H. R. 2646—22
SEC. 1108. PERIOD OF EFFECTIVENESS.
This subtitle shall be effective beginning with the 2002 crop
year of each covered commodity through the 2007 crop year.
Subtitle B—Marketing Assistance Loans
and Loan Deficiency Payments
SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE
LOANS FOR LOAN COMMODITIES.
(a) NONRECOURSE LOANS AVAILABLE.—
(1) AVAILABILITY.—For each of the 2002 through 2007 crops
of each loan commodity, the Secretary shall make available
to producers on a farm nonrecourse marketing assistance loans
for loan commodities produced on the farm.
(2) TERMS
AND
CONDITIONS.—The marketing assistance
loans shall be made under terms and conditions that are pre-
scribed by the Secretary and at the loan rate established under
section 1202 for the loan commodity.
(b) ELIGIBLE PRODUCTION.—The producers on a farm shall be
eligible for a marketing assistance loan under subsection (a) for
any quantity of a loan commodity produced on the farm.
(c) TREATMENT
OF CERTAIN COMMINGLED COMMODITIES.—In
carrying out this subtitle, the Secretary shall make loans to pro-
ducers on a farm that would be eligible to obtain a marketing
assistance loan, but for the fact the loan commodity owned by
the producers on the farm commingled with loan commodities of
other producers in facilities unlicensed for the storage of agricul-
tural commodities by the Secretary or a State licensing authority,
if the producers obtaining the loan agree to immediately redeem
the loan collateral in accordance with section 166 of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286).
(d) COMPLIANCE WITH CONSERVATION AND WETLANDS REQUIRE-
MENTS.—As a condition of the receipt of a marketing assistance
loan under subsection (a), the producer shall comply with applicable
conservation requirements under subtitle B of title XII of the Food
Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland
protection requirements under subtitle C of title XII of the Act
(16 U.S.C. 3821 et seq.) during the term of the loan.
(e) TERMINATION OF SUPERSEDED LOAN AUTHORITY.—Notwith-
standing section 131 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7231), nonrecourse marketing assist-
ance loans shall not be made for the 2002 crop of loan commodities
under subtitle C of title I of such Act.
SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING ASSISTANCE
LOANS.
(a) 2002 AND 2003 CROP YEARS.—For purposes of the 2002
and 2003 crop years, the loan rate for a marketing assistance
loan under section 1201 for a loan commodity shall be equal to
the following:
(1) In the case of wheat, $2.80 per bushel.
(2) In the case of corn, $1.98 per bushel.
(3) In the case of grain sorghum, $1.98 per bushel.
(4) In the case of barley, $1.88 per bushel.
(5) In the case of oats, $1.35 per bushel.
(6) In the case of upland cotton, $0.52 per pound.
H. R. 2646—23
(7) In the case of extra long staple cotton, $0.7977 per
pound.
(8) In the case of rice, $6.50 per hundredweight.
(9) In the case of soybeans, $5.00 per bushel.
(10) In the case of other oilseeds, $0.0960 per pound.
(11) In the case of graded wool, $1.00 per pound.
(12) In the case of nongraded wool, $0.40 per pound.
(13) In the case of mohair, $4.20 per pound.
(14) In the case of honey, $0.60 per pound.
(15) In the case of dry peas, $6.33 per hundredweight.
(16) In the case of lentils, $11.94 per hundredweight.
(17) In the case of small chickpeas, $7.56 per hundred-
weight.
(b) 2004 THROUGH 2007 CROP YEARS.—For purposes of the
2004 through 2007 crop years, the loan rate for a marketing assist-
ance loan under section 1201 for a loan commodity shall be equal
to the following:
(1) In the case of wheat, $2.75 per bushel.
(2) In the case of corn, $1.95 per bushel.
(3) In the case of grain sorghum, $1.95 per bushel.
(4) In the case of barley, $1.85 per bushel.
(5) In the case of oats, $1.33 per bushel.
(6) In the case of upland cotton, $0.52 per pound.
(7) In the case of extra long staple cotton, $0.7977 per
pound.
(8) In the case of rice, $6.50 per hundredweight.
(9) In the case of soybeans, $5.00 per bushel.
(10) In the case of other oilseeds, $0.0930 per pound.
(11) In the case of graded wool, $1.00 per pound.
(12) In the case of nongraded wool, $0.40 per pound.
(13) In the case of mohair, $4.20 per pound.
(14) In the case of honey, $0.60 per pound.
(15) In the case of dry peas, $6.22 per hundredweight.
(16) In the case of lentils, $11.72 per hundredweight.
(17) In the case of small chickpeas, $7.43 per hundred-
weight.
SEC. 1203. TERM OF LOANS.
(a) TERM OF LOAN.—In the case of each loan commodity, a
marketing assistance loan under section 1201 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.
(b) EXTENSIONS PROHIBITED.—The Secretary may not extend
the term of a marketing assistance loan for any loan commodity.
SEC. 1204. REPAYMENT OF LOANS.
(a) GENERAL RULE.—The Secretary shall permit the producers
on a farm to repay a marketing assistance loan under section
1201 for a loan commodity (other than upland cotton, rice, and
extra long staple cotton) at a rate that is the lesser of—
(1) the loan rate established for the commodity under sec-
tion 1202, plus interest (determined in accordance with section
163 of the Federal Agriculture Improvement and Reform Act
of 1996 (7 U.S.C. 7283)); or
(2) a rate that the Secretary determines will—
(A) minimize potential loan forfeitures;
(B) minimize the accumulation of stocks of the com-
modity by the Federal Government;
H. R. 2646—24
(C) minimize the cost incurred by the Federal Govern-
ment in storing the commodity;
(D) allow the commodity produced in the United States
to be marketed freely and competitively, both domestically
and internationally; and
(E) minimize discrepancies in marketing loan benefits
across State boundaries and across county boundaries.
(b) REPAYMENT RATES FOR UPLAND COTTON AND RICE.—The
Secretary shall permit producers to repay a marketing assistance
loan under section 1201 for upland cotton and rice at a rate that
is the lesser of—
(1) the loan rate established for the commodity under sec-
tion 1202, plus interest (determined in accordance with section
163 of the Federal Agriculture Improvement and Reform Act
of 1996 (7 U.S.C. 7283)); or
(2) the prevailing world market price for the commodity
(adjusted to United States quality and location), as determined
by the Secretary.
