PUBLIC LAW 104–127—APR. 4, 1996

FEDERAL AGRICULTURE IMPROVEMENT AND

REFORM ACT OF 1996
110 STAT. 888 PUBLIC LAW 104–127—APR. 4, 1996

Public Law 104–127

104th Congress

An Act

To modify the operation of certain agricultural programs.

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 ‘‘Federal Agriculture Improvement and Reform Act of 1996’’.

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

is as follows:

Sec. 1. Short title; table of contents.

TITLE I—AGRICULTURAL MARKET TRANSITION ACT

Subtitle A—Short Title, Purpose, and Definitions

Sec. 101. Short title and purpose.

Sec. 102. Definitions.

Subtitle B—Production Flexibility Contracts

Sec. 111. Authorization for use of production flexibility contracts.

Sec. 112. Elements of contracts.

Sec. 113. Amounts available for contract payments.

Sec. 114. Determination of contract payments under contracts.

Sec. 115. Payment limitations.

Sec. 116. Violations of contract.

Sec. 117. Transfer or change of interest in lands subject to contract.

Sec. 118. Planting flexibility.

Subtitle C—Nonrecourse Marketing Assistance Loans and Loan Deficiency

Payments

Sec. 131. Availability of nonrecourse marketing assistance loans.

Sec. 132. Loan rates for marketing assistance loans.

Sec. 133. Term of loans.

Sec. 134. Repayment of loans.

Sec. 135. Loan deficiency payments.

Sec. 136. Special marketing loan provisions for upland cotton.

Sec. 137. Availability of recourse loans for high moisture feed grains and seed cotton.

Subtitle D—Other Commodities

CHAPTER 1—DAIRY

Sec. 141. Milk price support program.

Sec. 142. Recourse loan program for commercial processors of dairy products.

Sec. 143. Consolidation and reform of Federal milk marketing orders.

Sec. 144. Effect on fluid milk standards in State of California.

Sec. 145. Milk manufacturing marketing adjustment.

Sec. 146. Promotion.

Sec. 147. Northeast Interstate Dairy Compact.

Sec. 148. Dairy export incentive program.

Sec. 149. Authority to assist in establishment and maintenance of one or more export trading companies.

Sec. 150. Standby authority to indicate entity best suited to provide international

market development and export services.

7 USC 7201 note.

Federal

Agriculture

Improvement

and Reform Act

of 1996.

Apr. 4, 1996

[H.R. 2854]
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 889

Sec. 151. Study and report regarding potential impact of Uruguay Round on prices,

income, and Government purchases.

Sec. 152. Promotion of United States dairy products in international markets

through dairy promotion program.

CHAPTER 2—PEANUTS AND SUGAR

Sec. 155. Peanut program.

Sec. 156. Sugar program.

Subtitle E—Administration

Sec. 161. Administration.

Sec. 162. Adjustments of loans.

Sec. 163. Commodity Credit Corporation interest rate.

Sec. 164. Personal liability of producers for deficiencies.

Sec. 165. Commodity Credit Corporation sales price restrictions.

Subtitle F—Permanent Price Support Authority

Sec. 171. Suspension and repeal of permanent price support authority.

Sec. 172. Effect of amendments.

Subtitle G—Commission on 21st Century Production Agriculture

Sec. 181. Establishment.

Sec. 182. Composition.

Sec. 183. Comprehensive review of past and future of production agriculture.

Sec. 184. Reports.

Sec. 185. Powers.

Sec. 186. Commission procedures.

Sec. 187. Personnel matters.

Sec. 188. Termination of Commission.

Subtitle H—Miscellaneous Commodity Provisions

Sec. 191. Options pilot program.

Sec. 192. Risk management education.

Sec. 193. Crop insurance.

Sec. 194. Establishment of Office of Risk Management.

Sec. 195. Revenue insurance.

Sec. 196. Administration and operation of noninsured crop assistance program.

TITLE II—AGRICULTURAL TRADE

Subtitle A—Amendments to Agricultural Trade Development and Assistance Act of

1954 and Related Statutes

Sec. 201. Food aid to developing countries.

Sec. 202. Trade and development assistance.

Sec. 203. Agreements regarding eligible countries and private entities.

Sec. 204. Terms and conditions of sales.

Sec. 205. Use of local currency payment.

Sec. 206. Value-added foods.

Sec. 207. Eligible organizations.

Sec. 208. Generation and use of foreign currencies.

Sec. 209. General levels of assistance under Public Law 480.

Sec. 210. Food Aid Consultative Group.

Sec. 211. Support of nongovernmental organizations.

Sec. 212. Commodity determinations.

Sec. 213. General provisions.

Sec. 214. Agreements.

Sec. 215. Use of Commodity Credit Corporation.

Sec. 216. Administrative provisions.

Sec. 217. Expiration date.

Sec. 218. Regulations.

Sec. 219. Independent evaluation of programs.

Sec. 220. Authorization of appropriations.

Sec. 221. Coordination of foreign assistance programs.

Sec. 222. Micronutrient fortification pilot program.

Sec. 223. Use of certain local currency.

Sec. 224. Farmer-to-farmer program.

Sec. 225. Food security commodity reserve.

Sec. 226. Protein byproducts derived from alcohol fuel production.

Sec. 227. Food for progress program.

Sec. 228. Use of foreign currency proceeds from export sales financing.
110 STAT. 890 PUBLIC LAW 104–127—APR. 4, 1996

Sec. 229. Stimulation of foreign production.

Subtitle B—Amendments to Agricultural Trade Act of 1978

Sec. 241. Agricultural export promotion strategy.

Sec. 242. Implementation of commitments under Uruguay Round Agreements.

Sec. 243. Export credits.

Sec. 244. Market access program.

Sec. 245. Export enhancement program.

Sec. 246. Arrival certification.

Sec. 247. Compliance.

Sec. 248. Regulations.

Sec. 249. Trade compensation and assistance programs.

Sec. 250. Foreign Agricultural Service.

Sec. 251. Reports.

Sec. 252. Foreign market development cooperator program.

Subtitle C—Miscellaneous Agricultural Trade Provisions

Sec. 261. Edward R. Madigan United States Agricultural Export Excellence Award.

Sec. 262. Reporting requirements relating to tobacco.

Sec. 263. Triggered export enhancement.

Sec. 264. Disposition of commodities to prevent waste.

Sec. 265. Debt-for-health-and-protection swap.

Sec. 266. Policy on expansion of international markets.

Sec. 267. Policy on maintenance and development of export markets.

Sec. 268. Policy on trade liberalization.

Sec. 269. Agricultural trade negotiations.

Sec. 270. Policy on unfair trade practices.

Sec. 271. Agricultural aid and trade missions.

Sec. 272. Annual reports by agricultural attaches.

Sec. 273. World livestock market price information.

Sec. 274. Orderly liquidation of stocks.

Sec. 275. Sales of extra long staple cotton.

Sec. 276. Regulations.

Sec. 277. Emerging markets.

Sec. 278. Reimbursement for overhead expenses.

Sec. 279. Labeling of domestic and imported lamb and mutton.

Sec. 280. Import assistance for CBI beneficiary countries and the Philippines.

Sec. 281. Studies, reports, and other provisions.

Sec. 282. Sense of Congress concerning multilateral disciplines on credit guarantees.

Sec. 283. International Cotton Advisory Committee.

TITLE III—CONSERVATION

Subtitle A—Definitions

Sec. 301. Definitions applicable to highly erodible cropland conservation.

Subtitle B—Highly Erodible Land Conservation

Sec. 311. Program ineligibility.

Sec. 312. Conservation reserve lands.

Sec. 313. Good faith exemption.

Sec. 314. Expedited procedures for granting variances from conservation plans.

Sec. 315. Development and implementation of conservation plans and conservation

systems.

Sec. 316. Investigation of possible compliance deficiencies.

Sec. 317. Wind erosion estimation pilot project.

Subtitle C—Wetland Conservation

Sec. 321. Program ineligibility.

Sec. 322. Delineation of wetlands; exemptions to program ineligibility.

Sec. 323. Consultation and cooperation requirements.

Sec. 324. Application of program ineligibility to affiliated persons.

Sec. 325. Clarification of definition of agricultural lands in memorandum of agreement.

Sec. 326. Effective date.

Subtitle D—Environmental Conservation Acreage Reserve Program

Sec. 331. Environmental conservation acreage reserve program.

Sec. 332. Conservation reserve program.

Sec. 333. Wetlands reserve program.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 891

Sec. 334. Environmental quality incentives program.

Sec. 335. Conservation farm option.

Sec. 336. Repeal of superseded authorities.

Subtitle E—Conservation Funding and Administration

Sec. 341. Conservation funding and administration.

Sec. 342. State technical committees.

Sec. 343. Public notice and comment for revisions to certain State technical guides.

Subtitle F—National Natural Resources Conservation Foundation

Sec. 351. Short title.

Sec. 352. Definitions.

Sec. 353. National Natural Resources Conservation Foundation.

Sec. 354. Composition and operation.

Sec. 355. Officers and employees.

Sec. 356. Corporate powers and obligations of the Foundation.

Sec. 357. Administrative services and support.

Sec. 358. Audits and petition of Attorney General for equitable relief.

Sec. 359. Release from liability.

Sec. 360. Authorization of appropriations.

Subtitle G—Forestry

Sec. 371. Office of International Forestry.

Sec. 372. Cooperative work for protection, management, and improvement of National Forest System.

Sec. 373. Forestry incentives program.

Sec. 374. Optional State grants for forest legacy program.

Subtitle H—Miscellaneous Conservation Provisions

Sec. 381. Conservation activities of Commodity Credit Corporation.

Sec. 382. Floodplain easements.

Sec. 383. Resource conservation and development program.

Sec. 384. Repeal of report requirement.

Sec. 385. Flood risk reduction.

Sec. 386. Conservation of private grazing land.

Sec. 387. Wildlife habitat incentives program.

Sec. 388. Farmland protection program.

Sec. 389. Interim moratorium on bypass flows.

Sec. 390. Everglades ecosystem restoration.

Sec. 391. Agricultural air quality research oversight.

TITLE IV—NUTRITION ASSISTANCE

Sec. 401. Food stamp program.

Sec. 402. Commodity distribution program; commodity supplemental food program.

Sec. 403. Emergency food assistance program.

Sec. 404. Soup kitchen and food bank program.

Sec. 405. National commodity processing.

TITLE V—AGRICULTURAL PROMOTION

Subtitle A—Commodity Promotion and Evaluation

Sec. 501. Commodity promotion and evaluation.

Subtitle B—Issuance of Orders for Promotion, Research, and Information Activities

Regarding Agricultural Commodities

Sec. 511. Short title.

Sec. 512. Findings and purpose.

Sec. 513. Definitions.

Sec. 514. Issuance of orders.

Sec. 515. Required terms in orders.

Sec. 516. Permissive terms in orders.

Sec. 517. Assessments.

Sec. 518. Referenda.

Sec. 519. Petition and review of orders.

Sec. 520. Enforcement.

Sec. 521. Investigations and power to subpoena.

Sec. 522. Suspension or termination.

Sec. 523. Amendments to orders.

Sec. 524. Effect on other laws.

Sec. 525. Regulations.
110 STAT. 892 PUBLIC LAW 104–127—APR. 4, 1996

Sec. 526. Authorization of appropriations.

Subtitle C—Canola and Rapeseed

Sec. 531. Short title.

Sec. 532. Findings and declaration of policy.

Sec. 533. Definitions.

Sec. 534. Issuance and amendment of orders.

Sec. 535. Required terms in orders.

Sec. 536. Assessments.

Sec. 537. Referenda.

Sec. 538. Petition and review.

Sec. 539. Enforcement.

Sec. 540. Investigations and power to subpoena.

Sec. 541. Suspension or termination.

Sec. 542. Regulations.

Sec. 543. Authorization of appropriations.

Subtitle D—Kiwifruit

Sec. 551. Short title.

Sec. 552. Findings and purposes.

Sec. 553. Definitions.

Sec. 554. Issuance of orders.

Sec. 555. National Kiwifruit Board.

Sec. 556. Required terms in order.

Sec. 557. Permissive terms in order.

Sec. 558. Petition and review.

Sec. 559. Enforcement.

Sec. 560. Investigations and power to subpoena.

Sec. 561. Referenda.

Sec. 562. Suspension or termination.

Sec. 563. Regulations.

Sec. 564. Authorization of appropriations.

Subtitle E—Popcorn

Sec. 571. Short title.

Sec. 572. Findings and declaration of policy.

Sec. 573. Definitions.

Sec. 574. Issuance of orders.

Sec. 575. Required terms in orders.

Sec. 576. Referenda.

Sec. 577. Petition and review.

Sec. 578. Enforcement.

Sec. 579. Investigations and power to subpoena.

Sec. 580. Relation to other programs.

Sec. 581. Regulations.

Sec. 582. Authorization of appropriations.

Subtitle F—Miscellaneous

Sec. 591. Maintenance of records for honey promotion program.

TITLE VI—CREDIT

Subtitle A—Farm Ownership Loans

Sec. 601. Limitation on direct farm ownership loans.

Sec. 602. Purposes of loans.

Sec. 603. Soil and water conservation and protection.

Sec. 604. Interest rate requirements.

Sec. 605. Insurance of loans.

Sec. 606. Loans guaranteed.

Subtitle B—Operating Loans

Sec. 611. Limitation on direct operating loans.

Sec. 612. Purposes of operating loans.

Sec. 613. Participation in loans.

Sec. 614. Line-of-credit loans.

Sec. 615. Insurance of operating loans.

Sec. 616. Special assistance for beginning farmers and ranchers.

Sec. 617. Limitation on period for which borrowers are eligible for guaranteed assistance.

Subtitle C—Emergency Loans

Sec. 621. Hazard insurance requirement.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 893

Sec. 622. Narrowing of authority to waive application of the credit elsewhere test.

Sec. 623. Linking of emergency loans for crop or livestock changes to natural disasters.

Sec. 624. Maximum emergency loan indebtedness.

Sec. 625. Establishment of date for emergency loan asset valuation.

Sec. 626. Insurance of emergency loans.

Subtitle D—Administrative Provisions

Sec. 631. Temporary authority to enter into contracts.

Sec. 632. Use of collection agencies.

Sec. 633. Notice of loan service programs.

Sec. 634. Clarification of written statement required of borrowers.

Sec. 635. Annual review of the credit history, business operation, and continued eligibility of a borrower.

Sec. 636. Extension of veterans preference.

Sec. 637. Verification of the credit elsewhere test.

Sec. 638. Sale of property.

Sec. 639. Easements on inventoried property.

Sec. 640. Definitions.

Sec. 641. Authorization for loans.

Sec. 642. Contracts on loan security properties.

Sec. 643. List of certified lenders and inventory property demonstration project.

Sec. 644. Homestead property.

Sec. 645. Restructuring.

Sec. 646. Transfer of inventory land for conservation purposes.

Sec. 647. Implementation of target participation rates.

Sec. 648. Delinquent borrowers.

Sec. 649. Short form certification of farm program borrower compliance.

Sec. 650. Credit study.

Subtitle E—General Provisions

Sec. 661. Conforming amendments.

Sec. 662. Electronic filing of effective financing statements under the clear title provisions of the Food Security Act of 1985.

Sec. 663. Effective date.

TITLE VII—RURAL DEVELOPMENT

Subtitle A—Amendments to the Food, Agriculture, Conservation, and Trade Act of

1990

CHAPTER 1—GENERAL PROVISIONS

Sec. 701. Rural investment partnerships.

Sec. 702. Water and waste facility financing.

Sec. 703. Rural wastewater circuit rider program.

Sec. 704. Telemedicine and distance learning services in rural areas.

Sec. 705. Limitation on authorization of appropriations for rural technology grants.

Sec. 706. Demonstration projects.

Sec. 707. Monitoring the economic progress of rural America.

Sec. 708. Analysis by Office of Technology Assessment.

Sec. 709. Rural health infrastructure improvement.

Sec. 710. Census of agriculture.

Sec. 711. Study of the transportation of fertilizer and agricultural chemicals to

farmers.

CHAPTER 2—ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION

Sec. 721. Definitions.

Sec. 722. Alternative Agricultural Research and Commercialization Corporation.

Sec. 723. Board of directors, employees, and facilities.

Sec. 724. Research and development grants, contracts, and agreements.

Sec. 725. Commercialization assistance.

Sec. 726. General rules regarding the provision of assistance.

Sec. 727. Regional centers.

Sec. 728. Alternative Agricultural Research and Commercialization Revolving

Fund.

Sec. 729. Procurement preferences for products receiving Corporation assistance.

Sec. 730. Business plan and feasibility study and report.

Subtitle B—Amendments to the Consolidated Farm and Rural Development Act

CHAPTER 1—GENERAL PROVISIONS

Sec. 741. Water and waste facility loans and grants.
110 STAT. 894 PUBLIC LAW 104–127—APR. 4, 1996

Sec. 742. Emergency community water assistance grant program for small communities.

Sec. 743. Emergency community water assistance grant program for smallest communities.

Sec. 744. Agricultural Credit Insurance Fund.

Sec. 745. Rural Development Insurance Fund.

Sec. 746. Insured watershed and resource conservation and development loans.

Sec. 747. Rural industrialization assistance.

Sec. 748. Administration.

Sec. 749. Authorization of appropriations.

Sec. 750. Testimony before congressional committees.

Sec. 751. Prohibition on use of loans for certain purposes.

Sec. 752. Rural development certified lenders program.

Sec. 753. System for delivery of certain rural development programs.

Sec. 754. State rural economic development review panel.

Sec. 755. Limited transfer authority of loan amounts.

Sec. 756. Allocation and transfer of loan guarantee authority.

Sec. 757. Water systems for rural and Native villages in Alaska.

Sec. 758. Application requirements relating to water and waste disposal loan and

grant programs.

Sec. 759. National Sheep Industry Improvement Center.

Sec. 759A. Cooperative agreements.

Sec. 759B. Eligibility for grants to broadcasting systems.

CHAPTER 2—RURAL COMMUNITY ADVANCEMENT PROGRAM

Sec. 761. Rural community advancement program.

Sec. 762. Simplified, uniform application for assistance from all Federal rural development programs.

Sec. 763. Community facilities grant program.

Subtitle C—Amendments to the Rural Electrification Act of 1936

Sec. 771. Purposes; investigations and reports.

Sec. 772. Authorization of appropriations.

Sec. 773. Loans for electrical plants and transmission lines.

Sec. 774. Loans for electrical and plumbing equipment.

Sec. 775. Testimony on budget requests.

Sec. 776. Transfer of functions of administration created by Executive order.

Sec. 777. Annual report.

Sec. 778. Prohibition on restricting water and waste facility services to electric customers.

Sec. 779. Telephone loan terms and conditions.

Sec. 780. Privatization program.

Sec. 781. Rural Business Incubator Fund.

Subtitle D—Miscellaneous Rural Development Provisions

Sec. 791. Interest rate formula.

Sec. 792. Grants for financially stressed farmers, dislocated farmers, and rural

families.

Sec. 793. Fund for Rural America.

Sec. 794. Under Secretary of Agriculture for Rural Economic and Community Development renamed the Under Secretary of Agriculture for Rural Development.

TITLE VIII—RESEARCH, EXTENSION, AND EDUCATION

Subtitle A—Modification and Extension of Activities Under 1977 Act

Sec. 801. Purposes of agricultural research, extension, and education.

Sec. 802. National Agricultural Research, Extension, Education, and Economics Advisory Board.

Sec. 803. Federal Advisory Committee Act exemption for Federal-State cooperative

programs.

Sec. 804. Coordination and planning of agricultural research, extension, and education.

Sec. 805. Grants and fellowships for food and agricultural sciences education.

Sec. 806. Grants for research on the production and marketing of alcohols and industrial hydrocarbons from agricultural commodities and forest products.

Sec. 807. Policy research centers.

Sec. 808. Human nutrition intervention and health promotion research program.

Sec. 809. Food and nutrition education program.

Sec. 810. Purposes and findings relating to animal health and disease research.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 895

Sec. 811. Animal health and disease continuing research.

Sec. 812. Animal health and disease national or regional research.

Sec. 813. Grant program to upgrade agricultural and food sciences facilities at 1890

land-grant colleges.

Sec. 814. National research and training centennial centers.

Sec. 815. Programs for Hispanic-serving institutions.

Sec. 816. International agricultural research and extension.

Sec. 817. Authorization of appropriations for agricultural research programs.

Sec. 818. Authorization of appropriations for extension education.

Sec. 819. Supplemental and alternative crops research.

Sec. 820. Aquaculture assistance programs.

Sec. 821. Authorization of appropriations for rangeland research.

Subtitle B—Modification and Extension of Activities Under 1990 Act

Sec. 831. Water quality research, education, and coordination.

Sec. 832. National genetics resources program.

Sec. 833. National agricultural weather information system.

Sec. 834. Livestock product safety and inspection program.

Sec. 835. Plant genome mapping program.

Sec. 836. Certain specialized research programs.

Sec. 837. Agricultural telecommunications program.

Sec. 838. National centers for agricultural product quality research.

Sec. 839. Red meat safety research center.

Sec. 840. Indian reservation extension agent program.

Sec. 841. Assistive technology program for farmers with disabilities.

Sec. 842. National rural information center clearinghouse.

Sec. 843. Global climate change.

Subtitle C—Repeal of Certain Activities and Authorities

Sec. 851. Subcommittee on Food, Agricultural, and Forestry Research.

Sec. 852. Joint Council on Food and Agricultural Sciences.

Sec. 853. Agricultural Science and Technology Review Board.

Sec. 854. Animal Health Science Research Advisory Board.

Sec. 855. Resident instruction program at 1890 land-grant colleges.

Sec. 856. Grants to States for international trade development centers.

Sec. 857. Rangeland research.

Sec. 858. Composting research and extension program.

Sec. 859. Education program regarding handling of agricultural chemicals and agricultural chemical containers.

Sec. 860. Program administration regarding sustainable agriculture research and

education.

Sec. 861. Research regarding production, preparation, processing, handling, and

storage of agricultural products.

Sec. 862. Plant and animal pest and disease control program.

Sec. 863. Certain specialized research programs.

Sec. 864. Commission on agricultural research facilities.

Sec. 865. Special grant to study constraints on agricultural trade.

Sec. 866. Pilot project to coordinate food and nutrition education programs.

Sec. 867. Demonstration areas for rural economic development.

Sec. 868. Technical advisory committee regarding global climate change.

Sec. 869. Committee of nine under Hatch Act of 1887.

Sec. 870. Cotton crop reports.

Sec. 871. Rural economic and business development and additional research grants

under title V of Rural Development Act of 1972.

Sec. 872. Human nutrition research.

Sec. 873. Grants to upgrade 1890 land-grant college extension facilities.

Sec. 874. Indian subsistence farming demonstration grant program.

Subtitle D—Miscellaneous Research Provisions

Sec. 881. Critical agricultural materials research.

Sec. 882. Memorandum of agreement regarding 1994 Institutions.

Sec. 883. Smith-Lever Act funding for 1890 land-grant colleges, including Tuskegee

University.

Sec. 884. Agricultural research facilities.

Sec. 885. National competitive research initiative.

Sec. 886. Rural development research and education.

Sec. 887. Dairy goat research program.

Sec. 888. Competitive grants for research to eradicate and control brown citrus

aphid and citrus tristeza virus.

Sec. 889. Stuttgart National Aquaculture Research Center.

Sec. 890. Expansion of authorities related to National Arboretum.
110 STAT. 896 PUBLIC LAW 104–127—APR. 4, 1996

Sec. 891. Transfer of aquacultural research center.

Sec. 892. Use of remote sensing data and other data to anticipate potential food,

feed, and fiber shortages or excesses and to provide timely information

to assist farmers with planting decisions. Sec. 893. Sense of Senate regarding methyl bromide alternative research and extension activities.

Subtitle E—Research Authority After Fiscal Year 1997

Sec. 897. Authorization of appropriations.

Sec. 898. Activities subject to availability of appropriations.

TITLE IX—MISCELLANEOUS

Subtitle A—Commercial Transportation of Equine for Slaughter

Sec. 901. Findings.

Sec. 902. Definitions.

Sec. 903. Regulation of commercial transportation of equine for slaughter.

Sec. 904. Limitation of authority to equine for slaughter.

Sec. 905. Effective date.

Subtitle B—General Provisions

Sec. 911. Interstate quarantine.

Sec. 912. Cotton classification services.

Sec. 913. Plant variety protection for certain tuber propagated plant varieties.

Sec. 914. Swine health protection.

Sec. 915. Designation of Mount Pleasant National Scenic Area.

Sec. 916. Pseudorabies eradication program.

Sec. 917. Collection and use of agricultural quarantine and inspection fees.

Sec. 918. Meat and poultry inspection.

Sec. 919. Reimbursable agreements.

Sec. 920. Overseas tort claims.

Sec. 921. Operation of Graduate School of Department of Agriculture as

nonappropriated fund instrumentality. Sec. 922. Student internship programs.

Sec. 923. Conveyance of excess Federal personal property.

Sec. 924. Conveyance of land to White Oak Cemetery.

Sec. 925. Sale of land by the University of Arkansas.

Sec. 926. Designation of Dale Bumpers Small Farms Research Center.

Sec. 927. Department of Agriculture Washington Area Strategic Space Plan.

Sec. 928. Severability.

TITLE I—AGRICULTURAL MARKET

TRANSITION ACT

Subtitle A—Short Title, Purpose, and

Definitions

SEC. 101. SHORT TITLE AND PURPOSE.

(a) SHORT TITLE.—This title may be cited as the ‘‘Agricultural

Market Transition Act’’.

(b) PURPOSE.—It is the purpose of this title—

(1) to authorize the use of binding production flexibility

contracts between the United States and agricultural producers

to support farming certainty and flexibility while ensuring

continued compliance with farm conservation and wetland

protection requirements;

(2) to make nonrecourse marketing assistance loans and

loan deficiency payments available for certain crops;

(3) to improve the operation of farm programs for milk,

peanuts, and sugar; and

(4) to establish a commission to undertake a comprehensive

review of past and future production agriculture in the United

States.

7 USC 7201.

Agricultural

Market

Transition Act.

Contracts.

Loans.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 897

SEC. 102. DEFINITIONS.

In this title:

(1) AGRICULTURAL ACT OF 1949.—Except in section 171,

the term ‘‘Agricultural Act of 1949’’ means the Agricultural

Act of 1949 (7 U.S.C. 1421 et seq.), as in effect prior to the

suspensions under section 171(b)(1).

(2) CONSIDERED PLANTED.—The term ‘‘considered planted’’

means acreage that is considered planted under title V of

the Agricultural Act of 1949 (7 U.S.C. 1461 et seq.) and such

other acreage as the Secretary considers fair and equitable.

(3) CONTRACT.—The terms ‘‘contract’’ and ‘‘production flexibility contract’’ mean a production flexibility contract entered

into under section 111.

(4) CONTRACT ACREAGE.—The term ‘‘contract acreage’’

means 1 or more crop acreage bases established for contract

commodities under title V of the Agricultural Act of 1949 (7

U.S.C. 1461 et seq.) that would have been in effect for the

1996 crop (but for suspension under section 171(b)(1)).

(5) CONTRACT COMMODITY.—The term ‘‘contract commodity’’

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

and rice.

(6) CONTRACT PAYMENT.—The term ‘‘contract payment’’

means a payment made under this subtitle pursuant to a

contract.

(7) DEPARTMENT.—The term ‘‘Department’’ means the

Department of Agriculture.

(8) EXTRA LONG STAPLE COTTON.—The term ‘‘extra long

staple cotton’’ means cotton that—

(A) is produced from pure strain varieties of the

Barbadense species or any hybrid thereof, or other similar

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

for which United States upland cotton is not suitable and

grown in irrigated cotton-growing regions of the United

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

of the varieties or types; and

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

by the Secretary, ginned on another type gin for experimental purposes.

(9) FARM PROGRAM PAYMENT YIELD.—The term ‘‘farm program payment yield’’ means the farm program payment yield

established for the 1995 crop of a contract commodity under

section 505 of the Agricultural Act of 1949 (7 U.S.C. 1465).

The Secretary shall adjust the farm program payment yield

for the 1995 crop of a contract commodity to account for any

additional yield payments made with respect to that crop under

subsection (b)(2) of the section.

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

each contract commodity, extra long staple cotton, and oilseed.

(11) OILSEED.—The term ‘‘oilseed’’ means a crop of soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed,

mustard seed, or, if designated by the Secretary, other oilseeds.

(12) PRODUCER.—The term ‘‘producer’’ means an owner,

operator, landlord, tenant, or sharecropper who shares in the

risk of producing a crop and who is entitled to share in the

crop available for marketing from the farm, or would have

7 USC 7202.
110 STAT. 898 PUBLIC LAW 104–127—APR. 4, 1996

shared had the crop been produced. In determining whether

a grower of hybrid seed is a producer, the Secretary shall

not take into consideration the existence of a hybrid seed contract.

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

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

States of the United States, the District of Columbia, the

Commonwealth of Puerto Rico, and any other territory or

possession of the United States.

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

in a geographical sense, means all of the States.

Subtitle B—Production Flexibility

Contracts

SEC. 111. AUTHORIZATION FOR USE OF PRODUCTION FLEXIBILITY

CONTRACTS.

(a) OFFER AND TERMS.—The Secretary shall offer to enter into

a production flexibility contract with an eligible owner or producer

described in subsection (b) on a farm containing eligible cropland.

Under the terms of a contract, the owner or producer shall agree,

in exchange for annual contract payments, to—

(1) comply with applicable conservation requirements under

subtitle B of title XII of the Food Security Act of 1985 (16

U.S.C. 3811 et seq.);

(2) comply with applicable wetland protection requirements

under subtitle C of title XII of the Act (16 U.S.C. 3821 et

seq.);

(3) comply with the planting flexibility requirements of

section 118; and

(4) use the land subject to the contract for an agricultural

or related activity, but not for a nonagricultural commercial

or industrial use, as determined by the Secretary.

(b) ELIGIBLE OWNERS AND PRODUCERS DESCRIBED.—The following producers and owners shall be eligible to enter into a contract:

(1) An owner of eligible cropland who assumes all or a

part of the risk of producing a crop.

(2) A producer (other than an owner) on eligible cropland

with a share-rent lease of the eligible cropland, regardless

of the length of the lease, if the owner enters into the same

contract.

(3) A producer (other than an owner) on eligible cropland

who cash rents the eligible cropland under a lease expiring

on or after September 30, 2002, in which case the owner is

not required to enter into the contract.

(4) A producer (other than an owner) on eligible cropland

who cash rents the eligible cropland under a lease expiring

before September 30, 2002. The owner of the eligible cropland

may also enter into the same contract. If the producer elects

to enroll less than 100 percent of the eligible cropland in

the contract, the consent of the owner is required.

(5) An owner of eligible cropland who cash rents the eligible

cropland and the lease term expires before September 30, 2002,

if the tenant declines to enter into a contract. In the case

of an owner covered by this paragraph, contract payments

7 USC 7211.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 899

shall not begin under a contract until the lease held by the

tenant ends.

(6) An owner or producer described in any preceding paragraph regardless of whether the owner or producer purchased

catastrophic risk protection for a 1996 crop under section 508(b)

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

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

the interests of tenants and sharecroppers.

(d) ELIGIBLE CROPLAND DESCRIBED.—Land shall be considered

to be cropland eligible for coverage under a contract only if the

land has contract acreage attributable to the land and—

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

a portion of the land was enrolled in the acreage reduction

program authorized for a crop of a contract commodity under

section 101B, 103B, 105B, or 107B of the Agricultural Act

of 1949 or was considered planted;

(2) was subject to a conservation reserve contract under

section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831)

whose term expired, or was voluntarily terminated, on or after

January 1, 1995; or

(3) is released from coverage under a conservation reserve

contract by the Secretary during the period beginning on January 1, 1995, and ending on the date specified in section

112(a)(2).

(e) QUANTITY OF ELIGIBLE CROPLAND COVERED BY CONTRACT.—

Subject to subsection (b)(4), an owner or producer may enroll as

contract acreage all or a portion of the eligible cropland on the

farm.

(f) VOLUNTARY REDUCTION IN CONTRACT ACREAGE.—Subject to

subsection (b)(4), an owner or producer who enters into a contract

may subsequently reduce the quantity of contract acreage covered

by the contract.

SEC. 112. ELEMENTS OF CONTRACTS.

(a) TIME FOR CONTRACTING.—

(1) COMMENCEMENT.—To the extent practicable, the Secretary shall commence entering into contracts not later than

45 days after the date of enactment of this title.

(2) DEADLINE.—Except as provided in paragraph (3), the

Secretary may not enter into a contract after August 1, 1996.

(3) CONSERVATION RESERVE LANDS.—

(A) IN GENERAL.—At the beginning of each fiscal year,

the Secretary shall allow an eligible owner or producer

on a farm covered by a conservation reserve contract

entered into under section 1231 of the Food Security Act

of 1985 (16 U.S.C. 3831) that terminates after the date

specified in paragraph (2) to enter into or expand a production flexibility contract to cover the contract acreage of

the farm that was subject to the former conservation

reserve contract.

(B) AMOUNT.—Contract payments made for contract

acreage under this paragraph shall be made at the rate

and amount applicable to the annual contract payment

level for the applicable crop. For the fiscal year in which

the conservation reserve contract is terminated, the owner

or producer subject to the production flexibility contract

7 USC 7212.
110 STAT. 900 PUBLIC LAW 104–127—APR. 4, 1996

may elect to receive either contract payments or a prorated

payment under the conservation reserve contract, but not

both.

(b) DURATION OF CONTRACT.—

(1) BEGINNING DATE.—The term of a contract shall begin

with—

(A) the 1996 crop of a contract commodity; or

(B) in the case of acreage that was subject to a conservation reserve contract described in subsection (a)(3),

the date the production flexibility contract was entered

into or expanded to cover the acreage.

(2) ENDING DATE.—The term of a contract shall extend

through the 2002 crop, unless earlier terminated by the owner

or producer.

(c) ESTIMATION OF CONTRACT PAYMENTS.—At the time the Secretary enters into a contract, the Secretary shall provide an estimate

of the minimum contract payments anticipated to be made during

at least the first fiscal year for which contract payments will be

made.

(d) TIME FOR PAYMENT.—

(1) IN GENERAL.—An annual contract payment shall be

made not later than September 30 of each of fiscal years 1996

through 2002.

(2) ADVANCE PAYMENTS.—

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

or producer, 50 percent of the contract payment for fiscal

year 1996 shall be made not later than 30 days after

the date on which the contract is entered into and approved

by the Secretary and the owner or producer.

(B) SUBSEQUENT FISCAL YEARS.—At the option of the

owner or producer for fiscal year 1997 and each subsequent

fiscal year, 50 percent of the annual contract payment

shall be made on December 15 or January 15 of the fiscal

year. The owner or producer may change the date selected

under this subparagraph for a subsequent fiscal year by

providing advance notice to the Secretary.

SEC. 113. AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS.

(a) FISCAL YEAR AMOUNTS.—The Secretary shall, to the maximum extent practicable, expend the following amounts to satisfy

the obligations of the Secretary under all contracts:

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

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

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

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

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

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

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

(b) ALLOCATION.—The amount made available for a fiscal year

under subsection (a) shall be allocated as follows:

(1) For wheat, 26.26 percent.

(2) For corn, 46.22 percent.

(3) For grain sorghum, 5.11 percent.

(4) For barley, 2.16 percent.

(5) For oats, 0.15 percent.

(6) For upland cotton, 11.63 percent.

(7) For rice, 8.47 percent.

7 USC 7213.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 901

(c) ADJUSTMENT.—The Secretary shall adjust the amounts allocated for each contract commodity under subsection (b) for a particular fiscal year by—

(1) adding an amount equal to the sum of all repayments

of deficiency payments required under section 114(a)(2) of the

Agricultural Act of 1949 (7 U.S.C. 1445j(a)(2)) for the commodity;

(2) adding an amount equal to the sum of all refunds

of contract payments received during the preceding fiscal year

under section 116 for the commodity; and

(3) subtracting an amount equal to the amount, if any,

necessary during that fiscal year to satisfy payment requirements for the commodity under sections 103B, 105B, or 107B

of the Agricultural Act of 1949 for the 1994 and 1995 crop

years.

(d) ADDITIONAL RICE ALLOCATION.—In addition to the adjustments required under subsection (c), the amount allocated under

subsection (b) for rice contract payments shall be increased by

$8,500,000 for each of fiscal years 1997 through 2002.

(e) EXCLUSION OF CERTAIN AMOUNTS FROM CONTRACT PAYMENTS.—Any amount added pursuant to paragraphs (1) and (2)

of subsection (c) to the amount available under subsection (a) for

a fiscal year and paid to owners and producers under a contract

shall not be treated as a contract payment for purposes of section

115(a) of this title or section 1001(1) of the Food Security Act

of 1985 (7 U.S.C. 1308(1)). However, the amount of a payment

covered by this subsection may not exceed $50,000 per person.

(f) EFFECT OF PAYMENT LIMITATION.—The amount available

under subsection (a) for a fiscal year shall be reduced by an amount

equal to the total amount of contract payments for the fiscal year

that owners and producers forgo as a result of operation of the

payment limitation under section 1001(1) of the Food Security Act

of 1985 (7 U.S.C. 1308(1)).

SEC. 114. DETERMINATION OF CONTRACT PAYMENTS UNDER CONTRACTS.

(a) INDIVIDUAL PAYMENT QUANTITY OF CONTRACT COMMODITIES.—For each contract, the payment quantity of a contract

commodity for each fiscal year shall be equal to the product of—

(1) 85 percent of the contract acreage; and

(2) the farm program payment yield.

(b) ANNUAL PAYMENT QUANTITY OF CONTRACT COMMODITIES.—

The payment quantity of each contract commodity covered by all

contracts for each fiscal year shall be equal to the sum of the

amounts calculated under subsection (a) for each individual contract.

(c) ANNUAL PAYMENT RATE.—The payment rate for a contract

commodity for each fiscal year shall be equal to—

(1) the amount made available under section 113 for the

contract commodity for the fiscal year; divided by

(2) the amount determined under subsection (b) for the

fiscal year.

(d) ANNUAL PAYMENT AMOUNT.—The amount to be paid under

a contract in effect for each fiscal year with respect to all contract

commodities covered by the contract shall be equal to the sum

of the products of—

7 USC 7214.
110 STAT. 902 PUBLIC LAW 104–127—APR. 4, 1996

(1) the payment quantity determined under subsection (a)

for each of the contract commodities covered by the contract;

and

(2) the corresponding payment rate for the contract

commodity in effect under subsection (c).

(e) REDUCTION IN PAYMENT AMOUNT.—The contract payment

determined under subsection (d) for an owner or producer for a

fiscal year shall be immediately reduced by the amount of any

repayment of deficiency payments that is required under section

114(a)(2) of the Agricultural Act of 1949 (7 U.S.C. 1445j(a)(2))

and is not repaid as of the date the contract payment is determined.

The Secretary shall be required to collect the required repayment,

or any claim based on the required repayment, as soon as the

contract payment is determined.

(f) ASSIGNMENT OF CONTRACT PAYMENTS.—The provisions of

section 8(g) of the Soil Conservation and Domestic Allotment Act

(16 U.S.C. 590h(g)) (relating to assignment of payments) shall apply

to contract payments under this section. The owner or producer

making the assignment, or the assignee, shall provide the Secretary

with notice, in such manner as the Secretary may require in the

contract, of any assignment made under this subsection.

(g) SHARING OF CONTRACT PAYMENTS.—The Secretary shall provide for the sharing of contract payments among the owners and

producers subject to the contract on a fair and equitable basis.

SEC. 115. PAYMENT LIMITATIONS.

(a) APPLICABILITY OF PAYMENT LIMITATIONS.—Sections 1001

through 1001C of the Food Security Act of 1985 (7 U.S.C. 1308

through 1308–3), as amended by this section, shall be applicable

to contract payments made under this subtitle.

(b) PAYMENT LIMITATIONS.—Section 1001 of the Food Security

Act of 1985 (7 U.S.C. 1308) is amended by striking paragraphs

(1) through (4) and inserting the following:

‘‘(1) LIMITATION ON PAYMENTS UNDER PRODUCTION FLEXIBILITY CONTRACTS.—The total amount of contract payments made

under the Agricultural Market Transition Act to a person under

1 or more production flexibility contracts during any fiscal

year may not exceed $40,000.

‘‘(2) LIMITATION ON MARKETING LOAN GAINS AND LOAN DEFICIENCY PAYMENTS.—The total amount of the payments specified

in paragraph (3) that a person shall be entitled to receive

under the Agricultural Market Transition Act for 1 or more

contract commodities and oilseeds during any crop year may

not exceed $75,000.

‘‘(3) DESCRIPTION OF PAYMENTS SUBJECT TO LIMITATION.—

The payments referred to in paragraph (2) are the following:

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

a marketing assistance loan under section 131 of the Agricultural Market Transition Act for a crop of any loan

commodity at a lower level than the original loan rate

established for the loan commodity under section 132 of

the Act.

‘‘(B) Any loan deficiency payment received for a loan

commodity under section 135 of the Act.

‘‘(4) DEFINITIONS.—In this title, the terms ‘contract

commodity’, ‘contract payment’, ‘loan commodity’, ‘oilseed’, and

‘production flexibility contract’ have the meaning given those

7 USC 7215.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 903

terms in section 102 of the Agricultural Market Transition

Act.’’.

(c) CONFORMING AMENDMENTS.—

(1) Section 1001A of the Food Security Act of 1985 (7

U.S.C. 1308–1) is amended—

(A) in subsection (a)(1), by striking ‘‘under the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.)’’; and

(B) in subsection (b)(1), by striking ‘‘under the Agricultural Act of 1949’’.

(2) Section 1001C(a) of the Act (7 U.S.C. 1308–3(a)) is

amended—

(A) by striking ‘‘For each of the 1991 through 1997

crops, any’’ and inserting ‘‘Any’’;

(B) by striking ‘‘production adjustment payments, price

support program loans, payments, or benefits made available under the Agricultural Act of 1949 (7 U.S.C. 1421

et seq.),’’ and inserting ‘‘loans or payments made available

under the Agricultural Market Transition Act,’’; and

(C) by striking ‘‘during the 1989 through 1997 crop

years’’.

SEC. 116. VIOLATIONS OF CONTRACT.

(a) TERMINATION OF CONTRACT FOR VIOLATION.—Except as provided in subsection (b), if an owner or producer subject to a contract

violates a requirement of the contract specified in section 111(a),

the Secretary shall terminate the contract with respect to the

owner or producer on each farm in which the owner or producer

has an interest. On the termination, the owner or producer shall

forfeit all rights to receive future contract payments on each farm

in which the owner or producer has an interest and shall refund

to the Secretary all contract payments received by the owner or

producer during the period of the violation, together with interest

on the contract payments as determined by the Secretary.

(b) REFUND OR ADJUSTMENT.—If the Secretary determines that

a violation does not warrant termination of the contract under

subsection (a), the Secretary may require the owner or producer

subject to the contract—

(1) to refund to the Secretary that part of the contract

payments received by the owner or producer during the period

of the violation, together with interest on the contract payments

as determined by the Secretary; or

(2) to accept a reduction in the amount of future contract

payments that is proportionate to the severity of the violation,

as determined by the Secretary.

(c) FORECLOSURE.—

(1) EFFECT OF FORECLOSURE.—An owner or producer subject to a contract may not be required to make repayments

to the Secretary of amounts received under the contract if

the contract acreage has been foreclosed on and the Secretary

determines that forgiving the repayments is appropriate to

provide fair and equitable treatment.

(2) RESUMPTION OF OPERATION.—This subsection shall not

void the responsibilities of the owner or producer under the

contract if the owner or producer continues or resumes operation, or control, of the contract acreage. On the resumption

of operation or control over the contract acreage by the owner

7 USC 7216.
110 STAT. 904 PUBLIC LAW 104–127—APR. 4, 1996

or producer, the provisions of the contract in effect on the

date of the foreclosure shall apply.

(d) REVIEW.—A determination of the Secretary under this section shall be considered to be an adverse decision for purposes

of the availability of administrative review of the determination.

SEC. 117. TRANSFER OR CHANGE OF INTEREST IN LANDS SUBJECT

TO CONTRACT.

(a) TERMINATION.—Except as provided in subsection (c), a transfer of (or change in) the interest of an owner or producer subject

to a contract in the contract acreage covered by the contract shall

result in the termination of the contract with respect to the acreage,

unless the transferee or owner of the acreage agrees to assume

all obligations under the contract. The termination shall be effective

on the date of the transfer or change.

(b) MODIFICATION.—At the request of the transferee or owner,

the Secretary may modify the contract if the modifications are

consistent with the objectives of this subtitle, as determined by

the Secretary.

(c) EXCEPTION.—If an owner or producer who is entitled to

a contract payment dies, becomes incompetent, or is otherwise

unable to receive the contract payment, the Secretary shall make

the payment, in accordance with regulations prescribed by the

Secretary.

SEC. 118. PLANTING FLEXIBILITY.

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

(b) LIMITATIONS AND EXCEPTIONS REGARDING FRUITS AND

VEGETABLES.—

(1) LIMITATIONS.—The planting of fruits and vegetables

(other than lentils, mung beans, and dry peas) shall be prohibited on contract acreage.

(2) EXCEPTIONS.—Paragraph (1) shall not limit the planting

of a fruit or vegetable—

(A) in any region in which there is a history of doublecropping of contract commodities with fruits or vegetables,

as determined by the Secretary, in which case the doublecropping shall be permitted;

(B) on a farm that the Secretary determines has a

history of planting fruits or vegetables on contract acreage,

except that a contract payment shall be reduced by an

acre for each acre planted to the fruit or vegetable; or

(C) by a producer who the Secretary determines has

an established planting history of a specific fruit or vegetable, except that—

(i) the quantity planted may not exceed the producer’s average annual planting history of the fruit or

vegetable in the 1991 through 1995 crop years (excluding any crop year in which no plantings were made),

as determined by the Secretary; and

(ii) a contract payment shall be reduced by an

acre for each acre planted to the fruit or vegetable.

7 USC 7218.

7 USC 7217.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 905

Subtitle C—Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments

SEC. 131. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE

LOANS.

(a) NONRECOURSE LOANS AVAILABLE.—For each of the 1996

through 2002 crops of each loan commodity, the Secretary shall

make available to producers on a farm nonrecourse marketing

assistance loans for loan commodities produced on the farm. The

loans shall be made under terms and conditions that are prescribed

by the Secretary and at the loan rate established under section

132 for the loan commodity.

(b) ELIGIBLE PRODUCTION.—The following production shall be

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

(1) In the case of a marketing assistance loan for a contract

commodity, any production by a producer on a farm containing

eligible cropland covered by a production flexibility contract.

(2) In the case of a marketing assistance loan for extra

long staple cotton and oilseeds, any production.

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

loan under subsection (a), the producer shall comply with applicable

conservation requirements under subtitle B of title XII of the Food

Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland

protection requirements under subtitle C of title XII of the Act

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

(d) ADDITIONAL OUTLAYS PROHIBITED.—The Secretary shall

carry out this subtitle in such a manner that there are no additional

outlays under this subtitle as a result of the reconstitution of

a farm that occurs as a result of the combination of another farm

that does not contain eligible cropland covered by a production

flexibility contract.

SEC. 132. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

(a) WHEAT.—

(1) LOAN RATE.—Subject to paragraph (2), the loan rate

for a marketing assistance loan under section 131 for wheat

shall be—

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

price received by producers of wheat, as determined by

the Secretary, during the marketing years for the immediately preceding 5 crops of wheat, excluding the year

in which the average price was the highest and the year

in which the average price was the lowest in the period;

but

(B) not more than $2.58 per bushel.

(2) STOCKS TO USE RATIO ADJUSTMENT.—If the Secretary

estimates for any marketing year that the ratio of ending

stocks of wheat to total use for the marketing year will be—

(A) equal to or greater than 30 percent, the Secretary

may reduce the loan rate for wheat for the corresponding

crop by an amount not to exceed 10 percent in any year;

(B) less than 30 percent but not less than 15 percent,

the Secretary may reduce the loan rate for wheat for the

7 USC 7232.

7 USC 7231.
110 STAT. 906 PUBLIC LAW 104–127—APR. 4, 1996

corresponding crop by an amount not to exceed 5 percent

in any year; or

(C) less than 15 percent, the Secretary may not reduce

the loan rate for wheat for the corresponding crop.

(b) FEED GRAINS.—

(1) LOAN RATE FOR CORN.—Subject to paragraph (2), the

loan rate for a marketing assistance loan under section 131

for corn shall be—

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

price received by producers of corn, as determined by the

Secretary, during the marketing years for the immediately

preceding 5 crops of corn, excluding the year in which

the average price was the highest and the year in which

the average price was the lowest in the period; but

(B) not more than $1.89 per bushel.

(2) STOCKS TO USE RATIO ADJUSTMENT.—If the Secretary

estimates for any marketing year that the ratio of ending

stocks of corn to total use for the marketing year will be—

(A) equal to or greater than 25 percent, the Secretary

may reduce the loan rate for corn for the corresponding

crop by an amount not to exceed 10 percent in any year;

(B) less than 25 percent but not less than 12.5 percent,

the Secretary may reduce the loan rate for corn for the

corresponding crop by an amount not to exceed 5 percent

in any year; or

(C) less than 12.5 percent, the Secretary may not

reduce the loan rate for corn for the corresponding crop.

(3) OTHER FEED GRAINS.—The loan rate for a marketing

assistance loan under section 131 for grain sorghum, barley,

and oats, respectively, shall be established at such level as

the Secretary determines is fair and reasonable in relation

to the rate that loans are made available for corn, taking

into consideration the feeding value of the commodity in relation to corn.

(c) UPLAND COTTON.—

(1) LOAN RATE.—Subject to paragraph (2), the loan rate

for a marketing assistance loan under section 131 for upland

cotton shall be established by the Secretary at such loan rate,

per pound, as will reflect for the base quality of upland cotton,

as determined by the Secretary, at average locations in the

United States a rate that is not less than the smaller of—

(A) 85 percent of the average price (weighted by market

and month) of the base quality of cotton as quoted in

the designated United States spot markets during 3 years

of the 5-year period ending July 31 of the year preceding

the year in which the crop is planted, excluding the year

in which the average price was the highest and the year

in which the average price was the lowest in the period;

or

(B) 90 percent of the average, for the 15-week period

beginning July 1 of the year preceding the year in which

the crop is planted, of the 5 lowest-priced growths of the

growths quoted for Middling 13⁄32-inch cotton C.I.F. Northern Europe (adjusted downward by the average difference

during the period April 15 through October 15 of the year

preceding the year in which the crop is planted between

the average Northern European price quotation of such
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 907

quality of cotton and the market quotations in the designated United States spot markets for the base quality

of upland cotton), as determined by the Secretary.

(2) LIMITATIONS.—The loan rate for a marketing assistance

loan for upland cotton shall not be less than $0.50 per pound

or more than $0.5192 per pound.

(d) EXTRA LONG STAPLE COTTON.—The loan rate for a marketing assistance loan under section 131 for extra long staple cotton

shall be—

(1) not less than 85 percent of the simple average price

received by producers of extra long staple cotton, as determined

by the Secretary, during 3 years of the 5-year period ending

July 31 of the year preceding the year in which the crop

is planted, excluding the year in which the average price was

the highest and the year in which the average price was the

lowest in the period; but

(2) not more than $0.7965 per pound.

(e) RICE.—The loan rate for a marketing assistance loan under

section 131 for rice shall be $6.50 per hundredweight.

(f) OILSEEDS.—

(1) SOYBEANS.—The loan rate for a marketing assistance

loan under section 131 for soybeans shall be—

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

price received by producers of soybeans, as determined

by the Secretary, during the marketing years for the immediately preceding 5 crops of soybeans, excluding the year

in which the average price was the highest and the year

in which the average price was the lowest in the period;

but

(B) not less than $4.92 or more than $5.26 per bushel.

(2) SUNFLOWER SEED, CANOLA, RAPESEED, SAFFLOWER, MUSTARD SEED, AND FLAXSEED.—The loan rate for a marketing

assistance loan under section 131 for sunflower seed, canola,

rapeseed, safflower, mustard seed, and flaxseed, individually,

shall be—

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

price received by producers of sunflower seed, individually,

as determined by the Secretary, during the marketing years

for the immediately preceding 5 crops of sunflower seed,

individually, excluding the year in which the average price

was the highest and the year in which the average price

was the lowest in the period; but

(B) not less than $0.087 or more than $0.093 per

pound.

(3) OTHER OILSEEDS.—The loan rates for a marketing

assistance loan under section 131 for other oilseeds shall be

established at such level as the Secretary determines is fair

and reasonable in relation to the loan rate available for soybeans, except in no event shall the rate for the oilseeds (other

than cottonseed) be less than the rate established for soybeans

on a per-pound basis for the same crop.

SEC. 133. TERM OF LOANS.

(a) TERM OF LOAN.—In the case of each loan commodity (other

than upland cotton or extra long staple cotton), a marketing assistance loan under section 131 shall have a term of 9 months beginning

7 USC 7233.
110 STAT. 908 PUBLIC LAW 104–127—APR. 4, 1996

on the first day of the first month after the month in which

the loan is made.

(b) SPECIAL RULE FOR COTTON.—A marketing assistance loan

for upland cotton or extra long staple cotton shall have a term

of 10 months beginning on the first day of the month in which

the loan is made.

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

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

SEC. 134. REPAYMENT OF LOANS.

(a) REPAYMENT RATES FOR WHEAT, FEED GRAINS, AND OILSEEDS.—The Secretary shall permit a producer to repay a marketing

assistance loan under section 131 for wheat, corn, grain sorghum,

barley, oats, and oilseeds at a rate that is the lesser of—

(1) the loan rate established for the commodity under section 132, plus interest (as determined by the Secretary); or

(2) a rate that the Secretary determines will—

(A) minimize potential loan forfeitures;

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

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

(D) allow the commodity produced in the United States

to be marketed freely and competitively, both domestically

and internationally.

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

Secretary shall permit producers to repay a marketing assistance

loan under section 131 for upland cotton and rice at a rate that

is the lesser of—

(1) the loan rate established for the commodity under section 132, plus interest (as determined by the Secretary); or

(2) the prevailing world market price for the commodity

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

by the Secretary.

(c) REPAYMENT RATES FOR EXTRA LONG STAPLE COTTON.—

Repayment of a marketing assistance loan for extra long staple

cotton shall be at the loan rate established for the commodity

under section 132, plus interest (as determined by the Secretary).

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

section and section 136, the Secretary shall prescribe by regulation—

(1) a formula to determine the prevailing world market

price for each loan commodity, adjusted to United States quality

and location; and

(2) a mechanism by which the Secretary shall announce

periodically the prevailing world market price for each loan

commodity.

(e) ADJUSTMENT OF PREVAILING WORLD MARKET PRICE FOR

UPLAND COTTON.—

(1) IN GENERAL.—During the period ending July 31, 2003,

the prevailing world market price for upland cotton (adjusted

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

(A) the adjusted prevailing world market price is less

than 115 percent of the loan rate for upland cotton established under section 132, as determined by the Secretary;

and

Regulations.

7 USC 7234.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 909

(B) the Friday through Thursday average price

quotation for the lowest-priced United States growth as

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

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

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

as the ‘‘Northern Europe price’’).

(2) FURTHER ADJUSTMENT.—Except as provided in paragraph (3), the adjusted prevailing world market price for upland

cotton shall be further adjusted on the basis of some or all

of the following data, as available:

(A) The United States share of world exports.

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

export shipments.

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

price for upland cotton (adjusted to United States quality

and location).

(3) LIMITATION ON FURTHER ADJUSTMENT.—The adjustment

under paragraph (2) may not exceed the difference between—

(A) the Friday through Thursday average price for

the lowest-priced United States growth as quoted for Middling 13⁄32-inch cotton delivered C.I.F. Northern Europe;

and

(B) the Northern Europe price.

SEC. 135. LOAN DEFICIENCY PAYMENTS.

(a) AVAILABILITY OF LOAN DEFICIENCY PAYMENTS.—Except as

provided in subsection (d), the Secretary may make loan deficiency

payments available to producers who, although eligible to obtain

a marketing assistance loan under section 131 with respect to

a loan commodity, agree to forgo obtaining the loan for the commodity in return for payments under this section.

(b) COMPUTATION.—A loan deficiency payment under this section shall be computed by multiplying—

(1) the loan payment rate determined under subsection

(c) for the loan commodity; by

(2) the quantity of the loan commodity that the producers

on a farm are eligible to place under loan but for which the

producers forgo obtaining the loan in return for payments under

this section.

(c) LOAN PAYMENT RATE.—For purposes of this section, the

loan payment rate shall be the amount by which—

(1) the loan rate established under section 132 for the

loan commodity; exceeds

(2) the rate at which a loan for the commodity may be

repaid under section 134.

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

shall not apply with respect to extra long staple cotton.

SEC. 136. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON.

(a) COTTON USER MARKETING CERTIFICATES.— (1) ISSUANCE.—Subject to paragraph (4), during the period

ending July 31, 2003, the Secretary shall issue marketing certificates or cash payments to domestic users and exporters

for documented purchases by domestic users and sales for

7 USC 7236.

7 USC 7235.
110 STAT. 910 PUBLIC LAW 104–127—APR. 4, 1996

export by exporters made in the week following a consecutive

4-week period in which—

(A) the Friday through Thursday average price

quotation for the lowest-priced United States growth, as

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

Northern Europe exceeds the Northern Europe price by

more than 1.25 cents per pound; and

(B) the prevailing world market price for upland cotton

(adjusted to United States quality and location) does not

exceed 130 percent of the loan rate for upland cotton established under section 132.

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

the marketing certificates or cash payments shall be based

on the amount of the difference (reduced by 1.25 cents per

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

4-week period multiplied by the quantity of upland cotton

included in the documented sales.

(3) ADMINISTRATION OF MARKETING CERTIFICATES.—

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

certificates for cash or marketing or exchange of the certificates for agricultural commodities owned by the Commodity

Credit Corporation in such manner, and at such price

levels, as the Secretary determines will best effectuate

the purposes of cotton user marketing certificates. Any

price restrictions that would otherwise apply to the disposition of agricultural commodities by the Commodity Credit

Corporation shall not apply to the redemption of certificates

under this subsection.

(B) DESIGNATION OF COMMODITIES AND PRODUCTS.—

To the extent practicable, the Secretary shall permit owners

of certificates to designate the commodities and products,

including storage sites, the owners would prefer to receive

in exchange for certificates. If any certificate is not presented for redemption, marketing, or exchange within a

reasonable number of days after the issuance of the certificate (as determined by the Secretary), reasonable costs

of storage and other carrying charges, as determined by

the Secretary, shall be deducted from the value of the

certificate for the period beginning after the reasonable

number of days and ending with the date of the presentation of the certificate to the Commodity Credit Corporation.

(C) TRANSFERS.—Marketing certificates issued to

domestic users and exporters of upland cotton may be

transferred to other persons in accordance with regulations

issued by the Secretary.

(4) EXCEPTION.—The Secretary shall not issue marketing

certificates or cash payments under paragraph (1) if, for the

immediately preceding consecutive 10-week period, the Friday

through Thursday average price quotation for the lowest priced

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

cotton, delivered C.I.F. Northern Europe, adjusted for the value

of any certificate issued under this subsection, exceeds the

Northern Europe price by more than 1.25 cents per pound.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 911

(5) LIMITATION ON EXPENDITURES.—Total expenditures under this subsection shall not exceed $701,000,000 during

fiscal years 1996 through 2002.

(b) SPECIAL IMPORT QUOTA.—

(1) ESTABLISHMENT.—The President shall carry out an

import quota program that provides that, during the period

ending July 31, 2003, whenever the Secretary determines and

announces that for any consecutive 10-week period, the Friday

through Thursday average price quotation for the lowest-priced

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

cotton, delivered C.I.F. Northern Europe, adjusted for the value

of any certificates issued under subsection (a), exceeds the

Northern Europe price by more than 1.25 cents per pound,

there shall immediately be in effect a special import quota.

(2) QUANTITY.—The quota shall be equal to 1 week’s

consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for

which data are available.

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

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

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

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

that overlaps any existing quota period if required by paragraph

(1), except that a special quota period may not be established

under this subsection if a quota period has been established

under subsection (c).

(5) PREFERENTIAL TARIFF TREATMENT.—The quantity under

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

quantity for purposes of—

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

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

(B) section 204 of the Andean Trade Preference Act

(19 U.S.C. 3203);

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

2463(d)); and

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

Schedule.

(6) DEFINITION.—In this subsection, the term ‘‘special

import quota’’ means a quantity of imports that is not subject

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

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

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

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

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

the average price of such quality of cotton in the markets

for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a limited

global import quota subject to the following conditions:

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

equal to 21 days of domestic mill consumption of upland

cotton at the seasonally adjusted average rate of the most

recent 3 months for which data are available.

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

established under this subsection during the preceding 12

President.

President.
110 STAT. 912 PUBLIC LAW 104–127—APR. 4, 1996

months, the quantity of the quota next established under

this subsection shall be the smaller of 21 days of domestic

mill consumption calculated under subparagraph (A) or

the quantity required to increase the supply to 130 percent

of the demand.

(C) PREFERENTIAL TARIFF TREATMENT.—The quantity

under a limited global import quota shall be considered

to be an in-quota quantity for purposes of—

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

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

(ii) section 204 of the Andean Trade Preference

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

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

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

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

Schedule.

(D) DEFINITIONS.—In this subsection:

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

latest official data of the Bureau of the Census, the

Department of Agriculture, and the Department of the

Treasury—

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

bales) in which the quota is established;

(II) production of the current crop; and

(III) imports to the latest date available during

the marketing year.

(ii) DEMAND.—The term ‘‘demand’’ means—

(I) the average seasonally adjusted annual rate

of domestic mill consumption during the most

recent 3 months for which data are available; and

(II) the larger of—

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

(bb) cumulative exports of upland cotton

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

(iii) LIMITED GLOBAL IMPORT QUOTA.—The term

‘‘limited global import quota’’ means a quantity of

imports that is not subject to the over-quota tariff

rate of a tariff-rate quota.

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

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

the quota is established by the Secretary.

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

period may not be established that overlaps an existing quota

period or a special quota period established under subsection

(b).

SEC. 137. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE

FEED GRAINS AND SEED COTTON.

(a) HIGH MOISTURE FEED GRAINS.—

(1) RECOURSE LOANS AVAILABLE.—For each of the 1996

through 2002 crops of corn and grain sorghum, the Secretary

shall make available recourse loans, as determined by the

7 USC 7237.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 913

Secretary, to producers on a farm containing eligible cropland

covered by a production flexibility contract who—

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

of corn or grain sorghum in a high moisture state;

(B) present—

(i) certified scale tickets from an inspected, certified commercial scale, including a licensed warehouse,

feedlot, feed mill, distillery, or other similar entity

approved by the Secretary, pursuant to regulations

issued by the Secretary; or

(ii) field or other physical measurements of the

standing or stored crop in regions of the United States,

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

harvest operation;

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

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

placed under loan under this subsection was in fact harvested on the farm and delivered to, a feedlot, feed mill,

or commercial or on-farm high-moisture storage facility,

or to a facility maintained by the users of corn and grain

sorghum in a high moisture state; and

(D) comply with deadlines established by the Secretary

for harvesting the corn or grain sorghum and submit

applications for loans under this subsection within deadlines established by the Secretary.

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

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

sorghum of the same crop acquired by the producer equivalent

to a quantity determined by multiplying—

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

high moisture state harvested on the producer’s farm; by

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

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

that is similar to the field from which the corn or grain

sorghum was obtained.

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

the term ‘‘high moisture state’’ means corn or grain sorghum

having a moisture content in excess of Commodity Credit Corporation standards for marketing assistance loans made by

the Secretary under section 131.

(b) RECOURSE LOANS AVAILABLE FOR SEED COTTON.—

(1) UPLAND COTTON.—For each of the 1996 through 2002

crops of upland cotton, the Secretary shall make available

recourse seed cotton loans, as determined by the Secretary,

to producers on a farm containing eligible cropland covered

by a production flexibility contract.

(2) EXTRA LONG STAPLE COTTON.—For each of the 1996

through 2002 crops of extra long staple cotton, the Secretary

shall make available recourse seed cotton loans, as determined

by the Secretary, on any production.

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

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

commodity by the Secretary, plus interest (as determined by the

Secretary).
110 STAT. 914 PUBLIC LAW 104–127—APR. 4, 1996

Subtitle D—Other Commodities

CHAPTER 1—DAIRY

SEC. 141. MILK PRICE SUPPORT PROGRAM.

(a) SUPPORT ACTIVITIES.—The Secretary of Agriculture shall

support the price of milk produced in the 48 contiguous States

through the purchase of cheese, butter, and nonfat dry milk produced from the milk.

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

rates per hundredweight for milk containing 3.67 percent butterfat:

(1) During calendar year 1996, $10.35.

(2) During calendar year 1997, $10.20.

(3) During calendar year 1998, $10.05.

(4) During calendar year 1999, $9.90.

(c) PURCHASE PRICES.—The support purchase prices under this

section for each of the products of milk (butter, cheese, and nonfat

dry milk) announced by the Secretary shall be the same for all

of that product sold by persons offering to sell the product to

the Secretary. The purchase prices shall be sufficient to enable

plants of average efficiency to pay producers, on average, a price

that is not less than the rate of price support for milk in effect

under subsection (b).

(d) SPECIAL RULE FOR BUTTER AND NONFAT DRY MILK PURCHASE PRICES.—

(1) ALLOCATION OF PURCHASE PRICES.—The Secretary may

allocate the rate of price support between the purchase prices

for nonfat dry milk and butter in a manner that will result

in the lowest level of expenditures by the Commodity Credit

Corporation or achieve such other objectives as the Secretary

considers appropriate. Not later than 10 days after making

or changing an allocation, the Secretary shall notify the

Committee on Agriculture of the House of Representatives and

the Committee on Agriculture, Nutrition, and Forestry of the

Senate of the allocation. Section 553 of title 5, United States

Code, shall not apply with respect to the implementation of

this section.

(2) TIMING OF PURCHASE PRICE ADJUSTMENTS.—The Secretary may make any such adjustments in the purchase prices

for nonfat dry milk and butter the Secretary considers to be

necessary not more than twice in each calendar year.

(e) REFUNDS OF 1995 AND 1996 ASSESSMENTS.—

(1) REFUND REQUIRED.—The Secretary shall provide for

a refund of the entire reduction required under section 204(h)(2)

of the Agricultural Act of 1949 (7 U.S.C. 1446e(h)(2)), as in

effect on the day before the amendment made by subsection

(g), in the price of milk received by a producer during calendar

year 1995 or 1996, if the producer provides evidence that the

producer did not increase marketings in calendar year 1995

or 1996 when compared to calendar year 1994 or 1995, respectively.

(2) EXCEPTION.—This subsection shall not apply with

respect to a producer for a particular calendar year if the

producer has already received a refund under section 204(h)

of the Agricultural Act of 1949 for the same fiscal year before

the effective date of this section.

7 USC 7251.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 915

(3) TREATMENT OF REFUND.—A refund under this subsection shall not be considered as any type of price support

or payment for purposes of sections 1211 and 1221 of the

Food Security Act of 1985 (16 U.S.C. 3811 and 3821).

(f) COMMODITY CREDIT CORPORATION.—The Secretary shall

carry out the program authorized by this section through the

Commodity Credit Corporation.

(g) CONFORMING REPEAL.—Effective on the first day of the

first month beginning after the date of enactment of this title,

section 204 of the Agricultural Act of 1949 (7 U.S.C. 1446e) is

repealed.

(h) PERIOD OF EFFECTIVENESS.—This section (other than subsection (g)) shall be effective only during the period beginning

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

enactment of this title and ending on December 31, 1999. The

program authorized by this section shall terminate on December

31, 1999, and shall be considered to have expired notwithstanding

section 257 of the Balanced Budget and Emergency Deficit Control

Act of 1985 (2 U.S.C. 907).

SEC. 142. RECOURSE LOAN PROGRAM FOR COMMERCIAL PROCESSORS

OF DAIRY PRODUCTS.

(a) RECOURSE LOANS AVAILABLE.—Under such reasonable terms

and conditions as the Secretary may prescribe, the Secretary shall

make recourse loans available to commercial processors of eligible

dairy products to assist the processors to manage inventories of

eligible dairy products and assure a greater degree of price stability

for the dairy industry during the year. The Secretary shall use

the funds, facilities, and authorities of the Commodity Credit Corporation to carry out this section.

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

amount of a loan for eligible dairy products, which shall reflect

a milk equivalent value of $9.90 per hundredweight of milk containing 3.67 percent butterfat. The rate of interest charged participants

under this section shall not be less than the rate of interest charged

the Commodity Credit Corporation by the United States Treasury.

(c) PERIOD OF LOAN.—The original term of a recourse loan

made under this section may not extend beyond the end of the

fiscal year in which the loan is made. At the end of the fiscal

year, the Secretary may extend the loan for an additional period

not to exceed the end of the next fiscal year.

(d) DEFINITION OF ELIGIBLE DAIRY PRODUCTS.—In this section,

the term ‘‘eligible dairy products’’ means cheddar cheese, butter,

and nonfat dry milk.

(e) EFFECTIVE DATE.—This section shall be effective beginning

January 1, 2000.

SEC. 143. CONSOLIDATION AND REFORM OF FEDERAL MILK MARKETING ORDERS.

(a) AMENDMENT OF ORDERS.— (1) REQUIRED CONSOLIDATION.—The Secretary shall amend

Federal milk marketing orders issued under section 8c of the

Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with

amendments by the Agricultural Marketing Agreement Act of

1937, to limit the number of Federal milk marketing orders

to not less than 10 and not more than 14 orders.

(2) INCLUSION OF CALIFORNIA AS SEPARATE ORDER.—Upon

the petition and approval of California dairy producers in the

7 USC 7253.

7 USC 7252.

Effective date.
110 STAT. 916 PUBLIC LAW 104–127—APR. 4, 1996

manner provided in section 8c of the Agricultural Adjustment

Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, the Secretary shall

designate the State of California as a separate Federal milk

marketing order. The order covering California shall have the

right to reblend and distribute order receipts to recognize quota

value.

(3) RELATED ISSUES ADDRESSED IN CONSOLIDATION.—Among

the issues the Secretary is authorized to implement as part

of the consolidation of Federal milk marketing orders are the

following:

(A) The use of utilization rates and multiple basing

points for the pricing of fluid milk.

(B) The use of uniform multiple component pricing

when developing 1 or more basic formula prices for manufacturing milk.

(4) EFFECT OF EXISTING LAW.—In implementing the consolidation of Federal milk marketing orders and related reforms

under this subsection, the Secretary may not consider, or base

any decision on, the table contained in section 8c(5)(A) of the

Agricultural Adjustment Act (7 U.S.C. 608c(5)(A)), reenacted

with amendments by the Agricultural Marketing Agreement

Act of 1937, as added by section 131 of the Food Security

Act of 1985.

(b) EXPEDITED PROCESS.—

(1) USE OF INFORMAL RULEMAKING.—To implement the

consolidation of Federal milk marketing orders and related

reforms under subsection (a), the Secretary shall use the notice

and comment procedures provided in section 553 of title 5,

United States Code.

(2) TIME LIMITATIONS.—

(A) PROPOSED AMENDMENTS.—The Secretary shall

announce the proposed amendments to be made under

subsection (a) not later than 2 years after the date of

enactment of this title.

(B) FINAL AMENDMENTS.—The Secretary shall implement the amendments not later than 3 years after the

date of enactment of this title.

(3) EFFECT OF COURT ORDER.—The actions authorized by

this subsection are intended to ensure the timely publication

and implementation of new and amended Federal milk marketing orders. In the event that the Secretary is enjoined or

otherwise restrained by a court order from publishing or

implementing the consolidation and related reforms under subsection (a), the length of time for which that injunction or

other restraining order is effective shall be added to the time

limitations specified in paragraph (2) 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

effective.

(c) FAILURE TO TIMELY CONSOLIDATE ORDERS.—If the Secretary

fails to implement the consolidation required under subsection (a)(1)

within the time period required under subsection (b)(2)(B) (plus

any additional period provided under subsection (b)(3)), the Secretary may not assess or collect assessments from milk producers

or handlers under such section 8c for marketing order administration and services provided under such section after the end of
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 917

that period until the consolidation is completed. The Secretary

may not reduce the level of services provided under the section

on account of the prohibition against assessments, but shall rather

cover the cost of marketing order administration and services

through funds available for the Agricultural Marketing Service

of the Department.

(d) REPORT REGARDING FURTHER REFORMS.— (1) REPORT REQUIRED.—Not later than April 1, 1997, the

Secretary shall submit to Congress a report—

(A) reviewing the Federal milk marketing order system

established pursuant to section 8c of the Agricultural

Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of

1937, in light of the reforms required by subsection (a);

(B) describing the efforts underway and the progress

made in implementing the reforms required by subsection

(a); and

(C) containing such recommendations as the Secretary

considers appropriate for further improvements and

reforms to the Federal milk marketing order system.

(2) EFFECT OF OTHER LAWS.—Any limitation imposed by

Act of Congress on the conduct or completion of reports to

Congress shall not apply to the report required under this

section, unless the limitation specifically refers to this section.

SEC. 144. EFFECT ON FLUID MILK STANDARDS IN STATE OF CALIFORNIA.

Nothing in this Act or any other provision of law shall be

construed to preempt, prohibit, or otherwise limit the authority

of the State of California, directly or indirectly, to establish or

continue to effect any law, regulation, or requirement regarding—

(1) the percentage of milk solids or solids not fat in fluid

milk products sold at retail or marketed in the State of California; or

(2) the labeling of such fluid milk products with regard

to milk solids or solids not fat.

SEC. 145. MILK MANUFACTURING MARKETING ADJUSTMENT.

(a) MAXIMUM ALLOWANCES ESTABLISHED.—No State shall provide for a manufacturing allowance for the processing of milk in

excess of—

(1) $1.65 per hundredweight of milk for milk manufactured

into butter and nonfat dry milk; and (2) $1.80 per hundredweight of milk for milk manufactured

into cheese.

(b) MANUFACTURING ALLOWANCE DEFINED.—In this section, the

term ‘‘manufacturing allowance’’ means—

(1) the amount by which the product price value of butter

and nonfat dry milk manufactured from a hundred pounds

of milk containing 3.5 pounds of butterfat and 8.7 pounds

of milk solids not fat resulting from a State’s yield and product

price formulas exceeds the class price for the milk used to

produce those products; or

(2) the amount by which the product price value of cheese

manufactured from a hundred pounds of milk containing 3.5

pounds of butterfat and 8.7 pounds of milk solids not fat resulting from a State’s yield and product price formulas exceeds

the class price for the milk used to produce cheese.

7 USC 7255.

7 USC 7254.
110 STAT. 918 PUBLIC LAW 104–127—APR. 4, 1996

(c) EFFECT OF VIOLATION.—If the Secretary determines following a hearing that a State has in effect a manufacturing allowance

that exceeds the manufacturing allowance authorized in subsection

(a), the Secretary shall suspend purchases of cheddar cheese, butter,

and nonfat dry milk produced in that State until such time as

the State complies with such subsection.

(d) EFFECTIVE DATE; IMPLEMENTATION.—This section (other

than subsection (e)) shall be effective during the period beginning

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

enactment of this title and ending on December 31, 1999. During

that period, the Secretary may exercise the authority provided

to the Secretary under this section without regard to the issuance

of regulations intended to carry out this section.

(e) CONFORMING REPEAL.—Effective on the first day of the

first month beginning after the date of enactment of this title,

section 102 of the Food, Agriculture, Conservation, and Trade Act

of 1990 (7 U.S.C. 1446e–1) is repealed.

SEC. 146. PROMOTION.

(a) CONGRESSIONAL PURPOSE.—Section 1999B(a) of the Fluid

Milk Promotion Act of 1990 (7 U.S.C. 6401(a)) is amended—

(1) by redesignating paragraphs (6), (7) and (8) as paragraphs (7), (8) and (9), respectively; and

(2) by inserting after paragraph (5) the following:

‘‘(6) the congressional purpose underlying this subtitle is

to maintain and expand markets for fluid milk products, not

to maintain or expand any processor’s share of those markets

and that the subtitle does not prohibit or restrict individual

advertising or promotion of fluid milk products since the programs created and funded by this subtitle are not extended

to replace individual advertising and promotion efforts;’’.

(b) CONGRESSIONAL POLICY.—Section 1999B(b) of the Fluid Milk

Promotion Act of 1990 (7 U.S.C. 6401(b)) is amended to read as

follows:

‘‘(b) POLICY.—It is declared to be the policy of Congress that

it is in the public interest to authorize the establishment, through

the exercise of powers provided in this subtitle, of an orderly procedure for developing, financing, through adequate assessments on

fluid milk products produced in the United States and carrying

out an effective, continuous, and coordinated program of promotion,

research, and consumer information designed to strengthen the

position of the dairy industry in the marketplace and maintain

and expand domestic and foreign markets and uses for fluid milk

products, the purpose of which is not to compete with or replace

individual advertising or promotion efforts designed to promote

individual brand name or trade name fluid milk products, but

rather to maintain and expand the markets for all fluid milk

products, with the goal and purpose of this subtitle being a national

governmental goal that authorizes and funds programs that result

in government speech promoting government objectives.’’.

(c) RESEARCH.—Section 1999C(6) of the Fluid Milk Promotion

Act of 1990 (7 U.S.C. 6402(6)) is amended to read as follows:

‘‘(6) RESEARCH.—The term ‘research’ means market

research to support advertising and promotion efforts, including

educational activities, research directed to product characteristics, product development, including new products or improved

Effective date.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 919

technology in production, manufacturing or processing of milk

and the products of milk.’’.

(d) VOTING.— (1) INITIAL REFERENDA.—Section 1999N(b)(2) of the Fluid

Milk Promotion Act of 1990 (7 U.S.C. 6413(b)(2)) is amended

by striking ‘‘all processors’’ and inserting ‘‘fluid milk processors

voting in the referendum’’.

(2) SUSPENSION OR TERMINATION.—Section 1999O(c) of such

Act (7 U.S.C. 6414(c)) is amended—

(A) in paragraph (1), by striking ‘‘all processors’’ and

inserting ‘‘fluid milk processors voting in the preceding

referendum’’; and

(B) in paragraph (2)(B), by striking ‘‘all processors’’

and inserting ‘‘fluid milk processors voting in the referendum’’.

(e) DURATION.—Section 1999O(a) of the Fluid Milk Promotion

Act of 1990 (7 U.S.C. 6414(a)) is amended by striking ‘‘1996’’ and

inserting ‘‘2002’’.

SEC. 147. NORTHEAST INTERSTATE DAIRY COMPACT.

Congress hereby consents to the Northeast Interstate Dairy

Compact entered into among the States of Connecticut, Maine,

Massachusetts, New Hampshire, Rhode Island and Vermont as

specified in section 1(b) Senate Joint Resolution 28 of the 104th

Congress, as placed on the calendar of the Senate, subject to the

following conditions:

(1) FINDING OF COMPELLING PUBLIC INTEREST.—Based upon

a finding by the Secretary of a compelling public interest in

the Compact region, the Secretary may grant the States that

have ratified the Northeast Interstate Dairy Compact, as of

the date of enactment of this title, the authority to implement

the Northeast Interstate Dairy Compact.

(2) LIMITATION ON MANUFACTURING PRICE.—The Northeast

Interstate Dairy Compact Commission shall not regulate Class

II, Class III, or Class III-A milk used for manufacturing purposes or any other milk, other than Class I (fluid) milk, as

defined by a 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.

(3) DURATION.—Consent for the Northeast Interstate Dairy

Compact shall terminate concurrent with the Secretary’s

implementation of the dairy pricing and Federal milk marketing

order consolidation and reforms under section 143.

(4) ADDITIONAL STATES.—Delaware, New Jersey, New York,

Pennsylvania, Maryland, and Virginia are the only additional

States that may join the Northeast Interstate Dairy Compact,

individually or otherwise, if upon entry the State is contiguous

to a participating State and if Congress consents to the entry

of the State into the Compact after the date of enactment

of this title.

(5) COMPENSATION OF COMMODITY CREDIT CORPORATION.—

Before the end of each fiscal year that a Compact price regulation is in effect, the Northeast Interstate Dairy Compact

Commission shall compensate the Commodity Credit Corporation for the cost of any purchases of milk and milk products

by the Corporation that result from the projected rate of

Congress.

State listing.

7 USC 7256.
110 STAT. 920 PUBLIC LAW 104–127—APR. 4, 1996

increase in milk production for the fiscal year within the Compact region in excess of the projected national average rate

of the increase in milk production, as determined by the Secretary.

(6) MILK MARKETING ORDER ADMINISTRATOR.—At the

request of the Northeast Interstate Dairy Compact Commission,

the Administrator of the applicable Federal milk marketing

order issued under section 8(c)5 of the Agricultural Adjustment

Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, shall provide technical

assistance to the Compact Commission and be compensated

for that assistance.

(7) FURTHER CONDITIONS.—The Northeast Interstate Dairy

Compact Commission shall not prohibit or in any way limit

the marketing in the Compact region of any milk or milk

product produced in any other production area in the United

States. The Compact Commission shall respect and abide by

the ongoing procedures between Federal milk marketing orders

with respect to the sharing of proceeds from sales within the

Compact region of bulk milk, packaged milk, or producer milk

originating from outside of the Compact region. The Compact

Commission shall not use compensatory payments under section 10(6) of the Compact as a barrier to the entry of milk

into the Compact region or for any other purpose. Establishment of a Compact over-order price, in itself, shall not be

considered a compensatory payment or a limitation or prohibition on the marketing of milk.

SEC. 148. DAIRY EXPORT INCENTIVE PROGRAM.

(a) DURATION.—Section 153(a) of the Food Security Act of 1985

(15 U.S.C. 713a–14(a)) is amended by striking ‘‘2001’’ and inserting

‘‘2002’’.

(b) SOLE DISCRETION.—Section 153(b) of the Food Security Act

of 1985 (15 U.S.C. 713a–14(b)) is amended by inserting ‘‘sole’’ before

‘‘discretion’’.

(c) ELEMENTS OF PROGRAM.—Section 153(c) of the Food Security

Act of 1985 (15 U.S.C. 713a–14(c)) is amended—

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

(2) by striking the period at the end of paragraph (2)

and inserting a semicolon; and

(3) by adding at the end the following:

‘‘(3) the maximum volume of dairy product exports allowable consistent with the obligations of the United States as

a member of the World Trade Organization is exported under

the program each year (minus the volume sold under section

1163 of the Food Security Act of 1985 (Public Law 99–198;

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

that the export of such a volume under the program would,

in the judgment of the Secretary, exceed the limitations on

the value set forth in subsection (f); and

‘‘(4) payments may be made under the program for exports

to any destination in the world for the purpose of market

development, except a destination in a country with respect

to which shipments from the United States are otherwise

restricted by law.’’.

(d) MARKET DEVELOPMENT.—Section 153(e)(1) of the Food Security Act of 1985 (15 U.S.C. 713a–14(e)(1)) is amended—
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 921

(1) by striking ‘‘and’’ and inserting ‘‘the’’; and

(2) by inserting before the period the following: ‘‘, and

any additional amount that may be required to assist in the

development of world markets for United States dairy products’’.

(e) MAXIMUM ALLOWABLE AMOUNTS.—Section 153 of the Food

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

at the end the following:

‘‘(f) REQUIRED FUNDING.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2),

the Commodity Credit Corporation shall in each year use money

and commodities for the program under this section in the

maximum amount consistent with the obligations of the United

States as a member of the World Trade Organization, minus

the amount expended under section 1163 of the Food Security

Act of 1985 (Public Law 99–198; 7 U.S.C. 1731 note) during

that year.

‘‘(2) VOLUME LIMITATIONS.—The Commodity Credit Corporation may not exceed the limitations specified in subsection

(c)(3) on the volume of allowable dairy product exports.’’.

SEC. 149. AUTHORITY TO ASSIST IN ESTABLISHMENT AND MAINTENANCE OF ONE OR MORE EXPORT TRADING COMPANIES.

The Secretary of Agriculture shall, consistent with the obligations of the United States as a member of the World Trade

Organization, provide such advice and assistance to the United

States dairy industry as may be necessary to enable that industry

to establish and maintain one or more export trading companies

under the Export Trading Company Act of 1982 (15 U.S.C. 4001

et seq.) for the purpose of facilitating the international market

development for and exportation of dairy products produced in

the United States.

SEC. 150. STANDBY AUTHORITY TO INDICATE ENTITY BEST SUITED

TO PROVIDE INTERNATIONAL MARKET DEVELOPMENT

AND EXPORT SERVICES.

(a) INDICATION OF ENTITY BEST SUITED TO ASSIST INTERNATIONAL MARKET DEVELOPMENT FOR AND EXPORT OF UNITED

STATES DAIRY PRODUCTS.—The Secretary of Agriculture shall

indicate which entity or entities autonomous of the Government

of the United States, which seeks such a designation, is best suited

to facilitate the international market development for and exportation of United States dairy products, if the Secretary determines

that—

(1) the United States dairy industry has not established

an export trading company under the Export Trading Company

Act of 1982 (15 U.S.C. 4001 et seq.) for the purpose of facilitating the international market development for an exportation

of dairy products produced in the United States on or before

June 30, 1997; or

(2) the quantity of exports of United States dairy products

during the 12-month period preceding July 1, 1998 does not

exceed the quantity of exports of United States dairy products

during the 12-month period preceding July 1, 1997 by 1.5

billion pounds (milk equivalent, total solids basis).

(b) FUNDING OF EXPORT ACTIVITIES.—The Secretary shall assist

the entity or entities identified under subsection (a) in identifying

7 USC 7258.

7 USC 7257.
110 STAT. 922 PUBLIC LAW 104–127—APR. 4, 1996

sources of funding for the activities specified in subsection (a)

from within the dairy industry and elsewhere.

(c) APPLICATION OF SECTION.—This section shall apply only

during the period beginning on July 1, 1997 and ending on September 30, 2000.

SEC. 151. STUDY AND REPORT REGARDING POTENTIAL IMPACT OF

URUGUAY ROUND ON PRICES, INCOME, AND GOVERNMENT PURCHASES.

(a) STUDY.—The Secretary of Agriculture shall conduct a study,

on a variety by variety of cheese basis, to determine the potential

impact on milk prices in the United States, dairy producer income,

and Federal dairy program costs, of the allocation of additional

cheese granted access to the United States as a result of the

obligations of the United States as a member of the World Trade

Organization.

(b) REPORT.—Not later than June 30, 1997, the Secretary shall

report to the Committee on Agriculture, Nutrition, and Forestry

of the Senate and the Committee on Agriculture of the House

of Representatives the results of the study conducted under this

section.

(c) RULE OF CONSTRUCTION.—Any limitation imposed by Act

of Congress on the conduct or completion of studies or reports

to Congress shall not apply to the study and report required under

this section, unless the limitation specifically refers to this section.

SEC. 152. PROMOTION OF UNITED STATES DAIRY PRODUCTS IN INTERNATIONAL MARKETS THROUGH DAIRY PROMOTION PROGRAM.

Section 113(e) of the Dairy Production Stabilization Act of

1983 (7 U.S.C. 4504(e)) is amended by adding at the end the

following new sentence: ‘‘For each of fiscal years 1997 through

2001, the Board’s budget may provide for the expenditure of revenues available to the Board to develop international markets for,

and to promote within such markets, the consumption of dairy

products produced in the United States from milk produced in

the United States.’’.

CHAPTER 2—PEANUTS AND SUGAR

SEC. 155. PEANUT PROGRAM.

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

nonrecourse loans available to producers of quota peanuts.

(2) LOAN RATE.—The national average quota loan rate for quota peanuts shall be $610 per ton.

(3) INSPECTION, HANDLING, OR STORAGE.—The loan amount

may not be reduced by the Secretary by any deductions for

inspection, handling, or storage.

(4) LOCATION AND OTHER FACTORS.—The Secretary may

make adjustments in the loan rate for quota peanuts for location of peanuts and such other factors as are authorized by

section 162.

(5) OFFERS FROM HANDLERS.—If a producer markets a quota

peanut crop, meeting quality requirements for domestic edible

use, through the marketing association loan for two consecutive

marketing years and the Secretary determines that a handler

provided the producer with a written offer, upon delivery, for

7 USC 7271.

7 USC 7259.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 923

the purchase of the quota peanut crops at a price equal to

or in excess of the quota support price, the producer shall

be ineligible for quota price support for the next marketing

year. The Secretary shall establish the method by which a

producer may appeal a determination under this paragraph

regarding ineligibility for quota price support.

(b) ADDITIONAL PEANUTS.—

(1) IN GENERAL.—Subject to paragraph (2), the Secretary

shall make nonrecourse loans available to producers of additional peanuts at such rates as the Secretary finds appropriate,

taking into consideration the demand for peanut oil and peanut

meal, expected prices of other vegetable oils and protein meals,

and the demand for peanuts in foreign markets.

(2) LIMITATION.—The Secretary shall establish the support

rate on additional peanuts at a level estimated by the Secretary

to ensure that there are no losses to the Commodity Credit

Corporation on the sale or disposal of the peanuts.

(3) ANNOUNCEMENT.—The Secretary shall announce the

loan rate for additional peanuts of each crop not later than

February 15 preceding the marketing year for the crop for

which the loan rate is being determined.

(c) AREA MARKETING ASSOCIATIONS.—

(1) WAREHOUSE STORAGE LOANS.—

(A) IN GENERAL.—In carrying out subsections (a) and

(b), the Secretary shall make warehouse storage loans

available in each of the producing areas (described in section 1446.95 of title 7 of the Code of Federal Regulations

(January 1, 1989)) to a designated area marketing association of peanut producers that is selected and approved

by the Secretary and that is operated primarily for the

purpose of conducting the loan activities. The Secretary

may not make warehouse storage loans available to any

cooperative that is engaged in operations or activities

concerning peanuts other than those operations and activities specified in this section and section 358e of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359a).

(B) ADMINISTRATIVE AND SUPERVISORY ACTIVITIES.—An

area marketing association shall be used in administrative

and supervisory activities relating to loans and marketing

activities under this section and section 358e of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359a).

(C) ASSOCIATION COSTS.—Loans made to the association under this paragraph shall include such costs as the

area marketing association reasonably may incur in carrying out the responsibilities, operations, and activities of

the association under this section and section 358e of the

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

(2) POOLS FOR QUOTA AND ADDITIONAL PEANUTS.—

(A) IN GENERAL.—The Secretary shall require that each

area marketing association establish pools and maintain

complete and accurate records by area and segregation

for quota peanuts handled under loan and for additional

peanuts placed under loan, except that separate pools shall

be established for Valencia peanuts produced in New Mexico.

(B) ELIGIBILITY TO PARTICIPATE IN NEW MEXICO

POOLS.—

Records.

New Mexico.
110 STAT. 924 PUBLIC LAW 104–127—APR. 4, 1996

(i) IN GENERAL.—Except as provided in clause (ii),

in the case of the 1996 and subsequent crops, Valencia

peanuts not physically produced in the State of New

Mexico shall not be eligible to participate in the pools

of the State.

(ii) EXCEPTION.—A producer of Valencia peanuts

may enter Valencia peanuts that are produced in Texas

into the pools of New Mexico in a quantity not greater

than the average annual quantity of the peanuts that

the producer entered into the New Mexico pools for

the 1990 through 1995 crops.

(C) TYPES OF PEANUTS.—Bright hull and dark hull

Valencia peanuts shall be considered as separate types

for the purpose of establishing the pools.

(D) NET GAINS.—Net gains on peanuts in each pool,

unless otherwise approved by the Secretary, shall be

distributed only to producers who placed peanuts in the

pool and shall be distributed in proportion to the value

of the peanuts placed in the pool by each producer. Net

gains for peanuts in each pool shall consist of the following:

(i) QUOTA PEANUTS.—For quota peanuts, the net

gains over and above the loan indebtedness and other

costs or losses incurred on peanuts placed in the pool.

(ii) ADDITIONAL PEANUTS.—For additional peanuts,

the net gains over and above the loan indebtedness

and other costs or losses incurred on peanuts placed

in the pool for additional peanuts.

(d) LOSSES.—Losses in quota area pools shall be covered using

the following sources in the following order of priority:

(1) TRANSFERS FROM ADDITIONAL LOAN POOLS.—The proceeds due any producer from any pool shall be reduced by

the amount of any loss that is incurred with respect to peanuts

transferred from an additional loan pool to a quota loan pool

by the producer under section 358–1(b)(8) of the Agricultural

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

(2) PRODUCERS IN SAME POOL.—Further losses in an area

quota pool shall be offset by reducing the gain of any producer

in the pool by the amount of pool gains attributed to the

same producer from the sale of additional peanuts for domestic

and edible export use.

(3) OFFSET WITHIN AREA.—Further losses in an area quota

pool shall be offset by any gains or profits from additional

peanuts (other than separate type pools established under subsection (c)(2)(A) for Valencia peanuts produced in New Mexico)

owned or controlled by the Commodity Credit Corporation in

that area and sold for domestic edible use, in accordance with

regulations issued by the Secretary. This paragraph shall not

apply to profits or gains from a farm with 1 acre or less

of peanut production.

(4) FIRST USE OF MARKETING ASSESSMENTS.—The Secretary

shall use funds collected under subsection (g) (except funds

attributable to handlers) to offset further losses in area quota

pools. The Secretary shall transfer to the Treasury those funds

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

paragraph that the Secretary determines are not required to

cover losses in area quota pools.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 925

(5) CROSS COMPLIANCE.—Further losses in area quota pools,

other than losses incurred as a result of transfers from additional loan pools to quota loan pools under section 358–1(b)(8)

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

1(b)(8)), shall be offset by any gains or profits from quota

pools in other production areas (other than separate type pools

established under subsection (c)(2)(A) for Valencia peanuts produced in New Mexico) in such manner as the Secretary shall

by regulation prescribe.

(6) OFFSET GENERALLY.—If losses in an area quota pool

have not been entirely offset under the preceding paragraphs,

further losses shall be offset by any gains or profits from

additional peanuts (other than separate type pools established

under subsection (c)(2)(A) for Valencia peanuts produced in

New Mexico) owned or controlled by the Commodity Credit

Corporation and sold for domestic edible use, in accordance

with regulations issued by the Secretary. This paragraph shall

not apply to profits or gains from a farm with 1 acre or less

of peanut production.

(7) SECOND USE OF MARKETING ASSESSMENTS.—The Secretary shall use funds collected under subsection (g) and attributable to handlers to offset further losses in area quota pools.

The Secretary shall transfer to the Treasury those funds collected under subsection (g) and available for use under this

paragraph that the Secretary determines are not required to

cover losses in area quota pools.

(8) INCREASED ASSESSMENTS.—If use of the authorities provided in the preceding paragraphs is not sufficient to cover

losses in an area quota pool, the Secretary shall increase the

marketing assessment for producers established under subsection (g) by such an amount as the Secretary considers necessary to cover the losses. The increased assessment shall apply

only to quota peanuts in the production area covered by the

pool. Amounts collected under subsection (g) as a result of

the increased assessment shall be retained by the Secretary

to cover losses in that pool.

(e) DISAPPROVAL OF QUOTAS.—Notwithstanding any other provision of law, no loan for quota peanuts may be made available

by the Secretary for any crop of peanuts with respect to which

poundage quotas have been disapproved by producers, as provided

for in section 358–1(d) of the Agricultural Adjustment Act of 1938

(7 U.S.C. 1358–1(d)).

(f) QUALITY IMPROVEMENT.—

(1) IN GENERAL.—With respect to peanuts under loan, the

Secretary shall—

(A) promote the crushing of peanuts at a greater risk

of deterioration before peanuts of a lesser risk of deterioration;

(B) ensure that all Commodity Credit Corporation

inventories of peanuts sold for domestic edible use must

be shown to have been officially inspected by licensed

Department inspectors both as farmer stock and shelled

or cleaned in-shell peanuts;

(C) continue to endeavor to operate the peanut program

so as to improve the quality of domestic peanuts and ensure

the coordination of activities under the Peanut Administrative Committee established under Marketing Agreement

Regulations.
110 STAT. 926 PUBLIC LAW 104–127—APR. 4, 1996

No. 146, regulating the quality of domestically produced

peanuts (under the Agricultural Adjustment Act (7 U.S.C.

601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937); and

(D) ensure that any changes made in the peanut program as a result of this subsection requiring additional

production or handling at the farm level shall be reflected

as an upward adjustment in the Department loan schedule.

(2) EXPORTS AND OTHER PEANUTS.—The Secretary shall

require that all peanuts in the domestic and export markets

fully comply with all quality standards under Marketing Agreement No. 146.

(g) MARKETING ASSESSMENT.—

(1) IN GENERAL.—The Secretary shall provide for a nonrefundable marketing assessment. The assessment shall be

made on a per pound basis in an amount equal to 1.1 percent

for each of the 1994 and 1995 crops, 1.15 percent for the

1996 crop, and 1.2 percent for each of the 1997 through 2002

crops, of the national average quota or additional peanut loan

rate for the applicable crop.

