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‘‘SEC. 359l. EFFECTIVE PERIOD. 
‘‘This part shall be effective only for the 2008 
through 2012 crop years for sugar.’’. 
(k) TRANSITION.—The Secretary of Agriculture shall 
administer flexible marketing allotments for sugar for the 
2007 crop year for sugar on the terms and conditions pro-
vided in part VII of title III of the Agricultural Adjust-
ment Act of 1938, as in effect on the day before the date 
of the enactment of this Act. 
Subtitle D—Dairy-Related 
Provisions 
SEC. 1401. DAIRY PRODUCT PRICE SUPPORT PROGRAM. 
(a) SUPPORT ACTIVITIES.—During the period begin-
ning on January 1, 2008, through December 31, 2012, 
the Secretary of Agriculture shall support the price of 
cheddar cheese, butter, and nonfat dry milk through the 
purchase of such products made from milk produced in 
the United States. 
(b) PURCHASE PRICE.—To carry out subsection (a) 
during the period specified in such subsection, the Sec-
retary shall purchase— 
(1) cheddar cheese in blocks at not less than 
$1.13 per pound; 
(2) cheddar cheese in barrels at not less than 
$1.10 per pound; 
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(3) butter at not less than $1.05 per pound; 
and 
(4) nonfat dry milk at not less than $0.80 per 
pound. 
(c) TEMPORARY PRICE ADJUSTMENT TO AVOID EX-
CESS INVENTORIES.— 
(1) ADJUSTMENTS
AUTHORIZED.—The Sec-
retary may adjust the minimum purchase prices es-
tablished under subsection (b) only as permitted 
under this subsection. 
(2) CHEESE INVENTORIES IN EXCESS OF 200 
MILLION POUNDS.—If net removals for a period of 
12 consecutive months exceed 200 million pounds of 
cheese, but do not exceed 400 million pounds, the 
Secretary may reduce the purchase prices under 
paragraphs (1) and (2) of subsection (b) during the 
immediately following month by not more than 10 
cents per pound. 
(3) CHEESE INVENTORIES IN EXCESS OF 400 
MILLION POUNDS.—If net removals for a period of 
12 consecutive months exceed 400 million pounds of 
cheese, the Secretary may reduce the purchase 
prices under paragraphs (1) and (2) of subsection 
(b) during the immediately following month by not 
more than 20 cents per pound. 
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(4) BUTTER INVENTORIES IN EXCESS OF 450 
MILLION POUNDS.—If net removals for a period of 
12 consecutive months exceed 450 million pounds of 
butter, but do not exceed 650 million pounds, the 
Secretary may reduce the purchase price under sub-
section (b)(3) during the immediately following 
month by not more than 10 cents per pound. 
(5) BUTTER INVENTORIES IN EXCESS OF 650 
MILLION POUNDS.—If net removals for a period of 
12 consecutive months exceed 650 million pounds of 
butter, the Secretary may reduce the purchase price 
under subsection (b)(3) during the immediately fol-
lowing month by not more than 20 cents per pound. 
(6) NONFAT DRY MILK INVENTORIES IN EX-
CESS OF 600 MILLION POUNDS.—If net removals for 
a period of 12 consecutive months exceed 600 mil-
lion pounds of nonfat dry milk, but do not exceed 
800 million pounds, the Secretary may reduce the 
purchase price under subsection (b)(4) during the 
immediately following month by not more than 5 
cents per pound. 
(7) NONFAT DRY MILK INVENTORIES IN EX-
CESS OF 800 MILLION POUNDS.—If net removals for 
a period of 12 consecutive months exceed 800 mil-
lion pounds of nonfat dry milk, the Secretary may 
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reduce the purchase price under subsection (b)(4) 
during the immediately following month by not more 
than 10 cents per pound. 
(d) UNIFORM PURCHASE PRICE.—The prices that 
the Secretary pays for cheese, butter, or nonfat dry milk, 
respectively, under subsection (a) shall be uniform for all 
regions of the United States. 
(e) SALES FROM INVENTORIES.—In the case of each 
commodity specified in subsection (b) that is available for 
unrestricted use in inventories of the Commodity Credit 
Corporation, the Secretary may sell the commodity at the 
market prices prevailing for that commodity at the time 
of sale, except that the sale price may not be less than 
110 percent of the minimum purchase price specified in 
subsection (b) for that commodity. 
(f) NET REMOVALS DEFINED.—In this section, the 
term ‘‘net removals’’ means— 
(1) the sum of the quantity of a product de-
scribed in subsection (a) purchased by the Com-
modity Credit Corporation under this section and 
the quantity of such product exported under section 
153 of the Food Security Act of 1985 (15 U.S.C. 
713a–14); less 
(2) the amount of such product sold for unre-
stricted use by the Commodity Credit Corporation. 
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(g) COMMODITY CREDIT CORPORATION.—The Sec-
retary shall use the funds of the Commodity Credit Cor-
poration to carry out this section. 
SEC. 1402. DAIRY FORWARD PRICING PROGRAM. 
(a) PROGRAM REQUIRED.—The Secretary of Agri-
culture shall establish a program under which milk pro-
ducers and cooperative associations of producers are au-
thorized to voluntarily enter into forward price contracts 
with milk handlers. 
(b) MINIMUM MILK PRICE REQUIREMENTS.—Pay-
ments made by milk handlers to milk producers and coop-
erative associations of producers, and prices received by 
milk producers and cooperative associations, in accordance 
with the terms of a forward price contract authorized by 
subsection (a), shall be deemed to satisfy— 
(1) all uniform and minimum milk price re-
quirements of paragraphs (B) and (F) of subsection 
(5) of section 8c of the Agricultural Adjustment Act 
(7 U.S.C. 627), reenacted with amendments by the 
Agricultural Marketing Agreement Act of 1937; and 
(2) the total payment requirement of paragraph 
(C) of such subsection. 
(c) MILK COVERED BY PROGRAM.— 
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(1) COVERED MILK.—The program shall apply 
only with respect to the marketing of federally regu-
lated milk that— 
(A) is not classified as Class I milk or oth-
erwise intended for fluid use; and 
(B) is in the current of interstate or for-
eign commerce or directly burdens, obstructs, or 
affects interstate or foreign commerce in feder-
ally regulated milk. 
(2) RELATION
TO
CLASS
I
MILK.—To assist 
milk handlers in complying with the limitation in 
paragraph (1)(A) without having to segregate or 
otherwise individually track the source and disposi-
tion of milk, a milk handler may allocate milk re-
ceipts from producers, cooperatives, and other 
sources that are not subject to a forward contract to 
satisfy the handler’s obligations with regard to Class 
I milk usage. 
(d) VOLUNTARY PROGRAM.—A milk handler may not 
require participation in a forward pricing contract as a 
condition of the handler receiving milk from a producer 
or cooperative association of producers, and such producer 
or cooperative association may continue to have their milk 
priced under the order’s minimum payment provisions. 
The Secretary shall investigate complaints made by pro-
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ducers or cooperative associations of coercion by handlers 
to enter into forward contracts, and if the Secretary finds 
evidence of such coercion, the Secretary shall take appro-
priate action. 
(e) DURATION.—No forward price contract may be 
entered into under this program after September 30, 
2012, and no forward contract entered into under the pro-
gram may extend beyond September 30, 2015. 
SEC. 1403. DAIRY EXPORT INCENTIVE PROGRAM. 
(a) EXTENSION.—Subsection (a) of section 153 of 
the Food Security Act of 1985 (15 U.S.C. 713a–14) is 
amended by striking ‘‘2007’’ and inserting ‘‘2012’’. 
(b) COMPLIANCE WITH TRADE AGREEMENTS.—Sec-
tion 153 of the Food Security Act of 1985 (15 U.S.C. 
713a–14) is amended— 
(1) in subsection (c), by striking paragraph (3) 
and inserting the following new paragraph: 
‘‘(3) the maximum volume of dairy product ex-
ports allowable consistent with the obligations of the 
United States under the Uruguay Round Agree-
ments approved under section 101 of the Uruguay 
Round Agreements Act (19 U.S.C. 3511) is exported 
under the program each year (minus the volume sold 
under section 1163 of this Act (Public Law 99–198; 
7 U.S.C. 1731 note) during that year), except to the 
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extent that the export of such a volume under the 
program would, in the judgment of the Secretary, 
exceed the limitations on the value set forth in sub-
section (f); and’’; and. 
(2) in subsection (f), by striking paragraph (1) 
and inserting the following new paragraph: 
‘‘(1) FUNDS
AND
COMMODITIES.—Except as 
provided in paragraph (2), the Commodity Credit 
Corporation shall in each year use money and com-
modities for the program under this section in the 
maximum amount consistent with the obligations of 
the United States under the Uruguay Round Agree-
ments approved under section 101 of the Uruguay 
Round Agreements Act (19 U.S.C. 3511), minus the 
amount expended under section 1163 of this Act 
(Public Law 99–198; 7 U.S.C. 1731 note) during 
that year.’’. 
SEC. 1404. REVISION OF FEDERAL MARKETING ORDER 
AMENDMENT PROCEDURES. 
Subsection (17) of section 8c of the Agricultural Ad-
justment Act (7 U.S.C. 608c), reenacted with amendments 
by the Agricultural Marketing Agreement Act of 1937, is 
amended to read as follows: 
‘‘(17) PROVISIONS APPLICABLE TO AMENDMENTS.— 
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‘‘(A) APPLICABILITY
TO
AMENDMENTS.—The 
provisions of this section and section 8d, applicable 
to orders shall be applicable to amendments to or-
ders. 
‘‘(B) ADVANCE NOTICE OF HEARING.—Notice 
of a hearing upon a proposed amendment to any 
order issued pursuant to this section shall be given 
not less than 3 days before the date fixed for the 
hearing, and such notice shall be deemed to be due 
notice of the hearing. 
‘‘(C) PROMPT
RESPONSE
TO
REQUESTS
FOR 
AMENDMENT HEARINGS.—Not more than 30 days 
after receipt of a written request for an amendment 
hearing regarding a milk marketing order, the Sec-
retary shall— 
‘‘(i) issue a denial of the request; or 
‘‘(ii) issue notice of the hearing, which 
shall begin no more than 60 days, and conclude 
no more than 90 days, after receipt of the re-
quest. 
‘‘(D) SUBMISSION AND USE OF EVIDENCE.— 
The proponents of any amendment proposed to be 
made to a milk marketing order shall file with the 
Secretary all testimony and other evidence in sup-
port of the amendment, in written form, at least 7 
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business days before the date fixed for the hearing. 
The Secretary shall make such written testimony 
and other evidence available to interested members 
of the public. Subject to any evidentiary objections 
and cross examination of submitting witness, the 
written testimony and evidence shall be entered into 
evidence without being read at the hearing. 
