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SEC. 1102. DEFINITIONS.
In this subtitle:
(1) CONSIDERED PLANTED.—The term ‘‘consid-
ered planted’’ means acreage that is considered plant-
ed under title V of the Agricultural Act of 1949 (7
U.S.C. 1461 et seq.) (as in effect prior to the amend-
ment made by section 1109(b)(2)).
(2) CONTRACT.—The term ‘‘contract’’ means a
production flexibility contract entered into under sec-
tion 1103.
(3) CONTRACT
ACREAGE.—The term ‘‘contract
acreage’’ means 1 or more crop acreage bases estab-
lished 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 re-
flect 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, bar-
ley, oats, upland cotton, and rice.
(5) CONTRACT
PAYMENT.—The term ‘‘contract
payment’’ means a payment made under section 1103
pursuant to a contract.
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(6) FARM PROGRAM PAYMENT YIELD.—The term
‘‘farm program payment yield’’ means the farm pro-
gram payment yield established for the 1995 crop of
a contract commodity under title V of the Agricul-
tural Act of 1949 (as in effect prior to the amendment
made by section 1109(b)(2)).
(7) LOAN COMMODITY.—The term ‘loan commod-
ity’ means each contract commodity, extra long staple
cotton, and oilseeds.
(8) OILSEED.—The term ‘‘oilseed’’ means a crop
of soybeans, sunflower seed, rapeseed, canola, saf-
flower, 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 Secretary 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 sub-
title, the Secretary shall offer to enter into a contract
with an eligible owner or operator described in para-
graph (2) on a farm containing eligible farmland.
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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 pre-
pared in accordance with section 1212 of the
Food Security Act of 1985 (16 U.S.C. 3812);
(B) wetland protection requirements appli-
cable 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
DE-
SCRIBED.—The following persons shall be considered
to be an owner or operator eligible to enter into a
contract:
(A) An owner of eligible farmland who as-
sumes 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, regard-
less 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 ex-
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piring 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 ex-
piring before September 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 ex-
pires before September 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 fol-
lowing 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 sec-
tion 508(b) of the Federal Crop Insurance Act (7
U.S.C. 1508(b)).
(3) TENANTS AND SHARECROPPERS.—In carry-
ing out this section, the Secretary shall provide ade-
quate safeguards to protect the interests of operators
who are tenants and sharecroppers.
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(b) ELEMENTS.—
(1) TIME FOR CONTRACTING.—
(A) DEADLINE.—Except as provided in sub-
paragraph (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 cov-
ered by a conservation reserve contract en-
tered into under section 1231 of the Food
Security Act of 1985 (16 U.S.C. 3831) that
terminates after the date specified in sub-
paragraph (A) to enter into or expand a
production flexibility contract to cover the
contract acreage of the farm that was sub-
ject to the former conservation reserve con-
tract.
(ii) 
AMOUNT.—Contract 
payments
made for contract acreage under this sub-
paragraph shall be made at the rate and
amount applicable to the annual contract
payment level for the applicable crop.
(2) DURATION OF CONTRACT.—
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(A) BEGINNING
DATE.—A contract shall
begin with—
(i) the 1996 crop of a contract com-
modity; or
(ii) in the case of acreage that was sub-
ject to a conservation reserve contract de-
scribed 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 Sec-
retary shall provide an estimate of the minimum con-
tract 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 con-
tract 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 acre-
age reduction program authorized for a crop of a con-
tract commodity under section 101B, 103B, 105B, or
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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 volun-
tarily terminated, on or after January 1, 1995; or
(3) is released from coverage under a conserva-
tion reserve contract by the Secretary during the pe-
riod beginning on January 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
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of the annual contract payment shall be made on
December 15.
(e) AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS
FOR EACH FISCAL YEAR.—
(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 allo-
cated 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.
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(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 re-
quirements under sections 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 repay-
ments of deficiency payments otherwise required
under section 114(a)(2) of the Act (as so in ef-
fect) 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.
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(f) DETERMINATION OF CONTRACT PAYMENTS.—
(1) INDIVIDUAL
PAYMENT
QUANTITY
OF
CON-
TRACT COMMODITIES.—For each contract, the pay-
ment 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
COMMODITIES.—The payment quantity of each con-
tract commodity covered by all contracts for each fis-
cal year shall equal the sum of the amounts calculated
under paragraph (1) for each individual contract.
(3) ANNUAL PAYMENT RATE.—The payment rate
for a contract commodity for each fiscal year shall be
equal to—
(A) the amount made available under sub-
section (e) for the contract commodity for the fis-
cal year; divided by
(B) the amount determined under para-
graph (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—
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(A) the payment quantity determined under
paragraph (1) with respect to the contract; and
(B) the payment rate in effect under para-
graph (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 opera-
tor making the assignment, or the assignee, shall pro-
vide the Secretary with notice, in such manner as the
Secretary may require in the contract, of any assign-
ment 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 con-
tract payments made to a person under a contract during
any fiscal year may not exceed the payment limitations es-
tablished under section 1105.
(h) EFFECT OF VIOLATION.—
(1) TERMINATION OF CONTRACT.—Except as pro-
vided in paragraph (2), if an owner or operator sub-
ject to a contract violates the conservation plan for
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the farm containing eligible farmland under the con-
tract, wetland protection requirements applicable to
the farm, or the planting flexibility requirements of
subsection (j), the Secretary shall terminate the con-
tract 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 vio-
lation, together with interest on the contract pay-
ments as determined by the Secretary.
(2) REFUND OR ADJUSTMENT.—If the Secretary
determines that a violation does not warrant termi-
nation of the contract under paragraph (1), the Sec-
retary 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, to-
gether with interest on the contract payments as
determined by the Secretary; or
(B) to accept a reduction in the amount of
future contract payments that is proportionate
to the severity of the violation, as determined by
the Secretary.
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(3) FORECLOSURE.—An owner or operator sub-
ject to a contract may not be required to make repay-
ments to the Secretary of amounts received under the
contract if the contract acreage has been foreclosed on
and the Secretary determines that forgiving the re-
payments 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 acre-
age. On the resumption of operation 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 ad-
verse decision for purposes of the availability of ad-
ministrative 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 opera-
tor subject to a contract of the right and interest of
the owner or operator in the contract acreage shall re-
sult in the termination of the contract with respect to
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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 re-
quest of the transferee, the Secretary may modify the
contract if the modifications are consistent with the
objectives of this section as determined by the Sec-
retary.
(2) EXCEPTION.—If an owner or operator who is
entitled to a contract payment dies, becomes incom-
petent, or is otherwise unable to receive the contract
payment, the Secretary shall make the payment, in
accordance with regulations prescribed by the Sec-
retary.
(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 commod-
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ities, lentils, mung beans, and dry peas on con-
tract acreage.
(3) ALFALFA.—The planting of alfalfa on con-
tract 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 limita-
tion in effect under paragraph (2)(A) for the contract.
(4) HAYING
AND
GRAZING.—Subject to para-
graphs (2) and (3), haying and grazing of contract
acreage shall be permitted, except during any consecu-
tive 5-month period that is established 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 es-
tablished 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 acreage.
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
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nonrecourse marketing assistance loans for loan com-
modities 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 pro-
duction 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 sim-
ple average price received by producers of
wheat, as determined by the Secretary, dur-
ing the marketing years for the immediately
preceding 5 crops of wheat, excluding the
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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 Secretary 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 Secretary 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 percent, the Secretary may reduce
the loan rate for wheat for the correspond-
ing crop by an amount not to exceed 5 per-
cent 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 sub-
paragraph (B) shall not be considered in deter-
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mining the loan rate for wheat for subsequent
years.
(2) FEED GRAINS.—
(A) LOAN RATE FOR CORN.—Subject to sub-
paragraph (B), the loan rate for a marketing as-
sistance loan for corn shall be—
(i) not less than 85 percent of the sim-
ple average price received by producers of
corn, as determined by the Secretary, dur-
ing 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 Secretary estimates for any marketing
year that the ratio of ending stocks of corn to
total use for the marketing year will be—
(i) equal to or greater than 25 percent,
the Secretary may reduce the loan rate for
corn for the corresponding crop by an
amount not to exceed 10 percent in any
year;
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(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 Sec-
retary 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 sub-
paragraph (B) shall not be considered in deter-
mining the loan rate for corn for subsequent
years.
(D) OTHER FEED GRAINS.—The loan rate
for a marketing assistance loan for grain sor-
ghum, barley, and oats, respectively, shall be es-
tablished at such level as the Secretary deter-
mines is fair and reasonable in relation to the
rate that loans are made available for corn, tak-
ing 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
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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,
excluding the year in which the average
price was the highest and the year in which
the average price was the lowest in the pe-
riod; 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 av-
erage Northern European price quotation of
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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 Secretary.
(B) LIMITATIONS.—The loan rate for a
marketing assistance loan for upland cotton shall
not be less than $0.50 per pound or more than
$0.5192 per pound.
(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 assist-
ance loan for rice shall be $6.50 per hundredweight.
(6) OILSEEDS.—
(A) SOYBEANS.—The loan rate for a mar-
keting assistance loan for soybeans shall be $4.92
per bushel.
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(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, individually, 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 reasonable 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
soybeans on a per-pound basis for the same crop.
(c) TERM OF LOAN.—In the case of each loan commod-
ity (other than upland cotton or extra long staple cotton),
a marketing assistance 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 market-
ing 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.—
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(1) REPAYMENT RATES GENERALLY.—The Sec-
retary shall permit producers to repay a marketing
assistance loan under subsection (a) for a loan com-
modity (other than extra long staple cotton) at a level
that is the lesser of—
(A) the loan rate established for the com-
modity under subsection (b); or
(B) the prevailing world market price for
the commodity (adjusted to United States qual-
ity and location), as determined by the Sec-
retary.
(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 prescribe by regulation—
(A) a formula to determine the prevailing
world market price for each loan commodity, ad-
justed to United States quality and location; and
(B) a mechanism by which the Secretary
shall announce periodically the prevailing world
market price for each loan commodity.
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(4) ADJUSTMENT OF PREVAILING WORLD MAR-
KET PRICE FOR UPLAND COTTON.—
(A) IN GENERAL.—During the period end-
ing 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 mar-
ket price is less than 115 percent of the loan
rate for upland cotton established under
subsection (b), as determined by the Sec-
retary; and
(ii) the Friday through Thursday aver-
age price quotation for the lowest-priced
United States growth as quoted for Mid-
dling (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 Eu-
rope price’’).
(B) FURTHER
ADJUSTMENT.—Except as
provided in subparagraph (C), the adjusted pre-
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vailing 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 Sec-
retary to be relevant in establishing an ac-
curate prevailing world market price for
upland cotton (adjusted to United States
quality and location).
(C) LIMITATION
ON
FURTHER
ADJUST-
MENT.—The adjustment under subparagraph (B)
may not exceed the difference between—
(i) the Friday through Thursday aver-
age 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 para-
graph (4), the Secretary may make loan deficiency
payments available to producers who, although eligi-
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ble to obtain a marketing assistance loan under sub-
section (a) with respect to a loan commodity, agree
to forgo obtaining the loan for the commodity in re-
turn for payments under this subsection.
(2) COMPUTATION.—A loan deficiency payment
under this subsection shall be computed by multiply-
ing—
(A) the loan payment rate determined
under paragraph (3) for the loan commodity; by
(B) the quantity of the loan commodity that
the producers on a farm are eligible to place
under loan but for which the producers forgo ob-
taining the loan in return for payments under
this subsection.
(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 sub-
section (b) for the loan commodity; exceeds
(B) the rate at which a loan for the com-
modity may be repaid under subsection (d).
(4) EXCEPTION FOR EXTRA LONG STAPLE COT-
TON.—This subsection shall not apply with respect to
extra long staple cotton.
