secretary imposes a penalty amount against 
                        a State agency under subparagraph (D)(ii), the 
                        following determinations of the Secretary shall 
                        be subject to administrative and judicial 
                        review:
                                    ``(I) The final negative error rate 
                                of the State agency.
                                    ``(II) A determination of the 
                                Secretary that the negative error rate 
                                of the State agency exceeds 50 percent 
                                of the national average negative error 
                                rate.
                                    ``(III) The monetary penalty amount 
                                assessed against the State agency.
                            ``(ii) Determination not reviewable.--The 
                        national average negative error rate under this 
                        paragraph shall not be subject to 
                        administrative or judicial review.
                    ``(F) Payment of penalty amount.--
                            ``(i) In general.--On completion of 
                        administrative and judicial review under 
                        subparagraph (E), an affected State agency 
                        shall pay to the Secretary the penalty amount 
                        designated under subparagraph (D)(ii), subject 
                        to the findings of the administrative or 
                        judicial review, not later than September 30 of 
                        the fiscal year for which the claim has been 
                        issued to the State agency.
                            ``(ii) Alternative method of collection.--
                                    ``(I) In general.--If a State 
                                agency fails to make a payment under 
                                clause (i) by September 30 of the 
                                fiscal year for which the claim has 
                                been issued to the State agency, the 
                                Secretary may reduce any amount due to 
                                the State agency under any other 
                                provision of this Act by the amount of 
                                the monetary penalty established under 
                                subparagraph (D)(ii).
                                    ``(II) Accrual of interest.--
                                Interest on the amount owed shall not 
                                accrue until after September 30 of the 
                                applicable fiscal year.''.

                         Subtitle B--Extensions

SEC. 3101. SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM.

    (a) Food Distribution Program on Indian Reservations.--Section 
4(b)(6)(F) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2013(b)(6)(F)) is amended by striking ``2012'' and inserting ``2017''.
    (b) Projects To Evaluate Health and Nutrition Promotion in the 
Supplemental Nutrition Assistance Program.--Section 17(k)(5)(A) of the 
Food and Nutrition Act of 2008 (7 U.S.C. 2026(k)(5)(A)) is amended by 
striking ``2012'' and inserting ``2017''.
    (c) Authorization of Appropriations.--Section 18(a)(1) of the Food 
and Nutrition Act of 2008 (7 U.S.C. 2027(a)(1)) is amended in the first 
sentence by striking ``2012'' and inserting ``2017''.
    (d) Healthy Urban Food Enterprise Development Center.--Section 
25(h)(9) of the Food and Nutrition Act of 2008 (7 U.S.C. 2034(h)(9)) is 
amended--
            (1) in subparagraph (A), by striking ``2011'' and inserting 
        ``2017''; and
            (2) in subparagraph (B), by striking ``fiscal year 2012'' 
        and inserting ``each of fiscal years 2012 through 2017''.
    (e) Emergency Food Assistance.--
            (1) Purchase of commodities.--Section 27(a) of the Food and 
        Nutrition Act of 2008 (7 U.S.C. 2036(a)) is amended in 
        paragraphs (1) and (2)(C) by striking ``2012'' each place it 
        appears and inserting ``2017''.
            (2) Emergency food program infrastructure grants.--Section 
        209(d) of the Emergency Food Assistance Act of 1983 (7 U.S.C. 
        7511a(d)) is amended by striking ``2012'' and inserting 
        ``2017''.
    (f) Technical and Conforming Amendments.--
            (1) Section 3 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2012) is amended--
                    (A) in subsection (g), by striking ``coupon,'' and 
                inserting ``coupon'';
                    (B) in subsection (k)(7), by striking ``or are'' 
                and inserting ``and'';
                    (C) by striking subsection (l);
                    (D) by redesignating subsections (m) through (t) as 
                subsections (l) through (s), respectively; and
                    (E) by inserting after subsection (s) (as so 
                redesignated) the following:
    ``(t) `Supplemental nutritional assistance program' means the 
program operated pursuant to this Act.''.
            (2) Section 4(a) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2013(a)) is amended in the last sentence by striking 
        ``benefits'' and inserting ``Benefits''.
            (3) Section 5 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2014) is amended--
                    (A) in the last sentence of subsection (i)(2)(D), 
                by striking ``section 13(b)(2)'' and inserting 
                ``section 13(b)''; and
                    (B) in subsection (k)(4)(A), by striking 
                ``paragraph (2)(H)'' and inserting ``paragraph 
                (2)(G)''.
            (4) Section 7(h) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2016(h)) is amended by redesignating the second 
        paragraph (12) (relating to interchange fees) as paragraph 
        (13).
            (5) Section 9(a) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2018(a)) is amended by indenting paragraph (3) 
        appropriately.
            (6) Section 12 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2021) is amended--
                    (A) in subsection (b)(3)(C), by striking ``civil 
                money penalties'' and inserting ``civil penalties''; 
                and
                    (B) in subsection (g)(1), by striking ``(7 U.S.C. 
                1786)'' and inserting ``(42 U.S.C. 1786)''.
            (7) Section 15(b)(1) of the Food and Nutrition Act of 2008 
        (7 U.S.C. 2024(b)(1)) is amended in the first sentence by 
        striking ``an benefit'' and inserting ``a benefit''.
            (8) Section 16(a) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2025(a)) is amended in the proviso following paragraph 
        (8) by striking ``as amended.''.
            (9) Section 18(e) of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2027(e)) is amended in the first sentence by striking 
        ``sections 7(f)'' and inserting ``section 7(f)''.
            (10) Section 22(b)(10)(B)(i) of the Food and Nutrition Act 
        of 2008 (7 U.S.C. 2031(b)(10)(B)(i)) is amended in the last 
        sentence by striking ``Food benefits'' and inserting 
        ``Benefits''.
            (11) Section 26(f)(3)(C) of the Food and Nutrition Act of 
        2008 (7 U.S.C. 2035(f)(3)(C)) is amended by striking 
        ``subsection'' and inserting ``subsections''.
            (12) Section 27(a)(1) of the Food and Nutrition Act of 2008 
        (7 U.S.C. 2036(a)(1)) is amended by striking ``(Public Law 98-
        8; 7 U.S.C. 612c note)'' and inserting ``(7 U.S.C. 7515)''.
            (13) Section 509 of the Older Americans Act of 1965 (42 
        U.S.C. 3056g) is amended in the section heading by striking 
        ``food stamp programs'' and inserting ``supplemental nutrition 
        assistance programs''.
            (14) Section 4115(c)(2)(H) of the Food, Conservation, and 
        Energy Act of 2008 (Public Law 110-246; 122 Stat. 1871) is 
        amended by striking ``531'' and inserting ``454''.