‘‘(E) ISSUANCE OF DECISION.—The Secretary 
shall issue a recommended decision on a proposed 
amendment to a milk marketing order not later than 
90 days after the date set by the Administrative 
Law Judge for the submission of post-hearing pro-
posed findings and conclusions and written argu-
ments or briefs. The final decision shall be issued 
not later than 60 days after the date on which the 
recommended decision was issued. 
‘‘(F) AVOIDING DUPLICATION.—The Secretary 
shall not be required to call a hearing on any 
amendment proposed to be made to a milk mar-
keting order in response to an application for a 
hearing on such proposed amendment if the applica-
tion requesting the hearing is received by the Sec-
retary within 90 days after the date on which the 
Secretary has announced the decision on a pre-
viously proposed amendment to that order and the 
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two proposed amendments are essentially the 
same.’’. 
SEC. 1405. DAIRY INDEMNITY PROGRAM. 
Section 3 of Public Law 90–484 (7 U.S.C. 450l) is 
amended by striking ‘‘2007’’ and inserting ‘‘2012’’. 
SEC. 1406. EXTENSION OF MILK INCOME LOSS CONTRACT 
PROGRAM. 
Section 1502(c)(3)(B) of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 7982(c)(3)(B)), 
as amended by section 9006(a) of the U.S. Troop Readi-
ness, Veterans’ Care, Katrina Recovery, and Iraq Ac-
countability Appropriations Act, 2007 (Public Law 110– 
28, 121 Stat. 217), is amended by striking ‘‘2007’’ and 
inserting ‘‘2012’’. 
SEC. 1407. DAIRY PROMOTION AND RESEARCH PROGRAM. 
(a) EXTENSION OF PROMOTION AUTHORITY.—Sec-
tion 113(e)(2) of the Dairy Production Stabilization Act 
of 1983 (7 U.S.C. 4504(e)(2)) is amended by striking 
‘‘2007’’ and inserting ‘‘2012’’. 
(b) DEFINITION
OF UNITED STATES
FOR PRO-
MOTION PROGRAM.—Section 111 of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4502) is amended— 
(1) by striking subsection (l) and inserting the 
following new subsection: 
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‘‘(l) the term ‘United States’, when used in a geo-
graphical sense, means all of the States, the District of 
Columbia, and the Commonwealth of Puerto Rico;’’; and 
(2) in subsection (m), by striking ‘‘(as defined 
in subsection (l))’’. 
(c) DEFINITION OF UNITED STATES FOR RESEARCH 
PROGRAM.—Section 130 of the Dairy Production Sta-
bilization Act of 1983 (7 U.S.C. 4531)) is amended by 
striking paragraph (12) and inserting the following new 
paragraph: 
‘‘(12) the term ‘United States’, when used in a 
geographical sense, means all of the States, the Dis-
trict of Columbia, and the Commonwealth of Puerto 
Rico.’’. 
(d) REFUND OF ASSESSMENTS ON IMPORTED DAIRY 
PRODUCTS.—Section 113(g) of the Dairy Production Sta-
bilization Act of 1983 (7 U.S.C. 4504(g)) is amended by 
adding at the end the following: 
‘‘(7) REFUND OF ASSESSMENTS ON CERTAIN 
IMPORTED PRODUCTS.— 
‘‘(A) IN GENERAL.—An importer is enti-
tled to a refund of any assessment paid under 
this subsection on imported dairy products im-
ported under a contract entered into prior to 
July 26, 2007. 
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‘‘(B) EXPIRATION.—Refunds under para-
graph (A) shall expire one year after the date 
of the enactment of the Farm, Nutrition, and 
Bioenergy Act of 2007.’’. 
SEC. 1408. REPORT ON DEPARTMENT OF AGRICULTURE RE-
PORTING PROCEDURES FOR NONFAT DRY 
MILK. 
Not later than 90 days after the date of the enact-
ment of this Act, the Secretary of Agriculture shall submit 
to Congress a report regarding Department of Agriculture 
reporting procedures for nonfat dry milk and the impact 
of these procedures on Federal milk marketing order min-
imum prices during the period beginning on July 1, 2006, 
and ending on the date of the enactment of this Act. 
SEC. 1409. FEDERAL MILK MARKETING ORDER REVIEW 
COMMISSION. 
(a) ESTABLISHMENT.—Subject to the availability of 
appropriations to carry out this section, the Secretary of 
Agriculture shall establish a commission to be known as 
the ‘‘Federal Milk Marketing Order Review Commission’’, 
in this section referred to as the ‘‘commission’’, which 
shall conduct a comprehensive review and evaluation of— 
(1) the current Federal milk marketing order 
system; and 
(2) non-Federal milk marketing order systems. 
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(b) ELEMENTS OF REVIEW AND EVALUATION.—As 
part of the review and evaluation under subsection (a), 
the commission shall consider legislative and regulatory 
options for— 
(1) ensuring that the competitiveness of dairy 
products with other competing products in the mar-
ketplace is preserved and enhanced; 
(2) enhancing the competitiveness of American 
dairy producers in world markets; 
(3) increasing the responsiveness of the Federal 
milk marketing order system to market forces; 
(4) streamlining and expediting the process by 
which amendments to Federal milk market orders 
are adopted; 
(5) simplifying the Federal milk marketing 
order system; 
(6) evaluating whether the Federal milk mar-
keting order system, established during the Great 
Depression, continues to serve the interests of the 
public, dairy processors, and dairy farmers; 
(7) evaluating whether Federal milk marketing 
orders are operating in a manner to minimize costs 
to taxpayers and consumers; and 
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(8) evaluating the nutritional composition of 
milk, including the potential benefits and costs of 
adjusting the milk content standards. 
(c) MEMBERSHIP.— 
(1) COMPOSITION.—The commission shall con-
sist of 18 members. 
(2) MEMBERS.—As soon as practicable after 
the date on which funds are first made available to 
carry out this section, commission members shall be 
appointed as follows: 
(A) Two members appointed by the Chair-
man of the Committee on Agriculture of the 
House of Representatives, in consultation with 
the ranking member of the Committee on Agri-
culture of the House of Representatives. 
(B) Two members appointed by the Chair-
man of the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate, in consulta-
tion with the ranking member of the Committee 
on Agriculture, Nutrition and Forestry of the 
Senate. 
(C) Fourteen members appointed by the 
Secretary of Agriculture. 
(3) SPECIAL APPOINTMENT REQUIREMENTS.— 
In the case of the members to be appointed under 
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paragraph (2)(C), the Secretary shall comply with 
the following requirements: 
(A) At least one member shall represent a 
national consumer organization. 
(B) At least four members shall represent 
land-grant universities or ASCARR institutions 
with accredited dairy economic programs, with 
two of these members being experts in the field 
of economics. 
(C) At least one member shall represent 
the food and beverage retail sector. 
(D) Four dairy producer and four dairy 
processors, appointed so as to balance geo-
graphical distribution of milk production and 
dairy processing, reflect all segments of dairy 
processing, and represent all regions of the 
United States equitably, including States that 
operate outside of a Federal milk marketing 
order. 
(4) CHAIR.—The commission shall elect one of 
its appointed members to serve as chairperson for 
the duration of the commission’s proceedings. 
(5) VACANCY.—Any vacancy occurring before 
the termination of the commission shall be filled in 
the same manner as the original appointment. 
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(6) COMPENSATION.—Members of the commis-
sion shall serve without compensation, but shall be 
reimbursed by the Secretary of Agriculture from ex-
isting budget authority for necessary and reasonable 
expenses incurred in the performance of the duties 
of the commission. 
(d) REPORT.—Not later than two years after the date 
of the first meeting of the commission, the commission 
shall submit to the Secretary of Agriculture and Congress 
a report setting forth the results of the review and evalua-
tion conducted under this section, including such rec-
ommendations regarding the legislative and regulatory op-
tions considered under subsection (b) as the commission 
considers to be appropriate. The report findings shall re-
flect, to the extent practicable, a consensus opinion of the 
commission members, but the report may include majority 
and minority findings regarding those matters for which 
consensus was not reached. 
(e) ADVISORY NATURE.—The commission is wholly 
advisory in nature, and the recommendations of the com-
mission are non-binding. 
(f) NO EFFECT ON EXISTING PROGRAMS.—The Sec-
retary shall not allow the existence of the commission to 
impede, delay, or otherwise affect any decision making 
process of the Department of Agriculture, including any 
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rulemaking procedures planned, proposed, or near comple-
tion. 
(g) ADMINISTRATIVE ASSISTANCE.—The Secretary 
shall provide administrative support to the commission, 
and expend such funds as necessary from existing budget 
authority to carry out this responsibility. 
(h) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
(i) TERMINATION.—The commission shall terminate 
immediately after submission of the report under sub-
section (d). 
Subtitle E—Administration 
SEC. 1501. ADMINISTRATION GENERALLY. 
(a) USE OF COMMODITY CREDIT CORPORATION.— 
The Secretary shall use the funds, facilities, and authori-
ties of the Commodity Credit Corporation to carry out this 
title. 
(b) DETERMINATIONS
BY SECRETARY.—A deter-
mination made by the Secretary under this title shall be 
final and conclusive. 
(c) REGULATIONS.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary 
and the Commodity Credit Corporation, as appro-
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priate, shall promulgate such regulations as are nec-
essary to implement this title. 
(2) PROCEDURE.—The promulgation of the reg-
ulations and administration of this title shall be 
made without regard to— 
(A) chapter 35 of title 44, United States 
Code (commonly known as the ‘‘Paperwork Re-
duction Act’’); 
(B) the Statement of Policy of the Sec-
retary of Agriculture effective July 24, 1971 
(36 Fed. Reg. 13804), relating to notices of 
proposed rulemaking and public participation in 
rulemaking; and 
(C) the notice and comment provisions of 
section 553 of title 5, United States Code. 
(3) CONGRESSIONAL REVIEW OF AGENCY RULE-
MAKING.—In carrying out this subsection, the Sec-
retary shall use the authority provided under section 
808 of title 5, United States Code. 
(d) ADJUSTMENT AUTHORITY RELATED TO TRADE 
AGREEMENTS COMPLIANCE.— 
(1) 
REQUIRED
DETERMINATION; 
ADJUST-
MENT.—If the Secretary determines that expendi-
tures under subtitles A through E that are subject 
to the total allowable domestic support levels under 
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the Uruguay Round Agreements (as defined in sec-
tion 2 of the Uruguay Round Agreements Act (19 
U.S.C. 3501)), as in effect on the date of enactment 
of this Act, will exceed such allowable levels for any 
applicable reporting period, the Secretary shall, to 
the maximum extent practicable, make adjustments 
in the amount of such expenditures during that pe-
riod to ensure that such expenditures do not exceed 
such allowable levels. 
