112TH CONGRESS 

2D SESSION S. 3240 

AN ACT 

To reauthorize agricultural programs through 2017, 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, 
2 

†S 3240 ES

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) IN GENERAL.—This Act may be cited as the ‘‘Ag3 riculture Reform, Food, and Jobs Act of 2012’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definition of Secretary. 

TITLE I—COMMODITY PROGRAMS 

Subtitle A—Repeals and Reforms 

Sec. 1101. Repeal of direct payments. 

Sec. 1102. Repeal of counter-cyclical payments. 

Sec. 1103. Repeal of average crop revenue election program. 

Sec. 1104. Definitions. 

Sec. 1105. Agriculture risk coverage. 

Sec. 1106. Producer agreement required as condition of provision of payments. 

Sec. 1107. Period of effectiveness. 

Sec. 1108. Adjusted gross income limitation for conservation programs. 

Subtitle B—Marketing Assistance Loans and Loan Deficiency Payments 

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

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

Sec. 1203. Term of loans. 

Sec. 1204. Repayment of loans. 

Sec. 1205. Loan deficiency payments. 

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

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

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

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

cotton. 

Sec. 1210. Adjustments of loans. 

Subtitle C—Sugar 

Sec. 1301. Sugar program. 

Subtitle D—Dairy 

PART I—DAIRY PRODUCTION MARGIN PROTECTION AND DAIRY MARKET

STABILIZATION PROGRAMS

Sec. 1401. Definitions. 

Sec. 1402. Calculation of average feed cost and actual dairy production margins. 

SUBPART A—DAIRY PRODUCTION MARGIN PROTECTION PROGRAM

Sec. 1411. Establishment of dairy production margin protection program. 
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Sec. 1412. Participation of dairy operations in production margin protection 

program. 

Sec. 1413. Production history of participating dairy operations. 

Sec. 1414. Basic production margin protection. 

Sec. 1415. Supplemental production margin protection. 

Sec. 1416. Effect of failure to pay administration fees or premiums. 

SUBPART B—DAIRY MARKET STABILIZATION PROGRAM

Sec. 1431. Establishment of dairy market stabilization program. 

Sec. 1432. Threshold for implementation and reduction in dairy payments. 

Sec. 1433. Milk marketings information. 

Sec. 1434. Calculation and collection of reduced dairy operation payments. 

Sec. 1435. Remitting funds to the Secretary and use of funds. 

Sec. 1436. Suspension of reduced payment requirement. 

Sec. 1437. Enforcement. 

Sec. 1438. Audit requirements. 

Sec. 1439. Study; report. 

SUBPART C—ADMINISTRATION

Sec. 1451. Duration. 

Sec. 1452. Administration and enforcement. 

PART II—DAIRY MARKET TRANSPARENCY

Sec. 1461. Dairy product mandatory reporting. 

Sec. 1462. Federal milk marketing order information. 

PART III—REPEAL OR REAUTHORIZATION OF OTHER DAIRY-RELATED

PROVISIONS

Sec. 1471. Repeal of dairy product price support and milk income loss contract 

programs. 

Sec. 1472. Repeal of dairy export incentive program. 

Sec. 1473. Extension of dairy forward pricing program. 

Sec. 1474. Extension of dairy indemnity program. 

Sec. 1475. Extension of dairy promotion and research program. 

Sec. 1476. Extension of Federal Milk Marketing Order Review Commission. 

PART IV—FEDERAL MILK MARKETING ORDER REFORM

Sec. 1481. Federal milk marketing orders. 

PART V—EFFECTIVE DATE

Sec. 1491. Effective date. 

Subtitle E—Supplemental Agricultural Disaster Assistance Programs 

Sec. 1501. Supplemental agricultural disaster assistance programs. 

Subtitle F—Administration 

Sec. 1601. Administration generally. 

Sec. 1602. Suspension of permanent price support authority. 

Sec. 1603. Payment limitations. 

Sec. 1604. Payments limited to active farmers. 

Sec. 1605. Adjusted gross income limitation. 
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Sec. 1606. Geographically disadvantaged farmers and ranchers. 

Sec. 1607. Personal liability of producers for deficiencies. 

Sec. 1608. Prevention of deceased individuals receiving payments under farm 

commodity programs. 

Sec. 1609. Appeals. 

Sec. 1610. Technical corrections. 

Sec. 1611. Assignment of payments. 

Sec. 1612. Tracking of benefits. 

Sec. 1613. Signature authority. 

Sec. 1614. Implementation. 

TITLE II—CONSERVATION 

Subtitle A—Conservation Reserve Program 

Sec. 2001. Extension and enrollment requirements of conservation reserve program. 

Sec. 2002. Farmable wetland program. 

Sec. 2003. Duties of owners and operators. 

Sec. 2004. Duties of the Secretary. 

Sec. 2005. Payments. 

Sec. 2006. Contract requirements. 

Sec. 2007. Conversion of land subject to contract to other conserving uses. 

Sec. 2008. Effective date. 

Subtitle B—Conservation Stewardship Program 

Sec. 2101. Conservation stewardship program. 

Subtitle C—Environmental Quality Incentives Program 

Sec. 2201. Purposes. 

Sec. 2202. Definitions. 

Sec. 2203. Establishment and administration. 

Sec. 2204. Evaluation of applications. 

Sec. 2205. Duties of producers. 

Sec. 2206. Limitation on payments. 

Sec. 2207. Conservation innovation grants and payments. 

Sec. 2208. Effective date. 

Subtitle D—Agricultural Conservation Easement Program 

Sec. 2301. Agricultural Conservation Easement Program. 

Subtitle E—Regional Conservation Partnership Program 

Sec. 2401. Regional Conservation Partnership Program. 

Subtitle F—Other Conservation Programs 

Sec. 2501. Conservation of private grazing land. 

Sec. 2502. Grassroots source water protection program. 

Sec. 2503. Voluntary public access and habitat incentive program. 

Sec. 2504. Agriculture conservation experienced services program. 

Sec. 2505. Small watershed rehabilitation program. 

Sec. 2506. Terminal lakes assistance. 

Subtitle G—Funding and Administration 
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Sec. 2601. Funding. 

Sec. 2602. Technical assistance. 

Sec. 2603. Regional equity. 

Sec. 2604. Reservation of funds to provide assistance to certain farmers or 

ranchers for conservation access. 

Sec. 2605. Annual report on program enrollments and assistance. 

Sec. 2606. Administrative requirements for conservation programs. 

Sec. 2607. Rulemaking authority. 

Sec. 2608. Standards for State technical committees. 

Sec. 2609. Highly erodible land and wetland conservation for crop insurance. 

Subtitle H—Repeal of Superseded Program Authorities and Transitional 

Provisions 

Sec. 2701. Comprehensive conservation enhancement program. 

Sec. 2702. Emergency forestry conservation reserve program. 

Sec. 2703. Wetlands reserve program. 

Sec. 2704. Farmland protection program and farm viability program. 

Sec. 2705. Grassland reserve program. 

Sec. 2706. Agricultural water enhancement program. 

Sec. 2707. Wildlife habitat incentive program. 

Sec. 2708. Great Lakes basin program. 

Sec. 2709. Chesapeake Bay watershed program. 

Sec. 2710. Cooperative conservation partnership initiative. 

Sec. 2711. Environmental easement program. 

Sec. 2712. Technical amendments. 

TITLE III—TRADE 

Subtitle A—Food for Peace Act 

Sec. 3001. Set-aside for support for organizations through which nonemergency 

assistance is provided. 

Sec. 3002. Food aid quality. 

Sec. 3003. Minimum levels of assistance. 

Sec. 3004. Reauthorization of Food Aid Consultative Group. 

Sec. 3005. Oversight, monitoring, and evaluation of Food for Peace Act programs. 

Sec. 3006. Assistance for stockpiling and rapid transportation, delivery, and 

distribution of shelf-stable prepackaged foods. 

Sec. 3007. Limitation on total volume of commodities monetized. 

Sec. 3008. Flexibility. 

Sec. 3009. Procurement, transportation, testing, and storage of agricultural 

commodities for prepositioning in the United States and foreign countries. 

Sec. 3010. Deadline for agreements to finance sales or to provide other assistance. 

Sec. 3011. Minimum level of nonemergency food assistance. 

Sec. 3012. Coordination of foreign assistance programs report. 

Sec. 3013. Micronutrient fortification programs. 

Sec. 3014. John Ogonowski and Doug Bereuter Farmer-to-Farmer Program. 

Sec. 3015. Prohibition on assistance for North Korea. 

Subtitle B—Agricultural Trade Act of 1978 

Sec. 3101. Export credit guarantee programs. 

Sec. 3102. Funding for market access program. 
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Sec. 3103. Foreign market development cooperator program. 

Subtitle C—Other Agricultural Trade Laws 

Sec. 3201. Food for Progress Act of 1985. 

Sec. 3202. Bill Emerson Humanitarian Trust. 

Sec. 3203. Promotion of agricultural exports to emerging markets. 

Sec. 3204. McGovern-Dole International Food for Education and Child Nutrition Program. 

Sec. 3205. Technical assistance for specialty crops. 

Sec. 3206. Global Crop Diversity Trust. 

Sec. 3207. Local and regional food aid procurement projects. 

Sec. 3208. Donald Payne Horn of Africa food resilience program. 

Sec. 3209. Agricultural trade enhancement study. 

TITLE IV—NUTRITION 

Subtitle A—Supplemental Nutrition Assistance Program 

Sec. 4001. Food distribution program on Indian reservations. 

Sec. 4002. Standard utility allowances based on the receipt of energy assistance 

payments. 

Sec. 4003. Eligibility disqualifications. 

Sec. 4004. Ending supplemental nutrition assistance program benefits for lottery or gambling winners. 

Sec. 4005. Retail food stores. 

Sec. 4006. Improving security of food assistance. 

Sec. 4007. Technology modernization for retail food stores. 

Sec. 4008. Use of benefits for purchase of community-supported agriculture 

share. 

Sec. 4009. Restaurant meals program. 

Sec. 4010. Quality control error rate determination. 

Sec. 4011. Performance bonus payments. 

Sec. 4012. Authorization of appropriations. 

Sec. 4013. Assistance for community food projects. 

Sec. 4014. Emergency food assistance. 

Sec. 4015. Nutrition education. 

Sec. 4016. Retail food store and recipient trafficking. 

Sec. 4017. Technical and conforming amendments. 

Subtitle B—Commodity Distribution Programs 

Sec. 4101. Commodity distribution program. 

Sec. 4102. Commodity supplemental food program. 

Sec. 4103. Distribution of surplus commodities to special nutrition projects. 

Sec. 4104. Technical and conforming amendments. 

Subtitle C—Miscellaneous 

Sec. 4201. Purchase of fresh fruits and vegetables for distribution to schools 

and service institutions. 

Sec. 4202. Seniors farmers’ market nutrition program. 

Sec. 4203. Nutrition information and awareness pilot program. 

Sec. 4204. Whole grain products. 

Sec. 4205. Hunger-free communities. 

Sec. 4206. Healthy Food Financing Initiative. 

Sec. 4207. Pulse crop products. 
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Sec. 4208. Dietary Guidelines for Americans. 

Sec. 4209. Purchases of locally produced foods. 

TITLE V—CREDIT 

Subtitle A—Farmer Loans, Servicing, and Other Assistance Under the 

Consolidated Farm and Rural Development Act 

Sec. 5001. Farmer loans, servicing, and other assistance under the Consolidated Farm and Rural Development Act. 

Subtitle B—Miscellaneous 

Sec. 5101. State agricultural mediation programs. 

Sec. 5102. Loans to purchasers of highly fractionated land. 

Sec. 5103. Removal of duplicative appraisals. 

TITLE VI—RURAL DEVELOPMENT 

Subtitle A—Reorganization of the Consolidated Farm and Rural Development 

Act 

Sec. 6001. Reorganization of the Consolidated Farm and Rural Development 

Act. 

Sec. 6002. Conforming amendments. 

Subtitle B—Rural Electrification 

Sec. 6101. Definition of rural area. 

Sec. 6102. Guarantees for bonds and notes issued for electrification or telephone purposes. 

Sec. 6103. Expansion of 911 access. 

Sec. 6104. Access to broadband telecommunications services in rural areas. 

Subtitle C—Miscellaneous 

Sec. 6201. Distance learning and telemedicine. 

Sec. 6202. Rural energy savings program. 

Sec. 6203. Funding of pending rural development loan and grant applications. 

Sec. 6204. Study of rural transportation issues. 

Sec. 6205. Agricultural transportation policy. 

TITLE VII—RESEARCH, EXTENSION, AND RELATED MATTERS 

Subtitle A—National Agricultural Research, Extension, and Teaching Policy 

Act of 1977 

Sec. 7101. National Agricultural Research, Extension, Education, and Economics Advisory Board. 

Sec. 7102. Specialty crop committee. 

Sec. 7103. Veterinary services grant program. 

Sec. 7104. Grants and fellowships for food and agriculture sciences education. 

Sec. 7105. Agricultural and food policy research centers. 

Sec. 7106. Education grants to Alaska Native serving institutions and Native 

Hawaiian serving institutions. 

Sec. 7107. Nutrition education program. 

Sec. 7108. Continuing animal health and disease research programs. 
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Sec. 7109. Grants to upgrade agricultural and food sciences facilities at 1890 

land-grant colleges, including Tuskegee University. 

Sec. 7110. Grants to upgrade agricultural and food sciences facilities and 

equipment at insular area land-grant institutions. 

Sec. 7111. Hispanic-serving institutions. 

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

Sec. 7113. University research. 

Sec. 7114. Extension service. 

Sec. 7115. Supplemental and alternative crops. 

Sec. 7116. Capacity building grants for NLGCA institutions. 

Sec. 7117. Aquaculture assistance programs. 

Sec. 7118. Rangeland research programs. 

Sec. 7119. Special authorization for biosecurity planning and response. 

Sec. 7120. Distance education and resident instruction grants program for insular area institutions of higher education. 

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

Sec. 7201. Best utilization of biological applications. 

Sec. 7202. Integrated management systems. 

Sec. 7203. Sustainable agriculture technology development and transfer program. 

Sec. 7204. National training program. 

Sec. 7205. National Genetics Resources Program. 

Sec. 7206. National Agricultural Weather Information System. 

Sec. 7207. High-priority research and extension initiatives. 

Sec. 7208. Organic agriculture research and extension initiative. 

Sec. 7209. Farm business management. 

Sec. 7210. Regional centers of excellence. 

Sec. 7211. Assistive technology program for farmers with disabilities. 

Sec. 7212. National rural information center clearinghouse. 

Subtitle C—Agricultural Research, Extension, and Education Reform Act of 

1998 

Sec. 7301. Relevance and merit of agricultural research, extension, and education funded by the Department. 

Sec. 7302. Integrated research, education, and extension competitive grants 

program. 

Sec. 7303. Support for research regarding diseases of wheat, triticale, and barley caused by Fusarium graminearum or by Tilletia indica. 

Sec. 7304. Grants for youth organizations. 

Sec. 7305. Specialty crop research initiative. 

Sec. 7306. Food animal residue avoidance database program. 

Sec. 7307. Office of pest management policy. 

Sec. 7308. Authorization of regional integrated pest management centers. 

Subtitle D—Other Laws 

Sec. 7401. Critical Agricultural Materials Act. 

Sec. 7402. Equity in Educational Land-Grant Status Act of 1994. 

Sec. 7403. Research Facilities Act. 

Sec. 7404. Competitive, Special, and Facilities Research Grant Act. 

Sec. 7405. Enhanced use lease authority pilot program under Department of 

Agriculture Reorganization Act of 1994. 
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Sec. 7406. Renewable Resources Extension Act of 1978. 

Sec. 7407. National Aquaculture Act of 1980. 

Sec. 7408. Beginning farmer and rancher development program under Farm 

Security and Rural Investment Act of 2002. 

Subtitle E—Food, Conservation, and Energy Act of 2008 

PART I—AGRICULTURAL SECURITY

Sec. 7501. Agricultural biosecurity communication center. 

Sec. 7502. Assistance to build local capacity in agricultural biosecurity planning, preparation, and response. 

Sec. 7503. Research and development of agricultural countermeasures. 

Sec. 7504. Agricultural biosecurity grant program. 

PART II—MISCELLANEOUS

Sec. 7511. Grazinglands research laboratory. 

Sec. 7512. Budget submission and funding. 

Sec. 7513. Natural products research program. 

Sec. 7514. Sun grant program. 

Subtitle F—Miscellaneous 

Sec. 7601. Foundation for Food and Agriculture Research. 

Sec. 7602. Objective and scholarly agricultural and food law research and information. 

TITLE VIII—FORESTRY 

Subtitle A—Repeal of Certain Forestry Programs 

Sec. 8001. Forest land enhancement program. 

Sec. 8002. Watershed forestry assistance program. 

Sec. 8003. Expired cooperative national forest products marketing program. 

Sec. 8004. Hispanic-serving institution agricultural land national resources 

leadership program. 

Sec. 8005. Tribal watershed forestry assistance program. 

Subtitle B—Reauthorization of Cooperative Forestry Assistance Act of 1978 

Programs 

Sec. 8101. State-wide assessment and strategies for forest resources. 

Sec. 8102. Forest stewardship program. 

Sec. 8103. Forest Legacy Program. 

Sec. 8104. Community forest and open space conservation program. 

Sec. 8105. Urban and community forestry assistance. 

Subtitle C—Reauthorization of Other Forestry-related Laws 

Sec. 8201. Rural revitalization technologies. 

Sec. 8202. Office of International Forestry. 

Sec. 8203. Insect infestations and related diseases. 

Sec. 8204. Stewardship end result contracting projects. 

Sec. 8205. Healthy forests reserve program. 

Subtitle D—Miscellaneous Provisions 

Sec. 8301. McIntire-Stennis Cooperative Forestry Act. 
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Sec. 8302. Revision of strategic plan for forest inventory and analysis. 

TITLE IX—ENERGY 

Sec. 9001. Definition of renewable chemical. 

Sec. 9002. Biobased markets program. 

Sec. 9003. Biorefinery, renewable chemical, and biobased product manufacturing assistance. 

Sec. 9004. Repeal of repowering assistance program and transfer of remaining 

funds. 

Sec. 9005. Bioenergy program for advanced biofuels. 

Sec. 9006. Biodiesel fuel education program. 

Sec. 9007. Rural Energy for America Program. 

Sec. 9008. Biomass research and development. 

Sec. 9009. Feedstock flexibility program for bioenergy producers. 

Sec. 9010. Biomass Crop Assistance Program. 

Sec. 9011. Repeal of forest biomass for energy. 

Sec. 9012. Community wood energy program. 

Sec. 9013. Repeal of renewable fertilizer study. 

TITLE X—HORTICULTURE 

Sec. 10001. Specialty crops market news allocation. 

Sec. 10002. Repeal of grant program to improve movement of specialty crops. 

Sec. 10003. Farmers market and local food promotion program. 

Sec. 10004. Study on local food production and program evaluation. 

Sec. 10005. Organic agriculture. 

Sec. 10006. Food safety education initiatives. 

Sec. 10007. Coordinated plant management program. 

Sec. 10008. Specialty crop block grants. 

Sec. 10009. Recordkeeping, investigations, and enforcement. 

Sec. 10010. Report on honey. 

Sec. 10011. Effective date. 

TITLE XI—CROP INSURANCE 

Sec. 11001. Supplemental coverage option. 

Sec. 11002. Premium amounts for catastrophic risk protection. 

Sec. 11003. Permanent enterprise unit. 

Sec. 11004. Enterprise units for irrigated and nonirrigated crops. 

Sec. 11005. Data collection. 

Sec. 11006. Adjustment in actual production history to establish insurable 

yields. 

Sec. 11007. Submission and review of policies. 

Sec. 11008. Board review and approval. 

Sec. 11009. Consultation. 

Sec. 11010. Budget limitations on renegotiation of the standard reinsurance 

agreement. 

Sec. 11011. Stacked income protection plan for producers of upland cotton. 

Sec. 11012. Peanut revenue crop insurance. 

Sec. 11013. Authority to correct errors. 

Sec. 11014. Implementation. 

Sec. 11015. Approval of costs for research and development. 

Sec. 11016. Whole farm risk management insurance. 

Sec. 11017. Study of food safety insurance. 

Sec. 11018. Crop insurance for livestock. 
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Sec. 11019. Margin coverage for catfish. 

Sec. 11020. Poultry business disruption insurance policy. 

Sec. 11021. Crop insurance for organic crops. 

Sec. 11022. Research and development. 

Sec. 11023. Pilot programs. 

Sec. 11024. Index-based weather insurance pilot program. 

Sec. 11025. Enhancing producer self-help through farm financial 

benchmarking. 

Sec. 11026. Beginning farmer and rancher provisions. 

Sec. 11027. Agricultural management assistance, risk management education, 

and organic certification cost share assistance. 

Sec. 11028. Crop production on native sod. 

Sec. 11029. Technical amendments. 

Sec. 11030. Greater accessibility for crop insurance. 

Sec. 11031. GAO crop insurance fraud report. 

Sec. 11032. Limitation on premium subsidy based on average adjusted gross 

income. 

TITLE XII—MISCELLANEOUS 

Subtitle A—Socially Disadvantaged Producers and Limited Resource 

Producers 

Sec. 12001. Outreach and assistance for socially disadvantaged farmers and 

ranchers and veteran farmers and ranchers. 

Sec. 12002. Office of Advocacy and Outreach. 

Subtitle B—Livestock 

Sec. 12101. Wildlife reservoir zoonotic disease initiative. 

Sec. 12102. Trichinae certification program. 

Sec. 12103. National Aquatic Animal Health Plan. 

Sec. 12104. Sheep production and marketing grant program. 

Sec. 12105. Feral swine eradication pilot program. 

Subtitle C—Other Miscellaneous Provisions 

Sec. 12201. Military veterans agricultural liaison. 

Sec. 12202. Information gathering. 

Sec. 12203. Grants to improve supply, stability, safety, and training of agricultural labor force. 

Sec. 12204. Noninsured crop assistance program. 

Sec. 12205. Regional economic and infrastructure development. 

Sec. 12206. Canada geese removal. 

Sec. 12207. Office of Tribal Relations. 

Sec. 12208. Repeal of duplicative program. 

Sec. 12209. Sense of the Senate. 

Sec. 12210. Acer Access and Development Program. 

Sec. 12211. Definition of rural area for purposes of the Housing Act of 1949. 

Sec. 12212. Animal welfare. 

Sec. 12213. Prohibition on attending an animal fight or causing a minor to attend an animal fight; enforcement of animal fighting provisions. 

Sec. 12214. Prohibiting use of presidential election campaign funds for party 

conventions. 

Sec. 12215. Reports on effects of defense and nondefense budget sequestration. 
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1 SEC. 2. DEFINITION OF SECRETARY. 

2 In this Act, the term ‘‘Secretary’’ means the Sec3 retary of Agriculture. 

4 TITLE I—COMMODITY 

5 PROGRAMS 

6 Subtitle A—Repeals and Reforms 

7 SEC. 1101. REPEAL OF DIRECT PAYMENTS. 

8 (a) REPEAL.—Sections 1103 and 1303 of the Food, 

9 Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 

10 8753) are repealed. 

11 (b) CONTINUED APPLICATION FOR 2012 CROP

12 YEAR.—Sections 1103 and 1303 of the Food, Conserva13 tion, and Energy Act of 2008 (7 U.S.C. 8713, 8753), as 

14 in effect on the day before the date of enactment of this 

15 Act, shall continue to apply through the 2012 crop year 

16 with respect to all covered commodities (as defined in sec17 tion 1001 of that Act (7 U.S.C. 8702)) (except pulse 

18 crops) and peanuts on a farm. 

19 SEC. 1102. REPEAL OF COUNTER-CYCLICAL PAYMENTS. 

20 (a) REPEAL.—Sections 1104 and 1304 of the Food, 

21 Conservation, and Energy Act of 2008 (7 U.S.C. 8714, 

22 8754) are repealed. 

23 (b) CONTINUED APPLICATION FOR 2012 CROP

24 YEAR.—Sections 1104 and 1304 of the Food, Conserva25 tion, and Energy Act of 2008 (7 U.S.C. 8714, 8754), as 

26 in effect on the day before the date of enactment of this 
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1 Act, shall continue to apply through the 2012 crop year 

2 with respect to all covered commodities (as defined in sec3 tion 1001 of that Act (7 U.S.C. 8702)) and peanuts on 

4 a farm. 

5 SEC. 1103. REPEAL OF AVERAGE CROP REVENUE ELECTION 

6 PROGRAM. 

7 (a) REPEAL.—Section 1105 of the Food, Conserva8 tion, and Energy Act of 2008 (7 U.S.C. 8715) is repealed. 

9 (b) CONTINUED APPLICATION FOR 2012 CROP

10 YEAR.—Section 1105 of the Food, Conservation, and En11 ergy Act of 2008 (7 U.S.C. 8715), as in effect on the day 

12 before the date of enactment of this Act, shall continue 

13 to apply through the 2012 crop year with respect to all 

14 covered commodities (as defined in section 1001 of that 

15 Act (7 U.S.C. 8702)) and peanuts on a farm for which 

16 the irrevocable election under section 1105 of that Act is 

17 made before the date of enactment of this Act. 

18 SEC. 1104. DEFINITIONS. 

19 In this subtitle, subtitle B, and subtitle F: 

20 (1) ACTUAL CROP REVENUE.—The term ‘‘ac21 tual crop revenue’’, with respect to a covered com22 modity for a crop year, means the amount deter23 mined by the Secretary under section 1105(c)(3). 

24 (2) AGRICULTURE RISK COVERAGE GUAR25 ANTEE.—The term ‘‘agriculture risk coverage guar-
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1 antee’’, with respect to a covered commodity for a 

2 crop year, means the amount determined by the Sec3 retary under section 1105(c)(4). 

4 (3) AGRICULTURE RISK COVERAGE PAYMENT.— 

5 The term ‘‘agriculture risk coverage payment’’ 

6 means a payment under section 1105(c). 

7 (4) AVERAGE INDIVIDUAL YIELD.—The term 

8 ‘‘average individual yield’’ means the yield reported 

9 by a producer for purposes of subtitle A of the Fed10 eral Crop Insurance Act (7 U.S.C. 1501 et seq.), to 

11 the maximum extent practicable. 

12 (5) COUNTY COVERAGE.—For the purposes of 

13 agriculture risk coverage under section 1105, the 

14 term ‘‘county coverage’’ means coverage determined 

15 using the total quantity of all acreage in a county 

16 of the covered commodity that is planted or pre17 vented from being planted for harvest by a producer 

18 with the yield determined by the average county 

19 yield described in subsection (c) of that section. 

20 (6) COVERED COMMODITY.— 

21 (A) IN GENERAL.—The term ‘‘covered 

22 commodity’’ means wheat, corn, grain sorghum, 

23 barley, oats, long grain rice, medium grain rice, 

24 pulse crops, soybeans, other oilseeds, and pea25 nuts. 
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1 (B) POPCORN.—The Secretary— 

2 (i) shall study the feasibility of includ3 ing popcorn as a covered commodity by 

4 2014; and 

5 (ii) if the Secretary determines it to 

6 be feasible, shall designate popcorn as a 

7 covered commodity. 

8 (7) ELIGIBLE ACRES.— 

9 (A) IN GENERAL.—Except as provided in 

10 subparagraphs (B) through (D), the term ‘‘eli11 gible acres’’ means all acres planted or pre12 vented from being planted to all covered com13 modities on a farm in any crop year. 

14 (B) MAXIMUM.—Except as provided in 

15 (C), the total quantity of eligible acres on a 

16 farm determined under subparagraph (A) shall 

17 not exceed the average total acres planted or 

18 prevented from being planted to covered com19 modities and upland cotton on the farm for the 

20 2009 through 2012 crop years, as determined 

21 by the Secretary. 

22 (C) ADJUSTMENT.—The Secretary shall 

23 provide for an adjustment, as appropriate, in 

24 the eligible acres for covered commodities for a 
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1 farm if any of the following circumstances oc2 curs: 

3 (i) If a conservation reserve contract 

4 for a farm in a county entered into under 

5 section 1231 of the Food Security Act of 

6 1985 (16 U.S.C. 3831) expires or is volun7 tarily terminated or cropland is released 

8 from coverage under a conservation reserve 

9 contract, the Secretary shall provide for an 

10 adjustment, as appropriate, in the eligible 

11 acres for the farm to a total quantity that 

12 is the higher of— 

13 (I) the total base acreage for the 

14 farm, less any upland cotton base 

15 acreage, that was suspended during 

16 the conservation reserve contract; or 

17 (II) the product obtained by mul18 tiplying— 

19 (aa) the average proportion 

20 that— 

21 (AA) the total number 

22 of acres planted to covered 

23 commodities and upland cot24 ton in the county for crop 
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1 years 2009 through 2012; 

2 bears to 

3 (BB) the total number 

4 of all acres of covered com5 modities, grassland, and up6 land cotton acres in the 

7 county for the same crop 

8 years; by 

9 (bb) the total acres for 

10 which coverage has expired, vol11 untarily terminated, or been re12 leased under the conservation re13 serve contract. 

14 (ii) The producer has eligible oilseed 

15 acreage as the result of the Secretary des16 ignating additional oilseeds, which shall be 

17 determined in the same manner as eligible 

18 oilseed acreage under section 

19 1101(a)(1)(D) of the Food, Conservation, 

20 and Energy Act of 2008 (7 U.S.C. 

21 8711(a)(1)(D)). 

22 (iii) The producer has any acreage not 

23 cropped during the 2009 through 2012 

24 crop years, but placed into an established 

25 rotation practice for the purposes of en-
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1 riching land or conserving moisture for 

2 subsequent crop years, including summer 

3 fallow, as determined by the Secretary. 

4 (D) EXCLUSION.—The term ‘‘eligible 

5 acres’’ does not include any crop subsequently 

6 planted during the same crop year on the same 

7 land for which the first crop is eligible for pay8 ments under this subtitle, unless the crop was 

9 planted in an area approved for double crop10 ping, as determined by the Secretary. 

11 (8) EXTRA LONG STAPLE COTTON.—The term 

12 ‘‘extra long staple cotton’’ means cotton that— 

13 (A) is produced from pure strain varieties 

14 of the Barbadense species or any hybrid of the 

15 species, or other similar types of extra long sta16 ple cotton, designated by the Secretary, having 

17 characteristics needed for various end uses for 

18 which United States upland cotton is not suit19 able and grown in irrigated cotton-growing re20 gions of the United States designated by the 

21 Secretary or other areas designated by the Sec22 retary as suitable for the production of the vari23 eties or types; and 
19 

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1 (B) is ginned on a roller-type gin or, if au2 thorized by the Secretary, ginned on another 

3 type gin for experimental purposes. 

4 (9) INDIVIDUAL COVERAGE.—For purposes of 

5 agriculture risk coverage under section 1105, the 

6 term ‘‘individual coverage’’ means coverage deter7 mined using the total quantity of all acreage in a 

8 county of the covered commodity that is planted or 

9 prevented from being planted for harvest by a pro10 ducer with the yield determined by the average indi11 vidual yield of the producer described in subsection 

12 (c) of that section. 

13 (10) MEDIUM GRAIN RICE.—The term ‘‘medium 

14 grain rice’’ includes short grain rice. 

15 (11) MIDSEASON PRICE.—The term ‘‘midseason 

16 price’’ means the applicable national average market 

17 price received by producers for the first 5 months of 

18 the applicable marketing year, as determined by the 

19 Secretary. 

20 (12) OTHER OILSEED.—The term ‘‘other oil21 seed’’ means a crop of sunflower seed, rapeseed, 

22 canola, safflower, flaxseed, mustard seed, crambe, 

23 sesame seed, or any oilseed designated by the Sec24 retary. 

25 (13) PRODUCER.— 
20 

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

2 means an owner, operator, landlord, tenant, or 

3 sharecropper that shares in the risk of pro4 ducing a crop and is entitled to share in the 

5 crop available for marketing from the farm, or 

6 would have shared had the crop been produced. 

7 (B) HYBRID SEED.—In determining 

8 whether a grower of hybrid seed is a producer, 

9 the Secretary shall— 

10 (i) not take into consideration the ex11 istence of a hybrid seed contract; and 

12 (ii) ensure that program requirements 

13 do not adversely affect the ability of the 

14 grower to receive a payment under this 

15 title. 

16 (14) PULSE CROP.—The term ‘‘pulse crop’’ 

17 means dry peas, lentils, small chickpeas, and large 

18 chickpeas. 

19 (15) STATE.—The term ‘‘State’’ means— 

20 (A) a State; 

21 (B) the District of Columbia; 

22 (C) the Commonwealth of Puerto Rico; 

23 and 

24 (D) any other territory or possession of the 

25 United States. 
21 

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1 (16) TRANSITIONAL YIELD.—The term ‘‘transi2 tional yield’’ has the meaning given the term in sec3 tion 502(b) of the Federal Crop Insurance Act (7 

4 U.S.C. 1502(b)). 

5 (17) UNITED STATES.—The term ‘‘United 

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

7 all of the States. 

8 (18) UNITED STATES PREMIUM FACTOR.—The 

9 term ‘‘United States Premium Factor’’ means the 

10 percentage by which the difference in the United 

11 States loan schedule premiums for Strict Middling 

(SM) 11 12 ⁄8-inch upland cotton and for Middling (M) 

13 13 ⁄32-inch upland cotton exceeds the difference in the 

14 applicable premiums for comparable international 

15 qualities. 

16 SEC. 1105. AGRICULTURE RISK COVERAGE. 

17 (a) PAYMENTS REQUIRED.—If the Secretary deter18 mines that payments are required under subsection (c), 

19 the Secretary shall make payments for each covered com20 modity available to producers in accordance with this sec21 tion. 

22 (b) COVERAGE ELECTION.— 

23 (1) IN GENERAL.—For the period of crop years 

24 2013 through 2017, the producers shall make a 1- 

25 time, irrevocable election to receive— 
22 

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1 (A) individual coverage under this section, 

2 as determined by the Secretary; or 

3 (B) in the case of a county with sufficient 

4 data (as determined by the Secretary), county 

5 coverage under this section. 

6 (2) EFFECT OF ELECTION.—The election made 

7 under paragraph (1) shall be binding on the pro8 ducers making the election, regardless of covered 

9 commodities planted, and applicable to all acres 

10 under the operational control of the producers, in a 

11 manner that— 

12 (A) acres brought under the operational 

13 control of the producers after the election are 

14 included; and 

15 (B) acres no longer under the operational 

16 control of the producers after the election are 

17 no longer subject to the election of the pro18 ducers but become subject to the election of the 

19 subsequent producers. 

20 (3) DUTIES OF THE SECRETARY.—The Sec21 retary shall ensure that producers are precluded 

22 from taking any action, including reconstitution, 

23 transfer, or other similar action, that would have the 

24 effect of altering or reversing the election made 

25 under paragraph (1). 
23 

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1 (c) AGRICULTURE RISK COVERAGE.— 

2 (1) PAYMENTS.—The Secretary shall make ag3 riculture risk coverage payments available under this 

4 subsection for each of the 2013 through 2017 crop 

5 years if the Secretary determines that— 

6 (A) the actual crop revenue for the crop 

7 year for the covered commodity; is less than 

8 (B) the agriculture risk coverage guarantee 

9 for the crop year for the covered commodity. 

10 (2) TIME FOR PAYMENTS.—If the Secretary de11 termines under this subsection that agriculture risk 

12 coverage payments are required to be made for the 

13 covered commodity, the agriculture risk coverage 

14 payments shall be made as soon as practicable there15 after. 

16 (3) ACTUAL CROP REVENUE.—The amount of 

17 the actual crop revenue for a crop year of a covered 

18 commodity shall be equal to the product obtained by 

19 multiplying— 

20 (A)(i) in the case of individual coverage, 

21 the actual average individual yield for the cov22 ered commodity, as determined by the Sec23 retary; or 

24 (ii) in the case of county coverage, the ac25 tual average yield for the county for the covered 
24 

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1 commodity, as determined by the Secretary; 

2 and 

3 (B) the higher of— 

4 (i) the midseason price; or 

5 (ii) if applicable, the national mar6 keting assistance loan rate for the covered 

7 commodity under subtitle B. 

8 (4) AGRICULTURE RISK COVERAGE GUAR9 ANTEE.— 

10 (A) IN GENERAL.—The agriculture risk 

11 coverage guarantee for a crop year for a cov12 ered commodity shall equal 89 percent of the 

13 benchmark revenue. 

14 (B) BENCHMARK REVENUE.— 

15 (i) IN GENERAL.—The benchmark 

16 revenue shall be the product obtained by 

17 multiplying— 

18 (I)(aa) in the case of individual 

19 coverage, subject to clause (ii), the av20 erage individual yield, as determined 

21 by the Secretary, for the most recent 

22 5 crop years, excluding each of the 

23 crop years with the highest and lowest 

24 yields; or 
25 

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1 (bb) in the case of county cov2 erage, the average county yield, as de3 termined by the Secretary, for the 

4 most recent 5 crop years, excluding 

5 each of the crop years with the high6 est and lowest yields; and 

7 (II) subject to clause (iii), the av8 erage national marketing year average 

9 price for the most recent 5 crop years, 

10 excluding each of the crop years with 

11 the highest and lowest prices. 

12 (ii) USE OF TRANSITIONAL YIELDS.— 

13 If the yield determined under clause 

14 (i)(I)(aa)— 

15 (I) for the 2012 crop year or any 

16 prior crop year, is less than 60 per17 cent of the applicable transitional 

18 yield, the Secretary shall use 60 per19 cent of the applicable transitional 

20 yield for that crop year; and 

21 (II) for the 2013 crop year and 

22 any subsequent crop year, is less than 

23 70 percent of the applicable transi24 tional yield, the Secretary shall use 70 
26 

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1 percent of the applicable transitional 

2 yield for that crop year. 

3 (iii) SPECIAL RULE FOR RICE AND

4 PEANUTS.—If the national marketing year 

5 average price under clause (i)(II) for any 

6 of the applicable crop years is lower than 

7 the price for the covered commodity listed 

8 below, the Secretary shall use the following 

9 price for that crop year: 

10 (I) For long grain rice, $13.00 

11 per hundredweight. 

12 (II) For medium grain rice, 

13 $13.00 per hundredweight. 

14 (III) For peanuts, $530.00 per 

15 ton. 

16 (5) PAYMENT RATE.—The payment rate for 

17 each covered commodity shall be equal to the lesser 

18 of— 

19 (A) the amount that— 

20 (i) the agriculture risk coverage guar21 antee for the covered commodity; exceeds 

22 (ii) the actual crop revenue for the 

23 crop year of the covered commodity; or 

24 (B) 10 percent of the benchmark revenue 

25 for the crop year of the covered commodity. 
27 

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1 (6) PAYMENT AMOUNT.—If agriculture risk 

2 coverage payments under this subsection are re3 quired to be paid for any of the 2013 through 2017 

4 crop years of a covered commodity, the amount of 

5 the agriculture risk coverage payment for the crop 

6 year shall be equal to the product obtained by multi7 plying— 

8 (A) the payment rate under paragraph (5); 

9 and 

10 (B)(i) in the case of individual coverage 

11 the sum of— 

12 (I) 65 percent of the planted eligible 

13 acres of the covered commodity; and 

14 (II) 45 percent of the eligible acres 

15 that were prevented from being planted to 

16 the covered commodity; or 

17 (ii) in the case of county coverage— 

18 (I) 80 percent of the planted eligible 

19 acres of the covered commodity; and 

20 (II) 45 percent of the eligible acres 

21 that were prevented from being planted to 

22 the covered commodity. 

23 (7) DUTIES OF THE SECRETARY.—In carrying 

24 out the program under this subsection, the Secretary 

25 shall— 
28 

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1 (A) to the maximum extent practicable, 

2 use all available information and analysis to 

3 check for anomalies in the determination of 

4 payments under the program; 

5 (B) to the maximum extent practicable, 

6 calculate a separate actual crop revenue and ag7 riculture risk coverage guarantee for irrigated 

8 and nonirrigated covered commodities; 

9 (C) differentiate by type or class the na10 tional average price of— 

11 (i) sunflower seeds; 

12 (ii) barley, using malting barley val13 ues; and 

14 (iii) wheat; and 

15 (D) assign a yield for each acre planted or 

16 prevented from being planted for the crop year 

17 for the covered commodity on the basis of the 

18 yield history of representative farms in the 

19 State, region, or crop reporting district, as de20 termined by the Secretary, if the Secretary can21 not establish the yield as determined under 

22 paragraph (3)(A)(ii) or (4)(B)(i) or if the yield 

23 determined under paragraph (3)(A)(ii) or (4) is 

24 an unrepresentative average yield for the cov25 ered commodity as determined by the Secretary. 
29 

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1 SEC. 1106. PRODUCER AGREEMENT REQUIRED AS CONDI2 TION OF PROVISION OF PAYMENTS. 

3 (a) COMPLIANCE WITH CERTAIN REQUIREMENTS.— 

4 (1) REQUIREMENTS.—Before the producers on 

5 a farm may receive agriculture risk coverage pay6 ments, the producers shall agree, during the crop 

7 year for which the payments are made and in ex8 change for the payments— 

9 (A) to comply with applicable conservation 

10 requirements under subtitle B of title XII of 

11 the Food Security Act of 1985 (16 U.S.C. 3811 

12 et seq.); 

13 (B) to comply with applicable wetland pro14 tection requirements under subtitle C of title 

15 XII of that Act (16 U.S.C. 3821 et seq.); 

16 (C) to use the land on the farm for an ag17 ricultural or conserving use in a quantity equal 

18 to the attributable eligible acres of the farm, 

19 and not for a nonagricultural commercial, in20 dustrial, or residential use, as determined by 

21 the Secretary; and 

22 (D) to effectively control noxious weeds 

23 and otherwise maintain the land in accordance 

24 with sound agricultural practices, as determined 

25 by the Secretary, if the agricultural or con26 serving use involves the noncultivation of any 
30 

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1 portion of the land referred to in subparagraph 

2 (C). 

3 (2) COMPLIANCE.—The Secretary may issue 

4 such rules as the Secretary considers necessary to 

5 ensure producer compliance with the requirements of 

6 paragraph (1). 

7 (3) MODIFICATION.—At the request of the 

8 transferee or owner, the Secretary may modify the 

9 requirements of this subsection if the modifications 

10 are consistent with the objectives of this subsection, 

11 as determined by the Secretary. 

12 (b) TRANSFER OR CHANGE OF INTEREST IN

13 FARM.— 

14 (1) TERMINATION.— 

15 (A) IN GENERAL.—Except as provided in 

16 paragraph (2), a transfer of (or change in) the 

17 interest of the producers on a farm for which 

18 agriculture risk coverage payments are made 

19 shall result in the termination of the agriculture 

20 risk coverage payments, unless the transferee or 

21 owner of the acreage agrees to assume all obli22 gations under subsection (a). 

23 (B) EFFECTIVE DATE.—The termination 

24 shall take effect on the date determined by the 

25 Secretary. 
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1 (2) EXCEPTION.—If a producer entitled to an 

2 agriculture risk coverage payment dies, becomes in3 competent, or is otherwise unable to receive the pay4 ment, the Secretary shall make the payment, in ac5 cordance with rules issued by the Secretary. 

6 (c) REPORTS.— 

7 (1) ACREAGE REPORTS.—As a condition on the 

8 receipt of any benefits under this subtitle or subtitle 

9 B, the Secretary shall require producers on a farm 

10 to submit to the Secretary annual acreage reports 

11 with respect to all cropland on the farm. 

12 (2) PRODUCTION REPORTS.—As a condition on 

13 the receipt of any benefits under section 1105, the 

14 Secretary shall require producers on a farm to sub15 mit to the Secretary annual production reports with 

16 respect to all covered commodities produced on the 

17 farm. 

18 (3) PENALTIES.—No penalty with respect to 

19 benefits under this subtitle or subtitle B shall be as20 sessed against the producers on a farm for an inac21 curate acreage or production report unless the pro22 ducers on the farm knowingly and willfully falsified 

23 the acreage or production report. 

24 (4) DATA REPORTING.—To the maximum ex25 tent practicable, the Secretary shall use data re-
32 

†S 3240 ES

1 ported by the producer pursuant to requirements 

2 under the Federal Crop Insurance Act (7 U.S.C. 

3 1501 et seq.) to meet the obligations described in 

4 paragraphs (1) and (2), without additional submis5 sions to the Department. 

6 (d) TENANTS AND SHARECROPPERS.—In carrying 

7 out this subtitle, the Secretary shall provide adequate safe8 guards to protect the interests of tenants and share9 croppers. 

10 SEC. 1107. PERIOD OF EFFECTIVENESS. 

11 Sections 1104 through 1106 shall be effective begin12 ning with the 2013 crop year of each covered commodity 

13 through the 2017 crop year. 

14 SEC. 1108. ADJUSTED GROSS INCOME LIMITATION FOR 

15 CONSERVATION PROGRAMS. 

16 Section 1001D(b)(2)(A) of the Food Security Act of 

17 1985 (7 U.S.C. 1308–3a(b)(2)(A)) is amended— 

18 (1) by striking ‘‘LIMITS.—’’ and all that follows 

19 through ‘‘clause (ii),’’ and inserting ‘‘LIMITS.—Not20 withstanding any other provision of law,’’; and 

21 (2) by striking clause (ii). 
33 

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1 Subtitle B—Marketing Assistance 

2 Loans and Loan Deficiency Pay3 ments 

4 SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING 

5 ASSISTANCE LOANS FOR LOAN COMMOD6 ITIES. 

7 (a) DEFINITION OF LOAN COMMODITY.—In this sub8 title, the term ‘‘loan commodity’’ means wheat, corn, grain 

9 sorghum, barley, oats, upland cotton, extra long staple 

10 cotton, long grain rice, medium grain rice, peanuts, soy11 beans, other oilseeds, graded wool, nongraded wool, mo12 hair, honey, dry peas, lentils, small chickpeas, and large 

13 chickpeas. 

14 (b) NONRECOURSE LOANS AVAILABLE.— 

15 (1) IN GENERAL.—For each of the 2013 

16 through 2017 crops of each loan commodity, the 

17 Secretary shall make available to producers on a 

18 farm nonrecourse marketing assistance loans for 

19 loan commodities produced on the farm. 

20 (2) TERMS AND CONDITIONS.—The marketing 

21 assistance loans shall be made under terms and con22 ditions that are prescribed by the Secretary and at 

23 the loan rate established under section 1202 for the 

24 loan commodity. 
34 

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1 (c) ELIGIBLE PRODUCTION.—The producers on a 

2 farm shall be eligible for a marketing assistance loan 

3 under subsection (b) for any quantity of a loan commodity 

4 produced on the farm. 

5 (d) COMPLIANCE WITH CONSERVATION AND WET6 LANDS REQUIREMENTS.— 

7 (1) REQUIREMENTS.—Before the producers on 

8 a farm may receive a marketing assistance loan or 

9 any other payment or benefit under this subtitle, the 

10 producers shall agree, for the crop year for which 

11 the payments are made and in exchange for the pay12 ments— 

13 (A) to comply with applicable conservation 

14 requirements under subtitle B of title XII of 

15 the Food Security Act of 1985 (16 U.S.C. 3811 

16 et seq.); 

17 (B) to comply with applicable wetland pro18 tection requirements under subtitle C of title 

19 XII of that Act (16 U.S.C. 3821 et seq.); 

20 (C) to use the land on the farm for an ag21 ricultural or conserving use in a quantity equal 

22 to the attributable eligible acres of the farm, 

23 and not for a nonagricultural commercial, in24 dustrial, or residential use, as determined by 

25 the Secretary; and 
35 

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1 (D) to effectively control noxious weeds 

2 and otherwise maintain the land in accordance 

3 with sound agricultural practices, as determined 

4 by the Secretary, if the agricultural or con5 serving use involves the noncultivation of any 

6 portion of the land referred to in subparagraph 

7 (C). 

8 (2) COMPLIANCE.—The Secretary may issue 

9 such rules as the Secretary considers necessary to 

10 ensure producer compliance with paragraph (1). 

11 (3) MODIFICATION.—At the request of a trans12 feree or owner, the Secretary may modify the re13 quirements of this subsection if the modifications 

14 are consistent with the purposes of this subsection, 

15 as determined by the Secretary. 

16 (e) SPECIAL RULES FOR PEANUTS.— 

17 (1) IN GENERAL.—This subsection shall apply 

18 only to producers of peanuts. 

19 (2) OPTIONS FOR OBTAINING LOAN.—A mar20 keting assistance loan under this section, and loan 

21 deficiency payments under section 1205, may be ob22 tained at the option of the producers on a farm 

23 through— 
36 

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1 (A) a designated marketing association or 

2 marketing cooperative of producers that is ap3 proved by the Secretary; or 

4 (B) the Farm Service Agency. 

5 (3) STORAGE OF LOAN PEANUTS.—As a condi6 tion on the approval by the Secretary of an indi7 vidual or entity to provide storage for peanuts for 

8 which a marketing assistance loan is made under 

9 this section, the individual or entity shall agree— 

10 (A) to provide the storage on a nondiscrim11 inatory basis; and 

12 (B) to comply with such additional require13 ments as the Secretary considers appropriate to 

14 accomplish the purposes of this section and pro15 mote fairness in the administration of the bene16 fits of this section. 

17 (4) STORAGE, HANDLING, AND ASSOCIATED

18 COSTS.— 

19 (A) IN GENERAL.—To ensure proper stor20 age of peanuts for which a loan is made under 

21 this section, the Secretary shall pay handling 

22 and other associated costs (other than storage 

23 costs) incurred at the time at which the peanuts 

24 are placed under loan, as determined by the 

25 Secretary. 
37 

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1 (B) REDEMPTION AND FORFEITURE.—The 

2 Secretary shall— 

3 (i) require the repayment of handling 

4 and other associated costs paid under sub5 paragraph (A) for all peanuts pledged as 

6 collateral for a loan that is redeemed under 

7 this section; and 

8 (ii) pay storage, handling, and other 

9 associated costs for all peanuts pledged as 

10 collateral that are forfeited under this sec11 tion. 

12 (5) MARKETING.—A marketing association or 

13 cooperative may market peanuts for which a loan is 

14 made under this section in any manner that con15 forms to consumer needs, including the separation of 

16 peanuts by type and quality. 

17 (6) REIMBURSABLE AGREEMENTS AND PAY18 MENT OF ADMINISTRATIVE EXPENSES.—The Sec19 retary may implement any reimbursable agreements 

20 or provide for the payment of administrative ex21 penses under this subsection only in a manner that 

22 is consistent with those activities in regard to other 

23 loan commodities. 
38 

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1 SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING 

2 ASSISTANCE LOANS. 

3 (a) IN GENERAL.—For purposes of each of the 2013 

4 through 2017 crop years, the loan rate for a marketing 

5 assistance loan under section 1201 for a loan commodity 

6 shall be equal to the following: 

7 (1) In the case of wheat, $2.94 per bushel. 

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

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

10 bushel. 

11 (4) In the case of barley, $1.95 per bushel. 

12 (5) In the case of oats, $1.39 per bushel. 

13 (6) In the case of base quality of upland cotton, 

14 for the 2013 and each subsequent crop year, the 

15 simple average of the adjusted prevailing world price 

16 for the 2 immediately preceding marketing years, as 

17 determined by the Secretary and announced October 

18 1 preceding the next domestic plantings, but in no 

19 case less than $0.47 per pound or more than $0.52 

20 per pound. 

21 (7) In the case of extra long staple cotton, 

22 $0.7977 per pound. 

23 (8) In the case of long grain rice, $6.50 per 

24 hundredweight. 

25 (9) In the case of medium grain rice, $6.50 per 

26 hundredweight. 
39 

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

2 (11) In the case of other oilseeds, $10.09 per 

3 hundredweight for each of the following kinds of oil4 seeds: 

5 (A) Sunflower seed. 

6 (B) Rapeseed. 

7 (C) Canola. 

8 (D) Safflower. 

9 (E) Flaxseed. 

10 (F) Mustard seed. 

11 (G) Crambe. 

12 (H) Sesame seed. 

13 (I) Other oilseeds designated by the Sec14 retary. 

15 (12) In the case of dry peas, $5.40 per hun16 dredweight. 

17 (13) In the case of lentils, $11.28 per hundred18 weight. 

19 (14) In the case of small chickpeas, $7.43 per 

20 hundredweight. 

21 (15) In the case of large chickpeas, $11.28 per 

22 hundredweight. 

23 (16) In the case of graded wool, $1.15 per 

24 pound. 
40 

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1 (17) In the case of nongraded wool, $0.40 per 

2 pound. 

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

4 (19) In the case of honey, $0.69 per pound. 

5 (20) In the case of peanuts, $355 per ton. 

6 (b) SINGLE COUNTY LOAN RATE FOR OTHER OIL7 SEEDS.—The Secretary shall establish a single loan rate 

8 in each county for each kind of other oilseeds described 

9 in subsection (a)(11). 

10 SEC. 1203. TERM OF LOANS. 

11 (a) TERM OF LOAN.—In the case of each loan com12 modity, a marketing assistance loan under section 1201 

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

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

15 made. 

16 (b) EXTENSIONS PROHIBITED.—The Secretary may 

17 not extend the term of a marketing assistance loan for 

18 any loan commodity. 

19 SEC. 1204. REPAYMENT OF LOANS. 

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

21 producers on a farm to repay a marketing assistance loan 

22 under section 1201 for a loan commodity (other than up23 land cotton, long grain rice, medium grain rice, extra long 

24 staple cotton, peanuts and confectionery and each other 
41 

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1 kind of sunflower seed (other than oil sunflower seed)) at 

2 a rate that is the lesser of— 

3 (1) the loan rate established for the commodity 

4 under section 1202, plus interest (determined in ac5 cordance with section 163 of the Federal Agriculture 

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

7 7283)); 

8 (2) a rate (as determined by the Secretary) 

9 that— 

10 (A) is calculated based on average market 

11 prices for the loan commodity during the pre12 ceding 30-day period; and 

13 (B) will minimize discrepancies in mar14 keting loan benefits across State boundaries 

15 and across county boundaries; or 

16 (3) a rate that the Secretary may develop using 

17 alternative methods for calculating a repayment rate 

18 for a loan commodity that the Secretary determines 

19 will— 

20 (A) minimize potential loan forfeitures; 

21 (B) minimize the accumulation of stocks of 

22 the commodity by the Federal Government; 

23 (C) minimize the cost incurred by the Fed24 eral Government in storing the commodity; 
42 

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1 (D) allow the commodity produced in the 

2 United States to be marketed freely and com3 petitively, both domestically and internationally; 

4 and 

5 (E) minimize discrepancies in marketing 

6 loan benefits across State boundaries and 

7 across county boundaries. 

8 (b) REPAYMENT RATES FOR UPLAND COTTON, LONG

9 GRAIN RICE, AND MEDIUM GRAIN RICE.—The Secretary 

10 shall permit producers to repay a marketing assistance 

11 loan under section 1201 for upland cotton, long grain rice, 

12 and medium grain rice at a rate that is the lesser of— 

13 (1) the loan rate established for the commodity 

14 under section 1202, plus interest (determined in ac15 cordance with section 163 of the Federal Agriculture 

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

17 7283)); or 

18 (2) the prevailing world market price for the 

19 commodity, as determined and adjusted by the Sec20 retary in accordance with this section. 

21 (c) REPAYMENT RATES FOR EXTRA LONG STAPLE

22 COTTON.—Repayment of a marketing assistance loan for 

23 extra long staple cotton shall be at the loan rate estab24 lished for the commodity under section 1202, plus interest 

25 (determined in accordance with section 163 of the Federal 
43 

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1 Agriculture Improvement and Reform Act of 1996 (7 

2 U.S.C. 7283)). 

3 (d) PREVAILING WORLD MARKET PRICE.—For pur4 poses of this section and section 1207, the Secretary shall 

5 prescribe by regulation— 

6 (1) a formula to determine the prevailing world 

7 market price for each of upland cotton, long grain 

8 rice, and medium grain rice; and 

9 (2) a mechanism by which the Secretary shall 

10 announce periodically those prevailing world market 

11 prices. 

12 (e) ADJUSTMENT OF PREVAILING WORLD MARKET

13 PRICE FOR UPLAND COTTON, LONG GRAIN RICE, AND

14 MEDIUM GRAIN RICE.— 

15 (1) RICE.—The prevailing world market price 

16 for long grain rice and medium grain rice deter17 mined under subsection (d) shall be adjusted to 

18 United States quality and location. 

19 (2) COTTON.—The prevailing world market 

20 price for upland cotton determined under subsection 

21 (d)— 

22 (A) shall be adjusted to United States 

23 quality and location, with the adjustment to in24 clude— 
44 

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1 (i) a reduction equal to any United 

2 States Premium Factor for upland cotton 

3 of a quality higher than Middling (M) 

13 4 ⁄32-inch; and 

5 (ii) the average costs to market the 

6 commodity, including average transpor7 tation costs, as determined by the Sec8 retary; and 

9 (B) may be further adjusted, during the 

10 period beginning on the date of enactment of 

11 this Act and ending on July 31, 2018, if the 

12 Secretary determines the adjustment is nec13 essary— 

14 (i) to minimize potential loan forfeit15 ures; 

16 (ii) to minimize the accumulation of 

17 stocks of upland cotton by the Federal 

18 Government; 

19 (iii) to ensure that upland cotton pro20 duced in the United States can be mar21 keted freely and competitively, both domes22 tically and internationally; and 

23 (iv) to ensure an appropriate transi24 tion between current-crop and forward25 crop price quotations, except that the Sec-
45 

†S 3240 ES

1 retary may use forward-crop price 

2 quotations prior to July 31 of a marketing 

3 year only if— 

4 (I) there are insufficient current5 crop price quotations; and 

6 (II) the forward-crop price 

7 quotation is the lowest such quotation 

8 available. 

9 (3) GUIDELINES FOR ADDITIONAL ADJUST10 MENTS.—In making adjustments under this sub11 section, the Secretary shall establish a mechanism 

12 for determining and announcing the adjustments in 

13 order to avoid undue disruption in the United States 

14 market. 

15 (f) REPAYMENT RATES FOR CONFECTIONERY AND

16 OTHER KINDS OF SUNFLOWER SEEDS.—The Secretary 

17 shall permit the producers on a farm to repay a marketing 

18 assistance loan under section 1201 for confectionery and 

19 each other kind of sunflower seed (other than oil sunflower 

20 seed) at a rate that is the lesser of— 

21 (1) the loan rate established for the commodity 

22 under section 1202, plus interest (determined in ac23 cordance with section 163 of the Federal Agriculture 

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

25 7283)); or 
46 

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1 (2) the repayment rate established for oil sun2 flower seed. 

3 (g) PAYMENT OF COTTON STORAGE COSTS.—Effec4 tive for each of the 2013 through 2017 crop years, the 

5 Secretary shall make cotton storage payments available in 

6 the same manner, and at the same rates as the Secretary 

7 provided storage payments for the 2006 crop of cotton, 

8 except that the rates shall be reduced by 20 percent. 

9 (h) REPAYMENT RATE FOR PEANUTS.—The Sec10 retary shall permit producers on a farm to repay a mar11 keting assistance loan for peanuts under subsection (a) at 

12 a rate that is the lesser of— 

13 (1) the loan rate established for peanuts under 

14 subsection (b), plus interest (determined in accord15 ance with section 163 of the Federal Agriculture Im16 provement and Reform Act of 1996 (7 U.S.C. 

17 7283)); or 

18 (2) a rate that the Secretary determines will— 

19 (A) minimize potential loan forfeitures; 

20 (B) minimize the accumulation of stocks of 

21 peanuts by the Federal Government; 

22 (C) minimize the cost incurred by the Fed23 eral Government in storing peanuts; and 
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1 (D) allow peanuts produced in the United 

2 States to be marketed freely and competitively, 

3 both domestically and internationally. 

4 (i) AUTHORITY TO TEMPORARILY ADJUST REPAY5 MENT RATES.— 

6 (1) ADJUSTMENT AUTHORITY.—In the event of 

7 a severe disruption to marketing, transportation, or 

8 related infrastructure, the Secretary may modify the 

9 repayment rate otherwise applicable under this sec10 tion for marketing assistance loans under section 

11 1201 for a loan commodity. 

12 (2) DURATION.—Any adjustment made under 

13 paragraph (1) in the repayment rate for marketing 

14 assistance loans for a loan commodity shall be in ef15 fect on a short-term and temporary basis, as deter16 mined by the Secretary. 

17 SEC. 1205. LOAN DEFICIENCY PAYMENTS. 

18 (a) AVAILABILITY OF LOAN DEFICIENCY PAY19 MENTS.— 

20 (1) IN GENERAL.—Except as provided in sub21 section (d), the Secretary may make loan deficiency 

22 payments available to producers on a farm that, al23 though eligible to obtain a marketing assistance loan 

24 under section 1201 with respect to a loan com25 modity, agree to forgo obtaining the loan for the 
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1 commodity in return for loan deficiency payments 

2 under this section. 

3 (2) UNSHORN PELTS, HAY, AND SILAGE.— 

4 (A) MARKETING ASSISTANCE LOANS.— 

5 Subject to subparagraph (B), nongraded wool 

6 in the form of unshorn pelts and hay and silage 

7 derived from a loan commodity are not eligible 

8 for a marketing assistance loan under section 

9 1201. 

10 (B) LOAN DEFICIENCY PAYMENT.—Effec11 tive for the 2013 through 2017 crop years, the 

12 Secretary may make loan deficiency payments 

13 available under this section to producers on a 

14 farm that produce unshorn pelts or hay and si15 lage derived from a loan commodity. 

16 (b) COMPUTATION.—A loan deficiency payment for a 

17 loan commodity or commodity referred to in subsection 

18 (a)(2) shall be equal to the product obtained by multi19 plying— 

20 (1) the payment rate determined under sub21 section (c) for the commodity; by 

22 (2) the quantity of the commodity produced by 

23 the eligible producers, excluding any quantity for 

24 which the producers obtain a marketing assistance 

25 loan under section 1201. 
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1 (c) PAYMENT RATE.— 

2 (1) IN GENERAL.—In the case of a loan com3 modity, the payment rate shall be the amount by 

4 which— 

5 (A) the loan rate established under section 

6 1202 for the loan commodity; exceeds 

7 (B) the rate at which a marketing assist8 ance loan for the loan commodity may be repaid 

9 under section 1204. 

10 (2) UNSHORN PELTS.—In the case of unshorn 

11 pelts, the payment rate shall be the amount by 

12 which— 

13 (A) the loan rate established under section 

14 1202 for ungraded wool; exceeds 

15 (B) the rate at which a marketing assist16 ance loan for ungraded wool may be repaid 

17 under section 1204. 

18 (3) HAY AND SILAGE.—In the case of hay or si19 lage derived from a loan commodity, the payment 

20 rate shall be the amount by which— 

21 (A) the loan rate established under section 

22 1202 for the loan commodity from which the 

23 hay or silage is derived; exceeds 
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1 (B) the rate at which a marketing assist2 ance loan for the loan commodity may be repaid 

3 under section 1204. 

4 (d) EXCEPTION FOR EXTRA LONG STAPLE COT5 TON.—This section shall not apply with respect to extra 

6 long staple cotton. 

7 (e) EFFECTIVE DATE FOR PAYMENT RATE DETER8 MINATION.—The Secretary shall determine the amount of 

9 the loan deficiency payment to be made under this section 

10 to the producers on a farm with respect to a quantity of 

11 a loan commodity or commodity referred to in subsection 

12 (a)(2) using the payment rate in effect under subsection 

13 (c) as of the date the producers request the payment. 

14 SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAY15 MENTS FOR GRAZED ACREAGE. 

16 (a) ELIGIBLE PRODUCERS.— 

17 (1) IN GENERAL.—Effective for the 2013 

18 through 2017 crop years, in the case of a producer 

19 that would be eligible for a loan deficiency payment 

20 under section 1205 for wheat, barley, or oats, but 

21 that elects to use acreage planted to the wheat, bar22 ley, or oats for the grazing of livestock, the Sec23 retary shall make a payment to the producer under 

24 this section if the producer enters into an agreement 
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1 with the Secretary to forgo any other harvesting of 

2 the wheat, barley, or oats on that acreage. 

3 (2) GRAZING OF TRITICALE ACREAGE.—Effec4 tive for the 2013 through 2017 crop years, with re5 spect to a producer on a farm that uses acreage 

6 planted to triticale for the grazing of livestock, the 

7 Secretary shall make a payment to the producer 

8 under this section if the producer enters into an 

9 agreement with the Secretary to forgo any other 

10 harvesting of triticale on that acreage. 

11 (b) PAYMENT AMOUNT.— 

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

13 made under this section to a producer on a farm de14 scribed in subsection (a)(1) shall be equal to the 

15 amount determined by multiplying— 

16 (A) the loan deficiency payment rate deter17 mined under section 1205(c) in effect, as of the 

18 date of the agreement, for the county in which 

19 the farm is located; by 

20 (B) the payment quantity determined by 

21 multiplying— 

22 (i) the quantity of the grazed acreage 

23 on the farm with respect to which the pro24 ducer elects to forgo harvesting of wheat, 

25 barley, or oats; and 
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1 (ii)(I) the yield in effect for the cal2 culation of agriculture risk coverage pay3 ments under subtitle A with respect to that 

4 loan commodity on the farm; or 

5 (II) in the case of a farm without a 

6 payment yield for that loan commodity, an 

7 appropriate yield established by the Sec8 retary. 

9 (2) GRAZING OF TRITICALE ACREAGE.—The 

10 amount of a payment made under this section to a 

11 producer on a farm described in subsection (a)(2) 

12 shall be equal to the amount determined by multi13 plying— 

14 (A) the loan deficiency payment rate deter15 mined under section 1205(c) in effect for 

16 wheat, as of the date of the agreement, for the 

17 county in which the farm is located; by 

18 (B) the payment quantity determined by 

19 multiplying— 

20 (i) the quantity of the grazed acreage 

21 on the farm with respect to which the pro22 ducer elects to forgo harvesting of triticale; 

23 and 

24 (ii)(I) the yield in effect for the cal25 culation of agriculture risk coverage pay-
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1 ments under subtitle A with respect to 

2 wheat on the farm; or 

3 (II) in the case of a farm without a 

4 payment yield for wheat, an appropriate 

5 yield established by the Secretary in a 

6 manner consistent with section 1102 of the 

7 Food, Conservation, and Energy Act of 

8 2008 (7 U.S.C. 8712). 

9 (c) TIME, MANNER, AND AVAILABILITY OF PAY10 MENT.— 

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

12 section shall be made at the same time and in the 

13 same manner as loan deficiency payments are made 

14 under section 1205. 

15 (2) AVAILABILITY.— 

16 (A) IN GENERAL.—The Secretary shall es17 tablish an availability period for the payments 

18 authorized by this section. 

19 (B) CERTAIN COMMODITIES.—In the case 

20 of wheat, barley, and oats, the availability pe21 riod shall be consistent with the availability pe22 riod for the commodity established by the Sec23 retary for marketing assistance loans author24 ized by this subtitle. 
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1 (d) PROHIBITION ON CROP INSURANCE INDEMNITY

2 OR NONINSURED CROP ASSISTANCE.—A 2013 through 

3 2017 crop of wheat, barley, oats, or triticale planted on 

4 acreage that a producer elects, in the agreement required 

5 by subsection (a), to use for the grazing of livestock in 

6 lieu of any other harvesting of the crop shall not be eligible 

7 for an indemnity under a policy or plan of insurance au8 thorized under the Federal Crop Insurance Act (7 U.S.C. 

9 1501 et seq.) or noninsured crop assistance under section 

10 196 of the Federal Agriculture Improvement and Reform 

11 Act of 1996 (7 U.S.C. 7333). 

12 SEC. 1207. SPECIAL MARKETING LOAN PROVISIONS FOR 

13 UPLAND COTTON. 

14 (a) SPECIAL IMPORT QUOTA.— 

15 (1) DEFINITION OF SPECIAL IMPORT QUOTA.— 

16 In this subsection, the term ‘‘special import quota’’ 

17 means a quantity of imports that is not subject to 

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

19 (2) ESTABLISHMENT.— 

20 (A) IN GENERAL.—The President shall 

21 carry out an import quota program during the 

22 period beginning on August 1, 2013, and end23 ing on July 31, 2018, as provided in this sub24 section. 
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1 (B) PROGRAM REQUIREMENTS.—Whenever 

2 the Secretary determines and announces that 

3 for any consecutive 4-week period, the Friday 

4 through Thursday average price quotation for 

5 the lowest-priced United States growth, as 

quoted for Middling (M) 13 6 ⁄32-inch cotton, deliv7 ered to a definable and significant international 

8 market, as determined by the Secretary, ex9 ceeds the prevailing world market price, there 

10 shall immediately be in effect a special import 

11 quota. 

12 (3) QUANTITY.—The quota shall be equal to 

13 the consumption during a 1-week period of cotton by 

14 domestic mills at the seasonally adjusted average 

15 rate of the most recent 3 months for which official 

16 data of the Department of Agriculture or other data 

17 are available. 

18 (4) APPLICATION.—The quota shall apply to 

19 upland cotton purchased not later than 90 days 

20 after the date of the Secretary’s announcement 

21 under paragraph (2) and entered into the United 

22 States not later than 180 days after that date. 

23 (5) OVERLAP.—A special quota period may be 

24 established that overlaps any existing quota period if 

25 required by paragraph (2), except that a special 
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1 quota period may not be established under this sub2 section if a quota period has been established under 

3 subsection (b). 

4 (6) PREFERENTIAL TARIFF TREATMENT.—The 

5 quantity under a special import quota shall be con6 sidered to be an in-quota quantity for purposes of— 

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

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

9 (B) section 204 of the Andean Trade Pref10 erence Act (19 U.S.C. 3203); 

11 (C) section 503(d) of the Trade Act of 

12 1974 (19 U.S.C. 2463(d)); and 

13 (D) General Note 3(a)(iv) to the Har14 monized Tariff Schedule. 

15 (7) LIMITATION.—The quantity of cotton en16 tered into the United States during any marketing 

17 year under the special import quota established 

18 under this subsection may not exceed the equivalent 

19 of 10 week’s consumption of upland cotton by do20 mestic mills at the seasonally adjusted average rate 

21 of the 3 months immediately preceding the first spe22 cial import quota established in any marketing year. 

23 (b) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND

24 COTTON.— 

25 (1) DEFINITIONS.—In this subsection: 
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1 (A) DEMAND.—The term ‘‘demand’’ 

2 means— 

3 (i) the average seasonally adjusted an4 nual rate of domestic mill consumption of 

5 cotton during the most recent 3 months 

6 for which official data of the Department 

7 of Agriculture (as determined by the Sec8 retary) are available; and 

9 (ii) the larger of— 

10 (I) average exports of upland cot11 ton during the preceding 6 marketing 

12 years; or 

13 (II) cumulative exports of upland 

14 cotton plus outstanding export sales 

15 for the marketing year in which the 

16 quota is established. 

17 (B) LIMITED GLOBAL IMPORT QUOTA.— 

18 The term ‘‘limited global import quota’’ means 

19 a quantity of imports that is not subject to the 

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

21 (C) SUPPLY.—The term ‘‘supply’’ means, 

22 using the latest official data of the Department 

23 of Agriculture— 

24 (i) the carryover of upland cotton at 

25 the beginning of the marketing year (ad-
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1 justed to 480-pound bales) in which the 

2 quota is established; 

3 (ii) production of the current crop; 

4 and 

5 (iii) imports to the latest date avail6 able during the marketing year. 

7 (2) PROGRAM.—The President shall carry out 

8 an import quota program that provides that when9 ever the Secretary determines and announces that 

10 the average price of the base quality of upland cot11 ton, as determined by the Secretary, in the des12 ignated spot markets for a month exceeded 130 per13 cent of the average price of the quality of cotton in 

14 the markets for the preceding 36 months, notwith15 standing any other provision of law, there shall im16 mediately be in effect a limited global import quota 

17 subject to the following conditions: 

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

19 shall be equal to 21 days of domestic mill con20 sumption of upland cotton at the seasonally ad21 justed average rate of the most recent 3 months 

22 for which official data of the Department of Ag23 riculture are available or as estimated by the 

24 Secretary. 
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1 (B) QUANTITY IF PRIOR QUOTA.—If a 

2 quota has been established under this sub3 section during the preceding 12 months, the 

4 quantity of the quota next established under 

5 this subsection shall be the smaller of 21 days 

6 of domestic mill consumption calculated under 

7 subparagraph (A) or the quantity required to 

8 increase the supply to 130 percent of the de9 mand. 

10 (C) PREFERENTIAL TARIFF TREAT11 MENT.—The quantity under a limited global 

12 import quota shall be considered to be an in13 quota quantity for purposes of— 

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

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

16 2703(d)); 

17 (ii) section 204 of the Andean Trade 

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

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

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

21 (iv) General Note 3(a)(iv) to the Har22 monized Tariff Schedule. 

23 (D) QUOTA ENTRY PERIOD.—When a 

24 quota is established under this subsection, cot25 ton may be entered under the quota during the 
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1 90-day period beginning on the date the quota 

2 is established by the Secretary. 

3 (3) NO OVERLAP.—Notwithstanding paragraph 

4 (2), a quota period may not be established that over5 laps an existing quota period or a special quota pe6 riod established under subsection (a). 

7 (c) ECONOMIC ADJUSTMENT ASSISTANCE TO USERS

8 OF UPLAND COTTON.— 

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

10 the Secretary shall, on a monthly basis, make eco11 nomic adjustment assistance available to domestic 

12 users of upland cotton in the form of payments for 

13 all documented use of that upland cotton during the 

14 previous monthly period regardless of the origin of 

15 the upland cotton. 

16 (2) VALUE OF ASSISTANCE.—Effective begin17 ning on August 1, 2012, the value of the assistance 

18 provided under paragraph (1) shall be 3 cents per 

19 pound. 

20 (3) ALLOWABLE PURPOSES.—Economic adjust21 ment assistance under this subsection shall be made 

22 available only to domestic users of upland cotton 

23 that certify that the assistance shall be used only to 

24 acquire, construct, install, modernize, develop, con-
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1 vert, or expand land, plant, buildings, equipment, fa2 cilities, or machinery. 

3 (4) REVIEW OR AUDIT.—The Secretary may 

4 conduct such review or audit of the records of a do5 mestic user under this subsection as the Secretary 

6 determines necessary to carry out this subsection. 

7 (5) IMPROPER USE OF ASSISTANCE.—If the 

8 Secretary determines, after a review or audit of the 

9 records of the domestic user, that economic adjust10 ment assistance under this subsection was not used 

11 for the purposes specified in paragraph (3), the do12 mestic user shall be— 

13 (A) liable for the repayment of the assist14 ance to the Secretary, plus interest, as deter15 mined by the Secretary; and 

16 (B) ineligible to receive assistance under 

17 this subsection for a period of 1 year following 

18 the determination of the Secretary. 

19 SEC. 1208. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA 

20 LONG STAPLE COTTON. 

21 (a) COMPETITIVENESS PROGRAM.—Notwithstanding 

22 any other provision of law, during the period beginning 

23 on the date of enactment of this Act through July 31, 

24 2018, the Secretary shall carry out a program— 
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1 (1) to maintain and expand the domestic use of 

2 extra long staple cotton produced in the United 

3 States; 

4 (2) to increase exports of extra long staple cot5 ton produced in the United States; and 

6 (3) to ensure that extra long staple cotton pro7 duced in the United States remains competitive in 

8 world markets. 

9 (b) PAYMENTS UNDER PROGRAM; TRIGGER.—Under 

10 the program, the Secretary shall make payments available 

11 under this section whenever— 

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

13 market price for the lowest priced competing growth 

14 of extra long staple cotton (adjusted to United 

15 States quality and location and for other factors af16 fecting the competitiveness of such cotton), as deter17 mined by the Secretary, is below the prevailing 

18 United States price for a competing growth of extra 

19 long staple cotton; and 

20 (2) the lowest priced competing growth of extra 

21 long staple cotton (adjusted to United States quality 

22 and location and for other factors affecting the com23 petitiveness of such cotton), as determined by the 

24 Secretary, is less than 134 percent of the loan rate 

25 for extra long staple cotton. 
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1 (c) ELIGIBLE RECIPIENTS.—The Secretary shall 

2 make payments available under this section to domestic 

3 users of extra long staple cotton produced in the United 

4 States and exporters of extra long staple cotton produced 

5 in the United States that enter into an agreement with 

6 the Commodity Credit Corporation to participate in the 

7 program under this section. 

8 (d) PAYMENT AMOUNT.—Payments under this sec9 tion shall be based on the amount of the difference in the 

10 prices referred to in subsection (b)(1) during the fourth 

11 week of the consecutive 4-week period multiplied by the 

12 amount of documented purchases by domestic users and 

13 sales for export by exporters made in the week following 

14 such a consecutive 4-week period. 

15 SEC. 1209. AVAILABILITY OF RECOURSE LOANS FOR HIGH 

16 MOISTURE FEED GRAINS AND SEED COTTON. 

17 (a) HIGH MOISTURE FEED GRAINS.— 

18 (1) DEFINITION OF HIGH MOISTURE STATE.— 

19 In this subsection, the term ‘‘high moisture state’’ 

20 means corn or grain sorghum having a moisture con21 tent in excess of Commodity Credit Corporation 

22 standards for marketing assistance loans made by 

23 the Secretary under section 1201. 

24 (2) RECOURSE LOANS AVAILABLE.—For each of 

25 the 2013 through 2017 crops of corn and grain sor-
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1 ghum, the Secretary shall make available recourse 

2 loans, as determined by the Secretary, to producers 

3 on a farm that— 

4 (A) normally harvest all or a portion of 

5 their crop of corn or grain sorghum in a high 

6 moisture state; 

7 (B) present— 

8 (i) certified scale tickets from an in9 spected, certified commercial scale, includ10 ing a licensed warehouse, feedlot, feed mill, 

11 distillery, or other similar entity approved 

12 by the Secretary, pursuant to regulations 

13 issued by the Secretary; or 

14 (ii) field or other physical measure15 ments of the standing or stored crop in re16 gions of the United States, as determined 

17 by the Secretary, that do not have certified 

18 commercial scales from which certified 

19 scale tickets may be obtained within rea20 sonable proximity of harvest operation; 

21 (C) certify that the producers on the farm 

22 were the owners of the feed grain at the time 

23 of delivery to, and that the quantity to be 

24 placed under loan under this subsection was in 

25 fact harvested on the farm and delivered to, a 
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1 feedlot, feed mill, or commercial or on-farm 

2 high-moisture storage facility, or to a facility 

3 maintained by the users of corn and grain sor4 ghum in a high moisture state; and 

5 (D) comply with deadlines established by 

6 the Secretary for harvesting the corn or grain 

7 sorghum and submit applications for loans 

8 under this subsection within deadlines estab9 lished by the Secretary. 

10 (3) ELIGIBILITY OF ACQUIRED FEED GRAINS.— 

11 A loan under this subsection shall be made on a 

12 quantity of corn or grain sorghum of the same crop 

13 acquired by the producer equivalent to a quantity 

14 determined by multiplying— 

15 (A) the acreage of the corn or grain sor16 ghum in a high moisture state harvested on the 

17 farm of the producer; by 

18 (B) the lower of the actual average yield 

19 used to make payments under subtitle A or the 

20 actual yield on a field, as determined by the 

21 Secretary, that is similar to the field from 

22 which the corn or grain sorghum was obtained. 

23 (b) RECOURSE LOANS AVAILABLE FOR SEED COT24 TON.—For each of the 2013 through 2017 crops of upland 

25 cotton and extra long staple cotton, the Secretary shall 
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1 make available recourse seed cotton loans, as determined 

2 by the Secretary, on any production. 

3 (c) REPAYMENT RATES.—Repayment of a recourse 

4 loan made under this section shall be at the loan rate es5 tablished for the commodity by the Secretary, plus interest 

6 (determined in accordance with section 163 of the Federal 

7 Agriculture Improvement and Reform Act of 1996 (7 

8 U.S.C. 7283)). 

9 SEC. 1210. ADJUSTMENTS OF LOANS. 

10 (a) ADJUSTMENT AUTHORITY.—Subject to sub11 section (e), the Secretary may make appropriate adjust12 ments in the loan rates for any loan commodity (other 

13 than cotton) for differences in grade, type, quality, loca14 tion, and other factors. 

15 (b) MANNER OF ADJUSTMENT.—The adjustments 

16 under subsection (a) shall, to the maximum extent prac17 ticable, be made in such a manner that the average loan 

18 level for the commodity will, on the basis of the anticipated 

19 incidence of the factors, be equal to the level of support 

20 determined in accordance with this subtitle and subtitles 

21 C through E. 

22 (c) ADJUSTMENT ON COUNTY BASIS.— 

23 (1) IN GENERAL.—The Secretary may establish 

24 loan rates for a crop for producers in individual 

25 counties in a manner that results in the lowest loan 
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1 rate being 95 percent of the national average loan 

2 rate, if those loan rates do not result in an increase 

3 in outlays. 

4 (2) PROHIBITION.—Adjustments under this 

5 subsection shall not result in an increase in the na6 tional average loan rate for any year. 

7 (d) ADJUSTMENT IN LOAN RATE FOR COTTON.— 

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

9 appropriate adjustments in the loan rate for cotton 

10 for differences in quality factors. 

11 (2) REVISIONS TO QUALITY ADJUSTMENTS FOR

12 UPLAND COTTON.— 

13 (A) IN GENERAL.—Not later than 180 

14 days after the date of enactment of this Act, 

15 the Secretary shall implement revisions in the 

16 administration of the marketing assistance loan 

17 program for upland cotton to more accurately 

18 and efficiently reflect market values for upland 

19 cotton. 

20 (B) MANDATORY REVISIONS.—Revisions 

21 under subparagraph (A) shall include— 

22 (i) the elimination of warehouse loca23 tion differentials; 

24 (ii) the establishment of differentials 

25 for the various quality factors and staple 
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1 lengths of cotton based on a 3-year, 

2 weighted moving average of the weighted 

3 designated spot market regions, as deter4 mined by regional production; 

5 (iii) the elimination of any artificial 

6 split in the premium or discount between 

7 upland cotton with a 32 or 33 staple 

8 length due to micronaire; and 

9 (iv) a mechanism to ensure that no 

10 premium or discount is established that ex11 ceeds the premium or discount associated 

12 with a leaf grade that is 1 better than the 

13 applicable color grade. 

14 (C) DISCRETIONARY REVISIONS.—Revi15 sions under subparagraph (A) may include— 

16 (i) the use of non-spot market price 

17 data, in addition to spot market price data, 

18 that would enhance the accuracy of the 

19 price information used in determining 

20 quality adjustments under this subsection; 

21 (ii) adjustments in the premiums or 

22 discounts associated with upland cotton 

23 with a staple length of 33 or above due to 

24 micronaire with the goal of eliminating any 
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1 unnecessary artificial splits in the calcula2 tions of the premiums or discounts; and 

3 (iii) such other adjustments as the 

4 Secretary determines appropriate, after 

5 consultations conducted in accordance with 

6 paragraph (3). 

7 (3) CONSULTATION WITH PRIVATE SECTOR.— 

8 (A) PRIOR TO REVISION.—In making ad9 justments to the loan rate for cotton (including 

10 any review of the adjustments) as provided in 

11 this subsection, the Secretary shall consult with 

12 representatives of the United States cotton in13 dustry. 

14 (B) INAPPLICABILITY OF FEDERAL ADVI15 SORY COMMITTEE ACT.—The Federal Advisory 

16 Committee Act (5 U.S.C. App.) shall not apply 

17 to consultations under this subsection. 

18 (4) REVIEW OF ADJUSTMENTS.—The Secretary 

19 may review the operation of the upland cotton qual20 ity adjustments implemented pursuant to this sub21 section and may make further revisions to the ad22 ministration of the loan program for upland cotton, 

23 by— 

24 (A) revoking or revising any actions taken 

25 under paragraph (2)(B); or 
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1 (B) revoking or revising any actions taken 

2 or authorized to be taken under paragraph 

3 (2)(C). 

4 (e) RICE.—The Secretary shall not make adjust5 ments in the loan rates for long grain rice and medium 

6 grain rice, except for differences in grade and quality (in7 cluding milling yields). 

8 Subtitle C—Sugar 

9 SEC. 1301. SUGAR PROGRAM. 

10 (a) CONTINUATION OF CURRENT PROGRAM AND

11 LOAN RATES.— 

12 (1) SUGARCANE.—Section 156(a)(5) of the 

13 Federal Agriculture Improvement and Reform Act of 

14 1996 (7 U.S.C. 7272(a)(5)) is amended by striking 

15 ‘‘the 2012 crop year’’ and inserting ‘‘each of the 

16 2012 through 2017 crop years’’. 

17 (2) SUGAR BEETS.—Section 156(b)(2) of the 

18 Federal Agriculture Improvement and Reform Act of 

19 1996 (7 U.S.C. 7272(b)(2)) is amended by striking 

20 ‘‘2012’’ and inserting ‘‘2017’’. 

21 (3) EFFECTIVE PERIOD.—Section 156(i) of the 

22 Federal Agriculture Improvement and Reform Act of 

23 1996 (7 U.S.C. 7272(i)) is amended by striking 

24 ‘‘2012’’ and inserting ‘‘2017’’. 
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1 (b) FLEXIBLE MARKETING ALLOTMENTS FOR

2 SUGAR.— 

3 (1) SUGAR ESTIMATES.—Section 359b(a)(1) of 

4 the Agricultural Adjustment Act of 1938 (7 U.S.C. 

5 1359bb(a)(1)) is amended by striking ‘‘2012’’ and 

6 inserting ‘‘2017’’. 

7 (2) SUGAR IMPORT QUOTA ADJUSTMENT

8 DATE.—Section 359k(b) of the Agricultural Adjust9 ment Act of 1938 (7 U.S.C. 1359kk(b)) is amend10 ed— 

11 (A) by striking ‘‘APRIL 1’’ each place it ap12 pears and inserting ‘‘FEBRUARY 1’’; and 

13 (B) by striking ‘‘April 1’’ each place it ap14 pears and inserting ‘‘February 1’’. 

15 (3) EFFECTIVE PERIOD.—Section 359l(a) of 

16 the Agricultural Adjustment Act of 1938 (7 U.S.C. 

17 1359ll(a)) is amended by striking ‘‘2012’’ and in18 serting ‘‘2017’’. 

19 Subtitle D—Dairy 

20 PART I—DAIRY PRODUCTION MARGIN PROTEC21 TION AND DAIRY MARKET STABILIZATION 

22 PROGRAMS 

23 SEC. 1401. DEFINITIONS. 

24 In this part: 
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1 (1) ACTUAL DAIRY PRODUCTION MARGIN.—The 

2 term ‘‘actual dairy production margin’’ means the 

3 difference between the all-milk price and the average 

4 feed cost, as calculated under section 1402. 

5 (2) ALL-MILK PRICE.—The term ‘‘all-milk 

6 price’’ means the average price received, per hun7 dredweight of milk, by dairy operations for all milk 

8 sold to plants and dealers in the United States, as 

9 determined by the Secretary. 

10 (3) ANNUAL PRODUCTION HISTORY.—The term 

11 ‘‘annual production history’’ means the production 

12 history determined for a participating dairy oper13 ation under section 1413(b) whenever the partici14 pating dairy operation purchases supplemental pro15 duction margin protection. 

16 (4) AVERAGE FEED COST.—The term ‘‘average 

17 feed cost’’ means the average cost of feed used by 

18 a dairy operation to produce a hundredweight of 

19 milk, determined under section 1402 using the sum 

20 of the following: 

21 (A) The product determined by multiplying 

22 1.0728 by the price of corn per bushel. 

23 (B) The product determined by multiplying 

24 0.00735 by the price of soybean meal per ton. 
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1 (C) The product determined by multiplying 

2 0.0137 by the price of alfalfa hay per ton. 

3 (5) BASIC PRODUCTION HISTORY.—The term 

4 ‘‘basic production history’’ means the production 

5 history determined for a participating dairy oper6 ation under section 1413(a) for provision of basic 

7 production margin protection. 

8 (6) CONSECUTIVE 2-MONTH PERIOD.—The term 

9 ‘‘consecutive 2-month period’’ refers to the 2-month 

10 period consisting of the months of January and Feb11 ruary, March and April, May and June, July and 

12 August, September and October, or November and 

13 December, respectively. 

14 (7) DAIRY OPERATION.— 

15 (A) IN GENERAL.—The term ‘‘dairy oper16 ation’’ means, as determined by the Secretary, 

17 1 or more dairy producers that produce and 

18 market milk as a single dairy operation in 

19 which each dairy producer— 

20 (i) shares in the pooling of resources 

21 and a common ownership structure; 

22 (ii) is at risk in the production of milk 

23 on the dairy operation; and 
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1 (iii) contributes land, labor, manage2 ment, equipment, or capital to the dairy 

3 operation. 

4 (B) ADDITIONAL OWNERSHIP STRUC5 TURES.—The Secretary shall determine addi6 tional ownership structures to be covered by the 

7 definition of dairy operation. 

8 (8) HANDLER.— 

9 (A) IN GENERAL.—The term ‘‘handler’’ 

10 means the initial individual or entity making 

11 payment to a dairy operation for milk produced 

12 in the United States and marketed for commer13 cial use. 

14 (B) PRODUCER-HANDLER.—The term in15 cludes a ‘‘producer-handler’’ when the producer 

16 satisfies the definition in subparagraph (A). 

17 (9) PARTICIPATING DAIRY OPERATION.—The 

18 term ‘‘participating dairy operation’’ means a dairy 

19 operation that— 

20 (A) signs up under section 1412 to partici21 pate in the production margin protection pro22 gram under subpart A; and 

23 (B) as a result, also participates in the sta24 bilization program under subpart B. 
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1 (10) PRODUCTION MARGIN PROTECTION PRO2 GRAM.—The term ‘‘production margin protection 

3 program’’ means the dairy production margin pro4 tection program required by subpart A. 

5 (11) SECRETARY.—The term ‘‘Secretary’’ 

6 means the Secretary of Agriculture. 

7 (12) STABILIZATION PROGRAM.—The term 

8 ‘‘stabilization program’’ means the dairy market sta9 bilization program required by subpart B for all par10 ticipating dairy operations. 

11 (13) STABILIZATION PROGRAM BASE.—The 

12 term ‘‘stabilization program base’’, with respect to a 

13 participating dairy operation, means the stabilization 

14 program base calculated for the participating dairy 

15 operation under section 1431(b). 

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

17 States’’, in a geographical sense, means the 50 

18 States, the District of Columbia, American Samoa, 

19 Guam, the Commonwealth of the Northern Mariana 

20 Islands, the Commonwealth of Puerto Rico, the Vir21 gin Islands of the United States, and any other ter22 ritory or possession of the United States. 
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1 SEC. 1402. CALCULATION OF AVERAGE FEED COST AND AC2 TUAL DAIRY PRODUCTION MARGINS. 

3 (a) CALCULATION OF AVERAGE FEED COST.—The 

4 Secretary shall calculate the national average feed cost for 

5 each month using the following data: 

6 (1) The price of corn for a month shall be the 

7 price received during that month by farmers in the 

8 United States for corn, as reported in the monthly 

9 Agricultural Prices report by the Secretary. 

10 (2) The price of soybean meal for a month shall 

11 be the central Illinois price for soybean meal, as re12 ported in the Market News–Monthly Soybean Meal 

13 Price Report by the Secretary. 

14 (3) The price of alfalfa hay for a month shall 

15 be the price received during that month by farmers 

16 in the United States for alfalfa hay, as reported in 

17 the monthly Agricultural Prices report by the Sec18 retary. 

19 (b) CALCULATION OF ACTUAL DAIRY PRODUCTION

20 MARGINS.— 

21 (1) PRODUCTION MARGIN PROTECTION PRO22 GRAM.—For use in the production margin protection 

23 program under subpart A, the Secretary shall cal24 culate the actual dairy production margin for each 

25 consecutive 2-month period by subtracting— 
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1 (A) the average feed cost for that consecu2 tive 2-month period, determined in accordance 

3 with subsection (a); from 

4 (B) the all-milk price for that consecutive 

5 2-month period. 

6 (2) STABILIZATION PROGRAM.—For use in the 

7 stabilization program under subpart B, the Sec8 retary shall calculate each month the actual dairy 

9 production margin for the preceding month by sub10 tracting— 

11 (A) the average feed cost for that pre12 ceding month, determined in accordance with 

13 subsection (a); from 

14 (B) the all-milk price for that preceding 

15 month. 

16 (3) TIME FOR CALCULATIONS.—The calcula17 tions required by paragraphs (1) and (2) shall be 

18 made as soon as practicable using the full month 

19 price of the applicable reference month. 

20 Subpart A—Dairy Production Margin Protection 

21 Program 

22 SEC. 1411. ESTABLISHMENT OF DAIRY PRODUCTION MAR23 GIN PROTECTION PROGRAM. 

24 Effective not later than 120 days after the effective 

25 date of this subtitle, the Secretary shall establish and ad-
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1 minister a dairy production margin protection program 

2 under which participating dairy operations are paid— 

3 (1) basic production margin protection program 

4 payments under section 1414 when actual dairy pro5 duction margins are less than the threshold levels 

6 for such payments; and 

7 (2) supplemental production margin protection 

8 program payments under section 1415 if purchased 

9 by a participating dairy operation. 

10 SEC. 1412. PARTICIPATION OF DAIRY OPERATIONS IN PRO11 DUCTION MARGIN PROTECTION PROGRAM. 

12 (a) ELIGIBILITY.—All dairy operations in the United 

13 States shall be eligible to participate in the production 

14 margin protection program, except that a participating 

15 dairy operation shall be required to register with the Sec16 retary before the participating dairy operation may re17 ceive— 

18 (1) basic production margin protection program 

19 payments under section 1414; and 

20 (2) if the participating dairy operation pur21 chases supplemental production margin protection 

22 under section 1415, supplemental production margin 

23 protection program payments under such section. 

24 (b) REGISTRATION PROCESS.— 
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1 (1) IN GENERAL.—The Secretary shall specify 

2 the manner and form by which a participating dairy 

3 operation may register to participate in the produc4 tion margin protection program. 

5 (2) TREATMENT OF MULTIPRODUCER DAIRY

6 OPERATIONS.—If a participating dairy operation is 

7 operated by more than 1 dairy producer, all of the 

8 dairy producers of the participating dairy operation 

9 shall be treated as a single dairy operation for pur10 poses of— 

11 (A) registration to receive basic production 

12 margin protection and election to purchase sup13 plemental production margin protection; 

14 (B) payment of the participation fee under 

15 subsection (d) and producer premiums under 

16 section 1415; and 

17 (C) participation in the stabilization pro18 gram under subtitle B. 

19 (3) TREATMENT OF PRODUCERS WITH MUL20 TIPLE DAIRY OPERATIONS.—If a dairy producer op21 erates 2 or more dairy operations, each dairy oper22 ation of the producer shall separately register to re23 ceive basic production margin protection and pur24 chase supplemental production margin protection 
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1 and only those dairy operations so registered shall 

2 be covered by the stabilization program. 

3 (c) TIME FOR REGISTRATION.— 

4 (1) EXISTING DAIRY OPERATIONS.—During the 

5 15-month period beginning on the date of the initi6 ation of the registration period for the production 

7 margin protection program, a dairy operation that is 

8 actively engaged as of such date may register with 

9 the Secretary— 

10 (A) to receive basic production margin pro11 tection; and 

12 (B) if the dairy operation elects, to pur13 chase supplemental production margin protec14 tion. 

15 (2) NEW ENTRANTS.—A dairy producer that 

16 has no existing interest in a dairy operation as of 

17 the date of the initiation of the registration period 

18 for the production margin protection program, but 

19 that, after such date, establishes a new dairy oper20 ation, may register with the Secretary during the 1- 

21 year period beginning on the date on which the dairy 

22 operation first markets milk commercially— 

23 (A) to receive basic production margin pro24 tection; and 
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1 (B) if the dairy operation elects, to pur2 chase supplemental production margin protec3 tion. 

4 (d) TRANSITION FROM MILC TO PRODUCTION MAR5 GIN PROTECTION.— 

6 (1) DEFINITION OF TRANSITION PERIOD.—In 

7 this subsection, the term ‘‘transition period’’ means 

8 the period during which the milk income loss pro9 gram established under section 1506 of the Food, 

10 Conservation, and Energy Act of 2008 (7 U.S.C. 

11 8773) and the production margin protection pro12 gram under this subtitle are both in existence. 

13 (2) NOTICE OF AVAILABILITY.—Not later than 

14 30 days after the date of enactment of this Act, the 

15 Secretary shall publish a notice in the Federal Reg16 ister to inform dairy operations of the availability of 

17 basic production margin protection and supple18 mental production margin protection, including the 

19 terms of the protection and information about the 

20 option of dairy operations during the transition pe21 riod to make an election described in paragraph (3). 

22 (3) ELECTION.—Except as provided in para23 graph (4), a dairy operation may elect to participate 

24 in either the milk income loss program established 

25 under section 1506 of the Food, Conservation, and 
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1 Energy Act of 2008 (7 U.S.C. 8773) or the produc2 tion margin protection program under this subtitle 

3 for the duration of the transition period. 

4 (4) TRANSFER TO PRODUCTION MARGIN PRO5 TECTION.—A dairy operation that elects to partici6 pate in the milk income loss program established 

7 under section 1506 of the Food, Conservation, and 

8 Energy Act of 2008 (7 U.S.C. 8773) during the 

9 transition period may, at any time, make a perma10 nent transfer to the production margin protection 

11 program. 

12 (e) ADMINISTRATION FEE.— 

13 (1) ADMINISTRATION FEE REQUIRED.—Except 

14 as provided in paragraph (5), a participating dairy 

15 operation shall— 

16 (A) pay an administration fee under this 

17 subsection to register to participate in the pro18 duction margin protection program; and 

19 (B) pay the administration fee annually 

20 thereafter to continue to participate in the pro21 duction margin protection program. 

22 (2) FEE AMOUNT.—The administration fee for 

23 a participating dairy operation for a calendar year 

24 shall be based on the pounds of milk (in millions) 
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1 marketed by the participating dairy operation in the 

2 previous calendar year, as follows: 

Pounds Marketed (in millions) Administration Fee 

less than 1 $100 

1 to 5 $250 

more than 5 to 10 $350 

more than 10 to 40 $1,000 

more than 40 $2,500 

3 (3) DEPOSIT OF FEES.—All administration fees 

4 collected under this subsection shall be credited to 

5 the fund or account used to cover the costs incurred 

6 to administer the production margin protection pro7 gram and the stabilization program and shall be 

8 available to the Secretary, without further appro9 priation and until expended, for use or transfer as 

10 provided in paragraph (4). 

11 (4) USE OF FEES.—The Secretary shall use ad12 ministration fees collected under this subsection— 

13 (A) to cover administrative costs of the 

14 production margin protection program and sta15 bilization program; and 

16 (B) to cover costs of the Department of 

17 Agriculture relating to reporting of dairy mar18 ket news, carrying out the amendments made 

19 by section 1476, and carrying out section 273 

20 of the Agricultural Marketing Act of 1946 (7 
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1 U.S.C. 1637b)), to the extent funds remain 

2 available after operation of subparagraph (A). 

3 (5) WAIVER.—The Secretary shall waive or re4 duce the administration fee required under para5 graph (1) in the case of a limited-resource dairy op6 eration, as defined by the Secretary. 

7 (f) LIMITATION.—A dairy operation may only partici8 pate in the production margin protection program or the 

9 livestock gross margin for dairy program under the Fed10 eral Crop Insurance Act (7 U.S.C. 1501 et seq.), but not 

11 both. 

12 SEC. 1413. PRODUCTION HISTORY OF PARTICIPATING 

13 DAIRY OPERATIONS. 

14 (a) PRODUCTION HISTORY FOR BASIC PRODUCTION

15 MARGIN PROTECTION.— 

16 (1) DETERMINATION REQUIRED.—For purposes 

17 of providing basic production margin protection, the 

18 Secretary shall determine the basic production his19 tory of a participating dairy operation. 

20 (2) CALCULATION.—Except as provided in 

21 paragraph (3), the basic production history of a par22 ticipating dairy operation for basic production mar23 gin protection is equal to the highest annual milk 

24 marketings of the participating dairy operation dur25 ing any 1 of the 3 calendar years immediately pre-
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1 ceding the calendar year in which the participating 

2 dairy operation first signed up to participate in the 

3 production margin protection program. 

4 (3) ELECTION BY NEW DAIRY OPERATIONS.—In 

5 the case of a participating dairy operation that has 

6 been in operation for less than a year, the partici7 pating dairy operation shall elect 1 of the following 

8 methods for the Secretary to determine the basic 

9 production history of the participating dairy oper10 ation: 

11 (A) The volume of the actual milk mar12 ketings for the months the participating dairy 

13 operation has been in operation extrapolated to 

14 a yearly amount. 

15 (B) An estimate of the actual milk mar16 ketings of the participating dairy operation 

17 based on the herd size of the participating dairy 

18 operation relative to the national rolling herd 

19 average data published by the Secretary. 

20 (4) NO CHANGE IN PRODUCTION HISTORY FOR

21 BASIC PRODUCTION MARGIN PROTECTION.—Once 

22 the basic production history of a participating dairy 

23 operation is determined under paragraph (2) or (3), 

24 the basic production history shall not be subse25 quently changed for purposes of determining the 
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1 amount of any basic production margin protection 

2 payments for the participating dairy operation made 

3 under section 1414. 

4 (b) ANNUAL PRODUCTION HISTORY FOR SUPPLE5 MENTAL PRODUCTION MARGIN PROTECTION.— 

6 (1) DETERMINATION REQUIRED.—For purposes 

7 of providing supplemental production margin protec8 tion for a participating dairy operation that pur9 chases supplemental production margin protection 

10 for a year under section 1415, the Secretary shall 

11 determine the annual production history of the par12 ticipating dairy operation under paragraph (2). 

13 (2) CALCULATION.—The annual production his14 tory of a participating dairy operation for a year is 

15 equal to the actual milk marketings of the partici16 pating dairy operation during the preceding calendar 

17 year. 

18 (3) NEW DAIRY OPERATIONS.—Subsection 

19 (a)(3) shall apply with respect to determining the 

20 annual production history of a participating dairy 

21 operation that has been in operation for less than a 

22 year. 

23 (c) REQUIRED INFORMATION.—A participating dairy 

24 operation shall provide all information that the Secretary 

25 may require in order to establish— 
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1 (1) the basic production history of the partici2 pating dairy operation under subsection (a); and 

3 (2) the production history of the participating 

4 dairy operation whenever the participating dairy op5 eration purchases supplemental production margin 

6 protection under section 1415. 

7 (d) TRANSFER OF PRODUCTION HISTORIES.— 

8 (1) TRANSFER BY SALE OR LEASE.—In promul9 gating the rules to initiate the production margin 

10 protection program, the Secretary shall specify the 

11 conditions under which and the manner by which the 

12 production history of a participating dairy operation 

13 may be transferred by sale or lease. 

14 (2) COVERAGE LEVEL.— 

15 (A) BASIC PRODUCTION MARGIN PROTEC16 TION.—A purchaser or lessee to whom the Sec17 retary transfers a basic production history 

18 under this subsection shall not obtain a dif19 ferent level of basic production margin protec20 tion than the basic production margin protec21 tion coverage held by the seller or lessor from 

22 whom the transfer was obtained. 

23 (B) SUPPLEMENTAL PRODUCTION MARGIN

24 PROTECTION.—A purchaser or lessee to whom 

25 the Secretary transfers an annual production 
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1 history under this subsection shall not obtain a 

2 different level of supplemental production mar3 gin protection coverage than the supplemental 

4 production margin protection coverage in effect 

5 for the seller or lessor from whom the transfer 

6 was obtained for the calendar year in which the 

7 transfer was made. 

8 (e) MOVEMENT AND TRANSFER OF PRODUCTION

9 HISTORY.— 

10 (1) MOVEMENT AND TRANSFER AUTHOR11 IZED.—Subject to paragraph (2), if a participating 

12 dairy operation moves from 1 location to another lo13 cation, the participating dairy operation may trans14 fer the basic production history and annual produc15 tion history associated with the participating dairy 

16 operation. 

17 (2) NOTIFICATION REQUIREMENT.—A partici18 pating dairy operation shall notify the Secretary of 

19 any move of a participating dairy operation under 

20 paragraph (1). 

21 (3) SUBSEQUENT OCCUPATION OF VACATED LO22 CATION.—A party subsequently occupying a partici23 pating dairy operation location vacated as described 

24 in paragraph (1) shall have no interest in the basic 

25 production history or annual production history pre-
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1 viously associated with the participating dairy oper2 ation at such location. 

3 SEC. 1414. BASIC PRODUCTION MARGIN PROTECTION. 

4 (a) PAYMENT THRESHOLD.—The Secretary shall 

5 make a payment to participating dairy operations in ac6 cordance with subsection (b) whenever the average actual 

7 dairy production margin for a consecutive 2-month period 

8 is less than $4.00 per hundredweight of milk. 

9 (b) BASIC PRODUCTION MARGIN PROTECTION PAY10 MENT.—The basic production margin protection payment 

11 for a participating dairy operation for a consecutive 2- 

12 month period shall be equal to the product obtained by 

13 multiplying— 

14 (1) the difference between the average actual 

15 dairy production margin for the consecutive 2-month 

16 period and $4.00, except that, if the difference is 

17 more than $4.00, the Secretary shall use $4.00; by 

18 (2) the lesser of— 

19 (A) 80 percent of the production history of 

20 the participating dairy operation, divided by 6; 

21 or 

22 (B) the actual quantity of milk marketed 

23 by the participating dairy operation during the 

24 consecutive 2-month period. 
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1 SEC. 1415. SUPPLEMENTAL PRODUCTION MARGIN PROTEC2 TION. 

3 (a) ELECTION OF SUPPLEMENTAL PRODUCTION

4 MARGIN PROTECTION.—A participating dairy operation 

5 may annually purchase supplemental production margin 

6 protection to protect, during the calendar year for which 

7 purchased, a higher level of the income of a participating 

8 dairy operation than the income level guaranteed by basic 

9 production margin protection under section 1414. 

10 (b) SELECTION OF PAYMENT THRESHOLD.—A par11 ticipating dairy operation purchasing supplemental pro12 duction margin protection for a year shall elect a coverage 

13 level that is higher, in any increment of $0.50, than the 

14 payment threshold for basic production margin protection 

15 specified in section 1414(a), but not to exceed $8.00. 

16 (c) COVERAGE PERCENTAGE.—A participating dairy 

17 operation purchasing supplemental production margin 

18 protection for a year shall elect a percentage of coverage 

19 equal to not more than 90 percent, nor less than 25 per20 cent, of the annual production history of the participating 

21 dairy operation. 

22 (d) PREMIUMS FOR SUPPLEMENTAL PRODUCTION

23 MARGIN PROTECTION.— 

24 (1) PREMIUMS REQUIRED.—A participating 

25 dairy operation that purchases supplemental produc-
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1 tion margin protection shall pay an annual premium 

2 equal to the product obtained by multiplying— 

3 (A) the coverage percentage elected by the 

4 participating dairy operation under subsection 

5 (c); 

6 (B) the annual production history of the 

7 participating dairy operation; and 

8 (C) the premium per hundredweight of 

9 milk, as specified in the applicable table under 

10 paragraph (2) or (3). 

11 (2) PREMIUM PER HUNDREDWEIGHT FOR FIRST

12 4 MILLION POUNDS OF PRODUCTION.—For the first 

13 4,000,000 pounds of milk marketings included in 

14 the annual production history of a participating 

15 dairy operation, the premium per hundredweight 

16 corresponding to each coverage level specified in the 

17 following table is as follows: 

Coverage Level Premium per Cwt. 

$4.50 $0.01 

$5.00 $0.02 

$5.50 $0.035 

$6.00 $0.045 

$6.50 $0.09 

$7.00 $0.40 

$7.50 $0.60 

$8.00 $0.95 

18 (3) PREMIUM PER HUNDREDWEIGHT FOR PRO19 DUCTION IN EXCESS OF 4 MILLION POUNDS.—For 

20 milk marketings in excess of 4,000,000 pounds in-
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1 cluded in the annual production history of a partici2 pating dairy operation, the premium per hundred3 weight corresponding to each coverage level is as fol4 lows: 

Coverage Level Premium per Cwt. 

$4.50 $0.02 

$5.00 $0.04 

$5.50 $0.10 

$6.00 $0.15 

$6.50 $0.29 

$7.00 $0.62 

$7.50 $0.83 

$8.00 $1.06 

5 (4) TIME FOR PAYMENT.—In promulgating the 

6 rules to initiate the production margin protection 

7 program, the Secretary shall provide more than 1 

8 method by which a participating dairy operation that 

9 purchases supplemental production margin protec10 tion for a calendar year may pay the premium under 

11 this subsection for that year in any manner that 

12 maximizes participating dairy operation payment 

13 flexibility and program integrity. 

14 (e) PREMIUM OBLIGATIONS.— 

15 (1) PRO-RATION OF PREMIUM FOR NEW DAIRY

16 OPERATIONS.—A participating dairy operation de17 scribed in section 1412(c)(2) that purchases supple18 mental production margin protection for a calendar 

19 year after the start of the calendar year shall pay 

20 a pro-rated premium for that calendar year based on 
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1 the portion of the calendar year for which the par2 ticipating dairy operation purchases the coverage. 

3 (2) LEGAL OBLIGATION.—A participating dairy 

4 operation that purchases supplemental production 

5 margin protection for a calendar year shall be legally 

6 obligated to pay the applicable premium for that cal7 endar year, except that the Secretary may waive 

8 that obligation, under terms and conditions deter9 mined by the Secretary, for 1 or more producers in 

10 any participating dairy operation in the case of 

11 death, retirement, permanent dissolution of a par12 ticipating dairy operation, or other circumstances as 

13 the Secretary considers appropriate to ensure the in14 tegrity of the program. 

15 (f) SUPPLEMENTAL PAYMENT THRESHOLD.—A par16 ticipating dairy operation with supplemental production 

17 margin protection shall receive a supplemental production 

18 margin protection payment whenever the average actual 

19 dairy production margin for a consecutive 2-month period 

20 is less than the coverage level threshold selected by the 

21 participating dairy operation under subsection (b). 

22 (g) SUPPLEMENTAL PRODUCTION MARGIN PROTEC23 TION PAYMENTS.— 

24 (1) IN GENERAL.—The supplemental produc25 tion margin protection payment for a participating 
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1 dairy operation is in addition to the basic production 

2 margin protection payment. 

3 (2) AMOUNT OF PAYMENT.—The supplemental 

4 production margin protection payment for the par5 ticipating dairy operation shall be determined as fol6 lows: 

7 (A) The Secretary shall calculate the dif8 ference between the coverage level threshold se9 lected by the participating dairy operation 

10 under subsection (b) and the greater of— 

11 (i) the average actual dairy production 

12 margin for the consecutive 2-month period; 

13 or 

14 (ii) $4.00. 

15 (B) The amount determined under sub16 paragraph (A) shall be multiplied by the per17 centage selected by the participating dairy oper18 ation under subsection (c) and by the lesser of 

19 the following: 

20 (i) The annual production history of 

21 the participating dairy operation, divided 

22 by 6. 

23 (ii) The actual amount of milk mar24 keted by the participating dairy operation 

25 during the consecutive 2-month period. 
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1 SEC. 1416. EFFECT OF FAILURE TO PAY ADMINISTRATION 

2 FEES OR PREMIUMS. 

3 (a) LOSS OF BENEFITS.—A participating dairy oper4 ation that fails to pay the required administration fee 

5 under section 1412 or is in arrears on premium payments 

6 for supplemental production margin protection under sec7 tion 1415— 

8 (1) remains legally obligated to pay the admin9 istration fee or premiums, as the case may be; and 

10 (2) may not receive basic production margin 

11 protection payments or supplemental production 

12 margin protection payments until the fees or pre13 miums are fully paid. 

14 (b) ENFORCEMENT.—The Secretary may take such 

15 action as necessary to collect administration fees and pre16 mium payments for supplemental production margin pro17 tection. 

18 Subpart B—Dairy Market Stabilization Program 

19 SEC. 1431. ESTABLISHMENT OF DAIRY MARKET STABILIZA20 TION PROGRAM. 

21 (a) PROGRAM REQUIRED; PURPOSE.—Effective not 

22 later than 120 days after the effective date of this subtitle, 

23 the Secretary shall establish and administer a dairy mar24 ket stabilization program applicable to participating dairy 

25 operations for the purpose of assisting in balancing the 
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1 supply of milk with demand when participating dairy oper2 ations are experiencing low or negative operating margins. 

3 (b) ELECTION OF STABILIZATION PROGRAM BASE

4 CALCULATION METHOD.— 

5 (1) ELECTION.—When a dairy operation signs 

6 up under section 1412 to participate in the produc7 tion margin protection program, the dairy operation 

8 shall inform the Secretary of the method by which 

9 the stabilization program base for the participating 

10 dairy operation will be calculated under paragraph 

11 (3). 

12 (2) CHANGE IN CALCULATION METHOD.—A 

13 participating dairy operation may change the sta14 bilization program base calculation method to be 

15 used for a calendar year by notifying the Secretary 

16 of the change not later than a date determined by 

17 the Secretary. 

18 (3) CALCULATION METHODS.—A participating 

19 dairy operation may elect either of the following 

20 methods for calculation of the stabilization program 

21 base for the participating dairy operation: 

22 (A) The volume of the average monthly 

23 milk marketings of the participating dairy oper24 ation for the 3 months immediately preceding 
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1 the announcement by the Secretary that the 

2 stabilization program will become effective. 

3 (B) The volume of the monthly milk mar4 ketings of the participating dairy operation for 

5 the same month in the preceding year as the 

6 month for which the Secretary has announced 

7 the stabilization program will become effective. 

8 SEC. 1432. THRESHOLD FOR IMPLEMENTATION AND RE9 DUCTION IN DAIRY PAYMENTS. 

10 (a) WHEN STABILIZATION PROGRAM REQUIRED.— 

11 Except as provided in subsection (b), the Secretary shall 

12 announce that the stabilization program is in effect and 

13 order reduced payments by handlers to participating dairy 

14 operations that exceed the applicable percentage of the 

15 participating dairy operation’s stabilization program base 

16 whenever— 

17 (1) the actual dairy production margin has been 

18 $6.00 or less per hundredweight of milk for each of 

19 the immediately preceding 2 months; or 

20 (2) the actual dairy production margin has been 

21 $4.00 or less per hundredweight of milk for the im22 mediately preceding month. 

23 (b) EXCEPTION.—If any of the conditions described 

24 in section 1436(b) have been met during the 2-month pe25 riod immediately preceding the month in which the an-
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1 nouncement under subsection (a) would otherwise be made 

2 by the Secretary in the absence of this exception, the Sec3 retary shall— 

4 (1) suspend the stabilization program; 

5 (2) refrain from making the announcement 

6 under subsection (a) to implement order the sta7 bilization payment; or 

8 (3) order reduced payments. 

9 (c) EFFECTIVE DATE FOR IMPLEMENTATION OF

10 PAYMENT REDUCTIONS.—Reductions in dairy payments 

11 shall commence beginning on the first day of the month 

12 immediately following the date of the announcement by 

13 the Secretary under subsection (a). 

14 SEC. 1433. MILK MARKETINGS INFORMATION. 

15 (a) COLLECTION OF MILK MARKETING DATA.—The 

16 Secretary shall establish, by regulation, a process to collect 

17 from participating dairy operations and handlers such in18 formation that the Secretary considers necessary for each 

19 month during which the stabilization program is in effect. 

20 (b) REDUCE REGULATORY BURDEN.—When imple21 menting the process under subsection (a), the Secretary 

22 shall minimize the regulatory burden on participating 

23 dairy operations and handlers. 
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1 SEC. 1434. CALCULATION AND COLLECTION OF REDUCED 

2 DAIRY OPERATION PAYMENTS. 

3 (a) REDUCED PARTICIPATING DAIRY OPERATION

4 PAYMENTS REQUIRED.—During any month in which pay5 ment reductions are in effect under the stabilization pro6 gram, each handler shall reduce payments to each partici7 pating dairy operation from whom the handler receives 

8 milk. 

9 (b) REDUCTIONS BASED ON ACTUAL DAIRY PRO10 DUCTION MARGIN.— 

11 (1) REDUCTION REQUIREMENT 1.—If the Sec12 retary determines that the average actual dairy pro13 duction margin has been less than $6.00 but greater 

14 than $5.00 per hundredweight of milk for 2 consecu15 tive months, the handler shall make payments to a 

16 participating dairy operation for a month based on 

17 the greater of the following: 

18 (A) 98 percent of the stabilization program 

19 base of the participating dairy operation. 

20 (B) 94 percent of the marketings of milk 

21 for the month by the participating dairy oper22 ation. 

23 (2) REDUCTION REQUIREMENT 2.—If the Sec24 retary determines that the average actual dairy pro25 duction margin has been less than $5.00 but greater 

26 than $4.00 for 2 consecutive months, the handler 
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1 shall make payments to a participating dairy oper2 ation for a month based on the greater of the fol3 lowing: 

4 (A) 97 percent of the stabilization program 

5 base of the participating dairy operation. 

6 (B) 93 percent of the marketings of milk 

7 for the month by the participating dairy oper8 ation. 

9 (3) REDUCTION REQUIREMENT 3.—If the Sec10 retary determines that the average actual dairy pro11 duction margin has been $4.00 or less for any 1 

12 month, the handler shall make payments to a par13 ticipating dairy operation for a month based on the 

14 greater of the following: 

15 (A) 96 percent of the stabilization program 

16 base of the participating dairy operation. 

17 (B) 92 percent of the marketings of milk 

18 for the month by the participating dairy oper19 ation. 

20 (c) CONTINUATION OF REDUCTIONS.—The largest 

21 level of payment reduction required under paragraph (1), 

22 (2), or (3) of subsection (b) shall be continued for each 

23 month until the Secretary suspends the stabilization pro24 gram and terminates payment reductions in accordance 

25 with section 1436. 
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1 (d) PAYMENT REDUCTION EXCEPTION.—Notwith2 standing any preceding subsection of this section, a han3 dler shall make no payment reductions for a participating 

4 dairy operation for a month if the participating dairy oper5 ation’s milk marketings for the month are equal to or less 

6 than the percentage of the stabilization program base ap7 plicable to the participating dairy operation under para8 graph (1), (2), or (3) of subsection (b). 

9 SEC. 1435. REMITTING FUNDS TO THE SECRETARY AND USE 

10 OF FUNDS. 

11 (a) REMITTING FUNDS.—As soon as practicable after 

12 the end of each month during which payment reductions 

13 are in effect under the stabilization program, each handler 

14 shall remit to the Secretary an amount equal to the 

15 amount by which payments to participating dairy oper16 ations are reduced by the handler under section 1434. 

17 (b) DEPOSIT OF REMITTED FUNDS.—All funds re18 ceived under subsection (a) shall be available to the Sec19 retary, without further appropriation and until expended, 

20 for use or transfer as provided in subsection (c). 

21 (c) USE OF FUNDS.— 

22 (1) AVAILABILITY FOR CERTAIN COMMODITY

23 DONATIONS.—Not later than 90 days after the 

24 funds described in subsection (a) are due as deter-
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1 mined by the Secretary, the Secretary shall obligate 

2 the funds for the purpose of— 

3 (A) purchasing dairy products for donation 

4 to food banks and other programs that the Sec5 retary determines appropriate; and 

6 (B) expanding consumption and building 

7 demand for dairy products. 

8 (2) NO DUPLICATION OF EFFORT.—The Sec9 retary shall ensure that expenditures under para10 graph (1) are compatible with, and do not duplicate, 

11 programs supported by the dairy research and pro12 motion activities conducted under the Dairy Produc13 tion Stabilization Act of 1983 (7 U.S.C. 4501 et 

14 seq.). 

15 (3) ACCOUNTING.—The Secretary shall keep an 

16 accurate account of all funds expended under para17 graph (1). 

18 (d) ANNUAL REPORT.—Not later than December 31 

19 of each year that the stabilization program is in effect, 

20 the Secretary shall submit to the Committee on Agri21 culture of the House of Representatives and the Com22 mittee on Agriculture, Nutrition, and Forestry of the Sen23 ate a report that provides an accurate accounting of— 

24 (1) the funds received by the Secretary during 

25 the preceding fiscal year under subsection (a); 
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1 (2) all expenditures made by the Secretary 

2 under subsection (b) during the preceding fiscal 

3 year; and 

4 (3) the impact of the stabilization program on 

5 dairy markets. 

6 (e) ENFORCEMENT.—If a participating dairy oper7 ation or handler fails to remit or collect the amounts by 

8 which payments to participating dairy operations are re9 duced under section 1434, the participating dairy oper10 ation or handler responsible for the failure shall be liable 

11 to the Secretary for the amount that should have been 

12 remitted or collected, plus interest. In addition to the en13 forcement authorities available under section 1437, the 

14 Secretary may enforce this subsection in the courts of the 

15 United States. 

16 SEC. 1436. SUSPENSION OF REDUCED PAYMENT REQUIRE17 MENT. 

18 (a) DETERMINATION OF PRICES.—For purposes of 

19 this section: 

20 (1) The price in the United States for cheddar 

21 cheese and nonfat dry milk shall be determined by 

22 the Secretary. 

23 (2) The world price of cheddar cheese and skim 

24 milk powder shall be determined by the Secretary. 
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1 (b) SUSPENSION THRESHOLDS.—The stabilization 

2 program shall be suspended or the Secretary shall refrain 

3 from making the announcement under section 1432(a) if 

4 the Secretary determines that— 

5 (1) the actual dairy production margin is great6 er than $6.00 per hundredweight of milk for 2 con7 secutive months; 

8 (2) the actual dairy production margin is equal 

9 to or less than $6.00 (but greater than $5.00) for 

10 2 consecutive months, and during the same 2 con11 secutive months— 

12 (A) the price in the United States for 

13 cheddar cheese is equal to or greater than the 

14 world price of cheddar cheese; or 

15 (B) the price in the United States for non16 fat dry milk is equal to or greater than the 

17 world price of skim milk powder; 

18 (3) the actual dairy production margin is equal 

19 to or less than $5.00 (but greater than $4.00) for 

20 2 consecutive months, and during the same 2 con21 secutive months— 

22 (A) the price in the United States for 

23 cheddar cheese is more than 5 percent above 

24 the world price of cheddar cheese; or 
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1 (B) the price in the United States for non2 fat dry milk is more than 5 percent above the 

3 world price of skim milk powder; or 

4 (4) the actual dairy production margin is equal 

5 to or less than $4.00 for 2 consecutive months, and 

6 during the same 2 consecutive months— 

7 (A) the price in the United States for 

8 cheddar cheese is more than 7 percent above 

9 the world price of cheddar cheese; or 

10 (B) the price in the United States for non11 fat dry milk is more than 7 percent above the 

12 world price of skim milk powder. 

13 (c) IMPLEMENTATION BY HANDLERS.—Effective on 

14 the day after the date of the announcement by the Sec15 retary under subsection (b) of the suspension of the sta16 bilization program, the handler shall cease reducing pay17 ments to participating dairy operations under the sta18 bilization program. 

19 (d) CONDITION ON RESUMPTION OF STABILIZATION

20 PROGRAM.—Upon the announcement by the Secretary 

21 under subsection (b) that the stabilization program has 

22 been suspended, the stabilization program may not be im23 plemented again until, at the earliest— 
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1 (1) 2 months have passed, beginning on the 

2 first day of the month immediately following the an3 nouncement by the Secretary; and 

4 (2) the conditions of section 1432(a) are again 

5 met. 

6 SEC. 1437. ENFORCEMENT. 

7 (a) UNLAWFUL ACT.—It shall be unlawful and a vio8 lation of the this subpart for any person subject to the 

9 stabilization program to willfully fail or refuse to provide, 

10 or delay the timely reporting of, accurate information and 

11 remittance of funds to the Secretary in accordance with 

12 this subpart. 

13 (b) ORDER.—After providing notice and opportunity 

14 for a hearing to an affected person, the Secretary may 

15 issue an order against any person to cease and desist from 

16 continuing any violation of this subpart. 

17 (c) APPEAL.—An order of the Secretary under sub18 section (b) shall be final and conclusive unless an affected 

19 person files an appeal of the order of the Secretary in 

20 United States district court not later than 30 days after 

21 the date of the issuance of the order. A finding of the 

22 Secretary in the order shall be set aside only if the finding 

23 is not supported by substantial evidence. 

24 (d) NONCOMPLIANCE WITH ORDER.—If a person 

25 subject to this subpart fails to obey an order issued under 
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1 subsection (b) after the order has become final and 

2 unappealable, or after the appropriate United States dis3 trict court has entered a final judgment in favor of the 

4 Secretary, the United States may apply to the appropriate 

5 United States district court for enforcement of the order. 

6 If the court determines that the order was lawfully made 

7 and duly served and that the person violated the order, 

8 the court shall enforce the order. 

9 SEC. 1438. AUDIT REQUIREMENTS. 

10 (a) AUDITS OF DAIRY OPERATION AND HANDLER

11 COMPLIANCE.— 

12 (1) AUDITS AUTHORIZED.—If determined by 

13 the Secretary to be necessary to ensure compliance 

14 by participating dairy operations and handlers with 

15 the stabilization program, the Secretary may con16 duct periodic audits of participating dairy operations 

17 and handlers. 

18 (2) SAMPLE OF DAIRY OPERATIONS.—Any 

19 audit conducted under this subsection shall include, 

20 at a minimum, investigation of a statistically valid 

21 and random sample of participating dairy oper22 ations. 

23 (b) SUBMISSION OF RESULTS.—The Secretary shall 

24 submit the results of any audit conducted under sub25 section (a) to the Committee on Agriculture of the House 
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1 of Representatives and the Committee on Agriculture, Nu2 trition, and Forestry of the Senate and include such rec3 ommendations as the Secretary considers appropriate re4 garding the stabilization program. 

5 SEC. 1439. STUDY; REPORT. 

6 (a) IN GENERAL.—The Secretary shall direct the Of7 fice of the Chief Economist to conduct a study of the im8 pacts of the program established under section 1431(a). 

9 (b) CONSIDERATIONS.—The study conducted under 

10 subsection (a) shall consider— 

11 (1) the economic impact of the program 

12 throughout the dairy product value chain, including 

13 the impact on producers, processors, domestic cus14 tomers, export customers, actual market growth and 

15 potential market growth, farms of different sizes, 

16 and different regions and States; and 

17 (2) the impact of the program on the competi18 tiveness of the United States dairy industry in inter19 national markets. 

20 (c) REPORT.—Not later than December 1, 2016, the 

21 Office of the Chief Economist shall submit to the Com22 mittee on Agriculture of the House of Representatives and 

23 the Committee on Agriculture, Nutrition, and Forestry of 

24 the Senate a report that describes the results of the study 

25 conducted under subsection (a). 
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1 Subpart C—Administration 

2 SEC. 1451. DURATION. 

3 The production margin protection program and the 

4 stabilization program shall end on December 31, 2017. 

5 SEC. 1452. ADMINISTRATION AND ENFORCEMENT. 

6 (a) IN GENERAL.—The Secretary shall promulgate 

7 regulations to address administrative and enforcement 

8 issues involved in carrying out the production margin pro9 tection, supplemental production margin protection, and 

10 market stabilization programs. 

11 (b) RECONSTITUTION AND ELIGIBILITY ISSUES.— 

12 (1) RECONSTITUTION.—Using authorities under 

13 section 1001(f) and 1001B of the Food Security Act 

14 of 1985 (7 U.S.C. 1308(f), 1308–2), the Secretary 

15 shall promulgate regulations to prohibit a dairy pro16 ducer from reconstituting a dairy operation for the 

17 sole purpose of the dairy producer— 

18 (A) receiving basic margin protection; 

19 (B) purchasing supplemental margin pro20 tection; or 

21 (C) avoiding participation in the market 

22 stabilization program. 

23 (2) ELIGIBILITY ISSUES.—Using authorities 

24 under section 1001(f) and 1001B of the Food Secu25 rity Act of 1985 (7 U.S.C. 1308(f), 1308–2), the 

26 Secretary shall promulgate regulations— 
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1 (A) to prohibit a scheme or device; 

2 (B) to provide for equitable relief; and 

3 (C) to provide for other issues affecting eli4 gibility and liability issues. 

5 (3) ADMINISTRATIVE APPEALS.—Using authori6 ties under section 1001(h) of the Food Security Act 

7 of 1985 (7 U.S.C. 1308(h)) and subtitle H of the 

8 Department of Agriculture Reorganization Act (7 

9 U.S.C. 6991 et seq.), the Secretary shall promulgate 

10 regulations to provide for administrative appeals of 

11 decisions of the Secretary that are adverse to par12 ticipants of the programs described in subsection 

13 (a). 

14 PART II—DAIRY MARKET TRANSPARENCY 

15 SEC. 1461. DAIRY PRODUCT MANDATORY REPORTING. 

16 (a) DEFINITIONS.—Section 272(1)(A) of the Agricul17 tural Marketing Act of 1946 (7 U.S.C. 1637a(1)(A)) is 

18 amended by inserting ‘‘, or any other products that may 

19 significantly aid price discovery in the dairy markets, as 

20 determined by the Secretary’’ after ‘‘of 1937’’. 

21 (b) MANDATORY REPORTING FOR DAIRY PROD22 UCTS.—Section 273(b) of the Agricultural Marketing Act 

23 of 1946 (7 U.S.C. 1637b(b)) is amended— 

24 (1) by striking paragraph (1) and inserting the 

25 following new paragraph: 
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1 ‘‘(1) IN GENERAL.—In establishing the pro2 gram, the Secretary shall only— 

3 ‘‘(A)(i) subject to the conditions described 

4 in paragraph (2), require each manufacturer to 

5 report to the Secretary, more frequently than 

6 once per month, information concerning the 

7 price, quantity, and moisture content of dairy 

8 products sold by the manufacturer and any 

9 other product characteristics that may signifi10 cantly aid price discovery in the dairy markets, 

11 as determined by the Secretary; and 

12 ‘‘(ii) modify the format used to provide the 

13 information on the day before the date of enact14 ment of this subtitle to ensure that the infor15 mation can be readily understood by market 

16 participants; and 

17 ‘‘(B) require each manufacturer and other 

18 person storing dairy products (including dairy 

19 products in cold storage) to report to the Sec20 retary, more frequently than once per month, 

21 information on the quantity of dairy products 

22 stored.’’; and 

23 (2) in paragraph (2), by inserting ‘‘or those 

24 that may significantly aid price discovery in the 

25 dairy markets’’ after ‘‘Federal milk marketing 
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1 order’’ each place it appears in subparagraphs (A), 

2 (B), and (C). 

3 SEC. 1462. FEDERAL MILK MARKETING ORDER INFORMA4 TION. 

5 (a) INFORMATION CLEARINGHOUSE.— 

6 (1) IN GENERAL.—The Secretary shall, on be7 half of each milk marketing order issued under the 

8 Agricultural Adjustment Act (7 U.S.C. 601 et seq.), 

9 reenacted with amendments by the Agricultural 

10 Marketing Agreement Act of 1937, establish an in11 formation clearinghouse for the purposes of edu12 cating the public about the Federal milk marketing 

13 order system and any marketing order referenda, in14 cluding proposal information and timelines that shall 

15 be kept current and updated as information becomes 

16 available. 

17 (2) REQUIREMENTS.—Information under para18 graph (1) shall include— 

19 (A) information on procedures by which 

20 cooperatives vote; 

21 (B) if applicable, information on the man22 ner by which producers may cast an individual 

23 ballot; 

24 (C) in applicable, instructions on the man25 ner in which to vote online; 
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1 (D) due dates for each specific referendum; 

2 (E) the text of each referendum question 

3 under consideration; 

4 (F) a description in plain language of the 

5 question; 

6 (G) any relevant background information 

7 to the question; and 

8 (H) any other information that increases 

9 Federal milk marketing order transparency. 

10 (b) NOTIFICATION LIST FOR UPCOMING REF11 ERENDUM.—Each Federal milk marketing order shall— 

12 (1) make available the information described in 

13 subsection (b) through an Internet site; and 

14 (2) publicize the information in major agri15 culture and dairy-specific publications on upcoming 

16 referenda. 

17 (c) STUDY.— 

18 (1) IN GENERAL.—The Secretary shall conduct 

19 a study of the feasibility of establishing 2 classes of 

20 milk, a fluid class and a manufacturing class, to re21 place the 4–class system in effect on the date of en22 actment of this Act in administering Federal milk 

23 marketing orders. 

24 (2) FEDERAL MILK MARKET ORDER REVIEW

25 COMMISSION.—The Secretary may elect to use the 
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1 Federal Milk Market Order Review Commission es2 tablished under section 1509(a) of the Food, Con3 servation, and Energy Act of 2008 (Public Law 

4 110–246; 122 Stat. 1726), or documents of the 

5 Commission, to conduct all or part of the study. 

6 (3) REPORT.—Not later than 180 days after 

7 the date of enactment of this Act, the Secretary 

8 shall submit to the Committee on Agriculture of the 

9 House of Representatives and the Committee on Ag10 riculture, Nutrition, and Forestry of the Senate a 

11 report that describes the results of the study re12 quired under this subsection, including any rec13 ommendations. 

14 PART III—REPEAL OR REAUTHORIZATION OF 

15 OTHER DAIRY-RELATED PROVISIONS 

16 SEC. 1471. REPEAL OF DAIRY PRODUCT PRICE SUPPORT 

17 AND MILK INCOME LOSS CONTRACT PRO18 GRAMS. 

19 (a) REPEAL OF DAIRY PRODUCT PRICE SUPPORT

20 PROGRAM.—Section 1501 of the Food, Conservation, and 

21 Energy Act of 2008 (7 U.S.C. 8771) is repealed. 

22 (b) REPEAL OF MILK INCOME LOSS CONTRACT PRO23 GRAM.— 

24 (1) PAYMENTS UNDER MILK INCOME LOSS CON25 TRACT PROGRAM.—Section 1506(c)(3) of the Food, 
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1 Conservation, and Energy Act of 2008 (7 U.S.C. 

2 8773(c)(3)) is amended— 

3 (A) in subparagraph (A), by inserting 

4 ‘‘and’’ after the semicolon; 

5 (B) in subparagraph (B), by striking ‘‘Au6 gust 31, 2012, 45 percent; and’’ and inserting 

7 ‘‘June 30, 2013, 45 percent.’’; and 

8 (C) by striking subparagraph (C). 

9 (2) EXTENSION.—Section 1506(h)(1) of the 

10 Food, Conservation, and Energy Act of 2008 (7 

11 U.S.C. 8773(h)(1)) is amended by striking ‘‘Sep12 tember 30, 2012’’ and inserting ‘‘June 30, 2013’’. 

13 (3) REPEAL.—Effective July 1, 2013, section 

14 1506 of the Food, Conservation, and Energy Act of 

15 2008 (7 U.S.C. 8773) is repealed. 

16 SEC. 1472. REPEAL OF DAIRY EXPORT INCENTIVE PRO17 GRAM. 

18 (a) REPEAL.—Section 153 of the Food Security Act 

19 of 1985 (15 U.S.C. 713a–14) is repealed. 

20 (b) CONFORMING AMENDMENTS.—Section 902(2) of 

21 the Trade Sanctions Reform and Export Enhancement 

22 Act of 2000 (22 U.S.C. 7201(2)) is amended— 

23 (1) by striking subparagraph (D); and 

24 (2) by redesignating subparagraphs (E) and 

25 (F) as subparagraphs (D) and (E), respectively. 
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1 SEC. 1473. EXTENSION OF DAIRY FORWARD PRICING PRO2 GRAM. 

3 Section 1502(e) of the Food, Conservation, and En4 ergy Act of 2008 (7 U.S.C. 8772(e)) is amended— 

5 (1) in paragraph (1), by striking ‘‘2012’’ and 

6 inserting ‘‘2017’’; and 

7 (2) in paragraph (2), by striking ‘‘2015’’ and 

8 inserting ‘‘2020’’. 

9 SEC. 1474. EXTENSION OF DAIRY INDEMNITY PROGRAM. 

10 Section 3 of Public Law 90–484 (7 U.S.C. 450l) is 

11 amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 

12 SEC. 1475. EXTENSION OF DAIRY PROMOTION AND RE13 SEARCH PROGRAM. 

14 Section 113(e)(2) of the Dairy Production Stabiliza15 tion Act of 1983 (7 U.S.C. 4504(e)(2)) is amended by 

16 striking ‘‘2012’’ and inserting ‘‘2017’’. 

17 SEC. 1476. EXTENSION OF FEDERAL MILK MARKETING 

18 ORDER REVIEW COMMISSION. 

19 Section 1509(a) of the Food, Conservation, and En20 ergy Act of 2008 (Public Law 110–246; 122 Stat. 1726) 

21 is amended by inserting ‘‘or other funds’’ after ‘‘Subject 

22 to the availability of appropriations’’. 
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1 PART IV—FEDERAL MILK MARKETING ORDER 

2 REFORM 

3 SEC. 1481. FEDERAL MILK MARKETING ORDERS. 

4 (a) AMENDMENTS.—The Secretary shall provide an 

5 analysis on the effects of amending each Federal milk 

6 marketing order issued under section 8c of the Agricul7 tural Adjustment Act (7 U.S.C. 608c), reenacted with 

8 amendments by the Agricultural Marketing Agreement 

9 Act of 1937 (in this part referred to as a ‘‘milk marketing 

10 order’’), as required by this section. 

11 (b) USE OF END-PRODUCT PRICE FORMULAS.—In 

12 carrying out subsection (a), the Secretary shall— 

13 (1) consider replacing the use of end-product 

14 price formulas with other pricing alternatives; and 

15 (2) submit to the Committee on Agriculture of 

16 the House of Representatives and the Committee on 

17 Agriculture, Nutrition, and Forestry of the Senate a 

18 report describing the findings of the Secretary on 

19 the impact of the action considered under paragraph 

20 (1). 

21 PART V—EFFECTIVE DATE 

22 SEC. 1491. EFFECTIVE DATE. 

23 Except as otherwise provided in this subtitle, this 

24 subtitle and the amendments made by this subtitle take 

25 effect on October 1, 2012. 
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1 Subtitle E—Supplemental Agricul2 tural Disaster Assistance Pro3 grams 

4 SEC. 1501. SUPPLEMENTAL AGRICULTURAL DISASTER AS5 SISTANCE PROGRAMS. 

6 (a) DEFINITIONS.—In this section: 

7 (1) ELIGIBLE PRODUCER ON A FARM.— 

8 (A) IN GENERAL.—The term ‘‘eligible pro9 ducer on a farm’’ means an individual or entity 

10 described in subparagraph (B) that, as deter11 mined by the Secretary, assumes the production 

12 and market risks associated with the agricul13 tural production of crops or livestock. 

14 (B) DESCRIPTION.—An individual or enti15 ty referred to in subparagraph (A) is— 

16 (i) a citizen of the United States; 

17 (ii) a resident alien; 

18 (iii) a partnership of citizens of the 

19 United States; or 

20 (iv) a corporation, limited liability cor21 poration, or other farm organizational 

22 structure organized under State law. 

23 (2) FARM.— 

24 (A) IN GENERAL.—The term ‘‘farm’’ 

25 means, in relation to an eligible producer on a 
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1 farm, the total of all crop acreage in all coun2 ties that is planted or intended to be planted 

3 for harvest, for sale, or on-farm livestock feed4 ing (including native grassland intended for 

5 haying) by the eligible producer. 

6 (B) AQUACULTURE.—In the case of aqua7 culture, the term ‘‘farm’’ means, in relation to 

8 an eligible producer on a farm, all fish being 

9 produced in all counties that are intended to be 

10 harvested for sale by the eligible producer. 

11 (C) HONEY.—In the case of honey, the 

12 term ‘‘farm’’ means, in relation to an eligible 

13 producer on a farm, all bees and beehives in all 

14 counties that are intended to be harvested for 

15 a honey crop for sale by the eligible producer. 

16 (3) FARM-RAISED FISH.—The term ‘‘farm17 raised fish’’ means any aquatic species that is propa18 gated and reared in a controlled environment. 

19 (4) LIVESTOCK.—The term ‘‘livestock’’ in20 cludes— 

21 (A) cattle (including dairy cattle); 

22 (B) bison; 

23 (C) poultry; 

24 (D) sheep; 

25 (E) swine; 
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1 (F) horses; and 

2 (G) other livestock, as determined by the 

3 Secretary. 

4 (b) LIVESTOCK INDEMNITY PAYMENTS.— 

5 (1) PAYMENTS.—For each of fiscal years 2012 

6 through 2017, the Secretary shall use such sums as 

7 are necessary of the funds of the Commodity Credit 

8 Corporation to make livestock indemnity payments 

9 to eligible producers on farms that have incurred 

10 livestock death losses in excess of the normal mor11 tality, as determined by the Secretary, due to— 

12 (A) attacks by animals reintroduced into 

13 the wild by the Federal Government or pro14 tected by Federal law, including wolves; or 

15 (B) adverse weather, as determined by the 

16 Secretary, during the calendar year, including 

17 losses due to hurricanes, floods, blizzards, dis18 ease, wildfires, extreme heat, and extreme cold. 

19 (2) PAYMENT RATES.—Indemnity payments to 

20 an eligible producer on a farm under paragraph (1) 

21 shall be made at a rate of 65 percent of the market 

22 value of the applicable livestock on the day before 

23 the date of death of the livestock, as determined by 

24 the Secretary. 
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1 (3) SPECIAL RULE FOR PAYMENTS MADE DUE

2 TO DISEASE.—The Secretary shall ensure that pay3 ments made to an eligible producer under paragraph 

4 (1) are not made for the same livestock losses for 

5 which compensation is provided pursuant to section 

6 10407(d) of the Animal Health Protection Act (7 

7 U.S.C. 8306(d)). 

8 (c) LIVESTOCK FORAGE DISASTER PROGRAM.— 

9 (1) ESTABLISHMENT.—There is established a 

10 livestock forage disaster program to provide 1 source 

11 for livestock forage disaster assistance for weather12 related forage losses, as determined by the Sec13 retary, by combining— 

14 (A) the livestock forage assistance func15 tions of— 

16 (i) the noninsured crop disaster assist17 ance program established by section 196 of 

18 the Federal Agriculture Improvement and 

19 Reform Act of 1996 (7 U.S.C. 7333); and 

20 (ii) the emergency assistance for live21 stock, honey bees, and farm-raised fish 

22 program under section 531(e) of the Fed23 eral Crop Insurance Act (7 U.S.C. 

24 1531(e)) (as in existence on the day before 

25 the date of enactment of this Act); and 
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1 (B) the livestock forage disaster program 

2 under section 531(d) of the Federal Crop In3 surance Act (7 U.S.C. 1531(d)) (as in existence 

4 on the day before the date of enactment of this 

5 Act). 

6 (2) DEFINITIONS.—In this subsection: 

7 (A) COVERED LIVESTOCK.— 

8 (i) IN GENERAL.—Except as provided 

9 in clause (ii), the term ‘‘covered livestock’’ 

10 means livestock of an eligible livestock pro11 ducer that, during the 60 days prior to the 

12 beginning date of an eligible forage loss, as 

13 determined by the Secretary, the eligible 

14 livestock producer— 

15 (I) owned; 

16 (II) leased; 

17 (III) purchased; 

18 (IV) entered into a contract to 

19 purchase; 

20 (V) was a contract grower; or 

21 (VI) sold or otherwise disposed of 

22 due to an eligible forage loss during— 

23 (aa) the current production 

24 year; or 
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1 (bb) subject to paragraph 

2 (4)(B)(ii), 1 or both of the 2 pro3 duction years immediately pre4 ceding the current production 

5 year. 

6 (ii) EXCLUSION.—The term ‘‘covered 

7 livestock’’ does not include livestock that 

8 were or would have been in a feedlot, on 

9 the beginning date of the eligible forage 

10 loss, as a part of the normal business oper11 ation of the eligible livestock producer, as 

12 determined by the Secretary. 

13 (B) DROUGHT MONITOR.—The term 

14 ‘‘drought monitor’’ means a system for 

15 classifying drought severity according to a 

16 range of abnormally dry to exceptional drought, 

17 as defined by the Secretary. 

18 (C) ELIGIBLE FORAGE LOSS.—The term 

19 ‘‘eligible forage loss’’ means 1 or more forage 

20 losses that occur due to weather-related condi21 tions, including drought, flood, blizzard, hail, 

22 excessive moisture, hurricane, and fire, occur23 ring during the normal grazing period, as deter24 mined by the Secretary, if the forage— 
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1 (i) is grown on land that is native or 

2 improved pastureland with permanent veg3 etative cover; or 

4 (ii) is a crop planted specifically for 

5 the purpose of providing grazing for cov6 ered livestock of an eligible livestock pro7 ducer. 

8 (D) ELIGIBLE LIVESTOCK PRODUCER.— 

9 (i) IN GENERAL.—The term ‘‘eligible 

10 livestock producer’’ means an eligible pro11 ducer on a farm that— 

12 (I) is an owner, cash or share 

13 lessee, or contract grower of covered 

14 livestock that provides the pastureland 

15 or grazing land, including cash-leased 

16 pastureland or grazing land, for the 

17 covered livestock; 

18 (II) provides the pastureland or 

19 grazing land for covered livestock, in20 cluding cash-leased pastureland or 

21 grazing land that is physically located 

22 in a county affected by an eligible for23 age loss; 

24 (III) certifies the eligible forage 

25 loss; and 
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1 (IV) meets all other eligibility re2 quirements established under this sub3 section. 

4 (ii) EXCLUSION.—The term ‘‘eligible 

5 livestock producer’’ does not include an 

6 owner, cash or share lessee, or contract 

7 grower of livestock that rents or leases 

8 pastureland or grazing land owned by an9 other person on a rate-of-gain basis. 

10 (E) NORMAL CARRYING CAPACITY.—The 

11 term ‘‘normal carrying capacity’’, with respect 

12 to each type of grazing land or pastureland in 

13 a county, means the normal carrying capacity, 

14 as determined under paragraph (4)(D)(i), that 

15 would be expected from the grazing land or 

16 pastureland for livestock during the normal 

17 grazing period, in the absence of an eligible for18 age loss that diminishes the production of the 

19 grazing land or pastureland. 

20 (F) NORMAL GRAZING PERIOD.—The term 

21 ‘‘normal grazing period’’, with respect to a 

22 county, means the normal grazing period during 

23 the calendar year for the county, as determined 

24 under paragraph (4)(D)(i). 
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1 (3) PROGRAM.—For each of fiscal years 2012 

2 through 2017, the Secretary shall use such sums as 

3 are necessary of the funds of the Commodity Credit 

4 Corporation to provide compensation under para5 graphs (4) through (6), as determined by the Sec6 retary for eligible forage losses affecting covered live7 stock of eligible livestock producers. 

8 (4) ASSISTANCE FOR ELIGIBLE FORAGE LOSSES

9 DUE TO DROUGHT CONDITIONS.— 

10 (A) ELIGIBLE FORAGE LOSSES.— 

11 (i) IN GENERAL.—An eligible livestock 

12 producer of covered livestock may receive 

13 assistance under this paragraph for eligible 

14 forage losses that occur due to drought on 

15 land that— 

16 (I) is native or improved 

17 pastureland with permanent vegeta18 tive cover; or 

19 (II) is planted to a crop planted 

20 specifically for the purpose of pro21 viding grazing for covered livestock. 

22 (ii) EXCLUSIONS.—An eligible live23 stock producer may not receive assistance 

24 under this paragraph for eligible forage 

25 losses that occur on land used for haying 
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1 or grazing under the conservation reserve 

2 program established under subchapter B of 

3 chapter 1 of subtitle D of title XII of the 

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

5 3831 et seq.), unless the land is grassland 

6 eligible for the conservation reserve pro7 gram under section 1231(d)(2) of the Food 

8 Security Act of 1985 (16 U.S.C. 

9 3831(d)(2)) (as amended by section 2001 

10 of this Act). 

11 (B) MONTHLY PAYMENT RATE.— 

12 (i) IN GENERAL.—Except as provided 

13 in clause (ii), the payment rate for assist14 ance for 1 month under this paragraph 

15 shall, in the case of drought, be equal to 

16 60 percent of the lesser of— 

17 (I) the monthly feed cost for all 

18 covered livestock owned or leased by 

19 the eligible livestock producer, as de20 termined under subparagraph (C); or 

21 (II) the monthly feed cost cal22 culated by using the normal carrying 

23 capacity of the eligible grazing land of 

24 the eligible livestock producer. 
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1 (ii) PARTIAL COMPENSATION.—In the 

2 case of an eligible livestock producer that 

3 sold or otherwise disposed of covered live4 stock due to drought conditions in 1 or 

5 both of the 2 production years immediately 

6 preceding the current production year, as 

7 determined by the Secretary, the payment 

8 rate shall be 80 percent of the payment 

9 rate otherwise calculated in accordance 

10 with clause (i). 

11 (C) MONTHLY FEED COST.— 

12 (i) IN GENERAL.—The monthly feed 

13 cost shall equal the product obtained by 

14 multiplying— 

15 (I) 30 days; 

16 (II) a payment quantity that is 

17 equal to the feed grain equivalent, as 

18 determined under clause (ii); and 

19 (III) a payment rate that is equal 

20 to the corn price per pound, as deter21 mined under clause (iii). 

22 (ii) FEED GRAIN EQUIVALENT.—For 

23 purposes of clause (i)(II), the feed grain 

24 equivalent shall equal— 
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1 (I) in the case of an adult beef 

2 cow, 15.7 pounds of corn per day; or 

3 (II) in the case of any other type 

4 of weight of livestock, an amount de5 termined by the Secretary that rep6 resents the average number of pounds 

7 of corn per day necessary to feed the 

8 livestock. 

9 (iii) CORN PRICE PER POUND.—For 

10 purposes of clause (i)(III), the corn price 

11 per pound shall equal the quotient ob12 tained by dividing— 

13 (I) the higher of— 

14 (aa) the national average 

15 corn price per bushel for the 12- 

16 month period immediately pre17 ceding March 1 of the year for 

18 which the disaster assistance is 

19 calculated; or 

20 (bb) the national average 

21 corn price per bushel for the 24- 

22 month period immediately pre23 ceding that March 1; by 

24 (II) 56. 
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1 (D) NORMAL GRAZING PERIOD AND

2 DROUGHT MONITOR INTENSITY.— 

3 (i) FSA COUNTY COMMITTEE DETER4 MINATIONS.— 

5 (I) IN GENERAL.—The Secretary 

6 shall determine the normal carrying 

7 capacity and normal grazing period 

8 for each type of grazing land or 

9 pastureland in the county served by 

10 the applicable Farm Service Agency 

11 committee. 

12 (II) CHANGES.—No change to 

13 the normal carrying capacity or nor14 mal grazing period established for a 

15 county under subclause (I) shall be 

16 made unless the change is requested 

17 by the appropriate State and county 

18 Farm Service Agency committees. 

19 (ii) DROUGHT INTENSITY.— 

20 (I) D2.—An eligible livestock 

21 producer that owns or leases grazing 

22 land or pastureland that is physically 

23 located in a county that is rated by 

24 the U.S. Drought Monitor as having a 

25 D2 (severe drought) intensity in any 
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1 area of the county for at least 8 con2 secutive weeks during the normal 

3 grazing period for the county, as de4 termined by the Secretary, shall be el5 igible to receive assistance under this 

6 paragraph in an amount equal to 1 

7 monthly payment using the monthly 

8 payment rate determined under sub9 paragraph (B). 

10 (II) D3.—An eligible livestock 

11 producer that owns or leases grazing 

12 land or pastureland that is physically 

13 located in a county that is rated by 

14 the U.S. Drought Monitor as having 

15 at least a D3 (extreme drought) in16 tensity in any area of the county at 

17 any time during the normal grazing 

18 period for the county, as determined 

19 by the Secretary, shall be eligible to 

20 receive assistance under this para21 graph— 

22 (aa) in an amount equal to 

23 3 monthly payments using the 

24 monthly payment rate deter25 mined under subparagraph (B); 
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1 (bb) if the county is rated as 

2 having a D3 (extreme drought) 

3 intensity in any area of the coun4 ty for at least 4 weeks during the 

5 normal grazing period for the 

6 county, or is rated as having a 

7 D4 (exceptional drought) inten8 sity in any area of the county at 

9 any time during the normal graz10 ing period, in an amount equal to 

11 4 monthly payments using the 

12 monthly payment rate deter13 mined under subparagraph (B); 

14 or 

15 (cc) if the county is rated as 

16 having a D4 (exceptional 

17 drought) intensity in any area of 

18 the county for at least 4 weeks 

19 during the normal grazing pe20 riod, in an amount equal to 5 

21 monthly payments using the 

22 monthly rate determined under 

23 subparagraph (B). 

24 (iii) ANNUAL PAYMENT BASED ON

25 DROUGHT CONDITIONS DETERMINED BY
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1 MEANS OTHER THAN THE U.S. DROUGHT

2 MONITOR.— 

3 (I) IN GENERAL.—An eligible 

4 livestock producer that owns grazing 

5 land or pastureland that is physically 

6 located in a county that has experi7 enced on average, over the preceding 

8 calendar year, precipitation levels that 

9 are 50 percent or more below normal 

10 levels, according to sufficient docu11 mentation as determined by the Sec12 retary, may be eligible, subject to a 

13 determination by the Secretary, to re14 ceive assistance under this paragraph 

15 in an amount equal to not more than 

16 1 monthly payment using the monthly 

17 payment rate under subparagraph 

18 (B). 

19 (II) NO DUPLICATE PAYMENT.— 

20 A producer may not receive a pay21 ment under both clause (ii) and this 

22 clause. 

23 (5) ASSISTANCE FOR LOSSES DUE TO FIRE ON

24 PUBLIC MANAGED LAND.— 
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1 (A) IN GENERAL.—An eligible livestock 

2 producer may receive assistance under this 

3 paragraph only if— 

4 (i) the eligible forage losses occur on 

5 rangeland that is managed by a Federal 

6 agency; and 

7 (ii) the eligible livestock producer is 

8 prohibited by the Federal agency from 

9 grazing the normal permitted livestock on 

10 the managed rangeland due to a fire. 

11 (B) PAYMENT RATE.—The payment rate 

12 for assistance under this paragraph shall be 

13 equal to 50 percent of the monthly feed cost for 

14 the total number of livestock covered by the 

15 Federal lease of the eligible livestock producer, 

16 as determined under paragraph (4)(C). 