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(f) SPECIAL MARKETING LOAN PROVISIONS FOR UP-
LAND COTTON.—
(1) 
FIRST
HANDLER
MARKETING
CERTIFI-
CATES.—
(A) IN GENERAL.—During the period end-
ing 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 location) is below the current loan
repayment rate for upland cotton, to make Unit-
ed States upland cotton competitive in world
markets and to maintain and expand domestic
consumption and exports of upland cotton pro-
duced in the United States, the Secretary shall
provide for the issuance of marketing certificates
or cash payments in accordance with this para-
graph.
(B) PAYMENTS.—The Commodity Credit
Corporation, under such regulations as the Sec-
retary may prescribe, shall make payments,
through the issuance of marketing certificates or
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cash payments, to first handlers of upland cotton
(persons regularly engaged in buying or selling
upland cotton) who have entered into an agree-
ment 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 condi-
tions as the Secretary determines will make up-
land cotton produced in the United States avail-
able at competitive prices, consistent with the
purposes of this paragraph.
(C) VALUE.—The value of each certificate or
cash payment 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
EX-
CHANGE.—The Commodity Credit Corporation,
under regulations prescribed by the Secretary,
may assist any person receiving marketing cer-
tificates under this paragraph in the redemption
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of certificates for cash, or marketing or exchange
of the certificates for agricultural commodities or
products owned by the Commodity Credit Cor-
poration, at such times, in such manner, and at
such price levels as the Secretary determines will
best effectuate the purposes of the program estab-
lished under this paragraph. Any price restric-
tions that may otherwise apply to the disposition
of agricultural commodities by the Commodity
Credit Corporation shall not apply to the re-
demption of certificates under this paragraph.
(E) DESIGNATION
OF
COMMODITIES
AND
PRODUCTS; CHARGES.—Insofar as practicable,
the Secretary shall permit owners of certificates
to designate the commodities and products, in-
cluding 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 deter-
mined by the Secretary), reasonable costs of stor-
age 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
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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 pre-
vent the marketing or exchange of agricultural
commodities and products for certificates under
this subsection from adversely affecting the in-
come of producers of the commodities or prod-
ucts.
(G) TRANSFERS.—Under regulations pre-
scribed by the Secretary, certificates issued to
cotton handlers under this paragraph may be
transferred to other handlers and persons ap-
proved 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
following a consecutive 4-week period in which—
(i) the Friday through Thursday aver-
age price quotation for the lowest-priced
United States growth, as quoted for Mid-
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dling (M) 13⁄32-inch cotton, delivered C.I.F.
Northern Europe exceeds the Northern Eu-
rope 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
PAY-
MENTS.—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 docu-
mented sales.
(C) ADMINISTRATION.—Subparagraphs (D)
through (G) of paragraph (1) shall apply to
marketing certificates issued under this para-
graph. Any such certificates may be transferred
to other persons in accordance with regulations
issued by the Secretary.
(D) EXCEPTION.—The Secretary shall not
issue marketing certificates or cash payments
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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 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 ex-
ceed $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 pro-
vides that, during the period ending July 31,
2003, whenever the Secretary determines and an-
nounces 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, ad-
justed for the value of any certificates issued
under paragraph (2), exceeds the Northern Eu-
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rope price by more than 1.25 cents per pound,
there shall immediately be in effect a special im-
port quota.
(B) QUANTITY.—The quota shall be equal to
1 week’s consumption of upland cotton by domes-
tic 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 announce-
ment 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 established that overlaps any existing quota
period if required by subparagraph (A), except
that a special quota period may not be estab-
lished 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 pur-
poses of—
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(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 Har-
monized 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 tar-
iff 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 determines and announces that the av-
erage price of the base quality of upland cotton, as de-
termined by the Secretary, in the designated spot
markets for a month exceeded 130 percent of the aver-
age price of such quality of cotton in the markets for
the preceding 36 months, notwithstanding any other
provision of law, there shall immediately be in effect
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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 con-
sumption of upland cotton at the seasonally ad-
justed 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 con-
sumption 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 quan-
tity 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);
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(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 Har-
monized 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 beginning 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 consump-
tion in the most recent 3 months for
which data are available; and
(II) the larger of—
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(aa) average exports of up-
land cotton during the preceding
6 marketing years; or
(bb) cumulative exports of
upland cotton plus outstanding
export sales for the marketing
year in which the quota is estab-
lished.
(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 established under this subsection, cotton may
be entered under the quota during the 90-day pe-
riod beginning on the date the quota is estab-
lished by the Secretary.
(2) NO OVERLAP.—Notwithstanding paragraph
(1), a quota period may not be established that over-
laps an existing quota period or a special quota pe-
riod established under subsection (f)(3).
SEC. 1105. PAYMENT LIMITATIONS.
(a) LIMITATION ON PAYMENTS UNDER PRODUCTION
FLEXIBILITY CONTRACTS.—The total amount of contract
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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 DEFICIENCY PAYMENTS.—
(1) LIMITATION.—The total amount of payments
specified in paragraph (2) that a person shall be enti-
tled to receive under section 1104 for contract com-
modities 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 commodity 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 REGARD-
ING PAYMENT LIMITATIONS.—Paragraphs (5), (6), and (7)
of section 1001 and sections 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 limita-
tions under this section.
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(d) CONFORMING AMENDMENTS.—Section 1001 of the
Food Security 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 Sec-
retary may make adjustments in the loan rate for
quota peanuts for location of peanuts and such other
factors as are authorized by section 411 of the Agri-
cultural 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 appro-
priate, taking into consideration the demand for pea-
nut oil and peanut meal, expected prices of other veg-
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etable oils and protein meals, and the demand for
peanuts in foreign markets.
(2) ANNOUNCEMENT.—The Secretary shall an-
nounce the loan rate for additional peanuts of each
crop not later than February 15 preceding the mar-
keting 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 sub-
sections (a) and (b), the Secretary shall make
warehouse storage loans available in each of the
producing areas (described in section 1446.95 of
title 7 of the Code of Federal Regulations (Janu-
ary 1, 1989)) to a designated area marketing as-
sociation 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 ware-
house storage loans available to any cooperative
that is engaged in operations or activities con-
cerning peanuts other than those operations and
activities specified in this section and section
358e of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1359a).
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(B) ADMINISTRATIVE AND SUPERVISORY AC-
TIVITIES.—An area marketing association shall
be used in administrative and supervisory ac-
tivities relating to loans and marketing activities
under this section and section 358e of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C.
1359a).
(C) ASSOCIATION COSTS.—Loans made to
the association under this paragraph shall in-
clude such costs as the area marketing associa-
tion reasonably may incur in carrying 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 PEA-
NUTS.—
(A) IN GENERAL.—The Secretary shall re-
quire that each area marketing association estab-
lish pools and maintain complete and accurate
records by area and segregation for quota pea-
nuts handled under loan and for additional pea-
nuts placed under loan, except that separate
pools shall be established for Valencia peanuts
produced in New Mexico. Bright hull and dark
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hull Valencia peanuts shall be considered as sep-
arate types for the purpose of establishing the
pools.
(B) NET GAINS.—Net gains on peanuts in
each pool, unless otherwise approved by the Sec-
retary, shall be distributed only to producers who
placed peanuts in the pool and shall be distrib-
uted 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 fol-
lowing:
(i) QUOTA PEANUTS.—For quota pea-
nuts, the net gains over and above the loan
indebtedness and other costs or losses in-
curred on peanuts placed in the pool.
(ii) ADDITIONAL PEANUTS.—For addi-
tional 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 cov-
ered using the following sources in the following order of
priority:
(1) 
TRANSFERS
FROM
ADDITIONAL
LOAN
POOLS.—The proceeds due any producer from any
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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 Agricul-
tural 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 reduc-
ing the gain of any producer in the pool by the
amount of pool gains attributed 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 attributable to handlers) to offset
further losses in area quota pools. The Secretary shall
transfer to the Treasury those funds collected under
subsection (g) and available for use under this sub-
section 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 additional 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
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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 produced in New Mexico) in such manner as
the Secretary shall by regulation prescribe.
(5) INCREASED ASSESSMENTS.—If use of the au-
thorities provided in the preceding paragraphs is not
sufficient to cover losses in an area quota pool, the
Secretary shall increase the marketing assessment es-
tablished 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 assessment shall be retained by the Sec-
retary to cover losses in that pool.
(e) DISAPPROVAL OF QUOTAS.—Notwithstanding any
other provision 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 dis-
approved 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.—
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(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 deterioration;
(B) ensure that all Commodity Credit Cor-
poration 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 pea-
nut program so as to improve the quality of do-
mestic peanuts and ensure the coordination of
activities under the Peanut Administrative Com-
mittee established under Marketing Agreement
No. 146, regulating the quality of domestically
produced peanuts (under the Agricultural Ad-
justment Act (7 U.S.C. 601 et seq.), reenacted
with amendments by the Agricultural Marketing
Agreement Act of 1937); and
(D) ensure that any changes made in the
peanut program as a result of this subsection re-
quiring additional production or handling at the
farm level shall be reflected as an upward adjust-
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ment in the Department of Agriculture loan
schedule.
(2) EXPORTS AND OTHER PEANUTS.—The Sec-
retary shall require that all peanuts in the domestic
and export markets fully comply with all quality
standards under Marketing Agreement No. 146.
(g) MARKETING ASSESSMENT.—
(1) IN GENERAL.—The Secretary shall provide
for a nonrefundable marketing assessment. The assess-
ment 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 pur-
chaser of peanuts shall—
(i) collect from the producer a market-
ing assessment equal to the quantity of pea-
nuts acquired multiplied by—
(I) in the case of each of the 1994
and 1995 crops, .55 percent of the ap-
plicable national average loan rate;
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(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 as-
sessment in an amount equal to the quan-
tity 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 subsection, the term ‘‘first purchaser’’ means
a person acquiring peanuts from a producer ex-
cept that in the case of peanuts forfeited by a
producer to the Commodity Credit Corporation,
the term means the person acquiring the peanuts
from the Commodity Credit Corporation.
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(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 producer shall be re-
sponsible 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 assess-
ment shall be paid by the first purchaser of the pea-
nuts. 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.
(5) PENALTIES.—If any person fails to collect or
remit the reduction required by this subsection or
fails to comply with the requirements for record-
keeping 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
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(B) the national average quota peanut rate
for the applicable crop year.
(6) ENFORCEMENT.—The Secretary may enforce
this subsection in the courts of the United States.
(h) CROPS.—Subsections (a) through (f) shall be effec-
tive 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 strik-
ing ‘‘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)—
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(I) by striking ‘‘each of the 1991
through 1997 marketing years’’ and
inserting ‘‘each marketing year’’; and
(II) in clause (i), by inserting be-
fore the semicolon the following: ‘‘, in
the case of the 1991 through 1995 mar-
keting 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 inserting ‘‘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 inserting ‘‘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 inserting ‘‘2002’’.
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(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—
(A) in subsection (a)(1), by striking ‘‘do-
mestic edible, seed,’’ and inserting ‘‘domestic edi-
ble 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.—Temporary 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
marketing years as provided in this sub-
paragraph.
‘‘(ii) QUANTITY.—The temporary quota
allocation shall be equal to the pounds of
seed peanuts planted on the farm, as may
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be adjusted under regulations prescribed by
the Secretary.
‘‘(iii) ADDITIONAL QUOTA.—The tem-
porary allocation 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 Sec-
retary.
‘‘(iv) EFFECT
OF
OTHER
REQUIRE-
MENTS.—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 re-
leased for 1 year under paragraph (7).’’;
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(ii) in paragraph (3)(B), by striking
‘‘include—’’ and clauses (i) and (ii) and
inserting ‘‘include any increase resulting
from the allocation of quotas voluntarily re-
leased 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 ‘‘(in-
cluding 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 market-
ings)’’; 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 para-
graph (4)(A)(iii), is further amended by adding at
the end the following:
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‘‘(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 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 purposes on such basis as the Secretary
shall by regulation provide.