(2) CONGRESSIONAL
NOTIFICATION.—Before 
making any adjustment under paragraph (1), the 
Secretary shall submit to the Committee on Agri-
culture of the House of Representatives or the Com-
mittee on Agriculture, Nutrition, and Forestry of 
the Senate a report describing the determination 
made under that paragraph and the extent of the 
adjustment to be made. 
SEC. 1502. SUSPENSION OF PERMANENT PRICE SUPPORT 
AUTHORITY. 
(a) AGRICULTURAL ADJUSTMENT ACT OF 1938.— 
The following provisions of the Agricultural Adjustment 
Act of 1938 shall not be applicable to the 2008 through 
2012 crops of covered commodities, peanuts, and sugar 
and shall not be applicable to milk during the period be-
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ginning on the date of enactment of this Act through De-
cember 31, 2012: 
(1) Parts II through V of subtitle B of title III 
(7 U.S.C. 1326 et seq.). 
(2) In the case of upland cotton, section 377 (7 
U.S.C. 1377). 
(3) Subtitle D of title III (7 U.S.C. 1379a et 
seq.). 
(4) Title IV (7 U.S.C. 1401 et seq.). 
(b) AGRICULTURAL ACT OF 1949.—The following 
provisions of the Agricultural Act of 1949 shall not be ap-
plicable to the 2008 through 2012 crops of covered com-
modities, peanuts, and sugar and shall not be applicable 
to milk during the period beginning on the date of enact-
ment of this Act and through December 31, 2012: 
(1) Section 101 (7 U.S.C. 1441). 
(2) Section 103(a) (7 U.S.C. 1444(a)). 
(3) Section 105 (7 U.S.C. 1444b). 
(4) Section 107 (7 U.S.C. 1445a). 
(5) Section 110 (7 U.S.C. 1445e). 
(6) Section 112 (7 U.S.C. 1445g). 
(7) Section 115 (7 U.S.C. 1445k). 
(8) Section 201 (7 U.S.C. 1446). 
(9) Title III (7 U.S.C. 1447 et seq.). 
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(10) Title IV (7 U.S.C. 1421 et seq.), other 
than sections 404, 412, and 416 (7 U.S.C. 1424, 
1429, and 1431). 
(11) Title V (7 U.S.C. 1461 et seq.). 
(12) Title VI (7 U.S.C. 1471 et seq.). 
(c) SUSPENSION OF CERTAIN QUOTA PROVISIONS.— 
The joint resolution entitled ‘‘A joint resolution relating 
to corn and wheat marketing quotas under the Agricul-
tural Adjustment Act of 1938, as amended’’, approved 
May 26, 1941 (7 U.S.C. 1330 and 1340), shall not be 
applicable to the crops of wheat planted for harvest in the 
calendar years 2008 through 2012. 
SEC. 1503. PAYMENT LIMITATIONS. 
(a) EXTENSION AND REVISION OF LIMITATIONS.— 
(1) EXTENSION.—Sections 1001 and 1001C(a) 
of the Food Security Act of 1985 (7 U.S.C. 1308, 
1308–3(a)) are amended by striking ‘‘Farm Security 
and Rural Investment Act of 2002’’ each place it ap-
pears (other than in subsection (d)(1) of section 
1001 of such Act) and inserting ‘‘Farm, Nutrition, 
and Bioenergy Act of 2007’’. 
(2) COMBINATION OF LIMITS.—Section 1001 of 
the Food Security Act of 1985 (7 U.S.C. 1308) is 
amended by striking subsections (b) and (c) and in-
serting the following new subsections: 
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‘‘(b) LIMITATION ON DIRECT AND COUNTER-CYCLI-
CAL PAYMENTS
FOR COVERED COMMODITIES (OTHER 
THAN PEANUTS).— 
‘‘(1) DIRECT PAYMENTS.—The total amount of 
direct payments received, directly or indirectly, by a 
person or any legal entity (except a joint venture or 
a general partnership) in any crop year under sub-
title A of title I of the Farm, Nutrition, and Bio-
energy Act of 2007 for 1 or more covered commod-
ities (except for peanuts) may not exceed $60,000. 
‘‘(2) 
COUNTER-CYCLICAL
PAYMENTS.—The 
total amount of counter-cyclical payments received, 
directly or indirectly, by a person or any legal entity 
(except a joint venture or a general partnership in 
any crop year under subtitle A of title I of the 
Farm, Nutrition, and Bioenergy Act of 2007 for one 
or more covered commodities (except for peanuts) 
may not exceed $65,000. 
‘‘(c) LIMITATION ON DIRECT AND COUNTER-CYCLI-
CAL PAYMENTS FOR PEANUTS.— 
‘‘(1) DIRECT PAYMENTS.—The total amount of 
direct payments received, directly or indirectly, by a 
person or any legal entity (except a joint venture or 
a general partnership) in any crop year under sub-
title A of title I of the Farm, Nutrition, and Bio-
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energy Act of 2007 for peanuts may not exceed 
$60,000. 
‘‘(2) 
COUNTER-CYCLICAL
PAYMENTS.—The 
total amount of counter-cyclical payments received, 
directly or indirectly, by a person or any legal entity 
(except a joint venture or a general partnership in 
any crop year under subtitle A of title I of the 
Farm, Nutrition, and Bioenergy Act of 2007 for 
peanuts may not exceed $65,000.’’. 
(b) DIRECT ATTRIBUTION.—Section 1001 of the 
Food Security Act of 1985 (7 U.S.C. 1308) is amended— 
(1) in subsection (a)— 
(A) by redesignating paragraphs (2) and 
(3) as paragraphs (4) and (5), respectively; and 
(B) by inserting after paragraph (1) the 
following new paragraphs: 
‘‘(2) LEGAL ENTITY.—The term ‘legal entity’ 
means an entity that is created under Federal or 
State law and that— 
‘‘(A) owns land or an agricultural com-
modity; or 
‘‘(B) produces an agricultural commodity. 
‘‘(3) PERSON.—The term ‘person’ means a nat-
ural person, and does not include a legal entity.’’; 
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(2) by striking subsections (d) through (e) and 
inserting the following new subsections: 
‘‘(d) ATTRIBUTION OF PAYMENTS.— 
‘‘(1) IN
GENERAL.—In implementing sub-
sections (b) and (c), the Secretary shall issue such 
regulations as are necessary to ensure that the total 
amount of payments are attributed to a person by 
taking into account the direct and indirect owner-
ship interests of the person in a legal entity that is 
eligible to receive such payments. 
‘‘(2) PAYMENTS TO A PERSON.—Every payment 
made directly to a person shall be combined with the 
person’s pro rata interest in payments received by a 
legal entity in which the person has a direct or indi-
rect ownership interest. 
‘‘(3) PAYMENTS TO A LEGAL ENTITY.— 
‘‘(A) IN GENERAL.—Every payment made 
to a legal entity shall be attributed to those per-
sons who have a direct or indirect ownership in-
terest in the legal entity. 
‘‘(B) ATTRIBUTION OF PAYMENTS.— 
‘‘(i) PAYMENT
LIMITS.—Except as 
provided in clause (ii), payments made to 
a legal entity shall not exceed the amounts 
specified in subsections (b) and (c). 
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‘‘(ii) EXCEPTION.—Payments made to 
a joint venture or a general partnership 
shall not exceed, for each payment speci-
fied in subsections (b) and (c), the amount 
determined by multiplying the maximum 
payment amount specified in subsections 
(b) and (c) by the number of persons and 
legal entities (other than joint ventures 
and general partnerships) that comprise 
the ownership of the joint venture or gen-
eral partnership. 
‘‘(4) FOUR LEVELS OF ATTRIBUTION FOR EM-
BEDDED ENTITIES.— 
‘‘(A) IN
GENERAL.—Attribution of pay-
ments made to legal entities shall be traced 
through four levels of ownership in entities. 
‘‘(B) FIRST LEVEL.—Any payments made 
to a legal entity (a first-tier entity) that is 
owned in whole or in part by a person shall be 
attributed to the person in an amount that rep-
resents the direct ownership in the first-tier en-
tity by the person. 
‘‘(C) 
SECOND
LEVEL.—Any 
payments 
made to a first-tier entity that is owned in 
whole or in part by another legal entity (a sec-
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ond-tier entity) shall be attributed to the sec-
ond-tier entity in proportion to the second-tier 
entity’s ownership in the first-tier entity. If the 
second-tier entity is owned in whole or in part 
by a person, the amount of the payment made 
to the first-tier entity shall be attributed to the 
person in the amount that represents the indi-
rect ownership in the first-tier entity by the 
person. 
‘‘(D) THIRD AND FOURTH LEVELS.—The 
Secretary shall attribute payments at the third 
and fourth tiers of ownership in the same man-
ner as specified in subparagraph (C) unless the 
fourth-tier of ownership is that of a fourth-tier 
entity and not that of a person, in which case 
the Secretary shall reduce the amount of the 
payment to be made to the first-tier entity in 
the amount that represents the indirect owner-
ship in the first-tier entity by the fourth-tier en-
tity. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) MINOR CHILDREN.—Payments received by 
a child under the age of 18 shall be attributed to the 
child’s parents, except that the Secretary shall issue 
regulations which provide the conditions under which 
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payments received by a child under the age of 18 
will not be attributed to the child’s parents. 
‘‘(2) MARKETING COOPERATIVES.—Subsections 
(b) and (c) shall not apply to a cooperative associa-
tion of producers with respect to commodities pro-
duced by its members which are marketed by such 
association on behalf of its members but shall apply 
to such producers as persons. 
‘‘(3) TRUSTS AND ESTATES.— 
‘‘(A) IN GENERAL.—With respect to irrev-
ocable trusts and estates, the Secretary shall 
administer the provisions of this subtitle in 
such manner as the Secretary determines will 
ensure that fair and equitable treatment of the 
beneficiaries of such trusts and estates. 
‘‘(B) IRREVOCABLE TRUST.—In order for 
a trust to be considered an irrevocable trust, 
the terms of the trust agreement must not 
allow for modification or termination of the 
trust by the grantor, allow for the grantor to 
have any future, contingent, or remainder inter-
est in the corpus of the trust, or provide for the 
transfer of the corpus of the trust to the re-
mainder beneficiary in less than 20 years from 
the date the trust is established except in cases 
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where the transfer is contingent on the remain-
der beneficiary achieving at least the age of ma-
jority or is contingent on the death of the 
grantor or income beneficiary. 
‘‘(C) REVOCABLE
TRUST.—A revocable 
trust shall be considered to be the same person 
as the grantor of the trust. 
