II
Calendar No. 199
107TH CONGRESS
1ST SESSION
H. R. 2646
IN THE SENATE OF THE UNITED STATES
OCTOBER 9, 2001
Received
OCTOBER 16, 2001
Read the first time
OCTOBER 17, 2001
Read the second time and placed on the calendar
AN ACT
To provide for the continuation of agricultural programs
through fiscal year 2011.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Farm Security Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—COMMODITY PROGRAMS
Sec. 100. Definitions.
Subtitle A—Fixed Decoupled Payments and Counter-Cyclical
Payments
Sec. 101. Payments to eligible producers.
Sec. 102. Establishment of payment yield.
Sec. 103. Establishment of base acres and payment acres for a farm.
Sec. 104. Availability of fixed, decoupled payments.
Sec. 105. Availability of counter-cyclical payments.
Sec. 106. Producer agreement required as condition on provision of fixed, de-
coupled payments and counter-cyclical payments.
Sec. 107. Planting flexibility.
Sec. 108. Relation to remaining payment authority under production flexibility
contracts.
Sec. 109. Payment limitations.
Sec. 110. Period of effectiveness.
Subtitle B—Marketing Assistance Loans and Loan Deficiency
Payments
Sec. 121. Availability of nonrecourse marketing assistance loans for covered
commodities.
Sec. 122. Loan rates for nonrecourse marketing assistance loans.
Sec. 123. Term of loans.
Sec. 124. Repayment of loans.
Sec. 125. Loan deficiency payments.
Sec. 126. Payments in lieu of loan deficiency payments for grazed acreage.
Sec. 127. Special marketing loan provisions for upland cotton.
Sec. 128. Special competitive provisions for extra long staple cotton.
Sec. 129. Availability of recourse loans for high moisture feed grains and seed
cotton and other fibers.
Sec. 130. Availability of nonrecourse marketing assistance loans for wool and
mohair.
Sec. 131. Availability of nonrecourse marketing assistance loans for honey.
Sec. 132. Producer retention of erroneously paid loan deficiency payments and
marketing loan gains.
Subtitle C—Other Commodities
CHAPTER 1—DAIRY
Sec. 141. Milk price support program.
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Sec. 142. Repeal of recourse loan program for processors.
Sec. 143. Extension of dairy export incentive and dairy indemnity programs.
Sec. 144. Fluid milk promotion.
Sec. 145. Dairy product mandatory reporting.
Sec. 146. Funding of dairy promotion and research program.
Sec. 147. Study of national dairy policy.
CHAPTER 2—SUGAR
Sec. 151. Sugar program.
Sec. 152. Reauthorize provisions of Agricultural Adjustment Act of 1938 re-
garding sugar.
Sec. 153. Storage facility loans.
CHAPTER 3—PEANUTS
Sec. 161. Definitions.
Sec. 162. Establishment of payment yield, peanut acres, and payment acres for
a farm.
Sec. 163. Availability of fixed, decoupled payments for peanuts.
Sec. 164. Availability of counter-cyclical payments for peanuts.
Sec. 165. Producer agreement required as condition on provision of fixed, de-
coupled payments and counter-cyclical payments.
Sec. 166. Planting flexibility.
Sec. 167. Marketing assistance loans and loan deficiency payments for peanuts.
Sec. 168. Quality improvement.
Sec. 169. Payment limitations.
Sec. 170. Termination of marketing quota programs for peanuts and compensa-
tion to peanut quota holders for loss of quota asset value.
Subtitle D—Administration
Sec. 181. Administration generally.
Sec. 182. Extension of suspension of permanent price support authority.
Sec. 183. Limitations.
Sec. 184. Adjustments of loans.
Sec. 185. Personal liability of producers for deficiencies.
Sec. 186. Extension of existing administrative authority regarding loans.
Sec. 187. Assignment of payments.
Sec. 188. Report on effect of certain farm program payments on economic via-
bility of producers and farming infrastructure.
TITLE II—CONSERVATION
Subtitle A—Environmental Conservation Acreage Reserve
Program
Sec. 201. General provisions.
Subtitle B—Conservation Reserve Program
Sec. 211. Reauthorization.
Sec. 212. Enrollment.
Sec. 213. Duties of owners and operators.
Sec. 214. Reference to conservation reserve payments.
Sec. 215. Expansion of pilot program to all States.
Subtitle C—Wetlands Reserve Program
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Sec. 221. Enrollment.
Sec. 222. Easements and agreements.
Sec. 223. Duties of the Secretary.
Sec. 224. Changes in ownership; agreement modification; termination.
Subtitle D—Environmental Quality Incentives Program
Sec. 231. Purposes.
Sec. 232. Definitions.
Sec. 233. Establishment and administration.
Sec. 234. Evaluation of offers and payments.
Sec. 235. Environmental Quality Incentives Program plan.
Sec. 236. Duties of the Secretary.
Sec. 237. Limitation on payments.
Sec. 238. Ground and surface water conservation.
Subtitle E—Funding and Administration
Sec. 241. Reauthorization.
Sec. 242. Funding.
Sec. 243. Allocation for livestock production.
Sec. 244. Administration and technical assistance.
Subtitle F—Other Programs
Sec. 251. Private grazing land and conservation assistance.
Sec. 252. Wildlife Habitat Incentives Program.
Sec. 253. Farmland Protection Program.
Sec. 254. Resource Conservation and Development Program.
Sec. 255. Grassland Reserve Program.
Sec. 256. Farmland Stewardship Program.
Sec. 257. Small Watershed Rehabilitation Program.
Sec. 258. Provision of assistance for Repaupo Creek Tide Gate and Dike Res-
toration Project, New Jersey.
Subtitle G—Repeals
Sec. 261. Provisions of the Food Security Act of 1985.
Sec. 262. National Natural Resources Conservation Foundation Act.
TITLE III—TRADE
Sec. 301. Market Access Program.
Sec. 302. Food for Progress.
Sec. 303. Surplus commodities for developing or friendly countries.
Sec. 304. Export Enhancement Program.
Sec. 305. Foreign Market Development Cooperator Program.
Sec. 306. Export Credit Guarantee Program.
Sec. 307. Food for Peace (Public Law 480).
Sec. 308. Emerging markets.
Sec. 309. Bill Emerson Humanitarian Trust.
Sec. 310. Technical assistance for specialty crops.
Sec. 311. Farmers to Africa and the Caribbean Basin.
Sec. 312. George McGovern–Robert Dole International Food for Education and
Child Nutrition Program.
Sec. 313. Study on fee for services.
Sec. 314. National export strategy report.
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TITLE IV—NUTRITION PROGRAMS
Subtitle A—Food Stamp Program
Sec. 401. Simplified definition of income.
Sec. 402. Standard deduction.
Sec. 403. Transitional food stamps for families moving from welfare.
Sec. 404. Quality control systems.
Sec. 405. Simplified application and eligibility determination systems.
Sec. 406. Authorization of appropriations.
Subtitle B—Commodity Distribution
Sec. 441. Distribution of surplus commodities to special nutrition projects.
Sec. 442. Commodity supplemental food program.
Sec. 443. Emergency food assistance.
Subtitle C—Miscellaneous Provisions
Sec. 461. Hunger fellowship program.
Sec. 462. General effective date.
TITLE V—CREDIT
Sec. 501. Eligibility of limited liability companies for farm ownership loans,
farm operating loans, and emergency loans.
Sec. 502. Suspension of limitation on period for which borrowers are eligible for
guaranteed assistance.
Sec. 503. Administration of Certified Lenders and Preferred Certified Lenders
programs.
Sec. 504. Simplified loan guarantee application available for loans of greater
amounts.
Sec. 505. Elimination of requirement that Secretary require county committees
to certify in writing that certain loan reviews have been con-
ducted.
Sec. 506. Authority to reduce percentage of loan guaranteed if borrower income
is insufficient to service debt.
Sec. 507. Timing of loan assessments.
Sec. 508. Making and servicing of loans by personnel of State, county, or area
committees.
Sec. 509. Eligibility of employees of State, county, or area committee for loans
and loan guarantees.
Sec. 510. Emergency loans in response to an economic emergency resulting
from quarantines and sharply increasing energy costs.
Sec. 511. Extension of authority to contract for servicing of farmer program
loans.
Sec. 512. Authorization for loans.
Sec. 513. Reservation of funds for direct operating loans for beginning farmers
and ranchers.
Sec. 514. Extension of interest rate reduction program.
Sec. 515. Increase in duration of loans under down payment loan program.
Sec. 516. Horse breeder loans.
Sec. 517. Evaluations of direct and guaranteed loan programs.
Sec. 518. Definition of debt forgiveness.
Sec. 519. Loan eligibility for borrowers with prior debt forgiveness.
Sec. 520. Allocation of certain funds for socially disadvantaged farmers and
ranchers.
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Sec. 521. Horses considered to be livestock under the Consolidated Farm and
Rural Development Act.
Sec. 522. Temporary suspension of foreclosure on certain real property owned
by, and recovery of certain payments from, borrowers with
shared appreciation arrangements.
Sec. 523. Authority to make business and industry guaranteed loans for farm-
er-owned projects that add value to or process agricultural
products.
TITLE VI—RURAL DEVELOPMENT
Sec. 601. Funding for rural local television broadcast signal loan guarantees.
Sec. 602. Expanded eligibility for value-added agricultural product market de-
velopment grants.
Sec. 603. Agriculture innovation center demonstration program.
Sec. 604. Funding of community water assistance grant program.
Sec. 605. Loan guarantees for the financing of the purchase of renewable en-
ergy systems.
Sec. 606. Loans and loan guarantees for renewable energy systems.
Sec. 607. Rural business opportunity grants.
Sec. 608. Grants for water systems for rural and native villages in Alaska.
Sec. 609. Rural cooperative development grants.
Sec. 610. National reserve account of Rural Development Trust Fund.
Sec. 611. Rural venture capital demonstration program.
Sec. 612. Increase in limit on certain loans for rural development.
Sec. 613. Pilot program for development and implementation of strategic re-
gional development plans.
Sec. 614. Grants to nonprofit organizations to finance the construction, refur-
bishing, and servicing of individually-owned household water
well systems in rural areas for individuals with low or moderate
incomes.
Sec. 615. National Rural Development Partnership.
Sec. 616. Eligibility of rural empowerment zones, rural enterprise communities,
and champion communities for direct and guaranteed loans for
essential community facilities.
Sec. 617. Grants to train farm workers in new technologies and to train farm
workers in specialized skills necessary for higher value crops.
Sec. 618. Loan guarantees for the purchase of stock in a farmer cooperative
seeking to modernize or expand.
Sec. 619. Intangible assets and subordinated unsecured debt required to be
considered in determining eligibility of farmer-owned coopera-
tive for business and industry guaranteed loan.
Sec. 620. Ban on limiting eligibility of farmer cooperative for business and in-
dustry loan guarantee based on population of area in which co-
operative is located.
Sec. 621. Rural water and waste facility grants.
Sec. 622. Rural water circuit rider program.
Sec. 623. Rural water grassroots source water protection program.
TITLE VII—RESEARCH AND RELATED MATTERS
Subtitle A—Extensions
Sec. 700. Market expansion research.
Sec. 701. National Rural Information Center Clearinghouse.
Sec. 702. Grants and fellowships for food and agricultural sciences education.
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Sec. 703. Policy research centers.
Sec. 704. Human nutrition intervention and health promotion research pro-
gram.
Sec. 705. Pilot research program to combine medical and agricultural research.
Sec. 706. Nutrition education program.
Sec. 707. Continuing animal health and disease research programs.
Sec. 708. Appropriations for research on national or regional problems.
Sec. 709. Grants to upgrade agricultural and food sciences facilities at 1890
land-grant colleges, including Tuskegee University.
Sec. 710. National research and training centennial centers at 1890 land-grant
institutions.
Sec. 711. Hispanic-serving institutions.
Sec. 712. Competitive grants for international agricultural science and edu-
cation programs.
Sec. 713. University research.
Sec. 714. Extension service.
Sec. 715. Supplemental and alternative crops.
Sec. 716. Aquaculture research facilities.
Sec. 717. Rangeland research.
Sec. 718. National genetics resources program.
Sec. 719. High-priority research and extension initiatives.
Sec. 720. Nutrient management research and extension initiative.
Sec. 721. Agricultural telecommunications program.
Sec. 722. Alternative agricultural research and commercialization revolving
fund.
Sec. 723. Assistive technology program for farmers with disabilities.
Sec. 724. Partnerships for high-value agricultural product quality research.
Sec. 725. Biobased products.
Sec. 726. Integrated research, education, and extension competitive grants pro-
gram.
Sec. 727. Institutional capacity building grants.
Sec. 728. 1994 Institution research grants.
Sec. 729. Endowment for 1994 Institutions.
Sec. 730. Precision agriculture.
Sec. 731. Thomas Jefferson initiative for crop diversification.
Sec. 732. Support for research regarding diseases of wheat, triticale, and barley
caused by Fusarium Graminearum or by Tilletia Indica.
Sec. 733. Office of Pest Management Policy.
Sec. 734. National Agricultural Research, Extension, Education, and Econom-
ics Advisory Board.
Sec. 735. Grants for research on production and marketing of alcohols and in-
dustrial hydrocarbons from agricultural commodities and forest
products.
Sec. 736. Biomass research and development.
Sec. 737. Agricultural experiment stations research facilities.
Sec. 738. Competitive, special, and facilities research grants national research
initiative.
Sec. 739. Federal agricultural research facilities authorization of appropria-
tions.
Sec. 740. Cotton classification services.
Sec. 740A. Critical agricultural materials research.
Subtitle B—Modifications
Sec. 741. Equity in Educational Land-Grant Status Act of 1994.
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Sec. 742. National Agricultural Research, Extension, and Teaching Policy Act
of 1977.
Sec. 743. Agricultural Research, Extension, and Education Reform Act of
1998.
Sec. 744. Food, Agriculture, Conservation, and Trade Act of 1990.
Sec. 745. National Agricultural Research, Extension, and Teaching Policy Act
of 1977.
Sec. 746. Biomass research and development.
Sec. 747. Biotechnology risk assessment research.
Sec. 748. Competitive, special, and facilities research grants.
Sec. 749. Matching funds requirement for research and extension activities of
1890 institutions.
Sec. 749A. Matching funds requirement for research and extension activities
for the United States territories.
Sec. 750. Initiative for future agriculture and food systems.
Sec. 751. Carbon cycle research.
Sec. 752. Definition of food and agricultural sciences.
Sec. 753. Federal extension service.
Sec. 754. Policy research centers.
Subtitle C—Related Matters
Sec. 761. Resident instruction at land-grant colleges in United States terri-
tories.
Sec. 762. Declaration of extraordinary emergency and resulting authorities.
Sec. 763. Agricultural biotechnology research and development for the devel-
oping world.
Subtitle D—Repeal of Certain Activities and Authorities
Sec. 771. Food Safety Research Information Office and National Conference.
Sec. 772. Reimbursement of expenses under Sheep Promotion, Research, and
Information Act of 1994.
Sec. 773. National genetic resources program.
Sec. 774. National Advisory Board on Agricultural Weather.
Sec. 775. Agricultural information exchange with Ireland.
Sec. 776. Pesticide resistance study.
Sec. 777. Expansion of education study.
Sec. 778. Support for advisory board.
Sec. 779. Task force on 10-year strategic plan for agricultural research facili-
ties.
Subtitle E—Agriculture Facility Protection
Sec. 790. Additional protections for animal or agricultural enterprises, research
facilities, and other entities.
TITLE VIII—FORESTRY INITIATIVES
Sec. 801. Repeal of forestry incentives program and Stewardship Incentive Pro-
gram.
Sec. 802. Establishment of Forest Land Enhancement Program.
Sec. 803. Renewable resources extension activities.
Sec. 804. Enhanced community fire protection.
Sec. 805. International forestry program.
Sec. 806. Long-term forest stewardship contracts for hazardous fuels removal
and implementation of National Fire Plan.
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Sec. 807. McIntire-Stennis cooperative forestry research program.
TITLE IX—MISCELLANEOUS PROVISIONS
Subtitle A—Tree Assistance Program
Sec. 901. Eligibility.
Sec. 902. Assistance.
Sec. 903. Limitation on assistance.
Sec. 904. Definitions.
Subtitle B—Other Matters
Sec. 921. Hazardous fuel reduction grants to prevent wildfire disasters and
transform hazardous fuels to electric energy, useful heat, or
transportation fuels.
Sec. 922. Bioenergy program.
Sec. 923. Availability of section 32 funds.
Sec. 924. Seniors farmers’ market nutrition program.
Sec. 925. Department of Agriculture authorities regarding caneberries.
Sec. 926. National Appeals Division.
Sec. 927. Outreach and assistance for socially disadvantaged farmers and
ranchers.
Sec. 928. Equal treatment of potatoes and sweet potatoes.
Sec. 929. Reference to sea grass and sea oats as crops covered by noninsured
crop disaster assistance program.
Sec. 930. Operation of Graduate School of Department of Agriculture.
Sec. 931. Assistance for livestock producers.
Sec. 932. Compliance with Buy American Act and sense of Congress regarding
purchase of American-made equipment, products, and services
using funds provided under this Act.
Sec. 933. Report regarding genetically engineered foods.
Sec. 934. Market name for pangasius fish species.
Sec. 935. Program of public education regarding use of biotechnology in pro-
ducing food for human consumption.
Sec. 936. GAO study.
Sec. 937. Interagency Task Force on Agricultural Competition.
Sec. 938. Authorization for additional staff and funding for the Grain Inspec-
tion, Packers and Stockyards Administration.
Sec. 939. Enforcement of the humane methods of Slaughter Act of 1958.
Sec. 940. Penalties and foreign commerce provisions of the Animal Welfare
Act.
Sec. 941. Prohibition on interstate movement of animals for animal fighting.
Sec. 942. Renewable energy resources.
Sec. 943. Use of amounts provided for fixed, decoupled payments to provide
necessary funds for rural development programs.
Sec. 944. Country of origin labeling of perishable agricultural commodities.
Sec. 945. Unlawful stockyard practices involving nonambulatory livestock.
Sec. 946. Annual report on imports of beef and pork.
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TITLE I—COMMODITY
PROGRAMS
SEC. 100. DEFINITIONS.
In this title (other than chapter 3 of subtitle C):
(1) AGRICULTURAL
ACT
OF
1949.—The term
‘‘Agricultural Act of 1949’’ means the Agricultural
Act of 1949 (7 U.S.C. 1421 et seq.), as in effect
prior to the suspensions under section 171 of the
Federal Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7301).
(2) BASE ACRES.—The term ‘‘base acres’’, with
respect to a covered commodity on a farm, means
the number of acres established under section 103
with respect to the commodity upon the election
made by the producers on the farm under subsection
(a) of such section.
(3) COUNTER-CYCLICAL PAYMENT.—The term
‘‘counter-cyclical payment’’ means a payment made
to producers under section 105.
(4) COVERED COMMODITY.—The term ‘‘covered
commodity’’ means wheat, corn, grain sorghum, bar-
ley, oats, upland cotton, rice, soybeans, and other
oilseeds.
(5) EFFECTIVE
PRICE.—The term ‘‘effective
price’’, with respect to a covered commodity for a
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and who is entitled to share in the crop available for
marketing from the farm, or would have shared had
the crop been produced. In determining whether a
grower of hybrid seed is a producer, the Secretary
shall not take into consideration the existence of a
hybrid seed contract and shall ensure that program
requirements do not adversely affect the ability of
the grower to receive a payment under this title.
(12) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Agriculture.
(13) STATE.—The term ‘‘State’’ means each of
the several States of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, and
any other territory or possession of the United
States.
(14) TARGET PRICE.—The term ‘‘target price’’
means the price per bushel (or other appropriate
unit in the case of upland cotton, rice, and other oil-
seeds) of a covered commodity used to determine the
payment rate for counter-cyclical payments.
(15) UNITED
STATES.—The term ‘‘United
States’’, when used in a geographical sense, means
all of the States.
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Subtitle A—Fixed Decoupled Pay-
ments 
and 
Counter-Cyclical
Payments
SEC. 101. PAYMENTS TO ELIGIBLE PRODUCERS.
(a) PAYMENTS
REQUIRED.—Beginning with the
2002 crop of covered commodities, the Secretary shall
make fixed decoupled payments and counter-cyclical pay-
ments under this subtitle—
(1) to producers on a farm that were parties to
a production flexibility contract under section 111 of
the Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7211) for fiscal year 2002;
and
(2) to other producers on farms in the United
States as described in section 103(a).
(b) TENANTS
AND SHARECROPPERS.—In carrying
out this title, the Secretary shall provide adequate safe-
guards to protect the interests of tenants and share-
croppers.
(c) SHARING OF PAYMENTS.—The Secretary shall
provide for the sharing of fixed, decoupled payments and
counter-cyclical payments among the eligible producers on
a farm on a fair and equitable basis.
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SEC. 102. ESTABLISHMENT OF PAYMENT YIELD.
(a) ESTABLISHMENT AND PURPOSE.—For the pur-
pose of making fixed decoupled payments and counter-cy-
clical payments under this subtitle, the Secretary shall
provide for the establishment of a payment yield for each
farm for each covered commodity in accordance with this
section.
(b) USE OF FARM PROGRAM PAYMENT YIELD.—Ex-
cept as otherwise provided in this section, the payment
yield for each of the 2002 through 2011 crops of a covered
commodity for a farm shall be the farm program payment
yield in effect for the 2002 crop of the covered commodity
under section 505 of the Agricultural Act of 1949 (7
U.S.C. 1465).
(c) FARMS WITHOUT FARM PROGRAM PAYMENT
YIELD.—In the case of a farm for which a farm program
payment yield is unavailable for a covered commodity
(other than soybeans or other oilseeds), the Secretary shall
establish an appropriate payment yield for the covered
commodity on the farm taking in consideration the farm
program payment yields applicable to the commodity
under subsection (b) for similar farms in the area.
(d) PAYMENT YIELDS FOR OILSEEDS.—
(1) DETERMINATION OF AVERAGE YIELD.—In
the case of soybeans and each other oilseed, the Sec-
retary shall determine the average yield for the oil-
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seed on a farm for the 1998 through 2001 crop
years, excluding any crop year in which the acreage
planted to the oilseed was zero. If, for any of these
four crop years in which the oilseed was planted, the
farm would have satisfied the eligibility criteria es-
tablished to carry out section 1102 of the Agri-
culture, Rural Development, Food and Drug Admin-
istration, and Related Agencies Appropriations Act,
1999 (Public Law 105–277; 7 U.S.C. 1421 note),
the Secretary shall assign a yield for that year equal
to 65 percent of the county yield.
(2) ADJUSTMENT FOR PAYMENT YIELD.—The
payment yield for a farm for an oilseed shall be
equal to the product of the following:
(A) The average yield for the oilseed deter-
mined under paragraph (1).
(B) The ratio resulting from dividing the
national average yield for the oilseed for the
1981 through 1985 crops by the national aver-
age yield for the oilseed for the 1998 through
2001 crops.
SEC. 103. ESTABLISHMENT OF BASE ACRES AND PAYMENT
ACRES FOR A FARM.
(a) ELECTION BY PRODUCERS OF BASE ACRE CAL-
CULATION METHOD.—For the purpose of making fixed
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decoupled payments and counter-cyclical payments with
respect to a farm, the Secretary shall give producers on
the farm an opportunity to elect one of the following as
the method by which the base acres of all covered commod-
ities on the farm are to be determined:
(1) The four-year average of acreage actually
planted on the farm to a covered commodity for har-
vest, grazing, haying, silage, or other similar pur-
poses during crop years 1998, 1999, 2000, and
2001 and any acreage on the farm that the pro-
ducers were prevented from planting during such
crop years to the covered commodity because of
drought, flood, or other natural disaster, or other
condition beyond the control of the producer, as de-
termined by the Secretary.
(2) The contract acreage (as defined in section
102 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7202)) used by the
Secretary to calculate the fiscal year 2002 payment
that, subject to section 109, would be made under
section 114 of such Act (7 U.S.C. 7214) for the cov-
ered commodity on the farm.
(b) SINGLE ELECTION; TIME FOR ELECTION.—The
opportunity to make the election described in subsection
(a) shall be available to producers on a farm only once.