‘‘(B) LIMITATION.—The poundage of pea-
nuts transferred under subparagraph (A) shall
not exceed the difference between—
‘‘(i) the total quantity of peanuts meet-
ing quality requirements for domestic edible
use, as determined by the Secretary, mar-
keted 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
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25 percent of the total farm quota pounds, ex-
cluding 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 dur-
ing 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 fis-
cal year, the processor may repledge the sugar as col-
lateral 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.
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(d) LOAN TYPE; PROCESSOR ASSURANCES.—
(1) RECOURSE
LOANS.—Subject to paragraph
(2), the Secretary 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 previously 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 during a fiscal year or to change re-
course loans into nonrecourse loans, the Secretary
shall obtain from each processor that receives a loan
under this section such assurances as the Secretary
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
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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 estab-
lished under subsection (a) per pound of raw
cane sugar, processed by the processor from do-
mestically produced sugarcane or sugarcane mo-
lasses, 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 produced sugarcane
or sugarcane molasses, that has been marketed
(including the transfer or delivery of the sugar
to a refinery for further processing or market-
ing).
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(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 mar-
keting assessment in an amount equal to—
(A) in the case of marketings during fiscal
year 1996, 1.1794 percent of the loan rate estab-
lished under subsection (a) per pound of beet
sugar, processed by the processor from domesti-
cally produced sugar beets or sugar beet molas-
ses, that has been marketed; and
(B) in the case of marketings during each
of fiscal years 1997 through 2003, 1.47425 per-
cent 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.
(3) COLLECTION.—
(A) TIMING.—A marketing assessment re-
quired 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
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30 of the year shall be subject to assessment on
that date. The sugar shall not be subject to a sec-
ond 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 nonrefundable.
(4) PENALTIES.—If any person fails to remit the
assessment required by this subsection or fails to com-
ply with such requirements for recordkeeping or other-
wise as are required by the Secretary to carry out
this subsection, the person shall be liable to the Sec-
retary for a civil penalty up to an amount deter-
mined 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 subsection in a court of the United States.
(f) FORFEITURE PENALTY.—
(1) IN GENERAL.—A penalty shall be assessed on
the forfeiture of any sugar pledged as collateral for a
nonrecourse loan under this section.
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(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 sugar-
cane 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 RE-
PORT.—A sugarcane processor, cane sugar refiner,
and sugar beet processor 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, distribution,
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.
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(3) MONTHLY REPORTS.—Taking into consider-
ation the information received under paragraph (1),
the Secretary shall publish on a monthly basis com-
posite 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 Agri-
culture in connection with the administration of pay-
ments or loans under this subtitle.
(b) ADMINISTRATION.—Title IV of the Agricultural
Adjustment Act of 1938 (as added by section 1109) shall
apply to the administration of this subtitle.
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(c) REGULATIONS.—The Secretary may issue such reg-
ulations 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 Ag-
ricultural 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 Adjust-
ment Act of 1938 (7 U.S.C. 1314–1) and redesig-
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nating 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 ap-
pear after section 304 of the Agricultural Adjust-
ment Act of 1938 (7 U.S.C. 1304) and redesig-
nating 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, respec-
tively; and
(D) by transferring section 416 (7 U.S.C.
1431) to appear after section 415 of the Agricul-
tural Adjustment Act of 1938 (as transferred and
redesignated by subparagraph (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—
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(1) in section 306 (as transferred and redesig-
nated by subsection (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, LO-
CATION, AND OTHER FACTORS.
‘‘The Secretary may make such adjustments in the an-
nounced loan rate for a commodity as the Secretary consid-
ers appropriate to reflect differences in grade, type, quality,
location, and other factors.’’.
SEC. 1110. EFFECT OF AMENDMENTS.
(a) EFFECT ON PRIOR CROPS.—Except as otherwise
specifically provided and notwithstanding any other provi-
sion of law, this subtitle and the amendments made by this
subtitle shall not affect the authority of the Secretary to
carry out a price support or production adjustment pro-
gram for any of the 1991 through 1995 crops of an agricul-
tural commodity established under a provision of law in
effect immediately before the date of the enactment of this
Act.
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(b) LIABILITY.—A provision of this subtitle or an
amendment made by this subtitle shall not affect the liabil-
ity 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 Se-
curity 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 (in-
cluding contracts extended by the Secretary pursuant
to section 1437 of the Food, Agriculture, Conserva-
tion, 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 PRO-
GRAM.—For each of fiscal years 1996 through 2002,
$100,000,000 of the funds of the Commodity Credit Cor-
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poration shall be available for providing technical assist-
ance, cost-sharing payments, and incentive payments for
practices relating to livestock production under the livestock
environmental assistance program under chapter 4 of sub-
title D.’’.
(b) LIVESTOCK ENVIRONMENTAL ASSISTANCE PRO-
GRAM.—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 nu-
trient or manure management, irrigation manage-
ment, tillage or residue management, grazing man-
agement, or other land management 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.
‘‘(2) LARGE CONFINED LIVESTOCK OPERATION.—
The term ‘large confined livestock operation’ means
an operation that—
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‘‘(A) is a confined animal feeding oper-
ation; 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 water-
ing);
‘‘(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 deter-
mined by the Secretary.
‘‘(4) OPERATOR.—The term ‘operator’ means a
person who is engaged in livestock production (as de-
fined by the Secretary).
‘‘(5) STRUCTURAL PRACTICE.—The term ‘struc-
tural practice’ means the establishment of an animal
waste management facility, terrace, grassed water-
way, contour grass strip, filterstrip, or other struc-
tural practice that the Secretary determines is needed
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to protect, in the most cost effective manner, water,
soil, or related resources from degradation due to live-
stock 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 tech-
nical assistance, cost-sharing payments, and incentive
payments to operators who enter into contracts with
the Secretary, through a livestock environmental as-
sistance program.
‘‘(2) ELIGIBLE PRACTICES.—
‘‘(A) STRUCTURAL PRACTICES.—An opera-
tor who implements 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 prac-
tice 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
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threat to water, soil, or related resources exists, as de-
termined by the Secretary, by reason of the soil types,
terrain, climatic, soil, topographic, flood, or saline
characteristics, or other factors or natural hazards.
‘‘(4) SELECTION CRITERIA.—In providing tech-
nical assistance, cost-sharing payments, and incentive
payments to operators in a region, watershed, or con-
servation priority area in which an agricultural op-
eration is located, the Secretary shall consider—
‘‘(A) the significance of the water, soil, and
related natural resource problems; and
‘‘(B) the maximization of environmental
benefits per dollar expended.
‘‘(b) APPLICATION AND TERM.—
‘‘(1) IN GENERAL.—A contract between an oper-
ator 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
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technical assistance, participating operators shall
comply with all terms and conditions 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 ex-
change 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 operator 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 projected 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 produc-
tion, 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 establish an application and evaluation process for
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awarding technical assistance or incentive payments, or
both, to an operator in exchange for the performance of 1
or more land management practices 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 Sec-
retary, taking into consideration any payment
received by the operator from a State or local
government.
‘‘(B) LIMITATION.—An operator of a large
confined livestock operation shall not be eligible
for cost-sharing payments to construct an ani-
mal 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 pay-
ments or other benefits for the same land under
chapter 1, 2, or 3.
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‘‘(2) INCENTIVE PAYMENTS.—The Secretary shall
make incentive payments in an amount and at a rate
determined by the Secretary to be necessary to encour-
age an operator to perform 1 or more land manage-
ment practices.
‘‘(3) TECHNICAL ASSISTANCE.—
‘‘(A) FUNDING.—The Secretary shall allo-
cate funding under this chapter for the provision
of technical assistance according to the purpose
and projected cost for which the technical assist-
ance is provided for a fiscal year. The allocated
amount may vary according to the type of exper-
tise 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 technical 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.—
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‘‘(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 rea-
sonable 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 reg-
ulations to implement the livestock environmental assist-
ance program established under this chapter.’’.
(c) CONFORMING AMENDMENTS.—
(1) COMMODITY CREDIT CORPORATION CHARTER
ACT.—Section 5(g) of the Commodity Credit Corpora-
tion 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.—
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(A) IN GENERAL.—Section 1237 of the Food
Security Act of 1985 (16 U.S.C. 3837) is amend-
ed—
(i) in subsection (b)(2)—
(I) by striking ‘‘not less’’ and in-
serting ‘‘not more’’; and
(II) by striking ‘‘2000’’ and in-
serting ‘‘2002’’; and
(ii) in subsection (c), by striking
‘‘2000’’ and inserting ‘‘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 para-
graph (2) and inserting the following:
‘‘(2) shall be for 15 years, but in no case shall
be a permanent 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 sub-
section and inserting ‘‘total of 36,400,000
acres.’’.
(B) OPTIONAL CONTRACT TERMINATION BY
PRODUCERS.—Section 1235 of the Food Security
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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 in-
tention of the owner or operator to terminate the con-
tract.
‘‘(2) EFFECTIVE
DATE.—The contract termi-
nation shall take effect 60 days after the date on
which the owner or operator submits the written no-
tice under paragraph (1).
‘‘(3) PRORATED RENTAL PAYMENT.—If a con-
tract 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 por-
tion 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 re-
quested the termination to submit a subsequent bid to
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enroll the land that was subject to the contract into
the conservation reserve.
‘‘(5) CONSERVATION
REQUIREMENTS.—If land
that was subject to a contract is returned to produc-
tion 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 require-
ments 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 con-
tract.’’.
(C) 
LIMITATION.—Notwithstanding 
any
other provision of law, no new acres shall be en-
rolled in the conservation reserve program estab-
lished 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.
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Subtitle C—Agricultural Promotion
and Export Programs
SEC. 1301. MARKET PROMOTION PROGRAM.
Effective October 1, 1995, section 211(c)(1) of the Agri-
cultural Trade Act of 1978 (7 U.S.C. 5641(c)(1)) is amend-
ed—
(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,’’.
SEC. 1302. EXPORT ENHANCEMENT PROGRAM.
Effective October 1, 1995, section 301(e)(1) of the Agri-
cultural Trade Act of 1978 (7 U.S.C. 5651(e)(1)) is amend-
ed to read as follows:
‘‘(1) IN GENERAL.—The Commodity Credit Cor-
poration shall make available to carry out the pro-
gram 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.’’.
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Subtitle D—Miscellaneous
SEC. 1401. CROP INSURANCE.
(a) 
CATASTROPHIC
RISK
PROTECTION.—Section
508(b) of the Federal 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 Sec-
retary may continue to offer catastrophic
risk protection in a State (or a portion of
a State) through local offices of the Depart-
ment if the Secretary determines that there
is an insufficient number of approved in-
surance providers operating in the State or
portion to adequately provide catastrophic
risk protection coverage to producers.
‘‘(ii) COVERAGE BY APPROVED INSUR-
ANCE PROVIDERS.—To the extent that cata-
strophic risk protection coverage by ap-
proved insurance providers is sufficiently
available in a State as determined by the
Secretary, only approved insurance provid-
ers may provide the coverage in the State.
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‘‘(iii) CURRENT POLICIES.—Subject to
clause (ii), all catastrophic risk protection
policies written by local offices of the De-
partment shall be transferred (including all
fees collected for the crop year in which the
approved insurance provider will assume
the policies) to the approved insurance pro-
vider 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 insurance for each crop of economic
significance in which the person has an in-
terest; or
‘‘(ii) provide a written waiver to the
Secretary that waives any eligibility for
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emergency crop loss assistance 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 QUAR-
ANTINE AND INSPECTION FEES.
