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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1346 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1346

   To amend conservation and biofuels programs of the Department of 
  Agriculture to promote the compatible goals of economically viable 
 agricultural production and reducing nutrient loads in the Chesapeake 
  Bay and its tributaries by assisting agricultural producers to make 
    beneficial, cost-effective changes to cropping systems, grazing 
   management, and nutrient management associated with livestock and 
 poultry production, crop production, bioenergy production, and other 
 agricultural practices on agricultural land within the Chesapeake Bay 
                   watershed, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 9, 2007

   Ms. Mikulski (for herself, Mr. Cardin, Mr. Warner, Mr. Biden, Mr. 
 Rockefeller, Mr. Carper, and Mr. Webb) introduced the following bill; 
  which was read twice and referred to the Committee on Agriculture, 
                        Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
   To amend conservation and biofuels programs of the Department of 
  Agriculture to promote the compatible goals of economically viable 
 agricultural production and reducing nutrient loads in the Chesapeake 
  Bay and its tributaries by assisting agricultural producers to make 
    beneficial, cost-effective changes to cropping systems, grazing 
   management, and nutrient management associated with livestock and 
 poultry production, crop production, bioenergy production, and other 
 agricultural practices on agricultural land within the Chesapeake Bay 
                   watershed, and for other purposes.

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

SECTION 1. SHORT TITLE.

    (a) Short Title.--This Act may be cited as the ``Chesapeake's 
Healthy and Environmentally Sound Stewardship of Energy and Agriculture 
Act of 2007'' or the ``CHESSEA Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title.
Sec. 2. Findings.
Sec. 3. Environmental quality incentives program.
Sec. 4. Regional water quality enhancement program.
Sec. 5. Conservation innovation grants.
Sec. 6. Conservation reserve program.
Sec. 7. Conservation security program.
Sec. 8. Comprehensive planning technical assistance pilot program.
Sec. 9. Wetlands reserve program.
Sec. 10. Agricultural management assistance.
Sec. 11. Biorefinery and biofuel project grants.
Sec. 12. Renewable energy systems and energy efficiency improvements 
                            program.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the Chesapeake Bay is the largest estuary in North 
        America, the world's most productive estuary, and a resource of 
        worldwide significance;
            (2) the Chesapeake Bay watershed encompasses portions of 6 
        States, including New York, Pennsylvania, Delaware, Maryland, 
        Virginia, and West Virginia, and the District of Columbia, and 
        contains 150 major tributaries;
            (3) agricultural operations and small family farms in 
        particular are a defining feature of the economy, heritage, 
        culture, landscape, and environment of the States of the 
        Chesapeake Bay watershed, and those agricultural operations 
        account for nearly \1/4\ of the land in the Chesapeake Bay 
        watershed, stretching across 10,000,000 acres and involving 
        tens of thousands of individual agricultural producers;
            (4) unfortunately, those same agricultural operations are 
        the source of more than 40 percent of the nitrogen and 
        phosphorus loads entering the Chesapeake Bay;
            (5) in the landmark regional agreement entered into by the 
        Chesapeake Executive Council entitled ``Chesapeake 2000'' and 
        dated June 28, 2000 (referred to in this Act as the 
        ``Chesapeake 2000 Agreement''), the Federal Government, the 6 
        States of the Chesapeake Bay watershed, and the District of 
        Columbia, agreed to significantly reduce annual nitrogen, 
        phosphorus, and sediment load by 2010 to restore the Chesapeake 
        Bay and its tidal tributaries sufficiently to remove the 
        Chesapeake Bay and the tributaries from the list of impaired 
        waters under the Federal Water Pollution Control Act (33 U.S.C. 
        1251 et seq.);
            (6) current efforts to implement the Chesapeake 2000 
        Agreement and achieve the nitrogen and phosphorus reduction 
        goals specified in the Chesapeake 2000 Agreement are 
        significantly underfunded; and
            (7) the implementation of improved conservation practices 
        in agricultural operations in the Chesapeake Bay watershed and 
        increased agricultural bioenergy production can serve the dual 
        purposes of enhancing the environmental health of the 
        Chesapeake Bay and the economic vitality of agricultural 
        producers in the watershed.