SEC. 3102. COMMODITY DISTRIBUTION PROGRAMS.

    (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 ``2012'' 
and inserting ``2017''.
    (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) in paragraphs (1) and (2)(B) of subsection (a), by 
        striking ``2012'' each place it appears and inserting ``2017''; 
        and
            (2) in the first sentence of subsection (d)(2), by striking 
        ``2012'' and inserting ``2017''.
    (c) 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 ``2012'' and inserting ``2017''.
    (d) Technical and Conforming Amendments.--
            (1) Section 3 of the Commodity Distribution Reform Act and 
        WIC Amendments of 1987 (7 U.S.C. 612c note; Public Law 100-237) 
        is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (2), by striking 
                        subparagraph (B) and inserting the following:
                    ``(B) the supplemental nutrition assistance program 
                established under the Food and Nutrition Act of 2008 (7 
                U.S.C. 2011 et seq.);''; and
                            (ii) in paragraph (3)(D), by striking ``the 
                        Committee on Education and Labor'' and 
                        inserting ``the Committee on Education and the 
                        Workforce'';
                    (B) in subsection (b)(1)(A)(ii), by striking 
                ``section 32 of the Agricultural Adjustment Act (7 
                U.S.C. 601 et seq.)'' and inserting ``section 32 of the 
                Act of August 24, 1935 (7 U.S.C. 612c)'';
                    (C) in subsection (e)(1)(D)(iii), by striking 
                subclause (II) and inserting the following:
                                    ``(II) the supplemental nutrition 
                                assistance program established under 
                                the Food and Nutrition Act of 2008 (7 
                                U.S.C. 2011 et seq.);''; and
                    (D) in subsection (k), by striking ``the Committee 
                on Education and Labor'' and inserting ``the Committee 
                on Education and the Workforce''.

SEC. 3103. MISCELLANEOUS.

    (a) Purchase of Fresh Fruits and Vegetables for Distribution to 
Schools and Service Institutions.--Section 10603(b) of the Farm 
Security and Rural Investment Act of 2002 (7 U.S.C. 612c-4(b)) is 
amended by striking ``2012'' and inserting ``2017''.
    (b) Seniors Farmers' Market Nutrition Program.--Section 4402(a) of 
the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 3007(a)) 
is amended by striking by striking ``2012'' and inserting ``2017''.
    (c) Nutrition Information and Awareness Program.--Section 4403(f) 
of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 3171 
note; Public Law 107-171) is amended by striking ``2012'' and inserting 
``2017''.
    (d) Hunger-Free Communities.--Section 4405(e) of the Food, 
Conservation, and Energy Act of 2008 (7 U.S.C. 7517(e)) is amended by 
striking ``2012'' and inserting ``2017''.

                  TITLE IV--ENERGY FROM RURAL AMERICA

SEC. 4001. DEFINITIONS.

    Section 9001 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8101) is amended--
            (1) in paragraph (3)--
                    (A) in subparagraph (B)(iii), by inserting ``post-
                recycled municipal solid waste, sewage waste,'' before 
                ``and yard waste''; and
                    (B) by adding at the end the following:
                    ``(C) Exclusion.--The term `advanced biofuel' does 
                not include any fuel for which--
                            ``(i) more than 4 percent of the fuel 
                        (determined by weight) is any combination of 
                        water and sediment; or
                            ``(ii) the ash content of the fuel is more 
                        than 1 percent (determined by weight).'';
            (2) in paragraph (6)--
                    (A) in subparagraph (D), by striking the period at 
                the end and inserting ``; and'';
                    (B) by redesignating subparagraphs (A) through (D) 
                as clauses (i) through (iv), respectively, and 
                indenting appropriately;
                    (C) by striking ``a facility that converts'' and 
                inserting the following: ``a facility that--
                    ``(A) converts''; and
                    (D) by adding at the end the following:
                    ``(B) in the case of a facility in existence as of 
                the date of enactment of the Rural Economic Farm and 
                Ranch Sustainability and Hunger Act of 2011 that uses 
                less than 90 percent biomass for conversion, agrees to 
                increase the use by the facility of biomass for 
                conversion purposes by a percentage increase, as 
                determined by the Secretary but not less than a 
                substantial increase above the 5-year baseline for the 
                facility.''.
            (3) by redesignating paragraphs (9) through (13) and (14) 
        as paragraphs (10) through (14) and (17), respectively;
            (4) by inserting after paragraph (8) the following:
            ``(9) Eligible rural community.--The term `eligible rural 
        community' means a community located in a rural area.'';
            (5) in subparagraph (B)(ii) of paragraph (13) (as 
        redesignated by paragraph (2)) --
                    (A) in subclause (III), by striking ``and'' at the 
                end;
                    (B) in subclause (IV), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following:
                                    ``(V) post-recycled municipal solid 
                                waste; and
                                    ``(VI) sewage.''; and
            (6) by inserting after paragraph (14) (as so redesignated) 
        the following:
            ``(15) Rural area.--The term `rural area' has the meaning 
        given the term in section 343(a)(13)(A) of the Consolidated 
        Farm and Rural Development Act (7 U.S.C. 1991(a)(13)(A)).
            ``(16) Rural school district.--The term `rural school 
        district' means a school district that serves 1 or more schools 
        located in a rural area.''.