(c) REPAYMENT RATES
FOR EXTRA LONG STAPLE COTTON.—
Repayment of a marketing assistance loan for extra long staple
cotton shall be at the loan rate established for the commodity
under section 1202, plus interest (determined in accordance with
section 163 of the Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7283)).
(d) PREVAILING WORLD MARKET PRICE.—For purposes of this
section and section 1207, the Secretary shall prescribe by
regulation—
(1) a formula to determine the prevailing world market
price for upland cotton and rice, adjusted to United States
quality and location; and
(2) a mechanism by which the Secretary shall announce
periodically the prevailing world market price for upland cotton
and rice.
(e) ADJUSTMENT
OF PREVAILING WORLD MARKET PRICE
FOR
UPLAND COTTON.—
(1) IN GENERAL.—During the period beginning on the date
of the enactment of this Act through July 31, 2008, the pre-
vailing world market price for upland cotton (adjusted to United
States quality and location) established under subsection (d)
shall be further adjusted if—
(A) the adjusted prevailing world market price is less
than 115 percent of the loan rate for upland cotton estab-
lished under section 1202, as determined by the Secretary;
and
(B) the Friday through Thursday average price
quotation for the lowest-priced United States growth as
quoted for Middling (M) 13⁄32-inch cotton delivered C.I.F.
Northern Europe is greater than the Friday through Thurs-
day average price of the 5 lowest-priced growths of upland
cotton, as quoted for Middling (M) 13⁄32-inch cotton, deliv-
ered C.I.F. Northern Europe (referred to in this section
as the ‘‘Northern Europe price’’).
(2) FURTHER ADJUSTMENT.—Except as provided in para-
graph (3), the adjusted prevailing world market price for upland
cotton shall be further adjusted on the basis of some or all
of the following data, as available:
(A) The United States share of world exports.
H. R. 2646—25
(B) The current level of cotton export sales and cotton
export shipments.
(C) Other data determined by the Secretary to be rel-
evant in establishing an accurate prevailing world market
price for upland cotton (adjusted to United States quality
and location).
(3) LIMITATION ON FURTHER ADJUSTMENT.—The adjustment
under paragraph (2) may not exceed the difference between—
(A) the Friday through Thursday average price for
the lowest-priced United States growth as quoted for Mid-
dling 13⁄32-inch cotton delivered C.I.F. Northern Europe;
and
(B) the Northern Europe price.
(f) GOOD FAITH EXCEPTION TO BENEFICIAL INTEREST REQUIRE-
MENT.—For the 2001 crop year only, in the case of the producers
on a farm that marketed or otherwise lost beneficial interest in
a loan commodity for which a marketing assistance loan was made
under section 131 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7231) before repaying the loan, the
Secretary shall permit the producers to repay the loan at the
appropriate repayment rate that was in effect for the loan com-
modity under section 134 of that Act (7 U.S.C. 7234) on the date
that the producers lost beneficial interest, as determined by the
Secretary, if the Secretary determines the producers acted in good
faith.
SEC. 1205. LOAN DEFICIENCY PAYMENTS.
(a) AVAILABILITY OF LOAN DEFICIENCY PAYMENTS.—
(1) IN GENERAL.—Except as provided in subsection (d), the
Secretary may make loan deficiency payments available to pro-
ducers on a farm that, although eligible to obtain a marketing
assistance loan under section 1201 with respect to a loan com-
modity, agree to forgo obtaining the loan for the commodity
in return for loan deficiency payments under this section.
(2) UNSHORN PELTS, HAY, AND SILAGE.—Nongraded wool
in the form of unshorn pelts and hay and silage derived from
a loan commodity are not eligible for a marketing assistance
loan under section 1201. However, effective for the 2002
through 2007 crop years, the Secretary may make loan defi-
ciency payments available under this section to producers on
a farm that produce unshorn pelts or hay and silage derived
from a loan commodity.
(b) COMPUTATION.—A loan deficiency payment for a loan com-
modity or commodity referred to in subsection (a)(2) shall be com-
puted by multiplying—
(1) the payment rate determined under subsection (c) for
the commodity; by
(2) the quantity of the commodity produced by the eligible
producers, excluding any quantity for which the producers
obtain a marketing assistance loan under section 1201.
(c) PAYMENT RATE.—
(1) IN GENERAL.—In the case of a loan commodity, the
payment rate shall be the amount by which—
(A) the loan rate established under section 1202 for
the loan commodity; exceeds
(B) the rate at which a marketing assistance loan
for the loan commodity may be repaid under section 1204.
H. R. 2646—26
(2) UNSHORN PELTS.—In the case of unshorn pelts, the
payment rate shall be the amount by which—
(A) the loan rate established under section 1202 for
ungraded wool; exceeds
(B) the rate at which a marketing assistance loan
for ungraded wool may be repaid under section 1204.
(3) HAY AND SILAGE.—In the case of hay or silage derived
from a loan commodity, the payment rate shall be the amount
by which—
(A) the loan rate established under section 1202 for
the loan commodity from which the hay or silage is derived;
exceeds
(B) the rate at which a marketing assistance loan
for the loan commodity may be repaid under section 1204.
(d) EXCEPTION FOR EXTRA LONG STAPLE COTTON.—This section
shall not apply with respect to extra long staple cotton.
(e) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION.—The
Secretary shall determine the amount of the loan deficiency pay-
ment to be made under this section to the producers on a farm
with respect to a quantity of a loan commodity or commodity
referred to in subsection (a)(2) using the payment rate in effect
under subsection (c) as of the date the producers request the pay-
ment.
(f) SPECIAL LOAN DEFICIENCY PAYMENT RULES.—
(1) FIRST-TIME LOAN COMMODITIES.—For the 2002 crop of
wool, mohair, honey, dry peas, lentils and small chickpeas,
in the case of producers of such a crop that would be eligible
for a loan deficiency payment under this section except for
the fact that the producers lost beneficial interest in the crop
prior to the date of publication of the regulations implementing
this section, the producers shall be eligible for a loan deficiency
payment as of the date producers marketed or otherwise lost
beneficial interest in the crop, as determined by the Secretary.