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The producers shall notify the Secretary of the election
made by the producers under such subsection not later
than 180 days after the date of the enactment of this Act.
(c) EFFECT OF FAILURE TO MAKE ELECTION.—If
the producers on a farm fail to make the election under
subsection (a), or fail to timely notify the Secretary of the
selected option as required by subsection (b), the pro-
ducers shall be deemed to have made the election described
in subsection (a)(2) to determine base acres for all covered
commodities on the farm.
(d) APPLICATION OF ELECTION TO ALL COVERED
COMMODITIES.—The election made under subsection (a)
or deemed to be made under subsection (c) with respect
to a farm shall apply to all of the covered commodities
on the farm. Producers may not make the election de-
scribed in subsection (a)(1) for one covered commodity
and the election described in subsection (a)(2) for other
covered commodities on the farm.
(e) TREATMENT OF CONSERVATION RESERVE CON-
TRACT ACREAGE.—
(1) IN GENERAL.—In the case of producers on
a farm that make the election described in sub-
section (a)(2), the Secretary shall provide for an ad-
justment in the base acres for the farm whenever ei-
ther of the following circumstances occur:
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(A) A conservation reserve contract en-
tered into under section 1231 of the Food Secu-
rity Act of 1985 (16 U.S.C. 3831) with respect
to the farm expires or is voluntarily terminated.
(B) Cropland is released from coverage
under a conservation reserve contract by the
Secretary.
(2) SPECIAL PAYMENT RULES.—For the fiscal
year and crop year in which a base acre adjustment
under paragraph (1) is first made, the producers on
the farm shall elect to receive either fixed decoupled
payments and counter-cyclical payments with respect
to the acreage added to the farm under this sub-
section or a prorated payment under the conserva-
tion reserve contract, but not both.
(f) PAYMENT ACRES.—The payment acres for a cov-
ered commodity on a farm shall be equal to 85 percent
of the base acres for the commodity.
(g) PREVENTION OF EXCESS BASE ACRES.—
(1) REQUIRED REDUCTION.—If the sum of the
base acres for a farm, together with the acreage de-
scribed in paragraph (2), exceeds the actual crop-
land acreage of the farm, the Secretary shall reduce
the quantity of base acres for one or more covered
commodities for the farm or peanut acres for the
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farm as necessary so that the sum of the base acres
and acreage described in paragraph (2) does not ex-
ceed the actual cropland acreage of the farm. The
Secretary shall give the producers on the farm the
opportunity to select the base acres or peanut acres
against which the reduction will be made.
(2) OTHER ACREAGE.—For purposes of para-
graph (1), the Secretary shall include the following:
(A) Any peanut acres for the farm under
chapter 3 of subtitle C.
(B) Any acreage on the farm enrolled in
the conservation reserve program or wetlands
reserve program under chapter 1 of subtitle D
of title XII of the Food Security Act of 1985
(16 U.S.C. 3830 et seq.).
(C) Any other acreage on the farm enrolled
in a conservation program for which payments
are made in exchange for not producing an ag-
ricultural commodity on the acreage.
(3) EXCEPTION FOR DOUBLE-CROPPED ACRE-
AGE.—In applying paragraph (1), the Secretary
shall make an exception in the case of double crop-
ping, as determined by the Secretary.
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SEC. 104. AVAILABILITY OF FIXED, DECOUPLED PAYMENTS.
(a) PAYMENT REQUIRED.—For each of the 2002
through 2011 crop years of each covered commodity, the
Secretary shall make fixed, decoupled payments to eligible
producers.
(b) PAYMENT RATE.—The payment rates used to
make fixed, decoupled payments with respect to covered
commodities for a crop year are as follows:
(1) Wheat, $0.53 per bushel.
(2) Corn, $0.30 per bushel.
(3) Grain sorghum, $0.36 per bushel.
(4) Barley, $0.25 per bushel.
(5) Oats, $0.025 per bushel.
(6) Upland cotton, $0.0667 per pound.
(7) Rice, $2.35 per hundredweight.
(8) Soybeans, $0.42 per bushel.
(9) Other oilseeds, $0.0074 per pound.
(c) PAYMENT AMOUNT.—The amount of the fixed,
decoupled payment to be paid to the eligible producers on
a farm for a covered commodity for a crop year shall be
equal to the product of the following:
(1) The payment rate specified in subsection
(b).
(2) The payment acres of the covered com-
modity on the farm.
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(3) The payment yield for the covered com-
modity for the farm.
(d) TIME FOR PAYMENT.—
(1) GENERAL
RULE.—Fixed, decoupled pay-
ments shall be paid not later than September 30 of
each of fiscal years 2002 through 2011. In the case
of the 2002 crop, payments may begin to be made
on or after December 1, 2001.
(2) ADVANCE PAYMENTS.—At the option of an
eligible producer, 50 percent of the fixed, decoupled
payment for a fiscal year shall be paid on a date se-
lected by the producer. The selected date shall be on
or after December 1 of that fiscal year, and the pro-
ducer may change the selected date for a subsequent
fiscal year by providing advance notice to the Sec-
retary.
(3) REPAYMENT OF ADVANCE PAYMENTS.—If a
producer that receives an advance fixed, decoupled
payment for a fiscal year ceases to be an eligible
producer before the date the fixed, decoupled pay-
ment would otherwise have been made by the Sec-
retary under paragraph (1), the producer shall be
responsible for repaying the Secretary the full
amount of the advance payment.
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SEC. 105. AVAILABILITY OF COUNTER-CYCLICAL PAY-
MENTS.
(a) PAYMENT REQUIRED.—The Secretary shall make
counter-cyclical payments with respect to a covered com-
modity whenever the Secretary determines that the effec-
tive price for the commodity is less than the target price
for the commodity.
(b) EFFECTIVE PRICE.—For purposes of subsection
(a), the effective price for a covered commodity is equal
to the sum of the following:
(1) The higher of the following:
(A) The national average market price re-
ceived by producers during the 12-month mar-
keting year for the commodity, as determined
by the Secretary.
(B) The national average loan rate for a
marketing assistance loan for the covered com-
modity in effect for the same period under sub-
title B.
(2) The payment rate in effect for the covered
commodity under section 104 for the purpose of
making fixed, decoupled payments with respect to
the commodity.
(c) TARGET PRICE.—For purposes of subsection (a),
the target prices for covered commodities are as follows:
(1) Wheat, $4.04 per bushel.
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(2) Corn, $2.78 per bushel.
(3) Grain sorghum, $2.64 per bushel.
(4) Barley, $2.39 per bushel.
(5) Oats, $1.47 per bushel.
(6) Upland cotton, $0.736 per pound.
(7) Rice, $10.82 per hundredweight.
(8) Soybeans, $5.86 per bushel.
(9) Other oilseeds, $0.1036 per pound.
(d) PAYMENT RATE.—The payment rate used to
make counter-cyclical payments with respect to a covered
commodity for a crop year shall be equal to the difference
between—
(1) the target price for the commodity; and
(2) the effective price determined under sub-
section (b) for the commodity.
(e) PAYMENT AMOUNT.—The amount of the counter-
cyclical payment to be paid to the eligible producers on
a farm for a covered commodity for a crop year shall be
equal to the product of the following:
(1) The payment rate specified in subsection
(d).
(2) The payment acres of the covered com-
modity on the farm.
(3) The payment yield for the covered com-
modity for the farm.
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(f) TIME FOR PAYMENTS.—
(1) GENERAL RULE.—The Secretary shall make
counter-cyclical payments under this section for a
crop of a covered commodity as soon as possible
after determining under subsection (a) that such
payments are required for that crop year.
(2) PARTIAL
PAYMENT.—The Secretary may
permit, and, if so permitted, an eligible producer
may elect to receive, up to 40 percent of the pro-
jected counter-cyclical payment, as determined by
the Secretary, to be made under this section for a
crop of a covered commodity upon completion of the
first six months of the marketing year for that crop.
The producer shall repay to the Secretary the
amount, if any, by which the partial payment ex-
ceeds the actual counter-cyclical payment to be made
for that marketing year.
(g) SPECIAL RULE FOR CURRENTLY UNDESIGNATED
OILSEED.—If the Secretary uses the authority under sec-
tion 100(8) to designate another oilseed as an oilseed for
which counter-cyclical payments may be made, the Sec-
retary may modify the target price specified in subsection
(c)(9) that would otherwise apply to that oilseed as the
Secretary considers appropriate.
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(h) SPECIAL RULE FOR BARLEY USED ONLY FOR
FEED PURPOSES.—For purposes of calculating the effec-
tive price for barley under subsection (b), the Secretary
shall use the loan rate in effect for barley under section
122(b)(3), except, in the case of producers who received
the higher loan rate provided under such section for barley
used only for feed purposes, the Secretary shall use that
higher loan rate.
SEC. 106. PRODUCER AGREEMENT REQUIRED AS CONDI-
TION ON PROVISION OF FIXED, DECOUPLED
PAYMENTS AND COUNTER-CYCLICAL PAY-
MENTS.
(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.—
(1) REQUIREMENTS.—Before the producers on
a farm may receive fixed, decoupled payments or
counter-cyclical payments with respect to the farm,
the producers shall agree, in exchange for the
payments—
(A) to comply with applicable conservation
requirements under subtitle B of title XII of
the Food Security Act of 1985 (16 U.S.C. 3811
et seq.);
(B) to comply with applicable wetland pro-
tection requirements under subtitle C of title
XII of the Act (16 U.S.C. 3821 et seq.);
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(C) to comply with the planting flexibility
requirements of section 107; and
(D) to use the land on the farm, in an
amount equal to the base acres, for an agricul-
tural or conserving use, and not for a non-
agricultural commercial or industrial use, as de-
termined by the Secretary.
(2) COMPLIANCE.—The Secretary may issue
such rules as the Secretary considers necessary to
ensure producer compliance with the requirements of
paragraph (1).
(b) EFFECT OF FORECLOSURE.—A producer may not
be required to make repayments to the Secretary of fixed,
decoupled payments and counter-cyclical payments if the
farm has been foreclosed on and the Secretary determines
that forgiving the repayments is appropriate to provide
fair and equitable treatment. This subsection shall not
void the responsibilities of the producer under subsection
(a) if the producer continues or resumes operation, or con-
trol, of the farm. On the resumption of operation or con-
trol over the farm by the producer, the requirements of
subsection (a) in effect on the date of the foreclosure shall
apply.
(c) TRANSFER OR CHANGE OF INTEREST IN FARM.—
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(1) TERMINATION.—Except as provided in
paragraph (4), a transfer of (or change in) the inter-
est of a producer in base acres for which fixed, de-
coupled payments or counter-cyclical payments are
made shall result in the termination of the payments
with respect to the base acres, unless the transferee
or owner of the acreage agrees to assume all obliga-
tions under subsection (a). The termination shall be
effective on the date of the transfer or change.
(2) TRANSFER OF PAYMENT BASE.—There is
no restriction on the transfer of a farm’s base acres
or payment yield as part of a change in the pro-
ducers on the farm.
(3) MODIFICATION.—At the request of the
transferee or owner, the Secretary may modify the
requirements of subsection (a) if the modifications
are consistent with the objectives of such subsection,
as determined by the Secretary.
(4) EXCEPTION.—If a producer entitled to a
fixed, decoupled payment or counter-cyclical pay-
ment dies, becomes incompetent, or is otherwise un-
able to receive the payment, the Secretary shall
make the payment, in accordance with regulations
prescribed by the Secretary.
(d) ACREAGE REPORTS.—
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(1) IN GENERAL.—As a condition on the receipt
of any benefits under this subtitle or subtitle B, the
Secretary shall require producers to submit to the
Secretary acreage reports.
(2) CONFORMING AMENDMENT.—Section 15 of
the Agricultural Marketing Act (12 U.S.C. 1141j) is
amended by striking subsection (d).
(e) REVIEW.—A determination of the Secretary
under this section shall be considered to be an adverse
decision for purposes of the availability of administrative
review of the determination.
SEC. 107. PLANTING FLEXIBILITY.
(a) PERMITTED CROPS.—Subject to subsection (b),
any commodity or crop may be planted on base acres on
a farm.
(b) LIMITATIONS
AND
EXCEPTIONS
REGARDING
CERTAIN COMMODITIES.—
(1) LIMITATIONS.—The planting of the fol-
lowing agricultural commodities shall be prohibited
on base acres:
(A) Fruits.
(B) Vegetables (other than lentils, mung
beans, and dry peas).
(C) Wild rice.
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(2) EXCEPTIONS.—Paragraph (1) shall not
limit the planting of an agricultural commodity spec-
ified in such paragraph—
(A) in any region in which there is a his-
tory of double-cropping of covered commodities
with agricultural commodities specified in para-
graph (1), as determined by the Secretary, in
which case the double-cropping shall be per-
mitted;
(B) on a farm that the Secretary deter-
mines has a history of planting agricultural
commodities specified in paragraph (1) on base
acres, except that fixed, decoupled payments
and counter-cyclical payments shall be reduced
by an acre for each acre planted to such an ag-
ricultural commodity; or
(C) by a producer who the Secretary deter-
mines has an established planting history of a
specific agricultural commodity specified in
paragraph (1), except that—
(i) the quantity planted may not ex-
ceed the producer’s average annual plant-
ing history of such agricultural commodity
in the 1991 through 1995 crop years (ex-
cluding any crop year in which no plant-
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ings were made), as determined by the
Secretary; and
(ii) fixed, decoupled payments and
counter-cyclical payments shall be reduced
by an acre for each acre planted to such
agricultural commodity.
SEC. 108. RELATION TO REMAINING PAYMENT AUTHORITY
UNDER 
PRODUCTION 
FLEXIBILITY 
CON-
TRACTS.
(a) TERMINATION OF SUPERSEDED PAYMENT AU-
THORITY.—Notwithstanding section 113(a)(7) of the Fed-
eral Agriculture Improvement and Reform Act of 1996 (7
U.S.C. 7213(a)(7)) or any other provision of law, the Sec-
retary shall not make payments for fiscal year 2002 after
the date of the enactment of this Act under production
flexibility contracts entered into under section 111 of such
Act (7 U.S.C. 7211).
(b) CONTRACT PAYMENTS MADE BEFORE ENACT-
MENT.—If, on or before the date of the enactment of this
Act, a producer receives all or any portion of the payment
authorized for fiscal year 2002 under a production flexi-
bility contract, the Secretary shall reduce the amount of
the fixed, decoupled payment otherwise due the producer
for that same fiscal year by the amount of the fiscal year
2002 payment previously received by the producer.
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SEC. 109. PAYMENT LIMITATIONS.
Sections 1001 through 1001C of the Food Security
Act of 1985 (7 U.S.C. 1308 through 1308–3) shall apply
to fixed, decoupled payments and counter-cyclical pay-
ments.
SEC. 110. PERIOD OF EFFECTIVENESS.
This subtitle shall be effective beginning with the
2002 crop year of each covered commodity through the
2011 crop year.
Subtitle B—Marketing Assistance
Loans and Loan Deficiency Pay-
ments
SEC. 121. AVAILABILITY OF NONRECOURSE MARKETING AS-
SISTANCE LOANS FOR COVERED COMMOD-
ITIES.
(a) NONRECOURSE LOANS AVAILABLE.—
(1) AVAILABILITY.—For each of the 2002
through 2011 crops of each covered commodity, the
Secretary shall make available to producers on a
farm nonrecourse marketing assistance loans for
covered commodities produced on the farm. The
loans shall be made under terms and conditions that
are prescribed by the Secretary and at the loan rate
established under section 122 for the covered com-
modity.
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(2) INCLUSION OF EXTRA LONG STAPLE COT-
TON.—In this subtitle, the term ‘‘covered com-
modity’’ includes extra long staple cotton.
(b) ELIGIBLE PRODUCTION.—Any production of a
covered commodity on a farm shall be eligible for a mar-
keting assistance loan under subsection (a).
(c) TREATMENT OF CERTAIN COMMINGLED COM-
MODITIES.—In carrying out this subtitle, the Secretary
shall make loans to a producer that is otherwise eligible
to obtain a marketing assistance loan, but for the fact the
covered commodity owned by the producer is commingled
with covered commodities of other producers in facilities
unlicensed for the storage of agricultural commodities by
the Secretary or a State licensing authority, if the pro-
ducer obtaining the loan agrees to immediately redeem the
loan collateral in accordance with section 166 of the Fed-
eral Agriculture Improvement and Reform Act of 1996 (7
U.S.C. 7286).
(d) COMPLIANCE WITH CONSERVATION AND WET-
LANDS REQUIREMENTS.—As a condition of the receipt of
a marketing assistance loan under subsection (a), the pro-
ducer shall comply with applicable conservation require-
ments under subtitle B of title XII of the Food Security
Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wet-
land protection requirements under subtitle C of title XII
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of the Act (16 U.S.C. 3821 et seq.) during the term of
the loan.
(e) DEFINITION
OF EXTRA LONG STAPLE COT-
TON.—In this subtitle, the term ‘‘extra long staple cotton’’
means cotton that—
(1) is produced from pure strain varieties of the
Barbadense species or any hybrid thereof, or other
similar types of extra long staple cotton, designated
by the Secretary, having characteristics needed for
various end uses for which United States upland cot-
ton is not suitable and grown in irrigated cotton-
growing regions of the United States designated by
the Secretary or other areas designated by the Sec-
retary as suitable for the production of the varieties
or types; and
(2) is ginned on a roller-type gin or, if author-
ized by the Secretary, ginned on another type gin for
experimental purposes.
(f) TERMINATION OF SUPERSEDED LOAN AUTHOR-
ITY.—Notwithstanding section 131 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7231), nonrecourse marketing assistance loans shall not
be made for the 2002 crop of covered commodities under
subtitle C of title I of such Act.
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SEC. 122. LOAN RATES FOR NONRECOURSE MARKETING AS-
SISTANCE LOANS.
(a) WHEAT.—
(1) LOAN RATE.—Subject to paragraph (2), the
loan rate for a marketing assistance loan under sec-
tion 121 for wheat shall be—
(A) not less than 85 percent of the simple
average price received by producers of wheat, as
determined by the Secretary, during the mar-
keting years for the immediately preceding five
crops of wheat, excluding the year in which the
average price was the highest and the year in
which the average price was the lowest in the
period; but
(B) not more than $2.58 per bushel.
(2) 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—
(A) 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;
(B) less than 30 percent but not less than
15 percent, the Secretary may reduce the loan
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rate for wheat for the corresponding crop by an
amount not to exceed 5 percent in any year; or
(C) less than 15 percent, the Secretary
may not reduce the loan rate for wheat for the
corresponding crop.
(b) FEED GRAINS.—
(1) LOAN RATE FOR CORN AND GRAIN SOR-
GHUM.—Subject to paragraph (2), the loan rate for
a marketing assistance loan under section 121 for
corn and grain sorghum shall be—
(A) not less than 85 percent of the simple
average price received by producers of corn or
grain sorghum, respectively, as determined by
the Secretary, during the marketing years for
the immediately preceding five crops of the cov-
ered commodity, 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 $1.89 per bushel.
(2) STOCKS TO USE RATIO ADJUSTMENT.—If
the Secretary estimates for any marketing year that
the ratio of ending stocks of corn or grain sorghum
to total use for the marketing year will be—
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(A) equal to or greater than 25 percent,
the Secretary may reduce the loan rate for the
covered commodity for the corresponding crop
by an amount not to exceed 10 percent in any
year;
(B) less than 25 percent but not less than
12.5 percent, the Secretary may reduce the loan
rate for the covered commodity for the cor-
responding crop by an amount not to exceed 5
percent in any year; or
(C) less than 12.5 percent, the Secretary
may not reduce the loan rate for the covered
commodity for the corresponding crop.
(3) OTHER FEED GRAINS.—The loan rate for a
marketing assistance loan under section 121 for bar-
ley and oats shall be—
(A) established at such level as the Sec-
retary determines is fair and reasonable in rela-
tion to the rate that loans are made available
for corn, taking into consideration the feeding
value of the commodity in relation to corn; but
(B) not more than—
(i) $1.65 per bushel for barley, except
not more than $1.70 per bushel for barley
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used only for feed purposes, as determined
by the Secretary; and
(ii) $1.21 per bushel for oats.
(c) UPLAND COTTON.—
(1) LOAN RATE.—Subject to paragraph (2), the
loan rate for a marketing assistance loan under sec-
tion 121 for upland cotton shall be established by
the Secretary at such loan rate, per pound, as will
reflect for the base quality of upland cotton, as de-
termined by the Secretary, at average locations in
the United States a rate that is not less than the
smaller of—
(A) 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 of the year
preceding the year in which the crop is planted,
excluding the year in which the average price
was the highest and the year in which the aver-
age price was the lowest in the period; or
(B) 90 percent of the average, for the 15-
week period beginning July 1 of the year pre-
ceding the year in which the crop is planted, of
the five lowest-priced growths of the growths
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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 preceding the
year in which the crop is planted between the
average Northern European price quotation of
such quality of cotton and the market
quotations in the designated United States spot
markets for the base quality of upland cotton),
as determined by the Secretary.
(2) LIMITATIONS.—The loan rate for a mar-
keting assistance loan for upland cotton shall not be
less than $0.50 per pound or more than $0.5192 per
pound.
(d) EXTRA LONG STAPLE COTTON.—The loan rate
for a marketing assistance loan under section 121 for
extra long staple cotton shall be—
(1) not less than 85 percent of the simple aver-
age price received by producers of extra long staple
cotton, as determined by the Secretary, during 3
years of the 5-year period ending July 31 of the year
preceding the year in which the crop is planted, ex-
cluding 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
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(2) not more than $0.7965 per pound.
(e) RICE.—The loan rate for a marketing assistance
loan under section 121 for rice shall be $6.50 per hun-
dredweight.
(f) OILSEEDS.—
(1) SOYBEANS.—The loan rate for a marketing
assistance loan under section 121 for soybeans shall
be—
(A) not less than 85 percent of the simple
average price received by producers of soybeans,
as determined by the Secretary, during the
marketing years for the immediately preceding
five crops of soybeans, 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 $4.92 per bushel.
(2) OTHER
OILSEEDS.—The loan rate for a
marketing assistance loan under section 121 for
other oilseeds shall be—
(A) not less than 85 percent of the simple
average price received by producers of the other
oilseed, as determined by the Secretary, during
the marketing years for the immediately pre-
ceding five crops of the other oilseed, excluding
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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 $0.087 per pound.
SEC. 123. TERM OF LOANS.
(a) TERM OF LOAN.—In the case of each covered
commodity (other than upland cotton or extra long staple
cotton), a marketing assistance loan under section 121
shall have a term of nine months beginning on the first
day of the first month after the month in which the loan
is made.
(b) SPECIAL RULE FOR COTTON.—A marketing as-
sistance loan for upland cotton or extra long staple cotton
shall have a term of 10 months beginning on the first day
of the month in which the loan is made.
(c) EXTENSIONS PROHIBITED.—The Secretary may
not extend the term of a marketing assistance loan for
any covered commodity.
SEC. 124. REPAYMENT OF LOANS.
(a) REPAYMENT RATES FOR WHEAT, FEED GRAINS,
AND OILSEEDS.—The Secretary shall permit a producer
to repay a marketing assistance loan under section 121
for wheat, corn, grain sorghum, barley, oats, and oilseeds
at a rate that is the lesser of—
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(1) the loan rate established for the commodity
under section 122, plus interest (as determined by
the Secretary); or
(2) a rate that the Secretary determines will—
(A) minimize potential loan forfeitures;
(B) minimize the accumulation of stocks of
the commodity by the Federal Government;
(C) minimize the cost incurred by the Fed-
eral Government in storing the commodity; and
(D) allow the commodity produced in the
United States to be marketed freely and com-
petitively, both domestically and internationally.
(b) REPAYMENT RATES FOR UPLAND COTTON AND
RICE.—The Secretary shall permit producers to repay a
marketing assistance loan under section 121 for upland
cotton and rice at a rate that is the lesser of—
(1) the loan rate established for the commodity
under section 122, plus interest (as determined by
the Secretary); or
(2) the prevailing world market price for the
commodity (adjusted to United States quality and
location), as determined by the Secretary.