SEC. 4002. BIOBASED MARKETS PROGRAM.

    (a) In General.--Section 9002 of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 8102) is amended--
            (1) in subsection (a)(4)--
                    (A) in subparagraph (B)--
                            (i) in the matter preceding clause (i), by 
                        inserting ``and to improve fiscal transparency 
                        in Federal procurement'' after ``subparagraph 
                        (A)''; and
                            (ii) in clause (i)--
                                    (I) in the matter preceding 
                                subclause (I), by striking ``, to the 
                                maximum extent practicable,''; and
                                    (II) in subclause (V), by striking 
                                ``and'' at the end;
                            (iii) in clause (ii), by striking the 
                        period at the end and inserting ``; and''; and
                            (iv) by adding at the end the following:
                            ``(iii) information required to be 
                        submitted under clauses (i) and (ii) shall be 
                        made publicly available on a website by the 
                        Office of Federal Procurement Policy not later 
                        than 30 days after submission of the 
                        information to the Office of Federal 
                        Procurement Policy.'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``, in 
                consultation with the Administrator,'';
                    (B) in paragraph (2)--
                            (i) by striking ``(2) Eligibility 
                        criteria.--'' and all that follows through 
                        ``(B) Requirements.--Criteria issued under 
                        subparagraph (A)'' and inserting the following:
            ``(2) Requirements.--Labels issued under paragraph (1)''; 
        and
                            (ii) by redesignating clauses (i) through 
                        (iii) as subparagraphs (A) through (C), 
                        respectively, and indenting appropriately; and
                    (C) in paragraph (3), by striking ``criteria issued 
                pursuant to'' and inserting ``requirements described 
                in'';
            (3) by striking subsection (c) and inserting the following:
    ``(c) Promotion.--
            ``(1) In general.--The Secretary shall make competitive 
        grants to eligible entities to provide information to 
        organizations that have large procurement needs or vehicle 
        fleets, or that produce products with which biobased products 
        or biofuels can be integrated (as determined by the Secretary), 
        about the benefits of biobased products or biofuels.
            ``(2) Eligible entities.--To be eligible to receive a grant 
        under paragraph (1), an entity shall--
                    ``(A) be a nonprofit organization or institution of 
                higher education;
                    ``(B) have demonstrated a knowledge of biobased 
                product or biofuel production, use, or distribution; 
                and
                    ``(C) have demonstrated the ability to conduct 
                educational and technical support programs.
            ``(3) Limitation.--Grants made under this subsection may 
        not be used for the marketing or promotion of brand name 
        products.'';
            (4) in subsection (d), by striking ``this section'' and 
        inserting ``subsection (a)'';
            (5) by striking subsections (e) through (g);
            (6) by redesignating subsection (h) as subsection (e); and
            (7) in subsection (e) (as so redesignated)--
                    (A) in paragraph (1), by striking ``this section--
                '' and all that follows through the end of subparagraph 
                (B) and inserting ``this section $5,000,000 for each of 
                fiscal years 2013 through 2017, of which not more than 
                $2,000,000 may be used to make grants under subsection 
                (c).''; and
                    (B) in paragraph (2), by striking ``this section'' 
                and all that follows through ``2012'' and inserting 
                ``$3,000,000 for each of fiscal years 2013 through 
                2017.''
    (b) Conforming Amendment.--Section 944(c)(2)(A) of the Energy 
Policy Act of 2005 (42 U.S.C. 16253(c)(2)(A)) is amended by striking 
``section 9002(h)(1) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 8102(h)(1)'' and inserting ``section 9002(b) of the Farm 
Security and Rural Investment Act of 2002 (7 U.S.C. 8102(b))''.

SEC. 4003. BIOREFINERY ASSISTANCE.

    Section 9003 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8103) is amended--
            (1) by striking subsections (a), (d), and (g);
            (2) by redesignating subsections (b), (c), (e), (f), and 
        (h) as subsections (a) through (e), respectively;
            (3) in subsection (b) (as so redesignated), by striking 
        ``eligible entities--'' and all that follows through ``(2) 
        guarantees'' and inserting ``eligible entities guarantees'';
            (4) in subsection (c) (as so redesignated)--
                    (A) in paragraph (1)(C) --
                            (i) in the matter preceding clause (i), by 
                        striking ``subsection (c)(2)'' and inserting 
                        ``subsection (b)'';
                            (ii) in clause (ix), by striking ``and'' at 
                        the end;
                            (iii) in clause (x), by striking the period 
                        at the end and inserting ``; and''; and
                            (iv) by adding at the end the following:
                            ``(xi) whether the project can lead to 
                        reductions in production costs.''; and
                    (B) in paragraph (2)--
                            (i) by striking ``subsection (c)(2)'' each 
                        place it appears and inserting ``subsection 
                        (b)''; and
                            (ii) in subparagraph (C), by striking 
                        ``subsection (h)'' and inserting ``subsection 
                        (e)''; and
            (5) in subsection (e) (as so redesignated)--
                    (A) in paragraph (1), by striking subparagraphs (A) 
                and (B) and inserting the following:
                    ``(A) $100,000,000 for fiscal year 2013; and
                    ``(B) $80,000,000 for each of fiscal years 2014 and 
                2015.''; and
                    (B) in paragraph (2), by striking ``2012'' and 
                inserting ``2017''.