(2) FIRST PURCHASERS.—

(A) IN GENERAL.—Except as provided under paragraphs

(3) and (4), the first purchaser of peanuts shall—

(i) collect from the producer a marketing assessment equal to the quantity of peanuts acquired multiplied by—

(I) in the case of each of the 1994 and 1995

crops, .55 percent of the applicable national average loan rate;

(II) in the case of the 1996 crop, .6 percent

of the applicable national average loan rate; and

(III) in the case of each of the 1997 through

2002 crops, .65 percent of the applicable national

average loan rate;

(ii) pay, in addition to the amount collected under

clause (i), a marketing assessment in an amount equal

to the quantity of peanuts acquired multiplied by .55

percent of the applicable national average loan rate;

and

(iii) remit the amounts required under clauses (i)

and (ii) to the Commodity Credit Corporation in a

manner specified by the Secretary.

(B) DEFINITION OF FIRST PURCHASER.—In this subsection, the term ‘‘first purchaser’’ means a person acquiring peanuts from a producer except that in the case of

peanuts forfeited by a producer to the Commodity Credit

Corporation, the term means the person acquiring the peanuts from the Commodity Credit Corporation.

(3) OTHER PRIVATE MARKETINGS.—In the case of a private

marketing by a producer directly to a consumer through a

retail or wholesale outlet or in the case of a marketing by

the producer outside of the continental United States, the producer shall be responsible for the full amount of the assessment

and shall remit the assessment by such time as is specified

by the Secretary.

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

as collateral for a loan made under this section, the producer
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 927

portion of the assessment shall be deducted from the proceeds

of the loan. The remainder of the assessment shall be paid

by the first purchaser of the peanuts. For purposes of computing

net gains on peanuts under this section, the reduction in loan

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

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

reduction required by this subsection or fails to comply with

the requirements for recordkeeping or otherwise as are required

by the Secretary to carry out this subsection, the person shall

be liable to the Secretary for a civil penalty up to an amount

determined by multiplying—

(A) the quantity of peanuts involved in the violation;

by

(B) the national average quota peanut rate for the

applicable crop year.

(6) ENFORCEMENT.—The Secretary may enforce this subsection in the courts of the United States.

(h) CROPS.—Subsections (a) through (g) shall be effective only

for the 1996 through 2002 crops of peanuts.

(i) POUNDAGE QUOTAS.—

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

Agricultural Adjustment Act of 1938 is amended—

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

(i) in the section heading, by striking ‘‘1991

THROUGH 1997 CROPS OF’’;

(ii) in subsections (a)(1), (b)(1)(B), (b)(2)(A),

(b)(2)(C), and (b)(3)(A), by striking ‘‘of the 1991 through

1997 marketing years’’ each place it appears and

inserting ‘‘marketing year’’;

(iii) in subsection (a)(3), by striking ‘‘1990’’ and

inserting ‘‘1990, for the 1991 through 1995 marketing

years, and 1995, for the 1996 through 2002 marketing

years’’;

(iv) in subsection (b)(1)(A)—

(I) by striking ‘‘each of the 1991 through 1997

marketing years’’ and inserting ‘‘each marketing

year’’; and

(II) in clause (i), by inserting before the semicolon the following: ‘‘, in the case of the 1991

through 1995 marketing years, and the 1995

marketing year, in the case of the 1996 through

2002 marketing years’’;

(v) in subsection (b)(1), by adding at the end the

following:

‘‘(D) CERTAIN FARMS INELIGIBLE FOR QUOTA.—Effective

beginning with the 1998 crop, the Secretary shall not establish a farm poundage quota under subparagraph (A) for

a farm owned or controlled by—

‘‘(i) a municipality, airport authority, school, college, refuge, or other public entity (other than a university used for research purposes); or

‘‘(ii) a person who is not a producer and resides

in another State.’’;

(vi) in subsection (b)(2), by adding at the end the

following:

‘‘(E) TRANSFER OF QUOTA FROM INELIGIBLE FARMS.—

Any farm poundage quota held at the end of the 1996

Effective date.

Effective date.
110 STAT. 928 PUBLIC LAW 104–127—APR. 4, 1996

marketing year by a farm described in paragraph (1)(D)

shall be allocated to other farms in the same State on

such basis as the Secretary may by regulation prescribe.’’;

and

(vii) in subsection (f), by striking ‘‘1997’’ and inserting ‘‘2002’’;

(B) in section 358b (7 U.S.C. 1358b)—

(i) in the section heading, by striking ‘‘1991

THROUGH 1995 CROPS OF’’; and

(ii) in subsection (c), by striking ‘‘1995’’ and inserting ‘‘2002’’;

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

‘‘1995’’ and inserting ‘‘2002’’; and

(D) in section 358e (7 U.S.C. 1359a)—

(i) in the section heading, by striking ‘‘FOR 1991

THROUGH 1997 CROPS OF PEANUTS’’; and

(ii) in subsection (i), by striking ‘‘1997’’ and inserting ‘‘2002’’.

(2) ELIMINATION OF QUOTA FLOOR.—Section 358–1(a)(1) of

the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1(a)(1))

is amended by striking the second sentence.

(3) TEMPORARY QUOTA ALLOCATION.—Section 358–1 of the

Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1) is

amended—

(A) in subsection (a)(1), by striking ‘‘domestic edible,

seed,’’ and inserting ‘‘domestic edible use (except seed)’’;

and

(B) in subsection (b)(2)—

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

(B) and subject to’’; and

(ii) by striking subparagraph (B) and inserting

the following:

‘‘(B) TEMPORARY QUOTA ALLOCATION.—

‘‘(i) ALLOCATION RELATED TO SEED PEANUTS.—Temporary allocation of quota pounds for the marketing

year only in which the crop is planted shall be made

to producers for each of the 1996 through 2002 marketing years as provided in this subparagraph.

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

shall be equal to the pounds of seed peanuts planted

on the farm, as may be adjusted and determined under

regulations prescribed by the Secretary.

‘‘(iii) ADDITIONAL QUOTA.—The temporary allocation of quota pounds under this paragraph shall be

in addition to the farm poundage quota otherwise

established under this subsection and shall be credited,

for the applicable marketing year only, in total, to

the producer of the peanuts on the farm in a manner

prescribed by the Secretary.

‘‘(iv) EFFECT OF OTHER REQUIREMENTS.—Nothing

in this section alters or changes the requirements

regarding the use of quota and additional peanuts

established by section 358e(b).’’.

(4) UNDERMARKETINGS.—Part VI of subtitle B of title III

of the Agricultural Adjustment Act of 1938 is amended—

(A) in section 358–1(b) (7 U.S.C. 1358–1(b))—
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 929

(i) in paragraph (1)(B), by striking ‘‘including—’’ and clauses (i) and (ii) and inserting ‘‘including

any increases resulting from the allocation of quotas

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

(ii) in paragraph (3)(B), by striking ‘‘include—’’

and clauses (i) and (ii) and inserting ‘‘include any

increase resulting from the allocation of quotas voluntarily released for 1 year under paragraph (7).’’; and

(iii) by striking paragraphs (8) and (9); and

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

(i) in paragraph (2), by striking ‘‘(including any

applicable under marketings)’’; and

(ii) in paragraph (3), by striking ‘‘(including any

applicable undermarketings)’’.

(5) DISASTER TRANSFERS.—Section 358–1(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1(b)), as amended

by paragraph (4)(A)(iii), is amended by adding at the end the

following:

‘‘(8) DISASTER TRANSFERS.—

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

(B), additional peanuts produced on a farm from which

the quota poundage was not harvested and marketed

because of drought, flood, or any other natural disaster,

or any other condition beyond the control of the producer,

may be transferred to the quota loan pool for pricing purposes on such basis as the Secretary shall by regulation

provide.

‘‘(B) LIMITATION.—The poundage of peanuts transferred

under subparagraph (A) shall not exceed the difference

between—

‘‘(i) the total quantity of peanuts meeting quality

requirements for domestic edible use, as determined

by the Secretary, marketed from the farm; and

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

quota pounds transferred to the farm in the fall.

‘‘(C) SUPPORT RATE.—Peanuts transferred under this

paragraph shall be supported at 70 percent of the quota

support rate for the marketing years in which the transfers

occur. The transfers for a farm shall not exceed 25 percent

of the total farm quota pounds, excluding pounds transferred in the fall.’’.

(6) SALE OR LEASE.—Section 358b(a) of the Agricultural

Adjustment Act of 1938 (7 U.S.C. 1358b(a)) is amended—

(A) by striking paragraph (1) and inserting the following:

‘‘(1) SALE AND LEASE AUTHORITY.—

‘‘(A) SALE OR LEASE WITHIN SAME STATE.—Subject to

subparagraph (B) and such terms and conditions as the

Secretary may prescribe, the owner, or operator with the

permission of the owner, of a farm in a State for which

a farm poundage quota has been established may sell or

lease all or any part of the poundage quota to any other

owner or operator of a farm within the same State for

transfer to the farm. However, any such lease of poundage

quota may be entered into in the fall or after the normal

planting season—

Regulations.
110 STAT. 930 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(i) if not less than 90 percent of the basic quota

(the farm quota and temporary quota transfers), plus

any poundage quota transferred to the farm under

this subsection, has been planted or considered planted

on the farm from which the quota is to be leased;

and

‘‘(ii) under such terms and conditions as the Secretary may by regulation prescribe.

‘‘In the case of a fall transfer or a transfer after the normal

planting season by a cash lessee, the landowner shall not

be required to sign the transfer authorization. A fall transfer or a transfer after the normal planting season may

be made not later than 72 hours after the peanuts that

are the subject of the transfer are inspected and graded.

‘‘(B) PERCENTAGE LIMITATIONS ON SPRING TRANSFERS.—

Spring transfers under subparagraph (A) by sale or lease

of a quota for farms in a county to any owner or operator

of a farm outside the county within the same State shall

not exceed the applicable percentage specified in this

subparagraph of the quotas of all farms in the originating

county (as of January 1, 1996) for the crop year in which

the transfer is made, plus the total amount of quotas

eligible for transfer from the originating county in the

preceding crop year that were not transferred in that year

or that were transferred through an expired lease. However, not more than an aggregate of 40 percent of the

total poundage quota within a county (as of January 1,

1996) may be transferred outside of the county. Cumulative

unexpired transfers outside of a county may not exceed

for a crop year the following:

‘‘(i) For the 1996 crop, 15 percent.

‘‘(ii) For the 1997 crop, 25 percent.

‘‘(iii) For the 1998 crop, 30 percent.

‘‘(iv) For the 1999 crop, 35 percent.

‘‘(v) For the 2000 and subsequent crops, not more

than an aggregate of 40 percent of the total poundage

quota within the county as of January 1, 1996.

‘‘(C) CLARIFICATION REGARDING FALL TRANSFERS.—The

limitation in subparagraph (B) does not apply to 1-year

fall transfers, which in all cases may be made to any

farm in the same State.

‘‘(D) EFFECT OF TRANSFER.—Any farm poundage quota

transferred under this paragraph shall not result in any

reduction in the farm poundage quota for the transferring

farm if the transferred quota is produced or considered

produced on the receiving farm.’’; and

(B) by adding at the end the following:

‘‘(4) TRANSFERS IN COUNTIES WITH SMALL QUOTAS.—Notwithstanding paragraphs (1) and (2), in the case of any county

in a State for which the poundage quota allocated to the county

was less than 100,000 pounds for the preceding year’s crop,

all or any part of a farm poundage quota may be transferred

by sale or lease or otherwise from a farm in the county to

a farm in another county in the same State.’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 931

SEC. 156. SUGAR PROGRAM.

(a) SUGARCANE.—The Secretary shall make loans available to

processors of domestically grown sugarcane at a rate equal to 18

cents per pound for raw cane sugar.

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

to processors of domestically grown sugar beets at a rate equal

to 22.9 cents per pound for refined beet sugar.

(c) REDUCTION IN LOAN RATES.—

(1) REDUCTION REQUIRED.—The Secretary shall reduce the

loan rate specified in subsection (a) for domestically grown

sugarcane and subsection (b) for domestically grown sugar beets

if the Secretary determines that negotiated reductions in export

subsidies and domestic subsidies provided for sugar of other

major sugar growing, producing, and exporting countries in

the aggregate exceed the commitments made as part of the

Agreement on Agriculture.

(2) EXTENT OF REDUCTION.—The Secretary shall not reduce

the loan rate under subsection (a) or (b) below a rate that

provides an equal measure of support to that provided by

other major sugar growing, producing, and exporting countries,

based on an examination of both domestic and export subsidies

subject to reduction in the Agreement on Agriculture.

(3) ANNOUNCEMENT OF REDUCTION.—The Secretary shall

announce any loan rate reduction to be made under this subsection as far in advance as is practicable.

(4) DEFINITIONS.—In this subsection:

(A) AGREEMENT ON AGRICULTURE.—The term ‘‘Agreement on Agriculture’’ means the Agreement on Agriculture

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

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

(B) MAJOR SUGAR COUNTRIES.—The term ‘‘major sugar

growing, producing, and exporting countries’’ means—

(i) the countries of the European Union; and

(ii) the 10 foreign countries not covered by subparagraph (A) that the Secretary determines produce the

greatest quantity of sugar.

(d) TERM OF LOANS.—

(1) IN GENERAL.—A loan under this section during any

fiscal year shall be made available not earlier than the beginning of the fiscal year and shall mature at the earlier of—

(A) the end of the 9-month period beginning on the

first day of the first month after the month in which

the loan is made; or

(B) the end of the fiscal year in which the loan is

made.

(2) SUPPLEMENTAL LOANS.—In the case of a loan made

under this section in the last 3 months of a fiscal year, the

processor may repledge the sugar as collateral for a second

loan in the subsequent fiscal year, except that the second

loan shall—

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

the second loan is made; and

(B) mature in 9 months less the quantity of time that

the first loan was in effect.

(e) LOAN TYPE; PROCESSOR ASSURANCES.—

7 USC 7272.
110 STAT. 932 PUBLIC LAW 104–127—APR. 4, 1996

(1) RECOURSE LOANS.—Subject to paragraph (2), the Secretary shall carry out this section through the use of recourse

loans.

(2) NONRECOURSE LOANS.—During any fiscal year in which

the tariff rate quota for imports of sugar into the United States

is established at, or is increased to, a level in excess of 1,500,000

short tons raw value, the Secretary shall carry out this section

by making available nonrecourse loans. Any recourse loan previously made available by the Secretary under this section

during the fiscal year shall be changed by the Secretary into

a nonrecourse loan.

(3) PROCESSOR ASSURANCES.—If the Secretary is required

under paragraph (2) to make nonrecourse loans available during a fiscal year or to change recourse loans into nonrecourse

loans, the Secretary shall obtain from each processor that

receives a loan under this section such assurances as the Secretary considers adequate to ensure that the processor will

provide payments to producers that are proportional to the

value of the loan received by the processor for sugar beets

and sugarcane delivered by producers served by the processor.

The Secretary may establish appropriate minimum payments

for purposes of this paragraph.

(f) MARKETING ASSESSMENT.—

(1) SUGARCANE.—Effective for marketings of raw cane

sugar during the 1996 through 2003 fiscal years, the first

processor of sugarcane shall remit to the Commodity Credit

Corporation a nonrefundable marketing assessment in an

amount equal to—

(A) in the case of marketings during fiscal year 1996,

1.1 percent of the loan rate established under subsection

(a) per pound of raw cane sugar, processed by the processor

from domestically produced sugarcane or sugarcane molasses, that has been marketed (including the transfer or

delivery of the sugar to a refinery for further processing

or marketing); and

(B) in the case of marketings during each of fiscal

years 1997 through 2003, 1.375 percent of the loan rate

established under subsection (a) per pound of raw cane

sugar, processed by the processor from domestically produced sugarcane or sugarcane molasses, that has been

marketed (including the transfer or delivery of the sugar

to a refinery for further processing or marketing).

(2) SUGAR BEETS.—Effective for marketings of beet sugar

during the 1996 through 2003 fiscal years, the first processor

of sugar beets shall remit to the Commodity Credit Corporation

a nonrefundable marketing assessment in an amount equal

to—

(A) in the case of marketings during fiscal year 1996,

1.1794 percent of the loan rate established under subsection

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

from domestically produced sugar beets or sugar beet

molasses, that has been marketed; and

(B) in the case of marketings during each of fiscal

years 1997 through 2003, 1.47425 percent of the loan rate

established under subsection (a) per pound of beet sugar,

processed by the processor from domestically produced

Effective date.

Effective date.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 933

sugar beets or sugar beet molasses, that has been marketed.

(3) COLLECTION.—

(A) TIMING.—A marketing assessment required under

this subsection shall be collected on a monthly basis and

shall be remitted to the Commodity Credit Corporation

not later than 30 days after the end of each month. Any

cane sugar or beet sugar processed during a fiscal year

that has not been marketed by September 30 of the year

shall be subject to assessment on that date. The sugar

shall not be subject to a second assessment at the time

that it is marketed.

(B) MANNER.—Subject to subparagraph (A), marketing

assessments shall be collected under this subsection in

the manner prescribed by the Secretary and shall be nonrefundable.

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

required by this subsection or fails to comply with such requirements for recordkeeping or otherwise as are required by the

Secretary to carry out this subsection, the person shall be

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

determined by multiplying—

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

in the violation; by

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

or sugar beets.

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

(g) FORFEITURE PENALTY.—

(1) IN GENERAL.—A penalty shall be assessed on the forfeiture of any sugar pledged as collateral for a nonrecourse loan

under this section.

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

1 cent per pound.

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

the same relation to the penalty for cane sugar as the marketing

assessment for sugar beets bears to the marketing assessment

for sugarcane.

(4) EFFECT OF FORFEITURE.—Any payments owed producers

by a processor that forfeits any sugar pledged as collateral

for a nonrecourse loan shall be reduced in proportion to the

loan forfeiture penalty incurred by the processor.

(h) INFORMATION REPORTING.—

(1) DUTY OF PROCESSORS AND REFINERS TO REPORT.—A

sugarcane processor, cane sugar refiner, and sugar beet processor shall furnish the Secretary, on a monthly basis, such

information as the Secretary may require to administer sugar

programs, including the quantity of purchases of sugarcane,

sugar beets, and sugar, and production, importation, distribution, and stock levels of sugar.

(2) PENALTY.—Any person willfully failing or refusing to

furnish the information, or furnishing willfully any false

information, shall be subject to a civil penalty of not more

than $10,000 for each such violation.

(3) MONTHLY REPORTS.—Taking into consideration the

information received under paragraph (1), the Secretary shall
110 STAT. 934 PUBLIC LAW 104–127—APR. 4, 1996

publish on a monthly basis composite data on production,

imports, distribution, and stock levels of sugar.

(i) CROPS.—This section (other than subsection (f)) shall be

effective only for the 1996 through 2002 crops of sugar beets and

sugarcane.

Subtitle E—Administration

SEC. 161. ADMINISTRATION.

(a) USE OF COMMODITY CREDIT CORPORATION.—The Secretary

shall carry out this title through the Commodity Credit Corporation.

(b) LIMITATION ON EXPENDITURE OF COMMODITY CREDIT CORPORATION FUNDS.—

(1) GENERAL POWERS AND RESPONSIBILITIES.—Section 4 of

the Commodity Credit Corporation Charter Act (15 U.S.C. 714b)

is amended—

(A) in the first sentence of subsection (g), by inserting

before the period the following: ‘‘, except that obligations

under all such contracts or agreements (other than

reimbursable agreements under section 11) for equipment

or services relating to automated data processing, information technologies, or related items (including telecommunications equipment and computer hardware and software)

may not exceed $170,000,000 in fiscal year 1996 and not

more than $275,000,000 in the 6-fiscal year period beginning on October 1, 1996, unless additional amounts for

such contracts and agreements are provided in advance

in appropriation Acts’’; and

(B) in subsection (h), by striking ‘‘shall have power

to acquire personal property necessary to the conduct of

its business but’’.

(2) REIMBURSABLE AGREEMENTS.—Section 11 of the

Commodity Credit Corporation Charter Act (15 U.S.C. 714i)

is amended by adding at the end the following: ‘‘After September 30, 1996, the total amount of all allotments and fund

transfers from the Corporation under this section (including

allotments and transfers for automated data processing or

information resource management activities) for a fiscal year

may not exceed the total amount of the allotments and transfers

made under this section in fiscal year 1995.’’.

(3) REPORTING REQUIREMENTS.—Section 13 of the Commodity Credit Corporation Charter Act (15 U.S.C. 714k) is amended

by adding at the end the following: ‘‘In addition to the annual

report, the Corporation shall submit to Congress on a quarterly

basis an itemized report of all expenditures over $10,000 made

under section 5 or 11 during the period covered by the report,

including expenditures in the form of allotments or fund transfers to other agencies and departments of the Federal Government.’’.

(c) DETERMINATIONS BY SECRETARY.—A determination made

by the Secretary under this title shall be final and conclusive.

(d) REGULATIONS.—Not later than 90 days after the date of

enactment of this title, the Secretary and the Commodity Credit

Corporation, as appropriate, shall issue such regulations as are

necessary to implement this title. The issuance of the regulations

shall be made without regard to—

7 USC 7281.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 935

(1) the notice and comment provisions of section 553 of

title 5, United States Code;

(2) the Statement of Policy of the Secretary of Agriculture

effective July 24, 1971 (36 Fed. Reg. 13804) relating to notices

of proposed rulemaking and public participation in rulemaking;

and

(3) chapter 35 of title 44, United States Code (commonly

know as the ‘‘Paperwork Reduction Act’’).

SEC. 162. ADJUSTMENTS OF LOANS.

(a) ADJUSTMENT AUTHORITY.—The Secretary may make appropriate adjustments in the loan rates for any commodity for differences in grade, type, quality, location, and other factors.

(b) MANNER OF ADJUSTMENT.—The adjustments under the

authority of this section shall, to the maximum extent practicable,

be made in such manner that the average loan level for the commodity will, on the basis of the anticipated incidence of the factors,

be equal to the level of support determined as provided in this

title.

(c) ADJUSTMENT ON COUNTY BASIS.—The Secretary may establish loan rates for a crop for producers in individual counties in

a manner that results in the lowest such rate being 95 percent

of the national average loan rate, except that such action shall

not result in an increase in outlays. Adjustments under this subsection shall not result in an increase in the national average

loan rate for any year.

SEC. 163. COMMODITY CREDIT CORPORATION INTEREST RATE.

Notwithstanding any other provision of law, the monthly

Commodity Credit Corporation interest rate applicable to loans

provided for agricultural commodities by the Corporation shall be

100 basis points greater than the rate determined under the

applicable interest rate formula in effect on October 1, 1995.

SEC. 164. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.

(a) IN GENERAL.—Except as provided in subsection (b), no producer shall be personally liable for any deficiency arising from

the sale of the collateral securing any nonrecourse loan made under

this title unless the loan was obtained through a fraudulent representation by the producer.

(b) LIMITATIONS.—Subsection (a) shall not prevent the Commodity Credit Corporation or the Secretary from requiring a producer

to assume liability for—

(1) a deficiency in the grade, quality, or quantity of a

commodity stored on a farm or delivered by the producer;

(2) a failure to properly care for and preserve a commodity;

or

(3) a failure or refusal to deliver a commodity in accordance

with a program established under this title.

(c) ACQUISITION OF COLLATERAL.—In the case of a nonrecourse

loan made under this title or the Commodity Credit Corporation

Charter Act (15 U.S.C. 714 et seq.), if the Commodity Credit Corporation acquires title to the unredeemed collateral, the Corporation

shall be under no obligation to pay for any market value that

the collateral may have in excess of the loan indebtedness.

(d) SUGARCANE AND SUGAR BEETS.—A security interest obtained

by the Commodity Credit Corporation as a result of the execution

of a security agreement by the processor of sugarcane or sugar

7 USC 7284.

7 USC 7283.

7 USC 7282.
110 STAT. 936 PUBLIC LAW 104–127—APR. 4, 1996

beets shall be superior to all statutory and common law liens

on raw cane sugar and refined beet sugar in favor of the producers

of sugarcane and sugar beets and all prior recorded and unrecorded

liens on the crops of sugarcane and sugar beets from which the

sugar was derived.

SEC. 165. COMMODITY CREDIT CORPORATION SALES PRICE RESTRICTIONS.

(a) GENERAL SALES AUTHORITY.—The Commodity Credit Corporation may sell any commodity owned or controlled by the Corporation at any price that the Secretary determines will maximize

returns to the Corporation.

(b) NONAPPLICATION OF SALES PRICE RESTRICTIONS.—Subsection (a) shall not apply to—

(1) a sale for a new or byproduct use;

(2) a sale of peanuts or oilseeds for the extraction of oil;

(3) a sale for seed or feed if the sale will not substantially

impair any loan program;

(4) a sale of a commodity that has substantially deteriorated in quality or as to which there is a danger of loss or

waste through deterioration or spoilage;

(5) a sale for the purpose of establishing a claim arising

out of a contract or against a person who has committed fraud,

misrepresentation, or other wrongful act with respect to the

commodity;

(6) a sale for export, as determined by the Corporation;

and

(7) a sale for other than a primary use.

(c) PRESIDENTIAL DISASTER AREAS.—

(1) IN GENERAL.—Notwithstanding subsection (a), on such

terms and conditions as the Secretary may consider in the

public interest, the Corporation may make available any

commodity or product owned or controlled by the Corporation

for use in relieving distress—

(A) in any area in the United States (including the

Virgin Islands) declared by the President to be an acute

distress area because of unemployment or other economic

cause, if the President finds that the use will not displace

or interfere with normal marketing of agricultural commodities; and

(B) in connection with any major disaster determined

by the President to warrant assistance by the Federal

Government under the Robert T. Stafford Disaster Relief

and Emergency Assistance Act (42 U.S.C. 5121 et seq.).

(2) COSTS.—Except on a reimbursable basis, the Corporation shall not bear any costs in connection with making a

commodity available under paragraph (1) beyond the cost of

the commodity to the Corporation incurred in—

(A) the storage of the commodity; and

(B) the handling and transportation costs in making

delivery of the commodity to designated agencies at 1 or

more central locations in each State or other area.

(d) EFFICIENT OPERATIONS.—Subsection (a) shall not apply to

the sale of a commodity the disposition of which is desirable in

the interest of the effective and efficient conduct of the operations

of the Corporation because of the small quantity of the commodity

7 USC 7285.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 937

involved, or because of the age, location, or questionable continued

storability of the commodity.

Subtitle F—Permanent Price Support

Authority

SEC. 171. SUSPENSION AND REPEAL OF PERMANENT PRICE SUPPORT

AUTHORITY.

(a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—

(1) SUSPENSIONS.—The following provisions of the Agricultural Adjustment Act of 1938 shall not be applicable to the

1996 through 2002 crops of loan commodities, peanuts, and

sugar and shall not be applicable to milk during the period

beginning on the date of enactment of this title and ending

on December 31, 2002:

(A) Parts II through V of subtitle B of title III (7

U.S.C. 1326–1351).

(B) Subsections (a) through (j) of section 358 (7 U.S.C.

1358).

(C) Subsections (a) through (h) of section 358a (7 U.S.C.

1358a).

(D) Subsections (a), (b), (d), and (e) of section 358d

(7 U.S.C. 1359).

(E) Part VII of subtitle B of title III (7 U.S.C. 1359aa–

1359jj).

(F) In the case of peanuts, part I of subtitle C of

title III (7 U.S.C. 1361–1368).

(G) In the case of upland cotton, section 377 (7 U.S.C.

1377).

(H) Subtitle D of title III (7 U.S.C. 1379a–1379j).

(I) Title IV (7 U.S.C. 1401–1407).

(2) REPORTS AND RECORDS.—Effective only for the 1996

through 2002 crops of peanuts, the first sentence of section

373(a) of the Agricultural Adjustment Act of 1938 (7 U.S.C.

1373(a)) is amended by inserting before ‘‘all brokers and dealers

in peanuts’’ the following: ‘‘all producers engaged in the production of peanuts,’’.

(b) AGRICULTURAL ACT OF 1949.—

(1) SUSPENSIONS.—The following provisions of the Agricultural Act of 1949 shall not be applicable to the 1996 through

2002 crops of loan commodities, peanuts, and sugar and shall

not be applicable to milk during the period beginning on the

date of enactment of this title and ending on December 31,

2002:

(A) Section 101 (7 U.S.C. 1441).

(B) Section 103(a) (7 U.S.C. 1444(a)).

(C) Section 105 (7 U.S.C. 1444b).

(D) Section 107 (7 U.S.C. 1445a).

(E) Section 110 (7 U.S.C. 1445e).

(F) Section 112 (7 U.S.C. 1445g).

(G) Section 115 (7 U.S.C. 1445k).

(H) Section 201 (7 U.S.C. 1446).

(I) Title III (7 U.S.C. 1447–1449).

(J) Title IV (7 U.S.C. 1421–1433d), other than sections

404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).

(K) Title V (7 U.S.C. 1461–1469).

Effective date.

7 USC 7301.
110 STAT. 938 PUBLIC LAW 104–127—APR. 4, 1996

(L) Title VI (7 U.S.C. 1471–1471j).

(2) REPEALS.—The following provisions of the Agricultural

Act of 1949 are repealed:

(A) Section 101B (7 U.S.C. 1441–2).

(B) Section 103B (7 U.S.C. 1444–2).

(C) Section 105B (7 U.S.C. 1444f).

(D) Section 107B (7 U.S.C. 1445–3a).

(E) Section 108B (7 U.S.C. 1445c–3).

(F) Section 113 (7 U.S.C. 1445h).

(G) Subsections (b) and (c) of section 114 (7 U.S.C.

1445j).

(H) Sections 205, 206, and 207 (7 U.S.C. 1446f, 1446g,

and 1446h).

(I) Sections 406 and 427 (7 U.S.C. 1426 and 1433f).

(3) POTENTIAL PRICE SUPPORT FOR RICE.—Section 101 of

the Agricultural Act of 1949 (7 U.S.C. 1441), as suspended

by paragraph (1), is amended by adding after subsection (d)

the following:

‘‘(e) RICE.—The Secretary shall make available to producers

of each crop of rice on a farm price support at a level that is

not less than 50 percent, or more than 90 percent of the parity

price for rice as the Secretary determines will not result in increasing stocks of rice to the Commodity Credit Corporation.’’.

(c) SUSPENSION OF CERTAIN QUOTA PROVISIONS.—The joint resolution entitled ‘‘A joint resolution relating to corn and wheat marketing quotas under the Agricultural Adjustment Act of 1938, as

amended’’, approved May 26, 1941 (7 U.S.C. 1330 and 1340), shall

not be applicable to the crops of wheat planted for harvest in

the calendar years 1996 through 2002.

SEC. 172. EFFECT OF AMENDMENTS.

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

provided in this title and notwithstanding any other provision of

law, this title and the amendments made by this title shall not

affect the authority of the Secretary to carry out a price support

or production adjustment program for any of the 1991 through

1995 crops of an agricultural commodity established under a provision of law in effect immediately before the date of enactment

of this title.

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

by this title shall not affect the liability of any person under

any provision of law as in effect before the date of enactment

of this title.

Subtitle G—Commission on 21st Century

Production Agriculture

SEC. 181. ESTABLISHMENT.

There is established a commission to be known as the ‘‘Commission on 21st Century Production Agriculture’’ (in this subtitle

referred to as the ‘‘Commission’’).

SEC. 182. COMPOSITION.

(a) MEMBERSHIP AND APPOINTMENT.—The Commission shall

be composed of 11 members, appointed as follows:

President. (1) Three members shall be appointed by the President.

7 USC 7312.

7 USC 7311.

7 USC 7302.

7 USC 1445b–3a.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 939

(2) Four members shall be appointed by the Chairman

of the Committee on Agriculture of the House of Representatives in consultation with the ranking minority member of

the Committee.

(3) Four members shall be appointed by the Chairman

of the Committee on Agriculture, Nutrition, and Forestry of

the Senate in consultation with the ranking minority member

of the Committee.

(b) QUALIFICATIONS.—At least 1 of the members appointed

under each of paragraphs (1), (2), and (3) of subsection (a) shall

be an individual who is primarily involved in production agriculture.

All other members of the Commission shall be appointed from

among individuals having knowledge and experience in agricultural

production, marketing, finance, or trade.

(c) TERM OF MEMBERS; VACANCIES.—A member of the Commission shall be appointed for the life of the Commission. A vacancy

on the Commission shall not affect its powers, but shall be filled

in the same manner as the original appointment was made.

(d) TIME FOR APPOINTMENT; FIRST MEETING.—The members

of the Commission shall be appointed not later than October 1,

1997. The Commission shall convene its first meeting to carry

out its duties under this subtitle 30 days after 6 members of

the Commission have been appointed.

(e) CHAIRPERSON.—The chairperson of the Commission shall

be designated jointly by the Chairman of the Committee on Agriculture of the House of Representatives and the Chairman of the

Committee on Agriculture, Nutrition, and Forestry of the Senate

from among the members of the Commission.

SEC. 183. COMPREHENSIVE REVIEW OF PAST AND FUTURE OF

PRODUCTION AGRICULTURE.

(a) INITIAL REVIEW.—The Commission shall conduct a comprehensive review of changes in the condition of production agriculture in the United States since the date of enactment of this

title and the extent to which the changes are the result of this

title and the amendments made by this title. The review shall

include the following:

(1) An assessment of the initial success of production flexibility contracts in supporting the economic viability of farming

in the United States.

(2) An assessment of economic risks to farms delineated

by size of farm operation (such as small, medium, or large

farms) and region of production.

(3) An assessment of the food security situation in the

United States in the areas of trade, consumer prices, international competitiveness of United States production agriculture, food supplies, and humanitarian relief.

(4) An assessment of the changes in farmland values and

agricultural producer incomes since the date of enactment of

this title.

(5) An assessment of the extent to which regulatory relief

for agricultural producers has been enacted and implemented,

including the application of cost/benefit principles in the issuance of agricultural regulations.

(6) An assessment of the extent to which tax relief for

agricultural producers has been enacted in the form of capital

7 USC 7313.
110 STAT. 940 PUBLIC LAW 104–127—APR. 4, 1996

gains tax reductions, estate tax exemptions, and mechanisms

to average tax loads over high- and low-income years.

(7) An assessment of the effect of any Federal Government

interference in agricultural export markets, such as the imposition of trade embargoes, and the degree of implementation

and success of international trade agreements and United

States export programs.

(8) An assessment of the likely effect of the sale, lease,

or transfer of farm poundage quota for peanuts across State

lines.

(b) SUBSEQUENT REVIEW.—The Commission shall conduct a

comprehensive review of the future of production agriculture in

the United States and the appropriate role of the Federal Government in support of production agriculture. The review shall include

the following:

(1) An assessment of changes in the condition of production

agriculture in the United States since the initial review conducted under subsection (a).

(2) Identification of the appropriate future relationship of

the Federal Government with production agriculture after 2002.

(3) An assessment of the personnel and infrastructure

requirements of the Department of Agriculture necessary to

support the future relationship of the Federal Government

with production agriculture.

(4) An assessment of economic risks to farms delineated

by size of farm operation (such as small, medium, or large

farms) and region of production.

(c) RECOMMENDATIONS.—In carrying out the subsequent review

under subsection (b), the Commission shall develop specific recommendations for legislation to achieve the appropriate future relationship of the Federal Government with production agriculture

identified under subsection (a)(2).

SEC. 184. REPORTS.

(a) REPORT ON INITIAL REVIEW.—Not later than June 1, 1998,

the Commission shall submit to the President, the Committee on

Agriculture of the House of Representatives, and the Committee

on Agriculture, Nutrition, and Forestry of the Senate a report

containing the results of the initial review conducted under section

183(a).

(b) REPORT ON SUBSEQUENT REVIEW.—Not later than January

1, 2001, the Commission shall submit to the President and the

congressional committees specified in subsection (a) a report

containing the results of the subsequent review conducted under

section 183(b).

SEC. 185. POWERS.

(a) HEARINGS.—The Commission may, for the purpose of carrying out this subtitle, conduct such hearings, sit and act at such

times, take such testimony, and receive such evidence, as the

Commission considers appropriate.

(b) ASSISTANCE FROM OTHER AGENCIES.—The Commission may

secure directly from any department or agency of the Federal

Government such information as may be necessary for the Commission to carry out its duties under this subtitle. On the request

of the chairperson of the Commission, the head of the department

or agency shall, to the extent permitted by law, furnish such

information to the Commission.

7 USC 7315.

7 USC 7314.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 941

(c) MAIL.—The Commission may use the United States mails

in the same manner and under the same conditions as the departments and agencies of the Federal Government.

(d) ASSISTANCE FROM SECRETARY.—The Secretary shall provide

to the Commission appropriate office space and such reasonable

administrative and support services as the Commission may

request.

SEC. 186. COMMISSION PROCEDURES.

(a) MEETINGS.—The Commission shall meet on a regular basis

(as determined by the chairperson) and at the call of the chairperson

or a majority of its members.

(b) QUORUM.—A majority of the members of the Commission

shall constitute a quorum for the transaction of business.

SEC. 187. PERSONNEL MATTERS.

(a) COMPENSATION.—Each member of the Commission shall

serve without compensation, but shall be allowed travel expenses

including per diem in lieu of subsistence, as authorized by section

5703 of title 5, United States Code, when engaged in the performance of Commission duties.

(b) STAFF.— (1) APPOINTMENT.—The Commission shall appoint a staff

director, who shall be paid at a rate not to exceed the maximum

rate of basic pay under section 5376 of title 5, United States

Code, and such professional and clerical personnel as may

be reasonable and necessary to enable the Commission to carry

out its duties under this subtitle without regard to the provisions of title 5, United States Code, governing appointments

in the competitive service, and without regard to the provisions

of chapter 51 and subchapter III of chapter 53 of such title,

or any other provision of law, relating to the number, classification, and General Schedule rates.

(2) LIMITATION ON COMPENSATION.—No employee appointed

under this subsection (other than the staff director) may be

compensated at a rate to exceed the maximum rate applicable

to level GS–15 of the General Schedule.

(c) DETAILED PERSONNEL.—On the request of the chairperson

of the Commission, the head of any department or agency of the

Federal Government is authorized to detail, without reimbursement,

any personnel of the department or agency to the Commission

to assist the Commission in carrying out its duties under this

section. The detail of any individual may not result in the interruption or loss of civil service status or other privilege of the individual.

SEC. 188. TERMINATION OF COMMISSION.

The Commission shall terminate on submission of the final

report required by section 184.

Subtitle H—Miscellaneous Commodity

Provisions

SEC. 191. OPTIONS PILOT PROGRAM.

(a) PILOT PROGRAMS AUTHORIZED.—Until December 31, 2002,

the Secretary of Agriculture may conduct a pilot program for 1

or more agricultural commodities supported under this title to

7 USC 7331.

7 USC 7318.

7 USC 7317.

7 USC 7316.
110 STAT. 942 PUBLIC LAW 104–127—APR. 4, 1996

ascertain whether futures and options contracts can provide producers with reasonable protection from the financial risks of fluctuations in price, yield, and income inherent in the production and

marketing of the commodities. The pilot program shall be an alternative to other related programs of the Department of Agriculture.

(b) DISTRIBUTION OF PILOT PROGRAM.—For each agricultural

commodity included in the pilot program, the Secretary may operate

the pilot program in not more than 100 counties, except that not

more than 6 of the counties may be located in any 1 State. The

pilot program for a commodity shall not be operated in any county

for more than 3 of the 1996 through 2002 calendar years.

(c) ELIGIBLE PARTICIPANTS.—In operating the pilot program,

the Secretary may enter into contract with a producer who—

(1) is eligible for a production flexibility contract, a marketing assistance loan, or other assistance under this title;

(2) volunteers to participate in the pilot program;

(3) operates a farm located in a county selected for the

pilot program; and

(4) meets such other eligibility requirements as the Secretary may establish.

(d) NOTICE TO PRODUCERS.—The Secretary shall provide notice

to each producer participating in the pilot program that—

(1) the participation of the producer is voluntary; and

(2) neither the United States, the Commodity Credit Corporation, the Federal Crop Insurance Corporation, the Department of Agriculture, nor any other Federal agency is authorized

to guarantee that participants in the pilot program will be

better or worse off financially as a result of participation in

the pilot program than the producer would have been if the

producer had not participated in the pilot program.

(e) CONTRACTS.—The Secretary shall set forth in each contract

under the pilot program the terms and conditions for participation

in the pilot program and the notice required by subsection (d).

(f) ELIGIBLE MARKETS.—Trades for futures and options contracts under the pilot program shall be carried out on commodity

futures and options markets designated as contract markets under

the Commodity Exchange Act (7 U.S.C. 1 et seq.).

(g) RECORDKEEPING.—A producer participating in the pilot program shall compile, maintain, and submit (or authorize the compilation, maintenance, and submission) of such documentation as the

regulations governing the pilot program require.

(h) USE OF COMMODITY CREDIT CORPORATION.—The Secretary

shall fund and operate the pilot program through the Commodity

Credit Corporation. To the maximum extent practicable, the Secretary shall operate the pilot program in a budget neutral manner.

(i) CONFORMING REPEAL.—The Options Pilot Program Act of

1990 (subtitle E of title XI of Public Law 101–624; 7 U.S.C. 1421

note) is repealed.

SEC. 192. RISK MANAGEMENT EDUCATION.

In consultation with the Commodity Futures Trading Commission, the Secretary shall provide such education in management

of the financial risks inherent in the production and marketing

of agricultural commodities as the Secretary considers appropriate.

As part of such educational activities, the Secretary may develop

and implement programs to facilitate the participation of agricultural producers in commodity futures trading programs, forward

7 USC 7332.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 943

contracting options, and insurance protection programs by assisting

and training producers in the usage of such programs. In

implementing this authority, the Secretary may use existing

research and extension authorities and resources of the Department

of Agriculture.

SEC. 193. CROP INSURANCE.

(a) CATASTROPHIC RISK PROTECTION.—

(1) SINGLE DELIVERY.—Section 508(b)(4) of the Federal Crop

Insurance Act (7 U.S.C. 1508(b)(4)) is amended by adding at

the end the following:

‘‘(C) DELIVERY OF COVERAGE.—

‘‘(i) IN GENERAL.—In full consultation with

approved insurance providers, the Secretary may continue to offer catastrophic risk protection in a State

(or a portion of a State) through local offices of the

Department if the Secretary determines that there is

an insufficient number of approved insurance providers

operating in the State or portion of the State to adequately provide catastrophic risk protection coverage

to producers.

‘‘(ii) COVERAGE BY APPROVED INSURANCE PROVIDERS.—To the extent that catastrophic risk protection

coverage by approved insurance providers is sufficiently available in a State (or a portion of a State)

as determined by the Secretary, only approved insurance providers may provide the coverage in the State

or portion of the State.

‘‘(iii) TIMING OF DETERMINATIONS.—Not later than

90 days after the date of enactment of this subparagraph, the Secretary shall announce the results of the

determinations under clause (i) for policies for the 1997

crop year. For subsequent crop years, the Secretary

shall make the announcement not later than April

30 of the year preceding the year in which the crop

will be produced, or at such other times during the

year as the Secretary finds practicable in consultation

with affected crop insurance providers for those States

(or portions of States) in which catastrophic coverage

remains available through local offices of the Department.

‘‘(iv) CURRENT POLICIES.—This clause shall take

effect beginning with the 1997 crop year. Subject to

clause (ii) all catastrophic risk protection policies written by local offices of the Department shall be transferred to the approved insurance provider for performance of all sales, service, and loss adjustment functions.

Any fees in connection with such policies that are

not yet collected at the time of the transfer shall be

payable to the approved insurance providers assuming

the policies. The transfer process for policies for the

1997 crop year with sales closing dates before January

1, 1997, shall begin at the time of the Secretary’s

announcement under clause (iii) and be completed by

the sales closing date for the crop and county. The

transfer process for all subsequent policies (including

policies for the 1998 and subsequent crop years) shall

Effective date.

Announcement.
110 STAT. 944 PUBLIC LAW 104–127—APR. 4, 1996

begin at a date that permits the process to be completed not later than 45 days before the sales closing

date.’’.

(2) WAIVER OF MANDATORY LINKAGE.—Section 508(b)(7) of

the Federal Crop Insurance Act (7 U.S.C. 1508(b)(7)) is amended by striking subparagraph (A) and inserting the following:

‘‘(A) IN GENERAL.—Effective for the spring-planted 1996

and subsequent crops (and fall-planted 1996 crops at the

option of the Secretary), to be eligible for any payment

or loan under the Agricultural Market Transition Act, for

the conservation reserve program, or for any benefit

described in section 371 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 2008f), a person shall—

‘‘(i) obtain at least the catastrophic level of insurance for each crop of economic significance in which

the person has an interest; or

‘‘(ii) provide a written waiver to the Secretary that

waives any eligibility for emergency crop loss assistance in connection with the crop.’’.

(3) SPECIAL RULE FOR 1996.—

(A) EFFECTIVE PERIOD.—This paragraph shall apply

only to the 1996 crop year.

(B) AVAILABILITY.—During a period of not less than

2 weeks, but not more than 4 weeks, beginning on the

date of enactment of this title, the Secretary shall provide

producers with an opportunity to obtain catastrophic risk

protection insurance under section 508(b) of the Federal

Crop Insurance Act (7 U.S.C. 1508(b)) for a spring-planted

crop, and limited additional coverage for malting barley

under the Malting Barley Price and Quality Endorsement.

The Federal Crop Insurance Corporation may attach such

limitations and restrictions on obtaining insurance during

this period as the Corporation considers necessary to maintain the actuarial soundness of the crop insurance program.

(C) ATTACHMENT.—Insurance coverage under any policy obtained under this paragraph during the extended

sales period shall not attach until 10 days after the application.

(D) CANCELLATION.—During the extended period, a

producer may cancel a catastrophic risk protection policy

if—

(i) the policy is a continuation of a policy that

was obtained for a previous crop year; and

(ii) the cancellation request is made before the

acreage reporting date for the policy for the 1996 crop

year.

(b) CROP INSURANCE PILOT PROJECT.—

(1) COVERAGE.—The Secretary of Agriculture shall develop

and administer a pilot project for crop insurance coverage that

indemnifies crop losses due to a natural disaster such as insect

infestation or disease.

(2) ACTUARIAL SOUNDNESS.—A pilot project under this paragraph shall be actuarially sound, as determined by the Secretary and administered at no net cost.

(3) DURATION.—A pilot project under this paragraph shall

be of two years’ duration.

7 USC 1508 note.

7 USC 1508 note.

Effective date.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 945

(c) CROP INSURANCE FOR NURSERY CROPS.—Section 508(a)(6)

of the Federal Crop Insurance Act (7 U.S.C. 1508(a)(6)) is amended

by adding at the end the following:

‘‘(D) ADDITION OF NURSERY CROPS.—Not later than 2

years after the date of enactment of this subparagraph,

the Corporation shall conduct a study and limited pilot

program on the feasibility of insuring nursery crops.’’.

(d) MARKETING WINDOWS.—Section 508(j) of the Federal Crop

Insurance Act (7 U.S.C. 1508(j)) is amended by adding at the

end the following:

‘‘(4) MARKETING WINDOWS.—The Corporation shall consider

marketing windows in determining whether it is feasible to

require planting during a crop year.’’.

(e) FUNDING.—

(1) MANDATORY EXPENSES.—Section 516(a)(2) of the Federal

Crop Insurance Act (7 U.S.C. 1516(a)(2)) is amended—

(A) by inserting ‘‘and’’ at the end of subparagraph

(A);

(B) by striking ‘‘; and’’ at the end of subparagraph

(B) and inserting a period; and

(C) by striking subparagraph (C).

(2) FUNDING OF SALES COMMISSIONS.—Section 516(b) of the

Federal Crop Insurance Act (7 U.S.C. 1516(b)) is amended—

(A) in paragraph (1)—

(i) by striking ‘‘(A) IN GENERAL’’ and all that follows

through ‘‘subparagraph (B), in’’ and inserting ‘‘In’’; and

(ii) by striking subparagraph (B); and

(B) in paragraph (2)(B), by striking ‘‘subject to paragraph (1)(B),’’.

(3) OTHER EXPENSES.—Section 516(b)(2)(A) of the Federal

Crop Insurance Act (7 U.S.C. 1516(b)(2)(A)) is amended by

striking ‘‘, noninsured assistance benefits,’’.

(f) LIMITATION ON MULTIPLE BENEFITS FOR SAME LOSS.—Section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) is

amended by adding at the end the following:

‘‘(n) LIMITATION ON MULTIPLE BENEFITS FOR SAME LOSS.—

If a producer who is eligible to receive benefits under catastrophic

risk protection under subsection (b) is also eligible to receive assistance for the same loss under any other program administered

by the Secretary, the producer shall be required to elect whether

to receive benefits under this title or under the other program,

but not both. A producer who purchases additional coverage under

subsection (c) may also receive assistance for the same loss under

other programs administered by the Secretary, except that the

amount received for the loss under the additional coverage together

with the amount received under the other programs may not exceed

the amount of the actual loss of the producer.’’.

SEC. 194. ESTABLISHMENT OF OFFICE OF RISK MANAGEMENT.

(a) ESTABLISHMENT.—The Department of Agriculture Reorganization Act of 1994 is amended by inserting after section 226

(7 U.S.C. 6932) the following new section:

‘‘SEC. 226A. OFFICE OF RISK MANAGEMENT.

‘‘(a) ESTABLISHMENT.—Subject to subsection (e), the Secretary

shall establish and maintain in the Department an independent

Office of Risk Management.

7 USC 6933.
110 STAT. 946 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(b) FUNCTIONS OF THE OFFICE OF RISK MANAGEMENT.—The

Office of Risk Management shall have jurisdiction over the following

functions:

‘‘(1) Supervision of the Federal Crop Insurance Corporation.

‘‘(2) Administration and oversight of all aspects, including

delivery through local offices of the Department, of all programs

authorized under the Federal Crop Insurance Act (7 U.S.C.

1501 et seq.).

‘‘(3) Any pilot or other programs involving revenue insurance, risk management savings accounts, or the use of the

futures market to manage risk and support farm income that

may be established under the Federal Crop Insurance Act or

other law.

‘‘(4) Such other functions as the Secretary considers appropriate.

‘‘(c) ADMINISTRATOR.—

‘‘(1) APPOINTMENT.—The Office of Risk Management shall

be headed by an Administrator who shall be appointed by

the Secretary.

‘‘(2) MANAGER.—The Administrator of the Office of Risk

Management shall also serve as Manager of the Federal Crop

Insurance Corporation.

‘‘(d) RESOURCES.—

‘‘(1) FUNCTIONAL COORDINATION.—Certain functions of the

Office of Risk Management, such as human resources, public

affairs, and legislative affairs, may be provided by a consolidation of such functions under the Under Secretary of Agriculture

for Farm and Foreign Agricultural Services.

‘‘(2) MINIMUM PROVISIONS.—Notwithstanding paragraph (1)

or any other provision of law or order of the Secretary, the

Secretary shall provide the Office of Risk Management with

human and capital resources sufficient for the Office to carry

out its functions in a timely and efficient manner.’’.

(b) FISCAL YEAR 1996 FUNDING.—From funds appropriated for

the salaries and expenses of the Consolidated Farm Service Agency

in the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1996 (Public Law

104–37), the Secretary of Agriculture may use such sums as necessary for the salaries and expenses of the Office of Risk Management established under subsection (a).

(c) CONFORMING AMENDMENT.—Section 226(b) of the Act (7

U.S.C. 6932(b)) is amended by striking paragraph (2).

SEC. 195. REVENUE INSURANCE.

Section 508(h) of the Federal Crop Insurance Act (7 U.S.C.

1508(h)) is amended by adding at the end the following:

‘‘(9) REVENUE INSURANCE PILOT PROGRAM.—

‘‘(A) IN GENERAL.—Not later than December 31, 1996,

the Secretary shall carry out a pilot program in a limited

number of counties, as determined by the Secretary, for

crop years 1997, 1998, 1999, and 2000, under which a

producer of wheat, feed grains, soybeans, or such other

commodity as the Secretary considers appropriate may elect

to receive insurance against loss of revenue, as determined

by the Secretary.

‘‘(B) ADMINISTRATION.—Revenue insurance under this

paragraph shall—
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 947

‘‘(i) be offered through reinsurance arrangements

with private insurance companies;

‘‘(ii) offer at least a minimum level of coverage

that is an alternative to catastrophic crop insurance;

‘‘(iii) be actuarially sound; and

‘‘(iv) require the payment of premiums and

administrative fees by an insured producer.’’.

SEC. 196. ADMINISTRATION AND OPERATION OF NONINSURED CROP

ASSISTANCE PROGRAM.

(a) OPERATION AND ADMINISTRATION OF PROGRAM.—

(1) IN GENERAL.—In the case of an eligible crop described

in paragraph (2), the Secretary of Agriculture shall operate

a noninsured crop disaster assistance program to provide coverage equivalent to the catastrophic risk protection otherwise

available under section 508(b) of the Federal Crop Insurance

Act (7 U.S.C. 1508(b)). The Secretary shall carry out this section

through the Consolidated Farm Service Agency (in this section

referred to as the ‘‘Agency’’).

(2) ELIGIBLE CROPS.—

(A) IN GENERAL.—In this section, the term ‘‘eligible

crop’’ means each commercial crop or other agricultural

commodity (except livestock)—

(i) for which catastrophic risk protection under

section 508(b) of the Federal Crop Insurance Act (7

U.S.C. 1508(b)) is not available; and

(ii) that is produced for food or fiber.

(B) CROPS SPECIFICALLY INCLUDED.—The term ‘‘eligible

crop’’ shall include floricultural, ornamental nursery, and

Christmas tree crops, turfgrass sod, seed crops, aquaculture

(including ornamental fish), and industrial crops.

(3) CAUSE OF LOSS.—To qualify for assistance under this

section, the losses of the noninsured commodity shall be due

to drought, flood, or other natural disaster, as determined by

the Secretary.

(b) APPLICATION FOR NONINSURED CROP DISASTER ASSISTANCE.—

(1) TIMELY APPLICATION.—To be eligible for assistance

under this section, a producer shall submit an application for

noninsured crop disaster assistance at a local office of the

Department. The application shall be in such form, contain

such information, and be submitted at such time as the Secretary may require.

(2) RECORDS.—A producer shall provide records, as required

by the Secretary, of crop acreage, acreage yields, and production.

(3) ACREAGE REPORTS.—A producer shall provide reports

on acreage planted or prevented from being planted, as required

by the Secretary, by the designated acreage reporting date

for the crop and location as established by the Secretary.

(c) LOSS REQUIREMENTS.—

(1) REQUIRED AREA LOSS.—A producer of an eligible crop

shall not receive noninsured crop disaster assistance unless

the average yield for that crop, or an equivalent measure in

the event yield data are not available, in an area falls below

65 percent of the expected area yield, as established by the

Secretary.
110 STAT. 948 PUBLIC LAW 104–127—APR. 4, 1996

(2) PREVENTED PLANTING.—Subject to paragraph (1), the

Secretary shall make a prevented planting noninsured crop

disaster assistance payment if the producer is prevented from

planting more than 35 percent of the acreage intended for

the eligible crop because of drought, flood, or other natural

disaster, as determined by the Secretary.

(3) REDUCED YIELDS.—Subject to paragraph (1), the Secretary shall make a reduced yield noninsured crop disaster

assistance payment to a producer if the total quantity of the

eligible crop that the producer is able to harvest on any farm

is, because of drought, flood, or other natural disaster as determined by the Secretary, less than 50 percent of the expected

individual yield for the crop, as determined by the Secretary,

factored for the interest of the producer for the crop.

(d) PAYMENT.—The Secretary shall make available to a producer

eligible for noninsured assistance under this section a payment

computed by multiplying—

(1) the quantity that is less than 50 percent of the established yield for the crop; by

(2)(A) in the case of each of the 1996 through 1998 crop

years, 60 percent of the average market price for the crop

(or any comparable coverage determined by the Secretary);

or

(B) in the case of each of the 1999 and subsequent crop

years, 55 percent of the average market price for the crop

(or any comparable coverage determined by the Secretary);

by

(3) a payment rate for the type of crop (as determined

by the Secretary) that—

(A) in the case of a crop that is produced with a

significant and variable harvesting expense, reflects the

decreasing cost incurred in the production cycle for the

crop that is—

(i) harvested;

(ii) planted but not harvested; and

(iii) prevented from being planted because of

drought, flood, or other natural disaster (as determined

by the Secretary); and

(B) in the case of a crop that is not produced with

a significant and variable harvesting expense, as determined by the Secretary.

(e) YIELD DETERMINATIONS.—

(1) ESTABLISHMENT.—The Secretary shall establish farm

yields for purposes of providing noninsured crop disaster assistance under this section.

(2) ACTUAL PRODUCTION HISTORY.—The Secretary shall

determine yield coverage using the actual production history

of the producer over a period of not less than the 4 previous

consecutive crop years and not more than 10 consecutive crop

years. Subject to paragraph (3), the yield for the year in which

noninsured crop disaster assistance is sought shall be equal

to the average of the actual production history of the producer

during the period considered.

(3) ASSIGNMENT OF YIELD.—If a producer does not submit

adequate documentation of production history to determine a

crop yield under paragraph (2), the Secretary shall assign to

the producer a yield equal to not less than 65 percent of
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 949

the transitional yield of the producer (adjusted to reflect actual

production reflected in the records acceptable to the Secretary

for continuous years), as specified in regulations issued by

the Secretary based on production history requirements.

(4) PROHIBITION ON ASSIGNED YIELDS IN CERTAIN COUNTIES.—

(A) IN GENERAL.—

(i) DOCUMENTATION.—If sufficient data are available to demonstrate that the acreage of a crop in

a county for the crop year has increased by more

than 100 percent over any year in the preceding 7

crop years or, if data are not available, if the acreage

of the crop in the county has increased significantly

from the previous crop years, a producer must provide

such detailed documentation of production costs, acres

planted, and yield for the crop year for which benefits

are being claimed as is required by the Secretary.

If the Secretary determines that the documentation

provided is not sufficient, the Secretary may require

documenting proof that the crop, had the crop been

harvested, could have been marketed at a reasonable

price.

(ii) PROHIBITION.—Except as provided in subparagraph (B), a producer who produces a crop on a farm

located in a county described in clause (i) may not

obtain an assigned yield.

(B) EXCEPTION.—A crop or a producer shall not be

subject to this subsection if—

(i) the planted acreage of the producer for the

crop has been inspected by a third party acceptable

to the Secretary; or

(ii)(I) the County Executive Director and the State

Executive Director recommend an exemption from the

requirement to the Administrator of the Agency; and

(II) the Administrator approves the recommendation.

(5) LIMITATION ON RECEIPT OF SUBSEQUENT ASSIGNED

YIELD.—A producer who receives an assigned yield for the current year of a natural disaster because required production

records were not submitted to the local office of the Department

shall not be eligible for an assigned yield for the year of the

next natural disaster unless the required production records

of the previous 1 or more years (as applicable) are provided

to the local office.

(6) YIELD VARIATIONS DUE TO DIFFERENT FARMING PRACTICES.—The Secretary shall ensure that noninsured crop disaster assistance accurately reflects significant yield variations

due to different farming practices, such as between irrigated

and nonirrigated acreage.

(f) CONTRACT PAYMENTS.—A producer who has received a

guaranteed payment for production, as opposed to delivery, of a

crop pursuant to a contract shall have the production of the producer adjusted upward by the amount of the production equal

to the amount of the contract payment received.

(g) USE OF COMMODITY CREDIT CORPORATION.—The Secretary

may use the funds of the Commodity Credit Corporation to carry

out this section.
110 STAT. 950 PUBLIC LAW 104–127—APR. 4, 1996

(h) EXCLUSIONS.—Noninsured crop disaster assistance under

this section shall not cover losses due to—

(1) the neglect or malfeasance of the producer;

(2) the failure of the producer to reseed to the same crop

in those areas and under such circumstances where it is customary to reseed; or

(3) the failure of the producer to follow good farming practices, as determined by the Secretary.

(i) PAYMENT AND INCOME LIMITATIONS.—

(1) DEFINITIONS.—In this subsection:

(A) PERSON.—The term ‘‘person’’ has the meaning provided the term in regulations issued by the Secretary.

The regulations shall conform, to the extent practicable,

to the regulations defining the term ‘‘person’’ issued under

section 1001 of the Food Security Act of 1985 (7 U.S.C.

1308).

(B) QUALIFYING GROSS REVENUES.—The term ‘‘qualifying gross revenues’’ means—

(i) if a majority of the gross revenue of the person

is received from farming, ranching, and forestry operations, the gross revenue from the farming, ranching,

and forestry operations of the person; and

(ii) if less than a majority of the gross revenue

of the person is received from farming, ranching, and

forestry operations, the gross revenue of the person

from all sources.

(2) PAYMENT LIMITATION.—The total amount of payments

that a person shall be entitled to receive annually under this

section may not exceed $100,000.

(3) LIMITATION ON MULTIPLE BENEFITS FOR SAME LOSS.—

If a producer who is eligible to receive benefits under this

section is also eligible to receive assistance for the same loss

under any other program administered by the Secretary, the

producer shall be required to elect whether to receive benefits

under this section or under the other program, but not both.

(4) INCOME LIMITATION.—A person who has qualifying gross

revenues in excess of the amount specified in section 2266(a)

of the Food, Agriculture, Conservation, and Trade Act of 1990

(7 U.S.C. 1421 note) (as in effect on November 28, 1990) during

the taxable year (as determined by the Secretary) shall not

be eligible to receive any noninsured assistance payment under

this section.

(5) REGULATIONS.—The Secretary shall issue regulations

prescribing such rules as the Secretary determines necessary

to ensure a fair and equitable application of section 1001 of

the Food Security Act of 1985 (7 U.S.C. 1308), the general

payment limitation regulations of the Secretary, and the limitations established under this subsection.

(j) CONFORMING REPEAL.—Section 519 of the Federal Crop

Insurance Act (7 U.S.C. 1519) is repealed.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 951

TITLE II—AGRICULTURAL TRADE

Subtitle A—Amendments to Agricultural

Trade Development and Assistance Act

of 1954 and Related Statutes

SEC. 201. FOOD AID TO DEVELOPING COUNTRIES.

(a) IN GENERAL.—Section 3 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691a) is amended

to read as follows:

‘‘SEC. 3. FOOD AID TO DEVELOPING COUNTRIES.

‘‘(a) POLICY.—In light of the Uruguay Round Agreement on

Agriculture and the Ministerial Decision on Measures Concerning

the Possible Negative Effects of the Reform Program on LeastDeveloped and Net-Food Importing Developing Countries, the

United States reaffirms the commitment of the United States to

providing food aid to developing countries.

‘‘(b) SENSE OF CONGRESS.—It is the sense of Congress that—

‘‘(1) the President should initiate consultations with other

donor nations to consider appropriate levels of food aid commitments to meet the legitimate needs of developing countries;

and

‘‘(2) the United States should increase its contribution of

bona fide food assistance to developing countries consistent

with the Agreement on Agriculture.’’.

(b) CONFORMING AMENDMENT.—Section 411 of the Uruguay

Round Agreements Act is amended by striking subsection (e) (19

U.S.C. 3611).

SEC. 202. TRADE AND DEVELOPMENT ASSISTANCE.

Section 101 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1701) is amended—

(1) by striking ‘‘developing countries’’ each place it appears

and inserting ‘‘developing countries and private entities’’; and

(2) in subsection (b), by inserting ‘‘and entities’’ before

the period at the end.

SEC. 203. AGREEMENTS REGARDING ELIGIBLE COUNTRIES AND PRIVATE ENTITIES.

Section 102 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1702) is amended to read as follows:

‘‘SEC. 102. AGREEMENTS REGARDING ELIGIBLE COUNTRIES AND PRIVATE ENTITIES.

‘‘(a) PRIORITY.—In selecting agreements to be entered into under

this title, the Secretary shall give priority to agreements providing

for the export of agricultural commodities to developing countries

that—

‘‘(1) have the demonstrated potential to become commercial

markets for competitively priced United States agricultural

commodities;

‘‘(2) are undertaking measures for economic development

purposes to improve food security and agricultural development,

alleviate poverty, and promote broad-based equitable and

sustainable development; and
110 STAT. 952 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(3) demonstrate the greatest need for food.

‘‘(b) PRIVATE ENTITIES.—An agreement entered into under this

title with a private entity shall require such security, or such

other provisions as the Secretary determines necessary, to provide

reasonable and adequate assurance of repayment of the financing

extended to the private entity.

‘‘(c) AGRICULTURAL MARKET DEVELOPMENT PLAN.—

‘‘(1) DEFINITION OF AGRICULTURAL TRADE ORGANIZATION.—

In this subsection, the term ‘agricultural trade organization’

means a United States agricultural trade organization that

promotes the export and sale of a United States agricultural

commodity and that does not stand to profit directly from

the specific sale of the commodity.

‘‘(2) PLAN.—The Secretary shall consider a developing country for which an agricultural market development plan has

been approved under this subsection to have the demonstrated

potential to become a commercial market for competitively

priced United States agricultural commodities for the purpose

of granting a priority under subsection (a).

‘‘(3) REQUIREMENTS.—

‘‘(A) IN GENERAL.—To be approved by the Secretary,

an agricultural market development plan shall—

‘‘(i) be submitted by a developing country or private

entity, in conjunction with an agricultural trade

organization;

‘‘(ii) describe a project or program for the development and expansion of a commercial market for a

United States agricultural commodity in a developing

country, and the economic development of the country,

using funds derived from the sale of agricultural

commodities received under an agreement described

in section 101;

‘‘(iii) provide for any matching funds that are

required by the Secretary for the project or program;

‘‘(iv) provide for a results-oriented means of measuring the success of the project or program; and

‘‘(v) provide for graduation to the use of non-Federal funds to carry out the project or program, consistent with requirements established by the Secretary.

‘‘(B) AGRICULTURAL TRADE ORGANIZATION.—The project

or program shall be designed and carried out by the agricultural trade organization.

‘‘(C) ADDITIONAL REQUIREMENTS.—An agricultural market development plan shall contain such additional requirements as are determined necessary by the Secretary.

‘‘(4) ADMINISTRATIVE COSTS.—

‘‘(A) IN GENERAL.—The Secretary may make funds

made available to carry out this title available for the

reimbursement of administrative expenses incurred by

agricultural trade organizations in developing, implementing, and administering agricultural market development

plans, subject to such requirements and in such amounts

as the Secretary considers appropriate.

‘‘(B) DURATION.—The funds may be made available

to agricultural trade organizations for the duration of the

applicable agricultural market development plan.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 953

‘‘(C) TERMINATION.—The Secretary may terminate

assistance made available under this subsection if the agricultural trade organization is not carrying out the approved

agricultural market development plan.’’.

SEC. 204. TERMS AND CONDITIONS OF SALES.

Section 103 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1703) is amended—

(1) in subsection (a)(2)(A)—

(A) by striking ‘‘a recipient country to make’’; and

(B) by striking ‘‘such country’’ and inserting ‘‘the appropriate country’’;

(2) in subsection (c), by striking ‘‘less than 10 nor’’; and

(3) in subsection (d)—

(A) by striking ‘‘recipient country’’ and inserting ‘‘developing country or private entity’’; and

(B) by striking ‘‘7’’ and inserting ‘‘5’’.

SEC. 205. USE OF LOCAL CURRENCY PAYMENT.

Section 104 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1704) is amended—

(1) in subsection (a), by striking ‘‘recipient country’’ and

inserting ‘‘developing country or private entity’’; and

(2) in subsection (c)—

(A) by striking ‘‘recipient country’’ each place it appears

and inserting ‘‘appropriate developing country’’; and

(B) in paragraph (3), by striking ‘‘recipient countries’’

and inserting ‘‘appropriate developing countries’’.

SEC. 206. VALUE-ADDED FOODS.

Section 105 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1705) is repealed.

SEC. 207. ELIGIBLE ORGANIZATIONS.

(a) IN GENERAL.—Section 202 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1722) is amended—

(1) by striking subsection (b) and inserting the following:

‘‘(b) NONEMERGENCY ASSISTANCE.—

‘‘(1) IN GENERAL.—The Administrator may provide agricultural commodities for nonemergency assistance under this title

through eligible organizations (as described in subsection (d))

that have entered into an agreement with the Administrator

to use the commodities in accordance with this title.

‘‘(2) LIMITATION.—The Administrator may not deny a

request for funds submitted under this subsection because the

program for which the funds are requested—

‘‘(A) would be carried out by the eligible organization

in a foreign country in which the Agency for International

Development does not have a mission, office, or other presence; or

‘‘(B) is not part of a development plan for the country

prepared by the Agency.’’; and

(2) in subsection (e)—

(A) in the subsection heading, by striking ‘‘PRIVATE

VOLUNTARY ORGANIZATIONS AND COOPERATIVES’’ and

inserting ‘‘ELIGIBLE ORGANIZATIONS’’;

(B) in paragraph (1)—
110 STAT. 954 PUBLIC LAW 104–127—APR. 4, 1996

(i) by striking ‘‘$13,500,000’’ and inserting

‘‘$28,000,000’’; and

(ii) by striking ‘‘private voluntary organizations

and cooperatives to assist such organizations and

cooperatives’’ and inserting ‘‘eligible organizations

described in subsection (d), to assist the organizations’’;

(C) by striking paragraph (2) and inserting the following:

‘‘(2) REQUEST FOR FUNDS.—To receive funds made available

under paragraph (1), an eligible organization described in subsection (d) shall submit a request for the funds that is subject

to approval by the Administrator.’’; and

(D) in paragraph (3), by striking ‘‘a private voluntary

organization or cooperative, the Administrator may provide

assistance to that organization or cooperative’’ and inserting ‘‘an eligible organization, the Administrator may provide assistance to the eligible organization’’.

(b) CONFORMING AMENDMENTS.—Section 207 of the Agricultural

Trade Development and Assistance Act of 1954 (7 U.S.C. 1726a)

is amended—

(1) in subsection (a)(1), by striking ‘‘a private voluntary

organization or cooperative’’ each place it appears and inserting

‘‘an eligible organization’’; and

(2) in subsection (b)—

(A) in paragraph (1), by striking ‘‘private voluntary

organizations and cooperatives’’ and inserting ‘‘eligible

organizations’’; and

(B) in paragraph (2), by striking ‘‘organizations,

cooperatives,’’ and inserting ‘‘eligible organizations’’.

SEC. 208. GENERATION AND USE OF FOREIGN CURRENCIES.

Section 203 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1723) is amended—

(1) in subsection (a), by inserting ‘‘, or in a country in

the same region,’’ after ‘‘in the recipient country’’;

(2) in subsection (b)—

(A) by inserting ‘‘or in countries in the same region,’’

after ‘‘in recipient countries,’’; and

(B) by striking ‘‘10 percent’’ and inserting ‘‘15 percent’’;

(3) in subsection (c), by inserting ‘‘or in a country in the

same region,’’ after ‘‘in the recipient country,’’; and

(4) in subsection (d)(2), by inserting ‘‘or within a country

in the same region’’ after ‘‘within the recipient country’’.

SEC. 209. GENERAL LEVELS OF ASSISTANCE UNDER PUBLIC LAW 480.

Section 204 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1724) is amended—

(1) in subsection (a)—

(A) in paragraph (1), by striking ‘‘amount that’’ and

all that follows through the period at the end and inserting

‘‘amount that for each of fiscal years 1996 through 2002

is not less than 2,025,000 metric tons.’’;

(B) in paragraph (2), by striking ‘‘amount that’’ and

all that follows through the period at the end and inserting

‘‘amount that for each of fiscal years 1996 through 2002

is not less than 1,550,000 metric tons.’’; and
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 955

(C) in paragraph (3), by adding at the end the following:

‘‘No waiver shall be made before the beginning of the

applicable fiscal year.’’; and

(2) in subsection (b)(1), by inserting before the period at

the end the following: ‘‘and that not less than 50 percent

of the quantity of the bagged commodities that are whole grain

commodities be bagged in the United States’’.

SEC. 210. FOOD AID CONSULTATIVE GROUP.

Section 205 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1725) is amended—

(1) in subsection (a), by striking ‘‘private voluntary

organizations, cooperatives and indigenous non-governmental

organizations’’ and inserting ‘‘eligible organizations described

in section 202(d)(1)’’;

(2) in subsection (b)—

(A) in paragraph (2), by striking ‘‘for International

Affairs and Commodity Programs’’ and inserting ‘‘of Agriculture for Farm and Foreign Agricultural Services’’;

(B) in paragraph (4), by striking ‘‘and’’ at the end;

(C) in paragraph (5), by striking the period at the

end and inserting ‘‘; and’’; and

(D) by adding at the end the following:

‘‘(6) representatives from agricultural producer groups in

the United States.’’;

(3) in the second sentence of subsection (d), by inserting

‘‘(but at least twice per year)’’ after ‘‘when appropriate’’; and

(4) in subsection (f), by striking ‘‘1995’’ and inserting ‘‘2002’’.

SEC. 211. SUPPORT OF NONGOVERNMENTAL ORGANIZATIONS.

(a) IN GENERAL.—Section 306(b) of the Agricultural Trade

Development and Assistance Act of 1954 (7 U.S.C. 1727e(b)) is

amended—

(1) in the subsection heading, by striking ‘‘INDIGENOUS

NON-GOVERNMENTAL’’ and inserting ‘‘NONGOVERNMENTAL’’; and

(2) by striking ‘‘utilization of indigenous’’ and inserting

‘‘utilization of’’.

(b) CONFORMING AMENDMENT.—Section 402 of the Agricultural

Trade Development and Assistance Act of 1954 (7 U.S.C. 1732)

is amended by striking paragraph (6) and inserting the following:

‘‘(6) NONGOVERNMENTAL ORGANIZATION.—The term ‘nongovernmental organization’ means an organization that works

at the local level to solve development problems in a foreign

country in which the organization is located, except that the

term does not include an organization that is primarily an

agency or instrumentality of the government of the foreign

country.’’.

SEC. 212. COMMODITY DETERMINATIONS.

Section 401 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1731) is amended—

(1) by striking subsections (a) through (d) and inserting

the following:

‘‘(a) AVAILABILITY OF COMMODITIES.—No agricultural commodity shall be available for disposition under this Act if the Secretary

determines that the disposition would reduce the domestic supply

of the commodity below the supply needed to meet domestic requirements and provide adequate carryover (as determined by the Sec-
110 STAT. 956 PUBLIC LAW 104–127—APR. 4, 1996

retary), unless the Secretary determines that some part of the

supply should be used to carry out urgent humanitarian purposes

under this Act.’’;

(2) by redesignating subsections (e) and (f) as subsections

(b) and (c), respectively; and

(3) in subsection (c) (as so redesignated), by striking ‘‘(e)(1)’’

and inserting ‘‘(b)(1)’’.

SEC. 213. GENERAL PROVISIONS.

Section 403 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1733) is amended—

(1) in subsection (b)—

(A) in the subsection heading, by striking ‘‘CONSULTATIONS’’ and inserting ‘‘IMPACT ON LOCAL FARMERS AND

ECONOMY’’; and

(B) by striking ‘‘consult with’’ and all that follows

through ‘‘other donor organizations to’’;

(2) in subsection (c)—

(A) by striking ‘‘from countries’’; and

(B) by striking ‘‘for use’’ and inserting ‘‘or use’’;

(3) in subsection (f)—

(A) by inserting ‘‘or private entities, as appropriate,’’

after ‘‘from countries’’; and

(B) by inserting ‘‘or private entities’’ after ‘‘such countries’’; and

(4) in subsection (i)(2), by striking subparagraph (C).

SEC. 214. AGREEMENTS.

Section 404 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1734) is amended—

(1) in subsection (a), by inserting ‘‘with foreign countries’’

after ‘‘Before entering into agreements’’;

(2) in subsection (b)(2)—

(A) by inserting ‘‘with foreign countries’’ after ‘‘with

respect to agreements entered into’’; and

(B) by inserting before the semicolon at the end the

following: ‘‘and broad-based economic growth’’; and

(3) in subsection (c), by striking paragraph (1) and inserting

the following:

‘‘(1) IN GENERAL.—Agreements to provide assistance on

a multi-year basis to recipient countries or to eligible organizations—

‘‘(A) may be made available under titles I and III;

and

‘‘(B) shall be made available under title II.’’.

SEC. 215. USE OF COMMODITY CREDIT CORPORATION.

Section 406 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736) is amended—

(1) in subsection (a), by striking ‘‘shall’’ and inserting ‘‘may’’;

and

(2) in subsection (b)—

(A) by striking ‘‘this Act’’ and inserting ‘‘titles II and

III’’; and

(B) by striking paragraph (4) and inserting the following:
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 957

‘‘(4) the vessel freight charges from United States ports

or designated Canadian transshipment ports, as determined

by the Secretary, to designated ports of entry abroad;’’.

SEC. 216. ADMINISTRATIVE PROVISIONS.

Section 407 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736a) is amended—

(1) in subsection (a)—

(A) in paragraph (1), by inserting ‘‘or private entity

that enters into an agreement under title I’’ after ‘‘importing country’’; and

(B) in paragraph (2), by adding at the end the following:

‘‘Resulting contracts may contain such terms and conditions

as the Secretary determines are necessary and appropriate.’’;

(2) in subsection (c)—

(A) in paragraph (1)(A), by inserting ‘‘importer or’’

before ‘‘importing country’’; and

(B) in paragraph (2)(A), by inserting ‘‘importer or’’

before ‘‘importing country’’;

(3) in subsection (d)—

(A) by striking paragraph (2) and inserting the following:

‘‘(2) FREIGHT PROCUREMENT.—Notwithstanding the Federal

Property and Administrative Services Act of 1949 (40 U.S.C.

471 et seq.) or other similar provisions of law relating to the

making or performance of Federal Government contracts, ocean

transportation under titles II and III may be procured on

the basis of full and open competitive procedures. Resulting

contracts may contain such terms and conditions as the

Administrator determines are necessary and appropriate.’’; and

(B) by striking paragraph (4);

(4) in subsection (g)(2)—

(A) in subparagraph (B), by striking ‘‘and’’ at the end;

(B) in subparagraph (C), by striking the period at

the end and inserting ‘‘; and’’; and

(C) by adding at the end the following:

‘‘(D) an assessment of the progress towards achieving

food security in each country receiving food assistance from

the United States Government, with special emphasis on

the nutritional status of the poorest populations in each

country.’’; and

(5) by striking subsection (h).

SEC. 217. EXPIRATION DATE.

Section 408 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736b) is amended by striking ‘‘1995’’

and inserting ‘‘2002’’.

SEC. 218. REGULATIONS.

Section 409 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736c) is repealed.

SEC. 219. INDEPENDENT EVALUATION OF PROGRAMS.

Section 410 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736d) is repealed.
110 STAT. 958 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 220. AUTHORIZATION OF APPROPRIATIONS.

Section 412 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736f) is amended—

(1) by striking subsections (b) and (c) and inserting the

following:

‘‘(b) TRANSFER OF FUNDS.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2)

and notwithstanding any other provision of law, the President

may direct that up to 15 percent of the funds available for

any fiscal year for carrying out any title of this Act be used

to carry out any other title of this Act.

‘‘(2) TITLE III FUNDS.—The President may direct that up

to 50 percent of the funds available for any fiscal year for

carrying out title III be used to carry out title II.’’; and

(2) by redesignating subsections (d) and (e) as subsections

(c) and (d), respectively.

SEC. 221. COORDINATION OF FOREIGN ASSISTANCE PROGRAMS.

Section 413 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736g) is amended by striking ‘‘this

Act’’ each place it appears and inserting ‘‘title III’’.

SEC. 222. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.

Title IV of the Agricultural Trade Development and Assistance

Act of 1954 (7 U.S.C. 1731 et seq.) is amended by adding at

the end the following:

‘‘SEC. 415. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.

‘‘(a) IN GENERAL.—Subject to the availability of practical technology and to cost effectiveness, not later than September 30, 1997,

the Secretary, in consultation with the Administrator, shall establish a micronutrient fortification pilot program under this Act.

The purpose of the program shall be to—

‘‘(1) assist developing countries in correcting micronutrient

dietary deficiencies among segments of the populations of the

countries; and

‘‘(2) encourage the development of technologies for the fortification of whole grains and other commodities that are readily

transferable to developing countries.

‘‘(b) SELECTION OF PARTICIPATING COUNTRIES.—From among

the countries eligible for assistance under this Act, the Secretary

may select not more than 5 developing countries to participate

in the pilot program.

‘‘(c) FORTIFICATION.—Under the pilot program, whole grains

and other commodities made available to a developing country

selected to participate in the pilot program may be fortified with

1 or more micronutrients (including vitamin A, iron, and iodine)

with respect to which a substantial portion of the population in

the country is deficient. The commodity may be fortified in the

United States or in the developing country.

‘‘(d) TERMINATION OF AUTHORITY.—The authority to carry out

the pilot program established under this section shall terminate

on September 30, 2002.’’.

SEC. 223. USE OF CERTAIN LOCAL CURRENCY.

Title IV of the Agricultural Trade Development and Assistance

Act of 1954 (7 U.S.C. 1731 et seq.) (as amended by section 222)

is amended by adding at the end the following:

Establishment.

Developing

countries.

7 USC 1736g–2.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 959

‘‘SEC. 416. USE OF CERTAIN LOCAL CURRENCY.

‘‘Local currency payments received by the United States pursuant to agreements entered into under title I (as in effect on November 27, 1990) may be utilized by the Secretary in accordance with

section 108 (as in effect on November 27, 1990).’’.

SEC. 224. FARMER-TO-FARMER PROGRAM.

Section 501 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1737) is amended—

(1) in subsection (a), by striking paragraph (6) and inserting

the following:

‘‘(6) to the extent that local currencies can be used to

meet the costs of a program established under this section,

augment funds of the United States that are available for

such a program through the use of foreign currencies that

accrue from the sale of agricultural commodities under this

Act, and local currencies generated from other types of foreign

assistance activities, within the country where the program

is being conducted.’’; and

(2) in subsection (c)—

(A) by striking ‘‘0.2’’ and inserting ‘‘0.4’’;

(B) by striking ‘‘1991 through 1995’’ and inserting

‘‘1996 through 2002’’; and

(C) by striking ‘‘0.1’’ and inserting ‘‘0.2’’.

SEC. 225. FOOD SECURITY COMMODITY RESERVE.

(a) IN GENERAL.—Title III of the Agricultural Act of 1980

(7 U.S.C. 1736f–1 et seq.) is amended to read as follows:

‘‘TITLE III—FOOD SECURITY

COMMODITY RESERVE

‘‘SEC. 301. SHORT TITLE.

‘‘This title may be cited as the ‘Food Security Commodity

Reserve Act of 1996’.

‘‘SEC. 302. ESTABLISHMENT OF COMMODITY RESERVE.

‘‘(a) IN GENERAL.—To provide for a reserve solely to meet

emergency humanitarian food needs in developing countries, the

Secretary of Agriculture (referred to in this title as the ‘Secretary’)

shall establish a reserve stock of wheat, rice, corn, or sorghum,

or any combination of the commodities, totaling not more than

4,000,000 metric tons for use as described in subsection (c).

‘‘(b) COMMODITIES IN RESERVE.—

‘‘(1) IN GENERAL.—The reserve established under this section shall consist of—

‘‘(A) wheat in the reserve established under the Food

Security Wheat Reserve Act of 1980 as of the date of

enactment of the Federal Agriculture Improvement and

Reform Act of 1996;

‘‘(B) wheat, rice, corn, and sorghum (referred to in

this section as ‘eligible commodities’) acquired in accordance with paragraph (2) to replenish eligible commodities

released from the reserve, including wheat to replenish

wheat released from the reserve established under the

Food Security Wheat Reserve Act of 1980 but not replen7 USC 1736f–1.

7 USC 1736f–1

note.

Food Security

Commodity

Reserve Act of

1996.

7 USC 1736g–3.
110 STAT. 960 PUBLIC LAW 104–127—APR. 4, 1996

ished as of the date of enactment of the Federal Agriculture

Improvement and Reform Act of 1996; and

‘‘(C) such rice, corn, and sorghum as the Secretary

may, at such time and in such manner as the Secretary

determines appropriate, acquire as a result of exchanging

an equivalent value of wheat in the reserve established

under this section.

‘‘(2) REPLENISHMENT OF RESERVE.—

‘‘(A) IN GENERAL.—Subject to subsection (h), commodities of equivalent value to eligible commodities in the

reserve established under this section may be acquired—

‘‘(i) through purchases—

‘‘(I) from producers; or

‘‘(II) in the market, if the Secretary determines

that the purchases will not unduly disrupt the

market; or

‘‘(ii) by designation by the Secretary of stocks of

eligible commodities of the Commodity Credit Corporation.

‘‘(B) FUNDS.—Any use of funds to acquire eligible

commodities through purchases from producers or in the

market to replenish the reserve must be authorized in

an appropriations Act.

‘‘(c) RELEASE OF ELIGIBLE COMMODITIES.—

‘‘(1) EMERGENCY ASSISTANCE.—

‘‘(A) IN GENERAL.—Notwithstanding paragraph (2), to

meet unanticipated need, the Secretary may release eligible

commodities in any fiscal year, without regard to the availability of domestic supply of the commodities, to provide

emergency assistance to developing countries under title

II of the Agricultural Trade Development and Assistance

Act of 1954 (7 U.S.C. 1721 et seq.).

‘‘(B) RELEASE FOR EMERGENCY ASSISTANCE.—If the

eligible commodities needed to meet unanticipated need

cannot be made available in a timely manner under normal

means for obtaining eligible commodities for food assistance

because of unanticipated need for emergency assistance

as provided under section 202(a) of the Agricultural Trade

Development and Assistance Act of 1954 (7 U.S.C. 1722(a)),

the Secretary may in any fiscal year release from the

reserve—

‘‘(i) up to 500,000 metric tons of wheat or the

equivalent value of eligible commodities other than

wheat; and

‘‘(ii) up to 500,000 metric tons of any eligible

commodities under this paragraph that could have

been released but were not released in prior fiscal

years.

‘‘(C) WAIVER OF MINIMUM TONNAGE REQUIREMENTS.—

Nothing in this paragraph shall require a waiver under

section 204(a)(3) of the Agricultural Trade Development

and Assistance Act of 1954 (7 U.S.C. 1724(a)(3)) as a prerequisite for the release of eligible commodities under this

paragraph.

‘‘(2) EMERGENCY FOOD ASSISTANCE.—Notwithstanding any

other provision of law, eligible commodities designated or

acquired for the reserve established under this section may
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 961

be released by the Secretary to provide, on a donation or

sale basis, emergency food assistance to developing countries

at such time as the domestic supply of the eligible commodities

is so limited that quantities of the eligible commodities cannot

be made available for disposition under the Agricultural Trade

Development and Assistance Act of 1954 (7 U.S.C. 1691 et

seq.) (other than disposition for urgent humanitarian purposes

under section 401 of the Act (7 U.S.C. 1731)).

‘‘(3) PROCESSING OF ELIGIBLE COMMODITIES.—Eligible

commodities that are released from the reserve established

under this section may be processed in the United States and

shipped to a developing country when conditions in the recipient

country require processing.

‘‘(4) EXCHANGE.—The Secretary may exchange an eligible

commodity for another United States commodity of equal value,

including powdered milk, pulses, and vegetable oil.

‘‘(5) USE OF NORMAL COMMERCIAL PRACTICES.—To the maximum extent practicable consistent with the fulfillment of the

purposes of this section and the effective and efficient administration of this section, the Secretary shall use the usual and

customary channels, facilities, arrangements, and practices of

trade and commerce to carry out this subsection.

‘‘(d) MANAGEMENT OF ELIGIBLE COMMODITIES.—The Secretary

shall provide—

‘‘(1) for the management of eligible commodities in the

reserve established under this section as to location and quality

of eligible commodities needed to meet emergency situations;

and

‘‘(2) for the periodic rotation or replacement of stocks of

eligible commodities in the reserve to avoid spoilage and

deterioration of the commodities.

‘‘(e) TREATMENT OF RESERVE UNDER OTHER LAW.—Eligible

commodities in the reserve established under this section shall

not be—

‘‘(1) considered a part of the total domestic supply (including carryover) for the purpose of subsection (c) or for the purpose of administering the Agricultural Trade Development and

Assistance Act of 1954 (7 U.S.C. 1691 et seq.); and

‘‘(2) subject to any quantitative limitation on exports that

may be imposed under section 7 of the Export Administration

Act of 1979 (50 U.S.C. App. 2406).

‘‘(f) USE OF COMMODITY CREDIT CORPORATION.—

‘‘(1) IN GENERAL.—Subject to the limitations provided in

this section, the funds, facilities, and authorities of the

Commodity Credit Corporation shall be used by the Secretary

in carrying out this section, except that any restriction

applicable to the acquisition, storage, or disposition of eligible

commodities owned or controlled by the Commodity Credit Corporation shall not apply.

‘‘(2) REIMBURSEMENT.—

‘‘(A) IN GENERAL.—The Commodity Credit Corporation

shall be reimbursed for the release of eligible commodities

from funds made available to carry out the Agricultural

Trade Development and Assistance Act of 1954 (7 U.S.C.

1691 et seq.).

‘‘(B) BASIS FOR REIMBURSEMENT.—The reimbursement

shall be made on the basis of the lesser of—
110 STAT. 962 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(i) the actual costs incurred by the Commodity

Credit Corporation with respect to the eligible commodity; or

‘‘(ii) the export market price of the eligible commodity (as determined by the Secretary) as of the time

the eligible commodity is released from the reserve.

‘‘(C) SOURCE OF FUNDS.—The reimbursement may be

made from funds appropriated for subsequent fiscal years.

‘‘(g) FINALITY OF DETERMINATION.—Any determination by the

Secretary under this section shall be final.

‘‘(h) TERMINATION OF AUTHORITY.— ‘‘(1) IN GENERAL.—The authority to replenish stocks of

eligible commodities to maintain the reserve established under

this section shall terminate on September 30, 2002.

‘‘(2) DISPOSAL OF ELIGIBLE COMMODITIES.—Eligible

commodities remaining in the reserve after September 30, 2002,

shall be disposed of by release for use in providing for emergency humanitarian food needs in developing countries as provided in this section.’’.

(b) CONFORMING AMENDMENT.—Section 208(d) of the Agricultural Trade Suspension Adjustment Act of 1980 (7 U.S.C. 4001(d))

is amended by striking paragraph (2) and inserting the following:

‘‘(2) APPLICABILITY OF CERTAIN PROVISIONS.—Subsections

(c), (d), (e), and (f)(2) of section 302 of the Food Security

Commodity Reserve Act of 1996 shall apply to commodities

in any reserve established under paragraph (1), except that

the references to ‘eligible commodities’ in the subsections shall

be deemed to be references to ‘agricultural commodities’.’’.

SEC. 226. PROTEIN BYPRODUCTS DERIVED FROM ALCOHOL FUEL

PRODUCTION.

Section 1208 of the Agriculture and Food Act of 1981 (7 U.S.C.

1736n) is repealed.

SEC. 227. FOOD FOR PROGRESS PROGRAM.

The Food for Progress Act of 1985 (7 U.S.C. 1736o) is

amended—

(1) in subsection (b)—

(A) in paragraph (1)—

(i) by striking ‘‘(b)(1)’’ and inserting ‘‘(b)’’; and

(ii) in the first sentence, by inserting ‘‘intergovernmental organizations,’’ after ‘‘cooperatives,’’; and

(B) by striking paragraph (2);

(2) in subsection (e)(4), by striking ‘‘203’’ and inserting

‘‘406’’;

(3) in subsection (f)—

(A) in paragraph (1)(B), by striking ‘‘in the case of

the independent states of the former Soviet Union,’’;

(B) by striking paragraph (2);

(C) in paragraph (4), by inserting ‘‘for each of fiscal

years 1996 through 2002’’ after ‘‘may be used’’; and

(D) by redesignating paragraphs (3) through (5) as

paragraphs (2) through (4), respectively;

(4) in subsection (g), by striking ‘‘1995’’ and inserting

‘‘2002’’;

(5) in subsection (j), by striking ‘‘shall’’ and inserting ‘‘may’’;

(6) in subsection (k), by striking ‘‘1995’’ and inserting

‘‘2002’’;
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 963

(7) in subsection (l)(1)—

(A) by striking ‘‘1991 through 1995’’ and inserting

‘‘1996 through 2002’’; and

(B) by inserting ‘‘, and to provide technical assistance

for monetization programs,’’ after ‘‘monitoring of food

assistance programs’’; and

(8) in subsection (m)—

(A) by striking ‘‘with respect to the independent states

of the former Soviet Union’’;

(B) by striking ‘‘private voluntary organizations and

cooperatives’’ each place it appears and inserting ‘‘agricultural trade organizations, intergovernmental organizations,

private voluntary organizations, and cooperatives’’; and

(C) in paragraph (2), by striking ‘‘in the independent

states’’.

SEC. 228. USE OF FOREIGN CURRENCY PROCEEDS FROM EXPORT

SALES FINANCING.

Section 402 of the Mutual Security Act of 1954 (22 U.S.C.

1922) is repealed.

SEC. 229. STIMULATION OF FOREIGN PRODUCTION.

Section 7 of the Act of December 30, 1947 (61 Stat. 947, chapter

526; 50 U.S.C. App. 1917), is repealed.

Subtitle B—Amendments to Agricultural

Trade Act of 1978

SEC. 241. AGRICULTURAL EXPORT PROMOTION STRATEGY.

(a) IN GENERAL.—Section 103 of the Agricultural Trade Act

of 1978 (7 U.S.C. 5603) is amended to read as follows:

‘‘SEC. 103. AGRICULTURAL EXPORT PROMOTION STRATEGY.

‘‘(a) IN GENERAL.—The Secretary shall develop a strategy for

implementing Federal agricultural export promotion programs that

takes into account the new market opportunities for agricultural

products, including opportunities that result from—

‘‘(1) the North American Free Trade Agreement and the

Uruguay Round Agreements;

‘‘(2) any accession to membership in the World Trade

Organization;

‘‘(3) the continued economic growth in the Pacific Rim;

and

‘‘(4) other developments.

‘‘(b) PURPOSE OF STRATEGY.—The strategy developed under subsection (a) shall encourage the maintenance, development, and

expansion of export markets for United States agricultural commodities and related products, including high-value and value-added

products.

‘‘(c) GOALS OF STRATEGY.—The strategy developed under subsection (a) shall have the following goals:

‘‘(1) Increase the value of United States agricultural exports

each year.

‘‘(2) Increase the value of United States agricultural exports

each year at a faster rate than the rate of increase in the

value of overall world export trade in agricultural products.
110 STAT. 964 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(3) Increase the value of United States high-value and

value-added agricultural exports each year.

‘‘(4) Increase the value of United States high-value and

value-added agricultural exports each year at a faster rate

than the rate of increase in the value of overall world export

trade in high-value and value-added agricultural products.

‘‘(5) Ensure that to the extent practicable—

‘‘(A) all obligations undertaken in the Uruguay Round

Agreement on Agriculture that significantly increase access

for United States agricultural commodities are implemented to the extent required by the Uruguay Round

Agreements; or

‘‘(B) applicable United States laws are used to secure

United States rights under the Uruguay Round Agreement

on Agriculture.

‘‘(d) PRIORITY MARKETS.—

‘‘(1) IDENTIFICATION OF MARKETS.—In developing the strategy required under subsection (a), the Secretary shall annually

identify as priority markets—

‘‘(A) those markets in which imports of agricultural

products show the greatest potential for increase; and

‘‘(B) those markets in which, with the assistance of

Federal export promotion programs, exports of United

States agricultural products show the greatest potential

for increase.

‘‘(2) IDENTIFICATION OF SUPPORTING OFFICES.—The President shall identify annually in the budget of the United States

Government submitted under section 1105 of title 31, United

States Code, each overseas office of the Foreign Agricultural

Service that provides assistance to United States exporters

in each of the priority markets identified under paragraph

(1).’’.

(b) SENSE OF CONGRESS.—It is the sense of Congress that—

(1) the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and

Forestry of the Senate should conduct a thorough review of

agricultural export and food aid programs not later than December 31, 1998; and

(2) the review should examine what changes, if any, need

to be made in the programs as a result of the effects of the

Agricultural Market Transition Act, the Uruguay Round Agreements, changing world market conditions, and such other factors as the committees consider appropriate.

(c) ELIMINATION OF REPORT.—

(1) IN GENERAL.—Section 601 of the Agricultural Trade

Act of 1978 (7 U.S.C. 5711) is repealed.

(2) CONFORMING AMENDMENT.—The last sentence of section

603 of the Agricultural Trade Act of 1978 (7 U.S.C. 5713)

is amended by striking ‘‘, in a consolidated report,’’ and all

that follows through ‘‘section 601’’ and inserting ‘‘or in a consolidated report’’.

SEC. 242. IMPLEMENTATION OF COMMITMENTS UNDER URUGUAY

ROUND AGREEMENTS.

(a) IN GENERAL.—Title I of the Agricultural Trade Act of 1978

(7 U.S.C. 5601 et seq.) is amended by adding at the end the

following:

President.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 965

‘‘SEC. 106. IMPLEMENTATION OF COMMITMENTS UNDER URUGUAY

ROUND AGREEMENTS.

‘‘Not later than September 30 of each year, the Secretary shall

evaluate whether the obligations undertaken by foreign countries

under the Uruguay Round Agreement on Agriculture are being

fully implemented. If the Secretary has reason to believe (based

on the evaluation) that any foreign country, by not implementing

the obligations of the country, may be significantly constraining

an opportunity for United States agricultural exports, the Secretary

shall—

‘‘(1) submit the evaluation to the United States Trade Representative; and

‘‘(2) transmit a copy of the evaluation to the Committee

on Agriculture, and the Committee on Ways and Means, of

the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry, and the Committee on

Finance, of the Senate.’’.

