H. R. 2491
One Hundred Fourth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the fourth day of January, one thousand nine hundred and ninety-five
An Act
To provide for reconciliation pursuant to section 105 of the concurrent resolution
on the budget for fiscal year 1996.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
Section 1. SHORT TITLE.
This Act may be cited as the ‘‘Balanced Budget Act of 1995’’.
Sec. 2. TABLE OF TITLES.
This Act is organized into titles as follows:
Title I—Agriculture and Related Provisions
Title II—Banking, Housing, and Related Provisions
Title III—Communication and Spectrum Allocation Provisions
Title IV—Education and Related Provisions
Title V—Energy and Natural Resources Provisions
Title VI—Federal Retirement and Related Provisions
Title VII—Medicaid
Title VIII—Medicare
Title IX—Transportation and Related Provisions
Title X—Veterans and Related Provision
Title XI—Revenues
Title XII—Teaching hospitals and graduate medical education; asset sales; welfare;
and other provisions
TITLE I—AGRICULTURE AND RELATED
PROVISIONS
SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This title may be cited as the ‘‘Agricultural
Reconciliation Act of 1995’’.
(b) TABLE OF CONTENTS.—The table of contents of this title
is as follows:
Sec. 1001. Short title; table of contents.
Subtitle A—Agricultural Market Transition Program
Sec. 1101. Short title.
Sec. 1102. Definitions.
Sec. 1103. Production flexibility contracts.
Sec. 1104. Nonrecourse marketing assistance loans and loan deficiency payments.
Sec. 1105. Payment limitations.
Sec. 1106. Peanut program.
Sec. 1107. Sugar program.
Sec. 1108. Administration.
Sec. 1109. Elimination of permanent price support authority.
Sec. 1110. Effect of amendments.
Subtitle B—Conservation
Sec. 1201. Conservation.
H. R. 2491—2
Subtitle C—Agricultural Promotion and Export Programs
Sec. 1301. Market promotion program.
Sec. 1302. Export enhancement program.
Subtitle D—Miscellaneous
Sec. 1401. Crop insurance.
Sec. 1402. Collection and use of agricultural quarantine and inspection fees.
Sec. 1403. Commodity Credit Corporation interest rate.
Subtitle A—Agricultural Market Transition
Program
SEC. 1101. SHORT TITLE.
This subtitle may be cited as the ‘‘Agricultural Market Transi-
tion Act’’.
SEC. 1102. DEFINITIONS.
In this subtitle:
(1) CONSIDERED PLANTED.—The term ‘‘considered planted’’
means acreage that is considered planted under title V of
the Agricultural Act of 1949 (7 U.S.C. 1461 et seq.) (as in
effect prior to the amendment made by section 1109(b)(2)).
(2) CONTRACT.—The term ‘‘contract’’ means a production
flexibility contract entered into under section 1103.
(3) CONTRACT
ACREAGE.—The term ‘‘contract acreage’’
means 1 or more crop acreage bases established for contract
commodities under title V of the Agricultural Act of 1949 (as
in effect prior to the amendment made by section 1109(b)(2)).
If a crop acreage base was not enrolled in an annual program
for the 1995 crop in order to increase crop acreage base, the
contract acreage for the 1996 crop shall reflect the increased
base acreage that would have been established under title
V of the Act (as so in effect).
(4) CONTRACT COMMODITY.—The term ‘‘contract commodity’’
means wheat, corn, grain sorghum, barley, oats, upland cotton,
and rice.
(5) CONTRACT
PAYMENT.—The term ‘‘contract payment’’
means a payment made under section 1103 pursuant to a
contract.
(6) FARM PROGRAM PAYMENT YIELD.—The term ‘‘farm pro-
gram payment yield’’ means the farm program payment yield
established for the 1995 crop of a contract commodity under
title V of the Agricultural Act of 1949 (as in effect prior to
the amendment made by section 1109(b)(2)).
(7) LOAN COMMODITY.—The term ‘‘loan commodity’’ means
each contract commodity, extra long staple cotton, and oilseeds.
(8) OILSEED.—The term ‘‘oilseed’’ means a crop of soybeans,
sunflower seed, rapeseed, canola, safflower, flaxseed, mustard
seed, or, if designated by the Secretary, other oilseeds.
(9) PROGRAM.—The term ‘‘program’’ means the agricultural
market transition program established under this subtitle.
(10) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of Agriculture.
SEC. 1103. PRODUCTION FLEXIBILITY CONTRACTS.
(a) CONTRACTS AUTHORIZED.—
(1) OFFER AND TERMS.—Beginning as soon as practicable
after the date of the enactment of this subtitle, the Secretary
H. R. 2491—3
shall offer to enter into a contract with an eligible owner
or operator described in paragraph (2) on a farm containing
eligible farmland. Under the terms of a contract, the owner
or operator shall agree, in exchange for annual contract pay-
ments, to comply with—
(A) the conservation plan for the farm prepared in
accordance with section 1212 of the Food Security Act
of 1985 (16 U.S.C. 3812);
(B) wetland protection requirements applicable to the
farm under subtitle C of title XII of the Act (16 U.S.C.
3821 et seq.); and
(C) the planting flexibility requirements of subsection
(j).
(2) ELIGIBLE OWNERS AND OPERATORS DESCRIBED.—The fol-
lowing persons shall be considered to be an owner or operator
eligible to enter into a contract:
(A) An owner of eligible farmland who assumes all
of the risk of producing a crop.
(B) An owner of eligible farmland who shares in the
risk of producing a crop.
(C) An operator of eligible farmland with a share-
rent lease of the eligible farmland, regardless of the length
of the lease, if the owner enters into the same contract.
(D) An operator of eligible farmland who cash rents
the eligible farmland under a lease expiring on or after
September 30, 2002, in which case the consent of the
owner is not required.
(E) An operator of eligible farmland who cash rents
the eligible farmland under a lease expiring before Septem-
ber 30, 2002, if the owner consents to the contract.
(F) An owner of eligible farmland who cash rents the
eligible farmland and the lease term expires before Septem-
ber 30, 2002, but only if the actual operator of the farm
declines to enter into a contract. In the case of an owner
covered by this subparagraph, contract payments shall not
begin under a contract until the fiscal year following the
fiscal year in which the lease held by the nonparticipating
operator expires.
(G) An owner or operator described in a preceding
subparagraph regardless of whether the owner or operator
purchased catastrophic risk protection for a fall-planted
1996 crop under section 508(b) of the Federal Crop Insur-
ance Act (7 U.S.C. 1508(b)).
(3) TENANTS AND SHARECROPPERS.—In carrying out this
section, the Secretary shall provide adequate safeguards to
protect the interests of operators who are tenants and share-
croppers.
(b) ELEMENTS.—
(1) TIME FOR CONTRACTING.—
(A) DEADLINE.—Except as provided in subparagraph
(B), the Secretary may not enter into a contract after
April 15, 1996.
(B) CONSERVATION RESERVE LANDS.—
(i) IN GENERAL.—At the beginning of each fiscal
year, the Secretary shall allow an eligible owner or
operator on a farm covered by a conservation reserve
contract entered into under section 1231 of the Food
H. R. 2491—4
Security Act of 1985 (16 U.S.C. 3831) that terminates
after the date specified in subparagraph (A) to enter
into or expand a production flexibility contract to cover
the contract acreage of the farm that was subject to
the former conservation reserve contract.
(ii) AMOUNT.—Contract payments made for con-
tract acreage under this subparagraph shall be made
at the rate and amount applicable to the annual con-
tract payment level for the applicable crop.
(2) DURATION OF CONTRACT.—
(A) BEGINNING DATE.—A contract shall begin with—
(i) the 1996 crop of a contract commodity; or
(ii) in the case of acreage that was subject to
a conservation reserve contract described in paragraph
(1)(B), the date the production flexibility contract was
entered into or expanded to cover the acreage.
(B) ENDING DATE.—A contract shall extend through
the 2002 crop.
(3) ESTIMATION OF CONTRACT PAYMENTS.—At the time the
Secretary enters into a contract, the Secretary shall provide
an estimate of the minimum contract payments anticipated
to be made during at least the first fiscal year for which
contract payments will be made.
(c) ELIGIBLE FARMLAND DESCRIBED.—Land shall be considered
to be farmland eligible for coverage under a contract only if the
land has contract acreage attributable to the land and—
(1) for at least 1 of the 1991 through 1995 crops, at least
a portion of the land was enrolled in the acreage reduction
program authorized for a crop of a contract commodity under
section 101B, 103B, 105B, or 107B of the Agricultural Act
of 1949 (as in effect prior to the amendment made by section
1109(b)(2)) or was considered planted;
(2) was subject to a conservation reserve contract under
section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831)
whose term expired, or was voluntarily terminated, on or after
January 1, 1995; or
(3) is released from coverage under a conservation reserve
contract by the Secretary during the period beginning on Janu-
ary 1, 1995, and ending on the date specified in subsection
(b)(1)(A).
(d) TIME FOR PAYMENT.—
(1) IN
GENERAL.—An annual contract payment shall be
made not later than September 30 of each of fiscal years 1996
through 2002.
(2) ADVANCE PAYMENTS.—
(A) FISCAL
YEAR
1996.—At the option of the owner
or operator, 50 percent of the contract payment for fiscal
year 1996 shall be made not later than 60 days after
the date on which the owner or operator enters into a
contract.
(B) SUBSEQUENT FISCAL YEARS.—At the option of the
owner or operator for fiscal year 1997 and each subsequent
fiscal year, 50 percent of the annual contract payment
shall be made on December 15.
(e) AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS FOR EACH
FISCAL YEAR.—
H. R. 2491—5
(1) IN GENERAL.—The Secretary shall expend on a fiscal
year basis the following amounts to satisfy the obligations
of the Secretary under all contracts:
(A) For fiscal year 1996, $5,570,000,000.
(B) For fiscal year 1997, $5,385,000,000.
(C) For fiscal year 1998, $5,800,000,000.
(D) For fiscal year 1999, $5,603,000,000.
(E) For fiscal year 2000, $5,130,000,000.
(F) For fiscal year 2001, $4,130,000,000.
(G) For fiscal year 2002, $4,008,000,000.
(2) ALLOCATION.—The amount made available for a fiscal
year under paragraph (1) shall be allocated as follows:
(A) For wheat, 26.26 percent.
(B) For corn, 46.22 percent.
(C) For grain sorghum, 5.11 percent.
(D) For barley, 2.16 percent.
(E) For oats, 0.15 percent.
(F) For upland cotton, 11.63 percent.
(G) For rice, 8.47 percent.
(3) ADJUSTMENT.—The Secretary shall adjust the amounts
allocated for each contract commodity under paragraph (2) for
a particular fiscal year by—
(A) subtracting an amount equal to the amount, if
any, necessary to satisfy payment requirements under sec-
tions 101B, 103B, 105B, and 107B of the Agricultural Act
of 1949 (as in effect prior to the amendment made by
section 1109(b)(2)) for the 1994 and 1995 crops of the
commodity;
(B) adding an amount equal to the sum of all producer
repayments of deficiency payments received under section
114(a)(2) of the Act (as so in effect) for the commodity;
(C) adding an amount equal to the sum of all contract
payments withheld by the Secretary, at the request of
producers, during the preceding fiscal year as an offset
against producer repayments of deficiency payments other-
wise required under section 114(a)(2) of the Act (as so
in effect) for the commodity; and
(D) adding an amount equal to the sum of all refunds
of contract payments received during the preceding fiscal
year under subsection (h) for the commodity.
(f) DETERMINATION OF CONTRACT PAYMENTS.—
(1) INDIVIDUAL PAYMENT QUANTITY OF CONTRACT COMMOD-
ITIES.—For each contract, the payment quantity of a contract
commodity for each fiscal year shall be equal to the product
of—
(A) 85 percent of the contract acreage; and
(B) the farm program payment yield.
(2) ANNUAL
PAYMENT
QUANTITY
OF
CONTRACT
COMMOD-
ITIES.—The payment quantity of each contract commodity cov-
ered by all contracts for each fiscal year shall equal the sum
of the amounts calculated under paragraph (1) for each individ-
ual contract.
(3) ANNUAL PAYMENT RATE.—The payment rate for a con-
tract commodity for each fiscal year shall be equal to—
(A) the amount made available under subsection (e)
for the contract commodity for the fiscal year; divided by
H. R. 2491—6
(B) the amount determined under paragraph (2) for
the fiscal year.
(4) ANNUAL PAYMENT AMOUNT.—The amount to be paid
under a contract in effect for each fiscal year with respect
to a contract commodity shall be equal to the product of—
(A) the payment quantity determined under paragraph
(1) with respect to the contract; and
(B) the payment rate in effect under paragraph (3).
(5) ASSIGNMENT OF CONTRACT PAYMENTS.—The provisions
of section 8(g) of the Soil Conservation and Domestic Allotment
Act (16 U.S.C. 590h(g)) (relating to assignment of payments)
shall apply to contract payments under this subsection. The
owner or operator making the assignment, or the assignee,
shall provide the Secretary with notice, in such manner as
the Secretary may require in the contract, of any assignment
made under this paragraph.
(6) SHARING OF CONTRACT PAYMENTS.—The Secretary shall
provide for the sharing of contract payments among the owners
and operators subject to the contract on a fair and equitable
basis.
(g) PAYMENT LIMITATION.—The total amount of contract pay-
ments made to a person under a contract during any fiscal year
may not exceed the payment limitations established under section
1105.
(h) EFFECT OF VIOLATION.—
(1) TERMINATION
OF
CONTRACT.—Except as provided in
paragraph (2), if an owner or operator subject to a contract
violates the conservation plan for the farm containing eligible
farmland under the contract, wetland protection requirements
applicable to the farm, or the planting flexibility requirements
of subsection (j), the Secretary shall terminate the contract
with respect to the owner or operator. On the termination,
the owner or operator shall forfeit all rights to receive future
contract payments and shall refund to the Secretary all contract
payments received by the owner or operator during the period
of the violation, together with interest on the contract payments
as determined by the Secretary.
(2) REFUND OR ADJUSTMENT.—If the Secretary determines
that a violation does not warrant termination of the contract
under paragraph (1), the Secretary may require the owner
or operator subject to the contract—
(A) to refund to the Secretary that part of the contract
payments received by the owner or operator during the
period of the violation, together with interest on the con-
tract payments as determined by the Secretary; or
(B) to accept a reduction in the amount of future con-
tract payments that is proportionate to the severity of
the violation, as determined by the Secretary.
(3) FORECLOSURE.—An owner or operator subject to a con-
tract may not be required to make repayments to the Secretary
of amounts received under the contract if the contract acreage
has been foreclosed on and the Secretary determines that forgiv-
ing the repayments is appropriate in order to provide fair
and equitable treatment. This paragraph shall not void the
responsibilities of such an owner or operator under the contract
if the owner or operator continues or resumes operation, or
control, of the contract acreage. On the resumption of operation
H. R. 2491—7
or control over the contract acreage by the owner or operator,
the provisions of the contract in effect on the date of the
foreclosure shall apply.
(4) REVIEW.—A determination of the Secretary under this
subsection shall be considered to be an adverse decision for
purposes of the availability of administrative review of the
determination.
(i) TRANSFER OF INTEREST IN LANDS SUBJECT TO CONTRACT.—
(1) EFFECT OF TRANSFER.—Except as provided in paragraph
(2), the transfer by an owner or operator subject to a contract
of the right and interest of the owner or operator in the contract
acreage shall result in the termination of the contract with
respect to the acreage, effective on the date of the transfer,
unless the transferee of the acreage agrees with the Secretary
to assume all obligations of the contract. At the request of
the transferee, the Secretary may modify the contract if the
modifications are consistent with the objectives of this section
as determined by the Secretary.
(2) EXCEPTION.—If an owner or operator who is entitled
to a contract payment dies, becomes incompetent, or is other-
wise unable to receive the contract payment, the Secretary
shall make the payment, in accordance with regulations pre-
scribed by the Secretary.
(j) PLANTING FLEXIBILITY.—
(1) PERMITTED CROPS.—Subject to paragraph (2)(A), any
commodity or crop may be planted on contract acreage.
(2) LIMITATIONS.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), the planting of any fruit or vegetable, and unlimited
haying and grazing, shall be permitted on not more than
15 percent of the contract acreage.
(B) EXCEPTION.—Subparagraph (A) shall not apply to
the planting of contract commodities, lentils, mung beans,
and dry peas on contract acreage.
(3) ALFALFA.—The planting of alfalfa on contract acreage
is unlimited, except that the quantity of acreage on which
the contract payment of the owner or operator would otherwise
be based shall be reduced for each acre planted to alfalfa
in excess of the limitation in effect under paragraph (2)(A)
for the contract.
(4) HAYING AND GRAZING.—Subject to paragraphs (2) and
(3), haying and grazing of contract acreage shall be permitted,
except during any consecutive 5-month period that is estab-
lished by the State committee established under section 8(b)
of the Soil Conservation and Domestic Allotment Act (16 U.S.C.
590h(b)) for a State. The 5-month period shall be established
during the period beginning April 1, and ending October 31,
of a year. In the case of a natural disaster, the Secretary
may permit unlimited haying and grazing on the contract acre-
age.
SEC. 1104. NONRECOURSE MARKETING ASSISTANCE LOANS AND LOAN
DEFICIENCY PAYMENTS.
(a) AVAILABILITY OF NONRECOURSE LOANS.—
(1) AVAILABILITY.—For each of the 1996 through 2002 crops
of each loan commodity, the Secretary shall make available
to producers on a farm nonrecourse marketing assistance loans
H. R. 2491—8
for loan commodities produced on the farm. The loans shall
be made under terms and conditions that are prescribed by
the Secretary and at the loan rate established under subsection
(b) for the loan commodity.
(2) ELIGIBLE PRODUCTION.—The following production shall
be eligible for a marketing assistance loan under this section:
(A) In the case of a marketing assistance loan for
a contract commodity, any production by a producer who
has entered into a production flexibility contract.
(B) In the case of a marketing assistance loan for
extra long staple cotton and oilseeds, any production.
(b) LOAN RATES.—
(1) WHEAT.—
(A) LOAN RATE.—Subject to subparagraph (B), the loan
rate for a marketing assistance loan for wheat shall be—
(i) not less than 85 percent of the simple average
price received by producers of wheat, as determined
by the Secretary, during the marketing years for the
immediately preceding 5 crops of wheat, excluding the
year in which the average price was the highest and
the year in which the average price was the lowest
in the period; but
(ii) not more than $2.58 per bushel.
(B) STOCKS TO USE RATIO ADJUSTMENT.—If the Sec-
retary estimates for any marketing year that the ratio
of ending stocks of wheat to total use for the marketing
year will be—
(i) equal to or greater than 30 percent, the Sec-
retary may reduce the loan rate for wheat for the
corresponding crop by an amount not to exceed 10
percent in any year;
(ii) less than 30 percent but not less than 15 per-
cent, the Secretary may reduce the loan rate for wheat
for the corresponding crop by an amount not to exceed
5 percent in any year; or
(iii) less than 15 percent, the Secretary may not
reduce the loan rate for wheat for the corresponding
crop.
(C) NO EFFECT ON FUTURE YEARS.—Any reduction in
the loan rate for wheat under subparagraph (B) shall not
be considered in determining the loan rate for wheat for
subsequent years.
(2) FEED GRAINS.—
(A) LOAN RATE FOR CORN.—Subject to subparagraph
(B), the loan rate for a marketing assistance loan for corn
shall be—
(i) not less than 85 percent of the simple average
price received by producers of corn, as determined by
the Secretary, during the marketing years for the
immediately preceding 5 crops of corn, excluding the
year in which the average price was the highest and
the year in which the average price was the lowest
in the period; but
(ii) not more than $1.89 per bushel.
(B) STOCKS TO USE RATIO ADJUSTMENT.—If the Sec-
retary estimates for any marketing year that the ratio
H. R. 2491—9
of ending stocks of corn to total use for the marketing
year will be—
(i) equal to or greater than 25 percent, the Sec-
retary may reduce the loan rate for corn for the cor-
responding crop by an amount not to exceed 10 percent
in any year;
(ii) less than 25 percent but not less than 12.5
percent, the Secretary may reduce the loan rate for
corn for the corresponding crop by an amount not
to exceed 5 percent in any year; or
(iii) less than 12.5 percent the Secretary may not
reduce the loan rate for corn for the corresponding
crop.
(C) NO EFFECT ON FUTURE YEARS.—Any reduction in
the loan rate for corn under subparagraph (B) shall not
be considered in determining the loan rate for corn for
subsequent years.
(D) OTHER FEED GRAINS.—The loan rate for a market-
ing assistance loan for grain sorghum, barley, and oats,
respectively, shall be established at such level as the Sec-
retary determines is fair and reasonable in relation to
the rate that loans are made available for corn, taking
into consideration the feeding value of the commodity in
relation to corn.
(3) UPLAND COTTON.—
(A) LOAN RATE.—Subject to subparagraph (B), the loan
rate for a marketing assistance loan for upland cotton
shall be established by the Secretary at such loan rate,
per pound, as will reflect for the base quality of upland
cotton, as determined by the Secretary, at average locations
in the United States a rate that is not less than the
smaller of—
(i) 85 percent of the average price (weighted by
market and month) of the base quality of cotton as
quoted in the designated United States spot markets
during 3 years of the 5-year period ending July 31
in the year in which the loan rate is announced, exclud-
ing the year in which the average price was the highest
and the year in which the average price was the lowest
in the period; or
(ii) 90 percent of the average, for the 15-week
period beginning July 1 of the year in which the loan
rate is announced, of the 5 lowest-priced growths of
the growths quoted for Middling 13⁄32-inch cotton C.I.F.
Northern Europe (adjusted downward by the average
difference during the period April 15 through October
15 of the year in which the loan is announced between
the average Northern European price quotation of such
quality of cotton and the market quotations in the
designated United States spot markets for the base
quality of upland cotton), as determined by the Sec-
retary.
(B) LIMITATIONS.—The loan rate for a marketing assist-
ance loan for upland cotton shall not be less than $0.50
per pound or more than $0.5192 per pound.
H. R. 2491—10
(4) EXTRA
LONG
STAPLE
COTTON.—The loan rate for a
marketing assistance loan for extra long staple cotton shall
be—
(A) not less than 85 percent of the simple average
price received by producers of extra long staple cotton,
as determined by the Secretary, during 3 years of the
5 previous marketing years, excluding the year in which
the average price was the highest and the year in which
the average price was the lowest in the period; but
(B) not more than $0.7965 per pound.
(5) RICE.—The loan rate for a marketing assistance loan
for rice shall be $6.50 per hundredweight.
(6) OILSEEDS.—
(A) SOYBEANS.—The loan rate for a marketing assist-
ance loan for soybeans shall be $4.92 per bushel.
(B) SUNFLOWER SEED, CANOLA, RAPESEED, SAFFLOWER,
MUSTARD
SEED, AND
FLAXSEED.—The loan rates for a
marketing assistance loan for sunflower seed, canola,
rapeseed, safflower, mustard seed, and flaxseed, individ-
ually, shall be $0.087 per pound.
(C) OTHER OILSEEDS.—The loan rates for a marketing
assistance loan for other oilseeds shall be established at
such level as the Secretary determines is fair and reason-
able in relation to the loan rate available for soybeans,
except in no event shall the rate for the oilseeds (other
than cottonseed) be less than the rate established for soy-
beans on a per-pound basis for the same crop.
(c) TERM OF LOAN.—In the case of each loan commodity (other
than upland cotton or extra long staple cotton), a marketing assist-
ance loan under subsection (a) shall have a term of 9 months
beginning on the first day of the first month after the month
in which the loan is made. A marketing assistance loan for upland
cotton or extra long staple cotton shall have a term of 10 months.
The Secretary may not extend the term of a marketing assistance
loan for any loan commodity.
(d) REPAYMENT.—
(1) REPAYMENT
RATES
GENERALLY.—The Secretary shall
permit producers to repay a marketing assistance loan under
subsection (a) for a loan commodity (other than extra long
staple cotton) at a level that is the lesser of—
(A) the loan rate established for the commodity under
subsection (b); or
(B) the prevailing world market price for the commod-
ity (adjusted to United States quality and location), as
determined by the Secretary.
(2) REPAYMENT RATES FOR EXTRA LONG STAPLE COTTON.—
Repayment of a marketing assistance loan for extra long staple
cotton shall be at the loan rate established for the commodity
under subsection (b).
(3) PREVAILING
WORLD
MARKET
PRICE.—For purposes of
paragraph (1)(B) and subsection (f), the Secretary shall pre-
scribe by regulation—
(A) a formula to determine the prevailing world market
price for each loan commodity, adjusted to United States
quality and location; and
H. R. 2491—11
(B) a mechanism by which the Secretary shall
announce periodically the prevailing world market price
for each loan commodity.