‘‘(4) CASH RENT TENANTS.— 
‘‘(A) DEFINITION.—In this paragraph, the 
term ‘cash rent tenant’ means a person or legal 
entity that rents land— 
‘‘(i) for cash; or 
‘‘(ii) for a crop share guaranteed as to 
the amount of the commodity to be paid in 
rent. 
‘‘(B) RESTRICTION.—A cash rent tenant 
who makes a significant contribution of active 
personal management, but not of personal 
labor, with respect to a farming operation is eli-
gible to receive a payment described in sub-
section (b) only if the tenant makes a signifi-
cant contribution of equipment used in the 
farming operation. 
‘‘(5) FEDERAL AGENCIES.— 
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‘‘(A) IN GENERAL.—Federal agencies shall 
not be eligible to receive any payment described 
in subsection (b) or (c). 
‘‘(B) RENTS LAND.—A person or legal en-
tity that rents land owned by a Federal agency 
may receive such payments. 
‘‘(6) STATE AND LOCAL GOVERNMENTS.— 
‘‘(A) GOVERNMENTS INELIGIBLE.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in subparagraphs (B) and (C), State 
and local governments and political sub-
divisions and agencies of such govern-
ments, shall not be eligible to receive pay-
ments described in subsections (b) and (c). 
‘‘(ii) TENANTS.—A person or legal en-
tity that rents land owned by a State or 
local government or a political subdivision 
or agency of such government, may receive 
payments described in subsections (b) and 
(c) if they otherwise meet all applicable cri-
teria. 
‘‘(B) EXCEPTION.— 
‘‘(i) IN GENERAL.—Within the limita-
tion described in clause (ii), a State and 
the political subdivisions and agencies of 
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such governments, may receive payments 
described in subsections (b) and (c), if the 
State or a political subdivision or agency of 
such government— 
‘‘(I) is the producer of all crops 
produced on a farm; and 
‘‘(II) the proceeds from the crop 
production are used to maintain a 
public school. 
‘‘(ii) LIMITATION.—For each State, 
the total amount of payments described in 
subsections (b) and (c) that are received 
collectively by the State and all political 
subdivisions or agencies of such govern-
ments shall not exceed the amounts that 
one legal entity may receive in one year as 
specified in subsections (b) and (c). 
‘‘(C) SHARE LEASES.—A State and the po-
litical subdivisions and agencies of such govern-
ments may, without regard to the provisions of 
subparagraph (B), receive payments described 
in subsections (b) and (c) if— 
‘‘(i) the payments are received with 
respect to land that is share leased to a 
private party; 
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‘‘(ii) the lease was in effect on the 
date of enactment of the Farm, Nutrition, 
and Bioenergy Act of 2007; and 
‘‘(iii) the land is used to maintain a 
public school. 
‘‘(7) CHANGES IN FARMING OPERATIONS.—In 
the administration of this subtitle, the Secretary 
may not approve any change in a farming operation 
that otherwise will increase the number of persons to 
which the limitations under this section are applied 
unless the Secretary determines that the change is 
bona fide and substantive. The addition of a family 
member to a farming operation under the criteria 
set out in section 1001A shall be considered a bona 
fide and substantive change in the farming oper-
ation. 
‘‘(8) DENIAL OF PROGRAM BENEFITS.— 
‘‘(A) TWO YEAR DENIAL OF PAYMENT.—A 
person or legal entity shall be ineligible to re-
ceive payments specified in subsections (b) and 
(c) for that year, and the succeeding crop year, 
in which the Secretary determines that the per-
son or entity engaged in an activity in which 
the primary purpose of the activity was to avoid 
the application of the provisions of this subtitle 
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to the person, legal entity or any other person 
or legal entity. 
‘‘(B) EXTENDED
INELIGIBILITY.—If the 
Secretary determines that a person or legal en-
tity, for their benefit or the benefit of any other 
person or legal entity, has knowingly engaged 
in, or aided in the creation of fraudulent docu-
ments, failed to disclose material information 
relevant to the administration of this subtitle 
requested by the Secretary, or committed other 
equally serious actions as identified in regula-
tions issued by the Secretary, the Secretary 
may for a period not to exceed five crop years 
deny the issuance of payments to the person or 
legal entity. 
‘‘(C) PRO RATA DENIAL.—Payments other-
wise owed to a person or legal entity covered by 
subparagraphs (A) or (B) shall be denied in a 
pro rata manner based upon the ownership in-
terest of the person or legal entity in a farm, 
and payments otherwise payable to the person 
or legal entity who is a cash rent tenant on a 
farm owned or under the control of such person 
or legal entity shall be denied. 
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‘‘(9) DEATH OF OWNER.—In the event of a 
transfer of any ownership interest in land or a com-
modity as the result of the death of a program par-
ticipant, the new owner of such land or commodity 
may, if such person is otherwise eligible to partici-
pate in the applicable program, succeed to the prior 
owner’s contract and receive payments subject to 
this section without regard to the amount of pay-
ments received by the new owner. Payments made 
pursuant to this subsection shall not exceed the 
amount to which the previous owner was entitled to 
receive under the terms of the contract at the time 
of the death of the prior owner.’’. 
(c) REPEAL
OF
THREE-ENTITY
RULE.—Section 
1001A of the Food Security Act of 1985 (7 U.S.C. 1308– 
1) is amended— 
(1) in the section heading, by striking ‘‘PRE-
VENTION OF CREATION OF ENTITIES TO QUAL-
IFY AS SEPARATE PERSONS’’and inserting ‘‘NO-
TIFICATION OF INTERESTS’’; and 
(2) by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) NOTIFICATION
OF INTERESTS.—To facilitate 
administration of sections 1001 and this section, each en-
tity or person receiving payments described in subsections 
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(b) and (c) of section 1001 as a separate person shall pro-
vide to the Secretary of Agriculture, at such times and 
in such manner as prescribed by the Secretary, the name 
and social security number of each individual, or the name 
and taxpayer identification number of each entity, that 
holds or acquires an ownership interest in such separate 
person and shall provide such information regarding each 
entity in which such separate person holds an ownership 
interest.’’. 
(d) 
AMENDMENT
FOR
CONSISTENCY.—Section 
1001A of the Food Security Act of 1985 (7 U.S.C. 1308– 
1) is amended by striking subsection (b) and inserting the 
following new subsections: 
‘‘(b) ACTIVELY ENGAGED.— 
‘‘(1) IN GENERAL.—To be eligible to receive a 
payment described in subsections (b) and (c) of sec-
tion 1001, a person or legal entity must be actively 
engaged in farming as provided in this subsection or 
subsection (c). 
‘‘(2) CLASSES ACTIVELY ENGAGED.—Except as 
provided in subsections (c) and (d)— 
‘‘(A) a person, including a person partici-
pating in a farming operation as a partner in 
a general partnership, a participant in a joint 
venture, a grantor of a revocable trust, or a 
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participant in a similar entity as determined by 
the secretary, shall be considered to be actively 
engaged in farming with respect to a farm oper-
ation if— 
‘‘(i) the person makes a significant 
contribution (based on the total value of 
the farming operation) to the farming op-
eration of— 
‘‘(I) capital, equipment, or land; 
and 
‘‘(II) personal labor or active per-
sonal management; 
‘‘(ii) the person’s share of the profits 
or losses from the farming operation is 
commensurate with the contributions of 
the person to the farming operation; and 
‘‘(iii) the contributions of the person 
are at risk; 
‘‘(B) a legal entity that is a corporation, 
joint stock company, association, limited part-
nership, charitable organization, or other simi-
lar entity determined by the Secretary, includ-
ing any such entity participating in the farming 
operation as a partner in a general partnership, 
a participant in a joint venture, a grantor of a 
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revocable trust, or as a participant in a similar 
entity as determined by the Secretary shall be 
considered as actively engaged in farming with 
respect to a farming operation if— 
‘‘(i) the entity separately makes a sig-
nificant contribution (based on the total 
value of the farming operation) of capital, 
equipment, or land; 
‘‘(ii) the stockholders or members col-
lectively make a significant contribution of 
personal labor or active personal manage-
ment to the operation; and 
‘‘(iii) 
the 
standards 
provided 
in 
clauses (ii) and (iii) of paragraph (A), as 
applied to the entity, are met by the entity; 
‘‘(C) if a legal entity that is a general part-
nership, joint venture, or similar entity, as de-
termined by the Secretary, separately makes a 
significant contribution (based on the total 
value of the farming operation involved) of cap-
ital, equipment, or land, and the standards pro-
vided in clauses (ii) and (iii) of paragraph (A), 
as applied to the entity, are met by the entity, 
the partners or members making a significant 
contribution of personal labor or active personal 
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management shall be considered to be actively 
engaged in farming with respect to the farming 
operation involved; and 
‘‘(D) in making determinations under this 
subsection regarding equipment and personal 
labor, the Secretary shall take into consider-
ation the equipment and personal labor nor-
mally and customarily provided by farm opera-
tors in the area involved to produce program 
crops. 
‘‘(c) SPECIAL CLASSES ACTIVELY ENGAGED.— 
‘‘(1) LANDOWNER.—A person or legal entity 
that is a landowner contributing the owned land to 
a farming operation shall be considered to be ac-
tively engaged in farming with respect to the farm-
ing operation if the landowner receives rent or in-
come for such use of the land based on the land’s 
production or the operation’s operating results, and 
the person or legal entity meets the standard pro-
vided in clauses (ii) and (iii) of subsection (b)(2)(A). 
‘‘(2) ADULT FAMILY MEMBER.—With respect to 
a farming operation when a majority of the partici-
pants are family members, an adult family member 
shall be considered to be actively engaged in farming 
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with respect to the farming operation if the per-
son— 
‘‘(A) makes a significant contribution, 
based on the total value of the farming oper-
ation, of active personal management or per-
sonal labor; and 
‘‘(B) such contribution meets the stand-
ards provided in clauses (ii) and (iii) of sub-
section (b)(2)(A). 
‘‘(3) SHARECROPPER.—A sharecropper who 
makes a significant contribution of personal labor to 
a farming operation shall be considered to be ac-
tively engaged in farming with respect to the farm-
ing operation if such contribution meets the stand-
ards provided in clauses (ii) and (iii) of subsection 
(b)(2)(A). 
‘‘(4) GROWERS
OF
HYBRID
SEED.—In deter-
mining whether a person or legal entity growing hy-
brid seed under contract shall be considered to be 
actively engaged in farming, the Secretary shall not 
take into consideration the existence of a hybrid seed 
contract. 
‘‘(5) CUSTOM FARMING SERVICES.—A person or 
legal entity receiving custom farming services will be 
considered separately eligible for payment limitation 
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purposes if such person or legal entity is actively en-
gaged in farming based on subsection (b)(2) or 
paragraphs (1) through (5) of this subsection. No 
other rules with respect to custom farming shall 
apply in making a determination under this section. 