(c) REPAYMENT RATES FOR EXTRA LONG STAPLE
COTTON.—Repayment of a marketing assistance loan for
extra long staple cotton shall be at the loan rate estab-
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lished for the commodity under section 122, plus interest
(as determined by the Secretary).
(d) PREVAILING WORLD MARKET PRICE.—For pur-
poses of this section and section 127, the Secretary shall
prescribe by regulation—
(1) a formula to determine the prevailing world
market price for each covered commodity, adjusted
to United States quality and location; and
(2) a mechanism by which the Secretary shall
announce periodically the prevailing world market
price for each covered commodity.
(e) ADJUSTMENT OF PREVAILING WORLD MARKET
PRICE FOR UPLAND COTTON.—
(1) IN GENERAL.—During the period beginning
on the date of the enactment of this Act and ending
July 31, 2012, the prevailing world market price for
upland cotton (adjusted to United States quality and
location) established under subsection (d) shall be
further adjusted if—
(A) the adjusted prevailing world market
price is less than 115 percent of the loan rate
for upland cotton established under section 122,
as determined by the Secretary; and
(B) the Friday through Thursday average
price quotation for the lowest-priced United
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States growth as quoted for Middling (M) 13⁄32-
inch cotton delivered C.I.F. Northern Europe is
greater than the Friday through Thursday av-
erage price of the 5 lowest-priced growths of
upland cotton, as quoted for Middling (M)
13⁄32-inch cotton, delivered C.I.F. Northern Eu-
rope (referred to in this section as the ‘‘North-
ern Europe price’’).
(2) FURTHER
ADJUSTMENT.—Except as pro-
vided in paragraph (3), the adjusted prevailing world
market price for upland cotton shall be further ad-
justed on the basis of some or all of the following
data, as available:
(A) The United States share of world ex-
ports.
(B) The current level of cotton export sales
and cotton export shipments.
(C) Other data determined by the Sec-
retary to be relevant in establishing an accurate
prevailing world market price for upland cotton
(adjusted to United States quality and loca-
tion).
(3) LIMITATION ON FURTHER ADJUSTMENT.—
The adjustment under paragraph (2) may not ex-
ceed the difference between—
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(A) the Friday through Thursday average
price for the lowest-priced United States growth
as quoted for Middling 13⁄32-inch cotton deliv-
ered C.I.F. Northern Europe; and
(B) the Northern Europe price.
(f) TIME FOR FIXING REPAYMENT RATE.—In the
case of a producer that marketed or otherwise lost bene-
ficial interest in a covered commodity before repaying the
marketing assistance loan made under section 121 with
respect to the commodity, the Secretary shall permit the
producer to repay the loan at the lowest repayment rate
that was in effect for that covered commodity under this
section as of the date that the producer lost beneficial in-
terest, as determined by the Secretary.
SEC. 125. LOAN DEFICIENCY PAYMENTS.
(a) AVAILABILITY
OF
LOAN
DEFICIENCY
PAY-
MENTS.—Except as provided in subsection (d), the Sec-
retary may make loan deficiency payments available to
producers who, although eligible to obtain a marketing as-
sistance loan under section 121 with respect to a covered
commodity, agree to forgo obtaining the loan for the com-
modity in return for payments under this section.
(b) COMPUTATION.—A loan deficiency payment
under this section shall be computed by multiplying—
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(1) the loan payment rate determined under
subsection (c) for the covered commodity; by
(2) the quantity of the covered commodity pro-
duced by the eligible producers, excluding any quan-
tity for which the producers obtain a loan under sec-
tion 121.
(c) LOAN PAYMENT RATE.—For purposes of this sec-
tion, the loan payment rate shall be the amount by
which—
(1) the loan rate established under section 122
for the covered commodity; exceeds
(2) the rate at which a loan for the commodity
may be repaid under section 124.
(d) EXCEPTION
FOR EXTRA LONG STAPLE COT-
TON.—This section shall not apply with respect to extra
long staple cotton.
(e) TIME FOR PAYMENT.—The Secretary shall make
a payment under this section to a producer with respect
to a quantity of a covered commodity as of the earlier of
the following:
(1) The date on which the producer marketed
or otherwise lost beneficial interest in the com-
modity, as determined by the Secretary.
(2) The date the producer requests the pay-
ment.
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(f) CONTINUATION
OF SPECIAL LDP RULE
FOR
2001CROP YEAR.—Section 135(a)(2) of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7235(a)(2)) is amended by striking ‘‘2000 crop year’’ and
inserting ‘‘2000 and 2001 crop years’’.
SEC. 126. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAY-
MENTS FOR GRAZED ACREAGE.
(a) ELIGIBLE PRODUCERS.—Effective for the 2002
through 2011 crop years, in the case of a producer that
would be eligible for a loan deficiency payment under sec-
tion 125 for wheat, barley, or oats, but that elects to use
acreage planted to the wheat, barley, or oats for the graz-
ing of livestock, the Secretary shall make a payment to
the producer under this section if the producer enters into
an agreement with the Secretary to forgo any other har-
vesting of the wheat, barley, or oats on that acreage.
(b) PAYMENT AMOUNT.—The amount of a payment
made to a producer on a farm under this section shall
be equal to the amount determined by multiplying—
(1) the loan deficiency payment rate determined
under section 125(c) in effect, as of the date of the
agreement, for the county in which the farm is lo-
cated; by
(2) the payment quantity determined by
multiplying—
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(A) the quantity of the grazed acreage on
the farm with respect to which the producer
elects to forgo harvesting of wheat, barley, or
oats; and
(B) the payment yield for that covered
commodity on the farm.
(c) TIME, MANNER, AND AVAILABILITY
OF PAY-
MENT.—
(1) TIME AND MANNER.—A payment under this
section shall be made at the same time and in the
same manner as loan deficiency payments are made
under section 125.
(2) AVAILABILITY.—The Secretary shall estab-
lish an availability period for the payment author-
ized by this section that is consistent with the avail-
ability period for wheat, barley, and oats established
by the Secretary for marketing assistance loans au-
thorized by this subtitle.
(d) PROHIBITION ON CROP INSURANCE OR NON-
INSURED CROP ASSISTANCE.—A 2002 through 2011 crop
of wheat, barley, or oats planted on acreage that a pro-
ducer elects, in the agreement required by subsection (a),
to use for the grazing of livestock in lieu of any other har-
vesting of the crop shall not be eligible for insurance under
the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.)
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or noninsured crop assistance under section 196 of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7333).
SEC. 127. SPECIAL MARKETING LOAN PROVISIONS FOR UP-
LAND COTTON.
(a) COTTON USER MARKETING CERTIFICATES.—
(1) ISSUANCE.—During the period beginning on
the date of the enactment of this Act and ending
July 31, 2012, the Secretary shall issue marketing
certificates or cash payments, at the option of the
recipient, to domestic users and exporters for docu-
mented purchases by domestic users and sales for
export by exporters made in the week following a
consecutive four-week period in which—
(A) the Friday through Thursday average
price quotation for the lowest-priced United
States growth, as quoted for Middling (M)
13⁄32-inch cotton, delivered C.I.F. Northern Eu-
rope exceeds the Northern Europe price by
more than 1.25 cents per pound; and
(B) the prevailing world market price for
upland cotton (adjusted to United States qual-
ity and location) does not exceed 134 percent of
the loan rate for upland cotton established
under section 122.
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(2) VALUE OF CERTIFICATES OR PAYMENTS.—
The value of the marketing certificates or cash pay-
ments shall be based on the amount of the difference
(reduced by 1.25 cents per pound) in the prices dur-
ing the fourth week of the consecutive four-week pe-
riod multiplied by the quantity of upland cotton in-
cluded in the documented sales.
(3) ADMINISTRATION OF MARKETING CERTIFI-
CATES.—
(A) REDEMPTION, MARKETING, OR
EX-
CHANGE.—The Secretary shall establish proce-
dures for redeeming marketing certificates for
cash or marketing or exchange of the certifi-
cates for agricultural commodities owned by the
Commodity Credit Corporation or pledged to
the Commodity Credit Corporation as collateral
for a loan in such manner, and at such price
levels, as the Secretary determines will best ef-
fectuate the purposes of cotton user marketing
certificates, including enhancing the competi-
tiveness and marketability of United States cot-
ton. Any price restrictions that would otherwise
apply to the disposition of agricultural commod-
ities by the Commodity Credit Corporation shall
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not apply to the redemption of certificates
under this subsection.
(B) DESIGNATION OF COMMODITIES AND
PRODUCTS.—To the extent practicable, the Sec-
retary shall permit owners of certificates to des-
ignate the commodities and products, including
storage sites, the owners would prefer to receive
in exchange for certificates
(C) TRANSFERS.—Marketing certificates
issued to domestic users and exporters of up-
land cotton may be transferred to other persons
in accordance with regulations issued by the
Secretary.
(b) SPECIAL IMPORT QUOTA.—
(1) ESTABLISHMENT.—
(A) IN
GENERAL.—The President shall
carry out an import quota program during the
period beginning on the date of the enactment
of this Act and ending July 31, 2012, as pro-
vided in this subsection.
(B) PROGRAM REQUIREMENTS.—Except as
provided in subparagraph (C), whenever the
Secretary determines and announces that for
any consecutive four-week period, the Friday
through Thursday average price quotation for
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the lowest-priced United States growth, as
quoted for Middling (M) 13⁄32-inch cotton, deliv-
ered C.I.F. Northern Europe, adjusted for the
value of any certificate issued under subsection
(a), exceeds the Northern Europe price by more
than 1.25 cents per pound, there shall imme-
diately be in effect a special import quota.
(C) TIGHT
DOMESTIC
SUPPLY.—During
any month for which the Secretary estimates
the season-ending United States upland cotton
stocks-to-use ratio, as determined under sub-
paragraph (D), to be below 16 percent, the Sec-
retary, in making the determination under sub-
paragraph (B), shall not adjust the Friday
through Thursday average price quotation for
the lowest-priced United States growth, as
quoted for Middling (M) 13⁄32-inch cotton, deliv-
ered C.I.F. Northern Europe, for the value of
any certificates issued under subsection (a).
(D) 
SEASON-ENDING
UNITED
STATES
STOCKS-TO-USE
RATIO.—For the purposes of
making estimates under subparagraph (C), the
Secretary shall, on a monthly basis, estimate
and report the season-ending United States up-
land cotton stocks-to-use ratio, excluding pro-
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jected raw cotton imports but including the
quantity of raw cotton that has been imported
into the United States during the marketing
year.
(2) QUANTITY.—The quota shall be equal to
one week’s consumption of upland cotton by domes-
tic mills at the seasonally adjusted average rate of
the most recent three months for which data are
available.
(3) APPLICATION.—The quota shall apply to
upland cotton purchased not later than 90 days
after the date of the Secretary’s announcement
under paragraph (1) and entered into the United
States not later than 180 days after the date.
(4) OVERLAP.—A special quota period may be
established that overlaps any existing quota period if
required by paragraph (1), except that a special
quota period may not be established under this sub-
section if a quota period has been established under
subsection (c).
(5) PREFERENTIAL TARIFF TREATMENT.—The
quantity under a special import quota shall be con-
sidered to be an in-quota quantity for purposes of—
(A) section 213(d) of the Caribbean Basin
Economic Recovery Act (19 U.S.C. 2703(d));
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(B) section 204 of the Andean Trade Pref-
erence Act (19 U.S.C. 3203);
(C) section 503(d) of the Trade Act of
1974 (19 U.S.C. 2463(d)); and
(D) General Note 3(a)(iv) to the Har-
monized Tariff Schedule.
(6) DEFINITION.—In this subsection, the term
‘‘special import quota’’ means a quantity of imports
that is not subject to the over-quota tariff rate of a
tariff-rate quota.
(7) LIMITATION.—The quantity of cotton en-
tered into the United States during any marketing
year under the special import quota established
under this subsection may not exceed the equivalent
of five week’s consumption of upland cotton by do-
mestic mills at the seasonally adjusted average rate
of the three months immediately preceding the first
special import quota established in any marketing
year.
(c) LIMITED GLOBAL IMPORT QUOTA FOR UPLAND
COTTON.—
(1) IN
GENERAL.—The President shall carry
out an import quota program that provides that
whenever the Secretary determines and announces
that the average price of the base quality of upland
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cotton, as determined by the Secretary, in the des-
ignated spot markets for a month exceeded 130 per-
cent of the average price of such quality of cotton
in the markets for the preceding 36 months, not-
withstanding any other provision of law, there shall
immediately be in effect a limited global import
quota subject to the following conditions:
(A) QUANTITY.—The quantity of the quota
shall be equal to 21 days of domestic mill con-
sumption of upland cotton at the seasonally ad-
justed average rate of the most recent three
months for which data are available.
(B) QUANTITY
IF
PRIOR
QUOTA.—If a
quota has been established under this sub-
section during the preceding 12 months, the
quantity of the quota next established under
this subsection shall be the smaller of 21 days
of domestic mill consumption calculated under
subparagraph (A) or the quantity required to
increase the supply to 130 percent of the de-
mand.
(C) 
PREFERENTIAL
TARIFF
TREAT-
MENT.—The quantity under a limited global
import quota shall be considered to be an in-
quota quantity for purposes 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.
(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 cot-
ton 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—
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(I) the average seasonally ad-
justed annual rate of domestic mill
consumption during the most recent
three months for which data are avail-
able; and
(II) the larger of—
(aa) average exports of up-
land cotton during the preceding
six 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.
(E) QUOTA
ENTRY
PERIOD.—When a
quota is established under this subsection, cot-
ton may be entered under the quota during the
90-day period beginning on the date the quota
is established by the Secretary.
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(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 (b).
SEC. 128. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA
LONG STAPLE COTTON.
(a) COMPETITIVENESS PROGRAM.—Notwithstanding
any other provision of law, during the period beginning
on the date of the enactment of this Act and ending on
July 31, 2012, the Secretary shall carry out a program
to maintain and expand the domestic use of extra long
staple cotton produced in the United States, to increase
exports of extra long staple cotton produced in the United
States, and to ensure that extra long staple cotton pro-
duced in the United States remains competitive in world
markets.
(b) PAYMENTS UNDER PROGRAM; TRIGGER.—Under
the program, the Secretary shall make payments available
under this section whenever—
(1) for a consecutive four-week period, the
world market price for the lowest priced competing
growth of extra long staple cotton (adjusted to
United States quality and location and for other fac-
tors affecting the competitiveness of such cotton), as
determined by the Secretary, is below the prevailing
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United States price for a competing growth of extra
long staple cotton; and
(2) the lowest priced competing growth of extra
long staple cotton (adjusted to United States quality
and location and for other factors affecting the com-
petitiveness of such cotton), as determined by the
Secretary, is less than 134 percent of the loan rate
for extra long staple cotton.
(c) ELIGIBLE RECIPIENTS.—The Secretary shall
make payments available under this section to domestic
users of extra long staple cotton produced in the United
States and exporters of extra long staple cotton produced
in the United States who enter into an agreement with
the Commodity Credit Corporation to participate in the
program under this section.
(d) PAYMENT AMOUNT.—Payments under this sec-
tion shall be based on the amount of the difference in the
prices referred to in subsection (b)(1) during the fourth
week of the consecutive four-week period multiplied by the
amount of documented purchases by domestic users and
sales for export by exporters made in the week following
such a consecutive four-week period.
(e) FORM OF PAYMENT.—Payments under this sec-
tion shall be made through the issuance of cash or mar-
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keting certificates, at the option of eligible recipients of
the payments.
SEC. 129. AVAILABILITY OF RECOURSE LOANS FOR HIGH
MOISTURE FEED GRAINS AND SEED COTTON
AND OTHER FIBERS.
(a) HIGH MOISTURE FEED GRAINS.—
(1) RECOURSE LOANS AVAILABLE.—For each of
the 2002 through 2011 crops of corn and grain sor-
ghum, the Secretary shall make available recourse
loans, as determined by the Secretary, to producers
on a farm who—
(A) normally harvest all or a portion of
their crop of corn or grain sorghum in a high
moisture state;
(B) present—
(i) certified scale tickets from an in-
spected, certified commercial scale, includ-
ing a licensed warehouse, feedlot, feed mill,
distillery, or other similar entity approved
by the Secretary, pursuant to regulations
issued by the Secretary; or
(ii) field or other physical measure-
ments of the standing or stored crop in re-
gions of the United States, as determined
by the Secretary, that do not have certified
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commercial scales from which certified
scale tickets may be obtained within rea-
sonable proximity of harvest operation;
(C) certify that they were the owners of
the feed grain at the time of delivery to, and
that the quantity to be placed under loan under
this subsection was in fact harvested on the
farm and delivered to, a feedlot, feed mill, or
commercial or on-farm high-moisture storage
facility, or to a facility maintained by the users
of corn and grain sorghum in a high moisture
state; and
(D) comply with deadlines established by
the Secretary for harvesting the corn or grain
sorghum and submit applications for loans
under this subsection within deadlines estab-
lished by the Secretary.
(2) ELIGIBILITY OF ACQUIRED FEED GRAINS.—
A loan under this subsection shall be made on a
quantity of corn or grain sorghum of the same crop
acquired by the producer equivalent to a quantity
determined by multiplying—
(A) the acreage of the corn or grain sor-
ghum in a high moisture state harvested on the
producer’s farm; by
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(B) the lower of the farm program pay-
ment yield or the actual yield on a field, as de-
termined by the Secretary, that is similar to the
field from which the corn or grain sorghum was
obtained.
(3) HIGH MOISTURE STATE DEFINED.—In this
subsection, the term ‘‘high moisture state’’ means
corn or grain sorghum having a moisture content in
excess of Commodity Credit Corporation standards
for marketing assistance loans made by the Sec-
retary under section 121.
(b) RECOURSE LOANS AVAILABLE FOR SEED COT-
TON.—For each of the 2002 through 2011 crops of upland
cotton and extra long staple cotton, the Secretary shall
make available recourse seed cotton loans, as determined
by the Secretary, on any production.
(c) REPAYMENT RATES.—Repayment of a recourse
loan made under this section shall be at the loan rate es-
tablished for the commodity by the Secretary, plus interest
(as determined by the Secretary).
(d) TERMINATION OF SUPERSEDED LOAN AUTHOR-
ITY.—Notwithstanding section 137 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7 U.S.C.
7237), recourse loans shall not be made for the 2002 crop
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of corn, grain sorghum, and seed cotton under such sec-
tion.
SEC. 130. AVAILABILITY OF NONRECOURSE MARKETING AS-
SISTANCE LOANS FOR WOOL AND MOHAIR.
(a) NONRECOURSE LOANS AVAILABLE.—During the
2002 through 2011 marketing years for wool and mohair,
the Secretary shall make available to producers on a farm
nonrecourse marketing assistance loans for wool and mo-
hair produced on the farm during that marketing year.
(b) LOAN RATE.—The loan rate for a loan under sub-
section (a) shall be not more than—
(1) $1.00 per pound for graded wool;
(2) $0.40 per pound for nongraded wool; and
(3) $4.20 per pound for mohair.
(c) TERM OF LOAN.—A loan under subsection (a)
shall have a term of 1 year beginning on the first day
of the first month after the month in which the loan is
made.
(d) REPAYMENT RATES.—The Secretary shall permit
a producer to repay a marketing assistance loan under
subsection (a) for wool or mohair at a rate that is the
lesser of—
(1) the loan rate established for the commodity
under subsection (b), plus interest (as determined by
the Secretary); or
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(2) a rate that the Secretary determines will—
(A) minimize potential loan forfeitures;
(B) minimize the accumulation of stocks of
the commodity by the Federal Government;
(C) minimize the cost incurred by the Fed-
eral Government in storing the commodity; and
(D) allow the commodity produced in the
United States to be marketed freely and com-
petitively, both domestically and internationally.
(e) LOAN DEFICIENCY PAYMENTS.—
(1) AVAILABILITY.—The Secretary may make
loan deficiency payments available to producers that,
although eligible to obtain a marketing assistance
loan under this section, agree to forgo obtaining the
loan in return for payments under this section.
(2) COMPUTATION.—A loan deficiency payment
under this subsection shall be computed by
multiplying—
(A) the loan payment rate in effect under
paragraph (3) for the commodity; by
(B) the quantity of the commodity pro-
duced by the eligible producers, excluding any
quantity for which the producers obtain a loan
under this subsection.
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(3) LOAN
PAYMENT
RATE.—For purposes of
this subsection, the loan payment rate for wool or
mohair shall be the amount by which—
(A) the loan rate in effect for the com-
modity under subsection (b); exceeds
(B) the rate at which a loan for the com-
modity may be repaid under subsection (d).
(4) TIME FOR PAYMENT.—The Secretary shall
make a payment under this subsection to a producer
with respect to a quantity of a wool or mohair as of
the earlier of the following:
(A) The date on which the producer mar-
keted or otherwise lost beneficial interest in the
wool or mohair, as determined by the Secretary.
(B) The date the producer requests the
payment.
(f) LIMITATIONS.—The marketing assistance loan
gains and loan deficiency payments that a person may re-
ceive for wool and mohair under this section shall be sub-
ject to a separate payment limitation, but in the same dol-
lar amount, as the payment limitation that applies to mar-
keting assistance loans and loan deficiency payments re-
ceived by producers of other agricultural commodities in
the same marketing year.
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SEC. 131. AVAILABILITY OF NONRECOURSE MARKETING AS-
SISTANCE LOANS FOR HONEY.
(a) NONRECOURSE LOANS AVAILABLE.—During the
2002 through 2011 crop years for honey, the Secretary
shall make available to producers on a farm nonrecourse
marketing assistance loans for honey produced on the
farm during that crop year.
(b) LOAN RATE.—The loan rate for a marketing as-
sistance loan for honey under subsection (a) shall be equal
to $0.60 cents per pound.
(c) TERM OF LOAN.—A marketing assistance loan
under subsection (a) shall have a term of 1 year beginning
on the first day of the first month after the month in
which the loan is made.
(d) REPAYMENT RATES.—The Secretary shall permit
a producer to repay a marketing assistance loan for honey
under subsection (a) at a rate that is the lesser of—
(1) the loan rate for honey, plus interest (as de-
termined by the Secretary); or
(2) the prevailing domestic market price for
honey, as determined by the Secretary.
(e) LOAN DEFICIENCY PAYMENTS.—
(1) AVAILABILITY.—The Secretary may make
loan deficiency payments available to any producer
of honey that, although eligible to obtain a mar-
keting assistance loan under subsection (a), agrees
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to forgo obtaining the loan in return for a payment
under this subsection.
(2) COMPUTATION.—A loan deficiency payment
under this subsection shall be determined by
multiplying—
(A) the loan payment rate determined
under paragraph (3); by
(B) the quantity of honey that the pro-
ducer is eligible to place under loan, but for
which the producer forgoes obtaining the loan
in return for a payment under this subsection.
(3) LOAN PAYMENT RATE.—For the purposes
of this subsection, the loan payment rate shall be the
amount by which—
(A) the loan rate established under sub-
section (b); exceeds
(B) the rate at which a loan may be repaid
under subsection (d).
(4) TIME FOR PAYMENT.—The Secretary shall
make a payment under this subsection to a producer
with respect to a quantity of a honey as of the ear-
lier of the following:
(A) The date on which the producer mar-
keted or otherwise lost beneficial interest in the
honey, as determined by the Secretary.
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(B) The date the producer requests the
payment.
(f) LIMITATIONS.—The marketing assistance loan
gains and loan deficiency payments that a person may re-
ceive for a crop of honey under this section shall be subject
to a separate payment limitation, but in the same dollar
amount, as the payment limitation that applies to mar-
keting assistance loans and loan deficiency payments re-
ceived by producers of other agricultural commodities in
the same crop year.
(g) PREVENTION OF FORFEITURES.—The Secretary
shall carry out this section in such a manner as to mini-
mize forfeitures of honey marketing assistance loans.
SEC. 132. PRODUCER RETENTION OF ERRONEOUSLY PAID
LOAN DEFICIENCY PAYMENTS AND MAR-
KETING LOAN GAINS.