Subsection (a) of section 2509 of the Food, Agriculture,
Conservation, 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 Ag-
riculture may prescribe and collect fees sufficient—
‘‘(A) to cover the cost of providing agricul-
tural quarantine and inspection services in con-
nection 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
international passenger, commercial vessel, com-
mercial aircraft, commercial truck, or railroad
car;
‘‘(B) to cover the cost of administering this
subsection; and
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‘‘(C) through fiscal year 2002, to maintain
a reasonable balance in the Agricultural Quar-
antine 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 entities paying the
fees. The costs of the services with respect to pas-
sengers as a class includes the costs of related inspec-
tions 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 prescribe.
‘‘(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 pay-
ment penalty, and the overdue fees shall accrue inter-
est, as required by section 3717 of title 31, United
States Code.
‘‘(5) AGRICULTURAL
QUARANTINE
INSPECTION
USER FEE ACCOUNT.—
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‘‘(A) ESTABLISHMENT.—There is estab-
lished 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 inter-
est 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 Ag-
ricultural Quarantine Inspection User Fee Ac-
count shall be available, in such amounts as are
provided in advance in appropriations Acts, to
cover the costs associated with the provision of
agricultural quarantine and inspection services
and the administration of this subsection.
Amounts made available under this subpara-
graph 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.
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‘‘(6) USE OF AMOUNTS COLLECTED AFTER FIS-
CAL YEAR 2002.—After September 30, 2002, the unob-
ligated balance in the Agricultural Quarantine In-
spection User Fee Account and fees and other
amounts collected under this subsection shall be cred-
ited to the Department of Agriculture accounts that
incur the costs associated with the provision of agri-
cultural 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 positions in the Department of Agriculture
attributable to the provision of agricultural quar-
antine and inspection services and the administration
of this subsection shall not be counted toward the lim-
itation on the total number of full-time equivalent po-
sitions 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 limita-
tion on the total number of full-time equivalent posi-
tions.’’.
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SEC. 1403. COMMODITY CREDIT CORPORATION INTEREST
RATE.
Notwithstanding any other provision of law, the
monthly Commodity Credit Corporation interest rate appli-
cable 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 in-
sured 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
reserve 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.
Sec. 2019. Definitions.
Subtitle B—Housing
Sec. 2051. Annual adjustment factors for operating costs only; restraint on rent
increases.
Sec. 2052. Foreclosure avoidance and borrower assistance.
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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 sub-
sections (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 deter-
mination on—
(1) the monthly Savings Association Insurance
Fund balance 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 in-
sured depository institutions; and
(3) any other factors that the Board of Directors
deems appropriate.
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(c) DATE OF DETERMINATION.—For purposes of sub-
section (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 im-
posed 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.—Notwith-
standing any other provision of law, the proceeds of the spe-
cial assessment imposed under this section shall be depos-
ited 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 discre-
tion, exempt any insured depository institution that
the Board of Directors determines to be weak, from
paying the special assessment imposed under this sec-
tion if the Board of Directors determines that the ex-
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emption 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 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
CHAR-
TERED AND OTHER DEFINED INSTITUTIONS.—
(A) IN GENERAL.—In addition to the insti-
tutions exempted from paying the special assess-
ment under paragraph (1), the Board of Direc-
tors shall exempt any insured depository institu-
tion from payment of the special assessment 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 de-
posits of a savings association which
was in default or in danger of default;
and
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(II) received minority interim
capital assistance from the Resolution
Trust 
Corporation 
under 
section
21A(w) of the Federal Home Loan
Bank Act in connection with the acqui-
sition of any such savings association;
or
(iii) is a savings association, the de-
posits 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 substan-
tially all of the assets and assuming all
or substantially all of the deposit li-
abilities of a national bank in a trans-
action consummated after July 1,
1986; and
(II) as of the date of that trans-
action, 
had 
assets 
of 
less 
than
$150,000,000.
(B) DEFINITION.—For purposes of this
paragraph, an institution shall be deemed to
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have held SAIF-assessable deposits prior to Jan-
uary 1, 1993, if—
(i) it directly held SAIF-assessable in-
sured deposits prior to that date; or
(ii) it succeeded to, acquired, pur-
chased, or otherwise holds any SAIF-assess-
able 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 in-
sured depository 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 Insur-
ance Fund, based on SAIF-assessable depos-
its of that institution, at assessment rates
calculated under the schedule in effect for
Savings Association Insurance Fund mem-
bers on June 30, 1995; and
(ii) during calendar years 1998 and
1999—
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(I) into the Deposit Insurance
Fund, based on SAIF-assessable depos-
its 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 Insurance Fund
are not merged into the Deposit Insur-
ance Fund.
(B) OPTIONAL PRO RATA PAYMENT OF SPE-
CIAL
ASSESSMENT.—This paragraph shall not
apply with respect to any insured depository in-
stitution (or successor insured depository institu-
tion) 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 assess-
ment that the institution would have been
required to pay under subsection (a), if the
Board of Directors had not exempted the in-
stitution; and
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(ii) the number of full semiannual pe-
riods remaining between the date of the
payment and December 31, 1999.
(g) SPECIAL ELECTION FOR CERTAIN INSTITUTIONS
FACING HARDSHIP AS A RESULT OF THE SPECIAL ASSESS-
MENT.—
(1) ELECTION AUTHORIZED.—If—
(A) an insured depository institution, or
any depository institution holding company
which, directly or indirectly, controls such insti-
tution, 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 subsection (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 ap-
proval of the Corporation, to pay such special assess-
ment in accordance with paragraphs (2) and (3) in
lieu of paying such assessment in the manner re-
quired under subsection (a).
(2) 1ST
ASSESSMENT.—An insured depository
institution which makes an election under paragraph
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(1) shall pay an assessment of 50 percent of the
amount of the special assessment 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 in-
stitution which makes an election under paragraph
(1) shall pay a 2d assessment, by the date established
by the Board of Directors in accordance with para-
graph (4), in an amount equal to the product of 51
percent of the rate determined by the Board of Direc-
tors under subsection (a) for determining the amount
of the special assessment and the SAIF-assessable de-
posits of the institution on March 31, 1996, or such
other date in calendar year 1996 as the Board of Di-
rectors determines to be appropriate.
(4) DUE DATE OF 2D ASSESSMENT.—The date es-
tablished by the Board of Directors for the payment
of the assessment under paragraph (3) by a deposi-
tory institution shall be the earliest practicable date
which the Board of Directors determines to be appro-
priate, 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 elec-
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tion 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 de-
termining 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 paragraph (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 CER-
TAIN 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 in-
stitution which section 5(d)(3) of the Federal Deposit
Insurance Act treats as insured by the Savings Asso-
ciation Insurance Fund shall be reduced by 20 per-
cent—
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(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 Insur-
ance 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 great-
er than $5,000,000,000; and
(iii) was owned or controlled by a
bank holding company that owned or con-
trolled insured depository institutions hav-
ing 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 Association Insurance Fund.
(2) 
ADJUSTED
ATTRIBUTABLE
DEPOSIT
AMOUNT.—For purposes of this subsection, the ‘‘ad-
justed attributable deposit amount’’ shall be deter-
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mined 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 ad-
justed attributable deposit amount’’ and inserting
‘‘Except as provided in subparagraph (K), the ad-
justed attributable deposit amount’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(K) ADJUSTMENT OF ADJUSTED ATTRIB-
UTABLE DEPOSIT AMOUNT.—The amount deter-
mined under subparagraph (C)(i) for deposits
acquired by March 31, 1995, shall be reduced by
20 percent for purposes of computing the ad-
justed attributable deposit amount for the pay-
ment of any assessment for any semiannual pe-
riod after December 31, 1995 (other than the spe-
cial 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—
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‘‘(i) had an adjusted attributable de-
posit 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 per-
cent 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 con-
trolled insured depository institutions hav-
ing 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 Association Insurance Fund.’’.
(j) ADJUSTMENT OF SPECIAL ASSESSMENT FOR CER-
TAIN SAVINGS ASSOCIATIONS.—
(1) SPECIAL
ASSESSMENT
REDUCTION.—For
purposes of computing the special assessment imposed
under this section, in the case of any converted asso-
ciation, the amount of any deposits of such associa-
tion which were insured by the Savings Association
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Insurance Fund as of March 31, 1995, shall be re-
duced by 20 percent.
(2) CONVERTED ASSOCIATION.—For purposes of
this subsection, the term ‘‘converted association’’
means—
(A) any Federal savings association—
(i) that is a member of the Savings As-
sociation Insurance Fund and that has de-
posits subject to assessment 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 in-
stitution 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;
100
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(C) an insured bank that—
(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 ac-
quiring the deposits of such savings associa-
tion; and
(iii) was a Savings Association Insur-
ance Fund member as of the date of enact-
ment 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 De-
posit 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 be-
fore the date of the conversion.
SEC. 
2012. 
FINANCING 
CORPORATION 
ASSESSMENTS
SHARED PROPORTIONALLY BY ALL INSURED
DEPOSITORY INSTITUTIONS.
(a) IN GENERAL.—Section 21 of the Federal Home
Loan Bank Act (12 U.S.C. 1441) is amended—
101
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(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 insert-
ing ‘‘institutions’’; 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 In-
surance 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 paragraphs (1) and (2), respectively; and
(D) by adding at the end the following new
paragraph:
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‘‘(3) INSURED
DEPOSITORY
INSTITUTION.—The
term ‘insured depository institution’ has the same
meaning as in section 3 of the Federal Deposit Insur-
ance 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 amend-
ments made by this section shall become effective on Janu-
ary 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.
(2) DISPOSITION OF ASSETS AND LIABILITIES.—
All assets and liabilities of the Bank Insurance Fund
and the Savings Association Insurance Fund shall be
transferred to the Deposit Insurance Fund.
(3) NO SEPARATE EXISTENCE.—The separate ex-
istence of the Bank Insurance Fund and the Savings
Association Insurance Fund shall cease.
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(b) SPECIAL RESERVE OF THE DEPOSIT INSURANCE
FUND.—
(1) IN GENERAL.—Immediately before the merger
of the Bank Insurance Fund and the Savings Associa-
tion Insurance Fund, if the reserve ratio of the Sav-
ings Association Insurance Fund exceeds the des-
ignated reserve ratio, the amount by which that re-
serve ratio exceeds the designated reserve ratio shall
be placed in the Special Reserve of the Deposit Insur-
ance Fund, established under section 11(a)(5) of the
Federal Deposit Insurance Act, as amended by this
section.
(2) DEFINITION.—For purposes of this sub-
section, 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 members.
(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall become effective on Janu-
ary 1, 1998, if no insured depository institution is a sav-
ings association on that date.
(d) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) 
DEPOSIT
INSURANCE
FUND.—Section
11(a)(4) of the Federal Deposit Insurance Act (12
U.S.C. 1821(a)(4)) is amended—
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(A) by redesignating subparagraph (B) as
subparagraph (C);
(B) by striking subparagraph (A) and in-
serting the following:
‘‘(A) ESTABLISHMENT.—There is estab-
lished 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 available 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 fol-
lowing:
‘‘(4) ESTABLISHMENT OF THE DEPOSIT INSUR-
ANCE 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
105
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this subsection) is amended by striking ‘‘Bank Insur-
ance 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 fol-
lowing new subparagraph:
‘‘(D) DEPOSITS.—All amounts assessed
against insured depository institutions by the
Corporation shall be deposited in the Deposit In-
surance Fund.’’.
(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 ac-
cordance with section 13(a).
‘‘(ii) LIMITATION.—The Corporation
shall not provide any assessment credit, re-
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fund, or other payment from any amount
in the Special Reserve.
‘‘(B) EMERGENCY
USE
OF
SPECIAL
RE-
SERVE.—Notwithstanding 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 In-
surance Fund is less than 50 percent of the
designated reserve ratio; and
‘‘(ii) the Corporation expects the re-
serve ratio of the Deposit Insurance Fund to
remain at less than 50 percent of the des-
ignated reserve ratio for each of the next 4
calendar quarters.