SEC. 4004. RURAL ENERGY FOR AMERICA PROGRAM.

    Section 9007 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8107) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by inserting ``, rural school 
                districts, eligible rural communities,'' before ``and 
                rural small businesses''; and
                    (B) in paragraph (4), in the matter preceding 
                subparagraph (A), by inserting ``, rural school 
                districts, eligible rural communities,'' before ``and 
                rural small businesses'';
            (2) in subsection (c)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by inserting ``, rural school 
                districts, eligible rural communities,'' before ``and 
                rural small businesses'';
                    (B) by redesignating paragraphs (2) through (4) as 
                paragraphs (3) through (5), respectively;
                    (C) by inserting after paragraph (1) the following:
            ``(2) Award prioritization.--In determining the amount of a 
        loan guarantee or grant provided under this section, the 
        Secretary may give priority--
                    ``(A) to loan guarantees rather than grants or 
                combined grant and loan guarantees, so as to maximize 
                leverage of private financing; and
                    ``(B) in the case of energy efficiency projects, to 
                loans under section 9014 or similar financing 
                mechanisms if locally available (as determined by the 
                Secretary).'';
                    (D) in paragraph (3) (as redesignated by 
                subparagraph (A))--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) the ability of a project to demonstrate the 
                economic viability for similar potential energy 
                investment projects in the locality;'';
                            (ii) in subparagraph (F), by striking 
                        ``and'' at the end;
                            (iii) by redesignating subparagraph (G) as 
                        subparagraph (H); and
                            (iv) by inserting after subparagraph (F) 
                        the following:
                    ``(G) the type of renewable energy system to be 
                purchased; and''; and
                    (E) in paragraph (5) (as so redesignated)--
                            (i) in subparagraph (A)--
                                    (I) by striking ``(A) Grants.--The 
                                amount'' and inserting the following:
                    ``(A) Grants.--
                            ``(i) In general.--The amount''; and
                                    (II) by adding at the end the 
                                following:
                            ``(ii) Limitation.--
                                    ``(I) In general.--Subject to 
                                subclause (II), not more than 15 
                                percent of the total amount of funds 
                                made available under subsection (f) 
                                that is allocated by the Secretary for 
                                grants under this subsection may be 
                                used for grants in excess of $250,000.
                                    ``(II) Limitation.--No grant under 
                                this subsection may exceed $500,000.''; 
                                and
                            (ii) by adding at the end the following:
                    ``(D) Maximum amount of loan guarantee relative to 
                cost of activity funded.--The amount of a loan 
                guaranteed under this subsection shall not exceed 90 
                percent of the cost of the activity funded under this 
                subsection.'';
            (3) in subsection (e)--
                    (A) in paragraph (1), by striking ``subsection 
                (g)'' and inserting ``subsection (f) and allocated by 
                the Secretary for grants''; and
                    (B) in paragraph (2), by striking ``subsection 
                (g)'' and inserting ``subsection (f)'';
            (4) by striking subsection (f);
            (5) by redesignating subsection (g) as subsection (f); and
            (6) in subsection (f) (as so redesignated)--
                    (A) in paragraph (1), by striking ``, to remain 
                available until expended--'' and all that follows 
                through the end of subparagraph (D) and inserting 
                ``$70,000,000 for each of fiscal years 2013 through 
                2017, to remain available until expended.'';
                    (B) by redesignating paragraph (3) as paragraph 
                (4);
                    (C) by inserting after paragraph (2) the following:
            ``(3) Limitation.--Of the funds made available for a fiscal 
        year under paragraph (1), not more than 10 percent may be made 
        available for grants or loan guarantees to rural school 
        districts or eligible rural communities.''; and
                    (D) in paragraph (4) (as redesignated by 
                subparagraph (B), by striking ``there is authorized'' 
                and all that follows through the end and inserting 
                ``there is authorized to be appropriated to carry out 
                this section $80,000,000 for each of fiscal years 2013 
                through 2017.''.

SEC. 4005. REPEAL OF FEEDSTOCK FLEXIBILITY PROGRAM FOR BIOENERGY 
              PRODUCERS.

    Section 9010 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8110) is repealed.

SEC. 4006. BIOMASS CROP ASSISTANCE PROGRAM.