(b) MONITORING COMPLIANCE WITH SANITARY AND

PHYTOSANITARY MEASURES.—Section 414 of the Agricultural Trade

Act of 1978 (7 U.S.C. 5674) is amended by adding at the end

the following:

‘‘(c) MONITORING COMPLIANCE WITH SANITARY AND

PHYTOSANITARY MEASURES.—The Secretary shall monitor the

compliance of World Trade Organization member countries with

the sanitary and phytosanitary measures of the Agreement on

Agriculture of the Uruguay Round of Multilateral Trade Negotiations of the General Agreement on Tariffs and Trade. If the Secretary has reason to believe that any country may have failed

to meet the commitment on sanitary and phytosanitary measures

under the Agreement in a manner that adversely impacts the

exports of a United States agricultural commodity, the Secretary

shall—

‘‘(1) provide such information to the United States Trade

Representative of the circumstances surrounding the matter

arising under this subsection; and

‘‘(2) with respect to any such circumstances that the Secretary considers to have a continuing adverse effect on United

States agricultural exports, report to the Committee on Agriculture, and the Committee on Ways and Means, of the House

of Representatives and the Committee on Agriculture, Nutrition, and Forestry, and the Committee on Finance, of the Senate—

‘‘(A) that a country may have failed to meet the sanitary and phytosanitary commitments; and

‘‘(B) any notice given by the Secretary to the United

States Trade Representative.’’.

SEC. 243. EXPORT CREDITS.

(a) EXPORT CREDIT GUARANTEE PROGRAM.—Section 202 of the

Agricultural Trade Act of 1978 (7 U.S.C. 5622) is amended—

(1) in subsection (a)—

(A) by striking ‘‘GUARANTEES.—The’’ and inserting the

following: ‘‘GUARANTEES.—

‘‘(1) IN GENERAL.—The’’; and

(B) by adding at the end the following:

‘‘(2) SUPPLIER CREDITS.—In carrying out this section, the

Commodity Credit Corporation may issue guarantees for the

Reports.

Evaluation.

7 USC 5606.
110 STAT. 966 PUBLIC LAW 104–127—APR. 4, 1996

repayment of credit made available for a period of not more

than 180 days by a United States exporter to a buyer in

a foreign country.’’;

(2) in subsection (f)—

(A) by striking ‘‘(f) RESTRICTIONS.—The’’ and inserting

the following:

‘‘(f) RESTRICTIONS.—

‘‘(1) IN GENERAL.—The’’; and

(B) by adding at the end the following:

‘‘(2) CRITERIA FOR DETERMINATION.—In making the determination required under paragraph (1) with respect to credit

guarantees under subsection (b) for a country, the Secretary

may consider, in addition to financial, macroeconomic, and

monetary indicators—

‘‘(A) whether an International Monetary Fund standby

agreement, Paris Club rescheduling plan, or other economic

restructuring plan is in place with respect to the country;

‘‘(B) whether the country is addressing issues such

as—

‘‘(i) the convertibility of the currency of the country;

‘‘(ii) adequate legal protection for foreign investments;

‘‘(iii) the viability of the financial markets of the

country; and

‘‘(iv) adequate legal protection for the private property rights of citizens of the country; or

‘‘(C) any other factors that are relevant to the ability

of the country to service the debt of the country.’’;

(3) by striking subsection (h) and inserting the following:

‘‘(h) UNITED STATES AGRICULTURAL COMMODITIES.—The

Commodity Credit Corporation shall finance or guarantee under

this section only United States agricultural commodities.’’;

(4) in subsection (i)—

(A) by striking paragraph (1);

(B) by striking ‘‘INSTITUTIONS.—A financial’’ and inserting the following: ‘‘INSTITUTIONS.—

‘‘(1) IN GENERAL.—A financial’’;

(C) by striking ‘‘(2) is’’ and inserting the following:

‘‘(A) is’’;

(D) by striking ‘‘(3) is’’ and inserting the following:

‘‘(B) is’’; and

(E) by adding at the end the following:

‘‘(2) THIRD COUNTRY BANKS.—The Commodity Credit Corporation may guarantee under subsections (a) and (b) the repayment of credit made available to finance an export sale irrespective of whether the obligor is located in the country to which

the export sale is destined.’’; and

(5) by striking subsection (k) and inserting the following:

‘‘(k) PROCESSED AND HIGH-VALUE PRODUCTS.—

‘‘(1) IN GENERAL.—In issuing export credit guarantees

under this section, the Commodity Credit Corporation shall,

subject to paragraph (2), ensure that not less than 25 percent

for each of fiscal years 1996 and 1997, 30 percent for each

of fiscal years 1998 and 1999, and 35 percent for each of

fiscal years 2000, 2001, and 2002, of the total amount of credit

guarantees issued for a fiscal year is issued to promote the

export of processed or high-value agricultural products and
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 967

that the balance is issued to promote the export of bulk or

raw agricultural commodities.

‘‘(2) LIMITATION.—The percentage requirement of paragraph (1) shall apply for a fiscal year to the extent that a

reduction in the total amount of credit guarantees issued for

the fiscal year is not required to meet the percentage requirement.’’.

(b) FUNDING LEVELS.—Section 211 of the Agricultural Trade

Act of 1978 (7 U.S.C. 5641) is amended by striking subsection

(b) and inserting the following:

‘‘(b) EXPORT CREDIT GUARANTEE PROGRAMS.—

‘‘(1) EXPORT CREDIT GUARANTEES.—The Commodity Credit

Corporation shall make available for each of fiscal years 1996

through 2002 not less than $5,500,000,000 in credit guarantees

under subsections (a) and (b) of section 202.

‘‘(2) LIMITATION ON ORIGINATION FEE.—Notwithstanding

any other provision of law, the Secretary may not charge an

origination fee with respect to any credit guarantee transaction

under section 202(a) in excess of an amount equal to 1 percent

of the amount of credit to be guaranteed under the transaction,

except with respect to an export credit guarantee transaction

pursuant to section 1542(b) of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 7 U.S.C.

5622 note).’’.

(c) DEFINITION OF UNITED STATES AGRICULTURAL COMMODITY.—Section 102(7) of the Agricultural Trade Act of 1978 (7 U.S.C.

5602(7)) is amended by striking subparagraphs (A) and (B) and

inserting the following:

‘‘(A) an agricultural commodity or product entirely produced in the United States; or

‘‘(B) a product of an agricultural commodity—

‘‘(i) 90 percent or more of the agricultural components of which by weight, excluding packaging and

added water, is entirely produced in the United States;

and

‘‘(ii) that the Secretary determines to be a high

value agricultural product.’’.

(d) REGULATIONS.—Not later than 180 days after the date of

enactment of this Act, the Secretary of Agriculture shall issue

regulations to carry out the amendments made by this section.

SEC. 244. MARKET ACCESS PROGRAM.

(a) CHANGE OF NAME.—

(1) IN GENERAL.—Section 203 of the Agricultural Trade

Act of 1978 (7 U.S.C. 5623) is amended—

(A) in the section heading, by striking ‘‘MARKET PROMOTION PROGRAM’’ and inserting ‘‘MARKET ACCESS PROGRAM’’; and

(B) by striking ‘‘marketing promotion program’’ each

place it appears and inserting ‘‘market access program’’.

(2) CONFORMING AMENDMENTS.—

(A) Section 1302 of the Omnibus Budget Reconciliation

Act of 1993 (Public Law 103–66; 7 U.S.C. 5623) is

amended—

(i) in the section heading, by striking ‘‘MARKET

PROMOTION PROGRAM’’ and inserting ‘‘MARKET ACCESS

PROGRAM’’; and

7 USC 5622 note.
110 STAT. 968 PUBLIC LAW 104–127—APR. 4, 1996

(ii) in subsection (b), by striking ‘‘market promotion

program’’ each place it appears and inserting ‘‘market

access program’’.

(B) Section 211(c) of the Agricultural Trade Act of

1978 (7 U.S.C. 5641(c)) is amended—

(i) in the subsection heading, by striking ‘‘MARKETING PROMOTION PROGRAMS’’ and inserting ‘‘MARKET

ACCESS PROGRAMS’’;

(ii) by striking ‘‘market promotion activities’’ and

inserting ‘‘market access activities’’;

(iii) in paragraph (1), by striking ‘‘market development program’’ and inserting ‘‘market access program’’;

and

(iv) in paragraph (2), by striking ‘‘marketing promotion program’’ and inserting ‘‘market access program’’.

(b) USE OF FUNDS.—Section 203(f) of the Agricultural Trade

Act of 1978 (7 U.S.C. 5623(f)) is amended by adding at the end

the following:

‘‘(4) USE OF FUNDS.—Funds made available to carry out

this section—

‘‘(A) shall not be used to provide direct assistance to

any foreign for-profit corporation for the corporation’s use

in promoting foreign-produced products;

‘‘(B) shall not be used to provide direct assistance to

any for-profit corporation that is not recognized as a smallbusiness concern described in section 3(a) of the Small

Business Act (15 U.S.C. 632(a)), excluding—

‘‘(i) a cooperative;

‘‘(ii) an association described in the first section

of the Act entitled ‘An Act To authorize association

of producers of agricultural products’, approved February 18, 1922 (7 U.S.C. 291); and

‘‘(iii) a nonprofit trade association; and

‘‘(C) may be used by a United States trade association,

cooperative, or small business for individual branded promotional activity related to a United States branded product, if the beneficiaries of the activity have provided funds

for the activity in an amount that is at least equivalent

to the amount of assistance provided under this section.’’.

(c) FUNDING.—Effective October 1, 1995, section 211(c)(1) of

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

amended—

(1) by striking ‘‘and’’ after ‘‘1991 through 1993,’’; and

(2) by striking ‘‘through 1997,’’ and inserting ‘‘through 1995,

and not more than $90,000,000 for each of fiscal years 1996

through 2002,’’.

SEC. 245. EXPORT ENHANCEMENT PROGRAM.

(a) IN GENERAL.—Effective October 1, 1995, section 301(e) of

the Agricultural Trade Act of 1978 (7 U.S.C. 5651(e)) is amended

by striking paragraph (1) and inserting the following:

‘‘(1) IN GENERAL.—The Commodity Credit Corporation shall

make available to carry out the program established under

this section not more than—

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

‘‘(B) $250,000,000 for fiscal year 1997;

Effective date.

Effective date.

7 USC 5623 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 969

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

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

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

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

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

(b) PRIORITY FUNDING FOR INTERMEDIATE PRODUCTS.—Section

301 of the Agricultural Trade Act of 1978 (7 U.S.C. 5651) is amended

by adding at the end the following:

‘‘(h) PRIORITY FUNDING FOR INTERMEDIATE PRODUCTS.—

‘‘(1) IN GENERAL.—Effective beginning in fiscal year 1996,

and consistent, as determined by the Secretary, with the obligations and reduction commitments undertaken by the United

States under the Uruguay Round Agreements, the Secretary

may make available not more than $100,000,000 for each fiscal

year under this section for the sale of intermediate agricultural

products in sufficient quantities to attain the volume of export

sales consistent with the volume of intermediate agricultural

products exported by the United States during the Uruguay

Round base period years of 1986 through 1990.

‘‘(2) ADDITIONAL ASSISTANCE.—Notwithstanding paragraph

(1), if the export sale of any intermediate agricultural product

attains the volume of export sales consistent with the volume

of the intermediate agricultural product exported by the United

States during the Uruguay Round base period years of 1986

through 1990, the Secretary may make available additional

amounts under this section for the encouragement of export

sales of the intermediate agricultural product.’’.

SEC. 246. ARRIVAL CERTIFICATION.

Section 401 of the Agricultural Trade Act of 1978 (7 U.S.C.

5661) is amended by striking subsection (a) and inserting the following:

‘‘(a) ARRIVAL CERTIFICATION.—With respect to a commodity provided, or for which financing or a credit guarantee or other assistance is made available, under a program authorized in section

201, 202, or 301, the Commodity Credit Corporation shall require

the exporter of the commodity to maintain records of an official

or customary commercial nature or other documents as the Secretary may require, and shall allow representatives of the Commodity Credit Corporation access to the records or documents as needed,

to verify the arrival of the commodity in the country that is the

intended destination of the commodity.’’.

SEC. 247. COMPLIANCE.

Section 402(a) of the Agricultural Trade Act of 1978 (7 U.S.C.

5662(a)) is amended—

(1) by striking paragraph (2); and

(2) by redesignating paragraph (3) as paragraph (2).

SEC. 248. REGULATIONS.

Section 404 of the Agricultural Trade Act of 1978 (7 U.S.C.

5664) is repealed.

SEC. 249. TRADE COMPENSATION AND ASSISTANCE PROGRAMS.

Subtitle B of title IV of the Agricultural Trade Act of 1978

(7 U.S.C. 5671 et seq.) is amended by adding at the end the

following:

Records.

Effective date.
110 STAT. 970 PUBLIC LAW 104–127—APR. 4, 1996

‘‘SEC. 417. TRADE COMPENSATION AND ASSISTANCE PROGRAMS.

‘‘(a) IN GENERAL.—Except as provided in subsection (f), notwithstanding any other provision of law, if, after the date of enactment

of this section, the President or any other member of the executive

branch causes exports from the United States to any country to

be unilaterally suspended for reasons of national security or foreign

policy, and if within 90 days after the date on which the suspension

is imposed on United States exports no other country with an

agricultural economic interest agrees to participate in the suspension, the Secretary shall carry out a trade compensation assistance

program in accordance with this section (referred to in this section

as a ‘program’).

‘‘(b) COMPENSATION OR PROVISION OF FUNDS.—Under a program, the Secretary shall, based on an evaluation by the Secretary

of the method most likely to produce the greatest compensatory

benefit for producers of the commodity involved in the suspension—

‘‘(1) compensate producers of the commodity by making

payments available to producers, as provided by subsection

(c)(1); or

‘‘(2) make available an amount of funds calculated under

subsection (c)(2), to promote agricultural exports or provide

agricultural commodities to developing countries under any

authorities available to the Secretary.

‘‘(c) DETERMINATION OF AMOUNT OF COMPENSATION OR

FUNDS.—

‘‘(1) COMPENSATION.—If the Secretary makes payments

available to producers under subsection (b)(1), the amount of

the payment shall be determined by the Secretary based on

the Secretary’s estimate of the loss suffered by producers of

the commodity involved due to any decrease in the price of

the commodity as a result of the suspension.

‘‘(2) DETERMINATION OF AMOUNT OF FUNDS.—For each fiscal

year of a program, the amount of funds made available under

subsection (b)(2) shall be equal to 90 percent of the average

annual value of United States agricultural exports to the country with respect to which exports are suspended during the

most recent 3 years prior to the suspension for which data

are available.

‘‘(d) DURATION OF PROGRAM.—For each suspension of exports

for which a program is implemented under this section, funds

shall be made available under subsection (b) for each fiscal year

or part of a fiscal year for which the suspension is in effect,

but not to exceed 3 fiscal years.

‘‘(e) COMMODITY CREDIT CORPORATION.—The Secretary shall

use funds of the Commodity Credit Corporation to carry out this

section.

‘‘(f) EXCEPTION TO CARRYING OUT A PROGRAM.—This section

shall not apply to any suspension of trade due to a war or armed

hostility.

‘‘(g) PARTIAL YEAR EMBARGOES.—If the Secretary makes funds

available under subsection (b)(2), regardless of whether an embargo

is in effect for only part of a fiscal year, the full amount of funds

as calculated under subsection (c)(2) shall be made available under

a program for the fiscal year. If the Secretary determines that

making the required amount of funds available in a partial fiscal

year is impracticable, the Secretary may make all or part of the

funds required to be made available in the following fiscal year

7 USC 5677.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 971

(in addition to any funds otherwise required under a program

to be made available in the following fiscal year).

‘‘(h) SHORT SUPPLY EMBARGOES.—If the President or any other

member of the executive branch causes exports to be suspended

based on a determination of short supply, the Secretary shall carry

out section 1002 of the Food and Agriculture Act of 1977 (7 U.S.C.

1310).’’.

SEC. 250. FOREIGN AGRICULTURAL SERVICE.

Section 503 of the Agricultural Trade Act of 1978 (7 U.S.C.

5693) is amended to read as follows:

‘‘SEC. 503. DUTIES OF FOREIGN AGRICULTURAL SERVICE.

‘‘The Service shall assist the Secretary in carrying out the

agricultural trade policy and international cooperation policy of

the United States by—

‘‘(1) acquiring information pertaining to agricultural trade;

‘‘(2) carrying out market promotion and development activities;

‘‘(3) providing agricultural technical assistance and training; and

‘‘(4) carrying out the programs authorized under this Act,

the Agricultural Trade Development and Assistance Act of 1954

(7 U.S.C. 1691 et seq.), and other Acts.’’.

SEC. 251. REPORTS.

The first sentence of section 603 of the Agricultural Trade

Act of 1978 (7 U.S.C. 5713) is amended by striking ‘‘The’’ and

inserting ‘‘Subject to section 217 of the Department of Agriculture

Reorganization Act of 1994 (7 U.S.C. 6917), the’’.

SEC. 252. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

The Agricultural Trade Act of 1978 (7 U.S.C. 5601 et seq.)

is amended by adding at the end the following:

‘‘TITLE VII—FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM

‘‘SEC. 701. DEFINITION OF ELIGIBLE TRADE ORGANIZATION.

‘‘In this title, the term ‘eligible trade organization’ means a

United States trade organization that—

‘‘(1) promotes the export of 1 or more United States agricultural commodities or products; and

‘‘(2) does not have a business interest in or receive remuneration from specific sales of agricultural commodities or products.

‘‘SEC. 702. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

‘‘(a) IN GENERAL.—The Secretary shall establish and, in

cooperation with eligible trade organizations, carry out a foreign

market development cooperator program to maintain and develop

foreign markets for United States agricultural commodities and

products.

‘‘(b) ADMINISTRATION.—Funds made available to carry out this

title shall be used only to provide—

‘‘(1) cost-share assistance to an eligible trade organization

under a contract or agreement with the organization; and

Establishment.

7 USC 5722.

7 USC 5721.
110 STAT. 972 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(2) assistance for other costs that are necessary or appropriate to carry out the foreign market development cooperator

program, including contingent liabilities that are not otherwise

funded.

‘‘SEC. 703. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated to carry out this

title such sums as may be necessary for each of fiscal years 1996

through 2002.’’.

Subtitle C—Miscellaneous Agricultural

Trade Provisions

SEC. 261. EDWARD R. MADIGAN UNITED STATES AGRICULTURAL

EXPORT EXCELLENCE AWARD.

(a) FINDINGS.—Congress finds that—

(1) United States producers of agricultural products are

some of the most productive and efficient producers of agricultural products in the world;

(2) continued growth and expansion of markets for United

States agricultural exports is crucial to the continued development and economic well-being of rural areas of the United

States and the agricultural sector of the United States economy;

(3) in recent years, United States agricultural exports have

steadily increased, surpassing $54,000,000,000 in value in 1995;

(4) as United States agricultural producers move toward

a market-oriented system in which planting and other decisions

by producers are driven by national and international market

signals, developing new and expanding agricultural export markets is vital to maintaining a vibrant and healthy agricultural

sector and rural economy; and

(5) a United States agricultural export excellence award

will increase United States agricultural exports by—

(A) identifying efforts of United States entities to

develop and expand markets for United States agricultural

exports through the development of new products and services and through the use of innovative marketing techniques;

(B) recognizing achievements of those who have exhibited or supported entrepreneurial efforts to expand and

create new markets for United States agricultural exports

or increase the volume or value of United States agricultural exports; and

(C) disseminating information on successful methods

used to develop and expand markets for United States

agricultural exports.

(b) ESTABLISHMENT.—There is established the Edward R. Madigan United States Agricultural Export Excellence Award, which

shall be evidenced by a medal bearing the inscription ‘‘Edward

R. Madigan United States Agricultural Export Excellence Award’’.

The medal shall be of such design and materials and bear such

additional inscriptions as the Secretary of Agriculture (referred

to in this section as the ‘‘Secretary’’) may prescribe.

(c) SELECTION OF RECIPIENT.—The President or the Secretary

(on the basis of recommendations received from the board established under subsection (h)) shall periodically provide the award

President.

7 USC 5678.

7 USC 5723.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 973

to companies and other entities that in the judgment of the President or the Secretary substantially encourage entrepreneurial

efforts in the food and agriculture sector for advancing United

States agricultural exports.

(d) PRESENTATION OF AWARD.—The presentation of the award

shall be made by the President or the Secretary with such ceremonies as the President or the Secretary considers proper.

(e) PUBLICATION OF AWARD.—An entity to which an award

is made under this section may publicize the receipt of the award

by the entity and use the award in advertising of the entity.

(f) CATEGORIES FOR WHICH AWARD MAY BE GIVEN.—Separate

awards shall be made to qualifying entities in each of the following

categories:

(1) Development of new products or services for agricultural

export markets.

(2) Development of new agricultural export markets.

(3) Creative marketing of products or services in agricultural export markets.

(g) CRITERIA FOR QUALIFICATION.—An entity may qualify for

an award under this section only if the entity—

(1)(A) applies to the board established under subsection

(h) in writing for the award; or

(B) is recommended for the award by a Governor of a

State;

(2)(A) has exhibited significant entrepreneurial effort to

create new markets for United States agricultural exports or

increase United States agricultural exports; or

(B) has provided significant assistance to others in an

effort to create new markets for United States agricultural

exports or increase United States agricultural exports;

(3) has not received another award in the same category

under subsection (f) during the preceding 5-year period; and

(4) meets such other requirements and specifications as

the Secretary determines are appropriate to achieve the objectives of this section.

(h) BOARD.—

(1) SELECTION.—The Secretary shall appoint a board of

evaluators, consisting of at least 5 individuals from the private

sector selected for their knowledge and experience in exporting

United States agricultural products.

(2) MEETINGS.—The board shall meet at least once annually

to review and evaluate all applicants and entities recommended

by States under subsection (g)(1).

(3) RECOMMENDATIONS OF BOARD.—The board shall report

its recommendations concerning the making of the award to

the Secretary.

(4) TERM.—Each member of the board may serve a term

of not to exceed 3 years.

(i) FUNDING.—The Secretary may seek and accept gifts from

public and private sources to carry out this section.

SEC. 262. REPORTING REQUIREMENTS RELATING TO TOBACCO.

Section 214 of the Tobacco Adjustment Act of 1983 (7 U.S.C.

509) is repealed.

Reports.

President.
110 STAT. 974 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 263. TRIGGERED EXPORT ENHANCEMENT.

(a) READJUSTMENT OF SUPPORT LEVELS.—Section 1302 of the

Omnibus Budget Reconciliation Act of 1990 (Public Law 101–508;

7 U.S.C. 1421 note) is repealed.

(b) TRIGGERED MARKETING LOANS AND EXPORT ENHANCE- MENT.—Section 4301 of the Omnibus Trade and Competitiveness

Act of 1988 (Public Law 100–418; 7 U.S.C. 1446 note) is repealed.

(c) EFFECTIVE DATE.—The amendments made by this section

shall be effective beginning with the 1996 crops of wheat, feed

grains, upland cotton, and rice.

SEC. 264. DISPOSITION OF COMMODITIES TO PREVENT WASTE.

Section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431)

is amended—

(1) in subsection (b)—

(A) in paragraph (7)—

(i) in subparagraph (D)(iv), by striking ‘‘one year

of acquisition’’ and all that follows through the period

at the end and inserting the following: ‘‘a reasonable

length of time, as determined by the Secretary, except

that the Secretary may permit the use of proceeds

in a country other than the country of origin—

‘‘(I) as necessary to expedite the transportation of

commodities and products furnished under this subsection;

or

‘‘(II) if the proceeds are generated in a currency generally accepted in the other country.’’; and

(ii) by striking the sentence following subparagraph (F) and inserting the following: ‘‘The Secretary

may approve the use of proceeds or services realized

from the sale or barter of a commodity furnished under

this subsection by a nonprofit voluntary agency,

cooperative, or intergovernmental agency or organization to meet administrative expenses incurred in

connection with activities undertaken under this subsection.’’;

(B) in paragraph (8), by striking subparagraph (C);

and

(C) by striking paragraphs (10), (11), and (12); and

(2) by striking subsection (c).

SEC. 265. DEBT-FOR-HEALTH-AND-PROTECTION SWAP.

(a) IN GENERAL.—Section 1517 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 1706) is repealed.

(b) TECHNICAL AMENDMENT.—Subsection (e)(3) of the Food for

Progress Act of 1985 (7 U.S.C. 1736o(e)(3)) is amended by striking

‘‘section 106’’ and inserting ‘‘section 103’’.

SEC. 266. POLICY ON EXPANSION OF INTERNATIONAL MARKETS.

Section 1207 of the Agriculture and Food Act of 1981 (7 U.S.C.

1736m) is repealed.

SEC. 267. POLICY ON MAINTENANCE AND DEVELOPMENT OF EXPORT

MARKETS.

Section 1121 of the Food Security Act of 1985 (7 U.S.C. 1736p)

is amended—

(1) by striking subsection (a); and

(2) in subsection (b)—

7 USC 1421 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 975

(A) by striking ‘‘(b)’’; and

(B) by striking paragraphs (1) through (4) and inserting

the following:

‘‘(1) be the premier supplier of agricultural and food products to world markets and expand exports of high value products;

‘‘(2) support the principle of free trade and the promotion

of fair trade in agricultural commodities and products;

‘‘(3) cooperate fully in all efforts to negotiate with foreign

countries further reductions in tariff and nontariff barriers

to trade, including sanitary and phytosanitary measures and

trade-distorting subsidies;

‘‘(4) aggressively counter unfair foreign trade practices as

a means of encouraging fairer trade;’’.

SEC. 268. POLICY ON TRADE LIBERALIZATION.

Section 1122 of the Food Security Act of 1985 (7 U.S.C. 1736q)

is repealed.

SEC. 269. AGRICULTURAL TRADE NEGOTIATIONS.

Section 1123 of the Food Security Act of 1985 (7 U.S.C. 1736r)

is amended to read as follows:

‘‘SEC. 1123. TRADE NEGOTIATIONS POLICY.

‘‘(a) FINDINGS.—Congress finds that—

‘‘(1) on a level playing field, United States producers are

the most competitive suppliers of agricultural products in the

world;

‘‘(2) exports of United States agricultural products

accounted for $54,000,000,000 in 1995, contributing a net

$24,000,000,000 to the merchandise trade balance of the United

States and supporting approximately 1,000,000 jobs;

‘‘(3) increased agricultural exports are critical to the future

of the farm, rural, and overall United States economy, but

the opportunities for increased agricultural exports are limited

by the unfair subsidies of the competitors of the United States,

and a variety of tariff and nontariff barriers to highly competitive United States agricultural products;

‘‘(4) international negotiations can play a key role in breaking down barriers to United States agricultural exports;

‘‘(5) the Uruguay Round Agreement on Agriculture made

significant progress in the attainment of increased market

access opportunities for United States exports of agricultural

products, for the first time—

‘‘(A) restraining foreign trade-distorting domestic support and export subsidy programs; and

‘‘(B) developing common rules for the application of

sanitary and phytosanitary restrictions;

that should result in increased exports of United States agricultural products, jobs, and income growth in the United States;

‘‘(6) the Uruguay Round Agreement on Agriculture did

not succeed in completely eliminating trade distorting domestic

support and export subsidies by—

‘‘(A) allowing the European Union to continue

unreasonable levels of spending on export subsidies; and

‘‘(B) failing to discipline monopolistic state trading entities, such as the Canadian Wheat Board, that use
110 STAT. 976 PUBLIC LAW 104–127—APR. 4, 1996

nontransparent and discriminatory pricing as a hidden de

facto export subsidy;

‘‘(7) during the period 1996 through 2002, there will be

several opportunities for the United States to negotiate fairer

trade in agricultural products, including further negotiations

under the World Trade Organization, and steps toward possible

free trade agreements of the Americas and Asian-Pacific Economic Cooperation (APEC); and

‘‘(8) the United States should aggressively use these

opportunities to achieve more open and fair opportunities for

trade in agricultural products.

‘‘(b) GOALS OF THE UNITED STATES IN AGRICULTURAL TRADE

NEGOTIATIONS.—The objectives of the United States with respect

to future negotiations on agricultural trade include—

‘‘(1) increasing opportunities for United States exports of

agricultural products by eliminating tariff and nontariff barriers to trade;

‘‘(2) leveling the playing field for United States producers

of agricultural products by limiting per unit domestic production supports to levels that are no greater than those available

in the United States;

‘‘(3) ending the practice of export dumping by eliminating

all trade distorting export subsidies and disciplining state trading entities so that they do not (except in cases of bona fide

food aid) sell in foreign markets at prices below domestic market

prices or prices below their full costs of acquiring and delivering

agricultural products to the foreign markets; and

‘‘(4) encouraging government policies that avoid pricedepressing surpluses.’’.

SEC. 270. POLICY ON UNFAIR TRADE PRACTICES.

Section 1164 of the Food Security Act of 1985 (Public Law

99–198; 99 Stat. 1499) is repealed.

SEC. 271. AGRICULTURAL AID AND TRADE MISSIONS.

(a) IN GENERAL.—The Agricultural Aid and Trade Missions

Act (7 U.S.C. 1736bb et seq.) is repealed.

(b) CONFORMING AMENDMENT.—Section 7 of Public Law 100–

277 (7 U.S.C. 1736bb note) is repealed.

SEC. 272. ANNUAL REPORTS BY AGRICULTURAL ATTACHES.

Section 108(b)(1)(B) of the Agricultural Act of 1954 (7 U.S.C.

1748(b)(1)(B)) is amended by striking ‘‘including fruits, vegetables,

legumes, popcorn and ducks’’.

SEC. 273. WORLD LIVESTOCK MARKET PRICE INFORMATION.

Section 1545 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 7 U.S.C. 1761 note) is repealed.

SEC. 274. ORDERLY LIQUIDATION OF STOCKS.

Sections 201 and 207 of the Agricultural Act of 1956 (7 U.S.C.

1851 and 1857) are repealed.

SEC. 275. SALES OF EXTRA LONG STAPLE COTTON.

Section 202 of the Agricultural Act of 1956 (7 U.S.C. 1852)

is repealed.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 977

SEC. 276. REGULATIONS.

Section 707 of the Freedom for Russia and Emerging Eurasian

Democracies and Open Markets Support Act of 1992 (Public Law

102–511; 7 U.S.C. 5621 note) is amended by striking subsection

(d).

SEC. 277. EMERGING MARKETS.

(a) PROMOTION OF AGRICULTURAL EXPORTS TO EMERGING MARKETS.—

(1) EMERGING MARKETS.—Section 1542 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–

624; 7 U.S.C. 5622 note) is amended—

(A) in the section heading, by striking ‘‘EMERGING

DEMOCRACIES’’ and inserting ‘‘EMERGING MARKETS’’;

(B) by striking ‘‘emerging democracies’’ each place it

appears in subsections (b), (d), and (e) and inserting

‘‘emerging markets’’;

(C) in subsection (c), by striking ‘‘emerging democracy’’

each place it appears and inserting ‘‘emerging market’’;

and

(D) by striking subsection (f) and inserting the following:

‘‘(f) EMERGING MARKET.—In this section and section 1543, the

term ‘emerging market’ means any country that the Secretary determines—

‘‘(1) is taking steps toward a market-oriented economy

through the food, agriculture, or rural business sectors of the

economy of the country; and

‘‘(2) has the potential to provide a viable and significant

market for United States agricultural commodities or products

of United States agricultural commodities.’’.

(2) FUNDING.—Section 1542 of the Food, Agriculture, Conservation, and Trade Act of 1990 is amended by striking subsection (a) and inserting the following:

‘‘(a) FUNDING.—The Commodity Credit Corporation shall make

available for fiscal years 1996 through 2002 not less than

$1,000,000,000 of direct credits or export credit guarantees for

exports to emerging markets under section 201 or 202 of the Agricultural Trade Act of 1978 (7 U.S.C. 5621 and 5622), in addition

to the amounts acquired or authorized under section 211 of the

Act (7 U.S.C. 5641) for the program.’’.

(3) AGRICULTURAL FELLOWSHIP PROGRAM.—Section 1542 of

the Food, Agriculture, Conservation, and Trade Act of 1990

is amended—

(A) in subsection (b), by striking the last sentence

and inserting the following: ‘‘The Commodity Credit Corporation shall give priority under this subsection to—

‘‘(A) projects that encourage the privatization of the agricultural sector or that benefit private farms or cooperatives in

emerging markets; and

‘‘(B) projects for which nongovernmental persons agree to

assume a relatively larger share of the costs.’’; and

(B) in subsection (d)—

(i) in the matter preceding paragraph (1), by striking ‘‘the Soviet Union’’ and inserting ‘‘emerging markets’’;

(ii) in paragraph (1)—
110 STAT. 978 PUBLIC LAW 104–127—APR. 4, 1996

(I) in subparagraph (A)(i)—

(aa) by striking ‘‘1995’’ and inserting

‘‘2002’’; and

(bb) by striking ‘‘those systems, and identify’’ and inserting ‘‘the systems, including

potential reductions in trade barriers, and

identify and carry out’’;

(II) in subparagraph (B), by striking ‘‘shall’’

and inserting ‘‘may’’;

(III) in subparagraph (D), by inserting

‘‘(including the establishment of extension services)’’ after ‘‘technical assistance’’;

(IV) by striking subparagraph (F); and

(V) by redesignating subparagraphs (G), (H),

and (I) as subparagraphs (F), (G), and (H), respectively;

(iii) in paragraph (2)—

(I) by striking ‘‘the Soviet Union’’ each place

it appears and inserting ‘‘emerging markets’’;

(II) in subparagraph (A), by striking ‘‘a free

market food production and distribution system’’

and inserting ‘‘free market food production and

distribution systems’’;

(III) in subparagraph (B)—

(aa) in clause (i), by striking ‘‘Government’’ and inserting ‘‘governments’’;

(bb) in clause (iii)(II), by striking ‘‘and’’

at the end;

(cc) in clause (iii)(III), by striking the

period at the end and inserting ‘‘; and’’; and

(dd) by adding at the end of clause (iii)

the following:

‘‘(IV) to provide for the exchange of administrators and faculty members from agricultural and

other institutions to strengthen and revise educational programs in agricultural economics, agribusiness, and agrarian law, to support change

towards a free market economy in emerging markets.’’;

(IV) by striking subparagraph (D); and

(V) by redesignating subparagraph (E) as

subparagraph (D); and

(iv) by striking paragraph (3).

(4) UNITED STATES AGRICULTURAL COMMODITY.—Subsections (b) and (c) of section 1542 of the Food, Agriculture,

Conservation, and Trade Act of 1990 are amended by striking

‘‘section 101(6)’’ each place it appears and inserting ‘‘section

102(7)’’.

(5) REPORT.—The first sentence of section 1542(e)(2) of

the Food, Agriculture, Conservation, and Trade Act of 1990

is amended by striking ‘‘Not’’ and inserting ‘‘Subject to section

217 of the Department of Agriculture Reorganization Act of

1994 (7 U.S.C. 6917), not’’.

(b) AGRICULTURAL FELLOWSHIP PROGRAM FOR MIDDLE INCOME

COUNTRIES, EMERGING DEMOCRACIES, AND EMERGING MARKETS.—

Section 1543 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 3293) is amended—

7 USC 5622 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 979

(1) in the section heading, by striking ‘‘MIDDLE INCOME

COUNTRIES AND EMERGING DEMOCRACIES’’ and inserting ‘‘MID- DLE INCOME COUNTRIES, EMERGING DEMOCRACIES, AND

EMERGING MARKETS’’;

(2) in subsection (b), by adding at the end the following:

‘‘(5) EMERGING MARKET.—Any emerging market, as defined

in section 1542(f).’’; and

(3) in subsection (c)(1), by striking ‘‘food needs’’ and inserting ‘‘food and fiber needs’’.

(c) CONFORMING AMENDMENTS.—

(1) Section 501 of the Agricultural Trade Development and

Assistance Act of 1954 (7 U.S.C. 1737) is amended—

(A) in subsection (a), by striking ‘‘emerging democracies’’ and inserting ‘‘emerging markets’’; and

(B) in subsection (b), by striking paragraph (1) and

inserting the following:

‘‘(1) EMERGING MARKET.—The term ‘emerging market’

means any country that the Secretary determines—

‘‘(A) is taking steps toward a market-oriented economy

through the food, agriculture, or rural business sectors

of the economy of the country; and

‘‘(B) has the potential to provide a viable and significant market for United States agricultural commodities

or products of United States agricultural commodities.’’.

(2) Section 201(d)(1)(C)(ii) of the Agricultural Trade Act

of 1978 (7 U.S.C. 5621(d)(1)(C)(ii)) is amended by striking

‘‘emerging democracies’’ and inserting ‘‘emerging markets’’.

(3) Section 202(d)(3)(B) of the Agricultural Trade Act of

1978 (7 U.S.C. 5622(d)(3)(B)) is amended by striking ‘‘emerging

democracies’’ and inserting ‘‘emerging markets’’.

SEC. 278. REIMBURSEMENT FOR OVERHEAD EXPENSES.

Section 1542(d)(1)(D) of the Food, Agriculture, Conservation,

and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 5622 note)

is amended by adding at the end the following: ‘‘Notwithstanding

any other provision of law, the assistance shall include assistance

for administrative and overhead expenses of the International

Cooperation and Development Program Area of the Foreign Agriculture Service, to the extent that the expenses were incurred

pursuant to reimbursable agreements entered into prior to September 30, 1993, the expenses do not exceed $2,000,000 per year,

and the expenses are not incurred for information technology systems.’’.

SEC. 279. LABELING OF DOMESTIC AND IMPORTED LAMB AND MUTTON.

Section 7 of the Federal Meat Inspection Act (21 U.S.C. 607)

is amended by adding at the end the following:

‘‘(f) LAMB AND MUTTON.—The Secretary, consistent with United

States international obligations, shall establish standards for the

labeling of sheep carcasses, parts of sheep carcasses, sheepmeat,

and sheepmeat food products.’’.

SEC. 280. IMPORT ASSISTANCE FOR CBI BENEFICIARY COUNTRIES AND

THE PHILIPPINES.

Section 583 of Public Law 100–202 (101 Stat. 1329–182) is

repealed.

Standards.
110 STAT. 980 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 281. STUDIES, REPORTS, AND OTHER PROVISIONS.

(a) IN GENERAL.—Sections 1551 through 1555, section 1558,

and section 1559 of subtitle E of title XV of the Food, Agriculture,

Conservation, and Trade Act of 1990 (Public Law 101–624; 104

Stat. 3696) (as redesignated by section 1011(d) of the Federal

Reports Elimination and Sunset Act of 1995 (Public Law 104–

66; 109 Stat. 709)) are repealed.

(b) LANGUAGE PROFICIENCY.—Section 1556 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–

624; 7 U.S.C. 5694 note) is amended by striking subsection (c).

SEC. 282. SENSE OF CONGRESS CONCERNING MULTILATERAL DISCIPLINES ON CREDIT GUARANTEES.

It is the sense of Congress that—

(1) in negotiations to establish multilateral disciplines on

agricultural export credits and credit guarantees, the United

States should not agree to any arrangement that is incompatible with the provisions of United States law that authorize

agricultural export credits and credit guarantees;

(2) in the negotiations (which are held under the auspices

of the Organization for Economic Cooperation and Development), the United States should not reach any agreement that

fails to impose disciplines on the practices of foreign government

trading entities such as the Australian Wheat Board, the

Canadian Wheat Board, the New Zealand Dairy Board, and

the Australian Dairy Board; and

(3) the disciplines should include greater openness in the

operations of the entities as long as the entities are subsidized

by the foreign government or have monopolies for exports of

a commodity that are sanctioned by the foreign government.

SEC. 283. INTERNATIONAL COTTON ADVISORY COMMITTEE.

(a) IN GENERAL.—The President shall ensure that the Government of the United States participates as a full member of the

International Cotton Advisory Committee.

(b) REPRESENTATION BY THE SECRETARY.—The Secretary of

Agriculture shall represent the Government of the United States

as a member of the International Cotton Advisory Committee and

shall delegate the primary responsibility to represent the Government of the United States to appropriately qualified individuals.

TITLE III—CONSERVATION

Subtitle A—Definitions

SEC. 301. DEFINITIONS APPLICABLE TO HIGHLY ERODIBLE CROPLAND

CONSERVATION.

(a) CONSERVATION PLAN AND CONSERVATION SYSTEM.—Section

1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is

amended—

(1) by redesignating paragraphs (2) through (16) as paragraphs (4) through (18), respectively; and

(2) by inserting after paragraph (1) the following:

‘‘(2) CONSERVATION PLAN.—The term ‘conservation plan’

means the document that—

‘‘(A) applies to highly erodible cropland;

President.

22 USC 288 note.

7 USC 624 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 981

‘‘(B) describes the conservation system applicable to

the highly erodible cropland and describes the decisions

of the person with respect to location, land use, tillage

systems, and conservation treatment measures and schedule; and

‘‘(C) is approved by the local soil conservation district,

in consultation with the local committees established under

section 8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) and the Secretary, or by

the Secretary.

‘‘(3) CONSERVATION SYSTEM.—The term ‘conservation system’ means a combination of 1 or more conservation measures

or management practices that—

‘‘(A) are based on local resource conditions, available

conservation technology, and the standards and guidelines

contained in the Natural Resources Conservation Service

field office technical guides; and

‘‘(B) are designed to achieve, in a cost effective and

technically practicable manner, a substantial reduction in

soil erosion or a substantial improvement in soil conditions

on a field or group of fields containing highly erodible

cropland when compared to the level of erosion or soil

conditions that existed before the application of the conservation measures and management practices.’’.

(b) FIELD.—Section 1201(a) of the Food Security Act of 1985

is amended by striking paragraph (7) (as redesignated by subsection

(a)(1)) and inserting the following:

‘‘(7) FIELD.—The term ‘field’ means a part of a farm that

is separated from the balance of the farm by permanent boundaries such as fences, roads, permanent waterways, or other

similar features. At the option of the owner or operator of

the farm, croplines may also be used to delineate a field if

farming practices make it probable that the croplines are not

subject to change. Any highly erodible land on which an agricultural commodity is produced after December 23, 1985, and

that is not exempt under section 1212, shall be considered

as part of the field in which the land was included on December

23, 1985, unless the owner and Secretary agree to modification

of the boundaries of the field to carry out this title.’’.

(c) HIGHLY ERODIBLE LAND.—Section 1201(a)(9) of the Food

Security Act of 1985 (as redesignated by subsection (a)(1)) is amended by adding at the end the following:

‘‘(C) EQUATIONS.—Not later than 60 days after the

date of enactment of this subparagraph, the Secretary shall

publish in the Federal Register the universal soil loss equation and wind erosion equation used by the Department

of Agriculture as of that date. The Secretary may not

change the equations after that date except following notice

and comment in a manner consistent with section 553

of title 5, United States Code.’’.

(d) CONFORMING AMENDMENTS.—Section 1212 of the Food Security Act of 1985 (16 U.S.C. 3812) is amended—

(1) in the first sentence of subsection (a)(2), by striking

‘‘that documents’’ and all that follows through ‘‘by the Secretary’’;

Federal Register,

publication.

16 USC 3801.
110 STAT. 982 PUBLIC LAW 104–127—APR. 4, 1996

(2) in subsection (c)(3), by striking ‘‘based on’’ and all

that follows through ‘‘and the Secretary,’’ and inserting ‘‘, in

which case,’’;

(3) in subsection (e)(1)(A), by striking ‘‘conservation compliance plan’’ and inserting ‘‘conservation plan’’; and

(4) in subsection (f)—

(A) in paragraph (1), by striking ‘‘that documents’’ and

all that follows through ‘‘under subsection (a)’’;

(B) in paragraph (3), by striking ‘‘prepared under subsection (a)’’; and

(C) in paragraph (4), by striking ‘‘that documents’’ and

all that follows through ‘‘subsection (a)’’.

Subtitle B—Highly Erodible Land

Conservation

SEC. 311. PROGRAM INELIGIBILITY.

Effective 90 days after the date of enactment of this Act,

section 1211 of the Food Security Act of 1985 (16 U.S.C. 3811)

is amended—

(1) in the matter preceding paragraph (1), by striking ‘‘following the date of enactment of this Act,’’;

(2) in paragraph (1)—

(A) by striking subparagraph (A) and inserting the

following:

‘‘(A) contract payments under a production flexibility

contract, marketing assistance loans, and any type of price

support or payment made available under the Agricultural

Market Transition Act, the Commodity Credit Corporation

Charter Act (15 U.S.C. 714 et seq.), or any other Act;’’;

(B) by striking subparagraph (C);

(C) in subparagraph (D), by striking ‘‘made under’’

and all that follows through ‘‘August 14, 1989’’;

(D) in subparagraph (E), by striking ‘‘Farmers Home

Administration’’ and inserting ‘‘Consolidated Farm Service

Agency’’; and

(E) by redesignating subparagraphs (D) and (E) as

subparagraphs (C) and (D), respectively; and

(3) by striking paragraph (3) and inserting the following:

‘‘(3) during the crop year—

‘‘(A) a payment made pursuant to a contract entered

into under the environmental quality incentives program

under chapter 4 of subtitle D;

‘‘(B) a payment under any other provision of subtitle

D;

‘‘(C) a payment under section 401 or 402 of the Agricultural Credit Act of 1978 (16 U.S.C. 2201 and 2202); or

‘‘(D) a payment, loan, or other assistance under section

3 or 8 of the Watershed Protection and Flood Prevention

Act (16 U.S.C. 1003 and 1006a).’’.

SEC. 312. CONSERVATION RESERVE LANDS.

Section 1212(a)(3) of the Food Security Act of 1985 (16 U.S.C.

3812(a)(3)) is amended by striking ‘‘shall, if the conservation plan

established under this subtitle for such land requires structures

to be constructed,’’ and inserting ‘‘shall only be required to apply

Effective date.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 983

a conservation plan established under this subtitle. The person

shall not be required to meet a higher conservation standard than

the standard applied to other highly erodible cropland located

within the same area. If the person’s conservation plan requires

structures to be constructed, the person shall’’.

SEC. 313. GOOD FAITH EXEMPTION.

(a) GRACE PERIOD TO RESUME CONSERVATION COMPLIANCE.—

Section 1212(f)(1) of the Food Security Act of 1985 (16 U.S.C.

3812(f)(1)) is amended—

(1) by striking ‘‘Except to the extent provided in paragraph

(2), no’’ and inserting ‘‘No’’; and

(2) by striking ‘‘such person has—’’ and all that follows

through the period at the end of subparagraph (B) and inserting

the following: ‘‘the person has acted in good faith and without

an intent to violate this subtitle. A person who meets the

requirements of this paragraph shall be allowed a reasonable

period of time, as determined by the Secretary, but not to

exceed 1 year, during which to implement the measures and

practices necessary to be considered to be actively applying

the person’s conservation plan.’’.

(b) SPECIAL PENALTIES REGARDING CERTAIN HIGHLY ERODIBLE

CROPLAND.—Section 1212(f)(2) of the Food Security Act of 1985

(16 U.S.C. 3812(f)(2)) is amended by striking ‘‘meets the requirements of paragraph (1)’’ and inserting ‘‘with respect to highly erodible cropland that was not in production prior to December 23,

1985, and has acted in good faith and without an intent to violate

the provisions’’.

(c) CONFORMING AMENDMENT.—Section 1212(f)(4) of the Food

Security Act of 1985 (16 U.S.C. 3812(f)(4)) is amended by striking

the last sentence.

SEC. 314. EXPEDITED PROCEDURES FOR GRANTING VARIANCES FROM

CONSERVATION PLANS.

Section 1212(f) of the Food Security Act of 1985 (16 U.S.C.

3812(f)(4)) is amended—

(1) in paragraph (4)(C), by striking ‘‘problem’’ and inserting

‘‘problem, including weather, pest, and disease problems’’; and

(2) by adding at the end the following:

‘‘(5) EXPEDITED PROCEDURES FOR TEMPORARY VARIANCES.—

After consultation with local conservation districts, the Secretary shall establish expedited procedures for the consideration

and granting of temporary variances under paragraph (4)(C).

If the request for a temporary variance under paragraph (4)(C)

involves the use of practices or measures to address weather,

pest, or disease problems, the Secretary shall make a decision

on whether to grant the variance during the 30-day period

beginning on the date of receipt of the request. If the Secretary

fails to render a decision during the period, the temporary

variance shall be considered granted.’’.

SEC. 315. DEVELOPMENT AND IMPLEMENTATION OF CONSERVATION

PLANS AND CONSERVATION SYSTEMS.

(a) DEVELOPMENT AND IMPLEMENTATION.—The Food Security

Act of 1985 is amended—

(1) by redesignating section 1213 (16 U.S.C. 3813) as section 1214; and
110 STAT. 984 PUBLIC LAW 104–127—APR. 4, 1996

(2) by inserting after section 1212 (16 U.S.C. 3812) the

following:

‘‘SEC. 1213. DEVELOPMENT AND IMPLEMENTATION OF CONSERVATION

PLANS AND CONSERVATION SYSTEMS.

‘‘(a) TECHNICAL REQUIREMENTS.—In connection with the standards and guidelines contained in Natural Resources Conservation

Service field office technical guides applicable to the development

and use of conservation measures and management practices as

part of a conservation system, the Secretary shall ensure that

the standards and guidelines permit a person to use a conservation

system that—

‘‘(1) is technically and economically feasible;

‘‘(2) is based on local resource conditions and available

conservation technology;

‘‘(3) is cost-effective; and

‘‘(4) does not cause undue economic hardship on the person

applying the conservation system under the person’s conservation plan.

‘‘(b) MEASUREMENT OF EROSION REDUCTION.—For the purpose

of determining whether there is a substantial reduction in soil

erosion on a field containing highly erodible cropland, the measurement of erosion reduction achieved by the application of a conservation system under a person’s conservation plan shall be based

on the estimated annual level of erosion at the time of the measurement compared to the estimated annual level of erosion that existed

before the implementation of the conservation measures and

management practices provided for in the conservation system.

‘‘(c) RESIDUE MEASUREMENT.—

‘‘(1) RESPONSIBILITIES OF THE SECRETARY.—For the purpose

of measuring the level of residue on a field, the Secretary

shall—

‘‘(A) take into account any residue incorporated into

the top 2 inches of soil, as well as the growing crop,

in the measurement;

‘‘(B) provide technical guidelines for acceptable residue

measurement methods;

‘‘(C) provide a certification system for third parties

to perform residue measurements; and

‘‘(D) provide for the acceptance and use of information

and data voluntarily provided by the producer regarding

the field.

‘‘(2) ACCEPTANCE OF PRODUCER MEASUREMENTS.—Annual

residue measurements supplied by a producer (including

measurements performed by a certified third party) shall be

used by the Secretary if the Secretary determines that the

measurements indicate that the residue level for the field meets

the level required under the conservation plan.

‘‘(d) CERTIFICATION OF COMPLIANCE.—

‘‘(1) IN GENERAL.—For the purpose of determining the eligibility of a person for program benefits specified in section

1211 at the time application is made for the benefits, the

Secretary shall permit the person to certify that the person

is complying with the person’s conservation plan.

‘‘(2) STATUS REVIEWS.—If a person makes a certification

under paragraph (1), the Secretary shall not be required to

carry out a review of the status of compliance of the person

16 USC 3812a.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 985

with the conservation plan under which the conservation system is being applied.

‘‘(3) REVISIONS AND MODIFICATIONS.—The Secretary shall

permit a person who makes a certification under paragraph

(1) with respect to a conservation plan to revise the conservation

plan in any manner, if the same level of conservation treatment

provided for by the conservation system under the person’s

conservation plan is maintained. The Secretary may not revise

the person’s conservation plan without the concurrence of the

person.

‘‘(e) TECHNICAL ASSISTANCE.—The Secretary shall, using available resources and consistent with the Secretary’s other conservation responsibilities and objectives, provide technical assistance to

a person throughout the development, revision, and application

of the conservation plan and any conservation system of the person.

At the request of the person, the Secretary may provide technical

assistance regarding conservation measures and management practices for other lands of the person that do not contain highly

erodible cropland.

‘‘(f) ENCOURAGEMENT OF ON-FARM RESEARCH.—To encourage

on-farm conservation research, the Secretary may allow a person

to include in the person’s conservation plan or a conservation system

under the plan, on a field trial basis, practices that are not currently

approved but that the Secretary considers have a reasonable likelihood of success.’’.

(b) TREATMENT OF TECHNICAL DETERMINATIONS.—Section

226(d)(2) of the Department of Agriculture Reorganization Act of

1994 (7 U.S.C. 6932(d)(2)) is amended—

(1) by striking ‘‘DETERMINATION.—With’’ and inserting ‘‘DETERMINATION.— ‘‘(A) IN GENERAL.—With’’; and

(2) by adding at the end the following:

‘‘(B) ECONOMIC HARDSHIP.—After a technical determination has been made, on a producer’s request, if a

county or area committee determines that the application

of the producer’s conservation system would impose an

undue economic hardship on the producer, the committee

shall provide the producer with relief to avoid the hardship.’’.

SEC. 316. INVESTIGATION OF POSSIBLE COMPLIANCE DEFICIENCIES.

Subtitle B of title XII of the Food Security Act of 1985 (as

amended by section 315(a)(1)) is amended by adding at the end

the following:

‘‘SEC. 1215. NOTICE AND INVESTIGATION OF POSSIBLE COMPLIANCE

DEFICIENCIES.

‘‘(a) IN GENERAL.—An employee of the Department of Agriculture who observes a possible compliance deficiency or other

potential violation of a conservation plan or this subtitle while

providing on-site technical assistance shall provide to the responsible persons, not later than 45 days after observing the possible

violation, information regarding actions needed to comply with the

plan and this subtitle. The employee shall provide the information

in lieu of reporting the observation as a compliance violation.

‘‘(b) CORRECTIVE ACTION.—The responsible persons shall

attempt to correct the deficiencies as soon as practicable after

receiving the information.

16 USC 3814.
110 STAT. 986 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(c) REVIEW.—If the corrective action is not fully implemented

not later than 1 year after the responsible persons receive the

information, the Secretary may conduct a review of the status

of compliance of the persons with the conservation plan and this

subtitle.’’.

SEC. 317. WIND EROSION ESTIMATION PILOT PROJECT.

(a) IN GENERAL.—The Secretary of Agriculture shall conduct

a pilot project to review, and modify as appropriate, the use of

wind erosion factors under the highly erodible conservation requirements of subtitle B of title XII of the Food Security Act of 1985

(16 U.S.C. 3811 et seq.).

(b) SELECTION OF COUNTIES AND PRODUCERS.—The pilot project

shall be conducted for producers in those counties that—

(1) have approximately 100 percent of their cropland determined to be highly erodible under title XII of the Act;

(2) have a reasonable likelihood that the use of wind erosion

factors under title XII of the Act have resulted in an inequitable

application of the highly erodible land requirements of title

XII of the Act; and

(3) if the use of the land classification system under section

1201(a)(9)(A) of the Act (as redesignated by section 301(a)(1))

may result in a more accurate delineation of the cropland.

(c) ERRORS IN DELINEATION.—If the Secretary determines that

a significant error has occurred in delineating cropland under the

pilot project, the Secretary shall, at the request of the owners

or operators of the cropland, conduct a new delineation of the

cropland using the most accurate available delineation process,

as determined by the Secretary.

Subtitle C—Wetland Conservation

SEC. 321. PROGRAM INELIGIBILITY.

(a) PROGRAM INELIGIBILITY.—Section 1221 of the Food Security

Act of 1985 (16 U.S.C. 3821) is amended—

(1) by redesignating subsection (b) as subsection (c); and

(2) by striking the section heading and all that follows

through the end of subsection (a) and inserting the following:

‘‘SEC. 1221. PROGRAM INELIGIBILITY.

‘‘(a) PRODUCTION ON CONVERTED WETLAND.—Except as provided in this subtitle and notwithstanding any other provision

of law, any person who in any crop year produces an agricultural

commodity on converted wetland, as determined by the Secretary,

shall be—

‘‘(1) in violation of this section; and

‘‘(2) ineligible for loans or payments in an amount determined by the Secretary to be proportionate to the severity

of the violation.

‘‘(b) INELIGIBILITY FOR CERTAIN LOANS AND PAYMENTS.—If a

person is determined to have committed a violation under subsection

(a) during a crop year, the Secretary shall determine which of,

and the amount of, the following loans and payments for which

the person shall be ineligible:

‘‘(1) Contract payments under a production flexibility contract, marketing assistance loans, and any type of price support

or payment made available under the Agricultural Market

16 USC 3811

note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 987

Transition Act, the Commodity Credit Corporation Charter Act

(15 U.S.C. 714 et seq.), or any other Act.

‘‘(2) A loan made or guaranteed under the Consolidated

Farm and Rural Development Act (7 U.S.C. 1921 et seq.) or

any other provision of law administered by the Consolidated

Farm Service Agency, if the Secretary determines that the

proceeds of the loan will be used for a purpose that will contribute to conversion of a wetland (other than as provided in

this subtitle) to produce an agricultural commodity.

‘‘(3) During the crop year:

‘‘(A) A payment made pursuant to a contract entered

into under the environmental quality incentives program

under chapter 4 of subtitle D.

‘‘(B) A payment under any other provision of subtitle

D.

‘‘(C) A payment under section 401 or 402 of the Agricultural Credit Act of 1978 (16 U.S.C. 2201 and 2202).

‘‘(D) A payment, loan, or other assistance under section

3 or 8 of the Watershed Protection and Flood Prevention

Act (16 U.S.C. 1003 and 1006a).’’.

(b) CONFORMING AMENDMENTS.—

(1) Section 1221(c) of the Food Security Act of 1985 (as

redesignated by subsection (a)(1)) is amended—

(A) by striking ‘‘Except’’ and inserting ‘‘WETLAND

CONVERSION.—Except’’;

(B) by striking ‘‘subsequent to the date of enactment

of the Food, Agriculture, Conservation, and Trade Act of

1990’’ and inserting ‘‘beginning after November 28, 1990,’’;

and

(C) by striking ‘‘subsections (a) (1) through (3)’’ and

inserting ‘‘subsection (b)’’.

(2) Section 1221 of the Food Security Act of 1985 (as

amended by subsection (a)) is amended by adding at the end

the following:

‘‘(d) PRIOR LOANS.—This section shall not apply to a loan

described in subsection (b) made before December 23, 1985.’’.

SEC. 322. DELINEATION OF WETLANDS; EXEMPTIONS TO PROGRAM

INELIGIBILITY.

(a) DELINEATION OF WETLANDS.—Section 1222 of the Food Security Act of 1985 (16 U.S.C. 3822) is amended by striking subsection

(a) and inserting the following:

‘‘(a) DELINEATION BY THE SECRETARY.—

‘‘(1) IN GENERAL.—Subject to subsection (b) and paragraph

(6), the Secretary shall delineate, determine, and certify all

wetlands located on subject land on a farm.

‘‘(2) WETLAND DELINEATION MAPS.—The Secretary shall

delineate wetlands on wetland delineation maps. On the request

of a person, the Secretary shall make a reasonable effort to

make an on-site wetland determination prior to delineation.

‘‘(3) CERTIFICATION.—On providing notice to affected persons, the Secretary shall—

‘‘(A) certify whether a map is sufficient for the purpose

of making a determination of ineligibility for program benefits under section 1221; and

‘‘(B) provide an opportunity to appeal the certification

prior to the certification becoming final.

16 USC 3821.
110 STAT. 988 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(4) DURATION OF CERTIFICATION.—A final certification

made under paragraph (3) shall remain valid and in effect

as long as the area is devoted to an agricultural use or until

such time as the person affected by the certification requests

review of the certification by the Secretary.

‘‘(5) REVIEW OF MAPPING ON APPEAL.—In the case of an

appeal of the Secretary’s certification, the Secretary shall

review and certify the accuracy of the mapping of all land

subject to the appeal to ensure that the subject land has been

accurately delineated. Prior to rendering a decision on the

appeal, the Secretary shall conduct an on-site inspection of

the subject land on a farm.

‘‘(6) RELIANCE ON PRIOR CERTIFIED DELINEATION.—No person shall be adversely affected because of having taken an

action based on a previous certified wetland delineation by

the Secretary. The delineation shall not be subject to a subsequent wetland certification or delineation by the Secretary,

unless requested by the person under paragraph (4).’’.

(b) EXEMPTIONS.—Section 1222 of the Food Security Act of

1985 (16 U.S.C. 3822) is amended by striking subsection (b) and

inserting the following:

‘‘(b) EXEMPTIONS.—No person shall become ineligible under section 1221 for program loans or payments under the following circumstances:

‘‘(1) As the result of the production of an agricultural

commodity on the following lands:

‘‘(A) A converted wetland if the conversion of the wetland was commenced before December 23, 1985.

‘‘(B) Land that is a nontidal drainage or irrigation

ditch excavated in upland.

‘‘(C) A wet area created by a water delivery system,

irrigation, irrigation system, or application of water for

irrigation.

‘‘(D) A wetland on which the owner or operator of

a farm or ranch uses normal cropping or ranching practices

to produce an agricultural commodity in a manner that

is consistent for the area where the production is possible

as a result of a natural condition, such as drought, and

is without action by the producer that destroys a natural

wetland characteristic.

‘‘(E) Land that is an artificial lake or pond created

by excavating or diking land (that is not a wetland) to

collect and retain water and that is used primarily for

livestock watering, fish production, irrigation, wildlife, fire

control, flood control, cranberry growing, or rice production,

or as a settling pond.

‘‘(F) A wetland that is temporarily or incidentally created as a result of adjacent development activity.

‘‘(G) A converted wetland if the original conversion

of the wetland was commenced before December 23, 1985,

and the Secretary determines the wetland characteristics

returned after that date as a result of—

‘‘(i) the lack of maintenance of drainage, dikes,

levees, or similar structures;

‘‘(ii) a lack of management of the lands containing

the wetland; or
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 989

‘‘(iii) circumstances beyond the control of the person.

‘‘(H) A converted wetland, if—

‘‘(i) the converted wetland was determined by the

Natural Resources Conservation Service to have been

manipulated for the production of an agricultural

commodity or forage prior to December 23, 1985, and

was returned to wetland conditions through a voluntary restoration, enhancement, or creation action

subsequent to that determination;

‘‘(ii) technical determinations regarding the prior

site conditions and the restoration, enhancement, or

creation action have been adequately documented by

the Natural Resources Conservation Service;

‘‘(iii) the proposed conversion action is approved

by the Natural Resources Conservation Service prior

to implementation; and

‘‘(iv) the extent of the proposed conversion is limited so that the conditions will be at least equivalent

to the wetland functions and values that existed prior

to implementation of the voluntary wetland restoration, enhancement, or creation action.

‘‘(2) For the conversion of the following:

‘‘(A) An artificial lake or pond created by excavating

or diking land that is not a wetland to collect and retain

water and that is used primarily for livestock watering,

fish production, irrigation, wildlife, fire control, flood control, cranberry growing, rice production, or as a settling

pond.

‘‘(B) A wetland that is temporarily or incidentally created as a result of adjacent development activity.

‘‘(C) A wetland on which the owner or operator of

a farm or ranch uses normal cropping or ranching practices

to produce an agricultural commodity in a manner that

is consistent for the area where the production is possible

as a result of a natural condition, such as drought, and

is without action by the producer that destroys a natural

wetland characteristic.

‘‘(D) A wetland previously identified as a converted

wetland (if the original conversion of the wetland was

commenced before December 23, 1985), but that the Secretary determines returned to wetland status after that

date as a result of—

‘‘(i) the lack of maintenance of drainage, dikes,

levees, or similar structures;

‘‘(ii) a lack of management of the lands containing

the wetland; or

‘‘(iii) circumstances beyond the control of the person.

‘‘(E) A wetland, if—

‘‘(i) the wetland was determined by the Natural

Resources Conservation Service to have been manipulated for the production of an agricultural commodity

or forage prior to December 23, 1985, and was returned

to wetland conditions through a voluntary restoration,

enhancement, or creation action subsequent to that

determination;
110 STAT. 990 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(ii) technical determinations regarding the prior

site conditions and the restoration, enhancement, or

creation action have been adequately documented by

the Natural Resources Conservation Service;

‘‘(iii) the proposed conversion action is approved

by the Natural Resources Conservation Service prior

to implementation; and

‘‘(iv) the extent of the proposed conversion is limited so that the conditions will be at least equivalent

to the wetland functions and values that existed prior

to implementation of the voluntary wetland restoration, enhancement, or creation action.’’.

(c) IDENTIFICATION OF MINIMAL EFFECT EXEMPTIONS.—Section

1222 of the Food Security Act of 1985 (16 U.S.C. 3822) is amended

by striking subsection (d) and inserting the following:

‘‘(d) IDENTIFICATION OF MINIMAL EFFECT EXEMPTIONS.—For

purposes of applying the minimal effect exemption under subsection

(f)(1), the Secretary shall identify by regulation categorical minimal

effect exemptions on a regional basis to assist persons in avoiding

a violation of the ineligibility provisions of section 1221. The Secretary shall ensure that employees of the Department of Agriculture

who administer this subtitle receive appropriate training to properly

apply the minimal effect exemptions determined by the Secretary.’’.

(d) MINIMAL EFFECT AND MITIGATION EXEMPTIONS.—Section

1222 of the Food Security Act of 1985 (16 U.S.C. 3822) is amended

by striking subsection (f) and inserting the following:

‘‘(f) MINIMAL EFFECT; MITIGATION.—The Secretary shall exempt

a person from the ineligibility provisions of section 1221 for any

action associated with the production of an agricultural commodity

on a converted wetland, or the conversion of a wetland, if 1 or

more of the following conditions apply, as determined by the Secretary:

‘‘(1) The action, individually and in connection with all

other similar actions authorized by the Secretary in the area,

will have a minimal effect on the functional hydrological and

biological value of the wetlands in the area, including the

value to waterfowl and wildlife.

‘‘(2) The wetland and the wetland values, acreage, and

functions are mitigated by the person through the restoration

of a converted wetland, the enhancement of an existing wetland,

or the creation of a new wetland, and the restoration, enhancement, or creation is—

‘‘(A) in accordance with a wetland conservation plan;

‘‘(B) in advance of, or concurrent with, the action;

‘‘(C) not at the expense of the Federal Government;

‘‘(D) in the case of enhancement or restoration of wetlands, on not greater than a 1-for-1 acreage basis unless

more acreage is needed to provide equivalent functions

and values that will be lost as a result of the wetland

conversion to be mitigated;

‘‘(E) in the case of creation of wetlands, on greater

than a 1-for-1 acreage basis if more acreage is needed

to provide equivalent functions and values that will be

lost as a result of the wetland conversion that is mitigated;

‘‘(F) on lands in the same general area of the local

watershed as the converted wetland; and
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 991

‘‘(G) with respect to the restored, enhanced, or created

wetland, made subject to an easement that—

‘‘(i) is recorded on public land records;

‘‘(ii) remains in force for as long as the converted

wetland for which the restoration, enhancement, or

creation to be mitigated remains in agricultural use

or is not returned to its original wetland classification

with equivalent functions and values; and

‘‘(iii) prohibits making alterations to the restored,

enhanced, or created wetland that lower the wetland’s

functions and values.

‘‘(3) The wetland was converted after December 23, 1985,

but before November 28, 1990, and the wetland values, acreage,

and functions are mitigated by the producer through the

requirements of subparagraphs (A), (B), (C), (D), (F), and (G)

of paragraph (2).

‘‘(4) The action was authorized by a permit issued under

section 404 of the Federal Water Pollution Control Act (33

U.S.C. 1344) and the wetland values, acreage, and functions

of the converted wetland were adequately mitigated for the

purposes of this subtitle.’’.

(e) REFERENCES TO PRODUCER.—Section 1222(g) of the Food

Security Act of 1985 (16 U.S.C. 3822(g)) is amended by striking

‘‘producer’’ and inserting ‘‘person’’.

(f) GOOD FAITH EXEMPTION.—Section 1222 of the Food Security

Act of 1985 (16 U.S.C. 3822) is amended by striking subsection

(h) and inserting the following:

‘‘(h) GOOD FAITH EXEMPTION.—

‘‘(1) EXEMPTION DESCRIBED.—The Secretary may waive a

person’s ineligibility under section 1221 for program loans,

payments, and benefits as the result of the conversion of a

wetland subsequent to November 28, 1990, or the production

of an agricultural commodity on a converted wetland, if the

Secretary determines that the person has acted in good faith

and without intent to violate this subtitle.

‘‘(2) PERIOD FOR COMPLIANCE.—The Secretary shall provide

a person who the Secretary determines has acted in good faith

and without intent to violate this subtitle with a reasonable

period, but not to exceed 1 year, during which to implement

the measures and practices necessary to be considered to

actively restoring the subject wetland.’’.

(g) RESTORATION.—Section 1222(i) of the Food Security Act

of 1985 (16 U.S.C. 3822(i)) is amended by inserting before the

period at the end the following: ‘‘or has otherwise mitigated for

the loss of wetland values, as determined by the Secretary, through

the restoration, enhancement, or creation of wetland values in

the same general area of the local watershed as the converted

wetland’’.

(h) DETERMINATIONS.—Section 1222 of the Food Security Act

of 1985 (16 U.S.C. 3822) is amended by striking subsection (j)

and inserting the following:

‘‘(j) DETERMINATIONS; RESTORATION AND MITIGATION PLANS;

MONITORING ACTIVITIES.—Technical determinations, the development of restoration and mitigation plans, and monitoring activities

under this section shall be made by the National Resources Conservation Service.’’.
110 STAT. 992 PUBLIC LAW 104–127—APR. 4, 1996

(i) MITIGATION BANKING.—Section 1222 of the Food Security

Act of 1985 (16 U.S.C. 3822) is amended by adding at the end

the following:

‘‘(k) MITIGATION BANKING PROGRAM.—Using authorities available to the Secretary, the Secretary may operate a pilot program

for mitigation banking of wetlands to assist persons to increase

the efficiency of agricultural operations while protecting wetland

functions and values. Subsection (f)(2)(C) shall not apply to this

subsection.’’.

SEC. 323. CONSULTATION AND COOPERATION REQUIREMENTS.

Section 1223 of the Food Security Act of 1985 (16 U.S.C. 3823)

is repealed.

SEC. 324. APPLICATION OF PROGRAM INELIGIBILITY TO AFFILIATED

PERSONS.

The Food Security Act of 1985 (as amended by section 323)

is amended by inserting after section 1222 (16 U.S.C. 3822) the

following:

‘‘SEC. 1223. AFFILIATED PERSONS.

‘‘If a person is affected by a reduction in benefits under section

1221 and the affected person is affiliated with other persons for

the purpose of receiving the benefits, the benefits of each affiliated

person shall be reduced under section 1221 in proportion to the

interest held by the affiliated person.’’.

SEC. 325. CLARIFICATION OF DEFINITION OF AGRICULTURAL LANDS

IN MEMORANDUM OF AGREEMENT.

(a) AGRICULTURAL LANDS.—For purposes of implementing the

memorandum of agreement entered into between the Department

of Agriculture, the Environmental Protection Agency, the Department of the Interior, and the Department of the Army on January

6, 1994, relating to the delineation of wetlands, the term ‘‘agricultural lands’’ shall include—

(1) native pasture, rangelands, and other lands used to

produce or support the production of livestock; and

(2) tree farms.

(b) WETLAND CONSERVATION.—Subsection (a) shall not apply

with respect to the delineation of wetlands under subtitle C of

title XII of the Food Security Act of 1985 (16 U.S.C. 3821 et

seq.) or to the enforcement of the subtitle.

(c) SUCCESSOR MEMORANDUM.—Subsection (a) shall apply to

any amendment to or successor of the memorandum of agreement

described in subsection (a).

SEC. 326. EFFECTIVE DATE.

This subtitle and the amendments made by this subtitle shall

become effective 90 days after the date of enactment of this Act.

Subtitle D—Environmental Conservation

Acreage Reserve Program

SEC. 331. ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM.

Section 1230 of the Food Security Act of 1985 (16 U.S.C. 3830)

is amended to read as follows:

16 USC 3821

note.

16 USC 3823.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 993

‘‘SEC. 1230. ENVIRONMENTAL CONSERVATION ACREAGE RESERVE

PROGRAM.

‘‘(a) ESTABLISHMENT.—

‘‘(1) IN GENERAL.—During the 1996 through 2002 calendar

years, the Secretary shall establish an environmental conservation acreage reserve program (referred to in this section as

‘ECARP’) to be implemented through contracts and the acquisition of easements to assist owners and operators of farms

and ranches to conserve and enhance soil, water, and related

natural resources, including grazing land, wetland, and wildlife

habitat.

‘‘(2) MEANS.—The Secretary shall carry out the ECARP

by—

‘‘(A) providing for the long-term protection of environmentally sensitive land; and

‘‘(B) providing technical and financial assistance to

farmers and ranchers to—

‘‘(i) improve the management and operation of the

farms and ranches; and

‘‘(ii) reconcile productivity and profitability with

protection and enhancement of the environment.

‘‘(3) PROGRAMS.—The ECARP shall consist of—

‘‘(A) the conservation reserve program established

under subchapter B;

‘‘(B) the wetlands reserve program established under

subchapter C; and

‘‘(C) the environmental quality incentives program

established under chapter 4.

‘‘(b) ADMINISTRATION.—

‘‘(1) IN GENERAL.—In carrying out the ECARP, the Secretary shall enter into contracts with owners and operators

and acquire interests in land through easements from owners,

as provided in this chapter and chapter 4.

‘‘(2) PRIOR ENROLLMENTS.—Acreage enrolled in the conservation reserve or wetlands reserve program prior to the

date of enactment of this paragraph shall be considered to

be placed into the ECARP.

‘‘(c) CONSERVATION PRIORITY AREAS.—

‘‘(1) DESIGNATION.—The Secretary may designate watersheds, multistate areas, or regions of special environmental

sensitivity as conservation priority areas that are eligible for

enhanced assistance under this chapter and chapter 4.

‘‘(2) ASSISTANCE.—The Secretary may designate areas as

conservation priority areas to assist, to the maximum extent

practicable, agricultural producers within the conservation

priority areas to comply with nonpoint source pollution requirements under the Federal Water Pollution Control Act (33 U.S.C.

1251 et seq.) and other Federal and State environmental laws

and to meet other conservation needs.

‘‘(3) PRODUCERS.—The Secretary may provide technical

assistance, cost-share payments, and incentive payments to

producers in a conservation priority area under this chapter

and chapter 4 based on—

‘‘(A) the significance of the soil, water, wildlife habitat,

and related natural resource problems in a watershed,

multistate area, or region; and

Contracts.
110 STAT. 994 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(B) the structural practices or land management practices that best address the problems, and that maximize

environmental benefits for each dollar expended, as determined by the Secretary.’’.

SEC. 332. CONSERVATION RESERVE PROGRAM.

(a) PROGRAM EXTENSIONS.—

(1) CONSERVATION RESERVE PROGRAM.—Section 1231 of the

Food Security Act of 1985 (16 U.S.C. 3831) is amended by

striking ‘‘1995’’ each place it appears and inserting ‘‘2002’’.

(2) DUTIES OF OWNERS AND OPERATORS.—Section 1232(c)

of the Food Security Act of 1985 (16 U.S.C. 3832(c)) is amended

by striking ‘‘1995’’ and inserting ‘‘2002’’.

(b) 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.—The Secretary may maintain up

to 36,400,000 acres in the conservation reserve at any one time

during the 1986 through 2002 calendar years (including contracts

extended by the Secretary pursuant to section 1437(c) of the Food,

Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–

624; 16 U.S.C. 3831 note)).’’.

(c) OPTIONAL CONTRACT TERMINATION BY PRODUCERS.—Section

1235 of the Food Security Act of 1985 (16 U.S.C. 3835) is amended—

(1) in subsection (a)—

(A) in paragraph (1), by striking ‘‘3-year’’ and inserting

‘‘1-year’’; and

(B) in paragraph (2)(B)(i), by striking ‘‘3 years’’ and

inserting ‘‘1 year’’; and

(2) by adding at the end the following:

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

‘‘(1) EARLY TERMINATION AUTHORIZED.—Subject to the other

provisions of this subsection, the Secretary shall allow a participant who entered into a contract before January 1, 1995, to

terminate the contract at any time if the contract has been

in effect for at least 5 years. The termination shall not relieve

the participant of liability for a contract violation occurring

before the date of the termination. The participant shall provide

the Secretary with reasonable notice of the participant’s desire

to terminate the contract.

‘‘(2) CERTAIN LANDS EXCEPTED.—The following lands shall

not be subject to an early termination of contract under this

subsection:

‘‘(A) Filterstrips, waterways, strips adjacent to riparian

areas, windbreaks, and shelterbelts.

‘‘(B) Land with an erodibility index of more than 15.

‘‘(C) Other lands of high environmental value (including wetlands), as determined by the Secretary.

‘‘(3) EFFECTIVE DATE.—The contract termination shall

become effective 60 days after the date on which the owner

or operator submits the notice required under paragraph (1).

‘‘(4) PRORATED RENTAL PAYMENT.—If a contract entered

into under this subchapter is terminated under this subsection

before the end of the fiscal year for which a rental payment

is due, the Secretary shall provide a prorated rental payment

covering the portion of the fiscal year during which the contract

was in effect.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 995

‘‘(5) RENEWED ENROLLMENT.—The termination of a contract

entered into under this subchapter shall not affect the ability

of the owner or operator who requested the termination to

submit a subsequent bid to enroll the land that was subject

to the contract into the conservation reserve.

‘‘(6) CONSERVATION REQUIREMENTS.—If land that was subject to a contract is returned to production of an agricultural

commodity, the conservation requirements under subtitles B

and C shall apply to the use of the land to the extent that

the requirements are similar to those requirements imposed

on other similar lands in the area, except that the requirements

may not be more onerous than the requirements imposed on

other lands.’’.

(d) ENROLLMENTS IN 1997.—Section 725 of the Agriculture,

Rural Development, Food and Drug Administration, and Related

Agencies Appropriations Act, 1996 (Public Law 104–37; 109 Stat.

332), is amended by striking ‘‘: Provided,’’ and all that follows

through ‘‘1997’’.

SEC. 333. WETLANDS RESERVE PROGRAM.

(a) ENROLLMENT.—Section 1237 of the Food Security Act of

1985 (16 U.S.C. 3837) is amended by striking subsection (b) and

inserting the following:

‘‘(b) ENROLLMENT CONDITIONS.—

‘‘(1) MAXIMUM ENROLLMENT.—The total number of acres

enrolled in the wetlands reserve program shall not exceed

975,000 acres.

‘‘(2) METHODS OF ENROLLMENT.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), effective beginning October 1, 1996, to the maximum extent

practicable, the Secretary shall enroll into the wetlands

reserve program—

‘‘(i) 1⁄3 of the acres through the use of permanent

easements;

‘‘(ii) 1⁄3 of the acres through the use of 30-year

easements; and

‘‘(iii) 1⁄3 of the acres through the use of restoration

cost-share agreements.

‘‘(B) TEMPORARY EASEMENTS.—Effective beginning

October 1, 1996, the Secretary shall not enroll acres in

the wetlands reserve program through the use of new

permanent easements until the Secretary has enrolled at

least 75,000 acres in the program through the use of temporary easements.’’.

(b) ELIGIBILITY.—Section 1237(c) of the Food Security Act of

1985 (16 U.S.C. 3837(c)) is amended—

(1) by striking ‘‘2000’’ and inserting ‘‘2002’’;

(2) by redesignating paragraphs (1) and (2) as paragraphs

(2) and (3), respectively; and

(3) by inserting after ‘‘determines that—’’ the following:

‘‘(1) such land maximizes wildlife benefits and wetland

values and functions;’’.

(c) OTHER ELIGIBLE LANDS.—Section 1237(d) of the Food Security Act of 1985 (16 U.S.C. 3837(d)) is amended—

(1) by inserting after ‘‘subsection (c)’’ the following ‘‘, land

that maximizes wildlife benefits and that is’’; and
110 STAT. 996 PUBLIC LAW 104–127—APR. 4, 1996

(2) in paragraph (2), by striking ‘‘and’’ at the end and

inserting ‘‘or’’.

(d) EASEMENTS.—Section 1237A of the Food Security Act of

1985 (16 U.S.C. 3837a) is amended—

(1) in the section heading, by inserting before the period

at the end the following: ‘‘AND AGREEMENTS’’;

(2) by striking subsection (c) and inserting the following:

‘‘(c) RESTORATION PLANS.—The development of a restoration

plan, including any compatible use, under this section shall be

made through the local Natural Resources Conservation Service

representative, in consultation with the State technical committee.’’;

(3) in subsection (f), by striking the third sentence and

inserting the following: ‘‘Compensation may be provided in

not less than 5, nor more than 30, annual payments of equal

or unequal size, as agreed to by the owner and the Secretary.’’;

and

(4) by adding at the end the following:

‘‘(h) RESTORATION COST-SHARE AGREEMENTS.—The Secretary

may enroll land into the wetlands reserve program through an

agreement that requires the landowner to restore wetlands on the

land, if the agreement does not provide the Secretary with an

easement.’’.

(e) COST-SHARE AND TECHNICAL ASSISTANCE.—Section 1237C

of the Food Security Act of 1985 (16 U.S.C. 3837c) is amended

by striking subsection (b) and inserting the following:

‘‘(b) COST-SHARE AND TECHNICAL ASSISTANCE.—

‘‘(1) EASEMENTS.—Effective beginning October 1, 1996, in

making cost-share payments under subsection (a)(1), the Secretary shall—

‘‘(A) in the case of a permanent easement, pay the

owner an amount that is not less than 75 percent, but

not more than 100 percent, of the eligible costs; and

‘‘(B) in the case of a 30-year easement, pay the owner

an amount that is not less than 50 percent, but not more

than 75 percent, of the eligible costs.

‘‘(2) RESTORATION COST-SHARE AGREEMENTS.—In making

cost-share payments in connection with a restoration cost-share

agreement entered into under section 1237A(h), the Secretary

shall pay the owner an amount that is not less than 50 percent,

but not more than 75 percent, of the eligible costs.

‘‘(3) TECHNICAL ASSISTANCE.—The Secretary shall provide

owners with technical assistance to assist owners in complying

with the terms of easements and restoration cost-share agreements.’’.

(f) EFFECT ON EXISTING AGREEMENTS.—The amendments made

by this section shall not affect the validity or terms of any agreements entered into by the Secretary of Agriculture under subchapter

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

Act of 1985 (16 U.S.C. 3837 et seq.) before the date of enactment

of this Act or any payments required to be made in connection

with the agreements.

SEC. 334. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

Subtitle D of title XII of the Food Security Act of 1985 (16

U.S.C. 3830 et seq.) is amended by adding at the end the following:

16 USC 3837

note.

Effective date.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 997

‘‘CHAPTER 4—ENVIRONMENTAL QUALITY INCENTIVES

PROGRAM

‘‘SEC. 1240. PURPOSES.

‘‘The purposes of the environmental quality incentives program

established by this chapter are to—

‘‘(1) combine into a single program the functions of—

‘‘(A) the agricultural conservation program authorized

by sections 7 and 8 of the Soil Conservation and Domestic

Allotment Act (16 U.S.C. 590g and 590h) (as in effect

before the amendments made by section 336(a)(1) of the

Federal Agriculture Improvement and Reform Act of 1996);

‘‘(B) the Great Plains conservation program established

under section 16(b) of the Soil Conservation and Domestic

Allotment Act (16 U.S.C. 590p(b)) (as in effect before the

amendment made by section 336(b)(1) of the Federal Agriculture Improvement and Reform Act of 1996);

‘‘(C) the water quality incentives program established

under chapter 2 (as in effect before the amendment made

by section 336(h) of the Federal Agriculture Improvement

and Reform Act of 1996); and

‘‘(D) the Colorado River Basin salinity control program

established under section 202(c) of the Colorado River Basin

Salinity Control Act (43 U.S.C. 1592(c)) (as in effect before

the amendment made by section 336(c)(1) of the Federal

Agriculture Improvement and Reform Act of 1996); and

‘‘(2) carry out the single program in a manner that maximizes environmental benefits per dollar expended, and that

provides—

‘‘(A) flexible technical and financial assistance to farmers and ranchers that face the most serious threats to

soil, water, and related natural resources, including grazing

lands, wetlands, and wildlife habitat;

‘‘(B) assistance to farmers and ranchers in complying

with this title and Federal and State environmental laws,

and encourages environmental enhancement;

‘‘(C) assistance to farmers and ranchers in making

beneficial, cost-effective changes to cropping systems, grazing management, manure, nutrient, pest, or irrigation

management, land uses, or other measures needed to conserve and improve soil, water, and related natural

resources; and

‘‘(D) for the consolidation and simplification of the conservation planning process to reduce administrative burdens on producers.

‘‘SEC. 1240A. DEFINITIONS.

‘‘In this chapter:

‘‘(1) ELIGIBLE LAND.—The term ‘eligible land’ means agricultural land (including cropland, rangeland, pasture, and other

land on which crops or livestock are produced), including agricultural land that the Secretary determines poses a serious

threat to soil, water, or related resources by reason of the

soil types, terrain, climatic, soil, topographic, flood, or saline

characteristics, or other factors or natural hazards.

‘‘(2) LAND MANAGEMENT PRACTICE.—The term ‘land

management practice’ means a site-specific nutrient or manure

16 USC

3839aa–1.

16 USC 3839aa.
110 STAT. 998 PUBLIC LAW 104–127—APR. 4, 1996

management, integrated pest management, irrigation management, tillage or residue management, grazing management,

or other land management practice carried out on eligible land

that the Secretary determines is needed to protect, in the

most cost-effective manner, water, soil, or related resources

from degradation.

‘‘(3) LIVESTOCK.—The term ‘livestock’ means dairy cattle,

beef cattle, laying hens, broilers, turkeys, swine, sheep, and

such other animals as determined by the Secretary.

‘‘(4) PRODUCER.—The term ‘producer’ means a person who

is engaged in livestock or agricultural production (as defined

by the Secretary).

‘‘(5) STRUCTURAL PRACTICE.—The term ‘structural practice’

means—

‘‘(A) the establishment on eligible land of a site-specific

animal waste management facility, terrace, grassed waterway, contour grass strip, filterstrip, tailwater pit, permanent wildlife habitat, or other structural practice that the

Secretary determines is needed to protect, in the most

cost-effective manner, water, soil, or related resources from

degradation; and

‘‘(B) the capping of abandoned wells on eligible land.

‘‘SEC. 1240B. ESTABLISHMENT AND ADMINISTRATION OF ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

‘‘(a) ESTABLISHMENT.—

‘‘(1) IN GENERAL.—During the 1996 through 2002 fiscal

years, the Secretary shall provide technical assistance, costshare payments, incentive payments, and education to producers, who enter into contracts with the Secretary, through an

environmental quality incentives program in accordance with

this chapter.

‘‘(2) ELIGIBLE PRACTICES.—

‘‘(A) STRUCTURAL PRACTICES.—A producer who implements a structural practice shall be eligible for any combination of technical assistance, cost-share payments, and

education.

‘‘(B) LAND MANAGEMENT PRACTICES.—A producer who

performs a land management practice shall be eligible for

any combination of technical assistance, incentive payments, and education.

‘‘(b) APPLICATION AND TERM.—A contract between a producer

and the Secretary under this chapter may—

‘‘(1) apply to 1 or more structural practices or 1 or more

land management practices, or both; and

‘‘(2) have a term of not less than 5, nor more than 10,

years, as determined appropriate by the Secretary, depending

on the practice or practices that are the basis of the contract.

‘‘(c) STRUCTURAL PRACTICES.—

‘‘(1) OFFER SELECTION PROCESS.—The Secretary shall, to

the maximum extent practicable, establish a process for selecting applications for financial assistance if there are numerous

applications for assistance for structural practices that would

provide substantially the same level of environmental benefits.

The process shall be based on—

‘‘(A) a reasonable estimate of the projected cost of

the proposals and other factors identified by the Secretary

16 USC

3839aa–2.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 999

for determining which applications will result in the least

cost to the program authorized by this chapter; and

‘‘(B) the priorities established under this subtitle and

such other factors determined by the Secretary that maximize environmental benefits per dollar expended.

‘‘(2) CONCURRENCE OF OWNER.—If the producer making

an offer to implement a structural practice is a tenant of

the land involved in agricultural production, for the offer to

be acceptable, the producer shall obtain the concurrence of

the owner of the land with respect to the offer.

‘‘(d) LAND MANAGEMENT PRACTICES.—The Secretary shall establish an application and evaluation process for awarding technical

assistance or incentive payments, or both, to a producer in exchange

for the performance of 1 or more land management practices by

the producer.

‘‘(e) COST-SHARE PAYMENTS, INCENTIVE PAYMENTS, AND TECHNICAL ASSISTANCE.—

‘‘(1) COST-SHARE PAYMENTS.—

‘‘(A) IN GENERAL.—The Federal share of cost-share payments to a producer proposing to implement 1 or more

structural practices shall be not more than 75 percent

of the projected cost of the practice, as determined by

the Secretary, taking into consideration any payment

received by the producer from a State or local government.

‘‘(B) LIMITATION.—A producer who owns or operates

a large confined livestock operation (as defined by the

Secretary) shall not be eligible for cost-share payments

to construct an animal waste management facility.

‘‘(C) OTHER PAYMENTS.—A producer shall not be

eligible for cost-share payments for structural practices

on eligible land under this chapter if the producer receives

cost-share payments or other benefits for the same land

under chapter 1 or 3.

‘‘(2) INCENTIVE PAYMENTS.—The Secretary shall make

incentive payments in an amount and at a rate determined

by the Secretary to be necessary to encourage a producer to

perform 1 or more land management practices.

‘‘(3) TECHNICAL ASSISTANCE.—

‘‘(A) FUNDING.—The Secretary shall allocate funding

under this chapter for the provision of technical assistance

according to the purpose and projected cost for which the

technical assistance is provided for a fiscal year. The allocated amount may vary according to the type of expertise

required, quantity of time involved, and other factors as

determined appropriate by the Secretary. Funding shall

not exceed the projected cost to the Secretary of the technical assistance provided for a fiscal year.

‘‘(B) OTHER AUTHORITIES.—The receipt of technical

assistance under this chapter shall not affect the eligibility

of the producer to receive technical assistance under other

authorities of law available to the Secretary.

‘‘(C) PRIVATE SOURCES.—The Secretary shall ensure

that the processes of writing and developing proposals and

plans for contracts under this chapter, and of assisting

in the implementation of structural practices and land

management practices covered by the contracts, are open

to individuals in agribusiness, including agricultural
110 STAT. 1000 PUBLIC LAW 104–127—APR. 4, 1996

producers, representatives from agricultural cooperatives,

agricultural input retail dealers, and certified crop advisers.

The requirements of this subparagraph shall also apply

to any other conservation program of the Department of

Agriculture that provides incentive payments, technical

assistance, or cost-share payments.

‘‘(f) MODIFICATION OR TERMINATION OF CONTRACTS.—

‘‘(1) VOLUNTARY MODIFICATION OR TERMINATION.—The Secretary may modify or terminate a contract entered into with

a producer under this chapter if—

‘‘(A) the producer agrees to the modification or termination; and

‘‘(B) the Secretary determines that the modification

or termination is in the public interest.

‘‘(2) INVOLUNTARY TERMINATION.—The Secretary may

terminate a contract under this chapter if the Secretary determines that the producer violated the contract.

‘‘(g) NON-FEDERAL ASSISTANCE.—The Secretary may request

the services of a State water quality agency, State fish and wildlife

agency, State forestry agency, or any other governmental or private

resource considered appropriate to assist in providing the technical

assistance necessary for the development and implementation of

a structural practice or land management practice.

‘‘SEC. 1240C. EVALUATION OF OFFERS AND PAYMENTS.

‘‘In providing technical assistance, cost-share payments, and

incentive payments to producers, the Secretary shall accord a higher

priority to assistance and payments that—

‘‘(1) are provided in conservation priority areas established

under section 1230(c);

‘‘(2) maximize environmental benefits per dollar expended;

or

‘‘(3) are provided in watersheds, regions, or conservation

priority areas in which State or local governments have provided, or will provide, financial or technical assistance to

producers for the same conservation or environmental purposes.

‘‘SEC. 1240D. DUTIES OF PRODUCERS.

‘‘To receive technical assistance, cost-share payments, or incentive payments under this chapter, a producer shall agree—

‘‘(1) to implement an environmental quality incentives program plan that describes conservation and environmental goals

to be achieved through a structural practice or land management practice, or both, that is approved by the Secretary;

‘‘(2) not to conduct any practices on the farm or ranch

that would tend to defeat the purposes of this chapter;

‘‘(3) on the violation of a term or condition of the contract

at any time the producer has control of the land, to refund

any cost-share or incentive payment received with interest,

and forfeit any future payments under this chapter, as determined by the Secretary;

‘‘(4) on the transfer of the right and interest of the producer

in land subject to the contract, unless the transferee of the

right and interest agrees with the Secretary to assume all

obligations of the contract, to refund all cost-share payments

and incentive payments received under this chapter, as determined by the Secretary;

16 USC

3839aa–4.

16 USC

3839aa–3.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1001

‘‘(5) to supply information as required by the Secretary

to determine compliance with the environmental quality incentives 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 environmental

quality incentives program plan.

‘‘SEC. 1240E. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

‘‘(a) IN GENERAL.—To be eligible to enter into a contract under

the environmental quality incentives program, an owner or producer

of a livestock or agricultural operation must submit to the Secretary

for approval a plan of operations that incorporates such conservation

practices, and is based on such principles, as the Secretary considers

necessary to carry out the program, including a description of

structural practices and land management practices to be implemented and the objectives to be met by the plan’s implementation.

‘‘(b) AVOIDANCE OF DUPLICATION.—The Secretary shall, to the

maximum extent practicable, eliminate duplication of planning

activities under the environmental quality incentives program and

comparable conservation programs.

‘‘SEC. 1240F. DUTIES OF THE SECRETARY.

‘‘To the extent appropriate, the Secretary shall assist a producer

in achieving the conservation and environmental goals of an

environmental quality incentives program plan by—

‘‘(1) providing an eligibility assessment of the farming or

ranching operation of the producer as a basis for developing

the plan;

‘‘(2) providing technical assistance in developing and

implementing the plan;

‘‘(3) providing technical assistance, cost-share payments,

or incentive payments for developing and implementing 1 or

more structural practices or 1 or more land management practices, as appropriate;

‘‘(4) providing the producer with information, education,

and training to aid in implementation of the plan; and

‘‘(5) encouraging the producer to obtain technical assistance, cost-share payments, or grants from other Federal, State,

local, or private sources.

‘‘SEC. 1240G. LIMITATION ON PAYMENTS.

‘‘(a) IN GENERAL.—The total amount of cost-share and incentive

payments paid to a producer under this chapter may not exceed—

‘‘(1) $10,000 for any fiscal year; or

‘‘(2) $50,000 for any multiyear contract.

‘‘(b) EXCEPTION TO ANNUAL LIMIT.—The Secretary may exceed

the limitation on the annual amount of a payment under subsection

(a)(1) on a case-by-case basis if the Secretary determines that

a larger payment is—

‘‘(1) essential to accomplish the land management practice

or structural practice for which the payment is made; and

‘‘(2) consistent with the maximization of environmental

benefits per dollar expended and the purposes of this chapter

specified in section 1240.

‘‘(c) TIMING OF EXPENDITURES.—Expenditures under a contract

entered into under this chapter during a fiscal year may not be

made by the Secretary until the subsequent fiscal year.

16 USC

3839aa–7.

16 USC

3839aa–6.

16 USC

3839aa–5.
110 STAT. 1002 PUBLIC LAW 104–127—APR. 4, 1996

‘‘SEC. 1240H. TEMPORARY ADMINISTRATION OF ENVIRONMENTAL

QUALITY INCENTIVES PROGRAM.

‘‘(a) INTERIM ADMINISTRATION.—

‘‘(1) IN GENERAL.—During the period beginning on the date

of enactment of this section and ending on the termination

date provided under paragraph (2), to ensure that technical

assistance, cost-share payments, and incentive payments continue to be administered in an orderly manner until such

time as assistance can be provided through final regulations

issued to implement the environmental quality incentives program established under this chapter, the Secretary shall continue to—

‘‘(A) provide technical assistance, cost-share payments,

and incentive payments under the terms and conditions

of the agricultural conservation program, the Great Plains

conservation program, the water quality incentives program, and the Colorado River Basin salinity control program, to the extent the terms and conditions of the program

are consistent with the environmental quality incentives

program; and

‘‘(B) use for those purposes—

‘‘(i) any funds remaining available for the agricultural conservation program, the Great Plains conservation program, the water quality incentives program,

and the Colorado River Basin salinity control program;

and

‘‘(ii) as the Secretary determines to be necessary,

any funds authorized to be used to carry out the

environmental quality incentives program.

‘‘(2) TERMINATION OF AUTHORITY.—The authority of the

Secretary to carry out paragraph (1) shall terminate on the

date that is 180 days after the date of enactment of this

section.

‘‘(b) PERMANENT ADMINISTRATION.—Effective beginning on the

termination date provided under subsection (a)(2), the Secretary

shall provide technical assistance, cost-share payments, and incentive payments for structural practices and land management practices related to crop and livestock production in accordance with

final regulations issued to carry out the environmental quality

incentives program.’’.