‘‘(C) EXCLUSION OF SPECIAL RESERVE IN
CALCULATING
RESERVE
RATIO.—Notwithstand-
ing any other provision of law, any amounts in
the Special Reserve shall be excluded in calculat-
ing 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—
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(A) in subclause (I), by striking ‘‘to Savings
Associations Insurance Fund members’’ and in-
serting ‘‘to insured depository institutions, and
their successors, which were Savings Association
Insurance Fund members on September 1,
1995’’; and
(B) in subclause (II), by striking ‘‘to Sav-
ings Associations Insurance Fund members’’ and
inserting ‘‘to insured depository institutions,
and their successors, which were Savings Asso-
ciation Insurance Fund members on September
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 INSUR-
ANCE FUND.—The term
‘‘(1) DEPOSIT INSURANCE FUND.—The term ‘De-
posit Insurance 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 Insur-
ance Fund to aggregate estimated insured deposits
held in all insured depository institutions.
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‘‘(3) DESIGNATED
RESERVE
RATIO.—The des-
ignated reserve ratio of the Deposit Insurance Fund
for each year shall be—
‘‘(A) 1.25 percent of estimated insured de-
posits; or
‘‘(B) a higher percentage of estimated in-
sured deposits that the Board of Directors deter-
mines to be justified for that year by cir-
cumstances raising a significant risk of substan-
tial future losses to the fund.
(B) SECTION 7.—Section 7 of the Federal
Deposit Insurance 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), respec-
tively;
(iii) in subsection (b)(2), by striking
subparagraphs (B) and (F), and by redesig-
nating subparagraphs (C), (E), (G), and
(H) as subparagraphs (B) through (E), re-
spectively.
(C) SECTION 11.—Section 11(a) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1821(a))
is amended—
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(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 sen-
tence, by striking ‘‘affected deposit insurance fund’’
and inserting ‘‘Deposit Insurance Fund’’.
(8) INVESTMENTS PROMOTING PUBLIC WELFARE;
LIMITATIONS ON AGGREGATE INVESTMENTS.—The 23d
undesignated paragraph of section 9 of the Federal
Reserve Act (12 U.S.C. 338a) is amended in the
fourth sentence, by striking ‘‘affected deposit insur-
ance fund’’ and inserting ‘‘Deposit Insurance Fund’’.
(9) 
ADVANCES
TO
CRITICALLY
UNDERCAPITALIZED
DEPOSITORY
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 EMERGENCY DEFICIT CONTROL ACT OF 1985.—
Section 255(g)(1)(A) of the Balanced Budget and
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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 strik-
ing ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT
INSURANCE FUND’’; and
(ii) by striking ‘‘Savings Association
Insurance Fund’’ each place such term ap-
pears and inserting ‘‘Deposit Insurance
Fund’’;
(B) in section 21A(b)(4)(B) (12 U.S.C.
1441a(b)(4)(B)), by striking ‘‘affected deposit in-
surance fund’’ and inserting ‘‘Deposit Insurance
Fund’’;
(C) in section 21A(b)(6)(B) (12 U.S.C.
1441a(b)(6)(B))—
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(i) in the subparagraph heading, by
striking ‘‘SAIF-INSURED
BANKS’’ and in-
serting ‘‘CHARTER CONVERSIONS’’; and
(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 in-
serting ‘‘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 Asso-
ciation 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), respec-
tively.
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(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 insert-
ing ‘‘For purposes of this subsection, the fol-
lowing 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 Sav-
ings Association Insurance Fund member’’
and inserting ‘‘insured by the Deposit In-
surance 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’’
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and inserting ‘‘Deposit Insurance Fund’’;
and
(vii) in subsection (v)(2)(A)(i), by
striking ‘‘, the Savings Association Insur-
ance 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 add-
ing ‘‘and’’ at the end;
(iii) in subsection (e)(1)(B), by strik-
ing ‘‘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 sub-
paragraphs (E), (F), and (G), respectively.
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(13) AMENDMENTS TO THE NATIONAL HOUSING
ACT.—The National Housing Act (12 U.S.C. 1701 et
seq.) is amended—
(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 Associa-
tion 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 Insur-
ance Fund for banks and through the Savings
Association Insurance Fund for savings associa-
tions’’ and inserting ‘‘Deposit Insurance Fund’’.
(14) FURTHER AMENDMENTS TO THE FEDERAL
DEPOSIT INSURANCE ACT.—The Federal Deposit In-
surance 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 associa-
tion.’’;
(B) 
in 
section 
5(b)(5) 
(12 
U.S.C.
1815(b)(5)), by striking ‘‘the Bank Insurance
Fund or the Savings Association Insurance
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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 Association 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 INSUR-
ANCE FUND.—The fee paid by the depository institu-
tion under paragraph (1) shall be credited to the De-
posit Insurance Fund.’’;
(iii) by striking ‘‘(1) UNINSURED IN-
STITUTIONS.—’’; and
(iv) by redesignating subparagraphs
(A) and (C) as paragraphs (1) and (3), re-
spectively, and moving the margins 2 ems
to the left;
(E) in section 5(e) (12 U.S.C. 1815(e))—
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(i) in paragraph (5)(A), by striking
‘‘Bank Insurance Fund or the Savings Asso-
ciation 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 Insurance Fund’’ and inserting ‘‘De-
posit 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 insert-
ing ‘‘the Deposit Insurance Fund’’;
(ii) in clauses (i)(I) and (iv) of para-
graph (2)(A), by striking ‘‘each deposit in-
surance fund’’ each place such term appears
and 
inserting 
‘‘the 
Deposit 
Insurance
Fund’’;
(iii) in paragraph (2)(A)(iii), by strik-
ing ‘‘a deposit insurance fund’’ and insert-
ing ‘‘the Deposit Insurance Fund’’;
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(iv) 
by 
striking 
clause 
(iv) 
of
paragagraph (2)(A);
(v) in paragraph (2)(C) (as redesig-
nated by paragraph (6)(B) of this sub-
section)—
(I) by striking ‘‘any deposit in-
surance fund’’ and inserting ‘‘the De-
posit 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 redesig-
nated by paragraph (6)(B) of this sub-
section)—
(I) in the subparagraph heading,
by striking ‘‘FUNDS ACHIEVE’’ and in-
serting ‘‘FUND ACHIEVES’’; and
(II) by striking ‘‘a deposit insur-
ance fund’’ and inserting ‘‘the Deposit
Insurance Fund’’;
(vii) in paragraph (3)—
(I) in the paragraph heading, by
striking 
‘‘FUNDS’’ 
and 
inserting
‘‘FUND’’;
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(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 para-
graph (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 Corpora-
tion may, by regulation, amend a schedule pro-
mulgated under subparagraph (B).’’; and
(viii) in paragraph (6)—
(I) by striking ‘‘any such assess-
ment’’ and inserting ‘‘any such assess-
ment is necessary’’;
(II) by striking ‘‘(A) is nec-
essary—’’;
(III) by striking subparagraph
(B);
(IV) by redesignating clauses (i),
(ii), and (iii) as subparagraphs (A),
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(B), and (C), respectively, and moving
the margins 2 ems to the left; and
(V) in subparagraph (C) (as re-
designated), 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 subparagraph (B); and
(iii) in subparagraph (B) (as redesig-
nated), 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 ‘‘LI-
ABILITIES.—’’ and all that follows through
‘‘Except’’ and inserting ‘‘LIABILITIES.—Ex-
cept’’;
(ii) by striking paragraph (2)(B); and
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(iii) in paragraph (3), by striking ‘‘the
Bank Insurance Fund, the Savings Associa-
tion 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 Asso-
ciation Insurance Fund,’’ and inserting
‘‘Deposit Insurance Fund, the Special Re-
serve 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)—
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(I) by striking ‘‘appropriate in-
surance fund’’ and inserting ‘‘Deposit
Insurance Fund’’;
(II) by striking ‘‘the members of
the insurance fund (of which such in-
stitution 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 in-
serting ‘‘the institution’s’’;
(iv) in subsection (c), by striking para-
graph (11);
(v) in subsection (h), by striking
‘‘Bank Insurance Fund’’ and inserting ‘‘De-
posit 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 strik-
ing ‘‘Savings Association Insurance Fund’’
and inserting ‘‘Deposit Insurance Fund’’;
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(N) in section 14(a) (12 U.S.C. 1824(a)) in
the fifth sentence—
(i) by striking ‘‘Bank Insurance Fund
or 
the 
Savings 
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 Asso-
ciation 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))—
(i) by striking ‘‘the Bank Insurance
Fund or Savings Association Insurance
Fund, respectively’’ each place such term
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appears and inserting ‘‘the Deposit Insur-
ance Fund’’; and
(ii) in subparagraph (B), by striking
‘‘the Bank Insurance Fund or the Savings
Association Insurance Fund, respectively’’
and 
inserting 
‘‘the 
Deposit 
Insurance
Fund’’;
(S) in section 17(a) (12 U.S.C. 1827(a))—
(i) in the subsection heading, by strik-
ing ‘‘BIF, SAIF,’’ and inserting ‘‘THE DE-
POSIT INSURANCE FUND’’; and
(ii) in paragraph (1), by striking ‘‘the
Bank Insurance Fund, the Savings Associa-
tion Insurance Fund,’’ each place such term
appears and inserting ‘‘the Deposit Insur-
ance Fund’’;
(T) in section 17(d) (12 U.S.C. 1827(d)), by
striking ‘‘the Bank Insurance Fund, the Savings
Association Insurance Fund,’’ each place such
term appears and inserting ‘‘the Deposit Insur-
ance 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 ap-
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pears 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 sub-
sections (a)(1) and (d)(1)(A), by striking ‘‘ap-
propriate deposit insurance fund’’ each place
such term appears and inserting ‘‘Deposit Insur-
ance 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 insur-
ance fund’’ and inserting ‘‘Deposit Insurance
Fund’’;
(AA) in section 38(a) (12 U.S.C. 1831o(a))
in the subsection heading, by striking ‘‘FUNDS’’
and inserting ‘‘FUND’’;
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(BB) 
in 
section 
38(k) 
(12 
U.S.C.
1831o(k))—
(i) in paragraph (1), by striking ‘‘a
deposit insurance fund’’ and inserting ‘‘the
Deposit Insurance Fund’’; and
(ii) in paragraph (2)(A)—
(I) by striking ‘‘A deposit insur-
ance fund’’ and inserting ‘‘The Deposit
Insurance Fund’’; and
(II) by striking ‘‘the deposit in-
surance 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 follows through ‘‘Subsections (e)(2)’’
and inserting ‘‘ASSOCIATIONS.—Subsections
(e)(2)’’;
(ii) by redesignating subparagraphs
(A), (B), and (C) as paragraphs (1), (2),
and (3), respectively, and moving the mar-
gins 2 ems to the left; and
(iii) in paragraph (1) (as redesig-
nated), by redesignating clauses (i) and (ii)
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as subparagraphs (A) and (B), respectively,
and moving the margins 2 ems to the left.
(15) AMENDMENTS TO THE FINANCIAL INSTITU-
TIONS REFORM, RECOVERY, AND ENFORCEMENT ACT
OF 1989.—The Financial Institutions Reform, Recov-
ery, 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 Enter-
prise Act of 1991 (12 U.S.C. 1834(a)(1)) is amended
by striking ‘‘section 7(b)(2)(H)’’ and inserting ‘‘sec-
tion 7(b)(2)(G)’’.
(17) AMENDMENT TO THE BANK HOLDING COM-
PANY
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’’.
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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
RE-
SERVE.—
‘‘(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 Sav-
ings Association Insurance Fund exceeds the des-
ignated reserve ratio, the amount by which the
reserve ratio exceeds the designated reserve ratio
shall be placed in the Special Reserve of the Sav-
ings 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.