SEC. 3. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

    (a) Extension.--
            (1) Funding extension and increase.--Section 1241(a) of the 
        Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended by 
        striking paragraph (6) and inserting the following:
            ``(6) The environmental quality incentives program under 
        chapter 4, using, to the maximum extent practicable, 
        $2,000,000,000 in each of fiscal years 2008 through 2013.''.
            (2) Conforming amendments.--
                    (A) Section 1240B of the Food Security Act of 1985 
                (16 U.S.C. 3839aa-2) is amended--
                            (i) in subsection (a)(1), by striking 
                        ``2010'' and inserting ``2013''; and
                            (ii) in subsection (g), by striking 
                        ``2007'' and inserting ``2013''.
                    (B) Section 1240I(c)(1)(C)) of the Food Security 
                Act of 1985 (16 U.S.C. 3839aa-9(c)(1)(C)) is amended by 
                striking ``2007'' and inserting ``2013''.
    (b) Priority Given to State Allocations.--Section 1240F of the Food 
Security Act of 1985 (16 U.S.C. 3839aa-6) is amended--
            (1) by striking ``To'' and inserting the following:
    ``(a) Assistance, Information, and Training.--To''; and
            (2) by adding at the end the following:
    ``(b) Interstate Watersheds.--In making program allocations to 
States, the Secretary shall give priority to States located within 
watersheds that--
            ``(1) encompass more than 1 State;
            ``(2) are recognized under the Federal Water Pollution 
        Control Act (33 U.S.C. 1251 et seq.) as having nutrient-related 
        water quality impairments or sediment-related water quality 
        impairments; and
            ``(3) are subject to State-approved tributary strategies or 
        watershed management plans designed to address those 
        impairments.
    ``(c) Prohibited Allocation Factor.--The Secretary shall not use 
the total number of acres as an allocation factor under this 
section.''.
    (c) Cost Share Payment Exception.--Section 1240B(d)(2) of the Food 
Security Act of 1985 (16 U.S.C. 3839aa-2(d)(2)) is amended by striking 
subparagraph (A) and inserting the following:
                    ``(A) Limited resource and beginning farmers or 
                ranchers.--The Secretary may increase the amount 
                provided to a producer under paragraph (1) to not more 
                than 90 percent if the producer is a limited resource 
                or beginning farmer or rancher, as determined by the 
                Secretary, except that the cost-share payment under the 
                program not be less than 15 percent more than the 
                payment that the Secretary may determine under 
                paragraph (1).''.
    (d) Forest Conservation and Performance Incentives for States.--
Chapter 4 of subtitle D of title XII of the Food Security Act of 1985 
(16 U.S.C. 3839aa et seq.) is amended by adding at the end the 
following:

``SEC. 1240J. PROMOTION OF FOREST STEWARDSHIP PRACTICES.

    ``(a) Cost-Share Payments and Incentive Payments.--In carrying out 
the program under this chapter, the Secretary shall promote forest 
stewardship by providing cost-share payments and incentive payments to 
nonindustrial private forest owners to carry out eligible conservation 
activities, to--
            ``(1) improve water quality;
            ``(2) improve habitat for at-risk species;
            ``(3) restore ecologically important forest types; or
            ``(4) control invasive species.
    ``(b) Priority.--The Secretary shall give priority to projects that 
involve multiple landowners implementing eligible conservation 
activities in a coordinated manner to address the purposes described in 
subsection (a).
    ``(c) Funding.--Of the funds of the Commodity Credit Corporation, 
the Secretary shall use to carry out this section--
            ``(1) $25,000,000 for fiscal year 2008;
            ``(2) $45,000,000 for fiscal year 2009;
            ``(3) $60,000,000 for fiscal year 2010;
            ``(4) $75,000,000 for each of fiscal years 2011 and 2012; 
        and
            ``(5) $100,000,000 for fiscal year 2013.