‘‘(6) SPOUSE.—Where one spouse is determined 
to be actively engaged, the other spouse shall be de-
termined to have met the requirements of subclause 
(II) of subsection (b)(2)(A)(i) of this section. 
‘‘(d) CLASSES NOT ACTIVELY ENGAGED.— 
‘‘(1) CASH RENT LANDLORD.—A landlord con-
tributing land to a farming operation shall not be 
considered to be actively engaged in farming with re-
spect to the farming operation if the landlord re-
ceives cash rent, or a crop share guaranteed as to 
the amount of the commodity to be paid in rent, for 
such use of the land. 
‘‘(2) OTHER PERSONS.—Any other person de-
termined by the Secretary as failing to meet the 
standards set out in subsections (b)(2) and (c) shall 
not be considered to be actively engaged in farming 
with respect to a farming operation.’’. 
(e) 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 
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apply with respect to the 2007 crop of any covered com-
modity. 
SEC. 1504. ADJUSTED GROSS INCOME LIMITATION. 
(a) EXTENSION OF ADJUSTED GROSS INCOME LIMI-
TATION.—Section 1001D of the Food Security Act of 
1985 (7 U.S.C. 1308–3a) is amended— 
(1) in subsection (b)(2), by striking ‘‘Farm Se-
curity and Rural Investment Act of 2002’’ each 
place it appears and inserting ‘‘Farm, Nutrition, 
and Bioenergy Act of 2007’’; and 
(2) in subsection (e), by striking ‘‘2007’’ and 
inserting ‘‘2012’’. 
(b) 
MODIFICATION
OF
LIMITATION.—Section 
1001D(b) of the Food Security Act of 1985 (7 U.S.C. 
1308–3a(b)) is amended— 
(1) by striking paragraph (1) and inserting the 
following new paragraph: 
‘‘(1) CAPS.— 
‘‘(A) UPPER LIMIT.—Notwithstanding any 
other provision of law, an individual or entity 
shall not be eligible to receive any benefit de-
scribed in paragraph (2) during a crop year if 
the average adjusted gross income of the indi-
vidual or entity exceeds $1,000,000. 
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‘‘(B) PRODUCER
EXEMPTION.—Notwith-
standing any other provision of law, an indi-
vidual or entity shall not be eligible to receive 
any benefit described in paragraph (2) during a 
crop year if the average adjusted gross income 
of the individual or entity exceeds $500,000, 
unless not less than 66.66 percent of the aver-
age adjusted gross income of the individual or 
entity is derived from farming, ranching, or for-
estry operations, as determined by the Sec-
retary.’’; 
(2) in paragraph (2)(A), by striking ‘‘or C’’; 
and 
(3) by adding at the end the following new 
paragraph: 
‘‘(3) INCOME DERIVED FROM FARMING, RANCH-
ING
OR
FORESTRY
OPERATIONS.—In determining 
what portion of the average adjusted gross income of 
an individual or entity is derived from farming, 
ranching, or forestry operations, the Secretary shall 
include income derived from the following: 
‘‘(A) The production of crops, livestock, or 
unfinished raw forestry products. 
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‘‘(B) The sale, including the sale of ease-
ments and development rights, of farm, ranch, 
or forestry land or water rights. 
‘‘(C) The sale, but not as a dealer, of 
equipment purchased to conduct farm, ranch, 
or forestry operations when the equipment is 
otherwise subject to depreciation expense. 
‘‘(D) The rental of land used for farming, 
ranching, or forestry operations. 
‘‘(E) The provision of production inputs 
and services to farmers, ranchers, and foresters. 
‘‘(F) The processing, storing, and trans-
porting of farm, ranch, and forestry commod-
ities. 
‘‘(G) The sale of land that has been used 
for agriculture.’’. 
SEC. 1505. ADJUSTMENTS OF LOANS. 
Section 162 of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7282) is amended— 
(1) in subsection (a), by inserting ‘‘(except for 
cotton and long grain, medium grain, and short 
grain rice)’’ after ‘‘commodity’’; 
(2) in subsection (b), by striking ‘‘Farm Secu-
rity and Rural Investment Act of 2002’’ and insert-
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ing ‘‘Farm, Nutrition, and Bioenergy Act of 2007’’; 
and 
(3) by adding at the end the following new sub-
sections: 
‘‘(d) ADJUSTMENT IN LOAN RATE FOR COTTON.— 
‘‘(1) ADJUSTMENT AUTHORITY.—The Secretary 
may make appropriate adjustments in the loan rate 
for cotton for differences in quality factors. 
‘‘(2) REVISIONS
TO
QUALITY
ADJUSTMENTS 
FOR UPLAND COTTON.— 
‘‘(A) REVISION.—Within 180 days after 
the date of the enactment of the Farm, Nutri-
tion, and Bioenergy Act of 2007, the Secretary, 
after consultation with the private sector as 
provided in paragraph (3), shall implement revi-
sions in the administration of the marketing as-
sistance loan program for upland cotton to 
more accurately and efficiently reflect market 
values for upland cotton. 
‘‘(B) MANDATORY REVISIONS.—The revi-
sions required under subparagraph (A) shall in-
clude the following: 
‘‘(i) The elimination or adjustment of 
warehouse location differentials to reflect 
market conditions. 
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‘‘(ii) The establishment of differentials 
for the various quality factors and staple 
lengths of cotton based on a three-year, 
weighted moving average of the weighted 
designated spot market regions as deter-
mined by regional production. 
‘‘(iii) The elimination of any artificial 
split in the premium or discount between 
upland cotton with a 32 or 33 staple 
length due to micronaire; 
‘‘(iv) A mechanism to ensure that no 
premium or discount is established that ex-
ceeds the premium or discount associated 
with a leaf grade that is one better than 
the applicable color grade. 
‘‘(C) DISCRETIONARY REVISIONS.—The re-
visions under subparagraph (A) may include, at 
a minimum, the following: 
‘‘(i) The use of non-spot market price 
data, in addition to spot market price data, 
that would enhance the accuracy of the 
price information used in determining 
quality adjustments under this subsection. 
‘‘(ii) Adjustments in the premiums or 
discounts associated with upland cotton 
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with a staple length of 33 or above due to 
micronaire with the goal of eliminating any 
unnecessary artificial splits in the calcula-
tions of such premiums or discounts. 
‘‘(iii) Such other adjustments deter-
mined appropriate by the Secretary, after 
consultations conducted in accordance with 
paragraph (3). 
‘‘(3) CONSULTATION WITH PRIVATE SECTOR.— 
‘‘(A) PRIOR TO REVISION.—Prior to imple-
menting any revisions to the administration of 
the marketing assistance loan program for up-
land cotton, the Secretary should endeavor to 
consult with an existing private sector com-
mittee whose membership includes representa-
tives of the production, ginning, warehousing, 
cooperative, and merchandising segments of the 
United States cotton industry and that has de-
veloped recommendations concerning such revi-
sions. 
‘‘(B) UPON REVIEW.—The Secretary shall 
also consult with the committee referred to in 
subparagraph (A) when conducting a review of 
adjustments in the operation of the loan pro-
gram as provided in paragraph (4). 
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‘‘(C) INAPPLICABILITY OF FEDERAL ADVI-
SORY COMMITTEE ACT.—The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply 
to consultations under this paragraph with the 
committee referred to in subparagraph (A). 
‘‘(4) REVIEW
OF
ADJUSTMENTS.—The Sec-
retary may review the operation of the upland cotton 
quality adjustments implemented pursuant to this 
subsection and may make further revisions to the 
administration of the loan program, by either revok-
ing or revising the actions taken pursuant to para-
graph (2)(B) or by revoking or revising any actions 
taken or authorized to be taken under paragraph 
(2)(B). 
‘‘(5) ADJUSTMENTS IN EFFECT PRIOR TO REVI-
SION.—The quality differences (premiums and dis-
counts for quality factors) applicable to the upland 
cotton loan program (prior to any revisions in ac-
cordance with this subsection) shall be established 
by the Secretary by giving equal weight— 
‘‘(A) to loan differences for the preceding 
crop; and 
‘‘(B) to market differences for such crop in 
the designated United States spot markets. 
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‘‘(e) RICE LIMITATION.—With respect to long grain 
rice and medium and short grain rice, the Secretary shall 
not make adjustments in the loan rates for such commod-
ities, except for differences in grade and quality (including 
milling yields).’’. 
SEC. 1506. 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 ‘‘Farm Security and Rural Investment Act of 
2002’’ each place it appears and inserting ‘‘Farm, Nutri-
tion, and Bioenergy Act of 2007’’. 
SEC. 1507. 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 in 
subsections (a) and (c)(1) by striking ‘‘subtitle B and C 
of title I of the Farm Security and Rural Investment Act 
of 2002’’ each place it appears and inserting ‘‘subtitle B 
of title I of the Farm, Nutrition, and Bioenergy Act of 
2007’’. 
SEC. 1508. ASSIGNMENT OF PAYMENTS. 
(a) IN GENERAL.—The provisions of section 8(g) of 
the Soil Conservation and Domestic Allotment Act (16 
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U.S.C. 590h(g)), relating to assignment of payments, shall 
apply to payments made under the authority of this title. 
(b) NOTICE.—The producer making the assignment, 
or the assignee, shall provide the Secretary with notice, 
in such manner as the Secretary may require, of any as-
signment made under this section. 
SEC. 1509. TRACKING OF BENEFITS. 
As soon as practicable after the date of enactment 
of this Act, the Secretary shall track the benefits provided, 
directly or indirectly, to individuals and entities under ti-
tles I and II and the amendments made by those titles. 
SEC. 1510. UPLAND COTTON STORAGE PAYMENTS. 
Beginning with the 2011 crop of upland cotton, the 
Secretary may not use the funds of the Commodity Credit 
Corporation to pay storage, handling, and other costs as-
sociated with the storage of upland cotton for which a 
marketing assistance loan is made under section 1201. 
SEC. 1511. GOVERNMENT PUBLICATION OF COTTON PRICE 
FORECASTS. 
Section 15 of the Agricultural Marketing Act (12 
U.S.C. 1141j) is amended by striking subsection (d). 
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SEC. 1512. PREVENTION OF DECEASED PERSONS RECEIV-
ING PAYMENTS UNDER FARM COMMODITY 
PROGRAMS. 
(a) IDENTIFICATION
OF
ERRONEOUS
PAYMENTS 
MADE TO DECEASED PERSONS.—The Secretary of Agri-
culture shall— 
(1) undertake a study to identify any estate of 
a deceased person that continued to receive pay-
ments under this title for more than two crop years 
after the death of the person; and 
(2) submit a report containing the results of 
the study to Congress. 