17 (C) PAYMENT DURATION.— 

18 (i) IN GENERAL.—Subject to clause 

19 (ii), an eligible livestock producer shall be 

20 eligible to receive assistance under this 

21 paragraph for the period— 

22 (I) beginning on the date on 

23 which the Federal agency excludes the 

24 eligible livestock producer from using 
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1 the managed rangeland for grazing; 

2 and 

3 (II) ending on the last day of the 

4 Federal lease of the eligible livestock 

5 producer. 

6 (ii) LIMITATION.—An eligible livestock 

7 producer may only receive assistance under 

8 this paragraph for losses that occur on not 

9 more than 180 days per year. 

10 (6) ASSISTANCE FOR ELIGIBLE FORAGE LOSSES

11 DUE TO OTHER THAN DROUGHT OR FIRE.— 

12 (A) ELIGIBLE FORAGE LOSSES.— 

13 (i) IN GENERAL.—Subject to subpara14 graph (B), an eligible livestock producer of 

15 covered livestock may receive assistance 

16 under this paragraph for eligible forage 

17 losses that occur due to weather-related 

18 conditions other than drought or fire on 

19 land that— 

20 (I) is native or improved 

21 pastureland with permanent vegeta22 tive cover; or 

23 (II) is planted to a crop planted 

24 specifically for the purpose of pro25 viding grazing for covered livestock. 
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1 (ii) EXCLUSIONS.—An eligible live2 stock producer may not receive assistance 

3 under this paragraph for eligible forage 

4 losses that occur on land used for haying 

5 or grazing under the conservation reserve 

6 program established under subchapter B of 

7 chapter 1 of subtitle D of title XII of the 

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

9 3831 et seq.), unless the land is grassland 

10 eligible for the conservation reserve pro11 gram under section 1231(d)(2) of the Food 

12 Security Act of 1985 (16 U.S.C. 

13 3831(d)(2)) (as amended by section 2001 

14 of this Act). 

15 (B) PAYMENTS FOR ELIGIBLE FORAGE

16 LOSSES.— 

17 (i) IN GENERAL.—The Secretary shall 

18 provide assistance under this paragraph to 

19 an eligible livestock producer for eligible 

20 forage losses that occur due to weather-re21 lated conditions other than— 

22 (I) drought under paragraph (4); 

23 and 

24 (II) fire on public managed land 

25 under paragraph (5). 
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1 (ii) TERMS AND CONDITIONS.—The 

2 Secretary shall establish terms and condi3 tions for assistance under this paragraph 

4 that are consistent with the terms and con5 ditions for assistance under this sub6 section. 

7 (7) NO DUPLICATIVE PAYMENTS.—An eligible 

8 livestock producer may elect to receive assistance for 

9 eligible forage losses under either paragraph (4), (5), 

10 or (6), if applicable, but may not receive assistance 

11 under more than 1 of those paragraphs for the same 

12 loss, as determined by the Secretary. 

13 (8) DETERMINATIONS BY SECRETARY.—A de14 termination made by the Secretary under this sub15 section shall be final and conclusive. 

16 (d) EMERGENCY ASSISTANCE FOR LIVESTOCK, 

17 HONEY BEES, AND FARM-RAISED FISH.— 

18 (1) IN GENERAL.—For each of fiscal years 

19 2012 through 2017, the Secretary shall use not 

20 more than $5,000,000 of the funds of the Com21 modity Credit Corporation to provide emergency re22 lief to eligible producers of livestock, honey bees, and 

23 farm-raised fish to aid in the reduction of losses due 

24 to disease, adverse weather, or other conditions, such 

25 as blizzards and wildfires, as determined by the Sec-
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1 retary, that are not covered under subsection (b) or 

2 (c). 

3 (2) USE OF FUNDS.—Funds made available 

4 under this subsection shall be used to reduce losses 

5 caused by feed or water shortages, disease, or other 

6 factors as determined by the Secretary. 

7 (3) AVAILABILITY OF FUNDS.—Any funds made 

8 available under this subsection shall remain available 

9 until expended. 

10 (e) TREE ASSISTANCE PROGRAM.— 

11 (1) DEFINITIONS.—In this subsection: 

12 (A) ELIGIBLE ORCHARDIST.—The term 

13 ‘‘eligible orchardist’’ means a person that pro14 duces annual crops from trees for commercial 

15 purposes. 

16 (B) NATURAL DISASTER.—The term ‘‘nat17 ural disaster’’ means plant disease, insect infes18 tation, drought, fire, freeze, flood, earthquake, 

19 lightning, or other occurrence, as determined by 

20 the Secretary. 

21 (C) NURSERY TREE GROWER.—The term 

22 ‘‘nursery tree grower’’ means a person who pro23 duces nursery, ornamental, fruit, nut, or Christ24 mas trees for commercial sale, as determined by 

25 the Secretary. 
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1 (D) TREE.—The term ‘‘tree’’ includes a 

2 tree, bush, and vine. 

3 (2) ELIGIBILITY.— 

4 (A) LOSS.—Subject to subparagraph (B), 

5 for each of fiscal years 2012 through 2017, the 

6 Secretary shall use such sums as are necessary 

7 of the funds of the Commodity Credit Corpora8 tion to provide assistance— 

9 (i) under paragraph (3) to eligible or10 chardists and nursery tree growers that 

11 planted trees for commercial purposes but 

12 lost the trees as a result of a natural dis13 aster, as determined by the Secretary; and 

14 (ii) under paragraph (3)(B) to eligible 

15 orchardists and nursery tree growers that 

16 have a production history for commercial 

17 purposes on planted or existing trees but 

18 lost the trees as a result of a natural dis19 aster, as determined by the Secretary. 

20 (B) LIMITATION.—An eligible orchardist 

21 or nursery tree grower shall qualify for assist22 ance under subparagraph (A) only if the tree 

23 mortality of the eligible orchardist or nursery 

24 tree grower, as a result of damaging weather or 
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1 related condition, exceeds 15 percent (adjusted 

2 for normal mortality). 

3 (3) ASSISTANCE.—Subject to paragraph (4), 

4 the assistance provided by the Secretary to eligible 

5 orchardists and nursery tree growers for losses de6 scribed in paragraph (2) shall consist of— 

7 (A)(i) reimbursement of 65 percent of the 

8 cost of replanting trees lost due to a natural 

9 disaster, as determined by the Secretary, in ex10 cess of 15 percent mortality (adjusted for nor11 mal mortality); or 

12 (ii) at the option of the Secretary, suffi13 cient seedlings to reestablish a stand; and 

14 (B) reimbursement of 50 percent of the 

15 cost of pruning, removal, and other costs in16 curred by an eligible orchardist or nursery tree 

17 grower to salvage existing trees or, in the case 

18 of tree mortality, to prepare the land to replant 

19 trees as a result of damage or tree mortality 

20 due to a natural disaster, as determined by the 

21 Secretary, in excess of 15 percent damage or 

22 mortality (adjusted for normal tree damage and 

23 mortality). 

24 (4) LIMITATIONS ON ASSISTANCE.— 
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1 (A) DEFINITIONS OF LEGAL ENTITY AND

2 PERSON.—In this paragraph, the terms ‘‘legal 

3 entity’’ and ‘‘person’’ have the meaning given 

4 those terms in section 1001(a) of the Food Se5 curity Act of 1985 (7 U.S.C. 1308(a)). 

6 (B) AMOUNT.—The total amount of pay7 ments received, directly or indirectly, by a per8 son or legal entity (excluding a joint venture or 

9 general partnership) under this subsection may 

10 not exceed $100,000 for any crop year, or an 

11 equivalent value in tree seedlings. 

12 (C) ACRES.—The total quantity of acres 

13 planted to trees or tree seedlings for which a 

14 person or legal entity shall be entitled to receive 

15 payments under this subsection may not exceed 

16 500 acres. 

17 (f) PAYMENTS.— 

18 (1) PAYMENT LIMITATIONS.— 

19 (A) DEFINITIONS OF LEGAL ENTITY AND

20 PERSON.—In this subsection, the terms ‘‘legal 

21 entity’’ and ‘‘person’’ have the meanings given 

22 those terms in section 1001(a) of the Food Se23 curity Act of 1985 (7 U.S.C. 1308(a)). 

24 (B) AMOUNT.—The total amount of dis25 aster assistance payments received, directly or 
142 

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1 indirectly, by a person or legal entity (excluding 

2 a joint venture or general partnership) under 

3 this section (excluding payments received under 

4 subsection (e)) may not exceed $100,000 for 

5 any crop year. 

6 (C) DIRECT ATTRIBUTION.—Subsections 

7 (d) and (e) of section 1001 of the Food Secu8 rity Act of 1985 (7 U.S.C. 1308) or any suc9 cessor provisions relating to direct attribution 

10 shall apply with respect to assistance provided 

11 under this section. 

12 (2) PAYMENT DELIVERY.—The Secretary shall 

13 make payments under this section after October 1, 

14 2013, for losses incurred in the 2012 and 2013 fis15 cal years, and as soon as practicable for losses in16 curred in any year thereafter. 

17 Subtitle F—Administration 

18 SEC. 1601. ADMINISTRATION GENERALLY. 

19 (a) USE OF COMMODITY CREDIT CORPORATION.— 

20 The Secretary shall use the funds, facilities, and authori21 ties of the Commodity Credit Corporation to carry out this 

22 title. 

23 (b) DETERMINATIONS BY SECRETARY.—A deter24 mination made by the Secretary under this title shall be 

25 final and conclusive. 
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1 (c) REGULATIONS.— 

2 (1) IN GENERAL.—Except as otherwise pro3 vided in this subsection, not later than 90 days after 

4 the date of enactment of this Act, the Secretary and 

5 the Commodity Credit Corporation, as appropriate, 

6 shall promulgate such regulations as are necessary 

7 to implement this title and the amendments made by 

8 this title. 

9 (2) PROCEDURE.—The promulgation of the reg10 ulations and administration of this title and the 

11 amendments made by this title and sections 11001 

12 and 11011 of this Act shall be made without regard 

13 to— 

14 (A) the notice and comment provisions of 

15 section 553 of title 5, United States Code; 

16 (B) chapter 35 of title 44, United States 

17 Code (commonly known as the ‘‘Paperwork Re18 duction Act’’); and 

19 (C) the Statement of Policy of the Sec20 retary of Agriculture effective July 24, 1971 

21 (36 Fed. Reg. 13804), relating to notices of 

22 proposed rulemaking and public participation in 

23 rulemaking. 

24 (3) CONGRESSIONAL REVIEW OF AGENCY RULE25 MAKING.—In carrying out this subsection, the Sec-
144 

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1 retary shall use the authority provided under section 

2 808 of title 5, United States Code. 

3 (d) ADJUSTMENT AUTHORITY RELATED TO TRADE

4 AGREEMENTS COMPLIANCE.— 

5 (1) REQUIRED DETERMINATION; ADJUST6 MENT.—If the Secretary determines that expendi7 tures under this title that are subject to the total al8 lowable domestic support levels under the Uruguay 

9 Round Agreements (as defined in section 2 of the 

10 Uruguay Round Agreements Act (19 U.S.C. 3501)) 

11 will exceed the allowable levels for any applicable re12 porting period, the Secretary shall, to the maximum 

13 extent practicable, make adjustments in the amount 

14 of the expenditures during that period to ensure that 

15 the expenditures do not exceed the allowable levels. 

16 (2) CONGRESSIONAL NOTIFICATION.—Before 

17 making any adjustment under paragraph (1), the 

18 Secretary shall submit to the Committee on Agri19 culture of the House of Representatives and the 

20 Committee on Agriculture, Nutrition, and Forestry 

21 of the Senate a report describing the determination 

22 made under that paragraph and the extent of the 

23 adjustment to be made. 
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1 SEC. 1602. SUSPENSION OF PERMANENT PRICE SUPPORT 

2 AUTHORITY. 

3 (a) AGRICULTURAL ADJUSTMENT ACT OF 1938.— 

4 The following provisions of the Agricultural Adjustment 

5 Act of 1938 shall not be applicable to the 2013 through 

6 2017 crops of covered commodities (as defined in section 

7 1104), cotton, and sugar and shall not be applicable to 

8 milk during the period beginning on the date of enactment 

9 of this Act through December 31, 2017: 

10 (1) Parts II through V of subtitle B of title III 

11 (7 U.S.C. 1326 et seq.). 

12 (2) In the case of upland cotton, section 377 (7 

13 U.S.C. 1377). 

14 (3) Subtitle D of title III (7 U.S.C. 1379a et 

15 seq.). 

16 (4) Title IV (7 U.S.C. 1401 et seq.). 

17 (b) AGRICULTURAL ACT OF 1949.—The following 

18 provisions of the Agricultural Act of 1949 shall not be ap19 plicable to the 2013 through 2017 crops of covered com20 modities (as defined in section 1104), cotton, and sugar 

21 and shall not be applicable to milk during the period be22 ginning on the date of enactment of this Act and through 

23 December 31, 2017: 

24 (1) Section 101 (7 U.S.C. 1441). 

25 (2) Section 103(a) (7 U.S.C. 1444(a)). 

26 (3) Section 105 (7 U.S.C. 1444b). 
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1 (4) Section 107 (7 U.S.C. 1445a). 

2 (5) Section 110 (7 U.S.C. 1445e). 

3 (6) Section 112 (7 U.S.C. 1445g). 

4 (7) Section 115 (7 U.S.C. 1445k). 

5 (8) Section 201 (7 U.S.C. 1446). 

6 (9) Title III (7 U.S.C. 1447 et seq.). 

7 (10) Title IV (7 U.S.C. 1421 et seq.), other 

8 than sections 404, 412, and 416 (7 U.S.C. 1424, 

9 1429, and 1431). 

10 (11) Title V (7 U.S.C. 1461 et seq.). 

11 (12) Title VI (7 U.S.C. 1471 et seq.). 

12 (c) SUSPENSION OF CERTAIN QUOTA PROVISIONS.— 

13 The joint resolution entitled ‘‘A joint resolution relating 

14 to corn and wheat marketing quotas under the Agricul15 tural Adjustment Act of 1938, as amended’’, approved 

16 May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be 

17 applicable to the crops of wheat planted for harvest in the 

18 calendar years 2013 through 2017. 

19 SEC. 1603. PAYMENT LIMITATIONS. 

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

21 Act of 1985 (7 U.S.C. 1308) is amended by striking sub22 sections (b) and (c) and inserting the following: 

23 ‘‘(b) LIMITATION ON PAYMENTS FOR PEANUTS AND

24 OTHER COVERED COMMODITIES.—The total amount of 

25 payments received, directly or indirectly, by a person or 
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1 legal entity (except a joint venture or general partnership) 

2 for any crop year under title I of subtitle A of the Agri3 culture Reform, Food, and Jobs Act of 2012 for— 

4 ‘‘(1) peanuts may not exceed $50,000; and 

5 ‘‘(2) 1 or more other covered commodities may 

6 not exceed $50,000.’’. 

7 (b) LIMITATION ON MARKETING LOAN GAINS AND

8 LOAN DEFICIENCY PAYMENTS FOR PEANUTS AND OTHER

9 COVERED COMMODITIES.—Section 1001 of the Food Se10 curity Act of 1985 (7 U.S.C. 1308) is amended by striking 

11 subsection (d) and inserting the following: 

12 ‘‘(d) LIMITATION ON MARKETING LOAN GAINS AND

13 LOAN DEFICIENCY PAYMENTS FOR PEANUTS AND OTHER

14 COVERED COMMODITIES.—The total amount of marketing 

15 loan gains and loan deficiency payments received, directly 

16 or indirectly, by a person or legal entity (except a joint 

17 venture or general partnership) for any crop year under 

18 subtitle B of the Agriculture Reform, Food, and Jobs Act 

19 of 2012 (or a successor provision) for— 

20 ‘‘(1) peanuts may not exceed $75,000; and 

21 ‘‘(2) 1 or more other covered commodities may 

22 not exceed $75,000.’’. 

23 (c) CONFORMING AMENDMENTS.— 

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

25 1985 (7 U.S.C. 1308) is amended— 
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1 (A) in subsection (a)(1), by striking ‘‘sec2 tion 1001 of the Food, Conservation, and En3 ergy Act of 2008’’ and inserting ‘‘section 1104 

4 of the Agriculture Reform, Food, and Jobs Act 

5 of 2012’’; 

6 (B) in subsection (d), by inserting ‘‘or title 

7 I of the Agriculture Reform, Food, and Jobs 

8 Act of 2012’’ before the period at the end; 

9 (C) in subsection (e)— 

10 (i) in paragraph (1), by striking ‘‘sub11 sections (b) and (c) and a program de12 scribed in paragraphs (1)(C)’’ and insert13 ing ‘‘subsection (b) and a program de14 scribed in paragraph (1)(B)’’; and 

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

16 ‘‘subsections (b) and (c)’’ each place it ap17 pears and inserting ‘‘subsection (b)’’; 

18 (D) in subsection (f)— 

19 (i) by striking ‘‘or title XII’’ each 

20 place it appears in paragraphs (5)(A) and 

21 (6)(A) and inserting ‘‘, title I of the Agri22 culture Reform, Food, and Jobs Act of 

23 2012, or title XII’’; 
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1 (ii) in paragraph (2), by striking 

2 ‘‘Subsections (b) and (c)’’ and inserting 

3 ‘‘Subsection (b)’’; 

4 (iii) in paragraph (4)(B), by striking 

5 ‘‘subsection (b) or (c)’’ and inserting ‘‘sub6 section (b)’’; 

7 (iv) in paragraph (5)— 

8 (I) in subparagraph (A), by strik9 ing ‘‘subsection (d)’’ and inserting 

10 ‘‘subsection (c)’’; and 

11 (II) in subparagraph (B), by 

12 striking ‘‘subsection (b), (c), or (d)’’ 

13 and inserting ‘‘subsection (b) or (c)’’; 

14 and 

15 (v) in paragraph (6)— 

16 (I) in subparagraph (A), by strik17 ing ‘‘subsection (d), except as pro18 vided in subsection (g)’’ and inserting 

19 ‘‘subsection (c), except as provided in 

20 subsection (f)’’; and 

21 (II) in subparagraph (B), by 

22 striking ‘‘subsections (b), (c), and 

23 (d)’’ and inserting ‘‘subsections (b) 

24 and (c)’’; 

25 (E) in subsection (g)— 
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1 (i) in paragraph (1)— 

2 (I) bv striking ‘‘subsection 

3 (f)(6)(A)’’ and inserting ‘‘subsection 

4 (e)(6)(A)’’ and 

5 (II) by striking ‘‘subsection (b) 

6 or (c)’’ and inserting ‘‘subsection (b)’’; 

7 and 

8 (ii) in paragraph (2)(A), by striking 

9 ‘‘subsections (b) and (c)’’ and inserting 

10 ‘‘subsection (b)’’; and 

11 (F) by redesignating subsections (d) 

12 through (h) as subsections (c) through (g), re13 spectively. 

14 (2) Section 1001A of the Food Security Act of 

15 1985 (7 U.S.C. 1308–1) is amended— 

16 (A) in subsection (a), by striking ‘‘sub17 sections (b) and (c)’’ and inserting ‘‘subsection 

18 (b)’’; and 

19 (B) in subsection (b)(1), by striking ‘‘sub20 section (b) or (c)’’ and inserting ‘‘subsection 

21 (b)’’. 

22 (3) Section 1001B(a) of the Food Security Act 

23 of 1985 (7 U.S.C. 1308–2(a)) is amended in the 

24 matter preceding paragraph (1) by striking ‘‘sub25 sections (b) and (c)’’ and inserting ‘‘subsection (b)’’. 
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1 (4) Section 1001C(a) of the Food Security Act 

2 of 1985 (7 U.S.C. 1308–3(a)) is amended by insert3 ing ‘‘title I of the Agriculture Reform, Food, and 

4 Jobs Act of 2012,’’ after ‘‘2008,’’. 

5 (d) APPLICATION.—The amendments made by this 

6 section shall apply beginning with the 2013 crop year. 

7 SEC. 1604. PAYMENTS LIMITED TO ACTIVE FARMERS. 

8 Section 1001A of the Food Security Act of 1985 (7 

9 U.S.C. 1308–1) is amended— 

10 (1) in subsection (b)(2)— 

11 (A) by striking ‘‘or active personal man12 agement’’ each place it appears in subpara13 graphs (A)(i)(II) and (B)(ii); and 

14 (B) in subparagraph (C), by striking ‘‘, as 

15 applied to the legal entity, are met by the legal 

16 entity, the partners or members making a sig17 nificant contribution of personal labor or active 

18 personal management’’ and inserting ‘‘are met 

19 by partners or members making a significant 

20 contribution of personal labor, those partners or 

21 members’’; and 

22 (2) in subsection (c)— 

23 (A) in paragraph (1)— 

24 (i) by striking subparagraph (A) and 

25 inserting the following: 
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1 ‘‘(A) the landowner share-rents the land at 

2 a rate that is usual and customary;’’; 

3 (ii) in subparagraph (B), by striking 

4 the period at the end and inserting ‘‘; 

5 and’’; and 

6 (iii) by adding at the end the fol7 lowing: 

8 ‘‘(C) the share of the payments received by 

9 the landowner is commensurate with the share 

10 of the crop or income received as rent.’’; 

11 (B) in paragraph (2)(A), by striking ‘‘ac12 tive personal management or’’; 

13 (C) in paragraph (5)— 

14 (i) by striking ‘‘(5)’’ and all that fol15 lows through ‘‘(A) IN GENERAL.—A per16 son’’ and inserting the following: 

17 ‘‘(5) CUSTOM FARMING SERVICES.—A person’’; 

18 (ii) by inserting ‘‘under usual and 

19 customary terms’’ after ‘‘services’’; and 

20 (iii) by striking subparagraph (B); 

21 and 

22 (D) by adding at the end the following: 

23 ‘‘(7) FARM MANAGERS.—A person who other24 wise meets the requirements of this subsection other 

25 than (b)(2)(A)(i)(II) shall be considered to be ac-
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1 tively engaged in farming, as determined by the Sec2 retary, with respect to the farming operation, includ3 ing a farming operation that is a sole proprietorship, 

4 a legal entity such as a joint venture or general 

5 partnership, or a legal entity such as a corporation 

6 or limited partnership, if the person— 

7 ‘‘(A) makes a significant contribution of 

8 management to the farming operation necessary 

9 for the farming operation, taking into ac10 count— 

11 ‘‘(i) the size and complexity of the 

12 farming operation; and 

13 ‘‘(ii) the management requirements 

14 normally and customarily required by simi15 lar farming operations; 

16 ‘‘(B) is the only person in the farming op17 eration qualifying as actively engaged in farm18 ing; 

19 ‘‘(C) does not use the management con20 tribution under this paragraph to qualify as ac21 tively engaged in more than 1 farming oper22 ation; and 

23 ‘‘(D) manages a farm operation that does 

24 not substantially share equipment, labor, or 

25 management with persons or legal entities that 
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1 with the person collectively receive, directly or 

2 indirectly, an amount equal to more than the 

3 applicable limits under section 1001(b).’’. 

4 SEC. 1605. ADJUSTED GROSS INCOME LIMITATION. 

5 (a) IN GENERAL.—Section 1001D(b)) of the Food 

6 Security Act of 1985 (7 U.S.C. 1308–3a(b)) is amended 

7 by striking paragraph (1) and inserting the following: 

8 ‘‘(1) COMMODITY PROGRAMS.— 

9 ‘‘(A) LIMITATION.—Notwithstanding any 

10 other provision of law, a person or legal entity 

11 shall not be eligible to receive any benefit de12 scribed in subparagraph (B) during a crop, fis13 cal or program year, as appropriate, if the aver14 age adjusted gross income (or comparable 

15 measure over the 3 taxable years preceding the 

16 most immediately preceding complete taxable 

17 year, as determined by the Secretary) of the 

18 person or legal entity exceeds $750,000. 

19 ‘‘(B) COVERED BENEFITS.—Subparagraph 

20 (A) applies with respect to the following: 

21 ‘‘(i) A payment under section 1105 of 

22 the Agriculture Reform, Food, and Jobs 

23 Act of 2012. 

24 ‘‘(ii) A marketing loan gain or loan 

25 deficiency payment under subtitle B of title 
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1 I of the Agriculture Reform, Food, and 

2 Jobs Act of 2012. 

3 ‘‘(iii) A payment under subtitle E of 

4 the Agriculture Reform, Food, and Jobs 

5 Act of 2012.’’. 

6 ‘‘(iv) A payment under section 196 of 

7 the Federal Agriculture Improvement and 

8 Reform Act of 1996 (7 U.S.C. 7333).’’. 

9 (b) APPLICATION.—The amendments made by this 

10 section shall apply beginning with the 2013 crop year. 

11 SEC. 1606. GEOGRAPHICALLY DISADVANTAGED FARMERS 

12 AND RANCHERS. 

13 Section 1621(d) of the Food, Conservation, and En14 ergy Act of 2008 (7 U.S.C. 8792(d)) is amended by strik15 ing ‘‘2012’’ and inserting ‘‘2017’’. 

16 SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFI17 CIENCIES. 

18 Section 164 of the Federal Agriculture Improvement 

19 and Reform Act of 1996 (7 U.S.C. 7284) is amended by 

20 striking ‘‘and title I of the Food, Conservation, and En21 ergy Act of 2008’’ each place it appears and inserting 

22 ‘‘title I of the Food, Conservation, and Energy Act of 

23 2008 (7 U.S.C. 8702 et seq.), and title I of the Agriculture 

24 Reform, Food, and Jobs Act of 2012’’. 
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1 SEC. 1608. PREVENTION OF DECEASED INDIVIDUALS RE2 CEIVING PAYMENTS UNDER FARM COM3 MODITY PROGRAMS. 

4 (a) RECONCILIATION.—At least twice each year, the 

5 Secretary shall reconcile social security numbers of all in6 dividuals who receive payments under this title, whether 

7 directly or indirectly, with the Commissioner of Social Se8 curity to determine if the individuals are alive. 

9 (b) PRECLUSION.—The Secretary shall preclude the 

10 issuance of payments to, and on behalf of, deceased indi11 viduals that were not eligible for payments. 

12 SEC. 1609. APPEALS. 

13 (a) DIRECTION, CONTROL, AND SUPPORT.—Section 

14 272 of the Department of Agriculture Reorganization Act 

15 of 1994 (7 U.S.C. 6992) is amended by striking sub16 section (c) and inserting the following: 

17 ‘‘(c) DIRECTION, CONTROL, AND SUPPORT.— 

18 ‘‘(1) DIRECTION AND CONTROL.— 

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

20 paragraph (2), the Director shall be free from 

21 the direction and control of any person other 

22 than the Secretary or the Deputy Secretary of 

23 Agriculture. 

24 ‘‘(B) ADMINISTRATIVE SUPPORT.—The Di25 vision shall not receive administrative support 
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1 (except on a reimbursable basis) from any agen2 cy other than the Office of the Secretary. 

3 ‘‘(C) PROHIBITION ON DELEGATION.—The 

4 Secretary may not delegate to any other officer 

5 or employee of the Department, other than the 

6 Deputy Secretary of Agriculture or the Direc7 tor, the authority of the Secretary with respect 

8 to the Division. 

9 ‘‘(2) EXCEPTION.—The Assistant Secretary for 

10 Administration is authorized to investigate, enforce, 

11 and implement the provisions in law, Executive 

12 order, or regulations that relate in general to com13 petitive and excepted service positions and employ14 ment within the Division, including the position of 

15 Director, and such authority may be further dele16 gated to subordinate officials.’’. 

17 (b) DETERMINATION OF APPEALABILITY OF AGENCY

18 DECISIONS.—Section 272 of the Department of Agri19 culture Reorganization Act of 1994 (7 U.S.C. 6992) is 

20 amended by striking subsection (d) and inserting the fol21 lowing: 

22 ‘‘(d) DETERMINATION OF APPEALABILITY OF AGEN23 CY DECISIONS.— 

24 ‘‘(1) DEFINITION OF A MATTER OF GENERAL

25 APPLICABILITY.—In this subsection, the term ‘a 
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1 matter of general applicability’ means a matter that 

2 challenges the merits or authority of a rule, proce3 dure, local or national program practice, or deter4 mination of an agency that applies, or can apply, to 

5 more than 1 interested party as opposed to the par6 ticular application of the rule, procedure, or practice 

7 to a specific set of facts or the facts themselves as 

8 the facts apply to 1 particular interested party. 

9 ‘‘(2) MATTERS NOT SUBJECT TO APPEAL.—The 

10 Division may not hear appeals— 

11 ‘‘(A) unless the determination of the agen12 cy is adverse to the appellant; 

13 ‘‘(B) that involve matters of general appli14 cability; and 

15 ‘‘(C) that involve requests for equitable re16 lief unless the equitable relief has been denied 

17 by the agency. 

18 ‘‘(3) EQUITABLE RELIEF.— 

19 ‘‘(A) IN GENERAL.—An appeal requesting 

20 equitable relief may not be granted by the Di21 rector to an appellant unless, using the rules 

22 and practices that the agency applies to itself, 

23 the agency could in fact have granted the relief 

24 because the appellant acted in good faith, but 
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1 failed to fully comply with the requirement of 

2 the rule or practice of the agency. 

3 ‘‘(B) REMAND.—If it cannot be deter4 mined whether the agency would have granted 

5 equitable relief because the appellant acted in 

6 good faith, but failed to comply with the rule or 

7 practice of the agency, the matter shall be re8 manded to the agency for further consideration. 

9 ‘‘(4) DETERMINATION OF APPEALABILITY.—If 

10 an officer, employee, or committee of an agency de11 termines that a decision is not appealable and a par12 ticipant appeals the decision to the Director, the Di13 rector shall determine whether the decision is ad14 verse to the individual participant and appealable or 

15 is a matter of general applicability and not subject 

16 to appeal. 

17 ‘‘(5) APPEALABILITY OF DETERMINATION.— 

18 The determination of the Director as to whether a 

19 decision is appealable is final.’’. 

20 (c) EQUITABLE RELIEF.—Section 278 of the Depart21 ment of Agriculture Reorganization Act of 1994 (7 U.S.C. 

22 6998) is amended by striking subsection (d). 

23 (d) CONFORMING AMENDMENT.—Section 296(b) of 

24 the Department of Agriculture Reorganization Act of 

25 1994 (7 U.S.C. 7014(b)) is amended— 
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1 (1) in paragraph (6)(C), by striking ‘‘or’’ at the 

2 end; 

3 (2) in paragraph (7), by striking the period at 

4 the end and inserting ‘‘; or’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(8) the authority of the Secretary to carry out 

7 amendments to sections 272 and 278 made by the 

8 Agriculture Reform, Food, and Jobs Act of 2012.’’. 

9 SEC. 1610. TECHNICAL CORRECTIONS. 

10 (a) Section 359f(c)(1)(B) of the Agricultural Adjust11 ment Act of 1938 (7 U.S.C. 1359ff(c)(1)(B)) is amended 

12 by adding a period at the end. 

13 (b)(1) Section 1603(g) of the Food, Conservation, 

14 and Energy Act of 2008 (Public Law 110–246; 122 Stat. 

15 1739) is amended in paragraphs (2) through (6) and the 

16 amendments made by those paragraphs by striking 

17 ‘‘1703(a)’’ each place it appears and inserting ‘‘1603(a)’’. 

18 (2) This subsection and the amendments made by 

19 this subsection take effect as if included in the Food, Con20 servation, and Energy Act of 2008 (Public Law 110–246; 

21 122 Stat. 1651). 

22 SEC. 1611. ASSIGNMENT OF PAYMENTS. 

23 (a) IN GENERAL.—The provisions of section 8(g) of 

24 the Soil Conservation and Domestic Allotment Act (16 
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1 U.S.C. 590h(g)), relating to assignment of payments, shall 

2 apply to payments made under this title. 

3 (b) NOTICE.—The producer making the assignment, 

4 or the assignee, shall provide the Secretary with notice, 

5 in such manner as the Secretary may require, of any as6 signment made under this section. 

7 SEC. 1612. TRACKING OF BENEFITS. 

8 As soon as practicable after the date of enactment 

9 of this Act, the Secretary may track the benefits provided, 

10 directly or indirectly, to individuals and entities under ti11 tles I and II and the amendments made by those titles. 

12 SEC. 1613. SIGNATURE AUTHORITY. 

13 (a) IN GENERAL.—In carrying out this title and title 

14 II and amendments made by those titles, if the Secretary 

15 approves a document, the Secretary shall not subsequently 

16 determine the document is inadequate or invalid because 

17 of the lack of authority of any person signing the docu18 ment on behalf of the applicant or any other individual, 

19 entity, general partnership, or joint venture, or the docu20 ments relied upon were determined inadequate or invalid, 

21 unless the person signing the program document know22 ingly and willfully falsified the evidence of signature au23 thority or a signature. 

24 (b) AFFIRMATION.— 
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1 (1) IN GENERAL.—Nothing in this section pro2 hibits the Secretary from asking a proper party to 

3 affirm any document that otherwise would be consid4 ered approved under subsection (a). 

5 (2) NO RETROACTIVE EFFECT.—A denial of 

6 benefits based on a lack of affirmation under para7 graph (1) shall not be retroactive with respect to 

8 third-party producers who were not the subject of 

9 the erroneous representation of authority, if the 

10 third-party producers— 

11 (A) relied on the prior approval by the Sec12 retary of the documents in good faith; and 

13 (B) substantively complied with all pro14 gram requirements. 

15 SEC. 1614. IMPLEMENTATION. 

16 (a) STREAMLINING.—In implementing this title, the 

17 Secretary shall, to the maximum extent practicable— 

18 (1) seek to reduce administrative burdens and 

19 costs to producers by streamlining and reducing pa20 perwork, forms, and other administrative require21 ments; 

22 (2) improve coordination, information sharing, 

23 and administrative work with the Risk Management 

24 Agency and the Natural Resources Conservation 

25 Service; and 
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1 (3) take advantage of new technologies to en2 hance efficiency and effectiveness of program deliv3 ery to producers. 

4 (b) IMPLEMENTATION.—On October 1, 2013, the 

5 Secretary shall make available to the Farm Service Agency 

6 to carry out this title $100,000,000. 

7 TITLE II—CONSERVATION 

8 Subtitle A—Conservation Reserve 

9 Program 

10 SEC. 2001. EXTENSION AND ENROLLMENT REQUIREMENTS 

11 OF CONSERVATION RESERVE PROGRAM. 

12 (a) EXTENSION.—Section 1231(a) of the Food Secu13 rity Act of 1985 (16 U.S.C. 3831(a)) is amended by strik14 ing ‘‘2012’’ and inserting ‘‘2017’’. 

15 (b) ELIGIBLE LAND.—Section 1231(b) of the Food 

16 Security Act of 1985 (16 U.S.C. 3831(b)) is amended— 

17 (1) in paragraph (1)(B), by striking ‘‘the date 

18 of enactment of the Food, Conservation, and Energy 

19 Act of 2008’’ and inserting ‘‘the date of enactment 

20 of the Agriculture Reform, Food, and Jobs Act of 

21 2012’’; 

22 (2) by striking paragraph (2) and redesignating 

23 paragraph (3) as paragraph (2); 

24 (3) by inserting before paragraph (4) the fol25 lowing: 
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1 ‘‘(3) grassland that— 

2 ‘‘(A) contains forbs or shrubland (includ3 ing improved rangeland and pastureland) for 

4 which grazing is the predominant use; 

5 ‘‘(B) is located in an area historically 

6 dominated by grassland; and 

7 ‘‘(C) could provide habitat for animal and 

8 plant populations of significant ecological value 

9 if the land is retained in its current use or re10 stored to a natural condition;’’; 

11 (4) in paragraph (4)(C), by striking 

12 ‘‘filterstrips devoted to trees or shrubs’’ and insert13 ing ‘‘filterstrips and riparian buffers devoted to 

14 trees, shrubs, or grasses’’; and 

15 (5) by striking paragraph (5) and inserting the 

16 following: 

17 ‘‘(5) the portion of land in a field not enrolled 

18 in the conservation reserve in a case in which— 

19 ‘‘(A) more than 50 percent of the land in 

20 the field is enrolled as a buffer or filterstrip or 

21 more than 75 percent of the land in the field 

22 is enrolled in a practice other than as a buffer 

23 or filterstrip; and 

24 ‘‘(B) the remainder of the field is— 

25 ‘‘(i) infeasible to farm; and 
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1 ‘‘(ii) enrolled at regular rental rates.’’. 

2 (c) PLANTING STATUS OF CERTAIN LAND.—Section 

3 1231(c) of the Food Security Act of 1985 (16 U.S.C. 

4 3831(c)) is amended by striking ‘‘if’’ and all that follows 

5 through the period at the end and inserting ‘‘if, during 

6 the crop year, the land was devoted to a conserving use.’’. 

7 (d) ENROLLMENT.—Section 1231 of the Food Secu8 rity Act of 1985 (16 U.S.C. 3831) is amended by striking 

9 subsection (d) and inserting the following: 

10 ‘‘(d) ENROLLMENT.— 

11 ‘‘(1) MAXIMUM ACREAGE ENROLLED.—The 

12 Secretary may maintain in the conservation reserve 

13 at any 1 time during— 

14 ‘‘(A) fiscal year 2012, no more than 

15 32,000,000 acres; 

16 ‘‘(B) fiscal year 2013, no more than 

17 30,000,000 acres; 

18 ‘‘(C) fiscal year 2014, no more than 

19 27,500,000 acres; 

20 ‘‘(D) fiscal year 2015, no more than 

21 26,500,000 acres; 

22 ‘‘(E) fiscal year 2016, no more than 

23 25,500,000 acres; and 

24 ‘‘(F) fiscal year 2017, no more than 

25 25,000,000 acres. 
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1 ‘‘(2) GRASSLAND.— 

2 ‘‘(A) LIMITATION.—For purposes of apply3 ing the limitations in paragraph (1), no more 

4 than 1,500,000 acres of the land described in 

5 subsection (b)(3) may be enrolled in the pro6 gram at any 1 time during the 2013 through 

7 2017 fiscal years. 

8 ‘‘(B) PRIORITY.—In enrolling acres under 

9 subparagraph (A), the Secretary may give pri10 ority to land with expiring conservation reserve 

11 program contracts. 

12 ‘‘(C) METHOD OF ENROLLMENT.—In en13 rolling acres under subparagraph (A), the Sec14 retary shall make the program available to own15 ers or operators of eligible land at least once 

16 during each fiscal year.’’. 

17 (e) DURATION OF CONTRACT.—Section 1231(e) of 

18 the Food Security Act of 1985 (16 U.S.C. 3831(e)) is 

19 amended by striking paragraphs (2) and (3) and inserting 

20 the following: 

21 ‘‘(2) SPECIAL RULE FOR CERTAIN LAND.—In 

22 the case of land devoted to hardwood trees, 

23 shelterbelts, windbreaks, or wildlife corridors under 

24 a contract entered into under this subchapter, the 

25 owner or operator of the land may, within the limita-
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1 tions prescribed under this section, specify the dura2 tion of the contract.’’. 

3 (f) CONSERVATION PRIORITY AREAS.—Section 

4 1231(f) of the Food Security Act of 1985 (16 U.S.C. 

5 3831(f)) is amended— 

6 (1) in paragraph (1), by striking ‘‘watershed 

7 areas of the Chesapeake Bay Region, the Great 

8 Lakes Region, the Long Island Sound Region, and 

9 other’’; 

10 (2) in paragraph (2), by striking ‘‘WATER11 SHEDS.—Watersheds’’ and inserting ‘‘AREAS.— 

12 Areas’’; and 

13 (3) in paragraph (3), by striking ‘‘a watershed’s 

14 designation—’’ and all that follows through the pe15 riod at the end and inserting ‘‘an area’s designation 

16 if the Secretary finds that the area no longer con17 tains actual and significant adverse water quality or 

18 habitat impacts related to agricultural production 

19 activities.’’. 

20 SEC. 2002. FARMABLE WETLAND PROGRAM. 

21 (a) EXTENSION.—Section 1231B(a)(1) of the Food 

22 Security Act of 1985 (16 U.S.C. 3831b(a)(1)) is amend23 ed— 

24 (1) by striking ‘‘2012’’ and inserting ‘‘2017’’; 

25 and 
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1 (2) by striking ‘‘a program’’ and inserting ‘‘a 

2 farmable wetland program’’. 

3 (b) ELIGIBLE ACREAGE.—Section 1231B(b)(1)(B) of 

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

5 3831b(b)(1)(B)) is amended by striking ‘‘flow from a row 

6 crop agriculture drainage system’’ and inserting ‘‘surface 

7 and subsurface flow from row crop agricultural produc8 tion’’. 

9 (c) CLERICAL AMENDMENTS.—Section 1231B of the 

10 Food Security Act of 1985 (16 U.S.C. 3831b) is amend11 ed— 

12 (1) by striking the heading and inserting the 

13 following: 

14 ‘‘SEC. 1231B. FARMABLE WETLAND PROGRAM.’’; 

15 and 

16 (2) in subsection (f)(2), by striking ‘‘section 

17 1234(c)(2)(B)’’ and inserting ‘‘section 

18 1234(c)(2)(A)(ii)’’. 

19 SEC. 2003. DUTIES OF OWNERS AND OPERATORS. 

20 (a) LIMITATION ON HARVESTING, GRAZING OR COM21 MERCIAL USE OF FORAGE.—Section 1232(a)(8) of the 

22 Food Security Act of 1985 (16 U.S.C. 3832(a)(8)) is 

23 amended by striking ‘‘except that’’ and all that follows 

24 through the semicolon at the end of the paragraph and 

25 inserting ‘‘except as provided in section 1233(b);’’. 
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1 (b) CONSERVATION PLAN REQUIREMENTS.—Section 

2 1232 of the Food Security Act of 1985 (16 U.S.C. 3832) 

3 is amended by striking subsection (b) and inserting the 

4 following: 

5 ‘‘(b) CONSERVATION PLANS.—The plan referred to 

6 in subsection (a)(1) shall set forth— 

7 ‘‘(1) the conservation measures and practices to 

8 be carried out by the owner or operator during the 

9 term of the contract; and 

10 ‘‘(2) the commercial use, if any, to be permitted 

11 on the land during the term.’’. 

12 (c) RENTAL PAYMENT REDUCTION.—Section 1232 

13 of the Food Security Act of 1985 (16 U.S.C. 3832) is 

14 amended by striking subsection (d). 

15 SEC. 2004. DUTIES OF THE SECRETARY. 

16 Section 1233 of the Food Security Act of 1985 (16 

17 U.S.C. 3833) is amended to read as follows: 

18 ‘‘SEC. 1233. DUTIES OF THE SECRETARY. 

19 ‘‘(a) COST-SHARE AND RENTAL PAYMENTS.—In re20 turn for a contract entered into by an owner or operator, 

21 the Secretary shall— 

22 ‘‘(1) share the cost of carrying out the con23 servation measures and practices set forth in the 

24 contract for which the Secretary determines that 
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1 cost sharing is appropriate and in the public inter2 est; and 

3 ‘‘(2) for a period of years not in excess of the 

4 term of the contract, pay an annual rental payment 

5 in an amount necessary to compensate for— 

6 ‘‘(A) the conversion of highly erodible crop7 land or other eligible land normally devoted to 

8 the production of an agricultural commodity on 

9 a farm or ranch to a less intensive use; 

10 ‘‘(B) the retirement of any cropland base 

11 and allotment history that the owner or oper12 ator agrees to retire permanently; and 

13 ‘‘(C) the development and management of 

14 grassland for multiple natural resource con15 servation benefits, including soil, water, air, and 

16 wildlife. 

17 ‘‘(b) SPECIFIED ACTIVITIES PERMITTED.—The Sec18 retary shall permit certain activities or commercial uses 

19 of land that is subject to the contract if those activities 

20 or uses are consistent with a plan approved by the Sec21 retary and include— 

22 ‘‘(1) harvesting, grazing, or other commercial 

23 use of the forage in response to drought, flooding, 

24 or other emergency without any reduction in the 

25 rental rate; 
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1 ‘‘(2) grazing by livestock of a beginning farmer 

2 or rancher without any reduction in the rental rate, 

3 if the grazing is— 

4 ‘‘(A) consistent with the conservation of 

5 soil, water quality, and wildlife habitat (includ6 ing habitat during the primary nesting season 

7 for critical birds in the area); and 

8 ‘‘(B) described in subparagraph (B) or (C) 

9 of paragraph (3); 

10 ‘‘(3) consistent with the conservation of soil, 

11 water quality, and wildlife habitat (including habitat 

12 during the primary nesting season for critical birds 

13 in the area) and in exchange for a reduction of not 

14 less than 25 percent in the annual rental rate for 

15 the acres covered by the authorized activity— 

16 ‘‘(A) managed harvesting and other com17 mercial use (including the managed harvesting 

18 of biomass), except that in permitting those ac19 tivities the Secretary, in coordination with the 

20 State technical committee— 

21 ‘‘(i) shall develop appropriate vegeta22 tion management requirements; and 

23 ‘‘(ii) shall identify periods during 

24 which the activities may be conducted, 

25 such that the frequency is at least once 
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1 every 5 years but not more than once every 

2 3 years; 

3 ‘‘(B) prescribed grazing for the control of 

4 invasive species, which may be conducted annu5 ally; 

6 ‘‘(C) routine grazing, except that in per7 mitting routine grazing, the Secretary, in co8 ordination with the State technical committee— 

9 ‘‘(i) shall develop appropriate vegeta10 tion management requirements and stock11 ing rates for the land that are suitable for 

12 continued routine grazing; and 

13 ‘‘(ii) shall identify the periods during 

14 which routine grazing may be conducted, 

15 such that the frequency is not more than 

16 once every 2 years, taking into consider17 ation regional differences such as— 

18 ‘‘(I) climate, soil type, and nat19 ural resources; 

20 ‘‘(II) the number of years that 

21 should be required between routine 

22 grazing activities; and 

23 ‘‘(III) how often during a year in 

24 which routine grazing is permitted 
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1 that routine grazing should be allowed 

2 to occur; and 

3 ‘‘(D) the installation of wind turbines and 

4 associated access, except that in permitting the 

5 installation of wind turbines, the Secretary shall 

6 determine the number and location of wind tur7 bines that may be installed, taking into ac8 count— 

9 ‘‘(i) the location, size, and other phys10 ical characteristics of the land; 

11 ‘‘(ii) the extent to which the land con12 tains threatened or endangered wildlife and 

13 wildlife habitat; and 

14 ‘‘(iii) the purposes of the conservation 

15 reserve program under this subchapter; 

16 and 

17 ‘‘(4) the intermittent and seasonal use of vege18 tative buffer practices incidental to agricultural pro19 duction on land adjacent to the buffer such that the 

20 permitted use does not destroy the permanent vege21 tative cover. 

22 ‘‘(c) AUTHORIZED ACTIVITIES ON GRASSLAND.— 

23 Notwithstanding section 1232(a)(8), for eligible land de24 scribed in section 1231(b)(3), the Secretary shall permit 

25 the following activities: 
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1 ‘‘(1) Common grazing practices, including 

2 maintenance and necessary cultural practices, on the 

3 land in a manner that is consistent with maintaining 

4 the viability of grassland, forb, and shrub species ap5 propriate to that locality. 

6 ‘‘(2) Haying, mowing, or harvesting for seed 

7 production, subject to appropriate restrictions dur8 ing the primary nesting season for critical birds in 

9 the area. 

10 ‘‘(3) Fire presuppression, rehabilitation, and 

11 construction of fire breaks. 

12 ‘‘(4) Grazing-related activities, such as fencing 

13 and livestock watering. 

14 ‘‘(d) RESOURCE CONSERVING USE.— 

15 ‘‘(1) IN GENERAL.—Beginning on the date that 

16 is 1 year before the date of termination of a contract 

17 under the program, the Secretary shall allow an 

18 owner or operator to make conservation and land 

19 improvements that facilitate maintaining protection 

20 of highly erodible land after expiration of the con21 tract. 

22 ‘‘(2) CONSERVATION PLAN.—The Secretary 

23 shall require an owner or operator carrying out the 

24 activities described in paragraph (1) to develop and 

25 implement a conservation plan. 
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1 ‘‘(3) REENROLLMENT PROHIBITED.—Land al2 tered under paragraph (1) may not be reenrolled in 

3 the conservation reserve program for 5 years. 

4 ‘‘(4) PAYMENT.—The Secretary shall provide 

5 an annual payment that is reduced in an amount 

6 commensurate with any income or other compensa7 tion received as a result of the activities carried out 

8 under paragraph (1).’’. 

9 SEC. 2005. PAYMENTS. 

10 (a) TREES, WINDBREAKS, SHELTERBELTS, AND

11 WILDLIFE CORRIDORS.—Section 1234(b)(3)(A) of the 

12 Food Security Act of 1985 (16 U.S.C. 3834(b)(3)(A)) is 

13 amended— 

14 (1) in clause (i), by inserting ‘‘and’’ after the 

15 semicolon; 

16 (2) by striking clause (ii); and 

17 (3) by redesignating clause (iii) as clause (ii). 

18 (b) INCENTIVES.—Section 1234(b)(3)(B) of the Food 

19 Security Act of 1985 (16 U.S.C. 3834(b)(3)(B)) is amend20 ed— 

21 (1) in clause (i), by inserting ‘‘, practices to im22 prove the condition of resources on the land,’’ after 

23 ‘‘operator)’’; and 

24 (2) by adding at the end the following: 
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1 ‘‘(iii) INCENTIVES.—In making rental 

2 payments to an owner or operator of land 

3 described in subparagraph (A), the Sec4 retary may provide incentive payments suf5 ficient to encourage proper thinning and 

6 practices to improve the condition of re7 sources on the land.’’. 

8 (c) ANNUAL RENTAL PAYMENTS.—Section 1234(c) 

9 of the Food Security Act of 1985 (16 U.S.C. 3834(c)) is 

10 amended— 

11 (1) in paragraph (1), by inserting ‘‘and other 

12 eligible land’’ after ‘‘highly erodible cropland’’ both 

13 places it appears; 

14 (2) by striking paragraph (2) and inserting the 

15 following: 

16 ‘‘(2) METHODS OF DETERMINATION.— 

17 ‘‘(A) IN GENERAL.—The amounts payable 

18 to owners or operators in the form of rental 

19 payments under contracts entered into under 

20 this subchapter may be determined through— 

21 ‘‘(i) the submission of bids for such 

22 contracts by owners and operators in such 

23 manner as the Secretary may prescribe; or 

24 ‘‘(ii) such other means as the Sec25 retary determines are appropriate. 
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1 ‘‘(B) GRASSLAND.—In the case of eligible 

2 land described in section 1231(b)(3), the Sec3 retary shall make annual payments in an 

4 amount that is not more than 75 percent of the 

5 grazing value of the land covered by the con6 tract.’’; and 

7 (3) in paragraph (5)(A)— 

8 (A) by striking ‘‘The Secretary’’ and in9 serting the following: 

10 ‘‘(i) SURVEY.—The Secretary’’; and 

11 (B) by adding at the end the following: 

12 ‘‘(ii) USE.—The Secretary may use 

13 the survey of dryland cash rental rates de14 scribed in clause (i) as a factor in deter15 mining rental rates under this section as 

16 the Secretary determines appropriate.’’. 

17 (d) PAYMENT SCHEDULE.—Section 1234 of the Food 

18 Security Act of 1985 (16 U.S.C. 3834) is amended by 

19 striking subsection (d) and inserting the following: 

20 ‘‘(d) PAYMENT SCHEDULE.— 

21 ‘‘(1) IN GENERAL.—Except as otherwise pro22 vided in this section, payments under this sub23 chapter shall be made in cash in such amount and 

24 on such time schedule as is agreed on and specified 

25 in the contract. 
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1 ‘‘(2) SOURCE.—Payments under this sub2 chapter shall be made using the funds of the Com3 modity Credit Corporation. 

4 ‘‘(3) ADVANCE PAYMENT.—Payments under 

5 this subchapter may be made in advance of deter6 mination of performance.’’. 

7 (e) PAYMENT LIMITATION.—Section 1234(f) of the 

8 Food Security Act of 1985 (16 U.S.C. 3834(f)) is amend9 ed— 

10 (1) in paragraph (1), by striking ‘‘, including 

11 rental payments made in the form of in-kind com12 modities,’’; 

13 (2) by striking paragraph (3); and 

14 (3) by redesignating paragraph (4) as para15 graph (2). 

16 SEC. 2006. CONTRACT REQUIREMENTS. 

17 Section 1235(f) of the Food Security Act of 1985 (16 

18 U.S.C. 3835(f)) is amended— 

19 (1) in paragraph (1)— 

20 (A) in the matter preceding subparagraph 

21 (A), by striking ‘‘DUTIES’’ and all that follows 

22 through ‘‘a beginning farmer’’ and inserting 

23 ‘‘TRANSITION TO COVERED FARMER OR RANCH24 ER.—In the case of a contract modification ap25 proved in order to facilitate the transfer of land 
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1 subject to a contract from a retired farmer or 

2 rancher to a beginning farmer’’; 

3 (B) in subparagraph (D), by striking ‘‘the 

4 farmer or rancher’’ and inserting ‘‘the covered 

5 farmer or rancher’’; and 

6 (C) in subparagraph (E), by striking ‘‘sec7 tion 1001A(b)(3)(B)’’ and inserting ‘‘section 

8 1001’’; and 

9 (2) in paragraph (2), by striking ‘‘requirement 

10 of section 1231(h)(4)(B)’’ and inserting ‘‘option pro11 vided under section 1234(c)(2)(A)(ii)’’. 

12 SEC. 2007. CONVERSION OF LAND SUBJECT TO CONTRACT 

13 TO OTHER CONSERVING USES. 

14 Section 1235A of the Food Security Act of 1985 (16 

15 U.S.C. 3835a) is repealed. 

16 SEC. 2008. EFFECTIVE DATE. 

17 (a) IN GENERAL.—The amendments made by this 

18 title shall take effect on October 1, 2012, except, the 

19 amendment made by section 2001(d), which shall take ef20 fect on the date of enactment of this Act. 

21 (b) EFFECT ON EXISTING CONTRACTS.— 

22 (1) IN GENERAL.—Except as provided in para23 graph (2), the amendments made by this title shall 

24 not affect the validity or terms of any contract en25 tered into by the Secretary of Agriculture under sub-
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1 chapter B of chapter 1 of subtitle D of title XII of 

2 the Food Security Act of 1985 (16 U.S.C. 3831 et 

3 seq.) before October 1, 2012, or any payments re4 quired to be made in connection with the contract. 

5 (2) UPDATING OF EXISTING CONTRACTS.—The 

6 Secretary shall permit an owner or operator with a 

7 contract entered into under subchapter B of chapter 

8 1 of subtitle D of title XII of the Food Security Act 

9 of 1985 (16 U.S.C. 3831 et seq.) before October 1, 

10 2012, to update the contract to reflect the activities 

11 and uses of land under contract permitted under the 

12 terms and conditions of paragraphs (1) and (2) of 

13 section 1233(b) of that Act (as amended by section 

14 2004). 

15 Subtitle B—Conservation 

16 Stewardship Program 

17 SEC. 2101. CONSERVATION STEWARDSHIP PROGRAM. 

18 (a) REVISION OF CURRENT PROGRAM.—Subchapter 

19 B of chapter 2 of subtitle D of title XII of the Food Secu20 rity Act of 1985 (16 U.S.C. 3838d et seq.) is amended 

21 to read as follows: 

22 ‘‘Subchapter B—Conservation Stewardship 

23 Program 

24 ‘‘SEC. 1238D. DEFINITIONS. 

25 ‘‘In this subchapter: 
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1 ‘‘(1) AGRICULTURAL OPERATION.—The term 

2 ‘agricultural operation’ means all eligible land, 

3 whether or not contiguous, that is— 

4 ‘‘(A) under the effective control of a pro5 ducer at the time the producer enters into a 

6 contract under the program; and 

7 ‘‘(B) operated with equipment, labor, man8 agement, and production or cultivation prac9 tices that are substantially separate from other 

10 agricultural operations, as determined by the 

11 Secretary. 

12 ‘‘(2) CONSERVATION ACTIVITIES.— 

13 ‘‘(A) IN GENERAL.—The term ‘conserva14 tion activities’ means conservation systems, 

15 practices, or management measures. 

16 ‘‘(B) INCLUSIONS.—The term ‘conserva17 tion activities’ includes— 

18 ‘‘(i) structural measures, vegetative 

19 measures, and land management measures, 

20 including agriculture drainage manage21 ment systems, as determined by the Sec22 retary; and 

23 ‘‘(ii) planning needed to address a pri24 ority resource concern. 
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1 ‘‘(3) CONSERVATION STEWARDSHIP PLAN.— 

2 The term ‘conservation stewardship plan’ means a 

3 plan that— 

4 ‘‘(A) identifies and inventories priority re5 source concerns; 

6 ‘‘(B) establishes benchmark data and con7 servation objectives; 

8 ‘‘(C) describes conservation activities to be 

9 implemented, managed, or improved; and 

10 ‘‘(D) includes a schedule and evaluation 

11 plan for the planning, installation, and manage12 ment of the new and existing conservation ac13 tivities. 

14 ‘‘(4) ELIGIBLE LAND.— 

15 ‘‘(A) IN GENERAL.—The term ‘eligible 

16 land’ means— 

17 ‘‘(i) private and tribal land on which 

18 agricultural commodities, livestock, or for19 est-related products are produced; and 

20 ‘‘(ii) land associated with the land de21 scribed in clause (i) on which priority re22 source concerns could be addressed 

23 through a contract under the program. 

24 ‘‘(B) INCLUSIONS.—The term ‘eligible 

25 land’ includes— 
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1 ‘‘(i) cropland; 

2 ‘‘(ii) grassland; 

3 ‘‘(iii) rangeland; 

4 ‘‘(iv) pastureland; 

5 ‘‘(v) nonindustrial private forest land; 

6 and 

7 ‘‘(vi) other agricultural land (includ8 ing cropped woodland, marshes, and agri9 cultural land used for the production of 

10 livestock), as determined by the Secretary. 

11 ‘‘(5) PRIORITY RESOURCE CONCERN.—The 

12 term ‘priority resource concern’ means a natural re13 source concern or problem, as determined by the 

14 Secretary, that— 

15 ‘‘(A) is identified at the national, State or 

16 local level, as a priority for a particular area of 

17 the State; 

18 ‘‘(B) represents a significant concern in a 

19 State or region; and 

20 ‘‘(C) is likely to be addressed successfully 

21 through the implementation of conservation ac22 tivities under this program. 

23 ‘‘(6) PROGRAM.—The term ‘program’ means 

24 the conservation stewardship program established by 

25 this subchapter. 
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1 ‘‘(7) STEWARDSHIP THRESHOLD.—The term 

2 ‘stewardship threshold’ means the level of manage3 ment required, as determined by the Secretary, to 

4 conserve and improve the quality and condition of a 

5 natural resource. 

6 ‘‘SEC. 1238E. CONSERVATION STEWARDSHIP PROGRAM. 

7 ‘‘(a) ESTABLISHMENT AND PURPOSE.—During each 

8 of fiscal years 2013 through 2017, the Secretary shall 

9 carry out a conservation stewardship program to encour10 age producers to address priority resource concerns and 

11 improve and conserve the quality and condition of natural 

12 resources in a comprehensive manner— 

13 ‘‘(1) by undertaking additional conservation ac14 tivities; and 

15 ‘‘(2) by improving, maintaining, and managing 

16 existing conservation activities. 

17 ‘‘(b) EXCLUSIONS.— 

18 ‘‘(1) LAND ENROLLED IN OTHER CONSERVA19 TION PROGRAMS.—Subject to paragraph (2), the fol20 lowing land (even if covered by the definition of eli21 gible land) is not eligible for enrollment in the pro22 gram: 

23 ‘‘(A) Land enrolled in the conservation re24 serve program. 
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1 ‘‘(B) Land enrolled in the Agricultural 

2 Conservation Easement Program in a wetland 

3 easement. 

4 ‘‘(C) Land enrolled in the conservation se5 curity program. 

6 ‘‘(2) CONVERSION TO CROPLAND.—Eligible 

7 land used for crop production after October 1, 2012, 

8 that had not been planted, considered to be planted, 

9 or devoted to crop production for at least 4 of the 

10 6 years preceding that date shall not be the basis for 

11 any payment under the program, unless the land 

12 does not meet the requirement because— 

13 ‘‘(A) the land had previously been enrolled 

14 in the conservation reserve program; 

15 ‘‘(B) the land has been maintained using 

16 long-term crop rotation practices, as determined 

17 by the Secretary; or 

18 ‘‘(C) the land is incidental land needed for 

19 efficient operation of the farm or ranch, as de20 termined by the Secretary. 

21 ‘‘SEC. 1238F. STEWARDSHIP CONTRACTS. 

22 ‘‘(a) SUBMISSION OF CONTRACT OFFERS.—To be eli23 gible to participate in the conservation stewardship pro24 gram, a producer shall submit a contract offer for the ag25 ricultural operation that— 
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1 ‘‘(1) demonstrates to the satisfaction of the 

2 Secretary that the producer, at the time of the con3 tract offer, is meeting the stewardship threshold for 

4 at least 2 priority resource concerns; and 

5 ‘‘(2) would, at a minimum, meet or exceed the 

6 stewardship threshold for at least 1 additional pri7 ority resource concern by the end of the stewardship 

8 contract by— 

9 ‘‘(A) installing and adopting additional 

10 conservation activities; and 

11 ‘‘(B) improving, maintaining, and man12 aging existing conservation activities on the ag13 ricultural operation in a manner that increases 

14 or extends the conservation benefits in place at 

15 the time the contract offer is accepted by the 

16 Secretary. 

17 ‘‘(b) EVALUATION OF CONTRACT OFFERS.— 

18 ‘‘(1) RANKING OF APPLICATIONS.—In evalu19 ating contract offers the Secretary shall rank appli20 cations based on— 

21 ‘‘(A) the level of conservation treatment on 

22 all applicable priority resource concerns at the 

23 time of application; 
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1 ‘‘(B) the degree to which the proposed con2 servation activities effectively increase conserva3 tion performance; 

4 ‘‘(C) the number of applicable priority re5 source concerns proposed to be treated to meet 

6 or exceed the stewardship threshold by the end 

7 of the contract; 

8 ‘‘(D) the extent to which other priority re9 source concerns will be addressed to meet or ex10 ceed the stewardship threshold by the end of 

11 the contract period; 

12 ‘‘(E) the extent to which the actual and 

13 anticipated conservation benefits from the con14 tract are provided at the least cost relative to 

15 other similarly beneficial contract offers; and 

16 ‘‘(F) the extent to which priority resource 

17 concerns will be addressed when transitioning 

18 from the conservation reserve program to agri19 cultural production. 

20 ‘‘(2) PROHIBITION.—The Secretary may not as21 sign a higher priority to any application because the 

22 applicant is willing to accept a lower payment than 

23 the applicant would otherwise be eligible to receive. 

24 ‘‘(3) ADDITIONAL CRITERIA.—The Secretary 

25 may develop and use such additional criteria that 
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1 the Secretary determines are necessary to ensure 

2 that national, State, and local priority resource con3 cerns are effectively addressed. 

4 ‘‘(c) ENTERING INTO CONTRACTS.—After a deter5 mination that a producer is eligible for the program under 

6 subsection (a), and a determination that the contract offer 

7 ranks sufficiently high under the evaluation criteria under 

8 subsection (b), the Secretary shall enter into a conserva9 tion stewardship contract with the producer to enroll the 

10 eligible land to be covered by the contract. 

11 ‘‘(d) CONTRACT PROVISIONS.— 

12 ‘‘(1) TERM.—A conservation stewardship con13 tract shall be for a term of 5 years. 

14 ‘‘(2) REQUIRED PROVISIONS.—The conservation 

15 stewardship contract of a producer shall— 

16 ‘‘(A) state the amount of the payment the 

17 Secretary agrees to make to the producer for 

18 each year of the conservation stewardship con19 tract under section 1238G(d); 

20 ‘‘(B) require the producer— 

21 ‘‘(i) to implement a conservation stew22 ardship plan that describes the program 

23 purposes to be achieved through 1 or more 

24 conservation activities; 
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1 ‘‘(ii) to maintain and supply informa2 tion as required by the Secretary to deter3 mine compliance with the conservation 

4 stewardship plan and any other require5 ments of the program; and 

6 ‘‘(iii) not to conduct any activities on 

7 the agricultural operation that would tend 

8 to defeat the purposes of the program; 

9 ‘‘(C) permit all economic uses of the eligi10 ble land that— 

11 ‘‘(i) maintain the agricultural nature 

12 of the land; and 

13 ‘‘(ii) are consistent with the conserva14 tion purposes of the conservation steward15 ship contract; 

16 ‘‘(D) include a provision to ensure that a 

17 producer shall not be considered in violation of 

18 the contract for failure to comply with the con19 tract due to circumstances beyond the control 

20 of the producer, including a disaster or related 

21 condition, as determined by the Secretary; 

22 ‘‘(E) include provisions where upon the 

23 violation of a term or condition of the contract 

24 at any time the producer has control of the 

25 land— 
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1 ‘‘(i) if the Secretary determines that 

2 the violation warrants termination of the 

3 contract— 

4 ‘‘(I) to forfeit all rights to receive 

5 payments under the contract; and 

6 ‘‘(II) to refund all or a portion of 

7 the payments received by the producer 

8 under the contract, including any in9 terest on the payments, as determined 

10 by the Secretary; or 

11 ‘‘(ii) if the Secretary determines that 

12 the violation does not warrant termination 

13 of the contract, to refund or accept adjust14 ments to the payments provided to the pro15 ducer, as the Secretary determines to be 

16 appropriate; 

17 ‘‘(F) include provisions in accordance with 

18 paragraphs (3) and (4) of this section; and 

19 ‘‘(G) include any additional provisions the 

20 Secretary determines are necessary to carry out 

21 the program. 

22 ‘‘(3) CHANGE OF INTEREST IN LAND SUBJECT

23 TO A CONTRACT.— 

24 ‘‘(A) IN GENERAL.—At the time of appli25 cation, a producer shall have control of the eli-
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1 gible land to be enrolled in the program. Except 

2 as provided in subparagraph (B), a change in 

3 the interest of a producer in eligible land cov4 ered by a contract under the program shall re5 sult in the termination of the contract with re6 gard to that land. 

7 ‘‘(B) TRANSFER OF DUTIES AND

8 RIGHTS.—Subparagraph (A) shall not apply 

9 if— 

10 ‘‘(i) within a reasonable period of time 

11 (as determined by the Secretary) after the 

12 date of the change in the interest in all or 

13 a portion of the land covered by a contract 

14 under the program, the transferee of the 

15 land provides written notice to the Sec16 retary that duties and rights under the 

17 contract have been transferred to, and as18 sumed by, the transferee for the portion of 

19 the land transferred; 

20 ‘‘(ii) the transferee meets the eligi21 bility requirements of the program; and 

22 ‘‘(iii) the Secretary approves the 

23 transfer of all duties and rights under the 

24 contract. 
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1 ‘‘(4) MODIFICATION AND TERMINATION OF

2 CONTRACTS.— 

3 ‘‘(A) VOLUNTARY MODIFICATION OR TER4 MINATION.—The Secretary may modify or ter5 minate a contract with a producer if— 

6 ‘‘(i) the producer agrees to the modi7 fication or termination; and 

8 ‘‘(ii) the Secretary determines that 

9 the modification or termination is in the 

10 public interest. 

11 ‘‘(B) INVOLUNTARY TERMINATION.—The 

12 Secretary may terminate a contract if the Sec13 retary determines that the producer violated the 

14 contract. 

15 ‘‘(5) REPAYMENT.—If a contract is terminated, 

16 the Secretary may, consistent with the purposes of 

17 the program— 

18 ‘‘(A) allow the producer to retain payments 

19 already received under the contract; or 

20 ‘‘(B) require repayment, in whole or in 

21 part, of payments received and assess liquidated 

22 damages. 

23 ‘‘(e) CONTRACT RENEWAL.—At the end of the initial 

24 5-year contract period, the Secretary may allow the pro-
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1 ducer to renew the contract for 1 additional 5-year period 

2 if the producer— 

3 ‘‘(1) demonstrates compliance with the terms of 

4 the existing contract; 

5 ‘‘(2) agrees to adopt and continue to integrate 

6 conservation activities across the entire agricultural 

7 operation as determined by the Secretary; and 

8 ‘‘(3) agrees, at a minimum, to meet or exceed 

9 the stewardship threshold for at least 2 additional 

10 priority resource concerns on the agricultural oper11 ation by the end of the contract period. 

12 ‘‘SEC. 1238G. DUTIES OF THE SECRETARY. 

13 ‘‘(a) IN GENERAL.—To achieve the conservation 

14 goals of a contract under the conservation stewardship 

15 program, the Secretary shall— 

16 ‘‘(1) make the program available to eligible pro17 ducers on a continuous enrollment basis with 1 or 

18 more ranking periods, 1 of which shall occur in the 

19 first quarter of each fiscal year; 

20 ‘‘(2) identify not less than 5 priority resource 

21 concerns in a particular watershed or other appro22 priate region or area within a State; and 

23 ‘‘(3) establish a science-based stewardship 

24 threshold for each priority resource concern identi25 fied under subparagraph (2). 
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1 ‘‘(b) ALLOCATION TO STATES.—The Secretary shall 

2 allocate acres to States for enrollment, based— 

3 ‘‘(1) primarily on each State’s proportion of eli4 gible land to the total acreage of eligible land in all 

5 States; and 

6 ‘‘(2) also on consideration of— 

7 ‘‘(A) the extent and magnitude of the con8 servation needs associated with agricultural 

9 production in each State; 

10 ‘‘(B) the degree to which implementation 

11 of the program in the State is, or will be, effec12 tive in helping producers address those needs; 

13 and 

14 ‘‘(C) other considerations to achieve equi15 table geographic distribution of funds, as deter16 mined by the Secretary. 

17 ‘‘(c) ACREAGE ENROLLMENT LIMITATION.—During 

18 the period beginning on October 1, 2012, and ending on 

19 September 30, 2021, the Secretary shall, to the maximum 

20 extent practicable— 

21 ‘‘(1) enroll in the program an additional 

22 10,348,000 acres for each fiscal year; and 

23 ‘‘(2) manage the program to achieve a national 

24 average rate of $18 per acre, which shall include the 

25 costs of all financial assistance, technical assistance, 
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1 and any other expenses associated with enrollment 

2 or participation in the program. 

3 ‘‘(d) CONSERVATION STEWARDSHIP PAYMENTS.— 

4 ‘‘(1) AVAILABILITY OF PAYMENTS.—The Sec5 retary shall provide annual payments under the pro6 gram to compensate the producer for— 

7 ‘‘(A) installing and adopting additional 

8 conservation activities; and 

9 ‘‘(B) improving, maintaining, and man10 aging conservation activities in place at the op11 eration of the producer at the time the contract 

12 offer is accepted by the Secretary. 

13 ‘‘(2) PAYMENT AMOUNT.—The amount of the 

14 conservation stewardship annual payment shall be 

15 determined by the Secretary and based, to the max16 imum extent practicable, on the following factors: 

17 ‘‘(A) Costs incurred by the producer asso18 ciated with planning, design, materials, installa19 tion, labor, management, maintenance, or train20 ing. 

21 ‘‘(B) Income forgone by the producer. 

22 ‘‘(C) Expected conservation benefits. 

23 ‘‘(D) The extent to which priority resource 

24 concerns will be addressed through the installa-
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1 tion and adoption of conservation activities on 

2 the agricultural operation. 

3 ‘‘(E) The level of stewardship in place at 

4 the time of application and maintained over the 

5 term of the contract. 

6 ‘‘(F) The degree to which the conservation 

7 activities will be integrated across the entire ag8 ricultural operation for all applicable priority 

9 resource concerns over the term of the contract. 

10 ‘‘(G) Such other factors as determined by 

11 the Secretary. 

12 ‘‘(3) EXCLUSIONS.—A payment to a producer 

13 under this subsection shall not be provided for— 

14 ‘‘(A) the design, construction, or mainte15 nance of animal waste storage or treatment fa16 cilities or associated waste transport or transfer 

17 devices for animal feeding operations; or 

18 ‘‘(B) conservation activities for which there 

19 is no cost incurred or income forgone to the 

20 producer. 

21 ‘‘(4) DELIVERY OF PAYMENTS.—In making 

22 stewardship payments, the Secretary shall, to the ex23 tent practicable— 

24 ‘‘(A) prorate conservation performance 

25 over the term of the contract so as to accommo-
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1 date, to the extent practicable, producers earn2 ing equal annual stewardship payments in each 

3 fiscal year; and 

4 ‘‘(B) make stewardship payments as soon 

5 as practicable after October 1 of each fiscal 

6 year for activities carried out in the previous 

7 fiscal year. 

8 ‘‘(e) SUPPLEMENTAL PAYMENTS FOR RESOURCE9 CONSERVING CROP ROTATIONS.— 

10 ‘‘(1) AVAILABILITY OF PAYMENTS.—The Sec11 retary shall provide additional payments to pro12 ducers that, in participating in the program, agree 

13 to adopt resource-conserving crop rotations to 

14 achieve beneficial crop rotations as appropriate for 

15 the eligible land of the producers. 

16 ‘‘(2) BENEFICIAL CROP ROTATIONS.—The Sec17 retary shall determine whether a resource-conserving 

18 crop rotation is a beneficial crop rotation eligible for 

19 additional payments under paragraph (1), based on 

20 whether the resource-conserving crop rotation is de21 signed to provide natural resource conservation and 

22 production benefits. 

23 ‘‘(3) ELIGIBILITY.—To be eligible to receive a 

24 payment described in paragraph (1), a producer 
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1 shall agree to adopt and maintain the resource-con2 serving crop rotations for the term of the contract. 

3 ‘‘(4) RESOURCE-CONSERVING CROP ROTA4 TION.—In this subsection, the term ‘resource-con5 serving crop rotation’ means a crop rotation that— 

6 ‘‘(A) includes at least 1 resource con7 serving crop (as defined by the Secretary); 

8 ‘‘(B) reduces erosion; 

9 ‘‘(C) improves soil fertility and tilth; 

10 ‘‘(D) interrupts pest cycles; and 

11 ‘‘(E) in applicable areas, reduces depletion 

12 of soil moisture or otherwise reduces the need 

13 for irrigation. 

14 ‘‘(f) PAYMENT LIMITATIONS.—A person or legal enti15 ty may not receive, directly or indirectly, payments under 

16 the program that, in the aggregate, exceed $200,000 

17 under all contracts entered into during fiscal years 2013 

18 through 2017, excluding funding arrangements with In19 dian tribes, regardless of the number of contracts entered 

20 into under the program by the person or legal entity. 

21 ‘‘(g) SPECIALTY CROP AND ORGANIC PRODUCERS.— 

22 The Secretary shall ensure that outreach and technical as23 sistance are available, and program specifications are ap24 propriate to enable specialty crop and organic producers 

25 to participate in the program. 
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1 ‘‘(h) COORDINATION WITH ORGANIC CERTIFI2 CATION.—The Secretary shall establish a transparent 

3 means by which producers may initiate organic certifi4 cation under the Organic Foods Production Act of 1990 

5 (7 U.S.C. 6501 et seq.) while participating in a contract 

6 under the program. 

7 ‘‘(i) REGULATIONS.—The Secretary shall promulgate 

8 regulations that— 

9 ‘‘(1) prescribe such other rules as the Secretary 

10 determines to be necessary to ensure a fair and rea11 sonable application of the limitations established 

12 under subsection (f); and 

13 ‘‘(2) otherwise enable the Secretary to carry out 

14 the program.’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall take effect on October 1, 2012. 

17 (c) EFFECT ON EXISTING CONTRACTS.— 

18 (1) IN GENERAL.—The amendment made by 

19 this section shall not affect the validity or terms of 

20 any contract entered into by the Secretary of Agri21 culture under subchapter B of chapter 2 of subtitle 

22 D of title XII of the Food Security Act of 1985 (16 

23 U.S.C. 3838d et seq.) before October 1, 2012, or 

24 any payments required to be made in connection 

25 with the contract. 
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1 (2) CONSERVATION STEWARDSHIP PROGRAM.— 

2 Funds made available under section 1241(a)(4) of 

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

4 3841(a)(4)) (as amended by section 2601(a)) may 

5 be used to administer and make payments to pro6 gram participants enrolled into contracts during any 

7 of fiscal years 2009 through 2012. 

8 Subtitle C—Environmental Quality 

9 Incentives Program 

10 SEC. 2201. PURPOSES. 

11 Section 1240 of the Food Security Act of 1985 (16 

12 U.S.C. 3839aa) is amended— 

13 (1) in paragraph (3)— 

14 (A) in subparagraph (A), by striking 

15 ‘‘and’’ at the end; 

16 (B) by redesignating subparagraph (B) as 

17 subparagraph (C) and, in such subparagraph, 

18 by inserting ‘‘and’’ after the semicolon; and 

19 (C) by inserting after subparagraph (A) 

20 the following: 

21 ‘‘(B) develop and improve wildlife habitat; 

22 and’’; 

23 (2) in paragraph (4), by striking ‘‘; and’’ and 

24 inserting a period; and 

25 (3) by striking paragraph (5). 
201 

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1 SEC. 2202. DEFINITIONS. 

2 Section 1240A of the Food Security Act of 1985 (16 

3 U.S.C. 3839aa–1) is amended— 

4 (1) by striking paragraph (2) and redesignating 

5 paragraphs (3) through (6) as paragraphs (2) 

6 through (5), respectively; and 

7 (2) in paragraph (2) (as so redesignated), by 

8 inserting ‘‘established under the Organic Foods Pro9 duction Act of 1990 (7 U.S.C. 6501 et seq.)’’ after 

10 ‘‘national organic program’’. 

11 SEC. 2203. ESTABLISHMENT AND ADMINISTRATION. 

12 Section 1240B of the Food Security Act of 1985 (16 

13 U.S.C. 3839aa–2) is amended— 

14 (1) in subsection (a), by striking ‘‘2014’’ and 

15 inserting ‘‘2017’’; 

16 (2) in subsection (b), by striking paragraph (2) 

17 and inserting the following: 

18 ‘‘(2) TERM.—A contract under the program 

19 shall have a term that does not exceed 10 years.’’; 

20 (3) in subsection (d)— 

21 (A) in paragraph (3), by striking subpara22 graphs (A) through (G) and inserting the fol23 lowing: 

24 ‘‘(A) soil health; 

25 ‘‘(B) water quality and quantity improve26 ment; 
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1 ‘‘(C) nutrient management; 

2 ‘‘(D) pest management; 

3 ‘‘(E) air quality improvement; 

4 ‘‘(F) wildlife habitat development, includ5 ing pollinator habitat; 

6 ‘‘(G) invasive species management; or 

7 ‘‘(H) other resource issues of regional or 

8 national significance, as determined by the Sec9 retary.’’; and 

10 (B) in paragraph (4)— 

11 (i) in subparagraph (A) in the matter 

12 preceding clause (i), by inserting ‘‘, veteran 

13 farmer or rancher (as defined in section 

14 2501(e) of the Food, Agriculture, Con15 servation, and Trade Act of 1990 (7 

16 U.S.C. 2279(e))),’’ before ‘‘or a beginning 

17 farmer or rancher’’; and 

18 (ii) by striking subparagraph (B) and 

19 inserting the following: 

20 ‘‘(B) ADVANCE PAYMENTS.— 

21 ‘‘(i) IN GENERAL.—Not more than 30 

22 percent of the amount determined under 

23 subparagraph (A) may be provided in ad24 vance for the purpose of purchasing mate25 rials or contracting. 
203 

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1 ‘‘(ii) RETURN OF FUNDS.—If funds 

2 provided in advance are not expended dur3 ing the 90-day period beginning on the 

4 date of receipt of the funds, the funds shall 

5 be returned within a reasonable time 

6 frame, as determined by the Secretary.’’; 

7 (4) by striking subsection (f) and inserting the 

8 following: 

9 ‘‘(f) ALLOCATION OF FUNDING.— 

10 ‘‘(1) LIVESTOCK.—For each of fiscal years 

11 2013 through 2017, at least 60 percent of the funds 

12 made available for payments under the program 

13 shall be targeted at practices relating to livestock 

14 production. 

15 ‘‘(2) WILDLIFE HABITAT.—For each of fiscal 

16 years 2013 through 2017, at least 5 percent of the 

17 funds made available for payments under the pro18 gram shall be targeted at practices benefitting wild19 life habitat under subsection (g).’’; and 

20 (5) by striking subsection (g) and inserting the 

21 following: 

22 ‘‘(g) WILDLIFE HABITAT INCENTIVE PRACTICE.— 

23 The Secretary shall provide payments under the program 

24 for conservation practices that support the restoration, de-
204 

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1 velopment, and improvement of wildlife habitat on eligible 

2 land, including— 

3 ‘‘(1) upland wildlife habitat; 

4 ‘‘(2) wetland wildlife habitat; 

5 ‘‘(3) habitat for threatened and endangered 

6 species; 

7 ‘‘(4) fish habitat; 

8 ‘‘(5) habitat on pivot corners and other irreg9 ular areas of a field; and 

10 ‘‘(6) other types of wildlife habitat, as deter11 mined by the Secretary.’’. 

12 SEC. 2204. EVALUATION OF APPLICATIONS. 

13 Section 1240C(b) of the Food Security Act of 1985 

14 (16 U.S.C. 3839aa–3(b)) is amended— 

15 (1) in paragraph (1), by striking ‘‘environ16 mental’’ and inserting ‘‘conservation’’; and 

17 (2) in paragraph (3), by striking ‘‘purpose of 

18 the environmental quality incentives program speci19 fied in section 1240(1)’’ and inserting ‘‘purposes of 

20 the program’’. 

21 SEC. 2205. DUTIES OF PRODUCERS. 

22 Section 1240D(2) of the Food Security Act of 1985 

23 (16 U.S.C. 3839aa–4(2)) is amended by striking ‘‘farm, 

24 ranch, or forest’’ and inserting ‘‘enrolled’’. 
205 

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1 SEC. 2206. LIMITATION ON PAYMENTS. 

2 Section 1240G of the Food Security Act of 1985 (16 

3 U.S.C. 3839aa–7) is amended— 

4 (1) in subsection (a)— 

5 (A) by striking ‘‘by the person or entity 

6 during any six-year period,’’ and inserting 

7 ‘‘during fiscal years 2013 through 2017’’; and 

8 (B) by striking ‘‘federally recognized’’ and 

9 all that follows through the period and inserting 

10 ‘‘Indian tribes under section 1244(l).’’; and 

11 (2) in subsection (b)(2), by striking ‘‘any six12 year period’’ and inserting ‘‘fiscal years 2013 

13 through 2017’’. 

14 SEC. 2207. CONSERVATION INNOVATION GRANTS AND PAY15 MENTS. 

16 Section 1240H of the Food Security Act of 1985 (16 

17 U.S.C. 3839aa–8) is amended— 

18 (1) in subsection (b)(2), by striking ‘‘2012’’ 

19 and inserting ‘‘2017’’; and 

20 (2) by adding at the end the following: 

21 ‘‘(c) REPORTING.—Not later than December 31, 

22 2013, and every 2 years thereafter, the Secretary shall 

23 submit to the Committee on Agriculture, Nutrition, and 

24 Forestry of the Senate and the Committee on Agriculture 

25 of the House of Representatives a report on the status 

26 of projects funded under this section, including— 
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†S 3240 ES

1 ‘‘(1) funding awarded; 

2 ‘‘(2) project results; and 

3 ‘‘(3) incorporation of project findings, such as 

4 new technology and innovative approaches, into the 

5 conservation efforts implemented by the Secretary.’’. 

6 SEC. 2208. EFFECTIVE DATE. 

7 (a) IN GENERAL.—The amendments made by this 

8 title shall take effect on October 1, 2012. 

9 (b) EFFECT ON EXISTING CONTRACTS.—The amend10 ments made by this title shall not affect the validity or 

11 terms of any contract entered into by the Secretary of Ag12 riculture under chapter 4 of subtitle D of title XII of the 

13 Food Security Act of 1985 (16 U.S.C. 3839aa et seq.) 

14 before October 1, 2012, or any payments required to be 

15 made in connection with the contract. 

16 Subtitle D—Agricultural 

17 Conservation Easement Program 

18 SEC. 2301. AGRICULTURAL CONSERVATION EASEMENT 

19 PROGRAM. 

20 (a) ESTABLISHMENT.—Title XII of the Food Secu21 rity Act of 1985 is amended by adding at the end the fol22 lowing: 
207 

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1 ‘‘Subtitle H—Agricultural 

2 Conservation Easement Program 

3 ‘‘SEC. 1265. ESTABLISHMENT AND PURPOSES. 

4 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab5 lish an Agricultural Conservation Easement Program for 

6 the conservation of eligible land and natural resources 

7 through easements or other interests in land. 

8 ‘‘(b) PURPOSES.—The purposes of the program are 

9 to— 

10 ‘‘(1) combine the purposes and coordinate the 

11 functions of the wetlands reserve program estab12 lished under section 1237, the grassland reserve pro13 gram established under section 1238N, and the 

14 farmland protection program established under sec15 tion 1238I; 

16 ‘‘(2) restore, protect, and enhance wetland on 

17 eligible land; 

18 ‘‘(3) protect the agricultural use, viability, and 

19 related conservation values of eligible land by lim20 iting nonagricultural uses of that land; and 

21 ‘‘(4) protect grazing uses and related conserva22 tion values by restoring and conserving eligible land. 

23 ‘‘SEC. 1265A. DEFINITIONS. 

24 ‘‘In this subtitle: 
208 

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1 ‘‘(1) AGRICULTURAL LAND EASEMENT.—The 

2 term ‘agricultural land easement’ means an ease3 ment or other interest in eligible land that— 

4 ‘‘(A) is conveyed for the purposes of pro5 tecting natural resources and the agricultural 

6 nature of the land, and of promoting agricul7 tural viability for future generations; and 

8 ‘‘(B) permits the landowner the right to 

9 continue agricultural production and related 

10 uses subject to an agricultural land easement 

11 plan. 

12 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en13 tity’ means— 

14 ‘‘(A) an agency of State or local govern15 ment or an Indian tribe (including farmland 

16 protection board or land resource council estab17 lished under State law); or 

18 ‘‘(B) an organization that is— 

19 ‘‘(i) organized for, and at all times 

20 since the formation of the organization has 

21 been operated principally for, 1 or more of 

22 the conservation purposes specified in 

23 clause (i), (ii), (iii), or (iv) of section 

24 170(h)(4)(A) of the Internal Revenue Code 

25 of 1986; 
209 

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1 ‘‘(ii) an organization described in sec2 tion 501(c)(3) of that Code that is exempt 

3 from taxation under section 501(a) of that 

4 Code; or 

5 ‘‘(iii) described in— 

6 ‘‘(I) paragraph (1) or (2) of sec7 tion 509(a) of that Code; or 

8 ‘‘(II) section 509(a)(3) of that 

9 Code and is controlled by an organiza10 tion described in section 509(a)(2) of 

11 that Code. 

12 ‘‘(3) ELIGIBLE LAND.—The term ‘eligible land’ 

13 means private or tribal land that is— 

14 ‘‘(A) in the case of an agricultural land 

15 easement, agricultural land, including land on a 

16 farm or ranch— 

17 ‘‘(i) that is subject to a pending offer 

18 for purchase from an eligible entity; 

19 ‘‘(ii) that— 

20 ‘‘(I) has prime, unique, or other 

21 productive soil; 

22 ‘‘(II) contains historical or ar23 chaeological resources; or 

24 ‘‘(III) the protection of which will 

25 further a State or local policy con-
210 

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1 sistent with the purposes of the pro2 gram; and 

3 ‘‘(iii) that is— 

4 ‘‘(I) cropland; 

5 ‘‘(II) rangeland; 

6 ‘‘(III) grassland or land that con7 tains forbs, or shrubland for which 

8 grazing is the predominant use; 

9 ‘‘(IV) pastureland; or 

10 ‘‘(V) nonindustrial private forest 

11 land that contributes to the economic 

12 viability of an offered parcel or serves 

13 as a buffer to protect such land from 

14 development; 

15 ‘‘(B) in the case of a wetland easement, a 

16 wetland or related area, including— 

17 ‘‘(i) farmed or converted wetland, to18 gether with the adjacent land that is func19 tionally dependent on that land if the Sec20 retary determines it— 

21 ‘‘(I) is likely to be successfully 

22 restored in a cost effective manner; 

23 and 

24 ‘‘(II) will maximize the wildlife 

25 benefits and wetland functions and 
211 

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1 values as determined by the Secretary 

2 in consultation with the Secretary of 

3 the Interior at the local level; 

4 ‘‘(ii) cropland or grassland that was 

5 used for agricultural production prior to 

6 flooding from the natural overflow of a 

7 closed basin lake or pothole, as determined 

8 by the Secretary, together (where prac9 ticable) with the adjacent land that is 

10 functionally dependent on the cropland or 

11 grassland; 

12 ‘‘(iii) farmed wetland and adjoining 

13 land that— 

14 ‘‘(I) is enrolled in the conserva15 tion reserve program; 

16 ‘‘(II) has the highest wetland 

17 functions and values; and 

18 ‘‘(III) is likely to return to pro19 duction after the land leaves the con20 servation reserve program; 

21 ‘‘(iv) riparian areas that link wetland 

22 that is protected by easements or some 

23 other device that achieves the same pur24 pose as an easement; or 
212 

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1 ‘‘(v) other wetland of an owner that 

2 would not otherwise be eligible if the Sec3 retary determines that the inclusion of 

4 such wetland in such easement would sig5 nificantly add to the functional value of the 

6 easement; and 

7 ‘‘(C) in the case of both an agricultural 

8 land easement or wetland easement, other land 

9 that is incidental to eligible land if the Sec10 retary determines that it is necessary for the ef11 ficient administration of the easements under 

12 this program. 

13 ‘‘(4) PROGRAM.—The term ‘program’ means 

14 the Agricultural Conservation Easement Program 

15 established by this subtitle. 

16 ‘‘(5) WETLAND EASEMENT.—The term ‘wetland 

17 easement’ means a reserved interest in eligible land 

18 that— 

19 ‘‘(A) is defined and delineated in a deed; 

20 and 

21 ‘‘(B) stipulates— 

22 ‘‘(i) the rights, title, and interests in 

23 land conveyed to the Secretary; and 

24 ‘‘(ii) the rights, title, and interests in 

25 land that are reserved to the landowner. 
213 

†S 3240 ES

1 ‘‘SEC. 1265B. AGRICULTURAL LAND EASEMENTS. 

2 ‘‘(a) AVAILABILITY OF ASSISTANCE.—The Secretary 

3 shall facilitate and provide funding for— 

4 ‘‘(1) the purchase by eligible entities of agricul5 tural land easements and other interests in eligible 

6 land; and 

7 ‘‘(2) technical assistance to provide for the con8 servation of natural resources pursuant to an agri9 cultural land easement plan. 

10 ‘‘(b) COST-SHARE ASSISTANCE.— 

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

12 cost-share assistance to eligible entities for pur13 chasing agricultural land easements to protect the 

14 agricultural use, including grazing, and related con15 servation values of eligible land. 

16 ‘‘(2) SCOPE OF ASSISTANCE AVAILABLE.— 

17 ‘‘(A) FEDERAL SHARE.—Subject to sub18 paragraph (C), an agreement described in para19 graph (4) shall provide for a Federal share de20 termined by the Secretary of an amount not to 

21 exceed 50 percent of the fair market value of 

22 the agricultural land easement or other interest 

23 in land, as determined by the Secretary using— 

24 ‘‘(i) the Uniform Standards of Profes25 sional Appraisal Practices; 
214 

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1 ‘‘(ii) an area-wide market analysis or 

2 survey; or 

3 ‘‘(iii) another industry approved meth4 od. 

5 ‘‘(B) NON-FEDERAL SHARE.— 

6 ‘‘(i) IN GENERAL.—Subject to sub7 paragraph (C), under the agreement, the 

8 eligible entity shall provide a share that is 

9 at least equivalent to that provided by the 

10 Secretary. 

11 ‘‘(ii) SOURCE OF CONTRIBUTION.—An 

12 eligible entity may include as part of its 

13 share a charitable donation or qualified 

14 conservation contribution (as defined by 

15 section 170(h) of the Internal Revenue 

16 Code of 1986) from the private landowner 

17 if the eligible entity contributes its own 

18 cash resources in an amount that is at 

19 least 50 percent of the amount contributed 

20 by the Secretary. 

21 ‘‘(C) WAIVER AUTHORITY.—In the case of 

22 grassland of special environmental significance, 

23 as determined by the Secretary, the Secretary 

24 may provide up to 75 percent of the fair market 

25 value of the agricultural land easement. 
215 

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1 ‘‘(3) EVALUATION AND RANKING OF APPLICA2 TIONS.— 

3 ‘‘(A) CRITERIA.—The Secretary shall es4 tablish evaluation and ranking criteria to maxi5 mize the benefit of Federal investment under 

6 the program. 

7 ‘‘(B) CONSIDERATIONS.—In establishing 

8 the criteria, the Secretary shall emphasize sup9 port for— 

10 ‘‘(i) protecting agricultural uses and 

11 related conservation values of the land; and 

12 ‘‘(ii) maximizing the protection of 

13 areas devoted to agricultural use. 

14 ‘‘(C) BIDDING DOWN.—If the Secretary 

15 determines that 2 or more applications for cost16 share assistance are comparable in achieving 

17 the purpose of the program, the Secretary shall 

18 not assign a higher priority to any of those ap19 plications solely on the basis of lesser cost to 

20 the program. 

21 ‘‘(4) AGREEMENTS WITH ELIGIBLE ENTITIES.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 enter into agreements with eligible entities to 

24 stipulate the terms and conditions under which 
216 

†S 3240 ES

1 the eligible entity is permitted to use cost-share 

2 assistance provided under this section. 

3 ‘‘(B) LENGTH OF AGREEMENTS.—An 

4 agreement shall be for a term that is— 

5 ‘‘(i) in the case of an eligible entity 

6 certified under the process described in 

7 paragraph (5), a minimum of 5 years; and 

8 ‘‘(ii) for all other eligible entities, at 

9 least 3, but not more than 5 years. 

10 ‘‘(C) MINIMUM TERMS AND CONDITIONS.— 

11 An eligible entity shall be authorized to use its 

12 own terms and conditions for agricultural land 

13 easements so long as the Secretary determines 

14 such terms and conditions— 

15 ‘‘(i) are consistent with the purposes 

16 of the program; 

17 ‘‘(ii) are permanent or for the max18 imum duration allowed under applicable 

19 State law; 

20 ‘‘(iii) permit effective enforcement of 

21 the conservation purposes of such ease22 ments, including appropriate restrictions 

23 depending on the purposes for which the 

24 easement is acquired; 
217 

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1 ‘‘(iv) include a right of enforcement 

2 for the Secretary if terms of the easement 

3 are not enforced by the holder of the ease4 ment; 

5 ‘‘(v) subject the land purchased to an 

6 agricultural land easement plan that— 

7 ‘‘(I) describes the activities which 

8 promote the long-term viability of the 

9 land to meet the purposes for which 

10 the easement was acquired; 

11 ‘‘(II) requires the management of 

12 grassland according to a grassland 

13 management plan; and 

14 ‘‘(III) includes a conservation 

15 plan, where appropriate, and requires, 

16 at the option of the Secretary, the 

17 conversion of highly erodible cropland 

18 to less intensive uses; and 

19 ‘‘(vi) include a limit on the impervious 

20 surfaces to be allowed that is consistent 

21 with the agricultural activities to be con22 ducted. 

23 ‘‘(D) SUBSTITUTION OF QUALIFIED

24 PROJECTS.—An agreement shall allow, upon 

25 mutual agreement of the parties, substitution of 
218 

†S 3240 ES

1 qualified projects that are identified at the time 

2 of the proposed substitution. 

3 ‘‘(E) EFFECT OF VIOLATION.—If a viola4 tion occurs of a term or condition of an agree5 ment under this subsection— 

6 ‘‘(i) the agreement may be termi7 nated; and 

8 ‘‘(ii) the Secretary may require the el9 igible entity to refund all or part of any 

10 payments received by the entity under the 

11 program, with interest on the payments as 

12 determined appropriate by the Secretary. 

13 ‘‘(5) CERTIFICATION OF ELIGIBLE ENTITIES.— 

14 ‘‘(A) CERTIFICATION PROCESS.—The Sec15 retary shall establish a process under which the 

16 Secretary may— 

17 ‘‘(i) directly certify eligible entities 

18 that meet established criteria; 

19 ‘‘(ii) enter into long-term agreements 

20 with certified eligible entities; and 

21 ‘‘(iii) accept proposals for cost-share 

22 assistance for the purchase of agricultural 

23 land easements throughout the duration of 

24 such agreements. 
219 

†S 3240 ES

1 ‘‘(B) CERTIFICATION CRITERIA.—In order 

2 to be certified, an eligible entity shall dem3 onstrate to the Secretary that the entity will 

4 maintain, at a minimum, for the duration of the 

5 agreement— 

6 ‘‘(i) a plan for administering ease7 ments that is consistent with the purpose 

8 of this subtitle; 

9 ‘‘(ii) the capacity and resources to 

10 monitor and enforce agricultural land ease11 ments; and 

12 ‘‘(iii) policies and procedures to en13 sure— 

14 ‘‘(I) the long-term integrity of 

15 agricultural land easements on eligible 

16 land; 

17 ‘‘(II) timely completion of acqui18 sitions of easements; and 

19 ‘‘(III) timely and complete eval20 uation and reporting to the Secretary 

21 on the use of funds provided under 

22 the program. 

23 ‘‘(C) REVIEW AND REVISION.— 

24 ‘‘(i) REVIEW.—The Secretary shall 

25 conduct a review of eligible entities cer-
220 

†S 3240 ES

1 tified under subparagraph (A) every 3 

2 years to ensure that such entities are 

3 meeting the criteria established under sub4 paragraph (B). 

5 ‘‘(ii) REVOCATION.—If the Secretary 

6 finds that the certified entity no longer 

7 meets the criteria established under sub8 paragraph (B), the Secretary may— 

9 ‘‘(I) allow the certified entity a 

10 specified period of time, at a min11 imum 180 days, in which to take such 

12 actions as may be necessary to meet 

13 the criteria; and 

14 ‘‘(II) revoke the certification of 

15 the entity, if after the specified period 

16 of time, the certified entity does not 

17 meet such criteria. 

18 ‘‘(c) TECHNICAL ASSISTANCE.—The Secretary may 

19 provide technical assistance, if requested, to assist in— 

20 ‘‘(1) compliance with the terms and conditions 

21 of easements; and 

22 ‘‘(2) implementation of an agricultural land 

23 easement plan. 
221 

†S 3240 ES

1 ‘‘SEC. 1265C. WETLAND EASEMENTS. 

2 ‘‘(a) AVAILABILITY OF ASSISTANCE.—The Secretary 

3 shall provide assistance to owners of eligible land to re4 store, protect, and enhance wetland through— 

5 ‘‘(1) easements and related wetland easement 

6 plans; and 

7 ‘‘(2) technical assistance. 

8 ‘‘(b) EASEMENTS.— 

9 ‘‘(1) METHOD OF ENROLLMENT.—The Sec10 retary shall enroll eligible land through the use of— 

11 ‘‘(A) 30-year easements; 

12 ‘‘(B) permanent easements; 

13 ‘‘(C) easements for the maximum duration 

14 allowed under applicable State laws; or 

15 ‘‘(D) as an option for Indian tribes only, 

16 30-year contracts. 

17 ‘‘(2) LIMITATIONS.— 

18 ‘‘(A) INELIGIBLE LAND.—The Secretary 

19 may not acquire easements on— 

20 ‘‘(i) land established to trees under 

21 the conservation reserve program, except in 

22 cases where the Secretary determines it 

23 would further the purposes of the program; 

24 and 
222 

†S 3240 ES

1 ‘‘(ii) farmed wetland or converted wet2 land where the conversion was not com3 menced prior to December 23, 1985. 

4 ‘‘(B) CHANGES IN OWNERSHIP.—No ease5 ment shall be created on land that has changed 

6 ownership during the preceding 24-month pe7 riod unless— 

8 ‘‘(i) the new ownership was acquired 

9 by will or succession as a result of the 

10 death of the previous owner; 

11 ‘‘(ii)(I) the ownership change occurred 

12 because of foreclosure on the land; and 

13 ‘‘(II) immediately before the fore14 closure, the owner of the land exercises a 

15 right of redemption from the mortgage 

16 holder in accordance with State law; or 

17 ‘‘(iii) the Secretary determines that 

18 the land was acquired under circumstances 

19 that give adequate assurances that such 

20 land was not acquired for the purposes of 

21 placing it in the program. 

22 ‘‘(3) EVALUATION AND RANKING OF OFFERS.— 

23 ‘‘(A) CRITERIA.—The Secretary shall es24 tablish evaluation and ranking criteria to maxi-
223 

†S 3240 ES

1 mize the benefit of Federal investment under 

2 the program. 

3 ‘‘(B) CONSIDERATIONS.—When evaluating 

4 offers from landowners, the Secretary may con5 sider— 

6 ‘‘(i) the conservation benefits of ob7 taining an easement or 30-year contract, 

8 including the potential environmental bene9 fits if the land was removed from agricul10 tural production; 

11 ‘‘(ii) the cost-effectiveness of each 

12 easement or 30-year contract, so as to 

13 maximize the environmental benefits per 

14 dollar expended; 

15 ‘‘(iii) whether the landowner or an16 other person is offering to contribute fi17 nancially to the cost of the easement or 

18 30-year contract to leverage Federal funds; 

19 and 

20 ‘‘(iv) such other factors as the Sec21 retary determines are necessary to carry 

22 out the purposes of the program. 

23 ‘‘(C) PRIORITY.—The Secretary shall place 

24 priority on acquiring easements based on the 

25 value of the easement for protecting and en-
224 

†S 3240 ES

1 hancing habitat for migratory birds and other 

2 wildlife. 

3 ‘‘(4) AGREEMENT.—To be eligible to place eligi4 ble land into the program through a wetland ease5 ment, the owner of such land shall enter into an 

6 agreement with the Secretary to— 

7 ‘‘(A) grant an easement on such land to 

8 the Secretary; 

9 ‘‘(B) authorize the implementation of a 

10 wetland easement plan; 

11 ‘‘(C) create and record an appropriate 

12 deed restriction in accordance with applicable 

13 State law to reflect the easement agreed to; 

14 ‘‘(D) provide a written statement of con15 sent to such easement signed by those holding 

16 a security interest in the land; 

17 ‘‘(E) comply with the terms and conditions 

18 of the easement and any related agreements; 

19 and 

20 ‘‘(F) permanently retire any existing crop21 land base and allotment history for the land on 

22 which the easement has been obtained. 

23 ‘‘(5) TERMS AND CONDITIONS OF EASEMENT.— 

24 ‘‘(A) IN GENERAL.—A wetland easement 

25 shall include terms and conditions that— 
225 

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1 ‘‘(i) permit— 

2 ‘‘(I) repairs, improvements, and 

3 inspections on the land that are nec4 essary to maintain existing public 

5 drainage systems; and 

6 ‘‘(II) owners to control public ac7 cess on the easement areas while iden8 tifying access routes to be used for 

9 restoration activities and management 

10 and easement monitoring; 

11 ‘‘(ii) prohibit— 

12 ‘‘(I) the alteration of wildlife 

13 habitat and other natural features of 

14 such land, unless specifically author15 ized by the Secretary; 

16 ‘‘(II) the spraying of such land 

17 with chemicals or the mowing of such 

18 land, except where such spraying or 

19 mowing is authorized by the Secretary 

20 or is necessary— 

21 ‘‘(aa) to comply with Fed22 eral or State noxious weed con23 trol laws; 
226 

†S 3240 ES

1 ‘‘(bb) to comply with a Fed2 eral or State emergency pest 

3 treatment program; or 

4 ‘‘(cc) to meet habitat needs 

5 of specific wildlife species; 

6 ‘‘(III) any activities to be carried 

7 out on the owner’s or successor’s land 

8 that is immediately adjacent to, and 

9 functionally related to, the land that 

10 is subject to the easement if such ac11 tivities will alter, degrade, or other12 wise diminish the functional value of 

13 the eligible land; and 

14 ‘‘(IV) the adoption of any other 

15 practice that would tend to defeat the 

16 purposes of the program, as deter17 mined by the Secretary; 

18 ‘‘(iii) provide for the efficient and ef19 fective establishment of wetland functions 

20 and values; and 

21 ‘‘(iv) include such additional provi22 sions as the Secretary determines are de23 sirable to carry out the program or facili24 tate the practical administration thereof. 
227 

†S 3240 ES

1 ‘‘(B) VIOLATION.—On the violation of the 

2 terms or conditions of the easement, the ease3 ment shall remain in force and the Secretary 

4 may require the owner to refund all or part of 

5 any payments received by the owner under the 

6 program, together with interest thereon as de7 termined appropriate by the Secretary. 

8 ‘‘(C) COMPATIBLE USES.—Land subject to 

9 a wetland easement may be used for compatible 

10 economic uses, including such activities as 

11 hunting and fishing, managed timber harvest, 

12 or periodic haying or grazing, if such use is spe13 cifically permitted by the wetland easement plan 

14 and is consistent with the long-term protection 

15 and enhancement of the wetland resources for 

16 which the easement was established. 

17 ‘‘(D) RESERVATION OF GRAZING

18 RIGHTS.—The Secretary may include in the 

19 terms and conditions of an easement a provi20 sion under which the owner reserves grazing 

21 rights if— 

22 ‘‘(i) the Secretary determines that the 

23 reservation and use of the grazing rights— 

24 ‘‘(I) is compatible with the land 

25 subject to the easement; 
228 

†S 3240 ES

1 ‘‘(II) is consistent with the his2 torical natural uses of the land and 

3 long-term protection and enhancement 

4 goals for which the easement was es5 tablished; and 

6 ‘‘(III) complies with the wetland 

7 easement plan; and 

8 ‘‘(ii) the agreement provides for a 

9 commensurate reduction in the easement 

10 payment to account for the grazing value, 

11 as determined by the Secretary. 

12 ‘‘(E) APPLICATION.—The relevant provi13 sions of this paragraph shall also apply to a 30- 

14 year contract. 

15 ‘‘(6) COMPENSATION.— 

16 ‘‘(A) DETERMINATION.— 

17 ‘‘(i) IN GENERAL.—The Secretary 

18 shall pay as compensation for a permanent 

19 easement acquired an amount necessary to 

20 encourage enrollment in the program based 

21 on the lowest of— 

22 ‘‘(I) the fair market value of the 

23 land, as determined by the Secretary, 

24 using the Uniform Standards of Pro-
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1 fessional Appraisal Practices or an 

2 area-wide market analysis or survey; 

3 ‘‘(II) the amount corresponding 

4 to a geographical cap, as determined 

5 by the Secretary in regulations; or 

6 ‘‘(III) the offer made by the 

7 landowner. 

8 ‘‘(ii) OTHER.—Compensation for a 

9 30-year contract or 30-year easement shall 

10 be not less than 50 percent, but not more 

11 than 75 percent, of the compensation that 

12 would be paid for a permanent easement. 

13 ‘‘(B) FORM OF PAYMENT.—Compensation 

14 shall be provided by the Secretary in the form 

15 of a cash payment, in an amount determined 

16 under subparagraph (A). 

17 ‘‘(C) PAYMENT SCHEDULE.— 

18 ‘‘(i) EASEMENTS VALUED AT LESS

19 THAN $500,000.—For easements valued at 

20 $500,000 or less, the Secretary may pro21 vide easement payments in not more than 

22 10 annual payments. 

23 ‘‘(ii) EASEMENTS VALUED AT MORE

24 THAN $500,000.—For easements valued at 

25 more than $500,000, the Secretary may 
230 

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1 provide easement payments in at least 5, 

2 but not more than 10 annual payments, 

3 except that, if the Secretary determines it 

4 would further the purposes of the program, 

5 the Secretary may make a lump sum pay6 ment for such an easement. 

7 ‘‘(c) EASEMENT RESTORATION.— 

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

9 financial assistance to carry out the establishment of 

10 conservation measures and practices and protect 

11 wetland functions and values, including necessary 

12 maintenance activities, as set forth in a wetland 

13 easement plan. 

14 ‘‘(2) PAYMENTS.—The Secretary shall— 

15 ‘‘(A) in the case of a permanent easement, 

16 pay an amount that is not less than 75 percent, 

17 but not more than 100 percent, of the eligible 

18 costs; and 

19 ‘‘(B) in the case of a 30-year contract or 

20 30-year easement, pay an amount that is not 

21 less than 50 percent, but not more than 75 per22 cent, of the eligible costs. 

23 ‘‘(d) TECHNICAL ASSISTANCE.— 
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1 ‘‘(1) IN GENERAL.—The Secretary shall assist 

2 owners in complying with the terms and conditions 

3 of easements and 30-year contracts. 

4 ‘‘(2) CONTRACTS OR AGREEMENTS.—The Sec5 retary may enter into 1 or more contracts with pri6 vate entities or agreements with a State, non-govern7 mental organization, or Indian tribe to carry out 

8 necessary restoration, enhancement or maintenance 

9 of an easement if the Secretary determines that the 

10 contract or agreement will advance the purposes of 

11 the program. 

12 ‘‘(e) WETLAND ENHANCEMENT OPTION.—The Sec13 retary may enter into 1 or more agreements with a State 

14 (including a political subdivision or agency of a State), 

15 nongovernmental organization, or Indian tribe to carry out 

16 a special wetland enhancement option that the Secretary 

17 determines would advance the purposes of the program. 

18 ‘‘(f) ADMINISTRATION.— 

19 ‘‘(1) WETLAND EASEMENT PLAN.—The Sec20 retary shall develop a wetland easement plan for eli21 gible land subject to a wetland easement, which will 

22 include the practices and activities necessary to re23 store, protect, enhance, and maintain the enrolled 

24 land. 
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1 ‘‘(2) DELEGATION OF EASEMENT ADMINISTRA2 TION.— 

3 ‘‘(A) IN GENERAL.—The Secretary may 

4 delegate any of the easement management, 

5 monitoring, and enforcement responsibilities of 

6 the Secretary to other Federal or State agencies 

7 that have the appropriate authority, expertise 

8 and resources necessary to carry out such dele9 gated responsibilities or to other conservation 

10 organizations if the Secretary determines the 

11 organization has similar expertise and re12 sources. 

13 ‘‘(B) LIMITATION.—The Secretary shall 

14 not delegate any of the monitoring or enforce15 ment responsibilities under the program to con16 servation organizations. 

17 ‘‘(3) PAYMENTS.— 

18 ‘‘(A) TIMING OF PAYMENTS.—The Sec19 retary shall provide payment for obligations in20 curred by the Secretary under this section— 

21 ‘‘(i) with respect to any easement res22 toration obligation as soon as possible after 

23 the obligation is incurred; and 

24 ‘‘(ii) with respect to any annual ease25 ment payment obligation incurred by the 
233 

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1 Secretary as soon as possible after October 

2 1 of each calendar year. 

3 ‘‘(B) PAYMENTS TO OTHERS.—If an owner 

4 who is entitled to a payment dies, becomes in5 competent, is otherwise unable to receive such 

6 payment, or is succeeded by another person or 

7 entity who renders or completes the required 

8 performance, the Secretary shall make such 

9 payment, in accordance with regulations pre10 scribed by the Secretary and without regard to 

11 any other provision of law, in such manner as 

12 the Secretary determines is fair and reasonable 

13 in light of all of the circumstances. 

14 ‘‘SEC. 1265D. ADMINISTRATION. 

15 ‘‘(a) INELIGIBLE LAND.—The Secretary may not ac16 quire an easement under the program on— 

17 ‘‘(1) land owned by an agency of the United 

18 States, other than land held in trust for Indian 

19 tribes; 

20 ‘‘(2) land owned in fee title by a State, includ21 ing an agency or a subdivision of a State, or a unit 

22 of local government; 

23 ‘‘(3) land subject to an easement or deed re24 striction which, as determined by the Secretary, pro-
234 

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1 vides similar protection as would be provided by en2 rollment in the program; and 

3 ‘‘(4) land where the purposes of the program 

4 would be undermined due to on-site or off-site condi5 tions, such as risk of hazardous substances, pro6 posed or existing rights of way, infrastructure devel7 opment, or adjacent land uses. 

8 ‘‘(b) PRIORITY.—In evaluating applications under the 

9 program, the Secretary may give priority to land that is 

10 currently enrolled in the conservation reserve program in 

11 a contract that is set to expire within 1 year and— 

12 ‘‘(1) in the case of an agricultural land ease13 ment, is grassland that would benefit from protec14 tion under a long-term easement; and 

15 ‘‘(2) in the case of a wetland easement, is a 

16 wetland or related area with the highest functions 

17 and values and is likely to return to production after 

18 the land leaves the conservation reserve program. 

19 ‘‘(c) SUBORDINATION, EXCHANGE, MODIFICATION, 

20 AND TERMINATION.— 

21 ‘‘(1) IN GENERAL.—The Secretary may subor22 dinate, exchange, terminate, or modify any interest 

23 in land, or portion of such interest, administered by 

24 the Secretary, either directly or on behalf of the 
235 

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1 Commodity Credit Corporation under the program 

2 when the Secretary determines that— 

3 ‘‘(A) it is in the Federal Government’s in4 terest to subordinate, exchange, modify or ter5 minate the interest in land; 

6 ‘‘(B) the subordination, exchange, modi7 fication, or termination action— 

8 ‘‘(i) will address a compelling public 

9 need for which there is no practicable al10 ternative, or 

11 ‘‘(ii) such action will further the prac12 tical administration of the program; and 

13 ‘‘(C) the subordination, exchange, modi14 fication, or termination action will result in 

15 comparable conservation value and equivalent 

16 or greater economic value to the United States. 

17 ‘‘(2) CONSULTATION.—The Secretary shall 

18 work with the current owner, and eligible entity if 

19 applicable, to address any subordination, exchange, 

20 termination, or modification of the interest, or por21 tion of such interest in land. 

22 ‘‘(3) NOTICE.—At least 90 days before taking 

23 any termination action described in paragraph (1), 

24 the Secretary shall provide written notice of such ac25 tion to the Committee on Agriculture of the House 
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1 of Representatives and the Committee on Agri2 culture, Nutrition, and Forestry of the Senate. 

3 ‘‘(d) LAND ENROLLED IN OTHER PROGRAMS.— 

4 ‘‘(1) CONSERVATION RESERVE PROGRAM.—The 

5 Secretary may terminate or modify an existing con6 tract entered into under section 1231(a) if eligible 

7 land that is subject to such contract is transferred 

8 into the program. 

9 ‘‘(2) OTHER.—Land enrolled in the wetlands 

10 reserve program, grassland reserve program, or 

11 farmland protection program shall be considered en12 rolled in this program. 

13 ‘‘(e) ALLOCATION OF FUNDS FOR AGRICULTURAL

14 LAND EASEMENTS.—Of the funds made available under 

15 section 1241 to carry out the program for a fiscal year, 

16 the Secretary shall, to the extent practicable, use no less 

17 than 40 percent for agricultural land easements.’’. 

18 (b) COMPLIANCE WITH CERTAIN REQUIREMENTS.— 

19 Before an eligible entity or owner of eligible land may re20 ceive assistance under subtitle H of title XII of the Food 

21 Security Act of 1985, the eligible entity or person shall 

22 agree, during the crop year for which the assistance is pro23 vided and in exchange for the assistance— 
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1 (1) to comply with applicable conservation re2 quirements under subtitle B of title XII of that Act 

3 (16 U.S.C. 3811 et seq.); and 

4 (2) to comply with applicable wetland protection 

5 requirements under subtitle C of title XII of that 

6 Act (16 U.S.C. 3821 et seq.). 

7 (c) CROSS REFERENCE.—Section 1244 of the Food 

8 Security Act of 1985 (16 U.S.C. 3844) is amended— 

9 (1) in subsection (c)— 

10 (A) in paragraph (1)— 

11 (i) by inserting ‘‘and’’ at the end of 

12 subparagraph (A); 

13 (ii) by striking ‘‘and’’ at the end of 

14 subparagraph (B); and 

15 (iii) by striking subparagraph (C); 

16 (B) by redesignating paragraph (2) as 

17 paragraph (3); and 

18 (C) by inserting after paragraph (1) the 

19 following: 

20 ‘‘(2) the Agricultural Conservation Easement 

21 Program established under subtitle H; and’’; and 

22 (2) in subsection (f)— 

23 (A) in paragraph (1)— 

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

25 ‘‘programs administered under subchapters 
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†S 3240 ES

1 B and C of chapter 1 of subtitle D’’ and 

2 inserting ‘‘conservation reserve program 

3 established under subchapter B of chapter 

4 1 of subtitle D and the Agricultural Con5 servation Easement Program under sub6 title H using wetland easements under sec7 tion 1265C’’; and 

8 (ii) in subparagraph (B), by striking 

9 ‘‘subchapter C of chapter 1 of subtitle D’’ 

10 and inserting ‘‘the Agricultural Conserva11 tion Easement Program under subtitle H 

12 using wetland easements under section 

13 1265C’’; and 

14 (B) in paragraph (4), by striking ‘‘sub15 chapter C’’ and inserting ‘‘subchapter B’’. 

16 (d) EFFECTIVE DATE.—The amendments made by 

17 this section shall take effect on October 1, 2012. 

18 Subtitle E—Regional Conservation 

19 Partnership Program 

20 SEC. 2401. REGIONAL CONSERVATION PARTNERSHIP PRO21 GRAM. 

22 (a) IN GENERAL.—Title XII of the Food Security 

23 Act of 1985 is amended by inserting after subtitle H (as 

24 added by section 2301) the following: 
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1 ‘‘Subtitle I—Regional Conservation 

2 Partnership Program 

3 ‘‘SEC. 1271. ESTABLISHMENT AND PURPOSES. 

4 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab5 lish a Regional Conservation Partnership Program to im6 plement eligible activities through— 

7 ‘‘(1) partnership agreements with eligible part8 ners; and 

9 ‘‘(2) contracts with producers. 

10 ‘‘(b) PURPOSES.—The purposes of the program 

11 are— 

12 ‘‘(1) to combine the purposes and coordinate 

13 the functions of— 

14 ‘‘(A) the agricultural water enhancement 

15 program established under section 1240I; 

16 ‘‘(B) the Chesapeake Bay watershed pro17 gram established under section 1240Q; 

18 ‘‘(C) the cooperative conservation partner19 ship initiative established under section 1243; 

20 and 

21 ‘‘(D) the Great Lakes basin program for 

22 soil erosion and sediment control established 

23 under section 1240P;. 

24 ‘‘(2) to further the conservation, restoration, 

25 and sustainable use of soil, water, wildlife, and re-
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1 lated natural resources on a regional or watershed 

2 scale; and 

3 ‘‘(3) to encourage partners to cooperate with 

4 producers in— 

5 ‘‘(A) meeting or avoiding the need for na6 tional, State, and local natural resource regu7 latory requirements related to production; and 

8 ‘‘(B) implementing projects that will result 

9 in the installation and maintenance of eligible 

10 activities that affect multiple agricultural or 

11 nonindustrial private forest operations on a 

12 local, regional, State, or multi-State basis. 

13 ‘‘SEC. 1271A. DEFINITIONS. 

14 ‘‘In this subtitle: 

15 ‘‘(1) COVERED PROGRAMS.—The term ‘covered 

16 programs’ means— 

17 ‘‘(A) the agricultural conservation ease18 ment program; 

19 ‘‘(B) the environmental quality incentives 

20 program; and 

21 ‘‘(C) the conservation stewardship pro22 gram. 

23 ‘‘(2) ELIGIBLE ACTIVITY.—The term ‘eligible 

24 activity’ means any of the following conservation ac25 tivities when delivered through a covered program: 
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1 ‘‘(A) Water quality restoration or enhance2 ment projects, including nutrient management 

3 and sediment reduction. 

4 ‘‘(B) Water quantity conservation, restora5 tion, or enhancement projects relating to sur6 face water and groundwater resources, includ7 ing— 

8 ‘‘(i) the conversion of irrigated crop9 land to the production of less water-inten10 sive agricultural commodities or dryland 

11 farming; and 

12 ‘‘(ii) irrigation system improvement 

13 and irrigation efficiency enhancement. 

14 ‘‘(C) Drought mitigation. 

15 ‘‘(D) Flood prevention. 

16 ‘‘(E) Water retention. 

17 ‘‘(F) Habitat conservation, restoration, 

18 and enhancement. 

19 ‘‘(G) Erosion control. 

20 ‘‘(H) Other related activities that the Sec21 retary determines will help achieve conservation 

22 benefits. 

23 ‘‘(3) ELIGIBLE PARTNER.—The term ‘eligible 

24 partner’ means any of the following: 
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1 ‘‘(A) An agricultural or silvicultural pro2 ducer association or other group of producers. 

3 ‘‘(B) A State or unit of local government. 

4 ‘‘(C) An Indian tribe. 

5 ‘‘(D) A farmer cooperative. 

6 ‘‘(E) An institution of higher education. 

7 ‘‘(F) An organization with an established 

8 history of working cooperatively with producers 

9 on agricultural land, as determined by the Sec10 retary, to address— 

11 ‘‘(i) local conservation priorities re12 lated to agricultural production, wildlife 

13 habitat development, and nonindustrial pri14 vate forest land management; or 

15 ‘‘(ii) critical watershed-scale soil ero16 sion, water quality, sediment reduction, or 

17 other natural resource concerns. 

18 ‘‘(4) PARTNERSHIP AGREEMENT.—The term 

19 ‘partnership agreement’ means an agreement be20 tween the Secretary and an eligible partner. 

21 ‘‘(5) PROGRAM.—The term ‘program’ means 

22 the Regional Conservation Partnership Program es23 tablished by this subtitle. 
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1 ‘‘SEC. 1271B. REGIONAL CONSERVATION PARTNERSHIPS. 

2 ‘‘(a) PARTNERSHIP AGREEMENTS AUTHORIZED.— 

3 The Secretary may enter into a partnership agreement 

4 with an eligible partner to implement a project that will 

5 assist producers with installing and maintaining an eligi6 ble activity. 

7 ‘‘(b) LENGTH.—A partnership agreement shall be for 

8 a period not to exceed 5 years, except that the Secretary 

9 may extend the agreement 1 time for up to 12 months 

10 when an extension is necessary to meet the objectives of 

11 the program. 

12 ‘‘(c) DUTIES OF PARTNERS.— 

13 ‘‘(1) IN GENERAL.—Under a partnership agree14 ment, the eligible partner shall— 

15 ‘‘(A) define the scope of a project, includ16 ing— 

17 ‘‘(i) the eligible activities to be imple18 mented; 

19 ‘‘(ii) the potential agricultural or non20 industrial private forest operations af21 fected; 

22 ‘‘(iii) the local, State, multi-State or 

23 other geographic area covered; and 

24 ‘‘(iv) the planning, outreach, imple25 mentation and assessment to be conducted; 
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1 ‘‘(B) conduct outreach and education to 

2 producers for potential participation in the 

3 project; 

4 ‘‘(C) at the request of a producer, act on 

5 behalf of a producer participating in the project 

6 in applying for assistance under section 1271C; 

7 ‘‘(D) leverage financial or technical assist8 ance provided by the Secretary with additional 

9 funds to help achieve the project objectives; 

10 ‘‘(E) conduct an assessment of the 

11 project’s effects; and 

12 ‘‘(F) at the conclusion of the project, re13 port to the Secretary on its results and funds 

14 leveraged. 

15 ‘‘(2) CONTRIBUTION.—A partner shall provide 

16 a significant portion of the overall costs of the scope 

17 of the project as determined by the Secretary. 

18 ‘‘(d) APPLICATIONS.— 

19 ‘‘(1) COMPETITIVE PROCESS.—The Secretary 

20 shall conduct a competitive process to select applica21 tions for partnership agreements and may assess 

22 and rank applications with similar conservation pur23 poses as a group. 

24 ‘‘(2) CRITERIA USED.—In carrying out the 

25 process described in paragraph (1), the Secretary 
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1 shall make public the criteria used in evaluating ap2 plications. 

3 ‘‘(3) CONTENT.—An application to the Sec4 retary shall include a description of— 

5 ‘‘(A) the scope of the project as described 

6 in subsection (c)(1)(A); 

7 ‘‘(B) the plan for monitoring, evaluating, 

8 and reporting on progress made towards achiev9 ing the project’s objectives; 

10 ‘‘(C) the program resources requested for 

11 the project, including the covered programs to 

12 be used and estimated funding needed from the 

13 Secretary; 

14 ‘‘(D) the partners collaborating to achieve 

15 project objectives, including their roles, respon16 sibilities, capabilities, and financial contribu17 tion; and 

18 ‘‘(E) any other elements the Secretary con19 siders necessary to adequately evaluate and 

20 competitively select applications for funding 

21 under the program. 

22 ‘‘(4) APPLICATION SELECTION.— 

23 ‘‘(A) PRIORITY TO CERTAIN APPLICA24 TIONS.—The Secretary shall give a higher pri25 ority to applications that— 
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1 ‘‘(i) assist producers in meeting or 

2 avoiding the need for a natural resource 

3 regulatory requirement; 

4 ‘‘(ii) significantly leverage non-Fed5 eral financial and technical resources and 

6 coordinate with other local, State, regional, 

7 or national efforts; 

8 ‘‘(iii) deliver high percentages of ap9 plied conservation to address conservation 

10 priorities or local, State, regional, or na11 tional conservation initiatives; or 

12 ‘‘(iv) provide innovation in conserva13 tion methods and delivery, including out14 come-based performance measures and 

15 methods. 

16 ‘‘(B) OTHER APPLICATIONS.—The Sec17 retary may give priority to applications that— 

18 ‘‘(i) have a high percentage of pro19 ducers in the area to be covered by the 

20 agreement; or 

21 ‘‘(ii) meet other factors that are im22 portant for achieving the purposes of the 

23 program, as determined by the Secretary. 
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1 ‘‘SEC. 1271C. ASSISTANCE TO PRODUCERS. 

2 ‘‘(a) IN GENERAL.—The Secretary shall enter into 

3 contracts to provide financial and technical assistance 

4 to— 

5 ‘‘(1) producers participating in a project with 

6 an eligible partner as described in section 1271B; or 

7 ‘‘(2) producers that fit within the scope of a 

8 project described in section 1271B or a critical con9 servation area designated pursuant to section 

10 1271F, but who are seeking to implement an eligible 

11 activity independent of a partner. 

12 ‘‘(b) TERMS AND CONDITIONS.— 

13 ‘‘(1) CONSISTENCY WITH PROGRAM RULES.— 

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

15 subparagraph (B), the Secretary shall ensure 

16 that the terms and conditions of a contract 

17 under this section are consistent with the appli18 cable rules of the covered programs to be used 

19 as part of the project, as described in the appli20 cation under section 1271B(d)(3)(C). 

21 ‘‘(B) ADJUSTMENTS.—Except for statu22 tory program requirements governing appeals, 

23 payment limitations, and conservation compli24 ance, the Secretary may adjust the discre25 tionary program rules of a covered program— 
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1 ‘‘(i) to provide a simplified application 

2 and evaluation process; and 

3 ‘‘(ii) to better reflect unique local cir4 cumstances and purposes if the Secretary 

5 determines such adjustments are necessary 

6 to achieve the purposes of the program. 

7 ‘‘(2) ALTERNATIVE FUNDING ARRANGE8 MENTS.— 

9 ‘‘(A) IN GENERAL.—For the purposes of 

10 providing assistance for land described in sub11 section (a) and section 1271F, the Secretary 

12 may enter into alternative funding arrange13 ments with a multistate water resource agency 

14 or authority if— 

15 ‘‘(i) the Secretary determines that the 

16 goals and objectives of the program will be 

17 met by the alternative funding arrange18 ments; 

19 ‘‘(ii) the agency or authority certifies 

20 that the limitations established under this 

21 section on agreements with individual pro22 ducers will not be exceeded; and 

23 ‘‘(iii) all participating producers meet 

24 applicable payment eligibility provisions. 
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1 ‘‘(B) CONDITIONS.—As a condition on re2 ceipt of funding under subparagraph (A), the 

3 multistate water resource agency or authority 

4 shall agree— 

5 ‘‘(i) to submit an annual independent 

6 audit to the Secretary that describes the 

7 use of funds under this paragraph; 

8 ‘‘(ii) to provide any data necessary for 

9 the Secretary to issue a report on the use 

10 of funds under this paragraph; and 

11 ‘‘(iii) not to use any funds for admin12 istration or contracting with another enti13 ty. 

14 ‘‘(C) LIMITATION.—The Secretary may 

15 enter into not more than 10 alternative funding 

16 arrangements under this paragraph. 

17 ‘‘(c) PAYMENTS.— 

18 ‘‘(1) IN GENERAL.—In accordance with statu19 tory requirements of the covered programs involved, 

20 the Secretary may make payments to a producer in 

21 an amount determined by the Secretary to be nec22 essary to achieve the purposes of the program. 

23 ‘‘(2) PAYMENTS TO CERTAIN PRODUCERS.—The 

24 Secretary may provide payments for a period of 5 

25 years— 
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1 ‘‘(A) to producers participating in a 

2 project that addresses water quantity concerns 

3 and in an amount sufficient to encourage con4 version from irrigated to dryland farming; and 

5 ‘‘(B) to producers participating in a 

6 project that addresses water quality concerns 

7 and in an amount sufficient to encourage adop8 tion of conservation practices and systems that 

9 improve nutrient management. 

10 ‘‘(3) WAIVER AUTHORITY.—To assist in the im11 plementation of the program, the Secretary may 

12 waive the applicability of the limitation in section 

13 1001D(b)(2) of this Act for participating producers 

14 if the Secretary determines that the waiver is nec15 essary to fulfill the objectives of the program. 

16 ‘‘SEC. 1271D. FUNDING. 

17 ‘‘(a) AVAILABILITY OF FUNDS.—The Secretary shall 

18 use $100,000,000 of the funds of the Commodity Credit 

19 Corporation for each of fiscal years 2013 through 2017 

20 to carry out the program established under this subtitle. 

21 ‘‘(b) DURATION OF AVAILABILITY.—Funds made 

22 available under subsection (a) shall remain available until 

23 expended. 

24 ‘‘(c) ADDITIONAL FUNDING AND ACRES.— 
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1 ‘‘(1) IN GENERAL.—In addition to the funds 

2 made available under subsection (a), the Secretary 

3 shall reserve 8 percent of the funds and acres made 

4 available for a covered program for each of fiscal 

5 years 2013 through 2017 in order to ensure addi6 tional resources are available to carry out this pro7 gram. 

8 ‘‘(2) UNUSED FUNDS AND ACRES.—Any funds 

9 or acres reserved under paragraph (1) for a fiscal 

10 year from a covered program that are not obligated 

11 under this program by April 1 of that fiscal year 

12 shall be returned for use under the covered program. 

13 ‘‘(d) ALLOCATION OF FUNDING.—Of the funds and 

14 acres made available for the program under subsections 

15 (a) and (c), the Secretary shall allocate— 

16 ‘‘(1) 25 percent of the funds and acres to 

17 projects based on a State competitive process admin18 istered by the State conservationist, with the advice 

19 of the State technical committee; 

20 ‘‘(2) 40 percent of the funds and acres to 

21 projects based on a national competitive process to 

22 be established by the Secretary; and 

23 ‘‘(3) 35 percent of the funds and acres to 

24 projects for the critical conservation areas des25 ignated in section 1271F. 
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1 ‘‘(e) LIMITATION ON ADMINISTRATIVE EXPENSES.— 

2 None of the funds made available under the program may 

3 be used to pay for the administrative expenses of partners. 

4 ‘‘SEC. 1271E. ADMINISTRATION. 

5 ‘‘(a) DISCLOSURE.—In addition to the criteria used 

6 in evaluating applications as described in section 

7 1271B(d)(2), the Secretary shall make publicly available 

8 information on projects selected through the competitive 

9 process described in section 1271B(d)(1). 

10 ‘‘(b) REPORTING.—Not later than December 31, 

11 2013, and for every 2 years thereafter, the Secretary shall 

12 submit to the Committee on Agriculture of the House of 

13 Representatives and the Committee on Agriculture, Nutri14 tion, and Forestry of the Senate a report on the status 

15 of projects funded under the program, including— 

16 ‘‘(1) the number and types of partners and pro17 ducers participating in the partnership agreements 

18 selected; 

19 ‘‘(2) the number of producers receiving assist20 ance; 

21 ‘‘(3) total funding committed to projects, in22 cluding Federal and non-Federal resources; and 

23 ‘‘(4) a description of how the funds under sec24 tion 1271C(b)(3) are being administered, includ25 ing— 
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1 ‘‘(A) any oversight mechanisms that the 

2 Secretary has implemented; 

3 ‘‘(B) the process through which the Sec4 retary is resolving appeals by program partici5 pants; and 

6 ‘‘(C) the means by which the Secretary is 

7 tracking adherence to any applicable provisions 

8 for payment eligibility. 

9 ‘‘SEC. 1271F. CRITICAL CONSERVATION AREAS. 

10 ‘‘(a) IN GENERAL.—When administering the funding 

11 described in section 1271D(d)(3), the Secretary shall se12 lect applications for partnership agreements and producer 

13 contracts within designated critical conservation areas. 

14 ‘‘(b) CRITICAL CONSERVATION AREA DESIGNA15 TIONS.— 

16 ‘‘(1) IN GENERAL.—The Secretary shall des17 ignate up to 6 geographical areas as critical con18 servation areas based on the degree to which an 

19 area— 

20 ‘‘(A) includes multiple States with signifi21 cant agricultural production; 

22 ‘‘(B) is covered by an existing regional, 

23 State, binational, or multistate agreement or 

24 plan that has established objectives, goals and 
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1 work plans and is adopted by a Federal, State, 

2 or regional authority; 

3 ‘‘(C) has water quality concerns, including 

4 concerns for reducing erosion, promoting sedi5 ment control, and addressing nutrient manage6 ment activities affecting large bodies of water of 

7 regional, national, or international significance; 

8 ‘‘(D) has water quantity concerns, includ9 ing— 

10 ‘‘(i) concerns for groundwater, surface 

11 water, aquifer, or other water sources; or 

12 ‘‘(ii) a need to promote water reten13 tion and flood prevention; or 

14 ‘‘(E) is subject to regulatory requirements 

15 that could reduce the economic scope of agricul16 tural operations within the area. 

17 ‘‘(2) EXPIRATION.—Critical conservation area 

18 designations under this section shall expire after 5 

19 years, subject to redesignation, except that the Sec20 retary may withdraw designation from an area if the 

21 Secretary finds the area no longer meets the condi22 tions described in paragraph (1). 

23 ‘‘(c) ADMINISTRATION.— 

24 ‘‘(1) IN GENERAL.—Except as provided in para25 graph (2), the Secretary shall administer any part-
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1 nership agreement or producer contract under this 

2 section in a manner that is consistent with the terms 

3 of the program. 

4 ‘‘(2) RELATIONSHIP TO EXISTING ACTIVITY.— 

5 The Secretary shall, to the maximum extent prac6 ticable, ensure that eligible activities carried out in 

7 critical conservation areas designated under this sec8 tion complement and are consistent with other Fed9 eral and State programs and water quality and 

10 quantity strategies.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall take effect on October 1, 2012. 

13 Subtitle F—Other Conservation 

14 Programs 

15 SEC. 2501. CONSERVATION OF PRIVATE GRAZING LAND. 

16 Section 1240M(e) of the Food Security Act of 1985 

17 (16 U.S.C. 3839bb(e)) is amended inserting ‘‘and 

18 $30,000,000 for each of fiscal years 2013 through 2017’’ 

19 before the period at the end. 

20 SEC. 2502. GRASSROOTS SOURCE WATER PROTECTION 

21 PROGRAM. 

22 Section 1240O(b) of the Food Security Act of 1985 

23 (16 U.S.C. 3839bb–2(b)) is amended by inserting ‘‘and 

24 $15,000,000 for each of fiscal years 2013 through 2017’’ 

25 before the period at the end. 
256 

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1 SEC. 2503. VOLUNTARY PUBLIC ACCESS AND HABITAT IN2 CENTIVE PROGRAM. 

3 (a) FUNDING.—Section 1240R(f) of the Food Secu4 rity Act of 1985 (16 U.S.C. 3839bb–5(f)) is amended by 

5 inserting ‘‘and $40,000,000 for the period of fiscal years 

6 2013 through 2017’’ before the period at the end . 

7 (b) REPORT ON PROGRAM EFFECTIVENESS.—Not 

8 later than 2 years after the date of enactment of this Act, 

9 the Secretary of Agriculture shall submit to the Com10 mittee on Agriculture of the House of Representatives and 

11 the Committee on Agriculture, Nutrition, and Forestry of 

12 the Senate a report evaluating the effectiveness of the vol13 untary public access and habitat incentive program estab14 lished by section 1240R of the Food Security Act of 1985 

15 (16 U.S.C. 3839bb–5), including— 

16 (1) identifying cooperating agencies; 

17 (2) identifying the number of land holdings and 

18 total acres enrolled by State; 

19 (3) evaluating the extent of improved access on 

20 eligible land, improved wildlife habitat, and related 

21 economic benefits; and 

22 (4) any other relevant information and data re23 lating to the program that would be helpful to such 

24 Committees. 

25 (c) EFFECTIVE DATE.—The amendment made by 

26 this section shall take effect on October 1, 2012. 
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1 SEC. 2504. AGRICULTURE CONSERVATION EXPERIENCED 

2 SERVICES PROGRAM. 

3 (a) FUNDING.—Section 1252 of the Food Security 

4 Act of 1985 (16 U.S.C. 3851) is amended by striking sub5 section (c) and inserting the following: 

6 ‘‘(c) FUNDING.— 

7 ‘‘(1) IN GENERAL.—The Secretary may carry 

8 out the ACES program using funds made available 

9 to carry out each program under this title. 

10 ‘‘(2) EXCLUSION.—Funds made available to 

11 carry out the conservation reserve program may not 

12 be used to carry out the ACES program.’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 this section shall take effect on October 1, 2012. 

15 SEC. 2505. SMALL WATERSHED REHABILITATION PRO16 GRAM. 

17 Section 14(h)(2)(E) of the Watershed Protection and 

18 Flood Prevention Act (16 U.S.C. 1012(h)(2)(E)) is 

19 amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 

20 SEC. 2506. TERMINAL LAKES ASSISTANCE. 

21 Section 2507 of the Food, Security, and Rural Invest22 ment Act of 2002 (43 U.S.C. 2211 note; Public Law 107– 

23 171) is amended to read as follows: 

24 ‘‘SEC. 2507. TERMINAL LAKES ASSISTANCE. 

25 ‘‘(a) DEFINITIONS.—In this section: 
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1 ‘‘(1) ELIGIBLE LAND.—The term ‘eligible land’ 

2 means privately owned agricultural land (including 

3 land in which a State has a property interest as a 

4 result of state water law)— 

5 ‘‘(A) that a landowner voluntarily agrees to 

6 sell to a State; and 

7 ‘‘(B) which— 

8 ‘‘(i)(I) is ineligible for enrollment as a 

9 wetland easement established under the 

10 Agricultural Conservation Easement Pro11 gram under subtitle H of the Food Secu12 rity Act of 1985; 

13 ‘‘(II) is flooded to— 

14 ‘‘(aa) an average depth of at 

15 least 6.5 feet; or 

16 ‘‘(bb) a level below which the 

17 State determines the management of 

18 the water level is beyond the control 

19 of the State or landowner; or 

20 ‘‘(III) is inaccessible for agricultural 

21 use due to the flooding of adjoining prop22 erty (such as islands of agricultural land 

23 created by flooding); 
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1 ‘‘(ii) is located within a watershed 

2 with water rights available for lease or 

3 purchase; and 

4 ‘‘(iii) has been used during at least 5 

5 of the immediately preceding 30 years— 

6 ‘‘(I) to produce crops or hay; or 

7 ‘‘(II) as livestock pasture or 

8 grazing. 

9 ‘‘(2) PROGRAM.—The term ‘program’ means 

10 the voluntary land purchase program established 

11 under this section. 

12 ‘‘(3) TERMINAL LAKE.—The term ‘terminal 

13 lake’ means a lake and its associated riparian and 

14 watershed resources that is— 

15 ‘‘(A) considered flooded because there is no 

16 natural outlet for water accumulating in the 

17 lake or the associated riparian area such that 

18 the watershed and surrounding land is consist19 ently flooded; or 

20 ‘‘(B) considered terminal because it has no 

21 natural outlet and is at risk due to a history of 

22 consistent Federal assistance to address critical 

23 resource conditions, including insufficient water 

24 available to meet the needs of the lake, general 

25 uses, and water rights. 
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1 ‘‘(b) ASSISTANCE.—The Secretary shall— 

2 ‘‘(1) provide grants under subsection (c) for the 

3 purchase of eligible land impacted by a terminal lake 

4 described in subsection (a)(3)(A); and 

5 ‘‘(2) provide funds to the Secretary of the Inte6 rior pursuant to subsection (e)(2) with assistance in 

7 accordance with subsection (d) for terminal lakes de8 scribed in subsection (a)(3)(B). 

9 ‘‘(c) LAND PURCHASE GRANTS.— 

10 ‘‘(1) IN GENERAL.—Using funds provided 

11 under subsection (e)(1), the Secretary shall make 

12 available land purchase grants to States for the pur13 chase of eligible land in accordance with this sub14 section. 

15 ‘‘(2) IMPLEMENTATION.— 

16 ‘‘(A) AMOUNT.—A land purchase grant 

17 shall be in an amount not to exceed the lesser 

18 of— 

19 ‘‘(i) 50 percent of the total purchase 

20 price per acre of the eligible land; or 

21 ‘‘(ii)(I) in the case of eligible land 

22 that was used to produce crops or hay, 

23 $400 per acre; and 
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1 ‘‘(II) in the case of eligible land that 

2 was pasture or grazing land, $200 per 

3 acre. 

4 ‘‘(B) DETERMINATION OF PURCHASE

5 PRICE.—A State purchasing eligible land with a 

6 land purchase grant shall ensure, to the max7 imum extent practicable, that the purchase 

8 price of such land reflects the value, if any, of 

9 other encumbrances on the eligible land to be 

10 purchased, including easements and mineral 

11 rights. 

12 ‘‘(C) COST-SHARE REQUIRED.—To be eligi13 ble to receive a land purchase grant, a State 

14 shall provide matching non-Federal funds in an 

15 amount equal to 50 percent of the amount de16 scribed in subparagraph (A), including addi17 tional non-Federal funds. 

18 ‘‘(D) CONDITIONS.—To receive a land pur19 chase grant, a State shall agree— 

20 ‘‘(i) to ensure that any eligible land 

21 purchased is— 

22 ‘‘(I) conveyed in fee simple to the 

23 State; and 
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1 ‘‘(II) free from mortgages or 

2 other liens at the time title is trans3 ferred; 

4 ‘‘(ii) to maintain ownership of the eli5 gible land in perpetuity; 

6 ‘‘(iii) to pay (from funds other than 

7 grant dollars awarded) any costs associ8 ated with the purchase of eligible land 

9 under this section, including surveys and 

10 legal fees; and 

11 ‘‘(iv) to keep eligible land in a con12 serving use, as defined by the Secretary. 

13 ‘‘(E) LOSS OF FEDERAL BENEFITS.—Eligi14 ble land purchased with a grant under this sec15 tion shall lose eligibility for any benefits under 

16 other Federal programs, including— 

17 ‘‘(i) benefits under title XII of the 

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

19 3801 et seq.); 

20 ‘‘(ii) benefits under the Federal Crop 

21 Insurance Act (7 U.S.C. 1501 et seq.); and 

22 ‘‘(iii) covered benefits described in 

23 section 1001D(b) of the Food Security Act 

24 of 1985 (7 U.S.C. 1308–3a). 
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1 ‘‘(F) PROHIBITION.—Any Federal rights 

2 or benefits associated with eligible land prior to 

3 purchase by a State may not be transferred to 

4 any other land or person in anticipation of or 

5 as a result of such purchase. 

6 ‘‘(d) WATER ASSISTANCE.— 

7 ‘‘(1) IN GENERAL.—The Secretary of the Inte8 rior, acting through the Commissioner of Reclama9 tion, may use the funds described in subsection 

10 (e)(2) to administer and provide financial assistance 

11 to carry out this subsection to provide water and as12 sistance to a terminal lake described in subsection 

13 (a)(3)(B) through willing sellers or willing partici14 pants only— 

15 ‘‘(A) to lease water; 

16 ‘‘(B) to purchase land, water appurtenant 

17 to the land, and related interests; and 

18 ‘‘(C) to carry out research, support and 

19 conservation activities for associated fish, wild20 life, plant, and habitat resources.’’ 

21 ‘‘(2) EXCLUSIONS.—The Secretary of the Inte22 rior may not use this subsection to deliver assistance 

23 to the Great Salt Lake in Utah, lakes that are con24 sidered dry lakes, or other lakes that do not meet 
264 

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1 the purposes of this section, as determined by the 

2 Secretary of the Interior. 

3 ‘‘(3) TRANSITIONAL PROVISION.— 

4 ‘‘(A) IN GENERAL.—Notwithstanding any 

5 other provision of this section, any funds made 

6 available before the date of enactment of the 

7 Agriculture Reform, Food, and Jobs Act of 

8 2012 under a provision of law described in sub9 paragraph (B) shall remain available using the 

10 provisions of law (including regulations) in ef11 fect on the day before the date of enactment of 

12 that Act. 

13 ‘‘(B) DESCRIBED LAWS.—The provisions 

14 of law described in this section are— 

15 ‘‘(i) section 2507 of the Farm Secu16 rity and Rural Investment Act of 2002 (43 

17 U.S.C. 2211 note; Public Law 107–171) 

18 (as in effect on the day before the date of 

19 enactment of the Agriculture Reform, 

20 Food, and Jobs Act of 2012); 

21 ‘‘(ii) section 207 of the Energy and 

22 Water Development Appropriations Act, 

23 2003 (Public Law 108–7; 117 Stat. 146); 

24 ‘‘(iii) section 208 of the Energy and 

25 Water Development Appropriations Act, 
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1 2006 (Public Law 109–103; 119 Stat. 

2 2268, 123 Stat. 2856); and 

3 ‘‘(iv) section 208 of the Energy and 

4 Water Development and Related Agencies 

5 Appropriations Act, 2010 (Public Law 

6 111–85; 123 Stat. 2858, 123 Stat. 2967, 

7 125 Stat. 867). 

8 ‘‘(e) FUNDING.— 

9 ‘‘(1) AUTHORIZATION OF APPROPRIATIONS.— 

10 There is authorized to be appropriated to the Sec11 retary to carry out subsection (c) $25,000,000, to 

12 remain available until expended. 

13 ‘‘(2) COMMODITY CREDIT CORPORATION.—As 

14 soon as practicable after the date of enactment of 

15 the Agriculture Reform, Food, and Jobs Act of 

16 2012, the Secretary shall transfer to the Bureau of 

17 Reclamation Water and Related Resources Account 

18 $150,000,000 from the funds of the Commodity 

19 Credit Corporation to carry out subsection (d), to re20 main available until expended.’’. 
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1 Subtitle G—Funding and 

2 Administration 

3 SEC. 2601. FUNDING. 

4 (a) IN GENERAL.—Section 1241 of the Food Security 

5 Act of 1985 (16 U.S.C. 3841) is amended by striking sub6 section (a) and inserting the following: 

7 ‘‘(a) ANNUAL FUNDING.—For each of fiscal years 

8 2013 through 2017, the Secretary shall use the funds, fa9 cilities, and authorities of the Commodity Credit Corpora10 tion to carry out the following programs under this title 

11 (including the provision of technical assistance): 

12 ‘‘(1) The conservation reserve program under 

13 subchapter B of chapter 1 of subtitle D, including, 

14 to the maximum extent practicable— 

15 ‘‘(A) $10,000,000 for the period of fiscal 

16 years 2013 through 2017 to provide payments 

17 under paragraph (3) of section 1234(b) in con18 nection with thinning activities conducted on 

19 land described in subparagraph (B)(iii) of that 

20 paragraph; and 

21 ‘‘(B) $50,000,000 for the period of fiscal 

22 years 2013 through 2017 to carry out section 

23 1235(f) to facilitate the transfer of land subject 

24 to contracts from retired or retiring owners and 
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1 operators to beginning farmers or ranchers and 

2 socially disadvantaged farmers or ranchers. 

3 ‘‘(2) The Agricultural Conservation Easement 

4 Program under subtitle H using to the maximum ex5 tent practicable— 

6 ‘‘(A) $223,000,000 for fiscal year 2013; 

7 ‘‘(B) $702,000,000 for fiscal year 2014; 

8 ‘‘(C) $500,000,000 for fiscal year 2015; 

9 ‘‘(D) $525,000,000 for fiscal year 2016; 

10 and 

11 ‘‘(E) $250,000,000 for fiscal year 2017. 

12 ‘‘(3) The conservation security program under 

13 subchapter A of chapter 2 of subtitle D, using such 

14 sums as are necessary to administer contracts en15 tered into before September 30, 2008. 

16 ‘‘(4) The conservation stewardship program 

17 under subchapter B of chapter 2 of subtitle D. 

18 ‘‘(5) The environmental quality incentives pro19 gram under chapter 4 of subtitle D, using, to the 

20 maximum extent practicable— 

21 ‘‘(A) $1,455,000,000 for fiscal year 2013; 

22 ‘‘(B) $1,645,000,000 for fiscal year 2014; 

23 and 

24 ‘‘(C) $1,650,000,000 for each of fiscal 

25 years 2015 through 2017.’’. 
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1 (b) GUARANTEED AVAILABILITY OF FUNDS.—Sec2 tion 1241 of the Food Security Act of 1985 (16 U.S.C. 

3 3841) is amended— 

4 (1) by redesignating subsections (b) through (h) 

5 as subsections (c) through (i), respectively; and 

6 (2) by inserting after subsection (a) the fol7 lowing: 

8 ‘‘(b) AVAILABILITY OF FUNDS.—Amounts made 

9 available by subsection (a) shall be used by the Secretary 

10 to carry out the programs specified in such subsection for 

11 fiscal years 2013 through 2017 and shall remain available 

12 until expended. Amounts made available for the programs 

13 specified in such subsection during a fiscal year through 

14 modifications, cancellations, terminations, and other re15 lated administrative actions and not obligated in that fis16 cal year shall remain available for obligation during subse17 quent fiscal years, but shall reduce the amount of addi18 tional funds made available in the subsequent fiscal year 

19 by an amount equal to the amount remaining unobli20 gated.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall take effect on October 1, 2012. 

23 SEC. 2602. TECHNICAL ASSISTANCE. 

24 Section 1241 of the Food Security Act of 1985 (16 

25 U.S.C. 3841) is amended by striking subsection (c) (as 
269 

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1 redesignated by section 2601(b)(1)) and inserting the fol2 lowing: 

3 ‘‘(c) TECHNICAL ASSISTANCE.— 

4 ‘‘(1) AVAILABILITY OF FUNDS.—Commodity 

5 Credit Corporation funds made available for a fiscal 

6 year for each of the programs specified in subsection 

7 (a)— 

8 ‘‘(A) shall be available for the provision of 

9 technical assistance for the programs for which 

10 funds are made available as necessary to imple11 ment the programs effectively; and 

12 ‘‘(B) shall not be available for the provi13 sion of technical assistance for conservation 

14 programs specified in subsection (a) other than 

15 the program for which the funds were made 

16 available. 

17 ‘‘(2) REPORT.—Not later than December 31, 

18 2012, the Secretary shall submit (and update as 

19 necessary in subsequent years) to the Committee on 

20 Agriculture of the House of Representatives and the 

21 Committee on Agriculture, Nutrition, and Forestry 

22 of the Senate a report— 

23 ‘‘(A) detailing the amount of technical as24 sistance funds requested and apportioned in 
270 

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1 each program specified in subsection (a) during 

2 the preceding fiscal year; and 

3 ‘‘(B) any other data relating to this provi4 sion that would be helpful to such Commit5 tees.’’. 

6 SEC. 2603. REGIONAL EQUITY. 

7 Section 1241 of the Food Security Act of 1985 (16 

8 U.S.C. 3841) is amended by striking subsection (e) (as 

9 redesignated by section 2601(b)(1)) and inserting the fol10 lowing: 

11 ‘‘(e) REGIONAL EQUITY.— 

12 ‘‘(1) EQUITABLE DISTRIBUTION.—When deter13 mining funding allocations each fiscal year, the Sec14 retary shall, after considering available funding and 

15 program demand in each State, provide a distribu16 tion of funds for conservation programs under sub17 title D (excluding the conservation reserve program 

18 under subchapter B of chapter 1), subtitle H (ex19 cluding wetland easements under section 1265C), 

20 and subtitle I to ensure equitable program participa21 tion proportional to historical funding allocations 

22 and usage by all States. 

23 ‘‘(2) MINIMUM PERCENTAGE.—In determining 

24 the specific funding allocations under paragraph (1), 

25 the Secretary shall— 
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1 ‘‘(A) ensure that during the first quarter 

2 of each fiscal year each State has the oppor3 tunity to establish that the State can use an ag4 gregate allocation amount of at least 0.6 per5 cent of the funds made available for those con6 servation programs; and 

7 ‘‘(B) for each State that can so establish, 

8 provide an aggregate amount of at least 0.6 

9 percent of the funds made available for those 

10 conservation programs.’’. 

11 SEC. 2604. RESERVATION OF FUNDS TO PROVIDE ASSIST12 ANCE TO CERTAIN FARMERS OR RANCHERS 

13 FOR CONSERVATION ACCESS. 

14 Subsection (h) of section 1241 of the Food Security 

15 Act of 1985 (16 U.S.C. 3841) (as redesignated by section 

16 2601(b)(1)) is amended— 

17 (1) in paragraph (1) by striking ‘‘2012’’ and in18 serting ‘‘2017’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(4) PREFERENCE.—In providing assistance 

21 under paragraph (1), the Secretary shall give pref22 erence to a veteran farmer or rancher (as defined in 

23 section 2501(e) of the Food, Agriculture, Conserva24 tion, and Trade Act of 1990 (7 U.S.C. 2279(e))) 
272 

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1 that qualifies under subparagraph (A) or (B) of 

2 paragraph (1).’’. 

