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SEC. 2303. TRANSFER OF FUNCTIONS.
There are transferred to the Division all functions ex-
ercised and all administrative appeals pending before the
date of enactment of this Act (including all related func-
tions of any officer or employee) of or relating to—
(1) the National Appeals Division established by
section 426(c) of the Agricultural Act of 1949 (7
U.S.C. 1433e(c)) (as in effect before the amendment
made by section 2315(a)(2));
(2) the National Appeals Division established by
subsections (d) through (g) of section 333B of the Con-
solidated Farm and Rural Development Act (7 U.S.C.
1983b) (as in effect before the amendment made by
section 2315(b));
(3) appeals of decisions made by FCIC; and
(4) appeals of decisions made by SCS.
SEC. 2304. PERSONNEL OF THE DIVISION.
(a) APPOINTMENT, DIRECTION, AND CONTROL.—The
Director shall appoint such hearing officers and other em-
ployees as are necessary for the administration of the Divi-
sion. A hearing officer or other employee of the Division
shall have no duties other than those that are necessary to
carry out this subtitle. Hearing officers shall be supervised
by the Director. All other employees of the Division shall
report to the Director.
(b) LEGAL COUNSEL.—
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(1) IN
GENERAL.—The Director shall employ
legal counsel to advise the Director with respect to
legal questions affecting the Division. The legal coun-
sel shall not serve as a counsel to any other agency
of the Department. This subsection is not intended to
affect the role of the Office of General Counsel in rep-
resenting the Department in civil or criminal actions
or as a liaison between the Department and any other
Federal agency.
(2) REVIEW BY THE SECRETARY.—If a hearing
officer or the Director disagrees with the General
Counsel on a matter of legal interpretation with re-
spect to a program or authority of the Department,
the Secretary shall have the authority to make a final
determination on the interpretation at the request of
the General Counsel. The authority of the Secretary
under this paragraph may not be delegated.
(c) PERFORMANCE EVALUATIONS.—The Director shall
establish policies to provide for the evaluation of the Direc-
tor, hearing officers, and other employees of the Division
who are involved in the appeal process under section 2308
or the supervision of other employees. The evaluation proc-
ess shall be designed to ensure and enhance the independ-
ence, integrity, and efficiency of the Director and employees
of the Division. The actual evaluations shall include evalua-
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tions by individuals outside of the Department and may
include peer review.
SEC. 2305. NOTICE AND OPPORTUNITY FOR HEARING.
(a) NOTICE REQUIRED.—Not later than 10 working
days after an adverse decision is made that is adverse to
the participant, the Secretary shall provide the participant
with the written notice described in subsection (b).
(b) CONTENT OF NOTICE.—The notice required under
subsection (a) shall contain a description of the following:
(1) The decision, including all of the reasons,
facts, and conclusions underlying the decision.
(2) The appeal and implementation process
available to the participant, including the rights and
responsibilities of the participant provided by this
subtitle.
(3) An opportunity to request a determination
by the Director pursuant to section 2302(e) concern-
ing whether a decision is appealable, if the
decisionmaker determines that the decision is not ap-
pealable.
(c) MAINTENANCE OF RECORDS.—The Secretary and
the Director shall maintain the entire case record and hear-
ing record, respectively, and any additional information
from any further appeal proceeding, of the participant at
least until the expiration of the period during which the
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participant may seek administrative or judicial review of
the determination.
(d) JOINDER.—
(1) GUARANTEED
LOANS.—With regard to a
guaranteed loan under the Consolidated Farm and
Rural Development Act (7 U.S.C. 1921 et seq.), a bor-
rower or applicant who is directly and adversely af-
fected by a decision of the Secretary may appeal the
decision pursuant to this subtitle without the lender
joining in the appeal.
(2) RENTAL HOUSING.—A tenant in rental hous-
ing of an agency who is individually, directly, and
adversely affected by a decision of the Secretary may
appeal the decision pursuant to this subtitle without
the landlord joining in the appeal.