(b) NOTIFICATION.—The Secretary shall issue regu-
lations that specify deadlines by which a legal entity must 
notify the Secretary of any change in ownership of such 
entity, including the death of a person with a direct or 
indirect ownership interest in the entity, that may affect 
the entity’s eligibility to receive payments or other benefits 
under this title. The Secretary may deny the issuance of 
such payments or benefits to an entity that fails to comply 
with such regulations. 
(c) RECOUPMENT.—If the Secretary determines that 
the estate of a deceased person failed to timely notify the 
Farm Service Agency of the death, the Secretary shall re-
coup the erroneous payments made on behalf of the de-
ceased person. The Secretary shall withhold payments that 
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would otherwise be made under this title to farming oper-
ations in which the deceased person was actively engaged 
in farming before death until the funds have been re-
couped. 
(d) COORDINATION.—The Secretary shall, twice a 
year, reconcile individual tax identification numbers with 
the Internal Revenue Service for recipients of payments 
under this title to determine recipients’ living status. 
TITLE II—CONSERVATION 
Subtitle A—Conservation Programs of the Food Security Act of 1985 
Sec. 2101. Conservation reserve program. 
Sec. 2102. Wetlands reserve program. 
Sec. 2103. Conservation security program. 
Sec. 2104. Grassland reserve program. 
Sec. 2105. Environmental quality incentives program. 
Sec. 2106. Regional water enhancement program. 
Sec. 2107. Grassroots source water protection program. 
Sec. 2108. Conservation of private grazing land. 
Sec. 2109. Great Lakes basin program for soil erosion and sediment control. 
Sec. 2110. Farm and ranchland protection program. 
Sec. 2111. Farm viability program. 
Sec. 2112. Wildlife habitat incentive program. 
Subtitle B—Conservation Programs Under Other Laws 
Sec. 2201. Agricultural management assistance program. 
Sec. 2202. Resource Conservation and Development Program. 
Sec. 2203. Small watershed rehabilitation program. 
Subtitle C—Additional Conservation Programs 
Sec. 2301. Chesapeake Bay program for nutrient reduction and sediment con-
trol. 
Sec. 2302. Voluntary public access and habitat incentive program. 
Subtitle D—Administration and Funding 
Sec. 2401. Funding of conservation programs under Food Security Act of 
1985. 
Sec. 2402. Improved provision of technical assistance under conservation pro-
grams. 
Sec. 2403. Cooperative conservation partnership initiative. 
Sec. 2404. Regional equity and flexibility. 
Sec. 2405. Administrative requirements for conservation programs. 
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Sec. 2406. Annual report on participation by specialty crop producers in con-
servation programs. 
Sec. 2407. Promotion of market-based approaches to conservation. 
Sec. 2408. Establishment of State technical committees and their responsibil-
ities. 
Sec. 2409. Payment limitations. 
Subtitle E—Miscellaneous Provisions 
Sec. 2501. Inclusion of income from affiliated packing and handling operations 
as income derived from farming for application of adjusted 
gross income limitation on eligibility for conservation programs. 
Sec. 2502. Encouragement of voluntary sustainability practices guidelines. 
Sec. 2503. Farmland resource information. 
Subtitle A—Conservation Programs 
of the Food Security Act of 1985 
SEC. 2101. CONSERVATION RESERVE PROGRAM. 
(a) AUTHORIZATION AND ELIGIBLE LAND.—Section 
1231 of the Food Security Act of 1985 (16 U.S.C. 3831) 
is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘2007’’ and inserting 
‘‘2012’’; and 
(B) by inserting before the period the fol-
lowing: ‘‘and to address issues raised by State, 
regional, and national conservation initiatives’’; 
and 
(2) in subsection (b)— 
(A) in paragraph (1)(B)— 
(i) by striking ‘‘the Farm Security 
and Rural Investment Act of 2002’’ and 
inserting ‘‘the Farm, Nutrition, and Bio-
energy Act of 2007’’; and 
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(ii) by striking the period at the end 
and inserting a semicolon; and 
(B) in paragraph (4), by striking the semi-
colon at the end of subparagraph (E) and in-
serting ‘‘; or’’. 
(b) MAXIMUM ENROLLMENT.—Section 1231(d) of 
the Food Security Act of 1985 (16 U.S.C. 3831(d)) is 
amended by striking ‘‘2007’’ and inserting ‘‘2012’’. 
(c) 
CONSERVATION
PRIORITY
AREAS.—Section 
1231(f) of the Food Security Act of 1985 (16 U.S.C. 
3831(f)) is amended by striking ‘‘the Chesapeake Bay Re-
gion (Pennsylvania, Maryland, and Virginia)’’ and insert-
ing ‘‘the Chesapeake Bay Region’’. 
(d) TREATMENT
OF MULTI-YEAR GRASSES
AND 
LEGUMES.—Subsection (g) of section 1231 of the Food 
Security Act of 1985 (16 U.S.C. 3831) is amended to read 
as follows: 
‘‘(g) MULTI-YEAR GRASSES AND LEGUMES.— 
‘‘(1) IN GENERAL.—For purposes of this sub-
chapter, alfalfa and other multi-year grasses and 
legumes in a rotation practice, approved by the Sec-
retary, shall be considered agricultural commodities. 
‘‘(2) CROPPING HISTORY.—Alfalfa, when grown 
as part of a rotation practice, as determined by the 
Secretary, is an agricultural commodity subject to 
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the cropping history criteria under subsection 
(b)(1)(B) for the purpose of determining whether 
highly erodible cropland has been planted or consid-
ered planted for 4 of the 6 years referred to in such 
subsection.’’. 
(e) PILOT PROGRAM FOR ENROLLMENT OF WET-
LAND
AND BUFFER ACREAGE
IN CONSERVATION RE-
SERVE.—Section 1231(h)(1)(A) of the Food Security Act 
of 1985 (16 U.S.C. 3831(h)(1)(A)) is amended by striking 
‘‘2007’’ and inserting ‘‘2012’’. 
(f) MANAGED
HAYING
AND
GRAZING.—Section 
1232(a)(7) of the Food Security Act of 1985 (16 U.S.C. 
3832(a)(7)) is amended— 
(1) in subparagraph (A)— 
(A) by inserting ‘‘and prescribed grazing 
for the control of invasive species’’ after ‘‘bio-
mass’’; and 
(B) by striking ‘‘and’’ at the end of the 
subparagraph; 
(2) by redesignating subparagraph (B) as sub-
paragraph (D); and 
(3) by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
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‘‘(B) managed grazing during the year, ex-
cept that in permitting such grazing, the Sec-
retary shall— 
‘‘(i) reduce the rental payment other-
wise payable under the contract by a per-
centage determined by the Secretary to be 
appropriate; and 
‘‘(ii) require a management plan, in-
cluding a grazing rate, approved by the 
Secretary that is consistent with section 
1231(a); 
‘‘(C) dryland crop production and grazing 
practices on acreage enrolled into the conserva-
tion reserve enhancement program announced 
on May 27, 1998 (63 Fed. Reg. 28965) where 
the conservation reserve enhancement program 
is initiated to address declining groundwater or 
surface water resources and water quality 
issues associated with declining groundwater or 
surface water resources and the conservation 
reserve enhancement contract requires the 
owner or operator to retire a water right, except 
that in permitting dryland crop production and 
grazing, the Secretary shall— 
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‘‘(i) develop an appropriate working 
lands conservation plan that implements 
conservation practices suitable to the re-
gion to address soil conservation, water 
quality, wildlife habitat, or other environ-
mental benefits; 
‘‘(ii) apply the provisions of section 
11005 of the Farm, Nutrition, and Bio-
energy Act of 2007 in determining the eli-
gibility for crop insurance of dryland crop 
production and grazing activities allowed 
under a conservation reserve enhancement 
contract for the purposes of this section, 
dryland crop production and grazing activi-
ties allowed under a conservation reserve 
enhancement contract shall be considered 
‘noncropland’ in applying the provisions of 
section 11005 of the Farm, Nutrition, and 
Bioenergy Act of 2007; 
‘‘(iii) reduce the rental payment other-
wise payable under the contract by an 
amount commensurate with the economic 
value of the crop production or grazing ac-
tivity, while still leaving sufficient financial 
incentives for the owner or operator to par-
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ticipate in the conservation reserve en-
hancement; and 
‘‘(iv) at the request of a State that 
has previously entered into a conservation 
reserve enhancement program agreement, 
renegotiate the agreement to allow for the 
dryland crop production and grazing in ac-
cordance with this section; and’’. 
(g) RENTAL RATES.—Section 1234(c) of the Food 
Security Act of 1985 (16 U.S.C. 3834(c)) is amended by 
adding at the end the following new paragraph: 
‘‘(5) COUNTY AVERAGE MARKET DRY-LAND AND 
IRRIGATED CASH RENTAL RATES.— 
‘‘(A) ANNUAL ESTIMATES.—Beginning not 
later than one year after the date of the enact-
ment of the Farm, Nutrition, and Bioenergy 
Act of 2007, the National Agricultural Statis-
tics Service shall conduct an annual survey of 
per acre estimates of county average market 
dry-land and irrigated cash rental rates for 
cropland and pastureland in all counties or 
equivalent subdivisions within each State with 
20,000 acres or more of cropland and 
pastureland. 
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‘‘(B) PUBLIC
AVAILABILITY
OF
ESTI-
MATES.—The estimates derived as a result of 
the annual survey conducted under subpara-
graph (A) shall be maintained on a website of 
the Department of Agriculture for use by the 
general public.’’. 