(2) 2001 CROP YEAR.—Section 135 of the Federal Agriculture
Improvement and Reform Act of 1996 (7 U.S.C. 7235) is
amended—
(A) in subsection (a)(2), by striking ‘‘2000 crop year’’
and inserting ‘‘2000 and 2001 crop years’’; and
(B) by adding at the end the following:
‘‘(g) EFFECTIVE DATE FOR PAYMENT RATE DETERMINATION.—
For the 2001 crop year, the Secretary shall determine the amount
of the loan deficiency payment to be made under this section to
the producers on a farm with respect to a quantity of a loan
commodity using the payment rate in effect under subsection (c)
as of the earlier of the following:
‘‘(1) The date on which the producers marketed or otherwise
lost beneficial interest in the crop of the loan commodity, as
determined by the Secretary.
‘‘(2) The date the producers requested the payment.’’.
SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR
GRAZED ACREAGE.
(a) ELIGIBLE PRODUCERS.—
(1) IN GENERAL.—Effective for the 2002 through 2007 crop
years, in the case of a producer that would be eligible for
a loan deficiency payment under section 1205 for wheat, barley,
or oats, but that elects to use acreage planted to the wheat,
H. R. 2646—27
barley, or oats for the grazing of livestock, the Secretary shall
make a payment to the producer under this section if the
producer enters into an agreement with the Secretary to forgo
any other harvesting of the wheat, barley, or oats on that
acreage.
(2) GRAZING OF TRITICALE ACREAGE.—Effective for the 2002
through 2007 crop years, with respect to a producer on a
farm that uses acreage planted to triticale for the grazing
of livestock, the Secretary shall make a payment to the producer
under this section if the producer enters into an agreement
with the Secretary to forgo any other harvesting of triticale
on that acreage.
(b) PAYMENT AMOUNT.—
(1) IN GENERAL.—The amount of a payment made under
this section to a producer on a farm described in subsection
(a)(1) shall be equal to the amount determined by multiplying—
(A) the loan deficiency payment rate determined under
section 1205(c) in effect, as of the date of the agreement,
for the county in which the farm is located; by
(B) the payment quantity determined by multiplying—
(i) the quantity of the grazed acreage on the farm
with respect to which the producer elects to forgo har-
vesting of wheat, barley, or oats; and
(ii) the payment yield in effect for the calculation
of direct payments under subtitle A with respect to
that loan commodity on the farm or, in the case of
a farm without a payment yield for that loan com-
modity, an appropriate yield established by the Sec-
retary in a manner consistent with section 1102(c).
(2) GRAZING OF TRITICALE ACREAGE.—The amount of a pay-
ment made under this section to a producer on a farm described
in subsection (a)(2) shall be equal to the amount determined
by multiplying—
(A) the loan deficiency payment rate determined under
section 1205(c) in effect for wheat, as of the date of the
agreement, for the county in which the farm is located;
by
(B) the payment quantity determined by multiplying—
(i) the quantity of the grazed acreage on the farm
with respect to which the producer elects to forgo har-
vesting of triticale; and
(ii) the payment yield in effect for the calculation
of direct payments under subtitle A with respect to
wheat on the farm or, in the case of a farm without
a payment yield for wheat, an appropriate yield estab-
lished by the Secretary in a manner consistent with
section 1102(c).
(c) TIME, MANNER, AND AVAILABILITY OF PAYMENT.—
(1) TIME AND MANNER.—A payment under this section shall
be made at the same time and in the same manner as loan
deficiency payments are made under section 1205.
(2) AVAILABILITY.—The Secretary shall establish an avail-
ability period for the payments authorized by this section.
In the case of wheat, barley, and oats, the availability period
shall be consistent with the availability period for the com-
modity established by the Secretary for marketing assistance
loans authorized by this subtitle.
H. R. 2646—28
(d) PROHIBITION
ON CROP INSURANCE INDEMNITY
OR NON-
INSURED CROP ASSISTANCE.—A 2002 through 2007 crop of wheat,
barley, oats, or triticale planted on acreage that a producer elects,
in the agreement required by subsection (a), to use for the grazing
of livestock in lieu of any other harvesting of the crop shall not
be eligible for an indemnity under the Federal Crop Insurance
Act (7 U.S.C. 1501 et seq.) or noninsured crop assistance under
section 196 of the Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7333).
SEC. 1207. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND
COTTON.
(a) COTTON USER MARKETING CERTIFICATES.—
(1) ISSUANCE.—During the period beginning on the date
of the enactment of this Act through July 31, 2008, the Sec-
retary shall issue marketing certificates or cash payments,
at the option of the recipient, to domestic users and exporters
for documented purchases by domestic users and sales for
export by exporters made in the week following a consecutive
4-week period in which—
(A) the Friday through Thursday average price
quotation for the lowest-priced United States growth, as
quoted for Middling (M) 13⁄32-inch cotton, delivered C.I.F.
Northern Europe exceeds the Northern Europe price by
more than 1.25 cents per pound; and
(B) the prevailing world market price for upland cotton
(adjusted to United States quality and location) does not
exceed 134 percent of the loan rate for upland cotton estab-
lished under section 1202.
(2) VALUE OF CERTIFICATES OR PAYMENTS.—The value of
the marketing certificates or cash payments shall be based
on the amount of the difference (reduced by 1.25 cents per
pound) in the prices during the fourth week of the consecutive
4-week period multiplied by the quantity of upland cotton
included in the documented sales.
(3) ADMINISTRATION OF MARKETING CERTIFICATES.—
(A) REDEMPTION, MARKETING, OR EXCHANGE.—The Sec-
retary shall establish procedures for redeeming marketing
certificates for cash or marketing or exchange of the certifi-
cates for agricultural commodities owned by the Commodity
Credit Corporation or pledged to the Commodity Credit
Corporation as collateral for a loan in such manner, and
at such price levels, as the Secretary determines will best
effectuate the purposes of cotton user marketing certifi-
cates, including enhancing the competitiveness and market-
ability of United States cotton. Any price restrictions that
would otherwise apply to the disposition of agricultural
commodities by the Commodity Credit Corporation shall
not apply to the redemption of certificates under this sub-
section.
(B) DESIGNATION OF COMMODITIES AND PRODUCTS.—
To the extent practicable, the Secretary shall permit owners
of certificates to designate the commodities and products,
including storage sites, the owners would prefer to receive
in exchange for certificates
(C) TRANSFERS.—Marketing certificates issued to
domestic users and exporters of upland cotton may be
H. R. 2646—29
transferred to other persons in accordance with regulations
issued by the Secretary.