(3) THIRD PARTIES.—If the Director determines
that the receipt of a payment, loan, or other direct
benefit by a participant may be directly, substan-
tially, and adversely affected by a determination of
the Division, a hearing officer may invite the partici-
pant to participate in a hearing if the final deter-
mination resulting from the hearing would, as a
practical matter, foreclose the participant from re-
ceiving the payment, loan, or other direct benefit of
the participant. If the participant elects to partici-
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pate in the hearing, the participant shall have the
same procedural rights as the appellant with regard
to the hearing and other procedures described in this
subtitle.
(e) EFFECT OF REVERSAL OR MODIFICATION OF AD-
VERSE DECISION.—If an adverse decision is reversed or
modified by the Division, a decisionmaker may not base
any subsequent adverse decision with regard to that appel-
lant on the information that was available to the previous
decisionmaker (or could have been available with reasonable
diligence on the part of the previous decisionmaker).
SEC. 2306. INFORMAL HEARINGS.
If a decisionmaker of an agency makes an adverse de-
cision, the decisionmaker shall hold, at the request of the
participant, an informal hearing on the decision.
SEC. 2307. RIGHTS OF PARTICIPANTS.
Among other rights, a participant shall have the right,
in accordance with this subtitle, to—
(1) appeal any adverse decision;
(2) representation by an attorney or nonattorney
throughout the informal hearing and appeals process
under this subtitle;
(3) access to, and a reasonable opportunity to
inspect and reproduce, the case record at an office of
the agency located in the area of the participant; and
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(4) an evidentiary hearing.
SEC. 2308. DIVISION HEARINGS AND DIRECTOR REVIEW.
(a) POWERS
OF DIRECTOR
AND HEARING OFFI-
CERS.—To carry out their responsibilities under this sec-
tion, the Director and hearing officers—
(1) shall have access to all records, reports, au-
dits, reviews, documents, papers, recommendations, or
other material available that relate to programs and
operations with respect to which an appeal has been
taken;
(2) shall have the authorities that are provided
under section 2302(a)(2);
(3) may request such information or assistance
as may be necessary for carrying out the duties and
responsibilities established under this subtitle from
any Federal, State, or local governmental agency or
unit of the agency;
(4) may, or shall at the request of an appellant
with good cause shown, require the attendance of wit-
nesses and the production of all information, docu-
ments, reports, answers, records, accounts, papers,
and other data and documentary evidence necessary
to the proper resolution of appeals;
(5) may require the attendance of witnesses, and
the production of evidence, by subpoena; and
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(6) may administer oaths or affirmations.
(b) TIME FOR HEARING.—
(1) IN GENERAL.—Except as provided in para-
graph (2), an appellant shall have the right to—
(A) request a hearing, not later than 30
days after the date an adverse decision is made;
and
(B) have a hearing by the Division on the
adverse decision, not later than 45 days after re-
ceipt of the request for the hearing.
(2) REDUCTION OR EXTENSION.—The Director
may establish an earlier deadline for a hearing (or
request for a hearing) on an appeal relating to a time
sensitive decision, or delay a hearing (or request for
a hearing), at the request of an appellant for good
cause shown.
(c) LOCATION AND ELEMENTS OF HEARING.—
(1) LOCATION.—A hearing on an adverse deci-
sion shall be held in the State of residence of the ap-
pellant or at a location that is otherwise convenient
to the appellant and the Division.
(2) EVIDENTIARY
HEARING.—The evidentiary
hearing before a hearing officer shall be in person,
unless the appellant agrees to a hearing by telephone
or by a review of the case record and hearing record.
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The hearing officer shall conduct and resolve the hear-
ing (regardless of the hearing format) in a fair and
impartial manner and free of undue influence. The
hearing officer shall not be bound by previous find-
ings of fact by the agency in making a determination.
(3) INFORMATION AT HEARING.—The hearing of-
ficer shall consider information, including new infor-
mation, presented at the hearing without regard to
whether the evidence was known to the decisionmaker
at the time the adverse decision was made. The hear-
ing officer shall leave the record open after the hear-
ing for a reasonable period of time to allow the sub-
mission of information by the appellant or the
decisionmaker after the hearing to the extent nec-
essary to prevent the appellant or the decisionmaker
from being prejudiced by new facts, information, ar-
guments, or evidence presented or raised by the
decisionmaker or appellant. At the hearing, the agen-
cy may not rely on or assert new grounds for the ad-
verse decision, if the grounds were not described in the
agency decision notice.