(h) CONSERVATION RESERVE PROGRAM TRANSITION 
INCENTIVES.—Section 1235 of the Food Security Act of 
1985 (16 U.S.C. 3835) is amended— 
(1) in subsection (c)(1)(B)— 
(A) in clause (ii), by striking ‘‘or’’ at the 
end; 
(B) by redesignating clause (iii) as clause 
(iv); and 
(C) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) to facilitate a transition of land 
subject to the contract from a retired or 
retiring owner or operator to a beginning 
farmer or rancher, socially disadvantaged 
farmer or rancher, or limited resource 
farmer or rancher for the purpose of re-
turning some or all of the land into pro-
duction using sustainable grazing or crop 
production methods; or’’; and 
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(2) by adding at the end the following new sub-
section: 
‘‘(f) TRANSITION OPTION FOR CERTAIN FARMERS OR 
RANCHERS.— 
‘‘(1) DUTIES OF THE SECRETARY.—In the case 
of a contract modification approved in order to fa-
cilitate the transfer of land subject to a contract 
from a retired or retiring owner or operator under 
subsection (c)(1)(B)(iii) to a beginning farmer or 
rancher, socially disadvantaged farmer or rancher, 
or limited resource farmer or rancher (in this sub-
section referred to as a ‘covered farmer or rancher’) 
the Secretary shall— 
‘‘(A) beginning on the date that is 1 year 
before the date of termination of the contract— 
‘‘(i) allow the covered farmer or 
rancher, in conjunction with the retired or 
retiring owner or operator, to make con-
servation and land improvements; and 
‘‘(ii) allow the covered farmer or 
rancher, at the election of the covered 
farmer or rancher, to begin the certifi-
cation process under the Organic Foods 
Production Act of 1990 (7 U.S.C. 6501 et 
seq.); 
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‘‘(B) beginning on the date of termination 
of the contract, require the retired or retiring 
owner or operator to sell or lease (under a long- 
term lease or a lease with an option to pur-
chase) to the covered farmer or rancher the 
land subject to the contract for production pur-
poses; 
‘‘(C) require the covered farmer or rancher 
to develop and implement a comprehensive con-
servation plan that meets such sustainability 
criteria as the Secretary may establish; 
‘‘(D) provide to the covered farmer or 
rancher an opportunity to enroll in the con-
servation security program or the environmental 
quality incentives program by not later than the 
date on which the farmer or rancher takes pos-
session of the land through ownership or lease; 
and 
‘‘(E) continue to make annual payments to 
the retired or retiring owner or operator for not 
more than an additional 2 years after the date 
of termination of the contract, if the retired or 
retiring owner or operator is not a family mem-
ber (as defined in section 1001A(b)(3)(B) of 
this Act) of the covered farmer or rancher. 
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‘‘(2) REENROLLMENT.—The Secretary shall 
provide to a beginning farmer or rancher, socially 
disadvantaged farmer or rancher, or limited resource 
farmer or rancher described in paragraph (1) the 
option to reenroll any applicable partial field con-
servation practice that is— 
‘‘(A) eligible for enrollment under the con-
tinuous 
signup 
requirement 
of 
section 
1231(h)(4)(B); and 
‘‘(B) part of an approved comprehensive 
conservation plan.’’. 
(i) EARLY TERMINATION.—Section 1235(e)(1) of the 
Food Security Act of 1985 (16 U.S.C. 3835(e)(1)) is 
amended by striking ‘‘before January 1, 1995,’’. 
(j) EXCEPTIONS TO EARLY TERMINATION.—Section 
1235(e)(2) of the Food Security Act of 1985 (16 U.S.C. 
3835(e)(2)) is amended by adding at the end the following 
new subparagraph: 
‘‘(D) Land enrolled under continuous 
signup.’’. 
SEC. 2102. WETLANDS RESERVE PROGRAM. 
(a) ESTABLISHMENT AND PURPOSE.—Subsection (a) 
of section 1237 of the Food Security Act of 1985 (16 
U.S.C. 3837) is amended to read as follows: 
‘‘(a) ESTABLISHMENT AND PURPOSES.— 
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‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a wetlands reserve program to assist owners 
of eligible lands in restoring and protecting wet-
lands. 
‘‘(2) PURPOSES.—The purposes of the wetlands 
reserve program are— 
‘‘(A) to restore, to create, to protect, or to 
enhance wetlands on lands that are eligible 
under subsections (c) and (d); and 
‘‘(B) to authorize the Secretary, at the sole 
discretion of the Secretary, to purchase flood- 
plain easements.’’. 
(b) MAXIMUM ENROLLMENT.—Section 1237(b) of 
the Food Security Act of 1985 (16 U.S.C. 3837(b)) is 
amended— 
(1) by striking paragraph (1) and inserting the 
following new paragraph: 
‘‘(1) MAXIMUM ENROLLMENT.—The total num-
ber of acres enrolled in the wetlands reserve pro-
gram shall not exceed 3,605,000 acres.’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(3) ANNUAL
ENROLLMENT
GOAL.—Of the 
total number of acres authorized by paragraph (1), 
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to the maximum extent practicable, the Secretary 
shall enroll 250,000 acres in each fiscal year. 
‘‘(4) FLOOD-PLAIN EASEMENTS.—Of the acres 
to be enrolled each fiscal year, not more than 10,000 
acres may be enrolled using flood-plain easements.’’. 
(c) ELIGIBLE LANDS.—Subsection (c) of section 
1237 of the Food Security Act of 1985 (16 U.S.C. 3837) 
is amended to read as follows: 
‘‘(c) ELIGIBILITY.—For purposes of enrolling land 
into the wetland reserve program established under this 
subchapter during the 2008 through 2012 fiscal years, 
land shall be eligible to be placed into such reserve if the 
Secretary determines that— 
‘‘(1) in the case of wetlands— 
‘‘(A) the land maximizes wetland values 
and functions and wildlife benefits; 
‘‘(B) the land is farmed wetland or con-
verted wetland, together with adjacent lands 
that are functionally dependent on such wet-
lands, except that converted wetlands where the 
conversion was not commenced prior to Decem-
ber 23, 1985, shall not be eligible to be enrolled 
in the program under this section; 
‘‘(C) the likelihood of the successful res-
toration of such land, and the resultant wetland 
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values, merit inclusion of the land into the pro-
gram taking into consideration the cost of such 
restoration; and 
‘‘(D) the land consists of riparian areas, 
including areas that link wetlands that are pro-
tected by easements or some other device or cir-
cumstance that achieves the same purpose as 
an easement; or 
‘‘(2) in the case of flood-plain lands— 
‘‘(A) the flood-plain land has been dam-
aged by flooding at least once within the pre-
vious calendar year, or has been subject to flood 
damage at least twice within the previous 10 
years; or 
‘‘(B) the enrollment of other land within 
the flood plain would contribute to the restora-
tion of the flood storage and flow or erosion 
control.’’. 
(d) INELIGIBLE LANDS.—Subsection (e) of section 
1237 of the Food Security Act of 1985 (16 U.S.C. 3837) 
is amended to read as follows: 
‘‘(e) INELIGIBLE LAND.—The Secretary may not ac-
quire easements on— 
‘‘(1) in the case of wetlands— 
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‘‘(A) land that contains timber stands es-
tablished under the conservation reserve under 
subchapter B; or 
‘‘(B) pasture land established to trees 
under the conservation reserve under sub-
chapter B; or 
‘‘(2) in the case of flood-plain lands— 
‘‘(A) land on which implementation of res-
toration practices would not be productive; or 
‘‘(B) land that is subject to an existing 
easement or deed restriction, and the easement 
or deed provides sufficient protection or res-
toration of the flood plain’s functions and val-
ues, as determined by the Secretary.’’. 
(e) EASEMENTS AND AGREEMENTS.—Section 1237A 
of the Food Security Act of 1985 (16 U.S.C. 3837a) is 
amended— 
(1) in subsection (a)(2), by inserting ‘‘if appli-
cable,’’ after ‘‘(2)’’; 
(2) in subsection (b)— 
(A) in the matter before paragraph (1), by 
inserting ‘‘or flood-plain land’’ after ‘‘values of 
wetland’’; 
(B) in paragraph (1)(B), by inserting ‘‘or 
flood-plain land’’ after ‘‘wetland’’; and 
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(C) in paragraph (3), by inserting ‘‘or 
flood-plain lands’’ after ‘‘wetlands’’; 
(3) by striking subsection (f) and inserting the 
following new subsection: 
‘‘(f) COMPENSATION.—Compensation for easements 
acquired by the Secretary under this subchapter shall be 
made in cash in such amount as agreed to and specified 
in the easement agreement. Lands may be enrolled 
through the submission of bids under a procedure estab-
lished by the Secretary. Commendation may be provided 
in not less than 5, nor more than 30, annual payments 
of equal or unequal size, as agreed to by the owner and 
the Secretary based on the following option that results 
in the lowest amount of compensation to be paid by the 
Secretary: 
‘‘(1) A percentage of the fair market value 
based on the Uniform Standards for Professional 
Appraisals Procedures, as determined by the Sec-
retary or a percentage of the market value deter-
mined by an area-wide market survey. 
‘‘(2) A geographic cap, prescribed in regulations 
issued by the Secretary. 
‘‘(3) The offer made by the landowner.’’; and 
(4) by adding at the end the following new sub-
section: 
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‘‘(h) ACCEPTANCE OF CONTRIBUTIONS.—The Sec-
retary may accept and use contributions of non-Federal 
funds to administer the program under this subchapter.’’. 
(f) DUTIES OF THE SECRETARY.—Section 1237C of 
the Food Security Act of 1985 (16 U.S.C. 3837c) is 
amended— 
(1) in subsection (a)(1)— 
(A) by inserting ‘‘including necessary 
maitenance activities,’’ after ‘‘values,’’; and 
(B) by inserting ‘‘or flood plains land’’ 
after ‘‘wetland’’; and 
(2) by striking subsection (c) and inserting the 
following new subsection: 
‘‘(c) RANKING OF OFFERS.— 
‘‘(1) IN
GENERAL.—When evaluating offers 
from landowners, the Secretary may consider— 
‘‘(A) the conservation benefits of obtaining 
an easement or other interest in the land; 
‘‘(B) the cost-effectiveness of each ease-
ment or other interest in eligible land, so as to 
maximize the environmental benefits per dollar 
expended; and 
‘‘(C) whether the landowner or another 
person is offering to contribute financially to 
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the cost of the easement or other interest in the 
land to leverage Federal funds. 
‘‘(2) CONSERVATION
BENEFITS.—In deter-
mining the acceptability of easement offers, the Sec-
retary may take into consideration— 
‘‘(A) in the case of wetlands— 
‘‘(i) the extent to which the purposes 
of 
the 
easement 
program 
would 
be 
achieved on the land; 
‘‘(ii) the productivity of the land; and 
‘‘(iii) the on-farm and off-farm envi-
ronmental threats if the land is used for 
the production of agricultural commodities; 
and 
‘‘(B) in the case of flood-plain lands— 
‘‘(i) the extent to which the purposes 
of 
the 
easement 
program 
would 
be 
achieved on the land; 
‘‘(ii) whether the land has been re-
peatedly flooded over the last ten years; 
‘‘(iii) the extent to which an easement 
on the flood-plain land would contribute to 
the restoration or management of land in 
the area surrounding the flood-plain land; 
and 
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‘‘(iv) other factors, as determined by 
the Secretary.’’. 
(g) WETLANDS RESERVE ENHANCEMENT.—Section 
1237D(c) of the Food Security Act of 1985 (16 U.S.C. 