(4) DELAYED APPLICATION OF THRESHOLD.—Through July
31, 2006, the Secretary shall make the calculations under para-
graphs (1)(A) and (2) without regard to the 1.25 cent threshold
provided under those paragraphs.
(b) SPECIAL IMPORT QUOTA.—
(1) ESTABLISHMENT.—
(A) IN GENERAL.—The President shall carry out an
import quota program during the period beginning on the
date of the enactment of this Act through July 31, 2008,
as provided in this subsection.
(B) PROGRAM REQUIREMENTS.—Except as provided in
subparagraph (C), whenever the Secretary determines and
announces that for any consecutive 4-week period, the Fri-
day through Thursday average price quotation for the
lowest-priced United States growth, as quoted for Middling
(M) 13⁄32-inch cotton, delivered C.I.F. Northern Europe,
adjusted for the value of any certificate issued under sub-
section (a), exceeds the Northern Europe price by more
than 1.25 cents per pound, there shall immediately be
in effect a special import quota.
(C) TIGHT DOMESTIC SUPPLY.—During any month for
which the Secretary estimates the season-ending United
States upland cotton stocks-to-use ratio, as determined
under subparagraph (D), to be below 16 percent, the Sec-
retary, in making the determination under subparagraph
(B), shall not adjust 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, for the value of any certificates issued
under subsection (a).
(D) SEASON-ENDING
UNITED
STATES
STOCKS-TO-USE
RATIO.—For the purposes of making estimates under
subparagraph (C), the Secretary shall, on a monthly basis,
estimate and report the season-ending United States
upland cotton stocks-to-use ratio, excluding projected raw
cotton imports but including the quantity of raw cotton
that has been imported into the United States during the
marketing year.
(E) DELAYED
APPLICATION
OF
THRESHOLD.—Through
July 31, 2006, the Secretary shall make the calculation
under subparagraph (B) without regard to the 1.25 cent
threshold provided under that subparagraph.
(2) QUANTITY.—The quota shall be equal to one week’s
consumption of upland cotton by domestic mills at the season-
ally adjusted average rate of the most recent three months
for which data are available.
(3) APPLICATION.—The quota shall apply to upland cotton
purchased not later than 90 days after the date of the Sec-
retary’s announcement under paragraph (1) and entered into
the United States not later than 180 days after the date.
(4) OVERLAP.—A special quota period may be established
that overlaps any existing quota period if required by paragraph
(1), except that a special quota period may not be established
under this subsection if a quota period has been established
under subsection (c).
H. R. 2646—30
(5) PREFERENTIAL TARIFF TREATMENT.—The quantity under
a special import quota shall be considered to be an in-quota
quantity for purposes of—
(A) section 213(d) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2703(d));
(B) section 204 of the Andean Trade Preference Act
(19 U.S.C. 3203);
(C) section 503(d) of the Trade Act of 1974 (19 U.S.C.
2463(d)); and
(D) General Note 3(a)(iv) to the Harmonized Tariff
Schedule.
(6) DEFINITION.—In this subsection, the term ‘‘special
import quota’’ means a quantity of imports that is not subject
to the over-quota tariff rate of a tariff-rate quota.
(7) LIMITATION.—The quantity of cotton entered into the
United States during any marketing year under the special
import quota established under this subsection may not exceed
the equivalent of 5 week’s consumption of upland cotton by
domestic mills at the seasonally adjusted average rate of the
3 months immediately preceding the first special import quota
established in any marketing year.
(c) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND COTTON.—
(1) IN GENERAL.—The President shall carry out an import
quota program that provides that whenever the Secretary 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:
(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
H. R. 2646—31
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 during the most
recent 3 months for which data are available; and
(II) the larger of—
(aa) average exports of upland cotton
during the preceding 6 marketing years; or
(bb) cumulative exports of upland cotton
plus outstanding export sales for the mar-
keting year in which the quota is established.
(iii) LIMITED
GLOBAL
IMPORT
QUOTA.—The term
‘‘limited global import quota’’ means a quantity of
imports that is not subject to the over-quota tariff
rate of a tariff-rate quota.
(E) QUOTA ENTRY PERIOD.—When a quota is 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
(b).
SEC. 1208. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA LONG
STAPLE COTTON.
(a) COMPETITIVENESS PROGRAM.—Notwithstanding any other
provision of law, during the period beginning on the date of the
enactment of this Act through July 31, 2008, the Secretary shall
carry out a program—
(1) to maintain and expand the domestic use of extra long
staple cotton produced in the United States;
(2) to increase exports of extra long staple cotton produced
in the United States; and
(3) to ensure that extra long staple cotton produced in
the United States remains competitive in world markets.
(b) PAYMENTS UNDER PROGRAM; TRIGGER.—Under the program,
the Secretary shall make payments available under this section
whenever—
(1) for a consecutive 4-week period, the world market price
for the lowest priced competing growth of extra long staple
cotton (adjusted to United States quality and location and
for other factors affecting the competitiveness of such cotton),
as determined by the Secretary, is below the prevailing United
States price for a competing growth of extra long staple cotton;
and
(2) the lowest priced competing growth of extra long staple
cotton (adjusted to United States quality and location and
for other factors affecting the competitiveness of such cotton),
H. R. 2646—32
as determined by the Secretary, is less than 134 percent of
the loan rate for extra long staple cotton.
(c) ELIGIBLE RECIPIENTS.—The Secretary shall make payments
available under this section to domestic users of extra long staple
cotton produced in the United States and exporters of extra long
staple cotton produced in the United States that enter into an
agreement with the Commodity Credit Corporation to participate
in the program under this section.
(d) PAYMENT AMOUNT.—Payments under this section shall be
based on the amount of the difference in the prices referred to
in subsection (b)(1) during the fourth week of the consecutive 4-
week period multiplied by the amount of documented purchases
by domestic users and sales for export by exporters made in the
week following such a consecutive 4-week period.
(e) FORM OF PAYMENT.—Payments under this section shall be
made through the issuance of cash or marketing certificates, at
the option of eligible recipients of the payments.
SEC. 1209. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE
FEED GRAINS AND SEED COTTON.