SEC. 335. CONSERVATION FARM OPTION.

Subtitle D of title XII of the Food Security Act of 1985 (16

U.S.C. 3830 et seq.) (as amended by section 334) is amended by

adding at the end the following:

‘‘CHAPTER 5—CONSERVATION FARM OPTION

‘‘SEC. 1240M. CONSERVATION FARM OPTION.

‘‘(a) IN GENERAL.—The Secretary shall establish conservation

farm option pilot programs for producers of wheat, feed grains,

cotton, and rice.

‘‘(b) ELIGIBLE OWNERS AND PRODUCERS.—An owner or producer

with a farm that has contract acreage enrolled in the agricultural

market transition program established under the Agricultural Market Transition Act shall be eligible to participate in the conservation

farm option offered under a pilot program under subsection (a)

16 USC 3839bb.

Effective date.

16 USC

3839aa–8.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1003

if the owner or producer meets the conditions established under

section (e).

‘‘(c) PURPOSES.—The purposes of the conservation farm option

pilot programs shall include—

‘‘(1) conservation of soil, water, and related resources;

‘‘(2) water quality protection or improvement;

‘‘(3) wetland restoration, protection, and creation;

‘‘(4) wildlife habitat development and protection; or

‘‘(5) other similar conservation purposes.

‘‘(d) CONSERVATION FARM PLAN.—

‘‘(1) IN GENERAL.—To be eligible to enter into a conservation

farm option contract, an owner or producer must prepare and

submit to the Secretary, for approval, a conservation farm

plan that shall become a part of the conservation farm option

contract.

‘‘(2) REQUIREMENTS.—A conservation farm plan shall—

‘‘(A) describe the resource-conserving crop rotations,

and all other conservation practices, to be implemented

and maintained on the acreage that is subject to contract

during the contract period;

‘‘(B) contain a schedule for the implementation and

maintenance of the practices described in the conservation

farm plan;

‘‘(C) comply with highly erodible land and wetland

conservation requirements of this title; and

‘‘(D) contain such other terms as the Secretary may

require.

‘‘(e) CONTRACTS.—

‘‘(1) IN GENERAL.—On approval of a conservation farm plan,

the Secretary may enter into a contract with the owner or

producer that specifies the acres being enrolled and the practices being adopted.

‘‘(2) DURATION OF CONTRACT.—The contract shall be for

a period of 10 years. The contract may be renewed for a period

of not to exceed 5 years on mutual agreement of the Secretary

and the owner or producer.

‘‘(3) CONSIDERATION.—In exchange for payments under this

subsection, the owner or producer shall not participate in and

shall forgo payments under—

‘‘(A) the conservation reserve program established

under subchapter B of chapter 1;

‘‘(B) the wetlands reserve program established under

subchapter C of chapter 1; and

‘‘(C) the environmental quality incentives program

established under chapter 4.

‘‘(4) OWNER OR PRODUCER RESPONSIBILITIES UNDER THE

AGREEMENT.—Under the terms of the contract entered into

under this section, an owner or producer shall agree to—

‘‘(A) actively comply with the terms and conditions

of the approved conservation farm plan;

‘‘(B) keep such records as the Secretary may reasonably

require for purposes of evaluation of the implementation

of the conservation farm plan; and

‘‘(C) not engage in any activity that would defeat the

purposes of the conservation farm option pilot program.

‘‘(5) PAYMENTS.—The Secretary shall offer an owner or

producer annual payments under the contract that are equivaRecords.
110 STAT. 1004 PUBLIC LAW 104–127—APR. 4, 1996

lent to the payments the owner or producer would have received

under the conservation reserve program, the wetlands reserve

program, and the environmental quality incentives program.

‘‘(6) BALANCE OF BENEFITS.—The Secretary shall not permit

an owner or producer to terminate a conservation reserve program contract and enter a conservation farm option contract

if the Secretary determines that such action will reduce net

environmental benefits.

‘‘(f) SECRETARIAL DETERMINATIONS.—

‘‘(1) ACREAGE ESTIMATES.—Prior to each year during which

the Secretary intends to offer conservation reserve program

contracts, the Secretary shall estimate the number of acres

that—

‘‘(A) will be retired under the conservation farm option

under the terms and conditions the Secretary intends to

offer for that program; and

‘‘(B) would be retired under the conservation reserve

program if the conservation farm option were not available.

‘‘(2) TOTAL LAND RETIREMENT.—The Secretary shall

announce a number of acres to be enrolled in the conservation

reserve program that will result in a total number of acres

retired under the conservation reserve program and the conservation farm option that does not exceed the amount estimated under paragraph (1)(B) for the current or future years.

‘‘(3) LIMITATION.—The Secretary shall not enroll additional

conservation reserve program contracts to offset the land retired

under the conservation farm option.

‘‘(g) COMMODITY CREDIT CORPORATION.—The Secretary shall

use the funds, authorities, and facilities of the Commodity Credit

Corporation to carry out this subsection.

‘‘(h) FUNDING.—Of the funds of the Commodity Credit Corporation, the Corporation shall make available to carry out this section—

‘‘(1) $7,500,000 for fiscal year 1997;

‘‘(2) $15,000,000 for fiscal year 1998;

‘‘(3) $25,000,000 for fiscal year 1999;

‘‘(4) $37,500,000 for fiscal year 2000;

‘‘(5) $50,000,000 for fiscal year 2001; and

‘‘(6) $62,500,000 for fiscal year 2002.’’.

SEC. 336. REPEAL OF SUPERSEDED AUTHORITIES.

(a) AGRICULTURAL CONSERVATION PROGRAM.—

(1) ELIMINATION.—

(A) Section 8 of the Soil Conservation and Domestic

Allotment Act (16 U.S.C. 590h) is amended—

(i) in subsection (b)—

(I) by striking paragraphs (1) through (4) and

inserting the following:

‘‘(1) ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.—The

Secretary shall provide technical assistance, cost-share payments, and incentive payments to operators through the

environmental quality incentives program in accordance with

chapter 4 of subtitle D of title XII of the Food Security Act

of 1985.’’; and

(II) by striking paragraphs (6) through (8);

and

(ii) by striking subsections (d), (e), and (f).
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1005

(B) The first sentence of section 11 of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590k) is amended by striking ‘‘performance: Provided further,’’ and all

that follows through ‘‘or other law’’ and inserting ‘‘performance’’.

(C) Section 14 of the Soil Conservation and Domestic

Allotment Act (16 U.S.C. 590n) is amended—

(i) in the first sentence, by striking ‘‘or 8’’; and

(ii) by striking the second sentence.

(D) Section 15 of the Soil Conservation and Domestic

Allotment Act (16 U.S.C. 590o) is amended—

(i) in the first undesignated paragraph—

(I) in the first sentence, by striking ‘‘sections

7 and 8’’ and inserting ‘‘section 7’’; and

(II) by striking the third sentence; and

(ii) by striking the second undesignated paragraph.

(2) CONFORMING AMENDMENTS.—

(A) Paragraph (1) of the last proviso of the matter

under the heading ‘‘CONSERVATION RESERVE PROGRAM’’

under the heading ‘‘SOIL BANK PROGRAMS’’ of title I of

the Department of Agriculture and Farm Credit Administration Appropriation Act, 1959 (72 Stat. 195; 7 U.S.C.

1831a), is amended by striking ‘‘Agricultural Conservation

Program’’ and inserting ‘‘environmental quality incentives

program established under chapter 4 of subtitle D of title

XII of the Food Security Act of 1985’’.

(B) Section 4 of the Cooperative Forestry Assistance

Act of 1978 (16 U.S.C. 2103) is amended by striking ‘‘as

added by the Agriculture and Consumer Protection Act

of 1973’’ each place it appears in subsections (d) and (i)

and inserting ‘‘as in effect before the amendment made

by section 336(d)(1) of the Federal Agriculture Improvement and Reform Act of 1996’’.

(C) Section 226(b)(4) of the Department of Agriculture

Reorganization Act of 1994 (7 U.S.C. 6932(b)(4)) is amended

by striking ‘‘and the agricultural conservation program

under the Soil Conservation and Domestic Allotment Act

(16 U.S.C. 590g et seq.)’’.

(D) Section 246(b)(8) of the Department of Agriculture

Reorganization Act of 1994 (7 U.S.C. 6962(b)(8)) is amended

by striking ‘‘and the agricultural conservation program

under the Soil Conservation and Domestic Allotment Act

(16 U.S.C. 590g et seq.)’’.

(E) Section 1271(c)(3)(C) of the Food, Agriculture, Conservation, and Trade Act of 1990 (16 U.S.C. 2106a(c)(3)(C))

is amended by striking ‘‘Agricultural Conservation Program

established under section 16(b) of the Soil Conservation

and Domestic Allotment Act (16 U.S.C. 590h, 590l, or

590p)’’ and inserting ‘‘environmental quality incentives program established under chapter 4 of subtitle D of title

XII of the Food Security Act of 1985’’.

(F) Section 304(a) of the Lake Champlain Special Designation Act of 1990 (Public Law 101–596; 33 U.S.C. 1270

note) is amended—

(i) in the subsection heading, by striking ‘‘SPECIAL

PROJECT AREA UNDER THE AGRICULTURAL CONSERVATION PROGRAM’’ and inserting ‘‘PRIORITY AREA UNDER
110 STAT. 1006 PUBLIC LAW 104–127—APR. 4, 1996

THE ENVIRONMENTAL QUALITY INCENTIVES PROGRAM’’;

and

(ii) in paragraph (1), by striking ‘‘special project

area under the Agricultural Conservation Program

established under section 8(b) of the Soil Conservation

and Domestic Allotment Act (16 U.S.C. 590h(b))’’ and

inserting ‘‘priority area under the environmental quality incentives program established under chapter 4

of subtitle D of title XII of the Food Security Act

of 1985’’.

(G) Section 6 of the Department of Agriculture Organic

Act of 1956 (70 Stat. 1033) is amended by striking subsection (b).

(b) GREAT PLAINS CONSERVATION PROGRAM.—

(1) ELIMINATION.—Section 16 of the Soil Conservation and

Domestic Allotment Act (16 U.S.C. 590p) is repealed.

(2) CONFORMING AMENDMENTS.—

(A) The Agricultural Adjustment Act of 1938 is amended by striking ‘‘Great Plains program’’ each place it appears

in sections 344(f)(8) and 377 (7 U.S.C. 1344(f)(8) and 1377)

and inserting ‘‘environmental quality incentives program

established under chapter 4 of subtitle D of title XII of

the Food Security Act of 1985’’.

(B) Section 246(b) of the Department of Agriculture

Reorganization Act of 1994 (7 U.S.C. 6962(b)) is amended

by striking paragraph (2).

(c) COLORADO RIVER BASIN SALINITY CONTROL PROGRAM.—

(1) IN GENERAL.—Section 202 of the Colorado River Basin

Salinity Control Act (43 U.S.C. 1592) is amended by striking

subsection (c) and inserting the following:

‘‘(c) SALINITY CONTROL MEASURES.—The Secretary of Agriculture shall carry out salinity control measures (including watershed enhancement and cost-share measures with livestock and crop

producers) in the Colorado River Basin as part of the environmental

quality incentives program established under chapter 4 of subtitle

D of title XII of the Food Security Act of 1985.’’.

(2) FUNDS.—Section 205 of the Colorado River Basin Salinity Control Act (43 U.S.C. 1595) is amended—

(A) in subsection (a), by striking ‘‘pursuant to section

202(c)(2)(C)’’; and

(B) by adding at the end the following:

‘‘(f) FUNDS.—The Secretary may expend funds available in the

Basin Funds referred to in this section to carry out cost-share

salinity measures in a manner that is consistent with the cost

allocations required under this section.’’.

(3) CONFORMING AMENDMENT.—Section 246(b)(6) of the

Department of Agriculture Reorganization Act of 1994 (7 U.S.C.

6962(b)(6)) is amended by striking ‘‘program’’ and inserting

‘‘measures’’.

(d) RURAL ENVIRONMENTAL CONSERVATION PROGRAM.—

(1) ELIMINATION.—Title X of the Agricultural Act of 1970

(16 U.S.C. 1501 et seq.) is repealed.

(2) CONFORMING AMENDMENTS.—Section 246 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6962)

(as amended by subsection (b)(2)(B)) is amended—

(A) in subsection (b)—

(i) by striking paragraph (1); and

16 USC 590h–4.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1007

(ii) by redesignating paragraphs (3) through (8)

as paragraphs (1) through (6), respectively; and

(B) in subsection (c), by striking ‘‘(2), (3), (4), and

(6)’’ and inserting ‘‘(1), (2), and (4)’’.

(e) OTHER CONSERVATION PROVISIONS.—Subtitle F of title XII

of the Food Security Act of 1985 (16 U.S.C. 2005a and 2101 note)

is repealed.

(f) RESOURCE CONSERVATION.—

(1) ELIMINATION.—Subtitles A, B, D, E, and F of title

XV of the Agriculture and Food Act of 1981 (95 Stat. 1328;

16 U.S.C. 3401 et seq.) are repealed.

(2) CONFORMING AMENDMENT.—Section 739 of the Agriculture, Rural Development, Food and Drug Administration,

and Related Agencies Appropriations Act, 1992 (7 U.S.C.

2272a), is repealed.

(g) TECHNICAL AMENDMENT.—The first sentence of the matter

under the heading ‘‘COMMODITY CREDIT CORPORATION’’ of Public

Law 99–263 (100 Stat. 59; 16 U.S.C. 3841 note) is amended by

striking ‘‘prices: Provided further,’’ and all that follows through

‘‘Acts.’’ and inserting ‘‘prices.’’.

(h) AGRICULTURAL WATER QUALITY INCENTIVES PROGRAM.—

Chapter 2 of subtitle D of title XII of the Food Security Act of

1985 (16 U.S.C. 3838 et seq.) is repealed.

Subtitle E—Conservation Funding and

Administration

SEC. 341. CONSERVATION FUNDING AND ADMINISTRATION.

Subtitle E of title XII of the Food Security Act of 1985 (16

U.S.C. 3841 et seq.) is amended to read as follows:

‘‘Subtitle E—Funding and Administration

‘‘SEC. 1241. FUNDING.

‘‘(a) MANDATORY EXPENSES.—For each of fiscal years 1996

through 2002, the Secretary shall use the funds of the Commodity

Credit Corporation to carry out the programs authorized by—

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

contracts extended by the Secretary pursuant to section 1437

of the Food, Agriculture, Conservation, and Trade Act of 1990

(Public Law 101–624; 16 U.S.C. 3831 note));

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

‘‘(3) chapter 4 of subtitle D.

‘‘(b) ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.—

‘‘(1) IN GENERAL.—Of the funds of the Commodity Credit

Corporation, the Secretary shall make available $130,000,000

for fiscal year 1996, and $200,000,000 for each of fiscal years

1997 through 2002, for providing technical assistance, costshare payments, incentive payments, and education under the

environmental quality incentives program under chapter 4 of

subtitle D.

‘‘(2) LIVESTOCK PRODUCTION.—For each of fiscal years 1996

through 2002, 50 percent of the funding available for technical

assistance, cost-share payments, incentive payments, and edu16 USC 3841.
110 STAT. 1008 PUBLIC LAW 104–127—APR. 4, 1996

cation under the environmental quality incentives program

shall be targeted at practices relating to livestock production.

‘‘SEC. 1242. USE OF OTHER AGENCIES.

‘‘(a) COMMITTEES.—In carrying out subtitles B, C, and D, the

Secretary shall use the services of local, county, and State committees established under section 8(b) of the Soil Conservation and

Domestic Allotment Act (16 U.S.C. 590h(b)).

‘‘(b) OTHER AGENCIES.— ‘‘(1) USE.—In carrying out subtitles C and D, the Secretary

may utilize the services of the Natural Resources Conservation

Service and the Forest Service, the Fish and Wildlife Service,

State forestry agencies, State fish and game agencies, landgrant colleges, local, county, and State committees established

under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h), soil and water conservation districts,

and other appropriate agencies.

‘‘(2) CONSULTATION.—In carrying out subtitle D at the State

and county levels, the Secretary shall consult with, to the

extent practicable, the Fish and Wildlife Service, State forestry

agencies, State fish and game agencies, land-grant colleges,

soil-conservation districts, and other appropriate agencies.

‘‘SEC. 1243. ADMINISTRATION.

‘‘(a) PLANS.—The Secretary shall, to the extent practicable,

avoid duplication in—

‘‘(1) the conservation plans required for—

‘‘(A) highly erodible land conservation under subtitle

B;

‘‘(B) the conservation reserve program established

under subchapter B of chapter 1 of subtitle D; and

‘‘(C) the wetlands reserve program established under

subchapter C of chapter 1 of subtitle D; and

‘‘(2) the environmental quality incentives program established under chapter 4 of subtitle D.

‘‘(b) ACREAGE LIMITATION.— ‘‘(1) IN GENERAL.—The Secretary shall not enroll more than

25 percent of the cropland in any county in the programs

administered under the conservation reserve and wetlands

reserve programs established under subchapters B and C,

respectively, of chapter 1 of subtitle D. Not more than 10

percent of the cropland in a county may be subject to an

easement acquired under the subchapters.

‘‘(2) EXCEPTION.—The Secretary may exceed the limitations

in paragraph (1) if the Secretary determines that—

‘‘(A) the action would not adversely affect the local

economy of a county; and

‘‘(B) operators in the county are having difficulties

complying with conservation plans implemented under section 1212.

‘‘(3) SHELTERBELTS AND WINDBREAKS.—The limitations

established under this subsection shall not apply to cropland

that is subject to an easement under chapter 1 or 3 of subtitle

D that is used for the establishment of shelterbelts and

windbreaks.

‘‘(c) TENANT PROTECTION.—Except for a person who is a tenant

on land that is subject to a conservation reserve contract that

has been extended by the Secretary, the Secretary shall provide

16 USC 3843.

16 USC 3842.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1009

adequate safeguards to protect the interests of tenants and sharecroppers, including provision for sharing, on a fair and equitable

basis, in payments under the programs established under subtitles

B through D.

‘‘(d) PROVISION OF TECHNICAL ASSISTANCE BY OTHER

SOURCES.—In the preparation and application of a conservation

compliance plan under subtitle B or similar plan required as a

condition for assistance from the Department of Agriculture, the

Secretary shall permit persons to secure technical assistance from

approved sources, as determined by the Secretary, other than the

Natural Resources Conservation Service. If the Secretary rejects

a technical determination made by such a source, the basis of

the Secretary’s determination must be supported by documented

evidence.

‘‘(e) REGULATIONS.—Not later than 90 days after the date of

enactment of the Federal Agriculture Improvement and Reform

Act of 1996, the Secretary shall issue regulations to implement

the conservation reserve and wetlands reserve programs established

under chapter 1 of subtitle D.’’.

SEC. 342. STATE TECHNICAL COMMITTEES.

(a) COMPOSITION.—Section 1261(c) of the Food Security Act

of 1985 (16 U.S.C. 3861(c))—

(1) in paragraph (7), by striking ‘‘and’’ at the end;

(2) in paragraph (8), by striking the period at the end

and inserting a semicolon; and

(3) by adding at the end the following:

‘‘(9) agricultural producers with demonstrable conservation

expertise;

‘‘(10) nonprofit organizations with demonstrable conservation expertise;

‘‘(11) persons knowledgeable about conservation techniques;

and

‘‘(12) agribusiness.’’.

(b) RESPONSIBILITIES.—Section 1262 of the Food Security Act

of 1985 (16 U.S.C. 3862) is amended—

(1) in subsection (a), by adding at the end the following:

‘‘Each State technical committee shall provide public notice

of, and permit public attendance at meetings considering, issues

of concern related to carrying out this title.’’;

(2) in subsection (b)(1), by adding at the end the following:

‘‘Each State technical committee shall establish criteria and

guidelines for evaluating petitions by agricultural producers

regarding new conservation practices and systems not already

described in field office technical guides.’’; and

(3) in subsection (c)—

(A) in paragraph (7), by striking ‘‘and’’ at the end;

(B) by redesignating paragraph (8) as paragraph (9);

and

(C) by inserting after paragraph (7) the following:

‘‘(8) establishing criteria and priorities for State initiatives

under the environmental quality incentives program under

chapter 4 of subtitle D; and’’.

SEC. 343. PUBLIC NOTICE AND COMMENT FOR REVISIONS TO CERTAIN

STATE TECHNICAL GUIDES.

After the date of enactment of this Act, the Secretary of Agriculture shall provide for public notice and comment under section

16 USC 3862

note.
110 STAT. 1010 PUBLIC LAW 104–127—APR. 4, 1996

553 of title 5, United States Code, with regard to any future

revisions to those provisions of the Natural Resources Conservation

Service State technical guides that are used to carry out subtitles

A, B, and C of title XII of the Food Security Act of 1985 (16

U.S.C. 3801 et seq.).

Subtitle F—National Natural Resources

Conservation Foundation

SEC. 351. SHORT TITLE.

This subtitle may be cited as the ‘‘National Natural Resources

Conservation Foundation Act’’.

SEC. 352. DEFINITIONS.

In this subtitle (unless the context otherwise requires):

(1) BOARD.—The term ‘‘Board’’ means the Board of Trustees

established under section 354.

(2) DEPARTMENT.—The term ‘‘Department’’ means the

Department of Agriculture.

(3) FOUNDATION.—The term ‘‘Foundation’’ means the

National Natural Resources Conservation Foundation established by section 353(a).

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

of Agriculture.

SEC. 353. NATIONAL NATURAL RESOURCES CONSERVATION FOUNDATION.

(a) ESTABLISHMENT.—A National Natural Resources Conservation Foundation is established as a charitable and nonprofit corporation for charitable, scientific, and educational purposes specified

in subsection (b). The Foundation is not an agency or instrumentality of the United States.

(b) DUTIES.—The Foundation shall—

(1) promote innovative solutions to the problems associated

with the conservation of natural resources on private lands,

particularly with respect to agriculture and soil and water

conservation;

(2) promote voluntary partnerships between government

and private interests in the conservation of natural resources;

(3) conduct research and undertake educational activities,

conduct and support demonstration projects, and make grants

to State and local agencies and nonprofit organizations;

(4) provide such other leadership and support as may be

necessary to address conservation challenges, such as the

prevention of excessive soil erosion, the enhancement of soil

and water quality, and the protection of wetlands, wildlife

habitat, and strategically important farmland subject to urban

conversion and fragmentation;

(5) encourage, accept, and administer private gifts of money

and real and personal property for the benefit of, or in connection with, the conservation and related activities and services

of the Department, particularly the Natural Resources Conservation Service;

(6) undertake, conduct, and encourage educational, technical, and other assistance, and other activities, that support

the conservation and related programs administered by the

16 USC 5802.

16 USC 5801.

16 USC 5801

note.

National Natural

Resources

Conservation

Foundation Act.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1011

Department (other than activities carried out on National Forest System lands), particularly the Natural Resources Conservation Service, except that the Foundation may not enforce

or administer a regulation of the Department; and

(7) raise private funds to promote the purposes of the

Foundation.

(c) LIMITATIONS AND CONFLICTS OF INTEREST.—

(1) POLITICAL ACTIVITIES.—The Foundation shall not

participate or intervene in a political campaign on behalf of

any candidate for public office.

(2) CONFLICTS OF INTEREST.—No director, officer, or

employee of the Foundation shall participate, directly or

indirectly, in the consideration or determination of any question

before the Foundation affecting—

(A) the financial interests of the director, officer, or

employee; or

(B) the interests of any corporation, partnership, entity,

organization, or other person in which the director, officer,

or employee—

(i) is an officer, director, or trustee; or

(ii) has any direct or indirect financial interest.

(3) LEGISLATION OR GOVERNMENT ACTION OR POLICY.—No

funds of the Foundation may be used in any manner for the

purpose of influencing legislation or government action or policy.

(4) LITIGATION.—No funds of the Foundation may be used

to bring or join an action against the United States.

SEC. 354. COMPOSITION AND OPERATION.

(a) COMPOSITION.—The Foundation shall be administered by

a Board of Trustees that shall consist of 9 voting members, each

of whom shall be a United States citizen and not a Federal officer.

The Board shall be composed of—

(1) individuals with expertise in agricultural conservation

policy matters;

(2) a representative of private sector organizations with

a demonstrable interest in natural resources conservation;

(3) a representative of statewide conservation organizations;

(4) a representative of soil and water conservation districts;

(5) a representative of organizations outside the Federal

Government that are dedicated to natural resources conservation education; and

(6) a farmer or rancher.

(b) NONGOVERNMENTAL EMPLOYEES.—Service as a member of

the Board shall not constitute employment by, or the holding of,

an office of the United States for the purposes of any Federal

law.

(c) MEMBERSHIP.—

(1) INITIAL MEMBERS.—The Secretary shall appoint 9 persons who meet the criteria established under subsection (a)

as the initial members of the Board and designate 1 of the

members as the initial chairperson for a 2-year term.

(2) TERMS OF OFFICE.—

(A) IN GENERAL.—A member of the Board shall serve

for a term of 3 years, except that the members appointed

16 USC 5803.
110 STAT. 1012 PUBLIC LAW 104–127—APR. 4, 1996

to the initial Board shall serve, proportionately, for terms

of 1, 2, and 3 years, as determined by the Secretary.

(B) LIMITATION ON TERMS.—No individual may serve

more than 2 consecutive 3-year terms as a member of

the Board.

(3) SUBSEQUENT MEMBERS.—The initial members of the

Board shall adopt procedures in the constitution of the Foundation for the nomination and selection of subsequent members

of the Board. The procedures shall require that each member,

at a minimum, meets the criteria established under subsection

(a) and shall provide for the selection of an individual, who

is not a Federal officer or a member of the Board.

(d) CHAIRPERSON.—After the appointment of an initial chairperson under subsection (c)(1), each succeeding chairperson of the

Board shall be elected by the members of the Board for a 2-

year term.

(e) VACANCIES.—A vacancy on the Board shall be filled by

the Board not later than 60 days after the occurrence of the vacancy.

(f) COMPENSATION.—A member of the Board shall receive no

compensation from the Foundation for the service of the member

on the Board.

(g) TRAVEL EXPENSES.—While away from the home or regular

place of business of a member of the Board in the performance

of services for the Board, the member shall be allowed travel

expenses paid by the Foundation, including per diem in lieu of

subsistence, at the same rate as a person employed intermittently

in the Government service is allowed under section 5703 of title

5, United States Code.

SEC. 355. OFFICERS AND EMPLOYEES.

(a) IN GENERAL.—The Board may—

(1) appoint, hire, and discharge the officers and employees

of the Foundation, other than appoint the initial Executive

Director of the Foundation;

(2) adopt a constitution and bylaws for the Foundation

that are consistent with the purposes of this subtitle; and

(3) undertake any other activities that may be necessary

to carry out this subtitle.

(b) OFFICERS AND EMPLOYEES.—

(1) APPOINTMENT AND HIRING.—An officer or employee of

the Foundation—

(A) shall not, by virtue of the appointment or employment of the officer or employee, be considered a Federal

employee for any purpose, including the provisions of title

5, United States Code, governing appointments in the

competitive service, except that such an individual may

participate in the Federal employee retirement system as

if the individual were a Federal employee; and

(B) may not be paid by the Foundation a salary in

excess of $125,000 per year.

(2) EXECUTIVE DIRECTOR.—

(A) INITIAL DIRECTOR.—The Secretary shall appoint an

individual to serve as the initial Executive Director of

the Foundation who shall serve, at the direction of the

Board, as the chief operating officer of the Foundation.

(B) SUBSEQUENT DIRECTORS.—The Board shall appoint

each subsequent Executive Director of the Foundation who

16 USC 5804.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1013

shall serve, at the direction of the Board, as the chief

operating officer of the Foundation.

(C) QUALIFICATIONS.—The Executive Director shall be

knowledgeable and experienced in matters relating to natural resources conservation.

SEC. 356. CORPORATE POWERS AND OBLIGATIONS OF THE FOUNDATION.

(a) IN GENERAL.—The Foundation—

(1) may conduct business throughout the United States

and the territories and possessions of the United States; and

(2) shall at all times maintain a designated agent who

is authorized to accept service of process for the Foundation,

so that the serving of notice to, or service of process on, the

agent, or mailed to the business address of the agent, shall

be considered as service on or notice to the Foundation.

(b) SEAL.—The Foundation shall have an official seal selected

by the Board that shall be judicially noticed.

(c) POWERS.—To carry out the purposes of the Foundation under

section 353(b), the Foundation shall have, in addition to the powers

otherwise provided under this subtitle, the usual powers of a corporation, including the power—

(1) to accept, receive, solicit, hold, administer, and use

any gift, devise, or bequest, either absolutely or in trust, of

real or personal property or any income from, or other interest

in, the gift, devise, or bequest;

(2) to acquire by purchase or exchange any real or personal

property or interest in property, except that funds provided

under section 360 may not be used to purchase an interest

in real property;

(3) unless otherwise required by instrument of transfer,

to sell, donate, lease, invest, reinvest, retain, or otherwise dispose of any property or income from property;

(4) to borrow money from private sources and issue bonds,

debentures, or other debt instruments, subject to section 359,

except that the aggregate amount of the borrowing and debt

instruments outstanding at any time may not exceed

$1,000,000;

(5) to sue and be sued, and complain and defend itself,

in any court of competent jurisdiction, except that a member

of the Board shall not be personally liable for an action in

the performance of services for the Board, except for gross

negligence;

(6) to enter into a contract or other agreement with an

agency of State or local government, educational institution,

or other private organization or person and to make such payments as may be necessary to carry out the functions of the

Foundation; and

(7) to do any and all acts that are necessary to carry

out the purposes of the Foundation.

(d) INTERESTS IN PROPERTY.—

(1) INTERESTS IN REAL PROPERTY.—The Foundation may

acquire, hold, and dispose of lands, waters, or other interests

in real property by donation, gift, devise, purchase, or exchange.

An interest in real property shall be treated, among other

things, as including an easement or other right for the preservation, conservation, protection, or enhancement of agricultural,

16 USC 5805.
110 STAT. 1014 PUBLIC LAW 104–127—APR. 4, 1996

natural, scenic, historic, scientific, educational, inspirational,

or recreational resources.

(2) GIFTS.—A gift, devise, or bequest may be accepted by

the Foundation even though the gift, devise, or bequest is

encumbered, restricted, or subject to a beneficial interest of

a private person if any current or future interest in the gift,

devise, or bequest is for the benefit of the Foundation.

SEC. 357. ADMINISTRATIVE SERVICES AND SUPPORT.

For each of fiscal years 1996 through 1998, the Secretary may

provide, without reimbursement, personnel, facilities, and other

administrative services of the Department to the Foundation.

SEC. 358. AUDITS AND PETITION OF ATTORNEY GENERAL FOR EQUITABLE RELIEF.

(a) AUDITS.—

(1) IN GENERAL.—The accounts of the Foundation shall

be audited in accordance with Public Law 88–504 (36 U.S.C.

1101 et seq.), including an audit of lobbying and litigation

activities carried out by the Foundation.

(2) CONFORMING AMENDMENT.—The first section of Public

Law 88–504 (36 U.S.C. 1101) is amended by adding at the

end the following:

‘‘(77) The National Natural Resources Conservation

Foundation.’’.

(b) RELIEF WITH RESPECT TO CERTAIN FOUNDATION ACTS OR

FAILURE TO ACT.—The Attorney General may petition in the United

States District Court for the District of Columbia for such equitable

relief as may be necessary or appropriate, if the Foundation—

(1) engages in, or threatens to engage in, any act, practice,

or policy that is inconsistent with this subtitle; or

(2) refuses, fails, neglects, or threatens to refuse, fail, or

neglect, to discharge the obligations of the Foundation under

this subtitle.

SEC. 359. RELEASE FROM LIABILITY.

(a) IN GENERAL.—The United States shall not be liable for

any debt, default, act, or omission of the Foundation. The full

faith and credit of the United States shall not extend to the Foundation.

(b) STATEMENT.—An obligation issued by the Foundation, and

a document offering an obligation, shall include a prominent statement that the obligation is not directly or indirectly guaranteed,

in whole or in part, by the United States (or an agency or instrumentality of the United States).

SEC. 360. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Department

to be made available to the Foundation $1,000,000 for each of

fiscal years 1997 through 1999 to initially establish and carry

out activities of the Foundation.

16 USC 5809.

16 USC 5808.

16 USC 5807.

16 USC 5806.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1015

Subtitle G—Forestry

SEC. 371. OFFICE OF INTERNATIONAL FORESTRY.

Section 2405 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 6704) is amended by adding at the end

the following:

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated for each of fiscal years 1996 through 2002

such sums as are necessary to carry out this section.’’.

SEC. 372. COOPERATIVE WORK FOR PROTECTION, MANAGEMENT, AND

IMPROVEMENT OF NATIONAL FOREST SYSTEM.

The penultimate paragraph of the matter under the heading

‘‘FOREST SERVICE.’’ of the first section of the Act of June 30,

1914 (38 Stat. 430, chapter 131; 16 U.S.C. 498), is amended—

(1) by inserting ‘‘, management,’’ after ‘‘the protection’’;

(2) by striking ‘‘national forests,’’ and inserting ‘‘National

Forest System,’’;

(3) by inserting ‘‘management,’’ after ‘‘protection,’’ both

places it appears; and

(4) by adding at the end the following: ‘‘Payment for work

undertaken pursuant to this paragraph may be made from

any appropriation of the Forest Service that is available for

similar work if a written agreement so provides and reimbursement will be provided by a cooperator in the same fiscal year

as the expenditure by the Forest Service. A reimbursement

received from a cooperator that covers the proportionate share

of the cooperator of the cost of the work shall be deposited

to the credit of the appropriation of the Forest Service from

which the payment was initially made or, if the appropriation

is no longer available, to the credit of an appropriation of

the Forest Service that is available for similar work. The Secretary of Agriculture shall establish written rules that establish

criteria to be used to determine whether the acceptance of

contributions of money under this paragraph would adversely

affect the ability of an officer or employee of the Department

of Agriculture to carry out a duty or program of the officer

or employee in a fair and objective manner or would compromise, or appear to compromise, the integrity of the program,

officer, or employee. The Secretary of Agriculture shall establish

written rules that protect the interests of the Forest Service

in cooperative work agreements.’’.

SEC. 373. FORESTRY INCENTIVES PROGRAM.

Section 4 of the Cooperative Forestry Assistance Act of 1978

(16 U.S.C. 2103) is amended—

(1) in subsection (j), by striking ‘‘annually’’ and inserting

‘‘for each of fiscal years 1996 through 2002’’; and

(2) by striking subsection (k).

SEC. 374. OPTIONAL STATE GRANTS FOR FOREST LEGACY PROGRAM.

Section 7 of the Cooperative Forestry Assistance Act of 1978

(16 U.S.C. 2103c) is amended—

(1) by redesignating subsection (l) as subsection (m); and

(2) by inserting after subsection (k) the following:

‘‘(l) OPTIONAL STATE GRANTS.—

Rules.

Rules.
110 STAT. 1016 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(1) IN GENERAL.—The Secretary shall, at the request of

a participating State, provide a grant to the State to carry

out the Forest Legacy Program in the State.

‘‘(2) ADMINISTRATION.—If a State elects to receive a grant

under this subsection—

‘‘(A) the Secretary shall use a portion of the funds

made available under subsection (m), as determined by

the Secretary, to provide a grant to the State; and

‘‘(B) the State shall use the grant to carry out the

Forest Legacy Program in the State, including the acquisition by the State of lands and interests in lands.’’.

Subtitle H—Miscellaneous Conservation

Provisions

SEC. 381. CONSERVATION ACTIVITIES OF COMMODITY CREDIT CORPORATION.

(a) IN GENERAL.—Section 5 of the Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended—

(1) by redesignating subsection (g) as subsection (h); and

(2) by inserting after subsection (f) the following:

‘‘(g) Carry out conservation or environmental programs authorized by law.’’.

(b) EFFECTIVE DATE.—The amendments made by subsection

(a) shall become effective on January 1, 1997.

SEC. 382. FLOODPLAIN EASEMENTS.

Section 403 of the Agricultural Credit Act of 1978 (16 U.S.C.

2203) is amended by inserting ‘‘, including the purchase of floodplain

easements,’’ after ‘‘emergency measures’’.

SEC. 383. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

Section 1538 of the Agriculture and Food Act of 1981 (16

U.S.C. 3461) is amended by striking ‘‘1991 through 1995’’ and

inserting ‘‘1996 through 2002’’.

SEC. 384. REPEAL OF REPORT REQUIREMENT.

Section 1342 of title 44, United States Code, is repealed.

SEC. 385. FLOOD RISK REDUCTION.

(a) IN GENERAL.—During fiscal years 1996 through 2002, the

Secretary of Agriculture (referred to in this section as the ‘‘Secretary’’) may enter into a contract with a producer on a farm

who has contract acreage under the Agricultural Market Transition

Act that is frequently flooded.

(b) DUTIES OF PRODUCERS.—Under the terms of the contract,

with respect to acres that are subject to the contract, the producer

must agree to—

(1) the termination of any contract acreage and production

flexibility contract under the Agricultural Market Transition

Act;

(2) forgo loans for contract commodities, oilseeds, and extra

long staple cotton;

(3) not apply for crop insurance issued or reinsured by

the Secretary;

(4) comply with applicable highly erodible land and wetlands conservation compliance requirements established under

7 USC 7334.

15 USC 714c

note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1017

title XII of the Food Security Act of 1985 (16 U.S.C. 3801

et seq.);

(5) not apply for any conservation program payments from

the Secretary;

(6) not apply for disaster program benefits provided by

the Secretary; and

(7) refund the payments, with interest, issued under the

flood risk reduction contract to the Secretary, if the producer

violates the terms of the contract or if the producer transfers

the property to another person who violates the contract.

(c) DUTIES OF THE SECRETARY.—In return for a contract entered

into by a producer under this section, the Secretary shall pay

the producer an amount that is not more than 95 percent of projected contract payments under the Agricultural Market Transition

Act that the Secretary estimates the producer would otherwise

have received during the period beginning at the time the contract

is entered into under this section and ending September 30, 2002.

(d) COMMODITY CREDIT CORPORATION.—The Secretary shall

carry out the program authorized by this section (other than subsection (e)) through the Commodity Credit Corporation.

(e) ADDITIONAL PAYMENTS.—

(1) IN GENERAL.—Subject to the availability of advanced

appropriations, the Secretary may make payments to a producer

described in subsection (a), in addition to the payments provided

under subsection (c), to offset other estimated Federal Government outlays on frequently flooded land.

(2) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry

out paragraph (1).

(f) LIMITATION ON PAYMENTS.—Amounts made available for

production flexibility contracts under section 113 shall be reduced

by an amount that is equal to the contract payments that producers

forgo under subsection (b)(1) of this section.

SEC. 386. CONSERVATION OF PRIVATE GRAZING LAND.

(a) FINDINGS.—Congress finds that—

(1) private grazing land constitutes nearly 1⁄2 of the nonFederal land of the United States and is basic to the environmental, social, and economic stability of rural communities;

(2) private grazing land contains a complex set of interactions among soil, water, air, plants, and animals;

(3) grazing land constitutes the single largest watershed

cover type in the United States and contributes significantly

to the quality and quantity of water available for all of the

many uses of the land;

(4) private grazing land constitutes the most extensive

wildlife habitat in the United States;

(5) private grazing land can provide opportunities for

improved nutrient management from land application of animal

manures and other by-product nutrient resources;

(6) owners and managers of private grazing land need

to continue to recognize conservation problems when the problems arise and receive sound technical assistance to improve

or conserve grazing land resources to meet ecological and economic demands;

(7) new science and technology must continually be made

available in a practical manner so owners and managers of

16 USC 2005b.
110 STAT. 1018 PUBLIC LAW 104–127—APR. 4, 1996

private grazing land may make informed decisions concerning

vital grazing land resources;

(8) agencies of the Department with private grazing land

responsibilities are the agencies that have the expertise and

experience to provide technical assistance, education, and

research to owners and managers of private grazing land for

the long-term productivity and ecological health of grazing land;

(9) although competing demands on private grazing land

resources are greater than ever before, assistance to private

owners and managers of private grazing land is currently limited and does not meet the demand and basic need for adequately sustaining or enhancing the private grazing land

resources; and

(10) private grazing land can be enhanced to provide many

benefits to all citizens of the United States through voluntary

cooperation among owners and managers of the land, local

conservation districts, and the agencies of the Department

responsible for providing assistance to owners and managers

of land and to conservation districts.

(b) PURPOSE.—It is the purpose of this section to authorize

the Secretary to provide a coordinated technical, educational, and

related assistance program to conserve and enhance private grazing

land resources and provide related benefits to all citizens of the

United States by—

(1) establishing a coordinated and cooperative Federal,

State, and local grazing conservation program for management

of private grazing land;

(2) strengthening technical, educational, and related assistance programs that provide assistance to owners and managers

of private grazing land;

(3) conserving and improving wildlife habitat on private

grazing land;

(4) conserving and improving fish habitat and aquatic systems through grazing land conservation treatment;

(5) protecting and improving water quality;

(6) improving the dependability and consistency of water

supplies;

(7) identifying and managing weed, noxious weed, and

brush encroachment problems on private grazing land; and

(8) integrating conservation planning and management

decisions by owners and managers of private grazing land,

on a voluntary basis.

(c) DEFINITIONS.—In this section:

(1) DEPARTMENT.—The term ‘‘Department’’ means the

Department of Agriculture.

(2) PRIVATE GRAZING LAND.—The term ‘‘private grazing

land’’ means private, State-owned, tribally-owned, and any

other non-federally owned rangeland, pastureland, grazed forest

land, and hay land.

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

of Agriculture.

(d) PRIVATE GRAZING LAND CONSERVATION ASSISTANCE.—

(1) ASSISTANCE TO GRAZING LANDOWNERS AND OTHERS.—

Subject to the availability of appropriations for this section,

the Secretary shall establish a voluntary program to provide

technical, educational, and related assistance to owners and

managers of private grazing land and public agencies, through
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1019

local conservation districts, to enable the landowners, managers, and public agencies to voluntarily carry out activities

that are consistent with this section, including—

(A) maintaining and improving private grazing land

and the multiple values and uses that depend on private

grazing land;

(B) implementing grazing land management technologies;

(C) managing resources on private grazing land, including—

(i) planning, managing, and treating private grazing land resources;

(ii) ensuring the long-term sustainability of private

grazing land resources;

(iii) harvesting, processing, and marketing private

grazing land resources; and

(iv) identifying and managing weed, noxious weed,

and brush encroachment problems;

(D) protecting and improving the quality and quantity

of water yields from private grazing land;

(E) maintaining and improving wildlife and fish habitat

on private grazing land;

(F) enhancing recreational opportunities on private

grazing land;

(G) maintaining and improving the aesthetic character

of private grazing lands; and

(H) identifying the opportunities and encouraging the

diversification of private grazing land enterprises.

(2) PROGRAM ELEMENTS.—

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

section, it shall be provided through a specific line-item

in the annual appropriations for the Natural Resources

Conservation Service.

(B) TECHNICAL ASSISTANCE AND EDUCATION.—Personnel of the Department trained in pasture and range

management shall be made available under the program

to deliver and coordinate technical assistance and education

to owners and managers of private grazing land, at the

request of the owners and managers.

(e) GRAZING TECHNICAL ASSISTANCE SELF-HELP.—

(1) FINDINGS.—Congress finds that—

(A) there is a severe lack of technical assistance for

farmers and ranchers who graze livestock;

(B) Federal budgetary constraints preclude any significant expansion, and may force a reduction of, current levels

of technical support; and

(C) farmers and ranchers have a history of cooperatively working together to address common needs in the

promotion of their products and in the drainage of wet

areas through drainage districts.

(2) ESTABLISHMENT OF GRAZING DEMONSTRATION.—In

accordance with paragraph (3), the Secretary may establish

2 grazing management demonstration districts at the recommendation of the grazing lands conservation initiative steering committee.

(3) PROCEDURE.—
110 STAT. 1020 PUBLIC LAW 104–127—APR. 4, 1996

(A) PROPOSAL.—Within a reasonable time after the

submission of a request of an organization of farmers or

ranchers engaged in grazing, the Secretary shall propose

that a grazing management district be established.

(B) FUNDING.—The terms and conditions of the funding

and operation of the grazing management district shall

be proposed by the producers.

(C) APPROVAL.—The Secretary shall approve the proposal if the Secretary determines that the proposal—

(i) is reasonable;

(ii) will promote sound grazing practices; and

(iii) contains provisions similar to the provisions

contained in the beef promotion and research order

issued under section 4 of the Beef Research and

Information Act (7 U.S.C. 2903) in effect on the date

of enactment of this Act.

(D) AREA INCLUDED.—The area proposed to be included

in a grazing management district shall be determined by

the Secretary on the basis of a petition by farmers or

ranchers.

(E) AUTHORIZATION.—The Secretary may use authority

under the Agricultural Adjustment Act (7 U.S.C. 601 et

seq.), reenacted with amendments by the Agricultural

Marketing Agreement Act of 1937, to operate, on a demonstration basis, a grazing management district.

(F) ACTIVITIES.—The activities of a grazing management district shall be scientifically sound activities, as

determined by the Secretary in consultation with a technical advisory committee composed of ranchers, farmers,

and technical experts.

(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section— (1) $20,000,000 for fiscal year 1996;

(2) $40,000,000 for fiscal year 1997; and

(3) $60,000,000 for fiscal year 1998 and each subsequent

fiscal year.

SEC. 387. WILDLIFE HABITAT INCENTIVES PROGRAM.

(a) IN GENERAL.—The Secretary of Agriculture, in consultation

with the State technical committees established under section 1261

of the Food Security Act of 1985 (16 U.S.C. 3861), shall establish

a program under the Natural Resources Conservation Service to

be known as the ‘‘Wildlife Habitat Incentive Program’’.

(b) COST-SHARE PAYMENTS.—Under the program, the Secretary

shall make cost-share payments to landowners to develop upland

wildlife, wetland wildlife, threatened and endangered species, fish,

and other types of wildlife habitat approved by the Secretary.

(c) FUNDING.—To carry out this section, a total of $50,000,000

shall be made available for fiscal years 1996 through 2002 from

funds made available to carry out subchapter B of chapter 1 of

subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C.

3831 et seq.).

SEC. 388. FARMLAND PROTECTION PROGRAM.

(a) IN GENERAL.—The Secretary of Agriculture shall establish

and carry out a farmland protection program under which the

Secretary shall purchase conservation easements or other interests

in not less than 170,000, nor more than 340,000, acres of land

Establishment.

16 USC 3830

note.

Establishment.

16 USC 3836a.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1021

with prime, unique, or other productive soil that is subject to

a pending offer from a State or local government for the purpose

of protecting topsoil by limiting nonagricultural uses of the land.

(b) CONSERVATION PLAN.—Any highly erodible cropland for

which a conservation easement or other interest is purchased under

this section shall be subject to the requirements of a conservation

plan that requires, at the option of the Secretary, the conversion

of the cropland to less intensive uses.

(c) FUNDING.—The Secretary shall use not more than

$35,000,000 of the funds of the Commodity Credit Corporation

to carry out this section.

SEC. 389. INTERIM MORATORIUM ON BYPASS FLOWS.

(a) MORATORIUM.—There shall be an 18-month moratorium

on any Forest Service decision to require bypass flows or any

other relinquishment of the unimpaired use of a decreed water

right as a condition of renewal or reissuance of a land use authorization permit.

(b) LIMITATIONS.—Subsection (a) shall not affect—

(1) obligations or authority of the Secretary of Agriculture

to protect public health and safety; and

(2) obligations or authority under the Endangered Species

Act of 1973 (16 U.S.C. 1531 et seq.), or applicable State law.

(c) RULES OF CONSTRUCTION.—

(1) EXISTING NON-FEDERAL WATER RIGHTS.—Nothing in this

section prevents or inhibits the exercise of the use and operation

of existing non-Federal water rights on or above the National

Forest land that require land use authorization permits from

the Forest Service to access water supply facilities.

(2) RENEWAL OR REISSUANCE OF EXPIRING LAND USE

AUTHORIZATION FOR DECREED WATER RIGHTS.—Nothing in this

section prevents or inhibits the renewal or reissuance of expiring land use authorizations for decreed water rights. The Forest

Service may extend, as needed, any expiring land use authorization for such time as is necessary to incorporate the results

of the study authorized by subsection (d).

(d) STUDY OF WATER RIGHTS ACROSS FEDERAL LANDS.—

(1) ESTABLISHMENT.—Not later than 60 days after the date

of enactment of this Act, there shall be established a Water

Rights Task Force to study the subjects described in paragraph

(3).

(2) MEMBERSHIP.—The Task Force shall be composed of

7 members appointed as follows:

(A) 1 member shall be appointed by the Secretary

of Agriculture.

(B) 2 members shall be appointed by the Speaker of

the House of Representatives and 1 member shall be

appointed by the Minority Leader of the House of Representatives.

(C) 2 members shall be appointed by the Majority

Leader of the Senate and 1 member shall be appointed

by the Minority Leader of the Senate.

(3) SUBJECTS TO BE STUDIED.—The Task Force shall study

and make recommendations on—

(A) whether Federal water rights should be acquired

for environmental protection on National Forest land;

Water.

16 USC 526 note.

National Forest

Service.
110 STAT. 1022 PUBLIC LAW 104–127—APR. 4, 1996

(B) measures necessary to protect the free exercise

of non-Federal water rights requiring easements and permits from the Forest Service;

(C) the protection of minimum instream flows for

environmental and watershed management purposes on

National Forest land through purchases or exchanges from

willing sellers in accordance with State law;

(D) the effects of any of the recommendations made

under this paragraph on existing State laws, regulations,

and customs of water usage; and

(E) measures that would be useful in avoiding or resolving conflicts between the Forest Service’s responsibilities

for natural resource and environmental protection, the public interest, and the property rights and interests of water

holders with special use permits for water facilities, including the study of the Federal acquisition of water rights,

dispute resolution, mitigation, and compensation.

(4) FINAL REPORT.—As soon as practicable, but not later

than 1 year, after the date of enactment of this Act, the Task

Force shall provide the final report of the Task Force to—

(A) the Secretary of Agriculture;

(B) the Speaker of the House of Representatives;

(C) the President pro tempore of the Senate;

(D) the Chairman of the Committee on Agriculture

of the House of Representatives;

(E) the Chairman of the Committee on Agriculture,

Nutrition, and Forestry of the Senate;

(F) the Chairman of the Committee on Resources of

the House of Representatives; and

(G) the Chairman of the Committee on Energy and

Natural Resources of the Senate.

(5) AUTHORIZATION OF FUNDS.—The Secretary of Agriculture shall use funds made available for salaries and administrative expenses of the Department of Agriculture to carry

out this subsection.

SEC. 390. EVERGLADES ECOSYSTEM RESTORATION.

(a) IN GENERAL.—On July 1, 1996, out of any funds in the

Treasury not otherwise appropriated, the Secretary of the Treasury

shall provide $200,000,000 to the Secretary of the Interior to carry

out this section.

(b) ENTITLEMENT.—The Secretary of the Interior (referred to

in this section as the ‘‘Secretary’’)—

(1) shall be entitled to receive the funds made available

under subsection (a);

(2) shall accept the funds; and

(3) shall use the funds to—

(A) conduct restoration activities in the Everglades

ecosystem in South Florida, which shall include the acquisition of real property and interests in real property located

within the Everglades ecosystem; and

(B) fund resource protection and resource maintenance

activities in the Everglades ecosystem.

(c) SAVINGS PROVISION.—Nothing in this subsection precludes

the Secretary from transferring funds to the Army Corps of Engineers, the State of Florida, or the South Florida Water Management

District to carry out subsection (b)(3).

Florida.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1023

(d) DEADLINE.—The Secretary shall use the funds made available under subsection (a) for restoration activities referred to in

subsection (b)(3) not later than December 31, 1999.

(e) REPORT TO CONGRESS.—For each of calendar years 1996

through 1999, the Secretary shall submit an annual report to Congress describing all activities carried out under subsection (b)(3).

(f) SEPARATE AND ADDITIONAL EVERGLADES RESTORATION

ACCOUNT.—

(1) ESTABLISHMENT.—There is established in the Treasury

a special account (to be known as the ‘‘Everglades Restoration

Account’’), which shall consist of such funds as may be deposited

in the account under paragraph (2). The account shall be separate, and in addition to, funds deposited in the Treasury under

subsection (a).

(2) SOURCE OF FUNDS FOR ACCOUNT.—

(A) PROCEEDS FROM SURPLUS PROPERTY.—

(i) IN GENERAL.—Subject to subparagraph (B), the

Administrator shall deposit in the special account all

funds received by the Administrator, on or after the

date of enactment of this Act, from the disposal pursuant to the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) of surplus

real property located in the State of Florida.

(ii) AVAILABILITY AND DISPOSITION OF FEDERAL

LAND.—

(I) IDENTIFICATION.—Any Federal real property located in the State of Florida (excluding lands

under the administrative jurisdiction of the Secretary that are set aside for conservation purposes)

shall be identified for disposal or exchange under

this subsection and shall be presumed available

for purposes of this subsection unless the head

of the agency controlling the property determines

that there is a compelling program need for any

property identified by the Secretary.

(II) AVAILABILITY.—Property identified by the

Secretary for which there is no demonstrated

compelling program need shall, not later than 90

days after a request by the Secretary, be reported

to the Administrator and shall be made available

to the Administrator who shall consider the property to be surplus property for purposes of the

Federal Property and Administrative Services Act

of 1949 (40 U.S.C. 471 et seq.).

(III) PRIORITIZATION OF DISPOSITION.—The

Administrator may prioritize the disposition of

property made available under this subparagraph

to permit the property to be sold as quickly as

practicable in a manner that is consistent with

the best interests of the Federal Government.

(B) LIMIT ON TOTAL AMOUNT OF DEPOSITS.—The total

amount of funds deposited in the special account under

subparagraph (A) shall not exceed $100,000,000.

(C) EFFECT ON CLOSURE OF MILITARY INSTALLATIONS.—

Nothing in this section alters the disposition of any proceeds arising from the disposal of real property pursuant

to a base closure law.
110 STAT. 1024 PUBLIC LAW 104–127—APR. 4, 1996

(3) USE OF SPECIAL ACCOUNT.—Funds in the special account

shall be available to the Secretary until expended under this

paragraph. The Secretary shall use funds in the special account

to assist in the restoration of the Everglades ecosystem in

South Florida through—

(A) subject to paragraph (4), the acquisition of real

property and interests in real property located within the

Everglades ecosystem; and

(B) the funding of resource protection and resource

maintenance activities in the Everglades ecosystem.

(4) STATE CONTRIBUTION.—The Secretary may not expend

any funds from the special account to acquire a parcel of

real property, or an interest in a parcel of real property, under

paragraph (3)(A) unless the Secretary obtains, or has previously

obtained, a contribution from the State of Florida in an amount

equal to not less than 50 percent of the appraised value of

the parcel or interest to be acquired, as determined by the

Secretary.

(5) DEFINITIONS.—In this subsection:

(A) ADMINISTRATOR.—The term ‘‘Administrator’’ means

the Administrator of General Services.

(B) BASE CLOSURE LAW.—The term ‘‘base closure law’’

means each of the following:

(i) The Defense Base Closure and Realignment

Act of 1990 (part A of title XXIX of Public Law 101–

510; 10 U.S.C. 2687 note).

(ii) Title II of the Defense Authorization Amendments and Base Closure and Realignment Act (Public

Law 100–526; 10 U.S.C. 2687 note).

(iii) Section 2687 of title 10, United States Code.

(iv) Any other similar law enacted after the date

of enactment of this Act.

(C) EVERGLADES ECOSYSTEM.—The term ‘‘Everglades

ecosystem’’ means the Florida Everglades Restoration area

that extends from the Kissimmee River basin to Florida

Bay.

(D) EXCESS PROPERTY.—The term ‘‘excess property’’ has

the meaning provided in section 3 of the Federal Property

and Administrative Services Act of 1949 (40 U.S.C. 472).

(E) EXECUTIVE AGENCY.—The term ‘‘executive agency’’

has the meaning provided in section 3 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.

472).

(F) SPECIAL ACCOUNT.—The term ‘‘special account’’

means the Everglades Restoration Account established

under paragraph (1).

(G) SURPLUS PROPERTY.—The term ‘‘surplus property’’

has the meaning provided in section 3 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.

472).

(g) REPORT TO DETERMINE THE FEASIBILITY OF ADDITIONAL

LAND ACQUISITION AND RESTORATION ACTIVITIES.—

(1) IN GENERAL.—The Secretary shall conduct an investigation to determine what, if any, unreserved and unappropriated

Federal lands (or mineral interests in any such lands) under

the administrative jurisdiction of the Secretary are suitable
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1025

for disposal or exchange for the purpose of conducting restoration activities in the Everglades region.

(2) CONSERVATION LANDS.—No lands under the administrative jurisdiction of the Secretary that are set aside for conservation purposes shall be identified for disposal or exchange under

this subsection.

(3) FLORIDA.—In carrying out this subsection, the Secretary

shall, to the maximum extent practicable, determine which

lands and mineral interests located within the State of Florida

are suitable for disposal or exchange before making the determination for eligible lands or interests in other States.

(4) PUBLIC ACCESS.—In carrying out this subsection, the

Secretary shall consider that in disposing of lands, the Secretary shall retain such interest in the lands as may be necessary to ensure that the general public is not precluded from

reasonable access to the lands for purposes of fishing, hunting,

or other recreational uses.

(5) REPORT.—Not later than 1 year after the date of enactment of this Act, the Secretary shall submit a report to the

Committee on Resources of the House of Representatives and

the Committee on Energy and Natural Resources of the Senate

describing the results of the investigation conducted under

this subsection. The report shall describe the specific parcels

identified under this subsection, establish the priorities for

disposal or exchange among the parcels, and estimate the values of the parcels.

SEC. 391. AGRICULTURAL AIR QUALITY RESEARCH OVERSIGHT.

(a) FINDINGS.—Congress finds that—

(1) various studies have alleged that agriculture is a source

of PM-10 emissions;

(2) many of these studies have often been based on erroneous data;

(3) Federal research activities are currently being conducted by the Department of Agriculture to determine the

true extent to which agricultural activities contribute to air

pollution and to determine cost-effective ways in which the

agricultural industry can reduce any pollution that exists; and

(4) any Federal policy recommendations that may be issued

by any Federal agency to address air pollution problems related

to agriculture or any other industrial activity should be based

on sound scientific findings that are subject to adequate peer

review and should take into account economic feasibility.

(b) PURPOSE.—The purpose of this section is to encourage the

Secretary of Agriculture to continue to strengthen vital research

efforts related to agricultural air quality.

(c) OVERSIGHT COORDINATION.—

(1) INTERGOVERNMENTAL COOPERATION.—The Secretary

shall, to the maximum extent practicable with respect to the

Department of Agriculture and other Federal departments and

agencies, ensure intergovernmental cooperation in research

activities related to agricultural air quality and avoid duplication of the activities.

(2) CORRECT DATA.—The Secretary shall, to the maximum

extent practicable, ensure that the results of any research

related to agricultural air quality conducted by Federal agencies

7 USC 5405.
110 STAT. 1026 PUBLIC LAW 104–127—APR. 4, 1996

not report erroneous data with respect to agricultural air quality.

(d) TASK FORCE.— (1) ESTABLISHMENT.—The Chief of the National Resources

Conservation Service shall establish a task force to address

agricultural air quality issues.

(2) COMPOSITION.—The task force shall be comprised of

employees of the Department of Agriculture, industry representatives, and other experts in the fields of agriculture and air

quality.

(3) DUTIES.—The task force shall advise the Secretary with

respect to the role of the Secretary for providing oversight

and coordination related to agricultural air quality.

TITLE IV—NUTRITION ASSISTANCE

SEC. 401. FOOD STAMP PROGRAM.

(a) DISQUALIFICATION OF A STORE OR CONCERN.—Section

12(b)(3)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2021(b)(3)(B))

is amended—

(1) by striking the second parenthetical; and

(2) by striking ‘‘; or’’ and inserting the following: ‘‘, including

evidence that—

‘‘(i) the ownership of the store or food concern

was not aware of, did not approve of, did not benefit

from, and was not involved in the conduct of the violation; and

‘‘(ii)(I) the management of the store or food concern

was not aware of, did not approve of, did not benefit

from, and was not involved in the conduct of the violation; or

‘‘(II) the management was aware of, approved of,

benefited from, or was involved in the conduct of no

more than 1 previous violation by the store or food

concern; or’’.

(b) EMPLOYMENT AND TRAINING.—Section 16(h)(1) of the Food

Stamp Act of 1977 (7 U.S.C. 2025(h)(1)) is amended by striking

‘‘1995’’ each place it appears and inserting ‘‘2002’’.

(c) AUTHORIZATION OF PILOT PROJECTS.—The last sentence of

section 17(b)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C.

2026(b)(1)(A)) is amended by striking ‘‘1995’’ and inserting ‘‘2002’’.

(d) OUTREACH DEMONSTRATION PROJECTS.—The first sentence

of section 17(j)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C.

2026(j)(1)(A)) is amended by striking ‘‘1995’’ and inserting ‘‘2002’’.

(e) AUTHORIZATION FOR APPROPRIATIONS.—The first sentence

of section 18(a)(1) of the Food Stamp Act of 1977 (7 U.S.C.

2027(a)(1)) is amended by striking ‘‘1995’’ and inserting ‘‘1997’’.

(f) REAUTHORIZATION OF PUERTO RICO NUTRITION ASSISTANCE

PROGRAM.—The first sentence of section 19(a)(1)(A) of the Food

Stamp Act of 1977 (7 U.S.C. 2028(a)(1)(A)) is amended by striking

‘‘$974,000,000’’ and all that follows through ‘‘fiscal year 1995’’ and

inserting ‘‘$1,143,000,000 for fiscal year 1996, $1,174,000,000 for

fiscal year 1997, $1,204,000,000 for fiscal year 1998, $1,236,000,000

for fiscal year 1999, $1,268,000,000 for fiscal year 2000,

$1,301,000,000 for fiscal year 2001, and $1,335,000,000 for fiscal

year 2002’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1027

(g) AMERICAN SAMOA.—The Food Stamp Act of 1977 (7 U.S.C.

2011 et seq.) is amended by adding at the end the following:

‘‘SEC. 24. TERRITORY OF AMERICAN SAMOA.

‘‘Effective October 1, 1995, from amounts made available to

carry out this Act, the Secretary shall pay to the Territory of

American Samoa not more than $5,300,000 for each of fiscal years

1996 through 2002 to finance 100 percent of the expenditures

for the fiscal year for a nutrition assistance program extended

under section 601(c) of Public Law 96–597 (48 U.S.C. 1469d(c)).’’.

(h) ASSISTANCE FOR COMMUNITY FOOD PROJECTS.—The Food

Stamp Act of 1977 (7 U.S.C. 2011 et seq.) (as amended by subsection

(g)) is amended by adding at the end the following:

‘‘SEC. 25. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

‘‘(a) DEFINITION OF COMMUNITY FOOD PROJECTS.—In this section, the term ‘community food project’ means a community-based

project that requires a 1-time infusion of Federal assistance to

become self-sustaining and that is designed to—

‘‘(1) meet the food needs of low-income people;

‘‘(2) increase the self-reliance of communities in providing

for their own food needs; and

‘‘(3) promote comprehensive responses to local food, farm,

and nutrition issues.

‘‘(b) AUTHORITY TO PROVIDE ASSISTANCE.—

‘‘(1) IN GENERAL.—From amounts made available to carry

out this Act, the Secretary may make grants to assist eligible

private nonprofit entities to establish and carry out community

food projects.

‘‘(2) LIMITATION ON GRANTS.—The total amount of funds

provided as grants under this section may not exceed—

‘‘(A) $1,000,000 for fiscal year 1996; and

‘‘(B) $2,500,000 for each of fiscal years 1997 through

2002.

‘‘(c) ELIGIBLE ENTITIES.—To be eligible for a grant under subsection (b), a private nonprofit entity must—

‘‘(1) have experience in the area of—

‘‘(A) community food work, particularly concerning

small and medium-sized farms, including the provision of

food to people in low-income communities and the development of new markets in low-income communities for agricultural producers; or

‘‘(B) job training and business development activities

for food-related activities in low-income communities;

‘‘(2) demonstrate competency to implement a project, provide fiscal accountability, collect data, and prepare reports and

other necessary documentation; and

‘‘(3) demonstrate a willingness to share information with

researchers, practitioners, and other interested parties.

‘‘(d) PREFERENCE FOR CERTAIN PROJECTS.—In selecting community food projects to receive assistance under subsection (b), the

Secretary shall give a preference to projects designed to—

‘‘(1) develop linkages between 2 or more sectors of the

food system;

‘‘(2) support the development of entrepreneurial projects;

‘‘(3) develop innovative linkages between the for-profit and

nonprofit food sectors; or

7 USC 2034.

7 USC 2033.

Effective date.
110 STAT. 1028 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(4) encourage long-term planning activities and multi-system, interagency approaches.

‘‘(e) MATCHING FUNDS REQUIREMENTS.—

‘‘(1) REQUIREMENTS.—The Federal share of the cost of

establishing or carrying out a community food project that

receives assistance under subsection (b) may not exceed 50

percent of the cost of the project during the term of the grant.

‘‘(2) CALCULATION.—In providing for the non-Federal share

of the cost of carrying out a community food project, the entity

receiving the grant shall provide for the share through a payment in cash or in kind, fairly evaluated, including facilities,

equipment, or services.

‘‘(3) SOURCES.—An entity may provide for the non-Federal

share through State government, local government, or private

sources.

‘‘(f) TERM OF GRANT.—

‘‘(1) SINGLE GRANT.—A community food project may be

supported by only a single grant under subsection (b).

‘‘(2) TERM.—The term of a grant under subsection (b) may

not exceed 3 years.

‘‘(g) TECHNICAL ASSISTANCE AND RELATED INFORMATION.—

‘‘(1) TECHNICAL ASSISTANCE.—In carrying out this section,

the Secretary may provide technical assistance regarding

community food projects, processes, and development to an

entity seeking the assistance.

‘‘(2) SHARING INFORMATION.—

‘‘(A) IN GENERAL.—The Secretary may provide for the

sharing of information concerning community food projects

and issues among and between government, private forprofit and nonprofit groups, and the public through publications, conferences, and other appropriate forums.

‘‘(B) OTHER INTERESTED PARTIES.—The Secretary may

share information concerning community food projects with

researchers, practitioners, and other interested parties.

‘‘(h) EVALUATION.—

‘‘(1) IN GENERAL.—The Secretary shall provide for the

evaluation of the success of community food projects supported

using funds under this section.

‘‘(2) REPORT.—Not later than January 30, 2002, the Secretary shall submit a report to Congress regarding the results

of the evaluation.’’.

SEC. 402. COMMODITY DISTRIBUTION PROGRAM; COMMODITY SUPPLEMENTAL FOOD PROGRAM.

(a) REAUTHORIZATION.—The first sentence of section 4(a) of

the Agriculture and Consumer Protection Act of 1973 (Public Law

93–86; 7 U.S.C. 612c note) is amended by striking ‘‘1995’’ and

inserting ‘‘2002’’.

(b) FUNDING.—Section 5 of the Agriculture and Consumer

Protection Act of 1973 (Public Law 93–86; 7 U.S.C. 612c note)

is amended—

(1) in subsection (a)(2), by striking ‘‘1995’’ and inserting

‘‘2002’’;

(2) in subsection (d)(2), by striking ‘‘1995’’ and inserting

‘‘2002’’; and

(3) by adding at the end the following:
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1029

‘‘(l) CARRIED-OVER FUNDS.—Not more than 20 percent of any

commodity supplemental food program food funds carried over

under this section shall be available for administrative expenses

of the program.’’.

SEC. 403. EMERGENCY FOOD ASSISTANCE PROGRAM.

(a) REAUTHORIZATION.—The first sentence of section 204(a)(1)

of the Emergency Food Assistance Act of 1983 (Public Law 98–

8; 7 U.S.C. 612c note) is amended by striking ‘‘1995’’ and inserting

‘‘2002’’.

(b) PROGRAM TERMINATION.—Section 212 of the Emergency

Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C. 612c note)

is amended by striking ‘‘1995’’ and inserting ‘‘2002’’.

(c) REQUIRED PURCHASES OF COMMODITIES.—Section 214 of the

Emergency Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C.

612c note) is amended—

(1) in the first sentence of subsection (a), by striking ‘‘1995’’

and inserting ‘‘2002’’; and

(2) in subsection (e), by striking ‘‘1995’’ each place it

appears and inserting ‘‘2002’’.

SEC. 404. SOUP KITCHEN AND FOOD BANK PROGRAM.

Section 110 of the Hunger Prevention Act of 1988 (Public Law

100–435; 7 U.S.C. 612c note) is amended—

(1) in the first sentence of subsection (a), by striking ‘‘1995’’

and inserting ‘‘2002’’; and

(2) in subsection (c)(2)—

(A) in the paragraph heading, by striking ‘‘1992

THROUGH 1995’’ and inserting ‘‘SUBSEQUENT’’; and

(B) by striking ‘‘1995’’ each place it appears and inserting ‘‘2002’’.

SEC. 405. NATIONAL COMMODITY PROCESSING.

The first sentence of section 1114(a)(2)(A) of the Agriculture

and Food Act of 1981 (7 U.S.C. 1431e(2)(A)) is amended by striking

‘‘1995’’ and inserting ‘‘2002’’.

TITLE V—AGRICULTURAL PROMOTION

Subtitle A—Commodity Promotion and

Evaluation

SEC. 501. COMMODITY PROMOTION AND EVALUATION.

(a) COMMODITY PROMOTION LAW DEFINED.—In this section, the

term ‘‘commodity promotion law’’ means a Federal law that provides

for the establishment and operation of a promotion program regarding an agricultural commodity that includes a combination of promotion, research, industry information, or consumer information

activities, is funded by mandatory assessments on producers or

processors, and is designed to maintain or expand markets and

uses for the commodity (as determined by the Secretary). The

term includes—

(1) the marketing promotion provisions under section

8c(6)(I) of the Agricultural Adjustment Act (7 U.S.C. 608c(6)(I)),

reenacted with amendments by the Agricultural Marketing

Agreement Act of 1937;

7 USC 7401.
110 STAT. 1030 PUBLIC LAW 104–127—APR. 4, 1996

(2) Public Law 89–502 (7 U.S.C. 2101 et seq.);

(3) title III of Public Law 91–670 (7 U.S.C. 2611 et seq.);

(4) Public Law 93–428 (7 U.S.C. 2701 et seq.);

(5) Public Law 94–294 (7 U.S.C. 2901 et seq.);

(6) subtitle B of title I of Public Law 98–180 (7 U.S.C.

4501 et seq.);

(7) Public Law 98–590 (7 U.S.C. 4601 et seq.);

(8) subtitle B of title XVI of Public Law 99–198 (7 U.S.C.

4801 et seq.);

(9) subtitle C of title XVI of Public Law 99–198 (7 U.S.C.

4901 et seq.);

(10) subtitle B of title XIX of Public Law 101–624 (7 U.S.C.

6101 et seq.);

(11) subtitle E of title XIX of Public Law 101–624 (7 U.S.C.

6301 et seq.);

(12) subtitle H of title XIX of Public Law 101–624 (7

U.S.C. 6401 et seq.);

(13) Public Law 103–190 (7 U.S.C. 6801 et seq.);

(14) Public Law 103–407 (7 U.S.C. 7101 et seq.);

(15) subtitle B;

(16) subtitle C;

(17) subtitle D; or

(18) subtitle E.

(b) FINDINGS.—Congress finds the following:

(1) It is in the national public interest and vital to the

welfare of the agricultural economy of the United States to

maintain and expand existing markets and develop new markets and uses for agricultural commodities through industryfunded, Government-supervised, generic commodity promotion

programs established under commodity promotion laws.

(2) These generic commodity promotion programs, funded

by the agricultural producers or processors who most directly

reap the benefits of the programs and supervised by the Secretary of Agriculture, provide a unique opportunity for producers and processors to inform consumers about their products.

(3) The central congressional purpose underlying each

commodity promotion law has always been to maintain and

expand markets for the agricultural commodity covered by the

law, rather than to maintain or expand the share of those

markets held by any individual producer or processor.

(4) The commodity promotion laws were neither designed

nor intended to prohibit or restrict, and the promotion programs

established and funded pursuant to these laws do not prohibit

or restrict, individual advertising or promotion of the covered

commodities by any producer, processor, or group of producers

or processors.

(5) It has never been the intent of Congress for the generic

commodity promotion programs established and funded by the

commodity promotion laws to replace the individual advertising

and promotion efforts of producers or processors.

(6) An individual producer’s or processor’s own advertising

initiatives are typically designed to increase the share of the

market held by that producer or processor rather than to

increase or expand the overall size of the market.

(7) In contrast, a generic commodity promotion program

is intended and designed to maintain or increase the overall

demand for the agricultural commodity covered by the program
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1031

and increase the size of the market for that commodity, often

by utilizing promotion methods and techniques that individual

producers and processors typically are unable, or have no incentive, to employ.

(8) The commodity promotion laws establish promotion programs that operate as ‘‘self-help’’ mechanisms for producers

and processors to fund generic promotions for covered commodities which, under the required supervision and oversight of

the Secretary of Agriculture—

(A) further specific national governmental goals, as

established by Congress; and

(B) produce nonideological and commercial communication the purpose of which is to further the governmental

policy and objective of maintaining and expanding the markets for the covered commodities.

(9) While some commodity promotion laws grant a producer

or processor the option of crediting individual advertising conducted by the producer or processor for all or a portion of

the producer’s or processor’s marketing promotion assessments,

all promotion programs established under the commodity promotion laws, both those programs that permit credit for individual advertising and those programs that do not contain such

provisions, are very narrowly tailored to fulfill the congressional

purposes of the commodity promotion laws without impairing

or infringing the legal or constitutional rights of any individual

producer or processor.

(10) These generic commodity promotion programs are of

particular benefit to small producers who often lack the

resources or market power to advertise on their own and who

are otherwise often unable to benefit from the economies of

scale available in promotion and advertising.

(11) Periodic independent evaluation of the effectiveness

of these generic commodity promotion programs will assist Congress and the Secretary of Agriculture in ensuring that the

objectives of the programs are met.

(c) INDEPENDENT EVALUATION OF PROMOTION PROGRAM

EFFECTIVENESS.—Except as otherwise provided by law, each

commodity board established under the supervision and oversight

of the Secretary of Agriculture pursuant to a commodity promotion

law shall, not less often than every 5 years, authorize and fund,

from funds otherwise available to the board, an independent evaluation of the effectiveness of the generic commodity promotion programs and other programs conducted by the board pursuant to

a commodity promotion law. The board shall submit to the Secretary, and make available to the public, the results of each periodic

independent evaluation conducted under this subsection.

(d) ADMINISTRATIVE COSTS.—The Secretary shall annually provide to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry

of the Senate information on administrative expenses on programs

established under commodity promotion laws.

Public

information.
110 STAT. 1032 PUBLIC LAW 104–127—APR. 4, 1996

Subtitle B—Issuance of Orders for Promotion, Research, and Information Activities Regarding Agricultural Commodities

SEC. 511. SHORT TITLE.

This subtitle may be cited as the ‘‘Commodity Promotion,

Research, and Information Act of 1996’’.

SEC. 512. FINDINGS AND PURPOSE.

(a) FINDINGS.—Congress finds the following:

(1) The production of agricultural commodities plays a

significant role in the economy of the United States. Thousands

of producers in the United States are involved in the production

of agricultural commodities, and such commodities are

consumed by millions of people throughout the United States

and foreign countries.

(2) Agricultural commodities must be of high quality, readily available, handled properly, and marketed efficiently to

ensure that consumers have an adequate supply.

(3) The maintenance and expansion of existing markets

and the development of new markets for agricultural commodities through generic commodity promotion, research, and

information programs are vital to the welfare of persons

engaged in the production, marketing, and consumption of such

commodities, as well as to the general economy of the United

States.

(4) Generic promotion, research, and information activities

for agricultural commodities play a unique role in advancing

the demand for such commodities, since such activities increase

the total market for a product to the benefit of consumers

and all producers. These generic activities complement branded

advertising initiatives, which are aimed at increasing the market share of individual competitors, and are of particular benefit

to small producers who lack the resources or market power

to advertise on their own. These generic activities do not impede

the branded advertising efforts of individual firms, but instead

increase general market demand for an agricultural commodity

using methods that individual companies do not have the incentive to employ.

(5) Generic promotion, research, and information activities

for agricultural commodities, paid by the producers and others

in the industry who reap the benefits of such activities, provide

a unique opportunity for producers to inform consumers about

a particular agricultural commodity.

(6) It is important to ensure that generic promotion,

research, and information activities for agricultural commodities be carried out in an effective and coordinated manner

designed to strengthen the position of the commodities in the

marketplace and to maintain and expand their markets and

uses. Independent evaluation of the effectiveness of the generic

promotion activities of these programs will assist the Secretary

of Agriculture and Congress in ensuring that these objectives

are met.

7 USC 7411.

7 USC 7401 note.

Commodity

Promotion,

Research, and

Information Act

of 1996.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1033

(7) The cooperative development, financing, and

implementation of a coordinated national program of research,

promotion, and information regarding agricultural commodities

are necessary to maintain and expand existing markets and

to develop new markets for these commodities.

(8) Agricultural commodities move in interstate and foreign

commerce, and agricultural commodities and their products

that do not move in such channels of commerce directly burden

or affect interstate commerce in agricultural commodities and

their products.

(9) Commodity promotion programs have the ability to

provide significant conservation benefits to producers and the

public.

(b) PURPOSE.—The purpose of this subtitle is to authorize the

establishment, through the exercise by the Secretary of Agriculture

of the authority provided in this subtitle, of an orderly program

for developing, financing, and carrying out an effective, continuous,

and coordinated program of generic promotion, research, and

information regarding agricultural commodities designed to—

(1) strengthen the position of agricultural commodity industries in the marketplace;

(2) maintain and expand existing domestic and foreign

markets and uses for agricultural commodities;

(3) develop new markets and uses for agricultural commodities; or

(4) assist producers in meeting their conservation objectives.

(c) RULE OF CONSTRUCTION.—Nothing in this subtitle provides

for the control of production or otherwise limits the right of any

person to produce, handle, or import an agricultural commodity.

SEC. 513. DEFINITIONS.

In this subtitle (unless the context otherwise requires):

(1) AGRICULTURAL COMMODITY.—The term ‘‘agricultural

commodity’’ means—

(A) agricultural, horticultural, viticultural, and dairy

products;

(B) livestock and the products of livestock;

(C) the products of poultry and bee raising;

(D) the products of forestry;

(E) other commodities raised or produced on farms,

as determined appropriate by the Secretary; and

(F) products processed or manufactured from products

specified in the preceding subparagraphs, as determined

appropriate by the Secretary.

(2) BOARD.—The term ‘‘board’’ means a board established

under an order issued under section 514.

(3) CONFLICT OF INTEREST.—The term ‘‘conflict of interest’’

means a situation in which a member or employee of a board

has a direct or indirect financial interest in a person that

performs a service for, or enters into a contract with, a board

for anything of economic value.

(4) DEPARTMENT.—The term ‘‘Department’’ means the

Department of Agriculture.

(5) FIRST HANDLER.—The term ‘‘first handler’’ means the

first person who buys or takes possession of an agricultural

commodity from a producer for marketing. If a producer mar7 USC 7412.
110 STAT. 1034 PUBLIC LAW 104–127—APR. 4, 1996

kets the agricultural commodity directly to consumers, the producer shall be considered to be the first handler with respect

to the agricultural commodity produced by the producer.

(6) IMPORTER.—The term ‘‘importer’’ means any person who

imports an agricultural commodity from outside the United

States for sale in the United States as a principal or as an

agent, broker, or consignee of any person.

(7) INFORMATION.—The term ‘‘information’’ means information and programs that are designed to increase—

(A) efficiency in processing; and

(B) the development of new markets, marketing strategies, increased marketing efficiency, and activities to

enhance the image of agricultural commodities on a

national or international basis.

(8) MARKET.—The term ‘‘market’’ means to sell or to otherwise dispose of an agricultural commodity in interstate, foreign,

or intrastate commerce.

(9) ORDER.—The term ‘‘order’’ means an order issued by

the Secretary under section 514 that provides for a program

of generic promotion, research, and information regarding agricultural commodities designed to—

(A) strengthen the position of agricultural commodity

industries in the marketplace;

(B) maintain and expand existing domestic and foreign

markets and uses for agricultural commodities;

(C) develop new markets and uses for agricultural

commodities; or

(D) assist producers in meeting their conservation

objectives.

(10) PERSON.—The term ‘‘person’’ means any individual,

group of individuals, partnership, corporation, association,

cooperative, or any other legal entity.

(11) PRODUCER.—The term ‘‘producer’’ means any person

who is engaged in the production and sale of an agricultural

commodity in the United States and who owns, or shares the

ownership and risk of loss of, the agricultural commodity.

(12) PROMOTION.—The term ‘‘promotion’’ means any action

taken by a board under an order, including paid advertising,

to present a favorable image of an agricultural commodity

to the public to improve the competitive position of the agricultural commodity in the marketplace and to stimulate sales

of the agricultural commodity.

(13) RESEARCH.—The term ‘‘research’’ means any type of

test, study, or analysis designed to advance the image, desirability, use, marketability, production, product development, or

quality of an agricultural commodity.

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

(15) STATE.—The term ‘‘State’’ means any of the States,

the District of Columbia, the Commonwealth of Puerto Rico,

or any territory or possession of the United States.

(16) SUSPEND.—The term ‘‘suspend’’ means to issue a rule

under section 553 of title 5, United States Code, to temporarily

prevent the operation of an order during a particular period

of time specified in the rule.

(17) TERMINATE.—The term ‘‘terminate’’ means to issue

a rule under section 553 of title 5, United States Code, to
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1035

cancel permanently the operation of an order beginning on

a date certain specified in the rule.

(18) UNITED STATES.—The term ‘‘United States’’ means

collectively the 50 States, the District of Columbia, the

Commonwealth of Puerto Rico and the territories and possessions of the United States.

SEC. 514. ISSUANCE OF ORDERS.

(a) ISSUANCE AUTHORIZED.—

(1) IN GENERAL.—To effectuate the purpose of this subtitle,

the Secretary may issue, and amend from time to time, orders

applicable to—

(A) the producers of an agricultural commodity;

(B) the first handlers of the agricultural commodity

and other persons in the marketing chain as appropriate;

and

(C) the importers of the agricultural commodity, if

imports of the agricultural commodity are subject to assessment under section 516(f).

(2) NATIONAL SCOPE.—Each order issued under this section

shall be national in scope.

(b) PROCEDURE FOR ISSUANCE.—

(1) DEVELOPMENT OR RECEIPT OF PROPOSED ORDER.—A proposed order with respect to an agricultural commodity may

be—

(A) prepared by the Secretary at any time; or

(B) submitted to the Secretary by—

(i) an association of producers of the agricultural

commodity; or

(ii) any other person that may be affected by the

issuance of an order with respect to the agricultural

commodity.

(2) CONSIDERATION OF PROPOSED ORDER.—If the Secretary

determines that a proposed order is consistent with and will

effectuate the purpose of this subtitle, the Secretary shall publish the proposed order in the Federal Register and give due

notice and opportunity for public comment on the proposed

order.

(3) EXISTENCE OF OTHER ORDERS.—In deciding whether

a proposal for an order is consistent with and will effectuate

the purpose of this subtitle, the Secretary may consider the

existence of other Federal promotion, research, and information

programs or orders issued or developed pursuant to any other

law.

(4) PREPARATION OF FINAL ORDER.—After notice and opportunity for public comment under paragraph (2) regarding a

proposed order, the Secretary shall take into consideration the

comments received in preparing a final order. The Secretary

shall ensure that the final order is in conformity with the

terms, conditions, and requirements of this subtitle.

(c) ISSUANCE AND EFFECTIVE DATE.—If the Secretary determines that the final order developed with respect to an agricultural

commodity is consistent with and will effectuate the purpose of

this subtitle, the Secretary shall issue the final order. Except in

the case of an order for which an initial referendum is conducted

under section 518(a), the final order shall be issued and become

Federal Register,

publication.

7 USC 7413.
110 STAT. 1036 PUBLIC LAW 104–127—APR. 4, 1996

effective not later than 270 days after the date of publication

of the proposed order that was the basis for the final order.

(d) AMENDMENTS.—From time to time the Secretary may amend

any order, consistent with the requirements of section 523.

SEC. 515. REQUIRED TERMS IN ORDERS.

(a) IN GENERAL.—Each order shall contain the terms and conditions specified in this section.

(b) BOARD.—

(1) ESTABLISHMENT.—Each order shall establish a board

to carry out a program of generic promotion, research, and

information regarding the agricultural commodity covered by

the order and intended to effectuate the purpose of this subtitle.

(2) BOARD MEMBERSHIP.—

(A) NUMBER OF MEMBERS.—Each board shall consist

of the number of members considered by the Secretary,

in consultation with the agricultural commodity industry

involved, to be appropriate to administer the order. In

addition to members, the Secretary may also provide for

alternates on the board.

(B) APPOINTMENT.—The Secretary shall appoint the

members and any alternates of a board from among producers of the agricultural commodity and first handlers and

others in the marketing chain as appropriate. If imports

of the agricultural commodity covered by an order are

subject to assessment under section 516(f), the Secretary

shall also appoint importers as members of the board and

as alternates if alternates are included on the board. The

Secretary may appoint 1 or more members of the general

public to each board.

(C) NOMINATIONS.—The Secretary may make appointments from nominations made pursuant to the method

set forth in the order.

(D) GEOGRAPHICAL REPRESENTATION.—To ensure fair

and equitable representation of the agricultural commodity

industry covered by an order, the composition of each board

shall reflect the geographical distribution of the production

of the agricultural commodity involved in the United States

and the quantity or value of the agricultural commodity

imported into the United States.

(3) REAPPORTIONMENT OF BOARD MEMBERSHIP.—In accordance with rules issued by the Secretary, at least once in each

5-year period, but not more frequently than once in each 3-

year period, each board shall—

(A) review the geographical distribution in the United

States of the production of the agricultural commodity covered by the order involved and the quantity or value of

the agricultural commodity imported into the United

States; and

(B) if warranted, recommend to the Secretary the

reapportionment of the board membership to reflect

changes in the geographical distribution of the production

of the agricultural commodity and the quantity or value

of the imported agricultural commodity.

(4) NOTICE.—

7 USC 7414.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1037

(A) VACANCIES.—Each order shall provide for notice

of board vacancies to the agricultural commodity industry

involved.

(B) MEETINGS.—Each board shall provide the Secretary

with prior notice of meetings of the board to permit the

Secretary, or a designated representative of the Secretary,

to attend the meetings.

(5) TERM OF OFFICE.—

(A) IN GENERAL.—The members and any alternates

of a board shall each serve for a term of 3 years, except

that the members and any alternates initially appointed

to a board shall serve for terms of not more than 2, 3,

and 4 years, as specified by the order.

(B) LIMITATION ON CONSECUTIVE TERMS.—A member

or alternate may serve not more than 2 consecutive terms.

(C) CONTINUATION OF TERM.—Notwithstanding

subparagraph (B), each member or alternate shall continue

to serve until a successor is appointed by the Secretary.

(D) VACANCIES.—A vacancy arising before the expiration of a term of office of an incumbent member or alternate

of a board shall be filled in a manner provided for in

the order.

(6) COMPENSATION.—

(A) IN GENERAL.—Members and any alternates of a

board shall serve without compensation.

(B) TRAVEL EXPENSES.—If approved by a board, members or alternates shall be reimbursed for reasonable travel

expenses, which may include a per diem allowance or actual

subsistence incurred while away from their homes or regular places of business in the performance of services for

the board.

(c) POWERS AND DUTIES OF A BOARD.—Each order shall specify

the powers and duties of the board established under the order,

which shall include the power and duty—

(1) to administer the order in accordance with its terms

and conditions and to collect assessments;

(2) to develop and recommend to the Secretary for approval

such bylaws as may be necessary for the functioning of the

board and such rules as may be necessary to administer the

order, including activities authorized to be carried out under

the order;

(3) to meet, organize, and select from among the members

of the board a chairperson, other officers, and committees and

subcommittees, as the board determines to be appropriate;

(4) to employ persons, other than the members, as the

board considers necessary to assist the board in carrying out

its duties, and to determine the compensation and specify the

duties of the persons;

(5) subject to subsection (e), to develop and carry out

generic promotion, research, and information activities relating

to the agricultural commodity covered by the order;

(6) to prepare and submit for the approval of the Secretary,

before the beginning of each fiscal year, rates of assessment

under section 517 and an annual budget of the anticipated

expenses to be incurred in the administration of the order,

including the probable cost of each promotion, research, and
110 STAT. 1038 PUBLIC LAW 104–127—APR. 4, 1996

information activity proposed to be developed or carried out

by the board;

(7) to borrow funds necessary for the startup expenses

of the order;

(8) subject to subsection (f), to enter into contracts or agreements to develop and carry out generic promotion, research,

and information activities relating to the agricultural commodity covered by the order;

(9) to pay the cost of the activities with assessments collected under section 517, earnings from invested assessments,

and other funds;

(10) to keep records that accurately reflect the actions

and transactions of the board, to keep and report minutes

of each meeting of the board to the Secretary, and to furnish

the Secretary with any information or records the Secretary

requests;

(11) to receive, investigate, and report to the Secretary

complaints of violations of the order; and

(12) to recommend to the Secretary such amendments to

the order as the board considers appropriate.

(d) PROHIBITED ACTIVITIES.—A board may not engage in, and

shall prohibit the employees and agents of the board from engaging

in—

(1) any action that would be a conflict of interest;

(2) using funds collected by the board under the order,

any action undertaken for the purpose of influencing any legislation or governmental action or policy other than recommending to the Secretary amendments to the order; and

(3) any advertising, including promotion, research, and

information activities authorized to be carried out under the

order, that may be false or misleading or disparaging to another

agricultural commodity.

(e) ACTIVITIES AND BUDGETS.—

(1) ACTIVITIES.—Each order shall require the board established under the order to submit to the Secretary for approval

plans and projects for promotion, research, or information relating to the agricultural commodity covered by the order.

(2) BUDGETS.—

(A) SUBMISSION TO SECRETARY.—Each order shall

require the board established under the order to submit

to the Secretary for approval a budget of its anticipated

annual expenses and disbursements to be paid to administer the order. The budget shall be submitted before the

beginning of a fiscal year and as frequently as may be

necessary after the beginning of the fiscal year.

(B) REIMBURSEMENT OF SECRETARY.—Each order shall

require that the Secretary be reimbursed for all expenses

incurred by the Secretary in the implementation, administration, and supervision of the order, including all referenda

costs incurred in connection with the order.

(3) INCURRING EXPENSES.—A board may incur the expenses

described in paragraph (2) and other expenses for the administration, maintenance, and functioning of the board as authorized by the Secretary.

(4) PAYMENT OF EXPENSES.—Expenses incurred under paragraph (3) shall be paid by a board using assessments collected

under section 517, earnings obtained from assessments, and

Records.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1039

other income of the board. Any funds borrowed by the board

shall be expended only for startup costs and capital outlays.

(5) LIMITATION ON SPENDING.—For fiscal years beginning

3 or more years after the date of the establishment of a board,

the board may not expend for administration (except for

reimbursements to the Secretary required under paragraph

(2)(B)), maintenance, and functioning of the board in a fiscal

year an amount that exceeds 15 percent of the assessment

and other income received by the board for the fiscal year.

(f) CONTRACTS AND AGREEMENTS.—

(1) IN GENERAL.—Each order shall provide that, with the

approval of the Secretary, the board established under the

order may—

(A) enter into contracts and agreements to carry out

generic promotion, research, and information activities

relating to the agricultural commodity covered by the order,

including contracts and agreements with producer associations or other entities as considered appropriate by the

Secretary; and

(B) pay the cost of approved generic promotion,

research, and information activities using assessments collected under section 517, earnings obtained from assessments, and other income of the board.

(2) REQUIREMENTS.—Each contract or agreement shall provide that any person who enters into the contract or agreement

with the board shall—

(A) develop and submit to the board a proposed activity

together with a budget that specifies the cost to be incurred

to carry out the activity;

(B) keep accurate records of all of its transactions

relating to the contract or agreement;

(C) account for funds received and expended in connection with the contract or agreement;

(D) make periodic reports to the board of activities

conducted under the contract or agreement; and

(E) make such other reports as the board or the Secretary considers relevant.

(g) RECORDS OF BOARD.—

(1) IN GENERAL.—Each order shall require the board established under the order—

(A) to maintain such records as the Secretary may

require and to make the records available to the Secretary

for inspection and audit;

(B) to collect and submit to the Secretary, at any

time the Secretary may specify, any information the Secretary may request; and

(C) to account for the receipt and disbursement of

all funds in the possession, or under the control, of the

board.

(2) AUDITS.—Each order shall require the board established

under the order to have—

(A) its records audited by an independent auditor at

the end of each fiscal year; and

(B) a report of the audit submitted directly to the

Secretary.

(h) PERIODIC EVALUATION.—In accordance with section 501(c),

each order shall require the board established under the order

Reports.

Records.
110 STAT. 1040 PUBLIC LAW 104–127—APR. 4, 1996

to provide for the independent evaluation of all generic promotion,

research, and information activities undertaken under the order.

(i) BOOKS AND RECORDS OF PERSONS COVERED BY ORDER.—

(1) IN GENERAL.—Each order shall require that producers,

first handlers and other persons in the marketing chain as

appropriate, and importers covered by the order shall—

(A) maintain records sufficient to ensure compliance

with the order and regulations;

(B) submit to the board established under the order

any information required by the board to carry out its

responsibilities under the order; and

(C) make the records described in subparagraph (A)

available, during normal business hours, for inspection by

employees or agents of the board or the Department, including any records necessary to verify information required

under subparagraph (B).

(2) TIME REQUIREMENT.—Any record required to be maintained under paragraph (1) shall be maintained for such time

period as the Secretary may prescribe.

(3) OTHER INFORMATION.—The Secretary may use, and may

authorize the board to use under this subtitle, information

regarding persons subject to an order that is collected by the

Department under any other law.

(4) CONFIDENTIALITY OF INFORMATION.—

(A) IN GENERAL.—Except as otherwise provided in this

subtitle, all information obtained under paragraph (1) or

as part of a referendum under section 518 shall be kept

confidential by all officers, employees, and agents of the

Department and of the board.

(B) DISCLOSURE.—Information referred to in subparagraph (A) may be disclosed only if—

(i) the Secretary considers the information relevant; and

(ii) the information is revealed in a judicial

proceeding or administrative hearing brought at the

direction or on the request of the Secretary or to which

the Secretary or any officer of the Department is a

party.

(C) OTHER EXCEPTIONS.—This paragraph shall not prohibit—

(i) the issuance of general statements based on

reports or on information relating to a number of persons subject to an order if the statements do not identify the information furnished by any person; or

(ii) the publication, by direction of the Secretary,

of the name of any person violating any order and

a statement of the particular provisions of the order

violated by the person.

(D) PENALTY.—Any person who willfully violates this

subsection shall be subject, on conviction, to a fine of not

more than $1,000 or to imprisonment for not more than

1 year, or both.

(5) WITHHOLDING INFORMATION.—This subsection shall not

authorize the withholding of information from Congress.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1041

SEC. 516. PERMISSIVE TERMS IN ORDERS.

(a) EXEMPTIONS.—An order issued under this subtitle may contain—

(1) authority for the Secretary to exempt from the order

any de minimis quantity of an agricultural commodity otherwise

covered by the order; and

(2) authority for the board established under the order

to require satisfactory safeguards against improper use of the

exemption.

(b) DIFFERENT PAYMENT AND REPORTING SCHEDULES.—An order

issued under this subtitle may contain authority for the board

established under the order to designate different payment and

reporting schedules to recognize differences in agricultural commodity industry marketing practices and procedures used in different

production and importing areas.

(c) ACTIVITIES.—An order issued under this subtitle may contain

authority to develop and carry out research, promotion, and

information activities designed to expand, improve, or make more

efficient the marketing or use of the agricultural commodity covered

by the order in domestic and foreign markets. Section 515(e) shall

apply with respect to activities authorized under this subsection.

(d) RESERVE FUNDS.—An order issued under this subtitle may

contain authority to reserve funds from assessments collected under

section 517 to permit an effective and continuous coordinated program of research, promotion, and information in years when the

yield from assessments may be reduced, except that the amount

of funds reserved may not exceed the greatest aggregate amount

of the anticipated disbursements specified in budgets approved

under section 515(e) by the Secretary for any 2 fiscal years.

(e) CREDITS.—

(1) GENERIC ACTIVITIES.—An order issued under this subtitle may contain authority to provide credits of assessments

for those individuals who contribute to other similar generic

research, promotion, and information programs at the State,

regional, or local level.

(2) BRANDED ACTIVITIES.—

(A) IN GENERAL.—The Secretary may permit a farmer

cooperative that engages in branded activities relating to

the marketing of the products of members of the cooperative

to receive an annual credit for the activities and related

expenditures in the form of a deduction of the total cost

of the activities and related expenditures from the amount

of any assessment that would otherwise be required to

be paid by the producer members of the cooperative under

an order issued under this subtitle.

(B) ELECTION BY COOPERATIVE.—A farmer cooperative

may elect to voluntarily waive the application of subparagraph (A) to the cooperative.