(4) BURDEN
OF
PROOF.—The appellant shall
bear the burden of proving that the adverse decision
of the agency was erroneous.
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(5) PRODUCTION OF RECORD.—An official ver-
batim record shall be provided by the Division for
each hearing before a hearing officer. The appellant or
agency representative may record an unofficial record
of the hearing.
(6) STANDARD OF REVIEW.—In any case pend-
ing before a hearing officer, the hearing officer may
determine that the adverse decision was in error only
if substantial evidence demonstrates that the adverse
decision was not correct. For purposes of this para-
graph, the evidentiary threshold for substantial evi-
dence is lower than the evidentiary threshold for pre-
ponderance of the evidence.
(7) DETERMINATION NOTICE.—The hearing offi-
cer shall issue a notice of the determination on the
appeal not later than 30 days after a hearing or after
receipt of the request of the appellant to waive a hear-
ing, except that the Director may establish an earlier
or later deadline pursuant to subsection (b)(2). The
hearing officer may include recommendations in the
determination notice. If the determination is not ap-
pealed to the Director under subsection (d), the notice
provided by the hearing officer shall be considered to
be a notice of final determination.
(d) REVIEW BY DIRECTOR.—
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(1) REFERRAL.—At the request of the appellant
or the head of the agency affected by a determination
of a hearing officer, the determination of the hearing
officer shall be referred to the Director for review.
(2) APPEAL
BY
HEAD
OF
AGENCY
TO
DIREC-
TOR.—
(A) REVIEW OF DETERMINATION OF HEAR-
ING OFFICER AT THE REQUEST OF AN AGENCY
HEAD.—In exceptional circumstances, if the head
of an agency believes that the determination of a
hearing officer is contrary to a statute or regula-
tion, or a finding of fact of a hearing officer is
clearly erroneous, only the head of the agency
may make a written request, not later than 10
business days after receipt of the determination,
that the Director review the determination.
(B) REQUESTS FOR REVIEW.—A request for
review shall—
(i) include a full description of—
(I) the exceptional circumstances
justifying the request for review; and
(II) the reasons that the head of
the relevant agency believes that the de-
termination is contrary to statute or
regulation, or the finding of fact of the
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hearing officer is clearly erroneous;
and
(ii) be provided to the appellant and
the hearing officer at the same time the re-
quest is provided to the Director.
(C) DETERMINATION
OF
DIRECTOR.—Not
later than 10 business days after receipt of the
request for review, the Director shall—
(i) conduct a review of the determina-
tion based on the case record and hearing
record, the request for review under sub-
section (b), and any additional arguments
or information submitted by the appellant
or the hearing officer; and
(ii)(I) issue a final determination no-
tice that upholds, reverses, or modifies the
determination of the hearing officer; or
(II) if the Director determines that the
hearing record is inadequate, remand the
determination for further proceedings to
complete the hearing record, or, at the op-
tion of the Director, to hold a new hearing,
and notify the appellant, agency, and hear-
ing officer of the remand.
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(D) NEW
HEARING.—If the Director re-
mands a determination for a new hearing on the
adverse decision under subparagraph (C), the
hearing officer shall make a new determination
with respect to the adverse decision based on the
case record and the hearing record.
(E) FINALITY.—The head of the relevant
agency may not request a second review as to the
determination of the hearing officer or the Direc-
tor on the same issue.
(3) APPEAL BY HEAD OF AGENCY OR APPELLANT
TO DIRECTOR.—
(A) USE OF RECORD.—If the determination
of a hearing officer is appealed under paragraph
(1), the hearing officer shall certify the hearing
record and provide the record to the Director.
(B) NEW INFORMATION.—The Director may
consider, under extraordinary circumstances,
new information in reviewing a determination
under this section. The appellant, decisionmaker,
and hearing officer shall receive and have the op-
portunity to comment on the new information.