    Section 9011 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8111) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (4) through (8) as 
                paragraphs (5) through (9), respectively;
                    (B) by inserting after paragraph (3) the following:
            ``(4) Delivery.--The term `delivery' means the point of 
        delivery of an eligible material or an eligible crop, as 
        determined by the Secretary.'';
                    (C) in subparagraph (B) of paragraph (5) (as so 
                redesignated)--
                            (i) in clause (i), by striking ``that is 
                        eligible'' and inserting ``that, as of the day 
                        before the date of enactment of the Rural 
                        Economic Farm and Ranch Sustainability and 
                        Hunger Act of 2011, was eligible''; and
                            (ii) in clause (ii), by striking ``or has 
                        the potential to become invasive or noxious'';
                    (D) in subparagraph (B) of paragraph (6) (as so 
                redesignated)--
                            (i) in clause (i), by adding ``or'' after 
                        the semicolon at the end;
                            (ii) in clause (ii), by striking the 
                        semicolon at the end and inserting a period; 
                        and
                            (iii) by striking clauses (iii) through 
                        (v); and
                    (E) in paragraph (7) (as so redesignated)--
                            (i) by redesignating subparagraph (B) as 
                        subparagraph (C);
                            (ii) by inserting after subparagraph (A) 
                        the following:
                    ``(B) Additional requirement for eligible material 
                from non-federal forest land.--In the case of non-
                Federal forest land and forest land belonging to an 
                Indian or Indian tribe that is in trust by the United 
                States or subject to a restriction against alienation 
                imposed by the United States, the Secretary shall 
                ensure that the definition of the term `eligible 
                material'--
                            ``(i) ensures that the renewable biomass 
                        defined as `eligible material'--
                                    ``(I) is not diverted from use in 
                                markets as of the date of enactment of 
                                the Rural Economic Farm and Ranch 
                                Sustainability and Hunger Act of 2011;
                                    ``(II) has been determined to be 
                                otherwise uneconomically retrievable; 
                                and
                                    ``(III) is harvested in accordance 
                                with an approved conservation, forest 
                                stewardship, or equivalent plan; and
                            ``(ii) includes a requirement that the 
                        renewable biomass is harvested directly from 
                        the land for delivery to a biomass conversion 
                        facility.''; and
                            (iii) in subparagraph (C) (as redesignated 
                        by clause (i))--
                                    (I) in clause (i)--
                                            (aa) by striking ``that is 
                                        eligible'' and inserting 
                                        ``that, as of the day before 
                                        the date of enactment of the 
                                        Rural Economic Farm and Ranch 
                                        Sustainability and Hunger Act 
                                        of 2011, was eligible''; and
                                            (bb) by inserting before 
                                        the semicolon at the end ``, 
                                        except that residues from such 
                                        crops are eligible if harvested 
                                        from the land in accordance 
                                        with an approved conservation 
                                        or equivalent plan''; and
                                    (II) in clause (iii), by striking 
                                ``and yard waste'' and inserting ``, 
                                yard waste, municipal solid waste, and 
                                sewage'';
            (2) in subsection (b)(2), by inserting ``collected directly 
        from the land'' after ``eligible material'';
            (3) in subsection (c)(5)--
                    (A) in subparagraph (B)--
                            (i) by redesignating clauses (i) through 
                        (iii) as items (aa) through (cc), respectively, 
                        and indenting appropriately;
                            (ii) by striking ``shall be up to 75'' and 
                        inserting ``shall be--
                            ``(i) up to 50'';
                            (iii) in item (cc) (as designated by clause 
                        (i)), by striking the period at the end and 
                        inserting ``; and''; and
                            (iv) by adding at the end the following:
                            ``(ii) if the Secretary determines that a 
                        greater amount of support is necessary to 
                        demonstrate more capital intensive cropping 
                        opportunities or in the case of socially 
                        disadvantaged farmers or ranchers (as defined 
                        in section 355(e) of the Consolidated Farm and 
                        Rural Development Act (7 U.S.C. 2003(e))), up 
                        to 65 percent of the costs of establishing an 
                        eligible perennial crop covered by the contract 
                        (as determined under clause (i)); and
                            ``(iii) determined by the Secretary in a 
                        manner that seeks to minimize Federal costs, 
                        recognizing that the Secretary is not obligated 
                        to provide maximum cost-share allowances under 
                        this section.'';
                    (B) in subparagraph (C)(ii), in the clause heading, 
                by inserting ``in annual payments under contract'' 
                after ``Reduction''; and
                    (C) by adding at the end the following:
                    ``(D) Requirements.--Subject to subparagraphs (B) 
                and (C), the Secretary shall award payments under this 
                subsection on a competitive basis, taking into 
                consideration the needs--
                            ``(i) to demonstrate the economic viability 
                        of diverse bioenergy crops; and
                            ``(ii) to encourage cost competition in 
                        establishment of eligible crops.'';
            (4) in subsection (d)--
                    (A) in paragraph (1), in the matter preceding 
                subparagraph (A), by inserting ``collected directly 
                from the land'' after ``eligible material''; and
                    (B) in paragraph (2), by striking subparagraph (B) 
                and inserting the following:
                    ``(B) Amount.--
                            ``(i) In general.--The amount of a matching 
                        payment under this subsection shall be 
                        determined by the Secretary.
                            ``(ii) Requirements.--Subject to 
                        subparagraph (C), the Secretary shall award 
                        payments on a competitive basis, taking into 
                        consideration the need--
                                    ``(I) to demonstrate the economic 
                                viability of diverse eligible crops and 
                                eligible materials that otherwise would 
                                be uneconomically retrievable for high 
                                priority uses (such as advanced 
                                biofuels and biobased products); and
                                    ``(II) to encourage cost 
                                competition in the collection, harvest, 
                                storage, and transportation of eligible 
                                crops to a biomass conversion facility.
                    ``(C) Maximum payment.--Subject to paragraph (3), 
                the Secretary may provide matching payments at a 
                maximum rate of $0.50 for each $1 per dry ton provided 
                by the biomass conversion facility, in an amount equal 
                to not more than $35 per ton for a period of 2 years.
                    ``(D) Minimization of costs.--In determining 
                payment levels under this section, the Secretary 
                shall--
                            ``(i) seek to minimize costs; and
                            ``(ii) not be required to provide the 
                        maximum rate of payment allowed under this 
                        section.
                    ``(E) Prohibition.--Payments may not be made under 
                this section for eligible materials collected or 
                harvested that, after delivery to a biomass conversion 
                facility, the campus of the facility, or affiliated 
                facilities, as determined by the Secretary, are 
                required to be separated from eligible materials used 
                for a higher-value product in order to be used for 
                heat, power, biobased products, or advanced 
                biofuels.''; and
            (5) by striking subsections (e) and (f) and inserting the 
        following:
    ``(e) Funding.--
            ``(1) Mandatory funding.--
                    ``(A) In general.--Of the funds of the Commodity 
                Credit Corporation, the Secretary shall use to carry 
                out this section $55,000,000 for each of the fiscal 
                years 2013 through 2017, to remain available until 
                expended.
                    ``(B) BCAP project area.--Of the funds made 
                available for each fiscal year under subparagraph (A), 
                not less than 50 percent shall be made available to 
                carry out subsection (c).
            ``(2) Discretionary funding.--In addition to any other 
        funds made available to carry out this section, there is 
        authorized to be appropriated to carry out this section 
        $150,000,000 for each of fiscal years 2013 through 2017.
            ``(3) Technical assistance.--Notwithstanding paragraph 
        (1)(B), the Secretary may use funds made available for each 
        fiscal year under this subsection to provide technical 
        assistance.''.