(f) ASSESSMENT OF IMPORTS.—An order issued under this subtitle may contain authority for the board established under the

order to assess under section 517 an imported agricultural commodity, or products of such an agricultural commodity, at a rate comparable to the rate determined by the appropriate board for the

domestic agricultural commodity covered by the order.

(g) OTHER AUTHORITY.—An order issued under this subtitle

may contain authority to take any other action that—

7 USC 7415.
110 STAT. 1042 PUBLIC LAW 104–127—APR. 4, 1996

(1) is not inconsistent with the purpose of this subtitle,

any term or condition specified in section 515, or any rule

issued to carry out this subtitle; and

(2) is necessary to administer the order.

SEC. 517. ASSESSMENTS.

(a) ASSESSMENTS AUTHORIZED.—While an order issued under

this subtitle is in effect with respect to an agricultural commodity,

assessments shall be—

(1) paid by first handlers with respect to the agricultural

commodity produced and marketed in the United States; and

(2) paid by importers with respect to the agricultural

commodity imported into the United States, if the imported

agricultural commodity is covered by the order pursuant to

section 516(f).

(b) COLLECTION.—Assessments required under an order shall

be remitted to the board established under the order at the time

and in the manner prescribed by the order.

(c) LIMITATION ON ASSESSMENTS.—Not more than 1 assessment

may be levied on a first handler or importer under subsection

(a) with respect to any agricultural commodity.

(d) ASSESSMENT RATES.—The board shall recommend to the

Secretary 1 or more rates of assessment to be levied under subsection (a). If approved by the Secretary, the rates shall take effect.

An order may provide that an assessment rate may not be increased

unless approved by a referendum conducted pursuant to section

518.

(e) LATE-PAYMENT AND INTEREST CHARGES.—

(1) IN GENERAL.—Late-payment and interest charges may

be levied on each person subject to an order who fails to

remit an assessment in accordance with subsection (b).

(2) RATE.—The rate for the charges shall be specified by

the Secretary.

(f) INVESTMENT OF ASSESSMENTS.—Pending disbursement of

assessments under a budget approved by the Secretary, a board

may invest assessments collected under this section in—

(1) obligations of the United States or any agency of the

United States;

(2) general obligations of any State or any political subdivision of a State;

(3) interest-bearing accounts or certificates of deposit of

financial institutions that are members of the Federal Reserve

System; or

(4) obligations fully guaranteed as to principal and interest

by the United States.

(g) REFUND OF ASSESSMENTS FROM ESCROW ACCOUNT.—

(1) ESCROW ACCOUNT.—During the period beginning on

the effective date of an order and ending on the date the

Secretary announces the results of a referendum that is conducted under section 518(b)(1) with respect to the order, the

board established under the order shall—

(A) establish and maintain an escrow account of the

kind described in subsection (f)(3) to be used to refund

assessments; and

(B) deposit funds in the account in accordance with

paragraph (2).

7 USC 7416.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1043

(2) AMOUNT TO BE DEPOSITED.—The board shall deposit

in the account an amount equal to 10 percent of the assessments collected during the period referred to in paragraph

(1).

(3) RIGHT TO RECEIVE REFUND.—Subject to paragraphs (4),

(5), and (6), persons subject to an order shall be eligible to

demand a refund of assessments collected during the period

referred to in paragraph (1) if—

(A) the assessments were remitted on behalf of the

person; and

(B) the order is not approved in the referendum.

(4) FORM OF DEMAND.—The demand for a refund shall

be made at such time and in such form as specified by the

order.

(5) PAYMENT OF REFUND.—A person entitled to a refund

shall be paid promptly after the board receives satisfactory

proof that the assessment for which the refund is demanded

was paid on behalf of the person who makes the demand.

(6) PRORATION.—If the funds in the escrow account required

by paragraph (1) are insufficient to pay the amount of all

refunds that persons subject to an order otherwise would have

a right to receive under this subsection, the board shall prorate

the amount of the funds among all the persons.

(7) CLOSING OF ESCROW ACCOUNT.—If the order is approved

in a referendum conducted under section 518(b)(1)—

(A) the escrow account shall be closed; and

(B) the funds shall be available to the board for

disbursement as authorized in the order.

SEC. 518. REFERENDA.

(a) INITIAL REFERENDUM.—

(1) OPTIONAL REFERENDUM.—For the purpose of

ascertaining whether the persons to be covered by an order

favor the order going into effect, the order may provide for

the Secretary to conduct an initial referendum among persons

to be subject to an assessment under section 517 who, during

a representative period determined by the Secretary, engaged

in—

(A) the production or handling of the agricultural

commodity covered by the order; or

(B) the importation of the agricultural commodity.

(2) PROCEDURE.—The results of the referendum shall be

determined in accordance with subsection (e). The Secretary

may require that the agricultural commodity industry involved

post a bond or other collateral to cover the cost of the referendum.

(b) REQUIRED REFERENDA.—

(1) IN GENERAL.—For the purpose of ascertaining whether

the persons covered by an order favor the continuation, suspension, or termination of the order, the Secretary shall conduct

a referendum among persons subject to assessments under

section 517 who, during a representative period determined

by the Secretary, have engaged in—

(A) the production or handling of the agricultural

commodity covered by the order; or

(B) the importation of the agricultural commodity.

7 USC 7417.
110 STAT. 1044 PUBLIC LAW 104–127—APR. 4, 1996

(2) TIME FOR REFERENDUM.—The referendum shall be conducted not later than 3 years after assessments first begin

under the order.

(3) EXCEPTION.—This subsection shall not apply if an initial

referendum was conducted under subsection (a).

(c) SUBSEQUENT REFERENDA.—The Secretary shall conduct a

subsequent referendum—

(1) not later than 7 years after assessments first begin

under the order;

(2) at the request of the board established under the order;

or

(3) at the request of 10 percent or more of the number

of persons eligible to vote under subsection (b)(1);

to determine if the persons favor the continuation, suspension,

or termination of the order.

(d) OTHER REFERENDA.—The Secretary may conduct a referendum at any time to determine whether the continuation, suspension,

or termination of the order or a provision of the order is favored

by persons eligible to vote under subsection (b)(1).

(e) APPROVAL OF ORDER.—An order may provide for its approval

in a referendum—

(1) by a majority of those persons voting;

(2) by persons voting for approval who represent a majority

of the volume of the agricultural commodity; or

(3) by a majority of those persons voting for approval

who also represent a majority of the volume of the agricultural

commodity.

(f) COSTS OF REFERENDA.—The board established under an

order with respect to which a referendum is conducted under this

section shall reimburse the Secretary for any expenses incurred

by the Secretary to conduct the referendum.

(g) MANNER OF CONDUCTING REFERENDA.—

(1) IN GENERAL.—A referendum conducted under this section shall be conducted in the manner determined by the Secretary to be appropriate.

(2) ADVANCE REGISTRATION.—If the Secretary determines

that an advance registration of eligible voters in a referendum

is necessary before the voting period in order to facilitate the

conduct of the referendum, the Secretary may institute the

advance registration procedures by mail, or in person through

the use of national and local offices of the Department.

(3) VOTING.—Eligible voters may vote by mail ballot in

the referendum or in person if so prescribed by the Secretary.

(4) NOTICE.—Not later than 30 days before a referendum

is conducted under this section with respect to an order, the

Secretary shall notify the agricultural commodity industry

involved, in such manner as determined by the Secretary, of

the period during which voting in the referendum will occur.

The notice shall explain any registration and voting procedures

established under this subsection.

SEC. 519. PETITION AND REVIEW OF ORDERS.

(a) PETITION.—

(1) IN GENERAL.—A person subject to an order issued under

this subtitle may file with the Secretary a petition—

7 USC 7418.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1045

(A) stating that the order, any provision of the order,

or any obligation imposed in connection with the order,

is not established in accordance with law; and

(B) requesting a modification of the order or an exemption from the order.

(2) HEARING.—The Secretary shall give the petitioner an

opportunity for a hearing on the petition, in accordance with

regulations issued by the Secretary.

(3) RULING.—After the hearing, the Secretary shall make

a ruling on the petition. The ruling shall be final, subject

to review as set forth in subsection (b).

(4) LIMITATION ON PETITION.—Any petition filed under this

subsection challenging an order, any provision of the order,

or any obligation imposed in connection with the order, shall

be filed within 2 years after the effective date of the order,

provision, or obligation subject to challenge in the petition.

(b) REVIEW.—

(1) COMMENCEMENT OF ACTION.—The district court of the

United States for any district in which a person who is a

petitioner under subsection (a) resides or carries on business

shall have jurisdiction to review the final ruling on the petition

of the person, if a complaint for that purpose is filed not

later than 20 days after the date of the entry of the final

ruling by the Secretary under subsection (a)(3).

(2) PROCESS.—Service of process in a proceeding may be

made on the Secretary by delivering a copy of the complaint

to the Secretary.

(3) REMANDS.—If the court determines that the ruling is

not in accordance with law, the court shall remand the matter

to the Secretary with directions—

(A) to make such ruling as the court determines to

be in accordance with law; or

(B) to take such further action as, in the opinion of

the court, the law requires.

(c) EFFECT ON ENFORCEMENT PROCEEDINGS.—The pendency of

a petition filed under subsection (a) or an action commenced under

subsection (b) shall not operate as a stay of any action authorized

by section 520 to be taken to enforce this subtitle, including any

rule, order, or penalty in effect under this subtitle.

SEC. 520. ENFORCEMENT.

(a) JURISDICTION.—The district courts of the United States

shall have jurisdiction specifically to enforce, and to prevent and

restrain a person from violating, an order or regulation issued

under this subtitle.

(b) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized

to be brought under this section shall be referred to the Attorney

General for appropriate action, except that the Secretary shall

not be required to refer to the Attorney General a violation of

this subtitle if the Secretary believes that the administration and

enforcement of this subtitle would be adequately served by providing

a suitable written notice or warning to the person who committed

the violation or by an administrative action under this section.

(c) CIVIL PENALTIES AND ORDERS.—

(1) CIVIL PENALTIES.—A person who willfully violates an

order or regulation issued by the Secretary under this Act

Courts.

7 USC 7419.

Courts.
110 STAT. 1046 PUBLIC LAW 104–127—APR. 4, 1996

may be assessed by the Secretary a civil penalty of not less

than $1,000 and not more than $10,000 for each violation.

(2) SEPARATE OFFENSE.—Each violation and each day during which there is a failure to comply with an order or regulation issued by the Secretary shall be considered to be a separate

offense.

(3) CEASE-AND-DESIST ORDERS.—In addition to, or in lieu

of, a civil penalty, the Secretary may issue an order requiring

a person to cease and desist from violating the order or regulation.

(4) NOTICE AND HEARING.—No order assessing a penalty

or cease-and-desist order may be issued by the Secretary under

this subsection unless the Secretary provides notice and an

opportunity for a hearing on the record with respect to the

violation.

(5) FINALITY.—An order assessing a penalty or a ceaseand-desist order issued under this subsection by the Secretary

shall be final and conclusive unless the person against whom

the order is issued files an appeal from the order with the

United States court of appeals, as provided in subsection (d).

(d) REVIEW BY COURT OF APPEALS.—

(1) IN GENERAL.—A person against whom an order is issued

under subsection (c) may obtain review of the order by—

(A) filing, not later than 30 days after the person

receives notice of the order, a notice of appeal in—

(i) the United States court of appeals for the circuit

in which the person resides or carries on business;

or

(ii) the United States Court of Appeals for the

District of Columbia Circuit; and

(B) simultaneously sending a copy of the notice of

appeal by certified mail to the Secretary.

(2) RECORD.—The Secretary shall file with the court a

certified copy of the record on which the Secretary has determined that the person has committed a violation.

(3) STANDARD OF REVIEW.—A finding of the Secretary under

this section shall be set aside only if the finding is found

to be unsupported by substantial evidence on the record.

(e) FAILURE TO OBEY CEASE-AND-DESIST ORDERS.—A person

who fails to obey a valid cease-and-desist order issued by the

Secretary under this section, after an opportunity for a hearing,

shall be subject to a civil penalty assessed by the Secretary of

not less than $1,000 and not more than $10,000 for each offense.

Each day during which the failure continues shall be considered

to be a separate violation of the cease-and-desist order.

(f) FAILURE TO PAY PENALTIES.—If a person fails to pay a

civil penalty imposed under this section by the Secretary, the Secretary shall refer the matter to the Attorney General for recovery

of the amount assessed in the district court of the United States

for any district in which the person resides or carries on business.

In the action, the validity and appropriateness of the order imposing

the civil penalty shall not be subject to review.

(g) ADDITIONAL REMEDIES.—The remedies provided in this section shall be in addition to, and not exclusive of, other remedies

that may be available.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1047

SEC. 521. INVESTIGATIONS AND POWER TO SUBPOENA.

(a) INVESTIGATIONS.—The Secretary may make such investigations as the Secretary considers necessary—

(1) for the effective administration of this subtitle; or

(2) to determine whether any person subject to this subtitle

has engaged, or is about to engage, in any action that constitutes or will constitute a violation of this subtitle or any

order or regulation issued under this subtitle.

(b) SUBPOENAS, OATHS, AND AFFIRMATIONS.—For the purpose

of any investigation under subsection (a), the Secretary may administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence, and require the production of

any records or documents that are relevant to the inquiry. The

attendance of witnesses and the production of records or documents

may be required from any place in the United States.

(c) AID OF COURTS.—In the case of contumacy by, or refusal

to obey a subpoena issued to, any person, the Secretary may invoke

the aid of any court of the United States within the jurisdiction

of which the investigation or proceeding is carried on, or where

the person resides or carries on business, in order to require the

attendance and testimony of the person or the production of records

or documents. The court may issue an order requiring the person

to appear before the Secretary to produce records or documents

or to give testimony regarding the matter under investigation.

(d) CONTEMPT.—Any failure to obey the order of the court

may be punished by the court as a contempt of the court.

(e) PROCESS.—Process in any case under this section may be

served in the judicial district in which the person resides or carries

on business or wherever the person may be found.

SEC. 522. SUSPENSION OR TERMINATION.

(a) MANDATORY SUSPENSION OR TERMINATION.—The Secretary

shall suspend or terminate an order or a provision of an order

if the Secretary finds that an order or a provision of an order

obstructs or does not tend to effectuate the purpose of this subtitle,

or if the Secretary determines that the order or a provision of

an order is not favored by persons voting in a referendum conducted

under section 518.

(b) IMPLEMENTATION OF SUSPENSION OR TERMINATION.—If, as

a result of a referendum conducted under section 518, the Secretary

determines that an order is not approved, the Secretary shall—

(1) not later than 180 days after making the determination,

suspend or terminate, as the case may be, collection of assessments under the order; and

(2) as soon as practicable, suspend or terminate, as the

case may be, activities under the order in an orderly manner.

SEC. 523. AMENDMENTS TO ORDERS.

The provisions of this subtitle applicable to an order shall

be applicable to any amendment to an order, except that section

518 shall not apply to an amendment.

SEC. 524. EFFECT ON OTHER LAWS.

This subtitle shall not affect or preempt any other Federal

or State law authorizing promotion or research relating to an agricultural commodity.

7 USC 7423.

7 USC 7422.

7 USC 7421.

7 USC 7420.
110 STAT. 1048 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 525. REGULATIONS.

The Secretary may issue such regulations as may be necessary

to carry out this subtitle and the power vested in the Secretary

under this subtitle.

SEC. 526. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—There are authorized to be appropriated such

sums as may be necessary to carry out this subtitle.

(b) LIMITATION ON EXPENDITURES FOR ADMINISTRATIVE

EXPENSES.—Funds appropriated to carry out this subtitle may not

be expended for the payment of expenses incurred by a board

to administer an order.

Subtitle C—Canola and Rapeseed

SEC. 531. SHORT TITLE.

This subtitle may be cited as the ‘‘Canola and Rapeseed

Research, Promotion, and Consumer Information Act’’.

SEC. 532. FINDINGS AND DECLARATION OF POLICY.

(a) FINDINGS.—Congress finds that—

(1) canola and rapeseed products are an important and

nutritious part of the human diet;

(2) the production of canola and rapeseed products plays

a significant role in the economy of the United States in that—

(A) canola and rapeseed products are produced by thousands of canola and rapeseed producers and processed by

numerous processing entities; and

(B) canola and rapeseed products produced in the

United States are consumed by people throughout the

United States and foreign countries;

(3) canola, rapeseed, and canola and rapeseed products

should be readily available and marketed efficiently to ensure

that consumers have an adequate supply of canola and rapeseed

products at a reasonable price;

(4) the maintenance and expansion of existing markets

and development of new markets for canola, rapeseed, and

canola and rapeseed products are vital to the welfare of canola

and rapeseed producers and processors and those persons concerned with marketing canola, rapeseed, and canola and

rapeseed products, as well as to the general economy of the

United States, and are necessary to ensure the ready availability and efficient marketing of canola, rapeseed, and canola

and rapeseed products;

(5) there exist established State and national organizations

conducting canola and rapeseed research, promotion, and

consumer education programs that are valuable to the efforts

of promoting the consumption of canola, rapeseed, and canola

and rapeseed products;

(6) the cooperative development, financing, and

implementation of a coordinated national program of canola

and rapeseed research, promotion, consumer information, and

industry information is necessary to maintain and expand existing markets and develop new markets for canola, rapeseed,

and canola and rapeseed products; and

(7) canola, rapeseed, and canola and rapeseed products

move in interstate and foreign commerce, and canola, rapeseed,

7 USC 7441.

7 USC 7401 note.

Canola and

Rapeseed

Research,

Promotion, and

Consumer

Information Act.

7 USC 7425.

7 USC 7424.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1049

and canola and rapeseed products that do not move in interstate

or foreign commerce directly burden or affect interstate commerce in canola, rapeseed, and canola and rapeseed products.

(b) POLICY.—It is the policy of this subtitle to establish an

orderly procedure for developing, financing through assessments

on domestically produced canola and rapeseed, and implementing

a program of research, promotion, consumer information, and industry information designed to strengthen the position in the marketplace of the canola and rapeseed industry, to maintain and expand

existing domestic and foreign markets and uses for canola, rapeseed,

and canola and rapeseed products, and to develop new markets

and uses for canola, rapeseed, and canola and rapeseed products.

(c) CONSTRUCTION.—Nothing in this subtitle provides for the

control of production or otherwise limits the right of individual

producers to produce canola, rapeseed, or canola or rapeseed products.

SEC. 533. DEFINITIONS.

In this subtitle (unless the context otherwise requires):

(1) BOARD.—The term ‘‘Board’’ means the National Canola

and Rapeseed Board established under section 535(b).

(2) CANOLA; RAPESEED.—The terms ‘‘canola’’ and ‘‘rapeseed’’

mean any brassica plant grown in the United States for the

production of an oilseed, the oil of which is used for a food

or nonfood use.

(3) CANOLA OR RAPESEED PRODUCT.—The term ‘‘canola or

rapeseed product’’ means a product produced, in whole or in

part, from canola or rapeseed.

(4) COMMERCE.—The term ‘‘commerce’’ includes interstate,

foreign, and intrastate commerce.

(5) CONFLICT OF INTEREST.—The term ‘‘conflict of interest’’

means a situation in which a member of the Board has a

direct or indirect financial interest in a corporation, partnership, sole proprietorship, joint venture, or other business entity

dealing directly or indirectly with the Board.

(6) CONSUMER INFORMATION.—The term ‘‘consumer

information’’ means information that will assist consumers and

other persons in making evaluations and decisions regarding

the purchase, preparation, and use of canola, rapeseed, or

canola or rapeseed products.

(7) DEPARTMENT.—The term ‘‘Department’’ means the

Department of Agriculture.

(8) FIRST PURCHASER.—The term ‘‘first purchaser’’ means—

(A) except as provided in subparagraph (B), a person

who buys or otherwise acquires canola, rapeseed, or canola

or rapeseed products produced by a producer; or

(B) the Commodity Credit Corporation, in a case in

which canola or rapeseed is forfeited to the Commodity

Credit Corporation as collateral for a loan issued under

a price support loan program administered by the Commodity Credit Corporation.

(9) INDUSTRY INFORMATION.—The term ‘‘industry information’’ means information or a program that will lead to the

development of new markets, new marketing strategies, or

increased efficiency for the canola and rapeseed industry, or

an activity to enhance the image of the canola or rapeseed

industry.

7 USC 7442.
110 STAT. 1050 PUBLIC LAW 104–127—APR. 4, 1996

(10) INDUSTRY MEMBER.—The term ‘‘industry member’’

means a member of the canola and rapeseed industry who

represents—

(A) manufacturers of canola or rapeseed products; or

(B) persons who commercially buy or sell canola or

rapeseed.

(11) MARKETING.—The term ‘‘marketing’’ means the sale

or other disposition of canola, rapeseed, or canola or rapeseed

products in a channel of commerce.

(12) ORDER.—The term ‘‘order’’ means an order issued

under section 534.

(13) PERSON.—The term ‘‘person’’ means an individual,

partnership, corporation, association, cooperative, or any other

legal entity.

(14) PRODUCER.—The term ‘‘producer’’ means a person

engaged in the growing of canola or rapeseed in the United

States who owns, or who shares the ownership and risk of

loss of, the canola or rapeseed.

(15) PROMOTION.—The term ‘‘promotion’’ means an action,

including paid advertising, technical assistance, or a trade servicing activity, to enhance the image or desirability of canola,

rapeseed, or canola or rapeseed products in domestic and foreign markets, or an activity designed to communicate to

consumers, processors, wholesalers, retailers, government officials, or other persons information relating to the positive

attributes of canola, rapeseed, or canola or rapeseed products

or the benefits of use or distribution of canola, rapeseed, or

canola or rapeseed products.

(16) RESEARCH.—The term ‘‘research’’ means any type of

test, study, or analysis to advance the image, desirability,

marketability, production, product development, quality, or

functional or nutritional value of canola, rapeseed, or canola

or rapeseed products, including research activity designed to

identify and analyze barriers to export sales of canola or

rapeseed produced in the United States.

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

(18) STATE.—The term ‘‘State’’ means any of the 50 States,

the District of Columbia and the Commonwealth of Puerto

Rico.

(19) UNITED STATES.—The term ‘‘United States’’ means

collectively the 50 States, the District of Columbia, and the

Commonwealth of Puerto Rico.

SEC. 534. ISSUANCE AND AMENDMENT OF ORDERS.

(a) IN GENERAL.—Subject to subsection (b), the Secretary shall

issue 1 or more orders under this subtitle applicable to producers

and first purchasers of canola, rapeseed, or canola or rapeseed

products. The order shall be national in scope. Not more than

1 order shall be in effect under this subtitle at any 1 time.

(b) PROCEDURE.—

(1) PROPOSAL OR REQUEST FOR ISSUANCE.—The Secretary

may propose the issuance of an order under this subtitle, or

an association of canola and rapeseed producers or any other

person that would be affected by an order issued pursuant

to this subtitle may request the issuance of, and submit a

proposal for, an order.

7 USC 7443.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1051

(2) NOTICE AND COMMENT CONCERNING PROPOSED ORDER.—

Not later than 60 days after the receipt of a request and

proposal for an order pursuant to paragraph (1), or whenever

the Secretary determines to propose an order, the Secretary

shall publish a proposed order and give due notice and opportunity for public comment on the proposed order.

(3) ISSUANCE OF ORDER.—After notice and opportunity for

public comment are given as provided in paragraph (2), the

Secretary shall issue an order, taking into consideration the

comments received and including in the order provisions necessary to ensure that the order is in conformity with the

requirements of this subtitle. The order shall be issued and

become effective not later than 180 days following publication

of the proposed order.

(c) AMENDMENTS.—The Secretary may amend an order issued

under this section.

SEC. 535. REQUIRED TERMS IN ORDERS.

(a) IN GENERAL.—An order issued under this subtitle shall

contain the terms and conditions specified in this section.

(b) ESTABLISHMENT AND MEMBERSHIP OF THE NATIONAL CANOLA

AND RAPESEED BOARD.—

(1) IN GENERAL.—The order shall provide for the establishment of, and appointment of members to, a National Canola

and Rapeseed Board to administer the order.

(2) SERVICE TO ENTIRE INDUSTRY.—The Board shall carry

out programs and projects that will provide maximum benefit

to the canola and rapeseed industry in all parts of the United

States and only promote canola, rapeseed, or canola or rapeseed

products.

(3) BOARD MEMBERSHIP.—The Board shall consist of 15

members, including—

(A) 11 members who are producers, including—

(i) 1 member from each of the 6 geographic regions

comprised of States where canola or rapeseed is produced, as determined by the Secretary; and

(ii) 5 members from the geographic regions

referred to in clause (i), allocated according to the

production in each region; and

(B) 4 members who are industry members, including

at least—

(i) 1 member who represents manufacturers of

canola or rapeseed end products; and

(ii) 1 member who represents persons who commercially buy or sell canola or rapeseed.

(4) LIMITATION ON STATE RESIDENCE.—There shall be no

more than 4 producer members of the Board from any 1 State.

(5) MODIFYING BOARD MEMBERSHIP.—In accordance with

regulations approved by the Secretary, at least once each 3

years and not more than once each 2 years, the Board shall

review the geographic distribution of canola and rapeseed

production throughout the United States and, if warranted,

recommend to the Secretary that the Secretary—

(A) reapportion regions in order to reflect the

geographic distribution of canola and rapeseed production;

and

7 USC 7444.

Effective date.

Publication.
110 STAT. 1052 PUBLIC LAW 104–127—APR. 4, 1996

(B) reapportion the seats on the Board to reflect the

production in each region.

(6) CERTIFICATION OF ORGANIZATIONS.— (A) IN GENERAL.—For the purposes of section 536, the

eligibility of any State organization to represent producers

shall be certified by the Secretary.

(B) CRITERIA.—The Secretary shall certify any State

organization that the Secretary determines has a history

of stability and permanency and meets at least 1 of the

following criteria:

(i) MAJORITY REPRESENTATION.—The total paid

membership of the organization—

(I) is comprised of at least a majority of canola

or rapeseed producers; or

(II) represents at least a majority of the canola

or rapeseed producers in the State.

(ii) SUBSTANTIAL NUMBER OF PRODUCERS REPRESENTED.—The organization represents a substantial

number of producers that produce a substantial quantity of canola or rapeseed in the State.

(iii) PURPOSE.—The organization is a general farm

or agricultural organization that has as a stated objective the promotion and development of the United

States canola or rapeseed industry and the economic

welfare of United States canola or rapeseed producers.

(C) REPORT.—The Secretary shall make a certification

under this paragraph on the basis of a factual report

submitted by the State organization.

(7) TERMS OF OFFICE.—

(A) IN GENERAL.—A member of the Board shall serve

for a term of 3 years, except that the members appointed

to the initial Board shall serve, proportionately, for terms

of 1, 2, and 3 years, as determined by the Secretary.

(B) LIMITATION ON TERMS.—No individual may serve

more than 2 consecutive 3-year terms as a member.

(C) TERMINATION OF TERMS.—Notwithstanding

subparagraph (B), each member shall continue to serve

until a successor is appointed by the Secretary.

(8) COMPENSATION.—A member of the Board shall serve

without compensation, but shall be reimbursed for necessary

and reasonable expenses incurred in the performance of duties

for and approved by the Board.

(c) POWERS AND DUTIES OF THE BOARD.—The order shall define

the powers and duties of the Board, which shall include the power

and duty—

(1) to administer the order in accordance with the terms

and conditions of the order;

(2) to issue regulations to effectuate the terms and conditions of the order;

(3) to meet, organize, and select from among members

of the Board a chairperson, other officers, and committees and

subcommittees, as the Board determines appropriate;

(4) to establish working committees of persons other than

Board members;

(5) to employ such persons, other than Board members,

as the Board considers necessary, and to determine the compensation and define the duties of the persons;
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1053

(6) to prepare and submit for the approval of the Secretary,

when appropriate or necessary, a recommended rate of assessment under section 536, and a fiscal period budget of the

anticipated expenses in the administration of the order, including the probable costs of all programs and projects;

(7) to develop programs and projects, subject to subsection

(d);

(8) to enter into contracts or agreements, subject to subsection (e), to develop and carry out programs or projects of

research, promotion, industry information, and consumer

information;

(9) to carry out research, promotion, industry information,

and consumer information projects, and to pay the costs of

the projects with assessments collected under section 536;

(10) to keep minutes, books, and records that reflect the

actions and transactions of the Board, and promptly report

minutes of each Board meeting to the Secretary;

(11) to appoint and convene, from time to time, working

committees comprised of producers, industry members, and

the public to assist in the development of research, promotion,

industry information, and consumer information programs for

canola, rapeseed, and canola and rapeseed products;

(12) to invest, pending disbursement under a program or

project, funds collected through assessments authorized under

section 536, or funds earned from investments, only in—

(A) obligations of the United States or an agency of

the United States;

(B) general obligations of a State or a political subdivision of a State;

(C) an interest-bearing account or certificate of deposit

of a bank that is a member of the Federal Reserve System;

or

(D) obligations fully guaranteed as to principal and

interest by the United States;

(13) to receive, investigate, and report to the Secretary

complaints of violations of the order;

(14) to furnish the Secretary with such information as

the Secretary may request;

(15) to recommend to the Secretary amendments to the

order;

(16) to develop and recommend to the Secretary for

approval such regulations as may be necessary for the development and execution of programs or projects, or as may otherwise

be necessary, to carry out the order; and

(17) to provide the Secretary with advance notice of meetings.

(d) PROGRAMS AND BUDGETS.—

(1) SUBMISSION TO SECRETARY.—The order shall provide

that the Board shall submit to the Secretary for approval

any program or project of research, promotion, consumer

information, or industry information. No program or project

shall be implemented prior to approval by the Secretary.

(2) BUDGETS.—The order shall require the Board, prior

to the beginning of each fiscal year, or as may be necessary

after the beginning of a fiscal year, to submit to the Secretary

for approval budgets of anticipated expenses and disbursements

in the implementation of the order, including projected costs
110 STAT. 1054 PUBLIC LAW 104–127—APR. 4, 1996

of research, promotion, consumer information, and industry

information programs and projects.

(3) INCURRING EXPENSES.—The Board may incur such

expenses for programs or projects of research, promotion,

consumer information, or industry information, and other

expenses for the administration, maintenance, and functioning

of the Board as may be authorized by the Secretary, including

any implementation, administrative, and referendum costs

incurred by the Department.

(4) PAYING EXPENSES.—The funds to cover the expenses

referred to in paragraph (3) shall be paid by the Board from

assessments collected under section 536 or funds borrowed

pursuant to paragraph (5).

(5) AUTHORITY TO BORROW.—To meet the expenses referred

to in paragraph (3), the Board shall have the authority to

borrow funds, as approved by the Secretary, for capital outlays

and startup costs.

(e) CONTRACTS AND AGREEMENTS.—

(1) IN GENERAL.—To ensure efficient use of funds, the order

shall provide that the Board may enter into a contract or

agreement for the implementation and carrying out of a program or project of canola, rapeseed, or canola or rapeseed

products research, promotion, consumer information, or industry information, including a contract with a producer organization, and for the payment of the costs with funds received

by the Board under the order.

(2) REQUIREMENTS.—A contract or agreement under paragraph (1) shall provide that—

(A) the contracting party shall develop and submit

to the Board a program or project together with a budget

that shall show the estimated costs to be incurred for

the program or project;

(B) the program or project shall become effective on

the approval of the Secretary; and

(C) the contracting party shall keep accurate records

of all transactions, account for funds received and

expended, make periodic reports to the Board of activities

conducted, and make such other reports as the Board or

the Secretary may require.

(3) PRODUCER ORGANIZATIONS.—The order shall provide

that the Board may contract with a producer organization

for any services required in addition to the services described

in paragraph (1). The contract shall include provisions comparable to the provisions required by paragraph (2).

(f) BOOKS AND RECORDS OF THE BOARD.—

(1) IN GENERAL.—The order shall require the Board to—

(A) maintain such books and records (which shall be

available to the Secretary for inspection and audit) as

the Secretary may prescribe;

(B) prepare and submit to the Secretary, from time

to time, such reports as the Secretary may prescribe; and

(C) account for the receipt and disbursement of all

funds entrusted to the Board.

(2) AUDITS.—The Board shall cause the books and records

of the Board to be audited by an independent auditor at the

end of each fiscal year, and a report of the audit to be submitted

to the Secretary.

Reports.

Reports.

Records.

Reports.

Effective date.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1055

(g) PROHIBITION.— (1) IN GENERAL.—Subject to paragraph (2), the Board shall

not engage in any action to, nor shall any funds received

by the Board under this subtitle be used to—

(A) influence legislation or governmental action;

(B) engage in an action that would be a conflict of

interest;

(C) engage in advertising that is false or misleading;

or

(D) engage in promotion that would disparage other

commodities.

(2) ACTION PERMITTED.—Paragraph (1) does not preclude—

(A) the development and recommendation of amendments to the order;

(B) the communication to appropriate government officials of information relating to the conduct, implementation, or results of promotion, research, consumer information, or industry information activities under the order;

or

(C) any action designed to market canola or rapeseed

products directly to a foreign government or political subdivision of a foreign government.

(h) BOOKS AND RECORDS.—

(1) IN GENERAL.—The order shall require that each producer, first purchaser, or industry member shall—

(A) maintain and submit to the Board any reports

considered necessary by the Secretary to ensure compliance

with this subtitle; and

(B) make available during normal business hours, for

inspection by employees of the Board or Secretary, such

books and records as are necessary to carry out this subtitle, including such records as are necessary to verify

any required reports.

(2) CONFIDENTIALITY.—

(A) IN GENERAL.—Except as otherwise provided in this

subtitle, all information obtained from books, records, or

reports required to be maintained under paragraph (1)

shall be kept confidential, and shall not be disclosed to

the public by any person.

(B) DISCLOSURE.—Information referred to in subparagraph (A) may be disclosed to the public if—

(i) the Secretary considers the information relevant;

(ii) the information is revealed in a suit or administrative hearing brought at the direction or on the

request of the Secretary or to which the Secretary

or any officer of the Department is a party; and

(iii) the information relates to this subtitle.

(C) MISCONDUCT.—A knowing disclosure of confidential

information in violation of subparagraph (A) by an officer

or employee of the Board or Department, except as required

by other law or allowed under subparagraph (B) or (D),

shall be considered a violation of this subtitle.

(D) GENERAL STATEMENTS.—Nothing in this paragraph

prohibits—

(i) the issuance of general statements based on

the reports of a number of persons subject to an order
110 STAT. 1056 PUBLIC LAW 104–127—APR. 4, 1996

or statistical data collected from the reports, if the

statements do not identify the information furnished

by any person; or

(ii) the publication, by direction of the Secretary,

of the name of a person violating the order, together

with a statement of the particular provisions of the

order violated by the person.

(3) AVAILABILITY OF INFORMATION FOR LAW ENFORCEMENT.—Information obtained under this subtitle may be made

available to another agency of the Federal Government for

a civil or criminal law enforcement activity if the activity is

authorized by law and if the head of the agency has made

a written request to the Secretary specifying the particular

information desired and the law enforcement activity for which

the information is sought.

(4) PENALTY.—Any person knowingly violating this subsection, on conviction, shall be subject to a fine of not more

than $1,000 or to imprisonment for not more than 1 year,

or both, and if an officer or employee of the Board or the

Department, shall be removed from office or terminated from

employment, as applicable.

(5) WITHHOLDING OF INFORMATION.—Nothing in this subtitle authorizes the withholding of information from Congress.

(i) USE OF ASSESSMENTS.—The order shall provide that the

assessments collected under section 536 shall be used for payment

of the expenses in implementing and administering this subtitle,

with provision for a reasonable reserve, and to cover administrative

costs incurred by the Secretary in implementing and administering

this subtitle.

(j) OTHER TERMS AND CONDITIONS.—The order shall contain

such other terms and conditions, not inconsistent with this subtitle,

as are determined necessary by the Secretary to effectuate this

subtitle.

SEC. 536. ASSESSMENTS.

(a) IN GENERAL.—

(1) FIRST PURCHASERS.—During the effective period of an

order issued pursuant to this subtitle, assessments shall be—

(A) levied on all canola or rapeseed produced in the

United States and marketed; and

(B) deducted from the payment made to a producer

for all canola or rapeseed sold to a first purchaser.

(2) DIRECT PROCESSING.—The order shall provide that any

person processing canola or rapeseed of that person’s own

production and marketing the canola or rapeseed, or canola

or rapeseed products, shall remit to the Board or a State

organization certified to represent producers under section

535(b)(6), in the manner prescribed by the order, an assessment

established at a rate equivalent to the rate provided for under

subsection (d).

(b) LIMITATION ON ASSESSMENTS.—No more than 1 assessment

may be assessed under subsection (a) on any canola or rapeseed

produced (as remitted by a first purchaser).

(c) REMITTING OF ASSESSMENTS.—

(1) IN GENERAL.—Assessments required under subsection

(a) shall be remitted to the Board by a first purchaser. The

Board shall use State organizations certified to represent

7 USC 7445.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1057

producers under section 535(b)(6) to collect the assessments.

If an appropriate certified State organization does not exist

to collect an assessment, the assessment shall be collected

by the Board. There shall be only 1 certified State organization

in each State.

(2) TIMES TO REMIT ASSESSMENT.—Each first purchaser

shall remit the assessment to the Board as provided for in

the order.

(d) ASSESSMENT RATE.—

(1) INITIAL RATE.—The initial assessment rate shall be

4 cents per hundredweight of canola or rapeseed produced

and marketed.

(2) INCREASE.—The assessment rate may be increased on

recommendation by the Board to a rate not exceeding 10 cents

per hundredweight of canola or rapeseed produced and marketed in a State, unless—

(A) after the initial referendum is held under section

537(a), the Board recommends an increase above 10 cents

per hundredweight; and

(B) the increase is approved in a referendum under

section 537(b).

(3) CREDIT.—A producer who demonstrates to the Board

that the producer is participating in a program of a State

organization certified to represent producers under section

535(b)(6) shall receive credit, in determining the assessment

due from the producer, for contributions to the program of

up to 2 cents per hundredweight of canola or rapeseed marketed.

(e) LATE PAYMENT CHARGE.—

(1) IN GENERAL.—There shall be a late payment charge

imposed on any person who fails to remit, on or before the

date provided for in the order, to the Board the total amount

for which the person is liable.

(2) AMOUNT OF CHARGE.—The amount of the late payment

charge imposed under paragraph (1) shall be prescribed by

the Board with the approval of the Secretary.

(f) REFUND OF ASSESSMENTS FROM ESCROW ACCOUNT.—

(1) ESTABLISHMENT OF ESCROW ACCOUNT.—During the

period beginning on the date on which an order is first issued

under section 534(b)(3) and ending on the date on which a

referendum is conducted under section 537(a), the Board shall—

(A) establish and maintain an escrow account to be

used for assessment refunds; and

(B) place funds in the account in accordance with paragraph (2).

(2) PLACEMENT OF FUNDS IN ACCOUNT.—The Board shall

place in the account, from assessments collected during the

period referred to in paragraph (1), an amount equal to the

product obtained by multiplying the total amount of assessments collected during the period by 10 percent.

(3) RIGHT TO RECEIVE REFUND.—The Board shall refund

to a producer the assessments paid by or on behalf of the

producer if—

(A) the producer is required to pay the assessment;

(B) the producer does not support the program established under this subtitle; and
110 STAT. 1058 PUBLIC LAW 104–127—APR. 4, 1996

(C) the producer demands the refund prior to the conduct of the referendum under section 537(a).

(4) FORM OF DEMAND.—The demand shall be made in

accordance with such regulations, in such form, and within

such time period as prescribed by the Board.

(5) MAKING OF REFUND.—The refund shall be made on

submission of proof satisfactory to the Board that the producer

paid the assessment for which the refund is demanded.

(6) PRORATION.—If—

(A) the amount in the escrow account required by

paragraph (1) is not sufficient to refund the total amount

of assessments demanded by eligible producers; and

(B) the order is not approved pursuant to the referendum conducted under section 537(a);

the Board shall prorate the amount of the refunds among

all eligible producers who demand a refund.

(7) PROGRAM APPROVED.—If the plan is approved pursuant

to the referendum conducted under section 537(a), all funds

in the escrow account shall be returned to the Board for use

by the Board in accordance with this subtitle.

SEC. 537. REFERENDA.

(a) INITIAL REFERENDUM.—

(1) REQUIREMENT.—During the period ending 30 months

after the date on which an order is first issued under section

534(b)(3), the Secretary shall conduct a referendum among

producers who, during a representative period as determined

by the Secretary, have been engaged in the production of canola

or rapeseed for the purpose of ascertaining whether the order

then in effect shall be continued.

(2) ADVANCE NOTICE.—The Secretary shall, to the extent

practicable, provide broad public notice in advance of any referendum. The notice shall be provided, without advertising

expenses, by means of newspapers, county newsletters, the

electronic media, and press releases, through the use of notices

posted in State and county Cooperative State Research, Education, and Extension Service offices and county Consolidated

Farm Service Agency offices, and by other appropriate means

specified in the order. The notice shall contain information

on when the referendum will be held, registration and voting

requirements, rules regarding absentee voting, and other pertinent information.

(3) APPROVAL OF ORDER.—The order shall be continued

only if the Secretary determines that the order has been

approved by not less than a majority of the producers voting

in the referendum.

(4) DISAPPROVAL OF ORDER.—If continuation of the order

is not approved by a majority of the producers voting in the

referendum, the Secretary shall terminate collection of assessments under the order within 180 days after the referendum

and shall terminate the order in an orderly manner as soon

as practicable.

(b) ADDITIONAL REFERENDA.—

(1) IN GENERAL.—

(A) REQUIREMENT.—After the initial referendum on an

order, the Secretary shall conduct additional referenda,

as described in subparagraph (C), if requested by a repTermination

date.

7 USC 7446.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1059

resentative group of producers, as described in subparagraph (B).

(B) REPRESENTATIVE GROUP OF PRODUCERS.—An additional referendum on an order shall be conducted if

requested by 10 percent or more of the producers who,

during a representative period as determined by the Secretary, have been engaged in the production of canola

or rapeseed.

(C) ELIGIBLE PRODUCERS.—Each additional referendum

shall be conducted among all producers who, during a

representative period as determined by the Secretary, have

been engaged in the production of canola or rapeseed to

determine whether the producers favor the termination

or suspension of the order.

(2) DISAPPROVAL OF ORDER.—If the Secretary determines,

in a referendum conducted under paragraph (1), that suspension or termination of the order is favored by a majority of

the producers voting in the referendum, the Secretary shall

suspend or terminate, as appropriate, collection of assessments

under the order within 180 days after the determination, and

shall suspend or terminate the order, as appropriate, in an

orderly manner as soon as practicable after the determination.

(3) OPPORTUNITY TO REQUEST ADDITIONAL REFERENDA.—

(A) IN GENERAL.—Beginning on the date that is 5 years

after the conduct of a referendum under this subtitle, and

every 5 years thereafter, the Secretary shall provide canola

and rapeseed producers an opportunity to request an additional referendum.

(B) METHOD OF MAKING REQUEST.—

(i) IN-PERSON REQUESTS.—To carry out subparagraph (A), the Secretary shall establish a procedure

under which a producer may make a request for a

reconfirmation referendum in person at a county

Cooperative State Research, Education, and Extension

Service office or a county Consolidated Farm Service

Agency office during a period established by the Secretary, or as provided in clause (ii).

(ii) MAIL-IN REQUESTS.—In lieu of making a

request in person, a producer may make a request

by mail. To facilitate the submission of requests by

mail, the Secretary may make mail-in request forms

available to producers.

(C) NOTIFICATIONS.—The Secretary shall publish a

notice in the Federal Register, and the Board shall provide

written notification to producers, not later than 60 days

prior to the end of the period established under subparagraph (B)(i) for an in-person request, of the opportunity

of producers to request an additional referendum. The

notification shall explain the right of producers to an additional referendum, the procedure for a referendum, the

purpose of a referendum, and the date and method by

which producers may act to request an additional referendum under this paragraph. The Secretary shall take such

other action as the Secretary determines is necessary to

ensure that producers are made aware of the opportunity

to request an additional referendum.

Federal Register,

publication.

Termination

date.
110 STAT. 1060 PUBLIC LAW 104–127—APR. 4, 1996

(D) ACTION BY SECRETARY.—As soon as practicable following the submission of a request for an additional referendum, the Secretary shall determine whether a sufficient number of producers have requested the referendum,

and take such steps as are necessary to conduct the referendum, as required under paragraph (1).

(E) TIME LIMIT.—An additional referendum requested

under the procedures provided in this paragraph shall be

conducted not later than 1 year after the Secretary determines that a representative group of producers, as

described in paragraph (1)(B), have requested the conduct

of the referendum.

(c) PROCEDURES.—

(1) REIMBURSEMENT OF SECRETARY.—The Secretary shall

be reimbursed from assessments collected by the Board for

any expenses incurred by the Secretary in connection with

the conduct of an activity required under this section.

(2) DATE.—Each referendum shall be conducted for a

reasonable period of time not to exceed 3 days, established

by the Secretary, under a procedure under which producers

intending to vote in the referendum shall certify that the

producers were engaged in the production of canola, rapeseed,

or canola or rapeseed products during the representative period

and, at the same time, shall be provided an opportunity to

vote in the referendum.

(3) PLACE.—Referenda under this section shall be conducted

at locations determined by the Secretary. On request, absentee

mail ballots shall be furnished by the Secretary in a manner

prescribed by the Secretary.

SEC. 538. PETITION AND REVIEW.

(a) PETITION.—

(1) IN GENERAL.—A person subject to an order issued under

this subtitle may file with the Secretary a petition—

(A) stating that the order, a provision of the order,

or an obligation imposed in connection with the order is

not established in accordance with law; and

(B) requesting a modification of the order or an exemption from the order.

(2) HEARINGS.—The petitioner shall be given the opportunity for a hearing on a petition filed under paragraph (1),

in accordance with regulations issued by the Secretary.

(3) RULING.—After a hearing under paragraph (2), the Secretary shall issue a ruling on the petition that is the subject

of the hearing, which shall be final if the ruling is in accordance

with applicable law.

(4) LIMITATION ON PETITION.—Any petition filed under this

subtitle challenging an order, or any obligation imposed in

connection with an order, shall be filed not later than 2 years

after the effective date of the order or imposition of the obligation.

(b) REVIEW.—

(1) COMMENCEMENT OF ACTION.—The district court of the

United States for any district in which the person who is

a petitioner under subsection (a) resides or carries on business

shall have jurisdiction to review a ruling on the petition, if

a complaint is filed by the person not later than 20 days

Courts.

7 USC 7447.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1061

after the date of the entry of a ruling by the Secretary under

subsection (a)(3).

(2) PROCESS.—Service of process in a proceeding under

paragraph (1) shall be conducted in accordance with the Federal

Rules of Civil Procedure.

(3) REMANDS.—If the court determines, under paragraph

(1), that a ruling issued under subsection (a)(3) is not in accordance with applicable law, the court shall remand the matter

to the Secretary with directions either—

(A) to make such ruling as the court shall determine

to be in accordance with law; or

(B) to take such further proceedings as, in the opinion

of the court, the law requires.

(4) ENFORCEMENT.—The pendency of proceedings instituted

under subsection (a) shall not impede, hinder, or delay the

Attorney General or the Secretary from taking any action under

section 539.

SEC. 539. ENFORCEMENT.

(a) JURISDICTION.—The district courts of the United States

are vested with jurisdiction specifically to enforce, and to prevent

and restrain any person from violating, an order or regulation

made or issued under this subtitle.

(b) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized

to be commenced under this section shall be referred to the Attorney

General for appropriate action, except that the Secretary shall

not be required to refer to the Attorney General a violation of

this subtitle if the Secretary believes that the administration and

enforcement of this subtitle would be adequately served by providing

a suitable written notice or warning to the person committing

the violation or by administrative action under subsection (c).

(c) CIVIL PENALTIES AND ORDERS.—

(1) CIVIL PENALTIES.—

(A) IN GENERAL.—Any person who willfully violates

any provision of an order or regulation issued by the Secretary under this subtitle, or who fails or refuses to pay,

collect, or remit an assessment or fee required of the person

under an order or regulation, may be assessed—

(i) a civil penalty by the Secretary of not more

than $1,000 for each violation; and

(ii) in the case of a willful failure to pay, collect,

or remit an assessment as required by an order or

regulation, an additional penalty equal to the amount

of the assessment.

(B) SEPARATE OFFENSE.—Each violation under

subparagraph (A) shall be a separate offense.

(2) CEASE-AND-DESIST ORDERS.—In addition to, or in lieu

of, a civil penalty under paragraph (1), the Secretary may

issue an order requiring a person to cease and desist from

continuing a violation.

(3) NOTICE AND HEARING.—No penalty shall be assessed,

or cease-and-desist order issued, by the Secretary under this

subsection unless the person against whom the penalty is

assessed or the cease-and-desist order is issued is given notice

and opportunity for a hearing before the Secretary with respect

to the violation.

Courts.

7 USC 7448.
110 STAT. 1062 PUBLIC LAW 104–127—APR. 4, 1996

(4) FINALITY.—The order of the Secretary assessing a penalty or imposing a cease-and-desist order under this subsection

shall be final and conclusive unless the affected person files

an appeal of the order in the appropriate district court of

the United States in accordance with subsection (d).

(d) REVIEW BY DISTRICT COURT.—

(1) COMMENCEMENT OF ACTION.—Any person who has been

determined to be in violation of this subtitle, or against whom

a civil penalty has been assessed or a cease-and-desist order

issued under subsection (c), may obtain review of the penalty

or cease-and-desist order by—

(A) filing, within the 30-day period beginning on the

date the penalty is assessed or cease-and-desist order

issued, a notice of appeal in—

(i) the district court of the United States for the

district in which the person resides or carries on business; or

(ii) the United States District Court for the District

of Columbia; and

(B) simultaneously sending a copy of the notice by

certified mail to the Secretary.

(2) RECORD.—The Secretary shall file promptly, in the

appropriate court referred to in paragraph (1), a certified copy

of the record on which the Secretary determined that the person

committed the violation.

(3) STANDARD OF REVIEW.—A finding of the Secretary under

this section shall be set aside only if the finding is found

to be unsupported by substantial evidence.

(e) FAILURE TO OBEY CEASE-AND-DESIST ORDERS.—Any person

who fails to obey a cease-and-desist order issued under this section

after the cease-and-desist order has become final and unappealable,

or after the appropriate United States district court has entered

a final judgment in favor of the Secretary, shall be subject to

a civil penalty assessed by the Secretary, after opportunity for

a hearing and for judicial review under the procedures specified

in subsections (c) and (d), of not more than $5,000 for each offense.

Each day during which the failure continues shall be considered

as a separate violation of the cease-and-desist order.

(f) FAILURE TO PAY PENALTIES.—If a person fails to pay an

assessment of a civil penalty under this section after the assessment

has become a final and unappealable order, or after the appropriate

United States district court has entered final judgment in favor

of the Secretary, the Secretary shall refer the matter to the Attorney

General for recovery of the amount assessed in the district court

of the United States for any district in which the person resides

or carries on business. In an action for recovery, the validity and

appropriateness of the final order imposing the civil penalty shall

not be subject to review.

(g) ADDITIONAL REMEDIES.—The remedies provided in this subtitle shall be in addition to, and not exclusive of, other remedies

that may be available.

SEC. 540. INVESTIGATIONS AND POWER TO SUBPOENA.

(a) INVESTIGATIONS.—The Secretary may make such investigations as the Secretary considers necessary—

(1) for the effective administration of this subtitle; and

7 USC 7449.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1063

(2) to determine whether any person has engaged or is

engaging in an act that constitutes a violation of this subtitle,

or an order, rule, or regulation issued under this subtitle.

(b) SUBPOENAS, OATHS, AND AFFIRMATIONS.—

(1) IN GENERAL.—For the purpose of an investigation under

subsection (a), the Secretary may administer oaths and affirmations, subpoena witnesses, take evidence, and issue subpoenas

to require the production of any records that are relevant

to the inquiry. The attendance of witnesses and the production

of records may be required from any place in the United States.

(2) ADMINISTRATIVE HEARINGS.—For the purpose of an

administrative hearing held under section 538 or 539, the

presiding officer is authorized to administer oaths and affirmations, subpoena and compel the attendance of witnesses, take

evidence, and require the production of any records that are

relevant to the inquiry. The attendance of witnesses and the

production of records may be required from any place in the

United States.

(c) AID OF COURTS.—In the case of contumacy by, or refusal

to obey a subpoena issued to, any person, the Secretary may invoke

the aid of any court of the United States within the jurisdiction

of which the investigation or proceeding is carried on, or where

the person resides or carries on business, in order to enforce a

subpoena issued by the Secretary under subsection (b). The court

may issue an order requiring the person to comply with the subpoena.

(d) CONTEMPT.—A failure to obey an order of the court under

this section may be punished by the court as contempt of the

court.

(e) PROCESS.—Process may be served on a person in the judicial

district in which the person resides or carries on business or wherever the person may be found.

(f) HEARING SITE.—The site of a hearing held under section

538 or 539 shall be in the judicial district where the person affected

by the hearing resides or has a principal place of business.

SEC. 541. SUSPENSION OR TERMINATION.

The Secretary shall, whenever the Secretary finds that an

order or a provision of an order obstructs or does not tend to

effectuate the declared policy of this subtitle, suspend or terminate

the operation of the order or provision. The suspension or termination of an order shall not be considered an order within the

meaning of this subtitle.

SEC. 542. REGULATIONS.

The Secretary may issue such regulations as are necessary

to carry out this subtitle.

SEC. 543. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—There are authorized to be appropriated for

each fiscal year such sums as are necessary to carry out this

subtitle.

(b) ADMINISTRATIVE EXPENSES.—Funds appropriated under subsection (a) shall not be available for payment of the expenses

or expenditures of the Board in administering a provision of an

order issued under this subtitle.

7 USC 7452.

7 USC 7451.

7 USC 7450.
110 STAT. 1064 PUBLIC LAW 104–127—APR. 4, 1996

Subtitle D—Kiwifruit

SEC. 551. SHORT TITLE.

This subtitle may be cited as the ‘‘National Kiwifruit Research,

Promotion, and Consumer Information Act’’.

SEC. 552. FINDINGS AND PURPOSES.

(a) FINDINGS.—Congress finds that—

(1) domestically produced kiwifruit are grown by many

individual producers;

(2) virtually all domestically produced kiwifruit are grown

in the State of California, although there is potential for production in many other areas of the United States;

(3) kiwifruit move in interstate and foreign commerce, and

kiwifruit that do not move in channels of commerce directly

burden or affect interstate commerce;

(4) in recent years, large quantities of kiwifruit have been

imported into the United States;

(5) the maintenance and expansion of existing domestic

and foreign markets for kiwifruit, and the development of additional and improved markets for kiwifruit, are vital to the

welfare of kiwifruit producers and other persons concerned

with producing, marketing, and processing kiwifruit;

(6) a coordinated program of research, promotion, and

consumer information regarding kiwifruit is necessary for the

maintenance and development of the markets; and

(7) kiwifruit producers, handlers, and importers are unable

to implement and finance such a program without cooperative

action.

(b) PURPOSES.—The purposes of this subtitle are—

(1) to authorize the establishment of an orderly procedure

for the development and financing (through an assessment)

of an effective and coordinated program of research, promotion,

and consumer information regarding kiwifruit;

(2) to use the program to strengthen the position of the

kiwifruit industry in domestic and foreign markets and maintain, develop, and expand markets for kiwifruit; and

(3) to treat domestically produced kiwifruit and imported

kiwifruit equitably.

SEC. 553. DEFINITIONS.

In this subtitle (unless the context otherwise requires):

(1) BOARD.—The term ‘‘Board’’ means the National

Kiwifruit Board established under section 555.

(2) CONSUMER INFORMATION.—The term ‘‘consumer

information’’ means any action taken to provide information

to, and broaden the understanding of, the general public regarding the consumption, use, nutritional attributes, and care of

kiwifruit.

(3) EXPORTER.—The term ‘‘exporter’’ means any person

from outside the United States who exports kiwifruit into the

United States.

(4) HANDLER.—The term ‘‘handler’’ means any person,

excluding a common carrier, engaged in the business of buying

and selling, packing, marketing, or distributing kiwifruit as

specified in the order.

7 USC 7462.

7 USC 7461.

7 USC 7401 note.

National

Kiwifruit

Research,

Promotion, and

Consumer

Information Act.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1065

(5) IMPORTER.—The term ‘‘importer’’ means any person who

imports kiwifruit into the United States.

(6) KIWIFRUIT.—The term ‘‘kiwifruit’’ means all varieties

of fresh kiwifruit grown in or imported into the United States.

(7) MARKETING.—The term ‘‘marketing’’ means the sale

or other disposition of kiwifruit into interstate, foreign, or intrastate commerce by buying, marketing, distribution, or otherwise

placing kiwifruit into commerce.

(8) ORDER.—The term ‘‘order’’ means a kiwifruit research,

promotion, and consumer information order issued by the Secretary under section 554.

(9) PERSON.—The term ‘‘person’’ means any individual,

group of individuals, partnership, corporation, association,

cooperative, or other legal entity.

(10) PROCESSING.—The term ‘‘processing’’ means canning,

fermenting, distilling, extracting, preserving, grinding, crushing, or in any manner changing the form of kiwifruit for the

purpose of preparing the kiwifruit for market or marketing

the kiwifruit.

(11) PRODUCER.—The term ‘‘producer’’ means any person

who grows kiwifruit in the United States for sale in commerce.

(12) PROMOTION.—The term ‘‘promotion’’ means any action

taken under this subtitle (including paid advertising) to present

a favorable image of kiwifruit to the general public for the

purpose of improving the competitive position of kiwifruit and

stimulating the sale of kiwifruit.

(13) RESEARCH.—The term ‘‘research’’ means any type of

research relating to the use, nutritional value, and marketing

of kiwifruit conducted for the purpose of advancing the image,

desirability, marketability, or quality of kiwifruit.

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

(15) UNITED STATES.—The term ‘‘United States’’ means the

50 States of the United States, the District of Columbia, and

the Commonwealth of Puerto Rico.

SEC. 554. ISSUANCE OF ORDERS.

(a) ISSUANCE.—To effectuate the purposes of this subtitle specified in section 552(b), the Secretary shall issue an order applicable

to producers, handlers, and importers of kiwifruit. Any such order

shall be national in scope. Not more than 1 order shall be in

effect under this subtitle at any 1 time.

(b) PROCEDURE.—

(1) PROPOSAL FOR ISSUANCE OF ORDER.—Any person that

will be affected by this subtitle may request the issuance of,

and submit a proposal for, an order under this subtitle.

(2) PROPOSED ORDER.—Not later than 90 days after the

receipt of a request and proposal for an order, the Secretary

shall publish a proposed order and give due notice and opportunity for public comment on the proposed order.

(3) ISSUANCE OF ORDER.—After notice and opportunity for

public comment are provided under paragraph (2), the Secretary

shall issue an order, taking into consideration the comments

received and including in the order provisions necessary to

ensure that the order is in conformity with this subtitle.

Publication.

7 USC 7463.
110 STAT. 1066 PUBLIC LAW 104–127—APR. 4, 1996

(c) AMENDMENTS.—The Secretary may amend any order issued

under this section. The provisions of this subtitle applicable to

an order shall be applicable to an amendment to an order.

SEC. 555. NATIONAL KIWIFRUIT BOARD.

(a) MEMBERSHIP.—An order issued by the Secretary under section 554 shall provide for the establishment of a National Kiwifruit

Board that consists of the following 11 members:

(1) 6 members who are producers (or representatives of

producers) and who are not exempt from an assessment under

section 556(b).

(2) 4 members who are importers (or representatives of

importers) and who are not exempt from an assessment under

section 556(b) or are exporters (or representatives of exporters).

(3) 1 member appointed from the general public.

(b) ADJUSTMENT OF MEMBERSHIP.—

(1) IN GENERAL.—Subject to the 11-member limit and to

paragraph (2), the Secretary may adjust membership on the

Board to accommodate changes in production and import levels

of kiwifruit.

(2) NUMBER OF PRODUCER MEMBERS.—Producers shall comprise not less than 51 percent of the membership of the Board.

(c) APPOINTMENT AND NOMINATION.—

(1) APPOINTMENT.—The Secretary shall appoint the members of the Board from nominations submitted in accordance

with this subsection.

(2) PRODUCERS.—The members referred to in subsection

(a)(1) shall be appointed from individuals nominated by producers.

(3) IMPORTERS AND EXPORTERS.—The members referred to

in subsection (a)(2) shall be appointed from individuals nominated by importers or exporters.

(4) PUBLIC REPRESENTATIVE.—The public representative

shall be appointed from nominations submitted by other members of the Board.

(5) FAILURE TO NOMINATE.—If producers, importers, and

exporters fail to nominate individuals for appointment, the

Secretary may appoint members and alternates on a basis

provided for in the order. If the Board fails to nominate a

public representative, the member may be appointed by the

Secretary without a nomination.

(d) ALTERNATES.—The Secretary shall appoint an alternate for

each member of the Board. An alternate shall—

(1) be appointed in the same manner as the member for

whom the individual is an alternate; and

(2) serve on the Board if the member is absent from a

meeting or is disqualified under subsection (f).

(e) TERMS.—A member of the Board shall be appointed for

a term of 3 years. No member may serve more than 2 consecutive

3-year terms, except that of the members first appointed—

(1) 5 members shall be appointed for a term of 2 years;

and

(2) 6 members shall be appointed for a term of 3 years.

(f) DISQUALIFICATION.—If a member or alternate of the Board

who was appointed as a producer, importer, exporter, or public

representative member ceases to belong to the group for which

7 USC 7464.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1067

the member was appointed, the member or alternate shall be disqualified from serving on the Board.

(g) COMPENSATION.—A member or alternate of the Board shall

serve without pay.

(h) GENERAL POWERS AND DUTIES.—The Board shall—

(1) administer an order issued by the Secretary under

section 554, and an amendment to the order, in accordance

with the order and amendment and this subtitle;

(2) prescribe rules and regulations to carry out the order;

(3) meet, organize, and select from among members of

the Board a chairperson, other officers, and committees and

subcommittees, as the Board determines appropriate;

(4) receive, investigate, and report to the Secretary accounts

of violations of the order;

(5) make recommendations to the Secretary with respect

to an amendment that should be made to the order; and

(6) employ or contract with a manager and staff to assist

in administering the order, except that, to reduce administrative costs and increase efficiency, the Board shall seek, to

the extent practicable, to employ or contract with personnel

who are already associated with organizations involved in

promoting kiwifruit that are chartered by a State, the District

of Columbia, or the Commonwealth of Puerto Rico.

SEC. 556. REQUIRED TERMS IN ORDER.

(a) BUDGETS AND PLANS.—

(1) IN GENERAL.—An order issued under section 554 shall

provide for periodic budgets and plans in accordance with this

subsection.

(2) BUDGETS.—The Board shall prepare and submit to the

Secretary a budget prior to the beginning of the fiscal year

of the anticipated expenses and disbursements of the Board

in the administration of the order, including probable costs

of research, promotion, and consumer information. A budget

shall become effective on a 2⁄3-vote of a quorum of the Board

and approval by the Secretary.

(3) PLANS.—Each budget shall include a plan for research,

promotion, and consumer information regarding kiwifruit. A

plan under this paragraph shall become effective on approval

by the Secretary. The Board may enter into contracts and

agreements, on approval by the Secretary, for—

(A) the development and carrying out of the plan;

and

(B) the payment of the cost of the plan, with funds

collected pursuant to this subtitle.

(b) ASSESSMENTS.—

(1) IN GENERAL.—The order shall provide for the imposition

and collection of assessments with regard to the production

and importation of kiwifruit in accordance with this subsection.

(2) RATE.—The assessment rate shall be the rate that

is recommended by a 2⁄3-vote of a quorum of the Board and

approved by the Secretary, except that the rate shall not exceed

$0.10 per 7-pound tray of kiwifruit or an equivalent rate.

(3) COLLECTION BY FIRST HANDLERS.—Except as provided

in paragraph (5), the first handler of kiwifruit shall—

7 USC 7465.

Regulations.
110 STAT. 1068 PUBLIC LAW 104–127—APR. 4, 1996

(A) be responsible for the collection from the producer,

and payment to the Board, of assessments required under

this subsection; and

(B) maintain a separate record of the kiwifruit of each

producer whose kiwifruit are so handled, including the

kiwifruit owned by the handler.

(4) IMPORTERS.—The assessment on imported kiwifruit

shall be paid by the importer to the United States Customs

Service at the time of entry into the United States and shall

be remitted to the Board.

(5) EXEMPTION FROM ASSESSMENT.—The following persons

or activities are exempt from an assessment under this subsection:

(A) A producer who produces less than 500 pounds

of kiwifruit per year.

(B) An importer who imports less than 10,000 pounds

of kiwifruit per year.

(C) A sale of kiwifruit made directly from the producer

to a consumer for a purpose other than resale.

(D) The production or importation of kiwifruit for

processing.

(6) CLAIM OF EXEMPTION.—To claim an exemption under

paragraph (5) for a particular year, a person shall—

(A) submit an application to the Board stating the

basis for the exemption and certifying that the quantity

of kiwifruit produced, imported, or sold by the person will

not exceed any poundage limitation required for the exemption in the year; or

(B) be on a list of approved processors developed by

the Board.

(c) USE OF ASSESSMENTS.—

(1) AUTHORIZED USES.—The order shall provide that funds

paid to the Board as assessments under subsection (b) may

be used by the Board—

(A) to pay for research, promotion, and consumer

information described in the budget of the Board under

subsection (a) and for other expenses incurred by the Board

in the administration of an order;

(B) to pay such other expenses for the administration,

maintenance, and functioning of the Board (including any

enforcement efforts for the collection of assessments) as

may be authorized by the Secretary, including interest

and penalties for late payments; and

(C) to fund a reserve established under section 557(d).

(2) REQUIRED USES.—The order shall provide that funds

paid to the Board as assessments under subsection (b) shall

be used by the Board—

(A) to pay the expenses incurred by the Secretary,

including salaries and expenses of Federal Government

employees, in implementing and administering the order;

and

(B) to reimburse the Secretary for any expenses

incurred by the Secretary in conducting referenda under

this subtitle.

(3) LIMITATION ON USE OF ASSESSMENTS.—Except for the

first year of operation of the Board, expenses for the administra-
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1069

tion, maintenance, and functioning of the Board may not exceed

30 percent of the budget for a year.

(d) FALSE CLAIMS.—The order shall provide that any promotion

funded with assessments collected under subsection (b) may not

make—

(1) any false claims on behalf of kiwifruit; and

(2) any false statements with respect to the attributes

or use of any product that competes with kiwifruit for sale

in commerce.

(e) PROHIBITION ON USE OF FUNDS.—The order shall provide

that funds collected by the Board under this subtitle through assessments may not, in any manner, be used for the purpose of influencing legislation or governmental policy or action, except for making

recommendations to the Secretary as provided for under this subtitle.

(f) BOOKS, RECORDS, AND REPORTS.—

(1) BOARD.—The order shall require the Board—

(A) to maintain books and records with respect to

the receipt and disbursement of funds received by the

Board;

(B) to submit to the Secretary from time to time such

reports as the Secretary may require for appropriate

accounting; and

(C) to submit to the Secretary at the end of each

fiscal year a complete audit report by an independent auditor regarding the activities of the Board during the fiscal

year.

(2) OTHERS.—To make information and data available to

the Board and the Secretary that is appropriate or necessary

for the effectuation, administration, or enforcement of this subtitle (or any order or regulation issued under this subtitle),

the order shall require handlers and importers who are responsible for the collection, payment, or remittance of assessments

under subsection (b)—

(A) to maintain and make available for inspection by

the employees and agents of the Board and the Secretary

such books and records as may be required by the order;

and

(B) to file, at the times and in the manner and content

prescribed by the order, reports regarding the collection,

payment, or remittance of the assessments.

(g) CONFIDENTIALITY.—

(1) IN GENERAL.—The order shall require that all information obtained pursuant to subsection (f)(2) be kept confidential

by all officers, employees, and agents of the Department of

Agriculture and of the Board. Only such information as the

Secretary considers relevant shall be disclosed to the public

and only in a suit or administrative hearing, brought at the

request of the Secretary or to which the Secretary or any

officer of the United States is a party, involving the order

with respect to which the information was furnished or

acquired.

(2) LIMITATIONS.—Nothing in this subsection prohibits—

(A) the issuance of general statements based on the

reports of a number of handlers and importers subject

to an order, if the statements do not identify the information furnished by any person; or
110 STAT. 1070 PUBLIC LAW 104–127—APR. 4, 1996

(B) the publication, by direction of the Secretary, of

the name of any person violating an order issued under

section 554(a), together with a statement of the particular

provisions of the order violated by the person.

(3) PENALTY.—Any person who willfully violates this subsection, on conviction, shall be subject to a fine of not more

than $1,000 or to imprisonment for not more than 1 year,

or both, and, if the person is a member, officer, or agent

of the Board or an employee of the Department of Agriculture,

shall be removed from office.

(h) WITHHOLDING OF INFORMATION.—Nothing in this subtitle

authorizes the withholding of information from Congress.

SEC. 557. PERMISSIVE TERMS IN ORDER.

(a) PERMISSIVE TERMS.—On the recommendation of the Board

and with the approval of the Secretary, an order issued under

section 554 may include the terms and conditions specified in this

section and such additional terms and conditions as the Secretary

considers necessary to effectuate the other provisions of the order

and are incidental to, and not inconsistent with, this subtitle.

(b) ALTERNATIVE PAYMENT AND REPORTING SCHEDULES.—The

order may authorize the Board to designate different handler payment and reporting schedules to recognize differences in marketing

practices and procedures.

(c) WORKING GROUPS.—The order may authorize the Board

to convene working groups drawn from producers, handlers, importers, exporters, or the general public and utilize the expertise of

the groups to assist in the development of research and marketing

programs for kiwifruit.

(d) RESERVE FUNDS.—The order may authorize the Board to

accumulate reserve funds from assessments collected pursuant to

section 556(b) to permit an effective and continuous coordinated

program of research, promotion, and consumer information in years

in which production and assessment income may be reduced, except

that any reserve fund may not exceed the amount budgeted for

operation of this subtitle for 1 year.

(e) PROMOTION ACTIVITIES OUTSIDE UNITED STATES.—The order

may authorize the Board to use, with the approval of the Secretary,

funds collected under section 556(b) and funds from other sources

for the development and expansion of sales in foreign markets

of kiwifruit produced in the United States.

SEC. 558. PETITION AND REVIEW.

(a) PETITION.—

(1) IN GENERAL.—A person subject to an order may file

with the Secretary a petition—

(A) stating that the order, a provision of the order,

or an obligation imposed in connection with the order is

not in accordance with law; and

(B) requesting a modification of the order or an exemption from the order.

(2) HEARINGS.—A person submitting a petition under paragraph (1) shall be given an opportunity for a hearing on the

petition, in accordance with regulations issued by the Secretary.

(3) RULING.—After the hearing, the Secretary shall issue

a ruling on the petition which shall be final if the petition

is in accordance with law.

7 USC 7467.

7 USC 7466.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1071

(4) LIMITATION ON PETITION.—Any petition filed under this

subtitle challenging an order, or any obligation imposed in

connection with an order, shall be filed not later than 2 years

after the effective date of the order or imposition of the obligation.

(b) REVIEW.—

(1) COMMENCEMENT OF ACTION.—The district court of the

United States for any district in which the person who is

a petitioner under subsection (a) resides or carries on business

is vested with jurisdiction to review the ruling on the petition

of the person, if a complaint for that purpose is filed not

later than 20 days after the date of the entry of a ruling

by the Secretary under subsection (a).

(2) PROCESS.—Service of process in the proceedings shall

be conducted in accordance with the Federal Rules of Civil

Procedure.

(3) REMANDS.—If the court determines that the ruling is

not in accordance with law, the court shall remand the matter

to the Secretary with directions—

(A) to make such ruling as the court shall determine

to be in accordance with law; or

(B) to take such further action as, in the opinion of

the court, the law requires.

(4) ENFORCEMENT.—The pendency of a proceeding

instituted pursuant to subsection (a) shall not impede, hinder,

or delay the Attorney General or the Secretary from obtaining

relief pursuant to section 559.

SEC. 559. ENFORCEMENT.

(a) JURISDICTION.—A district court of the United States shall

have jurisdiction specifically to enforce, and to prevent and restrain

any person from violating, any order or regulation made or issued

by the Secretary under this subtitle.

(b) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized

to be brought under this section shall be referred to the Attorney

General for appropriate action, except that the Secretary is not

required to refer to the Attorney General a violation of this subtitle,

or any order or regulation issued under this subtitle, if the Secretary

believes that the administration and enforcement of this subtitle

would be adequately served by administrative action under subsection (c) or suitable written notice or warning to the person

committing the violation.

(c) CIVIL PENALTIES AND ORDERS.—

(1) CIVIL PENALTIES.—Any person who willfully violates

any provision of any order or regulation issued by the Secretary

under this subtitle, or who fails or refuses to pay, collect,

or remit any assessment or fee duly required of the person

under the order or regulation, may be assessed a civil penalty

by the Secretary of not less than $500 nor more than $5,000

for each such violation. Each violation shall be a separate

offense.

(2) CEASE-AND-DESIST ORDERS.—In addition to or in lieu

of the civil penalty, the Secretary may issue an order requiring

the person to cease and desist from continuing the violation.

(3) NOTICE AND HEARING.—No order assessing a civil penalty or cease-and-desist order may be issued by the Secretary

under this subsection unless the Secretary gives the person

Courts.

7 USC 7468.

Courts.
110 STAT. 1072 PUBLIC LAW 104–127—APR. 4, 1996

against whom the order is issued notice and opportunity for

a hearing on the record before the Secretary with respect to

the violation.

(4) FINALITY.—The order of the Secretary assessing a penalty or imposing a cease-and-desist order shall be final and

conclusive unless the person against whom the order is issued

files an appeal of the order in the appropriate district court

of the United States, in accordance with subsection (d).

(d) REVIEW BY UNITED STATES DISTRICT COURT.—

(1) COMMENCEMENT OF ACTION.—Any person against whom

a violation is found and a civil penalty assessed or ceaseand-desist order issued under subsection (c) may obtain review

of the penalty or cease-and-desist order in the district court

of the United States for the district in which the person resides

or carries on business, or the United States District Court

for the District of Columbia, by—

(A) filing a notice of appeal in the court not later

than 30 days after the date on which the penalty is assessed

or cease-and-desist order issued; and

(B) simultaneously sending a copy of the notice by

certified mail to the Secretary.

(2) RECORD.—The Secretary shall promptly file in the court

a certified copy of the record on which the Secretary found

that the person committed the violation.

(3) STANDARD OF REVIEW.—A finding of the Secretary shall

be set aside only if the finding is found to be unsupported

by substantial evidence.

(e) FAILURE TO OBEY CEASE-AND-DESIST ORDERS.—Any person

who fails to obey a cease-and-desist order issued by the Secretary

after the cease-and-desist order has become final and unappealable,

or after the appropriate United States district court has entered

a final judgment in favor of the Secretary, shall be subject to

a civil penalty assessed by the Secretary, after opportunity for

a hearing and for judicial review under the procedures specified

in subsections (c) and (d), of not more than $500 for each offense.

Each day during which the failure continues shall be considered

a separate violation of the cease-and-desist order.

(f) FAILURE TO PAY PENALTIES.—If a person fails to pay an

assessment of a civil penalty after the assessment has become

a final and unappealable order issued by the Secretary, or after

the appropriate United States district court has entered final judgment in favor of the Secretary, the Secretary shall refer the matter

to the Attorney General for recovery of the amount assessed in

the district court of the United States for any district in which

the person resides or carries on business. In an action for recovery,

the validity and appropriateness of the final order imposing the

civil penalty shall not be subject to review.

SEC. 560. INVESTIGATIONS AND POWER TO SUBPOENA.

(a) IN GENERAL.—The Secretary may make such investigations

as the Secretary considers necessary—

(1) for the effective carrying out of the responsibilities

of the Secretary under this subtitle; or

(2) to determine whether a person subject to this subtitle

has engaged or is engaging in any act that constitutes a violation of this subtitle, or any order, rule, or regulation issued

under this subtitle.

7 USC 7469.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1073

(b) POWER TO SUBPOENA.—

(1) INVESTIGATIONS.—For the purpose of an investigation

made under subsection (a), the Secretary may administer oaths

and affirmations and may issue subpoenas to require the

production of any records that are relevant to the inquiry.

The production of any such records may be required from

any place in the United States.

(2) ADMINISTRATIVE HEARINGS.—For the purpose of an

administrative hearing held under section 558 or 559, the

presiding officer is authorized to administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses,

take evidence, and require the production of any records that

are relevant to the inquiry. The attendance of witnesses and

the production of any such records may be required from any

place in the United States.

(c) AID OF COURTS.—In the case of contumacy by, or refusal

to obey a subpoena to, any person, the Secretary may invoke the

aid of any court of the United States within the jurisdiction of

which the investigation or proceeding is carried on, or where the

person resides or carries on business, to enforce a subpoena issued

by the Secretary under subsection (b). The court may issue an

order requiring the person to comply with the subpoena.

(d) CONTEMPT.—Any failure to obey the order of the court

may be punished by the court as a contempt of the court.

(e) PROCESS.—Process in any such case may be served in the

judicial district in which the person resides or carries on business

or wherever the person may be found.

(f) HEARING SITE.—The site of any hearing held under section

558 or 559 shall be in the judicial district where the person affected

by the hearing resides or has a principal place of business.

SEC. 561. REFERENDA.

(a) INITIAL REFERENDUM.—

(1) REFERENDUM REQUIRED.—During the 60-day period

immediately preceding the proposed effective date of an order

issued under section 554, the Secretary shall conduct a referendum among kiwifruit producers and importers who will be

subject to assessments under the order, to ascertain whether

producers and importers approve the implementation of the

order.

(2) APPROVAL OF ORDER.—The order shall become effective,

as provided in section 554, if the Secretary determines that—

(A) the order has been approved by a majority of the

producers and importers voting in the referendum; and

(B) the producers and importers favoring approval

produce and import more than 50 percent of the total

volume of kiwifruit produced and imported by persons voting in the referendum.

(b) SUBSEQUENT REFERENDA.—The Secretary may periodically

conduct a referendum to determine if kiwifruit producers and

importers favor the continuation, termination, or suspension of

any order issued under section 554 that is in effect at the time

of the referendum.

(c) REQUIRED REFERENDA.—The Secretary shall hold a referendum under subsection (b)—

7 USC 7470.
110 STAT. 1074 PUBLIC LAW 104–127—APR. 4, 1996

(1) at the end of the 6-year period beginning on the effective

date of the order and at the end of each subsequent 6-year

period;

(2) at the request of the Board; or

(3) if not less than 30 percent of the kiwifruit producers

and importers subject to assessments under the order submit

a petition requesting the referendum.

(d) VOTE.—On completion of a referendum under subsection

(b), the Secretary shall suspend or terminate the order that was

subject to the referendum at the end of the marketing year if—

(1) the suspension or termination of the order is favored

by not less than a majority of the producers and importers

voting in the referendum; and

(2) the producers and importers produce and import more

than 50 percent of the total volume of kiwifruit produced and

imported by persons voting in the referendum.

(e) CONFIDENTIALITY.—The ballots and other information or

reports that reveal, or tend to reveal, the vote of any person under

this subtitle and the voting list shall be held strictly confidential

and shall not be disclosed.

SEC. 562. SUSPENSION OR TERMINATION.

(a) IN GENERAL.—If the Secretary finds that an order issued

under section 554, or a provision of the order, obstructs or does

not tend to effectuate the purposes of this subtitle, the Secretary

shall suspend or terminate the operation of the order or provision.

(b) LIMITATION.—The suspension or termination of any order,

or any provision of an order, shall not be considered an order

under this subtitle.

SEC. 563. REGULATIONS.

The Secretary may issue such regulations as are necessary

to carry out this subtitle.

SEC. 564. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated for each fiscal year

such sums as are necessary to carry out this subtitle.

Subtitle E—Popcorn

SEC. 571. SHORT TITLE.

This subtitle may be cited as the ‘‘Popcorn Promotion, Research,

and Consumer Information Act’’.

SEC. 572. FINDINGS AND DECLARATION OF POLICY.

(a) FINDINGS.—Congress finds that—

(1) popcorn is an important food that is a valuable part

of the human diet;

(2) the production and processing of popcorn plays a significant role in the economy of the United States in that popcorn

is processed by several popcorn processors, distributed through

wholesale and retail outlets, and consumed by millions of people

throughout the United States and foreign countries;

(3) popcorn must be of high quality, readily available, handled properly, and marketed efficiently to ensure that the benefits of popcorn are available to the people of the United States;

7 USC 7481.

7 USC 7401 note.

Popcorn

Promotion,

Research, and

Consumer

Information Act.

7 USC 7473.

7 USC 7472.

7 USC 7471.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1075

(4) the maintenance and expansion of existing markets

and uses and the development of new markets and uses for

popcorn are vital to the welfare of processors and persons

concerned with marketing, using, and producing popcorn for

the market, as well as to the agricultural economy of the

United States;

(5) the cooperative development, financing, and

implementation of a coordinated program of popcorn promotion,

research, consumer information, and industry information is

necessary to maintain and expand markets for popcorn; and

(6) popcorn moves in interstate and foreign commerce, and

popcorn that does not move in those channels of commerce

directly burdens or affects interstate commerce in popcorn.

(b) POLICY.—It is the policy of Congress that it is in the public

interest to authorize the establishment, through the exercise of

the powers provided in this subtitle, of an orderly procedure for

developing, financing (through adequate assessments on unpopped

popcorn processed domestically), and carrying out an effective,

continuous, and coordinated program of promotion, research,

consumer information, and industry information designed to—

(1) strengthen the position of the popcorn industry in the

marketplace; and

(2) maintain and expand domestic and foreign markets

and uses for popcorn.

(c) PURPOSES.—The purposes of this subtitle are to—

(1) maintain and expand the markets for all popcorn products in a manner that—

(A) is not designed to maintain or expand any individual share of a producer or processor of the market;

(B) does not compete with or replace individual

advertising or promotion efforts designed to promote

individual brand name or trade name popcorn products;

and

(C) authorizes and funds programs that result in

government speech promoting government objectives; and

(2) establish a nationally coordinated program for popcorn

promotion, research, consumer information, and industry

information.

(d) STATUTORY CONSTRUCTION.—This subtitle treats processors

equitably. Nothing in this subtitle—

(1) provides for the imposition of a trade barrier to the

entry into the United States of imported popcorn for the domestic market; or

(2) provides for the control of production or otherwise limits

the right of any individual processor to produce popcorn.

SEC. 573. DEFINITIONS.

In this subtitle (unless the context otherwise requires):

(1) BOARD.—The term ‘‘Board’’ means the Popcorn Board

established under section 575(b).

(2) COMMERCE.—The term ‘‘commerce’’ means interstate,

foreign, or intrastate commerce.

(3) CONSUMER INFORMATION.—The term ‘‘consumer

information’’ means information and programs that will assist

consumers and other persons in making evaluations and decisions regarding the purchase, preparation, and use of popcorn.

7 USC 7482.
110 STAT. 1076 PUBLIC LAW 104–127—APR. 4, 1996

(4) DEPARTMENT.—The term ‘‘Department’’ means the

Department of Agriculture.

(5) INDUSTRY INFORMATION.—The term ‘‘industry information’’ means information or a program that will lead to the

development of—

(A) new markets, new marketing strategies, or

increased efficiency for the popcorn industry; or

(B) activities to enhance the image of the popcorn

industry.

(6) MARKETING.—The term ‘‘marketing’’ means the sale

or other disposition of unpopped popcorn for human consumption in a channel of commerce, but does not include a sale

or disposition to or between processors.

(7) ORDER.—The term ‘‘order’’ means an order issued under

section 574.

(8) PERSON.—The term ‘‘person’’ means an individual, group

of individuals, partnership, corporation, association, or cooperative, or any other legal entity.

(9) POPCORN.—The term ‘‘popcorn’’ means unpopped popcorn (Zea Mays L) that is—

(A) commercially grown;

(B) processed in the United States by shelling, cleaning,

or drying; and

(C) introduced into a channel of commerce.

(10) PROCESS.—The term ‘‘process’’ means to shell, clean,

dry, and prepare popcorn for the market, but does not include

packaging popcorn for the market without also engaging in

another activity described in this paragraph.

(11) PROCESSOR.—The term ‘‘processor’’ means a person

engaged in the preparation of unpopped popcorn for the market

who owns or shares the ownership and risk of loss of the

popcorn and who processes and distributes over 4,000,000

pounds of popcorn in the market per year.

(12) PROMOTION.—The term ‘‘promotion’’ means an action,

including paid advertising, to enhance the image or desirability

of popcorn.

(13) RESEARCH.—The term ‘‘research’’ means any type of

study to advance the image, desirability, marketability, production, product development, quality, or nutritional value of popcorn.

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

(15) STATE.—The term ‘‘State’’ means each of the 50 States

and the District of Columbia.

(16) UNITED STATES.—The term ‘‘United States’’ means all

of the States.

SEC. 574. ISSUANCE OF ORDERS.

(a) IN GENERAL.—To effectuate the policy described in section

572(b), the Secretary, subject to subsection (b), shall issue 1 or

more orders applicable to processors. An order shall be applicable

to all popcorn production and marketing areas in the United States.

Not more than 1 order shall be in effect under this subtitle at

any 1 time.

(b) PROCEDURE.—

(1) PROPOSAL OR REQUEST FOR ISSUANCE.—The Secretary

may propose the issuance of an order, or an association of

7 USC 7483.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1077

processors or any other person that would be affected by an

order may request the issuance of, and submit a proposal

for, an order.

(2) NOTICE AND COMMENT CONCERNING PROPOSED ORDER.—

Not later than 60 days after the receipt of a request and

proposal for an order under paragraph (1), or at such time

as the Secretary determines to propose an order, the Secretary

shall publish a proposed order and give due notice and opportunity for public comment on the proposed order.

(3) ISSUANCE OF ORDER.—After notice and opportunity for

public comment under paragraph (2), the Secretary shall issue

an order, taking into consideration the comments received and

including in the order such provisions as are necessary to

ensure that the order conforms to this subtitle. The order

shall be issued and become effective not later than 150 days

after the date of publication of the proposed order.

(c) AMENDMENTS.—The Secretary, as appropriate, may amend

an order. The provisions of this subtitle applicable to an order

shall be applicable to any amendment to an order, except that

an amendment to an order may not require a referendum to become

effective.

SEC. 575. REQUIRED TERMS IN ORDERS.

(a) IN GENERAL.—An order shall contain the terms and conditions specified in this section.

(b) ESTABLISHMENT AND MEMBERSHIP OF POPCORN BOARD.—

(1) IN GENERAL.—The order shall provide for the establishment of, and appointment of members to, a Popcorn Board

that shall consist of not fewer than 4 members and not more

than 9 members.

(2) NOMINATIONS.—The members of the Board shall be

processors appointed by the Secretary from nominations

submitted by processors in a manner authorized by the Secretary, subject to paragraph (3). Not more than 1 member

may be appointed to the Board from nominations submitted

by any 1 processor.

(3) GEOGRAPHICAL DIVERSITY.—In making appointments,

the Secretary shall take into account, to the extent practicable,

the geographical distribution of popcorn production throughout

the United States.

(4) TERMS.—The term of appointment of each member of

the Board shall be 3 years, except that the members appointed

to the initial Board shall serve, proportionately, for terms of

2, 3, and 4 years, as determined by the Secretary.

(5) COMPENSATION AND EXPENSES.—A member of the Board

shall serve without compensation, but shall be reimbursed for

the expenses of the member incurred in the performance of

duties for the Board.

(c) POWERS AND DUTIES OF BOARD.—The order shall define

the powers and duties of the Board, which shall include the power

and duty—

(1) to administer the order in accordance with the terms

and provisions of the order;

(2) to issue regulations to effectuate the terms and provisions of the order;

(3) to appoint members of the Board to serve on an executive committee;

7 USC 7484.

Publication.
110 STAT. 1078 PUBLIC LAW 104–127—APR. 4, 1996

(4) to propose, receive, evaluate, and approve budgets,

plans, and projects of promotion, research, consumer information, and industry information, and to contract with appropriate

persons to implement the plans or projects;

(5) to accept and receive voluntary contributions, gifts,

and market promotion or similar funds;

(6) to invest, pending disbursement under a plan or project,

funds collected through assessments authorized under subsection (f), only in—

(A) obligations of the United States or an agency of

the United States;

(B) general obligations of a State or a political subdivision of a State;

(C) an interest-bearing account or certificate of deposit

of a bank that is a member of the Federal Reserve System;

or

(D) obligations fully guaranteed as to principal and

interest by the United States;

(7) to receive, investigate, and report to the Secretary complaints of violations of the order; and

(8) to recommend to the Secretary amendments to the

order.

(d) PLANS AND BUDGETS.—

(1) IN GENERAL.—The order shall provide that the Board

shall submit to the Secretary for approval any plan or project

of promotion, research, consumer information, or industry

information.

(2) BUDGETS.—The order shall require the Board to submit

to the Secretary for approval budgets on a fiscal year basis

of the anticipated expenses and disbursements of the Board

in the implementation of the order, including projected costs

of plans and projects of promotion, research, consumer information, and industry information.

(e) CONTRACTS AND AGREEMENTS.—

(1) IN GENERAL.—The order shall provide that the Board

may enter into contracts or agreements for the implementation

and carrying out of plans or projects of promotion, research,

consumer information, or industry information, including contracts with a processor organization, and for the payment of

the cost of the plans or projects with funds collected by the

Board under the order.

(2) REQUIREMENTS.—A contract or agreement under paragraph (1) shall provide that—

(A) the contracting party shall develop and submit

to the Board a plan or project, together with a budget

that shows the estimated costs to be incurred for the plan

or project;

(B) the plan or project shall become effective on the

approval of the Secretary; and

(C) the contracting party shall keep accurate records

of each transaction of the party, account for funds received

and expended, make periodic reports to the Board of activities conducted, and make such other reports as the Board

or the Secretary may require.

(3) PROCESSOR ORGANIZATIONS.—The order shall provide

that the Board may contract with processor organizations for

any services required in addition to the services described in

Records.

Reports.

Effective date.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1079

paragraph (1). The contract shall include provisions comparable

to the provisions required by paragraph (2).

(f) ASSESSMENTS.—

(1) PROCESSORS.—The order shall provide that each processor marketing popcorn in the United States or for export

shall, in the manner prescribed in the order, pay assessments

and remit the assessments to the Board.

(2) DIRECT MARKETERS.—A processor that markets popcorn

produced by the processor directly to consumers shall pay and

remit the assessments on the popcorn directly to the Board

in the manner prescribed in the order.

(3) RATE.—

(A) IN GENERAL.—The rate of assessment prescribed

in the order shall be a rate established by the Board

but not more than $.08 per hundredweight of popcorn.

(B) ADJUSTMENT OF RATE.—The order shall provide

that the Board, with the approval of the Secretary, may

raise or lower the rate of assessment annually up to a

maximum of $.08 per hundredweight of popcorn.

(4) USE OF ASSESSMENTS.—

(A) IN GENERAL.—Subject to subparagraphs (B) and

(C) and subsection (c)(5), the order shall provide that the

assessments collected shall be used by the Board—

(i) to pay expenses incurred in implementing and

administering the order, with provision for a reasonable reserve; and

(ii) to cover such administrative costs as are

incurred by the Secretary, except that the administrative costs incurred by the Secretary (other than any

legal expenses incurred to defend and enforce the

order) that may be reimbursed by the Board may not

exceed 15 percent of the projected annual revenues

of the Board.

(B) EXPENDITURES BASED ON SOURCE OF ASSESSMENTS.—In implementing plans and projects of promotion,

research, consumer information, and industry information,

the Board shall expend funds on—

(i) plans and projects for popcorn marketed in the

United States or Canada in proportion to the amount

of assessments collected on domestically marketed popcorn; and

(ii) plans and projects for exported popcorn in

proportion to the amount of assessments collected on

exported popcorn.

(C) NOTIFICATION.—If the administrative costs incurred

by the Secretary that are reimbursed by the Board exceed

10 percent of the projected annual revenues of the Board,

the Secretary shall notify as soon as practicable the

Committee on Agriculture of the House of Representatives

and the Committee on Agriculture, Nutrition, and Forestry

of the Senate.

(g) PROHIBITION ON USE OF FUNDS.—The order shall prohibit

any funds collected by the Board under the order from being used

to influence government action or policy, other than the use of

funds by the Board for the development and recommendation to

the Secretary of amendments to the order.
110 STAT. 1080 PUBLIC LAW 104–127—APR. 4, 1996

(h) BOOKS AND RECORDS OF THE BOARD.—The order shall

require the Board to—

(1) maintain such books and records (which shall be available to the Secretary for inspection and audit) as the Secretary

may prescribe;

(2) prepare and submit to the Secretary, from time to

time, such reports as the Secretary may prescribe; and

(3) account for the receipt and disbursement of all funds

entrusted to the Board.

(i) BOOKS AND RECORDS OF PROCESSORS.—

(1) MAINTENANCE AND REPORTING OF INFORMATION.—The

order shall require that each processor of popcorn for the market shall—

(A) maintain, and make available for inspection, such

books and records as are required by the order; and

(B) file reports at such time, in such manner, and

having such content as is prescribed in the order.

(2) USE OF INFORMATION.—The Secretary shall authorize

the use of information regarding processors that may be

accumulated under a law or regulation other than this subtitle

or a regulation issued under this subtitle. The information

shall be made available to the Secretary as appropriate for

the administration or enforcement of this subtitle, the order,

or any regulation issued under this subtitle.

(3) CONFIDENTIALITY.—

(A) IN GENERAL.—Subject to subparagraphs (B), (C),

and (D), all information obtained by the Secretary under

paragraphs (1) and (2) shall be kept confidential by all

officers, employees, and agents of the Board and the

Department.

(B) DISCLOSURE BY SECRETARY.—Information referred

to in subparagraph (A) may be disclosed if—

(i) the Secretary considers the information relevant;

(ii) the information is revealed in a suit or administrative hearing brought at the request of the Secretary,

or to which the Secretary or any officer of the United

States is a party; and

(iii) the information relates to the order.

(C) DISCLOSURE TO OTHER AGENCY OF FEDERAL GOVERNMENT.—

(i) IN GENERAL.—No information obtained under

the authority of this subtitle may be made available

to another agency or officer of the Federal Government

for any purpose other than the implementation of this

subtitle and any investigatory or enforcement activity

necessary for the implementation of this subtitle.

(ii) PENALTY.—A person who knowingly violates

this subparagraph shall, on conviction, be subject to

a fine of not more than $1,000 or to imprisonment

for not more than 1 year, or both, and if an officer,

employee, or agent of the Board or the Department,

shall be removed from office or terminated from

employment, as applicable.

(D) GENERAL STATEMENTS.—Nothing in this paragraph

prohibits—

Reports.

Reports.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1081

(i) the issuance of general statements based on

the reports of a number of persons subject to an order

or statistical data collected from the reports, if the

statements do not identify the information provided

by any person; or

(ii) the publication, by direction of the Secretary,

of the name of a person violating the order, together

with a statement of the particular provisions of the

order violated by the person.

(j) OTHER TERMS AND CONDITIONS.—The order shall contain

such other terms and conditions, consistent with this subtitle, as

are necessary to effectuate this subtitle, including regulations relating to the assessment of late payment charges.

SEC. 576. REFERENDA.

(a) INITIAL REFERENDUM.—

(1) IN GENERAL.—Within the 60-day period immediately

preceding the effective date of an order, as provided in section

574(b)(3), the Secretary shall conduct a referendum among

processors who, during a representative period as determined

by the Secretary, have been engaged in processing, for the

purpose of ascertaining whether the order shall go into effect.

(2) APPROVAL OF ORDER.—The order shall become effective,

as provided in section 574(b), only if the Secretary determines

that the order has been approved by not less than a majority

of the processors voting in the referendum and if the majority

processed more than 50 percent of the popcorn certified as

having been processed, during the representative period, by

the processors voting.

(b) ADDITIONAL REFERENDA.—

(1) IN GENERAL.—Not earlier than 3 years after the effective

date of an order approved under subsection (a), on the request

of the Board or a representative group of processors, as

described in paragraph (2), the Secretary may conduct additional referenda to determine whether processors favor the

suspension or termination of the order.

(2) REPRESENTATIVE GROUP OF PROCESSORS.—An additional

referendum on an order shall be conducted if the referendum

is requested by 30 percent or more of the number of processors

who, during a representative period as determined by the Secretary, have been engaged in processing.

(3) DISAPPROVAL OF ORDER.—If the Secretary determines,

in a referendum conducted under paragraph (1), that suspension or termination of the order is favored by at least 2⁄3

of the processors voting in the referendum, the Secretary shall—

(A) suspend or terminate, as appropriate, collection

of assessments under the order not later than 180 days

after the date of determination; and

(B) suspend or terminate the order, as appropriate,

in an orderly manner as soon as practicable after the

date of determination.

(c) COSTS OF REFERENDUM.—The Secretary shall be reimbursed

from assessments collected by the Board for any expenses incurred

by the Secretary in connection with the conduct of any referendum

under this section.

Termination

date.