(C) ACTIONS.—Not later than 30 days after
the referral to the Director, the Director shall—
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(i) review the hearing record and the
determination;
(ii) uphold the determination, issue a
new determination, require that a new
hearing be held on 1 or more of the issues
considered at the original hearing, or take
any combination of the actions described in
this clause; and
(iii) issue a notice of—
(I) a new evidentiary hearing;
(II) a final determination; or
(III) a remand on certain issues
and a final determination on remain-
ing issues.
(D) 
RECOMMENDATIONS.—The 
Director
may include recommendations in a final deter-
mination notice.
(E) RELIEF.—The Director shall have the
same authority as the Secretary to grant equi-
table relief. Notwithstanding the administrative
finality of a final determination, the Secretary
shall have the authority to grant equitable or
other types of relief to the appellant after a final
determination is issued by the Division.
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(e) BASIS FOR DETERMINATION.—The determination
of the hearing officer and the Director shall be based on
information from the hearing record, laws applicable to the
matter at issue, and applicable regulations published in the
Federal Register and in effect on the date of the adverse
decision or the date on which the acts that gave rise to the
adverse decision occurred, whichever date is appropriate.
The Director shall not reverse the determination of a hear-
ing officer with regard to a finding of fact that is based
on oral testimony or inspection of evidence unless the find-
ing of fact is clearly erroneous or the Director is considering
new information under subsection (d)(3) with respect to the
finding of fact.
(f) EFFECTIVE DATE.—The final determination shall
be effective as of the date of filing of an application, the
date of the transaction or event in question, or the date of
the original adverse decision, whichever is applicable.
SEC. 2309. JUDICIAL REVIEW.
A final determination of the Division under section
2308 shall be reviewable and enforceable by any United
States district court of competent jurisdiction in accordance
with chapter 7 of title 5, United States Code. Notwithstand-
ing section 701(a)(2) of such title, a discretionary decision
of the Secretary or the Division shall be reviewable under
section 706(2)(A) of such title unless the decision is gen-
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erally applicable to all program participants and, as a
matter of general applicability, is committed to agency dis-
cretion by law within the meaning of section 701(a)(2) of
such title.
SEC. 2310. IMPLEMENTATION OF FINAL DETERMINATIONS
OF DIVISION.
(a) IN GENERAL.—On the return of a case to an agen-
cy pursuant to the final determination of a hearing officer
or the Director under section 2308, the agency shall imple-
ment the final determination of the Division not later than
30 days after the effective date of the notice of the final
determination.
(b) ADDITIONAL AND UPDATED INFORMATION.—
(1) IN GENERAL.—Except as provided in para-
graph (2), after notice of a final determination is re-
ceived by the agency—
(A) the agency may not require that addi-
tional and updated information be provided by
the appellant or considered by the decisionmaker
in implementing the final determination of the
hearing officer or the Director; and
(B) additional and updated information
from any other source may not be used in imple-
menting the final determination.
(2) EXCEPTIONS.—
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(A) INTRODUCTION BY APPELLANT.—If ad-
ditional information is introduced by the appel-
lant during the appeal process and accepted by
the hearing officer or the Director, the agency
shall consider the additional information in im-
plementing the final determination.
(B) DETERMINATION LETTER.—If the final
determination notice specifically states that ad-
ditional and updated information will be consid-
ered in implementing the final determination,
the agency shall consider any additional and up-
dated information in implementing the final de-
termination.
(C) SUBSEQUENT ADVERSE DECISION.—Ad-
ditional and updated information considered
under this paragraph may not be used as a
ground for a subsequent adverse decision.
(c) IMPLEMENTATION RESPONSIBILITIES.—
(1) STATE DIRECTOR.—Each State director shall
be—
(A) required to implement final determina-
tions of a hearing officer or the Director that af-
fect appellants in the State; and
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(B) responsible for monitoring and ensuring
the implementation of final determinations that
reverse and modify adverse decisions.
(2) AGENCY
HEADS.—Relevant agency heads
shall be responsible for—
(A) the performance of State directors under
paragraph (1); and
(B) the implementation of all final deter-
minations of the Division that reverse or modify
adverse decisions of the agency.
(d) PROTECTION OF APPELLANTS’ RIGHTS.—
(1) IN GENERAL.—No officer or employee of the
Federal Government shall make or engage in threats
or intimidation, or solicit action, to prevent any po-
tential appellant from exercising a right of the appel-
lant under this subtitle or make, solicit, or engage in
retaliation or retribution for the exercise of a right of
an appellant under this subtitle.
