Calendar No. 330

104TH CONGRESS

2D SESSION S. 1541

A BILL

To extend, reform, and improve agricultural comand for other purposes. modity, trade, conservation, and other programs,

JANUARY 30, 1996

Read the second time and placed on the calendar
II

Calendar No. 330

104TH CONGRESS

2D SESSION S. 1541

To extend, reform, and improve agricultural commodity, trade, conservation,

and other programs, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 26, 1996

Mr. LUGAR (for himself, Mr. DOLE, Mr. HELMS, Mr. COCHRAN, Mr. CRAIG,

Mr. GRASSLEY, Mr. PRESSLER, Mr. COVERDELL, Mr. GORTON, Mr.

GRAMM, Mr. WARNER, Mrs. KASSEBAUM, Mr. MACK, Mrs. HUTCHISON,

and Mr. LOTT) introduced the following bill; which was read for the first

time

JANUARY 30, 1996

Read the second time and placed on the calendar

A BILL

To extend, reform, and improve agricultural commodity,

trade, conservation, and other programs, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Agricultural Market Transition Act of 1996’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of

2 this title is as follows:

Sec. 1. Short title; table of contents.

Subtitle A—Agricultural Market Transition Program

Sec. 12. Definitions.

Sec. 13. Production flexibility contracts.

Sec. 14. Nonrecourse marketing assistance loans and loan deficiency payments.

Sec. 15. Payment limitations.

Sec. 16. Peanut program.

Sec. 17. Sugar program.

Sec. 18. Administration.

Sec. 19. Elimination of permanent price support authority.

Sec. 20. Effect of amendments.

Subtitle B—Conservation

Sec. 31. Conservation.

Subtitle C—Agricultural Promotion and Export Programs

Sec. 41. Market promotion program.

Sec. 42. Export enhancement program.

Subtitle D—Miscellaneous

Sec. 51. Crop insurance.

Sec. 52. Collection and use of agricultural quarantine and inspection fees.

Sec. 53. Commodity Credit Corporation interest rate.

3 Subtitle A—Agricultural Market

4 Transition Program

5 SEC. 12. DEFINITIONS.

6 In this subtitle:

7 (1) CONSIDERED PLANTED.—The term ‘‘con8 sidered planted’’ means acreage that is considered

9 planted under title V of the Agricultural Act of 1949

10 (7 U.S.C. 1461 et seq.) (as in effect prior to the

11 amendment made by section 19(b)(2)).
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1 (2) CONTRACT.—The term ‘‘contract’’ means a

2 production flexibility contract entered into under

3 section 13.

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

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

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

8 amendment made by section 19(b)(2)) that would

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

10 amendment made by section 19(b)(2)).

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

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

15 payment’’ means a payment made under section 13

16 pursuant to a contract.

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

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

19 means the United States Department of Agriculture.

20 (8) FARM PROGRAM PAYMENT YIELD.—The

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

22 program payment yield established for the 1995 crop

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

25 amendment made by section 19(b)(2)).
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1 (9) LOAN COMMODITY.—The term ‘‘loan com2 modity’’ means each contract commodity, extra long

3 staple cotton, and oilseeds.

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

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

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

7 by the Secretary, other oilseeds.

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

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

10 corporation, association, trust, estate, or State

11 agency.

12 (12) PRODUCER.—

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

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

17 crop available for marketing from the farm, or

18 would have shared had the crop been produced.

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

20 includes a person growing hybrid seed under

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

23 not take into consideration the existence of a

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

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

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

5 means the Secretary of Agriculture.

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

7 the several States of the United States, the District

8 of Columbia, the Commonwealth of Puerto Rico, and

9 any other territory or possession of the United

10 States.

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

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

13 all of the States.

14 SEC. 13. PRODUCTION FLEXIBILITY CONTRACTS.

15 (a) CONTRACTS AUTHORIZED.—

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

17 practicable after the date of the enactment of this

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

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

22 operator shall agree, in exchange for annual contract

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

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

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

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

7 (C) the planting flexibility requirements of

8 subsection (j).

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

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

12 contract:

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

15 (B) An owner of eligible farmland who

16 shares in the risk of producing a crop.

17 (C) An operator of eligible farmland with

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

20 enters into the same contract.

21 (D) An operator of eligible farmland who

22 cash rents the eligible farmland under a lease

23 expiring on or after September 30, 2002, in

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

2 cash rents the eligible farmland under a lease

3 expiring before September 30, 2002, if the

4 owner consents to the contract.

5 (F) An owner of eligible farmland who

6 cash rents the eligible farmland and the lease

7 term expires before September 30, 2002, but

8 only if the actual operator of the farm declines

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

10 owner covered by this subparagraph, contract

11 payments shall not begin under a contract until

12 the fiscal year following the fiscal year in which

13 the lease held by the nonparticipating operator

14 expires.

15 (G) An owner or operator described in a

16 preceding subparagraph regardless of whether

17 the owner or operator purchased catastrophic

18 risk protection for a fall-planted 1996 crop

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

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

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

2 (A) DEADLINE.—Except as provided in

3 subparagraph (B), the Secretary may not enter

4 into a contract after April 15, 1996.

5 (B) CONSERVATION RESERVE LANDS.—

6 (i) IN GENERAL.—At the beginning of

7 each fiscal year, the Secretary shall allow

8 an eligible owner or operator on a farm

9 covered by a conservation reserve contract

10 entered into under section 1231 of the

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

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

14 expand a production flexibility contract to

15 cover the contract acreage of the farm that

16 was subject to the former conservation re17 serve contract.

18 (ii) AMOUNT.—Contract payments

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

21 amount applicable to the annual contract

22 payment level for the applicable crop.

23 (2) DURATION OF CONTRACT.—

24 (A) BEGINNING DATE.—A contract shall

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

3 (ii) in the case of acreage that was

4 subject to a conservation reserve contract

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

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

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

11 (3) ESTIMATION OF CONTRACT PAYMENTS.—At

12 the time the Secretary enters into a contract, the

13 Secretary shall provide an estimate of the minimum

14 contract payments anticipated to be made during at

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

17 (c) ELIGIBLE FARMLAND DESCRIBED.—Land shall

18 be considered to be farmland eligible for coverage under

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

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

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

23 the acreage reduction program authorized for a crop

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

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

2 19(b)(2)) or was considered planted;

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

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

6 was voluntarily terminated, on or after January 1,

7 1995; or

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

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

12 (d) TIME FOR PAYMENT.—

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

14 shall be made not later than September 30 of each

15 of fiscal years 1996 through 2002.

16 (2) ADVANCE PAYMENTS.—

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

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

20 made not later than June 15, 1996.

21 (B) SUBSEQUENT FISCAL YEARS.—At the

22 option of the owner or operator for fiscal year

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

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

2 FOR EACH FISCAL YEAR.—

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

4 maximum extent practicable, expend on a fiscal year

5 basis the following amounts to satisfy the obligations

6 of the Secretary under all contracts:

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

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

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

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

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

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

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

14 (2) ALLOCATION.—The amount made available

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

17 (A) For wheat, 26.26 percent.

18 (B) For corn, 46.22 percent.

19 (C) For grain sorghum, 5.11 percent.

20 (D) For barley, 2.16 percent.

21 (E) For oats, 0.15 percent.

22 (F) For upland cotton, 11.63 percent.

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

2 the amounts allocated for each contract commodity

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

4 (A) subtracting an amount equal to the

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

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

8 in effect prior to the amendment made by sec9 tion 19(b)(2)) for the 1994 and 1995 crops of

10 the commodity;

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

12 all repayments of deficiency payments received

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

15 (C) to the maximum extent practicable,

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

18 the request of an owner or operator subject to

19 a contract, as an offset against repayments of

20 deficiency payments otherwise required under

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

22 the commodity; and

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

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

2 (h) for the commodity.

3 (f) DETERMINATION OF CONTRACT PAYMENTS.—

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

8 (A) 85 percent of the contract acreage;

9 and

10 (B) the farm program payment yield.

11 (2) ANNUAL PAYMENT QUANTITY OF CONTRACT

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

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

17 (3) ANNUAL PAYMENT RATE.—The payment

18 rate for a contract commodity for each fiscal year

19 shall be equal to—

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

22 fiscal year; divided by

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

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

3 year with respect to a contract commodity shall be

4 equal to the product of—

5 (A) the payment quantity determined

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

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

10 (5) ASSIGNMENT OF CONTRACT PAYMENTS.—

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

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

14 apply to contract payments under this subsection.

15 The owner or operator making the assignment, or

16 the assignee, shall provide the Secretary with notice,

17 in such manner as the Secretary may require in the

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

20 (6) SHARING OF CONTRACT PAYMENTS.—The

21 Secretary shall provide for the sharing of contract

22 payments among the owners and operators subject

23 to the contract on a fair and equitable basis.

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

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

2 established under sections 1001 through 1001C of the

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

4 3).

5 (h) EFFECT OF VIOLATION.—

6 (1) TERMINATION OF CONTRACT.—Except as

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

8 subject to a contract violates the conservation plan

9 for the farm containing eligible farmland under the

10 contract, wetland protection requirements applicable

11 to the farm, or the planting flexibility requirements

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

13 contract with respect to the owner or operator on

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

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

18 has an interest and shall refund to the Secretary all

19 contract payments received by the owner or operator

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

22 the Secretary.

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

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

2 to the contract—

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

4 the contract payments received by the owner or

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

7 as determined by the Secretary; or

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

9 future contract payments that is proportionate

10 to the severity of the violation, as determined

11 by the Secretary.

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

15 under the contract if the contract acreage has been

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

19 shall not void the responsibilities of such an owner

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

22 contract acreage. On the resumption of operation or

23 control over the contract acreage by the owner or

24 operator, the provisions of the contract in effect on

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

2 under this subsection shall be considered to be an

3 adverse decision for purposes of the availability of

4 administrative review of the determination.

5 (i) TRANSFER OF INTEREST IN LANDS SUBJECT TO

6 CONTRACT.—

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

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

11 shall result in the termination of the contract with

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

13 transfer, unless the transferee of the acreage agrees

14 with the Secretary to assume all obligations of the

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

17 are consistent with the objectives of this section as

18 determined by the Secretary.