(a) HIGH MOISTURE FEED GRAINS.—
(1) RECOURSE
LOANS
AVAILABLE.—For each of the 2002
through 2007 crops of corn and grain sorghum, the Secretary
shall make available recourse loans, as determined by the
Secretary, to producers on a farm that—
(A) normally harvest all or a portion of their crop
of corn or grain sorghum in a high moisture state;
(B) present—
(i) certified scale tickets from an inspected, cer-
tified commercial scale, including a licensed warehouse,
feedlot, feed mill, distillery, or other similar entity
approved by the Secretary, pursuant to regulations
issued by the Secretary; or
(ii) field or other physical measurements of the
standing or stored crop in regions of the United States,
as determined by the Secretary, that do not have cer-
tified commercial scales from which certified scale
tickets may be obtained within reasonable proximity
of harvest operation;
(C) certify that they were the owners of the feed grain
at the time of delivery to, and that the quantity to be
placed under loan under this subsection was in fact har-
vested on the farm and delivered to, a feedlot, feed mill,
or commercial or on-farm high-moisture storage facility,
or to a facility maintained by the users of corn and grain
sorghum in a high moisture state; and
(D) comply with deadlines established by the Secretary
for harvesting the corn or grain sorghum and submit
applications for loans under this subsection within dead-
lines established by the Secretary.
(2) ELIGIBILITY OF ACQUIRED FEED GRAINS.—A loan under
this subsection shall be made on a quantity of corn or grain
sorghum of the same crop acquired by the producer equivalent
to a quantity determined by multiplying—
(A) the acreage of the corn or grain sorghum in a
high moisture state harvested on the producer’s farm; by
H. R. 2646—33
(B) the lower of the farm program payment yield used
to make counter-cyclical payments under subtitle A or the
actual yield on a field, as determined by the Secretary,
that is similar to the field from which the corn or grain
sorghum was obtained.
(3) HIGH MOISTURE STATE DEFINED.—In this subsection,
the term ‘‘high moisture state’’ means corn or grain sorghum
having a moisture content in excess of Commodity Credit Cor-
poration standards for marketing assistance loans made by
the Secretary under section 1201.
(b) RECOURSE LOANS AVAILABLE FOR SEED COTTON.—For each
of the 2002 through 2007 crops of upland cotton and extra long
staple cotton, the Secretary shall make available recourse seed
cotton loans, as determined by the Secretary, on any production.
(c) REPAYMENT RATES.—Repayment of a recourse loan made
under this section shall be at the loan rate established for the
commodity by the Secretary, plus interest (determined in accordance
with section 163 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7283)).
(d) TERMINATION OF SUPERSEDED LOAN AUTHORITY.—Notwith-
standing section 137 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7237), recourse loans shall not be
made for the 2002 crop of corn, grain sorghum, and seed cotton
under such section.
Subtitle C—Peanuts
SEC. 1301. DEFINITIONS.
In this subtitle:
(1) BASE ACRES FOR PEANUTS.—The term ‘‘base acres for
peanuts’’ means the number of acres assigned to a farm by
historic peanut producers pursuant to section 1302(b).
(2) COUNTER-CYCLICAL
PAYMENT.—The term ‘‘counter-
cyclical payment’’ means a payment made under section 1304.
(3) EFFECTIVE
PRICE.—The term ‘‘effective price’’ means
the price calculated by the Secretary under section 1304 for
peanuts to determine whether counter-cyclical payments are
required to be made under that section for a crop year.
(4) DIRECT PAYMENT.—The term ‘‘direct payment’’ means
a payment made under section 1303.
(5) HISTORIC PEANUT PRODUCER.—The term ‘‘historic pea-
nut producer’’ means a producer on a farm in the United
States that produced or was prevented from planting peanuts
during any or all of the 1998 through 2001 crop years.
(6) PAYMENT ACRES.—The term ‘‘payment acres’’ means—
(A) for the 2002 crop of peanuts, 85 percent of the
average acreage determined under section 1302(a)(2) for
an historic peanut producer; and
(B) for the 2003 through 2007 crops of peanuts, 85
percent of the base acres for peanuts assigned to a farm
under section 1302(b).
(7) PAYMENT YIELD.—The term ‘‘payment yield’’ means the
yield assigned to a farm by historic peanut producers pursuant
to section 1302(b).
(8) PRODUCER.—The term ‘‘producer’’ means an owner,
operator, landlord, tenant, or sharecropper that shares in the
H. R. 2646—34
risk of producing a crop on a farm and is entitled to share
in the crop available for marketing from the farm, or would
have shared had the crop been produced. In determining
whether a grower of hybrid seed is a producer, the Secretary
shall not take into consideration the existence of a hybrid
seed contract and shall ensure that program requirements do
not adversely affect the ability of the grower to receive a pay-
ment under this subtitle.
(9) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Agriculture.
(10) STATE.—The term ‘‘State’’ means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, and any other territory or
possession of the United States.
(11) TARGET PRICE.—The term ‘‘target price’’ means the
price per ton of peanuts used to determine the payment rate
for counter-cyclical payments.
(12) UNITED STATES.—The term ‘‘United States’’, when used
in a geographical sense, means all of the States.
SEC. 1302. ESTABLISHMENT OF PAYMENT YIELD AND BASE ACRES
FOR PEANUTS FOR A FARM.
(a) AVERAGE YIELD AND ACREAGE AVERAGE FOR HISTORIC PEA-
NUT PRODUCERS.—
(1) DETERMINATION OF AVERAGE YIELD.—
(A) IN GENERAL.—The Secretary shall determine, for
each historic peanut producer, the average yield for peanuts
on each farm on which the historic peanut producer planted
peanuts for harvest for the 1998 through 2001 crop years,
excluding any crop year in which the producer did not
plant or was prevented from planting peanuts.
(B) ASSIGNED YIELDS.—For the purposes of determining
the 4-year average yield for an historic peanut producer
under this paragraph, the historic peanut producer may
elect to substitute for a farm, for not more than 3 of
the 1998 through 2001 crop years in which the producer
planted peanuts on the farm, the average yield for peanuts
produced in the county in which the farm is located for
the 1990 through 1997 crop years.
(2) DETERMINATION OF ACREAGE AVERAGE.—
(A) IN GENERAL.—The Secretary shall determine, for
each historic peanut producer, the 4-year average of the
following:
(i) Acreage planted to peanuts on each farm on
which the historic peanut producer planted peanuts
for harvest for the 1998 through 2001 crop years.