3 SEC. 2605. ANNUAL REPORT ON PROGRAM ENROLLMENTS 

4 AND ASSISTANCE. 

5 Subsection (i) of section 1241 of the Food Security 

6 Act of 1985 (16 U.S.C. 3841) (as redesignated by section 

7 2601(b)(1)) is amended— 

8 (1) in paragraph (1), by striking ‘‘wetlands re9 serve program’’ and inserting ‘‘agricultural conserva10 tion easement program’’; 

11 (2) by striking paragraphs (2) and (3) and re12 designating paragraphs (4), (5), and (6) as para13 graphs (2), (3), and (4), respectively; 

14 (3) in paragraph (3) (as so redesignated)— 

15 (A) by striking ‘‘agricultural water en16 hancement program’’ and inserting ‘‘regional 

17 conservation partnership program’’; and 

18 (B) by striking ‘‘section 1240I(g)’’ and in19 serting ‘‘section 1271C(c)(3)’’; and 

20 (4) by adding at the end the following: 

21 ‘‘(5) Payments made under the conservation 

22 stewardship program. 

23 ‘‘(6) Waivers granted by the Secretary under 

24 section 1265B(b)(2)(C).’’. 
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1 SEC. 2606. ADMINISTRATIVE REQUIREMENTS FOR CON2 SERVATION PROGRAMS. 

3 Section 1244 of the Food Security Act of 1985 (16 

4 U.S.C. 3844) is amended— 

5 (1) in subsection (a)(2), by adding at the end 

6 the following: 

7 ‘‘(E) Veteran farmers or ranchers (as de8 fined in section 2501(e) of the Food, Agri9 culture, Conservation, and Trade Act of 1990 

10 (7 U.S.C. 2279(e))).’’; 

11 (2) in subsection (d), by inserting ‘‘, H, and I’’ 

12 before the period at the end; 

13 (3) in subsection (f)— 

14 (A) in paragraph (1)(B), by striking 

15 ‘‘country’’ and inserting ‘‘county’’; and 

16 (B) in paragraph (3), by striking ‘‘sub17 section (c)(2)(B) or (f)(4)’’ and inserting ‘‘sub18 section (c)(2)(A)(ii) or (f)(2)’’; 

19 (4) by striking subsection (i) and inserting the 

20 following: 

21 ‘‘(i) CONSERVATION APPLICATION PROCESS.— 

22 ‘‘(1) INITIAL APPLICATION.— 

23 ‘‘(A) IN GENERAL.—Not later than 1 year 

24 after the date of enactment of this subsection, 

25 the Secretary shall establish a single, simplified 

26 application for eligible entities to use in initially 
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1 requesting assistance under any conservation 

2 program administered by the Secretary (re3 ferred to in this subsection as the ‘initial appli4 cation’). 

5 ‘‘(B) REQUIREMENTS.—To the maximum 

6 extent practicable, the Secretary shall ensure 

7 that— 

8 ‘‘(i) a conservation program applicant 

9 is not required to provide information that 

10 is duplicative of information or resources 

11 already available to the Secretary for that 

12 applicant and the specific operation of the 

13 applicant; and 

14 ‘‘(ii) the initial application process is 

15 streamlined to minimize complexity and re16 dundancy. 

17 ‘‘(2) REVIEW OF APPLICATION PROCESS.— 

18 ‘‘(A) IN GENERAL.—Not later than 1 year 

19 after the date of enactment of this subsection, 

20 the Secretary shall review the application proc21 ess for each conservation program administered 

22 by the Secretary, including the forms and proc23 esses used to receive assistance requests from 

24 eligible program participants. 
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1 ‘‘(B) REQUIREMENTS.—In carrying out 

2 the review, the Secretary shall determine what 

3 information the participant is required to sub4 mit during the application process, including— 

5 ‘‘(i) identification information for the 

6 applicant; 

7 ‘‘(ii) identification and location infor8 mation for the land parcel or tract of con9 cern; 

10 ‘‘(iii) a general statement of the need 

11 or resource concern of the applicant for the 

12 land parcel or tract; and 

13 ‘‘(iv) the minimum amount of other 

14 information the Secretary considers to be 

15 essential for the applicant to provide per16 sonally. 

17 ‘‘(3) REVISION AND STREAMLINE.— 

18 ‘‘(A) IN GENERAL.—Not later than 1 year 

19 after the date of enactment of this subsection, 

20 the Secretary shall carry out a revision of the 

21 application forms and processes for each con22 servation program administered by the Sec23 retary to enable use of information technology 

24 to incorporate appropriate data and information 

25 concerning the conservation needs and solutions 
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1 appropriate for the land area identified by the 

2 applicant. 

3 ‘‘(B) GOAL.—The goal of the revision shall 

4 be to streamline the application process to mini5 mize the burden placed on applicants. 

6 ‘‘(4) CONSERVATION PROGRAM APPLICATION.— 

7 ‘‘(A) IN GENERAL.—Once the needs of an 

8 applicant have been adequately assessed by the 

9 Secretary, or a third party provider under sec10 tion 1242, based on the initial application, in 

11 order to determine the 1 or more programs 

12 under this title that best match the needs of the 

13 applicant, with the approval of the applicant, 

14 the Secretary may convert the initial application 

15 into the specific application for assistance for 

16 the relevant conservation program. 

17 ‘‘(B) SECRETARIAL BURDEN.—To the 

18 maximum extent practicable, the Secretary 

19 shall— 

20 ‘‘(i) complete the specific application 

21 for conservation program assistance for 

22 each applicant; and 

23 ‘‘(ii) request only that specific further 

24 information from the applicant that is not 

25 already available to the Secretary. 
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1 ‘‘(5) IMPLEMENTATION AND NOTIFICATION.— 

2 Not later than 1 year after the date of enactment 

3 of this subsection, the Secretary shall submit to the 

4 Committee on Agriculture of the House of Rep5 resentatives and the Committee on Agriculture, Nu6 trition, and Forestry of the Senate written notifica7 tion that the Secretary has fulfilled the requirements 

8 of this subsection.’’; and 

9 (5) by adding at the end the following: 

10 ‘‘(j) IMPROVED ADMINISTRATIVE EFFICIENCY AND

11 EFFECTIVENESS.—In administrating a conservation pro12 gram under this title, the Secretary shall, to the maximum 

13 extent practicable— 

14 ‘‘(1) seek to reduce administrative burdens and 

15 costs to producers by streamlining conservation 

16 planning and program resources; and 

17 ‘‘(2) take advantage of new technologies to en18 hance efficiency and effectiveness. 

19 ‘‘(k) RELATION TO OTHER PAYMENTS.—Any pay20 ment received by an owner or operator under this title, 

21 including an easement payment or rental payment, shall 

22 be in addition to, and not affect, the total amount of pay23 ments that the owner or operator is otherwise eligible to 

24 receive under any of the following: 

25 ‘‘(1) This Act. 
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1 ‘‘(2) The Agricultural Act of 1949 (7 U.S.C. 

2 1421 et seq.). 

3 ‘‘(3) The Agriculture Reform, Food, and Jobs 

4 Act of 2012. 

5 ‘‘(4) Any law that succeeds a law specified in 

6 paragraph (1), (2), or (3). 

7 ‘‘(l) FUNDING FOR INDIAN TRIBES.—In carrying out 

8 the conservation stewardship program under subchapter 

9 B of chapter 2 of subtitle D and the environmental quality 

10 incentives program under chapter 4 of subtitle D, the Sec11 retary may enter into alternative funding arrangements 

12 with Indian tribes if the Secretary determines that the 

13 goals and objectives of the programs will be met by such 

14 arrangements, and that statutory limitations regarding 

15 contracts with individual producers will not be exceeded 

16 by any Tribal member.’’. 

17 SEC. 2607. RULEMAKING AUTHORITY. 

18 Subtitle E of title XII of the Food Security Act of 

19 1985 (16 U.S.C. 3841 et seq.) is amended by adding at 

20 the end the following: 

21 ‘‘SEC. 1246. REGULATIONS. 

22 ‘‘(a) IN GENERAL.—The Secretary shall promulgate 

23 such regulations as are necessary to implement programs 

24 under this title, including such regulations as the Sec25 retary determines to be necessary to ensure a fair and rea-
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1 sonable application of the limitations established under 

2 section 1244(f). 

3 ‘‘(b) RULEMAKING PROCEDURE.—The promulgation 

4 of regulations and administration of programs under this 

5 title— 

6 ‘‘(1) shall be carried out without regard to— 

7 ‘‘(A) the Statement of Policy of the Sec8 retary effective July 24, 1971 (36 Fed. Reg. 

9 13804), relating to notices of proposed rule10 making and public participation in rulemaking; 

11 and 

12 ‘‘(B) chapter 35 of title 44, United States 

13 Code (commonly known as the Paperwork Re14 duction Act); and 

15 ‘‘(2) shall be made as an interim rule effective 

16 on publication with an opportunity for notice and 

17 comment. 

18 ‘‘(c) CONGRESSIONAL REVIEW OF AGENCY RULE19 MAKING.—In promulgating regulations under this section, 

20 the Secretary shall use the authority provided under sec21 tion 808 of title 5, United States Code.’’. 

22 SEC. 2608. STANDARDS FOR STATE TECHNICAL COMMIT23 TEES. 

24 Section 1261(b) of the Food Security Act of 1985 

25 (16 U.S.C. 3861(b)) is amended by striking ‘‘Not later 
280 

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1 than 180 days after the date of enactment of the Food, 

2 Conservation, and Energy Act of 2008, the Secretary shall 

3 develop’’ and inserting ‘‘The Secretary shall review and 

4 update as necessary’’. 

5 SEC. 2609. HIGHLY ERODIBLE LAND AND WETLAND CON6 SERVATION FOR CROP INSURANCE. 

7 (a) HIGHLY ERODIBLE LAND PROGRAM INELIGI8 BILITY.— 

9 (1) IN GENERAL.—Section 1211(a)(1) of the 

10 Food Security Act of 1985 (16 U.S.C. 3811(a)(1)) 

11 is amended— 

12 (A) in subparagraph (C), by striking ‘‘or’’ 

13 at the end; 

14 (B) in subparagraph (D), by adding ‘‘or’’ 

15 at the end; and 

16 (C) by adding at the end the following: 

17 ‘‘(E) any portion of premium paid by the 

18 Federal Crop Insurance Corporation for a plan 

19 or policy of insurance under the Federal Crop 

20 Insurance Act (7 U.S.C. 1501 et seq.);’’. 

21 (2) EXEMPTIONS.—Section 1212(a)(2) of the 

22 Food Security Act of 1985 (16 U.S.C. 3812(a)(2)) 

23 is amended— 

24 (A) in the first sentence, by striking ‘‘(2) 

25 If,’’ and inserting the following: 
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1 ‘‘(2) ELIGIBILITY BASED ON COMPLIANCE WITH

2 CONSERVATION PLAN.— 

3 ‘‘(A) IN GENERAL.—If,’’; 

4 (B) in the second sentence, by striking ‘‘In 

5 carrying’’ and inserting the following: 

6 ‘‘(B) MINIMIZATION OF DOCUMENTA7 TION.—In carrying’’; and 

8 (C) by adding at the end the following: 

9 ‘‘(C) CROP INSURANCE.—In the case of 

10 payments that are subject to section 1211 for 

11 the first time due to the amendment made by 

12 section 2609(a) of the Agriculture Reform, 

13 Food, and Jobs Act of 2012, any person who 

14 produces an agricultural commodity on the land 

15 that is the basis of the payments shall have 

16 until January 1 of the fifth year after the date 

17 on which the payments became subject to sec18 tion 1211 to develop and comply with an ap19 proved conservation plan.’’. 

20 (b) WETLAND CONSERVATION PROGRAM INELIGI21 BILITY.—Section 1221(b) of the Food Security Act of 

22 1985 (16 U.S.C. 3821) is amended by adding at the end 

23 the following: 

24 ‘‘(4) Any portion of premium paid by the Fed25 eral Crop Insurance Corporation for a plan or policy 
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1 of insurance under the Federal Crop Insurance Act 

2 (7 U.S.C. 1501 et seq.).’’. 

3 Subtitle H—Repeal of Superseded 

4 Program Authorities and Tran5 sitional Provisions 

6 SEC. 2701. COMPREHENSIVE CONSERVATION ENHANCE7 MENT PROGRAM. 

8 Section 1230 of the Food Security Act of 1985 (16 

9 U.S.C. 3830) is repealed. 

10 SEC. 2702. EMERGENCY FORESTRY CONSERVATION RE11 SERVE PROGRAM. 

12 (a) REPEAL.—Section 1231A of the Food Security 

13 Act of 1985 (16 U.S.C. 3831a) is repealed. 

14 (b) TRANSITIONAL PROVISIONS.— 

15 (1) EFFECT ON EXISTING CONTRACTS.—The 

16 amendment made by this section shall not affect the 

17 validity or terms of any contract entered into by the 

18 Secretary of Agriculture under section 1231A of the 

19 Food Security Act of 1985 (16 U.S.C. 3831a) before 

20 October 1, 2012, or any payments required to be 

21 made in connection with the contract. 

22 (2) FUNDING.—The Secretary may use funds 

23 made available to carry out the conservation reserve 

24 program under subchapter B of chapter 1 of subtitle 

25 D of title XII of the Food Security Act of 1985 (16 
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1 U.S.C. 3831 et seq.) to continue to carry out con2 tracts referred to in paragraph (1) using the provi3 sions of law and regulation applicable to such con4 tracts as in existence on September 30, 2012. 

5 (c) EFFECTIVE DATE.—The amendment made by 

6 this section shall take effect on October 1, 2012. 

7 SEC. 2703. WETLANDS RESERVE PROGRAM. 

8 (a) REPEAL.—Subchapter C of chapter 1 of subtitle 

9 D of title XII of the Food Security Act of 1985 (16 U.S.C. 

10 3837 et seq.) is repealed. 

11 (b) TRANSITIONAL PROVISIONS.— 

12 (1) EFFECT ON EXISTING CONTRACTS AND

13 EASEMENTS.—The amendment made by this section 

14 shall not affect the validity or terms of any contract 

15 or easement entered into by the Secretary of Agri16 culture under subchapter C of chapter 1 of subtitle 

17 D of title XII of the Food Security Act of 1985 (16 

18 U.S.C. 3837 et seq.) before October 1, 2012, or any 

19 payments required to be made in connection with the 

20 contract or easement. 

21 (2) FUNDING.— 

22 (A) USE OF PRIOR YEAR FUNDS.—Not23 withstanding the repeal of subchapter C of 

24 chapter 1 of subtitle D of title XII of the Food 

25 Security Act of 1985 (16 U.S.C. 3837 et seq.), 
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1 any funds made available from the Commodity 

2 Credit Corporation to carry out the wetlands 

3 reserve program under that subchapter for fis4 cal years 2009 through 2012 shall be made 

5 available to carry out contracts or easements 

6 referred to in paragraph (1) that were entered 

7 into prior to October 1, 2012 (including the 

8 provision of technical assistance), provided that 

9 no such contract or easement is modified so as 

10 to increase the amount of the payment received. 

11 (B) OTHER.—The Secretary may use 

12 funds made available to carry out the agricul13 tural conservation easement program under 

14 subtitle H of title XII of the Food Security Act 

15 of 1985, as added by section 2301 of this Act, 

16 to continue to carry out contracts and ease17 ments referred to in paragraph (1) using the 

18 provisions of law and regulation applicable to 

19 such contracts and easements as in existence on 

20 September 30, 2012. 

21 (c) EFFECTIVE DATE.—The amendment made by 

22 this section shall take effect on October 1, 2012. 
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1 SEC. 2704. FARMLAND PROTECTION PROGRAM AND FARM 

2 VIABILITY PROGRAM. 

3 (a) REPEAL.—Subchapter C of chapter 2 of subtitle 

4 D of title XII of the Food Security Act of 1985 (16 U.S.C. 

5 3838h et seq.) is repealed. 

6 (b) TRANSITIONAL PROVISIONS.— 

7 (1) EFFECT ON EXISTING AGREEMENTS AND

8 EASEMENTS.—The amendment made by this section 

9 shall not affect the validity or terms of any agree10 ment or easement entered into by the Secretary of 

11 Agriculture under subchapter C of chapter 2 of sub12 title D of title XII of the Food Security Act of 1985 

13 (16 U.S.C. 3838h et seq.) before October 1, 2012, 

14 or any payments required to be made in connection 

15 with the agreement or easement. 

16 (2) FUNDING.— 

17 (A) USE OF PRIOR YEAR FUNDS.—Not18 withstanding the repeal of subchapter C of 

19 chapter 2 of subtitle D of title XII of the Food 

20 Security Act of 1985 (16 U.S.C. 3838h et seq.), 

21 any funds made available from the Commodity 

22 Credit Corporation to carry out the farmland 

23 protection program under that subchapter for 

24 fiscal years 2009 through 2012 shall be made 

25 available to carry out agreements and ease26 ments referred to in paragraph (1) that were 
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1 entered into prior to October 1, 2012 (including 

2 the provision of technical assistance). 

3 (B) OTHER.—On exhaustion of funds 

4 made available under subparagraph (A), the 

5 Secretary may use funds made available to 

6 carry out the agricultural conservation ease7 ment program under subtitle H of title XII of 

8 the Food Security Act of 1985, as added by 

9 section 2301 of this Act, to continue to carry 

10 out agreements and easements referred to in 

11 paragraph (1) using the provisions of law and 

12 regulation applicable to such agreements and 

13 easement as in existence on September 30, 

14 2012. 

15 (c) EFFECTIVE DATE.—The amendment made by 

16 this section shall take effect on October 1, 2012. 

17 SEC. 2705. GRASSLAND RESERVE PROGRAM. 

18 (a) REPEAL.—Subchapter D of chapter 2 of subtitle 

19 D of title XII of the Food Security Act of 1985 (16 U.S.C. 

20 3838n et seq.) is repealed. 

21 (b) TRANSITIONAL PROVISIONS.— 

22 (1) EFFECT ON EXISTING CONTRACTS, AGREE23 MENTS, AND EASEMENTS.—The amendment made 

24 by this section shall not affect the validity or terms 

25 of any contract, agreement, or easement entered into 
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1 by the Secretary of Agriculture under subchapter D 

2 of chapter 2 of subtitle D of title XII of the Food 

3 Security Act of 1985 (16 U.S.C. 3838n et seq.) be4 fore October 1, 2012, or any payments required to 

5 be made in connection with the contract, agreement, 

6 or easement. 

7 (2) FUNDING.— 

8 (A) USE OF PRIOR YEAR FUNDS.—Not9 withstanding the repeal of subchapter D of 

10 chapter 2 of subtitle D of title XII of the Food 

11 Security Act of 1985 (16 U.S.C. 3838n et seq.), 

12 any funds made available from the Commodity 

13 Credit Corporation to carry out the grassland 

14 reserve program under that subchapter for fis15 cal years 2009 through 2012 shall be made 

16 available to carry out contracts, agreements, or 

17 easements referred to in paragraph (1) that 

18 were entered into prior to October 1, 2012 (in19 cluding the provision of technical assistance), 

20 provided that no such contract, agreement, or 

21 easement is modified so as to increase the 

22 amount of the payment received. 

23 (B) OTHER.—The Secretary may use 

24 funds made available to carry out the agricul25 tural conservation easement program under 
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1 subtitle H of title XII of the Food Security Act 

2 of 1985, as added by section 2301 of this Act, 

3 to continue to carry out contracts, agreements, 

4 and easements referred to in paragraph (1) 

5 using the provisions of law and regulation appli6 cable to such contracts, agreements, and ease7 ments as in existence on September 30, 2012. 

8 (c) EFFECTIVE DATE.—The amendment made by 

9 this section shall take effect on October 1, 2012. 

10 SEC. 2706. AGRICULTURAL WATER ENHANCEMENT PRO11 GRAM. 

12 (a) REPEAL.—Section 1240I of the Food Security 

13 Act of 1985 (16 U.S.C. 3839aa–9) is repealed. 

14 (b) TRANSITIONAL PROVISIONS.— 

15 (1) EFFECT ON EXISTING CONTRACTS AND

16 AGREEMENTS.—The amendment made by this sec17 tion shall not affect the validity or terms of any con18 tract or agreement entered into by the Secretary of 

19 Agriculture under section 1240I of the Food Secu20 rity Act of 1985 (16 U.S.C. 3839aa–9) before Octo21 ber 1, 2012, or any payments required to be made 

22 in connection with the contract or agreement. 

23 (2) FUNDING.— 

24 (A) USE OF PRIOR YEAR FUNDS.—Not25 withstanding the repeal of section 1240I of the 
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1 Food Security Act of 1985 (16 U.S.C. 3839aa– 

2 9), any funds made available from the Com3 modity Credit Corporation to carry out the ag4 ricultural water enhancement program under 

5 that section for fiscal years 2009 through 2012 

6 shall be made available to carry out contracts 

7 and agreements referred to in paragraph (1) 

8 that were entered into prior to October 1, 2012 

9 (including the provision of technical assistance). 

10 (B) OTHER.—On exhaustion of funds 

11 made available under subparagraph (A), the 

12 Secretary may use funds made available to 

13 carry out the regional conservation partnerships 

14 program under subtitle I of title XII of the 

15 Food Security Act of 1985, as added by section 

16 2401 of this Act, to continue to carry out con17 tracts and agreements referred to in paragraph 

18 (1) using the provisions of law and regulation 

19 applicable to such contracts and agreements as 

20 in existence on September 30, 2012. 

21 (c) EFFECTIVE DATE.—The amendment made by 

22 this section shall take effect on October 1, 2012. 

23 SEC. 2707. WILDLIFE HABITAT INCENTIVE PROGRAM. 

24 (a) REPEAL.—Section 1240N of the Food Security 

25 Act of 1985 (16 U.S.C. 3839bb–1) is repealed. 
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1 (b) TRANSITIONAL PROVISIONS.— 

2 (1) EFFECT ON EXISTING CONTRACTS.—The 

3 amendment made by this section shall not affect the 

4 validity or terms of any contract entered into by the 

5 Secretary of Agriculture under section 1240N of the 

6 Food Security Act of 1985 (16 U.S.C. 3839bb–1) 

7 before October 1, 2012, or any payments required to 

8 be made in connection with the contract. 

9 (2) FUNDING.— 

10 (A) USE OF PRIOR YEAR FUNDS.—Not11 withstanding the repeal of section 1240N of the 

12 Food Security Act of 1985 (16 U.S.C. 3839bb– 

13 1), any funds made available from the Com14 modity Credit Corporation to carry out the 

15 wildlife habitat incentive program under that 

16 section for fiscal years 2009 through 2012 shall 

17 be made available to carry out contracts re18 ferred to in paragraph (1) which were entered 

19 into prior to October 1, 2012 (including the 

20 provision of technical assistance). 

21 (B) OTHER.—On exhaustion of funds 

22 made available under subparagraph (A), the 

23 Secretary may use funds made available to 

24 carry out the environmental quality incentives 

25 program under chapter 4 of subtitle D of title 
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1 XII of the Food Security Act of 1985 (16 

2 U.S.C. 3839aa et seq.) to continue to carry out 

3 contracts referred to in paragraph (1) using the 

4 provisions of law and regulation applicable to 

5 such contracts as in existence on September 30, 

6 2012. 

7 (c) EFFECTIVE DATE.—The amendment made by 

8 this section shall take effect on October 1, 2012. 

9 SEC. 2708. GREAT LAKES BASIN PROGRAM. 

10 (a) REPEAL.—Section 1240P of the Food Security 

11 Act of 1985 (16 U.S.C. 3839bb–3) is repealed. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall take effect on October 1, 2012. 

14 SEC. 2709. CHESAPEAKE BAY WATERSHED PROGRAM. 

15 (a) REPEAL.—Section 1240Q of the Food Security 

16 Act of 1985 (16 U.S.C. 3839bb–4) is repealed. 

17 (b) TRANSITIONAL PROVISIONS.— 

18 (1) EFFECT ON EXISTING CONTRACTS, AGREE19 MENTS, AND EASEMENTS.—The amendment made 

20 by this section shall not affect the validity or terms 

21 of any contract, agreement, or easement entered into 

22 by the Secretary of Agriculture under section 1240Q 

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

24 3839bb–4) before October 1, 2012, or any payments 
292 

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1 required to be made in connection with the contract, 

2 agreement, or easement. 

3 (2) FUNDING.— 

4 (A) USE OF PRIOR YEAR FUNDS.—Not5 withstanding the repeal of section 1240Q of the 

6 Food Security Act of 1985 (16 U.S.C. 3839bb– 

7 4), any funds made available from the Com8 modity Credit Corporation to carry out the 

9 Chesapeake Bay watershed program under that 

10 section for fiscal years 2009 through 2012 shall 

11 be made available to carry out contracts, agree12 ments, and easements referred to in paragraph 

13 (1) that were entered into prior to October 1, 

14 2012 (including the provision of technical as15 sistance). 

16 (B) OTHER.—The Secretary may use 

17 funds made available to carry out the regional 

18 conservation partnerships program under sub19 title I of title XII of the Food Security Act of 

20 1985, as added by section 2401 of this Act, to 

21 continue to carry out contracts, agreements, 

22 and easements referred to in paragraph (1) 

23 using the provisions of law and regulation appli24 cable to such contracts, agreements, and ease25 ments as in existence on September 30, 2012. 
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1 (c) EFFECTIVE DATE.—The amendment made by 

2 this section shall take effect on October 1, 2012. 

3 SEC. 2710. COOPERATIVE CONSERVATION PARTNERSHIP 

4 INITIATIVE. 

5 (a) REPEAL.—Section 1243 of the Food Security Act 

6 of 1985 (16 U.S.C. 3843) is repealed. 

7 (b) TRANSITIONAL PROVISIONS.— 

8 (1) EFFECT ON EXISTING CONTRACTS AND

9 AGREEMENTS.—The amendment made by this sec10 tion shall not affect the validity or terms of any con11 tract or agreement entered into by the Secretary of 

12 Agriculture under section 1243 of the Food Security 

13 Act of 1985 (16 U.S.C. 3843) before October 1, 

14 2012, or any payments required to be made in con15 nection with the contract or agreement. 

16 (2) FUNDING.— 

17 (A) USE OF PRIOR YEAR FUNDS.—Not18 withstanding the repeal of section 1243 of the 

19 Food Security Act of 1985 (16 U.S.C. 3843), 

20 any funds made available from the Commodity 

21 Credit Corporation to carry out the cooperative 

22 conservation partnership initiative under that 

23 section for fiscal years 2009 through 2012 shall 

24 be made available to carry out contracts and 

25 agreements referred to in paragraph (1) that 
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1 were entered into prior to October 1, 2012 (in2 cluding the provision of technical assistance). 

3 (B) OTHER.—On exhaustion of funds 

4 made available under subparagraph (A), the 

5 Secretary may use funds made available to 

6 carry out the regional conservation partnerships 

7 program under subtitle I of title XII of the 

8 Food Security Act of 1985, as added by section 

9 2401 of this Act, to continue to carry out con10 tracts and agreements referred to in paragraph 

11 (1) using the provisions of law and regulation 

12 applicable to such contracts and agreements as 

13 in existence on September 30, 2012. 

14 (c) EFFECTIVE DATE.—The amendment made by 

15 this section shall take effect on October 1, 2012. 

16 SEC. 2711. ENVIRONMENTAL EASEMENT PROGRAM. 

17 Chapter 3 of subtitle D of title XII of the Food Secu18 rity Act of 1985 (16 U.S.C. 3839 et seq.) is repealed. 

19 SEC. 2712. TECHNICAL AMENDMENTS. 

20 (a) Section 1201(a) of the Food Security Act of 1985 

21 (16 U.S.C. 3801(a)) is amended in the matter preceding 

22 paragraph (1) by striking ‘‘E’’ and inserting ‘‘I’’. 

23 (b) Section 1211(a) of the Food Security Act of 1985 

24 (16 U.S.C. 3811(a)) is amended by striking ‘‘predomi25 nate’’ each place it appears and inserting ‘‘predominant’’. 
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1 (c) Section 1242(i) of the Food Security Act of 

2 1985(16 U.S.C. 3842(i)) is amended in the subsection 

3 heading by striking ‘‘SPECIALITY’’ and inserting ‘‘SPE4 CIALTY’’. 

5 TITLE III—TRADE 

6 Subtitle A—Food for Peace Act 

7 SEC. 3001. SET-ASIDE FOR SUPPORT FOR ORGANIZATIONS 

8 THROUGH WHICH NONEMERGENCY ASSIST9 ANCE IS PROVIDED. 

10 Effective October 1, 2012, section 202(e)(1) of the 

11 Food for Peace Act (7 U.S.C. 1722(e)(1)) is amended— 

12 (1) in the matter preceding subparagraph (A), 

13 by striking ‘‘13 percent’’ and inserting ‘‘15 per14 cent’’; and 

15 (2) in subparagraph (A), by striking ‘‘new’’ and 

16 inserting ‘‘and enhancing’’. 

17 SEC. 3002. FOOD AID QUALITY. 

18 Section 202(h) of the Food for Peace Act (7 U.S.C. 

19 1722(h)) is amended— 

20 (1) by striking paragraph (1) and inserting the 

21 following: 

22 ‘‘(1) IN GENERAL.—The Administrator shall 

23 use funds made available for fiscal year 2013 and 

24 subsequent fiscal years to carry out this title— 
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1 ‘‘(A) to assess the types and quality of ag2 ricultural commodities and products donated for 

3 food aid; 

4 ‘‘(B) to adjust products and formulations, 

5 including potential introduction of new 

6 fortificants and products, as necessary to cost7 effectively meet nutrient needs of target popu8 lations; 

9 ‘‘(C) to test prototypes; 

10 ‘‘(D) to adopt new specifications or im11 prove existing specifications for micronutrient 

12 fortified food aid products, based on the latest 

13 developments in food and nutrition science, and 

14 in coordination with other international part15 ners; 

16 ‘‘(E) to develop new program guidance to 

17 facilitate improved matching of products to pur18 poses having nutritional intent, in coordination 

19 with other international partners; 

20 ‘‘(F) to develop improved guidance for im21 plementing partners on how to address nutri22 tional deficiencies that emerge among recipients 

23 for whom food assistance is the sole source of 

24 diet in emergency programs that extend beyond 
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1 1 year, in coordination with other international 

2 partners; and 

3 ‘‘(G) to evaluate, in appropriate settings 

4 and as necessary, the performance and cost-ef5 fectiveness of new or modified specialized food 

6 products and program approaches designed to 

7 meet the nutritional needs of the most vulner8 able groups, such as pregnant and lactating 

9 mothers, and children under the age of 5.’’; and 

10 (2) in paragraph (3), by striking ‘‘2011’’ and 

11 inserting ‘‘2017’’. 

12 SEC. 3003. MINIMUM LEVELS OF ASSISTANCE. 

13 Section 204(a) of the Food for Peace Act (7 U.S.C. 

14 1724(a)) is amended— 

15 (1) in paragraph (1), by striking ‘‘2012’’ and 

16 inserting ‘‘2017’’; and 

17 (2) in paragraph (2), by striking ‘‘2012’’ and 

18 inserting ‘‘2017’’. 

19 SEC. 3004. REAUTHORIZATION OF FOOD AID CONSULT20 ATIVE GROUP. 

21 Section 205(f) of the Food for Peace Act (7 U.S.C. 

22 1725(f)) is amended by striking ‘‘2012’’ and inserting 

23 ‘‘2017’’. 
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1 SEC. 3005. OVERSIGHT, MONITORING, AND EVALUATION OF 

2 FOOD FOR PEACE ACT PROGRAMS. 

3 Section 207(f) of the Food for Peace Act (7 U.S.C. 

4 1726a(f)) is amended— 

5 (1) by striking paragraph (4) and redesignating 

6 paragraphs (5) and (6) as paragraphs (4) and (5), 

7 respectively; and 

8 (2) in subparagraph (A) of paragraph (5) (as 

9 so redesignated)— 

10 (A) by striking ‘‘2012’’ and inserting 

11 ‘‘2017’’; and 

12 (B) by striking ‘‘during fiscal year 2009’’ 

13 and inserting ‘‘during the period of fiscal years 

14 2013 through 2017’’. 

15 SEC. 3006. ASSISTANCE FOR STOCKPILING AND RAPID 

16 TRANSPORTATION, DELIVERY, AND DIS17 TRIBUTION OF SHELF-STABLE PRE18 PACKAGED FOODS. 

19 Section 208(f) of the Food for Peace Act (7 U.S.C. 

20 1726b(f)) is amended by striking ‘‘2012’’ and inserting 

21 ‘‘2017’’. 

22 SEC. 3007. LIMITATION ON TOTAL VOLUME OF COMMOD23 ITIES MONETIZED. 

24 Section 403 of the Food for Peace Act (7 U.S.C. 

25 1733) is amended by adding at the end the following: 
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1 ‘‘(m) LIMITATION ON MONETIZATION OF COMMOD2 ITIES.— 

3 ‘‘(1) LIMITATION.— 

4 ‘‘(A) IN GENERAL.—Unless the Adminis5 trator grants a waiver under paragraph (2), no 

6 commodity may be made available under this 

7 Act unless the rate of return for the commodity 

8 (as determined under subparagraph (B)) is at 

9 least 70 percent. 

10 ‘‘(B) RATE OF RETURN.—For purposes of 

11 subparagraph (A), the rate of return shall be 

12 equal to the proportion that— 

13 ‘‘(i) the proceeds the implementing 

14 partners generate through monetization; 

15 bears to 

16 ‘‘(ii) the cost to the Federal Govern17 ment to procure and ship the commodities 

18 to a recipient country for monetization. 

19 ‘‘(2) WAIVER AUTHORITY.—The Administrator 

20 may waive the application of the limitation in para21 graph (1) with regard to a commodity for a recipient 

22 country if the Administrator determines that it is 

23 necessary to achieve the purposes of this Act in the 

24 recipient country. 
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1 ‘‘(3) REPORT.—Not later than 90 days after a 

2 waiver is granted under paragraph (2), the Adminis3 trator shall prepare, publish in the Federal Register, 

4 and submit to the Committees on Foreign Affairs, 

5 Agriculture, and Appropriations of the House of 

6 Representatives, and the Committees on Appropria7 tions, Foreign Relations, and Agriculture, Nutrition, 

8 and Forestry of the Senate a report that— 

9 ‘‘(A) contains the reasons for granting the 

10 waiver and the actual rate of return for the 

11 commodity; and 

12 ‘‘(B) includes for the commodity the costs 

13 of bagging or further processing, ocean trans14 portation, inland transportation in the recipient 

15 country, storage costs, and any other informa16 tion that the Administrator determines to be 

17 necessary.’’. 

18 SEC. 3008. FLEXIBILITY. 

19 Section 406 of the Food for Peace Act (7 U.S.C. 

20 1736) is amended— 

21 (1) by redesignating subsections (c) and (d) as 

22 subsections (d) and (e), respectively; and 

23 (2) by inserting after subsection (b) the fol24 lowing: 
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1 ‘‘(c) FLEXIBILITY.—Notwithstanding any other pro2 vision of law and as necessary to achieve the purposes of 

3 this Act, funds available under this Act may be used to 

4 pay the costs of up to 20 percent of activities conducted 

5 in recipient countries by nonprofit voluntary organiza6 tions, cooperatives, or intergovernmental agencies or orga7 nizations.’’. 

8 SEC. 3009. PROCUREMENT, TRANSPORTATION, TESTING, 

9 AND STORAGE OF AGRICULTURAL COMMOD10 ITIES FOR PREPOSITIONING IN THE UNITED 

11 STATES AND FOREIGN COUNTRIES. 

12 Section 407 of the Food for Peace Act (7 U.S.C. 

13 1736a) is amended— 

14 (1) in subparagraph (c)(4)(A)— 

15 (A) by striking ‘‘2012’’ and inserting 

16 ‘‘2017’’; and 

17 (B) by striking ‘‘for each such fiscal year 

18 not more than $10,000,000 of such funds’’ and 

19 inserting ‘‘for each of fiscal years 2001 through 

20 2012 not more than $10,000,000 of such funds 

21 and for each of fiscal years 2013 through 2017 

22 not more than $15,000,000 of such funds’’; and 

23 (2) by adding at the end the following: 

24 ‘‘(g) FUNDING FOR TESTING OF FOOD AID SHIP25 MENTS.—Funds made available for agricultural products 
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1 acquired under this Act and section 3107 of the Farm 

2 Security and Rural Investment Act of 2002 (7 U.S.C. 

3 1736o–1) may be used to pay for the testing of those agri4 cultural products.’’. 

5 SEC. 3010. DEADLINE FOR AGREEMENTS TO FINANCE 

6 SALES OR TO PROVIDE OTHER ASSISTANCE. 

7 Section 408 of the Food for Peace Act (7 U.S.C. 

8 1736b) is amended by striking ‘‘2012’’ and inserting 

9 ‘‘2017’’. 

10 SEC. 3011. MINIMUM LEVEL OF NONEMERGENCY FOOD AS11 SISTANCE. 

12 Section 412 of the Food for Peace Act (7 U.S.C. 

13 1736f) is amended by striking subsection (e) and inserting 

14 the following: 

15 ‘‘(e) MINIMUM LEVEL OF NONEMERGENCY FOOD AS16 SISTANCE.— 

17 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

18 of the amounts made available to carry out emer19 gency and nonemergency food assistance programs 

20 under title II, not less than 20 nor more than 30 

21 percent for each of fiscal years 2013 through 2017 

22 shall be expended for nonemergency food assistance 

23 programs under title II. 

24 ‘‘(2) MINIMUM LEVEL.—The amount made 

25 available to carry out nonemergency food assistance 
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1 programs under title II shall not be less than 

2 $275,000,000 for any fiscal year.’’. 

3 SEC. 3012. COORDINATION OF FOREIGN ASSISTANCE PRO4 GRAMS REPORT. 

5 Section 413 of the Food for Peace Act (7 U.S.C. 

6 1736(g)) is amended— 

7 (1) by striking ‘‘(a) IN GENERAL.—To the 

8 maximum’’ and inserting ‘‘To the maximum’’; and 

9 (2) by striking subsection (b). 

10 SEC. 3013. MICRONUTRIENT FORTIFICATION PROGRAMS. 

11 (a) ELIMINATION OF OBSOLETE REFERENCE TO

12 STUDY.—Section 415(a)(2)(B) of the Food for Peace Act 

13 (7 U.S.C. 1736g–2(a)(2)(B)) is amended by striking ‘‘, 

14 using recommendations’’ and all that follows through 

15 ‘‘quality enhancements’’. 

16 (b) EXTENSION.—Section 415(c) of the Food for 

17 Peace Act (7 U.S.C. 1736g–2(c)) is amended by striking 

18 ‘‘2012’’ and inserting ‘‘2017’’. 

19 SEC. 3014. JOHN OGONOWSKI AND DOUG BEREUTER FARM20 ER-TO-FARMER PROGRAM. 

21 Section 501 of the Food for Peace Act (7 U.S.C. 

22 1737) is amended— 

23 (1) in subsection (d)— 

24 (A) by striking ‘‘0.5 percent’’ and inserting 

25 ‘‘0.6 percent’’; and 
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1 (B) by striking ‘‘2012’’ and inserting 

2 ‘‘2017’’; and 

3 (2) in subsection (e)(1), by striking ‘‘2012’’ and 

4 inserting ‘‘2017’’. 

5 SEC. 3015. PROHIBITION ON ASSISTANCE FOR NORTH 

6 KOREA. 

7 (a) IN GENERAL.—No amounts may be obligated or 

8 expended to provide assistance under title II of the Food 

9 for Peace Act (7 U.S.C. 1721 et seq.) to the Democratic 

10 People’s Republic of Korea. 

11 (b) NATIONAL INTEREST WAIVER.—The President 

12 may waive subsection (a) if the President determines and 

13 certifies to the Committees on Agriculture, Nutrition, and 

14 Forestry and Foreign Relations of the Senate and the 

15 Committees on Agriculture and Foreign Affairs of the 

16 House of Representatives that the waiver is in the national 

17 interest of the United States. 

18 Subtitle B—Agricultural Trade Act 

19 of 1978 

20 SEC. 3101. EXPORT CREDIT GUARANTEE PROGRAMS. 

21 Section 211 of the Agricultural Trade Act of 1978 

22 (7 U.S.C. 5641) is amended by striking subsection (b) and 

23 inserting the following: 

24 ‘‘(b) EXPORT CREDIT GUARANTEE PROGRAMS.—The 

25 Commodity Credit Corporation shall make available for 
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1 each of fiscal years 2013 through 2017 credit guarantees 

2 under section 202(a) in an amount equal to not more than 

3 $4,500,000,000 in credit guarantees.’’. 

4 SEC. 3102. FUNDING FOR MARKET ACCESS PROGRAM. 

5 Section 211(c)(1)(A) of the Agricultural Trade Act 

6 of 1978 (7 U.S.C. 5641(c)(1)(A)) is amended by striking 

7 ‘‘2012’’ and inserting ‘‘2017’’. 

8 SEC. 3103. FOREIGN MARKET DEVELOPMENT COOPERATOR 

9 PROGRAM. 

10 Section 703(a) of the Agricultural Trade Act of 1978 

11 (7 U.S.C. 5723(a)) is amended by striking ‘‘2012’’ and 

12 inserting ‘‘2017’’. 

13 Subtitle C—Other Agricultural 

14 Trade Laws 

15 SEC. 3201. FOOD FOR PROGRESS ACT OF 1985. 

16 (a) EXTENSION.—The Food for Progress Act of 1985 

17 (7 U.S.C. 1736o) is amended— 

18 (1) in subsection (f)(3), by striking ‘‘2012’’ and 

19 inserting ‘‘2017’’; 

20 (2) in subsection (g), by striking ‘‘2012’’ and 

21 inserting ‘‘2017’’; 

22 (3) in subsection (k), by striking ‘‘2012’’ and 

23 inserting ‘‘2017’’; and 

24 (4) in subsection (l)(1), by striking ‘‘2012’’ and 

25 inserting ‘‘2017’’. 
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1 (b) REPEAL OF COMPLETED PROJECT.—Subsection 

2 (f) of the Food for Progress Act of 1985 (7 U.S.C. 1736o) 

3 is amended by striking paragraph (6). 

4 (c) FLEXIBILITY.—The Food for Progress Act of 

5 1985 (7 U.S.C. 1736o) is amended in subsection (l) by 

6 adding at the end the following: 

7 ‘‘(5) FLEXIBILITY.—Notwithstanding any other 

8 provision of law and as necessary to achieve the pur9 poses of this Act, funds available under this Act may 

10 be used to pay the costs of up to 20 percent of ac11 tivities conducted in recipient countries by nonprofit 

12 voluntary organizations, cooperatives, or intergovern13 mental agencies or organizations.’’. 

14 (d) LIMITATION ON TOTAL VOLUME OF COMMOD15 ITIES MONETIZED.—The Food for Progress Act of 1985 

16 (7 U.S.C. 1736o) is amended by adding at the end the 

17 following: 

18 ‘‘(p) LIMITATION ON MONETIZATION OF COMMOD19 ITIES.— 

20 ‘‘(1) LIMITATION.— 

21 ‘‘(A) IN GENERAL.—Unless the Secretary 

22 grants a waiver under paragraph (2), no eligible 

23 commodity may be made available under this 

24 section unless the rate of return for the eligible 
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1 commodity (as determined under subparagraph 

2 (B)) is at least 70 percent. 

3 ‘‘(B) RATE OF RETURN.—For purposes of 

4 subparagraph (A), the rate of return shall be 

5 equal to the proportion that— 

6 ‘‘(i) the proceeds the implementing 

7 partners generate through monetization; 

8 bears to 

9 ‘‘(ii) the cost to the Federal Govern10 ment to procure and ship the eligible com11 modities to a recipient country for mone12 tization. 

13 ‘‘(2) WAIVER AUTHORITY.—The Secretary may 

14 waive the application of the limitation in paragraph 

15 (1) with regard to an eligible commodity for a recipi16 ent country if the Secretary determines that it is 

17 necessary to achieve the purposes of this Act in the 

18 recipient country. 

19 ‘‘(3) REPORT.—Not later than 90 days after a 

20 waiver is granted under paragraph (2), the Sec21 retary shall prepare, publish in the Federal Register, 

22 and submit to the Committees on Foreign Affairs, 

23 Agriculture, and Appropriations of the House of 

24 Representatives, and the Committees on Appropria-
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1 tions, Foreign Relations, and Agriculture, Nutrition, 

2 and Forestry of the Senate a report that— 

3 ‘‘(A) contains the reasons for granting the 

4 waiver and the actual rate of return for the eli5 gible commodity; and 

6 ‘‘(B) includes for the commodity the costs 

7 of bagging or further processing, ocean trans8 portation, inland transportation in the recipient 

9 country, storage costs, and any other informa10 tion that the Secretary determines to be nec11 essary.’’. 

12 SEC. 3202. BILL EMERSON HUMANITARIAN TRUST. 

13 Section 302 of the Bill Emerson Humanitarian Trust 

14 Act (7 U.S.C. 1736f–1) is amended— 

15 (1) in subsection (b)(2)(B)(i), by striking 

16 ‘‘2012’’ both places it appears and inserting ‘‘2017’’; 

17 and 

18 (2) in subsection (h), by striking ‘‘2012’’ both 

19 places it appears and inserting ‘‘2017’’. 

20 SEC. 3203. PROMOTION OF AGRICULTURAL EXPORTS TO 

21 EMERGING MARKETS. 

22 (a) DIRECT CREDITS OR EXPORT CREDIT GUARAN23 TEES.—Section 1542(a) of the Food, Agriculture, Con24 servation, and Trade Act of 1990 (Public Law 101–624; 
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1 7 U.S.C. 5622 note) is amended by striking ‘‘2012’’ and 

2 inserting ‘‘2017’’. 

3 (b) DEVELOPMENT OF AGRICULTURAL SYSTEMS.— 

4 Section 1542(d)(1)(A)(i) of the Food, Agriculture, Con5 servation, and Trade Act of 1990 (Public Law 101–624; 

6 7 U.S.C. 5622 note) is amended by striking ‘‘2012’’ and 

7 inserting ‘‘2017’’. 

8 SEC. 3204. MCGOVERN-DOLE INTERNATIONAL FOOD FOR 

9 EDUCATION AND CHILD NUTRITION PRO10 GRAM. 

11 (a) REAUTHORIZATION.—Section 3107(l)(2) of the 

12 Farm Security and Rural Investment Act of 2002 (7 

13 U.S.C. 1736o–1(l)(2)) is amended by striking ‘‘2012’’ and 

14 inserting ‘‘2017’’. 

15 (b) TECHNICAL CORRECTION.—Section 3107(d) of 

16 the Farm Security and Rural Investment Act of 2002 (7 

17 U.S.C. 1736o–1(d)) is amended by striking ‘‘to’’ in the 

18 matter preceding paragraph (1). 

19 SEC. 3205. TECHNICAL ASSISTANCE FOR SPECIALTY CROPS. 

20 (a) PURPOSE.—Section 3205(b) of the Farm Secu21 rity and Rural Investment Act of 2002 (7 U.S.C. 5680(b)) 

22 is amended by striking ‘‘related barriers to trade’’ and in23 serting ‘‘technical barriers to trade’’. 
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1 (b) FUNDING.—Section 3205(e)(2) of the Farm Se2 curity and Rural Investment Act of 2002 (7 U.S.C. 

3 5680(e)(2)) is amended— 

4 (1) by inserting ‘‘and’’ at the end of subpara5 graph (C); and 

6 (2) by striking subparagraphs (D) and (E) and 

7 inserting the following new subparagraph: 

8 ‘‘(D) $9,000,000 for each of fiscal years 

9 2011 through 2017.’’. 

10 SEC. 3206. GLOBAL CROP DIVERSITY TRUST. 

11 Section 3202(c) of the Food, Conservation, and En12 ergy Act of 2008 (Public Law 110–246; 22 U.S.C. 2220a 

13 note) is amended by striking ‘‘2008 through 2012’’ and 

14 inserting ‘‘2013 through 2017’’. 

15 SEC. 3207. LOCAL AND REGIONAL FOOD AID PROCURE16 MENT PROJECTS. 

17 Section 3206 of the Food, Conservation, and Energy 

18 Act of 2008 (7 U.S.C. 1726c) is amended— 

19 (1) in subsection (b)— 

20 (A) by striking ‘‘(b) STUDY; FIELD-BASED

21 PROJECTS.—’’ and all that follows through ‘‘(2) 

22 FIELD-BASED PROJECTS.—’’ and inserting the 

23 following: 

24 ‘‘(b) FIELD-BASED PROJECTS.—’’; 
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1 (B) by redesignating subparagraphs (A) 

2 and (B) as paragraphs (1) and (2), respectively, 

3 and indenting appropriately; 

4 (C) in paragraph (1) (as so redesignated), 

5 by striking ‘‘subparagraph (B)’’ and inserting 

6 ‘‘paragraph (2)’’; and 

7 (D) in paragraph (2) (as so redesignated), 

8 by striking ‘‘subparagraph (A)’’ and inserting 

9 ‘‘paragraph (1)’’; 

10 (2) in subsection (c)(1), by striking ‘‘subsection 

11 (b)(2)’’ and inserting ‘‘subsection (b)’’; 

12 (3) by striking subsections (d), (f), and (g); 

13 (4) by redesignating subsection (e) as sub14 section (d); 

15 (5) in subsection (d) (as so redesignated)— 

16 (A) in paragraph (2)— 

17 (i) by striking subparagraph (B); and 

18 (ii) in subparagraph (A)— 

19 (I) by striking ‘‘(A) APPLICA20 TION.—’’ and all that follows through 

21 ‘‘To be eligible’’ in clause (i) and in22 serting the following: 

23 ‘‘(A) IN GENERAL.—To be eligible’’; 
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1 (II) by redesignating clause (ii) 

2 as subparagraph (B) and indenting 

3 appropriately; and 

4 (III) in subparagraph (B) (as so 

5 redesignated), by striking ‘‘clause (i)’’ 

6 and inserting ‘‘subparagraph (A)’’; 

7 and 

8 (B) by striking paragraph (4); and 

9 (6) by adding at the end the following: 

10 ‘‘(e) FUNDING.— 

11 ‘‘(1) AUTHORIZATION OF APPROPRIATIONS.— 

12 There is authorized to be appropriated to carry out 

13 this section $40,000,000 for each of fiscal years 

14 2013 through 2017. 

15 ‘‘(2) PREFERENCE.—In carrying out this sec16 tion, the Secretary may give a preference to eligible 

17 organizations that have, or are working toward, 

18 projects under the McGovern-Dole International 

19 Food for Education and Child Nutrition Program 

20 established under section 3107 of the Farm Security 

21 and Rural Investment Act of 2002 (7 U.S.C. 1736o– 

22 1). 

23 ‘‘(3) REPORTING.—Each year, the Secretary 

24 shall submit to the appropriate committees of Con-
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1 gress a report that describes the use of funds under 

2 this section, including— 

3 ‘‘(A) the impact of procurements and 

4 projects on— 

5 ‘‘(i) local and regional agricultural 

6 producers; and 

7 ‘‘(ii) markets and consumers, includ8 ing low-income consumers; and 

9 ‘‘(B) implementation time frames and 

10 costs.’’. 

11 SEC. 3208. DONALD PAYNE HORN OF AFRICA FOOD RESIL12 IENCE PROGRAM. 

13 (a) DEFINITIONS.—In this section: 

14 (1) ADMINISTRATOR.—The term ‘‘Adminis15 trator’’ means the Administrator of the Agency for 

16 International Development. 

17 (2) APPROPRIATE COMMITTEES OF CON18 GRESS.—The term ‘‘appropriate committees of Con19 gress’’ means— 

20 (A) the Committee on Agriculture, Nutri21 tion, and Forestry of the Senate; 

22 (B) the Committee on Agriculture of the 

23 House of Representatives; 

24 (C) the Committee on Foreign Relations of 

25 the Senate; and 
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1 (D) the Committee on Foreign Affairs of 

2 the House of Representatives. 

3 (3) ELIGIBLE ORGANIZATION.—The term ‘‘eligi4 ble organization’’ means an organization that is— 

5 (A) a private voluntary organization or co6 operative that is, to the extent practicable, reg7 istered with the Administrator; or 

8 (B) an intergovernmental organization, 

9 such as the World Food Program. 

10 (4) HORN OF AFRICA.—The term ‘‘Horn of Af11 rica’’ means the countries of— 

12 (A) Ethiopia; 

13 (B) Somalia; 

14 (C) Kenya; 

15 (D) Djibouti; 

16 (E) Eritrea; 

17 (F) South Sudan; 

18 (G) Uganda; and 

19 (H) such other countries as the Adminis20 trator determines to be appropriate after pro21 viding notification to the appropriate commit22 tees of Congress. 

23 (5) RESILIENCE.—The term ‘‘resilience’’ 

24 means— 
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1 (A) the capacity to mitigate the negative 

2 impacts of crises (including natural disasters, 

3 conflicts, and economic shocks) in order to re4 duce loss of life and depletion of productive as5 sets; 

6 (B) the capacity to respond effectively to 

7 crises, ensuring basic needs are met in a way 

8 that is integrated with long-term development 

9 efforts; and 

10 (C) the capacity to recover and rebuild 

11 after crises so that future shocks can be ab12 sorbed with less need for ongoing external as13 sistance. 

14 (b) PURPOSE.—The purpose of this section is to es15 tablish a pilot program to effectively integrate all United 

16 States-funded emergency and long-term development ac17 tivities that aim to improve food security in the Horn of 

18 Africa, building resilience so as— 

19 (1) to reduce the impacts of future crises; 

20 (2) to enhance local capacity for emergency re21 sponse; 

22 (3) to enhance sustainability of long-term devel23 opment programs targeting poor and vulnerable 

24 households; and 
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1 (4) to reduce the need for repeated costly emer2 gency operations. 

3 (c) STUDY.— 

4 (1) IN GENERAL.—Not later than 30 days after 

5 the date of enactment of this Act, the Administrator 

6 shall initiate a study of prior programs to support 

7 resilience in the Horn of Africa conducted by— 

8 (A) other donor countries; 

9 (B) private voluntary organizations; 

10 (C) the World Food Program of the 

11 United Nations; and 

12 (D) multilateral institutions, including the 

13 World Bank. 

14 (2) REQUIREMENTS.—The study shall— 

15 (A) include all programs implemented 

16 through the Agency for International Develop17 ment, the Department of Agriculture, the De18 partment of Treasury, the Millennium Chal19 lenge Corporation, the Peace Corps, and other 

20 relevant Federal agencies; 

21 (B) evaluate how well the programs de22 scribed in subparagraph (A) work together to 

23 complement each other and leverage impacts 

24 across programs; 
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1 (C) include recommendations for how full 

2 integration of efforts can be achieved; and 

3 (D) evaluate the degree to which country4 led development plans support programs that 

5 increase resilience, including review of the in6 vestments by each country in nutrition and 

7 safety nets. 

8 (3) REPORT.—Not later than 180 days after 

9 the date of enactment of this Act, the Administrator 

10 shall submit to the appropriate committees of Con11 gress a report containing the results of the study. 

12 (d) FIELD-BASED PROJECT GRANTS OR COOPERA13 TIVE AGREEMENTS.— 

14 (1) IN GENERAL.—The Administrator shall— 

15 (A) provide grants to, or enter into cooper16 ative agreements with, eligible organizations to 

17 carry out field-based projects that build resil18 ience in the Horn of Africa in accordance with 

19 this section; and 

20 (B) develop a project approval process to 

21 ensure full integration of efforts. 

22 (2) REQUIREMENTS OF ELIGIBLE ORGANIZA23 TIONS.— 

24 (A) APPLICATION.—To be eligible to re25 ceive a grant from, or enter into a cooperative 
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1 agreement with, the Administrator under this 

2 subsection, an eligible organization shall submit 

3 to the Administrator an application by such 

4 date, in such manner, and containing such in5 formation as the Administrator may require. 

6 (B) COMPLETION REQUIREMENT.—To be 

7 eligible to receive a grant from, or enter into a 

8 cooperative agreement with, the Administrator 

9 under this subsection, an eligible organization 

10 shall agree— 

11 (i) to collect, not later than September 

12 30, 2016, data containing the information 

13 required under subsection (f)(2) relating to 

14 the field-based project funded through the 

15 grant or cooperative agreement; and 

16 (ii) to provide to the Administrator 

17 the data collected under clause (i). 

18 (3) REQUIREMENTS OF ADMINISTRATOR.— 

19 (A) PROJECT DIVERSITY.— 

20 (i) IN GENERAL.—Subject to clause 

21 (ii) and subparagraph (B), in selecting 

22 proposals for field-based projects to fund 

23 under this section, the Administrator shall 

24 select a diversity of projects, including 

25 projects located in— 
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1 (I) areas most prone to repeated 

2 crises; 

3 (II) areas with effective existing 

4 resilience programs that can be 

5 scaled; and 

6 (III) areas in all countries of the 

7 Horn of Africa. 

8 (ii) PRIORITY.—In selecting proposals 

9 for field-based projects under clause (i), 

10 the Administrator shall ensure that the se11 lected proposals are for field-based projects 

12 that— 

13 (I) effectively integrate emer14 gency and long-term development pro15 grams to improve sustainability; 

16 (II) demonstrate the potential to 

17 reduce the need for future emergency 

18 assistance; and 

19 (III) build targeted productive 

20 safety nets, in coordination with host 

21 country governments, through food 

22 for work, cash for work, and other 

23 proven program methodologies. 

24 (B) AVAILABILITY.—The Administrator 

25 shall not award a grant or cooperative agree-
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1 ment or approve a field-based project under this 

2 subsection until the date on which the Adminis3 trator promulgates regulations or issues guide4 lines under subsection (e). 

5 (e) REGULATIONS; GUIDELINES.— 

6 (1) IN GENERAL.—Not later than 180 days 

7 after the date of completion of the study under sub8 section (c), the Administrator shall promulgate regu9 lations or issue guidelines to carry out field-based 

10 projects under this section. 

11 (2) REQUIREMENTS.—In promulgating regula12 tions or issuing guidelines under paragraph (1), the 

13 Administrator shall— 

14 (A) take into consideration the results of 

15 the study described in subsection (c); and 

16 (B) provide an opportunity for public re17 view and comment. 

18 (f) REPORT.— 

19 (1) IN GENERAL.—Not later than November 1, 

20 2016, the Administrator shall submit to the appro21 priate committees of Congress a report that— 

22 (A) addresses each factor described in 

23 paragraph (2); and 

24 (B) is conducted in accordance with this 

25 section. 
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1 (2) REQUIRED FACTORS.—The report shall in2 clude baseline and end-of-project data that meas3 ures— 

4 (A) the prevalence of moderate and severe 

5 hunger so as to provide an accurate accounting 

6 of project impact on household access to and 

7 consumption of food during every month of the 

8 year prior to data collection; 

9 (B) household ownership of and access to 

10 productive assets, including at a minimum land, 

11 livestock, homes, equipment, and other mate12 rials assets needed for income generation; 

13 (C) household incomes, including informal 

14 sources of employment; and 

15 (D) the productive assets of women using 

16 the Women’s Empowerment in Agriculture 

17 Index. 

18 (3) PUBLIC ACCESS TO RECORDS AND RE19 PORTS.—Not later than 90 days after the date on 

20 which the report is submitted under paragraph (1), 

21 the Administrator shall provide public access to the 

22 report. 

23 (g) AUTHORIZATION OF APPROPRIATIONS.—There is 

24 authorized to be appropriated to carry out this section 

25 $10,000,000 for each of fiscal years 2013 through 2017. 
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1 SEC. 3209. AGRICULTURAL TRADE ENHANCEMENT STUDY. 

2 (a) DEFINITION OF AGRICULTURE COMMITTEES AND

3 SUBCOMMITTEES.—In this section, the term ‘‘agriculture 

4 committees and subcommittees’’ means— 

5 (1) the Committee on Agriculture of the House 

6 of Representatives; 

7 (2) the Committee on Agriculture, Nutrition, 

8 and Forestry of the Senate; and 

9 (3) the subcommittees on agriculture, rural de10 velopment, food and drug administration, and re11 lated agencies of the Committees on Appropriations 

12 of the House of Representatives and the Senate. 

13 (b) DEVELOPMENT.—The Secretary, in consultation 

14 with the agriculture committees and subcommittees, shall 

15 develop a study that takes into consideration a reorganiza16 tion of international trade functions for imports and ex17 ports at the Department of Agriculture. 

18 (c) IMPLEMENTATION.—In implementing the study 

19 under this section, the Secretary— 

20 (1) in recognition of the importance of agricul21 tural exports to the farm economy and the economy 

22 as a whole, may include a recommendation for the 

23 establishment of an Under Secretary for Trade and 

24 Foreign Agricultural Affairs; 

25 (2) may take into consideration how the Under 

26 Secretary described in paragraph (1) would serve as 
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1 a multiagency coordinator of sanitary and 

2 phytosanitary issues and nontariff trade barriers in 

3 agriculture with respect to imports and exports of 

4 agricultural products; and 

5 (3) shall take into consideration all implications 

6 of a reorganization described in subsection (b) on 

7 domestic programs and operations of the Depart8 ment of Agriculture. 

9 (d) REPORT.—Not later than 180 days after the date 

10 of enactment of this Act, the Secretary shall submit to 

11 the agriculture committees and subcommittees a report 

12 describing the results of the study under this section. 

13 TITLE IV—NUTRITION 

14 Subtitle A—Supplemental 

15 Nutrition Assistance Program 

16 SEC. 4001. FOOD DISTRIBUTION PROGRAM ON INDIAN RES17 ERVATIONS. 

18 Section 4(b)(6)(F) of the Food and Nutrition Act of 

19 2008 (7 U.S.C. 2013(b)(6)(F)) is amended by striking 

20 ‘‘2012’’ and inserting ‘‘2017’’. 

21 SEC. 4002. STANDARD UTILITY ALLOWANCES BASED ON 

22 THE RECEIPT OF ENERGY ASSISTANCE PAY23 MENTS. 

24 (a) STANDARD UTILITY ALLOWANCES IN THE SUP25 PLEMENTAL NUTRITION ASSISTANCE PROGRAM.—Section 
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1 5(e)(6)(C) of the Food and Nutrition Act of 2008 (7 

2 U.S.C. 2014(e)(6)(C)) is amended— 

3 (1) in clause (i), by inserting ‘‘, subject to 

4 clause (iv)’’ after ‘‘Secretary’’; and 

5 (2) in clause (iv)(I), by striking ‘‘the household 

6 still incurs’’ and all that follows through the end of 

7 the subclause and inserting ‘‘the payment received 

8 by, or made on behalf of, the household exceeds $10 

9 or a higher amount annually, as determined by the 

10 Secretary.’’. 

11 (b) CONFORMING AMENDMENT.—Section 

12 2605(f)(2)(A) of the Low-Income Home Energy Assist13 ance Act of 1981 (42 U.S.C. 8624(f)(2)(A)) is amended 

14 by inserting before the semicolon at the end ‘‘, except that, 

15 for purposes of the supplemental nutrition assistance pro16 gram established under the Food and Nutrition Act of 

17 2008 (7 U.S.C. 2011 et seq.), such payments or allow18 ances exceed $10 or a higher amount annually, as deter19 mined by the Secretary of Agriculture in accordance with 

20 section 5(e)(6)(C)(iv)(I) of that Act (7 U.S.C. 

21 2014(e)(6)(C)(iv)(I))’’. 

22 (c) EFFECTIVE AND IMPLEMENTATION DATE.— 

23 (1) IN GENERAL.—Except as provided in para24 graph (2), this section and the amendments made by 

25 this section shall take effect beginning on October 1, 
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1 2013, for all certification periods beginning after 

2 that date. 

3 (2) STATE OPTION TO DELAY IMPLEMENTATION

4 FOR CURRENT RECIPIENTS.—A State may, at the 

5 option of the State, implement a policy that elimi6 nates or minimizes the effect of the amendments 

7 made by this section for households that receive a 

8 standard utility allowance as of the date of enact9 ment of this Act for not more than a 180-day period 

10 beginning on the date on which the amendments 

11 made by this section would otherwise affect the ben12 efits received by a household. 

13 SEC. 4003. ELIGIBILITY DISQUALIFICATIONS. 

14 Section 6(e)(3)(B) of Food and Nutrition Act of 

15 2008 (7 U.S.C. 2015(e)(3)(B)) is amended by striking 

16 ‘‘section’’ and inserting the following: ‘‘section, subject to 

17 the condition that the course or program of study— 

18 ‘‘(i) is part of a program of career 

19 and technical education (as defined in sec20 tion 3 of the Carl D. Perkins Career and 

21 Technical Education Act of 2006 (20 

22 U.S.C. 2302)) that may be completed in 

23 not more than 4 years at an institution of 

24 higher education (as defined in section 102 
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1 of the Higher Education Act of 1965 (20 

2 U.S.C. 1002)); or 

3 ‘‘(ii) is limited to remedial courses, 

4 basic adult education, literacy, or English 

5 as a second language;’’. 

6 SEC. 4004. ENDING SUPPLEMENTAL NUTRITION ASSIST7 ANCE PROGRAM BENEFITS FOR LOTTERY OR 

8 GAMBLING WINNERS. 

9 (a) IN GENERAL.—Section 6 of the Food and Nutri10 tion Act of 2008 (7 U.S.C. 2015) is amended by adding 

11 at the end the following: 

12 ‘‘(r) INELIGIBILITY FOR BENEFITS DUE TO RECEIPT

13 OF SUBSTANTIAL LOTTERY OR GAMBLING WINNINGS.— 

14 ‘‘(1) IN GENERAL.—Any household in which a 

15 member receives substantial lottery or gambling 

16 winnings, as determined by the Secretary, shall lose 

17 eligibility for benefits immediately upon receipt of 

18 the winnings. 

19 ‘‘(2) DURATION OF INELIGIBILITY.—A house20 hold described in paragraph (1) shall remain ineli21 gible for participation until the household meets the 

22 allowable financial resources and income eligibility 

23 requirements under subsections (c), (d), (e), (f), (g), 

24 (i), (k), (l), (m), and (n) of section 5. 
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1 ‘‘(3) AGREEMENTS.—As determined by the Sec2 retary, each State agency, to the maximum extent 

3 practicable, shall establish agreements with entities 

4 responsible for the regulation or sponsorship of gam5 ing in the State to determine whether individuals 

6 participating in the supplemental nutrition assist7 ance program have received substantial lottery or 

8 gambling winnings.’’. 

9 (b) CONFORMING AMENDMENTS.—Section 5(a) of 

10 the Food and Nutrition Act of 2008 (7 U.S.C. 2014(a)) 

11 is amended in the second sentence by striking ‘‘sections 

12 6(b), 6(d)(2), and 6(g)’’ and inserting ‘‘subsections (b), 

13 (d)(2), (g), and (r) of section 6’’. 

14 SEC. 4005. RETAIL FOOD STORES. 

15 (a) DEFINITION OF RETAIL FOOD STORE.—Sub16 section (o)(1)(A) of section 3 of the Food and Nutrition 

17 Act of 2008 (7 U.S.C. 2012) (as redesignated by section 

18 4016(a)(4)) is amended by striking ‘‘at least 2’’ and in19 serting ‘‘at least 3’’. 

20 (b) ALTERNATIVE BENEFIT DELIVERY.—Section 

21 7(f) of the Food and Nutrition Act of 2008 (7 U.S.C. 

22 2016(f)) is amended— 

23 (1) by striking paragraph (2) and inserting the 

24 following: 

25 ‘‘(2) IMPOSITION OF COSTS.— 
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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), the Secretary shall require 

3 participating retail food stores (including res4 taurants participating in a State option res5 taurant program intended to serve the elderly, 

6 disabled, and homeless) to pay 100 percent of 

7 the costs of acquiring, and arrange for the im8 plementation of, electronic benefit transfer 

9 point-of-sale equipment and supplies, including 

10 related services. 

11 ‘‘(B) EXEMPTIONS.—The Secretary may 

12 exempt from subparagraph (A)— 

13 ‘‘(i) farmers’ markets, military com14 missaries, nonprofit food buying coopera15 tives, and establishments, organizations, 

16 programs, or group living arrangements 

17 described in paragraphs (5), (7), and (8) 

18 of section 3(k); and 

19 ‘‘(ii) establishments described in para20 graphs (3), (4), and (9) of section 3(k), 

21 other than restaurants participating in a 

22 State option restaurant program.’’; and 

23 (2) by adding at the end the following: 

24 ‘‘(4) TERMINATION OF MANUAL VOUCHERS.— 
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1 ‘‘(A) IN GENERAL.—Effective beginning on 

2 the date of enactment of this paragraph, except 

3 as provided in subparagraph (B), no State shall 

4 issue manual vouchers to a household that re5 ceives supplemental nutrition assistance under 

6 this Act or allow retail food stores to accept 

7 manual vouchers as payment, unless the Sec8 retary determines that the manual vouchers are 

9 necessary, such as in the event of an electronic 

10 benefit transfer system failure or a disaster sit11 uation. 

12 ‘‘(B) EXEMPTIONS.—The Secretary may 

13 exempt categories of retail food stores or indi14 vidual retail food stores from subparagraph (A) 

15 based on criteria established by the Secretary. 

16 ‘‘(5) UNIQUE IDENTIFICATION NUMBER RE17 QUIRED.—The Secretary shall require all parties 

18 providing electronic benefit transfer services to pro19 vide for and maintain unique terminal identification 

20 number information through the supplemental nutri21 tion assistance program electronic benefit transfer 

22 transaction routing system.’’. 

23 (c) ELECTRONIC BENEFIT TRANSFERS.—Section 

24 7(h)(3)(B) of the Food and Nutrition Act of 2008 (7 

25 U.S.C. 2016(h)(3)(B)) is amended by striking ‘‘is oper-
330 

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1 ational—’’ and all that follows through ‘‘(ii) in the case 

2 of other participating stores,’’ and inserting ‘‘is oper3 ational’’. 

4 (d) APPROVAL OF RETAIL FOOD STORES AND

5 WHOLESALE FOOD CONCERNS.—Section 9 of the Food 

6 and Nutrition Act of 2008 (7 U.S.C. 2018) is amended— 

7 (1) in subsection (a)— 

8 (A) in the second sentence of paragraph 

9 (a)(1), by striking ‘‘; and (C)’’ and inserting ‘‘; 

10 (C) whether the applicant is located in an area 

11 with significantly limited access to food; and 

12 (D)’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(4) RETAIL FOOD STORES WITH SIGNIFICANT

15 SALES OF EXCEPTED ITEMS.— 

16 ‘‘(A) IN GENERAL.—No retail food store 

17 for which at least 45 percent of the total sales 

18 of the retail food store is from the sale of ex19 cepted items described in section 3(k)(1) may 

20 be authorized to accept and redeem benefits un21 less the Secretary determines that the partici22 pation of the retail food store is required for 

23 the effective and efficient operation of the sup24 plemental nutrition assistance program. 
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1 ‘‘(B) APPLICATION.—Subparagraph (A) 

2 shall be effective— 

3 ‘‘(i) in the case of retail food stores 

4 applying to be authorized for the first 

5 time, beginning on the date that is 1 year 

6 after the date of enactment of this para7 graph; and 

8 ‘‘(ii) in the case of retail food stores 

9 participating in the program on the date of 

10 enactment of this paragraph, during peri11 odic reauthorization in accordance with 

12 paragraph (2)(A).’’; and 

13 (3) by adding at the end the following: 

14 ‘‘(g) EBT SERVICE REQUIREMENT.—An approved 

15 retail food store shall provide adequate EBT service as 

16 described in section 7(h)(3)(B).’’. 

17 SEC. 4006. IMPROVING SECURITY OF FOOD ASSISTANCE. 

18 Section 7(h)(8) of the Food and Nutrition Act of 

19 2008 (7 U.S.C. 2016(h)(8)) is amended— 

20 (1) by striking the paragraph heading and in21 serting ‘‘REPLACEMENT OF CARDS.—’’; 

22 (2) by striking ‘‘A State’’ and inserting the fol23 lowing: 

24 ‘‘(A) FEES.—A State’’; and 
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1 (3) by adding after subparagraph (A) (as so 

2 designated by paragraph (2)) the following: 

3 ‘‘(B) PURPOSEFUL LOSS OF CARDS.— 

4 ‘‘(i) IN GENERAL.—Subject to terms 

5 and conditions established by the Secretary 

6 in accordance with clause (ii), if a house7 hold makes excessive requests for replace8 ment of the electronic benefit transfer card 

9 of the household, the Secretary may re10 quire a State agency to decline to issue a 

11 replacement card to the household unless 

12 the household, upon request of the State 

13 agency, provides an explanation for the 

14 loss of the card. 

15 ‘‘(ii) REQUIREMENTS.—The terms 

16 and conditions established by the Secretary 

17 shall provide that— 

18 ‘‘(I) the household be given the 

19 opportunity to provide the requested 

20 explanation and meet the require21 ments under this paragraph promptly; 

22 ‘‘(II) after an excessive number 

23 of lost cards, the head of the house24 hold shall be required to review pro25 gram rights and responsibilities with 
333 

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1 State agency personnel authorized to 

2 make determinations under section 

3 5(a); and 

4 ‘‘(III) any action taken, including 

5 actions required under section 

6 6(b)(2), other than the withholding of 

7 the electronic benefit transfer card 

8 until an explanation described in sub9 clause (I) is provided, shall be con10 sistent with the due process protec11 tions under section 6(b) or 11(e)(10), 

12 as appropriate. 

13 ‘‘(C) PROTECTING VULNERABLE PER14 SONS.—In implementing this paragraph, a 

15 State agency shall act to protect homeless per16 sons, persons with disabilities, victims of 

17 crimes, and other vulnerable persons who lose 

18 electronic benefit transfer cards but are not in19 tentionally committing fraud. 

20 ‘‘(D) EFFECT ON ELIGIBILITY.—While a 

21 State may decline to issue an electronic benefits 

22 transfer card until a household satisfies the re23 quirements under this paragraph, nothing in 

24 this paragraph shall be considered a denial of, 
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1 or limitation on, the eligibility for benefits 

2 under section 5.’’. 

3 SEC. 4007. TECHNOLOGY MODERNIZATION FOR RETAIL 

4 FOOD STORES. 

5 (a) MOBILE TECHNOLOGIES.—Section 7(h) of the 

6 Food and Nutrition Act of 2008 (7 U.S.C. 2016(h)) (as 

7 amended by section 4016(e)) is amended by adding at the 

8 end the following: 

9 ‘‘(14) MOBILE TECHNOLOGIES.— 

10 ‘‘(A) IN GENERAL.—Subject to subpara11 graph (B), the Secretary shall approve retail 

12 food stores to redeem benefits through elec13 tronic means other than wired point of sale de14 vices for electronic benefit transfer transactions, 

15 if the retail food stores— 

16 ‘‘(i) establish recipient protections re17 garding privacy, ease of use, access, and 

18 support similar to the protections provided 

19 for transactions made in retail food stores; 

20 ‘‘(ii) bear the costs of obtaining, in21 stalling, and maintaining mobile tech22 nologies, including mechanisms needed to 

23 process EBT cards and transaction fees; 

24 ‘‘(iii) demonstrate the foods purchased 

25 with benefits issued under this section 
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1 through mobile technologies are purchased 

2 at a price not higher than the price of the 

3 same food purchased by other methods 

4 used by the retail food store, as determined 

5 by the Secretary; 

6 ‘‘(iv) provide adequate documentation 

7 for each authorized transaction, as deter8 mined by the Secretary; and 

9 ‘‘(v) meet other criteria as established 

10 by the Secretary. 

11 ‘‘(B) DEMONSTRATION PROJECT ON AC12 CEPTANCE OF BENEFITS OF MOBILE TRANS13 ACTIONS.— 

14 ‘‘(i) IN GENERAL.—Before authorizing 

15 implementation of subparagraph (A) in all 

16 States, the Secretary shall pilot the use of 

17 mobile technologies determined by the Sec18 retary to be appropriate to test the feasi19 bility and implications for program integ20 rity, by allowing retail food stores to accept 

21 benefits from recipients of supplemental 

22 nutrition assistance through mobile trans23 actions. 

24 ‘‘(ii) DEMONSTRATION PROJECTS.— 

25 To be eligible to participate in a dem-
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1 onstration project under clause (i), a retail 

2 food store shall submit to the Secretary for 

3 approval a plan that includes— 

4 ‘‘(I) a description of the tech5 nology; 

6 ‘‘(II) the manner by which the 

7 retail food store will provide proof of 

8 the transaction to households; 

9 ‘‘(III) the provision of data to 

10 the Secretary, consistent with require11 ments established by the Secretary, in 

12 a manner that allows the Secretary to 

13 evaluate the impact of the demonstra14 tion on participant access, ease of use, 

15 and program integrity; and 

16 ‘‘(IV) such other criteria as the 

17 Secretary may require. 

18 ‘‘(iii) DATE OF COMPLETION.—The 

19 demonstration projects under this subpara20 graph shall be completed and final reports 

21 submitted to the Secretary by not later 

22 than July 1, 2015. 

23 ‘‘(C) REPORT TO CONGRESS.—The Sec24 retary shall— 
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1 ‘‘(i) by not later than January 1, 

2 2016, authorize implementation of sub3 paragraph (A) in all States, unless the 

4 Secretary makes a finding, based on the 

5 data provided under subparagraph (B), 

6 that implementation in all States is not in 

7 the best interest of the supplemental nutri8 tion assistance program; and 

9 ‘‘(ii) if the determination made in 

10 clause (i) is not to implement subpara11 graph (A) in all States, submit a report to 

12 the Committee on Agriculture of the House 

13 of Representatives and the Committee on 

14 Agriculture, Nutrition, and Forestry of the 

15 Senate that includes the basis of the find16 ing.’’. 

17 (b) ACCEPTANCE OF BENEFITS THROUGH ON-LINE

18 TRANSACTIONS.— 

19 (1) IN GENERAL.—Section 7 of the Food and 

20 Nutrition Act of 2008 (7 U.S.C. 2016) is amended 

21 by adding at the end the following: 

22 ‘‘(k) OPTION TO ACCEPT PROGRAM BENEFITS

23 THROUGH ON-LINE TRANSACTIONS.— 

24 ‘‘(1) IN GENERAL.—Subject to paragraph (4), 

25 the Secretary shall approve retail food stores to ac-
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1 cept benefits from recipients of supplemental nutri2 tion assistance through on-line transactions. 

3 ‘‘(2) REQUIREMENTS TO ACCEPT BENEFITS.—A 

4 retail food store seeking to accept benefits from re5 cipients of supplemental nutrition assistance through 

6 on-line transactions shall— 

7 ‘‘(A) establish recipient protections regard8 ing privacy, ease of use, access, and support 

9 similar to the protections provided for trans10 actions made in retail food stores; 

11 ‘‘(B) ensure benefits are not used to pay 

12 delivery, ordering, convenience, or other fees or 

13 charges; 

14 ‘‘(C) clearly notify participating households 

15 at the time a food order is placed— 

16 ‘‘(i) of any delivery, ordering, conven17 ience, or other fee or charge associated 

18 with the food purchase; and 

19 ‘‘(ii) that any such fee cannot be paid 

20 with benefits provided under this Act; 

21 ‘‘(D) ensure the security of on-line trans22 actions by using the most effective technology 

23 available that the Secretary considers appro24 priate and cost-effective and that is comparable 
339 

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1 to the security of transactions at retail food 

2 stores; and 

3 ‘‘(E) meet other criteria as established by 

4 the Secretary. 

5 ‘‘(3) STATE AGENCY ACTION.—Each State 

6 agency shall ensure that recipients of supplemental 

7 nutrition assistance can use benefits on-line as de8 scribed in this subsection as appropriate. 

9 ‘‘(4) DEMONSTRATION PROJECT ON ACCEPT10 ANCE OF BENEFITS THROUGH ON-LINE TRANS11 ACTIONS.— 

12 ‘‘(A) IN GENERAL.—Before the Secretary 

13 authorizes implementation of paragraph (1) in 

14 all States, the Secretary shall carry out a num15 ber of demonstration projects as determined by 

16 the Secretary to test the feasibility of allowing 

17 retail food stores to accept benefits through on18 line transactions. 

19 ‘‘(B) DEMONSTRATION PROJECTS.—To be 

20 eligible to participate in a demonstration project 

21 under subparagraph (A), a retail food store 

22 shall submit to the Secretary for approval a 

23 plan that includes— 
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1 ‘‘(i) a method of ensuring that bene2 fits may be used to purchase only eligible 

3 items under this Act; 

4 ‘‘(ii) a description of the method of 

5 educating participant households about the 

6 availability and operation of on-line pur7 chasing; 

8 ‘‘(iii) adequate testing of the on-line 

9 purchasing option prior to implementation; 

10 ‘‘(iv) the provision of data as re11 quested by the Secretary for purposes of 

12 analyzing the impact of the project on par13 ticipant access, ease of use, and program 

14 integrity; 

15 ‘‘(v) reports on progress, challenges, 

16 and results, as determined by the Sec17 retary; and 

18 ‘‘(vi) such other criteria, including se19 curity criteria, as established by the Sec20 retary. 

21 ‘‘(C) DATE OF COMPLETION.—The dem22 onstration projects under this paragraph shall 

23 be completed and final reports submitted to the 

24 Secretary by not later than July 1, 2015. 
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1 ‘‘(5) REPORT TO CONGRESS.—The Secretary 

2 shall— 

3 ‘‘(A) by not later than January 1, 2016, 

4 authorize implementation of paragraph (1) in 

5 all States, unless the Secretary makes a find6 ing, based on the data provided under para7 graph (4), that implementation in all States is 

8 not in the best interest of the supplemental nu9 trition assistance program; and 

10 ‘‘(B) if the determination made in sub11 paragraph (A) is not to implement in all States, 

12 submit a report to the Committee on Agri13 culture of the House of Representatives and the 

14 Committee on Agriculture, Nutrition, and For15 estry of the Senate that includes the basis of 

16 the finding.’’. 

17 (2) CONFORMING AMENDMENTS.— 

18 (A) Section 7(b) of the Food and Nutrition 

19 Act of 2008 (7 U.S.C. 2016(b)) is amended by 

20 striking ‘‘purchase food in retail food stores’’ 

21 and inserting ‘‘purchase food from retail food 

22 stores’’. 

23 (B) Section 10 of the Food and Nutrition 

24 Act of 2008 (7 U.S.C. 2019) is amended in the 

25 first sentence by inserting ‘‘retail food stores 
342 

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1 authorized to accept and redeem benefits 

2 through on-line transactions shall be authorized 

3 to accept benefits prior to the delivery of food 

4 if the delivery occurs within a reasonable time 

5 of the purchase, as determined by the Sec6 retary,’’ after ‘‘food so purchased,’’. 

7 (c) SAVINGS CLAUSE.—Nothing in this section or an 

8 amendment made by this section alter any requirements 

9 of the Food and Nutrition Act of 2008 (7 U.S.C. 2011 

10 et seq.) unless specifically authorized in this section or an 

11 amendment made by this section. 

12 SEC. 4008. USE OF BENEFITS FOR PURCHASE OF COMMU13 NITY-SUPPORTED AGRICULTURE SHARE. 

14 Section 10 of the Food and Nutrition Act of 2008 

15 (7 U.S.C. 2019) (as amended by section 4007(b)(2)(B)) 

16 is amended in the first sentence by inserting ‘‘agricultural 

17 producers who market agricultural products directly to 

18 consumers shall be authorized to redeem benefits for the 

19 initial cost of the purchase of a community-supported agri20 culture share for an appropriate time in advance of food 

21 delivery as determined by the Secretary,’’ after ‘‘as deter22 mined by the Secretary,’’. 

23 SEC. 4009. RESTAURANT MEALS PROGRAM. 

24 (a) IN GENERAL.—Section 11(e) of the Food and 

25 Nutrition Act of 2008 (7 U.S.C. 2020(e)) is amended— 
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1 (1) in paragraph (22), by striking ‘‘and’’ at the 

2 end; 

3 (2) in paragraph (23), by striking the period at 

4 the end of subparagraph (C) and inserting ‘‘; and’’; 

5 and 

6 (3) by adding at the end the following: 

7 ‘‘(24) if the State elects to carry out a program 

8 to contract with private establishments to offer 

9 meals at concessional prices, as described in para10 graphs 3, 4, and 9 of section 3(k)— 

11 ‘‘(A) the plans of the State agency for op12 erating the program, including— 

13 ‘‘(i) documentation of a need that eli14 gible homeless, elderly, and disabled clients 

15 are underserved in a particular geographic 

16 area; 

17 ‘‘(ii) the manner by which the State 

18 agency will limit participation to only those 

19 private establishments that the State de20 termines necessary to meet the need identi21 fied in clause (i); and 

22 ‘‘(iii) any other conditions the Sec23 retary may prescribe, such as the level of 

24 security necessary to ensure that only eligi-
344 

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1 ble recipients participate in the program; 

2 and 

3 ‘‘(B) a report by the State agency to the 

4 Secretary annually, the schedule of which shall 

5 be established by the Secretary, that includes— 

6 ‘‘(i) the number of households and in7 dividual recipients authorized to partici8 pate in the program, including any infor9 mation on whether the individual recipient 

10 is elderly, disabled, or homeless; and 

11 ‘‘(ii) an assessment of whether the 

12 program is meeting an established need, as 

13 documented under subparagraph (A)(i).’’. 

14 (b) APPROVAL OF RETAIL FOOD STORES AND

15 WHOLESALE FOOD CONCERNS.—Section 9 of the Food 

16 and Nutrition Act of 2008 (7 U.S.C. 2018) (as amended 

17 by section 4005(d)(3)) is amended by adding at the end 

18 the following: 

19 ‘‘(h) PRIVATE ESTABLISHMENTS.— 

20 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

21 no private establishment that contracts with a State 

22 agency to offer meals at concessional prices as de23 scribed in paragraphs 3, 4, and 9 of section 3(k) 

24 may be authorized to accept and redeem benefits un25 less the Secretary determines that the participation 
345 

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1 of the private establishment is required to meet a 

2 documented need in accordance with section 

3 11(e)(24). 

4 ‘‘(2) EXISTING CONTRACTS.— 

5 ‘‘(A) IN GENERAL.—If, on the day before 

6 the date of enactment of this subsection, a 

7 State has entered into a contract with a private 

8 establishment described in paragraph (1) and 

9 the Secretary has not determined that the par10 ticipation of the private establishment is nec11 essary to meet a documented need in accord12 ance with section 11(e)(24), the Secretary shall 

13 allow the operation of the private establishment 

14 to continue without that determination of need 

15 for a period not to exceed 180 days from the 

16 date on which the Secretary establishes deter17 mination criteria, by regulation, under section 

18 11(e)(24). 

19 ‘‘(B) JUSTIFICATION.—If the Secretary 

20 makes a determination to terminate a contract 

21 with a private establishment that is in effect on 

22 the date of enactment of this subsection, the 

23 Secretary shall provide justification to the State 

24 in which the private establishment is located for 

25 that termination. 
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1 ‘‘(3) REPORT TO CONGRESS.—Not later than 

2 90 days after September 30, 2013, and 90 days 

3 after the last day of each fiscal year thereafter, the 

4 Secretary shall report to the Committee on Agri5 culture of the House of Representatives and the 

6 Committee on Agriculture, Nutrition, and Forestry 

7 of the Senate on the effectiveness of a program 

8 under this subsection using any information received 

9 from States under section 11(e)(24) as well as any 

10 other information the Secretary may have relating to 

11 the manner in which benefits are used.’’. 

12 (c) CONFORMING AMENDMENTS.—Section 3(k) of 

13 the Food and Nutrition Act of 2008 (7 U.S.C. 2012(k)) 

14 is amended by inserting ‘‘subject to section 9(h)’’ after 

15 ‘‘concessional prices’’ each place it appears. 

16 SEC. 4010. QUALITY CONTROL ERROR RATE DETERMINA17 TION. 

18 Section 16(c) of the Food and Nutrition Act of 2008 

19 (7 U.S.C. 2025(c)) is amended by adding at the end the 

20 following: 

21 ‘‘(10) TOLERANCE LEVEL.—For the purposes 

22 of this subsection, the Secretary shall set the toler23 ance level for excluding small errors at $25.’’. 
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1 SEC. 4011. PERFORMANCE BONUS PAYMENTS. 

2 Section 16(d) of the Food and Nutrition Act of 2008 

3 (7 U.S.C. 2025(d)) is amended by adding at the end the 

4 following: 

5 ‘‘(5) USE OF PERFORMANCE BONUS PAY6 MENTS.—A State agency may use a performance 

7 bonus payment received under this subsection only 

8 to carry out the program established under this Act, 

9 including investments in— 

10 ‘‘(A) technology; 

11 ‘‘(B) improvements in administration and 

12 distribution; and 

13 ‘‘(C) actions to prevent fraud, waste, and 

14 abuse.’’. 

15 SEC. 4012. AUTHORIZATION OF APPROPRIATIONS. 

16 Section 18(a)(1) of the Food and Nutrition Act of 

17 2008 (7 U.S.C. 2027(a)(1)) is amended in the first sen18 tence by striking ‘‘2012’’ and inserting ‘‘2017’’. 

19 SEC. 4013. ASSISTANCE FOR COMMUNITY FOOD PROJECTS. 

20 Section 25 of the Food and Nutrition Act of 2008 

21 (7 U.S.C. 2034) is amended— 

22 (1) in subsection (a)(1)(B)(ii)— 

23 (A) by striking subclause (I); and 

24 (B) by redesignating subclauses (II) and 

25 (III) as subclauses (I) and (II), respectively; 

26 and 
348 

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1 (2) in subsection (b), by adding at the end the 

2 following: 

3 ‘‘(3) FUNDING.— 

4 ‘‘(A) IN GENERAL.—Out of any funds in 

5 the Treasury not otherwise appropriated, the 

6 Secretary of the Treasury shall transfer to the 

7 Secretary to carry out this section not less than 

8 $5,000,000 for fiscal year 2013 and each fiscal 

9 year thereafter. 

10 ‘‘(B) RECEIPT AND ACCEPTANCE.—The 

11 Secretary shall be entitled to receive, shall ac12 cept, and shall use to carry out this section the 

13 funds transferred under subparagraph (A), 

14 without further appropriation. 

15 ‘‘(C) MAINTENANCE OF FUNDING.—The 

16 funding provided under subparagraph (A) shall 

17 supplement (and not supplant) other Federal 

18 funding made available to the Secretary to 

19 carry out this section.’’. 

20 SEC. 4014. EMERGENCY FOOD ASSISTANCE. 

21 (a) PURCHASE OF COMMODITIES.—Section 27(a) of 

22 the Food and Nutrition Act of 2008 (7 U.S.C. 2036(a)) 

23 is amended— 

24 (1) in paragraph (1), by striking ‘‘2008 

25 through 2012’’ and inserting ‘‘2012 through 2017’’; 
349 

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1 (2) by striking paragraph (2) and inserting the 

2 following: 

3 ‘‘(2) AMOUNTS.—The Secretary shall use to 

4 carry out paragraph (1)— 

5 ‘‘(A) for fiscal year 2012, $260,250,000; 

6 and 

7 ‘‘(B) for each subsequent fiscal year, the 

8 dollar amount of commodities specified in sub9 paragraph (A) adjusted by the percentage by 

10 which the thrifty food plan has been adjusted 

11 under section 3(u)(4) between June 30, 2012, 

12 and June 30 of the immediately preceding fiscal 

13 year, and subsequently increased by— 

14 ‘‘(i) for fiscal year 2013, $28,000,000; 

15 ‘‘(ii) for fiscal year 2014, 

16 $44,000,000; 

17 ‘‘(iii) for fiscal year 2015, 

18 $24,000,000; 

19 ‘‘(iv) for fiscal year 2016, 

20 $18,000,000; and 

21 ‘‘(v) for fiscal year 2017 and each fis22 cal year thereafter, $10,000,000.’’; and 

23 (3) by adding at the end the following: 
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1 ‘‘(3) FUNDS AVAILABILITY.—For purposes of 

2 the funds described in this subsection, the Secretary 

3 shall— 

4 ‘‘(A) make the funds available for 2 fiscal 

5 years; and 

6 ‘‘(B) allow States to carry over unex7 pended balances to the next fiscal year pursu8 ant to such terms and conditions as are deter9 mined by the Secretary.’’. 

10 (b) EMERGENCY FOOD PROGRAM INFRASTRUCTURE

11 GRANTS.—Section 209(d) of the Emergency Food Assist12 ance Act of 1983 (7 U.S.C. 7511a(d)) is amended by 

13 striking ‘‘2012’’ and inserting ‘‘2017’’. 

14 SEC. 4015. NUTRITION EDUCATION. 

15 Section 28(b) of the Food and Nutrition Act of 2008 

16 (7 U.S.C. 2036a(b)) is amended by inserting ‘‘and phys17 ical activity’’ after ‘‘healthy food choices’’. 

18 SEC. 4016. RETAIL FOOD STORE AND RECIPIENT TRAF19 FICKING. 

20 The Food and Nutrition Act of 2008 (7 U.S.C. 2011 

21 et seq.) is amended by adding at the end the following: 

22 ‘‘SEC. 29. RETAIL FOOD STORE AND RECIPIENT TRAF23 FICKING. 

24 ‘‘(a) PURPOSE.—The purpose of this section is to 

25 provide the Department of Agriculture with additional re-
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1 sources to prevent trafficking in violation of this Act by 

2 strengthening recipient and retail food store program in3 tegrity. 

4 ‘‘(b) USE OF FUNDS.—Additional funds are provided 

5 under this section to supplement the retail food store and 

6 recipient integrity activities of the Department. 

7 ‘‘(c) FUNDING.— 

8 ‘‘(1) IN GENERAL.—Out of any funds in the 

9 Treasury not otherwise appropriated, the Secretary 

10 of the Treasury shall transfer to the Secretary to 

11 carry out this section not less than $18,500,000 for 

12 fiscal year 2013 and each fiscal year thereafter. 

13 ‘‘(2) RECEIPT AND ACCEPTANCE.—The Sec14 retary shall be entitled to receive, shall accept, and 

15 shall use to carry out this section the funds trans16 ferred under paragraph (1), without further appro17 priation. 

18 ‘‘(3) MAINTENANCE OF FUNDING.—The fund19 ing provided under paragraph (1) shall supplement 

20 (and not supplant) other Federal funding for pro21 grams carried out under this Act.’’. 

22 SEC. 4017. TECHNICAL AND CONFORMING AMENDMENTS. 

23 (a) Section 3 of the Food and Nutrition Act of 2008 

24 (7 U.S.C. 2012) is amended— 
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1 (1) in subsection (g), by striking ‘‘coupon,’’ and 

2 inserting ‘‘coupon’’; 

3 (2) in subsection (k)(7), by striking ‘‘or are’’ 

4 and inserting ‘‘and’’; 

5 (3) by striking subsection (l); 

6 (4) by redesignating subsections (m) through 

7 (t) as subsections (l) through (s), respectively; and 

8 (5) by inserting after subsection (s) (as so re9 designated) the following: 

10 ‘‘(t) ‘Supplemental nutrition assistance program’ 

11 means the program operated pursuant to this Act.’’. 

12 (b) Section 4(a) of the Food and Nutrition Act of 

13 2008 (7 U.S.C. 2013(a)) is amended in the last sentence 

14 by striking ‘‘benefits’’ and inserting ‘‘Benefits’’. 

15 (c) Section 5 of the Food and Nutrition Act of 2008 

16 (7 U.S.C. 2014) is amended— 

17 (1) in the last sentence of subsection (i)(2)(D), 

18 by striking ‘‘section 13(b)(2)’’ and inserting ‘‘section 

19 13(b)’’; and 

20 (2) in subsection (k)(4)(A), by striking ‘‘para21 graph (2)(H)’’ and inserting ‘‘paragraph (2)(G)’’. 

22 (d) Section 6(d)(4) of the Food and Nutrition Act 

23 of 2008 (7 U.S.C. 2015(d)(4)) is amended in subpara24 graphs (B)(vii) and (F)(iii) by indenting both clauses ap25 propriately. 
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1 (e) Section 7(h) of the Food and Nutrition Act of 

2 2008 (7 U.S.C. 2016(h)) is amended by redesignating the 

3 second paragraph (12) (relating to interchange fees) as 

4 paragraph (13). 

5 (f) Section 9(a) of the Food and Nutrition Act of 

6 2008 (7 U.S.C. 2018(a)) is amended by indenting para7 graph (3) appropriately. 

8 (g) Section 12 of the Food and Nutrition Act of 2008 

9 (7 U.S.C. 2021) is amended— 

10 (1) in subsection (b)(3)(C), by striking ‘‘civil 

11 money penalties’’ and inserting ‘‘civil penalties’’; and 

12 (2) in subsection (g)(1), by striking ‘‘(7 U.S.C. 

13 1786)’’ and inserting ‘‘(42 U.S.C. 1786)’’. 

14 (h) Section 15(b)(1) of the Food and Nutrition Act 

15 of 2008 (7 U.S.C. 2024(b)(1)) is amended in the first sen16 tence by striking ‘‘an benefit’’ and inserting ‘‘a benefit’’. 

17 (i) Section 16(a) of the Food and Nutrition Act of 

18 2008 (7 U.S.C. 2025(a)) is amended in the proviso fol19 lowing paragraph (8) by striking ‘‘as amended.’’. 

20 (j) Section 18(e) of the Food and Nutrition Act of 

21 2008 (7 U.S.C. 2027(e)) is amended in the first sentence 

22 by striking ‘‘sections 7(f)’’ and inserting ‘‘section 7(f)’’. 

23 (k) Section 22(b)(10)(B)(i) of the Food and Nutri24 tion Act of 2008 (7 U.S.C. 2031(b)(10)(B)(i)) is amended 
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1 in the last sentence by striking ‘‘Food benefits’’ and in2 serting ‘‘Benefits’’. 

3 (l) Section 26(f)(3)(C) of the Food and Nutrition Act 

4 of 2008 (7 U.S.C. 2035(f)(3)(C)) is amended by striking 

5 ‘‘subsection’’ and inserting ‘‘subsections’’. 

6 (m) Section 27(a)(1) of the Food and Nutrition Act 

7 of 2008 (7 U.S.C. 2036(a)(1)) is amended by striking 

8 ‘‘(Public Law 98–8; 7 U.S.C. 612c note)’’ and inserting 

9 ‘‘(7 U.S.C. 7515)’’. 

10 (n) Section 509 of the Older Americans Act of 1965 

11 (42 U.S.C. 3056g) is amended in the section heading by 

12 striking ‘‘FOOD STAMP PROGRAMS’’ and inserting 

13 ‘‘SUPPLEMENTAL NUTRITION ASSISTANCE PRO14 GRAMS’’. 

15 (o) Section 4115(c)(2)(H) of the Food, Conservation, 

16 and Energy Act of 2008 (Public Law 110–246; 122 Stat. 

17 1871) is amended by striking ‘‘531’’ and inserting ‘‘454’’. 

18 Subtitle B—Commodity 

19 Distribution Programs 

20 SEC. 4101. COMMODITY DISTRIBUTION PROGRAM. 

21 Section 4(a) of the Agriculture and Consumer Protec22 tion Act of 1973 (7 U.S.C. 612c note; Public Law 93– 

23 86) is amended in the first sentence by striking ‘‘2012’’ 

24 and inserting ‘‘2017’’. 
355 

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1 SEC. 4102. COMMODITY SUPPLEMENTAL FOOD PROGRAM. 

2 Section 5 of the Agriculture and Consumer Protec3 tion Act of 1973 (7 U.S.C. 612c note; Public Law 93– 

4 86) is amended— 

5 (1) in paragraphs (1) and (2)(B) of subsection 

6 (a), by striking ‘‘2012’’ each place it appears and in7 serting ‘‘2017’’; 

8 (2) in the first sentence of subsection (d)(2), by 

9 striking ‘‘2012’’ and inserting ‘‘2017’’; 

10 (3) by striking subsection (g) and inserting the 

11 following: 

12 ‘‘(g) ELIGIBILITY.—Except as provided in subsection 

13 (m), the States shall only provide assistance under the 

14 commodity supplemental food program to low-income per15 sons aged 60 and older.’’; and 

16 (4) by adding at the end the following: 

17 ‘‘(m) PHASE-OUT.—Notwithstanding any other provi18 sion of law, an individual who receives assistance under 

19 the commodity supplemental food program on the day be20 fore the date of enactment of this subsection shall con21 tinue to receive that assistance until the date on which 

22 the individual is no longer eligible for assistance under the 

23 eligibility requirements for the program in effect on the 

24 day before the date of enactment of this subsection.’’. 
356 

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1 SEC. 4103. DISTRIBUTION OF SURPLUS COMMODITIES TO 

2 SPECIAL NUTRITION PROJECTS. 

3 Section 1114(a)(2)(A) of the Agriculture and Food 

4 Act of 1981 (7 U.S.C. 1431e(2)(A)) is amended in the 

5 first sentence by striking ‘‘2012’’ and inserting ‘‘2017’’. 

6 SEC. 4104. TECHNICAL AND CONFORMING AMENDMENTS. 

7 Section 3 of the Commodity Distribution Reform Act 

8 and WIC Amendments of 1987 (7 U.S.C. 612c note; Pub9 lic Law 100–237) is amended— 

10 (1) in subsection (a)— 

11 (A) in paragraph (2), by striking subpara12 graph (B) and inserting the following: 

13 ‘‘(B) the program established under sec14 tion 4(b) of the Food and Nutrition Act of 

15 2008 (7 U.S.C. 2013(b));’’; and 

16 (B) in paragraph (3)(D), by striking ‘‘the 

17 Committee on Education and Labor’’ and in18 serting ‘‘the Committee on Education and the 

19 Workforce’’; 

20 (2) in subsection (b)(1)(A)(ii), by striking ‘‘sec21 tion 32 of the Agricultural Adjustment Act (7 

22 U.S.C. 601 et seq.)’’ and inserting ‘‘section 32 of 

23 the Act of August 24, 1935 (7 U.S.C. 612c)’’; 

24 (3) in subsection (e)(1)(D)(iii), by striking sub25 clause (II) and inserting the following: 
357 

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1 ‘‘(II) the program established 

2 under section 4(b) of the Food and 

3 Nutrition Act of 2008 (7 U.S.C. 

4 2013(b));’’; and 

5 (4) in subsection (k), by striking ‘‘the Com6 mittee on Education and Labor’’ and inserting ‘‘the 

7 Committee on Education and the Workforce’’. 

8 Subtitle C—Miscellaneous 

9 SEC. 4201. PURCHASE OF FRESH FRUITS AND VEGETABLES 

10 FOR DISTRIBUTION TO SCHOOLS AND SERV11 ICE INSTITUTIONS. 

12 Section 10603(b) of the Farm Security and Rural In13 vestment Act of 2002 (7 U.S.C. 612c–4(b)) is amended 

14 by striking ‘‘2012’’ and inserting ‘‘2017’’. 

15 SEC. 4202. SENIORS FARMERS’ MARKET NUTRITION PRO16 GRAM. 

17 Section 4402(a) of the Farm Security and Rural In18 vestment Act of 2002 (7 U.S.C. 3007(a)) is amended by 

19 striking ‘‘2012’’ and inserting ‘‘2017’’. 

20 SEC. 4203. NUTRITION INFORMATION AND AWARENESS 

21 PILOT PROGRAM. 

22 Section 4403 of the Farm Security and Rural Invest23 ment Act of 2002 (7 U.S.C. 3171 note; Public Law 107– 

24 171) is repealed. 
358 

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1 SEC. 4204. WHOLE GRAIN PRODUCTS. 

2 Section 4305 of the Food, Conservation, and Energy 

3 Act of 2008 (42 U.S.C. 1755a) is amended— 

4 (1) in subsection (a), by striking ‘‘2005’’ and 

5 inserting ‘‘2010’’; 

6 (2) in subsection (d), by striking ‘‘2011’’ and 

7 inserting ‘‘2015’’; 

8 (3) in subsection (e), by striking ‘‘Labor of the 

9 House of Representative’’ and inserting ‘‘the Work10 force of the House of Representatives’’; and 

11 (4) by adding at the end the following: 

12 ‘‘(f) FUNDING.— 

13 ‘‘(1) IN GENERAL.—On October 1, 2013, out of 

14 any funds in the Treasury not otherwise appro15 priated, the Secretary of the Treasury shall transfer 

16 to the Secretary to carry out this section 

17 $10,000,000 for the period of fiscal years 2014 

18 through 2015. 

19 ‘‘(2) RECEIPT AND ACCEPTANCE.—The Sec20 retary shall be entitled to receive, shall accept, and 

21 shall use to carry out this section the funds trans22 ferred under paragraph (1), without further appro23 priation. 

24 ‘‘(3) MAINTENANCE OF FUNDING.—The fund25 ing provided under paragraph (1) shall supplement 

26 (and not supplant) other Federal funding (including 
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1 funds made available under section 32 of the Act of 

2 August 24, 1935 (7 U.S.C. 612c)) for programs car3 ried out under— 

4 ‘‘(A) the Richard B. Russell National 

5 School Lunch Act (42 U.S.C. 1751 et seq.), ex6 cept for section 19 of that Act (42 U.S.C. 

7 1769a); 

8 ‘‘(B) the Emergency Food Assistance Act 

9 of 1983 (7 U.S.C. 7501 et seq.); and 

10 ‘‘(C) section 27 of the Food and Nutrition 

11 Act of 2008 (7 U.S.C. 2036).’’. 

12 SEC. 4205. HUNGER-FREE COMMUNITIES. 

13 Section 4405 of the Food, Conservation, and Energy 

14 Act of 2008 (7 U.S.C. 7517) is amended— 

15 (1) in subsection (a)— 

16 (A) by striking paragraph (1) and insert17 ing the following: 

18 ‘‘(1) ELIGIBLE ENTITY.— 

19 ‘‘(A) COLLABORATIVE GRANTS.—In sub20 section (b), the term ‘eligible entity’ means a 

21 public food program service provider or non22 profit organization, including an emergency 

23 feeding organization, that has collaborated or 

24 will collaborate with 1 or more local partner or-
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1 ganizations to achieve at least 1 hunger-free 

2 communities goal. 

3 ‘‘(B) INCENTIVE GRANTS.—In subsection 

4 (c), the term ‘eligible entity’ means a nonprofit 

5 organization (including an emergency feeding 

6 organization), an agricultural cooperative, pro7 ducer network or association, community health 

8 organization, public benefit corporation, eco9 nomic development corporation, farmers’ mar10 ket, community-supported agriculture program, 

11 buying club, supplemental nutrition assistance 

12 program retail food store, a State, local, or trib13 al agency, and any other entity the Secretary 

14 designates.’’; 

15 (B) by adding at the end the following: 

16 ‘‘(4) SUPPLEMENTAL NUTRITION ASSISTANCE

17 PROGRAM.—The term ‘supplemental nutrition assist18 ance program’ means the supplemental nutrition as19 sistance program established under the Food and 

20 Nutrition Act of 2008 (7 U.S.C. 2011 et seq.). 

21 ‘‘(5) UNDERSERVED COMMUNITY.—The term 

22 ‘underserved community’ has the meaning given the 

23 term in section 25 of the Food and Nutrition Act of 

24 2008 (7 U.S.C. 2034).’’; 
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1 (2) in subsection (b)(1)(A), by striking ‘‘not 

2 more than 50 percent of any funds made available 

3 under subsection (e)’’ and inserting ‘‘funds made 

4 available under subsection (d)(1)’’; and 

5 (3) by striking subsections (c), (d), and (e) and 

6 inserting the following: 

7 ‘‘(c) HUNGER-FREE COMMUNITIES INCENTIVE

8 GRANTS.— 

9 ‘‘(1) AUTHORIZATION.— 

10 ‘‘(A) IN GENERAL.—In each of the years 

11 specified in subsection (d), the Secretary shall 

12 make grants to eligible entities in accordance 

13 with paragraph (2). 

14 ‘‘(B) FEDERAL SHARE.—The Federal 

15 share of the cost of carrying out an activity 

16 under this subsection shall not exceed 50 per17 cent of the total cost of the activity. 

18 ‘‘(C) NON-FEDERAL SHARE.— 

19 ‘‘(i) IN GENERAL.—The non-Federal 

20 share of the cost of an activity under this 

21 subsection may be provided— 

22 ‘‘(I) in cash or in-kind contribu23 tions as determined by the Secretary, 

24 including facilities, equipment, or 

25 services; and 
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1 ‘‘(II) by a State or local govern2 ment or a private source. 

3 ‘‘(ii) LIMITATION.—In the case of a 

4 for-profit entity, the non-Federal share de5 scribed in clause (i) shall not include serv6 ices of an employee, including salaries paid 

7 or expenses covered by the employer. 

8 ‘‘(2) CRITERIA.— 

9 ‘‘(A) IN GENERAL.—For purposes of this 

10 subsection, an eligible entity is a governmental 

11 agency or nonprofit organization that— 

12 ‘‘(i) meets the application criteria set 

13 forth by the Secretary; and 

14 ‘‘(ii) proposes a project that, at a 

15 minimum— 

16 ‘‘(I) has the support of the State 

17 agency; 

18 ‘‘(II) would increase the purchase 

19 of fruits and vegetables by low-income 

20 consumers participating in the supple21 mental nutrition assistance program 

22 by providing incentives at the point of 

23 purchase; 

24 ‘‘(III) agrees to participate in the 

25 evaluation described in paragraph (4); 
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1 ‘‘(IV) ensures that the same 

2 terms and conditions apply to pur3 chases made by individuals with bene4 fits issued under this Act and incen5 tives provided for in this subsection as 

6 apply to purchases made by individ7 uals who are not members of house8 holds receiving benefits, such as pro9 vided for in section 278.2(b) of title 7, 

10 Code of Federal Regulations (or a 

11 successor regulation); and 

12 ‘‘(V) includes effective and effi13 cient technologies for benefit redemp14 tion systems that may be replicated in 

15 other for States and communities. 

16 ‘‘(B) PRIORITY.—In awarding grants 

17 under this section, the Secretary shall give pri18 ority to projects that— 

19 ‘‘(i) maximize the share of funds used 

20 for direct incentives to participants; 

21 ‘‘(ii) use direct-to-consumer sales mar22 keting; 

23 ‘‘(iii) demonstrate a track record of 

24 designing and implementing successful nu25 trition incentive programs that connect 
364 

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1 low-income consumers and agricultural 

2 producers; 

3 ‘‘(iv) provide locally or regionally pro4 duced fruits and vegetables; 

5 ‘‘(v) are located in underserved com6 munities; or 

7 ‘‘(vi) address other criteria as estab8 lished by the Secretary. 

9 ‘‘(3) APPLICABILITY.— 

10 ‘‘(A) IN GENERAL.—The value of any ben11 efit provided to a participant in any activity 

12 funded under this subsection shall not be con13 sidered income or resources for any purpose 

14 under any Federal, State, or local law. 

15 ‘‘(B) PROHIBITION ON COLLECTION OF

16 SALES TAXES.—Each State shall ensure that no 

17 State or local tax is collected on a purchase of 

18 food under this subsection. 

19 ‘‘(C) NO LIMITATION ON BENEFITS.—A 

20 grant made available under this subsection shall 

21 not be used to carry out any project that limits 

22 the use of benefits under the Food and Nutri23 tion Act of 2008 (7 U.S.C. 2011 et seq.) or any 

24 other Federal nutrition law. 
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1 ‘‘(D) HOUSEHOLD ALLOTMENT.—Assist2 ance provided under this subsection to house3 holds receiving benefits under the supplemental 

4 nutrition assistance program shall not— 

5 ‘‘(i) be considered part of the supple6 mental nutrition assistance program bene7 fits of the household; or 

8 ‘‘(ii) be used in the collection or dis9 position of claims under section 13 of the 

10 Food and Nutrition Act of 2008 (7 U.S.C. 

11 2022). 

12 ‘‘(4) EVALUATION.— 

13 ‘‘(A) INDEPENDENT EVALUATION.—The 

14 Secretary shall provide for an independent eval15 uation of projects selected under this subsection 

16 that measures the impact of each project on— 

17 ‘‘(i) improving the nutrition and 

18 health status of participating households 

19 receiving incentives under this subsection; 

20 and 

21 ‘‘(ii) increasing fruit and vegetable 

22 purchases in participating households. 

23 ‘‘(B) REQUIREMENT.—The independent 

24 evaluation under subparagraph (A) shall use 

25 rigorous methodologies capable of producing 
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1 scientifically valid information regarding the ef2 fectiveness of a project. 

3 ‘‘(C) COSTS.—The Secretary may use 

4 funds not to exceed 10 percent of the funding 

5 provided to carry out this section to pay costs 

6 associated with administering, monitoring, and 

7 evaluating each project. 

8 ‘‘(d) FUNDING.— 

9 ‘‘(1) AUTHORIZATION OF APPROPRIATIONS.— 

10 There is authorized to be appropriated to carry out 

11 subsection (b) $5,000,000 for each of fiscal years 

12 2013 through 2017. 

13 ‘‘(2) MANDATORY FUNDING.—Of the funds of 

14 the Commodity Credit Corporation, the Secretary 

15 shall use to carry out subsection (c)— 

16 ‘‘(A) $15,000,000 for fiscal year 2013; 

17 ‘‘(B) $20,000,000 for each of fiscal years 

18 2014 through 2016; and 

19 ‘‘(C) $25,000,000 for fiscal year 2017.’’. 

20 SEC. 4206. HEALTHY FOOD FINANCING INITIATIVE. 

21 (a) IN GENERAL.—Subtitle D of title II of the De22 partment of Agriculture Reorganization Act of 1994 (7 

23 U.S.C. 6951 et seq.) is amended by adding at the end 

24 the following: 
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1 ‘‘SEC. 242. HEALTHY FOOD FINANCING INITIATIVE. 

2 ‘‘(a) PURPOSE.—The purpose of this section is to en3 hance the authorities of the Secretary to support efforts 

4 to provide access to healthy food by establishing an initia5 tive to improve access to healthy foods in underserved 

6 areas, to create and preserve quality jobs, and to revitalize 

7 low-income communities by providing loans and grants to 

8 eligible fresh, healthy food retailers to overcome the higher 

9 costs and initial barriers to entry in underserved areas. 

10 ‘‘(b) DEFINITIONS.—In this section: 

11 ‘‘(1) COMMUNITY DEVELOPMENT FINANCIAL IN12 STITUTION.—The term ‘community development fi13 nancial institution’ has the meaning given the term 

14 in section 103 of the Community Development 

15 Banking and Financial Institutions Act of 1994 (12 

16 U.S.C. 4702). 

17 ‘‘(2) INITIATIVE.—The term ‘Initiative’ means 

18 the Healthy Food Financing Initiative established 

19 under subsection (c)(1). 

20 ‘‘(3) NATIONAL FUND MANAGER.—The term 

21 ‘national fund manager’ means a community devel22 opment financial institution that is— 

23 ‘‘(A) in existence on the date of enactment 

24 of this section; and 

25 ‘‘(B) certified by the Community Develop26 ment Financial Institution Fund of the Depart-
368 

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1 ment of Treasury to manage the Initiative for 

2 purposes of— 

3 ‘‘(i) raising private capital; 

4 ‘‘(ii) providing financial and technical 

5 assistance to partnerships; and 

6 ‘‘(iii) funding eligible projects to at7 tract fresh, healthy food retailers to under8 served areas, in accordance with this sec9 tion. 

10 ‘‘(4) PARTNERSHIP.—The term ‘partnership’ 

11 means a regional, State, or local public-private part12 nership that— 

13 ‘‘(A) is organized to improve access to 

14 fresh, healthy foods; 

15 ‘‘(B) provides financial and technical as16 sistance to eligible projects; and 

17 ‘‘(C) meets such other criteria as the Sec18 retary may establish. 

19 ‘‘(5) PERISHABLE FOOD.—The term ‘perishable 

20 food’ means a staple food that is fresh, refrigerated, 

21 or frozen. 

22 ‘‘(6) QUALITY JOB.—The term ‘quality job’ 

23 means a job that provides wages and other benefits 

24 comparable to, or better than, similar positions in 
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1 existing businesses of similar size in similar local 

2 economies. 

3 ‘‘(7) STAPLE FOOD.— 

4 ‘‘(A) IN GENERAL.—The term ‘staple food’ 

5 means food that is a basic dietary item. 

6 ‘‘(B) INCLUSIONS.—The term ‘staple food’ 

7 includes— 

8 ‘‘(i) bread; 

9 ‘‘(ii) flour; 

10 ‘‘(iii) fruits; 

11 ‘‘(iv) vegetables; and 

12 ‘‘(v) meat. 

13 ‘‘(c) INITIATIVE.— 

14 ‘‘(1) ESTABLISHMENT.—The Secretary shall es15 tablish an initiative to achieve the purpose described 

16 in subsection (a) in accordance with this subsection. 

17 ‘‘(2) IMPLEMENTATION.— 

18 ‘‘(A) IN GENERAL.— 

19 ‘‘(i) IN GENERAL.—In carrying out 

20 the Initiative, the Secretary shall provide 

21 funding to entities with eligible projects, as 

22 described in subparagraph (B), subject to 

23 the priorities described in subparagraph 

24 (C). 
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1 ‘‘(ii) USE OF FUNDS.—Funds pro2 vided to an entity pursuant to clause (i) 

3 shall be used— 

4 ‘‘(I) to create revolving loan pools 

5 of capital or other products to provide 

6 loans to finance eligible projects or 

7 partnerships; 

8 ‘‘(II) to provide grants for eligi9 ble projects or partnerships; 

10 ‘‘(III) to provide technical assist11 ance to funded projects and entities 

12 seeking Initiative funding; and 

13 ‘‘(IV) to cover administrative ex14 penses of the national fund manager 

15 in an amount not to exceed 10 per16 cent of the Federal funds provided. 

17 ‘‘(B) ELIGIBLE PROJECTS.—Subject to the 

18 approval of the Secretary, the national fund 

19 manager shall establish eligibility criteria for 

20 projects under the Initiative, which shall include 

21 the existence or planned execution of agree22 ments— 

23 ‘‘(i) to expand or preserve the avail24 ability of staple foods in underserved areas 

25 with moderate- and low-income populations 
371 

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1 by maintaining or increasing the number 

2 of retail outlets that offer an assortment of 

3 perishable food and staple food items, as 

4 determined by the Secretary, in those 

5 areas; and 

6 ‘‘(ii) to accept benefits under the sup7 plemental nutrition assistance program es8 tablished under the Food and Nutrition 

9 Act of 2008 (7 U.S.C. 2011 et seq.). 

10 ‘‘(C) PRIORITIES.—In carrying out the Ini11 tiative, priority shall be given to projects that— 

12 ‘‘(i) are located in severely distressed 

13 low-income communities, as defined by the 

14 Community Development Financial Insti15 tutions Fund of the Department of Treas16 ury; and 

17 ‘‘(ii) include 1 or more of the fol18 lowing characteristics: 

19 ‘‘(I) The project will create or re20 tain quality jobs for low-income resi21 dents in the community. 

22 ‘‘(II) The project supports re23 gional food systems and locally grown 

24 foods, to the maximum extent prac25 ticable. 
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1 ‘‘(III) In areas served by public 

2 transit, the project is accessible by 

3 public transit. 

4 ‘‘(IV) The project involves 

5 women- or minority-owned businesses. 

6 ‘‘(V) The project receives funding 

7 from other sources, including other 

8 Federal agencies. 

9 ‘‘(VI) The project otherwise ad10 vances the purpose of this section, as 

11 determined by the Secretary. 

12 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

13 is authorized to be appropriated to the Secretary to carry 

14 out this section $125,000,000, to remain available until 

15 expended.’’. 

16 (b) CONFORMING AMENDMENT.—Section 296(b) of 

17 the Department of Agriculture Reorganization Act of 

18 1994 (7 U.S.C. 7014(b)) (as amended by section 1609(d)) 

19 is amended— 

20 (1) in paragraph (7), by striking ‘‘or’’ at the 

21 end; 

22 (2) in paragraph (8), by striking the period at 

23 the end and inserting ‘‘; or’’; and 

24 (3) by adding at the end the following: 
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1 ‘‘(9) the authority of the Secretary to establish 

2 and carry out the Health Food Financing Initiative 

3 under section 242.’’. 

4 SEC. 4207. PULSE CROP PRODUCTS. 

5 (a) PURPOSE.—The purpose of this section is to en6 courage greater awareness and interest in the number and 

7 variety of pulse crop products available to schoolchildren, 

8 as recommended by the most recent Dietary Guidelines 

9 for Americans published under section 301 of the National 

10 Nutrition Monitoring and Related Research Act of 1990 

11 (7 U.S.C. 5341). 

12 (b) DEFINITIONS.—In this section: 

13 (1) ELIGIBLE PULSE CROP.—The term ‘‘eligible 

14 pulse crop’’ means dry beans, dry peas, lentils, and 

15 chickpeas. 

16 (2) PULSE CROP PRODUCT.—The term ‘‘pulse 

17 crop product’’ means a food product derived in 

18 whole or in part from an eligible pulse crop. 

19 (c) PURCHASE OF PULSE CROPS AND PULSE CROP

20 PRODUCTS.—In addition to the commodities delivered 

21 under section 6 of the Richard B. Russell National School 

22 Lunch Act (42 U.S.C. 1755), the Secretary shall purchase 

23 eligible pulse crops and pulse crop products for use in— 
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1 (1) the school lunch program established under 

2 the Richard B. Russell National School Lunch Act 

3 (42 U.S.C. 1751 et seq.); and 

4 (2) the school breakfast program established by 

5 section 4 of the Child Nutrition Act of 1966 (42 

6 U.S.C. 1773). 

7 (d) EVALUATION.—Not later than September 30, 

8 2016, the Secretary shall conduct an evaluation of the ac9 tivities conducted under subsection (c), including— 

10 (1) an evaluation of whether children partici11 pating in the school lunch and breakfast programs 

12 described in subsection (c) increased overall con13 sumption of eligible pulse crops as a result of the ac14 tivities; 

15 (2) an evaluation of which eligible pulse crops 

16 and pulse crop products are most acceptable for use 

17 in the school lunch and breakfast programs; 

18 (3) any recommendations of the Secretary re19 garding the integration of the use of pulse crop 

20 products in carrying out the school lunch and break21 fast programs; 

22 (4) an evaluation of any change in the nutrient 

23 composition in the school lunch and breakfast pro24 grams due to the activities; and 
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1 (5) an evaluation of any other outcomes deter2 mined to be appropriate by the Secretary. 

3 (e) REPORT.—As soon as practicable after the com4 pletion of the evaluation under subsection (d), the Sec5 retary shall submit to the Committee on Agriculture, Nu6 trition, and Forestry of the Senate and the Committee on 

7 Education and the Workforce of the House of Representa8 tive a report describing the results of the evaluation. 

9 (f) AUTHORIZATION OF APPROPRIATIONS.—There is 

10 authorized to be appropriated to carry out this section 

11 $10,000,000, to remain available until expended. 

12 SEC. 4208. DIETARY GUIDELINES FOR AMERICANS. 

13 Section 301(a) of the National Nutrition Monitoring 

14 and Related Research Act of 1990 (7 U.S.C. 5341(a)) is 

15 amended by adding at the end the following: 

16 ‘‘(3) PREGNANT WOMEN AND YOUNG CHIL17 DREN.—Not later than the 2020 report and in each 

18 report thereafter, the Secretaries shall include na19 tional nutritional and dietary information and guide20 lines for pregnant women and children from birth 

21 until the age of 2.’’. 

22 SEC. 4209. PURCHASES OF LOCALLY PRODUCED FOODS. 

23 Section 9(j) of the Richard B. Russell National 

24 School Lunch Act (42 U.S.C. 1758(j)) is amended— 
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1 (1) by redesignating paragraphs (1) through 

2 (3) as subparagraphs (A) through (C), respectively, 

3 and indenting the subparagraphs appropriately; 

4 (2) by striking ‘‘The Secretary’’ and inserting 

5 the following: 

6 ‘‘(1) IN GENERAL.—The Secretary’’; 

7 (3) in paragraph (1) (as so redesignated)— 

8 (A) in subparagraph (B)— 

9 (i) by striking ‘‘paragraph (1) of the 

10 policy described in that paragraph and 

11 paragraph (3)’’ and inserting ‘‘subpara12 graph (A) of the policy described in that 

13 subparagraph and subparagraph (C)’’; and 

14 (ii) by striking ‘‘and’’ at the end; 

15 (B) in subparagraph (C), by striking the 

16 period at the end and inserting ‘‘; and’’; and 

17 (C) by adding at the end the following: 

18 ‘‘(D) not later than 1 year after the date 

19 of enactment of this subparagraph, in accord20 ance with paragraphs (2) and (3), conduct not 

21 fewer than 5 demonstration projects through 

22 school food authorities receiving funds under 

23 this Act and the Child Nutrition Act of 1966 

24 (42 U.S.C. 1771 et seq.) to facilitate the pur25 chase of unprocessed and minimally processed 
377 

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1 locally grown and locally raised agricultural 

2 products.’’; and 

3 (4) by adding at the end the following: 

4 ‘‘(2) SELECTION.—In conducting demonstration 

5 projects under paragraph (1)(D), the Secretary shall 

6 ensure that at least 1 project is located in a State 

7 in each of— 

8 ‘‘(A) the Pacific Northwest Region; 

9 ‘‘(B) the Northeast Region; 

10 ‘‘(C) the Western Region; 

11 ‘‘(D) the Midwest Region; and 

12 ‘‘(E) the Southern Region. 

13 ‘‘(3) PRIORITY.—In selecting States for partici14 pation in the demonstration projects under para15 graph (2), the Secretary shall prioritize applications 

16 based on— 

17 ‘‘(A) the quantity and variety of growers of 

18 local fruits and vegetables in the State; 

19 ‘‘(B) the demonstrated commitment of the 

20 State to farm-to-school efforts, as evidenced by 

21 prior efforts to increase and promote farm-to22 school programs in the State; and 

23 ‘‘(C) whether the State contains a suffi24 cient quantity of school districts of varying pop25 ulation sizes and geographical locations.’’. 
378 

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1 TITLE V—CREDIT 

2 Subtitle A—Farmer Loans, Serv3 icing, and Other Assistance 

4 Under the Consolidated Farm 

5 and Rural Development Act 

6 SEC. 5001. FARMER LOANS, SERVICING, AND OTHER ASSIST7 ANCE UNDER THE CONSOLIDATED FARM AND 

8 RURAL DEVELOPMENT ACT. 

9 The Consolidated Farm and Rural Development Act 

10 (as amended by section 6001) is amended by inserting 

11 after section 3002 the following: 

12 ‘‘Subtitle A—Farmer Loans, 

13 Servicing, and Other Assistance 

14 ‘‘CHAPTER 1—FARM OWNERSHIP LOANS 

15 ‘‘SEC. 3101. FARM OWNERSHIP LOANS. 

16 ‘‘(a) IN GENERAL.—The Secretary may make or 

17 guarantee a farm ownership loan under this chapter to 

18 an eligible farmer. 

19 ‘‘(b) ELIGIBILITY.—A farmer shall be eligible under 

20 subsection (a) only— 

21 ‘‘(1) if the farmer, or, in the case of an entity, 

22 1 or more individuals holding a majority interest in 

23 the farmer— 

24 ‘‘(A) is a citizen of the United States; and 
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1 ‘‘(B) in the case of a direct loan, has train2 ing or farming experience that the Secretary 

3 determines is sufficient to ensure a reasonable 

4 prospect of success in the farming operation 

5 proposed by the farmer; 

6 ‘‘(2)(A) in the case of a farmer that is an indi7 vidual, if the farmer is or proposes to become an 

8 owner and operator of a farm that is not larger than 

9 a family farm; or 

10 ‘‘(B) in the case of a lessee-operator of a farm 

11 located in the State of Hawaii, if the Secretary de12 termines that— 

13 ‘‘(i) the farm is not larger than a family 

14 farm; 

15 ‘‘(ii) the farm cannot be acquired in fee 

16 simple by the lessee-operator; 

17 ‘‘(iii) adequate security is provided for the 

18 loan with respect to the farm for which the les19 see-operator applies under this chapter; and 

20 ‘‘(iv) there is a reasonable probability of 

21 accomplishing the objectives and repayment of 

22 the loan; 

23 ‘‘(3) in the case of a farmer that is a coopera24 tive, corporation, partnership, trust, limited liability 

25 company, joint operation, or such other legal entity 
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1 as the Secretary determines to be appropriate, with 

2 respect to the entity and each farm in which the en3 tity has an ownership or operator interest— 

4 ‘‘(A) if— 

5 ‘‘(i) a majority interest is held by in6 dividuals who are related by blood or mar7 riage, as defined by the Secretary; 

8 ‘‘(ii) all of the individuals are or pro9 pose to become owners or operators of a 

10 farm that is not larger than a family farm; 

11 and 

12 ‘‘(iii) at least 1 of the individuals is or 

13 proposes to become an operator of the 

14 farm; or 

15 ‘‘(B) if— 

16 ‘‘(i) the entire interest is held by indi17 viduals who are related by blood or mar18 riage, as defined by the Secretary; 

19 ‘‘(ii) all of the individuals are or pro20 pose to become farm operators; and 

21 ‘‘(iii) the ownership interest of each 

22 individual separately constitutes not larger 

23 than a family farm, even if the ownership 

24 interests of the individuals collectively con25 stitute larger than a family farm; 
381 

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1 ‘‘(4) in the case of an entity that is, or will be2 come within a reasonable period of time, as deter3 mined by the Secretary, only the operator of a fam4 ily farm, if the 1 or more individuals who are the 

5 owners of the family farm own— 

6 ‘‘(A) a percentage of the family farm that 

7 exceeds 50 percent; or 

8 ‘‘(B) such other percentage as the Sec9 retary determines to be appropriate; 

10 ‘‘(5) in the case of an operator described in 

11 paragraph (3) that is owned, in whole or in part, by 

12 1 or more other entities, if each of the individuals 

13 that have a direct or indirect ownership interest in 

14 such other entities also have a direct ownership in15 terest in the entity applying as an individual; and 

16 ‘‘(6) if the farmer and each individual that 

17 holds a majority interest in the farmer is unable to 

18 obtain credit elsewhere. 

19 ‘‘(c) DIRECT LOANS.— 

20 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

21 the Secretary may make a direct loan under this 

22 chapter only to a farmer who has participated in 

23 business operations of a farm for not less than 3 

24 years (or has other acceptable experience for a pe25 riod of time determined by the Secretary) and— 
382 

†S 3240 ES

1 ‘‘(A) is a qualified beginning farmer; 

2 ‘‘(B) has not received a previous direct 

3 farm ownership loan made under this chapter; 

4 or 

5 ‘‘(C) has not received a direct farm owner6 ship loan under this chapter more than 10 

7 years before the date on which the new loan 

8 would be made. 

9 ‘‘(2) YOUTH LOANS.—The operation of an en10 terprise by a youth under section 3201(d) shall not 

11 be considered the operation of a farm for purposes 

12 of paragraph (1). 

13 ‘‘SEC. 3102. PURPOSES OF LOANS. 

14 ‘‘(a) ALLOWED PURPOSES.— 

15 ‘‘(1) DIRECT LOANS.—A farmer may use a di16 rect loan made under this chapter only— 

17 ‘‘(A) to acquire or enlarge a farm; 

18 ‘‘(B) to make capital improvements to a 

19 farm; 

20 ‘‘(C) to pay loan closing costs related to 

21 acquiring, enlarging, or improving a farm; 

22 ‘‘(D) to pay for activities to promote soil 

23 and water conservation and protection described 

24 in section 3103 on a farm; or 
383 

†S 3240 ES

1 ‘‘(E) to refinance a temporary bridge loan 

2 made by a commercial or cooperative lender to 

3 a farmer for the acquisition of land for a farm, 

4 if— 

5 ‘‘(i) the Secretary approved an appli6 cation for a direct farm ownership loan to 

7 the farmer for acquisition of the land; and 

8 ‘‘(ii) funds for direct farm ownership 

9 loans under section 3201(a) were not avail10 able at the time at which the application 

11 was approved. 

12 ‘‘(2) GUARANTEED LOANS.—A farmer may use 

13 a loan guaranteed under this chapter only— 

14 ‘‘(A) to acquire or enlarge a farm; 

15 ‘‘(B) to make capital improvements to a 

16 farm; 

17 ‘‘(C) to pay loan closing costs related to 

18 acquiring, enlarging, or improving a farm; 

19 ‘‘(D) to pay for activities to promote soil 

20 and water conservation and protection described 

21 in section 3103 on a farm; or 

22 ‘‘(E) to refinance indebtedness. 

23 ‘‘(b) PREFERENCES.—In making or guaranteeing a 

24 loan under this chapter for purchase of a farm, the Sec25 retary shall give preference to a person who— 
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†S 3240 ES

1 ‘‘(1) has a dependent family; 

2 ‘‘(2) to the extent practicable, is able to make 

3 an initial down payment on the farm; or 

4 ‘‘(3) is an owner of livestock or farm equipment 

5 that is necessary to successfully carry out farming 

6 operations. 

7 ‘‘(c) HAZARD INSURANCE REQUIREMENT.—The Sec8 retary may not make a loan to a farmer under this chapter 

9 unless the farmer has, or agrees to obtain, hazard insur10 ance on any real property to be acquired or improved with 

11 the loan. 

12 ‘‘SEC. 3103. CONSERVATION LOAN AND LOAN GUARANTEE 

13 PROGRAM. 

14 ‘‘(a) IN GENERAL.—The Secretary may make or 

15 guarantee qualified conservation loans to eligible bor16 rowers under this section. 

17 ‘‘(b) DEFINITIONS.—In this section: 

18 ‘‘(1) CONSERVATION PLAN.—The term ‘con19 servation plan’ means a plan, approved by the Sec20 retary, that, for a farming operation, identifies the 

21 conservation activities that will be addressed with 

22 loan funds provided under this section, including— 

23 ‘‘(A) the installation of conservation struc24 tures to address soil, water, and related re25 sources; 
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†S 3240 ES

1 ‘‘(B) the establishment of forest cover for 

2 sustained yield timber management, erosion 

3 control, or shelter belt purposes; 

4 ‘‘(C) the installation of water conservation 

5 measures; 

6 ‘‘(D) the installation of waste management 

7 systems; 

8 ‘‘(E) the establishment or improvement of 

9 permanent pasture; 

10 ‘‘(F) compliance with section 1212 of the 

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

12 and 

13 ‘‘(G) other purposes consistent with the 

14 plan, including the adoption of any other 

15 emerging or existing conservation practices, 

16 techniques, or technologies approved by the Sec17 retary. 

18 ‘‘(2) QUALIFIED CONSERVATION LOAN.—The 

19 term ‘qualified conservation loan’ means a loan, the 

20 proceeds of which are used to cover the costs to the 

21 borrower of carrying out a qualified conservation 

22 project. 

23 ‘‘(3) QUALIFIED CONSERVATION PROJECT.— 

24 The term ‘qualified conservation project’ means con-
386 

†S 3240 ES

1 servation measures that address provisions of a con2 servation plan of the eligible borrower. 

3 ‘‘(c) ELIGIBILITY.— 

4 ‘‘(1) IN GENERAL.—The Secretary may make 

5 or guarantee loans to farmers. 

6 ‘‘(2) REQUIREMENTS.—To be eligible for a loan 

7 under this section, applicants shall meet the citizen8 ship and training and experience requirements of 

9 section 3101(b). 

10 ‘‘(d) PRIORITY.—In making or guaranteeing loans 

11 under this section, the Secretary shall give priority to— 

12 ‘‘(1) qualified beginning farmers and socially 

13 disadvantaged farmers; 

14 ‘‘(2) owners or tenants who use the loans to 

15 convert to sustainable or organic agricultural pro16 duction systems; and 

17 ‘‘(3) producers who use the loans to build con18 servation structures or establish conservation prac19 tices to comply with section 1212 of the Food Secu20 rity Act of 1985 (16 U.S.C. 3812). 

21 ‘‘(e) LIMITATIONS APPLICABLE TO LOAN GUARAN22 TEES.—The portion of a loan that the Secretary may 

23 guarantee under this section shall not exceed 75 percent 

24 of the principal amount of the loan. 
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†S 3240 ES

1 ‘‘(f) ADMINISTRATIVE PROVISIONS.—The Secretary 

2 shall ensure, to the maximum extent practicable, that 

3 loans made or guaranteed under this section are distrib4 uted across diverse geographic regions. 

5 ‘‘(g) CREDIT ELIGIBILITY.—The provisions of para6 graphs (1) and (3) of section 3406(a) shall not apply to 

7 loans made or guaranteed under this section. 

8 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—For 

9 each of fiscal years 2012 through 2017, there are author10 ized to be appropriated to the Secretary such sums as are 

11 necessary to carry out this section. 

12 ‘‘SEC. 3104. LOAN MAXIMUMS. 

13 ‘‘(a) MAXIMUM.— 

14 ‘‘(1) IN GENERAL.—The Secretary shall make 

15 or guarantee no loan under sections 3101, 3102, 

16 3103, 3106, and 3107 that would cause the unpaid 

17 indebtedness under those sections of any 1 borrower 

18 to exceed the lesser of— 

19 ‘‘(A) the value of the farm or other secu20 rity, or 

21 ‘‘(B)(i) in the case of a loan made by the 

22 Secretary, $300,000; or 

23 ‘‘(ii) in the case of a loan guaranteed by 

24 the Secretary, $700,000 (as modified under 

25 paragraph (2)). 
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1 ‘‘(2) MODIFICATION.—The amount specified in 

2 paragraph (1)(B)(ii) shall be— 

3 ‘‘(A) increased, beginning with fiscal year 

4 2000, by the inflation percentage applicable to 

5 the fiscal year in which the loan is guaranteed; 

6 and 

7 ‘‘(B) reduced by the amount of any unpaid 

8 indebtedness of the borrower on loans under 

9 chapter 2 that are guaranteed by the Secretary. 

10 ‘‘(b) DETERMINATION OF VALUE.—In determining 

11 the value of the farm, the Secretary shall consider apprais12 als made by competent appraisers under rules established 

13 by the Secretary. 

14 ‘‘(c) INFLATION PERCENTAGE.—For purposes of this 

15 section, the inflation percentage applicable to a fiscal year 

16 is the percentage (if any) by which— 

17 ‘‘(1) the average of the Prices Paid By Farmers 

18 Index (as compiled by the National Agricultural Sta19 tistics Service of the Department) for the 12-month 

20 period ending on August 31 of the immediately pre21 ceding fiscal year; exceeds 

22 ‘‘(2) the average of that index (as so defined) 

23 for the 12-month period ending on August 31, 1996. 
389 

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1 ‘‘SEC. 3105. REPAYMENT REQUIREMENTS FOR FARM OWN2 ERSHIP LOANS. 

3 ‘‘(a) PERIOD FOR REPAYMENT.—The period for re4 payment of a loan under this chapter shall not exceed 40 

5 years. 

6 ‘‘(b) INTEREST RATES.— 

7 ‘‘(1) IN GENERAL.—Except as otherwise pro8 vided in this title, the interest rate on a loan under 

9 this chapter shall be determined by the Secretary at 

10 a rate— 

11 ‘‘(A) not to exceed the sum obtained by 

12 adding— 

13 ‘‘(i) the current average market yield 

14 on outstanding marketable obligations of 

15 the United States with remaining periods 

16 to maturity comparable to the average ma17 turity of the loan; and 

18 ‘‘(ii) an amount not to exceed 1 per19 cent, as determined by the Secretary; and 

‘‘(B) adjusted to the nearest 1 20 ⁄8 of 1 per21 cent. 

22 ‘‘(2) LOW INCOME FARM OWNERSHIP LOANS.— 

23 Except as provided in paragraph (3), the interest 

24 rate on a loan (other than a guaranteed loan) under 

25 section 3106 shall be determined by the Secretary at 

26 a rate that is— 
390 

†S 3240 ES

1 ‘‘(A) not greater than the sum obtained by 

2 adding— 

3 ‘‘(i) an amount that does not exceed 

1 4 ⁄2 of the current average market yield on 

5 outstanding marketable obligations of the 

6 United States with maturities of 5 years; 

7 and 

8 ‘‘(ii) an amount not to exceed 1 per9 cent per year, as the Secretary determines 

10 is appropriate; and 

11 ‘‘(B) not less than 5 percent per year. 

12 ‘‘(3) JOINT FINANCING ARRANGEMENT.—If a 

13 direct farm ownership loan is made under this chap14 ter as part of a joint financing arrangement and the 

15 amount of the direct farm ownership loan does not 

16 exceed 50 percent of the total principal amount fi17 nanced under the arrangement, the interest rate on 

18 the direct farm ownership loan shall be at least 4 

19 percent annually. 

20 ‘‘(4) GUARANTEED LOANS.—The interest rate 

21 on a loan made under this chapter as a guaranteed 

22 loan shall be such rate as may be agreed on by the 

23 borrower and the lender, but not in excess of any 

24 rate determined by the Secretary. 
391 

†S 3240 ES

1 ‘‘(c) PAYMENT OF CHARGES.—A borrower of a loan 

2 made or guaranteed under this chapter shall pay such fees 

3 and other charges as the Secretary may require, and pre4 pay to the Secretary such taxes and insurance as the Sec5 retary may require, on such terms and conditions as the 

6 Secretary may prescribe. 

7 ‘‘(d) SECURITY.— 

8 ‘‘(1) IN GENERAL.—The Secretary shall take as 

9 security for an obligation entered into in connection 

10 with a loan, a mortgage on a farm with respect to 

11 which the loan is made or such other security as the 

12 Secretary may require. 

13 ‘‘(2) LIENS TO UNITED STATES.—An instru14 ment for security under paragraph (1) may con15 stitute a lien running to the United States notwith16 standing the fact that the note for the security may 

17 be held by a lender other than the United States. 

18 ‘‘(3) MULTIPLE LOANS.—A borrower may use 

19 the same collateral to secure 2 or more loans made 

20 or guaranteed under this chapter, except that the 

21 outstanding amount of the loans may not exceed the 

22 total value of the collateral. 

23 ‘‘(e) MINERAL RIGHTS AS COLLATERAL.— 

24 ‘‘(1) IN GENERAL.—In the case of a farm own25 ership loan made after December 23, 1985, unless 
392 

†S 3240 ES

1 appraised values of the rights to oil, gas, or other 

2 minerals are specifically included as part of the ap3 praised value of collateral securing the loan, the 

4 rights to oil, gas, or other minerals located under 

5 the property shall not be considered part of the col6 lateral securing the loan. 

7 ‘‘(2) COMPENSATORY PAYMENTS.—Nothing in 

8 this subsection prevents the inclusion of, as part of 

9 the collateral securing the loan, any payment or 

10 other compensation the borrower may receive for 

11 damages to the surface of the collateral real estate 

12 resulting from the exploration for or recovery of 

13 minerals. 

14 ‘‘(f) ADDITIONAL COLLATERAL.—The Secretary may 

15 not— 

16 ‘‘(1) require any borrower to provide additional 

17 collateral to secure a farmer program loan made or 

18 guaranteed under this subtitle, if the borrower is 

19 current in the payment of principal and interest on 

20 the loan; or 

21 ‘‘(2) bring any action to foreclose, or otherwise 

22 liquidate, the loan as a result of the failure of a bor23 rower to provide additional collateral to secure the 

24 loan, if the borrower was current in the payment of 
393 

†S 3240 ES

1 principal and interest on the loan at the time the ad2 ditional collateral was requested. 

3 ‘‘SEC. 3106. LIMITED-RESOURCE LOANS. 

4 ‘‘(a) IN GENERAL.—The Secretary may make or 

5 guarantee a limited-resource loan for any of the purposes 

6 specified in sections 3102(a) or 3103(a) to a farmer in 

7 the United States who— 

8 ‘‘(1) in the case of an entity, all members, 

9 stockholders, or partners are eligible under section 

10 3101(b); 

11 ‘‘(2) has a low income; and 

12 ‘‘(3) demonstrates a need to maximize the in13 come of the farmer from farming operations. 

14 ‘‘(b) INSTALLMENTS.—A loan made or guaranteed 

15 under this section shall be repayable in such installments 

16 as the Secretary determines will provide for reduced pay17 ments during the initial repayment period of the loan and 

18 larger payments during the remainder of the repayment 

19 period of the loan. 

20 ‘‘(c) INTEREST RATES.—Except as provided in sec21 tion 3105(b)(3) and in section 3204(b)(3), the interest 

22 rate on loans (other than guaranteed loans) under this 

23 section shall not be— 

24 ‘‘(1) greater than the sum obtained by add25 ing— 
394 

†S 3240 ES

‘‘(A) an amount that does not exceed 1 1 ⁄2 of 

2 the current average market yield on out3 standing marketable obligations of the United 

4 States with maturities of 5 years; and 

5 ‘‘(B) an amount not exceeding 1 percent 

6 per year, as the Secretary determines is appro7 priate; or 

8 ‘‘(2) less than 5 percent per year. 

9 ‘‘SEC. 3107. DOWNPAYMENT LOAN PROGRAM. 

10 ‘‘(a) IN GENERAL.— 

11 ‘‘(1) ESTABLISHMENT.—Notwithstanding any 

12 other provision of this chapter, the Secretary shall 

13 establish, under the farm ownership loan program 

14 established under this chapter, a program under 

15 which loans shall be made under this section to a 

16 qualified beginning farmer or a socially disadvan17 taged farmer for a downpayment on a farm owner18 ship loan. 

19 ‘‘(2) COORDINATION.—The Secretary shall be 

20 the primary coordinator of credit supervision for the 

21 downpayment loan program established under this 

22 section, in consultation with a commercial or cooper23 ative lender and, if applicable, a contracting credit 

24 counseling service selected under section 3420(c). 

25 ‘‘(b) LOAN TERMS.— 
395 

†S 3240 ES

1 ‘‘(1) PRINCIPAL.—Each loan made under this 

2 section shall be in an amount that does not exceed 

3 45 percent of the lesser of— 

4 ‘‘(A) the purchase price of the farm to be 

5 acquired; 

6 ‘‘(B) the appraised value of the farm to be 

7 acquired; or 

8 ‘‘(C) $667,000. 

9 ‘‘(2) INTEREST RATE.—The interest rate on 

10 any loan made by the Secretary under this section 

11 shall be a rate equal to the greater of— 

12 ‘‘(A) the difference between— 

13 ‘‘(i) 4 percent; and 

14 ‘‘(ii) the interest rate for farm owner15 ship loans under this chapter; or 

16 ‘‘(B) 1.5 percent. 

17 ‘‘(3) DURATION.—Each loan under this section 

18 shall be made for a period of 20 years or less, at the 

19 option of the borrower. 

20 ‘‘(4) REPAYMENT.—Each borrower of a loan 

21 under this section shall repay the loan to the Sec22 retary in equal annual installments. 

23 ‘‘(5) NATURE OF RETAINED SECURITY INTER24 EST.—The Secretary shall retain an interest in each 
396 

†S 3240 ES

1 farm acquired with a loan made under this section 

2 that shall— 

3 ‘‘(A) be secured by the farm; 

4 ‘‘(B) be junior only to such interests in the 

5 farm as may be conveyed at the time of acquisi6 tion to the person (including a lender) from 

7 whom the borrower obtained a loan used to ac8 quire the farm; and 

9 ‘‘(C) require the borrower to obtain the 

10 permission of the Secretary before the borrower 

11 may grant an additional security interest in the 

12 farm. 

13 ‘‘(c) LIMITATIONS.— 

14 ‘‘(1) BORROWERS REQUIRED TO MAKE MIN15 IMUM DOWN PAYMENT.—The Secretary shall not 

16 make a loan under this section to any borrower with 

17 respect to a farm if the contribution of the borrower 

18 to the down payment on the farm will be less than 

19 5 percent of the purchase price of the farm. 

20 ‘‘(2) PROHIBITED TYPES OF FINANCING.—The 

21 Secretary shall not make a loan under this section 

22 with respect to a farm if the farm is to be acquired 

23 with other financing that contains any of the fol24 lowing conditions: 
397 

†S 3240 ES

1 ‘‘(A) The financing is to be amortized over 

2 a period of less than 30 years. 

3 ‘‘(B) A balloon payment will be due on the 

4 financing during the 20-year period beginning 

5 on the date on which the loan is to be made by 

6 the Secretary. 

7 ‘‘(d) ADMINISTRATION.—In carrying out this section, 

8 the Secretary shall, to the maximum extent practicable— 

9 ‘‘(1) facilitate the transfer of farms from retir10 ing farmers to persons eligible for insured loans 

11 under this subtitle; 

12 ‘‘(2) make efforts to widely publicize the avail13 ability of loans under this section among— 

14 ‘‘(A) potentially eligible recipients of the 

15 loans; 

16 ‘‘(B) retiring farmers; and 

17 ‘‘(C) applicants for farm ownership loans 

18 under this chapter; 

19 ‘‘(3) encourage retiring farmers to assist in the 

20 sale of their farms to qualified beginning farmers 

21 and socially disadvantaged farmers providing seller 

22 financing; 

23 ‘‘(4) coordinate the loan program established by 

24 this section with State programs that provide farm 
398 

†S 3240 ES

1 ownership or operating loans for beginning farmers 

2 or socially disadvantaged farmers; and 

3 ‘‘(5) establish annual performance goals to pro4 mote the use of the down payment loan program and 

5 other joint financing arrangements as the preferred 

6 choice for direct real estate loans made by any lend7 er to a qualified beginning farmer or socially dis8 advantaged farmer. 

9 ‘‘SEC. 3108. BEGINNING FARMER AND SOCIALLY DISADVAN10 TAGED FARMER CONTRACT LAND SALES 

11 PROGRAM. 

12 ‘‘(a) IN GENERAL.—The Secretary shall, in accord13 ance with this section, guarantee a loan made by a private 

14 seller of a farm to a qualified beginning farmer or socially 

15 disadvantaged farmer on a contract land sales basis. 

16 ‘‘(b) ELIGIBILITY.—To be eligible for a loan guar17 antee under subsection (a)— 

18 ‘‘(1) the qualified beginning farmer or socially 

19 disadvantaged farmer shall— 

20 ‘‘(A) on the date the contract land sale 

21 that is subject of the loan is complete, own and 

22 operate the farm that is the subject of the con23 tract land sale; 

24 ‘‘(B) have a credit history that— 
399 

†S 3240 ES

1 ‘‘(i) includes a record of satisfactory 

2 debt repayment, as determined by the Sec3 retary; and 

4 ‘‘(ii) is acceptable to the Secretary; 

5 and 

6 ‘‘(C) demonstrate to the Secretary that the 

7 farmer is unable to obtain sufficient credit with8 out a guarantee to finance any actual need of 

9 the farmer at a reasonable rate or term; and 

10 ‘‘(2) the loan shall meet applicable underwriting 

11 criteria, as determined by the Secretary. 

12 ‘‘(c) LIMITATIONS.—The Secretary shall not provide 

13 a loan guarantee under subsection (a) if— 

14 ‘‘(1) the contribution of the qualified beginning 

15 farmer or socially disadvantaged farmer to the down 

16 payment for the farm that is the subject of the con17 tract land sale would be less than 5 percent of the 

18 purchase price of the farm; or 

19 ‘‘(2) the purchase price or the appraisal value 

20 of the farm that is the subject of the contract land 

21 sale is greater than $500,000. 

22 ‘‘(d) PERIOD OF GUARANTEE.—A loan guarantee 

23 under this section shall be in effect for the 10-year period 

24 beginning on the date on which the guarantee is provided. 

25 ‘‘(e) GUARANTEE PLAN.— 
400 

†S 3240 ES

1 ‘‘(1) SELECTION OF PLAN.—A private seller of 

2 a farm who makes a loan guaranteed by the Sec3 retary under subsection (a) may select— 

4 ‘‘(A) a prompt payment guarantee plan, 

5 which shall cover— 

6 ‘‘(i) 3 amortized annual installments; 

7 or 

8 ‘‘(ii) an amount equal to 3 annual in9 stallments (including an amount equal to 

10 the total cost of any tax and insurance in11 curred during the period covered by the 

12 annual installments); or 

13 ‘‘(B) a standard guarantee plan, which 

14 shall cover an amount equal to 90 percent of 

15 the outstanding principal of the loan. 

16 ‘‘(2) ELIGIBILITY FOR STANDARD GUARANTEE

17 PLAN.—To be eligible for a standard guarantee plan 

18 referred to in paragraph (1)(B), a private seller 

19 shall— 

20 ‘‘(A) secure a commercial lending institu21 tion or similar entity, as determined by the Sec22 retary, to serve as an escrow agent; or 

23 ‘‘(B) in cooperation with the farmer, use 

24 an appropriate alternate arrangement, as deter25 mined by the Secretary. 
401 

†S 3240 ES

1 ‘‘CHAPTER 2—OPERATING LOANS 

2 ‘‘SEC. 3201. OPERATING LOANS. 

3 ‘‘(a) IN GENERAL.—The Secretary may make or 

4 guarantee an operating loan under this chapter to an eligi5 ble farmer in the United States. 

6 ‘‘(b) ELIGIBILITY.—A farmer shall be eligible under 

7 subsection (a) only— 

8 ‘‘(1) if the farmer, or an individual holding a 

9 majority interest in the farmer— 

10 ‘‘(A) is a citizen of the United States; and 

11 ‘‘(B) has training or farming experience 

12 that the Secretary determines is sufficient to 

13 ensure a reasonable prospect of success in the 

14 farming operation proposed by the farmer; 

15 ‘‘(2) in the case of a farmer that is an indi16 vidual, if the farmer is or proposes to become an op17 erator of a farm that is not larger than a family 

18 farm; 

19 ‘‘(3) in the case of a farmer that is a coopera20 tive, corporation, partnership, trust, limited liability 

21 company, joint operation, or other such legal entity 

22 as the Secretary determines to be appropriate, with 

23 respect to the entity and each farm in which the en24 tity has an ownership or operator interest— 

25 ‘‘(A) if— 
402 

†S 3240 ES

1 ‘‘(i) a majority interest is held by in2 dividuals who are related by blood or mar3 riage, as defined by the Secretary; 

4 ‘‘(ii) all of the individuals are or pro5 pose to become owners or operators of a 

6 farm that is not larger than a family farm; 

7 and 

8 ‘‘(iii) at least 1 of the individuals is or 

9 proposes to become an operator of the 

10 farm; or 

11 ‘‘(B) if— 

12 ‘‘(i) the entire interest is held by indi13 viduals who are related by blood or mar14 riage, as defined by the Secretary; 

15 ‘‘(ii) all of the individuals are or pro16 pose to become farm operators; and 

17 ‘‘(iii) the ownership interest of each 

18 individual separately constitutes not larger 

19 than a family farm, even if the ownership 

20 interests of the individuals collectively con21 stitute larger than a family farm; 

22 ‘‘(4) in the case of an operator described in 

23 paragraph (3) that is owned, in whole or in part by 

24 1 or more other entities, if not less than 75 percent 

25 of the ownership interests of each other entity is 
403 

†S 3240 ES

1 owned directly or indirectly by 1 or more individuals 

2 who own the family farm; and 

3 ‘‘(5) if the farmer and each individual that 

4 holds a majority interest in the farmer is unable to 

5 obtain credit elsewhere. 