``SEC. 1240K. PERFORMANCE INCENTIVES FOR STATES.

    ``(a) High Level of Performance Bonus.--For each of fiscal years 
2008 through 2013, the Secretary shall reserve 10 percent of the funds 
made available under this chapter for bonus allocations to States that 
demonstrate a high level of performance in implementing the 
environmental quality incentives program established under this 
chapter.
    ``(b) Special Considerations.--In evaluating State performance 
under subsection (a), the Secretary shall reward States that--
            ``(1) consistently meet the requirements of section 1240C 
        in evaluating offers and payments;
            ``(2) dedicate a portion of their annual environmental 
        quality incentives program allocation to multiproducer 
        cooperative efforts to address specific resource concerns;
            ``(3) collaborate with other Federal and State agencies, 
        local governments, educational institutions, and for-profit and 
        nonprofit organizations to monitor and evaluate the 
        environmental outcomes associated with implementation of the 
        program;
            ``(4) demonstrate effective and efficient program delivery, 
        including the provision of adequate technical assistance to all 
        program participants through appropriate staffing and through 
        cooperation with other Federal, State, tribal, and local 
        agencies, for-profit and nonprofit organizations, and 
        individuals with demonstrated expertise in the planning and 
        implementation of conservation practices, systems, and 
        approaches;
            ``(5) support and encourage innovative approaches to 
        addressing resource concerns;
            ``(6) effectively leverage Federal funding with local and 
        State matching funds; and
            ``(7) demonstrate effective outreach and innovative 
        approaches to reaching and serving beginning farmers or 
        ranchers, limited resource producers, and operators with lower 
        rates of historical participation in Federal farm and 
        conservation programs.''.

SEC. 4. REGIONAL WATER QUALITY ENHANCEMENT PROGRAM.

    (a) Program Requirements.--Chapter 5 of subtitle D of title XII of 
the Food Security Act of 1985 is amended by inserting after section 
1240P (16 U.S.C. 3839bb-3) the following:

``SEC. 1240Q. REGIONAL WATER QUALITY ENHANCEMENT PROGRAM.