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

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

24 the Secretary.

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

2 (2), any commodity or crop may be planted on con3 tract acreage on a farm.

4 (2) LIMITATIONS.—

5 (A) HAYING AND GRAZING.—

6 (i) TIME LIMITATIONS.—Haying and

7 grazing on land exceeding 15 percent of

8 the contract acreage on a farm as provided

9 in clause (iii) shall be permitted, except

10 during any consecutive 5-month period be11 tween April 1 and October 31 that is de12 termined by the State committee estab13 lished under section 8(b) of the Soil Con14 servation and Domestic Allotment Act (16

15 U.S.C. 590h(b)) for a State. In the case of

16 a natural disaster, the Secretary may per17 mit unlimited haying and grazing on the

18 contract acreage of a farm.

19 (ii) CONTRACT COMMODITIES.—A con20 tract commodity may be hayed or grazed

21 on contract acreage on a farm without lim22 itation.

23 (iii) HAYING AND GRAZING LIMITA24 TION ON PORTION OF CONTRACT ACRE25 AGE.—Unlimited haying and grazing shall
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1 be permitted on not more than 15 percent

2 of the contract acreage on a farm.

3 (B) ALFALFA.—Alfalfa may be planted for

4 harvest without limitation on the contract acre5 age on a farm, except that each contract acre

6 that is planted for harvest to alfalfa in excess

7 of 15 percent of the total contract acreage on

8 a farm shall be ineligible for contract payments.

9 (C) FRUITS AND VEGETABLES.—

10 (i) IN GENERAL.—The planting for

11 harvest of fruits and vegetables shall be

12 prohibited on contract acreage.

13 (ii) UNRESTRICTED VEGETABLES.—

14 Lentils, mung beans, and dry peas may be

15 planted without limitation on contract

16 acreage.

17 SEC. 14. NONRECOURSE MARKETING ASSISTANCE LOANS

18 AND LOAN DEFICIENCY PAYMENTS.

19 (a) AVAILABILITY OF NONRECOURSE LOANS.—

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

21 through 2002 crops of each loan commodity, the

22 Secretary shall make available to producers on a

23 farm nonrecourse marketing assistance loans for

24 loan commodities produced on the farm. The loans

25 shall be made under terms and conditions that are
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1 prescribed by the Secretary and at the loan rate es2 tablished under subsection (b) for the loan commod3 ity.

4 (2) ELIGIBLE PRODUCTION.—The following

5 production shall be eligible for a marketing assist6 ance loan under this section:

7 (A) In the case of a marketing assistance

8 loan for a contract commodity, any production

9 by a producer who has entered into a produc10 tion flexibility contract.

11 (B) In the case of a marketing assistance

12 loan for extra long staple cotton and oilseeds,

13 any production.

14 (b) LOAN RATES.—

15 (1) WHEAT.—

16 (A) LOAN RATE.—Subject to subparagraph

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

18 loan for wheat shall be—

19 (i) not less than 85 percent of the

20 simple average price received by producers

21 of wheat, as determined by the Secretary,

22 during the marketing years for the imme23 diately preceding 5 crops of wheat, exclud24 ing the year in which the average price was
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1 the highest and the year in which the aver2 age price was the lowest in the period; but

3 (ii) not more than $2.58 per bushel.

4 (B) STOCKS TO USE RATIO ADJUST5 MENT.—If the Secretary estimates for any mar6 keting year that the ratio of ending stocks of

7 wheat to total use for the marketing year will

8 be—

9 (i) equal to or greater than 30 per10 cent, the Secretary may reduce the loan

11 rate for wheat for the corresponding crop

12 by an amount not to exceed 10 percent in

13 any year;

14 (ii) less than 30 percent but not less

15 than 15 percent, the Secretary may reduce

16 the loan rate for wheat for the correspond17 ing crop by an amount not to exceed 5 per18 cent in any year; or

19 (iii) less than 15 percent, the Sec20 retary may not reduce the loan rate for

21 wheat for the corresponding crop.

22 (C) NO EFFECT ON FUTURE YEARS.—Any

23 reduction in the loan rate for wheat under sub24 paragraph (B) shall not be considered in deter-
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1 mining the loan rate for wheat for subsequent

2 years.

3 (2) FEED GRAINS.—

4 (A) LOAN RATE FOR CORN.—Subject to

5 subparagraph (B), the loan rate for a market6 ing assistance loan for corn shall be—

7 (i) not less than 85 percent of the

8 simple average price received by producers

9 of corn, as determined by the Secretary,

10 during the marketing years for the imme11 diately preceding 5 crops of corn, excluding

12 the year in which the average price was the

13 highest and the year in which the average

14 price was the lowest in the period; but

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

16 (B) STOCKS TO USE RATIO ADJUST17 MENT.—If the Secretary estimates for any mar18 keting year that the ratio of ending stocks of

19 corn to total use for the marketing year will

20 be—

21 (i) equal to or greater than 25 per22 cent, the Secretary may reduce the loan

23 rate for corn for the corresponding crop by

24 an amount not to exceed 10 percent in any

25 year;
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1 (ii) less than 25 percent but not less

2 than 12.5 percent, the Secretary may re3 duce the loan rate for corn for the cor4 responding crop by an amount not to ex5 ceed 5 percent in any year; or

6 (iii) less than 12.5 percent the Sec7 retary may not reduce the loan rate for

8 corn for the corresponding crop.

9 (C) NO EFFECT ON FUTURE YEARS.—Any

10 reduction in the loan rate for corn under sub11 paragraph (B) shall not be considered in deter12 mining the loan rate for corn for subsequent

13 years.

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

15 for a marketing assistance loan for grain sor16 ghum, barley, and oats, respectively, shall be es17 tablished at such level as the Secretary deter18 mines is fair and reasonable in relation to the

19 rate that loans are made available for corn, tak20 ing into consideration the feeding value of the

21 commodity in relation to corn.

22 (3) UPLAND COTTON.—

23 (A) LOAN RATE.—Subject to subparagraph

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

25 loan for upland cotton shall be established by
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1 the Secretary at such loan rate, per pound, as

2 will reflect for the base quality of upland cot3 ton, as determined by the Secretary, at average

4 locations in the United States a rate that is not

5 less than the smaller of—

6 (i) 85 percent of the average price

7 (weighted by market and month) of the

8 base quality of cotton as quoted in the des9 ignated United States spot markets during

10 3 years of the 5-year period ending July

11 31 in the year in which the loan rate is an12 nounced, excluding the year in which the

13 average price was the highest and the year

14 in which the average price was the lowest

15 in the period; or

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

17 15-week period beginning July 1 of the

18 year in which the loan rate is announced,

19 of the 5 lowest-priced growths of the

growths quoted for Middling 13 20 ⁄32-inch cot21 ton C.I.F. Northern Europe (adjusted

22 downward by the average difference during

23 the period April 15 through October 15 of

24 the year in which the loan is announced

25 between the average Northern European
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1 price quotation of such quality of cotton

2 and the market quotations in the des3 ignated United States spot markets for the

4 base quality of upland cotton), as deter5 mined by the Secretary.

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

7 marketing assistance loan for upland cotton

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

9 than $0.5192 per pound.

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

11 rate for a marketing assistance loan for extra long

12 staple cotton shall be—

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

14 average price received by producers of extra

15 long staple cotton, as determined by the Sec16 retary, during 3 years of the 5 previous market17 ing years, excluding the year in which the aver18 age price was the highest and the year in which

19 the average price was the lowest in the period;

20 but

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

22 (5) RICE.—The loan rate for a marketing as23 sistance loan for rice shall be $6.50 per hundred24 weight.

25 (6) OILSEEDS.—
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1 (A) SOYBEANS.—The loan rate for a mar2 keting assistance loan for soybeans shall be

3 $4.92 per bushel.

4 (B) SUNFLOWER SEED, CANOLA,

5 RAPESEED, SAFFLOWER, MUSTARD SEED, AND

6 FLAXSEED.—The loan rates for a marketing as7 sistance loan for sunflower seed, canola,

8 rapeseed, safflower, mustard seed, and flaxseed,

9 individually, shall be $0.087 per pound.

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

11 a marketing assistance loan for other oilseeds

12 shall be established at such level as the Sec13 retary determines is fair and reasonable in rela14 tion to the loan rate available for soybeans, ex15 cept in no event shall the rate for the oilseeds

16 (other than cottonseed) be less than the rate es17 tablished for soybeans on a per-pound basis for

18 the same crop.

19 (c) TERM OF LOAN.—In the case of each loan com20 modity (other than upland cotton or extra long staple cot21 ton), a marketing assistance loan under subsection (a)

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

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

24 made. A marketing assistance loan for upland cotton or

25 extra long staple cotton shall have a term of 10 months
27

•S 1541 PCS

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

2 month in which the loan is made. The Secretary may not

3 extend the term of a marketing assistance loan for any

4 loan commodity.

5 (d) REPAYMENT.—

6 (1) REPAYMENT RATES FOR WHEAT AND FEED

7 GRAINS.—The Secretary shall permit a producer to

8 repay a marketing assistance loan under subsection

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

10 at a level that the Secretary determines will—

11 (A) minimize potential loan forfeitures;

12 (B) minimize the accumulation of stocks of

13 the commodities by the Federal Government;

14 (C) minimize the cost incurred by the Fed15 eral Government in storing the commodities;

16 and

17 (D) allow the commodities produced in the

18 United States to be marketed freely and com19 petitively, both domestically and internationally.

20 (2) REPAYMENT RATES FOR UPLAND COTTON,

21 OILSEEDS AND RICE.—The Secretary shall permit

22 producers to repay a marketing assistance loan

23 under subsection (a) for upland cotton, oilseeds and

24 rice at a level that is the lesser of—
28

•S 1541 PCS

1 (A) the loan rate established for upland

2 cotton, oilseeds and rice, respectively, under

3 subsection (b); or

4 (B) the prevailing world market price for

5 upland cotton, oilseeds and rice, respectively

6 (adjusted to United States quality and loca7 tion), as determined by the Secretary.