3837d(c)) is amended by striking paragraph (4) and in-
serting the following new paragraph: 
‘‘(4) WETLANDS RESERVE ENHANCEMENT.— 
‘‘(A) IN GENERAL.—The provisions of this 
subchapter that limit payments to any person, 
and section 1305(d) of the Agricultural Rec-
onciliation Act of 1987 (Public Law 100–203; 
7 U.S.C. 1308 note), shall not apply to pay-
ments received by a State, political subdivision, 
or agency thereof in connection with agree-
ments entered into under a special wetlands re-
serve enhancement program carried out by that 
entity that has been approved by the Secretary. 
‘‘(B) AGREEMENTS.—The Secretary may 
enter into agreements with States (including 
political subdivisions and agencies of States) re-
garding payments described in subparagraph 
(A) that the Secretary determines will advance 
the purposes of this subchapter.’’. 
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(h) AUTHORIZATION.—The Food Security Act of 
1985 is amended by inserting after section 1237F (16 
U.S.C. 3837f) the following new section: 
‘‘SEC. 1237G. PERIOD OF AUTHORIZATION. 
‘‘This subchapter is authorized to be carried out for 
the 2008 through 2012 fiscal years.’’. 
SEC. 2103. CONSERVATION SECURITY PROGRAM. 
(a) ESTABLISHMENT OF NEW CONSERVATION SECU-
RITY PROGRAM THROUGH 2017.—Subchapter A of chap-
ter 2 of subtitle D of title XII of the Food Security Act 
of 1985 (16 U.S.C. 3838 et seq.) is amended to read as 
follows: 
‘‘Subchapter A—Conservation Security 
Program 
‘‘SEC. 1238. DEFINITIONS. 
‘‘In this subchapter: 
‘‘(1) BEGINNING FARMER OR RANCHER.—The 
term ‘beginning farmer or rancher’ has the meaning 
given the term under section 343(a) of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 
1991(a)). 
‘‘(2) CONSERVATION
PLAN.—The term ‘con-
servation plan’ means a plan that— 
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‘‘(A) identifies resources of concern, inven-
tories resources, and establishes benchmark 
data and stewardship enhancement objectives; 
‘‘(B) describes improvements that will en-
able the producer to meet and exceed the stew-
ardship threshold for all applicable resources of 
concern; and 
‘‘(C) contains a schedule and evaluation 
plan for the planning, installing, maintaining, 
and managing new conservation practices, ac-
tivities, and management measures and main-
taining, managing, and improving existing con-
servation practices, activities, and management 
measures. 
‘‘(3) CONSERVATION
PRACTICE.—The term 
‘conservation practice’ means a site-specific land 
management practice or activity, or a supporting 
structural practice, that is part of an implemented 
management system designed to address a priority 
resource of concern. 
‘‘(4) CONSERVATION
SECURITY
CONTRACT.— 
The term ‘conservation security contract’ means a 
contract entered into under this subchapter. 
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‘‘(5) CONSERVATION SECURITY PROGRAM.—The 
term ‘conservation security program’ means the pro-
gram established under section 1238A(a). 
‘‘(6) MANAGEMENT
INTENSITY.—The term 
‘management intensity’ means the degree, scope, 
and comprehensiveness of conservation practices, ac-
tivities, or management measures taken by a pro-
ducer to address a priority resource of concern to a 
level exceeding the stewardship threshold. 
‘‘(7) NONDEGRADATION STANDARD.—The term 
‘nondegradation standard’ means the level of natural 
resource conservation and environmental manage-
ment measures required to improve and sustain the 
status and condition of natural and environmental 
resources to a level that, as determined by the Sec-
retary— 
‘‘(A) prevents impairment of soil, water, 
and air quality and the quality of fish and wild-
life habitat; and 
‘‘(B) sustains the long-term productivity of 
agricultural resources. 
‘‘(8) PRIORITY RESOURCE OF CONCERN.—The 
term ‘priority resource of concern’ means a resource 
of concern identified by the Secretary, consistent 
with the requirements of section 1238C(a), that 
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must be addressed by participants in the conserva-
tion security program in a particular watershed or 
other area within that State. 
‘‘(9) PRODUCER.—The term ‘producer’ means 
an owner, operator, landlord, tenant, or share-
cropper that— 
‘‘(A) shares in the risk of producing any 
crop or livestock; and 
‘‘(B) is entitled to share in the crop or 
livestock available for marketing from a farm 
(or would have shared had the crop or livestock 
been produced). 
‘‘(10) RESOURCE-SPECIFIC INDEX.—The term 
‘resource-specific index’ means an index of manage-
ment intensity or other similar index, developed by 
the Secretary, that estimates the expected level of 
resource and environmental outcomes of the con-
servation practices, activities, and management 
measures employed by a producer. 
‘‘(11) SOCIALLY DISADVANTAGED FARMER OR 
RANCHER.—The term ‘socially disadvantaged farmer 
or rancher’ has the meaning given the term under 
section 355(e) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2003(e)). 
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‘‘(12) 
STRUCTURAL
PRACTICE.—The 
term 
‘structural practice’ means a site-specific, con-
structed conservation practice that is integrated with 
and essential to the successful implementation of the 
system of land management practices and activities 
that are the basis of a conservation security con-
tract. 
‘‘SEC. 1238A. CONSERVATION SECURITY PROGRAM. 
‘‘(a) ESTABLISHMENT
AND PURPOSE.—The Sec-
retary shall establish, and for each of fiscal years 2012 
through 2017, carry out a conservation security program 
to assist producers in improving environmental quality by 
addressing priority resources of concern in a comprehen-
sive manner. 
‘‘(b) ELIGIBLE PRODUCERS.—To be eligible to par-
ticipate in the conservation security program, a producer 
shall— 
‘‘(1) demonstrate that the producer is address-
ing at least one priority resource of concern to a 
minimum level of management intensity determined 
by the Secretary; and 
‘‘(2) develop and submit to the Secretary, and 
obtain the approval of the Secretary of, a conserva-
tion offer. 
‘‘(c) ELIGIBLE LAND.— 
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‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), private agricultural land (including crop-
land, grassland, prairie land, improved pasture land, 
forest land and rangeland) and land under the juris-
diction of an Indian tribe (as defined by the Sec-
retary) shall be eligible for enrollment in the con-
servation security program. 
‘‘(2) EXCLUSIONS.— 
‘‘(A) LAND
ENROLLED
IN
OTHER
CON-
SERVATION PROGRAMS.—Except as provided in 
subsection (f)(3)(A), the following lands are not 
eligible for enrollment in the conservation secu-
rity program: 
‘‘(i) Lands enrolled in the conserva-
tion reserve program under subchapter B 
of chapter 1. 
‘‘(ii) Land enrolled in the wetlands re-
serve program established under sub-
chapter C of chapter 1. 
‘‘(iii) Land enrolled in the grassland 
reserve program established under sub-
chapter C of chapter 2. 
‘‘(B) CONVERSION TO CROPLAND.—Land 
used for crop production after October 1, 2011, 
that had not been planted, considered to be 
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planted, or devoted to crop production for at 
least 4 of the 6 years preceding that date (ex-
cept for land enrolled in the conservation re-
serve program or that has been maintained 
using long-term crop rotation practices, as de-
termined by the Secretary) shall not be the 
basis for any payment under the conservation 
security program. 
‘‘(d) ECONOMIC USES.—With respect to eligible land 
covered by a conservation security contract, the Secretary 
shall permit economic uses of the land that— 
‘‘(1) maintain the agricultural nature of the 
land; and 
‘‘(2) are consistent with the conservation pur-
poses of the conservation security program. 
‘‘(e) CONSERVATION SECURITY CONTRACTS.— 
‘‘(1) IN GENERAL.—After a determination that 
a producer is eligible for the conservation security 
program, and on approval of the conservation offer 
of the producer, the Secretary shall enter into a con-
servation security contract with the producer to en-
roll the land to be covered by the contract in the 
conservation security program. 
‘‘(2) TERM.—A conservation security contract 
shall be for a term of 5 years. 
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‘‘(3) AGRICULTURAL OPERATION.—All the acres 
of the agricultural operation that are under the pro-
ducer’s effective control at the time the producer en-
ters into a conservation security contract shall be 
covered by the conservation security contract. 
‘‘(4) PROVISIONS.—The conservation security 
contract of a producer shall— 
‘‘(A) include a conservation plan approved 
by the Secretary; 
‘‘(B) describe the land covered by the con-
servation security contract; 
‘‘(C) state the amount of the stewardship 
enhancement payment the Secretary agrees to 
make to the producer each year of the conserva-
tion security contract under section 1238C(c); 
‘‘(D) describe the new conservation prac-
tices and activities the producer is required to 
implement during the term of the conservation 
security contract in order to increase the level 
of management intensity with which the pro-
ducer addresses a priority resource of concern 
or priority resources of concern, as designated 
by the Secretary under section 1238C(a)(1); 
and 
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‘‘(E) include such other provisions as the 
Secretary determines necessary to ensure the 
conservation purposes of the conservation secu-
rity program are met. 
‘‘(5) ON-FARM
RESEARCH
AND
DEMONSTRA-
TION OR PILOT TESTING.—The Secretary may ap-
prove a conservation security contract that in-
cludes— 
‘‘(A) on-farm conservation research and 
demonstration activities; and 
‘‘(B) pilot testing of new technologies or 
innovative conservation practices. 
‘‘(f) MODIFICATION.—The Secretary may allow a 
producer to modify a conservation security contract before 
the expiration of the contract if the Secretary determines 
that failure to modify the contract would significantly 
interfere with achieving the purposes of the conservation 
security program. 
‘‘(g) CONTRACT TERMINATION.— 
‘‘(1) VOLUNTARY
TERMINATION.—A producer 
may terminate a conservation security contract if the 
Secretary determines that termination of the con-
tract would not defeat the purposes of the conserva-
tion plan of the producer. 
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‘‘(2) INVOLUNTARY
TERMINATION.—The Sec-
retary may terminate a contract under this sub-
chapter if the Secretary determines that the pro-
ducer violated the contract. 
‘‘(3) TRANSFER OR CHANGE OF INTEREST IN 
LAND SUBJECT TO CONSERVATION SECURITY CON-
TRACT.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the transfer, or change in 
the interest, of a producer in land subject to a 
conservation security contract shall result in the 
termination of the conservation security con-
tract. 
‘‘(B) 
TRANSFER
OF
DUTIES
AND 
RIGHTS.—Subparagraph (A) shall not apply if, 
within a reasonable period of time after the 
date of the transfer or change in the interest in 
land, the transferee of the land provides written 
notice to the Secretary that all duties and 
rights under the conservation security contract 
have been transferred to, and assumed by, the 
transferee. The Secretary shall specify what will 
be considered a reasonable period of time for 
purposes of providing the notification required 
by this subparagraph. 
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