Notwithstanding any other provision of law, the Sec-
retary of Agriculture and the Commodity Credit Corpora-
tion shall not require producers in Erie County, Pennsyl-
vania, to repay loan deficiency payments and marketing
loan gains erroneously paid or determined to have been
earned by the Commodity Credit Corporation for certain
1998 and 1999 crops under subtitle C of title I of the
Federal Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7231 et seq.). In the case of a producer who
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has already made the repayment on or before the date of
the enactment of this Act, the Commodity Credit Corpora-
tion shall reimburse the producer for the full amount of
the repayment.
Subtitle C—Other Commodities
CHAPTER 1—DAIRY
SEC. 141. MILK PRICE SUPPORT PROGRAM.
(a) SUPPORT ACTIVITIES.—During the period begin-
ning on January 1, 2002, and ending on December 31,
2011, the Secretary of Agriculture shall support the price
of milk produced in the 48 contiguous States through the
purchase of cheese, butter, and nonfat dry milk produced
from the milk.
(b) RATE.—During the period specified in subsection
(a), the price of milk shall be supported at a rate equal
to $9.90 per hundredweight for milk containing 3.67 per-
cent butterfat.
(c) PURCHASE
PRICES.—The support purchase
prices under this section for each of the products of milk
(butter, cheese, and nonfat dry milk) announced by the
Secretary shall be the same for all of that product sold
by persons offering to sell the product to the Secretary.
The purchase prices shall be sufficient to enable plants
of average efficiency to pay producers, on average, a price
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that is not less than the rate of price support for milk
in effect under subsection (b).
(d) SPECIAL RULE FOR BUTTER AND NONFAT DRY
MILK PURCHASE PRICES.—
(1) ALLOCATION OF PURCHASE PRICES.—The
Secretary may allocate the rate of price support be-
tween the purchase prices for nonfat dry milk and
butter in a manner that will result in the lowest level
of expenditures by the Commodity Credit Corpora-
tion or achieve such other objectives as the Secretary
considers appropriate. Not later than 10 days after
making or changing an allocation, the Secretary
shall notify the Committee on Agriculture of the
House of Representatives and the Committee on Ag-
riculture, Nutrition, and Forestry of the Senate of
the allocation. Section 553 of title 5, United States
Code, shall not apply with respect to the implemen-
tation of this section.
(2) TIMING
OF
PURCHASE
PRICE
ADJUST-
MENTS.—The Secretary may make any such adjust-
ments in the purchase prices for nonfat dry milk
and butter the Secretary considers to be necessary
not more than twice in each calendar year.
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(e) COMMODITY CREDIT CORPORATION.—The Sec-
retary shall carry out the program authorized by this sec-
tion through the Commodity Credit Corporation.
SEC. 142. REPEAL OF RECOURSE LOAN PROGRAM FOR
PROCESSORS.
Section 142 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7252) is repealed.
SEC. 143. EXTENSION OF DAIRY EXPORT INCENTIVE AND
DAIRY INDEMNITY PROGRAMS.
(a) DAIRY EXPORT INCENTIVE PROGRAM.—Section
153(a) of the Food Security Act of 1985 (15 U.S.C. 713a–
14(a)) is amended by striking ‘‘2002’’ and inserting
‘‘2011’’.
(b) DAIRY INDEMNITY PROGRAM.—Section 3 of Pub-
lic Law 90–484 (7 U.S.C. 450l) is amended by striking
‘‘1995’’ and inserting ‘‘2011’’.
SEC. 144. FLUID MILK PROMOTION.
(a) DEFINITION OF FLUID MILK PRODUCT.—Section
1999C of the Fluid Milk Promotion Act of 1990 (7 U.S.C.
6402) is amended by striking paragraph (3) and inserting
the following new paragraph:
‘‘(3) FLUID MILK PRODUCT.—The term ‘fluid
milk product’ has the meaning given such term—
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‘‘(A) in section 1000.15 of title 7, Code of
Federal Regulations, subject to such amend-
ments as may be made from time to time; or
‘‘(B) in any successor regulation providing
a definition of such term that is promulgated
pursuant to the Agricultural Adjustment Act (7
U.S.C. 601 et seq.), reenacted with amend-
ments by the Agricultural Marketing Agreement
Act of 1937.’’.
(b) DEFINITION OF FLUID MILK PROCESSOR.—Sec-
tion 1999C(4) of the Fluid Milk Promotion Act of 1990
(7 U.S.C. 6402(4)) is amended by striking ‘‘500,000’’ and
inserting ‘‘3,000,000’’.
(c) ELIMINATION OF ORDER TERMINATION DATE.—
Section 1999O of the Fluid Milk Promotion Act of 1990
(7 U.S.C. 6414) is amended—
(1) by striking subsection (a); and
(2) by redesignating subsections (b) and (c) as
subsections (a) and (b), respectively.
SEC. 145. DAIRY PRODUCT MANDATORY REPORTING.
Section 273(b)(1)(B) of the Agricultural Marketing
Act of 1946 (7 U.S.C. 1637b(b)(1)(B)) is amended—
(1) by inserting ‘‘and substantially identical
products designated by the Secretary’’ after ‘‘dairy
products’’ the first place it appears; and
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(2) by inserting ‘‘and such substantially iden-
tical products’’ after ‘‘dairy products’’ the second
place it appears.
SEC. 146. FUNDING OF DAIRY PROMOTION AND RESEARCH
PROGRAM.
(a) DEFINITIONS.—Section 111 of the Dairy Produc-
tion Stabilization Act of 1983 (7 U.S.C. 4502) is
amended—
(1) in subsection (k), by striking ‘‘and’’ at the
end;
(2) in subsection (l), by striking the period at
the end and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(m) the term ‘imported dairy product’ means
any dairy product that is imported into the United
States, including dairy products imported into the
United States in the form of—
‘‘(1) milk, cream, and fresh and dried
dairy products;
‘‘(2) butter and butterfat mixtures;
‘‘(3) cheese; and
‘‘(4) casein and mixtures;
‘‘(n) the term ‘importer’ means a person that
imports an imported dairy product into the United
States; and
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‘‘(o) the term ‘Customs’ means the United
States Customs Service.’’.
(b) REPRESENTATION OF IMPORTERS ON BOARD.—
Section 113(b) of the Dairy Production Stabilization Act
of 1983 (7 U.S.C. 4504(b)) is amended—
(1) by inserting ‘‘NATIONAL DAIRY PROMOTION
AND RESEARCH BOARD.—’’ after ‘‘(b)’’;
(2) by designating the first through ninth sen-
tences as paragraphs (1) through (5) and para-
graphs (7) through (10), respectively, and indenting
the paragraphs appropriately;
(3) in paragraph (2) (as so designated), by
striking ‘‘Members’’ and inserting ‘‘Except as pro-
vided in paragraph (6), the members’’; and
(4) by inserting after paragraph (5) (as so des-
ignated) the following:
‘‘(6) IMPORTERS.—
‘‘(A) REPRESENTATION.—The Secretary
shall appoint not more than 2 members who
represent importers of dairy products and are
subject to assessments under the order, to re-
flect the proportion of domestic production and
imports supplying the United States market,
which shall be based on the Secretary’s deter-
mination of the average volume of domestic pro-
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duction of dairy products proportionate to the
average volume of imports of dairy products in
the United States over the previous three years.
‘‘(B) ADDITIONAL
MEMBERS; 
NOMINA-
TIONS.—The members appointed under this
paragraph—
‘‘(i) shall be in addition to the total
number of members appointed under para-
graph (2); and
‘‘(ii) shall be appointed from nomina-
tions submitted by importers under such
procedures as the Secretary determines to
be appropriate.’’.
(c) IMPORTER ASSESSMENT.—Section 113(g) of the
Dairy Production Stabilization Act of 1983 (7 U.S.C.
4504(g)) is amended—
(1) by inserting ‘‘ASSESSMENTS.—’’ after
‘‘(g)’’;
(2) by designating the first through fifth sen-
tences as paragraphs (1) through (5), respectively,
and indenting appropriately; and
(3) by adding at the end the following:
‘‘(6) IMPORTERS.—
‘‘(A) IN GENERAL.—The order shall pro-
vide that each importer of imported dairy prod-
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ucts shall pay an assessment to the Board in
the manner prescribed by the order.
‘‘(B) TIME
FOR
PAYMENT.—The assess-
ment on imported dairy products shall be paid
by the importer to Customs at the time of the
entry of the products into the United States
and shall be remitted by Customs to the Board.
For purposes of this subparagraph, entry of the
products into the United States shall be deemed
to have occurred when the products are released
from custody of Customs and introduced into
the stream of commerce within the United
States. Importers include persons who hold title
to foreign-produced dairy products immediately
upon release by Customs, as well as persons
who act on behalf of others, as agents, brokers,
or consignees, to secure the release of dairy
products from Customs and the introduction of
the released dairy products into the stream of
commerce.
‘‘(C) RATE.—The rate of assessment on
imported dairy products shall be determined in
the same manner as the rate of assessment per
hundredweight or the equivalent of milk.
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‘‘(D) VALUE OF PRODUCTS.—For the pur-
pose of determining the assessment on imported
dairy products under subparagraph (C), the
value to be placed on imported dairy products
shall be established by the Secretary in a fair
and equitable manner.
‘‘(E) USE OF ASSESSMENTS ON IMPORTED
DAIRY
PRODUCTS.—Assessments collected on
imported dairy products shall not be used for
foreign market promotion.’’.
(d) RECORDS.—Section 113(k) of the Dairy Produc-
tion Stabilization Act of 1983 (7 U.S.C. 4504(k)) is
amended in the first sentence by striking ‘‘person receiv-
ing’’ and inserting ‘‘importer of imported dairy products,
each person receiving’’.
(e) IMPORTER
ELIGIBILITY
TO
VOTE
IN
REF-
ERENDUM.—Section 116(b) of the Dairy Promotion Sta-
bilization Act of 1983 (7 U.S.C. 4507(b)) is amended—
(1) in the first sentence—
(A) by inserting after ‘‘of producers’’ the
following: ‘‘and importers’’; and
(B) by inserting after ‘‘the producers’’ the
following: ‘‘and importers’’; and
(2) in the second sentence, by inserting after
‘‘commercial use’’ the following: ‘‘and importers vot-
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ing in the referendum (who have been engaged in
the importation of dairy products during the same
representative period, as determined by the Sec-
retary)’’.
(f) CONFORMING AMENDMENTS TO REFLECT ADDI-
TION OF IMPORTERS.—Section 110(b) of the Dairy Pro-
duction Stabilization Act of 1983 (7 U.S.C. 4501(b)) is
amended—
(1) in the first sentence—
(A) by inserting after ‘‘commercial use’’
the following: ‘‘and on imported dairy prod-
ucts’’; and
(B) by striking ‘‘products produced in the
United States.’’ and inserting ‘‘products.’’; and
(2) in the second sentence, by inserting after
‘‘produce milk’’ the following: ‘‘or the right of any
person to import dairy products’’.
SEC. 147. STUDY OF NATIONAL DAIRY POLICY.
(a) STUDY REQUIRED.—Not later than April 30,
2002, the Secretary of Agriculture shall submit to Con-
gress a comprehensive economic evaluation of the potential
direct and indirect effects of the various elements of the
national dairy policy, including an examination of the ef-
fect of the national dairy policy on—
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(1) farm price stability, farm profitability and
viability, and local rural economies in the United
States;
(2) child, senior, and low-income nutrition pro-
grams, including impacts on schools and institutions
participating in the programs, on program recipi-
ents, and other factors; and
(3) the wholesale and retail cost of fluid milk,
dairy farms, and milk utilization.
(b) NATIONAL DAIRY POLICY DEFINED.—In this
section, the term ‘‘national dairy policy’’ means the dairy
policy of the United States as evidenced by the following
policies and programs:
(1) Federal Milk Marketing Orders.
(2) Interstate dairy compacts (including pro-
posed compacts described in H.R. 1827 and S.
1157, as introduced in the 107th Congress).
(3) Over-order premiums and State pricing pro-
grams.
(4) Direct payments to milk producers.
(5) Federal milk price support program.
(6) Export programs regarding milk and dairy
products, such as the Dairy Export Incentive Pro-
gram.
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CHAPTER 2—SUGAR
SEC. 151. SUGAR PROGRAM.
(a) CONTINUATION OF PROGRAM.—Subsection (i) of
section 156 of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7251) is amended—
(1) by striking ‘‘(other than subsection (f))’’;
and
(2) by striking ‘‘2002 crops’’ and inserting
‘‘2011 crops’’.
(b) TERMINATION OF MARKETING ASSESSMENT.—
Effective as of October 1, 2001, subsection (f) of such sec-
tion is repealed.
(c) LOAN RATE ADJUSTMENTS.—Subsection (c) of
such section is amended—
(1) by striking ‘‘REDUCTION IN LOAN RATES’’
and inserting ‘‘LOAN RATE ADJUSTMENTS’’; and
(2) in paragraph (1)—
(A) by striking ‘‘REDUCTION REQUIRED’’
and inserting ‘‘POSSIBLE REDUCTION’’; and
(B) by striking ‘‘shall’’ and inserting
‘‘may’’.
(d) NOTIFICATION.—Subsection (e) of such section is
amended by adding at the end the following new para-
graph:
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‘‘(3) PREVENTION OF ONEROUS NOTIFICATION
REQUIREMENTS.—The Secretary may not impose or
enforce any prenotification or similar administrative
requirement that has the effect of preventing a proc-
essor from choosing to forfeit the loan collateral
upon the maturity of the loan.’’.
(e) IN PROCESS SUGAR.—Such section is further
amended by inserting after subsection (e) the following
new subsection (f):
‘‘(f) LOANS FOR IN-PROCESS SUGAR.—
‘‘(1) AVAILABILITY; RATE.—The Secretary shall
make nonrecourse loans available to processors of
domestically grown sugarcane and sugar beets for
in-process sugars and syrups derived from such
crops. The loan rate shall be equal to 80 percent of
the loan rate applicable to raw cane sugar or refined
beet sugar, depending on the source material for the
in-process sugars and syrups.
‘‘(2) 
FURTHER
PROCESSING
UPON
FOR-
FEITURE.—As a condition on the forfeiture of in-
process sugars and syrups serving as collateral for
a loan under paragraph (1), the processor shall,
within such reasonable time period as the Secretary
may prescribe and at no cost to the Commodity
Credit Corporation, convert the in-process sugars
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and syrups into raw cane sugar or refined beet
sugar of acceptable grade and quality for sugars eli-
gible for loans under subsection (a) or (b). Once the
in-process sugars and syrups are fully processed into
raw cane sugar or refined beet sugar, the processor
shall transfer the sugar to the Corporation, which
shall make a payment to the processor in an amount
equal to the difference between the loan rate for raw
cane sugar or refined beet sugar, whichever applies,
and the loan rate the processor received under para-
graph (1).
‘‘(3) LOAN CONVERSION.—If the processor does
not forfeit the collateral as described in paragraph
(2), but instead further processes the in-process sug-
ars and syrups into raw cane sugar or refined beet
sugar and repays the loan on the in-process sugars
and syrups, the processor may then obtain a loan
under subsection (a) or (b) on the raw cane sugar
or refined beet sugar, as appropriate.
‘‘(4) DEFINITION.—In this subsection the term
‘in-process sugars and syrups’ does not include raw
sugar, liquid sugar, invert sugar, invert syrup, or
other finished products that are otherwise eligible
for loans under subsection (a) or (b).’’.
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(f) ADMINISTRATION OF PROGRAM.—Such section is
further amended by adding at the end the following new
subsection:
‘‘(j) AVOIDING FORFEITURES; CORPORATION INVEN-
TORY DISPOSITION.—
‘‘(1) NO COST.—To the maximum extent prac-
ticable, the Secretary shall operate the sugar pro-
gram established under this section at no cost to the
Federal Government by avoiding the forfeiture of
sugar to the Commodity Credit Corporation.
‘‘(2) INVENTORY DISPOSITION.—In support of
the objective specified in paragraph (1), the Com-
modity Credit Corporation may accept bids for com-
modities in the inventory of the Corporation from
(or otherwise make available such commodities, on
appropriate terms and conditions, to) processors of
sugarcane and processors of sugar beets (when the
processors are acting in conjunction with the pro-
ducers of the sugarcane or sugar beets processed by
such processors) in return for the reduction of pro-
duction of raw cane sugar or refined beet sugar, as
appropriate. The authority provided under this para-
graph is in addition to any authority of the Corpora-
tion under any other law.’’.
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(g) INFORMATION REPORTING.—Subsection (h) of
such section is amended—
(1) by redesignating paragraphs (2) and (3) as
paragraphs (4) and (5), respectively;
(2) by inserting after paragraph (1) the fol-
lowing new paragraphs:
‘‘(2) DUTY OF PRODUCERS TO REPORT.—
‘‘(A) PROPORTIONATE
SHARE
STATES.—
The Secretary shall require a producer of sug-
arcane located in a State (other than Puerto
Rico) in which there are in excess of 250 sugar-
cane producers to report, in the manner pre-
scribed by the Secretary, the producer’s sugar-
cane yields and acres planted to sugarcane.
‘‘(B) OTHER STATES.—The Secretary may
require producers of sugarcane or sugar beets
not covered by paragraph (1) to report, in the
manner prescribed by the Secretary, each pro-
ducer’s sugarcane or sugar beet yields and
acres planted to sugarcane or sugar beets, re-
spectively.
‘‘(3) DUTY OF IMPORTERS TO REPORT.—The
Secretary shall require an importer of sugars, syrups
or molasses to be used for human consumption or to
be used for the extraction of sugar for human con-
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sumption, except such sugars, syrups, or molasses
that are within the quantities of tariff-rate quotas
that are at the lower rate of duties, to report, in the
manner prescribed by the Secretary, the quantities
of such products imported and the sugar content or
equivalent of such products.’’; and
(3) in paragraph (5), as so redesignated, by
striking ‘‘paragraph (1)’’ and inserting ‘‘this sub-
section’’.
(h) INTEREST RATE.—Section 163 of the Federal
Agriculture Improvement and Reform Act of 1996 (7
U.S.C. 7283) is amended by adding at the end the fol-
lowing new sentence: ‘‘For purposes of this section, raw
cane sugar, refined beet sugar, and in process sugar eligi-
ble for a loan under section 156 shall not be considered
an agricultural commodity.’’.
SEC. 152. REAUTHORIZE PROVISIONS OF AGRICULTURAL
ADJUSTMENT 
ACT 
OF 
1938 
REGARDING
SUGAR.
(a) INFORMATION REPORTING.—Section 359a of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa)
is repealed.
(b) ESTIMATES.—Section 359b of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1359bb) is amended:
(1) in the section heading—
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(A) by inserting ‘‘FLEXIBLE’’ before
‘‘MARKETING’’; and
(B) by striking ‘‘AND
CRYSTALLINE
FRUCTOSE’’;
(2) in subsection (a)—
(A) in paragraph (1)—
(i) by striking ‘‘Before’’ and inserting
‘‘Not later than August 1 before’’;
(ii) by striking ‘‘1992 through 1998’’
and inserting ‘‘2002 through 2011’’;
(iii) in subparagraph (A), by striking
‘‘(other than sugar’’ and all that follows
through ‘‘stocks’’;
(iv) by redesignating subparagraphs
(B) and (C) as subparagraphs (C) and
(E), respectively;
(v) by inserting after subparagraph
(A) the following:
‘‘(B) the quantity of sugar that would pro-
vide for reasonable carryover stocks;’’;
(vi) in subparagraph (C), as so
redesignated—
(I) by striking ‘‘or’’ and all that
follows through ‘‘beets’’; and
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(II) by striking the ‘‘and’’ fol-
lowing the semicolon;
(vii) by inserting after subparagraph
(C), as so redesignated, the following:
‘‘(D) the quantity of sugar that will be
available from the domestic processing of sugar-
cane and sugar beets; and’’; and
(viii) in subparagraph (E), as so
redesignated—
(I) by striking ‘‘quantity of
sugar’’ and inserting ‘‘quantity of
sugars, syrups, and molasses’’;
(II) by inserting ‘‘human’’ after
‘‘imported for’’ the first place it ap-
pears;
(III) by inserting after ‘‘con-
sumption’’ the first place it appears
the following: ‘‘or to be used for the
extraction of sugar for human con-
sumption’’;
(IV) by striking ‘‘year’’ and in-
serting ‘‘year, whether such articles
are under a tariff-rate quota or are in
excess or outside of a tariff rate
quota’’; and
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(V) by striking ‘‘(other than
sugar’’ and all that follows through
‘‘carry-in stocks’’;
(B) by redesignating paragraph (2) as
paragraph (3);
(C) by inserting after paragraph (1) the
following new paragraph:
‘‘(2) EXCLUSION.—The estimates in this sec-
tion shall not include sugar imported for the produc-
tion of polyhydric alcohol or to be refined and re-ex-
ported in refined form or in sugar containing prod-
ucts.’’;
(D) in paragraph (3), as so redesignated—
(i) by striking ‘‘QUARTERLY REESTI-
MATES’’ and inserting ‘‘REESTIMATES’’;
and
(ii) by inserting ‘‘as necessary, but’’
after ‘‘a fiscal year’’;
(3) in subsection (b)—
(A) by striking paragraph (1) and insert-
ing the following new paragraph:
‘‘(1) IN GENERAL.—By the beginning of each
fiscal year, the Secretary shall establish for that fis-
cal year appropriate allotments under section 359c
for the marketing by processors of sugar processed
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from sugar beets and from domestically-produced
sugarcane at a level that the Secretary estimates will
result in no forfeitures of sugar to the Commodity
Credit Corporation under the loan program for
sugar.’’; and
(B) in paragraph (2), by striking ‘‘or crys-
talline fructose’’;
(4) by striking subsection (c);
(5) by redesignating subsection (d) as sub-
section (c); and
(6) in subsection (c), as so redesignated—
(A) by striking paragraph (2);
(B) by redesignating paragraphs (3) and
(4) as paragraphs (2) and (3), respectively; and
(C) in paragraph (2), as so redesignated—
(i) by striking ‘‘or manufacturer’’ and
all that follows through ‘‘(2)’’; and
(ii) by striking ‘‘or crystalline fruc-
tose’’.
(c) ESTABLISHMENT.—Section 359c of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359cc) is
amended—
(1) in the section heading by inserting ‘‘FLEXI-
BLE’’ after ‘‘OF’’;
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(2) in subsection (a), by inserting ‘‘flexible’’
after ‘‘establish’’;
(3) in subsection (b)—
(A) in paragraph (1)(A), by striking
‘‘1,250,000’’ and inserting ‘‘1,532,000’’; and
(B) in paragraph (2), by striking ‘‘to the
maximum extent practicable’’;
(4) by striking subsection (c) and inserting the
following new subsection:
‘‘(c) MARKETING ALLOTMENT FOR SUGAR DERIVED
FROM SUGAR BEETS AND MARKETING ALLOTMENT FOR
SUGAR DERIVED FROM SUGARCANE.—The overall allot-
ment quantity for the fiscal year shall be allotted among—
‘‘(1) sugar derived from sugar beets by estab-
lishing a marketing allotment for a fiscal year at a
quantity equal to the product of multiplying the
overall allotment quantity for the fiscal year by the
percentage of 54.35; and
‘‘(2) sugar derived from sugarcane by estab-
lishing a marketing allotment for a fiscal year at a
quantity equal to the product of multiplying the
overall allotment quantity for the fiscal year by the
percentage of 45.65.’’;
(5) by amending subsection (d) to read as fol-
lows:
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‘‘(d) FILLING CANE SUGAR AND BEET SUGAR AL-
LOTMENTS.—Each marketing allotment for cane sugar es-
tablished under this section may only be filled with sugar
processed from domestically grown sugarcane, and each
marketing allotment for beet sugar established under this
section may only be filled with sugar domestically proc-
essed from sugar beets.’’;
(6) by striking subsection (e);
(7) by redesignating subsection (f) as sub-
section (e);
(8) in subsection (e), as so redesignated—
(A) by inserting ‘‘(1) IN GENERAL.—’’ be-
fore ‘‘The allotment for sugar’’ and indenting
such paragraph appropriately;
(B) in such paragraph (1)—
(i) by striking ‘‘the 5’’ and inserting
‘‘the’’;
(ii) by inserting after ‘‘sugarcane is
produced,’’ the following: ‘‘after a hearing,
if requested by the affected sugar cane
processors and growers, and on such notice
as the Secretary by regulation may pre-
scribe,’’;
(iii) by striking ‘‘on the basis of past
marketings’’ and all that follows through
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‘‘allotments’’, and inserting ‘‘as provided in
this 
subsection 
and 
section
359d(a)(2)(A)(iv)’’; and
(C) by inserting after paragraph (1) the
following new paragraphs:
‘‘(2) OFFSHORE ALLOTMENT.—
‘‘(A) COLLECTIVELY.—Prior to the allot-
ment of sugar derived from sugarcane to any
other State, 325,000 short tons, raw value shall
be allotted to the offshore States.