(4) ADJUSTMENT OF PREVAILING WORLD MARKET PRICE FOR
UPLAND COTTON.—
(A) IN GENERAL.—During the period ending July 31,
2003, the prevailing world market price for upland cotton
(adjusted to United States quality and location) established
under paragraph (3) shall be further adjusted if—
(i) the adjusted prevailing world market price is
less than 115 percent of the loan rate for upland cotton
established under subsection (b), as determined by the
Secretary; and
(ii) the Friday through Thursday average price
quotation for the lowest-priced United States growth
as quoted for Middling (M) 13⁄32-inch cotton delivered
C.I.F. Northern Europe is greater than the Friday
through Thursday average price of the 5 lowest-priced
growths of upland cotton, as quoted for Middling (M)
13⁄32-inch cotton, delivered C.I.F. Northern Europe
(referred to in this subsection as the ‘‘Northern Europe
price’’).
(B) FURTHER
ADJUSTMENT.—Except as provided in
subparagraph (C), the adjusted prevailing world market
price for upland cotton shall be further adjusted on the
basis of some or all of the following data, as available:
(i) The United States share of world exports.
(ii) The current level of cotton export sales and
cotton export shipments.
(iii) Other data determined by the Secretary to
be relevant in establishing an accurate prevailing
world market price for upland cotton (adjusted to
United States quality and location).
(C) LIMITATION ON FURTHER ADJUSTMENT.—The adjust-
ment under subparagraph (B) may not exceed the difference
between—
(i) the Friday through Thursday average price for
the lowest-priced United States growth as quoted for
Middling 13⁄32-inch cotton delivered C.I.F. Northern
Europe; and
(ii) the Northern Europe price.
(e) LOAN DEFICIENCY PAYMENTS.—
(1) AVAILABILITY.—Except as provided in paragraph (4),
the Secretary may make loan deficiency payments available
to producers who, although eligible to obtain a marketing assist-
ance loan under subsection (a) with respect to a loan commodity,
agree to forgo obtaining the loan for the commodity in return
for payments under this subsection.
(2) COMPUTATION.—A loan deficiency payment under this
subsection shall be computed by multiplying—
(A) the loan payment rate determined under paragraph
(3) for the loan commodity; by
(B) the quantity of the loan commodity that the produc-
ers on a farm are eligible to place under loan but for
which the producers forgo obtaining the loan in return
for payments under this subsection.
H. R. 2491—12
(3) LOAN PAYMENT RATE.—For purposes of this subsection,
the loan payment rate shall be the amount by which—
(A) the loan rate established under subsection (b) for
the loan commodity; exceeds
(B) the rate at which a loan for the commodity may
be repaid under subsection (d).
(4) EXCEPTION FOR EXTRA LONG STAPLE COTTON.—This sub-
section shall not apply with respect to extra long staple cotton.
(f) SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COT-
TON.—
(1) FIRST HANDLER MARKETING CERTIFICATES.—
(A) IN GENERAL.—During the period ending on July
31, 2003, if the repayment rates provided in subsection
(d) for upland cotton or the availability of loan deficiency
payments for upland cotton under subsection (e) fails to
make United States upland cotton fully competitive in
world markets and the prevailing world market price of
upland cotton (adjusted to United States quality and loca-
tion) is below the current loan repayment rate for upland
cotton, to make United States upland cotton competitive
in world markets and to maintain and expand domestic
consumption and exports of upland cotton produced in the
United States, the Secretary shall provide for the issuance
of marketing certificates or cash payments in accordance
with this paragraph.
(B) PAYMENTS.—The Commodity Credit Corporation,
under such regulations as the Secretary may prescribe,
shall make payments, through the issuance of marketing
certificates or cash payments, to first handlers of upland
cotton (persons regularly engaged in buying or selling
upland cotton) who have entered into an agreement with
the Commodity Credit Corporation to participate in the
program established under this paragraph. The payments
shall be made in such amounts and subject to such terms
and conditions as the Secretary determines will make
upland cotton produced in the United States available at
competitive prices, consistent with the purposes of this
paragraph.
(C) VALUE.—The value of each certificate or cash pay-
ment issued under subparagraph (B) shall be based on
the difference between—
(i) the loan repayment rate for upland cotton; and
(ii) the prevailing world market price of upland
cotton (adjusted to United States quality and location),
as determined by the Secretary.
(D) REDEMPTION, MARKETING, OR
EXCHANGE.—The
Commodity Credit Corporation, under regulations pre-
scribed by the Secretary, may assist any person receiving
marketing certificates under this paragraph in the redemp-
tion of certificates for cash, or marketing or exchange of
the certificates for agricultural commodities or products
owned by the Commodity Credit Corporation, at such times,
in such manner, and at such price levels as the Secretary
determines will best effectuate the purposes of the program
established under this paragraph. Any price restrictions
that may otherwise apply to the disposition of agricultural
commodities by the Commodity Credit Corporation shall
H. R. 2491—13
not apply to the redemption of certificates under this para-
graph.
(E) DESIGNATION
OF
COMMODITIES
AND
PRODUCTS;
CHARGES.—Insofar as practicable, the Secretary shall per-
mit owners of certificates to designate the commodities
and products, including storage sites, the owners would
prefer to receive in exchange for certificates. If any certifi-
cate is not presented for redemption, marketing, or
exchange within a reasonable number of days after the
issuance of the certificate (as determined by the Secretary),
reasonable costs of storage and other carrying charges,
as determined by the Secretary, shall be deducted from
the value of the certificate for the period beginning after
the reasonable number of days and ending with the date
of the presentation of the certificate to the Commodity
Credit Corporation.
(F) DISPLACEMENT.—The Secretary shall take such
measures as may be necessary to prevent the marketing
or exchange of agricultural commodities and products for
certificates under this subsection from adversely affecting
the income of producers of the commodities or products.
(G) TRANSFERS.—Under regulations prescribed by the
Secretary, certificates issued to cotton handlers under this
paragraph may be transferred to other handlers and per-
sons approved by the Secretary.
(2) COTTON USER MARKETING CERTIFICATES.—
(A) ISSUANCE.—Subject to subparagraph (D), during
the period ending July 31, 2003, the Secretary shall issue
marketing certificates or cash payments to domestic users
and exporters for documented purchases by domestic users
and sales for export by exporters made in the week follow-
ing a consecutive 4-week period in which—
(i) the Friday through Thursday average price
quotation for the lowest-priced United States growth,
as quoted for Middling (M) 13⁄32-inch cotton, delivered
C.I.F. Northern Europe exceeds the Northern Europe
price by more than 1.25 cents per pound; and
(ii) the prevailing world market price for upland
cotton (adjusted to United States quality and location)
does not exceed 130 percent of the loan rate for upland
cotton established under subsection (b).
(B) VALUE OF CERTIFICATES OR PAYMENTS.—The value
of the marketing certificates or cash payments shall be
based on the amount of the difference (reduced by 1.25
cents per pound) in the prices during the 4th week of
the consecutive 4-week period multiplied by the quantity
of upland cotton included in the documented sales.
(C) ADMINISTRATION.—Subparagraphs (D) through (G)
of paragraph (1) shall apply to marketing certificates issued
under this paragraph. Any such certificates may be trans-
ferred to other persons in accordance with regulations
issued by the Secretary.
(D) EXCEPTION.—The Secretary shall not issue market-
ing certificates or cash payments under subparagraph (A)
if, for the immediately preceding consecutive 10-week
period, the Friday through Thursday average price
quotation for the lowest priced United States growth, as
H. R. 2491—14
quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F.
Northern Europe, adjusted for the value of any certificate
issued under this paragraph, exceeds the Northern Europe
price by more than 1.25 cents per pound.
(E) LIMITATION ON EXPENDITURES.—Total expenditures
under this paragraph shall not exceed $701,000,000 during
fiscal years 1996 through 2002.
(3) SPECIAL IMPORT QUOTA.—
(A) ESTABLISHMENT.—The President shall carry out
an import quota program that provides that, during the
period ending July 31, 2003, whenever the Secretary deter-
mines and announces that for any consecutive 10-week
period, the Friday through Thursday average price
quotation for the lowest-priced United States growth, as
quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F.
Northern Europe, adjusted for the value of any certificates
issued under paragraph (2), exceeds the Northern Europe
price by more than 1.25 cents per pound, there shall imme-
diately be in effect a special import quota.
(B) QUANTITY.—The quota shall be equal to 1 week’s
consumption of upland cotton by domestic mills at the
seasonally adjusted average rate of the most recent 3
months for which data are available.
(C) APPLICATION.—The quota shall apply to upland
cotton purchased not later than 90 days after the date
of the Secretary’s announcement under subparagraph (A)
and entered into the United States not later than 180
days after the date.
(D) OVERLAP.—A special quota period may be estab-
lished that overlaps any existing quota period if required
by subparagraph (A), except that a special quota period
may not be established under this paragraph if a quota
period has been established under subsection (g).
(E) PREFERENTIAL TARIFF TREATMENT.—The quantity
under a special import quota shall be considered to be
an in-quota quantity for purposes of—
(i) section 213(d) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2703(d));
(ii) section 204 of the Andean Trade Preference
Act (19 U.S.C. 3203);
(iii) section 503(d) of the Trade Act of 1974 (19
U.S.C. 2463(d)); and
(iv) General Note 3(a)(iv) to the Harmonized Tariff
Schedule.
(F) DEFINITION.—In this paragraph, the term ‘‘special
import quota’’ means a quantity of imports that is not
subject to the over-quota tariff rate of a tariff-rate quota.
(g) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND COTTON.—
(1) IN GENERAL.—The President shall carry out an import
quota program that provides that whenever the Secretary deter-
mines and announces that the average price of the base quality
of upland cotton, as determined by the Secretary, in the des-
ignated spot markets for a month exceeded 130 percent of
the average price of such quality of cotton in the markets
for the preceding 36 months, notwithstanding any other provi-
sion of law, there shall immediately be in effect a limited
global import quota subject to the following conditions:
H. R. 2491—15
(A) QUANTITY.—The quantity of the quota shall be
equal to 21 days of domestic mill consumption of upland
cotton at the seasonally adjusted average rate of the most
recent 3 months for which data are available.
(B) QUANTITY IF PRIOR QUOTA.—If a quota has been
established under this subsection during the preceding 12
months, the quantity of the quota next established under
this subsection shall be the smaller of 21 days of domestic
mill consumption calculated under subparagraph (A) or
the quantity required to increase the supply to 130 percent
of the demand.
(C) PREFERENTIAL TARIFF TREATMENT.—The quantity
under a limited global import quota shall be considered
to be an in-quota quantity for purposes of—
(i) section 213(d) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2703(d));
(ii) section 204 of the Andean Trade Preference
Act (19 U.S.C. 3203);
(iii) section 503(d) of the Trade Act of 1974 (19
U.S.C. 2463(d)); and
(iv) General Note 3(a)(iv) to the Harmonized Tariff
Schedule.
(D) DEFINITIONS.—In this subsection:
(i) SUPPLY.—The term ‘‘supply’’ means, using the
latest official data of the Bureau of the Census, the
Department of Agriculture, and the Department of the
Treasury—
(I) the carry-over of upland cotton at the begin-
ning of the marketing year (adjusted to 480-pound
bales) in which the quota is established;
(II) production of the current crop; and
(III) imports to the latest date available during
the marketing year.
(ii) DEMAND.—The term ‘‘demand’’ means—
(I) the average seasonally adjusted annual rate
of domestic mill consumption in the most recent
3 months for which data are available; and
(II) the larger of—
(aa) average exports of upland cotton dur-
ing the preceding 6 marketing years; or
(bb) cumulative exports of upland cotton
plus outstanding export sales for the market-
ing year in which the quota is established.
(iii) LIMITED
GLOBAL
IMPORT
QUOTA.—The term
‘‘limited global import quota’’ means a quantity of
imports that is not subject to the over-quota tariff
rate of a tariff-rate quota.
(D) QUOTA ENTRY PERIOD.—When a quota is estab-
lished under this subsection, cotton may be entered under
the quota during the 90-day period beginning on the date
the quota is established by the Secretary.
(2) NO OVERLAP.—Notwithstanding paragraph (1), a quota
period may not be established that overlaps an existing quota
period or a special quota period established under subsection
(f)(3).
H. R. 2491—16
SEC. 1105. PAYMENT LIMITATIONS.
(a) LIMITATION ON PAYMENTS UNDER PRODUCTION FLEXIBILITY
CONTRACTS.—The total amount of contract payments made to a
person under 1 or more production flexibility contracts during any
fiscal year may not exceed $40,000.
(b) LIMITATION ON MARKETING LOAN GAINS AND LOAN DEFI-
CIENCY PAYMENTS.—
(1) LIMITATION.—The total amount of payments specified
in paragraph (2) that a person shall be entitled to receive
under section 1104 for contract commodities and oilseeds during
any fiscal year may not exceed $75,000.
(2) DESCRIPTION OF PAYMENTS.—The payments referred to
in paragraph (1) are the following:
(A) Any gain realized by a producer from repaying
a marketing assistance loan for a crop of any loan commod-
ity at a lower level than the original loan rate established
for the commodity under section 1104(b).
(B) Any loan deficiency payment received for a loan
commodity under section 1104(e).
(c) APPLICABILITY OF OTHER PROVISIONS REGARDING PAYMENT
LIMITATIONS.—Paragraphs (5), (6), and (7) of section 1001 and sec-
tions 1001A through 1001C of the Food Security Act of 1985 (7
U.S.C. 1308 et seq.) shall apply with respect to the application
of payment limitations under this section.
(d) CONFORMING AMENDMENTS.—Section 1001 of the Food Secu-
rity Act of 1985 (7 U.S.C. 1308) is amended by striking ‘‘1997’’
each place it appears in paragraphs (1)(A), (1)(B), and (2)(A) and
inserting ‘‘1995’’.
SEC. 1106. PEANUT PROGRAM.
(a) QUOTA PEANUTS.—
(1) AVAILABILITY
OF
LOANS.—The Secretary shall make
nonrecourse loans available to producers of quota peanuts.
(2) LOAN RATE.—The national average quota loan rate for
quota peanuts shall be $610 per ton.
(3) INSPECTION, HANDLING, OR STORAGE.—The loan amount
may not be reduced by the Secretary by any deductions for
inspection, handling, or storage.
(4) LOCATION
AND
OTHER
FACTORS.—The Secretary may
make adjustments in the loan rate for quota peanuts for loca-
tion of peanuts and such other factors as are authorized by
section 411 of the Agricultural Adjustment Act of 1938.
(b) ADDITIONAL PEANUTS.—
(1) IN GENERAL.—The Secretary shall make nonrecourse
loans available to producers of additional peanuts at such rates
as the Secretary finds appropriate, taking into consideration
the demand for peanut oil and peanut meal, expected prices
of other vegetable oils and protein meals, and the demand
for peanuts in foreign markets.
(2) ANNOUNCEMENT.—The Secretary shall announce the
loan rate for additional peanuts of each crop not later than
February 15 preceding the marketing year for the crop for
which the loan rate is being determined.
(c) AREA MARKETING ASSOCIATIONS.—
(1) WAREHOUSE STORAGE LOANS.—
(A) IN GENERAL.—In carrying out subsections (a) and
(b), the Secretary shall make warehouse storage loans
H. R. 2491—17
available in each of the producing areas (described in sec-
tion 1446.95 of title 7 of the Code of Federal Regulations
(January 1, 1989)) to a designated area marketing associa-
tion of peanut producers that is selected and approved
by the Secretary and that is operated primarily for the
purpose of conducting the loan activities. The Secretary
may not make warehouse storage loans available to any
cooperative that is engaged in operations or activities
concerning peanuts other than those operations and activi-
ties specified in this section and section 358e of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359a).
(B) ADMINISTRATIVE AND SUPERVISORY ACTIVITIES.—An
area marketing association shall be used in administrative
and supervisory activities relating to loans and marketing
activities under this section and section 358e of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359a).
(C) ASSOCIATION COSTS.—Loans made to the associa-
tion under this paragraph shall include such costs as the
area marketing association reasonably may incur in carry-
ing out the responsibilities, operations, and activities of
the association under this section and section 358e of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359a).
(2) POOLS FOR QUOTA AND ADDITIONAL PEANUTS.—
(A) IN GENERAL.—The Secretary shall require that each
area marketing association establish pools and maintain
complete and accurate records by area and segregation
for quota peanuts handled under loan and for additional
peanuts placed under loan, except that separate pools shall
be established for Valencia peanuts produced in New Mex-
ico. Bright hull and dark hull Valencia peanuts shall be
considered as separate types for the purpose of establishing
the pools.
(B) NET GAINS.—Net gains on peanuts in each pool,
unless otherwise approved by the Secretary, shall be
distributed only to producers who placed peanuts in the
pool and shall be distributed in proportion to the value
of the peanuts placed in the pool by each producer. Net
gains for peanuts in each pool shall consist of the following:
(i) QUOTA PEANUTS.—For quota peanuts, the net
gains over and above the loan indebtedness and other
costs or losses incurred on peanuts placed in the pool.
(ii) ADDITIONAL PEANUTS.—For additional peanuts,
the net gains over and above the loan indebtedness
and other costs or losses incurred on peanuts placed
in the pool for additional peanuts.
(d) LOSSES.—Losses in quota area pools shall be covered using
the following sources in the following order of priority:
(1) TRANSFERS FROM ADDITIONAL LOAN POOLS.—The pro-
ceeds due any producer from any pool shall be reduced by
the amount of any loss that is incurred with respect to peanuts
transferred from an additional loan pool to a quota loan pool
by the producer under section 358–1(b)(8) of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1358–1(b)(8)).
(2) OTHER PRODUCERS IN SAME POOL.—Further losses in
an area quota pool shall be offset by reducing the gain of
any producer in the pool by the amount of pool gains attributed
H. R. 2491—18
to the same producer from the sale of additional peanuts for
domestic and export edible use.
(3) USE OF MARKETING ASSESSMENTS.—The Secretary shall
use funds collected under subsection (g) (except funds attrib-
utable to handlers) to offset further losses in area quota pools.
The Secretary shall transfer to the Treasury those funds col-
lected under subsection (g) and available for use under this
subsection that the Secretary determines are not required to
cover losses in area quota pools.
(4) CROSS COMPLIANCE.—Further losses in area quota pools,
other than losses incurred as a result of transfers from addi-
tional loan pools to quota loan pools under section 358–1(b)(8)
of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–
1(b)(8)), shall be offset by any gains or profits from quota
pools in other production areas (other than separate type pools
established under subsection (c)(2)(A) for Valencia peanuts pro-
duced in New Mexico) in such manner as the Secretary shall
by regulation prescribe.
(5) INCREASED ASSESSMENTS.—If use of the authorities pro-
vided in the preceding paragraphs is not sufficient to cover
losses in an area quota pool, the Secretary shall increase the
marketing assessment established under subsection (g) by such
an amount as the Secretary considers necessary to cover the
losses. The increased assessment shall apply only to quota
peanuts in the production area covered by the pool. Amounts
collected under subsection (g) as a result of the increased assess-
ment shall be retained by the Secretary to cover losses in
that pool.
(e) DISAPPROVAL OF QUOTAS.—Notwithstanding any other provi-
sion of law, no loan for quota peanuts may be made available
by the Secretary for any crop of peanuts with respect to which
poundage quotas have been disapproved by producers, as provided
for in section 358–1(d) of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1358–1(d)).
(f) QUALITY IMPROVEMENT.—
(1) IN GENERAL.—With respect to peanuts under loan, the
Secretary shall—
(A) promote the crushing of peanuts at a greater risk
of deterioration before peanuts of a lesser risk of deteriora-
tion;
(B) ensure that all Commodity Credit Corporation
inventories of peanuts sold for domestic edible use must
be shown to have been officially inspected by licensed
Department of Agriculture inspectors both as farmer stock
and shelled or cleaned in-shell peanuts;
(C) continue to endeavor to operate the peanut program
so as to improve the quality of domestic peanuts and ensure
the coordination of activities under the Peanut Administra-
tive Committee established under Marketing Agreement
No. 146, regulating the quality of domestically produced
peanuts (under the Agricultural Adjustment Act (7 U.S.C.
601 et seq.), reenacted with amendments by the Agricul-
tural Marketing Agreement Act of 1937); and
(D) ensure that any changes made in the peanut pro-
gram as a result of this subsection requiring additional
production or handling at the farm level shall be reflected
H. R. 2491—19
as an upward adjustment in the Department of Agriculture
loan schedule.
(2) EXPORTS
AND
OTHER
PEANUTS.—The Secretary shall
require that all peanuts in the domestic and export markets
fully comply with all quality standards under Marketing Agree-
ment No. 146.
(g) MARKETING ASSESSMENT.—
(1) IN GENERAL.—The Secretary shall provide for a non-
refundable marketing assessment. The assessment shall be
made on a per pound basis in an amount equal to 1.1 percent
for each of the 1994 and 1995 crops, 1.15 percent for the
1996 crop, and 1.2 percent for each of the 1997 through 2002
crops, of the national average quota or additional peanut loan
rate for the applicable crop.
(2) FIRST PURCHASERS.—
(A) IN GENERAL.—Except as provided under paragraphs
(3) and (4), the first purchaser of peanuts shall—
(i) collect from the producer a marketing assess-
ment equal to the quantity of peanuts acquired multi-
plied by—
(I) in the case of each of the 1994 and 1995
crops, .55 percent of the applicable national aver-
age loan rate;
(II) in the case of the 1996 crop, .6 percent
of the applicable national average loan rate; and
(III) in the case of each of the 1997 through
2002 crops, .65 percent of the applicable national
average loan rate;
(ii) pay, in addition to the amount collected under
clause (i), a marketing assessment in an amount equal
to the quantity of peanuts acquired multiplied by .55
percent of the applicable national average loan rate;
and
(iii) remit the amounts required under clauses (i)
and (ii) to the Commodity Credit Corporation in a
manner specified by the Secretary.
(B) DEFINITION
OF
FIRST
PURCHASER.—In this sub-
section, the term ‘‘first purchaser’’ means a person acquir-
ing peanuts from a producer except that in the case of
peanuts forfeited by a producer to the Commodity Credit
Corporation, the term means the person acquiring the pea-
nuts from the Commodity Credit Corporation.
(3) OTHER PRIVATE MARKETINGS.—In the case of a private
marketing by a producer directly to a consumer through a
retail or wholesale outlet or in the case of a marketing by
the producer outside of the continental United States, the pro-
ducer shall be responsible for the full amount of the assessment
and shall remit the assessment by such time as is specified
by the Secretary.
(4) LOAN PEANUTS.—In the case of peanuts that are pledged
as collateral for a loan made under this section, 1⁄2 of the
assessment shall be deducted from the proceeds of the loan.
The remainder of the assessment shall be paid by the first
purchaser of the peanuts. For purposes of computing net gains
on peanuts under this section, the reduction in loan proceeds
shall be treated as having been paid to the producer.
H. R. 2491—20
(5) PENALTIES.—If any person fails to collect or remit the
reduction required by this subsection or fails to comply with
the requirements for recordkeeping or otherwise as are required
by the Secretary to carry out this subsection, the person shall
be liable to the Secretary for a civil penalty up to an amount
determined by multiplying—
(A) the quantity of peanuts involved in the violation;
by
(B) the national average quota peanut rate for the
applicable crop year.
(6) ENFORCEMENT.—The Secretary may enforce this sub-
section in the courts of the United States.
(h) CROPS.—Subsections (a) through (f) shall be effective only
for the 1996 through 2002 crops of peanuts.
(i) MARKETING QUOTAS.—
(1) IN GENERAL.—Part VI of subtitle B of title III of the
Agricultural Adjustment Act of 1938 is amended—
(A) in section 358–1 (7 U.S.C. 1358–1)—
(i) in the section heading, by striking ‘‘1991
THROUGH 1997 CROPS OF’’;
(ii) in subsections (a)(1), (b)(1)(B), (b)(2)(A),
(b)(2)(C), and (b)(3)(A), by striking ‘‘of the 1991 through
1997 marketing years’’ each place it appears and
inserting ‘‘marketing year’’;
(iii) in subsection (a)(3), by striking ‘‘1990’’ and
inserting ‘‘1990, for the 1991 through 1995 marketing
years, and 1995, for the 1996 through 2002 marketing
years’’;
(iv) in subsection (b)(1)(A)—
(I) by striking ‘‘each of the 1991 through 1997
marketing years’’ and inserting ‘‘each marketing
year’’; and
(II) in clause (i), by inserting before the semi-
colon the following: ‘‘, in the case of the 1991
through 1995 marketing years, and the 1995
marketing year, in the case of the 1996 through
2002 marketing years’’; and
(v) in subsection (f), by striking ‘‘1997’’ and insert-
ing ‘‘2002’’;
(B) in section 358b (7 U.S.C. 1358b)—
(i) in the section heading, by striking ‘‘1991
THROUGH 1995 CROPS OF’’; and
(ii) in subsection (c), by striking ‘‘1995’’ and insert-
ing ‘‘2002’’;
(C) in section 358c(d) (7 U.S.C. 1358c(d)), by striking
‘‘1995’’ and inserting ‘‘2002’’; and
(D) in section 358e (7 U.S.C. 1359a)—
(i) in the section heading, by striking ‘‘FOR 1991
THROUGH 1997 CROPS OF PEANUTS’’; and
(ii) in subsection (i), by striking ‘‘1997’’ and insert-
ing ‘‘2002’’.