SEC. 4007. RURAL ENERGY SAVINGS PROGRAM.

    Title IX of the Farm Security and Rural Investment Act of 2002 (7 
U.S.C. 8101 et seq.) is amended by adding at the end the following:

``SEC. 9014. RURAL ENERGY SAVINGS PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means--
                    ``(A) any public power district, public utility 
                district, or similar entity, or any electric 
                cooperative described in section 501(c)(12) or 
                1381(a)(2) of the Internal Revenue Code of 1986, that 
                borrowed and repaid, prepaid, or is paying an electric 
                loan made or guaranteed by the Rural Utilities Service 
                (or any predecessor agency);
                    ``(B) any entity primarily owned or controlled by 1 
                or more entities described in subparagraph (A); or
                    ``(C) any other entity that is an eligible borrower 
                of the Rural Utility Service (as determined under 
                section 1710.101 of title 7, Code of Federal 
                Regulations (or a successor regulation)).
            ``(2) Energy efficiency measures.--The term `energy 
        efficiency measures' means, for or at property served by an 
        eligible entity, structural improvements and investments in 
        cost-effective, commercial technologies to increase energy 
        efficiency.
            ``(3) Qualified consumer.--The term `qualified consumer' 
        means a consumer served by an eligible entity that has the 
        ability to repay a loan made under subsection (c), as 
        determined by the eligible entity.
            ``(4) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture, acting through the Administrator of the Rural 
        Utilities Service.
    ``(b) Loans to Eligible Entities.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall make loans to eligible entities that agree to use the 
        loan funds to make loans to qualified consumers for the purpose 
        of implementing energy efficiency measures.
            ``(2) Requirements.--
                    ``(A) In general.--As a condition of receiving a 
                loan under this subsection, an eligible entity shall--
                            ``(i) establish a list of energy efficiency 
                        measures that is expected to decrease energy 
                        use or costs of qualified consumers;
                            ``(ii) prepare an implementation plan for 
                        use of the loan funds, including for interest 
                        rate utilization under subsection (c)(1)(A);
                            ``(iii) provide for appropriate measurement 
                        and verification to ensure--
                                    ``(I) the effectiveness of the 
                                energy efficiency loans made by the 
                                eligible entity; and
                                    ``(II) that there is no conflict of 
                                interest in carrying out this section; 
                                and
                            ``(iv) demonstrate expertise in effective 
                        use of energy efficiency measures at scale.
                    ``(B) Revision of list of energy efficiency 
                measures.--Subject to the approval of the Secretary, an 
                eligible entity may update the list required under 
                subparagraph (A)(i) to account for newly available 
                efficiency technologies.
                    ``(C) Existing energy efficiency programs.--An 
                eligible entity that, at any time before the date that 
                is 60 days after the date of enactment of this section, 
                has established an energy efficiency program for 
                qualified consumers may use an existing list of energy 
                efficiency measures, implementation plan, or 
                measurement and verification system of that program to 
                satisfy the requirements of subparagraph (A) if the 
                Secretary determines the list, plan, or systems are 
                consistent with the purposes of this section.
            ``(3) No interest.--A loan under this subsection shall bear 
        no interest.
            ``(4) Repayment.--With respect to a loan under paragraph 
        (1)--
                    ``(A) the term shall not exceed 20 years from the 
                date on which the loan is closed; and
                    ``(B) except as provided in paragraph (6), the 
                repayment of each advance shall be amortized for a 
                period not to exceed 10 years.
            ``(5) Amount of advances.--Any advance of loan funds to an 
        eligible entity in any single year shall not exceed 50 percent 
        of the approved loan amount.
            ``(6) Special advance for start-up activities.--
                    ``(A) In general.--In order to assist an eligible 
                entity in defraying the appropriate start-up costs (as 
                determined by the Secretary) of establishing new 
                programs or modifying existing programs to carry out 
                subsection (c), the Secretary shall allow an eligible 
                entity to request a special advance.
                    ``(B) Amount.--No eligible entity may receive a 
                special advance under this paragraph for an amount that 
                is greater than 4 percent of the loan amount received 
                by the eligible entity under paragraph (1).
                    ``(C) Repayment.--Repayment of the special 
                advance--
                            ``(i) shall be required during the 10-year 
                        period beginning on the date on which the 
                        special advance is made; and
                            ``(ii) at the election of the eligible 
                        entity, may be deferred to the end of the 10-
                        year period.
            ``(7) Limitation.--All special advances shall be made under 
        a loan described in paragraph (1) during the first 10 years of 
        the term of the loan.
    ``(c) Loans to Qualified Consumers.--
            ``(1) Terms of loans.--Loans made by an eligible entity to 
        qualified consumers using loan funds provided by the Secretary 
        under subsection (b)--
                    ``(A) may bear interest, not to exceed 3 percent, 
                to be used for purposes that include--
                            ``(i) to establish a loan loss reserve; and
                            ``(ii) to offset additional personnel and 
                        program costs of eligible entities to provide 
                        the loans;
                    ``(B) shall finance energy efficiency measures for 
                the purpose of decreasing energy usage or costs of the 
                qualified consumer by an amount that ensures, to the 
                maximum extent practicable, that a loan term of not 
                more than 10 years will not pose an undue financial 
                burden on the qualified consumer, as determined by the 
                eligible entity;
                    ``(C) shall not be used to fund purchases of, or 
                modifications to, personal property, unless the 