‘‘(B) INDIVIDUALLY.—The collective off-
shore State allotment provided for under sub-
paragraph (A) shall be further allotted among
the offshore States in which sugarcane is pro-
duced, after a hearing if requested by the af-
fected sugar cane processors and growers, and
on such notice as the Secretary by regulation
may prescribe, in a fair and equitable manner
on the basis of—
‘‘(i) past marketings of sugar, based
on the average of the 2 highest years of
production of raw cane sugar from the
1996 through 2000 crops;
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‘‘(ii) the ability of processors to mar-
ket the sugar covered under the allotments
for the crop year; and
‘‘(iii) past processings of sugar from
sugarcane based on the 3 year average of
the crop years 1998 through 2000.
‘‘(3) MAINLAND
ALLOTMENT.—The allotment
for sugar derived from sugarcane, less the amount
provided for under paragraph (2), shall be allotted
among the mainland States in the United States in
which sugarcane is produced, after a hearing if re-
quested by the affected sugar cane processors and
growers, and on such notice as the Secretary by reg-
ulation may prescribe, in a fair and equitable man-
ner on the basis of—
‘‘(A) past marketings of sugar, based on
the average of the 2 highest years of production
of raw cane sugar from the 1996 through 2000
crops;
‘‘(B) the ability of processors to market
the sugar covered under the allotments for the
crop year; and
‘‘(C) past processings of sugar from sugar-
cane, based on the 3 crop years with the great-
est processings (in the mainland States collec-
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tively) during the 1991 through 2000 crop
years.’’;
(9) by inserting after subsection (e), as so re-
designated, the following new subsection (f):
‘‘(f) FILLING CANE SUGAR ALLOTMENTS.—Except
as otherwise provided in section 359e, a State cane sugar
allotment established under subsection (e) for a fiscal year
may be filled only with sugar processed from sugarcane
grown in the State covered by the allotment.’’;
(10) in subsection (g)—
(A) 
in 
paragraph 
(1), 
by 
striking
‘‘359b(a)(2)—’’ and all that follows through the
comma at the end of subparagraph (C) and in-
serting ‘‘359b(a)(3), adjust upward or down-
ward marketing allotments in a fair and equi-
table manner’’;
(B) in paragraph (2) by striking ‘‘359f(b)’’
and inserting ‘‘359f(c)’’; and
(C) in paragraph (3)—
(i) by striking ‘‘REDUCTIONS’’ and in-
serting ‘‘CARRY-OVER OF REDUCTIONS’’;
(ii) by inserting after ‘‘this subsection,
if’’ the following: ‘‘at the time of the reduc-
tion’’;
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(iii) by striking ‘‘price support’’ and
inserting ‘‘nonrecourse’’;
(iv) by striking ‘‘206’’ and all that fol-
lows through ‘‘the allotment’’ and inserting
‘‘156 of the Agricultural Market Transi-
tion Act (7 U.S.C. 7272),’’; and
(v) by striking ‘‘, if any,’’; and
(11) by amending subsection (h) to read as fol-
lows:
‘‘(h) SUSPENSION OF ALLOTMENTS.—Whenever the
Secretary estimates, or reestimates, under section
359b(a), or has reason to believe that imports of sugars,
syrups or molasses for human consumption or to be used
for the extraction of sugar for human consumption, wheth-
er under a tariff-rate quota or in excess or outside of a
tariff-rate quota, will exceed 1.532 million short tons, raw
value equivalent, and that such imports would lead to a
reduction of the overall allotment quantity, the Secretary
shall suspend the marketing allotments until such time as
such imports have been restricted, eliminated, or otherwise
reduced to or below the level of 1.532 million tons.’’.
(d) ALLOCATION.—Section 359d of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1359dd) is amended—
(1) in subsection (a)(2)(A)—
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(A) by inserting ‘‘(i) IN GENERAL.—’’ be-
fore ‘‘The Secretary shall’’ and indenting such
clause appropriately;
(B) in clause (i), as so designated—
(i) by striking ‘‘interested parties’’
and inserting ‘‘the affected sugar cane
processors and growers’’;
(ii) by striking ‘‘by taking’’ and all
that follows through ‘‘allotment allocated.’’
and inserting ‘‘with this subparagraph.’’;
and
(iii) by inserting at the end the fol-
lowing new sentence: ‘‘Each such allocation
shall be subject to adjustment under sec-
tion 359c(g).’’;
(C) by inserting after clause (i) the fol-
lowing new clauses:
‘‘(ii) 
MULTIPLE
PROCESSOR
STATES.—Except as provided in clause
(iii), the Secretary shall allocate the allot-
ment for cane sugar among multiple cane
sugar processors in a single State based
upon—
‘‘(I) past marketings of sugar,
based on the average of the 2 highest
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years of production of raw cane sugar
from among the 1996 through 2000
crops;
‘‘(II) the ability of processors to
market sugar covered by that portion
of the allotment allocated for the crop
year;
‘‘(III) past processings of sugar
from sugarcane, based on the average
of the 3 highest years from among
crop years 1996 through 2000; and
‘‘(IV) however, only with respect
to allotments under subclauses (I),
(II), and (III) attributable to the
former operations of the Talisman
processing facility, shall be allocated
among processors in the State coinci-
dent with the provisions of the agree-
ments of March 25 and March 26,
1999, between the affected processors
and the Department of the Interior.
‘‘(iii) 
PROPORTIONATE
SHARE
STATES.—In the case of States subject to
section 359f(c), the Secretary shall allocate
the allotment for cane sugar among mul-
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tiple cane sugar processors in a single
state based upon—
‘‘(I) past marketings of sugar,
based on the average of the two high-
est years of production of raw cane
sugar from among the 1997 through
2001 crop years;
‘‘(II) the ability of processors to
market sugar covered by that portion
of the allotments allocated for the
crop year; and
‘‘(III) past processings of sugar
from sugarcane, based on the average
of the two highest crop years from the
five crop years 1997 through 2001.
‘‘(iv) 
NEW
ENTRANTS.—Notwith-
standing clauses (ii) and (iii), the Sec-
retary, on application of any processor that
begins processing sugarcane on or after the
date of enactment of this clause, and after
a hearing if requested by the affected sug-
arcane processors and growers, and on
such notice as the Secretary by regulation
may prescribe, may provide such processor
with an allocation which provides a fair, ef-
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ficient and equitable distribution of the al-
locations from the allotment for the State
in which the processor is located and, in
the case of proportionate share States,
shall establish proportionate shares in an
amount sufficient to produce the sugarcane
required to satisfy such allocations. How-
ever, the allotment for a new processor
under this clause shall not exceed 50,000
short tons, raw value.
‘‘(v) TRANSFER OF OWNERSHIP.—Ex-
cept as otherwise provided in section
359f(c)(8), in the event that a sugarcane
processor is sold or otherwise transferred
to another owner, or closed as part of an
affiliated corporate group processing con-
solidation, the Secretary shall transfer the
allotment allocation for the processor to
the purchaser, new owner, or successor in
interest, as applicable, of the processor.’’;
and
(2) in subsection (a)(2)(B)—
(A) by striking ‘‘interested parties’’ and in-
serting ‘‘the affected sugar beet processors and
growers’’; and
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(B) by striking ‘‘processing capacity’’ and
all that follows through ‘‘allotment allocated’’
and inserting the following: ‘‘the marketings of
sugar processed from sugar beets of any or all
of the 1996 through 2000 crops, and such other
factors as the Secretary may deem appropriate
after consultation with the affected sugar beet
processors and growers. However, in the case of
any processor which has started processing
sugar beets after January 1, 1996, the Sec-
retary shall provide such processor with an allo-
cation which provides a fair, efficient and equi-
table distribution of the allocations’’.
(e) REASSIGNMENT.—Section 359e(b) of the Agricul-
tural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is
amended—
(1) in paragraph (1)—
(A) in subparagraph (B) by striking the
‘‘and’’ after the semicolon;
(B) by redesignating subparagraph (C) as
subparagraph (D);
(C) by inserting after subparagraph (B)
the following new subparagraph:
‘‘(C) if after the reassignments, the deficit
cannot be completely eliminated, the Secretary
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shall reassign the estimated quantity of the def-
icit to the sale of any inventories of sugar held
by the Commodity Credit Corporation; and’’;
and
(D) in subparagraph (D), as so redesig-
nated, by inserting ‘‘and sales’’ after ‘‘reassign-
ments’’; and
(2) in paragraph (2)—
(A) in subparagraph (A) by striking the
‘‘and’’ after the semicolon;
(B) in subparagraph (B), by striking ‘‘re-
assign the remainder to imports.’’ and inserting
‘‘use the estimated quantity of the deficit for
the sale of any inventories of sugar held by the
Commodity Credit Corporation; and’’; and
(C) by inserting after subparagraph (B)
the following new subparagraph:
‘‘(C) if after such reassignments and sales,
the deficit cannot be completely eliminated, the
Secretary shall reassign the remainder to im-
ports.’’.
(f) PRODUCER PROVISIONS.—Section 359f of the Ag-
ricultural Adjustment Act of 1938 (7 U.S.C. 1359ff) is
amended—
(1) in subsection (a)—
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(A) by striking ‘‘processor’s allocation’’ in
the second sentence and inserting ‘‘allocation to
the processor’’; and
(B) by inserting after ‘‘request of either
party’’ the following: ‘‘, and such arbitration
should be completed within 45 days, but not
more than 60 days, of the request’’;
(2) by redesignating subsection (b) as sub-
section (c);
(3) by inserting after subsection (a) the fol-
lowing new subsection:
‘‘(b) SUGAR BEET PROCESSING FACILITY CLO-
SURES.— In the event that a sugar beet processing facility
is closed and the sugar beet growers who previously deliv-
ered beets to such facility desire to deliver their beets to
another processing company:
‘‘(1) Such growers may petition the Secretary
to modify existing allocations to accommodate such
a transition; and
‘‘(2) The Secretary may increase the allocation
to the processing company to which the growers de-
sire to deliver their sugar beets, and which the proc-
essing company agrees to accept, not to exceed its
processing capacity, to accommodate the change in
deliveries.
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‘‘(3) Such increased allocation shall be deducted
from the allocation to the company that owned the
processing facility that has been closed and the re-
maining allocation will be unaffected.
‘‘(4) The Secretary’s determination on the
issues raised by the petition shall be made within 60
days of the filing of the petition.’’;
(4) in subsection (c), as so redesignated—
(A) in paragraph (3)(A), by striking ‘‘the
preceding five years’’ and inserting ‘‘the two
highest years from among the years 1999,
2000, and 2001’’;
(B) in paragraph (4)(A), by striking
‘‘each’’ and all that follows through ‘‘in effect’’
and inserting ‘‘the two highest of the three (3)
crop years 1999, 2000, and 2001’’; and
(C) by inserting after paragraph (7) the
following new paragraph:
‘‘(8) PROCESSING FACILITY CLOSURES.—In the
event that a sugarcane processing facility subject to
this subsection is closed and the sugarcane growers
who previously delivered sugarcane to such facility
desire to deliver their sugarcane to another proc-
essing company—
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‘‘(A) such growers may petition the Sec-
retary to modify existing allocations to accom-
modate such a transition;
‘‘(B) the Secretary may increase the allo-
cation to the processing company to which the
growers desire to deliver the sugarcane, and
which the processing company agrees to accept,
not to exceed its processing capacity, to accom-
modate the change in deliveries;
‘‘(C) such increased allocation shall be de-
ducted from the allocation to the company that
owned the processing facility that has been
closed and the remaining allocation will be un-
affected; and
‘‘(D) the Secretary’s determination on the
issues raised by the petition shall be made with-
in 60 days of the filing of the petition.’’.
(g) CONFORMING AMENDMENTS.—(1) The heading
of part VII of subtitle B of Title III of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 359aa et seq.) is
amended to read as follows:
‘‘PART VII—FLEXIBLE MARKETING ALLOTMENTS
FOR SUGAR’’.
(2) Section 359g of the Agricultural Adjustment Act
of 1938 (7 U.S.C. 1359gg) is amended—
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(A) by striking ‘‘359f’’ each place it appears
and inserting ‘‘359f(c)’’;
(B) in subsection (b), by striking ‘‘3 consecu-
tive’’ and inserting ‘‘5 consecutive’’; and
(C) in subsection (c), by inserting ‘‘or adjusted’’
after ‘‘share established’’.
(3) Section 359j(c) of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1359jj) is amended—
(A) by amending the subsection heading to read
as follows: ‘‘DEFINITIONS.—’’;
(B) by striking ‘‘Notwithstanding’’ and insert-
ing the following:
‘‘(1) UNITED
STATES
AND
STATE.—Notwith-
standing’’; and
(C) by inserting after such paragraph (1) the
following new paragraph:
‘‘(2) OFFSHORE STATES.—For purposes of this
part, the term ‘offshore States’ means the sugarcane
producing States located outside of the continental
United States.’’.
(h) LIFTING OF SUSPENSION.—Section 171(a)(1)(E)
of the Federal Agriculture Improvement and Reform Act
of 1996 (7 U.S.C. 7301(a)(1)(E)) is amended by inserting
before the period at the end the following: ‘‘, but only with
respect to sugar marketings through fiscal year 2002’’.
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SEC. 153. STORAGE FACILITY LOANS.
(a) STORAGE FACILITY LOAN PROGRAM.—Notwith-
standing any other provision of law and as soon as prac-
ticable after the date of the enactment of this section, the
Commodity Credit Corporation shall amend part 1436 of
title 7, Code of Federal Regulations, to establish a sugar
storage facility loan program to provide financing for proc-
essors of domestically-produced sugarcane and sugar beets
to build or upgrade storage and handling facilities for raw
sugars and refined sugars.
(b) ELIGIBLE PROCESSORS.—Storage facility loans
shall be made available to any processor of domestically
produced sugarcane or sugar beets that has a satisfactory
credit history, determines a need for increased storage ca-
pacity (taking into account the effects of marketing allot-
ments), and demonstrates an ability to repay the loan.
(c) TERM OF LOANS.—Storage facility loans shall be
for a minimum of seven years, and shall be in such
amounts and on such terms and conditions (including
down payment, security requirements, and eligible equip-
ment) as are normal, customary, and appropriate for the
size and commercial nature of the borrower.
(d) ADMINISTRATION.—The sugar storage facility
loan program shall be administered using the services, fa-
cilities, funds, and authorities of the Commodity Credit
Corporation.
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CHAPTER 3—PEANUTS
SEC. 161. DEFINITIONS.
In this chapter:
(1) COUNTER-CYCLICAL PAYMENT.—The term
‘‘counter-cyclical payment’’ means a payment made
to peanut producers under section 164.
(2) EFFECTIVE
PRICE.—The term ‘‘effective
price’’ means the price calculated by the Secretary
under section 164 for peanuts to determine whether
counter-cyclical payments are required to be made
under such section for a crop year.
(3) HISTORIC PEANUT PRODUCER.—The term
‘‘historic peanut producer’’ means a peanut producer
on a farm in the United States that produced or at-
tempted to produce peanuts during any or all of
crop years 1998, 1999, 2000, and 2001.
(4) FIXED, DECOUPLED PAYMENT.—The term
‘‘fixed, decoupled payment’’ means a payment made
to peanut producers under section 163.
(5) PAYMENT
ACRES.—The term ‘‘payment
acres’’ means 85 percent of the peanut acres on a
farm, as established under section 162, upon which
fixed, decoupled payments and counter-cyclical pay-
ments are to be made.
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(6) PEANUT ACRES.—The term ‘‘peanut acres’’
means the number of acres assigned to a particular
farm by historic peanut producers pursuant to sec-
tion 162(b).
(7) PAYMENT
YIELD.—The term ‘‘payment
yield’’ means the yield assigned to a particular farm
by historic peanut producers pursuant to section
162(b).
(8) PEANUT
PRODUCER.—The term ‘‘peanut
producer’’ means an owner, operator, landlord, ten-
ant, or sharecropper who shares in the risk of pro-
ducing a crop of peanuts in the United States and
who is entitled to share in the crop available for
marketing from the farm, or would have shared had
the crop been produced.
(9) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Agriculture.
(10) STATE.—The term ‘‘State’’ means each of
the several States of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, and
any other territory or possession of the United
States.
(11) TARGET PRICE.—The term ‘‘target price’’
means the price per ton of peanuts used to deter-
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mine the payment rate for counter-cyclical pay-
ments.
(12) UNITED
STATES.—The term ‘‘United
States’’, when used in a geographical sense, means
all of the States.
SEC. 162. ESTABLISHMENT OF PAYMENT YIELD, PEANUT
ACRES, AND PAYMENT ACRES FOR A FARM.
(a) ESTABLISHMENT OF PAYMENT YIELD AND PAY-
MENT ACRES.—
(1) DETERMINATION OF AVERAGE YIELD.—The
Secretary shall determine, for each historic peanut
producer, the average yield for peanuts on each farm
on which the historic peanut producer produced pea-
nuts for the 1998 through 2001 crop years, exclud-
ing any crop year in which the producer did not
produce peanuts. If, for any of these four crop years
in which peanuts were planted on a farm by the pro-
ducer, the farm would have satisfied the eligibility
criteria established to carry out section 1102 of the
Agriculture, Rural Development, Food and Drug
Administration, and Related Agencies Appropria-
tions Act, 1999 (7 U.S.C. 1421 note; Public Law
105–277), the Secretary shall assign a yield for the
producer for that year equal to 65 percent of the
county yield, as determined by the Secretary.
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(2) DETERMINATION OF ACREAGE AVERAGE.—
The Secretary shall determine, for each historic pea-
nut producer, the four-year average of acreage actu-
ally planted in peanuts by the historic peanut pro-
ducer for harvest on one or more farms during crop
years 1998, 1999, 2000, and 2001 and any acreage
that the producer was prevented from planting to
peanuts during such crop years because of drought,
flood, or other natural disaster, or other condition
beyond the control of the producer, as determined by
the Secretary. If more than one historic peanut pro-
ducer shared in the risk of producing the crop on
the farm, the historic peanut producers shall receive
their proportional share of the number of acres
planted (or prevented from being planted) to pea-
nuts for harvest on the farm based on the sharing
arrangement that was in effect among the producers
for the crop.
(3) TIME
FOR
DETERMINATIONS; CONSIDER-
ATIONS.—The Secretary shall make the determina-
tions required by this subsection not later than 90
days after the date of the enactment of this Act. In
making such determinations, the Secretary shall
take into account changes in the number and iden-
tity of persons sharing in the risk of producing a
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peanut crop since the 1998 crop year, including pro-
viding a method for the assignment of average acres
and average yield to a farm when the historic peanut
producer is no longer living or an entity composed
of historic peanut producers has been dissolved.
(b) ASSIGNMENT OF PAYMENT YIELD AND PEANUT
ACRES TO FARMS.—
(1) ASSIGNMENT
BY
HISTORIC
PEANUT
PRO-
DUCERS.—The Secretary shall give each historic
peanut producer an opportunity to assign the aver-
age peanut yield and average acreage determined
under subsection (a) for the producer to cropland on
a farm.
(2) PAYMENT YIELD.—The average of all of the
yields assigned by historic peanut producers to a
farm shall be deemed to be the payment yield for
that farm for the purpose of making fixed decoupled
payments and counter-cyclical payments under this
chapter.
(3) PEANUT ACRES.—Subject to subsection (e),
the total number of acres assigned by historic pea-
nut producers to a farm shall be deemed to be the
peanut acres for a farm for the purpose of making
fixed decoupled payments and counter-cyclical pay-
ments under this chapter.
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(c) TIME
FOR ASSIGNMENT.—The opportunity to
make the assignments described in subsection (b) shall be
available to historic peanut producers only once. The his-
toric peanut producers shall notify the Secretary of the
assignments made by such producers under such sub-
sections not later than 180 days after the date of the en-
actment of this Act.
(d) PAYMENT ACRES.—The payment acres for pea-
nuts on a farm shall be equal to 85 percent of the peanut
acres assigned to the farm.
(e) PREVENTION OF EXCESS PEANUT ACRES.—
(1) REQUIRED REDUCTION.—If the sum of the
peanut acres for a farm, together with the acreage
described in paragraph (2), exceeds the actual crop-
land acreage of the farm, the Secretary shall reduce
the quantity of peanut acres for the farm or base
acres for one or more covered commodities for the
farm as necessary so that the sum of the peanut
acres and acreage described in paragraph (2) does
not exceed the actual cropland acreage of the farm.
The Secretary shall give the peanut producers on the
farm the opportunity to select the peanut acres or
base acres against which the reduction will be made.
(2) OTHER ACREAGE.—For purposes of para-
graph (1), the Secretary shall include the following:
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(A) Any base acres for the farm under
subtitle A.
(B) Any acreage on the farm enrolled in
the conservation reserve program or wetlands
reserve program under chapter 1 of subtitle D
of title XII of the Food Security Act of 1985
(16 U.S.C. 3830 et seq.).
(C) Any other acreage on the farm enrolled
in a conservation program for which payments
are made in exchange for not producing an ag-
ricultural commodity on the acreage.
(3) EXCEPTION FOR DOUBLE-CROPPED ACRE-
AGE.—In applying paragraph (1), the Secretary
shall make an exception in the case of double crop-
ping, as determined by the Secretary.
SEC. 163. AVAILABILITY OF FIXED, DECOUPLED PAYMENTS
FOR PEANUTS.
(a) PAYMENT REQUIRED.—For each of the 2002
through 2011 crop years, the Secretary shall make fixed,
decoupled payments to peanut producers on a farm.
(b) PAYMENT RATE.—The payment rate used to
make fixed, decoupled payments with respect to peanuts
for a crop year shall be equal to $36 per ton.
(c) PAYMENT AMOUNT.—The amount of the fixed,
decoupled payment to be paid to the peanut producers on
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a farm for a covered commodity for a crop year shall be
equal to the product of the following:
(1) The payment rate specified in subsection
(b).
(2) The payment acres on the farm.
(3) The payment yield for the farm.
(d) TIME FOR PAYMENT.—
(1) GENERAL
RULE.—Fixed, decoupled pay-
ments shall be paid not later than September 30 of
each of fiscal years 2002 through 2011. In the case
of the 2002 crop, payments may begin to be made
on or after December 1, 2001.
(2) ADVANCE PAYMENTS.—At the option of a
peanut producer, 50 percent of the fixed, decoupled
payment for a fiscal year shall be paid on a date se-
lected by the peanut producer. The selected date
shall be on or after December 1 of that fiscal year,
and the peanut producer may change the selected
date for a subsequent fiscal year by providing ad-
vance notice to the Secretary.
(3) REPAYMENT OF ADVANCE PAYMENTS.—If a
peanut producer that receives an advance fixed, de-
coupled payment for a fiscal year ceases to be a pea-
nut producer before the date the fixed, decoupled
payment would otherwise have been made by the
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Secretary under paragraph (1), the peanut producer
shall be responsible for repaying the Secretary the
full amount of the advance payment.
SEC. 164. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS
FOR PEANUTS.
(a) PAYMENT REQUIRED.—During the 2002 through
2011 crop years for peanuts, the Secretary shall make
counter-cyclical payments with respect to peanuts when-
ever the Secretary determines that the effective price for
peanuts is less than the target price.
(b) EFFECTIVE PRICE.—For purposes of subsection
(a), the effective price for peanuts is equal to the sum
of the following:
(1) The higher of the following:
(A) The national average market price re-
ceived by peanut producers during the 12-
month marketing year for peanuts, as deter-
mined by the Secretary.