6 ‘‘(c) DIRECT LOANS.— 

7 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

8 the Secretary may make a direct loan under this 

9 chapter only to a farmer who— 

10 ‘‘(A) is a qualified beginning farmer; 

11 ‘‘(B) has not received a previous direct op12 erating loan made under this chapter; or 

13 ‘‘(C) has not received a direct operating 

14 loan made under this chapter for a total of 7 

15 years, less 1 year for every 3 consecutive years 

16 the farmer did not receive a direct operating 

17 loan after the year in which the borrower ini18 tially received a direct operating loan under this 

19 chapter, as determined by the Secretary. 

20 ‘‘(2) YOUTH LOANS.—In this subsection, the 

21 term ‘direct operating loan’ shall not include a loan 

22 made to a youth under subsection (d). 

23 ‘‘(3) TRANSITION RULE.—If, as of April 4, 

24 1996, a farmer has received a direct operating loan 

25 under this chapter during each of 4 or more pre-
404 

†S 3240 ES

1 vious years, the borrower shall be eligible to receive 

2 a direct operating loan under this chapter during 3 

3 additional years after April 4, 1996. 

4 ‘‘(4) WAIVERS.— 

5 ‘‘(A) FARM OPERATIONS ON TRIBAL

6 LAND.—The Secretary shall waive the limita7 tion under paragraph (1)(C) or (3) for a direct 

8 loan made under this chapter to a farmer whose 

9 farm land is subject to the jurisdiction of an In10 dian tribe and whose loan is secured by 1 or 

11 more security instruments that are subject to 

12 the jurisdiction of an Indian tribe if the Sec13 retary determines that commercial credit is not 

14 generally available for such farm operations. 

15 ‘‘(B) OTHER FARM OPERATIONS.—On a 

16 case-by-case determination not subject to ad17 ministrative appeal, the Secretary may grant a 

18 borrower a waiver, 1 time only for a period of 

19 2 years, of the limitation under paragraph 

20 (1)(C) or (3) for a direct operating loan if the 

21 borrower demonstrates to the satisfaction of the 

22 Secretary that— 

23 ‘‘(i) the borrower has a viable farm 

24 operation; 
405 

†S 3240 ES

1 ‘‘(ii) the borrower applied for commer2 cial credit from at least 2 commercial lend3 ers; 

4 ‘‘(iii) the borrower was unable to ob5 tain a commercial loan (including a loan 

6 guaranteed by the Secretary); and 

7 ‘‘(iv) the borrower successfully has 

8 completed, or will complete within 1 year, 

9 borrower training under section 3419 

10 (from which requirement the Secretary 

11 shall not grant a waiver under section 

12 3419(f)). 

13 ‘‘(d) YOUTH LOANS.— 

14 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

15 (b), except for citizenship and credit requirements, a 

16 loan may be made under this chapter to a youth who 

17 is a rural resident to enable the youth to operate an 

18 enterprise in connection with the participation in a 

19 youth organization, as determined by the Secretary. 

20 ‘‘(2) FULL PERSONAL LIABILITY.—A youth re21 ceiving a loan under this subsection who executes a 

22 promissory note for the loan shall incur full personal 

23 liability for the indebtedness evidenced by the note, 

24 in accordance with the terms of the note, free of any 

25 disability of minority. 
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1 ‘‘(3) COSIGNER.—The Secretary may accept the 

2 personal liability of a cosigner of a promissory note 

3 for a loan under this subsection, in addition to the 

4 personal liability of the youth borrower. 

5 ‘‘(4) YOUTH ENTERPRISES NOT FARMING.—The 

6 operation of an enterprise by a youth under this 

7 subsection shall not be considered the operation of 

8 a farm under this subtitle. 

9 ‘‘(e) PILOT LOAN PROGRAM TO SUPPORT HEALTHY

10 FOODS FOR THE HUNGRY.— 

11 ‘‘(1) DEFINITION OF GLEANER.—In this sub12 section, the term ‘gleaner’ means an entity that— 

13 ‘‘(A) collects edible, surplus food that 

14 would be thrown away and distributes the food 

15 to agencies or nonprofit organizations that feed 

16 the hungry; or 

17 ‘‘(B) harvests for free distribution to the 

18 needy, or for donation to agencies or nonprofit 

19 organizations for ultimate distribution to the 

20 needy, an agricultural crop that has been do21 nated by the owner of the crop. 

22 ‘‘(2) PROGRAM.—Not later than 180 days after 

23 the date of enactment of this subsection, the Sec24 retary shall establish, within the operating loan pro25 gram established under this chapter, a pilot program 
407 

†S 3240 ES

1 under which the Secretary makes loans available to 

2 eligible entities to assist the entities in providing 

3 food to the hungry. 

4 ‘‘(3) ELIGIBILITY.—In addition to any other 

5 person eligible under the terms and conditions of the 

6 operating loan program established under this chap7 ter, gleaners shall be eligible to receive loans under 

8 this subsection. 

9 ‘‘(4) LOAN AMOUNT.— 

10 ‘‘(A) IN GENERAL.—Each loan issued 

11 under the program shall be in an amount of not 

12 less than $500 and not more than $5,000. 

13 ‘‘(B) REDISTRIBUTION.—If the eligible re14 cipients in a State do not use the full allocation 

15 of loans that are available to eligible recipients 

16 in the State under this subsection, the Sec17 retary may use any unused amounts to make 

18 loans available to eligible entities in other 

19 States in accordance with this subsection. 

20 ‘‘(5) LOAN PROCESSING.— 

21 ‘‘(A) IN GENERAL.—The Secretary shall 

22 process any loan application submitted under 

23 the program not later than 30 days after the 

24 date on which the application was submitted. 
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1 ‘‘(B) EXPEDITING APPLICATIONS.—The 

2 Secretary shall take any measure the Secretary 

3 determines necessary to expedite any applica4 tion submitted under the program. 

5 ‘‘(6) PAPERWORK REDUCTION.—The Secretary 

6 shall take measures to reduce any paperwork re7 quirements for loans under the program. 

8 ‘‘(7) PROGRAM INTEGRITY.—The Secretary 

9 shall take such actions as are necessary to ensure 

10 the integrity of the program established under this 

11 subsection. 

12 ‘‘(8) MAXIMUM AMOUNT.—Of funds that are 

13 made available to carry out this chapter, the Sec14 retary shall use to carry out this subsection a total 

15 amount of not more than $500,000. 

16 ‘‘(9) REPORT.—Not later than 180 days after 

17 the maximum amount of funds are used to carry out 

18 this subsection under paragraph (8), the Secretary 

19 shall submit to the Committee on Agriculture of the 

20 House of Representatives and the Committee on Ag21 riculture, Nutrition, and Forestry of the Senate a 

22 report that describes the results of the pilot program 

23 and the feasibility of expanding the program. 
409 

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1 ‘‘SEC. 3202. PURPOSES OF LOANS. 

2 ‘‘(a) DIRECT LOANS.—A direct loan may be made 

3 under this chapter only— 

4 ‘‘(1) to pay the costs incident to reorganizing a 

5 farm for more profitable operation; 

6 ‘‘(2) to purchase livestock, poultry, or farm 

7 equipment; 

8 ‘‘(3) to purchase feed, seed, fertilizer, insecti9 cide, or farm supplies, or to meet other essential 

10 farm operating expenses, including cash rent; 

11 ‘‘(4) to finance land or water development, use, 

12 or conservation; 

13 ‘‘(5) to pay loan closing costs; 

14 ‘‘(6) to assist a farmer in changing the equip15 ment, facilities, or methods of operation of a farm 

16 to comply with a standard promulgated under sec17 tion 6 of the Occupational Safety and Health Act of 

18 1970 (29 U.S.C. 655) or a standard adopted by a 

19 State under a plan approved under section 18 of 

20 that Act (29 U.S.C. 667), if the Secretary deter21 mines that without assistance under this paragraph 

22 the farmer is likely to suffer substantial economic in23 jury in complying with the standard; 

24 ‘‘(7) to train a limited-resource borrower receiv25 ing a loan under section 3106 in maintaining 

26 records of farming operations; 
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1 ‘‘(8) to train a borrower under section 3419; 

2 ‘‘(9) to refinance the indebtedness of a bor3 rower, if the borrower— 

4 ‘‘(A) has refinanced a loan under this 

5 chapter not more than 4 times previously; and 

6 ‘‘(B)(i) is a direct loan borrower under this 

7 title at the time of the refinancing and has suf8 fered a qualifying loss because of a natural or 

9 major disaster or emergency; or 

10 ‘‘(ii) is refinancing a debt obtained from a 

11 creditor other than the Secretary; or 

12 ‘‘(10) to provide other farm or home needs, in13 cluding family subsistence. 

14 ‘‘(b) GUARANTEED LOANS.—A loan may be guaran15 teed under this chapter only— 

16 ‘‘(1) to pay the costs incident to reorganizing a 

17 farm for more profitable operation; 

18 ‘‘(2) to purchase livestock, poultry, or farm 

19 equipment; 

20 ‘‘(3) to purchase feed, seed, fertilizer, insecti21 cide, or farm supplies, or to meet other essential 

22 farm operating expenses, including cash rent; 

23 ‘‘(4) to finance land or water development, use, 

24 or conservation; 

25 ‘‘(5) to refinance indebtedness; 
411 

†S 3240 ES

1 ‘‘(6) to pay loan closing costs; 

2 ‘‘(7) to assist a farmer in changing the equip3 ment, facilities, or methods of operation of a farm 

4 to comply with a standard promulgated under sec5 tion 6 of the Occupational Safety and Health Act of 

6 1970 (29 U.S.C. 655) or a standard adopted by a 

7 State under a plan approved under section 18 of 

8 that Act (29 U.S.C. 667), if the Secretary deter9 mines that without assistance under this paragraph 

10 the farmer is likely to suffer substantial economic in11 jury due to compliance with the standard; 

12 ‘‘(8) to train a borrower under section 3419; or 

13 ‘‘(9) to provide other farm or home needs, in14 cluding family subsistence. 

15 ‘‘(c) HAZARD INSURANCE REQUIREMENT.—The Sec16 retary may not make a loan to a farmer under this chapter 

17 unless the farmer has, or agrees to obtain, hazard insur18 ance on the property to be acquired with the loan. 

19 ‘‘(d) PRIVATE RESERVE.— 

20 ‘‘(1) IN GENERAL.—Notwithstanding any other 

21 provision of this title, the Secretary may reserve a 

22 portion of any loan made under this chapter to be 

23 placed in an unsupervised bank account that may be 

24 used at the discretion of the borrower for the basic 
412 

†S 3240 ES

1 family needs of the borrower and the immediate 

2 family of the borrower. 

3 ‘‘(2) LIMIT ON SIZE OF THE RESERVE.—The 

4 size of the reserve shall not exceed the lesser of— 

5 ‘‘(A) 10 percent of the loan; 

6 ‘‘(B) $5,000; or 

7 ‘‘(C) the amount needed to provide for the 

8 basic family needs of the borrower and the im9 mediate family of the borrower for 3 calendar 

10 months. 

11 ‘‘SEC. 3203. RESTRICTIONS ON LOANS. 

12 ‘‘(a) REQUIREMENTS.— 

13 ‘‘(1) IN GENERAL.—The Secretary may not 

14 make or guarantee a loan under this chapter— 

15 ‘‘(A) that would cause the total principal 

16 indebtedness outstanding at any 1 time for 

17 loans made under this chapter to any 1 bor18 rower to exceed— 

19 ‘‘(i)(I) in the case of a loan made by 

20 the Secretary, $300,000; or 

21 ‘‘(II) in the case of a loan guaranteed 

22 by the Secretary, $700,000 (as modified 

23 under paragraph (2)); or 
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†S 3240 ES

1 ‘‘(B) for the purchasing or leasing of land 

2 other than for cash rent, or for carrying on a 

3 land leasing or land purchasing program. 

4 ‘‘(2) MODIFICATION.—The amount specified in 

5 paragraph (1)(A)(ii) shall be— 

6 ‘‘(A) increased, beginning with fiscal year 

7 2000, by the inflation percentage applicable to 

8 the fiscal year in which the loan is guaranteed; 

9 and 

10 ‘‘(B) reduced by the unpaid indebtedness 

11 of the borrower on loans under sections speci12 fied in section 3104 that are guaranteed by the 

13 Secretary. 

14 ‘‘(b) INFLATION PERCENTAGE.—For purposes of this 

15 section, the inflation percentage applicable to a fiscal year 

16 is the percentage (if any) by which— 

17 ‘‘(1) the average of the Prices Paid By Farmers 

18 Index (as compiled by the National Agricultural Sta19 tistics Service of the Department) for the 12-month 

20 period ending on August 31 of the immediately pre21 ceding fiscal year; exceeds 

22 ‘‘(2) the average of that index (as so defined) 

23 for the 12-month period ending on August 31, 1996. 
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1 ‘‘SEC. 3204. TERMS OF LOANS. 

2 ‘‘(a) PERSONAL LIABILITY.—A borrower of a loan 

3 made under this chapter shall secure the loan with the 

4 full personal liability of the borrower and such other secu5 rity as the Secretary may prescribe. 

6 ‘‘(b) INTEREST RATES.— 

7 ‘‘(1) MAXIMUM RATE.— 

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

9 paragraphs (2) and (3), the interest rate on a 

10 loan made under this chapter (other than a 

11 guaranteed loan) shall be determined by the 

12 Secretary at a rate not to exceed the sum ob13 tained by adding— 

14 ‘‘(i) the current average market yield 

15 on outstanding marketable obligations of 

16 the United States with remaining periods 

17 to maturity comparable to the average ma18 turity of the loan; and 

19 ‘‘(ii) an additional charge not to ex20 ceed 1 percent, as determined by the Sec21 retary. 

22 ‘‘(B) ADJUSTMENT.—The sum obtained 

23 under subparagraph (A) shall be adjusted to 

the nearest 1 24 ⁄8 of 1 percent. 

25 ‘‘(2) GUARANTEED LOAN.—The interest rate on 

26 a guaranteed loan made under this chapter shall be 
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†S 3240 ES

1 such rate as may be agreed on by the borrower and 

2 the lender, but may not exceed any rate prescribed 

3 by the Secretary. 

4 ‘‘(3) LOW INCOME LOAN.—The interest rate on 

5 a direct loan made under this chapter to a low-in6 come, limited-resource borrower shall be determined 

7 by the Secretary at a rate that is not— 

8 ‘‘(A) greater than the sum obtained by 

9 adding— 

10 ‘‘(i) an amount that does not exceed 

1 11 ⁄2 of the current average market yield on 

12 outstanding marketable obligations of the 

13 United States with a maturity of 5 years; 

14 and 

15 ‘‘(ii) an amount not to exceed 1 per16 cent per year, as the Secretary determines 

17 is appropriate; or 

18 ‘‘(B) less than 5 percent per year. 

19 ‘‘(c) PERIOD FOR REPAYMENT.—The period for re20 payment of a loan made under this chapter may not ex21 ceed 7 years. 

22 ‘‘(d) LINE-OF-CREDIT LOANS.— 

23 ‘‘(1) IN GENERAL.—A loan made or guaranteed 

24 by the Secretary under this chapter may be in the 

25 form of a line-of-credit loan. 
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1 ‘‘(2) TERM.—A line-of-credit loan under para2 graph (1) shall terminate not later than 5 years 

3 after the date that the loan is made or guaranteed. 

4 ‘‘(3) ELIGIBILITY.—For purposes of deter5 mining eligibility for an operating loan under this 

6 chapter, each year during which a farmer takes an 

7 advance or draws on a line-of-credit loan the farmer 

8 shall be considered as having received an operating 

9 loan for 1 year. 

10 ‘‘(4) TERMINATION OF DELINQUENT LOANS.— 

11 If a borrower does not pay an installment on a line12 of-credit loan on schedule, the borrower may not 

13 take an advance or draw on the line-of-credit, unless 

14 the Secretary determines that— 

15 ‘‘(A) the failure of the borrower to pay on 

16 schedule was due to unusual conditions that the 

17 borrower could not control; and 

18 ‘‘(B) the borrower will reduce the line-of19 credit balance to the scheduled level at the end 

20 of— 

21 ‘‘(i) the production cycle; or 

22 ‘‘(ii) the marketing of the agricultural 

23 products of the borrower. 

24 ‘‘(5) AGRICULTURAL COMMODITIES.—A line-of25 credit loan may be used to finance the production or 
417 

†S 3240 ES

1 marketing of an agricultural commodity that is eligi2 ble for a price support program of the Department. 

3 ‘‘CHAPTER 3—EMERGENCY LOANS 

4 ‘‘SEC. 3301. EMERGENCY LOANS. 

5 ‘‘(a) IN GENERAL.—The Secretary shall make or 

6 guarantee an emergency loan under this chapter to an eli7 gible farmer (including a commercial fisherman) only to 

8 the extent and in such amounts as provided in advance 

9 in appropriation Acts. 

10 ‘‘(b) ELIGIBILITY.—An established farmer shall be 

11 eligible under subsection (a) only— 

12 ‘‘(1) if the farmer or an individual holding a 

13 majority interest in the farmer— 

14 ‘‘(A) is a citizen of the United States; and 

15 ‘‘(B) has experience and resources that the 

16 Secretary determines are sufficient to ensure a 

17 reasonable prospect of success in the farming 

18 operation proposed by the farmer; 

19 ‘‘(2) in the case of a farmer that is an indi20 vidual, if the farmer is— 

21 ‘‘(A) in the case of a loan for a purpose 

22 under chapter 1, an owner, operator, or lessee23 operator described in section 3101(b)(2); and 
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†S 3240 ES

1 ‘‘(B) in the case of a loan for a purpose 

2 under chapter 2, an operator of a farm that is 

3 not larger than a family farm; 

4 ‘‘(3) in the case of a farmer that is a coopera5 tive, corporation, partnership, trust, limited liability 

6 company, joint operation, or such other legal entity 

7 as the Secretary determines to be appropriate, with 

8 respect to the entity and each farm in which the en9 tity has an ownership or operator interest— 

10 ‘‘(A) if— 

11 ‘‘(i) a majority interest is held by in12 dividuals who are related by blood or mar13 riage, as defined by the Secretary; 

14 ‘‘(ii) all of the individuals are or pro15 pose to become owners or operators of a 

16 farm that is not larger than a family farm; 

17 and 

18 ‘‘(iii) at least 1 of the individuals is or 

19 proposes to become an operator of the 

20 farm; or 

21 ‘‘(B) if— 

22 ‘‘(i) the entire interest is held by indi23 viduals who are related by blood or mar24 riage, as defined by the Secretary; 
419 

†S 3240 ES

1 ‘‘(ii) all of the individuals are or pro2 pose to become farm operators; and 

3 ‘‘(iii) the ownership interest of each 

4 individual separately constitutes not larger 

5 than a family farm, even if the ownership 

6 interests of the individuals collectively con7 stitute larger than a family farm; 

8 ‘‘(4) if the entity is owned, in whole or in part, 

9 by 1 or more other entities and each individual who 

10 is an owner of the family farm involved has a direct 

11 or indirect ownership interest in each of the other 

12 entities; 

13 ‘‘(5) if the farmer and any individual that holds 

14 a majority interest in the farmer is unable to obtain 

15 credit elsewhere; and 

16 ‘‘(6)(A) if the Secretary finds that the oper17 ations of the farmer have been substantially affected 

18 by— 

19 ‘‘(i) a natural or major disaster or emer20 gency designated by the President under the 

21 Robert T. Stafford Disaster Relief and Emer22 gency Assistance Act (42 U.S.C. 5121 et seq.); 

23 or 

24 ‘‘(ii) a quarantine imposed by the Sec25 retary under the Plant Protection Act (7 U.S.C. 
420 

†S 3240 ES

1 7701 et seq.) or the Animal Health Protection 

2 Act (7 U.S.C. 8301 et seq.); or 

3 ‘‘(B) if the farmer conducts farming operations 

4 in a county or a county contiguous to a county in 

5 which the Secretary has found that farming oper6 ations have been substantially affected by a natural 

7 or major disaster or emergency. 

8 ‘‘(c) TIME FOR ACCEPTING AN APPLICATION.—The 

9 Secretary shall accept an application for a loan under this 

10 chapter from a farmer at any time during the 8-month 

11 period beginning on the date that— 

12 ‘‘(1) the Secretary determines that farming op13 erations of the farmer have been substantially af14 fected by— 

15 ‘‘(A) a quarantine imposed by the Sec16 retary under the Plant Protection Act (7 U.S.C. 

17 7701 et seq.) or the Animal Health Protection 

18 Act (7 U.S.C. 8301 et seq.); or 

19 ‘‘(B) a natural disaster; or 

20 ‘‘(2) the President makes a major disaster or 

21 emergency designation with respect to the affected 

22 county of the farmer referred to in subsection 

23 (b)(5)(B). 

24 ‘‘(d) HAZARD INSURANCE REQUIREMENT.—The Sec25 retary may not make a loan to a farmer under this chapter 
421 

†S 3240 ES

1 to cover a property loss unless the farmer had hazard in2 surance that insured the property at the time of the loss. 

3 ‘‘(e) FAMILY FARM.—The Secretary shall conduct 

4 the loan program under this chapter in a manner that will 

5 foster and encourage the family farm system of agri6 culture, consistent with the reaffirmation of policy and 

7 declaration of the intent of Congress contained in section 

8 102(a) of the Food and Agriculture Act of 1977 (7 U.S.C. 

9 2266(a)). 

10 ‘‘SEC. 3302. PURPOSES OF LOANS. 

11 ‘‘Subject to the limitations on the amounts of loans 

12 provided in section 3303(a), a loan may be made or guar13 anteed under this chapter for— 

14 ‘‘(1) any purpose authorized for a loan under 

15 chapter 1 or 2; and 

16 ‘‘(2) crop or livestock purposes that are— 

17 ‘‘(A) necessitated by a quarantine, natural 

18 disaster, major disaster, or emergency; and 

19 ‘‘(B) considered desirable by the farmer. 

20 ‘‘SEC. 3303. TERMS OF LOANS. 

21 ‘‘(a) MAXIMUM AMOUNT OF LOAN.—The Secretary 

22 may not make or guarantee a loan under this chapter to 

23 a borrower who has suffered a loss in an amount that— 

24 ‘‘(1) exceeds the actual loss caused by a dis25 aster; or 
422 

†S 3240 ES

1 ‘‘(2) would cause the total indebtedness of the 

2 borrower under this chapter to exceed $500,000. 

3 ‘‘(b) INTEREST RATES.—Any portion of a loan under 

4 this chapter up to the amount of the actual loss suffered 

5 by a farmer caused by a disaster shall be at a rate pre6 scribed by the Secretary, but not in excess of 8 percent 

7 per annum. 

8 ‘‘(c) INTEREST SUBSIDIES FOR GUARANTEED

9 LOANS.—In the case of a guaranteed loan under this 

10 chapter, the Secretary may pay an interest subsidy to the 

11 lender for any portion of the loan up to the amount of 

12 the actual loss suffered by a farmer caused by a disaster. 

13 ‘‘(d) TIME FOR REPAYMENT.— 

14 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a 

15 loan under this chapter shall be repayable at such 

16 times as the Secretary may determine, considering 

17 the purpose of the loan and the nature and effect of 

18 the disaster, but not later than the maximum repay19 ment period allowed for a loan for a similar purpose 

20 under chapters 1 and 2. 

21 ‘‘(2) EXTENDED REPAYMENT PERIOD.—The 

22 Secretary may, if the loan is for a purpose described 

23 in chapter 2 and the Secretary determines that the 

24 need of the loan applicant justifies the longer repay25 ment period, make the loan repayable at the end of 
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†S 3240 ES

1 a period of more than 7 years, but not more than 

2 20 years. 

3 ‘‘(e) SECURITY FOR LOAN.— 

4 ‘‘(1) IN GENERAL.—A borrower of a loan made 

5 under this chapter shall secure the loan with the full 

6 personal liability of the borrower and such other se7 curity as the Secretary may prescribe. 

8 ‘‘(2) ADEQUATE SECURITY.—Subject to para9 graph (3), the Secretary may not make or guarantee 

10 a loan under this chapter unless the security for the 

11 loan is adequate to ensure repayment of the loan. 

12 ‘‘(3) INADEQUATE SECURITY DUE TO DIS13 ASTER.—If adequate security for a loan under this 

14 chapter is not available because of a disaster, the 

15 Secretary shall accept as security any collateral that 

16 is available if the Secretary is confident that the col17 lateral and the repayment ability of the farmer are 

18 adequate security for the loan. 

19 ‘‘(4) VALUATION OF FARM ASSETS.—If a farm 

20 asset (including land, livestock, or equipment) is 

21 used as collateral to secure a loan applied for under 

22 this chapter and the governor of the State in which 

23 the farm is located requests assistance under this 

24 chapter or the Robert T. Stafford Disaster Relief 

25 and Emergency Assistance Act (42 U.S.C. 5121 et 
424 

†S 3240 ES

1 seq.) for the portion of the State in which the asset 

2 is located, the Secretary shall establish the value of 

3 the asset as of the day before the occurrence of the 

4 natural or major disaster or emergency. 

5 ‘‘(f) REVIEW OF LOAN.— 

6 ‘‘(1) IN GENERAL.—In the case of a loan made, 

7 but not guaranteed, under section 3301, the Sec8 retary shall review the loan 3 years after the loan 

9 is made, and every 2 years thereafter for the term 

10 of the loan. 

11 ‘‘(2) TERMINATION OF FEDERAL ASSIST12 ANCE.—If, based on a review under paragraph (1), 

13 the Secretary determines that the borrower is able to 

14 obtain a loan from a non-Federal source at reason15 able rates and terms, the borrower shall, on request 

16 by the Secretary, apply for, and accept, a non-Fed17 eral loan in a sufficient amount to repay the Sec18 retary. 

19 ‘‘SEC. 3304. PRODUCTION LOSSES. 

20 ‘‘(a) IN GENERAL.—The Secretary shall make or 

21 guarantee a loan under this chapter to an eligible farmer 

22 for production losses if a single enterprise that constitutes 

23 a basic part of the farming operation of the farmer has 

24 sustained at least a 30 percent loss in normal per acre 
425 

†S 3240 ES

1 or per animal production, or such lesser percentage as the 

2 Secretary may determine, as a result of a disaster. 

3 ‘‘(b) BASIS FOR PERCENTAGE.—A percentage loss 

4 under subsection (a) shall be based on the average month5 ly price in effect for the previous crop or calendar year, 

6 as appropriate. 

7 ‘‘(c) AMOUNT OF LOAN.—A loan under subsection 

8 (a) shall be in an amount that is equal to 80 percent, or 

9 such greater percentage as the Secretary may determine, 

10 of the total calculated actual production loss sustained by 

11 the farmer. 

12 ‘‘CHAPTER 4—GENERAL FARMER LOAN 

13 PROVISIONS 

14 ‘‘SEC. 3401. AGRICULTURAL CREDIT INSURANCE FUND. 

15 ‘‘The fund established pursuant to section 11(a) of 

16 the Bankhead-Jones Farm Tenant Act (60 Stat. 1075, 

17 chapter 964) shall be known as the Agricultural Credit 

18 Insurance Fund (referred to in this section as the ‘Fund’, 

19 unless the context otherwise requires) for the discharge 

20 of the obligations of the Secretary under agreements in21 suring loans under this subtitle and loans and mortgages 

22 insured under prior authority. 

23 ‘‘SEC. 3402. GUARANTEED FARMER LOANS. 

24 ‘‘(a) IN GENERAL.—The Secretary may provide fi25 nancial assistance to a borrower for a purpose provided 
426 

†S 3240 ES

1 in this subtitle by guaranteeing a loan made by any Fed2 eral or State chartered bank, savings and loan association, 

3 cooperative lending agency, or other legally organized 

4 lending agency. 

5 ‘‘(b) INTEREST RATE.—The interest rate payable by 

6 a borrower on the portion of a guaranteed loan that is 

7 sold by a lender to the secondary market under this sub8 title may be lower than the interest rate charged on the 

9 portion retained by the lender, but shall not exceed the 

10 average interest rate charged by the lender on loans made 

11 to farm borrowers. 

12 ‘‘(c) FEES.—In the case of a loan guarantee on a 

13 loan made by a commercial or cooperative lender related 

14 to a loan made by the Secretary under section 3107— 

15 ‘‘(1) the Secretary shall not charge a fee to any 

16 person (including a lender); and 

17 ‘‘(2) a lender may charge a loan origination and 

18 servicing fee in an amount not to exceed 1 percent 

19 of the amount of the loan. 

20 ‘‘(d) MAXIMUM GUARANTEE OF 90 PERCENT.—Ex21 cept as provided in subsections (e) and (f), a loan guar22 antee under this subtitle shall be for not more than 90 

23 percent of the principal and interest due on the loan. 

24 ‘‘(e) REFINANCED LOANS GUARANTEED AT 95 PER25 CENT.—The Secretary shall guarantee 95 percent of— 
427 

†S 3240 ES

1 ‘‘(1) in the case of a loan that solely refinances 

2 a direct loan made under this subtitle, the principal 

3 and interest due on the loan on the date of the refi4 nancing; or 

5 ‘‘(2) in the case of a loan that is used for mul6 tiple purposes, the portion of the loan that refi7 nances the principal and interest due on a direct 

8 loan made under this subtitle that is outstanding on 

9 the date the loan is guaranteed. 

10 ‘‘(f) BEGINNING FARMER LOANS GUARANTEED UP

11 TO 95 PERCENT.—The Secretary may guarantee not more 

12 than 95 percent of— 

13 ‘‘(1) a farm ownership loan for acquiring a 

14 farm to a borrower who is participating in the down15 payment loan program under section 3107; or 

16 ‘‘(2) an operating loan to a borrower who is 

17 participating in the downpayment loan program 

18 under section 3107 that is made during the period 

19 that the borrower has a direct loan outstanding 

20 under chapter 1 for acquiring a farm. 

21 ‘‘(g) GUARANTEE OF LOANS MADE UNDER STATE

22 BEGINNING FARMER PROGRAMS.—The Secretary may 

23 guarantee under this subtitle a loan made under a State 

24 beginning farmer program, including a loan financed by 

25 the net proceeds of a qualified small issue agricultural 
428 

†S 3240 ES

1 bond for land or property described in section 

2 144(a)(12)(B)(ii) of the Internal Revenue Code of 1986. 

3 ‘‘SEC. 3403. PROVISION OF INFORMATION TO BORROWERS. 

4 ‘‘(a) APPROVAL NOTIFICATION.—The Secretary shall 

5 approve or disapprove an application for a loan or loan 

6 guarantee made under this subtitle, and notify the appli7 cant of such action, not later than 60 days after the date 

8 on which the Secretary has received a complete application 

9 for the loan or loan guarantee. 

10 ‘‘(b) LIST OF LENDERS.—The Secretary shall make 

11 available to any farmer, on request, a list of lenders in 

12 the area that participate in guaranteed farmer program 

13 loan programs established under this subtitle, and other 

14 lenders in the area that express a desire to participate in 

15 the programs and that request inclusion on the list. 

16 ‘‘(c) OTHER INFORMATION.— 

17 ‘‘(1) IN GENERAL.—On the request of a bor18 rower, the Secretary shall make available to the bor19 rower— 

20 ‘‘(A) a copy of each document signed by 

21 the borrower; 

22 ‘‘(B) a copy of each appraisal performed 

23 with respect to the loan; and 
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†S 3240 ES

1 ‘‘(C) any document that the Secretary is 

2 required to provide to the borrower under any 

3 law in effect on the date of the request. 

4 ‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 

5 shall not supersede any duty imposed on the Sec6 retary by a law in effect on January 5, 1988, unless 

7 the duty directly conflicts with a duty under para8 graph (1). 

9 ‘‘SEC. 3404. NOTICE OF LOAN SERVICE PROGRAMS. 

10 ‘‘(a) REQUIREMENT.—The Secretary shall provide 

11 notice by certified mail to each borrower who is at least 

12 90 days past due on the payment of principal or interest 

13 on a loan made under this subtitle. 

14 ‘‘(b) CONTENTS.—The notice required under sub15 section (a) shall— 

16 ‘‘(1) include a summary of all primary loan 

17 service programs, homestead retention programs, 

18 debt settlement programs, and appeal procedures, 

19 including the eligibility criteria, and terms and con20 ditions of the programs and procedures; 

21 ‘‘(2) include a summary of the manner in which 

22 the borrower may apply, and be considered, for all 

23 such programs, except that the Secretary shall not 

24 require the borrower to select among the programs 
430 

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1 or waive any right to be considered for any program 

2 carried out by the Secretary; 

3 ‘‘(3) advise the borrower regarding all filing re4 quirements and any deadlines that must be met for 

5 requesting loan servicing; 

6 ‘‘(4) provide any relevant forms, including ap7 plicable response forms; 

8 ‘‘(5) advise the borrower that a copy of regula9 tions is available on request; and 

10 ‘‘(6) be designed to be readable and under11 standable by the borrower. 

12 ‘‘(c) CONTAINED IN REGULATIONS.—All notices re13 quired by this section shall be contained in the regulations 

14 issued to carry out this title. 

15 ‘‘(d) TIMING.—The notice described in subsection (b) 

16 shall be provided— 

17 ‘‘(1) at the time an application is made for par18 ticipation in a loan service program; 

19 ‘‘(2) on written request of the borrower; and 

20 ‘‘(3) before the earliest of the date of— 

21 ‘‘(A) initiating any liquidation; 

22 ‘‘(B) requesting the conveyance of security 

23 property; 

24 ‘‘(C) accelerating the loan; 

25 ‘‘(D) repossessing property; 
431 

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1 ‘‘(E) foreclosing on property; or 

2 ‘‘(F) taking any other collection action. 

3 ‘‘(e) CONSIDERATION OF BORROWERS FOR LOAN

4 SERVICE PROGRAMS.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall con6 sider a farmer program loan borrower for all loan 

7 service programs if, not later than 60 days after re8 ceipt of the notice described in subsection (b), the 

9 borrower requests the consideration in writing. 

10 ‘‘(2) PRIORITY.—In considering a borrower for 

11 a loan service program, the Secretary shall place the 

12 highest priority on the preservation of the farming 

13 operations of the borrower. 

14 ‘‘SEC. 3405. PLANTING AND PRODUCTION HISTORY GUIDE15 LINES. 

16 ‘‘(a) IN GENERAL.—The Secretary shall ensure that 

17 appropriate procedures, including, to the extent prac18 ticable, onsite inspections, or use of county or State yield 

19 averages, are used in calculating future yields for an appli20 cant for a loan, when an accurate projection cannot be 

21 made because the past production history of the farmer 

22 has been affected by a natural or major disaster or emer23 gency. 

24 ‘‘(b) CALCULATION OF YIELDS.— 
432 

†S 3240 ES

1 ‘‘(1) IN GENERAL.—For the purpose of aver2 aging the past yields of the farm of a farmer over 

3 a period of crop years to calculate the future yield 

4 of the farm under this title, the Secretary shall per5 mit the farmer to exclude the crop year with the 

6 lowest actual or county average yield for the farm 

7 from the calculation, if the farmer was affected by 

8 a natural or major disaster or emergency during at 

9 least 2 of the crop years during the period. 

10 ‘‘(2) AFFECTED BY A NATURAL OR MAJOR DIS11 ASTER OR EMERGENCY.—A farmer was affected by 

12 a natural or major disaster or emergency under 

13 paragraph (1) if the Secretary finds that the farm14 ing operations of the farmer have been substantially 

15 affected by a natural or major disaster or emer16 gency, including a farmer who has a qualifying loss 

17 but is not located in a designated or declared dis18 aster area. 

19 ‘‘(3) APPLICATION OF SUBSECTION.—This sub20 section shall apply to any action taken by the Sec21 retary that involves— 

22 ‘‘(A) a loan under chapter 1 or 2; and 

23 ‘‘(B) the yield of a farm of a farmer, in24 cluding making a loan or loan guarantee, serv25 icing a loan, or making a credit sale. 
433 

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1 ‘‘SEC. 3406. SPECIAL CONDITIONS AND LIMITATIONS ON 

2 LOANS. 

3 ‘‘(a) APPLICANT REQUIREMENTS.—In connection 

4 with a loan made or guaranteed under this subtitle, the 

5 Secretary shall require— 

6 ‘‘(1) the applicant— 

7 ‘‘(A) to certify in writing that, and the 

8 Secretary shall determine whether, the appli9 cant is unable to obtain credit elsewhere; and 

10 ‘‘(B) to furnish an appropriate written fi11 nancial statement; 

12 ‘‘(2) except for a guaranteed loan, an agree13 ment by the borrower that if at any time it appears 

14 to the Secretary that the borrower may be able to 

15 obtain a loan from a production credit association, 

16 a Federal land bank, or other responsible coopera17 tive or private credit source (or, in the case of a bor18 rower under section 3106, the borrower may be able 

19 to obtain a loan under section 3101), at reasonable 

20 rates and terms for loans for similar purposes and 

21 periods of time, the borrower will, on request by the 

22 Secretary, apply for and accept the loan in a suffi23 cient amount to repay the Secretary or the insured 

24 lender, or both, and to pay for any stock necessary 

25 to be purchased in a cooperative lending agency in 

26 connection with the loan; 
434 

†S 3240 ES

1 ‘‘(3) such provision for supervision of the oper2 ations of the borrower as the Secretary shall con3 sider necessary to achieve the objectives of the loan 

4 and protect the interests of the United States; and 

5 ‘‘(4) the application of a person who is a vet6 eran for a loan under chapter 1 or 2 to be given 

7 preference over a similar application from a person 

8 who is not a veteran if the applications are on file 

9 in a county or area office at the same time. 

10 ‘‘(b) AGENCY PROCESSING REQUIREMENTS.— 

11 ‘‘(1) NOTIFICATIONS.— 

12 ‘‘(A) INCOMPLETE APPLICATION NOTIFICA13 TION.—If an application for a loan or loan 

14 guarantee under this subtitle (other than an op15 erating loan or loan guarantee) is incomplete, 

16 the Secretary shall inform the applicant of the 

17 reasons the application is incomplete not later 

18 than 20 days after the date on which the Sec19 retary has received the application. 

20 ‘‘(B) OPERATING LOANS.— 

21 ‘‘(i) ADDITIONAL INFORMATION

22 NEEDED.—Not later than 10 calendar 

23 days after the Secretary receives an appli24 cation for an operating loan or loan guar25 antee, the Secretary shall notify the appli-
435 

†S 3240 ES

1 cant of any information required before a 

2 decision may be made on the application. 

3 ‘‘(ii) INFORMATION NOT RECEIVED.— 

4 If, not later than 20 calendar days after 

5 the date a request is made pursuant to 

6 clause (i) with respect to an application, 

7 the Secretary has not received the informa8 tion requested, the Secretary shall notify 

9 the applicant and the district office of the 

10 Farm Service Agency, in writing, of the 

11 outstanding information. 

12 ‘‘(C) REQUEST INFORMATION.— 

13 ‘‘(i) IN GENERAL.—On receipt of an 

14 application, the Secretary shall request 

15 from other parties such information as 

16 may be needed in connection with the ap17 plication. 

18 ‘‘(ii) INFORMATION FROM AN AGENCY

19 OF THE DEPARTMENT.—Not later than 15 

20 calendar days after the date on which an 

21 agency of the Department receives a re22 quest for information made pursuant to 

23 subparagraph (A), the agency shall provide 

24 the Secretary with the requested informa25 tion. 
436 

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1 ‘‘(2) REPORT OF PENDING APPLICATIONS.— 

2 ‘‘(A) IN GENERAL.—A county office shall 

3 notify the district office of the Farm Service 

4 Agency of each application for an operating 

5 loan or loan guarantee that is pending more 

6 than 45 days after receipt, and the reasons for 

7 which the application is pending. 

8 ‘‘(B) ACTION ON PENDING APPLICA9 TIONS.—A district office that receives a notice 

10 provided under subparagraph (A) with respect 

11 to an application shall immediately take steps 

12 to ensure that final action is taken on the appli13 cation not later than 15 days after the date of 

14 the receipt of the notice. 

15 ‘‘(C) PENDING APPLICATION REPORT.— 

16 The district office shall report to the State of17 fice of the Farm Service Agency on each appli18 cation for an operating loan or loan guarantee 

19 that is pending more than 45 days after receipt, 

20 and the reasons for which the application is 

21 pending. 

22 ‘‘(D) REPORT TO CONGRESS.—Each 

23 month, the Secretary shall notify the Com24 mittee on Agriculture of the House of Rep25 resentatives and the Committee on Agriculture, 
437 

†S 3240 ES

1 Nutrition, and Forestry of the Senate, on a 

2 State-by-State basis, as to each application for 

3 an operating loan or loan guarantee on which 

4 final action had not been taken within 60 cal5 endar days after receipt by the Secretary, and 

6 the reasons for which final action had not been 

7 taken. 

8 ‘‘(3) DISAPPROVALS.— 

9 ‘‘(A) IN GENERAL.—If an application for a 

10 loan or loan guarantee under this subtitle is 

11 disapproved by the Secretary, the Secretary 

12 shall state the reasons for the disapproval in 

13 the notice required under paragraph (1). 

14 ‘‘(B) DISAPPROVAL DUE TO LACK OF

15 FUNDS.— 

16 ‘‘(i) IN GENERAL.—Notwithstanding 

17 paragraph (1), each application for a loan 

18 or loan guarantee under section 3601(e), 

19 or for a loan under section 3501(a) or 

20 3502(a), that is to be disapproved by the 

21 Secretary solely because the Secretary 

22 lacks the funds necessary to make the loan 

23 or guarantee shall not be disapproved but 

24 shall be placed in pending status. 
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1 ‘‘(ii) RECONSIDERATION.—The Sec2 retary shall retain each pending application 

3 and reconsider the application beginning 

4 on the date that sufficient funds become 

5 available. 

6 ‘‘(iii) NOTIFICATION.—Not later than 

7 60 days after funds become available re8 garding each pending application, the Sec9 retary shall notify the applicant of the ap10 proval or disapproval of funding for the 

11 application. 

12 ‘‘(4) APPROVALS ON APPEAL.—If an application 

13 for a loan or loan guarantee under this subtitle is 

14 disapproved by the Secretary, but that action is sub15 sequently reversed or revised as the result of an ap16 peal within the Department or to the courts of the 

17 United States and the application is returned to the 

18 Secretary for further consideration, the Secretary 

19 shall act on the application and provide the appli20 cant with notice of the action not later than 15 days 

21 after the date of return of the application to the 

22 Secretary. 

23 ‘‘(5) PROVISION OF PROCEEDS.— 

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

25 subparagraph (B), if an application for an in-
439 

†S 3240 ES

1 sured loan under this title is approved by the 

2 Secretary, the Secretary shall provide the loan 

3 proceeds to the applicant not later than 15 days 

4 (or such longer period as the applicant may ap5 prove) after the application for the loan is ap6 proved by the Secretary. 

7 ‘‘(B) LACK OF FUNDS.—If the Secretary is 

8 unable to provide the loan proceeds to the ap9 plicant during the 15-day period described in 

10 subparagraph (A) because sufficient funds are 

11 not available to the Secretary for that purpose, 

12 the Secretary shall provide the loan proceeds to 

13 the applicant as soon as practicable (but in no 

14 event later than 15 days unless the applicant 

15 agrees to a longer period) after sufficient funds 

16 for that purpose become available to the Sec17 retary. 

18 ‘‘SEC. 3407. GRADUATION OF BORROWERS. 

19 ‘‘(a) GRADUATION OF SEASONED DIRECT LOAN

20 BORROWERS TO THE LOAN GUARANTEE PROGRAM.— 

21 ‘‘(1) REVIEW OF LOANS.— 

22 ‘‘(A) IN GENERAL.—The Secretary, or a 

23 contracting third party, shall annually review 

24 under section 3420 the loans of each seasoned 

25 direct loan borrower. 
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1 ‘‘(B) ASSISTANCE.—If, based on the re2 view, it is determined that a borrower would be 

3 able to obtain a loan, guaranteed by the Sec4 retary, from a commercial or cooperative lender 

5 at reasonable rates and terms for loans for 

6 similar purposes and periods of time, the Sec7 retary shall assist the borrower in applying for 

8 the commercial or cooperative loan. 

9 ‘‘(2) PROSPECTUS.— 

10 ‘‘(A) IN GENERAL.—In accordance with 

11 section 3422, the Secretary shall prepare a pro12 spectus on each seasoned direct loan borrower 

13 determined eligible to obtain a guaranteed loan. 

14 ‘‘(B) REQUIREMENTS.—The prospectus 

15 shall contain a description of the amounts of 

16 the loan guarantee and interest assistance that 

17 the Secretary will provide to the seasoned direct 

18 loan borrower to enable the seasoned direct loan 

19 borrower to carry out a financially viable farm20 ing plan if a guaranteed loan is made. 

21 ‘‘(3) VERIFICATION.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 provide a prospectus of a seasoned direct loan 

24 borrower to each approved lender whose lending 
441 

†S 3240 ES

1 area includes the location of the seasoned direct 

2 loan borrower. 

3 ‘‘(B) NOTIFICATION.—The Secretary shall 

4 notify each borrower of a loan that a prospectus 

5 has been provided to a lender under subpara6 graph (A). 

7 ‘‘(C) CREDIT EXTENDED.—If the Sec8 retary receives an offer from an approved lend9 er to extend credit to the seasoned direct loan 

10 borrower under terms and conditions contained 

11 in the prospectus, the seasoned direct loan bor12 rower shall not be eligible for a loan from the 

13 Secretary under chapter 1 or 2, except as other14 wise provided in this section. 

15 ‘‘(4) INSUFFICIENT ASSISTANCE OR OFFERS.— 

16 If the Secretary is unable to provide loan guarantees 

17 and, if necessary, interest assistance to the seasoned 

18 direct loan borrower under this section in amounts 

19 sufficient to enable the seasoned direct loan bor20 rower to borrow from commercial sources the 

21 amount required to carry out a financially viable 

22 farming plan, or if the Secretary does not receive an 

23 offer from an approved lender to extend credit to a 

24 seasoned direct loan borrower under the terms and 

25 conditions contained in the prospectus, the Secretary 
442 

†S 3240 ES

1 shall make a loan to the seasoned direct loan bor2 rower under chapter 1 or 2, whichever is applicable. 

3 ‘‘(5) INTEREST RATE REDUCTIONS.—To the ex4 tent necessary for the borrower to obtain a loan, 

5 guaranteed by the Secretary, from a commercial or 

6 cooperative lender, the Secretary shall provide inter7 est rate reductions as provided for under section 

8 3413. 

9 ‘‘(b) TRANSITION TO PRIVATE COMMERCIAL OR

10 OTHER SOURCES OF CREDIT.— 

11 ‘‘(1) IN GENERAL.—In making an operating or 

12 ownership loan, the Secretary shall establish a plan 

13 and promulgate regulations (including performance 

14 criteria) that promote the goal of transitioning bor15 rowers to private commercial credit and other 

16 sources of credit in the shortest period of time prac17 ticable. 

18 ‘‘(2) COORDINATION.—In carrying out this sec19 tion, the Secretary shall integrate and coordinate the 

20 transition policy described in subsection (a) with— 

21 ‘‘(A) the borrower training program estab22 lished by section 3419; 

23 ‘‘(B) the loan assessment process estab24 lished by section 3420; 
443 

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1 ‘‘(C) the supervised credit requirement es2 tablished by section 3421; 

3 ‘‘(D) the market placement program estab4 lished by section 3422; and 

5 ‘‘(E) other appropriate programs and au6 thorities, as determined by the Secretary. 

7 ‘‘(c) GRADUATION OF BORROWERS WITH OPERATING

8 LOANS OR GUARANTEES TO PRIVATE COMMERCIAL

9 CREDIT.—The Secretary shall establish a plan, in coordi10 nation with activities under sections 3419 through 3422, 

11 to encourage each borrower with an outstanding loan 

12 under this chapter, or with respect to whom there is an 

13 outstanding guarantee under this chapter, to graduate to 

14 private commercial or other sources of credit. 

15 ‘‘SEC. 3408. DEBT ADJUSTMENT AND CREDIT COUNSELING. 

16 ‘‘In carrying out this subtitle, the Secretary may— 

17 ‘‘(1) provide voluntary debt adjustment assist18 ance between— 

19 ‘‘(A) farmers; and 

20 ‘‘(B) the creditors of the farmers; 

21 ‘‘(2) cooperate with State, territorial, and local 

22 agencies and committees engaged in the debt adjust23 ment; and 

24 ‘‘(3) give credit counseling. 
444 

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1 ‘‘SEC. 3409. SECURITY SERVICING. 

2 ‘‘(a) SALE OF PROPERTY.— 

3 ‘‘(1) IN GENERAL.—Subject to this subsection 

4 and subsection (e)(1), the Secretary shall offer to 

5 sell real property that is acquired by the Secretary 

6 under this subtitle using the following order and 

7 method of sale: 

8 ‘‘(A) ADVERTISEMENT.—Not later than 15 

9 days after acquiring real property, the Sec10 retary shall publicly advertise the property for 

11 sale. 

12 ‘‘(B) QUALIFIED BEGINNING FARMER.— 

13 ‘‘(i) IN GENERAL.—Not later than 75 

14 days after acquiring real property, the Sec15 retary shall offer to sell the property to a 

16 qualified beginning farmer or a socially 

17 disadvantaged farmer at current market 

18 value based on a current appraisal. 

19 ‘‘(ii) RANDOM SELECTION.—If more 

20 than 1 qualified beginning farmer or so21 cially disadvantaged farmer offers to pur22 chase the property, the Secretary shall se23 lect between the qualified applicants on a 

24 random basis. 

25 ‘‘(iii) APPEAL OF RANDOM SELEC26 TION.—A random selection or denial by 
445 

†S 3240 ES

1 the Secretary of a qualified beginning 

2 farmer or a socially disadvantaged farmer 

3 for farm inventory property under this 

4 subparagraph shall be final and not admin5 istratively appealable. 

6 ‘‘(C) PUBLIC SALE.—If no acceptable offer 

7 is received from a qualified beginning farmer or 

8 a socially disadvantaged farmer under subpara9 graph (B) not later than 135 days after acquir10 ing the real property, the Secretary shall, not 

11 later than 30 days after the 135-day period, sell 

12 the property after public notice at a public sale, 

13 and, if no acceptable bid is received, by nego14 tiated sale, at the best price obtainable. 

15 ‘‘(2) INTEREST.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), any conveyance of real property 

18 under this subsection shall include all of the in19 terest of the United States in the property, in20 cluding mineral rights. 

21 ‘‘(B) CONSERVATION.—The Secretary may 

22 for conservation purposes grant or sell an ease23 ment, restriction, development right, or similar 

24 legal right to real property to a State, a polit25 ical subdivision of a State, or a private non-
446 

†S 3240 ES

1 profit organization separately from the under2 lying fee or other rights to the property owned 

3 by the United States. 

4 ‘‘(3) OTHER LAW.—Subtitle I of title 40, 

5 United States Code, and title III of the Federal 

6 Property and Administrative Services Act of 1949 

7 (41 U.S.C. 251 et seq.) shall not apply to any exer8 cise of authority under this subtitle. 

9 ‘‘(4) LEASE OF PROPERTY.— 

10 ‘‘(A) IN GENERAL.—Subject to subpara11 graph (B), the Secretary may not lease any real 

12 property acquired under this subtitle. 

13 ‘‘(B) EXCEPTION.— 

14 ‘‘(i) QUALIFIED BEGINNING FARMER

15 OR SOCIALLY DISADVANTAGED FARMER.— 

16 The Secretary may lease or contract to sell 

17 to a qualified beginning farmer or a so18 cially disadvantaged farmer a farm ac19 quired by the Secretary under this subtitle 

20 if the qualified beginning farmer qualifies 

21 for a credit sale or direct farm ownership 

22 loan under chapter 1 but credit sale au23 thority for loans or direct farm ownership 

24 loan funds, respectively, are not available. 
447 

†S 3240 ES

1 ‘‘(ii) TERM.—The term of a lease or 

2 contract to sell to a qualified beginning 

3 farmer or a socially disadvantaged farmer 

4 under clause (i) shall be until the earlier 

5 of— 

6 ‘‘(I) the date that is 18 months 

7 after the date of the lease or sale; or 

8 ‘‘(II) the date that direct farm 

9 ownership loan funds or credit sale 

10 authority for loans becomes available 

11 to the qualified beginning farmer or 

12 socially disadvantaged farmer. 

13 ‘‘(iii) INCOME-PRODUCING CAPA14 BILITY.—In determining the rental rate on 

15 real property leased under this subpara16 graph, the Secretary shall consider the in17 come-producing capability of the property 

18 during the term that the property is 

19 leased. 

20 ‘‘(5) EXPEDITED DETERMINATION.— 

21 ‘‘(A) IN GENERAL.—On the request of an 

22 applicant, not later than 30 days after denial of 

23 the application, the appropriate State director 

24 shall provide an expedited review and deter25 mination of whether the applicant is a qualified 
448 

†S 3240 ES

1 beginning farmer or a socially disadvantaged 

2 farmer for the purpose of acquiring farm inven3 tory property. 

4 ‘‘(B) APPEAL.—The determination of a 

5 State Director under subparagraph (A) shall be 

6 final and not administratively appealable. 

7 ‘‘(C) EFFECTS OF DETERMINATIONS.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall maintain statistical data on the num10 ber and results of determinations made 

11 under subparagraph (A) and the effect of 

12 the determinations on— 

13 ‘‘(I) selling farm inventory prop14 erty to qualified beginning farmers or 

15 socially disadvantaged farmers; and 

16 ‘‘(II) disposing of real property 

17 in inventory. 

18 ‘‘(ii) NOTIFICATION.—The Secretary 

19 shall notify the Committee on Agriculture 

20 of the House of Representatives and the 

21 Committee on Agriculture, Nutrition, and 

22 Forestry of the Senate if the Secretary de23 termines that the review process under 

24 subparagraph (A) is adversely affecting the 

25 selling of farm inventory property to quali-
449 

†S 3240 ES

1 fied beginning farmers or socially dis2 advantaged farmers or the disposing of 

3 real property in inventory. 

4 ‘‘(b) ROAD AND UTILITY EASEMENTS AND CON5 DEMNATIONS.—In the case of any real property adminis6 tered under this subtitle, the Secretary may grant or sell 

7 easements or rights-of-way for roads, utilities, and other 

8 appurtenances that are not inconsistent with the public 

9 interest. 

10 ‘‘(c) SALE OR LEASE OF FARMLAND.— 

11 ‘‘(1) DISPOSITION OF REAL PROPERTY ON IN12 DIAN RESERVATIONS.— 

13 ‘‘(A) DEFINITION OF INDIAN RESERVA14 TION.—In this paragraph, the term ‘Indian res15 ervation’ means— 

16 ‘‘(i) all land located within the limits 

17 of any Indian reservation under the juris18 diction of the United States, notwith19 standing the issuance of any patent, and, 

20 including any right-of-way running through 

21 the reservation; 

22 ‘‘(ii) trust or restricted land located 

23 within the boundaries of a former reserva24 tion of an Indian tribe in the State of 

25 Oklahoma; or 
450 

†S 3240 ES

1 ‘‘(iii) all Indian allotments the Indian 

2 titles to which have not been extinguished 

3 if the allotments are subject to the juris4 diction of an Indian tribe. 

5 ‘‘(B) DISPOSITION.—Except as provided in 

6 paragraph (3), the Secretary shall dispose of or 

7 administer the property as provided in this 

8 paragraph when— 

9 ‘‘(i) the Secretary acquires property 

10 under this subtitle that is located within an 

11 Indian reservation; and 

12 ‘‘(ii) the borrower-owner is the Indian 

13 tribe that has jurisdiction over the reserva14 tion in which the real property is located 

15 or the borrower-owner is a member of the 

16 Indian tribe; 

17 ‘‘(C) PRIORITY.—Not later than 90 days 

18 after acquiring the property, the Secretary shall 

19 afford an opportunity to purchase or lease the 

20 real property in accordance with the order of 

21 priority established under subparagraph (D) to 

22 the Indian tribe having jurisdiction over the In23 dian reservation within which the real property 

24 is located or, if no order of priority is estab-
451 

†S 3240 ES

1 lished by the Indian tribe under subparagraph 

2 (D), in the following order: 

3 ‘‘(i) An Indian member of the Indian 

4 tribe that has jurisdiction over the reserva5 tion within which the real property is lo6 cated. 

7 ‘‘(ii) An Indian corporate entity. 

8 ‘‘(iii) The Indian tribe. 

9 ‘‘(D) REVISION OF PRIORITY AND RE10 STRICTION OF ELIGIBILITY.—The governing 

11 body of any Indian tribe having jurisdiction 

12 over an Indian reservation may revise the order 

13 of priority provided in subparagraph (C) under 

14 which land located within the reservation shall 

15 be offered for purchase or lease by the Sec16 retary under subparagraph (C) and may re17 strict the eligibility for the purchase or lease 

18 to— 

19 ‘‘(i) persons who are members of the 

20 Indian tribe; 

21 ‘‘(ii) Indian corporate entities that are 

22 authorized by the Indian tribe to lease or 

23 purchase land within the boundaries of the 

24 reservation; or 

25 ‘‘(iii) the Indian tribe itself. 
452 

†S 3240 ES

1 ‘‘(E) TRANSFER OF PROPERTY TO SEC2 RETARY OF THE INTERIOR.— 

3 ‘‘(i) IN GENERAL.—If real property 

4 described in subparagraph (B) is not pur5 chased or leased under subparagraph (C) 

6 and the Indian tribe having jurisdiction 

7 over the reservation within which the real 

8 property is located is unable to purchase or 

9 lease the real property, the Secretary shall 

10 transfer the real property to the Secretary 

11 of the Interior who shall administer the 

12 real property as if the real property were 

13 held in trust by the United States for the 

14 benefit of the Indian tribe. 

15 ‘‘(ii) USE OF RENTAL INCOME.—From 

16 the rental income derived from the lease of 

17 the transferred real property, and all other 

18 income generated from the transferred real 

19 property, the Secretary of the Interior 

20 shall pay the State, county, municipal, or 

21 other local taxes to which the transferred 

22 real property was subject at the time of ac23 quisition by the Secretary, until the earlier 

24 of— 
453 

†S 3240 ES

1 ‘‘(I) the expiration of the 4-year 

2 period beginning on the date on which 

3 the real property is so transferred; or 

4 ‘‘(II) such time as the land is 

5 transferred into trust pursuant to 

6 subparagraph (H). 

7 ‘‘(F) RESPONSIBILITIES OF SECRE8 TARIES.—If any real property is transferred to 

9 the Secretary of the Interior under subpara10 graph (E)— 

11 ‘‘(i) the Secretary of Agriculture shall 

12 have no further responsibility under this 

13 title for— 

14 ‘‘(I) collection of any amounts 

15 with regard to the farm program loan 

16 that had been secured by the real 

17 property; 

18 ‘‘(II) any lien arising out of the 

19 loan transaction; or 

20 ‘‘(III) repayment of any amount 

21 with regard to the loan transaction or 

22 lien to the Treasury of the United 

23 States; and 

24 ‘‘(ii) the Secretary of the Interior 

25 shall succeed to all right, title, and interest 
454 

†S 3240 ES

1 of the Secretary of Agriculture in the real 

2 estate arising from the farm program loan 

3 transaction, including the obligation to 

4 remit to the Treasury of the United States, 

5 in repayment of the original loan, the 

6 amounts provided in subparagraph (G). 

7 ‘‘(G) USE OF INCOME.—After the payment 

8 of any taxes that are required to be paid under 

9 subparagraph (E)(ii), all remaining rental in10 come derived from the lease of the real property 

11 transferred to the Secretary of the Interior 

12 under subparagraph (E)(i), and all other in13 come generated from the real property trans14 ferred to the Secretary of the Interior under 

15 that subparagraph, shall be deposited as mis16 cellaneous receipts in the Treasury of the 

17 United States until the amount deposited is 

18 equal to the lesser of— 

19 ‘‘(i) the amount of the outstanding 

20 lien of the United States against the real 

21 property, as of the date the real property 

22 was acquired by the Secretary; 

23 ‘‘(ii) the fair market value of the real 

24 property, as of the date of the transfer to 

25 the Secretary of the Interior; or 
455 

†S 3240 ES

1 ‘‘(iii) the capitalized value of the real 

2 property, as of the date of the transfer to 

3 the Secretary of the Interior. 

4 ‘‘(H) HOLDING OF TITLE IN TRUST.—If 

5 the total amount that is required to be depos6 ited under subparagraph (G) with respect to 

7 any real property has been deposited into the 

8 Treasury of the United States, title to the real 

9 property shall be held in trust by the United 

10 States for the benefit of the Indian tribe having 

11 jurisdiction over the Indian reservation within 

12 which the real property is located. 

13 ‘‘(I) PAYMENT OF REMAINING LIEN OR

14 FAIR MARKET VALUE OF PROPERTY.— 

15 ‘‘(i) IN GENERAL.—Notwithstanding 

16 any other subparagraph of this paragraph, 

17 the Indian tribe having jurisdiction over 

18 the Indian reservation within which the 

19 real property described in subparagraph 

20 (B) is located may, at any time after the 

21 real property has been transferred to the 

22 Secretary of the Interior under subpara23 graph (E), offer to pay the remaining 

24 amount on the lien or the fair market 
456 

†S 3240 ES

1 value of the real property, whichever is 

2 less. 

3 ‘‘(ii) EFFECT OF PAYMENT.—On pay4 ment of the amount, title to the real prop5 erty shall be held by the United States in 

6 trust for the tribe and the trust or re7 stricted land that has been acquired by the 

8 Secretary under foreclosure or voluntary 

9 transfer under a loan made or insured 

10 under this subtitle and transferred to an 

11 Indian person, entity, or tribe under this 

12 paragraph shall be considered to have 

13 never lost trust or restricted status. 

14 ‘‘(J) APPLICABILITY.— 

15 ‘‘(i) IN GENERAL.—This paragraph 

16 shall apply to all land in the land inventory 

17 established under this subtitle (as of No18 vember 28, 1990) that was (immediately 

19 prior to the date) owned by an Indian bor20 rower-owner described in subparagraph 

21 (B) and that is situated within an Indian 

22 reservation, regardless of the date of fore23 closure or acquisition by the Secretary. 

24 ‘‘(ii) OPPORTUNITY TO PURCHASE OR

25 LEASE.—The Secretary shall afford an op-
457 

†S 3240 ES

1 portunity to an Indian person, entity, or 

2 tribe to purchase or lease the real property 

3 as provided in subparagraph (C). 

4 ‘‘(iii) TRANSFER.—If the right is not 

5 exercised or no expression of intent to ex6 ercise the right is received within 180 days 

7 after November 28, 1990, the Secretary 

8 shall transfer the real property to the Sec9 retary of the Interior as provided in sub10 paragraph (E). 

11 ‘‘(2) ADDITIONAL RIGHTS.—The rights pro12 vided in this subsection shall be in addition to any 

13 right of first refusal under the law of the State in 

14 which the property is located. 

15 ‘‘(3) DISPOSITION OF REAL PROPERTY ON IN16 DIAN RESERVATIONS AFTER PROCEDURES EX17 HAUSTED.— 

18 ‘‘(A) IN GENERAL.—The Secretary shall 

19 dispose of or administer real property described 

20 in paragraph (1)(B) only as provided in para21 graph (1), as modified by this paragraph, if— 

22 ‘‘(i) the real property described in 

23 paragraph (1)(B) is located within an In24 dian reservation; 
458 

†S 3240 ES

1 ‘‘(ii) the borrower-owner is an Indian 

2 tribe that has jurisdiction over the reserva3 tion in which the real property is located 

4 or the borrower-owner is a member of an 

5 Indian tribe; 

6 ‘‘(iii) the borrower-owner has obtained 

7 a loan made or guaranteed under this title; 

8 and 

9 ‘‘(iv) the borrower-owner and the Sec10 retary have exhausted all of the procedures 

11 provided for in this title to permit a bor12 rower-owner to retain title to the real prop13 erty, so that it is necessary for the bor14 rower-owner to relinquish title. 

15 ‘‘(B) NOTICE OF RIGHT TO CONVEY PROP16 ERTY.—The Secretary shall provide the bor17 rower-owner of real property that is described 

18 in subparagraph (A) with written notice of— 

19 ‘‘(i) the right of the borrower-owner to 

20 voluntarily convey the real property to the 

21 Secretary; and 

22 ‘‘(ii) the fact that real property so 

23 conveyed will be placed in the inventory of 

24 the Secretary. 
459 

†S 3240 ES

1 ‘‘(C) NOTICE OF RIGHTS AND PROTEC2 TIONS.—The Secretary shall provide the bor3 rower-owner of the real property with written 

4 notice of the rights and protections provided 

5 under this title to the borrower-owner, and the 

6 Indian tribe that has jurisdiction over the res7 ervation in which the real property is located, 

8 from foreclosure or liquidation of the real prop9 erty, including written notice— 

10 ‘‘(i) of paragraph (1), this paragraph, 

11 and subsection (e)(3); 

12 ‘‘(ii) if the borrower-owner does not 

13 voluntarily convey the real property to the 

14 Secretary, that— 

15 ‘‘(I) the Secretary may foreclose 

16 on the property; 

17 ‘‘(II) in the event of foreclosure, 

18 the property will be offered for sale; 

19 ‘‘(III) the Secretary shall offer a 

20 bid for the property that is equal to 

21 the fair market value of the property 

22 or the outstanding principal and inter23 est of the loan, whichever is higher; 

24 ‘‘(IV) the property may be pur25 chased by another party; and 
460 

†S 3240 ES

1 ‘‘(V) if the property is purchased 

2 by another party, the property will not 

3 be placed in the inventory of the Sec4 retary and the borrower-owner will 

5 forfeit the rights and protections pro6 vided under this title; and 

7 ‘‘(iii) of the opportunity of the bor8 rower-owner to consult with the Indian 

9 tribe that has jurisdiction over the reserva10 tion in which the real property is located 

11 or counsel to determine if State or tribal 

12 law provides rights and protections that 

13 are more beneficial than the rights and 

14 protections provided the borrower-owner 

15 under this title. 

16 ‘‘(D) ACCEPTANCE OF VOLUNTARY CON17 VEYANCE.— 

18 ‘‘(i) IN GENERAL.—Except as pro19 vided in clause (ii), the Secretary shall ac20 cept the voluntary conveyance of real prop21 erty described in subparagraph (A). 

22 ‘‘(ii) HAZARDOUS SUBSTANCES.—If a 

23 hazardous substance (as defined in section 

24 101(14) of the Comprehensive Environ25 mental Response, Compensation, and Li-
461 

†S 3240 ES

1 ability Act of 1980 (42 U.S.C. 9601(14))) 

2 is located on the property and the Sec3 retary takes remedial action to protect 

4 human health or the environment if the 

5 property is taken into inventory, the Sec6 retary shall accept the voluntary convey7 ance of the property only if the Secretary 

8 determines that the conveyance is in the 

9 best interests of the Federal Government. 

10 ‘‘(E) FORECLOSURE PROCEDURES.— 

11 ‘‘(i) NOTICE TO BORROWER.—If an 

12 Indian borrower-owner does not voluntarily 

13 convey to the Secretary real property de14 scribed in subparagraph (A), not less than 

15 30 days before a foreclosure sale of the 

16 property, the Secretary shall provide the 

17 Indian borrower-owner with the option 

18 of— 

19 ‘‘(I) requiring the Secretary to 

20 assign the loan and security instru21 ments to the Secretary of the Interior, 

22 if the Secretary of the Interior agrees 

23 to an assignment releasing the Sec24 retary of Agriculture from all further 

25 responsibility for collection of any 
462 

†S 3240 ES

1 amounts with regard to the loan se2 cured by the real property; or 

3 ‘‘(II) requiring the Secretary to 

4 assign the loan and security instru5 ments to the tribe having jurisdiction 

6 over the reservation in which the real 

7 property is located, if the tribe agrees 

8 to assume the loan under the terms 

9 specified in clause (iii). 

10 ‘‘(ii) NOTICE TO TRIBE.—If an Indian 

11 borrower-owner does not voluntarily convey 

12 to the Secretary real property described in 

13 subparagraph (A), not less than 30 days 

14 before a foreclosure sale of the property, 

15 the Secretary shall provide written notice 

16 to the Indian tribe that has jurisdiction 

17 over the reservation in which the real prop18 erty is located of— 

19 ‘‘(I) the sale; 

20 ‘‘(II) the fair market value of the 

21 property; and 

22 ‘‘(III) the requirements of this 

23 paragraph. 

24 ‘‘(iii) ASSUMED LOANS.—If an Indian 

25 tribe assumes a loan under clause (i)— 
463 

†S 3240 ES

1 ‘‘(I) the Secretary shall not fore2 close the loan because of any default 

3 that occurred prior to the date of the 

4 assumption; 

5 ‘‘(II) the loan shall be for the 

6 lesser of the outstanding principal and 

7 interest of the loan or the fair market 

8 value of the property; and 

9 ‘‘(III) the loan shall be treated as 

10 though the loan was made under Pub11 lic Law 91–229 (25 U.S.C. 488 et 

12 seq.). 

13 ‘‘(F) AMOUNT OF BID BY SECRETARY.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clause (ii), at a foreclosure sale of 

16 real property described in subparagraph 

17 (A), the Secretary shall offer a bid for the 

18 property that is equal to the higher of— 

19 ‘‘(I) the fair market value of the 

20 property; or 

21 ‘‘(II) the outstanding principal 

22 and interest on the loan. 

23 ‘‘(ii) HAZARDOUS SUBSTANCES.—If a 

24 hazardous substance (as defined in section 

25 101(14) of the Comprehensive Environ-
464 

†S 3240 ES

1 mental Response, Compensation, and Li2 ability Act of 1980 (42 U.S.C. 9601(14))) 

3 is located on the property and the Sec4 retary takes remedial action to protect 

5 human health or the environment if the 

6 property is taken into inventory, clause (i) 

7 shall apply only if the Secretary determines 

8 that bidding is in the best interests of the 

9 Federal Government. 

10 ‘‘(4) DETRIMENTAL EFFECT ON VALUE OF

11 AREA FARMLAND.—The Secretary shall not offer for 

12 sale or sell any farmland referred to in paragraphs 

13 (1) through (3) if placing the farmland on the mar14 ket will have a detrimental effect on the value of 

15 farmland in the area. 

16 ‘‘(5) INSTALLMENT SALES AND MULTIPLE OP17 ERATORS.— 

18 ‘‘(A) IN GENERAL.—The Secretary may 

19 sell farmland administered under this title 

20 through an installment sale or similar device 

21 that contains such terms as the Secretary con22 siders necessary to protect the investment of 

23 the Federal Government in the land. 
465 

†S 3240 ES

1 ‘‘(B) SALE OF CONTRACT.—The Secretary 

2 may subsequently sell any contract entered into 

3 to carry out subparagraph (A). 

4 ‘‘(6) HIGHLY ERODIBLE LAND.—In the case of 

5 farmland administered under this title that is highly 

6 erodible land (as defined in section 1201 of the Food 

7 Security Act of 1985 (16 U.S.C. 3801)), the Sec8 retary may require the use of specified conservation 

9 practices on the land as a condition of the sale or 

10 lease of the land. 

11 ‘‘(7) NO EFFECT ON ACREAGE ALLOTMENTS, 

12 MARKETING QUOTAS, OR ACREAGE BASES.—Not13 withstanding any other law, compliance by the Sec14 retary with this subsection shall not cause any acre15 age allotment, marketing quota, or acreage base as16 signed to the property to lapse, terminate, be re17 duced, or otherwise be adversely affected. 

18 ‘‘(8) NO PREEMPTION OF STATE LAW.—If a 

19 conflict exists between any provision of this sub20 section and any provision of the law of any State 

21 providing a right of first refusal to the owner of 

22 farmland or the operator of a farm before the sale 

23 or lease of land to any other person, the provision 

24 of State law shall prevail. 

25 ‘‘(d) RELEASE OF NORMAL INCOME SECURITY.— 
466 

†S 3240 ES

1 ‘‘(1) DEFINITION OF NORMAL INCOME SECU2 RITY.—In this subsection: 

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

4 subparagraph (B), the term ‘normal income se5 curity’ means all security not considered basic 

6 security, including crops, livestock, poultry 

7 products, Farm Service Agency payments and 

8 Commodity Credit Corporation payments, and 

9 other property covered by Farm Service Agency 

10 liens that is sold in conjunction with the oper11 ation of a farm or other business. 

12 ‘‘(B) EXCEPTIONS.—The term ‘normal in13 come security’ does not include any equipment 

14 (including fixtures in States that have adopted 

15 the Uniform Commercial Code), or foundation 

16 herd or flock, that is— 

17 ‘‘(i) the basis of the farming or other 

18 operation; and 

19 ‘‘(ii) the basic security for a farmer 

20 program loan. 

21 ‘‘(2) GENERAL RELEASE.—The Secretary shall 

22 release from the normal income security provided for 

23 a loan an amount sufficient to pay for the essential 

24 household and farm operating expenses of the bor-
467 

†S 3240 ES

1 rower, until such time as the Secretary accelerates 

2 the loan. 

3 ‘‘(3) NOTICE OF REPORTING REQUIREMENTS

4 AND RIGHTS.—If a borrower is required to plan for 

5 or to report as to how proceeds from the sale of col6 lateral property will be used, the Secretary shall no7 tify the borrower of— 

8 ‘‘(A) the requirement; and 

9 ‘‘(B) the right to the release of funds 

10 under this subsection and the means by which 

11 a request for the funds may be made. 

12 ‘‘(e) EASEMENTS ON INVENTORIED PROPERTY.— 

13 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

14 in the disposal of real property under this section, 

15 the Secretary shall establish perpetual wetland con16 servation easements to protect and restore wetland 

17 or converted wetland that exists on inventoried prop18 erty. 

19 ‘‘(2) LIMITATION.—The Secretary shall not es20 tablish a wetland conservation easement on an 

21 inventoried property that— 

22 ‘‘(A) was cropland on the date the prop23 erty entered the inventory of the Secretary; or 

24 ‘‘(B) was used for farming at any time 

25 during the period— 
468 

†S 3240 ES

1 ‘‘(i) beginning on the date that is 5 

2 years before the property entered the in3 ventory of the Secretary; and 

4 ‘‘(ii) ending on the date on which the 

5 property entered the inventory of the Sec6 retary. 

7 ‘‘(3) NOTIFICATION.—The Secretary shall pro8 vide prior written notification to a borrower consid9 ering homestead retention that a wetland conserva10 tion easement may be placed on land for which the 

11 borrower is negotiating a lease option. 

12 ‘‘(4) APPRAISED VALUE.—The appraised value 

13 of the farm shall reflect the value of the land due 

14 to the placement of wetland conservation easements. 

15 ‘‘SEC. 3410. CONTRACTS ON LOAN SECURITY PROPERTIES. 

16 ‘‘(a) CONTRACTS ON LOAN SECURITY PROP17 ERTIES.—Subject to subsection (b), the Secretary may 

18 enter into a contract related to real property for conserva19 tion, recreation, or wildlife purposes. 

20 ‘‘(b) LIMITATIONS.—The Secretary may enter into a 

21 contract under subsection (a) if— 

22 ‘‘(1) the property is wetland, upland, or highly 

23 erodible land; 

24 ‘‘(2) the property is determined by the Sec25 retary to be suitable for the purpose involved; and 
469 

†S 3240 ES

1 ‘‘(3)(A) the property secures a loan made under 

2 a law administered and held by the Secretary; and 

3 ‘‘(B) the contract would better enable a quali4 fied borrower to repay the loan in a timely manner, 

5 as determined by the Secretary. 

6 ‘‘(c) TERMS AND CONDITIONS.—The terms and con7 ditions specified in a contract under subsection (a) shall— 

8 ‘‘(1) specify the purposes for which the real 

9 property may be used; 

10 ‘‘(2) identify any conservation measure to be 

11 taken, and any recreational and wildlife use to be al12 lowed, with respect to the real property; and 

13 ‘‘(3) require the owner to permit the Secretary, 

14 and any person or governmental entity designated by 

15 the Secretary, to have access to the real property for 

16 the purpose of monitoring compliance with the con17 tract. 

18 ‘‘(d) REDUCTION OR FORGIVENESS OF DEBT.— 

19 ‘‘(1) IN GENERAL.—Subject to this section, the 

20 Secretary may reduce or forgive the outstanding 

21 debt of a borrower— 

22 ‘‘(A) in the case of a borrower to whom the 

23 Secretary has made an outstanding loan under 

24 a law administered by the Secretary, by can25 celing that part of the aggregate amount of the 
470 

†S 3240 ES

1 outstanding loan that bears the same ratio to 

2 the aggregate amount as— 

3 ‘‘(i) the number of acres of the real 

4 property of the borrower that are subject 

5 to the contract; bears to 

6 ‘‘(ii) the aggregate number of acres 

7 securing the loan; or 

8 ‘‘(B) in any other case, by treating as pre9 paid that part of the principal amount of a new 

10 loan to the borrower issued and held by the 

11 Secretary under a law administered by the Sec12 retary that bears the same ratio to the principal 

13 amount as— 

14 ‘‘(i) the number of acres of the real 

15 property of the borrower that are subject 

16 to the contract; bears to 

17 ‘‘(ii) the aggregate number of acres 

18 securing the new loan. 

19 ‘‘(2) MAXIMUM CANCELED AMOUNT.—The 

20 amount canceled or treated as prepaid under para21 graph (1) shall not exceed— 

22 ‘‘(A) in the case of a delinquent loan, the 

23 greater of— 

24 ‘‘(i) the value of the land on which the 

25 contract is entered into; or 
471 

†S 3240 ES

1 ‘‘(ii) the difference between— 

2 ‘‘(I) the amount of the out3 standing loan secured by the land; 

4 and 

5 ‘‘(II) the value of the land; or 

6 ‘‘(B) in the case of a nondelinquent loan, 

7 33 percent of the amount of the loan secured 

8 by the land. 

9 ‘‘(e) CONSULTATION WITH FISH AND WILDLIFE

10 SERVICE.—If the Secretary uses the authority provided by 

11 this section, the Secretary shall consult with the Director 

12 of the Fish and Wildlife Service for the purposes of— 

13 ‘‘(1) selecting real property in which the Sec14 retary may enter into a contract under this section; 

15 ‘‘(2) formulating the terms and conditions of 

16 the contract; and 

17 ‘‘(3) enforcing the contract. 

18 ‘‘(f) ENFORCEMENT.—The Secretary, and any person 

19 or governmental entity designated by the Secretary, may 

20 enforce a contract entered into by the Secretary under this 

21 section. 

22 ‘‘SEC. 3411. DEBT RESTRUCTURING AND LOAN SERVICING. 

23 ‘‘(a) IN GENERAL.—The Secretary shall modify a de24 linquent farmer program loan made under this subtitle, 

25 or purchased from the lender or the Federal Deposit In-
472 

†S 3240 ES

1 surance Corporation under section 3902, to the maximum 

2 extent practicable— 

3 ‘‘(1) to avoid a loss to the Secretary on the 

4 loan, with priority consideration being placed on 

5 writing-down the loan principal and interest (subject 

6 to subsections (d) and (e)), and debt set-aside (sub7 ject to subsection (e)), to facilitate keeping the bor8 rower on the farm, or otherwise through the use of 

9 primary loan service programs under this section; 

10 and 

11 ‘‘(2) to ensure that a borrower is able to con12 tinue farming operations. 

13 ‘‘(b) ELIGIBILITY.—To be eligible to obtain assist14 ance under subsection (a)— 

15 ‘‘(1) the delinquency shall be due to a cir16 cumstance beyond the control of the borrower, as de17 fined in regulations issued by the Secretary, except 

18 that the regulations shall require that, if the value 

19 of the assets calculated under subsection 

20 (c)(2)(A)(ii) that may be realized through liquida21 tion or other methods would produce enough income 

22 to make the delinquent loan current, the borrower 

23 shall not be eligible for assistance under subsection 

24 (a); 
473 

†S 3240 ES

1 ‘‘(2) the borrower shall have acted in good faith 

2 with the Secretary in connection with the loan as de3 fined in regulations issued by the Secretary; 

4 ‘‘(3) the borrower shall present a preliminary 

5 plan to the Secretary that contains reasonable as6 sumptions that demonstrate that the borrower will 

7 be able— 

8 ‘‘(A) to meet the necessary family living 

9 and farm operating expenses of the borrower; 

10 and 

11 ‘‘(B) to service all debts of the borrower, 

12 including restructured loans; and 

13 ‘‘(4) the loan, if restructured, shall result in a 

14 net recovery to the Federal Government, during the 

15 term of the loan as restructured, that would be more 

16 than or equal to the net recovery to the Federal 

17 Government from an involuntary liquidation or fore18 closure on the property securing the loan. 

19 ‘‘(c) RESTRUCTURING DETERMINATIONS.— 

20 ‘‘(1) DETERMINATION OF NET RECOVERY.—In 

21 determining the net recovery from the involuntary 

22 liquidation of a loan under this section, the Sec23 retary shall calculate— 
474 

†S 3240 ES

1 ‘‘(A) the recovery value of the collateral se2 curing the loan, in accordance with paragraph 

3 (2); and 

4 ‘‘(B) the value of the restructured loan, in 

5 accordance with paragraph (3). 

6 ‘‘(2) RECOVERY VALUE.—For the purpose of 

7 paragraph (1), the recovery value of the collateral 

8 securing the loan shall be based on the difference be9 tween— 

10 ‘‘(A)(i) the amount of the current ap11 praised value of the interests of the borrower in 

12 the property securing the loan; and 

13 ‘‘(ii) the value of the interests of the bor14 rower in all other assets that are— 

15 ‘‘(I) not essential for necessary family 

16 living expenses; 

17 ‘‘(II) not essential to the operation of 

18 the farm; and 

19 ‘‘(III) not exempt from judgment 

20 creditors or in a bankruptcy action under 

21 Federal or State law; 

22 ‘‘(B) the estimated administrative, attor23 ney, and other expenses associated with the liq24 uidation and disposition of the loan and collat25 eral, including— 
475 

†S 3240 ES

1 ‘‘(i) the payment of prior liens; 

2 ‘‘(ii) taxes and assessments, deprecia3 tion, management costs, the yearly per4 centage decrease or increase in the value of 

5 the property, and lost interest income, each 

6 calculated for the average holding period 

7 for the type of property involved; 

8 ‘‘(iii) resale expenses, such as repairs, 

9 commissions, and advertising; and 

10 ‘‘(iv) other administrative and attor11 ney costs; and 

12 ‘‘(C) the value, as determined by the Sec13 retary, of any property not included in subpara14 graph (A)(i) if the property is specified in any 

15 security agreement with respect to the loan and 

16 the Secretary determines that the value of the 

17 property should be included for purposes of this 

18 section. 

19 ‘‘(3) VALUE OF THE RESTRUCTURED LOAN.— 

20 ‘‘(A) IN GENERAL.—For the purpose of 

21 paragraph (1), the value of the restructured 

22 loan shall be based on the present value of pay23 ments that the borrower would make to the 

24 Federal Government if the terms of the loan 

25 were modified under any combination of pri-
476 

†S 3240 ES

1 mary loan service programs to ensure that the 

2 borrower is able to meet the obligations and 

3 continue farming operations. 

4 ‘‘(B) PRESENT VALUE.—For the purpose 

5 of calculating the present value referred to in 

6 subparagraph (A), the Secretary shall use a dis7 count rate of not more than the current rate at 

8 the time of the calculation of 90-day Treasury 

9 bills. 

10 ‘‘(C) CASH FLOW MARGIN.—For the pur11 pose of assessing under subparagraph (A) the 

12 ability of a borrower to meet debt obligations 

13 and continue farming operations, the Secretary 

14 shall assume that the borrower needs up to 110 

15 percent of the amount indicated for payment of 

16 farm operating expenses, debt service obliga17 tions, and family living expenses. 

18 ‘‘(4) NOTIFICATION.—Not later than 90 days 

19 after receipt of a written request for restructuring 

20 from the borrower, the Secretary shall— 

21 ‘‘(A) make the calculations specified in 

22 paragraphs (2) and (3); 

23 ‘‘(B) notify the borrower in writing of the 

24 results of the calculations; and 
477 

†S 3240 ES

1 ‘‘(C) provide documentation for the cal2 culations. 

3 ‘‘(5) RESTRUCTURING OF LOANS.— 

4 ‘‘(A) IN GENERAL.—If the value of a re5 structured loan is greater than or equal to the 

6 recovery value of the collateral securing the 

7 loan, not later than 45 days after notifying the 

8 borrower under paragraph (4), the Secretary 

9 shall offer to restructure the loan obligations of 

10 the borrower under this subtitle through pri11 mary loan service programs that would enable 

12 the borrower to meet the obligations (as modi13 fied) under the loan and to continue the farm14 ing operations of the borrower. 

15 ‘‘(B) RESTRUCTURING.—If the borrower 

16 accepts an offer under subparagraph (A), not 

17 later than 45 days after receipt of notice of ac18 ceptance, the Secretary shall restructure the 

19 loan accordingly. 

20 ‘‘(6) TERMINATION OF LOAN OBLIGATIONS.— 

21 The obligations of a borrower to the Secretary under 

22 a loan shall terminate if— 

23 ‘‘(A) the borrower satisfies the require24 ments of paragraphs (1) and (2) of subsection 

25 (b); 
478 

†S 3240 ES

1 ‘‘(B) the value of the restructured loan is 

2 less than the recovery value; and 

3 ‘‘(C) not later than 90 days after receipt 

4 of the notification described in paragraph 

5 (4)(B), the borrower pays (or obtains third6 party financing to pay) the Secretary an 

7 amount equal to the current market value. 

8 ‘‘(7) NEGOTIATION OF APPRAISAL.— 

9 ‘‘(A) IN GENERAL.—In making a deter10 mination concerning restructuring under this 

11 subsection, the Secretary, at the request of the 

12 borrower, shall enter into negotiations with the 

13 borrower concerning appraisals required under 

14 this subsection. 

15 ‘‘(B) INDEPENDENT APPRAISAL.— 

16 ‘‘(i) IN GENERAL.—If the borrower, 

17 based on a separate current appraisal, ob18 jects to the decision of the Secretary re19 garding an appraisal, the borrower and the 

20 Secretary shall mutually agree, to the ex21 tent practicable, on an independent ap22 praiser who shall conduct another ap23 praisal of the property of the borrower. 

24 ‘‘(ii) VALUE OF FINAL APPRAISAL.— 

25 The average of the 2 appraisals under 
479 

†S 3240 ES

1 clause (i) that are closest in value shall be2 come the final appraisal under this para3 graph. 

4 ‘‘(iii) COST OF APPRAISAL.—The borrower and the Secretary shall each pay 1 5 ⁄2

6 of the cost of any independent appraisal. 

7 ‘‘(d) PRINCIPAL AND INTEREST WRITE-DOWN.— 

8 ‘‘(1) IN GENERAL.— 

9 ‘‘(A) PRIORITY CONSIDERATION.—In se10 lecting the restructuring alternatives to be used 

11 in the case of a borrower who has requested re12 structuring under this section, the Secretary 

13 shall give priority consideration to the use of a 

14 principal and interest write-down if other credi15 tors of the borrower (other than any creditor 

16 who is fully collateralized) representing a sub17 stantial portion of the total debt of the bor18 rower held by the creditors of the borrower, 

19 agree to participate in the development of the 

20 restructuring plan or agree to participate in a 

21 State mediation program. 

22 ‘‘(B) FAILURE OF CREDITORS TO

23 AGREE.—Failure of creditors to agree to par24 ticipate in the restructuring plan or mediation 

25 program shall not preclude the use of a prin-
480 

†S 3240 ES

1 cipal and interest write-down by the Secretary 

2 if the Secretary determines that restructuring 

3 results in the least cost to the Secretary. 

4 ‘‘(2) PARTICIPATION OF CREDITORS.—Before 

5 eliminating the option to use debt write-down in the 

6 case of a borrower, the Secretary shall make a rea7 sonable effort to contact the creditors of the bor8 rower, either directly or through the borrower, and 

9 encourage the creditors to participate with the Sec10 retary in the development of a restructuring plan for 

11 the borrower. 

12 ‘‘(e) SHARED APPRECIATION ARRANGEMENTS.— 

13 ‘‘(1) IN GENERAL.—As a condition of restruc14 turing a loan in accordance with this section, the 

15 borrower of the loan may be required to enter into 

16 a shared appreciation arrangement that requires the 

17 repayment of amounts written off or set aside. 

18 ‘‘(2) TERMS.—A shared appreciation agreement 

19 shall— 

20 ‘‘(A) have a term not to exceed 10 years; 

21 and 

22 ‘‘(B) provide for recapture based on the 

23 difference between the appraised values of the 

24 real security property at the time of restruc25 turing and at the time of recapture. 
481 

†S 3240 ES

1 ‘‘(3) PERCENTAGE OF RECAPTURE.—The 

2 amount of the appreciation to be recaptured by the 

3 Secretary shall be— 

4 ‘‘(A) 75 percent of the appreciation in the 

5 value of the real security property if the recap6 ture occurs not later than 4 years after the date 

7 of restructuring; and 

8 ‘‘(B) 50 percent if the recapture occurs 

9 during the remainder of the term of the agree10 ment. 

11 ‘‘(4) TIME OF RECAPTURE.—Recapture shall 

12 take place on the date that is the earliest of— 

13 ‘‘(A) the end of the term of the agreement; 

14 ‘‘(B) the conveyance of the real security 

15 property; 

16 ‘‘(C) the repayment of the loans; or 

17 ‘‘(D) the cessation of farming operations 

18 by the borrower. 

19 ‘‘(5) TRANSFER OF TITLE.—Transfer of title to 

20 the spouse of a borrower on the death of the bor21 rower shall not be treated as a conveyance for the 

22 purpose of paragraph (4). 

23 ‘‘(6) NOTICE OF RECAPTURE.—Not later than 

24 12 months before the end of the term of a shared 

25 appreciation arrangement, the Secretary shall notify 
482 

†S 3240 ES

1 the borrower involved of the provisions of the ar2 rangement. 

3 ‘‘(7) FINANCING OF RECAPTURE PAYMENT.— 

4 ‘‘(A) IN GENERAL.—The Secretary may 

5 amortize a recapture payment owed to the Sec6 retary under this subsection. 

7 ‘‘(B) TERM.—The term of an amortization 

8 under this paragraph may not exceed 25 years. 

9 ‘‘(C) INTEREST RATE.—The interest rate 

10 applicable to an amortization under this para11 graph may not exceed the rate applicable to a 

12 loan to reacquire homestead property less 100 

13 basis points. 

14 ‘‘(D) REAMORTIZATION.— 

15 ‘‘(i) IN GENERAL.—The Secretary 

16 may modify the amortization of a recap17 ture payment referred to in subparagraph 

18 (A) of this paragraph on which a payment 

19 has become delinquent if— 

20 ‘‘(I) the default is due to cir21 cumstances beyond the control of the 

22 borrower; and 

23 ‘‘(II) the borrower acted in good 

24 faith (as determined by the Secretary) 
483 

†S 3240 ES

1 in attempting to repay the recapture 

2 amount. 

3 ‘‘(ii) LIMITATIONS.— 

4 ‘‘(I) TERM OF REAMORTIZA5 TION.—The term of a reamortization 

6 under this subparagraph may not ex7 ceed 25 years from the date of the 

8 original amortization agreement. 

9 ‘‘(II) NO REDUCTION OR PRIN10 CIPAL OR UNPAID INTEREST DUE.—A 

11 reamortization of a recapture payment 

12 under this subparagraph may not pro13 vide for reducing the outstanding 

14 principal or unpaid interest due on 

15 the recapture payment. 

16 ‘‘(f) INTEREST RATES.—Any loan for farm owner17 ship purposes, farm operating purposes, or disaster emer18 gency purposes, other than a guaranteed loan, that is de19 ferred, consolidated, rescheduled, or reamortized shall, 

20 notwithstanding any other provision of this subtitle, bear 

21 interest on the balance of the original loan and for the 

22 term of the original loan at a rate that is the lowest of— 

23 ‘‘(1) the rate of interest on the original loan; 

24 ‘‘(2) the rate being charged by the Secretary 

25 for loans, other than guaranteed loans, of the same 
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1 type at the time at which the borrower applies for 

2 a deferral, consolidation, rescheduling, or re3 amortization; or 

4 ‘‘(3) the rate being charged by the Secretary 

5 for loans, other than guaranteed loans, of the same 

6 type at the time of the deferral, consolidation, re7 scheduling, or reamortization. 

8 ‘‘(g) PERIOD AND EFFECT.— 

9 ‘‘(1) PERIOD.—The Secretary may consolidate 

10 or reschedule outstanding loans for payment over a 

11 period not to exceed 7 years (or, in the case of loans 

12 for farm operating purposes, 15 years) from the 

13 date of the consolidation or rescheduling. 

14 ‘‘(2) EFFECT.—The amount of unpaid principal 

15 and interest of the prior loans so consolidated or re16 scheduled shall not create a new charge against any 

17 loan levels authorized by law. 

18 ‘‘(h) PREREQUISITES TO FORECLOSURE OR LIQUIDA19 TION.—No foreclosure or other similar action shall be 

20 taken to liquidate any loan determined to be ineligible for 

21 restructuring by the Secretary under this section— 

22 ‘‘(1) until the borrower has been given the op23 portunity to appeal the decision; and 

24 ‘‘(2) if the borrower appeals, the appeals proc25 ess has been completed, and a determination has 
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1 been made that the loan is ineligible for restruc2 turing. 

3 ‘‘(i) NOTICE OF INELIGIBILITY FOR RESTRUC4 TURING.— 

5 ‘‘(1) IN GENERAL.—A notice of ineligibility for 

6 restructuring shall be sent to the borrower by reg7 istered or certified mail not later than 15 days after 

8 a determination of ineligibility. 

9 ‘‘(2) CONTENTS.—The notice required under 

10 paragraph (1) shall contain— 

11 ‘‘(A) the determination and the reasons for 

12 the determination; 

13 ‘‘(B) the computations used to make the 

14 determination, including the calculation of the 

15 recovery value of the collateral securing the 

16 loan; and 

17 ‘‘(C) a statement of the right of the bor18 rower to appeal the decision to the appeals divi19 sion, and to appear before a hearing officer. 

20 ‘‘(j) INDEPENDENT APPRAISALS.— 

21 ‘‘(1) IN GENERAL.—An appeal may include a 

22 request by the borrower for an independent ap23 praisal of any property securing the loan. 

24 ‘‘(2) PROCESS FOR APPRAISAL.—On a request 

25 under paragraph (1), the Secretary shall present the 
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1 borrower with a list of 3 appraisers approved by the 

2 county supervisor, from which the borrower shall se3 lect an appraiser to conduct the appraisal. 

4 ‘‘(3) COST.—The cost of an appraisal under 

5 this subsection shall be paid by the borrower. 

6 ‘‘(4) RESULT.—The result of an appraisal 

7 under this subsection shall be considered in any final 

8 determination concerning the loan. 

9 ‘‘(5) COPY.—A copy of any appraisal under this 

10 subsection shall be provided to the borrower. 

11 ‘‘(k) PARTIAL LIQUIDATIONS.—If a partial liquida12 tion of a delinquent loan is performed (with the prior con13 sent of the Secretary) as part of loan servicing by a guar14 anteed lender under this title, the Secretary shall not re15 quire full liquidation of the loan for the lender to be eligi16 ble to receive payment on losses. 

17 ‘‘(l) ONLY 1 WRITE-DOWN OR NET RECOVERY BUY18 OUT PER BORROWER FOR A LOAN MADE AFTER JANU19 ARY 6, 1988.— 

20 ‘‘(1) IN GENERAL.—The Secretary may provide 

21 for each borrower not more than 1 write-down or net 

22 recovery buy-out under this section with respect to 

23 all loans made to the borrower after January 6, 

24 1988. 
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1 ‘‘(2) SPECIAL RULE.—For purposes of para2 graph (1), the Secretary shall treat any loan made 

3 on or before January 6, 1988, with respect to which 

4 a restructuring, write-down, or net recovery buy-out 

5 is provided under this section after January 6, 1988, 

6 as a loan made after January 6, 1988. 

7 ‘‘(m) LIQUIDATION OF ASSETS.—The Secretary may 

8 not use the authority provided by this section to reduce 

9 or terminate any portion of the debt of the borrower that 

10 the borrower could pay through the liquidation of assets 

11 (or through the payment of the loan value of the assets, 

12 if the loan value is greater than the liquidation value) de13 scribed in subsection (c)(2)(A)(ii). 

14 ‘‘(n) LIFETIME LIMITATION ON DEBT FORGIVENESS

15 PER BORROWER.—The Secretary may provide each bor16 rower not more than $300,000 in debt forgiveness under 

17 this section. 

18 ‘‘SEC. 3412. RELIEF FOR MOBILIZED MILITARY RESERVISTS 

19 FROM CERTAIN AGRICULTURAL LOAN OBLI20 GATIONS. 

21 ‘‘(a) DEFINITION OF MOBILIZED MILITARY RESERV22 IST.—In this section, the term ‘mobilized military reserv23 ist’ means an individual who— 

24 ‘‘(1) is on active duty under section 688, 

25 12301(a), 12301(g), 12302, 12304, 12306, or 
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1 12406, or chapter 15 of title 10, United States 

2 Code, or any other provision of law during a war or 

3 during a national emergency declared by the Presi4 dent or Congress, regardless of the location at which 

5 the active duty service is performed; or 

6 ‘‘(2) in the case of a member of the National 

7 Guard, is on full-time National Guard duty (as de8 fined in section 101(d)(5) of title 10, United States 

9 Code) under a call to active service authorized by 

10 the President or the Secretary of Defense for a pe11 riod of more than 30 consecutive days under section 

12 502(f) of title 32, United States Code, for purposes 

13 of responding to a national emergency declared by 

14 the President and supported by Federal funds. 

15 ‘‘(b) FORGIVENESS OF INTEREST PAYMENTS DUE

16 WHILE BORROWER IS A MOBILIZED MILITARY RESERV17 IST.—Any requirement that a borrower of a direct loan 

18 made under this subtitle make any interest payment on 

19 the loan that would otherwise be required to be made while 

20 the borrower is a mobilized military reservist is rescinded. 

21 ‘‘(c) DEFERRAL OF PRINCIPAL PAYMENTS DUE

22 WHILE OR AFTER BORROWER IS A MOBILIZED MILITARY

23 RESERVIST.—The due date of any payment of principal 

24 on a direct loan made to a borrower under this subtitle 

25 that would otherwise be required to be made while or after 
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1 the borrower is a mobilized military reservist is deferred 

2 for a period equal in length to the period for which the 

3 borrower is a mobilized military reservist. 

4 ‘‘(d) NONACCRUAL OF INTEREST.—Interest on a di5 rect loan made to a borrower described in this section shall 

6 not accrue during the period the borrower is a mobilized 

7 military reservist. 

8 ‘‘(e) BORROWER NOT CONSIDERED TO BE DELIN9 QUENT OR RECEIVING DEBT FORGIVENESS.—Notwith10 standing section 3425 or any other provision of this title, 

11 a borrower who receives assistance under this section shall 

12 not, as a result of the assistance, be considered to be delin13 quent or receiving debt forgiveness for purposes of receiv14 ing a direct or guaranteed loan under this subtitle. 

15 ‘‘SEC. 3413. INTEREST RATE REDUCTION PROGRAM. 

16 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Secretary 

17 shall establish and carry out in accordance with this sec18 tion an interest rate reduction program for any loan guar19 anteed under this subtitle. 

20 ‘‘(b) ENTERING INTO CONTRACTS.—The Secretary 

21 shall enter into a contract with, and make payments to, 

22 an institution to reduce, during the term of the contract, 

23 the interest rate paid by the borrower on the guaranteed 

24 loan if— 

25 ‘‘(1) the borrower— 
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1 ‘‘(A) is unable to obtain credit elsewhere; 

2 ‘‘(B) is unable to make payments on the 

3 loan in a timely manner; and 

4 ‘‘(C) during the 24-month period beginning 

5 on the date on which the contract is entered 

6 into, has a total estimated cash income, includ7 ing all farm and nonfarm income, that will 

8 equal or exceed the total estimated cash ex9 penses, including all farm and nonfarm ex10 penses, to be incurred by the borrower during 

11 the period; and 

12 ‘‘(2) during the term of the contract, the lender 

13 reduces the annual rate of interest payable on the 

14 loan by a minimum percentage specified in the con15 tract. 

16 ‘‘(c) PAYMENTS.— 

17 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

18 in return for a contract entered into by a lender 

19 under subsection (b) for the reduction of the interest 

20 rate paid on a loan, the Secretary shall make pay21 ments to the lender in an amount equal to not more 

22 than 100 percent of the cost of reducing the annual 

23 rate of interest payable on the loan. 
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1 ‘‘(2) LIMITATION.—Payments under paragraph 

2 (1) may not exceed the cost of reducing the rate by 

3 more than 400 basis points. 

4 ‘‘(d) TERM.—The term of a contract entered into 

5 under this section to reduce the interest rate on a guaran6 teed loan may not exceed the outstanding term of the loan. 

7 ‘‘(e) CONDITION ON FORECLOSURE.—Notwith8 standing any other law, any contract of guarantee on a 

9 farm loan entered into under this subtitle shall contain 

10 a condition that the lender of the loan may not initiate 

11 a foreclosure action on the loan until 60 days after a de12 termination is made with respect to the eligibility of the 

13 borrower to participate in the program established under 

14 this section. 

15 ‘‘SEC. 3414. HOMESTEAD PROPERTY. 

16 ‘‘(a) DEFINITIONS.—In this section: 

17 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis18 trator’ means the Administrator of the Small Busi19 ness Administration. 

20 ‘‘(2) BORROWER-OWNER.—The term ‘borrower21 owner’ means— 

22 ‘‘(A) a borrower-owner of a loan made or 

23 guaranteed by the Secretary or the Adminis24 trator who meets the eligibility requirements of 

25 subsection (c)(1); or 
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1 ‘‘(B) in a case in which an owner of home2 stead property pledged the property to secure 

3 the loan and the owner is different than the 

4 borrower, the owner. 

5 ‘‘(3) FARM PROGRAM LOAN.—The term ‘farm 

6 program loan’ means a loan made by the Adminis7 trator under the Small Business Act (15 U.S.C. 631 

8 et seq.) for any of the purposes authorized for loans 

9 under chapter 1 or 2. 

10 ‘‘(4) HOMESTEAD PROPERTY.—The term 

11 ‘homestead property’ means— 

12 ‘‘(A) the principal residence and adjoining 

13 property possessed and occupied by a borrower14 owner, including a reasonable number of farm 

15 outbuildings located on the adjoining land that 

16 are useful to any occupant of the homestead; 

17 and 

18 ‘‘(B) not more than 10 acres of adjoining 

19 land that is used to maintain the family of the 

20 borrower-owner. 

21 ‘‘(b) RETENTION OF HOMESTEAD PROPERTY.— 

22 ‘‘(1) IN GENERAL.—The Secretary or the Ad23 ministrator shall, on application by a borrower24 owner who meets the eligibility requirements of sub25 section (c)(1), permit the borrower-owner to retain 
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1 possession and occupancy of homestead property 

2 under the terms set forth, and until the action de3 scribed in this section has been completed, if— 

4 ‘‘(A) the Secretary forecloses or takes into 

5 inventory property securing a loan made under 

6 this subtitle; 

7 ‘‘(B) the Administrator forecloses or takes 

8 into inventory property securing a farm pro9 gram loan made under the Small Business Act 

10 (15 U.S.C. 631 et seq.); or 

11 ‘‘(C) the borrower-owner of a loan made by 

12 the Secretary or the Administrator files a peti13 tion in bankruptcy that results in the convey14 ance of the homestead property to the Secretary 

15 or the Administrator, or agrees to voluntarily 

16 liquidate or convey the property in whole or in 

17 part. 

18 ‘‘(2) PERIOD OF OCCUPANCY.—Subject to sub19 section (c), the Secretary or the Administrator shall 

20 not grant a period of occupancy of less than 3 nor 

21 more than 5 years. 

22 ‘‘(c) ELIGIBILITY.— 

23 ‘‘(1) IN GENERAL.—To be eligible to occupy 

24 homestead property, a borrower-owner of a loan 

25 made by the Secretary or the Administrator shall— 
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1 ‘‘(A) apply for the occupancy not later 

2 than 30 days after the property is acquired by 

3 the Secretary or Administrator; 

4 ‘‘(B) have received from farming oper5 ations gross farm income that is reasonably 

6 commensurate with— 

7 ‘‘(i) the size and location of the farm8 ing unit of the borrower-owner; and 

9 ‘‘(ii) local agricultural conditions (in10 cluding natural and economic conditions), 

11 during at least 2 calendar years of the 6- 

12 year period preceding the calendar year in 

13 which the application is made; 

14 ‘‘(C) have received from farming oper15 ations at least 60 percent of the gross annual 

16 income of the borrower-owner and any spouse 

17 of the borrower-owner during at least 2 cal18 endar years of the 6-year period described in 

19 subparagraph (B); 

20 ‘‘(D) have continuously occupied the home21 stead property during the 6-year period de22 scribed in subparagraph (B), except that the re23 quirement of this subparagraph may be waived 

24 if a borrower-owner, due to circumstances be25 yond the control of the borrower-owner, had to 
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1 leave the homestead property for a period of 

2 time not to exceed 12 months during the 6-year 

3 period; 

4 ‘‘(E) during the period of occupancy of the 

5 homestead property, pay a reasonable sum as 

6 rent for the property to the Secretary or the 

7 Administrator in an amount substantially equiv8 alent to rents charged for similar residential 

9 properties in the area in which the homestead 

10 property is located; 

11 ‘‘(F) during the period of the occupancy of 

12 the homestead property, maintain the property 

13 in good condition; and 

14 ‘‘(G) meet such other reasonable and nec15 essary terms and conditions as the Secretary 

16 may require. 

17 ‘‘(2) DEFINITION OF FARMING OPERATIONS.— 

18 In subparagraphs (B) and (C) of paragraph (1), the 

19 term ‘farming operations’ includes rent paid by a 

20 lessee of agricultural land during a period in which 

21 the borrower-owner, due to circumstances beyond 

22 the control of the borrower-owner, is unable to ac23 tively farm the land. 

24 ‘‘(3) TERMINATION OF RIGHTS.— 
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1 ‘‘(A) IN GENERAL.—For purposes of para2 graph (1)(E), the failure of the borrower-owner 

3 to make a timely rental payment shall con4 stitute cause for the termination of all rights of 

5 the borrower-owner to possession and occu6 pancy of the homestead property under this sec7 tion. 

8 ‘‘(B) PROCEDURE FOR TERMINATION.—In 

9 effecting a termination under subparagraph 

10 (A), the Secretary shall— 

11 ‘‘(i) afford the borrower-owner or les12 see the notice and hearing procedural 

13 rights described in subtitle H of the De14 partment of Agriculture Reorganization 

15 Act of 1994 (7 U.S.C. 6991 et seq.); and 

16 ‘‘(ii) comply with any applicable State 

17 and local law governing eviction of a per18 son from residential property. 

19 ‘‘(4) RIGHTS OF BORROWER-OWNER.— 

20 ‘‘(A) PERIOD OF OCCUPANCY.—Subject to 

21 subsection (b)(2), the period of occupancy al22 lowed the borrower-owner of homestead prop23 erty under this section shall be the period re24 quested in writing by the borrower-owner. 

25 ‘‘(B) RIGHT TO REACQUIRE.— 
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1 ‘‘(i) IN GENERAL.—During the period 

2 the borrower-owner occupies the homestead 

3 property, the borrower-owner shall have a 

4 right to reacquire the homestead property 

5 on such terms and conditions as the Sec6 retary shall determine. 

7 ‘‘(ii) SOCIALLY DISADVANTAGED BOR8 ROWER-OWNER.—During the period of oc9 cupancy of a borrower-owner who is a so10 cially disadvantaged farmer, the borrower11 owner or a member of the immediate fam12 ily of the borrower-owner shall have a right 

13 of first refusal to reacquire the homestead 

14 property on such terms and conditions as 

15 the Secretary shall determine. 

16 ‘‘(iii) INDEPENDENT APPRAISAL.— 

17 The Secretary may not demand a payment 

18 for the homestead property that is in ex19 cess of the current market value of the 

20 homestead property as established by an 

21 independent appraisal. 

22 ‘‘(iv) CONDUCT OF APPRAISAL.—An 

23 independent appraisal under clause (iii) 

24 shall be conducted by an appraiser selected 

25 by the borrower-owner, or, in the case of a 
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1 borrower-owner who is a socially disadvan2 taged farmer, the immediate family mem3 ber of the borrower-owner, from a list of 3 

4 appraisers approved by the county super5 visor. 

6 ‘‘(5) TRANSFER OF RIGHTS.— 

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

8 subparagraph (B), no right of a borrower-owner 

9 under this section, and no agreement entered 

10 into between the borrower-owner and the Sec11 retary for occupancy of the homestead property, 

12 shall be transferable or assignable by the bor13 rower-owner or by operation of law. 

14 ‘‘(B) DEATH OR INCOMPETENCY.—In the 

15 case of death or incompetency of the borrower16 owner, the right and agreement shall be trans17 ferable to a spouse of the borrower-owner if the 

18 spouse agrees to comply with any terms and 

19 conditions of the right or agreement. 

20 ‘‘(6) NOTIFICATION.—Not later than the date 

21 of acquisition of the property securing a loan made 

22 under this title, the Secretary shall notify the bor23 rower-owner of the property of the availability of 

24 homestead protection rights under this section. 

25 ‘‘(d) END OF PERIOD OF OCCUPANCY.— 
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1 ‘‘(1) IN GENERAL.—At the end of the period of 

2 occupancy allowed a borrower-owner under sub3 section (c), the Secretary or the Administrator shall 

4 grant to the borrower-owner a right of first refusal 

5 to reacquire the homestead property on such terms 

6 and conditions (which may include payment of prin7 cipal in installments) as the Secretary or the Admin8 istrator shall determine. 

9 ‘‘(2) TERMS AND CONDITIONS.—The terms and 

10 conditions granted under paragraph (1) may not be 

11 less favorable than those offered by the Secretary or 

12 Administrator or intended by the Secretary or Ad13 ministrator to be offered to any other buyer. 

14 ‘‘(e) MAXIMUM PAYMENT OF PRINCIPAL.— 

15 ‘‘(1) IN GENERAL.—At the time a reacquisition 

16 agreement is entered into, the Secretary or the Ad17 ministrator may not demand a total payment of 

18 principal that is in excess of the value of the home19 stead property. 

20 ‘‘(2) DETERMINATION OF VALUE.—To the max21 imum extent practicable, the value of the homestead 

22 property shall be determined by an independent ap23 praisal made during the 180 day period beginning 

24 on the date of receipt of the application of the bor-
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1 rower-owner to retain possession and occupancy of 

2 the homestead property. 

3 ‘‘(f) TITLE NOT NEEDED TO ENTER INTO CON4 TRACTS.—The Secretary may enter into a contract au5 thorized by this section before the Secretary acquires title 

6 to the homestead property that is the subject of the con7 tract. 

8 ‘‘(g) STATE LAW PREVAILS.—In the event of a con9 flict between this section and a provision of State law re10 lating to the right of a borrower-owner to designate for 

11 separate sale or redeem part or all of the real property 

12 securing a loan foreclosed on by a lender to the borrower13 owner, the provision of State law shall prevail. 

14 ‘‘SEC. 3415. TRANSFER OF INVENTORY LAND. 

15 ‘‘(a) IN GENERAL.—Subject to subsection (b), the 

16 Secretary may transfer to a Federal or State agency, for 

17 conservation purposes, any real property, or interest in 

18 real property, administered by the Secretary under this 

19 subtitle— 

20 ‘‘(1) with respect to which the rights of all prior 

21 owners and operators have expired; 

22 ‘‘(2) that is eligible to be disposed of in accord23 ance with section 3409; and 

24 ‘‘(3) that— 
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1 ‘‘(A) has marginal value for agricultural 

2 production; 

3 ‘‘(B) is environmentally sensitive; or 

4 ‘‘(C) has special management importance. 

5 ‘‘(b) CONDITIONS.—The Secretary may not transfer 

6 any property or interest in property under subsection (a) 

7 unless— 

8 ‘‘(1) at least 2 public notices are given of the 

9 transfer; 

10 ‘‘(2) if requested, at least 1 public meeting is 

11 held prior to the transfer; and 

12 ‘‘(3) the Governor and at least 1 elected county 

13 official of the State and county in which the prop14 erty is located are consulted prior to the transfer. 

15 ‘‘SEC. 3416. TARGET PARTICIPATION RATES. 

16 ‘‘(a) ESTABLISHMENT.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall estab18 lish annual target participation rates, on a county19 wide basis, that shall ensure that members of so20 cially disadvantaged groups shall— 

21 ‘‘(A) receive loans made or guaranteed 

22 under chapter 1; and 

23 ‘‘(B) have the opportunity to purchase or 

24 lease farmland acquired by the Secretary under 

25 this subtitle. 
502 

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1 ‘‘(2) GROUP POPULATION.—Except as provided 

2 in paragraph (3), in establishing the target rates, 

3 the Secretary shall take into consideration— 

4 ‘‘(A) the portion of the population of the 

5 county made up of the socially disadvantaged 

6 groups; and 

7 ‘‘(B) the availability of inventory farmland 

8 in the county. 

9 ‘‘(3) GENDER.—In the case of gender, target 

10 participation rates shall take into consideration the 

11 number of current and potential socially disadvan12 taged farmers in a State in proportion to the total 

13 number of farmers in the State. 

14 ‘‘(b) RESERVATION AND ALLOCATION.— 

15 ‘‘(1) RESERVATION.—To the maximum extent 

16 practicable, the Secretary shall reserve sufficient 

17 loan funds made available under chapter 1 for use 

18 by members of socially disadvantaged groups identi19 fied under target participation rates established 

20 under subsection (a). 

21 ‘‘(2) ALLOCATION.—The Secretary shall allo22 cate the loans on the basis of the proportion of 

23 members of socially disadvantaged groups in a coun24 ty and the availability of inventory farmland, with 

25 the greatest amount of loan funds being distributed 
503 

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1 in the county with the greatest proportion of socially 

2 disadvantaged group members and the greatest 

3 quantity of available inventory farmland. 

4 ‘‘(3) INDIAN RESERVATIONS.—In distributing 

5 loan funds in counties within the boundaries of an 

6 Indian reservation, the Secretary shall allocate the 

7 funds on a reservation-wide basis. 

8 ‘‘(c) OPERATING LOANS.— 

9 ‘‘(1) ESTABLISHMENT.— 

10 ‘‘(A) IN GENERAL.—The Secretary shall 

11 establish annual target participation rates that 

12 shall ensure that socially disadvantaged farmers 

13 receive loans made or guaranteed under chapter 

14 2. 

15 ‘‘(B) CONSIDERATIONS.—In establishing 

16 the target rates, the Secretary shall consider 

17 the number of socially disadvantaged farmers in 

18 a State in proportion to the total number of 

19 farmers in the State. 

20 ‘‘(2) RESERVATION AND ALLOCATION.— 

21 ‘‘(A) IN GENERAL.—To the maximum ex22 tent practicable, the Secretary shall reserve and 

23 allocate the proportion of the loan funds of each 

24 State made available under chapter 2 that is 

25 equal to the target participation rate of the 
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1 State for use by the socially disadvantaged 

2 farmers in the State. 

3 ‘‘(B) DISTRIBUTION.—To the maximum 

4 extent practicable, the Secretary shall distribute 

5 the total loan funds reserved under subpara6 graph (A) on a county-by-county basis accord7 ing to the number of socially disadvantaged 

8 farmers in the county. 

9 ‘‘(C) REALLOCATION OF UNUSED

10 FUNDS.—Any funds reserved and allocated 

11 under this paragraph but not used within a 

12 State shall, to the extent necessary to satisfy 

13 pending applications under this title, be avail14 able for use by socially disadvantaged farmers 

15 in other States, as determined by the Secretary, 

16 and any remaining funds shall be reallocated 

17 within the State. 

18 ‘‘(d) REPORT.—The Secretary shall prepare and sub19 mit to the Committee on Agriculture of the House of Rep20 resentatives and the Committee on Agriculture, Nutrition, 

21 and Forestry of the Senate a report that describes the an22 nual target participation rates and the success in meeting 

23 the rates. 

24 ‘‘(e) IMPLEMENTATION CONSISTENT WITH SUPREME

25 COURT HOLDING.—Not later than 180 days after April 
505 

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1 4, 1996, the Secretary shall ensure that the implementa2 tion of this section is consistent with the holding of the 

3 Supreme Court in Adarand Constructors, Inc. v. Federico 

4 Pena, Secretary of Transportation, 115 S. Ct. 2097 

5 (1995). 

6 ‘‘SEC. 3417. COMPROMISE OR ADJUSTMENT OF DEBTS OR 

7 CLAIMS BY GUARANTEED LENDER. 

8 ‘‘(a) LOSS BY LENDER.—If the lender of a guaran9 teed farmer program loan takes any action described in 

10 section 3903(a)(4) with respect to the loan and the Sec11 retary approves the action, for purposes of the guarantee, 

12 the lender shall be treated as having sustained a loss equal 

13 to the amount by which— 

14 ‘‘(1) the outstanding balance of the loan imme15 diately before the action; exceeds 

16 ‘‘(2) the outstanding balance of the loan imme17 diately after the action. 

18 ‘‘(b) NET PRESENT VALUE OF LOAN.—The Sec19 retary shall approve the taking of an action described in 

20 section 3903(a)(4) by the lender of a guaranteed farmer 

21 program loan with respect to the loan if the action reduces 

22 the net present value of the loan to an amount equal to 

23 not less than the greater of— 

24 ‘‘(1) the greatest net present value of a loan the 

25 borrower could reasonably be expected to repay; and 
506 

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1 ‘‘(2) the difference between— 

2 ‘‘(A) the greatest amount that the lender 

3 of the loan could reasonably expect to recover 

4 from the borrower through bankruptcy, or liq5 uidation of the property securing the loan; and 

6 ‘‘(B) all reasonable and necessary costs 

7 and expenses that the lender of the loan could 

8 reasonably expect to incur to preserve or dis9 pose of the property (including all associated 

10 legal and property management costs) in the 

11 course of such a bankruptcy or liquidation. 

12 ‘‘(c) NO LIMITATION ON AUTHORITY.—This section 

13 shall not limit the authority of the Secretary to enter into 

14 a shared appreciation arrangement with a borrower under 

15 section 3411(e). 

16 ‘‘SEC. 3418. WAIVER OF MEDIATION RIGHTS BY BOR17 ROWERS. 

18 ‘‘The Secretary may not make or guarantee any 

19 farmer program loan to a farm borrower on the condition 

20 that the borrower waive any right under the mediation 

21 program of any State. 

22 ‘‘SEC. 3419. BORROWER TRAINING. 

23 ‘‘(a) IN GENERAL.—The Secretary shall contract to 

24 provide educational training to all borrowers of direct 
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1 loans made under this subtitle in financial and farm man2 agement concepts associated with commercial farming. 

3 ‘‘(b) CONTRACT.— 

4 ‘‘(1) IN GENERAL.—The Secretary may con5 tract with a State or private provider of farm man6 agement and credit counseling services (including a 

7 community college, the extension service of a State, 

8 a State department of agriculture, or a nonprofit or9 ganization) to carry out this section. 

10 ‘‘(2) CONSULTATION.—The Secretary may con11 sult with the chief executive officer of a State con12 cerning the identity of the contracting organization 

13 and the process for contracting. 

14 ‘‘(c) ELIGIBILITY FOR LOANS.— 

15 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

16 to be eligible to obtain a direct or guaranteed loan 

17 under this subtitle, a borrower shall be required to 

18 obtain management assistance under this section, 

19 appropriate to the management ability of the bor20 rower during the determination of eligibility for the 

21 loan. 

22 ‘‘(2) LOAN CONDITIONS.—The need of a bor23 rower who satisfies the criteria set out in section 

24 3101(b)(1)(B) or 3201(b)(1)(B) for management as25 sistance under this section shall not be cause for de-
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1 nial of eligibility of the borrower for a direct or 

2 guaranteed loan under this subtitle. 

3 ‘‘(d) GUIDELINES AND CURRICULUM.—The Sec4 retary shall issue regulations establishing guidelines and 

5 curriculum for the borrower training program established 

6 under this section. 

7 ‘‘(e) PAYMENT.—A borrower— 

8 ‘‘(1) shall pay for training received under this 

9 section; and 

10 ‘‘(2) may use funds from operating loans made 

11 under chapter 2 to pay for the training. 

12 ‘‘(f) WAIVERS.— 

13 ‘‘(1) IN GENERAL.—The Secretary may waive 

14 the requirements of this section for an individual 

15 borrower on a determination that the borrower dem16 onstrates adequate knowledge in areas described in 

17 this section. 

18 ‘‘(2) CRITERIA.—The Secretary shall establish 

19 criteria providing for the application of paragraph 

20 (1) consistently in all counties nationwide. 

21 ‘‘SEC. 3420. LOAN ASSESSMENTS. 

22 ‘‘(a) IN GENERAL.—After an applicant is determined 

23 to be eligible for assistance under this subtitle, the Sec24 retary shall evaluate, in accordance with regulations issued 
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1 by the Secretary, the farming plan and financial situation 

2 of each qualified farmer applicant. 

3 ‘‘(b) DETERMINATIONS.—In evaluating the farming 

4 plan and financial situation of an applicant under this sec5 tion, the Secretary shall determine— 

6 ‘‘(1) the amount that the applicant needs to 

7 borrow to carry out the proposed farming plan; 

8 ‘‘(2) the rate of interest that the applicant 

9 would need to be able to cover expenses and build 

10 an adequate equity base; 

11 ‘‘(3) the goals of the proposed farming plan of 

12 the applicant; 

13 ‘‘(4) the financial viability of the plan and any 

14 changes that are necessary to make the plan viable; 

15 and 

16 ‘‘(5) whether assistance is necessary under this 

17 title and, if so, the amount of the assistance. 

18 ‘‘(c) CONTRACT.—The Secretary may contract with 

19 a third party (including an entity that is eligible to provide 

20 borrower training under section 3419(b)) to conduct a 

21 loan assessment under this section. 

22 ‘‘(d) REVIEW OF LOANS.— 

23 ‘‘(1) IN GENERAL.—Loan assessments con24 ducted under this section shall include biannual re25 view of direct loans, and periodic review (as deter-
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1 mined necessary by the Secretary) of guaranteed 

2 loans, made under this title to assess the progress 

3 of a borrower in meeting the goals for the farm op4 eration. 

5 ‘‘(2) CONTRACTS.—The Secretary may contract 

6 with an entity that is eligible to provide borrower 

7 training under section 3419(b) to conduct a loan re8 view under paragraph (1). 

9 ‘‘(3) PROBLEM ASSESSMENTS.—If a borrower is 

10 delinquent in payments on a direct or guaranteed 

11 loan made under this title, the Secretary or the con12 tracting entity shall determine the cause of, and ac13 tion necessary to correct, the delinquency. 

14 ‘‘(e) GUIDELINES.—The Secretary shall issue regula15 tions providing guidelines for loan assessments conducted 

16 under this section. 

17 ‘‘SEC. 3421. SUPERVISED CREDIT. 

18 ‘‘The Secretary shall provide adequate training to 

19 employees of the Farm Service Agency on credit analysis 

20 and financial and farm management— 

21 ‘‘(1) to better acquaint the employees with what 

22 constitutes adequate financial data on which to base 

23 a direct or guaranteed loan approval decision; and 

24 ‘‘(2) to ensure proper supervision of farmer 

25 program loans. 
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1 ‘‘SEC. 3422. MARKET PLACEMENT. 

2 ‘‘The Secretary shall establish a market placement 

3 program for a qualified beginning farmer and any other 

4 borrower of farmer program loans that the Secretary be5 lieves has a reasonable chance of qualifying for commercial 

6 credit with a guarantee provided under this subtitle. 

7 ‘‘SEC. 3423. RECORDKEEPING OF LOANS BY GENDER OF 

8 BORROWER. 

9 ‘‘The Secretary shall classify, by gender, records of 

10 applicants for loans and loan guarantees under this sub11 title. 

12 ‘‘SEC. 3424. CROP INSURANCE REQUIREMENT. 

13 ‘‘(a) IN GENERAL.—As a condition of obtaining any 

14 benefit (including a direct loan, loan guarantee, or pay15 ment) described in subsection (b), a borrower shall be re16 quired to obtain at least catastrophic risk protection insur17 ance coverage under section 508 of the Federal Crop In18 surance Act (7 U.S.C. 1508) for the crop and crop year 

19 for which the benefit is sought, if the coverage is offered 

20 by the Federal Crop Insurance Corporation. 

21 ‘‘(b) APPLICABLE BENEFITS.—Subsection (a) shall 

22 apply to— 

23 ‘‘(1) a farm ownership loan under section 3102; 

24 ‘‘(2) an operating loan under section 3202; and 

25 ‘‘(3) an emergency loan under section 3301. 
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1 ‘‘SEC. 3425. LOAN AND LOAN SERVICING LIMITATIONS. 

2 ‘‘(a) DELINQUENT BORROWERS PROHIBITED FROM

3 OBTAINING DIRECT OPERATING LOANS.—The Secretary 

4 may not make a direct operating loan under chapter 2 

5 to a borrower who is delinquent on any loan made or guar6 anteed under this subtitle. 

7 ‘‘(b) LOANS PROHIBITED FOR BORROWERS THAT

8 HAVE RECEIVED DEBT FORGIVENESS.— 

9 ‘‘(1) PROHIBITIONS.—Except as provided in 

10 paragraph (2)— 

11 ‘‘(A) the Secretary may not make a loan 

12 under this subtitle to a borrower that has re13 ceived debt forgiveness on a loan made or guar14 anteed under this subtitle; and 

15 ‘‘(B) the Secretary may not guarantee a 

16 loan under this subtitle to a borrower that has 

17 received— 

18 ‘‘(i) debt forgiveness after April 4, 

19 1996, on a loan made or guaranteed under 

20 this subtitle; or 

21 ‘‘(ii) received debt forgiveness on more 

22 than 3 occasions on or before April 4, 

23 1996. 

24 ‘‘(2) EXCEPTIONS.— 

25 ‘‘(A) IN GENERAL.—The Secretary may 

26 make a direct or guaranteed farm operating 
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1 loan for paying annual farm operating expenses 

2 of a borrower who— 

3 ‘‘(i) was restructured with a write4 down under section 3411; 

5 ‘‘(ii) is current on payments under a 

6 confirmed reorganization plan under chap7 ters 1 11, 12, or 13 of title 11 of the 

8 United States Code; or 

9 ‘‘(iii) received debt forgiveness on not 

10 more than 1 occasion resulting directly and 

11 primarily from a major disaster or emer12 gency designated by the President on or 

13 after April 4, 1996, under the Robert T. 

14 Stafford Disaster Relief and Emergency 

15 Assistance Act (42 U.S.C. 5121 et seq.). 

16 ‘‘(B) EMERGENCY LOANS.—The Secretary 

17 may make an emergency loan under section 

18 3301 to a borrower that— 

19 ‘‘(i) on or before April 4, 1996, re20 ceived not more than 1 debt forgiveness on 

21 a loan made or guaranteed under this sub22 title; and 

23 ‘‘(ii) after April 4, 1996, has not re24 ceived debt forgiveness on a loan made or 

25 guaranteed under this subtitle. 
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1 ‘‘(c) NO MORE THAN 1 DEBT FORGIVENESS FOR A

2 BORROWER ON A DIRECT LOAN.—The Secretary may not 

3 provide to a borrower debt forgiveness on a direct loan 

4 made under this subtitle if the borrower has received debt 

5 forgiveness on another direct loan made under this sub6 title. 

7 ‘‘SEC. 3426. SHORT FORM CERTIFICATION OF FARM PRO8 GRAM BORROWER COMPLIANCE. 

9 ‘‘The Secretary shall develop and use a consolidated 

10 short form for farmer program loan borrowers to use in 

11 certifying compliance with any applicable provision of law 

12 (including a regulation) that serves as an eligibility pre13 requisite for a loan made under this subtitle. 

14 ‘‘SEC. 3427. UNDERWRITING FORMS AND STANDARDS. 

15 ‘‘In the administration of this subtitle, the Secretary 

16 shall, to the extent practicable, use underwriting forms, 

17 standards, practices, and terminology similar to the forms, 

18 standards, practices, and terminology used by lenders in 

19 the private sector. 

20 ‘‘SEC. 3428. BEGINNING FARMER INDIVIDUAL DEVELOP21 MENT ACCOUNTS PILOT PROGRAM. 

22 ‘‘(a) DEFINITIONS.—In this section: 

23 ‘‘(1) DEMONSTRATION PROGRAM.—The term 

24 ‘demonstration program’ means a demonstration 
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1 program carried out by a qualified entity under the 

2 pilot program established in subsection (b)(1). 

3 ‘‘(2) ELIGIBLE PARTICIPANT.—The term ‘eligi4 ble participant’ means a qualified beginning farmer 

5 that— 

6 ‘‘(A) lacks significant financial resources 

7 or assets; and 

8 ‘‘(B) has an income that is less than— 

9 ‘‘(i) 80 percent of the median income 

10 of the State in which the farmer resides; or 

11 ‘‘(ii) 200 percent of the most recent 

12 annual Federal Poverty Income Guidelines 

13 published by the Department of Health 

14 and Human Services for the State. 

15 ‘‘(3) INDIVIDUAL DEVELOPMENT ACCOUNT.— 

16 The term ‘individual development account’ means a 

17 savings account described in subsection (b)(4)(A). 

18 ‘‘(4) QUALIFIED ENTITY.— 

19 ‘‘(A) IN GENERAL.—The term ‘qualified 

20 entity’ means— 

21 ‘‘(i) 1 or more organizations— 

22 ‘‘(I) described in section 

23 501(c)(3) of the Internal Revenue 

24 Code of 1986; and 
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1 ‘‘(II) exempt from taxation under 

2 section 501(a) of such Code; or 

3 ‘‘(ii) a State, local, or tribal govern4 ment submitting an application jointly with 

5 an organization described in clause (i). 

6 ‘‘(B) NO PROHIBITION ON COLLABORA7 TION.—An organization described in subpara8 graph (A)(i) may collaborate with a financial 

9 institution or for-profit community development 

10 corporation to carry out the purposes of this 

11 section. 

12 ‘‘(b) PILOT PROGRAM.— 

13 ‘‘(1) IN GENERAL.—The Secretary shall estab14 lish a pilot program to be known as the ‘New Farm15 er Individual Development Accounts Pilot Program’ 

16 under which the Secretary shall work through quali17 fied entities to establish demonstration programs— 

18 ‘‘(A) of at least 5 years in duration; and 

19 ‘‘(B) in at least 15 States. 

20 ‘‘(2) COORDINATION.—The Secretary shall op21 erate the pilot program through and in coordination 

22 with the farmer program loans of the Farm Service 

23 Agency. 

24 ‘‘(3) RESERVE FUNDS.— 
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1 ‘‘(A) IN GENERAL.—A qualified entity car2 rying out a demonstration program under this 

3 section shall establish a reserve fund consisting 

4 of a non-Federal match of 50 percent of the 

5 total amount of the grant awarded to the dem6 onstration program under this section. 

7 ‘‘(B) FEDERAL FUNDS.—After the quali8 fied entity has deposited the non-Federal 

9 matching funds described in subparagraph (A) 

10 in the reserve fund, the Secretary shall provide 

11 the total amount of the grant awarded under 

12 this section to the demonstration program for 

13 deposit in the reserve fund. 

14 ‘‘(C) USE OF FUNDS.—Of the funds depos15 ited under subparagraph (B) in the reserve 

16 fund established for a demonstration program, 

17 the qualified entity carrying out the demonstra18 tion program— 

19 ‘‘(i) may use up to 10 percent for ad20 ministrative expenses; and 

21 ‘‘(ii) shall use the remainder in mak22 ing matching awards described in para23 graph (4)(B)(ii)(I). 

24 ‘‘(D) INTEREST.—Any interest earned on 

25 amounts in a reserve fund established under 
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1 subparagraph (A) may be used by the qualified 

2 entity as additional matching funds for, or to 

3 administer, the demonstration program. 

4 ‘‘(E) GUIDANCE.—The Secretary shall 

5 issue guidance regarding the investment re6 quirements of reserve funds established under 

7 this paragraph. 

8 ‘‘(F) REVERSION.—On the date on which 

9 all funds remaining in any individual develop10 ment account established by a qualified entity 

11 have reverted under paragraph (5)(B)(ii) to the 

12 reserve fund established by the qualified entity, 

13 there shall revert to the Treasury of the United 

14 States a percentage of the amount (if any) in 

15 the reserve fund equal to— 

16 ‘‘(i) the amount of Federal funds de17 posited in the reserve fund under subpara18 graph (B) that were not used for adminis19 trative expenses; divided by 

20 ‘‘(ii) the total amount of funds depos21 ited in the reserve fund. 

22 ‘‘(4) INDIVIDUAL DEVELOPMENT ACCOUNTS.— 

23 ‘‘(A) IN GENERAL.—A qualified entity re24 ceiving a grant under this section shall establish 
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1 and administer individual development accounts 

2 for eligible participants. 

3 ‘‘(B) CONTRACT REQUIREMENTS.—To be 

4 eligible to receive funds under this section from 

5 a qualified entity, an eligible participant shall 

6 enter into a contract with only 1 qualified enti7 ty under which— 

8 ‘‘(i) the eligible participant agrees— 

9 ‘‘(I) to deposit a certain amount 

10 of funds of the eligible participant in 

11 a personal savings account, as pre12 scribed by the contractual agreement 

13 between the eligible participant and 

14 the qualified entity; 

15 ‘‘(II) to use the funds described 

16 in subclause (I) only for 1 or more eli17 gible expenditures described in para18 graph (5)(A); and 

19 ‘‘(III) to complete financial train20 ing; and 

21 ‘‘(ii) the qualified entity agrees— 

22 ‘‘(I) to deposit, not later than 1 

23 month after an amount is deposited 

24 pursuant to clause (i)(I), at least a 

25 100-percent, and up to a 200-percent, 
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1 match of that amount into the indi2 vidual development account estab3 lished for the eligible participant; and 

4 ‘‘(II) with uses of funds proposed 

5 by the eligible participant. 

6 ‘‘(C) LIMITATION.— 

7 ‘‘(i) IN GENERAL.—A qualified entity 

8 administering a demonstration program 

9 under this section may provide not more 

10 than $6,000 for each fiscal year in match11 ing funds to the individual development ac12 count established by the qualified entity 

13 for an eligible participant. 

14 ‘‘(ii) TREATMENT OF AMOUNT.—An 

15 amount provided under clause (i) shall not 

16 be considered to be a gift or loan for mort17 gage purposes. 

18 ‘‘(5) ELIGIBLE EXPENDITURES.— 

19 ‘‘(A) IN GENERAL.—An eligible expendi20 ture described in this subparagraph is an ex21 penditure— 

22 ‘‘(i) to purchase farmland or make a 

23 down payment on an accepted purchase 

24 offer for farmland; 
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1 ‘‘(ii) to make mortgage payments on 

2 farmland purchased pursuant to clause (i), 

3 for up to 180 days after the date of the 

4 purchase; 

5 ‘‘(iii) to purchase breeding stock, fruit 

6 or nut trees, or trees to harvest for timber; 

7 and 

8 ‘‘(iv) for other similar expenditures, 

9 as determined by the Secretary. 

10 ‘‘(B) TIMING.— 

11 ‘‘(i) IN GENERAL.—An eligible partici12 pant may make an eligible expenditure at 

13 any time during the 2-year period begin14 ning on the date on which the last match15 ing funds are provided under paragraph 

16 (4)(B)(ii)(I) to the individual development 

17 account established for the eligible partici18 pant. 

19 ‘‘(ii) UNEXPENDED FUNDS.—At the 

20 end of the period described in clause (i), 

21 any funds remaining in an individual devel22 opment account established for an eligible 

23 participant shall revert to the reserve fund 

24 of the demonstration program under which 

25 the account was established. 
522 

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1 ‘‘(c) APPLICATIONS.— 

2 ‘‘(1) IN GENERAL.—A qualified entity that 

3 seeks to carry out a demonstration program under 

4 this section may submit to the Secretary an applica5 tion at such time, in such form, and containing such 

6 information as the Secretary may prescribe. 

7 ‘‘(2) CRITERIA.—In considering whether to ap8 prove an application to carry out a demonstration 

9 program under this section, the Secretary shall as10 sess— 

11 ‘‘(A) the degree to which the demonstra12 tion program described in the application is 

13 likely to aid eligible participants in successfully 

14 pursuing new farming opportunities; 

15 ‘‘(B) the experience and ability of the 

16 qualified entity to responsibly administer the 

17 demonstration program; 

18 ‘‘(C) the experience and ability of the 

19 qualified entity in recruiting, educating, and as20 sisting eligible participants to increase economic 

21 independence and pursue or advance farming 

22 opportunities; 

23 ‘‘(D) the aggregate amount of direct funds 

24 from non-Federal public sector and private 

25 sources that are formally committed to the 
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1 demonstration program as matching contribu2 tions; 

3 ‘‘(E) the adequacy of the plan of the quali4 fied entity to provide information relevant to an 

5 evaluation of the demonstration program; and 

6 ‘‘(F) such other factors as the Secretary 

7 considers to be appropriate. 

8 ‘‘(3) PREFERENCES.—In considering an appli9 cation to conduct a demonstration program under 

10 this section, the Secretary shall give preference to an 

11 application from a qualified entity that dem12 onstrates— 

13 ‘‘(A) a track record of serving clients tar14 geted by the program, including, as appro15 priate, socially disadvantaged farmers; and 

16 ‘‘(B) expertise in dealing with financial 

17 management aspects of farming. 

18 ‘‘(4) APPROVAL.—Not later than 1 year after 

19 the date of enactment of this section, in accordance 

20 with this section, the Secretary shall, on a competi21 tive basis, approve such applications to conduct dem22 onstration programs as the Secretary considers ap23 propriate. 

24 ‘‘(5) TERM OF AUTHORITY.—If the Secretary 

25 approves an application to carry out a demonstration 
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1 program, the Secretary shall authorize the applicant 

2 to carry out the project for a period of 5 years, plus 

3 an additional 2 years to make eligible expenditures 

4 in accordance with subsection (b)(5)(B). 

5 ‘‘(d) GRANT AUTHORITY.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall make a 

7 grant to a qualified entity authorized to carry out a 

8 demonstration program under this section. 

9 ‘‘(2) MAXIMUM AMOUNT OF GRANTS.—The ag10 gregate amount of grant funds provided to a dem11 onstration program carried out under this section 

12 shall not exceed $250,000. 

13 ‘‘(3) TIMING OF GRANT PAYMENTS.—The Sec14 retary shall pay the amounts awarded under a grant 

15 made under this section— 

16 ‘‘(A) on the awarding of the grant; or 

17 ‘‘(B) pursuant to such payment plan as 

18 the qualified entity may specify. 

19 ‘‘(e) REPORTS.— 

20 ‘‘(1) ANNUAL PROGRESS REPORTS.— 

21 ‘‘(A) IN GENERAL.—Not later than 60 

22 days after the end of the calendar year in which 

23 the Secretary authorizes a qualified entity to 

24 carry out a demonstration program under this 

25 section, and annually thereafter until the con-
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1 clusion of the demonstration program, the 

2 qualified entity shall prepare an annual report 

3 that includes, for the period covered by the re4 port— 

5 ‘‘(i) an evaluation of the progress of 

6 the demonstration program; 

7 ‘‘(ii) information about the dem8 onstration program, including the eligible 

9 participants and the individual develop10 ment accounts that have been established; 

11 and 

12 ‘‘(iii) such other information as the 

13 Secretary may require. 

14 ‘‘(B) SUBMISSION OF REPORTS.—A quali15 fied entity shall submit each report required 

16 under subparagraph (A) to the Secretary. 

17 ‘‘(2) REPORTS BY THE SECRETARY.—Not later 

18 than 1 year after the date on which all demonstra19 tion programs under this section are concluded, the 

20 Secretary shall submit to Congress a final report 

21 that describes the results and findings of all reports 

22 and evaluations carried out under this section. 

23 ‘‘(f) ANNUAL REVIEW.—The Secretary may conduct 

24 an annual review of the financial records of a qualified 

25 entity— 
526 

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1 ‘‘(1) to assess the financial soundness of the 

2 qualified entity; and 

3 ‘‘(2) to determine the use of grant funds made 

4 available to the qualified entity under this section. 

5 ‘‘(g) REGULATIONS.—In carrying out this section, 

6 the Secretary may promulgate regulations to ensure that 

7 the program includes provisions for— 

8 ‘‘(1) the termination of demonstration pro9 grams; 

10 ‘‘(2) control of the reserve funds in the case of 

11 such a termination; 

12 ‘‘(3) transfer of demonstration programs to 

13 other qualified entities; and 

14 ‘‘(4) remissions from a reserve fund to the Sec15 retary in a case in which a demonstration program 

16 is terminated without transfer to a new qualified en17 tity. 

18 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

19 is authorized to be appropriated to carry out this section 

20 $5,000,000 for each of fiscal years 2012 through 2017. 

21 ‘‘SEC. 3429. FARMER LOAN PILOT PROJECTS. 

22 ‘‘(a) IN GENERAL.—The Secretary may conduct pilot 

23 projects of limited scope and duration that are consistent 

24 with this subtitle to evaluate processes and techniques that 
527 

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1 may improve the efficiency and effectiveness of the pro2 grams carried out under this subtitle 

3 ‘‘(b) NOTIFICATION.—The Secretary shall— 

4 ‘‘(1) not less than 60 days before the date on 

5 which the Secretary initiates a pilot project under 

6 subsection (a), submit notice of the proposed pilot 

7 project to the Committee on Agriculture of the 

8 House of Representatives and the Committee on Ag9 riculture, Nutrition, and Forestry of the Senate; and 

10 ‘‘(2) consider any recommendations or feedback 

11 provided to the Secretary in response to the notice 

12 provided under paragraph (1). 

13 ‘‘SEC. 3430. PROHIBITION ON USE OF LOANS FOR CERTAIN 

14 PURPOSES. 

15 ‘‘(a) IN GENERAL.—Except as provided in sub16 sections (b) and (c), the Secretary may not approve a loan 

17 under this subtitle to drain, dredge, fill, level, or otherwise 

18 manipulate a wetland (as defined in section 1201(a) of 

19 the Food Security Act of 1985 (16 U.S.C. 3801(a))), or 

20 to engage in any activity that results in impairing or re21 ducing the flow, circulation, or reach of water. 

22 ‘‘(b) PRIOR ACTIVITY.—Subsection (a) does not 

23 apply in the case of— 

24 ‘‘(1) an activity related to the maintenance of 

25 a previously converted wetland; or 
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1 ‘‘(2) an activity that had already commenced 

2 before November 28, 1990. 

3 ‘‘(c) EXCEPTION.—This section shall not apply to a 

4 loan made or guaranteed under this subtitle for a utility 

5 line. 

6 ‘‘SEC. 3431. AUTHORIZATION OF APPROPRIATIONS AND AL7 LOCATION OF FUNDS. 

8 ‘‘(a) AUTHORIZATION FOR LOANS.— 

9 ‘‘(1) IN GENERAL.—The Secretary may make 

10 or guarantee loans under chapters 1 and 2 from the 

11 Agricultural Credit Insurance Fund for not more 

12 than $4,226,000,000 for each of fiscal years 2012 

13 through 2017, of which, for each fiscal year— 

14 ‘‘(A) $1,200,000,000 shall be for direct 

15 loans, of which— 

16 ‘‘(i) $350,000,000 shall be for farm 

17 ownership loans; and 

18 ‘‘(ii) $850,000,000 shall be for oper19 ating loans; and 

20 ‘‘(B) $3,026,000,000 shall be for guaran21 teed loans, of which— 

22 ‘‘(i) $1,000,000,000 shall be for guar23 antees of farm ownership loans; and 

24 ‘‘(ii) $2,026,000,000 shall be for 

25 guarantees of operating loans. 
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1 ‘‘(2) BEGINNING FARMERS.— 

2 ‘‘(A) DIRECT LOANS.— 

3 ‘‘(i) FARM OWNERSHIP LOANS.— 

4 ‘‘(I) IN GENERAL.—Of the 

5 amounts made available under para6 graph (1) for direct farm ownership 

7 loans, the Secretary shall reserve an 

8 amount that is not less than 75 per9 cent of the total amount for qualified 

10 beginning farmers. 

11 ‘‘(II) DOWN PAYMENT LOANS; 

12 JOINT FINANCING ARRANGEMENTS.— 

13 Of the amounts reserved for a fiscal 

14 year under subclause (I), the Sec15 retary shall reserve an amount not 

less than 2 16 ⁄3 of the amount for the 

17 down payment loan program under 

18 section 3107 and joint financing ar19 rangements under section 3105 until 

20 April 1 of the fiscal year. 

21 ‘‘(ii) OPERATING LOANS.—Of the 

22 amounts made available under paragraph 

23 (1) for direct operating loans, the Sec24 retary shall reserve for qualified beginning 

25 farmers for each of fiscal years 2012 
530 

†S 3240 ES

1 through 2017, an amount that is not less 

2 than 50 percent of the total amount. 

3 ‘‘(iii) FUNDS RESERVED UNTIL SEP4 TEMBER 1.—Except as provided in clause 

5 (i)(II), funds reserved for qualified begin6 ning farmers under this subparagraph for 

7 a fiscal year shall be reserved only until 

8 September 1 of the fiscal year. 

9 ‘‘(B) GUARANTEED LOANS.— 

10 ‘‘(i) FARM OWNERSHIP LOANS.—Of 

11 the amounts made available under para12 graph (1) for guarantees of farm owner13 ship loans, the Secretary shall reserve an 

14 amount that is not less than 40 percent of 

15 the total amount for qualified beginning 

16 farmers. 

17 ‘‘(ii) OPERATING LOANS.—Of the 

18 amounts made available under paragraph 

19 (1) for guarantees of operating loans, the 

20 Secretary shall reserve 40 percent for 

21 qualified beginning farmers. 

22 ‘‘(iii) FUNDS RESERVED UNTIL APRIL

23 1.—Funds reserved for qualified beginning 

24 farmers under this subparagraph for a fis-
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1 cal year shall be reserved only until April 

2 1 of the fiscal year. 

3 ‘‘(C) RESERVED FUNDS FOR ALL QUALI4 FIED BEGINNING FARMERS.—If a qualified be5 ginning farmer meets the eligibility criteria for 

6 receiving a direct or guaranteed loan under sec7 tion 3101, 3107, or 3201, the Secretary shall 

8 make or guarantee the loan if sufficient funds 

9 reserved under this paragraph are available to 

10 make or guarantee the loan. 

11 ‘‘(3) TRANSFER FOR DOWN PAYMENT LOANS.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B)— 

14 ‘‘(i) beginning on August 1 of each 

15 fiscal year, the Secretary shall use avail16 able unsubsidized guaranteed farm oper17 ating loan funds to provide direct farm 

18 ownership loans approved by the Secretary 

19 to qualified beginning farmers under the 

20 down payment loan program established 

21 under section 3107, if sufficient direct 

22 farm ownership loan funds are not other23 wise available; and 

24 ‘‘(ii) beginning on September 1 of 

25 each fiscal year, the Secretary shall use 
532 

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1 available unsubsidized guaranteed farm op2 erating loan funds to provide direct farm 

3 ownership loans approved by the Secretary 

4 to qualified beginning farmers, if sufficient 

5 direct farm ownership loan funds are not 

6 otherwise available. 

7 ‘‘(B) LIMITATION.—The Secretary shall 

8 limit the transfer of funds under subparagraph 

9 (A) so that all guaranteed farm operating loans 

10 that have been approved, or will be approved, 

11 by the Secretary during the fiscal year will be 

12 made to the extent of available amounts. 

13 ‘‘(4) TRANSFER FOR CREDIT SALES OF FARM

14 INVENTORY PROPERTY.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graphs (B) and (C), beginning on September 1 

17 of each fiscal year, the Secretary may use avail18 able funds made available under chapter 3 for 

19 the fiscal year to fund the credit sale of farm 

20 real estate in the inventory of the Secretary. 

21 ‘‘(B) SUPPLEMENTAL APPROPRIATIONS.— 

22 The transfer authority provided under subpara23 graph (A) shall not apply to any funds made 

24 available to the Secretary for any fiscal year 
533 

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1 under an Act making supplemental appropria2 tions. 

3 ‘‘(C) LIMITATION.—The Secretary shall 

4 limit the transfer of funds under subparagraph 

5 (A) so that all emergency disaster loans that 

6 have been approved, or will be approved, by the 

7 Secretary during the fiscal year will be made to 

8 the extent of available amounts. 

9 ‘‘(5) AVAILABILITY OF FUNDS.—Funds made 

10 available to carry out this subtitle shall remain avail11 able until expended. 

12 ‘‘(b) COST PROJECTIONS.— 

13 ‘‘(1) IN GENERAL.—The Secretary shall develop 

14 long-term cost projections for loan program author15 izations required under subsection (a). 

16 ‘‘(2) ANALYSIS.—Each projection under para17 graph (1) shall include analyses of— 

18 ‘‘(A) the long-term costs of the lending lev19 els that the Secretary requests to be authorized 

20 under subsection (a); and 

21 ‘‘(B) the long-term costs for increases in 

22 lending levels beyond those requested to be au23 thorized, based on increments of $10,000,000 

24 or such other levels as the Secretary considers 

25 appropriate. 
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1 ‘‘(3) SUBMISSION TO CONGRESS.—The Sec2 retary shall submit to the Committees on Agri3 culture and Appropriations of the House of Rep4 resentatives and the Committees on Agriculture, Nu5 trition, and Forestry and Appropriations of the Sen6 ate reports containing the long-term cost projections 

7 for the 3-year period beginning with fiscal year 1983 

8 and each 3-year period thereafter at the time the re9 quests for authorizations for those periods are sub10 mitted to Congress. 

11 ‘‘(c) LOW-INCOME, LIMITED-RESOURCE BOR12 ROWERS.— 

13 ‘‘(1) RESERVE.—Notwithstanding any other 

14 provision of law, not less than 25 percent of the 

15 loans for farm ownership purposes for each fiscal 

16 year under this subtitle shall be for low-income, lim17 ited-resource borrowers. 

18 ‘‘(2) NOTIFICATION.—The Secretary shall pro19 vide notification to farm borrowers under this sub20 title in the normal course of loan making and loan 

21 servicing operations, of the provisions of this subtitle 

22 relating to low-income, limited-resource borrowers 

23 and the procedures by which persons may apply for 

24 loans under the low-income, limited-resource bor25 rower program.’’. 
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1 Subtitle B—Miscellaneous 

2 SEC. 5101. STATE AGRICULTURAL MEDIATION PROGRAMS. 

3 Section 506 of the Agricultural Credit Act of 1987 

4 (7 U.S.C. 5106) is amended by striking ‘‘2015’’ and in5 serting ‘‘2017’’. 

6 SEC. 5102. LOANS TO PURCHASERS OF HIGHLY 

7 FRACTIONATED LAND. 

8 (a) IN GENERAL.—The first sentence of Public Law 

9 91–229 (25 U.S.C. 488) is amended— 

10 (1) in subsection (a), in the first sentence, by 

11 striking ‘‘loans from’’ and all that follows through 

12 ‘‘1929)’’ and inserting ‘‘direct loans in a manner 

13 consistent with direct loans pursuant to chapter 4 of 

14 subtitle A of the Consolidated Farm and Rural De15 velopment Act’’; 

16 (2) in subsection (b)(1)— 

17 (A) by striking ‘‘pursuant to section 205(c) 

18 of the Indian Land Consolidation Act (25 

19 U.S.C. 2204(c))’’; and 

20 (B) by inserting ‘‘or to intermediaries in 

21 order to establish revolving loan funds for the 

22 purchase of highly fractionated land under that 

23 section’’ before the period at the end; and 

24 (3) by adding at the end the following: 
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1 ‘‘(c) CONSULTATION REQUIRED.—In determining 

2 regulations and procedures to define eligible purchasers of 

3 highly fractionated land under this section, the Secretary 

4 of Agriculture shall consult with the Secretary of the Inte5 rior.’’. 

6 SEC. 5103. REMOVAL OF DUPLICATIVE APPRAISALS. 

7 Notwithstanding any other law (including regula8 tions), in making loans under the first section of Public 

9 Law 91–229 (25 U.S.C. 488), borrowers who are Indian 

10 tribes, members of Indian tribes, or tribal corporations 

11 shall only be required to obtain 1 appraisal under an ap12 praisal standard recognized as of the date of enactment 

13 of this Act by the Secretary or the Secretary of the Inte14 rior. 

15 TITLE VI—RURAL 

16 DEVELOPMENT 

17 Subtitle A—Reorganization of the 

18 Consolidated Farm and Rural 

19 Development Act 

20 SEC. 6001. REORGANIZATION OF THE CONSOLIDATED FARM 

21 AND RURAL DEVELOPMENT ACT. 

22 Title III of the Agricultural Act of 1961 (7 U.S.C. 

23 1921 et seq.) is amended to read as follows: 
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1 ‘‘TITLE III—AGRICULTURAL 

2 CREDIT 

3 ‘‘SEC. 3001. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘Consolidated Farm and Rural Development Act’. 

6 ‘‘(b) TABLE OF CONTENTS.—The table of contents 

7 of this title is as follows: 

‘‘TITLE III—AGRICULTURAL CREDIT 

‘‘Sec. 3001. Short title; table of contents. 

‘‘Sec. 3002. Definitions. 

‘‘Subtitle A—Farmer Loans, Servicing, and Other Assistance 

‘‘CHAPTER 1—FARM OWNERSHIP LOANS

‘‘Sec. 3101. Farm ownership loans. 

‘‘Sec. 3102. Purposes of loans. 

‘‘Sec. 3103. Conservation loan and loan guarantee program. 

‘‘Sec. 3104. Loan maximums. 

‘‘Sec. 3105. Repayment requirements for farm ownership loans. 

‘‘Sec. 3106. Limited-resource loans. 

‘‘Sec. 3107. Downpayment loan program. 

‘‘Sec. 3108. Beginning farmer and socially disadvantaged farmer contract land 

sales program. 

‘‘CHAPTER 2—OPERATING LOANS

‘‘Sec. 3201. Operating loans. 

‘‘Sec. 3202. Purposes of loans. 

‘‘Sec. 3203. Restrictions on loans. 

‘‘Sec. 3204. Terms of loans. 