(2) CORRECTIVE ACTION.—If an officer or em-
ployee of the Federal Government violates paragraph
(1), the Secretary shall take corrective action (includ-
ing the imposition of sanctions, when necessary) in
conformance with civil service laws.
(e) IMPLEMENTATION PROBLEMS.—
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(1) ACTIONS BY RELEVANT AGENCY HEAD.—The
relevant agency head shall promptly correct any prob-
lems that may arise in the implementation of a final
determination.
(2) OVERSIGHT.—The Secretary shall assign em-
ployees within the Office of the Inspector General
whom appellants may contact concerning problems
with the implementation of final determinations of
the Division. The employees shall investigate and, to
the extent practicable, resolve the implementation
problems.
(3) IDENTITY
AND
ACTIVITIES
OF
OVERSIGHT
AGENCY.—The Secretary shall notify the Director of
the business address and telephone number of employ-
ees assigned under paragraph (2). The Director shall
include this information in the final determination
notice of the Division to an appellant.
SEC. 2311. DECISIONS OF STATE AND COUNTY COMMIT-
TEES.
(a) FINALITY.—Each decision of a State or county
committee (or an employee of the committee) that admin-
isters functions of CCC, or functions assigned to ASCS on
the date of enactment of this Act, made in good faith in
the absence of misrepresentation, false statement, fraud, or
willful misconduct shall be final not later than 90 days
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after the date of filing of the application for benefits, unless
the decision is—
(1) appealed under this subtitle; or
(2) modified by the Administrator of ASCS or
the Executive Vice President of CCC.
(b) RECOVERY OF AMOUNTS.—No action shall be taken
by the CCC, ASCS, or a State or county committee to re-
cover amounts found to have been disbursed as a result of
a decision in error if the decision of the State or county
committee has become final under subsection (a), unless the
participant had reason to believe that the decision was erro-
neous.
SEC. 2312. PROHIBITION ON ADVERSE ACTION WHILE AP-
PEAL IS PENDING.
(a) IN GENERAL.—The Secretary may not take any
adverse action against an appellant relating to an appeal
while any proceeding authorized or required under this sub-
title is pending, including any action that would prevent
the implementation of a decision that is favorable to the
appellant.
(b) WITHHOLDING.—This section shall not preclude
the Secretary from withholding a payment if the eligibility
for, or amount of, the payment is an issue on appeal, except
that ongoing assistance to then current borrowers and
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grantees shall not be discontinued pending the outcome of
an appeal.
SEC. 2313. RELATIONSHIP TO OTHER LAWS.
(a) OTHER RIGHTS.—This subtitle is not intended to
supersede or deprive a recipient of assistance from an agen-
cy of any rights that the recipient may have under any
other law, including section 510(g) of the Housing Act of
1949 (42 U.S.C. 1480(g)).
(b) EQUITABLE RELIEF.—This subtitle is not intended
to affect the authority of an agency head to grant equitable
relief.
(c) EMPLOYEE RIGHTS.—This subtitle shall neither
supersede nor interfere with rights granted to employees or
their exclusive representatives by applicable civil service
laws.
SEC. 2314. EVALUATION OF AGENCY DECISIONMAKERS AND
OTHER EMPLOYEES.
(a) EVALUATION IN ANNUAL REVIEW.—The Secretary
shall promulgate regulations to require the evaluation de-
scribed in subsection (b) as part of the annual review of
the performance of decisionmakers, State directors, and
agency heads.
(b) PERFORMANCE.—In the review, a decisionmaker,
a State director, or an agency head shall be considered to
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have performed poorly if the decisionmaker, State director,
or agency head—
(1) takes action that leads to numerous appeals
that result in adverse decisions that are reversed or
modified;
(2) fails to properly implement final determina-
tions of the Division;
(3) fails to satisfactorily perform the reviewing
and monitoring responsibilities required under sub-
section (c) or (e)(1) of section 2310, whichever ap-
plies; or
(4) threatens or intimidates, or engages in retal-
iation or retribution against, an appellant in viola-
tion of section 2310(d).