(B) The national average loan rate for a
marketing assistance loan for peanuts in effect
for the same period under this chapter.
(2) The payment rate in effect under section
163 for the purpose of making fixed, decoupled pay-
ments.
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(c) TARGET PRICE.—For purposes of subsection (a),
the target price for peanuts shall be equal to $480 per
ton.
(d) PAYMENT RATE.—The payment rate used to
make counter-cyclical payments for a crop year shall be
equal to the difference between—
(1) the target price; and
(2) the effective price determined under sub-
section (b).
(e) PAYMENT AMOUNT.—The amount of the counter-
cyclical payment to be paid to the peanut producers on
a farm for a crop year shall be equal to the product of
the following:
(1) The payment rate specified in subsection
(d).
(2) The payment acres on the farm.
(3) The payment yield for the farm.
(f) TIME FOR PAYMENTS.—
(1) GENERAL RULE.—The Secretary shall make
counter-cyclical payments under this section for a
peanut crop as soon as possible after determining
under subsection (a) that such payments are re-
quired for that crop year.
(2) PARTIAL
PAYMENT.—The Secretary may
permit, and, if so permitted, a peanut producer may
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elect to receive, up to 40 percent of the projected
counter-cyclical payment, as determined by the Sec-
retary, to be made under this section for a peanut
crop upon completion of the first six months of the
marketing year for that crop. The peanut producer
shall repay to the Secretary the amount, if any, by
which the partial payment exceeds the actual
counter-cyclical payment to be made for that crop.
SEC. 165. PRODUCER AGREEMENT REQUIRED AS CONDI-
TION ON PROVISION OF FIXED, DECOUPLED
PAYMENTS AND COUNTER-CYCLICAL PAY-
MENTS.
(a) COMPLIANCE WITH CERTAIN REQUIREMENTS.—
(1) REQUIREMENTS.—Before the peanut pro-
ducers on a farm may receive fixed, decoupled pay-
ments or counter-cyclical payments with respect to
the farm, the peanut producers shall agree, in ex-
change for the payments—
(A) to comply with applicable conservation
requirements under subtitle B of title XII of
the Food Security Act of 1985 (16 U.S.C. 3811
et seq.);
(B) to comply with applicable wetland pro-
tection requirements under subtitle C of title
XII of the Act (16 U.S.C. 3821 et seq.);
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(C) to comply with the planting flexibility
requirements of section 166; and
(D) to use the land on the farm, in an
amount equal to the peanut acres, for an agri-
cultural or conserving use, and not for a non-
agricultural commercial or industrial use, as de-
termined by the Secretary.
(2) COMPLIANCE.—The Secretary may issue
such rules as the Secretary considers necessary to
ensure peanut producer compliance with the require-
ments of paragraph (1).
(b) EFFECT OF FORECLOSURE.—A peanut producer
may not be required to make repayments to the Secretary
of fixed, decoupled payments and counter-cyclical pay-
ments if the farm has been foreclosed on and the Secretary
determines that forgiving the repayments is appropriate
to provide fair and equitable treatment. This subsection
shall not void the responsibilities of the peanut producer
under subsection (a) if the peanut producer continues or
resumes operation, or control, of the farm. On the resump-
tion of operation or control over the farm by the producer,
the requirements of subsection (a) in effect on the date
of the foreclosure shall apply.
(c) TRANSFER OR CHANGE OF INTEREST IN FARM.—
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(1) TERMINATION.—Except as provided in
paragraph (4), a transfer of (or change in) the inter-
est of a peanut producer in peanut acres for which
fixed, decoupled payments or counter-cyclical pay-
ments are made shall result in the termination of
the payments with respect to the peanut acres, un-
less the transferee or owner of the acreage agrees to
assume all obligations under subsection (a). The ter-
mination shall be effective on the date of the trans-
fer or change.
(2) TRANSFER OF PAYMENT BASE.—There is
no restriction on the transfer of a farm’s peanut
acres or payment yield as part of a change in the
peanut producers on the farm.
(3) MODIFICATION.—At the request of the
transferee or owner, the Secretary may modify the
requirements of subsection (a) if the modifications
are consistent with the objectives of such subsection,
as determined by the Secretary.
(4) EXCEPTION.—If a peanut producer entitled
to a fixed, decoupled payment or counter-cyclical
payment dies, becomes incompetent, or is otherwise
unable to receive the payment, the Secretary shall
make the payment, in accordance with regulations
prescribed by the Secretary.
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(d) ACREAGE REPORTS.—As a condition on the re-
ceipt of any benefits under this chapter, the Secretary
shall require peanut producers to submit to the Secretary
acreage reports.
(e) TENANTS
AND SHARECROPPERS.—In carrying
out this chapter, the Secretary shall provide adequate
safeguards to protect the interests of tenants and share-
croppers.
(f) SHARING OF PAYMENTS.—The Secretary shall
provide for the sharing of fixed, decoupled payments and
counter-cyclical payments among the peanut producers on
a farm on a fair and equitable basis.
SEC. 166. PLANTING FLEXIBILITY.
(a) PERMITTED CROPS.—Subject to subsection (b),
any commodity or crop may be planted on peanut acres
on a farm.
(b) LIMITATIONS
AND
EXCEPTIONS
REGARDING
CERTAIN COMMODITIES.—
(1) LIMITATIONS.—The planting of the fol-
lowing agricultural commodities shall be prohibited
on peanut acres:
(A) Fruits.
(B) Vegetables (other than lentils, mung
beans, and dry peas).
(C) Wild rice.
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(2) EXCEPTIONS.—Paragraph (1) shall not
limit the planting of an agricultural commodity spec-
ified in such paragraph—
(A) in any region in which there is a his-
tory of double-cropping of peanuts with agricul-
tural commodities specified in paragraph (1), as
determined by the Secretary, in which case the
double-cropping shall be permitted;
(B) on a farm that the Secretary deter-
mines has a history of planting agricultural
commodities specified in paragraph (1) on pea-
nut acres, except that fixed, decoupled pay-
ments and counter-cyclical payments shall be
reduced by an acre for each acre planted to
such an agricultural commodity; or
(C) by a peanut producer who the Sec-
retary determines has an established planting
history of a specific agricultural commodity
specified in paragraph (1), except that—
(i) the quantity planted may not ex-
ceed the peanut producer’s average annual
planting history of such agricultural com-
modity in the 1991 through 1995 crop
years (excluding any crop year in which no
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plantings were made), as determined by
the Secretary; and
(ii) fixed, decoupled payments and
counter-cyclical payments shall be reduced
by an acre for each acre planted to such
agricultural commodity.
SEC. 167. MARKETING ASSISTANCE LOANS AND LOAN DEFI-
CIENCY PAYMENTS FOR PEANUTS.
(a) NONRECOURSE LOANS AVAILABLE.—
(1) AVAILABILITY.—For each of the 2002
through 2011 crops of peanuts, the Secretary shall
make available to peanut producers on a farm non-
recourse marketing assistance loans for peanuts pro-
duced on the farm. The loans shall be made under
terms and conditions that are prescribed by the Sec-
retary and at the loan rate established under sub-
section (b).
(2) ELIGIBLE PRODUCTION.—Any production of
peanuts on a farm shall be eligible for a marketing
assistance loan under this subsection.
(3) TREATMENT
OF
CERTAIN
COMMINGLED
COMMODITIES.—In carrying out this subsection, the
Secretary shall make loans to a peanut producer
that is otherwise eligible to obtain a marketing as-
sistance loan, but for the fact the peanuts owned by
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the peanut producer are commingled with other pea-
nuts in facilities unlicensed for the storage of agri-
cultural commodities by the Secretary or a State li-
censing authority, if the peanut producer obtaining
the loan agrees to immediately redeem the loan col-
lateral in accordance with section 166 of the Federal
Agriculture Improvement and Reform Act of 1996
(7 U.S.C. 7286).
(4) OPTIONS FOR OBTAINING LOAN.—A mar-
keting assistance loan under this subsection, and
loan deficiency payments under subsection (e), may
be obtained at the option of the peanut producer
through—
(A) a designated marketing association of
peanut producers that is approved by the Sec-
retary; or
(B) the Farm Service Agency.
(b) LOAN RATE.—The loan rate for a marketing as-
sistance loan under for peanuts subsection (a) shall be
equal to $350 per ton.
(c) TERM OF LOAN.—
(1) IN GENERAL.—A marketing assistance loan
for peanuts under subsection (a) shall have a term
of nine months beginning on the first day of the
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first month after the month in which the loan is
made.
(2) EXTENSIONS PROHIBITED.—The Secretary
may not extend the term of a marketing assistance
loan under subsection (a).
(d) REPAYMENT RATE.—The Secretary shall permit
peanut producers to repay a marketing assistance loan for
peanuts under subsection (a) at a rate that is the lesser
of—
(1) the loan rate established for the commodity
under subsection (b), plus interest (as determined by
the Secretary); or
(2) a rate that the Secretary determines will—
(A) minimize potential loan forfeitures;
(B) minimize the accumulation of stocks of
peanuts by the Federal Government;
(C) minimize the cost incurred by the Fed-
eral Government in storing peanuts; and
(D) allow peanuts produced in the United
States to be marketed freely and competitively,
both domestically and internationally.
(e) LOAN DEFICIENCY PAYMENTS.—
(1) AVAILABILITY.—The Secretary may make
loan deficiency payments available to peanut pro-
ducers who, although eligible to obtain a marketing
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assistance loan for peanuts under subsection (a),
agree to forgo obtaining the loan for the peanuts in
return for payments under this subsection.
(2) COMPUTATION.—A loan deficiency payment
under this subsection shall be computed by
multiplying—
(A) the loan payment rate determined
under paragraph (3) for peanuts; by
(B) the quantity of the peanuts produced
by the peanut producers, excluding any quan-
tity for which the producers obtain a loan under
subsection (a).
(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); exceeds
(B) the rate at which a loan may be repaid
under subsection (d).
(4) TIME FOR PAYMENT.—The Secretary shall
make a payment under this subsection to a peanut
producer with respect to a quantity of peanuts as of
the earlier of the following:
(A) The date on which the peanut pro-
ducer marketed or otherwise lost beneficial in-
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terest in the peanuts, as determined by the Sec-
retary.
(B) The date the peanut producer requests
the payment.
(f) COMPLIANCE WITH CONSERVATION AND WET-
LANDS REQUIREMENTS.—As a condition of the receipt of
a marketing assistance loan under subsection (a), the pea-
nut producer shall comply with applicable conservation re-
quirements under subtitle B of title XII of the Food Secu-
rity Act of 1985 (16 U.S.C. 3811 et seq.) and applicable
wetland protection requirements under subtitle C of title
XII of the Act (16 U.S.C. 3821 et seq.) during the term
of the loan.
(g) REIMBURSABLE AGREEMENTS AND PAYMENT OF
EXPENSES.—To the extent practicable, the Secretary
shall implement any reimbursable agreements or provide
for the payment of expenses under this chapter in a man-
ner that is consistent with such activities in regard to
other commodities.
(h) TERMINATION OF SUPERSEDED PRICE SUPPORT
AUTHORITY.—
(1) REPEAL.—Section 155 of the Federal Agri-
culture Improvement and Reform Act of 1996 (7
U.S.C. 7271) is repealed.
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(2) CONFORMING AMENDMENTS.—The Agricul-
tural Act of 1949 (7 U.S.C. 1441 et seq.) is
amended—
(A) in section 101(b) (7 U.S.C. 1441(b)),
by striking ‘‘and peanuts’’; and
(B) in section 408(c) (7 U.S.C. 1428(c)),
by striking ‘‘peanuts,’’.
SEC. 168. QUALITY IMPROVEMENT.
(a) OFFICIAL INSPECTION.—
(1) MANDATORY
INSPECTION.—All peanuts
placed under a marketing assistance loan under sec-
tion 167 shall be officially inspected and graded by
Federal or State inspectors.
(2) 
OPTIONAL
INSPECTION.—Peanuts 
not
placed under a marketing assistance loan may be
graded at the option of the peanut producer.
(b) TERMINATION
OF
PEANUT
ADMINISTRATIVE
COMMITTEE.—The Peanut Administrative Committee es-
tablished under Marketing Agreement No. 1436, which
regulates the quality of domestically produced peanuts
under the Agricultural Adjustment Act (7 U.S.C. 601 et
seq.), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, is terminated.
(c) 
ESTABLISHMENT
OF
PEANUT
STANDARDS
BOARD.—The Secretary shall establish a Peanut Stand-
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ards Board for the purpose of assisting in the establish-
ment of quality standards with respect to peanuts. The
authority of the Board is limited to assisting in the estab-
lishment of quality standards for peanuts. The members
of the Board should fairly reflect all regions and segments
of the peanut industry.
(d) EFFECTIVE DATE.—This section shall take effect
with the 2002 crop of peanuts.
SEC. 169. PAYMENT LIMITATIONS.
For purposes of sections 1001 through 1001C of the
Food Security Act of 1985 (7 U.S.C. 1308 through 1308–
3), separate payment limitations shall apply to peanuts
with respect to—
(1) fixed, decoupled payments;
(2) counter-cyclical payments, and
(3) limitations on marketing loan gains and
loan deficiency payments.
SEC. 170. TERMINATION OF MARKETING QUOTA PROGRAMS
FOR PEANUTS AND COMPENSATION TO PEA-
NUT QUOTA HOLDERS FOR LOSS OF QUOTA
ASSET VALUE.
(a) REPEAL OF MARKETING QUOTA.—
(1) REPEAL.—Part VI of subtitle B of title III
of the Agricultural Adjustment Act of 1938 (7
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U.S.C. 1357–1359a), relating to peanuts, is re-
pealed.
(2) TREATMENT
OF
2001
CROP.—Part VI of
subtitle B of title III of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1357–1359a), as in effect on
the day before the date of the enactment of this Act,
shall continue to apply with respect to the 2001 crop
of peanuts notwithstanding the amendment made by
paragraph (1).
(b) COMPENSATION
CONTRACT
REQUIRED.—The
Secretary shall offer to enter into a contract with eligible
peanut quota holders for the purpose of providing com-
pensation for the lost value of the quota on account of
the repeal of the marketing quota program for peanuts
under subsection (a). Under the contracts, the Secretary
shall make payments to eligible peanut quota holders dur-
ing fiscal years 2002 through 2006.
(c) TIME FOR PAYMENT.—The payments required
under the contracts shall be provided in five equal install-
ments not later than September 30 of each of fiscal years
2002 through 2006.
(d) PAYMENT AMOUNT.—The amount of the pay-
ment for a fiscal year to a peanut quota holder under a
contract shall be equal to the product obtained by
multiplying—
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(1) $0.10 per pound; by
(2) the actual farm poundage quota (excluding
seed and experimental peanuts) established for the
peanut quota holder’s farm under section 358–1(b)
of the Agricultural Adjustment Act of 1938 (7
U.S.C. 1358–1(b)) for the 2001 marketing year.
(e) ASSIGNMENT OF PAYMENTS.—The provisions of
section 8(g) of the Soil Conservation and Domestic Allot-
ment Act (16 U.S.C. 590h(g)), relating to assignment of
payments, shall apply to the payments made to peanut
quota holders under the contracts. The peanut quota hold-
er making the assignment, or the assignee, shall provide
the Secretary with notice, in such manner as the Secretary
may require, of any assignment made under this sub-
section.
(f) PEANUT QUOTA HOLDER DEFINED.—In this sec-
tion, the term ‘‘peanut quota holder’’ means a person or
enterprise that owns a farm that—
(1) was eligible, immediately before the date of
the enactment of this Act, to have a peanut quota
established upon it;
(2) if there are not quotas currently established,
would be eligible to have a quota established upon
it for the succeeding crop year, in the absence of the
amendment made by subsection (a); or
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(3) is otherwise a farm that was eligible for
such a quota at the time the general quota establish-
ment authority was repealed.
The Secretary shall apply this definition without regard
to temporary leases or transfers or quotas for seed or ex-
perimental purposes.
Subtitle D—Administration
SEC. 181. ADMINISTRATION GENERALLY.
(a) USE OF COMMODITY CREDIT CORPORATION.—
The Secretary shall carry out this title through the Com-
modity Credit Corporation.
(b) DETERMINATIONS
BY SECRETARY.—A deter-
mination made by the Secretary under this title shall be
final and conclusive.
(c) REGULATIONS.—Not later than 90 days after the
date of the enactment of this Act, the Secretary and the
Commodity Credit Corporation, as appropriate, shall issue
such regulations as are necessary to implement this title.
The issuance of the regulations shall be made without re-
gard to—
(1) the notice and comment provisions of sec-
tion 553 of title 5, United States Code;
(2) the Statement of Policy of the Secretary of
Agriculture effective July 24, 1971 (36 Fed. Reg.
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13804) relating to notices of proposed rulemaking
and public participation in rulemaking; and
(3) chapter 35 of title 44, United States Code
(commonly know as the ‘‘Paperwork Reduction
Act’’).
(d) PROTECTION OF PRODUCERS.—The protection
afforded producers that elect the option to accelerate the
receipt of any payment under a production flexibility con-
tract payable under the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7212 note) shall also
apply to the advance payment of fixed, decoupled pay-
ments and counter-cyclical payments.
(e) ADJUSTMENT AUTHORITY RELATED TO URU-
GUAY ROUND COMPLIANCE.—If the Secretary determines
that expenditures under subtitles A, B, and C that are
subject to the total allowable domestic support levels under
the Uruguay Round Agreements (as defined in section
2(7) of the Uruguay Round Agreements Act (19 U.S.C.
3501(7))), as in effect on the date of the enactment of
this Act, will exceed such allowable levels for any applica-
ble reporting period, the Secretary may make adjustments
in the amount of such expenditures during that period to
ensure that such expenditures do not exceed, but in no
case are less than, such allowable levels.
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to a person under 1 or more production flexi-
bility contracts’’ and inserting ‘‘fixed, decoupled
payments made to a person’’; and
(C) by striking ‘‘4’’ and inserting ‘‘5’’;
(2) in paragraphs (2) and (3)—
(A) by striking ‘‘payments specified’’ and
all that follows through ‘‘and oilseeds’’ and in-
serting ‘‘following payments that a person shall
be entitled to receive’’;
(B) by striking ‘‘75’’ and inserting ‘‘150’’;
(C) by striking the period at the end of
paragraph (2) and all that follows through ‘‘the
following’’ in paragraph (3);
(D) by striking ‘‘section 131’’ and all that
follows through ‘‘section 132’’ and inserting
‘‘section 121 of the Farm Security Act of 2001
for a crop of any covered commodity at a lower
level than the original loan rate established for
the commodity under section 122’’; and
(E) by striking ‘‘section 135’’ and insert-
ing ‘‘section 125’’; and
(3) by inserting after paragraph (2) the fol-
lowing new paragraph (3):
‘‘(3) LIMITATION ON COUNTER-CYCLICAL PAY-
MENTS.—The total amount of counter-cyclical pay-
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ments that a person may receive during any crop
year shall not exceed the amount specified in para-
graph (2), as in effect on the day before the date of
the enactment of the Farm Security Act of 2001.’’.
(b) DEFINITIONS.—Paragraph (4) of section 1001 of
the Food Security Act of 1985 (7 U.S.C. 1308) is amend-
ed to read as follows:
‘‘(4) DEFINITIONS.—In this title, the terms
‘covered commodity’, ‘counter-cyclical payment’, and
‘fixed, decoupled payment’ have the meaning given
those terms in section 100 of the Farm Security Act
of 2001.’’.
(c) TRANSITION.—Section 1001 of the Food Security
Act of 1985 (7 U.S.C. 1308), as in effect on the day before
the date of the enactment of this Act, shall continue to
apply with respect to fiscal year 2001 and the 2001 crop
of any covered commodity.
SEC. 184. ADJUSTMENTS OF LOANS.
Section 162(b) of the Federal Agriculture Improve-
ment and Reform Act of 1996 (7 U.S.C. 7282(b)) is
amended by striking ‘‘this title’’ and inserting ‘‘this title
and title I of the Farm Security Act of 2001’’.
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SEC. 185. PERSONAL LIABILITY OF PRODUCERS FOR DEFI-
CIENCIES.
Section 164 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7284) is amended by
striking ‘‘this title’’ each places it appears and inserting
‘‘this title and title I of the Farm Security Act of 2001’’.
SEC. 186. EXTENSION OF EXISTING ADMINISTRATIVE AU-
THORITY REGARDING LOANS.
Section 166 of the Federal Agriculture Improvement
and Reform Act of 1996 (7 U.S.C. 7286) is amended—
(1) in subsection (a)—
(A) by striking ‘‘IN GENERAL.—’’ and in-
serting ‘‘SPECIFIC PAYMENTS.—’’; and
(B) by striking ‘‘subtitle C’’ and inserting
‘‘subtitle C of this title and title I of the Farm
Security Act of 2001’’; and
(2) in subsection (c)(1)—
(A) by striking ‘‘producer’’ the first two
places it appears and inserting ‘‘person’’; and
(B) by striking ‘‘to producers under sub-
title C’’ and inserting ‘‘by the Commodity Cred-
it Corporation’’.
SEC. 187. ASSIGNMENT OF PAYMENTS.
The provisions of section 8(g) of the Soil Conserva-
tion and Domestic Allotment Act (16 U.S.C. 590h(g)), re-
lating to assignment of payments, shall apply to payments
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made under the authority of this Act. The producer mak-
ing the assignment, or the assignee, shall provide the Sec-
retary with notice, in such manner as the Secretary may
require, of any assignment made under this section.
SEC. 188. REPORT ON EFFECT OF CERTAIN FARM PRO-
GRAM PAYMENTS ON ECONOMIC VIABILITY
OF PRODUCERS AND FARMING INFRASTRUC-
TURE.
(a) REVIEW REQUIRED.—The Secretary of Agri-
culture shall conduct a review of the effects that payments
under production flexibility contracts and market loss as-
sistance payments have had, and that fixed, decoupled
payments and counter-cyclical payments are likely to have,
on the economic viability of producers and the farming in-
frastructure, particularly in areas where climate, soil
types, and other agronomic conditions severely limit the
covered crops that producers can choose to successfully
and profitably produce.
(b) CASE STUDY RELATED TO RICE PRODUCTION.—
The review shall include a case study of the effects that
the payments described in subsection (a), and the forecast
effects of increasing these or other decoupled payments,
are likely to have on rice producers (including tenant rice
producers), the rice milling industry, and the economies
of rice farming areas in Texas, where harvested rice acre-
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age has fallen from 320,000 acres in 1995 to only 211,000
acres in 2001.
(c) REPORT
AND RECOMMENDATIONS.—Not later
than 90 days after the date of the enactment of this Act,
the Secretary shall submit to the Committee on Agri-
culture of the House of Representatives and the Com-
mittee on Agriculture, Nutrition, and Forestry of the Sen-
ate a report describing the information collected for the
review and the case study and any findings made on the
basis of such information. The report shall include rec-
ommendations for minimizing the adverse effects on pro-
ducers, with a special focus on producers who are tenants,
on the agricultural economies in farming areas generally,
on those particular areas described in subsection (a), and
on the area that is the subject of the case study in sub-
section (b).
TITLE II—CONSERVATION
Subtitle 
A—Environmental 
Con-
servation Acreage Reserve Pro-
gram
SEC. 201. GENERAL PROVISIONS.
Title XII of the Food Security Act of 1985 is
amended—
(1) in section 1230(a), by striking ‘‘1996
through 2002’’ and inserting ‘‘2002 through 2011’’;
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(2) by striking subsection (c) of section 1230;
and
(3) in section 1230A (16 U.S.C. 3830a), by
striking ‘‘chapter’’ each place it appears and insert-
ing ‘‘title’’.
Subtitle B—Conservation Reserve
Program
SEC. 211. REAUTHORIZATION.
(a) IN GENERAL.—Section 1231 of the Food Security
Act of 1985 (16 U.S.C. 3831) is amended in each of sub-
sections (a) and (d) by striking ‘‘2002’’ and inserting
‘‘2011’’.
(b) SCOPE OF PROGRAM.—Section 1231(a) of such
Act (16 U.S.C. 3831(a)) is amended by striking ‘‘and
water’’ and inserting ‘‘, water, and wildlife’’.