7 USC 7485.
110 STAT. 1082 PUBLIC LAW 104–127—APR. 4, 1996

(d) METHOD OF CONDUCTING REFERENDUM.—Subject to this

section, a referendum conducted under this section shall be conducted in such manner as is determined by the Secretary.

(e) CONFIDENTIALITY OF BALLOTS AND OTHER INFORMATION.— (1) IN GENERAL.—The ballots and other information or

reports that reveal or tend to reveal the vote of any processor,

or any business operation of a processor, shall be considered

to be strictly confidential and shall not be disclosed.

(2) PENALTY FOR VIOLATIONS.—An officer or employee of

the Department who knowingly violates paragraph (1) shall

be subject to the penalties described in section 575(i)(3)(C)(ii).

SEC. 577. PETITION AND REVIEW.

(a) PETITION.— (1) IN GENERAL.—A person subject to an order may file

with the Secretary a petition—

(A) stating that the order, a provision of the order,

or an obligation imposed in connection with the order is

not established in accordance with law; and

(B) requesting a modification of the order or obligation

or an exemption from the order or obligation.

(2) STATUTE OF LIMITATIONS.—A petition under paragraph

(1) concerning an obligation may be filed not later than 2

years after the date of imposition of the obligation.

(3) HEARINGS.—The petitioner shall be given the opportunity for a hearing on a petition filed under paragraph (1),

in accordance with regulations issued by the Secretary.

(4) RULING.—After a hearing under paragraph (3), the Secretary shall issue a ruling on the petition that is the subject

of the hearing, which shall be final if the ruling is in accordance

with applicable law.

(b) REVIEW.— (1) COMMENCEMENT OF ACTION.—The district court of the

United States for any district in which a person who is a

petitioner under subsection (a) resides or carries on business

shall have jurisdiction to review a ruling on the petition, if

the person files a complaint not later than 20 days after the

date of issuance of the ruling under subsection (a)(4).

(2) PROCESS.—Service of process in a proceeding under

paragraph (1) may be made on the Secretary by delivering

a copy of the complaint to the Secretary.

(3) REMANDS.—If the court determines, under paragraph

(1), that a ruling issued under subsection (a)(4) is not in accordance with applicable law, the court shall remand the matter

to the Secretary with directions—

(A) to make such ruling as the court shall determine

to be in accordance with law; or

(B) to take such further proceedings as, in the opinion

of the court, the law requires.

(c) ENFORCEMENT.—The pendency of proceedings instituted

under subsection (a) may not impede, hinder, or delay the Secretary

or the Attorney General from taking action under section 578.

SEC. 578. ENFORCEMENT.

(a) IN GENERAL.—The Secretary may issue an enforcement

order to restrain or prevent any person from violating an order

or regulation issued under this subtitle and may assess a civil

penalty of not more than $1,000 for each violation of the enforce7 USC 7487.

Courts.

7 USC 7486.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1083

ment order, after an opportunity for an administrative hearing,

if the Secretary determines that the administration and enforcement

of the order and this subtitle would be adequately served by such

a procedure.

(b) JURISDICTION.—The district courts of the United States

are vested with jurisdiction specifically to enforce, and to prevent

and restrain any person from violating, an order or regulation

issued under this subtitle.

(c) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized

to be brought under this section shall be referred to the Attorney

General for appropriate action.

SEC. 579. INVESTIGATIONS AND POWER TO SUBPOENA.

(a) INVESTIGATIONS.—The Secretary may make such investigations as the Secretary considers necessary—

(1) for the effective administration of this subtitle; and

(2) to determine whether any person subject to this subtitle

has engaged, or is about to engage, in an act that constitutes

or will constitute a violation of this subtitle or of an order

or regulation issued under this subtitle.

(b) OATHS, AFFIRMATIONS, AND SUBPOENAS.—For the purpose

of an investigation under subsection (a), the Secretary may administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence, and require the production of

any records that are relevant to the inquiry. The attendance of

witnesses and the production of records may be required from

any place in the United States.

(c) AID OF COURTS.—

(1) REQUEST.—In the case of contumacy by, or refusal to

obey a subpoena issued to, any person, the Secretary may

request the aid of any court of the United States within the

jurisdiction of which the investigation or proceeding is carried

on, or where the person resides or carries on business, in

requiring the attendance and testimony of the person and the

production of records.

(2) ENFORCEMENT ORDER OF THE COURT.—The court may

issue an enforcement order requiring the person to appear

before the Secretary to produce records or to give testimony

concerning the matter under investigation.

(3) CONTEMPT.—A failure to obey an enforcement order

of the court under paragraph (2) may be punished by the

court as a contempt of the court.

(4) PROCESS.—Process in a case under this subsection may

be served in the judicial district in which the person resides

or carries on business or wherever the person may be found.

SEC. 580. RELATION TO OTHER PROGRAMS.

Nothing in this subtitle preempts or supersedes any other

program relating to popcorn promotion organized and operated

under the laws of the United States or any State.

SEC. 581. REGULATIONS.

The Secretary may issue such regulations as are necessary

to carry out this subtitle.

SEC. 582. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as are

necessary to carry out this subtitle. Amounts made available under

7 USC 7491.

7 USC 7490.

7 USC 7489.

7 USC 7488.

Courts.
110 STAT. 1084 PUBLIC LAW 104–127—APR. 4, 1996

this section or otherwise made available to the Department, and

amounts made available under any other marketing or promotion

order, may not be used to pay any administrative expense of the

Board.

Subtitle F—Miscellaneous

SEC. 591. MAINTENANCE OF RECORDS FOR HONEY PROMOTION PROGRAM.

Section 9(f) of the Honey Research, Promotion, and Consumer

Information Act (7 U.S.C. 4608(f)) is amended by inserting ‘‘producers,’’ after ‘‘importers,’’.

TITLE VI—CREDIT

Subtitle A—Farm Ownership Loans

SEC. 601. LIMITATION ON DIRECT FARM OWNERSHIP LOANS.

Section 302 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1922) is amended by striking subsection (b) and

inserting the following:

‘‘(b) DIRECT LOANS.—

‘‘(1) IN GENERAL.—Subject to paragraph (3), the Secretary

may make a direct loan under this subtitle only to a farmer

or rancher who has operated a farm or ranch for not less

than 3 years and—

‘‘(A) is a qualified beginning farmer or rancher;

‘‘(B) has not received a previous direct farm ownership

loan made under this subtitle; or

‘‘(C) has not received a direct farm ownership loan

under this subtitle more than 10 years before the date

the new loan would be made.

‘‘(2) YOUTH LOANS.—The operation of an enterprise by a

youth under section 311(b) shall not be considered the operation

of a farm or ranch for purposes of paragraph (1).

‘‘(3) TRANSITION RULE.—

‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and

(C), the Secretary may make a direct loan under this subtitle to a farmer or rancher who has a direct loan outstanding under this subtitle on the date of enactment of this

paragraph.

‘‘(B) LESS THAN 5 YEARS.—If, as of the date of enactment of this paragraph, a farmer or rancher has had a

direct loan outstanding under this subtitle for less than

5 years, the Secretary shall not make a loan to the farmer

or rancher under subparagraph (A) after the date that

is 10 years after the date of enactment of this paragraph.

‘‘(C) 5 YEARS OR MORE.—If, as of the date of enactment

of this paragraph, a farmer or rancher has had a direct

loan outstanding under this subtitle for 5 years or more,

the Secretary shall not make a loan to the farmer or

rancher under subparagraph (A) after the date that is

5 years after the date of enactment of this paragraph.’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1085

SEC. 602. PURPOSES OF LOANS.

(a) IN GENERAL.—Section 303 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1923) is amended to read as

follows:

‘‘SEC. 303. PURPOSES OF LOANS.

‘‘(a) ALLOWED PURPOSES.— ‘‘(1) DIRECT LOANS.—A farmer or rancher may use a direct

loan made under this subtitle only for—

‘‘(A) acquiring or enlarging a farm or ranch;

‘‘(B) making capital improvements to a farm or ranch;

‘‘(C) paying loan closing costs related to acquiring,

enlarging, or improving a farm or ranch; or

‘‘(D) paying for activities to promote soil and water

conservation and protection described in section 304 on

a farm or ranch.

‘‘(2) GUARANTEED LOANS.—A farmer or rancher may use

a loan guaranteed under this subtitle only for—

‘‘(A) acquiring or enlarging a farm or ranch;

‘‘(B) making capital improvements to a farm or ranch;

‘‘(C) paying loan closing costs related to acquiring,

enlarging, or improving a farm or ranch;

‘‘(D) paying for activities to promote soil and water

conservation and protection described in section 304 on

a farm or ranch; or

‘‘(E) refinancing indebtedness.

‘‘(b) PREFERENCES.—In making or guaranteeing a loan under

this subtitle for purchase of a farm or ranch, the Secretary shall

give preference to a person who—

‘‘(1) has a dependent family;

‘‘(2) to the extent practicable, is able to make an initial

down payment on the farm or ranch; or

‘‘(3) is an owner of livestock or farm or ranch equipment

that is necessary to successfully carry out farming or ranching

operations.

‘‘(c) HAZARD INSURANCE REQUIREMENT.—

‘‘(1) IN GENERAL.—After the Secretary makes the determination required by paragraph (2), the Secretary may not

make a loan to a farmer or rancher under this subtitle unless

the farmer or rancher has, or agrees to obtain, hazard insurance

on any real property to be acquired or improved with the

loan.

‘‘(2) DETERMINATION.—Not later than 180 days after the

date of enactment of this subsection, the Secretary shall determine the appropriate level of insurance to be required under

paragraph (1).’’.

(b) TRANSITIONAL PROVISION.—Section 303(c)(1) of the Consolidated Farm and Rural Development Act shall not apply until the

Secretary of Agriculture makes the determination required by section 303(c)(2) of the Act.

SEC. 603. SOIL AND WATER CONSERVATION AND PROTECTION.

Section 304 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1924) is amended—

(1) by striking subsections (b) and (c);

(2) by striking ‘‘SEC. 304. (a)(1) Loans’’ and inserting the

following:

7 USC 1923 note.
110 STAT. 1086 PUBLIC LAW 104–127—APR. 4, 1996

‘‘SEC. 304. SOIL AND WATER CONSERVATION AND PROTECTION.

‘‘(a) IN GENERAL.—Loans’’;

(3) by striking ‘‘(2) In making or insuring’’ and inserting

the following:

‘‘(b) PRIORITY.—In making or guaranteeing’’;

(4) by striking ‘‘(3) The Secretary’’ and inserting the following:

‘‘(c) LOAN MAXIMUM.—The Secretary’’;

(5) by redesignating subparagraphs (A) through (F) of subsection (a) (as amended by paragraph (2)) as paragraphs (1)

through (6), respectively; and

(6) by redesignating subparagraphs (A) and (B) of subsection (c) (as amended by paragraph (4)) as paragraphs (1)

and (2), respectively.

SEC. 604. INTEREST RATE REQUIREMENTS.

Section 307(a)(3) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1927(a)(3)) is amended—

(1) in subparagraph (B), by inserting ‘‘subparagraph (D)

and in’’ after ‘‘Except as provided in’’; and

(2) by adding at the end the following:

‘‘(D) JOINT FINANCING ARRANGEMENT.—If a direct farm

ownership loan is made under this subtitle as part of

a joint financing arrangement and the amount of the direct

farm ownership loan does not exceed 50 percent of the

total principal amount financed under the arrangement,

the interest rate on the direct farm ownership loan shall

be at least 4 percent annually.’’.

SEC. 605. INSURANCE OF LOANS.

Section 308 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1928) is amended to read as follows:

‘‘SEC. 308. FULL FAITH AND CREDIT.

‘‘(a) IN GENERAL.—A contract of insurance or guarantee

executed by the Secretary under this title shall be an obligation

supported by the full faith and credit of the United States.

‘‘(b) CONTESTABILITY.—A contract of insurance or guarantee

executed by the Secretary under this title shall be incontestable

except for fraud or misrepresentation that the lender or any

holder—

‘‘(1) has actual knowledge of at the time the contract or

guarantee is executed; or

‘‘(2) participates in or condones.’’.

SEC. 606. LOANS GUARANTEED.

Section 309(h) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(h)) is amended by adding at the end

the following:

‘‘(4) MAXIMUM GUARANTEE OF 90 PERCENT.—Except as provided in paragraphs (5) and (6), a loan guarantee under this

title shall be for not more than 90 percent of the principal

and interest due on the loan.

‘‘(5) REFINANCED LOANS GUARANTEED AT 95 PERCENT.—The

Secretary shall guarantee 95 percent of—

‘‘(A) in the case of a loan that solely refinances a

direct loan made under this title, the principal and interest

due on the loan on the date of the refinancing; or
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1087

‘‘(B) in the case of a loan that is used for multiple

purposes, the portion of the loan that refinances the principal and interest due on a direct loan made under this

title that is outstanding on the date the loan is guaranteed.

‘‘(6) BEGINNING FARMER LOANS GUARANTEED UP TO 95 PERCENT.—The Secretary may guarantee not more than 95 percent

of—

‘‘(A) a farm ownership loan for acquiring a farm or

ranch to a borrower who is participating in the down payment loan program under section 310E; or

‘‘(B) an operating loan to a borrower who is participating in the down payment loan program under section 310E

that is made during the period that the borrower has

a direct loan outstanding under this subtitle for acquiring

a farm or ranch.’’.

Subtitle B—Operating Loans

SEC. 611. LIMITATION ON DIRECT OPERATING LOANS.

(a) IN GENERAL.—Section 311 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1941) is amended by striking

subsection (c) and inserting the following:

‘‘(c) DIRECT LOANS.—

‘‘(1) IN GENERAL.—Subject to paragraph (3), the Secretary

may make a direct loan under this subtitle only to a farmer

or rancher who—

‘‘(A) is a qualified beginning farmer or rancher who

has not operated a farm or ranch, or who has operated

a farm or ranch for not more than 5 years;

‘‘(B) has not received a previous direct operating loan

made under this subtitle; or

‘‘(C) has received a previous direct operating loan made

under this subtitle during 6 or fewer years.

‘‘(2) YOUTH LOANS.—In this subsection, the term ‘direct

operating loan’ shall not include a loan made to a youth under

subsection (b).

‘‘(3) TRANSITION RULE.—If, as of the date of enactment

of this paragraph, a farmer or rancher has received a direct

operating loan under this subtitle during each of 4 or more

previous years, the borrower shall be eligible to receive a direct

operating loan under this subtitle during 3 additional years

after the date of enactment of this paragraph.’’.

(b) YOUTH ENTERPRISES NOT FARMING OR RANCHING.—Section

311(b) of the Consolidated Farm and Rural Development Act (7

U.S.C. 1941(b)) is amended by adding at the end the following:

‘‘(4) YOUTH ENTERPRISES NOT FARMING OR RANCHING.—The

operation of an enterprise by a youth under this subsection

shall not be considered the operation of a farm or ranch under

this title.’’.

SEC. 612. PURPOSES OF OPERATING LOANS.

(a) IN GENERAL.—Section 312 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1942) is amended to read as

follows:
110 STAT. 1088 PUBLIC LAW 104–127—APR. 4, 1996

‘‘SEC. 312. PURPOSES OF LOANS.

‘‘(a) IN GENERAL.—A direct loan may be made under this subtitle only for—

‘‘(1) paying the costs incident to reorganizing a farm or

ranch for more profitable operation;

‘‘(2) purchasing livestock, poultry, or farm or ranch equipment;

‘‘(3) purchasing feed, seed, fertilizer, insecticide, or farm

or ranch supplies, or to meet other essential farm or ranch

operating expenses, including cash rent;

‘‘(4) financing land or water development, use, or conservation;

‘‘(5) paying loan closing costs;

‘‘(6) assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch

to comply with a standard promulgated under section 6 of

the Occupational Safety and Health Act of 1970 (29 U.S.C.

655) or a standard adopted by a State under a plan approved

under section 18 of the Act (29 U.S.C. 667), if the Secretary

determines that without assistance under this paragraph the

farmer or rancher is likely to suffer substantial economic injury

in complying with the standard;

‘‘(7) training a limited-resource borrower receiving a loan

under section 310D in maintaining records of farming and

ranching operations;

‘‘(8) training a borrower under section 359;

‘‘(9) refinancing the indebtedness of a borrower, if the borrower—

‘‘(A) has refinanced a loan under this subtitle not more

than 4 times previously; and

‘‘(B)(i) is a direct loan borrower under this title at

the time of the refinancing and has suffered a qualifying

loss because of a natural disaster declared by the Secretary

under this title or a major disaster or emergency designated

by the President under the Robert T. Stafford Disaster

Relief and Emergency Assistance Act (42 U.S.C. 5121 et

seq.); or

‘‘(ii) is refinancing a debt obtained from a creditor

other than the Secretary; or

‘‘(10) providing other farm, ranch, or home needs, including

family subsistence.

‘‘(b) GUARANTEED LOANS.—A loan may be guaranteed under

this subtitle only for—

‘‘(1) paying the costs incident to reorganizing a farm or

ranch for more profitable operation;

‘‘(2) purchasing livestock, poultry, or farm or ranch equipment;

‘‘(3) purchasing feed, seed, fertilizer, insecticide, or farm

or ranch supplies, or to meet other essential farm or ranch

operating expenses, including cash rent;

‘‘(4) financing land or water development, use, or conservation;

‘‘(5) refinancing indebtedness;

‘‘(6) paying loan closing costs;

‘‘(7) assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch

to comply with a standard promulgated under section 6 of
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1089

the Occupational Safety and Health Act of 1970 (29 U.S.C.

655) or a standard adopted by a State under a plan approved

under section 18 of the Act (29 U.S.C. 667), if the Secretary

determines that without assistance under this paragraph the

farmer or rancher is likely to suffer substantial economic injury

due to compliance with the standard;

‘‘(8) training a borrower under section 359; or

‘‘(9) providing other farm, ranch, or home needs, including

family subsistence.

‘‘(c) HAZARD INSURANCE REQUIREMENT.—

‘‘(1) IN GENERAL.—After the Secretary makes the determination required by paragraph (2), the Secretary may not

make a loan to a farmer or rancher under this subtitle unless

the farmer or rancher has, or agrees to obtain, hazard insurance

on the property to be acquired with the loan.

‘‘(2) DETERMINATION.—Not later than 180 days after the

date of enactment of this paragraph, the Secretary shall determine the appropriate level of insurance to be required by paragraph (1).

‘‘(d) PRIVATE RESERVE.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of

this title, the Secretary may reserve a portion of any loan

made under this subtitle to be placed in an unsupervised bank

account that may be used at the discretion of the borrower

for the basic family needs of the borrower and the immediate

family of the borrower.

‘‘(2) LIMIT ON SIZE OF THE RESERVE.—The size of the reserve

shall not exceed the least of—

‘‘(A) 10 percent of the loan;

‘‘(B) $5,000; or

‘‘(C) the amount needed to provide for the basic family

needs of the borrower and the borrower’s immediate family

for 3 calendar months.’’.

(b) TRANSITIONAL PROVISION.—Section 312(c)(1) of the Consolidated Farm and Rural Development Act shall not apply until the

Secretary of Agriculture makes the determination required by section 312(c)(2) of the Act.

SEC. 613. PARTICIPATION IN LOANS.

Section 315 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1945) is repealed.

SEC. 614. LINE-OF-CREDIT LOANS.

Section 316 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1946) is amended by adding at the end the following:

‘‘(c) LINE-OF-CREDIT LOANS.—

‘‘(1) IN GENERAL.—A loan made or guaranteed by the Secretary under this subtitle may be in the form of a line-ofcredit loan.

‘‘(2) TERM.—A line-of-credit loan under paragraph (1) shall

terminate not later than 5 years after the date that the loan

is made or guaranteed.

‘‘(3) ELIGIBILITY.—For purposes of determining eligibility

for a farm operating loan under this subtitle, each year during

which a farmer or rancher takes an advance or draws on

a line-of-credit loan the farmer or rancher shall be considered

to have received an operating loan for 1 year.

7 USC 1942 note.
110 STAT. 1090 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(4) TERMINATION OF DELINQUENT LOANS.—If a borrower

does not pay an installment on a line-of-credit loan on schedule,

the borrower may not take an advance or draw on the lineof-credit, unless the Secretary determines that—

‘‘(A) the borrower’s failure to pay on schedule was

due to unusual conditions that the borrower could not

control; and

‘‘(B) the borrower will reduce the line-of-credit balance

to the scheduled level at the end of—

‘‘(i) the production cycle; or

‘‘(ii) the marketing of the borrower’s agricultural

products.

‘‘(5) AGRICULTURAL COMMODITIES.—A line-of-credit loan

may be used to finance the production or marketing of an

agricultural commodity that—

‘‘(A) is eligible for a price support program of the

Department of Agriculture; or

‘‘(B) was eligible for a price support program of the

Department of Agriculture on the day before the date of

enactment of the Federal Agriculture Improvement and

Reform Act of 1996.’’.

SEC. 615. INSURANCE OF OPERATING LOANS.

Section 317 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1947) is repealed.

SEC. 616. SPECIAL ASSISTANCE FOR BEGINNING FARMERS AND

RANCHERS.

(a) IN GENERAL.—Section 318 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1948) is repealed.

(b) CONFORMING AMENDMENT.—Section 310F of the Consolidated Farm and Rural Development Act (7 U.S.C. 1936) is repealed.

SEC. 617. LIMITATION ON PERIOD FOR WHICH BORROWERS ARE

ELIGIBLE FOR GUARANTEED ASSISTANCE.

Section 319 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1949) is amended by striking subsection (b) and

inserting the following:

‘‘(b) LIMITATION ON PERIOD BORROWERS ARE ELIGIBLE FOR

GUARANTEED ASSISTANCE.—

‘‘(1) GENERAL RULE.—Subject to paragraph (2), the Secretary shall not guarantee a loan under this subtitle for a

borrower for any year after the 15th year that a loan is made

to, or a guarantee is provided with respect to, the borrower

under this subtitle.

‘‘(2) TRANSITION RULE.—If, as of October 28, 1992, a farmer

or rancher has received a direct or guaranteed operating loan

under this subtitle during each of 10 or more previous years,

the borrower shall be eligible to receive a guaranteed operating

loan under this subtitle during 5 additional years after October

28, 1992.’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1091

Subtitle C—Emergency Loans

SEC. 621. HAZARD INSURANCE REQUIREMENT.

(a) IN GENERAL.—Section 321 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1961) is amended by striking

subsection (b) and inserting the following:

‘‘(b) HAZARD INSURANCE REQUIREMENT.—

‘‘(1) IN GENERAL.—After the Secretary makes the determination required by paragraph (2), the Secretary may not

make a loan to a farmer or rancher under this subtitle to

cover a property loss unless the farmer or rancher had hazard

insurance that insured the property at the time of the loss.

‘‘(2) DETERMINATION.—Not later than 180 days after the

date of enactment of this paragraph, the Secretary shall determine the appropriate level of insurance to be required under

paragraph (1).’’.

(b) TRANSITIONAL PROVISION.—Section 321(b)(1) of the Consolidated Farm and Rural Development Act shall not apply until the

Secretary of Agriculture makes the determination required by section 321(b)(2) of the Act.

SEC. 622. NARROWING OF AUTHORITY TO WAIVE APPLICATION OF

THE CREDIT ELSEWHERE TEST.

The second proviso of section 322(b) of the Consolidated Farm

and Rural Development Act (7 U.S.C. 1962(b)) is amended by striking ‘‘$300,000 or less’’ and inserting ‘‘$100,000 or less’’.

SEC. 623. LINKING OF EMERGENCY LOANS FOR CROP OR LIVESTOCK

CHANGES TO NATURAL DISASTERS.

Section 323 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1963) is amended by inserting ‘‘that are necessitated

by a natural disaster, major disaster, or emergency and that are’’

after ‘‘livestock changes’’.

SEC. 624. MAXIMUM EMERGENCY LOAN INDEBTEDNESS.

Section 324 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1964) is amended by striking ‘‘SEC. 324. (a) No

loan’’ and all that follows through the end of subsection (a) and

inserting the following:

‘‘SEC. 324. TERMS OF LOANS.

‘‘(a) MAXIMUM AMOUNT OF LOAN.—The Secretary may not make

a loan under this subtitle to a borrower who has suffered a loss

in an amount that—

‘‘(1) exceeds the actual loss caused by a disaster; or

‘‘(2) would cause the total indebtedness of the borrower

under this subtitle to exceed $500,000.’’.

SEC. 625. ESTABLISHMENT OF DATE FOR EMERGENCY LOAN ASSET

VALUATION.

The last sentence of section 324(d) of the Consolidated Farm

and Rural Development Act (7 U.S.C. 1964(d)) is amended by striking ‘‘value the assets’’ and all that follows through the period

and inserting ‘‘establish the value of the assets as of the day

before the occurrence of the natural disaster, major disaster, or

emergency that is the basis for a request for assistance under

7 USC 1961 note.
110 STAT. 1092 PUBLIC LAW 104–127—APR. 4, 1996

this subtitle or the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).’’.

SEC. 626. INSURANCE OF EMERGENCY LOANS.

Section 328 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1968) is repealed.

Subtitle D—Administrative Provisions

SEC. 631. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS.

Section 331 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1981) is amended by adding at the end the following:

‘‘(d) TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS.—

‘‘(1) DEFINITIONS.—In this subsection:

‘‘(A) ELIGIBLE FINANCIAL INSTITUTION.—The term

‘eligible financial institution’ means a financial institution

with substantial experience in farm, ranch, or aquaculture

lending that is regulated by the Comptroller of the Currency, the Farm Credit Administration, or a similar regulatory body.

‘‘(B) PILOT PROJECT.—The term ‘pilot project’ includes

services related to borrower loan documentation, financial

information, credit history, and appraisals of real estate

and chattel.

‘‘(2) AUTHORITY.—The Secretary may enter into a contract

with an eligible financial institution for servicing a farmer

program loan under this title, including 1 or more pilot projects.

‘‘(3) REPORT.—Not later than September 30, 1997, and

September 30 of each year thereafter, the Secretary shall report

to Congress on—

‘‘(A) the Secretary’s experience in using contracts under

paragraph (2); and

‘‘(B) recommendations for legislation related to this

subsection, if any.

‘‘(4) SAVINGS CLAUSE.—Nothing in this subsection shall

limit the authority of the Secretary or an eligible financial

institution to contract for any services under this Act or any

other law.

‘‘(5) SUNSET PROVISION.—This subsection shall be effective

until September 30, 2002.’’.

SEC. 632. USE OF COLLECTION AGENCIES.

Section 331 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1981) (as amended by section 631) is amended by

adding at the end the following:

‘‘(e) PRIVATE COLLECTION AGENCY.—The Secretary may use

a private collection agency to collect a claim or obligation described

in subsection (b)(5).’’.

SEC. 633. NOTICE OF LOAN SERVICE PROGRAMS.

Section 331D(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981d(a)) is amended by striking ‘‘180 days

delinquent in’’ and inserting ‘‘90 days past due on’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1093

SEC. 634. CLARIFICATION OF WRITTEN STATEMENT REQUIRED OF

BORROWERS.

Section 333(1)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983(1)(B)) is amended by striking ‘‘a written

statement showing the applicant’s net worth’’ and inserting ‘‘an

appropriate written financial statement’’.

SEC. 635. ANNUAL REVIEW OF THE CREDIT HISTORY, BUSINESS OPERATION, AND CONTINUED ELIGIBILITY OF A BORROWER.

(a) IN GENERAL.—Section 333 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1983) is amended—

(1) by redesignating paragraphs (2), (3), and (4) as paragraphs (3), (4), and (5), respectively; and

(2) by inserting after paragraph (1) the following:

‘‘(2) except with respect to a loan under section 306, 310B,

or 314, the county or area committee established under section

8(b)(5)(B) of the Soil Conservation and Domestic Allotment

Act (16 U.S.C. 590h(b)(5)(B)) to certify in writing—

‘‘(A) that an annual review of the credit history and

business operation of the borrower has been conducted;

and

‘‘(B) that a review of the continued eligibility of the

borrower for the loan has been conducted;’’.

(b) CONFORMING AMENDMENT.—The third sentence of section

310B(a) of the Consolidated Farm and Rural Development Act

(7 U.S.C. 1932(a)) is amended by striking ‘‘(3) of’’ and inserting

‘‘(4) of’’.

SEC. 636. EXTENSION OF VETERANS PREFERENCE.

Section 333 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1983) (as amended by section 635(a)) is amended

by striking paragraph (5) and inserting the following:

‘‘(5) the application of a person who is a veteran of any

war, as defined in section 101(12) of title 38, United States

Code, for a loan under subtitle A or B to be given preference

over a similar application from a person who is not a veteran

of any war, if the applications are on file in a county or

area office at the same time.’’.

SEC. 637. VERIFICATION OF THE CREDIT ELSEWHERE TEST.

Section 333A(f)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983a(f)(4)) is amended—

(1) by striking ‘‘(4) With’’ and all that follows through

‘‘seasoned’’ and inserting the following:

‘‘(4) VERIFICATION.—

‘‘(A) IN GENERAL.—The Secretary shall provide a

prospectus of a seasoned’’; and

(2) by striking ‘‘If the Secretary’’ and inserting the following:

‘‘(B) NOTIFICATION.—The Secretary shall notify each

borrower of a loan that a prospectus has been provided

to a lender under subparagraph (A).

‘‘(C) CREDIT EXTENDED.—If the Secretary’’.

SEC. 638. SALE OF PROPERTY.

Section 335 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1985) is amended—
110 STAT. 1094 PUBLIC LAW 104–127—APR. 4, 1996

(1) in subsection (b), by striking ‘‘subsection (e)’’ and inserting ‘‘subsections (c) and (e)’’;

(2) by striking subsection (c) and inserting the following:

‘‘(c) SALE OF PROPERTY.—

‘‘(1) IN GENERAL.—Subject to this subsection and subsection

(e)(1)(A), the Secretary shall offer to sell real property that

is acquired by the Secretary under this title using the following

order and method of sale:

‘‘(A) ADVERTISEMENT.—Not later than 15 days after

acquiring real property, the Secretary shall publicly advertise the property for sale.

‘‘(B) BEGINNING FARMER OR RANCHER.—

‘‘(i) IN GENERAL.—Not later than 75 days after

acquiring real property, the Secretary shall offer to

sell the property to a qualified beginning farmer or

rancher at current market value based on a current

appraisal.

‘‘(ii) RANDOM SELECTION.—If more than 1 qualified

beginning farmer or rancher offers to purchase the

property, the Secretary shall select between the qualified applicants on a random basis.

‘‘(iii) APPEAL OF RANDOM SELECTION.—A random

selection or denial by the Secretary of a beginning

farmer or rancher for farm inventory property under

this subparagraph shall be final and not administratively appealable.

‘‘(C) PUBLIC SALE.—If no acceptable offer is received

from a qualified beginning farmer or rancher under

subparagraph (B) not later than 75 days after acquiring

the real property, the Secretary shall, not later than 30

days after the 75-day period, sell the property after public

notice at a public sale, and, if no acceptable bid is received,

by negotiated sale, at the best price obtainable.

‘‘(2) TRANSITIONAL RULES.—

‘‘(A) PREVIOUS LEASE.—In the case of real property

acquired prior to the date of enactment of this subparagraph that the Secretary leased prior to the date of enactment of this subparagraph, not later than 60 days after

the lease expires, the Secretary shall offer to sell the property in accordance with paragraph (1).

‘‘(B) PREVIOUSLY IN INVENTORY.—In the case of real

property acquired prior to the date of enactment of this

subparagraph that the Secretary has not leased, not later

than 60 days after the date of enactment of this subparagraph, the Secretary shall offer to sell the property in

accordance with paragraph (1).

‘‘(3) INTEREST.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), any

conveyance of real property under this subsection shall

include all of the interest of the United States in the

property, including mineral rights.

‘‘(B) CONSERVATION.—The Secretary may for conservation purposes grant or sell an easement, restriction, development right, or similar legal right to real property to

a State, a political subdivision of a State, or a private

nonprofit organization separately from the underlying fee

or other rights to the property owned by the United States.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1095

‘‘(4) OTHER LAW.—The Federal Property and Administrative

Services Act of 1949 (40 U.S.C. 471 et seq.) shall not apply

to any exercise of authority under this title.

‘‘(5) LEASE OF PROPERTY.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the

Secretary may not lease any real property acquired under

this title.

‘‘(B) EXCEPTION.—

‘‘(i) BEGINNING FARMER OR RANCHER.—The Secretary may lease or contract to sell to a beginning

farmer or rancher a farm or ranch acquired by the

Secretary under this title if the beginning farmer or

rancher qualifies for a credit sale or direct farm ownership loan under subtitle A but credit sale authority

for loans or direct farm ownership loan funds, respectively, are not available.

‘‘(ii) TERM.—The term of a lease or contract to

sell to a beginning farmer or rancher under clause

(i) shall be until the earlier of—

‘‘(I) the date that is 18 months after the date

of the lease or sale; or

‘‘(II) the date that direct farm ownership loan

funds or credit sale authority for loans becomes

available to the beginning farmer or rancher.

‘‘(iii) INCOME-PRODUCING CAPABILITY.—In determining the rental rate on real property leased under

this subparagraph, the Secretary shall consider the

income-producing capability of the property during the

term that the property is leased.

‘‘(6) EXPEDITED DETERMINATION.—

‘‘(A) IN GENERAL.—On the request of an applicant,

not later than 30 days after denial of the applicant’s

application, the appropriate State director shall provide

an expedited review and determination of whether the

applicant is a beginning farmer or rancher for the purpose

of acquiring farm inventory property.

‘‘(B) APPEAL.—The determination of a State Director

under subparagraph (A) shall be final and not administratively appealable.

‘‘(C) EFFECTS OF DETERMINATIONS.—

‘‘(i) IN GENERAL.—The Secretary shall maintain

statistical data on the number and results of determinations made under subparagraph (A) and the effect

of the determinations on—

‘‘(I) selling farm inventory property to beginning farmers and ranchers; and

‘‘(II) disposing of real property in inventory.

‘‘(ii) NOTIFICATION.—The Secretary shall notify the

Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition,

and Forestry of the Senate if the Secretary determines

that the review process under subparagraph (A) is

adversely affecting the selling of farm inventory property to beginning farmers or ranchers or the disposing

of real property in inventory.’’; and

(3) in subsection (e)—

(A) in paragraph (1)—

Records.
110 STAT. 1096 PUBLIC LAW 104–127—APR. 4, 1996

(i) by striking subparagraphs (A) through (C);

(ii) by redesignating subparagraphs (D) through

(G) as subparagraphs (A) through (D), respectively;

(iii) in subparagraph (A) (as redesignated by clause

(ii))—

(I) in clause (i)—

(aa) in the matter preceding subclause (I),

by striking ‘‘(G)’’ and inserting ‘‘(D)’’;

(bb) by striking subclause (I) and inserting

the following:

‘‘(I) the Secretary acquires property under this title that

is located within an Indian reservation; and’’;

(cc) in subclause (II), by striking ‘‘, and’’

at the end and inserting a semicolon; and

(dd) by striking subclause (III); and

(II) in clause (iii), by striking ‘‘The Secretary

shall’’ and all that follows through ‘‘of subparagraph (A),’’ and inserting ‘‘Not later than 90 days

after acquiring the property, the Secretary shall’’;

and

(iv) in subparagraph (D) (as redesignated by clause

(ii))—

(I) in clause (i), by striking ‘‘(D)’’ in the matter

following subclause (IV) and inserting ‘‘(A)’’;

(II) in clause (iii)(I), by striking ‘‘subparagraphs (C)(i), (C)(ii), and (D)’’ and inserting

‘‘subparagraph (A)’’; and

(III) by striking clause (v) and inserting the

following:

‘‘(v) FORECLOSURE PROCEDURES.—

‘‘(I) NOTICE TO BORROWER.—If an Indian borrower-owner does not voluntarily convey to the

Secretary real property described in clause (i), not

less than 30 days before a foreclosure sale of the

property, the Secretary shall provide the Indian

borrower-owner with the option of—

‘‘(aa) requiring the Secretary to assign the

loan and security instruments to the Secretary

of the Interior, if the Secretary of the Interior

agrees to an assignment releasing the Secretary of Agriculture from all further responsibility for collection of any amounts with

regard to the loan secured by the real property;

or

‘‘(bb) requiring the Secretary to assign the

loan and security instruments to the tribe having jurisdiction over the reservation in which

the real property is located, if the tribe agrees

to the assignment.

‘‘(II) NOTICE TO TRIBE.—If an Indian borrowerowner does not voluntarily convey to the Secretary

real property described in clause (i), not less than

30 days before a foreclosure sale of the property,

the Secretary shall provide written notice to the

Indian tribe that has jurisdiction over the reservation in which the real property is located of—

‘‘(aa) the sale;

Native

Americans.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1097

‘‘(bb) the fair market value of the property;

and

‘‘(cc) the requirements of this subparagraph.

‘‘(III) ASSUMED LOANS.—If an Indian tribe

assumes a loan under subclause (I)—

‘‘(aa) the Secretary shall not foreclose the

loan because of any default that occurred prior

to the date of the assumption;

‘‘(bb) the loan shall be for the lesser of

the outstanding principal and interest of the

loan or the fair market value of the property;

and

‘‘(cc) the loan shall be treated as though

the loan was made under Public Law 91–229

(25 U.S.C. 488 et seq.).’’;

(B) by striking paragraph (3);

(C) in paragraph (4)—

(i) by striking subparagraph (B);

(ii) in subparagraph (A)—

(I) in clause (i), by striking ‘‘(i)’’; and

(II) by redesignating clause (ii) as subparagraph (B); and

(iii) in subparagraph (B) (as redesignated by clause

(ii)(II)), by striking ‘‘clause (i)’’ and inserting ‘‘subparagraph (A)’’;

(D) by striking paragraphs (5), (6), and (9); and

(E) by redesignating paragraphs (4), (7), (8), and (10)

as paragraphs (3), (4), (5), and (6), respectively.

SEC. 639. EASEMENTS ON INVENTORIED PROPERTY.

Section 335(g) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1985(g)) is amended—

(1) in paragraph (1)—

(A) by striking ‘‘(g)(1) Subject to paragraphs (2) through

(5)’’ and inserting the following:

‘‘(g) EASEMENTS ON INVENTORIED PROPERTY.—

‘‘(1) IN GENERAL.—Subject to paragraph (2)’’; and

(B) by striking ‘‘, as determined’’ and all that follows

through ‘‘3801 et seq.)’’;

(2) by striking paragraph (2) and inserting the following:

‘‘(2) LIMITATION.—The Secretary shall not establish a wetland conservation easement on an inventoried property that—

‘‘(A) was cropland on the date the property entered

the inventory of the Secretary; or

‘‘(B) was used for farming at any time during the

period beginning on the date 5 years before the property

entered the inventory of the Secretary and ending on the

date the property entered the inventory of the Secretary.’’;

(3) by striking paragraphs (3), (4), (5), and (8);

(4) by striking ‘‘(6) The Secretary’’ and inserting the following:

‘‘(3) NOTIFICATION.—The Secretary’’; and

(5) by striking ‘‘(7) The appraised’’ and inserting the following:

‘‘(4) APPRAISED VALUE.—The appraised’’.
110 STAT. 1098 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 640. DEFINITIONS.

Section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)) is amended—

(1) in paragraph (11)—

(A) in the text preceding subparagraph (A), by striking

‘‘applicant—’’ and inserting ‘‘applicant, regardless of

whether the applicant is participating in a program under

section 310E—’’; and

(B) in subparagraph (F)—

(i) by striking ‘‘15 percent’’ and inserting ‘‘25 percent’’; and

(ii) by inserting before the semicolon at the end

the following: ‘‘, except that this subparagraph shall

not apply to a loan made or guaranteed under subtitle

B’’; and

(2) by adding at the end the following:

‘‘(12) DEBT FORGIVENESS.—

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

(B), the term ‘debt forgiveness’ means reducing or terminating a farmer program loan made or guaranteed under

this title, in a manner that results in a loss to the Secretary, through—

‘‘(i) writing down or writing off a loan under section

353;

‘‘(ii) compromising, adjusting, reducing, or charging-off a debt or claim under section 331;

‘‘(iii) paying a loss on a guaranteed loan under

section 357; or

‘‘(iv) discharging a debt as a result of bankruptcy.

‘‘(B) LOAN RESTRUCTURING.—The term ‘debt forgiveness’ does not include consolidation, rescheduling,

reamortization, or deferral.’’.

SEC. 641. AUTHORIZATION FOR LOANS.

Section 346 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1994) is amended—

(1) in the second sentence of subsection (a), by striking

‘‘with or without’’ and all that follows through ‘‘administration’’;

and

(2) by striking subsection (b) and inserting the following:

‘‘(b) AUTHORIZATION FOR LOANS.—

‘‘(1) IN GENERAL.—The Secretary may make or guarantee

loans under subtitles A and B from the Agricultural Credit

Insurance Fund provided for in section 309 in not more than

the following amounts:

‘‘(A) FISCAL YEAR 1996.—For fiscal year 1996,

$3,085,000,000, of which—

‘‘(i) $585,000,000 shall be for direct loans, of

which—

‘‘(I) $85,000,000 shall be for farm ownership

loans under subtitle A; and

‘‘(II) $500,000,000 shall be for operating loans

under subtitle B; and

‘‘(ii) $2,500,000,000 shall be for guaranteed loans,

of which—

‘‘(I) $600,000,000 shall be for guarantees of

farm ownership loans under subtitle A; and
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1099

‘‘(II) $1,900,000,000 shall be for guarantees

of operating loans under subtitle B.

‘‘(B) FISCAL YEAR 1997.—For fiscal year 1997,

$3,165,000,000, of which—

‘‘(i) $585,000,000 shall be for direct loans, of

which—

‘‘(I) $85,000,000 shall be for farm ownership

loans under subtitle A; and

‘‘(II) $500,000,000 shall be for operating loans

under subtitle B; and

‘‘(ii) $2,580,000,000 shall be for guaranteed loans,

of which—

‘‘(I) $630,000,000 shall be for guarantees of

farm ownership loans under subtitle A; and

‘‘(II) $1,950,000,000 shall be for guarantees

of operating loans under subtitle B.

‘‘(C) FISCAL YEAR 1998.—For fiscal year 1998,

$3,245,000,000, of which—

‘‘(i) $585,000,000 shall be for direct loans, of

which—

‘‘(I) $85,000,000 shall be for farm ownership

loans under subtitle A; and

‘‘(II) $500,000,000 shall be for operating loans

under subtitle B; and

‘‘(ii) $2,660,000,000 shall be for guaranteed loans,

of which—

‘‘(I) $660,000,000 shall be for guarantees of

farm ownership loans under subtitle A; and

‘‘(II) $2,000,000,000 shall be for guarantees

of operating loans under subtitle B.

‘‘(D) FISCAL YEAR 1999.—For fiscal year 1999,

$3,325,000,000, of which—

‘‘(i) $585,000,000 shall be for direct loans, of

which—

‘‘(I) $85,000,000 shall be for farm ownership

loans under subtitle A; and

‘‘(II) $500,000,000 shall be for operating loans

under subtitle B; and

‘‘(ii) $2,740,000,000 shall be for guaranteed loans,

of which—

‘‘(I) $690,000,000 shall be for guarantees of

farm ownership loans under subtitle A; and

‘‘(II) $2,050,000,000 shall be for guarantees

of operating loans under subtitle B.

‘‘(E) FISCAL YEAR 2000.—For fiscal year 2000,

$3,435,000,000, of which—

‘‘(i) $585,000,000 shall be for direct loans, of

which—

‘‘(I) $85,000,000 shall be for farm ownership

loans under subtitle A; and

‘‘(II) $500,000,000 shall be for operating loans

under subtitle B; and

‘‘(ii) $2,850,000,000 shall be for guaranteed loans,

of which—

‘‘(I) $750,000,000 shall be for guarantees of

farm ownership loans under subtitle A; and
110 STAT. 1100 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(II) $2,100,000,000 shall be for guarantees

of operating loans under subtitle B.

‘‘(F) FISCAL YEAR 2001.—For fiscal year 2001, $3,435,000,000, of which—

‘‘(i) $585,000,000 shall be for direct loans, of

which—

‘‘(I) $85,000,000 shall be for farm ownership

loans under subtitle A; and

‘‘(II) $500,000,000 shall be for operating loans

under subtitle B; and

‘‘(ii) $2,850,000,000 shall be for guaranteed loans,

of which—

‘‘(I) $750,000,000 shall be for guarantees of

farm ownership loans under subtitle A; and

‘‘(II) $2,100,000,000 shall be for guarantees

of operating loans under subtitle B.

‘‘(G) FISCAL YEAR 2002.—For fiscal year 2002,

$3,435,000,000, of which—

‘‘(i) $585,000,000 shall be for direct loans, of

which—

‘‘(I) $85,000,000 shall be for farm ownership

loans under subtitle A; and

‘‘(II) $500,000,000 shall be for operating loans

under subtitle B; and

‘‘(ii) $2,850,000,000 shall be for guaranteed loans,

of which—

‘‘(I) $750,000,000 shall be for guarantees of

farm ownership loans under subtitle A; and

‘‘(II) $2,100,000,000 shall be for guarantees

of operating loans under subtitle B.

‘‘(2) BEGINNING FARMERS AND RANCHERS.—

‘‘(A) DIRECT LOANS.—

‘‘(i) FARM OWNERSHIP LOANS.—

‘‘(I) IN GENERAL.—Of the amounts made available under paragraph (1) for direct farm ownership

loans, the Secretary shall reserve 70 percent for

qualified beginning farmers and ranchers.

‘‘(II) DOWN PAYMENT LOANS.—Of the amounts

reserved for a fiscal year under subclause (I), the

Secretary shall reserve 60 percent for the down

payment loan program under section 310E until

April 1 of the fiscal year.

‘‘(ii) OPERATING LOANS.—Of the amounts made

available under paragraph (1) for direct operating

loans, the Secretary shall reserve for qualified beginning farmers and ranchers—

‘‘(I) for each of fiscal years 1996 through 1998,

25 percent;

‘‘(II) for fiscal year 1999, 30 percent; and

‘‘(III) for each of fiscal years 2000 through

2002, 35 percent.

‘‘(iii) FUNDS RESERVED UNTIL SEPTEMBER 1.—

Except as provided in clause (i)(II), funds reserved

for qualified beginning farmers or ranchers under this

subparagraph for a fiscal year shall be reserved only

until September 1 of the fiscal year.

‘‘(B) GUARANTEED LOANS.—
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1101

‘‘(i) FARM OWNERSHIP LOANS.—Of the amounts

made available under paragraph (1) for guarantees

of farm ownership loans, the Secretary shall reserve

25 percent for qualified beginning farmers and ranchers.

‘‘(ii) OPERATING LOANS.—Of the amounts made

available under paragraph (1) for guarantees of operating loans, the Secretary shall reserve 40 percent for

qualified beginning farmers and ranchers.

‘‘(iii) FUNDS RESERVED UNTIL APRIL 1.—Funds

reserved for qualified beginning farmers or ranchers

under this subparagraph for a fiscal year shall be

reserved only until April 1 of the fiscal year.

‘‘(C) RESERVED FUNDS FOR ALL QUALIFIED BEGINNING

FARMERS AND RANCHERS.—If a qualified beginning farmer

or rancher meets the eligibility criteria for receiving a

direct or guaranteed loan under section 302, 310E, or 311,

the Secretary shall make or guarantee the loan if sufficient

funds reserved under this paragraph are available to make

or guarantee the loan.

‘‘(3) TRANSFER FOR DOWN PAYMENT LOANS.—

‘‘(A) IN GENERAL.—Notwithstanding subsection (a), subject to subparagraph (B)—

‘‘(i) beginning on August 1 of each fiscal year,

the Secretary shall use available unsubsidized guaranteed farm operating loan funds to provide direct farm

ownership loans approved by the Secretary to qualified

beginning farmers and ranchers under the down payment loan program established under section 310E,

if sufficient direct farm ownership loan funds are not

otherwise available; and

‘‘(ii) beginning on September 1 of each fiscal year,

the Secretary shall use available unsubsidized guaranteed farm operating loan funds to provide direct farm

ownership loans approved by the Secretary to qualified

beginning farmers and ranchers, if sufficient direct

farm ownership loan funds are not otherwise available.

‘‘(B) LIMITATION.—The Secretary shall limit the transfer of funds under subparagraph (A) so that all guaranteed

farm operating loans that have been approved, or will

be approved, by the Secretary during the fiscal year will

be made to the extent of available amounts.

‘‘(4) TRANSFER FOR CREDIT SALES OF FARM INVENTORY PROPERTY.—

‘‘(A) IN GENERAL.—Notwithstanding subsection (a), subject to subparagraphs (B) and (C), beginning on September

1 of each fiscal year, the Secretary may use available

funds made available under subtitle C for the fiscal year

to fund the credit sale of farm real estate in the inventory

of the Secretary.

‘‘(B) SUPPLEMENTAL APPROPRIATIONS.—The transfer

authority provided under subparagraph (A) shall not apply

to any funds made available to the Secretary for any fiscal

year under an Act making supplemental appropriations.

‘‘(C) LIMITATION.—The Secretary shall limit the transfer of funds under subparagraph (A) so that all emergency

disaster loans that have been approved, or will be approved,

Effective date.
110 STAT. 1102 PUBLIC LAW 104–127—APR. 4, 1996

by the Secretary during the fiscal year will be made to

the extent of available amounts.’’.

SEC. 642. CONTRACTS ON LOAN SECURITY PROPERTIES.

Section 349 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1997) is amended—

(1) by striking subsection (b) and inserting the following:

‘‘(b) CONTRACTS ON LOAN SECURITY PROPERTIES.—Subject to

subsection (c), the Secretary may enter into a contract related

to real property for conservation, recreation, or wildlife purposes.’’;

(2) in subsection (c)—

(A) by striking ‘‘(c) Such easement’’ and all that follows

through ‘‘if—’’ and inserting the following:

‘‘(c) LIMITATIONS.—The Secretary may enter into a contract

under subsection (b) if—’’;

(B) in paragraph (2), by adding ‘‘and’’ at the end;

(C) in paragraph (3)—

(i) by striking subparagraph (B);

(ii) by striking ‘‘(3)(A)(i)’’ and inserting ‘‘(3)(A)’’;

(iii) by striking ‘‘Farmers Home Administration’’

and inserting ‘‘Secretary’’;

(iv) by striking ‘‘(ii) such easement’’ and inserting

‘‘(B) such contract’’; and

(v) by striking ‘‘; or’’ and inserting a period; and

(D) by striking paragraph (4);

(3) in subsection (d), by striking ‘‘easement’’ each place

it appears and inserting ‘‘contract’’;

(4) in subsection (e)—

(A) in paragraph (1)—

(i) in the matter preceding subparagraph (A), by

striking ‘‘purchase any such easement from the borrower—’’ and inserting ‘‘reduce or forgive the outstanding debt of a borrower—’’;

(ii) by striking ‘‘easement’’ each place it appears

and inserting ‘‘contract’’; and

(iii) by striking ‘‘Farmers Home Administration’’

each place it appears and inserting ‘‘Secretary’’; and

(B) in paragraph (2)(A), by striking ‘‘easement is

acquired’’ and inserting ‘‘contract is entered into’’;

(5) in subsection (f)—

(A) in paragraph (1), by striking ‘‘acquire easements’’

and inserting ‘‘enter into contracts’’; and

(B) in paragraphs (2) and (3), by striking ‘‘easements’’

each place it appears and inserting ‘‘contracts’’; and

(6) in subsection (g), by striking ‘‘an easement acquired’’

and inserting ‘‘a contract entered into’’.

SEC. 643. LIST OF CERTIFIED LENDERS AND INVENTORY PROPERTY

DEMONSTRATION PROJECT.

(a) IN GENERAL.—Section 351 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1999) is amended—

(1) in subsection (f)—

(A) by striking ‘‘Each Farmers Home Administration

county supervisor’’ and inserting ‘‘The Secretary’’;

(B) by striking ‘‘approved lenders’’ and inserting ‘‘lenders’’; and

(C) by striking ‘‘the Farmers Home Administration’’;

and
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1103

(2) by striking subsection (h).

(b) TECHNICAL AMENDMENT.—Section 1320 of the Food Security

Act of 1985 (Public Law 99–198; 7 U.S.C. 1999 note) is amended

by striking ‘‘Effective only’’ and all that follows through ‘‘1995,

the’’ and inserting ‘‘The’’.

SEC. 644. HOMESTEAD PROPERTY.

Section 352(c) of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2000(c)) is amended—

(1) in paragraph (1)(A), by striking ‘‘90’’ each place it

appears and inserting ‘‘30’’; and

(2) in paragraph (6)—

(A) in the first sentence, by striking ‘‘Within 30’’ and

all that follows through ‘‘title,’’ and insert ‘‘Not later than

the date of acquisition of the property securing a loan

made under this title (or, in the case of real property

in inventory on the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996, not later

than 5 days after the date of enactment of the Act),’’;

and

(B) by striking the second sentence.

SEC. 645. RESTRUCTURING.

Section 353 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2001) is amended—

(1) in subsection (c)—

(A) in paragraph (3), by striking subparagraph (C)

and inserting the following:

‘‘(C) CASH FLOW MARGIN.—For the purpose of assessing

under subparagraph (A) the ability of a borrower to meet

debt obligations and continue farming operations, the Secretary shall assume that the borrower needs up to 110

percent of the amount indicated for payment of farm operating expenses, debt service obligations, and family living

expenses.’’; and

(B) by striking paragraph (6) and inserting the following:

‘‘(6) TERMINATION OF LOAN OBLIGATIONS.—The obligations

of a borrower to the Secretary under a loan shall terminate

if—

‘‘(A) the borrower satisfies the requirements of paragraphs (1) and (2) of subsection (b);

‘‘(B) the value of the restructured loan is less than

the recovery value; and

‘‘(C) not later than 90 days after receipt of the notification described in paragraph (4)(B), the borrower pays (or

obtains third-party financing to pay) the Secretary an

amount equal to the current market value.’’;

(2) by striking subsection (k); and

(3) by redesignating subsections (l) through (p) as subsections (k) through (o), respectively.

SEC. 646. TRANSFER OF INVENTORY LAND FOR CONSERVATION PURPOSES.

Section 354 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2002) is amended—

(1) in the matter preceding paragraph (1), by striking ‘‘The

Secretary, without reimbursement,’’ and inserting the following:
110 STAT. 1104 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(a) IN GENERAL.—Subject to subsection (b), the Secretary’’;

(2) by striking paragraph (2) and inserting the following:

‘‘(2) that is eligible to be disposed of in accordance with

section 335; and’’; and

(3) by adding at the end the following:

‘‘(b) CONDITIONS.—The Secretary may not transfer any property

or interest in property under subsection (a) unless—

‘‘(1) at least 2 public notices are given of the transfer;

‘‘(2) if requested, at least 1 public meeting is held prior

to the transfer; and

‘‘(3) the Governor and at least 1 elected county official

of the State and county where the property is located are

consulted prior to the transfer.’’.

SEC. 647. IMPLEMENTATION OF TARGET PARTICIPATION RATES.

Section 355 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2003) is amended by adding at the end the following:

‘‘(f) IMPLEMENTATION CONSISTENT WITH SUPREME COURT HOLDING.—Not later than 180 days after the date of enactment of this

subsection, the Secretary shall ensure that the implementation

of this section is consistent with the holding of the Supreme Court

in Adarand Constructors, Inc. v. Federico Pena, Secretary of

Transportation, 115 S. Ct. 2097 (1995).’’.

SEC. 648. DELINQUENT BORROWERS.

(a) PAYMENT OF INTEREST AS A CONDITION OF LOAN SERVICING

FOR BORROWERS.—The Consolidated Farm and Rural Development

Act (7 U.S.C. 1921 et seq.) is amended by adding at the end

the following:

‘‘SEC. 372. PAYMENT OF INTEREST AS A CONDITION OF LOAN SERVICING FOR BORROWERS.

‘‘The Secretary may not reschedule or reamortize a loan for

a borrower under this title who has not requested consideration

under section 331D(e) unless the borrower pays a portion, as determined by the Secretary, of the interest due on the loan.’’.

(b) LOAN AND LOAN SERVICING LIMITATIONS.—The Consolidated

Farm and Rural Development Act (7 U.S.C. 1921 et seq.) (as amended by subsection (a)) is amended by adding at the end the following:

‘‘SEC. 373. LOAN AND LOAN SERVICING LIMITATIONS.

‘‘(a) DELINQUENT BORROWERS PROHIBITED FROM OBTAINING

DIRECT OPERATING LOANS.—The Secretary may not make a direct

operating loan under subtitle B to a borrower who is delinquent

on any loan made or guaranteed under this title.

‘‘(b) LOANS PROHIBITED FOR BORROWERS THAT HAVE RECEIVED

DEBT FORGIVENESS.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2),

the Secretary may not make or guarantee a loan under this

title to a borrower who received debt forgiveness on a loan

made or guaranteed under this title.

‘‘(2) EXCEPTION.—The Secretary may make a direct or

guaranteed farm operating loan for paying annual farm or

ranch operating expenses of a borrower who was restructured

with a write-down under section 353.

‘‘(c) NO MORE THAN 1 DEBT FORGIVENESS FOR A BORROWER

ON A DIRECT LOAN.—The Secretary may not provide to a borrower

debt forgiveness on a direct loan made under this title if the

7 USC 2008h.

7 USC 2008g.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1105

borrower has received debt forgiveness on another direct loan made

under this title.’’.

SEC. 649. SHORT FORM CERTIFICATION OF FARM PROGRAM BORROWER COMPLIANCE.

The Consolidated Farm and Rural Development Act (7 U.S.C.

1921 et seq.) (as amended by section 648) is amended by adding

at the end the following:

‘‘SEC. 374. SHORT FORM CERTIFICATION OF FARM PROGRAM BORROWER COMPLIANCE.

‘‘The Secretary shall develop and utilize a consolidated short

form for farm program borrowers to use in certifying compliance

with any applicable provision of law (including a regulation) that

serves as an eligibility prerequisite for a loan made under this

title.’’.

SEC. 650. CREDIT STUDY.

(a) IN GENERAL.—The Secretary of Agriculture shall conduct

a study and report to the Committee on Agriculture of the House

of Representatives and the Committee on Agriculture, Nutrition,

and Forestry of the Senate on the demand for and availability

of credit in rural areas for agriculture, housing, and rural development.

(b) PURPOSE.—The purpose of the study shall be to ensure

that Congress has current and comprehensive information to consider as Congress deliberates on rural credit needs and the availability of credit to satisfy the needs of rural areas of the United

States.

(c) ITEMS IN STUDY.—In conducting the study, the Secretary

shall base the study on the most current available data and analyze—

(1) rural demand for credit from the Farm Credit System,

the ability of the Farm Credit System to meet the demand,

and the extent to which the Farm Credit System provides

loans to satisfy the demand;

(2) rural demand for credit from the United States banking

system, the ability of banks to meet the demand, and the

extent to which banks provide loans to satisfy the demand;

(3) rural demand for credit from the Secretary, the ability

of the Secretary to meet the demand, and the extent to which

the Secretary provides loans to satisfy the demand;

(4) rural demand for credit from other Federal agencies,

the ability of the agencies to meet the demand, and the extent

to which the agencies provide loans to satisfy the demand;

(5) what measure or measures exist to gauge the overall

demand for rural credit, the extent to which rural demand

for credit is satisfied, and what the measures have demonstrated;

(6) a comparison of the interest rates and terms charged

by the Farm Credit System Farm Credit Banks, production

credit associations, and banks for cooperatives with the rates

and terms charged by the banks of the United States for credit

of comparable risk and maturity;

(7) the advantages and disadvantages of the modernization

and expansion proposals of the Farm Credit System on the

Farm Credit System, the United States banking system, rural

Reports.

7 USC 2001 note.

7 USC 2008i.
110 STAT. 1106 PUBLIC LAW 104–127—APR. 4, 1996

users of credit, local rural communities, and the Federal

Government, including—

(A) any added risk to the safety and soundness of

the Farm Credit System that may result from approval

of a proposal; and

(B) any positive or adverse impacts on competition

between the Farm Credit System and the banks of the

United States in providing credit to rural users;

(8) the nature and extent of the unsatisfied rural credit

need that the Farm Credit System proposals are supposed

to address and what aspects of the present Farm Credit System

prevent the Farm Credit System from meeting the need;

(9) the advantages and disadvantages of the proposal by

commercial bankers to allow banks access to the Farm Credit

System as a funding source on the Farm Credit System, the

United States banking system, rural users of credit, local rural

communities, and the Federal Government, including—

(A) any added risk to the safety and soundness of

the Farm Credit System that may result from approval

of the proposal; and

(B) any positive or adverse impacts on competition

between the Farm Credit System and the banks of the

United States in providing credit to rural users; and

(10) problems that commercial banks have in obtaining

capital for lending in rural areas, how access to Farm Credit

System funds would improve the availability of capital in rural

areas in ways that cannot be achieved in the system in existence

on the date of enactment of this Act, and the possible effects

on the viability of the Farm Credit System of granting banks

access to Farm Credit System funds.

(d) INTERAGENCY TASK FORCE.—In completing the study, the

Secretary shall use, among other things, data and information

obtained by the interagency task force on rural credit.

Subtitle E—General Provisions

SEC. 661. CONFORMING AMENDMENTS.

(a) Section 307(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1927(a)) is amended—

(1) in paragraph (4), by striking ‘‘304(b), 306(a)(1), and

310B’’ and inserting ‘‘306(a)(1) and 310B’’; and

(2) in paragraph (6)(B)—

(A) by striking clauses (i), (ii), (iv), and (vii);

(B) in clause (v), by adding ‘‘and’’ at the end;

(C) in clause (vi), by striking ‘‘, and’’ at the end and

inserting a period; and

(D) by redesignating clauses (iii), (v), and (vi) as clauses

(i), (ii), and (iii), respectively.

(b) The second sentence of section 309(g)(1) of the Consolidated

Farm and Rural Development Act (7 U.S.C. 1929(g)(1)) is amended

by striking ‘‘section 308,’’.

(c) Section 309A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929a) is amended—

(1) in the second sentence of subsection (a), by striking

‘‘304(b), 306(a)(1), 306(a)(14), 310B, and 312(b)’’ and inserting

‘‘306(a)(1), 306(a)(14), and 310B’’; and
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1107

(2) in the first sentence of subsection (b), by striking ‘‘and

section 308’’.

(d) Section 310B(d) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(d)) is amended—

(1) by striking ‘‘sections 304(b), 310B, and 312(b)’’ each

place it appears in paragraphs (2), (3), and (4) and inserting

‘‘this section’’; and

(2) in paragraph (6), by striking ‘‘this section, section 304,

or section 312’’ and inserting ‘‘this section’’.

(e) The first sentence of section 310D(a) of the Consolidated

Farm and Rural Development Act (7 U.S.C. 1934(a)) is amended

by striking ‘‘paragraphs (1) through (5) of section 303(a), or subparagraphs (A) through (E) of section 304(a)(1)’’ and inserting ‘‘section

303(a), or paragraphs (1) through (5) of section 304(a)’’.

(f) Section 311(b)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(b)(1)) is amended by striking ‘‘and for

the purposes specified in section 312’’.

(g) Section 316(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(a)) is amended by striking paragraph

(3).

(h) Section 343 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991) is amended—

(1) in subsection (a)(10), by striking ‘‘recreation loan (RL)

under section 304,’’; and

(2) in subsection (b)—

(A) in the matter preceding paragraph (1), by striking

‘‘351(h),’’; and

(B) by striking paragraph (4) and inserting the following:

‘‘(4) PRESERVATION LOAN SERVICE PROGRAM.—The term

‘preservation loan service program’ means homestead retention

as authorized under section 352.’’.

(i) The first sentence of section 344 of the Consolidated Farm

and Rural Development Act (7 U.S.C. 1992) is amended by striking

‘‘304(b), 306(a)(1), 310B, 312(b), or 312(c)’’ and inserting ‘‘306(a)(1),

310B, or 312(c)’’.

(j) Section 353(l) of the Consolidated Farm and Rural Development Act (as redesignated by section 645(3)) is amended by striking

‘‘and subparagraphs (A)(i) and (C)(i) of section 335(e)(1),’’.

SEC. 662. ELECTRONIC FILING OF EFFECTIVE FINANCING STATEMENTS UNDER THE CLEAR TITLE PROVISIONS OF THE

FOOD SECURITY ACT OF 1985.

Section 1324(c)(4) of the Food Security Act of 1985 (7 U.S.C.

1631(c)(4)) is amended—

(1) in subparagraph (A), by striking ‘‘thereof’’ and inserting

‘‘of the statement, or, in the case of a State which (under

the applicable State law provisions of the Uniform Commercial

Code) allows the electronic filing of financing statements without the signature of the debtor, is an electronically reproduced

copy of the statement’’; and

(2) in each of subparagraphs (B) and (C), by inserting

‘‘other than in the case of an electronically reproduced copy

of the statement,’’ before ‘‘is’’.
110 STAT. 1108 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 663. EFFECTIVE DATE.

(a) IN GENERAL.—Except as provided in subsection (b), the

amendments made by this title shall become effective on the date

of enactment of this Act.

(b) DELAYED EFFECTIVE DATES.—The amendments made by

sections 601, 606, 611, 612, 622, 623, 625, 633, 640(1), 642, 645(1),

648(a), and 649 shall become effective 90 days after the date of

enactment of this Act.

(c) TRANSITION PROVISION.—The amendments made by sections

638 and 644 shall not apply with respect to a complete application

to acquire inventory property submitted prior to the date of enactment of this Act.

(d) REGULATIONS.—Notwithstanding any other provision of law,

regulations to implement the amendments made by this title shall

be published as interim final rules with request for comments

and may be made effective immediately on publication.

TITLE VII—RURAL DEVELOPMENT

Subtitle A—Amendments to the Food, Agriculture, Conservation, and Trade Act of

1990

CHAPTER 1—GENERAL PROVISIONS

SEC. 701. RURAL INVESTMENT PARTNERSHIPS.

Subtitle B of title XXIII of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 2007 et seq.) is repealed.

SEC. 702. WATER AND WASTE FACILITY FINANCING.

Section 2322 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 1926–1) is repealed.

SEC. 703. RURAL WASTEWATER CIRCUIT RIDER PROGRAM.

Section 2324 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 7 U.S.C. 1926 note) is repealed.

SEC. 704. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN

RURAL AREAS.

Chapter 1 of subtitle D of title XXIII of the Food, Agriculture,

Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa et seq.)

is amended to read as follows:

‘‘CHAPTER 1—TELEMEDICINE AND DISTANCE

LEARNING SERVICES IN RURAL AREAS

‘‘SEC. 2331. PURPOSE.

‘‘The purpose of this chapter is to encourage and improve

telemedicine services and distance learning services in rural areas

through the use of telecommunications, computer networks, and

related advanced technologies by students, teachers, medical professionals, and rural residents.

‘‘SEC. 2332. DEFINITIONS.

‘‘In this chapter:

7 USC 950aaa–1.

7 USC 950aaa.

7 USC 1922 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1109

‘‘(1) CONSTRUCT.—The term ‘construct’ means to construct,

acquire, install, improve, or extend a facility or system.

‘‘(2) COST OF MONEY LOAN.—The term ‘cost of money loan’

means a loan made under this chapter bearing interest at

a rate equal to the then current cost to the Federal Government

of loans of similar maturity.

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

of Agriculture.

‘‘SEC. 2333. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN

RURAL AREAS.

‘‘(a) SERVICES TO RURAL AREAS.—The Secretary may provide

financial assistance for the purpose of financing the construction

of facilities and systems to provide telemedicine services and distance learning services in rural areas.

‘‘(b) FINANCIAL ASSISTANCE.—

‘‘(1) IN GENERAL.—Financial assistance shall consist of

grants or cost of money loans, or both.

‘‘(2) FORM.—The Secretary shall determine the portion of

the financial assistance provided to a recipient that consists

of grants and the portion that consists of cost of money loans

so as to result in the maximum feasible repayment to the

Federal Government of the financial assistance, based on the

ability to repay of the recipient and full utilization of funds

made available to carry out this chapter.

‘‘(c) RECIPIENTS.—

‘‘(1) IN GENERAL.—The Secretary may provide financial

assistance under this chapter to—

‘‘(A) entities using telemedicine services or distance

learning services; and

‘‘(B) entities providing or proposing to provide

telemedicine service or distance learning service to other

persons at rates calculated to ensure that the benefit of

the financial assistance is passed through to the other

persons.

‘‘(2) ELECTRIC OR TELECOMMUNICATIONS BORROWERS.—

‘‘(A) LOANS TO BORROWERS.—Subject to subparagraph

(B), the Secretary may provide a cost of money loan under

this chapter to a borrower of an electric or telecommunications loan under the Rural Electrification Act of 1936

(7 U.S.C. 901 et seq.). A borrower receiving a cost of money

loan under this paragraph shall—

‘‘(i) make the funds provided available to entities

that qualify under paragraph (1) for projects satisfying

the requirements of this chapter;

‘‘(ii) use the funds provided to acquire, install,

improve, or extend a system referred to in subsection

(a); or

‘‘(iii) use the funds provided to install, improve,

or extend a facility referred to in subsection (a).

‘‘(B) LIMITATIONS.—A borrower of an electric or telecommunications loan under the Rural Electrification Act

of 1936 shall—

‘‘(i) make a system or facility funded under

subparagraph (A) available to entities that qualify

under paragraph (1); and

7 USC 950aaa–2.
110 STAT. 1110 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(ii) neither retain from the proceeds of a loan

provided under subparagraph (A), nor assess a qualifying entity under paragraph (1), any amount except

as may be required to pay the actual costs incurred

in administering the loan or making the system or

facility available.

‘‘(3) APPEAL.—If the Secretary rejects the application of

a borrower who applies for a cost of money loan or grant

under this section, the borrower may appeal the decision to

the Secretary not later than 10 days after the borrower is

notified of the rejection.

‘‘(4) ASSISTANCE TO PROVIDE OR IMPROVE SERVICES.—Financial assistance may be provided under this chapter for a facility

regardless of the location of the facility if the Secretary determines that the assistance is necessary to provide or improve

telemedicine services or distance learning services in a rural

area.

‘‘(d) PRIORITY.—The Secretary shall establish procedures to

prioritize financial assistance under this chapter considering—

‘‘(1) the need for the assistance in the affected rural area;

‘‘(2) the financial need of the applicant;

‘‘(3) the population sparsity of the affected rural area;

‘‘(4) the local involvement in the project serving the affected

rural area;

‘‘(5) geographic diversity among the recipients of financial

assistance;

‘‘(6) the utilization of the telecommunications facilities of

any telecommunications provider serving the affected rural

area;

‘‘(7) the portion of total project financing provided by the

applicant from the funds of the applicant;

‘‘(8) the portion of project financing provided by the

applicant with funds obtained from non-Federal sources;

‘‘(9) the joint utilization of facilities financed by other financial assistance;

‘‘(10) the coordination of the proposed project with regional

projects or networks;

‘‘(11) service to the greatest practical number of persons

within the general geographic area covered by the financial

assistance;

‘‘(12) conformity with the State strategic plan as prepared

under section 381D of the Consolidated Farm and Rural Development Act; and

‘‘(13) other factors determined appropriate by the Secretary.

‘‘(e) MAXIMUM AMOUNT OF ASSISTANCE TO INDIVIDUAL RECIPIENTS.—The Secretary may establish the maximum amount of financial assistance to be made available to an individual recipient

for each fiscal year under this chapter, by publishing notice of

the maximum amount in the Federal Register not more than 45

days after funds are made available for the fiscal year to carry

out this chapter.

‘‘(f) USE OF FUNDS.—Financial assistance provided under this

chapter shall be used for—

‘‘(1) the development and acquisition of instructional

programming;

‘‘(2) the development and acquisition, through lease or purchase, of computer hardware and software, audio and visual

Federal Register,

publication.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1111

equipment, computer network components, telecommunications

terminal equipment, telecommunications transmission facilities, data terminal equipment, or interactive video equipment,

or other facilities that would further telemedicine services or

distance learning services;

‘‘(3) providing technical assistance and instruction for the

development or use of the programming, equipment, or facilities

referred to in paragraphs (1) and (2); or

‘‘(4) other uses that are consistent with this chapter, as

determined by the Secretary.

‘‘(g) SALARIES AND EXPENSES.—Notwithstanding subsection (f),

financial assistance provided under this chapter shall not be used

for paying salaries or administrative expenses.

‘‘(h) EXPEDITING COORDINATED TELEPHONE LOANS.—

‘‘(1) IN GENERAL.—The Secretary may establish and carry

out procedures to ensure that expedited consideration and

determination is given to applications for loans and advances

of funds submitted by local exchange carriers under this chapter

and the Rural Electrification Act of 1936 (7 U.S.C. 901 et

seq.) to enable the exchange carriers to provide advanced telecommunications services in rural areas in conjunction with

any other projects carried out under this chapter.

‘‘(2) DEADLINE IMPOSED ON SECRETARY.—Not later than

45 days after the receipt of a completed application for an

expedited telephone loan under paragraph (1), the Secretary

shall notify the applicant in writing of the decision of the

Secretary regarding the application.

‘‘(i) NOTIFICATION OF LOCAL EXCHANGE CARRIER.—

‘‘(1) APPLICANTS.—Each applicant for a grant for a

telemedicine or distance learning project established under this

chapter shall notify the appropriate local telephone exchange

carrier regarding the application filed with the Secretary for

the grant.

‘‘(2) SECRETARY.—The Secretary shall—

‘‘(A) publish notice of applications received for grants

under this chapter for telemedicine or distance learning

projects; and

‘‘(B) make the applications available for inspection.

‘‘SEC. 2334. ADMINISTRATION.

‘‘(a) NONDUPLICATION.—The Secretary shall ensure that facilities constructed using financial assistance provided under this chapter do not duplicate adequate established telemedicine services

or distance learning services.

‘‘(b) LOAN MATURITY.—The maturities of cost of money loans

shall be determined by the Secretary, based on the useful life

of the facility being financed, except that the loan shall not be

for a period of more than 10 years.

‘‘(c) LOAN SECURITY AND FEASIBILITY.—The Secretary shall

make a cost of money loan only if the Secretary determines that

the security for the loan is reasonably adequate and that the

loan will be repaid within the period of the loan.

‘‘(d) ENCOURAGING CONSORTIA.—The Secretary shall encourage

the development of consortia to provide telemedicine services or

distance learning services through telecommunications in rural

areas served by a telecommunications provider.

7 USC 950aaa–3.

Notification.
110 STAT. 1112 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(e) COORDINATION WITH OTHER AGENCIES.—The Secretary

shall coordinate, to the extent practicable, with other Federal and

State agencies with similar grant or loan programs to pool resources

for funding meritorious proposals in rural areas.

‘‘(f) INFORMATIONAL EFFORTS.—The Secretary shall establish

and implement procedures to carry out informational efforts to

advise potential end users located in rural areas of each State

about the program authorized by this chapter.

‘‘SEC. 2335. REGULATIONS.

‘‘Not later than 180 days after the date of enactment of the

Federal Agriculture Improvement and Reform Act of 1996, the

Secretary shall issue regulations to carry out this chapter.

‘‘SEC. 2335A. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated to carry out this

chapter $100,000,000 for each of fiscal years 1996 through 2002.’’.

SEC. 705. LIMITATION ON AUTHORIZATION OF APPROPRIATIONS FOR

RURAL TECHNOLOGY GRANTS.

Section 2347 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 104 Stat. 4034) is amended—

(1) by striking ‘‘(a) IN GENERAL.—’’; and

(2) by striking subsection (b).

SEC. 706. DEMONSTRATION PROJECTS.

Section 2348 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 2662a) is repealed.

SEC. 707. MONITORING THE ECONOMIC PROGRESS OF RURAL AMERICA.

Section 2382 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 13 U.S.C. 141 note) is repealed.

SEC. 708. ANALYSIS BY OFFICE OF TECHNOLOGY ASSESSMENT.

Section 2385 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 7 U.S.C. 950aaa–4 note) is

repealed.

SEC. 709. RURAL HEALTH INFRASTRUCTURE IMPROVEMENT.

Section 2391 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 7 U.S.C. 2662 note) is repealed.

SEC. 710. CENSUS OF AGRICULTURE.

Section 2392 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 104 Stat. 4057) is repealed.

SEC. 711. STUDY OF THE TRANSPORTATION OF FERTILIZER AND AGRICULTURAL CHEMICALS TO FARMERS.

Section 2517 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (Public Law 101–624; 104 Stat. 4077) is repealed.

CHAPTER 2—ALTERNATIVE AGRICULTURAL RESEARCH

AND COMMERCIALIZATION

SEC. 721. DEFINITIONS.

Section 1657(c) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (7 U.S.C. 5901(c)) is amended—

(1) by striking paragraphs (3) and (4);

15 USC 714 note.

13 USC 142 note.

7 USC 1932.

7 USC 950aaa–5.

7 USC 950aaa–4.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1113

(2) by redesignating paragraph (5) as paragraph (3);

(3) by redesignating paragraphs (6) through (12) as paragraphs (7) through (13), respectively; and

(4) by inserting after paragraph (3) (as redesignated by

paragraph (2)) the following:

‘‘(4) CORPORATE BOARD.—The term ‘Corporate Board’ means

the Board of Directors of the Corporation described in section

1659.

‘‘(5) CORPORATION.—The term ‘Corporation’ means the

Alternative Agricultural Research and Commercialization Corporation established under section 1658.

‘‘(6) EXECUTIVE DIRECTOR.—The term ‘Executive Director’

means the Executive Director of the Corporation appointed

under section 1659(e).’’.

SEC. 722. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION.

(a) IN GENERAL.—Section 1658 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5902) is amended to

read as follows:

‘‘SEC. 1658. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION.

‘‘(a) ESTABLISHMENT.—To carry out this subtitle, there is created a body corporate to be known as the Alternative Agricultural

Research and Commercialization Corporation, which shall be an

agency of the United States, within the Department of Agriculture,

subject to the general supervision and direction of the Secretary,

except as specifically provided for in this subtitle.

‘‘(b) PURPOSE.—The purpose of the Corporation is to—

‘‘(1) expedite the development and market penetration of

industrial, nonfood, nonfeed products from agricultural and

forestry materials; and

‘‘(2) assist the private sector in bridging the gap between

the results of research into nonfood, nonfeed products and

the commercialization of the research.

‘‘(c) PLACE OF INCORPORATION.—The Corporation shall be incorporated in the District of Columbia.

‘‘(d) CENTRAL OFFICE.—The Secretary shall provide facilities

for the principal office of the Corporation within the Washington,

D.C., metropolitan area.

‘‘(e) WHOLLY-OWNED GOVERNMENT CORPORATION.—The Corporation shall be considered a wholly-owned government corporation

in accordance with chapter 91 of title 31, United States Code.

‘‘(f) GENERAL POWERS.—In addition to any other powers granted

to the Corporation under this subtitle, the Corporation—

‘‘(1) shall have succession in its corporate name;

‘‘(2) may adopt, alter, and rescind any bylaw and adopt

and alter a corporate seal, which shall be judicially noticed;

‘‘(3) may enter into any agreement or contract with a

person or private or governmental agency, except that the

Corporation shall not provide any financial assistance unless

specifically authorized by this subtitle;

‘‘(4) may lease, purchase, accept a gift or donation of, or

otherwise acquire, use, own, hold, improve, or otherwise deal

in or with, and sell, convey, mortgage, pledge, lease, exchange,

or otherwise dispose of, any property or interest in property,

as the Corporation considers necessary in the transaction of

District of

Columbia.
110 STAT. 1114 PUBLIC LAW 104–127—APR. 4, 1996

the business of the Corporation, except that this paragraph

shall not provide authority for carrying out a program of real

estate investment;

‘‘(5) may sue and be sued in the corporate name of the

Corporation, except that—

‘‘(A) no attachment, injunction, garnishment, or similar

process shall be issued against the Corporation or property

of the Corporation; and

‘‘(B) exclusive original jurisdiction shall reside in the

district courts of the United States, but the Corporation

may intervene in any court in any suit, action, or proceeding in which the Corporation has an interest;

‘‘(6) may independently retain legal representation;

‘‘(7) may provide for and designate such committees, and

the functions of the committees, as the Corporate Board considers necessary or desirable;

‘‘(8) may indemnify the Executive Director and other officers of the Corporation, as the Corporate Board considers necessary and desirable, except that the Executive Director and

officers shall not be indemnified for an act outside the scope

of employment;

‘‘(9) may, with the consent of any board, commission,

independent establishment, or executive department of the Federal Government, including any field service, use information,

services, facilities, officials, and employees in carrying out this

subtitle, and pay for the use, which payments shall be transferred to the applicable appropriation account that incurred

the expense;

‘‘(10) may obtain the services and fix the compensation

of any consultant and otherwise procure temporary and intermittent services under section 3109(b) of title 5, United States

Code;

‘‘(11) may use the United States mails on the same terms

and conditions as the Executive agencies of the Federal Government;

‘‘(12) shall have the rights, privileges, and immunities of

the United States with respect to the right to priority of payment with respect to debts due from bankrupt, insolvent, or

deceased creditors;

‘‘(13) may collect or compromise any obligations assigned

to or held by the Corporation, including any legal or equitable

rights accruing to the Corporation;

‘‘(14) shall determine the character of, and necessity for,

obligations and expenditures of the Corporation and the manner

in which the obligations and expenditures shall be incurred,

allowed, and paid, subject to provisions of law specifically

applicable to Government corporations;

‘‘(15) may make final and conclusive settlement and adjustment of any claim by or against the Corporation or a fiscal

officer of the Corporation;

‘‘(16) may sell assets, loans, and equity interests acquired

in connection with the financing of projects funded by the

Corporation; and

‘‘(17) may exercise all other lawful powers necessarily or

reasonably related to the establishment of the Corporation to

carry out this subtitle and the powers, purposes, functions,

duties, and authorized activities of the Corporation.

Courts.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1115

‘‘(g) SPECIFIC POWERS.—To carry out this subtitle, the Corporation may—

‘‘(1) make grants to, and enter into cooperative agreements

and contracts with, eligible applicants for research, development, and demonstration projects in accordance with section

1660;

‘‘(2) make loans and interest subsidy payments and invest

venture capital in accordance with section 1661;

‘‘(3) collect and disseminate information concerning State,

regional, and local commercialization projects;

‘‘(4) search for new nonfood, nonfeed products that may

be produced from agricultural commodities and for processes

to produce the products;

‘‘(5) administer, maintain, and dispense funds from the

Fund to facilitate the conduct of activities under this subtitle;

and

‘‘(6) engage in other activities incident to carrying out the

functions of the Corporation.’’.

(b) WHOLLY-OWNED GOVERNMENT CORPORATION.—Section

9101(3) of title 31, United States Code, is amended—

(1) by redesignating subparagraph (N) (relating to the Uranium Enrichment Corporation) as subparagraph (O); and

(2) by adding at the end the following:

‘‘(Q) the Alternative Agricultural Research and

Commercialization Corporation.’’.

(c) CONFORMING AMENDMENT.—Section 211(b)(5) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6911(b)(5))

is amended by striking ‘‘Alternative Agricultural Research and

Commercialization Board’’ and inserting ‘‘Corporate Board of the

Alternative Agricultural Research and Commercialization Corporation’’.

SEC. 723. BOARD OF DIRECTORS, EMPLOYEES, AND FACILITIES.

(a) IN GENERAL.—Section 1659 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5903) is amended to

read as follows:

‘‘SEC. 1659. BOARD OF DIRECTORS, EMPLOYEES, AND FACILITIES.

‘‘(a) IN GENERAL.—The powers of the Corporation shall be

vested in a Corporate Board.

‘‘(b) MEMBERS OF THE CORPORATE BOARD.—The Corporate

Board shall consist of 11 members as follows:

‘‘(1) The Under Secretary of Agriculture for Rural Development.

‘‘(2) The Under Secretary of Agriculture for Research, Education, and Economics.

‘‘(3) 5 members appointed by the Secretary, of whom—

‘‘(A) at least 1 member shall be a representative of

the leading scientific disciplines relevant to the activities

of the Corporation;

‘‘(B) at least 1 member shall be a producer or processor

of agricultural commodities;

‘‘(C) at least 1 member shall be a person who is privately engaged in the commercialization of new nonfood,

nonfeed products from agricultural commodities; and

‘‘(D) at least 1 member shall have expertise in financial

management.
110 STAT. 1116 PUBLIC LAW 104–127—APR. 4, 1996

A different member shall be appointed pursuant to each

subparagraph of this paragraph.

‘‘(4) 2 members appointed by the Secretary who—

‘‘(A) have expertise in areas of applied research relating

to the development or commercialization of new nonfood,

nonfeed products; and

‘‘(B) shall be appointed from a group of at least 4

individuals nominated by the Director of the National

Science Foundation if the nominations are made not later

than 60 days after the date a vacancy occurs.

‘‘(5) 2 members appointed by the Secretary who—

‘‘(A) have expertise in financial and managerial matters; and

‘‘(B) shall be appointed from a group of at least 4

individuals nominated by the Secretary of Commerce if

the nominations are made not later than 60 days after

the date a vacancy occurs.

‘‘(c) RESPONSIBILITIES OF THE CORPORATE BOARD.—

‘‘(1) IN GENERAL.—The Corporate Board shall—

‘‘(A) be responsible for the general supervision of the

Corporation and Regional Centers established under section 1663;

‘‘(B) determine (in consultation with Regional Centers)

high priority commercialization areas to receive assistance

under section 1663;

‘‘(C) review any grant, contract, or cooperative agreement to be made or entered into by the Corporation under

section 1660 and any financial assistance to be provided

under section 1661;

‘‘(D) make the final decision, by majority vote, on

whether and how to provide assistance to an applicant;

and

‘‘(E) develop and establish a budget plan and a longterm operating plan to carry out this subtitle.

‘‘(2) AUTHORITY OF THE SECRETARY.—

‘‘(A) IN GENERAL.—The Secretary shall vacate and

remand to the Corporate Board for reconsideration any

decision made pursuant to paragraph (1)(D) if the Secretary

determines that there has been a violation of subsection

(j), or any conflict of interest provisions of the bylaws

of the Corporate Board, with respect to the decision.

‘‘(B) REASONS.—In the case of any violation and referral

of a funding decision to the Corporate Board, the Secretary

shall inform the Corporate Board of the reasons for any

remand pursuant to subparagraph (A).

‘‘(d) CHAIRPERSON.—The members of the Corporate Board shall

select a Chairperson from among the members of the Corporate

Board. The term of office of the Chairperson shall be 2 years.

The members referred to in paragraphs (1) and (2) of subsection

(b) may not serve as Chairperson.

‘‘(e) EXECUTIVE DIRECTOR.—

‘‘(1) APPOINTMENT.—The Corporate Board shall appoint an

Executive Director, subject to the approval of the Secretary.

‘‘(2) DUTIES.—The Executive Director shall be the chief

executive officer of the Corporation, with such power and

authority as may be conferred by the Corporate Board.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1117

‘‘(3) COMPENSATION.—The Executive Director shall receive

basic pay at the rate provided for level IV of the Executive

Schedule under section 5315 of title 5, United States Code.

‘‘(f) OFFICERS.—The Corporate Board shall establish the offices

and appoint the officers of the Corporation, including a Secretary,

and define the duties of the officers in a manner consistent with

this subtitle.

‘‘(g) MEETINGS.—The Corporate Board shall meet at least 3

times each fiscal year at the call of the Chairperson or at the

request of the Executive Director. The location of the meetings

shall be subject to approval of the Executive Director. A quorum

of the Corporate Board shall consist of a majority of the members.

The decisions of the Corporate Board shall be made by majority

vote.

‘‘(h) TERM; VACANCIES.—

‘‘(1) IN GENERAL.—The term of office of a member of the

Corporate Board shall be 4 years, except that the members

initially appointed shall be appointed to serve staggered terms.

A member appointed to fill a vacancy for an unexpired term

may be appointed only for the remainder of the term. A vacancy

on the Corporate Board shall be filled in the same manner

as the original appointment. The Secretary may remove a member of the Corporate Board only for cause.

‘‘(2) TRANSITION MEASURE.—The Secretary may appoint to

the Corporate Board an individual who, on the day before

the date of enactment of the Federal Agriculture Improvement

and Reform Act of 1996, was serving on the former Alternative

Agricultural Research and Commercialization Board, for a term

that does not exceed the term for which the individual was

appointed to the former Board.

‘‘(i) COMPENSATION.—A member of the Corporate Board who

is an officer or employee of the United States shall not receive

any additional compensation by reason of service on the Corporate

Board. Any other member shall receive, for each day (including

travel time) the member is engaged in the performance of the

functions of the Corporate Board, compensation at a rate not to

exceed the daily equivalent of the annual rate in effect for Level

IV of the Executive Schedule. A member of the Corporate Board

shall be reimbursed for travel, subsistence, and other necessary

expenses incurred by the member in the performance of the duties

of the member.

‘‘(j) CONFLICT OF INTEREST; FINANCIAL DISCLOSURE.—

‘‘(1) CONFLICT OF INTEREST.—Except as provided in paragraph (3), no member of the Corporate Board shall vote on

any matter respecting any application, contract, claim, or other

particular matter pending before the Corporation, in which,

to the knowledge of the member, the member, spouse, or child

of the member, partner, or organization in which the member

is serving as officer, director, trustee, partner, or employee,

or any person or organization with whom the member is negotiating or has any arrangement concerning prospective employment, has a financial interest.

‘‘(2) VIOLATIONS.—Violation of paragraph (1) by a member

of the Corporate Board shall be cause for removal of the member, but shall not impair or otherwise affect the validity of

any otherwise lawful action by the Corporation in which the

member participated.
110 STAT. 1118 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(3) EXCEPTIONS.—The prohibitions contained in paragraph

(1) shall not apply if a member of the Corporate Board advises

the Corporate Board of the nature of the particular matter

in which the member proposes to participate, and if the member

makes a full disclosure of the financial interest, prior to any

participation, and the Corporate Board determines, by majority

vote, that the financial interest is too remote or too inconsequential to affect the integrity of the member’s services to

the Corporation in that matter. The member involved shall

not vote on the determination.

‘‘(4) FINANCIAL DISCLOSURE.—A Board member shall be

subject to the financial disclosure requirements set forth in

subchapter B of chapter XVI of title 5, Code of Federal Regulations (or any corresponding or similar regulation or ruling),

applicable to a special Government employee (as defined in

section 202(a) of title 18, United States Code).

‘‘(k) DELEGATION OF AUTHORITY.—

‘‘(1) IN GENERAL.—The Corporate Board may, by resolution,

delegate to the Chairperson, the Executive Director, or any

other officer or employee any function, power, or duty assigned

to the Corporation under this subtitle, other than a function,

power, or duty expressly vested in the Corporate Board by

subsections (c) through (n).

‘‘(2) PROHIBITION ON DELEGATION.—Notwithstanding any

other law, the Secretary and any other officer or employee

of the United States shall not make any delegation to the

Corporate Board, the Chairperson, the Executive Director, or

the Corporation of any power, function, or authority not

expressly authorized by this subtitle, unless the delegation

is made pursuant to an authority in law that expressly makes

reference to this section.

‘‘(3) REORGANIZATION ACT.—Notwithstanding any other law,

the President (through authorities provided under chapter 9

of title 5, United States Code) may not authorize the transfer

to the Corporation of any power, function, or authority in

addition to powers, functions, and authorities provided by law.

‘‘(l) BYLAWS.—Notwithstanding section 1658(f)(2), the Corporate

Board shall adopt, and may from time to time amend, any bylaw

that is necessary for the proper management and functioning of

the Corporation. The Corporate Board shall not adopt any bylaw

that has not been reviewed and approved by the Secretary.

‘‘(m) ORGANIZATION.—The Corporate Board shall provide a system of organization to fix responsibility and promote efficiency.

‘‘(n) PERSONNEL AND FACILITIES OF CORPORATION.—

‘‘(1) APPOINTMENT AND COMPENSATION OF PERSONNEL.—

The Corporation may select and appoint officers, attorneys,

employees, and agents, who shall be vested with such powers

and duties as the Corporation may determine.

‘‘(2) USE OF FACILITIES AND SERVICES OF THE DEPARTMENT

OF AGRICULTURE.—Notwithstanding any other provision of law,

to perform the responsibilities of the Corporation under this

subtitle, the Corporation may partially or jointly utilize the

facilities of and the services of employees of the Department

of Agriculture, without cost to the Corporation.

‘‘(3) GOVERNMENT EMPLOYMENT LAWS.—An officer or

employee of the Corporation shall be subject to all laws of

the United States relating to governmental employment.’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1119

(b) CONFORMING AMENDMENT.—Section 5315 of title 5, United

States Code, is amended by adding at the end the following:

‘‘Executive Director of the Alternative Agricultural

Research and Commercialization Corporation.’’.

SEC. 724. RESEARCH AND DEVELOPMENT GRANTS, CONTRACTS, AND

AGREEMENTS.

Section 1660 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5904) is amended—

(1) by striking ‘‘Center’’ each place it appears and inserting

‘‘Corporation’’;

(2) in subsection (c), by striking ‘‘Board’’ and inserting

‘‘Corporate Board’’; and

(3) in subsection (f), by striking ‘‘non-Center’’ and inserting

‘‘non-Corporation’’.

SEC. 725. COMMERCIALIZATION ASSISTANCE.

Section 1661 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5905) is amended—

(1) by striking ‘‘Center’’ each place it appears and inserting

‘‘Corporation’’;

(2) by striking ‘‘Board’’ each place it appears and inserting

‘‘Corporate Board’’;

(3) by striking subsection (c);

(4) by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively; and

(5) in subsection (c) (as so redesignated)—

(A) in the subsection heading of paragraph (1), by

striking ‘‘DIRECTOR’’ and inserting ‘‘EXECUTIVE DIRECTOR’’;

and

(B) by striking ‘‘Director’’ each place it appears and

inserting ‘‘Executive Director’’.

SEC. 726. GENERAL RULES REGARDING THE PROVISION OF ASSISTANCE.

Section 1662 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5906) is amended—

(1) by striking ‘‘Center’’ each place it appears (except in

subsection (b)) and inserting ‘‘Corporation’’;

(2) by striking ‘‘Board’’ each place it appears and inserting

‘‘Corporate Board’’; and

(3) in subsection (b)—

(A) in the second sentence, by striking ‘‘Board, a

Regional Center, or the Advisory Council’’ and inserting

‘‘Board or a Regional Center’’; and

(B) by striking the third sentence.

SEC. 727. REGIONAL CENTERS.

Section 1663 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5907) is amended—

(1) by striking ‘‘Board’’ each place it appears and inserting

‘‘Corporate Board’’;

(2) in subsection (e)(8), by striking ‘‘Center’’ and inserting

‘‘Corporation’’; and

(3) in subsection (f)—

(A) in paragraph (2), by striking ‘‘in consultation with

the Advisory Council appointed under section 1661(c)’’; and
110 STAT. 1120 PUBLIC LAW 104–127—APR. 4, 1996

(B) by striking paragraphs (3) and (4) and inserting

the following:

‘‘(3) RECOMMENDATION.—The Regional Director, based on

the comments of the reviewers, shall make and submit a recommendation to the Board, which shall not be binding on

the Board.’’.

SEC. 728. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION REVOLVING FUND.

Section 1664 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5908) is amended to read as follows:

‘‘SEC. 1664. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION REVOLVING FUND.

‘‘(a) ESTABLISHMENT.—There is established in the Treasury of

the United States a revolving fund to be known as the Alternative

Agricultural Research and Commercialization Revolving Fund. The

Fund shall be available to the Corporation, without fiscal year

limitation, to carry out this subtitle.

‘‘(b) CONTENTS OF FUND.—There shall be deposited in the

Fund—

‘‘(1) such amounts as may be appropriated or transferred

to support programs and activities of the Corporation;

‘‘(2) payments received from any source for products, services, or property furnished in connection with the activities

of the Corporation;

‘‘(3) fees and royalties collected by the Corporation from

licensing or other arrangements relating to commercialization

of products developed through projects funded in whole or part

by grants, contracts, or cooperative agreements executed by

the Corporation;

‘‘(4) proceeds from the sale of assets, loans, and equity

interests made in furtherance of the purposes of the Corporation;

‘‘(5) donations or contributions accepted by the Corporation

to support authorized programs and activities; and

‘‘(6) any other funds acquired by the Corporation.

‘‘(c) FUNDING ALLOCATIONS.—Funding of projects and activities

under this subtitle shall be subject to the following restrictions:

‘‘(1) Of the total amount of funds made available for a

fiscal year under this subtitle—

‘‘(A) not more than the lesser of 15 percent or $3,000,000 may be set aside to be used for authorized

administrative expenses of the Corporation;

‘‘(B) not more than 1 percent may be set aside to

be used for generic studies and specific reviews of individual proposals for financial assistance; and

‘‘(C) except as provided in subsection (e), not less than

84 percent shall be set aside to be awarded to qualified

applicants who file project applications with, or respond

to requests for proposals from, the Corporation under sections 1660 and 1661.

‘‘(2) Any funds remaining uncommitted at the end of a

fiscal year shall be credited to the Fund and added to the

total program funds available to the Corporation for the next

fiscal year.

‘‘(d) AUTHORIZED ADMINISTRATIVE EXPENSES.—For the purposes

of this section, authorized administrative expenses shall include
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1121

all ordinary and necessary expenses, including all compensation

for personnel and consultants, expenses for computer usage, or

space needs of the Corporation and similar expenses. Funds authorized for administrative expenses shall not be available for the

acquisition of real property.