(2) ELIMINATION OF QUOTA FLOOR.—Section 358–1(a)(1) of
the Act (7 U.S.C. 1358–1(a)(1)) is amended by striking the
second sentence.
(3) TEMPORARY QUOTA ALLOCATION.—Section 358–1 of the
Act (7 U.S.C. 1358–1) is amended—
H. R. 2491—21
(A) in subsection (a)(1), by striking ‘‘domestic edible,
seed,’’ and inserting ‘‘domestic edible use’’; and
(B) in subsection (b)(2)—
(i) in subparagraph (A), by striking ‘‘subparagraph
(B) and subject to’’; and
(ii) by striking subparagraph (B) and inserting
the following:
‘‘(B) TEMPORARY QUOTA ALLOCATION.—
‘‘(i) ALLOCATION RELATED TO SEED PEANUTS.—Tem-
porary allocation of quota pounds for the marketing
year only in which the crop is planted shall be made
to producers for each of the 1996 through 2002 market-
ing years as provided in this subparagraph.
‘‘(ii) QUANTITY.—The temporary quota allocation
shall be equal to the pounds of seed peanuts planted
on the farm, as may be adjusted under regulations
prescribed by the Secretary.
‘‘(iii) ADDITIONAL QUOTA.—The temporary alloca-
tion of quota pounds under this paragraph shall be
in addition to the farm poundage quota otherwise
established under this subsection and shall be credited,
for the applicable marketing year only, in total to
the producer of the peanuts on the farm in a manner
prescribed by the Secretary.
‘‘(iv) EFFECT OF OTHER REQUIREMENTS.—Nothing
in this section alters or changes the requirements
regarding the use of quota and additional peanuts
established by section 358e(b).’’.
(4) UNDERMARKETINGS.—Part VI of subtitle B of title III
of the Act is amended—
(A) in section 358–1(b) (7 U.S.C. 1358–1(b))—
(i) 
in 
paragraph 
(1)(B), 
by 
striking
‘‘including—’’ and clauses (i) and (ii) and inserting
‘‘including any increases resulting from the allocation
of quotas voluntarily released for 1 year under para-
graph (7).’’;
(ii) in paragraph (3)(B), by striking ‘‘include—’’
and clauses (i) and (ii) and inserting ‘‘include any
increase resulting from the allocation of quotas volun-
tarily released for 1 year under paragraph (7).’’; and
(iii) by striking paragraphs (8) and (9); and
(B) in section 358b(a) (7 U.S.C. 1358b(a))—
(i) in paragraph (1), by striking ‘‘(including any
applicable under marketings)’’ both places it appears;
(ii) 
in 
paragraph 
(1)(A), 
by 
striking 
‘‘of
undermarketings and’’;
(iii) in paragraph (2), by striking ‘‘(including any
applicable under marketings)’’; and
(iv) in paragraph (3), by striking ‘‘(including any
applicable undermarketings)’’.
(5) DISASTER TRANSFERS.—Section 358–1(b) of the Act (7
U.S.C. 1358–1(b)), as amended by paragraph (4)(A)(iii), is fur-
ther amended by adding at the end the following:
‘‘(8) DISASTER TRANSFERS.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), additional peanuts produced on a farm from which
the quota poundage was not harvested and marketed
H. R. 2491—22
because of drought, flood, or any other natural disaster,
or any other condition beyond the control of the producer,
may be transferred to the quota loan pool for pricing pur-
poses on such basis as the Secretary shall by regulation
provide.
‘‘(B) LIMITATION.—The poundage of peanuts transferred
under subparagraph (A) shall not exceed the difference
between—
‘‘(i) the total quantity of peanuts meeting quality
requirements for domestic edible use, as determined
by the Secretary, marketed from the farm; and
‘‘(ii) the total farm poundage quota, excluding
quota pounds transferred to the farm in the fall.
‘‘(C) SUPPORT RATE.—Peanuts transferred under this
paragraph shall be supported at not more than 70 percent
of the quota support rate for the marketing years in which
the transfers occur. The transfers for a farm shall not
exceed 25 percent of the total farm quota pounds, excluding
pounds transferred in the fall.’’.
SEC. 1107. SUGAR PROGRAM.
(a) SUGARCANE.—The Secretary shall make loans available to
processors of domestically grown sugarcane at a rate equal to 18
cents per pound for raw cane sugar.
(b) SUGAR BEETS.—The Secretary shall make loans available
to processors of domestically grown sugar beets at a rate equal
to 22.9 cents per pound for refined beet sugar.
(c) TERM OF LOANS.—
(1) IN GENERAL.—Loans under this section during any fiscal
year shall be made available not earlier than the beginning
of the fiscal year and shall mature at the earlier of—
(A) the end of 9 months; or
(B) the end of the fiscal year.
(2) SUPPLEMENTAL LOANS.—In the case of loans made under
this section in the last 3 months of a fiscal year, the processor
may repledge the sugar as collateral for a second loan in
the subsequent fiscal year, except that the second loan shall—
(A) be made at the loan rate in effect at the time
the second loan is made; and
(B) mature in 9 months less the quantity of time that
the first loan was in effect.
(d) LOAN TYPE; PROCESSOR ASSURANCES.—
(1) RECOURSE LOANS.—Subject to paragraph (2), the Sec-
retary shall carry out this section through the use of recourse
loans.
(2) NONRECOURSE LOANS.—During any fiscal year in which
the tariff rate quota for imports of sugar into the United States
is established at, or is increased to, a level in excess of 1,500,000
short tons raw value, the Secretary shall carry out this section
by making available nonrecourse loans. Any recourse loan pre-
viously made available by the Secretary under this section
during the fiscal year shall be changed by the Secretary into
a nonrecourse loan.
(3) PROCESSOR ASSURANCES.—If the Secretary is required
under paragraph (2) to make nonrecourse loans available dur-
ing a fiscal year or to change recourse loans into nonrecourse
loans, the Secretary shall obtain from each processor that
H. R. 2491—23
receives a loan under this section such assurances as the Sec-
retary considers adequate to ensure that the processor will
provide payments to producers that are proportional to the
value of the loan received by the processor for sugar beets
and sugarcane delivered by producers served by the processor.
The Secretary may establish appropriate minimum payments
for purposes of this paragraph.
(e) MARKETING ASSESSMENT.—
(1) SUGARCANE.—Effective for marketings of raw cane
sugar during the 1996 through 2003 fiscal years, the first
processor of sugarcane shall remit to the Commodity Credit
Corporation a nonrefundable marketing assessment in an
amount equal to—
(A) in the case of marketings during fiscal year 1996,
1.1 percent of the loan rate established under subsection
(a) per pound of raw cane sugar, processed by the processor
from domestically produced sugarcane or sugarcane molas-
ses, that has been marketed (including the transfer or
delivery of the sugar to a refinery for further processing
or marketing); and
(B) in the case of marketings during each of fiscal
years 1997 through 2003, 1.375 percent of the loan rate
established under subsection (a) per pound of raw cane
sugar, processed by the processor from domestically pro-
duced sugarcane or sugarcane molasses, that has been
marketed (including the transfer or delivery of the sugar
to a refinery for further processing or marketing).
(2) SUGAR BEETS.—Effective for marketings of beet sugar
during the 1996 through 2003 fiscal years, the first processor
of sugar beets shall remit to the Commodity Credit Corporation
a nonrefundable marketing assessment in an amount equal
to—
(A) in the case of marketings during fiscal year 1996,
1.1794 percent of the loan rate established under subsection
(a) per pound of beet sugar, processed by the processor
from domestically produced sugar beets or sugar beet
molasses, that has been marketed; and
(B) in the case of marketings during each of fiscal
years 1997 through 2003, 1.47425 percent of the loan rate
established under subsection (a) per pound of beet sugar,
processed by the processor from domestically produced
sugar beets or sugar beet molasses, that has been mar-
keted.
(3) COLLECTION.—
(A) TIMING.—A marketing assessment required under
this subsection shall be collected on a monthly basis and
shall be remitted to the Commodity Credit Corporation
not later than 30 days after the end of each month. Any
cane sugar or beet sugar processed during a fiscal year
that has not been marketed by September 30 of the year
shall be subject to assessment on that date. The sugar
shall not be subject to a second assessment at the time
that it is marketed.
(B) MANNER.—Subject to subparagraph (A), marketing
assessments shall be collected under this subsection in
the manner prescribed by the Secretary and shall be non-
refundable.
H. R. 2491—24
(4) PENALTIES.—If any person fails to remit the assessment
required by this subsection or fails to comply with such require-
ments for recordkeeping or otherwise as are required by the
Secretary to carry out this subsection, the person shall be
liable to the Secretary for a civil penalty up to an amount
determined by multiplying—
(A) the quantity of cane sugar or beet sugar involved
in the violation; by
(B) the loan rate for the applicable crop of sugarcane
or sugar beets.
(5) ENFORCEMENT.—The Secretary may enforce this sub-
section in a court of the United States.
(f) FORFEITURE PENALTY.—
(1) IN GENERAL.—A penalty shall be assessed on the forfeit-
ure of any sugar pledged as collateral for a nonrecourse loan
under this section.
(2) SUGARCANE.—The penalty for sugarcane shall be 1 cent
per pound.
(3) SUGAR BEETS.—The penalty for sugar beets shall bear
the same relation to the penalty for sugarcane as the marketing
assessment for sugar beets bears to the marketing assessment
for sugarcane.
(4) EFFECT OF FORFEITURE.—Any payments owed producers
by a processor that forfeits of any sugar pledged as collateral
for a nonrecourse loan shall be reduced in proportion to the
loan forfeiture penalty incurred by the processor.
(g) INFORMATION REPORTING.—
(1) DUTY
OF
PROCESSORS
AND
REFINERS
TO
REPORT.—A
sugarcane processor, cane sugar refiner, and sugar beet proc-
essor shall furnish the Secretary, on a monthly basis, such
information as the Secretary may require to administer sugar
programs, including the quantity of purchases of sugarcane,
sugar beets, and sugar, and production, importation, distribu-
tion, and stock levels of sugar.
(2) PENALTY.—Any person willfully failing or refusing to
furnish the information, or furnishing willfully any false
information, shall be subject to a civil penalty of not more
than $10,000 for each such violation.
(3) MONTHLY
REPORTS.—Taking into consideration the
information received under paragraph (1), the Secretary shall
publish on a monthly basis composite data on production,
imports, distribution, and stock levels of sugar.
(h) MARKETING ALLOTMENTS.—Part VII of subtitle B of title
III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa
et seq.) is repealed.
(i) CROPS.—This section (other than subsection (h)) shall be
effective only for the 1996 through 2002 crops of sugar beets and
sugarcane.
SEC. 1108. ADMINISTRATION.
(a) COMMODITY CREDIT CORPORATION.—
(1) USE OF CORPORATION.—The Secretary shall carry out
this subtitle through the Commodity Credit Corporation.
(2) SALARIES AND EXPENSES.—No funds of the Corporation
shall be used for any salary or expense of any officer or
employee of the Department of Agriculture in connection with
the administration of payments or loans under this subtitle.
H. R. 2491—25
(b) ADMINISTRATION.—Title IV of the Agricultural Adjustment
Act of 1938 (as added by section 1109) shall apply to the administra-
tion of this subtitle.
(c) REGULATIONS.—The Secretary may issue such regulations
as the Secretary determines necessary to carry out this subtitle.
SEC. 1109. ELIMINATION OF PERMANENT PRICE SUPPORT AUTHORITY.
(a) AGRICULTURAL ADJUSTMENT ACT OF 1938.—The Agricultural
Adjustment Act of 1938 is amended—
(1) in title III—
(A) in subtitle B—
(i) by striking parts II through V (7 U.S.C. 1326–
1351); and
(ii) in part VI, by striking sections 358, 358a, and
358d (7 U.S.C. 1358, 1358a, and 1359); and
(B) by striking subtitle D (7 U.S.C. 1379a–1379j); and
(2) by striking title IV (7 U.S.C. 1401–1407).
(b) AGRICULTURAL ACT OF 1949.—
(1) TRANSFER OF CERTAIN SECTIONS.—The Agricultural Act
of 1949 is amended—
(A) by transferring sections 106, 106A, and 106B (7
U.S.C. 1445, 1445–1, 1445–2) to appear after section 314A
of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1314–
1) and redesignating the transferred sections as sections
315, 315A, and 315B, respectively;
(B) by transferring sections 111, 201(c), and 204 (7
U.S.C. 1445f, 1446(c), 1446e) to appear after section 304
of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1304)
and redesignating the transferred sections as sections 305,
306, and 307, respectively;
(C) by transferring sections 403, 405, 407, 412, and
422 (7 U.S.C. 1423, 1425, 1427, 1429, 1431a) to appear
after section 393 (7 U.S.C. 1393) and redesignating the
transferred sections as sections 411, 412, 413, 414, and
415, respectively; and
(D) by transferring section 416 (7 U.S.C. 1431) to
appear after section 415 of the Agricultural Adjustment
Act of 1938 (as transferred and redesignated by subpara-
graph (C)).
(2) REPEAL.—The Agricultural Act of 1949 (7 U.S.C. 1421
et seq.) (as amended by paragraph (1)) is repealed.
(c) CONFORMING AMENDMENTS.—The Agricultural Adjustment
Act of 1938 is amended—
(1) in section 306 (as transferred and redesignated by sub-
section (b)(1)(B)), by striking ‘‘204’’ and inserting ‘‘307’’; and
(2) by striking section 411 (as transferred and redesignated
by subsection (b)(1)(C)) and inserting the following:
‘‘TITLE IV—ADMINISTRATION OF LOANS
‘‘SEC. 411. ADJUSTMENTS FOR GRADE, TYPE, QUALITY, LOCATION, AND
OTHER FACTORS.
‘‘The Secretary may make such adjustments in the announced
loan rate for a commodity as the Secretary considers appropriate
to reflect differences in grade, type, quality, location, and other
factors.’’.
H. R. 2491—26
SEC. 1110. EFFECT OF AMENDMENTS.
(a) EFFECT ON PRIOR CROPS.—Except as otherwise specifically
provided and notwithstanding any other provision of law, this sub-
title and the amendments made by this subtitle shall not affect
the authority of the Secretary to carry out a price support or
production adjustment program for any of the 1991 through 1995
crops of an agricultural commodity established under a provision
of law in effect immediately before the date of the enactment
of this Act.
(b) LIABILITY.—A provision of this subtitle or an amendment
made by this subtitle shall not affect the liability of any person
under any provision of law as in effect before the date of the
enactment of this Act.
Subtitle B—Conservation
SEC. 1201. CONSERVATION.
(a) FUNDING.—Subtitle E of title XII of the Food Security Act
of 1985 (16 U.S.C. 3841 et seq.) is amended to read as follows:
‘‘Subtitle E—Funding
‘‘SEC. 1241. FUNDING.
‘‘(a) MANDATORY EXPENSES.—For each of fiscal years 1996
through 2002, the Secretary shall use the funds of the Commodity
Credit Corporation to carry out the programs authorized by—
‘‘(1) subchapter B of chapter 1 of subtitle D (including
contracts extended by the Secretary pursuant to section 1437
of the Food, Agriculture, Conservation, and Trade Act of 1990
(Public Law 101–624; 16 U.S.C. 3831 note));
‘‘(2) subchapter C of chapter 1 of subtitle D; and
‘‘(3) chapter 4 of subtitle D.
‘‘(b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PROGRAM.—For
each of fiscal years 1996 through 2002, $100,000,000 of the funds
of the Commodity Credit Corporation shall be available for provid-
ing technical assistance, cost-sharing payments, and incentive pay-
ments for practices relating to livestock production under the live-
stock environmental assistance program under chapter 4 of subtitle
D.’’.
(b) LIVESTOCK
ENVIRONMENTAL
ASSISTANCE
PROGRAM.—To
carry out the programs funded under the amendment made by
subsection (a), subtitle D of title XII of the Food Security Act
of 1985 (16 U.S.C. 3830 et seq.) is amended by adding at the
end the following:
‘‘CHAPTER 4—LIVESTOCK ENVIRONMENTAL
ASSISTANCE PROGRAM
‘‘SEC. 1240. DEFINITIONS.
‘‘In this chapter:
‘‘(1) 
LAND
MANAGEMENT
PRACTICE.—The 
term 
‘land
management practice’ means a site-specific nutrient or manure
management, 
irrigation 
management, 
tillage 
or 
residue
management, grazing management, or other land management
practice that the Secretary determines is needed to protect,
H. R. 2491—27
in the most cost effective manner, water, soil, or related
resources from degradation due to livestock production.
‘‘(2) LARGE
CONFINED
LIVESTOCK
OPERATION.—The term
‘large confined livestock operation’ means an operation that—
‘‘(A) is a confined animal feeding operation; and
‘‘(B) has more than—
‘‘(i) 55 mature dairy cattle;
‘‘(ii) 10,000 beef cattle;
‘‘(iii) 30,000 laying hens or broilers (if the facility
has continuous overflow watering);
‘‘(iv) 100,000 laying hens or broilers (if the facility
has a liquid manure system);
‘‘(v) 55,000 turkeys;
‘‘(vi) 15,000 swine; or
‘‘(vii) 10,000 sheep or lambs.
‘‘(3) LIVESTOCK.—The term ‘livestock’ means dairy cows,
beef cattle, laying hens, broilers, turkeys, swine, sheep, lambs,
and such other animals as determined by the Secretary.
‘‘(4) OPERATOR.—The term ‘operator’ means a person who
is engaged in livestock production (as defined by the Secretary).
‘‘(5) STRUCTURAL PRACTICE.—The term ‘structural practice’
means the establishment of an animal waste management facil-
ity, terrace, grassed waterway, contour grass strip, filterstrip,
or other structural practice that the Secretary determines is
needed to protect, in the most cost effective manner, water,
soil, or related resources from degradation due to livestock
production.
‘‘SEC. 1240A. ESTABLISHMENT AND ADMINISTRATION OF LIVESTOCK
ENVIRONMENTAL ASSISTANCE PROGRAM.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—During the 1996 through 2002 fiscal
years, the Secretary shall provide technical assistance, cost-
sharing payments, and incentive payments to operators who
enter into contracts with the Secretary, through a livestock
environmental assistance program.
‘‘(2) ELIGIBLE PRACTICES.—
‘‘(A) STRUCTURAL PRACTICES.—An operator who imple-
ments a structural practice shall be eligible for technical
assistance or cost-sharing payments, or both.
‘‘(B) LAND MANAGEMENT PRACTICES.—An operator who
performs a land management practice shall be eligible for
technical assistance or incentive payments, or both.
‘‘(3) ELIGIBLE LAND.—Assistance under this chapter may
be provided with respect to land that is used for livestock
production and on which a serious threat to water, soil, or
related resources exists, as determined by the Secretary, by
reason of the soil types, terrain, climatic, soil, topographic,
flood, or saline characteristics, or other factors or natural haz-
ards.
‘‘(4) SELECTION
CRITERIA.—In providing technical assist-
ance, cost-sharing payments, and incentive payments to opera-
tors in a region, watershed, or conservation priority area in
which an agricultural operation is located, the Secretary shall
consider—
‘‘(A) the significance of the water, soil, and related
natural resource problems; and
H. R. 2491—28
‘‘(B) the maximization of environmental benefits per
dollar expended.
‘‘(b) APPLICATION AND TERM.—
‘‘(1) IN
GENERAL.—A contract between an operator and
the Secretary under this chapter may—
‘‘(A) apply to 1 or more structural practices or 1 or
more land management practices, or both; and
‘‘(B) have a term of not less than 5, nor more than
10, years, as determined appropriate by the Secretary,
depending on the practice or practices that are the basis
of the contract.
‘‘(2) DUTIES
OF
OPERATORS
AND
SECRETARY.—To receive
cost-sharing or incentive payments, or technical assistance,
participating operators shall comply with all terms and condi-
tions of the contract and a plan, as established by the Secretary.
‘‘(c) STRUCTURAL PRACTICES.—
‘‘(1) COMPETITIVE OFFER.—The Secretary shall administer
a competitive offer system for operators proposing to receive
cost-sharing payments in exchange for the implementation of
1 or more structural practices by the operator. The competitive
offer system shall consist of—
‘‘(A) the submission of a competitive offer by the opera-
tor in such manner as the Secretary may prescribe; and
‘‘(B) evaluation of the offer in light of the selection
criteria established under subsection (a)(4) and the pro-
jected cost of the proposal, as determined by the Secretary.
‘‘(2) CONCURRENCE OF OWNER.—If the operator making an
offer to implement a structural practice is a tenant of the
land involved in agricultural production, for the offer to be
acceptable, the operator shall obtain the concurrence of the
owner of the land with respect to the offer.
‘‘(d) LAND MANAGEMENT PRACTICES.—The Secretary shall estab-
lish an application and evaluation process for awarding technical
assistance or incentive payments, or both, to an operator in
exchange for the performance of 1 or more land management prac-
tices by the operator.
‘‘(e) COST-SHARING, INCENTIVE
PAYMENTS, AND
TECHNICAL
ASSISTANCE.—
‘‘(1) COST-SHARING PAYMENTS.—
‘‘(A) IN GENERAL.—The Federal share of cost-sharing
payments to an operator proposing to implement 1 or more
structural practices shall not be greater than 75 percent
of the projected cost of each practice, as determined by
the Secretary, taking into consideration any payment
received by the operator from a State or local government.
‘‘(B) LIMITATION.—An operator of a large confined live-
stock operation shall not be eligible for cost-sharing pay-
ments to construct an animal waste management facility.
‘‘(C) OTHER
PAYMENTS.—An operator shall not be
eligible for cost-sharing payments for structural practices
on eligible land under this chapter if the operator receives
cost-sharing payments or other benefits for the same land
under chapter 1, 2, or 3.
‘‘(2) INCENTIVE
PAYMENTS.—The Secretary shall make
incentive payments in an amount and at a rate determined
by the Secretary to be necessary to encourage an operator
to perform 1 or more land management practices.
H. R. 2491—29
‘‘(3) TECHNICAL ASSISTANCE.—
‘‘(A) FUNDING.—The Secretary shall allocate funding
under this chapter for the provision of technical assistance
according to the purpose and projected cost for which the
technical assistance is provided for a fiscal year. The allo-
cated amount may vary according to the type of expertise
required, quantity of time involved, and other factors as
determined appropriate by the Secretary. Funding shall
not exceed the projected cost to the Secretary of the tech-
nical assistance provided for a fiscal year.
‘‘(B) OTHER
AUTHORITIES.—The receipt of technical
assistance under this chapter shall not affect the eligibility
of the operator to receive technical assistance under other
authorities of law available to the Secretary.
‘‘(f) LIMITATION ON PAYMENTS.—
‘‘(1) IN GENERAL.—The total amount of cost-sharing and
incentive payments paid to a person under this chapter may
not exceed—
‘‘(A) $10,000 for any fiscal year; or
‘‘(B) $50,000 for any multiyear contract.
‘‘(2) REGULATIONS.—The Secretary shall issue regulations
that are consistent with section 1001 for the purpose of—
‘‘(A) defining the term ‘person’ as used in paragraph
(1); and
‘‘(B) prescribing such rules as the Secretary determines
necessary to ensure a fair and reasonable application of
the limitations established under this subsection.
‘‘(g) REGULATIONS.—Not later than 180 days after the effective
date of this subsection, the Secretary shall issue regulations to
implement the livestock environmental assistance program estab-
lished under this chapter.’’.
(c) CONFORMING AMENDMENTS.—
(1) COMMODITY CREDIT CORPORATION CHARTER ACT.—Sec-
tion 5(g) of the Commodity Credit Corporation Charter Act
(15 U.S.C. 714c(g)) is amended to read as follows:
‘‘(g) Carry out conservation functions and programs.’’.
(2) WETLANDS RESERVE PROGRAM.—
(A) IN GENERAL.—Section 1237 of the Food Security
Act of 1985 (16 U.S.C. 3837) is amended—
(i) in subsection (b)(2)—
(I) by striking ‘‘not less’’ and inserting ‘‘not
more’’; and
(II) by striking ‘‘2000’’ and inserting ‘‘2002’’;
and
(ii) in subsection (c), by striking ‘‘2000’’ and insert-
ing ‘‘2002’’.
(B) LENGTH OF EASEMENT.—Section 1237A(e) of the
Food Security Act of 1985 (16 U.S.C. 3837a(e)) is amended
by striking paragraph (2) and inserting the following:
‘‘(2) shall be for 15 years, but in no case shall be a perma-
nent easement.’’.