    ``(a) Program Required.--In order to increase, facilitate, and 
further implement cooperative partnerships between States, producers, 
and other interested persons or parties to improve water quality in the 
largest bodies of water in the United States, the Secretary shall offer 
to enter into agreements with States and the District of Columbia 
containing all or a portion of such a body of water or containing 
tributaries of such a body of water (including the Chesapeake Bay and 
its tributaries) to assist the States and District to carry out special 
initiatives focused on the enhanced stewardship of those bodies of 
water.
    ``(b) Term of Agreement.--An agreement under this section shall be 
for a term of not shorter than 3 nor longer than 5 years.
    ``(c) Competitive Process; Set-Aside.--
            ``(1) Competitive process.--Subject to paragraph (2), the 
        Secretary shall establish a competitive process for considering 
        applications for agreements under this section, consistent with 
        the evaluation criteria described in subsection (d).
            ``(2) Set aside.--Not less than 25 percent of total amount 
        of funds made available for agreements under this section shall 
        be awarded to States and the District of Columbia containing a 
        portion of the Chesapeake Bay watershed.
    ``(d) Evaluation of Applications; Criteria.--In evaluating 
applications for an agreement under this section, the Secretary shall 
consider the extent to which the program proposed by the State or 
District of Columbia would--
            ``(1) most cost-effectively achieve the greatest 
        improvements to water quality, using--
                    ``(A) adoption of management practices and systems, 
                including soil amendments, soil and stalk testing, 
                alternative cropping systems, cover crops, buffers, and 
                other measures;
                    ``(B) innovative or advanced conservation 
                techniques that hold substantial promise for producing 
                long-term, cost-effective improvements to water 
                quality;
                    ``(C) reduction in nutrient inputs to agricultural 
                operations, such as through feed management; and
                    ``(D) manure processing and treatment technologies 
                to permit more efficient use and transport of manure to 
                produce energy, restore nutrient-deficient land, or 
                reduce air emissions;
            ``(2) leverage financial and technical resources from 
        sources other than the programs authorized by this subtitle, 
        including financial and technical resources provided by other 
        Federal agencies, State agencies, local governments, 
        nongovernmental organizations and associations, and other 
        private sector entities;
            ``(3) provide necessary technical assistance to producers 
        and other cooperators participating in the project or 
        initiative, including in the application cost estimates for 
        technical assistance and whether the assistance will be 
        provided by technical service providers;
            ``(4) establish a program of education and outreach to 
        attract new participants;
            ``(5) serve as a transferable model for other regional 
        watershed efforts; or
            ``(6) evaluate progress and measure results.
    ``(e) Priorities.--To the maximum extent practicable, consistent 
with the requirements of subsection (d), the Secretary shall ensure 
that, for each fiscal year, agreements are entered into under this 
section to support projects and initiatives that collectively address 
water quality impairments.
    ``(f) Selection Process.--In evaluating applications under this 
section, the Secretary shall consider recommendations from scientists, 
regional experts, and other persons with appropriate expertise in the 
Department of Agriculture, other Federal and State agencies, and 
interest groups, including producer associations and conservation and 
environmental organizations.
    ``(g) Cost Share Requirements.--
            ``(1) In general.--Subject to paragraphs (2) and (3), the 
        Secretary shall not require more than 25 percent of the cost of 
        a project or initiative supported under an agreement entered 
        into under this section to be provided from non-Federal 
        sources.
            ``(2) Priority for higher non-federal share.--The Secretary 
        may give priority in entering into agreements under this 
        section to a project or initiative offering to cover a higher 
        percentage of the cost of the project or initiative from non-
        Federal sources.
            ``(3) In-kind contributions.--If the Secretary establishes 
        a cost-share requirement for a project or initiative, the 
        Secretary shall allow the use of in-kind contributions to meet 
        the requirement.''.
    (b) Funding.--Section 1241(a) of the Food Security Act of 1985 (16 
U.S.C. 3841(a)) is amended by adding at the end the following:
            ``(8) The regional water quality enhancement program under 
        section 1240Q, using, to the maximum extent practicable--
                    ``(A) $175,000,000 in fiscal year 2008; and
                    ``(B) $200,000,000 in each of fiscal years 2009 
                through 2013.''.

SEC. 5. CONSERVATION INNOVATION GRANTS.

    Section 1240H of the Food Security Act of 1985 (16 U.S.C. 3839aa-8) 
is amended--
            (1) in subsection (a), by striking ``may'' and inserting 
        ``shall'';
            (2) in subsection (b)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``may'' and inserting ``shall'';
                    (B) in paragraph (2), by striking ``and'' at the 
                end;
                    (C) in paragraph (3), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(4) include a plan for technology transfer.''; and
            (3) by adding at the end the following:
    ``(d) Technology Transfer.--In making grants under this section, 
the Secretary shall give priority to projects that ensure 
transferability of innovative conservation technologies and approaches 
to achieve widespread implementation by producers.
    ``(e) Additional Funding.--In addition to amounts made available 
under section 1241(a)(6) to carry out this chapter, of funds of the 
Commodity Credit Corporation, the Secretary shall use to carry out this 
section $100,000,000 for each of fiscal years 2008 through 2013.''.

SEC. 6. CONSERVATION RESERVE PROGRAM.