SEC. 212. ENROLLMENT.
(a) ELIGIBILITY.—Section 1231(b) of the Food Secu-
rity Act of 1985 (16 U.S.C. 3831(b)) is amended—
(1) by striking paragraph (3) and inserting the
following:
‘‘(3) marginal pasturelands to be devoted to
natural vegetation in or near riparian areas or for
similar water quality purposes, including marginal
pasturelands converted to wetlands or established as
wildlife habitat;’’;
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(2) in paragraph (4)—
(A) by striking subparagraph (A) and in-
serting the following:
‘‘(A) if the Secretary determines that—
‘‘(i) the lands contribute to the deg-
radation of soil, water, or air quality, or
would pose an on-site or off-site environ-
mental threat to soil, water, or air quality
if permitted to remain in agricultural pro-
duction; and
‘‘(ii) soil, water, and air quality objec-
tives with respect to the land cannot be
achieved under the environmental quality
incentives program established under chap-
ter 4;’’;
(B) by striking ‘‘or’’ at the end of subpara-
graph (C);
(C) by striking the period at the end of
subparagraph (D) and inserting ‘‘; or’’; and
(D) by adding at the end the following:
‘‘(E) if the Secretary determines that en-
rollment of such lands would contribute to con-
servation of ground or surface water.’’; and
(3) by adding after and below the end the fol-
lowing flush sentence:
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‘‘Notwithstanding the preceding sentence (but subject to
subsection (c)), the Secretary may not include in the pro-
gram established under this subchapter any land that has
not been in production for at least 4 years, unless the land
is in the program as of the effective date of this sen-
tence.’’.
(b) INCREASE IN MAXIMUM ENROLLMENT.—Section
1231(d) of such Act (16 U.S.C. 3831(d)) is amended by
striking ‘‘36,400,000’’ and inserting ‘‘39,200,000’’.
(c) ELIGIBILITY ON CONTRACT EXPIRATION.—Sec-
tion 1231(f) of such Act (16 U.S.C. 3831(f)) is amended
to read as follows:
‘‘(f) ELIGIBILITY ON CONTRACT EXPIRATION.—On
the expiration of a contract entered into under this sub-
chapter, the land subject to the contract shall be eligible
to be considered for re-enrollment in the conservation re-
serve.’’.
(d) BALANCE OF NATURAL RESOURCE PURPOSES.—
(1) IN GENERAL.—Section 1231 of such Act
(16 U.S.C. 3831) is amended by adding at the end
the following:
‘‘(i) BALANCE OF NATURAL RESOURCE PURPOSES.—
In determining the acceptability of contract offers under
this subchapter, the Secretary shall ensure an equitable
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balance among the conservation purposes of soil erosion,
water quality and wildlife habitat.’’.
(2) REGULATIONS.—Not later than 180 days
after the date of the enactment of this Act, the Sec-
retary of Agriculture shall issue final regulations im-
plementing section 1231(i) of the Food Security Act
of 1985, as added by paragraph (1) of this sub-
section.
SEC. 213. DUTIES OF OWNERS AND OPERATORS.
Section 1232 of the Food Security Act of 1985 (16
U.S.C. 3832) is amended—
(1) in subsection (a)—
(A) in paragraph (3), by inserting ‘‘as de-
scribed in section 1232(a)(7) or for other pur-
poses’’ before ‘‘as permitted’’;
(B) in paragraph (4), by inserting ‘‘where
practicable, or maintain existing cover’’ before
‘‘on such land’’; and
(C) in paragraph (7), by striking ‘‘Sec-
retary—’’ and all that follows and inserting
‘‘Secretary may permit, consistent with the con-
servation of soil, water quality, and wildlife
habitat—
‘‘(A) managed grazing and limited haying,
in which case the Secretary shall reduce the
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conservation reserve payment otherwise payable
under the contract by an amount commensurate
with the economic value of the activity;
‘‘(B) wind turbines for the provision of
wind energy, whether or not commercial in na-
ture; and
‘‘(C) land subject to the contract to be
harvested for recovery of biomass used in en-
ergy production, in which case the Secretary
shall reduce the conservation reserve payment
otherwise payable under the contract by an
amount commensurate with the economic value
of such activity;’’; and
(2) by striking subsections (c) and (d) and re-
designating subsection (e) as subsection (c).
SEC. 214. REFERENCE TO CONSERVATION RESERVE PAY-
MENTS.
Subchapter B of chapter 1 of subtitle D of title XII
of such Act (16 U.S.C. 3831–3836) is amended—
(1) by striking ‘‘rental payment’’ each place it
appears and inserting ‘‘conservation reserve pay-
ment’’;
(2) by striking ‘‘rental payments’’ each place it
appears and inserting ‘‘conservation reserve pay-
ments’’; and
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(3) in the paragraph heading for section
1235(e)(4), by striking ‘‘RENTAL PAYMENT’’ and in-
serting ‘‘CONSERVATION RESERVE PAYMENT’’.
SEC. 215. EXPANSION OF PILOT PROGRAM TO ALL STATES.
Section 1231(h) of the Food Security Act of 1985
(16 U.S.C. 3831(h)) is amended—
(1) in paragraph (1), by striking ‘‘and 2002’’
and all that follows through ‘‘South Dakota’’ and in-
serting ‘‘through 2011 calendar years, the Secretary
shall carry out a program in each State’’;
(2) in paragraph (3)(C), by striking ‘‘—’’ and
all that follows and inserting ‘‘not more than
150,000 acres in any 1 State.’’; and
(3) by striking paragraph (2) and redesignating
paragraphs (3) through (5) as paragraphs (2)
through (4), respectively.
Subtitle C—Wetlands Reserve
Program
SEC. 221. ENROLLMENT.
(a) MAXIMUM.—Section 1237(b) of the Food Secu-
rity Act of 1985 (16 U.S.C. 3837(b)) is amended by strik-
ing paragraph (1) and inserting the following:
‘‘(1) ANNUAL
ENROLLMENT.—In addition to
any acres enrolled in the wetlands reserve program
as of the end of a calendar year, the Secretary may
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in the succeeding calendar year enroll in the pro-
gram a number of additional acres equal to—
‘‘(A) if the succeeding calendar year is cal-
endar year 2002, 150,000; or
‘‘(B) if the succeeding calendar year is a
calendar year after calendar year 2002—
‘‘(i) 150,000; plus
‘‘(ii) the amount (if any) by which
150,000, multiplied by the number of cal-
endar years in the period that begins with
calendar year 2002 and ends with the cal-
endar year preceding such succeeding cal-
endar year, exceeds the total number of
acres added to the reserve during the pe-
riod.’’.
(b) METHODS.—Section 1237 of such Act (16 U.S.C.
3837(b)(2)) is amended—
(1) in subsection (b), by striking paragraph (2)
and inserting the following:
‘‘(2) METHODS
OF
ENROLLMENT.—The Sec-
retary shall enroll acreage into the wetlands reserve
program through the use of easements, restoration
cost share agreements, or both.’’; and
(2) by striking subsection (g).
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(c) EXTENSION.—Section 1237(c) of such Act (16
U.S.C. 3837(c)) is amended by striking ‘‘2002’’ and in-
serting ‘‘2011’’.
SEC. 222. EASEMENTS AND AGREEMENTS.
Section 1237A of the Food Security Act of 1985 (16
U.S.C. 3837a) is amended—
(1) in subsection (b), by striking paragraph (2)
and inserting the following:
‘‘(2) prohibits the alteration of wildlife habitat
and other natural features of such land, unless spe-
cifically permitted by the plan;’’;
(2) in subsection (e), by striking paragraph (2)
and inserting the following:
‘‘(2) shall be consistent with applicable State
law.’’;
(3) by striking subsection (h).
SEC. 223. DUTIES OF THE SECRETARY.
Section 1237C of the Food Security Act of 1985 (16
U.S.C. 3837c) is amended by striking subsection (d).
SEC. 224. CHANGES IN OWNERSHIP; AGREEMENT MODI-
FICATION; TERMINATION.
Section 1237E(a)(2) of the Food Security Act of
1985 (16 U.S.C. 3837e(a)(2)) is amended to read as fol-
lows:
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‘‘(2) the ownership change occurred due to fore-
closure on the land and the owner of the land imme-
diately before the foreclosure exercises a right of re-
demption from the mortgage holder in accordance
with State law; or’’.
Subtitle D—Environmental Quality
Incentives Program
SEC. 231. PURPOSES.
Section 1240 of the Food Security Act of 1985 (16
U.S.C. 3839aa) is amended—
(1) by striking ‘‘to—’’ and all that follows
through ‘‘provides—’’ and inserting ‘‘to provide—’’;
(2) by striking ‘‘that face the most serious
threats to’’ and inserting ‘‘to address environmental
needs and provide benefits to air,’’;
(3) by redesignating the subparagraphs (A)
through (D) that follow the matter amended by
paragraph (2) of this section as paragraphs (1)
through (4), respectively;
(4) by moving each of such redesignated provi-
sions 2 ems to the left; and
(5) by striking ‘‘farmers and ranchers’’ each
place it appears and inserting ‘‘producers’’.
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SEC. 232. DEFINITIONS.
Section 1240A of the Food Security Act of 1985 (16
U.S.C. 3839aa–1) is amended—
(1) in paragraph (1)—
(A) by inserting ‘‘non-industrial private
forest land,’’ before ‘‘and other land’’; and
(B) by striking ‘‘poses a serious threat’’
and all that follows and inserting ‘‘provides in-
creased environmental benefits to air, soil,
water, or related resources.’’; and
(2) in paragraph (4), by inserting ‘‘, including
non-industrial private forestry’’ before the period.
SEC. 233. ESTABLISHMENT AND ADMINISTRATION.
(a) REAUTHORIZATION.—Section 1240B(a)(1) of the
Food Security Act of 1985 (16 U.S.C. 3839aa–2(a)(1))
is amended by striking ‘‘2002’’ and inserting ‘‘2011’’.
(b) TERM OF CONTRACTS.—Section 1240B(b)(2) of
such Act (16 U.S.C. 3839aa–2(b)(2)) is amended by strik-
ing ‘‘not less than 5, nor more than 10, years’’ and insert-
ing ‘‘not less than 1 year, nor more than 10 years’’.
(c) 
STRUCTURAL
PRACTICES.—Section
1240B(c)(1)(B) of such Act (16 U.S.C. 3839aa–
2(c)(1)(B)) is amended to read as follows:
‘‘(B) achieving the purposes established
under this subtitle.’’.
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(d) ELIMINATION OF CERTAIN LIMITATIONS ON ELI-
GIBILITY
FOR
COST-SHARE
PAYMENTS.—Section
1240B(e)(1) of such Act (16 U.S.C. 3839aa–2(e)(1)) is
amended—
(1) by striking subparagraph (B) and redesig-
nating subparagraph (C) as subparagraph (B); and
(2) in subparagraph (B) (as so redesignated),
by striking ‘‘or 3’’.
(e) INCENTIVE PAYMENTS.—Section 1240B of such
Act (16 U.S.C. 3839aa-2) is amended—
(1) in subsection (e)—
(A) in the subsection heading, by striking
‘‘, INCENTIVE PAYMENTS,’’; and
(B) by striking paragraph (2); and
(2) by redesignating subsections (f) and (g) as
subsections (g) and (h), respectively, and inserting
after subsection (e) the following:
‘‘(f) CONSERVATION INCENTIVE PAYMENTS.—
‘‘(1) IN GENERAL.—The Secretary may make
incentive payments in an amount and at a rate de-
termined by the Secretary to be necessary to encour-
age a producer to perform multiple land manage-
ment practices and to promote the enhancement of
soil, water, wildlife habitat, air, and related re-
sources.
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‘‘(2) SPECIAL
RULE.—In determining the
amount and rate of incentive payments, the Sec-
retary may accord great weight to those practices
that include residue, nutrient, pest, invasive species,
and air quality management.’’.
SEC. 234. EVALUATION OF OFFERS AND PAYMENTS.
Section 1240C of the Food Security Act of 1985 (16
U.S.C. 3839aa–3) is amended by striking paragraphs (1)
through (3) and inserting the following:
‘‘(1) aid producers in complying with this title
and Federal and State environmental laws, and en-
courage environmental enhancement and conserva-
tion;
‘‘(2) maximize the beneficial usage of animal
manure and other similar soil amendments which
improve soil health, tilth, and water-holding capac-
ity; and
‘‘(3) encourage the utilization of sustainable
grazing systems, such as year-round, rotational, or
managed grazing.’’.
SEC. 235. ENVIRONMENTAL QUALITY INCENTIVES PRO-
GRAM PLAN.
Section 1240E(a) of the Food Security Act of 1985
(16 U.S.C. 3839aa–5(a)) is amended by striking ‘‘that in-
corporates such conservation practices’’ and all that fol-
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lows and inserting ‘‘that provides or will continue to pro-
vide increased environmental benefits to air, soil, water,
or related resources.’’.
SEC. 236. DUTIES OF THE SECRETARY.
Section 1240F(3) of the Food Security Act of 1985
(16 U.S.C. 3839aa–6(3)) is amended to read as follows:
‘‘(3) providing technical assistance or cost-share
payments for developing and implementing 1 or
more structural practices or 1 or more land manage-
ment practices, as appropriate;’’.
SEC. 237. LIMITATION ON PAYMENTS.
Section 1240G of the Food Security Act of 1985 (16
U.S.C. 3839aa–7) is amended—
(1) in subsection (a)—
(A) 
in 
paragraph 
(1), 
by 
striking
‘‘$10,000’’ and inserting ‘‘$50,000’’; and
(B) 
in 
paragraph 
(2), 
by 
striking
‘‘$50,000’’ and inserting ‘‘$200,000’’;
(2) in subsection (b)(2), by striking ‘‘the maxi-
mization of environmental benefits per dollar ex-
pended and’’; and
(3) by striking subsection (c).
SEC. 238. GROUND AND SURFACE WATER CONSERVATION.
Section 1240H of the Food Security Act of 1985 (16
U.S.C. 3839aa-8) is amended to read as follows:
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‘‘SEC. 1240H. GROUND AND SURFACE WATER CONSERVA-
TION.
‘‘(a) SUPPORT
FOR CONSERVATION MEASURES.—
The Secretary shall provide cost-share payments and low-
interest loans to encourage ground and surface water con-
servation, including irrigation system improvement, and
provide incentive payments for capping wells, reducing use
of water for irrigation, and switching from irrigation to
dryland farming.
‘‘(b) FUNDING.—Of the funds of the Commodity
Credit Corporation, the Secretary shall make available the
following amounts to carry out this section:
‘‘(1) $30,000,000 for fiscal year 2002.
‘‘(2) $45,000,000 for fiscal year 2003.
‘‘(3) $60,000,000 for each of fiscal years 2004
through 2011.’’.
Subtitle E—Funding and
Administration
SEC. 241. REAUTHORIZATION.
Section 1241(a) of the Food Security Act of 1985
(16 U.S.C. 3841(a)) is amended by striking ‘‘2002’’ and
inserting ‘‘2011’’.
SEC. 242. FUNDING.
Section 1241(b)(1) of the Food Security Act of 1985
(16 U.S.C. 3841(b)(1)) is amended—
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(1) by striking ‘‘$130,000,000’’ and all that fol-
lows through ‘‘2002, for’’ and inserting ‘‘the fol-
lowing amounts for purposes of’’;
(2) by striking ‘‘subtitle D.’’ and inserting
‘‘subtitle D:’’; and
(3) by adding at the end the following:
‘‘(A) $200,000,000 for fiscal year 2001.
‘‘(B) $1,025,000,000 for each of fiscal
years 2002 and 2003.
‘‘(C) $1,200,000,000 for each of fiscal
years 2004, 2005, and 2006.
‘‘(D) $1,400,000,000 for each of fiscal
years 2007, 2008, and 2009.
‘‘(E) $1,500,000,000 for each of fiscal
years 2010 and 2011.’’.
SEC. 243. ALLOCATION FOR LIVESTOCK PRODUCTION.
Section 1241(b)(2) of the Food Security Act of 1985
(16 U.S.C. 3841(b)(2)) is amended by striking ‘‘2002’’
and inserting ‘‘2011’’.
SEC. 244. ADMINISTRATION AND TECHNICAL ASSISTANCE.
(a) BROADENING OF EXCEPTION TO ACREAGE LIMI-
TATION.—Section 1243(b)(2) of the Food Security Act of
1985 (16 U.S.C. 3843(b)(2)) is amended by striking
‘‘that—’’ and all that follows and inserting ‘‘that the ac-
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tion would not adversely affect the local economy of the
county.’’.
(b) RULES GOVERNING PROVISION OF TECHNICAL
ASSISTANCE.—Section 1243(d) of such Act (16 U.S.C.
3843(d)) is amended to read as follows:
‘‘(d) RULES GOVERNING PROVISION OF TECHNICAL
ASSISTANCE.—
‘‘(1) IN GENERAL.—The Secretary shall provide
technical assistance under this title to a producer el-
igible for such assistance, by providing the assist-
ance directly or, at the option of the producer,
through an approved third party if available.
‘‘(2) REEVALUATION.—The Secretary shall re-
evaluate the provision of, and the amount of, tech-
nical assistance made available under subchapters B
and C of chapter 1 and chapter 4 of subtitle D.
‘‘(3) CERTIFICATION
OF
THIRD-PARTY
PRO-
VIDERS.—
‘‘(A) IN
GENERAL.—Not later than 6
months after the date of the enactment of this
subsection, the Secretary of Agriculture shall,
by regulation, establish a system for approving
persons to provide technical assistance pursuant
to chapter 4 of subtitle D. For purposes of this
paragraph, a person shall be considered ap-
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proved if they have a memorandum of under-
standing regarding the provision of technical
assistance in place with the Secretary.
‘‘(B) 
EXPERTISE
REQUIRED.—In 
pre-
scribing such regulations, the Secretary shall
ensure that persons with expertise in the tech-
nical aspects of conservation planning, water-
shed planning, environmental engineering, in-
cluding commercial entities, nonprofit entities,
State or local governments or agencies, and
other Federal agencies, are eligible to become
approved providers of such technical assist-
ance.’’.
(c) DUTY OF SECRETARY.—
(1) IN GENERAL.—Section 1770(d) of such Act
(7 U.S.C. 2276(d)) is amended—
(A) by striking ‘‘or’’ at the end of para-
graph (9);
(B) by striking the period at the end of
paragraph (11) and inserting ‘‘; or’’; and
(C) by adding at the end the following:
‘‘(12) title XII of this Act.’’.
(2) 
CONFORMING
AMENDMENTS.—Section
1770(e) of such Act (7 U.S.C. 2276(e)) is
amended—
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(A) by striking the subsection heading and
inserting ‘‘EXCEPTIONS’’; and
(B) by inserting ‘‘, or as necessary to carry
out a program under title XII of this Act as de-
termined by the Secretary’’ before the period.
Subtitle F—Other Programs
SEC. 251. PRIVATE GRAZING LAND CONSERVATION ASSIST-
ANCE.
Section 386(d)(1) of the Federal Agriculture Im-
provement and Reform Act of 1996 (16 U.S.C.
2005b(d)(1)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (G);
(2) by striking the period at the end of sub-
paragraph (H) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(I) encouraging the utilization of sustain-
able grazing systems, such as year-round, rota-
tional, or managed grazing.’’.
SEC. 252. WILDLIFE HABITAT INCENTIVES PROGRAM.
Subsection (c) of section 387 of the Federal Agri-
culture Improvement and Reform Act of 1996 (16 U.S.C.
3836a) is amended to read as follows:
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‘‘(c) FUNDING.—Of the funds of the Commodity
Credit Corporation, the Secretary of Agriculture shall
make available the following amounts to carry out this sec-
tion:
‘‘(1) $25,000,000 for fiscal year 2002.
‘‘(2) $30,000,000 for each of fiscal years 2003
and 2004.
‘‘(3) $35,000,000 for each of fiscal years 2005
and 2006.
‘‘(4) $40,000,000 for fiscal year 2007.
‘‘(5) $45,000,000 for each of fiscal years 2008
and 2009.
‘‘(6) $50,000,000 for each of fiscal years 2010
and 2011.’’.
SEC. 253. FARMLAND PROTECTION PROGRAM.
(a) REMOVAL OF ACREAGE LIMITATION; EXPANSION
OF PURPOSES.—Subsection (a) of section 388 of the Fed-
eral Agriculture Improvement and Reform Act of 1996
(16 U.S.C. 3830 note) is amended—
(1) by striking ‘‘not less than 170,000, nor
more than 340,000 acres of’’; and
(2) by inserting ‘‘, or agricultural land that
contains historic or archaeological resources,’’ after
‘‘other productive soil’’.
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(b) FUNDING.—Subsection (c) of such section is
amended to read as follows:
‘‘(c) FUNDING.—The Secretary shall use not more
than $50,000,000 of the funds of the Commodity Credit
Corporation in each of fiscal years 2002 through 2011 to
carry out this section.’’.
(c) ELIGIBLE ENTITIES.—Such section is further
amended—
(1) in subsection (a), by striking ‘‘a State or
local government’’ and inserting ‘‘an eligible entity’’;
and
(2) by adding at the end the following:
‘‘(d) DEFINITION OF ELIGIBLE ENTITY.—In this sec-
tion, the term ‘eligible entity’ means—
‘‘(1) any agency of any State or local govern-
ment, or federally recognized Indian tribe, including
farmland protection boards and land resource coun-
cils established under State law; and
‘‘(2) any organization that—
‘‘(A) is organized for, and at all times
since the formation of the organization has
been operated principally for, one or more of
the conservation purposes specified in clause (i),
(ii), or (iii) of section 170(h)(4)(A) of the Inter-
nal Revenue Code of 1986;
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‘‘(B) is an organization described in sec-
tion 501(c)(3) of that Code that is exempt from
taxation under section 501(a) of that Code;
‘‘(C) is described in section 509(a)(2) of
that Code; or
‘‘(D) is described in section 509(a)(3) of
that Code and is controlled by an organization
described in section 509(a)(2) of that Code.’’.
SEC. 254. RESOURCE CONSERVATION AND DEVELOPMENT
PROGRAM.
(a) PURPOSE.—Section 1528 of the Agriculture and
Food Act of 1981 (16 U.S.C. 3451) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1528. It is the purpose’’ and
inserting the following:
‘‘SEC. 1528. STATEMENT OF PURPOSE.
‘‘It is the purpose’’; and
(2) by inserting ‘‘through designated RC&D
councils’’ before ‘‘in rural areas’’.
(b) DEFINITIONS.—Section 1529 of such Act (16
U.S.C. 3452) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1529. As used in this sub-
title—’’ and inserting the following:
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‘‘SEC. 1529. DEFINITIONS.
‘‘In this title:’’;
(2) in paragraph (1)—
(A) in the matter preceding subparagraph
(A), by inserting ‘‘RC&D council’’ before ‘‘area
plan’’;
(B) in subparagraph (B), by striking
‘‘through control of nonpoint sources of pollu-
tion’’;
(C) in subparagraph (C)—
(i) by striking ‘‘natural resources
based’’ and inserting ‘‘resource-based’’;
(ii) by striking ‘‘development of aqua-
culture,’’;
(iii) by striking ‘‘and satisfaction’’
and inserting ‘‘satisfaction’’; and
(iv) by inserting ‘‘, food security, eco-
nomic development, and education’’ before
the semicolon; and
(D) in subparagraph (D), by striking
‘‘other’’ the 1st place it appears and inserting
‘‘land management’’;
(3) in paragraph (3), by striking ‘‘any State,
local unit of government, or local nonprofit organiza-
tion’’ and inserting ‘‘the designated RC&D council’’;
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(4) by striking paragraphs (4) through (6) and
inserting the following:
‘‘(4)(A) The term ‘financial assistance’ means
the Secretary may—
‘‘(i) provide funds directly to RC&D coun-
cils or associations of RC&D councils through
grants, cooperative agreements, and interagency
agreements that directly implement RC&D area
plans; and
‘‘(ii) may join with other federal agencies
through interagency agreements and other ar-
rangements as needed to carry out the pro-
gram’s purpose.