(3) CONSERVATION RESERVE PROGRAM.—
(A) IN GENERAL.—Section 1231(d) of the Food Security
Act of 1985 (16 U.S.C. 3831(d)) is amended by striking
‘‘total of’’ and all that follows through the period at the
end of the subsection and inserting ‘‘total of 36,400,000
acres.’’.
H. R. 2491—30
(B) OPTIONAL CONTRACT TERMINATION BY PRODUCERS.—
Section 1235 of the Food Security Act of 1985 (16 U.S.C.
3835) is amended by adding at the end the following:
‘‘(e) TERMINATION BY OWNER OR OPERATOR.—
‘‘(1) NOTICE OF TERMINATION.—An owner or operator of
land subject to a contract entered into under this subchapter
may terminate the contract by submitting to the Secretary
written notice of the intention of the owner or operator to
terminate the contract.
‘‘(2) EFFECTIVE DATE.—The contract termination shall take
effect 60 days after the date on which the owner or operator
submits the written notice under paragraph (1).
‘‘(3) PRORATED
RENTAL
PAYMENT.—If a contract entered
into under this subchapter is terminated under this subsection
before the end of the fiscal year for which a rental payment
is due, the Secretary shall provide a prorated rental payment
covering the portion of the fiscal year during which the contract
was in effect.
‘‘(4) RENEWED ENROLLMENT.—The termination of a contract
entered into under this subchapter shall not affect the ability
of the owner or operator who requested the termination to
submit a subsequent bid to enroll the land that was subject
to the contract into the conservation reserve.
‘‘(5) CONSERVATION REQUIREMENTS.—If land that was sub-
ject to a contract is returned to production of an agricultural
commodity, the conservation requirements under subtitles B
and C shall apply to the use of the land to the extent that
the requirements are similar to those requirements imposed
on other similar lands in the area, except that the requirements
may not be more onerous that the requirements imposed on
other lands.
‘‘(6) REPAYMENT OF COST SHARE.—A person who terminates
a contract entered into under this subchapter within less than
3 years after entering into the contract shall reimburse the
Secretary for any cost share assistance provided under the
contract.’’.
(C) LIMITATION.—Notwithstanding any other provision
of law, no new acres shall be enrolled in the conservation
reserve program established under subchapter B of chapter
1 of subtitle D of title XII of the Food Security Act of
1985 (16 U.S.C. 3831 et seq.) in calendar year 1997.
Subtitle C—Agricultural Promotion and
Export Programs
SEC. 1301. MARKET PROMOTION PROGRAM.
Effective October 1, 1995, section 211(c)(1) of the Agricultural
Trade Act of 1978 (7 U.S.C. 5641(c)(1)) is amended—
(1) by striking ‘‘and’’ after ‘‘1991 through 1993,’’; and
(2) by striking ‘‘through 1997,’’ and inserting ‘‘through 1995,
and not more than $100,000,000 for each of fiscal years 1996
through 2002,’’.
H. R. 2491—31
SEC. 1302. EXPORT ENHANCEMENT PROGRAM.
Effective October 1, 1995, section 301(e)(1) of the Agricultural
Trade Act of 1978 (7 U.S.C. 5651(e)(1)) is amended to read as
follows:
‘‘(1) IN GENERAL.—The Commodity Credit Corporation shall
make available to carry out the program established under
this section not more than—
‘‘(A) $350,000,000 for fiscal year 1996;
‘‘(B) $350,000,000 for fiscal year 1997;
‘‘(C) $500,000,000 for fiscal year 1998;
‘‘(D) $550,000,000 for fiscal year 1999;
‘‘(E) $579,000,000 for fiscal year 2000;
‘‘(F) $478,000,000 for fiscal year 2001; and
‘‘(G) $478,000,000 for fiscal year 2002.’’.
Subtitle D—Miscellaneous
SEC. 1401. CROP INSURANCE.
(a) CATASTROPHIC RISK PROTECTION.—Section 508(b) of the Fed-
eral Crop Insurance Act (7 U.S.C. 1508(b)) is amended—
(1) in paragraph (4), by adding at the end the following:
‘‘(C) DELIVERY OF COVERAGE.—
‘‘(i) 
IN
GENERAL.—In 
full 
consultation 
with
approved insurance providers, the Secretary may con-
tinue to offer catastrophic risk protection in a State
(or a portion of a State) through local offices of the
Department if the Secretary determines that there is
an insufficient number of approved insurance providers
operating in the State or portion to adequately provide
catastrophic risk protection coverage to producers.
‘‘(ii) COVERAGE BY APPROVED INSURANCE PROVID-
ERS.—To the extent that catastrophic risk protection
coverage by approved insurance providers is suffi-
ciently available in a State as determined by the Sec-
retary, only approved insurance providers may provide
the coverage in the State.
‘‘(iii) CURRENT POLICIES.—Subject to clause (ii), all
catastrophic risk protection policies written by local
offices of the Department shall be transferred (includ-
ing all fees collected for the crop year in which the
approved insurance provider will assume the policies)
to the approved insurance provider for performance
of all sales, service, and loss adjustment functions.’’;
and
(2) in paragraph (7), by striking subparagraph (A) and
inserting the following:
‘‘(A) IN GENERAL.—Effective for the spring-planted 1996
and subsequent crops, to be eligible for any payment or
loan under the Agricultural Market Transition Act, the
conservation reserve program, or any benefit described in
section 371 of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 2008f), a person shall—
‘‘(i) obtain at least the catastrophic level of insur-
ance for each crop of economic significance in which
the person has an interest; or
H. R. 2491—32
‘‘(ii) provide a written waiver to the Secretary that
waives any eligibility for emergency crop loss assist-
ance in connection with the crop.’’.
(b) COVERAGE OF SEED CROPS.—Section 519(a)(2)(B) of the Act
(7 U.S.C. 1519(a)(2)(B)) is amended by inserting ‘‘seed crops,’’ after
‘‘turfgrass sod,’’.
SEC. 1402. COLLECTION AND USE OF AGRICULTURAL QUARANTINE
AND INSPECTION FEES.
Subsection (a) of section 2509 of the Food, Agriculture, Con-
servation, and Trade Act of 1990 (21 U.S.C. 136a) is amended
to read as follows:
‘‘(a) QUARANTINE AND INSPECTION FEES.—
‘‘(1) FEES AUTHORIZED.—The Secretary of Agriculture may
prescribe and collect fees sufficient—
‘‘(A) to cover the cost of providing agricultural quar-
antine and inspection services in connection with the
arrival at a port in the customs territory of the United
States, or the preclearance or preinspection at a site outside
the customs territory of the United States, of an inter-
national passenger, commercial vessel, commercial aircraft,
commercial truck, or railroad car;
‘‘(B) to cover the cost of administering this subsection;
and
‘‘(C) through fiscal year 2002, to maintain a reasonable
balance in the Agricultural Quarantine Inspection User
Fee Account established under paragraph (5).
‘‘(2) LIMITATION.—In setting the fees under paragraph (1),
the Secretary shall ensure that the amount of the fees are
commensurate with the costs of agricultural quarantine and
inspection services with respect to the class of persons or enti-
ties paying the fees. The costs of the services with respect
to passengers as a class includes the costs of related inspections
of the aircraft or other vehicle.
‘‘(3) STATUS OF FEES.—Fees collected under this subsection
by any person on behalf of the Secretary are held in trust
for the United States and shall be remitted to the Secretary
in such manner and at such times as the Secretary may pre-
scribe.
‘‘(4) LATE PAYMENT PENALTIES.—If a person subject to a
fee under this subsection fails to pay the fee when due, the
Secretary shall assess a late payment penalty, and the overdue
fees shall accrue interest, as required by section 3717 of title
31, United States Code.
‘‘(5) AGRICULTURAL
QUARANTINE
INSPECTION
USER
FEE
ACCOUNT.—
‘‘(A) ESTABLISHMENT.—There is established in the
Treasury of the United States a no-year fund, to be known
as the ‘Agricultural Quarantine Inspection User Fee
Account’, which shall contain all of the fees collected under
this subsection and late payment penalties and interest
charges collected under paragraph (4) through fiscal year
2002.
‘‘(B) USE OF ACCOUNT.—For each of the fiscal years
1996 through 2002, funds in the Agricultural Quarantine
Inspection User Fee Account shall be available, in such
amounts as are provided in advance in appropriations Acts,
H. R. 2491—33
to cover the costs associated with the provision of agricul-
tural quarantine and inspection services and the adminis-
tration of this subsection. Amounts made available under
this subparagraph shall be available until expended.
‘‘(C) EXCESS FEES.—Fees and other amounts collected
under this subsection in any of the fiscal years 1996
through 2002 in excess of $100,000,000 shall be available
for the purposes specified in subparagraph (B) until
expended, without further appropriation.
‘‘(6) USE OF AMOUNTS COLLECTED AFTER FISCAL YEAR 2002.—
After September 30, 2002, the unobligated balance in the Agri-
cultural Quarantine Inspection User Fee Account and fees and
other amounts collected under this subsection shall be credited
to the Department of Agriculture accounts that incur the costs
associated with the provision of agricultural quarantine and
inspection services and the administration of this subsection.
The fees and other amounts shall remain available to the
Secretary until expended without fiscal year limitation.
‘‘(7) STAFF YEARS.—The number of full-time equivalent posi-
tions in the Department of Agriculture attributable to the provi-
sion of agricultural quarantine and inspection services and
the administration of this subsection shall not be counted
toward the limitation on the total number of full-time equiva-
lent positions in all agencies specified in section 5(b) of the
Federal Workforce Restructuring Act of 1994 (Public Law 103–
226; 5 U.S.C. 3101 note) or other limitation on the total number
of full-time equivalent positions.’’.
SEC. 1403. COMMODITY CREDIT CORPORATION INTEREST RATE.
Notwithstanding any other provision of law, the monthly
Commodity Credit Corporation interest rate applicable to loans
provided for agricultural commodities by the Corporation shall be
100 basis points greater than the rate determined under the
applicable interest rate formula in effect on October 1, 1995.
TITLE II—BANKING, HOUSING, AND
RELATED PROVISIONS
SEC. 2001. TABLE OF CONTENTS.
The table of contents for this title is as follows:
TITLE II—BANKING, HOUSING, AND RELATED PROVISIONS
Sec. 2001. Table of contents.
TITLE II—BANKING, HOUSING, AND RELATED PROVISIONS
Subtitle A—Financial Institutions
Sec. 2011. Special assessment to capitalize SAIF.
Sec. 2012. Financing Corporation assessments shared proportionally by all insured
depository institutions.
Sec. 2013. Merger of BIF and SAIF.
Sec. 2014. Creation of SAIF Special Reserve.
Sec. 2015. Refund of amounts in deposit insurance fund in excess of designated re-
serve amount.
Sec. 2016. Assessment rates for SAIF members may not be less than assessment
rates for BIF members.
Sec. 2017. Assessments authorized only if needed to maintain the reserve ratio of
a deposit insurance fund.
Sec. 2018. Limitation on authority of Oversight Board to continue to employ more
than 18 officers and employees.
H. R. 2491—34
Sec. 2019. Definitions.
Subtitle B—Housing
Sec. 2051. Annual adjustment factors for operating costs only; restraint on rent in-
creases.
Sec. 2052. Foreclosure avoidance and borrower assistance.
TITLE II—BANKING, HOUSING, AND
RELATED PROVISIONS
Subtitle A—Financial Institutions
SEC. 2011. SPECIAL ASSESSMENT TO CAPITALIZE SAIF.
(a) IN GENERAL.—Except as provided in subsection (f), the
Board of Directors shall impose a special assessment on the SAIF-
assessable deposits of each insured depository institution at a rate
applicable to all such institutions that the Board of Directors,
in its sole discretion, determines (after taking into account the
adjustments described in subsections (g) through (j)) will cause
the Savings Association Insurance Fund to achieve the designated
reserve ratio on the first business day of January 1996.
(b) FACTORS TO BE CONSIDERED.—In carrying out subsection
(a), the Board of Directors shall base its determination on—
(1) the monthly Savings Association Insurance Fund bal-
ance most recently calculated;
(2) data on insured deposits reported in the most recent
reports of condition filed not later than 70 days before the
date of enactment of this Act by insured depository institutions;
and
(3) any other factors that the Board of Directors deems
appropriate.
(c) DATE OF DETERMINATION.—For purposes of subsection (a),
the amount of the SAIF-assessable deposits of an insured depository
institution shall be determined as of March 31, 1995.
(d) DATE PAYMENT DUE.—The special assessment imposed
under this section shall be—
(1) due on the first business day of January 1996; and
(2) paid to the Corporation on the later of—
(A) the first business day of January 1996; or
(B) such other date as the Corporation shall prescribe,
but not later than 60 days after the date of enactment
of this Act.
(e) ASSESSMENT DEPOSITED
IN SAIF.—Notwithstanding any
other provision of law, the proceeds of the special assessment
imposed under this section shall be deposited in the Savings
Association Insurance Fund.
(f) EXEMPTIONS FOR CERTAIN INSTITUTIONS.—
(1) EXEMPTION
FOR
WEAK
INSTITUTIONS.—The Board of
Directors may, by order, in its sole discretion, exempt any
insured depository institution that the Board of Directors deter-
mines to be weak, from paying the special assessment imposed
under this section if the Board of Directors determines that
the exemption would reduce risk to the Savings Association
Insurance Fund.
(2) GUIDELINES REQUIRED.—Not later than 30 days after
the date of enactment of this Act, the Board of Directors shall
H. R. 2491—35
prescribe guidelines setting forth the criteria that the Board
of Directors will use in exempting institutions under paragraph
(1). Such guidelines shall be published in the Federal Register.
(3) EXEMPTION FOR CERTAIN NEWLY CHARTERED AND OTHER
DEFINED INSTITUTIONS.—
(A) IN
GENERAL.—In addition to the institutions
exempted from paying the special assessment under para-
graph (1), the Board of Directors shall exempt any insured
depository institution from payment of the special assess-
ment if the institution—
(i) was in existence on October 1, 1995, and held
no SAIF-assessable deposits prior to January 1, 1993;
(ii) is a Federal savings bank which—
(I) was established de novo in April 1994 in
order to acquire the deposits of a savings associa-
tion which was in default or in danger of default;
and
(II) received minority interim capital assist-
ance from the Resolution Trust Corporation under
section 21A(w) of the Federal Home Loan Bank
Act in connection with the acquisition of any such
savings association; or
(iii) is a savings association, the deposits of which
are insured by the Savings Association Insurance
Fund, which—
(I) prior to January 1, 1987, was chartered
as a Federal savings bank insured by the Federal
Savings and Loan Insurance Corporation for the
purpose of acquiring all or substantially all of the
assets and assuming all or substantially all of
the deposit liabilities of a national bank in a trans-
action consummated after July 1, 1986; and
(II) as of the date of that transaction, had
assets of less than $150,000,000.
(B) DEFINITION.—For purposes of this paragraph, an
institution shall be deemed to have held SAIF-assessable
deposits prior to January 1, 1993, if—
(i) it directly held SAIF-assessable insured deposits
prior to that date; or
(ii) it succeeded to, acquired, purchased, or other-
wise holds any SAIF-assessable deposits as of the date
of enactment of this Act that were SAIF-assessable
deposits prior to January 1, 1993.
(4) EXEMPT INSTITUTIONS REQUIRED TO PAY ASSESSMENTS
AT FORMER RATES.—
(A) PAYMENTS TO SAIF AND DIF.—Any insured deposi-
tory institution that the Board of Directors exempts under
this subsection from paying the special assessment imposed
under this section shall pay semiannual assessments—
(i) during calendar years 1996 and 1997, into the
Savings Association Insurance Fund, based on SAIF-
assessable deposits of that institution, at assessment
rates calculated under the schedule in effect for Sav-
ings Association Insurance Fund members on June
30, 1995; and
(ii) during calendar years 1998 and 1999—
H. R. 2491—36
(I) into the Deposit Insurance Fund, based
on SAIF-assessable deposits of that institution as
of December 31, 1997, at assessment rates cal-
culated under the schedule in effect for Savings
Association Insurance Fund members on June 30,
1995; or
(II) in accordance with clause (i), if the Bank
Insurance Fund and the Savings Association Insur-
ance Fund are not merged into the Deposit Insur-
ance Fund.
(B) OPTIONAL PRO RATA PAYMENT OF SPECIAL ASSESS-
MENT.—This paragraph shall not apply with respect to
any insured depository institution (or successor insured
depository institution) that has paid, during any calendar
year from 1997 through 1999, upon such terms as the
Corporation may announce, an amount equal to the product
of—
(i) 12.5 percent of the special assessment that the
institution would have been required to pay under
subsection (a), if the Board of Directors had not
exempted the institution; and
(ii) the number of full semiannual periods remain-
ing between the date of the payment and December
31, 1999.
(g) SPECIAL ELECTION FOR CERTAIN INSTITUTIONS FACING HARD-
SHIP AS A RESULT OF THE SPECIAL ASSESSMENT.—
(1) ELECTION AUTHORIZED.—If—
(A) an insured depository institution, or any depository
institution holding company which, directly or indirectly,
controls such institution, is subject to terms or covenants
in any debt obligation or preferred stock outstanding on
September 13, 1995; and
(B) the payment of the special assessment under sub-
section (a) would pose a significant risk of causing such
depository institution or holding company to default or
violate any such term or covenant,
the depository institution may elect, with the approval of the
Corporation, to pay such special assessment in accordance with
paragraphs (2) and (3) in lieu of paying such assessment in
the manner required under subsection (a).
(2) 1ST
ASSESSMENT.—An insured depository institution
which makes an election under paragraph (1) shall pay an
assessment of 50 percent of the amount of the special assess-
ment that would otherwise apply under subsection (a), by the
date on which such special assessment is otherwise due under
subsection (d).
(3) 2D
ASSESSMENT.—An insured depository institution
which makes an election under paragraph (1) shall pay a 2d
assessment, by the date established by the Board of Directors
in accordance with paragraph (4), in an amount equal to the
product of 51 percent of the rate determined by the Board
of Directors under subsection (a) for determining the amount
of the special assessment and the SAIF-assessable deposits
of the institution on March 31, 1996, or such other date in
calendar year 1996 as the Board of Directors determines to
be appropriate.
H. R. 2491—37
(4) DUE DATE OF 2D ASSESSMENT.—The date established
by the Board of Directors for the payment of the assessment
under paragraph (3) by a depository institution shall be the
earliest practicable date which the Board of Directors deter-
mines to be appropriate, which is at least 15 days after the
date used by the Board of Directors under paragraph (3).
(5) SUPPLEMENTAL
SPECIAL
ASSESSMENT.—An insured
depository institution which makes an election under paragraph
(1) shall pay a supplemental special assessment, at the same
time the payment under paragraph (3) is made, in an amount
equal to the product of—
(A) 50 percent of the rate determined by the Board
of Directors under subsection (a) for determining the
amount of the special assessment; and
(B) 95 percent of the amount by which the SAIF-
assessable deposits used by the Board of Directors for
determining the amount of the 1st assessment under para-
graph (2) exceeds, if any, the SAIF-assessable deposits
used by the Board for determining the amount of the
2d assessment under paragraph (3).
(h) ADJUSTMENT OF SPECIAL ASSESSMENT FOR CERTAIN BANK
INSURANCE FUND MEMBER BANKS.—
(1) IN GENERAL.—For purposes of computing the special
assessment imposed under this section with respect to a Bank
Insurance Fund member bank, the amount of any deposits
of any insured depository institution which section 5(d)(3) of
the Federal Deposit Insurance Act treats as insured by the
Savings Association Insurance Fund shall be reduced by 20
percent—
(A) if the adjusted attributable deposit amount of the
Bank Insurance Fund member bank is less than 50 percent
of the total domestic deposits of that member bank as
of June 30, 1995; or
(B) if, as of June 30, 1995, the Bank Insurance Fund
member—
(i) had an adjusted attributable deposit amount
equal to less than 75 percent of the total assessable
deposits of that member bank;
(ii) had total assessable deposits greater than
$5,000,000,000; and
(iii) was owned or controlled by a bank holding
company that owned or controlled insured depository
institutions having an aggregate amount of deposits
insured or treated as insured by the Bank Insurance
Fund greater than the aggregate amount of deposits
insured or treated as insured by the Savings Associa-
tion Insurance Fund.
(2) ADJUSTED ATTRIBUTABLE DEPOSIT AMOUNT.—For pur-
poses of this subsection, the ‘‘adjusted attributable deposit
amount’’ shall be determined in accordance with section
5(d)(3)(C) of the Federal Deposit Insurance Act.
(i) ADJUSTMENT
TO
THE ADJUSTED ATTRIBUTABLE DEPOSIT
AMOUNT FOR CERTAIN BANK INSURANCE FUND MEMBER BANKS.—
Section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C.
1815(d)(3)) is amended—
(1) in subparagraph (C), by striking ‘‘The adjusted attrib-
utable deposit amount’’ and inserting ‘‘Except as provided in
H. R. 2491—38
subparagraph (K), the adjusted attributable deposit amount’’;
and
(2) by adding at the end the following new subparagraph:
‘‘(K) ADJUSTMENT OF ADJUSTED ATTRIBUTABLE DEPOSIT
AMOUNT.—The amount determined under subparagraph
(C)(i) for deposits acquired by March 31, 1995, shall be
reduced by 20 percent for purposes of computing the
adjusted attributable deposit amount for the payment of
any assessment for any semiannual period after December
31, 1995 (other than the special assessment imposed under
section 2011(a) of the Balanced Budget Act of 1995), for
a Bank Insurance Fund member bank that, as of June
30, 1995—
‘‘(i) had an adjusted attributable deposit amount
that was less than 50 percent of the total deposits
of that member bank; or
‘‘(ii)(I) had an adjusted attributable deposit amount
equal to less than 75 percent of the total assessable
deposits of that member bank;
‘‘(II) had total assessable deposits greater than
$5,000,000,000; and
‘‘(III) was owned or controlled by a bank holding
company that owned or controlled insured depository
institutions having an aggregate amount of deposits
insured or treated as insured by the Bank Insurance
Fund greater than the aggregate amount of deposits
insured or treated as insured by the Savings Associa-
tion Insurance Fund.’’.
(j) ADJUSTMENT OF SPECIAL ASSESSMENT FOR CERTAIN SAVINGS
ASSOCIATIONS.—
(1) SPECIAL
ASSESSMENT
REDUCTION.—For purposes of
computing the special assessment imposed under this section,
in the case of any converted association, the amount of any
deposits of such association which were insured by the Savings
Association Insurance Fund as of March 31, 1995, shall be
reduced by 20 percent.
(2) CONVERTED ASSOCIATION.—For purposes of this sub-
section, the term ‘‘converted association’’ means—
(A) any Federal savings association—
(i) that is a member of the Savings Association
Insurance Fund and that has deposits subject to assess-
ment by that fund which did not exceed $4,000,000,000,
as of March 31, 1995; and
(ii) that had been, or is a successor by merger,
acquisition, or otherwise to an institution that had
been, a State savings bank, the deposits of which were
insured by the Federal Deposit Insurance Corporation
prior to August 9, 1989, that converted to a Federal
savings association pursuant to section 5(i) of the Home
Owners’ Loan Act prior to January 1, 1985;
(B) a State depository institution that is a member
of the Savings Association Insurance Fund that had been
a State savings bank prior to October 15, 1982, and was
a Federal savings association on August 9, 1989;
(C) an insured bank that—
H. R. 2491—39
(i) was established de novo in order to acquire
the deposits of a savings association in default or in
danger of default;
(ii) did not open for business before acquiring the
deposits of such savings association; and
(iii) was a Savings Association Insurance Fund
member as of the date of enactment of this Act; and
(D) an insured bank that—
(i) resulted from a savings association before
December 19, 1991, in accordance with section
5(d)(2)(G) of the Federal Deposit Insurance Act; and
(ii) had an increase in its capital in conjunction
with the conversion in an amount equal to more than
75 percent of the capital of the institution on the
day before the date of the conversion.
SEC. 2012. FINANCING CORPORATION ASSESSMENTS SHARED PROPOR-
TIONALLY BY ALL INSURED DEPOSITORY INSTITUTIONS.
(a) IN GENERAL.—Section 21 of the Federal Home Loan Bank
Act (12 U.S.C. 1441) is amended—
(1) in subsection (f)(2)—
(A) in the matter immediately preceding subparagraph
(A)—
(i) by striking ‘‘Savings Association Insurance
Fund member’’ and inserting ‘‘insured depository
institution’’; and
(ii) by striking ‘‘members’’ and inserting ‘‘institu-
tions’’; and
(B) by striking ‘‘, except that—’’ and all that follows
through the end of the paragraph and inserting ‘‘, except
that—
‘‘(A) the Financing Corporation shall have first priority
to make the assessment; and
‘‘(B) no limitation under clause (i) or (iii) of section
7(b)(2)(A) of the Federal Deposit Insurance Act shall apply
for purposes of this paragraph.’’; and
(2) in subsection (k)—
(A) by striking ‘‘section—’’ and inserting ‘‘section, the
following definitions shall apply:’’;
(B) by striking paragraph (1);
(C) by redesignating paragraphs (2) and (3) as para-
graphs (1) and (2), respectively; and
(D) by adding at the end the following new paragraph:
‘‘(3) INSURED DEPOSITORY INSTITUTION.—The term ‘insured
depository institution’ has the same meaning as in section
3 of the Federal Deposit Insurance Act.’’.