8 (3) REPAYMENT RATES FOR EXTRA LONG STA9 PLE COTTON.—Repayment of a marketing assistance

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

11 rate established for the commodity under subsection

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

13 (4) PREVAILING WORLD MARKET PRICE.—For

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

15 Secretary shall prescribe by regulation—

16 (A) a formula to determine the prevailing

17 world market price for each loan commodity,

18 adjusted to United States quality and location;

19 and

20 (B) a mechanism by which the Secretary

21 shall announce periodically the prevailing world

22 market price for each loan commodity.

23 (5) ADJUSTMENT OF PREVAILING WORLD MAR24 KET PRICE FOR UPLAND COTTON.—
29

•S 1541 PCS

1 (A) IN GENERAL.—During the period end2 ing July 31, 2003, the prevailing world market

3 price for upland cotton (adjusted to United

4 States quality and location) established under

5 paragraph (4) shall be further adjusted if—

6 (i) the adjusted prevailing world mar7 ket price is less than 115 percent of the

8 loan rate for upland cotton established

9 under subsection (b), as determined by the

10 Secretary; and

11 (ii) the Friday through Thursday av12 erage price quotation for the lowest-priced

13 United States growth as quoted for Middling (M) 13 14 ⁄32-inch cotton delivered C.I.F.

15 Northern Europe is greater than the Fri16 day through Thursday average price of the

17 5 lowest-priced growths of upland cotton,

as quoted for Middling (M) 13 18 ⁄32-inch cot19 ton, delivered C.I.F. Northern Europe (re20 ferred to in this subsection as the ‘‘North21 ern Europe price’’).

22 (B) FURTHER ADJUSTMENT.—Except as

23 provided in subparagraph (C), the adjusted pre24 vailing world market price for upland cotton
30

•S 1541 PCS

1 shall be further adjusted on the basis of some

2 or all of the following data, as available:

3 (i) The United States share of world

4 exports.

5 (ii) The current level of cotton export

6 sales and cotton export shipments.

7 (iii) Other data determined by the

8 Secretary to be relevant in establishing an

9 accurate prevailing world market price for

10 upland cotton (adjusted to United States

11 quality and location).

12 (C) LIMITATION ON FURTHER ADJUST13 MENT.—The adjustment under subparagraph

14 (B) may not exceed the difference between—

15 (i) the Friday through Thursday aver16 age price for the lowest-priced United

17 States growth as quoted for Middling

13 18 ⁄32-inch cotton delivered C.I.F. Northern

19 Europe; and

20 (ii) the Northern Europe price.

21 (e) LOAN DEFICIENCY PAYMENTS.—

22 (1) AVAILABILITY.—Except as provided in

23 paragraph (4), the Secretary may make loan defi24 ciency payments available to producers who, al25 though eligible to obtain a marketing assistance loan
31

•S 1541 PCS

1 under subsection (a) with respect to a loan commod2 ity, agree to forgo obtaining the loan for the com3 modity in return for payments under this subsection.

4 (2) COMPUTATION.—A loan deficiency payment

5 under this subsection shall be computed by multiply6 ing—

7 (A) the loan payment rate determined

8 under paragraph (3) for the loan commodity; by

9 (B) the quantity of the loan commodity

10 that the producers on a farm are eligible to

11 place under loan but for which the producers

12 forgo obtaining the loan in return for payments

13 under this subsection.

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

15 this subsection, the loan payment rate shall be the

16 amount by which—

17 (A) the loan rate established under sub18 section (b) for the loan commodity; exceeds

19 (B) the rate at which a loan for the com20 modity may be repaid under subsection (d).

21 (4) EXCEPTION FOR EXTRA LONG STAPLE COT22 TON.—This subsection shall not apply with respect

23 to extra long staple cotton.

24 (f) SPECIAL MARKETING LOAN PROVISIONS FOR UP25 LAND COTTON.—
32

•S 1541 PCS

1 (1) COTTON USER MARKETING CERTIFI2 CATES.—

3 (A) ISSUANCE.—Subject to subparagraph

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

5 the Secretary shall issue marketing certificates

6 or cash payments to domestic users and export7 ers for documented purchases by domestic users

8 and sales for export by exporters made in the

9 week following a consecutive 4-week period in

10 which—

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

13 United States growth, as quoted for Middling (M) 13 14 ⁄32-inch cotton, delivered

15 C.I.F. Northern Europe exceeds the

16 Northern Europe price by more than 1.25

17 cents per pound; and

18 (ii) the prevailing world market price

19 for upland cotton (adjusted to United

20 States quality and location) does not ex21 ceed 130 percent of the loan rate for up22 land cotton established under subsection

23 (b).

24 (B) VALUE OF CERTIFICATES OR PAY25 MENTS.—The value of the marketing certifi-
33

•S 1541 PCS

1 cates or cash payments shall be based on the

2 amount of the difference (reduced by 1.25 cents

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

4 the consecutive 4-week period multiplied by the

5 quantity of upland cotton included in the docu6 mented sales.

7 (C) ADMINISTRATION OF MARKETING CER8 TIFICATES.—

9 (i) REDEMPTION, MARKETING, OR EX10 CHANGE.—The Secretary shall establish

11 procedures for redeeming marketing cer12 tificates for cash or marketing or exchange

13 of the certificates for agricultural commod14 ities owned by the Commodity Credit Cor15 poration in such manner, and at such price

16 levels, as the Secretary determines will best

17 effectuate the purposes of cotton user mar18 keting certificates. Any price restrictions

19 that would otherwise apply to the disposi20 tion of agricultural commodities by the

21 Commodity Credit Corporation shall not

22 apply to the redemption of certificates

23 under this paragraph.

24 (ii) DESIGNATION OF COMMODITIES

25 AND PRODUCTS.—To the extent prac-
34

•S 1541 PCS

1 ticable, the Secretary shall permit owners

2 of certificates to designate the commodities

3 and products, including storage sites, the

4 owners would prefer to receive in exchange

5 for certificates. If any certificate is not

6 presented for redemption, marketing, or

7 exchange within a reasonable number of

8 days after the issuance of the certificate

9 (as determined by the Secretary), reason10 able costs of storage and other carrying

11 charges, as determined by the Secretary,

12 shall be deducted from the value of the

13 certificate for the period beginning after

14 the reasonable number of days and ending

15 with the date of the presentation of the

16 certificate to the Commodity Credit Cor17 poration.

18 (iii) TRANSFERS.—Marketing certifi19 cates issued to domestic users and export20 ers of upland cotton may be transferred to

21 other persons in accordance with regula22 tions issued by the Secretary.

23 (D) EXCEPTION.—The Secretary shall not

24 issue marketing certificates or cash payments

25 under subparagraph (A) if, for the immediately
35

•S 1541 PCS

1 preceding consecutive 10-week period, the Fri2 day through Thursday average price quotation

3 for the lowest priced United States growth, as

quoted for Middling (M) 13 4 ⁄32-inch cotton, deliv5 ered C.I.F. Northern Europe, adjusted for the

6 value of any certificate issued under this para7 graph, exceeds the Northern Europe price by

8 more than 1.25 cents per pound.

9 (E) LIMITATION ON EXPENDITURES.—

10 Total expenditures under this paragraph shall

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

12 1996 through 2002.

13 (2) SPECIAL IMPORT QUOTA.—

14 (A) ESTABLISHMENT.—The President

15 shall carry out an import quota program that

16 provides that, during the period ending July 31,

17 2003, whenever the Secretary determines and

18 announces that for any consecutive 10-week pe19 riod, the Friday through Thursday average

20 price quotation for the lowest-priced United

21 States growth, as quoted for Middling (M)

13 22 ⁄32-inch cotton, delivered C.I.F. Northern Eu23 rope, adjusted for the value of any certificates

24 issued under paragraph (1), exceeds the North25 ern Europe price by more than 1.25 cents per
36

•S 1541 PCS

1 pound, there shall immediately be in effect a

2 special import quota.

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

4 to 1 week’s consumption of upland cotton by

5 domestic mills at the seasonally adjusted aver6 age rate of the most recent 3 months for which

7 data are available.

8 (C) APPLICATION.—The quota shall apply

9 to upland cotton purchased not later than 90

10 days after the date of the Secretary’s announce11 ment under subparagraph (A) and entered into

12 the United States not later than 180 days after

13 the date.

14 (D) OVERLAP.—A special quota period

15 may be established that overlaps any existing

16 quota period if required by subparagraph (A),

17 except that a special quota period may not be

18 established under this paragraph if a quota pe19 riod has been established under subsection (g).

20 (E) PREFERENTIAL TARIFF TREAT21 MENT.—The quantity under a special import

22 quota shall be considered to be an in-quota

23 quantity for purposes of—
37

•S 1541 PCS

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

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

3 2703(d));

4 (ii) section 204 of the Andean Trade

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

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

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

8 (iv) General Note 3(a)(iv) to the Har9 monized Tariff Schedule.

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

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

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

13 tariff rate of a tariff-rate quota.

14 (g) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND

15 COTTON.—

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

17 out an import quota program that provides that

18 whenever the Secretary determines and announces

19 that the average price of the base quality of upland

20 cotton, as determined by the Secretary, in the des21 ignated spot markets for a month exceeded 130 per22 cent of the average price of such quality of cotton

23 in the markets for the preceding 36 months, not24 withstanding any other provision of law, there shall
38

•S 1541 PCS

1 immediately be in effect a limited global import

2 quota subject to the following conditions:

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

4 shall be equal to 21 days of domestic mill con5 sumption of upland cotton at the seasonally ad6 justed average rate of the most recent 3 months

7 for which data are available.

8 (B) QUANTITY IF PRIOR QUOTA.—If a

9 quota has been established under this sub10 section during the preceding 12 months, the

11 quantity of the quota next established under

12 this subsection shall be the smaller of 21 days

13 of domestic mill consumption calculated under

14 subparagraph (A) or the quantity required to

15 increase the supply to 130 percent of the de16 mand.

17 (C) PREFERENTIAL TARIFF TREAT18 MENT.—The quantity under a limited global

19 import quota shall be considered to be an in20 quota quantity for purposes of—

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

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

23 2703(d));

24 (ii) section 204 of the Andean Trade

25 Preference Act (19 U.S.C. 3203);
39

•S 1541 PCS

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

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

3 (iv) General Note 3(a)(iv) to the Har4 monized Tariff Schedule.