                personal property is or becomes attached to real 
                property (including a manufactured home) as a fixture;
                    ``(D) shall be repaid through charges added to the 
                electric bill for the property for, or at which, energy 
                efficiency measures are or will be implemented, on the 
                condition that this requirement does not prohibit--
                            ``(i) the voluntary prepayment of a loan by 
                        the owner of the property; or
                            ``(ii) the use of any additional repayment 
                        mechanisms that are--
                                    ``(I) demonstrated to have 
                                appropriate risk mitigation features, 
                                as determined by the eligible entity; 
                                or
                                    ``(II) required if the qualified 
                                consumer is no longer a customer of the 
                                eligible entity; and
                    ``(E) shall require an energy audit by an eligible 
                entity to determine the impact of proposed energy 
                efficiency measures on the energy costs and consumption 
                of the qualified consumer.
            ``(2) Contractors.--In addition to any other qualified 
        general contractor, eligible entities may serve as general 
        contractors.
    ``(d) Contract for Measurement and Verification, Training, and 
Technical Assistance.--
            ``(1) In general.--Not later than 90 days after the date of 
        enactment of this section, the Secretary--
                    ``(A) shall establish a plan for measurement and 
                verification, training, and technical assistance of the 
                program; and
                    ``(B) may enter into 1 or more contracts with a 
                qualified entity for the purposes of--
                            ``(i) providing measurement and 
                        verification activities; and
                            ``(ii) developing a program to provide 
                        technical assistance and training to the 
                        employees of eligible entities to carry out 
                        this section.
            ``(2) Use of subcontractors authorized.--A qualified entity 
        that enters into a contract under paragraph (1) may use 
        subcontractors to assist the qualified entity in carrying out 
        the contract.
    ``(e) Fast Start Demonstration Projects.--
            ``(1) In general.--The Secretary shall offer to enter into 
        agreements with eligible entities (or groups of eligible 
        entities) that have energy efficiency programs described in 
        subsection (b)(2)(C) to establish an energy efficiency loan 
        demonstration projects consistent with the purposes of this 
        section.
            ``(2) Evaluation criteria.--In determining which eligible 
        entities to award loans under this section, the Secretary shall 
        take into consideration eligible entities that--
                    ``(A) implement approaches to energy audits and 
                investments in energy efficiency measures that yield 
                measurable and predictable savings;
                    ``(B) use measurement and verification processes to 
                determine the effectiveness of energy efficiency loans 
                made by eligible entities;
                    ``(C) include training for employees of eligible 
                entities, including any contractors of such entities, 
                to implement or oversee the activities described in 
                subparagraphs (A) and (B);
                    ``(D) provide for the participation of a majority 
                of eligible entities in a State;
                    ``(E) reduce the need for generating capacity;
                    ``(F) provide efficiency loans to--
                            ``(i) in the case of a single eligible 
                        entity, not fewer than 20,000 consumers; or
                            ``(ii) in the case of a group of eligible 
                        entities, not fewer than 80,000 consumers; and
                    ``(G) serve areas in which, as determined by the 
                Secretary, a large percentage of consumers reside--
                            ``(i) in manufactured homes; or
                            ``(ii) in housing units that are more than 
                        50 years old.
            ``(3) Deadline for implementation.--To the maximum extent 
        practicable, the Secretary shall enter into agreements 
        described in paragraph (1) by not later than 90 days after the 
        date of enactment of this section.
            ``(4) Effect on availability of loans nationally.--Nothing 
        in this subsection shall delay the availability of loans to 
        eligible entities on a national basis beginning not later than 
        180 days after the date of enactment of this section.
            ``(5) Additional demonstration project authority.--
                    ``(A) In general.--The Secretary may conduct 
                demonstration projects in addition to the project 
                required by paragraph (1).
                    ``(B) Inapplicability of certain criteria.--The 
                additional demonstration projects may be carried out 
                without regard to subparagraphs (D), (F), or (G) of 
                paragraph (2).
    ``(f) Additional Authority.--The authority provided in this section 
is in addition to any other authority of the Secretary to offer loans 
under any other law.
    ``(g) Funding.--
            ``(1) Mandatory funding.--Of the funds of the Commodity 
        Credit Corporation, the Secretary shall use to carry out this 
        section $70,000,000 for each of fiscal years 2013 through 2017.
            ``(2) Discretionary funding.--In addition to any other 
        funds made available to carry out this section, there is 
        authorized to be appropriated to the Secretary to carry out 
        this section $80,000,000 for each of fiscal years 2013 through 
        2017, to remain available until expended.
    ``(h) Effective Period.--Subject to the availability of funds under 
subsection (g) and except as otherwise provided in this section, the 
loans and other expenditures required to be made under this section 
shall be available until expended, with the Secretary authorized to 
make new loans as loans are repaid.
    ``(i) Regulations.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, not later than 180 days after the date of enactment 
        of this section, 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 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
                    ``(B) 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 section, the Secretary shall use the 
        authority provided under section 808 of title 5, United States 
        Code.
            ``(4) Interim regulations.--Notwithstanding paragraphs (1) 
        and (2), to the extent regulations are necessary to carry out 
        any provision of this section, the Secretary shall implement 
        such regulations through the promulgation of an interim 
        rule.''.