‘‘(e) PROJECT MONITORING.—The Corporate Board may establish, in the bylaws of the Corporate Board, that a percentage

(which shall not exceed 1 percent) of the funds provided under

subsection (c) for any commercialization project shall be expended

to ensure that project funds are being utilized in accordance with

the project agreement.

‘‘(f) TERMINATION OF THE FUND.—On expiration of the authority

provided by this subtitle, all assets (after payment of all outstanding

obligations) of the Fund shall revert to the general fund of the

Treasury.

‘‘(g) AUTHORIZATION OF APPROPRIATIONS; CAPITALIZATION.— ‘‘(1) AUTHORIZATION OF APPROPRIATION.—There are authorized to be appropriated to the Fund $75,000,000 for each of

fiscal years 1996 through 2002.

‘‘(2) CAPITALIZATION.—The Executive Director may pay in

as capital of the Corporation, out of dollar receipts made available through annual appropriations, $75,000,000 for each of

fiscal years 1996 through 2002. On the payment of an amount

of capital by the Executive Director, the Corporation shall

issue an equivalent amount of capital stock to the Secretary

of the Treasury.

‘‘(3) TRANSFER.—All obligations, assets, and related rights

and responsibilities of the former Alternative Agricultural

Research and Commercialization Center established under

former section 1658 of this Act (as in effect on the day before

the date of enactment of the Federal Agriculture Improvement

and Reform Act of 1996) are transferred to the Corporation.’’.

SEC. 729. PROCUREMENT PREFERENCES FOR PRODUCTS RECEIVING

CORPORATION ASSISTANCE.

Subtitle G of title XVI of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 5901 et seq.) is amended by

adding at the end the following:

‘‘SEC. 1665. PROCUREMENT OF ALTERNATIVE AGRICULTURAL

RESEARCH AND COMMERCIALIZATION PRODUCTS.

‘‘(a) DEFINITION OF EXECUTIVE AGENCY.—In this section, the

term ‘executive agency’ has the meaning provided the term in

section 4(1) of the Office of Federal Procurement Policy Act (41

U.S.C. 403(1)).

‘‘(b) PROCUREMENT.—To further the achievement of the purposes specified in section 1657(b), an executive agency may, for

any procurement involving the acquisition of property, establish

set-asides and preferences for property that has been commercialized with assistance provided under this subtitle.

‘‘(c) SET-ASIDES.—Procurements solely for property may be set

aside exclusively for products developed with commercialization

assistance provided under section 1661.

‘‘(d) PREFERENCES.—Preferences for property developed with

assistance provided under this subtitle in procurements involving

the acquisition of property may be—

‘‘(1) a price preference, if the procurement is solely for

property, of not greater than a percentage to be determined

7 USC 5909.
110 STAT. 1122 PUBLIC LAW 104–127—APR. 4, 1996

within the sole discretion of the head of the procuring agency;

or

‘‘(2) a technical evaluation preference included as an award

factor or subfactor as determined within the sole discretion

of the head of the procuring agency.

‘‘(e) NOTICE.—Each competitive solicitation or invitation for

bids selected by an executive agency for a set-aside or preference

under this section shall contain a provision notifying offerors where

a list of products eligible for the set-aside or preference may be

obtained.

‘‘(f) ELIGIBILITY.—Offerors shall receive the set-aside or preference required under this section if, in the case of products developed with financial assistance under—

‘‘(1) section 1660, less than 10 years have elapsed since

the expiration of the grant, cooperative agreement, or contract;

‘‘(2) paragraph (1) or (2) of section 1661(a), less than 5

years have elapsed since the date the loan was made or insured;

‘‘(3) section 1661(a)(3), less than 5 years have elapsed since

the date of sale of any remaining government equity interest

in the company; or

‘‘(4) section 1661(a)(4), less than 5 years have elapsed since

the date of the final payment on the repayable grant.’’.

SEC. 730. BUSINESS PLAN AND FEASIBILITY STUDY AND REPORT.

(a) BUSINESS PLAN.—Not later than 180 days after the date

of enactment of this Act, the Alternative Agricultural Research

and Commercialization Corporation established by section 1658 of

the Food, Agriculture, Conservation, and Trade Act of 1990 shall—

(1) develop a 5-year business plan pursuant to section

1659(c)(1)(E) of the Act; and

(2) submit the plan to the Secretary of Agriculture, the

Committee on Agriculture of the House of Representatives,

and the Committee on Agriculture, Nutrition, and Forestry

of the Senate.

(b) FEASIBILITY STUDY AND REPORT.—

(1) STUDY.—The Secretary of Agriculture shall conduct a

study of, and prepare a report on, the continued feasibility

of the Alternative Agricultural Research and Commercialization

Corporation. In conducting the study, the Secretary shall examine options for privatizing the Corporation and converting the

Corporation to a Government-sponsored enterprise.

(2) REPORT.—Not later than December 31, 2001, the Secretary shall transmit the report required by paragraph (1)

to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry

of the Senate.

Subtitle B—Amendments to the Consolidated Farm and Rural Development Act

CHAPTER 1—GENERAL PROVISIONS

SEC. 741. WATER AND WASTE FACILITY LOANS AND GRANTS.

(a) IN GENERAL.—Section 306(a) of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1926(a)) is amended—

7 USC 5902 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1123

(1) in the first sentence of paragraph (2), by striking

‘‘$500,000,000’’ and inserting ‘‘$590,000,000’’;

(2) by striking paragraph (7) and inserting the following:

‘‘(7) DEFINITION OF RURAL AND RURAL AREAS.—For the purpose of water and waste disposal grants and direct and guaranteed loans provided under paragraphs (1) and (2), the terms

‘rural’ and ‘rural area’ mean a city, town, or unincorporated

area that has a population of no more than 10,000 inhabitants.’’;

(3) by striking paragraphs (9), (10), and (11) and inserting

the following:

‘‘(9) CONFORMITY WITH STATE DRINKING WATER STANDARDS.—No Federal funds shall be made available under this

section for a water system unless the Secretary determines

that the water system will make significant progress toward

meeting the standards established under title XIV of the Public

Health Service Act (commonly known as the ‘Safe Drinking

Water Act’) (42 U.S.C. 300f et seq.).

‘‘(10) CONFORMITY WITH FEDERAL AND STATE WATER POLLUTION CONTROL STANDARDS.—No Federal funds shall be made

available under this section for a water treatment discharge

or waste disposal system unless the Secretary determines that

the effluent from the system conforms with applicable Federal

and State water pollution control standards.

‘‘(11) RURAL BUSINESS OPPORTUNITY GRANTS.—

‘‘(A) IN GENERAL.—The Secretary may make grants,

not to exceed $1,500,000 annually, to public bodies, private

nonprofit community development corporations or entities,

or such other agencies as the Secretary may select to

enable the recipients—

‘‘(i) to identify and analyze business opportunities,

including opportunities in export markets, that will

use local rural economic and human resources;

‘‘(ii) to identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and

managers;

‘‘(iii) to establish business support centers and

otherwise assist in the creation of new rural

businesses, the development of methods of financing

local businesses, and the enhancement of the capacity

of local individuals and entities to engage in sound

economic activities;

‘‘(iv) to conduct regional, community, and local economic development planning and coordination, and

leadership development; and

‘‘(v) to establish centers for training, technology,

and trade that will provide training to rural businesses

in the utilization of interactive communications technologies to develop international trade opportunities

and markets.

‘‘(B) CRITERIA.—In awarding the grants, the Secretary

shall consider, among other criteria to be established by

the Secretary—

‘‘(i) the extent to which the applicant provides

development services in the rural service area of the

applicant; and
110 STAT. 1124 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(ii) the capability of the applicant to accomplish

the activities described in the relevant clauses of

subparagraph (A).

‘‘(C) COORDINATION.—The Secretary shall ensure, to

the maximum extent practicable, that assistance provided

under this paragraph is coordinated with and delivered

in cooperation with similar services or assistance provided

to rural residents by the Cooperative State Research, Education, and Extension Service or other Federal agencies.

‘‘(D) AUTHORIZATION OF APPROPRIATIONS.—There are

authorized to be appropriated to carry out this paragraph

$7,500,000 for each of fiscal years 1996 through 2002.’’;

(4) by striking paragraphs (14) and (15);

(5) by redesignating paragraphs (16) through (20) as paragraphs (14) through (18), respectively; and

(6) in paragraph (14) (as so redesignated)—

(A) by striking ‘‘(14)(A) The’’ and inserting the following:

‘‘(14) RURAL WATER AND WASTEWATER TECHNICAL ASSISTANCE AND TRAINING PROGRAMS.—

‘‘(A) IN GENERAL.—The’’;

(B) in subparagraph (A)—

(i) by striking ‘‘(i) identify’’ and inserting the following:

‘‘(i) identify’’;

(ii) by striking ‘‘(ii) prepare’’ and inserting the

following:

‘‘(ii) prepare’’; and

(iii) by striking ‘‘(iii) improve’’ and inserting the

following:

‘‘(iii) improve’’;

(C) in subparagraph (B), by striking ‘‘(B) In’’ and inserting the following:

‘‘(B) SELECTION PRIORITY.—In’’; and

(D) in subparagraph (C)—

(i) by striking ‘‘(C) Not’’ and inserting the following:

‘‘(C) FUNDING.—Not’’; and

(ii) by striking ‘‘2 per centum of any funds provided

in appropriations Acts’’ and inserting ‘‘3 percent of

any funds appropriated’’.

(b) CONFORMING AMENDMENT.—The second sentence of section

309A(a) of the Consolidated Farm and Rural Development Act

(7 U.S.C. 1929a(a)) (as amended by section 661(c)(1)) is amended

by striking ‘‘, 306(a)(14),’’.

SEC. 742. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM FOR SMALL COMMUNITIES.

Section 306A of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1926a) is amended—

(1) in subsection (e)—

(A) in paragraph (1)(A), by striking ‘‘15,000’’ and inserting ‘‘10,000’’; and

(B) in paragraph (2), by striking ‘‘5,000’’ and inserting

‘‘3,000’’; and

(2) by striking subsection (i) and inserting the following:
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1125

‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section $35,000,000 for each

of fiscal years 1996 through 2002.’’.

SEC. 743. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM FOR SMALLEST COMMUNITIES.

Section 306B of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1926b) is repealed.

SEC. 744. AGRICULTURAL CREDIT INSURANCE FUND.

Section 309(f) of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1929(f)) is amended—

(1) by striking paragraph (1); and

(2) by redesignating paragraphs (2) through (6) as paragraphs (1) through (5), respectively.

SEC. 745. RURAL DEVELOPMENT INSURANCE FUND.

Section 309A(g) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929a(g)) is amended—

(1) by striking paragraph (1); and

(2) by redesignating paragraphs (2) through (8) as paragraphs (1) through (7), respectively.

SEC. 746. INSURED WATERSHED AND RESOURCE CONSERVATION AND

DEVELOPMENT LOANS.

Section 310A of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1931) is repealed.

SEC. 747. RURAL INDUSTRIALIZATION ASSISTANCE.

(a) IN GENERAL.—Section 310B of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1932) is amended—

(1) in the first sentence of subsection (a)—

(A) by striking ‘‘and’’ at the end of clause (2); and

(B) by inserting before the period the following: ‘‘,

and (4) to facilitate economic opportunity for industries

undergoing adjustment from terminated Federal agricultural price and income support programs or increased competition from foreign trade’’;

(2) in subsection (b), by striking ‘‘(b)(1)’’ and all that follows

through ‘‘(2) The’’ and inserting the following:

‘‘(b) SOLID WASTE MANAGEMENT GRANTS.—The’’;

(3) in subsection (c)—

(A) by striking ‘‘(c)(1) The’’ and inserting the following:

‘‘(c) RURAL BUSINESS ENTERPRISE GRANTS.—

‘‘(1) IN GENERAL.—The’’;

(B) in paragraph (1), by inserting ‘‘(including nonprofit

entities)’’ after ‘‘private business enterprises’’;

(C) in paragraph (2)—

(i) by striking ‘‘(2) The’’ and inserting the following:

‘‘(2) PASSENGER TRANSPORTATION SERVICES OR FACILITIES.—

The’’; and

(ii) by striking ‘‘make grants’’ and inserting ‘‘award

grants on a competitive basis’’; and

(D) by adding at the end the following:

‘‘(3) GRANTS TO AID INDUSTRIES IN ADJUSTING TO TERMINATED FEDERAL AGRICULTURAL PROGRAMS OR INCREASED FOREIGN COMPETITION.—The Secretary may make grants under

this section to facilitate economic opportunity for industries
110 STAT. 1126 PUBLIC LAW 104–127—APR. 4, 1996

undergoing adjustment from terminated Federal agricultural

price and income support programs or increased competition

from foreign trade.’’;

(4) by striking subsection (e) and inserting the following:

‘‘(e) RURAL COOPERATIVE DEVELOPMENT GRANTS.—

‘‘(1) DEFINITIONS.—In this subsection:

‘‘(A) NONPROFIT INSTITUTION.—The term ‘nonprofit

institution’ means any organization or institution, including

an accredited institution of higher education, no part of

the net earnings of which inures, or may lawfully inure,

to the benefit of any private shareholder or individual.

‘‘(B) UNITED STATES.—The term ‘United States’ means

the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American

Samoa, and the other territories and possessions of the

United States.

‘‘(2) GRANTS.—The Secretary shall make grants under this

subsection to nonprofit institutions for the purpose of enabling

the institutions to establish and operate centers for rural

cooperative development.

‘‘(3) GOALS.—The goals of a center funded under this subsection shall be to facilitate the creation of jobs in rural areas

through the development of new rural cooperatives, value added

processing, and rural businesses.

‘‘(4) APPLICATION.—Any nonprofit institution seeking a

grant under paragraph (2) shall submit to the Secretary an

application containing a plan for the establishment and operation by the institution of a center or centers for cooperative

development. The Secretary may approve the application if

the plan contains the following:

‘‘(A) A provision that substantiates that the center

will effectively serve rural areas in the United States.

‘‘(B) A provision that the primary objective of the center

will be to improve the economic condition of rural areas

through cooperative development.

‘‘(C) A description of the activities that the center

will carry out to accomplish the objective. The activities

may include the following:

‘‘(i) Programs for applied research and feasibility

studies that may be useful to individuals, cooperatives,

small businesses, and other similar entities in rural

areas served by the center.

‘‘(ii) Programs for the collection, interpretation, and

dissemination of information that may be useful to

individuals, cooperatives, small businesses, and other

similar entities in rural areas served by the center.

‘‘(iii) Programs providing training and instruction

for individuals, cooperatives, small businesses, and

other similar entities in rural areas served by the

center.

‘‘(iv) Programs providing loans and grants to

individuals, cooperatives, small businesses, and other

similar entities in rural areas served by the center.

‘‘(v) Programs providing technical assistance,

research services, and advisory services to individuals,

cooperatives, small businesses, and other similar entities in rural areas served by the center.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1127

‘‘(vi) Programs providing for the coordination of

services and sharing of information among the center.

‘‘(D) A description of the contributions that the activities are likely to make to the improvement of the economic

conditions of the rural areas for which the center will

provide services.

‘‘(E) Provisions that the center, in carrying out the

activities, will seek, where appropriate, the advice, participation, expertise, and assistance of representatives of business, industry, educational institutions, the Federal

Government, and State and local governments.

‘‘(F) Provisions that the center will take all practicable

steps to develop continuing sources of financial support

for the center, particularly from sources in the private

sector.

‘‘(G) Provisions for—

‘‘(i) monitoring and evaluating the activities by

the nonprofit institution operating the center; and

‘‘(ii) accounting for money received by the institution under this section.

‘‘(5) AWARDING GRANTS.—Grants made under paragraph

(2) shall be made on a competitive basis. In making grants

under paragraph (2), the Secretary shall give preference to

grant applications providing for the establishment of centers

for rural cooperative development that—

‘‘(A) demonstrate a proven track record in administering a nationally coordinated, regionally or State-wide operated project;

‘‘(B) demonstrate previous expertise in providing technical assistance in rural areas;

‘‘(C) demonstrate the ability to assist in the retention

of businesses, facilitate the establishment of cooperatives

and new cooperative approaches, and generate employment

opportunities that will improve the economic conditions

of rural areas;

‘‘(D) demonstrate the ability to create horizontal linkages among businesses within and among various sectors

in rural areas of the United States and vertical linkages

to domestic and international markets;

‘‘(E) commit to providing technical assistance and other

services to underserved and economically distressed areas

in rural areas of the United States; and

‘‘(F) commit to providing greater than a 25 percent

matching contribution with private funds and in-kind contributions.

‘‘(6) 1-YEAR GRANTS; AUTHORITY TO APPROVE GRANT FOR

1 ADDITIONAL YEAR WITHOUT APPLICATION.—The Secretary shall

make grants under this subsection for a period of 1 year.

The Secretary shall evaluate programs receiving assistance

under this subsection. If the Secretary determines it to be

in the best interest of the program, the Secretary may award

an additional grant to the program for the immediately succeeding year without application for the grant.

‘‘(7) TECHNICAL ASSISTANCE TO PREVENT EXCESSIVE

UNEMPLOYMENT OR UNDEREMPLOYMENT.—In carrying out this

subsection, the Secretary may provide technical assistance to

alleviate or prevent conditions of excessive unemployment,
110 STAT. 1128 PUBLIC LAW 104–127—APR. 4, 1996

underemployment, outmigration, or low employment growth

in economically distressed rural areas that the Secretary determines have a substantial need for the assistance. The assistance

may include planning and feasibility studies, management and

operational assistance, and studies evaluating the need for

development potential of projects that increase employment

and improve economic growth in the areas.

‘‘(8) GRANTS TO DEFRAY ADMINISTRATIVE COSTS.—The Secretary may make grants to defray not to exceed 75 percent

of the costs incurred by organizations and public bodies to

carry out projects for which grants or loans are made under

this subsection. For purposes of determining the non-Federal

share of the costs, the Secretary shall consider contributions

in cash and in kind, fairly evaluated, including premises, equipment, and services.

‘‘(9) AUTHORIZATION OF APPROPRIATIONS.—There are

authorized to be appropriated to carry out this subsection

$50,000,000 for each of fiscal years 1996 through 2002.’’;

(5) by striking subsections (f), (g), (h), and (i);

(6) by redesignating subsection (j) as subsection (f); and

(7) by adding at the end the following:

‘‘(g) LOAN GUARANTEES FOR THE PURCHASE OF COOPERATIVE

STOCK.—

‘‘(1) DEFINITION OF FARMER.—In this subsection, the term

‘farmer’ means any farmer that the Secretary determines is

a family farmer.

‘‘(2) LOAN GUARANTEES.—The Secretary may guarantee

loans under this section to individual farmers for the purpose

of purchasing start-up capital stock of a farmer cooperative

established for the purpose of processing an agricultural

commodity.

‘‘(3) ELIGIBILITY.—To be eligible for a loan guarantee under

this subsection, a farmer must produce the agricultural

commodity that will be processed by the cooperative.’’.

(b) CONFORMING AMENDMENTS.—

(1) Clause (iii) of section 307(a)(6)(B) of the Consolidated

Farm and Rural Development Act (7 U.S.C. 1927(a)(6)(B)) (as

redesignated by section 661(a)(2)) is amended by striking ‘‘subsections (d) and (e) of section 310B’’ and inserting ‘‘section

310B(d)’’.

(2) Section 232(c)(2) of the Department of Agriculture

Reorganization Act of 1994 (7 U.S.C. 6942(c)(2)) is amended—

(A) by striking ‘‘310B(b)(2)’’ and inserting ‘‘310B(b)’’;

and

(B) by striking ‘‘1932(b)(2)’’ and inserting ‘‘1932(b)’’.

(3) Section 233(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6943(b)) is amended—

(A) by striking paragraph (2); and

(B) by redesignating paragraph (3) as paragraph (2).

SEC. 748. ADMINISTRATION.

Section 331(b)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981(b)(4)) is amended—

(1) by inserting after ‘‘claims’’ the following: ‘‘(including

debts and claims arising from loan guarantees)’’;

(2) by striking ‘‘Farmers Home Administration or’’ and

inserting ‘‘Consolidated Farm Service Agency, Rural Utilities
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1129

Service, Rural Housing Service, Rural Business-Cooperative

Service, or a successor agency, or’’; and

(3) by inserting after ‘‘activities under the Housing Act

of 1949.’’ the following: ‘‘In the case of a security instrument

entered into under the Rural Electrification Act of 1936 (7

U.S.C. 901 et seq.), the Secretary shall notify the Attorney

General of the intent of the Secretary to exercise the authority

of the Secretary under this paragraph.’’.

SEC. 749. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—Section 338 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1988) is amended—

(1) by striking subsections (b), (c), (d), and (e); and

(2) by redesignating subsection (f) as subsection (b).

(b) CONFORMING AMENDMENTS.—

(1) The first sentence of section 309(g)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(g)(1))

is amended by inserting after ‘‘section 338(c)’’ the following:

‘‘(before the amendment made by section 749(a)(1) of the Federal Agriculture Improvement and Reform Act of 1996)’’.

(2) Section 343(b) of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1991(b)) is amended by striking

‘‘338(f),’’ and inserting ‘‘338(b),’’.

SEC. 750. TESTIMONY BEFORE CONGRESSIONAL COMMITTEES.

Section 345 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1993) is repealed.

SEC. 751. PROHIBITION ON USE OF LOANS FOR CERTAIN PURPOSES.

Section 363 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2006e) is amended by adding at the end the following:

‘‘This section shall not apply to a loan made or guaranteed under

this title for a utility line.’’.

SEC. 752. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM.

The Consolidated Farm and Rural Development Act is amended

by inserting after section 363 (7 U.S.C. 2006e) the following:

‘‘SEC. 364. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM.

‘‘(a) CERTIFIED LENDERS PROGRAM.—

‘‘(1) IN GENERAL.—The Secretary may establish a program

under which the Secretary may guarantee a loan for any rural

development program that is made by a lender certified by

the Secretary.

‘‘(2) CERTIFICATION REQUIREMENTS.—The Secretary may

certify a lender if the lender meets such criteria as the Secretary may prescribe in regulations, including the ability of

the lender to properly make, service, and liquidate the guaranteed loans of the lender.

‘‘(3) CONDITION OF CERTIFICATION.—As a condition of certification, the Secretary may require the lender to undertake to

service the guaranteed loan using standards that are not less

stringent than generally accepted banking standards concerning

loan servicing that are used by prudent commercial or cooperative lenders.

‘‘(4) GUARANTEE.—Notwithstanding any other provision of

law, the Secretary may guarantee not more than 80 percent

of a loan made by a certified lender described in paragraph

7 USC 2006f.

Notification.
110 STAT. 1130 PUBLIC LAW 104–127—APR. 4, 1996

(1), if the borrower of the loan meets the eligibility requirements

and such other criteria for the loan guarantee that are established by the Secretary.

‘‘(5) CERTIFICATIONS.—With respect to loans to be guaranteed, the Secretary may permit a certified lender to make

appropriate certifications (as provided in regulations issued

by the Secretary)—

‘‘(A) relating to issues such as creditworthiness, repayment ability, adequacy of collateral, and feasibility of the

operation; and

‘‘(B) that the borrower is in compliance with all requirements of law, including regulations issued by the Secretary.

‘‘(6) RELATIONSHIP TO OTHER REQUIREMENTS.—This subsection shall not affect the responsibility of the Secretary to

determine eligibility, review financial information, and otherwise assess an application.

‘‘(b) PREFERRED CERTIFIED LENDERS PROGRAM.—

‘‘(1) IN GENERAL.—The Secretary may establish a preferred

certified lenders program for lenders who establish their—

‘‘(A) knowledge of, and experience under, the program

established under subsection (a);

‘‘(B) knowledge of the regulations concerning the

particular guaranteed loan program; and

‘‘(C) proficiency related to the certified lender program

requirements.

‘‘(2) ADDITIONAL LENDING INSTITUTIONS.—The Secretary

may certify any lending institution as a preferred certified

lender if the institution meets such additional criteria as the

Secretary may prescribe by regulation.

‘‘(3) REVOCATION OF DESIGNATION.—The designation of a

lender as a preferred certified lender shall be revoked if the

Secretary determines that the lender is not adhering to the

rules and regulations applicable to the program or if the loss

experiences of the preferred certified lender are greater than

other preferred certified lenders, except that the suspension

or revocation shall not affect any outstanding guarantee.

‘‘(4) CONDITION OF CERTIFICATION.—As a condition of the

preferred certification, the Secretary shall require the lender

to undertake to service the loan guaranteed by the Secretary

under this subsection using generally accepted banking standards concerning loan servicing employed by prudent commercial

or cooperative lenders. The Secretary shall, at least annually,

monitor the performance of each preferred certified lender to

ensure that the conditions of the certification are being met.

‘‘(5) EFFECT OF PREFERRED LENDER CERTIFICATION.—Notwithstanding any other provision of law, the Secretary may—

‘‘(A) guarantee not more than 80 percent of any

approved loan made by a preferred certified lender as

described in this subsection, if the borrower meets the

eligibility requirements and such other criteria as may

be applicable to loans guaranteed by the Secretary; and

‘‘(B) permit preferred certified lenders to make all decisions, with respect to loans to be guaranteed by the Secretary under this subsection relating to creditworthiness,

the closing, monitoring, collection, and liquidation of loans,

and to accept appropriate certifications, as provided in

regulations issued by the Secretary, that the borrower is
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1131

in compliance with all requirements of law and regulations

issued by the Secretary.’’.

SEC. 753. SYSTEM FOR DELIVERY OF CERTAIN RURAL DEVELOPMENT

PROGRAMS.

(a) IN GENERAL.—Section 365 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 2008) is repealed.

(b) CONFORMING AMENDMENTS.—

(1) Section 2375 of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 6613) is amended—

(A) in subsection (e), by striking ‘‘, as defined in section

365(b)(2) of the Consolidated Farm and Rural Development

Act,’’; and

(B) by adding at the end the following:

‘‘(g) DEFINITION OF DESIGNATED RURAL DEVELOPMENT PROGRAM.—In this section, the term ‘designated rural development

program’ means a program carried out under section 304(b), 306(a),

or 310B(e) of the Consolidated Farm and Rural Development Act

(7 U.S.C. 1924(b), 1926(a), and 1932(e)) for which funds are available at any time during the fiscal year.’’.

(2) Paragraph (2) of section 233(b) of the Department of

Agriculture Reorganization Act of 1994 (7 U.S.C. 6943(b)) (as

redesignated by section 747(b)(3)(B)) is amended by striking

‘‘sections 365 through 369 of the Consolidated Farm and Rural

Development Act (7 U.S.C. 2008–2008d)’’ and inserting ‘‘section

369 of the Consolidated Farm and Rural Development Act

(7 U.S.C. 2008d)’’.

SEC. 754. STATE RURAL ECONOMIC DEVELOPMENT REVIEW PANEL.

Section 366 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2008a) is repealed.

SEC. 755. LIMITED TRANSFER AUTHORITY OF LOAN AMOUNTS.

Section 367 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2008b) is repealed.

SEC. 756. ALLOCATION AND TRANSFER OF LOAN GUARANTEE AUTHORITY.

Section 368 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2008c) is repealed.

SEC. 757. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN

ALASKA.

The Consolidated Farm and Rural Development Act is amended

by inserting after section 306C (7 U.S.C. 1926c) the following:

‘‘SEC. 306D. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN

ALASKA.

‘‘(a) IN GENERAL.—The Secretary may make grants to the State

of Alaska for the benefit of rural or Native villages in Alaska

to provide for the development and construction of water and

wastewater systems to improve the health and sanitation conditions

in those villages.

‘‘(b) MATCHING FUNDS.—To be eligible to receive a grant under

subsection (a), the State of Alaska shall provide equal matching

funds from non-Federal sources.

‘‘(c) CONSULTATION WITH THE STATE OF ALASKA.—The Secretary

shall consult with the State of Alaska on a method of prioritizing

7 USC 1926d.
110 STAT. 1132 PUBLIC LAW 104–127—APR. 4, 1996

the allocation of grants under subsection (a) according to the needs

of, and relative health and sanitation conditions in, each village.

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to carry out this section $15,000,000 for each

of fiscal years 1996 through 2002.’’.

SEC. 758. APPLICATION REQUIREMENTS RELATING TO WATER AND

WASTE DISPOSAL LOAN AND GRANT PROGRAMS.

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 926(a)) is amended by inserting after paragraph

(4) the following:

‘‘(5) APPLICATION REQUIREMENTS.—Not earlier than 60 days

before a preliminary application is filed for a loan under paragraph (1) or a grant under paragraph (2) for a water or waste

disposal purpose, a notice of the intent of the applicant to

apply for the loan or grant shall be published in a general

circulation newspaper. The selection of engineers for a project

design shall be done by a request for proposals by the

applicant.’’.

SEC. 759. NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER.

The Consolidated Farm and Rural Development Act (as amended by section 649) is amended by adding at the end the following:

‘‘SEC. 375. NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER.

‘‘(a) DEFINITIONS.—In this section:

‘‘(1) BOARD.—The term ‘Board’ means the Board of Directors established under subsection (f).

‘‘(2) CENTER.—The term ‘Center’ means the National Sheep

Industry Improvement Center established under subsection (b).

‘‘(3) ELIGIBLE ENTITY.—The term ‘eligible entity’ means an

entity that promotes the betterment of the United States sheep

or goat industries and that is—

‘‘(A) a public, private, or cooperative organization;

‘‘(B) an association, including a corporation not operated for profit;

‘‘(C) a federally recognized Indian Tribe; or

‘‘(D) a public or quasi-public agency.

‘‘(4) FUND.—The term ‘Fund’ means the National Sheep

Industry Improvement Center Revolving Fund established

under subsection (e).

‘‘(b) ESTABLISHMENT OF CENTER.—The Secretary shall establish

a National Sheep Industry Improvement Center.

‘‘(c) PURPOSES.—The purposes of the Center shall be to—

‘‘(1) promote strategic development activities and collaborative efforts by private and State entities to maximize the

impact of Federal assistance to strengthen and enhance production and marketing of sheep or goat products in the United

States;

‘‘(2) optimize the use of available human capital and

resources within the sheep or goat industries;

‘‘(3) provide assistance to meet the needs of the sheep

or goat industry for infrastructure development, business development, production, resource development, and market and

environmental research;

‘‘(4) advance activities that empower and build the capacity

of the United States sheep or goat industry to design unique

Goats.

7 USC 2008j.

7 USC 1926.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1133

responses to the special needs of the sheep or goat industries

on both a regional and national basis; and

‘‘(5) adopt flexible and innovative approaches to solving

the long-term needs of the United States sheep or goat industry.

‘‘(d) STRATEGIC PLAN.—

‘‘(1) IN GENERAL.—The Center shall submit to the Secretary

an annual strategic plan for the delivery of financial assistance

provided by the Center.

‘‘(2) REQUIREMENTS.—A strategic plan shall identify—

‘‘(A) goals, methods, and a benchmark for measuring

the success of carrying out the plan and how the plan

relates to the national and regional goals of the Center;

‘‘(B) the amount and sources of Federal and non-Federal funds that are available for carrying out the plan;

‘‘(C) funding priorities;

‘‘(D) selection criteria for funding; and

‘‘(E) a method of distributing funding.

‘‘(e) REVOLVING FUND.—

‘‘(1) ESTABLISHMENT.—There is established in the Treasury

the National Sheep Industry Improvement Center Revolving

Fund. The Fund shall be available to the Center, without

fiscal year limitation, to carry out the authorized programs

and activities of the Center under this section.

‘‘(2) CONTENTS OF FUND.—There shall be deposited in the

Fund—

‘‘(A) such amounts as may be appropriated, transferred,

or otherwise made available to support programs and

activities of the Center;

‘‘(B) payments received from any source for products,

services, or property furnished in connection with the

activities of the Center;

‘‘(C) fees and royalties collected by the Center from

licensing or other arrangements relating to commercialization of products developed through projects funded, in

whole or part, by grants, contracts, or cooperative agreements executed by the Center;

‘‘(D) proceeds from the sale of assets, loans, and equity

interests made in furtherance of the purposes of the Center;

‘‘(E) donations or contributions accepted by the Center

to support authorized programs and activities; and

‘‘(F) any other funds acquired by the Center.

‘‘(3) USE OF FUND.—

‘‘(A) IN GENERAL.—The Center may use amounts in

the Fund to make grants and loans to eligible entities

in accordance with a strategic plan submitted under subsection (d).

‘‘(B) CONTINUED EXISTENCE.—The Center shall manage

the Fund in a manner that ensures that sufficient amounts

are available in the Fund to carry out subsection (c).

‘‘(C) DIVERSE AREA.—The Center shall, to the maximum

extent practicable, use the Fund to serve broad geographic

areas and regions of diverse production.

‘‘(D) VARIETY OF LOANS AND GRANTS.—The Center shall,

to the maximum extent practicable, use the Fund to provide

a variety of grants and intermediate- and long-term loans.
110 STAT. 1134 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(E) ADMINISTRATION.—The Center may not use more

than 3 percent of the amounts in the Fund for a fiscal

year for the administration of the Center.

‘‘(F) INFLUENCING LEGISLATION.—None of the amounts

in the Fund may be used to influence legislation.

‘‘(G) ACCOUNTING.—To be eligible to receive amounts

from the Fund, an entity must agree to account for the

amounts using generally accepted accounting principles.

‘‘(H) USES OF FUND.—The Center may use amounts

in the Fund to—

‘‘(i) participate with Federal and State agencies

in financing activities that are in accordance with a

strategic plan submitted under subsection (d), including participation with several States in a regional

effort;

‘‘(ii) participate with other public and private funding sources in financing activities that are in accordance with the strategic plan, including participation

in a regional effort;

‘‘(iii) provide security for, or make principal or

interest payments on, revenue or general obligation

bonds issued by a State, if the proceeds from the sale

of the bonds are deposited in the Fund;

‘‘(iv) accrue interest;

‘‘(v) guarantee or purchase insurance for local

obligations to improve credit market access or reduce

interest rates for a project that is in accordance with

the strategic plan; or

‘‘(vi) sell assets, loans, and equity interests

acquired in connection with the financing of projects

funded by the Center.

‘‘(4) LOANS.—

‘‘(A) RATE.—A loan from the Fund may be made at

an interest rate that is below the market rate or may

be interest free.

‘‘(B) TERM.—The term of a loan may not exceed the

shorter of—

‘‘(i) the useful life of the activity financed; or

‘‘(ii) 40 years.

‘‘(C) SOURCE OF REPAYMENT.—The Center may not

make a loan from the Fund unless the recipient establishes

an assured source of repayment.

‘‘(D) PROCEEDS.—All payments of principal and interest

on a loan made from the Fund shall be deposited into

the Fund.

‘‘(5) MAINTENANCE OF EFFORT.—The Center shall use the

Fund only to supplement and not to supplant Federal, State,

and private funds expended for rural development.

‘‘(6) FUNDING.—

‘‘(A) DEPOSIT OF FUNDS.—All Federal and non-Federal

amounts received by the Center to carry out this section

shall be deposited in the Fund.

‘‘(B) MANDATORY FUNDS.—Out of any moneys in the

Treasury not otherwise appropriated, the Secretary of the

Treasury shall provide to the Center not to exceed

$20,000,000 to carry out this section.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1135

‘‘(C) ADDITIONAL FUNDS.—In addition to any funds provided under subparagraph (B), there is authorized to be

appropriated $30,000,000 to carry out this section.

‘‘(D) PRIVATIZATION.—No additional Federal funds shall

be used to carry out this section beginning on the earlier

of—

‘‘(i) the date that is 10 years after the date of

enactment of this section; or

‘‘(ii) the day after a total of $50,000,000 has been

made available under subparagraphs (B) and (C) to

carry out this section.

‘‘(f) BOARD OF DIRECTORS.—

‘‘(1) IN GENERAL.—The management of the Center shall

be vested in a Board of Directors.

‘‘(2) POWERS.—The Board shall—

‘‘(A) be responsible for the general supervision of the

Center;

‘‘(B) review any grant, loan, contract, or cooperative

agreement to be made or entered into by the Center and

any financial assistance provided to the Center;

‘‘(C) make the final decision, by majority vote, on

whether and how to provide assistance to an applicant;

and

‘‘(D) develop and establish a budget plan and a longterm operating plan to carry out the goals of the Center.

‘‘(3) COMPOSITION.—The Board shall be composed of—

‘‘(A) 7 voting members, of whom—

‘‘(i) 4 members shall be active producers of sheep

or goats in the United States;

‘‘(ii) 2 members shall have expertise in finance

and management; and

‘‘(iii) 1 member shall have expertise in lamb, wool,

goat, or goat product marketing; and

‘‘(B) 2 nonvoting members, of whom—

‘‘(i) 1 member shall be the Under Secretary of

Agriculture for Rural Development; and

‘‘(ii) 1 member shall be the Under Secretary of

Agriculture for Research, Education, and Economics.

‘‘(4) NOMINATION.—

‘‘(A) NOMINATING BODY.—The Secretary shall appoint

the voting members of the Board from nominations submitted by organizations described in subparagraph (B).

‘‘(B) NATIONAL ORGANIZATIONS.—A national organization is described in this subparagraph if the organization—

‘‘(i) consists primarily of active sheep or goat

producers in the United States; and

‘‘(ii) has as the primary interest of the organization

the production of sheep or goats in the United States.

‘‘(5) TERM OF OFFICE.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the

term of office of a voting member of the Board shall be

3 years.

‘‘(B) STAGGERED INITIAL TERMS.—The initial voting

members of the Board (other than the chairperson of the

initially established Board) shall serve for staggered terms

of 1, 2, and 3 years, as determined by the Secretary.
110 STAT. 1136 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(C) REELECTION.—A voting member may be reelected

for not more than 1 additional term.

‘‘(6) VACANCY.— ‘‘(A) IN GENERAL.—A vacancy on the Board shall be

filled in the same manner as the original Board.

‘‘(B) REELECTION.—A member elected to fill a vacancy

for an unexpired term may be reelected for 1 full term.

‘‘(7) CHAIRPERSON.—

‘‘(A) IN GENERAL.—The Board shall select a chairperson

from among the voting members of the Board.

‘‘(B) TERM.—The term of office of the chairperson shall

be 2 years.

‘‘(8) ANNUAL MEETING.—

‘‘(A) IN GENERAL.—The Board shall meet not less than

once each fiscal year at the call of the chairperson or

at the request of the executive director appointed under

subsection (g)(1).

‘‘(B) LOCATION.—The location of a meeting of the Board

shall be established by the Board.

‘‘(9) VOTING.—

‘‘(A) QUORUM.—A quorum of the Board shall consist

of a majority of the voting members.

‘‘(B) MAJORITY VOTE.—A decision of the Board shall

be made by a majority of the voting members of the Board.

‘‘(10) CONFLICTS OF INTEREST.—

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

(D), a member of the Board shall not vote on any matter

respecting any application, contract, claim, or other particular matter pending before the Board in which, to the knowledge of the member, an interest is held by—

‘‘(i) the member;

‘‘(ii) any spouse of the member;

‘‘(iii) any child of the member;

‘‘(iv) any partner of the member;

‘‘(v) any organization in which the member is serving as an officer, director, trustee, partner, or employee;

or

‘‘(vi) any person with whom the member is negotiating or has any arrangement concerning prospective

employment or with whom the member has a financial

interest.

‘‘(B) REMOVAL.—Any action by a member of the Board

that violates subparagraph (A) shall be cause for removal

from the Board.

‘‘(C) VALIDITY OF ACTION.—An action by a member

of the Board that violates subparagraph (A) shall not

impair or otherwise affect the validity of any otherwise

lawful action by the Board.

‘‘(D) DISCLOSURE.—

‘‘(i) IN GENERAL.—If a member of the Board makes

a full disclosure of an interest and, prior to any participation by the member, the Board determines, by majority vote, that the interest is too remote or too inconsequential to affect the integrity of any participation

by the member, the member may participate in the

matter relating to the interest, except as provided in

subparagraph (E)(iii).
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1137

‘‘(ii) VOTE.—A member that discloses an interest

under clause (i) shall not vote on a determination

of whether the member may participate in the matter

relating to the interest.

‘‘(E) REMANDS.—

‘‘(i) IN GENERAL.—The Secretary may vacate and

remand to the Board for reconsideration any decision

made pursuant to subsection (e)(3)(H) if the Secretary

determines that there has been a violation of this

paragraph or any conflict of interest provision of the

bylaws of the Board with respect to the decision.

‘‘(ii) REASONS.—In the case of any violation and

remand of a funding decision to the Board under clause

(i), the Secretary shall inform the Board of the reasons

for the remand.

‘‘(iii) CONFLICTED MEMBERS NOT TO VOTE ON

REMANDED DECISIONS.—If a decision with respect to

a matter is remanded to the Board by reason of a

conflict of interest faced by a Board member, the member may not participate in any subsequent decision

with respect to the matter.

‘‘(11) COMPENSATION.—

‘‘(A) IN GENERAL.—A member of the Board shall not

receive any compensation by reason of service on the Board.

‘‘(B) EXPENSES.—A member of the Board shall be

reimbursed for travel, subsistence, and other necessary

expenses incurred by the member in the performance of

a duty of the member.

‘‘(12) BYLAWS.—The Board shall adopt, and may from time

to time amend, any bylaw that is necessary for the proper

management and functioning of the Center.

‘‘(13) PUBLIC HEARINGS.—Not later than 1 year after the

date of enactment of this section, the Board shall hold public

hearings on policy objectives of the program established under

this section.

‘‘(14) ORGANIZATIONAL SYSTEM.—The Board shall provide

a system of organization to fix responsibility and promote efficiency in carrying out the functions of the Board.

‘‘(15) USE OF DEPARTMENT OF AGRICULTURE.—The Board

may, with the consent of the Secretary, utilize the facilities

of and the services of employees of the Department of Agriculture, without cost to the Center.

‘‘(g) OFFICERS AND EMPLOYEES.—

‘‘(1) EXECUTIVE DIRECTOR.—

‘‘(A) IN GENERAL.—The Board shall appoint an executive director to be the chief executive officer of the Center.

‘‘(B) TENURE.—The executive director shall serve at

the pleasure of the Board.

‘‘(C) COMPENSATION.—Compensation for the executive

director shall be established by the Board.

‘‘(2) OTHER OFFICERS AND EMPLOYEES.—The Board may

select and appoint officers, attorneys, employees, and agents

who shall be vested with such powers and duties as the Board

may determine.

‘‘(3) DELEGATION.—The Board may, by resolution, delegate

to the chairperson, the executive director, or any other officer

or employee any function, power, or duty of the Board other
110 STAT. 1138 PUBLIC LAW 104–127—APR. 4, 1996

than voting on a grant, loan, contract, agreement, budget, or

annual strategic plan.

‘‘(h) CONSULTATION.—To carry out this section, the Board may

consult with—

‘‘(1) State departments of agriculture;

‘‘(2) Federal departments and agencies;

‘‘(3) nonprofit development corporations;

‘‘(4) colleges and universities;

‘‘(5) banking and other credit-related agencies;

‘‘(6) agriculture and agribusiness organizations; and

‘‘(7) regional planning and development organizations.

‘‘(i) OVERSIGHT.— ‘‘(1) IN GENERAL.—The Secretary shall review and monitor

compliance by the Board and the Center with this section.

‘‘(2) SANCTIONS.—If, following notice and opportunity for

a hearing, the Secretary finds that the Board or the Center

is not in compliance with this section, the Secretary may—

‘‘(A) cease making deposits to the Fund;

‘‘(B) suspend the authority of the Center to withdraw

funds from the Fund; or

‘‘(C) impose other appropriate sanctions, including

recoupment of money improperly expended for purposes

prohibited or not authorized by this Act and disqualification

from receipt of financial assistance under this section.

‘‘(3) RESCISSION OF SANCTIONS.—The Secretary shall

rescind sanctions imposed under paragraph (2) on a finding

by the Secretary that there is no longer any failure by the

Board or the Center to comply with this section or that the

noncompliance will be promptly corrected.’’.

SEC. 759A. COOPERATIVE AGREEMENTS.

Section 607(b) of the Rural Development Act of 1972 (7 U.S.C.

2204b(b)) is amended by striking paragraph (4) and inserting the

following:

‘‘(4) COOPERATIVE AGREEMENTS.— ‘‘(A) IN GENERAL.—Notwithstanding chapter 63 of title

31, United States Code, the Secretary may enter into

cooperative agreements with other Federal agencies, State

and local governments, and any other organization or

individual to improve the coordination and effectiveness

of Federal programs, services, and actions affecting rural

areas, including the establishment and financing of interagency groups, if the Secretary determines that the objectives of the agreement will serve the mutual interest of

the parties in rural development activities.

‘‘(B) COOPERATORS.—Each cooperator, including each

Federal agency, to the extent that funds are otherwise

available, may participate in any cooperative agreement

or working group established pursuant to this paragraph

by contributing funds or other resources to the Secretary

to carry out the agreement or functions of the group.’’.

SEC. 759B. ELIGIBILITY FOR GRANTS TO BROADCASTING SYSTEMS.

Section 310B(f) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(f)) (as redesignated by section 747(a)(6))

is amended by striking ‘‘SYSTEMS.—The’’ and inserting ‘‘SYSTEMS.—

‘‘(1) DEFINITION OF STATEWIDE.—In this subsection, the

term ‘statewide’ means having a coverage area of not less
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1139

than 90 percent of the population of a State and not less

than 80 percent of the rural land area of the State (as determined by the Secretary).

‘‘(2) GRANTS.—The’’.

CHAPTER 2—RURAL COMMUNITY ADVANCEMENT

PROGRAM

SEC. 761. RURAL COMMUNITY ADVANCEMENT PROGRAM.

The Consolidated Farm and Rural Development Act (7 U.S.C.

1921 et seq.) is amended by adding at the end the following:

‘‘Subtitle E—Rural Community

Advancement Program

‘‘SEC. 381A. DEFINITIONS.

‘‘In this subtitle:

‘‘(1) RURAL AND RURAL AREA.—The terms ‘rural’ and ‘rural

area’ mean, subject to section 306(a)(7), a city, town, or unincorporated area that has a population of 50,000 inhabitants or

less, other than an urbanized area immediately adjacent to

a city, town, or unincorporated area that has a population

in excess of 50,000 inhabitants.

‘‘(2) STATE.—The term ‘State’ means each of the 50 States,

the District of Columbia, the Commonwealth of Puerto Rico,

Guam, the Virgin Islands of the United States, American

Samoa, the Commonwealth of the Northern Mariana Islands,

the Trust Territory of the Pacific Islands, and the Federated

States of Micronesia.

‘‘(3) STATE DIRECTOR.—The term ‘State director’ means,

with respect to a State, the Director of the Rural Economic

and Community Development State Office.

‘‘SEC. 381B. ESTABLISHMENT.

‘‘The Secretary shall establish a rural community advancement

program to provide grants, loans, loan guarantees, and other assistance to meet the rural development needs of local communities

in States and federally recognized Indian tribes.

‘‘SEC. 381C. NATIONAL OBJECTIVES.

‘‘The national objectives of the program established under this

subtitle shall be to—

‘‘(1) promote strategic development activities and collaborative efforts by State and local communities, and federally

recognized Indian tribes, to maximize the impact of Federal

assistance;

‘‘(2) optimize the use of resources;

‘‘(3) provide assistance in a manner that reflects the

complexity of rural needs, including the needs for business

development, health care, education, infrastructure, cultural

resources, the environment, and housing;

‘‘(4) advance activities that empower, and build the capacity

of, State and local communities to design unique responses

to the special needs of the State and local communities, and

federally recognized Indian tribes, for rural development assistance; and

7 USC 2009b.

7 USC 2009a.

7 USC 2009.
110 STAT. 1140 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(5) adopt flexible and innovative approaches to solving

rural development problems.

‘‘SEC. 381D. STRATEGIC PLANS.

‘‘(a) IN GENERAL.—The Secretary shall direct each of the Directors of Rural Economic and Community Development State Offices

to prepare a strategic plan—

‘‘(1) for each State for the delivery of assistance under

this subtitle in the State; and

‘‘(2) for each federally recognized Indian tribe for the delivery of assistance under this subtitle to the Indian tribe.

‘‘(b) ASSISTANCE.— ‘‘(1) IN GENERAL.—Financial assistance for rural development provided under this subtitle for a State or a federally

recognized Indian tribe shall be used only for orderly community development that is consistent with the strategic plan

of the State or Indian tribe.

‘‘(2) RURAL AREA.—Assistance under this subtitle may only

be provided in a rural area.

‘‘(3) SMALL COMMUNITIES.—In carrying out this subtitle

in a State, the Secretary shall give priority to communities

with the smallest populations and lowest per capita income.

‘‘(c) REVIEW.—The Secretary shall review the strategic plan

of each State and federally recognized Indian tribe not later than

60 days after receiving the plan, and at least once every 5 years

thereafter.

‘‘(d) CONTENTS.—A strategic plan of a State or federally recognized Indian tribe under this section shall be a plan that—

‘‘(1) coordinates economic, human, and community development plans and related activities proposed for an affected area;

‘‘(2) provides that the State or federally recognized Indian

tribe, as appropriate, and an affected community (including

local institutions and organizations that have contributed to

the planning process) shall act as full partners in the process

of developing and implementing the plan;

‘‘(3) identifies goals, methods, and benchmarks for measuring the success of carrying out the plan and how the plan

relates to local or regional ecosystems;

‘‘(4) in the case of a State, provides for the involvement,

in the preparation of the plan, of State, local, private, and

public persons, State rural development councils, federally recognized Indian tribes in the State, and community-based

organizations;

‘‘(5) identifies the amount and source of Federal and nonFederal resources that are available for carrying out the plan;

and

‘‘(6) includes such other information as may be required

by the Secretary.

‘‘SEC. 381E. RURAL DEVELOPMENT TRUST FUND.

‘‘(a) ESTABLISHMENT.—There is established in the Treasury of

the United States a trust fund which shall be known as the Rural

Development Trust Fund (in this subtitle referred to as the ‘Trust

Fund’).

‘‘(b) ACCOUNTS.—There are established in the Trust Fund the

following accounts:

‘‘(1) The rural community facilities account.

‘‘(2) The rural utilities account.

7 USC 2009d.

7 USC 2009c.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1141

‘‘(3) The rural business and cooperative development

account.

‘‘(4) The national reserve account.

‘‘(5) The federally recognized Indian tribe account.

‘‘(c) DEPOSITS INTO ACCOUNTS.—Notwithstanding any other

provision of law, each fiscal year—

‘‘(1) all amounts made available to carry out the authorities

described in subsection (d)(1) for the fiscal year shall be deposited into the rural community facilities account of the Trust

Fund;

‘‘(2) all amounts made available to carry out the authorities

described in subsection (d)(2) for the fiscal year shall be deposited into the rural utilities account of the Trust Fund; and

‘‘(3) all amounts made available to carry out the authorities

described in subsection (d)(3) for the fiscal year shall be deposited into the rural business and cooperative development

account of the Trust Fund.

‘‘(d) FUNCTION CATEGORIES.—The function categories described

in this subsection are the following:

‘‘(1) RURAL COMMUNITY FACILITIES.—The rural community

development category consists of all amounts made available

for—

‘‘(A) community facility direct and guaranteed loans

under section 306(a)(1); or

‘‘(B) community facility grants under section 306(a)(19).

‘‘(2) RURAL UTILITIES.—The rural utilities category consists

of all amounts made available for—

‘‘(A) water or waste disposal grants or direct or guaranteed loans under paragraph (1) or (2) of section 306(a);

‘‘(B) rural water or wastewater technical assistance

and training grants under section 306(a)(14);

‘‘(C) emergency community water assistance grants

under section 306A; or

‘‘(D) solid waste management grants under section

310B(b).

‘‘(3) RURAL BUSINESS AND COOPERATIVE DEVELOPMENT.—

The rural business and cooperative development category consists of all amounts made available for—

‘‘(A) rural business opportunity grants under section

306(a)(11)(A);

‘‘(B) business and industry guaranteed loans under

section 310B(a)(1); or

‘‘(C) rural business enterprise grants or rural educational network grants under section 310B(c).

‘‘(e) NATIONAL RESERVE ACCOUNT.—

‘‘(1) TRANSFERS INTO ACCOUNT.—

‘‘(A) INITIAL TRANSFER.—Each fiscal year, the Secretary

shall transfer to the national reserve account of the Trust

Fund from each account specified in subsection (c) not

more than the applicable percentage of the amount deposited in each such account for the fiscal year under subsection (c).

‘‘(B) REPOOLING OF UNOBLIGATED FUNDS ALLOCATED

AMONG THE STATES.—Not earlier than July 15 of each

fiscal year, the Secretary shall transfer to the national

reserve account from each account specified in subsection

(c) any amount in the account that is allocated for any
110 STAT. 1142 PUBLIC LAW 104–127—APR. 4, 1996

State, and has not been obligated by the State director

or obligated for specific approved projects in the State.

‘‘(2) USE.—The Secretary may use amounts in the national

reserve account of the Trust Fund, pursuant to any authority

described in subsection (d)—

‘‘(A) in the case of a fiscal year other than fiscal year

2001 or 2002—

‘‘(i) to meet situations of exceptional need;

‘‘(ii) to meet emergency situations; or

‘‘(iii) to provide funds to entities whose applications

for funds provided under this subtitle have been

approved and who have not received funds sufficient

to meet the needs of the projects described in the

applications; or

‘‘(B) in the case of fiscal years 2001 and 2002—

‘‘(i) to meet situations of exceptional need; or

‘‘(ii) to meet emergency situations.

‘‘(3) APPLICABLE PERCENTAGE DEFINED.—In paragraph (1),

the term ‘applicable percentage’ means, with respect to a fiscal

year—

‘‘(A) 15 percent for fiscal year 1997;

‘‘(B) 12.5 percent for fiscal year 1998;

‘‘(C) 10 percent for fiscal year 1999;

‘‘(D) 7.5 percent for fiscal year 2000;

‘‘(E) 5 percent for fiscal year 2001; and

‘‘(F) 5 percent for fiscal year 2002.

‘‘(f) FEDERALLY RECOGNIZED INDIAN TRIBE ACCOUNT.—

‘‘(1) TRANSFERS INTO ACCOUNT.—Each fiscal year, the Secretary shall transfer to the federally recognized Indian tribe

account of the Trust Fund 3 percent of the amount deposited

into the Trust Fund for the fiscal year under subsection (d).

‘‘(2) USE OF FUNDS.—The Secretary shall make available

to federally recognized Indian tribes the amounts in the federally recognized Indian tribe account for use pursuant to any

authority described in subsection (d).

‘‘(g) ALLOCATION AMONG STATES.—The Secretary shall allocate

the amounts in each account specified in subsection (c) among

the States in a fair, reasonable, and appropriate manner that takes

into consideration rural population, levels of income, unemployment,

and other relevant factors, as determined by the Secretary.

‘‘(h) AVAILABILITY OF FUNDS ALLOCATED FOR STATES.—The Secretary shall make available to each State the total amount allocated

for the State under subsection (g) of this section that remains

after applying section 381G.

‘‘SEC. 381F. TRANSFERS OF FUNDS.

‘‘(a) GENERAL AUTHORITY.—Subject to subsection (b) of this

section, the State Director of any State may, during any fiscal

year, transfer from each account specified in section 381E(c) a

total of not more than 25 percent of the amount in the account

that is allocated for the State for the fiscal year to any other

account in which amounts are allocated for the State for the fiscal

year.

‘‘(b) LIMITATION.—Except as provided in subsection (c) of this

section, a transfer otherwise authorized by subsection (a) of this

section to be made during a fiscal year may not be made to the

extent that the sum of the amount to be transferred and all amounts

7 USC 2009e.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1143

so transferred by State directors under subsection (a) of this section

during the fiscal year exceeds 10 percent of the total amount made

available to carry out the authorities described in section 381E(d)

for the fiscal year.

‘‘(c) EXCEPTIONS.—Subsections (a) and (b) shall not apply to

a transfer of funds by a State director if the State director certifies

to the Secretary that—

‘‘(1) there is an approved application for a project in the

function category to which the funds are to be transferred

but funds are not available for the project in the function

category; and

‘‘(2)(A) there is no such approved application in the function

category from which the funds are to be transferred; or

‘‘(B) the community that would benefit from the project

has a smaller population and a lesser per capita income than

any community that would benefit from a project in the function

category from which the funds are to be transferred.

‘‘SEC. 381G. GRANTS TO STATES.

‘‘(a) SIMPLE GRANTS.—

‘‘(1) MANDATORY GRANT.—The Secretary shall make a grant

to any eligible State for any fiscal year for which the State

requests a grant under this section in an amount equal to

5 percent of the total amount allocated for the State under

section 381E(g).

‘‘(2) PERMISSIVE GRANT.—Before July 15 of each fiscal year,

the Secretary may make a grant to any State to defray the

cost of any subsidy associated with a guarantee provided by

an eligible public entity of the State under section 381H in

an amount that does not exceed 5 percent of the total amount

allocated for the State under section 381E(g).

‘‘(3) SOURCE OF FUNDS.—The Secretary shall make grants

to a State under paragraphs (1) and (2) from amounts allocated

for the State in the accounts specified in section 381E(c), by

reducing each such allocated amount by the same percentage.

‘‘(b) MATCHING GRANTS.—

‘‘(1) IN GENERAL.—Subject to paragraph (2), the Secretary

shall make a grant to any eligible State for any fiscal year

for which the State requests a grant under this section in

an amount equal to 5 percent of the amount allocated for

the State for the fiscal year under section 381E(h).

‘‘(2) ELIGIBILITY.—A State shall be eligible for a grant

under paragraph (1) if the State makes commitments to the

Secretary to—

‘‘(A) expend from non-Federal sources in accordance

with subsection (c) an amount that is not less than 200

percent of the amount of the grant; and

‘‘(B) maintain the amounts paid to the State under

this subsection and the amount referred to in subparagraph

(A) in an account separate from all other State funds

until expended in accordance with subsection (c).

‘‘(3) SOURCE OF FUNDS.—If the Secretary makes a grant

under paragraph (1) before July 15 of the fiscal year, the

grant shall be made from amounts allocated for the State

in the accounts specified in section 381E(c) for the fiscal year,

by reducing each allocated amount by the same percentage.

7 USC 2009f.
110 STAT. 1144 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(c) USE OF FUNDS.—A State to which funds are provided

under this section shall use the funds in rural areas for any activity

authorized under the authorities described in section 381E(d) in

accordance with the State strategic plan referred to in section

381D.

‘‘(d) MAINTENANCE OF EFFORT.—The State shall provide assurances to the Secretary that funds provided to the State under

this section will be used only to supplement, not to supplant,

the amount of Federal, State, and local funds otherwise expended

for rural development assistance in the State.

‘‘(e) APPEALS.—The Secretary shall provide to a State an opportunity to appeal any action taken with respect to the State under

this section.

‘‘(f) ADMINISTRATIVE COSTS.—Federal funds shall not be used

for any administrative costs incurred by a State in carrying out

this subtitle.

‘‘(g) EXPENDITURE OF FUNDS BY STATE.—

‘‘(1) IN GENERAL.—Payments to a State from a grant under

this section for a fiscal year shall be obligated by the State

in the fiscal year or in the succeeding fiscal year. A State

shall obligate funds under this section to provide assistance

to rural areas.

‘‘(2) FAILURE TO OBLIGATE.—If a State fails to obligate

payments in accordance with paragraph (1), the Secretary shall

make an equal reduction in the amount of payments provided

to the State under this section for the immediately succeeding

fiscal year.

‘‘(3) NONCOMPLIANCE.—

‘‘(A) REVIEW.—The Secretary shall review and monitor

State compliance with this section.

‘‘(B) PENALTY.—If the Secretary finds that there has

been misuse of grant funds provided under this section,

or noncompliance with any of the terms and conditions

of a grant, after reasonable notice and opportunity for

a hearing—

‘‘(i) the Secretary shall notify the State of the

finding; and

‘‘(ii) no further payments to the State shall be

made with respect to the programs funded under this

section until the Secretary is satisfied that there is

no longer any failure to comply or that the noncompliance will be promptly corrected.

‘‘(C) OTHER SANCTIONS.—In the case of a finding of

noncompliance made pursuant to subparagraph (B), the

Secretary may, in addition to, or in lieu of, imposing the

sanctions described in subparagraph (B), impose other

appropriate sanctions, including recoupment of money

improperly expended for purposes prohibited or not authorized by this section and disqualification from the receipt

of financial assistance under this section.

‘‘(h) NO ENTITLEMENT TO CONTRACT, GRANT, OR ASSISTANCE.—

Nothing in this subtitle—

‘‘(1) entitles any person to assistance or a contract or grant;

or

‘‘(2) limits the right of a State to impose additional limitations or conditions on assistance or a contract or grant under

this section.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1145

‘‘SEC. 381H. GUARANTEE AND COMMITMENT TO GUARANTEE LOANS.

‘‘(a) DEFINITION OF ELIGIBLE PUBLIC ENTITY.—In this section,

the term ‘eligible public entity’ means any unit of general local

government.

‘‘(b) GUARANTEE AND COMMITMENT.—The Secretary, on such

terms and conditions as the Secretary may prescribe, may guarantee

and make commitments to guarantee notes or other obligations

issued by eligible public entities, or by public agencies designated

by the eligible public entities, for the purposes of financing rural

development activities authorized and funded under section 381G.

‘‘(c) LIMITATION.—The Secretary may not make a guarantee

or commitment to guarantee with respect to a note or other obligation if the total amount of outstanding notes or obligations guaranteed under this section (excluding any amount repaid under the

contract entered into under subsection (e)(1)(A)) for issuers in the

State would exceed an amount equal to 5 times the sum of the

total amount of grants made to the State under section 381G.

‘‘(d) PAYMENT OF PRINCIPAL, INTEREST, AND COSTS.—Notwithstanding any other provision of this subtitle, a State to which

a grant is made under section 381G may use the grant (including

program income derived from the grant) to pay principal and

interest due (including such servicing, underwriting, or other costs

as may be specified in regulations of the Secretary) on any note

or other obligation guaranteed under this section.

‘‘(e) REPAYMENT CONTRACT; SECURITY.—

‘‘(1) IN GENERAL.—To ensure the repayment of notes or

other obligations and charges incurred under this section and

as a condition for receiving the guarantees, the Secretary shall

require the issuer to—

‘‘(A) enter into a contract, in a form acceptable to

the Secretary, for repayment of notes or other obligations

guaranteed under this section;

‘‘(B) pledge any grant for which the issuer may become

eligible under this subtitle; and

‘‘(C) furnish, at the discretion of the Secretary, such

other security as may be considered appropriate by the

Secretary in making the guarantees.

‘‘(2) SECURITY.—To assist in ensuring the repayment of

notes or other obligations and charges incurred under this

section, a State shall pledge any grant for which the State

may become eligible under this subtitle as security for notes

or other obligations and charges issued under this section by

any eligible public entity in the State.

‘‘(f) PLEDGED GRANTS FOR REPAYMENTS.—Notwithstanding any

other provision of this subtitle, the Secretary may apply grants

pledged pursuant to paragraphs (1)(B) and (2) of subsection (e)

to any repayments due the United States as a result of the guarantees.

‘‘(g) OUTSTANDING OBLIGATIONS.—The total amount of outstanding obligations guaranteed on a cumulative basis by the Secretary

pursuant to subsection (b) shall not at any time exceed such amount

as may be authorized to be appropriated for such purpose for

any fiscal year.

‘‘(h) PURCHASE OF GUARANTEED OBLIGATIONS BY FEDERAL

FINANCING BANK.—Notes or other obligations guaranteed under

this section may not be purchased by the Federal Financing Bank.

7 USC 2009g.
110 STAT. 1146 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(i) FULL FAITH AND CREDIT.—The full faith and credit of the

United States is pledged to the payment of all guarantees made

under this section. Any such guarantee made by the Secretary

shall be conclusive evidence of the eligibility of the obligations

for the guarantee with respect to principal and interest. The validity

of the guarantee shall be incontestable in the hands of a holder

of the guaranteed obligations.

‘‘SEC. 381I. LOCAL INVOLVEMENT.

‘‘An application for assistance under this subtitle shall include

evidence of significant community support for the project for which

the assistance is requested. In the case of assistance for a community facilities or infrastructure project, the evidence shall be in

the form of a certification of support for the project from each

affected general purpose local government.

‘‘SEC. 381J. INTERSTATE COLLABORATION.

‘‘The Secretary shall permit the establishment of voluntary

pooling arrangements among States, and regional fund-sharing

agreements, to carry out projects receiving assistance under this

subtitle.

‘‘SEC. 381K. ANNUAL REPORT.

‘‘(a) IN GENERAL.—The Secretary, in collaboration with State,

local, public, and private entities, State rural development councils,

and community-based organizations, shall prepare an annual report

that contains evaluations, assessments, and performance outcomes

concerning the rural community advancement programs carried

out under this subtitle.

‘‘(b) SUBMISSION.—Not later than March 1 of each year, the

Secretary shall—

‘‘(1) submit the report required by subsection (a) to Congress and the chief executives of the States participating in

the program established under this subtitle; and

‘‘(2) make the report available to State and local participants.

‘‘SEC. 381L. RURAL DEVELOPMENT INTERAGENCY WORKING GROUP.

‘‘(a) IN GENERAL.—The Secretary shall provide leadership

within the Executive branch for, and assume responsibility for,

establishing an interagency working group chaired by the Secretary.

‘‘(b) DUTIES.—The working group shall establish policy for,

coordinate, make recommendations with respect to, and evaluate

the performance of, all Federal rural development efforts.

‘‘SEC. 381M. DUTIES OF RURAL ECONOMIC AND COMMUNITY DEVELOPMENT STATE OFFICES.

‘‘In carrying out this subtitle, the Director of a Rural Economic

and Community Development State Office shall—

‘‘(1) to the maximum extent practicable, ensure that the

State strategic plan referred to in section 381D is implemented;

‘‘(2) coordinate community development objectives within

the State;

‘‘(3) establish links between local, State, and field office

program administrators of the Department of Agriculture;

‘‘(4) ensure that recipient communities comply with

applicable Federal and State laws and requirements; and

7 USC 2009l.

7 USC 2009k.

7 USC 2009j.

7 USC 2009i.

7 USC 2009h.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1147

‘‘(5) integrate State development programs with assistance

under this subtitle.

‘‘SEC. 381N. ELECTRONIC TRANSFER.

‘‘The Secretary shall transfer funds in accordance with this

subtitle through electronic transfer as soon as practicable after

the date of enactment of this subtitle.

‘‘SEC. 381O. RURAL VENTURE CAPITAL DEMONSTRATION PROGRAM.

‘‘(a) IN GENERAL.—The Secretary may designate for each fiscal

year up to 10 community development venture capital organizations

to demonstrate the utility of guarantees to attract increased private

investment in rural private business enterprises.

‘‘(b) RURAL BUSINESS INVESTMENT POOL.—

‘‘(1) ESTABLISHMENT.—To be eligible to participate in the

demonstration program, an organization referred to in subsection (a) shall establish a rural business private investment

pool (referred to in this subsection as a ‘pool’) for the purpose

of making equity investments in rural private business enterprises.

‘‘(2) GUARANTEE.—From amounts in the national reserve

account of the Trust Fund, the Secretary shall guarantee the

funds in a pool against loss, except that the guarantee shall

not exceed an amount equal to 30 percent of the total funds

in the pool.

‘‘(3) AMOUNT.—The Secretary shall issue guarantees covering not more than $15,000,000 of contingent liabilities for each

of fiscal years 1996 through 2002.

‘‘(4) TERM.—The term of a guarantee provided under this

subsection shall not exceed 10 years.

‘‘(5) SUBMISSION OF PLAN.—To be eligible to participate

in the demonstration program, an organization referred to in

subsection (a) shall submit a plan that describes—

‘‘(A) potential sources and uses of the pool to be established by the organization;

‘‘(B) the utility of the guarantee authority in attracting

capital for the pool; and

‘‘(C) on selection, mechanisms for notifying State, local,

and private nonprofit business development organizations

and businesses of the existence of the pool.

‘‘(6) COMPETITION.—

‘‘(A) IN GENERAL.—The Secretary shall conduct a competition for the designation and establishment of pools.

‘‘(B) PRIORITY.—In conducting the competition, the Secretary shall give priority to organizations that—

‘‘(i) have a demonstrated record of performance,

or have a board and executive director with experience,

in venture capital, small business equity investment,

or community development finance;

‘‘(ii) propose to serve low-income communities;

‘‘(iii) propose to maintain an average investment

of not more than $500,000 from the pool of the

organization;

‘‘(iv) invest funds statewide or in a multicounty

region; and

‘‘(v) propose to target job opportunities resulting

from the investments primarily to economically dis7 USC 2009n.

7 USC 2009m.
110 STAT. 1148 PUBLIC LAW 104–127—APR. 4, 1996

advantaged individuals, as determined by the Secretary.

‘‘(C) GEOGRAPHIC DIVERSITY.—To the extent practicable, the Secretary shall designate organizations in

diverse geographic areas.’’.

SEC. 762. SIMPLIFIED, UNIFORM APPLICATION FOR ASSISTANCE FROM

ALL FEDERAL RURAL DEVELOPMENT PROGRAMS.

Not later than 1 year after the date of enactment of this

Act, the Secretary of Agriculture shall develop a streamlined, simplified, and uniform application which shall be used in applying

for assistance under all of the following:

(1) Sections 304(b), 306, 306A, 306C, 306D, 310B, and

375 and subtitle E of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b), 1926, 1926a, 1926c, 1926d, and

1932).

(2) Subtitle G of title XVI and sections 2281, 2333, and

2381 of the Food, Agriculture, Conservation, and Trade Act

of 1990 (7 U.S.C. 5901–5908, 5177a, 950aaa–2, and 3125b).

(3) Subtitle C of title IX of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102–

237: 7 U.S.C. 5930 note).

(4) Section 1323(b) of the Food Security Act of 1985 (Public

Law 99–198; 7 U.S.C. 1932 note).

(5) Title V and section 603(c) of the Rural Development

Act of 1972 (7 U.S.C. 2661–2669 and 2204a(c)).

(6) Sections 5 and 311 and title IV of the Rural Electrification Act of 1936 (7 U.S.C. 905, 940a, and 941–950b).

SEC. 763. COMMUNITY FACILITIES GRANT PROGRAM.

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 741(a)(5))

is amended by adding at the end the following:

‘‘(19) COMMUNITY FACILITIES GRANT PROGRAM.—

‘‘(A) IN GENERAL.—The Secretary may make grants,

in a total amount not to exceed $10,000,000 for any fiscal

year, to associations, units of general local government,

nonprofit corporations, and federally recognized Indian

tribes to provide the Federal share of the cost of developing

specific essential community facilities in rural areas.

‘‘(B) FEDERAL SHARE.—

‘‘(i) IN GENERAL.—Except as provided in clauses

(ii) and (iii), the Secretary shall, by regulation, establish the amount of the Federal share of the cost of

the facility under this paragraph.

‘‘(ii) MAXIMUM AMOUNT.—The amount of a grant

provided under this paragraph for a facility shall not

exceed 75 percent of the cost of developing the facility.

‘‘(iii) GRADUATED SCALE.—The Secretary shall provide for a graduated scale for the amount of the Federal

share provided under this paragraph, with higher Federal shares for facilities in communities that have lower

community population and income levels, as determined by the Secretary.’’.

7 USC 2204b

note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1149

Subtitle C—Amendments to the Rural

Electrification Act of 1936

SEC. 771. PURPOSES; INVESTIGATIONS AND REPORTS.

Section 2 of the Rural Electrification Act of 1936 (7 U.S.C.

902) is amended—

(1) by striking ‘‘SEC. 2. (a) The Secretary of Agriculture

is’’ and inserting the following:

‘‘SEC. 2. GENERAL AUTHORITY OF THE SECRETARY OF AGRICULTURE.

‘‘(a) LOANS.—The Secretary of Agriculture (referred to in this

Act as the ‘Secretary’) is’’;

(2) in subsection (a)—

(A) by striking ‘‘and the furnishing’’ the first place

it appears and all that follows through ‘‘central station

service’’; and

(B) by striking ‘‘systems; to make’’ and all that follows

and inserting ‘‘systems.’’; and

(3) by striking subsection (b) and inserting the following:

‘‘(b) INVESTIGATIONS AND REPORTS.—The Secretary may make,

or cause to be made, studies, investigations, and reports regarding

matters, including financial, technological, and regulatory matters,

affecting the condition and progress of electric, telecommunications,

and economic development in rural areas, and publish and disseminate information with respect to the matters.’’.

SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—Section 3 of the Rural Electrification Act

of 1936 (7 U.S.C. 903) is amended to read as follows:

‘‘SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated such sums as are

necessary to carry out this Act.’’.

(b) CONFORMING AMENDMENTS.—

(1) Section 301(a) of the Rural Electrification Act of 1936

(7 U.S.C. 931(a)) is amended—

(A) by striking ‘‘(a)’’ the first place the term appears;

and

(B) in paragraph (3), by striking ‘‘notwithstanding section 3(a) of title I,’’.

(2) Section 302(b)(2) of the Rural Electrification Act of

1936 (7 U.S.C. 932(b)(2)) is amended by striking ‘‘pursuant

to section 3(a) of this Act’’.

(3) The last sentence of section 406(a) of the Rural Electrification Act of 1936 (7 U.S.C. 946(a)) is amended by striking

‘‘pursuant to section 3(a) of this Act’’.

SEC. 773. LOANS FOR ELECTRICAL PLANTS AND TRANSMISSION LINES.

Section 4 of the Rural Electrification Act of 1936 (7 U.S.C.

904) is amended—

(1) in the first sentence—

(A) by striking ‘‘for the furnishing of’’ and all that

follows through ‘‘central station service and’’; and

(B) by striking ‘‘the provisions of sections 3(d) and

3(e) but without regard to the 25 per centum limitation

therein contained,’’ and inserting ‘‘section 3,’’;
110 STAT. 1150 PUBLIC LAW 104–127—APR. 4, 1996

(2) in the second sentence, by striking ‘‘: Provided further,

That all’’ and all that follows through ‘‘loan: And provided

further, That’’ and inserting ‘‘, except that’’; and

(3) in the third sentence, by striking ‘‘and section 5’’.

SEC. 774. LOANS FOR ELECTRICAL AND PLUMBING EQUIPMENT.

(a) IN GENERAL.—Section 5 of the Rural Electrification Act

of 1936 (7 U.S.C. 905) is repealed.

(b) CONFORMING AMENDMENTS.—Section 12(a) of the Rural

Electrification Act of 1936 (7 U.S.C. 912(a)) is amended—

(1) by striking ‘‘: Provided, however, That’’ and inserting

‘‘, except that,’’; and

(2) by striking ‘‘, and with respect to any loan made under

section 5,’’ and all that follows through ‘‘section 3’’.

SEC. 775. TESTIMONY ON BUDGET REQUESTS.

Section 6 of the Rural Electrification Act of 1936 (7 U.S.C.

906) is amended by striking the second sentence.

SEC. 776. TRANSFER OF FUNCTIONS OF ADMINISTRATION CREATED

BY EXECUTIVE ORDER.

Section 8 of the Rural Electrification Act of 1936 (7 U.S.C.

908) is repealed.

SEC. 777. ANNUAL REPORT.

Section 10 of the Rural Electrification Act of 1936 (7 U.S.C.

910) is repealed.

SEC. 778. PROHIBITION ON RESTRICTING WATER AND WASTE FACILITY

SERVICES TO ELECTRIC CUSTOMERS.

The Rural Electrification Act of 1936 is amended by inserting

after section 16 (7 U.S.C. 916) the following:

‘‘SEC. 17. PROHIBITION ON RESTRICTING WATER AND WASTE FACILITY

SERVICES TO ELECTRIC CUSTOMERS.

‘‘(a) PROHIBITION.—Assistance under any rural development

program administered by the Secretary or any agency of the Department of Agriculture shall not be conditioned on any requirement

that the recipient of the assistance accept or receive electric service

from any particular utility, supplier, or cooperative.

‘‘(b) ENSURING COMPLIANCE.—The Secretary shall establish, by

regulation, adequate safeguards to ensure that assistance under

any rural development program is not subject to such a condition.

The safeguards shall include periodic certifications and audits, and

appropriate measures and sanctions against any person violating,

or attempting to violate subsection (a).

‘‘(c) DEFINITION OF RURAL DEVELOPMENT PROGRAMS.—In this

section, the term ‘rural development program’ means the following:

‘‘(1) Sections 304(b), 306, 306A, 306C, 306D, 310B, and

375 and subtitle E of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b), 1926, 1926a, 1926c, 1926d, and

1932).

‘‘(2) Subtitle G of title XVI and sections 2281, 2333, and

2381 of the Food, Agriculture, Conservation, and Trade Act

of 1990 (7 U.S.C. 5901–5908, 5177a, 950aaa–2, and 3125b).

‘‘(3) Subtitle C of title IX of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102–

237; 7 U.S.C. 5930 note).

Regulations.

7 USC 917.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1151

‘‘(4) Section 1323(b) of the Food Security Act of 1985 (Public

Law 99–198; 7 U.S.C. 1932 note).

‘‘(5) Title V and section 603(c) of the Rural Development

Act of 1972 (7 U.S.C. 2661–2669 and 2204a(c)).

‘‘(6) Sections 5 and 311 and title IV of this Act (7 U.S.C.

905, 940a, and 941–950b).

‘‘(d) REGULATIONS.—Not later than 60 days after the date of

enactment of the Federal Agriculture Improvement and Reform

Act of 1996, the Secretary shall issue final regulations to ensure

compliance with subsection (a).’’.

SEC. 779. TELEPHONE LOAN TERMS AND CONDITIONS.

Section 309 of the Rural Electrification Act of 1936 (7 U.S.C.

939) is amended—

(1) in subsection (a), by striking ‘‘(a) IN GENERAL.—’’; and

(2) by striking subsection (b).

SEC. 780. PRIVATIZATION PROGRAM.

Section 311 of the Rural Electrification Act of 1936 (7 U.S.C.

940a) is repealed.

SEC. 781. RURAL BUSINESS INCUBATOR FUND.

(a) IN GENERAL.—Section 502 of the Rural Electrification Act

of 1936 (7 U.S.C. 950aa–1) is repealed.

(b) CONFORMING AMENDMENTS.—Section 501 of the Rural Electrification Act of 1936 (7 U.S.C. 950aa) is amended—

(1) in paragraph (5), by inserting ‘‘and’’ at the end;

(2) in paragraph (6), by striking ‘‘; and’’ at the end and

inserting a period; and

(3) by striking paragraph (7).

Subtitle D—Miscellaneous Rural

Development Provisions

SEC. 791. INTEREST RATE FORMULA.

(a) BANKHEAD-JONES FARM TENANT ACT.—Section 32(e) of the

Bankhead-Jones Farm Tenant Act (7 U.S.C. 1011) is amended

by striking the fifth sentence and inserting the following: ‘‘A loan

under this subsection shall be made under a contract that provides,

under such terms and conditions as the Secretary considers appropriate, for the repayment of the loan in not more than 30 years,

with interest at a rate not to exceed the current market yield

for outstanding municipal obligations with remaining periods to

maturity comparable to the average maturity for the loan, adjusted

to the nearest 1⁄8 of 1 percent.’’.

(b) WATERSHED PROTECTION AND FLOOD PREVENTION ACT.—

Section 8 of the Watershed Protection and Flood Prevention Act

(16 U.S.C. 1006a) is amended by striking the second sentence

and inserting the following: ‘‘A loan or advance under this section

shall be made under a contract or agreement that provides, under

such terms and conditions as the Secretary considers appropriate,

for the repayment of the loan or advance in not more than 50

years from the date when the principal benefits of the works of

improvement first become available, with interest at a rate not

to exceed the current market yield for outstanding municipal obliga-
110 STAT. 1152 PUBLIC LAW 104–127—APR. 4, 1996

tions with remaining periods to maturity comparable to the average

maturity for the loan, adjusted to the nearest 1⁄8 of 1 percent.’’.

SEC. 792. GRANTS FOR FINANCIALLY STRESSED FARMERS, DISLOCATED FARMERS, AND RURAL FAMILIES.

(a) IN GENERAL.—Section 502 of the Rural Development Act

of 1972 (7 U.S.C. 2662) is amended by striking subsection (f).

(b) CONFORMING AMENDMENTS.—

(1) Section 2389 of the Food, Agriculture, Conservation,

and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 2662

note) is amended by striking subsection (d).

(2) Section 503(c) of the Rural Development Act of 1972

(7 U.S.C. 2663(c)) is amended—

(A) in paragraph (1)—

(i) by striking ‘‘(1)’’;

(ii) by striking ‘‘section 502(e)’’ and all that follows

through ‘‘shall be distributed’’ and inserting ‘‘subsections (e), (h), and (i) of section 502 shall be distributed’’; and

(iii) by striking ‘‘objectives of’’ and all that follows

through ‘‘title’’ and inserting ‘‘objectives of subsections

(e), (h), and (i) of section 502’’; and

(B) by striking paragraph (2).

SEC. 793. FUND FOR RURAL AMERICA.

(a) IN GENERAL.—There is established in the Treasury of the

United States an account to be known as the Fund for Rural

America (referred to in this section as the ‘‘Account’’) to provide

funds for activities described in subsection (c).

(b) FUNDING.—

(1) IN GENERAL.—On January 1, 1997, October 1, 1998,

and October 1, 1999, out of any funds in the Treasury not

otherwise appropriated, the Secretary of the Treasury shall

transfer $100,000,000 to the Account.

(2) ENTITLEMENT.— The Secretary of Agriculture (referred

to in this section as the ‘‘Secretary’’)—

(A) shall be entitled to receive the funds transferred

to the Account under paragraph (1);

(B) shall accept the funds; and

(C) shall use the funds to carry out this section.

(3) PURPOSES.—Subject to subsection (d), of the amounts

transferred to the Account for a fiscal year, the Secretary

shall make available—

(A) for activities described in subsection (c)(1), not less

than 1⁄3 and not more than 2⁄3 of the funds in the Account;

and

(B) for activities described in subsection (c)(2), all funds

in the Account not made available by the Secretary for

activities described in subsection (c)(1).

(c) ACTIVITIES.—

(1) RURAL DEVELOPMENT.—

(A) IN GENERAL.—The Secretary may use the funds

in the Account for a rural development activity—

(i) authorized under the Housing Act of 1949 for—

(I) direct loans to low-income borrowers under

section 502 (42 U.S.C. 1472);

7 USC 2204f.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1153

(II) loans for financial assistance for housing

for domestic farm laborers under section 514 (42

U.S.C. 1484);

(III) financial assistance for housing for

domestic farm laborers under section 516 (42

U.S.C. 1486);

(IV) payments for elderly who are not now

receiving rental assistance under section 521 (42

U.S.C. 1490a);

(V) grants and contracts for mutual and selfhelp housing under section 523(b)(1)(A) (42 U.S.C.

1490c(b)(1)(A)); or

(VI) grants for rural housing preservation

under section 533 (42 U.S.C. 1490m); or

(ii) conducted under any rural development program, including a program authorized under—

(I) the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.);

(II) subtitle G of title XVI and title XXIII

of the Food, Agriculture, Conservation, and Trade

Act of 1990;

(III) title V of the Rural Development Act of

1971 (7 U.S.C. 2661 et seq.); or

(IV) section 1323(b) of the Food Security Act

of 1985 (Public Law 99–198; 7 U.S.C. 1932 note).

(B) LIMITATION ON PROGRAMS FUNDED.—The Secretary

may not expend funds made available to carry out activities

described in subparagraph (A) for any activity that did

not receive appropriations for fiscal year 1995. Funds

expended under this section for any program purpose shall

be spent in accordance with and subject to the applicable

program limitations, restrictions, and priorities found in

the underlying program authority and this Act.

(C) LIMITATION ON HOUSING ASSISTANCE.—Not more

than 20 percent of the funds made available to carry out

activities described in subparagraph (A) shall be made

available to carry out activities described in subparagraph

(A)(i).

(D) DISCLOSURE OF ALLOCATION.—For any fiscal year,

the Secretary shall not disclose the allocation of funds

under this section for any activity described in subparagraph (A) until the date that is 1 day after the date

of enactment of legislation authorizing appropriations for

the Department of Agriculture for any period in the fiscal

year.

(2) RESEARCH.—

(A) IN GENERAL.—The Secretary may use the funds

in the Account for research, extension, and education grants

to—

(i) increase international competitiveness, efficiency, and farm profitability;

(ii) reduce economic and health risks;

(iii) conserve and enhance natural resources;

(iv) develop new crops, new crop uses, and new

agricultural applications of biotechnology;

(v) enhance animal agricultural resources;

(vi) preserve plant and animal germplasm;
110 STAT. 1154 PUBLIC LAW 104–127—APR. 4, 1996

(vii) increase economic opportunities in farming

and rural communities; and

(viii) expand locally-owned value-added processing.

(B) ELIGIBLE GRANTEE.—The Secretary may make a

grant under this paragraph to—

(i) a Federal research agency;

(ii) a national laboratory;

(iii) a college or university or a research foundation

maintained by a college or university; or

(iv) a private research organization with an established and demonstrated capacity to perform research

or technology transfer.

(C) USE OF GRANT.—

(i) IN GENERAL.—A grant made under this paragraph may be used by a grantee for 1 or more of

the following uses:

(I) Outcome-oriented research at the discovery

end of the spectrum to provide breakthrough

results.

(II) Exploratory and advanced development

and technology with well-identified outcomes.

(III) A national, regional, or multi-State program oriented primarily toward extension programs and education programs demonstrating and

supporting the competitiveness of United States

agriculture.

(ii) SMALLER INSTITUTIONS.—Of the amounts made

available for activities described in this paragraph,

not less than 15 percent shall be awarded to colleges,

universities, or research foundations eligible for a grant

under subparagraph (B)(iii) that rank in the lowest

1⁄3 of such colleges, universities, and foundations on

the basis of Federal research funds received under

a provision of law other than this section.

(D) ADMINISTRATION.—

(i) PRIORITY.—In administering this paragraph, the

Secretary shall—

(I) establish criteria for allocating grants based

on the priorities in subparagraph (A) and in consultation with the National Agricultural Research,

Extension, Education, and Economics Advisory

Board established under section 1408 of the

National Agricultural Research, Extension, and

Teaching Policy Act of 1977 (7 U.S.C. 3123);

(II) seek and accept proposals for grants;

(III) determine the relevance and merit of

proposals through a system of peer review and

review by the National Agricultural Research,

Extension, Education, and Economics Advisory

Board; and

(IV) award grants on the basis of merit, quality, and relevance to advancing the purposes of

federally supported agricultural research, extension, and education provided in section 1402 of

the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3101).
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1155

(ii) COMPETITIVE BASIS.—A grant under this paragraph shall be awarded on a competitive basis.

(iii) TERMS.—A grant under this paragraph shall

have a term that does not exceed 5 years.

(iv) MATCHING FUNDS.—As a condition of making

a grant under this paragraph, the Secretary shall

require the funding of the grant with equal matching

funds from a non-Federal source if the grant is—

(I) for applied research that is commodity-specific; and

(II) not of national scope.

(v) DELEGATION.—The Secretary shall administer

this section through the Cooperative State Research,

Education, and Extension Service of the Department

of Agriculture.

(vi) AVAILABILITY OF FUNDS.—Funds shall be available for obligation under this paragraph for a 2-year

period.

(vii) ADMINISTRATIVE COSTS.—The Secretary may

use not more than 4 percent of the funds made available for activities described in this paragraph for

administrative costs incurred by the Secretary in carrying out this paragraph.

(viii) BUILDINGS.—Funds made available for activities described in this paragraph shall not be used

for the construction of a new building or the acquisition, expansion, remodeling, or alteration of an existing

building (including site grading and improvement and

architect fees).

(d) LIMITATIONS.—Amounts in the Account may not be used

for an activity described in subsection (c) for a fiscal year if the

program funding level for the fiscal year for the activity is less

than 90 percent of the amount appropriated for the activity for

fiscal year 1996, adjusted for inflation.

SEC. 794. UNDER SECRETARY OF AGRICULTURE FOR RURAL ECONOMIC AND COMMUNITY DEVELOPMENT RENAMED THE

UNDER SECRETARY OF AGRICULTURE FOR RURAL

DEVELOPMENT.

(a) IN GENERAL.—Section 231 of the Department of Agriculture

Reorganization Act of 1994 (7 U.S.C. 6941) is amended—

(1) in the section heading, by striking ‘‘ECONOMIC AND

COMMUNITY’’; and

(2) by striking ‘‘Economic and Community’’ each place such

term appears in subsections (a), (b), and (c).

(b) CONFORMING AMENDMENT.—Section 5314 of title 5, United

States Code, is amended by striking ‘‘Economic and Community’’.
110 STAT. 1156 PUBLIC LAW 104–127—APR. 4, 1996

TITLE VIII—RESEARCH, EXTENSION,

AND EDUCATION

Subtitle A—Modification and Extension of

Activities Under 1977 Act

SEC. 801. PURPOSES OF AGRICULTURAL RESEARCH, EXTENSION, AND

EDUCATION.

Section 1402 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3101) is amended to

read as follows:

‘‘SEC. 1402. PURPOSES OF AGRICULTURAL RESEARCH, EXTENSION,

AND EDUCATION.

‘‘The purposes of federally supported agricultural research,

extension, and education are to—

‘‘(1) enhance the competitiveness of the United States agriculture and food industry in an increasingly competitive world

environment;

‘‘(2) increase the long-term productivity of the United States

agriculture and food industry while maintaining and enhancing

the natural resource base on which rural America and the

United States agricultural economy depend;

‘‘(3) develop new uses and new products for agricultural

commodities, such as alternative fuels, and develop new crops;

‘‘(4) support agricultural research and extension to promote

economic opportunity in rural communities and to meet the

increasing demand for information and technology transfer

throughout the United States agriculture industry;

‘‘(5) improve risk management in the United States agriculture industry;

‘‘(6) improve the safe production and processing of, and

adding of value to, United States food and fiber resources

using methods that maintain the balance between yield and

environmental soundness;

‘‘(7) support higher education in agriculture to give the

next generation of Americans the knowledge, technology, and

applications necessary to enhance the competitiveness of United

States agriculture; and

‘‘(8) maintain an adequate, nutritious, and safe supply of

food to meet human nutritional needs and requirements.’’.

SEC. 802. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMICS ADVISORY BOARD.

(a) IN GENERAL.—Section 1408 of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3123) is amended to read as follows:

‘‘SEC. 1408. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMICS ADVISORY BOARD.

‘‘(a) ESTABLISHMENT.—The Secretary shall establish within the

Department of Agriculture a board to be known as the ‘National

Agricultural Research, Extension, Education, and Economics

Advisory Board’.

‘‘(b) MEMBERSHIP.—
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1157

‘‘(1) IN GENERAL.—The Advisory Board shall consist of 30

members, appointed by the Secretary.

‘‘(2) SELECTION OF MEMBERS.—The Secretary shall appoint

members of the Advisory Board from nominations submitted

by organizations, associations, societies, councils, federations,

groups, and companies fitting the criteria specified in paragraph

(3).

‘‘(3) MEMBERSHIP CATEGORIES.—The Advisory Board shall

consist of members from each of the following categories:

‘‘(A) 1 member representing a national farm organization.

‘‘(B) 1 member representing farm cooperatives.

‘‘(C) 1 member actively engaged in the production of

a food animal commodity.

‘‘(D) 1 member actively engaged in the production of

a plant commodity.

‘‘(E) 1 member representing a national animal commodity organization.

‘‘(F) 1 member representing a national crop commodity

organization.

‘‘(G) 1 member representing a national aquaculture

association.

‘‘(H) 1 member representing a national food animal

science society.

‘‘(I) 1 member representing a national crop, soil, agronomy, horticulture, or weed science society.

‘‘(J) 1 member representing a national food science

organization.

‘‘(K) 1 member representing a national human health

association.

‘‘(L) 1 member representing a national nutritional

science society.

‘‘(M) 1 member representing the land-grant colleges

and universities eligible to receive funds under the Act

of July 2, 1862 (7 U.S.C. 301 et seq.).

‘‘(N) 1 member representing the land-grant colleges

and universities eligible to receive funds under the Act

of August 30, 1890 (7 U.S.C. 321 et seq.), including

Tuskegee University.

‘‘(O) 1 member representing the 1994 Institutions (as

defined in section 532 of the Equity in Educational LandGrant Status Act of 1994 (Public Law 103–382; 7 U.S.C.

301 note)).

‘‘(P) 1 member representing Hispanic-serving institutions.

‘‘(Q) 1 member representing the American Colleges

of Veterinary Medicine.

‘‘(R) 1 member representing that portion of the scientific community not closely associated with agriculture.

‘‘(S) 1 member engaged in the transportation of food

and agricultural products to domestic and foreign markets.

‘‘(T) 1 member representing food retailing and marketing interests.

‘‘(U) 1 member representing food and fiber processors.

‘‘(V) 1 member actively engaged in rural economic

development.
110 STAT. 1158 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(W) 1 member representing a national consumer

interest group.

‘‘(X) 1 member representing a national forestry group.

‘‘(Y) 1 member representing a national conservation

or natural resource group.

‘‘(Z) 1 member representing private sector organizations involved in international development.

‘‘(AA) 1 member representing an agency within the

Department of Agriculture that lacks research capabilities.

‘‘(BB) 1 member representing a research agency of

the Federal Government (other than the Department of

Agriculture).

‘‘(CC) 1 member representing a national social science

association.

‘‘(DD) 1 member representing national organizations

directly concerned with agricultural research, education,

and extension.

‘‘(4) EX OFFICIO MEMBERS.—The Secretary, the Under Secretary of Agriculture for Research, Education, and Economics,

the Administrator of the Agricultural Research Service, the

Administrator of the Cooperative State Research, Education,

and Extension Service, the Administrator of the Economic

Research Service, and the Administrator of the National Agricultural Statistics Service shall serve as ex officio members

of the Advisory Board.

‘‘(5) OFFICERS.—At the first meeting of the Advisory Board

each year, the members shall elect from among the members

of the Advisory Board a chairperson, vice chairperson, and

7 additional members to serve on the executive committee

established under paragraph (6).

‘‘(6) EXECUTIVE COMMITTEE.—The Advisory Board shall

establish an executive committee charged with the responsibility of working with the Secretary and officers and employees

of the Department of Agriculture to summarize and disseminate

the recommendations of the Advisory Board.

‘‘(c) DUTIES.—The Advisory Board shall—

‘‘(1) review and provide consultation to the Secretary and

land-grant colleges and universities on long-term and shortterm national policies and priorities, as set forth in section

1402, relating to agricultural research, extension, education,

and economics;

‘‘(2) evaluate the results and effectiveness of agricultural

research, extension, education, and economics with respect to

the policies and priorities;

‘‘(3) review and make recommendations to the Under Secretary of Agriculture for Research, Education, and Economics

on the research, extension, education, and economics portion

of the draft strategic plan required under section 306 of title

5, United States Code; and

‘‘(4) review the mechanisms of the Department of Agriculture for technology assessment (which should be conducted

by qualified professionals) for the purposes of—

‘‘(A) performance measurement and evaluation of the

implementation by the Secretary of the strategic plan

required under section 306 of title 5, United States Code;

‘‘(B) implementation of the national research policies

and priorities set forth in section 1402; and
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1159

‘‘(C) the development of mechanisms for the assessment

of emerging public and private agricultural research and

technology transfer initiatives.

‘‘(d) CONSULTATION.—In carrying out this section, the Advisory

Board shall solicit opinions and recommendations from persons

who will benefit from and use federally funded agricultural

research, extension, education, and economics.

‘‘(e) APPOINTMENT.—A member of the Advisory Board shall

be appointed by the Secretary for a term of up to 3 years. The

members of the Advisory Board shall be appointed to serve staggered terms.

‘‘(f) FEDERAL ADVISORY COMMITTEE ACT.—The Advisory Board

shall be deemed to have filed a charter for the purpose of section

9(c) of the Federal Advisory Committee Act (5 U.S.C. App.).

‘‘(g) TERMINATION.—The Advisory Board shall remain in existence until September 30, 2002.’’.

(b) CONFORMING AMENDMENTS.—

(1) Section 1404(1) of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103(1))

is amended by striking ‘‘National Agricultural Research and

Extension Users Advisory Board’’ and inserting ‘‘National Agricultural Research, Extension, Education, and Economics

Advisory Board’’.

(2) Section 1410(2) of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3125(2))

is amended by striking ‘‘the recommendations of the Advisory

Board developed under section 1408(g),’’ and inserting ‘‘any

recommendations of the Advisory Board’’.

(3) The last sentence of section 4(a) of the Renewable

Resources Extension Act of 1978 (16 U.S.C. 1673(a)) is amended

by striking ‘‘National Agricultural Research and Extension

Users Advisory Board’’ and inserting ‘‘National Agricultural

Research, Extension, Education, and Economics Advisory

Board’’.

SEC. 803. FEDERAL ADVISORY COMMITTEE ACT EXEMPTION FOR FEDERAL-STATE COOPERATIVE PROGRAMS.

Section 1409A of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3124a) is amended

by adding at the end the following:

‘‘(e) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.—

‘‘(1) PUBLIC MEETINGS.—All meetings of any entity

described in paragraph (3) shall be publicly announced in

advance and shall be open to the public. Detailed minutes

of meetings and other appropriate records of the activities

of such an entity shall be kept and made available to the

public on request.