    (a) Extension.--
            (1) Funding extension.--Section 1241(a) of the Food 
        Security Act of 1985 (16 U.S.C. 3841(a)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                striking ``2007'' and inserting ``2013''; and
                    (B) in paragraph (1), by striking ``The'' and 
                inserting ``For each of fiscal years 2002 through 2013, 
                the''.
            (2) Conforming amendments.--Section 1231 of the Food 
        Security Act of 1985 (16 U.S.C. 3831) is amended--
                    (A) in subsection (a), by striking ``2007'' and 
                inserting ``2013'';
                    (B) in subsection (d), by striking ``2007'' and 
                inserting ``2013'';
                    (C) in subsection (e)(3), by striking ``2002'' and 
                inserting ``2008''; and
                    (D) in subsection (h)(1), by striking ``2007'' and 
                inserting ``2013''.
    (b) Enrollment Goals and Use of General Signup.--Section 1231(d) of 
the Food Security Act of 1985 (16 U.S.C. 3831(d)) is amended--
            (1) by striking ``The Secretary'' and inserting:
            ``(1) Acreage authorized.--The Secretary''; and
            (2) by adding at the end the following:
            ``(2) Enrollment goals.--For the period beginning on the 
        date of enactment of this paragraph and ending on December 31, 
        2013, the Secretary shall establish a goal to enroll not less 
        than 7,000,000 acres of eligible land through the continuous 
        enrollment program and the conservation reserve enhancement 
        program, with priority given to riparian buffers, restored 
        wetland, and other habitats known to improve water quality and 
        called for under established, State-approved tributary 
        strategies or watershed management plans to reduce nutrients 
        and sediments from agricultural sources to impaired waters.
            ``(3) Limitation on use of general signup.--
                    ``(A) In general.--To the maximum extent 
                practicable, the Secretary shall ensure that not more 
                than 80 percent of the acres maintained in the 
                conservation reserve at any 1 time during the 2008 
                through 2013 calendar years are acres that were 
                enrolled through a general signup under section 
                1234(c)(2)(A).
                    ``(B) Acceptability of general signup offers.--For 
                an offer to be accepted to enroll acres into the 
                conservation reserve through the general signup, the 
                acres covered by the offer shall have an environmental 
                benefit index score that is at or above a threshold 
                that is 15 percent higher than the average of the 
                thresholds used in general signups during fiscal years 
                1996 through 2006, adjusted for changes in the index 
                over those fiscal years.''.
    (c) Payment Limitation.--Section 1234(f)(1) of the Food Security 
Act of 1985 (16 U.S.C. 3834(f)) is amended--
            (1) by striking ``The'' and inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the''; and
            (2) by adding at the end the following:
                    ``(B) Waivers.--The Secretary may waive the payment 
                limitation established under subparagraph (A) for a 
                person participating in the conservation reserve 
                enhancement program if the Secretary determines the 
                waiver is necessary to achieve the objectives of the 
                program.''.

SEC. 7. CONSERVATION SECURITY PROGRAM.

    (a) Repeal of Funding Cap.--Section 1241(a)(3) of the Food Security 
Act of 1985 (16 U.S.C. 3841(a)(3)) is amended by striking ``, using not 
more than'' and all that follows through ``2015''.
    (b) Program Extension.--Section 1238A(a) of the Food Security Act 
of 1985 (16 U.S.C. 3838a(a)) is amended by striking ``2011'' and 
inserting ``2013''.
    (c) Assistance to Certain States.--Section 1238A(b) of the Food 
Security Act of 1985 (16 U.S.C. 3838a(b)) is amended by adding at the 
end the following:
            ``(5) Continuous enrollment.--The Secretary shall provide 
        for a continuous enrollment of eligible land in any State that, 
        through a written agreement, is partnering with other States 
        and the Federal Government to achieve specific numeric 
        reductions in nutrient and sediment pollution loads within a 
        multistate watershed in an effort to remove the waters in that 
        watershed from the list of impaired waters under the Federal 
        Water Pollution Control Act (33 U.S.C. 1251 et seq.).''.
    (d) Enhanced Payments for Water Quality.--Section 
1238C(b)(1)(C)(iii) of the Food Security Act of 1985 (16 U.S.C. 
3838c(b)(1)(C)(iii)) is amended--
            (1) in subclause (IV), by striking ``or'' at the end;
            (2) in subclause (V), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(VI) implements practices that will significantly 
                improve water quality in watersheds associated with 
                waters impaired by agricultural nutrients, with 
                priority given to the most effective practices.''.
    (e) Duties of the Secretary.--Section 1238C of the Food Security 
Act of 1985 (16 U.S.C. 3838c) is amended by striking subsections (f) 
and (g) and inserting the following:
    ``(f) Enrollment Priority.--In the case of any fiscal year for 
which funding for the conservation security program is limited, the 
Secretary shall prioritize entering into contracts to address water 
quality in watersheds of bodies of water impaired by nutrients, based 
on the degree to which a producer proposes to increase the management 
intensity with which the producer addresses nutrient impairment of 
water quality in the affected watershed.
    ``(g) Prohibited Allocation Factor.--The Secretary shall not use 
the total number of acres as an allocation factor under this section.
    ``(h) Technical Assistance.--For each of fiscal years 2008 through 
2013, the Secretary shall provide technical assistance to producers for 
the development and implementation of conservation security contracts 
in an amount that, for each producer--
            ``(1) is based on actual cost; but
            ``(2) does not exceed 23 percent of amounts expended for 
        the fiscal year for the producer.''.