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‘‘(iv) EMERGENCY
USE
OF
SPECIAL
RE-
SERVE.—Notwithstanding clause (iii), the Cor-
poration may, in its sole discretion, transfer
amounts from the Special Reserve of the Savings
Association Insurance Fund to the Savings Asso-
ciation 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 designated reserve ratio; and
‘‘(II) the Corporation expects the re-
serve ratio of the Savings Association Insur-
ance Fund to remain at less than 50 per-
cent of the designated reserve ratio for each
of the next 4 calendar quarters.
‘‘(v) EXCLUSION OF SPECIAL RESERVE IN
CALCULATING
RESERVE
RATIO.—Notwithstand-
ing 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 In-
surance Fund.’’.
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SEC. 2015. REFUND OF AMOUNTS IN DEPOSIT INSURANCE
FUND IN EXCESS OF DESIGNATED RESERVE
AMOUNT.
Subsection (e) of section 7 of the Federal Deposit In-
surance Act (12 U.S.C. 1817(e)) is amended to read as fol-
lows:
‘‘(e) REFUNDS.—
‘‘(1) OVERPAYMENTS.—In the case of any pay-
ment of an assessment by an insured depository insti-
tution in excess of the amount due to the Corporation,
the Corporation may—
‘‘(A) refund the amount of the excess pay-
ment 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 subpara-
graphs (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 In-
surance Fund pursuant to section 2013 of
the Balanced Budget Act of 1995); or
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‘‘(ii) the Deposit Insurance Fund
(after the establishment of such fund),
exceeds the balance required to meet the des-
ignated reserve ratio applicable with respect to
such fund, such excess amount shall be refunded
to insured depository institutions by the Cor-
poration on such basis as the Board of Directors
determines to be appropriate, taking into ac-
count the factors considered under the risk-based
assessment system.
‘‘(B) REFUND NOT TO EXCEED PREVIOUS
SEMIANNUAL ASSESSMENT.—The amount of any
refund under this paragraph to any member of
a deposit insurance fund for any semiannual as-
sessment 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 IN-
STITUTIONS.—No refund may be made under
this paragraph with respect to the amount of
any assessment paid for any semiannual assess-
ment period by any insured depository institu-
tion described in clause (v) of subsection
(b)(2)(A).’’.
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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—
(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 provi-
sion of this subsection, during the period be-
ginning on the date of enactment of the Bal-
anced Budget Act of 1995, and ending on
January 1, 1998, the assessment rate for a
Savings Association Insurance Fund mem-
ber may not be less than the assessment rate
for a Bank Insurance Fund member that
poses a comparable risk to the deposit in-
surance fund.’’.
SEC. 2017. ASSESSMENTS AUTHORIZED ONLY IF NEEDED TO
MAINTAIN THE RESERVE RATIO OF A DE-
POSIT 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
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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 provided in clause (v), the Board
of Directors shall not set semiannual assess-
ments 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 designated reserve ratio, to in-
crease the reserve ratio to the des-
ignated 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 AS-
SESSMENTS.—The Board of Directors may
set semiannual assessments in excess of the
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amount permitted under clauses (i) and
(iii) with respect to insured depository in-
stitutions that exhibit financial, oper-
ational, or compliance weaknesses ranging
from moderately severe to unsatisfactory, or
are not well capitalized, as that term is de-
fined in section 38.’’.
SEC. 2018. LIMITATION ON AUTHORITY OF OVERSIGHT
BOARD TO CONTINUE 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 FOLLOWING TERMINATION OF CORPORATION.—
‘‘(A) TERMINATION OF AUTHORITY TO EM-
PLOY STAFF.—Except as provided in subpara-
graph (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 to provide other benefits for officers and em-
ployees of the Board shall terminate as of De-
cember 31, 1995.
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‘‘(B) LIMITED AUTHORITY FOR EMPLOYING
STAFF.—The Thrift Depositor Protection Over-
sight Board may employ not more than 18 indi-
viduals, excluding any employee of any other de-
partment or agency utilized by the Board, to
carry out the functions of the Board during the
period beginning on January 1, 1996 and end-
ing 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 AD-
DITIONAL
EMPLOYEES
REQUIRED
TO
BE
COM-
MENCED.—The Thrift Depositor Protection Over-
sight 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 Manage-
ment, the employment of any employee of the
Board whose continued employment by the
Board after such date is inconsistent with the re-
quirement 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),’’
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after the closing parenthesis of the subparagraph designa-
tion in each such subparagraph.
SEC. 2019. DEFINITIONS.
For purposes of this subtitle—
(1) the term ‘‘Bank Insurance Fund’’ means the
fund established pursuant to section (11)(a)(5)(A) of
the Federal Deposit Insurance Act, as that section ex-
isted 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 Fed-
eral Deposit Insurance Act;
(3) the terms ‘‘bank’’, ‘‘Board of Directors’’,
‘‘Corporation’’, 
‘‘insured 
depository 
institution’’,
‘‘Federal savings association’’, ‘‘savings association’’,
‘‘State savings bank’’, and ‘‘State depository institu-
tion’’ 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 Fed-
eral Deposit Insurance Act, as amended by section
2013(d) of this Act;
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(5) the term ‘‘depository institution holding com-
pany’’ has the same meaning as in section 3 of the
Federal Deposit Insurance Act;
(6) the term ‘‘designated reserve ratio’’ has the
same meaning as in section 7(b)(2)(A)(iv) of the Fed-
eral Deposit Insurance Act;
(7) the term ‘‘Savings Association Insurance
Fund’’ means the fund established pursuant to section
11(a)(6)(A) of the Federal Deposit Insurance Act, as
that section existed on the day before the date of en-
actment 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 Insur-
ance Fund under the Federal Deposit Insurance
Act; and
(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 OPERAT-
ING COSTS ONLY; RESTRAINT ON RENT IN-
CREASES.
(a) ANNUAL ADJUSTMENT FACTORS FOR OPERATING
COSTS ONLY.—Section 8(c)(2)(A) of the United States
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Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is amend-
ed—
(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 Sec-
retary shall adjust the rent using an operating costs
factor that increases the rent to reflect increases in
operating 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.’’.
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(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 adjust-
ment, if the assistance contract provides for the adjustment
of the maximum monthly rent by applying an annual ad-
justment 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 an-
nual 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 ad-
justed rent shall not exceed the rent for a comparable unas-
sisted 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 AS-
SISTANCE.
(a) FORECLOSURE AVOIDANCE.—Except as provided
in subsection (e), the last sentence of section 204(a) of the
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National Housing Act (12 U.S.C. 1710(a)) is amended by
inserting before 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 mort-
gagee 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 Secretary or the mortgagee
shall be subject to judicial review’’.
(b) AUTHORITY
TO ASSIST MORTGAGORS
IN DE-
FAULT.—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 par-
tial 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
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Secretary’s sole discretion and on terms and conditions ac-
ceptable 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 appro-
priate insurance fund, in connection with any activities
that the mortgagee is required to undertake concerning re-
payment by the mortgagor of the amount owed to the Sec-
retary.
‘‘(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 pro-
gram under this subsection only if—
‘‘(A) the mortgage was in default;
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‘‘(B) the mortgagee has modified the mort-
gage 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 Secretary has determined to
be in the best interests of the appropriate insur-
ance fund.
‘‘(3) PAYMENT OF INSURANCE BENEFITS.—Upon
accepting assignment of a mortgage under the pro-
gram under this subsection, the Secretary may pay
insurance benefits to the mortgagee from the appro-
priate insurance fund in an amount that the Sec-
retary determines to be appropriate, but which may
not exceed the amount necessary to compensate the
mortgagee for the assignment and any losses and ex-
penses resulting from the mortgage modification.
‘‘(c) PROHIBITION OF JUDICIAL REVIEW.—No decision
by the Secretary to exercise or forego exercising any author-
ity under this section shall be subject to judicial review.
‘‘(d) SAVINGS PROVISION.—Any mortgage for which
the mortgagor has applied to the Secretary, before the date
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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 enactment shall continue to be gov-
erned 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 in-
sured by the Secretary under this Act, or to accept assign-
ments of such mortgages.’’.
(c) APPLICABILITY OF AMENDMENTS.—Except as pro-
vided in subsection (e), the amendments made by sub-
sections (a) and (b) shall apply only with respect to mort-
gages 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 Develop-
ment shall issue interim regulations to implement this sec-
tion and the amendments made by this section.
(e) EFFECTIVENESS AND APPLICABILITY.—If this Act
is enacted after the date of the enactment of the Depart-
ments of Veterans Affairs and Housing and Urban Develop-
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ment, and Independent Agencies Appropriations Act,
1996—
(1) subsections (a), (b), (c), and (d) of this sec-
tion shall not take effect; and
(2) subsection (c) of the section relating to fore-
closure avoidance 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 Octo-
ber 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 AUTHOR-
ITY.—
(1) AMENDMENTS.—Section 309(j) of the Com-
munications Act of 1934 (47 U.S.C. 309(j)) is amend-
ed—
(A) by striking paragraphs (1) and (2) and
inserting the following:
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‘‘(1) GENERAL AUTHORITY.—If, consistent with
the obligations described in paragraph (6)(E), mutu-
ally exclusive applications are accepted for any ini-
tial license or construction permit, then the Commis-
sion shall grant such license or permit to a qualified
applicant through a system of competitive bidding
that meets the requirements of this subsection.
‘‘(2) EXEMPTIONS.—The competitive bidding au-
thority granted by this subsection shall not apply to
licenses or construction permits issued by the Com-
mission—
‘‘(A) that, as the result of the Commission
carrying out the obligations described in para-
graph (6)(E), are not mutually exclusive;
‘‘(B) for public safety radio services, includ-
ing 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 per-
mits for new terrestrial digital television services
assigned by the Commission to existing terres-
trial broadcast licensees to replace their current
television licenses, unless—
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‘‘(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 ini-
tial 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 services;
and
‘‘(ii) the Congress amends this sub-
section 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 terres-
trial commercial television broadcast 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.
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(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 Communica-
tions Commission has accepted mutually exclusive ap-
plications 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
Commission shall complete all actions necessary to
permit the assignment, 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 li-
censes 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 ex-
pected to produce greater receipts;
(B) in the aggregate span not less than 100
megahertz;
(C) are located below 3 gigahertz; and
(D) have not, as of the date of enactment of
this Act—
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(i) been designated by Commission reg-
ulation for assignment pursuant to such
section;
(ii) been identified by the Secretary of
Commerce pursuant to section 113 of the
National Telecommunications and Informa-
tion Administration Organization Act; or
(iii) been reserved for Federal Govern-
ment 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 aggre-
gate spectrum by September 30, 2000.
(2) CRITERIA FOR REASSIGNMENT.—In making
available bands of frequencies for competitive bidding
pursuant to paragraph (1), the Commission shall—
(A) seek to promote the most efficient use of
the spectrum;
(B) take into account the cost to incumbent
licensees of relocating existing uses to other
bands of frequencies or other means of commu-
nication;
(C) take into account the needs of public
safety radio services;
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(D) comply with the requirements of inter-
national agreements concerning spectrum alloca-
tions; 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 frequencies that are available to the
Commission for assignment; and
(B) the Commission has identified bands of
frequencies that are—
(i) suitable for the relocation of such li-
censees; and
(ii) allocated for Federal Government
use, but that could be reallocated pursuant
to part B of the National Telecommuni-
cations and Information Administration
Organization Act (as amended by this sec-
tion).