(b) CONFORMING AMENDMENT.—Section 7(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended by striking
subparagraph (D).
(c) EFFECTIVE DATE.—This section and the amendments made
by this section shall become effective on January 1, 1996.
SEC. 2013. MERGER OF BIF AND SAIF.
(a) IN GENERAL.—
(1) MERGER.—The Bank Insurance Fund and the Savings
Association Insurance Fund shall be merged into the Deposit
Insurance Fund established by section 11(a)(4) of the Federal
Deposit Insurance Act, as amended by this section.
H. R. 2491—40
(2) DISPOSITION OF ASSETS AND LIABILITIES.—All assets and
liabilities of the Bank Insurance Fund and the Savings Associa-
tion Insurance Fund shall be transferred to the Deposit Insur-
ance Fund.
(3) NO SEPARATE EXISTENCE.—The separate existence of
the Bank Insurance Fund and the Savings Association Insur-
ance Fund shall cease.
(b) SPECIAL RESERVE OF THE DEPOSIT INSURANCE FUND.—
(1) IN GENERAL.—Immediately before the merger of the
Bank Insurance Fund and the Savings Association Insurance
Fund, if the reserve ratio of the Savings Association Insurance
Fund exceeds the designated reserve ratio, the amount by which
that reserve ratio exceeds the designated reserve ratio shall
be placed in the Special Reserve of the Deposit Insurance
Fund, established under section 11(a)(5) of the Federal Deposit
Insurance Act, as amended by this section.
(2) DEFINITION.—For purposes of this subsection, the term
‘‘reserve ratio’’ means the ratio of the net worth of the Savings
Association Insurance Fund to aggregate estimated insured
deposits held in all Savings Association Insurance Fund mem-
bers.
(c) EFFECTIVE DATE.—This section and the amendments made
by this section shall become effective on January 1, 1998, if no
insured depository institution is a savings association on that date.
(d) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) DEPOSIT INSURANCE FUND.—Section 11(a)(4) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is amended—
(A) by redesignating subparagraph (B) as subpara-
graph (C);
(B) by striking subparagraph (A) and inserting the
following:
‘‘(A) ESTABLISHMENT.—There is established the Deposit
Insurance Fund, which the Corporation shall—
‘‘(i) maintain and administer;
‘‘(ii) use to carry out its insurance purposes in
the manner provided by this subsection; and
‘‘(iii) invest in accordance with section 13(a).
‘‘(B) USES.—The Deposit Insurance Fund shall be avail-
able to the Corporation for use with respect to Deposit
Insurance Fund members.’’; and
(C) by striking ‘‘(4) GENERAL PROVISIONS RELATING TO
FUNDS.—’’ and inserting the following:
‘‘(4) 
ESTABLISHMENT
OF
THE
DEPOSIT
INSURANCE
FUND.—’’.
(2) OTHER REFERENCES.—Section 11(a)(4)(C) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(a)(4)(C), as redesignated
by paragraph (1) of this subsection) is amended by striking
‘‘Bank Insurance Fund and the Savings Association Insurance
Fund’’ and inserting ‘‘Deposit Insurance Fund’’.
(3) DEPOSITS INTO FUND.—Section 11(a)(4) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is amended by
adding at the end the following new subparagraph:
‘‘(D) DEPOSITS.—All amounts assessed against insured
depository institutions by the Corporation shall be depos-
ited in the Deposit Insurance Fund.’’.
H. R. 2491—41
(4) SPECIAL RESERVE OF DEPOSITS.—Section 11(a)(5) of the
Federal Deposit Insurance Act (12 U.S.C. 1821(a)(5)) is
amended to read as follows:
‘‘(5) SPECIAL RESERVE OF DEPOSIT INSURANCE FUND.—
‘‘(A) ESTABLISHMENT.—
‘‘(i) IN GENERAL.—There is established a Special
Reserve of the Deposit Insurance Fund, which shall
be administered by the Corporation and shall be
invested in accordance with section 13(a).
‘‘(ii) LIMITATION.—The Corporation shall not pro-
vide any assessment credit, refund, or other payment
from any amount in the Special Reserve.
‘‘(B) EMERGENCY USE OF SPECIAL RESERVE.—Notwith-
standing subparagraph (A)(ii), the Corporation may, in its
sole discretion, transfer amounts from the Special Reserve
to the Deposit Insurance Fund, for the purposes set forth
in paragraph (4), only if—
‘‘(i) the reserve ratio of the Deposit Insurance Fund
is less than 50 percent of the designated reserve ratio;
and
‘‘(ii) the Corporation expects the reserve ratio of
the Deposit Insurance Fund to remain at less than
50 percent of the designated reserve ratio for each
of the next 4 calendar quarters.
‘‘(C) EXCLUSION OF SPECIAL RESERVE IN CALCULATING
RESERVE RATIO.—Notwithstanding any other provision of
law, any amounts in the Special Reserve shall be excluded
in calculating the reserve ratio of the Deposit Insurance
Fund under section 7.’’.
(5) FEDERAL HOME LOAN BANK ACT.—Section 21B(f)(2)(C)(ii)
of 
the 
Federal 
Home 
Loan 
Bank 
Act 
(12 
U.S.C.
1441b(f)(2)(C)(ii)) is amended—
(A) in subclause (I), by striking ‘‘to Savings Associa-
tions Insurance Fund members’’ and inserting ‘‘to insured
depository institutions, and their successors, which were
Savings Association Insurance Fund members on Septem-
ber 1, 1995’’; and
(B) in subclause (II), by striking ‘‘to Savings Associa-
tions Insurance Fund members’’ and inserting ‘‘to insured
depository institutions, and their successors, which were
Savings Association Insurance Fund members on Septem-
ber 1, 1995’’.
(6) REPEALS.—
(A) SECTION 3.—Section 3(y) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(y)) is amended to read as
follows:
‘‘(y) DEFINITIONS RELATING TO THE DEPOSIT INSURANCE FUND.—
‘‘(1) DEPOSIT INSURANCE FUND.—The term ‘Deposit Insur-
ance Fund’ means the fund established under section 11(a)(4).
‘‘(2) RESERVE RATIO.—The term ‘reserve ratio’ means the
ratio of the net worth of the Deposit Insurance Fund to aggre-
gate estimated insured deposits held in all insured depository
institutions.
‘‘(3) DESIGNATED RESERVE RATIO.—The designated reserve
ratio of the Deposit Insurance Fund for each year shall be—
‘‘(A) 1.25 percent of estimated insured deposits; or
H. R. 2491—42
‘‘(B) a higher percentage of estimated insured deposits
that the Board of Directors determines to be justified for
that year by circumstances raising a significant risk of
substantial future losses to the fund.
(B) SECTION 7.—Section 7 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1817) is amended—
(i) by striking subsection (l);
(ii) by redesignating subsections (m) and (n) as
subsections (l) and (m), respectively;
(iii) in subsection (b)(2), by striking subparagraphs
(B) and (F), and by redesignating subparagraphs (C),
(E), (G), and (H) as subparagraphs (B) through (E),
respectively.
(C) SECTION 11.—Section 11(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)) is amended—
(i) by striking paragraphs (6) and (7); and
(ii) by redesignating paragraph (8) as paragraph
(6).
(7) SECTION 5136 OF THE REVISED STATUTES.—Paragraph
Eleventh of section 5136 of the Revised Statutes (12 U.S.C.
24) is amended in the fifth sentence, by striking ‘‘affected
deposit insurance fund’’ and inserting ‘‘Deposit Insurance
Fund’’.
(8) INVESTMENTS PROMOTING PUBLIC WELFARE; LIMITATIONS
ON
AGGREGATE
INVESTMENTS.—The 23d undesignated para-
graph of section 9 of the Federal Reserve Act (12 U.S.C. 338a)
is amended in the fourth sentence, by striking ‘‘affected deposit
insurance fund’’ and inserting ‘‘Deposit Insurance Fund’’.
(9) ADVANCES
TO
CRITICALLY
UNDERCAPITALIZED
DEPOSI-
TORY
INSTITUTIONS.—Section 10B(b)(3)(A)(ii) of the Federal
Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is amended by striking
‘‘any deposit insurance fund in’’ and inserting ‘‘the Deposit
Insurance Fund of’’.
(10) AMENDMENTS TO THE BALANCED BUDGET AND EMER-
GENCY DEFICIT CONTROL ACT OF 1985.—Section 255(g)(1)(A) of
the Balanced Budget and Emergency Deficit Control Act of
1985 (2 U.S.C. 905(g)(1)(A)) is amended—
(A) by striking ‘‘Bank Insurance Fund’’ and inserting
‘‘Deposit Insurance Fund’’; and
(B) by striking ‘‘Federal Deposit Insurance Corporation,
Savings Association Insurance Fund;’’.
(11) FURTHER AMENDMENTS TO THE FEDERAL HOME LOAN
BANK ACT.—The Federal Home Loan Bank Act (12 U.S.C. 1421
et seq.) is amended—
(A) in section 11(k) (12 U.S.C. 1431(k))—
(i) in the subsection heading, by striking ‘‘SAIF’’
and inserting ‘‘THE DEPOSIT INSURANCE FUND’’; and
(ii) by striking ‘‘Savings Association Insurance
Fund’’ each place such term appears and inserting
‘‘Deposit Insurance Fund’’;
(B) in section 21A(b)(4)(B) (12 U.S.C. 1441a(b)(4)(B)),
by striking ‘‘affected deposit insurance fund’’ and inserting
‘‘Deposit Insurance Fund’’;
(C) in section 21A(b)(6)(B) (12 U.S.C. 1441a(b)(6)(B))—
(i) in the subparagraph heading, by striking ‘‘SAIF-
INSURED
BANKS’’ and inserting ‘‘CHARTER
CONVER-
SIONS’’; and
H. R. 2491—43
(ii) by striking ‘‘Savings Association Insurance
Fund member’’ and inserting ‘‘savings association’’;
(D) 
in 
section 
21A(b)(10)(A)(iv)(II) 
(12 
U.S.C.
1441a(b)(10)(A)(iv)(II)), by striking ‘‘Savings Association
Insurance Fund’’ and inserting ‘‘Deposit Insurance Fund’’;
(E) in section 21B(e) (12 U.S.C. 1441b(e))—
(i) in paragraph (5), by inserting ‘‘as of the date
of funding’’ after ‘‘Savings Association Insurance Fund
members’’ each place such term appears;
(ii) by striking paragraph (7); and
(iii) by redesignating paragraph (8) as paragraph
(7); and
(F) in section 21B(k) (12 U.S.C. 1441b(k))—
(i) by striking paragraph (8); and
(ii) by redesignating paragraphs (9) and (10) as
paragraphs (8) and (9), respectively.
(12) AMENDMENTS TO THE HOME OWNERS’ LOAN ACT.—The
Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) is amended—
(A) in section 5 (12 U.S.C. 1464)—
(i) in subsection (c)(5)(A), by striking ‘‘that is a
member of the Bank Insurance Fund’’;
(ii) in subsection (c)(6), by striking ‘‘As used in
this subsection—’’ and inserting ‘‘For purposes of this
subsection, the following definitions shall apply:’’;
(iii) in subsection (o)(1), by striking ‘‘that is a Bank
Insurance Fund member’’;
(iv) in subsection (o)(2)(A), by striking ‘‘a Bank
Insurance Fund member until such time as it changes
its status to a Savings Association Insurance Fund
member’’ and inserting ‘‘insured by the Deposit Insur-
ance Fund’’;
(v) in subsection (t)(5)(D)(iii)(II), by striking
‘‘affected 
deposit 
insurance 
fund’’ 
and 
inserting
‘‘Deposit Insurance Fund’’;
(vi) in subsection (t)(7)(C)(i)(I), by striking ‘‘affected
deposit insurance fund’’ and inserting ‘‘Deposit Insur-
ance Fund’’; and
(vii) in subsection (v)(2)(A)(i), by striking ‘‘, the
Savings Association Insurance Fund’’ and inserting ‘‘or
the Deposit Insurance Fund’’; and
(B) in section 10 (12 U.S.C. 1467a)—
(i) in subsection (e)(1)(A)(iii)(VII), by adding ‘‘or’’
at the end;
(ii) in subsection (e)(1)(A)(iv), by adding ‘‘and’’ at
the end;
(iii) in subsection (e)(1)(B), by striking ‘‘Savings
Association Insurance Fund or Bank Insurance Fund’’
and inserting ‘‘Deposit Insurance Fund’’;
(iv) in subsection (e)(2), by striking ‘‘Savings
Association Insurance Fund or the Bank Insurance
Fund’’ and inserting ‘‘Deposit Insurance Fund’’; and
(v) in subsection (m)(3), by striking subparagraph
(E), and by redesignating subparagraphs (F), (G), and
(H) as subparagraphs (E), (F), and (G), respectively.
(13) AMENDMENTS TO THE NATIONAL HOUSING ACT.—The
National Housing Act (12 U.S.C. 1701 et seq.) is amended—
H. R. 2491—44
(A) in section 317(b)(1)(B) (12 U.S.C. 1723i(b)(1)(B)),
by striking ‘‘Bank Insurance Fund for banks or through
the Savings Association Insurance Fund for savings
associations’’ and inserting ‘‘Deposit Insurance Fund’’; and
(B) in section 526(b)(1)(B)(ii) (12 U.S.C. 1735f–
14(b)(1)(B)(ii)), by striking ‘‘Bank Insurance Fund for banks
and through the Savings Association Insurance Fund for
savings associations’’ and inserting ‘‘Deposit Insurance
Fund’’.
(14) FURTHER
AMENDMENTS
TO
THE
FEDERAL
DEPOSIT
INSURANCE ACT.—The Federal Deposit Insurance Act (12 U.S.C.
1811 et seq.) is amended—
(A) in section 3(a)(1) (12 U.S.C. 1813(a)(1)), by striking
subparagraph (B) and inserting the following:
‘‘(B) includes any former savings association.’’;
(B) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), by striking
‘‘the Bank Insurance Fund or the Savings Association
Insurance Fund;’’ and inserting ‘‘Deposit Insurance Fund,’’;
(C) in section 5(d) (12 U.S.C. 1815(d)), by striking
paragraphs (2) and (3);
(D) in section 5(d)(1) (12 U.S.C. 1815(d)(1))—
(i) in subparagraph (A), by striking ‘‘reserve ratios
in the Bank Insurance Fund and the Savings Associa-
tion Insurance Fund’’ and inserting ‘‘the reserve ratio
of the Deposit Insurance Fund’’;
(ii) by striking subparagraph (B) and inserting
the following:
‘‘(2) FEE
CREDITED
TO
THE
DEPOSIT
INSURANCE
FUND.—
The fee paid by the depository institution under paragraph
(1) shall be credited to the Deposit Insurance Fund.’’;
(iii) 
by 
striking 
‘‘(1) 
UNINSURED
INSTITU-
TIONS.—’’; and
(iv) by redesignating subparagraphs (A) and (C)
as paragraphs (1) and (3), respectively, and moving
the margins 2 ems to the left;
(E) in section 5(e) (12 U.S.C. 1815(e))—
(i) in paragraph (5)(A), by striking ‘‘Bank Insur-
ance Fund or the Savings Association Insurance Fund’’
and inserting ‘‘Deposit Insurance Fund’’;
(ii) by striking paragraph (6); and
(iii) by redesignating paragraphs (7), (8), and (9)
as paragraphs (6), (7), and (8), respectively;
(F) in section 6(5) (12 U.S.C. 1816(5)), by striking
‘‘Bank Insurance Fund or the Savings Association Insur-
ance Fund’’ and inserting ‘‘Deposit Insurance Fund’’;
(G) in section 7(b) (12 U.S.C. 1817(b))—
(i) in paragraph (1)(D), by striking ‘‘each deposit
insurance fund’’ and inserting ‘‘the Deposit Insurance
Fund’’;
(ii) in clauses (i)(I) and (iv) of paragraph (2)(A),
by striking ‘‘each deposit insurance fund’’ each place
such term appears and inserting ‘‘the Deposit Insur-
ance Fund’’;
(iii) in paragraph (2)(A)(iii), by striking ‘‘a deposit
insurance fund’’ and inserting ‘‘the Deposit Insurance
Fund’’;
(iv) by striking clause (iv) of paragraph (2)(A);
H. R. 2491—45
(v) in paragraph (2)(C) (as redesignated by para-
graph (6)(B) of this subsection)—
(I) by striking ‘‘any deposit insurance fund’’
and inserting ‘‘the Deposit Insurance Fund’’; and
(II) by striking ‘‘that fund’’ each place such
term appears and inserting ‘‘the Deposit Insurance
Fund’’;
(vi) in paragraph (2)(D) (as redesignated by para-
graph (6)(B) of this subsection)—
(I) in the subparagraph heading, by striking
‘‘FUNDS ACHIEVE’’ and inserting ‘‘FUND ACHIEVES’’;
and
(II) by striking ‘‘a deposit insurance fund’’ and
inserting ‘‘the Deposit Insurance Fund’’;
(vii) in paragraph (3)—
(I) in the paragraph heading, by striking
‘‘FUNDS’’ and inserting ‘‘FUND’’;
(II) by striking ‘‘that fund’’ each place such
term appears and inserting ‘‘the Deposit Insurance
Fund’’;
(III) in subparagraph (A), by striking ‘‘Except
as provided in paragraph (2)(F), if’’ and inserting
‘‘If’’;
(IV) in subparagraph (A), by striking ‘‘any
deposit insurance fund’’ and inserting ‘‘the Deposit
Insurance Fund’’; and
(V) by striking subparagraphs (C) and (D) and
inserting the following:
‘‘(C) AMENDING SCHEDULE.—The Corporation may, by
regulation, amend a schedule promulgated under subpara-
graph (B).’’; and
(viii) in paragraph (6)—
(I) by striking ‘‘any such assessment’’ and
inserting ‘‘any such assessment is necessary’’;
(II) by striking ‘‘(A) is necessary—’’;
(III) by striking subparagraph (B);
(IV) by redesignating clauses (i), (ii), and (iii)
as subparagraphs (A), (B), and (C), respectively,
and moving the margins 2 ems to the left; and
(V) in subparagraph (C) (as redesignated), by
striking ‘‘; and’’ and inserting a period;
(H) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), by striking
‘‘, except that—’’ and all that follows through the end
of the paragraph and inserting a period;
(I) in section 11(i)(3) (12 U.S.C. 1821(i)(3))—
(i) by striking subparagraph (B);
(ii) by redesignating subparagraph (C) as subpara-
graph (B); and
(iii) in subparagraph (B) (as redesignated), by
striking ‘‘subparagraphs (A) and (B)’’ and inserting
‘‘subparagraph (A)’’;
(J) in section 11A(a) (12 U.S.C. 1821a(a))—
(i) 
in 
paragraph 
(2), 
by 
striking
‘‘LIABILITIES.—’’ and all that follows through ‘‘Except’’
and inserting ‘‘LIABILITIES.—Except’’;
(ii) by striking paragraph (2)(B); and
H. R. 2491—46
(iii) in paragraph (3), by striking ‘‘the Bank Insur-
ance Fund, the Savings Association Insurance Fund,’’
and inserting ‘‘the Deposit Insurance Fund’’;
(K) in section 11A(b) (12 U.S.C. 1821a(b)), by striking
paragraph (4);
(L) in section 11A(f) (12 U.S.C. 1821a(f)), by striking
‘‘Savings Association Insurance Fund’’ and inserting
‘‘Deposit Insurance Fund’’;
(M) in section 13 (12 U.S.C. 1823)—
(i) in subsection (a)(1), by striking ‘‘Bank Insurance
Fund, the Savings Association Insurance Fund,’’ and
inserting ‘‘Deposit Insurance Fund, the Special Reserve
of the Deposit Insurance Fund,’’;
(ii) in subsection (c)(4)(E)—
(I) in the subparagraph heading, by striking
‘‘FUNDS’’ and inserting ‘‘FUND’’; and
(II) in clause (i), by striking ‘‘any insurance
fund’’ and inserting ‘‘the Deposit Insurance Fund’’;
(iii) in subsection (c)(4)(G)(ii)—
(I) by striking ‘‘appropriate insurance fund’’
and inserting ‘‘Deposit Insurance Fund’’;
(II) by striking ‘‘the members of the insurance
fund (of which such institution is a member)’’ and
inserting ‘‘insured depository institutions’’;
(III) by striking ‘‘each member’s’’ and inserting
‘‘each insured depository institution’s’’; and
(IV) by striking ‘‘the member’s’’ each place
such term appears and inserting ‘‘the institution’s’’;
(iv) in subsection (c), by striking paragraph (11);
(v) in subsection (h), by striking ‘‘Bank Insurance
Fund’’ and inserting ‘‘Deposit Insurance Fund’’;
(vi) in subsection (k)(4)(B)(i), by striking ‘‘Savings
Association Insurance Fund’’ and inserting ‘‘Deposit
Insurance Fund’’; and
(vii) in subsection (k)(5)(A), by striking ‘‘Savings
Association Insurance Fund’’ and inserting ‘‘Deposit
Insurance Fund’’;
(N) in section 14(a) (12 U.S.C. 1824(a)) in the fifth
sentence—
(i) by striking ‘‘Bank Insurance Fund or the Sav-
ings Association Insurance Fund’’ and inserting
‘‘Deposit Insurance Fund’’; and
(ii) by striking ‘‘each such fund’’ and inserting ‘‘the
Deposit Insurance Fund’’;
(O) in section 14(b) (12 U.S.C. 1824(b)), by striking
‘‘Bank Insurance Fund or Savings Association Insurance
Fund’’ and inserting ‘‘Deposit Insurance Fund’’;
(P) in section 14(c) (12 U.S.C. 1824(c)), by striking
paragraph (3);
(Q) in section 14(d) (12 U.S.C. 1824(d))—
(i) by striking ‘‘BIF’’ each place such term appears
and inserting ‘‘DIF’’; and
(ii) by striking ‘‘Bank Insurance Fund’’ each place
such term appears and inserting ‘‘Deposit Insurance
Fund’’;
(R) in section 15(c)(5) (12 U.S.C. 1825(c)(5))—
H. R. 2491—47
(i) by striking ‘‘the Bank Insurance Fund or Sav-
ings Association Insurance Fund, respectively’’ each
place such term appears and inserting ‘‘the Deposit
Insurance Fund’’; and
(ii) in subparagraph (B), by striking ‘‘the Bank
Insurance Fund or the Savings Association Insurance
Fund, respectively’’ and inserting ‘‘the Deposit Insur-
ance Fund’’;
(S) in section 17(a) (12 U.S.C. 1827(a))—
(i) in the subsection heading, by striking ‘‘BIF,
SAIF,’’ and inserting ‘‘THE DEPOSIT INSURANCE FUND’’;
and
(ii) in paragraph (1), by striking ‘‘the Bank Insur-
ance Fund, the Savings Association Insurance Fund,’’
each place such term appears and inserting ‘‘the
Deposit Insurance Fund’’;
(T) in section 17(d) (12 U.S.C. 1827(d)), by striking
‘‘the Bank Insurance Fund, the Savings Association Insur-
ance Fund,’’ each place such term appears and inserting
‘‘the Deposit Insurance Fund’’;
(U) in section 18(m)(3) (12 U.S.C. 1828(m)(3))—
(i) by striking ‘‘Savings Association Insurance
Fund’’ each place such term appears and inserting
‘‘Deposit Insurance Fund’’; and
(ii) in subparagraph (C), by striking ‘‘or the Bank
Insurance Fund’’;
(V) in section 18(p) (12 U.S.C. 1828(p)), by striking
‘‘deposit insurance funds’’ and inserting ‘‘Deposit Insurance
Fund’’;
(W) in section 24 (12 U.S.C. 1831a) in subsections
(a)(1) and (d)(1)(A), by striking ‘‘appropriate deposit insur-
ance fund’’ each place such term appears and inserting
‘‘Deposit Insurance Fund’’;
(X) in section 28 (12 U.S.C. 1831e), by striking ‘‘affected
deposit insurance fund’’ each place such term appears and
inserting ‘‘Deposit Insurance Fund’’;
(Y) by striking section 31 (12 U.S.C. 1831h);
(Z) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)) by striking
‘‘affected deposit insurance fund’’ and inserting ‘‘Deposit
Insurance Fund’’;
(AA) in section 38(a) (12 U.S.C. 1831o(a)) in the sub-
section heading, by striking ‘‘FUNDS’’ and inserting ‘‘FUND’’;
(BB) in section 38(k) (12 U.S.C. 1831o(k))—
(i) in paragraph (1), by striking ‘‘a deposit insur-
ance fund’’ and inserting ‘‘the Deposit Insurance Fund’’;
and
(ii) in paragraph (2)(A)—
(I) by striking ‘‘A deposit insurance fund’’ and
inserting ‘‘The Deposit Insurance Fund’’; and
(II) by striking ‘‘the deposit insurance fund’s
outlays’’ and inserting ‘‘the outlays of the Deposit
Insurance Fund’’; and
(CC) in section 38(o) (12 U.S.C. 1831o(o))—
(i) by striking ‘‘ASSOCIATIONS.—’’ and all that fol-
lows 
through 
‘‘Subsections 
(e)(2)’’ 
and 
inserting
‘‘ASSOCIATIONS.—Subsections (e)(2)’’;
H. R. 2491—48
(ii) by redesignating subparagraphs (A), (B), and
(C) as paragraphs (1), (2), and (3), respectively, and
moving the margins 2 ems to the left; and
(iii) in paragraph (1) (as redesignated), by
redesignating clauses (i) and (ii) as subparagraphs (A)
and (B), respectively, and moving the margins 2 ems
to the left.