SEC. 8. COMPREHENSIVE PLANNING TECHNICAL ASSISTANCE PILOT PROGRAM.

    Section 1242 of the Food Security Act of 1985 (16 U.S.C. 3842) is 
amended by adding at the end the following:
    ``(c) Comprehensive Planning Technical Assistance Pilot Program.--
            ``(1) Chesapeake bay watershed.--The Secretary shall 
        establish a pilot program in the Chesapeake Bay watershed to 
        assist producers with comprehensive conservation planning, 
        design, and implementation--
                    ``(A) before applying for assistance under any of 
                the conservation programs authorized by subtitle D; and
                    ``(B) through the process of design and 
                implementation of conservation projects.
            ``(2) Comprehensive assessment and technical assistance.--
        In carrying out the pilot program, the Secretary shall assist 
        each producer by--
                    ``(A) making a comprehensive assessment of the 
                resource concerns, needs, and alternative solutions for 
                the entire operation of the producer, as determined by 
                the Secretary, in accordance the applicable 
                conservation planning manual of the Natural Resources 
                Conservation Service; and
                    ``(B) providing technical assistance in design and 
                implementation of the solutions.
            ``(3) Provision of assistance.--
                    ``(A) In general.--The Secretary shall provide 
                assistance to producers under the pilot program 
                directly or through third-party providers certified by 
                the Secretary.
                    ``(B) Results.--The Secretary shall provide the 
                results of the comprehensive planning, design, and 
                implementation assistance to the producer to enable the 
                producer to make informed choices on the type of 
                financial assistance available through conservation 
                programs administered by the Secretary under subtitle D 
                that would most effectively address the resource needs 
                of the operation, consistent with the environmental 
                goals for the area in which the operation is located.
            ``(4) Cost.--The Secretary shall provide assistance under 
        the pilot program without cost to producers.
            ``(5) Funding.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use to carry out the pilot 
        program $10,000,000 for each of fiscal years 2008 through 
        2013.''.

SEC. 9. WETLANDS RESERVE PROGRAM.