5 (D) DEFINITIONS.—In this subsection:

6 (i) SUPPLY.—The term ‘‘supply’’

7 means, using the latest official data of the

8 Bureau of the Census, the Department of

9 Agriculture, and the Department of the

10 Treasury—

11 (I) the carry-over of upland cot12 ton at the beginning of the marketing

13 year (adjusted to 480-pound bales) in

14 which the quota is established;

15 (II) production of the current

16 crop; and

17 (III) imports to the latest date

18 available during the marketing year.

19 (ii) DEMAND.—The term ‘‘demand’’

20 means—

21 (I) the average seasonally ad22 justed annual rate of domestic mill

23 consumption in the most recent 3

24 months for which data are available;

25 and
40

•S 1541 PCS

1 (II) the larger of—

2 (aa) average exports of up3 land cotton during the preceding

4 6 marketing years; or

5 (bb) cumulative exports of

6 upland cotton plus outstanding

7 export sales for the marketing

8 year in which the quota is estab9 lished.

10 (iii) LIMITED GLOBAL IMPORT

11 QUOTA.—The term ‘‘limited global import

12 quota’’ means a quantity of imports that is

13 not subject to the over-quota tariff rate of

14 a tariff-rate quota.

15 (E) QUOTA ENTRY PERIOD.—When a

16 quota is established under this subsection, cot17 ton may be entered under the quota during the

18 90-day period beginning on the date the quota

19 is established by the Secretary.

20 (2) NO OVERLAP.—Notwithstanding paragraph

21 (1), a quota period may not be established that over22 laps an existing quota period or a special quota pe23 riod established under subsection (f)(2).

24 (h) SOURCE OF LOANS.—
41

•S 1541 PCS

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

2 the loans authorized by this section and the Agricul3 tural Adjustment Act of 1938 (7 U.S.C. 1281 et

4 seq.) through the Commodity Credit Corporation

5 and other means available to the Secretary.

6 (2) PROCESSORS.—Whenever any loan or sur7 plus removal operation for any agricultural commod8 ity is carried out through purchases from or loans

9 or payments to processors, the Secretary shall, to

10 the extent practicable, obtain from the processors

11 such assurances as the Secretary considers adequate

12 that the producers of the commodity have received

13 or will receive maximum benefits from the loan or

14 surplus removal operation.

15 (i) ADJUSTMENTS OF LOANS.—

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

17 appropriate adjustments in the loan levels for any

18 commodity for differences in grade, type, quality, lo19 cation, and other factors.

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

21 the maximum extent practicable, be made in such

22 manner that the average loan level for the commod23 ity will, on the basis of the anticipated incidence of

24 the factors, be equal to the level of support deter-
42

•S 1541 PCS

1 mined as provided in this section or the Agricultural

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

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

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

7 any deficiency arising from the sale of the collateral

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

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

11 through a fraudulent representation by the producer.

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

13 prevent the Commodity Credit Corporation or the

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

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

17 quantity of a commodity stored on a farm or

18 delivered by the producer;

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

21 (C) a failure or refusal to deliver a com22 modity in accordance with a program estab23 lished under this section or the Agricultural Ad24 justment Act of 1938.
43

•S 1541 PCS

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

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

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

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

13 agreement by the processor of sugarcane or sugar

14 beets shall be superior to all statutory and common

15 law liens on raw cane sugar and refined beet sugar

16 in favor of the producers of sugarcane and sugar

17 beets and all prior recorded and unrecorded liens on

18 the crops of sugarcane and sugar beets from which

19 the sugar was derived.

20 (k) COMMODITY CREDIT CORPORATION SALES PRICE

21 RESTRICTIONS.—

22 (1) IN GENERAL.—The Commodity Credit Cor23 poration may sell any commodity owned or con24 trolled by the Corporation at any price that the Sec-
44

•S 1541 PCS

1 retary determines will maximize returns to the Cor2 poration.

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

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

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

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

9 not substantially impair any loan program;

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

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

14 (E) a sale for the purpose of establishing

15 a claim arising out of a contract or against a

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

18 commodity;

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

20 Corporation; and

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

22 (3) PRESIDENTIAL DISASTER AREAS.—

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

25 Secretary may consider in the public interest,
45

•S 1541 PCS

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

3 Corporation for use in relieving distress—

4 (i) in any area in the United States

5 (including the Virgin Islands) declared by

6 the President to be an acute distress area

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

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

11 and

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

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

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

18 (B) COSTS.—Except on a reimbursable

19 basis, the Corporation shall not bear any costs

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

22 the commodity to the Corporation incurred in—

23 (i) the storage of the commodity; and

24 (ii) the handling and transportation

25 costs in making delivery of the commodity
46

•S 1541 PCS

1 to designated agencies at 1 or more central

2 locations in each State or other area.

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

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

6 effective and efficient conduct of the operations of

7 the Corporation because of the small quantity of the

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

9 or questionable continued storability of the commod10 ity.

11 SEC. 15. PAYMENT LIMITATIONS.

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

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

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

17 amount of contract payments made under section 13

18 of the Agricultural Market Transition Act to a per19 son under 1 or more production flexibility contracts

20 during any fiscal year may not exceed $40,000.

21 ‘‘(2) LIMITATION ON MARKETING LOAN GAINS

22 AND LOAN DEFICIENCY PAYMENTS.—

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

24 payments specified in subparagraph (B) that a

25 person shall be entitled to receive under section
47

•S 1541 PCS

1 14 of the Agricultural Market Transition Act

2 for contract commodities and oilseeds during

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

4 ‘‘(B) DESCRIPTION OF PAYMENTS.—The

5 payments referred to in subparagraph (A) are

6 the following:

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

8 from repaying a marketing assistance loan

9 for a crop of any loan commodity at a

10 lower level than the original loan rate es11 tablished for the commodity under section

12 14(b) of the Act.

13 ‘‘(ii) Any loan deficiency payment re14 ceived for a loan commodity under section

15 14(e) of the Act.’’.

16 (b) CONFORMING AMENDMENTS.—

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

18 1985 (7 U.S.C. 1308) (as amended by subsection

19 (a)) is amended—

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

21 and (7) as paragraphs (3), (4), and (5), respec22 tively; and

23 (B) in the second sentence of paragraph

24 (3)(A) (as so redesignated), by striking ‘‘para-
48

•S 1541 PCS

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

2 (4) and (5)’’.

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

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

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

8 through (5) of section 1001,’’.

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

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

11 (A) in the first sentence of subsection

12 (a)(1)—

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

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

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

17 seq.)’’; and

18 (iii) by striking ‘‘section

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

20 1001(3)(B)(i)(II)’’; and

21 (B) in subsection (b)—

22 (i) in paragraph (1)—

23 (I) by striking ‘‘under the Agri24 cultural Act of 1949’’; and
49

•S 1541 PCS

1 (II) by striking ‘‘section

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

3 1001(3)(B)(i)’’; and

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

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

6 ‘‘section 1001(3)(B)(i)(II)’’.

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

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

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

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

11 (B) by striking ‘‘price support program

12 loans, payments, or benefits made available

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

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

16 Market Transition Act’’; and

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

18 1997 crop years’’.

19 SEC. 16. PEANUT PROGRAM.

20 (a) QUOTA PEANUTS.—

21 (1) AVAILABILITY OF LOANS.—The Secretary

22 shall make nonrecourse loans available to producers

23 of quota peanuts.

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

25 loan rate for quota peanuts shall be $610 per ton.
50

•S 1541 PCS

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

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

4 storage.

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

7 quota peanuts for location of peanuts and such other

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

10 (b) ADDITIONAL PEANUTS.—

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

12 nonrecourse loans available to producers of addi13 tional peanuts at such rates as the Secretary finds

14 appropriate, taking into consideration the demand

15 for peanut oil and peanut meal, expected prices of

16 other vegetable oils and protein meals, and the de17 mand for peanuts in foreign markets.

18 (2) ANNOUNCEMENT.—The Secretary shall an19 nounce the loan rate for additional peanuts of each

20 crop not later than February 15 preceding the mar21 keting year for the crop for which the loan rate is

22 being determined.

23 (c) AREA MARKETING ASSOCIATIONS.—

24 (1) WAREHOUSE STORAGE LOANS.—
51

•S 1541 PCS

1 (A) IN GENERAL.—In carrying out sub2 sections (a) and (b), the Secretary shall make

3 warehouse storage loans available in each of the

4 producing areas (described in section 1446.95

5 of title 7 of the Code of Federal Regulations

6 (January 1, 1989)) to a designated area mar7 keting association of peanut producers that is

8 selected and approved by the Secretary and

9 that is operated primarily for the purpose of

10 conducting the loan activities. The Secretary

11 may not make warehouse storage loans avail12 able to any cooperative that is engaged in oper13 ations or activities concerning peanuts other

14 than those operations and activities specified in

15 this section and section 358e of the Agricultural

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

17 (B) ADMINISTRATIVE AND SUPERVISORY

18 ACTIVITIES.—An area marketing association

19 shall be used in administrative and supervisory

20 activities relating to loans and marketing activi21 ties under this section and section 358e of the

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

23 1359a).

24 (C) ASSOCIATION COSTS.—Loans made to

25 the association under this paragraph shall in-
52

•S 1541 PCS

1 clude such costs as the area marketing associa2 tion reasonably may incur in carrying out the

3 responsibilities, operations, and activities of the

4 association under this section and section 358e

5 of the Agricultural Adjustment Act of 1938 (7

6 U.S.C. 1359a).

7 (2) POOLS FOR QUOTA AND ADDITIONAL PEA8 NUTS.—

9 (A) IN GENERAL.—The Secretary shall re10 quire that each area marketing association es11 tablish pools and maintain complete and accu12 rate records by area and segregation for quota

13 peanuts handled under loan and for additional

14 peanuts placed under loan, except that separate

15 pools shall be established for Valencia peanuts

16 produced in New Mexico. Bright hull and dark

17 hull Valencia peanuts shall be considered as

18 separate types for the purpose of establishing

19 the pools.