(ii) Any acreage on each farm that the historic
peanut producer was prevented from planting to pea-
nuts during the 1998 through 2001 crop years because
of drought, flood, or other natural disaster, or other
condition beyond the control of the historic peanut
producer, as determined by the Secretary.
(B) INCLUSION OF ALL 4 YEARS IN AVERAGE.—For the
purposes of determining the 4-year acreage average for
an historic peanut producer under this paragraph, the Sec-
retary shall not exclude any crop year in which the pro-
ducer did not plant peanuts.
H. R. 2646—35
(C) PROPORTIONAL SHARES.—If more than 1 historic
peanut producer shared in the risk of producing the crop
on a farm, the historic peanut producers shall receive their
proportional share of the number of acres planted (or pre-
vented from being planted) to peanuts for harvest on the
farm based on the sharing arrangement that was in effect
among the producers for the crop.
(3) TIME FOR DETERMINATIONS.—The Secretary shall make
the determinations required by this subsection as soon as prac-
ticable after the date of enactment of this Act.
(4) SPECIAL CONSIDERATIONS.—In making the determina-
tions required by this subsection, the Secretary shall take into
account changes in the number, identity, or interest of pro-
ducers sharing in the risk of producing a peanut crop since
the 1998 crop year, including providing a method for the assign-
ment of average acres and average yield to a farm—
(A) when an historic peanut producer is no longer
living;
(B) when an entity composed of historic peanut pro-
ducers has been dissolved; or
(C) in other appropriate situations, as determined by
the Secretary.
(b) ASSIGNMENT OF AVERAGE YIELDS AND AVERAGE ACREAGE
TO FARMS.—
(1) ASSIGNMENT BY HISTORIC PEANUT PRODUCERS.—The Sec-
retary shall give each historic peanut producer an opportunity
to assign the average peanut yield and average acreage deter-
mined under subsection (a) for each farm of the historic peanut
producer to cropland on that farm or another farm in the
same State or a contiguous State.
(2) 
LIMITATION
ON
ACREAGE
ASSIGNMENT.—Notwith-
standing paragraph (1), the average acreage determined under
subsection (a)(2) for a farm may not be assigned to a farm
in a contiguous State unless—
(A) the historic peanut producer making the assign-
ment produced peanuts in that State during at least 1
of the 1998 through 2001 crop years; or
(B) as of March 31, 2003, the historic peanut producer
is a producer on a farm in that State.
(3) NOTICE OF ASSIGNMENT OPPORTUNITY.—The Secretary
shall provide notice to historic peanut producers regarding their
opportunity to assign average peanut yields and average acre-
ages to farms under paragraph (1). The notice shall include
the following:
(A) Notice that the opportunity to make the assign-
ments is being provided only once.
(B) A description of the limitation in paragraph (2)
on their ability to make the assignments.
(C) Information regarding the manner in which the
assignments must be made and the time periods and
manner in which notice of the assignments must be sub-
mitted to the Secretary.
(4) ASSIGNMENT
DEADLINES.—Not later than March 31,
2003, an historic peanut producer shall submit to the Secretary
notice of the assignments made by the producer under this
subsection. If an historic peanut producer fails to submit the
H. R. 2646—36
notice by that date, the notice shall be submitted in such
other manner as the Secretary may prescribe.
(c) PAYMENT YIELD.—The average of all of the yields assigned
by historic peanut producers under subsection (b) to a farm shall
be considered to be the payment yield for that farm for the purpose
of making direct payments and counter-cyclical payments under
this subtitle.
(d) BASE ACRES FOR PEANUTS.—Subject to subsection (e), the
total number of acres assigned by historic peanut producers under
subsection (b) to a farm shall be considered to be the farm’s base
acres for peanuts for the purpose of making direct payments and
counter-cyclical payments under this subtitle.
(e) TREATMENT OF CONSERVATION RESERVE CONTRACT ACRE-
AGE.—
(1) IN GENERAL.—The Secretary shall provide for an adjust-
ment, as appropriate, in the base acres for peanuts for a farm
whenever either of the following circumstances occur:
(A) A conservation reserve contract entered into under
section 1231 of the Food Security Act of 1985 (16 U.S.C.
3831) with respect to the farm expires or is voluntarily
terminated.
(B) Cropland is released from coverage under a con-
servation reserve contract by the Secretary.
(2) SPECIAL PAYMENT RULES.—For the crop year in which
a base acres for peanuts adjustment under paragraph (1) is
first made, the owner of the farm shall elect to receive either
direct payments and counter-cyclical payments with respect
to the acreage added to the farm under this subsection or
a prorated payment under the conservation reserve contract,
but not both.
(f) PREVENTION OF EXCESS BASE ACRES FOR PEANUTS.—
(1) REQUIRED REDUCTION.—If the sum of the base acres
for peanuts for a farm, together with the acreage described
in paragraph (2), exceeds the actual cropland acreage of the
farm, the Secretary shall reduce the base acres for peanuts
for the farm or the base acres for 1 or more covered commodities
under subtitle A for the farm so that the sum of the base
acres for peanuts and acreage described in paragraph (2) does
not exceed the actual cropland acreage of the farm.
(2) OTHER ACREAGE.—For purposes of paragraph (1), the
Secretary shall include the following:
(A) Any base acres for the farm under subtitle A.
(B) Any acreage on the farm enrolled in the conserva-
tion reserve program or wetlands reserve program under
chapter 1 of subtitle D of title XII of the Food Security
Act of 1985 (16 U.S.C. 3830 et seq.).
(C) Any other acreage on the farm enrolled in a con-
servation program for which payments are made in
exchange for not producing an agricultural commodity on
the acreage.
(3) SELECTION
OF
ACRES.—The Secretary shall give the
owner of the farm the opportunity to select the base acres
for peanuts or the subtitle A base acres against which the
reduction required by paragraph (1) will be made.
(4) 
EXCEPTION
FOR
DOUBLE-CROPPED
ACREAGE.—In
applying paragraph (1), the Secretary shall make an exception
in the case of double cropping, as determined by the Secretary.
H. R. 2646—37
(5) COORDINATED
APPLICATION
OF
REQUIREMENTS.—The
Secretary shall take into account section 1101(g) when applying
the requirements of this subsection.
(g) PERMANENT REDUCTION IN BASE ACRES FOR PEANUTS.—
The owner of a farm may reduce, at any time, the base acres
for peanuts assigned to the farm. The reduction shall be permanent
and made in the manner prescribed by the Secretary.