‘‘CHAPTER 3—EMERGENCY LOANS

‘‘Sec. 3301. Emergency loans. 

‘‘Sec. 3302. Purposes of loans. 

‘‘Sec. 3303. Terms of loans. 

‘‘Sec. 3304. Production losses. 

‘‘CHAPTER 4—GENERAL FARMER LOAN PROVISIONS

‘‘Sec. 3401. Agricultural Credit Insurance Fund. 

‘‘Sec. 3402. Guaranteed farmer loans. 

‘‘Sec. 3403. Provision of information to borrowers. 

‘‘Sec. 3404. Notice of loan service programs. 

‘‘Sec. 3405. Planting and production history guidelines. 

‘‘Sec. 3406. Special conditions and limitations on loans. 

‘‘Sec. 3407. Graduation of borrowers. 
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‘‘Sec. 3408. Debt adjustment and credit counseling. 

‘‘Sec. 3409. Security servicing. 

‘‘Sec. 3410. Contracts on loan security properties. 

‘‘Sec. 3411. Debt restructuring and loan servicing. 

‘‘Sec. 3412. Relief for mobilized military reservists from certain agricultural 

loan obligations. 

‘‘Sec. 3413. Interest rate reduction program. 

‘‘Sec. 3414. Homestead property. 

‘‘Sec. 3415. Transfer of inventory land. 

‘‘Sec. 3416. Target participation rates. 

‘‘Sec. 3417. Compromise or adjustment of debts or claims by guaranteed lender. 

‘‘Sec. 3418. Waiver of mediation rights by borrowers. 

‘‘Sec. 3419. Borrower training. 

‘‘Sec. 3420. Loan assessments. 

‘‘Sec. 3421. Supervised credit. 

‘‘Sec. 3422. Market placement. 

‘‘Sec. 3423. Recordkeeping of loans by gender of borrower. 

‘‘Sec. 3424. Crop insurance requirement. 

‘‘Sec. 3425. Loan and loan servicing limitations. 

‘‘Sec. 3426. Short form certification of farm program borrower compliance. 

‘‘Sec. 3427. Underwriting forms and standards. 

‘‘Sec. 3428. Beginning farmer individual development accounts pilot program. 

‘‘Sec. 3429. Farmer loan pilot projects. 

‘‘Sec. 3430. Prohibition on use of loans for certain purposes. 

‘‘Sec. 3431. Authorization of appropriations and allocation of funds. 

‘‘Subtitle B—Rural Development 

‘‘CHAPTER 1—RURAL COMMUNITY PROGRAMS

‘‘Sec. 3501. Water and waste disposal loans, loan guarantees, and grants. 

‘‘Sec. 3502. Community facilities loans, loan guarantees, and grants. 

‘‘Sec. 3503. Health care services. 

‘‘CHAPTER 2—RURAL BUSINESS AND COOPERATIVE DEVELOPMENT

‘‘Sec. 3601. Business programs. 

‘‘Sec. 3602. Rural business investment program. 

‘‘CHAPTER 3—GENERAL RURAL DEVELOPMENT PROVISIONS

‘‘Sec. 3701. General provisions for loans and grants. 

‘‘Sec. 3702. Strategic economic and community development. 

‘‘Sec. 3703. Guaranteed rural development loans. 

‘‘Sec. 3704. Rural Development Insurance Fund. 

‘‘Sec. 3705. Rural economic area partnership zones. 

‘‘Sec. 3706. Streamlining applications and improving accessibility of rural development programs. 

‘‘Sec. 3707. State Rural Development Partnership. 

‘‘CHAPTER 4—DELTA REGIONAL AUTHORITY

‘‘Sec. 3801. Definitions. 

‘‘Sec. 3802. Delta Regional Authority. 

‘‘Sec. 3803. Economic and community development grants. 

‘‘Sec. 3804. Supplements to Federal grant programs. 
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‘‘Sec. 3805. Local development districts; certification and administrative expenses. 

‘‘Sec. 3806. Distressed counties and areas and nondistressed counties. 

‘‘Sec. 3807. Development planning process. 

‘‘Sec. 3808. Program development criteria. 

‘‘Sec. 3809. Approval of development plans and projects. 

‘‘Sec. 3810. Consent of States. 

‘‘Sec. 3811. Records. 

‘‘Sec. 3812. Annual report. 

‘‘Sec. 3813. Authorization of appropriations. 

‘‘Sec. 3814. Termination of authority. 

‘‘CHAPTER 5—NORTHERN GREAT PLAINS REGIONAL AUTHORITY

‘‘Sec. 3821. Definitions. 

‘‘Sec. 3822. Northern Great Plains Regional Authority. 

‘‘Sec. 3823. Interstate cooperation for economic opportunity and efficiency. 

‘‘Sec. 3824. Economic and community development grants. 

‘‘Sec. 3825. Supplements to Federal grant programs. 

‘‘Sec. 3826. Multistate and local development districts and organizations and 

Northern Great Plains Inc. 

‘‘Sec. 3827. Distressed counties and areas and nondistressed counties. 

‘‘Sec. 3828. Development planning process. 

‘‘Sec. 3829. Program development criteria. 

‘‘Sec. 3830. Approval of development plans and projects. 

‘‘Sec. 3831. Consent of States. 

‘‘Sec. 3832. Records. 

‘‘Sec. 3833. Annual report. 

‘‘Sec. 3834. Authorization of appropriations. 

‘‘Sec. 3835. Termination of authority. 

‘‘Subtitle C—General Provisions 

‘‘Sec. 3901. Full faith and credit. 

‘‘Sec. 3902. Purchase and sale of guaranteed portions of loans. 

‘‘Sec. 3903. Administration. 

‘‘Sec. 3904. Loan moratorium and policy on foreclosures. 

‘‘Sec. 3905. Oil and gas royalty payments on loans. 

‘‘Sec. 3906. Taxation. 

‘‘Sec. 3907. Conflicts of interest. 

‘‘Sec. 3908. Loan summary statements. 

‘‘Sec. 3909. Certified lenders program. 

‘‘Sec. 3910. Loans to resident aliens. 

‘‘Sec. 3911. Expedited clearing of title to inventory property. 

‘‘Sec. 3912. Transfer of land to Secretary. 

‘‘Sec. 3913. Competitive sourcing limitations. 

‘‘Sec. 3914. Regulations. 

1 ‘‘SEC. 3002. DEFINITIONS. 

2 ‘‘In this title (unless the context otherwise requires): 

3 ‘‘(1) ABLE TO OBTAIN CREDIT ELSEWHERE.— 

4 The term ‘able to obtain credit elsewhere’ means 
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1 able to obtain a loan from a production credit asso2 ciation, a Federal land bank, or other responsible co3 operative or private credit source (or, in the case of 

4 a borrower under section 3106, the borrower may be 

5 able to obtain a loan under section 3101) at reason6 able rates and terms, taking into consideration pre7 vailing private and cooperative rates and terms in 

8 the community in or near which the applicant re9 sides for loans for similar purposes and periods of 

10 time. 

11 ‘‘(2) AGRICULTURAL CREDIT INSURANCE

12 FUND.—The term ‘Agricultural Credit Insurance 

13 Fund’ means the fund established under section 

14 3401. 

15 ‘‘(3) APPROVED LENDER.—The term ‘approved 

16 lender’ means— 

17 ‘‘(A) a lender approved prior to October 

18 28, 1992, by the Secretary under the approved 

19 lender program established by exhibit A to sub20 part B of part 1980 of title 7, Code of Federal 

21 Regulations (as in effect on January 1, 1991); 

22 or 

23 ‘‘(B) a lender certified under section 3909. 

24 ‘‘(4) AQUACULTURE.—The term ‘aquaculture’ 

25 means the culture or husbandry of aquatic animals 
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1 or plants by private industry for commercial pur2 poses, including the culture and growing of fish by 

3 private industry for the purpose of creating or aug4 menting publicly owned and regulated stocks of fish. 

5 ‘‘(5) BEGINNING FARMER.—The term ‘begin6 ning farmer’ has the meaning given the term by the 

7 Secretary. 

8 ‘‘(6) BORROWER.— 

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

10 subparagraph (B), the term ‘borrower’ means 

11 an individual or entity who has an outstanding 

12 obligation to the Secretary under any loan 

13 made or guaranteed under this title, without re14 gard to whether the loan has been accelerated. 

15 ‘‘(B) EXCLUSIONS.—The term ‘borrower’ 

16 does not include an individual or entity all of 

17 whose loans and accounts have been foreclosed 

18 on or liquidated, voluntarily or otherwise. 

19 ‘‘(7) COUNTY COMMITTEE.—The term ‘county 

20 committee’ means the appropriate county committee 

21 established under section 8(b)(5) of the Soil Con22 servation and Domestic Allotment Act (16 U.S.C. 

23 590h(b)(5)). 

24 ‘‘(8) DEBT FORGIVENESS.— 
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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), the term ‘debt forgiveness’ 

3 means reducing or terminating a loan made or 

4 guaranteed under this title, in a manner that 

5 results in a loss to the Secretary, through— 

6 ‘‘(i) writing down or writing off a loan 

7 under section 3411; 

8 ‘‘(ii) compromising, adjusting, reduc9 ing, or charging-off a debt or claim under 

10 section 3903; 

11 ‘‘(iii) paying a loss on a guaranteed 

12 loan under this title; or 

13 ‘‘(iv) discharging a debt as a result of 

14 bankruptcy. 

15 ‘‘(B) LOAN RESTRUCTURING.—The term 

16 ‘debt forgiveness’ does not include consolida17 tion, rescheduling, reamortization, or deferral. 

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

19 means the Department of Agriculture. 

20 ‘‘(10) DIRECT LOAN.—The term ‘direct loan’ 

21 means a loan made by the Secretary from appro22 priated funds. 

23 ‘‘(11) ENTITY.—The term ‘entity’ means a cor24 poration, farm cooperative, partnership, joint oper-
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1 ation, governmental entity, or other legal organiza2 tion, as determined by the Secretary. 

3 ‘‘(12) FARM.—The term ‘farm’ means an oper4 ation involved in— 

5 ‘‘(A) the production of an agricultural 

6 commodity; 

7 ‘‘(B) ranching; or 

8 ‘‘(C) aquaculture. 

9 ‘‘(13) FARMER.—The term ‘farmer’ means an 

10 individual or entity engaged primarily and directly 

11 in— 

12 ‘‘(A) the production of an agricultural 

13 commodity; 

14 ‘‘(B) ranching; or 

15 ‘‘(C) aquaculture. 

16 ‘‘(14) FARMER PROGRAM LOAN.—The term 

17 ‘farmer program loan’ means— 

18 ‘‘(A) a farm ownership loan under section 

19 3101; 

20 ‘‘(B) a conservation loan under section 

21 3103; 

22 ‘‘(C) an operating loan under section 3201; 

23 ‘‘(D) an emergency loan under section 

24 3301; 
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1 ‘‘(E) an economic emergency loan under 

2 section 202 of the Emergency Agricultural 

3 Credit Adjustment Act of 1978 (7 U.S.C. prec. 

4 1961 note; Public Law 95–334); 

5 ‘‘(F) a loan for a farm service building 

6 under section 502 of the Housing Act of 1949 

7 (42 U.S.C. 1472); 

8 ‘‘(G) an economic opportunity loan under 

9 section 602 of the Economic Opportunity Act of 

10 1964 (Public Law 88–452; 42 U.S.C. 2942 

11 note) (as it existed before the amendment made 

12 by section 683(a) of the Omnibus Budget Rec13 onciliation Act of 1981 (Public Law 97–35; 95 

14 Stat. 519)); 

15 ‘‘(H) a softwood timber loan under section 

16 608 of the Agricultural Programs Adjustment 

17 Act of 1984 (7 U.S.C. 1981 note; Public Law 

18 98–258); or 

19 ‘‘(I) any other loan described in section 

20 343(a)(10) of this title (as it existed before the 

21 amendment made by section 2 of the Agri22 culture Reform, Food, and Jobs Act of 2012) 

23 that is outstanding on the date of enactment of 

24 that Act. 
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1 ‘‘(15) FARM SERVICE AGENCY.—The term 

2 ‘Farm Service Agency’ means the offices of the 

3 Farm Service Agency to which the Secretary dele4 gates responsibility to carry out this title. 

5 ‘‘(16) GOVERNMENTAL ENTITY.—The term 

6 ‘governmental entity’ means any agency of the 

7 United States, a State, or a unit of local government 

8 of a State, or subdivision thereof. 

9 ‘‘(17) GUARANTEE.—The term ‘guarantee’ 

10 means guaranteeing the payment of a loan origi11 nated, held, and serviced by a private financial agen12 cy, or lender, approved by the Secretary. 

13 ‘‘(18) HIGHLY ERODIBLE LAND.—The term 

14 ‘highly erodible land’ has the meaning given the 

15 term in section 1201(a) of the Food Security Act of 

16 1985 (16 U.S.C. 3801(a)). 

17 ‘‘(19) HOMESTEAD RETENTION.—The term 

18 ‘homestead retention’ means homestead retention as 

19 authorized under section 3414. 

20 ‘‘(20) INDIAN TRIBE.—The term ‘Indian tribe’ 

21 means a Federal and State-recognized Indian tribe 

22 or other federally recognized Indian tribal group (in23 cluding a Tribal College or University, as defined in 

24 section 316(b) of the Higher Education Act of 1965 

25 (20 U.S.C. 1059c(b)). 
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1 ‘‘(21) LOAN SERVICE PROGRAM.—The term 

2 ‘loan service program’ means, with respect to a 

3 farmer program loan borrower, a primary loan serv4 ice program or a homestead retention program. 

5 ‘‘(22) NATURAL OR MAJOR DISASTER OR EMER6 GENCY.—The term ‘natural or major disaster or 

7 emergency’ means— 

8 ‘‘(A) a disaster due to nonmanmade causes 

9 declared by the Secretary; or 

10 ‘‘(B) a major disaster or emergency des11 ignated by the President under the Robert T. 

12 Stafford Disaster Relief and Emergency Assist13 ance Act (42 U.S.C. 5121 et seq.). 

14 ‘‘(23) PRIMARY LOAN SERVICE PROGRAM.—The 

15 term ‘primary loan service program’ means, with re16 spect to a farmer program loan— 

17 ‘‘(A) loan consolidation, rescheduling, or 

18 reamortization; 

19 ‘‘(B) interest rate reduction, including the 

20 use of the limited resource program; 

21 ‘‘(C) loan restructuring, including deferral, 

22 set aside, or writing down of the principal or 

23 accumulated interest charges, or both, of the 

24 loan; or 
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1 ‘‘(D) any combination of actions described 

2 in subparagraphs (A), (B), and (C). 

3 ‘‘(24) PRIME FARMLAND.—The term ‘prime 

4 farmland’ means prime farmland and unique farm5 land (as defined in subsections (a) and (b) of section 

6 657.5 of title 7, Code of Federal Regulations 

7 (1980)). 

8 ‘‘(25) PROJECT.—For purposes of section 

9 3501, the term ‘project’ includes a facility providing 

10 central service or a facility serving an individual 

11 property, or both. 

12 ‘‘(26) QUALIFIED BEGINNING FARMER.—The 

13 term ‘qualified beginning farmer’ means an appli14 cant, regardless of whether the applicant is partici15 pating in a program under section 3107, who— 

16 ‘‘(A) is eligible for assistance under this 

17 title; 

18 ‘‘(B) has not operated a farm, or has oper19 ated a farm for not more than 10 years; 

20 ‘‘(C) in the case of a cooperative, corpora21 tion, partnership, or joint operation, has mem22 bers, stockholders, partners, or joint operators 

23 who are all related to each other by blood or 

24 marriage; 
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1 ‘‘(D) in the case of a farmer who is the 

2 owner and operator of a farm— 

3 ‘‘(i) in the case of a loan made to an 

4 individual, individually or with the imme5 diate family of the applicant— 

6 ‘‘(I) materially and substantially 

7 participates in the operation of the 

8 farm; and 

9 ‘‘(II) provides substantial day-to10 day labor and management of the 

11 farm, consistent with the practices in 

12 the State or county in which the farm 

13 is located; or 

14 ‘‘(ii)(I) in the case of a loan made to 

15 a cooperative, corporation, partnership, or 

16 joint operation, has members, stockholders, 

17 partners, or joint operators who materially 

18 and substantially participate in the oper19 ation of the farm; and 

20 ‘‘(II) in the case of a loan made to a 

21 corporation, has stockholders who all qual22 ify individually as beginning farmers; 

23 ‘‘(E) in the case of an applicant seeking to 

24 become an owner and operator of a farm— 
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1 ‘‘(i) in the case of a loan made to an 

2 individual, individually or with the imme3 diate family of the applicant, will— 

4 ‘‘(I) materially and substantially 

5 participate in the operation of the 

6 farm; and 

7 ‘‘(II) provide substantial day-to8 day labor and management of the 

9 farm, consistent with the practices in 

10 the State or county in which the farm 

11 is located; or 

12 ‘‘(ii)(I) in the case of a loan made to 

13 a cooperative, corporation, partnership, or 

14 joint operation, will have members, stock15 holders, partners, or joint operators who 

16 will materially and substantially participate 

17 in the operation of the farm; and 

18 ‘‘(II) in the case of a loan made to a 

19 corporation, has stockholders who will all 

20 qualify individually as beginning farmers; 

21 ‘‘(F) agrees to participate in such loan as22 sessment, borrower training, and financial man23 agement programs as the Secretary may re24 quire; 

25 ‘‘(G)(i) does not own farm land; or 
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1 ‘‘(ii) directly or through interests in family 

2 farm corporations, owns farm land, the aggre3 gate acreage of which does not exceed 30 per4 cent of the average acreage of the farms, as the 

5 case may be, in the county in which the farm 

6 operations of the applicant are located, as re7 ported in the most recent census of agriculture 

8 taken in accordance with the Census of Agri9 culture Act of 1997 (7 U.S.C. 2204g et seq.), 

10 except that this subparagraph shall not apply to 

11 a loan made or guaranteed under chapter 2 of 

12 subtitle A; and 

13 ‘‘(H) demonstrates that the available re14 sources of the applicant and any spouse of the 

15 applicant are not sufficient to enable the appli16 cant to farm on a viable scale. 

17 ‘‘(27) RECREATIONAL PURPOSE.—For purposes 

18 of section 3410, the term ‘recreational purpose’ has 

19 the meaning provided by the Secretary, but shall in20 clude hunting. 

21 ‘‘(28) RURAL AND RURAL AREA.— 

22 ‘‘(A) IN GENERAL.—Subject to any deter23 mination made under subparagraph (B), the 

24 terms ‘rural’ and ‘rural area’ mean any area 

25 other than— 
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1 ‘‘(i) a city or town that has a popu2 lation of greater than 50,000 inhabitants; 

3 and 

4 ‘‘(ii) any urbanized area contiguous 

5 and adjacent to a city or town described in 

6 clause (i). 

7 ‘‘(B) DETERMINATION OF AREAS RURAL IN

8 CHARACTER.— 

9 ‘‘(i) IN GENERAL.—If part of an area 

10 described in subparagraph (A)(ii) was eli11 gible under the definitions of the terms 

12 ‘rural’ and ‘rural area’ in section 343 (as 

13 in effect on the day before the date of en14 actment of the Agriculture Reform, Food, 

15 and Jobs Act of 2012) for community fa16 cility, water and waste disposal, and 

17 broadband programs, that area shall re18 main eligible unless the Secretary, acting 

19 through the Under Secretary for Rural De20 velopment (referred to in this subpara21 graph as the ‘Under Secretary’), deter22 mines the area is no longer rural, based on 

23 the criteria described in clause (iii). 

24 ‘‘(ii) OTHER AREAS.—On petition of a 

25 unit of local government in an urbanized 
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1 area described in subparagraph (A)(ii), or 

2 on the initiative of the Under Secretary, 

3 the Under Secretary may determine that 

4 part of an area is rural, based on the cri5 teria described in clause (iii). 

6 ‘‘(iii) CRITERIA.—In making a deter7 mination under clause (i), the Under Sec8 retary shall consider— 

9 ‘‘(I) population density; 

10 ‘‘(II) economic conditions, favor11 ing a rural determination for areas 

12 facing— 

13 ‘‘(aa) chronic unemployment 

14 in excess of statewide averages; 

15 ‘‘(bb) sudden loss of employ16 ment from natural disaster or the 

17 loss of a significant employer in 

18 the area; or 

19 ‘‘(cc) chronic poverty dem20 onstrated at the census block or 

21 county level compared to state22 wide median household income; 

23 and 

24 ‘‘(III) commuting patterns, favor25 ing a rural determination for areas 
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1 that can demonstrate higher propor2 tions of the population living and 

3 working in the area. 

4 ‘‘(iv) ADMINISTRATION.—In carrying 

5 out this subparagraph, the Under Sec6 retary shall— 

7 ‘‘(I) not delegate the authority to 

8 carry out this subparagraph; 

9 ‘‘(II) not make a determination 

10 under clause (i) until the date that is 

11 3 years after the date of enactment of 

12 the Agriculture Reform, Food, and 

13 Jobs Act of 2012; 

14 ‘‘(III) consult with the applicable 

15 rural development State or regional 

16 director of the Department and the 

17 Governor of the respective State; 

18 ‘‘(IV) provide an opportunity to 

19 appeal to the Under Secretary a de20 termination made under this subpara21 graph; 

22 ‘‘(V) release to the public notice 

23 of a petition filed or initiative of the 

24 Under Secretary under this subpara25 graph not later than 30 days after re-
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1 ceipt of the petition or the commence2 ment of the initiative, as appropriate; 

3 ‘‘(VI) make a determination 

4 under this subparagraph not less than 

5 15 days, and not more than 60 days, 

6 after the release of the notice under 

7 subclause (V); and 

8 ‘‘(VII) submit to the Committee 

9 on Agriculture of the House of Rep10 resentatives and the Committee on 

11 Agriculture, Nutrition, and Forestry 

12 of the Senate an annual report on ac13 tions taken to carry out this subpara14 graph. 

15 ‘‘(v) HAWAII AND PUERTO RICO.— 

16 Notwithstanding any other provision of 

17 this subsection, within the areas of the 

18 County of Honolulu, Hawaii, and the Com19 monwealth of Puerto Rico, the Under Sec20 retary may designate any part of the areas 

21 as a rural area if the Under Secretary de22 termines that the part is not urban in 

23 character, other than any area included in 

24 the Honolulu Census Designated Place or 

25 the San Juan Census Designated Place. 
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1 ‘‘(C) EXCLUSIONS.—Notwithstanding any 

2 other provision of this paragraph, in deter3 mining which census blocks in an urbanized 

4 area are not in a rural area (as defined in this 

5 paragraph), the Secretary shall exclude any 

6 cluster of census blocks that would otherwise be 

7 considered not in a rural area only because the 

8 cluster is adjacent to not more than 2 census 

9 blocks that are otherwise considered not in a 

10 rural area under this paragraph. 

11 ‘‘(29) SEASONED DIRECT LOAN BORROWER.— 

12 The term ‘seasoned direct loan borrower’ means a 

13 borrower who could reasonably be expected to qual14 ify for commercial credit using criteria determined 

15 by the Secretary. 

16 ‘‘(30) SECRETARY.—The term ‘Secretary’ 

17 means the Secretary of Agriculture. 

18 ‘‘(31) SOCIALLY DISADVANTAGED FARMER.— 

19 The term ‘socially disadvantaged farmer’ means a 

20 farmer who is a member of a socially disadvantaged 

21 group. 

22 ‘‘(32) SOCIALLY DISADVANTAGED GROUP.—The 

23 term ‘socially disadvantaged group’ means a group 

24 whose members have been subjected to racial, ethnic, 

25 or gender prejudice because of the identity of the 
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1 members as members of a group without regard to 

2 the individual qualities of the members. 

3 ‘‘(33) SOLAR ENERGY.—The term ‘solar energy’ 

4 means energy derived from sources (other than fossil 

5 fuels) and technologies included in the Federal Non6 nuclear Energy Research and Development Act of 

7 1974 (42 U.S.C. 5901 et seq.). 

8 ‘‘(34) STATE.—The term ‘State’ means— 

9 ‘‘(A) in this title (other than subtitle A), 

10 each of the 50 States, the Commonwealth of 

11 Puerto Rico, the Virgin Islands, Guam, Amer12 ican Samoa, the Commonwealth of the North13 ern Mariana Islands, the Republic of the Mar14 shall Islands, the Federated States of Micro15 nesia, and the Republic of Palau; and 

16 ‘‘(B) in subtitle A, each of the 50 States, 

17 the Commonwealth of Puerto Rico, the Virgin 

18 Islands, Guam, American Samoa, the Common19 wealth of the Northern Mariana Islands, and, 

20 to the extent the Secretary determines it to be 

21 feasible and appropriate, the Republic of the 

22 Marshall Islands, the Federated States of Mi23 cronesia, and the Republic of Palau. 
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1 ‘‘(35) STATE BEGINNING FARMER PROGRAM.— 

2 The term ‘State beginning farmer program’ means 

3 any program that is— 

4 ‘‘(A) carried out by, or under contract 

5 with, a State; and 

6 ‘‘(B) designed to assist qualified beginning 

7 farmers in obtaining the financial assistance 

8 necessary to enter agriculture and establish via9 ble farming operations. 

10 ‘‘(36) VETERAN.—The term ‘veteran’ has the 

11 meaning given the term in section 101 of title 38, 

12 United States Code. 

13 ‘‘(37) WETLAND.—The term ‘wetland’ has the 

14 meaning given the term in section 1201(a) of the 

15 Food Security Act of 1985 (16 U.S.C. 3801(a)). 

16 ‘‘(38) WILDLIFE.—The term ‘wildlife’ means 

17 fish or wildlife (as defined in section 2(a) of the 

18 Lacey Act Amendments of 1981 (16 U.S.C. 

19 3371(a))). 
558 

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1 ‘‘Subtitle B—Rural Development 

2 ‘‘CHAPTER 1—RURAL COMMUNITY 

3 PROGRAMS 

4 ‘‘SEC. 3501. WATER AND WASTE DISPOSAL LOANS, LOAN 

5 GUARANTEES, AND GRANTS. 

6 ‘‘(a) IN GENERAL.—The Secretary may make grants 

7 and loans and issue loan guarantees (including a guar8 antee of a loan financed by the net proceeds of a bond 

9 described in section 142(a) of the Internal Revenue Code 

10 of 1986) to eligible entities described in subsection (b) for 

11 projects in rural areas that primarily serve rural residents 

12 to provide for— 

13 ‘‘(1) the development, storage, treatment, puri14 fication, or distribution of water or the collection, 

15 treatment, or disposal of waste; and 

16 ‘‘(2) financial assistance and other aid in the 

17 planning of projects for purposes described in para18 graph (1). 

19 ‘‘(b) ELIGIBLE ENTITIES.—Entities eligible for as20 sistance described in subsection (a) are— 

21 ‘‘(1) associations (including corporations not 

22 operated for profit); 

23 ‘‘(2) Indian tribes; 

24 ‘‘(3) public and quasi-public agencies; and 
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1 ‘‘(4) in the case of a project to attach an indi2 vidual property in a rural area to a water system to 

3 alleviate a health risk, an individual. 

4 ‘‘(c) LOAN AND LOAN GUARANTEE REQUIRE5 MENTS.—In connection with loans made or guaranteed 

6 under this section, the Secretary shall require the appli7 cant— 

8 ‘‘(1) to certify in writing, and the Secretary 

9 shall determine, that the applicant is unable to ob10 tain sufficient credit elsewhere to finance the actual 

11 needs of the applicant at reasonable rates and terms, 

12 taking into consideration prevailing private and co13 operative rates and terms in the community in or 

14 near which the applicant resides for loans for similar 

15 purposes and periods of time; and 

16 ‘‘(2) to furnish an appropriate written financial 

17 statement. 

18 ‘‘(d) GRANT AMOUNTS.— 

19 ‘‘(1) MAXIMUM.—Except as otherwise provided 

20 in this subsection, the amount of any grant made 

21 under this section shall not exceed 75 percent of the 

22 development cost of the project for which the grant 

23 is provided. 

24 ‘‘(2) GRANT RATE.—The Secretary shall estab25 lish the grant rate for each project in conformity 
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1 with regulations issued by the Secretary that shall 

2 provide for a graduated scale of grant rates that es3 tablish higher rates for projects in communities that 

4 have— 

5 ‘‘(A) lower community population; 

6 ‘‘(B) higher rates of outmigration; and 

7 ‘‘(C) lower income levels. 

8 ‘‘(3) LOCAL SHARE REQUIREMENTS.—Grants 

9 made under this section may be used to pay the 

10 local share requirements of another Federal grant11 in-aid program to the extent permitted under the 

12 law providing for the grant-in-aid program. 

13 ‘‘(e) SPECIAL GRANTS.— 

14 ‘‘(1) REVOLVING FUNDS FOR FINANCING

15 WATER AND WASTEWATER PROJECTS.— 

16 ‘‘(A) IN GENERAL.—The Secretary may 

17 make grants to qualified, nonprofit entities in 

18 rural areas to capitalize revolving funds for the 

19 purpose of providing financing to eligible enti20 ties for— 

21 ‘‘(i) predevelopment costs associated 

22 with proposed water and wastewater 

23 projects or with existing water and waste24 water systems; and 
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1 ‘‘(ii) short-term costs incurred for re2 placement equipment, small-scale extension 

3 services, or other small capital projects 

4 that are not part of the regular operations 

5 and maintenance activities of existing 

6 water and wastewater systems. 

7 ‘‘(B) MAXIMUM AMOUNT OF FINANCING.— 

8 The amount of financing made to an eligible 

9 entity under this paragraph shall not exceed— 

10 ‘‘(i) $100,000 for costs described in 

11 subparagraph (A)(i); and 

12 ‘‘(ii) $100,000 for costs described in 

13 subparagraph (A)(ii). 

14 ‘‘(C) TERM.—The term of financing pro15 vided to an eligible entity under this paragraph 

16 shall not exceed 10 years. 

17 ‘‘(D) ADMINISTRATION.—The Secretary 

18 shall limit the amount of grant funds that may 

19 be used by a grant recipient for administrative 

20 costs incurred under this paragraph. 

21 ‘‘(E) ANNUAL REPORT.—A nonprofit enti22 ty receiving a grant under this paragraph shall 

23 submit to the Secretary an annual report that 

24 describes the number and size of communities 

25 served and the type of financing provided. 
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1 ‘‘(F) AUTHORIZATION OF APPROPRIA2 TIONS.—There is authorized to be appropriated 

3 to carry out this paragraph $30,000,000 for 

4 each of fiscal years 2013 through 2017. 

5 ‘‘(2) EMERGENCY AND IMMINENT COMMUNITY

6 WATER ASSISTANCE PROGRAM.— 

7 ‘‘(A) IN GENERAL.—The Secretary shall 

8 provide grants in accordance with this para9 graph to assist the residents of rural areas and 

10 small communities to secure adequate quan11 tities of safe water— 

12 ‘‘(i) after a significant decline in the 

13 quantity or quality of water available from 

14 the water supplies of the rural areas and 

15 small communities, or when such a decline 

16 is imminent; or 

17 ‘‘(ii) when repairs, partial replace18 ment, or significant maintenance efforts on 

19 established water systems would remedy— 

20 ‘‘(I) an acute or imminent short21 age of quality water; or 

22 ‘‘(II) a significant or imminent 

23 decline in the quantity or quality of 

24 water that is available. 
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1 ‘‘(B) PRIORITY.—In carrying out subpara2 graph (A), the Secretary shall— 

3 ‘‘(i) give priority to projects described 

4 in subparagraph (A)(i); and 

5 ‘‘(ii) provide at least 70 percent of all 

6 grants under this paragraph to those 

7 projects. 

8 ‘‘(C) ELIGIBILITY.—To be eligible to ob9 tain a grant under this paragraph, an applicant 

10 shall— 

11 ‘‘(i) be a public or private nonprofit 

12 entity; and 

13 ‘‘(ii) in the case of a grant made 

14 under subparagraph (A)(i), demonstrate to 

15 the Secretary that the decline referred to 

16 in that subparagraph occurred, or will 

17 occur, not later than 2 years after the date 

18 on which the application was filed for the 

19 grant. 

20 ‘‘(D) USES.— 

21 ‘‘(i) IN GENERAL.—Grants made 

22 under this paragraph may be used— 

23 ‘‘(I) for waterline extensions from 

24 existing systems, laying of new 

25 waterlines, repairs, significant mainte-
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1 nance, digging of new wells, equip2 ment replacement, and hook and tap 

3 fees; 

4 ‘‘(II) for any other appropriate 

5 purpose associated with developing 

6 sources of, treating, storing, or dis7 tributing water; 

8 ‘‘(III) to assist communities in 

9 complying with the requirements of 

10 the Federal Water Pollution Control 

11 Act (33 U.S.C. 1251 et seq.) or the 

12 Safe Drinking Water Act (42 U.S.C. 

13 300f et seq.); and 

14 ‘‘(IV) to provide potable water to 

15 communities through other means. 

16 ‘‘(ii) JOINT PROPOSALS.— 

17 ‘‘(I) IN GENERAL.—Subject to 

18 the restrictions in subparagraph (E), 

19 nothing in this paragraph precludes 

20 rural communities from submitting 

21 joint proposals for emergency water 

22 assistance. 

23 ‘‘(II) CONSIDERATION OF RE24 STRICTIONS.—The restrictions in sub25 paragraph (E) shall be considered in 
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1 the aggregate, depending on the num2 ber of communities involved. 

3 ‘‘(E) RESTRICTIONS.— 

4 ‘‘(i) MAXIMUM INCOME.—No grant 

5 provided under this paragraph shall be 

6 used to assist any rural area or community 

7 that has a median household income in ex8 cess of the State nonmetropolitan median 

9 household income according to the most re10 cent decennial census of the United States. 

11 ‘‘(ii) SET-ASIDE FOR SMALLER COM12 MUNITIES.—Not less than 50 percent of 

13 the funds allocated under this paragraph 

14 shall be allocated to rural communities 

15 with populations that do not exceed 3,000 

16 inhabitants. 

17 ‘‘(F) MAXIMUM GRANTS.—Grants made 

18 under this paragraph may not exceed— 

19 ‘‘(i) in the case of each grant made 

20 under subparagraph (A)(i), $500,000; and 

21 ‘‘(ii) in the case of each grant made 

22 under subparagraph (A)(ii), $150,000. 

23 ‘‘(G) FULL FUNDING.—Subject to sub24 paragraph (F), grants under this paragraph 

25 shall be made in an amount equal to 100 per-
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1 cent of the costs of the projects conducted 

2 under this paragraph. 

3 ‘‘(H) APPLICATION.— 

4 ‘‘(i) NATIONALLY COMPETITIVE AP5 PLICATION PROCESS.— 

6 ‘‘(I) IN GENERAL.—The Sec7 retary shall develop a nationally com8 petitive application process to award 

9 grants under this paragraph. 

10 ‘‘(II) REQUIREMENTS.—The 

11 process shall include criteria for evalu12 ating applications, including popu13 lation, median household income, and 

14 the severity of the decline, or immi15 nent decline, in the quantity or qual16 ity of water. 

17 ‘‘(ii) TIMING OF REVIEW OF APPLICA18 TIONS.— 

19 ‘‘(I) SIMPLIFIED APPLICATION.— 

20 The application process developed by 

21 the Secretary under clause (i) shall in22 clude a simplified application form 

23 that will permit expedited consider24 ation of an application for a grant 

25 filed under this paragraph. 
567 

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1 ‘‘(II) PRIORITY REVIEW.—In 

2 processing applications for any water 

3 or waste grant or loan authorized 

4 under this section, the Secretary shall 

5 afford priority processing to an appli6 cation for a grant under this para7 graph to the extent funds will be 

8 available for an award on the applica9 tion at the conclusion of priority proc10 essing. 

11 ‘‘(III) TIMING.—The Secretary 

12 shall, to the maximum extent prac13 ticable, review and act on an applica14 tion under this paragraph not later 

15 than 60 days after the date on which 

16 the application is submitted to the 

17 Secretary. 

18 ‘‘(I) FUNDING.— 

19 ‘‘(i) RESERVATION.— 

20 ‘‘(I) IN GENERAL.—For each fis21 cal year, not less than 3 nor more 

22 than 5 percent of the total amount 

23 made available to carry out this sec24 tion for the fiscal year shall be re-
568 

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1 served for grants under this para2 graph. 

3 ‘‘(II) RELEASE.—Funds reserved 

4 under subclause (I) for a fiscal year 

5 shall be reserved only until July 1 of 

6 the fiscal year. 

7 ‘‘(ii) AUTHORIZATION OF APPROPRIA8 TIONS.—In addition to funds made avail9 able under clause (i), there is authorized to 

10 be appropriated to carry out this para11 graph $35,000,000 for each of fiscal years 

12 2013 through 2017. 

13 ‘‘(3) WATER AND WASTE FACILITY LOANS AND

14 GRANTS TO ALLEVIATE HEALTH RISKS.— 

15 ‘‘(A) DEFINITION OF COOPERATIVE.—In 

16 this paragraph, the term ‘cooperative’ means a 

17 cooperative formed specifically for the purpose 

18 of the installation, expansion, improvement, or 

19 operation of water supply or waste disposal fa20 cilities or systems. 

21 ‘‘(B) LOANS AND GRANTS TO PERSONS

22 OTHER THAN INDIVIDUALS.— 

23 ‘‘(i) IN GENERAL.—The Secretary 

24 shall make or guarantee loans and make 

25 grants to provide for the conservation, de-
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1 velopment, use, and control of water (in2 cluding the extension or improvement of 

3 existing water supply systems) and the in4 stallation or improvement of drainage or 

5 waste disposal facilities and essential com6 munity facilities, including necessary re7 lated equipment, training, and technical 

8 assistance to— 

9 ‘‘(I) rural water supply corpora10 tions, cooperatives, or similar entities; 

11 ‘‘(II) Indian tribes on Federal or 

12 State reservations and other federally 

13 recognized Indian tribes; 

14 ‘‘(III) rural or native villages in 

15 the State of Alaska; 

16 ‘‘(IV) native tribal health consor17 tiums; 

18 ‘‘(V) public agencies; and 

19 ‘‘(VI) Native Hawaiian Home 

20 Lands. 

21 ‘‘(ii) ELIGIBLE PROJECTS.—Loans 

22 and grants described in clause (i) shall be 

23 available only to provide the described 

24 water and waste facilities and services to 

25 communities whose residents face signifi-
570 

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1 cant health risks, as determined by the 

2 Secretary, due to the fact that a significant 

3 proportion of the residents of the commu4 nity do not have access to, or are not 

5 served by, adequate affordable— 

6 ‘‘(I) water supply systems; or 

7 ‘‘(II) waste disposal facilities. 

8 ‘‘(iii) MATCHING REQUIREMENTS.— 

9 For entities described under subclauses 

10 (III), (IV), or (V) of clause (i) to be eligi11 ble to receive a grant for water supply sys12 tems or waste disposal facilities, the State 

13 in which the project will occur shall pro14 vide 25 percent in matching funds from 

15 non-Federal sources. 

16 ‘‘(iv) CERTAIN AREAS TARGETED.— 

17 ‘‘(I) IN GENERAL.—Loans and 

18 grants under clause (i) shall be made 

19 only if the loan or grant funds will be 

20 used primarily to provide water or 

21 waste services, or both, to residents of 

22 a county or census area— 

23 ‘‘(aa) the per capita income 

24 of the residents of which is not 

25 more than 70 percent of the na-
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1 tional average per capita income, 

2 as determined by the Department 

3 of Commerce; and 

4 ‘‘(bb) the unemployment 

5 rate of the residents of which is 

6 not less than 125 percent of the 

7 national average unemployment 

8 rate, as determined by the Bu9 reau of Labor Statistics. 

10 ‘‘(II) EXCEPTIONS.—Notwith11 standing subclause (I), loans and 

12 grants under clause (i) may also be 

13 made if the loan or grant funds will 

14 be used primarily to provide water or 

15 waste services, or both, to residents 

16 of— 

17 ‘‘(aa) a rural area that was 

18 recognized as a colonia as of Oc19 tober 1, 1989; or 

20 ‘‘(bb) an area described 

21 under subclause (II), (III), or 

22 (VI) of clause (i). 

23 ‘‘(C) LOANS AND GRANTS TO INDIVID24 UALS.— 
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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall make or guarantee loans and make 

3 grants to individuals who reside in a com4 munity described in subparagraph (B)(i) 

5 for the purpose of extending water supply 

6 and waste disposal systems, connecting the 

7 systems to the residences of the individ8 uals, or installing plumbing and fixtures 

9 within the residences of the individuals to 

10 facilitate the use of the water supply and 

11 waste disposal systems. 

12 ‘‘(ii) INTEREST.—Loans described in 

13 clause (i) shall be at a rate of interest no 

14 greater than the Federal Financing Bank 

15 rate on loans of a similar term at the time 

16 the loans are made. 

17 ‘‘(iii) AMORTIZATION.—The repay18 ment of loans described in clause (i) shall 

19 be amortized over the expected life of the 

20 water supply or waste disposal system to 

21 which the residence of the borrower will be 

22 connected. 

23 ‘‘(iv) MANNER IN WHICH LOANS AND

24 GRANTS ARE TO BE MADE.—Loans and 
573 

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1 grants to individuals under clause (i) shall 

2 be made— 

3 ‘‘(I) directly to the individuals by 

4 the Secretary; or 

5 ‘‘(II) to the individuals through 

6 the rural water supply corporation, 

7 cooperative, or similar entity, or pub8 lic agency, providing the water supply 

9 or waste disposal services, pursuant to 

10 regulations issued by the Secretary. 

11 ‘‘(D) PREFERENCE.—The Secretary shall 

12 give preference in the awarding of loans and 

13 grants under subparagraphs (B) and (C) to en14 tities described in clause (i) of subparagraph 

15 (B) that propose to provide water supply or 

16 waste disposal services to the residents of In17 dian reservations, rural or native villages in the 

18 State of Alaska, Native Hawaiian Home Lands, 

19 and those rural subdivisions commonly referred 

20 to as colonias, that are characterized by sub21 standard housing, inadequate roads and drain22 age, and a lack of adequate water or waste fa23 cilities. 

24 ‘‘(E) RELATIONSHIP TO OTHER AUTHOR25 ITY.—Notwithstanding any other provision of 
574 

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1 law, the head of any Federal agency may enter 

2 into interagency agreements with Federal, 

3 State, tribal, and other entities to share re4 sources, including transferring and accepting 

5 funds, equipment, or other supplies, to carry 

6 out the activities described in this paragraph. 

7 ‘‘(F) AUTHORIZATION OF APPROPRIA8 TIONS.—There are authorized to be appro9 priated— 

10 ‘‘(i) for grants under this paragraph, 

11 $60,000,000 for each fiscal year; 

12 ‘‘(ii) for loans under this paragraph, 

13 $60,000,000 for each fiscal year; and 

14 ‘‘(iii) in addition to grants provided 

15 under clause (i), for grants under this sec16 tion to benefit Indian tribes, $20,000,000 

17 for each fiscal year. 

18 ‘‘(4) SOLID WASTE MANAGEMENT GRANTS.— 

19 ‘‘(A) IN GENERAL.—The Secretary may 

20 make grants to nonprofit organizations for the 

21 provision of regional technical assistance to 

22 local and regional governments and related 

23 agencies for the purpose of reducing or elimi24 nating pollution of water resources and improv-
575 

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1 ing the planning and management of solid 

2 waste disposal facilities in rural areas. 

3 ‘‘(B) TECHNICAL ASSISTANCE GRANT

4 AMOUNTS.—Grants made under this paragraph 

5 for the provision of technical assistance shall be 

6 made for 100 percent of the cost of the tech7 nical assistance. 

8 ‘‘(C) AUTHORIZATION OF APPROPRIA9 TIONS.—There is authorized to be appropriated 

10 to carry out this paragraph $10,000,000 for 

11 each of fiscal years 2013 through 2017 

12 ‘‘(5) RURAL WATER AND WASTEWATER TECH13 NICAL ASSISTANCE AND TRAINING PROGRAMS.— 

14 ‘‘(A) GRANTS TO NONPROFITS.— 

15 ‘‘(i) IN GENERAL.—The Secretary 

16 may make grants to nonprofit organiza17 tions to enable the organizations to provide 

18 to associations that provide water and 

19 wastewater services in rural areas technical 

20 assistance and training— 

21 ‘‘(I) to identify, and evaluate al22 ternative solutions to, problems relat23 ing to the obtaining, storage, treat24 ment, purification, or distribution of 
576 

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1 water or the collection, treatment, or 

2 disposal of waste in rural areas; 

3 ‘‘(II) to prepare applications to 

4 receive financial assistance for any 

5 purpose specified in subsection (a)(1) 

6 from any public or private source; and 

7 ‘‘(III) to improve the operation 

8 and maintenance practices at any ex9 isting works for the storage, treat10 ment, purification, or distribution of 

11 water or the collection, treatment, or 

12 disposal of waste in rural areas. 

13 ‘‘(ii) SELECTION PRIORITY.—In se14 lecting recipients of grants to be made 

15 under clause (i), the Secretary shall give 

16 priority to nonprofit organizations that 

17 have experience in providing the technical 

18 assistance and training described in clause 

19 (i) to associations serving rural areas in 

20 which— 

21 ‘‘(I) residents have low income; 

22 and 

23 ‘‘(II) water supply systems or 

24 waste facilities are unhealthful. 

25 ‘‘(iii) FUNDING.— 
577 

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1 ‘‘(I) IN GENERAL.—Except as 

2 provided in subclause (II), not less 

3 than 1 nor more than 3 percent of 

4 any funds made available to carry out 

5 water and waste disposal projects de6 scribed in subsection (a) for any fiscal 

7 year shall be reserved for grants 

8 under this paragraph. 

9 ‘‘(II) EXCEPTION.—The min10 imum amount specified in subclause 

11 (I) shall not apply if the aggregate 

12 amount of grant funds requested by 

13 applications that qualify for grants re14 ceived by the Secretary from eligible 

15 nonprofit organizations for the fiscal 

16 year totals less than 1 percent of 

17 those funds. 

18 ‘‘(B) RURAL WATER AND WASTEWATER

19 CIRCUIT RIDER PROGRAM.— 

20 ‘‘(i) IN GENERAL.—The Secretary 

21 shall continue a national rural water and 

22 wastewater circuit rider program that— 

23 ‘‘(I) is consistent with the activi24 ties and results of the program con-
578 

†S 3240 ES

1 ducted before January 1, 2012, as de2 termined by the Secretary; and 

3 ‘‘(II) received funding from the 

4 Secretary, acting through the Admin5 istrator of the Rural Utilities Service. 

6 ‘‘(ii) AUTHORIZATION OF APPROPRIA7 TIONS.—There is authorized to be appro8 priated to carry out this subparagraph 

9 $25,000,000 for fiscal year 2013 and each 

10 fiscal year thereafter. 

11 ‘‘(6) SEARCH PROGRAM.— 

12 ‘‘(A) IN GENERAL.—The Secretary may es13 tablish a Special Evaluation Assistance for 

14 Rural Communities and Households 

15 (SEARCH) program to make predevelopment 

16 planning grants for feasibility studies, design 

17 assistance, and technical assistance, to finan18 cially distressed communities in rural areas 

19 with populations of 2,500 or fewer inhabitants 

20 for water and waste disposal projects described 

21 in this section. 

22 ‘‘(B) TERMS.— 

23 ‘‘(i) DOCUMENTATION.—With respect 

24 to grants made under this paragraph, the 
579 

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1 Secretary shall require the lowest quantity 

2 of documentation practicable. 

3 ‘‘(ii) MATCHING.—Notwithstanding 

4 any other provision of this section, the Sec5 retary may fund up to 100 percent of the 

6 eligible costs of grants provided under this 

7 paragraph, as determined by the Secretary. 

8 ‘‘(iii) FUNDING.—The Secretary may 

9 use not more than 4 percent of the total 

10 amount of funds made available for a fiscal 

11 year for water, waste disposal, and essen12 tial community facility activities under this 

13 chapter to carry out this paragraph. 

14 ‘‘(C) RELATIONSHIP TO OTHER AUTHOR15 ITY.— 

16 ‘‘(i) IN GENERAL.—The funds and au17 thorities provided under this paragraph are 

18 in addition to any other funds or authori19 ties the Secretary may have to carry out 

20 activities described in this section. 

21 ‘‘(ii) AUTHORIZED ACTIVITIES.—The 

22 Secretary may furnish financial assistance 

23 or other aid in planning projects for the 

24 purposes described in subparagraph (A). 
580 

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1 ‘‘(f) PRIORITY.—In making grants and loans, and 

2 guaranteeing loans, for water, wastewater, and waste dis3 posal projects under this section, the Secretary shall give 

4 priority consideration to projects that serve rural commu5 nities that, as determined by the Secretary— 

6 ‘‘(1) have a population of less than 5,500 per7 manent residents; 

8 ‘‘(2) have a community water, wastewater, or 

9 waste disposal system that— 

10 ‘‘(A) is experiencing— 

11 ‘‘(i) an unanticipated reduction in the 

12 quality of water, the quantity of water, or 

13 the ability to deliver water; or 

14 ‘‘(ii) some other deterioration in the 

15 supply of water to the community; 

16 ‘‘(B) is not adequate to meet the needs of 

17 the community; and 

18 ‘‘(C) requires immediate corrective action; 

19 ‘‘(3) are experiencing outmigration; 

20 ‘‘(4) have a high percentage of low-income resi21 dents; or 

22 ‘‘(5) are isolated from other significant popu23 lation centers. 

24 ‘‘(g) CURTAILMENT OR LIMITATION OF SERVICE

25 PROHIBITED.—The service provided or made available 
581 

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1 through any such association shall not be curtailed or lim2 ited by inclusion of the area served by such association 

3 within the boundaries of any municipal corporation or 

4 other public body, or by the granting of any private fran5 chise for similar service within such area during the term 

6 of such loan; nor shall the happening of any such event 

7 be the basis of requiring such association to secure any 

8 franchise, license, or permit as a condition to continuing 

9 to serve the area served by the association at the time 

10 of the occurrence of such event. 

11 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to carry out this section 

13 such sums as are necessary. 

14 ‘‘SEC. 3502. COMMUNITY FACILITIES LOANS, LOAN GUARAN15 TEES, AND GRANTS. 

16 ‘‘(a) IN GENERAL.—The Secretary may make grants 

17 and loans and issue loan guarantees (including a guar18 antee of a loan financed by the net proceeds of a bond 

19 described in section 142(a) of the Internal Revenue Code 

20 of 1986) to eligible entities described in subsection (b) for 

21 projects in rural areas that primarily serve rural residents 

22 to provide for— 

23 ‘‘(1) essential community facilities, including— 

24 ‘‘(A) necessary equipment; 

25 ‘‘(B) recreational developments; and 
582 

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1 ‘‘(2) financial assistance and other assistance in 

2 the planning of projects for purposes described in 

3 this section. 

4 ‘‘(b) ELIGIBLE ENTITIES.—Entities eligible for as5 sistance described in subsection (a) are— 

6 ‘‘(1) associations (including corporations not 

7 operated for profit); 

8 ‘‘(2) Indian tribes (including groups of individ9 uals described in paragraph (4) of section 815 of the 

10 Native American Programs Act of 1974 (42 U.S.C. 

11 2992c)); and 

12 ‘‘(3) public and quasi-public agencies. 

13 ‘‘(c) LOAN AND LOAN GUARANTEE REQUIRE14 MENTS.— 

15 ‘‘(1) IN GENERAL.—In connection with loans 

16 made or guaranteed under this section, the Sec17 retary shall require the applicant— 

18 ‘‘(A) to certify in writing, and the Sec19 retary shall determine, that the applicant is un20 able to obtain sufficient credit elsewhere to fi21 nance the actual needs of the applicant; and 

22 ‘‘(B) to furnish an appropriate written fi23 nancial statement. 

24 ‘‘(2) DEBT RESTRUCTURING AND LOAN SERV25 ICING FOR COMMUNITY FACILITY LOANS.—The Sec-
583 

†S 3240 ES

1 retary shall establish and implement a program that 

2 is similar to the program established under section 

3 3411, except that the debt restructuring and loan 

4 servicing procedures shall apply to delinquent com5 munity facility program loans to a hospital or health 

6 care facility under subsection (a). 

7 ‘‘(d) GRANT AMOUNTS.— 

8 ‘‘(1) MAXIMUM.—Except as otherwise provided 

9 in this subsection, the amount of any grant made 

10 under this section shall not exceed 75 percent of the 

11 development cost of the project for which the grant 

12 is provided. 

13 ‘‘(2) GRANT RATE.—The Secretary shall estab14 lish the grant rate for each project in conformity 

15 with regulations issued by the Secretary that shall 

16 provide for a graduated scale of grant rates that es17 tablish higher rates for projects in communities that 

18 have— 

19 ‘‘(A) low community population; 

20 ‘‘(B) high rates of outmigration; and 

21 ‘‘(C) low income levels. 

22 ‘‘(3) LOCAL SHARE REQUIREMENTS.—Grants 

23 made under this section may be used to pay the 

24 local share requirements of another Federal grant- 
584 

†S 3240 ES

1 in-aid program to the extent permitted under the 

2 law providing for the grant-in-aid program. 

3 ‘‘(e) PRIORITY.—In making grants and loans, and 

4 guaranteeing loans under this section, the Secretary shall 

5 give priority consideration to projects that serve rural 

6 communities that— 

7 ‘‘(1) have a population of less than 20,000 per8 manent residents; 

9 ‘‘(2) are experiencing outmigration; 

10 ‘‘(3) have a high percentage of low-income resi11 dents; or 

12 ‘‘(4) are isolated from other significant popu13 lation centers. 

14 ‘‘(f) TRIBAL COLLEGES AND UNIVERSITIES.— 

15 ‘‘(1) IN GENERAL.—The Secretary may make 

16 grants to an entity that is a Tribal College or Uni17 versity (as defined in section 316(b) of the Higher 

18 Education Act of 1965 (20 U.S.C. 1059c(b))) to 

19 provide the Federal share of the cost of developing 

20 specific Tribal College or University essential com21 munity facilities in rural areas. 

22 ‘‘(2) FEDERAL SHARE.—The Secretary shall es23 tablish the maximum percentage of the cost of the 

24 project that may be covered by a grant under this 

25 subsection, except that the Secretary may not re-
585 

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1 quire non-Federal financial support in an amount 

2 that is greater than 5 percent of the total cost of the 

3 project. 

4 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

5 There is authorized to be appropriated to carry out 

6 this subsection $10,000,000 for each of fiscal years 

7 2013 through 2017. 

8 ‘‘(g) TECHNICAL ASSISTANCE FOR COMMUNITY FA9 CILITIES PROJECTS.— 

10 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

11 the Secretary may use funds made available for com12 munity facilities programs authorized under this sec13 tion to provide technical assistance to applicants and 

14 participants for community facilities programs. 

15 ‘‘(2) FUNDING.—The Secretary may use not 

16 more than 3 percent of the amount of funds made 

17 available to participants for a fiscal year for a com18 munity facilities program to provide technical assist19 ance described in paragraph (1). 

20 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 

21 are authorized to be appropriated to carry out this section 

22 such sums as are necessary. 

23 ‘‘SEC. 3503. HEALTH CARE SERVICES. 

24 ‘‘(a) PURPOSE.—The purpose of this section is to ad25 dress the continued unmet health needs in the Delta re-
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1 gion through cooperation among health care professionals, 

2 institutions of higher education, research institutions, and 

3 other individuals and entities in the region. 

4 ‘‘(b) DEFINITION OF ELIGIBLE ENTITY.—In this sec5 tion, the term ‘eligible entity’ means a consortium of re6 gional institutions of higher education, academic health 

7 and research institutes, and economic development entities 

8 located in the Delta region that have experience in ad9 dressing the health care issues in the region. 

10 ‘‘(c) GRANTS.—To carry out the purpose described 

11 in subsection (a), the Secretary may award a grant to an 

12 eligible entity for— 

13 ‘‘(1) the development of— 

14 ‘‘(A) health care services; 

15 ‘‘(B) health education programs; and 

16 ‘‘(C) health care job training programs; 

17 and 

18 ‘‘(2) the development and expansion of public 

19 health-related facilities in the Delta region to ad20 dress longstanding and unmet health needs of the 

21 region. 

22 ‘‘(d) USE.—As a condition of the receipt of the grant, 

23 the eligible entity shall use the grant to fund projects and 

24 activities described in subsection (c), based on input solic-
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1 ited from local governments, public health care providers, 

2 and other entities in the Delta region. 

3 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

4 is authorized to be appropriated to the Secretary to carry 

5 out this section $3,000,000 for each of fiscal years 2013 

6 through 2017. 

7 ‘‘CHAPTER 2—RURAL BUSINESS AND 

8 COOPERATIVE DEVELOPMENT 

9 ‘‘SEC. 3601. BUSINESS PROGRAMS. 

10 ‘‘(a) RURAL BUSINESS DEVELOPMENT GRANTS.— 

11 ‘‘(1) IN GENERAL.—The Secretary may make 

12 grants under this subsection to eligible entities de13 scribed in paragraph (2) in rural areas that pri14 marily serve rural areas for purposes described in 

15 paragraph (3). 

16 ‘‘(2) ELIGIBLE ENTITIES.—The Secretary may 

17 make grants under this subsection to— 

18 ‘‘(A) governmental entities; 

19 ‘‘(B) Indian tribes; and 

20 ‘‘(C) nonprofit entities. 

21 ‘‘(3) ELIGIBLE PURPOSES FOR GRANTS.—Eligi22 ble entities that receive grants under this subsection 

23 may use the grant funds for— 

24 ‘‘(A) business opportunity projects that— 
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1 ‘‘(i) identify and analyze business op2 portunities; 

3 ‘‘(ii) identify, train, and provide tech4 nical assistance to existing or prospective 

5 rural entrepreneurs and managers; 

6 ‘‘(iii) assist in the establishment of 

7 new rural businesses and the maintenance 

8 of existing businesses, including through 

9 business support centers; 

10 ‘‘(iv) conduct regional, community, 

11 and local economic development planning 

12 and coordination, and leadership develop13 ment; and 

14 ‘‘(v) establish centers for training, 

15 technology, and trade that will provide 

16 training to rural businesses in the use of 

17 interactive communications technologies to 

18 develop international trade opportunities 

19 and markets; and 

20 ‘‘(B) projects that support the development 

21 of business enterprises that finance or facili22 tate— 

23 ‘‘(i) the development of small and 

24 emerging private business enterprise; 
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1 ‘‘(ii) the establishment, expansion, 

2 and operation of rural distance learning 

3 networks; 

4 ‘‘(iii) the development of rural learn5 ing programs that provide educational in6 struction or job training instruction related 

7 to potential employment or job advance8 ment to adult students; and 

9 ‘‘(iv) the provision of technical assist10 ance and training to rural communities for 

11 the purpose of improving passenger trans12 portation services or facilities. 

13 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

14 There is authorized to be appropriated to the Sec15 retary to carry out this subsection $65,000,000 for 

16 each of fiscal years 2013 through 2017, to remain 

17 available until expended. 

18 ‘‘(b) VALUE-ADDED AGRICULTURAL PRODUCER

19 GRANTS.— 

20 ‘‘(1) DEFINITIONS.—In this subsection: 

21 ‘‘(A) MID-TIER VALUE CHAIN.—The term 

22 ‘mid-tier value chain’ means a local and re23 gional supply network that links independent 

24 producers with businesses and cooperatives that 
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1 market value-added agricultural products in a 

2 manner that— 

3 ‘‘(i) targets and strengthens the prof4 itability and competitiveness of small- and 

5 medium-sized farms that are structured as 

6 family farms; and 

7 ‘‘(ii) obtains agreement from an eligi8 ble agricultural producer group, farmer co9 operative, or majority-controlled producer10 based business venture that is engaged in 

11 the value chain on a marketing strategy. 

12 ‘‘(B) PRODUCER.—The term ‘producer’ 

13 means a farmer. 

14 ‘‘(C) VALUE-ADDED AGRICULTURAL PROD15 UCT.—The term ‘value-added agricultural prod16 uct’ means any agricultural commodity or prod17 uct— 

18 ‘‘(i) that— 

19 ‘‘(I) has undergone a change in 

20 physical state; 

21 ‘‘(II) was produced in a manner 

22 that enhances the value of the agricul23 tural commodity or product, as dem24 onstrated through a business plan 
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1 that shows the enhanced value, as de2 termined by the Secretary; 

3 ‘‘(III) is physically segregated in 

4 a manner that results in the enhance5 ment of the value of the agricultural 

6 commodity or product; 

7 ‘‘(IV) is a source of farm-based 

8 renewable energy, including E–85 

9 fuel; or 

10 ‘‘(V) is aggregated and marketed 

11 as a locally produced agricultural food 

12 product; and 

13 ‘‘(ii) for which, as a result of the 

14 change in physical state or the manner in 

15 which the agricultural commodity or prod16 uct was produced, marketed, or seg17 regated— 

18 ‘‘(I) the customer base for the 

19 agricultural commodity or product is 

20 expanded; and 

21 ‘‘(II) a greater portion of the rev22 enue derived from the marketing, 

23 processing, or physical segregation of 

24 the agricultural commodity or product 
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1 is available to the producer of the 

2 commodity or product. 

3 ‘‘(2) GRANTS.— 

4 ‘‘(A) IN GENERAL.—The Secretary may 

5 make grants under this subsection to— 

6 ‘‘(i) independent producers of value7 added agricultural products; and 

8 ‘‘(ii) an agricultural producer group, 

9 farmer cooperative, or majority-controlled 

10 producer-based business venture, as deter11 mined by the Secretary. 

12 ‘‘(B) GRANTS TO A PRODUCER.—A grantee 

13 under subparagraph (A)(i) shall use the 

14 grant— 

15 ‘‘(i) to develop a business plan or per16 form a feasibility study to establish a via17 ble marketing opportunity (including 

18 through mid-tier value chains) for value19 added agricultural products; or 

20 ‘‘(ii) to provide capital to establish al21 liances or business ventures that allow the 

22 producer to better compete in domestic or 

23 international markets. 

24 ‘‘(C) GRANTS TO AN AGRICULTURAL PRO25 DUCER GROUP, COOPERATIVE OR PRODUCER- 
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1 BASED BUSINESS VENTURE.—A grantee under 

2 subparagraph (A)(ii) shall use the grant— 

3 ‘‘(i) to develop a business plan for via4 ble marketing opportunities in emerging 

5 markets for a value-added agricultural 

6 product; or 

7 ‘‘(ii) to develop strategies that are in8 tended to create marketing opportunities 

9 in emerging markets for the value-added 

10 agricultural product. 

11 ‘‘(D) AWARD SELECTION.— 

12 ‘‘(i) PRIORITY.—In awarding grants 

13 under this subsection, the Secretary shall 

14 give priority to projects— 

15 ‘‘(I) that contribute to increasing 

16 opportunities for operators of small17 and medium-sized farms that are 

18 structured as family farms; or 

‘‘(II) at least 1 19 ⁄4 of the recipients 

20 of which are beginning farmers or so21 cially disadvantaged farmers. 

22 ‘‘(ii) RANKING.—In evaluating and 

23 ranking proposals under this subsection, 

24 the Secretary shall provide substantial 
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1 weight to the priorities described in clause 

2 (i). 

3 ‘‘(E) AMOUNT OF GRANT.— 

4 ‘‘(i) IN GENERAL.—The total amount 

5 provided to a grant recipient under this 

6 subsection shall not exceed $500,000. 

7 ‘‘(ii) MAJORITY-CONTROLLED, PRO8 DUCER-BASED BUSINESS VENTURES.—The 

9 total amount of all grants provided to ma10 jority-controlled, producer-based business 

11 ventures under this subsection for a fiscal 

12 year shall not exceed 10 percent of the 

13 amount of funds used to make all grants 

14 for the fiscal year under this subsection. 

15 ‘‘(F) TERM.—The term of a grant under 

16 this paragraph shall not exceed 3 years. 

17 ‘‘(G) SIMPLIFIED APPLICATION.—The Sec18 retary shall offer a simplified application form 

19 and process for project proposals requesting 

20 less than $50,000 under this subsection. 

21 ‘‘(3) FUNDING.— 

22 ‘‘(A) AUTHORIZATION OF APPROPRIA23 TIONS.—There is authorized to be appropriated 

24 to carry out this subsection $40,000,000 for 

25 each of fiscal years 2013 through 2017. 
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1 ‘‘(B) RESERVATION OF FUNDS FOR

2 PROJECTS TO BENEFIT BEGINNING FARMERS, 

3 SOCIALLY DISADVANTAGED FARMERS, AND MID4 TIER VALUE CHAINS.— 

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall reserve 10 percent of the amounts 

7 made available for each fiscal year under 

8 this subsection to fund projects that ben9 efit beginning farmers or socially disadvan10 taged farmers. 

11 ‘‘(ii) MID-TIER VALUE CHAINS.—The 

12 Secretary shall reserve 10 percent of the 

13 amounts made available for each fiscal 

14 year under this subsection to fund applica15 tions of eligible entities described in para16 graph (2) that propose to develop mid-tier 

17 value chains. 

18 ‘‘(iii) UNOBLIGATED AMOUNTS.—Any 

19 amounts in the reserves for a fiscal year 

20 established under clauses (i) and (ii) that 

21 are not obligated by June 30 of the fiscal 

22 year shall be available to the Secretary to 

23 make grants under this subsection to eligi24 ble entities in any State, as determined by 

25 the Secretary. 
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1 ‘‘(C) MANDATORY FUNDING.—Of the 

2 funds of the Commodity Credit Corporation, the 

3 Secretary shall use to carry out this subsection 

4 $12,500,000 for each of fiscal years 2014 

5 through 2017, to remain available until ex6 pended. 

7 ‘‘(c) RURAL COOPERATIVE DEVELOPMENT

8 GRANTS.— 

9 ‘‘(1) DEFINITIONS.—In this subsection: 

10 ‘‘(A) NONPROFIT INSTITUTION.—The term 

11 ‘nonprofit institution’ means any organization 

12 or institution, including an accredited institu13 tion of higher education, no part of the net 

14 earnings of which inures, or may lawfully inure, 

15 to the benefit of any private shareholder or in16 dividual. 

17 ‘‘(B) UNITED STATES.—The term ‘United 

18 States’ means— 

19 ‘‘(i) the several States; and 

20 ‘‘(ii) the District of Columbia. 

21 ‘‘(2) GRANTS.—The Secretary shall make 

22 grants under this subsection to nonprofit institutions 

23 for the purpose of enabling the nonprofit institutions 

24 to establish and operate centers for rural cooperative 

25 development. 
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1 ‘‘(3) GOALS.—The goals of a center funded 

2 under this subsection shall be to facilitate the cre3 ation of jobs in rural areas through the development 

4 of new rural cooperatives, value -added processing, 

5 and rural businesses. 

6 ‘‘(4) APPLICATION.— 

7 ‘‘(A) IN GENERAL.—Any nonprofit institu8 tion seeking a grant under paragraph (2) shall 

9 submit to the Secretary an application con10 taining a plan for the establishment and oper11 ation by the institution of 1 or more centers for 

12 cooperative development. 

13 ‘‘(B) REQUIREMENTS.—The Secretary 

14 may approve an application if the plan contains 

15 the following: 

16 ‘‘(i) A provision that substantiates 

17 that the center will effectively serve rural 

18 areas in the United States. 

19 ‘‘(ii) A provision that the primary ob20 jective of the center will be to improve the 

21 economic condition of rural areas through 

22 cooperative development. 

23 ‘‘(iii) A description of the activities 

24 that the center will carry out to accomplish 
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1 the objective, which may include pro2 grams— 

3 ‘‘(I) for applied research and fea4 sibility studies that may be useful to 

5 individuals, cooperatives, small busi6 nesses, and other similar entities in 

7 rural areas served by the center; 

8 ‘‘(II) for the collection, interpre9 tation, and dissemination of informa10 tion that may be useful to individuals, 

11 cooperatives, small businesses, and 

12 other similar entities in rural areas 

13 served by the center; 

14 ‘‘(III) providing training and in15 struction for individuals, cooperatives, 

16 small businesses, and other similar 

17 entities in rural areas served by the 

18 center; 

19 ‘‘(IV) providing loans and grants 

20 to individuals, cooperatives, small 

21 businesses, and other similar entities 

22 in rural areas served by the center; 

23 ‘‘(V) providing technical assist24 ance, research services, and advisory 

25 services to individuals, cooperatives, 
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1 small businesses, and other similar 

2 entities in rural areas served by the 

3 center; and 

4 ‘‘(VI) providing for the coordina5 tion of services and sharing of infor6 mation by the center. 

7 ‘‘(iv) A description of the contribu8 tions that the activities are likely to make 

9 to the improvement of the economic condi10 tions of the rural areas for which the cen11 ter will provide services. 

12 ‘‘(v) Provisions that the center, in car13 rying out the activities, will seek, if appro14 priate, the advice, participation, expertise, 

15 and assistance of representatives of busi16 ness, industry, educational institutions, the 

17 Federal Government, and State and local 

18 governments. 

19 ‘‘(vi) Provisions that the center will 

20 take all practicable steps to develop con21 tinuing sources of financial support for the 

22 center, particularly from sources in the pri23 vate sector. 

24 ‘‘(vii) Provisions for— 
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1 ‘‘(I) monitoring and evaluating 

2 the activities by the nonprofit institu3 tion operating the center; and 

4 ‘‘(II) accounting for funds re5 ceived by the institution under this 

6 section. 

7 ‘‘(5) AWARDING GRANTS.— 

8 ‘‘(A) IN GENERAL.—Grants made under 

9 paragraph (2) shall be made on a competitive 

10 basis. 

11 ‘‘(B) PREFERENCE.—In making grants 

12 under paragraph (2), the Secretary shall give 

13 preference to grant applications providing for 

14 the establishment of centers for rural coopera15 tive development that— 

16 ‘‘(i) demonstrate a proven track 

17 record in carrying out activities to promote 

18 and assist the development of cooperatively 

19 and mutually owned businesses; 

20 ‘‘(ii) demonstrate previous expertise in 

21 providing technical assistance in rural 

22 areas to promote and assist the develop23 ment of cooperatively and mutually owned 

24 businesses; 
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1 ‘‘(iii) demonstrate the ability to assist 

2 in the retention of businesses, facilitate the 

3 establishment of cooperatives and new co4 operative approaches, and generate em5 ployment opportunities that will improve 

6 the economic conditions of rural areas; 

7 ‘‘(iv) commit to providing technical 

8 assistance and other services to under9 served and economically distressed areas in 

10 rural areas of the United States; 

11 ‘‘(v) demonstrate a commitment to— 

12 ‘‘(I) networking with and sharing 

13 the results of the efforts of the center 

14 with other cooperative development 

15 centers and other organizations in16 volved in rural economic development 

17 efforts; and 

18 ‘‘(II) developing multiorganiza19 tion and multistate approaches to ad20 dressing the economic development 

21 and cooperative needs of rural areas; 

22 and 

23 ‘‘(vi) commit to providing a 25 per24 cent matching contribution with private 

25 funds and in-kind contributions, except 
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1 that the Secretary shall not require non2 Federal financial support in an amount 

3 that is greater than 5 percent in the case 

4 of a 1994 institution (as defined in section 

5 532 of the Equity in Educational Land6 Grant Status Act of 1994 (7 U.S.C. 301 

7 note; Public Law 103–382)). 

8 ‘‘(6) GRANT PERIOD.— 

9 ‘‘(A) IN GENERAL.—A grant awarded to a 

10 center that has received no prior funding under 

11 this subsection shall be made for a period of 1 

12 year. 

13 ‘‘(B) MULTIYEAR GRANTS.—If the Sec14 retary determines it to be in the best interest 

15 of the program, the Secretary shall award 

16 grants for a period of more than 1 year, but 

17 not more than 3 years, to a center that has suc18 cessfully met the requirements of paragraph 

19 (5)(B), as determined by the Secretary. 

20 ‘‘(7) AUTHORITY TO EXTEND GRANT PERIOD.— 

21 The Secretary may extend for 1 additional 12-month 

22 period the period during which a grantee may use a 

23 grant made under this subsection. 
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1 ‘‘(8) TECHNICAL ASSISTANCE TO PREVENT EX2 CESSIVE UNEMPLOYMENT OR UNDEREMPLOY3 MENT.— 

4 ‘‘(A) IN GENERAL.—In carrying out this 

5 subsection, the Secretary may provide technical 

6 assistance to alleviate or prevent conditions of 

7 excessive unemployment, underemployment, 

8 outmigration, or low employment growth in eco9 nomically distressed rural areas that the Sec10 retary determines have a substantial need for 

11 the assistance. 

12 ‘‘(B) INCLUSIONS.—The assistance may 

13 include planning and feasibility studies, man14 agement and operational assistance, and studies 

15 evaluating the need for the development poten16 tial of projects that increase employment and 

17 improve economic growth in the areas. 

18 ‘‘(9) GRANTS TO DEFRAY ADMINISTRATIVE

19 COSTS.— 

20 ‘‘(A) IN GENERAL.—The Secretary may 

21 make grants to defray not to exceed 75 percent 

22 of the costs incurred by organizations and pub23 lic bodies to carry out projects for which grants 

24 or loans are made under this subsection. 
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1 ‘‘(B) COST-SHARING.—For purposes of de2 termining the non-Federal share of the costs, 

3 the Secretary shall include contributions in cash 

4 and in kind, fairly evaluated, including prem5 ises, equipment, and services. 

6 ‘‘(10) COOPERATIVE RESEARCH PROGRAM.— 

7 The Secretary shall offer to enter into a cooperative 

8 research agreement with 1 or more qualified aca9 demic institutions in each fiscal year to conduct re10 search on the effects of all types of cooperatives on 

11 the national economy. 

12 ‘‘(11) ADDRESSING NEEDS OF MINORITY COM13 MUNITIES.— 

14 ‘‘(A) IN GENERAL.—If the total amount 

15 appropriated under paragraph (13) for a fiscal 

16 year exceeds $7,500,000, the Secretary shall re17 serve an amount equal to 20 percent of the 

18 total amount appropriated for grants for coop19 erative development centers, individual coopera20 tives, or groups of cooperatives— 

21 ‘‘(i) that serve socially disadvantaged 

22 groups; and 

23 ‘‘(ii) a majority of the boards of direc24 tors or governing boards of which are com-
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1 prised of individuals who are members of 

2 socially disadvantaged groups. 

3 ‘‘(B) INSUFFICIENT APPLICATIONS.—To 

4 the extent there are insufficient applications to 

5 carry out subparagraph (A), the Secretary shall 

6 use the funds as otherwise authorized by this 

7 subsection. 

8 ‘‘(12) INTERAGENCY WORKING GROUP.—Not 

9 later than 90 days after the date of enactment of 

10 the Agriculture Reform, Food, and Jobs Act of 

11 2012, the Secretary shall coordinate and chair an 

12 interagency working group to foster cooperative de13 velopment and ensure coordination with Federal 

14 agencies and national and local cooperative organiza15 tions that have cooperative programs and interests. 

16 ‘‘(13) AUTHORIZATION OF APPROPRIATIONS.— 

17 There is authorized to be appropriated to carry out 

18 this subsection $50,000,000 for each of fiscal years 

19 2013 through 2017. 

20 ‘‘(d) APPROPRIATE TECHNOLOGY TRANSFER FOR

21 RURAL AREAS PROGRAM.— 

22 ‘‘(1) DEFINITION OF NATIONAL NONPROFIT AG23 RICULTURAL ASSISTANCE INSTITUTION.—In this 

24 subsection, the term ‘national nonprofit agricultural 

25 assistance institution’ means an organization that— 
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1 ‘‘(A) is described in section 501(c)(3) of 

2 the Internal Revenue Code of 1986 and exempt 

3 from taxation under 501(a) of that Code; 

4 ‘‘(B) has staff and offices in multiple re5 gions of the United States; 

6 ‘‘(C) has experience and expertise in oper7 ating national agricultural technical assistance 

8 programs; 

9 ‘‘(D) expands markets for the agricultural 

10 commodities produced by producers through the 

11 use of practices that enhance the environment, 

12 natural resource base, and quality of life; and 

13 ‘‘(E) improves the economic viability of ag14 ricultural operations. 

15 ‘‘(2) ESTABLISHMENT.—The Secretary shall es16 tablish a national appropriate technology transfer 

17 for rural areas program to assist agricultural pro18 ducers that are seeking information— 

19 ‘‘(A) to reduce input costs; 

20 ‘‘(B) to conserve energy resources; 

21 ‘‘(C) to diversify operations through new 

22 energy crops and energy generation facilities; 

23 and 

24 ‘‘(D) to expand markets for agricultural 

25 commodities produced by the producers by 
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1 using practices that enhance the environment, 

2 natural resource base, and quality of life. 

3 ‘‘(3) IMPLEMENTATION.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 carry out the program under this subsection by 

6 making a grant to, or offering to enter into a 

7 cooperative agreement with, a national non8 profit agricultural assistance institution. 

9 ‘‘(B) GRANT AMOUNT.—A grant made, or 

10 cooperative agreement entered into, under sub11 paragraph (A) shall provide 100 percent of the 

12 cost of providing information described in para13 graph (2). 

14 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

15 There is authorized to be appropriated to carry out 

16 this subsection $5,000,000 for each of fiscal years 

17 2013 through 2017. 

18 ‘‘(e) BUSINESS AND INDUSTRY DIRECT AND GUAR19 ANTEED LOANS.— 

20 ‘‘(1) DEFINITION OF BUSINESS AND INDUSTRY

21 LOAN.—In this section, the term ‘business and in22 dustry loan’ means a direct loan that is made, or a 

23 loan that is guaranteed, by the Secretary under this 

24 subsection. 
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1 ‘‘(2) LOAN PURPOSES.—The Secretary may 

2 make business and industry loans to public, private, 

3 or cooperative organizations organized for profit or 

4 nonprofit, private investment funds that invest pri5 marily in cooperative organizations, or to individ6 uals— 

7 ‘‘(A) to improve, develop, or finance busi8 ness, industry, and employment and improve 

9 the economic and environmental climate in 

10 rural communities, including pollution abate11 ment and control; 

12 ‘‘(B) to conserve, develop, and use water 

13 for aquaculture purposes in rural areas; and 

14 ‘‘(C) to reduce the reliance on nonrenew15 able energy resources by encouraging the devel16 opment and construction of renewable energy 

17 systems (including solar energy systems, wind 

18 energy systems, and anaerobic digestors for the 

19 purpose of energy generation), including the 

20 modification of existing systems, in rural areas. 

21 ‘‘(3) LOAN GUARANTEES FOR CERTAIN

22 LOANS.—The Secretary may guarantee loans made 

23 under this subsection to finance the issuance of 

24 bonds for the projects described in paragraph (2). 

25 ‘‘(4) MAXIMUM AMOUNT OF PRINCIPAL.— 
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1 ‘‘(A) IN GENERAL.—Except as otherwise 

2 provided in this paragraph, no loan may be 

3 made or guaranteed under this subsection that 

4 exceeds $25,000,000 in principal amount. 

5 ‘‘(B) LIMITATIONS ON LOAN GUARANTEES

6 FOR COOPERATIVE ORGANIZATIONS.— 

7 ‘‘(i) PRINCIPAL AMOUNT.—Subject to 

8 clause (ii), the principal amount of a busi9 ness and industry loan made to a coopera10 tive organization and guaranteed under 

11 this subsection shall not exceed 

12 $40,000,000. 

13 ‘‘(ii) USE.—To be eligible for a guar14 antee under this subsection for a business 

15 and industry loan made to a cooperative 

16 organization, the principal amount of the 

17 loan in excess of $25,000,000 shall be used 

18 to carry out a project that is in a rural 

19 area and— 

20 ‘‘(I) provides for the value-added 

21 processing of agricultural commod22 ities; or 

23 ‘‘(II) significantly benefits 1 or 

24 more entities eligible for assistance for 
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1 the purposes described in paragraph 

2 (2), as determined by the Secretary. 

3 ‘‘(iii) APPLICATIONS.—If a coopera4 tive organization submits an application 

5 for a guarantee under this paragraph, the 

6 Secretary shall make the determination 

7 whether to approve the application, and 

8 the Secretary may not delegate this au9 thority. 

10 ‘‘(iv) MAXIMUM AMOUNT.—The total 

11 amount of business and industry loans 

12 made to cooperative organizations and 

13 guaranteed for a fiscal year under this 

14 subsection with principal amounts that are 

15 in excess of $25,000,000 may not exceed 

16 10 percent of the total amount of business 

17 and industry loans guaranteed for the fis18 cal year under this subsection. 

19 ‘‘(5) FEES.—The Secretary may assess a 1- 

20 time fee and an annual renewal fee for any guaran21 teed business and industry loan in an amount that 

22 does not exceed 3 percent of the guaranteed prin23 cipal portion of the loan. 

24 ‘‘(6) INTANGIBLE ASSETS.—In determining 

25 whether a cooperative organization is eligible for a 
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1 guaranteed business and industry loan, the Sec2 retary may consider the market value of a properly 

3 appraised brand name, patent, or trademark of the 

4 cooperative. 

5 ‘‘(7) LOAN APPRAISALS.—The Secretary may 

6 require that any appraisal made in connection with 

7 a business and industry loan be conducted by a spe8 cialized appraiser that uses standards that are com9 parable to standards used for similar purposes in the 

10 private sector, as determined by the Secretary. 

11 ‘‘(8) LOAN GUARANTEES FOR THE PURCHASE

12 OF COOPERATIVE STOCK.— 

13 ‘‘(A) IN GENERAL.—The Secretary may 

14 guarantee a business and industry loan to indi15 vidual farmers to purchase capital stock of a 

16 farmer cooperative established for the purpose 

17 of processing an agricultural commodity. 

18 ‘‘(B) PROCESSING CONTRACTS DURING INI19 TIAL PERIOD.—A cooperative described in sub20 paragraph (A) for which a farmer receives a 

21 guarantee to purchase stock under that sub22 paragraph may contract for services to process 

23 agricultural commodities or otherwise process 

24 value added for the period beginning on the 

25 date of the startup of the cooperative in order 
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1 to provide adequate time for the planning and 

2 construction of the processing facility of the co3 operative. 

4 ‘‘(C) FINANCIAL INFORMATION.—Financial 

5 information required by the Secretary from a 

6 farmer as a condition of making a business and 

7 industry loan guarantee under this paragraph 

8 shall be provided in the manner generally re9 quired by commercial agricultural lenders in the 

10 applicable area. 

11 ‘‘(9) LOANS TO COOPERATIVES.— 

12 ‘‘(A) ELIGIBILITY.— 

13 ‘‘(i) IN GENERAL.—The Secretary 

14 may make or guarantee a business and in15 dustry loan to a cooperative organization 

16 that is headquartered in a metropolitan 

17 area if the loan is— 

18 ‘‘(I) used for a project or venture 

19 described in paragraph (2) that is lo20 cated in a rural area; or 

21 ‘‘(II) a loan guarantee that meets 

22 the requirements of paragraph (10). 

23 ‘‘(ii) EQUITY.—The Secretary may 

24 guarantee a loan made for the purchase of 

25 preferred stock or similar equity issued by 
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1 a cooperative organization or a fund that 

2 invests primarily in cooperative organiza3 tions, if the guarantee significantly bene4 fits 1 or more entities eligible for assist5 ance for the purposes described in para6 graph (2)(A), as determined by the Sec7 retary. 

8 ‘‘(B) REFINANCING.—A cooperative orga9 nization that is eligible for a business and in10 dustry loan shall be eligible to refinance an ex11 isting business and industry loan with a lender 

12 if— 

13 ‘‘(i) the cooperative organization— 

14 ‘‘(I) is current and performing 

15 with respect to the existing loan; and 

16 ‘‘(II)(aa) is not, and has not 

17 been, in payment default, with respect 

18 to the existing loan; or 

19 ‘‘(bb) has not converted any of 

20 the collateral with respect to the exist21 ing loan; and 

22 ‘‘(ii) there is adequate security or full 

23 collateral for the refinanced loan. 

24 ‘‘(10) LOAN GUARANTEES IN NONRURAL

25 AREAS.—The Secretary may guarantee a business 
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1 and industry loan to a cooperative organization for 

2 a facility that is not located in a rural area if— 

3 ‘‘(A) the primary purpose of the loan guar4 antee is for a facility to provide value-added 

5 processing for agricultural producers that are 

6 located within 80 miles of the facility; 

7 ‘‘(B) the applicant demonstrates to the 

8 Secretary that the primary benefit of the loan 

9 guarantee will be to provide employment for 

10 residents of a rural area; and 

11 ‘‘(C) the total amount of business and in12 dustry loans guaranteed for a fiscal year under 

13 this paragraph does not exceed 10 percent of 

14 the business and industry loans guaranteed for 

15 the fiscal year under this subsection. 

16 ‘‘(11) LOCALLY OR REGIONALLY PRODUCED AG17 RICULTURAL FOOD PRODUCTS.— 

18 ‘‘(A) DEFINITIONS.—In this paragraph: 

19 ‘‘(i) LOCALLY OR REGIONALLY PRO20 DUCED AGRICULTURAL FOOD PRODUCT.— 

21 The term ‘locally or regionally produced 

22 agricultural food product’ means any agri23 cultural food product that is raised, pro24 duced, and distributed in— 
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1 ‘‘(I) the locality or region in 

2 which the final product is marketed, 

3 so that the total distance that the 

4 product is transported is less than 

5 400 miles from the origin of the prod6 uct; or 

7 ‘‘(II) the State in which the 

8 product is produced. 

9 ‘‘(ii) UNDERSERVED COMMUNITY.— 

10 The term ‘underserved community’ means 

11 a community (including an urban or rural 

12 community and an Indian tribal commu13 nity) that, as determined by the Secretary, 

14 has— 

15 ‘‘(I) limited access to affordable, 

16 healthy foods, including fresh fruits 

17 and vegetables, in grocery retail stores 

18 or farmer-to-consumer direct markets; 

19 and 

20 ‘‘(II) a high rate of hunger or 

21 food insecurity or a high poverty rate. 

22 ‘‘(B) LOAN AND LOAN GUARANTEE PRO23 GRAM.— 

24 ‘‘(i) IN GENERAL.—The Secretary 

25 shall make or guarantee loans to individ-
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1 uals, cooperatives, cooperative organiza2 tions, businesses, and other entities to es3 tablish and facilitate enterprises that proc4 ess, distribute, aggregate, store, and mar5 ket locally or regionally produced agricul6 tural food products to support community 

7 development and farm income. 

8 ‘‘(ii) REQUIREMENT.—The recipient 

9 of a loan or loan guarantee under this 

10 paragraph shall include in an appropriate 

11 agreement with retail and institutional fa12 cilities to which the recipient sells locally 

13 or regionally produced agricultural food 

14 products a requirement to inform con15 sumers of the retail or institutional facili16 ties that the consumers are purchasing or 

17 consuming locally or regionally produced 

18 agricultural food products. 

19 ‘‘(iii) PRIORITY.—In making or guar20 anteeing a loan under this paragraph, the 

21 Secretary shall give priority to projects 

22 that have components benefitting under23 served communities. 

24 ‘‘(iv) REPORTS.—Not later than 2 

25 years after the date of enactment of the 
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1 Agriculture Reform, Food, and Jobs Act of 

2 2012 and annually thereafter, the Sec3 retary shall submit to the Committee on 

4 Agriculture of the House of Representa5 tives and the Committee on Agriculture, 

6 Nutrition, and Forestry of the Senate, and 

7 publish on the Internet, a report that de8 scribes projects carried out using loans or 

9 loan guarantees made under clause (i), in10 cluding— 

11 ‘‘(I) summary information about 

12 all projects; 

13 ‘‘(II) the characteristics of the 

14 communities served; and 

15 ‘‘(III) resulting benefits. 

16 ‘‘(v) RESERVATION OF FUNDS.—For 

17 each of fiscal years 2012 through 2017, 

18 the Secretary shall reserve not less than 5 

19 percent of the total amount of funds made 

20 available to carry out this subsection to 

21 carry out this paragraph until April 1 of 

22 the fiscal year. 

23 ‘‘(vi) OUTREACH.—The Secretary 

24 shall develop and implement an outreach 

25 plan to publicize the availability of loans 
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1 and loan guarantees under this paragraph, 

2 working closely with rural cooperative de3 velopment centers, credit unions, commu4 nity development financial institutions, re5 gional economic development authorities, 

6 and other financial and economic develop7 ment entities. 

8 ‘‘(12) AUTHORIZATION OF APPROPRIATIONS.— 

9 There is authorized to be appropriated to carry out 

10 this subsection $75,000,000 for each of fiscal years 

11 2013 through 2017. 

12 ‘‘(f) RELENDING PROGRAMS.— 

13 ‘‘(1) INTERMEDIATE RELENDING PROGRAM.— 

14 ‘‘(A) IN GENERAL.—The Secretary may 

15 make or guarantee loans to eligible entities de16 scribed in subparagraph (B) so that the eligible 

17 entities may relend the funds to individuals and 

18 entities for the purposes described in subpara19 graph (C). 

20 ‘‘(B) ELIGIBLE ENTITIES.—Entities eligi21 ble for loans and loan guarantees described in 

22 subparagraph (A) are— 

23 ‘‘(i) public agencies; 

24 ‘‘(ii) Indian tribes; 

25 ‘‘(iii) cooperatives; and 
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1 ‘‘(iv) nonprofit corporations. 

2 ‘‘(C) ELIGIBLE PURPOSES.—The proceeds 

3 from loans made or guaranteed by the Sec4 retary pursuant to subparagraph (A) may be 

5 relent by eligible entities for projects that— 

6 ‘‘(i) predominately serve communities 

7 in rural areas; and 

8 ‘‘(ii) as determined by the Secretary— 

9 ‘‘(I) promote community develop10 ment; 

11 ‘‘(II) establish new businesses; 

12 ‘‘(III) establish and support 

13 microlending programs; and 

14 ‘‘(IV) create or retain employ15 ment opportunities. 

16 ‘‘(D) AUTHORIZATION OF APPROPRIA17 TIONS.—There is authorized to be appropriated 

18 to carry out this subsection $50,000,000 for 

19 each of fiscal years 2013 through 2017. 

20 ‘‘(2) RURAL MICROENTREPRENEUR ASSISTANCE

21 PROGRAM.— 

22 ‘‘(A) DEFINITIONS.—In this paragraph: 

23 ‘‘(i) MICROENTREPRENEUR.—The 

24 term ‘microentrepreneur’ means an owner 

25 and operator, or prospective owner and op-
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1 erator, of a rural microenterprise who is 

2 unable to obtain sufficient training, tech3 nical assistance, or credit other than under 

4 this subsection, as determined by the Sec5 retary. 

6 ‘‘(ii) MICROENTERPRISE DEVELOP7 MENT ORGANIZATION.—The term ‘micro8 enterprise development organization’ 

9 means an organization that is— 

10 ‘‘(I) a nonprofit entity; 

11 ‘‘(II) an Indian tribe, the tribal 

12 government of which certifies to the 

13 Secretary that— 

14 ‘‘(aa) no microenterprise de15 velopment organization serves the 

16 Indian tribe; and 

17 ‘‘(bb) no rural microentre18 preneur assistance program ex19 ists under the jurisdiction of the 

20 Indian tribe; 

21 ‘‘(III) a public institution of 

22 higher education; or 

23 ‘‘(IV) a collaboration of rural 

24 nonprofit entities serving a region or 

25 State, if 1 lead nonprofit entity is the 
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1 sole underwriter of all loans and is re2 sponsible for associated risks. 

3 ‘‘(iii) MICROLOAN.—The term 

4 ‘microloan’ means a business loan of not 

5 more than $50,000 that is provided to a 

6 rural microenterprise. 

7 ‘‘(iv) PROGRAM.—The term ‘program’ 

8 means the rural microentrepreneur assist9 ance program established under subpara10 graph (B). 

11 ‘‘(v) RURAL MICROENTERPRISE.—The 

12 term ‘rural microenterprise’ means a busi13 ness entity with not more than 10 full-time 

14 equivalent employees located in a rural 

15 area. 

16 ‘‘(vi) TRAINING.—The term ‘training’ 

17 means teaching broad business principles 

18 or general business skills in a group or 

19 public setting. 

20 ‘‘(vii) TECHNICAL ASSISTANCE.—The 

21 term ‘technical assistance’ means working 

22 with a business client in a 1-to-1 manner 

23 to provide business and financial manage24 ment counseling, assist in the preparation 

25 of business or marketing plans, or provide 
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1 other skills tailored to an individual micro2 entrepreneur. 

3 ‘‘(B) RURAL MICROENTREPRENEUR AS4 SISTANCE PROGRAM.— 

5 ‘‘(i) ESTABLISHMENT.—The Secretary 

6 shall establish a rural microentrepreneur 

7 assistance program to provide loans and 

8 grants to support microentrepreneurs in 

9 the development and ongoing success of 

10 rural microenterprises. 

11 ‘‘(ii) PURPOSE.—The purpose of the 

12 program is to provide microentrepreneurs 

13 with— 

14 ‘‘(I) the skills necessary to estab15 lish new rural microenterprises; and 

16 ‘‘(II) continuing technical and fi17 nancial assistance related to the suc18 cessful operation of rural microenter19 prises. 

20 ‘‘(iii) LOANS.— 

21 ‘‘(I) IN GENERAL.—The Sec22 retary shall make loans to microenter23 prise development organizations for 

24 the purpose of providing fixed-interest 

25 rate microloans to microentrepreneurs 
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1 for startup and growing rural micro2 enterprises. 

3 ‘‘(II) LOAN TERMS.—A loan 

4 made by the Secretary to a microen5 terprise development organization 

6 under this subparagraph shall— 

7 ‘‘(aa) be for a term not to 

8 exceed 20 years; and 

9 ‘‘(bb) bear an annual inter10 est rate of at least 1 percent. 

11 ‘‘(III) LOAN LOSS RESERVE

12 FUND.—The Secretary shall require 

13 each microenterprise development or14 ganization that receives a loan under 

15 this subparagraph to— 

16 ‘‘(aa) establish a loan loss 

17 reserve fund; and 

18 ‘‘(bb) maintain the reserve 

19 fund in an amount equal to at 

20 least 5 percent of the outstanding 

21 balance of such loans owed by 

22 the microenterprise development 

23 organization, until all obligations 

24 owed to the Secretary under this 

25 subparagraph are repaid. 
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1 ‘‘(IV) DEFERRAL OF INTEREST

2 AND PRINCIPAL.—The Secretary may 

3 permit the deferral of payments on 

4 principal and interest due on a loan to 

5 a microenterprise development organi6 zation made under this paragraph for 

7 a 2-year period beginning on the date 

8 on which the loan is made. 

9 ‘‘(iv) GRANTS TO SUPPORT RURAL MI10 CROENTERPRISE DEVELOPMENT.— 

11 ‘‘(I) IN GENERAL.—The Sec12 retary shall make grants to microen13 terprise development organizations— 

14 ‘‘(aa) to provide training 

15 and technical assistance, and 

16 other related services to rural 

17 microentrepreneurs; and 

18 ‘‘(bb) to carry out such 

19 other projects and activities as 

20 the Secretary determines appro21 priate to further the purposes of 

22 the program. 

23 ‘‘(II) SELECTION.—In making 

24 grants under subclause (I), the Sec25 retary shall— 
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1 ‘‘(aa) place an emphasis on 

2 microenterprise development or3 ganizations that serve micro4 entrepreneurs that are located in 

5 rural areas that have suffered 

6 significant outward migration, as 

7 determined by the Secretary; and 

8 ‘‘(bb) ensure, to the max9 imum extent practicable, that 

10 grant recipients include microen11 terprise development organiza12 tions of varying sizes and that 

13 serve racially and ethnically di14 verse populations. 

15 ‘‘(v) GRANTS TO ASSIST MICROENTRE16 PRENEURS.— 

17 ‘‘(I) IN GENERAL.—The Sec18 retary shall make annual grants to 

19 microenterprise development organiza20 tions to provide technical assistance to 

21 microentrepreneurs that— 

22 ‘‘(aa) received a loan from 

23 the microenterprise development 

24 organization under subparagraph 

25 (B)(iii); or 
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1 ‘‘(bb) are seeking a loan 

2 from the microenterprise develop3 ment organization under sub4 paragraph (B)(iii). 

5 ‘‘(II) MAXIMUM AMOUNT OF

6 TECHNICAL ASSISTANCE GRANT.—The 

7 maximum amount of a grant under 

8 this clause shall be in an amount 

9 equal to not more than 25 percent of 

10 the total outstanding balance of 

11 microloans made by the microenter12 prise development organization under 

13 clause (iii), as of the date the grant is 

14 awarded. 

15 ‘‘(vi) ADMINISTRATIVE EXPENSES.— 

16 Not more than 10 percent of a grant re17 ceived by a microenterprise development 

18 organization for a fiscal year under this 

19 subparagraph may be used to pay adminis20 trative expenses. 

21 ‘‘(C) ADMINISTRATION.— 

22 ‘‘(i) MATCHING REQUIREMENT.—As a 

23 condition of any grant made under clauses 

24 (iv) and (v) of subparagraph (B), the Sec25 retary shall require the microenterprise de-
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1 velopment organization to match not less 

2 than 15 percent of the total amount of the 

3 grant in the form of matching funds (in4 cluding community development block 

5 grants), indirect costs, or in-kind goods or 

6 services. 

7 ‘‘(ii) OVERSIGHT.—At a minimum, 

8 not later than December 1 of each fiscal 

9 year, a microenterprise development orga10 nization that receives a loan or grant 

11 under this section shall provide to the Sec12 retary such information as the Secretary 

13 may require to ensure that assistance pro14 vided under this section is used for the 

15 purposes for which the loan or grant was 

16 made. 

17 ‘‘(D) AUTHORIZATION OF APPROPRIA18 TIONS.—There is authorized to be appropriated 

19 to carry out this paragraph $40,000,000 for 

20 each of fiscal years 2013 through 2017. 

21 ‘‘(E) MANDATORY FUNDING FOR FISCAL

22 YEARS 2013 THROUGH 2017.—Of the funds of 

23 the Commodity Credit Corporation, the Sec24 retary shall use to carry out this paragraph 

25 $3,750,000 for each of fiscal years 2014 
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1 through 2017, to remain available until ex2 pended. 

3 ‘‘SEC. 3602. RURAL BUSINESS INVESTMENT PROGRAM. 

4 ‘‘(a) DEFINITIONS.—In this section: 

5 ‘‘(1) ARTICLES.—The term ‘articles’ means ar6 ticles of incorporation for an incorporated body or 

7 the functional equivalent or other similar documents 

8 specified by the Secretary for other business entities. 

9 ‘‘(2) DEVELOPMENTAL VENTURE CAPITAL.— 

10 The term ‘developmental venture capital’ means cap11 ital in the form of equity capital investments in rural 

12 business investment companies with an objective of 

13 fostering economic development in rural areas. 

14 ‘‘(3) EMPLOYEE WELFARE BENEFIT PLAN; 

15 PENSION PLAN.— 

16 ‘‘(A) IN GENERAL.—The terms ‘employee 

17 welfare benefit plan’ and ‘pension plan’ have 

18 the meanings given the terms in section 3 of 

19 the Employee Retirement Income Security Act 

20 of 1974 (29 U.S.C. 1002). 

21 ‘‘(B) INCLUSIONS.—The terms ‘employee 

22 welfare benefit plan’ and ‘pension plan’ in23 clude— 

24 ‘‘(i) public and private pension or re25 tirement plans subject to this subtitle; and 
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1 ‘‘(ii) similar plans not covered by this 

2 subtitle that have been established, and 

3 that are maintained, by the Federal Gov4 ernment or any State (including by a polit5 ical subdivision, agency, or instrumentality 

6 of the Federal Government or a State) for 

7 the benefit of employees. 

8 ‘‘(4) EQUITY CAPITAL.—The term ‘equity cap9 ital’ means common or preferred stock or a similar 

10 instrument, including subordinated debt with equity 

11 features. 

12 ‘‘(5) LEVERAGE.—The term ‘leverage’ in13 cludes— 

14 ‘‘(A) debentures purchased or guaranteed 

15 by the Secretary; 

16 ‘‘(B) participating securities purchased or 

17 guaranteed by the Secretary; and 

18 ‘‘(C) preferred securities outstanding as of 

19 the date of enactment of the Agriculture Re20 form, Food, and Jobs Act of 2012. 

21 ‘‘(6) LICENSE.—The term ‘license’ means a li22 cense issued by the Secretary in accordance with in 

23 subsection (d)(5). 

24 ‘‘(7) LIMITED LIABILITY COMPANY.—The term 

25 ‘limited liability company’ means a business entity 
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1 that is organized and operating in accordance with 

2 a State limited liability company law approved by 

3 the Secretary. 

4 ‘‘(8) MEMBER.—The term ‘member’ means, 

5 with respect to a rural business investment company 

6 that is a limited liability company, a holder of an 

7 ownership interest, or a person otherwise admitted 

8 to membership in the limited liability company. 

9 ‘‘(9) OPERATIONAL ASSISTANCE.—The term 

10 ‘operational assistance’ means management, mar11 keting, and other technical assistance that assists a 

12 rural business concern with business development. 

13 ‘‘(10) PARTICIPATION AGREEMENT.—The term 

14 ‘participation agreement’ means an agreement, be15 tween the Secretary and a rural business investment 

16 company granted final approval under subsection 

17 (d)(5), that requires the rural business investment 

18 company to make investments in smaller enterprises 

19 in rural areas. 

20 ‘‘(11) PRIVATE CAPITAL.— 

21 ‘‘(A) IN GENERAL.—The term ‘private cap22 ital’ means the total of— 

23 ‘‘(i)(I) the paid-in capital and paid-in 

24 surplus of a corporate rural business in25 vestment company; 
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1 ‘‘(II) the contributed capital of the 

2 partners of a partnership rural business in3 vestment company; or 

4 ‘‘(III) the equity investment of the 

5 members of a limited liability company 

6 rural business investment company; and 

7 ‘‘(ii) unfunded binding commitments 

8 from investors that meet criteria estab9 lished by the Secretary to contribute cap10 ital to the rural business investment com11 pany, except that— 

12 ‘‘(I) unfunded commitments may 

13 be counted as private capital for pur14 poses of approval by the Secretary of 

15 any request for leverage; but 

16 ‘‘(II) leverage shall not be funded 

17 based on the commitments. 

18 ‘‘(B) EXCLUSIONS.—The term ‘private 

19 capital’ does not include— 

20 ‘‘(i) any funds borrowed by a rural 

21 business investment company from any 

22 source; 

23 ‘‘(ii) any funds obtained through the 

24 issuance of leverage; or 
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1 ‘‘(iii) any funds obtained directly or 

2 indirectly from the Federal Government or 

3 any State (including by a political subdivi4 sion, agency, or instrumentality of the 

5 Federal Government or a State), except 

6 for— 

7 ‘‘(I) funds obtained from the 

8 business revenues (excluding any gov9 ernmental appropriation) of any Fed10 erally chartered or government-spon11 sored enterprise established prior to 

12 the date of enactment of the Agri13 culture Reform, Food, and Jobs Act 

14 of 2012; 

15 ‘‘(II) funds invested by an em16 ployee welfare benefit plan or pension 

17 plan; and 

18 ‘‘(III) any qualified nonprivate 

19 funds (if the investors of the qualified 

20 nonprivate funds do not control, di21 rectly or indirectly, the management, 

22 board of directors, general partners, 

23 or members of the rural business in24 vestment company). 
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1 ‘‘(12) QUALIFIED NONPRIVATE FUNDS.—The 

2 term ‘qualified nonprivate funds’ means any— 

3 ‘‘(A) funds directly or indirectly invested in 

4 any applicant or rural business investment com5 pany on or before the date of enactment of the 

6 Agriculture Reform, Food, and Jobs Act of 

7 2012 by any Federal agency, other than the 

8 Department, under a provision of law explicitly 

9 mandating the inclusion of those funds in the 

10 definition of the term ‘private capital’; and 

11 ‘‘(B) funds invested in any applicant or 

12 rural business investment company by 1 or 

13 more entities of any State (including by a polit14 ical subdivision, agency, or instrumentality of 

15 the State and including any guarantee extended 

16 by those entities) in an aggregate amount that 

17 does not exceed 33 percent of the private cap18 ital of the applicant or rural business invest19 ment company. 

20 ‘‘(13) RURAL BUSINESS CONCERN.—The term 

21 ‘rural business concern’ means— 

22 ‘‘(A) a public, private, or cooperative for23 profit or nonprofit organization; 

24 ‘‘(B) a for-profit or nonprofit business con25 trolled by an Indian tribe; or 
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1 ‘‘(C) any other person or entity that pri2 marily operates in a rural area, as determined 

3 by the Secretary. 

4 ‘‘(14) RURAL BUSINESS INVESTMENT COM5 PANY.—The term ‘rural business investment com6 pany’ means a company that— 

7 ‘‘(A) has been granted final approval by 

8 the Secretary under subsection (d)(5); and 

9 ‘‘(B) has entered into a participation 

10 agreement with the Secretary. 

11 ‘‘(15) SMALLER ENTERPRISE.— 

12 ‘‘(A) IN GENERAL.—The term ‘smaller en13 terprise’ means any rural business concern that, 

14 together with its affiliates— 

15 ‘‘(i) has— 

16 ‘‘(I) a net financial worth of not 

17 more than $6,000,000, as of the date 

18 on which assistance is provided under 

19 this section to the rural business con20 cern; and 

21 ‘‘(II) except as provided in sub22 paragraph (B), an average net income 

23 for the 2-year period preceding the 

24 date on which assistance is provided 

25 under this section to the rural busi-
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1 ness concern, of not more than 

2 $2,000,000, after Federal income 

3 taxes (excluding any carryover losses); 

4 or 

5 ‘‘(ii) satisfies the standard industrial 

6 classification size standards established by 

7 the Administrator of the Small Business 

8 Administration for the industry in which 

9 the rural business concern is primarily en10 gaged. 

11 ‘‘(B) EXCEPTION.—For purposes of sub12 paragraph (A)(i)(II), if the rural business con13 cern is not required by law to pay Federal in14 come taxes at the enterprise level, but is re15 quired to pass income through to the share16 holders, partners, beneficiaries, or other equi17 table owners of the business concern, the net in18 come of the business concern shall be deter19 mined by allowing a deduction in an amount 

20 equal to the total of— 

21 ‘‘(i) if the rural business concern is 

22 not required by law to pay State (and 

23 local, if any) income taxes at the enterprise 

24 level, the product obtained by multi25 plying— 
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1 ‘‘(I) the net income (determined 

2 without regard to this subparagraph); 

3 by 

4 ‘‘(II) the marginal State income 

5 tax rate (or by the combined State 

6 and local income tax rates, as applica7 ble) that would have applied if the 

8 business concern were a corporation; 

9 and 

10 ‘‘(ii) the product obtained by multi11 plying— 

12 ‘‘(I) the net income (so deter13 mined) less any deduction for State 

14 (and local) income taxes calculated 

15 under clause (i); by 

16 ‘‘(II) the marginal Federal in17 come tax rate that would have applied 

18 if the rural business concern were a 

19 corporation. 

20 ‘‘(b) PURPOSES.—The purposes of the Rural Busi21 ness Investment Program established under this section 

22 are— 

23 ‘‘(1) to promote economic development and the 

24 creation of wealth and job opportunities in rural 

25 areas and among individuals living in those areas by 
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†S 3240 ES

1 encouraging developmental venture capital invest2 ments in smaller enterprises primarily located in 

3 rural areas; and 

4 ‘‘(2) to establish a developmental venture cap5 ital program, with the mission of addressing the 

6 unmet equity investment needs of small enterprises 

7 located in rural areas, by authorizing the Sec8 retary— 

9 ‘‘(A) to enter into participation agreements 

10 with rural business investment companies; 

11 ‘‘(B) to guarantee debentures of rural 

12 business investment companies to enable each 

13 rural business investment company to make de14 velopmental venture capital investments in 

15 smaller enterprises in rural areas; and 

16 ‘‘(C) to make grants to rural business in17 vestment companies, and to other entities, for 

18 the purpose of providing operational assistance 

19 to smaller enterprises financed, or expected to 

20 be financed, by rural business investment com21 panies. 

22 ‘‘(c) ESTABLISHMENT.—In accordance with this sub23 title, the Secretary shall establish a Rural Business Invest24 ment Program, under which the Secretary may— 
638 

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1 ‘‘(1) enter into participation agreements with 

2 companies granted final approval under subsection 

3 (d)(5) for the purposes described in subsection (b); 

4 ‘‘(2) guarantee the debentures issued by rural 

5 business investment companies as provided in sub6 section (e); and 

7 ‘‘(3) make grants to rural business investment 

8 companies, and to other entities, under subsection 

9 (h). 

10 ‘‘(d) SELECTION OF RURAL BUSINESS INVESTMENT

11 COMPANIES.— 

12 ‘‘(1) ELIGIBILITY.—A company shall be eligible 

13 to apply to participate, as a rural business invest14 ment company, in the program established under 

15 this section if— 

16 ‘‘(A) the company is a newly formed for17 profit entity or a newly formed for-profit sub18 sidiary of such an entity; 

19 ‘‘(B) the company has a management team 

20 with experience in community development fi21 nancing or relevant venture capital financing; 

22 and 

23 ‘‘(C) the company will invest in enterprises 

24 that will create wealth and job opportunities in 
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1 rural areas, with an emphasis on smaller enter2 prises. 

3 ‘‘(2) APPLICATION.—To participate, as a rural 

4 business investment company, in the program estab5 lished under this section, a company meeting the eli6 gibility requirements of paragraph (1) shall submit 

7 an application to the Secretary that includes— 

8 ‘‘(A) a business plan describing how the 

9 company intends to make successful develop10 mental venture capital investments in identified 

11 rural areas; 

12 ‘‘(B) information regarding the community 

13 development finance or relevant venture capital 

14 qualifications and general reputation of the 

15 management of the company; 

16 ‘‘(C) a description of how the company in17 tends to work with community-based organiza18 tions and local entities (including local economic 

19 development companies, local lenders, and local 

20 investors) and to seek to address the unmet eq21 uity capital needs of the communities served; 

22 ‘‘(D) a proposal describing how the com23 pany intends to use the grant funds provided 

24 under this section to provide operational assist25 ance to smaller enterprises financed by the 
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1 company, including information regarding 

2 whether the company intends to use licensed 

3 professionals, as necessary, on the staff of the 

4 company or from an outside entity; 

5 ‘‘(E) with respect to binding commitments 

6 to be made to the company under this section, 

7 an estimate of the ratio of cash to in-kind con8 tributions; 

9 ‘‘(F) a description of the criteria to be 

10 used to evaluate whether and to what extent the 

11 company meets the purposes of the program es12 tablished under this section; 

13 ‘‘(G) information regarding the manage14 ment and financial strength of any parent firm, 

15 affiliated firm, or any other firm essential to 

16 the success of the business plan of the com17 pany; and 

18 ‘‘(H) such other information as the Sec19 retary may require. 

20 ‘‘(3) STATUS.—Not later than 90 days after the 

21 initial receipt by the Secretary of an application 

22 under this subsection, the Secretary shall provide to 

23 the applicant a written report describing the status 

24 of the application and any requirements remaining 

25 for completion of the application. 
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1 ‘‘(4) MATTERS CONSIDERED.—In reviewing and 

2 processing any application under this subsection, the 

3 Secretary shall— 

4 ‘‘(A) determine whether— 

5 ‘‘(i) the applicant meets the require6 ments of paragraph (5); and 

7 ‘‘(ii) the management of the applicant 

8 is qualified and has the knowledge, experi9 ence, and capability necessary to comply 

10 with this section; 

11 ‘‘(B) take into consideration— 

12 ‘‘(i) the need for and availability of fi13 nancing for rural business concerns in the 

14 geographic area in which the applicant is 

15 to commence business; 

16 ‘‘(ii) the general business reputation 

17 of the owners and management of the ap18 plicant; and 

19 ‘‘(iii) the probability of successful op20 erations of the applicant, including ade21 quate profitability and financial soundness; 

22 and 

23 ‘‘(C) not take into consideration any pro24 jected shortage or unavailability of grant funds 

25 or leverage. 
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1 ‘‘(5) APPROVAL; LICENSE.— 

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

3 subparagraph (B), the Secretary may approve 

4 an applicant to operate as a rural business in5 vestment company under this subtitle and li6 cense the applicant as a rural business invest7 ment company, if— 

8 ‘‘(i) the Secretary determines that the 

9 application satisfies the requirements of 

10 paragraph (2); 

11 ‘‘(ii) the area in which the rural busi12 ness investment company is to conduct its 

13 operations, and establishment of branch of14 fices or agencies (if authorized by the arti15 cles), are approved by the Secretary; and 

16 ‘‘(iii) the applicant enters into a par17 ticipation agreement with the Secretary. 

18 ‘‘(B) CAPITAL REQUIREMENTS.— 

19 ‘‘(i) IN GENERAL.—Notwithstanding 

20 any other provision of this section, the Sec21 retary may approve an applicant to operate 

22 as a rural business investment company 

23 under this section and designate the appli24 cant as a rural business investment com-
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1 pany, if the Secretary determines that the 

2 applicant— 

3 ‘‘(I) has private capital as deter4 mined by the Secretary; 

5 ‘‘(II) would otherwise be ap6 proved under this section, except that 

7 the applicant does not satisfy the re8 quirements of subsection (i)(3); and 

9 ‘‘(III) has a viable business plan 

10 that— 

11 ‘‘(aa) reasonably projects 

12 profitable operations; and 

13 ‘‘(bb) has a reasonable time14 table for achieving a level of pri15 vate capital that satisfies the re16 quirements of subsection (i)(3). 

17 ‘‘(ii) LEVERAGE.—An applicant ap18 proved under clause (i) shall not be eligible 

19 to receive leverage under this section until 

20 the applicant satisfies the requirements of 

21 section 3602(i)(3). 

22 ‘‘(iii) GRANTS.—An applicant ap23 proved under clause (i) shall be eligible for 

24 grants under subsection (h) in proportion 
644 

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1 to the private capital of the applicant, as 

2 determined by the Secretary. 

3 ‘‘(e) DEBENTURES.— 

4 ‘‘(1) IN GENERAL.—The Secretary may guar5 antee the timely payment of principal and interest, 

6 as scheduled, on debentures issued by any rural 

7 business investment company. 

8 ‘‘(2) TERMS AND CONDITIONS.—The Secretary 

9 may make guarantees under this subsection on such 

10 terms and conditions as the Secretary considers ap11 propriate, except that the term of any debenture 

12 guaranteed under this section shall not exceed 15 

13 years. 

14 ‘‘(3) FULL FAITH AND CREDIT OF THE UNITED

15 STATES.—Section 3901 shall apply to any guarantee 

16 under this subsection. 

17 ‘‘(4) MAXIMUM GUARANTEE.—Under this sub18 section, the Secretary may— 

19 ‘‘(A) guarantee the debentures issued by a 

20 rural business investment company only to the 

21 extent that the total face amount of out22 standing guaranteed debentures of the rural 

23 business investment company does not exceed 

24 the lesser of— 
645 

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1 ‘‘(i) 300 percent of the private capital 

2 of the rural business investment company; 

3 or 

4 ‘‘(ii) $105,000,000; and 

5 ‘‘(B) provide for the use of discounted de6 bentures. 

7 ‘‘(f) ISSUANCE AND GUARANTEE OF TRUST CERTIFI8 CATES.— 

9 ‘‘(1) ISSUANCE.—The Secretary may issue trust 

10 certificates representing ownership of all or a frac11 tional part of debentures issued by a rural business 

12 investment company and guaranteed by the Sec13 retary under this section, if the certificates are 

14 based on and backed by a trust or pool approved by 

15 the Secretary and composed solely of guaranteed de16 bentures. 

17 ‘‘(2) GUARANTEE.— 

18 ‘‘(A) IN GENERAL.—The Secretary may, 

19 under such terms and conditions as the Sec20 retary considers appropriate, guarantee the 

21 timely payment of the principal of and interest 

22 on trust certificates issued by the Secretary or 

23 agents of the Secretary for purposes of this 

24 subsection. 
646 

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1 ‘‘(B) LIMITATION.—Each guarantee under 

2 this paragraph shall be limited to the extent of 

3 principal and interest on the guaranteed deben4 tures that compose the trust or pool. 

5 ‘‘(C) PREPAYMENT OR DEFAULT.— 

6 ‘‘(i) IN GENERAL.— 

7 ‘‘(I) AUTHORITY TO PREPAY.—A 

8 debenture may be prepaid at any time 

9 without penalty. 

10 ‘‘(II) REDUCTION OF GUAR11 ANTEE.—Subject to subclause (I), if a 

12 debenture in a trust or pool is pre13 paid, or in the event of default of such 

14 a debenture, the guarantee of timely 

15 payment of principal and interest on 

16 the trust certificates shall be reduced 

17 in proportion to the amount of prin18 cipal and interest the prepaid deben19 ture represents in the trust or pool. 

20 ‘‘(ii) INTEREST.—Interest on prepaid 

21 or defaulted debentures shall accrue and be 

22 guaranteed by the Secretary only through 

23 the date of payment of the guarantee. 

24 ‘‘(iii) REDEMPTION.—At any time 

25 during the term of a trust certificate, the 
647 

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1 trust certificate may be called for redemp2 tion due to prepayment or default of all 

3 debentures. 

4 ‘‘(3) FULL FAITH AND CREDIT OF THE UNITED

5 STATES.—Section 3901 shall apply to any guarantee 

6 of a trust certificate issued by the Secretary under 

7 this section. 

8 ‘‘(4) SUBROGATION AND OWNERSHIP RIGHTS.— 

9 ‘‘(A) SUBROGATION.—If the Secretary 

10 pays a claim under a guarantee issued under 

11 this section, the claim shall be subrogated fully 

12 to the rights satisfied by the payment. 

13 ‘‘(B) OWNERSHIP RIGHTS.—No Federal, 

14 State, or local law shall preclude or limit the ex15 ercise by the Secretary of the ownership rights 

16 of the Secretary in a debenture residing in a 

17 trust or pool against which 1 or more trust cer18 tificates are issued under this subsection. 

19 ‘‘(5) MANAGEMENT AND ADMINISTRATION.— 

20 ‘‘(A) REGISTRATION.—The Secretary shall 

21 provide for a central registration of all trust 

22 certificates issued under this subsection. 

23 ‘‘(B) CREATION OF POOLS.—The Secretary 

24 may— 
648 

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1 ‘‘(i) maintain such commercial bank 

2 accounts or investments in obligations of 

3 the United States as may be necessary to 

4 facilitate the creation of trusts or pools 

5 backed by debentures guaranteed under 

6 this subtitle; and 

7 ‘‘(ii) issue trust certificates to facili8 tate the creation of those trusts or pools. 

9 ‘‘(C) FIDELITY BOND OR INSURANCE RE10 QUIREMENT.—Any agent performing functions 

11 on behalf of the Secretary under this paragraph 

12 shall provide a fidelity bond or insurance in 

13 such amount as the Secretary considers to be 

14 necessary to fully protect the interests of the 

15 United States. 

16 ‘‘(D) REGULATION OF BROKERS AND

17 DEALERS.—The Secretary may regulate brokers 

18 and dealers in trust certificates issued under 

19 this subsection. 

20 ‘‘(E) ELECTRONIC REGISTRATION.—Noth21 ing in this paragraph prohibits the use of a 

22 book-entry or other electronic form of registra23 tion for trust certificates issued under this sub24 section. 

25 ‘‘(g) FEES.— 
649 

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1 ‘‘(1) IN GENERAL.—The Secretary may charge 

2 a fee that does not exceed $500 with respect to any 

3 guarantee or grant issued under this section. 

4 ‘‘(2) TRUST CERTIFICATE.—Notwithstanding 

5 paragraph (1), the Secretary shall not collect a fee 

6 for any guarantee of a trust certificate under sub7 section (f), except that any agent of the Secretary 

8 may collect a fee that does not exceed $500 for the 

9 functions described in subsection (f)(5)(B). 

10 ‘‘(3) LICENSE.— 

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

12 subparagraph (C), the Secretary may prescribe 

13 fees to be paid by each applicant for a license 

14 to operate as a rural business investment com15 pany under this section. 

16 ‘‘(B) USE OF AMOUNTS.—Fees collected 

17 under this paragraph— 

18 ‘‘(i) shall be deposited in the account 

19 for salaries and expenses of the Secretary; 

20 ‘‘(ii) are authorized to be appropriated 

21 solely to cover the costs of licensing exami22 nations; and 

23 ‘‘(iii) shall— 

24 ‘‘(I) in the case of a license 

25 issued before the date of enactment of 
650 

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1 the Agriculture Reform, Food, and 

2 Jobs Act of 2012, not exceed $500 for 

3 any fee collected under this para4 graph; and 

5 ‘‘(II) in the case of a license 

6 issued after the date of enactment of 

7 the Agriculture Reform, Food, and 

8 Jobs Act of 2012, be a rate as deter9 mined by the Secretary. 

10 ‘‘(C) PROHIBITION ON COLLECTION OF

11 CERTAIN FEES.—In the case of a license de12 scribed in subparagraph (A) that was approved 

13 before July 1, 2007, the Secretary shall not col14 lect any fees due on or after the date of enact15 ment of the Agriculture Reform, Food, and 

16 Jobs Act of 2012. 

17 ‘‘(h) OPERATIONAL ASSISTANCE GRANTS.— 

18 ‘‘(1) IN GENERAL.—In accordance with this 

19 subsection, the Secretary may make grants to rural 

20 business investment companies and to other entities, 

21 as authorized by this section, to provide operational 

22 assistance to smaller enterprises financed, or ex23 pected to be financed, by the entities. 

24 ‘‘(2) TERMS.—Grants made under this sub25 section shall be made over a multiyear period (not 
651 

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1 to exceed 10 years) under such terms as the Sec2 retary may require. 

3 ‘‘(3) USE OF FUNDS.—The proceeds of a grant 

4 made under this subsection may be used by the rural 

5 business investment company receiving the grant 

6 only to provide operational assistance in connection 

7 with an equity or prospective equity investment in a 

8 business located in a rural area. 

9 ‘‘(4) SUBMISSION OF PLANS.—A rural business 

10 investment company shall be eligible for a grant 

11 under this subsection only if the rural business in12 vestment company submits to the Secretary, in such 

13 form and manner as the Secretary may require, a 

14 plan for use of the grant. 

15 ‘‘(5) GRANT AMOUNT.— 

16 ‘‘(A) RURAL BUSINESS INVESTMENT COM17 PANIES.—The amount of a grant made under 

18 this subsection to a rural business investment 

19 company shall be equal to the lesser of— 

20 ‘‘(i) 10 percent of the private capital 

21 raised by the rural business investment 

22 company; or 

23 ‘‘(ii) $1,000,000. 

24 ‘‘(6) OTHER ENTITIES.—The amount of a 

25 grant made under this subsection to any entity other 
652 

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1 than a rural business investment company shall be 

2 equal to the resources (in cash or in kind) raised by 

3 the entity in accordance with the requirements appli4 cable to rural business investment companies under 

5 this section. 

6 ‘‘(i) RURAL BUSINESS INVESTMENT COMPANIES.— 

7 ‘‘(1) ORGANIZATION.—For purposes of this 

8 subsection, a rural business investment company 

9 shall— 

10 ‘‘(A) be an incorporated body, a limited li11 ability company, or a limited partnership orga12 nized and chartered or otherwise existing under 

13 State law solely for the purpose of performing 

14 the functions and conducting the activities au15 thorized by this section; and 

16 ‘‘(B)(i) if incorporated, have succession for 

17 a period of not less than 30 years unless earlier 

18 dissolved by the shareholders of the rural busi19 ness investment company; and 

20 ‘‘(ii) if a limited partnership or a limited li21 ability company, have succession for a period of 

22 not less than 10 years; and 

23 ‘‘(iii) possess the powers reasonably nec24 essary to perform the functions and conduct the 

25 activities. 
653 

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1 ‘‘(2) ARTICLES.—The articles of any rural busi2 ness investment company— 

3 ‘‘(A) shall specify in general terms— 

4 ‘‘(i) the purposes for which the rural 

5 business investment company is formed; 

6 ‘‘(ii) the name of the rural business 

7 investment company; 

8 ‘‘(iii) the 1 or more areas in which the 

9 operations of the rural business investment 

10 company are to be carried out; 

11 ‘‘(iv) the place where the principal of12 fice of the rural business investment com13 pany is to be located; and 

14 ‘‘(v) the amount and classes of the 

15 shares of capital stock of the rural busi16 ness investment company; 

17 ‘‘(B) may contain any other provisions 

18 consistent with this section that the rural busi19 ness investment company may determine appro20 priate to adopt for the regulation of the busi21 ness of the rural business investment company 

22 and the conduct of the affairs of the rural busi23 ness investment company; and 

24 ‘‘(C) shall be subject to the approval of the 

25 Secretary. 
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1 ‘‘(3) CAPITAL REQUIREMENTS.— 

2 ‘‘(A) IN GENERAL.—Each rural business 

3 investment company shall be required to meet 

4 the capital requirements as provided by the Sec5 retary. 

6 ‘‘(B) TIME FRAME.—Each rural business 

7 investment company shall have a period of 2 

8 years to meet the capital requirements of this 

9 paragraph. 

10 ‘‘(C) ADEQUACY.—In addition to the re11 quirements of subparagraph (A), the Secretary 

12 shall— 

13 ‘‘(i) determine whether the private 

14 capital of each rural business investment 

15 company is adequate to ensure a reason16 able prospect that the rural business in17 vestment company will be operated soundly 

18 and profitably, and managed actively and 

19 prudently in accordance with the articles of 

20 the rural business investment company; 

21 ‘‘(ii) determine that the rural business 

22 investment company will be able to comply 

23 with the requirements of this section; 

24 ‘‘(iii) require that at least 75 percent 

25 of the capital of each rural business invest-
655 

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1 ment company is invested in rural business 

2 concerns; 

3 ‘‘(iv) ensure that the rural business 

4 investment company is designed primarily 

5 to meet equity capital needs of the busi6 nesses in which the rural business invest7 ment company invests and not to compete 

8 with traditional small business financing 

9 by commercial lenders; and 

10 ‘‘(v) require that the rural business 

11 investment company makes short-term 

12 non-equity investments of less than 5 years 

13 only to the extent necessary to preserve an 

14 existing investment. 

15 ‘‘(4) DIVERSIFICATION OF OWNERSHIP.—The 

16 Secretary shall ensure that the management of each 

17 rural business investment company licensed after the 

18 date of enactment of the Agriculture Reform, Food, 

19 and Jobs Act of 2012 is sufficiently diversified from 

20 and unaffiliated with the ownership of the rural 

21 business investment company so as to ensure inde22 pendence and objectivity in the financial manage23 ment and oversight of the investments and oper24 ations of the rural business investment company. 

25 ‘‘(j) FINANCIAL INSTITUTION INVESTMENTS.— 
656 

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1 ‘‘(1) IN GENERAL.—Except as otherwise pro2 vided in this subsection and notwithstanding any 

3 other provision of law, the following banks, associa4 tions, and institutions are eligible both to establish 

5 and invest in any rural business investment company 

6 or in any entity established to invest solely in rural 

7 business investment companies: 

8 ‘‘(A) Any bank or savings association the 

9 deposits of which are insured under the Federal 

10 Deposit Insurance Act (12 U.S.C. 1811 et 

11 seq.), including an investment pool created en12 tirely by such bank or savings association. 

13 ‘‘(B) Any Farm Credit System institution 

14 described in subsection 1.2(a) of the Farm 

15 Credit Act of 1971 (12 U.S.C. 2002(a)). 

16 ‘‘(2) LIMITATION.—No bank, association, or in17 stitution described in paragraph (1) may make in18 vestments described in paragraph (1) that are great19 er than 5 percent of the capital and surplus of the 

20 bank, association, or institution. 

21 ‘‘(3) LIMITATION ON RURAL BUSINESS INVEST22 MENT COMPANIES CONTROLLED BY FARM CREDIT

23 SYSTEM INSTITUTIONS.—If a Farm Credit System 

24 institution described in section 1.2(a) of the Farm 

25 Credit Act of 1971 (12 U.S.C. 2002(a)) holds more 
657 

†S 3240 ES

1 than 25 percent of the shares of a rural business in2 vestment company, either alone or in conjunction 

3 with other System institutions (or affiliates), the 

4 rural business investment company shall not provide 

5 equity investments in, or provide other financial as6 sistance to, entities that are not otherwise eligible to 

7 receive financing from the Farm Credit System 

8 under that Act (12 U.S.C. 2001 et seq.). 

9 ‘‘(k) EXAMINATIONS.— 

10 ‘‘(1) IN GENERAL.—Each rural business invest11 ment company that participates in the program es12 tablished under this section shall be subject to ex13 aminations made at the direction of the Secretary in 

14 accordance with this subsection. 

15 ‘‘(2) ASSISTANCE OF PRIVATE SECTOR ENTI16 TIES.—An examination under this subsection may be 

17 conducted with the assistance of a private sector en18 tity that has the qualifications and the expertise nec19 essary to conduct such an examination. 

20 ‘‘(3) COSTS.— 

21 ‘‘(A) IN GENERAL.—The Secretary may 

22 assess the cost of an examination under this 

23 section, including compensation of the exam24 iners, against the rural business investment 

25 company examined. 
658 

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1 ‘‘(B) PAYMENT.—Any rural business in2 vestment company against which the Secretary 

3 assesses costs under this subparagraph shall 

4 pay the costs. 

5 ‘‘(4) DEPOSIT OF FUNDS.—Funds collected 

6 under this subsection shall— 

7 ‘‘(A) be deposited in the account that in8 curred the costs for carrying out this sub9 section; 

10 ‘‘(B) be made available to the Secretary to 

11 carry out this subsection, without further ap12 propriation; and 

13 ‘‘(C) remain available until expended. 

14 ‘‘(l) REPORTING REQUIREMENTS.— 

15 ‘‘(1) RURAL BUSINESS INVESTMENT COMPA16 NIES.—Each entity that participates in a program 

17 established under this section shall provide to the 

18 Secretary such information as the Secretary may re19 quire, including— 

20 ‘‘(A) information relating to the measure21 ment criteria that the entity proposed in the 

22 program application of the rural business in23 vestment company; and 

24 ‘‘(B) in each case in which the entity 

25 under this section makes an investment in, or 
659 

†S 3240 ES

1 a loan or grant to, a business that is not lo2 cated in a rural area, a report on the number 

3 and percentage of employees of the business 

4 who reside in those areas. 

5 ‘‘(2) PUBLIC REPORTS.— 

6 ‘‘(A) IN GENERAL.—The Secretary shall 

7 prepare and make available to the public an an8 nual report on the programs established under 

9 this section, including detailed information on— 

10 ‘‘(i) the number of rural business in11 vestment companies licensed by the Sec12 retary during the previous fiscal year; 

13 ‘‘(ii) the aggregate amount of leverage 

14 that rural business investment companies 

15 have received from the Federal Govern16 ment during the previous fiscal year; 

17 ‘‘(iii) the aggregate number of each 

18 type of leveraged instruments used by 

19 rural business investment companies dur20 ing the previous fiscal year and how each 

21 number compares to previous fiscal years; 

22 ‘‘(iv) the number of rural business in23 vestment company licenses surrendered 

24 and the number of rural business invest25 ment companies placed in liquidation dur-
660 

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1 ing the previous fiscal year, identifying the 

2 amount of leverage each rural business in3 vestment company has received from the 

4 Federal Government and the type of lever5 age instruments each rural business invest6 ment company has used; 

7 ‘‘(v) the amount of losses sustained by 

8 the Federal Government as a result of op9 erations under this section during the pre10 vious fiscal year and an estimate of the 

11 total losses that the Federal Government 

12 can reasonably expect to incur as a result 

13 of the operations during the current fiscal 

14 year; 

15 ‘‘(vi) actions taken by the Secretary to 

16 maximize recoupment of funds of the Fed17 eral Government expended to implement 

18 and administer the Rural Business Invest19 ment Program under this section during 

20 the previous fiscal year and to ensure com21 pliance with the requirements of this sec22 tion (including regulations); 

23 ‘‘(vii) the amount of Federal Govern24 ment leverage that each licensee received 
661 

†S 3240 ES

1 in the previous fiscal year and the types of 

2 leverage instruments each licensee used; 

3 ‘‘(viii) for each type of financing in4 strument, the sizes, types of geographic lo5 cations, and other characteristics of the 

6 small business investment companies using 

7 the instrument during the previous fiscal 

8 year, including the extent to which the in9 vestment companies have used the leverage 

10 from each instrument to make loans or eq11 uity investments in rural areas; and 

12 ‘‘(ix) the actions of the Secretary to 

13 carry out this section 

14 ‘‘(B) PROHIBITION.—In compiling the re15 port required under subparagraph (A), the Sec16 retary may not— 

17 ‘‘(i) compile the report in a manner 

18 that permits identification of any par19 ticular type of investment by an individual 

20 rural business investment company or 

21 small business concern in which a rural 

22 business investment company invests; or 

23 ‘‘(ii) release any information that is 

24 prohibited under section 1905 of title 18, 

25 United States Code. 
662 

†S 3240 ES

1 ‘‘(m) AUTHORIZATION OF APPROPRIATIONS.—There 

2 is authorized to be appropriated to carry out this section 

3 $25,000,000 for the period of fiscal years 2008 through 

4 2017.’’. 

5 ‘‘CHAPTER 3—GENERAL RURAL 

6 DEVELOPMENT PROVISIONS 

7 ‘‘SEC. 3701. GENERAL PROVISIONS FOR LOANS AND 

8 GRANTS. 

9 ‘‘(a) PERIOD FOR REPAYMENT.—Unless otherwise 

10 specifically provided for in this subtitle, the period for re11 payment of a loan under this subtitle shall not exceed 40 

12 years. 

13 ‘‘(b) INTEREST RATES.— 

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in this title, the interest rate on a loan under 

16 this subtitle shall be determined by the Secretary at 

17 a rate— 

18 ‘‘(A) not to exceed a sum obtained by add19 ing— 

20 ‘‘(i) the current average market yield 

21 on outstanding marketable obligations of 

22 the United States with remaining periods 

23 to maturity comparable to the average ma24 turity of the loan; and 
663 

†S 3240 ES

1 ‘‘(ii) an amount not to exceed 1 per2 cent, as determined by the Secretary; and 

‘‘(B) adjusted to the nearest 1 3 ⁄8 of 1 per4 cent. 

5 ‘‘(2) WATER AND WASTE FACILITY LOANS AND

6 COMMUNITY FACILITIES LOANS.— 

7 ‘‘(A) IN GENERAL.—Notwithstanding any 

8 provision of State law limiting the rate or 

9 amount of interest that may be charged, taken, 

10 received, or reserved, except as provided in sub11 paragraph (C) and paragraph (5), the interest 

12 rate on a loan (other than a guaranteed loan) 

13 to a public body or nonprofit association (in14 cluding an Indian tribe) for a water or waste 

15 disposal facility or essential community facility 

16 shall be determined by the Secretary at a rate 

17 not to exceed— 

18 ‘‘(i) the current market yield on out19 standing municipal obligations with re20 maining periods to maturity comparable to 

21 the average maturity for the loan, and adjusted to the nearest 1 22 ⁄8 of 1 percent; 

23 ‘‘(ii) 5 percent per year for a loan 

24 that is for the upgrading of a facility or 

25 construction of a new facility as required 
664 

†S 3240 ES

1 to meet applicable health or sanitary 

2 standards in— 

3 ‘‘(I) an area in which the median 

4 family income of the persons to be 

5 served by the facility is below the pov6 erty line (as defined in section 673 of 

7 the Community Services Block Grant 

8 Act (42 U.S.C. 9902)); and 

9 ‘‘(II) any areas the Secretary 

10 may designate in which a significant 

11 percentage of the persons to be served 

12 by the facilities are low income per13 sons, as determined by the Secretary; 

14 and 

15 ‘‘(iii) 7 percent per year for a loan for 

16 a facility that does not qualify for the 5 

17 percent per year interest rate prescribed in 

18 clause (ii) but that is located in an area in 

19 a State in which the median household in20 come of the persons to be served by the fa21 cility does not exceed 100 percent of the 

22 statewide nonmetropolitan median house23 hold income for the State. 

24 ‘‘(B) HEALTH CARE AND RELATED FACILI25 TIES.—Notwithstanding subparagraph (A), the 
665 

†S 3240 ES

1 Secretary shall establish a rate for a loan for a 

2 health care or related facility that is— 

3 ‘‘(i) based solely on the income of the 

4 area to be served; and 

5 ‘‘(ii) otherwise consistent with sub6 paragraph (A). 

7 ‘‘(C) INTEREST RATES FOR WATER AND

8 WASTE DISPOSAL FACILITIES LOANS.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii) and notwithstanding 

11 subparagraph (A), in the case of a direct 

12 loan for a water or waste disposal facil13 ity— 

14 ‘‘(I) in the case of a loan that 

15 would be subject to the 5 percent in16 terest rate limitation under subpara17 graph (A), the Secretary shall estab18 lish the interest rate at a rate that is 

19 equal to 60 percent of the current 

20 market yield for outstanding munic21 ipal obligations with remaining peri22 ods to maturity comparable to the av23 erage maturity of the loan, adjusted 

to the nearest 1 24 ⁄8 of 1 percent; and 
666 

†S 3240 ES

1 ‘‘(II) in the case of a loan that 

2 would be subject to the 7 percent limi3 tation under subparagraph (A), the 

4 Secretary shall establish the interest 

5 rate at a rate that is equal to 80 per6 cent of the current market yield for 

7 outstanding municipal obligations 

8 with remaining periods to maturity 

9 comparable to the average maturity of 

the loan, adjusted to the nearest 1 10 ⁄8 of 

11 1 percent. 

12 ‘‘(ii) EXCEPTION.—Clause (i) does not 

13 apply to a loan for a specific project that 

14 is the subject of a loan that has been ap15 proved, but not closed, as of the date of 

16 enactment of the Agriculture Reform, 

17 Food, and Jobs Act of 2012. 

18 ‘‘(3) INTEREST RATES ON BUSINESS AND

19 OTHER LOANS.— 

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

21 paragraph (4), the interest rates on loans under 

22 sections 3501(a)(1) (other than guaranteed 

23 loans and loans as described in paragraph 

24 (2)(A)) shall be as determined by the Secretary 

25 in accordance with subparagraph (B). 
667 

†S 3240 ES

1 ‘‘(B) MINIMUM RATE.—The interest rates 

2 described in subparagraph (A) shall be not less 

3 than the sum obtained by adding— 

4 ‘‘(i) such rates as determined by the 

5 Secretary of the Treasury taking into con6 sideration the current average market yield 

7 on outstanding marketable obligations of 

8 the United States with remaining periods 

9 to maturity comparable to the average ma10 turities of such loans, adjusted in the judg11 ment of the Secretary of the Treasury to 

12 provide for rates comparable to the rates 

13 prevailing in the private market for similar 

14 loans and considering the insurance by the 

15 Secretary of the loans; and 

16 ‘‘(ii) an additional charge, prescribed 

17 by the Secretary, to cover the losses of the 

18 Secretary and cost of administration, 

19 which shall be deposited in the Rural De20 velopment Insurance Fund, and further 

adjusted to the nearest 1 21 ⁄8 of 1 percent. 

22 ‘‘(4) INTEREST RATES ADJUSTMENTS.— 

23 ‘‘(A) ADJUSTMENTS.—Notwithstanding 

24 any other provision of this subsection, in the 

25 case of loans (other than guaranteed loans) 
668 

†S 3240 ES

1 made or guaranteed under the authorities of 

2 this title specified in subparagraph (C) for ac3 tivities that involve the use of prime farmland, 

4 the interest rates shall be the interest rates oth5 erwise applicable under this section increased 

6 by 2 percent per year. 

7 ‘‘(B) PRIME FARMLAND.— 

8 ‘‘(i) IN GENERAL.—Wherever prac9 ticable, construction by a State, munici10 pality, or other political subdivision of local 

11 government that is supported by loans de12 scribed in subparagraph (A) shall be 

13 placed on land that is not prime farmland, 

14 in order to preserve the maximum prac15 ticable quantity of prime farmlands for 

16 production of food and fiber. 

17 ‘‘(ii) INCREASED RATE.—In any case 

18 in which other options exist for the siting 

19 of construction described in clause (i) and 

20 the governmental authority still desires to 

21 carry out the construction on prime farm22 land, the 2-percent interest rate increase 

23 provided by this paragraph shall apply, but 

24 that increased interest rate shall not apply 

25 where such other options do not exist. 
669 

†S 3240 ES

1 ‘‘(C) APPLICABLE AUTHORITIES.—The au2 thorities referred to in subparagraph (A) are— 

3 ‘‘(i) the provisions of section 3502(a) 

4 relating to loans for recreational develop5 ments and essential community facilities; 

6 ‘‘(ii) section 3601(e)(2)(A); and 

7 ‘‘(iii) section 3601(c). 

8 ‘‘(c) PAYMENT OF CHARGES.—A borrower of a loan 

9 made or guaranteed under this subtitle shall pay such fees 

10 and other charges as the Secretary may require, and pre11 pay to the Secretary such taxes and insurance as the Sec12 retary may require, on such terms and conditions as the 

13 Secretary may prescribe. 

14 ‘‘(d) SECURITY.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall take as 

16 security for an obligation entered into in connection 

17 with a loan made under this subtitle such security 

18 as the Secretary may require. 

19 ‘‘(2) LIENS TO UNITED STATES.—An instru20 ment for security under paragraph (1) may con21 stitute a lien running to the United States notwith22 standing the fact that the note for the security may 

23 be held by a lender other than the United States. 

24 ‘‘(3) MULTIPLE LOANS.—A borrower may use 

25 the same collateral to secure 2 or more loans made 
670 

†S 3240 ES

1 or guaranteed under this subtitle, except that the 

2 outstanding amount of the loans may not exceed the 

3 total value of the collateral. 

4 ‘‘(e) LEGAL COUNSEL FOR SMALL LOANS.—In the 

5 case of a loan of less than $500,000 made or guaranteed 

6 under section 3501 that is evidenced by a note or mort7 gage (as distinguished from a bond issue), the borrower 

8 shall not be required to appoint bond counsel to review 

9 the legal validity of the loan if the Secretary has available 

10 legal counsel to perform the review. 

11 ‘‘SEC. 3702. STRATEGIC ECONOMIC AND COMMUNITY DE12 VELOPMENT. 

13 ‘‘(a) PRIORITY.—In the case of any rural develop14 ment program authorized by this subtitle, the Secretary 

15 may give priority to applications that are otherwise eligible 

16 and support strategic community and economic develop17 ment plans on a multijurisdictional basis, as approved by 

18 the Secretary. 

19 ‘‘(b) EVALUATION.—In evaluating strategic applica20 tions, the Secretary shall give a higher priority to strategic 

21 applications for a plan described in subsection (a) that 

22 demonstrate— 

23 ‘‘(1) the plan was developed through the col24 laboration of multiple stakeholders in the service 

25 area of the plan, including the participation of com-
671 

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1 binations of stakeholders such as State, local, and 

2 tribal governments, nonprofit institutions, institu3 tions of higher education, and private entities; 

4 ‘‘(2) an understanding of the applicable re5 gional resources that could support the plan, includ6 ing natural resources, human resources, infrastruc7 ture, and financial resources; 

8 ‘‘(3) investment from other Federal agencies; 

9 ‘‘(4) investment from philanthropic organiza10 tions; and 

11 ‘‘(5) clear objectives for the plan and the ability 

12 to establish measurable performance measures and 

13 to track progress toward meeting the objectives. 

14 ‘‘SEC. 3703. GUARANTEED RURAL DEVELOPMENT LOANS. 

15 ‘‘(a) IN GENERAL.—The Secretary may provide fi16 nancial assistance to a borrower for a purpose provided 

17 in this subtitle by guaranteeing a loan made by any Fed18 eral or State chartered bank, savings and loan association, 

19 cooperative lending agency, or other legally organized 

20 lending agency. 

21 ‘‘(b) INTEREST RATE.—The interest rate payable by 

22 a borrower on the portion of a guaranteed loan that is 

23 sold by a lender to the secondary market under this sub24 title may be lower than the interest rate charged on the 

25 portion retained by the lender. 
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1 ‘‘(c) MAXIMUM GUARANTEE OF 90 PERCENT.—Ex2 cept as provided in subsections (d) and (e), a loan guar3 antee under this subtitle shall be for not more than 90 

4 percent of the principal and interest due on the loan. 

5 ‘‘(d) REFINANCED LOANS GUARANTEED AT 95 PER6 CENT.—The Secretary shall guarantee 95 percent of— 

7 ‘‘(1) in the case of a loan that solely refinances 

8 a direct loan made under this subtitle, the principal 

9 and interest due on the loan on the date of the refi10 nancing; or 

11 ‘‘(2) in the case of a loan that is used for mul12 tiple purposes, the portion of the loan that refi13 nances the principal and interest due on a direct 

14 loan made under this subtitle that is outstanding on 

15 the date on which the loan is guaranteed. 

16 ‘‘(e) RISK OF LOSS.— 

17 ‘‘(1) IN GENERAL.—Subject to subsection (b), 

18 the Secretary may not make a loan under section 

19 3501 or 3601 unless the Secretary determines that 

20 no other lender is willing to make the loan and as21 sume 10 percent of the potential loss to be sustained 

22 from the loan. 

23 ‘‘(2) EXCEPTION FOR NONPROFIT GROUPS.— 

24 Paragraph (1) shall not apply to a public body or 

25 nonprofit association, including an Indian tribe. 
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1 ‘‘SEC. 3704. RURAL DEVELOPMENT INSURANCE FUND. 

2 ‘‘(a) DEFINITION OF RURAL DEVELOPMENT

3 LOAN.—In this section, the term ‘rural development loan’ 

4 means a loan provided for by section 3501 or 3601. 

5 ‘‘(b) ESTABLISHMENT.—There is established in the 

6 Treasury of the United States a fund to be known as the 

7 ‘Rural Development Insurance Fund’ that shall be used 

8 by the Secretary to discharge the obligations of the Sec9 retary under contracts making or guaranteeing rural de10 velopment loans. 

11 ‘‘SEC. 3705. RURAL ECONOMIC AREA PARTNERSHIP ZONES. 

12 ‘‘(a) IN GENERAL.—The Secretary may designate ad13 ditional areas as rural economic area partnership zones 

14 to be assisted under this chapter— 

15 ‘‘(1) through an open, competitive process; and 

16 ‘‘(2) with priority given to rural areas— 

17 ‘‘(A) with excessive unemployment or 

18 underemployment, a high percentage of low-in19 come residents, or high rates of outmigration, 

20 as determined by the Secretary; and 

21 ‘‘(B) that the Secretary determines have a 

22 substantial need for assistance. 

23 ‘‘(b) REQUIREMENTS.—The Secretary shall carry out 

24 those rural economic area partnership zones administra25 tively in effect on the date of enactment of the Agriculture 

26 Reform, Food, and Jobs Act of 2012 in accordance with 
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1 the terms and conditions contained in the memoranda of 

2 agreement entered into by the Secretary for the rural eco3 nomic area partnership zones. 

4 ‘‘SEC. 3706. STREAMLINING APPLICATIONS AND IMPROV5 ING ACCESSIBILITY OF RURAL DEVELOP6 MENT PROGRAMS. 

7 ‘‘The Secretary shall expedite the process of creating 

8 user-friendly and accessible application forms and proce9 dures prioritizing programs and applications at the indi10 vidual level with an emphasis on utilizing current tech11 nology including online applications and submission proc12 esses. 

13 ‘‘SEC. 3707. STATE RURAL DEVELOPMENT PARTNERSHIP. 

14 ‘‘(a) DEFINITIONS.—In this section: 

15 ‘‘(1) AGENCY WITH RURAL RESPONSIBIL16 ITIES.—The term ‘agency with rural responsibilities’ 

17 means any executive agency (as defined in section 

18 105 of title 5, United States Code) that implements 

19 a Federal law, or administers a program, targeted at 

20 or having a significant impact on rural areas. 

21 ‘‘(2) PARTNERSHIP.—The term ‘Partnership’ 

22 means the State Rural Development Partnership 

23 continued by subsection (b). 

24 ‘‘(3) STATE RURAL DEVELOPMENT COUNCIL.— 

25 The term ‘State rural development council’ means a 
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1 State rural development council that meets the re2 quirements of subsection (c). 

3 ‘‘(b) PARTNERSHIP.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall sup5 port the State Rural Development Partnership com6 prised of State rural development councils. 

7 ‘‘(2) PURPOSES.—The purposes of the Partner8 ship are to empower and build the capacity of 

9 States, regions, and rural communities to design 

10 flexible and innovative responses to their rural devel11 opment needs in a manner that maximizes collabo12 rative public- and private-sector cooperation and 

13 minimizes regulatory redundancy. 

14 ‘‘(3) COORDINATING PANEL.—A panel con15 sisting of representatives of State rural development 

16 councils shall be established— 

17 ‘‘(A) to lead and coordinate the strategic 

18 operation and policies of the Partnership; and 

19 ‘‘(B) to facilitate effective communication 

20 among the members of the Partnership, includ21 ing the sharing of best practices. 

22 ‘‘(4) ROLE OF FEDERAL GOVERNMENT.—The 

23 role of the Federal Government in the Partnership 

24 may be that of a partner and facilitator, with Fed25 eral agencies authorized— 
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1 ‘‘(A) to cooperate with States to implement 

2 the Partnership; 

3 ‘‘(B) to provide States with the technical 

4 and administrative support necessary to plan 

5 and implement tailored rural development strat6 egies to meet local needs; 

7 ‘‘(C) to ensure that the head of each agen8 cy with rural responsibilities directs appropriate 

9 field staff to participate fully with the State 

10 rural development council within the jurisdic11 tion of the field staff; and 

12 ‘‘(D) to enter into cooperative agreements 

13 with, and to provide grants and other assistance 

14 to, State rural development councils. 

15 ‘‘(c) STATE RURAL DEVELOPMENT COUNCILS.— 

16 ‘‘(1) ESTABLISHMENT.—Notwithstanding chap17 ter 63 of title 31, United States Code, each State 

18 may elect to participate in the Partnership by enter19 ing into an agreement with the Secretary to recog20 nize a State rural development council. 

21 ‘‘(2) COMPOSITION.—A State rural development 

22 council shall— 

23 ‘‘(A) be composed of representatives of 

24 Federal, State, local, and tribal governments, 

25 nonprofit organizations, regional organizations, 
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1 the private sector, and other entities committed 

2 to rural advancement; and 

3 ‘‘(B) have a nonpartisan and nondiscrim4 inatory membership that— 

5 ‘‘(i) is broad and representative of the 

6 economic, social, and political diversity of 

7 the State; and 

8 ‘‘(ii) shall be responsible for the gov9 ernance and operations of the State rural 

10 development council. 

11 ‘‘(3) DUTIES.—A State rural development 

12 council shall— 

13 ‘‘(A) facilitate collaboration among Fed14 eral, State, local, and tribal governments and 

15 the private and nonprofit sectors in the plan16 ning and implementation of programs and poli17 cies that have an impact on rural areas of the 

18 State; 

19 ‘‘(B) monitor, report, and comment on 

20 policies and programs that address, or fail to 

21 address, the needs of the rural areas of the 

22 State; 

23 ‘‘(C) as part of the Partnership, facilitate 

24 the development of strategies to reduce or elimi25 nate conflicting or duplicative administrative or 
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1 regulatory requirements of Federal, State, local, 

2 and tribal governments; and 

3 ‘‘(D)(i) provide to the Secretary an annual 

4 plan with goals and performance measures; and 

5 ‘‘(ii) submit to the Secretary an annual re6 port on the progress of the State rural develop7 ment council in meeting the goals and meas8 ures. 

9 ‘‘(4) FEDERAL PARTICIPATION IN STATE RURAL

10 DEVELOPMENT COUNCILS.— 

11 ‘‘(A) IN GENERAL.—A State Director for 

12 Rural Development of the Department of Agri13 culture, other employees of the Department, 

14 and employees of other Federal agencies with 

15 rural responsibilities shall fully participate as 

16 voting members in the governance and oper17 ations of State rural development councils (in18 cluding activities related to grants, contracts, 

19 and other agreements in accordance with this 

20 section) on an equal basis with other members 

21 of the State rural development councils. 

22 ‘‘(B) CONFLICTS.—Participation by a Fed23 eral employee in a State rural development 

24 council in accordance with this paragraph shall 
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1 not constitute a violation of section 205 or 208 

2 of title 18, United States Code. 

3 ‘‘(d) ADMINISTRATIVE SUPPORT OF THE PARTNER4 SHIP.— 

5 ‘‘(1) DETAIL OF EMPLOYEES.— 

6 ‘‘(A) IN GENERAL.—In order to provide 

7 experience in intergovernmental collaboration, 

8 the head of an agency with rural responsibilities 

9 that elects to participate in the Partnership 

10 may, and is encouraged to, detail to the Sec11 retary for the support of the Partnership 1 or 

12 more employees of the agency with rural re13 sponsibilities without reimbursement for a pe14 riod of up to 1 year. 

15 ‘‘(B) CIVIL SERVICE STATUS.—The detail 

16 shall be without interruption or loss of civil 

17 service status or privilege. 

18 ‘‘(2) ADDITIONAL SUPPORT.—The Secretary 

19 may provide for any additional support staff to the 

20 Partnership as the Secretary determines to be nec21 essary to carry out the duties of the Partnership. 

22 ‘‘(3) INTERMEDIARIES.—The Secretary may 

23 enter into a contract with a qualified intermediary 

24 under which the intermediary shall be responsible 

25 for providing administrative and technical assistance 
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1 to a State rural development council, including ad2 ministering the financial assistance available to the 

3 State rural development council. 

4 ‘‘(e) MATCHING REQUIREMENTS FOR STATE RURAL

5 DEVELOPMENT COUNCILS.— 

6 ‘‘(1) IN GENERAL.—Except as provided in para7 graph (2), a State rural development council shall 

8 provide matching funds, or in-kind goods or services, 

9 to support the activities of the State rural develop10 ment council in an amount that is not less than 33 

11 percent of the amount of Federal funds received 

12 from a Federal agency under subsection (f)(2). 

13 ‘‘(2) EXCEPTIONS TO MATCHING REQUIREMENT

14 FOR CERTAIN FEDERAL FUNDS.—Paragraph (1) 

15 shall not apply to funds, grants, funds provided 

16 under contracts or cooperative agreements, gifts, 

17 contributions, or technical assistance received by a 

18 State rural development council from a Federal 

19 agency that are used— 

20 ‘‘(A) to support 1 or more specific pro21 gram or project activities; or 

22 ‘‘(B) to reimburse the State rural develop23 ment council for services provided to the Fed24 eral agency providing the funds, grants, funds 

25 provided under contracts or cooperative agree-
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1 ments, gifts, contributions, or technical assist2 ance. 