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

21 each pool, unless otherwise approved by the

22 Secretary, shall be distributed only to producers

23 who placed peanuts in the pool and shall be dis24 tributed in proportion to the value of the pea25 nuts placed in the pool by each producer. Net
53

•S 1541 PCS

1 gains for peanuts in each pool shall consist of

2 the following:

3 (i) QUOTA PEANUTS.—For quota pea4 nuts, the net gains over and above the loan

5 indebtedness and other costs or losses in6 curred on peanuts placed in the pool.

7 (ii) ADDITIONAL PEANUTS.—For ad8 ditional peanuts, the net gains over and

9 above the loan indebtedness and other

10 costs or losses incurred on peanuts placed

11 in the pool for additional peanuts.

12 (d) LOSSES.—Losses in quota area pools shall be cov13 ered using the following sources in the following order of

14 priority:

15 (1) TRANSFERS FROM ADDITIONAL LOAN

16 POOLS.—The proceeds due any producer from any

17 pool shall be reduced by the amount of any loss that

18 is incurred with respect to peanuts transferred from

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

20 producer under section 358–1(b)(8) of the Agricul21 tural Adjustment Act of 1938 (7 U.S.C. 1358–

22 1(b)(8)).

23 (2) OTHER PRODUCERS IN SAME POOL.—Fur24 ther losses in an area quota pool shall be offset by

25 reducing the gain of any producer in the pool by the
54

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1 amount of pool gains attributed to the same pro2 ducer from the sale of additional peanuts for domes3 tic and export edible use.

4 (3) USE OF MARKETING ASSESSMENTS.—The

5 Secretary shall use funds collected under subsection

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

7 further losses in area quota pools. The Secretary

8 shall transfer to the Treasury those funds collected

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

10 subsection that the Secretary determines are not re11 quired to cover losses in area quota pools.

12 (4) CROSS COMPLIANCE.—Further losses in

13 area quota pools, other than losses incurred as a re14 sult of transfers from additional loan pools to quota

15 loan pools under section 358–1(b)(8) of the Agricul16 tural Adjustment Act of 1938 (7 U.S.C. 1358–

17 1(b)(8)), shall be offset by any gains or profits from

18 quota pools in other production areas (other than

19 separate type pools established under subsection

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

21 Mexico) in such manner as the Secretary shall by

22 regulation prescribe.

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

24 authorities provided in the preceding paragraphs is

25 not sufficient to cover losses in an area quota pool,
55

•S 1541 PCS

1 the Secretary shall increase the marketing assess2 ment established under subsection (g) by such an

3 amount as the Secretary considers necessary to

4 cover the losses. The increased assessment shall

5 apply only to quota peanuts in the production area

6 covered by the pool. Amounts collected under sub7 section (g) as a result of the increased assessment

8 shall be retained by the Secretary to cover losses in

9 that pool.

10 (e) DISAPPROVAL OF QUOTAS.—Notwithstanding

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

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

13 with respect to which poundage quotas have been dis14 approved by producers, as provided for in section 358–

15 1(d) of the Agricultural Adjustment Act of 1938 (7 U.S.C.

16 1358–1(d)).

17 (f) QUALITY IMPROVEMENT.—

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

19 under loan, the Secretary shall—

20 (A) promote the crushing of peanuts at a

21 greater risk of deterioration before peanuts of a

22 lesser risk of deterioration;

23 (B) ensure that all Commodity Credit Cor24 poration inventories of peanuts sold for domes25 tic edible use must be shown to have been offi-
56

•S 1541 PCS

1 cially inspected by licensed Department inspec2 tors both as farmer stock and shelled or cleaned

3 in-shell peanuts;

4 (C) continue to endeavor to operate the

5 peanut program so as to improve the quality of

6 domestic peanuts and ensure the coordination

7 of activities under the Peanut Administrative

8 Committee established under Marketing Agree9 ment No. 146, regulating the quality of domes10 tically produced peanuts (under the Agricul11 tural Adjustment Act (7 U.S.C. 601 et seq.),

12 reenacted with amendments by the Agricultural

13 Marketing Agreement Act of 1937); and

14 (D) ensure that any changes made in the

15 peanut program as a result of this subsection

16 requiring additional production or handling at

17 the farm level shall be reflected as an upward

18 adjustment in the Department loan schedule.

19 (2) EXPORTS AND OTHER PEANUTS.—The Sec20 retary shall require that all peanuts in the domestic

21 and export markets fully comply with all quality

22 standards under Marketing Agreement No. 146.

23 (g) MARKETING ASSESSMENT.—

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

25 for a nonrefundable marketing assessment. The as-
57

•S 1541 PCS

1 sessment shall be made on a per pound basis in an

2 amount equal to 1.1 percent for each of the 1994

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

4 1.2 percent for each of the 1997 through 2002

5 crops, of the national average quota or additional

6 peanut loan rate for the applicable crop.

7 (2) FIRST PURCHASERS.—

8 (A) IN GENERAL.—Except as provided

9 under paragraphs (3) and (4), the first pur10 chaser of peanuts shall—

11 (i) collect from the producer a mar12 keting assessment equal to the quantity of

13 peanuts acquired multiplied by—

14 (I) in the case of each of the

15 1994 and 1995 crops, .55 percent of

16 the applicable national average loan

17 rate;

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

19 .6 percent of the applicable national

20 average loan rate; and

21 (III) in the case of each of the

22 1997 through 2002 crops, .65 percent

23 of the applicable national average loan

24 rate;
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1 (ii) pay, in addition to the amount col2 lected under clause (i), a marketing assess3 ment in an amount equal to the quantity

4 of peanuts acquired multiplied by .55 per5 cent of the applicable national average loan

6 rate; and

7 (iii) remit the amounts required under

8 clauses (i) and (ii) to the Commodity Cred9 it Corporation in a manner specified by the

10 Secretary.

11 (B) DEFINITION OF FIRST PURCHASER.—

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

13 means a person acquiring peanuts from a pro14 ducer except that in the case of peanuts for15 feited by a producer to the Commodity Credit

16 Corporation, the term means the person acquir17 ing the peanuts from the Commodity Credit

18 Corporation.

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

20 of a private marketing by a producer directly to a

21 consumer through a retail or wholesale outlet or in

22 the case of a marketing by the producer outside of

23 the continental United States, the producer shall be

24 responsible for the full amount of the assessment
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•S 1541 PCS

1 and shall remit the assessment by such time as is

2 specified by the Secretary.

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

4 that are pledged as collateral for a loan made under

this section, 1 5 ⁄2 of the assessment shall be deducted

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

7 assessment shall be paid by the first purchaser of

8 the peanuts. For purposes of computing net gains on

9 peanuts under this section, the reduction in loan

10 proceeds shall be treated as having been paid to the

11 producer.

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

13 or remit the reduction required by this subsection or

14 fails to comply with the requirements for record15 keeping or otherwise as are required by the Sec16 retary to carry out this subsection, the person shall

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

18 an amount determined by multiplying—

19 (A) the quantity of peanuts involved in the

20 violation; by

21 (B) the national average quota peanut rate

22 for the applicable crop year.

23 (6) ENFORCEMENT.—The Secretary may en24 force this subsection in the courts of the United

25 States.
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1 (h) CROPS.—Subsections (a) through (f) shall be ef2 fective only for the 1996 through 2002 crops of peanuts.

3 (i) MARKETING QUOTAS.—

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

5 III of the Agricultural Adjustment Act of 1938 is

6 amended—

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

8 (i) in the section heading, by striking

9 ‘‘1991 THROUGH 1997 CROPS OF’’;

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

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

12 striking ‘‘of the 1991 through 1997 mar13 keting years’’ each place it appears and in14 serting ‘‘marketing year’’;

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

16 ‘‘1990’’ and inserting ‘‘1990, for the 1991

17 through 1995 marketing years, and 1995,

18 for the 1996 through 2002 marketing

19 years’’;

20 (iv) in subsection (b)(1)(A)—

21 (I) by striking ‘‘each of the 1991

22 through 1997 marketing years’’ and

23 inserting ‘‘each marketing year’’; and

24 (II) in clause (i), by inserting be25 fore the semicolon the following: ‘‘, in
61

•S 1541 PCS

1 the case of the 1991 through 1995

2 marketing years, and the 1995 mar3 keting year, in the case of the 1996

4 through 2002 marketing years’’; and

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

6 ‘‘1997’’ and inserting ‘‘2002’’;

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

8 (i) in the section heading, by striking

9 ‘‘1991 THROUGH 1995 CROPS OF’’; and

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

11 ‘‘1995’’ and inserting ‘‘2002’’;

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

13 1358c(d)), by striking ‘‘1995’’ and inserting

14 ‘‘2002’’; and

15 (D) in section 358e (7 U.S.C. 1359a)—

16 (i) in the section heading, by striking

17 ‘‘FOR 1991 THROUGH 1997 CROPS OF

18 PEANUTS’’; and

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

20 ‘‘1997’’ and inserting ‘‘2002’’.

21 (2) ELIMINATION OF QUOTA FLOOR.—Section

22 358–1(a)(1) of the Act (7 U.S.C. 1358–1(a)(1)) is

23 amended by striking the second sentence.

24 (3) TEMPORARY QUOTA ALLOCATION.—Section

25 358–1 of the Act (7 U.S.C. 1358–1) is amended—
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•S 1541 PCS

1 (A) in subsection (a)(1), by striking ‘‘do2 mestic edible, seed,’’ and inserting ‘‘domestic

3 edible use’’;

4 (B) in subsection (b)(2)—

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

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

7 (ii) by striking subparagraph (B) and

8 inserting the following:

9 ‘‘(B) TEMPORARY QUOTA ALLOCATION.—

10 ‘‘(i) ALLOCATION RELATED TO SEED

11 PEANUTS.—Temporary allocation of quota

12 pounds for the marketing year only in

13 which the crop is planted shall be made to

14 producers for each of the 1996 through

15 2002 marketing years as provided in this

16 subparagraph.

17 ‘‘(ii) QUANTITY.—The temporary

18 quota allocation shall be equal to the

19 pounds of seed peanuts planted on the

20 farm, as may be adjusted under regula21 tions prescribed by the Secretary.