    (a) Extension.--
            (1) Funding extension.--Section 1241(a)(2) of the Food 
        Security Act of 1985 (16 U.S.C. 3841(a)(2)) is amended by 
        striking ``The'' and inserting ``For each of fiscal years 2002 
        through 2013, the''.
            (2) Conforming amendment.--Section 1237(c) of the Food 
        Security Act of 1985 (16 U.S.C. 3837(c)) is amended by striking 
        ``2007'' and inserting ``2013''.
    (b) Maximum and Yearly Enrollment.--Section 1237(b)(1) of the Food 
Security Act of 1985 (16 U.S.C. 3837(b)(1)) is amended by striking 
``2,275,000 acres,'' and all that follows through the period at the end 
and inserting ``3,500,000 acres, of which, to the maximum extent 
practicable, at least 5,000 acres in calendar year 2008 and 10,000 
acres in each of calendar years 2009 and 2010 shall be enrolled to meet 
State and Federal 2010 goals established pursuant to the Chesapeake 
2000 agreement for the Chesapeake Bay watershed.''.
    (c) Priority.--Section 1237 of the Food Security Act of 1985 (16 
U.S.C. 3837) is amended by adding at the end the following:
    ``(g) Priority.--The Secretary shall give priority to enrollments 
benefitting water quality, and shall consider whether States are 
implementing the program consistent with those priorities, when 
allocating program funding to States.''
    (d) Additional Purpose.--Section 1237A(b)(3) of the Food Security 
Act of 1985 (16 U.S.C. 3837a(b)(3)) is amended by inserting after 
``wetlands'' the following: ``, including the reduction of excess 
nutrients''.
    (e) Increased Cost Share.--Section 1237C(b)(2) of the Food Security 
Act of 1985 (16 U.S.C. 3837c(b)(2)) is amended--
            (1) by striking ``In'' and inserting the following:
                    ``(A) In general.--In''; and
            (2) by adding at the end the following:
                    ``(B) Increased cost-share percentage.--The 
                Secretary may increase the cost-share percentage under 
                subparagraph (A) if the conservation plan described in 
                section 1237A(b) results in--
                            ``(i) a significant reduction of excess 
                        nutrients in a watershed of a body of water 
                        impaired by agricultural nutrients; or
                            ``(ii) in land placed under permanent 
                        easement.''.
    (f) Easement Priority.--Section 1237C(d) of the Food Security Act 
of 1985 (16 U.S.C. 3837c(d)) is amended by inserting before the period 
at the end the following: ``or for achieving nutrient reductions in a 
watershed of a body of water impaired by agricultural nutrients''.

SEC. 10. AGRICULTURAL MANAGEMENT ASSISTANCE.

    (a) Additional State.--Section 524(b)(1) of the Federal Crop 
Insurance Act (7 U.S.C. 1524(b)(1)) is amended by inserting 
``Virginia,'' after ``Vermont,''.
    (b) Funding and Duration.--Section 524(b)(4)(B) of the Federal Crop 
Insurance Act (7 U.S.C. 1524(b)(4)(B)) is amended--
            (1) in clause (ii)--
                    (A) by striking ``fiscal years 2003 through 2007'' 
                and inserting ``fiscal years 2008 through 2013''; and
                    (B) by striking ``$20,000,000'' and inserting 
                ``$50,000,000''; and
            (2) in clause (iii)--
                    (A) in the matter preceding subclause (I), by 
                striking ``fiscal years 2004 through 2007'' and 
                inserting ``fiscal years 2008 through 2013'';
                    (B) in subclause (I), by striking ``$14,000,000'' 
                and inserting ``$38,000,000'';
                    (C) in subclause (II), by striking ``$1,000,000'' 
                and inserting ``$2,000,000''; and
                    (D) in subclause (III), by striking ``$5,000,000'' 
                and inserting ``$10,000,000''.

SEC. 11. BIOREFINERY AND BIOFUEL PROJECT GRANTS.