SEC. 1303. AVAILABILITY OF DIRECT PAYMENTS FOR PEANUTS.
(a) PAYMENT REQUIRED.—
(1) 2002 CROP YEAR.—For the 2002 crop year, the Secretary
shall make direct payments under this section to historic peanut
producers.
(2) SUBSEQUENT CROP YEARS.—For each of the 2003 through
2007 crop years for peanuts, the Secretary shall make direct
payments to the producers on a farm to which a payment
yield and base acres for peanuts are assigned under section
1302.
(b) PAYMENT RATE.—The payment rate used to make direct
payments with respect to peanuts for a crop year shall be equal
to $36 per ton.
(c) PAYMENT AMOUNT FOR 2002 CROP YEAR.—The amount of
the direct payment to be paid to an historic peanut producer for
the 2002 crop of peanuts shall be equal to the product of the
following:
(1) The payment rate specified in subsection (b).
(2) The payment acres of the historic peanut producer.
(3) The average peanut yield determined under section
1302(a)(1) for the historic peanut producer.
(d) PAYMENT AMOUNT
FOR SUBSEQUENT CROP YEARS.—The
amount of the direct payment to be paid to the producers on
a farm for the 2003 through 2007 crops of peanuts shall be equal
to the product of the following:
(1) The payment rate specified in subsection (b).
(2) The payment acres on the farm.
(3) The payment yield for the farm.
(e) TIME FOR PAYMENT.—
(1) IN
GENERAL.—The Secretary shall make direct
payments—
(A) in the case of the 2002 crop year, as soon as
practicable after the date of enactment of this Act; and
(B) in the case of each of the 2003 through 2007
crop years, not later than September 30 of the calendar
year in which the crop is harvested.
(2) ADVANCE PAYMENTS.—At the option of the producers
on a farm, up to 50 percent of the direct payment for any
of the 2003 through 2007 crop years shall be paid to the
producers in advance. The producers shall select the month
within which the advance payment for a crop year will be
made. The month selected may be any month during the period
beginning on December 1 of the calendar year before the cal-
endar year in which the crop is harvested through the month
within which the direct payment would otherwise be made.
The producers may change the selected month for a subsequent
advance payment by providing advance notice to the Secretary.
(3) REPAYMENT OF ADVANCE PAYMENTS.—If a producer on
a farm that receives an advance direct payment for a crop
H. R. 2646—38
year ceases to be a producer on that farm, or the extent to
which the producer shares in the risk of producing a crop
changes, before the date the remainder of the direct payment
is made, the producer shall be responsible for repaying the
Secretary the applicable amount of the advance payment, as
determined by the Secretary.
SEC. 1304. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS FOR PEA-
NUTS.
(a) PAYMENT REQUIRED.—
(1) IN GENERAL.—During the 2002 through 2007 crop years
for peanuts, the Secretary shall make counter-cyclical payments
under this section with respect to peanuts if the Secretary
determines that the effective price for peanuts is less than
the target price for peanuts.
(2) 2002 CROP
YEAR.—If counter-cyclical payments are
required for the 2002 crop year, the Secretary shall make
the payments to historic peanut producers.
(3) SUBSEQUENT CROP YEARS.—If counter-cyclical payments
are required for any of the 2003 through 2007 crop years
for peanuts, the Secretary shall make the payments to the
producers on a farm to which a payment yield and base acres
for peanuts are assigned under section 1302.
(b) EFFECTIVE PRICE.—For purposes of subsection (a), the effec-
tive price for peanuts is equal to the sum of the following:
(1) The higher of the following:
(A) The national average market price for peanuts
received by producers during the 12-month marketing year
for peanuts, as determined by the Secretary.
(B) The national average loan rate for a marketing
assistance loan for peanuts in effect for the applicable
period under this subtitle.
(2) The payment rate in effect under section 1303 for the
purpose of making direct payments.
(c) TARGET PRICE.—For purposes of subsection (a), the target
price for peanuts shall be equal to $495 per ton.
(d) PAYMENT RATE.—The payment rate used to make counter-
cyclical payments for a crop year shall be equal to the difference
between—
(1) the target price; and
(2) the effective price determined under subsection (b).
(e) PAYMENT AMOUNT FOR 2002 CROP YEAR.—If counter-cyclical
payments are required to be paid for the 2002 crop of peanuts,
the amount of the counter-cyclical payment to be paid to an historic
peanut producer for that crop year shall be equal to the product
of the following:
(1) The payment rate specified in subsection (d).
(2) The payment acres of the historic peanut producer.
(3) The average peanut yield determined under section
1302(a)(1) for the historic peanut producer.
(f) PAYMENT
AMOUNT
FOR
SUBSEQUENT
CROP
YEARS.—If
counter-cyclical payments are required to be paid for any of the
2003 through 2007 crops of peanuts, the amount of the counter-
cyclical payment to be paid to the producers on a farm for that
crop year shall be equal to the product of the following:
(1) The payment rate specified in subsection (d).
(2) The payment acres on the farm.
H. R. 2646—39
(3) The payment yield for the farm.
(g) TIME FOR PAYMENTS.—
(1) GENERAL RULE.—If the Secretary determines under sub-
section (a) that counter-cyclical payments are required to be
made under this section for a crop year, the Secretary shall
make the counter-cyclical payments as soon as practicable after
the end of the 12-month marketing year for the crop.
(2) AVAILABILITY OF PARTIAL PAYMENTS.—If, before the end
of the 12-month marketing year, the Secretary estimates that
counter-cyclical payments will be required under this section
for a crop year, the Secretary shall give producers on a farm
(or, in the case of the 2002 crop year, historic peanut producers)
the option to receive partial payments of the counter-cyclical
payment projected to be made for that crop.
(3) TIME FOR PARTIAL PAYMENTS.—
(A) 2002 THROUGH 2006 CROP YEARS.—When the Sec-
retary makes partial payments available under paragraph
(2) for any of the 2002 through 2006 crop years—
(i) the first partial payment for the crop year shall
be made not earlier than October 1, and, to the max-
imum extent practicable, not later than October 31,
of the calendar year in which the crop is harvested;
(ii) the second partial payment shall be made not
earlier than February 1 of the next calendar year;
and
(iii) the final partial payment shall be made as
soon as practicable after the end of the 12-month mar-
keting year for that crop.