3 ‘‘(3) DEPARTMENT’S SHARE.—The Secretary 

4 shall develop a plan to decrease, over time, the share 

5 of the Department of Agriculture of the cost of the 

6 core operations of State rural development councils. 

7 ‘‘(f) FUNDING.— 

8 ‘‘(1) AUTHORIZATION OF APPROPRIATIONS.— 

9 There is authorized to be appropriated to carry out 

10 this section $5,000,000 for each of fiscal years 2013 

11 through 2017. 

12 ‘‘(2) FEDERAL AGENCIES.— 

13 ‘‘(A) IN GENERAL.—Notwithstanding any 

14 other provision of law limiting the ability of an 

15 agency, along with other agencies, to provide 

16 funds to a State rural development council in 

17 order to carry out the purposes of this section, 

18 a Federal agency may make grants, gifts, or 

19 contributions to, provide technical assistance to, 

20 or enter into contracts or cooperative agree21 ments with, a State rural development council. 

22 ‘‘(B) ASSISTANCE.—Federal agencies are 

23 encouraged to use funds made available for pro24 grams that have an impact on rural areas to 

25 provide assistance to, and enter into contracts 
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1 with, a State rural development council, as de2 scribed in subparagraph (A). 

3 ‘‘(3) CONTRIBUTIONS.—A State rural develop4 ment council may accept private contributions. 

5 ‘‘(g) TERMINATION.—The authority provided under 

6 this section shall terminate on September 30, 2017. 

7 ‘‘CHAPTER 4—DELTA REGIONAL 

8 AUTHORITY 

9 ‘‘SEC. 3801. DEFINITIONS. 

10 ‘‘In this chapter: 

11 ‘‘(1) AUTHORITY.—The term ‘Authority’ means 

12 the Delta Regional Authority established by section 

13 3802. 

14 ‘‘(2) FEDERAL GRANT PROGRAM.—The term 

15 ‘Federal grant program’ means a Federal grant pro16 gram to provide assistance in— 

17 ‘‘(A) acquiring or developing land; 

18 ‘‘(B) constructing or equipping a highway, 

19 road, bridge, or facility; or 

20 ‘‘(C) carrying out other economic develop21 ment activities. 

22 ‘‘(3) REGION.—The term ‘region’ means the 

23 Lower Mississippi (as defined in section 4 of the 

24 Delta Development Act (42 U.S.C. 3121 note; Pub25 lic Law 100–460)). 
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1 ‘‘SEC. 3802. DELTA REGIONAL AUTHORITY. 

2 ‘‘(a) ESTABLISHMENT.— 

3 ‘‘(1) IN GENERAL.—There is established the 

4 Delta Regional Authority. 

5 ‘‘(2) COMPOSITION.—The Authority shall be 

6 composed of— 

7 ‘‘(A) a Federal member, to be appointed 

8 by the President, with the advice and consent 

9 of the Senate; and 

10 ‘‘(B) the Governor (or a designee of the 

11 Governor) of each State in the region that 

12 elects to participate in the Authority. 

13 ‘‘(3) COCHAIRPERSONS.—The Authority shall 

14 be headed by— 

15 ‘‘(A) the Federal member, who shall serve 

16 as— 

17 ‘‘(i) the Federal cochairperson; and 

18 ‘‘(ii) a liaison between the Federal 

19 Government and the Authority; and 

20 ‘‘(B) a State cochairperson, who shall be— 

21 ‘‘(i) a Governor of a participating 

22 State in the region; and 

23 ‘‘(ii) elected by the State members for 

24 a term of not less than 1 year. 

25 ‘‘(4) ALABAMA.—Notwithstanding any other 

26 provision of law, the State of Alabama shall be a full 
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1 member of the Authority and shall be entitled to all 

2 rights and privileges that the membership affords to 

3 all other participating States in the Authority. 

4 ‘‘(b) ALTERNATE MEMBERS.— 

5 ‘‘(1) STATE ALTERNATES.—The State member 

6 of a participating State may have a single alternate, 

7 who shall be— 

8 ‘‘(A) a resident of that State; and 

9 ‘‘(B) appointed by the Governor of the 

10 State. 

11 ‘‘(2) ALTERNATE FEDERAL COCHAIRPERSON.— 

12 The President shall appoint an alternate Federal co13 chairperson. 

14 ‘‘(3) QUORUM.—A State alternate shall not be 

15 counted toward the establishment of a quorum of 

16 the Authority in any instance in which a quorum of 

17 the State members is required to be present. 

18 ‘‘(4) DELEGATION OF POWER.—No power or 

19 responsibility of the Authority specified in para20 graphs (2) and (3) of subsection (c), and no voting 

21 right of any Authority member, shall be delegated to 

22 any person— 

23 ‘‘(A) who is not an Authority member; or 

24 ‘‘(B) who is not entitled to vote in Author25 ity meetings. 
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1 ‘‘(c) VOTING.— 

2 ‘‘(1) IN GENERAL.—A decision by the Authority 

3 shall require a majority vote of the Authority (not 

4 including any member representing a State that is 

5 delinquent under subsection (g)(2)(C)) to be effec6 tive. 

7 ‘‘(2) QUORUM.—A quorum of State members 

8 shall be required to be present for the Authority to 

9 make any policy decision, including— 

10 ‘‘(A) a modification or revision of an Au11 thority policy decision; 

12 ‘‘(B) approval of a State or regional devel13 opment plan; and 

14 ‘‘(C) any allocation of funds among the 

15 States. 

16 ‘‘(3) PROJECT AND GRANT PROPOSALS.—The 

17 approval of project and grant proposals shall be— 

18 ‘‘(A) a responsibility of the Authority; and 

19 ‘‘(B) conducted in accordance with section 

20 3809. 

21 ‘‘(4) VOTING BY ALTERNATE MEMBERS.—An 

22 alternate member shall vote in the case of the ab23 sence, death, disability, removal, or resignation of 

24 the Federal or State representative for which the al25 ternate member is an alternate. 
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1 ‘‘(d) DUTIES.—The Authority shall— 

2 ‘‘(1) develop, on a continuing basis, comprehen3 sive and coordinated plans and programs to establish 

4 priorities and approve grants for the economic devel5 opment of the region, giving due consideration to 

6 other Federal, State, and local planning and devel7 opment activities in the region; 

8 ‘‘(2) review, and where appropriate amend, pri9 orities in a development plan for the region (includ10 ing 5-year regional outcome targets); 

11 ‘‘(3) assess the needs and assets of the region 

12 based on available research, demonstrations, inves13 tigations, assessments, and evaluations of the region 

14 prepared by Federal, State, and local agencies, uni15 versities, local development districts, and other non16 profit groups; 

17 ‘‘(4) formulate and recommend to the Gov18 ernors and legislatures of States that participate in 

19 the Authority forms of interstate cooperation; 

20 ‘‘(5) work with State and local agencies in de21 veloping appropriate model legislation; 

22 ‘‘(6)(A) enhance the capacity of, and provide 

23 support for, local development districts in the region; 

24 or 
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1 ‘‘(B) if no local development district exists in 

2 an area in a participating State in the region, foster 

3 the creation of a local development district; 

4 ‘‘(7) encourage private investment in industrial, 

5 commercial, and other economic development 

6 projects in the region; and 

7 ‘‘(8) cooperate with and assist State govern8 ments with economic development programs of par9 ticipating States. 

10 ‘‘(e) ADMINISTRATION.—In carrying out subsection 

11 (d), the Authority may— 

12 ‘‘(1) hold such hearings, sit and act at such 

13 times and places, take such testimony, receive such 

14 evidence, and print or otherwise reproduce and dis15 tribute a description of the proceedings and reports 

16 on actions by the Authority as the Authority con17 siders appropriate; 

18 ‘‘(2) authorize, through the Federal or State co19 chairperson or any other member of the Authority 

20 designated by the Authority, the administration of 

21 oaths if the Authority determines that testimony 

22 should be taken or evidence received under oath; 

23 ‘‘(3) request from any Federal, State, or local 

24 department or agency such information as may be 

25 available to or procurable by the department or 
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1 agency that may be of use to the Authority in car2 rying out duties of the Authority; 

3 ‘‘(4) adopt, amend, and repeal bylaws, rules, 

4 and regulations governing the conduct of Authority 

5 business and the performance of Authority duties; 

6 ‘‘(5) request the head of any Federal depart7 ment or agency to detail to the Authority such per8 sonnel as the Authority requires to carry out duties 

9 of the Authority, each such detail to be without loss 

10 of seniority, pay, or other employee status; 

11 ‘‘(6) request the head of any State department 

12 or agency or local government to detail to the Au13 thority such personnel as the Authority requires to 

14 carry out duties of the Authority, each such detail 

15 to be without loss of seniority, pay, or other em16 ployee status; 

17 ‘‘(7) provide for coverage of Authority employ18 ees in a suitable retirement and employee benefit 

19 system by— 

20 ‘‘(A) making arrangements or entering 

21 into contracts with any participating State gov22 ernment; or 

23 ‘‘(B) otherwise providing retirement and 

24 other employee benefit coverage; 
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1 ‘‘(8) accept, use, and dispose of gifts or dona2 tions of services or real, personal, tangible, or intan3 gible property; 

4 ‘‘(9) enter into and perform such contracts, 

5 leases, cooperative agreements, or other transactions 

6 as are necessary to carry out Authority duties, in7 cluding any contracts, leases, or cooperative agree8 ments with— 

9 ‘‘(A) any department, agency, or instru10 mentality of the United States; 

11 ‘‘(B) any State (including a political sub12 division, agency, or instrumentality of the 

13 State); or 

14 ‘‘(C) any person, firm, association, or cor15 poration; and 

16 ‘‘(10) establish and maintain a central office 

17 and field offices at such locations as the Authority 

18 may select. 

19 ‘‘(f) FEDERAL AGENCY COOPERATION.—A Federal 

20 agency shall— 

21 ‘‘(1) cooperate with the Authority; and 

22 ‘‘(2) provide, on request of the Federal cochair23 person, appropriate assistance in carrying out this 

24 chapter, in accordance with applicable Federal laws 

25 (including regulations). 
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1 ‘‘(g) ADMINISTRATIVE EXPENSES.— 

2 ‘‘(1) IN GENERAL.—Administrative expenses of 

3 the Authority (except for the expenses of the Fed4 eral cochairperson, including expenses of the alter5 nate and staff of the Federal cochairperson, which 

6 shall be paid solely by the Federal Government) 

7 shall be paid— 

8 ‘‘(A) by the Federal Government, in an 

9 amount equal to 50 percent of the administra10 tive expenses; and 

11 ‘‘(B) by the States in the region partici12 pating in the Authority, in an amount equal to 

13 50 percent of the administrative expenses. 

14 ‘‘(2) STATE SHARE.— 

15 ‘‘(A) IN GENERAL.—The share of adminis16 trative expenses of the Authority to be paid by 

17 each State shall be determined by the Author18 ity. 

19 ‘‘(B) NO FEDERAL PARTICIPATION.—The 

20 Federal cochairperson shall not participate or 

21 vote in any decision under subparagraph (A). 

22 ‘‘(C) DELINQUENT STATES.—If a State is 

23 delinquent in payment of the State’s share of 

24 administrative expenses of the Authority under 

25 this subsection— 
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1 ‘‘(i) no assistance under this chapter 

2 shall be furnished to the State (including 

3 assistance to a political subdivision or a 

4 resident of the State); and 

5 ‘‘(ii) no member of the Authority from 

6 the State shall participate or vote in any 

7 action by the Authority. 

8 ‘‘(h) COMPENSATION.— 

9 ‘‘(1) FEDERAL COCHAIRPERSON.—The Federal 

10 cochairperson shall be compensated by the Federal 

11 Government at level III of the Executive Schedule in 

12 subchapter II of chapter 53 of title 5, United States 

13 Code. 

14 ‘‘(2) ALTERNATE FEDERAL COCHAIRPERSON.— 

15 The alternate Federal cochairperson— 

16 ‘‘(A) shall be compensated by the Federal 

17 Government at level V of the Executive Sched18 ule described in paragraph (1); and 

19 ‘‘(B) when not actively serving as an alter20 nate for the Federal cochairperson, shall per21 form such functions and duties as are delegated 

22 by the Federal cochairperson. 

23 ‘‘(3) STATE MEMBERS AND ALTERNATES.— 

24 ‘‘(A) IN GENERAL.—A State shall com25 pensate each member and alternate rep-
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1 resenting the State on the Authority at the rate 

2 established by law of the State. 

3 ‘‘(B) NO ADDITIONAL COMPENSATION.— 

4 No State member or alternate member shall re5 ceive any salary, or any contribution to or sup6 plementation of salary from any source other 

7 than the State for services provided by the 

8 member or alternate to the Authority. 

9 ‘‘(4) DETAILED EMPLOYEES.— 

10 ‘‘(A) IN GENERAL.—No person detailed to 

11 serve the Authority under subsection (e)(6) 

12 shall receive any salary or any contribution to 

13 or supplementation of salary for services pro14 vided to the Authority from— 

15 ‘‘(i) any source other than the State, 

16 local, or intergovernmental department or 

17 agency from which the person was detailed; 

18 or 

19 ‘‘(ii) the Authority. 

20 ‘‘(B) VIOLATION.—Any person that vio21 lates this paragraph shall be fined not more 

22 than $5,000, imprisoned not more than 1 year, 

23 or both. 

24 ‘‘(C) APPLICABLE LAW.—The Federal co25 chairperson, the alternate Federal cochair-
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1 person, and any Federal officer or employee de2 tailed to duty on the Authority under sub3 section (e)(5) shall not be subject to subpara4 graph (A), but shall remain subject to sections 

5 202 through 209 of title 18, United States 

6 Code. 

7 ‘‘(5) ADDITIONAL PERSONNEL.— 

8 ‘‘(A) COMPENSATION.— 

9 ‘‘(i) IN GENERAL.—The Authority 

10 may appoint and fix the compensation of 

11 an executive director and such other per12 sonnel as are necessary to enable the Au13 thority to carry out the duties of the Au14 thority. 

15 ‘‘(ii) EXCEPTION.—Compensation 

16 under clause (i) shall not exceed the max17 imum rate for the Senior Executive Service 

18 under section 5382 of title 5, United 

19 States Code, including any applicable local20 ity-based comparability payment that may 

21 be authorized under section 5304(h)(2)(C) 

22 of that title. 

23 ‘‘(B) EXECUTIVE DIRECTOR.—The execu24 tive director shall be responsible for— 
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1 ‘‘(i) the carrying out of the adminis2 trative duties of the Authority; 

3 ‘‘(ii) direction of the Authority staff; 

4 and 

5 ‘‘(iii) such other duties as the Author6 ity may assign. 

7 ‘‘(C) NO FEDERAL EMPLOYEE STATUS.— 

8 No member, alternate, officer, or employee of 

9 the Authority (except the Federal cochairperson 

10 of the Authority, the alternate and staff for the 

11 Federal cochairperson, and any Federal em12 ployee detailed to the Authority under sub13 section (e)(5)) shall be considered to be a Fed14 eral employee for any purpose. 

15 ‘‘(i) CONFLICTS OF INTEREST.— 

16 ‘‘(1) IN GENERAL.—Except as provided under 

17 paragraph (2), no State member, alternate, officer, 

18 or employee of the Authority shall participate per19 sonally and substantially as a member, alternate, of20 ficer, or employee of the Authority, through decision, 

21 approval, disapproval, recommendation, the ren22 dering of advice, investigation, or otherwise, in any 

23 proceeding, application, request for a ruling or other 

24 determination, contract, claim, controversy, or other 

25 matter in which, to knowledge of the member, alter-
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1 nate, officer, or employee, there is a financial inter2 est of— 

3 ‘‘(A) the member, alternate, officer, or em4 ployee; 

5 ‘‘(B) the spouse, minor child, partner, or 

6 organization (other than a State or political 

7 subdivision of the State) of the member, alter8 nate, officer, or employee, in which the member, 

9 alternate, officer, or employee is serving as offi10 cer, director, trustee, partner, or employee; or 

11 ‘‘(C) any person or organization with 

12 whom the member, alternate, officer, or em13 ployee is negotiating or has any arrangement 

14 concerning prospective employment. 

15 ‘‘(2) DISCLOSURE.—Paragraph (1) shall not 

16 apply if the State member, alternate, officer, or em17 ployee— 

18 ‘‘(A) immediately advises the Authority of 

19 the nature and circumstances of the proceeding, 

20 application, request for a ruling or other deter21 mination, contract, claim, controversy, or other 

22 particular matter presenting a potential conflict 

23 of interest; 

24 ‘‘(B) makes full disclosure of the financial 

25 interest; and 
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1 ‘‘(C) before the proceeding concerning the 

2 matter presenting the conflict of interest, re3 ceives a written determination by the Authority 

4 that the interest is not so substantial as to be 

5 likely to affect the integrity of the services that 

6 the Authority may expect from the State mem7 ber, alternate, officer, or employee. 

8 ‘‘(3) VIOLATION.—Any person that violates this 

9 subsection shall be fined not more than $10,000, im10 prisoned not more than 2 years, or both. 

11 ‘‘(j) VALIDITY OF CONTRACTS, LOANS, AND

12 GRANTS.—The Authority may declare void any contract, 

13 loan, or grant of or by the Authority in relation to which 

14 the Authority determines that there has been a violation 

15 of any provision under subsection (h)(4), subsection (i), 

16 or sections 202 through 209 of title 18, United States 

17 Code. 

18 ‘‘SEC. 3803. ECONOMIC AND COMMUNITY DEVELOPMENT 

19 GRANTS. 

20 ‘‘(a) IN GENERAL.—The Authority may approve 

21 grants to States and public and nonprofit entities for 

22 projects, approved in accordance with section 3809— 

23 ‘‘(1) to develop the transportation infrastruc24 ture of the region for the purpose of facilitating eco25 nomic development in the region (except that grants 
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1 for this purpose may only be made to a State or 

2 local government); 

3 ‘‘(2) to assist the region in obtaining the job 

4 training, employment-related education, and busi5 ness development (with an emphasis on entrepre6 neurship) that are needed to build and maintain 

7 strong local economies; 

8 ‘‘(3) to provide assistance to severely distressed 

9 and underdeveloped areas that lack financial re10 sources for improving basic public services; 

11 ‘‘(4) to provide assistance to severely distressed 

12 and underdeveloped areas that lack financial re13 sources for equipping industrial parks and related 

14 facilities; and 

15 ‘‘(5) to otherwise achieve the purposes of this 

16 chapter. 

17 ‘‘(b) FUNDING.— 

18 ‘‘(1) IN GENERAL.—Funds for grants under 

19 subsection (a) may be provided— 

20 ‘‘(A) entirely from appropriations to carry 

21 out this section; 

22 ‘‘(B) in combination with funds available 

23 under another Federal or Federal grant pro24 gram; or 

25 ‘‘(C) from any other source. 
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1 ‘‘(2) PRIORITY OF FUNDING.—To best build the 

2 foundations for long-term economic development and 

3 to complement other Federal and State resources in 

4 the region, Federal funds available under this chap5 ter shall be focused on the activities in the following 

6 order or priority: 

7 ‘‘(A) Basic public infrastructure in dis8 tressed counties and isolated areas of distress. 

9 ‘‘(B) Transportation infrastructure for the 

10 purpose of facilitating economic development in 

11 the region. 

12 ‘‘(C) Business development, with emphasis 

13 on entrepreneurship. 

14 ‘‘(D) Job training or employment-related 

15 education, with emphasis on use of existing 

16 public educational institutions located in the re17 gion. 

18 ‘‘SEC. 3804. SUPPLEMENTS TO FEDERAL GRANT PRO19 GRAMS. 

20 ‘‘(a) FINDING.—Congress finds that certain States 

21 and local communities of the region, including local devel22 opment districts, may be unable to take maximum advan23 tage of Federal grant programs for which the States and 

24 communities are eligible because— 
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1 ‘‘(1) the States or communities lack the eco2 nomic resources to provide the required matching 

3 share; or 

4 ‘‘(2) there are insufficient funds available under 

5 the applicable Federal law authorizing the Federal 

6 grant program to meet pressing needs of the region. 

7 ‘‘(b) FEDERAL GRANT PROGRAM FUNDING.—Not8 withstanding any provision of law limiting the Federal 

9 share, the areas eligible for assistance, or the authoriza10 tions of appropriations of any Federal grant program, and 

11 in accordance with subsection (c), the Authority, with the 

12 approval of the Federal cochairperson and with respect to 

13 a project to be carried out in the region— 

14 ‘‘(1) may increase the Federal share of the 

15 costs of a project under the Federal grant program 

16 to not more than 90 percent (except as provided in 

17 section 3806(b)); and 

18 ‘‘(2) shall use amounts made available to carry 

19 out this chapter to pay the increased Federal share. 

20 ‘‘(c) CERTIFICATIONS.— 

21 ‘‘(1) IN GENERAL.—In the case of any project 

22 for which all or any portion of the basic Federal 

23 share of the costs of the project is proposed to be 

24 paid under this section, no Federal contribution 

25 shall be made until the Federal official admin-
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1 istering the Federal law that authorizes the Federal 

2 grant program certifies that the project— 

3 ‘‘(A) meets (except as provided in sub4 section (b)) the applicable requirements of the 

5 applicable Federal grant program; and 

6 ‘‘(B) could be approved for Federal con7 tribution under the Federal grant program if 

8 funds were available under the law for the 

9 project. 

10 ‘‘(2) CERTIFICATION BY AUTHORITY.— 

11 ‘‘(A) IN GENERAL.—The certifications and 

12 determinations required to be made by the Au13 thority for approval of projects under this Act 

14 in accordance with section 3809 shall be— 

15 ‘‘(i) controlling; and 

16 ‘‘(ii) accepted by the Federal agencies. 

17 ‘‘(B) ACCEPTANCE BY FEDERAL COCHAIR18 PERSON.—In the case of any project described 

19 in paragraph (1), any finding, report, certifi20 cation, or documentation required to be sub21 mitted with respect to the project to the head 

22 of the department, agency, or instrumentality of 

23 the Federal Government responsible for the ad24 ministration of the Federal grant program 
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1 under which the project is carried out shall be 

2 accepted by the Federal cochairperson. 

3 ‘‘SEC. 3805. LOCAL DEVELOPMENT DISTRICTS; CERTIFI4 CATION AND ADMINISTRATIVE EXPENSES. 

5 ‘‘(a) DEFINITION OF LOCAL DEVELOPMENT DIS6 TRICT.—In this section, the term ‘local development dis7 trict’ means an entity that— 

8 ‘‘(1) is— 

9 ‘‘(A) a planning district in existence on the 

10 date of enactment of the Agriculture Reform, 

11 Food, and Jobs Act of 2012 that is recognized 

12 by the Secretary; or 

13 ‘‘(B) if an entity described in subpara14 graph (A) does not exist— 

15 ‘‘(i) organized and operated in a man16 ner that ensures broad-based community 

17 participation and an effective opportunity 

18 for other nonprofit groups to contribute to 

19 the development and implementation of 

20 programs in the region; 

21 ‘‘(ii) governed by a policy board with 

22 at least a simple majority of members con23 sisting of elected officials or employees of 

24 a general purpose unit of local government 
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1 who have been appointed to represent the 

2 government; 

3 ‘‘(iii) certified to the Authority as hav4 ing a charter or authority that includes the 

5 economic development of counties or parts 

6 of counties or other political subdivisions 

7 within the region— 

8 ‘‘(I) by the Governor of each 

9 State in which the entity is located; or 

10 ‘‘(II) by the State officer des11 ignated by the appropriate State law 

12 to make the certification; and 

13 ‘‘(iv)(I) a nonprofit incorporated body 

14 organized or chartered under the law of 

15 the State in which the entity is located; 

16 ‘‘(II) a nonprofit agency or instru17 mentality of a State or local government; 

18 ‘‘(III) a public organization estab19 lished before December 21, 2000, under 

20 State law for creation of multi-jurisdic21 tional, area-wide planning organizations; or 

22 ‘‘(IV) a nonprofit association or com23 bination of bodies, agencies, and instru24 mentalities described in subclauses (I) 

25 through (III); and 
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1 ‘‘(2) has not, as certified by the Federal co2 chairperson— 

3 ‘‘(A) inappropriately used Federal grant 

4 funds from any Federal source; or 

5 ‘‘(B) appointed an officer who, during the 

6 period in which another entity inappropriately 

7 used Federal grant funds from any Federal 

8 source, was an officer of the other entity. 

9 ‘‘(b) GRANTS TO LOCAL DEVELOPMENT DIS10 TRICTS.— 

11 ‘‘(1) IN GENERAL.—The Authority shall make 

12 grants for administrative expenses under this sec13 tion. 

14 ‘‘(2) CONDITIONS FOR GRANTS.— 

15 ‘‘(A) MAXIMUM AMOUNT.—The amount of 

16 any grant awarded under paragraph (1) shall 

17 not exceed 80 percent of the administrative ex18 penses of the local development district receiv19 ing the grant. 

20 ‘‘(B) MAXIMUM PERIOD.—No grant de21 scribed in paragraph (1) shall be awarded to a 

22 State agency certified as a local development 

23 district for a period greater than 3 years. 

24 ‘‘(C) LOCAL SHARE.—The contributions of 

25 a local development district for administrative 
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1 expenses may be in cash or in kind, fairly evalu2 ated, including space, equipment, and services. 

3 ‘‘(c) DUTIES OF LOCAL DEVELOPMENT DIS4 TRICTS.—A local development district shall— 

5 ‘‘(1) operate as a lead organization serving 

6 multicounty areas in the region at the local level; 

7 and 

8 ‘‘(2) serve as a liaison between State and local 

9 governments, nonprofit organizations (including 

10 community-based groups and educational institu11 tions), the business community, and citizens that— 

12 ‘‘(A) are involved in multijurisdictional 

13 planning; 

14 ‘‘(B) provide technical assistance to local 

15 jurisdictions and potential grantees; and 

16 ‘‘(C) provide leadership and civic develop17 ment assistance. 

18 ‘‘SEC. 3806. DISTRESSED COUNTIES AND AREAS AND NON19 DISTRESSED COUNTIES. 

20 ‘‘(a) DESIGNATIONS.—Each year, the Authority, in 

21 accordance with such criteria as the Authority may estab22 lish, shall designate— 

23 ‘‘(1) as distressed counties, counties in the re24 gion that are the most severely and persistently dis-
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1 tressed and underdeveloped and have high rates of 

2 poverty or unemployment; 

3 ‘‘(2) as nondistressed counties, counties in the 

4 region that are not designated as distressed counties 

5 under paragraph (1); and 

6 ‘‘(3) as isolated areas of distress, areas located 

7 in nondistressed counties (as designated under para8 graph (2)) that have high rates of poverty or unem9 ployment. 

10 ‘‘(b) DISTRESSED COUNTIES.— 

11 ‘‘(1) IN GENERAL.—The Authority shall allo12 cate at least 75 percent of the appropriations made 

13 available under section 3813 for programs and 

14 projects designed to serve the needs of distressed 

15 counties and isolated areas of distress in the region. 

16 ‘‘(2) FUNDING LIMITATIONS.—The funding lim17 itations under section 3804(b) shall not apply to a 

18 project providing transportation or basic public serv19 ices to residents of 1 or more distressed counties or 

20 isolated areas of distress in the region. 

21 ‘‘(c) NONDISTRESSED COUNTIES.— 

22 ‘‘(1) IN GENERAL.—Except as provided in this 

23 subsection, no funds shall be provided under this 

24 chapter for a project located in a county designated 

25 as a nondistressed county under subsection (a)(2). 
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1 ‘‘(2) EXCEPTIONS.— 

2 ‘‘(A) IN GENERAL.—The funding prohibi3 tion under paragraph (1) shall not apply to 

4 grants to fund the administrative expenses of 

5 local development districts under section 

6 3805(b). 

7 ‘‘(B) MULTICOUNTY PROJECTS.—The Au8 thority may waive the application of the fund9 ing prohibition under paragraph (1) to a multi10 county project that includes participation by a 

11 nondistressed county; or any other type of 

12 project if the Authority determines that the 

13 project could bring significant benefits to areas 

14 of the region outside a nondistressed county. 

15 ‘‘(C) ISOLATED AREAS OF DISTRESS.—For 

16 a designation of an isolated area of distress for 

17 assistance to be effective, the designation shall 

18 be supported— 

19 ‘‘(i) by the most recent Federal data 

20 available; or 

21 ‘‘(ii) if no recent Federal data are 

22 available, by the most recent data available 

23 through the government of the State in 

24 which the isolated area of distress is lo25 cated. 
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1 ‘‘(d) TRANSPORTATION AND BASIC PUBLIC INFRA2 STRUCTURE.—The Authority shall allocate at least 50 per3 cent of any funds made available under section 3813 for 

4 transportation and basic public infrastructure projects au5 thorized under paragraphs (1) and (3) of section 3803(a). 

6 ‘‘SEC. 3807. DEVELOPMENT PLANNING PROCESS. 

7 ‘‘(a) STATE DEVELOPMENT PLAN.—In accordance 

8 with policies established by the Authority, each State 

9 member shall submit a development plan for the area of 

10 the region represented by the State member. 

11 ‘‘(b) CONTENT OF PLAN.—A State development plan 

12 submitted under subsection (a) shall reflect the goals, ob13 jectives, and priorities identified in the regional develop14 ment plan developed under section 3802(d)(2). 

15 ‘‘(c) CONSULTATION WITH INTERESTED LOCAL PAR16 TIES.—In carrying out the development planning process 

17 (including the selection of programs and projects for as18 sistance), a State may— 

19 ‘‘(1) consult with— 

20 ‘‘(A) local development districts; and 

21 ‘‘(B) local units of government; and 

22 ‘‘(2) take into consideration the goals, objec23 tives, priorities, and recommendations of the entities 

24 described in paragraph (1). 

25 ‘‘(d) PUBLIC PARTICIPATION.— 
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1 ‘‘(1) IN GENERAL.—The Authority and applica2 ble State and local development districts shall en3 courage and assist, to the maximum extent prac4 ticable, public participation in the development, revi5 sion, and implementation of all plans and programs 

6 under this chapter. 

7 ‘‘(2) REGULATIONS.—The Authority shall de8 velop guidelines for providing public participation 

9 described in paragraph (1), including public hear10 ings. 

11 ‘‘SEC. 3808. PROGRAM DEVELOPMENT CRITERIA. 

12 ‘‘(a) IN GENERAL.—In considering programs and 

13 projects to be provided assistance under this chapter and 

14 in establishing a priority ranking of the requests for as15 sistance provided by the Authority, the Authority shall fol16 low procedures that ensure, to the maximum extent prac17 ticable, consideration of— 

18 ‘‘(1) the relationship of the project or class of 

19 projects to overall regional development; 

20 ‘‘(2) the per capita income and poverty and un21 employment rates in an area; 

22 ‘‘(3) the financial resources available to the ap23 plicants for assistance seeking to carry out the 

24 project, with emphasis on ensuring that projects are 
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1 adequately financed to maximize the probability of 

2 successful economic development; 

3 ‘‘(4) the importance of the project or class of 

4 projects in relation to other projects or classes of 

5 projects that may be in competition for the same 

6 funds; 

7 ‘‘(5) the prospects that the project for which as8 sistance is sought will improve, on a continuing rath9 er than a temporary basis, the opportunities for em10 ployment, the average level of income, or the eco11 nomic development of the area served by the project; 

12 and 

13 ‘‘(6) the extent to which the project design pro14 vides for detailed outcome measurements by which 

15 grant expenditures and the results of the expendi16 tures may be evaluated. 

17 ‘‘(b) NO RELOCATION ASSISTANCE.— 

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graph (2), no financial assistance authorized by this 

20 chapter shall be used to assist a person or entity in 

21 relocating from 1 area to another. 

22 ‘‘(2) OUTSIDE BUSINESSES.—Financial assist23 ance under this chapter may be used as otherwise 

24 authorized by this title to attract businesses from 

25 outside the region to the region. 
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1 ‘‘(c) REDUCTION OF FUNDS.—Funds may be pro2 vided for a program or project in a State under this chap3 ter only if the Authority determines that the level of Fed4 eral or State financial assistance provided under a law 

5 other than this chapter, for the same type of program or 

6 project in the same area of the State within the region, 

7 will not be reduced as a result of funds made available 

8 by this chapter. 

9 ‘‘SEC. 3809. APPROVAL OF DEVELOPMENT PLANS AND 

10 PROJECTS. 

11 ‘‘(a) IN GENERAL.—A State or regional development 

12 plan or any multistate subregional plan that is proposed 

13 for development under this chapter shall be reviewed and 

14 approved by the Authority. 

15 ‘‘(b) EVALUATION BY STATE MEMBER.—An applica16 tion for a grant or any other assistance for a project under 

17 this chapter shall be made through and evaluated for ap18 proval by the State member of the Authority representing 

19 the applicant. 

20 ‘‘(c) CERTIFICATION.—An application for a grant or 

21 other assistance for a project shall be approved only on 

22 certification by the State member that the application for 

23 the project— 

24 ‘‘(1) describes ways in which the project com25 plies with any applicable State development plan; 
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1 ‘‘(2) meets applicable criteria under section 

2 3808; 

3 ‘‘(3) provides adequate assurance that the pro4 posed project will be properly administered, oper5 ated, and maintained; and 

6 ‘‘(4) otherwise meets the requirements of this 

7 chapter. 

8 ‘‘(d) APPROVAL OF GRANT APPLICATIONS.—On cer9 tification by a State member of the Authority of an appli10 cation for a grant or other assistance for a specific project 

11 under this section, an affirmative vote of the Authority 

12 under section 3802(c) shall be required for approval of 

13 the application. 

14 ‘‘SEC. 3810. CONSENT OF STATES. 

15 ‘‘Nothing in this chapter requires any State to engage 

16 in or accept any program under this chapter without the 

17 consent of the State. 

18 ‘‘SEC. 3811. RECORDS. 

19 ‘‘(a) RECORDS OF THE AUTHORITY.— 

20 ‘‘(1) IN GENERAL.—The Authority shall main21 tain accurate and complete records of all trans22 actions and activities of the Authority. 

23 ‘‘(2) AVAILABILITY.—All records of the Author24 ity shall be available for audit and examination by 

25 the Comptroller General of the United States and 
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1 the Inspector General of the Department of Agri2 culture (including authorized representatives of the 

3 Comptroller General and the Inspector General of 

4 the Department of Agriculture). 

5 ‘‘(b) RECORDS OF RECIPIENTS OF FEDERAL ASSIST6 ANCE.— 

7 ‘‘(1) IN GENERAL.—A recipient of Federal 

8 funds under this chapter shall, as required by the 

9 Authority, maintain accurate and complete records 

10 of transactions and activities financed with Federal 

11 funds and report on the transactions and activities 

12 to the Authority. 

13 ‘‘(2) AVAILABILITY.—All records required 

14 under paragraph (1) shall be available for audit by 

15 the Comptroller General of the United States, the 

16 Inspector General of the Department of Agriculture, 

17 and the Authority (including authorized representa18 tives of the Comptroller General, the Inspector Gen19 eral of the Department of Agriculture, and the Au20 thority). 

21 ‘‘SEC. 3812. ANNUAL REPORT. 

22 ‘‘Not later than 180 days after the end of each fiscal 

23 year, the Authority shall submit to the President and to 

24 Congress a report describing the activities carried out 

25 under this chapter. 
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1 ‘‘SEC. 3813. AUTHORIZATION OF APPROPRIATIONS. 

2 ‘‘(a) IN GENERAL.—There is authorized to be appro3 priated to the Authority to carry out this chapter 

4 $30,000,000 for each of fiscal years 2012 through 2017, 

5 to remain available until expended. 

6 ‘‘(b) ADMINISTRATIVE EXPENSES.—Not more than 5 

7 percent of the amount appropriated under subsection (a) 

8 for a fiscal year shall be used for administrative expenses 

9 of the Authority. 

10 ‘‘SEC. 3814. TERMINATION OF AUTHORITY. 

11 ‘‘This chapter and the authority provided under this 

12 chapter expire on October 1, 2017. 

13 ‘‘CHAPTER 5—NORTHERN GREAT PLAINS 

14 REGIONAL AUTHORITY 

15 ‘‘SEC. 3821. DEFINITIONS. 

16 ‘‘In this chapter: 

17 ‘‘(1) AUTHORITY.—The term ‘Authority’ means 

18 the Northern Great Plains Regional Authority estab19 lished by section 3822. 

20 ‘‘(2) FEDERAL GRANT PROGRAM.—The term 

21 ‘Federal grant program’ means a Federal grant pro22 gram to provide assistance in— 

23 ‘‘(A) implementing the recommendations of 

24 the Northern Great Plains Rural Development 

25 Commission established by the Northern Great 
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1 Plains Rural Development Act (7 U.S.C. 2661 

2 note; Public Law 103–318); 

3 ‘‘(B) acquiring or developing land; 

4 ‘‘(C) constructing or equipping a highway, 

5 road, bridge, or facility; 

6 ‘‘(D) carrying out other economic develop7 ment activities; or 

8 ‘‘(E) conducting research activities related 

9 to the activities described in subparagraphs (A) 

10 through (D). 

11 ‘‘(3) REGION.—The term ‘region’ means the 

12 States of Iowa, Minnesota, Missouri (other than 

13 counties included in the Delta Regional Authority), 

14 Nebraska, North Dakota, and South Dakota. 

15 ‘‘SEC. 3822. NORTHERN GREAT PLAINS REGIONAL AUTHOR16 ITY. 

17 ‘‘(a) ESTABLISHMENT.— 

18 ‘‘(1) IN GENERAL.—There is established the 

19 Northern Great Plains Regional Authority. 

20 ‘‘(2) COMPOSITION.—The Authority shall be 

21 composed of— 

22 ‘‘(A) a Federal member, to be appointed 

23 by the President, by and with the advice and 

24 consent of the Senate; 
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1 ‘‘(B) the Governor (or a designee of the 

2 Governor) of each State in the region that 

3 elects to participate in the Authority; and 

4 ‘‘(C) a member of an Indian tribe, who 

5 shall be a chairperson of an Indian tribe in the 

6 region or a designee of such a chairperson, to 

7 be appointed by the President, by and with the 

8 advice and consent of the Senate. 

9 ‘‘(3) COCHAIRPERSONS.—The Authority shall 

10 be headed by— 

11 ‘‘(A) the Federal member, who shall serve 

12 as— 

13 ‘‘(i) the Federal cochairperson; and 

14 ‘‘(ii) a liaison between the Federal 

15 Government and the Authority; 

16 ‘‘(B) a State cochairperson, who shall be— 

17 ‘‘(i) a Governor of a participating 

18 State in the region; and 

19 ‘‘(ii) elected by the State members for 

20 a term of not less than 1 year; and 

21 ‘‘(C) the member of an Indian tribe, who 

22 shall serve as— 

23 ‘‘(i) the tribal cochairperson; and 
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1 ‘‘(ii) a liaison between the govern2 ments of Indian tribes in the region and 

3 the Authority. 

4 ‘‘(4) FAILURE TO CONFIRM.— 

5 ‘‘(A) FEDERAL MEMBER.—Notwith6 standing any other provision of this section, if 

7 a Federal member described in paragraph 

8 (2)(A) has not been confirmed by the Senate by 

9 not later than 180 days after the date of enact10 ment of the Agriculture Reform, Food, and 

11 Jobs Act of 2012, the Authority may organize 

12 and operate without the Federal member. 

13 ‘‘(B) TRIBAL COCHAIRPERSON.—In the 

14 case of the tribal cochairperson, if no tribal co15 chairperson is confirmed by the Senate, the re16 gional authority shall consult and coordinate 

17 with the leaders of Indian tribes in the region 

18 concerning the activities of the Authority, as 

19 appropriate. 

20 ‘‘(b) ALTERNATE MEMBERS.— 

21 ‘‘(1) ALTERNATE FEDERAL COCHAIRPERSON.— 

22 The President shall appoint an alternate Federal co23 chairperson. 

24 ‘‘(2) STATE ALTERNATES.— 
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†S 3240 ES

1 ‘‘(A) IN GENERAL.—The State member of 

2 a participating State may have a single alter3 nate, who shall be— 

4 ‘‘(i) a resident of that State; and 

5 ‘‘(ii) appointed by the Governor of the 

6 State. 

7 ‘‘(B) QUORUM.—A State alternate member 

8 shall not be counted toward the establishment 

9 of a quorum of the members of the Authority 

10 in any case in which a quorum of the State 

11 members is required to be present. 

12 ‘‘(3) ALTERNATE TRIBAL COCHAIRPERSON.— 

13 The President shall appoint an alternate tribal co14 chairperson, by and with the advice and consent of 

15 the Senate. 

16 ‘‘(4) DELEGATION OF POWER.—No power or 

17 responsibility of the Authority specified in para18 graphs (2) and (3) of subsection (c), and no voting 

19 right of any member of the Authority, shall be dele20 gated to any person who is not— 

21 ‘‘(A) a member of the Authority; or 

22 ‘‘(B) entitled to vote in Authority meet23 ings. 

24 ‘‘(c) VOTING.— 
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1 ‘‘(1) IN GENERAL.—A decision by the Authority 

2 shall require a majority vote of the Authority (not 

3 including any member representing a State that is 

4 delinquent under subsection (g)(2)(D)) to be effec5 tive. 

6 ‘‘(2) QUORUM.—A quorum of State members 

7 shall be required to be present for the Authority to 

8 make any policy decision, including— 

9 ‘‘(A) a modification or revision of an Au10 thority policy decision; 

11 ‘‘(B) approval of a State or regional devel12 opment plan; and 

13 ‘‘(C) any allocation of funds among the 

14 States. 

15 ‘‘(3) PROJECT AND GRANT PROPOSALS.—The 

16 approval of project and grant proposals shall be— 

17 ‘‘(A) a responsibility of the Authority; and 

18 ‘‘(B) conducted in accordance with section 

19 3830. 

20 ‘‘(4) VOTING BY ALTERNATE MEMBERS.—An 

21 alternate member shall vote in the case of the ab22 sence, death, disability, removal, or resignation of 

23 the Federal, State, or Indian tribe member for 

24 whom the alternate member is an alternate. 

25 ‘‘(d) DUTIES.—The Authority shall— 
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1 ‘‘(1) develop, on a continuing basis, comprehen2 sive and coordinated plans and programs for 

3 multistate cooperation to advance the economic and 

4 social well-being of the region and to approve grants 

5 for the economic development of the region, giving 

6 due consideration to other Federal, State, tribal, and 

7 local planning and development activities in the re8 gion; 

9 ‘‘(2) review, and when appropriate amend, pri10 orities in a development plan for the region (includ11 ing 5-year regional outcome targets); 

12 ‘‘(3) assess the needs and assets of the region 

13 based on available research, demonstrations, inves14 tigations, assessments, and evaluations of the region 

15 prepared by Federal, State, tribal, and local agen16 cies, universities, regional and local development dis17 tricts or organizations, and other nonprofit groups; 

18 ‘‘(4) formulate and recommend to the Gov19 ernors and legislatures of States that participate in 

20 the Authority forms of interstate cooperation for— 

21 ‘‘(A) renewable energy development and 

22 transmission; 

23 ‘‘(B) transportation planning and economic 

24 development; 

25 ‘‘(C) information technology; 
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1 ‘‘(D) movement of freight and individuals 

2 within the region; 

3 ‘‘(E) federally-funded research at institu4 tions of higher education; and 

5 ‘‘(F) conservation land management; 

6 ‘‘(5) work with State, tribal, and local agencies 

7 in developing appropriate model legislation; 

8 ‘‘(6) enhance the capacity of, and provide sup9 port for, multistate development and research orga10 nizations, local development organizations and dis11 tricts, and resource conservation districts in the re12 gion; 

13 ‘‘(7) encourage private investment in industrial, 

14 commercial, renewable energy, and other economic 

15 development projects in the region; and 

16 ‘‘(8) cooperate with and assist State govern17 ments with economic development programs of par18 ticipating States. 

19 ‘‘(e) ADMINISTRATION.—In carrying out subsection 

20 (d), the Authority may— 

21 ‘‘(1) hold such hearings, sit and act at such 

22 times and places, take such testimony, receive such 

23 evidence, and print or otherwise reproduce and dis24 tribute a description of the proceedings and reports 
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1 on actions by the Authority as the Authority con2 siders appropriate; 

3 ‘‘(2) authorize, through the Federal, State, or 

4 tribal cochairperson or any other member of the Au5 thority designated by the Authority, the administra6 tion of oaths if the Authority determines that testi7 mony should be taken or evidence received under 

8 oath; 

9 ‘‘(3) request from any Federal, State, tribal, or 

10 local agency such information as may be available to 

11 or procurable by the agency that may be of use to 

12 the Authority in carrying out the duties of the Au13 thority; 

14 ‘‘(4) adopt, amend, and repeal bylaws and rules 

15 governing the conduct of business and the perform16 ance of duties of the Authority; 

17 ‘‘(5) request the head of any Federal agency to 

18 detail to the Authority such personnel as the Au19 thority requires to carry out duties of the Authority, 

20 each such detail to be without loss of seniority, pay, 

21 or other employee status; 

22 ‘‘(6) request the head of any State agency, trib23 al government, or local government to detail to the 

24 Authority such personnel as the Authority requires 

25 to carry out duties of the Authority, each such detail 
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1 to be without loss of seniority, pay, or other em2 ployee status; 

3 ‘‘(7) provide for coverage of Authority employ4 ees in a suitable retirement and employee benefit 

5 system by— 

6 ‘‘(A) making arrangements or entering 

7 into contracts with any participating State gov8 ernment or tribal government; or 

9 ‘‘(B) otherwise providing retirement and 

10 other employee benefit coverage; 

11 ‘‘(8) accept, use, and dispose of gifts or dona12 tions of services or real, personal, tangible, or intan13 gible property; 

14 ‘‘(9) enter into and perform such contracts, 

15 leases, cooperative agreements, or other transactions 

16 as are necessary to carry out Authority duties, in17 cluding any contracts, leases, or cooperative agree18 ments with— 

19 ‘‘(A) any department, agency, or instru20 mentality of the United States; 

21 ‘‘(B) any State (including a political sub22 division, agency, or instrumentality of the 

23 State); 

24 ‘‘(C) any Indian tribe in the region; or 
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1 ‘‘(D) any person, firm, association, or cor2 poration; and 

3 ‘‘(10) establish and maintain a central office 

4 and field offices at such locations as the Authority 

5 may select. 

6 ‘‘(f) FEDERAL AGENCY COOPERATION.—A Federal 

7 agency shall— 

8 ‘‘(1) cooperate with the Authority; and 

9 ‘‘(2) provide, on request of a cochairperson, ap10 propriate assistance in carrying out this chapter, in 

11 accordance with applicable Federal laws (including 

12 regulations). 

13 ‘‘(g) ADMINISTRATIVE EXPENSES.— 

14 ‘‘(1) FEDERAL SHARE.—The Federal share of 

15 the administrative expenses of the Authority shall 

16 be— 

17 ‘‘(A) for each of fiscal years 2012 and 

18 2013, 100 percent; 

19 ‘‘(B) for fiscal year 2014, 75 percent; and 

20 ‘‘(C) for fiscal year 2015 and each fiscal 

21 year thereafter, 50 percent. 

22 ‘‘(2) NON-FEDERAL SHARE.— 

23 ‘‘(A) IN GENERAL.—The non-Federal 

24 share of the administrative expenses of the Au-
724 

†S 3240 ES

1 thority shall be paid by non-Federal sources in 

2 the States that participate in the Authority. 

3 ‘‘(B) SHARE PAID BY EACH STATE.—The 

4 share of administrative expenses of the Author5 ity to be paid by non-Federal sources in each 

6 State shall be determined by the Authority. 

7 ‘‘(C) NO FEDERAL PARTICIPATION.—The 

8 Federal cochairperson shall not participate or 

9 vote in any decision under subparagraph (B). 

10 ‘‘(D) DELINQUENT STATES.—If a State is 

11 delinquent in payment of the State’s share of 

12 administrative expenses of the Authority under 

13 this subsection— 

14 ‘‘(i) no assistance under this chapter 

15 shall be provided to the State (including 

16 assistance to a political subdivision or a 

17 resident of the State); and 

18 ‘‘(ii) no member of the Authority from 

19 the State shall participate or vote in any 

20 action by the Authority. 

21 ‘‘(h) COMPENSATION.— 

22 ‘‘(1) FEDERAL AND TRIBAL COCHAIR23 PERSONS.—The Federal cochairperson and the tribal 

24 cochairperson shall be compensated by the Federal 

25 Government at the annual rate of basic pay pre-
725 

†S 3240 ES

1 scribed for level III of the Executive Schedule in 

2 subchapter II of chapter 53 of title 5, United States 

3 Code. 

4 ‘‘(2) ALTERNATE FEDERAL AND TRIBAL CO5 CHAIRPERSONS.—The alternate Federal cochair6 person and the alternate tribal cochairperson— 

7 ‘‘(A) shall be compensated by the Federal 

8 Government at the annual rate of basic pay 

9 prescribed for level V of the Executive Schedule 

10 described in paragraph (1); and 

11 ‘‘(B) when not actively serving as an alter12 nate, shall perform such functions and duties as 

13 are delegated by the Federal cochairperson or 

14 the tribal cochairperson, respectively. 

15 ‘‘(3) STATE MEMBERS AND ALTERNATES.— 

16 ‘‘(A) IN GENERAL.—A State shall com17 pensate each member and alternate rep18 resenting the State on the Authority at the rate 

19 established by State law. 

20 ‘‘(B) NO ADDITIONAL COMPENSATION.— 

21 No State member or alternate member shall re22 ceive any salary, or any contribution to or sup23 plementation of salary from any source other 

24 than the State for services provided by the 

25 member or alternate member to the Authority. 
726 

†S 3240 ES

1 ‘‘(4) DETAILED EMPLOYEES.— 

2 ‘‘(A) IN GENERAL.—No person detailed to 

3 serve the Authority under subsection (e)(6) 

4 shall receive any salary or any contribution to 

5 or supplementation of salary for services pro6 vided to the Authority from— 

7 ‘‘(i) any source other than the State, 

8 tribal, local, or intergovernmental agency 

9 from which the person was detailed; or 

10 ‘‘(ii) the Authority. 

11 ‘‘(B) VIOLATION.—Any person that vio12 lates this paragraph shall be fined not more 

13 than $5,000, imprisoned not more than 1 year, 

14 or both. 

15 ‘‘(C) APPLICABLE LAW.—The Federal co16 chairperson, the alternate Federal cochair17 person, and any Federal officer or employee de18 tailed to duty on the Authority under sub19 section (e)(5) shall not be subject to subpara20 graph (A), but shall remain subject to sections 

21 202 through 209 of title 18, United States 

22 Code. 

23 ‘‘(5) ADDITIONAL PERSONNEL.— 

24 ‘‘(A) COMPENSATION.— 
727 

†S 3240 ES

1 ‘‘(i) IN GENERAL.—The Authority 

2 may appoint and fix the compensation of 

3 an executive director and such other per4 sonnel as are necessary to enable the Au5 thority to carry out the duties of the Au6 thority. 

7 ‘‘(ii) EXCEPTION.—Compensation 

8 under clause (i) shall not exceed the max9 imum rate for the Senior Executive Service 

10 under section 5382 of title 5, United 

11 States Code, including any applicable local12 ity-based comparability payment that may 

13 be authorized under section 5304(h)(2)(C) 

14 of that title. 

15 ‘‘(B) EXECUTIVE DIRECTOR.—The execu16 tive director shall be responsible for— 

17 ‘‘(i) the carrying out of the adminis18 trative duties of the Authority; 

19 ‘‘(ii) direction of the Authority staff; 

20 and 

21 ‘‘(iii) such other duties as the Author22 ity may assign. 

23 ‘‘(C) NO FEDERAL EMPLOYEE STATUS.— 

24 No member, alternate, officer, or employee of 

25 the Authority (except the Federal cochairperson 
728 

†S 3240 ES

1 of the Authority, the alternate and staff for the 

2 Federal cochairperson, and any Federal em3 ployee detailed to the Authority under sub4 section (e)(5)) shall be considered to be a Fed5 eral employee for any purpose. 

6 ‘‘(i) CONFLICTS OF INTEREST.— 

7 ‘‘(1) IN GENERAL.—Except as provided under 

8 paragraph (2), no State member, Indian tribe mem9 ber, State alternate, officer, or employee of the Au10 thority shall participate personally and substantially 

11 as a member, alternate, officer, or employee of the 

12 Authority, through decision, approval, disapproval, 

13 recommendation, the rendering of advice, investiga14 tion, or otherwise, in any proceeding, application, re15 quest for a ruling or other determination, contract, 

16 claim, controversy, or other matter in which, to 

17 knowledge of the member, alternate, officer, or em18 ployee, there is a financial interest of— 

19 ‘‘(A) the member, alternate, officer, or em20 ployee; 

21 ‘‘(B) the spouse, minor child, partner, or 

22 organization (other than a State or political 

23 subdivision of the State or the Indian tribe) of 

24 the member, alternate, officer, or employee, in 

25 which the member, alternate, officer, or em-
729 

†S 3240 ES

1 ployee is serving as officer, director, trustee, 

2 partner, or employee; or 

3 ‘‘(C) any person or organization with 

4 whom the member, alternate, officer, or em5 ployee is negotiating or has any arrangement 

6 concerning prospective employment. 

7 ‘‘(2) DISCLOSURE.—Paragraph (1) shall not 

8 apply if the State member, Indian tribe member, al9 ternate, officer, or employee— 

10 ‘‘(A) immediately advises the Authority of 

11 the nature and circumstances of the proceeding, 

12 application, request for a ruling or other deter13 mination, contract, claim, controversy, or other 

14 particular matter presenting a potential conflict 

15 of interest; 

16 ‘‘(B) makes full disclosure of the financial 

17 interest; and 

18 ‘‘(C) before the proceeding concerning the 

19 matter presenting the conflict of interest, re20 ceives a written determination by the Authority 

21 that the interest is not so substantial as to be 

22 likely to affect the integrity of the services that 

23 the Authority may expect from the State mem24 ber, Indian tribe member, alternate, officer, or 

25 employee. 
730 

†S 3240 ES

1 ‘‘(3) VIOLATION.—Any person that violates this 

2 subsection shall be fined not more than $10,000, im3 prisoned not more than 2 years, or both. 

4 ‘‘(j) VALIDITY OF CONTRACTS, LOANS, AND

5 GRANTS.—The Authority may declare void any contract, 

6 loan, or grant of or by the Authority in relation to which 

7 the Authority determines that there has been a violation 

8 of any provision under subsection (h)(4) or subsection (i) 

9 of this chapter, or sections 202 through 209 of title 18, 

10 United States Code. 

11 ‘‘SEC. 3823. INTERSTATE COOPERATION FOR ECONOMIC 

12 OPPORTUNITY AND EFFICIENCY. 

13 ‘‘(a) IN GENERAL.—The Authority shall provide as14 sistance to States in developing regional plans to address 

15 multistate economic issues, including plans— 

16 ‘‘(1) to develop a regional transmission system 

17 for movement of renewable energy to markets out18 side the region; 

19 ‘‘(2) to address regional transportation con20 cerns, including the establishment of a Northern 

21 Great Plains Regional Transportation Working 

22 Group; 

23 ‘‘(3) to encourage and support interstate col24 laboration on federally-funded research that is in the 

25 national interest; and 
731 

†S 3240 ES

1 ‘‘(4) to establish a Regional Working Group on 

2 Agriculture Development and Transportation. 

3 ‘‘(b) ECONOMIC ISSUES.—The multistate economic 

4 issues referred to in subsection (a) shall include— 

5 ‘‘(1) renewable energy development and trans6 mission; 

7 ‘‘(2) transportation planning and economic de8 velopment; 

9 ‘‘(3) information technology; 

10 ‘‘(4) movement of freight and individuals within 

11 the region; 

12 ‘‘(5) federally-funded research at institutions of 

13 higher education; and 

14 ‘‘(6) conservation land management. 

15 ‘‘SEC. 3824. ECONOMIC AND COMMUNITY DEVELOPMENT 

16 GRANTS. 

17 ‘‘(a) IN GENERAL.—The Authority may approve 

18 grants to States, Indian tribes, local governments, and 

19 public and nonprofit organizations for projects, approved 

20 in accordance with section 3830— 

21 ‘‘(1) to assist the region in obtaining the job 

22 training, employment-related education, and busi23 ness development (with an emphasis on entrepre24 neurship) that are needed to build and maintain 

25 strong local economies; 
732 

†S 3240 ES

1 ‘‘(2) to develop the transportation, renewable 

2 energy transmission, and telecommunication infra3 structure of the region for the purpose of facilitating 

4 economic development in the region (except that 

5 grants for this purpose may be made only to States, 

6 Indian tribes, local governments, and nonprofit orga7 nizations); 

8 ‘‘(3) to provide assistance to severely distressed 

9 and underdeveloped areas that lack financial re10 sources for improving basic public services; 

11 ‘‘(4) to provide assistance to severely distressed 

12 and underdeveloped areas that lack financial re13 sources for equipping industrial parks and related 

14 facilities; and 

15 ‘‘(5) to otherwise achieve the purposes of this 

16 chapter. 

17 ‘‘(b) FUNDING.— 

18 ‘‘(1) IN GENERAL.—Funds for grants under 

19 subsection (a) may be provided— 

20 ‘‘(A) entirely from appropriations to carry 

21 out this section; 

22 ‘‘(B) in combination with funds available 

23 under another Federal grant program; or 

24 ‘‘(C) from any other source. 
733 

†S 3240 ES

1 ‘‘(2) PRIORITY OF FUNDING.—To best build the 

2 foundations for long-term economic development and 

3 to complement other Federal, State, and tribal re4 sources in the region, Federal funds available under 

5 this chapter shall be focused on the following activi6 ties: 

7 ‘‘(A) Basic public infrastructure in dis8 tressed counties and isolated areas of distress. 

9 ‘‘(B) Transportation and telecommuni10 cation infrastructure for the purpose of facili11 tating economic development in the region. 

12 ‘‘(C) Business development, with emphasis 

13 on entrepreneurship. 

14 ‘‘(D) Job training or employment-related 

15 education, with emphasis on use of existing 

16 public educational institutions located in the re17 gion. 

18 ‘‘SEC. 3825. SUPPLEMENTS TO FEDERAL GRANT PRO19 GRAMS. 

20 ‘‘(a) FINDING.—Congress finds that certain States 

21 and local communities of the region may be unable to take 

22 maximum advantage of Federal grant programs for which 

23 the States and communities are eligible because— 
734 

†S 3240 ES

1 ‘‘(1) the States and communities lack the eco2 nomic resources to provide the required matching 

3 share; or 

4 ‘‘(2) there are insufficient funds available under 

5 the applicable Federal law authorizing the Federal 

6 grant program to meet pressing needs of the region. 

7 ‘‘(b) FEDERAL GRANT PROGRAM FUNDING.—Not8 withstanding any provision of law limiting the Federal 

9 share, the areas eligible for assistance, or the authoriza10 tions of appropriations, under any Federal grant program, 

11 and in accordance with subsection (c), the Authority, with 

12 the approval of the Federal cochairperson and with respect 

13 to a project to be carried out in the region— 

14 ‘‘(1) may increase the Federal share of the 

15 costs of a project under any Federal grant program 

16 to not more than 90 percent (except as provided in 

17 section 3827(b)); and 

18 ‘‘(2) shall use amounts made available to carry 

19 out this chapter to pay the increased Federal share. 

20 ‘‘(c) CERTIFICATIONS.— 

21 ‘‘(1) IN GENERAL.—In the case of any project 

22 for which all or any portion of the basic Federal 

23 share of the costs of the project is proposed to be 

24 paid under this section, no Federal contribution 

25 shall be made until the Federal official admin-
735 

†S 3240 ES

1 istering the Federal law that authorizes the Federal 

2 grant program certifies that the project— 

3 ‘‘(A) meets (except as provided in sub4 section (b)) the applicable requirements of the 

5 applicable Federal grant program; and 

6 ‘‘(B) could be approved for Federal con7 tribution under the Federal grant program if 

8 funds were available under the law for the 

9 project. 

10 ‘‘(2) CERTIFICATION BY AUTHORITY.— 

11 ‘‘(A) IN GENERAL.—The certifications and 

12 determinations required to be made by the Au13 thority for approval of projects under this Act 

14 in accordance with section 3830 shall be— 

15 ‘‘(i) controlling; and 

16 ‘‘(ii) accepted by the Federal agencies. 

17 ‘‘(B) ACCEPTANCE BY FEDERAL COCHAIR18 PERSON.—In the case of any project described 

19 in paragraph (1), any finding, report, certifi20 cation, or documentation required to be sub21 mitted with respect to the project to the head 

22 of the department, agency, or instrumentality of 

23 the Federal Government responsible for the ad24 ministration of the Federal grant program 
736 

†S 3240 ES

1 under which the project is carried out shall be 

2 accepted by the Federal cochairperson. 

3 ‘‘SEC. 3826. MULTISTATE AND LOCAL DEVELOPMENT DIS4 TRICTS AND ORGANIZATIONS AND NORTH5 ERN GREAT PLAINS INC. 

6 ‘‘(a) DEFINITION OF MULTISTATE AND LOCAL DE7 VELOPMENT DISTRICT OR ORGANIZATION.—In this sec8 tion, the term ‘multistate and local development district 

9 or organization’ means an entity— 

10 ‘‘(1) that— 

11 ‘‘(A) is a planning district that is recog12 nized by the Economic Development Adminis13 tration of the Department of Commerce; or 

14 ‘‘(B) is— 

15 ‘‘(i) organized and operated in a man16 ner that ensures broad-based community 

17 participation and an effective opportunity 

18 for other nonprofit groups to contribute to 

19 the development and implementation of 

20 programs in the region; 

21 ‘‘(ii) a nonprofit incorporated body or22 ganized or chartered under the law of the 

23 State in which the entity is located; 

24 ‘‘(iii) a nonprofit agency or instru25 mentality of a State or local government; 
737 

†S 3240 ES

1 ‘‘(iv) a public organization established 

2 before the date of enactment of the Agri3 culture Reform, Food, and Jobs Act of 

4 2012 under State law for creation of multi5 jurisdictional, area-wide planning organiza6 tions; 

7 ‘‘(v) a nonprofit agency or instrumen8 tality of a State that was established for 

9 the purpose of assisting with multistate co10 operation; or 

11 ‘‘(vi) a nonprofit association or com12 bination of bodies, agencies, and instru13 mentalities described in clauses (ii) 

14 through (v); and 

15 ‘‘(2) that has not, as certified by the Authority 

16 (in consultation with the Federal cochairperson or 

17 Secretary, as appropriate)— 

18 ‘‘(A) inappropriately used Federal grant 

19 funds from any Federal source; or 

20 ‘‘(B) appointed an officer who, during the 

21 period in which another entity inappropriately 

22 used Federal grant funds from any Federal 

23 source, was an officer of the other entity. 

24 ‘‘(b) GRANTS TO MULTISTATE, LOCAL, OR REGIONAL

25 DEVELOPMENT DISTRICTS AND ORGANIZATIONS.— 
738 

†S 3240 ES

1 ‘‘(1) IN GENERAL.—The Authority may make 

2 grants for administrative expenses under this section 

3 to multistate, local, and regional development dis4 tricts and organizations. 

5 ‘‘(2) CONDITIONS FOR GRANTS.— 

6 ‘‘(A) MAXIMUM AMOUNT.—The amount of 

7 any grant awarded under paragraph (1) shall 

8 not exceed 80 percent of the administrative ex9 penses of the multistate, local, or regional de10 velopment district or organization receiving the 

11 grant. 

12 ‘‘(B) MAXIMUM PERIOD.—No grant de13 scribed in paragraph (1) shall be awarded for a 

14 period of greater than 3 years. 

15 ‘‘(3) LOCAL SHARE.—The contributions of a 

16 multistate, local, or regional development district or 

17 organization for administrative expenses may be in 

18 cash or in kind, fairly evaluated, including space, 

19 equipment, and services. 

20 ‘‘(c) DUTIES.— 

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), a local development district shall operate 

23 as a lead organization serving multicounty areas in 

24 the region at the local level. 
739 

†S 3240 ES

1 ‘‘(2) DESIGNATION.—The Federal cochair2 person may designate an Indian tribe or multijuris3 dictional organization to serve as a lead organization 

4 in such cases as the Federal cochairperson or Sec5 retary, as appropriate, determines appropriate. 

6 ‘‘(d) NORTHERN GREAT PLAINS INC.—Northern 

7 Great Plains Inc., a nonprofit corporation incorporated in 

8 the State of Minnesota to implement the recommendations 

9 of the Northern Great Plains Rural Development Commis10 sion established by the Northern Great Plains Rural De11 velopment Act (7 U.S.C. 2661 note; Public Law 103– 

12 318)— 

13 ‘‘(1) shall serve as an independent, primary re14 source for the Authority on issues of concern to the 

15 region; 

16 ‘‘(2) shall advise the Authority on development 

17 of international trade; 

18 ‘‘(3) may provide research, education, training, 

19 and other support to the Authority; and 

20 ‘‘(4) may carry out other activities on its own 

21 behalf or on behalf of other entities. 
740 

†S 3240 ES

1 ‘‘SEC. 3827. DISTRESSED COUNTIES AND AREAS AND NON2 DISTRESSED COUNTIES. 

3 ‘‘(a) DESIGNATIONS.—Each year, the Authority, in 

4 accordance with such criteria as the Authority may estab5 lish, shall designate— 

6 ‘‘(1) as distressed counties, counties in the re7 gion that are the most severely and persistently dis8 tressed and underdeveloped and have high rates of 

9 poverty, unemployment, or outmigration; 

10 ‘‘(2) as nondistressed counties, counties in the 

11 region that are not designated as distressed counties 

12 under paragraph (1); and 

13 ‘‘(3) as isolated areas of distress, areas located 

14 in nondistressed counties (as designated under para15 graph (2)) that have high rates of poverty, unem16 ployment, or outmigration. 

17 ‘‘(b) DISTRESSED COUNTIES.— 

18 ‘‘(1) IN GENERAL.—The Authority shall allo19 cate at least 50 percent of the appropriations made 

20 available under section 3834 for programs and 

21 projects designed to serve the needs of distressed 

22 counties and isolated areas of distress in the region. 

23 ‘‘(2) FUNDING LIMITATIONS.—The funding lim24 itations under section 3825(b) shall not apply to a 

25 project to provide transportation or telecommuni26 cation or basic public services to residents of 1 or 
741 

†S 3240 ES

1 more distressed counties or isolated areas of distress 

2 in the region. 

3 ‘‘(c) TRANSPORTATION, TELECOMMUNICATION, RE4 NEWABLE ENERGY, AND BASIC PUBLIC INFRASTRUC5 TURE.—The Authority shall allocate at least 50 percent 

6 of any funds made available under section 3834 for trans7 portation, telecommunication, renewable energy, and basic 

8 public infrastructure projects authorized under para9 graphs (1) and (3) of section 3824(a). 

10 ‘‘SEC. 3828. DEVELOPMENT PLANNING PROCESS. 

11 ‘‘(a) STATE DEVELOPMENT PLAN.—In accordance 

12 with policies established by the Authority, each State 

13 member shall submit a development plan for the area of 

14 the region represented by the State member. 

15 ‘‘(b) CONTENT OF PLAN.—A State development plan 

16 submitted under subsection (a) shall reflect the goals, ob17 jectives, and priorities identified in the regional develop18 ment plan developed under section 3823(d)(2). 

19 ‘‘(c) CONSULTATION WITH INTERESTED LOCAL PAR20 TIES.—In carrying out the development planning process 

21 (including the selection of programs and projects for as22 sistance), a State may— 

23 ‘‘(1) consult with— 

24 ‘‘(A) multistate, regional, and local devel25 opment districts and organizations; and 
742 

†S 3240 ES

1 ‘‘(B) local units of government; and 

2 ‘‘(2) take into consideration the goals, objec3 tives, priorities, and recommendations of the entities 

4 described in paragraph (1). 

5 ‘‘(d) PUBLIC PARTICIPATION.— 

6 ‘‘(1) IN GENERAL.—The Authority and applica7 ble multistate, regional, and local development dis8 tricts and organizations shall encourage and assist, 

9 to the maximum extent practicable, public participa10 tion in the development, revision, and implementa11 tion of all plans and programs under this chapter. 

12 ‘‘(2) REGULATIONS.—The Authority shall de13 velop guidelines for providing public participation 

14 described in paragraph (1), including public hear15 ings. 

16 ‘‘SEC. 3829. PROGRAM DEVELOPMENT CRITERIA. 

17 ‘‘(a) IN GENERAL.—In considering programs and 

18 projects to be provided assistance under this chapter, and 

19 in establishing a priority ranking of the requests for as20 sistance provided to the Authority, the Authority shall fol21 low procedures that ensure, to the maximum extent prac22 ticable, consideration of— 

23 ‘‘(1) the relationship of the project or class of 

24 projects to overall multistate or regional develop25 ment; 
743 

†S 3240 ES

1 ‘‘(2) the per capita income and poverty and un2 employment and outmigration rates in an area; 

3 ‘‘(3) the financial resources available to the ap4 plicants for assistance seeking to carry out the 

5 project, with emphasis on ensuring that projects are 

6 adequately financed to maximize the probability of 

7 successful economic development; 

8 ‘‘(4) the importance of the project or class of 

9 projects in relation to other projects or classes of 

10 projects that may be in competition for the same 

11 funds; 

12 ‘‘(5) the prospects that the project for which as13 sistance is sought will improve, on a continuing rath14 er than a temporary basis, the opportunities for em15 ployment, the average level of income, or the eco16 nomic development of the area to be served by the 

17 project; and 

18 ‘‘(6) the extent to which the project design pro19 vides for detailed outcome measurements by which 

20 grant expenditures and the results of the expendi21 tures may be evaluated. 

22 ‘‘(b) NO RELOCATION ASSISTANCE.— 

23 ‘‘(1) IN GENERAL.—Except as provided in para24 graph (2), no financial assistance authorized by this 
744 

†S 3240 ES

1 chapter shall be used to assist a person or entity in 

2 relocating from 1 area to another. 

3 ‘‘(2) OUTSIDE BUSINESSES.—Financial assist4 ance under this chapter may be used as otherwise 

5 authorized by this title to attract businesses from 

6 outside the region to the region. 

7 ‘‘(c) MAINTENANCE OF EFFORT.—Funds may be 

8 provided for a program or project in a State under this 

9 chapter only if the Authority determines that the level of 

10 Federal or State financial assistance provided under a law 

11 other than this chapter, for the same type of program or 

12 project in the same area of the State within the region, 

13 will not be reduced as a result of funds made available 

14 by this chapter. 

15 ‘‘SEC. 3830. APPROVAL OF DEVELOPMENT PLANS AND 

16 PROJECTS. 

17 ‘‘(a) IN GENERAL.—A State or regional development 

18 plan or any multistate subregional plan that is proposed 

19 for development under this chapter shall be reviewed by 

20 the Authority. 

21 ‘‘(b) EVALUATION BY STATE MEMBER.—An applica22 tion for a grant or any other assistance for a project under 

23 this chapter shall be made through and evaluated for ap24 proval by the State member of the Authority representing 

25 the applicant. 
745 

†S 3240 ES

1 ‘‘(c) CERTIFICATION.—An application for a grant or 

2 other assistance for a project shall be approved only on 

3 certification by the State member that the application for 

4 the project— 

5 ‘‘(1) describes ways in which the project com6 plies with any applicable State development plan; 

7 ‘‘(2) meets applicable criteria under section 

8 3829; 

9 ‘‘(3) provides adequate assurance that the pro10 posed project will be properly administered, oper11 ated, and maintained; and 

12 ‘‘(4) otherwise meets the requirements of this 

13 chapter. 

14 ‘‘(d) VOTES FOR DECISIONS.—On certification by a 

15 State member of the Authority of an application for a 

16 grant or other assistance for a specific project under this 

17 section, an affirmative vote of the Authority under section 

18 3822(c) shall be required for approval of the application. 

19 ‘‘SEC. 3831. CONSENT OF STATES. 

20 ‘‘Nothing in this chapter requires any State to engage 

21 in or accept any program under this chapter without the 

22 consent of the State. 

23 ‘‘SEC. 3832. RECORDS. 

24 ‘‘(a) RECORDS OF THE AUTHORITY.— 
746 

†S 3240 ES

1 ‘‘(1) IN GENERAL.—The Authority shall main2 tain accurate and complete records of all trans3 actions and activities of the Authority. 

4 ‘‘(2) AVAILABILITY.—All records of the Author5 ity shall be available for audit and examination by 

6 the Comptroller General of the United States and 

7 the Inspector General of the Department of Agri8 culture (including authorized representatives of the 

9 Comptroller General and the Inspector General of 

10 the Department of Agriculture). 

11 ‘‘(b) RECORDS OF RECIPIENTS OF FEDERAL ASSIST12 ANCE.— 

13 ‘‘(1) IN GENERAL.—A recipient of Federal 

14 funds under this chapter shall, as required by the 

15 Authority, maintain accurate and complete records 

16 of transactions and activities financed with Federal 

17 funds and report to the Authority on the trans18 actions and activities to the Authority. 

19 ‘‘(2) AVAILABILITY.—All records required 

20 under paragraph (1) shall be available for audit by 

21 the Comptroller General of the United States, the 

22 Inspector General of the Department of Agriculture, 

23 and the Authority (including authorized representa24 tives of the Comptroller General, the Inspector Gen-
747 

†S 3240 ES

1 eral of the Department of Agriculture, and the Au2 thority). 

3 ‘‘(c) ANNUAL AUDIT.—The Inspector General of the 

4 Department of Agriculture shall audit the activities, trans5 actions, and records of the Authority on an annual basis. 

6 ‘‘SEC. 3833. ANNUAL REPORT. 

7 ‘‘Not later than 180 days after the end of each fiscal 

8 year, the Authority shall submit to the President and to 

9 Congress a report describing the activities carried out 

10 under this chapter. 

11 ‘‘SEC. 3834. AUTHORIZATION OF APPROPRIATIONS. 

12 ‘‘(a) IN GENERAL.—There is authorized to be appro13 priated to the Authority to carry out this chapter 

14 $30,000,000 for each of fiscal years 2012 through 2017, 

15 to remain available until expended. 

16 ‘‘(b) ADMINISTRATIVE EXPENSES.—Not more than 5 

17 percent of the amount appropriated under subsection (a) 

18 for a fiscal year shall be used for administrative expenses 

19 of the Authority. 

20 ‘‘(c) MINIMUM STATE SHARE OF GRANTS.—Notwith21 standing any other provision of this chapter, for any fiscal 

22 year, the aggregate amount of grants received by a State 

23 and all persons or entities in the State under this chapter 

shall be not less than 1 24 ⁄3 of the product obtained by multi25 plying— 
748 

†S 3240 ES

1 ‘‘(1) the aggregate amount of grants under this 

2 chapter for the fiscal year; and 

3 ‘‘(2) the ratio that— 

4 ‘‘(A) the population of the State (as deter5 mined by the Secretary of Commerce based on 

6 the most recent decennial census for which data 

7 are available); bears to 

8 ‘‘(B) the population of the region (as so 

9 determined). 

10 ‘‘SEC. 3835. TERMINATION OF AUTHORITY. 

11 ‘‘The authority provided by this chapter terminates 

12 effective October 1, 2017. 

13 ‘‘Subtitle C—General Provisions 

14 ‘‘SEC. 3901. FULL FAITH AND CREDIT. 

15 ‘‘(a) IN GENERAL.—A contract of insurance or guar16 antee executed by the Secretary under this title shall be 

17 an obligation supported by the full faith and credit of the 

18 United States. 

19 ‘‘(b) CONTESTABILITY.—A contract of insurance or 

20 guarantee executed by the Secretary under this title shall 

21 be incontestable except for fraud or misrepresentation that 

22 the lender or any holder— 

23 ‘‘(1) has actual knowledge of at the time the 

24 contract of insurance or guarantee is executed; or 

25 ‘‘(2) participates in or condones. 
749 

†S 3240 ES

1 ‘‘SEC. 3902. PURCHASE AND SALE OF GUARANTEED POR2 TIONS OF LOANS. 

3 ‘‘(a) IN GENERAL.—Subject to subsections (b) and 

4 (c), the Secretary may purchase, on such terms and condi5 tions as the Secretary considers appropriate, the guaran6 teed portion of a loan guaranteed under this title, if the 

7 Secretary determines that an adequate secondary market 

8 is not available in the private sector. 

9 ‘‘(b) MAXIMUM PAYMENT.—The Secretary may not 

10 pay for any guaranteed portion of a loan under subsection 

11 (a) in excess of an amount equal to the unpaid principal 

12 balance and accrued interest on the guaranteed portion 

13 of the loan. 

14 ‘‘(c) SOURCES OF FUNDING.—The Secretary may use 

15 for the purchases— 

16 ‘‘(1) funds from the Rural Development Insur17 ance Fund with respect to rural development loans 

18 (as defined in section 3704(a)); and 

19 ‘‘(2) funds from the Agricultural Credit Insur20 ance Fund with respect to all other loans under this 

21 title. 

22 ‘‘(d) SALE OF GUARANTEED LOANS.— 

23 ‘‘(1) SALES.— 

24 ‘‘(A) REGULATION.— 

25 ‘‘(i) IN GENERAL.—The guaranteed 

26 portion of any loan made under this title 
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1 may be sold by the lender, and by any sub2 sequent holder, in accordance with such 

3 regulations governing the sales as the Sec4 retary shall establish, subject to clauses (ii) 

5 and (iii). 

6 ‘‘(ii) FEES TO BE PAID IN FULL.—All 

7 fees due the Secretary with respect to a 

8 guaranteed loan shall be paid in full before 

9 any sale. 

10 ‘‘(iii) LOAN TO BE FULLY DIS11 BURSED.—The loan shall be fully dis12 bursed to the borrower before the sale. 

13 ‘‘(B) POST-SALE.—After a loan is sold in 

14 the secondary market, the lender shall— 

15 ‘‘(i) remain obligated under the guar16 antee agreement of the lender with the 

17 Secretary; and 

18 ‘‘(ii) continue to service the loan in 

19 accordance with the terms and conditions 

20 of that agreement. 

21 ‘‘(C) PROCEDURES.—The Secretary shall 

22 develop such procedures as are necessary for— 

23 ‘‘(i) the facilitation, administration, 

24 and promotion of secondary market oper25 ations; and 
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1 ‘‘(ii) determining the increase of ac2 cess of farmers to capital at reasonable 

3 rates and terms as a result of secondary 

4 market operations. 

5 ‘‘(D) RIGHTS TO PREPAY.—This sub6 section does not impede or extinguish— 

7 ‘‘(i) the right of the borrower or the 

8 successor in interest to the borrower to 

9 prepay (in whole or in part) any loan made 

10 under this title; or 

11 ‘‘(ii) the rights of any party under any 

12 provision of this title. 

13 ‘‘(2) ISSUE POOL CERTIFICATES.— 

14 ‘‘(A) IN GENERAL.—The Secretary may, 

15 directly or through a market maker approved 

16 by the Secretary, issue pool certificates rep17 resenting ownership of part or all of the guar18 anteed portion of any loan guaranteed by the 

19 Secretary under this title. 

20 ‘‘(B) APPROVAL.—Certificates under sub21 paragraph (A) shall be based on and backed by 

22 a pool established or approved by the Secretary 

23 and composed solely of the entire guaranteed 

24 portion of the loans. 
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1 ‘‘(C) GUARANTEE OF POOL.—On such 

2 terms and conditions as the Secretary considers 

3 appropriate, the Secretary may guarantee the 

4 timely payment of the principal and interest on 

5 pool certificates issued on behalf of the Sec6 retary by approved market makers for purposes 

7 of this subsection. 

8 ‘‘(D) LIMITATIONS.—A guarantee under 

9 subparagraph (C) shall be limited to the extent 

10 of principal and interest on the guaranteed por11 tions of loans that compose the pool. 

12 ‘‘(E) PREPAYMENT.—If a loan in a pool is 

13 prepaid, either voluntarily or by reason of de14 fault, the guarantee of timely payment of prin15 cipal and interest on the pool certificates shall 

16 be reduced in proportion to the amount of prin17 cipal and interest that the prepaid loan rep18 resents in the pool. 

19 ‘‘(F) INTEREST ACCRUAL.—Interest on 

20 prepaid or defaulted loans shall accrue and be 

21 guaranteed by the Secretary only through the 

22 date of payment on the guarantee. 

23 ‘‘(G) REDEMPTION.—During the term of 

24 the pool certificate, the certificate may be called 
753 

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1 for redemption due to prepayment or default of 

2 all loans constituting the pool. 

3 ‘‘(H) FULL FAITH AND CREDIT.—The full 

4 faith and credit of the United States is pledged 

5 to the payment of all amounts that may be re6 quired to be paid under any guarantee of the 

7 pool certificates issued by approved market 

8 makers under this subsection. 

9 ‘‘(I) FEES.— 

10 ‘‘(i) IN GENERAL.—The Secretary 

11 shall not collect any fee for any guarantee 

12 under this subsection. 

13 ‘‘(ii) SECRETARIAL FUNCTIONS.— 

14 Clause (i) does not preclude the Secretary 

15 from collecting a fee for the functions de16 scribed in paragraph (3). 

17 ‘‘(J) DEFAULT.—Not later than 30 days 

18 after a borrower of a guaranteed loan is in de19 fault of any principal or interest payment due 

20 for 60 days or more, the Secretary shall— 

21 ‘‘(i) purchase the pool certificates rep22 resenting ownership of the guaranteed por23 tion of the loan; and 

24 ‘‘(ii) pay the registered holder of the 

25 certificates an amount equal to the guaran-
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1 teed portion of the loan represented by the 

2 certificate. 

3 ‘‘(K) PAYMENT OF CLAIMS.—If the Sec4 retary pays a claim under a guarantee issued 

5 under this subsection, the claim shall be sub6 rogated fully to the rights satisfied by the pay7 ment, as may be provided by the Secretary. 

8 ‘‘(L) APPLICATION OF LAWS.—No State or 

9 local law, and no Federal law, shall preclude or 

10 limit the exercise by the Secretary of the owner11 ship rights of the Secretary in the portions of 

12 loans constituting the pool against which the 

13 certificates are issued. 

14 ‘‘(3) DUTIES OF THE SECRETARY.— 

15 ‘‘(A) IN GENERAL.—On the adoption of 

16 final rules and regulations, the Secretary 

17 shall— 

18 ‘‘(i) provide for the central collection 

19 of registration information from all partici20 pating market makers for all loans and 

21 pool certificates sold under paragraphs (1) 

22 and (2), including, with respect to each 

23 original sale and any subsequent sale— 
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1 ‘‘(I) identification of the interest 

2 rate paid by the borrower to the lend3 er; 

4 ‘‘(II) the servicing fee of the 

5 lender; 

6 ‘‘(III) disclosure of whether in7 terest on the loan is at a fixed or vari8 able rate; 

9 ‘‘(IV) identification of each pur10 chaser of a pool certificate; 

11 ‘‘(V) the interest rate paid on the 

12 certificate; and 

13 ‘‘(VI) such other information as 

14 the Secretary considers appropriate. 

15 ‘‘(ii) before any sale, require the seller 

16 (as defined in subparagraph (B) to disclose 

17 to each prospective purchaser of the por18 tion of a loan guaranteed under this title 

19 and to each prospective purchaser of a pool 

20 certificate issued under paragraph (2) in21 formation on the terms, conditions, and 

22 yield of such instrument; 

23 ‘‘(iii) provide for adequate custody of 

24 any pooled guaranteed loans; 
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1 ‘‘(iv) take such actions as are nec2 essary, in restructuring pools of the guar3 anteed portion of loans, to minimize the es4 timated costs of paying claims under guar5 antees issued under this subsection; 

6 ‘‘(v) require each market maker— 

7 ‘‘(I) to service all pools formed, 

8 and participations sold, by the market 

9 maker; and 

10 ‘‘(II) to provide the Secretary 

11 with information relating to the collec12 tion and disbursement of all periodic 

13 payments, prepayments, and default 

14 funds from lenders, to or from the re15 serve fund that the Secretary shall es16 tablish to enable the timely payment 

17 guarantee to be self-funding, and 

18 from all beneficial holders; and 

19 ‘‘(vi) regulate market makers in pool 

20 certificates sold under this subsection. 

21 ‘‘(B) DEFINITION OF SELLER.—For pur22 poses of subparagraph (A)(ii), if the instrument 

23 being sold is a loan, the term ‘seller’ does not 

24 include— 

25 ‘‘(i) the person who made the loan; or 
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1 ‘‘(ii) any person who sells 3 or fewer 

2 guaranteed loans per year. 

3 ‘‘(4) CONTRACT FOR SERVICES.—The Secretary 

4 may contract for goods and services to be used for 

5 the purposes of this subsection without regard to ti6 tles 5, 40, and 41, United States Code (including 

7 any regulations issued under those titles). 

8 ‘‘SEC. 3903. ADMINISTRATION. 

9 ‘‘(a) POWERS OF SECRETARY.—The Secretary 

10 may— 

11 ‘‘(1)(A) administer the powers and duties of the 

12 Secretary through such national, area, State, or 

13 local offices and employees in the United States as 

14 the Secretary determines to be necessary; and 

15 ‘‘(B) authorize an office to serve an area com16 posed of 2 or more States if the Secretary deter17 mines that the volume of business in the area is not 

18 sufficient to justify separate State offices; 

19 ‘‘(2)(A) accept and use voluntary and uncom20 pensated services; and 

21 ‘‘(B) with the consent of the agency concerned, 

22 use the officers, employees, equipment, and informa23 tion of any agency of the Federal Government, or of 

24 any State, territory, or political subdivision; 
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1 ‘‘(3) subject to appropriations, make necessary 

2 expenditures for the purchase or hire of passenger 

3 vehicles, and such other facilities and services as the 

4 Secretary may from time to time find necessary for 

5 the proper administration of this title; 

6 ‘‘(4) subject to subsection (b), compromise, ad7 just, reduce, or charge-off debts or claims (including 

8 debts and claims arising from loan guarantees), and 

9 adjust, modify, subordinate, or release the terms of 

10 security instruments, leases, contracts, and agree11 ments entered into or administered by the Farm 

12 Service Agency, the Rural Utilities Service, the 

13 Rural Housing Service, the Rural Business-Coopera14 tive Service, or successor agencies under this title, 

15 except for activities conducted under the Housing 

16 Act of 1949 (42 U.S.C. 1441 et seq.); 

17 ‘‘(5) release mortgage and other contract liens 

18 if it appears that the mortgage and liens have no 

19 present or prospective value or that the enforcement 

20 of the mortgage and liens likely would be ineffectual 

21 or uneconomical; 

22 ‘‘(6) obtain fidelity bonds protecting the Fed23 eral Government against fraud and dishonesty of of24 ficers and employees of the Farm Service Agency, 

25 the Rural Utilities Service, the Rural Housing Serv-
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1 ice, or the Rural Business-Cooperative Service in 

2 lieu of faithful performance of duties bonds under 

3 section 14 of title 6, United States Code, but other4 wise in accordance with the section; 

5 ‘‘(7) consent to— 

6 ‘‘(A) long-term leases of facilities financed 

7 under this title notwithstanding the failure of 

8 the lessee to meet any of the requirements of 

9 this title if the long-term leases are necessary to 

10 ensure the continuation of services for which fi11 nancing was extended to the lessor; and 

12 ‘‘(B) the transfer of property securing any 

13 loan or financed by any loan or grant made or 

14 guaranteed by the Farm Service Agency, the 

15 Rural Utilities Service, the Rural Housing Serv16 ice, or the Rural Business-Cooperative Service 

17 under this title, or any other law administered 

18 by the Secretary, on such terms as the Sec19 retary considers necessary to carry out the pur20 pose of the loan or grant or to protect the fi21 nancial interest of the Federal Government, 

22 provided that the Secretary shall document the 

23 consent of the Secretary for the transfer of the 

24 property of a borrower in the file of the bor25 rower; and 
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1 ‘‘(8) notwithstanding that an area ceases, or 

2 has ceased, to be rural, in a rural area, or an eligible 

3 area, make loans and grants, and approve transfers 

4 and assumptions, under this title on the same basis 

5 as though the area still was rural in connection with 

6 property securing any loan made or guaranteed by 

7 the Secretary under this title or in connection with 

8 any property held by the Secretary under this title. 

9 ‘‘(b) LOAN ADJUSTMENTS.— 

10 ‘‘(1) NO LIQUIDATION OF PROPERTY.—The 

11 Secretary may not require liquidation of property se12 curing any farmer program loan or acceleration of 

13 any payment required under any farmer program 

14 loan as a prerequisite to initiating an action author15 ized under subsection (a). 

16 ‘‘(2) RELEASE OF PERSONAL LIABILITY.— 

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

18 subparagraph (B), the Secretary may release a 

19 borrower or other person obligated on a debt 

20 (other than debt incurred under the Housing 

21 Act of 1949 (42 U.S.C. 1441 et seq.)) from 

22 personal liability with or without payment of 

23 any consideration at the time of the com24 promise, adjustment, reduction, or charge-off of 

25 any claim. 
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†S 3240 ES

1 ‘‘(B) EXCEPTION.—No compromise, ad2 justment, reduction, or charge-off of any claim 

3 may be made or carried out after the claim has 

4 been referred to the Attorney General, unless 

5 the Attorney General approves. 

6 ‘‘(3) RURAL ELECTRIFICATION SECURITY IN7 STRUMENTS.—In the case of a security instrument 

8 entered into under the Rural Electrification Act of 

9 1936 (7 U.S.C. 901 et seq.), the Secretary shall no10 tify the Attorney General of the intent of the Sec11 retary to exercise the authority of the Secretary 

12 under paragraph (2). 

13 ‘‘(c) SIMPLIFIED APPLICATION FORMS FOR LOAN

14 GUARANTEES.— 

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

16 to lenders a short, simplified application form for 

17 guarantees under this title of— 

18 ‘‘(A) farmer program loans the principal 

19 amount of which is $125,000 or less; and 

20 ‘‘(B) business and industry guaranteed 

21 loans under section 3601(a)(2)(A) the principal 

22 amount of which is— 

23 ‘‘(i) in the case of a loan guarantee 

24 made during fiscal year 2002 or 2003, 

25 $400,000 or less; and 
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1 ‘‘(ii) in the case of a loan guarantee 

2 made during any subsequent fiscal year— 

3 ‘‘(I) $400,000 or less; or 

4 ‘‘(II) if the Secretary determines 

5 that there is not a significant in6 creased risk of a default on the loan, 

7 $600,000 or less. 

8 ‘‘(2) WATER AND WASTE DISPOSAL GRANTS

9 AND LOANS.—The Secretary shall develop an appli10 cation process that accelerates, to the maximum ex11 tent practicable, the processing of applications for 

12 water and waste disposal grants or direct or guaran13 teed loans under section 3501(a)(1) the grant award 

14 amount or principal loan amount, respectively, of 

15 which is $300,000 or less. 

16 ‘‘(3) ADMINISTRATION.—In developing an ap17 plication under this subsection, the Secretary shall— 

18 ‘‘(A) consult with commercial and coopera19 tive lenders; and 

20 ‘‘(B) ensure that— 

21 ‘‘(i) the form can be completed manu22 ally or electronically, at the option of the 

23 lender; 

24 ‘‘(ii) the form minimizes the docu25 mentation required to accompany the form; 
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1 ‘‘(iii) the cost of completing and proc2 essing the form is minimal; and 

3 ‘‘(iv) the form can be completed and 

4 processed in an expeditious manner. 

5 ‘‘(d) USE OF ATTORNEYS FOR PROSECUTION OR DE6 FENSE OF CLAIMS.—The Secretary may use for the pros7 ecution or defense of any claim or obligation described in 

8 subsection (a)(5) the Attorney General, the General Coun9 sel of the Department, or a private attorney who has en10 tered into a contract with the Secretary. 

11 ‘‘(e) PRIVATE COLLECTION AGENCY.—The Secretary 

12 may use a private collection agency to collect a claim or 

13 obligation described in subsection (a)(5). 

14 ‘‘(f) SECURITY SERVICING.— 

15 ‘‘(1) IN GENERAL.—The Secretary may— 

16 ‘‘(A) make advances, without regard to any 

17 loan or total indebtedness limitation, to pre18 serve and protect the security for, or the lien or 

19 priority of the lien securing any loan or other 

20 indebtedness owing to or acquired by the Sec21 retary under this title or under any other pro22 gram administered by the Farm Service Agen23 cy, the Rural Utilities Service, the Rural Hous24 ing Service, or the Rural Business-Cooperative 
764 

†S 3240 ES

1 Service applicable program, as determined by 

2 the Secretary; and 

3 ‘‘(B)(i) bid for and purchase at any execu4 tion, foreclosure, or other sale or otherwise ac5 quire property on which the United States has 

6 a lien by reason of a judgment or execution 

7 arising from, or that is pledged, mortgaged, 

8 conveyed, attached, or levied on to secure the 

9 payment of, the indebtedness regardless of 

10 whether the property is subject to other liens; 

11 ‘‘(ii) accept title to any property so pur12 chased or acquired; and 

13 ‘‘(iii) sell, manage, or otherwise dispose of 

14 the property in accordance with this subsection. 

15 ‘‘(2) OPERATION OR LEASE OF REALTY.—Ex16 cept as provided in subsections (c) and (e), real 

17 property administered under this title may be oper18 ated or leased by the Secretary for such period as 

19 the Secretary may consider necessary to protect the 

20 investment of the Federal Government in the prop21 erty. 

22 ‘‘(g) PAYMENTS TO LENDERS.— 

23 ‘‘(1) REQUIREMENT.—Not later than 90 days 

24 after a court of competent jurisdiction confirms a 

25 plan of reorganization under chapter 12 of title 11, 
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1 United States Code, for any borrower to whom a 

2 lender has made a loan guaranteed under this title, 

3 the Secretary shall pay the lender an amount esti4 mated by the Secretary to be equal to the loss in5 curred by the lender for purposes of the guarantee. 

6 ‘‘(2) PAYMENT TOWARD LOAN GUARANTEE.— 

7 Any amount paid to a lender under this subsection 

8 with respect to a loan guaranteed under this title 

9 shall be treated as payment towards satisfaction of 

10 the loan guarantee. 

11 ‘‘SEC. 3904. LOAN MORATORIUM AND POLICY ON FORE12 CLOSURES. 

13 ‘‘(a) IN GENERAL.—In addition to any other author14 ity that the Secretary may have to defer principal and in15 terest and forgo foreclosure, the Secretary may permit, at 

16 the request of the borrower, the deferral of principal and 

17 interest on any outstanding loan made or guaranteed by 

18 the Secretary under this title, or under any other law ad19 ministered by the Farm Service Agency, the Rural Utili20 ties Service, the Rural Housing Service, or the Rural Busi21 ness-Cooperative Service, and may forgo foreclosure of the 

22 loan, for such period as the Secretary considers necessary 

23 on a showing by the borrower that, due to circumstances 

24 beyond the control of the borrower, the borrower is tempo25 rarily unable to continue making payments of the principal 
766 

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1 and interest when due without unduly impairing the 

2 standard of living of the borrower. 

3 ‘‘(b) INTEREST.— 

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), the Secretary may permit any loan de6 ferred under this section to bear no interest during 

7 or after the deferral period. 

8 ‘‘(2) EXCEPTION.—If the security instrument 

9 securing the loan is foreclosed, such interest as is in10 cluded in the purchase price at the foreclosure shall 

11 become part of the principal and draw interest from 

12 the date of foreclosure at the rate prescribed by law. 

13 ‘‘(c) MORATORIUM REGARDING CIVIL RIGHTS

14 CLAIMS.— 

15 ‘‘(1) IN GENERAL.—Except as otherwise pro16 vided in this subsection, effective beginning on May 

17 22, 2008, there shall be in effect a moratorium, with 

18 respect to farmer program loans made under subtitle 

19 A, on all acceleration and foreclosure proceedings in20 stituted by the Department against any farmer 

21 who— 

22 ‘‘(A) has pending against the Department 

23 a claim of program discrimination that is ac24 cepted by the Department as valid; or 
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1 ‘‘(B) files a claim of program discrimina2 tion that is accepted by the Department as 

3 valid. 

4 ‘‘(2) WAIVER OF INTEREST AND OFFSETS.— 

5 During the period of the moratorium, the Secretary 

6 shall waive the accrual of interest and offsets on all 

7 farmer program loans made under subtitle A, B, or 

8 C for which loan acceleration or foreclosure pro9 ceedings have been suspended under paragraph (1). 

10 ‘‘(3) TERMINATION OF MORATORIUM.—The 

11 moratorium shall terminate with respect to a claim 

12 of discrimination by a farmer on the earlier of— 

13 ‘‘(A) the date the Secretary resolves the 

14 claim; or 

15 ‘‘(B) if the farmer appeals the decision of 

16 the Secretary on the claim to a court of com17 petent jurisdiction, the date that the court ren18 ders a final decision on the claim. 

19 ‘‘(4) FAILURE TO PREVAIL.—If a farmer does 

20 not prevail on a claim of discrimination described in 

21 paragraph (1), the farmer shall be liable for any in22 terest and offsets that accrued during the period 

23 that loan acceleration or foreclosure proceedings 

24 have been suspended under paragraph (1). 
768 

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1 ‘‘SEC. 3905. OIL AND GAS ROYALTY PAYMENTS ON LOANS. 

2 ‘‘(a) IN GENERAL.—The Secretary shall permit a 

3 borrower of a loan made or guaranteed under this title 

4 to make a prospective payment on the loan with proceeds 

5 from— 

6 ‘‘(1) the leasing of oil, gas, or other mineral 

7 rights to real property used to secure the loan; or 

8 ‘‘(2) the sale of oil, gas, or other minerals re9 moved from real property used to secure the loan, if 

10 the value of the rights to the oil, gas, or other min11 erals has not been used to secure the loan. 

12 ‘‘(b) APPLICABILITY.—Subsection (a) shall not apply 

13 to a borrower of a loan made or guaranteed under this 

14 title with respect to which a liquidation or foreclosure pro15 ceeding was pending on December 23, 1985. 

16 ‘‘SEC. 3906. TAXATION. 

17 ‘‘(a) IN GENERAL.—Except as provided in subsection 

18 (b), all property subject to a lien held by the United States 

19 or the title to which is acquired or held by the Secretary 

20 under this title (other than property used for administra21 tive purposes) shall be subject to taxation by State, terri22 tory, district, and local political subdivisions in the same 

23 manner and to the same extent as other property is taxed. 

24 ‘‘(b) EXCEPTIONS.—No tax shall be imposed or col25 lected as described in subsection (a) if the tax (whether 

26 as a tax on the instrument or in connection with con-
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†S 3240 ES

1 veying, transferring, or recording the instrument) is based 

2 on— 

3 ‘‘(1) the value of any notes or mortgages or 

4 other lien instruments held by or transferred to the 

5 Secretary; 

6 ‘‘(2) any notes or lien instruments administered 

7 under this title that are made, assigned, or held by 

8 a person otherwise liable for the tax; or 

9 ‘‘(3) the value of any property conveyed or 

10 transferred to the Secretary. 

11 ‘‘(c) FAILURE TO PAY OR COLLECT TAX.—The fail12 ure to pay or collect a tax under subsection (a) shall not— 

13 ‘‘(1) be a ground for— 

14 ‘‘(A) refusal to record or file an instru15 ment; or 

16 ‘‘(B) failure to provide notice; or 

17 ‘‘(2) prevent the enforcement of the instrument 

18 in any Federal or State court. 

19 ‘‘SEC. 3907. CONFLICTS OF INTEREST. 

20 ‘‘(a) ACCEPTANCE OF CONSIDERATION PROHIB21 ITED.—No officer, attorney, or other employee of the De22 partment shall, directly or indirectly, be the beneficiary 

23 of or receive any fee, commission, gift, or other consider24 ation for or in connection with any transaction or business 

25 under this title other than such salary, fee, or other com-
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†S 3240 ES

1 pensation as the officer, attorney, or employee may receive 

2 as the officer, attorney, or employee. 

3 ‘‘(b) ACQUISITION OF INTEREST IN LAND PROHIB4 ITED.— 

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), no officer or employee of the Department 

7 who acts on or reviews an application made by any 

8 person under this title for a loan to purchase land 

9 may acquire, directly or indirectly, any interest in 

10 the land for a period of 3 years after the date on 

11 which the action is taken or the review is made. 

12 ‘‘(2) FORMER COUNTY COMMITTEE MEM13 BERS.—Paragraph (1) shall not apply to a former 

14 member of a county committee on a determination 

15 by the Secretary, prior to the acquisition of the in16 terest, that the former member acted in good faith 

17 when acting on or reviewing the application. 

18 ‘‘(c) CERTIFICATIONS ON LOANS TO FAMILY MEM19 BERS PROHIBITED.—No member of a county committee 

20 shall knowingly make or join in making any certification 

21 with respect to— 

22 ‘‘(1) a loan to purchase any land in which the 

23 member, or any person related to the member within 

24 the second degree of consanguinity or affinity, has 

25 or may acquire any interest; or 
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1 ‘‘(2) any applicant related to the member within 

2 the second degree of consanguinity or affinity. 

3 ‘‘(d) PENALTIES.—Any person violating this section 

4 shall, on conviction of the violation, be punished by a fine 

5 of not more than $2,000 or imprisonment for not more 

6 than 2 years, or both. 

7 ‘‘SEC. 3908. LOAN SUMMARY STATEMENTS. 

8 ‘‘(a) DEFINITION OF SUMMARY PERIOD.—In this 

9 section, the term ‘summary period’ means the period be10 ginning on the date of issuance of the preceding loan sum11 mary statement and ending on the date of issuance of the 

12 current loan summary statement. 

13 ‘‘(b) ISSUANCE OF STATEMENTS.—On the request of 

14 a borrower of a loan made (but not guaranteed) under 

15 this title, the Secretary shall issue to the borrower a loan 

16 summary statement that reflects the account activity dur17 ing the summary period for each loan made under this 

18 title to the borrower, including— 

19 ‘‘(1) the outstanding amount of principal due 

20 on each loan at the beginning of the summary pe21 riod; 

22 ‘‘(2) the interest rate charged on each loan; 

23 ‘‘(3) the amount of payments made on, and the 

24 application of the payments to, each loan during the 
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1 summary period and an explanation of the basis for 

2 the application of the payments; 

3 ‘‘(4) the amount of principal and interest due 

4 on each loan at the end of the summary period; 

5 ‘‘(5) the total amount of unpaid principal and 

6 interest on all loans at the end of the summary pe7 riod; 

8 ‘‘(6) any delinquency in the repayment of any 

9 loan; 

10 ‘‘(7) a schedule of the amount and date of pay11 ments due on each loan; and 

12 ‘‘(8) the procedure the borrower may use to ob13 tain more information concerning the status of the 

14 loans. 

15 ‘‘SEC. 3909. CERTIFIED LENDERS PROGRAM. 

16 ‘‘(a) CERTIFIED LENDERS PROGRAM.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall estab18 lish a program under which the Secretary shall 

19 guarantee loans under this title that are made by 

20 lending institutions certified by the Secretary. 

21 ‘‘(2) CERTIFICATION REQUIREMENTS.—The 

22 Secretary shall certify a lending institution that 

23 meets such criteria as the Secretary may prescribe 

24 in regulations, including the ability of the institution 
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†S 3240 ES

1 to properly make, service, and liquidate the loans of 

2 the institution. 

3 ‘‘(3) CONDITION OF CERTIFICATION.— 

4 ‘‘(A) IN GENERAL.—As a condition of the 

5 certification, the Secretary shall require the in6 stitution to undertake to service the loans guar7 anteed by the Secretary under this section, 

8 using standards that are not less stringent than 

9 generally accepted banking standards con10 cerning loan servicing employed by prudent 

11 commercial or cooperative lenders. 

12 ‘‘(B) MONITORING.—The Secretary shall, 

13 at least annually, monitor the performance of 

14 each certified lender to ensure that the condi15 tions of the certification are being met. 

16 ‘‘(4) EFFECT OF CERTIFICATION.—Notwith17 standing any other provision of law: 

18 ‘‘(A) AMOUNT OF LOAN GUARANTEE.—In 

19 the case of a loan made or guaranteed under 

20 subtitle A, the Secretary shall guarantee 80 

21 percent of a loan made under this section by a 

22 certified lending institution as described in 

23 paragraph (1), subject to a determination that 

24 the borrower of the loan meets the eligibility re25 quirements and such other criteria as may be 
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1 applicable to loans guaranteed by the Secretary 

2 under other provisions of this title. 

3 ‘‘(B) CERTIFICATIONS BY LENDING INSTI4 TUTIONS.—In the case of loans to be guaran5 teed by the Secretary under this section, the 

6 Secretary shall permit certified lending institu7 tions to make appropriate certifications (as pro8 vided by regulations issued by the Secretary)— 

9 ‘‘(i) relating to issues such as credit10 worthiness, repayment ability, adequacy of 

11 collateral, and feasibility of farm operation; 

12 and 

13 ‘‘(ii) that the borrower is in compli14 ance with all requirements of law, includ15 ing regulations issued by the Secretary. 

16 ‘‘(C) APPROVAL PROCESS.— 

17 ‘‘(i) IN GENERAL.—The Secretary 

18 shall approve or disapprove a guarantee 

19 not later than 14 days after the date that 

20 the lending institution applies to the Sec21 retary for the guarantee. 

22 ‘‘(ii) DISAPPROVAL.—If the Secretary 

23 disapproves the loan application during the 

24 14-day period, the Secretary shall state, in 
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1 writing, all of the reasons the application 

2 was disapproved. 

3 ‘‘(5) RELATIONSHIP TO OTHER REQUIRE4 MENTS.—Nothing in this section affects the respon5 sibility of the Secretary to certify eligibility, review 

6 financial information, and otherwise assess an appli7 cation. 

8 ‘‘(b) PREFERRED CERTIFIED LENDERS PROGRAM.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall estab10 lish a Preferred Certified Lenders Program for lend11 ers under this title who establish— 

12 ‘‘(A) knowledge of, and experience under, 

13 the program established under subsection (a); 

14 ‘‘(B) knowledge of the regulations con15 cerning the guaranteed loan program; and 

16 ‘‘(C) proficiency related to the certified 

17 lender program requirements. 

18 ‘‘(2) REVOCATION OF DESIGNATION.— 

19 ‘‘(A) IN GENERAL.—Subject to subpara20 graph (B), the designation of a lender as a Pre21 ferred Certified Lender shall be revoked at any 

22 time— 

23 ‘‘(i) that the Secretary determines 

24 that the lender is not adhering to the rules 
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1 and regulations applicable to the program; 

2 or 

3 ‘‘(ii) if the loss experiences of a Pre4 ferred Certified Lender are excessive as 

5 compared to other Preferred Certified 

6 Lenders. 

7 ‘‘(B) EFFECT.—A suspension or revocation 

8 under subparagraph (A) shall not affect any 

9 outstanding guarantee. 

10 ‘‘(3) CONDITION OF CERTIFICATION.—As a 

11 condition of preferred certification, the Secretary 

12 shall require the institution to undertake to service 

13 the loans guaranteed by the Secretary under this 

14 subsection using generally accepted banking stand15 ards concerning loan servicing employed by prudent 

16 commercial or cooperative lenders. 

17 ‘‘(4) MONITORING.—The Secretary shall, at 

18 least annually, monitor the performance of each Pre19 ferred Certified Lender to ensure that the conditions 

20 of certification are being met. 

21 ‘‘(5) EFFECT OF PREFERRED LENDER CERTIFI22 CATION.— 

23 ‘‘(A) IN GENERAL.—Notwithstanding any 

24 other provision of law, the Secretary shall— 
777 

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1 ‘‘(i) guarantee 80 percent of an ap2 proved loan made by a certified lending in3 stitution as described in this subsection, 

4 subject to a determination that the bor5 rower meets the eligibility requirements or 

6 such other criteria as may be applicable to 

7 loans guaranteed by the Secretary under 

8 other provisions of this title; 

9 ‘‘(ii) permit certified lending institu10 tions— 

11 ‘‘(I) to make all decisions, with 

12 respect to loans to be guaranteed by 

13 the Secretary under this subsection 

14 relating to credit worthiness, the clos15 ing, monitoring, collection and liquida16 tion of loans; and 

17 ‘‘(II) to accept appropriate cer18 tifications, as provided by regulations 

19 issued by the Secretary, that the bor20 rower is in compliance with all re21 quirements of law or regulations pro22 mulgated by the Secretary; and 

23 ‘‘(iii) be considered to have guaran24 teed 80 percent of a loan made by a pre25 ferred certified lending institution as de-
778 

†S 3240 ES

1 scribed in paragraph (1), if the Secretary 

2 fails to approve or reject the application of 

3 such institution within 14 calendar days 

4 after the date that the lending institution 

5 presented the application to the Secretary. 

6 ‘‘(B) REQUIREMENT.—If the Secretary re7 jects an application under subparagraph (A)(iii) 

8 during the 14-day period, the Secretary shall 

9 state, in writing, the reasons the application 

10 was rejected. 

11 ‘‘(c) ADMINISTRATION OF CERTIFIED LENDERS AND

12 PREFERRED CERTIFIED LENDERS PROGRAMS.—The Sec13 retary may administer the loan guarantee programs under 

14 subsections (a) and (b) through central offices established 

15 in States or in multi-State areas. 

16 ‘‘SEC. 3910. LOANS TO RESIDENT ALIENS. 

17 ‘‘(a) IN GENERAL.—Notwithstanding the provisions 

18 of this title limiting the making of a loan to a citizen of 

19 the United States, the Secretary may make a loan under 

20 this title to an alien lawfully admitted to the United States 

21 for permanent residence under the Immigration and Na22 tionality Act (8 U.S.C. 1101 et seq.). 

23 ‘‘(b) REGULATIONS.— 

24 ‘‘(1) IN GENERAL.—No loan may be made 

25 under this title to an alien referred to in subsection 
779 

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1 (a) until the Secretary issues regulations estab2 lishing the terms and conditions under which the 

3 alien may receive the loan. 

4 ‘‘(2) REQUIREMENT.—The Secretary shall sub5 mit the regulations to the Committee on Agriculture 

6 of the House of Representatives and the Committee 

7 on Agriculture, Nutrition, and Forestry of the Sen8 ate at least 30 days prior to the date on which the 

9 regulations are published in the Federal Register. 

10 ‘‘SEC. 3911. EXPEDITED CLEARING OF TITLE TO INVENTORY 

11 PROPERTY. 

12 ‘‘(a) IN GENERAL.—The Secretary may employ local 

13 attorneys, on a case-by-case basis, to process all legal pro14 cedures necessary to clear the title to foreclosed properties 

15 in the inventory of the Department. 

16 ‘‘(b) COMPENSATION.—Attorneys shall be com17 pensated at not more than the usual and customary 

18 charges of the attorneys for the work. 

19 ‘‘SEC. 3912. TRANSFER OF LAND TO SECRETARY. 

20 ‘‘The President may at any time, in the discretion 

21 of the President, transfer to the Secretary any right, inter22 est, or title held by the United States in any land acquired 

23 in the program of national defense and no longer needed 

24 for that purpose that the President finds suitable for the 

25 purposes of this title, and the Secretary shall dispose of 
780 

†S 3240 ES

1 the transferred land in the manner and subject to the 

2 terms and conditions of this title. 

3 ‘‘SEC. 3913. COMPETITIVE SOURCING LIMITATIONS. 

4 ‘‘The Secretary may not complete a study of, or enter 

5 into a contract with a private party to carry out, without 

6 specific authorization in a subsequent Act of Congress, a 

7 competitive sourcing activity of the Secretary, including 

8 support personnel of the Department, relating to rural de9 velopment or farmer program loans. 

10 ‘‘SEC. 3914. REGULATIONS. 

11 ‘‘The Secretary may issue such regulations, prescribe 

12 such terms and conditions for making or guaranteeing 

13 loans, security instruments, and agreements, except as 

14 otherwise specified in this title, and make such delegations 

15 of authority as the Secretary considers necessary to carry 

16 out this title.’’. 

17 SEC. 6002. CONFORMING AMENDMENTS. 

18 (a) Section 17(c) of the Rural Electrification Act of 

19 1936 (7 U.S.C. 917(c)) is amended by striking paragraph 

20 (1) and inserting the following: 

21 ‘‘(1) Subtitle B of the Consolidated Farm and 

22 Rural Development Act.’’. 

23 (b) Section 305(c)(2)(B)(i)(I) of the Rural Elec24 trification Act of 1936 (7 U.S.C. 935(c)(2)(B)(i)(I)) is 

25 amended by striking ‘‘section 307(a)(3)(A) of the Consoli-
781 

†S 3240 ES

1 dated Farm and Rural Development Act (7 U.S.C. 

2 1927(a)(3)(A))’’ and inserting ‘‘section 3701(b)(2) of the 

3 Consolidated Farm and Rural Development Act’’. 

4 (c) Section 306F(a)(1) of the Rural Electrification 

5 Act of 1936 (7 U.S.C. 936f(a)(1)) is amended by striking 

6 subparagraph (B) and inserting the following: 

7 ‘‘(B) chapter 1 of subtitle B of the Con8 solidated Farm and Rural Development Act.’’. 

9 (d) Section 2333(d) of the Food, Agriculture, Con10 servation, and Trade Act of 1990 (7 U.S.C. 950aaa–2(d)) 

11 is amended— 

12 (1) in paragraph (11), by adding ‘‘and’’ at the 

13 end; 

14 (2) by striking paragraph (12); and 

15 (3) by redesignating paragraph (13) as para16 graph (12). 

17 (e) Section 601(b) of the Rural Electrification Act 

18 of 1936 (7 U.S.C. 950bb(b)) is amended by striking para19 graph (3). 

20 (f) Section 602(5) of the Emergency Livestock Feed 

21 Assistance Act of 1988 (7 U.S.C. 1471(5)) is amended 

22 by striking ‘‘section 355(e)(1)(D)(ii) of the Consolidated 

23 Farm and Rural Development Act (7 U.S.C. 

24 1985(e)(1)(D)(ii))’’ and inserting ‘‘section 3409(c)(1)(A) 

25 of the Consolidated Farm and Rural Development Act)’’. 
782 

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1 (g) Section 508 of the Federal Crop Insurance Act 

2 (7 U.S.C. 1508) is amended— 

3 (1) in subsection (b)(7)(A), by striking ‘‘section 

4 371 of the Consolidated Farm and Rural Develop5 ment Act (7 U.S.C. 2008f)’’ and inserting ‘‘section 

6 3424 of the Consolidated Farm and Rural Develop7 ment Act’’; and 

8 (2) in subsection (n)(2), by striking ‘‘subtitle C 

9 of the Consolidated Farm and Rural Development 

10 Act (7 U.S.C. 1961 et seq.)’’ and inserting ‘‘chapter 

11 3 of subtitle A of the Consolidated Farm and Rural 

12 Development Act’’. 

13 (h) Section 231(a) of the Agricultural Risk Protec14 tion Act of 2000 (7 U.S.C. 1632a(a)) is amended— 

15 (1) in paragraph (1), by striking ‘‘section 

16 343(a) of the Consolidated Farm and Rural Devel17 opment Act (7 U.S.C. 1991(a))’’ and inserting ‘‘sec18 tion 3002 of the Consolidated Farm and Rural De19 velopment Act’’; and 

20 (2) in paragraph (4), by striking ‘‘section 

21 355(e) of the Consolidated Farm and Rural Devel22 opment Act (7 U.S.C. 2003(e))’’ and inserting ‘‘sec23 tion 3002 of the Consolidated Farm and Rural De24 velopment Act’’. 
783 

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1 (i) Section 14204(a) of the Food, Conservation, and 

2 Energy Act of 2008 (7 U.S.C. 2008q–1(a)) is amended 

3 by striking ‘‘an entity described in section 379C(a) of the 

4 Consolidated Farm and Rural Development Act (7 U.S.C. 

5 2008q(a))’’ and inserting ‘‘an entity determined by the 

6 Secretary’’. 

7 (j) Section 607(c)(6) of the Rural Development Pol8 icy Act of 1972 (7 U.S.C. 2204b(c)(6)) is amended in the 

9 last sentence— 

10 (1) by striking ‘‘, and’’ and inserting ‘‘and 

11 any’’; and 

12 (2) by striking ‘‘required under section 

13 306(a)(12) of the Consolidated Farm and Rural De14 velopment Act’’. 

15 (k) Section 901(b) of the Agricultural Act of 1970 

16 (7 U.S.C. 2204b–1(b)) is amended by striking ‘‘rural 

17 areas as defined in the private business enterprise excep18 tion in section 306(a)(7) of the Consolidated Farmers 

19 Home Administration Act of 1961, as amended (7 U.S.C. 

20 1926)’’ and inserting ‘‘rural areas, as defined in section 

21 3002 of the Consolidated Farm and Rural Development 

22 Act’’. 

23 (l) Section 14220 of the Food, Conservation, and En24 ergy Act of 2008 (7 U.S.C. 2206b) is amended by striking 

25 ‘‘section 343(a)(13)(A) of the Consolidated Farm and 
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1 Rural Development Act)’’ and inserting ‘‘section 3002 of 

2 the Consolidated Farm and Rural Development Act)’’. 

3 (m) Section 2501(c)(2)(D) of the Food, Agriculture, 

4 Conservation, and Trade Act of 1990 (7 U.S.C. 

5 2279(c)(2)(D)) is amended by striking ‘‘sections 

6 355(a)(1) and 355(c) of the Consolidated Farm and Rural 

7 Development Act (7 U.S.C. 2003(a)(1))’’ and inserting 

8 ‘‘paragraphs (1) and (3) of section 3416(a) of the Consoli9 dated Farm and Rural Development Act’’. 

10 (n) Section 2501A(b) of the Food, Agriculture, Con11 servation, and Trade Act of 1990 (7 U.S.C. 2279–1(b)) 

12 is amended by striking ‘‘section 355(e) of the Consolidated 

13 Farm and Rural Development Act (7 U.S.C. 2003(e))’’ 

14 and inserting ‘‘section 3002 of the Consolidated Farm and 

15 Rural Development Act’’. 

16 (o) Section 7405(c)(8)(B) of the Farm Security and 

17 Rural Investment Act of 2002 (7 U.S.C. 3319f(c)(8)(B)) 

18 is amended by striking ‘‘section 355(e) of the Consolidated 

19 Farm and Rural Development Act (7 U.S.C. 2003(e))’’ 

20 and inserting ‘‘section 3002 of the Consolidated Farm and 

21 Rural Development Act)’’. 

22 (p) Section 1101(d)(2)(A) of the Food, Conservation, 

23 and Energy Act of 2008 (7 U.S.C. 8711(d)(2)(A)) is 

24 amended by striking ‘‘section 355(e) of the Consolidated 

25 Farm and Rural Development Act (7 U.S.C. 2003(e))’’ 
785 

†S 3240 ES

1 and inserting ‘‘section 3002 of the Consolidated Farm and 

2 Rural Development Act)’’. 

3 (q) Section 1302(d)(2)(A) of the Food, Conservation, 

4 and Energy Act of 2008 (7 U.S.C. 8752(d)(2)(A)) is 

5 amended by striking ‘‘section 355(e) of the Consolidated 

6 Farm and Rural Development Act (7 U.S.C. 2003(e))’’ 

7 and inserting ‘‘section 3002 of the Consolidated Farm and 

8 Rural Development Act)’’. 

9 (r) Section 2375(g) of the Food, Agriculture, Con10 servation, and Trade Act of 1990 (7 U.S.C. 6613(g)) is 

11 amended by striking ‘‘section 304(b), 306(a), or 310B(e) 

12 of the Consolidated Farm and Rural Development Act (7 

13 U.S.C. 1924(b), 1926(a), and 1932(e))’’ and inserting 

14 ‘‘subtitle B of the Consolidated Farm and Rural Develop15 ment Act’’. 

16 (s) Section 226B(a)(1) of the Department of Agri17 culture Reorganization Act of 1994 (7 U.S.C. 6934(a)(1)) 

18 is amended by striking ‘‘section 343(a) of the Consolidated 

19 Farm and Rural Development Act (7 U.S.C. 1991(a))’’ 

20 and inserting ‘‘section 3002 of the Consolidated Farm and 

21 Rural Development Act’’. 

22 (t) Section 196(i)(3)(B) of the Federal Agriculture 

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

24 7333(i)(3)(B)) is amended by striking ‘‘subtitle C of the 

25 Consolidated Farm and Rural Development Act (7 U.S.C. 
786 

†S 3240 ES

1 1961 et seq.)’’ and inserting ‘‘chapter 3 of subtitle A of 

2 the Consolidated Farm and Rural Development Act’’. 

3 (u) Section 9009(a)(1) of the Farm Security and 

4 Rural Investment Act of 2002 (7 U.S.C. 8109(a)(1)) is 

5 amended by striking ‘‘section 343(a)(13)(A) of the Con6 solidated Farm and Rural Development Act (7 U.S.C. 

7 1991(a)(13)(A)))’’ and inserting ‘‘section 3002 of the 

8 Consolidated Farm and Rural Development Act’’. 

9 (v) Section 9011(c)(2)(B)(v) of the Farm Security 

10 and Rural Investment Act of 2002 (7 U.S.C. 

11 8111(c)(2)(B)(v)) is amended by striking subclause (I)and 

12 inserting the following: 

13 ‘‘(I) beginning farmers (as de14 fined in accordance with section 3002 

15 of the Consolidated Farm and Rural 

16 Development Act); or’’. 

17 (w) Section 7(b)(2)(B) of the Small Business Act (15 

18 U.S.C. 636(b)(2)(B)) is amended by striking ‘‘section 321 

19 of the Consolidated Farm and Rural Development Act (7 

20 U.S.C. 1961)’’ and inserting ‘‘section 3301 of the Consoli21 dated Farm and Rural Development Act’’. 

22 (x) Section 8(b)(5)(B)(iii)(III)(bb) of the Soil Con23 servation and Domestic Allotment Act (16 U.S.C. 

24 590h(b)(5)(B)(iii)(III)(bb)) is amended by striking ‘‘sec25 tion 355(e)(1) of the Consolidated Farm and Rural Devel-
787 

†S 3240 ES

1 opment Act (7 U.S.C.A. § 2003(e)(1))’’ and inserting 

2 ‘‘section 3002 of the Consolidated Farm and Rural Devel3 opment Act)’’. 

4 (y) Section 10(b)(3) of the Cooperative Forestry As5 sistance Act of 1978 (16 U.S.C. 2106(b)(3)) is amended 

6 in the last sentence by striking ‘‘set out in the first clause 

7 of section 306(a)(7) of the Consolidated Farm and Rural 

8 Development Act’’ and inserting ‘‘given the term in sec9 tion 3002 of the Consolidated Farm and Rural Develop10 ment Act’’. 

11 (z) Section 1201(a)(2) of the Food Security Act of 

12 1985 (16 U.S.C. 3801(a)(2)) is amended by striking ‘‘sec13 tion 343(a)(8) of the Consolidated Farm and Rural Devel14 opment Act (7 U.S.C. 1991(a)(8))’’ and inserting ‘‘section 

15 3002 of the Consolidated Farm and Rural Development 

16 Act’’. 

17 (aa) Section 1238(2) of the Food Security Act of 

18 1985 (16 U.S.C. 3838(2)) is amended by striking ‘‘section 

19 343(a) of the Consolidated Farm and Rural Development 

20 Act (7 U.S.C. 1991(a))’’ and inserting ‘‘section 3002 of 

21 the Consolidated Farm and Rural Development Act’’. 

22 (bb) Section 5 of Public Law 91–229 (25 U.S.C. 492) 

23 is amended by striking ‘‘section 307(a)(3)(B) of the Con24 solidated Farmers Home Administration Act of 1961, as 

25 amended, and to the provisions of subtitle D of that Act 
788 

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1 except sections 340, 341, 342, and 343’’ and inserting 

2 ‘‘3105(b)(2) of the Consolidated Farm and Rural Develop3 ment Act’’. 

4 (cc) Section 6(c) of Public Law 91–229 (25 U.S.C. 

5 493(c)) is amended by striking ‘‘section 333B of the Con6 solidated Farm and Rural Development Act (7 U.S.C. 

7 1983b)’’ and inserting ‘‘subtitle H of the Department of 

8 Agriculture Reorganization Act of 1994 (7 U.S.C. 6991 

9 et seq.)’’. 

10 (dd) Section 181(a)(2)(B)(ii) of the Internal Revenue 

11 Code of 1986 is amended by striking ‘‘section 2009aa– 

12 1 of title 7, United States Code’’ and inserting ‘‘section 

13 3801 of the Consolidated Farm and Rural Development 

14 Act’’. 

15 (ee) Section 515(b)(3) of the Housing Act of 1949 

16 (42 U.S.C. 1485(b)(3)) is amended by striking ‘‘all the 

17 provisions of section 309 and the second and third sen18 tences of section 308 of the Consolidated Farmers Home 

19 Administration Act of 1961, including the authority in 

20 section 309(f)(1) of that Act’’ and inserting ‘‘section 3401 

21 of the Consolidated Farm and Rural Development Act’’. 

22 (ff) Section 517(b) of the Housing Act of 1949 (42 

23 U.S.C. 1487(b)) is amended in the third sentence by strik24 ing ‘‘(7 U.S.C. 1929)’’ and inserting ‘‘under section 3401 

25 of the Consolidated Farm and Rural Development Act’’. 
789 

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1 (gg) Section 3(8) of the Public Works and Economic 

2 Development Act of 1965 (42 U.S.C. 3122(8)) is amend3 ed— 

4 (1) by striking subparagraph (B) and inserting 

5 the following: 

6 ‘‘(B) the Delta Regional Authority estab7 lished under chapter 4 of subtitle B of the Con8 solidated Farm and Rural Development Act;’’; 

9 and 

10 (2) by striking subparagraph (D) and inserting 

11 the following: 

12 ‘‘(D) the Northern Great Plains Regional 

13 Authority established under chapter 5 of sub14 title B of the Consolidated Farm and Rural De15 velopment Act.’’. 

16 (hh) Section 310(a) of the Robert T. Stafford Dis17 aster Relief and Emergency Assistance Act (42 U.S.C. 

18 5153(a)) is amended by striking paragraph (4) and insert19 ing the following: 

20 ‘‘(4) Chapter 1 of subtitle B of the Consoli21 dated Farm and Rural Development Act.’’. 

22 (ii) Section 582(d)(1) of the National Flood Insur23 ance Reform Act of 1994 (42 U.S.C. 5154a(d)(1)) is 

24 amended by striking ‘‘section 321(a) of the Consolidated 

25 Farm and Rural Development Act (7 U.S.C. 1961(a))’’ 
790 

†S 3240 ES

1 and inserting ‘‘section 3301(b) of the Consolidated Farm 

2 and Rural Development Act’’. 

3 (jj) Section 213(c)(1) of the Biomass Energy and Al4 cohol Fuels Act of 1980 (42 U.S.C. 8813(c)(1)) is amend5 ed in the first sentence by striking ‘‘section 309 of the 

6 Consolidated Farm and Rural Development Act or the 

7 Rural Development Insurance Fund in section 309A of 

8 such Act’’ and inserting ‘‘under section 3401 of the Con9 solidated Farm and Rural Development Act or the Rural 

10 Development Insurance Fund under section 3704 of that 

11 Act’’. 

12 (kk) Section 1323(b)(2) of the Food Security Act of 

13 1985 (Public Law 99–198; 7 U.S.C. 1932 note) is amend14 ed— 

15 (1) in subparagraph (A), by inserting ‘‘and’’ at 

16 the end; 

17 (2) in subparagraph (B), by striking ‘‘; and’’ at 

18 the end and inserting a period; and 

19 (3) by striking subparagraph (C). 

20 Subtitle B—Rural Electrification 

21 SEC. 6101. DEFINITION OF RURAL AREA. 

22 Section 13(3) of the Rural Electrification Act of 1936 

23 (7 U.S.C. 913(A)) is amended by striking subparagraph 

24 (A) and inserting the following: 
791 

†S 3240 ES

1 ‘‘(A) any area described in section 

2 3002(28)(A)(i) of the Consolidated Farm and 

3 Rural Development Act; and’’. 

4 SEC. 6102. GUARANTEES FOR BONDS AND NOTES ISSUED 

5 FOR ELECTRIFICATION OR TELEPHONE PUR6 POSES. 

7 Section 313A(f) of the Rural Electrification Act of 

8 1936 (7 U.S.C. 940c–1(f)) is amended by striking ‘‘2012’’ 

9 and inserting ‘‘2017’’. 

10 SEC. 6103. EXPANSION OF 911 ACCESS. 

11 Section 315(d) of the Rural Electrification Act of 

12 1936 (7 U.S.C. 940e(d)) is amended by striking ‘‘2012’’ 

13 and inserting ‘‘2017’’. 

14 SEC. 6104. ACCESS TO BROADBAND TELECOMMUNICATIONS 

15 SERVICES IN RURAL AREAS. 

16 Section 601 of the Rural Electrification Act of 1936 

17 (7 U.S.C. 950bb) is amended— 

18 (1) in subsection (a), by striking ‘‘loans and’’ 

19 and inserting ‘‘grants, loans, and’’; 

20 (2) in subsection (b), by striking paragraph (3) 

21 and inserting the following: 

22 ‘‘(3) RURAL AREA.—The term ‘rural area’ 

23 means any area described in section 3002 of the 

24 Consolidated Farm and Rural Development Act.’’; 

25 (3) in subsection (c)— 
792 

†S 3240 ES

1 (A) in the subsection heading, by striking 

2 ‘‘LOANS AND’’ and inserting ‘‘GRANTS, LOANS, 

3 AND’’; 

4 (B) in paragraph (1), by inserting ‘‘make 

5 grants and’’ after ‘‘Secretary shall’’; 

6 (C) by striking paragraph (2) and insert7 ing the following: 

8 ‘‘(2) PRIORITY.— 

9 ‘‘(A) IN GENERAL.—In making grants, 

10 loans, or loan guarantees under paragraph (1), 

11 the Secretary shall— 

12 ‘‘(i) establish not less than 2, and not 

13 more than 4, evaluation periods for each 

14 fiscal year to compare grant, loan, and 

15 loan guarantee applications and to 

16 prioritize grants, loans, and loan guaran17 tees to all or part of rural communities 

18 that do not have residential broadband 

19 service that meets the minimum acceptable 

20 level of broadband service established 

21 under subsection (e); 

22 ‘‘(ii) give the highest priority to appli23 cants that offer to provide broadband serv24 ice to the greatest proportion of unserved 

25 rural households or rural households that 
793 

†S 3240 ES

1 do not have residential broadband service 

2 that meets the minimum acceptable level of 

3 broadband service established under sub4 section (e), as— 

5 ‘‘(I) certified by the affected 

6 community, city, county, or designee; 

7 or 

8 ‘‘(II) demonstrated on— 

9 ‘‘(aa) the broadband map of 

10 the affected State if the map con11 tains address-level data; or 

12 ‘‘(bb) the National 

13 Broadband Map if address-level 

14 data is unavailable; and 

15 ‘‘(iii) provide equal consideration to 

16 all qualified applicants, including those 

17 that have not previously received grants, 

18 loans, or loan guarantees under paragraph 

19 (1). 

20 ‘‘(B) OTHER.—After giving priority to the 

21 applicants described in subparagraph (A), the 

22 Secretary shall then give priority to projects 

23 that serve rural communities— 

24 ‘‘(i) with a population of less than 

25 20,000 permanent residents; 
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†S 3240 ES

1 ‘‘(ii) experiencing outmigration; 

2 ‘‘(iii) with a high percentage of low-in3 come residents; and 

4 ‘‘(iv) that are isolated from other sig5 nificant population centers.’’; and 

6 (D) by adding at the end the following: 

7 ‘‘(3) GRANT AMOUNTS.— 

8 ‘‘(A) ELIGIBILITY.—To be eligible for a 

9 grant under this section, the project that is the 

10 subject of the grant shall be carried out in a 

11 rural area. 

12 ‘‘(B) MAXIMUM.—Except as provided in 

13 subparagraph (D), the amount of any grant 

14 made under this section shall not exceed 50 

15 percent of the development costs of the project 

16 for which the grant is provided. 

17 ‘‘(C) GRANT RATE.—The Secretary shall 

18 establish the grant rate for each project in ac19 cordance with regulations issued by the Sec20 retary that shall provide for a graduated scale 

21 of grant rates that establish higher rates for 

22 projects in communities that have— 

23 ‘‘(i) remote locations; 

24 ‘‘(ii) low community populations; 

25 ‘‘(iii) low income levels; 
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1 ‘‘(iv) developed the applications of the 

2 communities with the participation of com3 binations of stakeholders, including— 

4 ‘‘(I) State, local, and tribal gov5 ernments; 

6 ‘‘(II) nonprofit institutions; 

7 ‘‘(III) institutions of higher edu8 cation; 

9 ‘‘(IV) private entities; and 

10 ‘‘(V) philanthropic organizations; 

11 and 

12 ‘‘(v) targeted funding to provide the 

13 minimum acceptable level of broadband 

14 service established under subsection (e) in 

15 all or part of an unserved community that 

16 is below that minimum acceptable level of 

17 broadband service. 

18 ‘‘(D) SECRETARIAL AUTHORITY TO AD19 JUST.—The Secretary may make grants of up 

20 to 75 percent of the development costs of the 

21 project for which the grant is provided to an el22 igible entity if the Secretary determines that 

23 the project serves a remote or low income area 

24 that does not have access to broadband service 
796 

†S 3240 ES

1 from any provider of broadband service (includ2 ing the applicant).’’; 

3 (4) in subsection (d)— 

4 (A) in paragraph (1)(A)— 

5 (i) in the matter preceding clause (i), 

6 by striking ‘‘loan or’’ and inserting ‘‘grant, 

7 loan, or’’; 

8 (ii) by striking clause (i) and inserting 

9 the following: 

10 ‘‘(i) demonstrate the ability to fur11 nish, improve in order to meet the min12 imum acceptable level of broadband service 

13 established under subsection (e), or extend 

14 broadband service to all or part of an 

15 unserved rural area or an area below the 

16 minimum acceptable level of broadband 

17 service established under subsection (e);’’; 

18 (iii) in clause (ii), by striking ‘‘a loan 

19 application’’ and inserting ‘‘an applica20 tion’’; and 

21 (iv) in clause (iii)— 

22 (I) by striking ‘‘the loan applica23 tion’’ and inserting ‘‘the application’’; 

24 and 
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1 (II) by striking ‘‘proceeds from 

2 the loan made or guaranteed under 

3 this section are’’ and inserting ‘‘as4 sistance under this section is’’; 

5 (B) in paragraph (2)— 

6 (i) in subparagraph (A)— 

7 (I) in the matter preceding clause 

8 (i)— 

9 (aa) by striking ‘‘the pro10 ceeds of a loan made or guaran11 teed’’ and inserting ‘‘assistance’’; 

12 and 

13 (bb) by striking ‘‘for the 

14 loan or loan guarantee’’ and in15 serting ‘‘of the eligible entity’’; 

16 (II) in clause (i), by striking ‘‘is 

17 offered broadband service by not more 

18 than 1 incumbent service provider’’ 

19 and inserting ‘‘are unserved or have 

20 service levels below the minimum ac21 ceptable level of broadband service es22 tablished under subsection (e)’’; and 

23 (III) in clause (ii), by striking 

24 ‘‘3’’ and inserting ‘‘2’’; 
798 

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1 (ii) by striking subparagraph (B) and 

2 inserting the following: 

3 ‘‘(B) ADJUSTMENTS.— 

4 ‘‘(i) INCREASE.—The Secretary may 

5 increase the household percentage require6 ment under subparagraph (A)(i) if— 

7 ‘‘(I) more than 25 percent of the 

8 costs of the project are funded by 

9 grants made under this section; or 

10 ‘‘(II) the proposed service terri11 tory includes 1 or more communities 

12 with a population in excess of 20,000. 

13 ‘‘(ii) REDUCTION.—The Secretary 

14 may reduce the household percentage re15 quirement under subparagraph (A)(i)— 

16 ‘‘(I) to not less than 15 percent, 

17 if the proposed service territory does 

18 not have a population in excess of 

19 5,000 people; or 

20 ‘‘(II) to not less than 18 percent, 

21 if the proposed service territory does 

22 not have a population in excess of 

23 7,500 people.’’; and 

24 (iii) in subparagraph (C)— 
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1 (I) in the subparagraph heading, 

2 by striking ‘‘3’’ and inserting ‘‘2’’; and 

3 (II) in clause (i), by inserting 

4 ‘‘the minimum acceptable level of 

5 broadband service established under 

6 subsection (e) in’’ after ‘‘service to’’; 

7 (C) in paragraph (3)— 

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

9 ‘‘loan or’’ and inserting ‘‘grant, loan, or’’; 

10 and 

11 (ii) in subparagraph (B), by adding at 

12 the end the following: 

13 ‘‘(iii) INFORMATION.—Information 

14 submitted under this subparagraph shall 

15 be— 

16 ‘‘(I) certified by the affected 

17 community, city, county, or designee; 

18 and 

19 ‘‘(II) demonstrated on— 

20 ‘‘(aa) the broadband map of 

21 the affected State if the map con22 tains address-level data; or 

23 ‘‘(bb) the National 

24 Broadband Map if address-level 

25 data is unavailable.’’; 
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1 (D) in paragraph (4)— 

2 (i) by striking ‘‘Subject to paragraph 

3 (1),’’ and inserting the following: 

4 ‘‘(A) IN GENERAL.—Subject to paragraph 

5 (1) and subparagraph (B),’’; 

6 (ii) by striking ‘‘loan or’’ and insert7 ing ‘‘grant, loan, or’’; and 

8 (iii) by adding at the end the fol9 lowing: 

10 ‘‘(B) PILOT PROGRAMS.—The Secretary 

11 may carry out pilot programs in conjunction 

12 with interested entities described in subpara13 graph (A) (which may be in partnership with 

14 other entities, as determined appropriate by the 

15 Secretary) to address areas that are unserved 

16 or have service levels below the minimum ac17 ceptable level of broadband service established 

18 under subsection (e).’’; 

19 (E) in paragraph (5)— 

20 (i) in the matter preceding subpara21 graph (A), by striking ‘‘loan or’’ and in22 serting ‘‘grant, loan, or’’; and 

23 (ii) in subparagraph (C), by inserting 

24 ‘‘, and proportion relative to the service 

25 territory,’’ after ‘‘estimated number’’; 
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1 (F) in paragraph (6), by striking ‘‘loan or’’ 

2 and inserting ‘‘grant, loan, or’’; 

3 (G) in paragraph (7), by striking ‘‘a loan 

4 application’’ and inserting ‘‘an application’’; 

5 and 

6 (H) by adding at the end the following: 

7 ‘‘(8) TRANSPARENCY AND REPORTING.—The 

8 Secretary— 

9 ‘‘(A) shall require any entity receiving as10 sistance under this section to submit quarterly, 

11 in a format specified by the Secretary, a report 

12 that describes— 

13 ‘‘(i) the use by the entity of the assist14 ance, including new equipment and capac15 ity enhancements that support high-speed 

16 broadband access for educational institu17 tions, health care providers, and public 

18 safety service providers (including the esti19 mated number of end users who are cur20 rently using or forecasted to use the new 

21 or upgraded infrastructure); and 

22 ‘‘(ii) the progress towards fulfilling 

23 the objectives for which the assistance was 

24 granted, including— 
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†S 3240 ES

1 ‘‘(I) the number and location of 

2 residences and businesses that will re3 ceive new broadband service, existing 

4 network service improvements, and fa5 cility upgrades resulting from the 

6 Federal assistance; 

7 ‘‘(II) the speed of broadband 

8 service; 

9 ‘‘(III) the price of broadband 

10 service; 

11 ‘‘(IV) any changes in broadband 

12 service adoption rates, including new 

13 subscribers generated from demand14 side projects; and 

15 ‘‘(V) any other metrics the Sec16 retary determines to be appropriate; 

17 ‘‘(B) shall maintain a fully searchable 

18 database, accessible on the Internet at no cost 

19 to the public, that contains, at a minimum— 

20 ‘‘(i) a list of each entity that has ap21 plied for assistance under this section; 

22 ‘‘(ii) a description of each application, 

23 including the status of each application; 

24 ‘‘(iii) for each entity receiving assist25 ance under this section— 
803 

†S 3240 ES

1 ‘‘(I) the name of the entity; 

2 ‘‘(II) the type of assistance being 

3 received; 

4 ‘‘(III) the purpose for which the 

5 entity is receiving the assistance; and 

6 ‘‘(IV) each quarterly report sub7 mitted under subparagraph (A); and 

8 ‘‘(iv) such other information as is suf9 ficient to allow the public to understand 

10 and monitor assistance provided under this 

11 section; 

12 ‘‘(C) shall, in addition to other authority 

13 under applicable law, establish written proce14 dures for all broadband programs administered 

15 by the Secretary that, to the maximum extent 

16 practicable— 

17 ‘‘(i) recover funds from loan defaults; 

18 ‘‘(ii)(I) deobligate awards to grantees 

19 that demonstrate an insufficient level of 

20 performance (including failure to meet 

21 build-out requirements, service quality 

22 issues, or other metrics determined by the 

23 Secretary) or wasteful or fraudulent spend24 ing; and 
804 

†S 3240 ES

1 ‘‘(II) award those funds, on a com2 petitive basis, to new or existing applicants 

3 consistent with this section; and 

4 ‘‘(iii) consolidate and minimize overlap 

5 among the programs; 

6 ‘‘(D) with respect to an application for as7 sistance under this section, shall— 

8 ‘‘(i) promptly post on the website of 

9 the Rural Utility Service— 

10 ‘‘(I) an announcement that iden11 tifies— 

12 ‘‘(aa) each applicant; 

13 ‘‘(bb) the amount and type 

14 of support requested by each ap15 plicant; and 

16 ‘‘(II) a list of the census block 

17 groups or proposed service territory, 

18 in a manner specified by the Sec19 retary, that the applicant proposes to 

20 service; 

21 ‘‘(ii) provide not less than 15 days for 

22 broadband service providers to voluntarily 

23 submit information about the broadband 

24 services that the providers offer in the 

25 groups or tracts listed under clause (i)(II) 
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†S 3240 ES

1 so that the Secretary may assess whether 

2 the applications submitted meet the eligi3 bility requirements under this section; and 

4 ‘‘(iii) if no broadband service provider 

5 submits information under clause (ii), con6 sider the number of providers in the group 

7 or tract to be established by reference to— 

8 ‘‘(I) the most current National 

9 Broadband Map of the National Tele10 communications and Information Ad11 ministration; or 

12 ‘‘(II) any other data regarding 

13 the availability of broadband service 

14 that the Secretary may collect or ob15 tain through reasonable efforts; and 

16 ‘‘(E) may establish additional reporting 

17 and information requirements for any recipient 

18 of any assistance under this section so as to en19 sure compliance with this section.’’; 

20 (5) in subsection (e)— 

21 (A) by redesignating paragraph (2) as 

22 paragraph (3); and 

23 (B) by striking paragraph (1) and insert24 ing the following: 
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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

2 for purposes of this section, the minimum acceptable 

3 level of broadband service for a rural area shall be 

4 at least— 

5 ‘‘(A) a 4-Mbps downstream transmission 

6 capacity; and 

7 ‘‘(B) a 1-Mbps upstream transmission ca8 pacity. 

9 ‘‘(2) ADJUSTMENTS.— 

10 ‘‘(A) IN GENERAL.—At least once every 2 

11 years, the Secretary shall review, and may ad12 just, the minimum acceptable level of 

13 broadband service established under paragraph 

14 (1) to ensure that high quality, cost-effective 

15 broadband service is provided to rural areas 

16 over time. 

17 ‘‘(B) CONSIDERATIONS.—In making an 

18 adjustment to the minimum acceptable level of 

19 broadband service under subparagraph (A), the 

20 Secretary may consider establishing different 

21 transmission rates for fixed broadband service 

22 and mobile broadband service.’’; 

23 (6) in subsection (f), by striking ‘‘make a loan 

24 or loan guarantee’’ and inserting ‘‘provide assist25 ance’’; 
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1 (7) in subsection (g), by striking paragraph (2) 

2 and inserting the following: 

3 ‘‘(2) TERMS.—In determining the term and 

4 conditions of a loan or loan guarantee, the Secretary 

5 may— 

6 ‘‘(A) consider whether the recipient would 

7 be serving an area that is unserved; and 

8 ‘‘(B) if the Secretary makes a determina9 tion in the affirmative under subparagraph (A), 

10 establish a limited initial deferral period or 

11 comparable terms necessary to achieve the fi12 nancial feasibility and long-term sustainability 

13 of the project.’’; 

14 (8) in subsection (j)— 

15 (A) in the matter preceding paragraph (1), 

16 by striking ‘‘loan and loan guarantee’’; 

17 (B) in paragraph (1)— 

18 (i) by inserting ‘‘grants and’’ after 

19 ‘‘number of’’; and 

20 (ii) by inserting ‘‘, including any loan 

21 terms or conditions for which the Secretary 

22 provided additional assistance to unserved 

23 areas’’ before the semicolon at the end; 

24 (C) in paragraph (2)— 
808 

†S 3240 ES

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

2 ‘‘loan’’; and 

3 (ii) in subparagraph (B), by striking 

4 ‘‘loans and’’ and inserting ‘‘grants, loans, 

5 and’’; 

6 (D) in paragraph (3), by striking ‘‘loan’’; 

7 (E) in paragraph (5), by striking ‘‘and’’ at 

8 the end; 

9 (F) in paragraph (6), by striking the pe10 riod at the end and inserting ‘‘; and’’; and 

11 (G) by adding at the end the following: 

12 ‘‘(7) the overall progress towards fulfilling the 

13 goal of improving the quality of rural life by expand14 ing rural broadband access, as demonstrated by 

15 metrics, including— 

16 ‘‘(A) the number of residences and busi17 nesses receiving new broadband services; 

18 ‘‘(B) network improvements, including fa19 cility upgrades and equipment purchases; 

20 ‘‘(C) average broadband speeds and prices 

21 on a local and statewide basis; 

22 ‘‘(D) any changes in broadband adoption 

23 rates; and 

24 ‘‘(E) any specific activities that increased 

25 high speed broadband access for educational in-
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1 stitutions, health care providers. and public 

2 safety service providers.’’; and 

3 (9) by redesignating subsections (k) and (l) as 

4 subsections (l) and (m), respectively; 

5 (10) by inserting after subsection (j) the fol6 lowing: 

7 ‘‘(k) BROADBAND BUILDOUT DATA.— 

8 ‘‘(1) IN GENERAL.—As a condition of receiving 

9 a grant, loan, or loan guarantee under this section, 

10 a recipient of assistance shall provide to the Sec11 retary address-level broadband buildout data that in12 dicates the location of new broadband service that is 

13 being provided or upgraded within the service terri14 tory supported by the grant, loan, or loan guar15 antee— 

16 ‘‘(A) for purposes of inclusion in the semi17 annual updates to the National Broadband Map 

18 that is managed by the National Telecommuni19 cations and Information Administration (re20 ferred to in this subsection as the ‘Administra21 tion’); and 

22 ‘‘(B) not later than 30 days after the ear23 lier of— 
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1 ‘‘(i) the date of completion of any 

2 project milestone established by the Sec3 retary; or 

4 ‘‘(ii) the date of completion of the 

5 project. 

6 ‘‘(2) ADDRESS-LEVEL DATA.—Effective begin7 ning on the date the Administration receives data 

8 described in paragraph (1), the Administration shall 

9 use only address-level broadband buildout data for 

10 the National Broadband Map. 

11 ‘‘(3) CORRECTIONS.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 submit to the Administration any correction to 

14 the National Broadband Map that is based on 

15 the actual level of broadband coverage within 

16 the rural area, including any requests for a cor17 rection from an elected or economic develop18 ment official. 

19 ‘‘(B) INCORPORATION.—Not later than 30 

20 days after the date on which the Administration 

21 receives a correction submitted under subpara22 graph (A), the Administration shall incorporate 

23 the correction into the National Broadband 

24 Map. 
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1 ‘‘(C) USE.—If the Secretary has submitted 

2 a correction to the Administration under sub3 paragraph (A), but the National Broadband 

4 Map has not been updated to reflect the correct 

5 by the date on which the Secretary is making 

6 a grant or loan award decision under this sec7 tion, the Secretary may use the correction sub8 mitted under that subparagraph for purposes of 

9 make the grant or loan award decision.’’; 

10 (11) subsection (l) (as redesignated by para11 graph (9))— 

12 (A) in paragraph (1)— 

13 (i) by striking ‘‘$25,000,000’’ and in14 serting ‘‘$50,000,000’’; and 

15 (ii) by striking ‘‘2012’’ and inserting 

16 ‘‘2017’’; and 

17 (B) in paragraph (2)(A)— 

18 (i) in clause (i), by striking ‘‘and’’ at 

19 the end; 

20 (ii) in clause (ii), by striking the pe21 riod at the end and inserting ‘‘; and’’; and 

22 (iii) by adding at the end the fol23 lowing: 

24 ‘‘(iii) set aside at least 1 percent to be 

25 used for— 
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1 ‘‘(I) conducting oversight under 

2 this section; and 

3 ‘‘(II) implementing accountability 

4 measures and related activities au5 thorized under this section.’’; and 

6 (12) in subsection (m) (as redesignated by 

7 paragraph (9))— 

8 (A) by striking ‘‘loan or’’ and inserting 

9 ‘‘grant, loan, or’’; and 

10 (B) by striking ‘‘2012’’ and inserting 

11 ‘‘2017’’. 

12 Subtitle C—Miscellaneous 

13 SEC. 6201. DISTANCE LEARNING AND TELEMEDICINE. 

14 (a) AUTHORIZATION OF APPROPRIATIONS.—Section 

15 2335A of the Food, Agriculture, Conservation, and Trade 

16 Act of 1990 (7 U.S.C. 950aaa–5) is amended by striking 

17 ‘‘2012’’ and inserting ‘‘2017’’. 

18 (b) CONFORMING AMENDMENT.—Section 1(b) of 

19 Public Law 102–551 (7 U.S.C. 950aaa note) is amended 

20 by striking ‘‘2012’’ and inserting ‘‘2017’’. 

21 SEC. 6202. RURAL ENERGY SAVINGS PROGRAM. 

22 Subtitle E of title VI of the Farm Security and Rural 

23 Investment Act of 2002 (Public Law 107–171; 116 Stat. 

24 424) is amended by adding at the end the following: 
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†S 3240 ES

1 ‘‘SEC. 6407. RURAL ENERGY SAVINGS PROGRAM. 

2 ‘‘(a) PURPOSE.—The purpose of this section is to cre3 ate jobs, promote rural development, and help rural fami4 lies and small businesses achieve cost savings by providing 

5 loans to qualified consumers to implement durable cost6 effective energy efficiency measures. 

7 ‘‘(b) DEFINITIONS.—In this section: 

8 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en9 tity’ means— 

10 ‘‘(A) any public power district, public util11 ity district, or similar entity, or any electric co12 operative described in section 501(c)(12) or 

13 1381(a)(2) of the Internal Revenue Code of 

14 1986, that borrowed and repaid, prepaid, or is 

15 paying an electric loan made or guaranteed by 

16 the Rural Utilities Service (or any predecessor 

17 agency); 

18 ‘‘(B) any entity primarily owned or con19 trolled by 1 or more entities described in sub20 paragraph (A); or 

21 ‘‘(C) any other entity that is an eligible 

22 borrower of the Rural Utility Service, as deter23 mined under section 1710.101 of title 7, Code 

24 of Federal Regulations (or a successor regula25 tion). 
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†S 3240 ES

1 ‘‘(2) ENERGY EFFICIENCY MEASURES.—The 

2 term ‘energy efficiency measures’ means, for or at 

3 property served by an eligible entity, structural im4 provements and investments in cost-effective, com5 mercial technologies to increase energy efficiency. 

6 ‘‘(3) QUALIFIED CONSUMER.—The term ‘quali7 fied consumer’ means a consumer served by an eligi8 ble entity that has the ability to repay a loan made 

9 under subsection (d), as determined by the eligible 

10 entity. 

11 ‘‘(4) SECRETARY.—The term ‘Secretary’ means 

12 the Secretary of Agriculture, acting through the Ad13 ministrator of the Rural Utilities Service. 

14 ‘‘(c) LOANS TO ELIGIBLE ENTITIES.— 

15 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

16 the Secretary shall make loans to eligible entities 

17 that agree to use the loan funds to make loans to 

18 qualified consumers for the purpose of implementing 

19 energy efficiency measures. 

20 ‘‘(2) REQUIREMENTS.— 

21 ‘‘(A) IN GENERAL.—As a condition of re22 ceiving a loan under this subsection, an eligible 

23 entity shall— 

24 ‘‘(i) establish a list of energy effi25 ciency measures that is expected to de-
815 

†S 3240 ES

1 crease energy use or costs of qualified con2 sumers; 

3 ‘‘(ii) prepare an implementation plan 

4 for use of the loan funds, including use of 

5 any interest to be received pursuant to 

6 subsection (d)(1)(A); 

7 ‘‘(iii) provide for appropriate measure8 ment and verification to ensure— 

9 ‘‘(I) the effectiveness of the en10 ergy efficiency loans made by the eli11 gible entity; and 

12 ‘‘(II) that there is no conflict of 

13 interest in carrying out this section; 

14 and 

15 ‘‘(iv) demonstrate expertise in effec16 tive use of energy efficiency measures at 

17 an appropriate scale. 

18 ‘‘(B) REVISION OF LIST OF ENERGY EFFI19 CIENCY MEASURES.—Subject to the approval of 

20 the Secretary, an eligible entity may update the 

21 list required under subparagraph (A)(i) to ac22 count for newly available efficiency technologies. 

23 ‘‘(C) EXISTING ENERGY EFFICIENCY PRO24 GRAMS.—An eligible entity that, at any time be25 fore the date that is 60 days after the date of 
816 

†S 3240 ES

1 enactment of this section, has established an 

2 energy efficiency program for qualified con3 sumers may use an existing list of energy effi4 ciency measures, implementation plan, or meas5 urement and verification system of that pro6 gram to satisfy the requirements of subpara7 graph (A) if the Secretary determines the list, 

8 plan, or systems are consistent with the pur9 poses of this section. 

10 ‘‘(3) NO INTEREST.—A loan under this sub11 section shall bear no interest. 