22 ‘‘(iii) ADDITIONAL QUOTA.—The tem23 porary allocation of quota pounds under

24 this paragraph shall be in addition to the

25 farm poundage quota otherwise established
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1 under this subsection and shall be credited,

2 for the applicable marketing year only, in

3 total to the producer of the peanuts on the

4 farm in a manner prescribed by the Sec5 retary.

6 ‘‘(iv) EFFECT OF OTHER REQUIRE7 MENTS.—Nothing in this section alters or

8 changes the requirements regarding the

9 use of quota and additional peanuts estab10 lished by section 358e(b).’’; and

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

12 and use on a farm’’.

13 (4) UNDERMARKETINGS.—Part VI of subtitle B

14 of title III of the Act is amended—

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

16 1(b))—

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

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

19 inserting ‘‘including any increases resulting

20 from the allocation of quotas voluntarily

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

22 (ii) in paragraph (3)(B), by striking

23 ‘‘include—’’ and clauses (i) and (ii) and in24 serting ‘‘include any increase resulting

25 from the allocation of quotas voluntarily
64

•S 1541 PCS

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

2 and

3 (iii) by striking paragraphs (8) and

4 (9); and

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

6 1358b(a))—

7 (i) in paragraph (1), by striking ‘‘(in8 cluding any applicable under marketings)’’

9 both places it appears;

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

11 ‘‘of undermarketings and’’;

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

13 ‘‘(including any applicable under market14 ings)’’; and

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

16 ‘‘(including any applicable

17 undermarketings)’’.

18 (5) DISASTER TRANSFERS.—Section 358–1(b)

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

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

21 at the end the following:

22 ‘‘(8) DISASTER TRANSFERS.—

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

24 subparagraph (B), additional peanuts produced

25 on a farm from which the quota poundage was
65

•S 1541 PCS

1 not harvested and marketed because of drought,

2 flood, or any other natural disaster, or any

3 other condition beyond the control of the pro4 ducer, may be transferred to the quota loan

5 pool for pricing purposes on such basis as the

6 Secretary shall by regulation provide.

7 ‘‘(B) LIMITATION.—The poundage of pea8 nuts transferred under subparagraph (A) shall

9 not exceed the difference between—

10 ‘‘(i) the total quantity of peanuts

11 meeting quality requirements for domestic

12 edible use, as determined by the Secretary,

13 marketed from the farm; and

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

15 excluding quota pounds transferred to the

16 farm in the fall.

17 ‘‘(C) SUPPORT RATE.—Peanuts trans18 ferred under this paragraph shall be supported

19 at not more than 70 percent of the quota sup20 port rate for the marketing years in which the

21 transfers occur. The transfers for a farm shall

22 not exceed 25 percent of the total farm quota

23 pounds, excluding pounds transferred in the

24 fall.’’.
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1 SEC. 17. SUGAR PROGRAM.

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

3 available to processors of domestically grown sugarcane at

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

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

6 available to processors of domestically grown sugar beets

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

8 sugar.

9 (c) TERM OF LOANS.—

10 (1) IN GENERAL.—Loans under this section

11 during any fiscal year shall be made available not

12 earlier than the beginning of the fiscal year and

13 shall mature at the earlier of—

14 (A) the end of 9 months; or

15 (B) the end of the fiscal year.

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

17 loans made under this section in the last 3 months

18 of a fiscal year, the processor may repledge the

19 sugar as collateral for a second loan in the subse20 quent fiscal year, except that the second loan shall—

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

22 the time the second loan is made; and

23 (B) mature in 9 months less the quantity

24 of time that the first loan was in effect.

25 (d) LOAN TYPE; PROCESSOR ASSURANCES.—
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•S 1541 PCS

1 (1) RECOURSE LOANS.—Subject to paragraph

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

3 through the use of recourse loans.

4 (2) NONRECOURSE LOANS.—During any fiscal

5 year in which the tariff rate quota for imports of

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

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

8 tons raw value, the Secretary shall carry out this

9 section by making available nonrecourse loans. Any

10 recourse loan previously made available by the Sec11 retary under this section during the fiscal year shall

12 be changed by the Secretary into a nonrecourse loan.

13 (3) PROCESSOR ASSURANCES.—If the Secretary

14 is required under paragraph (2) to make

15 nonrecourse loans available during a fiscal year or to

16 change recourse loans into nonrecourse loans, the

17 Secretary shall obtain from each processor that re18 ceives a loan under this section such assurances as

19 the Secretary considers adequate to ensure that the

20 processor will provide payments to producers that

21 are proportional to the value of the loan received by

22 the processor for sugar beets and sugarcane deliv23 ered by producers served by the processor. The Sec24 retary may establish appropriate minimum payments

25 for purposes of this paragraph.
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1 (e) MARKETING ASSESSMENT.—

2 (1) SUGARCANE.—Effective for marketings of

3 raw cane sugar during the 1996 through 2003 fiscal

4 years, the first processor of sugarcane shall remit to

5 the Commodity Credit Corporation a nonrefundable

6 marketing assessment in an amount equal to—

7 (A) in the case of marketings during fiscal

8 year 1996, 1.1 percent of the loan rate estab9 lished under subsection (a) per pound of raw

10 cane sugar, processed by the processor from do11 mestically produced sugarcane or sugarcane

12 molasses, that has been marketed (including the

13 transfer or delivery of the sugar to a refinery

14 for further processing or marketing); and

15 (B) in the case of marketings during each

16 of fiscal years 1997 through 2003, 1.375 per17 cent of the loan rate established under sub18 section (a) per pound of raw cane sugar, proc19 essed by the processor from domestically pro20 duced sugarcane or sugarcane molasses, that

21 has been marketed (including the transfer or

22 delivery of the sugar to a refinery for further

23 processing or marketing).

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

25 beet sugar during the 1996 through 2003 fiscal
69

•S 1541 PCS

1 years, the first processor of sugar beets shall remit

2 to the Commodity Credit Corporation a nonrefund3 able marketing assessment in an amount equal to—

4 (A) in the case of marketings during fiscal

5 year 1996, 1.1794 percent of the loan rate es6 tablished under subsection (a) per pound of

7 beet sugar, processed by the processor from do8 mestically produced sugar beets or sugar beet

9 molasses, that has been marketed; and

10 (B) in the case of marketings during each

11 of fiscal years 1997 through 2003, 1.47425

12 percent of the loan rate established under sub13 section (a) per pound of beet sugar, processed

14 by the processor from domestically produced

15 sugar beets or sugar beet molasses, that has

16 been marketed.

17 (3) COLLECTION.—

18 (A) TIMING.—A marketing assessment re19 quired under this subsection shall be collected

20 on a monthly basis and shall be remitted to the

21 Commodity Credit Corporation not later than

22 30 days after the end of each month. Any cane

23 sugar or beet sugar processed during a fiscal

24 year that has not been marketed by September

25 30 of the year shall be subject to assessment on
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•S 1541 PCS

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

2 second assessment at the time that it is mar3 keted.

4 (B) MANNER.—Subject to subparagraph

5 (A), marketing assessments shall be collected

6 under this subsection in the manner prescribed

7 by the Secretary and shall be nonrefundable.

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

9 the assessment required by this subsection or fails to

10 comply with such requirements for recordkeeping or

11 otherwise as are required by the Secretary to carry

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

13 Secretary for a civil penalty up to an amount deter14 mined by multiplying—

15 (A) the quantity of cane sugar or beet

16 sugar involved in the violation; by

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

18 sugarcane or sugar beets.

19 (5) ENFORCEMENT.—The Secretary may en20 force this subsection in a court of the United States.

21 (f) FORFEITURE PENALTY.—

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

23 on the forfeiture of any sugar pledged as collateral

24 for a nonrecourse loan under this section.
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•S 1541 PCS

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

2 shall be 1 cent per pound.

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

4 shall bear the same relation to the penalty for cane

5 sugar as the marketing assessment for sugar beets

6 bears to the marketing assessment for sugarcane.

7 (4) EFFECT OF FORFEITURE.—Any payments

8 owed producers by a processor that forfeits of any

9 sugar pledged as collateral for a nonrecourse loan

10 shall be reduced in proportion to the loan forfeiture

11 penalty incurred by the processor.

12 (g) INFORMATION REPORTING.—

13 (1) DUTY OF PROCESSORS AND REFINERS TO

14 REPORT.—A sugarcane processor, cane sugar re15 finer, and sugar beet processor shall furnish the Sec16 retary, on a monthly basis, such information as the

17 Secretary may require to administer sugar pro18 grams, including the quantity of purchases of sugar19 cane, sugar beets, and sugar, and production, impor20 tation, distribution, and stock levels of sugar.

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

22 refusing to furnish the information, or furnishing

23 willfully any false information, shall be subject to a

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

25 violation.
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•S 1541 PCS

1 (3) MONTHLY REPORTS.—Taking into consider2 ation the information received under paragraph (1),

3 the Secretary shall publish on a monthly basis com4 posite data on production, imports, distribution, and

5 stock levels of sugar.

6 (h) MARKETING ALLOTMENTS.—Part VII of subtitle

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

8 (7 U.S.C. 1359aa et seq.) is repealed.

9 (i) CROPS.—This section (other than subsection (h))

10 shall be effective only for the 1996 through 2002 crops

11 of sugar beets and sugarcane.

12 SEC. 18. ADMINISTRATION.

13 (a) COMMODITY CREDIT CORPORATION.—

14 (1) USE OF CORPORATION.—The Secretary

15 shall carry out this subtitle through the Commodity

16 Credit Corporation.

17 (2) SALARIES AND EXPENSES.—No funds of

18 the Corporation shall be used for any salary or ex19 pense of any officer or employee of the Department

20 of Agriculture.

21 (b) DETERMINATIONS BY SECRETARY.—A deter22 mination made by the Secretary under this subtitle or the

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

24 seq.) shall be final and conclusive.
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•S 1541 PCS

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

2 regulations as the Secretary determines necessary to carry

3 out this subtitle.