‘‘(B) Funds may be used for such things as—
‘‘(i) technical assistance;
‘‘(ii) financial assistance in the form of
grants for planning, analysis and feasibility
studies, and business plans;
‘‘(iii) training and education; and
‘‘(iv) all costs associated with making such
services available to RC&D councils or RC&D
associations.
‘‘(5) The term ‘RC&D council’ means the re-
sponsible leadership of the RC&D area. RC&D coun-
cils and associations are non-profit entities whose
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members are volunteers and include local civic and
elected officials. Affiliations of RC&D councils are
formed in states and regions.’’;
(5) in paragraph (8), by inserting ‘‘and feder-
ally recognized Indian tribes’’ before the period;
(6) in paragraph (9), by striking ‘‘works of im-
provement’’ and inserting ‘‘projects’’;
(7) by redesignating paragraphs (7) through
(9) as paragraphs (6) through (8), respectively; and
(8) by striking paragraph (10) and inserting
the following:
‘‘(9) The term ‘project’ means any action taken
by a designated RC&D council that achieves any of
the elements identified under paragraph (1).’’.
(c) ESTABLISHMENT AND SCOPE.—Section 1530 of
such Act (16 U.S.C. 3453) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1530. The Secretary’’ and in-
serting the following:
‘‘SEC. 1530. ESTABLISHMENT AND SCOPE.
‘‘The Secretary’’; and
(2) by striking ‘‘the technical and financial as-
sistance necessary to permit such States, local units
of government, and local nonprofit organizations’’
and inserting ‘‘through designated RC&D councils
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the technical and financial assistance necessary to
permit such RC&D Councils’’.
(d) SELECTION
OF DESIGNATED AREAS.—Section
1531 of such Act (16 U.S.C. 3454) is amended by striking
the section heading and all that follows through ‘‘SEC.
1531. The Secretary’’ and inserting the following:
‘‘SEC. 1531. SELECTION OF DESIGNATED AREAS.
‘‘The Secretary’’.
(e) AUTHORITY OF SECRETARY.—Section 1532 of
such Act (16 U.S.C. 3455) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1532. In carrying’’ and in-
serting the following:
‘‘SEC. 1532. AUTHORITY OF SECRETARY.
‘‘In carrying’’;
(2) in each of paragraphs (1) and (3)—
(A) by striking ‘‘State, local unit of gov-
ernment, or local nonprofit organization’’ and
inserting ‘‘RC&D council’’; and
(B) by inserting ‘‘RC&D council’’ before
‘‘area plan’’;
(3) in paragraph (2), by inserting ‘‘RC&D
council’’ before ‘‘area plans’’; and
(4) in paragraph (4), by striking ‘‘States, local
units of government, and local nonprofit organiza-
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tions’’ and inserting ‘‘RC&D councils or affiliations
of RC&D councils’’.
(f) TECHNICAL AND FINANCIAL ASSISTANCE.—Sec-
tion 1533 of such Act (16 U.S.C. 3456) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1533. (a) Technical’’ and in-
serting the following:
‘‘SEC. 1533. TECHNICAL AND FINANCIAL ASSISTANCE.
‘‘(a) Technical’’;
(2) in subsection (a)—
(A) by striking ‘‘State, local unit of gov-
ernment, or local nonprofit organization to as-
sist in carrying out works of improvement spec-
ified in an’’ and inserting ‘‘RC&D councils or
affiliations of RC&D councils to assist in car-
rying out a project specified in a RC&D coun-
cil’’;
(B) in paragraph (1)—
(i) by striking ‘‘State, local unit of
government, or local nonprofit organiza-
tion’’ and inserting ‘‘RC&D council or af-
filiate’’; and
(ii) by striking ‘‘works of improve-
ment’’ each place it appears and inserting
‘‘project’’;
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(C) in paragraph (2)—
(i) by striking ‘‘works of improve-
ment’’ and inserting ‘‘project’’; and
(ii) by striking ‘‘State, local unit of
government, or local nonprofit organiza-
tion’’ and inserting ‘‘RC&D council’’;
(D) in paragraph (3), by striking ‘‘works
of improvement’’ and all that follows and in-
serting ‘‘project concerned is necessary to ac-
complish and RC&D council area plan objec-
tive;’’;
(E) in paragraph (4), by striking ‘‘the
works of improvement provided for in the’’ and
inserting ‘‘the project provided for in the RC&D
council’’;
(F) in paragraph (5), by inserting ‘‘feder-
ally recognized Indian tribe’’ before ‘‘or local’’
each place it appears; and
(G) in paragraph (6), by inserting ‘‘RC&D
council’’ before ‘‘area plan’’;
(3) in subsection (b), by striking ‘‘work of im-
provement’’ and inserting ‘‘project’’; and
(4) in subsection (c), by striking ‘‘any State,
local unit of government, or local nonprofit organiza-
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tion to carry out any’’ and inserting ‘‘RC&D council
to carry out any RC&D council’’.
(g) RESOURCE CONSERVATION AND DEVELOPMENT
POLICY BOARD.—Section 1534 of such Act (16 U.S.C.
3457) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1534. (a) The Secretary’’ and
inserting the following:
‘‘SEC. 1534. RESOURCE CONSERVATION AND DEVELOP-
MENT POLICY BOARD.
‘‘(a) The Secretary’’; and
(2) in subsection (b), by striking ‘‘seven’’.
(h) PROGRAM EVALUATION.—Section 1535 of such
Act (16 U.S.C. 3458) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1535. The Secretary’’ and in-
serting the following:
‘‘SEC. 1535. PROGRAM EVALUATION.
‘‘The Secretary’’;
(2) by inserting ‘‘with assistance from RC&D
councils’’ before ‘‘provided’’;
(3) by inserting ‘‘federally recognized Indian
tribes,’’ before ‘‘local units’’; and
(4) by striking ‘‘1986’’ and inserting ‘‘2007’’.
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(i) LIMITATION ON ASSISTANCE.—Section 1536 of
such Act (16 U.S.C. 3458) is amended by striking the sec-
tion heading and all that follows through ‘‘SEC. 1536. The
program’’ and inserting the following:
‘‘SEC. 1536. LIMITATION ON ASSISTANCE.
‘‘The program’’.
(j) SUPPLEMENTAL
AUTHORITY
OF
THE
SEC-
RETARY.—Section 1537 of such Act (16 U.S.C. 3460) is
amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1537. The authority’’ and in-
serting the following:
‘‘SEC. 1537. SUPPLEMENTAL AUTHORITY OF SECRETARY.
‘‘The authority’’; and
(2) by striking ‘‘States, local units of govern-
ment, and local nonprofit organizations’’ and insert-
ing ‘‘RC&D councils’’.
(i) AUTHORIZATION OF APPROPRIATIONS.—Section
1538 of such Act (16 U.S.C. 3461) is amended—
(1) by striking the section heading and all that
follows through ‘‘SEC. 1538. There are’’ and insert-
ing the following:
‘‘SEC. 1538. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are’’; and
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(2) by striking ‘‘for each of the fiscal years
1996 through 2002’’.
SEC. 255. GRASSLAND RESERVE PROGRAM.
(a) IN GENERAL.—Chapter 1 of subtitle D of title
XII of the Food Security Act of 1985 (16 U.S.C. 3830–
3837f) is amended by adding at the end the following:
‘‘Subchapter D—Grassland Reserve Program
‘‘SEC. 1238. GRASSLAND RESERVE PROGRAM.
‘‘(a) 
ESTABLISHMENT.—The 
Secretary, 
acting
through the Farm Service Agency, shall establish a grass-
land reserve program (referred to in this subchapter as
the ‘program’) to assist owners in restoring and con-
serving eligible land described in subsection (c).
‘‘(b) ENROLLMENT CONDITIONS.—
‘‘(1) MAXIMUM ENROLLMENT.—The total num-
ber of acres enrolled in the program shall not exceed
2,000,000 acres, not more than 1,000,000 of which
shall be restored grassland, and not more than
1,000,000 of which shall be virgin (never cultivated)
grassland.
‘‘(2) METHODS
OF
ENROLLMENT.—The Sec-
retary shall enroll in the program for a willing owner
not less than 100 contiguous acres of land west of
the 90th meridian or not less than 50 contiguous
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acres of land east of the 90th meridian through the
use of—
‘‘(A) 10-year, 15-year, or 20-year con-
tracts; and
‘‘(B) 30-year or permanent easements.
‘‘(3) LIMITATION ON USE OF EASEMENTS.—Not
more than one-third of the total amount of funds ex-
pended under the program may be used to acquire
30-year and permanent easements.
‘‘(c) ELIGIBLE LAND.—Land shall be eligible to be
enrolled in the program if the Secretary determines that—
‘‘(1) the land is natural grass or shrubland; or
‘‘(2) the land—
‘‘(A) is located in an area that has been
historically dominated by natural grass or
shrubland; and
‘‘(B) has potential to serve as habitat for
animal or plant populations of significant eco-
logical value if the land is restored to natural
grass or shrubland.
‘‘SEC. 1238A. CONTRACTS AND AGREEMENTS.
‘‘(a) REQUIREMENTS OF LANDOWNER.—
‘‘(1) CONTRACTS.—To be eligible to enroll land
in the program under a multi-year contract, the
owner of the land shall—
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‘‘(A) agree to comply with the terms of the
contract and related restoration agreements;
and
‘‘(B) agree to the suspension of any exist-
ing cropland base and allotment history for the
land under any program administered by the
Secretary.
‘‘(2) EASEMENTS.—To be eligible to enroll land
in the program under an easement, the owner of the
land shall—
‘‘(A) grant an easement that runs with the
land to the Secretary;
‘‘(B) create and record an appropriate
deed restriction in accordance with applicable
State law to reflect the easement;
‘‘(C) provide a written statement of con-
sent to the easement signed by persons holding
a security interest or any vested interest in the
land;
‘‘(D) provide proof of unencumbered title
to the underlying fee interest in the land that
is the subject of the easement;
‘‘(E) agree to comply with the terms of the
easement and related restoration agreements;
and
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‘‘(F) agree to the suspension of any exist-
ing cropland base and allotment history for the
land under any program administered by the
Secretary.
‘‘(b) TERMS OF CONTRACTS AND EASEMENTS.—A
contract or easement under the program shall—
‘‘(1) permit—
‘‘(A) common grazing practices on the land
in a manner that is consistent with maintaining
the viability of natural grass and shrub species
indigenous to that locality;
‘‘(B) haying, mowing, or haying for seed
production, except that such uses shall not be
permitted until after the end of the nesting sea-
son for birds in the local area which are in sig-
nificant decline or are conserved pursuant to
State or Federal law, as determined by the Nat-
ural Resources Conservation Service State con-
servationist; and
‘‘(C) construction of fire breaks and
fences, including placement of the posts nec-
essary for fences;
‘‘(2) prohibit—
‘‘(A) the production of any agricultural
commodity (other than hay); and
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‘‘(B) unless allowed under subsection (d),
the conduct of any other activity that would dis-
turb the surface of the land covered by the con-
tract or easement; and
‘‘(3) include such additional provisions as the
Secretary determines are appropriate to carry out or
facilitate the administration of this subchapter.
‘‘(c) RANKING APPLICATIONS.—
‘‘(1) ESTABLISHMENT OF CRITERIA.—The Sec-
retary shall establish criteria to evaluate and rank
applications for contracts or easements under this
subchapter.
‘‘(2) EMPHASIS.—In establishing the criteria,
the Secretary shall emphasize support for native
grass and shrubland, grazing operations, and plant
and animal biodiversity.
‘‘(d) RESTORATION AGREEMENTS.—The Secretary
shall prescribe the terms by which grassland that is sub-
ject to a contract or easement under the program shall
be restored. The agreement shall include duties of the land
owner and the Secretary, including the Federal share of
restoration payments and technical assistance.
‘‘(e) VIOLATIONS.—On the violation of the terms or
conditions of a contract, easement, or restoration agree-
ment entered into under the program—
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‘‘(1) the contract or easement shall remain in
force; and
‘‘(2) the Secretary may require the owner to re-
fund all or part of any payments received by the
owner under this subchapter, with interest on the
payments as determined appropriate by the Sec-
retary.
‘‘SEC. 1238B. DUTIES OF SECRETARY.
‘‘(a) IN GENERAL.—In return for the granting of an
easement or the execution of a contract by an owner under
this subchapter, the Secretary shall make payments under
subsection (b), make payments of the Federal share of res-
toration under subsection (c), and provide technical assist-
ance to the owner in accordance with this section.
‘‘(b) CONTRACT AND EASEMENT PAYMENTS.—
‘‘(1) CONTRACTS.—In return for entering into
a contract by an owner under this subchapter, the
Secretary shall make annual payments to the owner
during the term of the contract in an amount that
is not more than 75 percent of the grazing value of
the land.
‘‘(2) EASEMENTS.—
‘‘(A) IN
GENERAL.—In return for the
granting of an easement by an owner under this
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subchapter, the Secretary shall make easement
payments to the owner in an amount equal to—
‘‘(i) in the case of a permanent ease-
ment, the fair market value of the land
less the grazing value of the land encum-
bered by the easement; and
‘‘(ii) in the case of a 30-year easement
or an easement for the maximum duration
allowed under applicable State law, 30 per-
cent of the fair market value of the land
less the grazing value of the land for the
period that the land is encumbered by the
easement.
‘‘(B) 
PAYMENT
SCHEDULE.—Easement
payments may be made as a single payment or
annual payments, but not to exceed 10 annual
payments of equal or unequal amounts, as
agreed to by the Secretary and the owner.
‘‘(c) FEDERAL SHARE OF RESTORATION.—The Sec-
retary shall make payments to the owner of not more
than—
‘‘(1) in the case of virgin (never cultivated)
grassland, 90 percent of the costs of carrying out
measures and practices necessary to restore grass-
land functions and values; or
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‘‘(2) in the case of restored grassland, 75 per-
cent of such costs.
‘‘(d) TECHNICAL ASSISTANCE.—A landowner who is
receiving a benefit under this subchapter shall be eligible
to receive technical assistance in accordance with section
1243(d) to assist the owner or operator in carrying out
a contract entered into under this subchapter.
‘‘(e) PAYMENTS TO OTHERS.—If an owner who is en-
titled to a payment under this subchapter dies, becomes
incompetent, is otherwise unable to receive the payment,
or is succeeded by another person who renders or com-
pletes the required performance, the Secretary shall make
the payment, in accordance with regulations promulgated
by the Secretary and without regard to any other provision
of law, in such manner as the Secretary determines is fair
and reasonable in light of all the circumstances.’’.
(b) FUNDING.—Section 1241 of such Act (16 U.S.C.
3841) is amended by adding at the end the following:
‘‘(c) GRASSLAND RESERVE PROGRAM.—For fiscal
years 2002 through 2011, the Secretary shall use a total
of $254,000,000 of the funds of the Commodity Credit
Corporation to carry out subchapter D of chapter 1 of sub-
title D.’’.
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SEC. 256. FARMLAND STEWARDSHIP PROGRAM.
Subtitle D of title XII of the Food Security Act of
1985 (16 U.S.C. 3830–3839bb) is amended by inserting
after chapter 1 (and the matter added by section 255 of
this Act) the following:
‘‘CHAPTER 2—FARMLAND STEWARDSHIP
PROGRAM
‘‘SEC. 1239. DEFINITIONS.
‘‘In this chapter:
‘‘(1) AGREEMENT.—The terms ‘farmland stew-
ardship agreement’ and ‘agreement’ mean a stew-
ardship contract authorized by this chapter.
‘‘(2) CONTRACTING AGENCY.—The term ‘con-
tracting agency’ means a local conservation district,
resource conservation and development council, local
office of the Department of Agriculture, other par-
ticipating government agency, or other nongovern-
mental organization that is designated by the Sec-
retary to enter into farmland stewardship agree-
ments on behalf of the Secretary.
‘‘(3) ELIGIBLE
AGRICULTURAL
LANDS.—The
term ‘eligible agricultural lands’ means private lands
that are in primarily native or natural condition or
are classified as cropland, pastureland, grazing
lands, timberlands, or other lands as specified by the
Secretary that—
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‘‘(A) contain wildlife habitat, wetlands, or
other natural resources; or
‘‘(B) provide benefits to the public at
large, such as—
‘‘(i) conservation of soil, water, and
related resources;
‘‘(ii) water quality protection or im-
provement;
‘‘(iii) control of invasive and exotic
species;
‘‘(iv) wetland restoration, protection,
and creation; and
‘‘(v) wildlife habitat development and
protection;
‘‘(vi) preservation of open spaces, or
prime, unique, or other productive farm
lands; and
‘‘(vii) and other similar conservation
purposes.
‘‘(4) FARMLAND STEWARDSHIP PROGRAM; PRO-
GRAM.—The terms ‘Farmland Stewardship Pro-
gram’ and ‘Program’ mean the conservation pro-
gram of the Department of Agriculture established
by this chapter.
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‘‘SEC. 1239A. ESTABLISHMENT AND PURPOSE OF PROGRAM.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish a conservation program of the Department of Agri-
culture, to be known as the Farmland Stewardship Pro-
gram, that is designed to more precisely tailor and target
existing conservation programs to the specific conservation
needs and opportunities presented by individual parcels of
eligible agricultural lands.
‘‘(b) RELATION
TO OTHER CONSERVATION PRO-
GRAMS.—Under the Farmland Stewardship Program, the
Secretary may implement, or combine together, the fea-
tures of—
‘‘(1) the Wetlands Reserve Program;
‘‘(2) the Wildlife Habitat Incentives Program;
‘‘(3) the Forest Land Enhancement Program;
‘‘(4) the Farmland Protection Program; or
‘‘(5) other conservation programs administered
by other Federal agencies and State and local gov-
ernment entities, where feasible and with the con-
sent of the administering agency or government.
‘‘(c) FUNDING SOURCES.—
‘‘(1) IN GENERAL.—The Farmland Stewardship
Program and agreements under the Program shall
be funded by the Secretary using—
‘‘(A) the funding authorities of the con-
servation programs that are implemented in
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whole, or in part, through the use of agree-
ments or easements; and
‘‘(B) such funds as are provided to carry
out the programs specified in paragraphs (1)
through (4) of subsection (b).
‘‘(2) COST-SHARING.—It shall be a requirement
of the Farmland Stewardship Program that the ma-
jority of the funds to carry out the Program must
come from other existing conservation programs,
which may be Federal, State, regional, local, or pri-
vate, that are combined into and made a part of an
agreement, or from matching funding contributions
made by State, regional, or local agencies and divi-
sions of government or from private funding sources.
‘‘(d) PERSONNEL COSTS.—The Secretary may use
the Natural Resources Conservation Service to carry out
the Farmland Stewardship Program.
‘‘(e) TECHNICAL ASSISTANCE.—An owner or oper-
ator who is receiving a benefit under this chapter shall
be eligible to receive technical assistance in accordance
with section 1243(d) to assist the owner or operator in
carrying out a contract entered into under this chapter.
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‘‘SEC. 1239B. USE OF FARMLAND STEWARDSHIP AGREE-
MENTS.
‘‘(a) AGREEMENTS AUTHORIZED.—The Secretary
shall carry out the Farmland Stewardship Program by en-
tering into stewardship contracts as determined by the
Secretary, to be known as farmland stewardship agree-
ments, with the owners or operators of eligible agricultural
lands to maintain and protect for the natural and agricul-
tural resources on the lands.
‘‘(b) BASIC PURPOSES.—An agreement with the
owner or operator of eligible agricultural lands shall be
used—
‘‘(1) to negotiate a mutually agreeable set of
guidelines, practices, and procedures under which
conservation practices will be provided by the owner
or operator to protect, maintain, and, where pos-
sible, improve, the natural resources on the lands
covered by the agreement in return for annual pay-
ments to the owner or operator;
‘‘(2) to implement a conservation program or
series of programs where there is no such program
or to implement conservation management activities
where there is no such activity; and
‘‘(3) to expand conservation practices and re-
source management activities to a property where it
is not possible at the present time to negotiate or
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reach agreement on a public purchase of a fee-sim-
ple or less-than-fee interest in the property for con-
servation purposes.
‘‘(c) MODIFICATION OF OTHER CONSERVATION PRO-
GRAM ELEMENTS.—If most, but not all, of the limitations,
conditions, and requirements of a conservation program
that is implemented in whole, or in part, through the
Farmland Stewardship Program are met with respect to
a parcel of eligible agricultural lands, and the purposes
to be achieved by the agreement to be entered into for
such lands are consistent with the purposes of the con-
servation program, then the Secretary may waive any re-
maining limitations, conditions, or requirements of the
conservation program that would otherwise prohibit or
limit the agreement.
‘‘(d) STATE
AND LOCAL CONSERVATION PRIOR-
ITIES.—To the maximum extent practicable, agreements
shall address the conservation priorities established by the
State and locality in which the eligible agricultural lands
are located.
‘‘(e) WATERSHED ENHANCEMENT.—To the extent
practicable, the Secretary shall encourage the development
of Farmland Stewardship Program applications on a wa-
tershed basis.
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‘‘SEC. 1239C. PARTNERSHIP APPROACH TO PROGRAM.
‘‘(a) 
AUTHORITY
OF
SECRETARY
EXERCISED
THROUGH PARTNERSHIPS.—The Secretary may admin-
ister agreements under the Farmland Stewardship Pro-
gram in partnership with other Federal, State, and local
agencies whose programs are incorporated into the Pro-
gram under section 1239A.
‘‘(b) DESIGNATION
AND
USE
OF
CONTRACTING
AGENCIES.—Subject to subsection (c), the Secretary may
authorize a local conservation district, resource conserva-
tion & development district, nonprofit organization, or
local office of the Department of Agriculture or other par-
ticipating government agency to enter into and administer
agreements under the Program as a contracting agency
on behalf of the Secretary.
‘‘(c) CONDITIONS ON DESIGNATION.—The Secretary
may designate an eligible district or office as a contracting
agency under subsection (b) only if the district of office—
‘‘(1) submits a written request for such des-
ignation to the Secretary;
‘‘(2) affirms that it is willing to follow all guide-
lines for executing and administering an agreement,
as promulgated by the Secretary;
‘‘(3) demonstrates to the satisfaction of the
Secretary that it has established working relation-
ships with owners and operators of eligible agricul-
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tural lands, and based on the history of these work-
ing relationships, demonstrates that it has the abil-
ity to work with owners and operators of eligible ag-
ricultural lands in a cooperative manner;
‘‘(4) affirms its responsibility for preparing all
documentation for the agreement, negotiating its
terms with an owner or operator, monitoring compli-
ance, making annual reports to the Secretary, and
administering the agreement throughout its full
term; and
‘‘(5) demonstrates to the satisfaction of the
Secretary that it has or will have the necessary staff
resources and expertise to carry out its responsibil-
ities under paragraphs (3) and (4).
‘‘SEC. 1239D. PARTICIPATION OF OWNERS AND OPERATORS
OF ELIGIBLE AGRICULTURAL LANDS.
‘‘(a) APPLICATION
AND APPROVAL PROCESS.—To
participate in the Farmland Stewardship Program, an
owner or operator of eligible agricultural lands shall—
‘‘(1) submit to the Secretary an application in-
dicating interest in the Program and describing the
owner’s or operator’s property, its resources, and
their ecological and agricultural values;
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‘‘(2) submit to the Secretary a list of services
to be provided, a management plan to be imple-
mented, or both, under the proposed agreement;
‘‘(3) if the application and list are accepted by
the Secretary, enter into an agreement that details
the services to be provided, management plan to be
implemented, or both, and requires compliance with
the other terms of the agreement.
‘‘(b) APPLICATION ON BEHALF OF AN OWNER OR
OPERATOR.—A designated contracting agency may sub-
mit the application required by subsection (a) on behalf
of an owner or operator by if the contracting agency has
secured the consent of the owner or operator to enter into
an agreement.’’.
SEC. 257. SMALL WATERSHED REHABILITATION PROGRAM.
Section 14(h) of the Watershed Protection and Flood
Prevention Act (16 U.S.C. 1012(h)) is amended—
(1) by adding ‘‘and’’ at the end of paragraph
(1); and
(2) by striking all that follows paragraph (1)
and inserting the following:
‘‘(2) $15,000,000 for fiscal year 2002 and each
succeeding fiscal year.’’.