12 ‘‘(4) REPAYMENT.—With respect to a loan 

13 under paragraph (1)— 

14 ‘‘(A) the term shall not exceed 20 years 

15 from the date on which the loan is closed; and 

16 ‘‘(B) except as provided in paragraph (6), 

17 the repayment of each advance shall be amor18 tized for a period not to exceed 10 years. 

19 ‘‘(5) AMOUNT OF ADVANCES.—Any advance of 

20 loan funds to an eligible entity in any single year 

21 shall not exceed 50 percent of the approved loan 

22 amount. 

23 ‘‘(6) SPECIAL ADVANCE FOR START-UP ACTIVI24 TIES.— 
817 

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1 ‘‘(A) IN GENERAL.—In order to assist an 

2 eligible entity in defraying the appropriate 

3 start-up costs (as determined by the Secretary) 

4 of establishing new programs or modifying ex5 isting programs to carry out subsection (d), the 

6 Secretary shall allow an eligible entity to re7 quest a special advance. 

8 ‘‘(B) AMOUNT.—No eligible entity may re9 ceive a special advance under this paragraph 

10 for an amount that is greater than 4 percent of 

11 the loan amount received by the eligible entity 

12 under paragraph (1). 

13 ‘‘(C) REPAYMENT.—Repayment of the spe14 cial advance— 

15 ‘‘(i) shall be required during the 10- 

16 year period beginning on the date on which 

17 the special advance is made; and 

18 ‘‘(ii) at the election of the eligible en19 tity, may be deferred to the end of the 10- 

20 year period. 

21 ‘‘(7) LIMITATION.—All special advances shall be 

22 made under a loan described in paragraph (1) dur23 ing the first 10 years of the term of the loan. 

24 ‘‘(d) LOANS TO QUALIFIED CONSUMERS.— 
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†S 3240 ES

1 ‘‘(1) TERMS OF LOANS.—Loans made by an eli2 gible entity to qualified consumers using loan funds 

3 provided by the Secretary under subsection (c)— 

4 ‘‘(A) may bear interest, not to exceed 3 

5 percent, to be used for purposes that include— 

6 ‘‘(i) to establish a loan loss reserve; 

7 and 

8 ‘‘(ii) to offset personnel and program 

9 costs of eligible entities to provide the 

10 loans; 

11 ‘‘(B) shall finance energy efficiency meas12 ures for the purpose of decreasing energy usage 

13 or costs of the qualified consumer by an 

14 amount that ensures, to the maximum extent 

15 practicable, that a loan term of not more than 

16 10 years will not pose an undue financial bur17 den on the qualified consumer, as determined 

18 by the eligible entity; 

19 ‘‘(C) shall not be used to fund purchases 

20 of, or modifications to, personal property unless 

21 the personal property is or becomes attached to 

22 real property (including a manufactured home) 

23 as a fixture; 

24 ‘‘(D) shall be repaid through charges 

25 added to the electric bill for the property for, or 
819 

†S 3240 ES

1 at which, energy efficiency measures are or will 

2 be implemented, on the condition that this re3 quirement does not prohibit— 

4 ‘‘(i) the voluntary prepayment of a 

5 loan by the owner of the property; or 

6 ‘‘(ii) the use of any additional repay7 ment mechanisms that are— 

8 ‘‘(I) demonstrated to have appro9 priate risk mitigation features, as de10 termined by the eligible entity; or 

11 ‘‘(II) required if the qualified 

12 consumer is no longer a customer of 

13 the eligible entity; and 

14 ‘‘(E) shall require an energy audit by an 

15 eligible entity to determine the impact of pro16 posed energy efficiency measures on the energy 

17 costs and consumption of the qualified con18 sumer. 

19 ‘‘(2) CONTRACTORS.—In addition to any other 

20 qualified general contractor, eligible entities may 

21 serve as general contractors. 

22 ‘‘(e) CONTRACT FOR MEASUREMENT AND

23 VERIFICATION, TRAINING, AND TECHNICAL ASSIST24 ANCE.— 
820 

†S 3240 ES

1 ‘‘(1) IN GENERAL.—Not later than 90 days 

2 after the date of enactment of this section, the Sec3 retary— 

4 ‘‘(A) shall establish a plan for measure5 ment and verification, training, and technical 

6 assistance of the program; and 

7 ‘‘(B) may enter into 1 or more contracts 

8 with a qualified entity for the purposes of— 

9 ‘‘(i) providing measurement and 

10 verification activities; and 

11 ‘‘(ii) developing a program to provide 

12 technical assistance and training to the 

13 employees of eligible entities to carry out 

14 this section. 

15 ‘‘(2) USE OF SUBCONTRACTORS AUTHOR16 IZED.—A qualified entity that enters into a contract 

17 under paragraph (1) may use subcontractors to as18 sist the qualified entity in carrying out the contract. 

19 ‘‘(f) FAST START DEMONSTRATION PROJECTS.— 

20 ‘‘(1) IN GENERAL.—The Secretary shall offer to 

21 enter into agreements with eligible entities (or 

22 groups of eligible entities) that have energy effi23 ciency programs described in subsection (c)(2)(C) to 

24 establish an energy efficiency loan demonstration 

25 projects consistent with the purposes of this section. 
821 

†S 3240 ES

1 ‘‘(2) EVALUATION CRITERIA.—In determining 

2 which eligible entities to award loans under this sec3 tion, the Secretary shall take into consideration eligi4 ble entities that— 

5 ‘‘(A) implement approaches to energy au6 dits and investments in energy efficiency meas7 ures that yield measurable and predictable sav8 ings; 

9 ‘‘(B) use measurement and verification 

10 processes to determine the effectiveness of en11 ergy efficiency loans made by eligible entities; 

12 ‘‘(C) include training for employees of eli13 gible entities, including any contractors of such 

14 entities, to implement or oversee the activities 

15 described in subparagraphs (A) and (B); 

16 ‘‘(D) provide for the participation of a ma17 jority of eligible entities in a State; 

18 ‘‘(E) reduce the need for generating capac19 ity; 

20 ‘‘(F) provide efficiency loans to— 

21 ‘‘(i) in the case of a single eligible en22 tity, not fewer than 20,000 consumers; or 

23 ‘‘(ii) in the case of a group of eligible 

24 entities, not fewer than 80,000 consumers; 

25 and 
822 

†S 3240 ES

1 ‘‘(G) serve areas in which, as determined 

2 by the Secretary, a large percentage of con3 sumers reside— 

4 ‘‘(i) in manufactured homes; or 

5 ‘‘(ii) in housing units that are more 

6 than 50 years old. 

7 ‘‘(3) DEADLINE FOR IMPLEMENTATION.—To 

8 the maximum extent practicable, the Secretary shall 

9 enter into agreements described in paragraph (1) by 

10 not later than 90 days after the date of enactment 

11 of this section. 

12 ‘‘(4) EFFECT ON AVAILABILITY OF LOANS NA13 TIONALLY.—Nothing in this subsection shall delay 

14 the availability of loans to eligible entities on a na15 tional basis beginning not later than 180 days after 

16 the date of enactment of this section. 

17 ‘‘(5) ADDITIONAL DEMONSTRATION PROJECT

18 AUTHORITY.— 

19 ‘‘(A) IN GENERAL.—The Secretary may 

20 conduct demonstration projects in addition to 

21 the project required by paragraph (1). 

22 ‘‘(B) INAPPLICABILITY OF CERTAIN CRI23 TERIA.—The additional demonstration projects 

24 may be carried out without regard to subpara25 graphs (D), (F), or (G) of paragraph (2). 
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1 ‘‘(g) ADDITIONAL AUTHORITY.—The authority pro2 vided in this section is in addition to any other authority 

3 of the Secretary to offer loans under any other law. 

4 ‘‘(h) EFFECTIVE PERIOD.—Subject to the availability 

5 of funds and except as otherwise provided in this section, 

6 the loans and other expenditures required to be made 

7 under this section shall be available until expended, with 

8 the Secretary authorized to make new loans as loans are 

9 repaid. 

10 ‘‘(i) REGULATIONS.— 

11 ‘‘(1) IN GENERAL.—Except as otherwise pro12 vided in this subsection, not later than 180 days 

13 after the date of enactment of this section, the Sec14 retary shall promulgate such regulations as are nec15 essary to implement this section. 

16 ‘‘(2) PROCEDURE.—The promulgation of the 

17 regulations and administration of this section shall 

18 be made without regard to— 

19 ‘‘(A) the Statement of Policy of the Sec20 retary of Agriculture effective July 24, 1971 

21 (36 Fed. Reg. 13804), relating to notices of 

22 proposed rulemaking and public participation in 

23 rulemaking; and 
824 

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1 ‘‘(B) chapter 35 of title 44, United States 

2 Code (commonly known as the ‘Paperwork Re3 duction Act’). 

4 ‘‘(3) CONGRESSIONAL REVIEW OF AGENCY

5 RULEMAKING.—In carrying out this section, the Sec6 retary shall use the authority provided under section 

7 808 of title 5, United States Code. 

8 ‘‘(4) INTERIM REGULATIONS.—Notwithstanding 

9 paragraphs (1) and (2), to the extent regulations are 

10 necessary to carry out any provision of this section, 

11 the Secretary shall implement such regulations 

12 through the promulgation of an interim rule.’’. 

13 SEC. 6203. FUNDING OF PENDING RURAL DEVELOPMENT 

14 LOAN AND GRANT APPLICATIONS. 

15 (a) IN GENERAL.—The Secretary shall use funds 

16 made available under subsection (b) to provide funds for 

17 applications that are pending on the date of enactment 

18 of this Act in accordance with the terms and conditions 

19 of section 6029 of the Food, Conservation, and Energy 

20 Act of 2008 (Public Law 110–246; 122 Stat. 1955). 

21 (b) FUNDING.—Notwithstanding any other provision 

22 of law, beginning in fiscal year 2014, of the funds of the 

23 Commodity Credit Corporation, the Secretary shall use to 

24 carry out this section $50,000,000, to remain available 

25 until expended. 
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1 SEC. 6204. STUDY OF RURAL TRANSPORTATION ISSUES. 

2 (a) IN GENERAL.—The Secretary and the Secretary 

3 of Transportation shall jointly conduct a study of trans4 portation issues regarding the movement of agricultural 

5 products, domestically produced renewable fuels, and do6 mestically produced resources for the production of elec7 tricity for rural areas of the United States, and economic 

8 development in those areas. 

9 (b) INCLUSIONS.—The study shall include an exam10 ination of— 

11 (1) the importance of freight transportation, in12 cluding rail, truck, and barge, to— 

13 (A) the delivery of equipment, seed, fer14 tilizer, and other products important to the de15 velopment of agricultural commodities and 

16 products; 

17 (B) the movement of agricultural commod18 ities and products to market; 

19 (C) the delivery of ethanol and other re20 newable fuels; 

21 (D) the delivery of domestically produced 

22 resources for use in the generation of electricity 

23 for rural areas; 

24 (E) the location of grain elevators, ethanol 

25 plants, and other facilities; 
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1 (F) the development of manufacturing fa2 cilities in rural areas; and 

3 (G) the vitality and economic development 

4 of rural communities; 

5 (2) the sufficiency in rural areas of transpor6 tation capacity, the sufficiency of competition in the 

7 transportation system, the reliability of transpor8 tation services, and the reasonableness of transpor9 tation rates; 

10 (3) the sufficiency of facility investment in rural 

11 areas necessary for efficient and cost-effective trans12 portation; and 

13 (4) the accessibility to shippers in rural areas 

14 of Federal processes for the resolution of grievances 

15 arising within various transportation modes. 

16 (c) REPORT TO CONGRESS.—Not later than 1 year 

17 after the date of enactment of this Act, the Secretary and 

18 the Secretary of Transportation shall submit a report to 

19 Congress that contains the results of the study required 

20 under subsection (a). 

21 (d) PERIODIC UPDATES.—The Secretary and the 

22 Secretary of Transportation shall publish triennially an 

23 updated version of the study described in subsection (a). 
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1 SEC. 6205. AGRICULTURAL TRANSPORTATION POLICY. 

2 Section 203 of the Agricultural Marketing Act of 

3 1946 (7 U.S.C. 1622) is amended by striking subsection 

4 (j) and inserting the following: 

5 ‘‘(j) POLICY DEVELOPMENT PROCEEDINGS.—The 

6 Secretary shall participate on behalf of the interests of ag7 riculture and rural America in all policy development pro8 ceedings or other proceedings of the Surface Transpor9 tation Board that may establish freight rail transportation 

10 policy affecting agriculture and rural America.’’. 

11 TITLE VII—RESEARCH, EXTEN12 SION, AND RELATED MAT13 TERS 

14 Subtitle A—National Agricultural 

15 Research, Extension, and Teach16 ing Policy Act of 1977 

17 SEC. 7101. NATIONAL AGRICULTURAL RESEARCH, EXTEN18 SION, EDUCATION, AND ECONOMICS ADVI19 SORY BOARD. 

20 (a) AUTHORIZATION OF APPROPRIATIONS.—Section 

21 1408(h) of the National Agricultural Research, Extension, 

22 and Teaching Policy Act of 1977 (7 U.S.C. 3123(h)) is 

23 amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 

24 (b) DUTIES OF NATIONAL AGRICULTURAL RE25 SEARCH, EXTENSION, EDUCATION, AND ECONOMICS AD26 VISORY BOARD.—Section 1408(c) of the National Agricul-
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1 tural Research, Extension, and Teaching Policy Act of 

2 1977 (7 U.S.C. 3123(c)) is amended— 

3 (1) in paragraph (3), by striking ‘‘and’’ at the 

4 end; 

5 (2) in paragraph (4)(C), by striking the period 

6 at the end and inserting ‘‘; and’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(5) consult with industry groups on agricul9 tural research, extension, education, and economics, 

10 and make recommendations to the Secretary based 

11 on that consultation.’’. 

12 SEC. 7102. SPECIALTY CROP COMMITTEE. 

13 Section 1408A of the National Agricultural Research, 

14 Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

15 3123a) is amended— 

16 (1) in subsection (b)— 

17 (A) by striking ‘‘Individuals’’ and inserting 

18 the following: 

19 ‘‘(1) ELIGIBILITY.—Individuals’’; 

20 (B) by striking ‘‘Members’’ and inserting 

21 the following: 

22 ‘‘(2) SERVICE.—Members’’; and 

23 (C) by adding at the end the following: 
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1 ‘‘(3) DIVERSITY.—Membership of the specialty 

2 crops committee shall reflect diversity in the spe3 cialty crops represented.’’; 

4 (2) in subsection (c), by adding at the end the 

5 following: 

6 ‘‘(6) Analysis of alignment of specialty crop 

7 committee recommendations with specialty crop re8 search initiative grants awarded under section 

9 412(d) of the Agricultural Research, Extension, and 

10 Education Reform Act of 1998 (7 U.S.C. 7632).’’; 

11 (3) by redesignating subsections (d) and (e) as 

12 subsections (e) and (f), respectively; 

13 (4) by inserting after subsection (c) the fol14 lowing: 

15 ‘‘(d) CONSULTATION WITH SPECIALTY CROP INDUS16 TRY.—In studying the scope and effectiveness of programs 

17 under subsection (a), the specialty crops committee shall 

18 consult on an ongoing basis with diverse sectors of the 

19 specialty crop industry.’’; and 

20 (5) in subsection (f) (as redesignated by para21 graph (3)), by striking ‘‘subsection (d)’’ and insert22 ing ‘‘subsection (e)’’. 
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1 SEC. 7103. VETERINARY SERVICES GRANT PROGRAM. 

2 The National Agricultural Research, Extension, and 

3 Teaching Policy Act of 1977 is amended by inserting after 

4 section 1415A (7 U.S.C. 3151a) the following: 

5 ‘‘SEC. 1415B. VETERINARY SERVICES GRANT PROGRAM. 

6 ‘‘(a) DEFINITIONS.—In this section: 

7 ‘‘(1) QUALIFIED ENTITY.—The term ‘qualified 

8 entity’ means— 

9 ‘‘(A) a for-profit or nonprofit entity located 

10 in the United States that operates a veterinary 

11 clinic providing veterinary services— 

12 ‘‘(i) in a rural area, as defined in sec13 tion 343(a) of the Consolidated Farm and 

14 Rural Development Act (7 U.S.C. 

15 1991(a)); and 

16 ‘‘(ii) in response to a veterinarian 

17 shortage situation; 

18 ‘‘(B) a State, national, allied, or regional 

19 veterinary organization or specialty board rec20 ognized by the American Veterinary Medical 

21 Association; 

22 ‘‘(C) a college or school of veterinary medi23 cine accredited by the American Veterinary 

24 Medical Association; 

25 ‘‘(D) a university research foundation or 

26 veterinary medical foundation; 
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1 ‘‘(E) a department of veterinary science or 

2 department of comparative medicine accredited 

3 by the Department of Education; 

4 ‘‘(F) a State agricultural experiment sta5 tion; and 

6 ‘‘(G) a State, local, or tribal government 

7 agency. 

8 ‘‘(2) VETERINARIAN SHORTAGE SITUATION.— 

9 The term ‘veterinarian shortage situation’ means a 

10 veterinarian shortage situation determined by the 

11 Secretary under section 1415A(b). 

12 ‘‘(b) ESTABLISHMENT OF PROGRAM.— 

13 ‘‘(1) COMPETITIVE GRANTS.—The Secretary 

14 shall carry out a program to make competitive 

15 grants to qualified entities that carry out programs 

16 or activities described in paragraph (2) for the pur17 pose of developing, implementing, and sustaining 

18 veterinary services. 

19 ‘‘(2) ELIGIBILITY REQUIREMENTS.—To be eligi20 ble to receive a grant described in paragraph (1), a 

21 qualified entity shall carry out programs or activities 

22 that the Secretary determines will— 

23 ‘‘(A) substantially relieve veterinarian 

24 shortage situations; 
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1 ‘‘(B) support or facilitate private veteri2 nary practices engaged in public health activi3 ties; or 

4 ‘‘(C) support or facilitate the practices of 

5 veterinarians who are participating in or have 

6 successfully completed a service requirement 

7 under section 1415A(a)(2). 

8 ‘‘(c) AWARD PROCESSES AND PREFERENCES.— 

9 ‘‘(1) APPLICATION, EVALUATION, AND INPUT

10 PROCESSES.—In administering the grant program 

11 under this section, the Secretary shall— 

12 ‘‘(A) use an appropriate application and 

13 evaluation process, as determined by the Sec14 retary; and 

15 ‘‘(B) seek the input of interested persons. 

16 ‘‘(2) GRANT PREFERENCES.—In selecting re17 cipients of grants to be used for any of the purposes 

18 described in paragraphs (2) through (6) of sub19 section (d), the Secretary shall give a preference to 

20 qualified entities that provide documentation of co21 ordination with other qualified entities, with respect 

22 to any such purpose. 

23 ‘‘(3) ADDITIONAL PREFERENCES.—In awarding 

24 grants under this section, the Secretary may develop 

25 additional preferences by taking into account the 
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1 amount of funds available for grants and the pur2 poses for which the grant funds will be used. 

3 ‘‘(4) APPLICABILITY OF OTHER PROVISIONS.— 

4 Sections 1413B, 1462(a), 1469(a)(3), 1469(c), and 

5 1470 apply to the administration of the grant pro6 gram under this section. 

7 ‘‘(d) USE OF GRANTS TO RELIEVE VETERINARIAN

8 SHORTAGE SITUATIONS AND SUPPORT VETERINARY

9 SERVICES.—A qualified entity may use funds provided by 

10 grants under this section to relieve veterinarian shortage 

11 situations and support veterinary services for the following 

12 purposes: 

13 ‘‘(1) To assist veterinarians with establishing or 

14 expanding practices for the purpose of— 

15 ‘‘(A) equipping veterinary offices; 

16 ‘‘(B) sharing in the reasonable overhead 

17 costs of the practices, as determined by the Sec18 retary; or 

19 ‘‘(C) establishing mobile veterinary facili20 ties in which a portion of the facilities will ad21 dress education or extension needs. 

22 ‘‘(2) To promote recruitment (including for pro23 grams in secondary schools), placement, and reten24 tion of veterinarians, veterinary technicians, stu-
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1 dents of veterinary medicine, and students of veteri2 nary technology. 

3 ‘‘(3) To allow veterinary students, veterinary in4 terns, externs, fellows, and residents, and veterinary 

5 technician students to cover expenses (other than 

6 the types of expenses described in 1415A(c)(5)) to 

7 attend training programs in food safety or food ani8 mal medicine. 

9 ‘‘(4) To establish or expand accredited veteri10 nary education programs (including faculty recruit11 ment and retention), veterinary residency and fellow12 ship programs, or veterinary internship and 

13 externship programs carried out in coordination with 

14 accredited colleges of veterinary medicine. 

15 ‘‘(5) To assess veterinarian shortage situations 

16 and the preparation of applications submitted to the 

17 Secretary for designation as a veterinarian shortage 

18 situation under section 1415A(b). 

19 ‘‘(6) To provide continuing education and ex20 tension, including veterinary telemedicine and other 

21 distance-based education, for veterinarians, veteri22 nary technicians, and other health professionals 

23 needed to strengthen veterinary programs and en24 hance food safety. 
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1 ‘‘(e) SPECIAL REQUIREMENTS FOR CERTAIN

2 GRANTS.— 

3 ‘‘(1) TERMS OF SERVICE REQUIREMENTS.— 

4 ‘‘(A) IN GENERAL.—Grants provided 

5 under this section for the purpose specified in 

6 subsection (d)(1) shall be subject to an agree7 ment between the Secretary and the grant re8 cipient that includes a required term of service 

9 for the recipient, as established by the Sec10 retary. 

11 ‘‘(B) CONSIDERATIONS.—In establishing a 

12 term of service under subparagraph (A), the 

13 Secretary shall consider only— 

14 ‘‘(i) the amount of the grant awarded; 

15 and 

16 ‘‘(ii) the specific purpose of the grant. 

17 ‘‘(2) BREACH REMEDIES.— 

18 ‘‘(A) IN GENERAL.—An agreement under 

19 paragraph (1) shall provide remedies for any 

20 breach of the agreement by the grant recipient, 

21 including repayment or partial repayment of the 

22 grant funds, with interest. 

23 ‘‘(B) WAIVER.—The Secretary may grant 

24 a wavier of the repayment obligation for breach 

25 of contract if the Secretary determines that the 
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1 grant recipient demonstrates extreme hardship 

2 or extreme need. 

3 ‘‘(C) TREATMENT OF AMOUNTS RECOV4 ERED.—Funds recovered under this paragraph 

5 shall— 

6 ‘‘(i) be credited to the account avail7 able to carry out this section; and 

8 ‘‘(ii) remain available until expended. 

9 ‘‘(f) COST-SHARING REQUIREMENTS.— 

10 ‘‘(1) RECIPIENT SHARE.—Subject to paragraph 

11 (2), to be eligible to receive a grant under this sec12 tion, a qualified entity shall provide matching non13 Federal funds, either in cash or in-kind support, in 

14 an amount equal to not less than 25 percent of the 

15 Federal funds provided by the grant. 

16 ‘‘(2) WAIVER.—The Secretary may establish, by 

17 regulation, conditions under which the cost-sharing 

18 requirements of paragraph (1) may be reduced or 

19 waived. 

20 ‘‘(g) PROHIBITION ON USE OF GRANT FUNDS FOR

21 CONSTRUCTION.—Funds made available for grants under 

22 this section may not be used— 

23 ‘‘(1) to construct a new building or facility; or 
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1 ‘‘(2) to acquire, expand, remodel, or alter an ex2 isting building or facility, including site grading and 

3 improvement and architect fees. 

4 ‘‘(h) REGULATIONS.—Not later than 1 year after the 

5 date of enactment of this section, the Secretary shall pro6 mulgate regulations to carry out this section. 

7 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is 

8 authorized to be appropriated to the Secretary to carry 

9 out this section $10,000,000 for fiscal year 2013 and each 

10 fiscal year thereafter, to remain available until ex11 pended.’’. 

12 SEC. 7104. GRANTS AND FELLOWSHIPS FOR FOOD AND AG13 RICULTURE SCIENCES EDUCATION. 

14 Section 1417(m) of the National Agricultural Re15 search, Extension, and Teaching Policy Act of 1977 (7 

16 U.S.C. 3152(m)) is amended by striking ‘‘section 

17 $60,000,000’’ and all that follows and inserting the fol18 lowing: ‘‘section— 

19 ‘‘(1) $60,000,000 for each of fiscal years 1990 

20 through 2012; and 

21 ‘‘(2) $40,000,000 for each of fiscal years 2013 

22 through 2017.’’. 
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1 SEC. 7105. AGRICULTURAL AND FOOD POLICY RESEARCH 

2 CENTERS. 

3 Section 1419A of the National Agricultural Research, 

4 Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

5 3155) is amended— 

6 (1) in the section heading, by inserting ‘‘AGRI7 CULTURAL AND FOOD’’ before ‘‘POLICY’’; 

8 (2) in subsection (a), in the matter preceding 

9 paragraph (1)— 

10 (A) by striking ‘‘Secretary may’’ and in11 serting ‘‘Secretary shall, acting through the Of12 fice of the Chief Economist,’’; and 

13 (B) by inserting ‘‘with a history of pro14 viding unbiased, nonpartisan economic analysis 

15 to Congress’’ after ‘‘subsection (b)’’; 

16 (3) in subsection (b), by striking ‘‘other re17 search institutions’’ and all that follows through 

18 ‘‘shall be eligible’’ and inserting ‘‘other public re19 search institutions and organizations shall be eligi20 ble’’; 

21 (4) in subsection (c)— 

22 (A) in the matter preceding paragraph (1), 

23 by inserting ‘‘, with preference given to policy 

24 research centers having extensive databases, 

25 models, and demonstrated experience in pro26 viding Congress with agricultural market pro-
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1 jections, rural development analysis, agricul2 tural policy analysis, and baseline projections at 

3 the farm, multiregional, national, and inter4 national levels,’’ after ‘‘with this section’’; and 

5 (B) in paragraph (2) by inserting ‘‘ap6 plied’’ after ‘‘theoretical’’; and 

7 (5) by striking subsection (d) and inserting the 

8 following: ‘‘ 

9 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

10 is authorized to be appropriated to carry out this section 

11 $5,000,000 for fiscal year 2012 and each fiscal year there12 after.’’. 

13 SEC. 7106. EDUCATION GRANTS TO ALASKA NATIVE SERV14 ING INSTITUTIONS AND NATIVE HAWAIIAN 

15 SERVING INSTITUTIONS. 

16 Section 1419B of the National Agricultural Research, 

17 Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

18 3156) is amended— 

19 (1) in subsection (a)— 

20 (A) in paragraph (1), by striking ‘‘(or 

21 grants without regard to any requirement for 

22 competition)’’; and 

23 (B) in paragraph (3), by striking ‘‘2012’’ 

24 and inserting ‘‘2017’’; and 
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1 (2) in subsection (b)(1), by striking ‘‘(or grants 

2 without regard to any requirement for competi3 tion)’’; and 

4 (3) in paragraph (3), by striking ‘‘2012’’ and 

5 inserting ‘‘2017’’. 

6 SEC. 7107. NUTRITION EDUCATION PROGRAM. 

7 Section 1425(f) of the National Agricultural Re8 search, Extension, and Teaching Policy Act of 1977 (7 

9 U.S.C. 3175(f)) is amended by striking ‘‘2012’’ and in10 serting ‘‘2017’’. 

11 SEC. 7108. CONTINUING ANIMAL HEALTH AND DISEASE RE12 SEARCH PROGRAMS. 

13 Section 1433 of the National Agricultural Research, 

14 Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

15 3195) is amended by striking the section designation and 

16 heading and all that follows through subsection (a) and 

17 inserting the following: 

18 ‘‘SEC. 1433. APPROPRIATIONS FOR CONTINUING ANIMAL 

19 HEALTH AND DISEASE RESEARCH PRO20 GRAMS. 

21 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.— 

22 ‘‘(1) IN GENERAL.—There are authorized to be 

23 appropriated to support continuing animal health 

24 and disease research programs at eligible institutions 

25 such sums as are necessary, but not to exceed 
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1 $25,000,000 for each of fiscal years 1991 through 

2 2017. 

3 ‘‘(2) USE OF FUNDS.—Funds made available 

4 under this section shall be used— 

5 ‘‘(A) to meet the expenses of conducting 

6 animal health and disease research, publishing 

7 and disseminating the results of such research, 

8 and contributing to the retirement of employees 

9 subject to the Act of March 4, 1940 (7 U.S.C. 

10 331); 

11 ‘‘(B) for administrative planning and di12 rection; and 

13 ‘‘(C) to purchase equipment and supplies 

14 necessary for conducting research described in 

15 subparagraph (A).’’. 

16 SEC. 7109. GRANTS TO UPGRADE AGRICULTURAL AND 

17 FOOD SCIENCES FACILITIES AT 1890 LAND18 GRANT COLLEGES, INCLUDING TUSKEGEE 

19 UNIVERSITY. 

20 Section 1447(b) of the National Agricultural Re21 search, Extension, and Teaching Policy Act of 1977 (7 

22 U.S.C. 3222b(b)) is amended by striking ‘‘2012’’ and in23 serting ‘‘2017’’. 
842 

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1 SEC. 7110. GRANTS TO UPGRADE AGRICULTURAL AND 

2 FOOD SCIENCES FACILITIES AND EQUIP3 MENT AT INSULAR AREA LAND-GRANT INSTI4 TUTIONS. 

5 Section 1447B(d) of the National Agricultural Re6 search, Extension, and Teaching Policy Act of 1977 (7 

7 U.S.C. 3222b–2(d)) is amended by striking ‘‘2012’’ and 

8 inserting ‘‘2017’’. 

9 SEC. 7111. HISPANIC-SERVING INSTITUTIONS. 

10 Section 1455(c) of the National Agricultural Re11 search, Extension, and Teaching Policy Act of 1977 (7 

12 U.S.C. 3241(c)) is amended by striking ‘‘2012’’ and in13 serting ‘‘2017’’. 

14 SEC. 7112. COMPETITIVE GRANTS FOR INTERNATIONAL AG15 RICULTURAL SCIENCE AND EDUCATION PRO16 GRAMS. 

17 Section 1459A of the National Agricultural Research, 

18 Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

19 3292b) is amended by striking subsection (c) and insert20 ing the following: 

21 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

22 are authorized to be appropriated to carry out this sec23 tion— 

24 ‘‘(1) such sums as are necessary for each of fis25 cal years 1999 through 2012; and 
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1 ‘‘(2) $5,000,000 for each of fiscal years 2013 

2 through 2017.’’. 

3 SEC. 7113. UNIVERSITY RESEARCH. 

4 Section 1463 of the National Agricultural Research, 

5 Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

6 3311) is amended in each of subsections (a) and (b) by 

7 striking ‘‘2012’’ each place it appears and inserting 

8 ‘‘2017’’. 

9 SEC. 7114. EXTENSION SERVICE. 

10 Section 1464 of the National Agricultural Research, 

11 Extension, and Teaching Policy Act of 1977 (7 U.S.C. 

12 3312) is amended by striking ‘‘2012’’ and inserting 

13 ‘‘2017’’. 

14 SEC. 7115. SUPPLEMENTAL AND ALTERNATIVE CROPS. 

15 (a) AUTHORIZATION OF APPROPRIATIONS AND TER16 MINATION.—Section 1473D of the National Agricultural 

17 Research, Extension, and Teaching Policy Act of 1977 (7 

18 U.S.C. 3319d) is amended— 

19 (1) in subsection (a), by striking ‘‘2012’’ and 

20 inserting ‘‘2017’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

23 are authorized to be appropriated to carry out this sec24 tion— 
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1 ‘‘(1) such sums as are necessary for fiscal year 

2 2012; and 

3 ‘‘(2) $1,000,000 for each of fiscal years 2013 

4 through 2017.’’. 

5 (b) COMPETITIVE GRANTS.—Section 1473D(c)(1) of 

6 the National Agricultural Research, Extension, and 

7 Teaching Policy Act of 1977 (7 U.S.C. 3319d(c)(1)) is 

8 amended by striking ‘‘use such research funding, special 

9 or competitive grants, or other means, as the Secretary 

10 determines,’’ and inserting ‘‘make competitive grants’’. 

11 SEC. 7116. CAPACITY BUILDING GRANTS FOR NLGCA INSTI12 TUTIONS. 

13 Section 1473F(b) of the National Agricultural Re14 search, Extension, and Teaching Policy Act of 1977 (7 

15 U.S.C. 3319i(b)) is amended by striking ‘‘2012’’ and in16 serting ‘‘2017’’. 

17 SEC. 7117. AQUACULTURE ASSISTANCE PROGRAMS. 

18 (a) COMPETITIVE GRANTS.—Section 1475(b) of the 

19 National Agricultural Research, Extension, and Teaching 

20 Policy Act of 1977 (7 U.S.C. 3322(b)) is amended in the 

21 matter preceding paragraph (1) by inserting ‘‘competi22 tive’’ before ‘‘grants’’. 

23 (b) AUTHORIZATION OF APPROPRIATIONS.—Section 

24 1477 of the National Agricultural Research, Extension, 
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1 and Teaching Policy Act of 1977 (7 U.S.C. 3324) is 

2 amended to read as follows: 

3 ‘‘SEC. 1477. AUTHORIZATION OF APPROPRIATIONS. 

4 ‘‘(a) IN GENERAL.—There are authorized to be ap5 propriated to carry out this subtitle— 

6 ‘‘(1) $7,500,000 for each of fiscal years 1991 

7 through 2012; and 

8 ‘‘(2) $5,000,000 for each of fiscal years 2013 

9 through 2017. 

10 ‘‘(b) PROHIBITION ON USE.—Funds made available 

11 under this section may not be used to acquire or construct 

12 a building.’’. 

13 SEC. 7118. RANGELAND RESEARCH PROGRAMS. 

14 Section 1483(a) of the National Agricultural Re15 search, Extension, and Teaching Policy Act of 1977 (7 

16 U.S.C. 3336(a)) is amended by striking ‘‘subtitle’’ and all 

17 that follows and inserting the following: ‘‘subtitle— 

18 ‘‘(1) $10,000,000 for each of fiscal years 1991 

19 through 2012; and 

20 ‘‘(2) $2,000,000 for each of fiscal years 2013 

21 through 2017.’’. 

22 SEC. 7119. SPECIAL AUTHORIZATION FOR BIOSECURITY 

23 PLANNING AND RESPONSE. 

24 Section 1484(a) of the National Agricultural Re25 search, Extension, and Teaching Policy Act of 1977 (7 
846 

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1 U.S.C. 3351(a)) is amended by striking ‘‘response such 

2 sums as are necessary’’ and all that follows and inserting 

3 the following: ‘‘response— 

4 ‘‘(1) such sums as are necessary for each of fis5 cal years 2002 through 2012; and 

6 ‘‘(2) $20,000,000 for each of fiscal years 2013 

7 through 2017.’’. 

8 SEC. 7120. DISTANCE EDUCATION AND RESIDENT INSTRUC9 TION GRANTS PROGRAM FOR INSULAR AREA 

10 INSTITUTIONS OF HIGHER EDUCATION. 

11 (a) DISTANCE EDUCATION GRANTS FOR INSULAR

12 AREAS.— 

13 (1) COMPETITIVE GRANTS.—Section 1490(a) of 

14 the National Agricultural Research, Extension, and 

15 Teaching Policy Act of 1977 (7 U.S.C. 3362(a)) is 

16 amended by striking ‘‘or noncompetitive’’. 

17 (2) AUTHORIZATION OF APPROPRIATIONS.— 

18 Section 1490(f) of the National Agricultural Re19 search, Extension, and Teaching Policy Act of 1977 

20 (7 U.S.C. 3362(f)) is amended by striking ‘‘section’’ 

21 and all that follows and inserting the following: ‘‘sec22 tion— 

23 ‘‘(1) such sums as are necessary for each of fis24 cal years 2002 through 2012; and 
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1 ‘‘(2) $2,000,000 for each of fiscal years 2013 

2 through 2017.’’. 

3 (b) RESIDENT INSTRUCTION GRANTS FOR INSULAR

4 AREAS.—Section 1491(c) of the National Agricultural Re5 search, Extension, and Teaching Policy Act of 1977 (7 

6 U.S.C. 3363(c)) is amended by striking ‘‘such sums as 

7 are necessary’’ and all that follows and inserting the fol8 lowing: ‘‘to carry out this section— 

9 ‘‘(1) such sums as are necessary for each of fis10 cal years 2002 through 2012; and 

11 ‘‘(2) $2,000,000 for each of fiscal years 2013 

12 through 2017.’’. 

13 Subtitle B—Food, Agriculture, Con14 servation, and Trade Act of 1990 

15 SEC. 7201. BEST UTILIZATION OF BIOLOGICAL APPLICA16 TIONS. 

17 Section 1624 of the Food, Agriculture, Conservation, 

18 and Trade Act of 1990 (7 U.S.C. 5814) is amended— 

19 (1) by striking ‘‘$40,000,000 for each fiscal 

20 year’’; and 

21 (2) by inserting ‘‘$40,000,000 for each of fiscal 

22 years 2012 through 2017’’ after ‘‘chapter’’. 
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1 SEC. 7202. INTEGRATED MANAGEMENT SYSTEMS. 

2 Section 1627 of the Food, Agriculture, Conservation, 

3 and Trade Act of 1990 (7 U.S.C. 5821) is amended by 

4 striking subsection (d) and inserting the following: 

5 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

6 is authorized to be appropriated to carry out this section 

7 through the National Institute of Food and Agriculture 

8 $20,000,000 for each of fiscal years 2012 through 2017.’’. 

9 SEC. 7203. SUSTAINABLE AGRICULTURE TECHNOLOGY DE10 VELOPMENT AND TRANSFER PROGRAM. 

11 Section 1628 of the Food, Agriculture, Conservation, 

12 and Trade Act of 1990 (7 U.S.C. 5831) is amended by 

13 striking subsection (f) and inserting the following: 

14 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to carry out this section 

16 such sums as are necessary for each of fiscal years 2012 

17 through 2017.’’. 

18 SEC. 7204. NATIONAL TRAINING PROGRAM. 

19 Section 1629 of the Food, Agriculture, Conservation, 

20 and Trade Act of 1990 (7 U.S.C. 5832) is amended by 

21 striking subsection (i) and inserting the following: 

22 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There is 

23 authorized to be appropriated to carry out the National 

24 Training Program $20,000,000 for each of fiscal years 

25 2012 through 2017.’’. 
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1 SEC. 7205. NATIONAL GENETICS RESOURCES PROGRAM. 

2 Section 1635(b) of the Food, Agriculture, Conserva3 tion, and Trade Act of 1990 (7 U.S.C. 5844(b)) is amend4 ed— 

5 (1) by striking ‘‘such funds as may be nec6 essary’’; and 

7 (2) by striking ‘‘subtitle’’ and all that follows 

8 and inserting the following: ‘‘subtitle— 

9 ‘‘(1) such sums as are necessary for each of fis10 cal years 1991 through 2012; and 

11 ‘‘(2) $1,000,000 for each of fiscal years 2013 

12 through 2017.’’. 

13 SEC. 7206. NATIONAL AGRICULTURAL WEATHER INFORMA14 TION SYSTEM. 

15 Section 1641(c) of the Food, Agriculture, Conserva16 tion, and Trade Act of 1990 (7 U.S.C. 5855(c)) is amend17 ed by inserting ‘‘and $1,000,000 for each of fiscal years 

18 2013 through 2017’’ before the period at the end. 

19 SEC. 7207. HIGH-PRIORITY RESEARCH AND EXTENSION INI20 TIATIVES. 

21 Section 1672 of the Food, Agriculture, Conservation, 

22 and Trade Act of 1990 (7 U.S.C. 5925) is amended— 

23 (1) in the first sentence of subsection (a), by 

24 striking ‘‘subsections (e) through (i) of’’; 

25 (2) in subsection (b)(2)— 
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1 (A) by striking the first sentence and in2 serting the following: 

3 ‘‘(A) IN GENERAL.—To facilitate the mak4 ing of research and extension grants under sub5 section (d), the Secretary may appoint a task 

6 force to make recommendations to the Sec7 retary.’’; and 

8 (B) in the second sentence, by striking 

9 ‘‘The Secretary may not incur costs in excess of 

10 $1,000 for any fiscal year in connection with 

11 each’’ and inserting the following: 

12 ‘‘(B) COSTS.—The Secretary may not 

13 incur costs in excess of $1,000 for any fiscal 

14 year in connection with a’’; 

15 (3) in subsection (e)— 

16 (A) by striking paragraphs (1) through 

17 (5), (7), (8), (11) through (39), (41) through 

18 (43), (47), (48), (51), and (52); 

19 (B) by redesignating paragraphs (6), (9), 

20 (10), (40), (44), (45), (46), (49), and (50) as 

21 paragraphs (1), (2), (3), (4), (5), (6), (7), (8), 

22 and (9), respectively; and 

23 (C) by adding at the end the following: 

24 ‘‘(10) CORN, SOYBEAN MEAL, CEREAL GRAINS, 

25 AND GRAIN BYPRODUCTS RESEARCH AND EXTEN-
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1 SION.—Research and extension grants may be made 

2 under this section for the purpose of carrying out or 

3 enhancing research to improve the digestibility, nu4 tritional value, and efficiency of use of corn, soybean 

5 meal, cereal grains, and grain byproducts for the 

6 poultry and food animal production industries.’’; 

7 (4) by striking subsections (f), (g), and (i); 

8 (5) by inserting after subsection (e) the fol9 lowing: 

10 ‘‘(f) PULSE HEALTH INITIATIVE.— 

11 ‘‘(1) DEFINITIONS.—In this subsection; 

12 ‘‘(A) INITIATIVE.—The term ‘Initiative’ 

13 means the pulse health initiative established by 

14 paragraph (2). 

15 ‘‘(B) PULSE.—The term ‘pulse’ means dry 

16 beans, dry peas, lentils, and chickpeas or 

17 garbanzo beans. 

18 ‘‘(2) ESTABLISHMENT.—Notwithstanding any 

19 other provision of law, during the period beginning 

20 on the date of enactment of the Agriculture Reform, 

21 Food, and Jobs Act of 2012 and ending on Sep22 tember 30, 2017, the Secretary shall carry out a 

23 pulse crop health and extension initiative to address 

24 the critical needs of the pulse crop industry by devel-
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1 oping and disseminating science-based tools and in2 formation, including— 

3 ‘‘(A) research in health and nutrition, such 

4 as— 

5 ‘‘(i) identifying global dietary patterns 

6 of pulse crops in relation to population 

7 health; 

8 ‘‘(ii) researching pulse crop diets and 

9 the ability of the diets to reduce obesity 

10 and associated chronic disease (including 

11 cardiovascular disease, type 2 diabetes, 

12 and cancer); and 

13 ‘‘(iii) identifying the underlying mech14 anisms of the health benefits of pulse crop 

15 consumption (including disease biomarkers, 

16 bioactive components, and relevant plant 

17 genetic components to enhance the health 

18 promoting value of pulse crops); 

19 ‘‘(B) research in functionality, such as— 

20 ‘‘(i) improving the functional prop21 erties of pulse crops and pulse fractions; 

22 ‘‘(ii) developing new and innovative 

23 technologies to improve pulse crops as an 

24 ingredient in food products; and 
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1 ‘‘(iii) developing nutrient-dense food 

2 product solutions to ameliorate chronic dis3 ease and enhance food security worldwide; 

4 ‘‘(C) research in sustainability to enhance 

5 global food security, such as— 

6 ‘‘(i) plant breeding, genetics and 

7 genomics to improve productivity, nutrient 

8 density, and phytonutrient content for a 

9 growing world population; 

10 ‘‘(ii) pest and disease management, 

11 including resistance to pests and diseases 

12 resulting in reduced application manage13 ment strategies; and 

14 ‘‘(iii) improving nitrogen fixation to 

15 reduce the carbon and energy footprint of 

16 agriculture; 

17 ‘‘(D) optimizing pulse cropping systems to 

18 reduce water usage; and 

19 ‘‘(E) education and technical service, such 

20 as— 

21 ‘‘(i) providing technical expertise to 

22 help food companies include nutrient-dense 

23 pulse crops in innovative and healthy 

24 foods; and 
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1 ‘‘(ii) establishing an educational pro2 gram to encourage the consumption and 

3 production of pulse crops in the United 

4 States and other countries. 

5 ‘‘(3) ELIGIBLE ENTITIES.—The Secretary may 

6 carry out the Initiative through— 

7 ‘‘(A) Federal agencies, including the Agri8 cultural Research Service and the National In9 stitute of Food and Agriculture; 

10 ‘‘(B) National Laboratories; 

11 ‘‘(C) institutions of higher education; 

12 ‘‘(D) research institutions or organizations; 

13 ‘‘(E) private organizations or corporations; 

14 ‘‘(F) State agricultural experiment sta15 tions; 

16 ‘‘(G) individuals; or 

17 ‘‘(H) groups consisting of 2 or more enti18 ties or individuals described in subparagraphs 

19 (A) through (G). 

20 ‘‘(4) RESEARCH PROJECT GRANTS.— 

21 ‘‘(A) IN GENERAL.—In carrying out this 

22 subsection, the Secretary shall award grants on 

23 a competitive basis. 

24 ‘‘(B) IN GENERAL.—The Secretary shall— 
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1 ‘‘(i) seek and accept proposals for 

2 grants; 

3 ‘‘(ii) determine the relevance and 

4 merit of proposals through a system of 

5 peer review, in consultation with the pulse 

6 crop industry; and 

7 ‘‘(iii) award grants on the basis of 

8 merit, quality, and relevance. 

9 ‘‘(C) PRIORITIES.—In making grants 

10 under this subsection, the Secretary shall pro11 vide a higher priority to projects that— 

12 ‘‘(i) are multistate, multiinstitutional, 

13 and multidisciplinary; and 

14 ‘‘(ii) include explicit mechanisms to 

15 communicate results to the pulse crop in16 dustry and the public. 

17 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.— 

18 There is authorized to be appropriated to carry out 

19 this subsection $25,000,000 for each of fiscal years 

20 2013 through 2017. 

21 ‘‘(g) TRAINING COORDINATION FOR FOOD AND AGRI22 CULTURE PROTECTION.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall make 

24 grants and enter into contracts or cooperative agree25 ments with eligible entities described in paragraph 
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1 (2) for the purposes of establishing a Comprehensive 

2 Food Safety Training Network. 

3 ‘‘(2) ELIGIBILITY.— 

4 ‘‘(A) IN GENERAL.—For purposes of this 

5 subsection, an eligible entity is a multiinstitu6 tional consortium that includes— 

7 ‘‘(i) a nonprofit institution that pro8 vides administering food protection train9 ing; and 

10 ‘‘(ii) 1 or more training centers in in11 stitutions of higher education that have 

12 demonstrated expertise in developing and 

13 delivering community-based training in 

14 food and agricultural safety and defense. 

15 ‘‘(B) REQUIREMENTS.—To ensure that co16 ordination and administration is provided 

17 across all the disciplines and provide com18 prehensive food protection training, the Sec19 retary may only consider an entire consortium 

20 collectively rather than on an institution-by-in21 stitution basis. 

22 ‘‘(C) MEMBERSHIP.—An eligible entity 

23 may alter the consortium membership to meet 

24 specific training expertise needs. 
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1 ‘‘(3) DUTIES OF ELIGIBLE ENTITY.—As a con2 dition of the receipt of assistance under this sub3 section, an eligible entity, in cooperation with the 

4 Secretary, shall establish and maintain the network 

5 for an internationally integrated training system to 

6 enhance protection of the United States food supply, 

7 including, at a minimum— 

8 ‘‘(A) developing curricula and a training 

9 network to provide basic, technical, manage10 ment, and leadership training to regulatory and 

11 public health officials, producers, processors, 

12 and other agrifood businesses; 

13 ‘‘(B) serving as the hub for the adminis14 tration of an open training network; 

15 ‘‘(C) implementing standards to ensure the 

16 delivery of quality training through a national 

17 curricula; 

18 ‘‘(D) building and overseeing a nationally 

19 recognized instructor cadre to ensure the avail20 ability of highly qualified instructors; 

21 ‘‘(E) reviewing training proposed through 

22 the National Institute of Food and Agriculture 

23 and other relevant Federal agencies that report 

24 to the Secretary on the quality and content of 

25 proposed and existing courses; 
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1 ‘‘(F) assisting Federal agencies in the im2 plementation of food protection training re3 quirements including requirements contained in 

4 the Agriculture Reform, Food, and Jobs Act of 

5 2012, the FDA Food Safety Modernization Act 

6 (Public Law 111–353; 124 Stat. 3885), and 

7 amendments made by those Acts; and 

8 ‘‘(G) performing evaluation and outcome9 based studies to provide to the Secretary feed10 back on the effectiveness and impact of training 

11 and metrics on jurisdictions and sectors within 

12 the food safety system. 

13 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

14 There is authorized to be appropriated to carry out 

15 this section $20,000,000 for each of fiscal years 

16 2013 through 2017, to remain available until ex17 pended.’’; 

18 (6) in subsection (h), by striking ‘‘2012’’ each 

19 place it appears and inserting ‘‘2017’’; 

20 (7) by redesignating subsection (j) as sub21 section (i); and 

22 (8) in subsection (i) (as so redesignated), by 

23 striking ‘‘2012’’ and inserting ‘‘2017’’. 
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1 SEC. 7208. ORGANIC AGRICULTURE RESEARCH AND EXTEN2 SION INITIATIVE. 

3 Section 1672B of the Food, Agriculture, Conserva4 tion, and Trade Act of 1990 (7 U.S.C. 5925b) is amend5 ed— 

6 (1) in subsection (a)— 

7 (A) in the matter preceding paragraph (1), 

8 by inserting ‘‘, education,’’ after ‘‘support re9 search’’; 

10 (B) in paragraph (1), by inserting ‘‘and 

11 improvement’’ after ‘‘development’’; 

12 (C) in paragraph (2), by striking ‘‘to pro13 ducers and processors who use organic meth14 ods’’ and inserting ‘‘of organic agricultural pro15 duction and methods to producers, processors, 

16 and rural communities’’; 

17 (D) in paragraph (5), by inserting ‘‘and 

18 researching solutions to’’ after ‘‘identifying’’; 

19 and 

20 (E) in paragraph (6), by striking ‘‘and 

21 marketing’’ and inserting ‘‘, marketing, and 

22 food safety’’; 

23 (2) by striking subsection (e); 

24 (3) by redesignating subsection (f) as sub25 section (e); and 

26 (4) in subsection (e) (as so redesignated)— 
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1 (A) in paragraph (1)— 

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

3 ‘‘and’’ at the end; 

4 (ii) in subparagraph (B), by striking 

5 the period at the end and inserting ‘‘; 

6 and’’; and 

7 (iii) by adding at the end the fol8 lowing: 

9 ‘‘(C) $16,000,000 for each of fiscal years 

10 2013 through 2017.’’; and 

11 (B) in paragraph (2), by striking ‘‘2012’’ 

12 and inserting ‘‘2017’’. 

13 SEC. 7209. FARM BUSINESS MANAGEMENT. 

14 Section 1672D(d) of the Food, Agriculture, Con15 servation, and Trade Act of 1990 (7 U.S.C. 5925f(d)) is 

16 amended by striking ‘‘such sums as are necessary to carry 

17 out this section.’’ and inserting the following: ‘‘to carry 

18 out this section— 

19 ‘‘(1) such sums as are necessary for fiscal year 

20 2012; and 

21 ‘‘(2) $5,000,000 for each of fiscal years 2013 

22 through 2017.’’. 
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1 SEC. 7210. REGIONAL CENTERS OF EXCELLENCE. 

2 Subtitle H of the Food, Agriculture, Conservation, 

3 and Trade Act of 1990 is amended by inserting after sec4 tion 1672D (7 U.S.C. 5925) the following: 

5 ‘‘SEC. 1673. REGIONAL CENTERS OF EXCELLENCE. 

6 ‘‘(a) ESTABLISHMENT.—The Secretary may 

7 prioritize regional centers of excellence established for spe8 cific agricultural commodities for the receipt of funding. 

9 ‘‘(b) COMPOSITION.—A regional center of excellence 

10 shall be composed of 1 or more colleges and universities 

11 (including land-grant institutions, schools of forestry, 

12 schools of veterinary medicine, or NLGCA Institutions (as 

13 defined in section 1404 of the National Agricultural Re14 search, Extension, and Teaching Policy Act of 1977 (7 

15 U.S.C. 3103))) that provide financial support to the re16 gional center of excellence. 

17 ‘‘(c) CRITERIA FOR REGIONAL CENTERS OF EXCEL18 LENCE.—The criteria for consideration to be a regional 

19 center of excellence shall include efforts— 

20 ‘‘(1) to ensure coordination and cost-effective21 ness by reducing unnecessarily duplicative efforts re22 garding research, teaching, and extension; 

23 ‘‘(2) to leverage available resources by using 

24 public/private partnerships among agricultural in25 dustry groups, institutions of higher education, and 

26 the Federal Government; 
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1 ‘‘(3) to implement teaching initiatives to in2 crease awareness and effectively disseminate solu3 tions to target audiences through extension activi4 ties; 

5 ‘‘(4) to increase the economic returns to rural 

6 communities by identifying, attracting, and directing 

7 funds to high-priority agricultural issues; and 

8 ‘‘(5) to improve teaching capacity and infra9 structure at colleges and universities (including land10 grant institutions, schools of forestry, and schools of 

11 veterinary medicine, and NLGCA Institutions). 

12 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

13 is authorized to be appropriated to carry out this section 

14 $10,000,000 for each of fiscal years 2013 through 2017.’’. 

15 SEC. 7211. ASSISTIVE TECHNOLOGY PROGRAM FOR FARM16 ERS WITH DISABILITIES. 

17 Section 1680(c)(1) of the Food, Agriculture, Con18 servation, and Trade Act of 1990 (7 U.S.C. 5933(c)(1)) 

19 is amended— 

20 (1) by striking ‘‘is’’ and inserting ‘‘are’’; and 

21 (2) by striking ‘‘section’’ and all that follows 

22 and inserting the following: ‘‘section— 

23 ‘‘(A) $6,000,000 for each of fiscal years 

24 1999 through 2012; and 
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1 ‘‘(B) $5,000,000 for each of fiscal years 

2 2013 through 2017.’’. 

3 SEC. 7212. NATIONAL RURAL INFORMATION CENTER 

4 CLEARINGHOUSE. 

5 Section 2381(e) of the Food, Agriculture, Conserva6 tion, and Trade Act of 1990 (7 U.S.C. 3125b(e)) is 

7 amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 

8 Subtitle C—Agricultural Research, 

9 Extension, and Education Re10 form Act of 1998 

11 SEC. 7301. RELEVANCE AND MERIT OF AGRICULTURAL RE12 SEARCH, EXTENSION, AND EDUCATION FUND13 ED BY THE DEPARTMENT. 

14 Section 103(a)(2) of the Agricultural Research, Ex15 tension, and Education Reform Act of 1998 (7 U.S.C. 

16 7613(a)(2)) is amended— 

17 (1) by striking the paragraph designation and 

18 heading and inserting the following: 

19 ‘‘(2) RELEVANCE AND MERIT REVIEW OF RE20 SEARCH, EXTENSION, AND EDUCATION GRANTS.—’’; 

21 (2) in subparagraph (A)— 

22 (A) by inserting ‘‘relevance and’’ before 

23 ‘‘merit’’; and 
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1 (B) by striking ‘‘extension or education’’ 

2 and inserting, ‘‘research, extension, or edu3 cation’’; and 

4 (3) in subparagraph (B) by inserting ‘‘on a con5 tinuous basis’’ after ‘‘procedures’’. 

6 SEC. 7302. INTEGRATED RESEARCH, EDUCATION, AND EX7 TENSION COMPETITIVE GRANTS PROGRAM. 

8 Section 406(f) of the Agricultural Research, Exten9 sion, and Education Reform Act of 1998 (7 U.S.C. 

10 7626(f)) is amended by striking ‘‘2012’’ and inserting 

11 ‘‘2017’’. 

12 SEC. 7303. SUPPORT FOR RESEARCH REGARDING DISEASES 

13 OF WHEAT, TRITICALE, AND BARLEY CAUSED 

14 BY FUSARIUM GRAMINEARUM OR BY 

15 TILLETIA INDICA. 

16 Section 408(e) of the Agricultural Research, Exten17 sion, and Education Reform Act of 1998 (7 U.S.C. 

18 7628(e)) is amended by striking ‘‘such sums as may be 

19 necessary for each of fiscal years 1999 through 2012’’ and 

20 inserting ‘‘$10,000,000 for each of fiscal years 2013 

21 through 2017’’. 

22 SEC. 7304. GRANTS FOR YOUTH ORGANIZATIONS. 

23 Section 410(d) of the Agricultural Research, Exten24 sion, and Education Reform Act of 1998 (7 U.S.C. 

25 7630(d)) is amended by striking ‘‘section such sums as 
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1 are necessary’’ and all that follows and inserting the fol2 lowing: ‘‘section— 

3 ‘‘(1) such sums as are necessary for each of fis4 cal years 2008 through 2012; and 

5 ‘‘(2) $3,000,000 for each of fiscal years 2013 

6 through 2017.’’. 

7 SEC. 7305. SPECIALTY CROP RESEARCH INITIATIVE. 

8 Section 412 of the Agricultural Research, Extension, 

9 and Education Reform Act of 1998 (7 U.S.C. 7632) is 

10 amended— 

11 (1) in subsection (b)(3), by inserting ‘‘handling 

12 and processing,’’ after ‘‘production efficiency,’’; 

13 (2) in subsection (e)— 

14 (A) in paragraph (1)— 

15 (i) in subparagraph (B), by striking 

16 ‘‘and’’ at the end; 

17 (ii) in subparagraph (C), by striking 

18 the period at the end and inserting ‘‘; 

19 and’’; and 

20 (iii) by inserting after subparagraph 

21 (C) the following: 

22 ‘‘(D) consult with the specialty crops com23 mittee authorized under section 1408A of the 

24 National Agricultural Research, Extension, and 
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1 Teaching Policy Act of 1977 (7 U.S.C. 3123a) 

2 during the peer and merit review process.’’; and 

3 (B) in paragraph (3), by striking ‘‘non4 Federal’’ and all that follows through the end 

5 of the paragraph and inserting ‘‘other sources 

6 in an amount that is at least equal to the 

7 amount provided by a grant received under this 

8 section.’’; and 

9 (3) in subsection (h)— 

10 (A) in paragraph (1)— 

11 (i) by striking ‘‘(1) IN GENERAL.—Of 

12 the funds’’ and inserting the following: 

13 ‘‘(1) MANDATORY FUNDING.— 

14 ‘‘(A) IN GENERAL.—Of the funds’’; and 

15 (ii) by adding at the end the fol16 lowing: 

17 ‘‘(B) SUBSEQUENT FUNDING.—Of the 

18 funds of the Commodity Credit Corporation, the 

19 Secretary shall make available to carry out this 

20 section— 

21 ‘‘(i) $25,000,000 for fiscal year 2013; 

22 ‘‘(ii) $30,000,000 for each of fiscal 

23 years 2014 and 2015; 

24 ‘‘(iii) $65,000,000 for fiscal year 

25 2016; and 
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1 ‘‘(iv) $50,000,000 for fiscal year 2017 

2 and each fiscal year thereafter.’’; and 

3 (B) in paragraph (2), by striking ‘‘2012’’ 

4 and inserting ‘‘2017’’. 

5 SEC. 7306. FOOD ANIMAL RESIDUE AVOIDANCE DATABASE 

6 PROGRAM. 

7 Section 604(e) of the Agricultural Research, Exten8 sion, and Education Reform Act of 1998 (7 U.S.C. 

9 7642(e)) is amended by striking ‘‘2012’’ and inserting 

10 ‘‘2017’’. 

11 SEC. 7307. OFFICE OF PEST MANAGEMENT POLICY. 

12 Section 614(f) of the Agricultural Research, Exten13 sion, and Education Reform Act of 1998 (7 U.S.C. 

14 7653(f)) is amended— 

15 (1) by striking ‘‘such sums as are necessary’’; 

16 and 

17 (2) by striking ‘‘section’’ and all that follows 

18 and inserting the following: ‘‘section— 

19 ‘‘(1) such sums as are necessary for each of fis20 cal years 1999 through 2012; and 

21 ‘‘(2) $3,000,000 for each of fiscal years 2013 

22 through 2017.’’. 
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1 SEC. 7308. AUTHORIZATION OF REGIONAL INTEGRATED 

2 PEST MANAGEMENT CENTERS. 

3 Subtitle B of title VI of the Agricultural Research, 

4 Extension, and Education Reform Act of 1998 (7 U.S.C. 

5 7651 et seq.) is amended by adding at the end the fol6 lowing: 

7 ‘‘SEC. 621. AUTHORIZATION OF REGIONAL INTEGRATED 

8 PEST MANAGEMENT CENTERS. 

9 ‘‘(a) IN GENERAL.—There are established 4 regional 

10 integrated pest management centers (referred to in this 

11 section as the ‘Centers’), which shall be located at such 

12 specific locations in the north central, northeastern, south13 ern, and western regions of the United States as the Sec14 retary shall specify. 

15 ‘‘(b) PURPOSES.—The purposes of the Centers shall 

16 be— 

17 ‘‘(1) to strengthen the connection of the De18 partment with production agriculture, research, and 

19 extension programs, and agricultural stakeholders 

20 throughout the United States; 

21 ‘‘(2) to increase the effectiveness of providing 

22 pest management solutions for the private and pub23 lic sectors; 

24 ‘‘(3) to quickly respond to information needs of 

25 the public and private sectors; and 
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1 ‘‘(4) to improve communication among the rel2 evant stakeholders. 

3 ‘‘(c) DUTIES.—In meeting the purposes described in 

4 subsection (b) and otherwise carrying out this section, the 

5 Centers shall— 

6 ‘‘(1) develop regional strategies to address pest 

7 management needs; 

8 ‘‘(2) assist the Department and partner institu9 tions of the Department in identifying, prioritizing, 

10 and coordinating a national pest management re11 search, extension, and education program imple12 mented on a regional basis; 

13 ‘‘(3) establish a national pest management com14 munication network that includes— 

15 ‘‘(A) the agencies of the Department and 

16 other government agencies; 

17 ‘‘(B) scientists at institutions of higher 

18 education; and 

19 ‘‘(C) stakeholders focusing on pest man20 agement issues; 

21 ‘‘(4) serve as regional hubs responsible for en22 suring efficient access to pest management expertise 

23 and data available through institutions of higher 

24 education; and 
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1 ‘‘(5) on behalf of the Department, manage 

2 grants that can be most effectively and efficiently 

3 delivered at the regional level, as determined by the 

4 Secretary.’’. 

5 Subtitle D—Other Laws 

6 SEC. 7401. CRITICAL AGRICULTURAL MATERIALS ACT. 

7 Section 16(a) of the Critical Agricultural Materials 

8 Act (7 U.S.C. 178n(a)) is amended— 

9 (1) by striking ‘‘such sums as are necessary’’; 

10 and 

11 (2) by striking ‘‘Act’’ and all that follows and 

12 inserting the following: ‘‘Act— 

13 ‘‘(1) such sums as are necessary for each of fis14 cal years 1991 through 2012; and 

15 ‘‘(2) $2,000,000 for each of fiscal years 2013 

16 through 2017.’’. 

17 SEC. 7402. EQUITY IN EDUCATIONAL LAND-GRANT STATUS 

18 ACT OF 1994. 

19 (a) DEFINITION OF 1994 INSTITUTIONS.—Section 

20 532 of the Equity in Educational Land-Grant Status Act 

21 of 1994 (7 U.S.C. 301 note; Public Law 103–382) is 

22 amended to read as follows: 

23 ‘‘SEC. 532. DEFINITION OF 1994 INSTITUTIONS. 

24 ‘‘In this part, the term ‘1994 Institutions’ means any 

25 1 of the following: 
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1 ‘‘(1) Aaniiih Nakoda College. 

2 ‘‘(2) Bay Mills Community College. 

3 ‘‘(3) Blackfeet Community College. 

4 ‘‘(4) Cankdeska Cikana Community College. 

5 ‘‘(5) Chief Dull Knife Memorial College. 

6 ‘‘(6) College of Menominee Nation. 

7 ‘‘(7) College of the Muscogee Nation. 

8 ‘‘(8) Comanche Nation College. 

9 ‘‘(9) D-Q University. 

10 ‘‘(10) Dine College. 

11 ‘‘(11) Fond du Lac Tribal and Community Col12 lege. 

13 ‘‘(12) Fort Berthold Community College. 

14 ‘‘(13) Fort Peck Community College. 

15 ‘‘(14) Haskell Indian Nations University. 

16 ‘‘(15) Ilisagvik College. 

17 ‘‘(16) Institute of American Indian and Alaska 

18 Native Culture and Arts Development. 

19 ‘‘(17) Keweenaw Bay Ojibwa Community Col20 lege. 

21 ‘‘(18) Lac Courte Oreilles Ojibwa Community 

22 College. 

23 ‘‘(19) Leech Lake Tribal College. 

24 ‘‘(20) Little Big Horn College. 

25 ‘‘(21) Little Priest Tribal College. 
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1 ‘‘(22) Navajo Technical College. 

2 ‘‘(23) Nebraska Indian Community College. 

3 ‘‘(24) Northwest Indian College. 

4 ‘‘(25) Oglala Lakota College. 

5 ‘‘(26) Saginaw Chippewa Tribal College. 

6 ‘‘(27) Salish Kootenai College. 

7 ‘‘(28) Sinte Gleska University. 

8 ‘‘(29) Sisseton Wahpeton College. 

9 ‘‘(30) Sitting Bull College. 

10 ‘‘(31) Southwestern Indian Polytechnic Insti11 tute. 

12 ‘‘(32) Stone Child College. 

13 ‘‘(33) Tohono O’odham Community College. 

14 ‘‘(34) Turtle Mountain Community College. 

15 ‘‘(35) United Tribes Technical College. 

16 ‘‘(36) White Earth Tribal and Community Col17 lege.’’. 

18 (b) ENDOWMENT FOR 1994 INSTITUTIONS.— 

19 (1) IN GENERAL.—Section 533 of the Equity in 

20 Educational Land-Grant Status Act of 1994 (7 

21 U.S.C. 301 note; Public Law 103–382) is amend22 ed— 

23 (A) in subsection (a)(2)(A)(ii), by striking 

24 ‘‘of such Act as added by section 534(b)(1) of 

25 this part’’ and inserting ‘‘of that Act (7 U.S.C. 
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1 343(b)(3)) and for programs for children, 

2 youth, and families at risk and for Federally 

3 recognized tribes implemented under section 

4 3(d) of that Act (7 U.S.C. 343(d))’’; and 

5 (B) in subsection (b), in the first sentence 

6 by striking ‘‘2012’’ and inserting ‘‘2017’’. 

7 (2) CONFORMING AMENDMENT.—Section 3(d) 

8 of the Smith-Lever Act (7 U.S.C. 343(d)) is amend9 ed in the second sentence by inserting ‘‘and, in the 

10 case of programs for children, youth, and families at 

11 risk and for Federally recognized tribes, the 1994 

12 Institutions (as defined in section 532 of the Equity 

13 in Educational Land-Grant Status Act of 1994 (7 

14 U.S.C. 301 note; Public Law 103–382)),’’ before 

15 ‘‘may compete for’’. 

16 (c) INSTITUTIONAL CAPACITY BUILDING GRANTS.— 

17 Section 535 of the Equity in Educational Land-Grant Sta18 tus Act of 1994 (7 U.S.C. 301 note; Public Law 103– 

19 382) is amended by striking ‘‘2012’’ each place it appears 

20 in subsections (b)(1) and (c) and inserting ‘‘2017’’. 

21 (d) RESEARCH GRANTS.— 

22 (1) AUTHORIZATION OF APPROPRIATIONS.— 

23 Section 536(c) of the Equity in Educational Land24 Grant Status Act of 1994 (7 U.S.C. 301 note; Pub-
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1 lic Law 103–382) is amended in the first sentence 

2 by striking ‘‘2012’’ and inserting ‘‘2017’’. 

3 (2) RESEARCH GRANT REQUIREMENTS.—Sec4 tion 536(b) of the Equity in Educational Land5 Grant Status Act of 1994 (7 U.S.C. 301 note; Pub6 lic Law 103–382) is amended by striking ‘‘with at 

7 least 1 other land-grant college or university’’ and 

8 all that follows and inserting the following: ‘‘with— 

9 ‘‘(1) the Agricultural Research Service of the 

10 Department of Agriculture; or 

11 ‘‘(2) at least 1— 

12 ‘‘(A) other land-grant college or university 

13 (exclusive of another 1994 Institution); 

14 ‘‘(B) non-land-grant college of agriculture 

15 (as defined in section 1404 of the National Ag16 ricultural Research, Extension, and Teaching 

17 Policy Act of 1977 (7 U.S.C. 3103)); or 

18 ‘‘(C) cooperating forestry school (as de19 fined in that section).’’. 

20 (e) EFFECTIVE DATE.—The amendments made by 

21 subsections (a), (b), and (d)(2) take effect on October 1, 

22 2012. 
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1 SEC. 7403. RESEARCH FACILITIES ACT. 

2 Section 6(a) of the Research Facilities Act (7 U.S.C. 

3 390d(a)) is amended by striking ‘‘2012’’ and inserting 

4 ‘‘2017’’. 

5 SEC. 7404. COMPETITIVE, SPECIAL, AND FACILITIES RE6 SEARCH GRANT ACT. 

7 Section 2 of the Competitive, Special, and Facilities 

8 Research Grant Act (7 U.S.C. 450i) is amended— 

9 (1) in subsection (b)(11)(A), in the matter pre10 ceding clause (i), by striking ‘‘2012’’ and inserting 

11 ‘‘2017’’; and 

12 (2) by adding at the end the following: 

13 ‘‘(l) STREAMLINING GRANT APPLICATION PROC14 ESS.—Not later than 1 year after the date of enactment 

15 of this subsection, the Secretary shall submit to Congress 

16 a report that includes— 

17 ‘‘(1) an analysis of barriers that exist in the 

18 competitive grants process administered by the Na19 tional Institute of Food and Agriculture that prevent 

20 eligible institutions and organizations with limited 

21 institutional capacity from successfully applying and 

22 competing for competitive grants; and 

23 ‘‘(2) specific recommendations for future steps 

24 that the Department can take to streamline the 

25 competitive grants application process so as to re-
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1 move the barriers and increase the success rates of 

2 applicants described in paragraph (1).’’. 

3 SEC. 7405. ENHANCED USE LEASE AUTHORITY PILOT PRO4 GRAM UNDER DEPARTMENT OF AGRI5 CULTURE REORGANIZATION ACT OF 1994. 

6 Section 308(b)(6) of the Department of Agriculture 

7 Reorganization Act of 1994 (7 U.S.C. 3125a note; Public 

8 Law 103–354) is amended by striking subparagraph (A) 

9 and inserting the following: 

10 ‘‘(A) on September 30, 2017; or’’. 

11 SEC. 7406. RENEWABLE RESOURCES EXTENSION ACT OF 

12 1978. 

13 (a) AUTHORIZATION OF APPROPRIATIONS.—Section 

14 6 of the Renewable Resources Extension Act of 1978 (16 

15 U.S.C. 1675) is amended in the first sentence by striking 

16 ‘‘2012’’ and inserting ‘‘2017’’. 

17 (b) TERMINATION DATE.—Section 8 of the Renew18 able Resources Extension Act of 1978 (16 U.S.C. 1671 

19 note; Public Law 95–306) is amended by striking ‘‘2012’’ 

20 and inserting ‘‘2017’’. 

21 SEC. 7407. NATIONAL AQUACULTURE ACT OF 1980. 

22 Section 10 of the National Aquaculture Act of 1980 

23 (16 U.S.C. 2809) is amended by striking ‘‘2012’’ each 

24 place it appears and inserting ‘‘2017’’. 
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1 SEC. 7408. BEGINNING FARMER AND RANCHER DEVELOP2 MENT PROGRAM UNDER FARM SECURITY 

3 AND RURAL INVESTMENT ACT OF 2002. 

4 Section 7405 of the Farm Security and Rural Invest5 ment Act of 2002 (7 U.S.C. 3319f) is amended— 

6 (1) in subsection (c)(8)— 

7 (A) in subparagraph (B), by striking 

8 ‘‘and’’ at the end; 

9 (B) in subparagraph (C), by striking the 

10 period at the end and inserting ‘‘; and’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(D) beginning farmers and ranchers who 

13 are veterans (as defined in section 101 of title 

14 38, United States Code).’’; and 

15 (2) by redesignating subsection (h) as sub16 section (i); 

17 (3) by inserting after subsection (g) the fol18 lowing: 

19 ‘‘(h) STATE GRANTS.— 

20 ‘‘(1) DEFINITION OF ELIGIBLE ENTITY.—In 

21 this subsection, the term ‘eligible entity’ means— 

22 ‘‘(A) an agency of a State or political sub23 division of a State; 

24 ‘‘(B) a national, State, or regional organi25 zation of agricultural producers; and 
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1 ‘‘(C) any other entity determined appro2 priate by the Secretary. 

3 ‘‘(2) GRANTS.—The Secretary shall use such 

4 sums as are necessary of funds made available to 

5 carry out this section for each fiscal year under sub6 section (i) to make grants to States, on a competi7 tive basis, which States shall use the grants to make 

8 grants to eligible entities to establish and improve 

9 farm safety programs at the local level.’’; and 

10 (4) in subsection (i) (as redesignated by para11 graph (2))— 

12 (A) in paragraph (1)— 

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

14 ‘‘and’’ at the end; 

15 (ii) in subparagraph (B), by striking 

16 the period at the end and inserting ‘‘; 

17 and’’; and 

18 (iii) by adding at the end the fol19 lowing: 

20 ‘‘(C) $17,000,000 for each of fiscal years 

21 2013 through 2017, to remain available until 

22 expended.’’; and 

23 (B) in paragraph (2), by striking ‘‘2012’’ 

24 and inserting ‘‘2017’’. 
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1 Subtitle E—Food, Conservation, 

2 and Energy Act of 2008 

3 PART I—AGRICULTURAL SECURITY 

4 SEC. 7501. AGRICULTURAL BIOSECURITY COMMUNICATION 

5 CENTER. 

6 Section 14112 of the Food, Conservation, and En7 ergy Act of 2008 (7 U.S.C. 8912) is amended by striking 

8 subsection (c) and inserting the following: 

9 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

10 are authorized to be appropriated to carry out this sec11 tion— 

12 ‘‘(1) such sums as are necessary for each of fis13 cal years 2008 through 2012; and 

14 ‘‘(2) $2,000,000 for each of fiscal years 2013 

15 through 2017.’’. 

16 SEC. 7502. ASSISTANCE TO BUILD LOCAL CAPACITY IN AG17 RICULTURAL BIOSECURITY PLANNING, PREP18 ARATION, AND RESPONSE. 

19 Section 14113 of the Food, Conservation, and En20 ergy Act of 2008 (7 U.S.C. 8913) is amended— 

21 (1) in subsection (a)(2)— 

22 (A) by striking ‘‘such sums as may be nec23 essary’’; and 
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1 (B) by striking ‘‘subsection’’ and all that 

2 follows and inserting the following: ‘‘sub3 section— 

4 ‘‘(1) such sums as are necessary for each of fis5 cal years 2008 through 2012; and 

6 ‘‘(2) $15,000,000 for each of fiscal years 2013 

7 through 2017.’’; and 

8 (2) in subsection (b)(2), by striking ‘‘is author9 ized to be appropriated to carry out this subsection’’ 

10 and all that follows and inserting the following: ‘‘are 

11 authorized to be appropriated to carry out this sub12 section— 

13 ‘‘(1) $25,000,000 for each of fiscal years 2008 

14 through 2012; and 

15 ‘‘(2) $15,000,000 for each of fiscal years 2013 

16 through 2017.’’. 

17 SEC. 7503. RESEARCH AND DEVELOPMENT OF AGRICUL18 TURAL COUNTERMEASURES. 

19 Section 14121(b) of the Food, Conservation, and En20 ergy Act of 2008 (7 U.S.C. 8921(b)) is amended by strik21 ing ‘‘is authorized to be appropriated to carry out this sec22 tion’’ and all that follows and inserting the following: ‘‘are 

23 authorized to be appropriated to carry out this section— 

24 ‘‘(1) $50,000,000 for each of fiscal years 2008 

25 through 2012; and 
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1 ‘‘(2) $15,000,000 for each of fiscal years 2013 

2 through 2017.’’. 

3 SEC. 7504. AGRICULTURAL BIOSECURITY GRANT PROGRAM. 

4 Section 14122(e) of the Food, Conservation, and En5 ergy Act of 2008 (7 U.S.C. 8922(e)) is amended— 

6 (1) by striking ‘‘such sums as are necessary’’; 

7 and 

8 (2) by striking ‘‘section’’ and all that follows 

9 and inserting the following: ‘‘section— 

10 ‘‘(1) such sums as are necessary for each of fis11 cal years 2008 through 2012, to remain available 

12 until expended; and 

13 ‘‘(2) $5,000,000 for each of fiscal years 2013 

14 through 2017, to remain available until expended.’’. 

15 PART II—MISCELLANEOUS 

16 SEC. 7511. GRAZINGLANDS RESEARCH LABORATORY. 

17 Section 7502 of the Food, Conservation, and Energy 

18 Act of 2008 (Public Law 110–246; 112 Stat. 2019) is 

19 amended by striking ‘‘for the 5-year period beginning on 

20 the date of enactment of this Act’’ and inserting ‘‘until 

21 September 30, 2017’’. 

22 SEC. 7512. BUDGET SUBMISSION AND FUNDING. 

23 Section 7506 of the Food, Conservation, and Energy 

24 Act of 2008 (7 U.S.C. 7614c) is amended— 

25 (1) in subsection (a)— 
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1 (A) by striking ‘‘(a) DEFINITION OF COM2 PETITIVE PROGRAMS.—In this section, the 

3 term’’; and inserting the following: 

4 ‘‘(a) DEFINITIONS.—In this section: 

5 ‘‘(1) COMPETITIVE PROGRAMS.—The term’’; 

6 and 

7 (B) by adding at the end the following: 

8 ‘‘(2) COVERED PROGRAM.—The term ‘covered 

9 program’ means— 

10 ‘‘(A) each research program carried out by 

11 the Agricultural Research Service or the Eco12 nomic Research Service for which annual appro13 priations are requested in the annual budget 

14 submission of the President; and 

15 ‘‘(B) each competitive program (as defined 

16 in section 251(f)(1) of the Department of Agri17 culture Reorganization Act of 1994 (7 U.S.C. 

18 6971(f)(1))) carried out by the National Insti19 tute of Food and Agriculture for which annual 

20 appropriations are requested in the annual 

21 budget submission of the President. 

22 ‘‘(3) REQUEST FOR AWARDS.—The term ‘re23 quest for awards’ means a funding announcement 

24 published by the National Institute of Food and Ag25 riculture that provides detailed information on fund-
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1 ing opportunities at the Institute, including the pur2 pose, eligibility, restriction, focus areas, evaluation 

3 criteria, regulatory information, and instructions on 

4 how to apply for such opportunities.’’; and 

5 (2) by adding at the end the following: 

6 ‘‘(e) ADDITIONAL PRESIDENTIAL BUDGET SUBMIS7 SION REQUIREMENT.— 

8 ‘‘(1) IN GENERAL.—Each year, the President 

9 shall submit to Congress, together with the annual 

10 budget submission of the President, the information 

11 described in paragraph (2) for each funding request 

12 for a covered program. 

13 ‘‘(2) INFORMATION DESCRIBED.—The informa14 tion described in this paragraph includes— 

15 ‘‘(A) baseline information, including with 

16 respect to each covered program— 

17 ‘‘(i) the funding level for the program 

18 for the fiscal year preceding the year the 

19 annual budget submission of the President 

20 is submitted; 

21 ‘‘(ii) the funding level requested in the 

22 annual budget submission of the President, 

23 including any increase or decrease in the 

24 funding level; and 
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1 ‘‘(iii) an explanation justifying any 

2 change from the funding level specified in 

3 clause (i) to the level specified in clause 

4 (ii); 

5 ‘‘(B) with respect to each covered program 

6 that is carried out by the Economic Research 

7 Service or the Agricultural Research Service, 

8 the location and staff years of the program; 

9 ‘‘(C) the proposed funding levels to be allo10 cated to, and the expected publication date, 

11 scope, and allocation level for, each request for 

12 awards to be published under— 

13 ‘‘(i) each priority area specified in sec14 tion 2(b)(2) of the Competitive, Special, 

15 and Facilities Research Grant Act (7 

16 U.S.C. 450i(b)(2)); 

17 ‘‘(ii) each research and extension 

18 project carried out under section 1621(a) 

19 of the Food, Agriculture, Conservation, 

20 and Trade Act of 1990 (7 U.S.C. 

21 5811(a)); 

22 ‘‘(iii) each grant awarded under sec23 tion 1672B(a) of the Food, Agriculture, 

24 Conservation, and Trade Act of 1990 (7 

25 U.S.C. 5925b(a)); 
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1 ‘‘(iv) each grant awarded under sec2 tion 412(b) of the Agricultural Research, 

3 Extension, and Education Reform Act of 

4 1998 (7 U.S.C. 7632(b)); and 

5 ‘‘(v) each grant awarded under 

6 7405(c)(1) of the Farm Security and 

7 Rural Investment Act of 2002 (7 U.S.C. 

8 3319f(c)(1)); or 

9 ‘‘(D) any other information the Secretary 

10 determines will increase congressional oversight 

11 with respect to covered programs. 

12 ‘‘(3) PROHIBITION.—Unless the President sub13 mits the information described in paragraph (2)(C) 

14 for a fiscal year, the President may not carry out 

15 any program during the fiscal year that is author16 ized under— 

17 ‘‘(A) section 2(b) of the Competitive, Spe18 cial, and Facilities Research Grant Act (7 

19 U.S.C. 450i(b)); 

20 ‘‘(B) section 1621 of the Food, Agri21 culture, Conservation, and Trade Act of 1990 

22 (7 U.S.C. 5811); 

23 ‘‘(C) section 1672B of the Food, Agri24 culture, Conservation, and Trade Act of 1990 

25 (7 U.S.C. 5925b); 
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1 ‘‘(D) section 411 of the Agricultural Re2 search, Extension, and Education Reform Act 

3 of 1998 (7 U.S.C. 7631); or 

4 ‘‘(E) section 7405 of the Farm Security 

5 and Rural Investment Act of 2002 (7 U.S.C. 

6 3319f). 

7 ‘‘(f) REPORT OF THE SECRETARY OF AGRI8 CULTURE.—Each year on a date that is not later than 

9 the date on which the President submits the annual budg10 et submission, the Secretary shall submit to Congress a 

11 report containing a description of the agricultural re12 search, extension, and education activities carried out by 

13 the Federal Government during the fiscal year that imme14 diately precedes the year for which the report is submitted, 

15 including— 

16 ‘‘(1) a review of the extent to which those ac17 tivities— 

18 ‘‘(A) are duplicative or overlap within the 

19 Department of Agriculture; or 

20 ‘‘(B) are similar to activities carried out 

21 by— 

22 ‘‘(i) other Federal agencies; 

23 ‘‘(ii) the States (including the District 

24 of Columbia, the Commonwealth of Puerto 
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1 Rico and other territories or possessions of 

2 the United States); 

3 ‘‘(iii) institutions of higher education 

4 (as defined in section 101 of the Higher 

5 Education Act of 1965 (20 U.S.C. 1001)); 

6 or 

7 ‘‘(iv) the private sector; and 

8 ‘‘(2) for each report submitted under this sec9 tion on or after January 1, 2013, a 5-year projection 

10 of national priorities with respect to agricultural re11 search, extension, and education, taking into account 

12 both domestic and international needs.’’. 

13 SEC. 7513. NATURAL PRODUCTS RESEARCH PROGRAM. 

14 Section 7525 of the Food, Conservation, and Energy 

15 Act of 2008 (7 U.S.C. 5937) is amended by striking sub16 section (e) and inserting the following: 

17 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

18 is authorized to be appropriated to carry out this section 

19 $7,000,000 for each of fiscal years 2013 through 2017.’’. 

20 SEC. 7514. SUN GRANT PROGRAM. 

21 (a) IN GENERAL.—Section 7526 of the Food, Con22 servation, and Energy Act of 2008 (7 U.S.C. 8114) is 

23 amended— 

24 (1) in subsection (a)(4)(B), by striking ‘‘the 

25 Department of Energy’’ and inserting ‘‘other appro-
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1 priate Federal agencies (as determined by the Sec2 retary)’’; 

3 (2) in subsection (b)(1)— 

4 (A) in subparagraph (A), by striking ‘‘at 

5 South Dakota State University’’; 

6 (B) in subparagraph (B), by striking ‘‘at 

7 the University of Tennessee at Knoxville’’; 

8 (C) in subparagraph (C), by striking ‘‘at 

9 Oklahoma State University’’; 

10 (D) in subparagraph (D), by striking ‘‘at 

11 Oregon State University’’; 

12 (E) in subparagraph (E), by striking ‘‘at 

13 Cornell University’’; and 

14 (F) in subparagraph (F), by striking ‘‘at 

15 the University of Hawaii’’; 

16 (3) in subsection (c)(1)— 

17 (A) in subparagraph (B), by striking 

18 ‘‘multistate’’ and all that follows through ‘‘tech19 nology implementation’’ and inserting ‘‘inte20 grated, multistate research, extension, and edu21 cation programs on technology development and 

22 technology implementation’’; 

23 (B) by striking subparagraph (C); and 

24 (C) by redesignating subparagraph (D) as 

25 subparagraph (C); 
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1 (4) in subsection (d)— 

2 (A) in paragraph (1)— 

3 (i) by striking ‘‘gasification’’ and in4 serting ‘‘bioproducts’’; and 

5 (ii) by striking ‘‘the Department of 

6 Energy’’ and inserting ‘‘other appropriate 

7 Federal agencies’’; 

8 (B) by striking paragraph (2); 

9 (C) by redesignating paragraphs (3) and 

10 (4) as paragraphs (2) and (3), respectively; and 

11 (D) in paragraph (1), by striking ‘‘in ac12 cordance with paragraph (2)’’; and 

13 (5) in subsection (g), by striking ‘‘2012’’ and 

14 inserting ‘‘2017’’. 

15 (b) CONFORMING AMENDMENTS.—Section 7526(f) of 

16 the Food, Conservation, and Energy Act of 2008 (7 

17 U.S.C. 8114(f)) is amended— 

18 (1) in paragraph (1), by striking ‘‘subsection 

19 (c)(1)(D)(i)’’ and inserting ‘‘subsection (c)(1)(C)(i)’’; 

20 and 

21 (2) in paragraph (2), by striking ‘‘subsection 

22 (d)(1)’’ and inserting ‘‘subsection (d)’’. 
890 

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1 Subtitle F—Miscellaneous 

2 SEC. 7601. FOUNDATION FOR FOOD AND AGRICULTURE RE3 SEARCH. 

4 (a) DEFINITIONS.—In this section: 

5 (1) BOARD.—The term ‘‘Board’’ means the 

6 Board of Directors described in subsection (e). 

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

8 means the Department of Agriculture. 

9 (3) FOUNDATION.—The term ‘‘Foundation’’ 

10 means the Foundation for Food and Agriculture Re11 search established under subsection (b). 

12 (4) SECRETARY.—The term ‘‘Secretary’’ means 

13 the Secretary of Agriculture. 

14 (b) ESTABLISHMENT.— 

15 (1) IN GENERAL.—The Secretary shall establish 

16 a nonprofit corporation to be known as the ‘‘Foun17 dation for Food and Agriculture Research’’. 

18 (2) STATUS.—The Foundation shall not be an 

19 agency or instrumentality of the United States Gov20 ernment. 

21 (c) PURPOSES.—The purposes of the Foundation 

22 shall be— 

23 (1) to advance the research mission of the De24 partment by supporting agricultural research activi-
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†S 3240 ES

1 ties focused on addressing key problems of national 

2 and international significance including— 

3 (A) plant health, production, and plant 

4 products; 

5 (B) animal health, production, and prod6 ucts; 

7 (C) food safety, nutrition, and health; 

8 (D) renewable energy, natural resources, 

9 and the environment; 

10 (E) agricultural and food security; 

11 (F) agriculture systems and technology; 

12 and 

13 (G) agriculture economics and rural com14 munities; and 

15 (2) to foster collaboration with agricultural re16 searchers from the Federal Government, institutions 

17 of higher education, industry, and nonprofit organi18 zations. 

19 (d) DUTIES.— 

20 (1) IN GENERAL.—The Foundation shall— 

21 (A) award grants to, or enter into con22 tracts, memoranda of understanding, or cooper23 ative agreements with, scientists and entities, 

24 which may include agricultural research agen25 cies in the Department, university consortia, 
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1 public-private partnerships, institutions of high2 er education, nonprofit organizations, and in3 dustry, to efficiently and effectively advance the 

4 goals and priorities of the Foundation; 

5 (B) in consultation with the Secretary— 

6 (i) identify existing and proposed Fed7 eral intramural and extramural research 

8 and development programs relating to the 

9 purposes of the Foundation described in 

10 subsection (c); and 

11 (ii) coordinate Foundation activities 

12 with those programs so as to minimize du13 plication of existing efforts; 

14 (C) identify unmet and emerging agricul15 tural research needs after reviewing the Road16 map for Agricultural Research, Education and 

17 Extension as required by section 7504 of the 

18 Food, Conservation, and Energy Act of 2008 (7 

19 U.S.C. 7614a); 

20 (D) facilitate technology transfer and re21 lease of information and data gathered from the 

22 activities of the Foundation to the agricultural 

23 research community; 
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†S 3240 ES

1 (E) promote and encourage the develop2 ment of the next generation of agricultural re3 search scientists; and 

4 (F) carry out such other activities as the 

5 Board determines to be consistent with the pur6 poses of the Foundation. 

7 (2) AUTHORITY.—Subject to paragraph (3), the 

8 Foundation shall be the sole entity responsible for 

9 carrying out the duties enumerated in this sub10 section. 

11 (3) RELATIONSHIP TO OTHER ACTIVITIES.— 

12 The activities described in paragraph (1) shall be 

13 supplemental to any other activities at the Depart14 ment and shall not preempt any authority or respon15 sibility of the Department under another provision 

16 of law. 

17 (e) BOARD OF DIRECTORS.— 

18 (1) ESTABLISHMENT.—The Foundation shall 

19 be governed by a Board of Directors. 

20 (2) COMPOSITION.— 

21 (A) IN GENERAL.—The Board shall be 

22 composed of appointed and ex-officio, nonvoting 

23 members. 
894 

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1 (B) EX-OFFICIO MEMBERS.—The ex-officio 

2 members of the Board shall be the following in3 dividuals or designees: 

4 (i) The Secretary. 

5 (ii) The Under Secretary of Agri6 culture for Research, Education, and Eco7 nomics. 

8 (iii) The Administrator of the Agricul9 tural Research Service. 

10 (iv) The Director of the National In11 stitute of Food and Agriculture. 

12 (v) The Director of the National 

13 Science Foundation. 

14 (C) APPOINTED MEMBERS.— 

15 (i) IN GENERAL.—The ex-officio mem16 bers of the Board under subparagraph (B) 

17 shall, by majority vote, appoint to the 

18 Board 15 individuals, of whom— 

19 (I) 8 shall be selected from a list 

20 of candidates to be provided by the 

21 National Academy of Sciences; and 

22 (II) 7 shall be selected from lists 

23 of candidates provided by industry. 

24 (ii) REQUIREMENTS.— 
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1 (I) EXPERTISE.—The ex-officio 

2 members shall ensure that a majority 

3 of the members of the Board have ac4 tual experience in agricultural re5 search and, to the extent practicable, 

6 represent diverse sectors of agri7 culture. 

8 (II) LIMITATION.—No employee 

9 of the Federal Government may serve 

10 as an appointed member of the Board 

11 under this subparagraph. 

12 (III) NOT FEDERAL EMPLOY13 MENT.—Appointment to the Board 

14 under this subparagraph shall not 

15 constitute Federal employment. 

16 (iii) AUTHORITY.—All appointed 

17 members of the Board shall be voting 

18 members. 

19 (D) CHAIR.—The Board shall, from among 

20 the members of the Board, designate an indi21 vidual to serve as Chair of the Board. 

22 (3) INITIAL MEETING.—Not later than 60 days 

23 after the date of enactment of this Act, the Sec24 retary shall convene a meeting of the ex-officio mem25 bers of the Board— 
896 

†S 3240 ES

1 (A) to incorporate the Foundation; and 

2 (B) to appoint the members of the Board 

3 in accordance with paragraph (2)(C)(i). 

4 (4) DUTIES.— 

5 (A) IN GENERAL.—The Board shall— 

6 (i) establish bylaws for the Founda7 tion that, at a minimum, include— 

8 (I) policies for the selection of fu9 ture Board members, officers, employ10 ees, agents, and contractors of the 

11 Foundation; 

12 (II) policies, including ethical 

13 standards, for— 

14 (aa) the acceptance, solicita15 tion, and disposition of donations 

16 and grants to the Foundation; 

17 and 

18 (bb) the disposition of assets 

19 of the Foundation, including ap20 propriate limits on the ability of 

21 donors to designate, by stipula22 tion or restriction, the use or re23 cipient of donated funds; 

24 (III) policies that would subject 

25 all employees, fellows, trainees, and 
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†S 3240 ES

1 other agents of the Foundation (in2 cluding members of the Board) to the 

3 conflict of interest standards under 

4 section 208 of title 18, United States 

5 Code; 

6 (IV) policies for writing, editing, 

7 printing, publishing, and vending of 

8 books and other materials; 

9 (V) policies for the conduct of 

10 the general operations of the Founda11 tion, including a cap on administrative 

12 expenses for recipients of a grant, 

13 contract, or cooperative agreement 

14 from the Foundation; and 

15 (VI) specific duties for the Exec16 utive Director; 

17 (ii) prioritize and provide overall di18 rection for the activities of the Foundation; 

19 (iii) evaluate the performance of the 

20 Executive Director; and 

21 (iv) carry out any other necessary ac22 tivities regarding the Foundation. 

23 (B) ESTABLISHMENT OF BYLAWS.—In es24 tablishing bylaws under subparagraph (A)(i), 
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†S 3240 ES

1 the Board shall ensure that the bylaws do 

2 not— 

3 (i) reflect unfavorably on the ability of 

4 the Foundation to carry out the duties of 

5 the Foundation in a fair and objective 

6 manner; or 

7 (ii) compromise, or appear to com8 promise, the integrity of any governmental 

9 agency or program, or any officer or em10 ployee employed by or involved in a govern11 mental agency or program. 

12 (5) TERMS AND VACANCIES.— 

13 (A) TERMS.— 

14 (i) IN GENERAL.—The term of each 

15 member of the Board appointed under 

16 paragraph (2)(C) shall be 5 years. 

17 (ii) PARTIAL TERMS.—If a member of 

18 the Board does not serve the full term ap19 plicable under clause (i), the individual ap20 pointed to fill the resulting vacancy shall 

21 be appointed for the remainder of the term 

22 of the predecessor of the individual. 

23 (iii) TRANSITION.—A member of the 

24 Board may continue to serve after the ex-
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†S 3240 ES

1 piration of the term of the member until a 

2 successor is appointed. 

3 (B) VACANCIES.—Any vacancy in the 

4 membership of the Board shall be filled in the 

5 manner in which the original position was made 

6 and shall not affect the power of the remaining 

7 members to execute the duties of the Board. 

8 (6) COMPENSATION.—Members of the Board 

9 may not receive compensation for service on the 

10 Board but may be reimbursed for travel, subsist11 ence, and other necessary expenses incurred in car12 rying out the duties of the Board. 

13 (7) MEETINGS AND QUORUM.—A majority of 

14 the members of the Board shall constitute a quorum 

15 for purposes of conducting business of the Board. 

16 (f) ADMINISTRATION.— 

17 (1) EXECUTIVE DIRECTOR.— 

18 (A) IN GENERAL.—The Board shall hire 

19 an Executive Director who shall carry out such 

20 duties and responsibilities as the Board may 

21 prescribe. 

22 (B) SERVICE.—The Executive Director 

23 shall serve at the pleasure of the Board. 

24 (2) ADMINISTRATIVE POWERS.— 
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1 (A) IN GENERAL.—In carrying out this 

2 section, the Board, acting through the Execu3 tive Director, may— 

4 (i) adopt, alter, and use a corporate 

5 seal, which shall be judicially noticed; 

6 (ii) hire, promote, compensate, and 

7 discharge 1 or more officers, employees, 

8 and agents, as may be necessary, and de9 fine the duties of the officers, employees, 

10 and agents; 

11 (iii) solicit and accept any funds, 

12 gifts, grants, devises, or bequests of real or 

13 personal property made to the Foundation, 

14 including such support from private enti15 ties; 

16 (iv) prescribe the manner in which— 

17 (I) real or personal property of 

18 the Foundation is acquired, held, and 

19 transferred; 

20 (II) general operations of the 

21 Foundation are to be conducted; and 

22 (III) the privileges granted to the 

23 Board by law are exercised and en24 joyed; 
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1 (v) with the consent of the applicable 

2 executive department or independent agen3 cy, use the information, services, and facili4 ties of the department or agency in car5 rying out this section; 

6 (vi) enter into contracts with public 

7 and private organizations for the writing, 

8 editing, printing, and publishing of books 

9 and other material; 

10 (vii) hold, administer, invest, and 

11 spend any gift, devise, or bequest of real or 

12 personal property made to the Foundation; 

13 (viii) enter into such contracts, leases, 

14 cooperative agreements, and other trans15 actions as the Board considers appropriate 

16 to conduct the activities of the Foundation; 

17 (ix) modify or consent to the modifica18 tion of any contract or agreement to which 

19 the Foundation is a party or in which the 

20 Foundation has an interest; 

21 (x) take such action as may be nec22 essary to obtain patents and licenses for 

23 devices and procedures developed by the 

24 Foundation and employees of the Founda25 tion; 
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1 (xi) sue and be sued in the corporate 

2 name of the Foundation, and complain and 

3 defend in courts of competent jurisdiction; 

4 (xii) appoint other groups of advisors 

5 as may be determined necessary to carry 

6 out the functions of the Foundation; and 

7 (xiii) exercise such other incidental 

8 powers as are necessary to carry out the 

9 duties and functions of the Foundation in 

10 accordance with this section 

11 (B) LIMITATION.—No appointed member 

12 of the Board or officer or employee of the 

13 Foundation or of any program established by 

14 the Foundation (other than ex-officio members 

15 of the Board) shall exercise administrative con16 trol over any Federal employee 

17 (3) RECORDS.— 

18 (A) AUDITS.—The Foundation shall— 

19 (i) provide for annual audits of the fi20 nancial condition of the Foundation; and 

21 (ii) make the audits, and all other 

22 records, documents, and other papers of 

23 the Foundation, available to the Secretary 

24 and the Comptroller General of the United 

25 States for examination or audit. 
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1 (B) REPORTS.— 

2 (i) ANNUAL REPORT ON FOUNDA3 TION.— 

4 (I) IN GENERAL.—Not later than 

5 5 months following the end of each 

6 fiscal year, the Foundation shall pub7 lish a report for the preceding fiscal 

8 year that includes— 

9 (aa) a description of Foun10 dation activities, including ac11 complishments; and 

12 (bb) a comprehensive state13 ment of the operations and finan14 cial condition of the Foundation. 

15 (II) FINANCIAL CONDITION.— 

16 Each report under subclause (I) shall 

17 include a description of all gifts or 

18 grants to the Foundation of real or 

19 personal property or money, which 

20 shall include— 

21 (aa) the source of the gifts 

22 or grants; and 

23 (bb) any restrictions on the 

24 purposes for which the gift or 

25 grant may be used. 
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1 (III) AVAILABILITY.—The Foun2 dation shall— 

3 (aa) make copies of each re4 port submitted under subclause 

5 (I) available for public inspection; 

6 and 

7 (bb) on request, provide a 

8 copy of the report to any indi9 vidual. 

10 (IV) PUBLIC MEETING.—The 

11 Board shall hold an annual public 

12 meeting to summarize the activities of 

13 the Foundation. 

14 (ii) GRANT REPORTING.—Any recipi15 ent of a grant under subsection (d)(1)(A) 

16 shall provide the Foundation with a report 

17 at the conclusion of any research or studies 

18 conducted the describes the results of the 

19 research or studies, including any data 

20 generated. 

21 (4) INTEGRITY.— 

22 (A) IN GENERAL.—To ensure integrity in 

23 the operations of the Foundation, the Board 

24 shall develop and enforce procedures relating to 

25 standards of conduct, financial disclosure state-
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1 ments, conflict of interest (including recusal 

2 and waiver rules), audits, and any other mat3 ters determined appropriate by the Board. 

4 (B) FINANCIAL CONFLICTS OF INTER5 EST.—Any individual who is an officer, em6 ployee, or member of the Board is prohibited 

7 from any participation in deliberations by the 

8 Foundation of a matter that would directly or 

9 predictably affect any financial interest of— 

10 (i) the individual; 

11 (ii) a relative (as defined in section 

12 109 of the Ethics in Government Act of 

13 1978 (5 U.S.C. App.)) of that individual; 

14 or 

15 (iii) a business organization or other 

16 entity in which the individual has an inter17 est, including an organization or other en18 tity with which the individual is negoti19 ating employment. 

20 (5) INTELLECTUAL PROPERTY.—The Board 

21 shall adopt written standards to govern ownership of 

22 any intellectual property rights derived from the col23 laborative efforts of the Foundation. 

24 (6) LIABILITY.—The United States shall not be 

25 liable for any debts, defaults, acts, or omissions of 
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1 the Foundation nor shall the full faith and credit of 

2 the United States extend to any obligations of the 

3 Foundation. 

4 (g) FUNDS.— 

5 (1) MANDATORY FUNDING.— 

6 (A) IN GENERAL.—On October 1, 2012, of 

7 the funds of the Commodity Credit Corporation, 

8 the Secretary shall transfer to the Foundation 

9 to carry out this section $100,000,000, to re10 main available until expended under the condi11 tions described in subparagraph (B). 

12 (B) CONDITIONS ON EXPENDITURE.—The 

13 Foundation may use the funds made available 

14 under subparagraph (A) to carry out the pur15 poses of the Foundation only to the extent that 

16 the Foundation secures an equal amount of 

17 non-Federal matching funds for each expendi18 ture. 

19 (C) PROHIBITION ON CONSTRUCTION.— 

20 None of the funds made available under sub21 paragraph (A) may be used for construction. 

22 (2) SEPARATION OF FUNDS.—The Executive 

23 Director shall ensure that any funds received under 

24 paragraph (1) are held in separate accounts from 
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1 funds received from nongovernmental entities as de2 scribed in subsection (f)(2)(A)(iii). 

3 SEC. 7602. OBJECTIVE AND SCHOLARLY AGRICULTURAL 

4 AND FOOD LAW RESEARCH AND INFORMA5 TION. 

6 (a) FINDINGS.—Congress finds that— 

7 (1) the farms, ranches, and forests of the 

8 United States are impacted by a complex and rap9 idly evolving web of international, Federal, State, 

10 and local laws (including regulations); 

11 (2) objective, scholarly, and authoritative agri12 cultural and food law research and information helps 

13 the farm, ranch, and forestry community contribute 

14 to the strength of the United States through im15 proved conservation, environmental protection, job 

16 creation, economic development, renewable energy 

17 production, outdoor recreational opportunities, and 

18 increased local and regional supplies of food, fiber, 

19 and fuel; and 

20 (3) the vast agricultural community of the 

21 United States, including farmers, ranchers, for22 esters, attorneys, policymakers, and extension per23 sonnel, need access to agricultural and food law re24 search and information provided by an objective, 

25 scholarly, and neutral source. 
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1 (b) PARTNERSHIPS.—The Secretary, acting through 

2 the National Agricultural Library, shall support the dis3 semination of objective, scholarly, and authoritative agri4 cultural and food law research and information by enter5 ing into partnerships with institutions of higher education 

6 that have expertise in agricultural and food law research 

7 and information. 

8 (c) RESTRICTION.—For each fiscal year, the Sec9 retary shall use not more than $1,000,000 of the amounts 

10 made available to the National Agricultural Library to 

11 carry out this section. 

12 TITLE VIII—FORESTRY 

13 Subtitle A—Repeal of Certain 

14 Forestry Programs 

15 SEC. 8001. FOREST LAND ENHANCEMENT PROGRAM. 

16 (a) REPEAL.—Section 4 of the Cooperative Forestry 

17 Assistance Act of 1978 (16 U.S.C. 2103) is repealed. 

18 (b) CONFORMING AMENDMENT.—Section 8002 of the 

19 Farm Security and Rural Investment Act of 2002 (Public 

20 Law 107–171; 16 U.S.C. 2103 note) is amended by strik21 ing subsection (a). 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall take effect on October 1, 2012. 
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1 SEC. 8002. WATERSHED FORESTRY ASSISTANCE PROGRAM. 

2 (a) REPEAL.—Section 6 of the Cooperative Forestry 

3 Assistance Act of 1978 (16 U.S.C. 2103b) is repealed. 

4 (b) EFFECTIVE DATE.—The amendment made by 

5 this section shall take effect on October 1, 2012. 

6 SEC. 8003. EXPIRED COOPERATIVE NATIONAL FOREST 

7 PRODUCTS MARKETING PROGRAM. 

8 Section 18 of the Cooperative Forestry Assistance 

9 Act of 1978 (16 U.S.C. 2112) is repealed. 

10 SEC. 8004. HISPANIC-SERVING INSTITUTION AGRICUL11 TURAL LAND NATIONAL RESOURCES LEAD12 ERSHIP PROGRAM. 

13 (a) REPEAL.—Section 8402 of the Food, Conserva14 tion, and Energy Act of 2008 (16 U.S.C. 1649a) is re15 pealed. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 this section shall take effect on October 1, 2012. 

18 SEC. 8005. TRIBAL WATERSHED FORESTRY ASSISTANCE 

19 PROGRAM. 

20 (a) REPEAL.—Section 303 of the Healthy Forests 

21 Restoration Act of 2003 (16 U.S.C. 6542) is repealed. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall take effect on October 1, 2012. 
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1 Subtitle B—Reauthorization of Co2 operative Forestry Assistance 

3 Act of 1978 Programs 

4 SEC. 8101. STATE-WIDE ASSESSMENT AND STRATEGIES FOR 

5 FOREST RESOURCES. 

6 Section 2A(f)(1) of the Cooperative Forestry Assist7 ance Act of 1978 (16 U.S.C. 2101a(f)(1)) is amended by 

8 striking ‘‘2012’’ and inserting ‘‘2017’’. 

9 SEC. 8102. FOREST STEWARDSHIP PROGRAM. 

10 Section 5(h) of the Cooperative Forestry Assistance 

11 Act of 1978 (16 U.S.C. 2103a(h)) is amended by striking 

12 ‘‘such sums as may be necessary thereafter’’ and inserting 

13 ‘‘$50,000,000 for each of fiscal years 2013 through 

14 2017’’. 

15 SEC. 8103. FOREST LEGACY PROGRAM. 

16 Section 7 of the Cooperative Forestry Assistance Act 

17 of 1978 (16 U.S.C. 2103c) is amended by striking sub18 section (m) and inserting the following: 

19 ‘‘(m) FUNDING.— 

20 ‘‘(1) AUTHORIZATION OF APPROPRIATIONS.— 

21 There is authorized to be appropriated to carry out 

22 this section $200,000,000 for each of fiscal years 

23 2013 through 2017. 

24 ‘‘(2) ADDITIONAL FUNDING SOURCES.—In ad25 dition to any funds appropriated for each fiscal year 
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1 to carry out this section, the Secretary may use any 

2 other Federal funds available to the Secretary.’’. 

3 SEC. 8104. COMMUNITY FOREST AND OPEN SPACE CON4 SERVATION PROGRAM. 

5 Section 7A of the Cooperative Forestry Assistance 

6 Act of 1978 (16 U.S.C. 2103d) is amended by striking 

7 subsection (g) and inserting the following: 

8 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

9 is authorized to be appropriated to carry out this section 

10 $50,000,000 for each of fiscal years 2013 through 2017.’’. 

11 SEC. 8105. URBAN AND COMMUNITY FORESTRY ASSIST12 ANCE. 

13 Section 9(i) of the Cooperative Forestry Assistance 

14 Act of 1978 (16 U.S.C. 2105(i)) is amended by striking 

15 ‘‘such sums as may be necessary for each fiscal year there16 after’’ and inserting ‘‘$50,000,000 for each of fiscal years 

17 2013 through 2017’’. 

18 Subtitle C—Reauthorization of 

19 Other Forestry-related Laws 

20 SEC. 8201. RURAL REVITALIZATION TECHNOLOGIES. 

21 Section 2371(d)(2) of the Food, Agriculture, Con22 servation, and Trade Act of 1990 (7 U.S.C. 6601(d)(2)) 

23 is amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 
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1 SEC. 8202. OFFICE OF INTERNATIONAL FORESTRY. 

2 Section 2405 of the Global Climate Change Preven3 tion Act of 1990 (7 U.S.C. 6704) is amended by striking 

4 subsection (d) and inserting the following: 

5 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—To 

6 carry out this section, there are authorized to be appro7 priated— 

8 ‘‘(1) such sums as are necessary for each of fis9 cal years 1996 through 2012; and 

10 ‘‘(2) $10,000,000 for each of fiscal years 2013 

11 through 2017.’’. 

12 SEC. 8203. INSECT INFESTATIONS AND RELATED DISEASES. 

13 (a) FINDINGS AND PURPOSES.—Section 401 of the 

14 Healthy Forests Restoration Act of 2003 (16 U.S.C. 

15 6551) is amended— 

16 (1) in subsection (a)— 

17 (A) by redesignating paragraphs (3) 

18 through (12) as paragraphs (4) through (13), 

19 respectively; and 

20 (B) by inserting after paragraph (2) the 

21 following: 

22 ‘‘(3) the mountain pine beetle is— 

23 ‘‘(A) threatening and ravaging forests 

24 throughout the Western region of the United 

25 States, including Arizona, California, Colorado, 
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1 Idaho, Montana, Nevada, New Mexico, Oregon, 

2 and South Dakota; 

3 ‘‘(B) reaching epidemic populations and se4 verely impacting over 41,000,000 acres in west5 ern forests; and 

6 ‘‘(C) deteriorating forest health in national 

7 forests and, when combined with drought, dis8 ease, and storm damage, is resulting in extreme 

9 fire hazards in national forests across the West10 ern United States and endangering the eco11 nomic stability of surrounding adjacent commu12 nities, ranches, and parks;’’; and 

13 (2) in subsection (b)— 

14 (A) in paragraph (2), by striking ‘‘and’’ at 

15 the end; 

16 (B) in paragraph (3), by striking the pe17 riod at the end and inserting ‘‘; and’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(4) to provide for designation of treatment 

20 areas pursuant to section 405.’’. 

21 (b) DESIGNATION OF TREATMENT AREAS.—Title IV 

22 of the Healthy Forests Restoration Act of 2003 (16 

23 U.S.C. 6551 et seq.) is amended— 
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1 (1) by redesignating sections 405 and 406 (16 

2 U.S.C. 6555, 6556) as sections 406 and 407, respec3 tively; and 

4 (2) by inserting after section 404 (16 U.S.C. 

5 6554) the following: 

6 ‘‘SEC. 405. DESIGNATION OF TREATMENT AREAS. 

7 ‘‘(a) DESIGNATION OF TREATMENT AREAS.—Not 

8 later than 60 days after the date of enactment of the Agri9 culture Reform, Food, and Jobs Act of 2012, the Sec10 retary shall designate treatment areas on at least 1 na11 tional forest in each State, if requested by the Governor 

12 of the State, that the Secretary determines, based on an13 nual forest health surveys, are experiencing declining for14 est health due to insect or disease infestation. 

15 ‘‘(b) TREATMENT OF AREAS.—The Secretary may 

16 carry out treatments to address the insect or disease infes17 tation in the areas designated under subsection (a) in ac18 cordance with sections 104, 105, 106, and 401. 

19 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 

20 is authorized to be appropriated to carry out this section 

21 $200,000,000 for each of fiscal years 2013 through 

22 2017.’’. 

23 (c) AUTHORIZATION OF APPROPRIATIONS.—Section 

24 407 of the Healthy Forests Restoration Act of 2003 (as 
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1 redesignated by subsection (b)(1)) is amended by striking 

2 ‘‘2008’’ and inserting ‘‘2017’’. 

3 SEC. 8204. STEWARDSHIP END RESULT CONTRACTING 

4 PROJECTS. 

5 (a) IN GENERAL.—Title VI of the Healthy Forests 

6 Restoration Act of 2003 (16 U.S.C. 6591) is amended by 

7 adding at the end the following: 

8 ‘‘SEC. 602. STEWARDSHIP END RESULT CONTRACTING 

9 PROJECTS. 

10 ‘‘(a) DEFINITIONS.—In this section: 

11 ‘‘(1) CHIEF.—The term ‘Chief’ means the Chief 

12 of the Forest Service. 

13 ‘‘(2) DIRECTOR.—The term ‘Director’ means 

14 the Director of the Bureau of Land Management. 

15 ‘‘(b) PROJECTS.—The Chief and the Director, via 

16 agreement or contract as appropriate, may enter into 

17 stewardship contracting projects with private persons or 

18 other public or private entities to perform services to 

19 achieve land management goals for the national forests 

20 and the public lands that meet local and rural community 

21 needs. 

22 ‘‘(c) LAND MANAGEMENT GOALS.—The land man23 agement goals of a project under subsection (b) may in24 clude— 
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1 ‘‘(1) road and trail maintenance or obliteration 

2 to restore or maintain water quality; 

3 ‘‘(2) soil productivity, habitat for wildlife and 

4 fisheries, or other resource values; 

5 ‘‘(3) setting of prescribed fires to improve the 

6 composition, structure, condition, and health of 

7 stands or to improve wildlife habitat; 

8 ‘‘(4) removing vegetation or other activities to 

9 promote healthy forest stands, reduce fire hazards, 

10 or achieve other land management objectives; 

11 ‘‘(5) watershed restoration and maintenance; 

12 ‘‘(6) restoration and maintenance of wildlife 

13 and fish; or 

14 ‘‘(7) control of noxious and exotic weeds and re15 establishing. 

16 ‘‘(d) AGREEMENTS OR CONTRACTS.— 

17 ‘‘(1) PROCUREMENT PROCEDURE.—A source 

18 for performance of an agreement or contract under 

19 subsection (b) shall be selected on a best-value basis, 

20 including consideration of source under other public 

21 and private agreements or contracts. 

22 ‘‘(2) CONTRACT FOR SALE OF PROPERTY.—A 

23 contract entered into under this section may, at the 

24 discretion of the Secretary of Agriculture, be consid25 ered a contract for the sale of property under such 
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1 terms as the Secretary may prescribe without regard 

2 to any other provision of law. 

3 ‘‘(3) TERM.— 

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

5 subparagraph (B), the Chief and the Director 

6 may enter into a contract under subsection (b) 

7 in accordance with section 3903 of title 41, 

8 United States Code. 

9 ‘‘(B) MAXIMUM.—The period of the con10 tract under subsection (b) may exceed 5 years 

11 but may not exceed 10 years. 

12 ‘‘(4) OFFSETS.— 

13 ‘‘(A) IN GENERAL.—The Chief and the Di14 rector may apply the value of timber or other 

15 forest products removed as an offset against the 

16 cost of services received under the agreement or 

17 contract described in subsection (b). 

18 ‘‘(B) METHODS OF APPRAISAL.—The value 

19 of timber or other forest products used as an 

20 offset under subparagraph (A)— 

21 ‘‘(i) shall be determined using appro22 priate methods of appraisal commensurate 

23 with the quantity of products to be re24 moved; and 

25 ‘‘(ii) may— 
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1 ‘‘(I) be determined using a unit 

2 of measure appropriate to the con3 tracts; and 

4 ‘‘(II) may include valuing prod5 ucts on a per-acre basis. 

6 ‘‘(5) RELATION TO OTHER LAWS.—Notwith7 standing subsections (d) and (g) of section 14 of the 

8 National Forest Management Act of 1976 (16 

9 U.S.C. 472a), the Chief may enter into an agree10 ment or contract under subsection (b). 

11 ‘‘(6) CONTRACTING OFFICER.—Notwithstanding 

12 any other provision of law, the Secretary or the Sec13 retary of the Interior may determine the appropriate 

14 contracting officer to enter into and administer an 

15 agreement or contract under subsection (b). 

16 ‘‘(e) RECEIPTS.— 

17 ‘‘(1) IN GENERAL.—The Chief and the Director 

18 may collect monies from an agreement or contract 

19 under subsection (b) if the collection is a secondary 

20 objective of negotiating the contract that will best 

21 achieve the purposes of this section. 

22 ‘‘(2) USE.—Monies from an agreement or con23 tract under subsection (b)— 

24 ‘‘(A) may be retained by the Chief and the 

25 Director; and 
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1 ‘‘(B) shall be available for expenditure 

2 without further appropriation at the project site 

3 from which the monies are collected or at an4 other project site. 

5 ‘‘(3) RELATION TO OTHER LAWS.— 

6 ‘‘(A) IN GENERAL.—Notwithstanding any 

7 other provision of law, the value of services re8 ceived by the Chief or the Director under a 

9 stewardship contract project conducted under 

10 this section, and any payments made or re11 sources provided by the contractor, Chief, or 

12 Director shall not be considered monies received 

13 from the National Forest System or the public 

14 lands. 

15 ‘‘(B) KNUTSON-VANDERBERG ACT.—The 

16 Act of June 9, 1930 (commonly known as the 

17 ‘Knutson-Vanderberg Act’) (16 U.S.C. 576 et 

18 seq.) shall not apply to any agreement or con19 tract under subsection (b). 

20 ‘‘(f) COSTS OF REMOVAL.—Notwithstanding the fact 

21 that a contractor did not harvest the timber, the Chief 

22 may collect deposits from a contractor covering the costs 

23 of removal of timber or other forest products under— 

24 ‘‘(1) the Act of August 11, 1916 (16 U.S.C. 

25 490); and 
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1 ‘‘(2) and the Act of June 30, 1914 (16 U.S.C. 

2 498). 

3 ‘‘(g) PERFORMANCE AND PAYMENT GUARANTEES.— 

4 ‘‘(1) IN GENERAL.—The Chief and the Director 

5 may require performance and payment bonds under 

6 sections 28.103–2 and 28.103–3 of the Federal Ac7 quisition Regulation, in an amount that the con8 tracting officer considers sufficient to protect the in9 vestment in receipts by the Federal Government 

10 generated by the contractor from the estimated 

11 value of the forest products to be removed under a 

12 contract under subsection (b). 

13 ‘‘(2) EXCESS OFFSET VALUE.—If the offset 

14 value of the forest products exceeds the value of the 

15 resource improvement treatments, the Chief and the 

16 Director may— 

17 ‘‘(A) collect any residual receipts under the 

18 Act of June 9, 1930 (commonly known as the 

19 ‘Knutson-Vanderberg Act’) (16 U.S.C. 576 et 

20 seq.); and 

21 ‘‘(B) apply the excess to other authorized 

22 stewardship projects. 

23 ‘‘(h) MONITORING AND EVALUATION.— 

24 ‘‘(1) IN GENERAL.—The Chief and the Director 

25 shall establish a multiparty monitoring and evalua-
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1 tion process that accesses the stewardship con2 tracting projects conducted under this section. 

3 ‘‘(2) PARTICIPANTS.—Other than the Chief and 

4 Director, participants in the process described in 

5 paragraph (1) may include— 

6 ‘‘(A) any cooperating governmental agen7 cies, including tribal governments; and 

8 ‘‘(B) any other interested groups or indi9 viduals. 

10 ‘‘(i) REPORTING.—Not later than 1 year after the 

11 date of enactment of this section, and annually thereafter, 

12 the Chief and the Director shall report to the Committee 

13 on Agriculture, Nutrition, and Forestry of the Senate and 

14 the Committee on Agriculture of the House of Representa15 tives on— 

16 ‘‘(1) the status of development, execution, and 

17 administration of agreements or contracts under 

18 subsection (b); 

19 ‘‘(2) the specific accomplishments that have re20 sulted; and 

21 ‘‘(3) the role of local communities in the devel22 opment of agreements or contract plans.’’. 

23 (b) CONFORMING AMENDMENT.—Section 347 of the 

24 Department of the Interior and Related Agencies Appro-
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1 priations Act, 1999 (16 U.S.C. 2104 note; Public Law 

2 105–277) is repealed. 

3 SEC. 8205. HEALTHY FORESTS RESERVE PROGRAM. 

4 (a) DEFINITION OF ACREAGE OWNED BY INDIAN

5 TRIBES.—Section 502(e)(3) of the Healthy Forests Res6 toration Act (16 U.S.C. 6572(e)(3)) is amended— 

7 (1) in subparagraph (C), by striking ‘‘subpara8 graphs (A) and (B)’’ and inserting ‘‘clauses (i) and 

9 (ii)’’; 

10 (2) by redesignating subparagraphs (A) through 

11 (C) as clauses (i) through (iii), respectively, and in12 denting appropriately; and 

13 (3) by striking ‘‘In the case of’’ and inserting 

14 the following: 

15 ‘‘(A) DEFINITION OF ACREAGE OWNED BY

16 INDIAN TRIBES.—In this paragraph, the term 

17 ‘acreage owned by Indian tribes’ includes— 

18 ‘‘(i) land that is held in trust by the 

19 United States for Indian tribes or indi20 vidual Indians; 

21 ‘‘(ii) land, the title to which is held by 

22 Indian tribes or individual Indians subject 

23 to Federal restrictions against alienation 

24 or encumbrance; 
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1 ‘‘(iii) land that is subject to rights of 

2 use, occupancy, and benefit of certain In3 dian tribes; 

4 ‘‘(iv) land that is held in fee title by 

5 an Indian tribe; or 

6 ‘‘(v) land that is owned by a native 

7 corporation formed under section 17 of the 

8 Act of June 18, 1934 (commonly known as 

9 the ‘Indian Reorganization Act’) (25 

10 U.S.C. 477) or section 8 of the Alaska Na11 tive Claims Settlement Act (43 U.S.C. 

12 1607); or 

13 ‘‘(vi) a combination of 1 or more 

14 types of land described in clauses (i) 

15 through (v). 

16 ‘‘(B) ENROLLMENT OF ACREAGE.—In the 

17 case of’’. 

18 (b) CHANGE IN FUNDING SOURCE FOR HEALTHY

19 FORESTS RESERVE PROGRAM.—Section 508 of the 

20 Healthy Forests Restoration Act of 2003 (16 U.S.C. 

21 6578) is amended— 

22 (1) in subsection (a), by striking ‘‘IN GEN23 ERAL’’ and inserting ‘‘FISCAL YEARS 2009 

24 THROUGH 2012’’; 
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1 (2) by redesignating subsection (b) as sub2 section (d); and 

3 (3) by inserting after subsection (a) the fol4 lowing: 

5 ‘‘(b) FISCAL YEARS 2013 THROUGH 2017.—There is 

6 authorized to be appropriated to the Secretary of Agri7 culture to carry out this section $9,750,000 for each of 

8 fiscal years 2013 through 2017. 

9 ‘‘(c) ADDITIONAL SOURCE OF FUNDS.—In addition 

10 to funds appropriated pursuant to the authorization of ap11 propriations in subsection (b) for a fiscal year, the Sec12 retary may use such amount of the funds appropriated 

13 for that fiscal year to carry out the Soil Conservation and 

14 Domestic Allotment Act (16 U.S.C. 590a et seq.) as the 

15 Secretary determines necessary to cover the cost of tech16 nical assistance, management, and enforcement respon17 sibilities for land enrolled in the healthy forests reserve 

18 program pursuant to subsections (a) and (b) of section 

19 504.’’. 

20 Subtitle D—Miscellaneous 

21 Provisions 

22 SEC. 8301. MCINTIRE-STENNIS COOPERATIVE FORESTRY 

23 ACT. 

24 (a) 1890 WAIVERS.—Section 4 of Public Law 87– 

25 788 (commonly known as the ‘‘McIntire-Stennis Coopera-
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1 tive Forestry Act’’) (16 U.S.C. 582a–3) is amended by 

2 inserting ‘‘The matching funds requirement shall not be 

3 applicable to eligible 1890 Institutions (as defined in sec4 tion 2 of the Agricultural Research, Extension, and Edu5 cation Reform Act of 1998 (7 U.S.C. 7601)) if the alloca6 tion is below $200,000.’’ before ‘‘The Secretary is author7 ized’’ in the second sentence. 

8 (b) PARTICIPATION.—Section 8 of Public Law 87– 

9 788 (commonly known as the ‘‘ ‘McIntire-Stennis Cooper10 ative Forestry Act’’) (16 U.S.C. 582a–7) is amended by 

11 inserting ‘the Federated States of Micronesia, American 

12 Samoa, the Northern Mariana Islands, the District of Co13 lumbia,’ before ‘and Guam’ ’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section take effect on October 1, 2012. 

16 SEC. 8302. REVISION OF STRATEGIC PLAN FOR FOREST IN17 VENTORY AND ANALYSIS. 

18 (a) REVISION REQUIRED.—Not later than 180 days 

19 after the date of enactment of this Act, the Secretary of 

20 Agriculture shall revise the strategic plan for forest inven21 tory and analysis initially prepared pursuant to section 

22 3(e) of the Forest and Rangeland Renewable Resources 

23 Research Act of 1978 (16 U.S.C. 1642(e)) to address the 

24 requirements imposed by subsection (b). 
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1 (b) ELEMENTS OF REVISED STRATEGIC PLAN.—In 

2 revising the strategic plan, the Secretary of Agriculture 

3 shall describe in detail the organization, procedures, and 

4 funding needed to achieve each of the following: 

5 (1) Complete the transition to a fully 

6 annualized forest inventory program and include in7 ventory and analysis of interior Alaska. 

8 (2) Implement an annualized inventory of trees 

9 in urban settings, including the status and trends of 

10 trees and forests, and assessments of their eco11 system services, values, health, and risk to pests and 

12 diseases. 

13 (3) Report information on renewable biomass 

14 supplies and carbon stocks at the local, State, re15 gional, and national level, including by ownership 

16 type. 

17 (4) Engage State foresters and other users of 

18 information from the forest inventory and analysis 

19 in reevaluating the list of core data variables col20 lected on forest inventory and analysis plots with an 

21 emphasis on demonstrated need. 

22 (5) Improve the timeliness of the timber prod23 uct output program and accessibility of the 

24 annualized information on that database. 
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1 (6) Foster greater cooperation among the forest 

2 inventory and analysis program, research station 

3 leaders, and State foresters and other users of infor4 mation from the forest inventory and analysis. 

5 (7) Availability of and access to non-Federal re6 sources to improve information analysis and infor7 mation management. 

8 (8) Collaborate with the Natural Resources 

9 Conservation Service, National Aeronautics and 

10 Space Administration, National Oceanic and Atmos11 pheric Administration, and United States Geological 

12 Survey to integrate remote sensing, spatial analysis 

13 techniques, and other new technologies in the forest 

14 inventory and analysis program. 

15 (9) Understand and report on changes in land 

16 cover and use. 

17 (10) Expand existing programs to promote sus18 tainable forest stewardship through increased under19 standing, in partnership with other Federal agencies, 

20 of the over 10 million family forest owners, their de21 mographics, and the barriers to forest stewardship. 

22 (11) Implement procedures to improve the sta23 tistical precision of estimates at the sub-State level. 

24 (c) SUBMISSION OF REVISED STRATEGIC PLAN.— 

25 The Secretary of Agriculture shall submit the revised stra-
928 

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1 tegic plan to the Committee on Agriculture of the House 

2 of Representatives and the Committee on Agriculture, Nu3 trition, and Forestry of the Senate. 

4 TITLE IX—ENERGY 

5 SEC. 9001. DEFINITION OF RENEWABLE CHEMICAL. 

6 Section 9001 of the Farm Security and Rural Invest7 ment Act of 2002 (7 U.S.C. 8101) is amended— 

8 (1) by redesignating paragraphs (13) and (14) 

9 as paragraphs (14) and (15) respectively; and 

10 (2) by inserting after paragraph (12) the fol11 lowing: 

12 ‘‘(13) RENEWABLE CHEMICAL.—The term ‘re13 newable chemical’ means a monomer, polymer, plas14 tic, formulated product, or chemical substance pro15 duced from renewable biomass.’’. 

16 SEC. 9002. BIOBASED MARKETS PROGRAM. 

17 (a) IN GENERAL.—Section 9002 of the Farm Secu18 rity and Rural Investment Act of 2002 (7 U.S.C. 8102) 

19 is amended— 

20 (1) in subsection (a)— 

21 (A) in paragraph (2)(A)(i)— 

22 (i) in subclause (I), by striking ‘‘and’’ 

23 at the end; 
929 

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1 (ii) in subclause (II)(bb), by striking 

2 the period at the end and inserting ‘‘; 

3 and’’; and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(III) establish a targeted 

7 biobased-only procurement require8 ment under which the procuring agen9 cy shall issue a certain number of 

10 biobased-only contracts when the pro11 curing agency is purchasing products, 

12 or purchasing services that include the 

13 use of products, that are included in 

14 a biobased product category des15 ignated by the Secretary.’’; and 

16 (B) in paragraph (3)— 

17 (i) in subparagraph (B)— 

18 (I) in clause (v), by inserting ‘‘as 

19 determined to be necessary by the 

20 Secretary based on the availability of 

21 data,’’ before ‘‘provide information’’; 

22 (II) by redesignating clauses (v) 

23 and (vi) as clauses (vii) and (viii), re24 spectively; and 
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1 (III) by inserting after clause (iv) 

2 the following: 

3 ‘‘(v) require reporting of quantities 

4 and types of biobased products purchased 

5 by procuring agencies; 

6 ‘‘(vi) focus on products that apply an 

7 innovative approach to growing, har8 vesting, procuring, processing, or manufac9 turing biobased products regardless of the 

10 date of entry of the products into the mar11 ketplace;’’; and 

12 (ii) by adding at the end the fol13 lowing: 

14 ‘‘(F) REQUIRED DESIGNATIONS.—Not 

15 later than 1 year after the date of enactment of 

16 this subparagraph, the Secretary shall begin to 

17 designate intermediate ingredients or feedstocks 

18 and assembled and finished biobased products 

19 in the guidelines issued under this paragraph.’’; 

20 (2) in subsection (b)— 

21 (A) in paragraph (3)— 

22 (i) by striking ‘‘The Secretary’’ and 

23 inserting the following: 

24 ‘‘(A) IN GENERAL.—The Secretary’’; and 
931 

†S 3240 ES

1 (ii) by adding at the end the fol2 lowing: 

3 ‘‘(B) AUDITING AND COMPLIANCE.—The 

4 Secretary may carry out such auditing and 

5 compliance activities as the Secretary deter6 mines to be necessary to ensure compliance 

7 with subparagraph (A).’’; and 

8 (B) by adding at the end the following: 

9 ‘‘(4) ASSEMBLED AND FINISHED PRODUCTS.— 

10 Not later than 1 year after the date of enactment 

11 of this paragraph, the Secretary shall begin issuing 

12 criteria for determining which assembled and fin13 ished products may qualify to receive the label under 

14 paragraph (1).’’; 

15 (3) by redesignating subsections (d), (e), (f), 

16 (g), and (h) as subsections (e), (f), (g), (i), and (j), 

17 respectively; 

18 (4) by inserting after subsection (c) the fol19 lowing: 

20 ‘‘(d) OUTREACH, EDUCATION, AND PROMOTION.— 

21 ‘‘(1) IN GENERAL.—The Secretary may engage 

22 in outreach, educational, and promotional activities 

23 intended to increase knowledge, awareness, and ben24 efits of biobased products. 
932 

†S 3240 ES

1 ‘‘(2) AUTHORIZED ACTIVITIES.—In carrying 

2 out this subsection, the Secretary may— 

3 ‘‘(A) conduct consumer education and out4 reach (including consumer and awareness sur5 veys); 

6 ‘‘(B) conduct outreach to and support for 

7 State and local governments interested in im8 plementing biobased purchasing programs; 

9 ‘‘(C) partner with industry and nonprofit 

10 groups to produce educational and outreach 

11 materials and conduct educational and outreach 

12 events; 

13 ‘‘(D) sponsor special conferences and 

14 events to bring together buyers and sellers of 

15 biobased products; and 

16 ‘‘(E) support pilot and demonstration 

17 projects.’’; 

18 (5) in subsection (h) (as redesignated by para19 graph (3))— 

20 (A) in paragraph (2)— 

21 (i) in the matter preceding subpara22 graph (A) by striking ‘‘The report’’ and in23 serting ‘‘Each report under paragraph 

24 (1)’’; 
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1 (ii) in subparagraph (A), by striking 

2 ‘‘and’’ at the end; 

3 (iii) in subparagraph (B)(ii), by strik4 ing the period at the end and inserting a 

5 semicolon; and 

6 (iv) by adding at the end the fol7 lowing: 

8 ‘‘(C) the progress made by other Federal 

9 agencies in compliance with the biobased pro10 curement requirements, including the quantity 

11 of purchases made; and 

12 ‘‘(D) the status of outreach, educational, 

13 and promotional activities carried out by the 

14 Secretary under subsection (d), including the 

15 attainment of specific milestones and overall re16 sults.’’; and 

17 (B) by adding at the end the following: 

18 ‘‘(3) ECONOMIC IMPACT STUDY AND REPORT.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 conduct a study to assess the economic impact 

21 of the biobased products industry, including— 

22 ‘‘(i) the quantity of biobased products 

23 sold; 

24 ‘‘(ii) the value of the biobased prod25 ucts; 
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1 ‘‘(iii) the quantity of jobs created; 

2 ‘‘(iv) the quantity of petroleum dis3 placed; 

4 ‘‘(v) other environmental benefits; and 

5 ‘‘(vi) areas in which the use or manu6 facturing of biobased products could be 

7 more effectively used, including identifying 

8 any technical and economic obstacles and 

9 recommending how those obstacles can be 

10 overcome. 

11 ‘‘(B) REPORT.—Not later than 180 days 

12 after the date of enactment of this subpara13 graph, the Secretary shall submit to Congress a 

14 report describing the results of the study con15 ducted under subparagraph (A).’’. 

16 (6) by inserting after subsection (g) (as redesig17 nated by paragraph (3)) the following: 

18 ‘‘(h) FOREST PRODUCTS LABORATORY COORDINA19 TION.—In determining whether products are eligible for 

20 the ‘USDA Certified Biobased Product’ label, the Sec21 retary (acting through the Forest Products Laboratory) 

22 shall— 

23 ‘‘(1) review and approve forest-related products 

24 for which an application is submitted for the pro25 gram; 
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†S 3240 ES

1 ‘‘(2) expedite the approval of innovative prod2 ucts resulting from technology developed by the For3 est Products Laboratory or partners of the Labora4 tory; and 

5 ‘‘(3) provide appropriate technical assistance to 

6 applicants, as determined by the Secretary.’’; and 

7 (7) in subsection (j) (as redesignated by para8 graph (3))— 

9 (A) in the heading of paragraph (1), by in10 serting ‘‘FOR FISCAL YEARS 2008 THROUGH

11 2012’’ after ‘‘FUNDING’’; 

12 (B) in the heading of paragraph (2), by in13 serting ‘‘FOR FISCAL YEARS 2009 THROUGH

14 2012’’ after ‘‘FUNDING’’; and 

15 (C) by adding at the end the following: 

16 ‘‘(3) FISCAL YEARS 2013 THROUGH 2017.— 

17 There is authorized to be appropriated to carry out 

18 this section $2,000,000 for each of fiscal years 2013 

19 through 2017. 

20 ‘‘(4) MANDATORY FUNDING FOR FISCAL YEARS

21 2013 THROUGH 2017.—Of the funds of the Com22 modity Credit Corporation, the Secretary shall use 

23 to carry out this section $3,000,000 for each of fis24 cal years 2013 through 2017.’’. 
936 

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1 (b) CONFORMING AMENDMENT.—Section 

2 944(c)(2)(A) of the Energy Policy Act of 2005 (42 U.S.C. 

3 16253(c)(2)(A)) is amended by striking ‘‘section 

4 9002(h)(1)’’ and inserting ‘‘section 9002(b)’’. 

5 SEC. 9003. BIOREFINERY, RENEWABLE CHEMICAL, AND 

6 BIOBASED PRODUCT MANUFACTURING AS7 SISTANCE. 

8 (a) PROGRAM ADJUSTMENTS.— 

9 (1) IN GENERAL.—Section 9003 of the Farm 

10 Security and Rural Investment Act of 2002 (7 

11 U.S.C. 8103) is amended— 

12 (A) in the section heading, by inserting ‘‘, 

13 RENEWABLE CHEMICAL, AND BIOBASED

14 PRODUCT MANUFACTURING’’ after ‘‘BIO15 REFINERY’’; 

16 (B) in subsection (a), in the matter pre17 ceding paragraph (1), by inserting ‘‘renewable 

18 chemicals, and biobased product manufac19 turing’’ after ‘‘advanced biofuels,’’; 

20 (C) in subsection (b)— 

21 (i) by redesignating paragraphs (1) 

22 and (2) as paragraphs (2) and (3), respec23 tively; and 

24 (ii) by inserting before paragraph (2) 

25 (as so redesignated) the following: 
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†S 3240 ES

1 ‘‘(1) BIOBASED PRODUCT MANUFACTURING.— 

2 The term ‘biobased product manufacturing’ means 

3 development, construction, and retrofitting of tech4 nologically new commercial-scale processing and 

5 manufacturing equipment and required facilities that 

6 will be used to convert renewable chemicals and 

7 other biobased outputs of biorefineries into end-user 

8 products on a commercial scale.’’; and 

9 (D) in subsection (c)— 

10 (i) in paragraph (1), by striking 

11 ‘‘and’’ at the end; 

12 (ii) in paragraph (2), by striking the 

13 period at the end and inserting ‘‘; and’’; 

14 and 

15 (iii) by adding at the end the fol16 lowing: 

17 ‘‘(3) grants and loan guarantees to fund the de18 velopment and construction of renewable chemical 

19 and biobased product manufacturing facilities.’’. 

20 (2) EFFECTIVE DATE.—The amendments made 

21 by paragraph (1) shall take effect on October 1, 

22 2012. 

23 (b) FUNDING.—Section 9003(h) of the Farm Secu24 rity and Rural Investment Act of 2002 (7 U.S.C. 8103(h)) 

25 is amended— 
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†S 3240 ES

1 (1) by striking paragraph (1) and inserting the 

2 following: 

3 ‘‘(1) MANDATORY FUNDING.— 

4 ‘‘(A) IN GENERAL.—Subject to subpara5 graph (B), of the funds of the Commodity 

6 Credit Corporation, the Secretary shall use for 

7 the cost of loan guarantees under this section, 

8 to remain available until expended— 

9 ‘‘(i) $100,000,000 for fiscal year 

10 2013; and 

11 ‘‘(ii) $58,000,000 for each of fiscal 

12 years 2014 and 2015. 

13 ‘‘(B) BIOBASED PRODUCT MANUFAC14 TURING.—Of the total amount of funds made 

15 available for the period of fiscal years 2013 

16 through 2015 under subparagraph (A), the Sec17 retary use for the cost of loan guarantees under 

18 this section not more than $25,000,000 to pro19 mote biobased product manufacturing.’’; and 

20 (2) in paragraph (2), by striking ‘‘2012’’ and 

21 inserting ‘‘2017’’. 
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1 SEC. 9004. REPEAL OF REPOWERING ASSISTANCE PRO2 GRAM AND TRANSFER OF REMAINING FUNDS. 

3 (a) REPEAL.—Subject to subsection (b), section 9004 

4 of the Farm Security and Rural Investment Act of 2002 

5 (7 U.S.C. 8104) is repealed. 

6 (b) USE OF REMAINING FUNDING FOR RURAL EN7 ERGY FOR AMERICA PROGRAM.—Funds made available 

8 pursuant to subsection (d) of section 9004 of the Farm 

9 Security and Rural Investment Act of 2002 (7 U.S.C. 

10 8104) that are unobligated on the day before the date of 

11 enactment of this section shall— 

12 (1) remain available until expended; 

13 (2) be used by the Secretary of Agriculture to 

14 carry out financial assistance for energy efficiency 

15 improvements and renewable energy systems under 

16 section 9007(a)(2) of the Farm Security and Rural 

17 Investment Act of 2002 (7 U.S.C. 8107(a)(2)); and 

18 (3) be in addition to any other funds made 

19 available to carry out that program. 

20 SEC. 9005. BIOENERGY PROGRAM FOR ADVANCED 

21 BIOFUELS. 

22 Section 9005(g) of the Farm Security and Rural In23 vestment Act of 2002 (7 U.S.C. 8105(g)) is amended— 

24 (1) in the heading of paragraph (1), by insert25 ing ‘‘FOR FISCAL YEARS 2009 THROUGH 2012’’ after 

26 ‘‘FUNDING’’; 
940 

†S 3240 ES

1 (2) in the heading of paragraph (2), by insert2 ing ‘‘FOR FISCAL YEARS 2009 THROUGH 2012’’ after 

3 ‘‘FUNDING’’; 

4 (3) by redesignating paragraph (3) as para5 graph (4); and 

6 (4) by inserting after paragraph (2) the fol7 lowing: 

8 ‘‘(3) FISCAL YEARS 2013 THROUGH 2017.— 

9 There is authorized to be appropriated to carry out 

10 this section $20,000,000 for each of fiscal years 

11 2013 through 2017.’’. 

12 SEC. 9006. BIODIESEL FUEL EDUCATION PROGRAM. 

13 Section 9006(d) of the Farm Security and Rural In14 vestment Act of 2002 (7 U.S.C. 8106(d)) is amended— 

15 (1) by striking ‘‘(d) FUNDING.—Of the funds’’ 

16 and inserting ‘‘(d) FUNDING.— 

17 ‘‘(1) FISCAL YEARS 2008 THROUGH 2012.—Of 

18 the funds’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(2) FISCAL YEARS 2013 THROUGH 2017.— 

21 There is authorized to be appropriated to carry out 

22 this section $1,000,000 for each of fiscal years 2013 

23 through 2017. 

24 ‘‘(3) MANDATORY FUNDING FOR FISCAL YEARS

25 2013 THROUGH 2017.—Of the funds of the Com-
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1 modity Credit Corporation, the Secretary shall use 

2 to carry out this section $1,000,000 for each of fis3 cal years 2013 through 2017.’’. 

4 SEC. 9007. RURAL ENERGY FOR AMERICA PROGRAM. 

5 (a) PROGRAM ADJUSTMENTS.— 

6 (1) IN GENERAL.—Section 9007 of the Farm 

7 Security and Rural Investment Act of 2002 (7 

8 U.S.C. 8107) is amended— 

9 (A) in subsection (b)(2)— 

10 (i) in subparagraph (C), by striking 

11 ‘‘and’’ at the end; 

12 (ii) by redesignating subparagraph 

13 (D) as subparagraph (E); and 

14 (iii) by inserting after subparagraph 

15 (C) the following: 

16 ‘‘(D) a council (as defined in section 1528 

17 of the Agriculture and Food Act of 1981 (16 

18 U.S.C. 3451)); and’’; and 

19 (B) in subsection (c)— 

20 (i) in paragraph (1)(A), by inserting 

21 ‘‘, such as for agricultural and associated 

22 residential purposes’’ after ‘‘electricity’’; 

23 (ii) by striking paragraph (3); 

24 (iii) by redesignating paragraph (4) as 

25 paragraph (3); 
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†S 3240 ES

1 (iv) in paragraph (3) (as so redesig2 nated), by striking subparagraph (A) and 

3 inserting the following: 

4 ‘‘(A) GRANTS.—The amount of a grant 

5 under this subsection shall not exceed the lesser 

6 of— 

7 ‘‘(i) $500,000; and 

8 ‘‘(ii) 25 percent of the cost of the ac9 tivity carried out using funds from the 

10 grant.’’; and 

11 (v) by adding at the end the following: 

12 ‘‘(4) TIERED APPLICATION PROCESS.— 

13 ‘‘(A) IN GENERAL.—In providing loan 

14 guarantees and grants under this subsection, 

15 the Secretary shall use a 3-tiered application 

16 process that reflects the size of proposed 

17 projects in accordance with this paragraph. 

18 ‘‘(B) TIER 1.—The Secretary shall estab19 lish a separate application process for projects 

20 for which the cost of the activity funded under 

21 this subsection is not more than $80,000. 

22 ‘‘(C) TIER 2.—The Secretary shall estab23 lish a separate application process for projects 

24 for which the cost of the activity funded under 
943 

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1 this subsection is greater than $80,000 but less 

2 than $200,000. 

3 ‘‘(D) TIER 3.—The Secretary shall estab4 lish a separate application process for projects 

5 for which the cost of the activity funded under 

6 this subsection is equal to or greater than 

7 $200,000. 

8 ‘‘(E) APPLICATION PROCESS.—The Sec9 retary shall establish an application, evaluation, 

10 and oversight process that is the most sim11 plified for tier I projects and more comprehen12 sive for each subsequent tier.’’. 

13 (2) EFFECTIVE DATE.—The amendments made 

14 by paragraph (1) shall take effect on October 1, 

15 2012. 

16 (b) FUNDING.—Section 9007(g) of the Farm Secu17 rity and Rural Investment Act of 2002 (7 U.S.C. 8107(g)) 

18 is amended— 

19 (1) in the heading of paragraph (1), by insert20 ing ‘‘FOR FISCAL YEARS 2009 THROUGH 2012’’ after 

21 ‘‘FUNDING’’; 

22 (2) in the heading of paragraph (2), by insert23 ing ‘‘FOR FISCAL YEARS 2009 THROUGH 2012’’ after 

24 ‘‘FUNDING’’; 
944 

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1 (3) in the heading of paragraph (3), by insert2 ing ‘‘FOR FISCAL YEARS 2009 THROUGH 2012’’ after 

3 ‘‘FUNDING’’; and 

4 (4) by adding at the end the following: 

5 ‘‘(4) FISCAL YEARS 2013 THROUGH 2017.— 

6 There is authorized to be appropriated to carry out 

7 this section $20,000,000 for each of fiscal years 

8 2013 through 2017. 

9 ‘‘(5) MANDATORY FUNDING FOR FISCAL YEARS

10 2013 THROUGH 2017.—Of the funds of the Com11 modity Credit Corporation, the Secretary shall use 

12 to carry out this section $48,200,000 for each of fis13 cal years 2013 through 2017.’’. 

14 SEC. 9008. BIOMASS RESEARCH AND DEVELOPMENT. 

15 Section 9008(h) of the Farm Security and Rural In16 vestment Act of 2002 (7 U.S.C. 8108(h)) is amended— 

17 (1) in the heading of paragraph (1), by insert18 ing ‘‘FOR FISCAL YEARS 2009 THROUGH 2012’’ after 

19 ‘‘FUNDING’’; 

20 (2) in the heading of paragraph (2), by insert21 ing ‘‘FOR FISCAL YEARS 2009 THROUGH 2012’’ after 

22 ‘‘FUNDING’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(3) FISCAL YEARS 2013 THROUGH 2017.— 

25 There is authorized to be appropriated to carry out 
945 

†S 3240 ES

1 this section $30,000,000 for each of fiscal years 

2 2013 through 2017. 

3 ‘‘(4) MANDATORY FUNDING FOR FISCAL YEARS

4 2013 THROUGH 2017.—Of the funds of the Com5 modity Credit Corporation, the Secretary shall use 

6 to carry out this section $26,000,000 for each of fis7 cal years 2013 through 2017.’’. 

8 SEC. 9009. FEEDSTOCK FLEXIBILITY PROGRAM FOR BIO9 ENERGY PRODUCERS. 

10 Section 9010(b) of the Farm Security and Rural In11 vestment Act of 2002 (7 U.S.C. 8110(b)) is amended— 

12 (1) in paragraph (1)(A), by striking ‘‘2012’’ 

13 and inserting ‘‘2017’’; and 

14 (2) in paragraph (2)(A), by striking ‘‘2012’’ 

15 and inserting ‘‘2017’’. 

16 SEC. 9010. BIOMASS CROP ASSISTANCE PROGRAM. 

17 Section 9011 of the Farm Security and Rural Invest18 ment Act of 2002 (7 U.S.C. 8111) is amended to read 

19 as follows: 

20 ‘‘SEC. 9011. BIOMASS CROP ASSISTANCE PROGRAM. 

21 ‘‘(a) DEFINITIONS.—In this section: 

22 ‘‘(1) BCAP.—The term ‘BCAP’ means the Bio23 mass Crop Assistance Program established under 

24 this section. 
946 

†S 3240 ES

1 ‘‘(2) BCAP PROJECT AREA.—The term ‘BCAP 

2 project area’ means an area that— 

3 ‘‘(A) has specified boundaries that are sub4 mitted to the Secretary by the project sponsor 

5 and subsequently approved by the Secretary; 

6 ‘‘(B) includes producers with contract 

7 acreage that will supply a portion of the renew8 able biomass needed by a biomass conversion 

9 facility; and 

10 ‘‘(C) is physically located within an eco11 nomically practicable distance from the biomass 

12 conversion facility. 

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

14 acreage’ means eligible land that is covered by a 

15 BCAP contract entered into with the Secretary. 

16 ‘‘(4) ELIGIBLE CROP.— 

17 ‘‘(A) IN GENERAL.—The term ‘eligible 

18 crop’ means a crop of renewable biomass. 

19 ‘‘(B) EXCLUSIONS.—The term ‘eligible 

20 crop’ does not include— 

21 ‘‘(i) any crop that is eligible to receive 

22 payments under title I of the Food, Con23 servation, and Energy Act of 2008 (7 

24 U.S.C. 8702 et seq.) or an amendment 

25 made by that title; 
947 

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1 ‘‘(ii) any plant that is invasive or nox2 ious or species or varieties of plants that 

3 credible risk assessment tools or other 

4 credible sources determine are potentially 

5 invasive, as determined by the Secretary in 

6 consultation with other appropriate Fed7 eral or State departments and agencies; or 

8 ‘‘(iii) algae. 

9 ‘‘(5) ELIGIBLE LAND.— 

10 ‘‘(A) IN GENERAL.—The term ‘eligible 

11 land’ includes— 

12 ‘‘(i) agricultural and nonindustrial 

13 private forest lands (as defined in section 

14 5(c) of the Cooperative Forestry Assistance 

15 Act of 1978 (16 U.S.C. 2103a(c))); and 

16 ‘‘(ii) land enrolled in the agricultural 

17 conservation easement program established 

18 under subtitle H of title XII of the Food 

19 Security Act of 1985. 

20 ‘‘(B) EXCLUSIONS.—The term ‘eligible 

21 land’ does not include— 

22 ‘‘(i) Federal- or State-owned land; 

23 ‘‘(ii) land that is native sod, as of the 

24 date of enactment of the Food, Conserva-
948 

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1 tion, and Energy Act of 2008 (7 U.S.C. 

2 8701 et seq.); 

3 ‘‘(iii) land enrolled in the conservation 

4 reserve program established under sub5 chapter B of chapter 1 of subtitle D of 

6 title XII of the Food Security Act of 1985 

7 (16 U.S.C. 3831 et seq.); 

8 ‘‘(iv) land enrolled in the Agricultural 

9 Conservation Easement Program estab10 lished under subtitle H of title XII of that 

11 Act; or 

12 ‘‘(v) land enrolled in the conservation 

13 reserve program or the Agricultural Con14 servation Easement Program under a con15 tract that will expire at the end of the cur16 rent fiscal year. 

17 ‘‘(6) ELIGIBLE MATERIAL.— 

18 ‘‘(A) IN GENERAL.—The term ‘eligible ma19 terial’ means renewable biomass harvested di20 rectly from the land, including crop residue 

21 from any crop that is eligible to receive pay22 ments under title I of the Agriculture Reform, 

23 Food, and Jobs Act of 2012 or an amendment 

24 made by that title. 
949 

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1 ‘‘(B) INCLUSIONS.—The term ‘eligible ma2 terial’ shall only include— 

3 ‘‘(i) eligible material that is collected 

4 or harvested by the eligible material 

5 owner— 

6 ‘‘(I) directly from— 

7 ‘‘(aa) National Forest Sys8 tem; 

9 ‘‘(bb) Bureau of Land Man10 agement land; 

11 ‘‘(cc) non-Federal land; or 

12 ‘‘(dd) land owned by an in13 dividual Indian or Indian tribe 

14 that is held in trust by the 

15 United States for the benefit of 

16 the individual Indian or Indian 

17 tribe or subject to a restriction 

18 against alienation imposed by the 

19 United States; 

20 ‘‘(II) in a manner that is con21 sistent with— 

22 ‘‘(aa) a conservation plan; 

23 ‘‘(bb) a forest stewardship 

24 plan; or 
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1 ‘‘(cc) a plan that the Sec2 retary determines is equivalent to 

3 a plan described in item (aa) or 

4 (bb) and consistent with Execu5 tive Order 13112 (42 U.S.C. 

6 4321 note; relating to invasive 

7 species); 

8 ‘‘(ii) if woody eligible material, woody 

9 eligible material that is produced on land 

10 other than contract acreage that— 

11 ‘‘(I) is a byproduct of a preventa12 tive treatment that is removed to re13 duce hazardous fuel or to reduce or 

14 contain disease or insect infestation; 

15 and 

16 ‘‘(II) if harvested from Federal 

17 land, is harvested in accordance with 

18 section 102(e) of the Healthy Forests 

19 Restoration Act of 2003 (16 U.S.C. 

20 6512(e)); and 

21 ‘‘(iii) eligible material that is delivered 

22 to a qualified biomass conversion facility to 

23 be used for heat, power, biobased products, 

24 research, or advanced biofuels. 
951 

†S 3240 ES

1 ‘‘(C) EXCLUSIONS.—The term ‘eligible ma2 terial’ does not include— 

3 ‘‘(i) material that is whole grain from 

4 any crop that is eligible to receive pay5 ments under title I of the Agriculture Re6 form, Food, and Jobs Act of 2012 or an 

7 amendment made by that title, including— 

8 ‘‘(I) barley, corn, grain sorghum, 

9 oats, rice, or wheat; 

10 ‘‘(II) honey; 

11 ‘‘(III) mohair; 

12 ‘‘(IV) oilseeds, including canola, 

13 crambe, flaxseed, mustard seed, 

14 rapeseed, safflower seed, soybeans, 

15 sesame seed, and sunflower seed; 

16 ‘‘(V) peanuts; 

17 ‘‘(VI) pulse; 

18 ‘‘(VII) chickpeas, lentils, and dry 

19 peas; 

20 ‘‘(VIII) dairy products; 

21 ‘‘(IX) sugar; and 

22 ‘‘(X) wool and cotton boll fiber; 

23 ‘‘(ii) animal waste and byproducts, in24 cluding fat, oil, grease, and manure; 

25 ‘‘(iii) food waste and yard waste; 
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1 ‘‘(iv) algae; 

2 ‘‘(v) woody eligible material that— 

3 ‘‘(I) is removed outside contract 

4 acreage; and 

5 ‘‘(II) is not a byproduct of a pre6 ventative treatment to reduce haz7 ardous fuel or to reduce or contain 

8 disease or insect infestation; 

9 ‘‘(vi) any woody eligible material col10 lected or harvested outside contract acre11 age that would otherwise be used for exist12 ing market products; or 

13 ‘‘(vii) bagasse. 