(15) AMENDMENTS TO THE FINANCIAL INSTITUTIONS REFORM,
RECOVERY, AND
ENFORCEMENT
ACT
OF
1989.—The Financial
Institutions Reform, Recovery, and Enforcement Act (Public
Law 101–73; 103 Stat. 183) is amended—
(A) in section 951(b)(3)(B) (12 U.S.C. 1833a(b)(3)(B)),
by striking ‘‘Bank Insurance Fund, the Savings Association
Insurance Fund,’’ and inserting ‘‘Deposit Insurance Fund’’;
and
(B) in section 1112(c)(1)(B) (12 U.S.C. 3341(c)(1)(B)),
by striking ‘‘Bank Insurance Fund, the Savings Association
Insurance Fund,’’ and inserting ‘‘Deposit Insurance Fund’’.
(16) AMENDMENT TO THE BANK ENTERPRISE ACT OF 1991.—
Section 232(a)(1) of the Bank Enterprise Act of 1991 (12 U.S.C.
1834(a)(1)) is amended by striking ‘‘section 7(b)(2)(H)’’ and
inserting ‘‘section 7(b)(2)(G)’’.
(17) AMENDMENT TO THE BANK HOLDING COMPANY ACT.—
Section 2(j)(2) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(j)(2)) is amended by striking ‘‘Savings Association
Insurance Fund’’ and inserting ‘‘Deposit Insurance Fund’’.
SEC. 2014. CREATION OF SAIF SPECIAL RESERVE.
Section 11(a)(6) of the Federal Deposit Insurance Act (12 U.S.C.
1821(a)(6)) is amended by adding at the end the following new
subparagraph:
‘‘(L) ESTABLISHMENT OF SAIF SPECIAL RESERVE.—
‘‘(i) ESTABLISHMENT.—If, on January 1, 1998, the
reserve ratio of the Savings Association Insurance Fund
exceeds the designated reserve ratio, there is established
a Special Reserve of the Savings Association Insurance
Fund, which shall be administered by the Corporation and
shall be invested in accordance with section 13(a).
‘‘(ii) AMOUNTS
IN
SPECIAL
RESERVE.—If, on January
1, 1998, the reserve ratio of the Savings Association Insur-
ance Fund exceeds the designated reserve ratio, the amount
by which the reserve ratio exceeds the designated reserve
ratio shall be placed in the Special Reserve of the Savings
Association Insurance Fund established by clause (i).
‘‘(iii) LIMITATION.—The Corporation shall not provide
any assessment credit, refund, or other payment from any
amount in the Special Reserve of the Savings Association
Insurance Fund.
‘‘(iv) EMERGENCY USE OF SPECIAL RESERVE.—Notwith-
standing clause (iii), the Corporation may, in its sole discre-
tion, transfer amounts from the Special Reserve of the
Savings Association Insurance Fund to the Savings Associa-
tion Insurance Fund for the purposes set forth in paragraph
(4), only if—
‘‘(I) the reserve ratio of the Savings Association
Insurance Fund is less than 50 percent of the des-
ignated reserve ratio; and
H. R. 2491—49
‘‘(II) the Corporation expects the reserve ratio of
the Savings Association Insurance Fund to remain at
less than 50 percent of the designated reserve ratio
for each of the next 4 calendar quarters.
‘‘(v) EXCLUSION OF SPECIAL RESERVE IN CALCULATING
RESERVE RATIO.—Notwithstanding any other provision of
law, any amounts in the Special Reserve of the Savings
Association Insurance Fund shall be excluded in calculating
the reserve ratio of the Savings Association Insurance
Fund.’’.
SEC. 2015. REFUND OF AMOUNTS IN DEPOSIT INSURANCE FUND IN
EXCESS OF DESIGNATED RESERVE AMOUNT.
Subsection (e) of section 7 of the Federal Deposit Insurance
Act (12 U.S.C. 1817(e)) is amended to read as follows:
‘‘(e) REFUNDS.—
‘‘(1) OVERPAYMENTS.—In the case of any payment of an
assessment by an insured depository institution in excess of
the amount due to the Corporation, the Corporation may—
‘‘(A) refund the amount of the excess payment to the
insured depository institution; or
‘‘(B) credit such excess amount toward the payment
of subsequent semiannual assessments until such credit
is exhausted.
‘‘(2) BALANCE IN INSURANCE FUND IN EXCESS OF DESIGNATED
RESERVE.—
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and
(C), if, as of the end of any semiannual assessment period,
the amount of the actual reserves in—
‘‘(i) the Bank Insurance Fund (until the merger
of such fund into the Deposit Insurance Fund pursuant
to section 2013 of the Balanced Budget Act of 1995);
or
‘‘(ii) the Deposit Insurance Fund (after the
establishment of such fund),
exceeds the balance required to meet the designated reserve
ratio applicable with respect to such fund, such excess
amount shall be refunded to insured depository institutions
by the Corporation on such basis as the Board of Directors
determines to be appropriate, taking into account the fac-
tors considered under the risk-based assessment system.
‘‘(B) REFUND NOT TO EXCEED PREVIOUS SEMIANNUAL
ASSESSMENT.—The amount of any refund under this para-
graph to any member of a deposit insurance fund for any
semiannual assessment period may not exceed the total
amount of assessments paid by such member to the insur-
ance fund with respect to such period.
‘‘(C) REFUND LIMITATION FOR CERTAIN INSTITUTIONS.—
No refund may be made under this paragraph with respect
to the amount of any assessment paid for any semiannual
assessment period by any insured depository institution
described in clause (v) of subsection (b)(2)(A).’’.
SEC. 2016. ASSESSMENT RATES FOR SAIF MEMBERS MAY NOT BE LESS
THAN ASSESSMENT RATES FOR BIF MEMBERS.
Section 7(b)(2)(C) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)(2)(E), as redesignated by section 2013(d)(6) of this
Act) is amended—
H. R. 2491—50
(1) by striking ‘‘and’’ at the end of clause (i);
(2) by striking the period at the end of clause (ii) and
inserting ‘‘; and’’; and
(3) by adding at the end the following new clause:
‘‘(iii) notwithstanding any other provision of this
subsection, during the period beginning on the date
of enactment of the Balanced Budget Act of 1995,
and ending on January 1, 1998, the assessment rate
for a Savings Association Insurance Fund member may
not be less than the assessment rate for a Bank Insur-
ance Fund member that poses a comparable risk to
the deposit insurance fund.’’.
SEC. 2017. ASSESSMENTS AUTHORIZED ONLY IF NEEDED TO MAINTAIN
THE RESERVE RATIO OF A DEPOSIT INSURANCE FUND.
(a) IN GENERAL.—Section 7(b)(2)(A)(i) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(b)(2)(A)(i)) is amended in the matter
preceding subclause (I) by inserting ‘‘when necessary, and only
to the extent necessary’’ after ‘‘insured depository institutions’’.
(b) LIMITATION ON ASSESSMENT.—Section 7(b)(2)(A)(iii) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(iii)) is
amended to read as follows:
‘‘(iii) LIMITATION ON ASSESSMENT.—Except as pro-
vided in clause (v), the Board of Directors shall not
set semiannual assessments with respect to a deposit
insurance fund in excess of the amount needed—
‘‘(I) to maintain the reserve ratio of the fund
at the designated reserve ratio; or
‘‘(II) if the reserve ratio is less than the des-
ignated reserve ratio, to increase the reserve ratio
to the designated reserve ratio.’’.
(c) EXCEPTION
TO
LIMITATION
ON
ASSESSMENTS.—Section
7(b)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C.
1817(b)(2)(A)) is amended by adding at the end the following new
clause:
‘‘(v) EXCEPTION TO LIMITATION ON ASSESSMENTS.—
The Board of Directors may set semiannual assess-
ments in excess of the amount permitted under clauses
(i) and (iii) with respect to insured depository institu-
tions that exhibit financial, operational, or compliance
weaknesses ranging from moderately severe to unsatis-
factory, or are not well capitalized, as that term is
defined in section 38.’’.
SEC. 2018. LIMITATION ON AUTHORITY OF OVERSIGHT BOARD TO CON-
TINUE TO EMPLOY MORE THAN 18 OFFICERS AND
EMPLOYEES.
(a) IN GENERAL.—Section 21A(a) of the Federal Home Loan
Bank Act (12 U.S.C. 1441a(a)) is amended by adding at the end
the following new paragraph:
‘‘(17) PHASED-DOWN OPERATION OF OVERSIGHT BOARD FOL-
LOWING TERMINATION OF CORPORATION.—
‘‘(A) TERMINATION OF AUTHORITY TO EMPLOY STAFF.—
Except as provided in subparagraph (B), the authority of
the Thrift Depositor Protection Oversight Board under
paragraph (5) to establish officer and employee positions,
to compensate officers and employees of the Board, and
H. R. 2491—51
to provide other benefits for officers and employees of the
Board shall terminate as of December 31, 1995.
‘‘(B) LIMITED AUTHORITY FOR EMPLOYING STAFF.—The
Thrift Depositor Protection Oversight Board may employ
not more than 18 individuals, excluding any employee of
any other department or agency utilized by the Board,
to carry out the functions of the Board during the period
beginning on January 1, 1996 and ending on May 1, 1996,
other than employees whose employment is in the process
of being terminated in accordance with subparagraph (C).
‘‘(C) TERMINATION
OF
EMPLOYMENT
OF
ADDITIONAL
EMPLOYEES
REQUIRED
TO
BE
COMMENCED.—The Thrift
Depositor Protection Oversight Board shall commence
terminating, not later than December 31, 1995, and in
accordance with title 5, United States Code, and applicable
regulations of the Office of Personnel Management, the
employment of any employee of the Board whose continued
employment by the Board after such date is inconsistent
with the requirement of subparagraph (B).’’.
(b) 
TECHNICAL
AND
CONFORMING
AMENDMENTS.—Section
21A(a)(5) of the Federal Home Loan Bank Act (12 U.S.C.
1441a(a)(5)) is amended in subparagraphs (B), (C), (D), and (E),
by inserting ‘‘subject to paragraph (17),’’ after the closing paren-
thesis of the subparagraph designation in each such subparagraph.
SEC. 2019. DEFINITIONS.
For purposes of this subtitle—
(1) the term ‘‘Bank Insurance Fund’’ means the fund estab-
lished pursuant to section (11)(a)(5)(A) of the Federal Deposit
Insurance Act, as that section existed on the day before the
date of enactment of this Act;
(2) the terms ‘‘Bank Insurance Fund member’’ and ‘‘Savings
Association Insurance Fund member’’ have the same meanings
as in section 7(l) of the Federal Deposit Insurance Act;
(3) the terms ‘‘bank’’, ‘‘Board of Directors’’, ‘‘Corporation’’,
‘‘insured depository institution’’, ‘‘Federal savings association’’,
‘‘savings association’’, ‘‘State savings bank’’, and ‘‘State deposi-
tory institution’’ have the same meanings as in section 3 of
the Federal Deposit Insurance Act;
(4) the term ‘‘Deposit Insurance Fund’’ means the fund
established under section 11(a)(4) of the Federal Deposit Insur-
ance Act, as amended by section 2013(d) of this Act;
(5) the term ‘‘depository institution holding company’’ has
the same meaning as in section 3 of the Federal Deposit Insur-
ance Act;
(6) the term ‘‘designated reserve ratio’’ has the same mean-
ing as in section 7(b)(2)(A)(iv) of the Federal Deposit Insurance
Act;
(7) the term ‘‘Savings Association Insurance Fund’’ means
the fund established pursuant to section 11(a)(6)(A) of the Fed-
eral Deposit Insurance Act, as that section existed on the
day before the date of enactment of this Act; and
(8) the term ‘‘SAIF-assessable deposit’’ means—
(A) a deposit that is subject to assessment for purposes
of the Savings Association Insurance Fund under the Fed-
eral Deposit Insurance Act; and
H. R. 2491—52
(B) a deposit that section 5(d)(3) of the Federal Deposit
Insurance Act treats as insured by the Savings Association
Insurance Fund.
Subtitle B—Housing
SEC. 2051. ANNUAL ADJUSTMENT FACTORS FOR OPERATING COSTS
ONLY; RESTRAINT ON RENT INCREASES.
(a) ANNUAL
ADJUSTMENT
FACTORS
FOR
OPERATING
COSTS
ONLY.—Section 8(c)(2)(A) of the United States Housing Act of 1937
(42 U.S.C. 1437f(c)(2)(A)) is amended—
(1) by striking ‘‘(2)(A)’’ and inserting ‘‘(2)(A)(i)’’;
(2) by striking the second sentence and all that follows
through the end of the subparagraph; and
(3) by adding at the end the following new clause:
‘‘(ii) Each assistance contract under this section shall provide
that—
‘‘(I) if the maximum monthly rent for a unit in a new
construction or substantial rehabilitation project to be adjusted
using an annual adjustment factor exceeds 100 percent of the
fair market rent for an existing dwelling unit in the market
area, the Secretary shall adjust the rent using an operating
costs factor that increases the rent to reflect increases in operat-
ing costs in the market area; and
‘‘(II) if the owner of a unit in a project described in
subclause (I) demonstrates that the adjusted rent determined
under subclause (I) would not exceed the rent for an unassisted
unit of similar quality, type, and age in the same market
area, as determined by the Secretary, the Secretary shall use
the otherwise applicable annual adjustment factor.’’.
(b) RESTRAINT
ON
SECTION
8 RENT
INCREASES.—Section
8(c)(2)(A) of the United States Housing Act of 1937 (42 U.S.C.
1437f(c)(2)(A)), as amended by subsection (a), is amended by adding
at the end the following new clause:
‘‘(iii)(I) Subject to subclause (II), with respect to any unit
assisted under this section that is occupied by the same family
at the time of the most recent annual rental adjustment, if the
assistance contract provides for the adjustment of the maximum
monthly rent by applying an annual adjustment factor, and if
the rent for the unit is otherwise eligible for an adjustment based
on the full amount of the annual adjustment factor, 0.01 shall
be subtracted from the amount of the annual adjustment factor,
except that the annual adjustment factor shall not be reduced
to less than 1.0.
‘‘(II) With respect to any unit described in subclause (I) that
is assisted under the certificate program, the adjusted rent shall
not exceed the rent for a comparable unassisted unit of similar
quality, type, and age in the market area in which the unit is
located.’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall become effective on October 1, 1995.
SEC. 2052. FORECLOSURE AVOIDANCE AND BORROWER ASSISTANCE.
(a) FORECLOSURE AVOIDANCE.—Except as provided in sub-
section (e), the last sentence of section 204(a) of the National
Housing Act (12 U.S.C. 1710(a)) is amended by inserting before
H. R. 2491—53
the period the following: ‘‘: And provided further, That the Secretary
may pay insurance benefits to the mortgagee to recompense the
mortgagee for its actions to provide an alternative to foreclosure
of a mortgage that is in default, which actions may include such
actions as special forbearance, loan modification, and deeds in lieu
of foreclosure, all upon such terms and conditions as the mortgagee
shall determine in the mortgagee’s sole discretion within guidelines
provided by the Secretary, but which may not include assignment
of a mortgage to the Secretary: And provided further, That for
purposes of the preceding proviso, no action authorized by the
Secretary and no action taken, nor any failure to act, by the Sec-
retary or the mortgagee shall be subject to judicial review’’.
(b) AUTHORITY TO ASSIST MORTGAGORS IN DEFAULT.—Except
as provided in subsection (e), section 230 of the National Housing
Act (12 U.S.C. 1715u) is amended to read as follows:
‘‘AUTHORITY TO ASSIST MORTGAGORS IN DEFAULT
‘‘SEC. 230. (a) PAYMENT
OF PARTIAL CLAIM.—The Secretary
may establish a program for payment of a partial insurance claim
to a mortgagee that agrees to apply the claim amount to payment
of a mortgage on a 1- to 4-family residence that is in default.
Any such payment under such program to the mortgagee shall
be made in the Secretary’s sole discretion and on terms and condi-
tions acceptable to the Secretary, except that—
‘‘(1) the amount of the payment shall be in an amount
determined by the Secretary, which shall not exceed an amount
equivalent to 12 monthly mortgage payments and any costs
related to the default that are approved by the Secretary;
and
‘‘(2) the mortgagor shall agree to repay the amount of
the insurance claim to the Secretary upon terms and conditions
acceptable to the Secretary.
The Secretary may pay the mortgagee, from the appropriate insur-
ance fund, in connection with any activities that the mortgagee
is required to undertake concerning repayment by the mortgagor
of the amount owed to the Secretary.
‘‘(b) ASSIGNMENT.—
‘‘(1) PROGRAM AUTHORITY.—The Secretary may establish
a program for assignment to the Secretary, upon request of
the mortgagee, of a mortgage on a 1- to 4-family residence
insured under this Act.
‘‘(2) PROGRAM REQUIREMENTS.—The Secretary may accept
assignment of a mortgage under a program under this sub-
section only if—
‘‘(A) the mortgage was in default;
‘‘(B) the mortgagee has modified the mortgage to cure
the default and provide for mortgage payments within the
reasonable ability of the mortgagor to pay at interest rates
not exceeding current market interest rates; and
‘‘(C) the Secretary arranges for servicing of the
assigned mortgage by a mortgagee (which may include
the assigning mortgagee) through procedures that the Sec-
retary has determined to be in the best interests of the
appropriate insurance fund.
‘‘(3) PAYMENT
OF
INSURANCE
BENEFITS.—Upon accepting
assignment of a mortgage under the program under this sub-
section, the Secretary may pay insurance benefits to the mort-
H. R. 2491—54
gagee from the appropriate insurance fund in an amount that
the Secretary determines to be appropriate, but which may
not exceed the amount necessary to compensate the mortgagee
for the assignment and any losses and expenses resulting from
the mortgage modification.
‘‘(c) PROHIBITION
OF JUDICIAL REVIEW.—No decision by the
Secretary to exercise or forego exercising any authority under this
section shall be subject to judicial review.
‘‘(d) SAVINGS PROVISION.—Any mortgage for which the mortga-
gor has applied to the Secretary, before the date of the enactment
of the Balanced Budget Act of 1995, for assignment pursuant to
subsection (b) of this section as in effect before such date of enact-
ment shall continue to be governed by the provisions of this section
in effect immediately before such date of enactment.
‘‘(e) APPLICABILITY OF OTHER LAWS.—No provision of this Act
or any other law shall be construed to require the Secretary to
provide an alternative to foreclosure for mortgagees with mortgages
on 1- to 4-family residences insured by the Secretary under this
Act, or to accept assignments of such mortgages.’’.
(c) APPLICABILITY OF AMENDMENTS.—Except as provided in sub-
section (e), the amendments made by subsections (a) and (b) shall
apply only with respect to mortgages insured under the National
Housing Act that are originated on or after October 1, 1995.
(d) REGULATIONS.—Not later than the expiration of the 60-
day period beginning on the date of the enactment of this Act,
the Secretary of Housing and Urban Development shall issue
interim regulations to implement this section and the amendments
made by this section.
(e) EFFECTIVENESS AND APPLICABILITY.—If this Act is enacted
after the date of the enactment of the Departments of Veterans
Affairs and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1996—
(1) subsections (a), (b), (c), and (d) of this section shall
not take effect; and
(2) subsection (c) of the section relating to foreclosure avoid-
ance and borrower assistance in title II of the Departments
of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1996, is amended
by striking ‘‘only with respect to mortgages insured under the
National Housing Act that are originated before October 1,
1995’’ and inserting ‘‘to mortgages originated before, on, and
after October 1, 1995’’.
TITLE III—COMMUNICATIONS AND
SPECTRUM ALLOCATION PROVISIONS
SEC. 3001. SPECTRUM AUCTIONS.
(a) EXTENSION AND EXPANSION OF AUCTION AUTHORITY.—
(1) AMENDMENTS.—Section 309(j) of the Communications
Act of 1934 (47 U.S.C. 309(j)) is amended—
(A) by striking paragraphs (1) and (2) and inserting
the following:
‘‘(1) GENERAL AUTHORITY.—If, consistent with the obliga-
tions described in paragraph (6)(E), mutually exclusive applica-
tions are accepted for any initial license or construction permit,
then the Commission shall grant such license or permit to
H. R. 2491—55
a qualified applicant through a system of competitive bidding
that meets the requirements of this subsection.
‘‘(2) EXEMPTIONS.—The competitive bidding authority
granted by this subsection shall not apply to licenses or
construction permits issued by the Commission—
‘‘(A) that, as the result of the Commission carrying
out the obligations described in paragraph (6)(E), are not
mutually exclusive;
‘‘(B) for public safety radio services, including non-
Government uses the sole or principal purpose of which
is to protect the safety of life, health, and property and
which are not made commercially available to the public;
or
‘‘(C) for initial licenses or construction permits for new
terrestrial digital television services assigned by the
Commission to existing terrestrial broadcast licensees to
replace their current television licenses, unless—
‘‘(i) the Commission, not later than 180 days after
the date of enactment of the Balanced Budget Act
of 1995, after notice and public comment, submits to
Congress a report on the use of the authority provided
in this subsection for the assignment of initial licenses
or construction permits for use of the electromagnetic
spectrum allocated but not assigned as of the date
of enactment of that Act for television broadcast serv-
ices; and
‘‘(ii) the Congress amends this subsection to
authorize the use of the authority provided by this
subsection for such licenses or permits.
Except as provided in this subparagraph, the Commission
may not assign initial licenses or construction permits
under this title to terrestrial commercial television broad-
cast licensees to replace their existing broadcast licenses
before November 15, 1996.’’; and
(B) by striking ‘‘1998’’ in paragraph (11) and inserting
‘‘2002’’.
(2) CONFORMING AMENDMENT.—Subsection (i) of section 309
of such Act is repealed.
(3) EFFECTIVE DATE.—The amendment made by paragraph
(1)(A) shall not apply with respect to any license or permit
for a terrestrial radio or television broadcast station for which
the Federal Communications Commission has accepted mutu-
ally exclusive applications on or before the date of enactment
of this Act.
(b) COMMISSION OBLIGATION TO MAKE ADDITIONAL SPECTRUM
AVAILABLE BY AUCTION.—
(1) IN GENERAL.—The Federal Communications Commis-
sion shall complete all actions necessary to permit the assign-
ment, by September 30, 2002, by competitive bidding pursuant
to section 309(j) of the Communications Act of 1934 (47 U.S.C.
309(j)) of licenses for the use of bands of frequencies that—
(A) individually span not less than 25 megahertz,
unless a combination of smaller bands can, notwithstanding
the provisions of paragraph (7) of such section, reasonably
be expected to produce greater receipts;
(B) in the aggregate span not less than 100 megahertz;
(C) are located below 3 gigahertz; and
H. R. 2491—56
(D) have not, as of the date of enactment of this Act—
(i) been designated by Commission regulation for
assignment pursuant to such section;
(ii) been identified by the Secretary of Commerce
pursuant to section 113 of the National Telecommuni-
cations and Information Administration Organization
Act; or
(iii) been reserved for Federal Government use
pursuant to section 305 of the Communications Act
of 1934 (47 U.S.C. 305).
The Commission shall conduct the competitive bidding for
not less than one-half of such aggregate spectrum by
September 30, 2000.
(2) CRITERIA
FOR
REASSIGNMENT.—In making available
bands of frequencies for competitive bidding pursuant to para-
graph (1), the Commission shall—
(A) seek to promote the most efficient use of the spec-
trum;
(B) take into account the cost to incumbent licensees
of relocating existing uses to other bands of frequencies
or other means of communication;
(C) take into account the needs of public safety radio
services;
(D) comply with the requirements of international
agreements concerning spectrum allocations; and
(E) take into account the costs to satellite service
providers that could result from multiple auctions of like
spectrum internationally for global satellite systems.