(c) IDENTIFICATION
AND REALLOCATION
OF FRE-
QUENCIES.—The National Telecommunications and Infor-
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mation Administration Organization Act (47 U.S.C. 901
et seq.) is amended—
(1) in section 113, by adding at the end the fol-
lowing new subsections:
‘‘(f) ADDITIONAL REALLOCATION REPORT.—If the Sec-
retary 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 STA-
TIONS.—
‘‘(1) IN GENERAL.—In order to expedite the effi-
cient use of the electromagnetic spectrum and not-
withstanding section 3302(b) of title 31, United
States Code, any Federal entity which operates a Fed-
eral Government station may accept payment in ad-
vance or in-kind reimbursement of costs, or a com-
bination of payment in advance and in-kind reim-
bursement, from any person to defray entirely the ex-
penses of relocating the Federal entity’s operations
from one or more radio spectrum frequencies to an-
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other frequency or frequencies, including, without lim-
itation, the costs of any modification, replacement, or
reissuance of equipment, facilities, operating manu-
als, regulations, 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 appropriation
or fiscal year limitation, only for the operations of
the Federal entity for which such funds were depos-
ited 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 Government sta-
tion’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 Fed-
eral entity, including all engineering, equipment,
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site acquisition and construction, and regulatory
fee costs;
‘‘(B) the person seeking relocation completes
all activities necessary for implementing the relo-
cation, including construction of replacement fa-
cilities (if necessary and appropriate) and iden-
tifying and obtaining on the Federal entity’s be-
half new frequencies for use by the relocated Fed-
eral 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 success-
fully accomplish its purposes; and
‘‘(D) NTIA has determined that the pro-
posed use of the spectrum frequency band to
which the Federal entity will relocate its oper-
ations is—
‘‘(i) consistent with obligations under-
taken by the United States in international
agreements and with United States national
security and public safety interests; and
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‘‘(ii) suitable for the technical charac-
teristics 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 appro-
priate officers of the Federal Government.
‘‘(3) RIGHT TO RECLAIM.—If within one year
after the relocation the Federal Government station
demonstrates to the Commission that the new facili-
ties or spectrum are not comparable to the facilities
or spectrum from which the Federal Government sta-
tion 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 oper-
ates 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 author-
ity granted under subsection (g) and any other applicable
provision of law, take action to relocate its spectrum use
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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 avail-
able 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 sub-
section (g).
‘‘(i) DEFINITION.—For purposes of this section, the
term ‘Federal entity’ means any department, agency, or
other instrumentality of the Federal Government that uti-
lizes 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 inserting ‘‘(a), (d)(1), or (f)’’.
(d) 
IDENTIFICATION
AND
REALLOCATION
OF
AUCTIONABLE
FREQUENCIES.—The 
National 
Tele-
communications and Information Administration Organi-
zation Act (47 U.S.C. 901 et seq.) is amended—
(1) in section 113(b)—
(A) by striking the heading of paragraph
(1) and inserting ‘‘INITIAL REALLOCATION RE-
PORT.—’’;
(B) by inserting ‘‘in the first report re-
quired by subsection (a)’’ after ‘‘recommend for
reallocation’’ in paragraph (1);
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(C) by inserting ‘‘or (3)’’ after ‘‘paragraph
(1)’’ each place it appears in paragraph (2); and
(D) by inserting after paragraph (2) the fol-
lowing new paragraph:
‘‘(3) SECOND
REALLOCATION
REPORT.—In ac-
cordance with the provisions of this section, the Sec-
retary 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 re-
port required by section 113(a)’’ and inserting
‘‘the initial reallocation report required by sec-
tion 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 frequencies made available for
reallocation pursuant to section 113(b)(3), the Commission
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shall, not later than 1 year after receipt of the second
reallocation report required by such section, prepare, sub-
mit 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 accord-
ance 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 EF-
FECTIVE DATE.
(a) SHORT TITLE.—This subtitle may be cited as the
‘‘Student Loan Reform Act of 1995’’.
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(b) REFERENCES.—Except as otherwise expressly pro-
vided, 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 sub-
title shall take effect on January 1, 1996.
SEC. 4002. PARTICIPATION OF INSTITUTIONS AND ADMINIS-
TRATION 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 fol-
lows:
‘‘(2) DETERMINATION
OF
NUMBER
OF
AGREE-
MENTS.—Notwithstanding any other provision of law,
the Secretary may enter into agreements under sub-
sections (a) and (b) of section 454 with institutions
for participation in the direct loan program under
this part, subject to the following:
‘‘(A) For academic year 1994–1995, loans
made under this part shall represent not more
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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 in-
stitution that has not applied and been accepted
for participation 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 Con-
solidation Loans, shall represent not more than
10 percent of the new student loan volume for
such year, except that only the 102 eligible insti-
tutions that participated in the direct loan pro-
gram under this part for academic year 1994–
1995 shall be eligible to participate in such pro-
gram for academic year 1996–1997 and for each
succeeding academic year.’’;
(2) by striking paragraph (3);
(3) by redesignating paragraph (4) as para-
graph (3); and
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(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 aca-
demic 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 amend-
ed by subparagraph (A)) as subparagraph (B);
and
(C) by striking ‘‘(i) categorizing’’ and in-
serting ‘‘categorizing’’.
(c) CONTROL OF ADMINISTRATIVE EXPENSES.—Sec-
tion 458 (20 U.S.C. 1087h) is amended—
(1) by amending subsection (a) to read as fol-
lows:
‘‘(a) EXPENSES.—
‘‘(1) IN GENERAL.—
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‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), each fiscal year there shall be
available to the Secretary from funds not other-
wise appropriated, funds to be obligated for sub-
sidy costs under this part for the William D.
Ford Federal Direct Loan Program. There shall
also be available from funds not otherwise appro-
priated, funds to be obligated for indirect admin-
istrative expenses under this part and part B,
not to exceed (from such funds not otherwise ap-
propriated) $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 admin-
istrative cost allowances for guaranty agencies
for costs accrued prior to January 1, 1996) for
fiscal year 1996, and $85,000,000 for each of the
fiscal years 1997 through 2002.
‘‘(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 fis-
cal year prior to fiscal year 1996.
‘‘(2) DIRECT AND INDIRECT ADMINISTRATIVE EX-
PENSES.—
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‘‘(A) DIRECT ADMINISTRATIVE EXPENSES.—
‘‘(i) IN
GENERAL.—For purposes of
this subsection the term ‘direct administra-
tive expenses’ means the cost under the Wil-
liam D. Ford Federal Direct Loan Program
of—
‘‘(I) activities related to credit ex-
tension, loan origination, loan servic-
ing, management of contractors, and
payments to contractors, other govern-
ment entities, and program partici-
pants, 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 ac-
tivities described in subclause (I), (II), or
(III) of clause (i).
‘‘(B) 
INDIRECT
ADMINISTRATIVE
EX-
PENSES.—For purposes of this subsection the
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term ‘indirect administrative expenses’ means
the cost of—
‘‘(i) personnel engaged in developing
program regulations, policy and adminis-
trative guidance;
‘‘(ii) audits of institutions and con-
tractors;
‘‘(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 cal-
culated on a net present value basis.’’; and
(2) by striking subsection (d).
(d) DEFAULT RATE LIMITATIONS ON DIRECT LEND-
ING.—
(1) INSTITUTIONAL ELIGIBILITY BASED ON DE-
FAULT
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)—
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(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
(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 inserting ‘‘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 regula-
tions for the calculation of default rates for loans that
are repaid pursuant to income contingent repayment
under this part, which regulations shall be com-
parable to regulations for the calculation of default
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rates for loans that are repaid pursuant to income
contingent repayment under part D.’’.
(4) TERMINATION OF INSTITUTIONAL PARTICIPA-
TION.—Section 455 (20 U.S.C. 1087e) is amended by
adding at the end the following new subsection:
‘‘(l) TERMINATION OF INSTITUTIONS FOR HIGH DE-
FAULT RATES.—
‘‘(1) METHODOLOGY AND CRITERIA.—The Sec-
retary shall develop—
‘‘(A) a methodology for the calculation of
institutional default rates under the loan pro-
grams operated pursuant to this part;
‘‘(B) criteria for the initiation of termi-
nation proceedings on the basis of such default
rates; and
‘‘(C) procedures for the conduct of such ter-
mination proceedings.
‘‘(2) COMPARABILITY TO PART B.—In developing
the methodology, 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.
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Such procedures shall include provisions for the ap-
peal of default rate calculations based on deficiencies
in the servicing of loans under this part that are com-
parable to the provisions for such appeals based on
deficiencies in the servicing of loans under part B.
‘‘(3) PROMULGATION.—The methodology, cri-
teria, procedures and standards required by para-
graphs (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 ‘‘dur-
ing the transition’’ and all that follows through
‘‘part D of this title’’; and
(B) in subparagraph (B), by striking ‘‘sec-
tion 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))—
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(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 dis-
ruption’’; 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 striking ‘‘the progress of the tran-
sition from the loan programs under this part to’’
and inserting ‘‘the integrity and administration of’’;
(6) in section 428(e)(1)(B)(ii) (20 U.S.C.
1078(e)(1)(B)(ii)), by striking ‘‘during the transi-
tion’’ 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 ‘‘indi-
rect administrative expenses’’;
(8) in section 428(j)(3) (20 U.S.C. 1078(j)(3))—
(A) in the heading for paragraph (3), by
striking ‘‘DURING TRANSITION TO DIRECT LEND-
ING’’; and
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(B) in subparagraph (A), by striking ‘‘dur-
ing the transition’’ 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 ‘‘TRANSI-
TION’’ 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 semicolon;
(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 oper-
ation’’ and inserting ‘‘integrity 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.
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(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 institu-
tions of higher education participating in direct lend-
ing 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 inserting ‘‘section 428(c)(9)’’.
SEC. 4003. LOAN TERMS AND CONDITIONS.
(a) COMPARABILITY PROVISIONS.—
(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
REQUIREMENTS, BENEFITS
AND
AMOUNTS.—Unless
otherwise specified in this part, loans made to bor-
rowers under this part shall have the same terms,
conditions, deferments, forbearances, eligibility re-
quirements, and benefits, be subject to the same ad-
ministrative requirements for origination, payment
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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 repay-
ment plans, as the corresponding types of loans made
to borrowers under sections 428, 428B, and 428H.
The Secretary shall promulgate regulations imple-
menting 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 pursuant to a graduated, income-sen-
sitive, or income contingent repayment sched-
ule)’’ after ‘‘10 years’’; and
(B) in subparagraph (E)(ii), by inserting
‘‘(except pursuant to a graduated, income-sen-
sitive, or income contingent repayment sched-
ule)’’ after ‘‘10 years’’.
(b) ABILITY OF PART D BORROWERS TO OBTAIN FED-
ERAL
STAFFORD
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), respec-
tively; and
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(2) by inserting after subparagraph (A) the fol-
lowing new subparagraph:
‘‘(B) made under part D of this title;’’.
(c) ABILITY OF PART B BORROWERS TO OBTAIN FED-
ERAL 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 BOR-
ROWERS 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 consoli-
dation 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 appro-
priate certification procedures to verify the eligi-
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bility of borrowers for consolidation loans under
this paragraph.
‘‘(C) The Secretary shall not offer consolida-
tion loans under this paragraph if, in the Sec-
retary’s judgment, the Department does not have
the necessary origination and servicing arrange-
ments in place for such loans, or the projected
volume in such loans will be destabilizing to the
availability of loans otherwise available under
this part.’’.
(d) INCOME CONTINGENT REPAYMENT IN THE FED-
ERAL FAMILY EDUCATION LOAN PROGRAM.—
(1) INSURANCE
PROGRAM
AGREEMENTS.—Sec-
tion 428(b)(1)(E)(i) (20 U.S.C. 1078(b)(1)(E)(i)) is
amended by striking ‘‘or income-sensitive repayment
schedule’’ and inserting ‘‘repayment schedule or an
income-sensitive repayment schedule, 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 pre-
ceding 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 in-
come-sensitive repayment schedules’’ and insert-
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ing ‘‘repayment schedules or income-sensitive re-
payment schedules, and may include, at the dis-
cretion of the lender, the establishment of income
contingent repayment schedules’’; and
(B) in the second sentence, by striking ‘‘in-
come-sensitive’’ and inserting ‘‘graduated, in-
come-sensitive, or income contingent’’.