(B) 2007 CROP YEAR.—When the Secretary makes par-
tial payments available for the 2007 crop year—
(i) the first partial payment shall be made after
completion of the first 6 months of the marketing year
for that crop; and
(ii) the final partial payment shall be made as
soon as practicable after the end of the 12-month mar-
keting year for that crop.
(4) AMOUNT OF PARTIAL PAYMENTS.—
(A) 2002 CROP YEAR.—
(i) FIRST PARTIAL PAYMENT.—In the case of the
2002 crop year, the first partial payment under para-
graph (3) to an historic peanut producer may not
exceed 35 percent of the projected counter-cyclical pay-
ment for the crop year, as determined by the Secretary.
(ii) SECOND PARTIAL PAYMENT.—The second partial
payment may not exceed the difference between—
(I) 70 percent of the projected counter-cyclical
payment (including any revision thereof) for the
2002 crop year; and
(II) the amount of the payment made under
clause (i).
(iii) FINAL PAYMENT.—The final payment shall be
equal to the difference between—
(I) the actual counter-cyclical payment to be
made to the historic peanut producer; and
(II) the amount of the partial payments made
to the historic peanut producer under clauses (i)
and (ii).
H. R. 2646—40
(B) 2003 THROUGH 2006 CROP YEARS.—
(i) FIRST PARTIAL PAYMENT.—For each of the 2003
through 2006 crop years, the first partial payment
under paragraph (3) to the producers on a farm may
not exceed 35 percent of the projected counter-cyclical
payment for the crop year, as determined by the Sec-
retary.
(ii) SECOND PARTIAL PAYMENT.—The second partial
payment for a crop year may not exceed the difference
between—
(I) 70 percent of the projected counter-cyclical
payment (including any revision thereof) for the
crop year; and
(II) the amount of the payment made under
clause (i).
(iii) FINAL PAYMENT.—The final payment for a crop
year shall be equal to the difference between—
(I) the actual counter-cyclical payment to be
made to the producers for that crop year; and
(II) the amount of the partial payments made
to the producers under clauses (i) and (ii) for that
crop year.
(C) 2007 CROP YEAR.—
(i) FIRST
PARTIAL
PAYMENT.—For the 2007 crop
year, the first partial payment under paragraph (3)
to the producers on a farm may not exceed 40 percent
of the projected counter-cyclical payment for the crop
year, as determined by the Secretary.
(ii) FINAL PAYMENT.—The final payment for the
2007 crop year shall be equal to the difference
between—
(I) the actual counter-cyclical payment to be
made to the producers for that crop year; and
(II) the amount of the partial payment made
to the producers under clause (i).
(5) REPAYMENT.—The producers on a farm (or, in the case
of the 2002 crop year, historic peanut producers) that receive
a partial payment under this subsection for a crop year shall
repay to the Secretary the amount, if any, by which the total
of the partial payments exceed the actual counter-cyclical pay-
ment to be made for that crop year.
SEC. 1305. PRODUCER AGREEMENT REQUIRED AS CONDITION ON
PROVISION 
OF 
DIRECT 
PAYMENTS 
AND 
COUNTER-
CYCLICAL PAYMENTS.
(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.—
(1) REQUIREMENTS.—Before the producers on a farm may
receive direct payments or counter-cyclical payments under this
subtitle with respect to the farm, the producers shall agree,
during the crop year for which the payments are made and
in exchange for the payments—
(A) to comply with applicable conservation require-
ments under subtitle B of title XII of the Food Security
Act of 1985 (16 U.S.C. 3811 et seq.);
(B) to comply with applicable wetland protection
requirements under subtitle C of title XII of that Act (16
U.S.C. 3821 et seq.);
H. R. 2646—59
‘‘(ii) the ability of processors to market sugar cov-
ered by that portion of the allotment allocated for
the crop year; and
‘‘(iii) past processings of sugar from sugarcane,
based on the average of the 3 highest years of produc-
tion during the 1996 through 2000 crop years.
‘‘(C) TALISMAN PROCESSING FACILITY.—In the case of
allotments under subparagraph (B) attributable to the oper-
ations of the Talisman processing facility before the date
of enactment of this subparagraph, the Secretary shall
allocate the allotment among processors in the State under
subparagraph (A) in accordance with the agreements of
March 25 and 26, 1999, between the affected processors
and the Secretary of the Interior.
‘‘(D) PROPORTIONATE
SHARE
STATES.—In the case of
States subject to section 359f(c), the Secretary shall allocate
the allotment for cane sugar among multiple cane sugar
processors in a single State based on—
‘‘(i) past marketings of sugar, based on the average
of the 2 highest years of production of raw cane sugar
from among the 1997 through 2001 crop years;
‘‘(ii) the ability of processors to market sugar cov-
ered by that portion of the allotments allocated for
the crop year; and
‘‘(iii) past processings of sugar from sugarcane,
based on the average of the 2 highest crop years of
crop production during the 1997 through 2001 crop
years.
‘‘(E) NEW ENTRANTS.—
‘‘(i) IN GENERAL.—Notwithstanding subparagraphs
(B) and (D), the Secretary, on application of any proc-
essor that begins processing sugarcane on or after the
date of enactment of this subparagraph, and after a
hearing (if requested by the affected sugarcane proc-
essors and growers) and on such notice as the Secretary
by regulation may prescribe, may provide the processor
with an allocation that provides a fair, efficient and
equitable distribution of the allocations from the allot-
ment for the State in which the processor is located.
‘‘(ii) PROPORTIONATE SHARE STATES.—In the case
of proportionate share States, the Secretary shall
establish proportionate shares in a quantity sufficient
to produce the sugarcane required to satisfy the alloca-
tions.
‘‘(iii) LIMITATIONS.—The allotment for a new proc-
essor under this subparagraph shall not exceed—
‘‘(I) in the case of the first crop year of oper-
ation of a new processor, 50,000 short tons (raw
value); and
‘‘(II) in the case of each subsequent crop year
of operation of the new processor, a quantity estab-
lished by the Secretary in accordance with this
subparagraph and the criteria described in
subparagraph (B) or (D), as applicable.
‘‘(iv) NEW ENTRANT STATES.—
‘‘(I) IN
GENERAL.—Notwithstanding subpara-
graphs (A) and (C) of section 359c(e)(3), to