(c) SANCTIONS.—If a decisionmaker, State director, or
relevant agency head has performed poorly (as determined
under subsection (b)), the Secretary shall issue sanctions
against the decisionmaker, State director, or relevant agen-
cy head, as the case may be, which may include a formal
reprimand or dismissal consistent with civil service laws.
SEC. 2315. CONFORMING AMENDMENTS.
(a) ASCS.—
(1) FINALITY
OF
FARMERS
PAYMENTS
AND
LOANS.—Section 385 of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1385) is amended—
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(A) by striking the first sentence and insert-
ing the following new sentence: ‘‘As used in this
section, the term ‘payment’ means any payment
under the Soil Conservation and Domestic Allot-
ment Act (16 U.S.C. 590a et seq.), any payment
under the wheat, feed grain, upland cotton, extra
long staple cotton, and rice programs authorized
by the Agricultural Act of 1949 (7 U.S.C. 1421
et seq.) and this title, or any loan or price sup-
port operation, or the amount of the payment,
loan, or price support.’’; and
(B) in the second sentence, by striking ‘‘any
such payment’’ and inserting ‘‘a payment’’.
(2) 
DETERMINATIONS
BY
SECRETARY; 
AP-
PEALS.—Sections 412 and 426 of the Agricultural Act
of 1949 (7 U.S.C. 1429 and 1433e) are repealed.
(b) FMHA.—Section 333B of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1983b) is repealed.
(c) FCIC.—The last sentence of section 508(f) of the
Federal Crop Insurance Act (7 U.S.C. 1508(f)) is amended
by inserting before the period at the end the following: ‘‘or
within 1 year after the claimant receives a final determina-
tion notice from an administrative appeal made in accord-
ance with title II of the Department of Agriculture Reorga-
nization Act of 1994, whichever is later’’.
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Subtitle D—Farm and
International Trade Services
SEC. 2401. UNDER SECRETARY FOR FARM AND INTER-
NATIONAL TRADE SERVICES.
(a) ESTABLISHMENT.—There is established in the De-
partment the position of Under Secretary of Agriculture for
Farm and International Trade Services (referred to in this
section as the ‘‘Under Secretary’’), to be appointed by the
President, by and with the advice and consent of the Senate.
(b) DUTIES.—The Under Secretary shall exercise such
functions and perform such duties related to farm and
international trade services, and shall perform such other
duties, as may be required by law or prescribed by the Sec-
retary.
(c) CONTINUITY OF THE POSITION.—Any official serv-
ing as Under Secretary for International Affairs and Com-
modity Programs on the date of enactment of this Act, who
has been appointed by the President and confirmed by the
Senate, shall be considered on and after the date of enact-
ment of this Act to be serving in the successor position estab-
lished by subsection (a), and shall not be required to be re-
confirmed by reason of the enactment of this title.
(d) CONFORMING AMENDMENTS.—
(1) Section 5314 of title 5, United States Code,
is amended by striking ‘‘Under Secretary of Agri-
107
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SEC. 2502. RURAL UTILITIES SERVICE.
(a) ESTABLISHMENT.—Notwithstanding section 364 of
the Consolidated Farm and Rural Development Act (7
U.S.C. 2006f) and any other provision of law, the Secretary
is authorized to establish and maintain within the Depart-
ment the Rural Utilities Service (referred to in this section
as the ‘‘Service’’) and to assign to the Service such functions
and administrative units as the Secretary may consider ap-
propriate.
(b) HEAD.—If the Secretary establishes the Service, the
Service or any successor administrative unit shall be headed
by an Administrator who shall be appointed by the Presi-
dent, by and with the advice and consent of the Senate.
(c) FUNCTIONS.—The Secretary may carry out
through the Service, or through any other officer or admin-
istrative unit as the Secretary may consider appropriate—
(1) electric and telephone loan programs and
water and waste facility activities authorized by law,
including—
(A) the Rural Electrification Act of 1936 (7
U.S.C. 901 et seq.); and
(B) section 2322 of the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C.
1926–1); and
(2) water and waste facility programs and ac-
tivities authorized by law, including—