              TITLE V--TECHNICAL IMPROVEMENTS TO RESEARCH

SEC. 5001. MATCHING FUND REQUIREMENT UNDER MCINTIRE-STENNIS COOPERATIVE 
              FORESTRY ACT.

    (a) 1890 Waivers.--Section 4 of Public Law 87-788 (commonly known 
as the ``McIntire-Stennis Cooperative Forestry Act'') (16 U.S.C. 582a-
3) is amended--
            (1) by designating the first sentence and the second 
        through fifth sentences as subsection (a) and subsections (c) 
        through (f), respectively; and
            (2) by inserting after subsection (a) (as so designated) 
        the following:
    ``(b) 1890 Institutions.--The matching funds requirement of this 
section shall not be applicable to 1890 Institutions (as defined in 
section 2 of the Agricultural Research, Extension, and Education Reform 
Act of 1998 (7 U.S.C. 7601)) if the allocation is below $200,000 for a 
fiscal year.''.
    (b) Participation.--Section 8 of Public Law 87-788 (commonly known 
as the ``McIntire-Stennis Cooperative Forestry Act'') (16 U.S.C. 582a-
7) is amended by inserting ``the Federated States of Micronesia, 
American Samoa, the Commonwealth of the Northern Mariana Islands,'' 
after ``the Virgin Islands,''.

SEC. 5002. MATCHING FUND REQUIREMENT UNDER HATCH ACT OF 1887.

    Section 3(d) of the Hatch Act of 1887 (7 U.S.C. 361c(d)) is 
amended--
            (1) in paragraph (1), by inserting before the period at the 
        following: ``, except that a State may obtain $2 from private 
        sources for each $1 the State is required to match under this 
        Act''; and
            (2) in paragraph (4)(A), by inserting before the period at 
        the following: ``, except that an insular area or the District 
        of Columbia may obtain $2 from private sources for each $1 the 
        insular area or the District of Columbia, respectively, is 
        required to match under this Act''.

SEC. 5003. MATCHING FUND REQUIREMENT UNDER SMITH-LEVER ACT.

    Section 3(e) of the Smith-Lever Act (7 U.S.C. 343(e)) is amended--
            (1) in paragraph (1), by inserting before the period at the 
        following: ``, except that a State may obtain $2 from private 
        sources for each $1 the State is required to match under this 
        Act''; and
            (2) in paragraph (4)(A), by inserting before the period at 
        the following: ``, except that an insular area or the District 
        of Columbia may obtain $2 from private sources for each $1 the 
        insular area or the District of Columbia, respectively, is 
        required to match under this Act''.

SEC. 5004. BIOMASS RESEARCH AND DEVELOPMENT INITIATIVE.

    (a) Movement of Initiative.--Section 9008 of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 8108) is--
            (1) redesignated as section 1473H of the National 
        Agricultural Research, Extension, and Teaching Policy Act of 
        1977; and
            (2) moved so as to appear at the end of subtitle K of that 
        Act (7 U.S.C. 3310 et seq.).
    (b) Reauthorization and Improvement of Initiative.--Section 1473H 
of the National Agricultural Research, Extension, and Teaching Policy 
Act of 1977 (as redesignated and moved by subsection (a)) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (1), (2), and (3) 
                as paragraphs (2), (6), and (7), respectively;
                    (B) by inserting before paragraph (2) (as so 
                redesignated) the following:
            ``(1) Advisory committee.--The term `Advisory Committee' 
        means the Biomass Research and Development Technical Advisory 
        Committee established by subsection (d)(1).'';
                    (C) by inserting after paragraph (2) (as so 
                redesignated) the following:
            ``(3) Biofuel.--The term `biofuel' means a fuel derived 
        from renewable biomass.
            ``(4) Biorefinery.--The term `biorefinery' means a facility 
        (including equipment and processes) that--
                    ``(A) converts renewable biomass into biofuels and 
                biobased products; and
                    ``(B) may produce electricity.
            ``(5) Board.--The term `Board' means the Biomass Research 
        and Development Board established by subsection (c).''; and
                    (D) by adding at the end the following:
            ``(8) Institution of higher education.--The term 
        `institution of higher education' has the meaning given the 
        term in section 102(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1002(a)).
            ``(9) Renewable biomass.--The term `renewable biomass' has 
        the meaning given the term in section 9001 of the Farm Security 
        and Rural Investment Act of 2002 (7 U.S.C. 8101).'';
            (2) in subsection (e)--
                    (A) in paragraph (3)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``the Administrator of the 
                        Environmental Protection Agency and''; and
                            (ii) by subparagraph (B)(i), by striking 
                        ``cellulosic''; and
                    (B) in paragraph (4)(C), by striking 
                ``cellulosic'';
            (3) in subsection (g), in the matter preceding paragraph 
        (1), by striking ``For each fiscal year for which funds are 
        made available to carry out this section'' and inserting 
        ``Every 2 years''; and
            (4) in subsection (h)--
                    (A) in paragraph (1), by striking ``expended--'' 
                and all that follows through the period at the end and 
                inserting ``expended, $60,000,000 for each of fiscal 
                years 2013 through 2017.''; and
                    (B) in paragraph (2), by striking ``$35,000,000 for 
                each of fiscal years 2009 through 2012'' and inserting 
                ``$115,000,000 for each of fiscal years 2013 through 
                2017''.
    (c) Conforming Amendments.--Section 9001 of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 8101) is amended--
            (1) by striking paragraphs (2) and (8);
            (2) by redesignating paragraphs (3) through (7) as 
        paragraphs (2) through (6), respectively; and
            (3) by redesignating paragraphs (9) through (14) as 
        paragraphs (7) through (12), respectively.

                        TITLE VI--MISCELLANEOUS

SEC. 6001. BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the Senate Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.
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