4 SEC. 19. ELIMINATION OF PERMANENT PRICE SUPPORT

5 AUTHORITY.

6 (a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—

7 The Agricultural Adjustment Act of 1938 is amended—

8 (1) in title III—

9 (A) in subtitle B—

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

11 U.S.C. 1326–1351); and

12 (ii) in part VI—

13 (I) by moving subsection (c) of

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

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

16 U.S.C. 1301(b)(17)) and redesignat17 ing the subsection as paragraph (18);

18 and

19 (II) by striking sections 358,

20 358a, and 358d (7 U.S.C. 1358,

21 1358a, and 1359); and

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

23 1379a–1379j); and

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

25 (b) AGRICULTURAL ACT OF 1949.—
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•S 1541 PCS

1 (1) TRANSFER OF CERTAIN SECTIONS.—The

2 Agricultural Act of 1949 is amended—

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

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

5 appear after section 314A of the Agricultural

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

7 redesignating the transferred sections as sec8 tions 315, 315A, and 315B, respectively;

9 (B) by transferring sections 111, 201(c),

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

11 appear after section 304 of the Agricultural Ad12 justment Act of 1938 (7 U.S.C. 1304) and re13 designating the transferred sections as sections

14 305, 306, and 307, respectively; and

15 (C) by transferring sections 404 and 416

16 (7 U.S.C. 1424 and 1431) to appear after sec17 tion 390 of the Agricultural Adjustment Act of

18 1938 (7 U.S.C. 1390) and redesignating the

19 transferred sections as sections 390A and

20 390B, respectively.

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

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

23 is repealed.

24 (c) CONFORMING AMENDMENTS.—
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•S 1541 PCS

1 (1) Section 306 of the Agricultural Adjustment

2 Act of 1938 (as transferred and redesignated by

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

4 and inserting ‘‘307’’.

5 (2) Section 361 of the Agricultural Adjustment

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

7 ‘‘, corn, wheat, cotton, peanuts, and rice, estab8 lished’’.

9 SEC. 20. EFFECT OF AMENDMENTS.

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

11 specifically provided and notwithstanding any other provi12 sion of law, this subtitle and the amendments made by

13 this subtitle shall not affect the authority of the Secretary

14 to carry out a price support or production adjustment pro15 gram for any of the 1991 through 1995 crops of an agri16 cultural commodity established under a provision of law

17 in effect immediately before the date of the enactment of

18 this Act.

19 (b) LIABILITY.—A provision of this subtitle or an

20 amendment made by this subtitle shall not affect the li21 ability of any person under any provision of law as in ef22 fect before the date of the enactment of this Act.
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•S 1541 PCS

1 Subtitle B—Conservation

2 SEC. 31. CONSERVATION.

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

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

5 to read as follows:

6 ‘‘Subtitle E—Funding

7 ‘‘SEC. 1241. FUNDING.

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

9 years 1996 through 2002, the Secretary shall use the

10 funds of the Commodity Credit Corporation to carry out

11 the programs authorized by—

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

13 (including contracts extended by the Secretary pur14 suant to section 1437 of the Food, Agriculture, Con15 servation, and Trade Act of 1990 (Public Law 101–

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

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

18 and

19 ‘‘(3) chapter 4 of subtitle D.

20 ‘‘(b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PRO21 GRAM.—For each of fiscal years 1996 through 2002,

22 $100,000,000 of the funds of the Commodity Credit Cor23 poration shall be available for providing technical assist24 ance, cost-sharing payments, and incentive payments for

25 practices relating to livestock production under the live-
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1 stock environmental assistance program under chapter 4

2 of subtitle D.’’.

3 (b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PRO4 GRAM.—To carry out the programs funded under the

5 amendment made by subsection (a), subtitle D of title XII

6 of the Food Security Act of 1985 (16 U.S.C. 3830 et seq.)

7 is amended by adding at the end the following:

8 ‘‘CHAPTER 4—LIVESTOCK

9 ENVIRONMENTAL ASSISTANCE PROGRAM

10 ‘‘SEC. 1240. DEFINITIONS.

11 ‘‘In this chapter:

12 ‘‘(1) LAND MANAGEMENT PRACTICE.—The

13 term ‘land management practice’ means a site-spe14 cific nutrient or manure management, irrigation

15 management, tillage or residue management, grazing

16 management, or other land management practice

17 that the Secretary determines is needed to protect,

18 in the most cost effective manner, water, soil, or re19 lated resources from degradation due to livestock

20 production.

21 ‘‘(2) LARGE CONFINED LIVESTOCK OPER22 ATION.—The term ‘large confined livestock oper23 ation’ means an operation that—

24 ‘‘(A) is a confined animal feeding oper25 ation; and
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1 ‘‘(B) has more than—

2 ‘‘(i) 700 mature dairy cattle;

3 ‘‘(ii) 10,000 beef cattle;

4 ‘‘(iii) 30,000 laying hens or broilers

5 (if the facility has continuous overflow wa6 tering);

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

8 (if the facility has a liquid manure sys9 tem);

10 ‘‘(v) 55,000 turkeys;

11 ‘‘(vi) 15,000 swine; or

12 ‘‘(vii) 10,000 sheep or lambs.

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

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

15 swine, sheep, lambs, and such other animals as de16 termined by the Secretary.

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

18 person who is engaged in livestock production (as

19 defined by the Secretary).

20 ‘‘(5) STRUCTURAL PRACTICE.—The term ‘struc21 tural practice’ means the establishment of an animal

22 waste management facility, terrace, grassed water23 way, contour grass strip, filterstrip, or other struc24 tural practice that the Secretary determines is need25 ed to protect, in the most cost effective manner,
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1 water, soil, or related resources from degradation

2 due to livestock production.

3 ‘‘SEC. 1240A. ESTABLISHMENT AND ADMINISTRATION OF

4 LIVESTOCK ENVIRONMENTAL ASSISTANCE

5 PROGRAM.

6 ‘‘(a) ESTABLISHMENT.—

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

8 2002 fiscal years, the Secretary shall provide tech9 nical assistance, cost-sharing payments, and incen10 tive payments to operators who enter into contracts

11 with the Secretary, through a livestock environ12 mental assistance program.

13 ‘‘(2) ELIGIBLE PRACTICES.—

14 ‘‘(A) STRUCTURAL PRACTICES.—An opera15 tor who implements a structural practice shall

16 be eligible for technical assistance or cost-shar17 ing payments, or both.

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

19 operator who performs a land management

20 practice shall be eligible for technical assistance

21 or incentive payments, or both.

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

23 chapter may be provided with respect to land that

24 is used for livestock production and on which a seri25 ous threat to water, soil, or related resources exists,
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1 as determined by the Secretary, by reason of the soil

2 types, terrain, climatic, soil, topographic, flood, or

3 saline characteristics, or other factors or natural

4 hazards.

5 ‘‘(4) SELECTION CRITERIA.—In providing tech6 nical assistance, cost-sharing payments, and incen7 tive payments to operators in a region, watershed, or

8 conservation priority area in which an agricultural

9 operation is located, the Secretary shall consider—

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

11 related natural resource problems; and

12 ‘‘(B) the maximization of environmental

13 benefits per dollar expended.

14 ‘‘(b) APPLICATION AND TERM.—

15 ‘‘(1) IN GENERAL.—A contract between an op16 erator and the Secretary under this chapter may—

17 ‘‘(A) apply to 1 or more structural prac18 tices or 1 or more land management practices,

19 or both; and

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

21 more than 10, years, as determined appropriate

22 by the Secretary, depending on the practice or

23 practices that are the basis of the contract.

24 ‘‘(2) DUTIES OF OPERATORS AND SEC25 RETARY.—To receive cost-sharing or incentive pay-
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1 ments, or technical assistance, participating opera2 tors shall comply with all terms and conditions of

3 the contract and a plan, as established by the Sec4 retary.

5 ‘‘(c) STRUCTURAL PRACTICES.—

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

7 shall administer a competitive offer system for oper8 ators proposing to receive cost-sharing payments in

9 exchange for the implementation of 1 or more struc10 tural practices by the operator. The competitive

11 offer system shall consist of—

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

13 by the operator in such manner as the Sec14 retary may prescribe; and

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

16 selection criteria established under subsection

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

18 determined by the Secretary.

19 ‘‘(2) CONCURRENCE OF OWNER.—If the opera20 tor making an offer to implement a structural prac21 tice is a tenant of the land involved in agricultural

22 production, for the offer to be acceptable, the opera23 tor shall obtain the concurrence of the owner of the

24 land with respect to the offer.
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1 ‘‘(d) LAND MANAGEMENT PRACTICES.—The Sec2 retary shall establish an application and evaluation proc3 ess for awarding technical assistance or incentive pay4 ments, or both, to an operator in exchange for the per5 formance of 1 or more land management practices by the

6 operator.

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

8 TECHNICAL ASSISTANCE.—

9 ‘‘(1) COST-SHARING PAYMENTS.—

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

11 cost-sharing payments to an operator proposing

12 to implement 1 or more structural practices

13 shall not be greater than 75 percent of the pro14 jected cost of each practice, as determined by

15 the Secretary, taking into consideration any

16 payment received by the operator from a State

17 or local government.

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

19 confined livestock operation shall not be eligible

20 for cost-sharing payments to construct an ani21 mal waste management facility.

22 ‘‘(C) OTHER PAYMENTS.—An operator

23 shall not be eligible for cost-sharing payments

24 for structural practices on eligible land under

25 this chapter if the operator receives cost-shar-
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1 ing payments or other benefits for the same

2 land under chapter 1, 2, or 3.

3 ‘‘(2) INCENTIVE PAYMENTS.—The Secretary

4 shall make incentive payments in an amount and at

5 a rate determined by the Secretary to be necessary

6 to encourage an operator to perform 1 or more land

7 management practices.

8 ‘‘(3) TECHNICAL ASSISTANCE.—

9 ‘‘(A) FUNDING.—The Secretary shall allo10 cate funding under this chapter for the provi11 sion of technical assistance according to the

12 purpose and projected cost for which the tech13 nical assistance is provided for a fiscal year.

14 The allocated amount may vary according to

15 the type of expertise required, quantity of time

16 involved, and other factors as determined ap17 propriate by the Secretary. Funding shall not

18 exceed the projected cost to the Secretary of the

19 technical assistance provided for a fiscal year.

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

21 of technical assistance under this chapter shall

22 not affect the eligibility of the operator to re23 ceive technical assistance under other authori24 ties of law available to the Secretary.