14 ‘‘(7) PRODUCER.—The term ‘producer’ means 

15 an owner or operator of contract acreage that is 

16 physically located within a BCAP project area. 

17 ‘‘(8) PROJECT SPONSOR.—The term ‘project 

18 sponsor’ means— 

19 ‘‘(A) a group of producers; or 

20 ‘‘(B) a biomass conversion facility. 

21 ‘‘(9) SOCIALLY DISADVANTAGED FARMER OR

22 RANCHER.—The term ‘socially disadvantaged farmer 

23 or rancher’ has the meaning given the term in sec24 tion 2501(e) of the Food, Agriculture, Conservation, 

25 and Trade Act of 1990 (7 U.S.C. 2279(e)). 
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1 ‘‘(b) ESTABLISHMENT AND PURPOSE.—The Sec2 retary shall establish and administer a Biomass Crop As3 sistance Program to— 

4 ‘‘(1) support the establishment and production 

5 of eligible crops for conversion to bioenergy in se6 lected BCAP project areas; and 

7 ‘‘(2) assist agricultural and forest land owners 

8 and operators with the collection, harvest, storage, 

9 and transportation of eligible material for use in a 

10 biomass conversion facility. 

11 ‘‘(c) BCAP PROJECT AREA.— 

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

13 financial assistance to a producer of an eligible crop 

14 in a BCAP project area. 

15 ‘‘(2) SELECTION OF PROJECT AREAS.— 

16 ‘‘(A) IN GENERAL.—To be considered for 

17 selection as a BCAP project area, a project 

18 sponsor shall submit to the Secretary a pro19 posal that, at a minimum, includes— 

20 ‘‘(i) a description of the eligible land 

21 and eligible crops of each producer that 

22 will participate in the proposed BCAP 

23 project area; 

24 ‘‘(ii) a letter of commitment from a 

25 biomass conversion facility that the facility 
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1 will use the eligible crops intended to be 

2 produced in the proposed BCAP project 

3 area; 

4 ‘‘(iii) evidence that the biomass con5 version facility has sufficient equity avail6 able, as determined by the Secretary, if the 

7 biomass conversion facility is not oper8 ational at the time the proposal is sub9 mitted to the Secretary; and 

10 ‘‘(iv) any other information about the 

11 biomass conversion facility or proposed bio12 mass conversion facility that the Secretary 

13 determines necessary for the Secretary to 

14 be reasonably assured that the plant will 

15 be in operation by the date on which the 

16 eligible crops are ready for harvest. 

17 ‘‘(B) BCAP PROJECT AREA SELECTION CRI18 TERIA.—In selecting BCAP project areas, the 

19 Secretary shall consider— 

20 ‘‘(i) the volume of the eligible crops 

21 proposed to be produced in the proposed 

22 BCAP project area and the probability 

23 that those crops will be used for the pur24 poses of the BCAP; 
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1 ‘‘(ii) the volume of renewable biomass 

2 projected to be available from sources 

3 other than the eligible crops grown on con4 tract acres; 

5 ‘‘(iii) the anticipated economic impact 

6 in the proposed BCAP project area; 

7 ‘‘(iv) the opportunity for producers 

8 and local investors to participate in the 

9 ownership of the biomass conversion facil10 ity in the proposed BCAP project area; 

11 ‘‘(v) the participation rate by— 

12 ‘‘(I) beginning farmers or ranch13 ers (as defined in accordance with sec14 tion 343(a) of the Consolidated Farm 

15 and Rural Development Act (7 U.S.C. 

16 1991(a))); or 

17 ‘‘(II) socially disadvantaged 

18 farmers or ranchers; 

19 ‘‘(vi) the impact on soil, water, and 

20 related resources; 

21 ‘‘(vii) the variety in biomass produc22 tion approaches within a project area, in23 cluding (as appropriate)— 

24 ‘‘(I) agronomic conditions; 
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1 ‘‘(II) harvest and postharvest 

2 practices; and 

3 ‘‘(III) monoculture and 

4 polyculture crop mixes; 

5 ‘‘(viii) the range of eligible crops 

6 among project areas; and 

7 ‘‘(ix) any additional information that 

8 the Secretary determines to be necessary. 

9 ‘‘(3) CONTRACT.— 

10 ‘‘(A) IN GENERAL.—On approval of a 

11 BCAP project area by the Secretary, each pro12 ducer in the BCAP project area shall enter into 

13 a contract directly with the Secretary. 

14 ‘‘(B) MINIMUM TERMS.—At a minimum, a 

15 contract under this subsection shall include 

16 terms that cover— 

17 ‘‘(i) an agreement to make available 

18 to the Secretary, or to an institution of 

19 higher education or other entity designated 

20 by the Secretary, such information as the 

21 Secretary considers to be appropriate to 

22 promote the production of eligible crops 

23 and the development of biomass conversion 

24 technology; 
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1 ‘‘(ii) compliance with the highly erod2 ible land conservation requirements of sub3 title B of title XII of the Food Security 

4 Act of 1985 (16 U.S.C. 3811 et seq.) and 

5 the wetland conservation requirements of 

6 subtitle C of title XII of that Act (16 

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

8 ‘‘(iii) the implementation of (as deter9 mined by the Secretary)— 

10 ‘‘(I) a conservation plan; 

11 ‘‘(II) a forest stewardship plan; 

12 or 

13 ‘‘(III) a plan that is equivalent to 

14 a conservation or forest stewardship 

15 plan; and 

16 ‘‘(iv) any additional requirements that 

17 Secretary determines to be necessary. 

18 ‘‘(C) DURATION.—A contract under this 

19 subsection shall have a term of not more 

20 than— 

21 ‘‘(i) 5 years for annual and perennial 

22 crops; or 

23 ‘‘(ii) 15 years for woody biomass. 

24 ‘‘(4) RELATIONSHIP TO OTHER PROGRAMS.—In 

25 carrying out this subsection, the Secretary shall pro-
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1 vide for the preservation of cropland base and yield 

2 history applicable to the land enrolled in a BCAP 

3 contract. 

4 ‘‘(5) PAYMENTS.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 make establishment and annual payments di7 rectly to producers to support the establishment 

8 and production of eligible crops on contract 

9 acreage. 

10 ‘‘(B) AMOUNT OF ESTABLISHMENT PAY11 MENTS.— 

12 ‘‘(i) IN GENERAL.—Subject to clause 

13 (ii), the amount of an establishment pay14 ment under this subsection shall be not 

15 more than 50 percent of the costs of estab16 lishing an eligible perennial crop covered 

17 by the contract but not to exceed $500 per 

18 acre, including— 

19 ‘‘(I) the cost of seeds and stock 

20 for perennials; 

21 ‘‘(II) the cost of planting the pe22 rennial crop, as determined by the 

23 Secretary; and 
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1 ‘‘(III) in the case of nonindus2 trial private forestland, the costs of 

3 site preparation and tree planting. 

4 ‘‘(ii) SOCIALLY DISADVANTAGED

5 FARMERS OR RANCHERS.—In the case of 

6 socially disadvantaged farmers or ranchers, 

7 the costs of establishment may not exceed 

8 $750 per acre. 

9 ‘‘(C) AMOUNT OF ANNUAL PAYMENTS.— 

10 ‘‘(i) IN GENERAL.—Subject to clause 

11 (ii), the amount of an annual payment 

12 under this subsection shall be determined 

13 by the Secretary. 

14 ‘‘(ii) REDUCTION.—The Secretary 

15 shall reduce an annual payment by an 

16 amount determined to be appropriate by 

17 the Secretary, if— 

18 ‘‘(I) an eligible crop is used for 

19 purposes other than the production of 

20 energy at the biomass conversion fa21 cility; 

22 ‘‘(II) an eligible crop is delivered 

23 to the biomass conversion facility; 

24 ‘‘(III) the producer receives a 

25 payment under subsection (d); 
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1 ‘‘(IV) the producer violates a 

2 term of the contract; or 

3 ‘‘(V) the Secretary determines a 

4 reduction is necessary to carry out 

5 this section. 

6 ‘‘(D) EXCLUSION.—The Secretary shall 

7 not make any BCAP payments on land for 

8 which payments are received under the con9 servation reserve program established under 

10 subchapter B of chapter 1 of subtitle D of title 

11 XII of the Food Security Act of 1985 (16 

12 U.S.C. 3831 et seq.) or the agricultural con13 servation easement program established under 

14 subtitle H of title XII of that Act. 

15 ‘‘(d) ASSISTANCE WITH COLLECTION, HARVEST, 

16 STORAGE, AND TRANSPORTATION.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall make a 

18 payment for the delivery of eligible material to a bio19 mass conversion facility to— 

20 ‘‘(A) a producer of an eligible crop that is 

21 produced on BCAP contract acreage; or 

22 ‘‘(B) a person with the right to collect or 

23 harvest eligible material, regardless of whether 

24 the eligible material is produced on contract 

25 acreage. 
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1 ‘‘(2) PAYMENTS.— 

2 ‘‘(A) COSTS COVERED.—A payment under 

3 this subsection shall be in an amount described 

4 in subparagraph (B) for— 

5 ‘‘(i) collection; 

6 ‘‘(ii) harvest; 

7 ‘‘(iii) storage; and 

8 ‘‘(iv) transportation to a biomass con9 version facility. 

10 ‘‘(B) AMOUNT.—Subject to paragraph (3), 

11 the Secretary may provide matching payments 

12 at a rate of up to $1 for each $1 per ton pro13 vided by the biomass conversion facility, in an 

14 amount not to exceed $20 per dry ton for a pe15 riod of 4 years. 

16 ‘‘(3) LIMITATION ON ASSISTANCE FOR BCAP

17 CONTRACT ACREAGE.—As a condition of the receipt 

18 of an annual payment under subsection (c), a pro19 ducer receiving a payment under this subsection for 

20 collection, harvest, storage, or transportation of an 

21 eligible crop produced on BCAP acreage shall agree 

22 to a reduction in the annual payment. 

23 ‘‘(e) REPORT.—Not later than 4 years after the date 

24 of enactment of the Agriculture Reform, Food, and Jobs 

25 Act of 2012, the Secretary shall submit to the Committee 
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1 on Agriculture of the House of Representatives and the 

2 Committee on Agriculture, Nutrition, and Forestry of the 

3 Senate a report on the dissemination by the Secretary of 

4 the best practice data and information gathered from par5 ticipants receiving assistance under this section. 

6 ‘‘(f) FUNDING.— 

7 ‘‘(1) IN GENERAL.—Of the funds of the Com8 modity Credit Corporation, the Secretary shall use 

9 to carry out this section $38,600,000 for each of fis10 cal years 2013 through 2017. 

11 ‘‘(2) COLLECTION, HARVEST, STORAGE, AND

12 TRANSPORTATION PAYMENTS.—Of the amount made 

13 available under paragraph (1) for each fiscal year, 

14 the Secretary shall use not less than 10 percent, nor 

15 more than 50 percent, of the amount to make collec16 tion, harvest, transportation, and storage payments 

17 under subsection (d)(2).’’. 

18 SEC. 9011. REPEAL OF FOREST BIOMASS FOR ENERGY. 

19 Section 9012 of the Farm Security and Rural Invest20 ment Act of 2002 (7 U.S.C. 8112) is repealed. 

21 SEC. 9012. COMMUNITY WOOD ENERGY PROGRAM. 

22 (a) DEFINITION OF BIOMASS CONSUMER COOPERA23 TIVE.—Section 9013(a) of the Farm Security and Rural 

24 Investment Act of 2002 (7 U.S.C. 8113(a)) is amended— 
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1 (1) by redesignating paragraphs (1) and (2) as 

2 paragraphs (2) and (3), respectively; and 

3 (2) by inserting before paragraph (2) (as so re4 designated) the following: 

5 ‘‘(1) BIOMASS CONSUMER COOPERATIVE.—The 

6 term ‘biomass consumer cooperative’ means a con7 sumer membership organization the purpose of 

8 which is to provide members with services or dis9 counts relating to the purchase of biomass heating 

10 products or biomass heating systems.’’. 

11 (b) GRANT PROGRAM.—Section 9013(b)(1) of the 

12 Farm Security and Rural Investment Act of 2002 (7 

13 U.S.C. 8113(b)(1)) is amended— 

14 (1) in subparagraph (A), by striking ‘‘and’’ 

15 after the semicolon at the end; 

16 (2) in subparagraph (B), by striking the period 

17 at the end and inserting ‘‘; and’’; and 

18 (3) by adding at the end the following: 

19 ‘‘(C) grants of up to $50,000 to biomass 

20 consumer cooperatives for the purpose of estab21 lishing or expanding biomass consumer coopera22 tives that will provide consumers with services 

23 or discounts relating to— 

24 ‘‘(i) the purchase of biomass heating 

25 systems; 
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1 ‘‘(ii) biomass heating products, includ2 ing wood chips, wood pellets, and advanced 

3 biofuels; or 

4 ‘‘(iii) the delivery and storage of bio5 mass of heating products.’’. 

6 (c) MATCHING FUNDS.—Section 9013(d) of the 

7 Farm Security and Rural Investment Act of 2002 (7 

8 U.S.C. 8113(d)) is amended— 

9 (1) by striking ‘‘A State or local government 

10 that receives a grant under subsection (b)’’ and in11 serting the following: 

12 ‘‘(1) STATE AND LOCAL GOVERNMENTS.—A 

13 State or local government that receives a grant 

14 under subparagraph (A) or (B) of subsection 

15 (b)(1)’’; and 

16 (2) by adding at the end the following: 

17 ‘‘(2) BIOMASS CONSUMER COOPERATIVES.—A 

18 biomass consumer cooperative that receives a grant 

19 under subsection (b)(1)(C) shall contribute an 

20 amount of non-Federal funds (which may include 

21 State, local, and nonprofit funds and membership 

22 dues) toward the establishment or expansion of a 

23 biomass consumer cooperative that is at least equal 

24 to 50 percent of the amount of Federal funds re25 ceived for that purpose.’’. 
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1 (d) AUTHORIZATION OF APPROPRIATIONS.—Section 

2 9013(e) of the Farm Security and Rural Investment Act 

3 of 2002 (7 U.S.C. 8113(e)) is amended by inserting before 

4 the period at the end ‘‘and $5,000,000 for each of fiscal 

5 years 2013 through 2017’’. 

6 SEC. 9013. REPEAL OF RENEWABLE FERTILIZER STUDY. 

7 Section 9003 of the Food, Conservation, and Energy 

8 Act of 2008 (Public Law 110–246; 122 Stat. 2096) is re9 pealed. 

10 TITLE X—HORTICULTURE 

11 SEC. 10001. SPECIALTY CROPS MARKET NEWS ALLOCATION. 

12 Section 10107(b) of the Food, Conservation, and En13 ergy Act of 2008 (7 U.S.C. 1622b(b)) is amended by strik14 ing ‘‘2012’’ and inserting ‘‘2017’’. 

15 SEC. 10002. REPEAL OF GRANT PROGRAM TO IMPROVE 

16 MOVEMENT OF SPECIALTY CROPS. 

17 Section 10403 of the Food, Conservation, and En18 ergy Act of 2008 (7 U.S.C. 1622c) is repealed. 

19 SEC. 10003. FARMERS MARKET AND LOCAL FOOD PRO20 MOTION PROGRAM. 

21 Section 6 of the Farmer-to-Consumer Direct Mar22 keting Act of 1976 (7 U.S.C. 3005) is amended— 

23 (1) in the section heading, by adding ‘‘AND

24 LOCAL FOOD’’ after ‘‘MARKET’’; 

25 (2) in subsection (a)— 
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†S 3240 ES

1 (A) by inserting ‘‘and Local Food’’ after 

2 ‘‘Market’’; 

3 (B) by striking ‘‘farmers’ markets and to 

4 promote’’; and 

5 (C) by inserting ‘‘and local food capacity 

6 development’’ before the period at the end; 

7 (3) in subsection (b), by striking paragraph (1) 

8 and inserting the following: 

9 ‘‘(1) IN GENERAL.—The purposes of the Pro10 gram are to increase domestic consumption of and 

11 access to locally and regionally produced agricultural 

12 products by developing, improving, expanding, and 

13 providing outreach, training, and technical assist14 ance to, or assisting in the development, improve15 ment and expansion of— 

16 ‘‘(A) domestic farmers’ markets, roadside 

17 stands, community-supported agriculture pro18 grams, agritourism activities, and other direct 

19 producer-to-consumer market opportunities; and 

20 ‘‘(B) local and regional food enterprises 

21 that are not direct producer-to-consumer mar22 kets but process, distribute, aggregate, store, 

23 and market locally or regionally produced food 

24 products.’’; 

25 (4) in subsection (c)(1)— 
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1 (A) by inserting ‘‘or other business entity’’ 

2 after ‘‘cooperative’’; and 

3 (B) by inserting ‘‘, including a community 

4 supported agriculture network or association’’ 

5 after ‘‘association’’; 

6 (5) by redesignating subsection (e) as sub7 section (f); 

8 (6) by inserting after subsection (d) the fol9 lowing: 

10 ‘‘(e) PRIORITIES.—In providing grants under the 

11 Program, priority shall be given to applications that in12 clude projects that— 

13 ‘‘(1) benefit underserved communities; 

14 ‘‘(2) develop market opportunities for small and 

15 mid-sized farm and ranch operations; and 

16 ‘‘(3) include a strategic plan to maximize the 

17 use of funds to build capacity for local and regional 

18 food systems in a community.’’; 

19 (7) in subsection (f) (as redesignated by para20 graph (5))— 

21 (A) in paragraph (1)— 

22 (i) in subparagraph (B), by striking 

23 ‘‘and’’ after the semicolon at the end; 
968 

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1 (ii) in subparagraph (C), by striking 

2 the period at the end and inserting ‘‘; 

3 and’’; and 

4 (iii) by adding at the end the fol5 lowing: 

6 ‘‘(D) $20,000,000 for each of fiscal years 

7 2013 through 2017.’’; 

8 (B) by striking paragraphs (2) and (4); 

9 (C) by redesignating paragraph (3) as 

10 paragraph (4); 

11 (D) by inserting after paragraph (1) the 

12 following: 

13 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—In 

14 addition to funds made available under paragraph 

15 (1), there is authorized to be appropriated to carry 

16 out this section $20,000,000 for each of fiscal years 

17 2013 through 2017. 

18 ‘‘(3) USE OF FUNDS.— 

19 ‘‘(A) IN GENERAL.—Of the funds made 

20 available to carry out the Program for each fis21 cal year, 50 percent shall be used for the pur22 poses described in subsection (b)(1)(A) and 50 

23 percent shall be used for the purposes described 

24 in subsection (b)(1)(B). 
969 

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1 ‘‘(B) COST SHARE.—To be eligible to re2 ceive a grant for a project described in sub3 section (b)(1)(B), a recipient shall provide a 

4 match in the form of cash or in-kind contribu5 tions in an amount equal to 25 percent of the 

6 total cost of the project.’’; and 

7 (E) by adding at the end the following: 

8 ‘‘(5) ADMINISTRATIVE EXPENSES.—Not more 

9 than 10 percent of the total amount made available 

10 to carry out this section for a fiscal year may be 

11 used for administrative expenses. 

12 ‘‘(6) LIMITATIONS.—An eligible entity may not 

13 use a grant or other assistance provided under the 

14 Program for the purchase, construction, or rehabili15 tation of a building or structure.’’. 

16 SEC. 10004. STUDY ON LOCAL FOOD PRODUCTION AND PRO17 GRAM EVALUATION. 

18 (a) IN GENERAL.—The Secretary shall— 

19 (1) collect data on the production and mar20 keting of locally or regionally produced agricultural 

21 food products; 

22 (2) facilitate interagency collaboration and data 

23 sharing on programs related to local and regional 

24 food systems; and 
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1 (3) monitor the effectiveness of programs de2 signed to expand or facilitate local food systems. 

3 (b) REQUIREMENTS.—In carrying out this section, 

4 the Secretary shall, at a minimum— 

5 (1) collect and distribute comprehensive report6 ing of prices of locally or regionally produced agri7 cultural food products; 

8 (2) conduct surveys and analysis and publish 

9 reports relating to the production, handling, dis10 tribution, retail sales, and trend studies (including 

11 consumer purchasing patterns) of or on locally or re12 gionally produced agricultural food products; 

13 (3) evaluate the effectiveness of existing pro14 grams in growing local and regional food systems, 

15 including— 

16 (A) the impact of local food systems on job 

17 creation and economic development; 

18 (B) the level of participation in the Farm19 ers’ Market and Local Food Promotion Pro20 gram established under section 6 of the Farm21 er-to-Consumer Direct Marketing Act of 1976 

22 (7 U.S.C. 3005), including the percentage of 

23 projects funded in comparison to applicants and 

24 the types of eligible entities receiving funds; 
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1 (C) the ability for participants to leverage 

2 private capital and a synopsis of the places 

3 from which non-Federal funds are derived; and 

4 (D) any additional resources required to 

5 aid in the development or expansion of local 

6 and regional food systems; 

7 (4) expand the Agricultural Resource Manage8 ment Survey to include questions on locally or re9 gionally produced agricultural food products; and 

10 (5) seek to establish or expand private-public 

11 partnerships to facilitate, to the maximum extent 

12 practicable, the collection of data on locally or re13 gionally produced agricultural food products, includ14 ing the development of a nationally coordinated and 

15 regionally balanced evaluation of the redevelopment 

16 of locally or regionally produced food systems. 

17 (c) REPORT.—Not later than 1 year after the date 

18 of enactment of this Act and annually thereafter, the Sec19 retary shall submit to the Committee on Agriculture of 

20 the House of Representatives and the Committee on Agri21 culture, Nutrition, and Forestry of the Senate a report 

22 describing the progress that has been made in imple23 menting this section and identifying any additional needs 

24 related to developing local and regional food systems. 
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1 SEC. 10005. ORGANIC AGRICULTURE. 

2 (a) ORGANIC PRODUCTION AND MARKET DATA INI3 TIATIVES.—Section 7407 of the Farm Security and Rural 

4 Investment Act of 2002 (7 U.S.C. 5925c) is amended— 

5 (1) in subsection (c)— 

6 (A) in the matter preceding paragraph (1), 

7 by inserting ‘‘and annually thereafter’’ after 

8 ‘‘this subsection’’; 

9 (B) in paragraph (1), by striking ‘‘and’’ at 

10 the end; 

11 (C) by redesignating paragraph (2) as 

12 paragraph (3); and 

13 (D) by inserting after paragraph (1) the 

14 following: 

15 ‘‘(2) describes how data collection agencies 

16 (such as the Agricultural Marketing Service and the 

17 National Agricultural Statistics Service) are coordi18 nating with data user agencies (such as the Risk 

19 Management Agency) to ensure that data collected 

20 under this section can be used by data user agencies, 

21 including by the Risk Management Agency to offer 

22 price elections for all organic crops; and’’; and 

23 (2) in subsection (d)— 

24 (A) by redesignating paragraph (2) as 

25 paragraph (3); 
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1 (B) by inserting after paragraph (1) the 

2 following: 

3 ‘‘(2) MANDATORY FUNDING.—In addition to 

4 any funds available under paragraph (1), of the 

5 funds of the Commodity Credit Corporation, the 

6 Secretary shall use to carry out this section 

7 $5,000,000, to remain available until expended.’’; 

8 and 

9 (C) in paragraph (3) (as redesignated by 

10 subparagraph (A))— 

11 (i) by striking ‘‘paragraph (1)’’ and 

12 inserting ‘‘paragraphs (1) and (2)’’; and 

13 (ii) by striking ‘‘2012’’ and inserting 

14 ‘‘2017’’. 

15 (b) MODERNIZATION AND TECHNOLOGY UPGRADE

16 FOR NATIONAL ORGANIC PROGRAM.—Section 2123 of the 

17 Organic Foods Production Act of 1990 (7 U.S.C. 6522) 

18 is amended— 

19 (1) in subsection (b)— 

20 (A) in paragraph (5), by striking ‘‘and’’ at 

21 the end; 

22 (B) by redesignating paragraph (6) as 

23 paragraph (7); and 

24 (C) by inserting after paragraph (5) the 

25 following: 
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1 ‘‘(6) $15,000,000 for each of fiscal years 2013 

2 through 2017; and’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(c) MODERNIZATION AND TECHNOLOGY UPGRADE

5 FOR NATIONAL ORGANIC PROGRAM.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall mod7 ernize database and technology systems of the na8 tional organic program. 

9 ‘‘(2) FUNDING.—Of the funds of the Com10 modity Credit Corporation and in addition to any 

11 other funds made available for that purpose, the 

12 Secretary shall make available to carry out this sub13 section $5,000,000 in fiscal year 2013, to remain 

14 available until expended. 

15 ‘‘(d) REPORT.—Not later than 180 days after the 

16 date of enactment of this subsection, the Secretary shall 

17 submit to the Committee on Agriculture of the House of 

18 Representatives and the Committee on Agriculture, Nutri19 tion, and Forestry of the Senate a report that— 

20 ‘‘(1) describes the efforts of the Secretary to 

21 ensure that activities conducted through commodity 

22 research and promotion programs adequately reflect 

23 the priorities of all members of the applicable orders; 

24 and 
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1 ‘‘(2) includes an assessment of the feasibility of 

2 establishing an organic research and promotion pro3 gram, including any current barriers to establish4 ment and challenges related to implementation.’’. 

5 SEC. 10006. FOOD SAFETY EDUCATION INITIATIVES. 

6 Section 10105(c) of the Food, Conservation, and En7 ergy Act of 2008 (7 U.S.C. 7655a(c)) is amended by strik8 ing ‘‘2012’’ and inserting ‘‘2017’’. 

9 SEC. 10007. COORDINATED PLANT MANAGEMENT PRO10 GRAM. 

11 (a) IN GENERAL.—Section 420 of the Plant Protec12 tion Act (7 U.S.C. 7721) is amended— 

13 (1) by striking the section heading and insert14 ing ‘‘COORDINATED PLANT MANAGEMENT PRO15 GRAM.’’; 

16 (2) by redesignating subsection (e) as sub17 section (f); and 

18 (3) by inserting after subsection (d) the fol19 lowing: 

20 ‘‘(e) NATIONAL CLEAN PLANT NETWORK.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall estab22 lish a program to be known as the ‘National Clean 

23 Plant Network’ (referred to in this subsection as the 

24 ‘Program’). 
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1 ‘‘(2) REQUIREMENTS.—Under the Program, the 

2 Secretary shall establish a network of clean plant 

3 centers for diagnostic and pathogen elimination serv4 ices— 

5 ‘‘(A) to produce clean propagative plant 

6 material; and 

7 ‘‘(B) to maintain blocks of pathogen-tested 

8 plant material in sites located throughout the 

9 United States. 

10 ‘‘(3) AVAILABILITY OF CLEAN PLANT SOURCE

11 MATERIAL.—Clean plant source material produced 

12 or maintained under the Program may be made 

13 available to— 

14 ‘‘(A) a State for a certified plant program 

15 of the State; and 

16 ‘‘(B) private nurseries and producers. 

17 ‘‘(4) CONSULTATION AND COLLABORATION.—In 

18 carrying out the Program, the Secretary shall— 

19 ‘‘(A) consult with— 

20 ‘‘(i) State departments of agriculture; 

21 and 

22 ‘‘(ii) land-grant colleges and univer23 sities and NLGCA Institutions (as those 

24 terms are defined in section 1404 of the 

25 National Agricultural Research, Extension, 
977 

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1 and Teaching Policy Act of 1977 (7 U.S.C. 

2 3103)); and 

3 ‘‘(B) to the extent practicable and with 

4 input from the appropriate State officials and 

5 industry representatives, use existing Federal or 

6 State facilities to serve as clean plant centers.’’. 

7 (b) FUNDING.—Subsection (f) of section 420 of the 

8 Plant Protection Act (7 U.S.C. 7721) (as redesignated by 

9 subsection (a)(1)) is amended— 

10 (1) in paragraph (3), by striking ‘‘and’’ at the 

11 end; 

12 (2) in paragraph (4), by striking ‘‘and each fis13 cal year thereafter.’’ and inserting a semicolon; and 

14 (3) by adding at the end the following: 

15 ‘‘(5) $60,000,000 for each of fiscal years 2013 

16 through 2016; and 

17 ‘‘(6) $65,000,000 for fiscal year 2017 and each 

18 fiscal year thereafter.’’. 

19 (c) REPEAL OF EXISTING PROVISION.—Section 

20 10202 of the Food, Conservation, and Energy Act of 2008 

21 (7 U.S.C. 7761) is repealed. 

22 (d) CLARIFICATION OF USE OF FUNDS FOR TECH23 NICAL ASSISTANCE.—Section 420 of the Plant Protection 

24 Act (7 U.S.C. 7721) (as amended by subsection (a)) is 

25 amended by adding at the end the following: 
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1 ‘‘(g) RELATIONSHIP TO OTHER LAW.—The use of 

2 Commodity Credit Corporation funds under this section 

3 to provide technical assistance shall not be considered an 

4 allotment or fund transfer from the Commodity Credit 

5 Corporation for purposes of the limit on expenditures for 

6 technical assistance imposed by section 11 of the Com7 modity Credit Corporation Charter Act (15 U.S.C. 

8 714i).’’. 

9 SEC. 10008. SPECIALTY CROP BLOCK GRANTS. 

10 Section 101 of the Specialty Crops Competitiveness 

11 Act of 2004 (7 U.S.C. 1621 note; Public Law 108–465) 

12 is amended— 

13 (1) in subsection (a)— 

14 (A) by striking ‘‘subsection (j)’’ and insert15 ing ‘‘subsection (l)’’; and 

16 (B) by striking ‘‘2012’’ and inserting 

17 ‘‘2017’’; 

18 (2) by striking subsection (b) and inserting the 

19 following: 

20 ‘‘(b) GRANTS BASED ON VALUE AND ACREAGE.— 

21 Subject to subsection (c), in the case of each State with 

22 an application for a grant for a fiscal year that is accepted 

23 by the Secretary of Agriculture under subsection (f), the 

24 amount of a grant for a fiscal year to a State under this 
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1 section shall bear the same ratio to the total amount made 

2 available under subsection (l) for that fiscal year as— 

3 ‘‘(1) the average of the most recent available 

4 value of specialty crop production in the State and 

5 the acreage of specialty crop production in the State, 

6 as demonstrated in the most recent Census of Agri7 culture data; bears to 

8 ‘‘(2) the average of the most recent available 

9 value of specialty crop production in all States and 

10 the acreage of specialty crop production in all 

11 States, as demonstrated in the most recent Census 

12 of Agriculture data.’’; 

13 (3) by redesignating subsection (j) as sub14 section (l); 

15 (4) by inserting after subsection (i) the fol16 lowing: 

17 ‘‘(j) MULTISTATE PROJECTS.— 

18 ‘‘(1) IN GENERAL.—Not later than 180 days 

19 after the date of enactment of the Agriculture Re20 form, Food, and Jobs Act of 2012, the Secretary of 

21 Agriculture shall issue guidance for the purpose of 

22 making grants to multistate projects under this sec23 tion for projects involving— 

24 ‘‘(A) food safety; 

25 ‘‘(B) plant pests and disease; 
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1 ‘‘(C) crop-specific projects addressing com2 mon issues; and 

3 ‘‘(D) any other area that furthers the pur4 poses of this section, as determined by the Sec5 retary. 

6 ‘‘(2) FUNDING.—Of the funds provided under 

7 subsection (l), the Secretary of Agriculture may allo8 cate for grants under this subsection, to remain 

9 available until expended— 

10 ‘‘(A) $1,000,000 for fiscal year 2013; 

11 ‘‘(B) $2,000,000 for fiscal year 2014; 

12 ‘‘(C) $3,000,000 for fiscal year 2015; 

13 ‘‘(D) $4,000,000 for fiscal year 2016; and 

14 ‘‘(E) $5,000,000 for fiscal year 2017. 

15 ‘‘(k) ADMINISTRATION.— 

16 ‘‘(1) DEPARTMENT.—The Secretary of Agri17 culture may not use more than 3 percent of the 

18 funds made available to carry out this section for a 

19 fiscal year for administrative expenses. 

20 ‘‘(2) STATES.—A State receiving a grant under 

21 this section may not use more than 8 percent of the 

22 funds received under the grant for a fiscal year for 

23 administrative expenses.’’; and 

24 (5) in subsection (l) (as redesignated by para25 graph (3))— 
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1 (A) in paragraph (2), by striking ‘‘and’’ at 

2 the end; 

3 (B) in paragraph (3), by striking the pe4 riod at the end and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(4) $70,000,000 for fiscal year 2013 and each 

7 fiscal year thereafter.’’. 

8 SEC. 10009. RECORDKEEPING, INVESTIGATIONS, AND EN9 FORCEMENT. 

10 The Organic Foods Production Act of 1990 is amend11 ed by inserting after section 2120 (7 U.S.C. 6519) the 

12 following: 

13 ‘‘SEC. 2120A. RECORDKEEPING, INVESTIGATIONS, AND EN14 FORCEMENT. 

15 ‘‘(a) RECORDKEEPING.— 

16 ‘‘(1) IN GENERAL.—Except as otherwise pro17 vided in this title, all persons, including producers, 

18 handlers, and certifying agents, required to report 

19 information to the Secretary under this title shall 

20 maintain, and make available to the Secretary on 

21 the request of the Secretary, all contracts, agree22 ments, receipts, and other records associated with 

23 the organic certification program established by the 

24 Secretary under this title. 
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1 ‘‘(2) DURATION OF RECORDKEEPING REQUIRE2 MENT.—A record covered by paragraph (1) shall be 

3 maintained— 

4 ‘‘(A) by a person covered by this title, ex5 cept for a certifying agent, for a period of 5 

6 years beginning on the date of the creation of 

7 the record; and 

8 ‘‘(B) by a certifying agent, for a period of 

9 10 years beginning on the date of the creation 

10 of the record. 

11 ‘‘(b) CONFIDENTIALITY.— 

12 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

13 and except as otherwise directed by the Secretary or 

14 the Attorney General for enforcement purposes, no 

15 officer, employee, or agent of the United States shall 

16 make available to the public information, statistics, 

17 or documents obtained from or made available by 

18 any person under this title, other than in a manner 

19 that ensures that confidentiality is preserved regard20 ing the identity of persons, including parties to a 

21 contract, and proprietary business information. 

22 ‘‘(2) ALLEGED VIOLATORS AND NATURE OF AC23 TIONS.—The Secretary may release the name of the 

24 alleged violator and the nature of the actions trig-
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1 gering an order, suspension, or revocation under 

2 subsection (e). 

3 ‘‘(c) INVESTIGATION.— 

4 ‘‘(1) IN GENERAL.—The Secretary may take 

5 such investigative actions as the Secretary considers 

6 to be necessary to carry out this title— 

7 ‘‘(A) to verify the accuracy of any informa8 tion reported or made available under this title; 

9 and 

10 ‘‘(B) to determine, with regard to actions, 

11 practices, or information required under this 

12 title, whether a person covered by this title has 

13 committed, or will commit, a violation of any 

14 provision of this title, including an order or reg15 ulation promulgated by the Secretary. 

16 ‘‘(2) INVESTIGATIVE POWERS.—The Secretary 

17 may administer oaths and affirmations, subpoena 

18 witnesses, compel attendance of witnesses, take evi19 dence, and require the production of any books, pa20 pers, and documents that are relevant to the inves21 tigation. 

22 ‘‘(d) UNLAWFUL ACT.—It shall be unlawful and a 

23 violation of this title for any person covered by this title— 
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1 ‘‘(1) to fail or refuse to provide, or delay the 

2 timely provision of, accurate information required by 

3 the Secretary under this section; 

4 ‘‘(2) to violate— 

5 ‘‘(A) an order of the Secretary; 

6 ‘‘(B) a suspension or revocation of the or7 ganic certification of a producer or handler; or 

8 ‘‘(C) a suspension or revocation of the ac9 creditation of a certifying agent; or 

10 ‘‘(3) to sell, or attempt to sell, a product that 

11 is represented as being organically produced under 

12 this title if in fact the product has been produced or 

13 handled by an operation that is not yet a certified 

14 organic producer or handler under this title. 

15 ‘‘(e) ENFORCEMENT.— 

16 ‘‘(1) ORDER.—The Secretary may issue an 

17 order to stop the sale of an agricultural product that 

18 is labeled or otherwise represented as being organi19 cally produced— 

20 ‘‘(A) until the product can be verified— 

21 ‘‘(i) as meeting the national and State 

22 standards for organic production and han23 dling as provided in sections 2105 through 

24 2114; 
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1 ‘‘(ii) as having been produced or han2 dled without the use of a prohibited sub3 stance listed under section 2118; and 

4 ‘‘(iii) as being produced and handled 

5 by a certified organic operation; and 

6 ‘‘(B) if a person has committed an unlaw7 ful act with respect to the product under sub8 section (d). 

9 ‘‘(2) CERTIFICATION OR ACCREDITATION.— 

10 ‘‘(A) SUSPENSION.— 

11 ‘‘(i) IN GENERAL.—The Secretary 

12 may suspend the organic certification of a 

13 producer or handler, or accreditation of a 

14 certifying agent, for a period not to exceed 

15 30 days, and may renew the suspension for 

16 an additional period, under the cir17 cumstances described in clause (ii). 

18 ‘‘(ii) ACTIONS TRIGGERING SUSPEN19 SION.—The Secretary may take the sus20 pension or renewal actions described in 

21 clause (i), if the Secretary has reason to 

22 believe that a person producing or han23 dling an agricultural product, or a certi24 fying agent, has violated or is violating any 
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1 provision of this title, including an order or 

2 regulation promulgated under this title. 

3 ‘‘(iii) CONTINUATION OF SUSPENSION

4 THROUGH APPEAL.—If the Secretary de5 termines subsequent to an investigation 

6 that a violation of this title by a person 

7 covered by this title has occurred, the sus8 pension shall remain in effect until the 

9 Secretary issues a revocation of the certifi10 cation of the person or of the accreditation 

11 of the certifying agent, covered by this 

12 title, after an expedited administrative ap13 peal under section 2121 has been com14 pleted. 

15 ‘‘(B) REVOCATION.—After notice and op16 portunity for an administrative appeal under 

17 section 2121, if a violation described in sub18 paragraph (A)(ii) is determined to have oc19 curred and is an unlawful act under subsection 

20 (d), the Secretary shall revoke the organic cer21 tification of the producer or handler, or the ac22 creditation of the certifying agent. 

23 ‘‘(3) VIOLATION OF ORDER OR REVOCATION.— 

24 A person who violates an order to stop the sale of 

25 a product as an organically produced product under 
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1 paragraph (1), or a revocation of certification or ac2 creditation under paragraph (2)(B), shall be subject 

3 to 1 or more of the penalties provided in subsections 

4 (a) and (b) of section 2120. 

5 ‘‘(f) APPEAL.— 

6 ‘‘(1) IN GENERAL.—An order under subsection 

7 (e)(1), or a revocation of certification or accredita8 tion under subsection (e)(2)(B) shall be final and 

9 conclusive unless the affected person files an appeal 

10 of the order— 

11 ‘‘(A) first, to the administrative appeals 

12 process established under section 2121(a); and 

13 ‘‘(B) second, if the affected person so 

14 elects, to a United States district court as pro15 vided in section 2121(b) not later than 30 days 

16 after the date of the determination under sub17 paragraph (A). 

18 ‘‘(2) STANDARD.—An order under subsection 

19 (e)(1), or a revocation of certification or accredita20 tion under subsection (e)(2)(B), shall be set aside 

21 only if the order, or the revocation of certification or 

22 accreditation, is not supported by substantial evi23 dence. 

24 ‘‘(g) NONCOMPLIANCE.— 
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1 ‘‘(1) IN GENERAL.—If a person covered by this 

2 title fails to obey an order, or a revocation of certifi3 cation or accreditation, described in subsection (f)(2) 

4 after the order or revocation has become final and 

5 conclusive or after the appropriate United States 

6 district court has entered a final judgment in favor 

7 of the Secretary, the United States may apply to the 

8 appropriate United States district court for enforce9 ment of the order, or the revocation of certification 

10 or accreditation. 

11 ‘‘(2) ENFORCEMENT.—If the court determines 

12 that the order or revocation was lawfully made and 

13 duly served and that the person violated the order 

14 or revocation, the court shall enforce the order or 

15 revocation. 

16 ‘‘(3) CIVIL PENALTY.—If the court finds that 

17 the person violated the order or revocation, the per18 son shall be subject to a civil penalty of not more 

19 than $10,000 for each offense.’’. 

20 SEC. 10010. REPORT ON HONEY. 

21 (a) IN GENERAL.—Not later than 180 days after the 

22 date of enactment of this Act, the Secretary, in consulta23 tion with affected stakeholders, shall submit to the Com24 missioner of Food and Drugs a report describing how an 

25 appropriate Federal standard for the identity of honey 
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1 would promote honesty and fair dealing and would be in 

2 the interest of consumers, the honey industry, and United 

3 States agriculture. 

4 (b) CONTENTS.—In preparing the report under sub5 section (a), the Secretary shall take into consideration the 

6 March 2006 Standard of Identity citizens petition filed 

7 with the Food and Drug Administration, including any 

8 current industry amendments or clarifications necessary 

9 to update that 2006 petition. 

10 SEC. 10011. EFFECTIVE DATE. 

11 This title and the amendments made by this title take 

12 effect on October 1, 2012. 

13 TITLE XI—CROP INSURANCE 

14 SEC. 11001. SUPPLEMENTAL COVERAGE OPTION. 

15 (a) AVAILABILITY OF SUPPLEMENTAL COVERAGE

16 OPTION.—Section 508(c) of the Federal Crop Insurance 

17 Act (7 U.S.C. 1508(c)) is amended by striking paragraph 

18 (3) and inserting the following: 

19 ‘‘(3) YIELD AND LOSS BASIS OPTIONS.—A pro20 ducer shall have the option of purchasing additional 

21 coverage based on— 

22 ‘‘(A)(i) an individual yield and loss basis; 

23 or 

24 ‘‘(ii) an area yield and loss basis; 
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1 ‘‘(B) an individual yield and loss basis, 

2 supplemented with coverage based on an area 

3 yield and loss basis to cover all or a part of the 

4 deductible under the individual yield and loss 

5 policy, as authorized in paragraph (4)(C); or 

6 ‘‘(C) a margin basis alone or in combina7 tion with— 

8 ‘‘(i) individual yield and loss coverage; 

9 or 

10 ‘‘(ii) area yield and loss coverage.’’. 

11 (b) LEVEL OF COVERAGE.—Section 508(c) of the 

12 Federal Crop Insurance Act (7 U.S.C. 1508(c)) is amend13 ed by striking paragraph (4) and inserting the following: 

14 ‘‘(4) LEVEL OF COVERAGE.— 

15 ‘‘(A) DOLLAR DENOMINATION AND PER16 CENTAGE OF YIELD.—Except as provided in 

17 subparagraph (C), the level of coverage— 

18 ‘‘(i) shall be dollar denominated; and 

19 ‘‘(ii) may be purchased at any level 

20 not to exceed 85 percent of the individual 

21 yield or 95 percent of the area yield (as de22 termined by the Corporation). 

23 ‘‘(B) INFORMATION.—The Corporation 

24 shall provide producers with information on cat25 astrophic risk and additional coverage in terms 
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1 of dollar coverage (within the allowable limits of 

2 coverage provided in this paragraph). 

3 ‘‘(C) SUPPLEMENTAL COVERAGE OP4 TION.— 

5 ‘‘(i) IN GENERAL.—Notwithstanding 

6 subparagraph (A), in the case of the sup7 plemental coverage option described in 

8 paragraph (3)(B), the Corporation shall 

9 offer producers the opportunity to pur10 chase coverage in combination with a pol11 icy or plan of insurance offered under this 

12 subtitle that would allow indemnities to be 

13 paid to a producer equal to all or part of 

14 the deductible under the policy or plan of 

15 insurance, if sufficient area data is avail16 able (as determined by the Corporation). 

17 ‘‘(ii) TRIGGER.—Coverage offered 

18 under this subparagraph shall be triggered 

19 only if the losses in the area exceed 10 per20 cent of normal levels (as determined by the 

21 Corporation). 

22 ‘‘(iii) COVERAGE.—Subject to the trig23 ger described in clause (ii) and the deduct24 ible imposed by clause (iv), coverage of25 fered under this subparagraph shall cover 
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1 the first loss incurred by the producer, not 

2 to exceed the difference between— 

3 ‘‘(I) 100 percent; and 

4 ‘‘(II) the coverage level selected 

5 by the producer for the underlying 

6 policy or plan of insurance. 

7 ‘‘(iv) DEDUCTIBLE.—Coverage offered 

8 under this subparagraph shall be subject to 

9 a deductible in an amount equal to— 

10 ‘‘(I) in the case of a producer 

11 who participates in the agriculture 

12 risk coverage program under section 

13 1105(c) of the Agriculture Reform, 

14 Food, and Jobs Act of 2012, 21 per15 cent of the expected value of the crop 

16 of the producer covered by the under17 lying policy or plan of insurance, as 

18 determined by the Corporation; and 

19 ‘‘(II) in the case of all other pro20 ducers, 10 percent of the expected 

21 value of the crop of the producer cov22 ered by the underlying policy or plan 

23 of insurance, as determined by the 

24 Corporation. 
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1 ‘‘(v) CALCULATION OF PREMIUM.— 

2 Notwithstanding subsection (d), the pre3 mium shall— 

4 ‘‘(I) be sufficient to cover antici5 pated losses and a reasonable reserve; 

6 and 

7 ‘‘(II) include an amount for oper8 ating and administrative expenses es9 tablished in accordance with sub10 section (k)(4)(F).’’. 

11 (c) PAYMENT OF PORTION OF PREMIUM BY COR12 PORATION.—Section 508(e)(2) of the Federal Crop Insur13 ance Act (7 U.S.C. 1508(e)(2)) is amended by adding at 

14 the end the following: 

15 ‘‘(H) In the case of the supplemental cov16 erage option authorized in subsection (c)(4)(C), 

17 the amount shall be equal to the sum of— 

18 ‘‘(i) 70 percent of the additional pre19 mium associated with the coverage; and 

20 ‘‘(ii) the amount determined under 

21 subsection (c)(4)(C)(v)(II) for the coverage 

22 to cover operating and administrative ex23 penses.’’. 

24 (d) CONFORMING AMENDMENT.—Section 

25 508(k)(4)(F) of the Federal Crop Insurance Act (7 U.S.C. 
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1 1508(k)(4)(F)) is amended by inserting ‘‘or authorized 

2 under subsection (c)(4)(C)’’ after ‘‘of this subparagraph’’. 

3 (e) EFFECTIVE DATE.—The Federal Crop Insurance 

4 Corporation shall begin to provide additional coverage 

5 based on an individual yield and loss basis, supplemented 

6 with coverage based on an area yield and loss basis, not 

7 later than for the 2013 crop year. 

8 SEC. 11002. PREMIUM AMOUNTS FOR CATASTROPHIC RISK 

9 PROTECTION. 

10 Section 508(d)(2) of the Federal Crop Insurance Act 

11 (7 U.S.C. 1508(d)(2)) is amended by striking subpara12 graph (A) and inserting the following: 

13 ‘‘(A) In the case of catastrophic risk pro14 tection, the amount of the premium established 

15 by the Corporation for each crop for which cat16 astrophic risk protection is available shall be re17 duced by the percentage equal to the difference 

18 between the average loss ratio for the crop and 

19 100 percent, plus a reasonable reserve, as de20 termined by the Corporation.’’. 

21 SEC. 11003. PERMANENT ENTERPRISE UNIT. 

22 Section 508(e)(5) of the Federal Crop Insurance Act 

23 (7 U.S.C. 1508(e)(5)) is amended by striking subpara24 graph (A) and inserting the following: 
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1 ‘‘(A) IN GENERAL.—The Corporation may 

2 pay a portion of the premiums for plans or poli3 cies of insurance for which the insurable unit is 

4 defined on a whole farm or enterprise unit basis 

5 that is higher than would otherwise be paid in 

6 accordance with paragraph (2).’’. 

7 SEC. 11004. ENTERPRISE UNITS FOR IRRIGATED AND NON8 IRRIGATED CROPS. 

9 Section 508(e)(5) of the Federal Crop Insurance Act 

10 (7 U.S.C. 1508(e)(5)) is amended by adding at the end 

11 the following: 

12 ‘‘(D) NONIRRIGATED CROPS.—Beginning 

13 with the 2013 crop year, the Corporation shall 

14 make available separate enterprise units for ir15 rigated and nonirrigated acreages of crops in 

16 counties.’’. 

17 SEC. 11005. DATA COLLECTION. 

18 Section 508(g)(2) of the Federal Crop Insurance Act 

19 (7 U.S.C. 1508(g)(2)) is amended by adding at the end 

20 the following: 

21 ‘‘(E) SOURCES OF YIELD DATA.—To deter22 mine yields under this paragraph, the Corpora23 tion— 

24 ‘‘(i) shall use county data collected by 

25 the Risk Management Agency or the Na-
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1 tional Agricultural Statistics Service, or 

2 both; or 

3 ‘‘(ii) if sufficient county data is not 

4 available, may use other data considered 

5 appropriate by the Secretary.’’. 

6 SEC. 11006. ADJUSTMENT IN ACTUAL PRODUCTION HIS7 TORY TO ESTABLISH INSURABLE YIELDS. 

8 Section 508(g)(4)(B) of the Federal Crop Insurance 

9 Act (7 U.S.C. 1508(g)(4)(B)) is amended— 

10 (1) in the matter preceding clause (i), by insert11 ing ‘‘for the 2012 crop year or any prior crop year, 

12 or 70 percent of the applicable transitional yield for 

13 the 2013 or any subsequent crop year,’’ after ‘‘tran14 sitional yield’’; and 

15 (2) in clause (ii), by striking ‘‘60 percent of the 

16 applicable transitional yield’’ and inserting ‘‘the ap17 plicable percentage of the transitional yield described 

18 in this subparagraph’’. 

19 SEC. 11007. SUBMISSION AND REVIEW OF POLICIES. 

20 Section 508(h)(1) of the Federal Crop Insurance Act 

21 (7 U.S.C. 1508(h)(1)) is amended— 

22 (1) by redesignating subparagraphs (A) and 

23 (B) as clauses (i) and (ii), respectively, and indent24 ing appropriately; 
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1 (2) by striking ‘‘(1) IN GENERAL.—’’ and in2 serting the following: 

3 ‘‘(1) SUBMISSION AND REVIEW OF POLICIES.— 

4 ‘‘(A) SUBMISSIONS.—In addition’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(B) REVIEW.—The Corporation shall re7 view any policy developed under section 522(c) 

8 or any pilot program developed under section 

9 523 and submit the policy or program to the 

10 Board under this subsection if the Corporation, 

11 at the sole discretion of the Corporation, finds 

12 that the policy or program— 

13 ‘‘(i) will likely result in a viable and 

14 marketable policy consistent with this sub15 section; 

16 ‘‘(ii) would provide crop insurance 

17 coverage in a significantly improved form; 

18 and 

19 ‘‘(iii) adequately protects the interests 

20 of producers.’’. 

21 SEC. 11008. BOARD REVIEW AND APPROVAL. 

22 (a) REVIEW AND APPROVAL BY THE BOARD.—Sec23 tion 508(h) of the Federal Crop Insurance Act (7 U.S.C. 

24 1508(h)) is amended by striking paragraph (3) and insert25 ing the following: 
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1 ‘‘(3) REVIEW AND APPROVAL BY THE BOARD.— 

2 ‘‘(A) IN GENERAL.—A policy, plan of in3 surance, or other material submitted to the 

4 Board under this subsection shall be reviewed 

5 by the Board and shall be approved by the 

6 Board for reinsurance and for sale by approved 

7 insurance providers to producers at actuarially 

8 appropriate rates and under appropriate terms 

9 and conditions if the Board, at the sole discre10 tion of the Board, determines that— 

11 ‘‘(i) the interests of producers are 

12 adequately protected; 

13 ‘‘(ii) the rates of premium and price 

14 election methodology are actuarially appro15 priate; 

16 ‘‘(iii) the terms and conditions for the 

17 proposed policy or plan of insurance are 

18 appropriate and would not unfairly dis19 criminate among producers; 

20 ‘‘(iv) the proposed policy or plan of in21 surance will, at the sole discretion of the 

22 Board— 

23 ‘‘(I) likely result in a viable and 

24 marketable policy that can reasonably 

25 attain levels of participation similar to 
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1 other like policies or plans of insur2 ance; 

3 ‘‘(II) provide crop insurance cov4 erage in a significantly improved form 

5 or in a manner that addresses a rec6 ognized flaw or problem in an existing 

7 policy; or 

8 ‘‘(III) provide a new kind of cov9 erage for a commodity that previously 

10 had no available crop insurance, or 

11 has demonstrated a low level of par12 ticipation under existing coverage; 

13 ‘‘(v) the proposed policy or plan of in14 surance will, at the sole discretion of the 

15 Board, not have a significant adverse im16 pact on the crop insurance delivery system; 

17 and 

18 ‘‘(vi) the proposed policy or plan of in19 surance meets such other requirements as 

20 are determined appropriate by the Board. 

21 ‘‘(B) PRIORITIES.— 

22 ‘‘(i) ESTABLISHMENT.—The Board, 

23 at the sole discretion of the Board, may— 

24 ‘‘(I) annually establish priorities 

25 under this subsection that specify 
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1 types of submissions needed to fulfill 

2 the portfolio of policies or plans of in3 surance to be reviewed and approved 

4 under this subsection; and 

5 ‘‘(II) make the priorities avail6 able on the website of the Corpora7 tion. 

8 ‘‘(ii) PROCESS.— 

9 ‘‘(I) IN GENERAL.—Policies or 

10 plans of insurance that satisfy the pri11 orities established by the Board under 

12 this subsection shall be considered by 

13 the Board for approval prior to other 

14 submissions. 

15 ‘‘(II) CONSIDERATIONS.—In ap16 proving policies or plans of insurance, 

17 the Board shall— 

18 ‘‘(aa) consider providing the 

19 highest priorities for policies or 

20 plans of insurance that address 

21 underserved commodities, includ22 ing commodities for which there 

23 is no insurance; and 

24 ‘‘(bb) consider providing the 

25 highest priorities for existing 
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1 policies for which there is inad2 equate coverage or there exists 

3 low levels of participation. 

4 ‘‘(iii) OTHER CRITERIA.—The Board 

5 may establish such other criteria as the 

6 Board determines to meet the needs of 

7 producers and the priorities of this sub8 section, consistent with the purposes of 

9 this subtitle.’’. 

10 SEC. 11009. CONSULTATION. 

11 Section 508(h)(4) of the Federal Crop Insurance Act 

12 (7 U.S.C. 1508(h)) is amended by adding at the end the 

13 following: 

14 ‘‘(E) CONSULTATION.— 

15 ‘‘(i) REQUIREMENT.—As part of the 

16 feasibility and research associated with the 

17 development of a policy or other material 

18 conducted prior to making a submission to 

19 the Board under this subsection, the sub20 mitter shall consult with groups rep21 resenting producers of agricultural com22 modities in all major producing areas for 

23 the commodities to be served or potentially 

24 impacted, either directly or indirectly. 
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1 ‘‘(ii) SUBMISSION TO THE BOARD.— 

2 Any submission made to the Board under 

3 this subsection shall contain a summary 

4 and analysis of the feasibility and research 

5 findings from the impacted groups de6 scribed in clause (i), including a summary 

7 assessment of the support for or against 

8 development of the policy and an assess9 ment on the impact of the proposed policy 

10 to the general marketing and production of 

11 the crop from both a regional and national 

12 perspective. 

13 ‘‘(iii) EVALUATION BY THE BOARD.— 

14 In evaluating whether the interests of pro15 ducers are adequately protected pursuant 

16 to paragraph (3) with respect to an sub17 mission made under this subsection, the 

18 Board shall review the information pro19 vided pursuant to clause (ii) to determine 

20 if the submission will create adverse mar21 ket distortions with respect to the produc22 tion of commodities that are the subject of 

23 the submission.’’. 
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1 SEC. 11010. BUDGET LIMITATIONS ON RENEGOTIATION OF 

2 THE STANDARD REINSURANCE AGREEMENT. 

3 Section 508(k)(8) of the Federal Crop Insurance Act 

4 (7 U.S.C. 1508(k)(8)) is amended by adding at the end 

5 the following: 

6 ‘‘(F) BUDGET.— 

7 ‘‘(i) IN GENERAL.—The Board shall 

8 ensure that any Standard Reinsurance 

9 Agreement negotiated under subparagraph 

10 (A)(ii), as compared to the previous Stand11 ard Reinsurance Agreement— 

12 ‘‘(I) to the maximum extent prac13 ticable, shall be budget neutral; and 

14 ‘‘(II) in no event, may signifi15 cantly depart from budget neutrality. 

16 ‘‘(ii) USE OF SAVINGS.—To the extent 

17 that any budget savings is realized in the 

18 renegotiation of a Standard Reinsurance 

19 Agreement under subparagraph (A)(ii), 

20 and the savings are determined not to be 

21 a significant departure from budget neu22 trality under clause (i), the savings shall 

23 be used for programs administered or 

24 managed by the Risk Management Agen25 cy.’’. 
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1 SEC. 11011. STACKED INCOME PROTECTION PLAN FOR PRO2 DUCERS OF UPLAND COTTON. 

3 (a) AVAILABILITY OF STACKED INCOME PROTECTION

4 PLAN.—The Federal Crop Insurance Act is amended by 

5 inserting after section 508A (7 U.S.C. 1508a) the fol6 lowing: 

7 ‘‘SEC. 508B. STACKED INCOME PROTECTION PLAN FOR 

8 PRODUCERS OF UPLAND COTTON. 

9 ‘‘(a) AVAILABILITY.—Beginning not later than the 

10 2013 crop of upland cotton, if practicable, the Corporation 

11 shall make available to producers of maximum eligible 

12 acres of upland cotton an additional policy (to be known 

13 as the ‘Stacked Income Protection Plan’), which shall pro14 vide coverage consistent with the Group Risk Income Pro15 tection Plan (and the associated Harvest Revenue Option 

16 Endorsement) offered by the Corporation for the 2011 

17 crop year. 

18 ‘‘(b) REQUIRED TERMS.—The Corporation may mod19 ify the Stacked Income Protection Plan on a program-wide 

20 basis, except that the Stacked Income Protection Plan 

21 shall comply with the following requirements: 

22 ‘‘(1)(A) Provide coverage for revenue loss of not 

23 more than 30 percent of expected county revenue, 

24 specified in increments of 5 percent. 

25 ‘‘(B) The deductible is the minimum percent of 

26 revenue loss at which indemnities are triggered 
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1 under the plan, not to be less than 10 percent of the 

2 expected county revenue. 

3 ‘‘(C) Once the deductible is met, any losses in 

4 excess of the deductible will be paid up to the cov5 erage selected by the producer. 

6 ‘‘(2) Be offered to producers of upland cotton 

7 in all counties with upland cotton production— 

8 ‘‘(A) at a county-wide level to the fullest 

9 extent practicable; or 

10 ‘‘(B) in counties that lack sufficient data, 

11 on the basis of such larger geographical area as 

12 the Corporation determines to provide sufficient 

13 data for purposes of providing the coverage. 

14 ‘‘(3) Be purchased in addition to any other in15 dividual or area coverage in effect on the producer’s 

16 acreage or as a stand-alone policy, except that if a 

17 producer has an individual or area coverage for the 

18 same acreage, the maximum coverage available 

19 under the Stacked Income Protection Plan shall not 

20 exceed the deductible for the individual or area cov21 erage. 

22 ‘‘(4) Establish coverage based on— 

23 ‘‘(A) an expected price that is the expected 

24 price established under existing Group Risk In25 come Protection or area wide policy offered by 
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1 the Corporation for the applicable county (or 

2 area) and crop year; and 

3 ‘‘(B) an expected county yield that is the 

4 higher of— 

5 ‘‘(i) the expected county yield estab6 lished for the existing area-wide plans of7 fered by the Corporation for the applicable 

8 county (or area) and crop year (or, in geo9 graphic areas where area-wide plans are 

10 not offered, an expected yield determined 

11 in a manner consistent with those of area12 wide plans); or 

13 ‘‘(ii)(I) the average of the applicable 

14 yield data for the county (or area) for the 

15 most recent 5 years, excluding the highest 

16 and lowest observations, from the Risk 

17 Management Agency or the National Agri18 cultural Statistics, or both; or 

19 ‘‘(II) if sufficient county data is not 

20 available, such other data considered ap21 propriate by the Secretary. 

22 ‘‘(5) Use a multiplier factor to establish max23 imum protection per acre (referred to as a ‘protec24 tion factor’) of not more than 120 percent. 
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1 ‘‘(6) Pay an indemnity based on the amount 

2 that the expected county revenue exceeds the actual 

3 county revenue, as applied to the individual coverage 

4 of the producer. Indemnities under the Stacked In5 come Protection Plan shall not include or overlap 

6 the amount of the deductible selected under para7 graph (1). 

8 ‘‘(7) To the maximum extent practicable, in all 

9 counties for which data are available, establish sepa10 rate coverage for irrigated and nonirrigated prac11 tices. 

12 ‘‘(8) Notwithstanding section 508(d), include a 

13 premium that— 

14 ‘‘(A) is sufficient to cover anticipated 

15 losses and a reasonable reserve; and 

16 ‘‘(B) includes an amount for operating and 

17 administrative expenses established in accord18 ance with section 508(k)(4)(F). 

19 ‘‘(c) RELATION TO OTHER COVERAGES.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), the Stacked Income Protection Plan is in 

22 addition to all other coverages available to producers 

23 of upland cotton. 

24 ‘‘(2) LIMITATION.—Acreage of upland cotton 

25 insured under the Supplemental Coverage Option 
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1 shall not be eligible for the Stacked Income Protec2 tion Plan. 

3 ‘‘(d) PAYMENT OF PORTION OF PREMIUM BY COR4 PORATION.—Subject to section 508(e)(4), the amount of 

5 premium paid by the Corporation for all qualifying cov6 erage levels of the Stacked Income Protection Plan shall 

7 be— 

8 ‘‘(1) 80 percent of the amount of the premium 

9 established under subsection (b)(8)(A) for the cov10 erage level selected; and 

11 ‘‘(2) the amount determined under subsection 

12 (b)(8)(B) to cover administrative and operating ex13 penses.’’. 

14 (b) CONFORMING AMENDMENT.—Section 

15 508(k)(4)(F) of the Federal Crop Insurance Act (7 U.S.C. 

16 1508(k)(4)(F)) (as amended by section 11001(d)) is 

17 amended by inserting ‘‘or under section 508B’’ after ‘‘sub18 section (c)(4)(C)’’. 

19 SEC. 11012. PEANUT REVENUE CROP INSURANCE. 

20 The Federal Crop Insurance Act is amended by in21 serting after section 508B (as added by section 11011(a)) 

22 the following: 

23 ‘‘SEC. 508C. PEANUT REVENUE CROP INSURANCE. 

24 ‘‘(a) IN GENERAL.—Effective beginning with the 

25 2013 crop year, the Risk Management Agency and the 
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1 Corporation shall make available to producers of peanuts 

2 a revenue crop insurance program for peanuts. 

3 ‘‘(b) EFFECTIVE PRICE.— 

4 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

5 for purposes of the policies and plans of insurance 

6 offered under subsections (a) and (b) of section 508, 

7 the effective price for peanuts shall be equal to the 

8 Rotterdam price index for peanuts, as adjusted to 

9 reflect the farmer stock price of peanuts in the 

10 United States. 

11 ‘‘(2) ADJUSTMENTS.— 

12 ‘‘(A) IN GENERAL.—The effective price for 

13 peanuts established under paragraph (1) may 

14 be adjusted by the Risk Management Agency 

15 and the Corporation to correct distortions. 

16 ‘‘(B) ADMINISTRATION.—If an adjustment 

17 is made under subparagraph (A), the Risk 

18 Management Agency and the Corporation 

19 shall— 

20 ‘‘(i) make the adjustment in an open 

21 and transparent manner; and 

22 ‘‘(ii) submit to the Committee on Ag23 riculture of the House of Representatives 

24 and the Committee on Agriculture, Nutri25 tion, and Forestry of the Senate a report 
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1 that describes the reasons for the adjust2 ment.’’. 

3 SEC. 11013. AUTHORITY TO CORRECT ERRORS. 

4 Section 515(c) of the Federal Crop Insurance Act (7 

5 U.S.C. 1515(c)) is amended— 

6 (1) in the first sentence, by striking ‘‘The Sec7 retary’’ and inserting the following: 

8 ‘‘(1) IN GENERAL.—The Secretary’’; 

9 (2) in the second sentence, by striking ‘‘Begin10 ning with’’ and inserting the following: 

11 ‘‘(2) FREQUENCY.—Beginning with’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(3) CORRECTIONS.— 

14 ‘‘(A) IN GENERAL.—The Corporation shall 

15 establish procedures that allow an agent and 

16 approved insurance provider within a reasonable 

17 amount of time following the applicable sales 

18 closing date to correct information regarding 

19 the entity name, social security number, tax 

20 identification number, or such other eligibility 

21 information as determined by the Corporation 

22 that is provided by a producer for the purpose 

23 of obtaining coverage under any policy or plan 

24 of insurance made available under this subtitle 

25 to ensure that the eligibility information is con-
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1 sistent with the information reported by the 

2 producer to the Farm Service Agency. 

3 ‘‘(B) LIMITATION.—In accordance with the 

4 procedures of the Corporation, procedures 

5 under subparagraph (A) may include any subse6 quent correction to the eligibility information 

7 described in that subparagraph made by the 

8 Farm Service Agency if the corrections do not 

9 allow the producer— 

10 ‘‘(i) to obtain a disproportionate ben11 efit under the crop insurance program or 

12 any related program of the Department of 

13 Agriculture; 

14 ‘‘(ii) to avoid ineligibility requirements 

15 for insurance; or 

16 ‘‘(iii) to avoid an obligation or re17 quirement under any Federal or State 

18 law.’’. 

19 SEC. 11014. IMPLEMENTATION. 

20 Section 515 of the Federal Crop Insurance Act (7 

21 U.S.C. 1515) is amended— 

22 (1) in subsection (j), by striking paragraph (1) 

23 and inserting the following: 

24 ‘‘(1) SYSTEMS MAINTENANCE AND UP25 GRADES.— 
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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 maintain and upgrade the information manage3 ment systems of the Corporation used in the 

4 administration and enforcement of this subtitle. 

5 ‘‘(B) REQUIREMENT.— 

6 ‘‘(i) IN GENERAL.—In maintaining 

7 and upgrading the systems, the Secretary 

8 shall ensure that new hardware and soft9 ware are compatible with the hardware and 

10 software used by other agencies of the De11 partment to maximize data sharing and 

12 promote the purposes of this section. 

13 ‘‘(ii) ACREAGE REPORT STREAM14 LINING INITIATIVE PROJECT.—As soon as 

15 practicable, the Secretary shall develop and 

16 implement an acreage report streamlining 

17 initiative project to allow producers to re18 port acreage and other information directly 

19 to the Department.’’; and 

20 (2) in subsection (k), by striking paragraph (1) 

21 and inserting the following: 

22 ‘‘(1) INFORMATION TECHNOLOGY.— 

23 ‘‘(A) IN GENERAL.—For purposes of sub24 section (j)(1), the Corporation may use, from 

25 amounts made available from the insurance 
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1 fund established under section 516(c), not more 

2 than— 

3 ‘‘(i)(I) for fiscal year 2013, 

4 $25,000,000; and 

5 ‘‘(II) for each of fiscal years 2014 

6 through 2017, $10,000,000; or 

7 ‘‘(ii) if the Acreage Crop Reporting 

8 Streamlining Initiative (ACRSI) project is 

9 substantially completed by September 30, 

10 2013, not more than $15,000,000 for each 

11 of fiscal years 2014 through 2017. 

12 ‘‘(B) NOTIFICATION.—Not later than July 

13 1, 2013, the Secretary shall notify the Com14 mittee on Agriculture of the House of Rep15 resentatives and the Committee on Agriculture, 

16 Nutrition, and Forestry of the Senate on the 

17 status of the substantial completion of the 

18 Acreage Crop Reporting Streamlining Initiative 

19 (ACRSI) project.’’. 

20 SEC. 11015. APPROVAL OF COSTS FOR RESEARCH AND DE21 VELOPMENT. 

22 Section 522(b)(2) of the Federal Crop Insurance Act 

23 (7 U.S.C. 1522(b)(2)) is amended by striking subpara24 graph (E) and inserting the following: 

25 ‘‘(E) APPROVAL.— 
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1 ‘‘(i) IN GENERAL.—The Board may 

2 approve up to 50 percent of the projected 

3 total research and development costs to be 

4 paid in advance to an applicant, in accord5 ance with the procedures developed by the 

6 Board for the making of the payments, if, 

7 after consideration of the reviewer reports 

8 described in subparagraph (D) and such 

9 other information as the Board determines 

10 appropriate, the Board determines that— 

11 ‘‘(I) the concept, in good faith, 

12 will likely result in a viable and mar13 ketable policy consistent with section 

14 508(h); 

15 ‘‘(II) at the sole discretion of the 

16 Board, the concept, if developed into a 

17 policy and approved by the Board, 

18 would provide crop insurance cov19 erage— 

20 ‘‘(aa) in a significantly im21 proved form or that addresses a 

22 unique need of agricultural pro23 ducers; 
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1 ‘‘(bb) to a crop or region not 

2 traditionally served by the Fed3 eral crop insurance program; or 

4 ‘‘(cc) in a form that ad5 dresses a recognized flaw or 

6 problem in the program; 

7 ‘‘(III) the applicant agrees to 

8 provide such reports as the Corpora9 tion determines are necessary to mon10 itor the development effort; 

11 ‘‘(IV) the proposed budget and 

12 timetable are reasonable, as deter13 mined by the Board; and 

14 ‘‘(V) the concept proposal meets 

15 any other requirements that the 

16 Board determines appropriate. 

17 ‘‘(ii) WAIVER.—The Board may waive 

18 the 50-percent limitation and, upon re19 quest of the submitter after the submitter 

20 has begun research and development activi21 ties, the Board may approve an additional 

22 25 percent advance payment to the sub23 mitter for research and development costs, 

24 if, at the sole discretion of the Board, the 

25 Board determines that— 
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1 ‘‘(I) the intended policy or plan 

2 of insurance developed by the sub3 mitter will provide coverage for a re4 gion or crop that is underserved by 

5 the Federal crop insurance program, 

6 including specialty crops; 

7 ‘‘(II) the submitter is making 

8 satisfactory progress towards devel9 oping a viable and marketable policy 

10 or plan of insurance consistent with 

11 section 508(h); and 

12 ‘‘(III) the submitter does not 

13 have sufficient financial resources to 

14 complete the development of the sub15 mission into a viable and marketable 

16 policy or plan of insurance consistent 

17 with section 508(h).’’. 

18 SEC. 11016. WHOLE FARM RISK MANAGEMENT INSURANCE. 

19 Section 522(c) of the Federal Crop Insurance Act (7 

20 U.S.C. 1522(c)) is amended by adding at the end the fol21 lowing: 

22 ‘‘(18) WHOLE FARM DIVERSIFIED RISK MAN23 AGEMENT INSURANCE PLAN.— 

24 ‘‘(A) IN GENERAL.—The Corporation shall 

25 conduct activities or enter into contracts to 
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1 carry out research and development to develop 

2 a whole farm risk management insurance plan, 

3 with a liability limitation of $1,500,000, that 

4 allows a diversified crop or livestock producer 

5 the option to qualify for an indemnity if actual 

6 gross farm revenue is below 85 percent of the 

7 average gross farm revenue or the expected 

8 gross farm revenue that can reasonably be ex9 pected of the producer, as determined by the 

10 Corporation. 

11 ‘‘(B) ELIGIBLE PRODUCERS.—The Cor12 poration shall permit producers (including di13 rect-to-consumer marketers, and producers 

14 servicing local and regional and farm identity15 preserved markets) who produce multiple agri16 cultural commodities, including specialty crops, 

17 industrial crops, livestock, and aquaculture 

18 products, to participate in the plan in lieu of 

19 any other plan under this subtitle. 

20 ‘‘(C) DIVERSIFICATION.—The Corporation 

21 may provide diversification-based additional 

22 coverage payment rates, premium discounts, or 

23 other enhanced benefits in recognition of the 

24 risk management benefits of crop and livestock 

25 diversification strategies for producers that 
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1 grow multiple crops or that may have income 

2 from the production of livestock that uses a 

3 crop grown on the farm. 

4 ‘‘(D) MARKET READINESS.—The Corpora5 tion may include coverage for the value of any 

6 packing, packaging, or any other similar on7 farm activity the Corporation determines to be 

8 the minimum required in order to remove the 

9 commodity from the field. 

10 ‘‘(E) REPORT.—Not later than 2 years 

11 after the date of enactment of this paragraph, 

12 the Corporation shall submit to the Committee 

13 on Agriculture of the House of Representatives 

14 and the Committee on Agriculture, Nutrition, 

15 and Forestry of the Senate a report that de16 scribes the results and feasibility of the re17 search and development conducted under this 

18 paragraph, including an analysis of potential 

19 adverse market distortions.’’. 

20 SEC. 11017. STUDY OF FOOD SAFETY INSURANCE. 

21 Section 522(c) of the Federal Crop Insurance Act (7 

22 U.S.C. 1522(c)) (as amended by section 11016) is amend23 ed by adding at the end the following: 

24 ‘‘(19) STUDY OF FOOD SAFETY INSURANCE.— 
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1 ‘‘(A) IN GENERAL.—The Corporation shall 

2 offer to enter into a contract with 1 or more 

3 qualified entities to conduct a study to deter4 mine whether offering policies that provide cov5 erage for specialty crops from food safety and 

6 contamination issues would benefit agricultural 

7 producers. 

8 ‘‘(B) SUBJECT.—The study described in 

9 subparagraph (A) shall evaluate policies and 

10 plans of insurance coverage that provide protec11 tion for production or revenue impacted by food 

12 safety concerns including, at a minimum, gov13 ernment, retail, or national consumer group an14 nouncements of a health advisory, removal, or 

15 recall related to a contamination concern. 

16 ‘‘(C) REPORT.—Not later than 1 year 

17 after the date of enactment of this paragraph, 

18 the Corporation shall submit to the Committee 

19 on Agriculture of the House of Representatives 

20 and the Committee on Agriculture, Nutrition, 

21 and Forestry of the Senate a report that de22 scribes the results of the study conducted under 

23 subparagraph (A).’’. 
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1 SEC. 11018. CROP INSURANCE FOR LIVESTOCK. 

2 Section 522(c) of the Federal Crop Insurance Act (as 

3 amended by section 11016) is amended by adding at the 

4 end the following: 

5 ‘‘(19) STUDY ON SWINE CATASTROPHIC DIS6 EASE PROGRAM.— 

7 ‘‘(A) IN GENERAL.—The Corporation shall 

8 contract with a qualified person to conduct a 

9 study to determine the feasibility of insuring 

10 swine producers for a catastrophic event. 

11 ‘‘(B) REPORT.—Not later than 1 year 

12 after the date of the enactment of this para13 graph, the Corporation shall submit to the 

14 Committee on Agriculture of the House of Rep15 resentatives and the Committee on Agriculture, 

16 Nutrition, and Forestry of the Senate a report 

17 that describes the results of the study con18 ducted under subparagraph (A).’’. 

19 SEC. 11019. MARGIN COVERAGE FOR CATFISH. 

20 Section 522(c) of the Federal Crop Insurance Act (as 

21 amended by section 11017) is amended by adding at the 

22 end the following: 

23 ‘‘(20) MARGIN COVERAGE FOR CATFISH.— 

24 ‘‘(A) IN GENERAL.—The Corporation shall 

25 offer to enter into a contract with a qualified 

26 entity to conduct research and development re-
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1 garding a policy to insure producers against re2 duction in the margin between the market value 

3 of catfish and selected costs incurred in the 

4 production of catfish. 

5 ‘‘(B) ELIGIBILITY.—Eligibility for the pol6 icy described in subparagraph (A) shall be lim7 ited to freshwater species of catfish that are 

8 propagated and reared in controlled or selected 

9 environments. 

10 ‘‘(C) IMPLEMENTATION.—The Board shall 

11 review the policy described in subparagraph (B) 

12 under subsection 508(h) and approve the policy 

13 if the Board finds that the policy— 

14 ‘‘(i) will likely result in a viable and 

15 marketable policy consistent with this sub16 section; 

17 ‘‘(ii) would provide crop insurance 

18 coverage in a significantly improved form; 

19 ‘‘(iii) adequately protects the interests 

20 of producers; and 

21 ‘‘(iv) the proposed policy meets other 

22 requirements of this subtitle determined 

23 appropriate by the Board.’’. 
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1 SEC. 11020. POULTRY BUSINESS DISRUPTION INSURANCE 

2 POLICY. 

3 Section 522(c) of the Federal Crop Insurance Act (7 

4 U.S.C. 1522(c)) (as amended by sections 11016, 11017, 

5 and 11018) is amended by adding at the end the following: 

6 ‘‘(21) POULTRY BUSINESS DISRUPTION INSUR7 ANCE POLICY AND CATASTROPHIC DISEASE PRO8 GRAM.— 

9 ‘‘(A) DEFINITION OF POULTRY.—In this 

10 paragraph, the term ‘poultry’ has the meaning 

11 given the term in section 2(a) of the Packers 

12 and Stockyards Act, 1921 (7 U.S.C. 182(a)). 

13 ‘‘(B) AUTHORITY.—The Corporation shall 

14 offer to enter into 1 or more contracts with 

15 qualified entities to carry out— 

16 ‘‘(i) a study to determine the feasi17 bility of insuring commercial poultry pro18 duction against business disruptions 

19 caused by integrator bankruptcy; and 

20 ‘‘(ii) a study to determine the feasi21 bility of insuring poultry producers for a 

22 catastrophic event. 

23 ‘‘(C) BUSINESS DISRUPTION STUDY.—The 

24 study described in subparagraph (B)(i) shall— 
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1 ‘‘(i) evaluate the market place for 

2 business disruption insurance that is avail3 able to poultry producers; 

4 ‘‘(ii) assess the feasibility of a policy 

5 to allow producers to ensure against a por6 tion of losses from loss under contract due 

7 to business disruption from integrator 

8 bankruptcy; and 

9 ‘‘(iii) analyze the costs to the Federal 

10 government of a Federal business disrup11 tion insurance program for poultry pro12 ducers. 

13 ‘‘(D) REPORTS.—Not later than 1 year 

14 after the date of enactment of this paragraph, 

15 the Corporation shall submit to the Committee 

16 on Agriculture of the House of Representatives 

17 and the Committee on Agriculture, Nutrition, 

18 and Forestry of the Senate a report that de19 scribes the results of— 

20 ‘‘(i) the study carried out under sub21 paragraph (B)(i); and 

22 ‘‘(ii) the study carried out under sub23 paragraph (B)(ii).’’. 
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1 SEC. 11021. CROP INSURANCE FOR ORGANIC CROPS. 

2 (a) IN GENERAL.—Section 508(c)(6) of the Federal 

3 Crop Insurance Act (7 U.S.C. 1508(c)(6)) is amended by 

4 adding at the end the following: 

5 ‘‘(D) ORGANIC CROPS.— 

6 ‘‘(i) IN GENERAL.—As soon as pos7 sible, but not later than the 2015 reinsur8 ance year, the Corporation shall offer pro9 ducers of organic crops price elections for 

10 all organic crops produced in compliance 

11 with standards issued by the Department 

12 of Agriculture under the national organic 

13 program established under the Organic 

14 Foods Production Act of 1990 (7 U.S.C. 

15 6501 et seq.) that reflect the actual retail 

16 or wholesale prices, as appropriate, re17 ceived by producers for organic crops, as 

18 determined by the Secretary using all rel19 evant sources of information. 

20 ‘‘(ii) ANNUAL REPORT.—The Corpora21 tion shall submit to the Committee on Ag22 riculture of the House of Representatives 

23 and the Committee on Agriculture, Nutri24 tion, and Forestry of the Senate an annual 

25 report on progress made in developing and 
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1 improving Federal crop insurance for or2 ganic crops, including— 

3 ‘‘(I) the numbers and varieties of 

4 organic crops insured; 

5 ‘‘(II) the progress of imple6 menting the price elections required 

7 under this subparagraph, including 

8 the rate at which additional price elec9 tions are adopted for organic crops; 

10 ‘‘(III) the development of new in11 surance approaches relevant to or12 ganic producers; and 

13 ‘‘(IV) any recommendations the 

14 Corporation considers appropriate to 

15 improve Federal crop insurance cov16 erage for organic crops.’’. 

17 (b) CONFORMING AMENDMENT.—Section 522(c) of 

18 the Federal Crop Insurance Act (7 U.S.C. 1522(c)) (as 

19 amended by section 11018) is amended— 

20 (1) by striking paragraph (10); and 

21 (2) by redesignating paragraphs (11) through 

22 (20) as paragraphs (10) through (19), respectively. 

23 SEC. 11022. RESEARCH AND DEVELOPMENT. 

24 (a) IN GENERAL.—Section 522(c) of the Federal 

25 Crop Insurance Act (7 U.S.C. 1522(c)) is amended— 
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1 (1) in the subsection heading, by striking ‘‘Con2 tracting’’; 

3 (2) in paragraph (1), in the matter preceding 

4 subparagraph (A), by striking ‘‘may enter into con5 tracts to carry out research and development to’’ 

6 and inserting ‘‘may conduct activities or enter into 

7 contracts to carry out research and development to 

8 maintain or improve existing policies or develop new 

9 policies to’’; 

10 (3) in paragraph (2)— 

11 (A) in subparagraph (A), by inserting 

12 ‘‘conduct research and development or’’ after 

13 ‘‘The Corporation may’’; and 

14 (B) by striking subparagraph (B) and in15 serting the following: 

16 ‘‘(B) CONSULTATION.—Before conducting 

17 research and development or entering into a 

18 contract under subparagraph (A), the Corpora19 tion shall follow the consultation requirements 

20 described in section 508(h)(4)(E).’’; 

21 (4) in paragraph (5), by inserting ‘‘after expert 

22 review in accordance with section 505(e) and proce23 dures of the Board’’ after ‘‘approved by the Board’’; 

24 and 
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1 (5) in paragraph (6), by striking ‘‘a pasture, 

2 range, and forage program’’ and inserting ‘‘policies 

3 that increase participation by producers of under4 served agricultural commodities, including sweet sor5 ghum, sorghum for biomass, specialty crops, sugar6 cane, and dedicated energy crops’’. 

7 (b) FUNDING.—Section 522(e) of the Federal Crop 

8 Insurance Act (7 U.S.C. 1522(e)) is amended— 

9 (1) in paragraph (2)— 

10 (A) by striking ‘‘(A) AUTHORITY.—’’ and 

11 inserting ‘‘(A) CONDUCTING AND CONTRACTING

12 FOR RESEARCH AND DEVELOPMENT.—’’; 

13 (B) in subparagraph (A), by inserting 

14 ‘‘conduct research and development and’’ after 

15 ‘‘the Corporation may use to’’; and 

16 (C) in subparagraph (B), by inserting 

17 ‘‘conduct research and development and’’ after 

18 ‘‘for the fiscal year to’’; 

19 (2) in paragraph (3), in the matter preceding 

20 subparagraph (A), by striking ‘‘to provide either re21 imbursement payments or contract payments’’; and 

22 (3) by striking paragraph (4). 

23 SEC. 11023. PILOT PROGRAMS. 

24 Section 523(a) of the Federal Crop Insurance Act (7 

25 U.S.C. 1523(a)) is amended— 
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1 (1) in paragraph (1), by inserting ‘‘, at the sole 

2 discretion of the Corporation,’’ after ‘‘may’’; and 

3 (2) by striking paragraph (5). 

4 SEC. 11024. INDEX-BASED WEATHER INSURANCE PILOT 

5 PROGRAM. 

6 Section 523(a)(2) of the Federal Crop Insurance Act 

7 (7 U.S.C. 1523(a)(2)) is amended— 

8 (1) by striking ‘‘Under’’ inserting the following: 

9 ‘‘(A) IN GENERAL.—Under’’; and 

10 (2) by adding at the end the following: 

11 ‘‘(B) INDEX-BASED WEATHER INSURANCE

12 PILOT PROGRAM.— 

13 ‘‘(i) IN GENERAL.—Notwithstanding 

14 subparagraph (A), the Corporation, at the 

15 sole discretion of the Corporation, may 

16 conduct a pilot program to provide finan17 cial assistance for producers of under18 served crops and livestock (including spe19 cialty crops) to purchase an index-based 

20 weather insurance product from a private 

21 insurance company, subject to the require22 ments of this subparagraph. 

23 ‘‘(ii) PAYMENT OF PREMIUM.— 

24 ‘‘(I) IN GENERAL.—Subject to 

25 subclause (II) and clause (v), the Cor-
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1 poration may pay a portion of the pre2 mium for producers who purchase 

3 index-based weather insurance protec4 tion from a private insurance com5 pany for a crop and policy that is not 

6 reinsured under this subtitle, as deter7 mined by the Corporation. 

8 ‘‘(II) CONDITION.—The premium 

9 assistance under subclause (I) shall 

10 not exceed 60 percent of the esti11 mated premium amount, based on ex12 pected losses, representative operating 

13 expenses, and representative profit 

14 margins, as determined by the Cor15 poration. 

16 ‘‘(iii) ELIGIBLE PROVIDERS.—Before 

17 providing premium assistance to producers 

18 to purchase index-based weather insurance 

19 from a private insurance company pursu20 ant to this subparagraph, the Corporation 

21 shall verify that the company has adequate 

22 experience— 

23 ‘‘(I) to develop and manage the 

24 index-based weather insurance prod25 ucts, including adequate resources, ex-
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1 perience, and assets or sufficient rein2 surance to meet the obligations of the 

3 company under this subparagraph; 

4 and 

5 ‘‘(II) to support and deliver the 

6 index-based weather insurance prod7 ucts. 

8 ‘‘(iv) PROCEDURES.—The Corporation 

9 shall develop and publish procedures to ad10 minister the pilot program under this sub11 paragraph that— 

12 ‘‘(I) require each applicable pri13 vate insurance company to report 

14 claim and sales data, and any other 

15 data the Corporation determines to be 

16 appropriate, to allow the Corporation 

17 to evaluate product pricing and per18 formance; 

19 ‘‘(II) allow the private insurance 

20 companies exclusive rights over the 

21 private insurance offered under this 

22 subparagraph, including rating of 

23 policies, protection of intellectual 

24 property rights on the product or pol25 icy, and associated rating method-
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1 ology, for the period during which the 

2 companies are eligible under clause 

3 (iii); and 

4 ‘‘(III) contain such other require5 ments as the Corporation determines 

6 to be necessary to ensure that— 

7 ‘‘(aa) the interests of pro8 ducers are protected; and 

9 ‘‘(bb) the program operates 

10 in an actuarially sound manner. 

11 ‘‘(v) FUNDING.—Of the funds of the 

12 Corporation, the Corporation shall use to 

13 carry out this subparagraph $10,000,000 

14 for each of fiscal years 2013 through 

15 2017, to remain available until expended.’’. 

16 SEC. 11025. ENHANCING PRODUCER SELF-HELP THROUGH 

17 FARM FINANCIAL BENCHMARKING. 

18 (a) DEFINITION.—Section 502(b) of the Federal 

19 Crop Insurance Act (7 U.S.C. 1502(b)) is amended— 

20 (1) by redesignating paragraphs (6) through 

21 (9) as paragraphs (7) through (10), respectively; 

22 and 

23 (2) by inserting after paragraph (5) the fol24 lowing: 
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1 ‘‘(6) FARM FINANCIAL BENCHMARKING.—The 

2 term ‘farm financial benchmarking’ means— 

3 ‘‘(A) the process of comparing the per4 formance of an agricultural enterprise against 

5 the performance of other similar enterprises, 

6 through the use of comparable and reliable 

7 data, in order to identify business management 

8 strengths, weaknesses, and steps necessary to 

9 improve management performance and business 

10 profitability; and 

11 ‘‘(B) benchmarking of the type conducted 

12 by farm management and producer associations 

13 consistent with the activities described in or 

14 funded pursuant to section 1672D of the Food, 

15 Agriculture, Conservation, and Trade Act of 

16 1990 (7 U.S.C. 5925f).’’. 

17 (b) PARTNERSHIPS FOR RISK MANAGEMENT FOR

18 PRODUCERS OF SPECIALTY CROPS AND UNDERSERVED

19 AGRICULTURAL COMMODITIES.—Section 522(d)(3)(F) of 

20 the Federal Crop Insurance Act (7 U.S.C. 1522(d)(3)(F)) 

21 is amended by inserting ‘‘farm financial benchmarking,’’ 

22 after ‘‘management,’’. 

23 (c) CROP INSURANCE EDUCATION AND RISK MAN24 AGEMENT ASSISTANCE.—Section 524(a) of the Federal 

25 Crop Insurance Act (7 U.S.C. 1524(a)) is amended— 
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1 (1) in paragraph (3)(A), by inserting ‘‘farm fi2 nancial benchmarking,’’ after ‘‘risk reduction,’’; and 

3 (2) in paragraph (4), in the matter preceding 

4 subparagraph (A), by inserting ‘‘(including farm fi5 nancial benchmarking)’’ after ‘‘management strate6 gies’’. 

7 SEC. 11026. BEGINNING FARMER AND RANCHER PROVI8 SIONS. 

9 (a) DEFINITION.—Section 502(b) of the Federal 

10 Crop Insurance Act (7 U.S.C. 1502(b)) (as amended by 

11 section 11022(a)) is amended— 

12 (1) by redesignating paragraphs (3) through 

13 (10) as paragraphs (4) through (11), respectively; 

14 and 

15 (2) by inserting after paragraph (2) the fol16 lowing: 

17 ‘‘(3) BEGINNING FARMER OR RANCHER.—The 

18 term ‘beginning farmer or rancher’ means a farmer 

19 or rancher who has not actively operated and man20 aged a farm or ranch with a bona fide insurable in21 terest in a crop or livestock as an owner-operator, 

22 landlord, tenant, or sharecropper for more than 5 

23 crop years, as determined by the Secretary.’’. 
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1 (b) PREMIUM ADJUSTMENTS.—Section 508 of the 

2 Federal Crop Insurance Act (7 U.S.C. 1508) is amend3 ed— 

4 (1) in subsection (b)(5)(E), by inserting ‘‘and 

5 beginning farmers or ranchers’’ after ‘‘limited re6 source farmers’’; 

7 (2) in subsection (e), by adding at the end the 

8 following: 

9 ‘‘(8) PREMIUM FOR BEGINNING FARMERS OR

10 RANCHERS.—Notwithstanding any other provision of 

11 this subsection regarding payment of a portion of 

12 premiums, a beginning farmer or rancher shall re13 ceive premium assistance that is 10 percentage 

14 points greater than premium assistance that would 

15 otherwise be available under paragraphs (2) (except 

16 for subparagraph (A) of that paragraph), (5), (6), 

17 and (7) for the applicable policy, plan of insurance, 

18 and coverage level selected by the beginning farmer 

19 or rancher.’’; and 

20 (3) in subsection (g)— 

21 (A) in paragraph (2)(B)— 

22 (i) in clause (i), by striking ‘‘or’’ at 

23 the end; 

24 (ii) in clause (ii)(III), by striking the 

25 period at the end and inserting ‘‘; or’’; and 
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1 (iii) by adding at the end the fol2 lowing: 

3 ‘‘(iii) if the producer is a beginning 

4 farmer or rancher who was previously in5 volved in a farming or ranching operation, 

6 including involvement in the decision7 making or physical involvement in the pro8 duction of the crop or livestock on the 

9 farm, for any acreage obtained by the be10 ginning farmer or rancher, a yield that is 

11 the higher of— 

12 ‘‘(I) the actual production history 

13 of the previous producer of the crop 

14 or livestock on the acreage determined 

15 under subparagraph (A); or 

16 ‘‘(II) a yield of the producer, as 

17 determined in clause (i).’’; and 

18 (B) in paragraph (4)(B)(ii) (as amended 

19 by section 11006)— 

20 (i) by inserting ‘‘(I)’’ after ‘‘(ii)’’; 

21 (ii) by striking the period at the end 

22 and inserting ‘‘; or’’; and 

23 (iii) by adding at the end the fol24 lowing: 
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1 ‘‘(II) in the case of begin2 ning farmers or ranchers, replace 

3 each excluded yield with a yield 

4 equal to 80 percent of the appli5 cable transitional yield.’’. 

6 SEC. 11027. AGRICULTURAL MANAGEMENT ASSISTANCE, 

7 RISK MANAGEMENT EDUCATION, AND OR8 GANIC CERTIFICATION COST SHARE ASSIST9 ANCE. 

10 Section 524 of the Federal Crop Insurance Act (7 

11 U.S.C. 1524) is amended by striking subsection (b) and 

12 inserting the following: 

13 ‘‘(b) AGRICULTURAL MANAGEMENT ASSISTANCE, 

14 RISK MANAGEMENT EDUCATION, AND ORGANIC CERTIFI15 CATION COST SHARE ASSISTANCE.— 

16 ‘‘(1) AUTHORITY FOR PROVISION OF ASSIST17 ANCE.—The Secretary shall provide assistance under 

18 this section as follows: 

19 ‘‘(A) Provision of organic certification cost 

20 share assistance pursuant to section 10606 of 

21 the Farm Security and Rural Investment Act of 

22 2002 (7 U.S.C. 6523). 

23 ‘‘(B) Activities to support risk manage24 ment education and community outreach part-
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1 nerships pursuant to section 522(d), includ2 ing— 

3 ‘‘(i) entering into futures or hedging; 

4 ‘‘(ii) entering into agricultural trade 

5 options as a hedging transaction to reduce 

6 production, price, or revenue risk; or 

7 ‘‘(iii) conducting any other activity re8 lating to an activity described in clause (i) 

9 or (ii), including farm financial 

10 benchmarking, as determined by the Sec11 retary. 

12 ‘‘(C) Provision of agricultural management 

13 assistance grants to producers in States in 

14 which there has been traditionally, and con15 tinues to be, a low level of Federal crop insur16 ance participation and availability, and pro17 ducers underserved by the Federal crop insur18 ance program, as determined by the Secretary, 

19 for the purposes of— 

20 ‘‘(i) constructing or improving— 

21 ‘‘(I) watershed management 

22 structures; or 

23 ‘‘(II) irrigation structures; 
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1 ‘‘(ii) planting trees to form 

2 windbreaks or to improve water quality; 

3 and 

4 ‘‘(iii) mitigating financial risk through 

5 production or marketing diversification or 

6 resource conservation practices, includ7 ing— 

8 ‘‘(I) soil erosion control; 

9 ‘‘(II) integrated pest manage10 ment; 

11 ‘‘(III) organic farming; or 

12 ‘‘(IV) to develop and implement a 

13 plan to create marketing opportunities 

14 for the producer, including through 

15 value-added processing. 

16 ‘‘(2) PAYMENT LIMITATION.—The total amount 

17 of payments made to a person (as defined in section 

18 1001(5) of the Food Security Act (7 U.S.C. 

19 1308(5))) (as in existence before the amendment 

20 made by section 1603(b) of the Food, Conservation, 

21 and Energy Act of 2008 (Public Law 110–246; 122 

22 Stat. 1730)) under paragraph (1) for any year may 

23 not exceed $50,000. 

24 ‘‘(3) FUNDING.— 
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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 carry out this subsection through the Com3 modity Credit Corporation. 

4 ‘‘(B) FUNDING.—For each of fiscal years 

5 2013 through 2017, the Commodity Credit Cor6 poration shall make available to carry out this 

7 subsection $23,000,000. 

8 ‘‘(C) DISTRIBUTION OF FUNDS.—Of the 

9 amount made available to carry out this sub10 section for a fiscal year, the Commodity Credit 

11 Corporation shall use not less than— 

12 ‘‘(i) 50 percent to carry out para13 graph (1)(A); 

14 ‘‘(ii) 26 percent to carry out para15 graph (1)(B); and 

16 ‘‘(iii) 24 percent to carry out para17 graph (1)(C).’’. 

18 SEC. 11028. CROP PRODUCTION ON NATIVE SOD. 

19 (a) FEDERAL CROP INSURANCE.—Section 508(o) of 

20 the Federal Crop Insurance Act (7 U.S.C. 1508(o)) is 

21 amended— 

22 (1) in paragraph (1)(B), by inserting ‘‘, or the 

23 producer cannot substantiate that the ground has 

24 ever been tilled,’’ after ‘‘tilled’’; 
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1 (2) in paragraph (2)(A), by striking ‘‘for bene2 fits under—’’ and all that follows through the period 

3 at the end and inserting ‘‘for— 

4 ‘‘(i) a portion of crop insurance pre5 mium subsidies under this subtitle in ac6 cordance with paragraph (3); 

7 ‘‘(ii) benefits under section 196 of the 

8 Federal Agriculture Improvement and Re9 form Act of 1996 (7 U.S.C. 7333); and 

10 ‘‘(iii) payments described in sub11 section (b) of section 1001 of the Food Se12 curity Act of 1985 (7 U.S.C. 1308).’’; and 

13 (3) by striking paragraph (3) and inserting the 

14 following: 

15 ‘‘(3) ADMINISTRATION.— 

16 ‘‘(A) IN GENERAL.—During the first 4 

17 crop years of planting on native sod acreage by 

18 a producer described in paragraph (2)— 

19 ‘‘(i) paragraph (2) shall apply to 65 

20 percent of the applicable transitional yield; 

21 and 

22 ‘‘(ii) the crop insurance premium sub23 sidy provided for the producer under this 

24 subtitle shall be 50 percentage points less 
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1 than the premium subsidy that would oth2 erwise apply. 

3 ‘‘(B) YIELD SUBSTITUTION.—During the 

4 period native sod acreage is covered by this sub5 section, a producer may not substitute yields 

6 for the native sod acreage.’’. 

7 (b) NONINSURED CROP DISASTER ASSISTANCE.— 

8 Section 196(a)(4) of the Federal Agriculture Improvement 

9 and Reform Act of 1996 (7 U.S.C. 7333(a)(4)) is amend10 ed— 

11 (1) in subparagraph (A)(ii), by inserting ‘‘, or 

12 the producer cannot substantiate that the ground 

13 has ever been tilled,’’ after ‘‘tilled’’; 

14 (2) in subparagraph (B)(i), by striking ‘‘for 

15 benefits under—’’ and all that follows through the 

16 period at the end and inserting ‘‘for— 

17 ‘‘(I) benefits under this section; 

18 ‘‘(II) a portion of crop insurance 

19 premium subsidies under the Federal 

20 Crop Insurance Act (7 U.S.C. 1501 et 

21 seq.) in accordance with subparagraph 

22 (C); and 

23 ‘‘(III) payments described in sub24 section (b) of section 1001 of the 
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1 Food Security Act of 1985 (7 U.S.C. 

2 1308).’’; and 

3 (3) by striking subparagraph (C) and inserting 

4 the following: 

5 ‘‘(C) ADMINISTRATION.— 

6 ‘‘(i) IN GENERAL.—During the first 4 

7 crop years of planting on native sod acre8 age by a producer described in subpara9 graph (B)— 

10 ‘‘(I) subparagraph (B) shall 

11 apply to 65 percent of the applicable 

12 transitional yield; and 

13 ‘‘(II) the crop insurance premium 

14 subsidy provided for the producer 

15 under the Federal Crop Insurance Act 

16 (7 U.S.C. 1501 et seq.) shall be 50 

17 percentage points less than the pre18 mium subsidy that would otherwise 

19 apply. 

20 ‘‘(ii) YIELD SUBSTITUTION.—During 

21 the period native sod acreage is covered by 

22 this paragraph, a producer may not sub23 stitute yields for the native sod acreage.’’. 

24 (c) CROPLAND REPORT.— 
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1 (1) BASELINE.—Not later than 180 days after 

2 the date of enactment of this Act, the Secretary of 

3 Agriculture shall submit to the Committee on Agri4 culture of the House of Representatives and the 

5 Committee on Agriculture, Nutrition, and Forestry 

6 of the Senate a report that describes the cropland 

7 acreage in each county and State, and the change in 

8 cropland acreage from the preceding year in each 

9 county and State, beginning with calendar year 

10 2000 and including that information for the most 

11 recent year for which that information is available. 

12 (2) ANNUAL UPDATES.—Not later than Janu13 ary 1, 2014, and each January 1 thereafter through 

14 January 1, 2017, the Secretary of Agriculture shall 

15 submit to the Committee on Agriculture of the 

16 House of Representatives and the Committee on Ag17 riculture, Nutrition, and Forestry of the Senate a 

18 report that describes— 

19 (A) the cropland acreage in each county 

20 and State as of the date of submission of the 

21 report; and 

22 (B) the change in cropland acreage from 

23 the preceding year in each county and State. 
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1 SEC. 11029. TECHNICAL AMENDMENTS. 

2 Section 508(b) of the Federal Crop Insurance Act (7 

3 U.S.C. 1508(b)) is amended— 

4 (1) by striking paragraph (7); and 

5 (2) by redesignating paragraphs (8) through 

6 (11) as paragraphs (7) through (10), respectively. 

7 SEC. 11030. GREATER ACCESSIBILITY FOR CROP INSUR8 ANCE. 

9 (a) FINDINGS.—Congress finds that— 

10 (1) due to changes in commodity and other ag11 ricultural programs made by the Agriculture Re12 form, Food, and Jobs Act of 2012, it is more impor13 tant than ever that agricultural producers be able to 

14 fully understand the terms of plans and policies of 

15 crop insurance offered under the Federal Crop In16 surance Act (7 U.S.C. 1501 et seq.); and 

17 (2) proposed reductions by the Secretary in the 

18 number of State and local offices of the Farm Serv19 ice Agency will reduce the services available to assist 

20 agricultural producers in understanding crop insur21 ance. 

22 (b) REQUIREMENT FOR USE OF PLAIN LANGUAGE.— 

23 (1) IN GENERAL.—In issuing regulations and 

24 guidance relating to plans and policies of crop insur25 ance, the Risk Management Agency and the Federal 

26 Crop Insurance Corporation shall, to the greatest ex-
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1 tent practicable, use plain language, as required 

2 under Executive Orders 12866 (5 U.S.C. 601 note; 

3 relating to regulatory planning and review) and 

4 12988 (28 U.S.C. 519 note; relating to civil justice 

5 reform). 

6 (2) REPORT.—Not later than 180 days after 

7 the date of enactment of this Act, the Secretary 

8 shall submit to the Committee on Agriculture of the 

9 House of Representatives and the Committee on Ag10 riculture, Nutrition, and Forestry of the Senate a 

11 report describing the efforts of the Secretary to ac12 celerate compliance with the Executive Orders de13 scribed in paragraph (1). 

14 (c) WEBSITE.— 

15 (1) IN GENERAL.—Not later than 1 year after 

16 the date of enactment of this Act, the Secretary, in 

17 consultation with the approved insurance providers 

18 (as defined in section 502(b) of the Federal Crop In19 surance Act (7 U.S.C. 1502(b)), shall improve the 

20 existing Internet website through which agricultural 

21 producers in any State may identify crop insurance 

22 options in that State. 

23 (2) REQUIREMENTS.—The website described in 

24 paragraph (1) shall— 
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1 (A) provide answers in an easily accessible 

2 format to frequently asked questions; and 

3 (B) include published materials of the De4 partment of Agriculture that relate to plans and 

5 policies of crop insurance offered under that 

6 Act. 

7 (d) ADMINISTRATION.—Nothing in this section au8 thorizes the Risk Management Agency to sell a crop insur9 ance policy or plan of insurance. 

10 SEC. 11031. GAO CROP INSURANCE FRAUD REPORT. 

11 Section 515(d) of the Federal Crop Insurance Act (7 

12 U.S.C. 1515(d)) is amended by adding at the end the fol13 lowing: 

14 ‘‘(6) GAO CROP INSURANCE FRAUD REPORT.— 

15 As soon as practicable after the date of enactment 

16 of this paragraph, the Comptroller General of the 

17 United States shall conduct, and submit to Congress 

18 a report describing the results of, a study regarding 

19 fraudulent claims filed, and benefits provided, under 

20 this subtitle.’’. 

21 SEC. 11032. LIMITATION ON PREMIUM SUBSIDY BASED ON 

22 AVERAGE ADJUSTED GROSS INCOME. 

23 Section 508(e) of the Federal Crop Insurance Act (7 

24 U.S.C. 1508(e)) (as amended by section 11023(b)) is 

25 amended by adding at the end the following: 
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1 ‘‘(9) LIMITATION ON PREMIUM SUBSIDY BASED

2 ON AVERAGE ADJUSTED GROSS INCOME.— 

3 ‘‘(A) DEFINITION OF AVERAGE ADJUSTED

4 GROSS INCOME.—In this paragraph, the term 

5 ‘average adjusted gross income’ has the mean6 ing given the term in section 1001D(a) of the 

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

8 3a(a)). 

9 ‘‘(B) LIMITATION.—Notwithstanding any 

10 other provision of this subtitle and beginning 

11 with the 2014 reinsurance year, in the case of 

12 any producer that is a person or legal entity 

13 that has an average adjusted gross income in 

14 excess of $750,000 based on the most recent 

15 data available from the Farm Service Agency as 

16 of the beginning of the reinsurance year, the 

17 total amount of premium subsidy provided with 

18 respect to additional coverage under subsection 

19 (c), section 508B, or section 508C issued on be20 half of the producer for a reinsurance year shall 

21 be 15 percentage points less than the premium 

22 subsidy provided in accordance with this sub23 section that would otherwise be available for the 

24 applicable policy, plan of insurance, and cov25 erage level selected by the producer. 
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1 ‘‘(C) APPLICATION.— 

2 ‘‘(i) STUDY.—Not later than 1 year 

3 after the date of enactment of this Act, the 

4 Secretary, in consultation with the Govern5 ment Accountability Office, shall carry out 

6 a study to determine the effects of the lim7 itation described in subparagraph (B) on— 

8 ‘‘(I) the overall operations of the 

9 Federal crop insurance program; 

10 ‘‘(II) the number of producers 

11 participating in the Federal crop in12 surance program; 

13 ‘‘(III) the level of coverage pur14 chased by participating producers; 

15 ‘‘(IV) the amount of premiums 

16 paid by participating producers and 

17 the Federal Government; 

18 ‘‘(V) any potential liability for 

19 participating producers, approved in20 surance providers, and the Federal 

21 Government; 

22 ‘‘(VI) different crops or growing 

23 regions; 

24 ‘‘(VII) program rating struc25 tures; 
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1 ‘‘(VIII) creation of schemes or 

2 devices to evade the impact of the lim3 itation; and 

4 ‘‘(IX) administrative and oper5 ating expenses paid to approved insur6 ance providers and underwriting gains 

7 and loss for the Federal government 

8 and approved insurance providers. 

9 ‘‘(ii) EFFECTIVENESS.—The limita10 tion described in subparagraph (B) shall 

11 not take effect unless the Secretary deter12 mines, through the study described in 

13 clause (i), that the limitation would not— 

14 ‘‘(I) significantly increase the 

15 premium amount paid by producers 

16 with an average adjusted gross income 

17 of less than $750,000; 

18 ‘‘(II) result in a decline in the 

19 crop insurance coverage available to 

20 producers; and 

21 ‘‘(III) increase the total cost of 

22 the Federal crop insurance program.’’. 
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1 TITLE XII—MISCELLANEOUS 

2 Subtitle A—Socially Disadvantaged 

3 Producers and Limited Re4 source Producers 

5 SEC. 12001. OUTREACH AND ASSISTANCE FOR SOCIALLY 

6 DISADVANTAGED FARMERS AND RANCHERS 

7 AND VETERAN FARMERS AND RANCHERS. 

8 (a) OUTREACH AND ASSISTANCE FOR SOCIALLY DIS9 ADVANTAGED FARMERS AND RANCHERS AND VETERAN

10 FARMERS AND RANCHERS.—Section 2501 of the Food, 

11 Agriculture, Conservation, and Trade Act of 1990 (7 

12 U.S.C. 2279) is amended— 

13 (1) in the section heading, by inserting ‘‘AND

14 VETERAN FARMERS AND RANCHERS’’ after 

15 ‘‘RANCHERS’’; 

16 (2) in subsection (a)— 

17 (A) in paragraph (2)(B)(i), by inserting 

18 ‘‘and veteran farmers or ranchers’’ after 

19 ‘‘ranchers’’; and 

20 (B) in paragraph (4)— 

21 (i) in subparagraph (A)— 

22 (I) in clause (i), by striking 

23 ‘‘and’’ at the end; 
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1 (II) in clause (ii), by striking the 

2 period at the end and inserting ‘‘; 

3 and’’; and 

4 (III) by adding at the end the 

5 following: 

6 ‘‘(iii) $5,000,000 for each of fiscal 

7 years 2013 through 2017.’’; and 

8 (ii) by adding at the end the fol9 lowing: 

10 ‘‘(D) AUTHORIZATION OF APPROPRIA11 TIONS.—There is authorized to be appropriated 

12 to carry out this section $20,000,000 for each 

13 of fiscal years 2013 through 2017.’’; 

14 (3) in subsection (b)(2), by inserting ‘‘or vet15 eran farmers and ranchers’’ after ‘‘socially disadvan16 taged farmers and ranchers’’; and 

17 (4) in subsection (c)— 

18 (A) in paragraph (1)(A), by inserting ‘‘vet19 eran farmers or ranchers and’’ before ‘‘mem20 bers’’; and 

21 (B) in paragraph (2)(A), by inserting ‘‘vet22 eran farmers or ranchers and’’ before ‘‘mem23 bers’’. 

24 (b) DEFINITION OF VETERAN FARMER OR RANCH25 ER.—Section 2501(e) of the Food, Agriculture, Conserva-
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1 tion, and Trade Act of 1990 (7 U.S.C. 2279(e)) is amend2 ed by adding at the end the following: 

3 ‘‘(7) VETERAN FARMER OR RANCHER.—The 

4 term ‘veteran farmer or rancher’ means a farmer or 

5 rancher who served in the active military, naval, or 

6 air service, and who was discharged or released from 

7 the service under conditions other than dishonor8 able.’’. 

9 SEC. 12002. OFFICE OF ADVOCACY AND OUTREACH. 

10 Section 226B(f)(3) of the Department of Agriculture 

11 Reorganization Act of 1994 (7 U.S.C. 6934(f)(3)) is 

12 amended to read as follows: 

13 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

14 There are authorized to be appropriated to carry out 

15 this subsection— 

16 ‘‘(A) such sums as are necessary for each 

17 of fiscal years 2009 through 2012; and 

18 ‘‘(B) $2,000,000 for each of fiscal years 

19 2013 through 2017.’’. 

20 Subtitle B—Livestock 

21 SEC. 12101. WILDLIFE RESERVOIR ZOONOTIC DISEASE INI22 TIATIVE. 

23 Title IV of the Agricultural Research, Extension, and 

24 Education Reform Act of 1998 (7 U.S.C. 7621 et seq.) 

25 is amended by adding at the end the following: 
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1 ‘‘SEC. 413. WILDLIFE RESERVOIR ZOONOTIC DISEASE INI2 TIATIVE. 

3 ‘‘(a) DEFINITION OF COVERED DISEASE.—In this 

4 section, the term ‘covered disease’ means a zoonotic dis5 ease affecting domestic livestock that is transmitted pri6 marily from wildlife. 

7 ‘‘(b) ESTABLISHMENT.—There is established within 

8 the Department a wildlife reservoir zoonotic disease initia9 tive to provide assistance through Coordinated Agricul10 tural Project grants for research and development of sur11 veillance methods, vaccines, vaccination delivery systems, 

12 or diagnostic tests for covered diseases. 

13 ‘‘(c) COVERED DISEASE.— 

14 ‘‘(1) IN GENERAL.—To be eligible for a grant 

15 under this section, an eligible entity shall conduct 

16 research and development of surveillance methods, 

17 vaccines, vaccination delivery systems, or diagnostic 

18 tests for covered diseases in— 

19 ‘‘(A) a wildlife reservoir in the United 

20 States; or 

21 ‘‘(B) domestic livestock or wildlife pre22 senting a potential concern to public health. 

23 ‘‘(2) PRIORITY.—In making grants under this 

24 section, the Secretary shall give priority to grants 

25 that address— 

26 ‘‘(A) Brucella abortus (Bovine Brucellosis); 
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1 ‘‘(B) Mycobacterium bovis (Bovine Tuber2 culosis); or 

3 ‘‘(C) other zoonotic disease in livestock 

4 that is covered by a high-priority research and 

5 extension initiative conducted under section 

6 1672 of the Food, Agriculture, Conservation, 

7 and Trade Act of 1990 (7 U.S.C. 5925). 

8 ‘‘(d) ELIGIBLE ENTITIES.—The Secretary shall carry 

9 out the initiative established under subsection (b) through 

10 public scientific research consortia that may consist of 

11 members from— 

12 ‘‘(1) Federal agencies; 

13 ‘‘(2) National Laboratories; 

14 ‘‘(3) institutions of higher education; 

15 ‘‘(4) research institutions and organizations; or 

16 ‘‘(5) State agricultural experiment stations. 

17 ‘‘(e) RESEARCH PROJECTS.—In carrying out this 

18 section, the Secretary shall award grants on a competitive 

19 basis. 

20 ‘‘(f) ADMINISTRATION.— 

21 ‘‘(1) IN GENERAL.—In the case of grants 

22 awarded under this section, the Secretary shall— 

23 ‘‘(A) seek and accept proposals for grants; 
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1 ‘‘(B) determine the relevance and merit of 

2 proposals through a system of peer and merit 

3 review in accordance with section 103; 

4 ‘‘(C) award grants on the basis of merit, 

5 quality, and relevance; and 

6 ‘‘(D) manage the initiative established 

7 under subsection (b) using a Coordinated Agri8 cultural Project format. 

9 ‘‘(2) TERM.—The term of a grant under this 

10 section may not exceed 10 years. 

11 ‘‘(3) MATCHING FUNDS REQUIRED.—The Sec12 retary shall require the recipient of a grant under 

13 this section to provide funds or in-kind support from 

14 non-Federal sources in an amount that is not less 

15 than 25 percent of the amount provided by the Fed16 eral Government. 

17 ‘‘(4) OTHER CONDITIONS.—The Secretary may 

18 set such other conditions on the award of a grant 

19 under this section as the Secretary determines to be 

20 appropriate. 

21 ‘‘(g) BUILDINGS AND FACILITIES.—Funds made 

22 available under this section shall not be used for— 

23 ‘‘(1) the construction of a new building or facil24 ity; or 
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1 ‘‘(2) the acquisition, expansion, remodeling, or 

2 alteration of an existing building or facility (includ3 ing site grading and improvement and architect 

4 fees). 

5 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.— 

6 ‘‘(1) IN GENERAL.—There is authorized to be 

7 appropriated to carry out this section $7,000,000 for 

8 each of fiscal years 2012 through 2017. 

9 ‘‘(2) ALLOCATION.—Of the amount made avail10 able for a fiscal year under paragraph (1), the Sec11 retary shall use not less than 30 percent of the 

12 amount for the fiscal year to carry out activities 

13 under each of subparagraphs (A) and (B) of sub14 section (c)(2).’’. 

15 SEC. 12102. TRICHINAE CERTIFICATION PROGRAM. 

16 Section 10405(d)(1) of the Animal Health Protection 

17 Act (7 U.S.C. 8304(d)(1)) is amended in subparagraphs 

18 (A) and (B) by striking ‘‘2012’’ each place it appears and 

19 inserting ‘‘2017’’. 

20 SEC. 12103. NATIONAL AQUATIC ANIMAL HEALTH PLAN. 

21 Section 11013(d) of the Food, Conservation, and En22 ergy Act of 2008 (7 U.S.C. 8322(d)) is amended by strik23 ing ‘‘2012’’ and inserting ‘‘2017’’. 
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1 SEC. 12104. SHEEP PRODUCTION AND MARKETING GRANT 

2 PROGRAM. 

3 (a) IN GENERAL.—Subtitle A of the Agricultural 

4 Marketing Act of 1946 (7 U.S.C. 1621 et seq.) is amended 

5 by adding at the end the following: 

6 ‘‘SEC. 209. SHEEP PRODUCTION AND MARKETING GRANT 

7 PROGRAM. 

8 ‘‘(a) ESTABLISHMENT.—The Secretary, acting 

9 through the Administrator of the Agricultural Marketing 

10 Service (referred to in this section as the ‘Secretary’) shall 

11 establish a competitive grant program for the purposes of 

12 improving the United States sheep industry. 

13 ‘‘(b) PURPOSE.—The purpose of the grant program 

14 shall be to strengthen and enhance the production and 

15 marketing of sheep and sheep products, including im16 provement of— 

17 ‘‘(1) infrastructure; 

18 ‘‘(2) business; 

19 ‘‘(3) resource development; and 

20 ‘‘(4) innovative approaches to solve long-term 

21 needs. 

22 ‘‘(c) ELIGIBILITY.—The Secretary shall make grants 

23 under this section to 1 or more national entities the mis24 sion of which is consistent with the purpose of the grant 

25 program. 
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1 ‘‘(d) FUNDING.—Of the funds of the Commodity 

2 Credit Corporation, the Secretary shall use to carry out 

3 this section $1,500,000 for fiscal year 2013, to remain 

4 available until expended.’’. 

5 (b) CONFORMING AMENDMENT.—Section 374 of the 

6 Consolidated Farm and Rural Development Act (7 U.S.C. 

7 2008j) (as in existence on the day before the date of enact8 ment of this Act) is— 

9 (1) amended in subsection (e)— 

10 (A) in paragraph (3)(D), by striking ‘‘3 

11 percent’’ and inserting ‘‘10 percent’’; and 

12 (B) by striking paragraph (6); and 

13 (2) redesignated as section 210 of the Agricul14 tural Marketing Act of 1946; and 

15 (3) moved so as to appear at the end of subtitle 

16 A of that Act (as amended by subsection (a)). 

17 SEC. 12105. FERAL SWINE ERADICATION PILOT PROGRAM. 

18 (a) IN GENERAL.—To eradicate or control the threat 

19 feral swine pose to the domestic swine population, the en20 tire livestock industry, and the destruction of crops and 

21 natural plant communities and native habitats, the Sec22 retary of Agriculture may establish a feral swine eradi23 cation pilot program. 

24 (b) PILOT.—Subject to the availability of appropria25 tions under this section, the Secretary may provide finan-
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1 cial assistance for the cost of carrying out a pilot pro2 gram— 

3 (1) to study and assess the nature and extent 

4 of damage to the pilot area caused by feral swine; 

5 (2) to develop methods to eradicate or control 

6 feral swine in the pilot area; and 

7 (3) to develop methods to restore damage 

8 caused by feral swine. 

9 (c) COORDINATION.—The Secretary shall ensure that 

10 the Natural Resource Conservation Service and the Ani11 mal and Plant Health Inspection Service coordinate to 

12 carry out the pilot program. 

13 (d) COST SHARING.— 

14 (1) FEDERAL SHARE.—The Federal share of 

15 the costs of the pilot program under this section 

16 may not exceed 75 percent of the total costs of car17 rying out the pilot program. 

18 (2) IN-KIND CONTRIBUTIONS.—The non-Fed19 eral share of the costs of the pilot program may be 

20 provided in the form of in-kind contributions of ma21 terials or services. 

22 (e) LIMITATION ON ADMINISTRATIVE EXPENSES.— 

23 Not more than 10 percent of financial assistance provided 

24 by the Secretary under this section may be used for ad25 ministrative expenses. 
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1 (f) AUTHORIZATION OF APPROPRIATIONS.—There is 

2 authorized to be appropriated to carry out this section 

3 $2,000,000 for each of fiscal years 2013 through 2017. 

4 Subtitle C—Other Miscellaneous 

5 Provisions 

6 SEC. 12201. MILITARY VETERANS AGRICULTURAL LIAISON. 

7 (a) IN GENERAL.—Subtitle A of the Department of 

8 Agriculture Reorganization Act of 1994 is amended by in9 serting after section 218 (7 U.S.C. 6918) the following: 

10 ‘‘SEC. 219. MILITARY VETERANS AGRICULTURAL LIAISON. 

11 ‘‘(a) AUTHORIZATION.—The Secretary shall establish 

12 in the Department the position of Military Veterans Agri13 cultural Liaison. 

14 ‘‘(b) DUTIES.—The Military Veterans Agricultural 

15 Liaison shall— 

16 ‘‘(1) provide information to returning veterans 

17 about, and connect returning veterans with, begin18 ning farmer training and agricultural vocational and 

19 rehabilitation programs appropriate to the needs and 

20 interests of returning veterans, including assisting 

21 veterans in using Federal veterans educational bene22 fits for purposes relating to beginning a farming or 

23 ranching career; 

24 ‘‘(2) provide information to veterans concerning 

25 the availability of and eligibility requirements for 
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1 participation in agricultural programs, with par2 ticular emphasis on beginning farmer and rancher 

3 programs; 

4 ‘‘(3) serving as a resource for assisting veteran 

5 farmers and ranchers, and potential farmers and 

6 ranchers, in applying for participation in agricul7 tural programs; and 

8 ‘‘(4) advocating on behalf of veterans in inter9 actions with employees of the Department. 

10 ‘‘(c) CONTRACTS AND COOPERATIVE AGREE11 MENTS.—For purposes of carrying out the duties under 

12 subsection (b), the Military Veterans Agricultural Liaison 

13 may enter into contracts or cooperative agreements with 

14 the research centers of the Agricultural Research Service, 

15 institutions of higher education, or nonprofit organizations 

16 for— 

17 ‘‘(1) the conduct of regional research on the 

18 profitability of small farms; 

19 ‘‘(2) the development of educational materials; 

20 ‘‘(3) the conduct of workshops, courses, and 

21 certified vocational training; 

22 ‘‘(4) the conduct of mentoring activities; or 

23 ‘‘(5) the provision of internship opportunities.’’. 

24 (b) CONFORMING AMENDMENTS.—Section 296(b) of 

25 the Department of Agriculture Reorganization Act of 
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1 1994 (7 U.S.C. 7014(b)) (as amended by section 4206(b)) 

2 is amended— 

3 (1) in paragraph (8), by striking the ‘‘or’’ at 

4 the end; 

5 (2) in paragraph (9), by striking the period at 

6 the end and inserting ‘‘; or’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(10) the authority of the Secretary to establish 

9 in the Department the position of Military Veterans 

10 Agricultural Liaison in accordance with section 

11 219.’’. 

12 SEC. 12202. INFORMATION GATHERING. 

13 Section 1619(b)(3) of the Food, Conservation, and 

14 Energy Act of 2008 (7 U.S.C. 8791) is amended by add15 ing at the end the following: 

16 ‘‘(B) COOPERATION WITH STATE AND

17 LOCAL GOVERNMENTS.— 

18 ‘‘(i) IN GENERAL.—Subject to clause 

19 (ii), in the case of a State agency, political 

20 subdivision, or local governmental agency 

21 that is charged with implementing an agri22 culture or conservation program under 

23 State law, on request of the State agency, 

24 political subdivision, or local governmental 

25 agency, the information described in para-
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1 graph (2) shall be disclosed to the State 

2 agency, political subdivision, or local gov3 ernmental agency if the Secretary deter4 mines that the State agency, political sub5 division, or local governmental agency 

6 demonstrates that the disclosure is re7 quired for implementing the State pro8 gram. 

9 ‘‘(ii) RESTRICTION.—Any information 

10 disclosed to a State agency, political sub11 division, or local governmental agency 

12 under clause (i) shall be— 

13 ‘‘(I) used solely by the State 

14 agency, political subdivision, or local 

15 governmental agency; and 

16 ‘‘(II) exempt from disclosure to 

17 the public, including under any State 

18 law that allows a citizen to petition a 

19 State agency for that information.’’. 

20 SEC. 12203. GRANTS TO IMPROVE SUPPLY, STABILITY, 

21 SAFETY, AND TRAINING OF AGRICULTURAL 

22 LABOR FORCE. 

23 Section 14204(d) of the Food, Conservation, and En24 ergy Act of 2008 (7 U.S.C. 2008q–1(d)) is amended to 

25 read as follows: 
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1 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this sec3 tion— 

4 ‘‘(1) such sums as are necessary for each of fis5 cal years 2008 through 2012; and 

6 ‘‘(2) $10,000,000 for each of fiscal years 2013 

7 through 2017.’’. 

8 SEC. 12204. NONINSURED CROP ASSISTANCE PROGRAM. 

9 (a) IN GENERAL.—Section 196 of the Federal Agri10 culture Improvement and Reform Act of 1996 (7 U.S.C. 

11 7333) is amended— 

12 (1) in subsection (a)— 

13 (A) by striking paragraph (1) and insert14 ing the following: 

15 ‘‘(1) IN GENERAL.— 

16 ‘‘(A) COVERAGES.—In the case of an eligi17 ble crop described in paragraph (2), the Sec18 retary of Agriculture shall operate a noninsured 

19 crop disaster assistance program to provide cov20 erages based on individual yields (other than 

21 for value-loss crops) equivalent to— 

22 ‘‘(i) catastrophic risk protection avail23 able under section 508(b) of the Federal 

24 Crop Insurance Act (7 U.S.C. 1508(b)); or 
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1 ‘‘(ii) additional coverage available 

2 under subsections (c) and (h) of section 

3 508 of that Act (7 U.S.C. 1508) that does 

4 not exceed 65 percent. 

5 ‘‘(B) ADMINISTRATION.—The Secretary 

6 shall carry out this section through the Farm 

7 Service Agency (referred to in this section as 

8 the ‘Agency’).’’; and 

9 (B) in paragraph (2)— 

10 (i) in subparagraph (A)— 

11 (I) in the matter before clause 

12 (i), by striking ‘‘(except livestock)’’ 

13 and inserting ‘‘(except livestock and 

14 crops and grasses used for grazing)’’; 

15 (II) in clause (i), by striking 

16 ‘‘and’’ after the semicolon at the end; 

17 (III) by redesignating clause (ii) 

18 as clause (iii); and 

19 (IV) by inserting after clause (i) 

20 the following: 

21 ‘‘(ii) for which additional 

22 coverage under subsections (c) 

23 and (h) of section 508 of that 

24 Act (7 U.S.C. 1508) is not avail25 able; and’’; and 
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1 (ii) in subparagraph (B)— 

2 (I) by inserting ‘‘(except ferns)’’ 

3 after ‘‘floricultural’’; 

4 (II) by inserting ‘‘(except ferns)’’ 

5 after ‘‘ornamental nursery’’; and 

6 (III) by striking ‘‘(including or7 namental fish)’’ and inserting ‘‘(in8 cluding ornamental fish, but excluding 

9 tropical fish)’’; 

10 (2) in subsection (d), by striking ‘‘The Sec11 retary’’ and inserting ‘‘Subject to subsection (l), the 

12 Secretary’’; 

13 (3) in subsection (k)(1)— 

14 (A) in subparagraph (A), by striking 

15 ‘‘$250’’ and inserting ‘‘$260’’; and 

16 (B) in subparagraph (B)— 

17 (i) by striking ‘‘$750’’ and inserting 

18 ‘‘$780’’; and 

19 (ii) by striking ‘‘$1,875’’ and insert20 ing ‘‘$1,950’’; and 

21 (4) by adding at the end the following: 

22 ‘‘(l) PAYMENT EQUIVALENT TO ADDITIONAL COV23 ERAGE.— 

24 ‘‘(1) IN GENERAL.—The Secretary shall make 

25 available to a producer eligible for noninsured assist-
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1 ance under this section a payment equivalent to an 

2 indemnity for additional coverage under subsections 

3 (c) and (h) of section 508 of the Federal Crop In4 surance Act (7 U.S.C. 1508) that does not exceed 

5 65 percent, computed by multiplying— 

6 ‘‘(A) the quantity that is less than 50 to 

7 65 percent of the established yield for the crop, 

8 as determined by the Secretary, specified in in9 crements of 5 percent; 

10 ‘‘(B) 100 percent of the average market 

11 price for the crop, as determined by the Sec12 retary; and 

13 ‘‘(C) a payment rate for the type of crop, 

14 as determined by the Secretary, that reflects— 

15 ‘‘(i) in the case of a crop that is pro16 duced with a significant and variable har17 vesting expense, the decreasing cost in18 curred in the production cycle for the crop 

19 that is, as applicable— 

20 ‘‘(I) harvested; 

21 ‘‘(II) planted but not harvested; 

22 or 

23 ‘‘(III) prevented from being 

24 planted because of drought, flood, or 
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1 other natural disaster, as determined 

2 by the Secretary; or 

3 ‘‘(ii) in the case of a crop that is pro4 duced without a significant and variable 

5 harvesting expense, such rate as shall be 

6 determined by the Secretary. 

7 ‘‘(2) PREMIUM.—To be eligible to receive a pay8 ment under this subsection, a producer shall pay— 

9 ‘‘(A) the service fee required by subsection 

10 (k); and 

11 ‘‘(B) a premium for the applicable crop 

12 year that is equal to— 

13 ‘‘(i) the product obtained by multi14 plying— 

15 ‘‘(I) the number of acres devoted 

16 to the eligible crop; 

17 ‘‘(II) the yield, as determined by 

18 the Secretary under subsection (e); 

19 ‘‘(III) the coverage level elected 

20 by the producer; 

21 ‘‘(IV) the average market price, 

22 as determined by the Secretary; and 

23 ‘‘(ii) 5.25-percent premium fee. 

24 ‘‘(3) LIMITED RESOURCE, BEGINNING, AND SO25 CIALLY DISADVANTAGED FARMERS.—The additional 
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1 coverage made available under this subsection shall 

2 be available to limited resource, beginning, and so3 cially disadvantaged producers, as determined by the 

4 Secretary, in exchange for a premium that is 50 per5 cent of the premium determined for a producer 

6 under paragraph (2). 

7 ‘‘(4) ADDITIONAL AVAILABILITY.— 

8 ‘‘(A) IN GENERAL.—As soon as practicable 

9 after October 1, 2013, the Secretary shall make 

10 assistance available to producers of an other11 wise eligible crop described in subsection (a)(2) 

12 that suffered losses— 

13 ‘‘(i) to a 2012 annual fruit crop 

14 grown on a bush or tree; and 

15 ‘‘(ii) in a county covered by a declara16 tion by the Secretary of a natural disaster 

17 for production losses due to a freeze or 

18 frost. 

19 ‘‘(B) ASSISTANCE.—The Secretary shall 

20 make assistance available under subparagraph 

21 (A) in an amount equivalent to assistance avail22 able under paragraph (1), less any fees not pre23 viously paid under paragraph (2).’’. 

24 (b) TERMINATION DATE.— 
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1 (1) IN GENERAL.—Effective October 1, 2017, 

2 subsection (a) and the amendments made by sub3 section (a) (other than the amendments made by 

4 clauses (i)(I) and (ii) of subsection (a)(1)(B)) are re5 pealed 

6 (2) ADMINISTRATION.—Effective October 1, 

7 2017, section 196 of the Federal Agriculture Im8 provement and Reform Act of 1996 (7 U.S.C. 7333) 

9 shall be applied and administered as if subsection 

10 (a) and the amendments made by subsection (a) 

11 (other than the amendments made by clauses (i)(I) 

12 and (ii) of subsection (a)(1)(B)) had not been en13 acted. 

14 SEC. 12205. REGIONAL ECONOMIC AND INFRASTRUCTURE 

15 DEVELOPMENT. 

16 Section 15751 of title 40, United States Code, is 

17 amended— 

18 (1) in subsection (a), by striking ‘‘2012’’ and 

19 inserting ‘‘2017’’; and 

20 (2) in subsection (b)— 

21 (A) by striking ‘‘Not more than’’ and in22 serting the following: 

23 ‘‘(1) IN GENERAL.—Except as provided in para24 graph (2), not more than’’; and 

25 (B) by adding at the end the following: 
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1 ‘‘(2) LIMITED FUNDING.—In a case in which 

2 less than $10,000,000 is made available to a Com3 mission for a fiscal year under this section, para4 graph (1) shall not apply.’’. 

5 SEC. 12206. CANADA GEESE REMOVAL. 

6 (a) IN GENERAL.—On a determination by the Ad7 ministrator of the Federal Aviation Administration that 

8 the population of Canada geese residing on land under the 

9 jurisdiction of the National Park Service that is located 

10 within 5 miles of any commercial airport poses a risk to 

11 flight safety, the Secretary (acting through the Adminis12 trator of the Animal and Plant Health Inspection Service), 

13 in consultation with the Secretary of the Interior and the 

14 Administrator of the Federal Aviation Administration, 

15 shall— 

16 (1) by the first subsequent molting period for 

17 Canada geese that occurs after the date of enact18 ment of this Act, publish a management plan that 

19 provides for the removal, by not later than 1 year 

20 after the date of publication, of all Canada geese re21 siding on the applicable land; and 

22 (2) as soon as practicable after the date of pub23 lication of the management plan under paragraph 

24 (1), commence removal of Canada geese from the 

25 applicable land. 
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1 (b) JFK INTERNATIONAL AIRPORT.—Not later than 

2 June 1, 2012, the Secretary (acting through the Adminis3 trator of the Animal and Plant Health Inspection Service) 

4 shall— 

5 (1) issue a record of decision for the document 

6 entitled ‘‘Supplement to the Environmental Impact 

7 Statement Bird Hazard Reduction Program: John 

8 F. Kennedy International Airport’’; and 

9 (2) commence consultation with the Secretary 

10 of the Interior to complete the collection and re11 moval of Canada geese from the applicable National 

12 Park Service land to ensure that the removal is com13 pleted by not later than August 1, 2012. 

14 SEC. 12207. OFFICE OF TRIBAL RELATIONS. 

15 (a) IN GENERAL.—Title III of the Department of Ag16 riculture Reorganization Act of 1994 is amended by add17 ing after section 308 (7 U.S.C. 3125a note; Public Law 

18 103–354) the following: 

19 ‘‘SEC. 309. OFFICE OF TRIBAL RELATIONS. 

20 ‘‘The Secretary shall establish in the Office of the 

21 Secretary an Office of Tribal Relations.’’. 

22 (b) CONFORMING AMENDMENTS.—Section 296(b) of 

23 the Department of Agriculture Reorganization Act of 

24 1994 (7 U.S.C. 7014(b)) (as amended by section 

25 12201(b)) is amended— 
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1 (1) in paragraph (8), by striking ‘‘or’’ at the 

2 end; 

3 (2) in paragraph (9), by striking the period at 

4 the end and inserting ‘‘; or’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(10) the authority of the Secretary to establish 

7 in the Office of the Secretary the Office of Tribal 

8 Relations in accordance with section 309.’’. 

9 SEC. 12208. REPEAL OF DUPLICATIVE PROGRAM. 

10 (a) IN GENERAL.—Effective on the date of enact11 ment of the Food, Conservation, and Energy Act (7 

12 U.S.C. 8701 et seq.), section 11016 of that Act (Public 

13 Law 110–246; 122 Stat. 2130) and the amendments made 

14 by that section are repealed. 

15 (b) APPLICATION.—The Agricultural Marketing Act 

16 of 1946 (7 U.S.C. 1621 et seq.) and the Federal Meat 

17 Inspection Act (21 U.S.C. 601 et seq.) shall be applied 

18 and administered as if section 11016 of the Food, Con19 servation, and Energy Act (Public Law 110–246; 122 

20 Stat. 2130) and the amendments made by that section had 

21 not been enacted. 

22 SEC. 12209. SENSE OF THE SENATE. 

23 It is the sense of the Senate that nothing in this Act 

24 or an amendment made by this Act should manipulate 

25 prices or interfere with the free market. 
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1 SEC. 12210. ACER ACCESS AND DEVELOPMENT PROGRAM. 

2 (a) GRANTS AUTHORIZED; AUTHORIZED ACTIVI3 TIES.—The Secretary of Agriculture may make grants to 

4 States and tribal governments to support their efforts to 

5 promote the domestic maple syrup industry through the 

6 following activities: 

7 (1) Promotion of research and education related 

8 to maple syrup production. 

9 (2) Promotion of natural resource sustainability 

10 in the maple syrup industry. 

11 (3) Market promotion for maple syrup and 

12 maple-sap products. 

13 (4) Encouragement of owners and operators of 

14 privately held land containing species of tree in the 

15 genus Acer— 

16 (A) to initiate or expand maple-sugaring 

17 activities on the land; or 

18 (B) to voluntarily make the land available, 

19 including by lease or other means, for access by 

20 the public for maple-sugaring activities. 

21 (b) APPLICATIONS.—In submitting an application for 

22 a grant under this section, a State or tribal government 

23 shall include— 

24 (1) a description of the activities to be sup25 ported using the grant funds; 
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1 (2) a description of the benefits that the State 

2 or tribal government intends to achieve as a result 

3 of engaging in such activities; and 

4 (3) an estimate of the increase in maple-sug5 aring activities or maple syrup production that the 

6 State or tribal government anticipates will occur as 

7 a result of engaging in such activities. 

8 (c) RELATIONSHIP TO OTHER LAWS.—Nothing in 

9 this section preempts a State or tribal government law, 

10 including any State or tribal government liability law. 

11 (d) DEFINITION OF MAPLE SUGARING.—In this sec12 tion, the term ‘‘maple-sugaring’’ means the collection of 

13 sap from any species of tree in the genus Acer for the 

14 purpose of boiling to produce food. 

15 (e) REGULATIONS.—The Secretary of Agriculture 

16 shall promulgate such regulations as are necessary to 

17 carry out this section. 

18 (f) AUTHORIZATION OF APPROPRIATIONS.—There is 

19 authorized to be appropriated to carry out this section 

20 $20,000,000 for each of fiscal years 2012 through 2015. 

21 SEC. 12211. DEFINITION OF RURAL AREA FOR PURPOSES 

22 OF THE HOUSING ACT OF 1949. 

23 The second sentence of section 520 of the Housing 

24 Act of 1949 (42 U.S.C. 1490) is amended— 
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1 (1) by striking ‘‘1990 or 2000 decennial census 

2 shall continue to be so classified until the receipt of 

3 data from the decennial census in the year 2010’’ 

4 and inserting ‘‘1990, 2000, or 2010 decennial cen5 sus, and any area deemed to be a ‘rural area’ for 

6 purposes of this title under any other provision of 

7 law at any time during the period beginning Janu8 ary 1, 2000, and ending December 31, 2010, shall 

9 continue to be so classified until the receipt of data 

10 from the decennial census in the year 2020’’; and 

11 (2) by striking ‘‘25,000’’ and inserting 

12 ‘‘35,000’’. 

13 SEC. 12212. ANIMAL WELFARE. 

14 Section 2(h) of the Animal Welfare Act (7 U.S.C. 

15 2132(h)) is amended by adding ‘‘an owner of a common, 

16 domesticated household pet who derives less than a sub17 stantial portion of income from a nonprimary source (as 

18 determined by the Secretary) for exhibiting an animal that 

19 exclusively resides at the residence of the pet owner,’’ after 

20 ‘‘stores,’’. 
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1 SEC. 12213. PROHIBITION ON ATTENDING AN ANIMAL 

2 FIGHT OR CAUSING A MINOR TO ATTEND AN 

3 ANIMAL FIGHT; ENFORCEMENT OF ANIMAL 

4 FIGHTING PROVISIONS. 

5 (a) PROHIBITION ON ATTENDING AN ANIMAL FIGHT

6 OR CAUSING A MINOR TO ATTEND AN ANIMAL FIGHT.— 

7 Section 26 of the Animal Welfare Act (7 U.S.C. 2156) 

8 is amended— 

9 (1) in subsection (a)— 

10 (A) in the heading, by striking ‘‘SPON11 SORING OR EXHIBITING AN ANIMAL IN’’ and in12 serting ‘‘SPONSORING OR EXHIBITING AN ANI13 MAL IN, ATTENDING, OR CAUSING A MINOR TO

14 ATTEND’’; 

15 (B) in paragraph (1)— 

16 (i) in the heading, by striking ‘‘IN

17 GENERAL’’ and inserting ‘‘SPONSORING OR

18 EXHIBITING’’; and 

19 (ii) by striking ‘‘paragraph (2)’’ and 

20 inserting ‘‘paragraph (3)’’; 

21 (C) by redesignating paragraph (2) as 

22 paragraph (3); and 

23 (D) by inserting after paragraph (1) the 

24 following new paragraph: 

25 ‘‘(2) ATTENDING OR CAUSING A MINOR TO AT26 TEND.—It shall be unlawful for any person to— 
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1 ‘‘(A) knowingly attend an animal fighting 

2 venture; or 

3 ‘‘(B) knowingly cause a minor to attend an 

4 animal fighting venture.’’; and 

5 (2) in subsection (g), by adding at the end the 

6 following new paragraph: 

7 ‘‘(5) the term ‘minor’ means a person under the 

8 age of 18 years old.’’. 

9 (b) ENFORCEMENT OF ANIMAL FIGHTING PROHIBI10 TIONS.—Section 49 of title 18, United States Code, is 

11 amended— 

12 (1) by striking ‘‘Whoever’’ and inserting ‘‘(a) 

13 IN GENERAL.—Whoever’’; 

14 (2) in subsection (a), as designated by para15 graph (1) of this section, by striking ‘‘subsection 

16 (a),’’ and inserting ‘‘subsection (a)(1),’’; and 

17 (3) by adding at the end the following new sub18 sections: 

19 ‘‘(b) ATTENDING AN ANIMAL FIGHTING VENTURE.— 

20 Whoever violates subsection (a)(2)(A) of section 26 of the 

21 Animal Welfare Act (7 U.S.C. 2156) shall be fined under 

22 this title, imprisoned for not more than 1 year, or both, 

23 for each violation. 

24 ‘‘(c) CAUSING A MINOR TO ATTEND AN ANIMAL

25 FIGHTING VENTURE.—Whoever violates subsection 
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1 (a)(2)(B) of section 26 (7 U.S.C. 2156) of the Animal 

2 Welfare Act shall be fined under this title, imprisoned for 

3 not more than 3 years, or both, for each violation.’’. 

4 SEC. 12214. PROHIBITING USE OF PRESIDENTIAL ELECTION 

5 CAMPAIGN FUNDS FOR PARTY CONVEN6 TIONS. 

7 (a) IN GENERAL.— 

8 (1) IN GENERAL.—Chapter 95 of the Internal 

9 Revenue Code of 1986 is amended by striking sec10 tion 9008. 

11 (2) CLERICAL AMENDMENT.—The table of sec12 tions of chapter 95 of such Code is amended by 

13 striking the item relating to section 9008. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1) AVAILABILITY OF PAYMENTS TO CAN16 DIDATES.—The third sentence of section 9006(c) of 

17 the Internal Revenue Code of 1986 is amended by 

18 striking ‘‘, section 9008(b)(3),’’. 

19 (2) REPORTS BY FEDERAL ELECTION COMMIS20 SION.—Section 9009(a) of such Code is amended— 

21 (A) by adding ‘‘and’’ at the end of para22 graph (2); 

23 (B) by striking the semicolon at the end of 

24 paragraph (3) and inserting a period; and 
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1 (C) by striking paragraphs (4), (5), and 

2 (6). 

3 (3) PENALTIES.—Section 9012 of such Code is 

4 amended— 

5 (A) in subsection (a)(1), by striking the 

6 second sentence; and 

7 (B) in subsection (c), by striking para8 graph (2) and redesignating paragraph (3) as 

9 paragraph (2). 

10 (4) AVAILABILITY OF PAYMENTS FROM PRESI11 DENTIAL PRIMARY MATCHING PAYMENT ACCOUNT.— 

12 The second sentence of section 9037(a) of such Code 

13 is amended by striking ‘‘and for payments under 

14 section 9008(b)(3)’’. 

15 (c) RETURN OF PREVIOUSLY SUBMITTED MONEY

16 FOR DEFICIT REDUCTION.—Any amount which is re17 turned by the national committee of a major party or a 

18 minor party to the general fund of the Treasury from an 

19 account established under section 9008 of the Internal 

20 Revenue Code of 1986 after the date of the enactment 

21 of this Act shall be dedicated to the sole purpose of deficit 

22 reduction. 

23 (d) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply with respect to elections occurring 

25 after December 31, 2012. 
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1 SEC. 12215. REPORTS ON EFFECTS OF DEFENSE AND NON2 DEFENSE BUDGET SEQUESTRATION. 

3 (a) FINDINGS.—Congress makes the following find4 ings: 

5 (1) The inability of the Joint Select Committee 

6 on Deficit Reduction to find $1,200,000,000,000 in 

7 savings will trigger automatic funding reductions 

8 known as ‘‘sequestration’’ to raise an equivalent 

9 level of savings between fiscal years 2013 and 2021. 

10 (2) These savings are in addition to 

11 $900,000,000,000 in deficit reduction resulting from 

12 discretionary spending limits established by the 

13 Budget Control Act of 2011. 

14 (b) REPORTS.— 

15 (1) REPORT BY THE DIRECTOR OF THE OFFICE

16 OF MANAGEMENT AND BUDGET.— 

17 (A) IN GENERAL.—Not later than 30 days 

18 after the date of enactment of this Act, the Di19 rector of the Office of Management and Budget 

20 shall report upon the impact of sequestration of 

21 funds with respect to a sequestration under 

22 paragraphs (7)(A) and (8) of section 251(A) of 

23 the Balanced Budget and Emergency Deficit 

24 Control Act of 1985 (2 U.S.C. 901a) for fiscal 

25 year 2013 on January 2, 2013, using enacted 

26 levels of appropriations for accounts funded 
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1 pursuant to an enacted regular appropriations 

2 bill for fiscal year 2013, and estimates pursuant 

3 to a current rate continuing resolution for ac4 counts not funded through an enacted appro5 priations measure for fiscal year 2013 as the 

6 levels to which the sequestration should be ap7 plied. 

8 (B) ELEMENTS.—The report required by 

9 subparagraph (A) shall include the following: 

10 (i) Each account that would be sub11 ject to such a sequestration. 

12 (ii) Each account that would be sub13 ject to such a sequestration but subject to 

14 a special rule under section 255 or 256 of 

15 the Balanced Budget and Emergency Def16 icit Control Act of 1985 (and the citation 

17 to such rule). 

18 (iii) Each account that would be ex19 empt from such a sequestration. 

20 (iv) Any other data or information 

21 that would enhance public understanding 

22 of the sequester and its effect on the de23 fense and nondefense functions of the Fed24 eral Government including the impact on 

25 essential public safety responsibilities such 
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1 as homeland security, food safety, and air 

2 traffic control activities. 

3 (C) CATAGORIZE AND GROUP.—The report 

4 required under this paragraph shall categorize 

5 and group the listed accounts by the appropria6 tions Act covering such accounts. 

7 (2) REPORT BY THE PRESIDENT.— 

8 (A) IN GENERAL.—Not later than 60 days 

9 after the date of the enactment of this Act, or 

10 by October 30, 2012, whichever is earlier, the 

11 President shall submit to Congress a detailed 

12 report on the sequestration required by para13 graphs (7)(A) and (8) of section 251A of the 

14 Balanced Budget and Emergency Deficit Con15 trol Act of 1985 (2 U.S.C. 901a) for fiscal year 

16 2013 on January 2, 2013. 

17 (B) ELEMENTS.—The reports required by 

18 subparagraph (A) shall include— 

19 (i) for discretionary appropriations— 

20 (I) an estimate for each category, 

21 of the sequestration percentages and 

22 amounts necessary to achieve the re23 quired reduction; and 

24 (II) an identification of each ac25 count to be sequestered and estimates 
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1 of the level of sequestrable budgetary 

2 resources and resulting outlays and 

3 the amount of budgetary resources to 

4 be sequestered and resulting outlay 

5 reductions at the program, project, 

6 and activity level, using enacted levels 

7 of appropriations for accounts funded 

8 pursuant to an enacted regular appro9 priations bill for fiscal year 2013, and 

10 estimates pursuant to a current rate 

11 continuing resolution for accounts not 

12 funded through an enacted appropria13 tions measure for fiscal year 2013; 

14 (ii) for non-defense discretionary 

15 spending only— 

16 (I) a list of the programs, 

17 projects, and activities that would be 

18 reduced or terminated; 

19 (II) an assessment of the jobs 

20 lost directly though program and per21 sonnel cuts; 

22 (III) an estimate of the impact 

23 program cuts would have on the long24 term competitiveness of the United 

25 States and its ability to maintain its 
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1 lead on research and development, as 

2 well as the impact on our national 

3 goal to graduate the most students 

4 with degrees in in-demand fields; 

5 (IV) an assessment of the impact 

6 of program cuts to education funding 

7 across the country, including esti8 mates on teaching jobs lost, the num9 ber of students cut off programs they 

10 depend on, and education resources 

11 lost by States and local educational 

12 agencies; 

13 (V) an analysis of the impact of 

14 cuts to programs middle class families 

15 and the most vulnerable families de16 pend on, including estimates of how 

17 many families would lose access to 

18 support for children, housing and nu19 trition assistance, and skills training 

20 to help workers get better jobs; 

21 (VI) an analysis of the impact on 

22 small business owners’ ability to ac23 cess credit and support to expand and 

24 create jobs; 
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1 (VII) an assessment of the im2 pact to public safety, including an es3 timate of the reduction of police offi4 cers, emergency medical technicians, 

5 and firefighters; 

6 (VIII) a review of the health and 

7 safety impact of cuts on communities, 

8 including the impact on food safety, 

9 national border security, and environ10 mental cleanup; 

11 (IX) an assessment of the impact 

12 of sequestration on environmental 

13 programs that protect the Nation’s air 

14 and water, and safeguard children 

15 and families; 

16 (X) assessment of the impact of 

17 sequestration on the Nation’s infra18 structure, including how cuts would 

19 harm the ability of States and com20 munities to invest in roads, bridges, 

21 and waterways; 

22 (XI) an assessment of the impact 

23 on ongoing government operations 

24 and the safety of Federal Government 

25 personnel; 
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1 (XII) a detailed estimate of the 

2 reduction in force of civilian personnel 

3 as a result of sequestration, including 

4 the estimated timing of such reduction 

5 in force actions and the timing of re6 duction in force notifications thereof; 

7 and 

8 (XIII) an estimate of the number 

9 and value of all contracts that will be 

10 terminated, restructured, or revised in 

11 scope as a result of sequestration, in12 cluding an estimate of potential termi13 nation costs and of increased contract 

14 costs due to renegotiation and rein15 statement of contracts; 

16 (iii) for direct spending— 

17 (I) an estimate for the defense 

18 and nondefense functions based on 

19 current law of the sequestration per20 centages and amount necessary to 

21 achieve the required reduction; 

22 (II) a specific identification of 

23 the reductions required for each non24 exempt direct spending account at the 
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1 program, project, and activity level; 

2 and 

3 (III) a specific identification of 

4 exempt direct spending accounts at 

5 the program, project, and activity 

6 level; and 

7 (iv) any other data or information 

8 that would enhance public understanding 

9 of the sequester and its effect on the de10 fense and nondefense functions of the Fed11 eral Government including the impact on 

12 essential public safety responsibilities such 

13 as— 

14 (I) homeland security, food safe15 ty, and air traffic control activities; 

16 (II) an assessment of the impact 

17 of cuts to programs that the Nation’s 

18 farmers rely on to help them through 

19 difficult economic times; and 

20 (III) an assessment of the impact 

21 of Medicare cuts to the ability for sen22 iors to access care. 

23 (3) REPORT BY THE SECRETARY OF DE24 FENSE.— 
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1 (A) IN GENERAL.—Not later than August 

2 15, 2012, the Secretary of Defense shall report 

3 on the impact on national defense accounts as 

4 defined by paragraphs (7)(A) and (8) of section 

5 251A of the Balanced Budget and Emergency 

6 Deficit Control Act of 1985 (2 U.S.C. 901a) 

7 using enacted levels of appropriations for ac8 counts funded pursuant to an enacted regular 

9 appropriations bill for fiscal year 2013, and es10 timates pursuant to a current rate continuing 

11 resolution for accounts not funded through an 

12 enacted appropriations measure for fiscal year 

13 2013 as the levels to which the sequestration 

14 should be applied. 

15 (B) ELEMENTS OF THE DEFENSE RE16 PORTS.—The report required by subparagraph 

17 (A) shall include the following: 

18 (i) An assessment of the impact on 

19 ongoing operations and the safety of 

20 United States military and civilian per21 sonnel. 

22 (ii) An assessment of the impact on 

23 the readiness of the Armed Forces, includ24 ing impacts to steaming hours, flying 

25 hours, and full spectrum training miles, 
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1 and an estimate of the increase or decrease 

2 in readiness (as defined in the C status C– 

3 1 through C–5). 

4 (iii) A detailed estimate of the reduc5 tion in force of civilian personnel, including 

6 the estimated timing of such reduction in 

7 force actions and timing of reduction in 

8 force notifications thereof. 

9 (iv) A list of the programs, projects, 

10 and activities of the Department of De11 fense that would be reduced or terminated 

12 and the expected savings for each program, 

13 project and activity. 

14 (v) An estimate of the number and 

15 value of all contracts that will be termi16 nated, restructured, or revised in scope, in17 cluding an estimate of potential termi18 nation costs and of increased contract 

19 costs due to renegotiation and reinstate20 ment of contracts. 

21 (vi) An assessment of the impact on 

22 the ability of the Department of Defense to 

23 carry out the National Military Strategy of 

24 the United States, and any changes to the 

25 most recent Risk Assessment of the Chair-
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1 man of the Joint Chiefs of Staff under sec2 tion 153(b) of title 10, United States 

3 Code, arising from sequestration. 

Passed the Senate June 21, 2012. 

Attest: 

Secretary. 
112TH CONGRESS 

2D SESSION S. 3240 

AN ACT 

To reauthorize agricultural programs through 

2017, and for other purposes.