    (a) Definition of Chesapeake Bay Watershed State.--Section 9001 of 
the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8101) is 
amended--
            (1) by redesignating paragraphs (4) through (7) as 
        paragraphs (5) through (8), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Chesapeake bay watershed state.--The term `Chesapeake 
        Bay Watershed States' means each of the States of Delaware, 
        Maryland, New York, Pennsylvania, Virginia, and West Virginia 
        and the District of Columbia.''.
    (b) Assistance Methods.--Section 9003 of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 8103) is amended by striking 
subsection (c) and inserting the following:
    ``(c) Assistance.--
            ``(1) Grants.--The Secretary shall award grants and make 
        loans and loan guarantees to eligible entities to assist in 
        covering the cost of development and construction of 
        biorefineries to carry out projects to demonstrate the 
        commercial viability of 1 or more processes for converting 
        biomass to fuels or chemicals.
            ``(2) Projects for chesapeake bay watershed states.--In the 
        case of a project to be operated in 1 or more of the Chesapeake 
        Bay Watershed States, the Secretary shall award grants under 
        this subsection for the purpose of developing and promoting the 
        commercial viability of--
                    ``(A) no-till soybean biodiesel production;
                    ``(B) cellulosic ethanol production;
                    ``(C) manure-to-energy processes and technologies; 
                and
                    ``(D) other technologies that promote the 
                conversion of biomass to fuels and chemicals and the 
                reduction of nutrient impacts to water quality.''.
    (c) Environmental Goals; Distribution of Grants.--Section 9003(e) 
of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
8103(e)) is amended--
            (1) in paragraph (2)(A)--
                    (A) in clause (i), by striking ``and'' at the end;
                    (B) by redesignating clause (ii) as clause (iii); 
                and
                    (C) by inserting after clause (i) the following:
                            ``(ii) shall select projects based on the 
                        extent to which the projects meet environmental 
                        goals for feedstocks and refineries developed 
                        by the Secretary, in consultation with the 
                        Secretary of the Interior, the Secretary of 
                        Energy, the Administrator of the Environmental 
                        Protection Agency, and the National Academy of 
                        Sciences, taking into consideration clean water 
                        and air goals; and''.
            (2) by adding at the end the following:
            ``(3) Funds for chesapeake bay watershed states.--The 
        Secretary shall ensure that not less than 15 percent of the 
        total funds available under this section are provided to 
        projects operated in Chesapeake Bay Watershed States that 
        benefit the Chesapeake Bay watershed.''.
    (d) Funding.--Section 9003 of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 8103) is amended by striking 
subsection (h) and inserting the following:
    ``(h) Funding.--Of the funds of the Commodity Credit Corporation, 
the Secretary shall use to carry out this section $100,000,000 for each 
of fiscal years 2008 through 2013.''.

SEC. 12. RENEWABLE ENERGY SYSTEMS AND ENERGY EFFICIENCY IMPROVEMENTS 
              PROGRAM.

    Section 9006 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8106) is amended--
            (1) in subsection (c)--
                    (A) in paragraph (2), by striking subparagraph (C) 
                and inserting the following:
                    ``(C) the expected environmental benefits of the 
                renewable energy system, including benefits to water 
                quality and to watersheds of bodies of water degraded 
                by agricultural nutrients;''; and
                    (B) by adding at the end the following:
            ``(3) Preference for community projects.--The Secretary 
        shall give preference in funding and grant and loan selection 
        under this section to activities that the Secretary 
        determines--
                    ``(A) are undertaken jointly by more than 1 
                eligible entity in a local community;
                    ``(B) involve direct cooperation between 2 or more 
                eligible entities; and
                    ``(C) foster community or cooperative approaches to 
                renewable energy and energy efficiency development.''; 
                and
            (2) by striking subsection (f) and inserting the following:
    ``(f) Production-Based Incentives in Lieu of Grants.--
            ``(1) In general.--In addition to the authority under 
        subsection (a), the Secretary may, on the request of an 
        applicant the Secretary determines is eligible under subsection 
        (b), make production-based payments to the applicant in lieu of 
        a grant.
            ``(2) Contingency.--The Secretary shall only make a payment 
        under paragraph (1) if the applicant provides the Secretary 
        with documentation showing energy production and sales from a 
        renewable energy system to a third party.
            ``(3) Limitation.--The total net present value of a 
        production-based incentive may not exceed the lesser of--
                    ``(A) 25 percent of the eligible project costs; and
                    ``(B) any other limit that the Secretary 
                establishes by regulation or guidance.
    ``(g) Distribution of Grants.--The Secretary shall ensure that not 
less than 15 percent of the grants, loans, and loan guarantees provided 
under this section are provided to projects in Chesapeake Bay Watershed 
States that benefit the Chesapeake Bay watershed.
    ``(h) Funding.--Of the funds of the Commodity Credit Corporation, 
the Secretary shall use to carry out this section, to remain available 
until expended--
            ``(1) $60,000,000 for fiscal year 2008;
            ``(2) $90,000,000 for fiscal year 2009;
            ``(3) $130,000,000 for fiscal year 2010;
            ``(4) $180,000,000 for fiscal year 2011; and
            ``(5) $250,000,000 for fiscal year 2012.''.
                                 <all>
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