(3) NOTIFICATION TO NTIA.—The Commission shall notify
the Secretary of Commerce if—
(A) the Commission is not able to provide for the
effective relocation of incumbent licensees to bands of fre-
quencies that are available to the Commission for assign-
ment; and
(B) the Commission has identified bands of frequencies
that are—
(i) suitable for the relocation of such licensees;
and
(ii) allocated for Federal Government use, but that
could be reallocated pursuant to part B of the National
Telecommunications and Information Administration
Organization Act (as amended by this section).
(c) IDENTIFICATION AND REALLOCATION OF FREQUENCIES.—The
National Telecommunications and Information Administration
Organization Act (47 U.S.C. 901 et seq.) is amended—
(1) in section 113, by adding at the end the following
new subsections:
‘‘(f) ADDITIONAL
REALLOCATION
REPORT.—If the Secretary
receives a notice from the Commission pursuant to section
3001(b)(3) of the Balanced Budget Act of 1995, the Secretary shall
prepare and submit to the President and the Congress a report
recommending for reallocation for use other than by Federal
Government stations under section 305 of the 1934 Act (47 U.S.C.
305), bands of frequencies that are suitable for the uses identified
in the Commission’s notice.
‘‘(g) RELOCATION OF FEDERAL GOVERNMENT STATIONS.—
H. R. 2491—57
‘‘(1) IN GENERAL.—In order to expedite the efficient use
of the electromagnetic spectrum and notwithstanding section
3302(b) of title 31, United States Code, any Federal entity
which operates a Federal Government station may accept pay-
ment in advance or in-kind reimbursement of costs, or a com-
bination of payment in advance and in-kind reimbursement,
from any person to defray entirely the expenses of relocating
the Federal entity’s operations from one or more radio spectrum
frequencies to another frequency or frequencies, including, with-
out limitation, the costs of any modification, replacement, or
reissuance of equipment, facilities, operating manuals, regula-
tions, or other expenses incurred by that entity. Any such
payment shall be deposited in the account of such Federal
entity in the Treasury of the United States. Funds deposited
according to this paragraph shall be available, without appro-
priation or fiscal year limitation, only for the operations of
the Federal entity for which such funds were deposited under
this paragraph.
‘‘(2) PROCESS
FOR
RELOCATION.—Any person seeking to
relocate a Federal Government station that has been assigned
a frequency within a band allocated for mixed Federal and
non-Federal use may submit a petition for such relocation to
NTIA. The NTIA shall limit or terminate the Federal Govern-
ment station’s operating license when the following require-
ments are met:
‘‘(A) the person seeking relocation of the Federal
Government station has guaranteed to defray entirely,
through payment in advance, in-kind reimbursement of
costs, or a combination thereof, all relocation costs incurred
by the Federal entity, including all engineering, equipment,
site acquisition and construction, and regulatory fee costs;
‘‘(B) the person seeking relocation completes all activi-
ties necessary for implementing the relocation, including
construction of replacement facilities (if necessary and
appropriate) and identifying and obtaining on the Federal
entity’s behalf new frequencies for use by the relocated
Federal Government station (where such station is not
relocating to spectrum reserved exclusively for Federal use);
‘‘(C) any necessary replacement facilities, equipment
modifications, or other changes have been implemented
and tested to ensure that the Federal Government station
is able to successfully accomplish its purposes; and
‘‘(D) NTIA has determined that the proposed use of
the spectrum frequency band to which the Federal entity
will relocate its operations is—
‘‘(i) consistent with obligations undertaken by the
United States in international agreements and with
United States national security and public safety
interests; and
‘‘(ii) suitable for the technical characteristics of
the band and consistent with other uses of the band.
In exercising its authority under subparagraph (D)(i), NTIA
shall consult with the Secretary of Defense, the Secretary
of State, or other appropriate officers of the Federal Govern-
ment.
‘‘(3) RIGHT TO RECLAIM.—If within one year after the reloca-
tion the Federal Government station demonstrates to the
H. R. 2491—58
Commission that the new facilities or spectrum are not com-
parable to the facilities or spectrum from which the Federal
Government station was relocated, the person seeking such
relocation must take reasonable steps to remedy any defects
or pay the Federal entity for the costs of returning the Federal
Government station to the spectrum from which such station
was relocated.
‘‘(h) FEDERAL ACTION TO EXPEDITE SPECTRUM TRANSFER.—Any
Federal Government station which operates on electromagnetic
spectrum that has been identified for reallocation for mixed Federal
and non-Federal use in any reallocation report under subsection
(a) shall, to the maximum extent practicable through the use of
the authority granted under subsection (g) and any other applicable
provision of law, take action to relocate its spectrum use to other
frequencies that are reserved for Federal use or to consolidate
its spectrum use with other Federal Government stations in a
manner that maximizes the spectrum available for non-Federal
use. Subsection (c)(4) of this section shall not apply to the extent
that a non-Federal user seeks to relocate or relocates a Federal
power agency under subsection (g).
‘‘(i) DEFINITION.—For purposes of this section, the term ‘Federal
entity’ means any department, agency, or other instrumentality
of the Federal Government that utilizes a Government station
license obtained under section 305 of the 1934 Act (47 U.S.C.
305).’’; and
(2) in section 114(a)(1), by striking ‘‘(a) or (d)(1)’’ and insert-
ing ‘‘(a), (d)(1), or (f)’’.
(d) IDENTIFICATION AND REALLOCATION OF AUCTIONABLE FRE-
QUENCIES.—The National Telecommunications and Information
Administration Organization Act (47 U.S.C. 901 et seq.) is
amended—
(1) in section 113(b)—
(A) by striking the heading of paragraph (1) and insert-
ing ‘‘INITIAL REALLOCATION REPORT.—’’;
(B) by inserting ‘‘in the first report required by sub-
section (a)’’ after ‘‘recommend for reallocation’’ in paragraph
(1);
(C) by inserting ‘‘or (3)’’ after ‘‘paragraph (1)’’ each
place it appears in paragraph (2); and
(D) by inserting after paragraph (2) the following new
paragraph:
‘‘(3) SECOND REALLOCATION REPORT.—In accordance with
the provisions of this section, the Secretary shall recommend
for reallocation in the second report required by subsection
(a), for use other than by Federal Government stations under
section 305 of the 1934 Act (47 U.S.C. 305), a single frequency
band that spans not less than an additional 20 megahertz,
that is located below 3 gigahertz, and that meets the criteria
specified in paragraphs (1) through (5) of subsection (a).’’; and
(2) in section 115—
(A) in subsection (b), by striking ‘‘the report required
by section 113(a)’’ and inserting ‘‘the initial reallocation
report required by section 113(a)’’; and
(B) by adding at the end the following new subsection:
‘‘(c) ALLOCATION AND ASSIGNMENT OF FREQUENCIES IDENTIFIED
IN THE SECOND REALLOCATION REPORT.—With respect to the fre-
quencies made available for reallocation pursuant to section
H. R. 2491—59
113(b)(3), the Commission shall, not later than 1 year after receipt
of the second reallocation report required by such section, prepare,
submit to the President and the Congress, and implement, a plan
for the allocation and assignment under the 1934 Act of such
frequencies. Such plan shall propose the immediate allocation and
assignment of all such frequencies in accordance with section 309(j)
of the 1934 Act (47 U.S.C. 309(j)).’’.
TITLE IV—EDUCATION AND RELATED
PROVISIONS
SEC. 4000. TABLE OF CONTENTS.
The table of contents for this title is as follows:
TITLE IV—EDUCATION AND RELATED PROVISIONS
Sec. 4000. Table of contents.
Subtitle A—Higher Education
Sec. 4001. Short title; references; and general effective date.
Sec. 4002. Participation of institutions and administration of loan programs.
Sec. 4003. Loan terms and conditions.
Sec. 4004. Amendments affecting guaranty agencies.
Sec. 4005. Amendments affecting FFELP lenders and loan holders.
Sec. 4006. Connie Lee privatization.
Sec. 4007. Extension of program duration.
Subtitle B—Provisions Relating to the Employee Retirement Income Security Act of
1974
Sec. 4101. Waiver of minimum period for joint and survivor annuity explanation
before annuity starting date.
Subtitle A—Higher Education
SEC. 4001. SHORT TITLE; REFERENCES; AND GENERAL EFFECTIVE
DATE.
(a) SHORT TITLE.—This subtitle may be cited as the ‘‘Student
Loan Reform Act of 1995’’.
(b) REFERENCES.—Except as otherwise expressly provided,
whenever in this subtitle an amendment or repeal is expressed
in terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a section
or other provision of the Higher Education Act of 1965 (20 U.S.C.
1001 et seq.).
(c) GENERAL EFFECTIVE DATE.—Unless otherwise specified in
this subtitle, the amendments made by this subtitle shall take
effect on January 1, 1996.
SEC. 4002. PARTICIPATION OF INSTITUTIONS AND ADMINISTRATION
OF LOAN PROGRAMS.
(a) LIMITATION ON PROPORTION OF LOANS MADE UNDER THE
DIRECT LOAN PROGRAM.—Section 453(a) (20 U.S.C. 1087c(a)) is
amended—
(1) by amending paragraph (2) to read as follows:
‘‘(2) DETERMINATION
OF
NUMBER
OF
AGREEMENTS.—Not-
withstanding any other provision of law, the Secretary may
enter into agreements under subsections (a) and (b) of section
454 with institutions for participation in the direct loan pro-
gram under this part, subject to the following:
H. R. 2491—60
‘‘(A) For academic year 1994–1995, loans made under
this part shall represent not more than 5 percent of new
student loan volume for such year.
‘‘(B) For academic year 1995–1996, loans made under
this part, including Federal Direct Consolidation Loans,
shall represent not more than 30 percent of the new student
loan volume for such year, except that the Secretary shall
not enter into such an agreement with an eligible institu-
tion that has not applied and been accepted for participa-
tion in the direct loan program under this part on or
before September 30, 1995.
‘‘(C) For academic year 1996–1997 and for each
succeeding academic year, loans made under this part,
including Federal Direct Consolidation Loans, shall rep-
resent not more than 10 percent of the new student loan
volume for such year, except that only the 102 eligible
institutions that participated in the direct loan program
under this part for academic year 1994–1995 shall be
eligible to participate in such program for academic year
1996–1997 and for each succeeding academic year.’’;
(2) by striking paragraph (3);
(3) by redesignating paragraph (4) as paragraph (3); and
(4) in the second sentence of paragraph (3) (as redesignated
by paragraph (3)), by striking ‘‘on the most recent program
data available’’ and inserting ‘‘on data from the academic year
preceding the academic year for which the estimate is made’’.
(b) ELIMINATION
OF
CONSCRIPTION.—Section 453(b)(2) (20
U.S.C. 1087c(b)(2)) is amended—
(1) by striking subparagraph (B); and
(2) in subparagraph (A)—
(A) in clause (ii)—
(i) by striking ‘‘beginning’’; and
(ii) by striking ‘‘clause (i); and’’ and inserting
‘‘subparagraph (A).’’;
(B) by redesignating clause (ii) (as amended by
subparagraph (A)) as subparagraph (B); and
(C) by striking ‘‘(i) categorizing’’ and inserting ‘‘cat-
egorizing’’.
(c) CONTROL OF ADMINISTRATIVE EXPENSES.—Section 458 (20
U.S.C. 1087h) is amended—
(1) by amending subsection (a) to read as follows:
‘‘(a) EXPENSES.—
‘‘(1) IN GENERAL.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), each fiscal year there shall be available to the Secretary
from funds not otherwise appropriated, funds to be obli-
gated for subsidy costs under this part for the William
D. Ford Federal Direct Loan Program. There shall also
be available from funds not otherwise appropriated, funds
to be obligated for indirect administrative expenses under
this part and part B, not to exceed (from such funds not
otherwise appropriated) $260,000,000 for fiscal year 1994,
$345,000,000 for fiscal year 1995, $85,000,000 (and such
sums as may be necessary for administrative cost allow-
ances for guaranty agencies for costs accrued prior to Janu-
ary 1, 1996) for fiscal year 1996, and $85,000,000 for each
of the fiscal years 1997 through 2002.
H. R. 2491—61
‘‘(B) REDUCTION.—The amount authorized to be made
available for fiscal year 1997 under subparagraph (A) shall
be reduced by the amount of any unobligated unexpended
funds available to carry out this subsection for any fiscal
year prior to fiscal year 1996.
‘‘(2) DIRECT AND INDIRECT ADMINISTRATIVE EXPENSES.—
‘‘(A) DIRECT ADMINISTRATIVE EXPENSES.—
‘‘(i) IN GENERAL.—For purposes of this subsection
the term ‘direct administrative expenses’ means the
cost under the William D. Ford Federal Direct Loan
Program of—
‘‘(I) activities related to credit extension, loan
origination, loan servicing, management of contrac-
tors, and payments to contractors, other govern-
ment entities, and program participants, under
this part;
‘‘(II) collection of delinquent loans under this
part; and
‘‘(III) write-off and closeout of loans under this
part.
‘‘(ii) CLARIFICATION
WITH
RESPECT
TO
CERTAIN
EXPENSES.—Such term does not include the costs to
the Department of personnel, training, rent, printing,
or other administrative costs, associated with the
activities described in subclause (I), (II), or (III) of
clause (i).
‘‘(B) INDIRECT
ADMINISTRATIVE
EXPENSES.—For pur-
poses of this subsection the term ‘indirect administrative
expenses’ means the cost of—
‘‘(i) personnel engaged in developing program regu-
lations, policy and administrative guidance;
‘‘(ii) audits of institutions and contractors;
‘‘(iii) program reviews; and
‘‘(iv) other oversight of the program under this
part or under part B.
‘‘(3) SUBSIDY
COST.—The term ‘subsidy cost’ means the
estimated long-term cost to the Federal Government of direct
administrative expenses calculated on a net present value
basis.’’; and
(2) by striking subsection (d).
(d) DEFAULT RATE LIMITATIONS ON DIRECT LENDING.—
(1) INSTITUTIONAL ELIGIBILITY BASED ON DEFAULT RATES.—
The 
first 
sentence 
of 
section 
435(a)(2)(A) 
(20 
U.S.C.
1085(a)(2)(A)) is amended by inserting ‘‘or part D’’ after ‘‘under
this part’’.
(2) COHORT DEFAULT RATE.—Section 435(m)(1) (20 U.S.C.
1085(m)(1)) is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘428, 428A, or 428H’’ and inserting
‘‘428, 428A, 428H, or part D (other than Federal Direct
PLUS Loans)’’; and
(ii) by striking ‘‘428C’’ and inserting ‘‘428C or
455(g)’’;
(B) in subparagraph (B)—
(i) by striking ‘‘only’’; and
H. R. 2491—62
(ii) by inserting ‘‘and loans made under part D
determined by the Secretary to be in default,’’ after
‘‘for insurance,’’; and
(C) in subparagraph (C), by striking ‘‘428C’’ and insert-
ing ‘‘428C or 455(g)’’.
(3) DEFAULT RATES AND INCOME CONTINGENT REPAYMENT.—
Section 435(m) (20 U.S.C. 1085(m)) is amended by adding at
the end the following new paragraph:
‘‘(5) DEFAULT RATE AND INCOME CONTINGENT REPAYMENT.—
The Secretary shall prescribe regulations for the calculation
of default rates for loans that are repaid pursuant to income
contingent repayment under this part, which regulations shall
be comparable to regulations for the calculation of default rates
for loans that are repaid pursuant to income contingent repay-
ment under part D.’’.
(4) TERMINATION
OF
INSTITUTIONAL
PARTICIPATION.—Sec-
tion 455 (20 U.S.C. 1087e) is amended by adding at the end
the following new subsection:
‘‘(l) TERMINATION OF INSTITUTIONS FOR HIGH DEFAULT RATES.—
‘‘(1) METHODOLOGY
AND
CRITERIA.—The Secretary shall
develop—
‘‘(A) a methodology for the calculation of institutional
default rates under the loan programs operated pursuant
to this part;
‘‘(B) criteria for the initiation of termination proceed-
ings on the basis of such default rates; and
‘‘(C) procedures for the conduct of such termination
proceedings.
‘‘(2) COMPARABILITY TO PART B.—In developing the meth-
odology, criteria, and procedures required by paragraph (1),
the Secretary, to the maximum extent possible, shall establish
standards for the termination of institutions from participation
in loan programs under this part that are comparable to the
standards established for the termination of institutions from
participation in the loan programs under part B. Such proce-
dures shall include provisions for the appeal of default rate
calculations based on deficiencies in the servicing of loans under
this part that are comparable to the provisions for such appeals
based on deficiencies in the servicing of loans under part B.
‘‘(3) PROMULGATION.—The methodology, criteria, procedures
and standards required by paragraphs (1) and (2) shall be
promulgated in final form not later than 120 days after the
date of enactment of this paragraph.’’.
(e) ELIMINATION OF TRANSITION TO DIRECT LOANS.—The Act
(20 U.S.C. 1001 et seq.) is further amended—
(1) in section 422(c)(7) (20 U.S.C. 1072(c)(7))—
(A) in subparagraph (A), by striking ‘‘during the transi-
tion’’ and all that follows through ‘‘part D of this title’’;
and
(B) 
in 
subparagraph 
(B), 
by 
striking 
‘‘section
428(c)(10)(F)(v)’’ and inserting ‘‘section 428(c)(9)(F)(v)’’;
(2) in section 422(g)(1) (20 U.S.C. 1072(g)(1))—
(A) in the first sentence, by striking ‘‘or the program
authorized by part D of this title’’; and
(B) in the second sentence, by striking ‘‘or the program
authorized by part D of this title’’;
(3) in section 428(c)(8) (20 U.S.C. 1078(c)(8))—
H. R. 2491—63
(A) by striking subparagraph (B); and
(B) by striking ‘‘(A) If’’ and inserting ‘‘If’’;
(4) in section 428(c)(9)(F)(vii) (20 U.S.C. 1078(c)(9)(F)(vii))—
(A) by inserting ‘‘and’’ before ‘‘to avoid disruption’’;
and
(B) by striking ‘‘, and to ensure an orderly transition’’
and all that follows through the end of such clause and
inserting a period;
(5) in section 428(c)(9)(K) (20 U.S.C. 1078(c)(9)(K)), by strik-
ing ‘‘the progress of the transition from the loan programs
under this part to’’ and inserting ‘‘the integrity and administra-
tion of’’;
(6) in section 428(e)(1)(B)(ii) (20 U.S.C. 1078(e)(1)(B)(ii)),
by striking ‘‘during the transition’’ and all that follows through
‘‘under part D of this title’’;
(7) in section 428(e)(3) (20 U.S.C. 1078(e)(3)), by striking
‘‘costs of transition’’ and inserting ‘‘indirect administrative
expenses’’;
(8) in section 428(j)(3) (20 U.S.C. 1078(j)(3))—
(A) in the heading for paragraph (3), by striking ‘‘DUR-
ING TRANSITION TO DIRECT LENDING’’; and
(B) in subparagraph (A), by striking ‘‘during the transi-
tion’’ and all that follows through ‘‘part D of this title’’;
(9) in the heading for paragraph (2) of section 453(c) (20
U.S.C. 1087c(c)), by striking ‘‘TRANSITION’’ and inserting
‘‘INSTITUTIONAL’’;
(10) in the heading for paragraph (3) of section 453(c)
(20 U.S.C. 1087c(c)), by striking ‘‘AFTER TRANSITION’’; and
(11) in section 456(b) (20 U.S.C. 1087f(b))—
(A) in paragraph (3), by inserting ‘‘and’’ after the semi-
colon;
(B) by striking paragraph (4);
(C) by redesignating paragraph (5) as paragraph (4);
and
(D) in paragraph (4) (as redesignated by subparagraph
(C)), by striking ‘‘successful operation’’ and inserting ‘‘integ-
rity and efficiency’’.
(f) FEES FOR ORIGINATION SERVICES.—Section 452 (20 U.S.C.
1087b) is amended—
(1) by striking subsection (b); and
(2) by redesignating subsections (c) and (d) as subsections
(b) and (c), respectively.
(g) RISK
SHARING.—Section 428(n) (20 U.S.C. 1078(n)) is
amended by adding at the end the following new paragraph:
‘‘(5) APPLICABILITY TO PART D LOANS.—The provisions of
this subsection shall apply to institutions of higher education
participating in direct lending under part D with respect to
loans made under such part, and for the purposes of this
paragraph, paragraph (4) shall be applied by inserting ‘or part
D’ after ‘this part’.’’.
(h) TECHNICAL AMENDMENT.—Section 428(b)(1)(X) (20 U.S.C.
1078(b)(1)(X)) is amended by striking ‘‘section 428(c)(10)’’ and insert-
ing ‘‘section 428(c)(9)’’.
SEC. 4003. LOAN TERMS AND CONDITIONS.
(a) COMPARABILITY PROVISIONS.—
H. R. 2491—64
(1) IN GENERAL.—Paragraph (1) of section 455(a) (20 U.S.C.
1087e(a)) is amended to read as follows:
‘‘(1) PARALLEL
TERMS, CONDITIONS, ELIGIBILITY
REQUIRE-
MENTS, BENEFITS AND AMOUNTS.—Unless otherwise specified
in this part, loans made to borrowers under this part shall
have the same terms, conditions, deferments, forbearances,
eligibility requirements, and benefits, be subject to the same
administrative requirements for origination, payment and
processing of applications, be available in the same amounts,
be subject to the same interest rates and same amount of
fees, and have the same repayment plans, as the corresponding
types of loans made to borrowers under sections 428, 428B,
and 428H. The Secretary shall promulgate regulations
implementing this paragraph not later than 120 days after
the date of enactment of the Student Loan Reform Act of
1995.’’.
(2) CONFORMING
AMENDMENTS.—Section 428(b)(1) (20
U.S.C. 1078(b)(1)) is amended—
(A) in subparagraph (D)(ii), by inserting ‘‘(except pursu-
ant to a graduated, income-sensitive, or income contingent
repayment schedule)’’ after ‘‘10 years’’; and
(B) in subparagraph (E)(ii), by inserting ‘‘(except pursu-
ant to a graduated, income-sensitive, or income contingent
repayment schedule)’’ after ‘‘10 years’’.
(b) ABILITY OF PART D BORROWERS TO OBTAIN FEDERAL STAF-
FORD CONSOLIDATION LOANS.—Section 428C(a)(4) (20 U.S.C. 1078–
3(a)(4)) is amended—
(1) by redesignating subparagraphs (B), (C), and (D) as
subparagraphs (C), (D), and (E), respectively; and
(2) by inserting after subparagraph (A) the following new
subparagraph:
‘‘(B) made under part D of this title;’’.
(c) ABILITY OF PART B BORROWERS TO OBTAIN FEDERAL DIRECT
CONSOLIDATION
LOANS.—Paragraph (5) of section 428C(b) (20
U.S.C. 1078–3(b)) is amended to read as follows:
‘‘(5) DIRECT
CONSOLIDATION
LOANS
FOR
BORROWERS
IN
SPECIFIED CIRCUMSTANCES.—
‘‘(A) Subject to subparagraphs (B) and (C) of section
453(a)(2), the Secretary may offer a borrower a Federal
Direct Consolidation loan if such borrower is otherwise
eligible for a consolidation loan pursuant to this section
and such borrower is—
‘‘(i) unable to obtain a consolidation loan from a
lender with an agreement under subsection (a)(1) that
holds one of such borrower’s loans under this part;
or
‘‘(ii) unable to obtain a consolidation loan with
income contingent repayment terms from a lender with
an agreement under subsection (a)(1).
‘‘(B) The Secretary shall establish appropriate certifi-
cation procedures to verify the eligibility of borrowers for
consolidation loans under this paragraph.
‘‘(C) The Secretary shall not offer consolidation loans
under this paragraph if, in the Secretary’s judgment, the
Department does not have the necessary origination and
servicing arrangements in place for such loans, or the
projected volume in such loans will be destabilizing to
H. R. 2491—65
the availability of loans otherwise available under this
part.’’.
(d) INCOME CONTINGENT REPAYMENT IN THE FEDERAL FAMILY
EDUCATION LOAN PROGRAM.—
(1) 
INSURANCE
PROGRAM
AGREEMENTS.—Section
428(b)(1)(E)(i) (20 U.S.C. 1078(b)(1)(E)(i)) is amended by strik-
ing ‘‘or income-sensitive repayment schedule’’ and inserting
‘‘repayment schedule or an income-sensitive repayment sched-
ule, and may, at the discretion of the lender, offer the borrower
the option of repaying the loan in accordance with an income
contingent repayment schedule,’’.