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

3 under this chapter may not exceed—

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

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

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

7 regulations that are consistent with section 1001 for

8 the purpose of—

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

10 paragraph (1); and

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

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

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

16 the effective date of this subsection, the Secretary shall

17 issue regulations to implement the livestock environmental

18 assistance program established under this chapter.’’.

19 (c) CONFORMING AMENDMENTS.—

20 (1) COMMODITY CREDIT CORPORATION CHAR21 TER ACT.—Section 5(g) of the Commodity Credit

22 Corporation Charter Act (15 U.S.C. 714c(g)) is

23 amended to read as follows:

24 ‘‘(g) Carry out conservation functions and pro25 grams.’’.
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1 (2) WETLANDS RESERVE PROGRAM.—

2 (A) IN GENERAL.—Section 1237 of the

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

4 amended—

5 (i) in subsection (b)(2)—

6 (I) by striking ‘‘not less’’ and in7 serting ‘‘not more’’; and

8 (II) by striking ‘‘2000’’ and in9 serting ‘‘2002’’; and

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

11 ‘‘2000’’ and inserting ‘‘2002’’.

12 (B) LENGTH OF EASEMENT.—Section

13 1237A(e) of the Food Security Act of 1985 (16

14 U.S.C. 3837a(e)) is amended by striking para15 graph (2) and inserting the following:

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

17 be a permanent easement.’’.

18 (3) CONSERVATION RESERVE PROGRAM.—

19 (A) IN GENERAL.—Section 1231(d) of the

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

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

22 follows through the period at the end of the

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

24 acres.’’.
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1 (B) OPTIONAL CONTRACT TERMINATION

2 BY PRODUCERS.—Section 1235 of the Food Se3 curity Act of 1985 (16 U.S.C. 3835) is amend4 ed by adding at the end the following:

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

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

7 operator of land subject to a contract entered into

8 under this subchapter may terminate the contract by

9 submitting to the Secretary written notice of the in10 tention of the owner or operator to terminate the

11 contract.

12 ‘‘(2) EFFECTIVE DATE.—The contract termi13 nation shall take effect 60 days after the date on

14 which the owner or operator submits the written no15 tice under paragraph (1).

16 ‘‘(3) PRORATED RENTAL PAYMENT.—If a con17 tract entered into under this subchapter is termi18 nated under this subsection before the end of the fis19 cal year for which a rental payment is due, the Sec20 retary shall provide a prorated rental payment cover21 ing the portion of the fiscal year during which the

22 contract was in effect.

23 ‘‘(4) RENEWED ENROLLMENT.—The termi24 nation of a contract entered into under this sub25 chapter shall not affect the ability of the owner or
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1 operator who requested the termination to submit a

2 subsequent bid to enroll the land that was subject to

3 the contract into the conservation reserve.

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

5 that was subject to a contract is returned to produc6 tion of an agricultural commodity, the conservation

7 requirements under subtitles B and C shall apply to

8 the use of the land to the extent that the require9 ments are similar to those requirements imposed on

10 other similar lands in the area, except that the re11 quirements may not be more onerous than the re12 quirements imposed on other lands.

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

14 who terminates a contract entered into under this

15 subchapter within less than 3 years after entering

16 into the contract shall reimburse the Secretary for

17 any cost share assistance provided under the con18 tract.’’.

19 (C) LIMITATION.—Notwithstanding any

20 other provision of law, no new acres shall be en21 rolled in the conservation reserve program es22 tablished under subchapter B of chapter 1 of

23 subtitle D of title XII of the Food Security Act

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

25 year 1997.
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1 Subtitle C—Agricultural Promotion

2 and Export Programs

3 SEC. 41. MARKET PROMOTION PROGRAM.

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

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

6 amended—

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

8 1993,’’; and

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

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

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

12 SEC. 42. EXPORT ENHANCEMENT PROGRAM.

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

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

15 amended to read as follows:

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

17 Corporation shall make available to carry out the

18 program established under this section not more

19 than—

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

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

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

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

24 ‘‘(E) $579,000,000 for fiscal year 2000;
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1 ‘‘(F) $478,000,000 for fiscal year 2001;

2 and

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

4 Subtitle D—Miscellaneous

5 SEC. 51. CROP INSURANCE.

6 (a) CATASTROPHIC RISK PROTECTION.—Section

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

8 1508(b)) is amended—

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

10 following:

11 ‘‘(C) DELIVERY OF COVERAGE.—

12 ‘‘(i) IN GENERAL.—In full consulta13 tion with approved insurance providers, the

14 Secretary may continue to offer cata15 strophic risk protection in a State (or a

16 portion of a State) through local offices of

17 the Department if the Secretary deter18 mines that there is an insufficient number

19 of approved insurance providers operating

20 in the State or portion to adequately pro21 vide catastrophic risk protection coverage

22 to producers.

23 ‘‘(ii) COVERAGE BY APPROVED INSUR24 ANCE PROVIDERS.—To the extent that cat25 astrophic risk protection coverage by ap-
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1 proved insurance providers is sufficiently

2 available in a State as determined by the

3 Secretary, only approved insurance provid4 ers may provide the coverage in the State.

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

6 clause (ii), all catastrophic risk protection

7 policies written by local offices of the De8 partment shall be transferred (including all

9 fees collected for the crop year in which

10 the approved insurance provider will as11 sume the policies) to the approved insur12 ance provider for performance of all sales,

13 service, and loss adjustment functions.’’;

14 and

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

16 (A) and inserting the following:

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

18 spring-planted 1996 and subsequent crops, to

19 be eligible for any payment or loan under the

20 Agricultural Market Transition Act, the con21 servation reserve program, or any benefit de22 scribed in section 371 of the Consolidated Farm

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

24 a person shall—
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1 ‘‘(i) obtain at least the catastrophic

2 level of insurance for each crop of eco3 nomic significance in which the person has

4 an interest; or

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

6 Secretary that waives any eligibility for

7 emergency crop loss assistance in connec8 tion with the crop.’’.

9 (b) COVERAGE OF SEED CROPS.—Section

10 519(a)(2)(B) of the Act (7 U.S.C. 1519(a)(2)(B)) is

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

12 SEC. 52. COLLECTION AND USE OF AGRICULTURAL QUAR13 ANTINE AND INSPECTION FEES.

14 Subsection (a) of section 2509 of the Food, Agri15 culture, Conservation, and Trade Act of 1990 (21 U.S.C.

16 136a) is amended to read as follows:

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

18 ‘‘(1) FEES AUTHORIZED.—The Secretary of Ag19 riculture may prescribe and collect fees sufficient—

20 ‘‘(A) to cover the cost of providing agricul21 tural quarantine and inspection services in con22 nection with the arrival at a port in the cus23 toms territory of the United States, or the

24 preclearance or preinspection at a site outside

25 the customs territory of the United States, of
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1 an international passenger, commercial vessel,

2 commercial aircraft, commercial truck, or rail3 road car;

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

5 subsection; and

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

7 a reasonable balance in the Agricultural Quar8 antine Inspection User Fee Account established

9 under paragraph (5).

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

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

12 amount of the fees are commensurate with the costs

13 of agricultural quarantine and inspection services

14 with respect to the class of persons or entities pay15 ing the fees. The costs of the services with respect

16 to passengers as a class includes the costs of related

17 inspections of the aircraft or other vehicle.

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

19 this subsection by any person on behalf of the Sec20 retary are held in trust for the United States and

21 shall be remitted to the Secretary in such manner

22 and at such times as the Secretary may prescribe.

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

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

25 fee when due, the Secretary shall assess a late pay-
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1 ment penalty, and the overdue fees shall accrue in2 terest, as required by section 3717 of title 31,

3 United States Code.

4 ‘‘(5) AGRICULTURAL QUARANTINE INSPECTION

5 USER FEE ACCOUNT.—

6 ‘‘(A) ESTABLISHMENT.—There is estab7 lished in the Treasury of the United States a

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

9 Quarantine Inspection User Fee Account’,

10 which shall contain all of the fees collected

11 under this subsection and late payment pen12 alties and interest charges collected under para13 graph (4) through fiscal year 2002.

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

15 fiscal years 1996 through 2002, funds in the

16 Agricultural Quarantine Inspection User Fee

17 Account shall be available, in such amounts as

18 are provided in advance in appropriations Acts,

19 to cover the costs associated with the provision

20 of agricultural quarantine and inspection serv21 ices and the administration of this subsection.

22 Amounts made available under this subpara23 graph shall be available until expended.

24 ‘‘(C) EXCESS FEES.—Fees and other

25 amounts collected under this subsection in any
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1 of the fiscal years 1996 through 2002 in excess

2 of $100,000,000 shall be available for the pur3 poses specified in subparagraph (B) until ex4 pended, without further appropriation.

5 ‘‘(6) USE OF AMOUNTS COLLECTED AFTER FIS6 CAL YEAR 2002.—After September 30, 2002, the un7 obligated balance in the Agricultural Quarantine In8 spection User Fee Account and fees and other

9 amounts collected under this subsection shall be

10 credited to the Department of Agriculture accounts

11 that incur the costs associated with the provision of

12 agricultural quarantine and inspection services and

13 the administration of this subsection. The fees and

14 other amounts shall remain available to the Sec15 retary until expended without fiscal year limitation.

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

17 equivalent positions in the Department of Agri18 culture attributable to the provision of agricultural

19 quarantine and inspection services and the adminis20 tration of this subsection shall not be counted to21 ward the limitation on the total number of full-time

22 equivalent positions in all agencies specified in sec23 tion 5(b) of the Federal Workforce Restructuring

24 Act of 1994 (Public Law 103–226; 5 U.S.C. 3101
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1 note) or other limitation on the total number of full2 time equivalent positions.’’.

3 SEC. 53. COMMODITY CREDIT CORPORATION INTEREST

4 RATE.

5 Notwithstanding any other provision of law, the

6 monthly Commodity Credit Corporation interest rate ap7 plicable to loans provided for agricultural commodities by

8 the Corporation shall be 100 basis points greater than the

9 rate determined under the applicable interest rate formula

10 in effect on October 1, 1995.

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