‘‘(2) EXEMPTION.—The Federal Advisory Committee Act (5

U.S.C. App.) and title XVIII of this Act shall not apply to

any entity described in paragraph (3).

‘‘(3) ENTITIES DESCRIBED.—This subsection shall apply to

any committee, board, commission, panel, or task force, or

similar entity that—

‘‘(A) is created for the purpose of cooperative efforts

in agricultural research, extension, or teaching; and

‘‘(B) consists entirely of—

‘‘(i) full-time Federal employees; and

Records.
110 STAT. 1160 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(ii) one or more individuals who are employed

by, or are officials of—

‘‘(I) a State cooperative institution or State

cooperative agency; or

‘‘(II) a public college or university or other

postsecondary institution.’’.

SEC. 804. COORDINATION AND PLANNING OF AGRICULTURAL

RESEARCH, EXTENSION, AND EDUCATION.

The National Agricultural Research, Extension, and Teaching

Policy Act of 1977 is amended by inserting after section 1413

(7 U.S.C. 3128) the following:

‘‘SEC. 1413A. ACCOUNTABILITY.

‘‘(a) REVIEW OF INFORMATION TECHNOLOGY SYSTEMS.—The Secretary shall conduct a comprehensive review of state-of-the-art

information technology systems that are available for use in developing the system required by subsection (b).

‘‘(b) MONITORING AND EVALUATION SYSTEM.—The Secretary

shall develop and carry out a system to monitor and evaluate

agricultural research and extension activities conducted or supported by the Department of Agriculture that will enable the Secretary to measure the impact and effectiveness of research, extension, and education programs according to priorities, goals, and

mandates established by law. In developing the system, the Secretary shall incorporate information transfer technologies to optimize public access to research information.

‘‘(c) CONSISTENCY WITH OTHER REQUIREMENTS.—The Secretary

shall develop and implement the system in a manner consistent

with the Government Performance and Results Act of 1993 (Public

Law 103–62; 107 Stat. 285) and amendments made by the Act.

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated such sums as are necessary to carry out this

section.

‘‘SEC. 1413B. FEDERAL ADVISORY COMMITTEE ACT EXEMPTION FOR

COMPETITIVE RESEARCH, EXTENSION, AND EDUCATION

PROGRAMS.

‘‘The Federal Advisory Committee Act (5 U.S.C. App.) and

title XVIII of this Act shall not apply to any committee, board,

commission, panel, or task force, or similar entity, created solely

for the purpose of reviewing applications or proposals requesting

funding under any competitive research, extension, or education

program carried out by the Secretary.’’.

SEC. 805. GRANTS AND FELLOWSHIPS FOR FOOD AND AGRICULTURAL

SCIENCES EDUCATION.

(a) PURPOSE OF GRANTS.—Section 1417(b) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7

U.S.C. 3152(b)) is amended by striking paragraph (4) and inserting

the following:

‘‘(4) to design and implement food and agricultural programs to build teaching and research capacity at colleges and

universities having significant minority enrollments;’’.

(b) RESEARCH FOUNDATIONS.—Section 1417(c) of the National

Agricultural Research, Extension, and Teaching Policy Act of 1977

(7 U.S.C. 3152(c)) is amended by adding at the end the following:

7 USC 3129a.

7 USC 3129.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1161

‘‘(3) RESEARCH FOUNDATIONS.—An eligible college or university under subsection (b) includes a research foundation maintained by the college or university.’’.

(c) EXTENSION OF PROGRAM.—Section 1417(i) of the National

Agricultural Research, Extension, and Teaching Policy Act of 1977

(7 U.S.C. 3152(i)) is amended by striking ‘‘1995’’ and inserting

‘‘1997’’.

(d) SECONDARY EDUCATION AND 2-YEAR POSTSECONDARY EDUCATION TEACHING PROGRAMS.—Section 1417 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7

U.S.C. 3152) is amended—

(1) by redesignating subsections (h) and (i) as subsections

(i) and (j), respectively; and

(2) by inserting after subsection (g) the following:

‘‘(h) SECONDARY EDUCATION AND 2-YEAR POSTSECONDARY EDUCATION TEACHING PROGRAMS.—

‘‘(1) DEFINITIONS.—In this subsection:

‘‘(A) INSTITUTION OF HIGHER EDUCATION.—The term

‘institution of higher education’ has the meaning given

the term in section 1201(a) of the Higher Education Act

of 1965 (20 U.S.C. 1141(a)).

‘‘(B) SECONDARY SCHOOL.—The term ‘secondary school’

has the meaning given the term in section 14101(25) of

the Elementary and Secondary Education Act of 1965 (20

U.S.C. 8801(25)).

‘‘(2) AGRISCIENCE AND AGRIBUSINESS EDUCATION.—The Secretary shall—

‘‘(A) promote and strengthen secondary education and

2-year postsecondary education in agriscience and agribusiness in order to help ensure the existence in the United

States of a qualified workforce to serve the food and agricultural sciences system; and

‘‘(B) promote complementary and synergistic linkages

among secondary, 2-year postsecondary, and higher education programs in the food and agricultural sciences in

order to promote excellence in education and encourage

more young Americans to pursue and complete a baccalaureate or higher degree in the food and agricultural

sciences.

‘‘(3) GRANTS.—The Secretary may make competitive or noncompetitive grants, for grant periods not to exceed 5 years,

to public secondary schools, and institutions of higher education

that award an associate’s degree, that the Secretary determines

have made a commitment to teaching agriscience and agribusiness—

‘‘(A) to enhance curricula in agricultural education;

‘‘(B) to increase faculty teaching competencies;

‘‘(C) to interest young people in pursuing higher education in order to prepare for scientific and professional

careers in the food and agricultural sciences;

‘‘(D) to promote the incorporation of agriscience and

agribusiness subject matter into other instructional programs, particularly classes in science, business, and

consumer education;

‘‘(E) to facilitate joint initiatives by the grant recipient

with other secondary schools, institutions of higher education that award an associate’s degree, and institutions
110 STAT. 1162 PUBLIC LAW 104–127—APR. 4, 1996

of higher education that award a bachelor’s degree to maximize the development and use of resources, such as faculty,

facilities, and equipment, to improve agriscience and agribusiness education; and

‘‘(F) to support other initiatives designed to meet local,

State, regional, or national needs related to promoting

excellence in agriscience and agribusiness education.’’.

SEC. 806. GRANTS FOR RESEARCH ON THE PRODUCTION AND MARKETING OF ALCOHOLS AND INDUSTRIAL HYDROCARBONS

FROM AGRICULTURAL COMMODITIES AND FOREST

PRODUCTS.

Section 1419(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3154(d)) is amended

by striking ‘‘1995’’ and inserting ‘‘1997’’.

SEC. 807. POLICY RESEARCH CENTERS.

The National Agricultural Research, Extension, and Teaching

Policy Act of 1977 is amended by inserting after section 1419

(7 U.S.C. 3154) the following:

‘‘SEC. 1419A. POLICY RESEARCH CENTERS.

‘‘(a) IN GENERAL.—Consistent with this section, the Secretary

may make grants, competitive grants, and special research grants

to, and enter into cooperative agreements and other contracting

instruments with, policy research centers described in subsection

(b) to conduct research and education programs that are objective,

operationally independent, and external to the Federal Government

and that concern the effect of public policies on—

‘‘(1) the farm and agricultural sectors;

‘‘(2) the environment;

‘‘(3) rural families, households, and economies; and

‘‘(4) consumers, food, and nutrition.

‘‘(b) ELIGIBLE RECIPIENTS.—State agricultural experiment stations, colleges and universities, other research institutions and

organizations, private organizations, corporations, and individuals

shall be eligible to apply for funding under subsection (a).

‘‘(c) ACTIVITIES.—Under this section, funding may be provided

for disciplinary and interdisciplinary research and education

concerning policy research activities consistent with this section,

including activities that—

‘‘(1) quantify the implications of public policies and regulations;

‘‘(2) develop theoretical and research methods;

‘‘(3) collect and analyze data for policymakers, analysts,

and individuals; and

‘‘(4) develop programs to train analysts.

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated such sums as are necessary to carry out this

section for fiscal years 1996 and 1997.’’.

SEC. 808. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH PROGRAM.

The National Agricultural Research, Extension, and Teaching

Policy Act of 1977 is amended by striking section 1424 (7 U.S.C.

3174) and inserting the following:

7 USC 3155.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1163

‘‘SEC. 1424. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH PROGRAM.

‘‘(a) AUTHORITY OF SECRETARY.—The Secretary may establish,

and award grants for projects for, a multi-year research initiative

on human nutrition intervention and health promotion.

‘‘(b) EMPHASIS OF INITIATIVE.—In administering human nutrition research projects under this section, the Secretary shall give

specific emphasis to—

‘‘(1) coordinated longitudinal research assessments of nutritional status; and

‘‘(2) the implementation of unified, innovative intervention

strategies,

to identify and solve problems of nutritional inadequacy and contribute to the maintenance of health, well-being, performance, and

productivity of individuals, thereby reducing the need of the individuals to use the health care system and social programs of the

United States.

‘‘(c) ADMINISTRATION OF FUNDS.—The Administrator of the Agricultural Research Service shall administer funds made available

to carry out this section to ensure a coordinated approach to health

and nutrition research efforts.

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated such sums as are necessary to carry out this

section for fiscal years 1996 and 1997.

‘‘SEC. 1424A. PILOT RESEARCH PROGRAM TO COMBINE MEDICAL AND

AGRICULTURAL RESEARCH.

‘‘(a) FINDINGS.—Congress finds the following:

‘‘(1) Although medical researchers in recent years have

demonstrated that there are several naturally occurring compounds in many vegetables and fruits that can aid in the

prevention of certain forms of cancer, coronary heart disease,

stroke, and atherosclerosis, there has been almost no research

conducted to enhance these compounds in food plants by modern breeding and molecular genetic methods.

‘‘(2) By linking the appropriate medical and agricultural

research scientists in a highly-focused, targeted research program, it should be possible to develop new varieties of vegetables and fruits that would provide greater prevention of dietrelated diseases that are a major cause of death in the United

States.

‘‘(b) PILOT RESEARCH PROGRAM.—The Secretary shall conduct,

through the Cooperative State Research, Education, and Extension

Service, a pilot research program to link major cancer and heart

and other circulatory disease research efforts with agricultural

research efforts to identify compounds in vegetables and fruits

that prevent these diseases. Using information derived from such

combined research efforts, the Secretary shall assist in the development of new varieties of vegetables and fruits having enhanced

therapeutic properties for disease prevention.

‘‘(c) AGREEMENTS.—The Secretary shall carry out the pilot program through agreements entered into with land-grant colleges

or universities, other universities, State agricultural experiment

stations, the State cooperative extension services, nonprofit

organizations with demonstrable expertise, or Federal or State

governmental entities. The Secretary shall enter into the agreements on a competitive basis.

7 USC 3174a.

7 USC 3174.
110 STAT. 1164 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated $10,000,000 for fiscal year 1997 to carry out

the pilot program.’’.

SEC. 809. FOOD AND NUTRITION EDUCATION PROGRAM.

Section 1425(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3175(c)(3)) is amended by striking ‘‘$63,000,000’’ and all that follows through ‘‘fiscal

year 1995’’ and inserting ‘‘, $83,000,000 for each of fiscal years

1996 and 1997’’.

SEC. 810. PURPOSES AND FINDINGS RELATING TO ANIMAL HEALTH

AND DISEASE RESEARCH.

Section 1429 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3191) is amended to

read as follows:

‘‘SEC. 1429. PURPOSES AND FINDINGS RELATING TO ANIMAL HEALTH

AND DISEASE RESEARCH.

‘‘(a) PURPOSES.—The purposes of this subtitle are to—

‘‘(1) promote the general welfare through the improved

health and productivity of domestic livestock, poultry, aquatic

animals, and other income-producing animals that are essential

to the food supply of the United States and the welfare of

producers and consumers of animal products;

‘‘(2) improve the health of horses;

‘‘(3) facilitate the effective treatment of, and, to the extent

possible, prevent animal and poultry diseases in both domesticated and wild animals that, if not controlled, would be disastrous to the United States livestock and poultry industries

and endanger the food supply of the United States;

‘‘(4) improve methods for the control of organisms and

residues in food products of animal origin that could endanger

the human food supply;

‘‘(5) improve the housing and management of animals to

improve the well-being of livestock production species;

‘‘(6) minimize livestock and poultry losses due to transportation and handling;

‘‘(7) protect human health through control of animal diseases transmissible to humans;

‘‘(8) improve methods of controlling the births of predators

and other animals; and

‘‘(9) otherwise promote the general welfare through

expanded programs of research and extension to improve animal health.

‘‘(b) FINDINGS.—Congress finds that—

‘‘(1) the total animal health and disease research and extension efforts of State colleges and universities and of the Federal

Government would be more effective if there were close

coordination between the efforts; and

‘‘(2) colleges and universities having accredited schools or

colleges of veterinary medicine and State agricultural experiment stations that conduct animal health and disease research

are especially vital in training research workers in animal

health and related disciplines.’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1165

SEC. 811. ANIMAL HEALTH AND DISEASE CONTINUING RESEARCH.

Section 1433 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3195) is amended—

(1) in the first sentence of subsection (a), by striking ‘‘1995’’

and inserting ‘‘1997’’;

(2) in subsection (b)(2)—

(A) by striking ‘‘domestic livestock and poultry’’ each

place it appears and inserting ‘‘domestic livestock, poultry,

and commercial aquaculture species’’; and

(B) in the second sentence, by striking ‘‘horses, and

poultry’’ and inserting ‘‘horses, poultry, and commercial

aquaculture species’’;

(3) in subsection (d), by striking ‘‘domestic livestock and

poultry’’ and inserting ‘‘domestic livestock, poultry, and

commercial aquaculture species’’; and

(4) in subsection (f), by striking ‘‘domestic livestock and

poultry’’ and inserting ‘‘domestic livestock, poultry, and

commercial aquaculture species’’.

SEC. 812. ANIMAL HEALTH AND DISEASE NATIONAL OR REGIONAL

RESEARCH.

Section 1434 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3196) is amended—

(1) in subsection (a)—

(A) by inserting ‘‘or national or regional problems relating to pre-harvest, on-farm food safety, or animal wellbeing,’’ after ‘‘problems,’’; and

(B) by striking ‘‘1995’’ and inserting ‘‘1997’’;

(2) in subsection (b), by striking ‘‘eligible institutions’’ and

inserting ‘‘State agricultural experiment stations, colleges and

universities, other research institutions and organizations, Federal agencies, private organizations or corporations, and

individuals’’;

(3) in subsection (c)—

(A) in the first sentence, by inserting ‘‘, food safety,

and animal well-being’’ after ‘‘animal health and disease’’;

and

(B) in the fourth sentence—

(i) by redesignating paragraphs (2) and (3) as paragraphs (4) and (5), respectively; and

(ii) by inserting after paragraph (1) the following:

‘‘(2) any food safety problem that has a significant preharvest (on-farm) component and is recognized as posing a

significant health hazard to the consuming public;

‘‘(3) issues of animal well-being related to production methods that will improve the housing and management of animals

to improve the well-being of livestock production species;’’;

(4) in the first sentence of subsection (d), by striking ‘‘to

eligible institutions’’; and

(5) by adding at the end the following:

‘‘(f) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.—

The Federal Advisory Committee Act (5 U.S.C. App.) and title

XVIII of this Act shall not apply to a panel or board created

solely for the purpose of reviewing applications or proposals submitted under this subtitle.’’.
110 STAT. 1166 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 813. GRANT PROGRAM TO UPGRADE AGRICULTURAL AND FOOD

SCIENCES FACILITIES AT 1890 LAND-GRANT COLLEGES.

Section 1447(b) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222b(b)) is amended

by striking ‘‘$8,000,000 for each of the fiscal years 1991 through

1995’’ and inserting ‘‘, $15,000,000 for each of fiscal years 1996

and 1997’’.

SEC. 814. NATIONAL RESEARCH AND TRAINING CENTENNIAL CENTERS.

Section 1448 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3222c) is amended—

(1) in subsection (a)(1), by inserting ‘‘, or fiscal years 1996

and 1997,’’ after ‘‘1995’’; and

(2) in subsection (f), by striking ‘‘1995’’ and inserting ‘‘1997’’.

SEC. 815. PROGRAMS FOR HISPANIC-SERVING INSTITUTIONS.

(a) IN GENERAL.—The National Agricultural Research, Extension, and Teaching Policy Act of 1977 is amended by inserting

after section 1448 (7 U.S.C. 3222c) the following:

‘‘Subtitle H—Programs for HispanicServing Institutions

‘‘SEC. 1455. EDUCATION GRANTS PROGRAMS FOR HISPANIC-SERVING

INSTITUTIONS.

‘‘(a) GRANT AUTHORITY.—The Secretary may make competitive

grants (or grants without regard to any requirement for competition)

to Hispanic-serving institutions for the purpose of promoting and

strengthening the ability of Hispanic-serving institutions to carry

out education, applied research, and related community development programs.

‘‘(b) USE OF GRANT FUNDS.—Grants made under this section

shall be used—

‘‘(1) to support the activities of consortia of Hispanic-serving

institutions to enhance educational equity for underrepresented

students;

‘‘(2) to strengthen institutional educational capacities,

including libraries, curriculum, faculty, scientific instrumentation, instruction delivery systems, and student recruitment and

retention, in order to respond to identified State, regional,

national, or international educational needs in the food and

agricultural sciences;

‘‘(3) to attract and support undergraduate and graduate

students from underrepresented groups in order to prepare

them for careers related to the food, agricultural, and natural

resource systems of the United States, beginning with the

mentoring of students at the high school level and continuing

with the provision of financial support for students through

their attainment of a doctoral degree; and

‘‘(4) to facilitate cooperative initiatives between 2 or more

Hispanic-serving institutions, or between Hispanic-serving

institutions and units of State government or the private sector,

to maximize the development and use of resources, such as

faculty, facilities, and equipment, to improve food and agricultural sciences teaching programs.

7 USC 3241.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1167

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to make grants under this section $20,000,000

for fiscal year 1997.’’.

(b) HISPANIC-SERVING INSTITUTION DEFINED.—Paragraph (9) of

section 1404 of the National Agricultural Research, Extension, and

Teaching Policy Act of 1977 (7 U.S.C. 3103) is amended to read

as follows:

‘‘(9) the term ‘Hispanic-serving institution’ has the meaning

given the term by section 316(b)(1) of the Higher Education

Act of 1965 (20 U.S.C. 1059c(b)(1));’’.

SEC. 816. INTERNATIONAL AGRICULTURAL RESEARCH AND EXTENSION.

Section 1458(a)(8) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3291(a)(8)) is

amended—

(1) by striking ‘‘establish’’ and inserting ‘‘continue’’; and

(2) by striking ‘‘to be’’.

SEC. 817. AUTHORIZATION OF APPROPRIATIONS FOR AGRICULTURAL

RESEARCH PROGRAMS.

Section 1463 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3311) is amended by

striking ‘‘1995’’ both places it appears and inserting ‘‘1997’’.

SEC. 818. AUTHORIZATION OF APPROPRIATIONS FOR EXTENSION EDUCATION.

Section 1464 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3312) is amended by

striking ‘‘fiscal year 1995’’ and inserting ‘‘each of fiscal years 1995

through 1997’’.

SEC. 819. SUPPLEMENTAL AND ALTERNATIVE CROPS RESEARCH.

(a) EXTENSION OF PROGRAM.—Section 1473D(a) of the National

Agricultural Research, Extension, and Teaching Policy Act of 1977

(7 U.S.C. 3319d(a)) is amended by striking ‘‘1995’’ and inserting

‘‘1997’’.

(b) ELIMINATION OF PILOT NATURE OF PROGRAM.—Section

1473D of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319d) is amended—

(1) in subsection (a), by striking ‘‘and pilot’’;

(2) in subsection (c)(2)(B), by striking ‘‘at pilot sites’’ and

all that follows through ‘‘the area’’;

(3) in subsection (c)(2)(C), by striking ‘‘from pilot sites’’;

(4) in subsection (c)(2)(D)—

(A) by striking ‘‘near such pilot sites’’; and

(B) by striking ‘‘successful pilot program’’ and inserting

‘‘successful program’’; and

(5) in paragraph (3), by striking ‘‘pilot’’.

(c) ADDITIONAL AUTHORITY.—Section 1473D(c)(3) of the

National Agricultural Research, Extension, and Teaching Policy

Act of 1977 (7 U.S.C. 3319d(c)(3)) is amended—

(1) in subparagraph (C), by striking ‘‘and’’ at the end;

(2) in subparagraph (D), by striking the period at the

end and inserting a semicolon; and

(3) by adding at the end the following:

‘‘(E) to conduct fundamental and applied research related

to the development of new commercial products derived from
110 STAT. 1168 PUBLIC LAW 104–127—APR. 4, 1996

natural plant material for industrial, medical, and agricultural

applications; and

‘‘(F) to participate with colleges and universities, other

Federal agencies, and private sector entities in conducting

research described in subparagraph (E).’’.

SEC. 820. AQUACULTURE ASSISTANCE PROGRAMS.

(a) DEFINITION.—Section 1404(3) of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3103(3)) is amended by inserting ‘‘ornamental fish,’’ after ‘‘reptile,’’.

(b) REPORTS.—Section 1475 of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3322) is amended—

(1) by striking subsection (e); and

(2) by redesignating subsections (f) and (g) as subsections

(e) and (f), respectively.

(c) AUTHORIZATION OF APPROPRIATIONS FOR AQUACULTURE

RESEARCH FACILITIES.—Section 1476(b) of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3323(b)) is amended by striking ‘‘1995’’ and inserting ‘‘1997’’.

(d) AUTHORIZATION OF APPROPRIATIONS FOR RESEARCH AND

EXTENSION.—Section 1477 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3324) is

amended by striking ‘‘1995’’ and inserting ‘‘1997’’.

SEC. 821. AUTHORIZATION OF APPROPRIATIONS FOR RANGELAND

RESEARCH.

Section 1483(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3336(a)) is amended

by striking ‘‘1995’’ and inserting ‘‘1997’’.

Subtitle B—Modification and Extension of

Activities Under 1990 Act

SEC. 831. WATER QUALITY RESEARCH, EDUCATION, AND COORDINATION.

Section 1481(d) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (7 U.S.C. 5501(d)) is amended by striking ‘‘1995’’

and inserting ‘‘1997’’.

SEC. 832. NATIONAL GENETICS RESOURCES PROGRAM.

(a) FUNCTIONS.—Section 1632(d) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5841(d)) is amended

by striking paragraph (4) and inserting the following:

‘‘(4) unless otherwise prohibited by law, have the right

to make available on request, without charge and without

regard to the country from which the request originates, the

genetic material that the program assembles;’’.

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 1635(b) of the

Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C.

5844(b)) is amended by striking ‘‘1995’’ and inserting ‘‘1997’’.

SEC. 833. NATIONAL AGRICULTURAL WEATHER INFORMATION SYSTEM.

Section 1641(c) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (7 U.S.C. 5855(c)) is amended by striking ‘‘1995’’

and inserting ‘‘1997’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1169

SEC. 834. LIVESTOCK PRODUCT SAFETY AND INSPECTION PROGRAM.

Section 1670(e) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (7 U.S.C. 5923(e)) is amended by striking ‘‘1995’’

and inserting ‘‘1997’’.

SEC. 835. PLANT GENOME MAPPING PROGRAM.

Section 1671(g) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (7 U.S.C. 5924(g)) is amended by inserting

‘‘for fiscal years 1996 and 1997’’ after ‘‘appropriated’’.

SEC. 836. CERTAIN SPECIALIZED RESEARCH PROGRAMS.

Subsections (d)(4), (e)(4), and (i) of section 1672 of the Food,

Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925)

are each amended by striking ‘‘1995’’ and inserting ‘‘1997’’.

SEC. 837. AGRICULTURAL TELECOMMUNICATIONS PROGRAM.

Section 1673(h) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (7 U.S.C. 5926(h)) is amended by striking ‘‘1995’’

and inserting ‘‘1997’’.

SEC. 838. NATIONAL CENTERS FOR AGRICULTURAL PRODUCT QUALITY

RESEARCH.

(a) PURPOSES OF NATIONAL CENTERS.—Section 1675(a) of the

Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C.

5928(a)) is amended—

(1) by redesignating paragraphs (5) and (6) as paragraphs

(6) and (7), respectively; and

(2) by inserting after paragraph (4) the following:

‘‘(5) enhance agricultural competitiveness through product

quality research and technology implementation;’’.

(b) REGIONAL BASIS OF CENTERS.—Section 1675(b) of the Food,

Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5928(b))

is amended by striking paragraph (1) and inserting the following:

‘‘(1) REGIONAL BASIS.—The centers shall be regionally based

units that conduct a broad spectrum of research, development,

and education programs to enhance the competitiveness, quality, safety and wholesomeness of agricultural products.’’.

(c) PROGRAM PLAN AND REVIEW.—Section 1675(d) of the Food,

Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5928(b))

is amended—

(1) in paragraph (1), by striking the second sentence; and

(2) in paragraph (2), by striking ‘‘, but not less’’ and all

that follows through ‘‘the Secretary’’.

(d) AUTHORIZATION OF APPROPRIATIONS.—Section 1675(g)(1) of

the Food, Agriculture, Conservation, and Trade Act of 1990 (7

U.S.C. 5928(g)(1)) is amended by striking ‘‘1995’’ and inserting

‘‘1997’’.

SEC. 839. RED MEAT SAFETY RESEARCH CENTER.

Section 1676 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5929) is amended to read as follows:

‘‘SEC. 1676. RED MEAT SAFETY RESEARCH CENTER.

‘‘(a) ESTABLISHMENT OF CENTER.—The Secretary of Agriculture

shall award a grant, on a competitive basis, to a research facility

described in subsection (b) to establish a red meat safety research

center.

Grants.
110 STAT. 1170 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(b) ELIGIBLE RESEARCH FACILITY DESCRIBED.—A research facility eligible for a grant under subsection (a) is a research facility

that—

‘‘(1) is part of a land-grant college or university, or other

federally supported agricultural research facility, located in

close proximity to a livestock slaughter and processing facility;

and

‘‘(2) is staffed by professionals with a wide diversity of

scientific expertise covering all aspects of meat science.

‘‘(c) RESEARCH CONDUCTED.—The red meat safety research center established under subsection (a) shall carry out research related

to general food safety, including—

‘‘(1) the development of intervention strategies that reduce

microbiological contamination of carcass surfaces;

‘‘(2) research regarding microbiological mapping of carcass

surfaces; and

‘‘(3) the development of model hazard analysis and critical

control point plans.

‘‘(d) ADMINISTRATION OF FUNDS.—The Secretary of Agriculture

shall administer funds appropriated to carry out this section.

‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated such sums as are necessary for fiscal year

1997 to carry out this section.’’.

SEC. 840. INDIAN RESERVATION EXTENSION AGENT PROGRAM.

Section 1677 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5930) is amended—

(1) by redesignating subsection (f) as subsection (g); and

(2) by inserting after subsection (e) the following:

‘‘(f) REDUCED REGULATORY BURDEN.—On a determination by

the Secretary of Agriculture that a program carried out under

this section has been satisfactorily administered for not less than

2 years, the Secretary shall implement a reduced reapplication

process for the continued operation of the program in order to

reduce regulatory burdens on participating university and tribal

entities.’’.

SEC. 841. ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH

DISABILITIES.

Section 1680 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5933) is amended—

(1) in subsection (a)(6)(B), by striking ‘‘1996’’ and inserting

‘‘1997’’; and

(2) in subsection (b)(2), by striking ‘‘1996’’ and inserting

‘‘1997’’.

SEC. 842. NATIONAL RURAL INFORMATION CENTER CLEARINGHOUSE.

Section 2381(e) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (7 U.S.C. 3125b(e)) is amended by striking

‘‘1995’’ and inserting ‘‘1997’’.

SEC. 843. GLOBAL CLIMATE CHANGE.

Section 2412 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 6710) is amended by striking ‘‘1996’’ and

inserting ‘‘1997’’.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1171

Subtitle C—Repeal of Certain Activities

and Authorities

SEC. 851. SUBCOMMITTEE ON FOOD, AGRICULTURAL, AND FORESTRY

RESEARCH.

Section 401(h) of the National Science and Technology Policy,

Organization, and Priorities Act of 1976 (42 U.S.C. 6651(h)) is

amended by striking the second through fifth sentences.

SEC. 852. JOINT COUNCIL ON FOOD AND AGRICULTURAL SCIENCES.

(a) REPEAL.—Section 1407 of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3122) is repealed.

(b) CONFORMING AMENDMENTS.—

(1) Section 1405 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3121)

is amended—

(A) in paragraph (5), by striking ‘‘Joint Council,

Advisory Board,’’ and inserting ‘‘Advisory Board’’; and

(B) in paragraph (11), by striking ‘‘the Joint Council,’’.

(2) Section 1410(2) of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3125(2))

is amended by striking ‘‘the recommendations of the Joint

Council developed under section 1407(f),’’.

(3) Section 1412 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3127)

is amended—

(A) in the section heading, by striking ‘‘THE JOINT

COUNCIL, ADVISORY BOARD,’’ and inserting ‘‘ADVISORY

BOARD’’;

(B) in subsection (a)—

(i) by striking ‘‘Joint Council, the Advisory Board,’’

and inserting ‘‘Advisory Board’’;

(ii) by striking ‘‘the cochairpersons of the Joint

Council and’’ each place it appears; and

(iii) in paragraph (2), by striking ‘‘one shall serve

as the executive secretary to the Joint Council, one

shall serve as the executive secretary to the Advisory

Board,’’ and inserting ‘‘one shall serve as the executive

secretary to the Advisory Board’’; and

(C) in subsections (b) and (c), by striking ‘‘Joint Council,

Advisory Board,’’ each place it appears and inserting

‘‘Advisory Board’’.

(4) Section 1413 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3128)

is amended—

(A) in subsection (a), by striking ‘‘Joint Council, the

Advisory Board,’’ and inserting ‘‘Advisory Board’’; and

(B) in subsection (b), by striking ‘‘Joint Council,

Advisory Board,’’ and inserting ‘‘Advisory Board’’.

(5) Section 1434(c) of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3196(c))

is amended—

(A) in the second sentence, by striking ‘‘Joint Council,

the Advisory Board,’’ and inserting ‘‘Advisory Board’’; and
110 STAT. 1172 PUBLIC LAW 104–127—APR. 4, 1996

(B) in the fourth sentence, by striking ‘‘the Joint Council,’’.

SEC. 853. AGRICULTURAL SCIENCE AND TECHNOLOGY REVIEW BOARD.

(a) REPEAL.—Section 1408A of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3123a) is repealed.

(b) CONFORMING AMENDMENTS.—

(1) Section 1404 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)

is amended—

(A) in paragraph (16)(F), by adding ‘‘and’’ at the end;

(B) in paragraph (17), by striking ‘‘; and’’ at the end

and inserting a period; and

(C) by striking paragraph (18).

(2) Section 1405(12) of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3121(12))

is amended by striking ‘‘, after coordination with the Technology

Board,’’.

(3) Section 1410(2) of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3125(2))

(as amended by section 802(b)(2)) is amended by striking ‘‘and

the recommendations of the Technology Board developed under

section 1408A(d)’’.

(4) Section 1412 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3127)

(as amended by section 852(b)(3)) is amended—

(A) in the section heading, by striking ‘‘AND TECHNOLOGY BOARD’’;

(B) in subsection (a)—

(i) by striking ‘‘and the Technology Board’’ each

place it appears; and

(ii) in paragraph (2), by striking ‘‘and one shall

serve as the executive secretary to the Technology

Board’’; and

(C) in subsections (b) and (c), by striking ‘‘and Technology Board’’ each place it appears.

(5) Section 1413 of the National Agricultural Research,

Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3128)

(as amended by section 852(b)(4)) is amended—

(A) in subsection (a), by striking ‘‘or the Technology

Board’’; and

(B) in subsection (b), by striking ‘‘and the Technology

Board’’.

SEC. 854. ANIMAL HEALTH SCIENCE RESEARCH ADVISORY BOARD.

Section 1432 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3194) is repealed.

SEC. 855. RESIDENT INSTRUCTION PROGRAM AT 1890 LAND-GRANT

COLLEGES.

Section 1446 of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3222a) is repealed.

SEC. 856. GRANTS TO STATES FOR INTERNATIONAL TRADE DEVELOPMENT CENTERS.

Section 1458A of the National Agricultural Research, Extension,

and Teaching Policy Act of 1977 (7 U.S.C. 3292) is repealed.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1173

SEC. 857. RANGELAND RESEARCH.

(a) REPORTS.—Section 1481 of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3334) is repealed.

(b) ADVISORY BOARD.—Section 1482 of the National Agricultural

Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.

3335) is repealed.

SEC. 858. COMPOSTING RESEARCH AND EXTENSION PROGRAM.

Section 1456 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 3130) is repealed.

SEC. 859. EDUCATION PROGRAM REGARDING HANDLING OF AGRICULTURAL CHEMICALS AND AGRICULTURAL CHEMICAL

CONTAINERS.

(a) REPEAL.—Section 1499A of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 3125c) is repealed.

(b) CONFORMING AMENDMENT.—Section 1499(b) of the Food,

Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5506(b))

is amended by striking ‘‘and section 1499A’’.

SEC. 860. PROGRAM ADMINISTRATION REGARDING SUSTAINABLE

AGRICULTURE RESEARCH AND EDUCATION.

(a) REPORTING REQUIREMENT.—Section 1622 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5812) is

amended by striking subsection (b).

(b) ADVISORY COUNCIL.—Section 1622 of the Food, Agriculture,

Conservation, and Trade Act of 1990 (7 U.S.C. 5812) is amended—

(1) in subsection (a)—

(A) by striking paragraph (2);

(B) in paragraph (3), by striking ‘‘subsection (e)’’ and

inserting ‘‘subsection (b)’’; and

(C) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively;

(2) by striking subsections (c) and (d);

(3) by redesignating subsection (e) as subsection (b); and

(4) in subsection (b)(2) (as so redesignated)—

(A) by striking subparagraph (A); and

(B) by redesignating subparagraphs (B) through (F)

as subparagraphs (A) through (E), respectively.

(c) CONFORMING AMENDMENTS.—

(1) Section 1619(b) of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 5801(b)) is amended—

(A) by striking paragraph (7); and

(B) by redesignating paragraphs (8), (9), and (10) as

paragraphs (7), (8), and (9), respectively.

(2) Section 1621(c) of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 5811(c)) is amended—

(A) in paragraph (1)—

(i) by striking subparagraph (A); and

(ii) by redesignating subparagraphs (B) through

(E) as subparagraphs (A) through (D), respectively;

and

(B) in paragraph (2)—

(i) by striking subparagraph (A); and

(ii) by redesignating subparagraphs (B) through

(F) as subparagraphs (A) through (E), respectively.
110 STAT. 1174 PUBLIC LAW 104–127—APR. 4, 1996

(3) Section 1628(b) of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 5831(b)) is amended by striking

‘‘Advisory Council, the Soil Conservation Service,’’ and inserting

‘‘Natural Resources Conservation Service’’.

SEC. 861. RESEARCH REGARDING PRODUCTION, PREPARATION,

PROCESSING, HANDLING, AND STORAGE OF AGRICULTURAL PRODUCTS.

Subtitle E of title XVI of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 5871 et seq.) is repealed.

SEC. 862. PLANT AND ANIMAL PEST AND DISEASE CONTROL PROGRAM.

(a) REPEAL.—Subtitle F of title XVI of the Food, Agriculture,

Conservation, and Trade Act of 1990 (7 U.S.C. 5881 et seq.) is

repealed.

(b) CONFORMING AMENDMENTS.—

(1) Section 28(b)(2)(A) of the Federal Insecticide, Fungicide,

and Rodenticide Act (7 U.S.C. 136w–3(b)(2)(A)) is amended

by striking ‘‘and the information required by section 1651 of

the Food, Agriculture, Conservation, and Trade Act of 1990’’.

(2) Section 1627(a)(3) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5821(a)(3)) is amended

by striking ‘‘and section 1650’’.

(3) Section 1628 of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 5831) is amended by striking

‘‘section 1650,’’ each place it appears in subsections (a) and

(d).

(4) Section 1629 of the Food, Agriculture, Conservation,

and Trade Act of 1990 (7 U.S.C. 5832) is amended by striking

‘‘section 1650,’’ each place it appears in subsections (f) and

(g)(11).

SEC. 863. CERTAIN SPECIALIZED RESEARCH PROGRAMS.

Section 1672 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5925) is amended—

(1) by striking subsections (a), (f), (g), (h), and (j); and

(2) by redesignating subsections (i) and (k) as subsections

(f) and (g), respectively.

SEC. 864. COMMISSION ON AGRICULTURAL RESEARCH FACILITIES.

Section 1674 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5927) is repealed.

SEC. 865. SPECIAL GRANT TO STUDY CONSTRAINTS ON AGRICULTURAL

TRADE.

Section 1678 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5931) is repealed.

SEC. 866. PILOT PROJECT TO COORDINATE FOOD AND NUTRITION

EDUCATION PROGRAMS.

Section 1679 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5932) is repealed.

SEC. 867. DEMONSTRATION AREAS FOR RURAL ECONOMIC DEVELOPMENT.

Section 2348 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 2662a) is repealed.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1175

SEC. 868. TECHNICAL ADVISORY COMMITTEE REGARDING GLOBAL CLIMATE CHANGE.

Section 2404 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 6703) is repealed.

SEC. 869. COMMITTEE OF NINE UNDER HATCH ACT OF 1887.

Section 3(c)3 of the Act of March 2, 1887 (commonly known

as the ‘‘Hatch Act of 1887’’; 7 U.S.C. 361c(c)3) is amended by

striking ‘‘, and shall be used’’ and all that follows through ‘‘by

this paragraph’’.

SEC. 870. COTTON CROP REPORTS.

The Act of May 3, 1924 (43 Stat. 115, chapter 149; 7 U.S.C.

475), is repealed.

SEC. 871. RURAL ECONOMIC AND BUSINESS DEVELOPMENT AND ADDITIONAL RESEARCH GRANTS UNDER TITLE V OF RURAL

DEVELOPMENT ACT OF 1972.

Section 502 of the Rural Development Act of 1972 (7 U.S.C.

2662) is amended by striking subsections (g) and (j).

SEC. 872. HUMAN NUTRITION RESEARCH.

Section 1452 of the National Agricultural Research, Extension,

and Teaching Policy Act Amendments of 1985 (Public Law 99–

198; 7 U.S.C. 3173 note) is repealed.

SEC. 873. GRANTS TO UPGRADE 1890 LAND-GRANT COLLEGE EXTENSION FACILITIES.

Section 1416 of the National Agricultural Research, Extension,

and Teaching Policy Act Amendments of 1981 (7 U.S.C. 3224)

is repealed.

SEC. 874. INDIAN SUBSISTENCE FARMING DEMONSTRATION GRANT

PROGRAM.

Subtitle C of title IX of the Food, Agriculture, Conservation,

and Trade Act Amendments of 1991 (Public Law 102–237; 7 U.S.C.

5930 note) is repealed.

Subtitle D—Miscellaneous Research

Provisions

SEC. 881. CRITICAL AGRICULTURAL MATERIALS RESEARCH.

(a) REPORTS.—Section 4 of the Critical Agricultural Materials

Act (7 U.S.C. 178b) is amended—

(1) by striking subsection (g); and

(2) by redesignating subsection (h) as subsection (g).

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 16(a) of the

Critical Agricultural Materials Act (7 U.S.C. 178n(a)) is amended

by striking ‘‘1995’’ and inserting ‘‘1997’’.

SEC. 882. MEMORANDUM OF AGREEMENT REGARDING 1994 INSTITUTIONS.

Section 533 of the Equity in Educational Land-Grant Status

Act of 1994 (Public Law 103–382; 7 U.S.C. 301 note) is amended

by adding at the end the following:

‘‘(d) MEMORANDUM OF AGREEMENT.—Not later than January

6, 1997, the Secretary shall develop and implement a formal memoNative

Americans.
110 STAT. 1176 PUBLIC LAW 104–127—APR. 4, 1996

randum of agreement with the 1994 Institutions to establish programs to ensure that tribally controlled colleges and Native American communities equitably participate in Department of Agriculture employment, programs, services, and resources.’’.

SEC. 883. SMITH-LEVER ACT FUNDING FOR 1890 LAND-GRANT COLLEGES, INCLUDING TUSKEGEE UNIVERSITY.

(a) ELIGIBILITY FOR FUNDS.—Section 3(d) of the Act of May

8, 1914 (commonly known as the ‘‘Smith-Lever Act’’; 7 U.S.C.

343(d)), is amended by adding at the end the following: ‘‘A college

or university eligible to receive funds under the Act of August

30, 1890 (7 U.S.C. 321 et seq.), including Tuskegee University,

may apply for and receive directly from the Secretary of Agriculture—

‘‘(1) amounts made available under this subsection after

September 30, 1995, to carry out programs or initiatives for

which no funds were made available under this subsection

for fiscal year 1995, or any previous fiscal year, as determined

by the Secretary; and

‘‘(2) amounts made available after September 30, 1995,

to carry out programs or initiatives funded under this subsection prior to that date that are in excess of the highest

amount made available for the programs or initiatives under

this subsection for fiscal year 1995, or any previous fiscal

year, as determined by the Secretary.’’.

(b) CONFORMING AMENDMENT.—The third sentence of section

1444(a) of the National Agricultural Research, Extension, and

Teaching Policy Act of 1977 (7 U.S.C. 3221(a)) is amended by

inserting before the period at the end the following: ‘‘, except that

for the purpose of this calculation, the total appropriations shall

not include amounts made available after September 30, 1995,

under section 3(d) of that Act (7 U.S.C. 343(d)), to carry out programs or initiatives for which no funds were made available under

section 3(d) of that Act for fiscal year 1995, or any previous fiscal

year, as determined by the Secretary, and shall not include amounts

made available after September 30, 1995, to carry out programs

or initiatives funded under section 3(d) of that Act prior to that

date that are in excess of the highest amount made available

for the programs or initiatives for fiscal year 1995, or any previous

fiscal year, as determined by the Secretary’’.

SEC. 884. AGRICULTURAL RESEARCH FACILITIES.

(a) RESEARCH FACILITIES.—The Research Facilities Act (7

U.S.C. 390 et seq.) is amended to read as follows:

‘‘SECTION 1. SHORT TITLE.

‘‘This Act may be cited as the ‘Research Facilities Act’.

‘‘SEC. 2. DEFINITIONS.

‘‘In this Act:

‘‘(1) AGRICULTURAL RESEARCH FACILITY.—The term ‘agricultural research facility’ means a proposed facility for research

in food and agricultural sciences for which Federal funds are

requested by a college, university, or nonprofit institution to

assist in the construction, alteration, acquisition, modernization, renovation, or remodeling of the facility.

‘‘(2) CONGRESSIONAL AGRICULTURE COMMITTEES.—The term

‘congressional agriculture committees’ means the Committee

7 USC 390.

7 USC 390 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1177

on Appropriations and the Committee on Agriculture of the

House of Representatives and the Committee on Appropriations

and the Committee on Agriculture, Nutrition, and Forestry

of the Senate.

‘‘(3) FOOD AND AGRICULTURAL SCIENCES.—The term ‘food

and agricultural sciences’ means—

‘‘(A) agriculture, including soil and water conservation

and use, the use of organic materials to improve soil tilth

and fertility, plant and animal production and protection,

and plant and animal health;

‘‘(B) the processing, distribution, marketing, and utilization of food and agricultural products;

‘‘(C) forestry, including range management, production

of forest and range products, multiple use of forests and

rangelands, and urban forestry;

‘‘(D) aquaculture (as defined in section 1404(3) of the

National Agricultural Research, Extension, and Teaching

Policy Act of 1977 (7 U.S.C. 3103(3));

‘‘(E) human nutrition;

‘‘(F) production inputs, such as energy, to improve

productivity; and

‘‘(G) germ plasm collection and preservation.

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

of Agriculture.

‘‘(5) TASK FORCE.—The term ‘task force’ means the Strategic

Planning Task Force established under section 4.

‘‘SEC. 3. REVIEW PROCESS.

‘‘(a) SUBMISSION TO SECRETARY.—Each proposal for an agricultural research facility shall be submitted to the Secretary for review.

The Secretary shall review the proposals in the order in which

the proposals are received.

‘‘(b) APPLICATION PROCESS.—In consultation with the congressional agriculture committees, the Secretary shall establish an

application process for the submission of proposals for agricultural

research facilities.

‘‘(c) CRITERIA FOR APPROVAL.—

‘‘(1) DETERMINATION BY SECRETARY.—With respect to each

proposal for an agricultural research facility submitted under

subsection (a), the Secretary shall determine whether the proposal meets the criteria set forth in paragraph (2).

‘‘(2) CRITERIA.—A proposal for an agricultural research

facility shall meet the following criteria:

‘‘(A) NON-FEDERAL SHARE.—The proposal shall certify

the availability of at least a 50 percent non-Federal share

of the cost of the facility. The non-Federal share shall

be paid in cash and may include funding from private

sources or from units of State or local government.

‘‘(B) NONDUPLICATION OF FACILITIES.—The proposal

shall demonstrate how the agricultural research facility

would be complementary to, and not duplicative of, facilities

of colleges, universities, and nonprofit institutions, and

facilities of the Agricultural Research Service, within the

State and region.

‘‘(C) NATIONAL RESEARCH PRIORITIES.—The proposal

shall demonstrate how the agricultural research facility

would serve—

7 USC 390a.
110 STAT. 1178 PUBLIC LAW 104–127—APR. 4, 1996

‘‘(i) 1 or more of the national research policies

and priorities set forth in section 1402 of the National

Agricultural Research, Extension, and Teaching Policy

Act of 1977 (7 U.S.C. 3101); and

‘‘(ii) regional needs.

‘‘(D) LONG-TERM SUPPORT.—The proposal shall demonstrate that the recipient college, university, or nonprofit

institution has the ability and commitment to support the

long-term, ongoing operating costs of—

‘‘(i) the agricultural research facility after the facility is completed; and

‘‘(ii) each program to be based at the facility.

‘‘(d) EVALUATION OF PROPOSALS.—Not later than 90 days after

receiving a proposal under subsection (a), the Secretary shall—

‘‘(1) evaluate and assess the merits of the proposal, including the extent to which the proposal meets the criteria set

forth in subsection (c); and

‘‘(2) report to the congressional agriculture committees on

the results of the evaluation and assessment.

‘‘SEC. 4. TASK FORCE ON 10-YEAR STRATEGIC PLAN FOR AGRICULTURAL RESEARCH FACILITIES.

‘‘(a) ESTABLISHMENT.—Not later than 6 months after the date

of enactment of the Federal Agriculture Improvement and Reform

Act of 1996, the Secretary shall establish a task force, to be known

as the ‘Strategic Planning Task Force’. The task force shall be

comprised of 15 members.

‘‘(b) COMPOSITION.—The Secretary shall select the members

of the task force from a list of individuals recommended by the

Advisory Board established under section 1408 of the National

Agricultural Research, Extension, and Teaching Policy Act of 1977

(7 U.S.C. 3123). In submitting the list to the Secretary, the Board

may recommend for selection individuals (including members of

the Advisory Board) who have expertise in facilities development,

modernization, construction, consolidation, and closure.

‘‘(c) DUTIES.—The task force shall review all currently operating

agricultural research facilities constructed in whole or in part with

Federal funds, and all planned agricultural research facilities proposed to be constructed with Federal funds, pursuant to criteria

established by the Secretary, to ensure that a comprehensive

research capacity is maintained.

‘‘(d) 10-YEAR STRATEGIC PLAN.—Not later than 2 years after

the task force is established, the task force shall prepare and

submit to the Secretary and the congressional agriculture committees a 10-year strategic plan, reflecting both national and regional

perspectives, for development, modernization, construction, consolidation, and closure of Federal agricultural research facilities and

agricultural research facilities proposed to be constructed with Federal funds.

‘‘(e) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.—

‘‘(1) PUBLIC MEETINGS.—All meetings of the task force shall

be publicly announced in advance and shall be open to the

public. Detailed minutes of meetings and other appropriate

records of the activities of the task force shall be kept and

made available to the public on request.

‘‘(2) EXEMPTION.—The Federal Advisory Committee Act (5

U.S.C. App.) and title XVIII of the Food and Agriculture Act

Records.

7 USC 390b.

Reports.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1179

of 1977 (7 U.S.C. 2281 et seq.) shall not apply to the task

force.

‘‘(f) DEFINITION OF AGRICULTURAL RESEARCH FACILITY.—Notwithstanding section 2(1), in this section the term ‘agricultural

research facility’ means a facility for research in food and agricultural sciences.

‘‘SEC. 5. APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.

‘‘The Federal Advisory Committee Act (5 U.S.C. App.) and

title XVIII of the Food and Agriculture Act of 1977 (7 U.S.C.

2281 et seq.) shall not apply to a panel or board created solely

for the purpose of reviewing applications or proposals submitted

under this Act.

‘‘SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

‘‘(a) IN GENERAL.—Subject to subsection (b), there are authorized to be appropriated such sums as are necessary for fiscal years

1996 and 1997 for the study, plan, design, structure, and related

costs of agricultural research facilities under this Act.

‘‘(b) ALLOWABLE ADMINISTRATIVE COSTS.—Not more than 3 percent of the funds made available for any project for an agricultural

research facility shall be available for administration of the project.’’.

(b) APPLICATION OF AMENDMENT.—The amendment made by

subsection (a), other than section 4 of the Research Facilities Act

(as amended by subsection (a)), shall not apply to any project

for an agricultural research facility for which funds have been

made available for a feasibility study or for any phase of the

project prior to October 1, 1995.

(c) AUTHORIZATION OF APPROPRIATIONS FOR FEDERAL FACILITIES.—Section 1431 of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1985 (Public Law

99–198; 99 Stat. 1556) is amended—

(1) in subsection (a)—

(A) by striking ‘‘(a)’’; and

(B) by striking ‘‘1995’’ and inserting ‘‘1997’’; and

(2) by striking subsection (b).

(d) CONFORMING AMENDMENT.—Section 1463(a) of the National

Agricultural Research, Extension, and Teaching Policy Act of 1977

(7 U.S.C. 3311(a)) is amended by striking ‘‘1416,’’.

SEC. 885. NATIONAL COMPETITIVE RESEARCH INITIATIVE.

(a) AUTHORIZATION OF APPROPRIATIONS FOR COMPETITIVE

GRANTS.—Subsection (b)(10) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(10)) is amended—

(1) by striking ‘‘fiscal year 1995’’ and inserting ‘‘each of

fiscal years 1995 through 1997’’; and

(2) in subparagraph (B), by striking ‘‘20 percent’’ and inserting ‘‘40 percent’’.

(b) AVAILABILITY OF FUNDS.—Subsection (b) of the Competitive,

Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)) is

amended by adding at the end the following:

‘‘(11) AVAILABILITY OF FUNDS.—Funds made available under

paragraph (10) shall be available for obligation for a 2-year period

beginning on October 1 of the fiscal year for which the funds

are made available.’’.

7 USC 390 note.

7 USC 390d.

7 USC 390c.
110 STAT. 1180 PUBLIC LAW 104–127—APR. 4, 1996

SEC. 886. RURAL DEVELOPMENT RESEARCH AND EDUCATION.

Section 502(a) of the Rural Development Act of 1972 (7 U.S.C.

2662(a)) is amended by inserting after the first sentence the following: ‘‘The rural development extension programs shall also promote

coordinated and integrated rural community initiatives that

advance and empower capacity building through leadership development, entrepreneurship, business development and management

training, and strategic planning to increase jobs, income, and quality

of life in rural communities.’’.

SEC. 887. DAIRY GOAT RESEARCH PROGRAM.

Section 1432(b)(5) of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1981 (Public Law

97–98; 7 U.S.C. 3222 note) is amended by striking ‘‘1995’’ and

inserting ‘‘1997’’.

SEC. 888. COMPETITIVE GRANTS FOR RESEARCH TO ERADICATE AND

CONTROL BROWN CITRUS APHID AND CITRUS TRISTEZA

VIRUS.

Section 1672 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (7 U.S.C. 5925) (as amended by section 863) is amended

by inserting before subsection (b) the following:

‘‘(a) BROWN CITRUS APHID AND CITRUS TRISTEZA VIRUS.—

‘‘(1) RESEARCH GRANTS AUTHORIZED.—The Secretary of

Agriculture may make competitive grants available to support

research for the purpose of—

‘‘(A) developing methods to eradicate the brown citrus

aphid and the citrus tristeza virus from citrus crops grown

in the United States; or

‘‘(B) adapting citrus crops grown in the United States

to the brown citrus aphid and the citrus tristeza virus.

‘‘(2) METHOD OF PROVIDING GRANTS.—Grants authorized

under this subsection shall be made in the same manner,

and shall be subject to the same conditions, as provided for

competitive grants under the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i).

‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—There are

authorized to be appropriated to carry out this subsection

$3,000,000 for fiscal year 1997.’’.

SEC. 889. STUTTGART NATIONAL AQUACULTURE RESEARCH CENTER.

(a) TRANSFER OF FUNCTIONS TO SECRETARY OF AGRICULTURE.—

(1) PURPOSE.—The first section of Public Law 85–342 (16

U.S.C. 778) is amended—

(A) by striking ‘‘Secretary of the Interior’’ and all that

follows through ‘‘directed to’’ and inserting ‘‘Secretary of

Agriculture shall’’;

(B) by striking ‘‘an experiment station or stations’’

and inserting ‘‘1 or more centers’’; and

(C) in paragraph (5), by striking ‘‘Department of Agriculture’’ and inserting ‘‘Secretary of the Interior’’.

(2) AUTHORITY.—Section 2 of Public Law 85–342 (16 U.S.C.

778a) is amended by striking ‘‘, the Secretary’’ and all that

follows through ‘‘authorized’’ and inserting ‘‘, the Secretary

of Agriculture is authorized’’.

(3) ASSISTANCE.—Section 3 of Public Law 85–342 (16 U.S.C.

778b) is amended—

Arkansas.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1181

(A) by striking ‘‘Secretary of the Interior’’ and inserting

‘‘Secretary of Agriculture’’; and

(B) by striking ‘‘Department of Agriculture’’ and inserting ‘‘Secretary of the Interior’’.

(b) TRANSFER OF FISH FARMING EXPERIMENTAL LABORATORY

TO DEPARTMENT OF AGRICULTURE.— (1) DESIGNATION OF STUTTGART NATIONAL AQUACULTURE

RESEARCH CENTER.— (A) IN GENERAL.—The Fish Farming Experimental

Laboratory in Stuttgart, Arkansas (including the facilities

in Kelso, Arkansas), shall be known and designated as

the ‘‘Stuttgart National Aquaculture Research Center’’.

(B) REFERENCES.—Any reference in a law, map, regulation, document, paper, or other record of the United States

to the laboratory referred to in subparagraph (A) shall

be deemed to be a reference to the ‘‘Stuttgart National

Aquaculture Research Center’’.

(2) TRANSFER OF LABORATORY TO DEPARTMENT OF AGRI- CULTURE.—Subject to section 1531 of title 31, United States

Code, not later than 90 days after the date of enactment of

this Act, there are transferred to the Department of Agriculture—

(A) the personnel employed in connection with the

laboratory referred to in paragraph (1)(A);

(B) the assets, liabilities, contracts, and real and personal property of the laboratory;

(C) the records of the laboratory; and

(D) the unexpended balance of appropriations,

authorizations, allocations, and other funds employed in

connection with, held in connection with, arising from,

available to, or to be made available in connection with

the laboratory.

(3) NONDUPLICATION OF FACILITIES.—The research center

referred to in paragraph (1)(A) shall be complementary to,

and not duplicative of, facilities of colleges, universities, and

nonprofit institutions, and facilities of the Agricultural Research

Service, within the State and region, as determined by the

Administrator of the Service.

SEC. 890. EXPANSION OF AUTHORITIES RELATED TO NATIONAL

ARBORETUM.

(a) SOLICITATION OF GIFTS, BENEFITS, AND DEVISES.—The first

sentence of section 5 of the Act of March 4, 1927 (20 U.S.C. 195),

is amended by inserting ‘‘solicit,’’ after ‘‘authorized to’’.

(b) CONCESSIONS, FEES, AND VOLUNTARY SERVICES.—The Act

of March 4, 1927 (20 U.S.C. 191 et seq.), is amended by adding

at the end the following:

‘‘SEC. 6. CONCESSIONS, FEES, AND VOLUNTARY SERVICES.

‘‘(a) IN GENERAL.—Notwithstanding the Federal Property and

Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) and

section 321 of the Act of June 30, 1932 (40 U.S.C. 303b), the

Secretary of Agriculture, in furtherance of the mission of the

National Arboretum, may—

‘‘(1) negotiate agreements granting concessions at the

National Arboretum to nonprofit scientific or educational

organizations the interests of which are complementary to the

mission of the National Arboretum, except that the net proceeds

20 USC 196.
110 STAT. 1182 PUBLIC LAW 104–127—APR. 4, 1996

of the organizations from the concessions shall be used exclusively for research and educational work for the benefit of

the National Arboretum;

‘‘(2) provide by concession, on such terms as the Secretary

of Agriculture considers appropriate and necessary, for commercial services for food, drink, and nursery sales, if an agreement

for a permanent concession under this paragraph is negotiated

with a qualified person submitting a proposal after due consideration of all proposals received after the Secretary of Agriculture provides reasonable public notice of the intent of the

Secretary to enter into such an agreement;

‘‘(3) dispose of excess property, including excess plants and

fish, in a manner designed to maximize revenue from any

sale of the property, including by way of public auction, except

that this paragraph shall not apply to the free dissemination

of new varieties of seeds and germ plasm in accordance with

section 520 of the Revised Statutes (commonly known as the

‘Department of Agriculture Organic Act of 1862’) (7 U.S.C.

2201);

‘‘(4) charge such fees as the Secretary of Agriculture considers reasonable for temporary use by individuals or groups of

National Arboretum facilities and grounds for any purpose

consistent with the mission of the National Arboretum;

‘‘(5) charge such fees as the Secretary of Agriculture considers reasonable for the use of the National Arboretum for

commercial photography or cinematography;

‘‘(6) publish, in print and electronically and without regard

to laws relating to printing by the Federal Government,

informational brochures, books, and other publications concerning the National Arboretum or the collections of the Arboretum;

and

‘‘(7) license use of the National Arboretum name and logo

for public service or commercial uses.

‘‘(b) USE OF FUNDS.—Any funds received or collected by the

Secretary of Agriculture as a result of activities described in subsection (a) shall be retained in a special fund in the Treasury

for the use and benefit of the National Arboretum as the Secretary

of Agriculture considers appropriate.

‘‘(c) ACCEPTANCE OF VOLUNTARY SERVICES.—The Secretary of

Agriculture may accept the voluntary services of organizations

described in subsection (a)(1), and the voluntary services of individuals (including employees of the National Arboretum), for the benefit of the National Arboretum.’’.

SEC. 891. TRANSFER OF AQUACULTURAL RESEARCH CENTER.

(a) TRANSFER OF FISH CULTURE LABORATORY TO DEPARTMENT

OF AGRICULTURE.—

(1) DESIGNATION OF CLAUDE HARRIS NATIONAL

AQUACULTURAL RESEARCH CENTER.—

(A) IN GENERAL.—The Southeastern Fish Culture Laboratory in Marion, Alabama, shall be known and designated

as the ‘‘Claude Harris National Aquacultural Research Center’’.

(B) REFERENCES.—Any reference in a law, map, regulation, document, paper, or other record of the United States

to the laboratory referred to in subparagraph (A) shall

Alabama.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1183

be deemed to be a reference to the ‘‘Claude Harris National

Aquacultural Research Center’’.

(2) TRANSFER OF LABORATORY TO DEPARTMENT OF AGRI- CULTURE.—Subject to section 1531 of title 31, United States

Code, not later than 90 days after the date of enactment of

this Act, the Secretary of the Interior may transfer, in whole

or in part, to the Department of Agriculture, with the consent

of the Secretary of Agriculture—

(A) the personnel employed in connection with the

laboratory referred to in paragraph (1);

(B) the assets, liabilities, contracts, and real and personal property of the laboratory;

(C) the records of the laboratory; and

(D) the unexpended balance of appropriations,

authorizations, allocations, and other funds employed in

connection with, held in connection with, arising from,

available to, or to be made available in connection with

the laboratory.

(b) NONDUPLICATION OF FACILITIES.—The research center designated by subsection (a) shall be complementary to, and not

duplicative of, facilities of colleges, universities, and nonprofit

institutions, and facilities of the Agricultural Research Service,

within the State and region, as determined by the Secretary of

Agriculture.

SEC. 892. USE OF REMOTE SENSING DATA AND OTHER DATA TO ANTICIPATE POTENTIAL FOOD, FEED, AND FIBER SHORTAGES

OR EXCESSES AND TO PROVIDE TIMELY INFORMATION

TO ASSIST FARMERS WITH PLANTING DECISIONS.

(a) FINDINGS.—Congress finds that—

(1) remote sensing data can be useful to predict impending

famine problems and forest infestations in time to allow

remedial action;

(2) remote sensing data can inform the agricultural community as to the condition of crops and the land that sustains

those crops; and

(3) remote sensing data and other data can be valuable,

when received on a timely basis, in determining the need for

additional plantings of a particular crop or a substitute crop.

(b) INFORMATION DEVELOPMENT.—The Secretary of Agriculture

and the Administrator of the National Aeronautics and Space

Administration, maximizing private funding and involvement, shall

provide farmers and other interested persons with timely information, through remote sensing, on crop conditions, fertilization and

irrigation needs, pest infiltration, soil conditions, projected food,

feed, and fiber production, and any other information available

through remote sensing.

(c) COORDINATION.—The Secretary of Agriculture and the

Administrator of the National Aeronautics and Space Administration shall jointly develop a proposal to provide farmers and other

prospective users with supply and demand information for food

and fibers.

(d) SUNSET.—The authorities provided by this section shall

expire 5 years after the date of enactment of this Act.

SEC. 893. SENSE OF SENATE REGARDING METHYL BROMIDE ALTERNATIVE RESEARCH AND EXTENSION ACTIVITIES.

It is the sense of the Senate that—

7 USC 5935.
110 STAT. 1184 PUBLIC LAW 104–127—APR. 4, 1996

(1) the Department of Agriculture should continue to make

methyl bromide alternative research and extension activities

a high priority of the Department; and

(2) the Department of Agriculture, the Environmental

Protection Agency, producer and processor organizations,

environmental organizations, and State agencies should continue their dialogue on the risks and benefits of extending

the 2001 phaseout deadline.

Subtitle E—Research Authority After

Fiscal Year 1997

SEC. 897. AUTHORIZATION OF APPROPRIATIONS.

Subject to section 898, there are authorized to be appropriated

for fiscal years 1998 through 2002 such sums as are necessary

to carry out the agricultural research, extension, and education

activities and initiatives of the Department of Agriculture.

SEC. 898. ACTIVITIES SUBJECT TO AVAILABILITY OF APPROPRIATIONS.

During each of fiscal years 1998 through 2002, the Secretary

of Agriculture shall conduct only those agricultural research, extension, and education activities and initiatives of the Department

of Agriculture for which funds are specifically provided for the

fiscal year in an appropriation Act.

TITLE IX—MISCELLANEOUS

Subtitle A—Commercial Transportation of

Equine for Slaughter

SEC. 901. FINDINGS.

Because of the unique and special needs of equine being transported to slaughter, Congress finds that it is appropriate for the

Secretary of Agriculture to issue guidelines for the regulation of

the commercial transportation of equine for slaughter by persons

regularly engaged in that activity within the United States.

SEC. 902. DEFINITIONS.

In this subtitle:

(1) COMMERCIAL TRANSPORTATION.—The term ‘‘commercial

transportation’’ means the regular operation for profit of a

transport business that uses trucks, tractors, trailers, or

semitrailers, or any combination thereof, propelled or drawn

by mechanical power on any highway or public road.

(2) EQUINE FOR SLAUGHTER.—The term ‘‘equine for

slaughter’’ means any member of the Equidae family being

transferred to a slaughter facility, including an assembly point,

feedlot, or stockyard.

(3) PERSON.—The term ‘‘person’’—

(A) means any individual, partnership, corporation, or

cooperative association that regularly engages in the

commercial transportation of equine for slaughter; but

(B) does not include any individual or other entity

referred to in subparagraph (A) that occasionally transports

7 USC 1901 note.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1185

equine for slaughter incidental to the principal activity

of the individual or other entity in production agriculture.

SEC. 903. REGULATION OF COMMERCIAL TRANSPORTATION OF

EQUINE FOR SLAUGHTER.

(a) IN GENERAL.—Subject to the availability of appropriations,

the Secretary of Agriculture may issue guidelines for the regulation

of the commercial transportation of equine for slaughter by persons

regularly engaged in that activity within the United States.

(b) ISSUES FOR REVIEW.—In carrying out this section, the Secretary of Agriculture shall review the food, water, and rest provided

to equine for slaughter in transit, the segregation of stallions from

other equine during transit, and such other issues as the Secretary

considers appropriate.

(c) ADDITIONAL AUTHORITY.—In carrying out this section, the

Secretary of Agriculture may—

(1) require any person to maintain such records and reports

as the Secretary considers necessary;

(2) conduct such investigations and inspections as the Secretary considers necessary; and

(3) establish and enforce appropriate and effective civil

penalties.

SEC. 904. LIMITATION OF AUTHORITY TO EQUINE FOR SLAUGHTER.

Nothing in this subtitle authorizes the Secretary of Agriculture

to regulate the routine or regular transportation, to slaughter or

elsewhere, of—

(1) livestock other than equine; or

(2) poultry.

SEC. 905. EFFECTIVE DATE.

This subtitle shall become effective on the first day of the

first month that begins 30 days or more after the date of enactment

of this Act.

Subtitle B—General Provisions

SEC. 911. INTERSTATE QUARANTINE.

The fourth sentence of section 8 of the Act of August 20,

1912 (7 U.S.C. 161), is amended by inserting after ‘‘Provided, That’’

the following: ‘‘if the Secretary of Agriculture determines under

this section that it is necessary to quarantine a State entirely

comprised of islands, the Secretary of Agriculture, in implementing

the restrictions authorized under this section, shall give consideration to enhancing passenger movement and commerce on and

between islands in the State: Provided further, That’’.

SEC. 912. COTTON CLASSIFICATION SERVICES.

(a) EXTENSION OF AUTHORIZATION.—The first sentence of section 3a of the Act of March 3, 1927 (commonly known as the

‘‘Cotton Statistics and Estimates Act’’) (7 U.S.C. 473a), is amended

by striking ‘‘1996’’ and inserting ‘‘2002’’.

(b) COTTON CLASSING OFFICE LOCATIONS.—Section 4 of the

Act of March 3, 1927 (commonly known as the ‘‘Cotton Statistics

and Estimates Act’’) (7 U.S.C. 474), is amended by adding at the

end the following: ‘‘The Secretary of Agriculture shall maintain

Missouri.
110 STAT. 1186 PUBLIC LAW 104–127—APR. 4, 1996

until at least January 1, 1999, all cotton classing office locations

in the State of Missouri that existed on January 1, 1996.’’.

SEC. 913. PLANT VARIETY PROTECTION FOR CERTAIN TUBER PROPAGATED PLANT VARIETIES.

(a) IN GENERAL.—Section 42(a)(1)(B)(i) of the Plant Variety

Protection Act (7 U.S.C. 2402(a)(1)(B)(i)) is amended by inserting

after ‘‘filing’’ the following: ‘‘, except that in the case of a tuber

propagated plant variety the Secretary may waive the 4-year limitation for a period ending 1 year after the date of enactment of

the Federal Agriculture Improvement and Reform Act of 1996’’.

(b) TERM OF PROTECTION.—Section 83(b) of the Plant Variety

Protection Act (7 U.S.C. 2483(b)) is amended—

(1) by striking ‘‘(b) The term’’ and inserting the following:

‘‘(b) TERM.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2),

the term’’;

(2) in the second sentence, by striking ‘‘If the certificate’’

and inserting the following:

‘‘(2) EXCEPTIONS.—If the certificate’’; and

(3) in paragraph (2) (as so designated), by striking ‘‘except

that, in the case’’ and inserting the following: ‘‘except that—

‘‘(A) in the case of a tuber propagated plant variety

subject to a waiver granted under section 42(a)(1)(B)(i),

the term of the plant variety protection shall expire 20

years after the date of the original grant of the plant

breeder’s rights to the variety outside the United States;

and

‘‘(B) in the case’’.

SEC. 914. SWINE HEALTH PROTECTION.

(a) TERMINATION OF STATE PRIMARY ENFORCEMENT RESPONSIBILITY.—Section 10 of the Swine Health Protection Act (7 U.S.C.

3809) is amended—

(1) by redesignating subsection (c) as subsection (d); and

(2) by inserting after subsection (b) the following:

‘‘(c) REQUEST OF STATE OFFICIAL.—

‘‘(1) IN GENERAL.—On request of the Governor or other

appropriate official of a State, the Secretary may terminate,

effective as soon as the Secretary determines is practicable,

the primary enforcement responsibility of a State under subsection (a). In terminating the primary enforcement responsibility under this subsection, the Secretary shall work with the

appropriate State official to determine the level of support

to be provided to the Secretary by the State under this Act.

‘‘(2) REASSUMPTION.—Nothing in this subsection shall prevent a State from reassuming primary enforcement responsibility if the Secretary determines that the State meets the requirements of subsection (a).’’.

(b) ADVISORY COMMITTEE.—The Swine Health Protection Act

is amended—

(1) by striking section 11 (7 U.S.C. 3810); and

(2) by redesignating sections 12, 13, and 14 (7 U.S.C.

3811, 3812, and 3813) as sections 11, 12, and 13, respectively.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1187

SEC. 915. DESIGNATION OF MOUNT PLEASANT NATIONAL SCENIC

AREA.

Sections 1, 2, and 3(a)(1) of the George Washington National

Forest Mount Pleasant Scenic Area Act (Public Law 103–314; 16

U.S.C. 545 note) are each amended by striking ‘‘George Washington

National Forest Mount Pleasant Scenic Area’’ and inserting ‘‘Mount

Pleasant National Scenic Area’’.

SEC. 916. PSEUDORABIES ERADICATION PROGRAM.

Section 2506(d) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (21 U.S.C. 114i(d)) is amended by striking ‘‘1995’’

and inserting ‘‘2002’’.

SEC. 917. COLLECTION AND USE OF AGRICULTURAL QUARANTINE AND

INSPECTION FEES.

Section 2509 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (21 U.S.C. 136a) is amended by striking subsection

(a) and inserting the following:

‘‘(a) QUARANTINE AND INSPECTION FEES.—

‘‘(1) FEES AUTHORIZED.—The Secretary of Agriculture may

prescribe and collect fees sufficient—

‘‘(A) to cover the cost of providing agricultural quarantine and inspection services in connection with the

arrival at a port in the customs territory of the United

States, or the preclearance or preinspection at a site outside

the customs territory of the United States, of an international passenger, commercial vessel, commercial aircraft,

commercial truck, or railroad car;

‘‘(B) to cover the cost of administering this subsection;

and

‘‘(C) through fiscal year 2002, to maintain a reasonable

balance in the Agricultural Quarantine Inspection User

Fee Account established under paragraph (5).

‘‘(2) LIMITATION.—In setting the fees under paragraph (1),

the Secretary shall ensure that the amount of the fees is

commensurate with the costs of agricultural quarantine and

inspection services with respect to the class of persons or entities paying the fees. The costs of the services with respect

to passengers as a class includes the costs of related inspections

of the aircraft or other vehicle.

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

by any person on behalf of the Secretary are held in trust

for the United States and shall be remitted to the Secretary

in such manner and at such times as the Secretary may prescribe.

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

fee under this subsection fails to pay the fee when due, the

Secretary shall assess a late payment penalty, and the overdue

fees shall accrue interest, as required by section 3717 of title

31, United States Code.

‘‘(5) AGRICULTURAL QUARANTINE INSPECTION USER FEE

ACCOUNT.—

‘‘(A) ESTABLISHMENT.—There is established in the

Treasury of the United States a fund, to be known as

the ‘Agricultural Quarantine Inspection User Fee Account’,

which shall contain all of the fees collected under this
110 STAT. 1188 PUBLIC LAW 104–127—APR. 4, 1996

subsection and late payment penalties and interest charges

collected under paragraph (4) through fiscal year 2002.

‘‘(B) USE OF ACCOUNT.—For each of fiscal years 1996

through 2002, funds in the Agricultural Quarantine Inspection User Fee Account shall be available, in such amounts

as are provided in advance in appropriations Acts, to cover

the costs associated with the provision of agricultural quarantine and inspection services and the administration of

this subsection. Amounts made available under this

subparagraph shall be available until expended.

‘‘(C) EXCESS FEES.—Fees and other amounts collected

under this subsection in any of fiscal years 1996 through

2002 in excess of $100,000,000 shall be available for the

purposes specified in subparagraph (B) until expended,

without further appropriation.

‘‘(6) USE OF AMOUNTS COLLECTED AFTER FISCAL YEAR 2002.—

After September 30, 2002, the unobligated balance in the Agricultural Quarantine Inspection User Fee Account and fees and

other amounts collected under this subsection shall be credited

to the Department of Agriculture accounts that incur the costs

associated with the provision of agricultural quarantine and

inspection services and the administration of this subsection.

The fees and other amounts shall remain available to the

Secretary until expended without fiscal year limitation.

‘‘(7) STAFF YEARS.—The number of full-time equivalent positions in the Department of Agriculture attributable to the provision of agricultural quarantine and inspection services and

the administration of this subsection shall not be counted

toward the limitation on the total number of full-time equivalent positions in all agencies specified in section 5(b) of the

Federal Workforce Restructuring Act of 1994 (Public Law 103–

226; 5 U.S.C. 3101 note) or other limitation on the total number

of full-time equivalent positions.’’.

SEC. 918. MEAT AND POULTRY INSPECTION.

(a) ESTABLISHMENT OF SAFE MEAT AND POULTRY INSPECTION

PANEL.—

(1) IN GENERAL.—The Federal Meat Inspection Act is

amended—

(A) by redesignating section 410 (21 U.S.C. 680) as

section 411; and

(B) by inserting after section 409 (21 U.S.C. 679) the

following:

‘‘SEC. 410. SAFE MEAT AND POULTRY INSPECTION PANEL.

‘‘(a) ESTABLISHMENT.—There is established in the Department

of Agriculture a permanent advisory panel to be known as the

‘Safe Meat and Poultry Inspection Panel’ (referred to in this section

as the ‘panel’).

‘‘(b) DUTIES.—

‘‘(1) REVIEW AND EVALUATION.—The panel shall review and

evaluate, as the panel considers necessary, the adequacy, necessity, safety, cost-effectiveness, and scientific merit of—

‘‘(A) inspection procedures of, and work rules and

worker relations involving Federal employees employed in,

plants inspected under this Act;

21 USC 679a.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1189

‘‘(B) informal petitions or proposals for changes in

inspection procedures, processes, and techniques of plants

inspected under this Act;

‘‘(C) formal changes in meat inspection regulations

promulgated under this Act, whether in notice, proposed,

or final form; and

‘‘(D) such other matters as may be referred to the

panel by the Secretary regarding the quality or effectiveness of a safe and cost-effective meat inspection system

under this Act.

‘‘(2) REPORTS.—

‘‘(A) IN GENERAL.—The panel shall submit to the Secretary a report on the results of each review and evaluation

carried out under paragraph (1), including such recommendations as the panel considers appropriate.

‘‘(B) REPORTS ON FORMAL CHANGES.—In the case of

a report concerning a formal change in meat inspection

regulations, the report shall be made within the time limits

prescribed for formal comments on such changes.

‘‘(C) PUBLICATION IN FEDERAL REGISTER.—Each report

of the panel to the Secretary shall be published in the

Federal Register.

‘‘(c) SECRETARIAL RESPONSE.—Not later than 90 days after the

publication of a panel report under subsection (b)(2)(C), the Secretary shall publish in the Federal Register any response required

of the Secretary to the report.

‘‘(d) COMPOSITION OF PANEL.—The panel shall be composed

of 7 members, not fewer than 5 of whom shall be from the food

science, meat science, or poultry science profession, appointed to

staggered terms not to exceed 3 years by the Secretary from nominations received from the National Institutes of Health and the Federation of American Societies of Food Animal Science and based

on the professional qualifications of the nominees.

‘‘(e) NOMINATIONS.—

‘‘(1) INITIAL PANEL.—In constituting the initial panel, the

Secretary shall solicit 6 nominees from the National Institutes

of Health and 6 nominees from the Federation of American

Societies of Food Animal Science for membership on the panel.

‘‘(2) VACANCIES.—Any subsequent vacancy on the panel

shall be filled by the Secretary after soliciting 2 nominees

from the National Institutes of Health and 2 nominees from

the Federation of American Societies of Food Animal Science.

‘‘(3) REQUIREMENTS FOR NOMINEES.—

‘‘(A) IN GENERAL.—Each nominee provided under paragraph (1) or (2) shall have a background in public health

issues and a scientific expertise in food, meat, or poultry

science or in veterinary science.

‘‘(B) SUBMISSION OF INFORMATION.—The Secretary may

require nominees to submit such information as the Secretary considers necessary prior to completing the selection

process.

‘‘(4) ADDITIONAL NOMINEES.—If any list of nominees provided under paragraph (1) or (2) is unsatisfactory to the Secretary, the Secretary may request the nominating entities to

submit an additional list of nominees.

‘‘(f) TRAVEL EXPENSES.—While away from the home or regular

place of business of a member of the panel in the performance

Federal Register,

publication.
110 STAT. 1190 PUBLIC LAW 104–127—APR. 4, 1996

of services for the panel, the member shall be allowed travel

expenses, including per diem in lieu of subsistence, at the same

rate as a person employed intermittently in the Government service

would be allowed under section 5703 of title 5, United States

Code.

‘‘(g) CONFLICTS OF INTEREST.—The Secretary shall promulgate

regulations regarding conflicts of interest with respect to the members of the panel.

‘‘(h) EXEMPTION.—The Federal Advisory Committee Act (5

U.S.C. App.) and title XVIII of the Food and Agriculture Act of

1977 (7 U.S.C. 2281 et seq.) shall not apply to the panel.

‘‘(i) FUNDING.—From funds available to the Secretary to carry

out this Act and the Poultry Products Inspection Act (21 U.S.C.

451 et seq.), the Secretary shall allocate such sums as may be

necessary to carry out this section.’’.

(2) CROSS REFERENCE IN POULTRY PRODUCTS INSPECTION

ACT.—The Poultry Products Inspection Act (21 U.S.C. 451 et

seq.) is amended by adding at the end the following:

‘‘SEC. 30. SAFE MEAT AND POULTRY INSPECTION PANEL.

‘‘(a) REVIEW AND EVALUATION.—The advisory panel known as

the ‘Safe Meat and Poultry Inspection Panel’ established by section

410 of the Federal Meat Inspection Act shall review and evaluate,

as the panel considers necessary, the adequacy, necessity, safety,

cost-effectiveness, and scientific merit of—

‘‘(1) inspection procedures of, and work rules and worker

relations involving Federal employees employed in, plants

inspected under this Act;

‘‘(2) informal petitions or proposals for changes in inspection procedures, processes, and techniques of plants inspected

under this Act;

‘‘(3) formal changes in poultry inspection regulations

promulgated under this Act, whether in notice, proposed, or

final form; and

‘‘(4) such other matters as may be referred to the panel

by the Secretary regarding the quality or effectiveness of a

safe and cost-effective poultry inspection system under this

Act.

‘‘(b) REPORTS.—

‘‘(1) IN GENERAL.—The Safe Meat and Poultry Inspection

Panel shall submit to the Secretary a report on the results

of each review and evaluation carried out under paragraph

(1), including such recommendations as the panel considers

appropriate.

‘‘(2) REPORTS ON FORMAL CHANGES.—In the case of a report

concerning a formal change in poultry inspection regulations,

the report shall be made within the time limits prescribed

for formal comments on such changes.’’.

(b) INTERSTATE SHIPMENT OF STATE-INSPECTED MEAT AND

POULTRY.—Not later than 90 days after the date of enactment

of this Act, the Secretary of Agriculture shall submit to Congress

recommendations concerning the steps necessary to achieve interstate shipment of—

(1) meat inspected under a State meat inspection program

developed and administered under section 301 of the Federal

Meat Inspection Act (21 U.S.C. 661); and

21 USC 471.

Regulations.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1191

(2) poultry inspected under a State poultry product inspection program developed and administered under section 5 of

the Poultry Products Inspection Act (21 U.S.C. 454).

SEC. 919. REIMBURSABLE AGREEMENTS.

(a) IN GENERAL.—The Secretary of Agriculture (referred to

in this section as the ‘‘Secretary’’) may enter into reimbursable

fee agreements with persons for preclearance at locations outside

the United States of plants, plant products, animals, and articles

for movement into the United States.

(b) OVERTIME, NIGHT, AND HOLIDAY WORK.—Notwithstanding

any other provision of law, the Secretary may pay an employee

of the Department of Agriculture performing services relating to

imports into and exports from the United States for overtime,

night, and holiday work performed by the employee at a rate

of pay established by the Secretary.

(c) REIMBURSEMENT.— (1) IN GENERAL.—The Secretary may require persons for

whom preclearance services are performed to reimburse the

Secretary for any amounts paid by the Secretary for performance of the services.

(2) CREDITING OF FUNDS.—All funds collected under paragraph (1) shall be credited to the account that incurs the

costs and shall remain available until expended without fiscal

year limitation.

(3) LATE PAYMENT PENALTY.—

(A) IN GENERAL.—On failure of a person to reimburse

the Secretary for the costs of performance of preclearance

services—

(i) the Secretary may assess a late payment penalty; and

(ii) the overdue funds shall accrue interest in

accordance with section 3717 of title 31, United States

Code.

(B) CREDITING OF FUNDS.—Any late payment penalty

and any accrued interest collected under this paragraph

shall be credited to the account that incurs the costs and

shall remain available until expended without fiscal year

limitation.

SEC. 920. OVERSEAS TORT CLAIMS.

(a) IN GENERAL.—The Secretary of Agriculture may pay a tort

claim in the manner authorized by section 2672 of title 28, United

States Code, if the claim arises outside the United States in connection with activities of individuals who are performing services for

the Secretary.

(b) PERIOD FOR PRESENTATION OF CLAIM.—A claim may not

be allowed under this section unless the claim is presented in

writing to the Secretary of Agriculture within 2 years after the

date on which the claim accrues.

(c) FINALITY.—Notwithstanding any other provision of law, an

award or denial of a claim by the Secretary of Agriculture under

this section is final.

SEC. 921. OPERATION OF GRADUATE SCHOOL OF DEPARTMENT OF

AGRICULTURE AS NONAPPROPRIATED FUND

INSTRUMENTALITY.

(a) DEFINITIONS.—In this section:

7 USC 2279b.

7 USC 2262a.

7 USC 2260a.
110 STAT. 1192 PUBLIC LAW 104–127—APR. 4, 1996

(1) GRADUATE SCHOOL.—The term ‘‘Graduate School’’

means the Graduate School of the Department of Agriculture.

(2) BOARD.—The term ‘‘Board’’ means the General Administration Board of the Graduate School.

(3) DIRECTOR.—The term ‘‘Director’’ means the Director

of the Graduate School.

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

of Agriculture.

(b) OPERATION AS NONAPPROPRIATED FUND INSTRUMENTALITY.—

On and after the date of enactment of this Act, the Graduate

School of the Department of Agriculture shall continue to operate

as a nonappropriated fund instrumentality of the United States

under the jurisdiction of the Department of Agriculture.

(c) ACTIVITIES OF GRADUATE SCHOOL.—Under the general

supervision of the Secretary, the Graduate School shall develop,

administer, and provide educational, training, and professional

development activities, including educational activities for Federal

agencies, Federal employees, nonprofit organizations, other entities,

and members of the general public.

(d) FEES AND DONATIONS.—

(1) COLLECTION OF FEES.—The Graduate School may charge

and retain fair and reasonable fees for the activities provided

by the Graduate School. The amount of the fees shall be based

on the cost of the activities to the Graduate School.

(2) ACCEPTANCE OF DONATIONS.—

(A) ACCEPTANCE AND USE AUTHORIZED.—The Graduate

School may accept, use, hold, dispose, and administer gifts,

bequests, and devises of money, securities, and other real

or personal property made for the benefit of, or in connection with, the Graduate School.

(B) EXCEPTION.—The Graduate School shall not accept

a donation from a person that is actively engaged in a

procurement activity with the Graduate School or has an

interest that may be substantially affected by the performance or nonperformance of an official duty of a member

of the Board or an employee of the Graduate School.

(3) NOT FEDERAL FUNDS.—Fees collected under paragraph

(1) and amounts received under paragraph (2) shall not be

considered to be Federal funds and shall not be required to

be deposited in the Treasury of the United States.

(e) GENERAL ADMINISTRATION BOARD AND DIRECTOR.—

(1) APPOINTMENT AS GOVERNING BOARD.—The Secretary

shall appoint a General Administration Board to serve as a

governing board for the Graduate School and to supervise and

direct the activities of the Graduate School. The Board shall

be subject to regulation by the Secretary.

(2) DUTIES OF BOARD.—The Board shall—

(A) formulate broad policies in accordance with which

the Graduate School shall be administered;

(B) take all steps necessary to ensure that the highest

possible educational standards are maintained by the Graduate School;

(C) exercise general supervision over the administration of the Graduate School; and

(D) establish such bylaws, rules, and procedures as

may be necessary for the fulfillment of the duties described

in subparagraphs (A), (B), and (C).
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1193

(3) APPOINTMENT OF DIRECTOR AND OTHER OFFICERS.—The

Board shall select a Director and such other officers as the

Board considers necessary to administer the Graduate School.

The Director and other officers shall serve on such terms and

perform such duties as the Board may prescribe.

(4) DUTIES OF DIRECTOR.—The Director shall be responsible,

subject to the supervision and direction of the Board, for carrying out the functions of the Graduate School.

(5) BORROWING AND INVESTMENT AUTHORITY.—The Board

may authorize the Director—

(A) to borrow money on the credit of the Graduate

School; and

(B) to invest funds held in excess of the current operating requirements of the Graduate School for purposes of

maintaining a reasonable reserve.

(6) LIABILITY.—The Director and the members of the Board

shall not be held personally liable for any loss or damage

that may accrue to the funds of the Graduate School as the

result of any act or exercise of discretion performed in carrying

out their duties under this section.

(f) EMPLOYEES.—Employees of the Graduate School are employees of a nonappropriated fund instrumentality and shall not be

considered to be Federal employees.

(g) NOT A FEDERAL AGENCY.—The Graduate School shall not

be considered to be a Federal agency for purposes of—

(1) the Federal Advisory Committee Act (5 U.S.C. App.);

(2) section 552 or 552a of title 5, United States Code;

or

(3) chapter 171 of title 28, United States Code.

(h) ACQUISITION AND DISPOSAL OF PROPERTY.—In order to carry

out the activities of the Graduate School, the Graduate School

may—

(1) acquire real property in the District of Columbia and

in other places by lease, purchase, or otherwise;

(2) maintain, enlarge, or remodel any such property;

(3) have sole control of any such property; and

(4) dispose of real and personal property without regard

to the Federal Property and Administrative Services Act of

1949 (40 U.S.C. 471 et seq.).

(i) CONTRACT AUTHORITY.—The Graduate School may enter

into contracts without regard to the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) or any other

law that prescribes procedures for the procurement of property

or services by an executive agency.

(j) USE OF DEPARTMENT FACILITIES AND RESOURCES.—The

Graduate School may use the facilities and resources of the Department of Agriculture, on the condition that any costs incurred by

the Department that are attributable solely to Graduate School

operations and all costs incurred by the Graduate School arising

out of such operations shall be paid using funds of the Graduate

School. Federal funds may not be used to pay the costs.

SEC. 922. STUDENT INTERNSHIP PROGRAMS.

(a) STUDENT INTERN SUBSISTENCE PROGRAM.—

(1) DEFINITION OF STUDENT INTERN.—In this subsection,

the term ‘‘student intern’’ means a person who—

7 USC 2279c.
110 STAT. 1194 PUBLIC LAW 104–127—APR. 4, 1996

(A) is employed by the Department of Agriculture

(referred to in this section as the ‘‘Department’’) to assist

scientific, professional, administrative, or technical employees of the Department; and

(B) is a student in good standing at an institution

of higher education (as defined in section 1201 of the Higher

Education Act of 1965 (20 U.S.C. 1141)) pursuing a course

of study related to the field in which the person is employed

by the Department.

(2) PAYMENT OF CERTAIN EXPENSES BY THE SECRETARY.—

The Secretary of Agriculture (referred to in this section as

the ‘‘Secretary’’) may, out of user fee funds or funds appropriated to any agency of the Department, pay for lodging

expenses, subsistence expenses, and transportation expenses

of a student intern at the agency (including expenses of

transportation to and from the student intern’s residence at

or near the institution of higher education attended by the

student intern and the official duty station at which the student

intern is employed).

(b) COOPERATION WITH ASSOCIATIONS OF COLLEGES AND

UNIVERSITIES.—

(1) AUTHORITY TO COOPERATE.—Notwithstanding chapter

63 of title 31, United States Code, the Secretary may enter

into cooperative agreements on an annual basis with 1 or

more associations of institutions of higher education (as defined

in section 1201 of the Higher Education Act of 1965 (20 U.S.C.

1141)) for the purpose of providing for Department participation

in internship programs for graduate and undergraduate students who are selected by the associations from students attending member institutions of the associations and other institutions of higher education.

(2) INTERNSHIP PROGRAM.—An internship program supported under this subsection (referred to in this subsection

as an ‘‘internship program’’) shall provide work assignments

for students within the Department and such other activities

as the association that enters into the cooperative agreement

under paragraph (1) with respect to the internship program

(referred to in this subsection as the ‘‘cooperating association’’)

and the Secretary shall determine. The nature of Department

participation in an internship program shall be developed

jointly by the Secretary and the cooperating association.

(3) PROGRAM COORDINATION.—The cooperating association

shall coordinate an internship program, including—

(A) the recruitment of students;

(B) arrangements for travel of the students to Washington, District of Columbia, and to agency field locations;

(C) the provision of housing for students, if required;

and

(D) all activities for the students that take place outside the Department work assignments of the students.

(4) NUMBER AND SELECTION OF STUDENTS.—

(A) NUMBER.—A cooperative agreement entered into

under paragraph (1) shall specify the number of students

that the Department will host each year and a list of

work assignments to be provided for the students.

(B) SELECTION.—The cooperating association shall provide the Department with a pool of student candidates
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1195

meeting the requirements for each work assignment identified by the Secretary. Final selection of the students for

Department internship positions shall be made by the Secretary.

(5) COST REIMBURSEMENT.—From such amounts as the Secretary determines are available each fiscal year for internship

programs, and subject to such regulations as the Secretary

may issue, the Secretary may reimburse a cooperating association for the Department share of all direct and indirect costs

of an internship program, including student stipends, transportation costs to the internship site, and other costs of an internship program.

(6) LEAD AGENCY.—The Secretary may designate a lead

agency within the Department to carry out this subsection.

(7) INTERAGENCY AGREEMENTS.—Agencies and offices

within the Department other than the lead agency—

(A) may enter into interagency agreements with the

lead agency to provide work assignments for students

participating in an internship program; and

(B) shall reimburse the lead agency for the direct and

indirect costs of each student assigned to the agency under

an internship program.

(8) FEDERAL EMPLOYEE STATUS.—A student who participates in an internship program shall not be considered a Federal employee, except for purposes of chapter 81 of title 5,

and chapter 171 of title 28, United States Code.

SEC. 923. CONVEYANCE OF EXCESS FEDERAL PERSONAL PROPERTY.

Notwithstanding any other provision of law, the Secretary of

Agriculture may—

(1) convey title to excess Federal personal property owned

by the Department of Agriculture, with or without monetary

compensation and for such purposes as are determined by

the Secretary, to—

(A) any of the 1994 Institutions (as defined in section

532 of the Equity in Educational Land-Grant Status Act

of 1994 (Public Law 103–382; 7 U.S.C. 301 note));

(B) any Hispanic-serving institution (as defined in section 316(b) of the Higher Education Act of 1965 (20 U.S.C.

1059c(b))); and

(C) any college or university eligible to receive funds

under the Act of August 30, 1890 (7 U.S.C. 321 et seq.),

including Tuskegee University; and

(2) acquire from, exchange with, or dispose of personal

property to other Federal departments and agencies without

monetary compensation in furtherance of the purposes of this

section.

SEC. 924. CONVEYANCE OF LAND TO WHITE OAK CEMETERY.

(a) IN GENERAL.—

(1) RELEASE OF INTEREST.—After execution of the agreement described in subsection (b), the Secretary of Agriculture

shall release the condition stated in the deed on the land

described in subsection (c) that the land be used for public

purposes, and that if the land is not so used, that the land

revert to the United States. The release shall be on the condition that the land be used exclusively for cemetery purposes,

Arkansas.

7 USC 2206a.
110 STAT. 1196 PUBLIC LAW 104–127—APR. 4, 1996

and that if the land is not so used, that the land revert to

the United States.

(2) BANKHEAD-JONES FARM TENANT ACT.—Section 32(c) of

the Bankhead-Jones Farm Tenant Act (7 U.S.C. 1011(c)) shall

not apply to the release under paragraph (1).

(b) AGREEMENT.—The Secretary of Agriculture shall make the

release under subsection (a) on execution by the Board of Trustees

of the University of Arkansas, in consideration of the release, of

an agreement, satisfactory to the Secretary of Agriculture, that—

(1) the Board of Trustees will not sell, lease, exchange,

or otherwise dispose of the land described in subsection (c)

except to the White Oak Cemetery Association of Washington

County, Arkansas, or a successor organization, for exclusive

use for an expansion of the cemetery maintained by the Association or successor organization; and

(2) the proceeds of such a disposition of the land will

be deposited and held in an account open to inspection by

the Secretary of Agriculture, and used, if withdrawn from the

account, for public purposes.

(c) LAND DESCRIPTION.—The land described in this subsection

is the land conveyed to the Board of Trustees of the University

of Arkansas, with certain other land, by deed dated November

18, 1953, comprising approximately 2.2 acres located within property of the University of Arkansas in Washington County, Arkansas,

commonly known as the ‘‘Savor property’’ and described as follows:

The part of Section 20, Township 17 north, range 31 west,

beginning at the north corner of the White Oak Cemetery

and the University of Arkansas Agricultural Experiment Station farm at Washington County road #874, running west

approximately 330 feet, thence south approximately 135 feet,

thence southeast approximately 384 feet, thence north approximately 330 feet to the point of beginning.

SEC. 925. SALE OF LAND BY THE UNIVERSITY OF ARKANSAS.

The Act of March 2, 1887 (commonly known as the ‘‘Hatch

Act of 1887’’) (7 U.S.C. 361a et seq.) shall not apply to the sale

by the University of Arkansas of the approximately 103.52 acres

of land in Washington County, Arkansas, owned by the University

and commonly known as the ‘‘Walker Tract’’, if the sale is made

on the condition that all of the proceeds of the sale are used

for agricultural research facilities and programs of the University

of Arkansas.

SEC. 926. DESIGNATION OF DALE BUMPERS SMALL FARMS RESEARCH

CENTER.

(a) IN GENERAL.—The small farms research facility of the Agricultural Research Service located near Booneville, Arkansas, shall

be known and designated as the ‘‘Dale Bumpers Small Farms

Research Center’’.

(b) REFERENCES.—Any reference in a law, map, regulation,

document, paper, or other record of the United States to the

research facility referred to in subsection (a) shall be deemed to

be a reference to the ‘‘Dale Bumpers Small Farms Research Center’’.

SEC. 927. DEPARTMENT OF AGRICULTURE WASHINGTON AREA

STRATEGIC SPACE PLAN.

The Secretary of Agriculture may obligate not more than

$5,000,000, from funds appropriated for agriculture buildings and

Maryland.

Arkansas.
PUBLIC LAW 104–127—APR. 4, 1996 110 STAT. 1197

LEGISLATIVE HISTORY—H.R. 2854 (S. 1541):

HOUSE REPORTS: Nos. 104–462, Pt. 1 (Comm. on Agriculture) and 104–494

(Comm. of Conference).

CONGRESSIONAL RECORD, Vol. 142 (1996):

Jan. 31, Feb. 1, 6, 7, S. 1541 considered and passed Senate.

Feb. 28, 29, H.R. 2854 considered and passed House.

Mar. 12, considered and passed Senate, amended, in lieu of S. 1541.

Mar. 27, Senate considered conference report.

Mar. 28, Senate and House agreed to conference report.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):

Apr. 4, Presidential statement.

Æ

facilities and rental payments, for the improvement of State and

local roads relating to the construction of an office complex at

the Beltsville Agriculture Research Center, Maryland, as part of

the implementation of the Department of Agriculture Washington

Area Strategic Space Plan.

SEC. 928. SEVERABILITY.

If any provision of this Act or the application thereof to any

person or circumstance is held invalid, the invalidity shall not

affect other provisions or applications of this Act that can be given

effect without regard to the invalid provision or application, and

to this end the provisions of this Act are severable.

Approved April 4, 1996.

7 USC 7201 note.