(2) REPAYMENT SCHEDULES.—The matter preceding clause
(i) of section 428C(c)(2)(A) (20 U.S.C. 1078–3(c)(2)(A)) is
amended—
(A) in the first sentence, by striking ‘‘or income-sen-
sitive repayment schedules’’ and inserting ‘‘repayment
schedules or income-sensitive repayment schedules, and
may include, at the discretion of the lender, the establish-
ment of income contingent repayment schedules’’; and
(B) in the second sentence, by striking ‘‘income-sen-
sitive’’ and inserting ‘‘graduated, income-sensitive, or
income contingent’’.
(3) COMPARABLE TERMS AND CONDITIONS.—Section 428(m)
(20 U.S.C. 1078(m)) is amended by adding at the end the
following new paragraph:
‘‘(3) INCOME CONTINGENT REPAYMENT SCHEDULES.—For the
purpose of this part, income contingent repayment schedules
established pursuant to subsection (b)(1)(E)(i) and section
428C(c)(2)(A) shall have terms and conditions comparable to
the terms and conditions established by the Secretary pursuant
to section 455(e)(4). The Secretary shall discharge or cancel
the indebtedness of borrowers that repay pursuant to income
contingent repayment under this part to the same extent, and
under the same circumstances, as the Secretary discharges
or cancels the indebtedness of borrowers that repay pursuant
to income contingent repayment under part D.’’.
(e) PLUS PROGRAM REDUCTIONS.—Section 428B(b) (20 U.S.C.
1078–2(b)) is amended—
(1) by striking ‘‘(b) LIMITATION BASED ON NEED.—’’ and
inserting the following:
‘‘(b) ANNUAL LIMITS.—
‘‘(1) LIMITATION BASED ON NEED.—’’;
(2) by inserting before the last sentence thereof the follow-
ing:
‘‘(3) LIMITATION
COMPUTED
ON
BASIS
OF
ACTUAL
PAY-
MENTS.—’’; and
(3) by inserting before paragraph (3) (as designated by
the amendment made by paragraph (2) of this section) the
following new paragraph:
‘‘(2) DOLLAR
LIMITATION.—Subject to paragraph (1), the
maximum amount parents may borrow for one student in any
academic year or its equivalent (as defined by regulations of
the Secretary) is $15,000.’’.
H. R. 2491—66
SEC. 4004. AMENDMENTS AFFECTING GUARANTY AGENCIES.
(a) USE OF RESERVE FUNDS TO PURCHASE DEFAULTED LOANS.—
Section 422 (20 U.S.C. 1072) is amended by adding at the end
the following new subsection:
‘‘(h) USE
OF
RESERVE
FUNDS
TO
PURCHASE
DEFAULTED
LOANS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
a guaranty agency shall use not less than 50 percent of such
agency’s reserve funds to purchase and hold defaulted loans
that are guaranteed by such agency and for which a claim
for insurance is filed with such agency by an eligible lender.
The amount of such purchases shall be considered as reserve
funds under this section and used in the calculation of the
minimum reserve level under section 428(c)(9).
‘‘(2) SPECIAL
RULE.—A guaranty agency shall not be
required to use its reserve funds to purchase and hold defaulted
loans in accordance with paragraph (1) to the extent that—
‘‘(A) the dollar volume of insurance claims filed with
such agency does not amount to 50 percent of such agency’s
available reserve funds;
‘‘(B) such use is prohibited by State law; or
‘‘(C) such use will compromise the ability of the guar-
anty agency to pay program expenses.’’.
(b) EXTENSION OF PERIOD A GUARANTY AGENCY MUST HOLD
A DEFAULTED LOAN.—
(1) EXEMPTION FOR EXTENDED HOLDING PERIOD.—The last
sentence of section 428(c)(1)(A) (20 U.S.C. 1078(c)(1)(A)) is
amended by striking ‘‘A guaranty agency’’ and inserting ‘‘Except
as provided in section 428K, a guaranty agency’’.
(2) NEW EXTENDED HOLDING PERIOD PROGRAM.—
(A) AMENDMENT.—Part B of title IV (20 U.S.C. 1071
et seq.) is amended by inserting after section 428J the
following new section:
‘‘SEC. 428K. GUARANTOR PURCHASE OF CLAIMS WITH RESERVE
FUNDS.
‘‘(a) LOANS SUBJECT TO EXTENDED HOLDING PERIOD.—Except
as provided in subsection (b), a guaranty agency shall file a claim
for reimbursement with respect to losses (resulting from the default
of a borrower) subject to reimbursement by the Secretary pursuant
to section 428(c)(1) not less than 180 days nor more than 225
days after the guaranty agency discharges such agency’s insurance
obligation on a loan insured under this part. Such claim shall
include losses on the unpaid principal and accrued interest of any
such loan, including interest accrued from the date of such discharge
to the date such agency files the claim for reimbursement from
the Secretary.
‘‘(b) LOANS EXCLUDED FROM EXTENDED HOLDING.—A guaranty
agency may file a claim with respect to losses subject to reimburse-
ment by the Secretary pursuant to section 428(c)(1) prior to 180
days after the date the guaranty agency discharges such agency’s
insurance obligation on a loan insured under this part, if—
‘‘(1) such agency used 50 percent or more of such agency’s
reserve funds to purchase or hold loans in accordance with
section 422(h);
‘‘(2) such claim is based on an inability to locate the bor-
rower and the guaranty agency certifies to the Secretary that—
H. R. 2491—67
‘‘(A) diligent attempts were made to locate the borrower
through the use of reasonable skip-tracing techniques in
accordance with section 428(c)(2)(G); and
‘‘(B) such skip-tracing attempts to locate the borrower
were unsuccessful; or
‘‘(3) the guaranty agency determines that the borrower
is unlikely to possess the financial resources to begin repaying
the loan prior to 180 days after default by the borrower.
‘‘(c) GUARANTY AGENCY EFFORTS DURING EXTENDED HOLDING
PERIOD.—A guaranty agency shall attempt to bring a loan described
in subsection (a) into repayment status during the period prior
to 225 days after the date the guaranty agency discharges its
insurance obligation on such loan, so that no claim for reimburse-
ment by the Secretary is necessary. Upon securing payments satis-
factory to the guaranty agency during such period, such agency
shall, if practicable, sell such loan to an eligible lender. Such loan
shall not be sold to an eligible lender that the guaranty agency
determines has substantially failed to exercise the due diligence
required of lenders under this part.
‘‘(d) REGULATION PROHIBITED.—The Secretary shall not promul-
gate regulations regarding the collection activity of a guaranty
agency with respect to a loan described in subsection (a) for which
reinsurance has not been paid under section 428(c)(1).’’.
(B) EFFECTIVE DATE.—The amendment made by this
paragraph shall apply with respect to loans for which
claims for insurance are filed by eligible lenders on or
after January 1, 1996.
(c) ADMINISTRATIVE COST ALLOWANCE.—Section 428(f)(1) (20
U.S.C. 1078(f)(1)) is amended—
(1) in the matter preceding clause (i) of subparagraph (A),
by striking ‘‘For a fiscal year prior to fiscal year 1994, the’’
and inserting ‘‘The’’; and
(2) by amending subparagraph (B) to read as follows:
‘‘(B)(i) The total amount of payments for any fiscal year
prior to fiscal year 1994 made under this paragraph shall
be equal to 1 percent of the total principal amount of the
loans upon which insurance was issued under this part during
such fiscal year by such guaranty agency.
‘‘(ii) For the period beginning January 1, 1996 and ending
September 30, 1996, and for each fiscal year thereafter, each
guaranty agency shall receive an administrative cost allowance,
payable quarterly, for such fiscal year calculated on the basis
of 0.85 percent of the total principal amount of the loans
upon which insurance was issued under this part during such
fiscal year by such guaranty agency.
‘‘(iii) The guaranty agency shall be deemed to have a
contractual right against the United States to receive payments
according to the provisions of this subparagraph. Payments
shall be made promptly and without administrative delay to
any guaranty agency submitting an accurate and complete
application therefor under this subparagraph.
‘‘(iv) Notwithstanding clauses (ii) and (iii)—
‘‘(I) for each of the fiscal years 1996 through 1998,
the Secretary shall pay an aggregate amount for such
year of not more than $220,000,000 to all guaranty agencies
receiving 
administrative 
cost 
allowances 
under 
this
subparagraph; and
H. R. 2491—68
‘‘(II) for each of the fiscal years 1999 through 2002,
the Secretary shall pay an aggregate amount for such
year of not more than $180,000,000 to all guaranty agencies
receiving 
administrative 
cost 
allowances 
under 
this
subparagraph.’’.
(d) SECRETARY’S
EQUITABLE
SHARE
OF
COLLECTIONS
ON
CONSOLIDATED DEFAULTED LOANS.—Section 428(c)(6)(A) (20 U.S.C.
1078(c)(6)(A)) is amended—
(1) in the matter preceding clause (i)—
(A) by inserting ‘‘or on behalf of’’ after ‘‘made by’’;
and
(B) by inserting ‘‘, including payments made to dis-
charge loans made under this title to obtain a consolidation
loan pursuant to this part or part D,’’ after ‘‘borrower’’;
and
(2) in clause (ii), by inserting after ‘‘an amount equal to’’
the following: ‘‘—
‘‘(I) for defaulted loans consolidated pursuant
to this part or part D on or after January 1,
1996, 18.5 percent of the balance of the principal,
accrued interest, and collection costs, outstanding
at the time of such consolidation; or
‘‘(II) for all other loans,’’.
(e) RESERVE FUND REFORMS.—
(1) STRENGTHENING
AND
STABILIZING
GUARANTY
AGEN-
CIES.—Section 428(c) (20 U.S.C. 1078(c)) is amended—
(A) in paragraph (9)(C)(ii), by striking ‘‘80 percent’’
and inserting ‘‘76 percent’’; and
(B) in paragraph (9)(E)—
(i) in the matter preceding clause (i), by striking
‘‘The Secretary may terminate a’’ and inserting ‘‘After
providing a guaranty agency notice and opportunity
for a hearing on the record, the Secretary may termi-
nate such’’;
(ii) in clause (iv), by inserting ‘‘or’’ after the semi-
colon;
(iii) by striking clause (vi); and
(iv) in clause (v), by striking ‘‘; or’’ and inserting
a period.
(2) ADDITIONAL
AMENDMENTS.—Section 422 (20 U.S.C.
1072) is further amended—
(A) in the last sentence of subsection (a)(2), by striking
‘‘Except as provided in section 428(c)(10) (E) or (F), such’’
and inserting ‘‘Except as provided in subparagraph (E)
or (F) of section 428(c)(9), such’’; and
(B) in subsection (g), by amending paragraph (4) to
read as follows:
‘‘(4) DISPOSITION OF FUNDS RETURNED TO OR RECOVERED
BY THE SECRETARY.—Any funds that are returned to or other-
wise recovered by the Secretary pursuant to this subsection
shall be returned to the Treasury of the United States for
purposes of reducing the Federal debt and shall be deposited
into the special account under section 3113(d) of title 31, United
States Code.’’.
(f) ELIMINATION OF SUPPLEMENTAL PRECLAIMS ASSISTANCE.—
(1) AMENDMENT.—Section 428(l) (20 U.S.C. 1078(l)) is
amended—
H. R. 2491—69
(A) by striking paragraph (2); and
(B) by striking ‘‘(l) PRECLAIMS’’ and all that follows
through ‘‘Upon receipt’’ and inserting the following:
‘‘(l) PRECLAIMS ASSISTANCE
AND SUPPLEMENTAL PRECLAIMS
ASSISTANCE.—Upon receipt’’.
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to loans for which the first delinquency
occurs on or after January 1, 1996.
(g) 
RESERVE
RATIOS.—Section 
428(c)(9)(A) 
(20 
U.S.C.
1078(c)(9)(A)) is amended—
(1) in clause (i), by inserting ‘‘and’’ after the semicolon;
(2) in clause (ii), by striking ‘‘; and’’ and inserting a period;
and
(3) by striking clause (iii).
(h) GUARANTY AGENCY REIMBURSEMENT.—
(1) IN GENERAL.—Section 428(c)(1) (20 U.S.C. 1078(c)(1))
is amended—
(A) in subparagraph (A), by striking ‘‘98 percent’’ and
inserting ‘‘96 percent’’; and
(B) in subparagraph (B)—
(i) in clause (i), by striking ‘‘88 percent’’ and insert-
ing ‘‘86 percent’’; and
(ii) in clause (ii), by striking ‘‘78 percent’’ and
inserting ‘‘76 percent’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall apply with respect to loans for which the first disburse-
ment is made on or after January 1, 1996.
SEC. 4005. AMENDMENTS AFFECTING FFELP LENDERS AND LOAN
HOLDERS.
(a) RISK SHARING BY THE LOAN HOLDERS.—
(1) 
AMENDMENT.—Section 
428(b)(1)(G) 
(20 
U.S.C.
1078(b)(1)(G)) is amended by striking ‘‘not less than 98 percent’’
and inserting ‘‘95 percent’’.
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply with respect to loans for which the first
disbursement is made on or after January 1, 1996.
(b) LENDERS-OF-LAST-RESORT.—Section 428(j)(2) (20 U.S.C.
1078(j)(2)) is amended—
(1) in subparagraph (A), by striking ‘‘60 days’’ and inserting
‘‘15 days’’; and
(2) in subparagraph (B), by striking ‘‘two rejections from
eligible lenders’’ and inserting ‘‘one rejection from an eligible
lender’’.
(c) EXCEPTIONAL PERFORMANCE INSURANCE REDUCTION.—Sec-
tion 428I(b)(1) (20 U.S.C. 1078–9(b)(1)) is amended—
(1) in the paragraph heading, by striking ‘‘100 PERCENT’’;
and
(2) by striking ‘‘100 percent’’ and inserting ‘‘95 percent
(or 100 percent in the case of a lender-of-last-resort)’’.
(d) LOAN FEES FROM LENDERS.—
(1) AMENDMENT.—Section 438(d)(2) (20 U.S.C. 1087–
1(d)(2)) is amended by striking ‘‘0.50 percent’’ and inserting
‘‘0.80 percent’’.
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply with respect to loans for which the first
disbursement is made on or after January 1, 1996.
H. R. 2491—70
(e) LENDER AND HOLDER REBATE.—
(1) AMENDMENT.—Section 438 (20 U.S.C. 1078) is amended
by adding at the end the following new subsection:
‘‘(g) SUBSIDY REBATE ON STAFFORD AND PLUS LOANS.—
‘‘(1) REBATE.—Each holder of a subsidized or unsubsidized
Federal Stafford Loan under this part, or a Federal PLUS
loan under section 428B, shall pay to the Secretary, on June
30 and December 31 of each year, a subsidy rebate in an
amount equal to 0.035 percent of the unpaid principal amount
of each such loan that such holder holds during the repayment
period described in section 428(b)(7), except that, notwithstand-
ing subparagraphs (A), (B), and (C) of section 428(b)(7), such
holder shall pay a subsidy rebate under this paragraph with
respect to such loan during any period of authorized forbear-
ance.
‘‘(2) PAYMENT
OF
REBATE.—The subsidy rebate shall be
paid, to the extent possible, by subtracting from amounts owed
such holder under section 438(b) (after deducting from such
amounts any amount owed by such holder under section 438(d)
for the quarters ending June 30 and December 31, as appro-
priate) the amount of subsidy rebates owed by such holder.
To the extent the amounts owed such holder under section
438(b) (after making the deduction described in the preceding
sentence) are insufficient to pay in full the subsidy rebates
due from such holder, such holder shall pay the insufficiency
by check or wire transfer of funds, in a manner determined
by the Secretary.
‘‘(3) DEPOSIT.—The Secretary shall deposit all subsidy
rebates collected under the second sentence of paragraph (2)
into the insurance fund established in section 431.’’.
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply with respect to loans for which the first
disbursement is made on or after January 1, 1996.
(f) SMALL LENDER AUDIT EXEMPTION.—Section 428(b)(1)(U)(iii)
(20 U.S.C. 1078(b)(1)(U)(iii)) is amended—
(1) by inserting ‘‘in the case of any lender that originates
or holds more than $5,000,000 in principal on loans made
under this title in any fiscal year’’ before ‘‘for (I)’’;
(2) in subclause (I), by inserting ‘‘such’’ before ‘‘lender at
least once’’;
(3) in subclause (II), by inserting ‘‘such’’ before ‘‘a lender
that is audited’’; and
(4) by striking ‘‘if the lender’’ and inserting ‘‘if such lender’’.
SEC. 4006. CONNIE LEE PRIVATIZATION.
(a) STATUS
OF
THE CORPORATION
AND CORPORATE POWERS;
OBLIGATIONS NOT FEDERALLY GUARANTEED.—
(1) STATUS OF THE CORPORATION.—The Corporation shall
not be an agency, instrumentality, or establishment of the
United States Government, nor a Government corporation nor
a Government controlled corporation as such terms are defined
in section 103 of title 5, United States Code. No action under
section 1491 of title 28, United States Code (commonly known
as the Tucker Act) shall be allowable against the United States
based on the actions of the Corporation.
(2) CORPORATE POWERS.—The Corporation shall be subject
to the provisions of this section, and, to the extent not inconsist-
H. R. 2491—71
ent with this section, to the District of Columbia Business
Corporation Act (or the comparable law of another State, if
applicable). The Corporation shall have the powers conferred
upon a corporation by the District of Columbia Business Cor-
poration Act (or such other applicable State law) as from time
to time in effect in order to conduct its affairs as a private,
for-profit corporation and to carry out its purposes and activities
incidental thereto. The Corporation shall have the power to
enter into contracts, to execute instruments, to incur liabilities,
to provide products and services, and to do all things as are
necessary or incidental to the proper management of its affairs
and the efficient operation of a private, for-profit business.
(3) LIMITATION ON OWNERSHIP OF STOCK.—
(A) SECRETARY OF THE TREASURY.—The Secretary of
the Treasury, in completing the sale of stock pursuant
to subsection (c), may not sell or issue the stock held
by the Secretary of Education to an agency, instrumental-
ity, or establishment of the United States Government,
or to a Government corporation or a Government controlled
corporation as such terms are defined in section 103 of
title 5, United States Code, or to a government-sponsored
enterprise as such term is defined in section 622 of title
2, United States Code.
(B) STUDENT LOAN MARKETING ASSOCIATION.—The Stu-
dent Loan Marketing Association shall not increase its
share of the ownership of the Corporation in excess of
42 percent of the shares of stock of the Corporation
outstanding on the date of enactment of this Act. The
Student Loan Marketing Association shall not control the
operation of the Corporation, except that the Student Loan
Marketing Association may participate in the election of
directors as a shareholder, and may continue to exercise
its right to appoint directors under section 754 of the
Higher Education Act of 1965 (20 U.S.C. 1132f–3) as long
as that section is in effect.
(C) PROHIBITION.—Until such time as the Secretary
of the Treasury sells the stock of the Corporation owned
by the Secretary of Education pursuant to subsection (c),
the Student Loan Marketing Association shall not provide
financial support or guarantees to the Corporation.
(D) FINANCIAL
SUPPORT
OR
GUARANTEES.—After the
Secretary of the Treasury sells the stock of the Corporation
owned by the Secretary of Education pursuant to subsection
(c), the Student Loan Marketing Association may provide
financial support or guarantees to the Corporation, if such
support or guarantees are subject to terms and conditions
that are no more advantageous to the Corporation than
the terms and conditions the Student Loan Marketing
Association provides to other entities, including, where
applicable, other monoline financial guaranty corporations
in which the Student Loan Marketing Association has no
ownership interest.
(4) NO FEDERAL GUARANTEE.—
(A) OBLIGATIONS INSURED BY THE CORPORATION.—
(i) FULL
FAITH
AND
CREDIT
OF
THE
UNITED
STATES.—No obligation that is insured, guaranteed, or
otherwise backed by the Corporation shall be deemed
H. R. 2491—72
to be an obligation that is guaranteed by the full
faith and credit of the United States.
(ii) STUDENT LOAN MARKETING ASSOCIATION.—No
obligation that is insured, guaranteed, or otherwise
backed by the Corporation shall be deemed to be an
obligation that is guaranteed by the Student Loan
Marketing Association.
(iii) SPECIAL
RULE.—This paragraph shall not
affect the determination of whether such obligation
is guaranteed for purposes of Federal income taxes.
(B) SECURITIES
OFFERED
BY
THE
CORPORATION.—No
debt or equity securities of the Corporation shall be deemed
to be guaranteed by the full faith and credit of the United
States.
(5) DEFINITION.—The term ‘‘Corporation’’ as used in this
section means the College Construction Loan Insurance
Association as in existence on the day before the date of enact-
ment of this Act, and to any successor corporation.
(b) RELATED PRIVATIZATION REQUIREMENTS.—
(1) NOTICE REQUIREMENTS.—
(A) IN GENERAL.—During the six-year period following
the date of enactment of this Act, the Corporation shall
include, in each of the Corporation’s contracts for the insur-
ance, guarantee, or reinsurance of obligations, and in each
document offering debt or equity securities of the Corpora-
tion a prominent statement providing notice that—
(i) such obligations or such securities, as the case
may be, are not obligations of the United States, nor
are such obligations guaranteed in any way by the
full faith and credit of the United States; and
(ii) the Corporation is not an instrumentality of
the United States.
(B) ADDITIONAL NOTICE.—During the five-year period
following the sale of stock pursuant to subsection (c)(1),
in addition to the notice requirements in subparagraph
(A), the Corporation shall include, in each of the contracts
and documents referred to in such subparagraph, a promi-
nent statement providing notice that the United States
is not an investor in the Corporation.
(2) CORPORATE CHARTER.—The Corporation’s charter shall
be amended as necessary and without delay to conform to
the requirements of this section.
(3) CORPORATE NAME.—The name of the Corporation, or
of any direct or indirect subsidiary thereof, may not contain
the term ‘‘College Construction Loan Insurance Association’’,
or any substantially similar variation thereof.
(4) ARTICLES OF INCORPORATION.—The Corporation shall
amend its articles of incorporation without delay to reflect
that one of the purposes of the Corporation shall be to guaran-
tee, insure, and reinsure bonds, leases, and other evidences
of debt of educational institutions, including Historically Black
Colleges and Universities and other academic institutions which
are ranked in the lower investment grade category using a
nationally recognized credit rating system.
(5) REQUIREMENTS
UNTIL
STOCK
SALE.—Notwithstanding
subsection (d), the requirements of sections 754 and 760 of
the Higher Education Act of 1965 (20 U.S.C. 1132f–3 and
H. R. 2491—73
1132f–9), as such sections were in effect on the day before
the date of enactment of this Act, shall continue to be effective
until the day immediately following the date of closing of the
purchase of the Secretary of Education’s stock (or the date
of closing of the final purchase, in the case of multiple trans-
actions) pursuant to subsection (c)(1) of this Act.
(c) SALE OF FEDERALLY OWNED STOCK.—
(1) SALE OF STOCK REQUIRED.—The Secretary of the Treas-
ury shall sell, pursuant to section 324 of title 31, United States
Code, the stock of the Corporation owned by the Secretary
of Education as soon as possible after the date of enactment
of this Act, but not later than six months after such date.
(2) PURCHASE
BY
THE
CORPORATION.—In the event that
the Secretary of the Treasury is unable to sell the stock, or
any portion thereof, at a price acceptable to the Secretary
of Education and the Secretary of the Treasury, the Corporation
shall purchase, within six months after the date of enactment
of this Act, such stock at a price determined by the Secretary
of the Treasury and acceptable to the Corporation based on
the independent appraisal of one or more nationally recognized
financial firms, except that such price shall not exceed the
value of the Secretary of Education’s stock as determined by
the Congressional Budget Office in House Report 104–153,
dated June 22, 1995.
(3) REIMBURSEMENT OF COSTS OF SALE.—The Secretary of
the Treasury shall be reimbursed from the proceeds of the
sale of the stock under this subsection for all reasonable costs
related to such sale, including all reasonable expenses relating
to one or more independent appraisals under this subsection.
(4) ASSISTANCE
BY
THE
CORPORATION.—The Corporation
shall provide such assistance as the Secretary of the Treasury
and the Secretary of Education may require to facilitate the
sale of the stock under this subsection.
(d) REPEAL OF STATUTORY RESTRICTIONS AND RELATED PROVI-
SIONS.—Part D of title VII of the Higher Education Act of 1965
(20 U.S.C. 1001 et seq.) is repealed.
SEC. 4007. EXTENSION OF PROGRAM DURATION.
Part B of title IV (20 U.S.C. 1071 et seq.) is amended—
(1) in section 424(a) (20 U.S.C. 1074(a)), by striking ‘‘1998’’
and inserting ‘‘2002’’;
(2) in section 428(a)(5) (20 U.S.C. 1078(a)(5))—
(A) by striking ‘‘1998’’ and inserting ‘‘2002’’; and
(B) by striking ‘‘2002’’ and inserting ‘‘2006’’; and
(3) in section 428C(e) (20 U.S.C. 1078–3(e)), by amending
the first sentence to read as follows: ‘‘The authority to make
loans under this section expires at the close of September
30, 2002.’’.