(3) COMPARABLE TERMS AND CONDITIONS.—Sec-
tion 428(m) (20 U.S.C. 1078(m)) is amended by add-
ing at the end the following new paragraph:
‘‘(3) INCOME CONTINGENT REPAYMENT SCHED-
ULES.—For the purpose of this part, income contin-
gent repayment schedules established pursuant to sub-
section (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 pursu-
ant 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 contin-
gent repayment under part D.’’.
(e) PLUS PROGRAM REDUCTIONS.—Section 428B(b)
(20 U.S.C. 1078–2(b)) is amended—
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(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 following:
‘‘(3) LIMITATION COMPUTED ON BASIS OF AC-
TUAL PAYMENTS.—’’; and
(3) by inserting before paragraph (3) (as des-
ignated by the amendment made by paragraph (2) of
this section) the following new paragraph:
‘‘(2) DOLLAR
LIMITATION.—Subject to para-
graph (1), the maximum amount parents may borrow
for one student in any academic year or its equiva-
lent (as defined by regulations of the Secretary) is
$15,000.’’.
SEC. 4004. AMENDMENTS AFFECTING GUARANTY AGENCIES.
(a) USE OF RESERVE FUNDS TO PURCHASE DE-
FAULTED LOANS.—Section 422 (20 U.S.C. 1072) is amend-
ed by adding at the end the following new subsection:
‘‘(h) USE OF RESERVE FUNDS TO PURCHASE DE-
FAULTED LOANS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a guaranty agency shall use not less than
50 percent of such agency’s reserve funds to purchase
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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 para-
graph (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 guaranty agency to pay program expenses.’’.
(b) EXTENSION
OF PERIOD
A GUARANTY AGENCY
MUST HOLD A DEFAULTED LOAN.—
(1) EXEMPTION
FOR
EXTENDED
HOLDING
PE-
RIOD.—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
PRO-
GRAM.—
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(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 RE-
SERVE FUNDS.
‘‘(a) LOANS SUBJECT TO EXTENDED HOLDING PE-
RIOD.—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 insur-
ance obligation on a loan insured under this part. Such
claim shall include losses on the unpaid principal and ac-
crued 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 reimbursement by the Secretary pursuant to sec-
tion 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—
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‘‘(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 borrower and the guaranty agency certifies to the
Secretary that—
‘‘(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 de-
fault 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 sta-
tus 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 reimbursement by the Sec-
retary is necessary. Upon securing payments satisfactory
to the guaranty agency during such period, such agency
shall, if practicable, sell such loan to an eligible lender.
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Such loan shall not be sold to an eligible lender that the
guaranty agency determines has substantially failed to ex-
ercise the due diligence required of lenders under this part.
‘‘(d) REGULATION PROHIBITED.—The Secretary shall
not promulgate 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 subpara-
graph (A), by striking ‘‘For a fiscal year prior to fis-
cal 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.
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‘‘(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 fis-
cal 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 aggre-
gate amount for such year of not more than
$220,000,000 to all guaranty agencies receiving
administrative cost allowances under this sub-
paragraph; and
‘‘(II) for each of the fiscal years 1999
through 2002, the Secretary shall pay an aggre-
gate amount for such year of not more than
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$180,000,000 to all guaranty agencies receiving
administrative cost allowances under this sub-
paragraph.’’.
(d) SECRETARY’S EQUITABLE SHARE
OF COLLEC-
TIONS
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 discharge 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 consoli-
dated pursuant to this part or part D
on or after January 1, 1996, 18.5 per-
cent of the balance of the principal, ac-
crued interest, and collection costs, out-
standing at the time of such consolida-
tion; or
‘‘(II) for all other loans,’’.
(e) RESERVE FUND REFORMS.—
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(1) STRENGTHENING
AND
STABILIZING
GUAR-
ANTY AGENCIES.—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 guar-
anty agency notice and opportunity for a
hearing on the record, the Secretary may
terminate such’’;
(ii) in clause (iv), by inserting ‘‘or’’
after the semicolon;
(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 ‘‘Ex-
cept as provided in subparagraph (E) or (F) of
section 428(c)(9), such’’; and
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(B) in subsection (g), by amending para-
graph (4) to read as follows:
‘‘(4) DISPOSITION OF FUNDS RETURNED TO OR
RECOVERED
BY
THE
SECRETARY.—Any funds that
are returned to or otherwise recovered by the Sec-
retary pursuant to this subsection shall be returned to
the Treasury of the United States for purposes of re-
ducing 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 AS-
SISTANCE.—
(1) AMENDMENT.—Section 428(l) (20 U.S.C.
1078(l)) is amended—
(A) by striking paragraph (2); and
(B) by striking ‘‘(l) PRECLAIMS’’ and all
that follows through ‘‘Upon receipt’’ and insert-
ing the following:
‘‘(l) PRECLAIMS ASSISTANCE
AND SUPPLEMENTAL
PRECLAIMS ASSISTANCE.—Upon receipt’’.
(2) EFFECTIVE DATE.—The amendment made by
this subsection 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—
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(1) in clause (i), by inserting ‘‘and’’ after the
semicolon;
(2) in clause (ii), by striking ‘‘; and’’ and insert-
ing 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 per-
cent’’ and inserting ‘‘86 percent’’; and
(ii) in clause (ii), by striking ‘‘78 per-
cent’’ and inserting ‘‘76 percent’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply with respect to loans for
which the first disbursement is made on or after Jan-
uary 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’’.
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(2) EFFECTIVE DATE.—The amendment made by
this subsection shall apply with respect to loans for
which the first disbursement is made on or after Jan-
uary 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 rejec-
tions from eligible lenders’’ and inserting ‘‘one rejec-
tion from an eligible lender’’.
(c) EXCEPTIONAL PERFORMANCE INSURANCE REDUC-
TION.—Section 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 subsection shall apply with respect to loans for
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which the first disbursement is made on or after Jan-
uary 1, 1996.
(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 repay-
ment period described in section 428(b)(7), except
that, notwithstanding subparagraphs (A), (B), and
(C) of section 428(b)(7), such holder shall pay a sub-
sidy rebate under this paragraph with respect to such
loan during any period of authorized forbearance.
‘‘(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
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ending June 30 and December 31, as appropriate) 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 subsection shall apply with respect to loans for
which the first disbursement is made on or after Jan-
uary 1, 1996.
(f) SMALL
LENDER
AUDIT
EXEMPTION.—Section
428(b)(1)(U)(iii) (20 U.S.C. 1078(b)(1)(U)(iii)) is amend-
ed—
(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’’ be-
fore ‘‘for (I)’’;
(2) in subclause (I), by inserting ‘‘such’’ before
‘‘lender at least once’’;
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(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 Cor-
poration 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 Corpora-
tion.
(2) 
CORPORATE
POWERS.—The 
Corporation
shall be subject to the provisions of this section, and,
to the extent not inconsistent 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
Corporation Act (or such other applicable State law)
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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 there-
to. 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 manage-
ment 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 Edu-
cation to an agency, instrumentality, or estab-
lishment of the United States Government, or to
a Government corporation or a Government con-
trolled 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 ASSOCIA-
TION.—The Student Loan Marketing Association
shall not increase its share of the ownership of
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subject to terms and conditions that are no more
advantageous to the Corporation than the terms
and conditions the Student Loan Marketing As-
sociation provides to other entities, including,
where applicable, other monoline financial guar-
anty corporations in which the Student Loan
Marketing Association has no ownership interest.
(4) NO FEDERAL GUARANTEE.—
(A) OBLIGATIONS
INSURED
BY
THE
COR-
PORATION.—
(i) FULL FAITH AND CREDIT OF THE
UNITED STATES.—No obligation that is in-
sured, guaranteed, or otherwise backed by
the Corporation shall be deemed to be an ob-
ligation that is guaranteed by the full faith
and credit of the United States.
(ii) STUDENT LOAN MARKETING ASSO-
CIATION.—No obligation that is insured,
guaranteed, or otherwise backed by the Cor-
poration 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
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such obligation is guaranteed for purposes
of Federal income taxes.
(B) SECURITIES
OFFERED
BY
THE
COR-
PORATION.—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 enactment of this Act, and to
any successor corporation.
(b) RELATED PRIVATIZATION REQUIREMENTS.—
(1) NOTICE REQUIREMENTS.—
(A) IN GENERAL.—During the six-year pe-
riod following the date of enactment of this Act,
the Corporation shall include, in each of the Cor-
poration’s contracts for the insurance, guarantee,
or reinsurance of obligations, and in each docu-
ment offering debt or equity securities of the Cor-
poration 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
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guaranteed in any way by the full faith and
credit of the United States; and
(ii) the Corporation is not an instru-
mentality 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 re-
quirements in subparagraph (A), the Corpora-
tion shall include, in each of the contracts and
documents referred to in such subparagraph, a
prominent statement providing notice that the
United States is not an investor in the Corpora-
tion.
(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 Cor-
poration, or of any direct or indirect subsidiary
thereof, may not contain the term ‘‘College Construc-
tion Loan Insurance Association’’, or any substan-
tially similar variation thereof.
(4) ARTICLES
OF
INCORPORATION.—The Cor-
poration shall amend its articles of incorporation
without delay to reflect that one of the purposes of the
Corporation shall be to guarantee, insure, and rein-
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sure bonds, leases, and other evidences of debt of edu-
cational institutions, including Historically Black
Colleges and Universities and other academic institu-
tions which are ranked in the lower investment grade
category using a nationally recognized credit rating
system.
(5) REQUIREMENTS UNTIL STOCK SALE.—Not-
withstanding subsection (d), the requirements of sec-
tions 754 and 760 of the Higher Education Act of
1965 (20 U.S.C. 1132f–3 and 1132f–9), as such sec-
tions were in effect on the day before the date of en-
actment 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 transactions) pursuant to subsection
(c)(1) of this Act.
(c) SALE OF FEDERALLY OWNED STOCK.—
(1) SALE OF STOCK REQUIRED.—The Secretary
of the Treasury shall sell, pursuant to section 324 of
title 31, United States Code, the stock of the Corpora-
tion 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.
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(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 ac-
ceptable to the Secretary of Education and the Sec-
retary of the Treasury, the Corporation shall pur-
chase, within 6 months after the date of enactment of
this Act, such stock at a price determined by the Sec-
retary of the Treasury and acceptable to the Corpora-
tion based on the independent appraisal of one or
more nationally recognized financial firms, except
that such price shall not exceed the value of the Sec-
retary of Education’s stock as determined by the Con-
gressional 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 sub-
section for all reasonable costs related to such sale, in-
cluding 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 Sec-
retary of the Treasury and the Secretary of Edu-
cation may require to facilitate the sale of the stock
under this subsection.
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(d) REPEAL OF STATUTORY RESTRICTIONS AND RE-
LATED PROVISIONS.—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 amend-
ed—
(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.’’.
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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
ANNUTIY STARTING DATE.
(a) GENERAL
RULE.—For purposes of section
205(c)(3)(A) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1055(c)(3)(A)), the minimum period
prescribed by the Secretary of the Treasury between the date
that the explanation referred to in such section is provided
and the annuity starting date shall not apply if waived
by the participant and, if applicable, the participant’s
spouse.
(b) EFFECTIVE DATE.—Subsection (a) shall apply to
plan years beginning after December 31, 1995.
TITLE V—ENERGY AND NATURAL
RESOURCES PROVISIONS
Subtitle A—Nuclear Regulatory
Commission Annual Charges
SEC. 5001. NUCLEAR REGULATORY COMMISSION ANNUAL
CHARGES.
Section 6101(a)(3) of the Omnibus Budget Reconcili-
ation Act of 1990 (42 U.S.C. 2214(a)(3)) is amended by